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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (Fee Required)
For the Fiscal Year Ended September 30, 1996
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 0-20757
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TRAVIS BOATS & MOTORS, INC.
(Exact name of registrant as specified in its charter)
TEXAS 74-2024798
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Indentification Number)
13045 RESEARCH BLVD., AUSTIN, TEXAS 78750
(Address of principal executive offices)
Registrant's telephone number, including area code: (512) 250-8103
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, $.01 PAR VALUE
(Title of class)
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Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceeding 12 months (or for such shorter period that
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] No [_]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of Registrant's knowledge, in definitve proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [_]
The aggregate market value of the voting stock (which consists solely of
shares of Common Stock) held by non-affiliates of the Registrant as of
December 23, 1996, (based upon the last reported price of $13.00 per share)
was approximately $29,654,989 on such date.
The number of shares of the issuer's Common Stock, par value $.01 per share,
outstanding as of December 23, 1996 was 4,136,506 of which 2,281,153 shares
were held by non-affiliates.
Documents Incorporated by reference: Portions of Registrant's Proxy
Statement relating to the 1997 Annual Meeting of Stockholders to be held in
March 1997, have been incorporated by reference herein (Part III).
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TRAVIS BOATS & MOTORS, INC. AND CONSOLIDATED SUBSIDIARIES
FORM 10--K
TABLE OF CONTENTS
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PAGE
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RISK FACTORS....................................................................................... 1
PART I
Item 1. Business................................................................................. 6
Item 2. Properties............................................................................... 10
Item 3. Legal Proceedings........................................................................ 10
Item 4. Submission of Matters to a Vote of Security Holders...................................... 10
PART II
Item 5. Market for Registrant's Common Stock and Related Shareholder Matters..................... 11
Item 6. Selected Financial Data.................................................................. 12
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.... 13
Item 8. Financial Statements..................................................................... 19
Item 9. Changes in and Disagreements with Accountants and Financial Disclosure................... 19
PART III
Item 10. Directors and Executive Officers......................................................... 20
Item 11. Executive Compensation................................................................... 20
Item 12. Security Ownership of Certain Beneficial Owners and Management........................... 20
Item 13. Certain Relationships and Related Transactions........................................... 20
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K......................... 21
Index to Consolidated Financial Statements............................................... 21
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RISK FACTORS
This 10K Report 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 10K Report.
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 six-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."
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. In fact,
the State of Texas and other southern states have recently experienced severe
drought conditions which, in addition to causing potential restrictions on
boating activities on certain area lakes, are expected to materially and
adversely impact the regional economies of the affected states. There can be
no assurance that these drought conditions in the regional markets served by
the Company will not have a material adverse effect on the operations of
certain of the Company's locations and, accordingly, the Company's business,
financial condition and results of operations. 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
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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.
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 ten new store locations in Texas,
Arkansas, Louisiana, Alabama and Tennessee. During the time period of fiscal
1991 through fiscal 1996, these new stores collectively accounted for
approximately 40.2% of the Company's aggregate net sales and approximately
47.7% of aggregate pre-tax income. Comparable store sales increased 12.2% for
the twelve months ended September 30, 1995 and 4.3% in fiscal 1996. 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. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations."
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."
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.
This system is operational in each of the Company's 15 stores. There can be no
assurance 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.
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
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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 and 1996 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 second 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 22.7% of the Company's net purchases in fiscal 1996 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.
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 each of its broader target markets.
While the Company believes it can sell products of other manufacturers in new
markets, there can be no assurance that all of the Company's current
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 had 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.
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. For example, during fiscal 1996, F&I
Products accounted for approximately 4.2% of net sales and approximately 16.5%
of gross profit. The Company's lenders may choose to pursue this business
directly, rather than through intermediaries such as the
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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.
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.
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.
Control by Officers and Directors. The executive officers and directors of
the Company own approximately 50.9% of the issued and outstanding shares of
the Company's Common Stock. 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.
Volatility of Stock Price. Prior to the Company's initial public offering in
June 1996, there was no public trading market for the Company's Common Stock.
There can be no assurance of an ongoing active trading market or that the
market price of the Common Stock will not decline. It is anticipated that
there will be limited float in the market due to the relatively low number of
shares owned by 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
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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."
Shares Eligible for Future Sale. Sales of substantial amounts of the
Company's Common Stock in the public market, 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, hold, in the aggregate, 2,683,506 shares of Common Stock. 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.
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 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.
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PART I
Other than statements of historical fact, all statements contained in this
10-K Report, including statements in "Item 1. Business," and "Management's
Discussion and Analysis of Financial Condition and Results of Operations," may
contain forward-looking statements. Forward-looking statements in this 10-K
Report generally are accompanied by words such as "anticipate," "believe,"
"estimate," "project," "of the opinion that," "expect" or similar statements.
Although the Company believes that the expectations reflected in such forward-
looking statements are reasonable, no assurance can be given that such
expectations are accurate. Factors that could cause the Company's results to
differ materially from the results discussed in such forward-looking
statements include the risks described under "Risk Factors." All forward-
looking statements in this Prospectus are expressly qualified in their
entirety by the cautionary statements in this paragraph.
ITEM 1. BUSINESS
General
Travis Boats & Motors, Inc. ("Travis Boats" or the "Company") 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 15 superstores under the name Travis Boating Center in
Texas, Arkansas, Louisiana, Alabama and Tennessee, 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.
History
Travis Boats was incorporated as a Texas corporation in 1979. As used herein
and unless otherwise required by the context, the terms "Travis Boats" and the
"Company" shall mean Travis Boats & Motors, Inc. and its direct and indirect
subsidiaries.
Since its founding as a single retail store in Austin, Texas, the Company
has grown both through acquisitions and the establishment of new store
locations. 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 proprietary Travis
Edition packaging concept and the Company's pricing philosophy. Since 1991,
Travis Boats has opened or acquired (through asset purchases) ten additional
store locations: Texas (3), Arkansas (2), Louisiana (2), Alabama (2) and
Tennessee (1).
Included in the new store acquisitions are the following transactions:
Effective September 20, 1995, the Company acquired substantially all of the
assets of Red River Marine, Inc. ("Red River Marine"). Red River Marine, a
leading boat retailer in Arkansas, operates stores in the resort communities
of Hot Springs and Heber Springs.
Effective December 1, 1995, the Company acquired substantially all of the
assets of Clay's Boats & Motors, Inc., the operator of a single store location
in New Iberia, Louisiana.
Subsequent to September 30, 1996, the Company has completed the acquisition
of two corporations operating three retail boating store locations. Effective
October 3, 1996, the Company acquired substantially all of the assets of North
Alabama Watersports, the operator of a single store location in Florence,
Alabama.
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Effective November 1, 1996, the Company acquired substantially all of the
assets of Tri-Lakes Marine, Inc., which operates store locations in Winchester,
Tennessee and Huntsville, Alabama
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.
Substantially all of the boats sold range in size from 16 to 23 feet at prices
ranging from $7,500 to $23,000 with gross profit margins between approximately
21% and 23%. Approximately 6% of new boat sales are personal watercraft with
retail prices generally ranging from $5,000 to $8,000 and 3% of new boat sales
are cruisers ranging in price from $30,000 to $100,000. 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.
The Company believes that it offers a selection of boat, motor and trailer
packages that fall within the price range of the majority of all boats, motors
and trailers sold in the United States. The Company's product line generally
consists of boat packages priced from $7,500-$23,000 with approximate even
distribution within this price range. Management believes that by combining
flexible financing arrangements with an even distribution of products through a
broad price range, the Company is able to offer boat packages to customers with
different purchasing budgets and varying income levels.
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.
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, with
favorable delivery schedules and with distinguishing
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features and accessories that have historically been unavailable to, or listed
as optional by, many competitors. 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. These features often include enhanced styling such as
additional exterior colors, complete instrumentation in dashboards, transoms
warrantied for life, canopy tops, trolling motors, upgraded interiors with
stereos, wood grain dashboards, in-dash depth finders, stainless steel motor
propellers and enhanced hull design not available on other models. 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 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.
Boat Show Participation. The Company also participates in boat shows,
typically held in January through March, 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 to display their respective
product offerings. 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.
F&I Products. In the Company's efforts to maintain customer service and
support for customers purchasing its Travis Edition boat packages it also
offers customers the ability to purchase extended service contracts and
insurance coverages, including credit life and accident/disability coverages
(collectively "F&I Products"). The Company also offers to assist the customer
obtain financing for their boat purchase through a diversified group of
financial institutions with which the Company maintains financing agreements.
The Company earns commissions on these F&I Products based upon the Company's
mark up over the cost of these products. These F&I Products account for a
substantial portion of the Company's income, the most significant component of
which is the income resulting from the Company's origination of customer
financing.
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% and 22.7% of the Company's net purchases in
fiscal 1995 and 1996, respectively, were from GenMar Industries which
manufactures the AquaSport, Cajun and Larson boat lines.
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 second 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
8
<PAGE>
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% and $20.3 million, or 38.7%,
of the Company's net purchases during fiscal 1995 and 1996, respectively.
Pursuant to its arrangements with certain manufacturers, the Company's right
to display some product lines in certain markets may be restricted.
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 May of the following year. Management believes that these financing
arrangements are standard within the industry. As of September 30, 1996, the
Company and its subsidiaries owed an aggregate of approximately $3.5 million
pursuant to the floor plan financing agreements.
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 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.
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.
9
<PAGE>
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.
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.
Employees. As of September 30, 1996, the Company's staff consisted of 232
employees, 219 of whom are full time. The full-time employees include 13 in
store level management and 16 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.
ITEM 2. 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 November 30, 1996.
<TABLE>
<CAPTION>
LOCATION SQUARE FOOTAGE* ACREAGE* OWNED OR 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,
Louisiana(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,
Arkansas(4)............ 26,000 9.0 Leased 1995
Hot Springs,
Arkansas(4)............ 20,510 3.0 Owned 1995
New Iberia,
Louisiana(4)........... 24,000 3.3 Leased 1995
Florence,
Alabama(4)(5).......... 22,500 6.0 Leased 1996
Huntsville,
Alabama(4)(5).......... 2,000 3.0 Leased 1996
Winchester,
Tennessee(4)(5)........ 25,000 3.5 Leased 1996
</TABLE>
- --------
* Square footage and acreage are approximate.
(1) Newly constructed store.
(2) Facility acquired and converted to superstore.
(3) Temporary facility. To be relocated.
(4) Acquired facility.
(5) Acquired subsequent to September 30, 1996.
10
<PAGE>
ITEM 3. 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.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of security holders of the Company during
the fourth quarter of the fiscal year ended September 30, 1996.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
The Company's common stock trades on the Nasdaq Stock Market under the
symbol: TRVS. At December 27, 1996, the Company had 35 shareholders of record;
however the Company believes its shares are beneficially owned by more than
400 shareholders. On December 23, 1996, the last reported sales price of the
common stock on the NASDAQ National Market System was $13.00 per share.
The following table sets forth for the period indicated, on a per share
basis, the range of high and low sales prices for the Company's common stock
as quoted by the NASDAQ. These price quotations reflect inter-dealer prices,
without adjustment for retail mark-ups, mark-downs or commissions and may not
necessarily represent actual transactions:
<TABLE>
<CAPTION>
SALES PRICE
---------------------
QUARTER ENDED HIGH LOW ENDING
------------- ------ ------ -------
<S> <C> <C> <C>
June 30, 1996.......................................... $9 1/2 $ 9.00 $ 9 1/8
September 30, 1996..................................... $13.00 $8 1/4 $12 3/8
</TABLE>
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.
11
<PAGE>
ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA
The following selected consolidated financial information should be read in
conjunction with and is qualified in its entirety by reference to the
consolidated financial statements of the Company and the notes thereto
included elsewhere in this Form 10K:
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
<CAPTION>
FISCAL YEAR ENDED FISCAL YEAR TWELVE MONTHS TWELVE MONTHS FISCAL YEAR
DECEMBER 31,(1) ENDED ENDED ENDED ENDED
------------------------- SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30,
1992 1993 1994 1995(1) 1995(3) 1995(2) 1996(1)(4)
------- ------- ------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT
OF OPERATIONS DATA:
Net sales.............. $18,317 $25,757 $37,225 $41,442 $44,617 $45,006 $64,555
Gross profit........... 4,193 5,946 8,734 10,306 10,815 11,254 16,483
Selling, general and
administrative
expenses.............. 3,293 4,496 6,333 6,353 7,526 7,904 10,857
Operating income....... 767 1,270 2,135 3,736 3,004 3,007 5,061
Interest expense....... 462 449 629 670 845 946 1,289
Net income............. 255 596 1,023 2,050 1,486 1,408 2,383
Net income per share... $ 0.10 $ 0.23 $ 0.39 $ 0.76 $ 0.55 $ 0.53 $ 0.78
Weighted avg. shares
outstanding........... 2,564 2,564 2,600 2,672 2,663 2,675 3,043
STORE DATA:
Stores open at period
end................... 7 7 8 11 11 12 12
Average sales per
store(5).............. $ 3,025 $ 3,679 $ 4,653 $ 4,886 $ 5,283 $ 4,946 $ 5,617
Percentage increase in
comparable store
sales(6).............. 7.4% 25.6% 28.4% 5.0% 12.2% 16.0% 4.3%
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31,
------------------- SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30,
1992 1993 1994 1995 1995 1996
----- ------ ------ ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
CONSOLIDATED BALANCE
SHEET DATA:
Cash and cash equiva-
lents................. $ 104 $ 139 $ 259 $ 996 $ 673 $1,533
Working capital........ 874 11 1,866 2,808 1,855 15,263
Total assets........... 9,727 14,088 17,434 23,357 35,590 31,350
Short-term debt,
including current
maturities
of long-term debt..... 6,798 10,608 10,977 11,443 24,776 4,661
Long-term debt less
current maturities.... 1,538 1,013 2,588 4,876 5,426 4,334
Stockholders' equity... 814 1,485 2,562 4,812 4,097 18,598
</TABLE>
- --------
(1) The Company's fiscal years ended on December 31 in 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. The Consolidated Statement of
Operations Data for the fiscal years ended December 31, 1993 and 1994 and
September 30, 1995 and 1996 has been derived from the consolidated
financial statements of the Company. All other financial and store data
has been derived from the Company's unaudited consolidated financial
statements.
(2) Reflects inclusion of nine-month audited financial statements for the
fiscal year ended September 30, 1995 and the 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) Reflects inclusion of nine-month audited financial statements for the
fiscal year ended September 30, 1995 and the three-month unaudited
financial statements for the quarter ended December 31, 1994, in order to
provide a basis for comparing 12 months of operations in 1995 to fiscal
1996 operations.
(4) The operations of Red River Marine, Inc. acquired in September 1995 and
Clay's Boats & Motors, Inc. acquired in December 1995 are included for the
fiscal 1996 period. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and Note 4 of Notes to Consolidated
Financial Statements.
(5) Includes only those stores open for the entire preceeding 12-month period.
(6) New stores or upgraded facilities are included in comparable store base at
the beginning of the store's thirteenth complete month of operations.
12
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with the consolidated
financial statements of the Company and the notes thereto included elsewhere in
the 10-K Report. The discussion in this section of the 10K Report 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 10K report.
Overview
The Company acquired substantially all of the assets of Red River Marine,
Inc. ("Red River Marine") on September 20, 1995 and also acquired substantially
all of the assets of Clay's Boats & Motors, Inc. on December 1, 1995. The
results of Red River Marine and Clay's Boats & Motors from their respective
acquisition dates through September 30, 1996 are included in the discussion
below.
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 1996 to the 12 month period ended
September 30, 1995, which reflects the inclusion of the nine-month audited
consolidated financial statements for the fiscal year ended September 30, 1995
and the three-month unaudited consolidated financial statements for the quarter
ended December 31, 1994 in order to provide a basis for comparing 12 months of
operations.
The following discussion also compares fiscal 1994 to calendar year 1995,
which reflects the inclusion of the nine-month audited consolidated financial
statements for the fiscal year ended September 30, 1995 and the 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.
13
<PAGE>
The following table sets forth for the periods indicated certain financial
data as a percentage of net sales:
<TABLE>
<CAPTION>
FISCAL YEARS ENDED
--------------------------
TWELVE MONTHS TWELVE MONTHS FISCAL YEAR
ENDED ENDED ENDED
DECEMBER 31, SEPTEMBER 30, SEPTEMBER 30, DECEMBER 31, SEPTEMBER 30,
1994 1995 1995 1995 1996
------------ ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Net sales............... 100.0% 100.0% 100.0% 100.0% 100.0%
Costs of goods sold..... 76.5 75.1 75.8 75.0 74.5
----- ----- ----- ----- -----
Gross profit............ 23.5 24.9 24.2 25.0 25.5
Selling, general and
administrative
expenses............... 17.0 15.3 16.9 17.6 16.8
Operating income........ 5.7 9.0 6.7 6.7 7.8
Interest expense........ 1.7 1.6 1.9 2.1 2.0
Other income............ 0.2 0.3 0.0 0.0 0.0
----- ----- ----- ----- -----
Income before income
taxes.................. 4.2 7.7 5.2 4.9 5.9
Income tax expense...... 1.5 2.8 1.9 1.9 2.2
----- ----- ----- ----- -----
Net income.............. 2.7% 4.9% 3.3% 3.1% 3.7%
===== ===== ===== ===== =====
</TABLE>
RESULTS OF OPERATIONS
Highlights
Fiscal year 1996 was a record year for the Company, which included the
following achievements compared to the 12 month period ended September 30,
1995:
--Net sales increased 45% to $64.6 million.
--Gross profit margins increased by 1.3% from 24.2% to 25.5%.
--Operating income increased as a percentage of net sales by 1.1% from 6.7%
to 7.8%.
--Net income increased by 60% from $1.5 million to $2.4 million.
--Earnings per share increased by 42% from $.55 to $.78.
FISCAL YEAR ENDED SEPTEMBER 30, 1996 COMPARED TO THE TWELVE MONTHS ENDED
SEPTEMBER 30, 1995
Net sales. Net sales increased by 45% to $64.6 million in fiscal 1996 from
$44.6 million in the twelve months ended September 30, 1995. Of this increase,
$780,000 was attributable to 4.3% growth in comparable store sales (4 stores
in base) and $16.6 million, or 83.0% is related to the four stores acquired or
newly opened in 1995 and $2.5 million, or 12.5% is related to the four store
existing store locations which relocated or upgraded facilities to meet the
Company's superstore standards during fiscal 1996. General growth in overall
sales volume was in part the result of growth in new boating packages
introduced in fiscal 1996 and in the expanded offering of boating packages
introduced in 1995 along with increased sales of parts/accessories, service
labor and F&I Products. Net sales also benefitted from 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 or
certain other large retailers. The "parking lot" program which was initiated
with several shows in late 1995, expanded during fiscal 1996 to include a
full-time travelling sales team and participation in approximately 35 parking
lot shows (primarily during the second and third fiscal quarters) which
generated net sales of approximately $2.5 million.
Net sales from comparable stores, which had 4 stores included in the base
for calculation, increased 4.3% in fiscal 1996. The Company relocated or
renovated 4 stores and acquired or opened an additional 4 stores during fiscal
years 1995 and 1996 rendering such locations to be excluded from the
comparable store base. The Company's planned acquisition strategy and
subsequent renovation of stores to superstore standards is expected
14
<PAGE>
to continue to negatively impact the number of stores includable in comparable
store base calculations in relationship to the total number of store locations
operated. See "Risk Factors--Dependence on Expansion." As such, comparable
store performance is expected to remain unstable until higher percentages of
the Company's stores are includable in comparable store calculations.
Included within net sales is revenue that the Company earns related to F&I
Products. The Company, through relationships with various national and local
lenders, is able to place financing for its customers' boating purchases.
These lenders allow the Company to "sell" the loan at a rate higher than a
minimum rate established by each such lender and the Company earns fees based
on the percentage increase in the loan rate over the lender's minimum rate.
The Company sells these loans without recourse except that in certain
instances the Company must return the fees earned if the customer repays the
loan or defaults in the first 120-180 days. The Company also sells, as a
broker, certain types of insurance (property/casualty, credit life,
disability) and extended service contracts. The Company may also sell these
products at amounts over a minimum established cost and earn income based upon
the profit over the minimum established cost. Net sales attributable to F&I
Products increased by 75.3% to $2.7 million in fiscal 1996 from $1.6 million
in the twelve months ended September 30, 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 as "sell-through"). This increase was enhanced by the
Company's continued emphasis on training of F&I employees and achievement of
established goals.
Gross profit. Gross profit increased by 52.8% to $16.5 million in fiscal
1996 from $10.8 million in the twelve months ended September 30, 1995. Gross
profit as a percent of sales increased to 25.5% in fiscal 1996 from 24.2% in
the twelve months ended September 30, 1995. The Company generally seeks to
maintain a gross profit margin of 21% to 23% on its boating packages and is
able to further leverage the margin through sales of parts/accessories,
service labor and F&I Products, all of which generally produce gross profit
margins in excess of 25%.
Net sales attributable to F&I Products, which have a significant impact on
the gross profit margin, contributed $2.7 million, or 16.4%, of total gross
profit in fiscal 1996, as compared to $1.6 million, or 14.8%, of total gross
profit for the twelve months ended September 30, 1995. Net sales attributable
to F&I Products are reported on a net basis and therefore all of such sales
contribute directly to the Company's gross profit. The costs associated with
the sale of F&I Products are included in selling, general and administrative
expenses.
Selling, general and administrative expenses. Selling, general and
administrative expenses increased by 45.3% to $10.9 million in fiscal 1996
from $7.5 million for the twelve months ended September 30, 1995. Selling,
general and administrative expenses as a percent of net sales decreased to
16.8% in fiscal 1996 from 16.9% for the twelve months ended September 30,
1995. The decrease in selling, general and administrative expenses as a
percent of net sales was the result of the economies of operating a larger
store base and regional market presence, particularly in the leveraging of
advertising, insurance, rents and depreciation/amortization expenses. In terms
of dollars, the increase in selling, general and administrative expenses 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 completing the implementation
of the Company's management information system in all of its stores operating
as of September 30, 1996. Additionally, the Company's management information
system has been implemented in the three store locations acquired since
September 30, 1996.
Interest expense. Interest expense, in actual dollars, increased by 45.7% to
$1.3 million in fiscal 1996 from $845,000 in the twelve months ended September
30, 1995. However, interest expense as a percent of net sales remained flat at
1.9% and 2.0% in the 1995 and 1996 periods, respectively. The Company incurred
additional debt levels in the acquisition of Red River Marine and Clay's Boats
& Motors as well as higher balances on the Company's floor plan lines of
credit necessary to support inventory requirements for the additional stores
and actual increase in net sales. Effective with the funding of the Company's
Initial Public Offering in late June of
15
<PAGE>
1996 and an additional 140,500 shares in the over-allotment options, the
Company reduced certain revolving indebtedness and certain long term
indebtedness. This reduction of debt in the Company's third and fourth fiscal
quarters provided for the containment of interest expense and its percentage
decrease as a percent of net sales. The Company intends to reborrow under its
revolving credit lines as necessary to fund future acquisitions and to support
working capital needs. See "Liquidity and Capital Resources."
Net income. Net income increased by 60.3% to $2.4 million in fiscal 1996
from $1.5 million in the twelve months ended September 30, 1995. Net income as
a percent of sales increased to 3.7% from 3.4% during the same periods. Net
income attributable to F&I Products increased by 73.8% to $810,000 in fiscal
1996 from $466,000 in the twelve months ended September 30, 1995. The
calculation of net income attributable to F&I Products is based on an
allocation of gross profit after adjusting for costs which management believes
are directly allocable to F&I Products.
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. Net sales attributable to F&I Products increased by
45% to $1.6 million in calendar 1995 from $1.1 million in fiscal 1994.
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 a line of high performance bass boats manufactured by
Viper 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
16
<PAGE>
commission; accordingly, increased sales volume leads to higher commissions
and payroll taxes. Due to the 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 in net income was due
primarily to the increased sales volume, greater sell-through of F&I Products
and improved leverage of general and administrative expenses. Net income
attributable to F&I Products increased by 28% to $475,000 in calendar 1995
from $371,000 in fiscal 1994. The Company's net income as a percent of net
sales increased to 3.1% in calendar 1995 from 2.7% in fiscal 1994.
Quarterly Data and Seasonality
The following table sets forth certain unaudited quarterly financial data
for each of the Company's last eight 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 FISCAL YEAR 1995 FISCAL YEAR 1996
1994 --------------------------- ------------------------------------
DEC. 31 MARCH 31 JUNE 30 SEPT. 30 DEC. 31 MARCH 31 JUNE 30 SEPT. 30
------- -------- ------- -------- ------- -------- ------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales............... $3,175 $13,452 $17,048 $10,942 $3,564 $18,453 $26,445 $16,093
Gross profit............ 508 3,266 4,300 2,740 948 4,623 6,613 4,299
Selling, general and
administrative
expenses............... 1,173 2,044 2,347 1,962 1,551 2,751 3,767 2,788
Operating income
(loss)................. (732) 1,152 1,883 701 (729) 1,736 2,705 1,349
Interest expense........ 174 196 265 209 276 393 424 196
Net income (loss)....... (564) 662 1,046 342 (642) 885 1,416 724
Net Income per Share.... (.21) .24 .39 .13 (.24) .32 .52 .18
Wtd. Average Shares
Outstanding............ 2,636 2,648 2,684 2,684 2,684 2,684 2,741 4,097
<CAPTION>
AS A PERCENTAGE OF NET SALES
--------------------------------------------------------------------------
<S> <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%
Gross profit............ 16.0 24.3 25.2 25.0 26.6 25.1 25.0 26.7
Selling, general and
administrative
expenses............... 36.9 15.2 13.8 17.9 43.5 14.9 14.2 17.3
Operating income
(loss)................. (23.1) 8.6 11.0 6.4 (20.5) 9.4 10.2 8.4
Interest expense........ 5.5 1.5 1.6 1.9 7.7 2.1 1.6 1.2
Net income (loss)....... (17.8) 4.9 6.1 3.1 (17.9) 4.8 5.4 4.5
</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
17
<PAGE>
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.
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.
Quarterly results may fluctuate as a result of the expenses associated with
new store openings or acquisitions. The Company historically has attempted 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 September 30, 1996, the Company had working capital of $15.3 million,
including $1.3 million in accounts receivable (primarily contracts in transit
from sales) and $20.6 million in inventories, offset by approximately $1.6 of
accounts payable and accrued liabilities, $3.5 million outstanding under floor
plan lines of credit, approximately $500,000 under open lines of credit and
$1.5 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
September 30, 1996, the aggregate maximum borrowing limits under floor plan and
working capital lines of credit were approximately $30.0 million and $575,000,
respectively.
Operating activities provided cash flows of $2.7 million for the fiscal year
ended September 30, 1995 due primarily to net income of $2.1 million and
changes in working capital. In fiscal 1996, operating activities utilized cash
flows of $2.1 million due primarily to increase of $6.2 million in inventories,
offset partially by unearned revenue of $1.2 million relating to a volume
purchase from a manufacturer (which is not expected to occur in future
periods). Of the increase in inventories, approximately $4.4 million is related
to stocking of the newly acquired store locations since they are generally
acquired in the off-season and have little remaining inventory to be purchased.
Subsequently, the Company maintains a representative level of stocking of its
Travis Edition boating packages and generally over 9,000 stock keeping units in
parts/accessories.
Financing activities in fiscal 1996 provided $4.0 million of cash flows
primarily from the net proceeds of the initial public offering of $11.4 million
which were offset by the prepayment of certain amounts of in long term debt and
revolving credit lines. Prior to the initial public offering increases in
inventories were financed with borrowings under the Company's floor plan and
working capital lines of credit. Effective December 12, 1996, the Company
entered into a new $15.0 million revolving line of credit agented by
NationsBank of Texas, N.A. This credit facility replaces the previously
existing floor plan lines of credit and revolving credit lines totalling
approximately $13.8 million with Hibernia Bank and NationsBank. The line
provides for borrowing
18
<PAGE>
pursuant to a borrowing formula based upon the certain of the Company's
inventory and accounts receivable. Collateral consists of a security interest
in specific inventories (and proceeds thereof), accounts receivable and
contracts in transit. The line is annually renewable with the initial maturity
on October 31, 1997 and pricing is at the prime rate minus .375%, with a fee of
.125% on the unused portion to be assessed quarterly. A comprehensive loan
agreement governs the line of credit. The agreement contains financial
covenants regulating debt service coverages, tangible net worth, operating
leverage and restrictions on dividends or distributions. As of December 24,
1996, $12,000,000 was drawn on the revolving line and management believes the
Company to be in compliance with the terms and conditions of this loan
agreement.
The Company also maintains floor plan lines of credit with various finance
companies totalling approximately $22 million credit limits, which generally
have no stated maturity and utilize subsidies from manufacturers to provide for
certain interest free periods each calendar year (usually August through May).
Certain floor plan lines of credit with finance companies are governed by loan
agreements containing certain financial covenants concerning, among others,
minimum tangible net worth and leverage ratios. As of September 30, 1996,
approximately $3.5 million was drawn under the floor plan lines and management
believes the Company was in compliance with the terms and conditions of these
loan agreements.
Merchandise inventories were $14.3 million and $20.6 million as of September
30, 1995 and September 30, 1996, respectively. Accounts receivable increased by
approximately $300,000 to $1.3 million at the end of fiscal 1996 from a year
earlier. The receivables amount represents primarily contracts in transit
generated from sales. Costs in excess of net assets acquired increased to by
approximately $13,000 to $1.1 million in fiscal 1996 due to the acquisition of
Clay's Boats & Motors in December 1995.
The Company had net capital expenditures of approximately $2.8 million in the
12 months ended September 30, 1995, and approximately $1.4 million in fiscal
1996. 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. During fiscal 1996 the Company acquired
substantially all of the assets of Clay's Boats & Motors, substantially
renovated facilities in Beaumont, Houston and San Antonio to superstore
standards and completed the installation of its new management information
systems in its existing store locations. These capital expenditures were
substantially financed with long-term debt provided by commercial banks and
individuals at fixed interest rates.
The Company's revolving credit facility, floor plan lines of credit and
internally generated working capital should be sufficient to meet the Company's
cash requirements in the near future.
New Accounting Standards
In March 1995, the Financial Accounting Standards Board (FASB) issues
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 adopted Statement No. 121 effective October 1, 1995 No material
impact to the Company's results of operations or financial position resulted
from such adoption.
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, 1997. 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.
19
<PAGE>
Inflation
The Company believes that inflation generally has not had a material impact
on its operations or liquidity to date.
ITEM 8. FINANCIAL STATEMENTS
For the financial statements and supplementary data required by this Item 8,
see the Index to Consolidated Financial Statements and Schedules.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS
There is incorporated herein by reference that portion of the Company's proxy
statement for the 1997 Annual Meeting of Stockholders which appears therein
under the captions "Item 1: Election of Directors" and "Information Concerning
Directors."
ITEM 11. EXECUTIVE COMPENSATION
There is incorporated in this Item 11 by reference that portion of the
Company's definitive proxy statement for the 1997 Annual Meeting of
Stockholders which appears under the caption "Executive Compensation."
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
There is incorporated in this Item 12 by reference that portion of the
Company's definitive proxy statement for the 1997 Annual Meeting of
Stockholders which appears under the caption "Securities Holdings of Principal
Stockholders, Directors, Nominees and Officers."
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There is incorporated in this Item 13 by reference that portion of the
Company's definitive proxy statement for the 1997 Annual Meeting of
Stockholders which appears under the captions "Certain Relationships and
Related Transactions" and "Compensation Committee Interlocks and Insider
Participation."
20
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(A) 1. FINANCIAL STATEMENTS
The following consolidated financial statements of the Company are included
following the Index to Consolidated Financial Statements and Schedules on page
F-1 of this Report.
<TABLE>
<S> <C>
Report of Ernst & Young LLP, Independent Auditors........................ F-1
Consolidated Balance Sheets.............................................. F-2
Consolidated Statements of Income........................................ F-3
Consolidated Statements of Shareholder's Equity.......................... F-4
Consolidated Statements of Cash Flows.................................... F-5
Notes to Consolidated Financial Statements............................... F-6
</TABLE>
(A) 2. FINANCIAL STATEMENT SCHEDULES
All other schedules have been omitted because they are not applicable, not
required under the instructions, or the information requested is set forth in
the consolidated financial statements or related notes thereto.
(A) 3. EXHIBITS
The following Exhibits are incorporated by reference to the filing or are
included following the Index to Exhibits.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits: Except as otherwise noted, all Exhibits have been previously
filed with Registrant's S-1 Dated June 1996.
<TABLE>
<C> <S>
3.1 Restated Articles of Incorporation of the Registrant, as amended.
3.2 Restated Bylaws of the Registrant, as amended.
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>
21
<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.
10.22 Form of Option Agreement dated May 17, 1995, between the Company
and Michael B. Perrine, Ronnie L. Spradling and Mark T. Walton.
</TABLE>
22
<PAGE>
<TABLE>
<C> <S>
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(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.
10.27(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.
16 Letter re change in certifying accountant.
</TABLE>
INDEX TO EXHIBITS
INSERT "E" TO COME
No annual report or proxy material has been sent to security holders as of
the date of this Form 10-K; however, the Company anticipates sending the
annual report and proxy materials on or before any applicable deadlines. When
such a report and proxy materials are furnished, the Registrant will furnish
copies of such materials to the Commission.
- --------
+ 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.
The following exhibits are filed herewith
<TABLE>
<C> <S>
10.29(a) Revolving Credit Agreement dated as of December 12, 1996, in the
original principal amount of $15,000,000 by and among the Company,
its Subsidiaries and NationsBank of Texas, N.A. as agent.
10.29(b) Commercial Security Agreement dated as of December 12, 1996 by and
among the Company, its Subsidiaries and NationsBank of Texas, N.A.
as agent
10.29(c) Promissory Note dated as of December 12, 1996 in ane original
principal amount of $9,000,000 among the Company, its subsidiaries
and NationsBank of Texas, N.A., as agent
10.29(d) Promissory Note dated as of December 12, 1996 in the koriginal
principal amount of $6,000,000 among the Company, its subsidiaries
and NationsBank of Texas, N.A. as agent.
10.30 Asset Purchase Agreement dated as of November 1, 1996 between
Travis Boating Center Tennessee, Inc. and Tri-Lakes Marine, Inc.
10.31 Asset Purchase Agreement dated as of November 1, 1996 between
Travis Boating Center Alabama, Inc. and Tri-Lakes Marine, Inc.
21.1 List of Subsidiaries of Registrant.
</TABLE>
23
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934, THE REGISTRANT HAS CAUSED THIS REPORT TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.
Travis Boats & Motors, Inc.
/s/ Mark T. Walton
By: _________________________________
CHAIRMAN OF THE BOARD AND
PRESIDENT
Date: December 27, 1996
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES AND ON THE DATES INDICATED.
NAME CAPACITY DATE SIGNED
/s/ Mark T. Walton Chairman of the December 27,
- ------------------------------------- Board, President 1996
MARK T. WALTON and Director
(Principal
Executive Officer)
/s/ Michael B. Perrine Chief Financial December 27,
- ------------------------------------- Officer, Secretary 1996
MICHAEL B. PERRINE and Treasurer
(Principal
Financial and
Accounting Officer)
/s/ Ronnie L. Spradling Executive Vice December 27,
- ------------------------------------- President-New Store 1996
RONNIE L. SPRADLING Development and
Director
/s/ E. D. Bohls Director December 27,
- ------------------------------------- 1996
E. D. BOHLS
/s/ Steven W. Gurasich, Jr. Director December 27,
- ------------------------------------- 1996
STEVEN W. GURASICH, JR.
/s/ Zach McClendon, Jr. Director December 27,
- ------------------------------------- 1996
ZACH MCCLENDON, JR.
/s/ Robert C. Siddons Director December 27,
- ------------------------------------- 1996
ROBERT C. SIDDONS
/s/ Joseph E. Simpson Director December 27,
- ------------------------------------- 1996
JOSEPH E. SIMPSON
24
<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, 1996 and 1995 and the
related consolidated statements of operations, stockholders' equity and cash
flows for the year ended September 30, 1996, 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, 1996 and 1995 and the
consolidated results of their operations and their cash flows for the year
ended September 30, 1996, the nine-month period ended September 30, 1995, and
the year ended December 31, 1994 in conformity with generally accepted
accounting principles.
November 25, 1996, except for Note 2, as to which the date is December 23,
1996
F-1
<PAGE>
TRAVIS BOATS & MOTORS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
SEPTEMBER 30
------------------------
1996 1995
----------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.......................... $ 1,532,942 $ 996,058
Accounts receivable................................ 1,330,642 1,046,717
Prepaid expenses................................... 102,094 48,559
Inventories........................................ 20,554,166 14,270,312
Deferred tax asset................................. 160,815 115,375
----------- -----------
Total current assets............................. 23,680,659 16,477,021
Property and equipment:
Land............................................... 1,815,718 1,815,718
Buildings and improvements......................... 4,908,861 4,183,718
Furniture, fixture and equipment................... 1,847,086 1,351,449
----------- -----------
8,571,665 7,350,885
Less accumulated depreciation...................... (2,024,953) (1,559,693)
----------- -----------
6,546,712 5,791,192
Deferred tax asset................................... 39,187 21,300
Goodwill, net of accumulated amortization of $32,037
in 1996 and $-0- in 1995............................ 806,035 750,000
Noncompete agreement, net of accumulated amortization
of $42,857 in 1996 and $-0- in 1995................. 257,143 300,000
Other assets......................................... 20,672 17,150
----------- -----------
Total assets..................................... $31,350,408 $23,356,663
=========== ===========
LIABILITIES
Current liabilities:
Accounts payable................................... $ 239,852 $ 461,919
Accrued liabilities................................ 1,388,810 1,188,355
Federal income taxes payable....................... 953,523 576,157
Unearned revenue................................... 1,174,159 --
Current portion of notes payable and other short-
term obligations.................................. 4,661,104 11,442,625
----------- -----------
Total current liabilities........................ 8,417,448 13,669,056
Notes payable, less current portion.................. 4,334,494 4,875,745
Stockholders' equity:
Serial preferred stock, $.01 par value, 1,000,000
shares authorized, no shares issued or
outstanding....................................... -- --
Common stock, $.01 par value, 50,000,000 shares
authorized, 4,136,506 and 2,683,506 issued and
outstanding at September 30, 1996 and 1995,
respectively...................................... 41,365 26,835
Paid-in capital.................................... 11,527,498 138,511
Retained earnings.................................. 7,029,603 4,646,516
----------- -----------
Total stockholders' equity....................... 18,598,466 4,811,862
----------- -----------
Total liabilities and stockholders' equity..... $31,350,408 $23,356,663
=========== ===========
</TABLE>
See accompanying notes.
F-2
<PAGE>
TRAVIS BOATS & MOTORS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED YEAR ENDED
SEPTEMBER 30 SEPTEMBER 30 DECEMBER 31
1996 1995 1994
------------ ------------- -----------
<S> <C> <C> <C>
Net sales............................ $64,555,273 $41,442,349 $37,224,643
Cost of sales........................ 48,072,499 31,136,555 28,490,216
----------- ----------- -----------
Gross profit......................... 16,482,774 10,305,794 8,734,427
Selling, general and administrative
expenses............................ 10,857,413 6,352,844 6,332,883
Depreciation and amortization........ 563,991 216,965 266,299
----------- ----------- -----------
11,421,404 6,569,809 6,599,182
Operating income..................... 5,061,370 3,735,985 2,135,245
Interest expense..................... (1,289,064) (670,020) (628,685)
Other income......................... 60,781 133,849 61,348
----------- ----------- -----------
Income before income taxes........... 3,833,087 3,199,814 1,567,908
Income taxes......................... 1,450,000 1,149,621 544,439
----------- ----------- -----------
Net income........................... $ 2,383,087 $ 2,050,193 $ 1,023,469
=========== =========== ===========
Net income per common share.......... $ .78 $ .76 $ .39
=========== =========== ===========
Weighted average common shares
outstanding......................... 3,043,329 2,672,919 2,600,098
</TABLE>
See accompanying notes.
F-3
<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,
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
Issuance of common
stock................ 1,453,000 14,530 13,062,470 -- -- 13,077,000
Common stock issuance
costs................ -- -- (1,673,483) -- -- (1,673,483)
Net income............ -- -- -- 2,383,087 -- 2,383,087
--------- ------- ----------- ---------- --------- -----------
Balance at September 30,
1996................... 4,136,506 $41,365 $11,527,498 $7,029,603 $ -- $18,598,466
========= ======= =========== ========== ========= ===========
</TABLE>
See accompanying notes.
F-4
<PAGE>
TRAVIS BOATS & MOTORS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED YEAR ENDED
SEPTEMBER 30 SEPTEMBER 30 DECEMBER 31
1996 1995 1994
------------ ------------ -----------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income........................... $ 2,383,087 $ 2,050,193 $ 1,023,469
Adjustments to reconcile net income
to net cash used in operating
activities:
Depreciation and amortization...... 563,991 216,965 266,299
Loss on disposal of assets......... -- -- 19,381
Changes in operating assets and
liabilities:
(Increase) decrease in accounts
receivable...................... (283,925) (823,109) 151,895
(Increase) decrease in prepaid
assets.......................... (53,535) 24,631 62,687
(Increase) decrease in
inventories..................... (6,152,835) 349,830 (2,790,629)
(Increase) decrease in other
assets.......................... (3,522) 23,017 9,700
Increase in deferred tax asset... (63,327) (136,675) --
Increase (decrease) in accounts
payable......................... (222,067) 265,863 (141,593)
Increase in accrued liabilities.. 200,455 404,190 586,597
Increase in federal income taxes
payable......................... 377,366 349,622 25,296
Increase in unearned revenue..... 1,174,159 -- --
Decrease in deferred charges..... -- -- (21,011)
----------- ----------- -----------
Net cash provided by (used in)
operating activities................ (2,080,153) 2,724,527 (807,909)
INVESTING ACTIVITIES
Purchase of business................. (262,687) (916,345) --
Purchase of property and equipment... (1,134,967) (1,885,345) (937,004)
----------- ----------- -----------
Net cash used in investing
activities.......................... (1,397,654) (2,801,690) (937,004)
FINANCING ACTIVITIES
Net increase (decrease) in notes
payable and other short-term
obligations......................... (7,388,826) 715,027 1,935,964
Net proceeds from issuance of common
stock............................... 11,403,517 72,268 61,488
Redemption of preferred stock........ -- (100,000) (125,000)
Net proceeds (issuance) on notes
receivable--stockholders............ -- 127,174 (7,949)
----------- ----------- -----------
Net cash provided by financing
activities.......................... 4,014,691 814,469 1,864,503
Increase in cash and cash
equivalents......................... 536,884 737,306 119,590
Cash and cash equivalents, beginning
of year............................. 996,058 258,752 139,162
----------- ----------- -----------
Cash and cash equivalents, end of
year................................ $ 1,532,942 $ 996,058 $ 258,752
=========== =========== ===========
</TABLE>
See accompanying notes.
F-5
<PAGE>
TRAVIS BOATS & MOTORS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
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 12 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 consist of boats, motors, trailers and related watersport parts
and accessories. Inventories are carried at the lower of cost or market. Cost
for boats, motors and trailers is determined using the specific identification
method. Cost for parts and accessories is determined using the first-in,
first-out method.
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 September 30, 1996 and December
31, 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.
Intangible Assets
Amounts assigned to intangible assets are amortized over the respective
estimated useful lives using the straight-line method as follows:
<TABLE>
<S> <C>
Noncompete agreement........................................ 7 years
Goodwill.................................................... 15 to 25 years
</TABLE>
F-6
<PAGE>
TRAVIS BOATS & MOTORS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Goodwill and other intangible assets are recorded at the lower of
unamortized cost or fair value. Management reviews the valuation and
amortization of intangible assets on a periodic basis, taking into
consideration any events or circumstances which might result in diminished
fair value. If this review indicates goodwill will not be recoverable, as
determined by the undiscounted cash flows of the entity acquired over the
remaining amortization period, the carrying value of the goodwill is reduced
by the estimated shortfall of cash flows.
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 due from vendors under
rebate programs. There was no allowance for doubtful accounts recorded at
September 30, 1996 and 1995.
Pre-opening Costs
Pre-opening costs related to new store locations are expensed as incurred.
Significant Suppliers
The Company purchased substantially all of its new outboard motors in 1996,
1995 and 1994 from a single outboard motor manufacturer.
Approximately 20% of the Company's net purchases in fiscal 1996, 1995 and
1994 were from a single boat supplier.
Advertising Costs
Advertising costs are expensed as incurred and were approximately $508,382,
$353,000 and $334,000 during the year ended September 30, 1996, the nine
months ended September 30, 1995, and the year ended December 31, 1994.
Notes Payable and Other Short-Term Obligations
Interest expense on notes payable and other short-term obligations is
recorded as incurred. No interest expense is recorded during portions of the
year on certain floor plan payables which include noninterest bearing payment
terms.
Net Income per Common Share
Net income per common share is based on the weighted average number of
common shares outstanding during the period. The effect of common stock
equivalents is not significant.
Unearned Revenue
Amounts received from vendors in connection with agreed upon rebates or
discounts are deferred until the related product is sold and such rebate or
discount is earned.
F-7
<PAGE>
TRAVIS BOATS & MOTORS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Recently Issued Accounting Standards
In March 1995, the Financial Accounting Standards Board (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 adopted Statement No. 121 effective October 1, 1995. No material
impact to the Company's results of operations or financial position resulted
from such adoption.
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, 1997. 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.
2. NOTES PAYABLE AND OTHER SHORT-TERM OBLIGATIONS
Notes payable and other short-term obligations consist of the following:
<TABLE>
<CAPTION>
SEPTEMBER 30
-------------------------
1996 1995
----------- ------------
<S> <C> <C>
Floor plans payable.............................. $ 3,474,398 $ 10,302,562
Revolving lines of credit........................ 500,000 667,143
Notes payable.................................... 5,021,200 5,348,665
----------- ------------
Total notes payable and other short-term
obligations................................... 8,995,598 16,318,370
Less current portion............................. (4,661,104) (11,442,625)
----------- ------------
Total notes payable and other short-term
obligations, less current portion............. $ 4,334,494 $ 4,875,745
=========== ============
Floor plans payable consist of the following:
<CAPTION>
SEPTEMBER 30
-------------------------
1996 1995
----------- ------------
<S> <C> <C>
Floor plan payable to bank under a $7,500,000
revolving line of credit agreement with interest
floating at prime minus .375%, maturing October
1997............................................ $ -- $ 2,163,267
Floor plan payable to bank under revolving line
of credit agreements totaling $5,725,000 with
interest floating at prime plus .50%, maturing
August 1996 through November 1996............... -- 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... 3,474,398 6,914,906
----------- ------------
Total floor plans payable...................... $ 3,474,398 $ 10,302,562
=========== ============
</TABLE>
The floor plans payable are secured by specific boat, motor and trailer
inventory, as well as general security filings on all inventory and certain
equipment. The floor plans payable to finance companies include noninterest
F-8
<PAGE>
TRAVIS BOATS & MOTORS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
bearing payment terms for part of the calendar year (typically the months of
August through May). As of September 30, 1996 and 1995, the amount of
noninterest bearing floor plans payable to finance companies was $3,274,781 and
$6,522,829, respectively.
Floor plans payable of certain of the Company's subsidiaries are guaranteed
by the Company. Certain floor plans payable 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>
SEPTEMBER 30
-----------------
1996 1995
-------- --------
<S> <C> <C>
Note payable to bank under a revolving line of credit
agreement with interest at prime minus .375%, due October
1997..................................................... $500,000 $470,000
Note payable to bank under revolving line of credit
agreements with interest at prime plus 1%, due September
1996 and November 1996................................... -- 197,143
-------- --------
Borrowings under revolving lines of credit................ $500,000 $667,143
======== ========
</TABLE>
The weighted average interest rate on floor plan payables and revolving lines
of credit outstanding as of September 30, 1996 and 1995 is 3.7% and 5.3%,
respectively.
Notes payable consist of the following:
<TABLE>
<CAPTION>
SEPTEMBER 30
---------------------
1996 1995
---------- ----------
<S> <C> <C>
Mortgage notes payable to various banks,
organizations and individuals under deeds of trust
with interest ranging from 5.0% to prime plus 1% due
in installments ranging from $1,225 monthly
including interest to $30,114 semiannually plus
interest, maturing beginning in April 1998.......... $3,729,458 $3,266,475
Notes payable to various banks, a corporation and an
individual for vehicles, equipment and leasehold im-
provements with interest ranging from 6.99% to
9.75%, due in monthly installments ranging from $333
to $3,062, maturing beginning in December 1996...... 449,472 580,524
Notes payable to individuals with interest at prime
plus 1% fixed annually, due in annual principal in-
stallments of $20,000 (aggregate) plus interest, ma-
turing October 1997, collateralized by approximately
90,000 shares of the Company's outstanding common
stock owned by certain directors and officers of the
Company............................................. -- 60,000
Notes payable (unsecured) to corporation(s) owned by
various stockholders of the Company and to stock-
holder's individually, with interest due quarterly
at various rates at or below prime plus 1%, maturing
October 1996........................................ -- 641,666
Note payable to an individual with interest at 8.75%,
due in monthly principal and interest installments
of $12,770, maturing November 2002.................. $ 735,582 $ 800,000
Note payable to an individual with interest at 8.75%
due in monthly principal and interest installments
of $3,057, maturing March 1998...................... 56,688 --
---------- ----------
Total notes payable.................................. $5,021,200 $5,348,665
========== ==========
</TABLE>
F-9
<PAGE>
TRAVIS BOATS & MOTORS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Certain notes payable are secured by assets of the Company including
inventory, accounts receivable, equipment, leasehold improvements, vehicles,
land and buildings. Notes payable of certain of its subsidiaries are
guaranteed by the Company and certain other notes payable are guaranteed in
limited dollar amounts by various stockholders of the Company.
Interest paid approximates interest expense plus interest capitalized, if
any, during 1996, 1995 and 1994.
Aggregate maturities required on notes payable at September 30, 1996 are as
follows:
<TABLE>
<CAPTION>
YEAR ENDING
SEPTEMBER 30
------------
<S> <C>
1997.......................................................... $ 686,706
1998.......................................................... 657,698
1999.......................................................... 513,438
2000.......................................................... 543,004
2001.......................................................... 353,569
Thereafter.................................................... 2,266,785
----------
$5,021,200
==========
</TABLE>
Effective December 12, 1996, the Company entered into a new $15.0 million
revolving line of credit agreement with a bank which replaces certain
previously existing floor plans payable and revolving lines of credit.
3. LEASES
The Company leases various facilities under operating leases. Rent expense
was $263,710 in 1996, $188,581 in 1995 and $214,421 in 1994. 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>
1997.............................................................. $169,566
1998.............................................................. 138,450
1999.............................................................. 140,250
2000.............................................................. 136,200
2001.............................................................. 72,000
Thereafter........................................................ --
</TABLE>
In addition, under most of the Company's leases, the Company has renewal
options at varying terms.
4. ACQUISITIONS
Red River Marine, Inc.
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 $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 purchase price ($1,050,000) was allocated to a noncompete
agreement ($300,000) and goodwill ($750,000).
F-10
<PAGE>
TRAVIS BOATS & MOTORS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Clay's Boats and Motors, Inc.
Effective December 1, 1995, the Company acquired certain assets of Clay's
Boats and 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 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.
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>
SEPTEMBER 30
-----------------
1996 1995
-------- --------
<S> <C> <C>
Deferred tax assets:
Book over tax depreciation.............................. $ 39,187 $ 21,300
Accrued salaries and wages.............................. 160,815 115,375
-------- --------
Total deferred tax assets............................. 200,002 136,675
Valuation allowance for deferred tax assets............... -- --
-------- --------
Net deferred tax assets............................... $200,002 $136,675
======== ========
</TABLE>
Significant components of the provisions for income taxes are as follows:
<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED YEAR ENDED
SEPTEMBER 30 SEPTEMBER 30 SEPTEMBER 30,
1996 1995 1994
------------ ------------ -------------
<S> <C> <C> <C>
Current expense:
Federal.......................... $1,342,327 $1,243,371 $523,589
State............................ 171,000 42,925 20,850
---------- ---------- --------
Total current expense.......... 1,513,327 1,286,296 $544,439
Deferred expense (benefit):
Federal.......................... (56,171) (130,900) --
State............................ (7,156) (5,775) --
---------- ---------- --------
Total deferred expense
(benefit)..................... (63,327) (136,675) --
---------- ---------- --------
Total provision for income
taxes....................... $1,450,000 $1,149,621 $544,439
========== ========== ========
</TABLE>
F-11
<PAGE>
TRAVIS BOATS & MOTORS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
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 ENDED YEAR ENDED
SEPTEMBER 30 SEPTEMBER 30 DECEMBER 31
1996 1995 1994
------------ ------------- -----------
<S> <C> <C> <C>
Income tax expense at the federal
statutory rate.................... $1,303,250 $1,087,937 $533,089
State income taxes................. 163,844 37,150 20,850
Other.............................. (17,094) 24,534 (9,500)
---------- ---------- --------
$1,450,000 $1,149,621 $544,439
========== ========== ========
</TABLE>
Income taxes paid were approximately $1,088,000, $855,000 and $528,000 in
the year ended September 30, 1996, the nine months ended September 30, 1995
and the year ended December 31, 1994, respectively.
6. STOCKHOLDERS' EQUITY
In March 1994, the Board of Directors of the Company approved a 199 to 1
stock dividend for stockholders of record as of March 31, 1994.
In November 1995, the Board of Directors of the Company approved a 15 to 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 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 changes in par value.
In March 1995, the Company granted options to purchase shares of the
Company's common stock to certain officers of the Company which vest over five
years.
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-12
<PAGE>
TRAVIS BOATS & MOTORS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Total option activity for the year ended September 30, 1996, the nine months
ended September 30, 1995 and the year ended December 31, 1994, was as follows:
<TABLE>
<CAPTION>
NUMBER OF
SHARES PRICE $
--------- -----------
<S> <C> <C>
Outstanding at December 31, 1994..................... -- --
Granted............................................ 133,867 $5.25
Exercised.......................................... -- --
Expired............................................ -- --
-------
Outstanding at September 30, 1995.................... 133,867 $5.25
Granted............................................ 110,999 $9.00
Exercised.......................................... -- --
Expired............................................ (13,333) $9.00
-------
Outstanding at September 30, 1996.................... 231,533 $5.25-$9.00
=======
Exercisable at September 30
1996............................................... 53,439 $5.25-$9.00
Options available for grant at September 30
1996............................................... 102,334
Common stock reserved for issuance at September 30,
1996................................................ 333,867
</TABLE>
7. RELATED PARTY TRANSACTIONS
The Company sells extended service contracts to its customers. For the
period from January 1, 1994 through June 27, 1996, the obligations of the
Company under these contracts were transferred to Ideal Insurance Company,
Ltd. ("Ideal") pursuant to an agreement between the Company and Ideal dated as
of January 1, 1994. Ideal reinsured 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 paid 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 received a commission
for each extended service contract that it sold. For the year ended September
30, 1996, the nine months ended September 30, 1995 and the year ended December
31, 1994, extended service contract commissions received from Amerisure
totaled approximately $411,000, $448,000 and $350,000, respectively. The
Company transferred the obligations under the extended service contracts sold
subsequent to June 27, 1996 to entities other than Ideal and Amerisure.
8. 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.
9. SUBSEQUENT EVENTS
Effective October 3, 1996, the Company acquired certain assets of North
Alabama Watersports, Inc. ("NAWS"). This acquisition included land and
building and boat, motor and trailer inventory, as well as parts and
accessories inventory of each location. The purchase price was $892,255, of
which $79,707 was financed by the issuance of notes payable to the seller.
F-13
<PAGE>
TRAVIS BOATS & MOTORS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
The acquisition has been accounted for using the purchase method of
accounting and, accordingly, the operating results of NAWS have been included
in the consolidated financial statements from the date of acquisition. The
purchase price ($892,255) has been allocated to the tangible net assets
acquired ($687,255) based on their respective fair values at the date of
acquisition. The resulting excess purchase price ($205,000) was allocated to a
noncompete agreement and goodwill.
Effective November 1, 1996, the Company acquired Tri-Lakes Marine, Inc.
("Tri-Lakes") with retail store locations in Tennessee and Alabama. The
acquisition included land, building, furniture, fixtures and equipment, boat,
motor and trailer inventory, as well as all parts and accessories. The
purchase price was $1,242,924, of which $642,924 was paid in cash and $600,000
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 Tri-Lakes have been
included in the consolidated financial statements from the date of
acquisition. The purchase price ($1,242,924) and liabilities assumed
($1,937,279) have been allocated to the tangible net assets acquired
($2,536,092) based on their respective fair values at the date of acquisition.
The resulting excess purchase price ($644,111) was allocated to a noncompete
agreement and to goodwill.
F-14
<PAGE>
EXHIBIT 10.29(a)
================================================================================
REVOLVING CREDIT AGREEMENT
Dated as of
December 12, 1996
among
Travis Boats & Motors, Inc.,
Travis Snowden Marine, Inc.,
Travis Boating Center Arlington, Inc.,
Falcon Marine, Inc.,
Falcon Marine Abilene, Inc.,
Travis Boating Center Beaumont, Inc.,
Travis Boats & Motors Baton Rouge, Inc.,
TBC Arkansas, Inc.,
TBC Management, Ltd.,
TBC Management, Inc.,
Travis Boating Center Louisiana, Inc.,
Travis Boating Center Tennessee, Inc.,
Travis Boating Center Alabama, Inc.,
Red River Marine Arkansas, Inc.,
Travis Boating Center Little Rock, Inc.,
Travis Boating Center Georgia, Inc. and
Travis Boating Center Florida, Inc.
as Borrowers
and
NATIONSBANK OF TEXAS, N.A.
as Agent
and
NATIONSBANK OF TEXAS, N.A.
AND THE OTHER ENTITIES DESIGNATED HEREIN
as Lenders
================================================================================
<PAGE>
TABLE OF CONTENTS
ARTICLE I
<TABLE>
<CAPTION>
<S> <C> <C>
TERMS DEFINED ........................................................ 1
Section 1.1. Definitions............................................. 2
Section 1.2. Singular and Plural of Definitions...................... 17
Section 1.3. Money................................................... 17
Section 1.4. Captions; References.................................... 17
Section 1.5. Accounting Terms and Determinations..................... 17
</TABLE>
ARTICLE II
<TABLE>
<CAPTION>
<S> <C> <C>
COMMITMENT ........................................................ 17
Section 2.1. Credit Facility Commitment.............................. 17
Section 2.2. Method of Borrowing..................................... 19
Section 2.3. Fees.................................................... 21
</TABLE>
ARTICLE III
<TABLE>
<CAPTION>
<S> <C> <C>
TERMS OF CREDIT FACILITY............................................... 22
Section 3.1. Notes................................................... 22
Section 3.2. Maturity................................................ 22
Section 3.3. Interest Rate........................................... 22
Section 3.4. Mandatory Interest Payments............................. 22
Section 3.5. Payments of Advances; Reduction of Commitment
Amount.................................................. 23
Section 3.6. Schedules on Notes...................................... 23
Section 3.7. General Provisions as to Payments....................... 24
Section 3.8. Application of Payments................................. 24
Section 3.9. Post-Default Interest; Past Due Principal and
Interest................................................ 24
Section 3.10. Computation of Interest and Fees........................ 24
Section 3.11. Deposit of Cash Collateral.............................. 24
Section 3.12. Joint and Several Liability............................. 25
Section 3.13. Collateral; Renewal and Extension of Existing
Indebtedness and Security............................... 25
Section 3.14 Title Documents......................................... 25
</TABLE>
ARTICLE IV
<TABLE>
<CAPTION>
<S> <C> <C>
CONDITIONS TO FUNDING 26
Section 4.1. Conditions Precedent.................................... 26
Section 4.2. Conditions To All Advances.............................. 27
Section 4.3. Conditions to Letters of Credit......................... 28
</TABLE>
i
<PAGE>
ARTICLE V
<TABLE>
<CAPTION>
<S> <C> <C>
REPRESENTATIONS AND WARRANTIES......................................... 29
Section 5.1. Existence, Power of Borrower............................ 29
Section 5.2. Authorization; Contravention............................ 29
Section 5.3. Enforceable Obligations................................. 29
Section 5.4. Financial Information................................... 29
Section 5.5. Litigation.............................................. 30
Section 5.6. ERISA................................................... 30
Section 5.7. Taxes and Filing of Tax Returns......................... 30
Section 5.8. Ownership or Lease of Assets............................ 31
Section 5.9. Business; Compliance.................................... 31
Section 5.10. Compliance with Law..................................... 31
Section 5.11. Full Disclosure......................................... 31
Section 5.12. Environmental Matters................................... 31
Section 5.13. Purpose of Credit....................................... 32
Section 5.14. Governmental Regulations................................ 32
Section 5.15. Indebtedness............................................ 32
Section 5.16. Insurance............................................... 32
Section 5.17. Solvency................................................ 32
Section 5.18. Subsidiaries............................................ 32
Section 5.19. Locations............................................... 32
Section 5.20. Trademarks, Tradenames, etc............................. 32
Section 5.21. Business Relationships.................................. 33
</TABLE>
ARTICLE VI
<TABLE>
<CAPTION>
<S> <C> <C>
AFFIRMATIVE COVENANTS.................................................. 33
Section 6.1. Information From Borrowers.............................. 33
Section 6.2. Business of Borrower.................................... 35
Section 6.3. Right of Inspection..................................... 35
Section 6.4. Maintenance of Insurance................................ 35
Section 6.5. Payment of Taxes, Impositions and Claims................ 36
Section 6.6. Compliance with Laws and Documents...................... 36
Section 6.7. Environmental Law Compliance and Indemnity.............. 36
Section 6.8. Covenant Compliance..................................... 37
Section 6.9. Quantity and Quality of Documents....................... 37
Section 6.10. Additional Documents.................................... 37
</TABLE>
ii
<PAGE>
ARTICLE VII
<TABLE>
<CAPTION>
<S> <C> <C>
NEGATIVE COVENANTS..................................................... 38
Section 7.1. Operating Leverage Ratio................................ 38
Section 7.2. Minimum Consolidated Tangible Net Worth................. 38
Section 7.3. Coverage Ratio.......................................... 38
Section 7.4. Limitation on Sale of Properties........................ 38
Section 7.5. Limitations on Liens.................................... 38
Section 7.6. Change in Business, Consolidations, Mergers,
Sales of Assets, and Maintenance........................ 38
Section 7.7. Investments............................................. 38
Section 7.8. Distributions........................................... 39
Section 7.9. Transactions with Affiliates............................ 39
Section 7.10. Limitation on Contingent Liabilities.................... 39
Section 7.11. Employee Plans.......................................... 39
Section 7.12. Use Violations.......................................... 40
Section 7.13. Fiscal Year and Accounting Methods...................... 40
Section 7.14. Governmental Regulations................................ 40
Section 7.15. Subsidiaries............................................ 40
</TABLE>
ARTICLE VIII
<TABLE>
<CAPTION>
<S> <C> <C>
DEFAULTS AND REMEDIES.................................................. 40
Section 8.1. Events of Default....................................... 40
Section 8.2. Remedies................................................ 42
Section 8.3. Rights of Set-Off....................................... 43
Section 8.4. Remedies Cumulative, Concurrent and Non-Exclusive....... 44
Section 8.5. No Conditions Precedent to Exercise Remedies............ 44
Section 8.6. Release of and Resort to Collateral..................... 44
Section 8.7. Waivers................................................. 45
Section 8.8. Discontinuance of Proceedings........................... 45
Section 8.9. Application of Proceeds................................. 45
Section 8.10. Power of Attorney....................................... 45
</TABLE>
ARTICLE IX
<TABLE>
<CAPTION>
<S> <C> <C>
AGENT AND THE LENDERS.................................................. 46
Section 9.1. Appointment and Authorization of Agent.................. 46
Section 9.2. Possession of Instruments by Agent...................... 47
Section 9.3. Expenses................................................ 47
Section 9.4. Delegation of Duties; Reliance; Consultation............ 48
Section 9.5. Limitation of Agent's Liability......................... 48
Section 9.6. Default................................................. 49
Section 9.7. Lenders' Decision....................................... 49
</TABLE>
iii
<PAGE>
<TABLE>
<S> <C> <C>
Section 9.8. Limitation of Liability of Lenders...................... 50
Section 9.9. Relationship of Lenders................................. 50
Section 9.10. Debtor-Creditor Relationship............................ 50
Section 9.11. Credit Decisions........................................ 50
Section 9.12. Removal of Agent........................................ 50
Section 9.13. Resignation by Agent.................................... 51
Section 9.14. Sharing of Payments and Setoffs......................... 51
Section 9.15. Non-advancing Lenders................................... 52
Section 9.16. Benefit of Lenders...................................... 52
</TABLE>
ARTICLE X
<TABLE>
<CAPTION>
<S> <C> <C>
MISCELLANEOUS 53
Section 10.1. Continuing Agreement.................................... 53
Section 10.2. Notices................................................. 53
Section 10.3. No Waivers.............................................. 53
Section 10.4. Expenses; Documentary Taxes; Indemnification............ 54
Section 10.5. Amendments and Waivers; Consent to Deviation............ 54
Section 10.6. Survival................................................ 54
Section 10.7. Prior Understandings; No Defenses; Release; No
Oral Agreements......................................... 54
Section 10.8. Limitation on Interest.................................. 55
Section 10.9. Invalid Provisions...................................... 55
Section 10.10. Successors and Assigns.................................. 56
Section 10.11. Senior Debt; Borrower Subordination..................... 59
Section 10.12. Revolving Loan.......................................... 59
Section 10.13. Construction............................................ 59
Section 10.14. APPLICABLE LAW.......................................... 59
Section 10.15. ARBITRATION............................................. 59
Section 10.16. JURY TRIAL WAIVER....................................... 61
Section 10.17. Counterparts............................................ 61
Section 10.18. Inconsistent Provisions................................. 61
Section 10.19. Confidentiality......................................... 61
</TABLE>
iv
<PAGE>
EXHIBITS
EXHIBIT A FORM OF NOTE
EXHIBIT B BORROWING BASE CERTIFICATE
EXHIBIT B-1 FORM OF REQUEST FOR ADVANCE
EXHIBIT C FORM OF SUPPLEMENTAL LOAN AND SECURITY AGREEMENT
EXHIBIT D FORM OF ASSIGNMENT AND ACCEPTANCE
EXHIBIT E FORM OF LOC APPLICATION
EXHIBIT F FORM OF COMPLIANCE CERTIFICATE
SCHEDULE I PARTIES TO CREDIT AGREEMENT, NOTICE ADDRESSES AND LENDER SCHEDULE
SCHEDULE II OTHER LENDER OBLIGATIONS
SCHEDULE III LIENS AS OF THE CLOSING DATE
SCHEDULE 5.1 JURISDICTIONS QUALIFIED TO DO BUSINESS IN
SCHEDULE 5.15 DEBT
SCHEDULE 5.19 LOCATIONS
v
<PAGE>
REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT (this "Agreement") is entered into as of
---------
the 12th day of December, 1996, by and among Travis Boats & Motors, Inc., a
Texas corporation ("TBM"), Travis Snowden Marine, Inc., a Texas corporation,
---
Travis Boating Center Arlington, Inc., a Texas corporation, Falcon Marine, Inc.,
a Texas corporation, Falcon Marine Abilene, Inc., a Texas corporation, Travis
Boating Center Beaumont, Inc., a Texas corporation, Travis Boats & Motors Baton
Rouge, Inc., a Louisiana corporation, TBC Arkansas, Inc., an Arkansas
corporation, TBC Management, Ltd., a Texas limited partnership, TBC Management,
Inc., a Delaware corporation, Travis Boating Center Louisiana, Inc., a Louisiana
corporation, Travis Boating Center Tennessee, Inc., a Texas corporation, Travis
Boating Center Alabama, Inc., a Texas corporation, Red River Marine Arkansas,
Inc., an Arkansas corporation, Travis Boating Center Little Rock, Inc., an
Arkansas corporation, Travis Boating Center Georgia, Inc., a Texas corporation
and Travis Boating Center Florida, Inc., a Texas corporation and any other
entity which may become a party to this Agreement as a borrower, each of which
is designated as a "Borrower" on Schedule I hereto (as modified from time to
----------
time) (hereinafter individually referred to as a "Borrower" and collectively
--------
referred to as "Borrowers" or "Borrowing Group"), and NationsBank of Texas,
--------- ---------------
N.A., a national banking association, for itself and as agent, and the lending
institutions designated as "Lenders" on Schedule I hereto (as modified from time
----------
to time).
PRELIMINARY STATEMENT
---------------------
NationsBank and Hibernia have respectively provided to certain of the
Borrowers the Prior Credit Facilities, which are secured by the Existing
Security Interests. Borrowers have requested that NationsBank and Hibernia
renew, extend, modify and consolidate the Prior Credit Facilities into a single
revolving credit facility from Lenders to the Borrowing Group in an aggregate
amount not to exceed Fifteen Million and No/100 Dollars ($15,000,000.00), to be
secured by a first and prior lien and security interest in the Collateral (in
favor of Agent for the benefit of Lenders including but not limited to the
renewal, extension and assignment in favor of Agent for the benefit of Lenders
of the Existing Security Interests) subject only to the Permitted Encumbrances.
