<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 1, 1997
REGISTRATION NO. 333-25205
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
------------------------
APPLE SOUTH, INC.
APPLE SOUTH FINANCING I
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
GEORGIA 59-2778983
DELAWARE [ ]
(State or other jurisdiction of incorporation or
organization) (I.R.S. Employer Identification Number)
</TABLE>
HANCOCK AT WASHINGTON
MADISON, GEORGIA 30650
(706) 342-4552
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
ERICH J. BOOTH
TREASURER AND CHIEF FINANCIAL OFFICER
APPLE SOUTH, INC.
HANCOCK AT WASHINGTON
MADISON, GEORGIA 30650
(706) 342-4552
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------------
Copies to:
LARRY D. LEDBETTER
KILPATRICK STOCKTON LLP
1100 PEACHTREE STREET, SUITE 2800
ATLANTA, GEORGIA 30309
(404)815-6500
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: AS SOON AS
PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
- ----------
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
- ----------
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------
THE COMPANY HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE COMPANY SHALL FILE A
FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
The following documents are filed as exhibits to this Registration
Statement:
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT DESCRIPTION
- ----------- ---------------------------------------------------------------------------------------------------
<C> <S>
4.1* Trust Agreement of Apple South Financing I, dated as of February 18, 1997, among Apple South, Inc.,
First Union National Bank of Georgia, First Union Bank of Delaware and Lansing S. Patterson
4.2* Amended and Restated Declaration of Trust of Apple South Financing I, dated as of March 11, 1997,
among Apple South, Inc., as Sponsor, First Union National Bank of Georgia, as Institutional
Trustee, First Union Bank of Delaware, as Delaware Trustee, and the Regular Trustees named therein
4.3* Indenture for the 7% Convertible Subordinated Debentures, dated as of March 6, 1997, between Apple
South, Inc. and First Union National Bank of Georgia, as Trustee
4.4* Form of $3.50 Term Convertible Security, Series A (included in Exhibit 4.2)
4.5* Form of 7% Convertible Subordinated Debenture (included in Exhibit 4.3)
4.6 Preferred Securities Guarantee Agreement, dated as of March 11, 1997, between Apple South, Inc., as
Guarantor, and First Union National Bank of Georgia, as Preferred Guarantee Trustee
4.7* Registration Rights Agreement, dated as of March 11, 1997, among Apple South, Inc., Apple South
Financing I, J.P. Morgan Securities Inc., and Smith Barney Inc.
5.1** Opinion of Richards, Layton & Finger as to the legality of the $3.50 Term Convertible Securities,
Series A, being registered
5.2** Opinion of Kilpatrick Stockton LLP as to the legality of the 7% Convertible Subordinated
Debentures, the Common Stock and the Guarantee being registered
8.1** Opinion of Kilpatrick Stockton LLP relating to certain tax matters
12.1** Calculation of Ratio of Earnings to Fixed Charges
23.1** Consent of Richards, Layton & Finger (contained in Exhibit 5.1)
23.2** Consent of Kilpatrick Stockton LLP (contained in Exhibit 5.2)
23.3* Consent of KPMG Peat Marwick LLP
24.1* Power of Attorney (set forth on signature page to the Registration Statement)
25.1* Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of First
Union National Bank of Georgia, as Institutional Trustee under the Amended and Restated Declaration
of Trust
25.2* Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of First
Union National Bank of Georgia, as Trustee under the Indenture for the 7% Convertible Subordinated
Debentures
25.3* Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of First
Union National Bank of Georgia, as Preferred Guarantee Trustee under the Preferred Securities
Guarantee Agreement
27.1* Financial Data Schedule
</TABLE>
- ------------------------
* Previously filed
** To be filed by amendment
II-1
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Trust
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Madison, State of Georgia, on April 24, 1997.
APPLE SOUTH FINANCING I
By: /s/ JOHN G. MCLEOD, JR.
--------------------------------------
John G. McLeod, Jr., Regular Trustee
By: /s/ ERICH J. BOOTH
--------------------------------------
Erich J. Booth, Regular Trustee
By: /s/ LANSING S. PATTERSON
--------------------------------------
Lansing S. Patterson, Regular Trustee
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Madison, State of Georgia, on April 24, 1997.
APPLE SOUTH, INC.
By: /s/ TOM E. DUPREE, JR.
--------------------------------------
Tom E. DuPree, Jr.
Chief Executive Officer and
Chairman of the Board of Directors
II-2
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------------- ---------------------------------------- ----------------
<C> <S> <C>
/s/ TOM E. DUPREE, JR. Chairman of the Board of Directors and April 24, 1997
---------------------------------------- Chief Executive Officer (principal
Tom E. DuPree, Jr. executive officer)
/s/ JOHN G. MCLEOD, JR. Director April 24, 1997
----------------------------------------
John G. McLeod, Jr.
* Director April 24, 1997
----------------------------------------
David P. Frazier
* Director April 24, 1997
----------------------------------------
Marc D. Redus
* Director April 24, 1997
----------------------------------------
Thomas R. Williams
* Director April 24, 1997
----------------------------------------
James W. Rowe
* Director April 24, 1997
----------------------------------------
Ruth G. Shaw
* Director April 24, 1997
----------------------------------------
John L. Moorhead
/s/ ERICH J. BOOTH Chief Financial Officer and Treasurer April 24, 1997
---------------------------------------- (Principal Financial Officer and
Erich J. Booth Principal Accounting Officer)
</TABLE>
- ------------------------
* Pursuant to a power of attorney previously filed.
