<PAGE> 1
Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(MARK ONE)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
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Commission File Number 1-5091
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FUQUA ENTERPRISES, INC.
-----------------------
(Exact name of registrant as specified in its charter)
DELAWARE 13-1988043
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ONE ATLANTIC CENTER, SUITE 5000
1201 W. PEACHTREE STREET, N.W., ATLANTA, GEORGIA 30309
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(Address of principal executive offices)
Registrant's telephone number, including area code: 404-815-2000
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes No X
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date. As of July 31, 1996, there
were 4,478,847 shares outstanding of Common Stock, Par Value $2.50 per share.
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FUQUA ENTERPRISES, INC. AND SUBSIDIARIES
INDEX
<TABLE>
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
- June 30, 1996 and December 31, 1995
Condensed Consolidated Statements of Income
- for three months and six months ended June 30, 1996 and June 30, 1995
Condensed Consolidated Statements of Cash Flows
- for six months ended June 30, 1996 and June 30, 1995
Notes to Condensed Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 4. Submission of Matters to a Vote of Security Holdings
Item 6. Exhibits and Reports on Form 8-K
</TABLE>
(i)
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
FUQUA ENTERPRISES, INC. AND SUBSIDIARIES
(Dollars in thousands)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
June 30, December 31,
1996 1995
------------ --------------
<S> <C> <C>
ASSETS
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,017 $ 29,000
Investments available for sale . . . . . . . . . . . . . . . . . . . . . . . . 22,381 12,550
Receivables
Trade accounts, less allowance of $312 (1995, $200) . . . . . . . . . . . . . 36,032 19,102
Note receivable from sale of subsidiary . . . . . . . . . . . . . . . . . . . 11,662 11,352
Lease receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,287 -
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32,288 21,695
Prepaid expenses and other assets . . . . . . . . . . . . . . . . . . . . . . . 3,125 910
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,892 3,614
-------------------------
Total Current Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 118,684 98,223
-------------------------
Property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . 45,740 32,303
Less accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . (12,481) (10,841)
-------------------------
Net Property, Plant and Equipment . . . . . . . . . . . . . . . . . . . . . 33,259 21,462
-------------------------
Intangible assets, less accumulated amortization of $172 (1995, $25) . . . . . 12,845 5,013
Lease receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,388 -
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,127 1,066
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 297 95
-------------------------
Total Assets of Continuing Operations . . . . . . . . . . . . . . . . . . . 173,600 125,859
Total Assets of Discontinued Operations . . . . . . . . . . . . . . . . . . 8,115 10,903
-------------------------
Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $181,715 $ 136,762
=========================
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
1
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CONDENSED CONSOLIDATED BALANCE SHEETS
FUQUA ENTERPRISES, INC. AND SUBSIDIARIES
(Dollars in thousands, except share data)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
June 30, December 31,
1996 1995
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<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ - $ 2,064
Accounts payable and accrued expenses . . . . . . . . . . . . . . . . . . . . . 27,068 18,800
Long-term liabilities due within one year . . . . . . . . . . . . . . . . . . . 12,557 11,668
-------------------------
Total Current Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 39,625 32,532
Long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56,867 22,041
-------------------------
Total Liabilities of Continuing Operations . . . . . . . . . . . . . . . . 96,492 54,573
Total Liabilities of Discontinued Operations . . . . . . . . . . . . . . . - 301
-------------------------
Total Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96,492 54,874
-------------------------
Stockholders' equity
Preference stock, $1 par value:
authorized 8,000,000 shares; none issued . . . . . . . . . . . . . . . . . - -
Common stock, $2.50 par value:
authorized 20,000,000 shares; issued 4,523,669
shares; (1995, 4,443,169 shares) . . . . . . . . . . . . . . . . . . . . . 11,309 11,108
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . 24,847 24,074
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,088 46,698
Unrealized gains (losses) on investments . . . . . . . . . . . . . . . . . . . (174) 28
-------------------------
86,070 81,908
Treasury stock, at cost: 44,822 shares; (1995, 995 shares) . . . . . . . . . . (847) (20)
-------------------------
Total Stockholders' Equity . . . . . . . . . . . . . . . . . . . . . . . 85,223 81,888
-------------------------
Total Liabilities and Stockholders' Equity . . . . . . . . . . . . . . . $181,715 $ 136,762
=========================
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
2
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FUQUA ENTERPRISES, INC. AND SUBSIDIARIES
(In Thousands, Except Per Share Data)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
FOR THREE MONTHS ENDED FOR SIX MONTHS ENDED
JUNE 30, JUNE 30,
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1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES:
Net Sales . . . . . . . . . . . . . . . . . . . . . . . $ 46,898 $ 33,692 $ 77,398 $ 57,742
Investment income . . . . . . . . . . . . . . . . . . . 597 167 1,267 366
-------------------------------------------------------
Total revenues . . . . . . . . . . . . . . . . . . . . 47,495 33,859 78,665 58,108
-------------------------------------------------------
COSTS AND EXPENSES:
Cost of sales . . . . . . . . . . . . . . . . . . . . . 36,163 28,797 60,374 49,708
Selling, general and administrative expenses . . . . . 7,802 2,566 11,801 4,611
Interest expense . . . . . . . . . . . . . . . . . . . 761 295 1,094 515
-------------------------------------------------------
Total costs and expenses . . . . . . . . . . . . . . . 44,726 31,658 73,269 54,834
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INCOME FROM CONTINUING OPERATIONS BEFORE
INCOME TAXES . . . . . . . . . . . . . . . . . . . . . 2,769 2,201 5,396 3,274
INCOME TAXES . . . . . . . . . . . . . . . . . . . . . . 931 852 1,958 1,263
-------------------------------------------------------
INCOME FROM CONTINUING OPERATIONS . . . . . . . . . . . . 1,838 1,349 3,438 2,011
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DISCONTINUED OPERATIONS:
Income from discontinued operations, net . . . . . . . - 470 - 1,253
-------------------------------------------------------
NET INCOME . . . . . . . . . . . . . . . . . . . . . . . $ 1,838 $ 1,819 $ 3,438 $ 3,264
=======================================================
PER SHARE:
Income from Continuing Operations . . . . . . . . . . . $ .40 $ .35 $ .76 $ .52
Net Income . . . . . . . . . . . . . . . . . . . . . . $ .40 $ .47 $ .76 $ .84
Common shares and equivalents . . . . . . . . . . . . . . 4,603 3,857 4,551 3,861
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
3
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FUQUA ENTERPRISES, INC. AND SUBSIDIARIES
(Dollars in thousands)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
For Six Months Ended
June 30,
------------------------
1996 1995
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<S> <C> <C>
OPERATING ACTIVITIES
Net cash used in continuing operations . . . . . . . . . . . . . . . . . . . $ (6,945) $ (7,713)
Net cash provided by (used in) discontinued operations . . . . . . . . . . . 3,706 1,218
-------------------------
Net Cash Used In All Operations . . . . . . . . . . . . . . . . . . . . . (3,239) (6,495)
-------------------------
INVESTING ACTIVITIES
Purchase of business, net of cash acquired . . . . . . . . . . . . . . . . . (41,300) -
Sales of available for sale investments . . . . . . . . . . . . . . . . . . . 10,517 2,625
Purchases of available for sale investments . . . . . . . . . . . . . . . . . (20,685) (375)
Purchase of property, plant and equipment . . . . . . . . . . . . . . . . . . (1,020) (955)
Total from discontinued operations . . . . . . . . . . . . . . . . . . . . . (165) (205)
-------------------------
Net Cash Provided By (Used In) Investing Activities . . . . . . . . . . . (52,653) 1,090
-------------------------
FINANCING ACTIVITIES
Net increase in notes payable and long-term liabilities . . . . . . . . . . . 34,826 6,729
Payment of long-term liabilities . . . . . . . . . . . . . . . . . . . . . . (2,064) (464)
Exercise of stock options . . . . . . . . . . . . . . . . . . . . . . . . . . 974 75
Acquired shares for treasury . . . . . . . . . . . . . . . . . . . . . . . . (827) -
-------------------------
Net Cash Provided By Financing Activities . . . . . . . . . . . . . . . 32,909 6,340
-------------------------
Increase (Decrease) in Cash and Cash Equivalents
Continuing Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . (26,524) (78)
Discontinued Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,541 1,013
Cash and Cash Equivalents, Beginning of Period . . . . . . . . . . . . . . . . 29,000 4,231
-------------------------
Cash and Cash Equivalents, End of Period . . . . . . . . . . . . . . . . . . . $ 6,017 $ 5,166
-------------------------
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
4
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FUQUA ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1996
1. CORPORATE DEVELOPMENT ACTIVITIES:
Fuqua Enterprises, Inc. ("Fuqua"), formerly Vista Resources, Inc., changed
its name to Fuqua in September 1995. Additionally, in December, 1995 Fuqua
sold its insurance subsidiary, American Southern Insurance Company ("American
Southern") and, in January 1996, made the decision to discontinue the
operations of Kroy Tanning Company, Incorporated ("Kroy").
The results of operations of American Southern and Kroy have been classified
as discontinued operations in the accompanying 1995 three months and six months
results as follows:
<TABLE>
<CAPTION>
FOR THREE MONTHS ENDED FOR SIX MONTHS ENDED
(Dollars in thousands) JUNE 30, 1995 JUNE 30, 1995
- -------------------------------------------------------------------------------------------------------
<S> <C> <C>
Revenues $ 14,434 $ 28,131
Costs and expenses 13,986 26,741
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Income before income taxes 448 1,390
Income taxes (22) 137
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Net income $ 470 $ 1,253
======== ========
</TABLE>
In November 1995, Fuqua acquired Basic American Medical Products, Inc.
("Basic"). Basic, through its divisions, Simmons Healthcare, Omni Manufacturing
and SSC Medical, is a manufacturer and distributor of medical equipment and
furnishings for the acute, long-term and home health care markets.
In April 1996, Fuqua, through its wholly-owned subsidiaries, Lumex Medical
Products, Inc. and MUL Acquisition Corp. II, consummated the acquisition of
the medical products operations of Lumex, Inc. (the "Lumex Division") for
approximately $40.7 million in cash, subject to final adjustment as provided in
the asset sale agreement. The final purchase price adjustment has not
currently been resolved and may ultimately be settled by arbitration which
could result in a change in the purchase price and the allocation thereof to
the net assets acquired. The purchase price consisted of all cash and was
financed with internal funds and $33.0 million of borrowings under Fuqua's
Revolving Credit Facility. The Lumex Division, whose 1995 net sales were $63
million, is headquartered in Bay Shore, Long Island, New York and develops and
markets a wide range of health care products including, patient aids, specialty
seating, bathroom safety, mobility products, health care beds and therapeutic
support systems.
2. PER SHARE CALCULATIONS:
Per share calculations are based on the average number of shares outstanding
plus common stock equivalents. Common stock equivalents include the effect of
options granted to key employees under Fuqua's Stock Option Plans, using the
treasury stock method. Fully diluted per share calculations are not
significantly different from those reported.