Upon and subject to the terms of this Agreement, Lenders are willing to make
such revolving credit facility available to the Borrowing Group. Accordingly,
in consideration of the mutual covenants contained herein, Borrowers, Agent and
Lenders agree as follows:
<PAGE>
ARTICLE I
TERMS DEFINED
Section 1.1. Definitions. The following terms, as used herein, have the
-----------
following meanings:
"Accessories" shall mean all boat, trailer and motor parts and accessories
-----------
and such other items as reasonably used in watersport activities held by any
Borrower for sale in the business of Borrowers.
"Account" means any and all "Accounts" as that term is defined in the
-------
Security Agreement.
"Advance" means an advance made by Lenders to TBM, on behalf of the
-------
Borrowing Group, pursuant to the terms and conditions of this Agreement, and
shall include a Working Capital Advance, a Draft Advance, or any other advance
made by Lenders for the account of Borrowers pursuant to the provisions of the
Loan Documents.
"Affiliate" means, as to any Person, any Subsidiary of such Person, or any
---------
Person which, directly or indirectly, controls, is controlled by, or is under
common control with such Person. For the purposes of this definition, "control"
means the possession of the power to direct or cause the direction of management
and policies of such Person, whether through the ownership of voting securities,
by contract or otherwise.
"Agent" means NationsBank, in its capacity as agent for the Lenders
-----
hereunder, or any successor agent pursuant to Sections 9.12 and 9.13.
----------------------
"Agreement" means this Revolving Credit Agreement and all renewals,
---------
extensions, modifications, amendments and rearrangements thereof.
"Applicable Environmental Laws" has the meaning set forth in Section 6.7.
----------------------------- -----------
"Applicable Rate" has the meaning set forth in Section 3.3.
--------------- -----------
"Assets" means all of the assets of Borrowers, real or personal, which are
------
included on a balance sheet of such Person prepared in accordance with GAAP.
"Assignment and Acceptance" has the meaning set forth in Section 10.10.
------------------------- -------------
"Authorized Officer" means, as to any Person that is a corporation, any of
------------------
its Chairman, Vice-Chairman, President, Executive Vice President(s), Chief
Executive Officer, Chief Financial Officer, Chief Accounting Officer or
Treasurer, or as to any Person, if such Person is a partnership, the
partnership's general partner or other Person authorized by appropriate action
to execute the Loan Documents or any other documents or certificates to be
executed by such Person hereunder or in connection with any Advance or Letter of
Credit.
<PAGE>
"Available Commitment" means, at any time, the aggregate amount which
--------------------
Borrowers are entitled to borrow under the terms of this Agreement, which amount
shall initially be Fifteen Million and No/100 Dollars ($15,000,000.00), subject
to termination or adjustment as provided in this Agreement.
"Book Value" means the carrying value of the respective asset or liability
----------
on the financial statements of the Borrowers, prepared in accordance with GAAP.
"Borrowers" has the meaning set forth in the introductory paragraph of this
---------
Agreement.
"Borrowing Base" means an amount, as shown in the most recent monthly
--------------
Borrowing Base Certificate, equal to the sum of:
(a) eighty percent (80%) (except for the months of October, November,
December, January, February and March, when the rate shall be ninety
percent (90%)) of Eligible Inventory consisting of new boats, trailers and
motors purchased by Borrowers (or, in the case of Eligible Inventory
acquired by Borrowers in an acquisition of an additional retail store,
purchased by the previous retail store owner) within the previous twelve-
month period;
(b) seventy percent (70%) of Eligible Inventory consisting of new
boats, trailers and motors purchased by Borrowers (or, in the case of
Eligible Inventory acquired by Borrowers in an acquisition of an additional
retail store, purchased by the previous retail store owner) within the
twelve-month period immediately preceding the twelve-month period described
in (a) above; provided, however, that this item (b) may not exceed the
lesser of (i) fifteen percent (15%) of Eligible Inventory or (ii) Three
Million Five Hundred Thousand and No/100 dollars ($3,500,000.00);
(c) fifty percent (50%) of Borrowers' Eligible Accessories, as shown
in the most recent current monthly Borrowing Base Certificate; and
(d) the sum of (i) fifty percent (50%) of the amount owing to
Borrowers for Eligible Contract Discounts which have been outstanding less
than one hundred and twenty (120) days at the date of invoice for Contract
Debtors which settle on a quarterly basis, and (ii) twenty-five percent
(25%) of the amount owing to Borrowers for Eligible Contract Discounts for
Contract Debtors which settle on an annual basis; provided, however, that
this item (d) may not exceed Five Hundred Thousand and No/100 dollars
($500,000.00).
"Borrowing Base Certificate" means a certificate prepared as of each
--------------------------
calendar month end, in the form attached hereto as Exhibit B, completed in all
---------
appropriate respects, executed by an Authorized Officer of TBM and delivered to
Agent within 30 days of such calendar month end.
"Borrowing Base Schedule" means the aging report attached to the Borrowing
-----------------------
Base Certificate which shows the Eligible Inventory, Eligible Accessories, and
Eligible Contract Discounts by aging and by retail store or manufacturer or
supplier, as appropriate.
<PAGE>
"Borrowing Group" has the meaning set forth in the introductory paragraph
---------------
of this Agreement.
"Business Day" means for all purposes of this definition, any day of the
------------
week, other than Saturday, Sunday or other day Agent or any Lender is required
or authorized by law or executive order to close.
"CERCLA" has the meaning set forth in Section 6.7.
------ -----------
"Chattel paper" has the meaning given such term in the Security Agreement.
-------------
"Closing Date" means the date that this Agreement is fully executed.
------------
"Code" means the Internal Revenue Code of 1986, as amended.
----
"Collateral" has the meaning given such term in the Security Agreement,
----------
which includes but is not limited to Inventory (as defined in the Security
Agreement), Receivables, Chattel Paper and Contracts, together with all records
of any kind relating to any of the foregoing and all proceeds, replacements,
products or substitutions of any of the above, in which a security interest has
been granted to Agent for the benefit of Lenders pursuant to the Security
Agreement as security for the Obligations and, to the extent of the payment in
full of the Obligations, as security for the Other Lender Obligations.
"Confidential Information" has the meaning set forth in Section 10.18.
------------------------ -------------
"Consequential Loss" has the meaning set forth in Section 3.6(d).
------------------ --------------
"Consolidated Debt" means at any date, all Debt which is required to be
-----------------
shown as such on the financial statements of Borrowing Group on a consolidated
basis, prepared in accordance with GAAP.
"Consolidated Debt Service" means, for any period, the sum of (a)
-------------------------
Consolidated Interest Expense plus (b) Consolidated Lease Expense plus (c)
----
Consolidated Principal Reduction.
"Consolidated Funded Debt" means, as of any date, all Debt which is
------------------------
evidenced by promissory notes, loan agreements, bonds or similar instruments and
having a final maturity of not less than one year, as such amount is required to
be shown on the financial statements of Borrowing Group on a consolidated basis,
prepared in accordance with GAAP.
"Consolidated Income Available for Debt Service" means, for any period,
----------------------------------------------
determined in accordance with GAAP on a consolidated basis for Borrowing Group
the sum of Consolidated Net Income plus (a) Consolidated Interest Expense, plus
---- ----
(b) Consolidated Lease Expense, plus (c) all non-cash charges each as deducted
----
in determining such Consolidated Net Income, less (d) all non-cash additions
----
each as added in determining Consolidated Net Income.
<PAGE>
"Consolidated Interest Expense" means, for any period, the interest expense
-----------------------------
on Consolidated Funded Debt accruing and payable for such period.
"Consolidated Lease Expense" means for any period the lease expense on any
--------------------------
leases which are classified as capital leases in accordance with GAAP for
Borrowing Group on a consolidated basis.
"Consolidated Net Income" means, for any period, the net income after Taxes
-----------------------
of Borrowing Group on a consolidated basis, determined in accordance with GAAP.
"Consolidated Operating Cash Flow" means, with respect to any period,
--------------------------------
determined in accordance with GAAP on a consolidated basis for Borrowing Group,
the sum of (a) Consolidated Net Income minus (i) extraordinary gains or losses,
-----
if any, and (ii) any write-up or write-down of any assets, plus (b) the sum of
----
(i) Taxes, plus (ii) Consolidated Interest Expense, plus (iii) all amounts
---- ----
attributable to depreciation and/or amortization of intangible and other assets
of Borrowing Group, provided, that, each adjustment to Consolidated Net Income
described above be made only to the extent that such amounts have been deducted
or added in determining Consolidated Net Income for such period.
"Consolidated Principal Reduction" means, for any period, amounts paid in
--------------------------------
reduction of regularly scheduled principal maturing under any Consolidated
Funded Debt.
"Consolidated Tangible Net Worth" means, as of any date, the excess of (i)
-------------------------------
the Assets of Borrowing Group over (ii) the liabilities of Borrowing Group as
required by GAAP to be shown on the balance sheet of Borrowing Group, minus,
-----
without duplication of any item already deducted from the value of Assets, the
aggregate Book Value of Intangible Assets shown on the balance sheet of
Borrowing Group, prepared in accordance with GAAP.
"Contract Debtor" has the meaning set forth in the definition of Eligible
---------------
Contract Discount.
"Contracts" has the meaning given such term in the Security Agreement.
---------
"Credit Facility" means the credit facility arranged by Lenders for
---------------
Borrowers as evidenced by this Agreement.
"Debt" of any Person means at any date, without duplication, (a) all
----
indebtedness, obligations and liabilities of such Person for borrowed money, (b)
all indebtedness, obligations and liabilities of such Person evidenced by bonds,
debentures, notes or other similar instruments, whether recourse or non-recourse
and whether secured or unsecured, (c) all other indebtedness (including
capitalized lease obligations) of such Person on which interest charges are
customarily paid or accrued and (d) all obligations for indebtedness in respect
of Guarantees by such Person.
"Debt Coverage Ratio" means for any date of determination, the ratio of (a)
-------------------
Consolidated Income Available For Debt Service for the immediately preceding
four calendar quarters to (b) Consolidated Debt Service for the immediately
preceding four calendar quarters.
<PAGE>
"Default" means any condition or event which constitutes an Event of
-------
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Default Rate" means the fluctuating per annum rate of interest equal to
------------
the lesser of (a) the Variable Rate plus five percent (5%) or (b) the Maximum
Lawful Rate.
"Designated Successor Agent" means, at any given time, the Lender other
--------------------------
than Agent which has the largest Loan Percentage; provided, however, if two or
more such Lenders have the same Loan Percentage at such time, then the
Designated Successor Agent shall be such of those Lenders having the same Loan
Percentage which has the largest net worth; and, provided further, that if the
Required Lenders object to the newly named Designated Successor Agent, or if any
Lender determined to be a Designated Successor Agent declines to serve as
successor Agent, in writing delivered to the outgoing Agent within seven (7)
Business Days after such Designated Successor Agent is determined, then the
Lender other than Agent or such rejected or declining Designated Successor Agent
which has the next largest Loan Percentage shall be the Designated Successor
Agent. For each such Lender that is a member of a bank holding company, its net
worth shall be deemed to be the consolidated net worth of its bank holding
company.
"Distribution" by any Person, means (a) with respect to any stock issued by
------------
such Person or any partnership or joint venture interest of such person, the
retirement, redemption, repurchase, or other acquisition for value of such
stock, partnership or joint venture interest, (b) the declaration or payment
(without duplication) of any dividend or other distribution, whether monetary or
in kind, on or with respect to any stock, partnership or joint venture of any
Person, and (c) any other payment or distribution of assets of a similar nature
or in respect of an equity investment.
"Draft" means a draft deposited by any of the Borrowers with one of
-----
NationsBank's Texas branches (or any other branch outside the state of Texas as
NationsBank may from time to time approve), arising out of the sale of a boat,
motor and/or trailer in form acceptable to agent which shall comply with the
meaning ascribed to the term "draft" in Section 3.104 of the UCC.
"Draft Advance" means an advance by NationsBank in the form of immediate
-------------
credit to the account of the applicable Borrower for a Draft deposited pursuant
to Section 2.2(b), and which remains outstanding until (a) NationsBank receives
--------------
final payment from the respective third-party lending institution or (b) such
Draft is returned to NationsBank unpaid, in whole or in part, by the third-party
lending institution, at which time the amount of the unpaid portion of the
applicable Draft Advance shall be debited to the account of the applicable
Borrower in accordance with Section 2.1(e) hereof.
--------------
"Draft Advance Exposure" means the aggregate amount of the unpaid portion
----------------------
of each Draft Advance outstanding at any time.
<PAGE>
"Eligible Accessories" means, at the time of any determination thereof, the
--------------------
combined Book Value of the collective Accessories of Borrowers as to which the
following requirements and conditions have been fulfilled to the reasonable
satisfaction of Agent:
(a) such Accessories are not subject to any Lien whatsoever (other
than Liens in favor of the Agent) and any Liens on the Accessories are
expressly released as collateral securing any third party creditor Debt;
(b) Borrowers have legal and beneficial title to such Accessories and
the absolute right to assign and grant a security interest in the same to
Agent;
(c) such Accessories are subject to a fully perfected, first priority
security interest in favor of Agent pursuant to the Security Agreement; and
(d) Agent, in its reasonable discretion, has not deemed such
Accessories to be ineligible.
"Eligible Contract Discount" means, at the time of any determination
--------------------------
thereof, the amount owing to any of the Borrowers for rebate or volume discount
programs under Contracts as to which the following requirements and conditions
have been fulfilled to the reasonable satisfaction of Agent:
(a) Such Contract is a valid, legally enforceable obligation of a
manufacturer or supplier who is obligated under such Contract ("Contract
--------
Debtor") in connection with a rebate or volume discount program;
------
(b) Such Contract has arisen from goods sold by a Contract Debtor to
any of the Borrowers;
(c) Such Contract represents bona fide transactions which have arisen
from arm's length transactions between unrelated parties;
(d) Such amounts owing for rebates and discounts under such Contracts
are not subject to setoff, counterclaim, defense, allowance, dispute, or
adjustment;
(e) Such amounts owing for rebates and discounts under such Contracts
are not subject to any Lien whatsoever (except Permitted Encumbrances and
Liens in favor of the Lenders);
(f) The monetary obligations of the Contract Debtor under such
Contracts are payable in lawful currency of the United States of America;
(g) For rebate and discount balances in excess of Two Hundred Fifty
Thousand and No/100 Dollars ($250,000.00), such amounts owing for rebates
and discounts under such Contracts are not owed by a Contract Debtor for
whom Agent has
<PAGE>
reasonably determined that the payment of such amounts are doubtful because
of such Contract Debtor's financial condition;
(h) No default shall have occurred and be continuing with respect to
such Contract and it is in full force and effect, and Borrowers have the
absolute right to assign and grant a security interest in such Contract to
Agent;
(i) Such Contract is subject to a fully perfected, first priority
security interest in favor of Agent pursuant to the Security Agreement; and
(j) Agent, in its reasonable discretion, has not deemed the Contract
to be an ineligible Contract.
"Eligible Assignee" means any of (a) a commercial bank organized under the
-----------------
laws of the United States, or any State thereof or the District of Columbia; (b)
a savings and loan association or savings bank organized under the laws of the
United States, or any State thereof or the District of Columbia; (c) a
commercial bank organized under the laws of any other country which is a member
of the Organization for Economic Cooperation and Development (the "OECD"), or a
----
political subdivision of any such country, provided that such bank is acting
through a branch or agency located in the country in which it is organized or
another country which is also a member of the OECD; (d) the central bank of any
country which is a member of the OECD; or (e) an insurance company, pension
fund, credit corporation or other finance company organized under the laws of
any state of the United States; provided, however, that no institution described
-------- -------
in clause (a), (b), (c), (d), or (e) above shall be an Eligible Assignee unless
it has total assets in excess of $1 billion; and, provided further, that an
----------------
institution described in clause (c) or (d) above must maintain a branch or
agency under the laws of the United States.
"Eligible Inventory" means, at the time of any determination thereof, the
------------------
combined Book Value of the collective Inventory of Borrowers as to which the
following requirements and conditions have been fulfilled to the reasonable
satisfaction of Agent:
(a) the boats, trailers and motors were purchased by Borrowers (or,
in the case of Inventory acquired by Borrowers in an acquisition of an
additional retail store, purchased by the previous retail store owner)
within the previous twenty-four month period;
(b) such Inventory is not subject to any Lien whatsoever (other than
Liens in favor of the Agent) and any Liens on such Inventory are expressly
released as collateral securing any third party creditor Debt;
(c) Borrowers have legal and beneficial title to such Inventory and
the absolute right to assign and grant a security interest in the same to
Agent;
(d) such Inventory is subject to a fully perfected, first priority
security interest in favor of Agent pursuant to the Security Agreement; and
<PAGE>
(e) Agent, in its reasonable discretion, has not deemed such
Inventory to be ineligible.
"Employee Plan" means at any time an employee benefit plan as defined in
-------------
Section 3(3) of ERISA that is now or was previously maintained, sponsored or
contributed to by any of the Borrowers or by any Person that at such time is or
was an ERISA Affiliate of any of the Borrowers.
"Equipment" has the meaning given such term in the Security Agreement.
---------
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time, together with all regulations issued pursuant
thereto.
"ERISA Affiliate" means any Person that is treated as a single employer
---------------
with any of the Borrowers under Section 414 of the Code.
"Event of Default" has the meaning set forth in Section 8.1.
---------------- -----------
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
------------
"Existing Security Interests" means the security interests respectively in
---------------------------
favor of NationsBank and Hibernia granted to secure the Prior Credit Facilities,
the security agreements evidencing such security interests being more
particularly described on Exhibit A to the Security Agreement.
---------
"Facility Fee" shall mean the non-refundable fee equal to (a) 0.125% times
------------ -----
(b) the average daily unused portion of the Available Commitment, less the
amount of the Draft Advance Exposure, during the calendar quarter immediately
preceding the date on which such fee is to be paid.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
------------------
upwards if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day, provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (b) if no such rate is so published on such next succeeding Business Day,
the federal Funds Rate for such day shall be the average rate quoted to Agent on
such day on such transactions from three federal funds brokers of recognized
standing.
"Fiscal Year" means any fiscal year of the Borrowing Group or any Borrower,
-----------
commencing on October 1 and ending on September 30.
"GAAP" means generally accepted accounting principles consistently applied
----
as in effect at the time of application of the provisions hereof.
<PAGE>
"Governmental Authority" means any government, any state or other political
----------------------
subdivision thereof, or any Person exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government.
"Guaranty" by any Person means any obligation, contingent or otherwise, of
--------
such Person directly or indirectly guaranteeing any Debt of any other Person
and, without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Debt or other
obligation (whether arising by virtue of partnership arrangements, by agreements
to keep-well, to purchase assets, goods, securities or services, to take-or-pay,
or to maintain financial statement conditions, by "comfort letter" or other
similar undertaking of support or otherwise), or (b) entered into for the
purpose of assuring in any other manner the obligee of such Debt or other
obligation of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part), provided that the term Guaranty shall not
include endorsements for collection or deposit in the ordinary course of
business.
"Hibernia" means Hibernia National Bank, a national banking association,
--------
and its successors.
"Impositions" means all real estate and personal property taxes; charges
-----------
for any easement, license or agreement maintained for the benefit of any of the
real property of Borrowers, or any part thereof; and all other taxes, charges
and assessments and any interest, costs or penalties with respect thereto,
general and special, ordinary and extraordinary, foreseen and unforeseen, of any
kind and nature whatsoever, which at any time prior to or after the execution
hereof may be assessed, levied or imposed upon any of the real property of
Borrowers, or any part thereof, or the ownership, use, sale, occupancy or
enjoyment thereof, in each case which, if not timely paid or otherwise
discharged, would materially and adversely affect (a) such ownership, use, sale,
or enjoyment, or (b) the financial condition of Borrowers.
"Instruments" has the meaning given such term in the Security Agreement.
-----------
"Intangible Assets" of any Person means those assets of such Person which
-----------------
are (a) deferred assets, other than prepaid insurance and prepaid taxes, (b)
patents, copyrights, trademarks, tradenames, franchises, goodwill, experimental
expenses and other similar assets which would be classified as intangible assets
on a balance sheet of such Person, prepared in accordance with GAAP, and, (c)
unamortized discount and expenses.
"Intercreditor Agreement" means an Intercreditor Agreement executed by
-----------------------
Borrowers, Agent, Lenders and each of the lenders set forth in Schedule 7.4 and
------------
any other lender which may from time to time provide secured credit to Borrowers
(to the extent permitted hereunder), providing for the subordination of all
liens securing such indebtedness, with the exception of those liens on items
expressly referred to in such Intercreditor Agreements, to the liens in favor of
Lenders, which Intercreditor Agreement(s) shall be in form acceptable to Lenders
and executed and delivered in accordance with Section 6.10.
------------
<PAGE>
"Inventory" means all boats (including personal watercraft), trailers and
---------
motors held by any Borrower for sale in the business of Borrowers.
"Issuing Lender" means NationsBank in its capacity as issuer of the Letters
--------------
of Credit.
"Law or Laws" means all applicable constitutional provisions, statutes,
-----------
codes, acts, ordinances, orders, judgments, decrees, injunctions, rules,
regulations, and requirements of all Governmental Authorities.
"Legal Requirements" means (a) any and all present and future judicial
------------------
decisions, Laws, rulings, permits, licenses or certificates, in any way
applicable to any of the Borrowers, (b) the presently or subsequently effective
bylaws, articles of incorporation and any other form of business association
agreement of Borrowers, and (c) any and all leases or contracts (written or
oral) of any nature that relate in any way to any Borrower's Assets, or to which
any of the Borrowers may be bound, and in each case which, if violated, would
materially and adversely affect (i) the present or potential ownership, use,
sale, occupancy or possession of any Borrower's Assets, by such Borrower or (ii)
the financial condition of any of the Borrowers.
"Lenders" means each of the financial institutions listed as a "Lender" on
-------
Schedule I attached hereto, as the same may be modified or amended from time to
- ----------
time.
"Letter of Credit Exposure" means the aggregate amount of the unfunded
-------------------------
portion of each Letter of Credit outstanding at any time.
"Letter of Credit Fee" has the meaning set forth in Section 2.3(b).
-------------------- --------------
"Letters of Credit" means all letters of credit issued by the Issuing
-----------------
lender for the account of Borrowers pursuant to this Agreement.
"Lien" means with respect to any asset, any mortgage, lien, pledge, charge,
----
security interest or encumbrance of any kind in respect of such asset. For the
purposes of this Agreement, a Person shall be deemed to own subject to a Lien
any asset which it has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, capital lease or other title
retention agreement relating to such asset.
"Loan Commitment Amount" means, with respect to each Lender, the amount
----------------------
indicated as such Lender's Loan Commitment Amount opposite the name of such
Lender in Schedule I, as such amount (a) may be reduced from time to time, as a
----------
result of a reduction in the Available Commitment as provided in this Agreement,
or (b) may be adjusted from time to time to account for any assignment of a
Lender's interest as provided in Section 10.10.
-------------
"Loan Documents" means this Agreement, the Notes, the Security Agreement,
--------------
the Letters of Credit, the LOC Applications and all other agreements, security
agreements, assignments, statements, certificates, documents or instruments
evidencing, securing or pertaining to the Advances or Credit Facility (including
the Letters of Credit) or otherwise executed and/or
<PAGE>
delivered from time to time pursuant to or in connection with this Agreement, as
the same may be modified, amended, renewed, extended, rearranged, restated or
replaced from time to time.
"Loan Percentage" means, with respect to each Lender, the percentage
---------------
indicated as such Lender's Loan Percentage opposite the name of such Lender on
Schedule I, as such percentage may be adjusted from time to time to account for
- ----------
any assignments of a Lender's interest as provided in Section 10.10.
-------------
"LOC Application" has the meaning set forth in Section 2.2(d).
--------------- --------------
"Margin Regulations" mean Regulations G, T, U and X of the Board of
------------------
Governors of the Federal Reserve System, as in effect from time to time.
"Margin Stock" means "margin stock" as defined in Regulation U.
------------
"Material Adverse Effect" means any event or condition which, singly or in
-----------------------
the aggregate with other events or conditions, materially and adversely affects
the business, operations, or financial condition of Borrowers.
"Maximum Lawful Rate" means the maximum rate (or, if the context so permits
-------------------
or requires, an amount calculated at such rate) of interest which, at the time
in question would not cause the interest charged on the Credit Facility at such
time to exceed the maximum amount which Lenders would be allowed to contract
for, charge, take, reserve, or receive under applicable federal or state law
after taking into account, to the extent required by applicable law, any and all
relevant payments, fees or charges under the Loan Documents. If and to the
extent the laws of the State of Texas are applicable for purposes of determining
the "Maximum Lawful Rate", such term shall mean the "indicated rate ceiling"
from time to time in effect under Article 5069-1.04, Title 79, Revised Civil
Statutes of Texas, 1925, as amended, or, if permitted by applicable law and
effective upon the giving of the notices required by such Article 5069-1.04 (or
effective upon any other date otherwise specified by applicable law), the
"quarterly ceiling" or "annualized ceiling" from time to time in effect under
such Article 5069-1.04, whichever Agent shall elect to substitute for the
"indicated rate ceiling," and vice versa, each such substitution to have the
---- -----
effect provided in such Article 5069-1.04, and Agent shall be entitled to make
such election from time to time and one or more times and, without notice to
Borrowers, to leave any such substitute rate in effect for subsequent periods in
accordance with subsection (h)(1) of such Article 5069-1.04. If under federal
or state law there is no legal limitation on the amount or rate of interest that
may be charged on amounts outstanding under the Credit Facility, there shall be
no Maximum Lawful Rate, notwithstanding any reference thereto herein or in any
of the Loan Documents.
"NationsBank" means NationsBank of Texas, N.A., a national banking
-----------
association, and its successors.
"Note" means each promissory note in the form attached hereto as Exhibit A
---- ---------
to be issued by Borrowers to each Lender in the amount of such Lender's Loan
Commitment Amount
<PAGE>
pursuant to this Agreement; Notes means all of the Notes issued to Lenders
-----
pursuant to this Agreement.
"Obligations" means all present and future indebtedness, obligations and
-----------
liabilities, or any part thereof, of Borrowers now or hereafter existing or
arising under or in connection with this Agreement, the Notes or any other of
the Loan Documents (specifically including, without limitation, the principal
amount outstanding under the Notes), together with: (a) all interest accrued
thereon; (b) all reasonable costs, expenses, and attorneys' fees of counsel to
Agent incurred in the documentation of the Loan Documents and any amendments,
waivers or extensions thereof, or administration, enforcement or collection
thereof (specifically including, without limitation, any of the foregoing
incurred in connection with any bankruptcy or other insolvency proceedings of
any of the Borrowers; (c) the reimbursement and payment of all sums which might
be advanced by Agent or any Lender to pay or satisfy amounts required to be paid
by any of the Borrowers under this Agreement or under any other instrument,
agreement or document at any time executed in connection with or as security for
any part of the Credit Facility (including the Letters of Credit); and (d) all
costs, charges, reasonable attorneys' fees and expenses owing and to become
owing in connection with the documentation, administration, enforcement and
collection of the foregoing obligations and indebtedness; regardless of whether
such indebtedness, obligations and liabilities are direct, indirect, fixed,
contingent, liquidated, unliquidated, joint, several or joint and several. The
Obligations shall include all renewals, extensions, modifications,
rearrangements and replacements of any of the above-described obligations and
indebtedness.
"Operating Leverage Ratio" means, for any date of determination, the ratio
------------------------
of (a) Consolidated Funded Debt as of the end of the immediately preceding
calendar quarter to (b) Consolidated Operating Cash Flow for the immediately
preceding four calendar quarters.
"Other Lender Obligations" means any of the indebtedness, obligations,
------------------------
and/or liabilities owing by Borrowers, or any of them, to either Lender as set
forth in Schedule II attached hereto.
-----------
"Pension Plan" means any Employee Plan that is now or was previously
------------
covered by Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code.
"Permitted Encumbrances" means, with respect to any asset, (a) minor
----------------------
defects in title which do not secure the payment of money and otherwise have no
material adverse effect on the value or operation of any material asset
encumbered thereby, including, without limitation, easements, rights-of-way,
servitudes, permits, surface leases, restrictions and other similar charges,
encumbrances or title defects, (b) mechanic's, materialman's, warehouseman's,
journeyman's, carrier's, and other similar liens arising by operation of law in
the ordinary course of business, securing obligations which are not delinquent,
(c) liens for taxes, assessments or other governmental charges not delinquent,
(d) liens (other than any lien imposed by ERISA) incurred or deposits made in
the ordinary course of business to secure (or to obtain letters of credit that
secure) the performance of tenders, statutory obligations, surety bonds, appeal
bonds, bids, leases (other than capital leases), performance bonds, purchase,
construction or sales contracts and other similar obligations, in each case not
incurred or made in connection with the
<PAGE>
borrowing of money, the obtaining of advances on credit or the payment of the
deferred purchase price of property, (e) any attachment or judgment lien, unless
the judgment it secures shall not, within thirty (30) days after the entry
thereof, have been discharged or execution thereof stayed pending appeal, or
shall not have been discharged within thirty (30) days after the expiration of
any such stay, and (f) liens existing on the Closing Date and described on
Schedule III, provided that all such liens are subordinate and inferior to the
- ------------
liens and security interests in favor of Agent for the benefit of Lenders except
to the extent provided in the Intercreditor Agreements.
"PBGC" mean the Pension Benefit Guaranty Corporation, or its successors.
----
"Permitted Investments" means (a) U.S. Government Securities, (b)
---------------------
repurchase agreements with any such commercial bank, or with broker-dealers or
other institutions, that are secured by U. S. Government Securities, (c) other
money market instruments, and mutual funds substantially all of the assets of
which are invested in any or all of the investments described in clauses (a)
above and (d) commercial paper rated A-1 by Moody's Investors Service, Inc. or
P-1 by Standard & Poor's Corporation on the date of acquisition.
"Person" means an individual, a corporation, a partnership, an association,
------
a trust or any other entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
"Prime Rate" means, on any date of determination, the rate of interest per
----------
annum most recently announced by Agent as its prime rate in effect at its
principal office (which, in the case of NationsBank, shall mean its principal
office in Dallas, Texas), automatically fluctuating upward and downward until
and at the time specified in each such announcement without special notice to
Borrowers or any other Person, which prime rate may not necessarily represent
the lowest or best rate actually charged to a customer.
"Prior Credit Facilities" means, collectively, (a) that certain Amended and
-----------------------
Restated Loan Agreement dated September 15, 1995, by and among NationsBank and
Travis Boats & Motors, Inc., Travis Snowden Marine, Inc., Travis Boating Center
Arlington, Inc., Falcon Marine, Inc., Falcon Marine Abilene, Inc. and Travis
Boating Center Beaumont, Inc., as amended by that certain First Amendment to
Loan Agreement dated July 31, 1996, (b) that certain Inventory Loan Agreement
dated September 20, 1995, by and between TBC Arkansas, Inc. and Hibernia, (c)
that certain Inventory Loan Agreement dated November 30, 1995, by and between
Travis Boating Center Louisiana, Inc. and Hibernia, (d) that certain Loan
Agreement dated November 30, 1995, by and between Travis Boating Center
Louisiana, Inc. and Hibernia, (e) that certain Inventory Loan Agreement dated
December 17, 1992, by and between Travis Boats & Motors Baton Rouge, Inc. d/b/a
Baton Rouge Boating Center and Hibernia, and (f) that certain Loan Agreement
dated December 17, 1992, by and between Travis Boats & Motors Baton Rouge, Inc.
d/b/a Baton Rouge Boating Center and Hibernia, as each of the above have been
renewed and extended from time to time.
"Receivables" has the meaning given such term in the Security Agreement.
-----------
<PAGE>
"Register" has the meaning set forth in Section 10.10 hereof.
-------- -------------
"Regulation U" means Regulation U of the Board of Governors of the Federal
------------
Reserve System, as in effect from time to time and shall include any successor
or other regulation or official interpretation of the Board of Governors
relating to the extension of credit by banks for the purpose of purchasing or
carrying margin stocks that is applicable to member banks of the Federal Reserve
System.
"Request for Advance" means a written request of an Authorized Officer of
-------------------
TBM for a Working Capital Advance, substantially in the form attached hereto as
Exhibit B-1, which shall (a) specify (i) the date of such an Advance, which
- -----------
shall be a Business Day, (ii) the amount of such Advance, (iii) the transfer
instructions with respect to such Advance and (b) contain a certification of an
Authorized Officer of TBM, as of the date of such Advance, (i) that the intended
use of the proceeds of such Advance does not violate the provisions of this
Agreement (including, without limitation, Section 2.1 and Section 5.13) or any
----------- ------------
other Loan Document, and (ii) as to the matters set forth in Section 4.2(b) and
--------------
(c).
- ---
"Required Lenders" means:
----------------
(a) Except as provided in clause (b) below or as expressly stated
otherwise in this Agreement or in any other Loan Document, at any time and
with respect to any matter hereunder or relating to the Credit Facility,
Lenders holding at the time in question a portion of the Credit Facility
(including participations in Letters of Credit) equal to or greater than
fifty-one percent (51%) the sum of (i) the aggregate unpaid principal
amount of the Notes, plus (ii) the Letter of Credit Exposure (or, if no
Advances or Letters of Credit are outstanding, then Lenders holding at the
time in question fifty-one percent (51%) of the aggregate Loan Commitment
Amounts of all Lenders); and
(b) With respect to (i) any alteration of the interest rate applicable
to the Credit Facility, or (ii) any alteration of the amount of any fees
payable to the Lenders under this Agreement, or (iii) any extension or
acceleration of the maturity date of the Credit Facility or the due date of
any installment of principal or interest or any fees on the Credit
Facility, or (iv) forgiveness of any principal or interest under the Credit
Facility or any waiver of the timely payment of principal or interest under
the Credit Facility, or (v) any increase in the amount of the Credit
Facility, or (vi) any change in the definition of Loan Percentage, or (vii)
any change in the definition of Borrowing Base, or (viii) the release of
any Lenders' Liens on any Collateral, or (ix) the reinstatement of the
Notes and other indebtedness pursuant to the provisions in Section 8.2(a)
--------------
hereof, or (x) any consent of Lenders required by Articles VI and VII and
-------------------
Sections 3.9 and 10.10(a)(i) hereof, or (xi) any alteration of the
----------------------------
provisions of this definition of Required Lenders, all the Lenders.
"Representatives" has the meaning set forth in Section 9.4.
--------------- -----------
"Rights" means rights, remedies, powers, privileges and benefits.
------
<PAGE>
"SEC" means the federal Securities and Exchange Commission, and its
---
successors.
"Security Agreement" means that certain Security Agreement, of even date
------------------
herewith, executed by Borrowers to Agent, for the benefit of Lenders, securing
the payment and performance of all the Obligations, and, to the extent of the
payment in full of the Obligations, the Other Lender Obligations, pari passu,
and all renewals, extensions, modifications, supplements and replacements
thereof, which Security Agreement shall be in form acceptable to Agent.
"Subsidiary" means any corporation or other entity which is required to be
----------
included in the consolidated financial statements of Borrowing Group, prepared
in accordance with GAAP. The term Subsidiary shall include Subsidiaries of
Subsidiaries (and so on).
"Supplemental Loan and Security Agreement" means a supplement to this
----------------------------------------
Agreement and to the Security Agreement, in the form attached hereto as Exhibit
-------
C (or such other form as Agent shall require), to be entered into by each
- -
Subsidiary which is created or acquired by any Borrower subsequent to the
Closing Date pursuant to Section 6.1 (h).
---------------
"Taxes" means all taxes, assessments, filing or other fees, levies,
-----
imposts, duties, deductions, withholdings, stamp taxes, interest equalization
taxes, capital transaction taxes, foreign exchange taxes or other charges of any
nature whatsoever, from time to time or at any time imposed by law or any
federal, state or local governmental agency. "Tax" means any one of the
foregoing.
"TBM" has the meaning set forth in the introductory paragraph of this
---
Agreement.
"Termination Date" means October 31, 1997.
----------------
"UCC" means the Uniform Commercial Code in effect under the laws of the
---
State of Texas, as amended, or, if stated with reference to another
jurisdiction, the Uniform Commercial Code as adopted in the relevant
jurisdiction.
"Uncollected Draft Advance Fee" shall mean the non-refundable fee equal to
-----------------------------
(a) the Prime Rate times (b) the average daily uncollected portion of all
-----
outstanding Draft Advances.
"U.S. Government Securities" means (a) securities that are (i) direct
--------------------------
obligations of the United States of America for the full and timely payment of
which the full faith and credit of the United States of America is pledged or
(ii) obligations of a Person controlled or supervised by and acting as an agency
or instrumentality of the United States of America, the full and timely payment
of which is unconditionally guaranteed as a full faith and credit obligation of
the United States of America, which in either case are not callable or
redeemable at the option of the issuer thereof or (b) any depository receipt
issued by a bank (as defined in Section 3(a)(2) of the Securities Act of 1933)
as custodian with respect to any U.S. Government Securities specified in clause
(a) or a specific payment of principal of or interest on any U.S. Government
Securities specified in clause (a) held by such bank for the account of the
holder of such depository receipt, provided that (except as required by law)
--------
such custodian is not authorized
<PAGE>
to make any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the U.S.
Government Securities or the specific payment of principal of or interest on the
U.S. Government Securities evidenced by such depository receipt.
"Variable Rate" means a fluctuating rate of interest equal to (a) the Prime
-------------
Rate minus three-eighths of one percent (0.375%); provided, that the Variable
Rate is subject to adjustment as provided in Section 3.3 hereof.
-----------
"Working Capital Advance" means an Advance of the Credit Facility made
-----------------------
pursuant to Section 2.2(a).
--------------
Section 1.2. Singular and Plural of Definitions. Each term defined in the
----------------------------------
singular form in Section 1.1 shall mean the plural thereof when the plural form
-----------
of such term is used in this Agreement, and each term defined in the plural form
in Section 1.1 shall mean the singular thereof when the singular form of such
-----------
term is used in this Agreement.
Section 1.3. Money. Unless stipulated otherwise, all references herein or
-----
in any of the Loan Documents to "Dollars," "$," "money", "cash", "payments" or
other similar financial or monetary terms are references to lawful money of the
United States of America.
Section 1.4. Captions; References. The captions in this Agreement and in
--------------------
the table of contents hereof are for convenience of reference only and shall not
define, affect or limit any of the terms or provisions hereof. All references
herein to Articles and Sections are, unless specified otherwise, references to
articles and sections of this Agreement. Unless specifically indicated
otherwise, all references herein to an "Exhibit," "Annex" or "Schedule" are
references to exhibits, annexes or schedules attached hereto, all of which are
incorporated herein and made a part hereof for all purposes, the same as if set
forth fully herein, it being understood that if any exhibit, annex or schedule
attached hereto which is to be executed and delivered contains blanks, the same
shall be completed correctly and in accordance with this Agreement prior to or
at the time of the execution and delivery thereof. The words "herein,"
"hereof," "hereunder" and other similar compounds of the word "here" when used
in this Agreement shall refer to the entire Agreement and not to any particular
provision or section unless specifically indicated otherwise.
Section 1.5. Accounting Terms and Determinations. Unless otherwise
-----------------------------------
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with GAAP.
<PAGE>
ARTICLE II
COMMITMENT
Section 2.1. Credit Facility Commitment. Each Lender severally agrees,
--------------------------
subject to and upon the terms, covenants and conditions of this Agreement, to
make Working Capital Advances to TBM, for the benefit of Borrowers, or with
respect to Letters of Credit, to cause the Issuing Lender to issue Letters of
Credit for the account of Borrowers, and NationsBank agrees, subject and upon
the terms, covenants and conditions of this Agreement, to make Draft Advances to
the Borrowers, acting through TBM, shall be entitled to obtain Working Capital
Advances, Draft Advances and Letters of Credit, on the terms and conditions as
described below and in the manner set forth in Section 2.2:
-----------
(a) Working Capital Advances. One or more Working Capital Advances
------------------------
for the acquisition of Inventory by Borrowers and other business and
working capital needs, which, subject to the Loan Documents, Borrowers may
borrow, repay, and reborrow under this Agreement; provided, that,
(i) each such Working Capital Advance must occur on a Business
Day and the obligations of Lenders to make Working Capital Advances
shall terminate on the day immediately prior to the Termination Date;
and
(ii) each such Working Capital Advance must be in an amount not
less than the limitations provided in Section 2.2(a).
--------------
(b) Draft Advances. Draft Advances issued by NationsBank to the
--------------
account of any Borrower, for any of the purposes for which Borrowers can
obtain a Working Capital Advance; provided, that
(i) each such Draft Advance shall be issued on a Business Day
and the obligation of NationsBank to make Draft Advances shall
terminate on the day immediately prior to the Termination Date; and
(ii) after the issuance of any such Draft Advance, the Draft
Advance Exposure shall not exceed One Million and No/100 Dollars
($1,000,000.00); and
(iii) in no event shall NationsBank be required to make any
Draft Advance if, after the issuance of such Draft Advance, the
aggregate amount of the unpaid portions of the Draft Advances plus
----
NationsBank's Loan Percentage of the outstanding balance of (A) the
Working Capital Advances and (B) the Letter of Credit Exposure would
exceed NationsBank's Loan Commitment Amount.
(c) Letters of Credit. Letters of Credit issued by the Issuing
-----------------
Lender for the account of any Borrower for any of the purposes for which
Borrowers can obtain a Working Capital Advance; provided, that
<PAGE>
(i) each such Letter of Credit shall be issued on a Business Day;
(ii) after the issuance of any such Letter of Credit, the Letter
of Credit Exposure shall not exceed Five Hundred Thousand and No/100
Dollars ($500,000.00); and
(iii) each such Letter of Credit must have an expiration date not
later than the Termination Date.
To the extent that funds are ever drawn under any of the Letters of
Credit, each such draw will be paid by the Issuing Lender, and each of the
Lenders will make a Working Capital Advance in the amount of such Lender's
Loan Percentage of the amount so paid by the Issuing Lender to reimburse
the Issuing Lender for such draw.
(d) All Advances and Letters of Credit. In no event shall any Lender
----------------------------------
be required to make any Advances in excess of such Lender's Loan Percentage
of the amount required to be advanced by the Lenders under the above
provisions of this Section 2.1 or which would cause any Lender to have made
-----------
Advances in excess of such Lender's Loan Commitment Amount. On any date of
determination and after the issuance of any Advance or Letter of Credit,
(i) the aggregate outstanding balances of the Working Capital Advances plus
----
the Draft Advance Exposure plus the Letter of Credit Exposure shall never
----
exceed the Available Commitment and (ii) the aggregate outstanding balance
of the Working Capital Advances plus the Letter of Credit Exposure shall
----
never exceed the then effective Borrowing Base.
(e) Returned Draft Advances. In the event NationsBank shall receive
-----------------------
a Draft returned unpaid, in whole or in part, by a third-party lending
institution, then the amount of such unpaid portion of the applicable Draft
Advance shall be debited to the account of the applicable Borrower. If
funds in the account are insufficient to repay NationsBank in full for the
amount of the unpaid Draft Advance, then, to the extent of such
insufficiency, such unpaid Draft Advance shall be automatically accelerated
and immediately due and payable.
Section 2.2. Method of Borrowing. Borrowers shall be entitled to obtain
-------------------
Advances and Letters of Credit from Lenders pursuant to Section 2.1 in the
-----------
following manner:
(a) Working Capital Advances. In the case of any Working Capital
------------------------
Advance, Borrowers, through an Authorized Officer of TBM, shall give Agent
at least one Business Day prior to the date of such Advance an irrevocable
Request for Advance specifying their intention to borrow such Working
Capital Advance hereunder. Notice shall be given to Agent prior to 2:00
p.m., San Antonio, Texas time, in order for such Business Day to count
toward the minimum number of Business Days required. Such Request for
Advance shall be accompanied by the documents required to be delivered
pursuant to Article IV. Any Working Capital Advance shall be in an amount
----------
not less than One Hundred Thousand and No/100 Dollars ($100,000.00) or
greater whole multiples of Fifty Thousand and No/100 Dollars ($50,000.00).
<PAGE>
(b) Draft Advances. In the case of any Draft Advance, any Borrower
--------------
shall deposit with NationsBank, at any of its Texas branches (or any other
branch outside the state of Texas as NationsBank may from time to time
approve), a Draft not later than the established and announced time for the
close of business at such receiving branch, on any Business Day,
accompanied by supporting documentation reasonably satisfactory to
NationsBank. NationsBank shall immediately credit the account of the
applicable Borrower in the amount of such Draft.
(c) Notice To Lenders. Agent shall promptly notify Lenders of each
-----------------
notice received from an Authorized Officer of TBM pursuant to this Section
-------
2.2(a). Each Lender shall, not later than noon, San Antonio, Texas time,
------
on the date of any Working Capital Advance, deliver to Agent, at its
address set forth herein, such Lender's Loan Percentage of such Working
Capital Advance in immediately available funds in accordance with Agent's
instructions. Prior to 2:00 p.m., San Antonio, Texas time, on the date of
any Working Capital Advance hereunder Agent shall, subject to satisfaction
of the conditions set forth in Article IV, disburse the amounts made
----------
available to Agent by the Lenders by transferring such amounts by wire
transfer pursuant to TBM's instructions or crediting such amounts to the
account of TBM maintained with Agent as directed by an Authorized Officer
of TBM. All Working Capital Advances shall be made by each Lender
according to its Loan Percentage; provided, that if any Lender shall fail
to make available its share of any Working Capital Advance required to be
made by Lenders under this Agreement, Agent shall fund such amount as
contemplated by Section 9.15 hereof.
------------
(d) Method of Issuing Letters of Credit. Not less than three (3)
-----------------------------------
Business Days prior to the requested date of issuance of any Letter of
Credit, Borrowers shall execute and deliver to the Issuing Lender the
customary letter of credit application and agreement used by the Issuing
Lender in substantially the form of Exhibit E attached hereto (the "LOC
--------- ---
Application"). Nothing in this Agreement shall prohibit the Issuing Lender
-----------
from modifying the form of LOC Application in effect from time to time in
connection with the issuance of any Letter of Credit, provided that, such
modification does not substantially modify this Agreement to the detriment
of Borrowers. In the event of a direct conflict between the provisions of
the LOC Application and this Agreement, the provisions of this Agreement
shall govern. In no event shall a Letter of Credit have an expiration date
which is later than the earlier of (i) one year from the date of issuance
thereof or (ii) the Termination Date. Letters of Credit may be standby
letters of credit only and be issued on behalf of any of the Borrower.
Upon satisfaction of the applicable conditions precedent set forth in
Article IV, and subject to the other terms and conditions of this
----------
Agreement, the Issuing Lender shall issue Letters of Credit for the account
of any of the Borrowers within three (3) Business Days from receipt by the
Issuing Lender of the fully-executed LOC Application (so long as the
requested terms of such Letter of Credit are acceptable to the Issuing
Lender in its reasonable discretion). Any of the Borrowers may, through an
Authorized Borrowing Officer of TBM, request the issuance of Letters of
Credit under this Section 2.2(d), repay any Advances resulting from
--------------
drawings thereunder pursuant to Section 2.2(f) and request the issuance of
--------------
additional Letters of Credit under this Section 2.2(d).
--------------
<PAGE>
(e) Letter of Credit Participations. Immediately upon the issuance of
-------------------------------
each Letter of Credit, the Issuing Lender shall be deemed to have sold and
transferred to each Lender, and each Lender shall be deemed to have
purchased and received from the Issuing Lender, in each case irrevocably
and without any further action by any party, an undivided interest and
participation in such Letter of Credit, each drawing thereunder and the
obligations of Borrowers under this Agreement in respect thereof in an
amount equal to the product of (x) such Lender's Loan Percentage times (y)
the maximum amount available to be drawn under such Letter of Credit
(assuming compliance with all conditions to drawing).
(f) Advances for Repayment of Letters of Credit. The payment by the
-------------------------------------------
Issuing Lender of a draft drawn under any Letter of Credit shall constitute
for all purposes of this Agreement the making by the Issuing Lender of a
Working Capital Advance, which shall bear interest at the Variable Rate in
effect, in the amount of such draft (but without any requirement for
compliance with the conditions set forth in Article IV hereof). In the
----------
event that a drawing under any Letter of Credit is not reimbursed by
Borrowers by 10:00 a.m. (San Antonio time) on the first Business Day after
such drawing, the Issuing Lender shall promptly notify Agent and each other
Lender. Each such Lender shall, on the first Business Day following such
notification, make a Working Capital Advance which Advance shall be used to
repay the applicable portion of the Issuing Lender's Advance with respect
to such Letter of Credit, in an amount equal to the amount of its
participation in such drawing for application to reimburse the Issuing
Lender (but without any requirement for compliance with the applicable
conditions set forth in Article IV hereof) and shall make available to
----------
Agent for the account of the Issuing Lender, by deposit at Agent's office,
in same day funds, the amount of such Advance. In the event that any
Lender fails to make available to Agent for the account of the Issuing
Lender the amount of such Advance, the Issuing Lender shall be entitled to
recover such amount on demand from such Lender together with interest
thereon at a rate per annum equal to the lesser of (i) the Maximum Lawful
Rate or (ii) the Federal Funds Rate.
Section 2.3. Fees.
----
(a) Facility Fees. In consideration of Lenders making available the
-------------
Available Commitment, Borrowers agree to pay to Agent for the benefit of
the Lenders, commencing on the first day of the first calendar quarter
after the Closing Date and continuing on the first day of each calendar
quarter thereafter during the term of the Credit Facility, the Facility
Fee. The Facility Fee is to be computed based on the number of actual days
elapsed, assuming each calendar year consisted of 360 days, subject,
however, to proportionate adjustments if the Closing Date occurs or the
term of the Credit Facility ends other than at the beginning or end of a
calendar quarter or if there is an increase or decrease in the Credit
Facility during such calendar quarter. The Facility Fee is to be paid by
Agent to each Lender in accordance with its Loan Percentage.
(b) Letter of Credit Fees. Borrowers shall pay to Agent for the
---------------------
benefit of the lenders a letter of credit fee (the "Letter of Credit Fee")
--------------------
as a condition to the issuance
<PAGE>
of any Letter of Credit at the rate determined by Agent upon each request
by Borrowers for the issuance of a Letter of Credit to be applied to the
amount of the Letter of Credit so issued. Subject to Section 10.8 hereof,
------------
such fee shall be computed on the basis of the actual number of days
elapsed. The Letter of Credit Fee is to be paid to each Lender in
accordance with its Loan Percentage and shall be payable in four (4) equal
installments with the first such payment being due and payable on the date
of issuance of the applicable Letter of Credit and the remaining portion of
the applicable Letter of Credit Fee to be paid on the immediately following
interest payment date; provided, that, any Letter of Credit Fee remaining
unpaid on the Termination Date shall be paid on such date.
(c) Uncollected Draft Advance Fees. The applicable Borrower shall
------------------------------
pay to NationsBank, by means of NationsBank's periodic account analysis and
settlement system, a $10.00 processing charge for each Draft Advance made
under this Agreement plus the uncollected Draft Advance Fee. Such fees
shall be calculated on a 365/366 day per year basis.
ARTICLE III
TERMS OF CREDIT FACILITY
Section 3.1. Notes. The Credit Facility shall be evidenced by the Notes.
-----
Each Lender shall receive an originally executed Note in an amount equal to such
Lender's Loan Commitment Amount.
Section 3.2. Maturity. All outstanding principal of the Notes, together
--------
with all accrued but unpaid interest and other amounts owed with respect
thereto, shall be due and payable in full on the Termination Date.
Section 3.3. Interest Rate. Interest on the Working Capital Advances
-------------
shall accrue at a rate per annum equal to the lesser of (a) at Borrowers'
option, the Variable Rate, subject, however, to the provisions of Section 10.8
------------
(the "Applicable Rate"), or (b) the Maximum Lawful Rate; provided, however, if
---------------
at any time the Applicable Rate exceeds the Maximum Lawful Rate, resulting in
the charging of interest hereunder to be limited to the Maximum Lawful Rate,
then any subsequent reduction in the Applicable Rate shall not reduce the rate
of interest below the Maximum Lawful Rate until the total amount of interest
accrued on the indebtedness evidenced hereby equals the amount of interest which
would have accrued on such indebtedness if the Applicable Rate had at all times
been in effect.
Without notice to Borrowers or anyone else, the Variable Rate and the
Maximum Lawful Rate shall each automatically fluctuate upward and downward as
and in the amount by which the Prime Rate and Maximum Lawful Rate, respectively,
fluctuate, subject always to limitations contained in this Agreement.
<PAGE>
Section 3.4. Mandatory Interest Payments. Interest on the Notes, computed
---------------------------
as provided in Section 3.10, shall be due and payable in arrears on the first
------------
day of each April, July, October and January commencing on April 1, 1997, and on
the Termination Date, so long as any principal of any Note remains unpaid.
Section 3.5. Payments of Advances; Reduction of Commitment Amount.
----------------------------------------------------
(a) At any time, Borrowers may by notice to Agent, with at least one
Business Day prior notice to the date on which prepayment under this
Section 3.5 is to be made, voluntarily prepay outstanding Advances from
-----------
time to time and at any time, in whole or in part; provided, that each such
partial payment must be in a minimum amount of at least One Hundred
Thousand and No/100 Dollars ($100,000.00) or any whole multiple of Fifty
Thousand and No/100 Dollars ($50,000.00) in excess thereof. Each such
optional prepayment shall be applied ratably in accordance with Section 3.8
-----------
to pay the amounts owed to each Lender under the Credit Facility.
(b) If the outstanding principal balance of (i) the Working Capital
Advances plus the Letter of Credit Exposure plus the Draft Advance Exposure
---- ----
ever exceeds the Available Commitment or (ii) the Working Capital Advances
plus the Letter of Credit Exposure ever exceeds the then effective
----
Borrowing Base, Borrowers shall make a mandatory prepayment on the
principal amount of the Credit Facility in at least the amount of such
excess. At such time as NationsBank receives payment for a Draft, such
payment shall be applied, or shall be deemed to have been applied to the
repayment of amounts outstanding under the Draft Advance made with respect
to such paid Draft.
(c) Borrowers may reduce the Available Commitment for the Credit
Facility at any time and from time to time provided that (i) notice of such
reduction must be received by Agent by 10:00 a.m. San Antonio, Texas, time
on the third Business Day preceding the effective date of such reduction,
(ii) each such reduction in the Available Commitment must be in a minimum
amount of One Million and No/100 Dollars ($1,000,000.00) or any whole
multiple of One Hundred Thousand and No/100 Dollars ($100,000.00) in excess
thereof, (iii) if the aggregate outstanding principal balance of the
Working Capital Advances plus the Letter of Credit Exposure plus the Draft
---- ----
Advance Exposure exceeds the Available Commitment as so reduced, Borrowers
shall make a mandatory prepayment on the principal amount of the Credit
Facility in at least the amount of such excess (iv) Borrowers shall not be
entitled to reduce the Available Commitment of the Credit Facility to an
amount which is less than the Letter of Credit Exposure plus the Draft
----
Advance Exposure at such time, (v) Borrowers shall not be entitled to an
increase in the Available Commitment once it has been so reduced, and (vi)
in no event shall Borrowers be entitled to so reduce the Available
Commitment below Ten Million and No/100 Dollars ($10,000,000.00), unless
Borrowers have elected to terminate the Available Commitment.
Section 3.6. Schedules on Notes. Each Lender is hereby authorized to
------------------
record the date and amount of the initial principal balance of its Note and the
date and amount of each Advance and repayment of principal on such Note, and to
attach any such recording as a schedule to the
<PAGE>
Note whereupon such schedule shall constitute a part of such Note for all
purposes. Any such recording shall constitute prima facie evidence of the
----- -----
accuracy of the information so recorded; provided that the absence or inaccuracy
of any such schedule or notation thereon shall not limit or otherwise affect the
liability of Borrowers for the repayment of all amounts outstanding under the
Notes together with interest thereon.
Section 3.7. General Provisions as to Payments. Borrowers shall make each
---------------------------------
payment of principal and interest on the Credit Facility and all fees payable
hereunder or under any other Loan Document not later than 12:00 noon (San
Antonio time) on the date when due, in Federal or other funds immediately
available in San Antonio, Texas, to Agent at Agent's address for payments set
forth in Schedule I. Agent will promptly (and if such payment is received by
----------
Agent by 12:00 noon (San Antonio, Texas time), and otherwise if reasonably
possible, on the same Business Day, and in any event not later than the next
Business Day after receipt of such payment) distribute to each Lender a payment
on the applicable Note, such Lender's pro rata share of each such payment
received by Agent for the account of Lenders. For purposes of calculating
accrued interest on the Credit Facility, any payment received by Agent as
aforesaid by 12:00 noon (San Antonio, Texas time) on any Business Day shall be
deemed made on such day; otherwise, such payment shall be deemed made on the
next Business Day after receipt by Agent. Whenever any payment of principal or
interest on the Credit Facility, or any fees under the Loan Documents, shall be
due on a day which is not a Business Day, the date for payment thereof shall be
extended to the next succeeding Business Day. If the date for any payment of
principal is extended by operation of law or otherwise, interest thereon shall
be payable for such extended time.
Section 3.8. Application of Payments. All payments made on the Credit
-----------------------
Facility or process realized from the exercise of any right of setoff or the
exercise of any remedies with respect to the collateral shall be ratably paid to
each Lender in accordance with its Loan Percentage, subject to the provisions of
Article IX and any provision in the Loan Documents or agreements among the
- ----------
Lenders providing for the application of such proceeds against expenses or other
similar amounts. Except as (a) to principal payments made pursuant to Section
-------
3.5, and (b) otherwise specifically provided in this Agreement or in any Loan
- ---
Document, all prepayments on the Credit Facility shall be applied against
accrued but unpaid interest and then against the principal portion of the Credit
Facility.
Section 3.9. Post-Default Interest; Past Due Principal and Interest.
------------------------------------------------------
After maturity of the Notes or the occurrence of an Event of Default, the
outstanding principal balance of the Notes shall, at the option of the Required
Lenders, bear interest at the Default Rate. Any past due principal of and, to
the extent permitted by law, past due interest on the Notes shall bear interest,
payable as it accrues on demand, for each day until paid at the Default Rate.
Such interest shall continue to accrue at the Default Rate notwithstanding the
entry of a judgment with respect to any of the Obligations, except as otherwise
provided by applicable law.
Section 3.10. Computation of Interest and Fees. Subject to the provisions
--------------------------------
hereof limiting interest to the maximum permitted by applicable law, all
interest payable on Advances or the amount of any fees hereunder shall be
computed based on the number of days elapsed and 360-
<PAGE>
days per year or in the case of interest accruing at the Maximum Lawful Rate,
365/366 days per year.
Section 3.11. Deposit of Cash Collateral. Upon the occurrence of a
--------------------------
monetary Event of Default which Borrower has not cured in accordance with the
applicable provisions hereof, Borrowers shall, on the next succeeding Business
Day, deposit in a segregated, interest bearing account with Agent such funds as
Agent may request, up to a maximum amount equal to the aggregate existing Letter
of Credit Exposure. Any funds so deposited shall be held by Agent as security
for the Credit Facility (including the Letters of Credit) and Borrowers will, in
connection therewith, execute and deliver such assignments and security
agreements in form and substance satisfactory to Agent which Agent may, in its
discretion, require. As drafts or demands for payment are presented under any
Letter of Credit, Borrowers hereby irrevocably direct Agent to apply such funds
to satisfy such drafts or demands. When all Letters of Credit have expired and
the Notes have been repaid in full (and Lenders have no obligation to make
further Advances or issue Letters of Credit hereunder) or such Event of Default
has been cured to the satisfaction of Agent, Agent shall release to Borrowers
any remaining funds deposited under this Section 3.11. Whenever Borrowers are
------------
required to make deposits under this Section 3.11 and fail to do so on the day
------------
such deposit is due, Lenders may make such deposit using any funds of Borrowers
then available to any Lender.
Section 3.12. Joint and Several Liability. Each member, and all of the
---------------------------
members, of the Borrowing Group are hereby deemed jointly and severally liable
for the payment of the Notes and the satisfaction and fulfillment of all of the
Obligations hereunder and pursuant to any other Loan Document of Borrowers,
individually and as a group.
Section 3.13. Collateral; Renewal and Extension of Existing Indebtedness
----------------------------------------------------------
and Security. The Obligations shall be secured by a first and prior security
- ------------
interest in all of Borrowers' Collateral pursuant to the terms of the Security
Agreement and such other documents or agreements required by Agent. It is
acknowledged and agreed that the outstanding indebtedness and obligations
evidenced by the Prior Credit Facilities are hereby renewed, extended and
consolidated by this Agreement and the Other Loan Documents, and the Existing
Security Interests, which are hereby respectively assigned by NationsBank and
Hibernia to Agent for the benefit of Lenders, are renewed, extended and
continued in full force and effect under the Security Agreement as security for
the Obligations.
Section 3.14 Title Documents. All original manufacturer's invoices,
---------------
certificates of origin and all other title documents evidencing Borrowers'
ownership of all of their Inventory shall be maintained in safekeeping by
Borrowers in a manner reasonably acceptable to Agent, including, without
limitation, Borrowers' current practices, unless and until a request is made
therefor by Agent upon the occurrence of a monetary Event of Default which
Borrower has not cured in accordance with the applicable provisions hereof. In
such event, within five Business Days of the request by Agent, Borrowers shall
deliver to Agent all original manufacturer's invoices, certificates of origin
and all other title documents in Borrowers' possession, whether at the time of
such request or thereafter, to Agent, and Agent shall retain or hold all such
original documents received by Agent after such request; provided, however,
Borrowers may retain or hold all such original documents relating to Inventory
covered by liens expressly
<PAGE>
excluded from the subordination of an Intercreditor Agreement which is in full
force and effect at the time of Agent's request under this Section 1.04.
------------
Thereafter, all original manufacturer's invoices, certificates of origin and all
other title documents shall remain in Agent's possession until the Note and the
Obligations are paid and performed in full, provided that, if the original title
documents have been delivered to Agent as provided for herein and if no Event of
Default has occurred and is then existing, upon the sale of an item of Inventory
by a Borrower, Agent shall promptly deliver to the respective Borrower the
original title documents pertaining to the item of Inventory which has been
sold; and further provided, that, upon the happening of an Event of Default and
during the continuance thereof, Agent may transfer, as applicable, title
documents delivered to it pursuant to this Section 3.14 in connection with its
------------
sale of Inventory which constitute Collateral in accordance with its rights
provided for in this Agreement.
ARTICLE IV
CONDITIONS TO FUNDING
Section 4.1. Conditions Precedent . The obligation of Lenders as provided
---------------------
herein is subject to the satisfaction of the following conditions and
requirements:
(a) receipt by Agent of (i) this Agreement, properly executed by
Borrowers, and (ii) evidence acceptable to Agent that Borrowers have paid
all fees and expenses required to be paid by Borrowers as of the date of
such Advance or issuance;
(b) receipt by each Lender of its Note, properly executed by
Borrowers;
(c) receipt by Agent of the Security Agreement properly executed by
Borrowers;
(d) receipt by Agent of such UCC-1 financing statements as Agent may
require to be executed by the proper Persons to perfect Lenders' security
interests in the Collateral;
(e) receipt by Agent of an opinion of counsel for Borrowers, opining
as to the due organization, existence and authority of Borrowers, the
enforceability and of each of the Loan Documents, compliance by Borrowers
with applicable Laws as Lenders may require, and such other matters as
Agent may reasonably request, in form and substance satisfactory to Agent;
(f) receipt by Agent of all resolutions, certificates or documents it
may reasonably request relating to the formation, existence and good
standing of each of the Borrowers, on the date hereof, partnership and
corporate authority for the execution and validity of this Agreement and
the other Loan Documents from, as applicable, each of the Borrowers, and
any other matters relevant to this Agreement, all in form and substance
satisfactory to Agent, which resolutions, certificates and documents shall
include, without limitation, (i) the articles of incorporation and bylaws
of each of the
Page 26
<PAGE>
Borrowers, (ii) certified resolutions of the board of directors of each of
the Borrowers authorizing the execution of the Loan Documents on behalf of
each of the Borrowers, (iii) certificates of incumbency for the officers of
each of the Borrowers, and (iv) certificates of existence and good standing
issued by the state of organization of each of the Borrowers, and from the
appropriate governmental authority of each state in which any such party is
required by applicable law to be qualified, including but not limited to
the states listed on Schedule 5.1 attached hereto;
------------
(g) receipt by Agent of unaudited consolidated financial statements of
Borrowing Group for the fiscal quarter ending June 30, 1996, certified by
the chief financial officer or chief accounting officer of TBM as to
fairness of presentation and as to whether such financial statements fairly
reflect the financial condition of Borrowing Group as of the date of
delivery, subject to year-end adjustments;
(h) receipt by agent of filing officer certificates (or commercial
reports similar thereto, if satisfactory to Agent) under Section 9-407(2)
of the UCC, releases or partial releases of liens or financing statements,
and other evidence satisfactory to Agent that there are no Liens on any
assets of Borrowers, except Permitted Encumbrances and those identified in
Section 7.5;
-----------
(i) receipt by Agent of an opinion of (i) Friday, Eldredge & Clark,
(ii) Kizer, Hood & Morgan, L.L.P., (iii) Sherrad & Roe, PLC and (iv)
Bradley, Arant, Rose & White opining as to the enforceability and
perfection of Lenders' security interest in the Collateral and such other
matters as Agent may reasonably request, in form and substance satisfactory
to Agent under Arkansas, Louisiana, Tennessee and Alabama law,
respectively;
(j) completion of a financial, legal and factual due diligence review
by the Lenders and their respective legal counsel, the results of which
shall be, respect to all matters of any nature, satisfactory to all of the
Lenders in their sole discretion and no Material Adverse Effect shall have
arisen with respect to the documents, certificates, financial statements
and other information delivered to Lenders by Borrowers;
(k) all other documents, instruments, certificates and information as
Agent shall reasonably deem necessary;
(l) satisfaction of all conditions contained in Section 4.2 if an
-----------
Advance is being made, or satisfaction of all conditions contained in
Section 4.3 if a Letter of Credit is being issued; and
-----------
(m) the repayment of the entire principal amount of any Debt
outstanding under the Prior Credit Facilities, together with accrued
interest, fees and other amounts in respect thereof, which repayment may be
made with the proceeds of the initial Advance.
All the documents, instruments, certificates, information, evidences and
opinions referred to in this Section 4.1 shall be delivered to Agent (unless
-----------
Agent has waived delivery) no later than the
Page 27
<PAGE>
Closing Date, and Lenders shall not be bound by or obligated hereunder until
Agent has received all such items. Borrowers and Lenders hereby agree that the
commitments under the Prior Credit Facilities, and any related guaranties, shall
terminate automatically upon and simultaneously with the effectiveness of this
Agreement without further action by any party.
Section 4.2. Conditions To All Advances. The obligation of Lenders to
--------------------------
fund any Advance as provided herein is subject to the satisfaction by Borrowers
of the following conditions and requirements:
(a) timely receipt by Agent of a Request For Advance or, with respect
to a Draft Advance, a Draft and accompanying supporting documentation
satisfactory to NationsBank, each in accordance with Section 2.2;
-----------
(b) immediately before and after giving effect to such Advance, no
Default shall have occurred and be continuing and the making of such
Advance shall not cause a Default;
(c) the representations and warranties contained in this Agreement and
in the other Loan Documents shall be true and correct in all material
respects on and as of the date of such Advance, except that all
representations and warranties that speak as of a particular date shall
only be required on the date of each such Advance to be true and correct in
all material respects as of the date to which such representation or
warranty speaks and not as of any subsequent date;
(d) such other information and documentation as Agent shall reasonably
deem necessary in connection with the funding of such Advance.
Section 4.3. Conditions to Letters of Credit. The obligation of the
-------------------------------
Issuing Lender to issue any Letter of Credit as provided herein is subject to
the satisfaction by the applicable Borrowers of the following conditions and
requirements:
(a) timely receipt by the Issuing Lender of a fully completed LOC
Application;
(b) immediately before and after the issuance of such Letter of
Credit, no Default shall have occurred and be continuing and the issuance
of any Letter of Credit shall not cause a Default;
(c) the representations and warranties contained in this Agreement and
in the other Loan Documents shall be true in all material respects on and
as of the date of issuance of such Letter of Credit, except that all
representations and warranties that speak as of a particular date shall
only be required on the date of issuance of each such Letter of Credit to
be true and correct in all material respects as of the date to which such
representation or warranty speaks and not as of any subsequent date;
Page 28
<PAGE>
(d) timely receipt by Agent (on behalf of Lenders) of the Letter of
Credit Fee and (on behalf of the Issuing Lender) of the usual and customary
administrative fees charged by the Issuing Lender for the issuance of
letters of credit; and
(e) such other information and documentation as Agent or the Issuing
Lender shall reasonably deem necessary in connection with the issuance of
such Letter of Credit.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Borrowers represent and warrant to Lenders that:
Section 5.1. Existence, Power of Borrowers and Foreign Qualification.