II-3
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT DESCRIPTION PAGE
- ----------- ------------------------------------------------------------------------------------------ -----
<C> <S> <C>
4.1* Trust Agreement of Apple South Financing I, dated as of February 18, 1997, among Apple
South, Inc., First Union National Bank of Georgia, First Union Bank of Delaware and
Lansing S. Patterson
4.2* Amended and Restated Declaration of Trust of Apple South Financing I, dated as of March
11, 1997, among Apple South, Inc., as Sponsor, First Union National Bank of Georgia, as
Institutional Trustee, First Union Bank of Delaware, as Delaware Trustee, and the Regular
Trustees named therein
4.3* Indenture for the 7% Convertible Subordinated Debentures, dated as of March 6, 1997,
between Apple South, Inc. and First Union National Bank of Georgia, as Trustee
4.4* Form of $3.50 Term Convertible Security, Series A (included in Exhibit 4.2)
4.5* Form of 7% Convertible Subordinated Debenture (included in Exhibit 4.3)
4.6 Preferred Securities Guarantee Agreement, dated as of March 11, 1997, between Apple South,
Inc., as Guarantor, and First Union National Bank of Georgia, as Preferred Guarantee
Trustee
4.7* Registration Rights Agreement, dated as of March 11, 1997, among Apple South, Inc., Apple
South Financing I, J.P. Morgan Securities Inc., and Smith Barney Inc.
5.1** Opinion of Richards, Layton & Finger as to the legality of the $3.50 Term Convertible
Securities, Series A, being registered
5.2** Opinion of Kilpatrick Stockton LLP as to the legality of the 7% Convertible Subordinated
Debentures, the Common Stock and the Guarantee being registered
8.1** Opinion of Kilpatrick Stockton LLP relating to certain tax matters
12.1** Calculation of Ratio of Earnings to Fixed Charges
23.1** Consent of Richards, Layton & Finger (contained in Exhibit 5.1)
23.2** Consent of Kilpatrick Stockton LLP (contained in Exhibit 5.2)
23.3* Consent of KPMG Peat Marwick LLP
24.1* Power of Attorney (set forth on signature page to the Registration Statement)
25.1* Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939
of First Union National Bank of Georgia, as Institutional Trustee under the Amended and
Restated Declaration of Trust
25.2* Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939
of First Union National Bank of Georgia, as Trustee under the Indenture for the 7%
Convertible Subordinated Debentures
25.3* Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939
of First Union National Bank of Georgia, as Preferred Guarantee Trustee under the
Preferred Securities Guarantee Agreement
27.1* Financial Data Schedule
</TABLE>
- ------------------------
* Previously filed
** To be filed by amendment
<PAGE>
Exhibit 4.6
==========================================
PREFERRED SECURITIES GUARANTEE AGREEMENT
Apple South Financing I
Dated as of March 11, 1997
==========================================
<PAGE>
CROSS REFERENCE TABLE*
Certain Sections of the Guarantee Relating to
Sections 310 Through 318(a), Inclusive, of the
Trust Indenture Act of 1939
SECTION OF TRUST INDENTURE ACT SECTION OF GUARANTEE
- ------------------------------ --------------------
310(a) 4.01
310(b) 4.01
310(c) Not Applicable
311(a) 2.02
311(b) 2.02
311(c) Not Applicable
312(a) 2.02
312(b) 2.02
312(c) Not Applicable
313 2.03
314(a) 2.04
314(b) Not Applicable
314(c) 2.05
314(d) Not Applicable
314(e) 3.02
314(f) Not Applicable
315(a) 3.02
8.01
315(b) 2.07
315(c) 3.01
315(d) 3.01
315(e) 2.01
316(a) 2.06
316(b) 2.01
316(c) 2.01
317(a) 2.01
317(b) 2.01
318(a) 2.01
* This Cross Reference Table does not, for any purpose, constitute part of
the Guarantee and shall not affect the interpretation of any of its terms
or provisions.
<PAGE>
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS AND INTERPRETATION. . . . . . . . . . . . . . . . . . 2
SECTION 1.1. DEFINITIONS AND INTERPRETATION . . . . . . . . . . . . . . 2
ARTICLE 2 TRUST INDENTURE ACT . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.1. TRUST INDENTURE ACT; APPLICATION . . . . . . . . . . . . . 4
SECTION 2.2. LISTS OF HOLDERS OF SECURITIES . . . . . . . . . . . . . . 4
SECTION 2.3. REPORTS BY THE PREFERRED GUARANTEE TRUSTEE . . . . . . . . 5
SECTION 2.4. PERIODIC REPORTS TO PREFERRED GUARANTEE TRUSTEE . . . . . . 5
SECTION 2.5. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT . . . . . 5
SECTION 2.6. EVENTS OF DEFAULT; WAIVER . . . . . . . . . . . . . . . . . 5
SECTION 2.7. EVENT OF DEFAULT; NOTICE . . . . . . . . . . . . . . . . . 6
SECTION 2.8. CONFLICTING INTERESTS . . . . . . . . . . . . . . . . . . . 6
ARTICLE 3 POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE . . . . . 6
SECTION 3.1. POWERS AND DUTIES OF THE PREFERRED GUARANTEE TRUSTEE . . . 6
SECTION 3.2. CERTAIN RIGHTS OF PREFERRED GUARANTEE TRUSTEE . . . . . . . 8
SECTION 3.3. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF PREFERRED
SECURITIES GUARANTEE . . . . . . . . . . . . . . . . . . . 11
ARTICLE 4 PREFERRED GUARANTEE TRUSTEE. . . . . . . . . . . . . . . . . . . . 11
SECTION 4.1. PREFERRED GUARANTEE TRUSTEE; ELIGIBILITY . . . . . . . . . 11
SECTION 4.2. APPOINTMENT, REMOVAL AND RESIGNATION OF PREFERRED
GUARANTEE TRUSTEE . . . . . . . . . . . . . . . . . . . . 12
ARTICLE 5 GUARANTEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 5.1. GUARANTEE . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 5.2. WAIVER OF NOTICE AND DEMAND . . . . . . . . . . . . . . . . 13
SECTION 5.3. OBLIGATIONS NOT AFFECTED . . . . . . . . . . . . . . . . . 13
SECTION 5.4. RIGHTS OF HOLDERS . . . . . . . . . . . . . . . . . . . . . 14
SECTION 5.5. GUARANTEE OF PAYMENT . . . . . . . . . . . . . . . . . . . 14
SECTION 5.6. SUBROGATION . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 5.7. INDEPENDENT OBLIGATIONS . . . . . . . . . . . . . . . . . . 15
ARTICLE 6 LIMITATION OF TRANSACTIONS; SUBORDINATION . . . . . . . . . . . . 15
SECTION 6.1. LIMITATION OF TRANSACTIONS. . . . . . . . . . . . . . . . . 15
