UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the period ended January 31, 1997
Commission File Number 33-7870-NY
Travel Ports of America, Inc.
New York 16-1128554
3495 Winton Place, Building C, Rochester, New York 14623
716-272-1810
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
[ X ] Yes [ ] No
Class Outstanding at January 31, 1997
Common Stock, Par Value
$.01 Per Share 5,259,424
TRAVEL PORTS OF AMERICA, INC.
INDEX
Page
PART I Financial Information
Balance Sheets, January 31, 1997 (unaudited) and
April 30, 1996............................. 3
Statement of Income (unaudited), quarter and nine months ended
January 31, 1997 and 1996.................. 4
Statement of Cash Flows (unaudited), nine months
ended January 31, 1997 and 1996............ 5
Notes to Financial Information..................... 6
Management's Discussion and Analysis of Financial
Condition and Results of Operations............... 7
PART II Other Information
Index to Exhibits and Legal Proceedings............. 11
Signatures.......................................... 15
TRAVEL PORTS OF AMERICA, INC.
BALANCE SHEET
(UNAUDITED)
1/31/97 4/30/96
ASSETS
CURRENT ASSETS:
CASH AND EQUIVALENTS $ 2,189,691 $ 1,667,062
ACCOUNTS RECEIVABLE, LESS ALLOWANCE
FOR DOUBTFUL ACCOUNTS OF $223,000 AT
JANUARY 1997 AND $208,000
AT APRIL 1996 5,287,354 4,357,246
NOTES RECEIVABLE 1,359,336 56,915
INVENTORIES 6,637,412 5,333,829
PREPAID AND OTHER CURRENT ASSETS 1,362,869 1,052,626
DEFERRED TAXES - CURRENT 371,800 371,800
TOTAL CURRENT ASSETS 17,208,462 12,839,478
NOTES RECEIVABLE, DUE AFTER ONE YEAR 738,916 2,071,671
PROPERTY, PLANT AND EQUIPMENT, NET 40,734,468 35,976,800
COST IN EXCESS OF UNDERLYING NET ASSET
VALUE OF ACQUIRED COMPANIES 1,920,353 1,968,496
OTHER ASSETS, NET 2,579,094 2,422,159
$63,181,293 $55,278,604
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
SHORT-TERM DEBT $ 758,000
CURRENT PORTION OF LONG-TERM DEBT 3,029,109 $ 2,756,102
ACCOUNTS PAYABLE 7,504,952 5,994,740
ACCOUNTS PAYABLE - AFFILIATE 975,972 747,939
INCOME TAXES PAYABLE
ACCRUED COMPENSATION 1,624,781 1,460,862
ACCRUED SALES AND FUEL TAX 2,339,008 1,247,586
ACCRUED EXPENSES AND OTHER
CURRENT LIABILITIES 1,151,449 1,156,856
TOTAL CURRENT LIABILITIES 17,383,271 13,364,085
LONG TERM DEBT 24,860,743 22,284,257
CONVERTIBLE SUBORDINATED DEBENTURES 4,650,000 4,650,000
DEFERRED INCOME TAXES 894,200 894,200
TOTAL LIABILITIES 47,788,214 41,192,542
SHAREHOLDERS' EQUITY
COMMON STOCK, $.01 PAR VALUE
AUTHORIZED - 10,000,000 SHARES,
ISSUED AND OUTSTANDING AT JANUARY
1997 - 5,259,424 AND
APRIL 1996 - 5,239,124 52,594 52,391
ADDITIONAL PAID-IN CAPITAL 3,843,996 3,813,429
RETAINED EARNINGS 11,496,489 10,220,242
TOTAL SHAREHOLDERS' EQUITY 15,393,079 14,086,062
$63,181,293 $55,278,604
TRAVEL PORTS OF AMERICA, INC.
STATEMENT OF INCOME
(UNAUDITED)
QUARTER ENDED NINE MONTHS ENDED
JANUARY 31 JANUARY 31
1997 1996 1997 1996
NET SALES AND
OPERATING
REVENUE $52,152,573 $40,168,832 $151,340,507 $117,915,138
COST OF
GOODS SOLD 41,221,054 30,646,792 116,689,277 88,898,743
GROSS PROFIT 10,931,519 9,522,040 34,651,230 29,016,395
OPERATING
EXPENSE 8,894,288 7,310,596 27,015,904 21,914,881
GENERAL AND
ADMINISTRATIVE
EXPENSE 1,115,863 1,217,027 3,370,717 3,082,690
INTEREST EXPENSE 918,685 632,778 2,305,639 1,920,437
OTHER INCOME, NET (55,715) (76,041) (233,177) (468,823)
10,873,121 9,084,360 32,459,083 26,449,185
INCOME
BEFORE TAXES 58,398 437,680 2,192,147 2,567,210
PROVISION FOR
TAXES ON INCOME 9,300 170,500 915,900 1,078,400
NET INCOME $ 49,098 $ 267,180 $ 1,276,247 $ 1,488,810
PER SHARE DATA:
NET INCOME
PER SHARE -
PRIMARY $0.01 $0.05 $0.24 $0.28
NET INCOME PER
SHARE - FULLY
DILUTED $0.01 $0.05 $0.21 $0.24
WEIGHTED AVERAGE SHARES
OUTSTANDING -
PRIMARY 5,363,029 5,343,005 5,389,325 5,382,414
WEIGHTED AVERAGE SHARES
OUTSTANDING - FULLY
DILUTED 5,364,778 6,893,005 6,951,157 6,941,078
TRAVEL PORTS OF AMERICA, INC.
