Laidlaw Transportation, Inc. and Subsidiaries - Page 22

                                        - 22 -                                        
          pay LTI interest quarterly at a rate equal to ABN Bank's U.S.               
          prime rate plus 2 percent.                                                  
               On October 14, 1986, LWSI bought all of the stock of GSX               
          from GSX's parent for $349,812,613.  On October 14, 1986, the GSX           
          purchase escrow disbursed $349,812,613 to GSX's parent and gave             
          the three LWSI promissory notes to LTI.  After the GSX sale, LTI            
          owed LTL $349,812,613 (which was unsecured) with interest at a              
          rate equal to the U.S. prime rate.                                          
               On October 20, 1986, LWSI's $124,812,613 promissory note was           
          assigned to LTL, then to Transit, then to LIL, and then to LIIBV.           
          In exchange for this assignment, LIIBV executed a promissory note           
          to LIL for an interest-free loan from LIL in the same amount as             
          the assigned note.  On November 10, 1986, LWSI's $125 million               
          promissory note was assigned to LIIBV.  Haworth and Cairns signed           
          the documents through which the notes were assigned.                        
               On December 10, 1986, LWSI told LIIBV that LWSI could not              
          lower its debt to equity ratios to a level acceptable to ABN Bank           
          by issuing equity.  This was partly because the equity market was           
          weak at that time.                                                          
               LIIBV transferred to LWSI $21 million on February 18, 1987,            
          and $79 million on June 15, 1987.  LWSI used these funds to repay           
          LTI for the $100 million promissory note.                                   
               Initially LTL, and later LIIBV, financed LWSI's acquisition            
          of GSX.  As part of that initial financing LTL and LIIBV required           
          LWSI to pay interest at a rate of 10.5 percent on the amount                

Page:  Previous  12  13  14  15  16  17  18  19  20  21  22  23  24  25  26  27  28  29  30  31  Next

Last modified: May 25, 2011