SECTION 6.2. RANKING . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE 7 TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 7.1. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE 8 INDEMNIFICATION.. . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 8.1. EXCULPATI. . .. . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 8.2. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE 9 MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 9.1. SUCCESSORS AND ASSIGNS. . . . . . . . . . . . . . . . . . . 17
SECTION 9.2. AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 9.3. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 9.4. BENEFIT . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 9.5. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . 19
i
<PAGE>
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3)
OR (7) UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR") OR
(C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS TECONS IN AN OFFSHORE
TRANSACTION, (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL
ISSUANCE OF THIS SECURITY, RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT
(A) TO APPLE SOUTH OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO
A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED
INVESTOR THAT, BEFORE SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THIS SECURITY (THE FORM OF WHICH LETTER CAN BE
OBTAINED FROM THE TRUSTEE) AND IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE
PRINCIPAL AMOUNT OF SECURITIES LESS THAN $250,000, AN OPINION OF COUNSEL
ACCEPTABLE TO THE TRUST THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT, (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM
THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN TWO YEARS
AFTER THE ORIGINAL ISSUANCE OF THE SECURITY, THE TRANSFEROR MUST CHECK THE
APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF
SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE INSTITUTIONAL TRUSTEE. IF
THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE
TRANSFEROR MUST, BEFORE SUCH TRANSFER, FURNISH TO THE INSTITUTIONAL TRUSTEE
AND THE TRUST SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS
EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING
MADE, PURSUANT TO AN EXEMPTION FROM OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS
<PAGE>
OF THE SECURITIES ACT. THE TRUST AGREEMENT CONTAINS A PROVISION REQUIRING
THE INSTITUTIONAL TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS SECURITY
IN VIOLATION OF THE FOREGOING RESTRICTIONS. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
<PAGE>
PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"), dated as
of September 20, 1996, is executed and delivered by Apple South, Inc., a
Georgia corporation (the "Guarantor"), and First Union National Bank of
Georgia, as trustee (the "Preferred Guarantee Trustee"), for the benefit of
the Holders (as defined herein) from time to time of the Trust Preferred
Securities (as defined herein) of Apple South Financing I, a Delaware
statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of March 11, 1997, among the trustees of the Issuer
named therein, the Guarantor, as sponsor, and the holders from time to time
of undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing on the date hereof 2,000,000 preferred securities, having an
aggregate liquidation amount of $100,000,000 designated the $3.50 Term
Convertible Securities, Series A (the "Trust Preferred Securities").
WHEREAS, pursuant to the Declaration, the Issuer may issue 300,000
additional Trust Preferred Securities having an aggregate liquidation amount
of $15,000,000.
WHEREAS, as incentive for the Holders to purchase the Trust Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree,
to the extent set forth in this Preferred Securities Guarantee, to pay to the
Holders of the Trust Preferred Securities the Guarantee Payments (as defined
herein) and to make certain other payments on the terms and conditions set
forth herein.
WHEREAS, as of the date hereof, the Guarantor is also executing and
delivering a guarantee agreement (the "Common Securities Guarantee") in
substantially identical terms to this Preferred Securities Guarantee for the
benefit of the holders of the Common Securities (as defined herein), except
that if an Event of Default under the Indenture (as defined in the Indenture,
an "Indenture Event of Default"), has occurred and is continuing, the rights
of holders of the Common Securities to receive Guarantee Payments under the
Common Securities Guarantee are subordinated to the rights of Holders of
Trust Preferred Securities to receive Guarantee Payments under this Preferred
Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of Trust
Preferred Securities, which purchase the Guarantor hereby agrees shall
benefit the Guarantor, the Guarantor executes and delivers this Preferred
Securities Guarantee for the benefit of such Holders.
ARTICLE 1
DEFINITIONS AND INTERPRETATION
<PAGE>
SECTION 1.1. DEFINITIONS AND INTERPRETATION.
In this Preferred Securities Guarantee, unless the context otherwise
requires:
(a) capitalized terms used in this Preferred Securities Guarantee but not
defined in the preamble above have the respective meanings assigned to
them in this Section 1.01;
(b) terms defined in the Declaration as at the date of execution of this
Preferred Securities Guarantee have the same meaning when used in this
Preferred Securities Guarantee unless otherwise defined in this
Preferred Securities Guarantee;
(c) a term defined anywhere in this Preferred Securities Guarantee has the
same meaning throughout;
(d) all references to "the Preferred Securities Guarantee" or "this
Preferred Securities Guarantee" are to this Preferred Securities
Guarantee as modified, supplemented or amended from time to time;
(e) all references in this Preferred Securities Guarantee to Articles and
Sections are to Articles and Sections of this Preferred Securities
Guarantee, unless otherwise specified;
(f) a term defined in the Trust Indenture Act has the same meaning when
used in this Preferred Securities Guarantee, unless otherwise defined
in this Preferred Securities Guarantee or unless the context otherwise
requires; and
(g) a reference to the singular includes the plural and vice versa.