STATEMENT OF CASH FLOWS
(UNAUDITED)
NINE MONTHS ENDED JANUARY 31
1997 1996
OPERATING ACTIVITIES:
NET INCOME $1,276,247 1,488,810
DEPRECIATION AND AMORTIZATION 2,419,312 1,973,553
PROVISION FOR LOSSES ON ACCOUNT
RECEIVABLE 25,090 33,905
(GAIN) LOSS ON SALE OF ASSETS (213,681)
CHANGES IN OPERATING ASSETS AND LIABILITIES -
ACCOUNTS RECEIVABLE (955,198) (924,444)
INVENTORIES (1,303,583) 223,761
PREPAID AND OTHER CURRENT ASSETS (310,243) (351,972)
ACCOUNTS PAYABLE 1,738,245 (711,162)
ACCRUED COMPENSATION 163,919 (20,346)
ACCRUED SALES AND FUEL TAX 1,091,422 564,516
ACCRUED EXPENSES AND OTHER CURRENT
LIABILITIES (5,407) (24,774)
CHANGES IN INCOME TAXES PAYABLE 94,404
CHANGES IN OTHER NON-CURRENT ASSETS (277,976) 13,388
NET CASH PROVIDED BY OPERATING
ACTIVITIES 3,861,828 2,145,958
INVESTING ACTIVITIES:
EXPENDITURES FOR PROPERTY, PLANT &
EQUIPMENT (7,011,129) (8,795,066)
PROCEEDS FROM DISPOSITION OF PROPERTY,
PLANT AND EQUIPMENT 3,333 292,069
NET PROCEEDS RECEIVED ON NOTES
RECEIVABLE 30,334 185,063
NET CASH USED IN INVESTING ACTIVITIES (6,977,462) (8,317,924)
FINANCING ACTIVITIES:
NET SHORT-TERM DEBT BORROWING (PAYMENTS) 758,000 643,000
PRINCIPAL PAYMENTS ON LONG-TERM DEBT (1,926,214) (1,816,778)
PROCEEDS FROM LONG-TERM BORROWING 4,775,707 1,500,000
PROCEEDS FROM EXERCISE OF STOCK OPTIONS 30,770 45,980
NET CASH PROVIDED BY FINANCING
ACTIVITIES 3,638,263 372,202
NET INCREASE (DECREASE) IN CASH AND
EQUIVALENTS 522,629 (5,799,774)
CASH AND EQUIVALENTS -
BEGINNING OF PERIOD 1,667,062 7,593,798
CASH AND EQUIVALENTS - END OF PERIOD $2,189,691 $1,794,024
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
CASH PAID DURING THE PERIOD:
INTEREST PAID $2,239,279 $1,928,059
INCOME TAXES PAID $1,000,816 $ 935,985
TRAVEL PORTS OF AMERICA, INC.
NOTES TO FINANCIAL INFORMATION
JANUARY 31, 1997
NOTE 1 BASIS OF PRESENTATION
The unaudited financial information has been prepared in accordance with the
Summary of Accounting Policies of the Company as outlined in Form 10-K filed
for the year ended April 30, 1996, and should be read in conjunction with
the Notes to Financial Statements appearing therein. In the opinion of
management, the unaudited financial information contains all adjustments
(consisting only of normal recurring adjustments) necessary to present
fairly the Company's financial position as of January 31, 1997 and its
results of operations for the three months and nine months ended January 31,
1997 and 1996. The financial information is based in part on estimates and
has not been audited by independent accountants. The annual statements will
be audited by Price Waterhouse LLP.
NOTE 2 INVENTORIES
Major classifications of inventories are as follows:
January 31, 1997 April 30, 1996
At first-in, first-out (FIFO) cost:
Petroleum Products $2,006,542 $ 925,239
Store Merchandise 2,166,351 1,960,961
Parts for repairs and tires 1,914,757 1,884,512
Other 549,762 563,117
$6,637,412 $5,333,829
NOTE 3 EARNINGS PER SHARE
Primary earnings per share is computed by dividing net income by the
weighted average number of common, and when applicable, common equivalent
shares outstanding during the period. Fully diluted earnings per share
include the dilutive impact of common equivalent shares and the convertible
debentures for the nine month period ended January 31, 1997. The convertible
debentures are not included in the calculation of fully dilutive earnings
per share for the quarter ended January 31, 1997 due to the fact that they
are anti-dilutive for the quarter.
NOTE 4 FINANCING AGREEMENTS
On January 31, 1997, the Company entered into an agreement with its primary
lender that (a) increases the line of credit to $3,750,000 until
August 31, 1997 and (b) provides an additional $3,500,000 for a capital line
of credit. The line of credit is limited to the lesser of $3,750,000 or the
sum of 80% of the Company's accounts receivable under 90 days old, plus 45%
of the Company's inventory. As of January 31, 1997, the Company has utilized
$200,000 of its available line of credit as collateral for various letters of
credit. The capital line of credit calls for interest only at prime plus 1/4
until July 31, 1998. At that time the line can be repaid or amortized over
42 months with interest at prime plus 1/2. No advances have been made
against the capital line of credit.
On October 4, 1996, the Company completed the financing of its Harborcreek,
Pennsylvania facility with its primary lender in accordance with the
Restated and Amended Credit Agreement dated December 21, 1995 in the amount
of $6,000,000. Interest is fixed at 9.44% for ten years with level principal
payments based upon a 15 year amortization. A balloon payment is due on
September 30, 2006.
On November 6, 1996, the Company entered into an agreement with its
secondary lender that (a) refinances a mortgage loan due 2001 covering two
travel plazas in Pennsylvania, as well as a term loan due in 1997 and
(b) provides an additional $5,000,000 available for 1996/97 capital
expenditures. The loan calls for the payment of interest only for six months.
After six months the loan will be amortized over 15 years with a balloon
payable after five years. At the time amortization commences, interest can
be fixed at 210 basis points in excess of the five year United States
Treasury Note or variable at prime plus 1/2. As of January 31, 1997,
$3,481,151 has been advanced for capital expenditures.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS:
Third Quarter ended January 31, 1997 and 1996
Sales from operations were $52,152,573 for the third quarter of fiscal 1997,
up $11,983,741, or 30%, from the third quarter of last year. This year we
added travel plazas in Baltimore, Maryland and Harborcreek, Pennsylvania.
Sales from these locations for the quarter amounted to $8,342,000. Sales on
a same unit basis increased an aggregate of $3,641,000 or 9%. The average
price per gallon of diesel fuel was up $.23 over last year. Approximately
$4,761,000 of the $11,984,000 increase related to higher diesel prices. On a
same unit basis, diesel fuel gallons decreased about 3% from last year,
store sales decreased 6% and shop sales decreased 5%, mainly from Christmas
and New Year's Day being midweek holidays. These declines in same unit sales
were offset by higher diesel retail prices.
Gross profit for the third quarter was $10,931,519, an increase of
$1,409,479, or 15%, from the prior year. The two new travel plazas noted
above provided $1,941,000 in gross profits. Same units' gross profit
declined an aggregate of $532,000. Most of this decline relates to a one
time occurrence in the third quarter last year when the Company exercised
its option to cancel a fixed price contract for diesel fuel. As a result of
this, the Company recorded a gain of $412,000 which was reflected as a
reduction in cost of goods sold. In addition, same unit gross profit
declined from the lower store and shop sales. Even though same unit diesel
gallons declined, gross profit dollars increased slightly from higher
margins.
