<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 29549
Page 1 of 7 Pages
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 6)
FRUIT OF THE LOOM, INC.
(Name of Issuer)
CLASS A COMMON STOCK
(Title of Class of Securities)
359416-10-4
(CUSIP Number)
EARL C. SHANKS
233 S. WACKER DRIVE, 5000 SEARS TOWER, CHICAGO, ILLINOIS 60606
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
November 17, 1995
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [ ]. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
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SCHEDULE 13D
CUSIP No. 359416-10-4 Page 2 of 7 Pages
<TABLE>
<S> <C> <C>
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
William Farley
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS*
BK, PF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(E) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
7 SOLE VOTING POWER
7,008,976 Shares
8 SHARED VOTING POWER
NUMBER OF SHARES 0 Shares
BENEFICIALLY OWNED
BY EACH REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH
7,008,976 Shares See Item 5(b) below.
10 SHARED DISPOSITIVE POWER
0 Shares
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
7,008,976 Shares
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.2% See Item 5(b) below.
14 TYPE OF REPORTING PERSON*
IN
</TABLE>
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 3
Page 3 of 7 Pages
ONLY THOSE ITEMS WHICH ARE HEREBY REPORTED ARE AMENDED. ALL OTHER ITEMS
HEREIN REMAIN UNCHANGED. ALL DEFINED TERMS SHALL HAVE SAME MEANING AS
PREVIOUSLY ASCRIBED TO THEM IN THE ORIGINAL FILING OF SCHEDULE 13D OR
ANY PREVIOUS AMENDMENT THERETO, UNLESS OTHERWISE NOTED.
Item 1. Security and Issuer.
This statement relates to the shares of Class A Stock of the Company,
whose principal executive offices are located at 233 South Wacker Drive, 5000
Sears Tower, Chicago, Illinois 60606.
Item 2. Identity and Background.
(a) Name of Person Filing:
William Farley
(b) Residence or Business Address:
233 South Wacker Drive
5000 Sears Tower
Chicago, Illinois 60606
(c) Principal Occupation:
Chairman of the Board, President and Chief Executive
Officer of the Company.
(d)
and (e) Certain Proceedings:
Farley has not, during the last five years, been (i)
convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors), or (ii) a party
to a civil proceeding of a judicial or administrative
body of competent jurisdiction the result of which
was to subject Farley to a judgment, decree or final
order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state
securities laws or finding any violation with respect
to such laws.
(f) Citizenship:
United States
Item 4. Purpose of Transaction:
As a director and Chief Executive Officer of the Company, Farley
participates in the management of the Company and its operations.
Item 5. Interest in Securities of the Issuer:
(a) The Company has two classes of common stock outstanding: Class
A Common Stock and Class B Common Stock. Each share of Class B Stock of the
Company carries five votes per share and is convertible at the holder's option
into one share of Class A Stock, which carries one vote per share. Therefore,
for the purposes of calculating the number of shares of Class A Stock deemed
owned, for this Schedule 13D the Class B Stock is considered Class A Stock.
Farley is the beneficial owner of 7,008,976 shares of Class A Stock
(including shares of Class B Stock convertible into Class A Stock). Farley's
ownership is comprised of:
(i) 318,000 shares of Class A Stock which he owns
directly;
3
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Page 4 of 7 Pages
(ii) 3,514,212 shares of Class B Stock which he owns
directly;
(iii) 3,176,764 shares of Class B Stock which are owned by
Farley Inc. and of which Farley is deemed to be the
beneficial owner; and
(iv) Mr. Farley also has immediatly exercisable options to
acquire 408,333 shares of Class A Stock pursuant to
certain Company stock option plans.
(b) Farley controls 32.9% of the voting power of the Company.
Subject to the provisions of the agreements and the certificate
described below, Farley has the power, through himself and Farley Inc. (of
which he is the 100% common stockholder, a director and has the power to
appoint a majority of the board of directors) to direct the vote and the
disposition of 7,008,976 shares of Class A Stock (which represents shares of
Class B Stock convertible into Class A Stock) which he owns directly and
indirectly through Farley Inc. No person shares the power to vote the shares
which Farley owns directly or indirectly.
Farley Inc.'s and Farley's holdings in Class A Stock and Class B Stock
are governed by the following agreements and certificate, which contain
provisions regarding restrictions of dispositions of such stock by Farley Inc.
or Farley under certain circumstances:
Farley Inc. has pledged 2,000,000 shares of Class B Stock to
the International Union United Automobile, Aerospace and
Agricultural Implement Workers of America ("UAW") and Farley
has pledged 300,000 shares of Class B Common Stock to the UAW,
both under a Pledge and Collateral Trust Agreement. Exhibit
99(a).
Farley Inc. has pledged 721,909 shares of Class B Stock to the
Pension Benefit Guaranty Corporation (the "PBGC"), under a
Pledge and Collateral Trust Agreement, which is attached
hereto as an exhibit. Farley Inc. has also granted a second
lien to the PBGC on the 2,000,000 shares of Class B Stock
pledged to the UAW. Exhibit 99(b).
Farley has pledged 419,011 shares of Class B Stock to National
Westminster Bank ("NatWest") under a General Security
Agreement, as amended. Exhibit 99(c) and 99(d).
The Fourth Restated Certificate of Incorporation of Farley
Inc. prohibits Farley Inc. from disposing of certain of its
shares of Company Class B Stock without the consent of the
entire Farley Inc. Board of Directors. Exhibit 99(e).
Amended and Restated Voting Agreement between Farley and
Farley Inc. Exhibit 99(f).
Farley has pledged 2,745,201 shares of Class B Stock to
NationsBank under a Stock Pledge Agreement. Exhibit 99(g).
Farley has granted a second lien to NationsBank on the 300,000
shares of Class B Stock pledged to the UAW. Farley has
granted a second lien to NationsBank on the 419,011 shares of
Class B stock pledged to NatWest, both as described above.
Guaranty by the Company to NationsBank in connection with
Farley's General Security Agreement to NationsBank. Exhibit
99(h), 99(i), 99(j), 99(k), 99(l) and 99(m). Farley has
granted a second lien to the Company on the 1,600,000 shares
of Class B Stock pledged to NationsBank and NationsBank of
Florida, N.A., 1,550,000 of which is included in the 2,745,201
shares of Class B Stock described in the immediately
preceeding paragraph.
Farley has pledged 50,000 shares of Class B Stock to
NationsBank of Florida, N.A., in connection with a
Hypothecation Security Agreement and Special Power of
Attorney. Exhibit 99(n). Farley has granted a second lien to
NationsBank on these shares.
Farley has pledged 318,000 shares of Class A Stock to the
Pershing Division of Donaldson, Lufkin & Jenrette Securities,
Inc. under a Margin Agreement. Exhibit 99(o).
(c) Not applicable.
(d) Not applicable.
4
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Page 5 of 7 Pages
Item 6. Contracts, Arrangements, Understandings or Relationships with
respect to Securities of the Issuer.
See Item 5.
Item 7. Exhibits.
99.(a) Pledge and Collateral Trust Agreement among Farley Inc.,
Farley and the UAW, dated December 30, 1992.*
99.(b) Pledge and Collateral Trust Agreement among Farley Inc.,
Farley and PBGC, dated December 30, 1992.*
99.(c) Pledge Agreement of Farley to NatWest, dated August 25, 1993.
99.(d) Amendment to Pledge Agreement of Farley to NatWest, dated
September 12, 1995.
99.(e) Fourth Restated Certificate of Incorporation by Farley Inc.,
dated December 30, 1992.*
99.(f) Amended and Restated Voting Agreement between Farley and
Farley Inc., dated December 30, 1992.*
99.(g) Stock Pledge Agreement of Farley to NationsBank, dated
November 17, 1995.
99.(h) Guaranty of Payment by Fruit of the Loom, Inc. to NationsBank
of Florida, N.A., dated June 27, 1994.
99.(i) Ratification of Guaranty by Fruit of the Loom, Inc. to
NationsBank of Florida, N.A., dated July 1, 1995.
99.(j) General Security Agreement of Farley to NationsBank of
Florida, N.A., dated December 18, 1992.
99.(k) First Amendment to General Security Agreement of Farley to
NationsBank of Florida, N.A., dated August 27, 1993.
99.(l) Second Amendment to General Security Agreement of Farley to
NationsBank of Florida, N.A., dated June 27, 1994.
99.(m) Third Amendment to General Security Agreement of Farley to
NationsBank of Florida, N.A., dated December 18, 1994.
99.(n) Hypothecation Security Agreement and Special Power of Attorney
of Farley to NationsBank of Florida, N.A., dated August 4,
1994.
99.(o) Margin Agreement by and between Farley and the Pershing
Division of Donaldson, Lufkin & Jenrette Securities
Corporation, dated October 27, 1988.*
99.(p) Power of Attorney, dated November 17, 1995.
____________________________
* - previously filed.
5
<PAGE> 6
Page 6 of 7 Pages
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
WILLIAM FARLEY
By: /s/ William Farley
--------------------------
Dated: November 17, 1995
6
<PAGE> 7
Page 7 of 7 Pages
INDEX TO EXHIBITS
Exhibit Sequential
Number Description Page Number
------- ----------- -----------
99.(a) Pledge and Collateral Trust Agreement among Farley Inc., *
Farley and the UAW, dated December 30, 1992.
99.(b) Pledge and Collateral Trust Agreement among Farley Inc., *
Farley and PBGC, dated December 30, 1992.
99.(c) Pledge Agreement of Farley to NatWest, dated August 25, 1993.
99.(d) Amendment to Pledge Agreement of Farley to NatWest, dated
September 12, 1995.
99.(e) Fourth Restated Certificate of Incorporation by Farley Inc., *
dated December 30, 1992.
99.(f) Amended and Restated Voting Agreement between Farley and *
Farley Inc., dated December 30, 1992.
99.(g) Stock Pledge Agreement of Farley to NationsBank, dated
November 17, 1995.
99.(h) Guaranty of Payment by Fruit of the Loom, Inc. to NationsBank
of Florida, N.A., dated June 27, 1994.
99.(i) Ratification of Guaranty by Fruit of the Loom, Inc. to
NationsBank of Florida, N.A., dated July 1, 1995.
99.(j) General Security Agreement of Farley to NationsBank of
Florida, N.A., dated December 18, 1992.
99.(k) First Amendment to General Security Agreement of Farley to
NationsBank of Florida, N.A., dated August 27, 1993.
99.(l) Second Amendment to General Security Agreement of Farley to
NationsBank of Florida, N.A., dated June 27, 1994.
99.(m) Third Amendment to General Security Agreement of Farley to
NationsBank of Florida, N.A., dated December 18, 1994.
99.(n) Hypothecation Security Agreement and Special Power of Attorney
of Farley to NationsBank of Florida, N.A., dated August 4,
1994.
99.(o) Margin Agreement by and between Farley and the Pershing *
Division of Donaldson, Lufkin & Jenrette Securities
Corporation, dated October 27, 1988.
99.(p) Power of Attorney, dated November 17, 1995.
____________________________
* - previously filed.
7
<PAGE> 1
EXHIBIT 99.C
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT (this "Agreement") is made as of August 25, 1993, by
WILLIAM F. FARLEY, an individual resident in the State of Illinois ("Farley"),
in favor of NATIONAL WESTMINSTER BANK USA, a national banking association
having an office at 175 Water Street, New York, New York 10038 (the "Bank").
WITNESSETH:
WHEREAS, Farley directly or indirectly, is the legal and beneficial owner
of certain issued and outstanding shares of the Class B Common Stock of Fruit
of the Loom, Inc., a Delaware corporation (the "Company");
WHEREAS, pursuant to an Assignment of Accounts agreement by and between
Farley and the Bank made as of April 10, 1987 (the "Assignment Agreement"),
Farley pledged to the Bank, and granted to the Bank a first priority security
interest in, a certificate of deposit in the original principal amount of
$13,200,000;
WHEREAS, the Assignment Agreement was made in connection with a certain
guaranty executed by Farley on April 10, 1987 (the "Guaranty") in favor of the
Bank pursuant to which Farley provided an unlimited guaranty to the Bank of
VBQ's (as hereinafter defined) obligations under the Reimbursement Agreement
(as hereinafter defined) and as collateral security for the due payment and
performance of all indebtedness and other liabilities and obligations of Condec
Corporation ("Condec"), now VBQ, Inc. ("VBQ"), arising out of or in any way
connected with a Letter of Credit Reimbursement Agreement (the "Reimbursement
Agreement") made as of April 15, 1987 pursuant to which VBQ (then Condec) made
certain agreements with the Bank in consideration for the Bank's issuance of a
letter of credit (the "Letter of Credit")(the obligations under the
Reimbursement Agreement and Farley's obligations under the Guaranty
collectively, the "Obligations");
WHEREAS, Farley has requested the release and substitution of $4,500,000
(the "Base Amount") of the cash collateral currently held by the Bank pursuant
to the Assignment Agreement with 282,353 shares of Class B Common Stock of the
Company, the equal number of shares of Class A Common Stock of the Company in
which such Class B shares can be converted have a market value equal to at
least two times the Base Amount, or $9,000,000.
<PAGE> 2
NOW, THEREFORE, in consideration of the Bank's release of the Base Amount
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, Farley hereby agrees with the Bank as follows:
SECTION 1. Definitions. Capitalized terms used herein shall have the
meanings ascribed to them in the Reimbursement Agreement, unless otherwise
defined herein. Unless otherwise defined herein or in the Reimbursement
Agreement, terms defined in Article 9 of the UCC are used herein as therein
defined. "UCC" means the Uniform Commercial Code as in effect in the State of
New York on the date such law is applied; provided; however, that, in the event
that, by reason of mandatory provisions of law, any or all of the attachment,
perfection or priority of the Bank's security interest in the Pledged
Collateral (as such term is hereinafter defined) is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than the State of New
York, the term "UCC" means the Uniform Commercial Code as in effect in such
other jurisdiction for purposes of the provisions thereof relating to such
attachment, perfection or priority and for purposes of definitions related to
such provisions.
SECTION 2. Pledge. Farley hereby pledges to the Bank, and otherwise grants
to the Bank a first priority security interest in, the following (collectively,
the "Pledged Collateral"):
(a) 282,353 shares of Class B Common Stock of the Company owned by
Farley, the shares of Class A Common Stock equivalent of which have a
market value of at least Nine Million United States Dollars $9,000,000 as
of the close of business of the day prior to the date hereof (the "Pledged
Shares");
(b) all certificates or instruments representing or evidencing any of
the Pledged Shares;
(c) all additional shares of stock of the Company or any successor in
interest thereto from time to time delivered to the Bank pursuant to this
Agreement in any manner (which shares shall be deemed to be part of the
Pledged Shares), and the certificates or instruments representing or
evidencing such additional shares; and
(d) all dividends, cash, securities (including shares of Class A
Common Stock of the Company), instruments and other property and proceeds
from time to time received, receivable or otherwise distributed in respect
of, in substitution for, in addition to or in exchange for any of
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<PAGE> 3
the foregoing and all certificates or instruments representing or
evidencing the same.
SECTION 3. Security for Obligations. This Agreement secures, and the
Pledged Collateral is security for, the payment in full when due, whether at
stated maturity, by acceleration or otherwise, and satisfaction of, all of the
Obligations and the reasonable costs of collection of such Obligations and the
expenses under this Agreement (the "Secured Obligations").
SECTION 4. Delivery of Pledged Collateral
(a) Farley shall deliver to the Bank any and all certificates or
instruments representing or evidencing the Pledged Collateral, and such
certificates and instruments shall be in suitable form for transfer by
delivery, or shall be accompanied by duly executed instruments of transfer
or assignment in blank, together with all applicable stock transfers tax
stamps affixed thereto, all in form and substance satisfactory to the Bank.
Such certificates and instruments shall be held by or on behalf of the Bank
pursuant to this Agreement. The Bank shall have the right, at any time in
its discretion and without notice to Farley, to appoint one or more agents
for the purpose of retaining physical possession of the certificates or
instruments representing or evidencing the Pledged Shares and other Pledged
Collateral and for the purpose of administering this Agreement. In
addition, the Bank shall have the right at any time to exchange
certificates or instruments representing or evidencing the Pledged
Collateral for certificates or instruments of different denominations.
(b) With the delivery of the Pledged Shares, Farley shall provide to
the Bank the following:
(i) a copy of the resolutions of the Board of Directors of the
Company certified by the Secretary thereof authorizing the
filing of the Registration Statement on Form S-3 covering
the Pledged Shares (the "Registration Statement") and the
execution and delivery of the Registration Rights Agreement
related thereto;
(ii) an originally signed copy of the Registration Statement; and
(iii) The Registration Rights Agreement covering the Pledged
Shares in form and substance satisfactory to the Bank.
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SECTION 5. Increases to and Releases of Pledged Shares.
(a) If the average of the closing prices of the Company's publicly
traded Class A Common Stock for the ten (10) trading days preceding the end
of any calendar quarter (or the giving of notice thereof from the Bank to
Farley) declines such that the ratio of the market value of the Pledged
Collateral to the Base Amount as that Base Amount may be increased or
decreased under this Agreement, (the "Security Ratio") is less than 1.75,
within ten (10) days following the end of the quarter or the receipt of
notice, as the case may be, Farley shall:
(i) by execution and delivery of a written amendment to the
Assignment Agreement, or by execution and delivery of a new
document in form and substance satisfactory to the Bank,
pledge such additional cash to the Bank (the amount of which
shall reduce the Base Amount) as shall be necessary to
adjust the Security Ratio to 2.00; or
(ii) pledge hereunder, by execution and delivery of a written
supplement hereto, that number of additional shares of Class
B Common Stock or shares of Class A Common Stock owned by
him as shall be necessary to adjust the Security Ratio to
2.00.
If by the tenth day Farley shall have failed to so adjust the Security Ratio by
pledging additional cash or shares to the Bank pursuant to subsections (i) or
(ii) above, then on or after the tenth day, the Bank shall foreclose on and
sell that amount of Pledged Collateral (the proceeds of which shall be
deposited to reduce the Base Amount) necessary to adjust the Security Ratio to
2.00.
(b) If the average of the closing prices of the Company's publicly
traded Class A Common Stock for the ten (10) trading days preceding the end
of any calendar quarter (or the giving of notice thereof from the Bank
to Farley) increases such that the Security Ratio exceeds 2.25, then within
ten (10) days notice received from Farley, the Bank shall release to Farley
or his designate such number of Pledged Shares as shall be necessary to
adjust the Security Ratio to 2.00.
(c) For purposes of this Section 5, the average of closing prices of
the Company's publicly traded Class A Common Stock and the Security Ratio
shall be determined
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<PAGE> 5
solely by the Bank, and such determinations shall be conclusive for all
purposes hereunder.
(d) At any time during the term of this Agreement, Farley may, upon
written approval by the Bank (which approval shall not be unreasonably
withheld) and by documents in form and substance satisfactory to the Bank,
pledge to the Bank such additional shares of Class A Common Stock or shares
of Class B Common Stock to release and substitute real property (the
"Property") previously mortgaged by Farley to the Bank to secure the
Obligations, provided however, that the value of such additional shares of
Class A Common Stock or shares of Class B Common Stock proposed to be
pledged shall be equal to twice the higher of (i) the value of Property
sought to be released and substituted as set forth in Exhibit A attached
hereto; or (ii) the current fair market value of the Property sought to be
released and substituted as determined by an independent appraiser
satisfactory to the Bank. The value of such Property so determined shall be
added to the Base Amount.
(e) In the event Farley shall pledge shares of Class A Common Stock of
the Company to the Bank pursuant to this Agreement, those shares shall be,
or prior to the pledge thereof, Farley shall cause such shares to be,
registered under applicable federal and state securities laws, freely
transferable and salable in the public market, and free of any and all
security interests, liens, pledges, set-off rights, charges, claims or
encumbrances of any kind except for the security interest to be created by
this Agreement and encumbrances resulting from the Amended and Restated
Voting Agreement dated December 30, 1992 executed by and between Farley and
Farley Inc., a Delaware corporation (the "Farley Inc. Encumbrances").
(f) In the event Farley shall pledge additional shares of Class B
Common Stock of the Company to the Bank pursuant to this Agreement, Farley
shall have caused to be registered under the Securities Act of 1933, as
amended, and qualified for sale under applicable federal and state
securities laws, that number of shares of Class A Common Stock of the
Company into which such additional shares of Class B Common Stock may be
converted upon a foreclosure by the Bank on the Pledged Collateral.
(g) At any time, Farley shall have the right to deposit with and
pledge to the Bank, in form and substance satisfactory to the Bank,
additional cash collateral (the "Additional Cash Collateral") which shall
reduce the Base Amount on a dollar for dollar basis. In such event, the
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<PAGE> 6
Bank shall release to Farley that amount of Pledged Shares or Pledged
Collateral the market value of which (as determined by the Bank in its sole
and absolute discretion) is equal to twice the value of the Additional Cash
Collateral deposited with and pledged to the Bank.
SECTION 6. Representations and Warranties. Farley represents and warrants
to the Bank as follows:
(a) The Shares. The authorized capital stock of the Company consists
of, in part, 30,000,000 shares of Class B Common Stock having a par value
of one cent ($.01), with supervoting rights, of which approximately
6,700,000 shares are validly issued and outstanding. Farley and Farley Inc.
directly or indirectly, are the legal and beneficial owners of all of the
issued and outstanding shares of the Company's Class B Common Stock. The
Pledged Shares have been duly authorized and are validly issued, fully paid
and non-assessable. There are no existing options, warrants, calls,
commitments or other agreements of any character relating to the Pledged
Shares except for the security interest to be created by this Agreement and
the Farley Inc. Encumbrances.
(b) Conversion of Shares. Farley's pledge to the Bank of the shares of
Class B Common Stock hereunder does and shall not result in a conversion of
any of the Pledged Shares into shares of Class A Common Stock pursuant to
Article IV, Part B, Section 5 of the Restated Certificate of Incorporation
of the Company.
(c) Owner of Shares. Farley is, and at the time of delivery of the
Pledged Collateral to the Bank pursuant to Section 4 hereof, will be, the
legal and beneficial owner of the Pledged Collateral free and clear of any
security interest, lien, pledge, set-off right, charge, claim or
encumbrance of any kind except for the security interest created by this
Agreement and the Farley Inc. Encumbrances.
(d) Power to Pledge. Farley has full power, authority and legal right
to sell the Pledge Collateral and to pledge and grant the security interest
in the Pledged Collateral in the manner and on the terms contemplated in
this Agreement.
(e) Validity of Agreement. This Agreement has been duly executed and
delivered by Farley and constitutes the legal, valid and binding obligation
of Farley enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, or other similar
laws
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<PAGE> 7
affecting the rights of creditors generally or by the application of general
equity principles.
(f) Governmental and Creditor Approval. No consent, authorization, or
approval of, or other action by, and no notice to or filing with any Person
(including, without limitation, creditors of Farley and any governmental
authority) is required either (i) for the pledge by Farley of the Pledged
Collateral or the creation of the security interest pursuant to this
Agreement or for the execution, delivery or performance of this Agreement
by Farley or (ii) for the exercise by the Bank of the rights or remedies
provided for in this Agreement in respect of the Pledged Collateral
pursuant to this Agreement, except as may be required in connection with
the disposition of the Pledged Collateral by laws affecting the offering
and sale of securities generally.