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Each of the Borrowers (i) is a corporation duly organized, validly existing and
in good standing under the laws of the state of its incorporation and is or will
be qualified and in good standing under the laws of each state where such
qualification is necessary for such Borrower to conduct its business, (ii) has
all corporate power and authority and all governmental licenses, permits,
authorizations, consents and approvals and has made all filings with
governmental authorities required to carry on its business as now conducted and
as contemplated to be conducted, and (iii) is qualified and in good standing to
do business as a foreign corporation in each of the states listed by such
Borrower's name on Schedule 5.1 hereto, which states are the only jurisdictions
------------
where the character of the properties owned or held under lease by it, or the
nature of the business conducted by it, makes such qualification necessary.
Section 5.2. Authorization; Contravention. The execution, delivery and
----------------------------
performance of this Agreement, the Notes, the LOC Applications and the other
Loan Documents by Borrowers, as applicable, (a) are within each Borrower's
corporate powers, (b) have been duly authorized by all necessary action, (c)
require no action by or in respect of, or filing with, any governmental body,
agency or official and (d) do not contravene, or constitute a default under, (i)
any certificate of incorporation, bylaws or agreement of limited partnership of
any Borrower, or (ii) of applicable law or regulation or any agreement,
judgment, injunction, order, decree or other instrument binding upon any
Borrower or result in the creation or imposition of any Lien on any asset of any
Borrower.
Section 5.3. Enforceable Obligations. This Agreement, the Notes, the LOC
-----------------------
Applications and the other Loan Documents each constitutes a valid and binding
agreement of such of the Borrowers which are parties thereto, enforceable in
accordance with its terms, except as (a) the enforceability thereof may be
limited by bankruptcy, insolvency, fraudulent transfer or similar laws affecting
creditors rights generally, and (b) the availability of equitable remedies may
be limited by equitable principles of general applicability.
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Section 5.4. Financial Information.
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(a) The current financial statements of Borrowers and all the other
financial reports and information of Borrowers that have been delivered to
Lenders are true and correct in all material respects as of the date of
such current financial statements and other reports and information.
(b) Since the later of June 30, 1996, or the date of the most recent
quarterly financial statements delivered to Agent, there has been no
material adverse change in the business, financial position or results of
operations of Borrowers; and, there exists no condition, event or
occurrence that could reasonably be expected to result in a material
adverse change in the business, financial position, results of operations,
projections or prospects of Borrowers.
Section 5.5. Litigation. There is no action, suit or proceeding pending
----------
against, or to the knowledge of Borrowers, threatened against or affecting
Borrowers, before any court or arbitrator or any governmental body, agency or
official in which there is a reasonable possibility of an adverse decision which
could materially adversely affect the business, financial position or results of
operations of the Borrowers, or which could in any manner draw into question the
validity of the Loan Documents.
Section 5.6. ERISA.
-----
(a) Each Employee Plan has been maintained and administered in
substantial compliance with the applicable requirements of the Code and
ERISA. No circumstances exist with respect to any Employee Plan that could
have a Material Adverse Effect.
(b) With respect to each Pension Plan, (i) no accumulated funding
deficiency (within the meaning of Section 412(a) of the Code), whether
waived or unwaived, exists; (ii) the present value of accrued benefits
(based on the most recent actuarial valuation prepared for each such plan,
if any, in accordance with ongoing assumptions) does not exceed the current
value of plan assets allocable to such benefits by a material amount; (iii)
no reportable event (within the meaning of Section 4043 of ERISA) has
occurred other than a reportable event with respect to which the 30-day
notice requirement has been waived by regulation; (iv) no uncorrected
prohibited transactions (within the meaning of Section 4975 of the Code)
exist which could have a Material Adverse Effect and for which there exists
no statutory or regulatory exception; (v) to the extent such plan is
covered by PBGC, no material liability to the PBGC exists and no
circumstances exist that could reasonably be expected to result in any such
liability; and (vi) no material withdrawal liability (within the meaning of
Section 4201(a) of ERISA) exists and no circumstances exist that could
reasonably be expected to result in any such liability.
(c) As of the date hereof, none of the Borrowers has any obligation
under any Employee Plan to provide post-employment health care benefits to
any of its current or former employees, except as may be required by
Section 4980B of the Code or otherwise required by law.
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Section 5.7. Taxes and Filing of Tax Returns. Each of the Borrowers has
-------------------------------
filed all material tax returns required to have been filed and has paid or has
made adequate provision for payment of all Taxes shown to be due and payable on
such returns, including interest and penalties, and all other Taxes which are
payable by such party, to the extent the same have become due and payable other
than Taxes with respect to which a failure to pay would not have a Material
Adverse Effect. Borrowers have no knowledge of any proposed Tax assessment
against any Borrower other than customary ad valorem taxes or other Taxes to
become due in the normal course of business, and all Tax liabilities of each
Borrower is adequately provided for. No income tax liability of any Borrower
has been asserted by the Internal Revenue Service for Taxes in excess of those
already paid, the payment of which would have a Material Adverse Effect.
Section 5.8. Ownership or Lease of Assets. Borrowers have good and
----------------------------
indefeasible title to all of the Collateral. Borrowers own or lease all of the
assets necessary to continue their businesses as conducted prior to the
execution of this Agreement. There is no Lien on any of the Collateral other
than Permitted Encumbrances and the Liens described in Section 7.5 and the
-----------
execution, delivery, performance or observance of the Loan Documents will not
require or result in the creation of any other Lien on any Borrower's assets.
The Collateral is not and will not become subject to set off, counterclaim,
defense, allowance, or adjustment (other than warranty claims, the aggregate
amount of which shall not be material); there is no financing statement, or
similar statement or instrument of registration under the laws of any
jurisdiction, covering or purporting to cover any interest of any kind in the
Collateral or its proceeds on file or registered in any public office other than
a financing statement in favor of Lenders covering the Collateral; there is no
other financing arrangement with any party other than Lenders with respect to
the Collateral; the Collateral is free from damage caused by fire or other
casualty.
Section 5.9. Business; Compliance. Each of the Borrowers has performed
--------------------
and abided by all obligations required to be performed by it under any license,
permit, order, authorization, grant, contract, agreement, or regulation to which
it is a party or by which it or any of its assets are bound and which, if any
such Person were to fail to perform or abide by, such failure would have a
Material Adverse Effect.
Section 5.10. Compliance with Law. The business and operations of each
-------------------
Borrower have been and are being conducted in accordance with all applicable
laws, rules and regulations of all Governmental Authorities, other than
violations which would not (either individually or collectively) have a Material
Adverse Effect.
Section 5.11. Full Disclosure. All information heretofore furnished by
---------------
Borrowers, (or any other party on Borrowers' behalf) to Agent and Lenders for
purposes of or in connection with this Agreement or any transaction contemplated
hereby is, and all such information hereafter furnished by Borrowers to Agent
and any Lender will be, true and accurate in every material respect, there have
been no material adverse changes in such information and shall be, to the best
of the knowledge and belief of the party furnishing such information, without
material omission. Other than general industry trends which are not specific to
Borrowers, Borrowers have, to the best of their knowledge, disclosed to Agent in
writing any and all facts which might reasonably be expected to materially and
adversely affect the business, operations, prospects or
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condition, financial or otherwise, of Borrowers, taken as a whole, or the
ability of Borrowers to perform their obligations under this Agreement or the
other Loan Documents.
Section 5.12. Environmental Matters. Borrowers (i) do not know of any
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environmental condition or circumstance, such as the presence of any hazardous
substance (as defined in Section 6.7), adversely affecting the properties or
-----------
operation of Borrowers, (ii) have not received any report of a violation by
Borrowers of any Applicable Environmental Law, or (iii) do not know that
Borrowers are under any obligation to remedy any violation of any Applicable
Environmental Law.
Section 5.13. Purpose of Credit. Borrowers will use the proceeds of the
-----------------
Credit Facility for the purposes stated in Section 2.1 hereof. No part of the
-----------
proceeds of the Credit Facility will be used, directly or indirectly, for a
purpose which violates any law, rule or regulation. Borrowers will not,
directly or indirectly, use any of the proceeds of the Credit Facility for the
purpose of purchasing or carrying, or retiring any Debt which was originally
incurred to purchase or carry, any "margin stock" as defined in the Margin
Regulations, or to purchase or carry any "security that is publicly-held" within
the meaning of Regulation T of the Board of Governors of the Federal Reserve
System, or otherwise take or permit any action which would involve a violation
of such Margin Regulations or any other regulation of such Board of Governors.
Borrowers will not engage principally, or as one of its important activities, in
the business of extending credit for the purpose of purchasing or carrying any
"margin stock" within the meaning of the Margin Regulations.
Section 5.14. Governmental Regulations. Borrowers are not subject to
------------------------
regulation under (a) the Investment Advisers Act of 1940, as amended, (b) the
Investment Company Act of 1940, as amended, (c) the Public Utility Holding
Company Act of 1935, as amended, (d) any Margin Regulations, or (e) any other
law, rule or regulation which regulates the incurrence of Debt.
Section 5.15. Indebtedness. As of the Closing Date, none of the Borrowers
------------
are an obligor on any Debt other than (a) the Other Lender Obligations and (b)
the Debt described on Schedule 5.15 hereto.
-------------
Section 5.16. Insurance. Each Borrower maintains with financially sound,
---------
responsible and reputable insurance companies or associations (or, as to
workers' compensation or similar insurance, with an insurance fund or by self-
insurance authorized by the jurisdictions in which it operates) insurance
concerning its properties and business against such casualties and contingencies
and of such types and in such amounts (and with co-insurance and deductibles) as
is customary for the same or similar businesses.
Section 5.17. Solvency. With respect to each Borrower and on a
--------
consolidated basis (a) the aggregate fair market value of assets exceeds the
aggregate amount of Debts (whether contingent, subordinated, unmatured,
unliquidated, or otherwise), (b) the Borrowers, individually and taken as a
whole, have sufficient cash flow to enable them to pay their Debts as they
mature, and (c) Borrowers, individually and as a whole, have a reasonable amount
of capital to conduct their business as presently contemplated.
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Section 5.18. Subsidiaries. Other than the members of the Borrowing
------------
Group, TBM and the Borrowers have no other Subsidiaries.
Section 5.19. Locations. The business, storage and distribution locations
---------
of each of the Borrowers are as listed on Schedule 5.19 hereto. The chief
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executive office of each of the Borrowers, and the office where all the material
records and books of account of such Borrowers are kept, are and shall be at the
locations identified in Schedule 5.19 hereto.
-------------
Section 5.20. Trademarks, Tradenames, etc. Borrowers have common law
----------------------------
interest, own or are licensed to use all trademarks, tradenames, copyrights,
technology, know-how, and processes necessary to conduct all business material
to its condition, financial or otherwise, business, or operations as such
business is currently conducted. No claim has been asserted or is pending by
any Person with respect to the use by any of the Borrowers of any such
trademarks, tradenames, copyrights, technology, know-how, and processes.
Section 5.21. Business Relationships. There exists no actual or
----------------------
threatened termination, cancellation, or limitation of, or any modification or
change in, the business relationship between any of the Borrowers with any
customer or any group of customers whose purchases individually or in the
aggregate are material to the business of Borrowers, or with any material
supplier for whom Borrowers do not have a readily available alternative supplier
acceptable to Borrowers in their reasonable discretion.
ARTICLE VI
AFFIRMATIVE COVENANTS
Borrowers covenant and agree that without the prior written consent of the
Required Lenders, so long as Lenders' commitment to make Advances under the
Credit Facility remains in effect, or any Letters of Credit remain outstanding
or any of the other Obligations remain unpaid:
Section 6.1. Information From Borrowers. Borrowers will deliver, or cause
--------------------------
to be delivered, to Agent on behalf of Lenders:
(a) As soon as available and in any event within ninety (90) days
after the end of Borrowers' Fiscal Year, a consolidated balance sheet of
the Borrowers as of the end of such Fiscal Year and the related statements
of income and cash flow for such Fiscal Year, setting forth in each case in
comparative form the figures for the previous Fiscal Year, all reported by
Borrowers in accordance with GAAP and audited by such independent public
accountants reasonably acceptable to Agent.
(b) As soon as available and in any event within forty-five (45) days
after the end of each calendar quarter, a balance sheet and related
statement of income of the Borrowers as of the end of such quarter and
year-to-date on a consolidated basis and by individual retail store, all
certified by the chief financial officer or the chief accounting officer of
TBM as to fairness of presentation and as to whether such financial
statements
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fairly reflect the financial condition of Borrowers as of the date of
delivery thereof, subject to year-end adjustments. Such financial
statements shall be prepared in conformity with GAAP, except that certain
information and note disclosures normally included in annual financial
statements prepared in accordance with GAAP may be condensed or omitted
provided that the disclosures made are adequate to make the information
presented not misleading, and GAAP shall be applied on a basis consistent
with the financial statements referred to in Section 6.1(a).
--------------
(c) As soon as available and in any event within thirty (30) days
after the end of each calendar month, a Borrowing Base Certificate,
together with a Borrowing Base Schedule as of the end of such month.
(d) Simultaneously with the delivery of each set of financial
statements referred to in Sections 6.1(a) and (b) a certificate of an
-----------------------
Authorized Officer of TBM in the form attached hereto as Exhibit F (i)
---------
setting forth in reasonable detail the calculations required to establish
compliance with the requirements of Section 3.5(b) and Sections 7.1 through
-------------- ------------
and including Section 7.3, on the date of such financial statements, (ii)
-----------
attesting to compliance with the terms of the Loan Documents, and (iii)
with respect only to the financial statements delivered pursuant to
Sections 6.1(a) and (b), stating, to the best of such Authorized Officer's
-----------------------
knowledge and belief, whether or not such financial statements fairly
reflect in all material respects the financial condition of the Borrowers
and results of the Borrowers operations as of the date of the delivery of
such financial statements.
(e) Immediately upon an Authorized Officer becoming aware of the
occurrence of any Default, a certificate of an Authorized Officer of TBM
setting forth the details thereof and the action which Borrowers are taking
or propose to take with respect thereto.
(f) Prompt notification of (i) any material adverse change in the
financial condition of Borrowers, including, without limitation, the
occurrence of any litigation, in each case which could reasonably be
expected to have a Material Adverse Effect, or (ii) the occurrence of any
acceleration of the maturity of any indebtedness owing by any of the
Borrowers, or any default under any indenture, mortgage, agreement,
contract or other instrument to which any of the Borrowers is a party or by
which any of the Borrowers or any properties of any of the Borrowers is
bound, if such default or acceleration might have a Material Adverse
Effect, or (iii) the receipt by any of the Borrowers, or when any of the
Borrowers becomes aware thereof, of notice of the occurrence of a default
by any of the Borrowers under, or acceleration of, any Debt of any of the
Borrowers under any indenture, mortgage, agreement, contract or other
instrument. Nothing contained in this Section 6.1(f) shall be deemed a
--------------
waiver or modification in any manner of any restrictions on the right of
Borrowers to incur Debt or encumber its Assets contained in this Agreement
or in any of the Loan Documents.
(g) At such time as such reports are filed with the SEC, true and
complete copies of TBM's annual 10-K report, quarterly 10-Q report and all
other filings and reports which it makes to the SEC.
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(h) Contemporaneously with the creation or acquisition (in accordance with
the provisions of Section 7.15) of any new Subsidiary, or the acquisition
------------
of any new retail store, by any member of the Borrowing Group, TBM will
notify the Agent of such Subsidiary's name, its tax indentification number
and the address of its chief executive offices or the address of such new
retail store. With respect to a new Subsidiary, no later than fifteen (15)
Business Days following the later to occur of (a) the creation of such new
Subsidiary or (b) receipt by TBM or such new Subsidiary from the Agent of
forms of the Loan Documents (including a Supplemental Loan and Security
Agreement) to which such new Subsidiary is to be a party, or appropriate
amendments to this Agreement or the Intercreditor Agreements, as well as
forms of acceptable legal opinions and other documents necessary to
demonstrate the due authorization, execution and delivery by such new
Subsidiary of such Loan Documents or amendments thereto, and the perfection
of the security interests to be created pursuant thereto, shall cause such
new Subsidiary to deliver executed counterparts of such Loan Documents,
amendments, landlord lien waivers, financing statements, legal opinions and
other documents to the Agent. Upon such delivery of such executed
counterparts of such Loan Documents, amendments, landlord lien waivers,
financing statements, legal opinions and other documents to the Agent, (y)
such new Subsidiary shall comply with and be bound by all of the terms and
conditions of the Loan Documents (including the Intercreditor Agreements)
as a Borrower thereunder, and (z) TBM shall cause such new Subsidiary to
take all actions, which it would have been required to make or take had it
been a Borrower on the Closing Date including, without limitation, making
all representations and warranties as a Borrower under each of the Loan
Documents to which it is a party as of the date such representations and
warranties are made. With respect to a new retail store purchased by an
existing Borrower, TBM shall cause legal opinions demonstrating the
perfection of security interests, landlord lien waivers and financing
statements to be delivered to Agent within fifteen (15) Business Days of
the closing of such acquisition.
(i) From time to time such additional information regarding the
financial position or business of any of the Borrowers as Agent, at the
request of any Lender, may reasonably request, including, without
limitation, information concerning the insurance being maintained by
Borrowers.
Section 6.2. Business of Borrower. The primary business of Borrowers is
--------------------
and Borrowers covenant that it shall remain, the retail sale of boats, trailers
and motors, and parts and accessories appropriate thereto, and the ownership and
maintenance of assets related thereto.
Section 6.3. Right of Inspection. Borrowers will permit Agent or any
-------------------
Lender, or any officer, employee or agent of any such party, to visit and
inspect any of the assets of Borrowers at the expense of Borrowers (prior to the
occurrence of a Default, Agent and Lenders shall be entitled to make only two
such visits or inspections, not including a Fiscal Year Audit, in a twelve-month
period) examine the books of record and accounts of Borrowers, take copies and
extracts therefrom, and discuss the affairs, finances and accounts of Borrowers
with the respective officers, accountants and auditors of Borrowers (all at such
reasonable times as often as Agent or any Lender may reasonably require).
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Section 6.4. Maintenance of Insurance. (a) Each of the Borrowers will at
------------------------
all times maintain or cause to be maintained insurance covering its respective
risks in such coverage amounts as are customarily carried by businesses
similarly situated including, without limitation, the following: (i) workmen's
compensation insurance; (ii) comprehensive general public liability and property
damage insurance in respect of all activities in which such Person might incur
personal liability for the death or injury of an employee or third person, or
damage to or destruction of another's property; (iii) insurance against loss or
damage by fire, lightning, hail, tornado, explosion and other similar risk; and
(iv) comprehensive automobile liability insurance.
Section 6.5. Payment of Taxes, Impositions and Claims. Each of the
----------------------------------------
Borrowers shall pay (a) all Taxes imposed upon it or any of its assets or the
Collateral with respect to any of its franchises, business, income or profits,
and all Impositions not later than the due date thereof, or before any material
penalty or interest may accrue thereon and (b) all claims (including, without
limitation, claims for labor, services, materials and supplies) for sums which
have become due and payable and which by law have or might become a Lien on any
of its assets; provided, however, payment of Taxes, Impositions or claims shall
not be required if and for so long as (i) the amount, applicability or validity
thereof is currently being contested in good faith by appropriate action
promptly initiated and diligently conducted in accordance with good business
practices and no material part of the property or assets of such Person are
subject to levy or execution, (ii) such Person, as required in accordance with
GAAP, shall have set aside on its books reserves (segregated to the extent
required by GAAP) deemed by it to be adequate with respect thereto, and (iii)
Borrowers have notified Agent of such circumstances, in detail satisfactory to
Agent, and, provided further, that the applicable Person shall pay any such Tax,
Imposition or claim if such contest is not successful and in any event prior to
the commencement of any action to realize upon or foreclose any lien against any
of such Person's Assets.
Section 6.6. Compliance with Laws and Documents. Each Borrowers shall at
----------------------------------
all times observe and comply with all Legal Requirements. Each of the Borrowers
shall maintain all certificates, franchises, permits, licenses, and
authorizations necessary to the conduct of its business or the operation of its
properties, except when the failure to maintain such items would not have a
Material Adverse Effect.
Section 6.7. Environmental Law Compliance and Indemnity. Each of the
------------------------------------------
Borrowers agree to promptly pay and discharge when due all debts, claims,
liabilities and obligations with respect to any clean-up measures necessary for
such Borrower to comply with Applicable Environmental Laws affecting such
Borrower. Borrowers hereby, jointly and severally, indemnify and agree to
defend and hold Agent and each Lender and its successors and assigns harmless
from and against any and all claims, demands, causes of action, loss, damage,
liabilities, costs and expenses (including reasonable attorneys' fees and court
costs) of any and every kind or character, known or unknown, fixed or
contingent, asserted against or incurred by Agent or any Lender at any time and
from time to time related to any violation or purported violation of any
Applicable Environmental Laws, including, without limitation, those asserted or
arising subsequent to the payment or other satisfaction of the Notes, by reason
of, arising out of or related in any way to Agent's and Lenders' entering into
this Agreement and the transactions herein contemplated, INCLUDING MATTERS
ARISING OUT OF THE ORDINARY NEGLIGENCE OF AGENT OR ANY LENDER, BUT EXCLUDING
MATTERS ARISING OUT OF THE GROSS NEGLIGENCE OR WILLFUL
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MISCONDUCT OF AGENT OR ANY LENDER. It shall not be a defense to the covenant of
Borrowers to indemnify that the act, omission, event or circumstance did not
constitute a violation of any Applicable Environmental Law at the time of its
existence or occurrence. The terms "hazardous substance" and "release" shall
------------------- -------
have the meanings specified in the Superfund Amendments and Reauthorization Act
of 1986 ("SARA"), and the terms "solid waste" and "disposed" shall have the
---- ----------- --------
meanings specified in the Resource Conservation and Recovery Act of 1976
("RCRA"); provided, to the extent that any other applicable laws of the United
----
States of America or political subdivision thereof establish a meaning for
"hazardous substance," "release," "solid waste," or "disposed" which is broader
than that specified in either SARA or RCRA, such broader meaning shall apply.
As used in this Agreement, "Applicable Environmental Law" shall mean and include
----------------------------
the singular, and "Applicable Environmental Laws" shall mean and include the
-----------------------------
collective aggregate of the following: Any law, statute, ordinance, rule,
regulation, order or determination of any governmental authority or any board of
fire underwriters (or other body exercising similar functions), or any
restrictive covenant or deed restriction (recorded or otherwise) affecting
Borrowers pertaining to health, safety or the environment, including, without
limitation, all applicable flood disaster laws and health, safety and
environmental laws and regulations pertaining to health, safety or the
environment, including without limitation, the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 ("CERCLA"), the Resource
------
Conservation and Recovery Act of 1976, the Superfund Amendments and
Reauthorization Act of 1986, the Occupational Safety and Health Act, the Texas
Water Code, the Texas Solid Waste Disposal Act, the Texas Workers' Compensation
Laws, and any federal, state or municipal laws, ordinances, regulations or law
which may now or hereafter require removal of asbestos or other hazardous wastes
from any property of Borrowers or impose any liability on Agent or any Lender
related to asbestos or other hazardous wastes in any property of Borrowers. The
provisions of this Section 6.7 shall survive the repayment of the Notes and
-----------
expiration of the Letters of Credit. In the event of the transfer of the Notes
or any portion thereof, each Lender or any prior holder of the Notes and any
participants shall continue to be benefitted by this indemnity and agreement
with respect to the period of such holding of the Notes.
Section 6.8. Covenant Compliance. Each of the Borrowers shall perform and
-------------------
comply with all covenants, obligations and agreements contained in this
Agreement and in the Loan Documents applicable to such Person.
Section 6.9. Quantity and Quality of Documents. All certificates,
---------------------------------
opinions, reports and documents to be delivered from time to time hereunder
shall be in such number of counterparts as Agent may reasonably request and in
form reasonably acceptable to Agent, and counterpart signature pages to any such
documents may be attached to and shall, together with all counterparts,
constitute one and the same document.
Section 6.10. Additional Documents. Each of the Borrowers shall execute
--------------------
and deliver or cause to be executed and delivered to Agent upon Agent's request
such other and further instruments or documents as in the judgment of Agent may
be required to better effectuate the transactions contemplated herein or to
conform, create, evidence, perfect, preserve or maintain the Lenders' rights
hereunder or under the Loan Documents, including without limitation, each of the
Borrowers shall, within sixty (60) days following the Closing Date, execute and
deliver
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an Intercreditor Agreement properly executed by each of Borrowers' existing
lenders identified on Schedule 5.15 hereto.
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ARTICLE VII
NEGATIVE COVENANTS
Borrowers covenant and agree that without the prior written consent of the
Required Lenders, so long as Lenders' commitment to make Advances under the
Credit Facility remains in effect, any Letters of Credit remain outstanding or
any of the Obligations remain unpaid:
Section 7.1. Operating Leverage Ratio. As of the end of the fiscal
------------------------
quarters of the Borrowing Group ending June 30 and September 30 of each year,
Borrowers shall not cause or permit the Operating Leverage Ratio to be less than
3.50 to 1.00.
Section 7.2. Minimum Consolidated Tangible Net Worth. As of the end of
---------------------------------------
any fiscal quarter of the Borrowing Group, Borrowers shall not cause or permit
Consolidated Tangible Net Worth to be less than $12,000,000.00.
Section 7.3. Coverage Ratio. As of the end of any fiscal quarter of the
--------------
Borrowing Group, Borrowers shall not cause or permit the Debt Coverage Ratio to
be less than 1.5 to 1.00.
Section 7.4. Limitation on Sale of Properties. None of the Borrowers
--------------------------------
shall sell, assign, convey, exchange, lease or otherwise dispose of any of its
Collateral, properties, rights, assets or business, whether now owned or
hereafter acquired, except (a) in the ordinary course of its business, and (b)
obsolete or worn out property, or equipment sold in contemplation of the
acquisition of replacement equipment of at least equal value or utility.
Section 7.5. Limitations on Liens. None of the Borrowers shall create,
--------------------
incur, assume or suffer to exist any Lien upon any of its assets other than (a)
the Permitted Encumbrances, (b) Liens existing on any asset prior to the
acquisition thereof by any of the Borrowers or created on real property or
capital assets in contemplation of the acquisition of additional retail stores,
(c) Liens arising out of the refinancing, extension or renewal or refunding of
any debt secured by any lien permitted under this Section 7.5, (d) liens related
-----------
to capitalized lease obligations and (e) Liens in favor of the Agent and the
Lenders.
Section 7.6. Change in Business, Consolidations, Mergers, Sales of Assets,
-------------------------------------------------------------
and Maintenance. None of the Borrowers shall, without prior approval of the
- ---------------
Required Lenders, (a) make any material change in the nature of its business,
(b) consolidate or merge with or into any other Person, (c) sell, lease, abandon
or otherwise transfer all or any material part of its assets to any Person, in
one or a series of related transactions, or (d) terminate, or fail to maintain,
its good standing and qualification to transact business in all jurisdictions.
Section 7.7. Investments. None of the Borrowers, shall directly or
-----------
indirectly, make any loans, advances, extensions of credit or capital
contributions to, make any investment in, or
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<PAGE>
purchase any stock or securities of, or interest in, any Person, except for (a)
Permitted Investments, (b) investments in the form of loans, advances or other
obligations owed by any of the Borrowers to any other Borrower (c) loans,
advances or extensions of credit made in the ordinary course of business and (d)
investments in the form of loans or advances made by any of the Borrowers to any
employee under employee stock option or retirement plans.
Section 7.8. Distributions. None of the Borrowers shall make or declare
-------------
any Distributions until the Obligations have been paid in full except for: (a)
payments in respect of redemptions or repurchases of Borrowers' stock, provided
that the maximum payments in respect thereof shall not exceed $1,000,000.00 in
the aggregate and (b) Distributions by any of the Borrowers to any other
Borrower.
Section 7.9. Transactions with Affiliates. Except in connection with any
----------------------------
acquisition permitted hereunder or approved by Lenders, none of the Borrowers
shall engage in any transaction with an Affiliate of any Borrower unless such
transaction is generally as favorable to such Borrower as could be obtained in
an arm's length transaction with an unaffiliated Person in accordance with
prevailing industry customs and practices.
Section 7.10. Limitation on Contingent Liabilities. None of the Borrowers
------------------------------------
shall create, incur, assume or suffer to exist any contingent liabilities,
except for (a) litigation claims which do not result in a violation of Section
-------
8.1(l), and (b) contingent liabilities which are related to, and not in an
- ------
amount which exceeds, Debt otherwise permitted to exist under the terms of this
Agreement. TBM shall notify Agent upon the occurrence of all actual or
contingent liabilities exceeding Five Hundred Thousand and No/100 Dollars
($500,000.00).
Section 7.11. Employee Plans.
--------------
(a) None of the Borrowers shall permit or suffer to exist any
circumstances with respect to any Employee Plan that is likely to have a
Material Adverse Effect. Each of the Borrowers shall use its best efforts
to maintain and administer, and to cause each member of its Controlled
Group (as that term is defined in the Code) to maintain and administer, any
Employee Plan in accordance with the applicable requirements of the Code
and ERISA.
(b) With respect to any Pension Plan, none of the Borrowers shall (i)
permit any accumulated funding deficiency (within the meaning of Section
412(a) of the Code), whether waived or unwaived, to exist; (ii) permit the
present value of accrued benefits (based on the most recent actuarial
valuation prepared for each such plan, if any, in accordance with ongoing
actuarial assumptions) to exceed the current value of plan assets allocable
to such benefits by a material amount; (iii) permit any reportable event
(within the meaning of Section 4043 of ERISA) to occur, other than a
reportable event with respect to which the 30-day notice requirement has
been waived by regulation; (iv) permit a prohibited transaction (within the
meaning of Section 4975 of the Code) for which there exists no statutory or
regulatory exception to occur which has or could have a Material Adverse
Effect; (v) incur any material liability to the PBGC; or (vi) incur any
material withdrawal liability (within the meaning of Section 4201(a) of
ERISA).
Page 39
<PAGE>
(c) None of the Borrowers shall incur a material obligation to provide
post-employment health care benefits to any of its current or former
employees, except as may be required by Section 4980B of the Code or
otherwise required by law.
Section 7.12. Use Violations. None of the Borrowers shall use, maintain,
--------------
operate or occupy, or allow the use, maintenance, operation or occupancy of, any
of its properties in any manner which (a) violates any Legal Requirement unless
such violation would not have a Material Adverse Effect, (b) constitutes a
public or private nuisance, or (c) makes void, voidable or cancelable any
insurance then in force with respect thereto.
Section 7.13. Fiscal Year and Accounting Methods. None of the Borrowers
----------------------------------
will change its Fiscal Year or its method of accounting other than changes as
are concurred with by such Person's independent public accountants as being
required by GAAP.
Section 7.14. Governmental Regulations. None of the Borrowers will
------------------------
conduct its business in such a way that it will become subject to regulation
under the Investment Advisers Act of 1940, as amended. None of the Borrowers
will conduct its business in such a way that it will become subject to
regulation under the Investment Company Act of 1940, as amended, or the Public
Utility Holding Company Act of 1935, as amended, or any other laws, rules or
regulations which regulate the incurrence of Debt.
Section 7.15. Subsidiaries. Any Subsidiary created or acquired Subsidiary
------------
shall become a party to this Agreement and the other Loan Documents by its
execution and delivery of the Supplemental Loan and Security Agreement, together
with, in respect of the new Subsidiary, the satisfaction of all the conditions
and requirements of Section 4.1, with the exception of Section 4.1(j) and (m),
-----------
and the other conditions and requirements set forth in Section 6.1(h).
ARTICLE VIII
DEFAULTS AND REMEDIES
Section 8.1. Events of Default. The term "Event of Default" as used in
----------------- -----------------
this Agreement, shall mean any one of the following:
(a) The failure of Borrowers to pay when due any principal of the
Notes;
(b) The failure of Borrowers to pay when due any interest on the
Notes, or any fees, charges or any other amounts payable to Agent or any
Lender hereunder or under any of the Notes or other Loan Documents and the
continuance of such failure, refusal or neglect for a period of ten (10)
days after the date such amount is due;
(c) The failure, refusal or neglect of Borrowers to observe, perform
or comply with any covenant or agreement contained in Article VI and
----------
Article VII (other than Sections 6.4, 6.5, 6.6, 6.7, 7.1, 7.2, 7.3, 7.7 and
----------- -----------------------------------------------
7.15 which are covered by Section 8.1(d) or Section 6.1 which is covered by
---- -------------- -----------
Section 8.1(e));
--------------
Page 40
<PAGE>
(d) The failure, refusal or neglect of Borrowers to properly observe,
perform or comply with any covenant, agreement or obligation contained in
this Agreement, or any of the other Loan Documents (other than those
covered by Sections 8.1(a), (b), (c) and (e)) and the continuance of such
---------------------------------
failure, refusal or neglect for a period of thirty (30) days after written
notice thereof has been given to TBM, on behalf of Borrowers, by Agent or a
representative of Agent;
(e) The failure, refusal or neglect of Borrowers to properly observe,
perform or comply with the covenants, agreements or obligations contained
in Section 6.1 of this Agreement and the continuance of such failure,
-----------
refusal or neglect for a period of five (5) days after written notice
thereof has been given to TBM, on behalf of Borrowers, by Agent or a
representative of Agent;
(f) Any representation, warranty, certification or statement made by
Borrowers (either for themselves or for any other Person) in this Agreement
or by Borrowers or any other Person on behalf of Borrowers in any
certificate, financial statement or other document delivered pursuant to
this Agreement or any other Loan Document shall prove to have been untrue
in any material respect when made or deemed to have been made;
(g) The occurrence of any default under the Security Agreement or any
of the other Loan Documents;
(h) The occurrence of any event or condition which constitutes a
default (which default has not been cured in accordance with any applicable
period of grace or cure) under or with respect to any Debt of any of the
Borrowers (including, without limitations, the Other Lender Obligations of
the Borrowers) and the continuance of such default or condition
constituting such default for a period of thirty (30) days after written
notice thereof has been given to TBM, on behalf of Borrowers, by Agent or a
representative of Agent;
(i) The filing or commencement by any of the Borrowers of a voluntary
case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy, insolvency
or other similar law now or hereafter in effect, or seeking the appointment
of a trustee, receiver, liquidator, custodian or other similar official of
it or any substantial part of its property, or any of the Borrowers shall
consent to any such relief or to the appointment of or taking possession by
any such official in an involuntary case or other proceeding commenced
against it, or shall make a general assignment for the benefit of
creditors, or shall fail generally to pay its debts as they become due, or
shall take any corporate action to authorize any of the foregoing;
(j) The filing or commencement of an involuntary case or other
proceeding against any of the Borrowers seeking liquidation, reorganization
or other relief with respect to it or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, and such
involuntary
<PAGE>
case or other proceeding shall remain undismissed and unstayed for a period
of thirty (30) days; or an order for relief shall be entered against
Borrowers under the federal bankruptcy laws as now or hereafter in effect;
(k) The liquidation or dissolution of any of the Borrowers;
(l) One or more judgments or orders for the payment of money
aggregating in excess of $250,000 (net of insurance proceeds) shall be
rendered against any of the Borrowers and such judgment or order (A) shall
continue unsatisfied and unstayed (unless bonded with a supersedeas bond at
least equal to such judgment or order) for a period of thirty (30) days; or
(m) Mark Walton, President of TBM, or Mike Perrine, Chief Financial
Officer of TBM, are terminated, dismissed or otherwise cease to serve in
such capacities and person(s) approved by Agent have not been employed by
TBM in replacement thereof within sixty (60) days of such termination,
dismissal or cessation of service.
It is understood and agreed by Borrowers that any of the foregoing "Events
of Default" shall constitute an Event of Default under each of the Notes, and
that such "Events of Default" are cumulative and in addition to any default or
events of default contained in any of the other Loan Documents, and that in the
event of any discrepancy or inconsistency between any Event of Default hereunder
and any default or event of default contained in any other Loan Document, the
description of the Event of Default stated herein shall control.
Section 8.2. Remedies. Upon the occurrence of an Event of Default, Agent,
--------
at the direction and election of the Required Lenders, acting by or through any
of its agents, trustees or other Persons, without notice (unless expressly
provided for herein), demand or presentment (including, without limitation,
notice of default, notice of intent to accelerate or of acceleration) all of
which are hereby waived, and in addition to any other provision of this
Agreement or any other Loan Document, to exercise any or all of the following
rights, remedies and recourses:
(a) Declare the unpaid principal balance of each of the Notes, the
accrued and unpaid interest thereon and any other accrued but unpaid
portion of the Obligations to be immediately due and payable, without
notice (other than notice of the occurrence of an Event of Default sent by
Agent to TBM simultaneously with such acceleration of the Obligations)
(expressly including, but not limited to, notice of default, notice of
intent to accelerate or of acceleration), except any notice that is
expressly required by the terms of this Agreement, or presentment, protest,
demand or action of any nature whatsoever, each of which hereby is
expressly waived by Borrowers, whereupon the same shall become immediately
due and payable. Notwithstanding the foregoing or anything to the contrary
contained herein or in any Loan Document, upon the occurrence of an Event
of Default described in Section 8.1(i) or Section 8.1(j) by Borrowers, the
-------------- --------------
entire unpaid principal balance of the Notes, and all accrued, unpaid
interest thereon shall automatically be accelerated and immediately be due
and payable in full, without notice (expressly including, but not limited
to, notice of default, intent to accelerate or of acceleration),
presentment, protest, demand or action of any nature whatsoever, each of
<PAGE>
which hereby is expressly waived by Borrowers; provided, however, that if
--------
accelerated automatically pursuant to this sentence, the Notes and all such
indebtedness may be reinstated at the option and upon the written approval
of the Required Lenders.
(b) Sell or offer for sale the Collateral, or any part thereof, in
such portions and order as Agent may determine in accordance with the
provisions of the applicable Loan Documents and applicable Legal
Requirements.
(c) Make application to a court of competent jurisdiction, as a matter
of strict right and, except as otherwise provided by applicable law,
without notice to any of the Borrowers or without regard to the adequacy of
the Collateral for the payment of the Obligations, for the appointment of a
receiver of the Collateral, or any part thereof, and to the extent
permitted by applicable law, each Borrower does hereby irrevocably consent
to such appointment. Any such receiver shall have all the usual powers and
duties of receivers in similar cases, including the full power to sell,
dispose and otherwise deal with the Collateral, or any part thereof, upon
such terms that may be approved by the court, and shall apply all proceeds
from the Collateral in accordance with the provisions of Section 8.9
-----------
hereof.
(d) Exercise any and all other rights, remedies and recourses granted
hereunder or under the Loan Documents or otherwise now or hereafter
existing in equity, at law, by virtue of statute or otherwise.
Section 8.3. Rights of Set-Off.
-----------------
(a) Borrowers hereby expressly grant to Lenders the right of setoff
against all deposits and other sums at any time held or credited by or due
from any Lender to any Borrower, in accordance with the provisions of this
Section 8.3. The rights of each Lender under this Section 8.3 are in
----------- -----------
addition to other rights and remedies (including, without limitation, other
rights of setoff under law or equity) which such Lender may have under law
or by agreement.
(b) Upon the occurrence and during the continuance of any Event of
Default, each Lender is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, at its option, without notice
or demand and without liability, to set off and apply any and all deposits
(general or special, time or demand, provisional or final, excepting,
however, any fiduciary or escrow accounts established by Borrowers into
which only funds of unrelated third-parties are deposited, and provided
that Borrowers have informed such Lender and Agent of the nature of such
accounts) at any time held, and other indebtedness at any time owing, by
any Lender to or for the credit or the account of Borrowers against any and
all of the Obligations now or hereafter existing under this Agreement, the
Notes and the other Loan Documents, in such order and manner as such Lender
may determine, subject, however, to the agreements contained in
Section 9.14 hereof, regardless of whether such Lender shall have made any
------------
demand under this Agreement or the Notes and although such obligations may
be unmatured.
<PAGE>
(c) Each of the Borrowers agree, to the fullest extent it may
effectively do so under applicable law, that each Lender and any holder of
a participation in any of the Notes (with the appropriate consent of such
Lender) may exercise rights of setoff or counterclaim and other rights with
respect to such participation as fully as if such holder of a participation
were a direct creditor of such Borrower in the amount of such
participation.
Section 8.4. Remedies Cumulative, Concurrent and Non-Exclusive. Lenders
-------------------------------------------------
shall have all rights, remedies and recourses granted in the Loan Documents, and
available at law or equity and same (a) shall be cumulative and concurrent, (b)
may be pursued separately, successively or concurrently against any of the
Borrowers or any others obligated under any of the Notes, or against any one or
more of them, at the sole discretion of Lenders, (c) may be exercised as often
as the occasion therefor shall arise, it being agreed by Borrowers that the
exercise or failure to exercise any of same shall in no event be construed as a
waiver or release thereof or of any other right, remedy or recourse, and (d) are
intended to be, and shall be, non-exclusive.
Section 8.5. No Conditions Precedent to Exercise Remedies. Borrowers, and
--------------------------------------------
any other Person hereafter obligated for payment or fulfillment of all or any
part of the Obligations shall not, except as otherwise provided by applicable
law, be relieved of such obligation by reason of (a) the failure of a trustee to
comply with any request of any Borrower, or any other person so obligated to
enforce any provisions of the Loan Documents, (b) the release, regardless of
consideration, of any Person obligated with respect to the Obligations, or of
the Collateral or any part thereof, or the additions of any Collateral in the
future, and (c) any other act or occurrence, save and except the complete
payment of the Obligations. Each of the Borrowers waives any right to require
Lenders to proceed against any other Person, exhaust any Collateral or pursue
any other remedy in Lenders' power. All dealings between any Borrower and any
Lender, whether or not resulting in the creation of the Obligations, shall
conclusively be presumed to have been had or consummated upon reliance upon this
Agreement. Each Borrower authorizes Lenders, without notice or demand and
without any reservation of rights against such Borrower and without affecting
liability hereunder or on the Obligations, from time to time, to (i) renew,
extend for any period, accelerate, modify, compromise, settle, or release the
obligation of any other Person that may be obligated with respect to any or all
of the Obligations or Collateral; (ii) take and hold any property as collateral,
other than the Collateral, for the payment of any or all of the Obligations, and
exchange, enforce, waive and release any or all of the Collateral or other
property; and (iii) after the occurrence of an Event of Default, apply the
Collateral or other property and direct the order or manner of sale thereof in
accordance with the terms of this Agreement and the other Loan Documents.
Section 8.6. Release of and Resort to Collateral. The release or
-----------------------------------
substitution of all or any part of the Collateral, regardless of consideration,
shall not in any way impair, affect, subordinate, or release the Lenders' Liens
or their status as first and prior Liens in and to any remaining Collateral.
For payment and performance of the Obligations, Lenders may resort to any other
security therefor held by a trustee in such order and manner as Required Lenders
may elect.
<PAGE>
Section 8.7. Waivers. To the full extent permitted by law, each of the
-------
Borrowers hereby irrevocably and unconditionally waives and releases (a) all
benefit that might accrue to any Borrower by virtue of any present or future law
exempting the Collateral from attachment, levy or sale on execution or providing
for the appraisement, evaluation, stay of execution, exemption from civil
process, redemption or extension of time for payment, (b) except as specifically
provided for herein, all notices of any Default or Event of Default or of any
trustee's or Lenders' election to exercise or his or their actual exercise of
any right, remedy or recourse provided for under the Loan Documents, (c) any
right to a marshalling of assets with respect to the Notes or the Letters of
Credit or any of the Collateral or any Debt of any Borrower, or a sale in
inverse order of alienation and (d) except as specifically provided for herein,
any and all right to receive demand, grace, notice, presentment for payment,
protest, notice of intention to accelerate the Obligations or notice of
acceleration of the Obligations.
Section 8.8. Discontinuance of Proceedings. In case Agent shall have
-----------------------------
proceeded to invoke any right, remedy or recourse permitted under the Loan
Documents and shall thereafter elect to discontinue or abandon same for any
reason, Agent shall have the unqualified right to do so and, in such event, each
of the Borrowers and Lenders shall be restored to their former positions with
respect to the Obligations, the Loan Documents, and otherwise, and the rights,
remedies, recourses and powers of Agent and Lenders shall continue as if same
had never been invoked.
Section 8.9. Application of Proceeds. All payments on the Notes or the
-----------------------
Letters of Credit received by any Lender during the existence of an Event of
Default (unless otherwise elected by Lenders), and the proceeds of any sale or
disposition of, and all proceeds generated by, the Collateral during the
existence of an Event of Default and upon the exercise of Lenders' rights and
remedies hereunder or under any of the Loan Documents, shall be applied by
Lenders, the applicable trustee or the receiver, if one is appointed, to the
extent that funds are so available therefrom, as determined by the Required
Lenders (provided that, as among themselves, Lenders agree that any such
proceeds shall be applied as contemplated by Article IX hereof).
----------
Section 8.10. Power of Attorney. Each of the Borrowers hereby irrevocably
-----------------
appoints Agent, acting for all the Lenders, as the true and lawful attorney of
such Borrower with full power of substitution for, and on behalf of such
Borrower, and in its name, upon the request and instruction of such Borrower and
in any event after the occurrence of an Event of Default, to take any action to
preserve, maintain, protect or enforce the rights and interests of such Borrower
with respect to the Collateral, including, without limitation, to (i) enforce,
cure any default or otherwise act with respect to any leases, service contracts,
management or marketing contracts or any other agreements which are part of,
pertain to or affect any of the Collateral, (ii) take all such action and to
execute all such documents as Agent deems necessary or desirable to preserve or
protect all Accounts included in the Collateral, and (iii) sue for, demand or
collect any sums owing to any Borrower under any Accounts or under leases or
other agreements included in the Collateral. The power so vested in Agent under
this Section 8.10 is one coupled with an interest and shall be irrevocable,
------------
except by written instrument executed jointly by each of the Borrowers and Agent
and filed for record in the Office of the County Clerk of Travis County, Texas.
Notwithstanding the foregoing, Agent shall be under no obligation to exercise
<PAGE>
any of the foregoing rights or take any action necessary to preserve any right
in any asset subject to the Lenders' Liens against any other Person, and Agent,
to the extent permitted herein or by applicable law, may exercise any of the
foregoing rights without incurring any responsibility or liability to any
Borrower or any other Person and without in any way affecting the Obligations or
any other obligations of any Borrower to Lenders. Borrowers, jointly and
severally, agree to reimburse Agent and Lenders upon demand for any costs and
expenses, including, without limitation, reasonable attorneys' fees and
collection costs, that Agent or any Lender may incur while acting as the
attorney-in-fact of each Borrower as provided hereunder (or pursuant to the
attorney-in-fact herein created), all of which costs and expenses shall be
included in the Obligations.
ARTICLE IX
AGENT AND THE LENDERS
Section 9.1. Appointment and Authorization of Agent.
--------------------------------------
(a) Each Lender hereby irrevocably appoints and authorizes Agent as
its nominee and agent, in its name and on its behalf: (i) to act as nominee
for and on behalf of such Lender in and under all Loan Documents; (ii) to
arrange the means whereby the funds of the Lenders are to be made available
to Borrowers under the Loan Documents; (iii) to take such action as may be
requested by any Lender under the Loan Documents (when such Lender is
entitled to make such request under the Loan Documents and after such
requesting Lender has obtained the concurrence of such other Lenders as may
be required under the Loan Documents); (iv) to receive all documents and
items to be furnished to the Lenders under the Loan Documents; (v) to
promptly distribute to each Lender the material information, requests,
documents and items received from Borrowers under the Loan Documents; (vi)
to promptly distribute to each Lender such Lender's Loan Percentage of each
payment or prepayment in accordance with the terms of the Loan Documents;
and (vii) to deliver to the appropriate Persons requests, demands,
approvals and consents received from the Lenders.
(b) The obligations of Agent hereunder are only those expressly set
forth herein. Each Lender and each Borrower agrees that Agent is not a
fiduciary for the Lenders or for any of the Borrowers but simply is acting
in the capacity described herein to alleviate administrative burdens for
both Borrowers and the Lenders and that Agent has no duties or
responsibilities to the Lenders or Borrowers except those expressly set
forth herein. Without limiting the generality of the foregoing, Agent
shall not be required to take any action or exercise any right or remedy
with respect to any Default or Event of Default, except if requested by the
Required Lenders. Notwithstanding the administrative authority delegated
to Agent, Agent shall not cause or permit any modification of the Loan
Documents or take other action relating to the Credit Facility specifically
requiring the consent or approval of the Required Lenders without such
consent or approval. Action taken by Agent including, without limitation,
any exercise of remedies or initiation of suit or other legal proceedings
made in accordance with the
<PAGE>
instructions of the Required Lenders or as otherwise permitted by this
Article IX, shall be binding upon each of the Lenders.
----------
(c) Agent, in its capacity as a Lender, shall have the same Rights
under the Loan Documents as any other Lender and may exercise the same as
though it were not acting as Agent, and any resignation by Agent hereunder
shall not impair or otherwise affect any Rights which it has or may have in
its capacity as an individual Lender.
(d) Agent may now or hereafter be engaged in one or more loan, letter
of credit, leasing, or other financing transactions with any of the
Borrowers, act as trustee or depositary for any of the Borrowers, or
otherwise be engaged in other transactions with any of the Borrowers and/or
their Affiliates (collectively, the "other activities") not the subject of
the Loan Documents. Without limiting the Rights of the Lenders
specifically set forth in the Loan Documents, Agent shall not be
responsible to account to the Lenders for such other activities, and no
Lender shall have any interest in any other activities, any present or
future guaranties by or for the account of any of the Borrowers which are
not contemplated or included in the Loan Documents (any present or future
offset exercised by Agent in respect of such other activities), any present
or future property taken as security for any such other activities, or any
property now or hereafter in the possession or control of Agent which may
be or become security for the Obligations by reason of the general
description of indebtedness secured or of property contained in any other
agreements, documents or instruments related to any such other activities;
provided that, if any payments in respect of such guaranties, such property
or the proceeds thereof or any offset shall be applied to reduction of the
Obligations in priority to any indebtedness arising out of any such other
activities, and each Lender shall be entitled to share in such application
according to its Loan Percentage thereof.
Section 9.2. Possession of Instruments by Agent. Agent shall exercise all
----------------------------------
rights and remedies under the Loan Documents and take all actions with respect
thereto in accordance with the request or direction of the Required Lenders, or
otherwise as and to the extent provided herein or in the other Loan Documents;
provided, however, that Agent may take such actions in its name without the
joinder of the Lenders, and each of the Borrowers and all third parties shall be
entitled to rely on the actions taken by Agent with respect to the execution by
Agent of any and all agreements, financing statements, affidavits, notices or
any other type of document or instrument pertaining thereto, including, without
limitation, in connection with the exercise of any rights or remedies of the
Lenders under the Loan Documents, and the same shall be binding upon all the
Lenders as to any third party relying on such actions of Agent.
Section 9.3. Expenses. Each Lender shall pay its Loan Percentage of any
--------
reasonable expenses (including, without limitation, court costs, reasonable
attorneys' fees and other costs of collection) incurred by Agent in connection
with any of the Loan Documents if Agent does not receive reimbursement therefor
from other sources within thirty (30) days after incurred; provided that, and
subject to the terms and conditions of Section 10.4, each Lender shall be
------------
entitled to receive its Loan Percentage of any reimbursement for such expenses,
or part thereof, which Agent subsequently receives from such other sources.
<PAGE>
Section 9.4. Delegation of Duties; Reliance; Consultation. Lenders may
--------------------------------------------
perform any of their duties or exercise any of their Rights under the Loan
Documents by or through Agent, and Lenders and Agent may perform any of their
duties or exercise any of their Rights under the Loan Documents by or through
their respective officers, directors, employees, attorneys, agents, or other
representatives (collectively, "Representatives"). Agent, Lenders, and their
---------------
respective Representatives shall (a) be entitled to rely upon (and shall be
protected in relying upon) any writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telecopy, telegram, telex or teletype
message, statement, order or other documents or conversation believed by any of
them to be genuine and correct and to have been signed or made by the proper
Person and, with respect to legal matters, upon opinion of counsel selected by
Agent or such Lender, (b) be entitled to deem and treat each Lender as the owner
and holder of its Loan Percentage for all purposes until, subject to
Section 10.10, written notice of the assignment or transfer thereof shall have
- -------------
been given to and received by Agent (and, any request, authorization, consent or
approval of any Lender shall be conclusive and binding on each subsequent
holder, assignee, or transferee of such Lender's Loan Percentage or participant
therein until such notice is given and received), and (c) not be deemed to have
notice of the occurrence of a Default or an Event of Default unless notified
thereof by another Lender or Borrowers. Agent may consult with legal counsel,
independent public accountants, consultants, appraisers and other experts
selected by Agent, and shall not be liable for any action taken or omitted to be
taken by Agent in good faith in accordance with the advice of such counsel,
accountants or experts. Any such counsel, accountants or other experts shall be
engaged to represent and render services to all Lenders as a group unless
otherwise specified by Agent.
Section 9.5. Limitation of Agent's Liability.
-------------------------------
(a) Neither Agent nor any of its Representatives shall be liable for
any action taken or omitted to be taken by it or them under the Loan
Documents in good faith and believed by it or them to be within the
discretion or power conferred upon it or them by the Loan Documents or be
responsible for the consequences of any error of judgment or negligence,
except for gross negligence or willful misconduct, and neither Agent nor
any of its Representatives has a fiduciary relationship with any Lender by
virtue of the Loan Documents (provided that nothing herein shall negate the
obligation of Agent to account for funds received by it for the account of
any Lender).
(b) Unless indemnified to its satisfaction against loss, cost,
liability, and expense, Agent shall not be compelled to do any act under
the Loan Documents or to take any action toward the execution or
enforcement of the powers thereby created or to prosecute or defend any
suit in respect of the Loan Documents. If Agent requests instructions from
the Lenders with respect to any act or action (including, but not limited
to, any failure to act) in connection with any Loan Document, Agent shall
be entitled (but shall not be required) to refrain (without incurring any
liability to any Person by so refraining) from such act or action unless
and until it has received such instructions. In no event, however, shall
Agent or any of its Representatives be required to take any action which it
or they reasonably determine could incur for it or them criminal or civil
liability.
<PAGE>
(c) Agent shall not be responsible in any manner to any Lender or any
participant of a Lender for, and each Lender represents and warrants that
it has not relied upon Agent in respect of, (i) the creditworthiness of
Borrowers and the risks involved to such Lender, (ii) the effectiveness,
enforceability, genuineness, validity, or the due execution of any Loan
Document, (iii) any representation, warranty, document, certificate,
report, or statement made therein or furnished thereunder or in connection
therewith, or (iv) the observation of or compliance with any of the terms,
covenants, or conditions of any Loan Document on the part of any Borrower.
Each Lender jointly and severally agrees to indemnify Agent and hold it
harmless from and against (but limited to such Lender's Loan Percentage of)
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, reasonable expenses, and reasonable disbursements
of any kind or nature whatsoever (including counsel fees and disbursements)
which may be imposed on, asserted against, or incurred by Agent in any way
relating to or arising out of the Loan Documents or any action taken or
omitted by Agent under the Loan Documents (provided that, although Agent
shall have the right to be indemnified for its ordinary negligence, Agent
shall not have the right to be indemnified hereunder for its own fraud,
gross negligence, or willful misconduct).
Section 9.6. Default. Upon the occurrence and continuance of a Default or
-------
an Event of Default, Agent shall make a recommendation to Lenders of any actions
to be taken and each of the Lenders agrees to promptly confer in order that
Lenders can consider such course of action or any other actions to be taken for
the enforcement of the Rights of Lenders; provided that Agent shall be entitled
(but not obligated) to proceed to take any actions necessary in its reasonable
judgment to preserve Rights, pending agreement by Lenders on the course of
action to be taken. If the Required Lenders cannot agree on a course of action
to be taken within sixty (60) days following Agent's initial recommendation,
Agent shall thereafter take such action as Agent deems advisable to enforce the
Rights of Lenders. Any action directed or approved by the Required Lenders,
including without limitation, any exercise of remedies or initiation of suit or
other legal proceedings, shall be binding upon each Lender. In actions with
respect to any property of any Borrower, Agent is acting for the account of each
Lender to the extent of each Lender's Loan Percentage. Any and all agreements
to subordinate (whether made heretofore or hereafter) other indebtedness or
obligations of any of the Borrowers to the Obligations shall be construed as
being for the benefit of each Lender to the extent of its respective Loan
Percentage. If Agent acquires any security for the Obligations or any guaranty
of the Obligations, the same shall be held for the benefit of each Lender in
proportion to such Lender's respective Loan Percentage.
Lenders agree, among themselves, that unless otherwise agreed to by Agent
and the Required Lenders, all monies collected or received by Agent in respect
of the Credit Facility, directly or indirectly, shall be applied to all costs of
collection and then to interest or principal as recommended by Agent and
approved by the Required Lenders.
Section 9.7. Lenders' Decision. Lenders agree as among themselves that
-----------------
any decisions or elections to be made by Lenders (and not Agent) under this
Agreement and the other Loan Documents shall be made by the Required Lenders,
except in the case, if any, where a specific different number or percentage of
Lenders is expressly required under this Agreement or any
<PAGE>
other Loan Documents (use of the terms "Lenders" in any of the Loan Documents,
without an express provision for different voting rights other than as set forth
in the definition of Required Lenders, does not imply that unanimous consent is
thereby required). Agent may, at its election, request any determination, vote,
consent or approval by Lenders in writing or orally (by telephone or in person).
In addition, if any request by Agent for Lenders' determination or approval
hereunder is made in writing and such writing contains written notice to Lenders
requesting a response within five Business Days, or longer, from the date
Lenders are deemed to have received notice as herein provided (and setting forth
the actual date of the last day of the Lender reply period), then Lenders shall
use reasonable efforts to reply within the applicable reply period, provided,
that if any such Lender does not reply within the applicable reply period, such
Lender shall be deemed not to have approved of or consented to or concurred with
such recommendation or determination.
Section 9.8. Limitation of Liability of Lenders. To the extent permitted
----------------------------------
by law, (a) neither Agent nor any Lender or participant of a Lender shall incur
any liability to any other Lender or participant of a Lender except for acts or
omissions in bad faith, and (b) neither Agent nor any Lender or participant of a
Lender shall incur any liability to any of the Borrowers or any other Person for
any act or omission of any other Lender or any participant.
Section 9.9. Relationship of Lenders. Nothing herein shall be construed
-----------------------
as creating a partnership or venture among Agent and Lenders or among Lenders.
Section 9.10. Debtor-Creditor Relationship. Each Lender has and shall
----------------------------
maintain a direct creditor-debtor relationship with Borrowers and will have
direct recourse, singly or in the aggregate, against Borrowers, subject to the
terms and conditions of the Loan Documents. Notwithstanding the foregoing, any
right, remedy, action, omission or waiver respecting this Agreement, the Notes,
and the other Loan Documents shall only be exercised, made, taken, or permitted
by Agent, acting upon the direction of the Required Lenders, as the agent for
all Lenders; provided, however, that if the Required Lenders have elected and
directed Agent to institute suit against any of the Borrowers for payment of any
past due amounts under the Notes or any other Obligations for which Lenders have
recourse against any of the Borrowers, or in the event of any bankruptcy
proceedings or other legal proceedings relating to this Agreement against any of
the Borrowers, each Lender shall be entitled, at its option, to bring or join in
such proceedings in its own name.
Section 9.11. Credit Decisions. Each Lender acknowledges that it has,
----------------
independently and without reliance upon Agent or any other Lender, and based on
such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and each of the other Loan
Documents to which it is a party or to which Agent is a party for its benefit.
Each Lender also acknowledges that it will, independently and with out reliance
upon Agent or any other Lender, and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking any action under this Agreement or with respect to the
Credit Facility.
Section 9.12. Removal of Agent. Lenders, acting by written notice to
----------------
Agent from and agreed to by all of the Lenders other than Agent, may remove for
cause the then current Agent,
<PAGE>
as Agent, and appoint one of the other Lenders as the successor Agent. Upon the
appointment of a successor Agent, the removed Agent and the successor Agent
shall execute such documents as any Lender may reasonably request to reflect
such appointment of a successor Agent and shall notify Borrowers of such change
in the Agent. The successor Agent shall be vested with all rights, powers and
privileges and be bound to all duties, obligations and responsibilities of Agent
in and under this Agreement and the other Loan Documents; provided, however,
that until such time as Borrowers are notified in writing signed by both the
removed and successor Agents as to the appointment of the successor Agent,
Borrowers shall be entitled to rely on any decision, approval or other act by
the removed Agent as binding on Lenders, and may pay to Agent any amounts due or
owing by Borrowers under the Loan Documents.
Section 9.13. Resignation by Agent. An Agent's status as Agent under this
--------------------
Agreement shall automatically terminate fifteen (15) days after the closing or
liquidation of such Agent or fifteen (15) days after such Agent is adjudicated
insolvent. Additionally, Agent may resign its position as Agent at any time by
giving at least thirty (30) days written notice thereof to Borrowers and the
other Lenders. Upon any such occurrence causing a termination of Agent or the
delivery of such notice of resignation from Agent, the Required Lenders and
Borrowers shall select a successor Agent. If the Required Lenders and Borrowers
cannot agree upon the choice of the successor Agent within ten (10) days after
the occurrence causing a termination in the case of a termination of Agent, or
ten (10) days prior to the effective resignation date set forth in Agent's
resignation notice in the case of a resignation by Agent, then the Designated
Successor Agent shall become the successor Agent. Borrowers shall be entitled
to participate in the selection of the replacement Agent only prior to the
occurrence of a Default. Upon any such termination or resignation, (a) the
successor Agent shall automatically be vested with all rights, powers and
privileges and be bound to all duties, obligations and responsibilities of Agent
in and under this Agreement and the other Loan Documents and shall thereafter be
deemed the "Agent" for all purposes under the Loan Documents and (b) such
terminating or resigning Agent shall act only in a custodial capacity for the
holding by it of any funds theretofore received from Borrowers and any such
funds shall be held in trust for the benefit of the Lenders or Borrowers, as the
case may be. Additionally, upon the successor Agent becoming Agent as provided
in this Section 9.13, the terminating or resigning Agent and the new Agent shall
------------
execute such documents as any Lender may reasonably request to reflect such
succession. All costs incurred in connection with the execution of such
documents shall be paid by Lenders in proportion to each Lender's Loan
Percentage.
Section 9.14. Sharing of Payments and Setoffs. Each Lender agrees that if
-------------------------------
it should receive any amount (whether by voluntary payment, by the exercise of
the right of setoff or banker's lien, by counterclaim or cross action, by the
enforcement of any right under the Loan Documents or otherwise) which is
applicable to the payment of the principal of or interest on the Credit
Facility, of a sum which with respect to the related sum or sums received by the
other Lenders exceeds such Lender's Loan Percentage, then such Lender receiving
such excess payment shall purchase without recourse or warranty from the other
Lenders an interest in the indebtedness of Borrowers to such Lenders in such
amount as shall result in a proportional participation by all of the Lenders in
such amount; provided that if all or any portion of such excess amount is
thereafter recovered from such Lender, such purchase shall be rescinded and the
purchase price restored to the extent of such recovery, but without interest.
This
<PAGE>
Section 9.14 shall not impair the right of any Lender to exercise any right of
- ------------
setoff or counterclaim it may have with respect to any funds in an account
pledged to such Lender to secure only indebtedness other than the Obligations,
and to apply the amount received or subject to such exercise to the payment of
such other indebtedness, it being expressly agreed by all the Lenders, however,
that until the Obligations are paid and satisfied in full, any and all amounts
received by any Lender from offset of any account of any Borrower shall be
applied to the Obligations, and not to any other indebtedness of such Borrower
to such Lender, except in the case of a certificate of deposit or other
designated account (but in no event any operating account of such Borrower) that
is specifically pledged or assigned to a Lender as security for indebtedness
other than the Obligations.
Section 9.15. Non-advancing Lenders. In the event that any Lender shall
---------------------
fail or refuse to advance its Loan Percentage of any payment or reimbursement by
the Lenders as required hereunder, or of any amount to be funded pursuant to
Section 9.3, when it is obligated to do so, Agent shall notify the other Lenders
- -----------
of such failure, and such remaining Lenders, or any of them, may elect, at their
sole option and discretion (without any obligation whatsoever to do so), to
advance such non-advancing Lender's portion, pro rata in accordance with the
proportion that the Loan Percentage of each Lender electing to make such advance
bears to the Loan Percentages of all Lenders electing to make such advance.
Upon making any such advance, and notwithstanding anything to the contrary
expressed or implied herein or in the Notes or any Loan Document, all subsequent
payments made on the Credit Facility or from the exercise of right of setoff or
other remedies under this Agreement or the other Loan Documents, shall be
applied, in the manner described below, only to Lenders other than the non-
advancing Lender (and the non-advancing Lender shall not be entitled to receive
the same), until the amounts advanced by such advancing Lenders on behalf of the
non-advancing Lender (together with the interest earned thereon pursuant to this
Agreement and the Notes), have been repaid in full. As among Lenders other than
the non-advancing Lender, Lenders that advanced funds on behalf of the non-
advancing Lender shall receive the portion the non-advancing Lender would have
been entitled to receive had it advanced (together with the interest earned
thereon pursuant to this Agreement and the Notes), to be applied pro rata in
accordance with the amounts advanced by each such advancing Lender, until the
amounts advanced by such Lenders on behalf of the non-advancing Lender (together
with the interest earned thereon pursuant to this Agreement and the Notes), have
been repaid in full; any Lender that advanced only on its own behalf based on
its Loan Percentage shall be repaid based on such Loan Percentage. In addition,
any Lenders that advance funds on behalf of a non-advancing Lender pursuant to
this Section 9.15 shall have a claim against such non-advancing Lender for the
------------
amounts so advanced and shall be entitled to all rights and remedies at law or
in equity to recover any unpaid amounts. A non-advancing Lender shall not be
entitled to vote on any matters hereunder or related to the Credit Facility (and
its interest shall be excluded for purposes of determining the requisite
percentage or number of Lenders for a vote) so long as such Lender remains a
non-advancing Lender.
Section 9.16. Benefit of Lenders. All terms, conditions and agreements
------------------
set forth in this Article IX, other than those provisions expressly made for the
----------
benefit of Borrowers, are for the sole and exclusive benefit of Lenders, and
neither Borrowers nor any other Person shall be entitled to rely on or seek the
benefit of such provisions; provided, however, that Borrowers shall be entitled
to rely on any decision, approval or other act by Agent as binding Lenders.
<PAGE>
ARTICLE X
MISCELLANEOUS
Section 10.1. Continuing Agreement. This is a continuing Agreement and
--------------------
all the rights, powers and remedies of Lenders hereunder and all agreements and
obligations of Borrowers and Lenders hereunder, shall continue to exist until
all Advances have been paid in full, the commitment of Lenders to make Advances
hereunder has been terminated, all Letters of Credit have been terminated and
all other Obligations have been paid in full.
Section 10.2. Notices. All notices, requests and other communications to
-------
any party hereunder shall be in writing (including bank wire, telecopy or
similar writing), except for any telephone notices as specifically provided for
herein, may be personally served or sent by telecopier, mail or the express mail
service of the United States Postal Service, Federal Express or other equivalent
overnight or expedited delivery service, and (a) if given by personal service or
telecopier (confirmed by telephone), it shall be deemed to have been given upon
receipt; (b) if sent by telecopier without telephone confirmation, it shall be
deemed to have been given twenty-four (24) hours after being given; (c) if sent
by mail, it shall be deemed to have been given upon the earlier of (i) actual
receipt, or (ii) three (3) Business Days after deposit in a depository of the
United States Postal Service, first class mail, postage prepaid; (d) if sent by
Federal Express, the express mail service of the United States Postal Service or
other equivalent overnight or expedited delivery service, it shall be deemed
given upon the earlier of (i) actual receipt or (ii) twenty-four (24) hours
after delivery to such overnight or expedited delivery service, delivery charges
prepaid, and properly addressed to the applicable Borrower or Lender; provided
that notices to Agent under Articles II, III and IV shall not be effective until
-----------------------
received. For purposes hereof, the address of the parties to this Agreement
shall be as set forth in Schedule I attached hereto. Any party may, by proper
----------
written notice hereunder to the other parties, change the address to which
notices shall thereafter be sent to it. Notwithstanding anything to the
contrary implied or expressed herein, the notice requirements herein (including
the method, timing or deemed giving of any notice) are not intended to and shall
not be deemed to increase the number of days or to modify the method of notice
or to otherwise supplement or affect the requirements for any notice required or
sent pursuant to any Legal Requirement (including, without limitation, any
applicable statutory or law requirement), or otherwise given hereunder, that is
not required under this Agreement or the other Loan Documents. The provisions
of this Section 10.2 shall control over any conflicting contractual notice
------------
provisions contained in the Loan Documents.