Operating expenses of $8,894,288 for the third quarter were $1,583,692, or
22% more than last year. The two new travel plazas' operating expenses for
the quarter were $1,709,000. Same unit operating expense declined an
aggregate of $125,000, or 2% from last year.
General and administrative expenses for the quarter of $1,115,863 decreased
$101,164 or 8% from last year. The decreases are due to lower travel and
entertainment, advertising and bonus expenses. Interest expense increased
$285,907 due to increased levels of debt.
Nine months ended January 31, 1997 and 1996
Sales from operations were $151,340,507 for the first nine months of fiscal
1997, up $33,425,369, or 28% from the first nine months of last year. In
comparing to last year, this year we have added travel plazas in Baltimore,
Maryland and Harborcreek, Pennsylvania and last year we had a facility in
Fairplay, South Carolina that was sold in June 1995. The impact from the
changes in locations was a $21,494,000 increase in sales as compared to the
first nine months of 1996. The increase in sales for same units was an
aggregate of $11,931,000 or 10%. As noted in the quarter, increased prices
of diesel fuel had an impact on sales. Approximately $10,642,000 of the
$33,425,369 sales increase from last year resulted from the higher prices.
On a same unit basis, approximately $9,241,000 of the $11,931,000 overall
increase related to higher diesel prices.
Gross profits for the first nine months were $34,651,230, an increase of
$5,634,835 or 19% from last year. The change in locations increased gross
profit by $5,338,000 while same unit gross profit increased an aggregate of
$297,000. As noted in the discussion of the third quarter, the variance from
last year includes a one time gain of $412,000 last year.
Operating expenses were $27,015,904 for the first nine months, an increase
of $5,101,023 or 23%. The change in locations increased operating expenses
by $4,885,000 while same unit operating expense increased an aggregate of
$216,000 or 1%.
General and administrative expenses of $3,370,717 increased $288,027 or 9%.
The increase relates primarily to compensation. Interest expense increased
$385,202, or 20% as a result of increased level of debt. Other income
decreased $235,646 from last year as a result of (a) gains from sale of
properties last year and (b) a decrease in interest income as a result of
lower cash levels this year.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
The Company's cash position increased by $522,629 to $2,189,691 during the
nine months ended January 31, 1997. Accounts receivable increased $955,198
from greater sales activity. Inventories increased $1,303,583 due to the two
new locations and increased sales. Accounts payable increased $1,738,245 as a
result of the increased inventory and timing of payments on capital
expenditures. Accrued sales and fuel taxes increased $1,091,422 from the two
new locations and due to amount and timing of tax payments. Overall
operating activities for the nine months ended January 31, 1997, provided
$3,861,828 in cash compared to last year's $2,145,958.
Investing activities resulted in a net use of $6,977,462. Capital
expenditures during the first nine months of 1996 were $7,011,129. The
renovation projects and the completion of construction of the Harborcreek
travel plaza accounted for these expenditures.
Financing activities during the first nine months of 1997 provided
$3,638,263. A portion of the proceeds from long-term borrowing were used for
the financing of Harborcreek. There also were advances on the loan from the
Company's secondary lender. Principal payments on long term debt amounted to
$1,926,214.
On January 31, 1997, the Company entered into an agreement with its primary
lender that (a) increases the line of credit to $3,750,000 until
August 31, 1997 and (b) provides an additional $3,500,000 for a capital line
of credit. The line of credit is limited to the lesser of $3,750,000 or the
sum of 80% of the Company's accounts receivable under 90 days old, plus 45%
of the Company's inventory. As of January 31, 1997, the Company has utilized
$200,000 of its available line of credit as collateral for various letters
of credit. The capital line of credit calls for interest only at prime plus
1/4 until July 31, 1998. At that time the line can be repaid or amortized
over 42 months with interest at prime plus 1/2. No advances have been made
against the capital line of credit.
On October 4, 1996, the Company completed the financing of its Harborcreek,
Pennsylvania facility with its primary lender in accordance with the
Restated and Amended Credit Agreement dated December 21, 1995 in the amount
of $6,000,000. Interest is fixed at 9.44% for ten years with level principal
payments based upon a 15 year amortization. A balloon payment is due on
September 30, 2006.
On November 6, 1996, the Company entered into an agreement with its
secondary lender that (a) refinances a mortgage loan due 2001 covering two
travel plazas in Pennsylvania, as well as a term loan due in 1997 and (b)
provides an additional $5,000,000 available for 1996/97 capital expenditures.
The loan calls for the payment of interest only for six months. After six
months the loan will be amortized over 15 years with a balloon payable after
five years. At the time amortization commences, interest can be fixed at 210
basis points in excess of the five year United States Treasury Note or variable
at prime plus 1/2. As of January 31, 1997, $3,481,151 has been advanced for
capital expenditures.
Authorized, but unissued stock is available for financing needs; however,
there are no current plans to use this source.
TRAVEL PORTS OF AMERICA, INC.
PART II -- OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
The Company is not presently a party to any other litigation (i)
that is not covered by insurance or (ii) which singly or in the aggregate
would have a material adverse effect on the Company's financial condition
and results of operations, and management has no knowledge that any other
litigation has been threatened.
Item 2. CHANGES IN SECURITIES
None
Item 3. DEFAULTS UPON SENIOR SECURITIES
None
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
Item 5. OTHER INFORMATION
None
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
(2) Plan of acquisition, reorganization, agreement, liquidation,
or succession
Not applicable
(3) Articles of Incorporation and By-Laws
Exhibit 3-a and exhibit 3-b to the Company's Registration Statement
on Form S-18, File No. 33-7870-NY are incorporated herein by
reference with respect to the Restated Certificate of Incorporation
and By-Laws of the Company.
Certificate of Amendment of Certificate of Incorporation changing
the name of the Corporation, is incorporated herein by reference to
Exhibit 3-c of the Company's report of Form 10-K dated July 27, 1993.
(4) Instruments defining the rights of security holders,
including indentures
Exhibit 4-a, Form of Common Stock Certificate, to the Company's
Registration Statement on Form S-18, File No. 33-7870-NY is
incorporated herein by reference with respect to instruments
defining the rights of security holders.
Exhibit 4-c, Form of Indenture dated as of January 24, 1995,
between Travel Ports of America, Inc. and American Stock Transfer
and Trust Company, as Trustee, with respect to up to $5,000,000
principal amount of 8.5% Convertible Senior Subordinated Debentures
due January 15, 2005 is incorporated by reference to Exhibit 4-c to
the Company's Current Report on Form 8-K dated February 15, 1995.
