United States Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 31, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
EXHANGE ACT
For the transition period from [ ] to [ ]
Commission File Number 0-21451
BOWLIN Outdoor Advertising & Travel Centers Incorporated
(Exact name of small business issuer as specified in its charter)
NEVADA 85-0113644
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
150 LOUISIANA NE, ALBUQUERQUE, NM 87108
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: 505-266-5985
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes[X] No[ ]
As of December 15, 1997, 4,384,848 shares of the issuer's common stock were
outstanding.
<PAGE>
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES
INDEX
PART I. FINANCIAL INFORMATION
Page No.
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets as of
October 31, 1997 and January 31, 1997.....................2
Consolidated Statements of Income for the
Three Months and Nine Months Ended
October 31, 1997 and 1996.................................4
Consolidated Statements of Cash Flows for the
Nine Months Ended October 31, 1997 and 1996...............5
Notes to the Consolidated Financial Statements............6
Item 2. Management's Discussion and Analysis or
Plan of Operation ........................................7
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.........................12
Signatures ..............................................12
1
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES
Consolidated Balance Sheets
Assets
(In thousands, except share data)
October 31, January 31,
1997 1997
(Unaudited) (Audited)
----------- -----------
Current assets:
Cash and cash equivalents $ 4,757 $ 7,519
Accounts receivable, net 419 366
Notes receivable - current maturities 27 26
Inventories 3,618 3,202
Prepaid and other current assets 415 465
----------- -----------
Total current assets 9,236 11,578
Investment and long-term receivables:
Investment in partnership 13 13
Notes receivable, less current maturities 91 96
----------- -----------
Total investment and long-term receivables 104 109
Property & equipment, net 13,667 9,971
Intangible assets, less accumulated amortization
of $ 115 at October 31, 1997 and $ 108 at
January 31, 1997 94 101
Goodwill, less accumulated amortization of $34 at
October 31, 1997 829 -
Deferred registration costs - 84
----------- -----------
Total assets $ 23,930 $ 21,843
=========== ===========
See accompanying notes to consolidated financial statements.
<PAGE>
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES
Consolidated Balance Sheets
Liabilities and Stockholders' Equity
(In thousands, except share data)
October 31, January 31,
1997 1997
(Unaudited) (Audited)
----------- -----------
Current liabilities:
Short-term borrowing, bank $ 500 $ -
Accounts payable and accrued liabilities 1,355 1,597
Long-term debt, current maturities 693 576
Income taxes payable 56 145
----------- -----------
Total current liabilities 2,604 2,318
Deferred income taxes 93 43
Long-term debt, less current maturities 7,129 6,118
----------- -----------
Total liabilities 9,822 8,479
Minority interest - 206
Stockholders' equity
Common stock, $.001 par value; authorized
100,000,000 shares; issued and outstanding
4,384,848 shares 4 4
Additional paid-in capital 11,604 11,604
Retained earnings 2,496 1,550
----------- -----------
Total stockholders' equity 14,104 13,158
----------- -----------
Total liabilities and stockholders' equity $ 23,930 $ 21,843
=========== ===========
See accompanying notes to consolidated financial statements.
<PAGE>
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Income
(In thousands, except share and per share data)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Three Months Ended Nine Months Ended
---------------------------- ----------------------------
Oct 31, Oct 31, Oct 31, Oct 31,
1997 1996 1997 1996
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
----------- ----------- ----------- -----------
Gross sales $ 6,728 $ 6,355 $ 21,362 $ 19,191
Less discounts on sales 66 75 221 228
----------- ----------- ----------- -----------
Net sales 6,662 6,280 21,141 18,963
Cost of goods sold 4,230 4,292 13,720 12,746
----------- ----------- ----------- -----------
2,432 1,988 7,421 6,217
Gross profit
General and administrative expenses (1,616) (1,467) (4,988) (4,530)
Other income 8 168 78 464
Depreciation and amortization (305) (208) (833) (593)
----------- ----------- ----------- -----------
Operating income
519 481 1,678 1,558
Other non-operating income (expense):
Interest income 71 13 216 81
Gain on sale of property and
equipment - - 189 11
Interest expense (186) (175) (534) (507)
----------- ----------- ----------- -----------
Total other non-operating
income (expense), net (115) (162) (129) (415)
----------- ----------- ----------- -----------
Income before taxes 404 319 1,549 1,143
Income taxes 146 127 604 457
----------- ----------- ----------- -----------
Net income $ 258 $ 192 $ 945 $ 686
=========== =========== =========== ===========
Weighted average common and common
equivalent shares outstanding 4,384,848 3,496,781 4,384,848 3,452,991
Earnings per common and common
equivalent share $ 0.06 $ 0.06 $ 0.22 $ 0.20
=========== =========== =========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(In thousands)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Nine Months Ended
------------------------------
October 31, October 31,
1997 1996
(Unaudited) (Unaudited)
----------- -----------
Cash flows from operating activities:
Net income $ 945 $ 686
Adjustments to reconcile net income to net cash provided by operating
activities:
Depreciation and amortization 833 593
Gain on sale of property and equipment (189) (11)
Deferred income taxes 50 -
Changes in operating assets and (764) (807)
liabilities ----------- -----------
Net cash provided by operating activities 875 461
Cash flows from investing activities:
Minority Interest in Partnership - 13
Proceeds from sale of assets 423 -
Business acquisitions (note 2) (4,865) -
Purchases of property and equipment, net (2,110) (1,218)
Proceeds (disbursements) on notes receivable, net 4 (37)
----------- -----------
Net cash used in investing activities (6,548) (1,242)
Cash flows from financing activities:
Borrowings on debt 3,532 5,533
Payments on debt (621) (4,043)
Proceeds from issuance of common stock, net - 222
Proceeds from sale of fractional shares of stock sold in
conjunction with stock dividend - 3
Dividends paid - (51)
Payment of registration costs associated with initial
public offering of common stock - (342)
----------- -----------
Net cash provided by financing activities 2,911 1,322
Net (decrease) increase in cash and cash equivalents (2,762) 541
Cash and cash equivalents at beginning of period 7,519 1,602
=========== ===========
Cash and cash equivalents at end of period 4,757 2,143
=========== ===========
Non-Cash Financing Activities:
Exchange of property and equipment and note payable 1,284 -
on sale of partnership investment
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS
INCORPORATED AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
1. The consolidated financial statements for the nine months ended October 31,
1997 and October 31, 1996 are unaudited and reflect all adjustments
(consisting only of normal recurring adjustments) which are, in the opinion
of management, necessary for a fair presentation of the financial position
and operating results for the interim periods. The condensed consolidated
financial statements should be read in conjunction with the consolidated
financial statements and notes thereto, together with management's
discussion and analysis of financial condition and results of operations,
contained in the Company's annual report on Form 10-KSB for the fiscal year
ended January 31, 1997. Results of operations for interim periods are not
necessarily indicative of results which may be expected for the year as a
whole.
2. Acquisitions. On April 1, 1997, the Company acquired all of the tangible
and intangible assets and certain liabilities of the outdoor advertising
division of The McCarty Company (McCarty) known as Pony Panels for $4.2
million. A member of the Company's Board of Directors is the majority
shareholder of The McCarty Company. The Company paid $1.7 million from the
proceeds of the initial public offering and financed $2.5 million with bank
debt. The bank debt carries a variable rate of interest tied to the bank's
prime rate (8.5% at April 30, 1997) and matures on April 1, 2007. Pony
Panels owns and operates approximately 750 8-sheet poster panels in the
Albuquerque, New Mexico metro area. The Company also entered into a
non-compete agreement with the former principals of McCarty for a period of
five years from the date of acquisition. The acquisition was accounted for
as a purchase and goodwill is being amortized over 20 years using the
straight-line method.
Assets acquired and liabilities assumed in the acquisition are as follows:
Accounts receivable $ 73,941
Prepaid sign rent 15,057
Vehicles and equipment 63,500
Signs 3,200,000
Goodwill 863,000
Accounts payable (15,498)
-----------
$ 4,200,000
===========
The following proforma consolidated results of operations have been
prepared as if the acquisition of Pony Panels occurred on February 1, 1997
and 1996:
(in thousands except per share amounts)
Nine Months Ended
October 31
1997 1996
---- ----
Gross sales $ 21,474 $ 19,389
Net income 931 675
Earnings per common and
common equivalent share $ .21 $ .20
The proforma information is presented for informational purposes only and
is not necessarily indicative of the results of operations that actually
would have been achieved had the acquisition been consummated as of that
time, nor is it intended to be a projection of future results.
On April 26, 1997, the Company purchased the outdoor advertising assets of
General Outdoor Advertising for $240,000 in cash. The cash was provided
from proceeds of the Company's public offering of stock in December 1996.
The transaction was accounted for as a purchase.
On April 29, 1997, the Company purchased the outdoor advertising assets of
Mesa Outdoor Advertising for $150,000 in cash and a note payable to the
former owner in the amount of $275,000. The cash was provided from proceeds
of the Company's public offering of stock in December 1996. The note is
secured by the assets purchased, bears interest at a fixed rate of 9.0% per
annum and matures on May 1, 2007. The transaction was accounted for as a
purchase.
3. Sale of Partnership Investment: On June 16, 1997 the Company liquidated its
partnership interest in its Las Cruces real estate investment at a gain of
approximately $78,000. Total proceeds of $180,340 were received on August
26, 1997.
4. Available Financing: On May 2, 1997, the Company secured an additional $1
million line of credit with one of its existing lenders. The line carries a
variable interest rate based on the bank's prime lending rate (8.5% on May
2, 1997). The primary purpose of the line of credit is to finance future
acquisitions of outdoor advertising assets.