Section 10.3. No Waivers. No failure or delay by Agent or any Lender in
----------
exercising any right, power or privilege hereunder or under the Notes or any
other Loan Document shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law or in any of the other Loan Documents.
<PAGE>
Section 10.4. Expenses; Documentary Taxes; Indemnification. Each
--------------------------------------------
Borrower, jointly and severally, agrees to pay (a) all expenses of Agent and the
reasonable fees and disbursements of legal counsel for Agent in connection with
the negotiation, documentation and closing of the Credit Facility, and in
connection with any waiver or consent hereunder or under the Loan Documents or
any amendment, supplement or replacement of any of the Loan Documents; and (b)
if a Default or an Event of Default occurs, all out-of-pocket expenses incurred
by Agent or Lenders, including fees and disbursements of legal counsel in
connection with such Event of Default and collection and other enforcement
proceedings resulting therefrom (including, without limitation, any bankruptcy
or other insolvency proceedings), fees of auditors and consultants incurred in
connection therewith and investigation expenses incurred by Lenders in
connection therewith. Each Borrower shall indemnify Agent and each Lender
against any Taxes (other than Taxes on the income of any Lender) imposed by
reason of the execution and delivery of this Agreement or the Notes. Each
Borrower further shall, jointly and severally, indemnify Agent and each Lender
and hold Agent and each Lender harmless from and against any and all
liabilities, losses, damages, costs and expenses of any kind (including, without
limitation, the reasonable fees and disbursements of counsel for Agent and
Lenders in connection with any investigative, administrative or judicial
proceeding, whether or not Agent or Lenders shall be designated a party thereto)
which may be incurred by Agent or any Lender relating to or arising out of this
Agreement or any actual or proposed use of proceeds of the Notes; PROVIDED THAT
-------- ----
NEITHER AGENT NOR ANY LENDER SHALL HAVE THE RIGHT TO BE INDEMNIFIED HEREUNDER
FOR ITS OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, IT BEING THE INTENTION
HEREBY THAT AGENT AND EACH LENDER SHALL BE INDEMNIFIED FOR THE CONSEQUENCES OF
ITS NEGLIGENCE.
Section 10.5. Amendments and Waivers; Consent to Deviation. Any provision
--------------------------------------------
of this Agreement, the Notes or the other Loan Documents may be amended or
waived if, but only if, such amendment or waiver is in writing and is signed by
Borrowers and Required Lenders.
Section 10.6. Survival. All representations, warranties and covenants
--------
made by each Borrower herein or in any certificate or other instrument delivered
by it or on its behalf under the Loan Documents shall be considered to have been
relied upon by Lenders and shall survive the delivery to Agent or Lenders of
such Loan Documents or the extension of any of the Notes (or any part thereof),
regardless of any investigation made by or on behalf of Agent or any Lender.
Section 10.7. Prior Understandings; No Defenses; Release; No Oral
---------------------------------------------------
Agreements. This Agreement supersedes all other prior understandings and
- ----------
agreements, whether written or not, between the parties hereto relating
specifically to the transactions provided for herein. Each Borrower confirms
that there are no existing defenses, claims, counterclaims or rights of offset
against any Lender in connection with the negotiation, preparation, execution,
performance or any other matters related to this Agreement or any of the other
Loan Documents executed as of the date hereof and any of the transactions
contemplated thereby, and each Borrower hereby expressly releases and discharges
each Lender, and its officers and representatives, from any and all such claims,
known or unknown. Each Borrower further confirms that none of the Lenders has
made any agreements with, or commitments or representations to, any Borrower
(either in
<PAGE>
writing or orally) other than as expressly stated herein or in the other Loan
Documents executed as of the date hereof.
THIS WRITTEN CREDIT AGREEMENT, TOGETHER WITH THE OTHER WRITTEN LOAN
DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENT OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.
To the fullest extent applicable, each Borrower and Lender acknowledges and
agrees that this Agreement and each of the Loan Documents shall be subject to
Section 26.02 of the Texas Business and Commerce Code.
Section 10.8. Limitation on Interest. It is expressly stipulated and
----------------------
agreed to be the intent of Borrowers, Agent and Lenders at all times to comply
with the applicable law governing the maximum rate or amount of interest payable
on or in connection with the Obligations. If the applicable law is ever
judicially interpreted so as to render usurious any amount called for under the
Notes or under any of the other Loan Documents, or contracted for, charged,
taken, reserved or received with respect to any of the or if acceleration of the
maturity of the Obligations, any prepayment by Borrowers, or any other
circumstance whatsoever, results in Agent or any Lender having been paid any
interest in excess of that permitted by applicable law, then it is the express
intent of Borrowers, Agent and Lenders that all excess amounts theretofore
collected by Agent and/or Lenders be credited on the principal balance of the
Obligations (or, if the Obligations have been or would thereby be paid in full,
refunded to Borrowers), and the provisions of the Notes and the other applicable
Loan Documents immediately be deemed reformed and the amounts thereafter
collectible hereunder and thereunder reduced, without the necessity of the
execution of any new document, so as to comply with the applicable law, but so
as to permit the recovery of the fullest amount otherwise called for hereunder
and thereunder. The right to accelerate the maturity of the Notes does not
include the right to accelerate any interest which has not otherwise accrued on
the date of such acceleration, and neither Agent nor Lenders intend to collect
any unearned interest in the event of acceleration. All sums paid or agreed to
be paid to Agent and Lenders for the use, forbearance or detention of the
indebtedness evidenced by the Loan Documents shall, to the extent permitted by
applicable law, be amortized, prorated, allocated and spread throughout the full
term of such indebtedness until payment in full so that the rate or amount of
interest on account of such indebtedness does not exceed the Maximum Lawful Rate
or maximum amount of interest permitted under applicable law. The term
"applicable law" as used herein shall mean the laws of the State of Texas, or
- ---------------
any other applicable United States federal law to the extent that it permits
Lenders to contract for, charge, take, reserve or receive a greater amount of
interest than under Texas law. The provisions of this Section 10.8 shall
------------
control all agreements between Borrowers, Agent and Lenders.
Section 10.9. Invalid Provisions. If any provision of the Loan Documents
------------------
is held to be illegal, invalid, or unenforceable under present or future laws
effective during the term thereof, such provision shall be fully severable, the
Loan Documents shall be construed and enforced as if such illegal, invalid, or
unenforceable provision had never comprised a part thereof, and the
<PAGE>
remaining provisions thereof shall remain in full force and effect and shall not
be affected by the illegal, invalid, or unenforceable provision or by its
severance therefrom. Furthermore, in lieu of such illegal, invalid, or
unenforceable provision there shall be added automatically as a part of the Loan
Documents a provision as similar in terms to such illegal, invalid, or
unenforceable provision as may be possible and be legal, valid and enforceable.
Section 10.10. Successors and Assigns.
----------------------
(a) The provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns; provided that (i) no Borrower shall directly or indirectly, assign
-------- ----
or transfer, or attempt to assign or transfer, any of its rights, duties or
obligations under this Agreement without the express prior written consent
of the Required Lenders, (ii) the Lenders may not assign or transfer any of
their rights or interests in this Agreement, the Notes or the other Loan
Documents, other than to an Affiliate of such Lender, except in accordance
with this Section 10.10, and (iii) Agent may not assign or transfer more
-------------
than forty-nine percent (49%) of its rights or interests in this Agreement,
the Notes or the Loan Documents, without the express prior written consent
of Borrowers, which consent will not be unreasonably withheld and will only
be required prior to the occurrence of a Default; provided, that Agent may
sell, assign or transfer participations in this Agreement, the Notes or the
other Loan Documents in excess of forty-nine percent (49%) of its rights or
interests.
(b) Each Lender shall have the right, at any time and from time to
time, to assign all or a part of its rights, interests and obligations
under this Agreement and to sell or transfer to any Person a participation
interest in such Lender's portion of the Credit Facility, subject to and in
accordance with the following provisions:
(i) In the case of a participation, such Lender shall remain the
"Lender" for all purposes under the Loan Documents (including without
limitation any votes, elections or other decisions of the Lenders
hereunder) and shall remain fully liable for its obligations
hereunder, and Agent shall continue to deal directly and solely with
such Lender under the Loan Documents and shall have no duty or
obligation to deal with any participant in any manner (including
without limitation, delivery of information or distribution of any
funds to any participant).
(ii) Borrowers and Agent shall have given their prior written
consent for such assignment or participation; provided that Borrowers'
consent shall not be unreasonably withheld or delayed, and shall not
be required during the continuance of a Default.
(iii) Any such assignment or participation must be to an
Eligible Assignee and in an amount equal to or in excess of Three
Million and No/100 Dollars ($3,000,000.00).
<PAGE>
(c) In addition to the conditions and requirements set forth in
Section 10.10(b), any assignment by any Lender shall be subject to the
----------------
following conditions:
(i) Each assignment shall be of a constant, and not a varying,
percentage of all of the assigning Lender's rights and obligations
under this Agreement.
(ii) The parties to any assignment shall execute and deliver to
the Agent, for recording in the Register (as hereinafter defined),
with a copy there of to Borrowers, an Assignment and Acceptance,
substantially in the form of Exhibit D hereto (an "Assignment and
--------- --------------
Acceptance"), together with any of the Notes subject to such
----------
assignment.
Upon execution of an Assignment and Acceptance, delivery by the
transferor Lender of an executed copy thereof to Borrowers and Agent
(together with notice that payment of the purchase price, as hereinafter
provided, shall have been made), and payment by such purchaser to such
transferor Lender of an amount equal to the purchase price agreed between
such transferor Lender and such purchaser, acceptance and recording, from
and after the effective date specified in such Assignment and Acceptance
(which effective date shall be at least five Business Days after the
execution thereof), (A) the assignee thereunder shall be a party to this
Agreement as a "Lender" hereunder and, to the extent provided in such
Assignment and Acceptance, shall have the rights and obligations of a
Lender hereunder, and (B) the assigning Lender shall, to the extent
provided in such assignment and upon payment to the Agent of the
registration fee referred to in Section 10.10(e), be released from its
----------------
obligations under this Agreement, except for any obligations which by their
nature should survive any such assignment.
(d) By executing and delivering an Assignment and Acceptance, the
parties to the assignment thereunder confirm to and agree with each other
and the other parties hereto as follows: (i) other than the representation
and warranty that it is the legal and beneficial owner of the claim, the
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement, the other Loan Documents or any other instrument
or document furnished pursuant hereto; (ii) the assigning Lender makes no
representation or warranty and assumes no responsibility with respect to
the financial condition of any Borrower or any other Person primarily or
secondarily liable in respect of any of the Obligations, or the performance
or observance by any Borrower or any other Person primarily or secondarily
liable in respect of any of the Obligations or any of their Loan Documents
or any other instrument or document furnished pursuant hereto or thereto;
(iii) such assignee confirms that it has received a copy of this Agreement,
together with copies of the most recent financial statements delivered to
Lenders by each Borrower and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance; (iv) such assignee will, independently
and without reliance upon the assigning Lender, the Agent or any other
Lender and based on such documents
<PAGE>
and information as it shall deem appropriate at the time, continue to make
its own credit decisions in taking or not taking action under this
Agreement; (v) such assignee represents and warrants that it is an Eligible
Assignee;(vi) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under this
Agreement and the other Loan Documents as are delegated to the Agent by the
terms hereof or thereof, together with such powers as are reasonably
incidental thereto; (vii) such assignee agrees that it will perform in
accordance with their terms all of the obligations that by the terms of
this Agreement and the other Loan Documents are required to be performed by
it as a Lender; and (viii) such assignee represents and warrants that it is
legally authorized to enter into such Assignment and Acceptance.
(e) Agent shall maintain a copy of each Assignment and Acceptance
delivered to it and a register or similar list (the "Register") for the
--------
recordation of the names and addresses of the Lenders and the Loan
Percentages of, and principal amount of the Credit Facility owing to the
Lenders from time to time. The entries in the Register shall be
conclusive, in the absence of manifest error, and Borrowers, the Agent and
the Lenders may treat each Person whose name is recorded in the Register as
a Lender hereunder for all purposes of this Agreement. The Register shall
be available for inspection by Borrowers and the Lenders at any reasonable
time and from time to time upon reasonable prior notice. Upon each such
recordation, the assigning Lender agrees to pay to the Agent a registration
fee in the sum of $3,500.00.
(f) Upon its receipt of an Assignment and Acceptance executed by the
parties to such assignment, together with each Note subject to such
assignment, the Agent shall (i) record the information contained therein in
the Register, and (ii) give prompt notice thereof to Borrowers and the
Lenders (other than the assigning Lender), and Schedule I shall
----------
automatically be deemed revised to reflect the name, address, Loan Amount
and Loan Percentage of the new Lender and the deletion of or changed
information for the assigning Lender, and Agent shall deliver to Borrowers
and the Lenders, upon request by Borrowers or any Lender, an amended
Schedule I reflecting such changes. Within five (5) Business Days after
----------
receipt of such notice, Borrowers, at the Lenders' expense, shall execute
and deliver to the Agent, in exchange for each surrendered Note, a new Note
payable to the order of such Eligible Assignee in an amount equal to the
amount assigned to such Eligible Assignee pursuant to such Assignment and
Acceptance and, if the assigning Lender has retained some portion of its
obligations hereunder, a new Note payable to the order of the assigning
Lender in an amount equal to the amount retained by it hereunder. Such new
Notes shall provide that they are replacements for the surrendered Notes,
shall be in an aggregate principal amount equal to the aggregate principal
amount of the surrendered Notes, shall be dated the effective date of such
Assignment and Acceptance and shall otherwise be in substantially the form
of the assigned Notes. The surrendered Notes shall be cancelled and
returned to any Borrower.
(g) Any Lender may at any time pledge all or any portion of its
interest and rights under this Agreement (including all or any portion of
its Note) to any of the twelve Federal Reserve Banks organized under (S)4
of the Federal Reserve Act, 12 U.S.C.
<PAGE>
(S)1341. No such pledge or the enforcement thereof shall release the
pledgor Lender from its obligations hereunder or under any of the other
Loan Documents.
(h) Notwithstanding anything to the contrary contained herein, a
Lender may not sell or participate any of its interests for a purchase
price which, directly or indirectly, reflects a discount from face value
(i.e., the aggregate outstanding principal portion of the Credit Facility
to be sold or participated plus accrued and unpaid interest thereon),
without first offering such sale or participation at such discounted price
to the other Lenders on a pro rata basis, in which event such other Lenders
shall have thirty (30) days in which to elect whether to purchase the
interest to be sold.
Section 10.11. Senior Debt; Borrower Subordination. The indebtedness of
-----------------------------------
Borrowers hereunder and under the Notes and all of the Obligations is intended
to be and shall be senior to any subordinated indebtedness of Borrowers secured
by a Lien on any portion of the Collateral (the foregoing shall not in any way
imply Lenders' consent to any such subordinate debt which is not otherwise
permitted by this Agreement). The Notes and any other amounts advanced to or on
behalf of Borrowers or any other Person pursuant to the terms of this Agreement
or any other Loan Document, shall never be in a position subordinate to any Debt
of Borrowers owing to any other Person, except with the knowledge and written
consent of Lenders.
Section 10.12. Revolving Loan. Borrowers warrant and represent to Lenders,
--------------
and to all other holders of any debt evidenced by the Notes that the Advances
are and shall be for business, commercial, investment, or other similar purpose
and not primarily for personal, family, household, or agricultural use.
Borrowers and Lenders hereby agree that, except for Section 15.10(b) thereof,
the provisions of Art. 5069-15.01 et seq. of the Revised Civil Statues of Texas,
1925, as amended (regulating certain revolving credit loans and revolving
triparty accounts) shall not govern or in any manner apply to the Notes, the
Letters of Credit or the other Loan Documents.
Section 10.13. Construction. The parties hereto acknowledge and agree that
------------
neither this Agreement nor any other Loan Document shall be construed more
favorably in favor of one than the other based upon which party drafted the
same, it being acknowledged that all parties hereto contributed substantially to
the negotiations and preparation of this Agreement and the other Loan Documents.
Section 10.14. APPLICABLE LAW. THIS AGREEMENT, THE NOTES AND ALL THE LOAN
--------------
DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF TEXAS, EXCEPT TO THE EXTENT THAT THE LAWS OF ANOTHER JURISDICTION
GOVERN THE CREATION, PERFECTION OR ENFORCEMENT OF INTERESTS, OR THE REMEDIES,
RELATED TO ANY PART OF BORROWER'S ASSETS OR TO THE EXTENT THAT UNITED STATES
FEDERAL LAW APPLIES PURSUANT TO SECTION 10.8 OR OTHERWISE.
------------
Section 10.15. ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE
-----------
PARTIES HERETO INCLUDING BUT NOT LIMITED TO THOSE ARISING
<PAGE>
OUT OF OR RELATING TO THIS AGREEMENT OR ANY RELATED NOTES 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 OR 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 SHALL CONTROL. JUDGMENT UPON
ANY ARBITRATION AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY
PARTY TO THE 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
BORROWER'S DOMICILE AT THE TIME OF THE 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 AN
ADDITIONAL 60 DAYS.
(B) RESERVATION OF RIGHTS. NOTHING IN THIS AGREEMENT SHALL BE DEEMED TO
(1) 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 LENDERS OF THE PROTECTION AFFORDED TO IT BY 12. U.S.C. (S)91 OR ANY
SUBSTANTIALLY EQUIVALENT STATE LAW; OR (III) LIMIT THE RIGHT OF THE LENDERS
HERETO (A) TO EXERCISE SELF HELP REMEDIES SUCH AS (BUT NOT LIMITED TO) SETOFF,
OR (B) TO FORECLOSURE 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 LENDERS MAY EXERCISE SUCH SELF HELP RIGHTS, FORECLOSURE 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. NEITHER THE 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
SUCH ACTION, TO ARBITRATE THE MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING
RESORT TO SUCH REMEDIES.
<PAGE>
Section 10.16. JURY TRIAL WAIVER. BORROWERS AND LENDERS EACH HEREBY WAIVE
-----------------
ANY RIGHT TO A JURY TRIAL WITH RESPECT TO ANY MATTER ARISING OR RELATING TO THIS
AGREEMENT, THE NOTES OR THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
Section 10.17. Counterparts. This Agreement and all amendments hereto, and
------------
all the other Loan Documents may be executed in any number of original
counterparts, each of which when so executed and delivered shall be an original,
and all of which, collectively, shall constitute one and the same agreement, it
being understood and agreed that the signature pages may be detached from one or
more counterparts and combined with the signature pages from any other
counterpart in order that one or more fully executed originals may be assembled.
Section 10.18. Inconsistent Provisions. In the event of any conflict or
-----------------------
inconsistency between the terms of this Agreement and the terms of the other
Loan Documents, the terms of this Agreement shall control.
Section 10.19. Confidentiality. The Agent and the Lenders will maintain
---------------
the confidentiality of any non-public information relating to any of the
Borrowers which have been identified in writing as confidential on the
information itself or otherwise (the "Confidential Information") and, except as
------------------------
provided below, will exercise the same degree of care that each of the Agent and
the Lenders exercise with respect to its own proprietary information to prevent
the unauthorized disclosure of the Confidential Information to third parties.
Confidential Information shall not include information that either: (a) is in
the public domain including, without limitation, information contained in any
annual report, or any Form 10-K, Form 10-Q or Form 8-K reports which have been
delivered to the SEC or any other annual or quarterly reports to stockholders
subject to the reporting requirements of the Exchange Act, as amended, proxy
material delivered to stockholders or any report delivered to the SEC, or in the
knowledge or possession of the Agent or the Lenders when disclosed to the Agent
or the Lenders, or becomes part of the public domain after disclosure to the
Agent or the Lenders through no fault of the Agent or such Lenders; or (b) is
disclosed to the Agent or the Lenders by a third party, provided that the Agent
or the Lenders do not have actual knowledge that such third party is prohibited
from disclosing such information. The terms of this section shall not apply to
disclosure of Confidential Information by the Agent or the Lenders that is in
their good faith opinion, compelled by laws, regulations, rules, orders or legal
process or proceedings or as disclosed to: (i) any party, including a
prospective participant or assignee, who has signed a confidentiality agreement
containing terms substantially similar to those contained herein; (ii) legal
counsel, examiners, auditors and directors of the Agent or the Lenders and
examiners, auditors and investigators having regulatory authority over the Agent
or the Lenders; or (iii) any party in connection with the exercise of remedies
by the Agent or the Lenders after the occurrence of an Event of Default.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers effective as of the date
first written above.
BORROWERS:
---------
TRAVIS BOATS & MOTORS, INC., a Texas corporation,
TRAVIS SNOWDEN MARINE, INC., A Texas corporation,
TRAVIS BOATING CENTER ARLINGTON, INC., a Texas
corporation, FALCON MARINE, INC., a Texas corporation,
FALCON MARINE ABILENE, INC., a Texas corporation,
TRAVIS BOATING CENTER BEAUMONT, INC., a Texas
corporation, TRAVIS BOATING CENTER TENNESSEE, INC., a
Texas corporation, TRAVIS BOATING CENTER ALABAMA, INC.,
a Texas corporation, TRAVIS BOATING CENTER GEORGIA,
INC., a Texas corporation and TRAVIS BOATING CENTER
FLORIDA, INC., a Texas corporation
By: /s/ Mark T. Walton
-----------------------------------------
Name: Mark T. Walton
Title: President
TRAVIS BOATS & MOTORS BATON ROUGE, INC., a Louisiana
corporation and TRAVIS BOATING CENTER LOUISIANA, INC.,
a Louisiana corporation
By: /s/ Mark T. Walton
------------------------------------------
Name: Mark T. Walton
Title: President
TBC ARKANSAS, INC., an Arkansas corporation, RED RIVER
MARINE ARKANSAS, INC., a Arkansas corporation and
TRAVIS BOATING CENTER LITTLE ROCK, INC., a Arkansas
corporation
By: /s/ Mark T. Walton
------------------------------------------
Name: Mark T. Walton
Title: President
TBC MANAGEMENT, INC., a Delaware corporation
By: /s/ Mark T. Walton
-------------------------------------------
Name: Mark T. Walton
Title: President
<PAGE>
TBC MANAGEMENT, LTD., a Texas limited partnership
By: TRAVIS BOATS & MOTORS, INC., a Texas
corporation, as General Partner
By: /s/ Mark T. Walton
--------------------------------------
Name: Mark T. Walton
Title: President
AGENT:
-----
NATIONSBANK OF TEXAS, N.A.,
a national banking association,
as Agent for Lenders
By: /s/ R. Mark Bearfield
-------------------------------------------
Name: R. Mark Bearfield
Title: Vice President
LENDERS:
-------
NATIONSBANK OF TEXAS, N.A.,
a national banking association
By: /s/ R. Mark Bearfield
-------------------------------------------
Name: R. Mark Bearfield
Title: Vice President
HIBERNIA NATIONAL BANK,
a national banking association
By: /s/ Wade Carwile
-------------------------------------------
Name: Wade Carwile
Title: Assistant Vice President
<PAGE>
EXHIBIT A
---------
REVOLVING NOTE
$____________ San Antonio, Texas December __, 1996
FOR VALUE RECEIVED, TRAVIS BOATS & MOTORS, INC., a Texas corporation,
TRAVIS SNOWDEN MARINE, INC., a Texas corporation, TRAVIS BOATING CENTER
ARLINGTON, INC., a Texas corporation, FALCON MARINE, INC., a Texas corporation,
FALCON MARINE ABILENE, INC., a Texas corporation, TRAVIS BOATING CENTER
BEAUMONT, INC., a Texas corporation, TRAVIS BOATS & MOTORS BATON ROUGE, INC., a
Louisiana corporation, TBC ARKANSAS, INC., an Arkansas corporation, TBC
MANAGEMENT, Ltd., a Texas limited partnership, TBC MANAGEMENT, INC., a Delaware
corporation, TRAVIS BOATING CENTER LOUISIANA, INC., a Louisiana corporation,
TRAVIS BOATING CENTER TENNESSEE, INC., a Texas corporation, TRAVIS BOATING
CENTER ALABAMA, INC., a Texas corporation, RED RIVER MARINE ARKANSAS, INC., an
Arkansas corporation, TRAVIS BOATING CENTER LITTLE ROCK, INC., an Arkansas
corporation, TRAVIS BOATING CENTER GEORGIA, INC., a Texas corporation and TRAVIS
BOATING CENTER FLORIDA, INC., a Texas corporation (collectively "Borrowers"),
---------
hereby, jointly and severally, promise to pay to the order of
____________________________, a national banking association ("Lender"), at the
------
offices of NationsBank of Texas, N.A., a national banking association (the
"Agent") at 300 Convent Street, San Antonio, Texas 78205, the principal sum of
- ------
___________________ Million and No/100 Dollars ($_______________) (or the unpaid
balance of all principal advanced against this Note, if that amount is less), on
or before the Termination Date for this Note (as established by the Agreement),
in lawful money of the United States of America, together with interest on the
unpaid principal balance of this Note from day to day outstanding, in accordance
with the terms and provisions of the Agreement; provided, however, that in no
event shall interest accrue hereunder at a rate in excess of the Maximum Lawful
Rate. Subject to the provisions hereof limiting interest to the Maximum Lawful
Rate, interest on Advances shall be computed based on the number of days elapsed
and 360-days per year or in the case of interest accruing at the Maximum Lawful
Rate, 365/366 days per year. Advances of the principal indebtedness evidenced
by this Note shall be made pursuant to the Credit Agreement (as herein defined),
which amounts may be borrowed, repaid and reborrowed as provided in and subject
to the terms of the Credit Agreement. Each Advance made by Lender to Borrowers
pursuant to the Credit Agreement may be recorded by lender and, with respect to
any transfer hereof, endorsed on the grid attached hereto which is part of this
Note. Any failure by Lender to endorse the grid attached hereto shall not
impair the obligation of Borrowers to pay any amount due and owing hereunder.
All capitalized terms used herein, but not specifically defined, shall have
the same meanings set forth in the Agreement.
Principal and all accrued interest hereunder shall be due and payable upon
the terms and on the dates provided for in the Credit Agreement.
<PAGE>
After maturity of this Note or the occurrence of an Event of Default, the
outstanding principal balance of this Note shall, at the option of the Required
Lenders, bear interest at the Default Rate, as provided in the Agreement.
If at any time the Applicable Rate shall be limited to the Maximum Lawful
Rate, any subsequent reductions in the Applicable Rate shall not reduce the rate
of interest on this Note below the Maximum Lawful Rate until the total amount of
interest accrued equals the amount of interest which would have accrued if the
Applicable Rate had at all times been in effect. In the event that at maturity
(stated or by acceleration), or at the final payment of the Credit Facility, the
total amount of interest paid or accrued on the Credit Facility is less than the
amount of interest which would have accrued if the Applicable Rate had at all
times been in effect with respect thereto, then at such time, to the extent
permitted by law, Borrowers shall pay to Agent, for the ratable benefit of the
Lenders, an amount equal to the difference between (a) the lesser of the amount
of interest which would have accrued if the Applicable Rate had at all times
been in effect and the amount of interest which would have accrued if the
Maximum Lawful Rate had at all times been in effect, and (b) the amount of
interest actually paid on the Credit Facility.
This Note has been executed and delivered pursuant to the terms of that
certain Revolving Credit Agreement (as the same may be modified, amended,
supplemented, extended or restated from time to time, the "Credit Agreement")
----------------
dated as of December ___, 1996, executed by and among Borrowers, Agent and the
Lenders (which includes the payee of this Note) and is one of the notes defined
therein as a "Note", the terms and provisions of the Credit Agreement related to
----
this Note being incorporated herein by reference for all purposes. The terms of
the Credit Agreement shall govern in the case of any inconsistency between such
terms and the terms hereof.
This Note is secured by the Security Agreement and all the other Loan
Documents, and all liens and security interests created or evidenced thereby.
Any holder shall be entitled to all benefits and remedies and security set forth
in the Credit Agreement and all the other Loan Documents.
The occurrence of a Default or an Event of Default, under and as defined in
the Credit Agreement, shall constitute, respectively, a Default or an Event of
Default under this Note, and the unpaid principal of and accrued interest on
this Note may be declared due and payable in the manner and with the effect
provided in the Credit Agreement.
Each Borrower and all sureties, endorsers, guarantors and any other party
now or hereafter liable for the payment of this Note in whole or in part, hereby
severally (i) waive demand, presentment for payment, notice of dishonor and of
nonpayment, protest, notice of protest, notice of intent to accelerate, notice
of acceleration and all other notice (except only for any notice that is
specifically required by the terms of the Credit Agreement or any other Loan
Document), filing of suit and diligence in collecting this Note or enforcing any
of the security herefor; (ii) agree to any substitution, subordination, exchange
or release of any such security or the release of any party primarily or
secondarily liable hereon; (iii) agree that the holder hereof shall not be
required first to institute suit or exhaust its remedies against any Borrower or
others liable or to become liable hereon or to enforce its rights against them
or any security herefor; (iv) consent to any extension or postponement of time
of payment of this Note for any
<PAGE>
period or periods of time and to any partial payments, before or after maturity,
and to any other indulgences with respect hereto, without notice thereof to any
of them; and (v) submit (and waive all rights to object) to personal
jurisdiction in the State of Texas, and venue in Bexar County, Texas, for the
enforcement of any and all obligations under the Loan Documents.
If any holder of this Note retains an attorney in connection with any
default or at maturity or to collect, enforce or defend this Note or any other
Loan Document in any lawsuit or in any probate, reorganization, bankruptcy or
other proceeding, or if any Borrower sues any holder of this Note in connection
with this Note or any other Loan Document and does not prevail, then Borrowers
agree to pay to each such holder, in addition to principal and interest, all
costs and expenses incurred by such holder in trying to collect this Note or in
any such suit or proceeding, including reasonable attorneys' fees as and to the
extent provided in the Credit Agreement.
Notwithstanding anything herein or in any other Loan Documents, expressed
or implied, to the contrary, in no event shall any interest rate charged
hereunder or under any of the other Loan Documents, or any interest contracted
for, collected or received by Lender or any holder hereof, exceed the Maximum
Lawful Rate. It is expressly stipulated and agreed to be the intent of
Borrowers and Lender at all times to comply with the applicable law governing
the maximum rate or amount of interest payable on or in connection with this
Note. If the applicable law is ever judicially interpreted so as to render
usurious any amount called for under this Note or under any of the other Loan
Documents, or contracted for, charged, taken, reserved or received with respect
to this Note, or if acceleration of the maturity of this Note, any prepayment by
Borrowers, or any other circumstance whatsoever, results in Lender having been
paid any interest in excess of that permitted by applicable law, then it is the
express intent of Borrowers and Lender that all excess amounts theretofore
collected by Lender be credited on the principal balance of this Note (or, if
this Note has been or would thereby be paid in full, refunded to Borrowers), and
the provisions of this Note and the other applicable Loan Documents immediately
be deemed reformed and the amounts thereafter collectible hereunder and
thereunder reduced, without the necessity of the execution of any new document,
so as to comply with the applicable law, but so as to permit the recovery of the
fullest amount otherwise called for hereunder and thereunder. The right to
accelerate the maturity of this Note does not include the right to accelerate
any interest which has not otherwise accrued on the date of such acceleration,
and Lender does not intend to collect any unearned interest in the event of
acceleration. All sums paid or agreed to be paid to Lender for the use,
forbearance or detention of the indebtedness evidenced hereby or by any other
Loan Document shall, to the extent permitted by applicable law, be amortized,
prorated, allocated and spread throughout the full term of such indebtedness
until payment in full so that the rate or amount of interest on account of such
indebtedness does not exceed the Maximum Lawful Rate. The term "applicable law"
--------------
as used herein shall mean the laws of the State of Texas, or any applicable
United States federal law to the extent that it permits Lender to contract for,
charge, take, reserve or receive a greater amount of interest than under Texas
law. The provisions of this paragraph shall control all agreements between
Borrowers and Lender.
Borrowers acknowledge and agree that the holder of this Note may, at any
time and from time to time, assign all or a portion of its interest in the
Credit Facility or transfer to an Eligible Assignee a participation interest in
the Credit Facility, subject to and in accordance with the terms and conditions
of the Credit Agreement, including Section 10.10 thereof.
-------------
<PAGE>
ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES HERETO
INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING TO THIS NOTE OR
ANY RELATED NOTES 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
OR 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
SHALL CONTROL. JUDGMENT UPON ANY ARBITRATION AWARD MAY BE ENTERED IN ANY COURT
HAVING JURISDICTION. ANY PARTY TO THE NOTE MAY BRING AN ACTION, INCLUDING A
SUMMARY OR EXPEDITED PROCEEDING, TO COMPEL ARBITRATION OF ANY CONTROVERSY OR
CLAIM TO WHICH THIS NOTE APPLIES IN ANY COURT HAVING JURISDICTION OVER SUCH
ACTION.
(A) SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN THE CITY OF
BORROWER'S DOMICILE AT THE TIME OF THE NOTE'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 AN
ADDITIONAL 60 DAYS.
(B) RESERVATION OF RIGHTS. NOTHING IN THIS NOTE SHALL BE DEEMED TO (1)
LIMIT THE APPLICABILITY OF ANY OTHERWISE APPLICABLE STATUTES OF LIMITATION OR
REPOSE AND ANY WAIVERS CONTAINED IN THIS NOTE; OR (II) BE A WAIVER BY THE LENDER
OF THE PROTECTION AFFORDED TO IT BY 12. U.S.C. (S)91 OR ANY SUBSTANTIALLY
EQUIVALENT STATE LAW; OR (III) LIMIT THE RIGHT OF THE LENDER HERETO (A) TO
EXERCISE SELF HELP REMEDIES SUCH AS (BUT NOT LIMITED TO) SETOFF, OR (B) TO
FORECLOSURE 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
LENDER MAY EXERCISE SUCH SELF HELP RIGHTS, FORECLOSURE UPON SUCH PROPERTY, OR
OBTAIN SUCH PROVISIONAL OR ANCILLARY REMEDIES BEFORE, DURING OR AFTER THE
PENDENCY OF ANY ARBITRATION PROCEEDING BROUGHT PURSUANT TO THIS NOTE. NEITHER
THE 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 SUCH ACTION, TO
ARBITRATE THE MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH
REMEDIES.
<PAGE>
THIS NOTE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED
BY TEXAS LAW, EXCEPT TO THE EXTENT THAT THE LAWS OF ANOTHER JURISDICTION GOVERN
THE CREATION, PERFECTION OR ENFORCEMENT OF INTERESTS, OR THE REMEDIES RELATED TO
ANY PART OF THE COLLATERAL, OR TO THE EXTENT THAT UNITED STATES FEDERAL LAW
APPLIES PURSUANT TO SECTION 10.8 OF THE Credit Agreement OR OTHERWISE.
------------
IN WITNESS WHEREOF, Borrower has duly executed this Note as of the date
first above written.
BORROWERS:
---------
TRAVIS BOATS & MOTORS, INC., a Texas corporation,
TRAVIS SNOWDEN MARINE, INC., A Texas corporation,
TRAVIS BOATING CENTER ARLINGTON, INC., a Texas
corporation, FALCON MARINE, INC., a Texas corporation,
FALCON MARINE ABILENE, INC., a Texas corporation,
TRAVIS BOATING CENTER BEAUMONT, INC., a Texas
corporation, TRAVIS BOATING CENTER TENNESSEE, INC., a
Texas corporation, TRAVIS BOATING CENTER ALABAMA, INC.,
a Texas corporation, TRAVIS BOATING CENTER GEORGIA,
INC., a Texas corporation and TRAVIS BOATING CENTER
FLORIDA, INC., a Texas corporation
By: ________________________________
Name: ________________________________
Title: ________________________________
<PAGE>
TRAVIS BOATS & MOTORS BATON ROUGE, INC., a Louisiana
corporation and TRAVIS BOATING CENTER LOUISIANA, INC.,
a Louisiana corporation
By: ________________________________
Name: ________________________________
Title: ________________________________
TBC ARKANSAS, INC., an Arkansas corporation, RED RIVER
MARINE ARKANSAS, INC., a Arkansas corporation and
TRAVIS BOATING CENTER LITTLE ROCK, INC., a Arkansas
corporation
By: ________________________________
Name: ________________________________
Title: ________________________________
TBC MANAGEMENT, INC., a Delaware corporation
By: ________________________________
Name: ________________________________
Title: ________________________________
TBC MANAGEMENT, LTD., a Texas limited partnership
By: TRAVIS BOATS & MOTORS, INC., a Texas
corporation, as General Partner
By: ____________________________
Name: ____________________________
Title: ____________________________
<PAGE>
EXHIBIT B
---------
BORROWING BASE CERTIFICATE
In accordance with the terms of the Revolving Credit Agreement dated
December ___, 1996 (the "Agreement"), executed by Borrowers, NationsBank of
Texas, N.A., as Agent, and the Lenders, as therein defined, the undersigned
hereby certifies, in his/her capacity as the Authorized Officer of TBM, that
attached hereto is a current Borrowing Base Schedule and the information set
forth therein is true and correct in all material respects to the best of my
knowledge. Unless defined herein or indicated otherwise, each capitalized term
used herein and in the attached Borrowing Base Schedule shall have the meaning
given to such term in the Agreement.
IN WITNESS WHEREOF, I have executed this Certificate as of the ______ day
of _________________, 19___.
TRAVIS BOATS & MOTORS, INC.
By:_____________________________
Name:___________________________
Title:__________________________
<PAGE>
BORROWING BASE SCHEDULE
-----------------------
The Borrowing Base as of the date hereof is $_____________. The Borrowing
Base is determined as follows:
I. Total Eligible Inventory of Borrowers,
per the attached Eligible Inventory Report $____________
A. Eligible Inventory of Borrowers purchased by Borrowers
(or, in the case of Eligible Inventory acquired by
Borrowers in an acquisition of an additional retail
store, purchased by the previous retail store owner)
within the previous twelve-month period $____________
B. Eligible Inventory of Borrowers purchased by Borrowers
(or, in the case of Eligible Inventory acquired by
Borrowers in an acquisition of an additional retail
store, purchased by the previous retail store owner)
within the previous twelve-month period immediately
preceding the twelve-month period described in A above $____________
C. 80% of Item I.A. (or 90% of Item I.A. for the months
of October, November, December, January, February
and March) $____________
D. 70% of Item I.B. (not to exceed the lesser of (i) 15%
of Item I. above or (ii) $3,500,000.00) $____________
E. Borrowing Base from Eligible Inventory
(sum of Item I.C. & I.D.) $____________
II. Total Eligible Accessories of Borrowers,
per the attached Eligible Accessories Report $____________
A. Borrowing Base from Eligible Accessories (50% of
Item II.) $____________
III. Total Eligible Contract Discounts of Borrowers,
per the attached Eligible Contract Discount Report $____________
A. Eligible Contract Discounts which have been outstanding
less than one hundred and twenty (120) days at the date
of invoice for Contract Debtors which settle on a
quarterly basis $____________
B. Eligible Contract Discounts for Contract Debtors which
settle on an annual basis $____________
<PAGE>
Borrowing Base Schedule (continued)
C. 50% of Item III.A. $____________
D. 25% of Item III.B. $____________
E. Borrowing Base from Eligible Contract Discounts
(sum of Item III.C. & III.D.) (not to exceed
$500,000.00) $____________
IV. Total Borrowing Base (sum of I.E., II.A. and III.E.) $____________
V. Total of outstanding balances of Working Capital Advances
and Letter of Credit Exposure as of the date of the report $____________
<PAGE>
EXHIBIT B-1
-----------
FORM OF REQUEST FOR ADVANCE
This Request for Advance is being delivered by Travis Boats & Motors, Inc.,
a Texas corporation ("TBM"), for and on behalf of the "Borrowers" as defined in
---
that certain Revolving Credit Agreement (the "Agreement"), dated as of December
---------
___, 1996, executed by Borrowers, NationsBank of Texas, N.A., as Agent, and the
Lenders, as therein defined. Unless defined herein or indicated otherwise, each
capitalized term used herein and in the attached Schedule I shall have the
meaning given to such term in the Agreement.
1. Borrowers hereby request a Working Capital Advance in an amount equal
to $____________ to be made on _____________, 19__. Borrowers represent and
warrant to Lenders that the Working Capital Advance herein requested does not
exceed the amount which Borrowers are entitled to receive pursuant to Section
2.1 (or any other provisions) of the Credit Agreement.
2. Borrowers request that $___________ of the Working Capital Advance
requested hereby be transferred to [specify account to be credited/other
------------------------------------
transfer directions] and $_____________ be transferred to [specify account to be
- ------------------- ---------------------
credited/other transfer directions].
- ----------------------------------
3. Borrowers hereby certify, represent and warrant to Lenders that:
(a) This Request for Advance has been duly authorized by all necessary
action on the part of Borrowers.
(b) The representations and warranties contained in the Agreement and
the other Loan Documents remain true and correct on and as of the date
hereof (except to the extent any representation or warranty is made as of a
particular date) with the same force and effect as though made on the date
hereof.
(c) No Default or Event of Default has occurred and is continuing, and
the making of the Working Capital Advance requested hereby shall not
constitute a Default or Event of Default.
(d) Each Borrower has performed and complied with all agreements and
conditions in the Agreement and the other Loan Documents required to be
performed or complied with by such Borrower on or prior to the date hereof,
and each of the conditions precedent contained in the Agreement applicable
to the Working Capital Advance requested hereby has been satisfied.
(e) The proceeds of the Working Capital Advance herein requested will
not be used in violation of any provision of the Agreement or any other
Loan Document.
6. Borrowers acknowledge and agree that the making of the Working Capital
Advance requested hereby shall not constitute a waiver of any condition
precedent to the obligation of Lenders to make further Advances or arrange for
the issuance of Letters of Credit.
<PAGE>
7. Attached hereto as Schedule I is a true and correct copy of the current
Borrowing Base Schedule.
EXECUTED as of ____________, 19__.
AUTHORIZED BORROWING OFFICER:
----------------------------
TRAVIS BOATS & MOTORS, INC.,
a Texas corporation
By:___________________________
Name:_________________________
Title:________________________
<PAGE>
EXHIBIT C
---------
SUPPLEMENTAL CREDIT AND SECURITY AGREEMENT
This Supplemental Credit and Security Agreement (this "Supplement") is
----------
being executed as of the ____ day of ___________________, ____, pursuant to that
certain Revolving Credit Agreement (as amended and modified from time to time,
the "Credit Agreement"), dated as of December ___, 1996, by and among Travis
----------------
Boats & Motors, Inc., a Texas corporation, and the other entities named therein
as "Borrowers" ("Borrowers"), NationsBank of Texas, N.A. ("Agent"), as agent for
--------- -----
itself and the other lenders named therein, and such other lenders
(collectively, the "Lenders"). All terms used but not defined herein shall have
-------
the meanings set forth in the Credit Agreement.
WHEREAS, Borrowers have entered into the Credit Agreement for the purpose
of obtaining Advances and/or Letters of Credit in accordance with and pursuant
to the terms and conditions of the Credit Agreement; and
WHEREAS, to further evidence the Obligations of Borrowers under the Credit
Agreement, Borrowers have executed the Notes respectively in favor of the
Lenders; and
WHEREAS, to secure the Obligations of Borrowers under the Credit Agreement,
the Notes and the other Loan Documents, Borrowers granted to Agent, for the
benefit of Lenders, a first priority security interest in the Collateral
pursuant to that certain Security Agreement (so called herein), of even date
with the Credit Agreement, by and among the Borrowers and the Agent for the
benefit of the Lenders; and
WHEREAS, each of the undersigned additional borrowers (collectively, the
"Additional Borrower") is a Subsidiary of a Borrower and has been formed or
- --------------------
acquired by such Borrower since the date of the Credit Agreement; and
WHEREAS, in order to obtain Advances or Letters of Credit from time to time
under the Credit Agreement, in furtherance of the direct and indirect benefits
to be obtained by the Additional Borrower as a Subsidiary, and pursuant to the
provisions and conditions of the Credit Agreement, Additional Borrower desires
to become a Borrower under the Credit Agreement and a Debtor under the Security
Agreement; and
WHEREAS, the failure of Additional Borrower to enter into this Supplement
would constitute an Event of Default.
NOW, THEREFORE, for and in consideration of the premises and mutual
promises herein contained, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged and confessed, the
undersigned parties hereby agree as follows:
1. From and after the effective date of this Supplement, the Additional
Borrower shall be and become (a) a "Borrower" under and pursuant to the terms of
the Credit Agreement, the Notes and the other Loan Documents to which the
Borrowers are a party, and (b) a "Debtor" under and pursuant to the terms of the
Security Agreement. As such, the Additional Borrower,
<PAGE>
jointly and severally with all the Borrowers, agrees to pay when due all of the
Obligations now or hereafter existing and to be bound by all of the terms and
provisions of the Credit Agreement (including, without limitation, Sections 3.14
-------------
and 3.15 thereof), the Notes, the Security Agreement and the other Loan
----
Documents, to the same extent as if the Additional Borrower were an original
party thereto.
2. Agent and Lenders hereby acknowledge and agree that from and after the
effective date of this Supplement, the Additional Borrower shall be entitled to
all of the rights and benefits of a "Borrower" under the Credit Agreement and
the other Loan Documents to which the Borrowers are a party, including, without
limitation, the right to obtain Working Capital Advances, Draft Advances and
Letters of Credit pursuant to the terms and conditions of the Credit Agreement
and the other Loan Documents.
3. All of the Loan Documents, including without limitation, the Security
Agreement, are hereby modified and amended to include the Additional Borrower as
a "Borrower," "Debtor," or any other defined term used for the Borrowers
thereunder to the same extent as the other Borrowers are parties thereto,
without any further action being taken or further documents required to be
executed by any party. Schedule I to the Credit Agreement is hereby modified to
include the Additional Borrower as a Borrower, with the address for notices to
the Additional Borrower being as set forth in Schedule I attached hereto.
----------
Notwithstanding the foregoing, each Additional Borrower hereby agrees to execute
and deliver to Agent on or before the date hereof, unless a longer period of
time is set forth below, any and all other documents and agreements reasonably
requested by Agent to further evidence the agreements contained in this
Supplement, including, without limitation, any and all financing statements in
order to perfect or evidence Lenders' security interest in the Collateral, the
opinion of counsel referenced in Paragraph 4 below, and such intercreditor
agreements, promissory notes, assignments, resolutions, corporate or partnership
documentation, certificates of good standing and other certificates or
information concerning Additional Borrower.
4. Contemporaneously with the execution hereof, each Additional Borrower
shall deliver to Agent all authority documents required under Sections 6.1(h)
---------------
and 4.1 of the Credit Agreement and represents and warrants to Agent and Lenders
---
that (a) it is a limited partnership or corporation, as applicable, duly
created, presently existing and in good standing under the laws of the state
under which it is organized, (b) it has all limited partnership or corporate, as
applicable, powers and all governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted and as contemplated
to be conducted, except where the failure to have any such item would not have a
material adverse effect on the Additional Borrower's business and financial
condition, (c) the execution, delivery and performance of this Supplement and
any other documents executed in connection herewith have been duly authorized by
all necessary partnership or corporate action, as applicable, require no action
by or in respect of, or filing with, any governmental body, agency or office and
do not contravene, or constitute a default under, any provision of applicable
law or regulations or of the limited partnership agreement, certificate of
incorporation or bylaws, as applicable, of the Additional Borrower or any other
agreement binding on the Additional Borrower, (d) this Supplement, and as a
result of the execution hereof, the Notes, the Security Agreement and the other
Loan Documents to which the Borrowers are a party each constitute a valid and
binding agreement of the Additional Borrower, which is a party thereto,
enforceable in accordance with the terms thereof except as the enforceability
thereof may be limited by (i) bankruptcy, insolvency, fraudulent transfer or
<PAGE>
similar laws affecting creditor rights generally, and (ii) the availability of
equitable principles of general applicability, and (e) each Additional Borrower
(i) is executing this Supplement for its direct or indirect benefit, (ii) has
reviewed and is satisfied with the rights of contribution or subrogation to
which it may be entitled with respect to all other Borrowers (and such other
Borrower's ability to perform thereon), and (iii) has determined that entering
into the Credit Agreement and the other Loan Documents enables it to obtain
substantial benefits which it would not otherwise have using solely its own
financial abilities to obtain credit.
5. This Supplement shall be binding upon, and inure to the benefit of, the
parties hereto and their successors and assigns, subject to any provisions under
the Credit Agreement.
Effective for all purposes as of _____________, __________.
ADDITIONAL BORROWERS:
--------------------
By: ____________________________
Name: __________________________
Title: _________________________
EXISTING BORROWERS:
------------------
--------------------------------
By: ____________________________
Name: __________________________
Title: _________________________
AGENT:
-----
NATIONSBANK OF TEXAS, N.A.,
a national banking association, as
Agent for itself and the other Lenders
By: ____________________________
Name: __________________________
Title: _________________________
<PAGE>
SCHEDULE I
----------
Additional Borrower's
<TABLE>
<CAPTION>
Locations of Storage and
Additional Borrower Chief Executive Office Address for Notice Places of Business Distribution Facilities
- ------------------- ---------------------- ------------------ ------------------ ---------------------------
<S> <C> <C> <C> <C>
</TABLE>
<PAGE>
EXHIBIT D
---------
FORM OF ASSIGNMENT AND ACCEPTANCE
Dated as of ____________, 19__
Reference is made to that certain Revolving Credit Agreement dated as of
December ___, 1996 (as amended and in effect from time to time, the
"Agreement"), executed by Borrowers, NationsBank of Texas, N.A., for itself and
---------
as Agent, and the Lenders, as therein defined. Unless defined herein or
indicated otherwise, each capitalized term used herein and in the attached
Schedule I shall have the meaning given to such term in the Agreement.
[Name of Assigning Lender] (the "Assignor") and [Name of Assignee] (the
--------
"Assignee") hereby agree as follows:
- ---------
1. The Assignor hereby sells and assigns to the Assignee and the Assignee
hereby purchases and assumes from the Assignor, a _________ percent (___%)
interest in all of the Assignor's rights and obligations under the Agreement as
of the Assignment Date (as defined in paragraph 4 below), including, without
limitation, the Assignor's interest in all unpaid interest and fees accrued as
of the Assignment Date.
2. (a) The Assignor (i) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (ii) represents that as
of the date hereof, before giving effect to the assignment contemplated hereby,
its Loan Amount is $___________; (iii) makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Loan Documents or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of any Loan Document or any other instrument or document furnished pursuant
thereto, other than that it is the legal and beneficial owner of the interest
being assigned by it hereunder and that such interest is free and clear of any
adverse claim; (iv) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrowers or the
performance or observance by the Borrowers of its obligations under the other
Loan Documents to which it is a party or any other instrument or document
delivered or executed pursuant thereto; and (v) attaches to the copy hereof
forwarded to the Agent the Note held by it.
(b) The Assignor requests that the Agent exchange its Note for new Note(s)
executed by the Borrowers and payable to each of the Assignor and the Assignee
as follows:
Notes Payable to
the Order of: Amount of Note
---------------- --------------
[Assignor] $_____________
[Assignee] $_____________
<PAGE>
3. The Assignee (a) represents and warrants that it is legally authorized
to enter into this Assignment and Acceptance and that it is an Eligible
Assignee; (b) confirms that it has received a copy of the Loan Documents,
together with copies of such financial statements of Borrowers and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance; (c) agrees
that it will, independently and without reliance upon the Assignor, any other
Lender, or the Agent and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Loan Documents; (d) appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers as are reasonably incidental thereto pursuant to the terms of the
Loan Documents; (e) agrees that it will perform in accordance with their terms
all the obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender; and (f) agrees not to disclose any financial
information of the Borrowers as and to the extent provided in the Agreement.
4. The effective date for this Assignment and Acceptance shall be
______________, 19__ (the "Assignment Date"), determined in accordance with
---------------
Section 10.8 of the Agreement. Following the execution of this Assignment and
- ------------
Acceptance, each party hereto and each Person consenting hereto shall deliver
its duly executed counterpart hereof to the Agent for acceptance and recording
in the Register by the Agent.
5. Upon such acceptance and recording, from and after the Assignment
Date, (i) the Assignee shall be a party to the Agreement and, to the extent
provided in this Assignment and Acceptance, have the rights and obligations of a
Lender thereunder, and (ii) the Assignor shall, with respect to that portion of
its interest under the Agreement assigned hereunder, relinquish its rights and
be released from its obligations under the Agreement, subject to Section 10.10
-------------
of the Agreement.
6. Upon such acceptance and recording, from and after the Assignment
Date, the Agent shall make all payments in respect of the rights and interests
assigned hereby (including payments of principal, interest, fees and other
amounts) to the Assignee. On the Assignment Date, the Assignee will pay to the
Agent for the pro rata account of the Assignor an amount equal to the percentage
--- ----
of the Assignor's interest assigned to the Assignee hereunder, times the
aggregate Loan Amount of the Assignor.
7. THIS ASSIGNMENT AND ACCEPTANCE IS INTENDED TO BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS (WITHOUT REFERENCE
TO CONFLICT OF LAWS).
8. This Assignment and Acceptance may be executed in any number of
counterparts which shall together constitute but one and the same agreement.
9. The Assignee hereby acknowledges and consents to comply with the
confidentiality provision in Section 10.18 of the Agreement.
-------------
<PAGE>
IN WITNESS WHEREOF, intending to be legally bound, each of the undersigned
has caused this Assignment and Acceptance to be executed on its behalf by its
officer thereunto duly authorized, as of the date first above written.
[ASSIGNOR]
By:________________________________
Title:
[ASSIGNEE]
By:________________________________
Title:
CONSENTED TO:
- ------------
NATIONSBANK OF TEXAS, N.A., as Agent
By:___________________________
Title:
<PAGE>
EXHIBIT E
---------
FORM OF LOC APPLICATION
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
NationsBank Application and Agreement
for Standby Letter of Credit
- ---------------------------------------------------------------------------------------------------
Letter of Credit Department Letter of Credit Number Date
Please issue an Irrevocable Letter (For NationsBank use only)
of Credit in favor of the Beneficiary
substantially as shown below and deliver
the Credit by
[_] Regular Mail [_] Courier [_] Teletransmission
- ---------------------------------------------------------------------------------------------------
Applicant (Full name and mailing address) Beneficiary (full name and mailing
address; if courier delivery
is requested full street
address must be provided)
For Account of (if different from Applicant)
- ---------------------------------------------------------------------------------------------------
Advising Bank (if left blank, NationsBank will Amount (in figures and words)
choose as appropriate)
Currency (if left blank,
U.S. dollars will
apply)
------------------------------------------
Expiry Date (draft must be presented to
drawee or for negotiation (when negotiable)
on or before):
- ---------------------------------------------------------------------------------------------------
Available by draft(s) at Sight drawn, at NationsBank's option, on NationsBank or NationsBank's
correspondent when accompanied by the following document(s): (Please check the documents and fill
in the blanks below as applicable)
[_] A written statement purportedly signed by (if left blank the Beneficiary)
----------------------
with the following wording
Quote
----------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
Close Quote
- ---------------------------------------------------------------------------------------
[_] Other:
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
[_] Issue Credit as per attached exhibit marked exhibit (exhibit is an
------------------------
integral part of the Agreement).
</TABLE>
<PAGE>
Note: If the Credit provides for automatic renewal without amendment, Applicant
agrees that it will notify NationsBank in writing at least sixty (60) days prior
to the last day specified in the Credit by which NationsBank must give notice of
nonrenewal as to whether or not it wishes the Credit to be renewed. Any
decision to renew or not renew the Credit shall be in NationsBank's sole
discretion. Applicant hereby acknowledges that in the event NationsBank
notifies the Beneficiary of the Credit that it has elected not to renew the
Credit, the Credit may be drawn on if permitted by the terms of the Credit and
further acknowledges and agrees that Applicant shall have no claim or cause of
action against NationsBank or defense against payment under the Agreement for
NationsBank's renewal or non-renewal of the Credit in the exercise of
NationsBank's discretion as set forth above.
Multiple Drawings [_] Prohibited (permitted if left blank)
- --------------------------------------------------------------------------------
Special Instructions to NationsBank Not to be included in the Credit (if any):
- --------------------------------------------------------------------------------
The terms and conditions set out above and below, and any attached exhibits,
supplements or schedules referred to in this Application, have been reviewed by
Applicant, and by Applicant's signature below and for good and valuable
consideration. Applicant agrees to the same and to be obligated and liable
under the Agreement. In the event this Application requests an Account Party
different from Applicant, then such party may sign below as Co-Applicant, but
the failure of such Account Party to become a Co-applicant shall not affect the
obligations of Applicant under the Agreement.
Completion and submittal of this application by Applicant does not obligate
NationsBank to enter into the Agreement or issue the requested Credit.
NOTICE OF FINAL AGREEMENT. THIS WRITTEN AGREEMENT REPRESENTS 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.
- -------------------------------------- ----------------------------------------
Name of Company, or signature if Name of Company, or signature if
Applicant is an individual Co-Applicant is an individual
By By
------------------------------------ --------------------------------------
Authorized Signature/Title Authorized Signature/Title
- -------------------------------------- ----------------------------------------
Address Address
- -------------------------------------- ----------------------------------------
- -------------------------------------- ----------------------------------------
- -------------------------------------- ----------------------------------------
Telephone Fax Telephone Fax
- --------------- ---------------------- --------------- ------------------------
Date Federal Tax ID Number Date Federal Tax ID Number
- --------------------------------------------------------------------------------
Bank Use Only
- --------------------------------------------------------------------------------
Approving Bank Officer - Approving Bank Officer - Officer Number
Signature Printed
- --------------------------------------------------------------------------------
Officer - Title Officer - Interoffice Address Cost Center Number
- --------------------------------------------------------------------------------
Officer Phone Number Purpose Code Officer Fax Number
(area code and number) (area code and number)
- --------------------------------------------------------------------------------
Page 2
<PAGE>
1. Definitions
In the Agreement:
(1) "Agreement" means the Application, the terms and conditions set out above
and below, and the Credit, together with any and all modifications, amendments
and extensions of any thereof.
(2) "Applicable Interest Rate" means, unless otherwise defined in and governed
by a separate agreement between NationsBank and Applicant, the lesser of the
maximum lawful rate permitted by applicable law or a per annum rate (calculated
on the basis of a 360 day year) equal to the sum of the prime rate of interest
established by NationsBank from time to time (which is not necessarily the
lowest or best rate of interest charged by NationsBank to any of its customers)
plus three percent.
(3) "Applicant" means singularly or collectively, and, if more than one, jointly
and severally, each person or entity who has executed the Application as
Applicant or Co-Applicant.
(4) "Application" means the foregoing application of Applicant relating to the
Credit as such application may be amended or modified from time to time in
accordance herewith.
(5) "Credit" or "Letter of Credit" means the letter of credit issued pursuant to
the Application as it may be amended or modified from time to time in accordance
herewith.
(6) "Instrument" means the Credit or any draft, receipt, acceptance or written
demand (to include teletransmissions) for payment under the Credit.
(7) "NationsBank" means the banking subsidiary of NationsBank Corporation that
issues the Credit in the sole discretion of NationsBank.
(8) "property" means goods and any and all documents related thereto,
securities, funds, choses in action, and any and all other forms of property,
whether real, personal or mixed and any right or interest therein.
2. Promise to Pay.
(a) As to instruments drawn under or purporting to be drawn under the Credit,
which are payable in United States currency: (i) in the case of each sight
instrument, Applicant will reimburse NationsBank, at the address specified by
NationsBank to Applicant, on demand, in United States currency, the amount paid
thereon, or, if so demanded by NationsBank, will pay to NationsBank in advance
the amount required to pay the same; and (ii) in the case of each time
instrument, Applicant will pay to NationsBank, at the address specified by
NationsBank to Applicant, in United States currency, the amount thereof, on
demand but in any event not later than one business day prior to maturity of
such time instrument at the place specified by the Credit for payment.
(b) As to instruments drawn under or purporting to be drawn under the Credit,
which are payable in currency other than United States currency: (i) in the case
of a sight instrument. Applicant will reimburse NationsBank, at the address
specified by NationsBank to Applicant, on demand, in United States currency, the
equivalent of the amount paid under the instrument (together will all taxes,
levies, imposts, duties, charges and fees of any nature imposed by any
government or other taxing authority including interest and penalties in
connection therewith (collectively "F/X Taxes") at NationsBank's selling rate of
exchange at the time of payment under the instrument, for teletransmission to
the place of payment in the currency in which such instrument is payable, or, if
so demanded by NationsBank will pay to NationsBank in advance, in United States
currency, the equivalent of the amount required to pay the same; and (ii) in the
case of each time instrument, Applicant pay to NationsBank at the address
specified by NationsBank to Applicant, on demand, but in any event sufficiently
in advance of maturity of such time instrument enable NationsBank to arrange for
cover to reach the place of payment not later than three business days prior to
maturity, the equivalent of the time instrument together with all F/X taxes in
United States currency at NationsBank's selling rate of exchange at the time of
provision of cover, for teletransmission to the place of payment in the currency
in which such instrument is payable. If for any cause whatsoever there exists at
the time in question no rate of exchange generally current for affecting
transfers as above described, or such currency is not available for purchase by
NationsBank, Applicant agrees to pay NationsBank on demand at NationsBank's
election, (i) an amount in United States currency equivalent to the actual cost
of NationsBank of settlement of NationsBank's obligation to the holder of the
instrument or other person, together with all F/X taxes however, and whenever
such settlement shall be made by NationsBank or (ii) an amount in United States
currency equivalent to the estimated cost to NationsBank, as projected by
NationsBank, of the future settlement of NationsBank's obligation to the holder
of the instrument or other person, together with all F/X taxes provided that
upon the actual settlement of NationsBank's obligation, however and whenever
occurring, NationsBank shall reimburse Applicant or Applicant shall pay to
NationsBank, as the case may be, an amount in United States currency equal to
the difference between the initial estimated payment by Applicant to NationsBank
and the actual settlement amount paid by NationsBank.
(c) NationsBank may accept or pay any instrument presented to it, regardless of
when drawn and whether or not negotiated, if such instrument, the other required
documents and any transmittal advice are dated on or before the expiration date
of the Credit, and NationsBank may honor, as complying with the terms of the
Credit and of the Agreement, any instruments or other documents otherwise in
order signed or issued by any person who is, or is in good faith believed by
NationsBank to be, an administrator, executor, trustee in bankruptcy, debtor in
possession, conservator, assignee for the benefit of creditors, liquidator,
receiver other legal representative or successor by operation of law of the
party authorized under the Credit to draw or issue such instruments or other
documents.
3. Promise to Pay Interest and Fees.
(a) Applicant will pay NationsBank, on demand: (i) NationsBank's commission at
the rate set forth in a separate written agreement between NationsBank and
Applicant or, in the absence of a separate agreement, at such rule as
NationsBank may determine to be proper, (ii) unless actually paid or reimbursed
to NationsBank by Beneficiary or another person or entity, all charges and
expenses paid or incurred by NationsBank in connection with the Credit,
including without limitation, reasonable attorneys fees for the enforcement of
any rights hereunder and any charges of other banks not paid for by the
Beneficiary or another party, and (iii) interest on any amounts due by Applicant
to NationsBank hereunder from the date due to the date of payment at the
Applicable Interest Rate.
(b) No provisions of the Agreement shall require the payment or permit the
collection of interest in excess of the maximum rate permitted by applicable
law.
4. Clean Advances.
If the Application requests inclusion in the Credit of any provision for clean
advances to the Beneficiary, NationsBank may place in the credit such a
provision in that respect as NationsBank may deem appropriate under which any
bank entitled to negotiate drafts under the Credit, acting in its discretion in
each instance and upon the receipt of a request in writing from the Beneficiary,
may make one or more clean advances at any time on a prior to the date by which
drafts are to be negotiated under the Credit. The aggregate of such advances
shall in no event be more than the amount specified in the Application for clean
advances, and whether or not specified therein in no event shall any such
advance exceed the amount remaining available under the Credit at the time of
the advance. While it is expected by Applicant that each such advance will be
repaid by the Beneficiary to the bank that made the advance from the proceeds of
any drafts drawn under the Credit, should any such advance not be thus repaid,
Applicant will on demand pay NationsBank the amount thereof as if such advances
was evidenced by drafts drawn under the Credit. It is understood and neither
NationsBank nor any bank which may make such advances shall be obligated to
inquire into the use that may be made thereof by the Beneficiary and that
NationsBank and each such bank shall be without liability for any wrongful use
that may be made by the Beneficiary of any funds so advanced.
5. Uniform Customs and Practice.
The Uniform Customs and Practice for Documentary Credits, as published as of the
date of issue of the Credit by the International Chamber of Commerce (the
"UCP"), shall in all respects be deemed a part hereof as fully as if
incorporated herein and shall apply to the credit. Unless expressly provided
otherwise in the Credit, in the event any provision of the UCP is or is
construed to vary from or be in conflict with the laws of the United States of
America or any state
<PAGE>
thereof, as from time to time amended and in force, the UCP shall prevail,
provided, however, that this Section shall not be interpreted to require
Nationsbank to take any action or fail to take action if such would cause
NationsBank to violate applicable law or regulation.
6. Licenses and Compliance.
Applicant will procure promptly any necessary licenses for the services
performed or the import, export or shipping of property shipped under or
pursuant or in connection with the Credit, and will comply with all foreign and
domestic laws, rules and regulations now or hereafter applicable to the
transaction related to the Credit or applicable to the execution, delivery and
performance by Applicant of the Agreement. Applicant further agrees to furnish
to NationsBank such evidence in respect of the above as NationsBank may at any
time require.
7. Insurance.
Applicant shall keep such property as may be the subject of the Credit
adequately covered by insurance in amounts, against risks and with companies
satisfactory to NationsBank Applicant hereby irrevocably grants its power of
attorney to NationsBank and any of its officers, with the power of substitution,
to endorse any check in the name of Applicant received in payment of any loss or
adjustment covered by such insurance.
8. Default
(a) In the event of the happening of any one or more of the following events any
such event being hereinafter called an "Event of Default"), namely: (i) the
nonpayment of any obligation of Applicant to NationsBank (under the Agreement or
otherwise, or to any other person or entity, now or hereafter existing, when
due, or (ii) the failure of Applicant to perform or observe any other term or
covenant of the Agreement, or (iii) the dissolution or termination of existence
of Applicant or (iv) the institution by or against Applicant of any proceeding
seeking to adjudicate Applicant a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief, or
composition of Applicant or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry of any
order for relief of the appointment of a receiver, trustee, custodian. or other
similar official for Applicant or for any substantial part of its property, or
(v) any seizure, vesting or intervention by or under authority of a government
by which the management of Applicant is displaced or its authority in the
control of its business is curtailed, or (vi) the attachment of or restraint as
to any substantial funds or other property which may be in, or come into, the
possession or control of NationsBank, or of any third party acting on
NationsBank's behalf, for the account or benefit of Applicant, or the issuance
of any order of court or other legal process against the same, or (vii) the
occurrence of any of the above events with respect to any person or entity which
has guaranteed, or signed a comfort letter, support agreement or similar
document with respect to, any obligations of Applicant to NationsBank (under the
Agreement or otherwise), or (viii) any representation, warranty, certification
or statement made or submitted by the Applicant to NationsBank shall be false,
misleading or incorrect in any material respect when made or deemed made; or
(ix) any person or entity which has guaranteed, or signed a comfort letter,
support agreement or similar document with respect to, any obligations of
Applicant to NationsBank (under this Agreement or otherwise) shall default under
the terms of, or deny the validity, binding effect or enforceability of, such
guarantee, comfort letter, support agreement or similar document; then, or at
any time after the happening of such event, the amount of the Credit, as well as
any and all other obligations of Applicant under the Agreement, shall, at
NationsBank's option, and whether or not otherwise then due and payable become
due and payable immediately without demand upon or notice to Applicant.
(b) Upon the occurrence and during the continuance of any Event of Default,
NationsBank is hereby authorized to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by NationsBank or any subsidiary or
affiliate of NationsBank to or for the credit or the account of Applicant
against any and all of Applicant's obligations to NationsBank under the
Agreement, whether or not NationsBank shall have made any demand under the
Agreement and although such deposits, indebtedness or obligations may be
unmatured or contingent. NationsBank's rights under this Section 8(b) are in
addition to other rights and remedies (including, without limitation, other
rights of set-off which NationsBank may have.