Exhibit 4-d, Form of Warrant to purchase Common Stock is
incorporated by reference to Exhibit 4-d to the Company's Current
Report on Form 8-K dated February 15, 1995.
(10) Material Contracts
Exhibit 10.18, Restated and Amended Credit Agreement, Revolving Line
Note and Term Loan Note, all dated January 31, 1997, executed and
delivered by the Company to Fleet Bank is set forth on page 17 of
this report.
(11) Statement re: computation of earnings per share
Computation of earnings per share is set forth in Exhibit (11) on
page 13 of this report.
(15) Letter re: unaudited interim financial information
Not applicable
(18) Letter re: change in accounting principals
Not applicable
(19) Previously unfiled documents
None
(20) Report furnished to security holders
Not applicable
(22) Published report regarding matters submitted to vote of
security holders
None
(23) Consents of experts and counsel
Not applicable
(24) Power of attorney
None
(27) Supplemental Financial Information
Exhibit (27) on page 16 of this report.
(99) Additional exhibits
None
(b) REPORT ON FORM 8-K
None
EXHIBIT (11)
COMPUTATION OF PRIMARY EARNINGS PER SHARE
FOR THE QUARTER ENDED JANUARY 31, 1997
Net income per share was computed by dividing net income by the weighted
average number of common shares outstanding and common stock equivalents.
Total Options Average Average
Qtr. Ended Below Market Option Price Market Price Shares
1/31/97 364,748 $1.91 $2.67 103,605
Average number of shares outstanding 5,259,424
5,363,029
Net income per common and common equivalent shares $.01
COMPUTATION OF FULLY DILUTED EARNINGS PER SHARE
FOR THE QUARTER ENDED JANUARY 31, 1997
Net income per share was computed by dividing net income by the weighted
average number of common shares outstanding, common stock equivalents. The
impact of the convertible debentures is not included due to their
anti-dilutive impact for the quarter.
Total Options
and Warrants Average
QTR. Ended Below Market Exercise Price Market Price * Shares
1/31/97 364,748 $1.91 $2.69 105,354
Average number of shares outstanding 5,259,424
5,364,778
Net income for quarter ended 1/31/97 $49,098
Net income per common and common equivalent shares - fully diluted $.01
COMPUTATION OF PRIMARY EARNINGS PER SHARE
FOR THE NINE MONTHS ENDED JANUARY 31, 1997
Net income per share was computed by dividing net income by the weighted
average number of common shares outstanding and common stock equivalents.
Total Options Average Average
Qtr. Ended Below Market Option Price Market Price Shares
7/31/96 499,176 $2.12 $2.97 143,124
10/31/96 495,676 $2.12 $2.98 142,973
1/31/97 364,748 $1.91 $2.67 103,605
Total for Three Quarters 389,702
Average common stock equivalents outstanding during
nine months ended January 31, 1997 129,901
Average number of shares outstanding 5,259,424
5,389,325
Net income per common and common equivalent shares $.24
COMPUTATION OF FULLY DILUTED EARNINGS PER SHARE
FOR THE NINE MONTHS ENDED JANUARY 31, 1997
Net income per share was computed by dividing net income by the weighted
average number of common shares outstanding, common stock equivalents, and
the assumed conversion of the convertible debentures.
Total Options
and Warrants Average
Qtr. Ended Below Market Exercise Price Market Price * Shares
7/31/96 499,176 $2.12 $3.28 176,873
10/31/96 586,738 $2.12 $2.98 142,973
1/31/97 388,548 $1.91 $2.69 105,354
Total for Three Quarters 425,200
Average common stock equivalents outstanding during
nine months ended January 31, 1997 141,733
Additional shares due to assumed exercise of convertible
debentures 1,550,000
Average number of shares outstanding 5,259,424
6,951,157
Net income for nine months ended 1/31/97 $1,276,247
Interest on convertible debentures, net of tax 177,863
$1,454,110
Net income per common and common equivalent shares - fully diluted $.21
* Amount reflects higher of average or period end market price.
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.
TRAVEL PORTS OF AMERICA, INC.
Date: March 11, 1997 s/ John M. Holahan
John M. Holahan, President
Date: March 11, 1997 s/ William Burslem III
William Burslem III
Vice President
RESTATED AND AMENDED CREDIT AGREEMENT AMENDMENT NUMBER 1
THIS RESTATED AND AMENDED CREDIT AGREEMENT AMENDMENT NUMBER 1 is made as
of January 31, 1997 by and between FLEET BANK, a New York bank and trust
company with offices at One East Avenue, Rochester, New York 14638 (called
the "Bank") and TRAVEL PORTS OF AMERICA, INC., a New York corporation with
offices now at 3495 Winton Place, Building C, Rochester, New York 14623
(the "Borrower").
WHEREAS, the Bank and the Borrower entered into a Restated and Amended
Credit Agreement dated December 21, 1995 (the "Credit Agreement"), and
WHEREAS, the parties desire to further amend the Credit Agreement,
NOW THEREFORE, the Bank and the Borrower agree as follows:
1. Article I.B. of the Credit Agreement is hereby amended to read
in its entirety as follows:
B. Revolving Line of Credit. The Bank hereby establishes a
revolving line of credit (the "Revolving Line") in the maximum principal
amount of Three Million Seven Hundred Fifty Thousand Dollars
($3,750,000). The Revolving Line replaces and supersedes existing
revolving lines established by the Bank for Borrower.
A Revolving Line Note (the "Revolving Line Note") in
substantially the form of Exhibit B hereto will evidence the Revolving
Line.
All outstanding principal amounts under the Revolving Line shall
bear interest until paid at a rate per annum equal to the "Prime Rate"
calculated based on actual days elapsed in a year of 360 days, but never
exceeding the maximum rate allowed by law. All changes in the interest
rate due to a change in the Prime Rate shall take place automatically
and without notice to Borrower as of the effective date of the change in
the Prime Rate. For purposes of this Agreement, the "Prime Rate" is the
Bank's rate of interest stated by the Bank from time to time to be its
prime rate (irrespective of any rate charged to any customer in any
actual transaction).
The Borrower shall make a payment of all interest accrued under
the Revolving Line Note on the first day of each month. The Borrower
shall make principal payments sufficient to assure that the aggregate
principal amount outstanding under the Revolving Line never exceeds the
amount then available under the Borrowing Formula described below, and
also sufficient to assure that there is no outstanding principal under
the Revolving Line for at least thirty (30) consecutive days between
each September 1 and the next succeeding August 31 except between
September 1, 1995 and August 31, 1996. All remaining principal and
interest shall be due and payable in full on the date of expiration of
the Revolving Line.
