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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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) April 25, 1996
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BESTWAY, INC.
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(Exact name of registrant as specified in its charter)
Delaware 0-8569 81-0332743
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(State of other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification
Number)
7800 N. Stemmons, Suite 320, Dallas, Texas 75247
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (214) 630-6655
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
(a) Pursuant to the Agreement for the Purchase and Sale of Assets by
and among Bestway, Inc., a Delaware corporation (the "Company"), All Star
Rental, Inc., a privately-owned South Carolina corporation ("All Star"), and
Robert D. Simons and Keith Crosby, the sole shareholders of All Star, the
Company, on April 12, 1996, acquired substantially all of the assets of All
Star and certain liabilities in connection therewith. The assets acquired by
the Company include, amoung other things, All Star's idle inventory, rental
contracts, vehicles, store furniture and fixtures, computers and leasehold
improvements. In addition, the Company assumed the leases for 15 of All Star's
former store locations.
The Company will deliver to All Star approximately 112,000 shares
of the Company's voting common stock, $.01 par value per share, as the
aggregate purchase price in connection with the acquisition. Such amount will
be based on a multiple of All Star's average monthly revenues less certain
assumed liabilities.
(b) The equipment and other physical property acquired from All Star
in connection with its business will continue to be used by the Company for the
same purpose.
ITEM 5. OTHER EVENTS
Pursuant to the Second Amendment to First Amended and Restated Revolving
Credit Loan Agreement, by and among the Company, Comerica Bank-Texas, the
Company's senior secured lender, and certain subsidiaries of the Company, on
April 12, 1996, the Company, among other things, increased the maximum amount
of revolving credit under such loan agreement from $4,000,000 to $7,500,000 and
extended the termination date of such agreement by one year from August 18,
1996 to August 18, 1997.
ITEM 7. FINANCIAL STATEMENTS, PROFORMA
(a) Financial Statements of business acquired
It is currently impracticable to provide the required
financial statements of All Star Rental, Inc. Such
required statements will be provided as soon as
practicable.
(b) ProForma financial information
It is currently impracticable to provide the required
financial statements of All Star Rental, Inc. Such
required statements will be provided as soon as
practicable.
(c) Exhibits
2.1 Plan of acquisition
Filed herewith as "Exhibit 2.1"
28.1 Second Amendment to First Amended and Restated Revolving
Credit Loan Agreement
Filed herewith as "Exhibit 28.1"
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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 hereunto duly authorized.
BESTWAY, INC.
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(Registrant)
Date: April 25, 1996 By: /s/ Beth A Durrett
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Beth A. Durrett
Vice President/Controller
of the Registrant
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Exhibit Index
Exhibit No. Description
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2.1 Plan of acquisition
Filed herewith as "Exhibit 2.1
28.1 Second Amendment to First Amended and Restated Revolving
Credit Loan Agreement
Filed herewith as "Exhibit 28.1"
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THIS AGREEMENT IS SUBJECT TO ARBITRATION UNDER THE SOUTH CAROLINA UNIFORM
ARBITRATION ACT, SECTION 15-48-10 ET SEQ. AND THE RULES OF THE AMERICAN
ARBITRATION ASSOCIATION
AGREEMENT FOR THE PURCHASE
AND SALE OF ASSETS
THIS AGREEMENT, dated as of April 12, 1996, is by and among All Star
Rental, Inc., a South Carolina corporation ("Seller"), Robert D. Simons and
Keith Crosby (together, the "Shareholders"), and Bestway, Inc., a Delaware
corporation ("Buyer").
IT IS AGREED AS FOLLOWS:
1. Assets to be Transferred
Seller hereby sells, conveys, assigns and transfers to Buyer or its
designated affiliate all of the assets of Seller other than those specifically
excluded on Schedule 1.0(a) attached hereto (the "Assets"), free and clear of
all liens and encumbrances except with respect to the Assumed Liabilities (as
defined herein) under Section 2 (such sale and transfer to be evidenced by the
documents of sale, transfer and conveyance listed on Schedule 1.0(b) attached
hereto, all such documents to be satisfactory to Buyer in form and substance).
Such Assets include, but are not limited to, the following:
1.1 The Assets located or related to the list of locations listed
on Schedule 1.1 attached hereto.
1.2 It is Buyer's intent to rename all the locations identified
in Schedule 1.1 to Bestway Rental, Inc. Buyer may use the tradename "All Star
Rental" for a reasonable length of time in order for it to change the names of
such locations to "Bestway Rental."
1.3 All equipment of Seller as listed on Schedule 1.3;
1.4 Automobiles, trucks and other vehicles owned by Seller as
listed on Schedule 1.4 attached hereto;
1.5 All inventory of Seller which is owned but not leased ("Idle
Inventory") as shall exist on the Closing Date, as listed on Schedule 1.5;
1.6 All inventory in the hands of customers, and the rental
contracts related thereto (the "Rental Contracts") as listed on Schedule 1.6;
1.7 Certain contracts, leases and other agreements to which
Seller is a party listed on Schedule 1.7 attached hereto. It is understood that
Buyer can not and does not
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guarantee the amount of rent or the continued occupancy of the locations listed
on Schedule 1.7 not covered by a written lease as indicated by "no lease".
1.8 All books, records and files, and all transferable right,
title and interest in and to software and computer programs and other data
processing, storage and retrieval systems relating to Seller's business,
including, without limitation, all customer and supplier lists, credit
information (excluding credit information on Seller) and all employee payroll
and personnel records and other similar assets necessary to run the business of
Seller; and
1.9 All accounts receivable other than those shown on Schedule
1.0(a), on the books on the date of transfer, relating to Seller's business,
together with any accrued interest, and any other accrued or future right
relating to Seller's business to receive money.
2. Assumed Liabilities and Excluded Liabilities
Subject to the proration provisions of Section 3 hereof, Buyer or its
designated affiliate agrees to assume the following liabilities (the "Assumed
Liabilities"), effective as of the Closing Date, and indemnify and hold Seller
harmless on the same:
2.1 Those liabilities listed in Schedule 2 hereof (including the
assumption of any leasehold payments, accounts payable and all outstanding
loans with McDonnell Douglas Finance Corporation and Branch Bank and Trust
Company); and
2.2 All obligations under the Rental Contracts listed on Schedule
1.6 hereof.
Except for the specific debts, obligations and liabilities of Seller set
forth in this Section 2, Buyer shall not assume and shall in no event be liable
for any debts, obligations or liabilities of Seller, whether accrued, absolute,
matured, known or unknown, liquidated or unliquidated, contingent or otherwise.