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3. INVENTORIES:
Inventories consisted of the following:
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
(Dollars in thousands) 1996 1995
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
Finished goods $ 3,412 $ 6,598
Work in progress 16,691 6,738
Raw materials and supplies 12,185 8,359
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$ 32,288 $ 21,695
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</TABLE>
4. SUPPLEMENTAL CASH FLOW INFORMATION:
<TABLE>
<CAPTION>
FOR SIX MONTHS ENDED
JUNE 30,
--------------------------
(Dollars in thousands) 1996 1995
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
Interest payments $ 1,565 $ 963
-------- --------
Income tax payments $ 2,058 $ 2,121
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</TABLE>
5. REVOLVING CREDIT FACILITY:
In June 1996, Fuqua amended its Revolving Credit Facility to expand the
maximum borrowing amount from $60 million to $100 million. The Revolving
Credit Facility bears interest based on matrix pricing. At June 30, 1996,
borrowings under the Revolving Credit Facility were $51.5 million which accrue
interest at the rate of LIBOR plus 50 basis points. The covenants of the
Revolving Credit Facility are substantially the same as those which existed
under Fuqua's previous credit facility and include normal and customary
restrictions regarding funded debt to capital, funded debt to cash flow,
interest coverage and limitations of dividend payments and treasury stock
purchases.
6. CAPITAL STOCK:
During the second quarter of 1996, options for 500 shares of common stock
were exercised at $8.50 per share, leaving 668,000 shares reserved (425,000
shares granted, 243,000 shares available for grant) in connection with Fuqua's
stock option plans. During the second quarter of 1996, no shares of common
stock were acquired by Fuqua for its treasury.
During the second quarter of 1995, options for 6,000 shares were exercised
at $8.50 per share and Fuqua did not purchase any shares for its treasury.
7. ENVIRONMENTAL CONTINGENCY:
In March 1994, the office of the District Attorney of Suffolk County, Long
Island, New York initiated an investigation to determine whether regulated
substances had been discharged from one of the Lumex Division's Bay Shore
facilities in excess of permitted levels. An environmental consulting firm was
engaged by the Lumex Division to conduct a more comprehensive site
investigation, develop a remediation work plan and provide a remediation cost
estimate. These activities were performed to determine the nature and extent
of contaminates present on the site and to evaluate their potential off-site
extent.
In connection with Fuqua's April 1996 acquisition of the Lumex Division, Fuqua
assumed the obligations associated with this environmental matter. At the time
of Fuqua's acquisition, the Lumex Division had $1.3 million in reserves for
remediation costs, including additional investigations costs as may be
required. Reserves are established when it is probable that a liability has
been incurred and such costs can be reasonably estimated. The Lumex Division's
estimates of these costs were based upon currently enacted laws and regulations
and the professional judgment of consultants and counsel. Where available
information was sufficient to estimate the amount of liability, that estimate
has been used. Where information was only sufficient to establish a range of
probable liability and no point within
6
<PAGE> 9
the range is more likely than another, the lower end of the range has been
used. The Lumex Division did not assume any such costs will be recoverable
from third parties nor has the Lumex Division discounted any of its cost
estimates although a portion of the remediation work plan would be performed
over a period of years.
The amounts of these liabilities are difficult to estimate due to such
factors as the extent to which remedial actions may be required, laws and
regulations change or the actual costs of remediation differ when the final
work plan is performed. The estimate of the costs, which is not probable but
for which there exists at least a reasonable possibility of occurrence,
exceeds the reserves recorded by the Lumex Division by $2.2 million.
-------------------
The unaudited condensed financial statements reflect all adjustments
(consisting of normal recurring accruals) which are, in the opinion of
management, necessary for a fair presentation of the results for the interim
periods. It is suggested that these unaudited condensed consolidated financial
statements be read in conjunction with the consolidated financial statements
and notes thereto included in Fuqua's 1995 Annual Report on Form 10-K.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
CORPORATE DEVELOPMENT ACTIVITIES:
Acquisitions: In November 1995, Fuqua acquired 100% of the common stock of
Basic American Medical Products, Inc. ("Basic"). Basic, through its
divisions, Simmons Healthcare, Omni Manufacturing and SSC Medical, is a
manufacturer and distributor of medical equipment and furnishings for the
acute, long-term and home health care markets. Basic's results of operations
have been included in the consolidated results of Fuqua for the three months
and six months ended June 30, 1996.
In April 1996, Fuqua, through its wholly-owned subsidiaries, Lumex Medical
Products, Inc. and MUL Acquisition Corp. II, consummated the acquisition of
the medical products operations of Lumex, Inc. (the "Lumex Division") for
approximately $40.7 million, subject to final adjustment as provided in the
asset sale agreement. The final purchase price adjustment has not currently
been resolved and may ultimately be settled by arbitration which could result
in a change in the purchase price and the allocation thereof to the net assets
acquired. The purchase price consisted of all cash and was financed with
internal funds and borrowings under Fuqua's Revolving Credit Facility. The
Lumex Division, whose 1995 net sales were $63 million, develops and markets a
wide range of health care products including patient aids, specialty seating,
bathroom safety, mobility products, health care beds and therapeutic support
systems. The Lumex Division is headquartered in Bay Shore, Long Island, New
York and markets the majority of its products to the home health care market
and the remainder to institutional markets, including acute care and extended
care facilities and dialysis clinics. The results of operations of the Lumex
Division have been included in Fuqua's consolidated results for the second
quarter of 1996 and, together with Basic's results, represents Fuqua's Medical
Products Operations. Management believes that Basic and the Lumex Division
will provide a base for Fuqua's further expansion in the medical products
markets.
In April 1996, Fuqua's Leather Operations, through a joint venture, acquired
an interest in a tannery in the People's Republic of China. As a result, the
Leather Operations will produce leather in China and will market the products
throughout China and Southeast Asia. The results of operations of the joint
venture have been included in the consolidated results of Fuqua for the three
months ended June 30, 1996.
RESULTS OF OPERATIONS AND FINANCIAL CONDITION:
Medical Products Operations: Net sales in the second quarter of 1996 were
$20,143,000 which produced a net operating profit of $712,000 and resulted in a
net profit margin of 3.5%, after selling and administrative costs of
$4,976,000. Net sales for the six months ended June 30, 1996 were $27,773,000
which produced a net operating profit of $1,426,000 and resulted in a net
profit margin of 5.1%, after selling and administrative costs of $6,394,000.
7
<PAGE> 10
The margins in the second quarter of 1996 were unfavorably impacted by the
costs of assimilating the Lumex Division into Fuqua's Medical Products
Operations.
Inventories at June 30, 1996 were $15,213,000 as compared to $5,267,000 at
December 31, 1995 and accounts receivable at June 30, 1996 were $13,958,000 as
compared to $5,740,000 at December 31, 1995. The significant increases at June
1996 reflect the impact of the April 1996 acquisition of the Lumex Division.
Capital expenditures for the Medical Products Operations were $230,000 in
the second quarter of 1996 and were $346,000 for the first half of 1996.
Capital expenditures are expected to be approximately $900,000 for the entire
year of 1996. Depreciation and amortization expense for the second quarter of
1996 was $651,000 and for the first half of 1996 was $848,000.
Leather Operations: Net sales of the Leather Operations were $26,755,000 in
the second quarter of 1996 which was a decrease of $6,937,000 or 20.6% compared
to the second quarter of 1995. The net sales for the first half of 1996 were
$49,625,000 which was a decrease of $8,117,000 or 14.1% compared to the first
half of 1995. These decreases were principally the result of decreased volume
of leather shipped to producers of shoes who were adversely affected by soft
retail demand. Sales to foreign customers represented 28.0% of net sales in
the second quarter of 1996 as compared to 31.0% of net sales in the second
quarter of 1995.
The gross profit margin increased to 18.9% of sales in the second quarter of
1996 and 18.5% in the first half of 1996 from 14.5% and 13.9%, respectively, in
the comparable periods of 1995, primarily due to lower hide costs in 1996.
Selling and administrative expenses of $1,953,000 in the second quarter of
1996 decreased $58,000 or 2.9% compared to the second quarter of 1995. The
selling and administrative expenses in the first six months of 1996 were
$3,682,000 and decreased $182,000 or 5.2% compared to the first half of 1995.
The decreases in selling and administrative expenses in 1996 were due
principally to reduced selling expenses associated with lower levels of foreign
sales.
Accounts receivable were higher, $22,074,000 at June 30, 1996, as compared
to $13,043,000 at December 31, 1995, due principally to seasonal factors.
During the second quarter of 1996, inventories increased 3.9%, from $16,428,000
at December 31, 1995 to $17,075,000 at June 30, 1996.
Capital expenditures for the Leather Operations were $137,000 in the second
quarter of 1996 and $607,000 for the first half of 1996. Capital expenditures
are expected to be approximately $1,500,000 for the entire year of 1996.
Depreciation expense for the Leather Operations in the second quarter of 1996
was $468,000 and $892,000 for the first half of 1996 as compared to $464,000
and $814,000 for the respective periods of 1995.
Corporate Office Operations: Investment income in the second quarter of
1996 was $597,000 and $1,267,000 in the first half of 1996 as compared to
$167,000 for the second quarter and $366,000 for the first half of 1995. The
increase in investment income in 1996 reflects the return on the proceeds from
the sale of Fuqua's insurance subsidiary in December 1995.
Interest expense in the second quarter of 1996 was $761,000 and $1,094,000
in the first half of 1996 as compared to $295,000 and $515,000, respectively,
in the comparable periods of 1995. The 1996 amounts reflect the higher
interest and costs associated with the larger amounts of outstanding debt
incurred in connection with acquisitions.
General and Administrative expenses for corporate office activities were
$873,000 in the second quarter of 1996 as compared to $555,000 in the
comparable period of 1995 and were $1,725,000 in the first half of 1996 as
compared to $1,111,000 in the first half of 1995. The increases in 1996
amounts resulted mainly from higher costs and expenses associated with higher
levels of corporate development activity.
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<PAGE> 11
The provision for income taxes for the first six months of 1996 represents
an effective tax rate of 36.2% compared to 38.5% for the first half of 1995.
This decrease reflects the favorable impacts of tax planning in 1996, and
management expectations regarding the income tax position at the end of Fuqua's
calendar year.
Discontinued Operations: During December 1995, Fuqua sold its insurance
subsidiary, American Southern Insurance Company ("American Southern") for
$34,000,000 to Atlantic American Corporation, an Atlanta, Georgia based
publicly-held insurance holding company. The proceeds from the sale included
cash of $22,648,000 and a note receivable from the purchaser of $11,352,000.
The note bears interest at prime, half of which is payable quarterly and half
of which is payable, together with principal, in October 1996. The term and
amount of the note receivable is the same as the note payable which arose in
connection with Fuqua's acquisition of American Southern in 1991. Management
expects that the note payable will be repaid from the proceeds of the note
receivable or, to the extent necessary, repaid with a drawing under a Letter of
Credit Agreement which will then be replaced with borrowings under Fuqua's
Revolving Credit Facility. The note payable and related acquisition agreements
provide for indemnification and certain offset rights which, to the extent
claims remain outstanding in October 1996, could result in a delay of payment
of the full amount of the note payable. The note receivable from Atlantic
American and the related acquisition agreement have similar offset and
indemnification rights. In July 1996, American Southern lost its appeal of an
unfavorable ruling regarding disputed amounts of tax which the State of Florida
claimed should have been paid by American Southern for tax years up through and
including 1991. The total amount in dispute, including maximum interest and
penalty is approximately $2,000,000. The company from which Fuqua acquired
American Southern is obligated to indemnify Fuqua for this amount and, in the
event the indemnity payment is not made by such company, Fuqua will offset such
amount against the note payable ($11,559,000 outstanding at June 30, 1996)
which Fuqua owes in connection with Fuqua's purchase of American Southern in
1991.