The Revolving Line shall terminate on September 30, 1997
(or the date of an Event of Default if earlier) unless extended in
writing in the sole discretion of and on such terms as are acceptable to
the Bank, and no further advances shall be made thereafter.
The Borrower may borrow, repay, and reborrow under the
Revolving Line so long as no Event of Default hereunder has occurred and
the aggregate principal amount outstanding at any one time does not
exceed the lesser of $3,750,000 or the sum then available according to
the following formula (the "Borrowing Formula"): (a) eighty percent
(80%) of all Borrower eligible accounts receivable as defined below
("Eligible Accounts") plus (b) forty-five percent (45%) of all Borrower
eligible inventories as defined below ("Eligible Inventories").
Eligible accounts receivable are defined as: (i) all trade
accounts receivable less than 90 days beyond date of invoice plus (ii)
the less than 90 days beyond date of invoice portion of receivables from
one customer of which at least 50% of the outstanding amount is less
than 90 days beyond date of invoice, minus all (iii) marginal accounts
receivable, contra accounts receivable, affiliate company accounts
receivable, foreign accounts receivable, employee accounts receivable,
bill and hold accounts receivable (i.e. accounts relating to goods not
yet shipped but invoiced), uncollectible accounts receivable, accounts
receivable arising from progressive billings (ie. accounts receivable
from billings for work performed on a partially completed contract),
accounts receivable arising from guaranteed sales with buy-back
provisions (ie. accounts receivable arising from sales in which the
Borrower is obligated to repurchase inventory or merchandise sold to
customers), and accounts receivable of companies or businesses actually
known to the Bank to be deteriorating. In the event that total accounts
receivable from any payor represent more than 20% of the Borrower's total
accounts receivable, the Bank reserves the right in its sole discretion
to delete those accounts receivable in excess of 20% of total accounts
from eligible accounts receivable unless the Borrower has provided to
the Bank sufficient information regarding the obligor on the accounts
for the Bank to make a determination as to the creditworthiness of that
obligor.
Eligible inventories are defined as all inventories owned by
the Borrower valued at cost minus all perishable or non-saleable
inventories.
Eligible accounts receivable and eligible inventories must
arise from the Borrower's ordinary course of business as it exists on
the date hereof. The Bank reserves the right in its sole discretion to
modify the borrowing formula or make changes in the definitions of
eligible accounts or eligible inventories, or to delete certain accounts
or inventories from the borrowing formula, all in the event of a material
adverse change in the collateral or its collectibility.
The amount available under the Revolving Line shall be
reduced by the aggregate amount of outstanding Letters of Credit issued
by the Bank for the account of the Borrower. Letters of Credit will be
issued at the request of the Borrower in the discretion of, and upon
terms acceptable to, the Bank up to an aggregate maximum outstanding
face amount at any one time of $500,000. The Borrower shall pay to the
Bank a non-refundable commission of one and one-half percent (1.5%) per
annum with respect to the face amount of each respective letter of
credit on the date such letter of credit is issued. Letters of credit
shall have maturity dates no longer than one year following the
termination date of the Revolving Line described above.
Borrower agrees to allow the Bank complete access to all
books and records of the Borrower upon reasonable request. Borrower
agrees to submit information which the Bank may reasonably request from
time to time in connection with the Revolving Line. The Borrower will
provide to the Bank such borrowing reconciliation reports, agings,
listings, and other reports and information as the Bank requests in
connection with the Revolving Line including without limitation accounts
agings and inventory reports as requested.
2. Article I. Of the Credit Agreement is hereby amended to add a
new Section H. To read in its entirety as follows:
H. Capital Expenditure Line. The Bank hereby establishes a
line of credit for the purpose of funding capital expenditures and
construction costs not funded by other sources (the "Capital Line") in
the maximum principal amount of Three Million Five Hundred Thousand
Dollars ($3,500,000).
A Capital Line Note (the "Capital Line Note") in
substantially the form of Exhibit F hereto will evidence the Capital
Line.
All outstanding principal amounts under the Capital Line
shall bear interest until paid at a rate per annum equal to the Prime
Rate plus one-fourth percentage point (.25%) calculated based on actual
days elapsed in a year of 360 days, but never exceeding the maximum rate
allowed by law. All changes in the interest rate due to a change in the
Prime Rate shall take place automatically and without notice to Borrower
as of the effective date of the change in the Prime Rate.
The Borrower shall make a payment of all interest accrued
under the Capital Line Note on the first day of each month. All
remaining principal and interest shall be due and payable in full on the
date of expiration of the Capital Line, provided, however, if no Event
of Default has occurred the outstanding principal under the Capital Line
may be refinanced by the Capital Loan (described below in Article I. I.)
at the option of the Borrower on the Termination Date of the Capital
Line .
The Capital Line shall terminate on July 31, 1998 (or if
earlier, the date of an Event of Default or the date of termination of
the Revolving Line unless such Revolving Line has been extended), and no
further advances shall be made thereafter.
The Borrower may borrow, repay, and reborrow under the
Capital Line so long as no Event of Default hereunder has occurred and
the aggregate principal amount outstanding at any one time does not
exceed the lesser of (i) $3,500,000 or (ii) the capital expenditures of
the Borrower during the period the Capital Line is available less
$1,500,000 per Borrower's fiscal year.
On the date the Capital Line becomes available, the Borrower
shall pay a facility fee to the Bank of $8750.
3. Article I. Of the Credit Agreement is hereby amended to add a
new Section I. To read in its entirety as follows:
I. Capital Expenditure Loan. At the request of the Borrower
and provided that no Event of Default or termination date of the
Revolving Line has occurred, upon termination of the Capital Line the
Bank will make a Capital Loan to the Borrower in the amount of the then
outstanding principal balance of the Capital Line.
A Capital Loan Note (the "Capital Loan Note") in
substantially the form of Exhibit G hereto will evidence the Capital
Loan.
All outstanding principal amounts under the Capital Loan
shall bear interest until paid at a rate per annum equal to the Prime
Rate plus one-half percentage point (.50%) calculated based on actual
days elapsed in a year of 360 days, but never exceeding the maximum rate
allowed by law. All changes in the interest rate due to a change in the
Prime Rate shall take place automatically and without notice to Borrower
as of the effective date of the change in the Prime Rate.
The Borrower shall make a payment of all interest accrued
under the Capital Loan Note on the first day of each month. In addition,
on the first day of each month a principal payment equal to 1/42nd of
the original principal amount of the Capital Loan Note shall be due.
All remaining principal and interest shall be due and payable in full on
January 31, 2002.