3. Prorations
Property taxes, yellow page advertising, rental payments on leased
properties, utilities and all other revenues and expenses shall be prorated as
of the Closing Date, based upon the number of days during the month or year, as
the case may be, that Seller has operated the businesses. The Purchase Price
shall be adjusted accordingly to reflect any net balance owing, to Buyer or
Seller. With respect to any such expense that has not been determined as of the
Closing Date (as defined herein), good faith estimates shall be arrived at and
adjustments made based upon such estimates. Such estimates shall be re-adjusted
when actual figures are available and appropriate credits, if any, given and
payments made promptly thereafter.
4. Purchase Price, Terms and Allocation
4.1 Purchase Price. Buyer shall deliver to Seller as soon as
practicable after Closing (as defined herein), as and for the purchase price
(the "Purchase Price") of the Assets. shares of voting common stock, $0.01 par
value per share ("Common Stock"), of Buyer (the "Shares"), in such amount as is
based on (i) eight times the Seller's average monthly revenues
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for January, February and March 1996, as reflected on the unaudited balance
sheet of Seller prepared in accordance with generally accepted accounting
principles and delivered to Buyer prior to Closing, less (ii) the Assumed
Liabilities, divided by (iii) eight.
4.2 Brokerage Commission. Seller has not employed any broker,
agent or finder in connection with any transaction contemplated by this
Agreement and hereby indemnifies Buyer against any liability for a brokerage
commission or finders fee of any description incurred by Seller with respect to
any transaction contemplated by this Agreement.
4.3 Utility Deposits. Buyer shall pay Seller $3,787.00 for the
transfer of all utilities deposits.
4.4 Personal Property Taxes. Buyer shall pay Seller the sum of
$25,902.00 for its pro rata share of personal property taxes through the end of
1996. Seller shall pay $10,098.00 for its pro rata share. This is based on an
estimated per diem of $99.00. If the actual amount of the taxes differ, the
amount will be adjusted, and Seller and the Shareholders shall refund or Buyer
shall pay an additional amount on or before January 1, 1997.
5. Representations and Warranties by Seller and Shareholders.
Seller and Shareholders, jointly and severally, represent and warrant the
following:
5.1 Organization and Good Standing. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
South Carolina, and has full corporate power to carry on its business as now
conducted by it and to own and operate its assets as now owned and operated by
it. Seller is qualified to do business and is in good standing in each
jurisdiction where such qualification is necessary. Seller is conducting and
has in the past conducted its business in accordance with all applicable
federal, state and local laws, the violation of which would materially affect
the property or business of Seller, and has no notice of any claimed violation
of any such laws except as notified in correspondence attached hereto as
Schedule 5.1.
5.2 Title to Assets. Seller has good, indefeasible and marketable
title to the Assets, which are free and clear of all liens and encumbrances
except as reflected in Schedule 5.2 and in connection with the Assumed
Liabilities. The Assets are in good operating condition and repair, consistent
with acceptable industry norms. All liens and encumbrances (other than those in
connection with the Assumed Liabilities) shall be paid off and released by
Seller as soon as practicable after Closing.
5.3 Contracts. Attached hereto as Schedule 5.3 is a Schedule of
Contracts listing the following contracts, understandings, commitments and
agreements to which Seller is a party or is bound:
(a) All oral or written contracts, other than Rental Contracts,
which are listed on Schedule 1.6, understandings or commitments, whether in the
ordinary course of business or not, involving a present or future obligation to
deliver goods or services of an amount of value in excess of $5,000 each;
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(b) All bonus, incentive compensation, profit sharing, pension,
vacation, group insurance or employee welfare plans of any nature whatsoever;
(c) All collective bargaining agreements or other contracts or
commitments to or with any labor union, employee representative or group of
employees;
(d) All employment contracts, and all other contracts, agreements
or commitments (whether written or oral) to or with individual employees,
agents or representatives, for a period in excess of 30 days, or for a
remuneration which exceeds or will exceed in accordance with present
commitments, $20,000 per annum, identifying the individual and his or her
position; and
(e) Any oral or written contract, understanding or commitment
which requires the consent of any party thereto to the consummation of the
transaction contemplated by the Agreement.
To the best knowledge of Seller and the Shareholders, there has not been
any default in any obligation to be performed by Seller under any contract,
commitment or agreement listed in Schedule 5.3 which default could materially
affect the business or property of Seller or the Assets, and Seller has not
waived any right under any such contract, commitment or agreement so as to
adversely affect the business, Assets or property of Seller. Copies of all such
written contracts and written summaries of all such oral contracts have been
furnished or made available to Buyer prior to the Closing Date.
5.4 Franchises, Trademarks, Licenses, etc. Section 1.1 lists all
tradenames, any interest in which is owned by or registered in the name of
Seller. Seller owns no trademark registration, trademark licenses, patents,
patent applications therefor, licenses, authorizations and or other assets of
like kind.
5.5 Litigation. There is no actual or threatened litigation
(except as shown on Schedule 5.1), proceeding or governmental investigation in
progress, nor is there basis for any affecting the Assets. There is no
outstanding order, judgment or award by any court, arbitrator or governmental
body against or affecting the Assets.
5.6 Inventory. Within acceptable industry norms, the inventory of
Seller on the Closing Date consists of items substantially all of which were
and will be of the usual quality and quantity necessary for the normal conduct
of the business and reasonably expected to be useable or rentable within a
reasonable period of time in the ordinary course of business, except items of
inventory which have been written down to realizable market value or written
off completely, and damaged, broken or spoiled items in an amount which does
not materially affect the value of the inventory as reflected on said
statements. With respect to inventory in the hands of customers for which
Seller is committed as of the Closing Date, such inventory is described in
Schedule 1.6 and is reasonably expected to be usable in the ordinary course of
business as presently being conducted.
5.7 Rental Contracts. Schedule 1.6 attached hereto contains a
complete and accurate list of all Rental Contracts to which Seller is a lessor
as of the Closing Date, the name
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and address of each lessee, the expiration date of each Rental Contract, the
monthly rent and any additional rent payable under such Rental Contract. All of
the Rental Contracts are free of liens and encumbrances (except with respect to
the Assumed Liabilities), are in compliance with applicable laws, and each
customer is in compliance with the terms and conditions thereunder, within the
acceptable industry norms.
5.8 Real Property Leases. Schedule 1.7 includes a complete and
accurate list of all real property leases to which the Seller is a party which
are to be assigned to Buyer including the address of each property, together
with a summary description of the buildings and improvements thereon, the name
and address of each lessor where Seller is a tenant and each tenant where
Seller is a lessor and the expiration date of each lease. Copies of such leases
and any amendments have been furnished to Buyer prior to the Closing Date.
Seller is not in default under any of such leases. Except with respect to
those locations having "no lease" referenced on Schedule 1.7, Seller is the
owner of or is the tenant in good standing under a valid lease with respect to
all property used by Seller in the operation of its business which is to be
transferred or assigned to Buyer.
5.9 Employees. Schedule 5.9 contains a list of all employees of
Seller, together with their job titles, fringe benefits and date of employment.
Seller has previously provided to Buyer compensation information on its
employees.