(g) Validity of Guaranty. The pledge of the Pledged Collateral
hereunder does not in any way affect the Guaranty or Farley's obligations
thereunder which shall remain in full force and effect.
(h) Registration of Pledged Shares. Farley has caused to be registered
under the Securities Act of 1933, as amended, and has qualified for sale
under applicable federal and state securities laws, three hundred forty
thousand, five hundred (340,500) shares of Class A Common Stock of the
Company into which the Pledged Shares may be converted upon any foreclosure
by the Bank on the Pledged Collateral.
(i) No other Liens on Pledged Collateral. The Pledged Collateral are
and shall continue to be free and clear of any security interest, lien,
pledge, set-off right, charge, claim or encumbrance of any kind except for
the security interest created by this Agreement and the Farley Inc.
Encumbrances.
(j) First Priority Security Interest. Upon delivery of the Pledged
Collateral pursuant to Sections 4 or 5 hereof, the pledge of the Pledged
Shares in accordance with the terms of this Agreement shall create a valid
and perfected first priority security interest in the Pledged Collateral
superior and prior to any other interest, securing payment and satisfaction
of the Secured Obligations.
(k) Ownership of Farley Inc. Farley directly holds and shall continue
to hold approximately 99% of the common
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<PAGE> 8
stock of Farley Inc. As such, Farley controls and shall continue to control
Farley Inc.
SECTION 7. Security Interest Absolute. All rights and security interests of
the Bank, and all obligations of Farley hereunder, shall be absolute and
unconditional, irrespective of:
(a) any lack of validity or enforceability of the Obligations or
obligations under any other agreement or instrument relating to them; or
(b) any change in the time, manner or place of payment, or any other
term of any of the Obligations; or
(c) any exchange, release or non-perfection of any other collateral
securing the Obligations.
SECTION 8. Further Assurances. Farley agrees that at any time and from time
to time, at the expense of Farley, Farley shall promptly execute and deliver
all further instruments and documents, and take all further action, that may be
necessary or desirable in the reasonable opinion of the Bank, or that the Bank
may reasonably request, in order to effect the pledge hereunder or perfect and
protect any security interest granted hereunder or to enable the Bank to
exercise and enforce its rights and remedies hereunder with respect to any
Pledged Collateral.
SECTION 9. Voting Rights; Dividends, Etc.
(a) Except as set forth in Section 9(b) hereof, Farley shall be
entitled to receive and retain any and all dividends paid in respect of the
Pledged Collateral, other than any and all:
(i) (A) dividends paid or payable other than in cash in respect
of, and (B) instruments and other property received,
receivable or otherwise distributed in respect of, in
substitution for, in addition to or in exchange for any
Pledged Collateral;
(ii) dividends, extraordinary dividends and other distributions
paid or payable in cash in respect of any Pledged Collateral
in connection with a partial or total liquidation or
dissolution, in connection
- 8 -
<PAGE> 9
with a reduction of capital or any payment other than a
normal course dividend; and
(iii) cash paid, payable or otherwise distributed in redemption or
prepayment of, or in exchange for, any Pledged Collateral,
all of which shall be, and all of which shall be forthwith delivered by
Farley to the Bank to hold as, Pledged Collateral and shall, if received by
Farley, be received in trust for the benefit of the Bank, be segregated
from the other property or funds of Farley and be forthwith delivered to
the Bank as Pledged Collateral in the same form as so received (with any
necessary endorsement).
(b) Upon the occurrence and during the continuance of an Event of
Default (as defined in Section 14 hereof) and upon written notice thereof
from the Bank to Farley, the Bank shall be entitled to receive and retain
as Pledged Collateral all dividends paid and other distributions made in
respect of the Pledged Collateral, whether so paid or made before or after
any Event of Default. Any such dividends shall, if received by Farley, be
received in trust for the benefit of the Bank, be segregated from the other
property or funds of Farley, and be forthwith delivered to the Bank as
Pledged Collateral in the same form as so received (with any necessary
endorsement).
(c) Farley shall be entitled to exercise any and all voting and other
consensual rights pertaining to the Pledged Collateral or any part thereof
for any purpose not inconsistent with the terms of this Agreement or the
Reimbursement Agreement.
SECTION 10. Other Covenants. Farley agrees with the Bank that:
(a) He shall not (i) sell, transfer or otherwise dispose of, or grant
any option or warrant with respect to, any of the Pledged Collateral or
(ii) create or permit to exist any lien, upon or with respect to any of the
Pledged Collateral, except for the security interest created under this
Agreement;
(b) He shall duly observe and and comply, or cause to be duly observed
and complied, with (i) all requirements of any governmental authority
imposed upon Farley applicable to any of the Pledged Collateral
(including all securities laws), (ii) all agreements, covenants, terms and
conditions under or upon which the Bank holds the Pledged Collateral or
- 9 -
<PAGE> 10
any part thereof, and (iii) all terms, conditions and agreements contained
in the Registration Rights Agreement;
(c) He shall not, and he shall cause Farley Inc. not to, whether
before or after an Event of Default, exercise any of his rights as owner of
the Pledged Collateral, including without limitation his rights to vote in
respect of the Pledged Shares or otherwise to give consents or waivers in
respect of the Pledged Collateral, in a manner that would adversely affect
(i) the interests of the Bank in the Pledged Collateral, (ii) the rights of
the Bank under this Agreement or (iii) the interests and rights of the Bank
in and under the Reimbursement Agreement or the Guaranty;
(d) He shall take or shall cause to be taken all actions necessary to
register or to maintain the registration under the Securities Act of 1933,
as amended, and the qualification for sale under applicable federal and
state securities laws, that number of shares of Class A Common Stock of the
Company into which the total number of Pledged Shares shall be converted
pursuant to a foreclosure by the Bank on the Pledged Collateral, for so
long as this Agreement shall be in effect;
(e) He shall not amend or permit the amendment of the Registration
Rights Agreement without the written consent of the Bank;
(f) He shall not amend or permit the amendment of the Registration
Statement in a manner that would adversely affect the rights or interests
of the Bank hereunder unless such amendment is a result of compliance by
the Company with the Securities Exchange Act of 1934;
(g) He shall notify the Bank promptly any time he has notice of the
use or intended use of the Registration Statement by any person or entity
other than the Bank;
(h) He shall promptly provide the Bank with copies of all SEC filings
of the Company; and
(i) He shall cause Farley Inc. to take no action inconsistent with the
purpose of this Agreement or the Bank's rights or remedies hereunder.
SECTION 11. The Bank Appointed Attorneys-in-Fact. Farley hereby appoints
the Bank as Farley's attorney-in-fact, with full authority in the place and
stead of Farley and in the name of Farley or otherwise, to take any action and
to execute any instrument which the Bank may deem necessary or advisable in
- 10 -
<PAGE> 11
order to accomplish the purpose of this Agreement, including, without
limitation, to receive, endorse and collect any instrument made payable to
Farley representing any dividend or other distribution in respect of the
Pledged Collateral or any part thereof and to give full discharge for the same.
This power, being coupled with an interest, is irrevocable.
Section 12. The Bank May Perform. If Farley fails to perform any
agreement contained herein, the Bank may itself perform or cause performance
of, such agreement, and the expenses of the Bank incurred in connection
therewith shall be payable by Farley under Section 16 hereof.
Section 13. No Responsibility for Certain Actions. The Bank shall have no
responsibility for (i) ascertaining or taking action with respect to calls,
conversions, exchanges, tenders or other matters related to any Pledged
Collateral, whether or not the Bank have or are deemed to have knowledge of
such matters, or (ii) taking any necessary steps to preserve rights against any
Persons with respect to any Pledged Collateral.
Section 14. Events of Default and Remedies Upon Default.
(a) For the purposes of this Agreement, an Event of Default shall
mean:
(i) any of the Events of Default as defined in paragraph 5 of the
Reimbursement Agreement except as those items apply to VBQ and except
for Sub-paragraph (j) of paragraph 5 of the Reimbursement Agreement;
or
(ii) if any of the following shall occur and not be
cured by Farley within five (5) days:
(A) a representation or warranty made by Farley
hereunder shall prove to be incorrect in any
material respect when made, when deemed made or
any time during the term of this Agreement,
with the exception of the representations and
warranties set forth in sub-paragraphs (a), (b)
and (h) of Section 6 which may hereafter change
in the ordinary course of business;
(B) the breach of any covenant or agreement of
Farley made in this Agreement; or
- 11 -
<PAGE> 12
(C) the invalidity, lack of effectiveness of, or the failure to
include the Pledged Shares in, the Registration Statement or
the Registration Rights Agreement.
(b) If any Event of Default shall have occurred and be continuing,
upon written notice thereof to Farley the Bank may exercise in respect of
the Pledged Collateral, in addition to other rights and remedies provided
for herein or otherwise available to it, all the rights and remedies
provided a secured party upon the default of a debtor under the UCC at that
time, and the Bank may also, without notice except as specified below, sell
the Pledged Collateral or any part thereof in one or more parcels at public
or private sale, at any exchange, broker's board or at any of the Bank's
respective offices or elsewhere, for cash, on credit or for future
delivery, upon such terms as the Bank may determine to be commercially
reasonable and the Bank may be the purchaser of any or all of the Pledged
Collateral so sold and thereafter hold the same, absolutely, free from any
right or claim of whatsoever kind. Farley agrees that, to the extent notice
of sale shall be required by law, at least five days' notice to Farley of
the time and place of any public sale or the time after which any private
sale is to be made shall constitute reasonable notification. The Bank shall
not be obligated to make any sale of Pledged Collateral regardless of
notice of sale having been given. The Bank may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time
and place to which it was so adjourned. The Bank shall incur no liability
as a result of the sale of the Pledged Collateral, or any part thereof, at
any sale into the public market or by private sale. Farley hereby waives
any claims against the Bank arising by reason of the fact that the price at
which any Pledged Collateral may have been sold at such a private sale was
less than the price which might have been obtained at a public sale, even
if the Bank accepts the first offer received and does not offer such
Pledged Collateral to more than one offeree.
SECTION 15. Application of Proceeds. Any proceeds received by the Bank from
the exercise of the remedies set forth in Section 14 shall be applied first to
the payment of the Bank's expenses in connection with such exercise of its
remedies, including reasonable attorney's fees and legal expenses, brokers or
underwriting fees or similar expenses and then to the payment in full of
outstanding Obligations in such order as the Bank in its sole discretion
elects. Any surplus of such proceeds after payment in full of outstanding
Obligations shall be paid over to
- 12 -
<PAGE> 13
Farley, or to whomever may be lawfully entitled to receive such surplus.
SECTION 16. Expenses. Farley will upon demand pay to the Bank the amount of
any and all expenses, including the fees and expenses of their counsel, which
they may incur, or which are required to be paid, in connection with (i) the
administration of this Agreement, (ii) the custody or preservation of, or the
sale of, collection from, or other realization upon, any of the Pledged
Collateral, (iii) the exercise or enforcement of any of the rights of the Bank
hereunder or determination of such rights or (iv) the failure by Farley to
perform or observe any of the provisions hereof.
SECTION 17. Amendments, Etc. No amendment or waiver of any provision of this
Agreement nor consent to any departure by Farley herefrom, shall in any event
be effective unless the same shall be in writing and signed by the parties
hereto, and then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
SECTION 18. No Waiver. No failure on the part of the Bank to exercise, and
no course of dealing with respect to, and no delay in exercising, any right,
power or remedy hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise by the Bank of any rights, power or remedy hereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. The remedies herein provided are to the fullest extent
permitted by law cumulative and are not exclusive of any remedies provided by
law.
SECTION 19. Termination. This Agreement shall terminate when all of the
Secured Obligations have been fully paid and performed. Within thirty (30) days
from the date of such termination, the Bank shall release and redeliver to
Farley, against receipt, the Pledged Collateral held by it hereunder and a
notice to Fruit of the Loom, Inc. of its relinquishment of registration rights.
SECTION 20. Addresses for Notices. All notices and other communications
hereunder shall be delivered by certified mail or recognized courier to the
parties at the following addresses:
- 13 -
<PAGE> 14
To Farley:
William F. Farley
Farley Inc.
233 South Wacker Drive
6300 Sears Tower
Chicago, Illinois 60606
With a copy to
Kenneth Greenbaum, Esq.
Farley Inc.
233 South Wacker Drive
6300 Sears Tower
Chicago, Illinois 60606
To the Bank:
NATIONAL WESTMINSTER BANK USA
175 Water Street
New York, New York 10038
Attn: Phillip Krall
SECTION 21. Continuing Lien. This Agreement shall create a continuing lien
on the Pledged Collateral and shall (i) remain in full force and effect until
terminated in accordance with Section 19, (ii) be binding upon Farley, his
heirs, successors and assigns, and (iii) inure to the benefit of the Bank and
each of its successors, transferees and assigns.
SECTION 22. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York (excluding its
conflicts of laws rules).
- 14 -
<PAGE> 15
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
WILLIAM FARLEY
W. Farley
------------------------------
NATIONAL WESTMINSTER BANK USA
By: Phillip Krall
---------------------------
Its: Vice President
--------------------------
- 15 -
<PAGE> 16
<TABLE>
<CAPTION>
EXHIBIT A
Amount Basis
------ -----
<S> <C> <C>
16 Lord's Point
Kennebunk, ME $ 1,160,000 Market Value
20 Lord's Point
Kennebunk, ME $ l,400,000 Market Value
Sea Fields Condominiums
(two units)
Kennebunk, ME $ 280,000 Market Value
Wood Run Subdivision
Unit IV, Lot 4
Unit I, Lot 109
Snowmass Village, CO $ 1,731,433 Fair Value less
$1,567,000 first
mortgage
-----------
Total $ 4,571,433
</TABLE>
- 16 -
<PAGE> 1
EXHIBIT 99.d
AMENDMENT TO PLEDGE AGREEMENT
THIS AMENDMENT TO PLEDGE AGREEMENT (this "Amendment") is
made as of September 12, 1995 by WILLIAM F. FARLEY, an individual resident in
the State of Illinois ("Farley"), and NATWEST BANK N.A., (formerly known as
NATIONAL WESTMINSTER BANK USA) a national banking association having an office
at 175 Water Street, New York, New York 10038 (the "Bank").
W I T N E S S E T H:
WHEREAS, Farley, directly or indirectly, is the legal and
beneficial owner of certain issued and outstanding shares of Class A and B
Common Stock of Fruit of the Loom, Inc., a Delaware corporation (the
"Company");
WHEREAS, pursuant to an Assignment of Accounts agreement by
and between Farley and the Bank made as of April 10, 1987 (the "Assignment
Agreement"), Farley pledged to the Bank, and granted to the Bank a first
priority security interest in, a certificate of deposit in the original
principal amount of $13,200,000;
WHEREAS, the Assignment Agreement was made to secure a
certain guaranty executed by Farley on April 10, 1987 (the "Guaranty") in favor
of the Bank pursuant to which Farley provided an unlimited guaranty to the Bank
of VBQ's (as hereinafter defined) obligations under the Reimbursement Agreement
(as hereinafter defined), and as collateral security for the payment of all
obligations of Condec Corporation ("Condec"), now VBQ, Inc. ("VBQ"), arising
out of or in any way connected with the Letter of Credit Reimbursement
Agreement (the "Reimbursement Agreement") made as of April 15, 1987 pursuant to
which VBQ (then Condec) made certain agreements with the Bank in consideration
for the Bank's issuance of a letter of credit (the "Letter of Credit") (the
obligations under the Reimbursement Agreement and Farley's obligations under
the Guaranty collectively, the "Obligations");
WHEREAS, pursuant to a Pledge Agreement by and between Farley
and the Bank dated as of August 25, 1993, Farley pledged 282,353 shares of
Class B Common Stock of the Company;
WHEREAS, Farley has currently pledged to the Bank 344,498
shares of the Common Stock of the Company pursuant to the Pledge Agreement, of
which amount 11,487 are Class A Common Stock and 333,011 are Class B Common
Stock; and
<PAGE> 2
WHEREAS, Farley, from time to time, has been in violation of
the Security Ratio of the Pledge Agreement and the parties have agreed to amend
certain provisions of the Pledge Agreement to, among other things, provide for
the delivery of additional pledged shares and substitute a Minimum Value (as
hereinafter defined) covenant in lieu of the Security Ratio covenant set
forth in Section 5 of the Pledge Agreement;
NOW, THEREFORE, in consideration of the Bank's forbearance in
exercising its rights under the Pledge Agreement and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Farley and the Bank hereby agree as follows:
1. Definitions. Unless otherwise indicated, capitalized terms
used herein and not defined herein shall have the meanings as set forth in the
Pledge Agreement.
2. Pledge of Additional Shares.
(a) Farley hereby pledges to the Bank, and otherwise
grants to the Bank a first priority security interest
in, 36,000 shares of Class B Common Stock of the
Company owned by Farley (the "Additional Shares")
which Additional Shares shall serve as additional
security for the Secured Obligations and shall be
delivered to the Bank on the date hereof in
accordance with Section 4 of the Pledge Agreement.
The Additional Shares, as well as any other shares
pledged to the Bank hereunder, shall be deemed to be
part of the Pledged Shares pledged to the Bank
pursuant to the Pledge Agreement.
(b) Farley hereby repeats and affirms the representations
and warranties set forth in Section 6 of the Pledge
Agreement with respect to this Amendment, and the
Additional Shares and other collateral pledged
hereunder, except as set out in Section 5 hereof.
Farley hereby further affirms that the covenants set
forth in Section 10 of the Pledge Agreement shall
apply with full force and effect to this Amendment
and the Additional Shares and other collateral
pledged hereunder.
3. Release of Certain Pledged Shares.
Upon receipt of the Additional Shares referred to in Section 2
hereof, and payment of the Amendment Fee referred to in Section 7 hereof, the
Bank shall take all steps to release and
- 2 -
<PAGE> 3
deliver to Farley the 11,487 shares of the Company's Class A Common Stock which
it currently holds pursuant to the Pledge Agreement.
4. Section 5 of the Pledge Agreement is hereby amended in its
entirety to read as follows:
"Section 5. Minimum Value of Pledged Collateral.
(a) The Pledged Collateral must at all times have a market
value of at least Seven Million Ten Thousand Nine Hundred and Sixty
Two United States Dollars ($7,010,962) (the "Minimum Value"). So long
as the market value of the Pledged Collateral equals or exceeds the
Minimum Value and no other Event of Default exists under the Pledge
Agreement, Farley, may at his option, pledge to the Bank (i)
additional Class A or Class B Common Stock of the Company or (ii)
additional cash, and the value of such shares and/or cash shall be
counted towards the Minimum Value requirement set forth herein. Any
such additional shares shall be part of the Pledged Shares and any
additional shares and cash pledged hereunder shall be part of the
Pledged Collateral;
(b) Should the market value of the Pledged Collateral fall
below the Minimum Value, Farley shall, within one business day after
receipt of notice of such violation from the Bank, pledge such
additional cash as is necessary to increase the market value of the
Pledged Collateral above the Minimum Value. The Bank shall hold all
cash collateral pledged hereunder in a cash collateral account (the
"Cash Collateral Account") to be applied in accordance with the terms
hereof and the Reimbursement Agreement. If Farley shall have failed
to increase the Minimum Value by pledging additional cash within the
time period set forth above, then the Bank may immediately declare an
Event of Default and sell all or a portion of the Pledged Collateral
and convert it to cash to be held in the Cash Collateral Account and
applied against the Secured Obligations as the same shall become due
and payable, and in accordance with the terms hereof and the
Reimbursement Agreement;
(c) For purposes of this Section 5 the market value of the
Pledged Collateral as of any day shall equal the sum of (i) the cash
collateral held by the Bank pursuant to the terms hereof (but
excluding any cash collateral held by the Bank pursuant to the
Assignment Agreement) and (ii) the aggregate market value of the
Pledged Shares held by the Bank as of the end of the preceding day
(based on the closing price of the Company's Class A Common Stock as
quoted on the NYSE for such preceding day), such determination by the
Bank to be conclusive for all purposes hereunder.
- 3 -
<PAGE> 4
(d) In the event Farley shall pledge shares of Class A Common
Stock of the Company to the Bank pursuant to this Amendment, those
shares shall be, or prior to the pledge thereof, Farley shall cause
such shares to be, registered under applicable federal and state
securities laws, freely transferable and salable in the public market,
and free of any and all security interests, liens, pledges, set-off
rights, charges, claims or encumbrances of any kind except for the
security interest to be created by this Amendment and the Farley Inc.
Encumbrances.
(e) In the event Farley shall pledge additional shares of
Class B Common Stock of the Company to the Bank pursuant to this
Amendment, Farley shall have caused to be registered under the
Securities Act of 1933, as amended, and qualified for sale under
applicable federal and state securities laws, that number of shares of
Class A Common Stock of the Company into which such additional shares
of Class B Common Stock may be converted upon a foreclosure by the
Bank on the Pledged Collateral.
5. Section 6(h) of the Pledge Agreement is hereby amended in its
entirety to read as follows:
"(h) Registration of Pledged Shares. Farley has caused to be
registered under the Securities Act of 1933, as amended, and has qualified for
sale under applicable federal and state securities laws, four hundred eight
thousand six hundred (408,600) shares of Class A Common Stock of the Company
into which the Pledged Shares may be converted upon any foreclosure by the Bank
on the Pledged Collateral."
6. A new subsection (a)(iii) is hereby added to Section 14
("Events of Default and Remedies Upon Default") to read as follows:
"(iii) failure by Farley to comply with and maintain the
Minimum Value of the Pledged Collateral pursuant to Section 5 of the
Agreement."
7. Section 14(b) is hereby amended in its entirety to read as
follows:
"(b) If any Event of Default shall have occurred and be
continuing, upon written notice thereof to Farley the Bank may
exercise in respect of the Pledged Collateral, in addition to other
rights and remedies provided for herein or otherwise available to it,
all the rights and remedies provided a secured party upon the default
of a debtor under the UCC at that time, and the Bank may also, without
notice except as specified below, sell the Pledged Collateral or
- 4 -
<PAGE> 5
any part thereof in one or more parcels at public or private sale, at
any exchange, broker's board or at any of the Bank's respective
offices or elsewhere, for cash, on credit or for future delivery, upon
such terms as the Bank may determine to be commercially reasonable and
the Bank may be the purchaser of any or all of the Pledged Collateral
so sold and thereafter hold the same, absolutely, free from any right
or claim of whatsoever kind. The Bank shall not be required to give
Farley notice of any sale of Pledged Collateral except as may be
required by law. The Bank shall not he obligated to make any sale of
Pledged Collateral regardless of any notice of sale having been given.
The Bank may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was
so adjourned. The Bank shall incur no liability as a result of the
sale of the Pledged Collateral, or any part thereof, at any sale into
the public market or by private sale. Farley hereby waives any claims
against the Bank arising by reason of the fact that the price at which
any Pledged Collateral may have been sold at such a private sale was
less than the price which might have been obtained at a public sale,
even if the Bank accepts the first offer received and does not offer
such Pledged Collateral to more than one offeree.