5. Subsequent Events: On November 25, 1997 the Company entered into a credit
agreement with one of its existing lenders for the following: 1) a facility
line, which is a multiple advance line, in the amount of $8,000,000 to fund
acquisition of existing travel centers, or construction of new travel
centers, and the purchase of related equipment; 2) a leasing line in the
amount of $2,000,000; and 3) a working capital open line in the amount of
$500,000. This agreement carries a variable interest rate based on the
bank's prime lending rate, 8.5%
On December 9, 1997, the Company acquired all of the tangible and
intangible assets of Sweezy Outdoor Advertising Inc. (Sweezy) for
$1,655,000. The consideration paid was funded by proceeds from the IPO of
$655,000 and $1,000,000 of bank debt. The bank debt was provided by Norwest
Bank N.A. at the bank's prevailing prime rate (8.5% at closing). The bank
debt is subject to certain financial and other restrictive covenants.
Sweezy owned and operated sixty-eight 14' x 48' bulletin faces in central
Texas. The Company also entered into a non-compete agreement with the
former principals of Sweezy for annual installments of $40,000 per year for
a period of ten years from the date of acquisition.
Item 2. Management's Discussion and Analysis or Plan of Operation.
Overview
The following is a discussion of the consolidated financial condition and
results of operations of the Company as of and for the three interim periods
ended October 31, 1997 and 1996. This discussion should be read in conjunction
with the Consolidated Financial Statements of the Company and the Notes related
thereto included in the Company's Form 10-KSB for the fiscal year ended January
31, 1997.
The Company operates in two industry segments, travel centers and outdoor
advertising. In order to perform a meaningful evaluation of the Company's
performance in each of its operating segments, the Company has presented
selected operating data which separately sets forth the revenue, expenses and
operating income attributable to each segment , and also separately sets forth
the corporate expenses of the Company which are not properly allocable to either
of the Company's segments for purposes of determining their respective operating
income. The discussion of results of operations which follows compares such
selected operating data and corporate expense data for the interim periods
presented.
The forward-looking statements included in Management's Discussion and Analysis
or Plan of Operation, which reflect management's best judgment based on factors
currently known, involve risks and uncertainties. Actual results could differ
materially from those anticipated in these forward-looking statements as a
result of a number of factors, including but not limited to those discussed
herein.
Results of Operations
The following table presents certain income and expense items derived from the
Consolidated Statements of Income for the nine months ended October 31
(unaudited and amounts in thousands):
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
% Incr/
1997 1996 (Decr)
---- ---- ------
Travel centers:
Gross revenues $ 17,835 $ 16,668 7.0%
Discounts on sales 221 228 (3.1)%
----------- ----------
Net revenues 17,614 16,440 7.1%
Cost of sales 11,814 11,165 5.8%
----------- ----------
5,800 5,275 9.9%
General and administrative expenses 4,092 3,867 5.8%
Depreciation and amortization 318 282 12.7%
----------- ----------
Operating income 1,390 1,126 23.4%
Outdoor advertising:
Revenues 3,527 2,523 39.7%
Operating expenses:
Direct operating expenses 1,906 1,581 20.5%
General and administrative expenses 538 307 75.2%
Depreciation and amortization 419 204 105.3%
----------- ----------
Operating income 664 431 54.0%
Corporate and other:
General and administrative expenses (358) (356) 0.5%
Depreciation and amortization (96) (107) (10.2)%
Interest expense (534) (507) 5.3%
Other income, net 483 556 (13.1)%
----------- ----------
Income before taxes 1,549 1,143 35.5%
Income taxes 604 457 32.2%
----------- ----------
Net income $ 945 $ 686 37.8%
=========== ==========
</TABLE>
<PAGE>
Comparison of the Nine Months Ended October 31, 1997 and October 31, 1996
Travel Centers. Gross revenues at the Company's travel centers increased 7.0% to
$17.835 million for the nine months ended October 31, 1997 from $16.668 million
for the nine months ended October 31, 1996. This increase is primarily
attributable to increased retail and wholesale gasoline sales which increased
$959,241, or 10.9%, for the nine months ended October 31, 1997, as compared to
the nine months ended October 31, 1996. Merchandise sales are flat at $5.329
million for the nine months ended October 31,1997 as compared to $5.334 million
for the nine months ended October 31, 1996. Restaurant sales, changing little,
decreased to $2.457 million in the nine months ended October 31,1997 from $2.557
million in the nine months ended October 31,1996.
Cost of goods sold for the travel centers increased 5.8% to $11.814 million for
the nine months ended October 31, 1997 from $11.165 million for the nine months
ended October 31, 1996, primarily as result of increased retail gasoline sales
and the addition of its wholesale gasoline operations.
General and administrative expenses for travel centers consist of salaries,
bonuses and commissions for travel center personnel, property costs and repairs
and maintenance. General and administrative expenses for the travel centers
increased to $4.092 million for the nine months ended October 31, 1997 from
$3.867 million for the nine months ended October 31, 1996.
Depreciation and amortization expense increased to $318,000 for the nine months
ended October 31, 1997 as compared to $282,000 for the nine months ended October
31, 1996. The increase is attributable to additions to depreciable assets during
the current interim periods.
The above factors contributed to an overall increase in travel center operating
income of 23.4% to $1.390 million for the nine months ended October 31,1997 from
$1.126 million for the nine months ended October 31, 1996. This increase is
primarily attributable to the rise in retail gasoline sales and wholesale
distribution of CITGO brand petroleum.
Outdoor Advertising. Revenues from the Company's outdoor advertising increased
39.7% to $3.527 million for the nine months ended October 31, 1997 from $2.523
million for the nine months ended October 31, 1996. The increase was primarily
attributable to increased usage of available sign inventory, increases in rates
and the assimilation of the Company's acquisitions including the outdoor
advertising assets of The McCarty Company (known as Pony Panels) which was
effective April 1, 1997. First nine months' billing revenues from the acquired
assets were approximately $377,000.
Operating expenses related to outdoor advertising consist of direct operating
expenses, which include rental payments to property owners for the use of land
on which advertising displays are located, production expenses and selling
expenses. Production expenses include salaries for operations personnel and real
estate representatives, property taxes, materials and repairs and maintenance of
advertising displays. Selling expenses consist primarily of salaries and
commissions for salespersons and travel and entertainment related to sales.
Direct operating costs increased 20.5% to $1.906 million for the nine months
ended October 31, 1997 from $1.581 million for the nine months ended October 31,
1996, principally due to the addition of production personnel, the assimilation
of direct operating costs associated with the Pony Panels acquisition and
increased costs related to repairs and maintenance of existing advertising
displays.
General and administrative expenses for outdoor advertising consist of salaries
and wages for administrative personnel, insurance, legal fees, association dues
and subscriptions and other indirect operating expenses. General and
administrative expenses, as a result of higher administrative salaries,
increased 75.2% to $538,000 for the nine months ended October 31, 1997 from
$307,000 for the nine months ended October 31, 1996.
Depreciation and amortization expense increased 105.3% to $419,000 for the nine
months ended October 31, 1997 from $204,000 for the nine months ended October
31, 1996. The increase is attributable to scheduled depreciation of additional
advertising display structures and machinery and equipment. In addition,
depreciation and amortization expense increased as a result of the $165,000 of
depreciation of the advertising display structures acquired in the Pony Panels
acquisition and the amortization of goodwill.
The above factors contributed to the increase in outdoor advertising operating
income of 54.0% to $664,000 for the nine months ended October 31, 1997 from
$431,000 for the nine months ended October 31, 1996. In addition, earnings
before interest, taxes, depreciation and amortization (EBITDA) for outdoor
advertising increased 70.6% to $1.083 million for the nine months ended October
31, 1997 from $635,000 for the nine months ended October 31, 1996. The EBITDA
margin for outdoor advertising increased to 30.7% for the nine months ended
October 31, 1997 as compared to 25.1% for the nine months ended October 31,
1996.
Corporate and Other. General and administrative expenses for corporate and other
operations of the Company consist primarily of executive and administrative
compensation and benefits, accounting, legal and investor relations fees.
General and administrative expenses increased slightly to $358,000 for the nine
months ended October 31, 1997 as compared to $356,000 for the nine months ended
October 31, 1996.
Depreciation and amortization expenses for the Company's corporate and other
operations consist of depreciation associated with the corporate headquarters,
furniture and fixtures related thereto and its former subsidiary. Depreciation
and amortization expenses decreased to $96,000 for the nine months ended October
31, 1997 as compared to $107,000 for the nine months ended October 31, 1996.
Interest expense increased slightly to $534,000 for the nine months ended
October 31, 1997 as compared to $507,000 for the nine months ended October 31,
1996.
Other income, net, primarily includes operating revenues and expenses from the
Company's former subsidiary, farm income and gains and/or losses from the sales
of assets. Other income, net, decreased 13.1% to $483,000 for the nine months
ended October 31, 1997 as compared to $556,000 for the nine months ended October
31, 1996.
Income before taxes increased 35.5% to $1.549 million for the nine months ended
October 31, 1997 as compared to $1.143 million for the nine months ended October
31, 1996. As a percentage of gross revenues, income before taxes increased to
7.2% for the nine months ended October 31, 1997 as compared to 5.9% for the nine
months ended October 31, 1996.
Income taxes were $604,000 for the nine months ended October 31, 1997 as
compared to $457,000 for the nine months ended October 31, 1996, as the result
of higher pretax income.
The foregoing factors contributed to the Company's increase in net income for
the nine months ended October 31, 1997 to $945,000 as compared to $686,000 for
the nine months ended October 31, 1996.
