UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 26, 1999
PRECISION AUTO CARE, INC.
(Exact name of registrant as specified in its charter)
Virginia 1-14510 54-1847851
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(State or other jurisdiction (Commission File) (IRS Employer ID No.)
of incorporation or organization)
748 Miller Drive, S.E.
Leesburg, Virginia 20175
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (703) 777-9095
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ITEM 5. Other Events.
A copy of the Registrant's press release dated January 26, 1999 is
attached hereto as Exhibit 99 and incorporated herein by reference. A copy of
the Subordinated Debenture in the principal amount of $5,000,000, which
constitutes the bridge loan referenced in the press release, is included as
Exhibit 4 and all of its terms are incorporated herein by reference.
ITEM 7. Financial Statements and Exhibits.
(c) Exhibits
4 Subordinated Debenture dated January 25, 1999 in the
principal amount of $5,000,000.
99 Press Release of Precision Auto Care, Inc., dated January
26, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized, in Leesburg, Virginia, on
January 26, 1999.
Precision Auto Care, Inc.
By:
_____________________________________
Arnold Janofsky
Senior Vice President, Secretary and
General Counsel
EXHIBIT 4
THIS DEBENTURE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, THE
VIRGINIA SECURITIES ACT OR THE STATE SECURITIES OR BLUE SKY LAWS OF ANY OTHER
STATE OR JURISDICTION, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED OR
OTHERWISE DISPOSED OF UNLESS IT IS REGISTERED UNDER APPLICABLE FEDERAL AND STATE
SECURITIES LAWS OR UNLESS, IN THE OPINION OF COUNSEL TO THE CORPORATION,
REGISTRATION IS NOT REQUIRED.
PAYMENTS TO BE MADE IN ACCORDANCE WITH THE TERMS OF THIS SUBORDINATED DEBENTURE
ARE SUBORDINATED TO RIGHTS OF PAYMENT IN RESPECT OF SENIOR INDEBTEDNESS AS
HEREIN PROVIDED.
PRECISION AUTO CARE, INC.
Subordinated Debenture
Due May 25, 1999
Leesburg, Virginia January 25, 1999
FOR VALUE RECEIVED, PRECISION AUTO CARE, INC., a Virginia
corporation (the "Corporation"), promises to pay to the order of Arthur C.
Kellar, an individual resident of the State of Florida (Arthur C. Kellar, or any
subsequent holder of this Debenture are referred to herein as the "Holder"), at
Wilmington Trust Company, 1100 North Market Street, Wilmington, Delaware 19890,
ABA #031100092, for further credit to Arthur C. Kellar, Account Number 40726, or
at such other place as the Holder may from time to time designate, the principal
sum of Five Million Dollars ($5,000,000) (the "Principal Amount"), together with
interest on the outstanding principal amount thereof from time to time at the
rate hereinafter provided plus a $50,000 financing fee (the "Fee") and any and
all other sums which may be owing to the Holder by the Corporation. The entire
Principal Amount, together with accrued interest and the Fee, shall be due and
payable May 25, 1999, which is the final and absolute due date of this Debenture
(the "Maturity Date"), or on such earlier date specified by the Holder if this
Debenture is accelerated pursuant to Section 12 hereof. In order to induce the
Holder to enter into this transaction, the Company will grant to the Holder an
option to purchase 25,000 shares of the Corporation's common stock at an
exercise price equal to the closing price of the Corporation's common stock on
the date of this Debenture. The Corporation will provide the Holder with an
option agreement in form and substance reasonably satisfactory to the Holder
which shall provide that the option shall vest immediately and shall have a term
of 10 years from the date of this Debenture.
The following terms shall apply to this Debenture:
SECTION 1. Application of Proceeds. The proceeds of this Debenture
shall be used by the Corporation to satisfy payment of the obligations to be
described in Exhibit A, which must be
<PAGE>
approved by the Holder prior to any expenditure by the Corporation of any
proceeds of this Debenture and which will be attached hereto and made a part
hereof. Without limiting the foregoing, the proceeds of this Debenture may not
be used by the Corporation to pay the cost of acquisitions or acquisition
financing (except that $2,500,000 of the proceeds will be paid to First Union
National Bank for application against the Acquisition Line of Credit),
management bonuses, dividends or any other payments in respect of the
Corporation's common stock, or to make any payments other than as provided on
Exhibit A.
