Laidlaw Transportation, Inc. and Subsidiaries - Page 23

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          LIIBV advanced to it.  LII's directors, including Ferrill,                  
          approved the intercompany financing to buy GSX because the rates            
          and terms were more favorable to LII than those from commercial             
          lenders.  On July 7, 1987, LII and LWSI signed a new loan                   
          agreement with LIIBV.  It included balances from previous                   
          advances and kept the 10.5 percent interest rate.                           
               LTL repaid its loan from TDB relating to the GSX acquisition           
          primarily with money that LTL raised in equity markets.                     
               2.   Result of the GSX Purchase                                        
               The GSX purchase made LII the third largest solid waste                
          services business in the United States and the second or third              
          largest provider of hazardous waste disposal services in the                
          United States.                                                              
               LII's credit lines from commercial lenders limited LII's               
          debt to equity ratio to no more than 2 to 1.  As a result, LII's            
          debt under these lines of credit could not exceed $247.8 million.           
          LII's debt after the GSX acquisition was $491.1 million.  If                
          LII's debt to equity ratio exceeded 2 to 1, it would be required            
          to renegotiate its commercial loans.  The debt from the GSX                 
          acquisition made it harder for LII to meet the financial ratio              
          requirements established by credit agreements with its commercial           
          lenders.  Before acquiring GSX, LII's debt to equity ratio (based           
          on book value) was less than 1 to 1; after the acquisition, it              
          was almost 3.1 to 1.  LII's primary competitors in the U.S. solid           
          waste services industry had debt to equity ratios below 2 to 1.             

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