8. Fees. Farley will, on the date hereof, pay to the Bank (i)
the fees and expenses of their counsel, incurred, or which are required to be
paid, in connection with the negotiation, preparation, execution and delivery
of this Amendment, and (ii) a non-refundable amendment fee in the amount of
$36,466 (the "Amendment Fee").
9. Miscellaneous.
9.1 Governing Law. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New
York (excluding its conflicts of laws rules).
9.2 Entire Agreement. This Amendment constitutes the
entire agreement among the parties with respect to the subject
matter hereof, and supersedes all prior agreements and
understandings among the parties with respect thereto.
9.3 Counterparts. This Amendment may be executed in two or
more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same
instrument.
- 5 -
<PAGE> 6
10. Except as expressly modified and amended hereby, the Pledge
Agreement and all other existing collateral arrangements shall remain in full
force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed as of the date first above written.
WILLIAM FARLEY
W. Farley
------------------------------------
NATWEST BANK N.A.
By: Gerard Painter
---------------------------------
Name: Gerard Painter
Title: Vice President
- 6 -
<PAGE> 1
EXHIBIT 99.g
STOCK PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT (this "Stock Pledge Agreement"),
dated as of November 17, 1995, is made by William F. Farley (the "Pledgor"), in
favor of NATIONSBANK, N.A., a national banking association, as agent for the
Lenders (the "Agent"). All capitalized terms used herein and not otherwise
defined shall have the meanings ascribed thereto in the Loan Agreement (as
defined below).
RECITALS
WHEREAS, the Lenders have agreed to make Term Loans and Revolving
Loans (collectively, the "Loans") to the Pledgor in accordance with the terms
and conditions of that certain Loan Agreement among the Pledgor, the Agent and
the Lenders dated as of the date hereof (the "Loan Agreement");
WHEREAS, it is a condition precedent to the Lenders entering into the
Loan Documents that the Pledgor shall have executed and delivered to the
Lenders, among other things, this Stock Pledge Agreement providing for the
pledge to the Agent, for the benefit of the Lenders, of, and the grant to the
Agent, for the benefit of the Lenders, of a security interest in, outstanding
shares of capital stock owned by the Pledgor; and
WHEREAS, the Pledgor reasonably expects to benefit, directly or
indirectly, from its execution and delivery of this Stock Pledge Agreement.
NOW, THEREFORE, in consideration of the premises and the agreements
herein and in order to induce the Lenders to make the Loans under the Loan
Agreement, the Pledgor and the Agent, for the benefit of the Lenders, hereby
agree as follows:
AGREEMENT
SECTION 1. Pledge and Grant of Security Interest. As collateral
security for all of the Pledgor Obligations (as defined in Section 2 hereof),
the Pledgor hereby pledges and assigns to the Agent, for the benefit of the
Lenders, and grants to the Agent, for the benefit of the Lenders, a continuing
security interest in the following (collectively, the "Pledged Collateral"):
(a) Pledged Shares. All of the issued and outstanding shares
of stock set forth on Schedule 1 attached hereto, and all of the
issued and outstanding shares of stock set forth on Schedule 2
attached hereto, together with the certificates representing such
shares, and all options and other rights, contractual or otherwise,
with respect thereto (collectively the "Pledged Shares"),
including the following:
(i) all shares, securities, cash, property or rights
thereto representing a dividend on any of the
<PAGE> 2
Pledged Shares, or representing a distribution or return of capital
upon or in respect of the Pledged Shares, or resulting from a stock
split, revision, reclassification or other exchange therefor, and any
subscriptions, warrants, rights or options issued to the holder of, or
otherwise in respect of, the Pledged Shares; and
(ii) without affecting the obligations of the Pledgor under
any provision prohibiting such action hereunder, in the event
of any consolidation or merger in which Fruit of the Loom,
Inc. or Farley, Inc. is not the surviving corporation, all
shares and other rights of each class of the capital stock of
the successor corporation formed by or resulting from such
consolidation or merger.
(b) Proceeds. All proceeds and products of the Pledged
Collateral, however and whenever acquired and in whatever form.
Without limiting the generality of the foregoing, it is hereby
specifically understood and agreed that the Pledgor may from time to time
hereafter deliver additional shares of stock to the Agent as collateral
security for the Pledgor Obligations. Upon delivery to the Agent, such
additional shares of stock shall be deemed to be part of the Pledged Collateral
and shall be subject to the terms of this Stock Pledge Agreement whether or not
Schedule 1 or Schedule 2 is amended to refer to such additional shares.
SECTION 2. Security for Obligations. The security interest created
hereby in the Pledged Collateral constitutes continuing collateral security for
all of the following obligations, whether now existing or hereafter incurred
(the "Pledgor Obligations"):
(a) Payment. The prompt payment by the Pledgor, as and when
due and payable, of the Obligations under the Loan Agreement and the
other Loan Documents and all other amounts owing from time to time
by the Pledgor to the Agent or any Lender under the Loan Documents;
(b) Performance by the Pledgor. The due performance and
observance by the Pledgor of his obligations under this Stock Pledge
Agreement; and
(c) Other. All other obligations and liabilities of the
Pledgor to any Lender or the Agent whether now existing or hereafter
arising under the Loan Documents.
SECTION 3. Delivery of the Pledged Collateral.
(a) Delivery of Certificates. All certificates representing the
Pledged Shares set forth on Schedule 1 attached hereto shall be
delivered to the Agent simultaneously with or prior to the execution
and delivery of this Stock Pledge Agreement. All certificates
representing the Pledged
- 2 -
<PAGE> 3
Shares set forth on Schedule 2 attached hereto shall be delivered to the
Agent concurrently with their release by NatWest, UAW or NationsBank,
N.A., as applicable. All other certificates and instruments constituting
Pledged Collateral shall be delivered to the Agent promptly upon the
receipt thereof by or on behalf of the Pledgor. Prior to delivery to the
Agent, all such certificates and instruments shall be held by the
Borrower on behalf of the Lenders pursuant hereto. All such certificates
shall be delivered in suitable form for transfer by delivery or shall be
accompanied by duly executed instruments of transfer or assignment in
blank, all in form and substance satisfactory to the Agent.
(b) Additional Securities. If the Pledgor shall receive by virtue of
his being or having been the owner of any Pledged Collateral, any (i)
stock certificate, including without limitation, any certificate
representing a stock dividend or distribution in connection with any
increase or reduction of capital, reclassification, merger, consolidation,
sale of assets, combination of shares, stock splits, spin-off or
split-off, promissory notes or other instrument; (ii) option or right,
whether as an addition to, substitution for, or an exchange for, any
Pledged Collateral or otherwise; (iii) dividends payable in securities; or
(iv) distributions of securities in connection with a partial or total
liquidation, dissolution or reduction of capital, capital surplus or
paid-in surplus, then the Pledgor shall receive such stock certificate,
instrument, option, right or distribution in trust for the benefit of the
Lenders, shall segregate it from the Pledgor's other property and shall
deliver it forthwith to the Agent in the exact form received together with
any necessary endorsement and/or appropriate stock power duly executed in
blank, to be held by the Agent as Pledged Collateral and as further
collateral security for the Obligations.
(c) Financing Statements. The Pledgor shall execute and deliver to
the Agent such UCC financing statements as reasonably requested by the
Agent.
SECTION 4. Pledgor's Representations and Warranties. The Pledgor
represents and warrants the following:
(a) Authorization of Pledged Shares. The Pledged Shares are duly
authorized and validly issued, are fully paid and nonassessable and are
not subject to the preemptive rights of others. All other shares of stock
constituting Pledged Collateral will be duly authorized and validly
issued, fully paid and nonassessable and not subject to the preemptive
rights of any person.
(b) Title. Other than the Pledged Shares set forth on Schedule 2
attached hereto, which are encumbered as noted on such schedule, the
Pledgor has good and indefeasible title to the Pledged Collateral and will
at all times be the sole legal
- 3 -
<PAGE> 4
and beneficial owner of the Pledged Collateral free and clear of any Lien
except for the security interest created by this Stock Pledge Agreement
and except as described on Schedule 2.
(c) Exercising of Rights. The exercise by the Agent or any Lender of
its rights and remedies hereunder will not contravene any law or
governmental regulation or any contractual restriction binding on or
affecting the Pledgor or any of its property.
(d) Pledgor's Authority. No authorization, approval or action by, and
no notice or filing with any Governmental Authority or with the issuer of
the Pledged Stock is required either (i) for the pledge made by the
Pledgor or for the granting of the security interest by the Pledgor
pursuant to this Stock Pledge Agreement; or (ii) for the exercise by the
Agent or any Lender of its rights and remedies hereunder (except as may be
required by laws affecting the offering and sale of securities).
(e) Valid Security Interest. This Stock Pledge Agreement creates a
valid security interest in favor of the Lenders in the Pledged Collateral.
The taking possession by the Agent of the certificates representing the
Pledged Shares and all other certificates and instruments constituting
Pledged Collateral and, with respect to the portion of the Pledged
Collateral that consists of dividends, the filing of Uniform Commercial
Code financing statements in the appropriate jurisdictions, will perfect
and establish the first priority of the Lenders' security interest in the
Pledged Shares and in all other Pledged Collateral represented by such
certificates and instruments securing the Pledgor Obligations. Except as
set forth in this Section 4(e), no action is necessary to perfect or
otherwise protect such security interest.
(g) Litigation. No litigation or governmental proceeding is pending
or threatened against the Pledgor or any of his assets which if adversely
determined would have a material adverse effect on the Pledged Collateral
or the Pledgor's performance under this Stock Pledge Agreement or any
other Loan Document.
(h) Date of Acquisition. The Pledged Shares were acquired by the
Borrower on the dates set forth on Schedule 1 and Schedule 2 attached
hereto.
SECTION 5. Covenants as to the Pledged Collateral. So long as any of
the Pledgor Obligations shall remain outstanding, the Pledgor shall, unless the
Lenders shall otherwise consent in writing, do the following:
(a) Notices. The Pledgor shall promptly notify the Agent of (i) any
Lien or claim made or threatened against the Pledged Collateral; and (ii)
the occurrence or existence of
- 4 -
<PAGE> 5
any Event of Default, (as defined hereunder) or the occurrence or
existence of any condition or event that, with the giving of notice of
lapse of time or both, would be an Event of Default.
(b) Copies of Notices. The Pledgor shall, at his expense, promptly
deliver to the Agent (i) a copy of each notice or other communication
received by him that is likely to affect in any material respect the
Lenders' security interest in the Pledged Collateral or the value of the
Pledged Collateral and (ii) any and all reports and other information
received by the Pledgor as owner of the Pledged Collateral, including,
without limitation, any annual or quarterly reports, whether on Form 10-Q,
Form 10-K or otherwise, which information set forth in such notice, report
or other information described in clauses (i) and (ii) above is not
otherwise received by the Agent from the Pledgor or any affiliates of the
Pledgor.
(c) Defense of Title. The Pledgor shall, at his expense, warrant and
defend title to and ownership of the Pledged Collateral and the security
interest created hereby against the claims of all persons, and the Pledgor
will maintain and preserve such security interest at all times as
contemplated by this Stock Pledge Agreement and the Loan Agreement.
(d) Further Assurances. The Pledgor shall, at his expense, promptly
execute and deliver all further instruments and documents and take all
further action that may be necessary, desirable or that the Agent or any
Lender may reasonably request in order to (i) perfect and protect the
security interests created hereby; (ii) enable the Lenders to exercise and
enforce their rights and remedies hereunder in respect of the Pledged
Collateral, including, if necessary, completing and forwarding a Form 144
to the United States Securities and Exchange Commission; and (iii)
otherwise effect the purposes of this Stock Pledge Agreement, including,
without limitation and if requested by the Agent or any Lender, delivering
to the Agent irrevocable proxies in respect of the Pledged Collateral.
(e) Sale of Pledged Collateral. The Pledgor shall not sell, assign,
exchange or otherwise dispose of any of the Pledged Collateral or any
interest therein.
(f) Encumbrances. The Pledgor shall not create or allow to exist any
Lien upon or with respect to any of the Pledged Collateral except for (i)
the pledge hereunder and the security interest created hereby and (ii)
those encumbrances noted on Schedule 2 attached hereto.
(g) Amendments. The Pledgor shall not make or consent to any
amendment or other modification or waiver with respect to the Articles of
Incorporation of an issuer of the Pledged
- 5 -
<PAGE> 6
Shares if such amendment, modification or waiver would affect any of the
Pledged Collateral or enter into any agreement or allow to exist any
restriction with respect to any of the Pledged Collateral other than
pursuant hereto.
(h) Actions. The Pledgor shall not take or fail to take any action
that would impair in any material respect the value of or the
enforceability of the Lenders' security interest in any of the Pledged
Collateral.
(i) Compliance with Securities Laws. The Pledgor shall file or cause
to be filed all reports and other information now or hereafter required to
be filed with the United States Securities and Exchange Commission and any
other state or federal agency in connection with his ownership of the
Pledged Collateral.
SECTION 6. Rights of the Agent.
(a) Power of Attorney. The Pledgor hereby irrevocably appoints the
Agent and any officer or agent thereof the Pledgor's attorney-in-fact and
proxy, with full power of substitution for and on behalf and in the name
of the Pledgor or otherwise, during the existence and continuation of an
Event of Default (as defined herein), in the Agent's discretion, to take
any action and to execute any instrument which the Agent may deem
necessary or advisable to accomplish the purpose of this Stock Pledge
Agreement, and, without limiting the generality of the foregoing, hereby
gives the Agent the power and right on behalf of the Pledgor and in its
own name to do any of the following, without notice to or consent of the
Pledgor:
(i) to demand, sue for, collect or receive in the name of Agent
or the Lenders, any money or property at any time payable or
receivable on account of, or in exchange for, any of the Pledged
Collateral and, in connection therewith, endorse checks, notes,
drafts, acceptances, money orders, or any other instruments for the
payment of money under the Pledged Collateral;
(ii) to pay or discharge taxes, liens, security interests, or
other encumbrances levied or placed on or threatened against the
Pledged Collateral;
(iii) to direct any parties liable for any payment under any of
the Pledged Collateral to make payment of any and all monies due and
to become due thereunder directly to the Agent or as the Agent shall
direct;
(iv) to receive payment of and receipt for any and all monies,
claims, and other amounts due and to become due at any time in
respect of or arising out of any Pledged Collateral;
- 6 -
<PAGE> 7
(v) to sign and endorse any drafts, assignments, proxies, stock
powers, verifications, notices and other documents relating to the
Pledged Collateral;
(vi) to commence and prosecute any suit, actions or proceedings
at law or in equity in any court of competent jurisdiction to collect
the Pledged Collateral or any part thereof and to enforce any other
right in respect of any of the Pledged Collateral;
(vii) to defend any suit, action or proceeding brought
against the Pledgor with respect to any of the Pledged Collateral;
(viii) to settle, compromise or adjust any suit, action or
proceeding described above and, in connection therewith, to give such
discharges or releases as the Agent may deem appropriate; and
(ix) to exchange any of the Pledged Collateral or other property
upon any merger, consolidation, reorganization, recapitalization or
other readjustment of the issuer thereof and in connection therewith,
deposit any of the Pledged Collateral with any committee, depository,
transfer agent, registrar or other designated agency upon such terms
as the Agent may determine.
This power of attorney is a power coupled with an interest and shall be
irrevocable. The Agent shall be under no duty to exercise or withhold the
exercise of any of the rights, powers, privileges and options expressly or
implicitly granted to the Agent in this Stock Pledge Agreement, and shall not
be liable for any failure to do so or any delay in doing so. The Agent shall
not be liable for any act or omission or for any error of judgment or any
mistake of fact or law in its individual capacity or its capacity as
attorney-in-fact except acts or omissions resulting from its gross negligence
or willful misconduct. This power of attorney is conferred on the Agent solely
to protect, preserve and realize upon its security interest in the Pledged
Collateral.
(b) Performance by the Agent of the Pledgor's Obligations. If the
Pledgor fails to perform any agreement or obligation contained herein
within a reasonable period of time after request therefor by the Agent,
the Agent itself may perform, or cause performance of, such agreement or
obligation, and the reasonable expenses of the Agent incurred in
connection therewith shall be payable by the Pledgor pursuant to Section 9
hereof.
(c) Assignment by the Agent. The Agent may from time to time assign
the Pledgor Obligations and any portion thereof and/or the Pledged
Collateral and any portion thereof, and the assignee shall be entitled to
all of the rights and remedies of the Agent under this Stock Pledge
Agreement in relation thereto. Provided no Event of Default exists at the
time of
- 7 -
<PAGE> 8
such assignment, no such assignment shall be deemed to be effective unless
the Pledgor shall have consented thereto. Whether or not an Event of
Default exists at the time of such assignment, the Agent shall notify the
Pledgor thereof promptly upon consummation of such assignment.
(d) The Agent's Duty of Care. Other than the exercise of reasonable
care to assure the safe custody of the Pledged Collateral while being held
by the Agent hereunder, the Agent shall have no duty or liability to
preserve rights pertaining thereto, it being understood and agreed that
the Pledgor shall be responsible for preservation of all rights in the
Pledged Collateral, and the Agent shall be relieved of all responsibility
for the Pledged Collateral upon surrendering it or tendering the surrender
of it to the Pledgor. The Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Pledged Collateral
in its possession if the Pledged Collateral is accorded treatment
substantially equal to that which the Agent accords its own property, it
being understood that the Agent shall not have responsibility for (i)
ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relating to any Pledged
Collateral, whether or not the Agent has or is deemed to have knowledge of
such matters; or (ii) taking any necessary steps to preserve rights
against any parties with respect to any Pledged Collateral.
(e) Voting Rights in Respect of the Pledged Collateral.
(i) So long as no Event of Default (as defined herein) shall
have occurred and be continuing, the Pledgor may exercise any and all
voting and other consensual rights pertaining to the Pledged
Collateral or any part thereof for any purpose not inconsistent with
the terms of this Stock Pledge Agreement or the Loan Agreement;
(ii) Upon the occurrence and during the continuance of an Event
of Default, all rights of the Pledgor to exercise the voting and
other consensual rights which it would otherwise be entitled to
exercise pursuant to paragraph (i) of this Section shall cease and
all such rights shall thereupon become vested in the Agent which
shall thereupon have the sole right to exercise such voting and other
consensual rights.
(f) Dividend Rights in Respect of the Pledged Collateral.
(i) So long as no Event of Default shall have occurred and be
continuing, the Pledgor may receive and retain any and all dividends
or interest paid in respect of the Pledged Collateral.
- 8 -
<PAGE> 9
(ii) Upon the occurrence and during the continuance of
an Event of Default:
(A) all rights of the Pledgor to receive the dividends and
interest payments which it would otherwise be authorized to
receive and retain pursuant to paragraph (i) of this Section
shall cease and all such rights shall thereupon be vested in the
Agent which shall thereupon have the sole right to receive and
hold as Pledged Collateral such dividends and interest payments;
and
(B) all dividends and interest payments which are received
by the Pledgor contrary to the provisions of subparagraph (A) of
this Section shall be received in trust for the benefit of the
Lenders, shall be segregated from other property or funds of the
Pledgor, and shall be forthwith paid over to the Agent as
Pledged Collateral in the exact form received, to be held by the
Agent as Pledged Collateral and as further collateral security
for the Pledgor Obligations.
(g) Release of Collateral. The Agent may release any of the Pledged
Collateral from this Stock Pledge Agreement or may substitute any of the
Pledged Collateral for other Pledged Collateral without altering, varying
or diminishing in any way the force, effect, lien, pledge or security
interest of this Stock Pledge Agreement as to the Pledged Collateral not
expressly released or substituted, and this Stock Pledge Agreement shall
continue as a first priority lien, security interest, pledge and charge on
all Pledged Collateral not expressly released or substituted when any of
the Pledgor Obligations remain outstanding with respect to the Lenders.
SECTION 7. Events of Default.
The occurrence of an Event of Default under the Loan Agreement shall
constitute an Even of Default hereunder.
SECTION 8. Remedies Upon Default.
If any Event of Default shall have occurred and be continuing:
(a) Rights and Remedies. The Agent may exercise in respect of the
Pledged Collateral, in addition to other rights and remedies provided for
herein or otherwise available to it, all rights and remedies of a secured
party on default under the Uniform Commercial Code then in effect in the
State of North Carolina or any other applicable law.
(b) Sale of Pledged Collateral. Without limiting the generality of
this Section and without notice, except as
- 9 -
<PAGE> 10
specified below, the Agent may, in its sole discretion, but subject
to applicable securities laws, sell or otherwise dispose of or
realize upon the Pledged Collateral, or any part thereof, in one or
more parcels, at public or private sale, at any exchange or broker's
board or elsewhere, at such price or prices and on such other terms
as the Agent may deem commercially reasonable, for cash, credit or
for future delivery or otherwise in accordance with applicable law.
The Agent or any Lender may, in such event, bid for the purchase of
such securities. The Pledgor agrees that, to the extent notice of
sale shall be required by law, at least 10 days notice to the Pledgor
of the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification.
The Agent shall not be obligated to make any sale of Pledged
Collateral regardless of notice of sale having been given. The Agent
may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was
so adjourned.
(c) Private Sale. The Pledgor recognizes that the Agent or the
Lenders may deem it impracticable to effect a public sale of all or
any part of the Pledged Shares or any of the securities constituting
Pledged Collateral and that the Agent may, therefore, determine to
make one or more private sales of any such securities to a restricted
group of purchasers who will be obligated to agree, among other
things, to acquire such securities for their own account, for
investment and not with a view to the distribution or resale thereof.
The Pledgor acknowledges that any such private sale may be at prices
and on terms less favorable to the Pledgor than the prices and other
terms which might have been obtained at a public sale and,
notwithstanding the foregoing, agrees that such private sale shall be
deemed to have been made in a commercially reasonable manner and that
the Agent shall have no obligation to delay sale of any such
securities for the period of time necessary to permit the issuer of
such securities to register such securities for public sale under the
Securities Act. The Pledgor further acknowledges and agrees that any
offer to sell such securities which has been (i) publicly advertised
on a bona fide basis in a newspaper or other publication of general
circulation in the financial community of Chicago, Illinois (to the
extent that such offer may be advertised without prior registration
under the Securities Act), or (ii) made privately in the manner
described above shall be deemed to involve a "public sale" under the
Uniform Commercial Code as then in effect in the State of North
Carolina, notwithstanding that such sale may not constitute a "public
offering" under the Securities Act, and the Agent or any Lender may,
in such event, bid for the purchase of such securities.
(d) Retention of Pledged Collateral. The Agent, for the
benefit of the Lenders, may, after providing the notices
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<PAGE> 11
required by Section 9.505 of the Uniform Commercial Code in effect in
the State of North Carolina or otherwise complying with the
requirements of applicable law of the relevant jurisdiction, retain
the Pledged Collateral in satisfaction of the Pledgor Obligations.
Unless and until the Agent shall have provided such notices, however,
the Agent shall not be deemed to have retained any Pledged Collateral
in satisfaction of any Pledgor Obligations for any reason.