SECTION 2. Interest Rate. From the date hereof, until all sums due
and owing hereunder have been paid in full, and unless adjusted as provided in
this Debenture, interest shall accrue upon the unpaid Principal Amount at the
fixed rate of FIFTEEN PERCENT (15%) per annum. Interest shall be calculated on
the basis of a year of 360 days and the actual number of days elapsed.
SECTION 3. Form of Payment at Maturity. The entire Principal Amount
shall be due and payable on the Maturity Date, in the form of cash. The sum of
all accrued interest on the Principal Amount plus the Fee, which will total
$300,000 in the aggregate, shall be due and payable on the Maturity Date in the
form of a number of shares of the Corporation's common stock equal to the number
obtained by dividing $300,000 by the closing price per share of the
Corporation's common stock on the date immediately prior to the date on which
the payment is actually made. The issuance by the Corporation to the Holder of
common stock shall be subject to the prior approval of the Corporation's
shareholders, unless the National Association of Securities Dealers grants the
Corporation an exemption from the requirement to obtain shareholder approval. In
the event that shareholder approval or an exemption from the requirement
therefor cannot be obtained, the Corporation shall pay the sum of $300,000
representing all accrued interest and the Fee in the form of cash.
SECTION 4. Application of Payments. All payments made hereunder
shall be applied first to accrued interest, then to the Fee and finally to the
unpaid Principal Amount.
SECTION 5. Optional Redemption. This Debenture may be redeemed at
the option of the Corporation, as a whole or in part, without premium or
penalty, upon mailing a notice of redemption not fewer than 15 nor more than 30
days prior to the date fixed for redemption to the Holder of the Debenture at
its last registered address on the books and records of the Corporation. Any
optional redemption of this Debenture prior to maturity shall require the prior
written consent of the Corporation's senior secured lender which is presently
First Union National Bank and may require the prior written consent of other
lenders.
SECTION 6. Senior Indebtedness. For purposes of this Debenture, the
term "Senior Indebtedness" shall mean the "Obligations" of the Corporation and
its subsidiaries which are "Borrowers", as such terms are defined in the Loan
and Security Agreement dated November 12, 1997, among the Corporation and the
other Borrowers and the First Union National Bank, as amended by Amendment No. 1
dated as of March 31, 1998, Amendment No. 2 dated as of May 12, 1998 and
Amendment No. 3 dated as of October 1, 1998, and as the same may be further
amended, restated, modified or supplemented (the "FUNB Loan Agreement"), and the
Corporation's indebtedness under any other instrument evidencing debt or
obligations under
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capital leases under the terms of which an event of default would result from a
failure to subordinate this Debenture to the Corporation's obligations
thereunder.
SECTION 7. Corporation's Covenants. The Corporation hereby agrees
that until this Debenture is paid in full, (a) it will not, without the prior
written consent of the Holder, incur any additional Senior Indebtedness; (b) it
will provide to the Holder, as soon as available, but in no event later than 60
days following the end of each calendar month, beginning with the current
calendar month, an unaudited consolidated and consolidating balance sheet of the
Corporation and its subsidiaries as of the close of such calendar month and
unaudited consolidated and consolidating statements of income, retained earnings
and cash flows for the Corporation and its subsidiaries for the calendar month
then ended and for that portion of the fiscal year then ended, all prepared in
accordance with generally accepted accounting principles applied on a consistent
basis; and (c) it will pay the reasonable expenses (including legal expenses) of
the Holder in connection with the purchase of this Debenture.