In January 1996, Fuqua made the decision to discontinue the operations of
Kroy Tanning Company, Incorporated, ("Kroy"), which historically had been
unprofitable. Accordingly, Kroy has been treated as a discontinued operation.
In connection with Fuqua's decision to discontinue the operations of Kroy,
$4,800,000, before the benefit of income taxes, was accrued at December 31,
1995 to write down assets to their estimated net realizable values and to pay
for obligations, including environmental clean up costs, in connection with the
wind down of operations and the closing of Kroy's facility in East Wilton,
Maine.
Recent Pronouncements: In March 1995, the Financial Accounting Standards
Board issued Statement No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed of" ("SFAS 121"), which
requires impairment losses to be recorded on long-lived assets used in
operations when indicators of impairment are present and the undiscounted cash
flows estimated to be generated by those assets are less than the assets'
carrying amount. SFAS 121 also addresses the accounting for long-lived assets
that are expected to be disposed. Fuqua adopted SFAS 121 in the first quarter
of 1996 and its adoption did not have a material impact on its results of
operations or financial position.
In October 1995, the Financial Accounting Standards Board issued Statement
No. 123, "Accounting for Stock-Based Compensation", which encourages companies
to recognize expense for stock-based awards based on their fair market value on
the date of grant. Fuqua has elected to continue to use APB No. 25,
"Accounting for Stock Issued to Employees" for expense recognition purposes,
but will be required by Statement 123 to show pro forma disclosures in Fuqua's
1996 financial statements.
LIQUIDITY:
Fuqua, as a result of having the proceeds from the sale of American Southern
and having expanded the Revolving Credit Facility from $60,000,000 to
$100,000,000, had at June 30, 1996, $28,398,000 in cash and investments and had
substantial borrowing capacity. The covenants of the expanded Revolving Credit
Facility are substantially the same as those which existed under Fuqua's
previous credit facility and include normal and customary restrictions
regarding funded debt to capital, funded debt to cash flow, interest coverage
and limitations of dividend payments and treasury stock purchases. Management
believes that Fuqua has adequate resources and borrowing capacity to meet its
obligations when due and to pursue an active plan of expansion through
acquisitions.
9
<PAGE> 12
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS:
In March 1994, the office of the District Attorney of Suffolk County, Long
Island, New York initiated an investigation to determine whether regulated
substances had been discharged from one of the Lumex Division's Bay Shore
facilities in excess of permitted levels. An environmental consulting firm was
engaged by the Lumex Division to conduct a more comprehensive site
investigation, develop a remediation work plan and provide a remediation cost
estimate. These activities were performed to determine the nature and extent
of contaminates present on the site and to evaluate their potential off-site
extent.
In connection with Fuqua's April 1996 acquisition of the Lumex Division, Fuqua
assumed the obligations associated with this environmental matter. At the time
of Fuqua's acquisition, the Lumex Division had $1.3 million in reserves for
remediation costs, including additional investigations costs as may be
required. Reserves are established when it is probable that a liability has
been incurred and such costs can be reasonably estimated. The Lumex Division's
estimates of these costs were based upon currently enacted laws and regulations
and the professional judgment of consultants and counsel. Where available
information was sufficient to estimate the amount of liability, that estimate
has been used. Where information was only sufficient to establish a range of
probable liability and no point within the range is more likely than another,
the lower end of the range has been used. The Lumex Division did not assume
any such costs will be recoverable from third parties nor has the Lumex
Division discounted any of its cost estimates although a portion of the
remediation work plan would be performed over a period of years.
The amounts of these liabilities are difficult to estimate due to such
factors as the extent to which remedial actions may be required, laws and
regulations change or the actual costs of remediation differ when the final
work plan is performed. The estimate of the costs, which is not probable but
for which there exists at least a reasonable possibility of occurrence, exceeds
the reserves recorded by the Lumex Division by $2.2 million.
The nature of Fuqua's business results in claims or litigation which
management believes to be routine and incidental to Fuqua's business. Fuqua
maintains insurance in such amounts and with such coverages and deductibles as
management believes are reasonable and prudent, although in certain actions,
plaintiffs request damages that may not be covered by insurance. Management
does not believe that the outcome of any such pending claims and litigation
will have an adverse material effect upon Fuqua's results of operations or
financial condition, although no assurance can be given as to the ultimate
outcome of any such claim or litigation.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Annual Meeting of Stockholders held on June 1, 1996, the stockholders
voted as follows:
1. Re-elected all the nominees as listed in the Proxy Statement, dated April
16, 1996, to the Board of Directors.
<TABLE>
<CAPTION>
Votes For Votes Withheld
--------- --------------
<S> <C> <C>
J. B. Fuqua 4,096,661 shares 193,625 shares
J. Rex Fuqua 4,097,661 shares 192,625 shares
W. Clay Hamner 4,097,666 shares 192,620 shares
Frank W. Hulse IV 4,097,666 shares 192,620 shares
Lawrence P. Klamon 4,097,661 shares 192,625 shares
Richard C. Larochelle 4,097,261 shares 193,025 shares
Gene J. Minotto 4,097,266 shares 193,020 shares
Clark L. Reed, Jr. 4,093,086 shares 197,200 shares
D. Raymond Riddle 4,096,666 shares 192,620 shares
</TABLE>
10
<PAGE> 13
2. Approved Fuqua's 1995 Long-Term Incentive Plan, which provides for
granting incentives and awards in the form of options to purchase Common
Stock, stock appreciation rights, performance shares, restricted stock,
dividend equivalent rights and other stock-based awards to key personnel.
There are 300,000 shares of Common Stock reserved for use in connection
with this plan.
<TABLE>
<S> <C> <C>
1995 Long Term Incentive Plan For 3,013,889 shares
Against 588,394 shares
Abstain 16,212 shares
</TABLE>
3. Approved Fuqua's 1995 Stock Option Plan for Outside Directors, which
provides for the automatic grant of an option to purchase 1,000 shares of
Common Stock to each outside director after each annual term. There are
50,000 shares reserved for this plan.
<TABLE>
<S> <C> <C>
1995 Stock Option Plan for Outside Directors For 3,311,522 shares
Against 289,096 shares
Abstain 17,877 shares
</TABLE>
4. Approved an amendment to Fuqua's Certificate of Incorporation (the
"Certificate") to update the preferred stock authorization provisions
therein, in keeping with the current Delaware General Corporation Law.
Fuqua has no preferred stock outstanding.
<TABLE>
<S> <C> <C>
Update of Preferred Stock Authorization Provisions For 3,289,339 shares
Against 604,529 shares
Abstain 19,520 shares
</TABLE>
5. Approved an amendment to the indemnification provisions of the Certificate
to provide that each person involved in any proceeding by reason of the
fact that he is or was an officer or director of Fuqua or serving at
Fuqua's request in a similar capacity for other entities shall be
indemnified to the fullest extent permitted by the Delaware General
Corporation Law.
<TABLE>
<S> <C> <C>
Amendment to the Indemnification Provisions For 3,808,213 shares
Against 82,885 shares
Abstain 22,290 shares
</TABLE>
6. Approved an amendment to the director exculpation provisions in the
Certificate to provide Fuqua's directors with the maximum protection from
personal liability available under the Delaware General Corporation Law.
<TABLE>
<S> <C> <C>
Amendment to the Director Exculpation Provisions For 3,803,199 shares
Against 91,330 shares
Abstain 18,859 shares
</TABLE>
7. Approved the elimination of certain interested director and officer
transaction provisions in the Certificate which relate to the validity of
contracts and transactions in which Fuqua's directors or officers could be
said to have an interest.
<TABLE>
<S> <C> <C>
Elimination of Certain Interested Director and For 3,628,182 shares
Officer Transactions Provisions Against 263,223 shares
Abstain 21,983 shares
</TABLE>
8. Approved the elimination of a provision in the Certificate regarding
ratification of prior acts of Fuqua's officers and directors.
<TABLE>
<S> <C> <C>
Elimination of a Provision Regarding Ratification For 3,629,738 shares
of Prior Acts Against 261,334 shares
Abstain 22,316 shares
</TABLE>
11
<PAGE> 14
9. Approved certain housekeeping amendments to the Certificate to conform to
the current Delaware General Corporation Law.
<TABLE>
<S> <C> <C>
Housekeeping Amendments For 3,845,112 shares
Against 50,391 shares
Abstain 17,885 shares
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Listing of Exhibits
<TABLE>
<CAPTION>
Exhibits Incorporated Herein by Reference
----------------------------------------------------------
Designation Document with Which Exhibit Designation of Such
of Exhibit in Description of Was Previously Filed with Exhibit in That
This Form 10-Q Exhibits Commission Document
- -------------- ----------------------------------- ----------------------------------- --------------------
<S> <C> <C> <C>
3(a) Amended and Restated Certificate of Registration Statements on Form S-8, 4(a)
Incorporation of Fuqua Nos. 333-05461 and 333-05485, dated
June 7, 1996
3(b) Bylaws of Fuqua Registration Statements on Form S-8, 4(b)
Nos. 333-05461 and 333-05485, dated
June 7, 1996
10(a) Amended and Restated Credit Agreement
between SunTrust Bank, Atlanta, as Agent,
SunTrust Bank, Atlanta, Wachovia Bank of
Georgia, N.A., Fleet Bank of Maine, First
Union National Bank of Georgia and Fuqua
dated as of June 28, 1996.
10(b) Collective Bargaining Agreement dated
January 31, 1996, between Local 422-S,
Production Service and Sales District
Council, IUC, AFL-CIO, which was assigned
to Lumex Medical Products, Inc. in the
Asset Sale Agreement by and between
Lumex, Inc., Lumex Medical Products,
Inc., MUL Acquisition Corp. II and
Fuqua dated March 13, 1996
11 Statement of Computation of Earnings
Per Share
27 Financial Data Schedules (for SEC use only)
Article 5
</TABLE>
- ------------------------
12
<PAGE> 15
(b) Reports on Form 8-K
A report on Form 8-K dated April 3, 1996 was filed announcing
the consummation of Fuqua's acquisition of the medical
products division of Lumex, Inc., by and between
Lumex, Inc., Lumex Medical Products, Inc., MUL Acquisition
Corp. II and Fuqua.