(e) Application of Proceeds. All cash proceeds received by the
Agent or any Lender in respect to any sale, collection from, or other
realization upon, all or any part of the Pledged Collateral shall be
applied in the order set forth in Section 3.7 of the Loan Agreement,
and the Pledgor irrevocably waives the right to direct the
application of such payments and proceeds and acknowledges and agrees
that the Agent shall have the continuing and exclusive right to apply
and reapply any and all such payments and proceeds in the Agent's
sole discretion, notwithstanding any entry to the contrary upon any
of its books and records.
(f) Deficiency. In the event that the proceeds of any sale,
collection or realization are insufficient to pay all amounts to
which the Agent or any Lender is legally entitled, the Pledgor shall
be liable for the deficiency, together with interest thereon at the
highest rate specified in the Loan Agreement for interest on overdue
principal thereof or such other rate as shall be fixed by applicable
law, together with the costs of collection and the reasonable fees of
any attorneys employed by the Agent or such Lender to collect such
deficiency.
SECTION 9. Indemnity and Expenses.
(a) Indemnity. The Pledgor agrees to indemnify the Agent and the
Lenders from and against any and all claims, losses and liabilities
growing out of or resulting from this Stock Pledge Agreement,
including without limitation, enforcement of this Stock Pledge
Agreement, except claims, losses and liabilities resulting from the
Agent's or a Lender's gross negligence or willful misconduct, as
determined by a court of appropriate jurisdiction in a final judgment
not subject to appeal or review.
(b) Payment. The Pledgor will, upon demand, pay to the Agent the
amount of any and all costs and expenses, including the reasonable
fees and disbursements of the Agent's counsel, and of any experts and
agents, which the Agent may incur in connection with (i) the
administration of this Stock Pledge Agreement; (ii) the custody, use
or operation of, or the sale of, collection from, or other
realization upon any Pledged Collateral; (iii) the exercise or
enforcement of any of the rights of the Agent or the Lenders
hereunder; or (iv) the failure by the Pledgor to perform or observe
any of the provisions hereof, except expenses resulting from the
Agent's
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<PAGE> 12
gross negligence or willful misconduct, as determined by a court of
appropriate jurisdiction in a final judgement not subject to appeal
or review.
SECTION 10. Notices.
All notices and other communications provided for hereunder shall be
deemed effective if in writing and delivered in conformance with Section 9.1 of
the Loan Agreement.
SECTION 11. Miscellaneous.
(a) Amendments; Continuation of Security Interests. No
amendment of any provision of this Stock Pledge Agreement shall be
effective unless it is in writing and signed by the Pledgor and the
Agent, and no waiver of any provision of this Stock Pledge Agreement,
and no consent to any departure by the Pledgor therefrom, shall be
effective unless it is in writing and signed by the Agent, and then
such waiver or consent will be effective only in the instance and for
the specific purpose for which given.
(b) No Waivers; Cumulative Remedies. No failure on the part of
the Agent to exercise, and no delay in exercising any right hereunder
or under the Loan Agreement shall operate as a waiver thereof; nor
shall any single or partial exercise of any such right preclude any
other or further exercise thereof or the exercise of any other right.
The rights and remedies of the Agent and the Lenders in this Agreement
and in the Loan Agreement are cumulative and are in addition to, and
not exclusive of, any rights or remedies provided by law.
(c) Severability. Any provision of this Stock Pledge Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
invalidity without invalidating the remaining portions hereof or
thereof or effecting the validity or enforceability of such provision
in any other jurisdiction.
(d) Agreement in Full Force; Successors and Assigns. This Stock
Pledge Agreement shall create a continuing security interest in the
Pledged Collateral and shall (i) remain in full force and effect until
payment in full or release of the Pledgor Obligations; and (ii) be
binding on the Pledgor and permitted assigns and shall inure, together
with all rights and remedies of the Agent and the Lenders hereunder to
the benefit of the Agent and the Lenders and their successors,
transferees and assigns. Without limiting the generality of the
foregoing, but subject to the last two sentences of Section 6(c)
hereof, the Agent or any Lender may assign or otherwise transfer their
rights and/or duties under this Stock Pledge Agreement to any other
person, and such other person shall thereupon become vested with all
of the benefits and respect thereof granted to the Agent or the Lender
herein or
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<PAGE> 13
otherwise. None of the rights or obligations of the Pledgor hereunder may
be assigned or otherwise transferred without prior written consent of the
Agent and the Lenders.
(e) Satisfaction of Obligations. Upon the satisfaction in full of the
Pledgor Obligations, this Stock Pledge Agreement (and the security
interest created hereby) shall terminate and all rights to the Pledged
Collateral shall revert to the Pledgor. The Agent shall, upon the
Pledgor's request and at the Pledgor's expense (i) return to the Pledgor
such of the Pledged Collateral as shall not have been sold or otherwise
disposed of or applied pursuant to the terms hereof; and (ii) execute and
deliver to the Pledgor such documents as the Pledgor shall reasonably
request to evidence such termination.
(f) Headings. The headings, captions and agreements used in this
Stock Pledge Agreement are for convenience only and shall not affect the
interpretation of this Stock Pledge Agreement.
(g) Obligations Absolute. The obligations of the Pledgor under this
Stock Pledge Agreement shall be absolute and unconditional and shall not
be released, discharged, reduced or in any way impaired by any
circumstance whatsoever, including without limitation, any amendment,
modification, extension or renewal of this Stock Pledge Agreement, the
Pledgor Obligations, any document or instrument evidencing, securing or
otherwise relating to the Pledgor Obligations, any release, subordination
or impairment of the Pledged Collateral, any waiver, consent, extension,
indulgence, compromise, settlement or other action or inaction in respect
of this Stock Pledge Agreement, the Pledgor Obligations, the pledged
Collateral or any document or instrument evidencing, securing, or
otherwise relating to the Pledgor Obligations, or any exercise or failure
to exercise any right, remedy, power or privilege in respect to the
Pledgor Obligations.
(h) Governing Law; Venue.
(i) THIS STOCK PLEDGE AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH
CAROLINA. Any legal action or proceeding with respect to this Stock
Pledge Agreement may be brought in the courts of the State of North
Carolina in Mecklenburg County, or of the United States for the
Western District of North Carolina, and, by execution and delivery of
this Stock Pledge Agreement, the Pledgor hereby irrevocably accepts
for himself and in respect of his property, generally and
unconditionally, the jurisdiction of such courts. The Pledgor further
irrevocably consents to the service of process out of any the
aforementioned courts in any such action or proceeding by the mailing
of copies thereof by registered
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<PAGE> 14
or certified mail, postage prepaid, to his address for notices
pursuant to Section 9.1 of the Loan Agreement, such service to become
effective thirty (30) days after such mailing. Nothing herein shall
affect the right of the Agent to serve process in any other manner
permitted by law or to commence legal proceedings or to otherwise
proceed against the Pledgor in any other jurisdiction.
(ii) The Pledgor hereby irrevocably waives any objection which
he may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with
this Stock Pledge Agreement brought in the courts referred to in
subsection (i) hereof and hereby irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding
brought in any such court has been brought in an inconvenient forum.
(i) Waiver of Jury Trial. EACH OF THE PARTIES TO THIS STOCK PLEDGE
AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS STOCK PLEDGE
AGREEMENT, ANY OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
- 14 -
<PAGE> 15
Schedule 1
Certificate Number of
Name of Shares Numbers Date Acquired Shares
- -------------- ----------- ------------- -------
<TABLE>
<S> <C> <C> <C>
Fruit of the Loom, Inc. B106 02/11/88 245,012
Class B Common Stock B111 02/11/88 160,000
B130 12/30/92 800,000
B134 12/30/92 84,200
B135 02/11/88 250,000
B140 02/11/88 476,080
B141 02/11/88 500,000
B146 02/11/88 7,689
B148 02/11/88 17,000
B151 02/11/88 75,000
B152 02/11/88 10,000
B154 02/11/88 81,220
B170 12/30/92 17,553
B176 12/30/92 ---
Total 2,745,201
=========
Farley, Inc. 14 7/7/93 18,749
Total 18,749
======
</TABLE>
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<PAGE> 16
The Pledgor has caused this Stock Pledge Agreement to be duly
executed and delivered, as of the date first above written.
/s/ William F. Farley
_____________________
WILLIAM F. FARLEY
Accepted as of the date
first above written.
NATIONSBANK, N.A., as Agent
By: /s/ Carter E. Smith
-----------------------
Name: CARTER E. SMITH
---------------------
Title: Vice President
--------------------
<PAGE> 1
EXHIBIT 99.h
GUARANTY OF PAYMENT
THIS GUARANTY OF PAYMENT is made as of June 27, 1994 by FRUIT OF THE
LOOM, INC., a Delaware corporation (the "Guarantor"), in favor of NATIONSBANK
OF FLORIDA, N.A. a national banking corporation (the "Lender").
W I T N E S S E T H
WHEREAS, Lender has been requested to make a loan in the sum of U.S.
$12,000,000.00 (the "Loan") to William F. Farley (the "Borrower"), evidenced by
a Revolving Promissory Note dated as of June 27, 1994 (the "Note"); and
WHEREAS, the Note and all other instruments and documents executed by
Borrower or Guarantor in favor of Lender in connection with the Loan are
referred to herein as the "Credit Documents", and the Loan and all other
debts, obligations and liabilities of Borrower to Lender under the Credit
Documents from time to time are referred to herein as the "Obligations";
WHEREAS, Guarantor will be benefitted if Borrower borrows said sum from
Lender because Guarantor is receiving from Borrower, as consideration for
execution of this Guaranty, a second priority pledge and security interest
(subordinate to the rights of Lender) in certain stock owned by Borrower and
defined as the "Securities" in that certain General Security Agreement made by
Borrower to Lender dated as of the 18th day of December, 1992, as amended, and
because Guarantor otherwise has or may have other interests, directly or
indirectly, in the transactions to be funded with the Loan; and
WHEREAS, Lender has declined to make the Loan to Borrower unless
Guarantor unconditionally guarantees the payment of the obligations;
NOW, THEREFORE, in consideration of Lender's agreement to advance Loan
funds to Borrower, Guarantor hereby unconditionally guarantees to Lender, its
successors and assigns, the prompt and full payment of the Obligations.
1. Guarantor shall pay any Obligations that are not paid as and when
required of Borrower under the Credit Documents (including the expiration of
any applicable grace period set forth therein). Each such sum may be recovered
in a separate action as it comes due, or, in the event that Lender shall
accelerate the maturity of the Obligations in accordance with the Credit
Documents, Guarantor shall promptly pay all sums which become due and payable
on such acceleration of maturity. Lender shall have the absolute right to
<PAGE> 2
seek one or more money judgments for each cause of action based solely upon
this Guaranty.
2. The obligations of Guarantor under this Guaranty are direct,
unconditional and completely independent of the obligations of Borrower.
Lender may exercise any of its rights under this Guaranty, including without
limitation bringing and prosecuting any action against Guarantor, without any
requirement that Lender join Borrower as a party to the action, or proceed
against any security then held by Lender for the Obligations, or notify or make
demand upon or proceed against or exhaust any other remedy against Borrower,
any other guarantor of the Obligations, or any other person who might have
become liable for the Obligations. Guarantor hereby waives and renounces all
benefits of discussion and division.
3. The liability assumed under this Guaranty shall not be affected by
Lender's acceptance of any settlement or composition offered by Borrower or
decreed with respect to Borrower by any court, either in liquidation,
readjustment, receivership, bankruptcy or otherwise, except only to the extent
that such settlement has resulted in actual payment of a part of the
Obligations, and then only to that extent. This Guaranty shall continue and
remain in full force and effect (or shall be reinstated, as the case may be) in
the event that all or part of any payment made by Borrower in connection with
the Obligations is recovered from Lender as a preference, fraudulent transfer
or similar voidable payment under any bankruptcy or insolvency law.
4. This instrument in a continuing, binding, absolute and unconditional
guaranty of payment which shall remain in full force and effect until actual
payment in full of the Obligations or until terminated by written agreement
between Lender and Guarantor.
5. Guarantor hereby waives any and all defenses to any action or
proceeding brought to enforce this Guaranty or any part of this Guaranty, except
the single defense that the sum claimed has actually been paid to Lender.
Without limiting the foregoing in any way, but merely by way of illustration,
Guarantor hereby specifically waives all technical, dilatory or nonmeritorious
defenses, and any defense predicated upon:
(a) Incapacity, disability or lack of authority on the part of
Borrower or any other person; or
(b) Any change or modification or extension or waiver of any term of
the Obligations or any Credit Document, or any indulgence or forbearance or
delay on the part of Lender in the enforcement of any term of the Obligations
or any Credit Document, or any other or further dealings or agreements between
Lender and Borrower or between Lender and any other guarantors or sureties for
all or any part of the Obligations; or
- 2 -
<PAGE> 3
(c) Any failure to perfect, release of, substitution for, addition
to, increase in or impairment of all or any part of the security for the
Obligations or this Guaranty, whether for valuable consideration or otherwise;
or
(d) The fact that there may now or hereafter be other guarantors or
sureties liable for all or any part of the Obligations, or that solvent persons
other than Borrower or Guarantor may have undertaken the payment of all or any
part of the Obligations, whether in connection with any transfer of any
collateral for the Obligations or otherwise; or
(e) The full or partial release or discharge of Borrower or any other
present or future guarantors or sureties for all or any part of the
Obligations; or
(f) Any other act or omission by Lender or failure by Lender to
proceed promptly or diligently, or any other matter which might, but for this
waiver by Guarantor, be deemed a legal or equitable release or discharge of a
surety or guarantor, regardless of whether such act or omission or failure or
other matter varies or increases the risk of Guarantor or affects or impairs
the rights or remedies of Guarantor.
6. Lender shall not be required to notify Guarantor of (a) Lender's
acceptance of this Guaranty, (b) any disbursements of funds by or on behalf of
Lender, (c) any modification of any other document executed by Borrower or any
other guarantor or surety in connection with the Obligations, nor (d) any
default by Borrower under the Obligations or by any other guarantor or surety
for all or any part of the Obligations. Guarantor hereby waives presentment
for payment, demand, protest, notice of protest or dishonor, notice of default,
and any other notice or demand whatsoever before Lender commences to enforce
its rights under this Guaranty, whether by judicial proceedings or in any other
manner. Lender shall have no obligation whatsoever to disclose to Guarantor
any information Lender may now possess or hereafter obtain about Borrower,
regardless of whether (i) Lender has reason to believe that such information
materially increases the risk of Guarantor beyond that which Guarantor intends
to assume hereunder, or (ii) Lender has reason to believe that such information
is unknown to Guarantor, or (iii) Lender has a reasonable opportunity to
communicate such information to Guarantor; Guarantor understands and agrees
that Guarantor is fully responsible for being and keeping informed of the
financial condition of Borrower and of all circumstances bearing on the risk of
failure to repay the Obligations.
7. Until the Obligations shall have actually been paid in full,
Guarantor hereby (a) agrees not to seek reimbursement or repayment from
Borrower or the liquidation of any security for the Obligations by reason of
having paid monies pursuant to this
- 3 -
<PAGE> 4
Guaranty, (b) waives any right to enforce any remedy as subrogees of Lender or
its successors and assigns or to participate in the Obligations or in any
security for the Obligations, (c) agrees not to seek or accept repayment or
reimbursement from Borrower of any sums advanced, contributed or lent to
Borrower by Guarantor, all of which are hereby subordinated and postponed to
the full repayment of the Obligations, and (d) agrees not to seek or accept any
distributions or dividends by Borrower.
8. Guarantor agrees to pay any expenses incurred by Lender in the
collection or enforcement of this Guaranty, including reasonable costs and
attorney's fees (including those incurred for appellate or administrative or
bankruptcy proceedings) in the event that Lender shall be obliged to resort to
the courts or require the services of an attorney to collect under this
Guaranty.
9. The rights and authority granted to Lender in this Guaranty shall
inure to the benefit of its successors and assigns, and the agreements by
Guarantor contained in this Guaranty shall bind Guarantor and Guarantor's
successors and assigns, jointly and severally.
10. Lender may assign this Guaranty, in whole or as to such part which
has not been realized upon, to any assignee(s) or transferee(s) of the
Obligations without prior notice to or the consent of Guarantor.
11. Time shall be of the essence with respect to all of the
provisions of this Guaranty.
12. Any provision of this Guaranty which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction only, be ineffective only to
the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof or affecting the validity or enforceability of such
provision in any other jurisdiction.
13. Whenever used in this Guaranty and unless the context otherwise
requires, words in the singular include the plural, words in the plural include
the singular, and pronouns of any gender include the other genders. All
references in this Guaranty to numbered paragraphs refer to the paragraphs of
this Guaranty, unless such reference specifically identifies another document.
All references in this Guaranty to sums expressed in dollars refer to the
lawful currency of the United States of America, unless such reference
specifically identifies another currency.
14. This Guaranty shall be governed by, and construed and enforced in
accordance with, the laws of the State of Florida, except that federal law
shall govern to the extent that it may permit Lender to charge interest from
time to time at a rate greater than may be permissible under Florida law.
Nothing con-
- 4 -
<PAGE> 5
tained in this Guaranty shall be construed as obligating Guarantor in any way
to be responsible for interest in excess of the maximum rate permitted by
applicable law.
15. Guarantor hereby WAIVES TRIAL BY JURY and submits to the
jurisdiction of the state and federal courts in the State of Florida for
purposes of any action arising from or growing out of this Guaranty, and
further agrees that the venue of any such action may be laid in Broward County
and that (in addition to any other method provided by law for service of
process) service of process in any such action may be made on Guarantor by the
delivery of the process to Katten, Muchin & Zavis, Attn: Susan Schneider, Esq.,
whose present address is 525 West Monroe Street, Suite 1600, Chicago, Illinois
60661, whom Guarantor hereby appoints as Guarantor's agent for service of
process. Nothing contained in this Guaranty, however, shall be deemed to
constitute, or to imply the existence of, any agreement by Lender to bring any
such action only in said courts or to restrict in any way any of Lender's
remedies or rights to enforce the terms of this Guaranty as, when and where
Lender shall deem appropriate, in its sole discretion.
16. If for the purposes of obtaining judgment against Guarantor in any
court it becomes necessary to convert a sum due in U.S. dollars into another
currency, then the rate of exchange used shall be that at which Lender could
purchase U.S. dollars with the other currency in accordance with normal banking
procedures on the business day preceding the day on which final judgment is
obtained. Notwithstanding any judgment in such other currency, the obligations
of Guarantor hereunder shall be discharged only to the extent that (i) Lender
can purchase U.S. dollars with the other currency in accordance with normal
banking procedures on the business day following Lender's receipt of any such
sum adjudged to be due in the other currency, and (ii) Lender can remit the
purchased U.S. dollars to its office at its address for notices set forth in
the Credit Documents. If the U.S. dollars so purchased and remitted are less
than the sum owing to Lender in U.S. dollars before the judgment, then
Guarantor agrees, as a separate obligation and notwithstanding any such
judgment, to indemnify Lender on demand against such loss.
17. In order to induce Lender to extend credit to Borrower, and knowing
that Lender shall rely on the following warranties and representations,
Guarantor represents and warrants to Lender that: (a) if Guarantor is a natural
person, then Guarantor has full legal capacity; (b) if Guarantor is a business
entity, then (i) Guarantor is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its creation, has full power and
authority to make this Guaranty in favor of Lender, and has duly authorized the
execution, delivery and performance of this Guaranty by all necessary actions,
and (ii) the execution, delivery and performance of this Guaranty do not and
shall not violate any provision of Guarantor's governing or constituent
documents; (c)
- 5 -
<PAGE> 6
Guarantor shall be benefitted if Lender extends credit to Borrower; (d) the
execution, delivery and performance of this Guaranty do not and shall not
contravene any applicable law, nor result in a breach of or default under any
other agreement to which Guarantor is a party or by which Guarantor may be
bound or affected; (e) except as otherwise previously or concurrently disclosed
to Lender in writing or in any filing made by Guarantor with the Securities and
Exchange Commission, there are no material suits, actions or proceedings
pending or threatened against or affecting Guarantor before any court of law or
equity or any administrative board or tribunal or governmental authority; (f)
Guarantor is not in material default under the terms of any other indebtedness
or obligation of Guarantor or with respect to any order, writ, injunction,
judgment, decree or demand of any court or tribunal or governmental authority;
and (g) Guarantor has received good, valuable and adequate consideration from
Borrower for the execution and delivery to Lender of this Guaranty.
<PAGE> 7
18. GUARANTOR, BY ITS EXECUTION HEREOF, AND LENDER, BY ITS
ACCEPTANCE HEREOF, EACH AGREES NOT TO SEEK A JURY TRIAL IN ANY LAWSUIT,
PROCEEDING, COUNTERCLAIM, OR ANY OTHER LITIGATION PROCEDURE (WHETHER AT LAW OR
IN EQUITY) BASED UPON OR ARISING OUT OF THIS GUARANTY, THE LOAN OR ONE OR MORE
OF THE CREDIT DOCUMENTS OR ANY OTHER DOCUMENTS, INSTRUMENTS OR AGREEMENTS
EXECUTED OR ENTERED INTO IN CONNECTION WITH THIS GUARANTY, THE LOAN OR THE LOAN
DOCUMENTS. NEITHER ENTITY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION IN WHICH A
JURY TRIAL HAS BEEN WAIVED, WITH ANY ACTION IN WHICH A JURY TRIAL CANNOT BE OR
HAS NOT BEEN WAIVED. THE PROVISIONS OF THIS WAIVER HAVE BEEN FULLY DISCUSSED BY
GUARANTOR AND LENDER, AND THE PROVISIONS HEREOF SHALL BE SUBJECT TO NO
EXCEPTIONS. GUARANTOR AND LENDER HAVE HAD THE OPPORTUNITY TO HAVE THIS WAIVER
REVIEWED BY LEGAL COUNSEL OF THEIR CHOICE. NO SUCH ENTITY HAS IN ANY WAY AGREED
WITH OR REPRESENTED TO THE OTHER THAT THE PROVISIONS OF THIS WAIVER WILL NOT BE
FULLY ENFORCED IN ALL INSTANCES.
THIS WAIVER IS BINDING UPON AND SHALL INURE TO THE BENEFIT OF LENDER
AND GUARANTOR, AND THEIR RESPECTIVE SUCCESSORS, ASSIGNS, PARTNERS, PRINCIPALS,
AGENTS, SHAREHOLDERS, OFFICERS, DIRECTORS, LEGAL AND PERSONAL REPRESENTATIVES,
EXECUTORS, ADMINISTRATORS, HEIRS AND OTHER TRANSFEREES.
IN WITNESS WHEREOF, Guarantor has executed this Guaranty under seal on
June 27, 1994, to be effective on the date first written above.