5.10 Environmental Matters.
(a) To the best knowledge of Seller and the Shareholders, there
has been no storage, generation, manufacture, refinement, transportation,
production, treatment or disposal of solid wastes, toxic wastes or hazardous
wastes or substances by Seller (or, to the best knowledge of Seller and the
Shareholders, any of Seller's predecessors in interest) at the leased
properties described on Schedule 1.7 attached hereto in violation of any
applicable law or permit or which would require significant remedial action
under any such applicable law or permit. To the best knowledge of Seller and
the Shareholders, there has been no spill, discharge, leak, emission,
injection, escape, dumping or any other release by Seller of any kind onto the
leased properties described on Schedule 1.7 attached hereto or from such real
properties into the environment surrounding such real properties of any solid
wastes, toxic wastes or hazardous wastes or substances as such terms are
defined under any such applicable law.
(b) To the best knowledge of Seller and the Shareholders, Seller
has not sent, arranged for disposal or treatment, arranged with a transporter
for transport for disposal or treatment, transported or accepted for transport
any hazardous substance or petroleum, including crude oil or any fraction
thereof, to a facility, site or location, which, pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, or
any similar state or local law, (a) has been placed or is proposed to be
placed, on the National Priorities List or its state equivalent or (b) which is
subject to a claim, administrative order or other request to take clean up
action, removal or remedial action by any person or entity (including any
governmental entity) or which is subject to a claim for damages by any person
or entity (including any governmental entity).
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5.11 Taxes.
(a) Seller has (i) timely filed all returns required to be filed
by it with respect to all taxes, (ii) paid all taxes shown to have become due
pursuant to such returns and (iii) paid all other taxes for which a notice of
assessment or demand for payment has been received.
(b) All tax returns filed by or on behalf of Seller have been
prepared in accordance with all applicable laws and requirements and accurately
reflect the taxable income (or other measure of tax) of the corporation filing
the return.
(c) There are no tax liens upon any of the Assets, except liens
with respect to personal property taxes not yet delinquent, and Seller is not
aware of any audit or other proceeding or investigation, or of any position
taken on a tax return of Seller which could give rise to a tax lien upon any
Assets.
5.12 Employment Benefit Plans - ERISA
(a) Seller does not currently maintain or contribute to and has
not maintained or contributed to (i) any incentive, bonus, commission or
deferred compensation or severance or termination pay plan, agreement or
arrangement, whether formal or informal and whether legally binding or not;
(ii) any pension, profit sharing, stock purchase, stock option, disability,
retirement or any other employee benefit plan, agreement or arrangement,
whether formal or informal and whether legally binding or not, other than as
listed on Schedule 5.12(a)(ii); (iii) any fringe benefit plan, agreement or
arrangement, whether formal or informal and whether legally binding or not or
(iv) any other "employee pension benefit plan" as such term is defined in
Section 3(2) of the ERISA (collectively, the "Plans"). With respect to those
Plans listed on Schedule 5.12(a)(ii), Seller agrees to immediately disburse all
funds under the Plans upon Closing and, shall not grant or issue any additional
benefits under such Plans. Seller agrees to terminate and disburse such Plans
as soon as practicable after the Closing Date.
(b) Seller has not engaged in a transaction in connection with
which it could be subject either to a civil penalty assessed pursuant to
Section 502(i) of ERISA or a tax imposed by Section 4975 of the Internal
Revenue Code of 1986, as amended (the "Code").
(c) Seller has not maintained or contributed to or been required
to contribute to a "multi-employer plan," as such term is defined in Section
4001(a)(3) of ERISA.
5.13 Certain Information. The information relating to Seller's
revenue and bank deposits for the January 1 through April 11, 1996 is accurate
and complete in all material respects.
5.14 Restrictions on Transfer of Shares.
(a) Seller understands and agrees that the Shares have not been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
and that accordingly they will not be fully transferable except as permitted
under various exemptions contained in the Securities Act, or upon satisfaction
of the registration and prospectus delivery requirements of
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the Securities Act. Seller acknowledges that it must bear the economic risk of
its investment in the Shares for an indefinite period of time since they have
not been registered under the Securities Act and therefore cannot be sold
unless they are subsequently registered or an exemption from registration is
available.
(b) Seller hereby represents and warrants to Buyer that it is
acquiring the Shares for investment purposes only, for its own account, and not
as nominee or agent for any other person, and not with a view to, or for resale
in connection with, any distribution thereof within the meaning of the
Securities Act. Seller represents and warrants that it has such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of its investment.
(c) Seller hereby agrees with the Buyer as follows:
(i) The certificates evidencing the Shares, and each
certificate issued in transfer thereof, will bear the following legend:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY
NOT BE SOLD OR TRANSFERRED UNLESS THERE IS AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES OR
BESTWAY, INC. RECEIVES AN OPINION OF COUNSEL (WHICH MAY BE COUNSEL
FOR BESTWAY, INC.) STATING THAT SUCH SALE OR TRANSFER IS EXEMPT
FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH
ACT."
(ii) The certificates representing such Shares, and each
certificate issued in transfer thereof, will also bear any legend
required under any applicable state corporate and state securities law.
(iii) Absent an effective notification under Regulation A or
registration statement under the Securities Act covering the disposition
of the Shares, Seller will not sell, transfer, assign, pledge,
hypothecate or otherwise dispose of any or all of the Shares without
first providing Buyer with an opinion of counsel (which may be counsel
for the Buyer) to the effect that such sale, transfer, assignment,
pledge, hypothecation or other disposition will be exempt from the
registration and the prospectus delivery requirements of the Securities
Act and the registration or qualification requirements of any applicable
state securities laws.
(iv) Seller consents to Buyer's making a notation on its
records or giving instructions to any transfer agent of the Shares in
order to implement the restrictions on transfer of the Shares mentioned
in this Section 5.14.
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(d) Any legend endorsed on a certificate pursuant to Section
5.14(c)(i) hereof and the stop transfer instructions and record notations with
respect thereto shall be removed, and Buyer shall issue a certificate without
such legend to the holder thereof at such time as the securities evidenced
thereby cease to be "restricted securities" under the Securities Act and rules
and regulations promulgated thereunder.
5.15 Full Disclosure. No representation or warranty of Seller or
the Shareholders made in this Agreement, nor any written statement furnished to
Buyer pursuant hereto, or in connection with the transactions contemplated
hereby, heretofore furnished to Buyer by Seller or the Shareholders, contains
or will contain any untrue statement of a material fact which affects the
Assets of Seller, or Seller's title to the Assets or omits or will omit to
state a material fact necessary to make the statements or facts contained
herein or therein not misleading. Seller or the Shareholders have not withheld
and will not withhold from Buyer knowledge of any material events, conditions
or facts which may affect the Assets or Seller's title to the Assets.