An amended report on Form 8-K/A dated April 3, 1996 was filed
on June 17, 1996 announcing that Fuqua has been informed by
Ernst & Young, LLP, the independent accountants for Lumex,
Inc., that Fuqua would not receive the audited financial
statements of the business acquired until such time as Lumex,
Inc. and Fuqua have resolved potential purchase price
adjustments as provided for under the terms of the asset sale
agreement. As a result, Fuqua indicated that it will file the
audited financial statements for the medical products
operations of Lumex, Inc. and the related unaudited pro forma
financial statements as soon as the necessary audited
financial statements, independent accountants' report and
related consent are made available to Fuqua.
13
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FUQUA ENTERPRISES, INC.
Registrant
/s/ Brady W. Mullinax, Jr.
------------------------------------------------
Brady W. Mullinax, Jr., Vice President-Finance,
Treasurer and Chief Financial Officer (Principal
Financial and Accounting Officer and Executive
Officer duly authorized to sign on behalf of the
registrant)
Date: August 14, 1996
14
<PAGE> 1
EXHIBIT 10(a)
EXECUTION COUNTERPART
================================================================================
AMENDED AND RESTATED
CREDIT AGREEMENT
dated as of June 28, 1996
among
FUQUA ENTERPRISES, INC.
THE LENDERS LISTED HEREIN,
and
SUNTRUST BANK, ATLANTA
as Agent
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I. DEFINITIONS; CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.02. Accounting Terms and Determination . . . . . . . . . . . . . . . . . . . . . 16
Section 1.03. Other Definitional Terms . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 1.04. Exhibits and Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE II. REVOLVING LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 2.01. Revolving Credit Commitments; Use of Proceeds . . . . . . . . . . . . . . . 17
Section 2.02. Revolving Credit Notes; Repayment of Principal . . . . . . . . . . . . . . . 18
Section 2.03. Voluntary Reduction of Revolving Credit Commitments . . . . . . . . . . . . 18
ARTICLE III. GENERAL LOAN TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 3.01. Funding Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 3.02. Disbursement of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 3.03. Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 3.04. Interest Periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 3.05. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 3.06. Voluntary Prepayments of Borrowings . . . . . . . . . . . . . . . . . . . . 22
Section 3.07. Payments, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 3.08. Interest Rate Not Ascertainable, etc. . . . . . . . . . . . . . . . . . . . 25
Section 3.09. Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 3.10. Increased Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 3.11. Lending Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 3.12. Funding Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 3.13. Assumptions Concerning Funding of Eurodollar Advances . . . . . . . . . . . 28
Section 3.14. Apportionment of Payments . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 3.15. Sharing of Payments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . 28
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C>
Section 3.16. Capital Adequacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 3.17. Notice of Capital Adequacy and Increased Costs
Claims; Limitation on Payment Obligations . . . . . . . . . . . . . 30
ARTICLE IV. CONDITIONS TO BORROWINGS . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 4.01. Conditions Precedent to Initial Revolving Loans . . . . . . . . . . . . . . 30
Section 4.02. Conditions to All Revolving Loans . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE V. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . 33
Section 5.01. Corporate Existence; Compliance with Law . . . . . . . . . . . . . . . . . . 33
Section 5.02. Corporate Power; Authorization . . . . . . . . . . . . . . . . . . . . . . . 34
Section 5.03. Enforceable Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 5.04. No Legal Bar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 5.05. No Material Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 5.06. Investment Company Act, Etc. . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 5.07. Margin Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 5.08. Compliance with Environmental Laws . . . . . . . . . . . . . . . . . . . . . 35
Section 5.09. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 5.10. No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 5.11. No Burdensome Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 5.12. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 5.13. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 5.14. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 5.15. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 5.16. Patents, Trademarks, Licenses, Etc. . . . . . . . . . . . . . . . . . . . . 38
Section 5.17. Ownership of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 5.18. Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 5.19. Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 5.20. Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 5.21. Payment or Dividend Restrictions . . . . . . . . . . . . . . . . . . . . . . 39
Section 5.22. Intercompany Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 5.23. Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE VI. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 6.01. Corporate Existence, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 6.02. Compliance with Laws, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 6.03. Payment of Taxes and Claims, Etc. . . . . . . . . . . . . . . . . . . . . . 40
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C> <C>
Section 6.04. Keeping of Books . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 6.05. Visitation, Inspection, Etc. . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 6.06. Insurance; Maintenance of Properties . . . . . . . . . . . . . . . . . . . . 41
Section 6.07. Reporting Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 6.08. Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 6.09. Notices Under Certain Other Indebtedness . . . . . . . . . . . . . . . . . . 45
ARTICLE VII. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 7.01. Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 7.02. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 7.03. Mergers, Consolidations, Etc. . . . . . . . . . . . . . . . . . . . . . . . 48
Section 7.04. Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 7.05. Investments, Loans, Acquisitions Etc. . . . . . . . . . . . . . . . . . . . 48
Section 7.06. Asset Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 7.07. Sale and Leaseback Transactions . . . . . . . . . . . . . . . . . . . . . . 50
Section 7.08. Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 7.09. Issuance of Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 7.10. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 7.11. Limitation on Payment Restrictions
Affecting Consolidated Companies . . . . . . . . . . . . . . . . . 51
Section 7.12. Actions Under Certain Documents . . . . . . . . . . . . . . . . . . . . . . 51
Section 7.13. Changes in Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE VIII. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 8.01. Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 8.02. Covenants Without Notice . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 8.03. Other Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 8.04. Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 8.05. Non-Payments of Other Indebtedness . . . . . . . . . . . . . . . . . . . . . 52
Section 8.06. Defaults Under Other Agreements;
Change in Control Provisions . . . . . . . . . . . . . . . . . . . 52
Section 8.07. Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 8.08. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 8.09. Money Judgment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 8.10. Ownership of Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 8.11. Change in Control of Borrower . . . . . . . . . . . . . . . . . . . . . . . 54
</TABLE>
iii
<PAGE> 5
<TABLE>
<S> <C> <C>
Section 8.12. Default Under Other Credit Documents . . . . . . . . . . . . . . . . . . . . 54
ARTICLE IX. THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 9.01. Appointment of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 9.02. Authorization of Agent with Respect
to the Security Documents . . . . . . . . . . . . . . . . . . . . . 55
Section 9.03. Nature of Duties of Agent . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 9.04. Lack of Reliance on the Agent . . . . . . . . . . . . . . . . . . . . . . . 56
Section 9.05. Certain Rights of the Agent . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 9.06. Reliance by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 9.07. Indemnification of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 9.08. The Agent in its Individual Capacity . . . . . . . . . . . . . . . . . . . . 57
Section 9.09. Holders of Revolving Credit Notes . . . . . . . . . . . . . . . . . . . . . 58
Section 9.10. Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
ARTICLE X. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 10.01. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 10.02. Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 10.03. No Waiver; Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . 59
Section 10.04. Payment of Expenses, Etc. . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 10.05. Right of Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 10.06. Benefit of Agreement; Assignments
and Participations . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 10.07. Governing Law; Submission to Jurisdiction . . . . . . . . . . . . . . . . 64
Section 10.08. Independent Nature of Lenders' Rights . . . . . . . . . . . . . . . . . . 64
Section 10.09. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Section 10.10. Effectiveness; Survival; Superseding Former Agreement . . . . . . . . . . 64
Section 10.11. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 10.12. Independence of Covenants . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 10.13. Change in Accounting Principles,
Fiscal Year or Tax Laws . . . . . . . . . . . . . . . . . . . . . . 65
Section 10.14. Headings Descriptive; Entire Agreement . . . . . . . . . . . . . . . . . . 66
</TABLE>
iv
<PAGE> 6
SCHEDULES
<TABLE>
<S> <C>
SCHEDULE 1.01 Intercompany Loans
SCHEDULE 5.01 Organization and Ownership of Subsidiaries
SCHEDULE 5.05 Certain Pending and Threatened Litigation
SCHEDULE 5.08(A) Environmental Compliance
SCHEDULE 5.08(B) Environmental Notices
SCHEDULE 5.08(C) Environmental Permits
SCHEDULE 5.11 Burdensome Restrictions
SCHEDULE 5.12 Tax Filings and Payments
SCHEDULE 5.15 Employee Benefit Matters
SCHEDULE 5.16 Patent, Trademark, License, and Other Intellectual
Property Matters
SCHEDULE 5.17 Ownership of Properties
SCHEDULE 5.20 Labor and Employment Matters
SCHEDULE 5.21 Dividend Restrictions
SCHEDULE 6.08 Financial Covenant Calculations Second Quarter 1995
SCHEDULE 7.01 Outstanding Indebtedness
SCHEDULE 7.02 Existing Liens
SCHEDULE 7.05 Existing Investments
SCHEDULE 8.11 Existing Shareholders
EXHIBITS
EXHIBIT A - Form of Revolving Credit Note
EXHIBIT B - Form of Borrowing Certificate
EXHIBIT C - Form of Conversion/Continuation Certificate
EXHIBIT D - Form of Closing Certificate
EXHIBIT E - Form of Opinion of Alston & Bird
EXHIBIT F - Form of Compliance Certificate
EXHIBIT G - Form of Assignment and Acceptance
EXHIBIT H - Form of Note Assignment
EXHIBIT I - Form of Intercompany Note
</TABLE>
v
<PAGE> 7
AMENDED AND RESTATED
CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT made and entered
into as of June 28, 1996, by and among FUQUA ENTERPRISES, INC., a Delaware
corporation, formerly known as Vista Resources, Inc. (the "Borrower"), SUNTRUST
BANK, ATLANTA, formerly known as Trust Company Bank, a banking corporation
organized under the laws of the State of Georgia ("SunTrust"), the other banks
and lending institutions listed on the signature pages hereof, and any
assignees of SunTrust or such other banks and lending institutions which become
"Lenders" as provided herein (SunTrust, and such other banks, lending
institutions, and assignees referred to collectively herein as the "Lenders"),
SUNTRUST BANK, ATLANTA, in its capacity as agent for the Lenders and each
successor agent for such Lenders as may be appointed from time to time pursuant
to Article IX hereof (the "Agent");
W I T N E S S E T H:
WHEREAS, the Borrower, the Agent and certain of the Lenders
are party to that certain Credit Agreement, dated as of November 6, 1995 (as
modified through the date hereof, the "Former Agreement") providing a revolving
credit facility to the Borrower in the amount of $60,000,000;
WHEREAS, the Borrower has requested that the Former Agreement
be amended and restated to increase the amount of the revolving credit
facility, to add certain additional Lenders and make certain other
modifications to the Former Agreement, all as more particularly set forth
below;
WHEREAS, at the request of the Borrower, the Agent and the
Lenders have agreed to provide such increased credit facilities to the
Borrower, on the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, Borrower, the Lenders and the Agent agree,
upon the terms and subject to the conditions set forth herein, as follows:
<PAGE> 8
ARTICLE I.
DEFINITIONS; CONSTRUCTION
SECTION 1.01. DEFINITIONS. In addition to the other terms
defined herein, the following terms used herein shall have the meanings herein
specified (to be equally applicable to both the singular and plural forms of
the terms defined):
"Acquisition" shall mean any transaction, or any series of
related transactions, by which the Borrower and/or any of its Subsidiaries
directly or indirectly (a) acquires any ongoing business or all or
substantially all of the assets of any Person or division or Asset Group
thereof, whether through purchase of assets, merger or otherwise, (b) acquires
(in one transaction or as the most recent transaction in a series of
transactions) control of a majority of the securities of a Person which have
ordinary voting power for the election of directors or (c) otherwise acquires
control of more than 50% ownership interest in any such Person.