9. Security.
(a) As collateral for the payment of any and all obligations of Applicant to
NationsBank under the Agreement, Applicant hereby grants to NationsBank a
security interest in (i) any and all documents of title, policies or
certificates of insurance and other documents accompanying or related to
instruments drawn under the Credit, and any and all other property shipped under
or in connection with the Credit or in any way related thereto or to any of the
instruments drawn thereunder (whether or not such documents or property are
released to or upon the order of Applicant in trust or otherwise) and (ii) any
and all proceeds and products of the foregoing. Also to secure the payment of
any and all obligations of Applicant under the Agreement, NationsBank shall be
subrogated to the rights of Applicant in respect of any transaction to which the
Credit relates. Insofar as any property which may be held by NationsBank or for
NationsBank's account as collateral hereunder may be released to or upon the
order of Applicant, Applicant hereby acknowledges that such delivery of property
is in trust pending satisfaction of Applicant's obligations to NationsBank
under the agreement, and hereby agrees to execute and/or file such receipts,
agreements, forms or other documents as NationsBank may request to further
evidence NationsBank interests in such property, it being understood that
NationsBank's rights as specified therein shall be in furtherance of and in
addition to (but not in limitation of) NationsBank's rights hereunder. If at any
time and from time to time NationsBank in good faith deems itself insecure and
requires collateral (or additional collateral), Applicant will, on demand,
assign and deliver to NationsBank as security for any and all obligations of
Applicant under the Agreement, collateral of a type and value satisfactory to
NationsBank or make such cash payment as NationsBank may require. NationsBank is
hereby authorized, at its option at any time and with or without notice to
Applicant, to transfer to or register in its name or the name of any
Nationsbank's nominees all or any part of the property subject to any of the
security interest granted under or contemplated by the Agreement. NationsBank is
also authorized, at its option, to file financing statements without the
signature of Applicant with respect to all or any part of such property.
Applicant will pay the cost of any such filing and, upon the request of
NationsBank, sign such instruments, documents or other papers, and take such
other action, as NationsBank may reasonably require to perfect such security
interests.
(b) If any Event of Default shall have occurred and be continuing NationsBank
may exercise in respect of the property subject to any of the security interests
granted under or contemplated by the Agreement all the rights and remedies of a
secured party on default under the applicable Uniform Commercial Code or any
other applicable law, and also may, without notice except as specified below,
sell such property or any part thereof in one or more parcels at public or
private sale, at any NationsBank office or elsewhere, for cash, or credit or for
future delivery, and upon such other terms as NationsBank may deem commercially
reasonable. To the extent notice of sale of such property shall be required by
law, reasonable notification shall be satisfied by written notice mailed or
delivered to Applicant at the address specified above at least five business
days prior to the date of public sale or prior to the date after which private
sale is to be made. Applicant will pay to NationsBank on demand all costs and
expenses (including, without limitation, reasonable attorney's fees and legal
expenses) related or incidental to the custody preservation or sale of, or
collection from, or other realization upon any of such property or related or
incidental to the establishment, preservation or enforcement, of the rights of
NationsBank in respect of any such property. In the event of sale of, collection
from, or other realization upon all or any part of such property. NationsBank
may, in its discretion, hold the proceeds thereof to as additional collateral
hereunder or then or at any time thereafter apply the proceeds thereof to the
payment of such of the costs and expenses referred to above and such of the
obligations of Applicant under the Agreement, whether or not then due, as
NationsBank may determine in its discretion, any surplus to be paid over to
Applicant or to whomever may be lawfully entitled to receive such surplus.
10. Indemnity.
Applicant will indemnify and hold NationsBank (such term to include for purposes
of this paragraph its affiliates and its and its affiliates' officers,
directors, employees and agents) harmless from and against (i) all loss or
damage arising out of the issuance of, or any other action taken by any such
indemnified party in connection with, the Credit other than loss or damage
resulting from the gross negligence or willful misconduct of the party seeking
indemnification, and (ii) all costs and expenses (including reasonable
attorney's fees and legal expenses) of all claims or legal proceedings arising
out of NationsBank's issuance of the Credit or incident to the collection of
amounts owed by Applicant hereunder or the enforcement of the rights of
NationsBank hereunder, including without limitation, legal proceedings related
to any court order, injunction, or other process or decree restraining or
seeking to restrain NationsBank from paying any amount under the Credit.
Additionally, Applicant will indemnify and hold NationsBank harmless from and
against all claims, losses, damages, suits, costs or expenses arising out of
Applicant's failure to timely procure licenses or comply with applicable laws,
regulations or rules, or any other conduct or failure of Applicant relating to
or affecting the Credit.
<PAGE>
11. Effect of Waivers.
No delay, extension of time, renewal, compromise or other indulgence which may
occur or be granted by NationsBank shall impair the rights or powers of
NationsBank hereunder. NationsBank shall not be deemed to have waived any of its
rights hereunder, unless NationsBank or its authorized agent shall have signed
such waiver in writing.
12. Agency.
If Applicant is a financial institution (the "Financial Institution") and is
requesting the issuance of the Credit for its customer (the "Customer"), the
Financial Institution hereby irrevocably appoints NationsBank as its agent and
attorney-in-fact to issue the Credit in accordance with, and subject to, the
Agreement. The Financial Institution shall pay NationsBank all amounts owed by
the Customer under the Agreement when due, whether or not the Financial
Institution has received payment from the Customer and shall pay to NationsBank
its fees and expenses according to its fee schedule from time to time in effect.
The Financial Institution hereby grants to NationsBank a security interest in
all of the property in which the Customer has heretofore granted or m???
hereafter grant to the Financial Institution a security interest to secure the
obligations of the Customer under the Agreement.
13. Miscellaneous.
(a) Any notice from NationsBank to Applicant shall be deemed given when mailed,
postage paid, or when delivered to a courier, fee paid by shipper, address to
Applicant at the last business address furnished by Applicant to NationsBank, or
when confirmed by electronic confirmation to NationsBank as having been
delivered via facsimile or other teletransmission. Any notice from Applicant to
NationsBank shall be sent to the address of NationsBank specified by
NationsBank to Applicant and shall be effective upon receipt by NationsBank.
(b) Each provision of the Agreement shall be interpreted in such manner as to be
effective and valid under applicable law but if any provision of the Agreement
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of the
Agreement.
(c) If any law, treaty, regulation or the interpretation thereof by any court or
administrative or governmental authority shall impose, modify or deem applicable
any capital, reserve, insurance premium or similar requirement against letters
of credit issued by NationsBank and the result thereof shall be to increase the
cost to NationsBank of making any payment under or issuing or maintaining the
Credit or to reduce the yield to NationsBank in connection with the Credit or
the Agreement, then, on demand, Applicant will pay to NationsBank, from time to
time, such additional amounts as NationsBank may in good faith determine to be
necessary to compensate NationsBank for such increased cost or reduced yield.
(d) Any and all payments made to NationsBank hereunder shall be made free and
clear of and without deduction for any present or future taxes, levies, imposts,
deductions, charges, or withholdings, and all liabilities with respect thereto,
excluding taxes imposed on net income and all income and franchise taxes of the
United States and any political subdivisions thereof (such nonexcluded taxes
being herein called "Taxes"). If Applicant shall be required by law to deduct
any Taxes from or in respect of any sum payable hereunder, (i) the sum payable
shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 13(d)). NationsBank shall receive an amount equal to the sum
NationsBank would have received had no such deductions been made, (ii) Applicant
shall make such deductions, and (iii) Applicant shall pay the full amount
deducted to the relevant authority in accordance with applicable law. Applicant
will indemnify NationsBank for the full amount of Taxes (including without
limitation, any Taxes imposed by any jurisdiction on amounts payable under this
Section 13(d)) paid by NationsBank and any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto, whether or not
such Taxes were correctly or legally asserted. This indemnification shall be
made within 30 days from the date NationsBank makes written demand therefor.
Within 30 days after the date of any payment of Taxes, Applicant will furnish to
NationsBank the original or a certified copy of a receipt evidencing payment
thereof.
(e) The Agreement shall be binding upon Applicant, its successors and assigns,
and shall inure to the benefit of NationsBank, its successors, transferees and
assigns; provided that any assignment by Applicant of any of its rights or
obligations under the Agreement without the prior written consent of NationsBank
shall be void.
(f) Applicant hereby authorizes NationsBank, in NationsBank's discretion, to set
forth the terms of the Application in the Credit in such language as NationsBank
deems appropriate, with variations not materially inconsistent with the
Application.
(g) Any action, inaction, waiver or omission taken or suffered by NationsBank or
by any of its correspondents under or in connection with the Credit or any
related instruments, services or property. If in good faith and in conformity
with foreign or domestic laws, regulations or customs applicable thereto, shall
be binding upon Applicant and shall not place NationsBank or any of its
correspondents under any resulting liability to Applicant. Without limiting the
generality of the foregoing. NationsBank and its correspondents may act in
reliance upon any written, oral, telephonic, telegraphic, facsimile or other
requests or notice, believed in good faith to have been authorized, whether or
not given or signed by an authorized person.
(h) In the event of any change or modification, with the consent of Applicant,
relative to the Credit or any instrument called for thereunder, including any
waiver made or in good faith believed by NationsBank to have been made by
Applicant of any term hereof or the noncompliance of any such instruments with
the terms of the Credit, the Agreement shall be binding upon Applicant with
regard to the Credit as so changed or modified, and to any action taken by
NationsBank or any of its correspondents relative thereto. No term or provision
of the Agreement can be changed orally, and no executory agreement shall be
effective to modify or to discharge the Agreement unless such executory
agreement is in writing and signed by NationsBank.
14. Jurisdiction and Waiver.
Applicant hereby irrevocably submits to the non-exclusive jurisdiction of any
State or Federal court sitting in the city, county, or district in which the
principal office of NationsBank is located over any action or proceeding arising
out of or relating to the Agreement, and Applicant hereby irrevocably agrees
that all claims in respect to such action or proceeding may be heard and
determined in such State or Federal court. Applicant hereby irrevocably waives
to the fullest extent it may effectively do so, the defense of an inconvenient
forum to the maintenance of such action or proceeding and the lack of personal
jurisdiction,. To the fullest extent it may lawfully and effectively do so, each
of Applicant and NationsBank waives the right to trial by jury. Applicant
irrevocably consents to the service of any and all process in any such action or
proceeding by the mailing of copies of such process to Applicant at the last
business address furnished by Applicant to NationsBank. Applicant agrees that a
final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing, however, in this Section 14, shall affect the right of
NationsBank to serve legal process in any other manner permitted by law or
affect the right of NationsBank to bring any action or proceeding against
Applicant or its property in the courts of any other jurisdiction. Moreover, to
the extent that Applicant has or hereafter may acquire any immunity from
jurisdiction of any court or from any legal process (whether through service or
notice, attachment prior to judgment, attachment in aid of execution or
otherwise) with respect to itself or its property. Applicant hereby irrevocably
waives such immunity in respect of its obligations under the Agreement.
15. Automatic Payment
[_] Applicant has elected to authorize NationsBank to effect payment of sums due
by Applicant under the Agreement by means of debiting Applicant's account
number . This authorization shall not affect the
obligation of Applicant to pay such sums when due, without notice, if there are
insufficient funds in such accounts to make such payment in full when due, or if
NationsBank fails to debit the account.
<PAGE>
EXHIBIT F
---------
FORM OF COMPLIANCE CERTIFICATE
This Compliance Certificate is delivered pursuant to Section 6.1(d) of that
certain Revolving Credit Agreement dated as of December ___, 1996 (as amended
and in effect from time to time, the "Agreement"), executed by Borrowers,
---------
NationsBank of Texas, N.A., as Agent, and the Lenders, as therein defined.
Unless defined herein or indicated otherwise, each capitalized term used herein
(and in any attachments) shall have the meaning given to such term in the
Agreement.
The undersigned, being the duly elected, qualified and acting Chief
Financial Officer of TBM, a Texas corporation ("TBM"), on behalf of the
---
Borrowers and solely in his capacity as an officer of TBM, hereby certifies and
warrants that: (i) he is an Authorized Officer (as defined in the Agreement) and
(ii) he is authorized to execute this Certificate on behalf of TBM and the
Borrowers. This Certificate is submitted on a quarterly basis on or before the
forty-fifth (45th) day following the end of the Borrowers' fiscal quarter for
the period ended _________________, 19__. The undersigned hereby further
certifies to the following as of the date set forth below:
1. The representations and warranties of Borrowers under the Agreement
are true and complete in all material respects.
2. No event has occurred which constitutes a Default or Event of Default.
3. As of __________________, 19___ (being the last day of the Borrowers'
most recently ended fiscal quarter) the Borrowers, on a consolidated basis, are
in compliance with the financial covenants contained in Section 7.1, 7.2 and 7.3
------------------------
of the Agreement and the following information is true, accurate and complete as
of such date:
A. Pertinent Information
(a) Consolidated Funded Debt as of the end of the immediately
preceding calendar quarter is $___________.
(b) Consolidated Operating Cash Flow for the immediately
preceding four calendar quarters is $____________, as
computed on Attachment 1 hereto.
(c) Consolidated Income Available For Debt Service for the
immediately preceding four calendar quarter is
$____________, as computed on Attachment 2 hereto.
(d) Consolidated Debt Service for the immediately preceding four
calendar quarter is $____________, as computed on Attachment
3 hereto.
<PAGE>
B. Covenants
(a) Operating Leverage Ratio is ___ to 1.00 (not applicable for
any fiscal quarter ending December 31) (such ratio not
permitted to be less than 3.50 to 1.00).
(b) Consolidated Tangible Net Worth is $________________ (such
tangible net worth not permitted to be less than
$12,000,000.00).
(c) Debt Coverage Ratio is _____ to 1.00 (such ratio not
permitted to be less than 1.50 to 1.00).
4. I hereby certify, in my capacity as the Chief Financial Officer (or
other officer indicated below) of TBM, and on behalf of the Borrowers, that the
information set forth herein and on the attachments hereto is true and correct
in all material respects to the best of my knowledge and prepared in accordance
with GAAP.
5. I hereby certify that, to the best of my knowledge and belief, the
financial statements of the Borrowers being delivered herewith fairly reflect in
all material respects the financial condition of the Borrowers and the results
of the Borrowers' operations as of the date of delivery of such financial
statements.
IN WITNESS WHEREOF, I have executed this Certificate as of the ______ day
of _________________, 19___.
By:________________________________
Name:______________________________
Title:_____________________________
<PAGE>
ATTACHMENT 1
Period Ending: ___________, 19__
Consolidated Operating Cash Flow equals:
Consolidated Net Income $____________
minus
-----
(i) extraordinary gains or losses $____________
(ii) write-up or write-down of any assets $____________
plus
----
(i) Taxes $____________
(ii) Consolidated Interest Expense $____________
(iii) all amounts attributable to depreciation
and/or amortization of intangible and
other assets of Borrowing Group $____________
Consolidated Operating Cash Flow $____________
Each adjustment to Consolidated Net Income described above be made only to the
extent that such amounts have been deducted or added in determining Consolidated
Net Income for such period.
<PAGE>
ATTACHMENT 2
Period Ending: ___________, 19__
Consolidated Income Available For Debt Service:
Consolidated Net Income $____________
plus
----
(i) Consolidated Interest Expense $____________
(ii) Consolidated Lease Expense $____________
(iii) All non-cash charges each as
deducted in determining such
Consolidated Net Income $____________
less
----
(i) All non-cash additions each as
added in determining Consolidated
Net Income $____________
Consolidated Income Available For Debt Service $____________
<PAGE>
ATTACHMENT 3
Period Ending: ___________, 19__
Consolidated Debt Service:
(A) Consolidated Interest Expense $____________
plus
----
(B) Consolidated Lease Expense $____________
plus
----
(C) Consolidated Principal Reduction $____________
Consolidated Debt Service $____________
<PAGE>
SCHEDULE I
----------
PARTIES TO CREDIT AGREEMENT, NOTICE ADDRESSES
AND LENDER SCHEDULE
I. BORROWERS
---------
Travis Boats & Motors, Inc.
13045 Research Blvd.
Austin, Texas 78750
Attn: Mark T. Walton
Travis Snowden Marine, Inc.
13045 Research Blvd.
Austin, Texas 78750
Attn: Mark T. Walton
Travis Boating Center Arlington, Inc.
13045 Research Blvd.
Austin, Texas 78750
Attn: Mark T. Walton
Falcon Marine, Inc.
13045 Research Blvd.
Austin, Texas 78750
Attn: Mark T. Walton
Falcon Marine Abilene, Inc.
13045 Research Blvd.
Austin, Texas 78750
Attn: Mark T. Walton
Travis Boating Center Beaumont, Inc.
13045 Research Blvd.
Austin, Texas 78750
Attn: Mark T. Walton
Travis Boats & Motors Baton Rouge, Inc.
13045 Research Blvd.
Austin, Texas 78750
Attn: Mark T. Walton
TBC Arkansas, Inc.
13045 Research Blvd.
Austin, Texas 78750
Attn: Mark T. Walton
<PAGE>
I. BORROWERS (continued)
---------
TBC Management, Ltd.
13045 Research Blvd.
Austin, Texas 78750
Attn: Mark T. Walton
TBC Management, Inc.
1209 Orange Street
Wilmington, Delaware 19801-1134
Attn: Mark T. Walton
Travis Boating Center Louisiana, Inc.
13045 Research Blvd.
Austin, Texas 78750
Attn: Mark T. Walton
Travis Boating Center Tennessee, Inc.
13045 Research Blvd.
Austin, Texas 78750
Attn: Mark T. Walton
Travis Boating Center Alabama, Inc.
13045 Research Blvd.
Austin, Texas 78750
Attn: Mark T. Walton
Red River Marine Arkansas,Inc.
13045 Research Blvd.
Austin, Texas 78750
Attn: Mark T. Walton
Travis Boating Center Little Rock, Inc.
13045 Research Blvd.
Austin, Texas 78750
Attn: Mark T. Walton
Travis Boating Center Georgia, Inc.
13045 Research Blvd.
Austin, Texas 78750
Attn: Mark T. Walton
Travis Boating Center Florida, Inc.
13045 Research Blvd.
Austin, Texas 78750
Attn: Mark T. Walton
<PAGE>
II. AGENT AND LENDERS
-----------------
A. AGENT:
NationsBank of Texas, N.A.
300 Convent
San Antonio, Texas 78205
Attn: Mark Bearfield
B. LENDERS:
NationsBank of Texas, N.A.
Commercial Banking Group
300 Convent
San Antonio, Texas 78205
Attn: Mark Bearfield
Hibernia National Bank
440 Third Street
Baton Rouge, Louisiana 70802
Attn: Wade Carwile
III. LENDER SCHEDULE
---------------
<TABLE>
<CAPTION>
===============================================
Loan
Commitment Loan
Lender Amount Percentage
------ ------ ----------
-----------------------------------------------
<S> <C> <C>
NationsBank $9,000,000.00 60%
-----------------------------------------------
Hibernia $6,000,000.00 40%
===============================================
</TABLE>
<PAGE>
SCHEDULE II
-----------
OTHER LENDER OBLIGATIONS
<TABLE>
<CAPTION>
================================================================================
NATIONSBANK OF TEXAS, N.A.
- --------------------------------------------------------------------------------
Borrower/Guarantor Loan No. Commitment Outstanding Maturity/Repayment
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Travis Boats & 4963153 $540,300 $540,300 4/26/04
Motors, Inc.
- --------------------------------------------------------------------------------
Travis Boats & 4218244 $271,318 $271,318 2/28/04
Motors, Inc.
- --------------------------------------------------------------------------------
Travis Boating Center, 5105754 $ 25,000 $ 25,000 4/14/98
Arlington, Inc.
- --------------------------------------------------------------------------------
Travis Snowden 5207816 $641,278 $641,287 12/31/05
Marine, Inc.
- --------------------------------------------------------------------------------
Travis Boats & 5179205 $111,520 $111,520 5/31/04
Motors, Inc. et al
- --------------------------------------------------------------------------------
Travis Boating Center 5081245 $ 13,066 $ 13,066 2/9/00
Arlington, Inc.
- --------------------------------------------------------------------------------
Travis Boats & 5121504 $ 43,303 $ 43,303 5/17/99
Motors, Inc./Travis
Snowden
Marine/Travis Boating
Center/Beaumont
- --------------------------------------------------------------------------------
Travis Boats & 5234448 $119,438 $119,438 1/26/96
Motors, Inc. etal
===============================================================================
</TABLE>
<TABLE>
<CAPTION>
================================================================================
HIBERNIA NATIONAL BANK
- --------------------------------------------------------------------------------
Borrower/Guarantor Loan No. Commitment Outstanding Maturity/Repayment
----------
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Travis Boats & 9146962 $480,000 $452,392.38 7/14/02
Motors Baton Rouge,
Inc.
- --------------------------------------------------------------------------------
Travis Boats & 9146962 $ 70,000 $ 52,670.12 7/14/02
Motors Baton Rouge,
Inc.
- --------------------------------------------------------------------------------
Travis Boating 9147268 $100,000 $ 72,907.84 11/30/98
Center Louisiana,
Inc.
================================================================================
</TABLE>
<PAGE>
SCHEDULE III
------------
LIENS AS OF THE CLOSING DATE
See attached.
<PAGE>
EXISTING LIENS WITH
TRANSAMERICA COMMERCIAL FINANCE CORPORATION
AS SECURED PARTY
I. TRAVIS BOATS AND MOTORS (Tx. Secretary of State)
DEBTOR: Travis Boats and Motors, Inc. (San Antonio, Houston and Austin stores)
SECURED PARTY: Transamerica Commercial Finance Corporation
FINANCING STATEMENT #: 89-00073228
COLLATERAL DESCRIPTION: Inventory, Equipment, Accounts, etc. at 12300 IH10W,
San Antonio, Tx. 78230, 7530 North Freeway, Houston, Texas, and 9185 Research
Blvd., Austin, Tx.
DATE: 4/3/89
DEBTOR: Travis Boats and Motors, Inc.
9185 Research Blvd.
Austin, Texas
SECURED PARTY: Transamerica Commercial Finance Corp.
FINANCING STATEMENT #: 90-00259257
COLLATERAL DESCRIPTION: Inventory, Equipment, Accounts, etc.
DATE: 12/14/90
II. TRAVIS BOATS AND MOTORS BATON ROUGE, INC. (Louisiana Sec. of State)
DEBTOR: Travis Boats and Motors Baton Rouge, Inc.
SECURED PARTY: Transamerica Commercial Finance Corporation
FINANCING STATEMENT #: 17-1082387
COLLATERAL DESCRIPTION: Inventory, Accounts, Chattel paper, Documents, etc.
FILED IN: East Baton Rouge Parish, La.
DATE: 11/23/92
III. RED RIVER MARINE (Arkansas Sec. of State)
DEBTOR: Red River Marine, Inc.
2001 Hwy. 25 North
Route 2
Heber Springs, Arkansas 72543
SECURED PARTY: Borg-Warner Acceptance Corp. (changed to Transamerica Commercial
Finance Corporation by amendment 4/5/93)
FINANCING STATEMENT #: 128302
COLLATERAL DESCRIPTION: Inventory only
DATE: 4/5/73
1
<PAGE>
EXISTING LIENS (cont.)
DEBTOR: Red River Marine, Inc.
2001 Hwy. 25 North
Heber Springs, Arkansas 72543
SECURED PARTY: Transamerica Commercial Finance Corporation
FINANCING STATEMENT #: 713224
COLLATERAL DESCRIPTION: Inventory, Equipment, Accounts, etc.
DATE: 6/11/90
DEBTOR: Red River Marine, Inc. #2
3734 Albert Pike Hwy.
Hot Springs, Ark. 71903
SECURED PARTY: General Electric Capital Corporation assigned to Transamerica
Commercial Finance Corporation by amendment 10/5/92
FINANCING STATEMENT #: 768487
COLLATERAL DESCRIPTION: Inventory only
DATE: 9/16/91
DEBTOR: Red River Marine, Inc. #2
3734 Albert Pike Hwy.
Hot Springs, Arkansas
SECURED PARTY: General Electric Capital Corporation assigned to Transamerica
Commerical Finance Corporation by amendment 10/5/92
FINANCING STATEMENT #: 769586
COLLATERAL DESCRIPTION: Inventory, Equipment, Accounts, etc.
DATE: 9/24/91
IV. RED RIVER MARINE (Garland County)
DEBTOR: Red River Marine, Inc., #2
3734 Albert Pike Hwy.
Hot Springs, Ark. 71903
SECURED PARTY: Transamerica Commercial Finance Corporation
FINANCING STATEMENT #: 15166
COLLATERAL DESCRIPTION: Inventory, Equipment, Accounts, etc.
DATE: 10/29/96
V. RED RIVER MARINE (Cleburne County)
DEBTOR: Red River Marine, Inc.
2001 Hwy. 25 North
Heber Springs, Ark. 72543
SECURED PARTY: Transamerica Commercial Finance Corporation
FINANCING STATEMENT #: 90-450
COLLATERAL DESCRIPTION: All Inventory, Equipment, Accounts, etc.
DATE: 6/8/90
2
<PAGE>
EXISTING LIENS (cont.)
VI. TBC ARKANSAS, INC. (Arkansas Sec. of State)
DEBTOR: TBC Arkansas, Inc.
SECURED PARTY: Transamerica Commercial Finance Corp.
FINANCING STATEMENT #: 982583
COLLATERAL DESCRIPTION: Inventory, equipment, accounts, etc.
DATE: 9/28/95
VII. TBC ARKANSAS, INC. (Garland County)
DEBTOR: TBC Arkansas, Inc.
SECURED PARTY: Transamerica Commercial Finance Corporation
FINANCING STATEMENT #: 22402
COLLATERAL DESCRIPTION: Inventory, Equipment, Accounts, etc.
DATE: 10/2/95
VIII. TBC ARKANSAS, INC. (Cleburne County)
DEBTOR: TBC Arkansas, Inc.
SECURED PARTY: Transamerica Commercial Finance Corp.
FINANCING STATEMENT #: 95-829
COLLATERAL DESCRIPTION: Inventory, Equipment, Accounts, etc.
DATE: 9/29/95
IX. TRAVIS SNOWDEN MARINE, INC. (Tx. Secretary of State)
DEBTOR: Travis Snowden Marine, Inc.
9300 Harry Hines
Dallas, Texas 75235
SECURED PARTY: Transamerica Commercial Finance Corporation
FINANCING STATEMENT #: 87-00252513
COLLATERAL DESCRIPTION: Inventory, Equipment, Accounts, etc.
DATE: 9/30/87
DEBTOR: Travis Snowden Marine, Inc.
9300 Harry Hines
Dallas, Texas 75235
SECURED PARTY: Transamerica Commercial Finance Corp.
FINANCING STATEMENT #: 90-00259254
COLLATERAL DESCRIPTION: Inventory, Equipment, Accounts, etc.
DATE: 12/14/90
3
<PAGE>
EXISTING LIENS (cont.)
X. TRAVIS BOATING CENTER ARLINGTON, INC. (Tx. Secretary of State)
DEBTOR: Travis Boating Center Arlington, Inc.
1725 W. Division St.
Arlington, Tx. 76012
SECURED PARTY: Transamerica Commercial Finance Corp.
FINANCING STATEMENT #: 95-00039954
COLLATERAL DESCRIPTION: Inventory, Equipment, Accounts, etc.
DATE: 3/3/95
XI. FALCON MARINE (Tx. Secretary of State)
DEBTOR: Falcon Marine, Inc.
1920 N. Loop 250 West
Midland, Texas 78707
SECURED PARTY: Transamerica Commercial Finance Corp.
FINANCING STATEMENT #: 90-00259256
COLLATERAL DESCRIPTION: Inventory, Equipment, Accounts, etc.
DATE: 12/14/90
XII. FALCON MARINE ABILENE, INC. (Tx. Secretary of State)
DEBTOR: Falcon Marine Abilene, Inc.
1300 S. Clack
Abilene, Texas 79605
SECURED PARTY: Transamerica Commercial Finance Corp.
FINANCING STATEMENT #: 90-00259255
COLLATERAL DESCRIPTION: Inventory, Equipment, Accounts, etc.
DATE: 12/14/90
XIII. TRAVIS BOATING CENTER BEAUMONT, INC. (Tx. Secretary of State)
DEBTOR: Travis Boating Center Beaumont, Inc.
2949 College St.
Beaumont, Texas 77701
SECURED PARTY: Transamerica Commerical Finance Corporation
FINANCING STATEMENT #: 93-00231447
COLLATERAL DESCRIPTION: Inventory, Equipment, Accounts, etc.
DATE: 12/6/93
4
<PAGE>
EXISTING LIENS WITH
DEUTSCHE FINANCIAL SERVICES CORPORATION
AS SECURED PARTY
I. TRAVIS BOATS AND MOTORS (Tx. Secretary of State)
DEBTOR: Travis Boats and Motors, Inc.
13045 Research
Austin, Texas 78750
SECURED PARTY: Deutsche Financial Services Corporation
FINANCING STATEMENT #: 95-00164268
COLLATERAL DESCRIPTION: Inventory and equipment manufactured or sold by
Outboard Marine Corporation which bears the trademark or trade name of Johnson
DATE: 8/21/95
II. TRAVIS BOATS AND MOTORS BATON ROUGE, INC. (Louisiana Sec. of State)
DEBTOR: Travis Boats and Motors Baton Rouge, Inc.
SECURED PARTY: Deutsche Business Services Corporation
FINANCING STATEMENT #: 17-1110191
COLLATERAL DESCRIPTION: Inventory and equipment manufactured or sold by
Outboard Marine Corp. which bears the trademark or trade name of Johnson
FILED IN: East Baton Rouge Parish, La.
DATE: 8/21/95
III. TRAVIS BOATING CENTER LOUISIANA (Louisiana Sec. of State)
DEBTOR: Travis Boating Center Louisiana, Inc.
SECURED PARTY: Deutsche Business Services Corp.
FINANCING STATEMENT #: 23-95-1867
COLLATERAL DESCRIPTION: Inventory and equipment which is manufactured or sold by
Outboard Marine Corp. which bears the trademark or trade name of Johnson
FILED IN: New Iberia Parish, Louisiana
DATED: 12/15/95
1
<PAGE>
EXISTING LIENS (cont.)
IV. TBC ARKANSAS, INC. (Arkansas Sec. of State)
DEBTOR: TBC Arkansas, Inc.
SECURED PARTY: Deutsche Financial Services Corporation
FINANCING STATEMENT #: 1028061
COLLATERAL DESCRIPTION: Inventory manufactured or sold by Outboard Marine
Corporation or which bears the trademark or trade name of Johnson now owned or
hereafter acquired and all equipment and attachments; and all inventory
financing by Deutsche Financial Services Corporation, now or hereafter acquired
and all attachments
DATE: 7/16/96
V. TBC ARKANSAS, INC. (Cleburne County)
DEBTOR: TBC Arkansas, Inc.
SECURED PARTY: Deutsche Financial Services Corporation
FINANCING STATEMENT #: 95-776
COLLATERAL DESCRIPTION: Inventory manufactured by Outboard Marine Corp.
DATE: 9/11/95
VI. TRAVIS SNOWDEN MARINE, INC. (Tx. Secretary of State)
DEBTOR: Travis Snowden Marine, Inc.
2620 N. I-36
Carrollton, Tx. 75010
SECURED PARTY: Deutsche Financial Services Corporation
FINANCING STATEMENT #: 95-00164271
COLLATERAL DESCRIPTION: Inventory and equipment manufactured or sold by
Outboard Marine Corporation which bears the trademark or trade name of Johnson
DATE: 8/21/95
VII. TRAVIS BOATING CENTER ARLINGTON, INC. (Tx. Secretary of State)
DEBTOR: Travis Boating Center Arlington, Inc.
1725 W. Division
Arlington, Tx. 76012
SECURED PARTY: Deutsche Financial Services Corporation
FINANCING STATEMENT #: 95-164270
COLLATERAL DESCRIPTION: Inventory and equipment manufactured or sold by
Outboard Marine Corporation which bears the trademark of Johnson
DATE: 8/21/95
2
<PAGE>
EXISTING LIENS (cont.)
VIII. FALCON MARINE (Tx. Secretary of State)
DEBTOR: Falcon Marine, Inc.
1920 N. Loop 250 West
Midland, Texas 78707
SECURED PARTY: Deutsche Financial Services Corporation
FINANCING STATEMENT #: 86-00260912
COLLATERAL DESCRIPTION: Inventory, Equipment, Accounts, etc.
DATE: 9/5/86
DEBTOR: Falcon Marine, Inc.
1920 N. Loop 250 West
Midland, Texas 78707
SECURED PARTY: Deutsche Financial Services Corporation
FINANCING STATEMENT #: 95-00164269
COLLATERAL DESCRIPTION: Inventory and equipment manufactured or sold by Outboard
Marine Corporation which bears the trademark or trade name of Johnson
DATE: 8/21/95
IX. FALCON MARINE ABILENE, INC. (Tx. Secretary of State)
DEBTOR: Falcon Marine Abilene, Inc.
1201 E. Hwy. 80
Abilene, Tx.
SECURED PARTY: Deutsche Financial Corporation
FINANCING STATEMENT #: 95-00164272
COLLATERAL DESCRIPTION: Inventory and equipment manufactured or sold by
Outboard Marine Corp. which bears the trademark or trade name of Johnson
DATE: 8/21/95
X. TRAVIS BOATING CENTER BEAUMONT, INC. (Tx. Secretary of State)
DEBTOR: Travis Boating Center Beaumont, Inc.
2949 College St.
Beaumont, Texas 77701
SECURED PARTY: Deutsche Financial Services Corporation
FINANCING STATEMENT #: 95-00164267
COLLATERAL DESCRIPTION: Inventory and equipment manufactured or sold by
Outboard Marine Corporation and which bears any trademark or trade name of
Johnson
DATE: 8/21/95
3
<PAGE>
EXISTING LIENS WITH
BOMBARDIER CAPITAL, INC.
AS SECURED PARTY
I. TRAVIS BOATS AND MOTORS (Tx. Secretary of State)
DEBTOR: Travis Boats and Motors, Inc.
12300 IH 10 W.
San Antonio, Texas
SECURED PARTY: Bombardier Capital, Inc.
FINANCING STATEMENT #: 93-00231988
COLLATERAL DESCRIPTION: Inventory only
DATE: 12/6/93
II. FALCON MARINE ABILENE, INC. (Tx. Secretary of State)
DEBTOR: Falcon Marine Abilene, Inc.
1201 E. Hwy. 80
Abilene, Tx.
SECURED PARTY: Bombardier Capital, Inc.
FINANCING STATEMENT #: 93-00230630
COLLATERAL DESCRIPTION: Inventory only
DATE: 12/3/93
<PAGE>
EXISTING LIENS HELD BY
-----------------------
NATIONSBANK OF TEXAS, N.A. OR
-----------------------------
HIBERNIA NATIONAL BANK
----------------------
THAT COVER REAL ESTATE COLLATERAL
---------------------------------
1. DEBTOR: Travis Boats and Motors, Inc.
12718 IH 10 W.
San Antonio, Texas 78230
SECURED PARTY: NationsBank of Texas, N.A.
FINANCING STATEMENT #: 86-00311056
COLLATERAL DESCRIPTION: All inventory, equipment, accts. for Lot 17, NCB
14862, Stonehill 7 Subdivision, City of S.A., Bexar County, Texas
DATE: 10/27/86
2. DEBTOR: Travis Boats & Motors, Inc.
9185 Research Blvd.
Austin, Texas
SECURED PARTY: NationsBank of Texas, N.A.
FINANCING STATEMENT #: 93-00062895
COLLATERAL DESCRIPTION: Inventory, Equipment, Accounts for 3.423 acre out
of Henry Rhodes survey Abstract 522, situated in Williamson County, Texas
DATE: 4/1/93
3. DEBTOR: Travis Boats & Motors, Inc.
9185 Research Blvd.
Austin, Texas
SECURED PARTY: NationsBank of Texas, N.A.
FINANCING STATEMENT #: 94-00130500
COLLATERAL DESCRIPTION: Inventory, Equipment, Accounts, etc. for 3.423
acres in Williamson County, Texas
DATE: 7/1/94
4. DEBTOR: Travis Snowden Marine, Inc.
13045 Research Blvd.
Austin, Texas 78750
SECURED PARTY: NationsBank of Texas, N.A.
FINANCING STATEMENT #: 95-234802
COLLATERAL DESCRIPTION: All equipment, fixtures and articles of personal
property now or herefter attached to or used in connection with two tracts
of land located in Denton, County.
DATE: 12/7/95
<PAGE>
5. DEBTOR: Travis Snowden Marine, Inc.
13045 Research Blvd.
Austin, Texas 78750
SECURED PARTY: NationsBank of Texas, N.A. (second lien)
FINANCING STATEMENT #: 95-234803
COLLATERAL DESCRIPTION: All equipment, fixtures and articles of personal
property now or herefter attached to or used in connection with two tracts
of land located in Denton, County.
DATE: 12/7/95
6. DEBTOR: Travis Boating Center Louisiana, Inc.
SECURED PARTY: Hibernia National Bank
FINANCING STATEMENT #: 17-1113883
COLLATERAL DESCRIPTION: All equipment and fixtures, accounts, chattel
relating to an approximately 3.3 acre tract located in New Iberia,
Louisiana
DATE: 12/20/95
7. Also an Assignment of Leases and Rents that was filed in East Baton Rouge
Parish, La. with Hibernia National Bank as the Lender, and Travis Boats &
Motors Baton Rouge, Inc., as Borrower.
This Assignment references a promissory note in the amount of $480,000.00
that was issued by Hibernia National Bank to Travis Boats & Motors Baton
Rouge, Inc. on 7/14/95 and which promissory note was collateralized by the
property located at 14369 Florida Blvd., Baton Rouge, La. 70819
<PAGE>
SCHEDULE 5.1
------------
JURISDICTIONS QUALIFIED TO DO BUSINESS IN
<TABLE>
<CAPTION>
==================================================================
Borrower Jurisdiction Qualified
to do Business In
- ------------------------------------------------------------------
<S> <C>
Travis Boats & Motors, Inc. Texas
- ------------------------------------------------------------------
Travis Snowden Marine, Inc. Texas
- ------------------------------------------------------------------
Travis Boating Center Arlington, Inc. Texas
- ------------------------------------------------------------------
Falcon Marine, Inc. Texas
- ------------------------------------------------------------------
Falcon Marine Abilene, Inc. Texas
- ------------------------------------------------------------------
Travis Boating Center Beaumont, Inc. Texas
- ------------------------------------------------------------------
Travis Boats & Motors Baton Rouge, Inc. Louisiana
- ------------------------------------------------------------------
TBC Arkansas, Inc. Arkansas
- ------------------------------------------------------------------
TBC Management, Ltd. Texas
- ------------------------------------------------------------------
TBC Management, Inc. Delaware
- ------------------------------------------------------------------
Travis Boating Center Louisiana, Inc. Louisiana
- ------------------------------------------------------------------
Travis Boating Center Tennessee, Inc. Texas; Tennessee
- ------------------------------------------------------------------
Travis Boating Center Alabama, Inc. Texas; Alabama
- ------------------------------------------------------------------
Red River Marine Arkansas, Inc. Arkansas
- ------------------------------------------------------------------
Travis Boating Center Little Rock, Inc. Arkansas
- ------------------------------------------------------------------
Travis Boating Center Georgia, Inc. Texas
- ------------------------------------------------------------------
Travis Boating Center Florida, Inc. Texas
==================================================================
</TABLE>
<PAGE>
SCHEDULE 5.15
-------------
DEBT
<TABLE>
<CAPTION>
==========================================================================
Borrower Lender Original Maturity
Balance Date
<S> <C> <C> <C>
- --------------------------------------------------------------------------
Travis Boating Center Tri-Lakes Marine, $ 90,000.00 April 30, 2002
Alabama, Inc. Inc.
- --------------------------------------------------------------------------
Travis Boating Center Charles Bondurant $ 28,000.00 April 30, 2002
Alabama, Inc.
- --------------------------------------------------------------------------
Travis Boating Center Joe Bondurant $ 28,000.00 April 30, 2002
Alabama, Inc.
- --------------------------------------------------------------------------
Travis Boating Center Tom Bondurant $ 14,000.00 April 30, 2002
Alabama, Inc.
- --------------------------------------------------------------------------
Travis Boating Center Tri-Lakes Marine, $270,000.00 April 30, 2002
Tennessee, Inc. Inc.
- --------------------------------------------------------------------------
Travis Boating Center Charles Bondurant $ 68,000.00 April 30, 2002
Tennessee, Inc.
- --------------------------------------------------------------------------
Travis Boating Center Joe Bondurant $ 68,000.00 April 30, 2002
Tennessee, Inc.
- --------------------------------------------------------------------------
Travis Boating Center Tom Bondurant $ 34,000.00 April 30, 2002
Tennessee, Inc.
- --------------------------------------------------------------------------
Travis Boating Center Norht Alabama $ 79,706.97 February 28,
Alabama, Inc. Water Sports, Inc. 1999
==========================================================================
</TABLE>
SEE ATTACHED SCHEDULE OF CURRENT MATURITIES OF LONG TERM DEBT FOR ADDITIONAL
DEBT OUTSTANDING AS OF THE CLOSING DATE.
<PAGE>
SCHEDULE OF CURRENT MATURITIES OF LONG TERM DEBT
TRAVIS BOATS & MOTORS, INC. & SUBSIDIARIES
<TABLE>
<CAPTION>
10/XX X/97 10/X7 X/XX 10/93 9/XX 10/XX X/00 10/00 9/01
<S> <C> <C> <C> <C> <C>
1 Austin RE 1ST lien-NationsBank 28,004.00 27,872.00 50,308.00 50,X81.00 55,X28.00
2 Austin RE 2ND lien-OBA 11,012.00 12,858.00 14,470.00 14,XX2.00 16,178.00
3 Austin Pickup-UnitedBank & Trust 3,774.52 4,038.00 1,528.05 0.00 0.00
4 Austin Suburban-United Bank & Trust 5,263.30 5,657.00 1,434.88 0.00 0.00
5 San Antonio RE 1ST lien-NationsBank 58,588.00 38,088.00 38,998.00 58,098.00 38,998.00
6 San Antonio RE 2ND lien-NationsBank 14,708.00 14,708.00 14,708.00 14,708.00 14,708.00
7 Midlan RE 1ST lien-TCB 52,748.00 52,748.00 52,748.00 172,08X.32 0.00
8 Midlan RE 1ND lien-Jeff Barber XX,284.35 84,001.25 64,007.05 0.00 0.00
9 Abilene RE !ST lien-VFW Post 12,183.88 12,837.48 15,733.41 14,XX2.58 10,402.00
10 Abilene Pickup-First National Bank 4,488.00 3,100.00 0.00 0.00 0.00
11 Arlington Pickup-NationsBank 4,020.00 4,020.00 4,020.00 1,676.24 0.00
12 Arlington Improvements-NationsBank 18,089.00 9,722.46 0.00 0.00 0.00
13 BA, Beaumont, Dallas Trucks-NationsBank 18,492.00 18,997.00 12,080.14 0.00 0.00
14 Houston improvement Note-NationsBank X6,750.00 XX,760.00 X6,780.00 12,250.16 0.00
15 Beaumont improvement Note-Bank One 100,000.00 0.00 0.00 0.00 0.00
16 Dallas RE 1ST lien-NationsBank 45,287.00 45,287.00 45,287.00 48,287.00 48,287.00
17 Baton Rouge Bldg 1ST lien-Hibernia 21,178.00 23,228.00 28,463.00 27,021.00 30,818.00
18 Baton Rouge Bldg Improvement-Hibernia 18,407.00 14,701.00 18,120.00 10,57X.84 0.00
19 Baton Rouge Truck-Hibernia 4,829.00 4,874.00 5,253.00 1,828.49 0.00
20 New Iberia Improvement Note-Hibernia 38,798.00 35,982.00 9,388.07 0.00 0.00
21 New Iberia Truck Note Hibernia X,XXX.09 3,662.00 6,380.00 2,780.72 0.00
22 New Iberia Non-Compete-Clay Poltis 55,753.09 18,022.49 0.00 0.00 0.00
23 Huber Springs Truck Note-HSB Bank 5,278.00 6,814.00 8,407.00 7,080.00 1,248.78
24 Hot Springs Truck Loan-ABT 5,518.00 5,618.00 6,359.00 825.84 0.00
25 Arkansas Non-Compete-Benny Hargrove 92,030.00 100.078.00 110,174.00 120,114.00 121,188.00
26 Hot Springs RE-Benny Hargrove 16,886.00 18,424.00 20,108.00 23,020.00 28,102.00
27 Hot Springs RE- ABT 31,826.00 108,586.00 0.00 0.00 0.00
YEARLY CURRENT MATURITIES 622,445.83 857,607.08 514,439.80 543,008.79 885,XXX.K75
<CAPTION>
Later TOTAL NOTES
<S> <C> <C> <C>
1 Austin RE 1ST lien-NationsBank XX1,707.20 844,XX7.20 Ballons 4/28/2004
2 Austin RE 2ND lien-OBA X59,062.88 42X,XXX.XX Full Pay-off 6/1/2014
3 Austin Pickup-UnitedBank & Trust 0.00 X,137.27 Full Pay-off 1/8/98
4 Austin Suburban-United Bank & Trust 0.00 12,039.88 Full Pay-off 12/16/98
5 San Antonio RE 1ST lien-NationsBank x9,411.45 270,401.48 Balloons 2/28/2004
6 San Antonio RE 2ND lien-NationsBank 36,191.04 109,881.04 Full Pay-off 5/21/2004
7 Midlan RE 1ST lien-TCB 0.00 270,32X.XX Balloons 12/31/XX
8 Midlan RE 1ND lien-Jeff Barber 0.00 171.782.09 Full Pay-off 9/20/89
9 Abilene RE !ST lien-VFW Post 113,239.46 182,162.78 Full Pay-off 9/1/07
10 Abilene Pickup-First National Bank 0.00 7,843.XX Full Pay-off X/1/08
11 Arlington Pickup-NationsBank 0.00 13,706.24 Full Pay-off X/X/2000
12 Arlington Improvements-NationsBank 0.00 27,772.48 Full Pay-off 4/14/XX
13 BA, Beaumont, Dallas Trucks-NationsBank 0.00 44,539.14 Full Pay-off 5/17/XX
14 Houston improvement Note-NationsBank 0.00 122,500.18 Full Pay-off
15 Beaumont improvement Note-Bank One 0.00 100,000.00 Full Pay-off 12/XX/XX
16 Dallas RE 1ST lien-NationsBank 422,487.24 848,822.24 Balloons 12/31/2008
17 Baton Rouge Bldg 1ST lien-Hibernia 387,181.92 458,521.62 Balloons 7/7/2002
18 Baton Rouge Bldg Improvement-Hibernia 0.00 94,807.54 Full Pay-off 7/7/2000
19 Baton Rouge Truck-Hibernia 0.00 19,278.49 Full Pay-off 7/19/2000
20 New Iberia Improvement Note-Hibernia 0.00 70,148.07 Full Pay-off 11/30/XX
21 New Iberia Truck Note Hibernia 0.00 80,078.72 Full Pay-off 2/27/2000
22 New Iberia Non-Compete-Clay Poltis 0.00 49,775.49 Full Pay-off 3/31/XX
23 Huber Springs Truck Note-HSB Bank 0.00 25,802.79 Full Pay-off 11/15/2000
24 Hot Springs Truck Loan-ABT 0.00 18,012.64 Full Pay-off 10/23/XX
25 Arkansas Non-Compete-Benny Hargrove 180,007.25 735,882.23 Full Pay-off 11/15/2001
26 Hot Springs RE-Benny Hargrove 348,XX3.42 452.422.42 Full Pay-off 11/15/2010
27 Hot Springs RE- ABT 0.00 148,21X.00 Balloons 4/28/XX
YEARLY CURRENT MATURITIES 2,2XX,784.10 8,018,XXX.XX ERR
</TABLE>
<PAGE>
EXHIBIT 10.29(b)
SECURITY AGREEMENT
------------------
THIS SECURITY AGREEMENT (this "Security Agreement") is executed and
------------------
effective as of the 12th day of December, 1996, by TRAVIS BOATS & MOTORS, INC.,
a Texas corporation, TRAVIS SNOWDEN MARINE, INC., a Texas corporation, TRAVIS
BOATING CENTER ARLINGTON, INC., a Texas corporation, FALCON MARINE, INC., a
Texas corporation, FALCON MARINE ABILENE, INC., a Texas corporation, TRAVIS
BOATING CENTER BEAUMONT, INC., a Texas corporation, TRAVIS BOATS & MOTORS BATON
ROUGE, INC., a Louisiana corporation, TBC ARKANSAS, INC., an Arkansas
corporation, TBC MANAGEMENT, LTD., a Texas limited partnership, TBC MANAGEMENT,
INC., a Delaware corporation, TRAVIS BOATING CENTER LOUISIANA, INC., a Louisiana
corporation, TRAVIS BOATING CENTER TENNESSEE, INC., a Texas corporation, TRAVIS
BOATING CENTER ALABAMA, INC., a Texas corporation, RED RIVER MARINE ARKANSAS,
INC., an Arkansas corporation, TRAVIS BOATING CENTER LITTLE ROCK, INC., an
Arkansas corporation, TRAVIS BOATING CENTER GEORGIA, INC., a Texas corporation
and TRAVIS BOATING CENTER FLORIDA, INC., a Texas corporation and any other
entity which may hereafter execute this Security Agreement as a "Debtor" or be
added to the Agreement (as herein defined) as a "Borrower" (collectively,
"Debtor"), in favor of NATIONSBANK OF TEXAS, N.A., a national banking
- -------
association, as agent (in such capacity, "Agent") and for itself as a lender and
-----
such other lenders as may from time to time be a "Lender" under the Agreement
(hereinafter defined) (all such lenders are collectively referred to herein as
the "Lenders").
-------
W I T N E S S E T H:
-------------------
WHEREAS, pursuant to that certain Revolving Credit Agreement (as modified
from time to time, the "Agreement") dated as of December 12, 1996, by and among
---------
Agent, the Lenders and Debtor, as borrowers, the Lenders have agreed to make the
Credit Facility available to Debtor upon the terms and conditions set forth
therein (unless otherwise defined herein, each term used herein with its initial
letter capitalized shall have the meaning given to such term in the Agreement);
and
WHEREAS, the Credit Facility is given in renewal, extension, modification
and consolidation of the Prior Credit Facility, the indebtedness of which is
respectively secured by security interests granted by certain of the Borrowers
in favor of the Lender thereunder, as more particularly described on Exhibit A
---------
attached hereto (the "Existing Security Interests", as referenced in the
---------------------------
Agreement), which security interests have been respectively assigned by Lenders
to Agent for the benefit of Lenders pursuant to the Agreement; and
WHEREAS, as a condition to and in consideration for the agreement of the
Lenders to make monies available to Debtor and in order to provide collateral
security for the Obligations
Page 1
<PAGE>
and the Other Lender Obligations, the Lenders have requested and Debtor has
agreed to enter into this Agreement pursuant to which Debtor will grant to Agent
on behalf of the Lenders a first priority security interest in the Collateral
(as hereafter defined) and amend and restate the security agreements giving rise
to the Existing Security Interests.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged and confessed, Debtor agrees with Agent for the
benefit of the Lenders as follows:
ARTICLE I
GRANT
-----
1.01. Assignment and Grant of Security. Debtor hereby grants, pledges and
assigns to Agent a security interest in the following assets of Debtor, and all
rights, titles and interests of Debtor therein, wherever located and whether now
owned or hereafter acquired by Debtor or in which Debtor now has or at any time
in the future may acquire any right, title or interest (collectively, the
"Collateral"):
- -----------
(a) all inventory now owned or hereafter acquired by Debtor, including,
without limitation, any and all boat motor, trailer and parts inventory and
accessories ("Inventory"), and all related documents, goods, general intangibles
---------
and other property in which a security interest may be created under Chapter 9
of the Uniform Commercial Code as from time to time in effect in the State of
Texas or other applicable jurisdictions (the "UCC"), including, without
---
limitation, any bills of lading, invoices, warehouse receipts, documents of
title, bills of sale, certificates of title, manufacturer's certifies of origin,
certificates of origin, dealer reassignments of title, trust receipts, and other
documents, all monies received from manufacturers by way of credits, refunds, or
otherwise, and/or the proceeds of all repurchases payable to Debtor, and all
returned or repossessed goods; and
(b) any right to payment for services rendered or for goods sold or leased,
which is not evidenced by an instrument or chattel paper, whether or not it has
been earned by performance ("Accounts"), and all of Debtor's rights to any goods
--------
represented by any of the foregoing (including returned, refused or repossessed
goods and unpaid seller's rights) ; all general intangibles and other
obligations of any kind owing to Debtor (including under any trade names), now
or hereafter owned, existing, received or acquired, arising out of or in
connection with the sale or lease of goods or the rendering of services or
otherwise (including, without limitation, any such obligations that would be
characterized as an account, general intangible or chattel paper under the UCC)
(any and all such Accounts, general intangibles and obligations described in
this Section 1.01(a) being sometimes referred to herein collectively as the
---------------
"Receivables");
- ------------
Page 2
<PAGE>
(c) all now owned or existing or hereafter received or acquired writings
which evidence both a monetary obligation and a security interest in or a lease
of specific goods (collectively, the "Chattel Paper");
-------------
(d) all now owned or existing or hereafter received or acquired contracts
and agreements relating to any property described in this Section 1.10 to which
------------
Debtor is a party or to which Debtor has any rights, together with all
modifications, amendments or replacements of any of the foregoing (collectively,
the "Contracts"), including, without limitation, (i) all of Debtor's rights in,
---------
to and under all purchase orders or contracts by it for goods or services, and
all of Debtor's rights to any goods represented by any of the foregoing
(including returned, refused or repossessed goods and unpaid seller's rights),
(ii) all rights of Debtor to receive moneys due and to become due to it
thereunder or in connection therewith, whether or not yet earned by performance
(including, without limitation, all discounts or rebates on goods or inventory
purchased), (iii) all rights in and to all security agreements, leases,
guarantees and other contracts securing or otherwise relating to any such
Contracts, (iv) all rights of Debtor to damages arising out of, or for, breach
or default in respect thereof, and (v) all rights of Debtor to perform and to
exercise all remedies thereunder;
(e) the balance of every bank account and deposit account of Debtor,
including without limitation all accounts on deposit with or under the control
of any Lender or any affiliate of any Lender, and any other claim of Debtor
against any Lender, 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 possession or custody or under the control of any
Lender or any agent, affiliate or correspondent of any Lender, for any purpose,
and the proceeds thereof (Agent shall be deemed to have possession of any of the
Collateral in transit to or set apart for Agent, any Lender or any of their
respective agents, affiliates or correspondents);
(f) all customer lists, subscription lists, invoices, agings, verification
reports and other records relating in any way to any property described in this
Section 1.01, and all insurance policies and bonds and claims relating to any
- ------------
property described in this Section 1.01 and payments thereunder;
------------
(g) all rights, claims and benefits of Debtor against any Person arising
out of, relating to or in connection with any property described in this Section
-------
1.01;
- ----
(h) all accessions to, all substitutions for and replacements of, and all
cash or no-cash proceeds, products of and property receivable for any and all of
the foregoing Collateral arising from their sale or other disposition
(including, without limitation, proceeds which constitute property of the types
described in this Section 1.01) and, to the extent not otherwise included, all
------------
payments under insurance (whether or not Agent is the loss payee thereof), or
any indemnity, warranty or guaranty, payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Collateral.
Page 3
<PAGE>
1.02. Description of Obligations. This Security Agreement creates a
security interest in the Collateral securing the payment and performance of the
Obligations, which includes, without limitation, all obligations and
indebtedness arising under or pursuant to the Agreement, the Notes and the other
Loan Documents and, to the extent of the payment in full of the Obligations, the
Other Lender Obligations, pari passu.
1.03. Debtor Remains Liable. Anything herein to the contrary
notwithstanding, (a) each Debtor shall remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein to perform
all of its duties and obligations thereunder to the same extent as if this
Security Agreement had not been executed, (b) the exercise by Agent or any
Lender of any of the Rights hereunder shall not release any Debtor from any of
its duties or obligations under the contracts and agreements included in the
Collateral, and (c) neither Agent nor any Lender shall have any obligation or
liability under the contracts and agreements included in the Collateral by
reason of this Security Agreement, nor shall Agent or any Lender be obligated to
perform any of the obligations or duties of Debtor thereunder or to take any
action to correct or enforce any claim for payment assigned hereunder, make any
payment, to make any inquiry as to the nature or the sufficiency of any payment
received by it or as to the sufficiency of any performance by any party under
any Account or other receivable (or any agreement giving rise thereto) or under
any contract, to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.
1.04. Delivery of Security Collateral. All original manufacturer's
invoices, certificates of origin and all other title documents evidencing
Borrowers' ownership of all of their Inventory shall be maintained in
safekeeping by Borrowers in a manner reasonably acceptable to Agent, including,
without limitation, Borrowers' current practices, unless and until a request is
made therefor by Agent upon the occurrence of a monetary Event of Default which
Borrower has not cured in accordance with the applicable provisions of the
Agreement. In such event, within five Business Days of the request by Agent,
Borrowers shall deliver to Agent all original manufacturer's invoices,
certificates of origin and all other title documents in Borrowers' possession,
whether at the time of such request or thereafter, to Agent, and Agent shall
retain or hold all such original documents received by Agent after such request;
provided, however, Borrowers may retain or hold all such original documents
relating to Inventory covered by liens expressly excluded from the subordination
of an Intercreditor Agreement which is in full force and effect at the time of
Agent's request under this Section 1.04. Thereafter, all original
------------
manufacturer's invoices, certificates of origin and all other title documents
shall remain in Agent's possession until the Note and the Obligations are paid
and performed in full, provided that, if the original title documents have been
delivered to Agent as provided for herein and if no Event of Default has
occurred and is then existing, upon the sale of an item of Inventory by a
Borrower, Agent shall promptly deliver to the respective Borrower the original
title documents pertaining to the item of Inventory which has been sold; and
further provided, that, upon the happening of an Event of Default and during the
continuance thereof, Agent may transfer, as applicable, title documents
delivered to it pursuant to this Section 1.04 in connection with its sale of
------------
Inventory which constitute Collateral in accordance with its rights provided for
in this
Page 4
<PAGE>
Agreement. Except as noted above in this Section 1.04 all certificates or
------------
instruments representing or evidencing the Collateral shall be delivered to and
held by or on behalf of Agent pursuant hereto and shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to
Agent. After the occurrence of an Event of Default, Agent shall have the right,
at any time in its discretion and without notice to Debtor, to transfer to or to
register in the name of Agent or any of its nominees any or all of the
Collateral. In addition, after the occurrence of any Event of Default, Agent
shall have the right at any time to exchange certificates or instruments
representing or evidencing Collateral for certificates or instruments of smaller
or larger denominations.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
------------------------------
2.01. Representations and Warranties. Debtor represents and warrants,
with respect to itself and the Collateral, as follows:
(a) The chief places of business and chief executive offices of Debtor, the
storage and distribution facilities and the office where Debtor keeps all of its
records concerning the Inventory and other Collateral are located at the
addresses specified in Schedule 1 hereto. All of the Inventory and other
----------
Collateral pledged by Debtor hereunder is located at the places specified on
Schedule 1 hereto or in transit to a place specified on Schedule 1 hereto, or in
- ---------- ----------
transit for sale to a third-party purchaser in the ordinary course of Debtor's
business. All promissory notes or other instruments evidencing the Accounts
have been delivered and pledged to Agent duly endorsed and accompanied by such
duly executed instruments of transfer or assignment as are necessary for such
pledge, to be held as pledged collateral. Debtor has possession and control of
the Collateral pledged by it hereunder.
(b) Debtor is the legal and beneficial owner of all the Collateral free and
clear of any lien or security interest, option or other charge or encumbrance
except for (i) the security interest created by this Security Agreement and (ii)
any Liens permitted by the Agreement ("Permitted Liens"). No effective
---------------
financing statement or other similar document used to perfect and preserve a
security interest under the Laws of any jurisdiction covering all or any part of
the Collateral is on file in any recording office, except (i) such as may have
been filed in favor of Agent relating to this Security Agreement, and (ii) such
as may have been filed in connection with Permitted Liens.
(c) As of the date hereof, Debtor has the trade names set forth on Schedule
--------
2 and no others.
- -
(d) This Security Agreement and the pledge of the Collateral pursuant
hereto creates a valid first priority security interest (subject only to such
Permitted Liens as may cover the Collateral) in the Collateral securing the
payment of the Obligations and, to the extent of the
Page 5
<PAGE>
payment in full of the Obligations, the Other Lender Obligations, pari passu,
and upon filing of financing statements in accordance with the UCC, and any
other necessary actions to perfect such security interest, such first priority
security interest in such Collateral will be duly perfected; and all filings and
other actions necessary or desirable to perfect and protect such security
interest and such priority have been duly taken (or will be taken).
(e) The amount represented by Debtor to Agent from time to time as owing by
each account debtor or by all account debtors in respect of the Accounts will at
such time be the correct amount actually owing by such account debtor or debtors
thereunder. Each Account held as Collateral will represent a valid and legally
enforceable obligation of third parties. No amount payable to Debtor under or
in connection with any Accounts is evidenced by any Chattel Paper that has not
been delivered to Agent.
(f) No consent of any other Person and no authorization, approval or other
action by, and no notice to or filing with, any Governmental Authority is
required (i) for the pledge by Debtor of the Collateral pledged by it hereunder,
for the grant by Debtor of the security interest granted hereby or for the
execution, delivery or performance of this Security Agreement by Debtor, (ii)
for the perfection or maintenance of the pledge, assignment and security
interest created hereby (including the first priority nature of such pledge,
assignment and security interest) except for UCC filings or any other action
required by the UCC or other applicable perfection statutes, or (iii) for the
exercise by Agent or any Lender of the Rights provided for in this Security
Agreement or the remedies in respect of the Collateral pursuant to this Security
Agreement.
(g) Debtor has the corporate or partnership power and authority and the
legal right to execute and deliver, to perform its obligations under, and to
grant the security interest in the Collateral pursuant to, this Security
Agreement, and Debtor has taken all necessary corporate or partnership action to
authorize its execution, delivery and performance of, and grant of the security
interest in the Collateral pursuant to this Security Agreement.
(h) This Security Agreement constitutes a legal, valid and binding
obligation of Debtor enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally.
(i) The execution, delivery and performance of this Security Agreement will
not violate any provision of any applicable law, rule, regulation or contractual
obligations of Debtor and will not result in the creation or imposition of any
lien on any of the properties or revenues of Debtor pursuant to any applicable
law, rule, regulation or contractual obligations of Debtor, except as
contemplated hereby and except as would not have a Material Adverse Effect.
(j) No action, suit or proceeding of or before any court, arbitrator or any
governmental body, agency or official is pending or, to the knowledge of Debtor,
threatened by or against Debtor or against any of its properties or revenues
with respect to this Security Agreement or any of the transactions contemplated
hereby.
Page 6
<PAGE>
ARTICLE III
COVENANTS
---------
3.01. Further Assurances. (a) Debtor agrees that, where any agreement
existing as of the date hereof or hereafter to which Debtor is a party contains
any restriction prohibiting Debtor from granting any security interest under
this Security Agreement, Debtor will obtain or use its best efforts to obtain
the necessary consent to or waiver of such restriction from any Person so as to
enable Debtor to effectively grant to Agent such security interest under this
Security Agreement.
(b) Debtor will from time to time at its expense promptly execute and
deliver all further instruments and documents, and take all further action, that
may be necessary, or that Agent may reasonably request, in order to perfect and
protect any pledge, assignment or security interest granted or purported to be
granted hereby, and the priority thereof, or to create or preserve the full
benefits of this Security Agreement and the rights and powers of Agent herein
granted, or to enable Agent to exercise and enforce its rights and remedies
hereunder with respect to any of the Collateral. Without limiting the
generality of the foregoing, upon written request by Agent, Debtor will: (i)
mark conspicuously each item of Chattel Paper included in Accounts:
THIS INSTRUMENT IS SUBJECT TO A SECURITY INTEREST AND LIEN PURSUANT TO A
SECURITY AGREEMENT (AS THE SAME MAY BE MODIFIED OR RESTATED) MADE BY
____________, IN FAVOR OF NATIONSBANK OF TEXAS, N.A., AS AGENT
or such other legend, in form and substance satisfactory to and as specified by
Agent, indicating that such item of Chattel Paper is subject to the pledge,
assignment and security interest granted hereby; (ii) if any Collateral shall be
evidenced by a promissory note or other instrument or be Chattel Paper, deliver
to Agent such note, instrument or Chattel Paper, duly endorsed and accompanied
by duly executed instruments of transfer or assignment, all in form and
substance satisfactory to Agent; and (iii) execute and file such financing or
continuation statements, or amendments thereto, and such other instruments or
notices, as may be necessary, or as Agent may request, in order to perfect and
preserve the pledge, assignment and security interest granted or purported to be
granted hereby with respect to any and all the Collateral.
(c) Debtor hereby authorizes Agent to file one or more financing or
continuation statements, and amendments thereto, relating to all or any part of
the Collateral without the signature of Debtor where and to the extent permitted
by applicable law. A photocopy or other reproduction of this Security Agreement
or any financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where and to the extent permitted by
applicable law.
Page 7
<PAGE>
(d) Debtor will furnish to Agent from time to time, upon the written
request of Agent, statements and schedules further identifying and describing
the Collateral, and such other reports in connection with the Collateral, as
Agent may reasonably request.
(e) In addition to such other information as shall be specifically provided
for herein, Debtor shall furnish to Agent such other information with respect to
the Collateral as Agent may reasonably request from time to time in connection
with the Collateral, or the protection, preservation, maintenance or enforcement
of the security interest or the Collateral, including, without limitation, all
documents and things in Debtor's possession, or subject to its demand for
possession, related to the Collateral.
(f) If an Event of Default shall occur and be continuing, Debtor shall, if
any of the monies or property pledged or required to be pledged under Section
-------
1.01 are received by Debtor, forthwith transfer and deliver to Agent such money
- ----
or property received by Debtor, all of which thereafter shall be held by Agent,
pursuant to the terms of this Agreement, as part of the Collateral.
3.02. Inventory and Equipment.
(a) Debtor shall keep all of the Inventory (other than Inventory sold or
displayed in the ordinary course of business) at the place or places specified
therefor in Section 2.01(a) or, upon thirty days' prior written notice to Agent,
---------------
at such other places in such jurisdiction where all action required by Section
-------
3.01 shall have been taken with respect to such transferred Inventory.
- ----
(b) Debtor shall pay all property and other taxes, assessments and
governmental charges or levies imposed upon, and all claims (including claims
for labor, materials and supplies) against the Collateral pledged by it
hereunder as provided in the Agreement.
3.03. Insurance. Debtor will, at its own expense, maintain, or cause to
be maintained, insurance on the Collateral as provided in the Agreement, with
Agent (on behalf of the Lenders) being named as loss payee and additional
insured on all insurance policies which pertain to the Collateral. If Debtor
fails to perform or observe any applicable covenants as to insurance on any of
such Collateral, Agent may, upon notice to Debtor, at its own option obtain
insurance on such Collateral, and any premium therefor paid by Agent shall
become part of the Obligations and shall bear interest prior to the occurrence
of an Event of Default at the interest rate then applicable to the Credit
Facility and after the occurrence of an Event of Default, at the Default Rate in
effect under the Credit Facility. In the event Agent maintains such substitute
insurance, the additional premium for such insurance shall be due on demand and
payable by Debtor to Agent in accordance with any notice delivered to Debtor by
Agent. Debtor hereby grants Agent a security interest in any refunds of
unearned premiums in connection with any cancellation, adjustment or termination
of any policy of insurance required by Agent and in all proceeds of such
insurance and hereby appoints Agent its attorney-in-fact to, after the
occurrence and during the continuance of an Event of Default, endorse any check
or draft that may be payable to
Page 8
<PAGE>
Debtor in order to collect such refunds or proceeds. Any such sums collected by
Agent shall be credited, except to the extent applied to the purchase by Agent
of similar insurance, to any amounts then owing on the Obligations.
3.04. Place of Perfection; Records; Collection of Receivables and Chattel
Paper.
(a) Debtor will not (i) change the location of its chief executive office
from that specified in Schedule 1, or (ii) change its name, identity, tax
----------
identification number or corporate structure to such an extent that any
financing statement filed by Agent in connection with this Security Agreement
would become seriously misleading, or (iii) use any trade name other than those
listed on Schedule 2, unless Debtor shall have given prior written notice as
----------
soon as practicable thereof, and prior to effecting any such change Debtor shall
have taken such steps as Agent may deem necessary or advisable to continue the
perfection and priority of the security interest granted pursuant hereto.
(b) Except as otherwise provided in this Section 3.04(b) or in any of the
---------------
other Loan Documents, Debtor shall continue to collect, at its own expense, all
amounts due or to become due Debtor under the Receivables and Chattel Paper. In
connection with such collections, Debtor may take such action as Debtor or Agent
may deem reasonably necessary or advisable to enforce collection of the
Receivables and Chattel Paper; provided, however, that Agent shall have the
-------- -------
right upon the occurrence of an Event of Default (without notice to Debtor) to
notify the account debtors or obligors under any or all of the Collateral of the
assignment of such Collateral to Agent and to direct such account debtors or
obligors to make payment of all amounts due or to become due to Debtor
thereunder directly to Agent and, after the occurrence of an Event of Default,
at the expense of Debtor, to enforce collection of any such Collateral and to
adjust, settle or compromise the amount or payment thereof, in the same manner
and to the same extent as Debtor shall have been entitled. All amounts and
proceeds received by Debtor in respect of the Collateral after the occurrence of
and during the continuance of an Event of Default shall be received in trust for
the benefit of Agent hereunder, shall be segregated from other funds of Debtor
and shall be forthwith paid over to Agent in the same form as received (with any
necessary endorsement) to be held as collateral or applied to the Obligations,
or the Other Lender Obligations, as appropriate. Except prior to the occurrence
of an Event of Default and in accordance with Debtor's normal business policies
and practices in effect on the date hereof, Debtor shall not adjust, settle or
compromise the amount or payment of any Receivable or Chattel Paper, release
wholly or partly any account debtor or obligor thereof, or allow any credit or
discount thereon.