Signed, sealed and delivered
in the presence of:
FRUIT OF THE LOOM, INC., a
Delaware corporation
By:
- ---------------------- --------------------------
Name: Earl C. Shanks
- ---------------------- -----------------------
Title: Vice President
----------------------
[CORPORATE SEAL]
- 7 -
<PAGE> 8
STATE OF ILLINOIS )
) SS:
COUNTY OF COOK )
The foregoing instrument was acknowledged before me this 29th day of
June, 1994 by Earl C. Shanks as Vice President of FRUIT OF THE LOOM, INC., a
Delaware corporation, on behalf of the corporation. He/she/they personally
appeared before me, is/are personally known to me or produced _________________
_____________ as identification, and [did] [did not] take an oath.
Notary: /s/ Tsuneko S. Nakagawa
--------------------------------
Print Name: Tsuneko S. Nakagawa
----------------------------
[NOTARIAL SEAL] Notary Public, State of Illinois
-------------------
My commission expires: Jan. 28, 1998
-------------------
- 8 -
<PAGE> 1
EXHIBIT 99.i
RATIFICATION OF GUARANTY
THIS RATIFICATION OF GUARANTY (the "Ratification") is given as of the
1st day of July, 1995 by FRUIT OF THE LOOM, INC., a Delaware corporation (the
"Guarantor") in order to induce NATIONSBANK OF FLORIDA, N.A., a national
banking corporation (the "Lender"), to make a renewal loan to WILLIAM F. FARLEY,
an individual (the "Borrower").
RECITALS
WHEREAS, Borrower obtained from Lender a revolving loan in the
principal amount of TWELVE MILLION AND NO/100 DOLLARS ($12,000,000.00) (the
"Original Loan"), which Original Loan is evidenced by that certain Revolving
Promissory Note which was executed by Borrower on June 27, 1994 (the "Note")
and which was guaranteed by Guarantor by that certain Guaranty Agreement
("Guaranty Agreement") dated June 27, 1994, to induce Lender to make the Loan
to Borrower; and
WHEREAS, Borrower wishes to obtain from Lender a renewal of the
Original Loan (the "Renewal Loan"), which Renewal Loan is evidenced by a
Renewal Revolving Promissory Note in the principal amount of TWELVE MILLION AND
NO/100 DOLLARS ($12,000,000.00), executed by Borrower, payable to the order of
Lender (the "Renewal Note"); and
WHEREAS, Lender has required as a condition to entering into the
Renewal Note that the Guarantor ratify the Guaranty Agreement.
NOW, THEREFORE, in consideration of the foregoing, the mutual
covenants, representations, warranties and agreements contained herein, the sum
of TEN AND NO/100 DOLLARS ($10.00) and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Guarantor hereby
ratifies the Guaranty Agreement as being in full force and effect both prior to
and following the entry into the Renewal Note as if the Renewal Loan were
always a part of the Original Loan and absolutely and unconditionally
guarantees to Lender, its successors and assigns (whether collateral assigns or
otherwise), the prompt and full payment and performance to Lender of that
certain Renewal Note executed herewith in the original principal amount of
$12,000,000.00, together with any extensions, renewals or modifications
thereof, in connection with which either as maker, drawer, guarantor, endorser
or otherwise, whether directly, indirectly or contingently, Borrower is, either
individually or jointly or severally with any other person or persons, now or
shall become at any time in the future liable to Lender, with interest theron
at the rate or rates provided in the Renewal Note guaranteed hereby or at the
maximum rate allowed from time to time by law in Florida, whichever is less,
until payment in full has been received by Lender, together with all attorney's
fees, costs and expenses of collection whether suit be brought or not,
including costs, expenses and attorney's fees on appeal if an appeal is taken
from any suit, incurred by Lender, in connection with any matter covered by
this Ratification.
Notwithstanding anything set forth to the contrary in the Guaranty
Agreement, any controversey or claim between or among the parties hereto
including but not limited to those arising out of or relating to this
Ratification or any related agreements or instruments, including any claim
based on or arising from an alleged tort, shall be determined by binding
arbitration in accordance with the Federal Arbitration Act (or if not
applicable, the applicable state law), the Rules of Practice and Procedure for
the Arbitration of Commercial Disputes of Judicial Arbitration and Mediation
Services, Inc. (J.A.M.S.), and the "Special Rules" set forth below. In the
event of any inconsistency, the Special Rules shall control. Judgment upon any
arbitration award may be entered
<PAGE> 2
in any court having jurisdiction. Any party to this Ratification may bring an
action, including a summary or expedited proceeding, to compel arbitration of
any controversy or claim to which this Ratification applies in any court having
jurisdiction over such action.
(a) SPECIAL RULES. The arbitration shall be conducted in Tampa,
Florida, the city of Lender's headquarters at the time of this Ratification's
execution and administered by J.A.M.S. who will appoint an arbitrator; if
J.A.M.S. is unable or legally precluded from administering the arbitration,
then the American Arbitration Association will serve. All arbitration hearings
will be commenced within 90 days of the demand for arbitration, further, the
arbitrator shall only, upon a showing of cause, be permitted to extend the
commencement of such hearing for up to an additional sixty (60) days.
(b) RESERVATIONS OF RIGHTS. Nothing in this Ratification shall be
deemed to (i) limit the applicability of any otherwise applicable statutes of
limitation or repose and any waivers contained in this Ratification; or (ii) be
a waiver by the Lender of the protection afforded to it by 12 U.S.C. Sec. 91 or
any substantially equivalent state law; or (iii) limit the right of the Lender
hereto (A) to exercise self help remedies such as (but not limited to) setoff,
or (B) to foreclose against any real or personal property collateral, or (C) to
obtain from a court provisional or ancillary remedies such as (but not limited
to) injunctive relief or the appointment of a receiver. The Lender may exercise
such self help rights, foreclose upon such property, or obtain such provisional
or ancillary remedies before, during or after the pendency of any arbitration
proceeding brought pursuant to this Ratification. Neither the exercise of self
help remedies nor the institution or maintenance of an action for foreclosure
or provisional or ancillary remedies shall constitute a waiver of the right of
any party, including the claimant in any such action, to arbitrate the merits
of the controversy or claim occasioning resort to such remedies.
IN WITNESS WHEREOF, the Guarantor has executed this Agreement as of the
date set forth below.
Signed, sealed and delivered
in the presence of:
FRUIT OF THE LOOM, INC., A
Delaware corporation
Leslie L. Gotaas By: Earl C. Shanks
- ---------------------------- -----------------------
Joyce Privit Name: Earl C. Shanks
- ---------------------------- ---------------------
Title: Vice President
--------------------
[CORPORATE SEAL]
STATE OF ILLINOIS )
) SS:
COUNTY OF COOK )
The foregoing instrument was acknowledged before me this ________ day
of September, 1995 by Earl C. Shanks as Vice President of FRUIT OF THE LOOM,
INC., a Delaware corporation, on behalf of the corporation. He/she/they
personally appeared before me, is/are personally known to me or produced
drivers license as identification, and [did] [did not] take an oath.
Notary: Donna Budimir
--------------------------
[NOTARIAL SEAL] Print Name: Donna Budimir
----------------------
Notary Public, State of Illinois
----------
My commission expires: 2-19-99
-----------
"OFFICIAL SEAL"
DONNA BUDIMIR
NOTARY PUBLIC, STATE OF ILLINOIS
MY COMMISSION EXPIRES 2/19/99
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<PAGE> 1
EXHIBIT 99.j
GENERAL SECURITY AGREEMENT
1. THE COLLATERAL. For value received, WILLIAM F. FARLEY (the
"Debtor") hereby pledges, assigns and grants to NATIONSBANK OF FLORIDA, N.A., a
national banking corporation (the "Secured Party"), with full recourse to
Debtor and subject to the provisions of this Agreement, a security interest in
the following described personal property (the "Collateral"):
(a) The following described Securities (as defined below):
800,000 shares of Class "B" common stock of Fruit of the Loom,
Inc., as evidenced by Certificate No. B130
(b) All General Intangibles, rights, powers, privileges
and preferences pertaining or incidental to any Securities pledged and
assigned hereunder from time to time, and any interest, stock rights,
rights to subscribe, cash distributions, dividends, stock dividends,
dividends paid in stock, liquidating dividends, new securities
(whether certificated or uncertificated) and other property to which
Debtor may become entitled by reason of the ownership of any
Securities pledged and assigned hereunder from time to time.
(c) All Proceeds and profits of any Collateral, all
increases and additions to any Collateral and all replacements and
substitutions for any Collateral, including without limitation any
proceeds of any insurance, indemnity, warranty or guaranty payable
with respect to any Collateral, any awards or payments due or payable
in connection with any requisition, confiscation, seizure or
forfeiture of any Collateral by any person acting under governmental
authority or color thereof, and any damages or other amounts payable
to Debtor in connection with any lawsuit regarding any of the
Collateral.
(d) All monies, bank accounts, balances, credits,
deposits, collections, drafts, bills, notes and other property of
every kind (whether tangible or intangible) now owned or hereafter
acquired by Debtor and at any time in the actual or constructive
possession of (or in transit to) Secured Party or its correspondents
or agents in any capacity or for any purpose.
2. THE OBLIGATIONS. The Collateral secures and will secure the
prompt and unconditional payment of the "Obligations." As used in this
Agreement, the term "Obligations" means all amounts of any nature whatsoever
now or hereafter owing in respect of all loans and extensions of credit made by
Secured Party to Debtor or any other Obligor (as defined in paragraph 3 below)
from time to time
<PAGE> 2
and all renewals and extensions thereof, all other obligations, indebtedness
and liabilities of any nature whatsoever of Debtor or any other Obligor to
Secured Party, and all claims of Secured Party against Debtor or any other
Obligor of any kind or description, whether now existing or hereafter incurred
or created, whether arising under this Agreement or otherwise, whether
voluntary or involuntary, contractual or tortious, liquidated or unliquidated,
direct or indirect, absolute or contingent, secured or unsecured, due or to
become due, howsoever evidenced and whether incurred directly to Secured Party
or acquired by Secured Party by assignment or otherwise, including without
limitation those arising under or in connection with that certain Secured
Revolving Promissory Note of even date herewith (the "Note"), in the original
amount of $26,000,000.00, made by Debtor to Secured Party.
3. CERTAIN DEFINITIONS. For purposes of this Agreement, unless
Debtor shall have otherwise agreed in writing, the Obligations shall not
include any "consumer credit" subject to the disclosure requirements of the
Federal Consumers Credit Protection Act (Truth-in-Lending Act) or any
regulations promulgated thereunder. As used in this Agreement: (a) the term
"Obligors" means Debtor as well as all endorsers, sureties, guarantors,
accommodation parties and any other persons liable or to become liable directly
or indirectly with respect to the Obligations (expressly excluding Fruit of the
Loom, Inc., as issuer of the Securities); (b) the term "Securities" means any
notes, stocks, treasury stocks, bonds, debentures, evidences of indebtedness,
warrants, partnership interests, stock options, beneficial interests in trusts,
or equity interests of any nature whatsoever in any legal entity or, in
general, any interest or instrument commonly known as a "security," or any
warrant or right to subscribe to or purchase any of the foregoing; (c) the term
"issuer" means, with respect to any Securities, the legal entity in which such
Securities evidence an ownership or beneficial interest; (d) the term "Loan
Documents" means this Agreement and all promissory notes, loan agreements,
credit agreements, guaranties, mortgages, security agreements, assignments,
contracts, indemnity agreements and other instruments or writings executed by
any Obligor in favor of Secured Party in connection with the Obligations; and
(e) the term "organic documents" means the issuer's articles of incorporation
and by-laws, memorandum of association and articles of association, or
comparable documents. All capitalized terms used but not otherwise defined in
this Agreement shall have the respective meanings given them in the Florida
Uniform Commercial Code.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS. Debtor acknowledges
and agrees that Secured Party is relying on the representations and warranties
and covenants in this Agreement and all other Loan Documents as a condition
precedent to the extension(s) of credit secured hereby, and that all such
representations and warranties and covenants shall survive the execution and
delivery of this Agreement, the extension(s) of credit and any bankruptcy,
- 2 -
<PAGE> 3
insolvency or similar proceedings. Debtor hereby represents and warrants to
Secured Party and covenants for the benefit of Secured Party as follows:
(a) Debtor is (and with respect to all Collateral
acquired hereafter, shall be) the sole legal and equitable owner of
the Collateral free from any adverse claim, lien, security interest,
encumbrance or other right, title or interest of any person except for
the security interest created hereby. Debtor has the unqualified right
and power to grant a security interest in the Collateral without the
consent of any person (other than any person whose written consent has
been duly obtained, a true and correct copy of such consent having
been delivered to Secured Party), and Debtor shall at Debtor's expense
defend the Collateral against all claims and demands of all persons at
any time claiming the Collateral or any interest therein adverse to
Secured Party. Debtor shall not create, grant nor suffer to exist any
pledge, security interest, lien, levy, garnishment, attachment, charge
or encumbrance upon any of the Collateral (except in favor of Secured
Party) and shall at all times keep the Collateral free from the same.
(b) All Securities pledged and assigned hereunder are
(and with respect to all Collateral acquired hereafter, shall be) duly
authorized and validly issued, fully paid and nonassessable,
authentic, genuine, unaltered and not stolen or forged or counterfeit,
and in all respects what they purport to be. Except as otherwise
disclosed in writing to Secured Party simultaneously with or prior to
the execution of this Agreement, the Collateral is freely tradeable
and assignable and is not subject to any restrictions on transfer or
resale or other disposition in any manner.
(c) To the best of Debtor's knowledge after due inquiry
and investigation, each issuer of Securities pledged and assigned
hereunder is a duly-organized and validly existing legal entity in
good standing under the laws of the jurisdiction of its organization,
is duly qualified to do business in those jurisdictions where the
nature of its business requires it to be so qualified, and has the
necessary legal power and authority to own its property and assets and
to transact the business in which it is engaged; provided that no
violation of the foregoing shall be deemed a default hereunder unless
the same shall cause a material, adverse change in the financial
condition of the Debtor or the value of the Collateral.
(d) Debtor shall deliver to Secured Party, prior to any
funding of the amounts evidenced by the Note, all stock certificates,
bonds, debentures, warrants, or other Instruments or writings
evidencing any Securities pledged and
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<PAGE> 4
assigned under this Agreement (and Debtor shall promptly deliver the
same with respect to all certificated Securities pledged and assigned
to Secured Party hereafter), together with duly executed stock powers
in blank and all other assignments or endorsements requested by
Secured Party. With respect to any uncertificated Securities pledged
and assigned hereunder, Debtor has caused Secured Party to be
registered as the transferee thereof on the books of the custodian
bank, clearing corporation, brokerage house or issuer, as may have
been requested by Secured Party (and Debtor shall promptly cause such
registration with respect to all uncertificated Securities pledged and
assigned to Secured Party hereafter).
(e) If new or additional Securities are issued to Debtor
(as a stock split, or pursuant to any reclassification or
recapitalization of the capital of any issuer of Securities pledged
and assigned hereunder, or the reorganization or merger, acquisition
or consolidation of any such issuer, or otherwise (except any stock
dividend)) with respect to the Collateral, then the same shall be
deemed an increment to the Collateral and under pledge and assignment
to Secured Party hereunder. If evidenced by a stock certificate, bond,
warrant, debenture, certificate, or other Instrument or writing, then
such Securities shall (to the extent acquired or received by or placed
under Debtor's control) be held in trust for and promptly delivered to
Secured Party, together with duly executed stock powers in blank and
any other assignments or endorsements as Secured Party may request. If
any such Securities are uncertificated, then Debtor shall immediately
upon acquisition of such Securities cause Secured Party to be
registered as the transferee thereof on the books of the custodian
bank, clearing corporation, brokerage house or issuer, as may be
requested by Secured Party.
(f) At any time that Debtor is in default hereunder,
unless otherwise agreed in writing by Secured Party, Debtor shall
deliver to Secured Party, to be applied against the Obligations,
whether or not matured, in any manner deemed appropriate by Secured
Party, any dividends, interest payments or other monies payable at any
time in respect of any Security, promptly upon Debtor's receipt
thereof and in the form received. Pending such delivery, Debtor shall
hold such sums in trust for Secured Party and shall not commingle the
same with Debtor's other funds. If any such dividend, interest payment
or other monies shall be evidenced by a check, draft or other
Instrument, Debtor shall endorse the same to the order of Secured
Party immediately upon receipt and promptly deliver it to Secured
Party, to be applied against the Obligations, whether or not matured,
in any manner deemed appropriate by Secured Party.
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<PAGE> 5
(g) Debtor's chief place of business is: 233 South Wacker
Drive, Chicago, Illinois 60606. Without obtaining Secured Party's
prior written consent, Debtor shall not change Debtor's chief place of
business or the office(s) where Debtor's books, papers and records
concerning the Collateral are kept, nor change Debtor's name, identity
or corporate structure, nor do business under any fictitious or
assumed name.
(h) Without the prior written consent of Secured Party,
Debtor shall not sell, transfer, assign, convey or otherwise dispose
of any interest in any of the Collateral, nor enter into any contract
or agreement to do so.
(i) Debtor shall not take or permit any action that may
impair the Collateral or Secured Party's security interest therein,
and shall not permit any of the Collateral to be used in violation of
any statute or regulation or ordinance. Without limiting the
foregoing, Debtor will not compromise, release, surrender or waive any
rights of any nature whatsoever in respect of any of the Collateral
without Secured Party's prior written consent, which Secured Party may
grant or withhold in its sole discretion.
(j) Debtor shall pay when due all taxes or other
governmental charges whatsoever levied against the Collateral and all
assessments (including stock assessments) upon the Collateral, and
Debtor shall pay any tax which may be levied on or assessed against
any Loan Document or the Obligations.
(k) Debtor shall pay on demand all filing fees and
similar charges and all costs incurred by Secured Party in collecting
or securing or attempting to collect or secure any Obligations,
including the expenses and reasonable fees of Secured Party's legal
counsel, whether or not involving litigation and/or appellate,
administrative or bankruptcy proceedings. Debtor agrees to indemnify
and hold Secured Party harmless on demand against all expenses,
losses, consequences or damages incurred or suffered by Secured Party
arising from or relating to any claim, demand, action or proceeding
brought by any person(s) whomsoever in connection with or relating to
the Collateral, the Obligations, this Agreement or any other Loan
Document (including without limitation any court costs and the
expenses and reasonable fees of Secured Party's legal counsel), except
to the extent that a court of competent jurisdiction shall hold the
same to be the result of Secured Party's own gross negligence or
willful misconduct. Debtor shall pay any documentary stamp taxes,
intangible taxes or other taxes (except for federal or Florida
franchise or income taxes based on the net income of Secured Party)
which may now or hereafter apply to the Collateral, the Obligations or
this Agreement or any other
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<PAGE> 6
Loan Document, and Debtor agrees to indemnify and hold Secured Party
harmless from and against any liability, costs, attorney's fees,
penalties, interest or expenses relating to any such taxes, as and
when the same may be incurred. Debtor shall pay on demand, and
indemnify and hold Secured Party harmless against, any and all present
or future taxes, levies, imposts, deductions, charges and withholdings
imposed in connection with the Collateral, the Obligations or the Loan
Documents by the laws or governmental authorities of any jurisdiction
other than the State of Florida or the United States of America. All
sums payable by Debtor under this subparagraph are and shall be
secured by the Collateral.
(l) If so requested by Secured Party at any time (whether
before or after the occurrence of an Event of Default), Debtor shall
immediately: (i) to the extent not previously delivered to Secured
Party in compliance with the terms hereof, deliver to Secured Party
any and all Instruments, Securities, notes, drafts and acceptances
included in the Collateral at the time and place and manner specified
by Secured Party, together with any endorsements, stock powers in
blank and assignments requested by Secured Party for their transfer to
Secured Party or to any other person selected by Secured Party
(provided that such person shall also be bound by the provisions of
Section 6 hereof), all in form and substance satisfactory to Secured
Party; and (ii) execute, deliver and file any and all financing
statements, continuation statements, mortgages, agreements, notices,
vouchers, invoices, schedules, confirmatory assignments, conveyances,
transfer endorsements, powers of attorney, proxies, certificates,
deeds or other papers and/or perform any act which Secured Party may
deem necessary or appropriate to create, perfect, preserve, validate
or otherwise protect Secured Party's security interest in the
Collateral or to enable Secured Party from time to time to exercise
and enforce Secured Party's rights under this Agreement or any other
Loan Document.
(m) Debtor shall deliver to Secured Party a satisfactory
annual financial statement and supporting documentation, certified by
Debtor, for Debtor and for each other Obligor within thirty (30) days
after the end of their respective fiscal years, as well as the annual
Federal and State tax returns for such parties within thirty (30) days
of their respective filings. Debtor shall also promptly deliver any
other information reasonably requested by Secured Party from time to
time regarding the respective financial conditions or business
operations of Debtor, any other Obligor or any issuer of Securities
pledged and assigned hereunder. All financial statements of the
Obligors previously delivered to Secured Party fairly present the
correct respective financial conditions of the Obligors as of their
respective dates, and the
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<PAGE> 7
foregoing shall be true with respect to all financial statements of
the Obligors delivered to Secured Party hereafter.
(n) To the best of Debtor's knowledge after due inquiry
and investigation, there is no fact that the Obligors have not
disclosed to Secured Party in writing that could materially adversely
affect their respective properties, businesses or financial condition,
or any Collateral. Unless such disclosure would result in exposure to
civil or criminal liability and/or penalty, as confirmed by legal
opinion, in form, substance and issued by a law firm reasonably
acceptable to Secured Party, Debtor shall promptly notify Secured
Party in writing if any event shall occur or become known to Debtor
which has or could have any such materially adverse effect with
respect to any Obligor or any issuer of Securities pledged and
assigned hereunder, or which changes the truth or correctness of any
representation or warranty in any Loan Document, or which affects the
value of, or any rights incidental to, any Collateral or the ability
of Debtor or Secured Party to dispose of the same (including without
limitation the levy of any legal process or the filing of any lien
against the Collateral or the adoption of any marketing order,
arrangement or procedure affecting the Collateral, whether
governmental or otherwise).
(o) The Obligors have duly obtained all permits,
licenses, approvals and consents from, and made all filings with, any
governmental authority (and the same have not lapsed nor been
rescinded or revoked) which are necessary in connection with the
execution or delivery or enforcement of any Loan Document or the
performance of any Obligor's obligations thereunder.
(p) Except for those specifically listed in Exhibit "A"
attached hereto and made a part hereof, there are no actions, suits or
proceedings pending or threatened against or affecting any Obligor or
any Collateral before any court of law or equity or any tribunal,
administrative board or governmental authority, and no Obligor is in
default under any other indebtedness or with respect to any order,
writ, injunction, decree, judgment or demand of any court or any
governmental authority; provided, however, that the foregoing
representation shall not be deemed violated on account of the
existence of any pending or threatened actions, suits or proceedings
against Debtor (i) which are fully covered (except for reasonable and
customary deductibles) by existing insurance coverage issued by a
sufficiently solvent and responsible company or companies, in
sufficient amounts, or (ii) the outcome of which could not otherwise
materially and adversely affect the Debtor's financial condition, the
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<PAGE> 8
Debtor's ability to repay the Obligations and/or the value of the
Collateral.
(q) The execution and delivery of this Agreement and all
other Loan Documents do not and shall not (i) violate any provisions
of any law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award applicable to any Obligor, nor (ii)
result in a breach of, or constitute a default under, any indenture,
bond, mortgage, lease, instrument, credit agreement, undertaking,
contract or other agreement to which any Obligor is a party or by
which any of them or their respective properties may be bound or
affected. This Agreement and each Loan Document constitutes the legal,
valid and binding obligation of the Obligor(s) obligated thereby, and
is enforceable against such Obligor(s) in accordance with its terms.