SECTION 8. Subordination. The Corporation covenants and agrees and
the Holder by its acceptance of this Debenture hereby covenants and agrees on
behalf of itself and its successors and assigns as follows:
(a) The payment of all amounts due in respect of this
Debenture is expressly subordinated, only to the extent and in the manner
hereinafter set forth, in right of payment to the payment of the principal of,
premium and interest on all Senior Indebtedness of the Corporation; provided,
however, that the Corporation shall be entitled to pay to the Holder all amounts
due on the Maturity Date (or any date following the Maturity Date) as long as
(i) the Corporation has permanently reduced the total principal of the
outstanding credit facilities under the FUNB Loan Agreement to $9,000,000
($4,000,000 in principal under the Line of Credit and $5,000,000 in principal
under the Acquisition Line of Credit) on or before the Maturity Date (or any
date following the Maturity Date if the total principal balance of the credit
facilities has not been so reduced on the Maturity Date) and (ii) the
Corporation is not otherwise in default under the FUNB Loan Agreement (except
for defaults arising from the failure of the Corporation to comply with the
financial covenants set forth in Sections 6.17, 6.18 and 6.19 of the FUNB Loan
Agreement, which shall not preclude the Corporation from paying the Holder
amounts due on the Maturity Date). In no event will the Holder, without the
prior written consent of First Union National Bank unless and until the
Corporation's obligations to First Union National Bank have been indefeasibly
paid in full and any commitment of First Union National Bank to the Corporation
has been terminated, (a) commence or participate in any action or proceeding to
enforce this Debenture; (b) borrow any sums from the Corporation; (c) enter into
any transaction with the Corporation, other than an arms-length business
transaction in the normal course of business; or (d) receive or collect
collateral or security from the Corporation for this Debenture, or realize or
attempt to realize satisfaction of this Debenture against the Corporation or its
property, by legal proceedings, set-off, self-help or otherwise. Except as
expressly allowed in this paragraph, any payments received from the Corporation
or any property realized upon by the Holder shall be held in trust for
application to the Corporation's obligations to First Union National Bank and
shall be immediately remitted by the Holder to First Union National Bank.
(b) In the event of any dissolution, winding up (other than
a merger, consolidation or share exchange), liquidation or reorganization of
the Corporation (in
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<PAGE>
bankruptcy, insolvency or receivership proceedings or upon an assignment for
the benefit of creditors or any other marshalling of the assets and liabilities
of the Corporation or otherwise) or in the event of any default in the payment
of any Senior Indebtedness as to which default the holder thereof shall have
given the Corporation notice (hereinafter "a proceeding"), then all principal
of, premium and interest on, the Senior Indebtedness shall first be paid in full
before the Holder shall be entitled to receive any payment or distribution in
respect of the principal of or interest on or the Fee in respect of this
Debenture unless and until, in the case of a payment default in respect of
Senior Indebtedness, such default is cured or waived in writing by First Union
National Bank. In any such proceeding, any payment to which the Holder would be
entitled if this Debenture were not so subordinated to the Senior Indebtedness
shall be paid by the liquidating trustee, agent or other person making such
payment to the holders of the Senior Indebtedness for application to the payment
of the Senior Indebtedness remaining unpaid until such Senior Indebtedness shall
have been paid in full, after giving effect to any concurrent payment or
distribution to the holders of the Senior Indebtedness. In any such application
to the Senior Indebtedness, the obligations payable to First Union National Bank
shall be paid in full before application to any other Senior Indebtedness. To
the extent that the holder or holders of the Senior Indebtedness shall have
received payments which, but for the provisions of this Section 8, would have
been paid to the Holder, then, upon payment in full of the Senior Indebtedness,
the Holder shall be subrogated to the rights of the holders of the Senior
Indebtedness to receive payments or distributions of cash, property or
securities of the Corporation applicable to the Senior Indebtedness until the
principal of and interest on and the Fee in respect of this Debenture shall be
paid in full. For purposes of such subrogation, no such payments or
distributions to the holders of the Senior Indebtedness, which, but for the
provisions hereof, would have been payable or distributable to the Holder of
this Debenture, shall, as between the Corporation, its creditors (other than the
holder of the Senior Indebtedness) and the Holder be deemed to be a payment by
the Corporation to or on account of this Debenture.