3.05. Other Liens. Debtor shall not create or permit to exist any lien,
security interest, option or other charge or encumbrance upon or with respect to
any of the Collateral, except for the security interests in favor of Agent under
this Security Agreement or any lien permitted under the Agreement.
3.06. Rights to Distributions. If Debtor shall become entitled to receive
or shall receive any interest in or certificate (including, without limitation,
any interest in or certificate
Page 9
<PAGE>
representing a distribution in connection with any reclassification, increase,
or reduction of capital, or issued in connection with any reorganization), or
any option or rights arising from or relating to any of the Collateral, whether
as an addition to, in substitution of, as a conversion of, or in exchange for
any of the Collateral, or otherwise, Debtor agrees to accept the same as Agent's
agent and to hold the same in trust on behalf of and for the benefit of Agent,
and to deliver the same immediately to Agent in the exact form received, with
appropriate undated stock or similar powers, duly executed in blank, to be held
by Agent, subject to the terms hereof, as Collateral. Agent shall be entitled
to all distributions, and to any sums paid upon or in respect of any Collateral,
upon the liquidation, dissolution, or reorganization of the issuer thereof which
shall be paid to Agent to be held by it as additional collateral security for
the Obligations and the Other Lender Obligations and application to the
Obligations and the Other Lender Obligations at the discretion of Agent. All
distributions paid or distributed in respect of the Collateral which are
received by Debtor in violation of this Security Agreement shall, until paid or
delivered to Agent, be held by Debtor in trust as additional Collateral for the
Obligation and the Other Lender Obligations.
3.07. Maintenance of Records. Debtor will keep and maintain at its own
cost and expense complete records of the Collateral, including, without
limitation, a record of all payments received and all credits granted with
respect to Receivables.
3.08. Right of Inspection. Each of the Agent and Lenders and its
officers, agents and representatives shall have the right to inspect, Debtor's
books and records upon request of Agent or Lenders and during normal business
hours. Upon notice to Debtor, not more than twice per year, not including a
Fiscal Year Audit, prior to the occurrence of an Event of Default, each of the
Agent and Lenders and its officers, agents and representatives shall, at the
expense of Debtor, at all reasonable times also have the right to enter into and
upon any premises where any of the Inventory is located for the purpose of
inspecting the same, observing its use or otherwise protecting its interests
therein.
3.09. Compliance with Terms of Contracts, etc. Debtor will perform and
comply in all material respects with all its obligations under all its other
contractual obligations relating to the Collateral.
3.10. Payment of Obligations. Debtor will pay promptly when due all taxes
and claims with respect to the Collateral, or in respect of its income or
profits therefrom as provided in the Agreement.
3.11. Limitations on Dispositions of Collateral. Debtor will not sell,
transfer, assign (by operation of law or otherwise), lease, abandon or otherwise
dispose of, or grant an option with respect to, any of the Collateral, or
attempt, offer or contract to do so, except for sales of Inventory in the
ordinary course of business and for full and fair consideration as provided in
the Agreement.
Page 10
<PAGE>
3.12. Limitations on Modifications, Waivers, Extensions of Agreements
Giving Rise to Accounts and Contracts. Debtor will not (i) amend, modify,
terminate or waive any provision of any contract or any agreement giving rise to
a Receivable in any manner, except in the ordinary course of business or (ii)
fail to exercise promptly and diligently each and every material right which it
may have under each contract and each agreement giving rise to a Receivable.
ARTICLE IV
RIGHTS AND POWERS OF AGENT
--------------------------
4.01. Agent May Perform. If Debtor fails to perform any agreement
contained herein, Agent may, after the occurrence of an Event of Default, itself
perform, or cause performance of, such agreement, and the expenses of Agent
incurred in connection therewith shall be payable by Debtor as provided in
Section 4.05.
- ------------
4.02. Limitation on Agent's Duties. The powers conferred on Agent
hereunder are solely to protect the interests of Agent and the Lenders in the
Collateral and shall not impose any duty upon Agent or any Lender to exercise
any such powers. Except for the safe custody of any Collateral in the
possession of Agent or any Lender and the accounting for monies actually
received by Agent or any Lender hereunder, neither Agent nor any Lender shall
have any duty as to any of the Collateral, as to ascertaining or taking action
with respect to calls, conversions, exchanges, maturities, tenders or other
matters relative to any Collateral, whether or not Agent or any Lender has or is
deemed to have knowledge of such matters, or as to the taking of any necessary
steps to preserve rights against prior parties or any other rights pertaining to
any reasonable care in the custody and preservation of any Collateral in the
possession of Agent or any Lender. Except as provided in this Section 4.02,
------------
neither Agent nor any Lender shall have any duty or liability to protect or
preserve any Collateral or to preserve rights pertaining thereto. Nothing
contained in this Security Agreement shall be construed as requiring or
obligating Agent or any Lender, and neither Agent nor any Lender shall be
required or obligated, to (a) present or file any claim or notice or take any
action, with respect to any Collateral or in connection therewith or (b) notify
Debtor of any decline in the value of any Collateral. The sole duty of Agent
with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9.207 of the UCC or otherwise, shall
be to deal with it in the same manner as Agent deals with similar property for
its own account. Neither Agent nor any Lender, nor any of their respective
directors, officers, employees or agents shall be liable for failure to demand,
collect or realize upon all or any part of the Collateral or for any delay in
doing so or shall be under any obligation to sell or otherwise dispose of any
Collateral upon the request of Debtor or otherwise.
4.03. Agent's Appointment as Attorney-in-Fact.
(a) Powers. Debtor hereby irrevocably constitutes and appoints Agent and
------
any officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of Debtor and in the name of Debtor or
Page 11
<PAGE>
in its own name, after the occurrence of an Event of Default, for the purpose of
carrying out the terms of this Security Agreement, to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this Security
Agreement, and, without limiting the generality of the foregoing, Debtor hereby
gives Agent after the occurrence and during the continuance of an Event of
Default the power and right, on behalf of Debtor, without notice to or assent by
Debtor, to do the following:
(1) in the case of any Collateral, in the name of Debtor or its own
name, or otherwise, to take possession of and endorse and collect any
checks, drafts, notes, acceptances or other instruments for the payment of
moneys due under, or with respect to, any Collateral and to file any claim
or to take any other action or proceeding in any court of law or equity or
otherwise deemed appropriate by Agent for the purpose of collecting any and
all such moneys due or with respect to such Collateral whenever payable;
(2) to pay or discharge taxes and liens levied or placed on or
threatened against the Collateral, to effect any repairs or any insurance
called for by the terms of this Security Agreement and to pay all or any
part of the premiums therefor and the costs thereof; and
(3) (i) to direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due
thereunder directly to Agent or as Agent shall direct; (ii) to ask or
demand for, collect, receive payment of and receipt for, any and all
moneys, claims and other amounts due or to become due at any time in
respect of or arising out of any Collateral; (iii) to sign and endorse any
invoices, freight or express bills, bills of lading, storage or warehouse
receipts, drafts against debtors, assignments, verifications, notices and
other documents in connection with any of the Collateral; (iv) to commence
and prosecute any suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect the Collateral or any portion
thereof and to enforce any other right in respect of any Collateral; (v) to
defend any suit, action or proceeding brought against Debtor with respect
to any Collateral; (vi) to settle, compromise or adjust any suit, action or
proceeding described in the preceding clause and, in connection therewith,
to give such discharges or releases as Agent may deem appropriate; and
(vii) generally, to sell, transfer, pledge and make any agreement with
respect to or otherwise deal with any of the Collateral as fully and
completely as though Agent were the absolute owner thereof for all
purposes, and to do, at Agent's option and Debtor's expense, at any time,
or from time to time, all acts and things which Agent deems necessary to
protect, preserve or realize upon the Collateral and the liens of Agent
thereon and to effect the intent of this Security Agreement, all as fully
and effectively as Debtor might do.
This power of attorney is power coupled with an interest and shall be
irrevocable until the Obligations shall have been paid in full or this Security
Agreement shall have been terminated.
Page 12
<PAGE>
(b) Other Powers. Debtor also authorizes Agent after the occurrence of and
------------
during the continuance of an Event of Default, at any time and from time to
time, to execute, in connection with any sale provided for in Section 4.04, any
------------
endorsements, assignments or other instruments of conveyance or transfer with
respect to the Collateral.
(c) No Duty on the Part of Agent. The powers conferred on Agent hereunder
----------------------------
are solely to protect the interests of Agent in the Collateral and shall not
impose any duty upon Agent to exercise any such powers. Agent shall be
accountable only for amounts that it actually receives as a result of the
exercise of such powers, and neither it nor any of its officers, directors,
employees or agents shall be responsible to Debtor for any act or failure to act
hereunder, except for its own gross negligence or willful misconduct, IT BEING
THE INTENT OF THE PARTIES HERETO THAT AGENT SHALL NOT BE ACCOUNTABLE FOR ITS OWN
NEGLIGENCE.
4.04. Remedies. (a) If an Event of Default shall occur and be
continuing, Agent may exercise, in addition to all other rights and remedies
granted to Agent or the Lenders in this Security Agreement and in any other
instrument or agreement securing, evidencing or relating to the Obligations, all
rights and remedies of a secured party under the UCC. Without limiting the
generality of the foregoing, Agent, without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (except any
notice required by law referred to below) to or upon Debtor or any other Person
(all and each of which demands, offenses, advertisements and notices are hereby
waived), may in such circumstances forthwith take possession of, assemble,
collect, receive, appropriate and realize upon the Collateral, or any part
thereof, and/or may forthwith sell, lease, assign, give option or options to
purchase, or otherwise dispose of and deliver the Collateral or any part thereof
(or contract to do any of the foregoing), in one or more parcels at public or
private sale or sales, at any exchange, broker's board or office of Agent or
elsewhere upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. Agent shall have the right upon any such public
sale or sales, and, to the extent permitted by law, upon any such private sale
or sales, to purchase the whole or any part of the Collateral so sold, free of
any right or equity of redemption in Debtor, which right or equity is hereby
waived and released. Debtor further agrees, at Agent's request, to assemble the
Collateral and make it available to Agent at Debtor's premises. Agent shall
apply the net proceeds of any such collection, recovery, receipt, appropriation,
realization or sale, after deducting all reasonable costs and expenses of every
kind incurred therein or incidental to the possession, assembly, preparation for
sale or other disposition, care or safekeeping of any of the Collateral or in
any way relating to the Collateral or the rights of Agent hereunder, including,
without limitation, reasonable attorneys' fees and disbursements, to the payment
in whole or in part of the Obligations, in such order as Agent may elect, and,
to the extent of the payment in full of the Obligations, the Other Lender
Obligations, pari passu, and only after such application and after the payment
by Agent of any other amount required by any provision of law, need Agent
account for the surplus, if any, to Debtor. To the extent permitted by
applicable law, Debtor waives all claims, damages and demands it may acquire
against Agent or any Lender arising out of the exercise of any rights hereunder.
It shall not be necessary that
Page 13
<PAGE>
Agent take possession of the Collateral or any part thereof prior to the time
that any sale pursuant to the provisions of this Section 4.04 is conducted, and
------------
it shall not be necessary that the Collateral or any part thereof be present at
the location of such sale. If any notice of a proposed sale or other
disposition of Collateral shall be required by law, such notice shall be deemed
reasonable and proper if given at least ten (10) days before such sale or other
disposition. Debtor shall remain liable for any deficiency if the proceeds of
any sale or other disposition of the Collateral are insufficient to pay the
Obligations and the fees and disbursements of any attorneys employed by Agent to
collect such deficiency.
(b) Louisiana proceedings. In the event that Agent elects to commence
---------------------
appropriate Louisiana foreclosure proceedings under this Security Agreement
after an Event of Default has occurred, Agent may cause the Collateral, or any
part or parts thereof, provided such Collateral is located within the state of
Louisiana, 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 Debtor or placing Debtor in default, all of which are expressly
waived. For purposes of foreclosure under Louisiana executory process
procedures, Debtor confesses judgment and acknowledges to be indebted unto and
in favor of Agent, in the full amount of all sums secured by this Security
Agreement, including principal, interest, costs, expenses, attorneys' fees,
other fees and charges, and all additional Advances that Agent may make on
Debtor's behalf pursuant to this Security Agreement. To the extent permitted
under applicable Louisiana law, Debtor 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 Articles 2331, 2722 and 2723 of the Louisiana Code of Civil
Procedure and all other Articles not specifically mentioned above. Should any
or all of the Collateral be seized as an incident to an action for the
recognition or enforcement of this Security Agreement, by executory process,
sequestration, attachment, writ of fieri facias or otherwise, Debtor hereby
agrees that the court issuing any or any person or entity named by Agent at the
time such seizure is requested, or any time thereafter, as keeper of the
Collateral ("Keeper") as provided under La.-R.S. 9:5136, et.seq. The Keeper
shall be entitled to reasonable compensation. Debtor agrees to pay the
reasonable fees of the Keeper, which are hereby fixed at $150.00 per hour, which
compensation to the Keeper shall also be secured by this Security Agreement in
the form of an additional advance as provided herein. In the event that it
should become necessary for Agent 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, Debtor agrees to reimburse Agent for the reasonable 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
Security Agreement.
Page 14
<PAGE>
4.05. Indemnity and Expenses. (a) Debtor agrees to indemnify Agent and the
Lenders from and against any and all claims, damages, losses, liabilities, costs
and expenses of any kind (including reasonable attorneys' fees) arising out of
or resulting from this Security Agreement or the security interest granted
herein, or any of the Collateral (including, without limitation, enforcement of
this Agreement), EXPRESSLY INCLUDING SUCH CLAIMS, LOSSES OR LIABILITIES ARISING
OUT OF THE NEGLIGENCE OF AGENT OR ANY LENDER, except claims, losses or
liabilities resulting from the gross negligence or willful misconduct of Agent
or any Lender.
(b) Debtor will upon demand pay to Agent the amount of any and all
reasonable expenses, including the reasonable fees and expenses of its counsel
and of any experts and agents, which Agent or, as to the matters described in
clauses (iii) or (iv) below, the Lenders may incur in connection with (i) the
administration of this Security Agreement, (ii) the custody, preservation, use
or operation of, or the sale of, collection from, or other realization upon, any
of the Collateral, (iii) the exercise or enforcement of any of the rights of
Agent or the Lenders hereunder or (iv) the failure by Debtor to perform or
observe any of the provisions hereof. Any such amounts so made shall be a part
of the Obligation, shall be payable upon demand, and if not paid upon demand
shall bear interest at the Default Rate in effect under the Credit Facility.
ARTICLE V
MISCELLANEOUS
-------------
5.01. Cumulative Rights. All Rights of Agent and the Lenders under the
Loan Documents are cumulative of each other and of every other Right which Agent
or the Lenders may otherwise have at Law or in equity or under any other
contract or other writing for the enforcement of the security interest herein or
the collection of the Obligations. The exercise of one or more Rights shall not
prejudice or impair the concurrent or subsequent exercise of other Rights.
5.02. Modifications; Amendments; Schedules; Etc. No amendment or waiver
of any provision of this Security Agreement, and no consent to any departure by
Debtor herefrom, shall in any event be effective unless the same shall be in
writing and signed by Agent, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
Upon any change in any information disclosed on any Schedule hereto, Debtor
shall promptly prepare and deliver to Agent a replacement schedule, indicating
its effective date, in form and substance satisfactory to Agent, and amendments
to and additional financing statements as Agent may require to preserve and
perfect a first priority security interest in the Collateral.
5.03. Continuing Security Interest. This Security Agreement shall create
a continuing security interest in the Collateral and shall remain in full force
and effect until the later of (i) the final payment in full of the Obligations
and all amounts payable under this Security Agreement and (ii) the expiration or
termination of the obligations of the Lenders to extend
Page 15
<PAGE>
credit to Debtor. Upon any such termination, Agent will, at Debtor's expense,
execute and deliver to Debtor such documents as Debtor shall reasonably request
to evidence such termination.
5.04. GOVERNING LAW; TERMS. THIS SECURITY AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, EXCEPT TO THE
EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR
REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE
LAWS OF A JURISDICTION OTHER THAN THE STATE OF TEXAS. UNLESS OTHERWISE DEFINED
HEREIN OR IN THE AGREEMENT, TERMS USED IN ARTICLE 9 OF THE UCC ARE USED HEREIN
AS THEREIN DEFINED.
5.05 ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES
HERETO INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING TO THIS
SECURITY AGREEMENT OR ANY RELATED NOTES 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 OR 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 SHALL CONTROL. JUDGMENT UPON ANY
ARBITRATION AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY PARTY TO
THE SECURITY AGREEMENT MAY BRING AN ACTION, INCLUDING A SUMMARY OR EXPEDITED
PROCEEDING, TO COMPEL ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH THIS
SECURITY AGREEMENT APPLIES IN ANY COURT HAVING JURISDICTION OVER SUCH ACTION.
(A) SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN THE CITY OF
BORROWER'S DOMICILE AT THE TIME OF THE SECURITY 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 AN ADDITIONAL 60 DAYS.
(B) RESERVATION OF RIGHTS. NOTHING IN THIS SECURITY AGREEMENT SHALL BE
DEEMED TO (1) LIMIT THE APPLICABILITY OF ANY OTHERWISE APPLICABLE STATUTES OF
LIMITATION OR REPOSE AND ANY WAIVERS
Page 16
<PAGE>
CONTAINED IN THIS SECURITY AGREEMENT; OR (II) BE A WAIVER BY THE LENDERS OF THE
PROTECTION AFFORDED TO IT BY 12. U.S.C. (S)91 OR ANY SUBSTANTIALLY EQUIVALENT
STATE LAW; OR (III) LIMIT THE RIGHT OF THE LENDERS HERETO (A) TO EXERCISE SELF
HELP REMEDIES SUCH AS (BUT NOT LIMITED TO) SETOFF, OR (B) TO FORECLOSURE 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 LENDERS MAY
EXERCISE SUCH SELF HELP RIGHTS, FORECLOSURE UPON SUCH PROPERTY, OR OBTAIN SUCH
PROVISIONAL OR ANCILLARY REMEDIES BEFORE, DURING OR AFTER THE PENDENCY OF ANY
ARBITRATION PROCEEDING BROUGHT PURSUANT TO THIS SECURITY AGREEMENT. NEITHER THE
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 SUCH ACTION, TO ARBITRATE
THE MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH REMEDIES.
5.06 WAIVER OF JURY TRIAL. DEBTOR HEREBY WAIVES TRIAL BY JURY IN ANY
JUDICIAL PROCEEDINGS INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER IN
TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED
WITH THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER.
5.07. Right to Use Agents. Agent and the Lenders may exercise their
Rights under or with respect to this Security Agreement through an agent,
representative, attorney or other designee.
5.08. No Interference, Compensation or Expense. Agent and the Lenders may
exercise their Rights under or with respect to this Security Agreement (a)
without resistance or interference by Debtor and (b) without payment of any
license fee or compensation of any kind to Debtor.
5.09. Waivers of Rights Inhibiting Enforcement. Debtor waives (a) any
claim that a public sale, in and of itself, of all or any part of the Collateral
is not a commercially reasonable method of sale for such Collateral, (b) except
as otherwise provided in this Security Agreement, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, ANY SUCH RIGHT THAT DEBTOR WOULD OTHERWISE HAVE UNDER THE
CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR OF ANY STATE, AND ALL OTHER
REQUIREMENTS AS TO THE TIME, PLACE AND TERMS OF SALE WITH RESPECT TO THE
ENFORCEMENT OF AGENT'S AND ALL OTHER RIGHTS HEREUNDER and (c) all rights of
redemption, appraisal or valuation.
Page 17
<PAGE>
5.10. Notices and Deliveries.
(a) Manner of Delivery. All notices, communications and materials to be
given or delivered pursuant to this Security Agreement shall be delivered in
accordance with Section 10.2 of the Agreement.
------------
5.11. ENTIRE AGREEMENT. THIS SECURITY AGREEMENT, TOGETHER WITH THE OTHER
LOAN DOCUMENTS, 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 ORAL AGREEMENTS AMONG THE PARTIES.
5.12. Successors and Assigns. All of the provisions of this Security
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns as and to the extent provided in the
Agreement.
5.13. Loan Document. This Security Agreement is a Loan Document executed
pursuant to the Agreement and shall (unless otherwise expressly indicated
herein) be construed, administered and applied in accordance with the terms and
provisions thereof.
5.14. Severability. If any provision of this Security Agreement is held
to be illegal, invalid, or unenforceable under present or future Laws during the
term hereof, such provision shall be fully severable, this Security Agreement
shall be construed and enforced as if such illegal, invalid, or unenforceable
provision had never comprised a part hereof, and the remaining provisions hereof
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 Security Agreement a legal, valid, and
enforceable provision as similar in terms to the illegal, invalid, or
unenforceable provision as may be possible.
5.15. Counterparts. This Security Agreement may be executed in any number
of counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument.
Page 18
<PAGE>
IN WITNESS WHEREOF, Debtor and Agent have duly executed and delivered this
Security Agreement effective as of the date first above written.
DEBTOR:
TRAVIS BOATS & MOTORS, INC., a Texas corporation,
TRAVIS SNOWDEN MARINE, INC., A Texas corporation,
TRAVIS BOATING CENTER ARLINGTON, INC., a Texas
corporation, FALCON MARINE, INC., a Texas corporation,
FALCON MARINE ABILENE, INC., a Texas corporation,
TRAVIS BOATING CENTER BEAUMONT, INC., a Texas
corporation, TRAVIS BOATING CENTER TENNESSEE, INC., a
Texas corporation, TRAVIS BOATING CENTER ALABAMA, INC.,
a Texas corporation, TRAVIS BOATING CENTER GEORGIA,
INC., a Texas corporation and TRAVIS BOATING CENTER
FLORIDA, INC., a Texas corporation
By: /s/ Mark T. Walton
------------------------------------------------
Name: Mark T. Walton
Title: President
TRAVIS BOATS & MOTORS BATON ROUGE, INC., a Louisiana
corporation and TRAVIS BOATING CENTER LOUISIANA, INC.,
a Louisiana corporation
By: /s/ Mark T. Walton
------------------------------------------------
Name: Mark T. Walton
Title: President
TBC ARKANSAS, INC., an Arkansas corporation, RED RIVER
MARINE ARKANSAS, INC., a Arkansas corporation and
TRAVIS BOATING CENTER LITTLE ROCK, INC., a Arkansas
corporation
By: /s/ Mark T. Walton
------------------------------------------------
Name: Mark T. Walton
Title: President
Page 19
<PAGE>
TBC MANAGEMENT, INC., a Delaware corporation
By: /s/ Mark T. Walton
----------------------------------------------
Name: Mark T. Walton
Title: President
TBC MANAGEMENT, LTD., a Texas limited partnership
By: TRAVIS BOATS & MOTORS, INC., a Texas
corporation, as General Partner
By: /s/ Mark T. Walton
-----------------------------------------
Name: Mark T. Walton
Title: President
Address of Agent: AGENT:
NationsBank Plaza NATIONSBANK OF TEXAS, N.A., as Agent for
300 Convent Street the Lenders
San Antonio, Texas 78205
Attention: Commercial Banking By: /s/ R. Mark Bearfield
Department -----------------------------------------
Telecopy No.: (210) 270-5374 Name: R. Mark Bearfield
Title: Vice President
Page 20
<PAGE>
EXHIBIT A
---------
EXISTING SECURITY AGREEMENTS
A. WITH NATIONSBANK OF TEXAS, N.A. AS LENDER
1. Security Agreement dated May 29, 1992 by and between Travis Boats & Motors,
Inc., Falcon Marine, Inc. and Falcon Marine Abilene, Inc., as Debtor, and
NationsBank of Texas, N.A., as Secured Party, with the collateral being
described therein.
2. Security Agreement dated June 30, 1992 by and between Travis Boats &
Motors, Inc., Falcon Marine, Inc. and Falcon Marine Abilene, Inc., as
Debtor, and NationsBank of Texas, N.A., as Secured Party, with the
collateral being described therein.
3. Security Agreement dated June 21, 1993 by and between Travis Snowden
Marine, Inc., as Debtor, and NationsBank of Texas, N.A., as Secured Party,
with the collateral being described therein.
4. Security Agreement dated July 30, 1993 by and between Travis Boats &
Motors, Inc., Falcon Marine, Inc., Falcon Marine Abilene, Inc. and Travis
Snowden Marine, Inc., as Debtor, and NationsBank of Texas, N.A., as Secured
Party, with the collateral being described therein.
5. Security Agreement dated December 6, 1993 by and between Travis Boats &
Motors, Inc., Falcon Marine, Inc., Falcon Marine Abilene, Inc., Travis
Snowden Marine, Inc. and Travis Boating Center Beaumont, Inc., as Debtor,
and NationsBank of Texas, N.A., as Secured Party, with the collateral being
described therein.
6. Security Agreement dated January 7, 1995 by and between 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., as Debtor, and NationsBank of Texas, N.A.,
as Secured Party, with the collateral being described therein.
7. Security Agreement dated July 31, 1995 by and between Travis Boats &
Motors, Inc., Falcon Marine, Inc., Falcon Marine Abilene, Inc., Travis
Snowden Marine, Inc., Travis Boating Center Beaumont, Inc., Travis Boating
Center Arlington, Inc., as Debtor, and NationsBank of Texas, N.A., as
Secured Party, with the collateral being described therein.
8. Security Agreement dated January 26, 1996 by and between Travis Boats &
Motors, Inc., as Debtor, and NationsBank of Texas, N.A., as Secured Party,
with the collateral being described therein.
<PAGE>
B. WITH HIBERNIA NATIONAL BANK AS LENDER
1. Commercial Security Agreement dated November 24, 1994 by and between Travis
Boats and Motors Baton Rouge, Inc. d/b/a Baton Rouge Boating Centre, as
Borrower, and Hibernia National Bank, as Lender, with the collateral being
described therein.
2. Commercial Security Agreement dated September 1, 1995 by and between TBC
Arkansas, Inc., as Borrower, and Hibernia National Bank, as Lender, with
the collateral being described therein.
3. Commercial Security Agreement dated November 30, 1995 by and between Travis
Boating Center Louisiana, Inc., as Borrower, and Hibernia National Bank, as
Lender, with the collateral being described therein.
<PAGE>
SCHEDULE 1
----------
Collateral Locations
<TABLE>
<CAPTION>
CHIEF EXECUTIVE
OFFICE AND LOCATION
BUSINESS STORAGE AND OF MATERIAL RECORDS
COMPANY DISTRIBUTION LOCATIONS AND BOOKS OF ACCT.
<S> <C> <C>
Travis Boats & Motors, Inc. 13045 Research Blvd. 13045 Research Blvd.
Austin, Texas 78750 Austin, Texas 78750
Travis Boats & Motors, Inc. 12300 IH 10 West 13045 Research Blvd.
San Antonio, Texas 78230 Austin, Texas 78750
Travis Boats & Motors, Inc. 7530 North Freeway 13045 Research Blvd.
Houston, Texas 77037 Austin, Texas 78750
Travis Snowden Marine, Inc. 1320 S. Stemmons 13045 Research Blvd.
Lewisville, Texas 75067 Austin, Texas 78750
Travis Boating Center 1725 W. Division 13045 Research Blvd.
Arlington, Inc. Arlington, Texas 76012 Austin, Texas 78750
Falcon Marine, Inc. 1920 North Loop 250 W. 13045 Research Blvd.
Midland, Texas 79707 Austin, Texas 78750
Falcon Marine Abilene, Inc. 1021 E. Highway 80 13045 Research Blvd.
Abilene, Texas 79601 Austin, Texas 78750
Travis Boating Center 7660 College Street 13045 Research Blvd.
Beaumont, Inc. Beaumont, Texas 77707 Austin, Texas 78750
Travis Boats & Motors Baton 14369 Florida Blvd. 13045 Research Blvd.
Rouge, Inc. Baton Rouge, Louisiana 70819 Austin, Texas 78750
TBC Arkansas, Inc. 2001 Hwy. 25 North 13045 Research Blvd.
Heber Springs, Arkansas 72543 Austin, Texas 78750
TBC Arkansas, Inc. 3034 Albert Pike 13045 Research Blvd.
Hot Springs, Arkansas 71913 Austin, Texas 78750
TBC Management, Ltd., 13045 Research Blvd. 13045 Research Blvd.
Austin, Texas 78750 Austin, Texas 78750
TBC Management, Inc. 1209 Orange Street 1209 Orange Street
Wilmington, Delaware 19801-1134 Wilmington, Delaware 19801-1134
Travis Boating Center 1700 East Main Street 13045 Research Blvd.
Louisiana, Inc. New Iberia, Louisiana 70560 Austin, Texas 78750
Travis Boating Center 38 Marina Lane 13045 Research Blvd.
Tennessee, Inc. Winchester, Tennessee 37398 Austin, Texas 78750
</TABLE>
<PAGE>
SCHEDULE 1
----------
Collateral Locations (cont.)
<TABLE>
<S> <C> <C>
Travis Boating Center Alabama, 2006 Fisher Street 13045 Research Blvd.
Inc. Huntsville, Alabama 35803 Austin, Texas 78750
Travis Boating Center Alabama, Route 7, Box 1 13045 Research Blvd.
Inc. Florence, Alabama 35630 Austin, Texas 78750
Red River Marine Arkansas, Inc. 13045 Research Blvd.
Austin, Texas 78750
Travis Boating Center Little Rock, Inc. 13045 Research Blvd.
Austin, Texas 78750
Travis Boating Center Georgia, Inc. 13045 Research Blvd.
Austin, Texas 78750
Travis Boating Center Florida, Inc. 13045 Research Blvd.
</TABLE>
<PAGE>
SCHEDULE 2
----------
Trade Names
- --------------------------------------------------------------------------------
The following trade names are used by Debtor:
Travis Boating Center
Red River Marine
Baton Rouge Boating Centre
<PAGE>
EXHIBIT 10.29 (C)
REVOLVING NOTE
$9,000,000 San Antonio, Texas December 12, 1996
FOR VALUE RECEIVED, TRAVIS BOATS & MOTORS, INC., a Texas corporation,
TRAVIS SNOWDEN MARINE, INC., a Texas corporation, TRAVIS BOATING CENTER
ARLINGTON, INC., a Texas corporation, FALCON MARINE, INC., a Texas corporation,
FALCON MARINE ABILENE, INC., a Texas corporation, TRAVIS BOATING CENTER
BEAUMONT, INC., a Texas corporation, TRAVIS BOATS & MOTORS BATON ROUGE, INC., a
Louisiana corporation, TBC ARKANSAS, INC., an Arkansas corporation, TBC
MANAGEMENT, Ltd., a Texas limited partnership, TBC MANAGEMENT, INC., a Delaware
corporation, TRAVIS BOATING CENTER LOUISIANA, INC., a Louisiana corporation,
TRAVIS BOATING CENTER TENNESSEE, INC., a Texas corporation, TRAVIS BOATING
CENTER ALABAMA, INC., a Texas corporation, RED RIVER MARINE ARKANSAS, INC., an
Arkansas corporation, TRAVIS BOATING CENTER LITTLE ROCK, INC., an Arkansas
corporation, TRAVIS BOATING CENTER GEORGIA, INC., a Texas corporation and TRAVIS
BOATING CENTER FLORIDA, INC., a Texas corporation (collectively "Borrowers"),
---------
hereby, jointly and severally, promise to pay to the order of NATIONSBANK OF
TEXAS, N.A., a national banking association ("Lender"), at the offices of
------
NATIONSBANK OF TEXAS, N.A., a national banking association (the "Agent") at 300
-----
Convent Street, San Antonio, Texas 78205, the principal sum of Nine Million and
No/100 Dollars ($9,000,000.00) (or the unpaid balance of all principal advanced
against this Note, if that amount is less), on or before the Termination Date
for this Note (as established by the Agreement), in lawful money of the United
States of America, together with interest on the unpaid principal balance of
this Note from day to day outstanding, in accordance with the terms and
provisions of the Agreement; provided, however, that in no event shall interest
accrue hereunder at a rate in excess of the Maximum Lawful Rate. Subject to the
provisions hereof limiting interest to the Maximum Lawful Rate, interest on
Advances shall be computed based on the number of days elapsed and 360-days per
year or in the case of interest accruing at the Maximum Lawful Rate, 365/366
days per year. Advances of the principal indebtedness evidenced by this Note
shall be made pursuant to the Credit Agreement (as herein defined), which
amounts may be borrowed, repaid and reborrowed as provided in and subject to the
terms of the Credit Agreement. Each Advance made by Lender to Borrowers
pursuant to the Credit Agreement may be recorded by lender and, with respect to
any transfer hereof, endorsed on the grid attached hereto which is part of this
Note. Any failure by Lender to endorse the grid attached hereto shall not
impair the obligation of Borrowers to pay any amount due and owing hereunder.
All capitalized terms used herein, but not specifically defined, shall
have the same meanings set forth in the Agreement.
Principal and all accrued interest hereunder shall be due and payable
upon the terms and on the dates provided for in the Credit Agreement.
<PAGE>
After maturity of this Note or the occurrence of an Event of Default,
the outstanding principal balance of this Note shall, at the option of the
Required Lenders, bear interest at the Default Rate, as provided in the
Agreement.
If at any time the Applicable Rate shall be limited to the Maximum
Lawful Rate, any subsequent reductions in the Applicable Rate shall not reduce
the rate of interest on this Note below the Maximum Lawful Rate until the total
amount of interest accrued equals the amount of interest which would have
accrued if the Applicable Rate had at all times been in effect. In the event
that at maturity (stated or by acceleration), or at the final payment of the
Credit Facility, the total amount of interest paid or accrued on the Credit
Facility is less than the amount of interest which would have accrued if the
Applicable Rate had at all times been in effect with respect thereto, then at
such time, to the extent permitted by law, Borrowers shall pay to Agent, for the
ratable benefit of the Lenders, an amount equal to the difference between (a)
the lesser of the amount of interest which would have accrued if the Applicable
Rate had at all times been in effect and the amount of interest which would have
accrued if the Maximum Lawful Rate had at all times been in effect, and (b) the
amount of interest actually paid on the Credit Facility.
This Note has been executed and delivered pursuant to the terms of
that certain Revolving Credit Agreement (as the same may be modified, amended,
supplemented, extended or restated from time to time, the "Credit Agreement")
----------------
dated as of December 12, 1996, executed by and among Borrowers, Agent and the
Lenders (which includes the payee of this Note) and is one of the notes defined
therein as a "Note", the terms and provisions of the Credit Agreement related to
----
this Note being incorporated herein by reference for all purposes. The terms of
the Credit Agreement shall govern in the case of any inconsistency between such
terms and the terms hereof.
This Note is secured by the Security Agreement and all the other Loan
Documents, and all liens and security interests created or evidenced thereby.
Any holder shall be entitled to all benefits and remedies and security set forth
in the Credit Agreement and all the other Loan Documents.
The occurrence of a Default or an Event of Default, under and as
defined in the Credit Agreement, shall constitute, respectively, a Default or an
Event of Default under this Note, and the unpaid principal of and accrued
interest on this Note may be declared due and payable in the manner and with the
effect provided in the Credit Agreement.
Each Borrower and all sureties, endorsers, guarantors and any other
party now or hereafter liable for the payment of this Note in whole or in part,
hereby severally (i) waive demand, presentment for payment, notice of dishonor
and of nonpayment, protest, notice of protest, notice of intent to accelerate,
notice of acceleration and all other notice (except only for any notice that is
specifically required by the terms of the Credit Agreement or any other Loan
Document), filing of suit and diligence in collecting this Note or enforcing any
of the security herefor; (ii) agree to any substitution, subordination, exchange
or release of any such security or the release of any party primarily or
secondarily liable hereon; (iii) agree that the holder hereof shall not be
required first to institute suit or exhaust its remedies against any Borrower
<PAGE>
or others liable or to become liable hereon or to enforce its rights against
them or any security herefor; (iv) consent to any extension or postponement of
time of payment of this Note for any period or periods of time and to any
partial payments, before or after maturity, and to any other indulgences with
respect hereto, without notice thereof to any of them; and (v) submit (and waive
all rights to object) to personal jurisdiction in the State of Texas, and venue
in Bexar County, Texas, for the enforcement of any and all obligations under the
Loan Documents.
If any holder of this Note retains an attorney in connection with any
default or at maturity or to collect, enforce or defend this Note or any other
Loan Document in any lawsuit or in any probate, reorganization, bankruptcy or
other proceeding, or if any Borrower sues any holder of this Note in connection
with this Note or any other Loan Document and does not prevail, then Borrowers
agree to pay to each such holder, in addition to principal and interest, all
costs and expenses incurred by such holder in trying to collect this Note or in
any such suit or proceeding, including reasonable attorneys' fees as and to the
extent provided in the Credit Agreement.
Notwithstanding anything herein or in any other Loan Documents,
expressed or implied, to the contrary, in no event shall any interest rate
charged hereunder or under any of the other Loan Documents, or any interest
contracted for, collected or received by Lender or any holder hereof, exceed the
Maximum Lawful Rate. It is expressly stipulated and agreed to be the intent of
Borrowers and Lender at all times to comply with the applicable law governing
the maximum rate or amount of interest payable on or in connection with this
Note. If the applicable law is ever judicially interpreted so as to render
usurious any amount called for under this Note or under any of the other Loan
Documents, or contracted for, charged, taken, reserved or received with respect
to this Note, or if acceleration of the maturity of this Note, any prepayment by
Borrowers, or any other circumstance whatsoever, results in Lender having been
paid any interest in excess of that permitted by applicable law, then it is the
express intent of Borrowers and Lender that all excess amounts theretofore
collected by Lender be credited on the principal balance of this Note (or, if
this Note has been or would thereby be paid in full, refunded to Borrowers), and
the provisions of this Note and the other applicable Loan Documents immediately
be deemed reformed and the amounts thereafter collectible hereunder and
thereunder reduced, without the necessity of the execution of any new document,
so as to comply with the applicable law, but so as to permit the recovery of the
fullest amount otherwise called for hereunder and thereunder. The right to
accelerate the maturity of this Note does not include the right to accelerate
any interest which has not otherwise accrued on the date of such acceleration,
and Lender does not intend to collect any unearned interest in the event of
acceleration. All sums paid or agreed to be paid to Lender for the use,
forbearance or detention of the indebtedness evidenced hereby or by any other
Loan Document shall, to the extent permitted by applicable law, be amortized,
prorated, allocated and spread throughout the full term of such indebtedness
until payment in full so that the rate or amount of interest on account of such
indebtedness does not exceed the Maximum Lawful Rate. The term "applicable law"
--------------
as used herein shall mean the laws of the State of Texas, or any applicable
United States federal law to the extent that it permits Lender to contract for,
charge, take, reserve or receive a greater amount of interest than under Texas
law. The provisions of this paragraph shall control all agreements between
Borrowers and Lender.
Borrowers acknowledge and agree that the holder of this Note may, at
any time and from time to time, assign all or a portion of its interest in the
Credit Facility or transfer to an Eligible
<PAGE>
Assignee a participation interest in the Credit Facility, subject to and in
accordance with the terms and conditions of the Credit Agreement, including
Section 10.10 thereof.
- -------------
ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES
HERETO INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING TO THIS
NOTE OR ANY RELATED NOTES 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 OR 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 SHALL CONTROL. JUDGMENT UPON ANY ARBITRATION
AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY PARTY TO THE NOTE
MAY BRING AN ACTION, INCLUDING A SUMMARY OR EXPEDITED PROCEEDING, TO COMPEL
ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH THIS NOTE APPLIES IN ANY COURT
HAVING JURISDICTION OVER SUCH ACTION.
(A) SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN THE CITY OF
BORROWER'S DOMICILE AT THE TIME OF THE NOTE'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 AN
ADDITIONAL 60 DAYS.
(B) RESERVATION OF RIGHTS. NOTHING IN THIS NOTE SHALL BE DEEMED TO
(1) LIMIT THE APPLICABILITY OF ANY OTHERWISE APPLICABLE STATUTES OF LIMITATION
OR REPOSE AND ANY WAIVERS CONTAINED IN THIS NOTE; OR (II) BE A WAIVER BY THE
LENDER OF THE PROTECTION AFFORDED TO IT BY 12. U.S.C. (S)91 OR ANY SUBSTANTIALLY
EQUIVALENT STATE LAW; OR (III) LIMIT THE RIGHT OF THE LENDER HERETO (A) TO
EXERCISE SELF HELP REMEDIES SUCH AS (BUT NOT LIMITED TO) SETOFF, OR (B) TO
FORECLOSURE 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
LENDER MAY EXERCISE SUCH SELF HELP RIGHTS, FORECLOSURE UPON SUCH PROPERTY, OR
OBTAIN SUCH PROVISIONAL OR ANCILLARY REMEDIES BEFORE, DURING OR AFTER THE
PENDENCY OF ANY ARBITRATION PROCEEDING BROUGHT PURSUANT TO THIS NOTE. NEITHER
THE 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 SUCH ACTION, TO
<PAGE>
ARBITRATE THE MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH
REMEDIES.
THIS NOTE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND
GOVERNED BY TEXAS LAW, EXCEPT TO THE EXTENT THAT THE LAWS OF ANOTHER
JURISDICTION GOVERN THE CREATION, PERFECTION OR ENFORCEMENT OF INTERESTS, OR THE
REMEDIES RELATED TO ANY PART OF THE COLLATERAL, OR TO THE EXTENT THAT UNITED
STATES FEDERAL LAW APPLIES PURSUANT TO SECTION 10.8 OF THE Credit Agreement OR
------------
OTHERWISE.
IN WITNESS WHEREOF, Borrower has duly executed this Note as of the
date first above written.
BORROWERS:
---------
TRAVIS BOATS & MOTORS, INC., a Texas corporation,
TRAVIS SNOWDEN MARINE, INC., A Texas corporation,
TRAVIS BOATING CENTER ARLINGTON, INC., a Texas
corporation, FALCON MARINE, INC., a Texas
corporation, FALCON MARINE ABILENE, INC., a Texas
corporation, TRAVIS BOATING CENTER BEAUMONT, INC.,
a Texas corporation, TRAVIS BOATING CENTER
TENNESSEE, INC., a Texas corporation, TRAVIS
BOATING CENTER ALABAMA, INC., a Texas corporation,
TRAVIS BOATING CENTER GEORGIA, INC., a Texas
corporation and TRAVIS BOATING CENTER FLORIDA,
INC., a Texas corporation
By: /s/ Mark T. Walton
------------------------
Name: Mark T. Walton
Title: President
<PAGE>
TRAVIS BOATS & MOTORS BATON ROUGE, INC., a
Louisiana corporation and TRAVIS BOATING CENTER
LOUISIANA, INC., a Louisiana corporation
By: /s/ Mark T. Walton
-------------------------
Name: Mark T. Walton
Title: President
TBC ARKANSAS, INC., an Arkansas corporation, RED
RIVER MARINE ARKANSAS, INC., a Arkansas
corporation and TRAVIS BOATING CENTER LITTLE ROCK,
INC., a Arkansas corporation
By: /s/ Mark T. Walton
-------------------------
Name: Mark T. Walton
Title: President
TBC MANAGEMENT, INC., a Delaware corporation
By: /s/ Mark T. Walton
-------------------------
Name: Mark T. Walton
Title: President
TBC MANAGEMENT, LTD., a Texas limited partnership
By: TRAVIS BOATS & MOTORS, INC., a
Texas corporation, as General
Partner
By: /s/ Mark T. Walton
--------------------------
Name: Mark T. Walton
Title: President
1523490
<PAGE>
EXHIBIT 10.29(d)
REVOLVING NOTE
$6,000,000 San Antonio, Texas December 12, 1996
FOR VALUE RECEIVED, TRAVIS BOATS & MOTORS, INC., a Texas corporation,
TRAVIS SNOWDEN MARINE, INC., a Texas corporation, TRAVIS BOATING CENTER
ARLINGTON, INC., a Texas corporation, FALCON MARINE, INC., a Texas corporation,
FALCON MARINE ABILENE, INC., a Texas corporation, TRAVIS BOATING CENTER
BEAUMONT, INC., a Texas corporation, TRAVIS BOATS & MOTORS BATON ROUGE, INC., a
Louisiana corporation, TBC ARKANSAS, INC., an Arkansas corporation, TBC
MANAGEMENT, Ltd., a Texas limited partnership, TBC MANAGEMENT, INC., a Delaware
corporation, TRAVIS BOATING CENTER LOUISIANA, INC., a Louisiana corporation,
TRAVIS BOATING CENTER TENNESSEE, INC., a Texas corporation, TRAVIS BOATING
CENTER ALABAMA, INC., a Texas corporation, RED RIVER MARINE ARKANSAS, INC., an
Arkansas corporation, TRAVIS BOATING CENTER LITTLE ROCK, INC., an Arkansas
corporation, TRAVIS BOATING CENTER GEORGIA, INC., a Texas corporation and TRAVIS
BOATING CENTER FLORIDA, INC., a Texas corporation (collectively "Borrowers"),
---------
hereby, jointly and severally, promise to pay to the order of HIBERNIA NATIONAL
BANK, a national banking association ("Lender"), at the offices of NATIONSBANK
------
OF TEXAS, N.A., a national banking association (the "Agent") at 300 Convent
-----
Street, San Antonio, Texas 78205, the principal sum of Six Million and No/100
Dollars ($6,000,000.00) (or the unpaid balance of all principal advanced against
this Note, if that amount is less), on or before the Termination Date for this
Note (as established by the Agreement), in lawful money of the United States of
America, together with interest on the unpaid principal balance of this Note
from day to day outstanding, in accordance with the terms and provisions of the
Agreement; provided, however, that in no event shall interest accrue hereunder
at a rate in excess of the Maximum Lawful Rate. Subject to the provisions
hereof limiting interest to the Maximum Lawful Rate, interest on Advances shall
be computed based on the number of days elapsed and 360-days per year or in the
case of interest accruing at the Maximum Lawful Rate, 365/366 days per year.
Advances of the principal indebtedness evidenced by this Note shall be made
pursuant to the Credit Agreement (as herein defined), which amounts may be
borrowed, repaid and reborrowed as provided in and subject to the terms of the
Credit Agreement. Each Advance made by Lender to Borrowers pursuant to the
Credit Agreement may be recorded by lender and, with respect to any transfer
hereof, endorsed on the grid attached hereto which is part of this Note. Any
failure by Lender to endorse the grid attached hereto shall not impair the
obligation of Borrowers to pay any amount due and owing hereunder.
All capitalized terms used herein, but not specifically defined, shall
have the same meanings set forth in the Agreement.
Principal and all accrued interest hereunder shall be due and payable
upon the terms and on the dates provided for in the Credit Agreement.
<PAGE>
After maturity of this Note or the occurrence of an Event of Default,
the outstanding principal balance of this Note shall, at the option of the
Required Lenders, bear interest at the Default Rate, as provided in the
Agreement.
If at any time the Applicable Rate shall be limited to the Maximum
Lawful Rate, any subsequent reductions in the Applicable Rate shall not reduce
the rate of interest on this Note below the Maximum Lawful Rate until the total
amount of interest accrued equals the amount of interest which would have
accrued if the Applicable Rate had at all times been in effect. In the event
that at maturity (stated or by acceleration), or at the final payment of the
Credit Facility, the total amount of interest paid or accrued on the Credit
Facility is less than the amount of interest which would have accrued if the
Applicable Rate had at all times been in effect with respect thereto, then at
such time, to the extent permitted by law, Borrowers shall pay to Agent, for the
ratable benefit of the Lenders, an amount equal to the difference between (a)
the lesser of the amount of interest which would have accrued if the Applicable
Rate had at all times been in effect and the amount of interest which would have
accrued if the Maximum Lawful Rate had at all times been in effect, and (b) the
amount of interest actually paid on the Credit Facility.
This Note has been executed and delivered pursuant to the terms of
that certain Revolving Credit Agreement (as the same may be modified, amended,
supplemented, extended or restated from time to time, the "Credit Agreement")
----------------
dated as of December 12, 1996, executed by and among Borrowers, Agent and the
Lenders (which includes the payee of this Note) and is one of the notes defined
therein as a "Note", the terms and provisions of the Credit Agreement related to
----
this Note being incorporated herein by reference for all purposes. The terms of
the Credit Agreement shall govern in the case of any inconsistency between such
terms and the terms hereof.
This Note is secured by the Security Agreement and all the other Loan
Documents, and all liens and security interests created or evidenced thereby.
Any holder shall be entitled to all benefits and remedies and security set forth
in the Credit Agreement and all the other Loan Documents.
The occurrence of a Default or an Event of Default, under and as
defined in the Credit Agreement, shall constitute, respectively, a Default or an
Event of Default under this Note, and the unpaid principal of and accrued
interest on this Note may be declared due and payable in the manner and with the
effect provided in the Credit Agreement.
Each Borrower and all sureties, endorsers, guarantors and any other
party now or hereafter liable for the payment of this Note in whole or in part,
hereby severally (i) waive demand, presentment for payment, notice of dishonor
and of nonpayment, protest, notice of protest, notice of intent to accelerate,
notice of acceleration and all other notice (except only for any notice that is
specifically required by the terms of the Credit Agreement or any other Loan
Document), filing of suit and diligence in collecting this Note or enforcing any
of the security herefor; (ii) agree to any substitution, subordination, exchange
or release of any such security or the release of any party primarily or
secondarily liable hereon; (iii) agree that the holder hereof shall not be
required first to institute suit or exhaust its remedies against any Borrower
<PAGE>
or others liable or to become liable hereon or to enforce its rights against
them or any security herefor; (iv) consent to any extension or postponement of
time of payment of this Note for any period or periods of time and to any
partial payments, before or after maturity, and to any other indulgences with
respect hereto, without notice thereof to any of them; and (v) submit (and waive
all rights to object) to personal jurisdiction in the State of Texas, and venue
in Bexar County, Texas, for the enforcement of any and all obligations under the
Loan Documents.
If any holder of this Note retains an attorney in connection with any
default or at maturity or to collect, enforce or defend this Note or any other
Loan Document in any lawsuit or in any probate, reorganization, bankruptcy or
other proceeding, or if any Borrower sues any holder of this Note in connection
with this Note or any other Loan Document and does not prevail, then Borrowers
agree to pay to each such holder, in addition to principal and interest, all
costs and expenses incurred by such holder in trying to collect this Note or in
any such suit or proceeding, including reasonable attorneys' fees as and to the
extent provided in the Credit Agreement.
Notwithstanding anything herein or in any other Loan Documents,
expressed or implied, to the contrary, in no event shall any interest rate
charged hereunder or under any of the other Loan Documents, or any interest
contracted for, collected or received by Lender or any holder hereof, exceed the
Maximum Lawful Rate. It is expressly stipulated and agreed to be the intent of
Borrowers and Lender at all times to comply with the applicable law governing
the maximum rate or amount of interest payable on or in connection with this
Note. If the applicable law is ever judicially interpreted so as to render
usurious any amount called for under this Note or under any of the other Loan
Documents, or contracted for, charged, taken, reserved or received with respect
to this Note, or if acceleration of the maturity of this Note, any prepayment by
Borrowers, or any other circumstance whatsoever, results in Lender having been
paid any interest in excess of that permitted by applicable law, then it is the
express intent of Borrowers and Lender that all excess amounts theretofore
collected by Lender be credited on the principal balance of this Note (or, if
this Note has been or would thereby be paid in full, refunded to Borrowers), and
the provisions of this Note and the other applicable Loan Documents immediately
be deemed reformed and the amounts thereafter collectible hereunder and
thereunder reduced, without the necessity of the execution of any new document,
so as to comply with the applicable law, but so as to permit the recovery of the
fullest amount otherwise called for hereunder and thereunder. The right to
accelerate the maturity of this Note does not include the right to accelerate
any interest which has not otherwise accrued on the date of such acceleration,
and Lender does not intend to collect any unearned interest in the event of
acceleration. All sums paid or agreed to be paid to Lender for the use,
forbearance or detention of the indebtedness evidenced hereby or by any other
Loan Document shall, to the extent permitted by applicable law, be amortized,
prorated, allocated and spread throughout the full term of such indebtedness
until payment in full so that the rate or amount of interest on account of such
indebtedness does not exceed the Maximum Lawful Rate. The term "applicable law"
--------------
as used herein shall mean the laws of the State of Texas, or any applicable
United States federal law to the extent that it permits Lender to contract for,
charge, take, reserve or receive a greater amount of interest than under Texas
law. The provisions of this paragraph shall control all agreements between
Borrowers and Lender.
Borrowers acknowledge and agree that the holder of this Note may, at
any time and from time to time, assign all or a portion of its interest in the
Credit Facility or transfer to an Eligible
<PAGE>
Assignee a participation interest in the Credit Facility, subject to and in
accordance with the terms and conditions of the Credit Agreement, including
Section 10.10 thereof.
- -------------
ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES
HERETO INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING TO THIS
NOTE OR ANY RELATED NOTES 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 OR 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 SHALL CONTROL. JUDGMENT UPON ANY ARBITRATION
AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY PARTY TO THE NOTE
MAY BRING AN ACTION, INCLUDING A SUMMARY OR EXPEDITED PROCEEDING, TO COMPEL
ARBITRATION OF ANY CONTROVERSY OR CLAIM TO WHICH THIS NOTE APPLIES IN ANY COURT
HAVING JURISDICTION OVER SUCH ACTION.
(A) SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN THE CITY OF
BORROWER'S DOMICILE AT THE TIME OF THE NOTE'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 AN
ADDITIONAL 60 DAYS.
(B) RESERVATION OF RIGHTS. NOTHING IN THIS NOTE SHALL BE DEEMED TO
(1) LIMIT THE APPLICABILITY OF ANY OTHERWISE APPLICABLE STATUTES OF LIMITATION
OR REPOSE AND ANY WAIVERS CONTAINED IN THIS NOTE; OR (II) BE A WAIVER BY THE
LENDER OF THE PROTECTION AFFORDED TO IT BY 12. U.S.C. (S)91 OR ANY SUBSTANTIALLY
EQUIVALENT STATE LAW; OR (III) LIMIT THE RIGHT OF THE LENDER HERETO (A) TO
EXERCISE SELF HELP REMEDIES SUCH AS (BUT NOT LIMITED TO) SETOFF, OR (B) TO
FORECLOSURE 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
LENDER MAY EXERCISE SUCH SELF HELP RIGHTS, FORECLOSURE UPON SUCH PROPERTY, OR
OBTAIN SUCH PROVISIONAL OR ANCILLARY REMEDIES BEFORE, DURING OR AFTER THE
PENDENCY OF ANY ARBITRATION PROCEEDING BROUGHT PURSUANT TO THIS NOTE. NEITHER
THE 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 SUCH ACTION, TO
<PAGE>
ARBITRATE THE MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH
REMEDIES.
THIS NOTE SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND
GOVERNED BY TEXAS LAW, EXCEPT TO THE EXTENT THAT THE LAWS OF ANOTHER
JURISDICTION GOVERN THE CREATION, PERFECTION OR ENFORCEMENT OF INTERESTS, OR THE
REMEDIES RELATED TO ANY PART OF THE COLLATERAL, OR TO THE EXTENT THAT UNITED
STATES FEDERAL LAW APPLIES PURSUANT TO SECTION 10.8 OF THE Credit Agreement OR
------------
OTHERWISE.
IN WITNESS WHEREOF, Borrower has duly executed this Note as of the
date first above written.
BORROWERS:
---------
TRAVIS BOATS & MOTORS, INC., a Texas corporation,
TRAVIS SNOWDEN MARINE, INC., A Texas corporation,
TRAVIS BOATING CENTER ARLINGTON, INC., a Texas
corporation, FALCON MARINE, INC., a Texas
corporation, FALCON MARINE ABILENE, INC., a Texas
corporation, TRAVIS BOATING CENTER BEAUMONT, INC.,
a Texas corporation, TRAVIS BOATING CENTER
TENNESSEE, INC., a Texas corporation, TRAVIS
BOATING CENTER ALABAMA, INC., a Texas corporation,
TRAVIS BOATING CENTER GEORGIA, INC., a Texas
corporation and TRAVIS BOATING CENTER FLORIDA,
INC., a Texas corporation
By: /s/ Mark T. Walton
-------------------------
Name: Mark T. Walton
Title: President
<PAGE>
TRAVIS BOATS & MOTORS BATON ROUGE, INC., a
Louisiana corporation and TRAVIS BOATING CENTER
LOUISIANA, INC., a Louisiana corporation
By: /s/ Mark T. Walton
-------------------------
Name: Mark T. Walton
Title: President
TBC ARKANSAS, INC., an Arkansas corporation, RED
RIVER MARINE ARKANSAS, INC., a Arkansas
corporation and TRAVIS BOATING CENTER LITTLE ROCK,
INC., a Arkansas corporation
By: /s/ Mark T. Walton
-------------------------
Name: Mark T. Walton
Title: President
TBC MANAGEMENT, INC., a Delaware corporation
By: /s/ Mark T. Walton
-------------------------
Name: Mark T. Walton
Title: President
TBC MANAGEMENT, LTD., a Texas limited partnership
By: TRAVIS BOATS & MOTORS, INC., a
Texas corporation, as General
Partner
By: /s/ Mark T. Walton
-------------------------
Name: Mark T. Walton
Title: President
1523494
<PAGE>
EXHIBIT 10.30
================================================================================
ASSET PURCHASE AGREEMENT
BY AND AMONG
TRAVIS BOATING CENTER TENNESSEE, INC.,
TRI-LAKES MARINE, INC.,
CHARLES R. BONDURANT, JOE BONDURANT
AND
TOM ED BONDURANT
DATED AS OF
NOVEMBER 1, 1996
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
----
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 Liquidation..................................... 2
------------------------
2.3 Allocation of Consideration.................................. 2
---------------------------
2.4 Bulk Sales Act............................................... 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 Seller..................... 3
4.1 Organization and Qualification............................... 3
-----------------------------
4.2 Authority and Validity....................................... 3
----------------------
4.3 No Breach or Violation....................................... 3
----------------------
4.4 Assets....................................................... 3
------
4.5 Contracts and Commitments.................................... 4
-------------------------
4.6 Compliance with Law.......................................... 4
-------------------
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........................................ 5
---------------------
4.12 Finders and Brokers.......................................... 5
-------------------
4.13 Access and Notice............................................ 5
-----------------
4.14 Disclosure................................................... 5
----------
Section 5. Representations and Warranties of Buyer...................... 6
5.1 Organization and Qualification............................... 6
------------------------------
5.2 Authority and Validity....................................... 6
----------------------
5.3 No Breach or Violation....................................... 6
----------------------
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 Seller............ 6
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7.2 Conditions to Obligations of Buyer........................... 7
----------------------------------
7.3 Conditions to Obligations of Seller.......................... 7
-----------------------------------
7.4 Waiver of Conditions......................................... 8
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Section 8. Survival of Representations and Warranties; Indemnification.. 8
8.1 Survival of Representations and Warranties................... 8
------------------------------------------
8.2 Indemnification by Seller.................................... 8
-------------------------
8.3 Indemnification by Buyer..................................... 9
------------------------
8.4 Third Party Claims........................................... 9
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8.5 Offset....................................................... 9
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Section 9. Post-Closing Covenants....................................... 10
<PAGE>
TABLE OF CONTENTS
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(Continued)
Page
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9.1 Transfer Taxes............................................... 10
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9.2 Employment of Charles R. Bondurant........................... 10
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9.3 Use of Seller's Name......................................... 10
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9.4 Confidentiality.............................................. 10
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9.5 Consignment and Repair....................................... 10
----------------------
9.6 Access to Records............................................ 10
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Section 10. Definitions.................................................. 10
10.1 Accessories.................................................. 10
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10.2 Affiliate................................................... 10
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10.3 Assets...................................................... 11
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10.4 Boat Show Rights............................................. 11
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10.5 Boat Shows................................................... 11
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10.6 Business..................................................... 11
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10.7 Deposits..................................................... 11
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10.8 Encumbrance.................................................. 11
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10.9 Governmental Authority....................................... 11
----------------------
10.10 Intangibles.................................................. 11
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10.11 Legal Requirement............................................ 11
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10.12 Miscellaneous Assets......................................... 11
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10.13 Net Cost..................................................... 11
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10.14 New Boats, Motors, and Trailers.............................. 11
-------------------------------
10.15 Parts........................................................ 11
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10.16 Permitted Encumbrances....................................... 11
----------------------
10.17 Person....................................................... 12
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10.18 Used Boats, Motors, and Trailers............................. 12
--------------------------------
10.19 Other Definitions............................................ 12
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Section 11. Miscellaneous................................................ 12
11.1 Parties Obligated and Benefited.............................. 12
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11.2 Notices...................................................... 12
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11.3 Attorneys' Fees.............................................. 13
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11.4 Right to Specific Performance................................ 13
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11.5 Waiver....................................................... 13
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11.6 Captions..................................................... 13
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11.7 Choice of Law................................................ 14
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11.8 Terms........................................................ 14
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11.9 Rights Cumulative............................................ 14
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11.10 Further Actions.............................................. 14
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11.11 Time......................................................... 14
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11.12 Counterparts................................................. 14
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11.13 Entire Agreement............................................. 14
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11.14 Severability................................................. 14
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11.15 Construction................................................. 14
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11.16 Expenses..................................................... 14
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<PAGE>
Exhibits and Schedules
----------------------
Exhibits A, A-1, A-2, A-3 Promissory Notes
Exhibit B Certificate (Seller)
Exhibit C Bill of Sale
Exhibit D Assignment and Assumption Agreement
Exhibits E-1, E-2, E-3 Non-Competition Agreement (Individuals)
Exhibit F Non-Competition Agreement (Seller)
Exhibit G Certificate (Buyer)
Exhibit H Opinion of Seller's Counsel
Schedule 1.1 Assets
Schedule 3.1 Seller's Contracts
Schedule 4.1 Capitalization
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>
EXHIBIT 10.30
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") is made as of November 1, 1996,
by and among Travis Boating Center Tennessee, Inc., a Texas corporation
("Buyer"), Tri-Lakes Marine, Inc., a Tennessee corporation ("Seller"), and
Charles R. Bondurant, Joe Bondurant and Tom Ed Bondurant, all individuals living
in Tennessee (collectively, "Owner").
Recitals
--------
WHEREAS, Seller is engaged in the business of retail marine products sales
and service; and
WHEREAS, Buyer desires to purchase, and Seller desires to sell, certain of
Seller's assets used or held for use in the Business as conducted by Seller;
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, Seller will sell to Buyer, and Buyer will purchase
from Seller, all of Seller's rights, title and interest in, to and under the
following Assets: (i) the New Boats, Motors, and Trailers listed on Schedule
1.1, (ii) the Used Boats, Motors, and Trailers listed on Schedule 1.1, (iii) all
Parts and Accessories, (iv) all Miscellaneous Assets listed on Schedule 1.1, (v)
all Intangibles, (vi) all Deposits, and (vii) Boat Show Rights.
1.1.2 Attached hereto as Schedule 1.1 is a list of the
Assets.
Section 2. Consideration.
2.1 Purchase Price. Buyer will pay the purchase price for the
--------------
Assets in the amounts and in the manner set forth in this Section 2 (the
---------
"Purchase Price"):
2.1.1 New Boats, Motors, and Trailers valued at Net Cost:
$1,419,838.63, payable to Seller in immediately available funds at Closing.
2.1.2 Used Boats, Motors, and Trailers: $0.00, payable to
Seller in immediately available funds at Closing.
2.1.3 Accessories: The lesser of the manufacturer's 1996
wholesale published price or invoice amount, after rebates and credits, for
each item identified in the physical inventory made jointly by Buyer and
Seller. $359,135.19.
2.1.4 Miscellaneous Assets: $165,195.76.
2.1.5 Intangibles, Deposits, Boat Show Rights and other
Assets: $1458,084. A portion of this amount will be allocated to the value
of the Non-Competition Agreement to be executed by Seller and Owners.
<PAGE>
2.1.6 The aggregate amount payable to Seller for the assets
described in Sections 2.1.3, 2.1.4 and 2.1.5 is payable as follows:
-------------------------------
$267,687.00 is payable in immediately available funds at Closing and the
remainder is payable pursuant to a promissory note substantially in the
form attached as Exhibit A.
2.1.7 As consideration for the Non-Competition Agreement to
be executed by Charles R. Bondurant, $69,425.00 is payable in cash and
$68,000.00 is payable to him pursuant to a promissory note substantially in
the form attached as Exhibit A-1. As consideration for the Non-Competition
Agreement to be executed by Joe Bondurant, $69,425.00 is payable in cash
and $68,000.00 is payable to him pursuant to a promissory note
substantially in the form attached as Exhibit A-2. As consideration for the
Non-Competition Agreement to be executed by Tom Ed Bondurant, $34,712.60 is
payable in cash and $34,000.00 is payable to him pursuant to a promissory
note substantially in the form attached as Exhibit A-3 (these three notes
and the note described in Section 2.1.6, collectively, the "Promissory
-------------
Notes".)
2.2 Post-Closing Liquidation.
------------------------
2.2.1 Seller may ask Buyer to serve as broker for any new or
used boats, motors and trailers not purchased by Buyer. Seller will
establish an acceptable selling price for each item, which price will be
agreeable to Buyer, and upon the sale of such items Buyer will pay Seller
the sale proceeds, retaining the greater of: (i) ten percent (10%) of the
actual sales price, and (ii) the excess of the actual sales price over the
acceptable selling price established by Seller.
2.2.2 Seller will bear the risk for, and will remain
responsible for insuring all boats, motors, trailers, and other assets not
purchased by Buyer and left on Buyer's premises.
2.3 Allocation of Consideration. The consideration payable by
---------------------------
Buyer under this Agreement will be allocated among the Assets as set forth in
Section 2.1. Buyer and Seller agree to be bound by such 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.
2.4 Bulk Sales Act. Buyer and Seller waive compliance with the
--------------
provisions of the Tennessee Bulk Sales Act with respect to the transactions
contemplated by this Agreement, subject to Section 8.2.1(v).
----------------
Section 3. Assumed Liabilities and Excluded Assets.
3.1 Assignment and Assumption. Seller will assign to Buyer, and
-------------------------
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, including the
Boat Show Rights (the "Seller's Contracts"), and (b) warranty repair service on
boats, motors, and trailers sold by Seller prior to or on the Effective Date,
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) Seller
and Owner 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 Seller 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 Seller, will consist of the following: cash,
accounts receivable, insurance policies, books and records, and other assets not
listed on Schedules 1.1, 3.1 or 4.4.2.
<PAGE>
Section 4. Representations and Warranties of Seller.
To induce Buyer to enter into this Agreement, Seller and Owner
represent and warrant to Buyer, as of the Effective Date, as follows:
4.1 Organization and Qualification. Seller is a corporation duly
------------------------------
organized, validly existing and in good standing under the laws of the State of
Tennessee and has 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. Seller is duly qualified or licensed to
do business and is 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 Seller or on the validity,
binding effect or enforceability of this Agreement. Set forth on Schedule 4.1
is the name and identity of each Person who owns of record or beneficially any
common stock, capital stock, or other securities of Seller, has any right to
vote with the owners of Seller, or has the right to acquire any such securities
or rights. Schedule 4.1 also sets forth the amounts of all such securities or
rights and the percentage that each Person's securities or rights bears to the
whole.
4.2 Authority and Validity. Seller has all requisite 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 Seller of, the performance by Seller of its obligations under, and
the consummation by Seller of the transactions contemplated by this Agreement
have been duly authorized by all requisite action of Seller. This Agreement has
been duly executed and delivered by Seller and is the valid and binding
obligation of Seller, enforceable against Seller 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 Seller will not: (a) violate any provision of
the charter or bylaws of Seller; (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 Seller under, or (iv) result in the creation or imposition of
any Encumbrance under, any Seller contract or agreement or any other instrument
evidencing any of the Assets or any instrument or other agreement to which
Seller is a party or by which Seller 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 Seller.
4.4 Assets.
------
4.4.1 Seller has exclusive, good and marketable title to the
Assets claimed by Seller. The Assets are free and clear of all
Encumbrances of any kind or nature, except (a) Permitted Encumbrances and
(b) Encumbrances disclosed on Schedule 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 Seller from any other Person. All
the New Boats, Motors, and Trailers, Used Boats, Motors, and Trailers,
Accessories, Leasehold Improvements, Parts and Miscellaneous Assets are in
good and operable condition and repair, ordinary wear and tear excepted,
and have been maintained in accordance with all applicable safety codes.
4.4.2 Seller has adopted, used, is using, and is the owner
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 Seller to identify and distinguish Seller's 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
<PAGE>
Tennessee or in the United States Patent and Trademark Office. Except as
set forth on Schedule 4.4.2, Seller has full title and ownership of the
Intangibles. Neither Owner nor Seller has any knowledge of any
infringement of Seller's 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.