"Adjusted LIBO Rate" shall mean, with respect to each Interest
Period for a Eurodollar Advance, the rate obtained by dividing (A) LIBOR for
such Interest Period by (B) a percentage equal to 1 minus the then stated
maximum rate (stated as a decimal) of all reserve requirements (including,
without limitation, any marginal, emergency, supplemental, special or other
reserves) applicable to any Lender (or assignee thereof) which is a member bank
of the Federal Reserve System in respect of Eurocurrency liabilities as defined
in Regulation D (or against any successor category of liabilities as defined in
Regulation D). As of the date of this Agreement, such stated maximum rate is
0.
"Advance" shall mean any principal amount advanced and
remaining outstanding at any time under the Revolving Loans, which Advance
shall be made or outstanding as a Base Rate Advance or Eurodollar Advance, as
the case may be.
"Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by, or under common control with, such
Person, whether through the ownership of voting securities, by contract or
otherwise. For purposes of this definition, "control" (including with
correlative meanings, the terms "controlling", "controlled by", and "under
common control with") as applied to any Person, means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of that Person.
"Agent" shall mean SunTrust Bank, Atlanta a Georgia banking
corporation, and any successor agent appointed pursuant to Article IX hereof.
"Agreement" shall mean this Credit Agreement, either as
originally executed or as hereafter amended, restated, supplemented or
otherwise modified from time to time.
2
<PAGE> 9
"Applicable Commitment Percentage" shall mean, with respect to
any calculation of the Commitment Fee hereunder, (i) through September 30,
1996, fifteen basis points (0.15%) per annum, and (ii) thereafter, the
percentage per annum determined by reference to the following subparagraphs (a)
through (d), whichever is applicable:
<TABLE>
<CAPTION>
If Borrower's Consolidated
Funded Debt to Consolidated The Applicable
EBITDA is: Commitment Percentage is:
--------------------------- -------------------------
<S> <C> <C>
(a) Less than 1.50:1.00 .125%
(b) greater than or equal
to 1.50:1.00 but
less than 2.50:1.00 .15%
(c) greater than or equal to
2.50:1.00 but less than
3.50:1.00 .1875%
(d) greater than or equal
to 3.50:1.00 .25%
</TABLE>
The Applicable Commitment Percentage shall be recalculated as and when the
Applicable Margin is recalculated in the manner set forth in the definition of
the Applicable Margin.
"Applicable Margin" shall mean, (i) with respect to all
Eurodollar Advances outstanding through September 30, 1996, one half of one
percent (0.50%) per annum, (ii) with respect to all Base Rate Advances through
September 30, 1996, zero percent (0%) per annum, and (iii) with respect to all
Advances outstanding thereafter, the relevant percentage indicated below for
Borrower's Consolidated Funded Debt to Consolidated EBITDA ratio, as determined
quarterly for the immediately preceding four fiscal quarters based upon the
financial statements delivered to the Lenders pursuant to Section 6.07(a) or
Section 6.07(b) hereof, as the case may be, with such Applicable Margin to be
effective as of the first day of the second fiscal quarter immediately
following the fiscal quarter for which such financial statements are delivered
(for example, the Applicable Margin effective as of October 1, 1996 will be
calculated based upon the financial statements delivered with respect to, and
the four fiscal quarters ending on, June 30, 1996):
<TABLE>
<CAPTION>
If Borrower's Consolidated The Applicable Margin is:
Funded Debt to Consolidated -------------------------
EBITDA is: Base Rate Eurodollar
--------------------------- --------- ----------
<S> <C> <C> <C>
(a) Less than 1.50:1.00 -.50% .40%
</TABLE>
3
<PAGE> 10
<TABLE>
<S> <C> <C> <C>
(b) greater than or equal
to 1.50:1.00 but
less than 2.50:1.00 0 .50%
(c) greater than or equal to
2.50:1.00 but less than
3.50:1.00 0 .70%
(d) greater than or equal to
3.50:1.00 0 1.00%
</TABLE>
"Asset Group" shall mean any asset or group of assets with
identifiable net income (or loss).
"Asset Sale" shall mean the disposition whether by sale,
transfer, exchange or other disposition of any or all of the assets of Borrower
or any of its Subsidiaries (including the stock of Subsidiaries) in which the
Net Proceeds of such disposition, or related series of such dispositions,
exceeds $100,000, other than (i) sales of inventory in the ordinary course of
business, and (ii) damage, destruction, condemnation, theft or similar loss of
such assets.
"Asset Value" shall mean, with respect to any property or
asset of any Consolidated Company, an amount equal to the net book value of
such property or asset as established in accordance with GAAP.
"Assignment and Acceptance" shall mean an assignment and
acceptance entered into by a Lender and another financial institution in
accordance with the terms of this Agreement and substantially in the form of
Exhibit G.
"Bankruptcy Code" shall mean The Bankruptcy Code of 1978, as
amended and in effect from time to time (11 U.S.C. Section 101 et seq.).
"Base Rate" shall mean (with any change in the Base Rate to be
effective as of the date of change of either of the following rates) the higher
of (i) the rate which the Agent publicly announces from time to time as its
prime lending rate, as in effect from time to time, and (ii) the Federal Funds
Rate, as in effect from time to time, plus one-half of one percent (0.50%) per
annum. The Agent's prime lending rate is a reference rate and does not
necessarily represent the lowest or best rate actually charged to customers;
the Agent may make commercial loans or other loans at rates of interest at,
above or below the Agent's prime lending rate.
"Base Rate Advance" shall mean an Advance made or outstanding
as a Revolving Loan, bearing interest based on the Base Rate.
4
<PAGE> 11
"Borrower" shall mean Fuqua Enterprises, Inc., a Delaware
corporation, its successors and permitted assigns.
"Borrowing" shall mean the incurrence by Borrower of Advances
of one Type concurrently having the same Interest Period or the continuation or
conversion of an existing Borrowing or Borrowings in whole or in part.
"Business Day" shall mean any day excluding Saturday, Sunday
and any other day on which banks are required or authorized to close in
Atlanta, Georgia and, if the applicable Business Day relates to Eurodollar
Advances, any day on which trading is not carried on by and between banks in
deposits of the applicable currency in the applicable interbank Eurocurrency
market.
"Buyer Note" shall mean that certain promissory note to be
issued pursuant to the Stock Purchase Agreement dated as of October 16, 1995 by
and between the Borrower and Atlantic American Corporation in an amount equal
to the amount owing by Borrower pursuant to the Seller Note, to be made by
Atlantic American Corporation in favor of the Borrower and to mature on the
same date as the Seller Note.
"Capital Lease" shall mean, as applied to any Person, any
lease of any property (whether real, personal or mixed) by such Person as
lessee which would, in accordance with GAAP, be required to be classified and
accounted for as a capital lease on a balance sheet of such Person.
"Capital Lease Obligation" shall mean, with respect to any
Capital Lease, the amount of the obligation of the lessee thereunder which
would, in accordance with GAAP, appear on a balance sheet of such lessee in
respect of such Capital Lease.
"Cash Equivalents" shall mean: (i) securities issued,
guaranteed or insured by the United States or any of its agencies with
maturities of not more than one year from the date acquired; (ii) certificates
of deposit with maturities of not more than one year from the dated issued by a
U.S. federal or state chartered commercial bank of recognized standing, which
has a capital an unimpaired surplus in excess of $500,000,000.00 and which bank
or its holding company has a short-term commercial paper rating of at least A-2
or the equivalent by S&P or at least P-2 or the equivalent by Moody's; (iii)
reverse repurchase agreements with terms of not more than seven days from the
date acquired, for securities of the type described in (i) above and entered
into only with commercial banks having the qualifications described in (ii)
above; (iv) commercial paper or finance company paper issued by any Person
incorporated under the laws of the United States of any state thereof and rated
at least A-2 or the equivalent by S&P or at least P-2 or the equivalent by
Moody's, in each case with maturities of not more than one year from the date
acquired; and (v) investments in money market funds registered under the
Investment Company Act of 1940, which have net assets of at least
$500,000,000.00 and at least eighty-five percent (85%) of whose assets consist
of securities and other obligations of the type described in clauses (i)
through (iv) above.
5
<PAGE> 12
"Change in Control Provision" shall mean any term or provision
contained in any indenture, debenture, note, or other agreement or document
evidencing or governing Indebtedness of Borrower evidencing debt or a
commitment to extend loans in excess of $500,000 which requires, or permits the
holder(s) of such Indebtedness of Borrower to require that such Indebtedness of
Borrower be redeemed, repurchased, defeased, prepaid or repaid, either in whole
or in part, or the maturity of such Indebtedness of Borrower to be accelerated
in any respect, as a result of a change in ownership of the capital stock of
Borrower or voting rights with respect thereto.
"Closing Date" shall mean June 28, 1996 or such later date on
which the initial Revolving Loans are made and the conditions set forth in
Section 4.01 and 4.02 are satisfied.
"Commitment Fee" shall have the meaning ascribed to it in
Section 3.05(a).
"Consolidated Companies" shall mean, collectively, Borrower
and all of its Subsidiaries the accounts of which are consolidated with those
of the Borrower in its consolidated financial statements in accordance with
GAAP.
"Consolidated EBIT" shall mean, with reference to any period,
the sum of Consolidated Net Income (Loss) for such period plus, to the extent
deducted in determining Consolidated Net Income (Loss), (i) provision for taxes
based on income made by the Consolidated Companies during such period and (ii)
Consolidated Interest Expense. For the purposes of calculating Consolidated
EBIT, (a) any Person who becomes a Subsidiary on or prior to the date of
determination shall be deemed to have been a Subsidiary for the entire period
for which such calculation is being made; and (b) any Asset Group acquired by
the Borrower or a Subsidiary on or prior to the date of determination shall be
deemed to have been owned during the entire period for which such calculation
is being made; provided that, in the event that the Person or Asset Group to be
included herein pursuant to subsections (a) and (b) for the relevant fiscal
period had not been, prior to its acquisition by a Consolidated Company,
obtaining annual audited financial statements, prepared by a nationally
recognized accounting firm, for a period of at least three years, the EBIT of
such Person or Asset Group shall be included in this definition only if the
Borrower provides the Lenders with evidence of the calculation of the EBIT of
such Person or Asset Group which is acceptable to the Required Lenders in their
reasonable discretion.
"Consolidated EBITDA" shall mean, with reference to any
period, an amount equal to the sum of Consolidated EBIT plus to the extent
deducted in determining Consolidated Net Income (Loss), depreciation and
amortization expense of the Consolidated Companies for such period as
determined in accordance with GAAP. For the purposes of calculating
Consolidated EBITDA, (a) any Person who becomes a Subsidiary on or prior to the
date of determination shall be deemed to have been a Subsidiary for the entire
period for which such calculation is being made; and (b) any Asset Group
acquired by the Borrower or a Subsidiary on or prior to the date of
determination shall be deemed to have been owned during the entire period for
which such calculation is being made; and; provided that, in the event that the
Person or Asset Group to be included herein pursuant to subsections (a) and (b)
for the relevant fiscal period had not been, prior
6
<PAGE> 13
to its acquisition by a Consolidated Company, obtaining annual audited
financial statements, prepared by a nationally recognized accounting firm, for
a period of at least three years, the EBITDA of such Person or Asset Group
shall be included in this definition only if the Borrower provides the Lenders
with evidence of the calculation of the EBITDA of such Person or Asset Group
which is acceptable to the Required Lenders in their reasonable discretion.