"AUTHORIZED OFFICER" of a Person means any Person that is authorized to
bind such Person PROVIDED, HOWEVER, that the Authorized Officer signing an
Officers' Certificate given pursuant to Section 314(a)(4) of the Trust
Indenture Act shall be the principal executive, financial or accounting
officer of such Person.
"CORPORATE TRUST OFFICE" means the office of the Preferred Guarantee
Trustee at which the corporate trust business of the Preferred Guarantee Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Agreement is located at 999 Peachtree Street, N.E.,
Suite 1100, Atlanta, Georgia 30309, Attn: Corporate Trust Administration.
"COVERED PERSON" means any Holder or beneficial owner of Trust Preferred
Securities.
"EVENT OF DEFAULT" means a default by the Guarantor on any of its payment
or other obligations under this Preferred Securities Guarantee.
2
<PAGE>
"GUARANTEE PAYMENTS" means the following payments or distributions,
without duplication, with respect to the Trust Preferred Securities, to the
extent not paid or made by the Issuer: (i) any accumulated and unpaid
Distributions that are required to be paid on such Trust Preferred Securities
to the extent the Issuer shall have funds available therefor, (ii) the
redemption price (the "Redemption Price"), and all accumulated and unpaid
Distributions to the date of redemption to the extent the Issuer has funds
available therefor with respect to any Trust Preferred Securities called for
redemption by the Issuer and (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of the Issuer (other than in
connection with the conversion of all of the Trust Securities into the
Guarantor's common stock or the distribution of Debentures to the Holders),
the lesser of (a) the aggregate of the liquidation amount and all accumulated
and unpaid Distributions on the Trust Preferred Securities to the date of
payment, to the extent the Issuer shall have funds available therefor, and
(b) the amount of assets of the Issuer remaining available for distribution
to Holders in liquidation of the Issuer (in either case, the "Liquidation
Distribution"). If an Indenture Event of Default has occurred and is
continuing, the rights of holders of the Common Securities to receive
payments under the Common Securities Guarantee Agreement are subordinated to
the rights of Holders of Trust Preferred Securities to receive Guarantee
Payments.
"HOLDER" shall mean any holder, as registered on the books and records of
the Issuer of any Trust Preferred Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Trust
Preferred Securities have given any request, notice, consent or waiver
hereunder, "Holder" shall not include the Guarantor or any Affiliate of the
Guarantor.
"INDEMNIFIED PERSON" means the Preferred Guarantee Trustee, any Affiliate
of the Preferred Guarantee Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives, nominees, custodians or agents
of the Preferred Guarantee Trustee.
"INDENTURE" means the Indenture dated as of March 6, 1997, among the
Guarantor (the "Debenture Issuer") and First Union National Bank of Georgia,
as trustee.
"MAJORITY IN LIQUIDATION AMOUNT OF THE TRUST PREFERRED SECURITIES" means,
except as provided in the terms of the Trust Preferred Securities or, except
as provided by the Trust Indenture Act, a vote by Holders of Trust Preferred
Securities, voting separately as a class, of more than 50% of the liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date
upon which the voting percentages are determined) of all the Trust Preferred
Securities.
"PREFERRED GUARANTEE TRUSTEE" means First Union National Bank of Georgia,
until a Successor Preferred Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Preferred Securities
Guarantee and thereafter means each such Successor Preferred Guarantee
Trustee.
3
<PAGE>
"RESPONSIBLE OFFICER" means, with respect to the Preferred Guarantee
Trustee, any officer within the Corporate Trust Office of the Preferred
Guarantee Trustee, including any vice president, any assistant vice
president, any assistant secretary, the treasurer, any assistant treasurer or
other officer of the Corporate Trust Office of the Preferred Guarantee
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of that officer's knowledge of and familiarity with the particular
subject.
"SUCCESSOR PREFERRED GUARANTEE TRUSTEE" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.01.
"TRUST SECURITIES" means the Common Securities and the Trust Preferred
Securities.
ARTICLE 2
TRUST INDENTURE ACT
SECTION 2.1. TRUST INDENTURE ACT; APPLICATION.
(a) This Preferred Securities Guarantee is subject to the provisions of
the Trust Indenture Act that are required to be part of this Preferred
Securities Guarantee and shall, to the extent applicable, be governed by such
provisions; and
(b) if and to the extent that any provision of this Preferred Securities
Guarantee limits, qualifies or conflicts with the duties imposed by Section 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.2. LISTS OF HOLDERS OF SECURITIES.
(a) The Guarantor shall provide the Preferred Guarantee Trustee with a
list, in such form as the Preferred Guarantee Trustee may reasonably require,
of the names and addresses of the Holders of the Trust Preferred Securities
("List of Holders") as of such date, (i) within 1 Business Day after January
1 and June 30 of each year, and (ii) at any other time within 30 days of
receipt by the Guarantor of a written request for a List of Holders as of a
date no more than 14 days before such List of Holders is given to the
Preferred Guarantee Trustee PROVIDED, that the Guarantor shall not be
obligated to provide such List of Holders at any time the List of Holders
does not differ from the most recent List of Holders given to the Preferred
Guarantee Trustee by the Guarantor. The Preferred Guarantee Trustee may
destroy any List of Holders previously given to it on receipt of a new List
of Holders.
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(b) The Preferred Guarantee Trustee shall comply with its obligations
under Sections 311(a), 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3. REPORTS BY THE PREFERRED GUARANTEE TRUSTEE.
Within 60 days after May 15 of each year, the Preferred Guarantee Trustee
shall provide to the Holders of the Trust Preferred Securities such reports as
are required by Section 313 of the Trust Indenture Act if any, in the form and
in the manner provided by Section 313 of the Trust Indenture Act. The Preferred
Guarantee Trustee shall also comply with the requirements of Section 313(d) of
the Trust Indenture Act.
SECTION 2.4. PERIODIC REPORTS TO PREFERRED GUARANTEE TRUSTEE.