Liquidity and Capital Resources
At October 31, 1997, the Company had working capital of $6.632 million and a
current ratio of 3.5:1, compared to working capital of $9.260 million and a
current ratio of 5.0:1 at January 31, 1997. Net cash provided by operating
activities was $875,000 for the nine months ended October 31, 1997 as compared
to net cash provided by operating activities of $461,000 for the nine months
ended October 31, 1996. This increase is primarily attributable to increases in
net income and increased depreciation and amortization expenses from
acquisitions made during the year. Net cash used for investing activities for
the nine months ended October 31, 1997 was $6.548 million, of which $4.2 million
was used in the purchase of the outdoor advertising assets of Pony Panels. On
April 26, 1997 and April 29, 1997, the Company purchased all of the outdoor
advertising assets of General Outdoor Advertising and Mesa Outdoor Advertising
for $240,000 and $425,000, respectively. In addition, approximately $300,000 was
used for the purchase of land for the construction of a new travel center
complex. For the nine months ended October 31, 1996, net cash used for investing
activities was $1.242 million. Net cash provided by financing activities for the
nine months ended October 31, 1997 was $2.911 million as compared to $1.322
million for the nine months ended October 31, 1996. The majority of such cash
was utilized to finance the outdoor advertising acquisitions previously noted.
The Company incurred indebtedness in the amount of $2.5 million for the Pony
Panels acquisition and $275,000 for the Mesa acquisition.
On April 26, 1997, the Company purchased the outdoor advertising assets of
General Outdoor Advertising for $240,000 in cash. The cash was provided from
proceeds of the Company's initial public offering ("IPO") of common stock in
December 1996.
On April 29, 1997, the Company purchased the outdoor advertising assets of Mesa
Outdoor Advertising for $150,000 in cash and a note payable to the former owner
in the amount of $275,000. The cash was provided from proceeds of the Company's
IPO. The note is secured by the assets purchased, bears interest at a fixed rate
of 9.0% per annum and matures on May 1, 2007.
On May 2, 1997, the Company secured an additional $1 million line of credit with
one of its existing lenders. The line of credit carries a variable interest rate
based on the bank's prime lending rate (8.5% on May 2, 1997). The primary
purpose of the line of credit is to finance future acquisitions of outdoor
advertising assets.
Although the Company does not have any agreements in place, it is currently
negotiating with an independent party for the acquisition of outdoor advertising
assets. The Company does not believe that any of these acquisitions are probable
and the Company has not executed a letter of intent or other agreement, binding
or non-binding, to make such acquisitions. Any such acquisition would be subject
to the negotiation and execution of definitive agreements, appropriate financing
arrangements, performance of due diligence, approval of the Company's Board of
Directors, receipt by the Company of unqualified audited financial statements,
and the satisfaction of other customary closing conditions. The Company would
likely finance any such acquisitions with cash, additional indebtedness or a
combination of the two. To the extent that any such acquisition would be paid
for by the Company in cash, the Company could decide to use a portion of the
remaining net proceeds from the IPO, use funds from its ongoing operations, seek
additional financing from a commercial lender or some combination of the
foregoing. Any commercial financing obtained for purposes of acquiring
additional assets is likely to impose certain financial and other restrictive
covenants upon the Company and increase the Company's interest expense.
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a). Exhibit No. Exhibit Name
----------- -------------
2.2 Purchase Agreement dated December 9, 1997 between
the Registrant and Sweezy Outdoor Advertising, Inc.
10.43 Promissory Note, dated as of May 2, 1997, payable
by the Registrant to Norwest Bank in the aggregate
principal amount of $1,000,000
10.44 Credit Agreement with First Security Bank, dated
as of November 25, 1997, granting the Registrant
funds in the aggregate principal amount of $10,500,000
27 Financial Data Schedule
(b). The Company filed a Form 8-K on May 1, 1997 to report its
acquisition of the outdoor advertising assets of Pony Panels.
No financial statements were required to be filed.
Signatures
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Date: December 15, 1997
BOWLIN
Outdoor Advertising & Travel Centers Incorporated
/s/ Michael L. Bowlin
Michael L. Bowlin, Chairman of the Board,
President and Chief Executive Officer
/s/ Nina J. Pratz
Nina J. Pratz, Chief Financial Officer
(Principal Financial and Accounting Officer)
PURCHASE AGREEMENT 12/05/97
THIS AGREEMENT is hereby made this 9th day of December, 1997, by and between
Sweezy Outdoor Advertising, Inc., a Texas corporation ("Sweezy" or the
"Company"), Richard Sweezy, individually, the sole shareholder of Sweezy
("Shareholder"), and Bowlin Outdoor Advertising & Travel Centers Incorporated, a
Nevada corporation ("Bowlin").
Purpose of Agreement
Bowlin desires to purchase and Sweezy desires to sell all tangible and
intangible assets that comprise that portion of Sweezy's business known as
"Sweezy Outdoor Advertising, Inc." Therefore, in consideration of the premises
and of the mutual representations, warranties and covenants herein contained,
the parties hereby agree as follows:
Terms and Conditions
Purchase Price
The purchase price shall be a total of $1,655,000 paid in the following
manner:
(a) $945,000 cash at closing ($766,575.12 to Sweezy Outdoor
Advertising, Inc.; $73,249.29 to Heights State Bank for release
of liens; $27,292.74 to Union State Bank for release of liens;
$77,882.85 to National Bank for release of liens).
(b) $300,000 held in escrow by Bowlin until such time that Sweezy is
able to convey and deliver clear, unencumbered title to all sign
structures shown in Exhibit A-2 "List of Assets" and land leases
with respect thereto, acceptable to Bowlin, as set forth under
"Purchase Price Escrow" below;
(c) $400,000 paid as consideration for the "Non-Competition"
agreement for Richard Sweezy specified in this agreement, and
attached hereto as Exhibit C-1 "Non-Competition Agreements";
(d) $5,000 paid as consideration for the "Non-Competition" agreement
for Tandy Sweezy specified in this agreement, and $5,000 paid as
consideration for the "Non-Competition" agreement for Damian
Sisko and attached as Exhibits C-2 and C-3, respectively,
"Non-Competition Agreements."
In addition, Bowlin will pay to Sweezy at closing an amount equal to the
amount of current accounts receivable of Sweezy in consideration for such
accounts receivable, provided that Sweezy guarantees the collection of such
accounts receivable within ninety (90) days of closing. Sweezy hereby agrees to
make immediate cash payment to Bowlin, upon Bowlin's request, of the amount of
/s/ RS CCB
- - - ----------
Initials
1
<PAGE>
any such account receivable not collected within ninety (90) days of closing.
Notwithstanding the foregoing, in calculating the amount to be paid by Bowlin
for the accounts receivable at closing, such amount shall be credited with and
reduced by the amount of any prepaid revenues of the Company as of the date of
closing (except for that certain prepayment in the amount of approximately
$10,000 for the so-called "sign-for-a-day" sign located at North side of Highway
190 at National Bank, Killeen, Texas); and reduced by Bowlin's prorated share
(prorated by day as of Closing date) of December revenues billed in advance by
Sweezy. The purchase price, and payments noted above, shall be the sole
considerations paid by Bowlin under this agreement.
Date of Closing
The parties contemplate that Closing shall take place on December 9, 1997.
If Closing does not occur by that date, it will occur as soon thereafter as
Bowlin is able to complete its due diligence investigation. The parties
agree that Bowlin's obligation to complete this purchase is contingent upon
Bowlin being satisfied, in its sole discretion, that all representations
made to it concerning Sweezy's assets are true, that the financial
condition, books, and accounts of Sweezy are sound, and that the value of
the assets being transferred is not less than the purchase price.
Purchase Price Escrow
Bowlin shall hold a portion of the purchase price in the amount of $300,000
("Escrow Amount") in escrow for a period of ninety (90) days following
closing pursuant to the following terms and conditions:
(a) The Escrow Amount shall be held by Bowlin with respect to all sign
structure assets of Sweezy which Sweezy did not transfer to Bowlin at
closing because Sweezy did not have good and marketable title to or
was unable to provide a land lease or assignment of land lease with
respect thereto in form and substance acceptable to Bowlin at the date
of closing. A list of such sign structure assets is set forth in the
attached Exhibit A-2 "List of Assets Not Transferred at Closing." From
time to time during such ninety (90) day period, a prorated portion of
the Escrow Amount (given six (6) sign structure assets, the prorated
portion for each such asset will equal $50,000) will be paid by Bowlin
to Sweezy in exchange for transfer of good and marketable title to
each such sign structure pursuant to documentation in form and
substance acceptable to Bowlin together with a land lease or
assignment of land lease with respect to each such sign structure in
form and substance acceptable to Bowlin, all acceptable to Bowlin in
its sole and absolute discretion. With respect to sign structure
assets which Sweezy is unable to so transfer and deliver good title
/s/ RS CCB
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and an acceptable lease from time to time during or at the end of such
ninety (90) day period, Bowlin, at its option, may retain the prorated
portion of the Escrow Amount with respect to such assets and exclude
such assets from the purchase or may assume -- Sweezy's position with
respect to one or more of such assets pursuant to documentation in
form and substance acceptable to Bowlin and pay the prorated portion
of the Escrow Amount to Sweezy with respect thereto. For purposes
hereof, the prorated portion will be calculated as Sweezy's
transferable ownership percentage times $50,000 for each location
involved (for example, if Sweezy's ownership percentage is 50% then
Bowlin would make a payment to Sweezy of $25,000 (50% of $50,000); and
(b) In addition to the foregoing, the Escrow Amount shall be subject to
any claim for indemnification made by Bowlin in good faith pursuant to
the terms of the indemnification provisions of this Agreement.