6. Representations, Warranties and Covenants by Buyer
Buyer represents and warrants the following:
6.1 Organization and Good Standing. Buyer is duly organized and
existing and in good standing under the laws of the State of Delaware.
6.2 Authority. The execution of this Agreement by Buyer, its
delivery to Seller and the performance of its terms have been fully authorized
by the Board of Directors of Buyer, and no further corporate action will be
necessary on its part to make this Agreement valid and binding upon Buyer in
accordance with its terms. Neither the execution nor delivery of this Agreement
nor its performance will result in a violation or breach of any term or
provision of, nor constitute a default under its Certificate of Incorporation
or Bylaws.
6.3 Capitalization. As of the date hereof, there are 20 million
authorized shares of Common Stock, 1,500,070 shares of which are outstanding,
and one million authorized shares of preferred stock, $10.00 par value per
share, none of which is outstanding. The issued and outstanding shares of
capital stock of Buyer have been validly issued, are fully paid and
nonassessable and were issued in compliance with applicable federal and state
laws regulating the offer and sale of securities.
6.4 Full Disclosure. No representation or warranty of Buyer made
in this Agreement, nor any written statement furnished to Seller pursuant
hereto, or in connection with the transactions contemplated hereby, heretofore
furnished to Seller by Buyer, contains or will contain any untrue statement of
a material fact which affects the business or financial condition of Buyer, or
omits or will omit to state a material fact necessary to make the statements or
facts contained herein or therein not misleading.
6.5 Tradenames. Buyer covenants to have the names of all
locations listed on Schedule 1.1 changed to "Bestway Rental, Inc." or such
other names it deems appropriate (other than tradenames used by Seller) and
covenants not to do anything to damage the reputation of
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Seller's tradenames. Buyer further covenants and agrees to indemnify and hold
Seller harmless for any suits and/or damages caused to Seller due to Buyer's
limited use of Seller's tradenames.
7. Agreements by Seller.
7.1 Supplying of Information. Seller shall furnish to Buyer or
its representatives complete and accurate information as Buyer may reasonable
request in cooperation with any investigation or examination of the books and
records, accounts, contracts, properties, assets, operations and facilities of
Seller. In connection therewith, Seller shall make available to Buyer and its
agents all working papers and financial records relating to Seller for the
period ended April 11, 1996. The Schedules described in Section 1 and 5 have
been delivered prior to the Closing Date. Seller shall supply to Buyer full and
adequate information and data as reasonably requested by Buyer in order to be
assured that Seller has the right and power to transfer the assets to Buyer,
free and clear of any liens, claims, encumbrances or judgments. Any Schedule
which is not attached hereto at the time that Buyer executes this Agreement
shall not be subsequently attached hereto or incorporated herein unless such
Schedule is acceptable to Buyer.
7.2 Notices and Approvals. Seller agrees to give all notices to
third parties and obtain all consents, approvals, permits and authorizations
which may be necessary in connection with this Agreement and the consummation
of the transactions contemplated herein, including the written consent of all
franchisers and lenders, and releases of all liens and encumbrances attached to
the Assets (except in connection with the Assumed Liabilities) on the Closing
Date.
7.3 Employees. Seller will do nothing to dissuade any of its
employees from remaining in the employ of Buyer after the Closing, and Seller
will not terminate, lay off or transfer any such employees without the written
consent of Buyer, prior to the Closing.
7.4 Further Assurances. Seller will, at the request of Buyer,
duly execute and deliver to Buyer a bill of sale in substantially the form of
Exhibit A hereto and all such further instruments, assignments, assurances and
documents as Buyer may reasonable request in connection with the carrying out
of this Agreement.
7.5 Approval of Sale. Seller will do all things necessary and
proper to obtain the approval and authorization of this Agreement and the
carrying out of the provisions hereof.
7.6 Cooperation On Audit. Seller agrees to assist Buyer in the
audit of the Assets by Buyer's public accounting firm, and Buyer agrees not to
disclose information relating to assets, books and accounts of Seller not
purchased by Buyer.
8. Conditions Precedent to the Obligation of Buyer to Close.
The obligation of Buyer to close shall be subject to the following
conditions precedent:
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8.1 Fulfillment by Seller and Shareholders of their respective
covenants, obligations and agreements as set forth in this Agreement
8.2 The representations of Seller and Shareholders contained in
this Agreement shall be accurate in all material respects on the Closing Date.
Seller shall deliver to Buyer a certificate dated the Closing Date and executed
by such officers of Seller that Buyer shall reasonably require stating that
said representations are accurate in all material respects as of the Closing
Date and that all covenants, agreements and conditions required by this
Agreement to be performed by Seller prior to Closing have been performed on or
prior to the Closing Date.
8.3 Buyer shall have received a certified copy of the resolution
of the Board of Directors of Seller, certified by its Secretary or an Assistant
Secretary, authorizing the execution of this Agreement and the consummation of
the transactions contemplated hereby.
8.4 No material adverse change with respect to the business or
financial condition, or the prospects of Seller shall have occurred.
8.5 Buyer shall have satisfied itself with respect to its due
diligence review of Seller's business.
9. Conditions Precedent to the Obligation of Seller and Shareholders
to Close.
The obligations of Seller and the Shareholders to close shall be
subject to the following conditions precedent:
9.1 Fulfillment by Buyer of its covenants, obligations and
agreements as set forth in this Agreement.
9.2 The representations and warranties of Buyer contained in this
Agreement shall be accurate in all material respects on the Closing Date. The
Buyer shall deliver to Seller a certificate dated the Closing Date executed by
its President or Vice President and its Secretary or an Assistant Secretary or
its Treasurer stating that said representations and warranties are accurate in
all material respects as of the Closing Date and that all conditions precedent
to Closing to be performed by Buyer shall have been performed.
9.3 Seller shall have received a certified copy of the
resolutions of the Board of Directors of Buyer, certified by its Secretary or
an Assistant Secretary, authorizing the execution of this Agreement and the
consummation of the transactions contemplated hereby.
10. Employee Benefits.
10.1 With respect to any employee of Seller identified on Schedule
5.9 hereof, who, for any reason, has been terminated by Seller, Seller shall
pay such employee a severance payment in an amount and on terms equal to the
severance payment he or she would have been entitled to under Seller's normal
policy.
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10.2 Subsequent to Closing, Buyer shall maintain in full force and
effect Seller's employee health insurance, and Seller shall deliver to Buyer at
the Closing appropriate certificates from the carrier of such insured benefit
plans acknowledging and consenting to such continuation of benefits. Buyer
shall provide automobile, workers compensation and contents insurance, to
become effective on the Closing Date, and shall provide certification of such
from the carrier to Seller.