The Guarantor shall provide to the Preferred Guarantee Trustee such
documents, reports and information as are required by Section 314 (if any)
and the compliance certificate required by Section 314 of the Trust Indenture
Act in the form, in the manner and at the times required by Section 314 of
the Trust Indenture Act.
Delivery of such reports, information and documents to the Preferred
Guarantee Trustee is for informational purposes only and the Preferred
Guarantee Trustee's receipt of such shall not constitute constructive notice
of any information contained therein, including the Guarantor's compliance
with any of its covenants hereunder (as to which the Preferred Guarantee
Trustee is entitled to rely exclusively on Officers' Certificates).
SECTION 2.5. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
The Guarantor shall provide to the Preferred Guarantee Trustee such
evidence of compliance with the conditions precedent, if any, provided for in
this Preferred Securities Guarantee that relate to any of the matters set
forth in Section 314(c) of the Trust Indenture Act. Any certificate or
opinion required to be given by an officer pursuant to Section 314(c)(1) may
be given in the form of an Officers' Certificate.
SECTION 2.6. EVENTS OF DEFAULT; WAIVER.
The Holders of a Majority in liquidation amount of the Trust Preferred
Securities may, by vote, on behalf of the Holders of all of the Trust
Preferred Securities, waive any past Event of Default and its consequences.
Upon such waiver, any such Event of Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Preferred Securities Guarantee, but no such waiver
shall extend to any subsequent or other default or Event of Default or impair
any right consequent thereon.
SECTION 2.7. EVENT OF DEFAULT; NOTICE.
(a) The Preferred Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default hereunder, transmit by mail, first class
postage prepaid, to the Holders of
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the Trust Preferred Securities, notices of all Events of Default actually
known to a Responsible Officer of the Preferred Guarantee Trustee, unless
such defaults have been cured before the giving of such notice, provided,
that, the Preferred Guarantee Trustee shall be protected in withholding such
notice if and so long as a Responsible Officer of the Preferred Guarantee
Trustee in good faith determines that the withholding of such notice is in
the interests of the Holders of the Trust Preferred Securities.
(b) The Preferred Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Preferred Guarantee Trustee
shall have received written notice, or of which a Responsible Officer of the
Preferred Guarantee Trustee charged with the administration of the
Declaration shall have obtained actual knowledge.
SECTION 2.8. CONFLICTING INTERESTS.
The Declaration shall be deemed to be specifically described in this
Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE 3
POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE
SECTION 3.1. POWERS AND DUTIES OF THE PREFERRED GUARANTEE TRUSTEE.
(a) This Preferred Securities Guarantee shall be held by the Preferred
Guarantee Trustee for the benefit of the Holders of the Trust Preferred
Securities, and the Preferred Guarantee Trustee shall not transfer this
Preferred Securities Guarantee to any Person except a Holder of Trust
Preferred Securities exercising his or her rights pursuant to Section 5.04(b)
or to a Successor Preferred Guarantee Trustee on acceptance by such Successor
Preferred Guarantee Trustee of its appointment to act as Successor Preferred
Guarantee Trustee. The right, title and interest of the Preferred Guarantee
Trustee shall automatically vest in any Successor Preferred Guarantee
Trustee, and such vesting and cessation of title shall be effective whether
or not conveyancing documents have been executed and delivered pursuant to
the appointment of such Successor Preferred Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer of
the Preferred Guarantee Trustee has occurred and is continuing, the Preferred
Guarantee Trustee shall enforce this Preferred Securities Guarantee for the
benefit of the Holders of the Trust Preferred Securities.
(c) The Preferred Guarantee Trustee, before the occurrence of any Event
of Default hereunder and after the curing or waiving of all Events of Default
that may have
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occurred, shall undertake to perform only such duties as are specifically set
forth in this Preferred Securities Guarantee, and no implied covenants or
obligations shall be read into this Preferred Securities Guarantee against
the Preferred Guarantee Trustee. In case an Event of Default has occurred
(that has not been cured or waived pursuant to Section 2.06) and is actually
known to a Responsible Officer of the Preferred Guarantee Trustee, the
Preferred Guarantee Trustee shall exercise such of the rights and powers
vested in it by this Preferred Securities Guarantee, and shall use the same
degree of care and skill in its exercise thereof as a prudent person would
exercise or use nder the circumstances in the conduct of his or her own
affairs.
(d) No provision of this Preferred Securities Guarantee shall be
construed to relieve the Preferred Guarantee Trustee from liability for its
own action or its own failure to act in accordance with its obligations under
the Trust Indenture Act, or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Preferred Guarantee Trustee
shall be determined solely by the express provisions of this Preferred
Securities Guarantee, and the Preferred Guarantee Trustee shall not be
liable except for the performance of such duties and obligations as are
specifically set forth in this Preferred Securities Guarantee, and no
implied covenants or obligations shall be read into this Preferred
Securities Guarantee against the Preferred Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Preferred
Guarantee Trustee, the Preferred Guarantee Trustee may conclusively rely,
as to the truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished to the
Preferred Guarantee Trustee and conforming to the requirements of this
Preferred Securities Guarantee; but in the case of any such certificates
or opinions that by any provision hereof are specifically required to be
furnished to the Preferred Guarantee Trustee, the Preferred Guarantee
Trustee shall be under a duty to examine the same to determine whether
or not they conform to the requirements of this Preferred Securities
Guarantee;
(ii) the Preferred Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Preferred Guarantee Trustee, unless it shall be proved that the Preferred
Guarantee Trustee was negligent in ascertaining the pertinent facts upon
which such judgment was made;
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(iii) the Preferred Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a Majority in
liquidation amount of the Trust Preferred Securities relating to the time,
method and place of conducting any proceeding for any remedy available to
the Preferred Guarantee Trustee, or exercising any trust or power conferred
upon the Preferred Guarantee Trustee under this Preferred Securities
Guarantee; and
(iv) no provision of this Preferred Securities Guarantee shall
require the Preferred Guarantee Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers, if the
Preferred Guarantee Trustee shall have reasonable grounds for believing
that the repayment of such funds or liability is not reasonably assured to
it under the terms of this Preferred Securities Guarantee or indemnity,
reasonably satisfactory to the Preferred Guarantee Trustee, against such
risk or liability is not reasonably assured to it.