(c) First Union National Bank may, in reliance hereon and
without notice to the Holder, continue to make loans or advances, extend
credit or make other accommodations to or for the account of the Corporation,
whether or not the same is presently contemplated. This agreement of
subordination shall be continuing and the Holder hereby waives notice of
acceptance of this agreement with respect to all Senior Indebtedness that may
now exist or may hereafter come into existence. Notwithstanding any partial or
entire payment of all or any of the Senior Indebtedness, this agreement of
subordination shall remain in effect or be reinstated, as the case may be, as
though such payment had never been made with respect to any such payment which
is rescinded or recovered from or restored or returned by any creditor in
respect of any Senior Indebtedness under authority of any law, rule, regulation,
order of court or governmental agency, or in connection with any compromise or
settlement relating thereto or relating to any action, suit or proceeding
relating thereto, whether arising out of any proceedings under the United States
Bankruptcy Code or otherwise (each such payment a "Restored Payment"). No right
of any creditor in respect of any Senior Indebtedness to enforce the
subordination of this Debenture shall be impaired, diminished or otherwise
prejudiced by any act or failure to act of the Corporation, the Holder or any
creditor in respect of any Senior Indebtedness or by any failure of the
Corporation, the Holder or any creditor in respect of any Senior Indebtedness to
comply with any provisions of this agreement, regardless of any actual or
constructive notice or knowledge of any party of any such act or failure to act.
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(d) The provisions of this Section 8 regarding
subordination are solely for the purpose of defining the relative rights of the
holders of Senior Indebtedness on the one hand and the rights of the Holder on
the other hand, and none of such provisions shall impair, as between the
Corporation and the Holder, the obligation of the Corporation, which is
unconditional and absolute, to pay to the Holder the principal of and interest
on this Debenture in accordance with its terms, and no such provisions shall
prevent the Holder from exercising all remedies otherwise permitted by
applicable law.
(e) Nothing contained in this Section 8 shall prevent the
Corporation from making any payments in respect of this Debenture on the
Maturity Date in equity securities of the Corporation, the right to payment
of which is subordinated to the payment of all Senior Indebtedness to a greater
or equal extent as the payment due in respect of this Debenture are so
subordinated.
SECTION 9. Default Interest. Should any payment of interest
hereunder be received by the Holder more than ten days after maturity, the rate
of interest which the Corporation is obligated to pay on the principal amount
hereof shall be increased to Seventeen Percent (17%) per annum until such late
payment of interest (including interest at the increased rate) is paid in full.
Should any payment of principal hereunder not be received by the Holder at
maturity or should any Event of Default (other than under Section 11(a)(i)
hereof) occur hereunder, the rate of interest which the Corporation is obligated
to pay on the principal amount hereof shall increase to Twenty Percent (20%) per
annum until such payment of principal plus interest at the increased rate is
received or until such other Event of Default is cured, as the case may be;
provided, however, that until repayment by the Corporation of all of its
obligations to First Union National Bank and the termination of any commitment
by First Union National Bank to provide credit to the Corporation, the
Corporation shall not pay, and the Holder shall not collect payment of, default
interest at a rate in excess of seventeen percent (17%), it being the intention
that any additional default interest shall continue to accrue but shall not be
paid until the conditions of this provision have been satisfied.
SECTION 10. Dividends on Capital Stock. For so long as this
Debenture is outstanding, the Corporation shall not declare or pay any
dividends on its capital stock (including dividends payable in shares of the
capital stock of the Corporation).
SECTION 11. Events of Default; Acceleration. The occurrence of any
one or more of the following events shall constitute an Event of Default under
this Debenture:
(a) the failure of the Corporation to pay the entire
Principal Amount, all accrued interest thereon and the Fee at maturity;
(b) the failure of the Corporation to perform any covenant
contained herein within 30 days after the delivery of written notice of
default from the Holder in accordance with the notice provisions of Section 15
hereof;
(c) the filing of a petition for relief under the
Bankruptcy Code or any similar federal or state statute by or against the
Corporation which, in the case of an involuntary proceeding, is not dismissed
or stayed within 60 days;
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(d) an application for the appointment of a receiver for,
the making of a general assignment for the benefit of creditors by, or the
insolvency of, the Corporation; or
(e) the occurrence of any event of default under the
Corporation's credit agreement with First Union National Bank.
At any time after the occurrence of an Event of Default, subject to
the subordination provisions hereof, the Holder may, in the Holder's sole and
absolute discretion (i) declare the entire unpaid balance of the Principal
Amount plus accrued interest, the Fee and other sums due hereunder to be
immediately due and payable, and (ii) exercise any or all rights and remedies
available to the Holder hereunder, or under applicable law.