11. Limitation of Liability. Buyer has waived the requirements of the
bulk transfer provisions of the Uniform Commercial Code. Except for the
obligations expressly assumed by Buyer hereunder, there shall be no liability
or obligation of Buyer to Seller, to Seller's creditors or to others, growing
out of or arising from the sale by Seller of the Assets to Buyer under the
provisions of this Agreement, nor for any federal, state or local tax
liabilities of Seller including any sales tax or title transfer fee
attributable to the sale of Assets included herein. Other than in connection
with the Assumed Liabilities, Seller agrees to protect Buyer against and hold
Buyer harmless from any and all such liabilities and obligations, including all
claims made by creditors of Seller.
12. Closing Date.
The consummation of the transactions contemplated by this Agreement
(the "Closing") shall take place at the offices of Buyer, 7800 Stemmons
Freeway, Suite 320, Dallas, Texas at 9:00 o'clock a.m. on April 11, 1996, such
time and date being herein called the "Closing Date".
13. Survival of Representations, Warranties, Covenants and Agreements.
13.1 The representations, warranties, covenants and agreements
made herein are true and binding as of the Closing Date and shall continue in
full force and effect, on and after the Closing Date for a period of three
years, notwithstanding any investigations which may have been made by any of
the parties prior thereto.
13.2 Except as provided in Section 13 hereof, upon receipt of
notice thereof, Seller and the Shareholders shall jointly and severally
indemnify and hold harmless Buyer from any liability, damage, deficiency, loss,
cost or expense, including attorney fees and any costs of investigation
(hereinafter referred to as "costs"), arising from or attributable to any
breach of any representation, warranty, covenant or agreement made by Seller
and/or the Shareholders herein or in any certificate delivered at the Closing
with respect thereto, but not taking into effect any reductions or diminutions
of any other liabilities or expenses as a result thereof, even though any such
representation, warranty, covenant or agreement may have been made by Seller
and/or each of the Shareholders in good faith and to the best of its or his
knowledge.
13.3 If any claim of liability is made by a third person against
Buyer based on any liability, the existence of which would constitute a breach
of any of the representations, warranties, covenants or agreements herein,
Buyer shall with reasonable promptness give to Seller and the Shareholders
written notice of the claim and request Seller and the Shareholders to defend
the same. Seller and the Shareholders shall have the right to defend against
such liability at Seller's and the Shareholders' expense, and shall give
written notice to Buyer of the
11
<PAGE> 12
commencement of such defense with reasonable promptness after the giving of the
written notice of the claim by Buyer. Failure to receive notice from Buyer
shall relieve Seller and the Shareholders of any liability which they might
otherwise have to Buyer under Section 13.2 hereof. Buyer, its subsidiaries,
successors and assigns shall be entitled to participate with Seller and the
Shareholders in such defense, but shall not be entitled in any way to release,
waive, settle, modify or pay such claim without the consent of Seller and the
Shareholders if they have assumed such defense. In the event Seller and the
Shareholders have assumed said defense and have employed counsel with respect
thereto, Buyer shall also be entitled to employ counsel at Seller's and the
Shareholders' expense unless the counsel selected by Seller and the
Shareholders is approved by Buyer (which approval shall not be unreasonably
withheld) and represents Seller and the Shareholders and Buyer. In the event
Seller and the Shareholders do not accept the defense of the matter as provided
above, Buyer, its subsidiaries, successors and assigns shall have the full
right to defend against such liability, and shall be entitled to settle or
agree to pay in full such claimed liability in their sole discretion and
thereafter pursue their rights under this Agreement. In the event Seller and
the Shareholders shall assume the defense, Seller, the Shareholders and Buyer,
their subsidiaries, successors and assigns shall cooperate in the defense of
such action, and the records of each shall be available to the other with
respect to such defense.
13.4 Except as provided in Section 13 hereof, upon receipt of
notice thereof, Buyer shall indemnify and hold harmless Seller and the
Shareholders from any costs, arising from or attributable to (i) any breach of
any representation, warranty, covenant or agreement made by Buyer herein or in
any certificate delivered at the Closing with respect thereto, but not taking
into effect any reductions or diminutions of any other liabilities or expenses
as a result thereof, even though any such representation, warranty, covenant or
agreement may have been made by Buyer in good faith and to the best of its
knowledge, or (ii) any liability arising from the operation of the businesses
on or after the Closing Date.
13.5 If any claim of liability is made by a third person against
Seller and/or the Shareholders based on any liability, the existence of which
would constitute a breach of any of the representations, warranties, covenants
or agreements herein, Seller and the Shareholders shall with reasonable
promptness give to Buyer written notice of the claim and request Buyer to
defend the same. Buyer shall have the right to defend against such liability at
Buyer's expense, and shall give written notice to Seller and the Shareholders
of the commencement of such defense with reasonable promptness after the giving
of the written notice of the claim by Seller and the Shareholders. Failure to
receive notice from Seller and the Shareholders shall relieve Buyer of any
liability which it might otherwise have to Seller and the Shareholders under
Section 13.4 hereof. Seller and the Shareholders, their successors and assigns
shall be entitled to participate with Buyer in such defense, but shall not be
entitled in any way to release, waive, settle, modify or pay such claim without
the consent of Buyer if it has assumed such defense. In the event Buyer has
assumed said defense and has employed counsel with respect thereto. Seller and
the Shareholders shall also be entitled to employ counsel at Buyer's expense
unless the counsel selected by Buyer is approved by Seller and the Shareholders
(which approval shall not be unreasonably withheld) and represents Buyer,
Seller and the Shareholders. In the event Buyer does not accept the defense of
the matter as provided above, Seller and the Shareholders, their successors or
assigns shall have the full right to defend against such liability, and shall
be entitled to settle or agree to pay in full such claimed liability in their
sole discretion and
12
<PAGE> 13
thereafter pursue their rights under this Agreement. In the event Buyer shall
assume the defense, Buyer, Seller and the Shareholders, their subsidiaries,
successors and assigns shall cooperate in the defense of such action, and the
records of each shall be available to the other with respect to such defense.
13.6 If Seller and/or the Shareholders do not agree with the
validity of any notice delivered pursuant to Section 13.2 or 13.3, Seller
and/or the Shareholders shall send to Buyer a letter of protest signed by the
president of Seller or the Shareholders, setting forth in writing the
particular disputed item or items and the reasons that Seller and/or the
Shareholders disagree therewith. Failure on the part of Seller and/or the
Shareholders to furnish to Buyer such a letter of protest within 60 days after
having been furnished such a notice shall forever preclude Seller and the
Shareholders from contesting any item therein or any item not specifically
mentioned in the letter of protest. If Seller or the Shareholders dispute any
item or items or the amount or amounts claimed in any such notice, Buyer,
Seller and the Shareholders shall meet at the offices of Buyer, or such other
place as may be mutually agreeable to them, not later than 45 days after the
date of the receipt by Buyer of the written letter of protest to discuss the
item or items or the amount or amounts in dispute. All parties shall negotiate
in good faith with respect to resolving and settling any such disputed item or
items or the amount or amounts thereof. If they are able to negotiate a
settlement of all disputed items and the amount or amounts thereof, any amounts
owing one to the other shall be promptly remitted. Should the parties be unable
to agree as to any particular item or items or amount of aunts, then the
parties shall select a mutually agreeable arbitrator to settle such disputed
item your claims and the amounts thereof and the decision of the arbitrator
shall be binding on the parties. In the event that an arbitrator cannot be
mutually agreed upon, such arbitrator shall be selected in accordance with the
rules then obtaining of the American Arbitration Association. The opinion of
the arbitrator shall be made in writing and mailed to Buyer, Seller and the
Shareholders. The arbitrator so selected shall proceed in accordance with the
rules of the American Arbitration Association and the costs of such
arbitration, including the fees of the arbitrator, shall be paid in accordance
with the decision of the arbitrator, provided that the arbitrator shall assess
all costs against any party if such arbitrator finds such party did not act in
good faith.