"Consolidated Funded Debt" shall mean, as at any date of
determination, the total of all Funded Debt (including the current portions
thereof) of the Consolidated Companies outstanding on such date, determined in
accordance with GAAP on a consolidated basis, after eliminating all
intercompany items; provided, that, for purposes of calculating Consolidated
Funded Debt, the Borrower's obligations pursuant to the Seller Note and any
stand-by letter of credit facility established solely to support such Seller
Note (which letter of credit and accompanying documentation has been approved
in writing by the Required Lenders) shall not be included in Consolidated
Funded Debt unless and until one or more of the following events shall occur:
(x) the Seller Note and any reimbursement obligations pursuant to any letter of
credit facility established in support thereof shall not have been paid in full
or tendered for payment into escrow in accordance with the terms of the
agreements governing the Seller Note, by November 1, 1996, (y) any default
shall occur pursuant to the Buyer Note which default is not cured within any
applicable grace period or waived in writing by the Borrower, or (z) the Agent
and the Required Lenders shall deem, in good faith, that the prospect of
repayment of the Buyer Note in full (or the tender of payment thereof for
placement into escrow) on its scheduled due date has been substantially
impaired; provided that, during any period that Wachovia Bank of Georgia, N.A.
is a party to this Agreement and also has in place the primary credit facility
to Atlantic American Corporation, the Agent and the Required Lenders shall not
be entitled to make such a determination unless an event of default has
occurred pursuant to such credit facility.
"Consolidated Interest Expense" shall mean, with reference to
any period, the total interest expense (not net of interest income) of the
Consolidated Companies for such period (including, without limitation, interest
expense attributable to Capital Leases), determined in accordance with GAAP on
a consolidated basis.
"Consolidated Net Income (Loss)" shall mean, with reference to
any period, the net income (or deficit) of the Consolidated Companies for such
period (taken as a cumulative whole), determined in accordance with GAAP on a
consolidated basis, provided that the following shall be excluded if and to the
extent otherwise included in net income of the Borrower and any of its
Subsidiaries for such period:
(a) the income (or deficit) of any Person accrued prior
to the date it became a Subsidiary or was merged into or consolidated
with the Borrower or a Subsidiary of the Borrower unless, pursuant to
the definition of Consolidated EBITDA, such Person is deemed to be a
Subsidiary of the Borrower for such period;
7
<PAGE> 14
(b) the income (or deficit) of any Asset Group accrued
prior to the date such Asset Group was acquired by the Borrower or a
Subsidiary of the Borrower unless, pursuant to the provisions of the
definition of Consolidated EBITDA, such Asset Group is deemed to have
been owned by the Borrower or a Subsidiary of the Borrower for such
period; and
(c) any aggregate net gain (or aggregate net loss) during
such period arising from the sale, exchange, or other disposition of
assets of the Borrower or any of its Subsidiaries outside of the
ordinary course of business.
"Contractual Obligation" of any Person shall mean any
provision of any security issued by such Person or of any agreement, instrument
or undertaking under which such Person is obligated or by which it or any of
the property owned by it is bound.
"Credit Documents" shall mean, collectively, this Agreement,
the Revolving Credit Notes, the Note Assignment, the Intercompany Loan
Documents and all other instruments, documents, certificates, agreements and
writings executed in connection herewith.
"Credit Parties" shall mean, collectively, each of the
Borrower and any Subsidiary of the Borrower executing an Intercompany Note.
"Default" shall mean any condition or event which, with notice
or lapse of time or both, would constitute an Event of Default.
"Dollar" and "U.S. Dollar" and the sign "$" shall mean lawful
money of the United States of America.
"Environmental Laws" shall mean all federal, state, local and
foreign statutes and codes or regulations, rules or ordinances issued,
promulgated, or approved thereunder, now or hereafter in effect (including,
without limitation, those with respect to asbestos or asbestos containing
material or exposure to asbestos or asbestos containing material), relating to
pollution or protection of the environment and relating to public health and
safety, relating to (a) emissions, discharges, releases or threatened releases
of pollutants, contaminants, chemicals or industrial toxic or hazardous
constituents, substances or wastes, including without limitation, any Hazardous
Substance, petroleum including crude oil or any fraction thereof, any petroleum
product or other waste, chemicals or substances regulated by any Environmental
Law into the environment (including, without limitation, ambient air, surface
water, ground water, land surface or subsurface strata), (b) the manufacture,
processing, distribution, use, generation, treatment, storage, disposal,
transport or handling of any Hazardous Substance, petroleum including crude oil
or any fraction thereof, any petroleum product or other waste, chemicals or
substances regulated by any Environmental Law, or (c) underground storage tanks
and related piping, and emissions, discharges and releases or threatened
releases therefrom, such Environmental Laws to include, without limitation (i)
the Clean Air Act (42 U.S.C. Section 7401 et seq.), (ii) the Clean Water Act
(33 U.S.C. Section 1251 et seq.), (iii) the Resource Conservation and Recovery
Act (42 U.S.C. Section 6901 et seq.), (iv)
8
<PAGE> 15
the Toxic Substances Control Act (15 U.S.C. Section 2601 et seq.), (v) the
Comprehensive Environmental Response Compensation and Liability Act, as amended
by the Superfund Amendments and Reauthorization Act (42 U.S.C. Section 9601 et
seq.), and (vi) all applicable national and local laws or regulations with
respect to environmental control.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended and in effect from time to time.
"ERISA Affiliate" shall mean, with respect to any Person, each
trade or business (whether or not incorporated) which is a member of a group of
which that Person is a member and which is under common control within the
meaning of the regulations promulgated under Section 414(b) or (c) of the Tax
Code (and for purposes of Tax Code Section 412 or 4980B, a member which is
under common control within the meaning of the regulations promulgated under
Section 414(m) or (o) of the Tax Code).
"Eurodollar Advance" shall mean an Advance made or outstanding
as a Revolving Loan, bearing interest based on the Adjusted LIBO Rate.
"Event of Default" shall have the meaning provided in Article
VIII.
"Executive Officer" shall mean with respect to any Person, the
President, Vice Presidents (including Executive Vice Presidents, Senior Vice
Presidents and other designations within that office), Chief Financial
Officer, Treasurer and any Person holding comparable offices or duties.
"Federal Funds Rate" shall mean for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with member banks
of the Federal Reserve System arranged by Federal funds brokers, as published
for such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of Atlanta, or, if such rate is not
so published for any day which is a Business Day, the average of the quotations
for such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent.
"Fee Letter" shall mean that certain engagement letter dated
as of April 25, 1996 by and among Borrower, SunTrust Corporate Finance, Inc.
and SunTrust Bank, Atlanta, as Agent.
"Funded Debt" shall mean, with respect to any Person, all
Indebtedness for money borrowed, Indebtedness evidenced or secured by purchase
money Liens, Capital Leases, conditional sales contracts and similar title
retention debt instruments, (including any current maturities of such
Indebtedness) which by its terms matures more than one year from the date of
creation thereof or which is renewable or extendible at the option of the
obligor to a date beyond one year from the date of determination. The
calculation of Funded Debt shall include (i) all Funded Debt of the
9
<PAGE> 16
Consolidated Companies, plus (ii) all Funded Debt of other Persons to the
extent guaranteed by a Consolidated Company, to the extent supported by a
letter of credit issued for the account of a Consolidated Company, or as to
which and to the extent which a Consolidated Company or its assets otherwise
have become liable for payment thereof, plus (iii) the redemption amount with
respect to the stock of any Consolidated Company required to be redeemed during
the next succeeding twelve months, plus (iv) Indebtedness outstanding pursuant
to the line of credit established by SunTrust for the benefit of the Borrower
as permitted by Section 7.01 hereof.
"Fuqua Family" shall mean, collectively, (a) J.B. Fuqua, (b)
any of his immediate family members consisting of his spouse and his lineal
descendants (whether natural or adopted) and their spouses, and (c) any trusts
established for the sole benefit of, or partnerships or foundations controlled
by, any of the foregoing. As of the Closing Date, the Persons comprising the
Fuqua Family and who beneficially own any Voting Stock of the Borrower are set
forth on Schedule 8.11 attached hereto.
"GAAP" shall mean generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, which are applicable to the circumstances as of the
date of determination.
"Guaranty" shall mean any contractual obligation, contingent
or otherwise, of a Person with respect to any Indebtedness of another Person,
including without limitation, any such Indebtedness, directly or indirectly
guaranteed, endorsed, co-made or discounted or sold with recourse by that
Person, or in respect of which that Person is otherwise directly or indirectly
liable, including contractual obligations (contingent or otherwise) arising
through any agreement to purchase, repurchase, or otherwise acquire such
Indebtedness or any security therefor, or any agreement to provide funds for
the payment or discharge thereof (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise), or to maintain solvency,
assets, level of income, or other financial condition, or to make any payment
other than for value received. The amount of any Guaranty shall be deemed to
be an amount equal to the stated or determinable amount of the primary
obligation in respect of which guaranty is made (subject to any limitations
contained in the terms of such Guaranty) or, if not so stated or determinable,
the maximum reasonably anticipated liability in respect thereof (assuming such
Person is required to perform thereunder) as determined by such Person in good
faith.
"Hazardous Substances" shall have the meaning assigned to that
term in the Comprehensive Environmental Response Compensation and Liability Act
of 1980, as amended by the Superfund Amendments and Reauthorization Acts of
1986.
10
<PAGE> 17
"Intercompany Loan Documents" shall mean, collectively, the
Intercompany Notes and all related loan, subordination, and other agreements
relating in any manner to the Intercompany Loans.
"Intercompany Loans" shall mean, collectively, (i) the loans
more particularly described on Schedule 1.01 and (ii) those loans or other
extensions of credit made by one Consolidated Company to another Consolidated
Company satisfying the terms and conditions set forth in Section 7.01 or as may
otherwise be approved in writing by the Required Lenders.
"Intercompany Note" shall mean a promissory note made by one
of the Consolidated Company to another Consolidated Company substantially in
the form of Exhibit I attached hereto, to evidence an Intercompany Loan.
"Indebtedness" of any Person shall mean, without duplication
(i) all obligations of such Person which in accordance with GAAP would be shown
on the balance sheet of such Person as a liability (including, without
limitation, obligations for borrowed money and for the deferred purchase price
of property or services, and obligations evidenced by bonds, debentures, notes
or other similar instruments); (ii) all Capital Lease Obligations; (iii) all
Guaranties of such Person (including the stated amount of undrawn letters of
credit); (iv) Indebtedness of others secured by any Lien upon property owned by
such Person, whether or not assumed; and (v) obligations or other liabilities
under currency contracts, Interest Rate Contracts, or similar agreements or
combinations thereof. Notwithstanding the foregoing, in determining the
Indebtedness of any Person, there shall be included all obligations of such
Person of the character referred to in clauses (i) through (v) above deemed to
be extinguished under GAAP but for which such Person remains legally liable.