4.5 Contracts and Commitments. Seller has 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, including the Boat Show
Rights, is valid and enforceable in accordance with its terms; Seller is, and to
the knowledge of Seller and Owner, all other parties thereto are, in compliance
in all material respects with the provisions thereof; Seller is not, and to the
knowledge of Seller and Owner, no other party thereto, is in default in the
performance, observance or fulfillment of any material obligation, covenant 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 Seller and Owner, contains
any contractual requirement with which there is a reasonable likelihood the
Seller, the Buyer, or any other party thereto will be unable to comply.
4.6 Compliance with Law. The ownership, leasing and use of the
-------------------
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. Seller has not received notice claiming a
violation by Seller or the Business of any Legal Requirement applicable to
Seller or the Business as it is currently conducted and to Seller's 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 Seller's unaudited balance sheets for the fiscal years ended
December 31, 1993, 1994 and 1995, together with its unaudited statements of
income and cash flows for the fiscal years or periods then ended, and its
unaudited balance sheet as of May 31, 1996, together with its unaudited
statement of income for the 5 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 Seller's 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, and there has been no material adverse
change in, and no events have occurred which are 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 Seller's best knowledge, threatened, involving or
affecting all or any part of the Business, the Assets or Seller.
4.9 Tax Returns; Other Reports. Seller has delivered to Buyer
--------------------------
true and correct copies of its U.S. and Tennessee tax returns for the fiscal
years ended December 31, 1993 and 1994. Seller has 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 Seller 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 Seller engaged in the
Business, and their current hourly wages or monthly salaries and other
compensation. Seller has complied in all respects with all Legal Requirements
relating to the employment of
<PAGE>
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 Seller
or any Affiliate of Seller. 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 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 used by Seller has,
---------------------
during Seller's use thereof, been maintained, and all activities of Seller, its
employees, agents, contractors, lessees and invites thereon have been conducted,
in compliance with all applicable environmental laws; (ii) Seller has 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) Seller has not received written notification from
any Person or entity that it is (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 Seller's operation of the Business or Seller's generation,
transfer, storage, use, release, transportation or disposal of hazardous
materials in connection with the Business; (iv) Seller has not removed any
underground storage tanks located on such property, (v) 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; (vi) 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 (vii) Seller has made available to Buyer true and correct copies of all
environmental reports or inspections delivered to Seller or prepared at the
request of Seller 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 will be the liability of the
party incurring the liability.
4.13 Access and Notice. Seller and Owner will permit Buyer and
-----------------
its authorized representatives access to, and make available for inspection, all
of the assets and Business of Seller, including employees, customers and
suppliers, and permit Buyer and its authorized representatives to inspect and
make copies of all documents, records and information with respect to the
Business or the Assets as Buyer or its representatives may request. Seller and
Owner will promptly notify Buyer in writing of (a) any notice or communication
relating to a default or event that, with notice or lapse of time or both, could
become a default, under any contract, commitment or obligation to which Seller
is a party, or relating to the Business or the Assets, and (b) any adverse
change in the Seller's or the Business' financial condition or the condition of
the Assets.
4.14 Disclosure. No representation or warranty by Seller in this
----------
Agreement or in any Schedule or Exhibit to this Agreement, or any statement,
list or certificate furnished or to be furnished by Seller 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.
<PAGE>
Section 5. Representations and Warranties of Buyer
To induce Seller to enter into this Agreement, Buyer represents and
warrants to Seller, 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
Texas 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 will be in Winchester, Tennessee, at 10:00 a.m. local time on
November 1, 1996 ("Closing Date"). The transactions will be effective as of
November 1, 1996 ("Effective Date").
Section 7. Conditions to Closing.
7.1 Conditions to the Obligations of Buyer and Seller. 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.
<PAGE>
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 Seller 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 Seller at or prior to
the Closing and has delivered to Buyer a certificate, dated the Closing
Date, signed by Seller's President, to such effect, in substantially the
form attached as Exhibit B.
7.2.2 Seller has 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; and
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.
7.2.3 By the Closing Date, Buyer will have completed a due
diligence review of the Business, operations and financial statements of
Seller, the results of which are satisfactory to Buyer in its sole
discretion.
7.2.4 Charles R. Bondurant, Joe Bondurant and Tom Ed
Bondurant have each signed and delivered to Buyer a Non-Competition
Agreement in substantially the form attached as Exhibits E-1, E-2 and E-3,
respectively, and Seller has signed and delivered to Buyer a Non-
Competition Agreement in substantially the form attached as Exhibit F
(collectively, the "Non-Competition Agreements").
7.2.5 Seller has 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 Seller and the Assets issued by appropriate Tennessee state
taxing authorities as of a date no earlier than 10 days prior to the
Closing.
7.2.6 Seller has provided Buyer with a copy of amendments to
its charter, certified by the Secretary of State of the State of Tennessee,
that it has changed its name from "Tri-Lakes Marine, Inc."
7.2.7 Seller has provided Buyer with the original invoices
evidencing the cost of the New Boats, Motors, and Trailers, Parts and
Accessories, and an inventory sheet detailing these items.
7.2.8 Buyer has received the opinion of Copeland, Conley &
Hazard in substantially the form attached as Exhibit H.
7.2.9 Seller has executed a lease for the site of the
Business with Tim's Ford Marina, Inc. ("Landlord"), on terms acceptable to
Buyer in its sole discretion, including waiver by Landlord of any rights it
may have in the inventory of the Business, to the extent such inventory
does not constitute a part of the real property subject to the lease.
7.3 Conditions to Obligations of Seller. The obligations of
-----------------------------------
Seller to consummate the transactions contemplated by this Agreement to take
place at the Closing are subject to the satisfaction or waiver by Seller, to the
extent permitted by applicable law, at or prior to the Closing Date, of each of
the following conditions:
<PAGE>
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 Seller a certificate, dated the Closing
Date, signed by Buyer's President, to such effect, in substantially the
form attached as Exhibit G.
7.3.3 Buyer has executed and delivered to Seller 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 the Promissory Notes, guaranteed by Travis
Boats & Motors, Inc.;
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 Seller in this Agreement and in the documents
and instruments to be delivered by Seller 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 Seller before such expiration or
about which Seller has 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 Seller or Buyer pursuant to this Agreement will survive the Closing
and will continue in full force and effect without limitation.
8.2 Indemnification by Seller. Seller and Owner will 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:
8.2.1 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 Seller in this
Agreement, (ii) any breach of any then surviving covenant, agreement or
obligation of Seller contained in this Agreement, (iii) any third party
claim with respect to any occurrence prior to or on the Effective Date,
without regard to whether such third party claim with respect to such
occurrence is asserted before or after the Effective Date, including any
matter described on Schedule 4.8, (iv) any liability or obligation of
Seller 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 Seller 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.
<PAGE>
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 Buyer. Buyer will indemnify, defend and
------------------------
hold harmless Seller and Seller's officers, employees, agents, successors and
assigns, from and against:
8.3.1 all losses, damages, liabilities, deficiencies or
obligations of or to Seller 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
8.3.2 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 8.3.1(i) and
--------
under one or more of clauses 8.3.1(ii) or 8.3.1(iii) of this Section 8.3,
--------- ---------- -----------
Seller's rights to pursue its claim under clauses 8.3.1(ii) or 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 Third Party Claims. Promptly (and in any event within 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 15 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 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 8.4. 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.
8.5 Offset. Buyer will have a right of offset in the Promissory
------
Notes with respect to any matter for which Buyer is indemnified under
Section 8.2.
- -----------
<PAGE>
Section 9. Post-Closing Covenants.
9.1 Transfer Taxes. In the event that any Governmental Authority
--------------
of the State of Tennessee or of any municipality, parish or other subdivision
thereof shall at any time impose or otherwise require or demand payment by or
from either Seller 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 Seller's sale or transfer to Buyer of the Assets, Seller will be
responsible for the payment.
9.2 Employment of Charles R. Bondurant. Buyer will offer the
----------------------------------
position of General Manager of the Winchester, Tennessee store to Charles R.
Bondurant. As General Manager, he will have the use of a company-owned vehicle
(selected by him, subject to Buyer's approval) for all business related
purposes.
9.3 Use of Seller's Name. Seller may continue use of its
--------------------
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 Seller will cease all such usage. Seller will
assign unto Buyer all right, title, and interest in and to the Intangibles,
together with the goodwill of the Business symbolized by and connected with the
use of 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.
9.4 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 parties. 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 another party obtained pursuant to this Agreement. Notwithstanding
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 parties 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.
9.5 Consignment and Repair. In the event Seller or Owner is
----------------------
required to retake possession of any products sold prior to the Effective Date,
Buyer will accept the products on consignment from Seller or Owner. Any repairs
will be pre-approved by Seller and will be paid for by Seller or Owner.
9.6 Access to Records. Seller will allow Buyer reasonable access
-----------------
to its records for a period of two 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 Accessories. All accessories inventoried on the Effective
-----------
Date.
10.2 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.
<PAGE>
10.3 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;
Used Boats, Motors, and Trailers; Parts; Accessories; Miscellaneous Assets;
Intangibles; Deposits; Boat Show Rights; and Seller's Contracts, more
particularly described in Section 1.1 and on Schedules 1.1, 3.1 and 4.4.2), that
-----------
are used, or held for use, by Seller or Owner in the Business and in which
Seller or Owner has any right, title or interest (or in which Seller or Owner
hereafter acquires any right, title or interest on or before the Closing Date),
but excluding all Excluded Assets.
10.4 Boat Show Rights. All agreements for space at Boat Shows,
----------------
including common stock and other ownership rights in corporations, partnerships,
and other types of entities holding Boat Shows.
10.5 Boat Shows. All boat shows in Tennessee and all boat shows
----------
at which Seller has had a booth or made a presentation in any of the last five
(5) years.
10.6 Business. The retail sales and service of boats, motors,
--------
trailers, marine accessories and water sporting goods at the store located in
Winchester, Tennessee and at Boat Shows attended by the Seller.
10.7 Deposits. All customer deposits relating to customer special
--------
orders as of the Effective Date.
10.8 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).
10.9 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.
10.10 Intangibles. All intangible assets, including trademarks,
-----------
service marks, copyrights (collectively, "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 names
"Tri-Lakes Marine, Inc." and all derivative uses of such names, and all rights
granted to Buyer pursuant to the Non-Competition Agreements.
10.11 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.
10.12 Miscellaneous Assets. All furniture, fixtures, vehicles,
--------------------
equipment and other assets set forth on Schedule 1.1.
10.13 Net Cost. The actual net cost to Seller of an item, after
--------
all rebates and credits have been issued, including freight charges (if any)
that have been paid by Seller to the manufacturer.
10.14 New Boats, Motors, and Trailers. All new boats, motors, and
-------------------------------
trailers described on Schedule 1.1.
10.15 Parts. All parts inventoried on the Effective Date.
-----
10.16 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
<PAGE>
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 the conduct of the
Business and (ii) the classification of any item as a Permitted Encumbrance will
not affect any liability Seller may have for such item, including pursuant to
any indemnity obligation under this Agreement.
10.17 Person. Any natural person, corporation, partnership, trust,
------
unincorporated organization, association, limited liability company,
Governmental Authority or other entity.
10.18 Used Boats, Motors, and Trailers. All used boats, motors,
--------------------------------
and trailers described on Schedule 1.1.
10.19 Other Definitions. The following terms are defined in the
-----------------
Sections indicated:
Term Section
---- -------
Action 8.4
Assumed Liabilities 3.1
Closing 6.1
Closing Date 6.1
Effective Date 6.1
ERISA 4.10
Excluded Assets 3.2
Financial Statements 4.7
Indemnifying Party; Indemnified Party 8.4
Marks 10.10
Non-Competition Agreements 7.2.4
Promissory Notes 2.1
Purchase Price 2.1
Seller's Contracts 3.1
Survival Period 8.1
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 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:
<PAGE>
To Buyer at:
Travis Boating Center Tennessee, 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 Seller and Owner at
Tri-Lakes Marine, Inc.
38 Marina Lane
Winchester, Tennessee 37398
With a copy (which will not constitute notice) transmitted by
telecopier to:
Copeland, Conley & Hazard
111 West Grundy Street
P.O. Box 176
Tullahoma, Tennessee 37388
Attention: Tom Copeland
Telecopy: 615/455-1753
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.
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. Seller acknowledges 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 Seller of its
obligations under this Agreement, and Seller 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. Neither this Agreement nor any of its provisions may
------
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.
<PAGE>
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 Texas, without regard to the conflicts of laws rules of
Texas. Any litigation resulting from any dispute among the parties must be
filed in Travis County, Texas.
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. Seller 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.
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 into 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 of this Agreement. 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 benefited by such provision or any other
provisions of this Agreement.
11.15 Construction. This Agreement has been negotiated by Buyer
------------
and Seller 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.
<PAGE>
The parties have executed this Agreement as of the day and year first above
written.
BUYER:
-----
TRAVIS BOATING CENTER TENNESSEE, INC.
By: /s/ Mark Walton
------------------------
Mark Walton
------------------------
President
------------------------
SELLER:
------
TRI-LAKES MARINE, INC.
By: /s/ Charles R. Bondurant
-------------------------
Charles R. Bondurant
President
OWNER:
-----
/s/ Charles R. Bondurant
-----------------------------
CHARLES R. BONDURANT
/s/ Joe Bondurant
-----------------------------
JOE BONDURANT
/s/ Tom Ed Bondurant
-----------------------------
TOM ED BONDURANT
<PAGE>
EXHIBIT A
PROMISSORY NOTE
$270,000.00 November 1, 1996
FOR VALUE RECEIVED, the undersigned, Travis Boating Center Tennessee, Inc.,
a Texas corporation ("Maker"), promises to pay to the order of Tri-Lakes Marine,
Inc. ("Payee"), at Payee's address at _______________________________________,
______________, the principal sum of
________________________________________________ and ____/100 DOLLARS
($___________.____), together with simple interest thereon from the date hereof
until maturity, at the rate of Eight and One-Quarter percent (8.25%) per annum.
After maturity until paid, interest will accrue on the principal outstanding at
the rate of ____________ percent (____%) per annum. This Note is delivered
pursuant to the Asset Purchase Agreement dated as of November 1, 1996 among
Maker, Payee and others (the "Purchase Agreement"). Principal and interest are
payable in sixty (60) equal monthly installments of
____________________________________ Dollars ($ _________.____) and a final
installment of ___________________________________ Dollars ($ _________.____),
the first of which is due and payable on March 30, 1997, and the remainder of
which are due and payable on the last day of each successive month.
Maker reserves the right to prepay this Note in whole or in part at any
time prior to maturity without penalty. Any prepayment will be applied first
toward the payment of accrued interest and next to the payment of principal.
Maker and all endorsers, guarantors and sureties of this Note severally (i)
waive presentment for payment, demand, notice of intent to accelerate, notice of
acceleration, protest and notice of protest, notice of dishonor and diligence in
collecting and the bringing of suit against any other party, and (ii) agree to
all renewals, extensions, partial payments, releases and substitutions of
security, in whole or in part, with or without notice, before or after maturity.
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, will become due and payable. No delay in the
exercise of the option of acceleration will 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, Maker agrees to pay all costs of collection and reasonable
attorneys' fees.
Maker will have the right to offset, against any amounts due and payable
under this Note, any sums with respect to any matter for which Maker is
indemnified under Section 8.2 of the
<PAGE>
Purchase Agreement. This Note shall not be assigned by Payee without the
written consent of Maker.
It is further agreed and declared that this Note is made and executed
under, and in all respects is to be construed and enforced in accordance with,
the laws of the State of Texas and the United States of America.
Travis Boating Center Tennessee, INC.
By:
------------------------------
------------------------------
President
------------------------------
GUARANTY
--------
The undersigned hereby guarantees the prompt payment when due, and at all
times thereafter, of all of Maker's indebtedness evidenced by this Note,
including interest thereon and costs of collection and reasonable attorneys'
fees incurred by the holder of this Note by reason of default on this Guaranty.
This Guaranty will not terminate until this Note has been paid in full.
TRAVIS BOATS & MOTORS, INC.,
a Texas corporation
By:
------------------------------
------------------------------
------------------------------
Date:
-------------------------
<PAGE>
EXHIBIT A-1
PROMISSORY NOTE
$68,000.00 November 1, 1996
---------
FOR VALUE RECEIVED, the undersigned, Travis Boating Center Tennessee, Inc.,
a Texas corporation ("Maker"), promises to pay to the order of Charles R.
Bondurant ("Payee"), at Payee's address at
_______________________________________, ______________, the principal sum of
________________________________________________ and ____/100 DOLLARS
($___________.____), together with simple interest thereon from the date hereof
until maturity, at the rate of Eight and One-Quarter percent (8.25%) per annum.
After maturity until paid, interest will accrue on the principal outstanding at
the rate of ____________ percent (____%) per annum. This Note is delivered
pursuant to the Asset Purchase Agreement dated as of November 1, 1996 among
Maker, Payee and others (the "Purchase Agreement"). Principal and interest are
payable in sixty (60) equal monthly installments of
____________________________________ Dollars ($ _________.____) and a final
installment of ___________________________________ Dollars ($ _________.____),
the first of which is due and payable on March 30, 1997, and the remainder of
which are due and payable on the last day of each successive month.
Maker reserves the right to prepay this Note in whole or in part at any
time prior to maturity without penalty. Any prepayment will be applied first
toward the payment of accrued interest and next to the payment of principal.
Maker and all endorsers, guarantors and sureties of this Note severally (i)
waive presentment for payment, demand, notice of intent to accelerate, notice of
acceleration, protest and notice of protest, notice of dishonor and diligence in
collecting and the bringing of suit against any other party, and (ii) agree to
all renewals, extensions, partial payments, releases and substitutions of
security, in whole or in part, with or without notice, before or after maturity.
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, will become due and payable. No delay in the
exercise of the option of acceleration will 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, Maker agrees to pay all costs of collection and reasonable
attorneys' fees.
Maker will have the right to offset, against any amounts due and payable
under this Note, any sums with respect to any matter for which Maker is
indemnified under Section 8.2 of the
<PAGE>
Purchase Agreement. This Note shall not be assigned by Payee without the
written consent of Maker.
It is further agreed and declared that this Note is made and executed
under, and in all respects is to be construed and enforced in accordance with,
the laws of the State of Texas and the United States of America.
TRAVIS BOATING CENTER TENNESSEE, INC.
By:
------------------------------
------------------------------
------------------------------
GUARANTY
--------
The undersigned hereby guarantees the prompt payment when due, and at all
times thereafter, of all of Maker's indebtedness evidenced by this Note,
including interest thereon and costs of collection and reasonable attorneys'
fees incurred by the holder of this Note by reason of default on this Guaranty.
This Guaranty will not terminate until this Note has been paid in full.
TRAVIS BOATS & MOTORS, INC.,
a Texas corporation
By:
------------------------------
------------------------------
------------------------------
Date:
-------------------------
<PAGE>
EXHIBIT A-2
PROMISSORY NOTE
$68,000.00 November 1, 1996
FOR VALUE RECEIVED, the undersigned, Travis Boating Center Tennessee, Inc.,
a Texas corporation ("Maker"), promises to pay to the order of Joe Bondurant
("Payee"), at Payee's address at _______________________________________,
______________, the principal sum of
________________________________________________ and ____/100 DOLLARS
($___________.____), together with simple interest thereon from the date hereof
until maturity, at the rate of Eight and One-Quarter percent (8.25%) per annum.
After maturity until paid, interest will accrue on the principal outstanding at
the rate of ____________ percent (____%) per annum. This Note is delivered
pursuant to the Asset Purchase Agreement dated as of November 1, 1996 among
Maker, Payee and others (the "Purchase Agreement"). Principal and interest are
payable in sixty (60) equal monthly installments of
____________________________________ Dollars ($ _________.____) and a final
installment of ___________________________________ Dollars ($ _________.____),
the first of which is due and payable on March 30, 1997, and the remainder of
which are due and payable on the last day of each successive month.
Maker reserves the right to prepay this Note in whole or in part at any
time prior to maturity without penalty. Any prepayment will be applied first
toward the payment of accrued interest and next to the payment of principal.
Maker and all endorsers, guarantors and sureties of this Note severally (i)
waive presentment for payment, demand, notice of intent to accelerate, notice of
acceleration, protest and notice of protest, notice of dishonor and diligence in
collecting and the bringing of suit against any other party, and (ii) agree to
all renewals, extensions, partial payments, releases and substitutions of
security, in whole or in part, with or without notice, before or after maturity.
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, will become due and payable. No delay in the
exercise of the option of acceleration will 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, Maker agrees to pay all costs of collection and reasonable
attorneys' fees.
Maker will have the right to offset, against any amounts due and payable
under this Note, any sums with respect to any matter for which Maker is
indemnified under Section 8.2 of the
<PAGE>
Purchase Agreement. This Note shall not be assigned by Payee without the
written consent of Maker.
It is further agreed and declared that this Note is made and executed
under, and in all respects is to be construed and enforced in accordance with,
the laws of the State of Texas and the United States of America.
TRAVIS BOATING CENTER TENNESSEE, INC.
By: _________________________________
___________________________
___________________________
GUARANTY
--------
The undersigned hereby guarantees the prompt payment when due, and at all
times thereafter, of all of Maker's indebtedness evidenced by this Note,
including interest thereon and costs of collection and reasonable attorneys'
fees incurred by the holder of this Note by reason of default on this Guaranty.
This Guaranty will not terminate until this Note has been paid in full.
TRAVIS BOATS & MOTORS, INC.,
a Texas corporation
By: ______________________________
___________________________
___________________________
Date:
<PAGE>
EXHIBIT A-3
PROMISSORY NOTE
$34,000.00 November 1, 1996
FOR VALUE RECEIVED, the undersigned, Travis Boating Center Tennessee, Inc.,
a Texas corporation ("Maker"), promises to pay to the order of Tom Ed Bondurant
("Payee"), at Payee's address at _______________________________________,
______________, the principal sum of
________________________________________________ and ____/100 DOLLARS
($___________.____), together with simple interest thereon from the date hereof
until maturity, at the rate of Eight and One-Quarter percent (8.25%) per annum.
After maturity until paid, interest will accrue on the principal outstanding at
the rate of ____________ percent (____%) per annum. This Note is delivered
pursuant to the Asset Purchase Agreement dated as of November 1, 1996 among
Maker, Payee and others (the "Purchase Agreement"). Principal and interest are
payable in sixty (60) equal monthly installments of
____________________________________ Dollars ($ _________.____) and a final
installment of ___________________________________ Dollars ($ _________.____),
the first of which is due and payable on March 30, 1997, and the remainder of
which are due and payable on the last day of each successive month.
Maker reserves the right to prepay this Note in whole or in part at any
time prior to maturity without penalty. Any prepayment will be applied first
toward the payment of accrued interest and next to the payment of principal.
Maker and all endorsers, guarantors and sureties of this Note severally (i)
waive presentment for payment, demand, notice of intent to accelerate, notice of
acceleration, protest and notice of protest, notice of dishonor and diligence in
collecting and the bringing of suit against any other party, and (ii) agree to
all renewals, extensions, partial payments, releases and substitutions of
security, in whole or in part, with or without notice, before or after maturity.
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, will become due and payable. No delay in the
exercise of the option of acceleration will 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, Maker agrees to pay all costs of collection and reasonable
attorneys' fees.
Maker will have the right to offset, against any amounts due and payable
under this Note, any sums with respect to any matter for which Maker is
indemnified under Section 8.2 of the
<PAGE>
Purchase Agreement. This Note shall not be assigned by Payee without the
written consent of Maker.
It is further agreed and declared that this Note is made and executed
under, and in all respects is to be construed and enforced in accordance with,
the laws of the State of Texas and the United States of America.
TRAVIS BOATING CENTER TENNESSEE, INC.
By: ______________________________
___________________________
___________________________
GUARANTY
--------
The undersigned hereby guarantees the prompt payment when due, and at all
times thereafter, of all of Maker's indebtedness evidenced by this Note,
including interest thereon and costs of collection and reasonable attorneys'
fees incurred by the holder of this Note by reason of default on this Guaranty.
This Guaranty will not terminate until this Note has been paid in full.
TRAVIS BOATS & MOTORS, INC.,
a Texas corporation
By: ______________________________
___________________________
___________________________
Date:
<PAGE>
EXHIBIT C
BILL OF SALE
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, Tri-Lakes Marine,
Inc., an Alabama corporation ("Seller"), for and in consideration of the payment
of such good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, and pursuant to the Asset Purchase Agreement (the "Purchase
Agreement"), made as of November 1, 1996 by and among Seller, TRAVIS BOATING
CENTER TENNESSEE, INC., a Texas corporation ("Purchaser"), Charles R.
Bondurant, Joe Bondurant, and Tom Ed Bondurant, does hereby transfer, grant,
bargain, sell and deliver to Purchaser, its successors and assigns, the assets
of Seller that are listed on Schedule 1.1 attached hereto, the Intangibles, the
------------
Deposits and the Boat Show Rights, all as the same shall exist as of the date
hereof (collectively, the "Assets"). Capitalized terms used herein without
definition will have the meanings assigned to them in the Purchase Agreement.
TO HAVE AND TO HOLD, all and singular, the said Assets hereby conveyed,
transferred, granted, bargained, sold and delivered to Purchaser, its successors
and assigns, to and for their own use and benefit forever.
Seller represents and warrants that it is the sole and lawful owner in
every respect of all of the Assets and that all of the Assets are being
transferred free and clear of any and all liabilities, obligations, liens,
claims and encumbrances of every kind and character whatsoever. Seller does
hereby bind itself, its successors and assigns, to warrant and defend such title
to the Assets unto Purchaser, its successors and assigns, against every person
whosoever claims or might claim such Assets, any part thereof or any interest
therein.
Seller, for itself, its successors and assigns, further covenants and
agrees that Seller and its successors and assigns will do or cause to be done
all such further acts and will execute, acknowledge and deliver, or will cause
to be executed, acknowledged and delivered, any and all such further deeds,
assignments, transfers and conveyances, powers of attorney and assurances as
Purchaser, its successors and assigns, may reasonably require (i) for the better
assuring, assigning, transferring and conveying the Assets, all and singular,
unto Purchaser, its successors and assigns; (ii) to protect the right, title and
interest of Purchaser, its successors and assigns, in and to, and their
enjoyment of, all and singular, the Assets; and (iii) as may be appropriate
otherwise to carry out the transactions contemplated by the Purchase Agreement.
Seller, for itself, its successors and assigns, irrevocably constitutes and
appoints Purchaser, its successors and assigns, and each of them, the true and
lawful attorney of Seller, its successors and assigns, with full power of
substitution and gives and grants unto Purchaser, its successors and assigns,
and each of them, full power and authority in the name of Seller, its successors
and assigns, at any time and from time to time, to demand, sue for, recover and
receive any and all rights, demands, claims and choses in action of every kind
and description whatsoever incident or relating to the Assets, for the purpose
of fully vesting in Purchaser, its successors and assigns, all the right, title
and interest in and to the Assets, all and singular.
<PAGE>
This instrument will be binding upon Seller, its successors and assigns,
and will inure to the benefit of Purchaser, its successors and assigns.
This Bill of Sale will be governed by, and construed and interpreted in
accordance with, the laws of the State of Texas.
IN WITNESS WHEREOF, this Bill of Sale is executed on November 1, 1996
Seller:
TRI-LAKES MARINE, INC.
By:
Charles R. Bondurant, President
THE STATE OF ________ (S)
(S)
COUNTY OF ___________ (S)
The foregoing instrument was ACKNOWLEDGED before me this _____ day of
_____________, by _________________________, the ____________________________ of
_______________________, a ________ corporation, on behalf of said corporation.
[ S E A L ]
Notary Public, State of __________
My Commission Expires:
(Printed Name of Notary Public)
-------------------------------
<PAGE>
EXHIBIT D
ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Agreement"), dated as of
November 1, 1996 by and between TRAVIS BOATING CENTER TENNESSEE, INC., a Texas
corporation ("Buyer"), and TRI-LAKES MARINE, INC. a Tennessee corporation
("Seller"). Capitalized terms used herein without definition will have the
meanings assigned to them in the Purchase Agreement.
WHEREAS, Buyer and Seller have entered into that certain Purchase
Agreement, dated as of the date hereof (the "Purchase Agreement"), pursuant to
the terms of which Buyer agrees to buy, and Seller agrees to sell, certain
assets of Seller;
WHEREAS, pursuant to Section 3.1 of the Purchase Agreement, Buyer has
agreed to assume certain debts and obligations of Seller;
NOW, THEREFORE, for and in consideration of the sale of the Assets pursuant
to the Purchase Agreement, Seller hereby assigns to Buyer, and Buyer hereby
assumes and undertakes to pay, perform and discharge the liabilities and
obligations set forth in Section 3.1 and on Schedule 3.1 of, the Purchase
Agreement, that accrue from and after the Effective Date.
Buyer does not agree to pay, assume, perform or discharge any obligations
of whatever kind (whether direct or indirect, absolute or contingent, known or
unknown, matured or unmatured, or otherwise) in connection with the Excluded
Assets or any obligation that it does not expressly assume hereunder or under
the Purchase Agreement.
This Agreement will be binding upon, and inure to the benefit of, the
parties hereto and their respective successors in interest and permitted
assigns.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first above written.
Seller:
TRI-LAKES MARINE, INC.
By: _____________________________________
Charles R. Bondurant, President
<PAGE>
Buyer:
TRAVIS BOATING CENTER TENNESSEE, INC.
By:
_____________________________________
___________________________
___________________________
THE STATE OF ________ (S)
(S)
COUNTY OF ___________ (S)
On this day, before me, a Notary Public, duly commissioned and qualified and
acting within and for the state and county aforesaid, appeared in person,
____________________, who stated that he was the ______________ of
________________________, a ___________ corporation, and was duly authorized in
his capacity to execute the foregoing instrument for and in the name and on
behalf of said corporation; and further stated that he had so signed, executed
and delivered said instrument for the consideration, uses and purposes therein
mentioned and set forth.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal on this
______ day of ____________.
[S E A L]
Notary Public, State of _________
Notary's Printed Name:
Notary's Commission Expires:
THE STATE OF ________ (S)
(S)
COUNTY OF ___________ (S)
On this day, before me, a Notary Public, duly commissioned and qualified
and acting within and for the state and county aforesaid, appeared in person,
____________________, who stated that he was the ______________ of Travis
Boating Center ______, Inc., a Texas corporation, and was duly authorized in his
capacity to execute the foregoing instrument for and in the name and on behalf
of said corporation; and further stated that he had so signed, executed
<PAGE>
and delivered said instrument for the consideration, uses and purposes therein
mentioned and set forth.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal on this
______ day of ____________.
[S E A L]
Notary Public, State of __________
Notary's Printed Name:
Notary's Commission Expires:
<PAGE>
EXHIBIT F
NON-COMPETITION AGREEMENT (SELLER)
This Non-Competition Agreement (the "Agreement"), dated as of November 1,
1996, is among TRAVIS BOATS & MOTORS, INC., a Texas corporation ("Travis"),
TRAVIS BOATING CENTER TENNESSEE, INC., a Texas corporation and wholly owned
subsidiary of Travis ("Buyer"), both having an office for the purpose of notice
at 13045 Research Blvd., Austin, Texas 78750, and TRI-LAKES MARINE, INC., a
Tennessee corporation ("Seller") with an office for the purpose of notice at
____________________________, ____________________________.
WHEREAS, Buyer has agreed to acquire certain of the assets of Seller
pursuant to that certain asset purchase agreement dated November 1, 1996 (the
"Purchase Agreement"), among Buyer, Seller and certain Shareholders of Seller
(the capitalized terms used herein have the meanings assigned to them in the
Purchase Agreement unless otherwise defined herein); and
WHEREAS, pursuant to the Purchase Agreement, Buyer will acquire Seller's
tradenames "Tri-Lakes Marine, Inc.", "_________________________",
"__________________________", and all derivative uses of such names and the
goodwill associated therewith; and
WHEREAS, the parties hereto agree that the reasonable market area of a
business such as the Business is approximately a 150-mile radius; and
WHEREAS, it is a condition precedent to the closing of the purchase under
the Purchase Agreement that Seller shall have entered into this Agreement;
NOW, THEREFORE, in consideration of the foregoing, and of the mutual
covenants, terms and conditions hereinafter expressed, Travis, Buyer and Seller
agree as follows:
Section 1.
----------
1.1 Non-Competition. Seller will not, for any reason:
---------------
1.1.1 Engage in a business or businesses, directly or indirectly,
that competes with Buyer in its conduct of the Business, or otherwise receive
compensation for any services rendered regarding any aspect of the boat, boat
accessory or water sport sales business anywhere within 150 miles of the
location of the Business.
1.1.2 Participate, directly or indirectly, in any business that
competes with Buyer and the Business at any Boat Show.
1.1.3 Engage in a business or businesses, directly or indirectly,
that competes with Travis or any Affiliate of Travis in their conduct of the
boat, boat accessory or water sport sales business, or otherwise receive
compensation for any services rendered regarding any aspect
<PAGE>
of the boat, motor, trailer, or marine accessory or water sport sales business
anywhere within 150 miles of the location of any store operated by Travis or any
Affiliate of Travis.
1.1.4 Engage or participate, directly or indirectly, in any business
which is substantially similar to that of Travis or any Affiliate of Travis,
including, without limitation, serving as a consultant, administrator, officer,
director, employee, manager, landlord, lender, guarantor, or in any similar or
related capacity or otherwise receive compensation for services rendered
regarding any aspect of the boat, boat accessory or water sport sales business
anywhere within 150 miles of the location of any store operated by Buyer, Travis
or any Affiliate of Travis.
1.2 Seller agrees that Travis and Buyer will not be able to recognize the
value of Seller's assets and the Business unless Buyer is able to engage in the
successful operation of the Business, that the non-competition provisions set
forth in Section 1.1 are ancillary to the Purchase Agreement, that the Purchase
Agreement is an otherwise enforceable agreement, and that the non-competition
provisions in this Agreement are therefore ancillary to an otherwise enforceable
agreement. Seller further agrees that the non-competition provisions set forth
above are supported by independent valuable consideration and contain reasonable
limitations as to the time, geographical area, and scope of activity for which
he is to be restrained; and that the limitations of the non-competition
provisions do not impose a greater restraint than is necessary to protect the
goodwill or other business interests of Travis and Buyer. It is agreed by the
parties that the restrictions contained in Section 1.1 impose, on the date of
the execution of this Agreement, a reasonable restraint on Seller in light of
the activities and businesses of Travis and Buyer and their future plans.
1.3 For the purposes of this Agreement, Seller will be deemed to be
engaging or participating in a business or businesses if it is engaged in such
business or businesses, directly or indirectly, whether for its own account or
for that of any other person, firm or corporation, and whether as a stockholder
(except solely as a stockholder in a publicly held corporation with more than
500 holders of common stock and as to which he owns, in the aggregate, less than
5% of any class of stock), director, officer, employee, consultant, partner,
joint venturer, principal, agent, proprietor, consultant, manager, independent
contractor, sales representative, landlord, lessor, lender, guarantor, or in any
other capacity.
Section 2.
----------
2.1 Term. The term of this Agreement will commence on the date hereof and
----
will terminate on November 1, 2001.
2.2 Remedies. Seller acknowledges that a breach of any of the provisions
--------
of Section 1 will cause irreparable harm to Travis and Buyer, for which there
may be no adequate remedy at law and for which the ascertainment of damages
would be difficult. Therefore, Travis and Buyer will be entitled to specific
performance of Section 1 hereof, in addition to, and without having to prove the
inadequacy of, other remedies at law, as well as injunctive relief (without
being required to post bond or other security), and, if such legal action
becomes necessary, Travis and Buyer will be entitled to recover reasonable
attorney's fees and costs of court incurred in
<PAGE>
connection with such action. Nothing contained herein will be construed as
prohibiting Travis and Buyer from pursuing any other remedies available to it
for such breach, including the recovery of money damages.
2.3 Notices Notices and demands provided for under this Agreement will be
-------
in writing and will be deemed to be fully given and received if sent by
registered mail, postage prepaid, to the respective party at the address listed
at the beginning of this Agreement.
2.4 Assignment. Buyer or Travis may assign its rights or obligations
----------
hereunder to any Affiliate of Buyer or Travis or any successor to the business
of Buyer or Travis, by merger, consolidation, sale of assets, or otherwise.
2.5 Reformation; Severability. Whenever possible, each provision of this
-------------------------
Agreement will be interpreted so as to be legal, valid and enforceable under
applicable law, but in the event any provision of this Agreement is held to be
prohibited, unenforceable or invalid under applicable law, the parties agree
that such provision will automatically be deemed modified for purposes of
performance of this Agreement to the extent necessary to render it lawful, valid
and enforceable, or if such modification is not possible without materially
altering the intent of the parties, that such provision will automatically be
deemed severed from this Agreement to the extent of such prohibition,
unenforceability, or invalidity. The validity of the remaining provisions of
this Agreement will not be altered by any such modification or severance.
2.6 Amendment of Agreement. Except as set forth in Section 2.5, this
----------------------
Agreement may not be amended, modified, or supplemented except by a writing
signed by all parties.
2.7 Governing Law; Venue. THIS AGREEMENT WILL BE CONSTRUED AND
--------------------
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO
THE CONFLICT OF LAWS RULES OF TEXAS. Each of the undersigned irrevocably agrees
that any legal action or proceeding brought against said Person with respect to
this Agreement will be brought in the appropriate court in Travis County, Texas
and hereby waives any right to be sued in any other place.
2.8 Construction. This Agreement constitutes the entire Agreement between
------------
the parties and will be binding upon and inure to the benefit of the parties
hereto and their permitted successors and assigns. No terms or understandings
not herein contained will apply unless in writing and signed by all parties
subsequent to execution of this Agreement. This Agreement is intended to benefit
only the parties hereto and no third party will have any right to enforce this
Agreement or receive any benefits hereof.
<PAGE>
IN WITNESS WHEREOF, Travis, Buyer and Seller have executed this Agreement,
in the manner appropriate to each, as of the day and year first above written.
TRAVIS BOATS & MOTORS, INC.
By:
---------------------------
---------------------------
---------------------------
TRAVIS BOATING CENTER TENNESSEE, INC.
By:
---------------------------
---------------------------
---------------------------
TRI-LAKES MARINE, INC.
By:
---------------------------
---------------------------
---------------------------
<PAGE>
EXHIBIT E-1
NON-COMPETITION AGREEMENT (INDIVIDUAL)
This Non-Competition Agreement (the "Agreement"), dated as of November 1,
1996 is among TRAVIS BOATS & MOTORS, INC., a Texas corporation ("Travis"),
TRAVIS BOATING CENTER TENNESSEE, INC., a Texas corporation and wholly owned
subsidiary of Travis ("Buyer"), both having an office for the purpose of notice
at 13045 Research Blvd., Austin, Texas 78750, and Charles R. Bondurant, an
individual residing at ________________________________ ("Owner").
WHEREAS, Buyer has agreed to acquire certain of the assets TRI-LAKES
MARINE, INC., a Tennessee corporation ("Seller"), pursuant to that certain asset
purchase agreement dated November 1, 1996 (the "Purchase Agreement"), among
Buyer, Seller and certain stockholders of Seller (the capitalized terms used
herein have the meanings assigned to them in the Purchase Agreement unless
otherwise defined herein); and
WHEREAS, Owner owns 40% of the outstanding shares of capital stock of
Seller; and
WHEREAS, Owner has established a valuable, far-reaching personal reputation
in the boat, boat accessory and water sports sales business; and
WHEREAS, pursuant to the Purchase Agreement, Buyer will acquire Seller's
tradenames "Tri-Lakes Marine, Inc.", "___________________",
"___________________", and all derivative uses of such names and the goodwill
associated therewith; and
WHEREAS, Owner's personal reputation and identification with the Business
is a significant portion of the value of the Business; and
WHEREAS, the parties hereto agree that the reasonable market area of a
business such as the Business is approximately a 150-mile radius; and
WHEREAS, it is a condition precedent to the closing of the purchase under
the Purchase Agreement that Owner shall have entered into this Agreement;
NOW, THEREFORE, in consideration of the foregoing, and of the mutual
covenants, terms and conditions hereinafter expressed, Travis, Buyer and Owner
agree as follows:
Section 1.
----------
1.1 Non-Competition. Owner will not, for any reason:
---------------
1.1.1 Engage in a business or businesses, directly or indirectly,
that competes with Buyer in its conduct of the Business, or otherwise
receive compensation for any
<PAGE>
services rendered regarding any aspect of the boat, boat accessory or water
sport sales business anywhere within 150 miles of the location of the
Business.
1.1.2 Participate, directly or indirectly, in any business that
competes with Buyer and the Business at any Boat Show.
1.1.3 Engage in a business or businesses, directly or indirectly,
that competes with Travis or any Affiliate of Travis in their conduct of
the boat, boat accessory or water sport sales business, or otherwise
receive compensation for any services rendered regarding any aspect of the
boat, motor, trailer, marine accessory or water sport sales business
anywhere within 150 miles of the location of any store operated by Travis
or any Affiliate of Travis.
1.1.4 Engage or participate, directly or indirectly, in any business
which is substantially similar to that of Travis or any Affiliate of
Travis, including, without limitation, serving as a consultant,
administrator, officer, director, employee, manager, landlord, lender,
guarantor, or in any similar or related capacity or otherwise receive
compensation for services rendered regarding any aspect of the boat, boat
accessory or water sport sales business anywhere within 150 miles of the
location of any store operated by Buyer, Travis or any Affiliate of Travis.
1.2 Owner agrees that Travis and Buyer will not be able to recognize the
value of Seller's assets and the Business unless Buyer is able to engage in the
successful operation of the Business, that the non-competition provisions set
forth in Section 1.1 are ancillary to the Purchase Agreement, that the Purchase
Agreement is an otherwise enforceable agreement, and that the non-competition
provisions in this Agreement are therefore ancillary to an otherwise enforceable
agreement. Owner further agrees that the non-competition provisions set forth
above are supported by independent valuable consideration and contain reasonable
limitations as to the time, geographical area, and scope of activity for which
he is to be restrained; and that the limitations of the non-competition
provisions do not impose a greater restraint than is necessary to protect the
goodwill or other business interests of Travis and Buyer. It is agreed by the
parties that the restrictions contained in Section 1.1 impose, on the date of
the execution of this Agreement, a reasonable restraint on Seller in light of
the activities and businesses of Travis and Buyer and their future plans.
1.3 For the purposes of this Agreement, Owner will be deemed to be
engaging or participating in a business or businesses if he is engaged in such
business or businesses, directly or indirectly, whether for his own account or
for that of any other person, firm or corporation, and whether as a stockholder
(except solely as a stockholder in a publicly held corporation with more than
500 holders of common stock and as to which he owns, in the aggregate, less than
5% of any class of stock), director, officer, employee, consultant, partner,
joint venturer, principal, agent, proprietor, consultant, manager, independent
contractor, sales representative, landlord, lessor, lender, guarantor, or in any
other capacity.
<PAGE>
Section 2.
----------
2.1 Term. The term of this Agreement will commence on the date hereof and
----
will terminate on November 1, 2001.
2.2 Remedies. Owner acknowledges that a breach of any of the provisions
--------
of Section 1 will cause irreparable harm to Travis and Buyer, for which there
may be no adequate remedy at law and for which the ascertainment of damages
would be difficult. Therefore, Travis and Buyer will be entitled to specific
performance of Section 1 hereof, in addition to, and without having to prove the
inadequacy of, other remedies at law, as well as injunctive relief (without
being required to post bond or other security), and, if such legal action
becomes necessary, Travis and Buyer will be entitled to recover reasonable
attorney's fees and costs of court incurred in connection with such action.
Nothing contained herein will be construed as prohibiting Travis and Buyer from
pursuing any other remedies available to it for such breach, including the
recovery of money damages.
2.3 Notices. Notices and demands provided for under this Agreement will
-------
be in writing and will be deemed to be fully given and received if sent by
registered mail, postage prepaid, to the respective party at the address listed
at the beginning of this Agreement.
2.4 Assignment. Buyer or Travis may assign its rights or obligations
----------
hereunder to any Affiliate of Buyer or Travis or any successor to the business
of Buyer or Travis, by merger, consolidation, sale of assets, or otherwise.
2.5 Reformation; Severability. Whenever possible, each provision of this
-------------------------
Agreement will be interpreted so as to be legal, valid and enforceable under
applicable law, but in the event any provision of this Agreement is held to be
prohibited, unenforceable or invalid under applicable law, the parties agree
that such provision will automatically be deemed modified for purposes of
performance of this Agreement to the extent necessary to render it lawful, valid
and enforceable, or if such modification is not possible without materially
altering the intent of the parties, that such provision will automatically be
deemed severed from this Agreement to the extent of such prohibition,
unenforceability, or invalidity. The validity of the remaining provisions of
this Agreement will not be altered by any such modification or severance.
2.6 Amendment of Agreement. Except as set forth in Section 2.5, this
----------------------
Agreement may not be amended, modified, or supplemented except by a writing
signed by all parties.
2.7 Governing Law; Venue. THIS AGREEMENT WILL BE CONSTRUED AND
--------------------
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO
THE CONFLICT OF LAWS RULES OF TEXAS. Each of the undersigned irrevocably agrees
that any legal action or proceeding brought against said Person with respect to
this Agreement will be brought in the appropriate court in Travis County, Texas
and hereby waives any right to be sued in any other place.
2.8 Construction. This Agreement constitutes the entire Agreement between
------------
the parties and will be binding upon and inure to the benefit of the parties
hereto and their permitted
<PAGE>
successors and assigns. No terms or understandings not herein contained will
apply unless in writing and signed by all parties subsequent to execution of
this Agreement. This Agreement is intended to benefit only the parties hereto
and no third party will have any right to enforce this Agreement or receive any
benefits hereof.
IN WITNESS WHEREOF, Travis, Buyer and Owner have executed this Agreement,
in the manner appropriate to each, as of the day and year first above written.
TRAVIS BOATS & MOTORS, INC.
By:
---------------------------
---------------------------
---------------------------
TRAVIS BOATING CENTER TENNESSEE, INC.
By:
---------------------------
---------------------------
---------------------------
Charles R. Bondurant
---------------------------
<PAGE>
EXHIBIT E-2
NON-COMPETITION AGREEMENT (INDIVIDUAL)
This Non-Competition Agreement (the "Agreement"), dated as of November 1,
1996 is among TRAVIS BOATS & MOTORS, INC., a Texas corporation ("Travis"),
TRAVIS BOATING CENTER TENNESSEE, INC., a Texas corporation and wholly owned
subsidiary of Travis ("Buyer"), both having an office for the purpose of notice
at 13045 Research Blvd., Austin, Texas 78750, and Joe Bondurant, an individual
residing at ________________________________ ("Owner").
WHEREAS, Buyer has agreed to acquire certain of the assets TRI-LAKES
MARINE, INC., a Tennessee corporation ("Seller"), pursuant to that certain asset
purchase agreement dated November 1, 1996 (the "Purchase Agreement"), among
Buyer, Seller and certain stockholders of Seller (the capitalized terms used
herein have the meanings assigned to them in the Purchase Agreement unless
otherwise defined herein); and
WHEREAS, Owner owns 40% of the outstanding shares of capital stock of
Seller; and
WHEREAS, Owner has established a valuable, far-reaching personal reputation
in the boat, boat accessory and water sports sales business; and
WHEREAS, pursuant to the Purchase Agreement, Buyer will acquire Seller's
tradenames "Tri-Lakes Marine, Inc.", "___________________",
"___________________", and all derivative uses of such names and the goodwill
associated therewith; and
WHEREAS, Owner's personal reputation and identification with the Business
is a significant portion of the value of the Business; and
WHEREAS, the parties hereto agree that the reasonable market area of a
business such as the Business is approximately a 150-mile radius; and
WHEREAS, it is a condition precedent to the closing of the purchase under
the Purchase Agreement that Owner shall have entered into this Agreement;
NOW, THEREFORE, in consideration of the foregoing, and of the mutual
covenants, terms and conditions hereinafter expressed, Travis, Buyer and Owner
agree as follows:
Section 1.
----------
1.1 Non-Competition. Owner will not, for any reason:
---------------
1.1.1 Engage in a business or businesses, directly or indirectly,
that competes with Buyer in its conduct of the Business, or otherwise
receive compensation for any
<PAGE>
services rendered regarding any aspect of the boat, boat accessory or water
sport sales business anywhere within 150 miles of the location of the
Business.
1.1.2 Participate, directly or indirectly, in any business that
competes with Buyer and the Business at any Boat Show.
1.1.3 Engage in a business or businesses, directly or indirectly,
that competes with Travis or any Affiliate of Travis in their conduct of
the boat, boat accessory or water sport sales business, or otherwise
receive compensation for any services rendered regarding any aspect of the
boat, motor, trailer, marine accessory or water sport sales business
anywhere within 150 miles of the location of any store operated by Travis
or any Affiliate of Travis.
1.1.4 Engage or participate, directly or indirectly, in any business
which is substantially similar to that of Travis or any Affiliate of
Travis, including, without limitation, serving as a consultant,
administrator, officer, director, employee, manager, landlord, lender,
guarantor, or in any similar or related capacity or otherwise receive
compensation for services rendered regarding any aspect of the boat, boat
accessory or water sport sales business anywhere within 150 miles of the
location of any store operated by Buyer, Travis or any Affiliate of Travis.
1.2 Owner agrees that Travis and Buyer will not be able to recognize the
value of Seller's assets and the Business unless Buyer is able to engage in the
successful operation of the Business, that the non-competition provisions set
forth in Section 1.1 are ancillary to the Purchase Agreement, that the Purchase
Agreement is an otherwise enforceable agreement, and that the non-competition
provisions in this Agreement are therefore ancillary to an otherwise enforceable
agreement. Owner further agrees that the non-competition provisions set forth
above are supported by independent valuable consideration and contain reasonable
limitations as to the time, geographical area, and scope of activity for which
he is to be restrained; and that the limitations of the non-competition
provisions do not impose a greater restraint than is necessary to protect the
goodwill or other business interests of Travis and Buyer. It is agreed by the
parties that the restrictions contained in Section 1.1 impose, on the date of
the execution of this Agreement, a reasonable restraint on Seller in light of
the activities and businesses of Travis and Buyer and their future plans.
1.3 For the purposes of this Agreement, Owner will be deemed to be
engaging or participating in a business or businesses if he is engaged in such
business or businesses, directly or indirectly, whether for his own account or
for that of any other person, firm or corporation, and whether as a stockholder
(except solely as a stockholder in a publicly held corporation with more than
500 holders of common stock and as to which he owns, in the aggregate, less than
5% of any class of stock), director, officer, employee, consultant, partner,
joint venturer, principal, agent, proprietor, consultant, manager, independent
contractor, sales representative, landlord, lessor, lender, guarantor, or in any
other capacity.
<PAGE>
Section 2.
----------
2.1 Term. The term of this Agreement will commence on the date hereof and
----
will terminate on November 1, 2001.
2.2 Remedies. Owner acknowledges that a breach of any of the provisions
--------
of Section 1 will cause irreparable harm to Travis and Buyer, for which there
may be no adequate remedy at law and for which the ascertainment of damages
would be difficult. Therefore, Travis and Buyer will be entitled to specific
performance of Section 1 hereof, in addition to, and without having to prove the
inadequacy of, other remedies at law, as well as injunctive relief (without
being required to post bond or other security), and, if such legal action
becomes necessary, Travis and Buyer will be entitled to recover reasonable
attorney's fees and costs of court incurred in connection with such action.
Nothing contained herein will be construed as prohibiting Travis and Buyer from
pursuing any other remedies available to it for such breach, including the
recovery of money damages.
2.3 Notices. Notices and demands provided for under this Agreement will
-------
be in writing and will be deemed to be fully given and received if sent by
registered mail, postage prepaid, to the respective party at the address listed
at the beginning of this Agreement.
2.4 Assignment. Buyer or Travis may assign its rights or obligations
----------
hereunder to any Affiliate of Buyer or Travis or any successor to the business
of Buyer or Travis, by merger, consolidation, sale of assets, or otherwise.
2.5 Reformation; Severability. Whenever possible, each provision of this
-------------------------
Agreement will be interpreted so as to be legal, valid and enforceable under
applicable law, but in the event any provision of this Agreement is held to be
prohibited, unenforceable or invalid under applicable law, the parties agree
that such provision will automatically be deemed modified for purposes of
performance of this Agreement to the extent necessary to render it lawful, valid
and enforceable, or if such modification is not possible without materially
altering the intent of the parties, that such provision will automatically be
deemed severed from this Agreement to the extent of such prohibition,
unenforceability, or invalidity. The validity of the remaining provisions of
this Agreement will not be altered by any such modification or severance.
2.6 Amendment of Agreement. Except as set forth in Section 2.5, this
----------------------
Agreement may not be amended, modified, or supplemented except by a writing
signed by all parties.
2.7 Governing Law; Venue. THIS AGREEMENT WILL BE CONSTRUED AND
--------------------
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO
THE CONFLICT OF LAWS RULES OF TEXAS. Each of the undersigned irrevocably agrees
that any legal action or proceeding brought against said Person with respect to
this Agreement will be brought in the appropriate court in Travis County, Texas
and hereby waives any right to be sued in any other place.
2.8 Construction. This Agreement constitutes the entire Agreement between
------------
the parties and will be binding upon and inure to the benefit of the parties
hereto and their permitted
<PAGE>
successors and assigns. No terms or understandings not herein contained will
apply unless in writing and signed by all parties subsequent to execution of
this Agreement. This Agreement is intended to benefit only the parties hereto
and no third party will have any right to enforce this Agreement or receive any
benefits hereof.
IN WITNESS WHEREOF, Travis, Buyer and Owner have executed this Agreement,
in the manner appropriate to each, as of the day and year first above written.
TRAVIS BOATS & MOTORS, INC.
By:
---------------------------
---------------------------
---------------------------
TRAVIS BOATING CENTER TENNESSEE, INC.
By:
---------------------------
---------------------------
---------------------------
Joe Bondurant
---------------------------
<PAGE>
EXHIBIT E-3
NON-COMPETITION AGREEMENT (INDIVIDUAL)
This Non-Competition Agreement (the "Agreement"), dated as of November 1,
1996 is among TRAVIS BOATS & MOTORS, INC., a Texas corporation ("Travis"),
TRAVIS BOATING CENTER TENNESSEE, INC., a Texas corporation and wholly owned
subsidiary of Travis ("Buyer"), both having an office for the purpose of notice
at 13045 Research Blvd., Austin, Texas 78750, and Tom Ed Bondurant, an
individual residing at ________________________________ ("Owner").
WHEREAS, Buyer has agreed to acquire certain of the assets TRI-LAKES
MARINE, INC., a Tennessee corporation ("Seller"), pursuant to that certain asset
purchase agreement dated November 1, 1996 (the "Purchase Agreement"), among
Buyer, Seller and certain stockholders of Seller (the capitalized terms used
herein have the meanings assigned to them in the Purchase Agreement unless
otherwise defined herein); and
WHEREAS, Owner owns 20% of the outstanding shares of capital stock of
Seller; and
WHEREAS, Owner has established a valuable, far-reaching personal reputation
in the boat, boat accessory and water sports sales business; and
WHEREAS, pursuant to the Purchase Agreement, Buyer will acquire Seller's
tradenames "Tri-Lakes Marine, Inc.", "___________________",
"___________________", and all derivative uses of such names and the goodwill
associated therewith; and
WHEREAS, Owner's personal reputation and identification with the Business
is a significant portion of the value of the Business; and
WHEREAS, the parties hereto agree that the reasonable market area of a
business such as the Business is approximately a 150-mile radius; and
WHEREAS, it is a condition precedent to the closing of the purchase under
the Purchase Agreement that Owner shall have entered into this Agreement;
NOW, THEREFORE, in consideration of the foregoing, and of the mutual
covenants, terms and conditions hereinafter expressed, Travis, Buyer and Owner
agree as follows:
Section 1.
----------
1.1 Non-Competition. Owner will not, for any reason:
---------------
1.1.1 Engage in a business or businesses, directly or indirectly,
that competes with Buyer in its conduct of the Business, or otherwise
receive compensation for any
<PAGE>
services rendered regarding any aspect of the boat, boat accessory or water
sport sales business anywhere within 150 miles of the location of the
Business.
1.1.2 Participate, directly or indirectly, in any business that
competes with Buyer and the Business at any Boat Show.
1.1.3 Engage in a business or businesses, directly or indirectly,
that competes with Travis or any Affiliate of Travis in their conduct of
the boat, boat accessory or water sport sales business, or otherwise
receive compensation for any services rendered regarding any aspect of the
boat, motor, trailer, marine accessory or water sport sales business
anywhere within 150 miles of the location of any store operated by Travis
or any Affiliate of Travis.
1.1.4 Engage or participate, directly or indirectly, in any business
which is substantially similar to that of Travis or any Affiliate of
Travis, including, without limitation, serving as a consultant,
administrator, officer, director, employee, manager, landlord, lender,
guarantor, or in any similar or related capacity or otherwise receive
compensation for services rendered regarding any aspect of the boat, boat
accessory or water sport sales business anywhere within 150 miles of the
location of any store operated by Buyer, Travis or any Affiliate of Travis.
1.2 Owner agrees that Travis and Buyer will not be able to recognize the
value of Seller's assets and the Business unless Buyer is able to engage in the
successful operation of the Business, that the non-competition provisions set
forth in Section 1.1 are ancillary to the Purchase Agreement, that the Purchase
Agreement is an otherwise enforceable agreement, and that the non-competition
provisions in this Agreement are therefore ancillary to an otherwise enforceable
agreement. Owner further agrees that the non-competition provisions set forth
above are supported by independent valuable consideration and contain reasonable
limitations as to the time, geographical area, and scope of activity for which
he is to be restrained; and that the limitations of the non-competition
provisions do not impose a greater restraint than is necessary to protect the
goodwill or other business interests of Travis and Buyer. It is agreed by the
parties that the restrictions contained in Section 1.1 impose, on the date of
the execution of this Agreement, a reasonable restraint on Seller in light of
the activities and businesses of Travis and Buyer and their future plans.
1.3 For the purposes of this Agreement, Owner will be deemed to be
engaging or participating in a business or businesses if he is engaged in such
business or businesses, directly or indirectly, whether for his own account or
for that of any other person, firm or corporation, and whether as a stockholder
(except solely as a stockholder in a publicly held corporation with more than
500 holders of common stock and as to which he owns, in the aggregate, less than
5% of any class of stock), director, officer, employee, consultant, partner,
joint venturer, principal, agent, proprietor, consultant, manager, independent
contractor, sales representative, landlord, lessor, lender, guarantor, or in any
other capacity.
<PAGE>
Section 2.
----------
2.1 Term. The term of this Agreement will commence on the date hereof and
----
will terminate on November 1, 2001.
2.2 Remedies. Owner acknowledges that a breach of any of the provisions
--------
of Section 1 will cause irreparable harm to Travis and Buyer, for which there
may be no adequate remedy at law and for which the ascertainment of damages
would be difficult. Therefore, Travis and Buyer will be entitled to specific
performance of Section 1 hereof, in addition to, and without having to prove the
inadequacy of, other remedies at law, as well as injunctive relief (without
being required to post bond or other security), and, if such legal action
becomes necessary, Travis and Buyer will be entitled to recover reasonable
attorney's fees and costs of court incurred in connection with such action.
Nothing contained herein will be construed as prohibiting Travis and Buyer from
pursuing any other remedies available to it for such breach, including the
recovery of money damages.
2.3 Notices. Notices and demands provided for under this Agreement will
-------
be in writing and will be deemed to be fully given and received if sent by
registered mail, postage prepaid, to the respective party at the address listed
at the beginning of this Agreement.
2.4 Assignment. Buyer or Travis may assign its rights or obligations
----------
hereunder to any Affiliate of Buyer or Travis or any successor to the business
of Buyer or Travis, by merger, consolidation, sale of assets, or otherwise.
2.5 Reformation; Severability. Whenever possible, each provision of this
-------------------------
Agreement will be interpreted so as to be legal, valid and enforceable under
applicable law, but in the event any provision of this Agreement is held to be
prohibited, unenforceable or invalid under applicable law, the parties agree
that such provision will automatically be deemed modified for purposes of
performance of this Agreement to the extent necessary to render it lawful, valid
and enforceable, or if such modification is not possible without materially
altering the intent of the parties, that such provision will automatically be
deemed severed from this Agreement to the extent of such prohibition,
unenforceability, or invalidity. The validity of the remaining provisions of
this Agreement will not be altered by any such modification or severance.
2.6 Amendment of Agreement. Except as set forth in Section 2.5, this
----------------------
Agreement may not be amended, modified, or supplemented except by a writing
signed by all parties.
2.7 Governing Law; Venue. THIS AGREEMENT WILL BE CONSTRUED AND
--------------------
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO
THE CONFLICT OF LAWS RULES OF TEXAS. Each of the undersigned irrevocably agrees
that any legal action or proceeding brought against said Person with respect to
this Agreement will be brought in the appropriate court in Travis County, Texas
and hereby waives any right to be sued in any other place.
2.8 Construction. This Agreement constitutes the entire Agreement between
------------
the parties and will be binding upon and inure to the benefit of the parties
hereto and their permitted
<PAGE>
successors and assigns. No terms or understandings not herein contained will
apply unless in writing and signed by all parties subsequent to execution of
this Agreement. This Agreement is intended to benefit only the parties hereto
and no third party will have any right to enforce this Agreement or receive any
benefits hereof.
IN WITNESS WHEREOF, Travis, Buyer and Owner have executed this Agreement,
in the manner appropriate to each, as of the day and year first above written.
TRAVIS BOATS & MOTORS, INC.
By:
---------------------------
---------------------------
---------------------------
TRAVIS BOATING CENTER TENNESSEE, INC.
By:
---------------------------
---------------------------
---------------------------
Tom Ed Bondurant
---------------------------
<PAGE>
================================================================================
EXHIBIT 10.31
ASSET PURCHASE AGREEMENT
BY AND AMONG
TRAVIS BOATING CENTER ALABAMA, INC.,
TRI-LAKES MARINE, INC.,
CHARLES R. BONDURANT, JOE BONDURANT
AND
TOM ED BONDURANT
DATED AS OF
NOVEMBER 1, 1996
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
-----
<C> <S> <C>
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 Liquidation...................................... 2
------------------------
2.3 Allocation of Consideration................................... 2
---------------------------
2.4 Bulk Sales Act................................................ 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 Seller...................... 3
4.1 Organization and Qualification................................ 3
------------------------------
4.2 Authority and Validity........................................ 3
----------------------
4.3 No Breach or Violation........................................ 3
----------------------
4.4 Assets........................................................ 3
------
4.5 Contracts and Commitments..................................... 4
-------------------------
4.6 Compliance with Law........................................... 4
-------------------
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......................................... 5
---------------------
4.12 Finders and Brokers........................................... 5
-------------------
4.13 Access and Notice............................................. 5
-----------------
4.14 Disclosure.................................................... 5
----------
Section 5. Representations and Warranties of Buyer....................... 6
5.1 Organization and Qualification................................ 6
------------------------------
5.2 Authority and Validity........................................ 6
----------------------
5.3 No Breach or Violation........................................ 6
----------------------
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 Seller............. 6
-------------------------------------------------
7.2 Conditions to Obligations of Buyer............................ 7
----------------------------------
7.3 Conditions to Obligations of Seller........................... 7
-----------------------------------
7.4 Waiver of Conditions.......................................... 8
--------------------
Section 8. Survival of Representations and Warranties; Indemnification... 8
8.1 Survival of Representations and Warranties.................... 8
------------------------------------------
8.2 Indemnification by Seller..................................... 8
-------------------------
8.3 Indemnification by Buyer...................................... 9
------------------------
8.4 Third Party Claims............................................ 9
------------------
8.5 Offset........................................................ 9
------
</TABLE>
i
<PAGE>
TABLE OF CONTENTS
-----------------
(Continued)
<TABLE>
<C> <S> <C>
Section 9. Post-Closing Covenants......................................... 10
9.1 Transfer Taxes................................................. 10
--------------
9.2 Use of Seller's Name........................................... 10
--------------------
9.3 Confidentiality................................................ 10
---------------
9.4 Consignment and Repair......................................... 10
----------------------
9.5 Access to Records.............................................. 10
-----------------
Section 10. Definitions................................................... 10
10.1 Accessories................................................... 10
-----------
10.2 Affiliate..................................................... 10
---------
10.3 Assets........................................................ 10
------
10.4 Boat Show Rights.............................................. 11
----------------
10.5 Boat Shows.................................................... 11
----------
10.6 Business...................................................... 11
--------
10.7 Deposits...................................................... 11
--------
10.8 Encumbrance................................................... 11
-----------
10.9 Governmental Authority........................................ 11
----------------------
10.10 Intangibles................................................... 11
-----------
10.11 Legal Requirement............................................. 11
-----------------
10.12 Miscellaneous Assets.......................................... 11
--------------------
10.13 Net Cost...................................................... 11
--------
10.14 New Boats, Motors, and Trailers............................... 11
-------------------------------
10.15 Parts......................................................... 11
-----
10.16 Permitted Encumbrances........................................ 11
----------------------
10.17 Person........................................................ 12
------
10.18 Used Boats, Motors, and Trailers.............................. 12
--------------------------------
10.19 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
-------------
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
--------
</TABLE>
ii
<PAGE>
Exhibits and Schedules
----------------------
Exhibits A, A-1, A-2, A-3 Promissory Notes
Exhibit B Certificate (Seller)
Exhibit C Bill of Sale
Exhibit D Assignment and Assumption Agreement
Exhibits E-1, E-2, E-3 Non-Competition Agreement (Individuals)
Exhibit F Non-Competition Agreement (Seller)
Exhibit G Certificate (Buyer)
Exhibit H Opinion of Seller's Counsel
Schedule 1.1 Assets
Schedule 3.1 Seller's Contracts
Schedule 4.1 Capitalization
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
iii
<PAGE>
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") is made as of November 1, 1996,
by and among Travis Boating Center Alabama, Inc., a Texas corporation ("Buyer"),
Tri-Lakes Marine, Inc., a Tennessee corporation ("Seller"), and Charles R.
Bondurant, Joe Bondurant and Tom Ed Bondurant, all individuals living in
Tennessee (collectively, "Owner").
Recitals
--------
WHEREAS, Seller is engaged in the business of retail marine products sales
and service; and
WHEREAS, Buyer desires to purchase, and Seller desires to sell, certain of
Seller's assets used or held for use in the Business as conducted by Seller;
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, Seller will sell to Buyer, and Buyer will
purchase from Seller, all of Seller's rights, title and interest in, to and
under the following Assets: (i) the New Boats, Motors, and Trailers listed on
Schedule 1.1, (ii) the Used Boats, Motors, and Trailers listed on Schedule 1.1,
(iii) all Parts and Accessories, (iv) all Miscellaneous Assets listed on
Schedule 1.1, (v) all Intangibles, (vi) all Deposits, and (vii) Boat Show
Rights.
1.1.2 Attached hereto as Schedule 1.1 is a list of the
Assets.
Section 2. Consideration.
2.1 Purchase Price. Buyer will pay the purchase price for the
--------------
Assets in the amounts and in the manner set forth in this Section 2 (the
"Purchase Price"):
2.1.1 New Boats, Motors, and Trailers valued at Net Cost:
$405,862.10, payable to Seller in immediately available funds at Closing.
2.1.2 Used Boats, Motors, and Trailers: $4,500.00,
payable to Seller in immediately available funds at Closing.
2.1.3 Accessories: The lesser of the manufacturer's 1996
wholesale published price or invoice amount, after rebates and credits, for
each item identified in the physical inventory made jointly by Buyer and
Seller. $158,197.56.
2.1.4 Miscellaneous Assets: $73,359.87.
2.1.5 Intangibles, Deposits, Boat Show Rights and other
Assets: $186,028. A portion of this amount will be allocated to the value
of the Non-Competition Agreement to be executed by Seller and Owners.
<PAGE>
2.1.6 The aggregate amount payable to Seller for the
assets described in Sections 2.1.3, 2.1.4 and 2.1.5 is payable as follows:
-------------------------------
$89,229.00 is payable in immediately available funds at Closing and the
remainder is payable pursuant to a promissory note substantially in the
form attached as Exhibit A.
2.1.7 As consideration for the Non-Competition Agreement
to be executed by Charles R. Bondurant, $27,808.40 is payable in cash and
$28,000.00 is payable to him pursuant to a promissory note substantially in
the form attached as Exhibit A-1. As consideration for the Non-Competition
Agreement to be executed by Joe Bondurant, $27,808.40 is payable in cash
and $28,000.00 is payable to him pursuant to a promissory note
substantially in the form attached as Exhibit A-2. As consideration for the
Non-Competition Agreement to be executed by Tom Ed Bondurant, $13,904.20 is
payable in cash and $14,000.00 is payable to him pursuant to a promissory
note substantially in the form attached as Exhibit A-3 (these three notes
and the note described in Section 2.1.6, collectively, the "Promissory
-----
Notes".)