13.7 If Buyer does not agree with the validity of any notice
delivered pursuant to Section 13.4 or 13.5, Buyer shall send to Seller and the
Shareholders a letter of protest signed by the president of Buyer, setting
forth in writing the particular disputed item or items and the reasons that
Buyer disagrees therewith. Failure on the part of Buyer to furnish to Seller
and the Shareholders such a letter of protest within 60 days after having been
furnished such a notice shall forever preclude Buyer from contesting any item
therein or any item not specifically mentioned in the letter of protest. If
Buyer disputes any item or items or the amount or amounts claimed in any such
notice, Seller, the Shareholders and Buyer shall meet at the offices of Seller,
or such other place as may be mutually agreeable to them, not later than 45
days after the date of the receipt by Seller and the Shareholders of the
written letter of protest to discuss the item or items or the amount or amounts
in dispute. All parties shall negotiate in good faith with respect to resolving
and settling any such disputed item or items or the amount or amounts thereof.
If they are able to negotiate a settlement of all disputed items and the amount
or amounts thereof, any amounts owing one to the other shall be promptly
remitted. Should Seller, the Shareholders and Buyer be unable to agree as to
any particular item or items or amount of amounts, then Seller, the
Shareholders and Buyer shall select a mutually agreeable arbitrator to
13
<PAGE> 14
settle such disputed item or claims and the amounts thereof and the decision of
the arbitrator shall be binding on such parties. In the event that an
arbitrator cannot be mutually agreed upon, such arbitrator shall be selected in
accordance with the rules then obtaining of the American Arbitration
Association. The opinion of the arbitrator shall be made in writing and mailed
to all of the parties. The arbitrator so selected shall proceed in accordance
with the rules of the American Arbitration Association and the costs of such
arbitration, including the fees of the arbitrator, shall be paid in accordance
with the decision of the arbitrator, provided that the arbitrator shall assess
all costs against any party if such arbitrator finds such party did not act in
good faith.
14. Expenses. Each party hereto shall bear its own expenses incurred
pursuant to this Agreement.
15. Entire Agreement. This Agreement, together with the Schedules
referred to herein which are incorporated herein by this reference, and the
agreements referred to herein, shall constitute the entire agreement between
the parties hereto with respect to the transactions contemplated hereby.
16. Construction. The parties hereto agree that this Agreement shall be
construed in accordance with the laws of the State of South Carolina.
17. Number and Gender of Words. When the context so requires in this
Agreement, words of gender shall include either or both of the other genders,
and the singular number shall include the plural.
18. Assignment. This Agreement shall be binding upon the parties
hereto, their successors and assigns, and shall not be assignable without the
express written consent of all parties hereto.
19. Amendments. This Agreement may be amended only by a written
agreement executed by all of the parties hereto.
20. Notices. All notices, requests, consents and other communications
hereunder shall be in writing and shall be delivered in person or by registered
or certified mail, return receipt requested, postage and fees prepaid, first
class mail:
To: Seller:
All Star Rental, Inc.
Attention: Robert D. Simons
P.O. Box 40219
North Charleston, SC 29423
To: Buyer:
Bestway, Inc.
Attention: Teresa A. Sheffield
14
<PAGE> 15
7800 N. Stemmons Freeway
Suite 320
Dallas, TX 75247
To: Shareholders:
Robert D. Simons
3025 Ashley Phosphate
Suite C2
North Charleston, SC 29418
Keith Crosby
3025 Ashley Phosphate
Suite C2
North Charleston, SC 29418
Any party hereto may change the address designated for mailing by written
notice to the other party by registered or certified mail. It will be deemed
delivered upon receipt.
21. Authority. Each party executing this Agreement warrants his
authority to execute this Agreement.
22. Counterparts. This Agreement may be executed in several
counterparts, and it shall not be necessary for each party to execute each of
such counterparts. The counterparts, when taken together, shall be deemed to
constitute one and the same instrument, enforceable against each party in
accordance with its terms.
23. Structure of Transaction. For federal income tax purposes, it is
intended that the purchase of the Assets by Buyer shall qualify as a
reorganization within the meaning of Section 368(a)(1)(C) of the Code. Neither
Buyer nor Seller is an investment company as defined in Section
368(a)(2)(F)(iii) and (iv) of the Code.
As a result of this reorganization, Seller will transfer to Buyer at
least 90% of the fair market value of the net assets and at least 70% of the
fair market value of the gross assets of the Seller held by it immediately
prior to the reorganization. For this purpose, amounts used to pay
reorganization expenses and all redemptions and distributions made by Seller
immediately prior to the reorganization will be considered as assets held by
the Seller immediately prior to the reorganization. On the date of the
reorganization, the fair market value of the assets of the Seller will exceed
the sum of its liabilities (including any liabilities to which its assets are
subject). Moreover, the Assumed Liabilities and the liabilities to which the
transferred Assets of Seller are subject were incurred by Seller in the
ordinary course of its business.
The reorganization and the assumption by Buyer of the Assumed Liabilities
pursuant to this reorganization are for a bona fide business purpose and the
principal purpose of such reorganization and assumption is not the avoidance of
federal income tax on the transfer of the Assets of the Seller to the Buyer.
Immediately after the reorganization, Buyer intends to
15
<PAGE> 16
continue the historic business of the Seller or use a significant portion of
the historic Assets of the Seller in a business.
Buyer, Seller and the Shareholders will pay their respective expenses
incurred in connection with the reorganization. Additionally, there is no
intercorporate indebtedness or other credit or financial arrangement existing
between Buyer and Seller.
The Shareholders have no plan or intent to sell, exchange or otherwise
dispose of a number of Shares received in the reorganization that would reduce
the ownership by the Shareholders of Buyer's capital stock to a number of
Buyer's Shares having a value, as of the date of the reorganization, of less
than 50% of the value of all of the formerly outstanding stock of Seller as of
the same date. For this purpose, shares of Seller stock exchanged for cash or
other property or exchanged for cash in lieu of fractional shares of Buyer's
stock will be treated as outstanding Seller stock on the date of the
reorganization. Moreover, shares of Seller stock and shares of Buyer stock held
by the Shareholders of Seller and otherwise sold, redeemed or disposed of prior
or subsequent to the transaction will be considered for this purpose.