On the date the Capital Loan is made, the Borrower shall pay
a conversion fee to the Bank equal to one-fourth percent (.25%) of the
original principal amount of the Capital Loan.
4. The fifth paragraph of Article IV. of the Credit Agreement is
hereby amended to read in its entirety as follows:
The Revolving Line, the Capital Line and the Capital Loan
shall be secured by the collateral for the Term Loan and the 1994 Loan
as well as a sole first lien in all assets of every kind and nature, now
owned or hereafter acquired, of Borrower, including without limitation
goods, equipment, machinery, furniture, fixtures, supplies, tools,
parts, accounts, inventory, documents, chattel paper, instruments, and
general intangibles of Borrower, together with additions, accessions,
replacements, substitutions, and proceeds.
The Capital Loan shall be secured by a mortgage covering any
of the Borrower's property acquired with proceeds of the Capital Loan.
The mortgage shall be documented and perfected in a manner satisfactory
to the Bank and its legal counsel.
5. The introductory paragraph to Article VII. of the Credit
Agreement is hereby amended to read in its entirety as follows:
So long as the Revolving Line commitment, the Capital Line
commitment, the Capital Loan, the Term Loan, the Mortgage Loans, the
1994 Loan, the Erie Line, the Erie Loan, or any loans hereunder or any
other obligations of Borrower to the Bank under or related to this
Agreement shall be outstanding, unless the Bank shall otherwise consent
in writing, the Borrower shall:
6. A new final paragraph is hereby added to Article VII.A. of
the Credit Agreement to read in its entirety as follows:
Borrower shall furnish to the Bank, quarterly at the time its
Report 10Q is required to be furnished, a report showing its capital
expenditures during the quarter and on a cumulative basis since the date
of commitment of the Capital Line, as well as sources of funding for the
same, in form and with detail reasonably satisfactory to the Bank.
7. Article VII.J. of the Credit Agreement is hereby amended to
read in its entirety as follows:
J. Minimum Net Worth. Maintain at all times net worth
calculated by generally accepted accounting principles ("GAAP") of at
least $13,850,000.
8. Article VII.L. of the Credit Agreement is hereby amended to
read in its entirety as follows:
L. Proceeds of Sales. Cause the proceeds, after
payment of expenses related thereto, of any sales of properties covered
by the mortgages, or sales of other collateral, referenced in Article IV
hereof to be delivered to the Bank to be used to retire obligations
first under the Term Loan, second under the Mortgage Loans, third under
the 1994 Loan, and fourth under the Capital Loan; provided, however,
that to the extent proceeds specifically relate to a property covered by
one of the Mortgage Loans, the Erie Line or the Erie Loan, the 1994
Loan, or the Capital Loan, to the extent applicable, such proceeds shall
be used to reduce the respective Mortgage Loan, the Erie Line, the Erie
Loan, or the Capital Loan respectively; and further provided, however,
that if any mortgaged property is the subject of a sale-leaseback, the
Bank will not unreasonably withhold its approval of the same on such
terms and conditions as may be mutually agreeable between the Bank and
the Borrower.
9. The introductory paragraph to Article VIII. of the Credit
Agreement is hereby amended to read in its entirety as follows:
So long as the Revolving Line commitment, the Term Loan, the
Mortgage Loans, the 1994 Loan, the Erie Line, the Erie Loan, the Capital
Line commitment, the Capital Loan, or any loans hereunder or any other
obligations of Borrower to the Bank under or related to this Agreement
shall be outstanding, unless the Bank otherwise consents in writing,
Borrower shall not, directly or indirectly:
10. Exhibit B to the Credit Agreement is hereby amended and
restated to read in its entirety as set forth in Exhibit B to this
Amendment. New Exhibits F and G are hereby added to the Credit Agreement
to read in their entirety as set forth in Exhibits F and G to this
Amendment.
11. All other terms of the Credit Agreement shall remain
unchanged and in full force and effect.
12. All references in mortgages, security agreements, notes, and
other documents, instruments, and agreements related to the Credit
Agreement, or to the 1988 Agreement described therein, which refer to the
Credit Agreement or the 1988 Agreement shall be deemed to refer to the
Credit Agreement as amended hereby and as the same may be modified,
extended, or replaced from time to time.
13. Borrower represents and warrants that (a) each of the
representations and warranties set forth in the Credit Agreement is true
and correct as of the date hereof (and with respect to the representations
and warranties set forth in Article V. of the Credit Agreement, the
financial statements referred to therein shall mean the financial
statements of the Borrowers for the most recent quarterly period ended);
and (b) no Event of Default or event that, with the giving of notice or the
passage of time or both would constitute an Event of Default, has occurred
and is continuing.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized, respective officers as of the date first
above written.
FLEET BANK TRAVEL PORTS OF AMERICA, INC.
By: __________________________ By: ______________________
Title: __________________________ Title: ______________________
EXHIBIT B
REPLACEMENT REVOLVING LINE NOTE
$3,750,000 January 31, 1997
THIS REPLACEMENT REVOLVING LINE NOTE RESTATES, AMENDS, AND
REPLACES IN ITS ENTIRETY THE REVOLVING LINE NOTE DATED AS OF SEPTEMBER 7,
1995 IN THE MAXIMUM PRINCIPAL AMOUNT OF $2,750,000 GIVEN BY THE BORROWER IN
FAVOR OF THE BANK.
FOR VALUE RECEIVED, TRAVEL PORTS OF AMERICA, INC.
("Borrower") hereby promises to pay to the order of FLEET BANK ("Bank"), the
principal sum of Three Million Seven Hundred Fifty Thousand Dollars
($3,750,000) or if less, the aggregate unpaid principal amount of all
advances made by Bank of Borrower. The Bank shall maintain a record of
amounts of principal and interest payable by Borrower from time to time, and
the records of the Bank maintained in the ordinary course of business shall
be prima facie evidence of the existence and amounts of Borrower's
obligations recorded therein. In the event of transfer of this Revolving
Line Note, or if the Bank shall otherwise deem it appropriate, the Borrower
hereby authorizes the Bank to endorse on this Revolving Line Note the amount
of advances and payments to reflect the principal balance outstanding from
time to time. The Bank may send written confirmation of advances to
Borrower but any failure to do so shall not relieve the Borrower of the
obligation to repay any advance.
This Revolving Line Note shall bear interest at a rate equal
to the "Prime Rate" calculated based on actual days elapsed in a year of 360
days. All changes in the interest rate due to a change in the Prime Rate
shall take place automatically and without notice to Borrower as of the
effective date of the change in the Prime Rate. For purposes of this
Agreement, the "Prime Rate" is the Bank's rate of interest stated by the
Bank from time to time to be its prime rate (irrespective of any rate
charged to any customer in any actual transaction).