SECTION 12. Interest Rate After Judgment. If judgment is entered
against the Corporation on this Debenture, the amount of the judgment entered
(which may include principal, interest, default interest, late charges, fees,
expenses and costs) shall bear interest at the highest rate authorized under
this Debenture as of the date of entry of the judgment.
SECTION 13. Waiver of Protest. The Corporation, and all parties to
this Debenture, whether maker, endorser or guarantor, waive presentment, notice
of dishonor and protest.
SECTION 14. Waiver and Amendments. Each right, power and remedy of
the Holder hereunder, or under applicable law shall be cumulative and
concurrent, and the exercise of any one or more of them shall not preclude the
simultaneous or later exercise by the Holder of any or all such other rights,
powers or remedies. No failure or delay by the Holder to insist upon the strict
performance of any one or more provisions of this Debenture, or to exercise any
right, power or remedy consequent upon a breach thereof or default hereunder
shall constitute a waiver thereof, or preclude the Holder from exercising any
such right, power or remedy. By accepting full or partial payment after the due
date of any amount of principal or interest on this Debenture, the Holder shall
not be deemed to have waived the right either to require payment when due and
payable of all other amounts of principal of or interest on this Debenture, or
to exercise any rights and remedies available to it in order to collect all such
other amounts due and payable under this Debenture. No modification, change,
waiver or amendment of this Debenture shall be deemed to be made by the Holder
unless in writing signed by Holder, and each such waiver, if any, shall apply
only with respect to the specific instance involved. No modification, change or
amendment of this Debenture may be made without the prior written consent of
First Union National Bank.
SECTION 15. Notices. Any notice, request, or demand to or upon the
Corporation or the Holder shall be deemed to have been properly given or made
when delivered as follows:
If the Corporation: Precision Auto Care, Inc.
748 Miller Drive, S.E.
Leesburg, Virginia 20175
Attn: General Counsel
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<PAGE>
With a copy to: John B. Frisch, Esquire
Miles & Stockbridge P.C.
10 Light Street
Baltimore, Maryland 21202
If to the Holder: Arthur C. Kellar
106 Ebbtide Drive
North Palm Beach, Florida 33408
With a copy to: Peter C. Keefe
Vice President
Avenir Corporation
1725 K Street, N.W.
Washington, D.C. 20006
SECTION 16. Partial Invalidity. In the event any provision of this
Debenture (or any part of any provision) is held by a court of competent
jurisdiction to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
(or remaining part of the affected provision) of this Debenture; but this
Debenture shall be construed as if such invalid, illegal or unenforceable
provision (or part thereof) had not been contained in this Debenture, but only
to the extent it is invalid, illegal or unenforceable.
SECTION 17. Transferability of Debenture. This Debenture is
transferable but may only be transferred in accordance with state and federal
securities laws. The Holder understands and agrees that the Corporation shall
not be required to register the Debenture under the Securities Act or applicable
state securities or blue sky laws and the Corporation shall not be required to
recognize any transfer of this Debenture unless counsel to the Corporation is
satisfied that registration of the Debenture shall not be required under the
Securities Act or applicable state securities or blue sky laws.
SECTION 18. Governing Law. The provisions of this Debenture shall
be construed, interpreted and enforced in accordance with the laws of the
Commonwealth of Virginia as the same may be in effect from time to time.
SECTION 19. Further Assurances. The parties hereto agree to execute,
acknowledge, seal and deliver, after the date hereof, such further assurances,
instruments and documents and to take such further actions as the parties hereto
may reasonably request in order to accomplish, facilitate performance of, or
otherwise fulfill the transaction contemplated herein.
SECTION 20. Entire Agreement. This Debenture constitutes the
entire agreement and understanding between the parties hereto with respect to
the matters herein set forth.
SECTION 21. Successors and Assigns. This Debenture shall be binding
upon and inure to the benefit of the Corporation, the Holder and their
respective successors and assigns, and shall inure to the benefit of First Union
National Bank, its successors and assigns. References
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herein to First Union National Bank shall be deemed to include the successors
and assigns thereof.
SECTION 22. Cross Default. The Corporation and the Holder
acknowledge and agree that any violation of the provisions of Section 9
hereof shall represent a default and an event of default under the FUNB Loan
Agreement, and that First Union National Bank is approving this Debenture in
reliance upon the terms herein contained.