The fair market value of the Shares received by the Shareholders will be
approximately equal to the fair market value of the Seller stock surrendered in
the exchange. Seller will distribute the Shares it receives in the
reorganization, and its other properties, in pursuance of the plan of
reorganization. In addition, Seller is not under the jurisdiction of a court in
a title 11 or similar case within the meaning of Section 368(a)(3)(A) of the
Code.
Buyer does not own, directly or indirectly, nor has it owned during the
past five years, directly or indirectly, any stock of Seller. Buyer has no plan
or intent to reacquire any of its stock issued in the transaction, and has no
plan or intent to sell or otherwise dispose of any of the assets of Seller
acquired in the reorganization, except for disposition made in the ordinary
course of business or transfers described in Section 368(a)(2)(C) of the Code.
None of the compensation received by any shareholder-employee of Seller
pursuant to any employment, consulting or similar arrangement is or will be
separate consideration for, or allocable to, any of the Shares. None of the
Shares received by any Shareholder-employee of Seller pursuant to this
reorganization are or will be separate consideration for, or allocable to, any
such employment, consulting or similar arrangement. The compensation paid to
any Shareholder-employee of Seller is or will be for services rendered and
will be commensurate with amounts paid to third parties bargaining at arm's
length for similar services.
16
<PAGE> 17
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
executed on the day and year first above written.
SELLER:
ALL STAR RENTAL, INC.
BY: /s/ ROBERT D. SIMONS
-----------------------------------
Robert D. Simons, President
SHAREHOLDERS:
/s/ ROBERT D. SIMONS
--------------------------------------
Robert D. Simons
/s/ KEITH CROSBY
--------------------------------------
Keith Crosby
BUYER
BESTWAY, INC.
BY: /s/ TERESA A. SHEFFIELD
-----------------------------------
Teresa A. Sheffield, Vice President
17
<PAGE> 1
SECOND AMENDMENT TO FIRST AMENDED
AND RESTATED REVOLVING CREDIT LOAN AGREEMENT
THIS SECOND AMENDMENT TO FIRST AMENDED AND RESTATED REVOLVING CREDIT LOAN
AGREEMENT (the "AMENDMENT"), dated as of April 12, 1996, is between the
Borrower (as defined below) and COMERICA BANK-TEXAS, a Texas banking
association ("LENDER").
RECITALS:
Borrower and Lender have entered into that certain First Amended and
Restated Revolving Credit Loan Agreement dated as of August 19, 1993 (such
agreement as previously amended and/or extended and as may be hereafter amended
or otherwise modified from time to time, the "AGREEMENT").
Borrower and Lender desire to amend the Agreement as herein provided.
NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
Definitions
Section 1 Definitions. Capitalized terms used in this Amendment, to the
extent not otherwise defined herein, shall have the same meanings as in the
Agreement, as amended hereby. As used herein and in the Agreement, effective as
of the date hereof, the term "BORROWER" shall mean, collectively, Bestway,
Inc., a Delaware corporation, Bestway Rental, Inc., a Tennessee corporation,
K.C. Resource Service Corporation, a Missouri corporation, and U.S.
Credit-Service Corporation, a Missouri corporation, each of which are jointly
and severally liable under all documents executed by them for the benefit of
Lender.
ARTICLE II
Amendments
Section 1 Amendment to Section 1.1. Effective as of the date hereof,
certain definitions contained in Section 1.1 of the Agreement are hereby
amended as follows:
(a) The following definitions are hereby substituted for existing
definitions of the same identity, and such existing definitions are deleted in
their entirety:
SECOND AMENDMENT TO FIRST AMENDED AND
RESTATED REVOLVING CREDIT LOAN AGREEMENT - Page 1
<PAGE> 2
"MAXIMUM REVOLVING CREDIT LOAN" shall mean $7,500,000.00.
"REVOLVING CREDIT NOTE" shall mean the Third Amended and Restated
Revolving Credit Note dated April 12, 1996, in the original principal
amount of $7,500,000, executed by the Borrower and payable to the order
of the Bank, as renewed, extended, increased and/or modified from time to
time.
"TERMINATION DATE" shall mean August 18, 1997.
Section 2 Amendment to Section 2 Generally. Effective as of the date
hereof, the reference in Section 2.1. of the Agreement to "$4,000,000" is
deleted and replaced with "$7,500,000". Additionally, any other reference in
Section 2, generally, to a $4,000,000 limit for the face amount of the
Revolving Credit Note shall be deleted and $7,500,000 shall be substituted
therefor.
Section 3 Amendment to Section 6.7. Effective as of the date hereof,
Section 6.7 of the Agreement is amended by deleting all listed time periods and
dollar amounts, and by substituting therefor the following:
"(a) April 12, 1996 through July 31, 1996: $6,900,000
(b) August 1, 1996 through October 31, 1996: $7,250,000
(c) November 1, 1996 through January 31, 1997: $7,500,000
(d) February 1, 1997 and at all times thereafter: $8,000,000."
Section 2.4 Amendment to Section 6.8. Effective as of the date hereof,
Section 6.8 is amended by deleting all listed time periods and ratios, and by
substituting therefor the following:
"at all times, no greater than 1.5:1.0."
Section 2.5 Amendment to Section 6.9. Effective as of the date hereof,
Section 6.9 of the Agreement is amended by deleting all listed time periods and
ratios, and by substituting therefor the following:
"at all times, no less than 0.75:1.0."
Section 2.6 Amendment to Section 7. Effective as of the date hereof,
Section 7.15 of the Agreement is amended by deleting the existing language in
its entirety, and by substituting therefor the following:
SECOND AMENDMENT TO FIRST AMENDED AND
RESTATED REVOLVING CREDIT LOAN AGREEMENT - Page 2
<PAGE> 3
"New Store Openings and Acquisitions.
Without the prior written consent of the Bank, (a) open more than 10 new
stores in any twelve-month period, or (b) make any stock or asset
acquisition, other than the acquisition of assets in the ordinary course
of the business of the Borrower."
ARTICLE III
Conditions Precedent
The effectiveness of this Amendment is subject to the condition that
Lender shall have received as of the date hereof, in form and substance
satisfactory to Lender, (a) the modified Revolving Credit Note, (b) resolutions
of the Board of Directors of the Borrower certified by its Secretary or an
Assistant Secretary which authorize the execution, delivery, and performance by
the Borrower of this Amendment, (c) a certificate in a form acceptable to
Lender verifying the consummation of the pending asset purchase transaction
with All Star Rental, Inc., and (d) written ratification of all existing
subordination agreements from O'Donnell & Masur, L.P., Jack E. Meyer and Euless
Aero Components, Inc.