"Interest Coverage Ratio" shall mean, as of any date of
determination, the ratio of (i) Consolidated EBIT to (ii) Consolidated Interest
Expense, in each case, calculated for the immediately preceding four fiscal
quarters of the Consolidated Companies.
"Interest Period" shall mean as to any Eurodollar Advances,
the interest period selected by the Borrower pursuant to Section 3.04(a)
hereof.
"Interest Rate Contract" shall mean all interest rate swap
agreements, interest rate cap agreements, interest rate collar agreements,
interest rate insurance and other agreements and arrangements designed to
provide protection against fluctuations in interest rates, in each case as the
same may be from time to time amended, restated, renewed, supplemented or
otherwise modified.
"Investment" shall mean, when used with respect to any Person,
any direct or indirect advance, loan or other extension of credit (other than
the creation of receivables in the ordinary course of business) or capital
contribution by such Person (by means of transfers of property to others or
payments for property or services for the account or use of others, or
otherwise) to any Person, or any direct or indirect purchase or other
acquisition by such Person of, or of a beneficial
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interest in, capital stock, partnership interests, bonds, notes, debentures or
other securities issued by any other Person other than an Acquisition.
"Investment Grade" shall mean, instruments rated at least Baa3
or the equivalent by Moody's and at least BBB- or the equivalent by S&P.
"Lender" or "Lenders" shall mean SunTrust, the other banks and
lending institutions listed on the signature pages hereof, and each assignee
thereof, if any, pursuant to Section 10.06(c).
"Lending Office" shall mean for each Lender, the office such
Lender may designate in writing from time to time to Borrower and the Agent
with respect to each Type of Revolving Loan.
"LIBOR" shall mean, for any Interest Period, with respect to
Eurodollar Advances the offered rate for deposits in U.S. Dollars, for a period
comparable to the Interest Period and in an amount comparable to the Agent's
portion of such Advances, appearing on the Reuters Screen LIBO Page as of 11:00
A.M. (London, England time) on the day that is two London Business Days prior
to the first day of the Interest Period. If two or more of such rates appear
on the Reuters Screen LIBO Page, the rate for that Interest Period shall be the
arithmetic mean of such rates. If the foregoing rate is unavailable from the
Reuters Screen for any reason, then such rate shall be determined by the Agent
from Telerate Page 3750 or, if such rate is also unavailable on such service,
then on any other interest rate reporting service of recognized standing
designated in writing by the Agent to Borrower and the other Lenders; in any
such case rounded, if necessary, to the next higher 1/16 of 1.0%, if the rate
is not such a multiple.
"Lien" shall mean any mortgage, pledge, security interest,
lien, charge, hypothecation, assignment, deposit arrangement, title retention,
preferential property right, trust or other arrangement having the practical
effect of the foregoing and shall include the interest of a vendor or lessor
under any conditional sale agreement, capitalized lease or other title
retention agreement.
"Margin Regulations" shall mean Regulation G, Regulation T,
Regulation U and Regulation X of the Board of Governors of the Federal Reserve
System, as the same may be in effect from time to time.
"Materially Adverse Effect" shall mean any materially adverse
change in (i) the business, results of operations, financial condition, assets
or prospects of the Consolidated Companies, taken as a whole, (ii) the ability
of Borrower to perform its obligations under this Agreement, or (iii) the
enforceability of the Credit Documents.
"Maturity Date" shall mean the earlier of (i) June 28, 1999,
and (ii) the date on which all amounts outstanding under this Agreement have
been declared or have automatically become due and payable pursuant to the
provisions of Article VIII.
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"Moody's" shall mean Moody's Investors Services, Inc. and each
of its successors.
"Multiemployer Plan" shall have the meaning set forth in
Section 4001(a)(3) of ERISA.
"Net Proceeds" shall mean, with respect to any Asset Sale, (i)
all cash, including cash receivables (when so received) by way of deferred
payment pursuant to a promissory note, a receivable or otherwise (other than
interest payable thereon) received by any Consolidated Company as a result of
or in connection with such transaction and (ii) all cash proceeds of any sale
or other liquidation of any non-cash proceeds received as consideration of any
Asset Sale (when so received), in each case, net of reasonable sale expenses,
fees and commissions incurred, and any income taxes reasonably estimated in
good faith by the Borrower and its accountants to be payable by any
Consolidated Company in connection with such Asset Sale and other taxes thereon
to the extent such other taxes are actually paid by any Consolidated Company,
and net of any payment required to be made with respect to the outstanding
principal amount of, premium or penalty, if any, and interest on any
Indebtedness (other than the Revolving Loans) secured by a Lien (to the extent
permitted by Section 7.02) upon the asset sold in such Asset Sale.
"Note Assignment" shall mean that certain note assignment
originally executed by the Borrower, substantially in the form of Exhibit H
attached hereto, as from time to time executed by other Consolidated Companies
by joinder, whereby the Consolidated Companies party thereto assign to the
Agent, for the benefit of the Lenders, all of the right, title and interest in
and to the Intercompany Loan Documents, as security for the Obligations.
"Notice of Borrowing" shall have the meaning provided in
Section 3.01(a).
"Notice of Conversion/Continuation" shall have the meaning
provided in Section 3.01(b).
"Obligations" shall mean all amounts owing to the Agent or any
Lender pursuant to the terms of this Agreement or any other Credit Document,
including, without limitation, all Revolving Loans (including all principal and
interest payments due thereunder), fees, expenses, indemnification and
reimbursement payments, indebtedness, liabilities, and obligations of the
Credit Parties, direct or indirect, absolute or contingent, liquidated or
unliquidated, now existing or hereafter arising, together with all renewals,
extensions, modifications or refinancings thereof.
"Payment Office" shall mean with respect to payments of
principal, interest, fees or other amounts relating to the Revolving Loans and
all other Obligations, the office specified as the "Payment Office" for the
Agent on the signature page of the Agent, or such other location as to which
the Agent shall have given written notice to the Borrower.
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"PBGC" shall mean the Pension Benefit Guaranty Corporation, or
any successor thereto.
"Permitted Liens" shall mean those Liens expressly permitted
by Section 7.02.
"Person" shall mean any individual, partnership, firm,
corporation, association, joint venture, trust or other entity, or any
government or political subdivision or agency, department or instrumentality
thereof.
"Plan" shall mean any "employee benefit plan" (as defined in
Section 3(3) of ERISA), including, but not limited to, any defined benefit
pension plan, profit sharing plan, money purchase pension plan, savings or
thrift plan, stock bonus plan, employee stock ownership plan, Multiemployer
Plan, or any plan, fund, program, arrangement or practice providing for medical
(including post-retirement medical), hospitalization, accident, sickness,
disability, or life insurance benefits.
"Pro Rata Share" shall mean, with respect to each of the
Revolving Credit Commitments of each Lender, each Revolving Loan to be made by,
and each payment (including, without limitation, any payment of principal,
interest or fees) to be made to each Lender, the percentage designated as such
Lender's Pro Rata Share of such Revolving Credit Commitments, such Revolving
Loans or such payments, as applicable, set forth under the name of such Lender
on the respective signature page for such Lender, in each case as such Pro Rata
Share may change from time to time as a result of assignments or amendments
made pursuant to this Agreement.
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System, as the same may be in effect from time
to time.
"Required Lenders" shall mean at any time, the Lenders holding
at least 66 2/3% of the amount of committed funds under the Revolving Credit
Commitments, whether or not advanced or, following the termination of all of
the Revolving Credit Commitments, the Lenders holding at least 66 2/3% of the
aggregate outstanding Advances at such time.
"Requirement of Law" for any Person shall mean the articles or
certificate of incorporation and bylaws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation, or
determination of an arbitrator or a court or other governmental authority, in
each case applicable to or binding upon such Person or any of its property or
to which such Person or any of its property is subject.
"Restricted Payments" shall mean, with respect to any Person,
(a) any dividend or other distribution, direct or indirect, on account of any
shares of any class of capital stock of such Person now or hereafter
outstanding, except a dividend payable solely in shares of that class of stock
or in any junior class of stock to the holders of that class, (b) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of
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any class of capital stock of such Person now or hereafter outstanding, (c) any
payment or prepayment of principal of, premium, if any, or interest, fees or
other charges on or with respect to, and any redemption, purchase, retirement,
defeasance, sinking fund or similar payment and any claim for rescission with
respect to, any Subordinated Debt, and (d) any payment made to redeem,
purchase, repurchase or retire, or to obtain the surrender of, any outstanding
warrants, options or other securities of such Person now or hereafter
outstanding.
"Reuters Screen" shall mean, when used in connection with any
designated page and LIBOR, the display page so designated on the Reuter Monitor
Money Rates Service (or such other page as may replace that page on that
service for the purpose of displaying rates comparable to LIBOR).
"Revolving Credit Notes" shall mean, collectively, the
promissory notes evidencing the Revolving Loans in the form attached hereto as
Exhibit A, either as originally executed or as hereafter amended, modified or
supplemented.
"Revolving Loans" shall mean, collectively, the revolving
loans made to the Borrower by the Lenders pursuant to Section 2.01.
"Revolving Credit Commitment" shall mean, at any time for any
Lender, the amount of such commitment set forth opposite such Lender's name on
the signature pages hereof, as the same may be increased or decreased from time
to time as a result of any reduction thereof pursuant to Sections 2.03 or 2.11
any assignment thereof pursuant to Section 10.06(c), or any amendment thereof
pursuant to Section 10.02.
"Security Documents" shall mean, collectively, the Note
Assignment and each other guaranty agreement, mortgage, deed of trust, security
agreement, pledge agreement, or other security or collateral document
guaranteeing or securing the Obligations, now or hereafter executed, as the
same may be amended, restated, supplemented or otherwise modified from time to
time.
"Seller Note" shall mean that certain promissory note, dated
as of October 11, 1991, made by the Borrower in favor of InterRedec Southern
Company, Inc. in the original principal amount of $8,000,000, as increased to
approximately $11,200,000 pursuant to the terms thereof (without giving effect
to any set-off rights thereunder), due on October 11, 1996.
"S&P" shall mean Standard & Poor's Ratings Group, a division
of McGraw-Hill, Inc. and its successors.
"Subordinated Debt" shall mean all Indebtedness of Borrower
subordinated to all obligations of Borrower or any other Credit Party arising
under this Agreement, the Revolving Credit Notes, and the Note Assignment,
created, incurred or assumed on terms and conditions satisfactory in all
respects to the Agent and the Required Lenders, including without limitation,
with
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respect to interest rates, payment terms, maturities, amortization schedules,
covenants, defaults, remedies, and subordination provisions, as evidenced by
the written approval of the Agent and Required Lenders.
"Subsidiary" shall mean, with respect to any Person, any
corporation or other entity (including, without limitation, partnerships, joint
ventures, and associations) regardless of its jurisdiction of organization or
formation, at least a majority of the total combined voting power of all
classes of voting stock or other ownership interests of which shall, at the
time as of which any determination is being made, be owned by such Person,
either directly or indirectly through one or more other Subsidiaries.