(r) No extension of credit secured hereby is being used
to purchase or carry any "margin stock" within the meaning of
Regulation "U" of the Board of Governors of the Federal Reserve
System, nor to extend credit to others for that purpose. The
information set forth on Federal Reserve Form U-1, furnished to
Secured Party by Debtor, is true and complete in all material
respects. No amount borrowed from Secured Party will be used for any
purchase which violates or which is inconsistent with the provisions
of Regulations G, U or X of the Board of Governors of the Federal
Reserve System.
(s) The securities into which the Collateral is
convertible have sufficient market value to provide an initial
Obligations to market value ratio of 50% based upon the applicable
stock closing prices on December 21, 1992, to Secured Party's
satisfaction.
(t) Each extension of credit secured hereby is exempt
from the provisions of the Federal Consumers Credit Protection Act
(Truth-in-Lending Act) and Regulation "Z" of the Board of Governors of
the Federal Reserve System, because Debtor is a person fully excluded
therefrom, and/or because said extension of credit is only for
business or commercial purposes of Debtor and the proceeds thereof are
not being used for personal, family, household or agricultural
purposes.
(u) If Debtor, in his capacity as owner of the
Collateral, shall receive from any issuer, broker, custodian, clearing
corporation or other person, any written notice or communication
(including, without limitation, any proxy solicitation, purchase
offer, notice of any stockholders' meetings or annual report) with
respect to any Collateral, Debtor shall immediately notify Secured
Party of such notice or communication and, if the same shall be in
writing, shall provide to Secured Party a true and correct copy
thereof.
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<PAGE> 9
(v) Debtor shall at all times, unless Secured Party shall
have otherwise instructed in writing, at Debtor's own expense and to
the fullest extent permitted by law, exercise all voting rights in
respect of any Securities pledged and assigned hereunder, and all
other rights afforded to it by contract or by law, to actively oppose
and prevent: (i) the issuance by the issuer of such Securities or
additional Securities which might reduce or otherwise adversely affect
the voting power or liquidation or other rights of Securities pledged
and assigned hereunder; (ii) any modification or amendment to the
organic documents of any issuer of Securities pledged and assigned
hereunder; (iii) any liquidation, winding-up, dissolution or
termination of existence of any such issuer; and (iv) any merger,
consolidation, reorganization, recapitalization, or acquisition by or
of any such issuer.
(w) At all times while this Agreement is in effect, (i)
there shall be no effective restriction upon the convertibility, at
any time or from time to time, of any share of Class B Common Stock
which constitutes the Collateral into shares of Class A Common Stock,
on the basis of one share of Class A Common Stock for each share of
Class B Common Stock, and (ii) all of the shares of Class A Common
Stock into which the shares of Class B Common Stock held as Collateral
under the Loan is convertible shall be either (A) (1) registered under
the Securities Act of 1933, as amended (the "1933 Act"), and all
applicable state securities laws under which securities listed on a
national security exchange are exempt from registration, pursuant to a
valid and effective registration statement, and (2) listed for trading
on each national securities exchange on which the Class A Common Stock
of the issuer is listed, or (B) otherwise freely transferable under
applicable federal and state securities laws, free from any and all
transfer restrictions or limitations under such laws, excepting only
the "amount" limitations set forth in Section (e)(2) of Rule 144 of
the General Rules and Regulations under the 1933 Act. Debtor shall not
propose, vote in favor of or consent to any transaction which would
cause or result in a breach of the foregoing representation.
(x) Prior to the funding of any amounts evidenced by the
Note, counsel to Debtor approved by Secured Party shall have issued a
legal opinion addressed to and in form and substance satisfactory to
Secured Party, as to such corporate, securities, execution, delivery,
enforceability and other matters as may be required by Secured Party.
(y) On the date hereof or within forty-five (45) days
following the date hereof, all of the stock constituting the
Collateral shall be registered under the 1933 Act in a manner
satisfactory to Secured Party.
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<PAGE> 10
(z) If this Agreement is first executed by Debtor's
attorney-in-fact, it shall be reconfirmed and/or reexecuted by Debtor
as required by Secured Party within thirty (30) days following the
date hereof.
5. RIGHTS OF SECURED PARTY. Debtor agrees with and for the
benefit of Secured Party that:
(a) If at any time the ratio (the "Ratio") of the total
debt (i.e., the then outstanding amount of the Obligations and accrued
interest thereon) to Collateral market value (based upon the closing
prices of all applicable shares into which the Collateral is
convertible on any trading day, as determined by Secured Party in good
faith) should rise to 66.67%, then on demand by Secured Party (made
either orally or in writing, and referred to below as the "Notice")
Debtor shall either (i) reduce the outstanding amount of the
Obligations so that the Ratio is reduced to 50%, or (ii) pledge,
assign and deliver to Secured Party additional Securities or other
collateral acceptable to Secured Party sufficient to increase the
Collateral so that the Ratio is so adjusted (with either of such
actions being referred to below as a "Curative Action"). All such
additional Securities or other Collateral so delivered to Secured
Party from time to time shall thereupon become a part of the
Collateral and subject to the provisions of this Agreement. Unless
Debtor has theretofore fully accomplished a Curative Action, Secured
Party is authorized (but is not obligated) to sell all or any part of
the Collateral whenever Secured Party considers such sale necessary
for Secured Party's protection, and any such sale shall be made in
accordance with this Agreement and applicable law, provided that
Secured Party shall not exercise any of such rights until five (5)
days after delivery of the Notice.
(b) At any time and in its sole discretion, Secured Party
is authorized to transfer to and/or register with the issuer or its
transfer agent in the name of Secured Party or its nominee(s) any
Securities included in the Collateral, without notice to Debtor and
without disclosing (by annotation on the Securities or otherwise) that
Secured Party or its nominee(s) is a pledgee and assignee. Debtor
hereby grants Secured Party an irrevocable proxy, coupled with an
interest, to vote all Securities pledged and assigned hereunder, such
proxy to remain effective as long as any Obligations shall remain
outstanding, and irrevocably agrees that in determining whether this
proxy remains in effect, any issuer of any such Securities shall rely
(and shall have no responsibility to Debtor for relying) solely on
Secured Party's statement as to whether any Obligations then remain
outstanding, irrespective of any assertion to the contrary by Debtor
or any other person. Pursuant to this proxy, Secured Party or its
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<PAGE> 11
nominee(s) may, without notice to Debtor, exercise all voting and
corporate rights at any meeting of the issuer of any such Securities
and may exercise any and all rights of conversion, exchange,
subscription, receipt of cash tenders, or any other rights, privileges
or options pertaining to such Securities as if Secured Party were the
absolute owner thereof, including without limitation the right to
exchange the same for other Securities or any other property upon the
merger, consolidation, reorganization, recapitalization or other
readjustment of any issuer or upon the exercise by such issuer or
Secured Party of any right, privilege or option pertaining to such
Securities, and in connection therewith, Secured Party may deposit and
deliver any such Securities with any committee, depositary, transfer
agent, registrar or other designated agency upon such terms and
conditions as Secured Party may determine, all without liability
except to account for property actually received by Secured Party;
provided, however, that as long as no Event of Default shall have
occurred and be continuing, Debtor may, subject to the other
provisions of this Agreement continue to exercise the rights referred
to in this and the immediately preceding sentence in respect of
Securities pledged and assigned hereunder.
(c) Secured Party shall have the right (but not the
obligation) at its option to discharge or pay any taxes, assessments,
liens, security interests or other encumbrances at any time levied or
placed on or against the Collateral or Debtor, to pay for insurance on
the Collateral, to pay for the preservation or protection of the
Collateral, and/or to advance monies for any other reason or purpose
permitted under any Loan Document. Any amount so paid or advanced by
Secured Party shall be secured by the Collateral and shall be
repayable by Debtor on demand.
(d) Secured Party may sign and file financing statements,
security agreements, recording instruments or other documents or
amendments thereto with respect to the Collateral or any portion
thereof without the signature of Debtor, all at Debtor's sole expense,
in the event Debtor fails to do so within five (5) days following
Secured Party's request therefor, and Debtor shall reimburse Secured
Party on demand for any costs advanced or incurred by Secured Party in
connection therewith. At Secured Party's option, a carbon,
photographic or other reproduction of this Agreement (or of any
financing statement executed by Debtor) shall be sufficient as a
financing statement. Secured Party may unilaterally correct patent
errors or omissions in this Agreement, financing statement or any
other Loan Document.
(e) Secured Party is hereby irrevocably appointed the
attorney-in-fact of Debtor, which appointment is coupled with an
interest, with full power of substitution, on behalf of
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<PAGE> 12
Debtor to perform all acts, and to execute and deliver all
endorsements, notices, instruments of assignment and transfer, deeds,
releases, bills of sale or other writings whatsoever which Secured
Party deems appropriate to protect and preserve the Collateral and to
perfect and maintain and, if an Event of Default exists, realize upon
Secured Party's security interest and rights in the Collateral. If so
requested by Secured Party or by any other person, Debtor shall ratify
and confirm the acts of Secured Party (and/or any substitute) as
Debtor's attorney-in-fact.
(f) Secured Party may take control of any Proceeds of
Collateral at any time and, if an Event of Default exists, may at its
option apply any cash Proceeds of the Collateral (including without
limitation any insurance proceeds or amounts payable in any lawsuit on
account of the Collateral) to the payment of the Obligations, whether
or not matured, in any manner deemed appropriate by Secured Party, or
return such cash Proceeds to Debtor for use in the operation of
Debtor's business, provided that dividends shall be excluded from
Proceeds, for this purpose, as long as no Event of Default exists.
(g) Secured Party shall not be obligated to do any of the
acts authorized in this Agreement or any other Loan Document, but if
Secured Party elects to do so then Secured Party shall not be
responsible or liable to Debtor therefor (or for any consequences of
such acts) except to the extent that a court of competent jurisdiction
holds that Secured Party acted with gross negligence or willful
misconduct.
6. DUTY OF CARE. Secured Party shall have the right (but not the
obligation) at any time to take any action Secured Party deems appropriate in
its sole discretion for the protection or preservation of any Collateral in its
possession or control. Secured Party shall exercise reasonable care with
respect to Collateral in its custody only to the extent required by applicable
law. Secured Party shall be deemed to have used reasonable care if such
Collateral is accorded treatment substantially equal to that which Secured
Party accords its own property, or if Secured Party takes such action for that
purpose as Debtor may reasonably request in writing. No omission to do any act
not requested by Debtor shall be deemed a failure to exercise reasonable care,
and no omission to comply with any request of Debtor shall of itself be deemed
a failure to exercise reasonable care. Secured Party is not responsible for any
injury or loss to the Collateral or any part thereof arising from Act of God,
robbery, fire, flood, fraud or any other cause whatsoever beyond the control of
Secured Party, and Secured Party shall not be liable for any negligent act or
default of any of its collecting agents or correspondents. Secured Party shall
not be required to examine or inquire into the validity of any Collateral
subject to this Agreement, or to exchange or collect
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<PAGE> 13
on any such Collateral, or to take any action necessary to hold any
corporation, issuer or other person liable on the Collateral; the Obligors
hereby severally waive any obligation of diligence on the part of Secured Party
in looking after, preserving or acting with respect to the Collateral or
collecting the same.
7. EVENTS OF DEFAULT. The occurrence of any one or more of the
following events, regardless of the cause thereof and whether within or beyond
the control of any Obligor, shall constitute an "Event of Default" under this
Agreement:
(a) The failure of any Obligor to pay any sum when due
under any Loan Document, whether upon maturity or by acceleration, and
the expiration of any applicable grace, notice or cure period provided
in such Loan Document for that payment;
(b) The failure of any Obligor to observe or perform any
covenant or agreement in this Agreement or any other Loan Document, or
the occurrence of any other default (whether concerned with the
payment of money or otherwise) under any Loan Document, and the
expiration of any applicable grace, notice or cure period provided in
such Loan Document for the cure of that failure or default;
(c) The destruction, seizure, confiscation, theft, sale
or further voluntary or involuntary encumbrancing of any of the
Collateral (excepting the destruction or theft of any Collateral then
in the Secured Party's exclusive possession and control);
(d) If any levy, attachment, execution, charging order,
garnishment or other process shall be issued, or any involuntary lien
or encumbrance shall be filed, against any portion of the Collateral,
and the same is not discharged and fully removed and released within
forty-five (45) days from such issuance or filing (except if Secured
Party requires a shorter period if it deems the same necessary to
protect the Collateral):
(e) With respect to any issuer of Securities pledged and
assigned hereunder, if any event shall occur which, in the reasonable
judgment of Secured Party, represents or constitutes a material
adverse change in the business or financial condition of such issuer;
(f) If any representation, warranty, affidavit,
certificate or statement made or delivered to Secured Party by any
Obligor or on any Obligor's behalf from time to time in connection
with the Loan Documents or the Obligations shall prove false,
incorrect or misleading in any respect deemed material by Secured
Party;
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<PAGE> 14
(g) The death or legal incapacity of any Obligor who is a
natural person, or the dissolution or merger or consolidation or
termination of existence of any other Obligor, or the failure or
cessation or liquidation of the business of any Obligor, or if the
person(s) controlling any Obligor which is a business entity shall
take any action authorizing or leading to the same;
(h) If any Obligor shall default in the payment of any
indebtedness for borrowed money (whether direct or contingent and
whether matured or accelerated) to Secured Party, or if any Obligor
shall become insolvent or unable to pay such Obligor's debts as they
become due;
(i) The anticipatory repudiation by any Obligor of any of
its obligations under any Loan Document, or any declaration by any
Obligor of intention not to perform, any such obligations as and when
the same become due;
(j) The disposition, transfer or exchange of all or
substantially all of any Obligor's assets for less than fair market
value; or the entry of any judgment against any Obligor which is not
vacated, removed or satisfied within 45 days after its filing (unless
the same is then being appealed, in which event there shall be no
default hereunder until such judgment is final, unless Secured Party
deems the same a risk to the value of the Collateral); or the issuance
of any levy, attachment, execution, charging order, garnishment or
other process, or the filing of any lien, against any property of any
Obligor (and the expiration of any grace period provided in any Loan
Document for the discharge or release thereof);
(k) If any Obligor shall make an assignment for the
benefit of creditors, file a petition in bankruptcy, apply to or
petition any tribunal for the appointment of a custodian, receiver,
intervenor or trustee for such Obligor or a substantial part of such
Obligor's assets; or if any Obligor shall commence any proceeding
under any bankruptcy, arrangement, readjustment of debt, dissolution
or liquidation law or statute of any jurisdiction, whether now or
hereafter in effect; or if any such petition or application shall have
been filed or proceeding commenced against any Obligor or if any such
custodian, receiver, intervenor or trustee shall have been appointed
(provided that, if involuntary, the same shall not constitute a
default if terminated, discharged or otherwise rendered void within
ninety (90) days from its filing);
(l) If any Obligor shall have concealed, transferred,
removed, or permitted to be concealed or transferred or removed, any
part of such Obligor's property with intent to hinder, delay or
defraud any of such Obligor's creditors; or if any Obligor shall have
made or suffered a transfer of any
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<PAGE> 15
of such Obligor's properties which are invalid under any bankruptcy,
fraudulent conveyance, preference or similar law;
(m) The failure to obtain any permit, license, approval
or consent from, or to make any filing with, any governmental
authority (or the lapse or revocation or rescission thereof once
obtained or made) which is necessary in connection with the execution
or delivery or enforcement of any Loan Document or the performance of
any Obligor's obligations under any Loan Document;
(n) INTENTIONALLY DELETED
(o) If any governmental authority (or any person acting
or purporting to act under governmental authority) shall take any
action to condemn, assume custody or control of, seize or appropriate
all or any substantial part of any Obligor's property or to displace
the management of such Obligor's business; or
(p) In the case of any Obligor then residing or located
in any jurisdiction outside the United States, if such jurisdiction
shall impose any moratorium or suspension on the repayment of its
foreign indebtedness or any substantial portion thereof, or if such
jurisdiction shall declare that it is not liable or responsible for or
will not honor its foreign indebtedness or any substantial portion
thereof.
8. RIGHTS AND REMEDIES ON DEFAULT. If any of the foregoing Events
of Default shall occur, then Secured Party, in its sole discretion and without
prior notice to Debtor, may at any time and from time to time during the
continuation thereof take any or all of the following actions:
(a) declare any or all of the Obligations immediately due
and payable;
(b) declare Debtor directly indebted and liable to
Secured Party as a principal and joint and several debtor with respect
to all Obligations for which Debtor has given Debtor's guaranty or
acted as surety;
(c) declare any or all other liabilities of Debtor to
Secured Party, which now exist or which are hereafter created as
direct obligations of Debtor to Secured Party, immediately due and
payable (notwithstanding any contrary provisions thereof) without
demand or notice of any kind;
(d) terminate any obligation which Secured Party may have
at that time to make further loans or extensions of credit or other
financial accommodations to any Obligor;
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<PAGE> 16
(e) set off any and all sums owed to Debtor by Secured
Party in any capacity (whether or not then due), against the
Obligations and/or against any other liabilities of Debtor to Secured
Party;
(f) foreclose Secured Party's security interest(s) in any
or all of the Collateral as provided by law;
(g) sell, re-sell, discount or dispose of all or any
portion of the Collateral, or endorse, assign and convey the same to
any third party;
(h) require Debtor to assemble Debtor's books, records,
files, papers and other data pertaining to the Collateral and deliver
them to Secured Party at Debtor's expense to a place designated by
Secured Party;
(i) enter the premises of Debtor and take possession of
any Collateral not then in Secured Party's possession and any books,
records, files and papers pertaining to the Collateral (Debtor hereby
waiving and releasing Secured Party to the fullest extent permitted by
law from any and all claims which Debtor might otherwise have against
Secured Party in connection therewith or arising therefrom); and/or
(j) exercise any and all other rights and remedies with
respect to the Collateral which Secured Party may enjoy as a secured
party under the Loan Documents, the Florida Uniform Commercial Code or
any other applicable law.
All rights, remedies and powers granted to Secured Party in this Agreement or
in any other Loan Document or by applicable law shall be cumulative and may be
exercised singly or concurrently on one or more occasions. No delay in
exercising or failure to exercise any of Secured Party's rights or remedies
shall constitute a waiver thereof, nor shall any single or partial exercise of
any right or remedy by Secured Party preclude any other or further exercise of
that or any other right or remedy. No waiver of any right or remedy by Secured
Party shall be effective unless made in writing and signed by Secured Party,
nor shall any waiver on one occasion apply to any future occasion, but shall be
effective only with respect to the specific occasion addressed in that signed
writing. Debtor shall not be subrogated to any rights of Secured Party against
any other party or any Collateral until all sums due to Secured Party under the
Obligations shall have been paid in full, and if any of the Obligations shall
remain unpaid after the exercise of any or all of Secured Party's rights and
remedies, then Debtor shall remain liable for such deficiency.
9. SALE OF THE COLLATERAL. With respect to any sale or disposition
of any of the Collateral, whether made under the power of sale in this
Agreement, under any applicable provisions of the
- 16 -
<PAGE> 17
Florida Uniform Commercial Code or other applicable law, or under judgment or
order or decree in any judicial proceeding for the foreclosure of Secured
Party's security interest or involving the enforcement of this Agreement:
(a) The Collateral may be sold, resold, assigned or
delivered in one or more parcels, at the same or at different times,
at public or private sale or at any broker's board or on any
securities exchange, for cash or on credit or for other property, for
immediate or future delivery, and at such price(s) and on such terms
as Secured Party may determine in its sole discretion, so long as such
disposition is commercially reasonable. Without precluding any other
methods of sale, the sale of the Collateral shall be deemed made in a
commercially reasonable manner if conducted in conformity with
reasonable commercial practices of banks or other financial
institutions when disposing of similar property.
(b) Debtor hereby waives any and all demand,
advertisement or notice (except as required by law), and any
notification required by law with respect to the time and place of
such sale or disposition shall be deemed reasonable if given at least
five (5) days before the time thereof, but notice given in any other
reasonable manner shall also be sufficient. In the case of any sale at
a broker's board or on a securities exchange, the notice shall
identify the board or exchange at which such sale is to be made and
the day on which the Collateral (or a portion thereof) will first be
offered for sale. Any public sale of any of the Collateral shall be
held at such time or times within ordinary business hours at such
place or places as Secured Party may state in the notice or
publication (if any) of such sale.
(c) Secured Party shall not be obligated to sell any of
the Collateral if it determines not to do so, notwithstanding that
notice of a sale of such Collateral may have been given. Secured Party
may, without notice or publication, adjourn any public or private sale
or cause the same to be adjourned from time to time by announcement at
the time and place fixed for the sale, and such sale may be made,
without further notice, at the time and place identified in such
announcement. In case of any sale of all or any part of the Collateral
on credit or for future delivery, Secured Party may retain the
Collateral sold until the sales price is paid by the purchaser(s)
thereof, but Secured Party shall not incur any liability if any such
purchaser shall fail to take up and pay for the Collateral so sold, in
which case such Collateral may again be sold upon like notice.
(d) Debtor understands that applicable laws restricting
and imposing requirements on the sales of securities to the general
public (the "Securities Laws") may affect the
- 17 -
<PAGE> 18
disposition of any Securities and that Secured Party's concern that
its sale or disposition of any such Securities be in compliance with
the Securities Laws may very strictly limit Secured Party's course of
conduct in disposing or attempting to dispose of all or any part of
such Securities, and may also limit the extent to which or the manner
in which any subsequent transferee may dispose of the same.
Consequently, Debtor agrees that Secured Party may, in selling or
disposing of any such Securities proceed in such manner and under such
circumstances as it may deem necessary or advisable to assure
compliance with the Securities Laws. Without limiting the generality
of the foregoing, Secured Party may, in its sole and absolute
discretion: (i) sell privately any such Securities notwithstanding
that such Securities may be qualified or registered for sale to the
general public; (ii) approach and negotiate with a restricted number
of potential purchasers to effect such sale; and (iii) restrict such
sale to purchasers as to their number, nature of business and
investment intention (including, without limitation, to purchasers
each of whom will represent and agree to the satisfaction of Secured
Party that such purchaser is purchasing for its own account, for
investment, and not with a view to the distribution or sale of such
Securities or part thereof), it being understood that Secured Party
may require Debtor, and Debtor hereby agrees upon the written request
of Secured Party to cause: (a) a legend or legends to be placed on the
certificates or Instruments to be delivered to such purchasers to the
effect that the Securities represented thereby have not been
registered under the Securities Laws and setting forth or referring to
restrictions on the transferability of such Securities; (b) the
issuance of stock transfer instructions to the issuer's transfer
agent, if any, with respect to such Securities, or, if the issuer
transfers its own securities, a notation in the appropriate records of
such issuer; and (c) to be delivered to the purchasers a signed
acknowledgment of the issuer of such Securities that, as concerns such
Securities, such purchasers shall be entitled to the rights of Debtor
by virtue of their purchase of such Securities from Secured Party. In
the event of any such sale, Debtor does hereby consent and agree that
Secured Party shall incur no responsibility or liability for selling
all or any part of the Securities pledged and assigned hereunder at a
price which Secured Party, in its sole and absolute discretion, may
deem reasonable under the circumstances, notwithstanding the
possibility that a higher price might be realized if the sale were
public, or the fact that the price obtained for such Securities is
less than the public market price for such Securities at the time of
sale, or Secured Party accepts the first offer received, does not
approach more than one possible purchaser in connection with a private
sale, or limits those who may bid at a public auction.
