Laidlaw Transportation, Inc. and Subsidiaries - Page 50

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          Tree with Tree's assets.  Tree agreed to maintain minimum                   
          leverage ratios, current ratios, and interest coverage ratios19             
          and to meet minimum cash-flow requirements.                                 
          J.   Comparison of Terms Governing Advances from LIIBV and Bank             
               Loans                                                                  
               1.   Similarities Between Bank Loans and LIIBV Advances                
               The bank loans and LIIBV advances for the years in issue               
          were in writing.  All were for general corporate purposes or                
          acquisition of other businesses.  All had some representations              
          and warranties to the bank or LIIBV about financial conditions of           
          the recipient.  All required corporate existence and authority,             
          punctual payments, some type of periodic reporting, and notice of           
          default.  All imposed limitations on further encumbering any                
          security.  All treated nonpayment, incorrect or false                       
          representations, noncompliance with material terms and                      
          conditions, insolvency or bankruptcy, and other similar events as           
          a default.  Most had cross-default clauses and acceleration                 
          clauses.  Most were guaranteed by a parent.  All allowed                    
          prepayment without penalty.                                                 
               2.   Differences Between Bank Loans and LIIBV Advances                 
               Bank loans always had borrowing limits.  The LIIBV advances            
          were generally not limited.  Banks lent less than LIIBV advanced.           


               19 Interest coverage ratios relate the financial charges of            
          a firm to its ability to service them.  An interest coverage                
          ratio is earnings before interest and taxes net of non-cash                 
          expenses such as depreciation and amortization (EBITDA) divided             
          by interest expense.  This ratio is one measure of a company's              
          ability to pay interest.                                                    



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