ARTICLE IV
Ratifications and Other Agreements
Section 1 Ratifications. The terms and provisions set forth in this
Amendment shall modify and supersede all inconsistent terms and provisions set
forth in the Agreement and except as expressly modified and superseded by this
Amendment, the terms and provisions of the Agreement, the Note, and all other
loan and collateral documents executed in connection with the Agreement are
hereby ratified and confirmed and shall continue in full force and effect.
Borrower and Lender agree that the Agreement as amended hereby and all other
documents executed in connection with the Agreement or this Amendment to which
Borrower is a party shall continue to be legal, valid, binding and enforceable
in accordance with their respective terms.
Section 2 Representations and Warranties. Borrower hereby represents
and warrants to Lender that (a) the execution, delivery and performance of this
Amendment and any and all other documents executed and/or delivered in
connection herewith have been authorized by all requisite corporate action on
the part of Borrower and will not violate the articles of incorporation or
bylaws of Borrower or any agreement to which Borrower or any of its properties
is bound, (b) the representations and warranties contained in the Agreement, as
amended hereby, and any other documents executed in connection therewith or
herewith are true and correct on and as of the date hereof as though made on
and as of the date hereof, (c) no Event of Default has occurred and is
continuing and no event or condition has occurred that with the giving of
notice or lapse of time or both would be an Event of Default, and (d) Borrower
is in full
SECOND AMENDMENT TO FIRST AMENDED AND
RESTATED REVOLVING CREDIT LOAN AGREEMENT - Page 3
<PAGE> 4
compliance with all covenants and agreements contained in the Agreement as
amended hereby. Since the date of the Agreement, there have been no amendments
to any of the respective articles of incorporation or bylaws of the entities
which collectively comprise the Borrower.
ARTICLE V
Miscellaneous
Section 1 Survival of Representations and Warranties. All
representations and warranties made in this Amendment or any other document
executed in connection herewith shall survive the execution and delivery of
this Amendment, and no investigation by Lender or any closing shall affect the
representations and warranties or the right of Lender to rely upon them.
Section 2 Reference to Agreement. The Agreement, and any and all other
agreements, documents, or instruments now or hereafter executed and delivered
pursuant to the terms hereof or pursuant to the terms of the Agreement as
amended hereby, are hereby amended so that any reference in such documents to
the Agreement shall mean a reference to the Agreement as amended hereby.
Section 3 Expenses of Lender. As provided in the Agreement, Borrower
agrees to pay on demand all reasonable costs and expenses incurred by Lender in
connection with the preparation, negotiation, and execution of this Amendment
and any other documents executed pursuant hereto and any and all amendments,
modifications, and supplements thereto, including without limitation the costs
and reasonable fees of Lender's legal counsel, and all costs and expenses
incurred by Lender in connection with the enforcement or preservation of any
rights under the Agreement, as amended hereby, or any other document executed
in connection therewith, including without limitation the costs and reasonable
fees of Lender's legal counsel.
Section 4 Severability. Any provision of this Amendment held by a court
of competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
Section 5 Applicable Law. This Amendment and all other documents
executed pursuant hereto shall be deemed to have been made and to be
performable in Dallas, Dallas County, Texas and shall be governed by and
construed in accordance with the laws of the State of Texas.
Section 6 Successors and Assigns. This Amendment is binding upon and
shall inure to the benefit of Lender, Borrower, and their respective successors
and assigns, except Borrower may not assign or transfer any of its rights or
obligations hereunder without the prior written consent of Lender.
SECOND AMENDMENT TO FIRST AMENDED AND
RESTATED REVOLVING CREDIT LOAN AGREEMENT - Page 4
<PAGE> 5
Section 7 Counterparts. This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original,
but all of which when taken together shall constitute one and the same
instrument.
Section 8 Effect of Waiver. No consent or waiver, express or implied,
by Lender to or for any breach of or deviation from any covenant, condition or
duty by Borrower or any obligated party shall be deemed a consent or waiver to
or of any other breach of the same or any other covenant, condition or duty.
Section 9 Headings. The headings, captions, and arrangements used in
this Amendment are for convenience only and shall not affect the interpretation
of this Amendment.
Section 10 Non-Application of Chapter 15 of Texas Credit Code. The
provisions of Chapter 15 of the Texas Credit Code Vernon's Annotated Texas
Statutes, Article 5069-15) are specifically declared by the parties not to be
applicable to this Amendment or any of the Loan Documents or the transactions
contemplated hereby.
Section 11 ENTIRE AGREEMENT. THE AGREEMENT, THIS AMENDMENT AND ALL OTHER
INSTRUMENTS, DOCUMENTS AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH
THE AGREEMENT OR THIS AMENDMENT EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE
PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THIS
AMENDMENT, AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES
HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO.
SECOND AMENDMENT TO FIRST AMENDED AND
RESTATED REVOLVING CREDIT LOAN AGREEMENT - Page 5
<PAGE> 6
Executed as of the date first written above.
BORROWER
BESTWAY, INC.
By: /s/ BETH A. DURRETT
-----------------------------------
Beth A. Durrett
Vice President
BESTWAY RENTAL, INC.
By: /s/ BETH A. DURRETT
-----------------------------------
Beth A. Durrett
Vice President
K. C. RESOURCE SERVICE CORPORATION
By: /s/ BETH A. DURRETT
-----------------------------------
Beth A. Durrett
Vice President
U.S CREDIT-SERVICE CORPORATION
BY: /s/ BETH A. DURRETT
-----------------------------------
Beth A. Durrett
Vice President
SECOND AMENDMENT TO FIRST AMENDED AND
RESTATED REVOLVING CREDIT LOAN AGREEMENT - Page 6
<PAGE> 7
LENDER:
COMERICA BANK-TEXAS
By: /s/ G. Christopher Jones
-----------------------------------
Its: SVP
----------------------------------
Each of the undersigned hereby severally, but not jointly, (i) consents
and agrees to this Amendment and (ii) confirms and agrees that any
subordination agreement previously executed respectively by the undersigned for
the benefit of Lender is in full force and effect and is the legal, valid and
binding obligation of the undersigned and is, enforceable in accordance with
its terms.
SUBORDINATING PARTIES:
O'DONNELL & MASUR, L.P.
By: O'Donnell & Masur, a general
partnership
By: /s/ James A. O'Donnell
-----------------------------------
Its: General Partner
----------------------------------
/s/ JACK E. MEYER
--------------------------------------
Jack E. Meyer
EULESS AERO COMPONENTS, INC.
By: /s/ DAVID S. TEMIN
-----------------------------------
Its: Vice President
----------------------------------
SECOND AMENDMENT TO FIRST AMENDED AND
RESTATED REVOLVING CREDIT LOAN AGREEMENT - Page 7