- 18 -
<PAGE> 19
(e) Debtor agrees, if requested by Secured Party, at
Debtor's sole expense to, and to cause any issuer(s) of Securities
pledged and assigned hereunder to, take such actions, render such
assistance and prepare, distribute and/or file such documents as
Secured Party or its legal counsel may request in connection with the
private or public sale of such Securities. Debtor agrees to indemnify
and hold harmless Secured Party and any underwriter against all loss,
liability, expenses or claims (including the reasonable cost of any
investigation) which any of them may incur in connection with the sale
of such Securities to the extent that such loss, liability, expense or
claim arises out of or is based upon any alleged untrue statement of a
material fact contained in any registration statement, prospectus (or
any amendment or supplement thereto) or in any notification or
offering circular, or arises out of or is based upon any alleged
omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, except to the
extent due to the gross negligence or willful misconduct of Secured
Party or any such underwriter. At Debtor's sole expense, Debtor shall
qualify, file or register, or cause to be qualified, filed or
registered, such Securities under the Blue Sky laws or other
Securities Laws of such jurisdictions as Secured Party may request,
and keep all such qualifications, filings and registrations effective
for as long as Secured Party shall reasonably request. Debtor will
keep Secured Party advised in writing as to the progress of each such
registration, qualification or filing, and will furnish, or cause to
be furnished to Secured Party, at Debtor's expense, such number of
prospectuses, offering circulars and registration statements as
Secured Party may from time to time request.
(f) Secured Party may, to the fullest extent permitted by
applicable law, bid for and purchase the Collateral in a commercially
reasonable manner, and upon compliance with the terms of sale may
hold, retain and possess and dispose of the same in its own absolute
right without further accountability. Secured Party may credit all or
any part of the Obligations against the purchase price(s) so bid, and
may deliver any notes or instruments evidencing any of the Obligations
in payment of such purchase price(s); if the amounts then owing under
any such notes or instruments exceed such purchase price(s), then the
same shall be returned to Secured Party after due notation of the
partial discharge thereof.
(g) Upon consummation of any sale, Secured Party shall
have the right to assign, transfer, endorse, convey and deliver to the
respective purchaser(s) the Collateral or portion thereof so sold.
Secured Party is hereby irrevocably appointed Debtor's true and lawful
attorney-in-fact (which appointment is coupled with an interest) in
Debtor's name and
- 19 -
<PAGE> 20
stead, with power of substitution, to make all necessary bills of
sale, endorsements and instruments of assignment and transfer of the
Collateral thus sold, and for such other purposes as Secured Party may
deem necessary or desirable to effectuate the provisions of this
Agreement or any other Loan Document. If so requested by Secured Party
or by any other person, Debtor shall ratify and confirm the acts of
Secured Party (and/or any substitute) as Debtor's attorney-in-fact.
(h) Such sale shall divest all right, title, interest,
equity, redemption, claim and demand whatsoever of Debtor in and to
the Collateral sold and shall be a perpetual bar both at law and in
equity against Debtor and Debtor's successors and assigns, and against
any and all persons claiming or who may claim all or any part of the
Collateral from, through or under any of them.
(i) A receipt given by Secured Party (or its designated
agent) shall be a sufficient discharge to the purchaser(s) at such
sale for his or their purchase money, and none of them shall, after
such payment and receipt, be obliged to see to the application of such
purchase money or be answerable for any loss, misapplication or
non-application thereof.
(j) To the extent that Debtor may lawfully do so, Debtor
agrees not at any time nor in any manner to insist upon, plead, claim
or take the benefit or advantage of any appraisement, valuation, stay,
extension or redemption laws, or any law permitting Debtor to direct
the order in which all or any part of the Collateral shall be sold,
which may delay, prevent or otherwise affect the performance or
enforcement of this Agreement; Debtor hereby expressly waives to the
fullest extent permitted by law all benefit or advantage of any such
laws now or at any time hereafter in force and hereby covenants not to
hinder, delay or impede the execution of any power granted or
delegated to Secured Party in this Agreement, but will suffer and
permit the execution of every such power as though no such laws were
in force.
(k) Secured Party shall have no obligation whatsoever to
resort first to any other security which Secured Party may hold for
the Obligations. Secured Party shall not incur any liability to Debtor
as a result of the sale of any Collateral at any private sale
conducted in a commercially reasonable manner, or as a result of any
failure to sell or offer for sale any Collateral for any reason
whatsoever or to exercise any other right, privilege, option or power
to the fullest extent permitted by law granted to Secured Party
hereunder. Debtor hereby waives to the fullest extent permitted by law
any claims against Secured Party arising with respect to any decrease
in the market value of any Collateral during the period held for sale,
or arising by reason of the fact that
- 20 -
<PAGE> 21
the price at which the Collateral may have been sold was less than the
price that might have been obtained had the sale been otherwise
effected, even if Secured Party accepts the first offer received and
does not offer the Collateral to more than one offeree.
(l) A written agreement to sell any Collateral, which
agreement Secured Party in good faith deems itself bound to perform,
shall be treated as a sale of such Collateral and Secured Party shall
be free to carry out such agreement. If such an agreement is then
effective, Debtor shall not be entitled to the return of any
Collateral subject thereto, even if after the date of such agreement
all Events of Default shall have been cured or the Obligations shall
have been fully paid and performed.
(m) After deducting all costs and expenses of every kind
for taking, retaking, care, safekeeping, collecting, holding,
preparing for sale, selling, delivering and the like (including legal
costs, insurance, commission for sale, and reasonable attorney's fees)
and all other charges against the Collateral, Secured Party shall
apply the residue of the proceeds of any such sale or other
disposition against any and all amounts remaining unpaid under the
Obligations, all in such order of priority as Secured Party may
determine in its sole discretion. Debtor shall remain liable for any
deficiency remaining after such application, and any surplus shall be
returned to Debtor.
10. WAIVER OF RIGHTS. To the fullest extent permitted by law,
Debtor hereby waives notice, demand, presentment, protest, notice of dishonor,
suit against or joinder of any other person, and all other requirements
necessary to charge or hold Debtor liable with respect to the Obligations.
Debtor hereby consents and agrees that, at any time and from time to time
without notice to Debtor, Secured Party and any other Obligor or the owner(s)
of any collateral or security given for the Obligations may agree to renew,
extend, compromise, discharge or release the Obligations in whole or in part,
and/or to release, increase, change, substitute or exchange all or any part of
such collateral or security, or to modify the terms of the Obligations in any
other way that Secured Party and such person(s) may deem appropriate; no such
renewal, extension, compromise, discharge, release, increase, change,
substitution, exchange or modification shall release or affect in any way the
liability of Debtor or Secured Party's rights against the Collateral, and
Debtor hereby waives any and all defenses and claims whatsoever based thereon.
Until Secured Party receives all sums due with respect to the Obligations in
immediately available funds, Debtor shall not be released from liability unless
Secured Party expressly releases Debtor in a writing signed by Secured Party,
and Secured Party's release of any other Obligor(s) shall not release Debtor
with respect to the Obligations.
- 21 -
<PAGE> 22
11. ACTIONS OR PROCEEDINGS. With respect to any legal action or
proceeding arising under this Agreement or any other Loan Document or
concerning the Obligations and/or the Collateral, Debtor to the fullest extent
permitted by law: (a) submits to the jurisdiction of the state and federal
courts in the State of Florida; (b) agrees that the venue of any such action or
proceeding may be laid in Broward County (in addition to any county in which
any of the Collateral is located) and waives any claim that the same is an
inconvenient forum; (c) stipulates that service of process in any such action
or proceeding shall be properly made if mailed by any form of registered or
certified mail (airmail if international), postage prepaid, to the address then
registered in Secured Party's records for Debtor, and that any process so
served shall be effective ten days after mailing; (d) waives any right to
immunity from any such action or proceeding and waive any immunity or exemption
of any property, wherever located, from garnishment, levy, execution, seizure
or attachment prior to or in execution of judgment, or sale under execution or
other process for the collection of debts; (e) waives trial by jury; and (f)
waives any right to interpose any set-off or counterclaim or to plead laches or
any statute of limitations as a defense in any such action or proceeding, and
waives all statutory provisions and requirements for the benefit of Debtor, now
or hereafter in force. No provision of this Agreement shall limit Secured
Party's right to serve legal process in any other manner permitted by law or to
bring any such action or proceeding in any other competent jurisdiction.
12. NOTICES. Except as otherwise provided in this Agreement for
service of legal process, any notice to Debtor shall be in writing and shall be
deemed sufficiently made if delivered personally or if transmitted by postage
prepaid first class mail (airmail if international) or by telegraph or by telex
with confirmed answerback, to the address appearing on the signature page of
this Agreement for Debtor (or, if none appears, to any address for Debtor then
registered in Secured Party's records). Any notice to Secured Party shall be
directed to the attention of a vice-president or higher ranking officer of
Secured Party and shall be made in writing in the foregoing manner and shall be
deemed sufficient when received by Secured Party at the following address:
Private Banking, One Financial Plaza, P.O. Box 5367, Ft. Lauderdale, Florida
33340-5367. Any party may change its address for notice by giving written
notice of the change in accordance with this paragraph.
13. INTEREST. All Obligations of Debtor to Secured Party arising
under this Agreement shall bear interest, from the date when due until paid in
full, at the highest rate then permitted by applicable law, or if no such
highest rate shall then apply, at the highest rate permitted by applicable law
as in effect on the date hereof, or if no such rate currently applies, at 25%
per annum. All such interest is and shall be secured by the Collateral.
Notwithstanding any contrary provision of any Loan Document, in no
- 22 -
<PAGE> 23
event shall any agreed to or actual exaction charged, reserved or taken as an
advance or forbearance by Secured Party as consideration for the Obligations
exceed the limits (if any) imposed or provided by the law applicable from time
to time to the Obligations for the use or detention of money or for forbearance
in seeking its collection; Secured Party hereby waives any right to demand such
excess. In the event that the interest provisions of any Loan Document or any
exactions required thereunder shall result at any time or for any reason in an
effective rate of interest that transcends the maximum interest rate permitted
by applicable law (if any), then without further agreement or notice the
obligation to be fulfilled shall be automatically reduced to such limit and all
sums received by Secured Party in excess of those lawfully collectible as
interest shall be applied against the principal of the Obligations immediately
upon Secured Party's receipt thereof, with the same force and effect as though
the payor had specifically designated such extra sums to be so applied to
principal and Secured Party had agreed to accept such extra payment(s) as a
premium-free prepayment or prepayments. During any time that any of the
Obligations bear interest at the maximum lawful rate (whether by application of
this paragraph or otherwise), interest shall be computed on the basis of the
actual number of days elapsed and the actual number of days in the respective
calendar year.
14. EXCHANGE RATE. If for the purposes of obtaining judgment
against any Obligor in any court it becomes necessary to convert a sum due
under any Loan Document in U.S. dollars into another currency, then the rate of
exchange used shall be that at which Secured Party could purchase U.S. dollars
with the other currency in accordance with normal banking procedures on the
business day preceding the day on which final judgment is obtained.
Notwithstanding any judgment in such other currency, the Obligations shall be
discharged only to the extent that (i) Secured Party can purchase U.S. dollars
with the other currency in accordance with normal banking procedures on the
business day following Secured Party's receipt of any such sum adjudged to be
due in the other currency, and (ii) Secured Party can remit the purchased U.S.
dollars to its office at its address for notices under this Agreement. If the
U.S. dollars so purchased and remitted are less than the sum owing to Secured
Party in U.S. dollars before the judgment, then Debtor agrees, as a separate
obligation and notwithstanding any such judgment, to indemnify Secured Party on
demand against such loss; if the U.S. dollars so purchased and remitted exceed
the sum owing to Secured Party in U.S. dollars before the judgment, such excess
shall be remitted to the Obligor(s) from whom Secured Party collected such
other currency.
15. BINDING EFFECT: ASSIGNABILITY. The terms of this Agreement
shall inure to the benefit of Secured Party and its successors and assigns and
shall be binding upon Debtor and Debtor's executors, personal representatives,
heirs and permitted successors and assigns. Without the consent of Debtor,
Secured Party from time to
- 23 -
<PAGE> 24
time may rehypothecate any or all Collateral held by Secured Party, may grant
participations in all or any portion of the Obligations, and/or may transfer or
assign this Agreement or any of Secured Party's rights hereunder in whole or in
part to any person whomsoever and may act on behalf or as the agent of any such
person in enforcing this Agreement. To the extent of such transfer or
assignment, any such transferee or assignee shall have all the rights of
Secured Party hereunder and Secured Party shall be thereafter relieved from any
liability with respect to any Collateral so assigned or transferred. In
connection with any of the foregoing, Secured Party may disclose any and all
information held by or known to Secured Party at any time with respect to
Debtor, the Collateral or the issuer of any Securities pledged and assigned
hereunder. Without the prior written consent of Secured Party (which it may
grant or withhold in its sole discretion), Debtor shall not assign this
Agreement nor delegate any of Debtor's duties hereunder.
16. TERM. This Agreement shall take effect when signed by Debtor
and delivered to Secured Party. This Agreement is a continuing agreement and
shall remain in full force and effect until all the Obligations shall have been
paid in full, unless earlier terminated by Secured Party in writing. After
termination of this Agreement and the full payment of the Obligations, Secured
Party shall turn over to Debtor any Proceeds of the Collateral received or held
by Secured Party and shall reassign the Collateral to Debtor without recourse
to Secured Party and without any representation or warranty or agreement of any
kind on the part of Secured Party.
17. INTERPRETATION. If this Agreement is signed by more than one
person, then the term "Debtor" as used in this Agreement shall refer to all
such persons jointly and severally, and all promises, agreements, covenants,
waivers, consents, representations, warranties and other provisions in this
Agreement are made by and shall be binding upon each and every undersigned
person, jointly and severally. Whenever used in this Agreement, the term
"person" means any individual, firm, corporation, trust or other organization
or association or other enterprise or any governmental or political
subdivision, agency, department or instrumentality thereof. Whenever used in
this Agreement, the terms "written" or "in writing" mean any form of written
communication and any communication by means of telex, telecopier device,
telegraph or cable. Any reference in this Agreement to a sum expressed in
dollars or with the symbol "U.S. $" or "$" means the lawful currency of the
United States of America, unless such reference expressly identifies another
dollar-denominated currency. Captions and paragraph headings contained in this
Agreement are for convenience only and shall not affect its interpretation.
Whenever used in this Agreement and unless the context otherwise requires,
words in the plural include the singular, words in the singular include the
plural, and pronouns of any gender include the other genders.
- 24 -
<PAGE> 25
18. MISCELLANEOUS. Time is of the essence with respect to the
provisions of this Agreement. This Agreement may be amended but only by an
instrument in writing executed by the party to be burdened thereby. Any
provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction only, be ineffective only to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof or affecting the validity or enforceability of such
provision in any other jurisdiction. To the extent that Debtor may lawfully
waive any law that would otherwise invalidate any provision of this Agreement,
Debtor hereby waives the same, to the end that this Agreement shall be valid
and binding and enforceable against Debtor in accordance with all its terms.
This Agreement shall be governed by, and construed and enforced in accordance
with, the laws of the State of Florida, except that federal law shall govern to
the extent that it may permit Secured Party to charge, from time to time,
interest on the Obligations at a rate higher than may be permissible under
Florida law.
19. FIDUCIARY OBLIGATIONS. Notwithstanding anything to the
contrary contained in this Agreement, Debtor shall not be deemed in default
with respect to any disclosure requirements or restrictions hereunder on
account of Debtor's refraining from disclosure of certain non-public matters
which are disclosed to him in his capacity as a director and/or officer of the
issuer of the Collateral and/or taking of any action or omitting to take any
action in his capacity as such director and/or officer if, in Debtor's good
faith and reasonable judgment, the same would violate Debtor's fiduciary
obligations and responsibilities in his capacity as a director and/or officer
of the issuer of the Collateral, although the same shall otherwise be fully
binding upon Debtor in his individual capacity as the owner and holder of such
Collateral.
SEE ATTACHED RULE 144 ADDENDUM, WHICH FORMS A PART HEREOF
WITNESS THE DUE EXECUTION HEREOF by Debtor as of the 18th day of
December, 1992.
WITNESSES: DEBTOR:
EARL C. SHANKS WILLIAM F. FARLEY
------------------------ -------------------------------
Name: EARL C. SHANKS WILLIAM F. FARLEY
Address of Debtor:
JOYCE A. PRIUITT
------------------------ 233 South Wacker Drive
Name: JOYCE A. PRIUITT Chicago, Illinois 60606
- 25 -
<PAGE> 26
STATE OF ILLINOIS)
) SS:
COUNTY OF COOK )
The foregoing instrument was sworn to, subscribed and acknowledged before me
this 26th day of January, 1993, by William F. Farley.
Tsuneko Nakagawa
--------------------------------
My Commission Expires: Notary Public, State of Illinois
"OFFICIAL SEAL"
TSUNEKO NAKAGAWA
Notary Public, Illinois [NOTARIAL SEAL]
My Commission Expires: 1-28-94
- 26 -
<PAGE> 27
EXHIBIT "A"
ACTIONS, SUITS AND PROCEEDINGS
None
A-1
<PAGE> 28
RULE 144 ADDENDUM TO GENERAL SECURITY AGREEMENT
(1) Current Information: Rule 144
In order that NationsBank of Florida, N.A. ("Secured Party") shall
have the benefits of Rule 144 promulgated under the Securities Act of 1933, as
amended (the "Act"), and any other rule or regulation of the Securities and
Exchange Commission (the "Commission") that may at any time permit Secured
Party to sell the Securities listed in paragraph 3 below (the "Rule 144
Securities"), or any part thereof, to the public without registration, the
undersigned ("Debtor") agrees to use its best efforts to cause the issuer or
issuers of the Rule 144 Securities to:
(a) Make and keep available, at all times subsequent to the date
hereof, current public information about such issuer sufficient to satisfy the
requirements of paragraph (c) of Rule 144, including, during any period that
such issuer is not subject to Section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), making available current public
information concerning such issuer which satisfies the requirements of clauses
(1) to (14) inclusive, and clause (16) of paragraph (a)(4) of Rule 15c2-11
under the Exchange Act, or such other current public information in lieu of
periodic reports under the Exchange Act as may be required under Rule 144 or
any other regulation permitting the sale of the Rule 144 Securities, or any
part thereof, without registration under the Act;
(b) After registering any offering of securities of such issuer
under the Act or after registration of a class of securities of such issuer
under the Exchange Act, file with the Commission in a timely manner all reports
and other documents required of such issuer under the Act and Exchange Act; and
(c) Furnish to Secured Party upon request, so long as any Rule 144
Securities are pledged and assigned to Secured Party, (i) a written statement
by the issuer of such Securities that it has complied with the reporting
requirement of Rule 144, and of the Act and the Exchange Act (at any time that
it is subject to such reporting requirements), (ii) a copy of the most recent
annual or quarterly report of such issuer, and (iii) such other reports and
documents prepared and/or filed by such issuer as may be reasonably requested
by Secured Party in order to allow Secured Party to avail itself of any rule or
regulation of the Commission permitting the sale of the Rule 144 Securities, or
any part thereof, without registration under the Act.
- 1 -
<PAGE> 29
(2) Short Sales, Puts or Other Options to Sell Rule 144 Securities.
Debtor agrees that at no time during the period that any Rule 144
Securities are pledged and assigned to Secured Party as part of the Collateral
will Debtor have any short position in, or any put or other option to dispose
of (i) any securities of issuers of such Rule 144 Securities or (ii) any
securities convertible into such Rule 144 Securities.
(3) Applicability.
This Addendum supplements and forms part of that certain General
Security Agreement dated December 18, 1992 from Debtor to Secured Party, as
concerns the Rule 144 Securities pledged and assigned to Secured Party pursuant
to said Agreement and this Addendum which are listed in Exhibit "A" attached
hereto and made a part hereof.
IN WITNESS WHEREOF, Debtor has executed this Addendum this 30th day of
December, 1992.
WITNESSES: NAME:
EARL C. SHANKS WILLIAM F. FARLEY
------------------------ -------------------------------
Name: EARL C. SHANKS WILLIAM F. FARLEY
JOYCE A. PRIUITT
------------------------
Name: JOYCE A. PRIUITT
- 2 -
<PAGE> 30
EXHIBIT "A"
LIST OF RULE 144 SECURITIES
[Here list all Securities forming all or any portion of the Collateral
if (i) Debtor may be deemed to control the issuer or (ii) the
certificates evidencing the same bear a restrictive legend]
A-1
<PAGE> 1
EXHIBIT 99.k
FIRST AMENDMENT TO GENERAL SECURITY AGREEMENT
THIS FIRST AMENDMENT TO GENERAL SECURITY AGREEMENT (this "Amendment")
is made as of August 27, 1993, by and between WILLIAM F. FARLEY (the "Debtor")
and NATIONSBANK OF FLORIDA, N.A., a national banking corporation (the "Secured
Party").
RECITALS:
A. As of December 18, 1992, the Secured Party made a loan to the
Debtor in the original principal amount of $26,000,000.00 (the "Loan").
B. Among other things, the Loan is secured pursuant to that
certain General Security Agreement, entered into as of December 18, 1992,
between the Debtor and the Secured Party (the "Security Agreement").
C. The parties wish to amend the Security Agreement in certain
respects, as set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Recitals. The foregoing recitals are true and correct and are
hereby incorporated by this reference.
2. Modification of Security Agreement. Section 5(a) of the
Security Agreement is hereby modified by adding the following sentence at the
end thereof:
"Notwithstanding anything to the contrary contained herein, if
at any time the Ratio should fall to forty-five percent (45%)
or less, then, and in that event, within ten (10) days after
written request of the Debtor to the Secured Party, the
Secured
<PAGE> 2
Party shall release such of the Collateral as it shall
determine in order to cause the Ratio to rise to fifty
percent (50%)."
3. Confirmation of Security Agreement. Except as expressly
modified by this Amendment, the Security Agreement is hereby confirmed as being
in full force and effect and unmodified.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first above written.
W. Farley
- --------------------------------- ----------------------------------
WILLIAM F. FARLEY
- ---------------------------------
NATIONSBANK OF FLORIDA, N.A., a
national banking corporation
By: Keith Costello
- --------------------------------- -------------------------------
Name: KEITH COSTELLO
- --------------------------------- -----------------------------
Title: AVP
----------------------------
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<PAGE> 1
EXHIBIT 99.l
SECOND AMENDMENT TO GENERAL SECURITY AGREEMENT
THIS SECOND AMENDMENT TO GENERAL SECURITY AGREEMENT (this "Amendment")
is made as of June 27, 1994, by and between WILLIAM F. FARLEY (the "Debtor")
and NATIONSBANK OF FLORIDA, N.A., a national banking corporation, (the "Secured
Party").