SECTION 3.2. CERTAIN RIGHTS OF PREFERRED GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 3.01:
(i) The Preferred Guarantee Trustee may conclusively rely, and shall
be fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Preferred Securities Guarantee shall be sufficiently evidenced by an
Officers' Certificate.
(iii) Whenever, in the administration of this Preferred Securities
Guarantee, the Preferred Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting any
action hereunder, the Preferred Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith on its
part, request and conclusively rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by the Guarantor.
(iv) The Preferred Guarantee Trustee shall have no duty to see to
any recording, filing or registration of any instrument (or any
rerecording, refiling or reregistration thereof).
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(v) The Preferred Guarantee Trustee may consult with counsel of its
selection, and the advice or opinion of such counsel with respect to legal
matters shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted by it hereunder in good faith and
in accordance with such advice or opinion. Such counsel may be counsel to
the Guarantor or any of its Affiliates and may include any of its
employees. The Preferred Guarantee Trustee shall have the right at any time
to seek instructions concerning the administration of this Preferred
Securities Guarantee from any court of competent jurisdiction.
(vi) The Preferred Guarantee Trustee shall be under no obligation
to exercise any of the rights or powers vested in it by this Preferred
Securities Guarantee at the request or direction of any Holder, unless such
Holder shall have provided to the Preferred Guarantee Trustee such security
and indemnity, reasonably satisfactory to the Preferred Guarantee Trustee,
against the costs, expenses (including attorneys' fees and expenses and the
expenses of the Preferred Guarantee Trustee's agents, nominees or
custodians) and liabilities that might be incurred by it in complying with
such request or direction, including such reasonable advances as may be
requested by the Preferred Guarantee Trustee; provided that, nothing
contained in this Section 3.02(a)(vi) shall be taken to relieve the
Preferred Guarantee Trustee, upon the occurrence of an Event of Default, of
its obligation to act in accordance with the requirements of the Trust
Indenture Act.
(vii) The Preferred Guarantee Trustee shall not be bound to make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Preferred Guarantee
Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit.
(viii) The Preferred Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly
or by or through agents, nominees, custodians or attorneys, and the
Preferred Guarantee Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder.
(ix) Any action taken by the Preferred Guarantee Trustee or its
agents hereunder shall bind the Holders of the Trust Preferred Securities,
and the signature of the Preferred Guarantee Trustee or its agents alone
shall be sufficient and effective to perform any such action. No third
party shall be required to inquire as to the authority of the Preferred
Guarantee Trustee to so act or as to its compliance with any of the terms
and provisions of this Preferred Securities Guarantee, both of which shall
be conclusively evidenced by the Preferred Guarantee Trustee's or its
agent's taking such action.
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(x) Whenever in the administration of this Preferred Securities
Guarantee the Preferred Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or right or
taking any other action hereunder, the Preferred Guarantee Trustee (i) may
request instructions from the Holders of a Majority in liquidation amount
of the Trust Preferred Securities, (ii) may refrain from enforcing such
remedy or right or taking such other action until such instructions are
received, and (iii) shall be protected in conclusively relying on or acting
in accordance with such instructions.
(xi) The Preferred Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly
or by or through agents or attorneys and the Preferred Guarantee Trustee
shall not be responsible for any misconduct or negligence on the part of
any agent or attorney appointed with due care by it hereunder.
(xii) The Preferred Guarantee Trustee shall not be liable for any
action taken, suffered, or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Preferred Securities Guarantee.
(b) No provision of this Preferred Securities Guarantee shall be deemed
to impose any duty or obligation on the Preferred Guarantee Trustee to
perform any act or acts or exercise any right, power, duty or obligation
conferred or imposed on it in any jurisdiction in which it shall be illegal,
or in which the Preferred Guarantee Trustee shall be unqualified or
incompetent in accordance with applicable law, to perform any such act or
acts or to exercise any such right, power, duty or obligation. No permissive
power or authority available to the Preferred Guarantee Trustee shall be
construed to be a duty.
SECTION 3.3. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF PREFERRED
SECURITIES GUARANTEE.
The recitals contained in this Preferred Securities Guarantee shall be
taken as the statements of the Guarantor, and the Preferred Guarantee Trustee
does not assume any responsibility for their correctness. The Preferred
Guarantee Trustee makes no representation as to the validity or sufficiency
of this Preferred Securities Guarantee.
ARTICLE 4
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1. PREFERRED GUARANTEE TRUSTEE; ELIGIBILITY.
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(a) There shall at all times be a Preferred Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation or bank organized and doing business under
the laws of the United States of America or any State or Territory thereof
or of the District of Columbia, or a corporation or bank permitted by the
Securities and Exchange Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least 50 million
U.S. dollars ($50,000,000), and subject to supervision or examination by
federal, state, territorial or District of Columbia authority. If such
corporation or bank publishes reports of condition at least annually,
pursuant to law or to the requirements of the supervising or examining
authority referred to above, then for the purposes of this Section
4.01(a)(ii), the combined capital and surplus of such corporation or bank
shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published.
(b) If at any time the Preferred Guarantee Trustee shall cease to be
eligible to so act under Section 4.01(a), the Preferred Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.02(c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 4.2. APPOINTMENT, REMOVAL AND RESIGNATION OF PREFERRED GUARANTEE
TRUSTEE.