Transfer of Assets
At closing, Sweezy shall transfer to Bowlin, free of all debt,
encumbrances, and liens, all tangible and intangible assets (the "Assets")
that comprise that portion of Sweezy's business known as Sweezy Outdoor
Advertising, Inc., including but not limited to all items listed on the
attached Exhibit A, "List of Sign Structure Assets" (except for those sign
structure assets set forth on the attached Exhibit A-2 which Sweezy will
exercise its reasonable best efforts to transfer and deliver within 90 days
of Closing) and Exhibit A-1 "List of Other Assets", and incorporated herein
by reference, as well as all outdoor advertising sign structures, lease
agreements and leasehold rights, licenses, advertising contracts, accounts
receivable, outdoor advertising permits and licenses, any and all poster
displays and equipment, all shop and field equipment used in the
promulgation and maintenance of business, all office equipment used in the
operation of Sweezy's business, all tradenames (including all rights to the
names "Sweezy," "Sweezy Outdoor Advertising, Inc." and variants of those
names, provided, however, that Shareholder shall continue to have the right
to the use of his name, Richard Sweezy, individually), trademarks, patents,
copyrights, trade secrets, proprietary information, and intellectual
property rights.
No Assumption of Liabilities
It is expressly understood and agreed by the parties hereto that Bowlin
assumes no debts, liabilities (including tax liabilities) or obligations
(contractual or otherwise) of Sweezy or Shareholder or any other debts,
liabilities or obligations related to the conduct of Sweezy's business.
/s/ RS CCB
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Documents to be Executed
Sweezy agrees to execute any and all bills of sale, assignments, transfers,
permits and any other documents deemed necessary by Bowlin to effectuate
the transfer of assets described herein, and to provide reasonable
assistance to Bowlin in transferring permits required for Bowlin's use and
enjoyment of the assets and properties transferred by this Agreement, all
in form and substance reasonably acceptable to Bowlin. In accordance
herewith, Bowlin and Sweezy agree to enter into, without limitation, the
following agreements:
a. A bill of sale transferring to Bowlin title to the Assets as provided
herein, in form and substance acceptable to Bowlin;
b. A one (1) year employment agreement for Richard Sweezy, and a one (1)
year employment agreement for Damian Sisko (See attached Exhibit B
"Employment Agreements").
c. A ten (10) year non-competition agreement for Richard Sweezy, a one
(1) year non-competition agreement for Damian Sisko, and a one (1)
year non-competition agreement for Tandy Sweezy (See attached Exhibit
C-1, C-2 and C-3 "Non-Competition Agreements").
d. A 3 year lease agreement pertinent to the building and premises
currently occupied and used by Sweezy for the operation of their
outdoor advertising business (See attached Exhibit D "Lease of
Building and Land").
e. Land lease agreements acceptable to Bowlin pertinent to sign sites
located on property owned by Sweezy and/or Richard Sweezy personally
(See Attached Exhibit E "Land Lease Agreement").
f. Assignments of land lease agreements pertinent to sign sites located
on property owned by third parties (See attached Exhibit F "Assignment
of Land Lease Agreement").
g. Letter from Sweezy to the Texas Department of Transportation notifying
the Texas D.O.T. of the transfer of all Texas D.O.T. permits of Sweezy
to Bowlin, in the form of Exhibit G hereto.
/s/ RS CCB
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Representations and Warranties
Sweezy and Shareholder represent and warrant to Bowlin as of the date
hereof and on the closing date as follows (all representations and
warranties being joint and several):
(a) Authority. Sweezy has the legal authority to sell, transfer, and
deliver to Bowlin the tangible and intangible assets of the business
known as "Sweezy Outdoor Advertising, Inc."
(b) Title. Sweezy has good and marketable title to all properties, assets
and leasehold estates, real and personal, tangible and intangible, to
be transferred pursuant to this Agreement subject to no mortgage,
pledge, lien, conditional sales agreement, encumbrance or charge.
Sweezy and Shareholder have good and marketable title, respectively,
to all real property to be leased to Bowlin under a land lease
pursuant to this agreement, subject to no mortgage, lien, encumbrance
or change which would interfere with Bowlin's rights under such land
lease.
(c) Insurance. Sweezy has delivered to Bowlin a list, complete in all
material respects as of the date of this agreement, of all insurance
policies carried by Sweezy relating to the assets transferred under
this Agreement. Sweezy carries insurance, which it believes to be
adequate in character and amount, with reputable insurers in respect
of its properties, assets, and business and such insurance policies
are still in full force and effect, and shall be in effect without
interruption until closing has occurred.
(d) Violations, Suits, Claims, etc. Except for that certain litigation
matter described on Exhibit H hereto, Sweezy is not in default under
any law or regulation, or under any order of any court or federal,
state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality wherever located, and there are (1)
no claims, actions, suits or proceedings instituted or filed and (2)
no claims actions, suits or proceedings threatened presently or which
in the future may be threatened or asserted against or affecting
Sweezy at law or in equity, or before or by any federal, state,
municipal or other governmental department, commission, board, bureau,
agency or instrumentality wherever located, and (3) there are no
potential claims, demands, liens, encumbrances, or debts with regard
to the assets that are the subject of this sale or that may create for
Bowlin any environmental or regulatory liability.
(e) Tax Returns. Sweezy has filed all requisite federal, state and other
tax returns due for all fiscal periods ended on or before the date of
/s/ RS CCB
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this agreement. There are no claims against Sweezy for federal, state
or other taxes for any period or periods to and including the date of
this agreement, the amounts shown as provisions for taxes on the
financial statements of Sweezy as of the date of this agreement
delivered to Bowlin are sufficient for the payment of all taxes of all
kinds for all fiscal periods ended on or before that date.
(f) Sole Shareholder. Shareholder is the sole owner of all issued and
outstanding capital stock of the Company, and no other person has any
right to acquire shares of capital stock of the Company.
(g) Organization, Good Standing, Power, etc. Sweezy (a) is a corporation
duly organized, validly existing and in good standing under the laws
of the State of Texas; and (b) has the requisite power and authority
to own, lease and operate its properties and to carry on its business
as currently conducted.
(h) Authorizations and Enforceability. Sweezy has all requisite power and
authority to execute, deliver and perform this Agreement and the other
agreements and instruments delivered pursuant hereto and to consummate
the transactions contemplated hereby. This Agreement and the other
agreements and instruments delivered pursuant hereto have been duly
and validly authorized, executed and delivered by Sweezy and
constitutes the valid and binding obligations of Sweezy, fully
enforceable in accordance with their terms.
(i) Effect of Agreement. The execution, delivery and performance of this
Agreement by Sweezy and Shareholder and the consummation of the
transactions contemplated hereby will not, with or without the giving
of notice or the lapse of time, or both: (a) violate any material
provision of law, statute, rule or regulation to which Company is
subject; (b) violate any judgment, order, writ or decree of any court,
arbitrator or governmental agency applicable to Company; or (c) result
in a material breach of or material conflict with any term, covenant,
condition or provision of, result in the modification or termination
of, constitute a material default under, or result in the creation or
imposition of, any lien, security interest, charge or encumbrance upon
any of the Assets pursuant to any charter, bylaw, commitment, contract
or other agreement or instrument, to which Company is a party or by
which any of its Assets is bound.
(j) Permits, Licenses, Compliance with Applicable Laws and Court Orders.
Company has all requisite corporate power and authority, and all
permits, licenses and approvals of governmental and administrative
authorities, to own, lease and operate its properties and to carry on
its business as presently conducted; all such permits, licenses and
/s/ RS CCB
- - - ----------
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approvals material to the conduct of the business of Company are in
full force and effect. Company's conduct of its business does not
materially violate or infringe any applicable law, statute, ordinance
or regulation. Company is not in default in any respect under any
executive, legislative, judicial, administrative or private (such as
arbitration) ruling, order, writ, injunction or decree.
A true and correct copy of the financial statements of Company as of
December 31, 1995, and the financial statements of Company as of December
31, 1996, including the related statement of operations for each of the
years then ended, have been delivered to Bowlin. The foregoing financial
statements were prepared on a consistent basis with prior years or periods,
and such statements fairly present the financial position and results of
operations of Company as of said dates and for the periods indicated. The
financial statements of Company for the year ended December 31, 1996,
referred to above, are referred to herein as the "Financial Statements".
Except to the extent reflected or reserved against or otherwise disclosed
in the Financial Statements, as of December 31, 1996, Company had no
liabilities, debts or obligations of any nature, whether absolute, accrued,
contingent or otherwise, or whether due or to become due with respect to
which Bowlin would become liable therefor. Subsequent to December 31, 1996,
Company has not incurred any liabilities, debts or obligations other than
in the ordinary course of business with respect to which Bowlin would
become liable therefor, and Company has properly recorded in its books of
account all items of income and expense and all other proper charges and
accruals required to be made. Since December 31, 1996, no debts or
liabilities of or to Company have been forgiven, settled or compromised
except for adequate consideration (as reasonably determined by the Company)
or except in the ordinary course of business.
(m) Agreements, Plans, Arrangements, etc. Except as set forth in Exhibit A
or A-1 hereto, Company is not a party to, nor is Company or any of the
Assets bound or affected by, any oral or written:
(1) lease agreement (whether as lessor or lessee) relating to real or
personal property;
(2) license agreement, assignment or other contract (whether as
licensor or licensee, assignor or assignee) relating to
trademarks, trade names, patents, copyrights (or applications
therefor);
/s/ RS CCB
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(3) agreement with any business broker with respect to this
transaction;
(4) agreement with any supplier, distributor, franchisor, dealer,
sales agent or representative;
(5) joint venture or partnership agreement with any other person;
(6) agreement with any bank, factor, finance company or similar
organization regarding the financing of accounts receivable or
other extensions of credit;
(7) agreement granting any lien, security interest or mortgage on any
Asset or other property of Company, including, without
limitation, any factoring agreement for the assignment of
accounts receivable;
(8) agreement for the Construction or modification of any Asset or
leasehold interest of Company;
(9) agreements with advertisers for lease of sign structures;
(10) agreement with any employee, consultant, or independent
contractor providing personal services to Company.