RECITALS:
A. As of December 18, 1992, the Secured Party made a loan to the
Debtor in the original principal amount of $26,000,000.00 (the "Loan").
B. Among other things, the Loan is secured pursuant to that
certain General Security Agreement entered into as of December 18, 1992, as
amended by that certain First Amendment to General Security Agreement dated as
of August, 1993, each between the Debtor and the Secured Party (together the
"Security Agreement").
C. The parties wish to amend the Security Agreement in certain
respects, as set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Recitals. The foregoing recitals are true and correct and are
hereby incorporated by this reference.
2 . Modification of Security Agreement. The Security Agreement is
hereby modified to add the following Section 7(q) thereto:
<PAGE> 2
"7(q) The occurrence of a default under (i) that certain
Promissory Note dated August 4, 1992 in the principal amount
of $5,5OO,OOO.OO made by Eastville Shipping Limited, a company
registered and incorporated under the laws of the Isle of Man,
which evidences a $5,500,000.00 loan made by Secured Party to
Eastville Shipping Limited ("Yacht Loan") or that certain
Mortgage (To Secure Principal Sum and Interest) registered
with the Registrar of British Ships in Gibraltar on the yacht
named "L'Aquasition" which secures the Yacht Loan, or any
other document executed in connection with the Yacht Loan, or
(ii) that certain Revolving Promissory Note dated June 27,
1994 in the principal amount of $12,000,000.00 dated June 27,
1994 made by Debtor to Secured Party ("Unsecured Loan") or
that certain Guaranty of Payment dated June 27, 1994 executed
by Fruit of the Loom, Inc., a Delaware corporation, which
guarantees payment of the Unsecured Loan or any other document
executed in connection with the Unsecured Loans.
3. Confirmation of Security Agreement. Except as expressly
modified by this Amendment the Security Agreememt is hereby confirmed to be in
full force and effect and is unmodified, and Borrower confirms that all
representations and warranties contained in the Security Agreement and the
other "Loan Documents" (as defined in the Security Agreement) are true and
correct as of the date of this Amendment.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first above written.
W. Farley
- ------------------------------------ ------------------------------------
WILLIAM F. FARLEY
- ------------------------------------
NATIONSBANK OF FLORIDA, N.A., a
national banking corporation
By: Keith Costello
- ------------------------------------ ---------------------------------
Michael Pellegrino Name: COSTELLO
- ------------------------------------ -------------------------------
Title: VP
------------------------------
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<PAGE> 1
EXHIBIT 99.m
THIRD AMENDMENT TO GENERAL SECURITY AGREEMENT
THIS THIRD AMENDMENT TO GENERAL SECURITY AGREEMENT (this "Amendment")
is made as of December 18, 1994, by and between WILLIAM F. FARLEY (the
"Debtor") and NATIONSBANK OF FLORIDA, N.A., (the "Secured Party").
RECITALS:
A. As of December 18, 1992, Secured Party made a loan to the
Debtor in the original principal amount of $26,000,000.00 (the "0riginal
Loan"), which Original Loan was evidenced by that certain Secured Revolving
Promissory Note, dated December 18, 1992, executed by Debtor, in favor of
Secured Party.
B. As of December 18, 1994, Secured Party renewed the Original
Loan (the "Renewal Loan") in favor of Debtor, which Renewal Loan is evidenced
by that certain Secured Renewal Revolving Promissory Note, dated as of December
18, 1994, executed by Debtor, in favor of Secured Party.
C. The Renewal Loan is secured by, among other things, that
certain General Security Agreement, entered into as of December 18, 1992,
between Debtor and Secured Party, as amended pursuant to that certain First
Amendment to General Security Agreement, dated as of August 27, 1993, and as
further amended pursuant to that certain Second Amendment to General Security
Agreement, dated as of June 27, 1994 (collectively, the "Security Agreement").
<PAGE> 2
D. The parties wish to amend the Security Agreement in certain
respects, as set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Recitals. The foregoing recitals are true and correct and are
hereby incorporated by this reference.
2. Definitions. All capitalized terms used herein shall, except
as modified herein, have the meanings ascribed to them in the Security
Agreement.
3. Modifications of Security Agreement.
(a) Section 1(a) of the Security Agreement is hereby
amended and restated in its entirety to read as
follows:
The following described Securities (as
defined below):
(i) 800,000 shares of Class "B" common
stock of Fruit Of The Loom, Inc., as
evidenced by Certificate No. B130.
(ii) 250,000 shares of Class "B" common
stock of Fruit Of The Loom, Inc., as
evidenced by Certificate No. B135.
(iii) 500,000 shares of Class "B" common
stock of Fruit Of The Loom, Inc., as
evidenced by Certificate No. B141.
(b) Section 2 of the Security Agreement is hereby amended
to provide that the term "Note" (as used and defined
in the Security Agreement) shall mean
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<PAGE> 3
that certain Secured Revolving Promissory Note, dated
as of December 18, 1992, in the original principal
amount of $26,000,000.00 executed by Debtor, in favor
of Secured Party, as renewed pursuant to that certain
Secured Renewal Revolving Promissory Note, dated as
of December 18, 1994, in the original amount of
$26,000,000.00, executed by Debtor, in favor of
Secured Party.
(c) Section 4(b) of the Security Agreement is hereby
amended and restated in its entirety to read as
follows:
All Securities pledged and assigned hereunder are
(and with respect to all Collateral acquired
hereafter, shall be) duly authorized and validly
issued, fully paid and nonassessable, authentic,
genuine, unaltered and not stolen or forged or
counterfeit, and in all respects what they purport to
be. The collateral pledged and assigned hereunder is
duly registered under the 1933 Act, is freely
tradeable and assignable and is not subject to any
restrictions on transfer or resale or other
disposition in any manner. All stock hereafter
constituting Collateral shall also be duly registered
under the 1933 Act in a prompt manner satisfactory to
secured Party and shall be freely tradeable and
assignable and not subject to any restrictions on
transfer or resale or other disposition in any
manner. Promptly upon the registration of such
hereafter acquired collateral, Debtor shall deliver
to Secured Party evidence of such registration
acceptable to Secured Party.
(d) Section 4(s) is hereby amended to add the following:
The securities into which the Collateral was
convertible as of December 18, 1992, had sufficient
market value to provide an initial Obligations to
market value ratio of 50% based
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<PAGE> 4
upon the applicable stock closing prices on December
21, 1992, to Secured Party's satisfaction.
The securities into which the Collateral is
convertible have as of this date sufficient market
value to provide an initial Obligations to market
value ration of 50% based on the applicable stock
closing prices on December _, 1994, to Secured
Party's satisfaction.
(e) Section 4(y) of the Security Agreement is hereby
amended to read as follows:
On the date hereof, all stock constituting the
Collateral is registered under the 1933 Act.
(f) Section 7 of the Security Agreement is hereby amended
to add as Section (r) thereof the following:
In the event that on or before __________________,
1995 at 5:00 p.m., Eastern Time, counsel to Debtor
approved by Secured Party fails to issue a legal
opinion letter addressed to and in form and substance
satisfactory to Secured Party, as such in corporate,
securities, execution, delivery, enforceability and
other matters as may be required by Secured Party, in
its sole discretion.
(g) Section 12 of the Security Agreement is hereby
amended to provide that the address of Secured Party
is Private Banking, NationsBank of Florida, N.A., One
Financial Plaza, Eighth Floor, Ft. Lauderdale, FL
33394-5367.
(h) Section 3 of the Rule 144 Addendum which forms a part
of the Security Agreement is hereby amended and
restated in its entirety to read as follows:
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<PAGE> 5
Applicability. This Addendum supplements and
forms part of that certain General Security
Agreement, dated December 18, 1992, from
Debtor to Secured Party, as amended, as
concerns the Rule 144 Securities pledged and
assigned to Secured Party pursuant to said
Agreement and this Addendum, which are listed
in Exhibit "A" attached hereto and made a
part hereof.
(i) Exhibit "A" to the Security Agreement is hereby
amended and restated in its entirety to read as
follows: See Exhibit "A" attached hereto and by this
reference, made a part hereof.
4. Ratification. Except as expressly modified herein, all terms
and conditions of the Security Agreement, as amended by this Amendment, shall
remain in full force and effect and are hereby ratified and confirmed by the
Debtor.
5. Reaffirmation of Security Agreement. By its signature below,
the Debtor hereby reaffirms, ratifies and confirms that the Renewal Loan shall
and continue to be secured by the Security Agreement, as amended by this
Amendment.
6 . Representations and Warranties. The terms and conditions,
representations and warranties and affirmative and negative covenants as set
forth in the Security Agreement as modified herein, are hereby ratified and
confirmed by Debtor, and Debtor hereby agrees that said terms and conditions,
- 5 -
<PAGE> 6
representations and warranties and affirmative and negative covenants are valid
and true and correct as if made on the date hereof and applied to the
indebtedness of Debtor to the Secured Party.
7. Incorporation by Reference. Except as modified herein, the
terms and conditions of the Security Agreement are hereby incorporated by
reference and remain in full force and effect, enforceable in accordance with
the terms hereof.
8. Waiver of Jury Trial. DEBTOR AND SECURED PARTY HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO A
TRIAL BY JURY IN RESPECT TO ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT, OR ANY AGREEMENT CONTEMPLATED TO BE
EXECUTED IN C0NJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF EITHER PARTY OR IN RESPECT
OF THE COLLATERAL. THIS IS A MATERIAL INDUCEMENT FOR THE SECURED PARTY MAKING
THE RENEWAL LOAN.
9. Second Amendment. Debtor and Secured Party hereby acknowledge
and agree that each executed that certain Second Amendment to General Security
Agreenent, dated as of December 18, 1994 (the "Terminated Second Amendment"),
which Terminated Second Amendment contained certain typographical errors.
Accordingly, Debtor and Secured Party hereby acknowledge and agree that the
Terminated Second Amendment is hereby deemed terminated, null and void and of
no further force or effect, and is replaced in its entirety by this Amendment.
- 6 -
<PAGE> 7
10. Confirmation of Security Agreement. Except as expressly
modified by this Amendment, the Security Agreement is hereby confirmed as being
in full force and effect and unmodified.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first above written.
W. Farley
--------------------------------
William F. Farley
Michael Pellegrino Michael Pellegrino
- -------------------------------- --------------------------------
WILLIAM F. FARLEY
- --------------------------------
NATIONSBANK OF FLORIDA, N.A.
By:
- -------------------------------- -----------------------------
Name:
- -------------------------------- ---------------------------
Title:
--------------------------
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<PAGE> 1
EXHIBIT 99.n
NATIONSBANK HYPOTHECATION SECURITY AGREEMENT
NationsBank of Florida, N.A. AND SPECIAL POWER OF ATTORNEY
- -------------------------------------------------------------------------------
THIS ASSIGNMENT AND AGREEMENT made at Fort Lauderdale, Florida, this 4th day of
August, 1994, between NationsBank of Florida, NA, "One Financial Plaza, 8th
Floor, Ft. Lauderdale, Florida 33394, herein called Bank", and the undersigned,
William F. Farley c/o Eastville Shipping Limited, 233 South Wacker Drive, 5000
Sears Tower, Chicago, Illinois 60606 ("Guarantor").
As security for the payment of all loans and advances now or in the future made
to Eastville Shipping Limited, herein called "Borrower", including any
extensions, renewals or changes in form of any thereof and all other
liabilities as defined herein, the undersigned hereby delivers or deposits with
Bank and grants to Bank a security interest in: 50,000 shares of Fruit of the
Loom, Inc. stock number B136, and including all cash, stock and other dividends
and distributions and all rights to subscribe for securities and all other
rights incident to, declared or granted in connection with any property
hereinabove described or referred to (and all the foregoing may herein be
called the "Collateral"). As used herein, the term "liabilities" means and
includes all liabilities (primary, secondary, direct, contingent, sole, joint
or several) due or to become due or that may be hereafter contracted or
acquired, of Borrower or the undersigned to Bank. Notwithstanding the
foregoing, if the liabilities were incurred primarily for personal, family or
household purposes, Bank hereby expressly waives any other security interest(s)
previously given by the undersigned to or retained by Bank which would
otherwise secure the undersigned's (as Guarantor of Borrower) and Borrower's
obligations hereunder, excepting from the scope of this waiver only those
specific security interests and Collateral which are identified and described
above in the place provided for that purpose, together with any additions,
substitutions, or replacements thereto and the proceeds thereof, Bank also
retains its right of set off as authorized by law and as provided for herein.
As used herein, the term "default" means default as defined in any note or
other liability of Borrower or the undersigned Guarantor (as Guarantor of
Borrower) to Bank, including nonpayment of any interest or principal thereunder
when due; failure of any obligor to perform any agreement thereunder or
hereunder or otherwise a part of this loan transaction, or to pay in full, when
due, any liability whatsoever to Bank of Borrower or Guarantor or any
installment thereof or interest thereon, or any of the following by, against or
affecting the undersigned, Borrower or any maker or obligor of any note or
liability secured hereby: death, dissolution, termination of existence,
insolvency, business failure, appointment of a receiver of any part of the
property, assignment for the benefit of creditors, commencement of any
proceedings in bankruptcy or insolvency, entry of any judgment, issuing of any
attachment or garnishment, filing of any lien, (after Borrower or Guarantor has
had thirty (30) days from date of filing to dismiss any involuntary bankruptcy
filing), taking of possession of any substantial part of the property at the
instance of any governmental authority, merger, consolidation, or
reorganization, determination by Bank that a material
<PAGE> 2
adverse change has occurred in the financial condition from the conditions set
forth in the most recent financial statements heretofore furnished to Bank or
from the condition as heretofore most recently disclosed to Bank in any manner,
falsity in any material respect of, or any material omission in, any
representation or statement made to Bank; or pledge, assignment, transfer or
granting of a security interest in any equity in any of the Collateral
encumbered hereby without the written consent of Bank.
The undersigned warrants to Bank that such undersigned is the sole and lawful
owner of such Collateral, free of all claims and liens other than the security
interest hereunder of security interest except any prior lien of the Bank
arising out of loans to Guarantor by Bank, with full right to deliver and
pledge, and to assign, convey and transfer such property to Bank upon the terms
and conditions herein.
Bank shall exercise reasonable care in the custody and preservation of the
Collateral to the extent required by law, and shall be deemed to have exercised
reasonable care if it takes such action for that purpose as the undersigned
shall reasonably request in writing, but no omission to do any act not so
requested shall be deemed a failure to exercise reasonable care, and no
omission to comply with any such request shall of itself be deemed a failure to
exercise reasonable care. Bank shall not be bound to take any steps necessary
to preserve any rights in the Collateral against prior parties, and the
undersigned shall take all necessary steps for such purposes. Bank or its
nominee need not collect interest on or principal of any Collateral or give any
notice with respect to it.
Bank shall have, but shall not be limited to, the following rights, each of
which may be exercised at any time and from time to time at the option of Bank
without notice to the undersigned, whether or not any of the liabilities are
due: (1) to notify the parties obligated on any of the Collateral to make
payment to Bank of any of the amounts due or to become due thereon or
thereunder; (2) to enforce collection of any of the debt by suit or otherwise,
and surrender, release or exchange all of or any part thereof, or make any
compromise or settlement it deems desirable with reference to any of the debt,
or extend or renew from time to time for any period (whether or not longer than
the original period) any indebtedness evidenced thereby; and (3) to take
possession and control of any proceeds of the Collateral.
In the event the Borrower is in default Bank shall give thirty (30) days notice
to cure to Borrower and Guarantor. In the event efforts to collect any amount
due the Bank are unsuccessful after thirty (30) days from receipt of written
notice of default the Bank shall have the right to (1) transfer all or part of
the Collateral into the name of Bank or its nominee at the expense of the
undersigned, and Bank is hereby granted a special power of attorney to transfer
title to the Collateral to Bank in such case, with or without disclosing that
such Collateral is subject to the lien, and security interest hereunder (2) to
enforce collection of any of the Collateral by suit or otherwise, and
surrender, release and exchange all or any part thereof, or make any compromise
or settlement it deems desirable with reference to any
2
<PAGE> 3
of the Collateral and (3) to take possession and control of any proceeds of the
Collateral. Notwithstanding the foregoing if the Collateral is or includes
securities Bank, prior to default, shall not have title to and may not, vote or
direct the voting or dispose of or direct the disposition of such securities.
The terms and conditions of this paragraph shall take precedence over and
supersede any other terms or conditions in this agreement or other agreement or
instruments relating to the liability that are inconsistent herewith. This
power of attorney shall be deemed a power coupled with an interest and shall
not be terminable as long as the obligations of Borrower or Guarantor are
outstanding, and shall not terminate on the disability or incompetence of the
Pledgor.
Bank shall have the right at any time and from time to time, without notice,
to: (a) retain or obtain security title to or security interest in any property
given by the Guarantor to the Bank, in addition to the Collateral, to secure
any of the liabilities (b) retain or obtain the primary or secondary obligation
or liability of any party or parties, in addition to the undersigned or any of
them, with respect to any of the liabilities; (c) extend or renew, at Bank's
option, for any period (whether or not longer than the original period) or
exchange any of the liabilities or release or compromise any of the liabilities
of any party or parties primarily or secondarily liable thereon; (d) release
Bank's security title to, if any, and security interest in all or any property,
in addition to the Collateral securing any of the liabilities and permit any
substitution or exchange for any such properties. Notwithstanding the above the
Bank shall not release or compromise its security interest in the Collateral
from Borrower under the First Preferred Ships Mortgage at any time that
Guarantor remains liable to Bank for loans or advances made to Borrower.
If at any time any warranty, representation, certificate or statement of the
undersigned or Borrower is not true, or if any default should occur, or the
undersigned or Borrower should fail to observe or perform any agreement or term
hereof, or if Bank feels insecure for any reason whatsoever, Bank may, at its
option, thereupon or thereafter declare all liabilities of the Guarantor or
Borrower to Bank, or any of them selected by Bank (notwithstanding any
provisions thereof), immediately due and payable without notice or demand of
any kind (but with such adjustments, if any, with respect to interest or other
charges as may be provided for in the promissory note or other writing
evidencing such liability). Bank may in addition to any other rights and
remedies which it may have, subject to the terms above, exercise any or all of
the rights and remedies granted to a secured party upon default under the
Uniform Commercial Code and any note or other writing evidencing any liability
secured hereby; and, at the option of Bank, and without demand or notice of any
kind, appropriate and apply toward payment of such of the liabilities, and in
such order of application as Bank may from time to time elect, and balances,
credits, deposits, accounts, items or monies of Borrower or the Guarantor or
any of them. If any notification of intended disposition of any of the
Collateral or any other intended action is required by law, such notification
shall be deemed reasonably and properly given if mailed at least five (5) days
before such disposition or other intended action, postage
3
<PAGE> 4
prepaid, addressed to the undersigned (or if more than one, to such of the
undersigned as Bank shall have knowledge has an ownership interest in such
Collateral), either at the address of such undersigned shown hereon, or at any
other address of such undersigned appearing on the records of Bank. Any
proceeds of any disposition of any of the Collateral may be applied by Bank to
the payment of expenses in connection with the Collateral, including reasonable
attorney's fees and legal expenses (as specified in any note or other evidence
of liability held by Bank, but in any event, which shall include attorney's
fees of the suit, out of court, in trial, on appeal or in bankruptcy
proceedings) and any balance of such proceeds may be applied by Bank toward the
payment of such liabilities, and in such order of application, as Bank may from
time to time elect. All rights and remedies of the Bank applied by Bank
expressed herein are in addition to all other rights and remedies possessed by
it, including those under any other agreement or instrument relating to any of
the liabilities or any security therefor. No waiver by Bank of any of its
rights or remedies or of any default shall operate as a waiver of any other
right or remedy or of any other default or of the same right or remedy or of
the same default on a future occasion. No delay or omission on the part of Bank
in exercising any right or remedy shall operate as a waiver thereof, and no
single or partial exercise by Bank of any right or remedy shall preclude any
other or further exercise thereof or the exercise of any other right or remedy.
No action of Bank permitted hereunder or under any agreement or instrument
relating to any of the liabilities or any security therefor shall impair or
affect the right of Bank in and to the Collateral. The singular when used
herein shall include the plural and the neuter shall include the masculine and
feminine. If more than one party shall execute this agreement, the term
"undersigned" shall mean all parties signing this agreement and each of them,
and all such parties shall be jointly and severally obligated and liable
hereunder. All rights of Bank hereunder shall inure to the benefit of its
successors and assigns; and all obligations of the undersigned shall bind the
heirs, executors, administrators, successors and assigns of each of the
undersigned. Time is of the essence of this agreement.
This agreement may be terminated by either party giving the other written
notice of intention to terminate on a date named in said notice, mailed or
delivered to the address in the preamble to this agreement or the last known
address of the party to whom such notice is addressed, as shown on the records
of Bank or otherwise known; but not such termination shall in any way affect
the rights and liabilities of the parties hereunder relating to loans or
advances made or any of the Collateral pledged as security herein, and the sole
effect of termination hereof shall be to exclude from this agreement
liabilities thereafter arising that are unconnected with liabilities
theretofore arising or transactions theretofore entered into.
This agreement shall be construed in accordance with the laws of Florida.
Whenever possible, each provision of this agreement shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this agreement shall be prohibited by or invalid under applicable
law, such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
4
<PAGE> 5
remaining provisions of this agreement. To the extent permitted by applicable
law, Borrower hereby waives any provision of law that renders any provision
hereof prohibited or unenforceable in any respect. ANY LITIGATION ARISING
HEREUNDER OR RELATED HERETO SHALL BE COMMENCED AND CONDUCTED IN THE STATE OR
FEDERAL COURTS OF THE STATE OF FLORIDA, UNLESS THE BANK ELECTS OTHERWISE IN
ORDER TO REALIZE ON COLLATERAL LOCATED OUTSIDE OF FLORIDA.
IN WITNESS WHEREOF, this agreement has been duly executed as of the date
hereinabove first written.
William F. Farley
----------------------------
William F. Farley
Signed, sealed and delivered in the presence of:
- --------------------------------------
- --------------------------------------
State of Illinois
County of Cook
Acknowledged before me this 4th day of August, 1994.
Carol A. Green
- ----------------------------------
Notary Public
OFFICIAL SEAL
CAROL A GREEN
NOTARY PUBLIC, STATE OF ILLINOIS
MY COMMISSION EXPIRES 09-01-97
5
<PAGE> 1
EXHIBIT 99.p
POWER OF ATTORNEY
By my signature below I hereby constitute LARRY SWITZER, EARL SHANKS,
HERBERT S. WANDER and HOWARD LANZNAR and each of them my true and lawful
attorney in fact and agent with full power of substitution and resubstitution,
in my name, place and stead, to sign all amendments to this Schedule 13D and
to file the same with the Securities and Exchange Commission and make such
other filings as required under Section 13(d) of the Securities Exchange Act
of 1934, as amended.
/S/ WILLIAM FARLEY
- -------------------------------------
William Farley
Dated: November 17, 1995