(a) Subject to Section 4.02(b), the Preferred Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed in accordance
with Section 4.02(a) until a Successor Preferred Guarantee Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor Preferred Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall hold office
until a Successor Preferred Guarantee Trustee shall have been appointed or until
its removal or resignation. The Preferred Guarantee Trustee may resign from
office (without need for prior or subsequent accounting) by an instrument in
writing executed by the Preferred Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Preferred
Guarantee Trustee has been appointed and has accepted such
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appointment by instrument in writing executed by such Successor Preferred
Guarantee Trustee and delivered to the Guarantor and the resigning Preferred
Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have been appointed
and accepted appointment as provided in this Section 4.02 within 30 days after
delivery of an instrument of resignation or removal, the Preferred Guarantee
Trustee resigning or being removed may petition any court of competent
jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Preferred Guarantee Trustee.
(e) No Preferred Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Preferred Guarantee Trustee.
(f) Upon termination of this Preferred Securities Guarantee or removal or
resignation of the Preferred Guarantee Trustee pursuant to this Section 4.02,
the Guarantor shall pay to the Preferred Guarantee Trustee all amounts accrued
to the date of such termination, removal or resignation.
ARTICLE 5
GUARANTEE
SECTION 5.1. GUARANTEE.
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Preferred Guarantee Trustee for the benefit of the Holders the Guarantee
Payments (except to the extent paid by the Issuer), as and when due,
regardless of any defense, right of set-off or counterclaim that the Issuer
may have or assert. The Guarantor's obligation to make a Guarantee Payment
may be satisfied by direct payment of the required amounts by the Guarantor
to the Holders of the Trust Preferred Securities or by causing the Issuer to
pay such amounts to such Holders.
SECTION 5.2. WAIVER OF NOTICE AND DEMAND.
The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first
against the Issuer or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 5.3. OBLIGATIONS NOT AFFECTED.
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The obligations, covenants, agreements and duties of the Guarantor under
this Preferred Securities Guarantee shall in no way be affected or impaired
by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Trust Preferred
Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or
any other sums payable under the terms of the Trust Preferred Securities or
the extension of time for the performance of any other obligation under,
arising out of, or in connection with, the Trust Preferred Securities
(other than an extension of time for payment of Distributions, Redemption
Price, Liquidation Distribution or other sum payable that results from the
extension of any interest payment period on the Debentures);
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders pursuant to the terms of the Trust
Preferred Securities, or any action on the part of the Issuer or the
Guarantor granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the Issuer
or the Guarantor or any of the assets of the Issuer or the Guarantor;
(e) any invalidity of, or defect or deficiency in, the Trust
Preferred Securities;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor, it being the
intent of this Section 5.03 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the foregoing.
SECTION 5.4. RIGHTS OF HOLDERS.
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(a) The Holders of a Majority in liquidation amount of the Trust Preferred
Securities have the right to direct the time, method and place of conducting of
any proceeding for any remedy available to the Preferred Guarantee Trustee in
respect of this Preferred Securities Guarantee or exercising any trust or power
conferred upon the Preferred Guarantee Trustee under this Preferred Securities
Guarantee.
(b) If the Preferred Guarantee Trustee fails to enforce such Preferred
Securities Guarantee, any Holder of Trust Preferred Securities may institute a
legal proceeding directly against the Guarantor to enforce the Preferred
Guarantee Trustee's rights under this Preferred Securities Guarantee, without
first instituting a legal proceeding against the Issuer, the Preferred Guarantee
Trustee or any other person or entity. The Guarantor waives any right or remedy
to require that any action be brought first against the Issuer or any other
person or entity before proceeding directly against the Guarantor.
SECTION 5.5. GUARANTEE OF PAYMENT.
This Preferred Securities Guarantee creates a guarantee of payment and not
of collection.
SECTION 5.6. SUBROGATION.
The Guarantor shall be subrogated to all (if any) rights of the Holders
of Trust Preferred Securities against the Issuer in respect of any amounts
paid to such Holders by the Guarantor under this Preferred Securities
Guarantee; provided, however, that the Guarantor shall not (except to the
extent required by mandatory provisions of law) be entitled to enforce or
exercise any right that it may acquire by way of subrogation or any
indemnity, reimbursement or other agreement, in all cases as a result of
payment under this Preferred Securities Guarantee, if, at the time of any
such payment, any amounts are due and unpaid under this Preferred Securities
Guarantee. If any amount shall be paid to the Guarantor in violation of the
preceding sentence, the Guarantor agrees to hold such amount in trust for the
Holders and to pay over such amount to the Holders.
SECTION 5.7. INDEPENDENT OBLIGATIONS.
The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Issuer with respect to the Trust Preferred Securities,
and that the Guarantor shall be liable as principal and as debtor hereunder to
make Guarantee Payments pursuant to the terms of this Preferred Securities
Guarantee notwithstanding the occurrence of any event referred to in subsections
(a) through (g), inclusive, of Section 5.03 hereof.
ARTICLE 6
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LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1. LIMITATION OF TRANSACTIONS.
So long as any Trust Preferred Securities remain outstanding, if there
shall have occurred an Event of Default or an event of default under the
Declaration, then (a) the Guarantor shall not declare or pay any dividend on,
make any distributions with respect to, or redeem, purchase, acquire or make
a liquidation payment with respect to, any of its capital stock (other than
(i) purchases or acquisitions of shares of Common Stock in connection with
the satisfaction by the Guarantor of its obligations under any employee
benefit plans, (ii) as a result of a reclassification of the Guarantor's
capital stock or the exchange or conversion of one class or series of the
Guarantor's capital stock for another class or series of the Guarantor's
capital stock or (iii) the purchase of fractional interests in shares of the
Guarantor's capital stock pursuant to the conversion or exchange provisions
of such capital stock of the Guarantor or the security being converted or
exchanged) or make any guarantee payments with respect to the foregoing, (b)
the Guarantor shall not make any payment of interest, principal or premium,
if any, on or repay, repurchase or redeem any debt securities (including
guarantees) issued by the Guarantor which rank PARI PASSU with or junior to
the Debentures and (c) the Guarantor shall not make any guarantee payments
with respect to the foregoing (other than pursuant to this guarantee).