(n) Acquisition Agreements. There are no agreements relating to the
acquisition of the stock, business or Assets of Company to which
Company is a party, other than this Agreement.
(o) Status of Real Property. Neither Company nor Shareholder has received
any notice of noncompliance with respect to real property on which any
of the Assets are located (the "Real Property") with any applicable
statutes, laws, codes, ordinances, regulations or requirements
relating to fire, safety, health or environmental matters or
noncompliance with any covenants, conditions and restrictions (whether
or not of record) or local, municipal, regional, state or federal
requirements or regulations. To the best of Company's and
Shareholder's knowledge, there has been no release or discharge on or
under the Real Property by the Company of any toxic or hazardous
substance, material or waste which is or has been regulated by any
governmental or quasi-governmental authority or is or has been listed
as toxic or hazardous under any applicable local, state or federal
law. To the best of the Company's and Shareholder's knowledge, there
are no subsurface or other conditions related to toxic or hazardous
waste affecting the Real Property or any portion or component thereof,
and there are no underground storage tanks located on the Real
/s/ RS CCB
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Property.
(p) Defects. To the best of Company's and Shareholder's knowledge, there
are no structural or operational defects in any of the Assets.
(q) Leases Current. All obligations of the Company under all existing
lease agreements which are required by such agreements to have been
performed by Company have been fulfilled by the Company, including the
payment by the Company of all lease payments due and payable through
the date hereof.
Covenants
Between the date of this agreement and the closing date:
(a) Sweezy's officers will cause Sweezy to:
(1) Carry on its outdoor advertising business in substantially the
same manner as it has heretofore and not introduce any material
new method of management, operation or accounting;
(2) Maintain their properties and facilities in as good working order
and condition as at present, ordinary wear and tear excepted;
(3) Perform all material obligations under agreements relating to or
affecting its assets, properties and rights;
(4) Keep in full force and effect present insurance policies or other
comparable insurance coverage; and
(5) Use its best efforts to maintain and preserve its assets intact,
retain its present employees and maintain its relationships with
suppliers, customers and others having business relations with
it.
(b) Sweezy's officers will not permit Sweezy without the prior written
consent of Bowlin to:
(1) Enter into any contract or commitment or incur or agree to incur
any liability or make any capital expenditures except in the
normal course of business;
(2) Create, assume or permit to exist any mortgage, pledge or other
lien or encumbrance upon any assets or properties transferred
under this agreement, whether now owned or hereafter acquired; or
/s/ RS CCB
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(3) Sell, assign, lease or otherwise transfer or dispose of any
property or equipment subject to this agreement except in the
normal course of business.
Competition
To induce Bowlin to enter into this agreement, and in consideration of
payment of the final $400,000 of the purchase price, which will be held by
Bowlin in a separate escrow account to be held by a mutually acceptable
escrow agent, and paid to Richard Sweezy, unless he is in violation of the
terms of his non-compete agreement set forth herein and in Exhibit C-1
hereto, in equal increments of $40,000 each beginning on January 2, 1998
and on January 2nd of each year, thereafter until paid, in an aggregate
dollar amount of $400,000. There shall be a separate Escrow Document
governing activity of the Escrow account and this document shall be
completed in a mutually acceptable manner within 15 days of Closing.
Richard Sweezy covenants that, for a period of ten (10) years from the date
of closing, he will not, within a radius of one hundred (100) miles of
Killeen, Texas, as principal, agent, trustee or through the agency of any
corporation, partnership, association or agent or agency, engage in any
business in competition with Bowlin or any of its businesses, and shall not
be the owner of more than 1% of the outstanding capital stock of any
corporation (other than Bowlin or a corporation affiliated with Bowlin,) or
a member or employee of any partnership, or an owner or employee of any
other business in competition with Bowlin or any of its businesses, unless
specific exception is granted in the non-competition agreement signed
between Richard Sweezy and Bowlin. Richard Sweezy further agrees that
Bowlin shall be entitled to an order from a court sitting in equity
enforcing this non-competition agreement in addition to available remedies
at law. In the event that the provisions of this non-competition provision
should ever be deemed to exceed the time or geographic limitations
permitted by the applicable laws, then such provisions shall be reformed to
the maximum time or geographic limitations permitted by the applicable
laws.
Conditions to Bowlin's Obligations
The obligations of Bowlin hereunder are subject to the fulfillment, at or
prior to the Closing, of each of the following conditions, any or all of
which may be waived in writing by Bowlin, in its sole discretion:
(a) Accuracy of Representations and Warranties. Each of the
representations and warranties of Sweezy and Shareholder contained in
this Agreement shall be true on and as of the Closing Date with the
/s/ RS CCB
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same force and effect as though made on and as of the Closing Date,
except as affected by transactions contemplated hereby.
(b) Performance of Covenants. Sweezy shall have performed and complied
with all covenants, obligations and agreements to be performed or
complied with by it on or before the Closing Date pursuant to this
Agreement.
(c) No Litigation or Claims. No claim, action, suit, proceeding,
arbitration, investigation or hearing or notice of hearing shall be
pending or threatened against or affecting Sweezy which: (a) might
foreseeably result, or has resulted, either in an action to enjoin or
prevent or delay the consummation of the transactions contemplated by
this Agreement or in such an injunction; or (b) could, in the
determination of Bowlin, have an adverse effect on the assets to be
transferred hereunder.
(d) No Violations. No material violation of Sweezy shall exist, or be
alleged by any governmental authority to exist, of any law, statute,
ordinance or regulation, the enforcement of which would adversely
affect the financial condition, results of operations, properties or
business of Sweezy.
(e) Consents and Assignments. Sweezy shall have delivered to Bowlin all
consents and assignments of all persons and entities necessary for the
performance of the transactions contemplated by this Agreement,
including the transfer of all assets and the assignment of leases, and
Sweezy shall have obtained the consents of: any lender to Sweezy, or,
in the alternative, the release of all liens held by such lender, with
respect to the sale and transfer of the assets; and any other consents
of third parties deemed necessary or appropriate by Bowlin.
(f) Certificate. Bowlin shall have received a certificate signed by Sweezy
and Shareholder, dated the Closing Date, satisfactory in form and
substance to Bowlin and its counsel, certifying as to the fulfillment
of the conditions specified above.
(g) Satisfactory Completion of Due Diligence. Bowlin shall be satisfied in
its sole discretion with the content of the final Exhibits hereto and
other related documents for closing and shall otherwise be satisfied
in its sole discretion with the results of its due diligence review.
Indemnification
Sweezy and Shareholder, jointly and severally, will defend, indemnify and
hold harmless Bowlin and any person claiming by or through it or its
/s/ RS CCB
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successors and assigns from, against and in respect of any and all losses,
claims, and liabilities incurred by or asserted against Bowlin or its
successors or assigns in connection with (i) any breach of any of the
representations and warranties of Sweezy or Shareholder, (ii) any breach of
any covenant or agreement made by Sweezy or Shareholder in this Agreement,
(iii) any liability, debt or obligation of Sweezy or lien or encumbrance on
the Assets or (iv) any claim arising out of the use, sale or operation of
the Assets by Sweezy or Shareholder and/or the operation of the business of
Sweezy or Shareholder prior to the Closing. All indemnification obligations
herein shall survive the Closing.
Taxes
Real Estate and personal property taxes, if any, assessed or to be assessed
for the current calendar or fiscal year, regardless of when payable, shall
be prorated between Bowlin and Sweezy as of the closing date.
Risk of Loss
The risk of loss or destruction of or damage to the assets transferred
hereunder, including inventory, fixtures, equipment and real property from
any cause whatsoever at all times on or subsequent to the execution of this
document but before closing shall be borne by Sweezy.
Bowlin's Remedies
Bowlin shall be entitled, without limitation, to all incidental and
consequential damages resulting from a breach of any warranty or
representation or covenant of Sweezy or Shareholder made herein including,
but not limited to, all costs of litigation incurred, including reasonable
attorney's fees.
Arbitration
In the event of any dispute arising from this agreement, New Mexico law
shall apply. Any claims or controversy between Sweezy or its officers or
shareholders, on the one hand, and Bowlin, on the other hand, arising out
of or relating to this agreement or the sale and purchase of assets, shall
be decided by arbitration at Albuquerque in accordance with Commercial
Arbitration Rules of the American Arbitration Association by a single
arbitrator appointed in accordance with the rules in effect when
arbitration is first demanded by any party. The award rendered by the
arbitrator shall be final and judgment may be entered into any court having
jurisdiction.
/s/ RS CCB
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Miscellaneous
(a) Confidentiality. Except as required by applicable law or regulation,
the parties hereto hereby agree to maintain the confidentiality of
confidential business information of Sweezy with respect to the assets
and business being purchased hereunder.
(b) Expenses. Except as otherwise provided herein, whether or not the
transactions contemplated by this Agreement are consummated, each
party hereto shall pay its own expenses and the fees and expenses of
its counsel and accountants and other experts. Furthermore, Bowlin
shall be responsible for payment to the business broker retained by
it.
(c) Survival of Representations and Warranties. The representations,
warranties, covenants and agreements set forth in this Agreement and
any other written representation in any ancillary document shall
survive the Closing.
(d) Waivers. The waiver by any party hereto of a breach of any provision
of this Agreement shall not operate or be construed as a waiver of any
subsequent breach.
(e) Binding Effect; Benefits. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective
successors and assigns.
(f) Notices. All notices, requests, demands and other communications which
are required to be or may be given under this Agreement shall be in
writing and shall be deemed to have been duly given when delivered in
person or transmitted by fax or five (5) days after deposit in the
U.S. mails by certified or registered first class mail, postage
prepaid, return receipt requested, addressed to the party to whom the
same is so given or made.
if to Sweezy or Shareholder to:
Richard Sweezy
109 South Main Street
Nolanville, Texas 76559
/s/ RS CCB
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if to Bowlin to:
Bowlin Outdoor Advertising and Travel Centers Incorporated
150 Louisiana Blvd. N.E.
Albuquerque, New Mexico 87108
Attention: Michael L. Bowlin, President
or to such other address or Fax Number as any party may designate by
giving notice to the other parties hereto.