IN WITNESS WHEREOF, the Corporation has caused this Debenture to be
executed in its name by its duly authorized officer on its behalf, as of the day
and year first above written.
WITNESS: PRECISION AUTO CARE, INC.
By: (SEAL)
_______________________ _____________________________
Charles L. Dunlap
President and Chief Executive
Officer
COMMONWEALTH OF VIRGINIA, COUNTY OF LOUDOUN, TO WIT;
I HEREBY CERTIFY, that on this 25th day of January, 1999, before me,
the undersigned, a Notary Public of the Commonwealth of Virginia, personally
appeared Charles L. Dunlap, known to me (or satisfactorily proven), to be the
person whose name is subscribed to the within instrument, and acknowledged that
he executed the same for the purposes therein contained.
AS WITNESS my hand and Notarial Seal.
------------------------------
Notary Public
My Commission Expires:
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EXHIBIT 99
FOR: CONTACT:
Precision Auto Care, Inc. Charles L. Dunlap x208
748 Miller Drive, SE President & CEO
Leesburg, VA 20175 PH: (800) 438-8863
FOR IMMEDIATE RELEASE
PRECISION AUTO CARE SECURES $5 MILLION
BRIDGE LOAN TO HELP RESTRUCTURE ITS DEBT
LEESBURG, VA -- January 26, 1999, Precision Auto Care, Inc. announced
today that it has received a $5,000,000 bridge loan from a member of its Board
of Directors to help restructure its debt, according to Charles L. Dunlap,
President and CEO.
Precision Auto Care also has reached an agreement in principal with
the Company's senior lender on a modification to its loan agreement, which
provides for the restructuring of its repayment. The Bank has also agreed to the
waiver of financial covenants through the quarter ending March 31, 1999. The
proposed modification with the Bank calls for the Company to reduce its
outstanding indebtedness with the Bank by $13,500,000 by April, 25, 1999. The
Company will use $2,500,000 of the proceeds from the bridge financing as Bank
repayment, and announced that it currently has approximately $11,000,000 in
commitments from mortgage lenders and another $5,750,000 in signed purchase
agreements for the sale of non-strategic Company car washes and auto care
centers, said Dunlap.
"This bridge loan will allow the Company to achieve significant
paydown in its status with vendors and to give the Company much needed breathing
room to continue to improve our core businesses," said Dunlap.
He further explained that "the restructuring which we began in
November is having a positive impact on our operations, and we fully expect that
future quarters, starting with the current third fiscal quarter, will show much
improved performance. We are very appreciative of the financial support from our
Board, as well as the willingness of our Bank to work with us as we continue to
restructure and solidify our business."
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PRECISION AUTO CARE BRIDGE LOAN/Page Two
Precision Auto Care, Inc. (NASDAQ: PACI) is the world's largest
franchisor of auto care centers, currently with 628 operating centers worldwide
as of January 25, 1999. The Company franchises and operates Precision Tune Auto
Care, Precision Auto Wash, and Precision Lube Express centers around the world.
Please visit the Company's web site at: www.PrecisionAC.com
Cautionary Statement: The statements in this press release
constitute "forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
These statements are subject to risks and uncertainties that could cause
Precision Auto Care Inc.'s actual results, performance or achievements to differ
materially from any future results, performance or achievements expressed or
implied by such forward-looking statements. Such risks and uncertainties
include, but are not limited to, (i) the risks and uncertainties reflected and
set forth in the text of this press release, (ii) the fact that Precision Auto
Care Inc. and the companies it acquired on and subsequent to the date of its
initial public offering have only recently conducted operations as a combined
company, (iii) the seasonal nature of portions of the business, (iv) the highly
competitive markets in which Precision Auto Care Inc. operations, (v)
difficulties in integrating all of the businesses Precision Auto Care Inc. has
acquired, (vi) risks associated with Precision Auto Care Inc.'s ability to
continue its strategy of growth through acquisitions and (vii) risks associated
with Company's ability to make or effect acquisitions in the future and to
successfully integrate newly-acquired businesses into existing operations and
the risks associated with such newly-acquired businesses.
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