SECTION 6.2. RANKING.
This Preferred Securities Guarantee will constitute an unsecured obligation
of the Guarantor and will rank (i) subordinate and junior in right of payment to
all other liabilities of the Guarantor, (ii) PARI PASSU with the most senior
Preferred or preference stock now or hereafter issued by the Guarantor and with
any guarantee now or hereafter entered into by the Guarantor in respect of any
Preferred or preference stock of any Affiliate of the Guarantor, and
(iii) senior to the Guarantor's common stock.
ARTICLE 7
TERMINATION
SECTION 7.1. TERMINATION.
This Preferred Securities Guarantee shall terminate upon (i) full payment
of the Redemption Price of all Trust Preferred Securities, (ii) upon the
distribution of the Guarantor's common stock to all of the Holders in respect
of the conversion of the Trust Preferred Securities into the Guarantor's
common stock or upon the distribution of the Debentures to the Holders of all
of the Trust Preferred Securities or (iii) upon full payment of the amounts
payable in accordance with the Declaration upon liquidation of the Issuer.
Notwithstanding the foregoing, this Preferred Securities Guarantee will
continue to be effective or will be
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reinstated, as the case may be, if at any time any Holder of Trust
Preferred Securities must restore payment of any sums paid under the Trust
Preferred Securities or under this Preferred Securities Guarantee.
ARTICLE 8
INDEMNIFICATION
SECTION 8.1. EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Guarantor or any Covered Person for any loss,
damage, liability, expense or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith in accordance
with this Preferred Securities Guarantee and in a manner that such
Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Preferred Securities
Guarantee or by law, except that an Indemnified Person shall be liable for
any such loss, damage or claim incurred by reason of such Indemnified
Person's failure to act in accordance with its obligations under the Trust
Indenture Act or willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters
the Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable
care by or on behalf of the Guarantor, including information, opinions,
reports or statements as to the value and amount of the assets, liabilities,
profits, losses, or any other facts pertinent to the existence and amount of
assets from which Distributions to Holders of Trust Preferred Securities
might properly be paid.
SECTION 8.2. INDEMNIFICATION.
The Guarantor agrees to indemnify each Indemnified Person for, and to hold
each Indemnified Person harmless against, any loss, liability or expense
incurred arising out of or in connection with the acceptance or administration
of the trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against, or
investigating, any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder; PROVIDED that the
provisions of this sentence shall not apply unless such Indemnified Person has
complied with the requirements of the Trust Indenture Act and has acted in good
faith. The obligation to indemnify as set forth in this Section 8.02 shall
survive the termination of this Preferred Securities Guarantee.
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When the Preferred Guarantee Trustee incurs expenses or renders services
in connection with an Event of Default specified in Section 4.01(e), (f) or
(g) of the Indenture, the expenses (including the reasonable charges and
expenses of its counsel) and the compensation for services are intended to
constitute expenses of administration under any applicable federal or state
bankruptcy, insolvency or other similar law.
The Trustee agrees to use its best efforts to provide the Guarantor
prompt, written notification of any of the aforementioned losses, damage,
liabilities, expenses or claims (hereinafter "Claims") and to cooperate with
each Indemnified Person in the investigation, defense and settlement of any
such Claim. The Guarantor shall have the right to assume the investigation,
defense and settlement of any such Claim and to employ such legal counsel as
the Guarantor deems acceptable. The indemnity obligations set forth in
Article 8 shall be void as to any Claim for which settlement or offer of
settlement is made without the prior, written consent of the Guarantor.
ARTICLE 9
MISCELLANEOUS
SECTION 9.1. SUCCESSORS AND ASSIGNS.
All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Trust Preferred Securities then outstanding.
SECTION 9.2. AMENDMENTS.
Except with respect to any changes that do not adversely affect the
rights of Holders (in which case no consent of Holders will be required),
this Preferred Securities Guarantee may only be amended with the prior
approval of the Holders of at least a Majority in liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accumulated and unpaid Distributions to the date upon which
the voting percentages are determined) of all the outstanding Trust Preferred
Securities. The provisions of Section 12.02 of the Declaration with respect
to meetings of Holders of the Trust Securities apply to the giving of such
approval.
SECTION 9.3. NOTICES.
All notices provided for in this Preferred Securities Guarantee shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail, as follows:
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(a) If given to the Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address as
the Preferred Guarantee Trustee may give notice of to the Holders of the Trust
Preferred Securities):
First Union National Bank of Georgia
999 Peachtree Street, N.E.
Suite 1100
Atlanta, Georgia 30309
Attention: Corporate Trust Administration
(b) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Holders of the Trust Preferred Securities):
Apple South, Inc.
Hancock at Washington
Madison, Georgia 30650-1304
Attention: General Counsel
(c) If given to any Holder of Trust Preferred Securities, at the address
set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 9.4. BENEFIT.
This Preferred Securities Guarantee is solely for the benefit of the
Holders of the Trust Preferred Securities and, subject to Section 3.01(a), is
not separately transferable from the Trust Preferred Securities.
SECTION 9.5. GOVERNING LAW.
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.
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THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.
APPLE SOUTH, INC.,
as Guarantor
By: /s/ Erich J. Booth
-----------------------------
Name: Erich J. Booth
Title: Chief Financial Officer
FIRST UNION NATIONAL BANK OF GEORGIA,
as Preferred Guarantee Trustee
By: /s/ R. Douglas Milner
------------------------------
Name: R. Douglas Milner
Title: Vice President
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