(g) Further Assurances. The Company and Shareholder shall, from time to
time at or after the Closing, at the request of Bowlin, and without
further consideration, execute and deliver such other instruments and
take such other actions as may be required to confer to Bowlin and its
assignees the benefits contemplated by this Agreement.
(h) Entire Agreement. This document contains the entire agreement between
the parties and supersedes all prior agreements between the parties,
if any, written or oral, with respect to the subject matter thereof.
/s/ RS CCB
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<PAGE>
AGREED and ACCEPTED:
BOWLIN OUTDOOR ADVERTISING & TRAVEL CENTERS INCORPORATED
By:
- - - ------------------------------------
C. C. Bess, Executive Vice President
SWEEZY OUTDOOR ADVERTISING, INC.
By:
- - - ------------------------------------
Richard Sweezy, President
By:
- - - ------------------------------------
Richard Sweezy, Individually
/s/ RS CCB
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<PAGE>
Acknowledgment for Corporations
STATE OF TEXAS )
) ss.
COUNTY OF _____________ )
The foregoing instrument was acknowledged before me this ___ day of
December, 1997, by C. C. Bess, Executive Vice President of BOWLIN Outdoor
Advertising & Travel Centers Incorporated, a Nevada Corporation, on behalf of
the corporation.
--------------------------------
Notary Public
My commission expires:
- - - ----------------------
Acknowledgment for Corporations
STATE OF TEXAS )
) ss.
COUNTY OF ____________ )
The foregoing instrument was acknowledged before me this ___ day of
December, 1997, by Richard Sweezy, President of Sweezy Outdoor Advertising,
Inc., a Texas Corporation, on behalf of the corporation.
--------------------------------
Notary Public
My commission expires:
- - - ----------------------
Acknowledgment for Individual
STATE OF TEXAS )
) ss.
COUNTY OF ___________ )
The foregoing instrument was acknowledged before me this ___ day of
December, 1997, by Richard Sweezy, Individually.
--------------------------------
Notary Public
My commission expires:
- - - ----------------------
/s/ RS CCB
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CREDIT AGREEMENT
This Loan Agreement dated effective November 25, 1997, is between BOWLIN
OUTDOOR ADVERTISING & TRAVEL CENTERS INCORPORATED (the "Borrower") and FIRST
SECURITY BANK OF NEW MEXICO, N.A. ("Bank"), a national banking association.
The Proposed Loans
1. Borrower is presently indebted to the Bank on several promissory notes
referenced in Exhibit 1.07 below.
2. Borrower has requested, in addition to those existing notes, that the
Bank:
a.) Grant a new $8,000,000 "Facility Line" to fund Borrower's
acquisition of existing or construction of new travel centers and to
finance the purchase of new vehicles, fuel dispensing and other
related equipment, and computer systems, for the travel centers and
certain other furniture, fixtures, and equipment related to the travel
centers:
b.) Grant a new $2,000,000 "Leasing Line" to fund leases of vehicles,
fuel dispensing and related equipment, computer systems, and certain
other furniture, fixtures and equipment, and:
c.) Increase the existing $150,000 Working Capital Line to $500,000.
3. The Bank is willing to grant the additional credit to the Borrower on
the terms and conditions set forth in this Agreement.
AGREEMENT
In consideration of the mutual covenants and agreements contained in this
Agreement and for other good and valuable consideration, the Borrower and the
Bank agree:
SECTION 1 - DEFINITIONS.
As used in this Agreement, the following terms shall have the respective
meanings indicated:
1.01 Agreement means this Credit Agreement.
1.02 Bank means First Security Bank of New Mexico, N.A. and its successors
and assigns.
<PAGE>
1.03 Borrower means BOWLIN Outdoor Advertising & Travel Centers
Incorporated, a Nevada corporation whose office and principle place of business
is 150 Louisiana Blvd, NE, Albuquerque, NM 87108, and all successors and
assigns.
1.04 Borrower's Resolutions and Approvals means, the resolutions duly
adopted by the Borrower authorizing and consenting to the Loan and to the
execution and delivery of the Loan Documents. The Borrower's Resolutions must be
evidenced by resolutions and authorizations in form acceptable to the Bank.
1.05 Business Day means a day when the Bank is open for business.
1.06 Closing Date means the effective date of November 25, 1997.
1.07 Existing Notes means the existing promissory notes payable to the Bank
listed on Exhibit 1.07. The Borrower is the maker on these notes or has assumed
all of makers obligations under the terms of the Assumption Agreement dated
effective August 28,1996.
1.08 Facility Line means the line of credit to fund up to two (2) years the
aggregate amount of $8,000,000 to the Borrower to construct, purchase or remodel
travel centers and to purchase vehicles, computer equipment, and other allowed
fixtures and equipment as provided in this Agreement.
1.09 Governmental Authority means the United States of America and any
state government; any political subdivision of any of the foregoing and any
agency, department, commission, board, bureau or instrumentality of any of them
which now or hereafter exercises jurisdiction over the Borrower.
1.10 Lease(s) means the individual leases executed by the Borrower to the
Bank under the Lease Line in the form(s) used required by the Bank at the time
each Lease is executed.
1.11 Lease Line means the line of credit to fund individual Leases by the
Bank to the Borrower, up to the aggregate maximum amount of $2,000,000 upon the
requirements and conditions of this Agreement.
1.12 Loan means the loans from the Bank to the Borrower described in this
Agreement, evidenced by the Notes, leases and the other Loan Documents.
2
<PAGE>
1.13 Loan Document(s) means this Agreement, the Notes, and all other
documents or instruments executed in connection with or as security for the
payment of the Loan or for performance of the Borrower's Obligations under this
Agreement, or for both such payment and performance and all renewals,
extensions, modifications and amendments of any of the foregoing.
1.14 Note(s) means the promissory notes referred or in the form attached as
follows, executed and delivered to the Bank by the Borrower, together with all
extensions, amendments, modifications, revisions, replacements, and
substitutions thereof permitted by the Bank:
a.) The existing Notes by the Borrower to the Bank listed on Exhibit
1.07(a),
b.) Individual notes executed by the Borrower to the Bank, in the form
required by the Bank, up to the maximum aggregated face amount of
$8,000,000 under the $8,000,000 Facility Line,
c.) The $500,000 "Working Capital Note" in the form attached as Exhibit
1.14(c).
1.15 Obligations means all obligations of the Borrower:
a.) To pay the principal of, and interest on, each Note and Lease and any
Renewal Note in accordance with their respective terms, now existing or
existing in the future, and to satisfy all of its other liabilities to the
Bank whether hereunder or otherwise, whether now existing or hereafter
incurred, matured or unmatured, direct or contingent, joint or several,
including any extensions, modifications, renewals thereof and substitutions
therefor;
b.) To repay to the Bank all amounts advanced by the Bank hereunder or
otherwise on behalf of the Borrower, including, but without limitation,
advances for Loan Fees, principal or interest payments to prior secured
parties or lienholders, or for taxes or levies; and
c.) To reimburse the Bank, on demand, for all of the Bank's expenses and
costs, including the reasonable fees and expenses of its counsel, in
connection with the administration, amendment, modification or enforcement
of the Loan Documents and any documents evidencing or relating to a Renewal
Note, including, without limitation, any proceeding brought or threatened
to enforce payment of any of the Obligations.
3
<PAGE>
1.16 Renewal Note means any promissory note or lease executed and delivered
by the Borrower to the Bank in connection with a renewal, extension,
modification, amendment, revision, replacement or substitution of any Note or
leases in accordance with the terms of this Agreement.
1.17 Working Capital Line means the revolving two (2) year revolving line
of credit in the maximum principal amount any one time of $500,000 to fund the
Borrower's short term working capital needs.
SECTION 2 - THE LOAN.
2.01 General Terms. Borrower's obligation to repay the Loan shall be
evidenced by the Notes and leases, any Renewal Note, and the other Loan
Documents, all of which Borrower shall execute and deliver to the Bank before it
may receive any Loan proceeds.
2.02 Right of Set-off. Collateral includes the Bank's right of set-off
against any balance or share belonging to Borrower of any deposit or other
account with the Bank, notwithstanding any other security for the Loan.
2.03 Interest Rates. Interest shall accrue on each Note at the rate or
index specified in the Note as established at the time the Note is executed and
in accordance with this Agreement. The Bank may, at its option, calculate and
charge interest as though each payment is made on the payment due date with
principal reductions effective as of the date of receipt.
2.04 Repayment of Notes and Leases. Each Note and Lease shall be due and
payable on the date(s) specified in the Note and Lease and in accordance with
the terms thereof. All payments shall be paid directly to the Bank in
immediately available funds. Alternatively and at its sole discretion, the Bank
may charge any deposit account of Borrower for all or any part of the
Obligations due or declared due. The records maintained by the Bank shall be
deemed to be evidence of the date of the amount of each payment on each Note or
Lease and the other Obligations. Payments may be applied to a Note or Lease in
such amounts and in such order or priority as the Bank deems necessary and as
provided in the Note or lease.