2.2 Post-Closing Liquidation.
------------------------
2.2.1 Seller may ask Buyer to serve as broker for any new
or used boats, motors and trailers not purchased by Buyer. Seller will
establish an acceptable selling price for each item, which price will be
agreeable to Buyer, and upon the sale of such items Buyer will pay Seller
the sale proceeds, retaining the greater of: (i) ten percent (10%) of the
actual sales price, and (ii) the excess of the actual sales price over the
acceptable selling price established by Seller.
2.2.2 Seller will bear the risk for, and will remain
responsible for insuring all boats, motors, trailers, and other assets not
purchased by Buyer and left on Buyer's premises.
2.3 Allocation of Consideration. The consideration payable by
---------------------------
Buyer under this Agreement will be allocated among the Assets as set forth in
Section 2.1. Buyer and Seller agree to be bound by such 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.
2.4 Bulk Sales Act. Buyer and Seller waive compliance with the
--------------
provisions of the Alabama Bulk Sales Act with respect to the transactions
contemplated by this Agreement, subject to Section 8.2.1(v).
----------------
Section 3 Assumed Liabilities and Excluded Assets.
3.1 Assignment and Assumption. Seller will assign to Buyer, and
-------------------------
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, including the
Boat Show Rights (the "Seller's Contracts"), and (b) warranty repair service on
boats, motors, and trailers sold by Seller prior to or on the Effective Date,
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) Seller
and Owner 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 Seller 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 Seller, will consist of the following: cash, accounts
receivable, insurance policies, books and records, and other assets not listed
on Schedules 1.1, 3.1 or 4.4.2.
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Section 4. Representations and Warranties of Seller.
To induce Buyer to enter into this Agreement, Seller and Owner
represent and warrant to Buyer, as of the Effective Date, as follows:
4.1 Organization and Qualification. Seller is a corporation duly
------------------------------
organized, validly existing and in good standing under the laws of the State of
Tennessee and has 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. Seller is duly qualified or licensed to
do business and is 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 Seller or on the validity,
binding effect or enforceability of this Agreement. Set forth on Schedule 4.1
is the name and identity of each Person who owns of record or beneficially any
common stock, capital stock, or other securities of Seller, has any right to
vote with the owners of Seller, or has the right to acquire any such securities
or rights. Schedule 4.1 also sets forth the amounts of all such securities or
rights and the percentage that each Person's securities or rights bears to the
whole.
4.2 Authority and Validity. Seller has all requisite 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 Seller of, the performance by Seller of its obligations under, and
the consummation by Seller of the transactions contemplated by this Agreement
have been duly authorized by all requisite action of Seller. This Agreement has
been duly executed and delivered by Seller and is the valid and binding
obligation of Seller, enforceable against Seller 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 Seller will not: (a) violate any provision of
the charter or bylaws of Seller; (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 Seller under, or (iv) result in the creation or imposition of
any Encumbrance under, any Seller contract or agreement or any other instrument
evidencing any of the Assets or any instrument or other agreement to which
Seller is a party or by which Seller 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 Seller.
4.4 Assets.
------
4.4.1 Seller has exclusive, good and marketable title to
the Assets claimed by Seller. The Assets are free and clear of all
Encumbrances of any kind or nature, except (a) Permitted Encumbrances and
(b) Encumbrances disclosed on Schedule 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 Seller from any other Person. All
the New Boats, Motors, and Trailers, Used Boats, Motors, and Trailers,
Accessories, Leasehold Improvements, Parts and Miscellaneous Assets are in
good and operable condition and repair, ordinary wear and tear excepted,
and have been maintained in accordance with all applicable safety codes.
4.4.2 Seller has adopted, used, is using, and is the
owner 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 Seller to identify and distinguish Seller's 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
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Alabama or in the United States Patent and Trademark Office. Except as set
forth on Schedule 4.4.2, Seller has full title and ownership of the
Intangibles. Neither Owner nor Seller has any knowledge of any
infringement of Seller's 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.
4.5 Contracts and Commitments. Seller has 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, including the Boat Show
Rights, is valid and enforceable in accordance with its terms; Seller is, and to
the knowledge of Seller and Owner, all other parties thereto are, in compliance
in all material respects with the provisions thereof; Seller is not, and to the
knowledge of Seller and Owner, no other party thereto, is in default in the
performance, observance or fulfillment of any material obligation, covenant 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 Seller and Owner, contains
any contractual requirement with which there is a reasonable likelihood the
Seller, the Buyer, or any other party thereto will be unable to comply.
4.6 Compliance with Law. The ownership, leasing and use of the
-------------------
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. Seller has not received notice claiming a
violation by Seller or the Business of any Legal Requirement applicable to
Seller or the Business as it is currently conducted and to Seller's 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 Seller's unaudited balance sheets for the fiscal years ended
December 31, 1993, 1994, and 1995, together with its unaudited statements of
income and cash flows for the fiscal years or periods then ended, and its
unaudited balance sheet as of May 31, 1996, together with its unaudited
statement of income for the five (5) 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 Seller's 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, and there has been no material
adverse change in, and no events have occurred which are 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 Seller's best knowledge, threatened, involving or
affecting all or any part of the Business, the Assets or Seller.
4.9 Tax Returns; Other Reports. Seller has delivered to Buyer
--------------------------
true and correct copies of its U.S. and Alabama tax returns for the fiscal years
ended December 31, 1993 and 1994. Seller has 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
Seller 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 Seller engaged in the
Business, and their current hourly wages or monthly salaries and other
compensation. Seller has complied in all respects with all Legal Requirements
relating to the employment of
4
<PAGE>
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 Seller
or any Affiliate of Seller. 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 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 used by Seller has,
---------------------
during Seller's use thereof, been maintained, and all activities of Seller, its
employees, agents, contractors, lessees and invites thereon have been conducted,
in compliance with all applicable environmental laws; (ii) Seller has 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) Seller has not received written notification from
any Person or entity that it is (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 Seller's operation of the Business or Seller's generation,
transfer, storage, use, release, transportation or disposal of hazardous
materials in connection with the Business; (iv) Seller has not removed any
underground storage tanks located on such property, (v) 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; (vi) 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 (vii) Seller has made available to Buyer true and correct copies of all
environmental reports or inspections delivered to Seller or prepared at the
request of Seller 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 will be the liability of the
party incurring the liability.
4.13 Access and Notice. Seller and Owner will permit Buyer and
-----------------
its authorized representatives access to, and make available for inspection, all
of the assets and Business of Seller, including employees, customers and
suppliers, and permit Buyer and its authorized representatives to inspect and
make copies of all documents, records and information with respect to the
Business or the Assets as Buyer or its representatives may request. Seller and
Owner will promptly notify Buyer in writing of (a) any notice or communication
relating to a default or event that, with notice or lapse of time or both, could
become a default, under any contract, commitment or obligation to which Seller
is a party, or relating to the Business or the Assets, and (b) any adverse
change in the Seller's or the Business' financial condition or the condition of
the Assets.
4.14 Disclosure. No representation or warranty by Seller in this
----------
Agreement or in any Schedule or Exhibit to this Agreement, or any statement,
list or certificate furnished or to be furnished by Seller 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.
5
<PAGE>
Section 5. Representations and Warranties of Buyer
To induce Seller to enter into this Agreement, Buyer represents and
warrants to Seller, 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
Texas 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 will be in Winchester, Tennessee, at 10:00 a.m. local time on
November 1, 1996 ("Closing Date"). The transactions will be effective as of
November 1, 1996 ("Effective Date").
Section 7. Conditions to Closing.
7.1 Conditions to the Obligations of Buyer and Seller. 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.
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<PAGE>
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 Seller 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 Seller at or prior to
the Closing and has delivered to Buyer a certificate, dated the Closing
Date, signed by Seller's President, to such effect, in substantially the
form attached as Exhibit B.
7.2.2 Seller has 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; and
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.
7.2.3 By the Closing Date, Buyer will have completed a
due diligence review of the Business, operations and financial statements
of Seller, the results of which are satisfactory to Buyer in its sole
discretion.
7.2.4 Charles R. Bondurant, Joe Bondurant and Tom Ed
Bondurant have each signed and delivered to Buyer a Non-Competition
Agreement in substantially the form attached as Exhibits E-1, E-2 and E-3,
respectively, and Seller has signed and delivered to Buyer a Non-
Competition Agreement in substantially the form attached as Exhibit F
(collectively, the "Non-Competition Agreements).
7.2.5 Seller has 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 Seller and the Assets issued by appropriate Alabama state taxing
authorities as of a date no earlier than 10 days prior to the Closing.
7.2.6 Seller has provided Buyer with a copy of amendments
to its charter, certified by the Secretary of State of the State of
Tennessee, that it has changed its name from "Tri-Lakes Marine, Inc."
7.2.7 Seller has provided Buyer with the original
invoices evidencing the cost of the New Boats, Motors, and Trailers, Parts
and Accessories, and an inventory sheet detailing these items.
7.2.8 Buyer has received the opinion of Copeland, Conley
& Hazard in substantially the form attached as Exhibit H.
7.2.9 The lessor of the Huntsville, Alabama, facility has
consented to Buyer's sublease of said facility from Seller at Seller's
current rental rate, through September 1999, and has released Seller and
Owner from liability in connection with the lease.
7.3 Conditions to Obligations of Seller. The obligations of
-----------------------------------
Seller to consummate the transactions contemplated by this Agreement to take
place at the Closing are subject to the satisfaction or waiver by Seller, to the
extent permitted by applicable law, at or prior to the Closing Date, of each of
the following conditions:
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<PAGE>
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 Seller a certificate, dated the Closing
Date, signed by Buyer's President, to such effect, in substantially the
form attached as Exhibit G.
7.3.3 Buyer has executed and delivered to Seller 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 the Promissory Notes, guaranteed by Travis
Boats & Motors, Inc.;
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 Seller in this Agreement and in the documents
and instruments to be delivered by Seller 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 Seller before such expiration or
about which Seller has 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 Seller or Buyer pursuant to this Agreement will survive the Closing
and will continue in full force and effect without limitation.
8.2 Indemnification by Seller. Seller and Owner will 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:
8.2.1 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 Seller in this
Agreement, (ii) any breach of any then surviving covenant, agreement or
obligation of Seller contained in this Agreement, (iii) any third party
claim with respect to any occurrence prior to or on the Effective Date,
without regard to whether such third party claim with respect to such
occurrence is asserted before or after the Effective Date, including any
matter described on Schedule 4.8, (iv) any liability or obligation of
Seller 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 Seller 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.
8
<PAGE>
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 Buyer. Buyer will indemnify, defend and
------------------------
hold harmless Seller and Seller's officers, employees, agents, successors and
assigns, from and against:
8.3.1 all losses, damages, liabilities, deficiencies or
obligations of or to Seller 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
8.3.2 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 8.3.1(i) and
--------
under one or more of clauses 8.3.1(ii) or 8.3.1(iii) of this Section 8.3,
--------- ---------- -----------
Seller's rights to pursue its claim under clauses 8.3.1(ii) or 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 Third Party Claims. Promptly (and in any event within 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 15 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 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 8.4. 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.
8.5 Offset. Buyer will have a right of offset in the Promissory
------
Notes with respect to any matter for which Buyer is indemnified under
Section 8.2.
- -----------
9
<PAGE>
Section 9. Post-Closing Covenants.
9.1 Transfer Taxes. In the event that any Governmental Authority
--------------
of the State of Alabama or of any municipality, parish or other subdivision
thereof shall at any time impose or otherwise require or demand payment by or
from either Seller 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 Seller's sale or transfer to Buyer of the Assets, Seller will be
responsible for the payment.
9.2 Use of Seller's Name. Seller may continue use of its
--------------------
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 Seller will cease all such usage. Seller will
assign unto Buyer all right, title, and interest in and to the Intangibles,
together with the goodwill of the Business symbolized by and connected with the
use of 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 parties. 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 another party obtained pursuant to this Agreement. Notwithstanding
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 parties 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 Seller or Owner is
----------------------
required to retake possession of any products sold prior to the Effective Date,
Buyer will accept the products on consignment from Seller or Owner. Any repairs
will be pre-approved by Seller and will be paid for by Seller or Owner.
9.5 Access to Records. Seller will allow Buyer reasonable access
-----------------
to its records for a period of two 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 Accessories. All accessories inventoried on the Effective
-----------
Date.
10.2 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.
10.3 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;
Used Boats, Motors, and Trailers; Parts; Accessories; Miscellaneous Assets;
Intangibles; Deposits; Boat Show Rights; and Seller's Contracts, more
particularly described in Section 1.1 and on Schedules 1.1, 3.1 and 4.4.2), that
are used, or held for use, by Seller or Owner in the Business and in which
Seller or Owner has any right, title or interest (or in which
10
<PAGE>
Seller or Owner hereafter acquires any right, title or interest on or before the
Closing Date), but excluding all Excluded Assets.
10.4 Boat Show Rights. All agreements for space at Boat Shows,
----------------
including common stock and other ownership rights in corporations, partnerships,
and other types of entities holding Boat Shows.
10.5 Boat Shows. All boat shows in Alabama and all boat shows at
----------
which Seller has had a booth or made a presentation in any of the last five (5)
years.
10.6 Business. The retail sales and service of boats, motors,
--------
trailers, marine accessories and water sporting goods at the store located in
Huntsville, Alabama and at Boat Shows attended by the Seller.
10.7 Deposits. All customer deposits relating to customer special
--------
orders as of the Effective Date.
10.8 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).
10.9 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.
10.10 Intangibles. All intangible assets, including trademarks,
-----------
service marks, copyrights (collectively, "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 names
"Tri-Lakes Marine, Inc." and all derivative uses of such names, and all rights
granted to Buyer pursuant to the Non-Competition Agreements.
10.11 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.
10.12 Miscellaneous Assets. All furniture, fixtures, vehicles,
--------------------
equipment and other assets set forth on Schedule 1.1.
10.13 Net Cost. The actual net cost to Seller of an item, after all
--------
rebates and credits have been issued, including freight charges (if any) that
have been paid by Seller to the manufacturer.
10.14 New Boats, Motors, and Trailers. All new boats, motors, and
-------------------------------
trailers described on Schedule 1.1.
10.15 Parts. All parts inventoried on the Effective Date.
-----
10.16 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
the conduct of the Business and (ii) the classification of any item
11
<PAGE>
as a Permitted Encumbrance will not affect any liability Seller may have for
such item, including pursuant to any indemnity obligation under this Agreement.
10.17 Person. Any natural person, corporation, partnership, trust,
------
unincorporated organization, association, limited liability company,
Governmental Authority or other entity.
10.18 Used Boats, Motors, and Trailers. All used boats, motors, and
--------------------------------
trailers described on Schedule 1.1.
10.19 Other Definitions. The following terms are defined in the
-----------------
Sections indicated:
<TABLE>
<CAPTION>
Term Section
---- -------
<S> <C>
Action 8.4
Assumed Liabilities 3.1
Closing 6.1
Closing Date 6.1
Effective Date 6.1
ERISA 4.10
Excluded Assets 3.2
Financial Statements 4.7
Indemnifying Party; Indemnified Party 8.4
Marks 10.10
Non-Competition Agreements 7.2.4
Promissory Notes 2.1
Purchase Price 2.1
Seller's Contracts 3.1
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 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:
Travis Boating Center Alabama, Inc.
13045 Research Blvd.
Austin, Texas 78750
Attention: Mike Perrine, Chief Financial Officer
Telecopy: 512/250-1207
12
<PAGE>
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 Seller and Owner at:
Tri-Lakes Marine, Inc.
38 Marina Lane
Winchester, TN 37398
With a copy (which will not constitute notice) transmitted by
telecopier to:
Copeland, Conley & Hazard
111 West Grundy Street
P.O. Box 176
Tullahoma, Tennessee 37388
Attention: Tom Copeland
Telecopy: 615/455-1753
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.
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. Seller acknowledges 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 Seller of its
obligations under this Agreement, and Seller 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. Neither this Agreement nor any of its provisions may
------
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 Texas, without regard to the conflicts of laws rules of
Texas. Any litigation resulting from any dispute among the parties must be filed
in Travis County, Texas.
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.
13
<PAGE>
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. Seller 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.
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 into 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 of this Agreement. 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 benefited by such provision or any other
provisions of this Agreement.
11.15 Construction. This Agreement has been negotiated by Buyer and
------------
Seller 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.
14
<PAGE>
The parties have executed this Agreement as of the day and year first above
written.
BUYER:
-----
TRAVIS BOATING CENTER ALABAMA, INC.
By: /s/ Mark Walton
----------------------------
President
----------------------------
----------------------------
SELLER:
------
TRI-LAKES MARINE, INC.
By: /s/ Charles R. Bondurant
----------------------------
Charles R. Bondurant
President
OWNER:
-----
/s/ Charles R. Bondurant
--------------------------------
CHARLES R. BONDURANT
/s/ Joe Bondurant
--------------------------------
JOE BONDURANT
/s/ Tom Ed Bondurant
--------------------------------
TOM ED BONDURANT
15
<PAGE>
EXHIBIT A
PROMISSORY NOTE
$90,000.00 November 1, 1996
FOR VALUE RECEIVED, the undersigned, Travis Boating Center Alabama, Inc., a
Texas corporation ("Maker"), promises to pay to the order of Tri-Lakes Marine,
Inc. ("Payee"), at Payee's address at _______________________________________,
______________, the principal sum of
________________________________________________ and ____/100 DOLLARS
($___________.____), together with simple interest thereon from the date hereof
until maturity, at the rate of Eight and One-Quarter percent (8.25%) per annum.
After maturity until paid, interest will accrue on the principal outstanding at
the rate of ____________ percent (____%) per annum. This Note is delivered
pursuant to the Asset Purchase Agreement dated as of November 1, 1996 among
Maker, Payee and others (the "Purchase Agreement"). Principal and interest are
payable in sixty (60) equal monthly installments of
____________________________________ Dollars ($ _________.____) and a final
installment of ___________________________________ Dollars ($ _________.____),
the first of which is due and payable on March 30, 1997, and the remainder of
which are due and payable on the last day of each successive month.
Maker reserves the right to prepay this Note in whole or in part at any
time prior to maturity without penalty. Any prepayment will be applied first
toward the payment of accrued interest and next to the payment of principal.
Maker and all endorsers, guarantors and sureties of this Note severally (i)
waive presentment for payment, demand, notice of intent to accelerate, notice of
acceleration, protest and notice of protest, notice of dishonor and diligence in
collecting and the bringing of suit against any other party, and (ii) agree to
all renewals, extensions, partial payments, releases and substitutions of
security, in whole or in part, with or without notice, before or after maturity.
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, will become due and payable. No delay in the
exercise of the option of acceleration will 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, Maker agrees to pay all costs of collection and reasonable
attorneys' fees.
Maker will have the right to offset, against any amounts due and payable
under this Note, any sums with respect to any matter for which Maker is
indemnified under Section 8.2 of the
<PAGE>
Purchase Agreement. This Note shall not be assigned by Payee without the
written consent of Maker.
It is further agreed and declared that this Note is made and executed
under, and in all respects is to be construed and enforced in accordance with,
the laws of the State of Texas and the United States of America.
TRAVIS BOATING CENTER ALABAMA, INC.
By:
------------------------
------------------------
------------------------
GUARANTY
--------
The undersigned hereby guarantees the prompt payment when due, and at all
times thereafter, of all of Maker's indebtedness evidenced by this Note,
including interest thereon and costs of collection and reasonable attorneys'
fees incurred by the holder of this Note by reason of default on this Guaranty.
This Guaranty will not terminate until this Note has been paid in full.
TRAVIS BOATS & MOTORS, INC.,
a Texas corporation
By:
------------------------
------------------------
------------------------
Date:
------------------------
<PAGE>
EXHIBIT A-1
PROMISSORY NOTE
$28,000.00 November 1, 1996
FOR VALUE RECEIVED, the undersigned, Travis Boating Center Alabama, Inc., a
Texas corporation ("Maker"), promises to pay to the order of Charles R.
Bondurant ("Payee"), at Payee's address at
_______________________________________, ______________, the principal sum of
________________________________________________ and ____/100 DOLLARS
($___________.____), together with simple interest thereon from the date hereof
until maturity, at the rate of Eight and One-Quarter percent (8.25%) per annum.
After maturity until paid, interest will accrue on the principal outstanding at
the rate of ____________ percent (____%) per annum. This Note is delivered
pursuant to the Asset Purchase Agreement dated as of November 1, 1996 among
Maker, Payee and others (the "Purchase Agreement"). Principal and interest are
payable in sixty (60) equal monthly installments of
____________________________________ Dollars ($ _________.____) and a final
installment of ___________________________________ Dollars ($ _________.____),
the first of which is due and payable on March 30, 1997, and the remainder of
which are due and payable on the last day of each successive month.
Maker reserves the right to prepay this Note in whole or in part at any
time prior to maturity without penalty. Any prepayment will be applied first
toward the payment of accrued interest and next to the payment of principal.
Maker and all endorsers, guarantors and sureties of this Note severally (i)
waive presentment for payment, demand, notice of intent to accelerate, notice of
acceleration, protest and notice of protest, notice of dishonor and diligence in
collecting and the bringing of suit against any other party, and (ii) agree to
all renewals, extensions, partial payments, releases and substitutions of
security, in whole or in part, with or without notice, before or after maturity.
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, will become due and payable. No delay in the
exercise of the option of acceleration will 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, Maker agrees to pay all costs of collection and reasonable
attorneys' fees.
Maker will have the right to offset, against any amounts due and payable
under this Note, any sums with respect to any matter for which Maker is
indemnified under Section 8.2 of the
<PAGE>
Purchase Agreement. This Note shall not be assigned by Payee without the
written consent of Maker.
It is further agreed and declared that this Note is made and executed
under, and in all respects is to be construed and enforced in accordance with,
the laws of the State of Texas and the United States of America.
TRAVIS BOATING CENTER ALABAMA, INC.
By:
------------------------
------------------------
------------------------
GUARANTY
--------
The undersigned hereby guarantees the prompt payment when due, and at all
times thereafter, of all of Maker's indebtedness evidenced by this Note,
including interest thereon and costs of collection and reasonable attorneys'
fees incurred by the holder of this Note by reason of default on this Guaranty.
This Guaranty will not terminate until this Note has been paid in full.
TRAVIS BOATS & MOTORS, INC.,
a Texas corporation
By:
------------------------
------------------------
------------------------
Date:
--------------------------
<PAGE>
EXHIBIT A-2
PROMISSORY NOTE
$28,000.00 November 1, 1996
FOR VALUE RECEIVED, the undersigned, Travis Boating Center Alabama, Inc., a
Texas corporation ("Maker"), promises to pay to the order of Joe Bondurant
("Payee"), at Payee's address at _______________________________________,
______________, the principal sum of
________________________________________________ and ____/100 DOLLARS
($___________.____), together with simple interest thereon from the date hereof
until maturity, at the rate of Eight and One-Quarter percent (8.25%) per annum.
After maturity until paid, interest will accrue on the principal outstanding at
the rate of ____________ percent (____%) per annum. This Note is delivered
pursuant to the Asset Purchase Agreement dated as of November 1, 1996 among
Maker, Payee and others (the "Purchase Agreement"). Principal and interest are
payable in sixty (60) equal monthly installments of
____________________________________ Dollars ($ _________.____) and a final
installment of ___________________________________ Dollars ($ _________.____),
the first of which is due and payable on March 30, 1997, and the remainder of
which are due and payable on the last day of each successive month.
Maker reserves the right to prepay this Note in whole or in part at any
time prior to maturity without penalty. Any prepayment will be applied first
toward the payment of accrued interest and next to the payment of principal.
Maker and all endorsers, guarantors and sureties of this Note severally (i)
waive presentment for payment, demand, notice of intent to accelerate, notice of
acceleration, protest and notice of protest, notice of dishonor and diligence in
collecting and the bringing of suit against any other party, and (ii) agree to
all renewals, extensions, partial payments, releases and substitutions of
security, in whole or in part, with or without notice, before or after maturity.
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, will become due and payable. No delay in the
exercise of the option of acceleration will 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, Maker agrees to pay all costs of collection and reasonable
attorneys' fees.
Maker will have the right to offset, against any amounts due and payable
under this Note, any sums with respect to any matter for which Maker is
indemnified under Section 8.2 of the
<PAGE>
Purchase Agreement. This Note shall not be assigned by Payee without the
written consent of Maker.
It is further agreed and declared that this Note is made and executed
under, and in all respects is to be construed and enforced in accordance with,
the laws of the State of Texas and the United States of America.
TRAVIS BOATING CENTER ALABAMA, INC.
By:
------------------------
------------------------
------------------------
GUARANTY
--------
The undersigned hereby guarantees the prompt payment when due, and at all
times thereafter, of all of Maker's indebtedness evidenced by this Note,
including interest thereon and costs of collection and reasonable attorneys'
fees incurred by the holder of this Note by reason of default on this Guaranty.
This Guaranty will not terminate until this Note has been paid in full.
TRAVIS BOATS & MOTORS, INC.,
a Texas corporation
By:
------------------------
------------------------
------------------------
Date:
---------------------------
<PAGE>
EXHIBIT A-3
PROMISSORY NOTE
$14,000.00 November 1, 1996
FOR VALUE RECEIVED, the undersigned, Travis Boating Center Alabama, Inc., a
Texas corporation ("Maker"), promises to pay to the order of Tom Ed Bondurant
("Payee"), at Payee's address at _______________________________________,
______________, the principal sum of
________________________________________________ and ____/100 DOLLARS
($___________.____), together with simple interest thereon from the date hereof
until maturity, at the rate of Eight and One-Quarter percent (8.25%) per annum.
After maturity until paid, interest will accrue on the principal outstanding at
the rate of ____________ percent (____%) per annum. This Note is delivered
pursuant to the Asset Purchase Agreement dated as of November 1, 1996 among
Maker, Payee and others (the "Purchase Agreement"). Principal and interest are
payable in sixty (60) equal monthly installments of
____________________________________ Dollars ($ _________.____) and a final
installment of ___________________________________ Dollars ($ _________.____),
the first of which is due and payable on March 30, 1997, and the remainder of
which are due and payable on the last day of each successive month.
Maker reserves the right to prepay this Note in whole or in part at any
time prior to maturity without penalty. Any prepayment will be applied first
toward the payment of accrued interest and next to the payment of principal.
Maker and all endorsers, guarantors and sureties of this Note severally (i)
waive presentment for payment, demand, notice of intent to accelerate, notice of
acceleration, protest and notice of protest, notice of dishonor and diligence in
collecting and the bringing of suit against any other party, and (ii) agree to
all renewals, extensions, partial payments, releases and substitutions of
security, in whole or in part, with or without notice, before or after maturity.
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, will become due and payable. No delay in the
exercise of the option of acceleration will 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, Maker agrees to pay all costs of collection and reasonable
attorneys' fees.
Maker will have the right to offset, against any amounts due and payable
under this Note, any sums with respect to any matter for which Maker is
indemnified under Section 8.2 of the
<PAGE>
Purchase Agreement. This Note shall not be assigned by Payee without the
written consent of Maker.
It is further agreed and declared that this Note is made and executed
under, and in all respects is to be construed and enforced in accordance with,
the laws of the State of Texas and the United States of America.
TRAVIS BOATING CENTER ALABAMA, INC.
By:
------------------------
------------------------
------------------------
GUARANTY
--------
The undersigned hereby guarantees the prompt payment when due, and at all
times thereafter, of all of Maker's indebtedness evidenced by this Note,
including interest thereon and costs of collection and reasonable attorneys'
fees incurred by the holder of this Note by reason of default on this Guaranty.
This Guaranty will not terminate until this Note has been paid in full.
TRAVIS BOATS & MOTORS, INC.,
a Texas corporation
By:
------------------------
------------------------
------------------------
Date:
--------------------------
<PAGE>
EXHIBIT C
BILL OF SALE
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, Tri-Lakes Marine,
Inc., an Alabama corporation ("Seller"), for and in consideration of the payment
of such good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, and pursuant to the Asset Purchase Agreement (the "Purchase
Agreement"), made as of November 1, 1996 by and among Seller, TRAVIS BOATING
CENTER ALABAMA, INC., a Texas corporation ("Purchaser"), Charles R. Bondurant,
Joe Bondurant, and Tom Ed Bondurant, does hereby transfer, grant, bargain, sell
and deliver to Purchaser, its successors and assigns, the assets of Seller that
are listed on Schedule 1.1 attached hereto, the Intangibles, the Deposits and
------------
the Boat Show Rights, all as the same shall exist as of the date hereof
(collectively, the "Assets"). Capitalized terms used herein without definition
will have the meanings assigned to them in the Purchase Agreement.
TO HAVE AND TO HOLD, all and singular, the said Assets hereby conveyed,
transferred, granted, bargained, sold and delivered to Purchaser, its successors
and assigns, to and for their own use and benefit forever.
Seller represents and warrants that it is the sole and lawful owner in
every respect of all of the Assets and that all of the Assets are being
transferred free and clear of any and all liabilities, obligations, liens,
claims and encumbrances of every kind and character whatsoever. Seller does
hereby bind itself, its successors and assigns, to warrant and defend such title
to the Assets unto Purchaser, its successors and assigns, against every person
whosoever claims or might claim such Assets, any part thereof or any interest
therein.
Seller, for itself, its successors and assigns, further covenants and
agrees that Seller and its successors and assigns will do or cause to be done
all such further acts and will execute, acknowledge and deliver, or will cause
to be executed, acknowledged and delivered, any and all such further deeds,
assignments, transfers and conveyances, powers of attorney and assurances as
Purchaser, its successors and assigns, may reasonably require (i) for the better
assuring, assigning, transferring and conveying the Assets, all and singular,
unto Purchaser, its successors and assigns; (ii) to protect the right, title and
interest of Purchaser, its successors and assigns, in and to, and their
enjoyment of, all and singular, the Assets; and (iii) as may be appropriate
otherwise to carry out the transactions contemplated by the Purchase Agreement.
Seller, for itself, its successors and assigns, irrevocably constitutes and
appoints Purchaser, its successors and assigns, and each of them, the true and
lawful attorney of Seller, its successors and assigns, with full power of
substitution and gives and grants unto Purchaser, its successors and assigns,
and each of them, full power and authority in the name of Seller, its successors
and assigns, at any time and from time to time, to demand, sue for, recover and
receive any and all rights, demands, claims and choses in action of every kind
and description whatsoever incident or relating to the Assets, for the purpose
of fully vesting in Purchaser, its successors and assigns, all the right, title
and interest in and to the Assets, all and singular.
<PAGE>
This instrument will be binding upon Seller, its successors and assigns,
and will inure to the benefit of Purchaser, its successors and assigns.
This Bill of Sale will be governed by, and construed and interpreted in
accordance with, the laws of the State of Texas.
IN WITNESS WHEREOF, this Bill of Sale is executed on November 1, 1996
Seller:
TRI-LAKES MARINE, INC.
By:
------------------------------------
Charles R. Bondurant, President
THE STATE OF ________ (S)
(S)
COUNTY OF ___________ (S)
The foregoing instrument was ACKNOWLEDGED before me this _____ day of
_____________, by _________________________, the ____________________________ of
_______________________, a ________ corporation, on behalf of said corporation.
[ S E A L ]
Notary Public, State of __________
My Commission Expires:
(Printed Name of Notary Public)
-------------------------------
<PAGE>
EXHIBIT D
ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Agreement"), dated as of November
1, 1996 by and between TRAVIS BOATING CENTER ALABAMA, INC., a Texas corporation
("Buyer"), and TRI-LAKES MARINE, INC. a Tennessee corporation ("Seller").
Capitalized terms used herein without definition will have the meanings assigned
to them in the Purchase Agreement.
WHEREAS, Buyer and Seller have entered into that certain Purchase Agreement,
dated as of the date hereof (the "Purchase Agreement"), pursuant to the terms of
which Buyer agrees to buy, and Seller agrees to sell, certain assets of Seller;
WHEREAS, pursuant to Section 3.1 of the Purchase Agreement, Buyer has agreed
to assume certain debts and obligations of Seller;
NOW, THEREFORE, for and in consideration of the sale of the Assets pursuant
to the Purchase Agreement, Seller hereby assigns to Buyer, and Buyer hereby
assumes and undertakes to pay, perform and discharge the liabilities and
obligations set forth in Section 3.1 and on Schedule 3.1 of, the Purchase
Agreement, that accrue from and after the Effective Date.
Buyer does not agree to pay, assume, perform or discharge any obligations of
whatever kind (whether direct or indirect, absolute or contingent, known or
unknown, matured or unmatured, or otherwise) in connection with the Excluded
Assets or any obligation that it does not expressly assume hereunder or under
the Purchase Agreement.
This Agreement will be binding upon, and inure to the benefit of, the parties
hereto and their respective successors in interest and permitted assigns.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the date first above written.
Seller:
TRI-LAKES MARINE, INC.
By:
-------------------------------------
Charles R. Bondurant, President
<PAGE>
Buyer:
TRAVIS BOATING CENTER ALABAMA, INC.
By:
---------------------------------
---------------------------------
---------------------------------
THE STATE OF ________ (S)
(S)
COUNTY OF ___________ (S)
On this day, before me, a Notary Public, duly commissioned and qualified and
acting within and for the state and county aforesaid, appeared in person,
____________________, who stated that he was the ______________ of
________________________, a ___________ corporation, and was duly authorized in
his capacity to execute the foregoing instrument for and in the name and on
behalf of said corporation; and further stated that he had so signed, executed
and delivered said instrument for the consideration, uses and purposes therein
mentioned and set forth.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal on this
______ day of ____________.
[S E A L]
Notary Public, State of _________
Notary's Printed Name:
Notary's Commission Expires:
THE STATE OF ________ (S)
(S)
COUNTY OF ___________ (S)
On this day, before me, a Notary Public, duly commissioned and qualified
and acting within and for the state and county aforesaid, appeared in person,
____________________, who stated that he was the ______________ of Travis
Boating Center ______, Inc., a Texas corporation, and was duly authorized in his
capacity to execute the foregoing instrument for and in the name and on behalf
of said corporation; and further stated that he had so signed, executed
<PAGE>
and delivered said instrument for the consideration, uses and purposes therein
mentioned and set forth.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal on this
______ day of ____________.
[S E A L]
Notary Public, State of __________
Notary's Printed Name:
Notary's Commission Expires:
<PAGE>
EXHIBIT E-1
NON-COMPETITION AGREEMENT (INDIVIDUAL)
This Non-Competition Agreement (the "Agreement"), dated as of November 1,
1996 is among TRAVIS BOATS & MOTORS, INC., a Texas corporation ("Travis"),
TRAVIS BOATING CENTER ALABAMA, INC., a Texas corporation and wholly owned
subsidiary of Travis ("Buyer"), both having an office for the purpose of notice
at 13045 Research Blvd., Austin, Texas 78750, and Charles R. Bondurant, an
individual residing at ________________________________ ("Owner").
WHEREAS, Buyer has agreed to acquire certain of the assets TRI-LAKES
MARINE, INC., a Tennessee corporation ("Seller"), pursuant to that certain asset
purchase agreement dated November 1, 1996 (the "Purchase Agreement"), among
Buyer, Seller and certain stockholders of Seller (the capitalized terms used
herein have the meanings assigned to them in the Purchase Agreement unless
otherwise defined herein); and
WHEREAS, Owner owns 40% of the outstanding shares of capital stock of
Seller; and
WHEREAS, Owner has established a valuable, far-reaching personal reputation
in the boat, boat accessory and water sports sales business; and
WHEREAS, pursuant to the Purchase Agreement, Buyer will acquire Seller's
tradenames "Tri-Lakes Marine, Inc.", "___________________",
"___________________", and all derivative uses of such names and the goodwill
associated therewith; and
WHEREAS, Owner's personal reputation and identification with the Business
is a significant portion of the value of the Business; and
WHEREAS, the parties hereto agree that the reasonable market area of a
business such as the Business is approximately a 150-mile radius; and
WHEREAS, it is a condition precedent to the closing of the purchase under
the Purchase Agreement that Owner shall have entered into this Agreement;
NOW, THEREFORE, in consideration of the foregoing, and of the mutual
covenants, terms and conditions hereinafter expressed, Travis, Buyer and Owner
agree as follows:
Section 1.
----------
1.1 Non-Competition. Owner will not, for any reason:
---------------
1.1.1 Engage in a business or businesses, directly or indirectly,
that competes with Buyer in its conduct of the Business, or otherwise
receive compensation for any
services rendered regarding any aspect of the boat, boat accessory or water
sport sales business anywhere within 150 miles of the location of the
Business.
1.1.2 Participate, directly or indirectly, in any business that
competes with Buyer and the Business at any Boat Show.
1.1.3 Engage in a business or businesses, directly or indirectly,
that competes with Travis or any Affiliate of Travis in their conduct of
the boat, boat accessory or water sport sales business, or otherwise
receive compensation for any services rendered regarding any aspect
<PAGE>
of the boat, motor, trailer, marine accessory or water sport sales business
anywhere within 150 miles of the location of any store operated by Travis
or any Affiliate of Travis.
1.1.4 Engage or participate, directly or indirectly, in any
business which is substantially similar to that of Travis or any Affiliate
of Travis, including, without limitation, serving as a consultant,
administrator, officer, director, employee, manager, landlord, lender,
guarantor, or in any similar or related capacity or otherwise receive
compensation for services rendered regarding any aspect of the boat, boat
accessory or water sport sales business anywhere within 150 miles of the
location of any store operated by Buyer, Travis or any Affiliate of Travis.
1.2 Owner agrees that Travis and Buyer will not be able to recognize the
value of Seller's assets and the Business unless Buyer is able to engage in the
successful operation of the Business, that the non-competition provisions set
forth in Section 1.1 are ancillary to the Purchase Agreement, that the Purchase
Agreement is an otherwise enforceable agreement, and that the non-competition
provisions in this Agreement are therefore ancillary to an otherwise enforceable
agreement. Owner further agrees that the non-competition provisions set forth
above are supported by independent valuable consideration and contain reasonable
limitations as to the time, geographical area, and scope of activity for which
he is to be restrained; and that the limitations of the non-competition
provisions do not impose a greater restraint than is necessary to protect the
goodwill or other business interests of Travis and Buyer. It is agreed by the
parties that the restrictions contained in Section 1.1 impose, on the date of
the execution of this Agreement, a reasonable restraint on Seller in light of
the activities and businesses of Travis and Buyer and their future plans.
1.3 For the purposes of this Agreement, Owner will be deemed to be
engaging or participating in a business or businesses if he is engaged in such
business or businesses, directly or indirectly, whether for his own account or
for that of any other person, firm or corporation, and whether as a stockholder
(except solely as a stockholder in a publicly held corporation with more than
500 holders of common stock and as to which he owns, in the aggregate, less than
5% of any class of stock), director, officer, employee, consultant, partner,
joint venturer, principal, agent, proprietor, consultant, manager, independent
contractor, sales representative, landlord, lessor, lender, guarantor, or in any
other capacity.
Section 2.
----------
2.1 Term. The term of this Agreement will commence on the date hereof
----
and will terminate on November 1, 2001.
2.2 Remedies. Owner acknowledges that a breach of any of the provisions
--------
of Section 1 will cause irreparable harm to Travis and Buyer, for which there
may be no adequate remedy at law and for which the ascertainment of damages
would be difficult. Therefore, Travis and Buyer will be entitled to specific
performance of Section 1 hereof, in addition to, and without having to prove the
inadequacy of, other remedies at law, as well as injunctive relief (without
being required to post bond or other security), and, if such legal action
becomes necessary, Travis and Buyer will be entitled to recover reasonable
attorney's fees and costs of court incurred in
<PAGE>
connection with such action. Nothing contained herein will be construed as
prohibiting Travis and Buyer from pursuing any other remedies available to it
for such breach, including the recovery of money damages.
2.3 Notices. Notices and demands provided for under this Agreement will
-------
be in writing and will be deemed to be fully given and received if sent by
registered mail, postage prepaid, to the respective party at the address listed
at the beginning of this Agreement.
2.4 Assignment. Buyer or Travis may assign its rights or obligations
----------
hereunder to any Affiliate of Buyer or Travis or any successor to the business
of Buyer or Travis, by merger, consolidation, sale of assets, or otherwise.
2.5 Reformation; Severability. Whenever possible, each provision of
-------------------------
this Agreement will be interpreted so as to be legal, valid and enforceable
under applicable law, but in the event any provision of this Agreement is held
to be prohibited, unenforceable or invalid under applicable law, the parties
agree that such provision will automatically be deemed modified for purposes of
performance of this Agreement to the extent necessary to render it lawful, valid
and enforceable, or if such modification is not possible without materially
altering the intent of the parties, that such provision will automatically be
deemed severed from this Agreement to the extent of such prohibition,
unenforceability, or invalidity. The validity of the remaining provisions of
this Agreement will not be altered by any such modification or severance.
2.6 Amendment of Agreement. Except as set forth in Section 2.5, this
----------------------
Agreement may not be amended, modified, or supplemented except by a writing
signed by all parties.
2.7 Governing Law; Venue. THIS AGREEMENT WILL BE CONSTRUED AND
--------------------
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO
THE CONFLICT OF LAWS RULES OF TEXAS. Each of the undersigned irrevocably agrees
that any legal action or proceeding brought against said Person with respect to
this Agreement will be brought in the appropriate court in Travis County, Texas
and hereby waives any right to be sued in any other place.
2.8 Construction. This Agreement constitutes the entire Agreement
------------
between the parties and will be binding upon and inure to the benefit of the
parties hereto and their permitted successors and assigns. No terms or
understandings not herein contained will apply unless in writing and signed by
all parties subsequent to execution of this Agreement. This Agreement is
intended to benefit only the parties hereto and no third party will have any
right to enforce this Agreement or receive any benefits hereof.
<PAGE>
IN WITNESS WHEREOF, Travis, Buyer and Owner have executed this Agreement,
in the manner appropriate to each, as of the day and year first above written.
TRAVIS BOATS & MOTORS, INC.
By:
---------------------------
---------------------------
---------------------------
TRAVIS BOATING CENTER ALABAMA, INC.
By:
---------------------------
---------------------------
---------------------------
Charles R. Bondurant
---------------------------
<PAGE>
EXHIBIT E-2
NON-COMPETITION AGREEMENT (INDIVIDUAL)
This Non-Competition Agreement (the "Agreement"), dated as of November 1,
1996 is among TRAVIS BOATS & MOTORS, INC., a Texas corporation ("Travis"),
TRAVIS BOATING CENTER ALABAMA, INC., a Texas corporation and wholly owned
subsidiary of Travis ("Buyer"), both having an office for the purpose of notice
at 13045 Research Blvd., Austin, Texas 78750, and Joe Bondurant, an individual
residing at ________________________________ ("Owner").
WHEREAS, Buyer has agreed to acquire certain of the assets TRI-LAKES
MARINE, INC., a Tennessee corporation ("Seller"), pursuant to that certain asset
purchase agreement dated November 1, 1996 (the "Purchase Agreement"), among
Buyer, Seller and certain stockholders of Seller (the capitalized terms used
herein have the meanings assigned to them in the Purchase Agreement unless
otherwise defined herein); and
WHEREAS, Owner owns 40% of the outstanding shares of capital stock of
Seller; and
WHEREAS, Owner has established a valuable, far-reaching personal reputation
in the boat, boat accessory and water sports sales business; and
WHEREAS, pursuant to the Purchase Agreement, Buyer will acquire Seller's
tradenames "Tri-Lakes Marine, Inc.", "___________________",
"___________________", and all derivative uses of such names and the goodwill
associated therewith; and
WHEREAS, Owner's personal reputation and identification with the Business
is a significant portion of the value of the Business; and
WHEREAS, the parties hereto agree that the reasonable market area of a
business such as the Business is approximately a 150-mile radius; and
WHEREAS, it is a condition precedent to the closing of the purchase under
the Purchase Agreement that Owner shall have entered into this Agreement;
NOW, THEREFORE, in consideration of the foregoing, and of the mutual
covenants, terms and conditions hereinafter expressed, Travis, Buyer and Owner
agree as follows:
Section 1.
----------
1.1 Non-Competition. Owner will not, for any reason:
---------------
1.1.1 Engage in a business or businesses, directly or indirectly,
that competes with Buyer in its conduct of the Business, or otherwise
receive compensation for any
<PAGE>
services rendered regarding any aspect of the boat, boat accessory or water
sport sales business anywhere within 150 miles of the location of the
Business.
1.1.2 Participate, directly or indirectly, in any business that
competes with Buyer and the Business at any Boat Show.
1.1.3 Engage in a business or businesses, directly or indirectly,
that competes with Travis or any Affiliate of Travis in their conduct of
the boat, boat accessory or water sport sales business, or otherwise
receive compensation for any services rendered regarding any aspect of the
boat, motor, trailer, marine accessory or water sport sales business
anywhere within 150 miles of the location of any store operated by Travis
or any Affiliate of Travis.
1.1.4 Engage or participate, directly or indirectly, in any
business which is substantially similar to that of Travis or any Affiliate
of Travis, including, without limitation, serving as a consultant,
administrator, officer, director, employee, manager, landlord, lender,
guarantor, or in any similar or related capacity or otherwise receive
compensation for services rendered regarding any aspect of the boat, boat
accessory or water sport sales business anywhere within 150 miles of the
location of any store operated by Buyer, Travis or any Affiliate of Travis.
1.2 Owner agrees that Travis and Buyer will not be able to recognize the
value of Seller's assets and the Business unless Buyer is able to engage in the
successful operation of the Business, that the non-competition provisions set
forth in Section 1.1 are ancillary to the Purchase Agreement, that the Purchase
Agreement is an otherwise enforceable agreement, and that the non-competition
provisions in this Agreement are therefore ancillary to an otherwise enforceable
agreement. Owner further agrees that the non-competition provisions set forth
above are supported by independent valuable consideration and contain reasonable
limitations as to the time, geographical area, and scope of activity for which
he is to be restrained; and that the limitations of the non-competition
provisions do not impose a greater restraint than is necessary to protect the
goodwill or other business interests of Travis and Buyer. It is agreed by the
parties that the restrictions contained in Section 1.1 impose, on the date of
the execution of this Agreement, a reasonable restraint on Seller in light of
the activities and businesses of Travis and Buyer and their future plans.
1.3 For the purposes of this Agreement, Owner will be deemed to be
engaging or participating in a business or businesses if he is engaged in such
business or businesses, directly or indirectly, whether for his own account or
for that of any other person, firm or corporation, and whether as a stockholder
(except solely as a stockholder in a publicly held corporation with more than
500 holders of common stock and as to which he owns, in the aggregate, less than
5% of any class of stock), director, officer, employee, consultant, partner,
joint venturer, principal, agent, proprietor, consultant, manager, independent
contractor, sales representative, landlord, lessor, lender, guarantor, or in any
other capacity.
<PAGE>
Section 2.
----------
2.1 Term. The term of this Agreement will commence on the date hereof
----
and will terminate on November 1, 2001.
2.2 Remedies. Owner acknowledges that a breach of any of the provisions
--------
of Section 1 will cause irreparable harm to Travis and Buyer, for which there
may be no adequate remedy at law and for which the ascertainment of damages
would be difficult. Therefore, Travis and Buyer will be entitled to specific
performance of Section 1 hereof, in addition to, and without having to prove the
inadequacy of, other remedies at law, as well as injunctive relief (without
being required to post bond or other security), and, if such legal action
becomes necessary, Travis and Buyer will be entitled to recover reasonable
attorney's fees and costs of court incurred in connection with such action.
Nothing contained herein will be construed as prohibiting Travis and Buyer from
pursuing any other remedies available to it for such breach, including the
recovery of money damages.
2.3 Notices. Notices and demands provided for under this Agreement will
-------
be in writing and will be deemed to be fully given and received if sent by
registered mail, postage prepaid, to the respective party at the address listed
at the beginning of this Agreement.
2.4 Assignment. Buyer or Travis may assign its rights or obligations
----------
hereunder to any Affiliate of Buyer or Travis or any successor to the business
of Buyer or Travis, by merger, consolidation, sale of assets, or otherwise.
2.5 Reformation; Severability. Whenever possible, each provision of
-------------------------
this Agreement will be interpreted so as to be legal, valid and enforceable
under applicable law, but in the event any provision of this Agreement is held
to be prohibited, unenforceable or invalid under applicable law, the parties
agree that such provision will automatically be deemed modified for purposes of
performance of this Agreement to the extent necessary to render it lawful, valid
and enforceable, or if such modification is not possible without materially
altering the intent of the parties, that such provision will automatically be
deemed severed from this Agreement to the extent of such prohibition,
unenforceability, or invalidity. The validity of the remaining provisions of
this Agreement will not be altered by any such modification or severance.
2.6 Amendment of Agreement. Except as set forth in Section 2.5, this
----------------------
Agreement may not be amended, modified, or supplemented except by a writing
signed by all parties.
2.7 Governing Law; Venue. THIS AGREEMENT WILL BE CONSTRUED AND
--------------------
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO
THE CONFLICT OF LAWS RULES OF TEXAS. Each of the undersigned irrevocably agrees
that any legal action or proceeding brought against said Person with respect to
this Agreement will be brought in the appropriate court in Travis County, Texas
and hereby waives any right to be sued in any other place.
2.8 Construction. This Agreement constitutes the entire Agreement
------------
between the parties and will be binding upon and inure to the benefit of the
parties hereto and their permitted
<PAGE>
successors and assigns. No terms or understandings not herein contained will
apply unless in writing and signed by all parties subsequent to execution of
this Agreement. This Agreement is intended to benefit only the parties hereto
and no third party will have any right to enforce this Agreement or receive any
benefits hereof.
IN WITNESS WHEREOF, Travis, Buyer and Owner have executed this Agreement,
in the manner appropriate to each, as of the day and year first above written.
TRAVIS BOATS & MOTORS, INC.
By:
---------------------------
---------------------------
---------------------------
TRAVIS BOATING CENTER ALABAMA, INC.
By:
---------------------------
---------------------------
---------------------------
Joe Bondurant
---------------------------
<PAGE>
EXHIBIT E-3
NON-COMPETITION AGREEMENT (INDIVIDUAL)
This Non-Competition Agreement (the "Agreement"), dated as of November 1,
1996 is among TRAVIS BOATS & MOTORS, INC., a Texas corporation ("Travis"),
TRAVIS BOATING CENTER ALABAMA, INC., a Texas corporation and wholly owned
subsidiary of Travis ("Buyer"), both having an office for the purpose of notice
at 13045 Research Blvd., Austin, Texas 78750, and Tom Ed Bondurant, an
individual residing at ________________________________ ("Owner").
WHEREAS, Buyer has agreed to acquire certain of the assets TRI-LAKES
MARINE, INC., a Tennessee corporation ("Seller"), pursuant to that certain asset
purchase agreement dated November 1, 1996 (the "Purchase Agreement"), among
Buyer, Seller and certain stockholders of Seller (the capitalized terms used
herein have the meanings assigned to them in the Purchase Agreement unless
otherwise defined herein); and
WHEREAS, Owner owns 20% of the outstanding shares of capital stock of
Seller; and
WHEREAS, Owner has established a valuable, far-reaching personal reputation
in the boat, boat accessory and water sports sales business; and
WHEREAS, pursuant to the Purchase Agreement, Buyer will acquire Seller's
tradenames "Tri-Lakes Marine, Inc.", "___________________",
"___________________", and all derivative uses of such names and the goodwill
associated therewith; and
WHEREAS, Owner's personal reputation and identification with the Business
is a significant portion of the value of the Business; and
WHEREAS, the parties hereto agree that the reasonable market area of a
business such as the Business is approximately a 150-mile radius; and
WHEREAS, it is a condition precedent to the closing of the purchase under
the Purchase Agreement that Owner shall have entered into this Agreement;
NOW, THEREFORE, in consideration of the foregoing, and of the mutual
covenants, terms and conditions hereinafter expressed, Travis, Buyer and Owner
agree as follows:
Section 1.
----------
1.1 Non-Competition. Owner will not, for any reason:
---------------
1.1.1 Engage in a business or businesses, directly or indirectly,
that competes with Buyer in its conduct of the Business, or otherwise
receive compensation for any
<PAGE>
services rendered regarding any aspect of the boat, boat accessory or water
sport sales business anywhere within 150 miles of the location of the
Business.
1.1.2 Participate, directly or indirectly, in any business that
competes with Buyer and the Business at any Boat Show.
1.1.3 Engage in a business or businesses, directly or indirectly,
that competes with Travis or any Affiliate of Travis in their conduct of
the boat, boat accessory or water sport sales business, or otherwise
receive compensation for any services rendered regarding any aspect of the
boat, motor, trailer, marine accessory or water sport sales business
anywhere within 150 miles of the location of any store operated by Travis
or any Affiliate of Travis.
1.1.4 Engage or participate, directly or indirectly, in any
business which is substantially similar to that of Travis or any Affiliate
of Travis, including, without limitation, serving as a consultant,
administrator, officer, director, employee, manager, landlord, lender,
guarantor, or in any similar or related capacity or otherwise receive
compensation for services rendered regarding any aspect of the boat, boat
accessory or water sport sales business anywhere within 150 miles of the
location of any store operated by Buyer, Travis or any Affiliate of Travis.
1.2 Owner agrees that Travis and Buyer will not be able to recognize the
value of Seller's assets and the Business unless Buyer is able to engage in the
successful operation of the Business, that the non-competition provisions set
forth in Section 1.1 are ancillary to the Purchase Agreement, that the Purchase
Agreement is an otherwise enforceable agreement, and that the non-competition
provisions in this Agreement are therefore ancillary to an otherwise enforceable
agreement. Owner further agrees that the non-competition provisions set forth
above are supported by independent valuable consideration and contain reasonable
limitations as to the time, geographical area, and scope of activity for which
he is to be restrained; and that the limitations of the non-competition
provisions do not impose a greater restraint than is necessary to protect the
goodwill or other business interests of Travis and Buyer. It is agreed by the
parties that the restrictions contained in Section 1.1 impose, on the date of
the execution of this Agreement, a reasonable restraint on Seller in light of
the activities and businesses of Travis and Buyer and their future plans.
1.3 For the purposes of this Agreement, Owner will be deemed to be
engaging or participating in a business or businesses if he is engaged in such
business or businesses, directly or indirectly, whether for his own account or
for that of any other person, firm or corporation, and whether as a stockholder
(except solely as a stockholder in a publicly held corporation with more than
500 holders of common stock and as to which he owns, in the aggregate, less than
5% of any class of stock), director, officer, employee, consultant, partner,
joint venturer, principal, agent, proprietor, consultant, manager, independent
contractor, sales representative, landlord, lessor, lender, guarantor, or in any
other capacity.
<PAGE>
Section 2.
----------
2.1 Term. The term of this Agreement will commence on the date hereof
----
and ill terminate on November 1, 2001.
2.2 Remedies. Owner acknowledges that a breach of any of the provisions
--------
of Section 1 will cause irreparable harm to Travis and Buyer, for which there
may be no adequate remedy at law and for which the ascertainment of damages
would be difficult. Therefore, Travis and Buyer will be entitled to specific
performance of Section 1 hereof, in addition to, and without having to prove the
inadequacy of, other remedies at law, as well as injunctive relief (without
being required to post bond or other security), and, if such legal action
becomes necessary, Travis and Buyer will be entitled to recover reasonable
attorney's fees and costs of court incurred in connection with such action.
Nothing contained herein will be construed as prohibiting Travis and Buyer from
pursuing any other remedies available to it for such breach, including the
recovery of money damages.
2.3 Notices. Notices and demands provided for under this Agreement will
-------
be in writing and will be deemed to be fully given and received if sent by
registered mail, postage prepaid, to the respective party at the address listed
at the beginning of this Agreement.
2.4 Assignment. Buyer or Travis may assign its rights or obligations
----------
hereunder to any Affiliate of Buyer or Travis or any successor to the business
of Buyer or Travis, by merger, consolidation, sale of assets, or otherwise.
2.5 Reformation; Severability. Whenever possible, each provision of
-------------------------
this Agreement will be interpreted so as to be legal, valid and enforceable
under applicable law, but in the event any provision of this Agreement is held
to be prohibited, unenforceable or invalid under applicable law, the parties
agree that such provision will automatically be deemed modified for purposes of
performance of this Agreement to the extent necessary to render it lawful, valid
and enforceable, or if such modification is not possible without materially
altering the intent of the parties, that such provision will automatically be
deemed severed from this Agreement to the extent of such prohibition,
unenforceability, or invalidity. The validity of the remaining provisions of
this Agreement will not be altered by any such modification or severance.
2.6 Amendment of Agreement. Except as set forth in Section 2.5, this
----------------------
Agreement may not be amended, modified, or supplemented except by a writing
signed by all parties.
2.7 Governing Law; Venue. THIS AGREEMENT WILL BE CONSTRUED AND
--------------------
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO
THE CONFLICT OF LAWS RULES OF TEXAS. Each of the undersigned irrevocably agrees
that any legal action or proceeding brought against said Person with respect to
this Agreement will be brought in the appropriate court in Travis County, Texas
and hereby waives any right to be sued in any other place.
2.8 Construction. This Agreement constitutes the entire Agreement
------------
between the parties and will be binding upon and inure to the benefit of the
parties hereto and their permitted
<PAGE>
successors and assigns. No terms or understandings not herein contained will
apply unless in writing and signed by all parties subsequent to execution of
this Agreement. This Agreement is intended to benefit only the parties hereto
and no third party will have any right to enforce this Agreement or receive any
benefits hereof.
IN WITNESS WHEREOF, Travis, Buyer and Owner have executed this Agreement,
in the manner appropriate to each, as of the day and year first above written.
TRAVIS BOATS & MOTORS, INC.
By:
---------------------------
---------------------------
---------------------------
TRAVIS BOATING CENTER ALABAMA, INC.
By:
---------------------------
---------------------------
---------------------------
Tom Ed Bondurant
---------------------------
<PAGE>
EXHIBIT F
NON-COMPETITION AGREEMENT (SELLER)
This Non-Competition Agreement (the "Agreement"), dated as of November 1,
1996, is among TRAVIS BOATS & MOTORS, INC., a Texas corporation ("Travis"),
TRAVIS BOATING CENTER ALABAMA, INC., a Texas corporation and wholly owned
subsidiary of Travis ("Buyer"), both having an office for the purpose of notice
at 13045 Research Blvd., Austin, Texas 78750, and TRI-LAKES MARINE, INC., a
Tennessee corporation ("Seller") with an office for the purpose of notice at
____________________________, ____________________________.
WHEREAS, Buyer has agreed to acquire certain of the assets of Seller
pursuant to that certain asset purchase agreement dated November 1, 1996 (the
"Purchase Agreement"), among Buyer, Seller and certain Shareholders of Seller
(the capitalized terms used herein have the meanings assigned to them in the
Purchase Agreement unless otherwise defined herein); and
WHEREAS, pursuant to the Purchase Agreement, Buyer will acquire Seller's
tradenames "Tri-Lakes Marine, Inc.", "_________________________",
"__________________________", and all derivative uses of such names and the
goodwill associated therewith; and
WHEREAS, the parties hereto agree that the reasonable market area of a
business such as the Business is approximately a 150-mile radius; and
WHEREAS, it is a condition precedent to the closing of the purchase under
the Purchase Agreement that Seller shall have entered into this Agreement;
NOW, THEREFORE, in consideration of the foregoing, and of the mutual
covenants, terms and conditions hereinafter expressed, Travis, Buyer and Seller
agree as follows:
Section 1.
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1.1 Non-Competition. Seller will not, for any reason:
---------------
1.1.1 Engage in a business or businesses, directly or indirectly,
that competes with Buyer in its conduct of the Business, or otherwise
receive compensation for any
<PAGE>
services rendered regarding any aspect of the boat, boat accessory or water
sport sales business anywhere within 150 miles of the location of the
Business.
1.1.2 Participate, directly or indirectly, in any business that
competes with Buyer and the Business at any Boat Show.
1.1.3 Engage in a business or businesses, directly or indirectly,
that competes with Travis or any Affiliate of Travis in their conduct of
the boat, boat accessory or water sport sales business, or otherwise
receive compensation for any services rendered regarding any aspect of the
boat, motor, trailer, or marine accessory or water sport sales business
anywhere within 150 miles of the location of any store operated by Travis
or any Affiliate of Travis.
1.1.4 Engage or participate, directly or indirectly, in any
business which is substantially similar to that of Travis or any Affiliate
of Travis, including, without limitation, serving as a consultant,
administrator, officer, director, employee, manager, landlord, lender,
guarantor, or in any similar or related capacity or otherwise receive
compensation for services rendered regarding any aspect of the boat, boat
accessory or water sport sales business anywhere within 150 miles of the
location of any store operated by Buyer, Travis or any Affiliate of Travis.
1.2 Seller agrees that Travis and Buyer will not be able to recognize
the value of Seller's assets and the Business unless Buyer is able to engage in
the successful operation of the Business, that the non-competition provisions
set forth in Section 1.1 are ancillary to the Purchase Agreement, that the
Purchase Agreement is an otherwise enforceable agreement, and that the non-
competition provisions in this Agreement are therefore ancillary to an otherwise
enforceable agreement. Seller further agrees that the non-competition provisions
set forth above are supported by independent valuable consideration and contain
reasonable limitations as to the time, geographical area, and scope of activity
for which he is to be restrained; and that the limitations of the non-
competition provisions do not impose a greater restraint than is necessary to
protect the goodwill or other business interests of Travis and Buyer. It is
agreed by the parties that the restrictions contained in Section 1.1 impose, on
the date of the execution of this Agreement, a reasonable restraint on Seller in
light of the activities and businesses of Travis and Buyer and their future
plans.
1.3 For the purposes of this Agreement, Seller will be deemed to be
engaging or participating in a business or businesses if it is engaged in such
business or businesses, directly or indirectly, whether for its own account or
for that of any other person, firm or corporation, and whether as a stockholder
(except solely as a stockholder in a publicly held corporation with more than
500 holders of common stock and as to which he owns, in the aggregate, less than
5% of any class of stock), director, officer, employee, consultant, partner,
joint venturer, principal, agent, proprietor, consultant, manager, independent
contractor, sales representative, landlord, lessor, lender, guarantor, or in any
other capacity.
<PAGE>
Section 2.
----------
2.1 Term. The term of this Agreement will commence on the date hereof
----
and will terminate on November 1, 2001.
2.2 Remedies. Seller acknowledges that a breach of any of the
--------
provisions of Section 1 will cause irreparable harm to Travis and Buyer, for
which there may be no adequate remedy at law and for which the ascertainment of
damages would be difficult. Therefore, Travis and Buyer will be entitled to
specific performance of Section 1 hereof, in addition to, and without having to
prove the inadequacy of, other remedies at law, as well as injunctive relief
(without being required to post bond or other security), and, if such legal
action becomes necessary, Travis and Buyer will be entitled to recover
reasonable attorney's fees and costs of court incurred in connection with such
action. Nothing contained herein will be construed as prohibiting Travis and
Buyer from pursuing any other remedies available to it for such breach,
including the recovery of money damages.
2.3 Notices Notices and demands provided for under this Agreement will
-------
be in writing and will be deemed to be fully given and received if sent by
registered mail, postage prepaid, to the respective party at the address listed
at the beginning of this Agreement.
2.4 Assignment. Buyer or Travis may assign its rights or obligations
----------
hereunder to any Affiliate of Buyer or Travis or any successor to the business
of Buyer or Travis, by merger, consolidation, sale of assets, or otherwise.
2.5 Reformation; Severability. Whenever possible, each provision of
-------------------------
this Agreement will be interpreted so as to be legal, valid and enforceable
under applicable law, but in the event any provision of this Agreement is held
to be prohibited, unenforceable or invalid under applicable law, the parties
agree that such provision will automatically be deemed modified for purposes of
performance of this Agreement to the extent necessary to render it lawful, valid
and enforceable, or if such modification is not possible without materially
altering the intent of the parties, that such provision will automatically be
deemed severed from this Agreement to the extent of such prohibition,
unenforceability, or invalidity. The validity of the remaining provisions of
this Agreement will not be altered by any such modification or severance.
2.6 Amendment of Agreement. Except as set forth in Section 2.5, this
----------------------
Agreement may not be amended, modified, or supplemented except by a writing
signed by all parties.
2.7 Governing Law; Venue. THIS AGREEMENT WILL BE CONSTRUED AND
--------------------
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO
THE CONFLICT OF LAWS RULES OF TEXAS. Each of the undersigned irrevocably agrees
that any legal action or proceeding brought against said Person with respect to
this Agreement will be brought in the appropriate court in Travis County, Texas
and hereby waives any right to be sued in any other place.
2.8 Construction. This Agreement constitutes the entire Agreement
------------
between the parties and will be binding upon and inure to the benefit of the
parties hereto and their permitted
<PAGE>
successors and assigns. No terms or understandings not herein contained will
apply unless in writing and signed by all parties subsequent to execution of
this Agreement. This Agreement is intended to benefit only the parties hereto
and no third party will have any right to enforce this Agreement or receive any
benefits hereof.
IN WITNESS WHEREOF, Travis, Buyer and Seller have executed this Agreement,
in the manner appropriate to each, as of the day and year first above written.
TRAVIS BOATS & MOTORS, INC.
By:
---------------------------
---------------------------
---------------------------
TRAVIS BOATING CENTER ALABAMA, INC.
By:
---------------------------
---------------------------
---------------------------
TRI-LAKES MARINE, INC.
By:
---------------------------
---------------------------
---------------------------
<PAGE>
EXHIBIT 21.1
SUBSIDIARIES
<TABLE>
<CAPTION>
CHIEF EXECUTIVE OFFICE
AND LOCATION OF
BUSINESS STORAGE AND MATERIAL RECORDS AND
COMPANY DISTRIBUTION LOCATIONS BOOKS OF ACCOUNT
<S> <C> <C>
Travis Boats & Motors, Inc. 13045 Research Blvd. 13045 Research Blvd.
Austin, Texas 78750 Austin, Texas 78750
Travis Boats & Motors, Inc. 12300 IH 10 West 13045 Research Blvd.
San Antonio, Texas 78230 Austin, Texas 78750
Travis Boats & Motors, Inc. 7530 North Freeway 13045 Research Blvd.
Houston, Texas 77037 Austin, Texas 78750
Travis Snowden Marine, Inc. 1320 S. Stemmons 13045 Research Blvd.
Lewisville, Texas 75067 Austin, Texas 78750
Travis Boating Center Arlington, Inc. 1725 W. Division 13045 Research Blvd.
Arlington, Texas 76012 Austin, Texas 78750
Falcon Marine, Inc. 1920 North Loop 250 W. 13045 Research Blvd.
Midland, Texas 79707 Austin, Texas 78750
Falcon Marine Abilene, Inc. 1021 E. Highway 80 13045 Research Blvd.
Abilene, Texas 79601 Austin, Texas 78750
Travis Boating Center Beaumont, Inc. 7660 College Street 13045 Research Blvd.
Beaumont, Texas 77707 Austin, Texas 78750
Travis Boats & Motors Baton Rouge, Inc. 14369 Florida Blvd. 13045 Research Blvd.
Baton Rouge, Louisiana Austin, Texas 78750
70819
TBC Arkansas, Inc. 2001 Hwy. 25 North 13045 Research Blvd.
Heber Springs, Arkansas Austin, Texas 78750
72543
TBC Arkansas, Inc. 3034 Albert Pike 13045 Research Blvd.
Hot Springs, Arkansas Austin, Texas 78750
71913
TBC Management, Ltd., 13045 Research Blvd. 13045 Research Blvd.
Austin, Texas 78750 Austin, Texas 78750
TBC Management, Inc. 1209 Orange Street 1209 Orange Street
Wilmington, Delaware Wilmington, Delaware
19801-1134 19801-1134
Travis Boating Center Louisiana, Inc. 1700 East Main Street 13045 Research Blvd.
New Iberia, Louisiana Austin, Texas 78750
70560
Travis Boating Center Tennessee, Inc. 38 Marina Lane 13045 Research Blvd.
Winchester, Tennessee Austin, Texas 78750
37398
</TABLE>
<PAGE>
EXHIBIT 21.1
------------
SUBSIDIARIES (cont.)
<TABLE>
<S> <C> <C>
Travis Boating Center Alabama, Inc. 2006 Fisher Street 13045 Research Blvd.
Huntsville, Alabama 35803 Austin, Texas 78750
Travis Boating Center Alabama, Inc. Route 7, Box 1 13045 Research Blvd.
Florence, Alabama 35630 Austin, Texas 78750
Red River Marine Arkansas, Inc. 13045 Research Blvd.
Austin, Texas 78750
Travis Boating Center Little Rock, Inc. 13045 Research Blvd.
Austin, Texas 78750
Travis Boating Center Georgia, Inc. 13045 Research Blvd.
Austin, Texas 78750
Travis Boating Center Florida, Inc. 13045 Research Blvd.
Austin, Texas 78750
</TABLE>
<PAGE>
SCHEDULE 7.4
------------
INTERCREDITOR AGREEMENT LENDERS
Transamerica Commercial Finance Corporation
225 North Michigan Avenue
Chicago, Illinois 60601
Bombardier Capital, Inc.
P.O. Box 991
Colchester, Vermont 05446
Deutsche Financial Services Corporation
P.O. Box 1349
Troy, Michigan 48099