Interest shall continue to accrue after maturity at the rate
required by this Revolving Line Note until this Revolving Line Note is paid
in full. The rate of interest on this Revolving Line Note may be increased
under the circumstances provided in the Amended and Restated Credit
Agreement between the Borrower and the Bank dated December 21, 1995, as the
same has been and may be modified, extended, or replaced from time to time
(the "Credit Agreement"). The right of Bank to receive such increased rate
of interest shall not constitute a waiver of any other right or remedy of
Bank.
All interest accrued under this Revolving Line Note shall be
due and payable on the first day of each month. Principal payments shall be
due and payable sufficient to assure that the aggregate principal amount
outstanding under the Revolving Line never exceeds the amount then available
under the Borrowing Formula described in Article I, Section B of the Credit
Agreement, and also sufficient to assure that there is no outstanding
principal under the Revolving Line for at least thirty (30) consecutive days
between each September 1 and the next succeeding August 31. All remaining
principal and interest shall be due and payable in full on the date of
expiration of the Revolving Line as specified in the Credit Agreement.
Payments may be made pursuant to a mutually agreeable cash management
arrangement with the Bank. All payments shall be in lawful money of the
United States in immediately available funds.
Any payment not received within ten days of when due may be
subject to an additional late charge equal to 5% of the payment due.
If this Revolving Line Note or any payment hereunder becomes
due on a Saturday, Sunday or other holiday on which the Bank is authorized
to close, the due date for the Revolving Line Note or payment shall be
extended to the next succeeding business day, but any interest or fees shall
be calculated based upon the actual time of payment.
This Revolving Line Note is freely prepayable in whole or in
part at the option of the Borrower without premium or penalty.
This Revolving Line Note shall, at the Bank's option, become
immediately due and payable without presentment, demand, protest, or other
notice of any kind, all of which are hereby expressly waived, upon the
happening of any Event of Default under the Credit Agreement.
This Revolving Line Note is subject to the express condition
that at no time shall Borrower be obligated or required to pay interest on
the principal balance of this Revolving Line Note at a rate which could
subject Bank to either civil or criminal liability as a result of being in
excess of the maximum rate which Borrower is permitted by law to contract or
agree to pay. If by the terms of this Revolving Line Note, Borrower is at
any time required or obligated to pay interest on the principal balance of
this Revolving Line Note at a rate in excess of such maximum rate, the rate
of interest under this Revolving Line Note shall be deemed to be immediately
reduced to such maximum rate and interest payable hereunder shall be
computed at such maximum rate and the portion of all prior interest payments
in excess of such maximum rate shall be applied and shall be deemed to have
been payments in reduction of the principal balance of this Revolving Line
Note.
The terms of this Revolving Line Note cannot be changed, nor
may this Revolving Line Note be discharged in whole or in part, except by a
writing executed by the holder. In the event that holder demands or accepts
partial payments of this Revolving Line Note, such demand or acceptance
shall not be deemed to constitute a waiver of the right to demand the entire
unpaid balance of this Revolving Line Note at any time in accordance with
the terms hereof. Any delay by holder in exercising any rights hereunder
shall not operate as a waiver of such rights.
Bank may set off toward payment of any obligations under this
Revolving Line Note any indebtedness due or to become due from Bank to
Borrower and any moneys or other property of Borrower in possession of Bank
at any time.
Borrower on demand shall pay all expenses of Bank, include
without limitation reasonable attorneys' fees, in connection with
enforcement and collection of this Revolving Line Note.
This Revolving Line Note shall be governed by the laws of the
State of New York.
Whenever used, the singular number shall include the plural,
the plural the singular, and the words "Bank" and "Borrower" shall include
their respective successors and assigns.
TRAVEL PORTS OF AMERICA, INC.
By: __________________________
Title: __________________________
EXHIBIT F
CAPITAL LINE NOTE
$3,500,000 January 31, 1997
FOR VALUE RECEIVED, TRAVEL PORTS OF AMERICA, INC. ("Borrower")
hereby promises to pay to the order of FLEET BANK ("Bank"), the principal
sum of Three Million Five Hundred Thousand Dollars ($3,500,000) or if less,
the aggregate unpaid principal amount of all advances made by Bank of
Borrower. The Bank shall maintain a record of amounts of principal and
interest payable by Borrower from time to time, and the records of the Bank
maintained in the ordinary course of business shall be prima facie evidence
of the existence and amounts of Borrower's obligations recorded therein. In
the event of transfer of this Capital Line Note, or if the Bank shall
otherwise deem it appropriate, the Borrower hereby authorizes the Bank to
endorse on this Capital Line Note the amount of advances and payments to
reflect the principal balance outstanding from time to time. The Bank may
send written confirmation of advances to Borrower but any failure to do so
shall not relieve the Borrower of the obligation to repay any advance.
This Capital Line Note shall bear interest at a rate equal to the "Prime Rate"
plus one-fourth percentage point (.25%) calculated based on actual days elapsed
in a year of 360 days. All changes in the interest rate due to a change in
the Prime Rate shall take place automatically and without notice to Borrower
as of the effective date of the change in the Prime Rate. For purposes of this
Agreement, the "Prime Rate" is the Bank's rate of interest stated by the Bank
from time to time to be its prime rate (irrespective of any rate charged to any
customer in any actual transaction).
Interest shall continue to accrue after maturity at the rate
required by this Capital Line Note until this Capital Line Note is paid in
full. The rate of interest on this Capital Line Note may be increased under
the circumstances provided in the Amended and Restated Credit Agreement
between the Borrower and the Bank dated December 21, 1995, as the same has
been and may be modified, extended, or replaced from time to time
(the "Credit Agreement"). The right of Bank to receive such increased rate
of interest shall not constitute a waiver of any other right or remedy of
Bank.
All interest accrued under this Capital Line Note shall be
due and payable on the first day of each month. All remaining principal and
interest shall be due and payable in full on the date of expiration of the
Capital Line as specified in the Credit Agreement. All payments shall be in
lawful money of the United States in immediately available funds.
Any payment not received within ten days of when due may be
subject to an additional late charge equal to 5% of the payment due.
If this Capital Line Note or any payment hereunder becomes
due on a Saturday, Sunday or other holiday on which the Bank is authorized
to close, the due date for the Capital Line Note or payment shall be
extended to the next succeeding business day, but any interest or fees shall
be calculated based upon the actual time of payment.