2.05 Loan Fees. Borrower shall pay to the Bank fees on the Notes and Leases
as follows
a.) Facility Line fees:
i) on each Note for construction of a travel center, a fee of 35 basis
points (.35%) of the maximum Note amount,
4
<PAGE>
ii) upon completion of construction and conversion of the construction
note to an amortation, and for the purchase of an existing travel
center, a fee of 35 basis points (.35%) of the maximum Note amount,
iii) for each Note to finance vehicles, fuel dispensing equipment,
computer systems and furniture, fixtures and equipment and for any
other allowed purpose, a fee of 25 basis points (.25%) of the maximum
Note amount.
b.) Lease Line fees: a fee of one-half percent (.005%) of the net interest
balance (but not less than a minimum fee of $200.00) an each Lease.
c.) Working Capital Line: a fee of 25 basis points (.25%) of the
$500,000.00 face amount of the Working Capital Note.
d.) Other Fees and Costs: the Borrower will reimburse the Bank for all
out-of-pocket costs incurred by the Bank in connection with the preparation
of this Agreement including attorneys fees not to exceed $3,000.00.
2.06 Two Year Limitation on Advances Under the Facility Line and Lease
Line: Notwithstanding any later maturity date in any Note or Lease, any requests
for funding by the Borrower and any obligation of the Bank to fund advances
under the Facility Line or the Lease Line are subject to a two (2) year
limitation. Any request to create a Note under the Facility Line or to create a
Lease under the Lease Line must be received by the Bank from the Borrower and
all necessary Note(s) or Lease(s) and all other Loan or Lease documents
necessary to such request must be completed not less than two (2) years from the
Closing Date. Funding on an individual Note made prior to the Closing Date may
be completed after the Closing date in accordance with the provisions of the
Agreement and this Exhibit.
Section 3 - COVENANTS OF THE BORROWER.
3.01 Affirmative Covenants. So long as any Obligations remain unpaid, the
Borrower will, unless the Bank shall otherwise consent in writing:
a.) Compliance with Laws, Etc. Comply, and cause each of its subsidiaries
to comply, in all material respects with (i) all material laws, rules,
regulations and orders (including, without limitation, ERISA and all
applicable Environmental Laws) and (ii) all other laws, rules, regulations
and orders, promptly upon discovery of any non-compliance.
5
<PAGE>
b.) Payment of Taxes, Etc. Pay and discharge, and cause each of its
subsidiaries to pay and discharge, before the same shall become delinquent,
(i) all taxes, assessments and governmental charges or levies imposed upon
it or upon its property provided, however, that neither the Borrower nor
any of its subsidiaries shall be required to pay or discharge any such tax,
assessment, charge or claim that is being contested in good faith and by
proper proceedings and as to which appropriate reserves are being
maintained.
c.) Maintenance of Insurance. Maintain, and cause each of its subsidiaries
to maintain, insurance with responsible and reputable insurance companies
or associations in such amounts and covering such risks as is usually
carried by companies engaged in similar businesses and owning similar
properties in the same general areas in which the Borrower or such
subsidiary operates; provided that the Borrower and its subsidiaries may
maintain reasonable amount of self insurance consistent with their
financial condition and other relevant criteria.
d.) Preservation of Corporate Existence and Approvals.Preserve and
maintain, and cause each of its subsidiaries to preserve and maintain (i)
its corporate existence, rights (charter and statutory), franchises and
privileges in the jurisdiction of its incorporation, and qualify and remain
qualified, and causes each of its subsidiaries to qualify and remain
qualified, as a foreign corporation in each jurisdiction in which such
qualification is necessary or desirable in view of its business and
operations or the ownership of its properties.
e.) Maintenance of Properties, Etc. Maintain and preserve, and cause each
of its subsidiaries to maintain and preserve, all of its properties that
are used or useful in the conduct of its business in good working order and
condition, ordinary wear and tear excepted.
f.) Performance of other obligations. Perform and observe all of the terms
and provisions of all other loans, debts and obligations to all other
lenders and creditors.
g.) Transactions with Affiliates. Conduct, and cause each of its
subsidiaries to conduct, all transactions with any of their affiliates on
terms that are fair and reasonable and no less favorable to the Borrower or
such subsidiary than it would obtain in a comparable arm's-length
transaction with a person not an affiliate.
h.) Total Debt to Net Worth Ratio. Maintain a ratio of consolidated total
debt to consolidated total tangible net worth of the Borrower (and any
subsidiaries), measured at the end of each fiscal quarter, of not more than
1.75 to 1.
6
<PAGE>
i.) Debt Coverage Ration. Maintain a ratio of adjusted annual net income to
debt service not less than 1.4 to 1 calculated:
(i) calculated by dividing the sum of annual net income, depreciation,
amortization, and interest expense by the sum of the prior year
current maturities of long term debt (including Lease obligation) and
interest expense.
j.) Reporting Requirements. Furnish to the Lenders:
i) as soon as possible and in any event within five days after the
occurrence of each Default or Event of Default continuing on the
date of such statement, a statement by the chief financial
officer of the Borrower setting forth details of such Default and
the action that the Borrower has taken and proposes to take with
respect thereto;
ii) as soon as available and in any event within 50 days after the
end of each of the first three fiscal quarters of each fiscal
year of the Borrower, a copy of the 10-Q and other related
filings submitted by the Borrower to the Securities and Exchange
Commission (the "SEC");
iii) as soon as available and in any event within 90 days after the
end of each fiscal year of the Borrower, a copy of the annual
10-K submitted by the Borrower to the SEC to include all
schedules, accounts and opinions notes;
iv) promptly after the commencement thereof, notice of all actions,
suits and proceedings threatened or pending before any court or
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, materially affecting the
Borrower or any of its subsidiaries;
v) promptly after the sending or filing thereof, copies of all proxy
statements, other financial statements and reports that the
Borrower sends to its stockholders, and copies of all regular,
periodic and special reports, and all registration statements and
other reports or information, that the Borrower files with the
Securities and Exchange Commission or any governmental authority
that may be substituted therefor, or with any national securities
exchange;
7
<PAGE>
vi) promptly after the furnishing thereof, copies of any statement or
report furnished to any other holder of the securities of the
Borrower or of any of its subsidiaries with respect to any
pending or potential non-compliance with the terms of any other
indenture, loan or credit or similar agreement, and not otherwise
required to be furnished to the Lenders pursuant to any other
clause of this Section;
j.) Visitation Rights. At any reasonable time and from time to time,
permit, the Bank (i) to examine and make copies of and abstracts from the
records and books of account of, and visit the properties of, the Borrower
or any such subsidiary and (ii) to discuss the affairs, finances and
accounts of the Borrower and any of its subsidiaries with any of their
officers or directors and with their independent certified public
accountants.
l.) Books and Records. Keep, and cause each of its subsidiaries to keep,
proper books of record and account, in which full and correct entries shall
be made of all financial transactions and the assets and business of the
Borrower and each such subsidiary in accordance with GAAP.
Section 3.02 Negative Covenants. So long as any obligations remain unpaid, the
Borrower will not, without the prior written consent of the Bank:
a.) Mergers, Etc. Merge with or into or consolidate with or into any other
entity , or acquire all or substantially all of the assets of any
non-outdoor advertising or non-travel center business or entity, or permit
any of its subsidiaries to do so, except that (i) any subsidiary of the
Borrower may merge or consolidate with or into or acquire assets of, any
other subsidiary of the Borrower and (ii) any of the Borrower's
subsidiaries may merge into or dispose of assets to the Borrower; provided,
however, that in each case, immediately after giving effect thereto, no
Event of Default would exist, and in the case of any such merger to which
the Borrower is a party, the Borrower is the surviving corporation.
b.) Sales, Etc. of Assets. Sell, lease, transfer or otherwise dispose of,
or permit any of its subsidiaries to sell, lease, transfer, or otherwise
dispose of, any of its assets (including, without limitation, all or
substantially all of its assets, whether in one transaction or a series of
related transactions) except (i) in connection with a transaction
authorized by this Agreement; and (ii) sell, lease, transfer or other
disposition, at less than fair value, or (iii) sale, transfer or
disposition of assets, not in excess of the aggregate book value of such
assets of $5,000,000 in any calendar year.
8
<PAGE>
c.) Investments in Other Entities. Make or hold, or permit any of its
subsidiaries to make or hold, any investment in any other entity except in
the normal course of business.
d.) Change in Nature of Business. Except in connection with transactions
permitted under Section 3.02(b) and (c) above, make, or permit any of its
subsidiaries to make, any material change in the nature of its business as
carried on at the date hereof.
e.) Accounting Changes. Make or permit, or permit any of its subsidiaries
to make or permit, any change in accounting policies or reporting
practices, except as required by GAAP, or as permitted by GAAP, if the
amounts involved are not material.
SECTION 4 - ADVANCES ON LINES.
Provided no Default exists, provided the Borrower has compiled with and
observed all covenants, requirements and conditions of this Agreement, and
provided the Borrower is not prohibited from doing so by any Governmental
Authority, Borrower may request advances on the various Lines as provided below.
The Bank shall have no obligation to make advances, which would cause the
aggregate outstanding principal balance of the Notes or the Leases to exceed the
applicable maximum loan amount for that Line.
4.01 Advances under $8,000,000 Facility Line. See disbursement requirements
and procedures in Exhibit 4.01 attached.
4.02 Advances (Leases) under the $2,000,000 Leases Line. See disbursement
requirements and procedures in Exhibit 4.02 attached.
4.03 Advances on $500,000 Working Capital Line. The Working Capital Line is
a revolving line of credit on which the Borrower may from time to time request
advances. The maximum principal balance, including any requested advance, shall
not at any time exceed $500,000. The Borrower shall use proceeds from advances
only for its short term working capital needs. Borrower shall rest (pay the
entire principal balance of) the Working Capital Line for not less than 30
consecutive calendar days during each year of the two (2) year term of this
Line. Interest on the Working Capital Note will be paid upon the terms and rate
specified in that Note.
SECTION 5 - COLLATERAL.
5.01 The following liens, mortgages, security interests and other
collateral listed, referenced in, or contemplated by this Agreement shall each
secure all Obligations of the Borrower to the Bank:
9
<PAGE>
a.) All existing collateral documents and lien interests listed on Exhibit
5.01(a) attached.
b.) A first real estate mortgage (or deed of trust) on the real property
and improvements for each travel center constructed, purchased, or
remodeled under the Facility Line.
c.) A perfected first lien, security interest, and assignment of lessor's
rights to payment in all vehicles, equipment, inventory, fixtures and
intangibles purchased under the Facility Line.
d.) All collateral documentation required by the Bank for each Lease under
the Leasing Line.
e.) Insurance coverage and loss payee provisions for all of Borrower's
assets which are collateral for the lines, including all vehicles and
equipment owned by the Bank and leased to Borrower under the Lease line.
f.) Any additional collateral which the Borrower grants, pledges, mortgages
or assigns to the Bank during the term of the Loans.
SECTION 6 - DEFAULT AND REMEDIES.
6.01 Events of Default. Each of the following shall constitute an Event of
Default under this Agreement:
a.) Failure of Borrower to make any payment on any Note, Lease, or any
other Obligations to the Bank within five (5) Business Days after receipt
of certified written notice from the Bank.
b.) Any warranty, representation or statement made or furnished to Bank by
or on behalf of Borrower under this Agreement or any Loan Document is false
or misleading in any material respect at the time made or furnished.
c.) This Agreement or any other Loan Document ceases to be in full force
and effect.
d.) Any default by Borrower on any indebtedness to any other lender or
default or material non-compliance by the Borrower on any borrowing,
obligation, or contractual liability with any third party.
10
<PAGE>
e.) The dissolution or termination of Borrower's existence as a going
business, the insolvency of Borrower, the appointment of a receiver for any
part of Borrower's property, any assignment for the benefit of creditors,
or the commencement of any proceeding under any bankruptcy or insolvency
laws by or against Borrower.
f.) Commencement of foreclosure or forfeiture proceedings, whether by
judicial proceeding, self-help, repossession or any other method, by any
creditor of Borrower, including any garnishment, attachment, or levy on or
of any of Borrower's deposit accounts with Lender.
g.) A material adverse change occurs in Borrower's financial condition, or
Bank in good faith believes the prospect of payment or performance of the
Indebtedness is impaired.
h.) As to any breach or failure to observe or perform any non-payment
condition, requirement or restriction under this Agreement or any other
Loan Document when such breach is susceptible to cure, the Borrower fails
to cure or remedy such breach within 15 days after receipt of certified
written notice from the Bank of such breach.
i.) Borrower breaches or fails to observe any other term, condition,
requirement, or restriction under this Agreement, in any other Loan
Document, or in any other agreement with the Bank which is not susceptible
to cure.
6.02 Cessation of Advances and Acceleration. Upon the occurrence of any
Event of Default as described in section 6.01, the Bank may forthwith or at any
time during such default or events, without notice to the Borrower refuse to
make further advances on any Line or Note, or lease and may, independent of such
decision, declare the unpaid balance of the Obligations, including all principal
and all interest then accrued, to be immediately due and payable; and the
Obligations shall become and be immediately due and payable without presentment,
notice of protest or other notice of dishonor or of any other kind of notice
whatsoever, including, without limitation, notice of default, notice of intent
to accelerate and notice of acceleration, all of which are hereby expressly
waived by Borrower; and the Bank may immediately enforce its rights under the
Loan Documents; and may exercise all rights available to it in law or equity
including all rights available under this Agreement or under the other Loan
Documents.
SECTION 7 - MISCELLANEOUS.
7.01 Execution and Form of Documents. Each written instrument required by
this Agreement or any of the other Loan Documents to be furnished to the Bank
shall be duly executed by the person or persons specified (or where no
particular person is specified, by such person as the Bank shall require), duly
11
<PAGE>
acknowledged where required by the Bank and, in the case of affidavits and
similar sworn instruments, duly sworn to and subscribed before a notary public
duly authorized to act in the premises by Governmental Authority; shall be
furnished to the Bank in one or more copies as required by the Bank; shall be in
such form and of such substance as shall be effective, in the judgment of the
Bank, to accomplish the results intended by such instrument; and shall in all
respects be in form and substance satisfactory to the Bank and to its legal
counsel.
7.02 Assignment of Loan Proceeds. Borrower irrevocably assigns to the Bank
and grants a security interest to the Bank in and to its right, title and
interest in:
a.) All Loan proceeds held by the Bank, whether or not disbursed; and
b.) All funds deposited by the Borrower with the Bank each under this
Agreement or otherwise.
7.03 Severability. If any item, term or provision contained in the Loan
Documents is in conflict, or may hereafter be held to be in conflict with the
laws of the United States or the State of New Mexico, as applicable, or any
political subdivision of any of them, then only the documents containing such
provision shall be affected and it shall be affected only as to such particular
item, term or provision and shall in all other respects remain in full force and
effect.
7.04 No Waiver. No course of dealing between the Bank and the Borrower or
any guarantor, or any delay on the part of the Bank in exercising any rights
hereunder or under the Loan Documents shall operate as a waiver of any rights of
the Bank, except to the extent, if any, expressly waived in writing by the Bank.
7.05 Survival. All covenants, agreements, representations and warranties
made by the Borrower in the Loan Documents and in any certificates or other
documents or instruments delivered pursuant to this Agreement shall survive the
making by the Bank of the Loan and the execution and delivery of the Loan
Documents, and shall continue in full force and effect until the Obligations are
paid in full.
7.06 Notices. Any notice, request or other communication required or
permitted to be given hereunder shall be given in writing, by hand delivery, or
certified delivery by commercial courier or the United States Postal Service,
received by the respective parties at the following address or such other
delivery address as the party designates in writing:
12
<PAGE>
If to the Borrower:
BOWLIN Outdoor Advertising & Travel Centers Incorporated
150 Louisiana Blvd. NE
Albuquerque, NM 87108
Attn: Michael L. Bowlin
If to the Bank:
First Security Bank of New Mexico, N.A.
P.O. Box 1305
Albuquerque, NM 87103
Attn: Commercial Loans, James Bertram, Vice President
7.07 Modification. This Agreement shall not be changed orally or by course
of conduct or dealing but shall be changed only by agreement in writing signed
by all parties hereto.
7.08 Counterparts. This Agreement may be executed simultaneously in any
number of counterparts, each of which, when so executed and delivered, shall be
an original, but such counterparts shall together constitute one and the same
instrument.
7.09 Binding Effect. This Agreement shall be binding upon the Bank, the
Borrower and their respective successors, assigns, heirs and personal
representatives.
7.10 No Partnership or Joint Venture. Notwithstanding anything to the
contrary in the Loan Documents, and notwithstanding any action the Bank takes
pursuant to the Loan Documents, the Bank and the Borrower shall not be deemed to
be engaged in a partnership or joint venture, nor shall the Bank be deemed to be
an agent or principal of the Borrower.
7.11 Assignment by the Bank. The Loan Documents, each Note, any Renewal
Note and the Loan contemplated thereby, may be placed, participated, assigned
and/or serviced by the Bank and/or its successors and assigns, and in connection
with any of the foregoing, the Bank may retain a portion of the fees or interest
paid on the Notes or may receive servicing, brokerage or other fees from the
purchaser or participant. Any such placement, participation, assignment or
servicing shall be at the Bank's sole option; and the Bank and its successors
and assigns shall have no obligations to disclose to the Borrower the receipt,
or contemplated receipt, of any such fees, nor shall the Borrower have any claim
or right to the same. The Bank shall have the right to disclose and to provide
to any prospective purchaser or participant copies of Loan Documents and
financial and other information of or about the Borrower.
13
<PAGE>
7.12 Relation to Other Documents. This Loan Agreement supersedes and
replaces all prior agreements, commitments, and understandings between the Bank
and the Borrower, written or unwritten, including all previous loan agreements.
The provisions of this Agreement are not intended to supersede the provisions of
the other Loan Documents, but should be construed as supplemental thereto.
However, except as specifically provided herein, if there is any inconsistency
between the provisions of this Agreement and the other Loan Documents, this
Agreement shall be control.
7.13 Jurisdiction. Borrower hereby irrevocably agrees that any legal action
or proceedings against the Borrower with respect to this Agreement may be
brought in the courts of the State of New Mexico or in the U.S. District Court
for the District of New Mexico. Borrower hereby consents and attorneys to the
jurisdiction of such courts and further consents to the personal jurisdiction of
any court located within Bernalillo County, New Mexico, with respect to any
lawsuit to enforce the obligations of Borrower under this Agreement. This
provision shall not limit the right of the Bank to bring such action or
proceedings against the Borrower in the courts of such other states or
jurisdictions where the Borrower may be subject to jurisdiction.
7.14 Governing Law. This Agreement and the Loan Documents have been
negotiated, executed and delivered solely within the State of New Mexico. The
rights and obligations of the parties under this Agreement and under each of the
Loan Documents shall be governed by and construed and interpreted in accordance
with the laws of the State of New Mexico.
7.15 Jury Trial Waiver. In any action, claim, counterclaim, or other
proceeding based upon or related in any manner to this Agreement, the Note, or
the other Loan Documents, Borrower, the Bank, and all makers, sureties,
guarantors of the Note, and this Agreement, together with all successors and
assigns of the foregoing, waive the right to a jury demand and to a trial by
jury and stipulate that the trier of fact shall be the designated judge in such
proceeding and acknowledge and agree that such waiver may significantly limit an
important common law, constitutional, and/or statutory right which would be
otherwise available.
BANK: BORROWER:
First Security Bank of BOWLIN Outdoor Advertising &
New Mexico, N.A. Travel Centers Incorporated
By:/s/ James J. Bertram By:/s/ Michael L. Bowlin
-------------------------------- ----------------------------
James J. Bertram, Vice President Michael L. Bowlin, President
Executed on: 11/25/97 11/25/97
-------- --------
14
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