This Capital Line Note is freely prepayable in whole or in
part at the option of the Borrower without premium or penalty.
This Capital Line Note shall, at the Bank's option, become
immediately due and payable without presentment, demand, protest, or other
notice of any kind, all of which are hereby expressly waived, upon the
happening of any Event of Default under the Credit Agreement.
This Capital Line Note is subject to the express condition
that at no time shall Borrower be obligated or required to pay interest on
the principal balance of this Capital Line Note at a rate which could
subject Bank to either civil or criminal liability as a result of being in
excess of the maximum rate which Borrower is permitted by law to contract or
agree to pay. If by the terms of this Capital Line Note, Borrower is at any
time required or obligated to pay interest on the principal balance of this
Capital Line Note at a rate in excess of such maximum rate, the rate of
interest under this Capital Line Note shall be deemed to be immediately
reduced to such maximum rate and interest payable hereunder shall be
computed at such maximum rate and the portion of all prior interest payments
in excess of such maximum rate shall be applied and shall be deemed to have
been payments in reduction of the principal balance of this Capital Line Note.
The terms of this Capital Line Note cannot be changed, nor
may this Capital Line Note be discharged in whole or in part, except by a
writing executed by the holder. In the event that holder demands or accepts
partial payments of this Capital Line Note, such demand or acceptance shall
not be deemed to constitute a waiver of the right to demand the entire
unpaid balance of this Capital Line Note at any time in accordance with the
terms hereof. Any delay by holder in exercising any rights hereunder shall
not operate as a waiver of such rights.
Bank may set off toward payment of any obligations under this
Capital Line Note any indebtedness due or to become due from Bank to
Borrower and any moneys or other property of Borrower in possession of Bank
at any time.
Borrower on demand shall pay all expenses of Bank, including
without limitation reasonable attorneys' fees, in connection with
enforcement and collection of this Capital Line Note.
This Capital Line Note shall be governed by the laws of the
State of New York.
Whenever used, the singular number shall include the plural,
the plural the singular, and the words "Bank" and "Borrower" shall include
their respective successors and assigns.
TRAVEL PORTS OF AMERICA, INC.
By: __________________________
Title: __________________________
EXHIBIT G
CAPITAL LOAN NOTE
$__________ July 31, 1998
FOR VALUE RECEIVED, TRAVEL PORTS OF AMERICA, INC., a New York
corporation, with offices at 3495 Winton Place, Building C, Rochester,
New York 14623 ("Borrower"), promises to pay to FLEET BANK, a New York bank
and trust company with offices at One East Avenue, Rochester, New York 14638
("Bank"), or order, at One East Avenue, Rochester, New York 14638, or at
such other place as may be designated, from time to time, in writing by
Payee, the principal sum of ____________________________________ Dollars
($________________) in lawful money of the United States of America, with
interest thereon (the "Debt") from the date of this Note until paid.
This Note shall bear interest per annum until paid in full at
a rate equal to the "Prime Rate" plus one-half percentage point (1/2%)
calculated based on actual days elapsed in a year of 360 days, but never
exceeding the maximum rate allowed by law. All changes in the interest rate
due to a change in the Prime Rate shall take place automatically and without
notice to Borrower as of the effective date of the change in the Prime Rate.
For purposes of this Note, the "Prime Rate" is the Bank's rate of interest
stated by the Bank from time to time to be its prime rate (irrespective of any
rate charged to any customer in any actual transaction), or
The rate of interest on this Note may be increased under the
circumstances provided in the Amended and Restated Credit Agreement between
the Borrower and the Bank dated December 21, 1995, as the same has been and
may be modified, extended, or replaced from time to time
(the "Credit Agreement"). The right of Bank to receive such increased rate
of interest shall not constitute a waiver of any other right or remedy of
Bank.
Payments of all accrued interest, plus payments of principal
of $___________ each, shall be due on the first day of every month and
continuing through the Maturity Date. All remaining principal and interest
hereunder shall be due and payable on January 31, 2002.
If any sum payable under this Note is not paid within 10 days
after the date on which it is due, Borrower shall pay a late charge of five
percent (5%) of such unpaid sum.
If this Note or any payment hereunder becomes due on a
Saturday, Sunday or other holiday on which the Bank is authorized to close,
the due date for the Note or payment shall be extended to the next succeeding
business day, but any interest or fees shall be calculated based upon the
actual time of payment.
This Note is freely prepayable in whole or in part at the
option of the Borrower without premium or penalty. Principal prepayments
shall be applied in inverse order of maturity.
This Note shall, at the Bank's option, become immediately due
and payable without presentment, demand, protest, or other notice of any
kind, all of which are hereby expressly waived, upon the happening of any
Event of Default under the Credit Agreement.
This Note is subject to the express condition that at no time
shall Borrower be obligated or required to pay interest on the principal
balance of this Note at a rate which could subject Bank to either civil or
criminal liability as a result of being in excess of the maximum rate which
Borrower is permitted by law to contract or agree to pay. If by the terms
of this Note, Borrower is at any time required or obligated to pay interest
on the principal balance of this Note at a rate in excess of such maximum
rate, the rate of interest under this Note shall be deemed to be immediately
reduced to such maximum rate and interest payable hereunder shall be
computed at such maximum rate and the portion of all prior interest payments
in excess of such maximum rate shall be applied and shall be deemed to have
been payments in reduction of the principal balance of this Note.
The terms of this Note cannot be changed, nor may this Note
be discharged in whole or in part, except by a writing executed by the
holder. In the event that holder demands or accepts partial payments of
this Note, such demand or acceptance shall not be deemed to constitute a
waiver of the right to demand the entire unpaid balance of this Note at any
time in accordance with the terms hereof. Any delay by holder in exercising
any rights hereunder shall not operate as a waiver of such rights.
Bank may set off toward payment of any obligations under this
Note any indebtedness due or to become due from Bank to Borrower and any
moneys or other property of Borrower in possession of Bank at any time.
Borrower on demand shall pay all expenses of Bank, including
without limitation reasonable attorneys' fees, in connection with
enforcement and collection of this Note.
This Note shall be governed by the laws of the State of
New York.
Whenever used, the singular number shall include the plural,
the plural the singular, and the words "Bank" and "Borrower" shall include
their respective successors and assigns.
TRAVEL PORTS OF AMERICA, INC.
By: __________________________
Title: __________________________
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<FISCAL-YEAR-END> APR-04-1997
<PERIOD-END> JAN-31-1997
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<RECEIVABLES> 5,510,232
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0
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