"Tax Code" shall mean the Internal Revenue Code of 1986, as
amended and in effect from time to time.
"Taxes" shall mean any present or future taxes, levies,
imposts, duties, fees, assessments, deductions, withholdings or other charges
of whatever nature, including without limitation, income, receipts, excise,
property, sales, transfer, license, payroll, withholding, social security and
franchise taxes now or hereafter imposed or levied by the United States, or any
state, local or foreign government or by any department, agency or other
political subdivision or taxing authority thereof or therein and all interest,
penalties, additions to tax and similar liabilities with respect thereto.
"Telerate" shall mean, when used in connection with any
designated page and LIBOR, the display page so designated on the Dow Jones
Telerate Service (or such other page as may replace that page on that service
for the purpose of displaying rates comparable to LIBOR).
"Total Assets" shall mean, as of any date of determination,
the total assets of the Consolidated Companies as determined in accordance with
GAAP.
"Total Capitalization" shall mean, as of any date of
determination, the sum of (i) Consolidated Funded Debt plus (ii) shareholder's
equity of the Borrower as determined in accordance with GAAP after subtraction
of all treasury stock.
"Type" of Borrowing shall mean a Borrowing consisting of Base
Rate Advances or Eurodollar Advances.
"Voting Stock" shall mean securities of any class or classes,
the holders of which are entitled to elect all of the corporate directors (or
Persons performing similar functions).
SECTION 1.02. ACCOUNTING TERMS AND DETERMINATION. Unless
otherwise defined or specified herein, all accounting terms shall be construed
herein, all accounting determinations hereunder shall be made, all financial
statements required to be delivered hereunder shall be prepared, and all
financial records shall be maintained in accordance with, GAAP.
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SECTION 1.03. OTHER DEFINITIONAL TERMS. The words "hereof",
"herein" and "hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement, and Article, Section, Schedule, Exhibit and like
references are to this Agreement unless otherwise specified.
SECTION 1.04. EXHIBITS AND SCHEDULES. All Exhibits and
Schedules attached hereto are by reference made a part hereof.
ARTICLE II.
REVOLVING LOANS
SECTION 2.01. REVOLVING CREDIT COMMITMENTS; USE OF PROCEEDS.
(a) Subject to and upon the terms and conditions herein
set forth, each Lender severally agrees to make to Borrower from time to time
on and after the Closing Date, but prior to the Maturity Date, Revolving Loans
in an aggregate amount outstanding at any time not to exceed such Lender's
Revolving Credit Commitment. Borrower shall be entitled to repay and reborrow
Revolving Loans in accordance with the provisions hereof.
(b) Each Revolving Loan shall, at the option of Borrower,
be made or continued as, or converted into, part of one or more Borrowings that
shall consist entirely of Base Rate Advances or Eurodollar Advances. The
aggregate principal amount of each Borrowing of Revolving Loans comprised of
Eurodollar Advances shall be not less than $1,500,000 or a greater integral
multiple of $250,000, and the aggregate principal amount of each Borrowing of
Revolving Loans comprised of Base Rate Advances shall be not less than $300,000
or a greater integral multiple of $50,000. At no time shall the number of
Borrowings outstanding hereunder exceed six; provided that, for the purpose of
determining the number of Borrowings outstanding and the minimum amount for
Borrowings resulting from conversions or continuations, all Borrowings of Base
Rate Advances shall be considered as one Borrowing.
(c) The proceeds of Revolving Loans shall be used solely
for the following purposes:
(i) All amounts outstanding under the Former Agreement
shall be deemed to have been made hereunder as the initial Revolving
Loans on the Closing Date and shall be reallocated amongst the Lenders
party hereto on such date in accordance with each Lender's Pro Rate
Share; and
(ii) All other amounts shall be used by the Borrower as
working capital, to finance acquisitions permitted hereunder, for
other general corporate purposes of
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the Borrower and to make Intercompany Loans to its Subsidiaries for
use by such Subsidiaries as working capital, to finance acquisitions
permitted hereunder, to make other Intercompany Loans as provided
herein, and for other general corporate purposes of such Subsidiaries.
SECTION 2.02. REVOLVING CREDIT NOTES; REPAYMENT OF PRINCIPAL.
(a) The Borrower's obligations to pay the principal of,
and interest on, the Revolving Loans to each Lender shall be evidenced by the
records of the Agent and such Lender and by the Revolving Credit Note payable
to such Lender (or the assignor of such Lender) completed in conformity with
this Agreement.
(b) All Borrowings outstanding under the Revolving
Credit Commitments shall be due and payable in full on the Maturity Date.
SECTION 2.03. VOLUNTARY REDUCTION OF REVOLVING CREDIT
COMMITMENTS. Upon at least three (3) Business Days' prior telephonic notice
(promptly confirmed in writing) to the Agent, Borrower shall have the right,
without premium or penalty, to terminate the unutilized Revolving Credit
Commitments, in part or in whole, provided that (i) any such termination shall
apply to proportionately and permanently reduce the Revolving Credit
Commitments of each of the Lenders, and (ii) any partial termination pursuant
to this Section 2.03 shall be in an amount of at least $1,000,000 and integral
multiples of $1,000,000.
ARTICLE III.
GENERAL LOAN TERMS
SECTION 3.01. FUNDING NOTICES.
(a) Whenever Borrower desires to make a Borrowing with
respect to the Revolving Credit Commitments (other than one resulting from a
conversion or continuation pursuant to Section 3.01(b)), it shall give the
Agent prior written notice (or telephonic notice promptly confirmed in writing)
of such Borrowing substantially in the form of Exhibit B, with appropriate
insertions (a "Notice of Borrowing"), such Notice of Borrowing to be given at
its Payment Office (x) prior to 11:00 A.M. (local time for the Agent) on the
Business Day which is the requested date of such Borrowing in the case of Base
Rate Advances, and (y) prior to 12:00 noon (local time for the Agent) three
Business Days prior to the requested date of such Borrowing in the case of
Eurodollar Advances. Notices received after 12:00 noon shall be deemed
received on the next Business Day. Each Notice of Borrowing shall be
irrevocable and shall specify the aggregate principal amount of the Borrowing,
the date of Borrowing (which shall be a Business Day), and whether the
Borrowing is to consist of Base Rate Advances or Eurodollar Advances and (in
the case of Eurodollar Advances) the Interest Period to be applicable thereto.
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(b) Whenever Borrower desires to convert all or a portion
of an outstanding Borrowing under the Revolving Credit Commitments consisting
of Base Rate Advances into a Borrowing consisting of Eurodollar Advances, or to
continue outstanding a Borrowing consisting of Eurodollar Advances for a new
Interest Period, it shall give the Agent at least three Business Days' prior
written notice (or telephonic notice promptly confirmed in writing) of each
such Borrowing to be converted into or continued as Eurodollar Advances. Such
notice, substantially in the form of Exhibit C attached hereto, with
appropriate insertions (a "Notice of Conversion/Continuation"), shall be given
prior to 12:00 noon (local time for the Agent) on the date specified at the
Payment Office of the Agent. Each such Notice of Conversion/Continuation shall
be irrevocable and shall specify the aggregate principal amount of the Advances
to be converted or continued, the date of such conversion or continuation and
the Interest Period to be applicable thereto. If, upon the expiration of any
Interest Period in respect of any Borrowing consisting of Eurodollar Advances,
Borrower shall have failed to deliver the Notice of Conversion/Continuation,
Borrower shall be deemed to have elected to convert or continue such Borrowing
to a Borrowing consisting of Base Rate Advances. So long as any Executive
Officer of Borrower has knowledge that any Default or Event of Default shall
have occurred and be continuing, no Borrowing may be converted into or
continued as (upon expiration of the current Interest Period) Eurodollar
Advances unless the Agent and each of the Lenders shall have otherwise
consented in writing. No conversion of any Borrowing of Eurodollar Advances
shall be permitted except on the last day of the Interest Period in respect
thereof.
(c) Without in any way limiting Borrower's obligation to
confirm in writing any telephonic notice, the Agent may act without liability
upon the basis of telephonic notice believed by the Agent in good faith to be
from Borrower prior to receipt of written confirmation. In each such case,
Borrower hereby waives the right to dispute the Agent's record of the terms of
such telephonic notice.
(d) The Agent shall promptly (and in any event by the
same time on the next succeeding Business Day as such notice is received) give
each Lender notice by telephone (confirmed in writing) or by telex, telecopy or
facsimile transmission of the matters covered by the notices given to the Agent
pursuant to this Section 3.01 with respect to the Revolving Credit Commitments.
SECTION 3.02. DISBURSEMENT OF FUNDS.
(a) No later than 11:00 a.m. (local time for the Agent)
in the case of a Borrowing consisting of Eurodollar Advances and no later than
12:00 Noon (local time for the Agent) in the case of a Borrowing consisting of
Base Rate Advances on the date of each Borrowing pursuant to the Revolving
Credit Commitments (other than one resulting from a conversion or continuation
pursuant to Section 3.01(b)), each Lender will make available its Pro Rata
Share of the amount of such Borrowing in immediately available funds at the
Payment Office of the Agent. The Agent will make available to Borrower the
aggregate of the amounts (if any) so made available by the Lenders to the Agent
in a timely manner by crediting such amounts to Borrower's demand deposit
account
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maintained with the Agent or at Borrower's option, by effecting a wire transfer
of such amounts to Borrower's account specified by the Borrower, by the close
of business on such Business Day. In the event that the Lenders do not make
such amounts available to the Agent by the time prescribed above, but such
amount is received later that day, such amount may be credited to Borrower in
the manner described in the preceding sentence on the next Business Day (with
interest on such amount to begin accruing hereunder on such next Business Day).
(b) Unless the Agent shall have been notified by any
Lender prior to the date of a Borrowing that such Lender does not intend to
make available to the Agent such Lender's portion of the Borrowing to be made
on such date, the Agent may assume that such Lender has made such amount
available to the Agent on such date and the Agent may make available to
Borrower a corresponding amount. If such corresponding amount is not in fact
made available to the Agent by such Lender on the date of Borrowing, the Agent
shall be entitled to recover such corresponding amount on demand from such
Lender together with interest at the Federal Funds Rate. If such Lender does
not pay such corresponding amount forthwith upon the Agent's demand therefor,
the Agent shall promptly notify Borrower, and Borrower shall immediately pay
such corresponding amount to the Agent together with interest at the rate
specified for the Borrowing which includes such amount paid and any amounts due
under Section 3.12 hereof. Nothing in this subsection shall be deemed to
relieve any Lender from its obligation to fund its Revolving Credit Commitments
hereunder or to prejudice any rights which Borrower may have against any Lender
as a result of any default by such Lender hereunder.
(c) All Borrowings under the Revolving Credit Commitments
shall be loaned by the Lenders on the basis of their Pro Rata Share of the
Revolving Credit Commitments. No Lender shall be responsible for any default
by any other Lender in its obligations hereunder, and each Lender shall be
obligated to make the Revolving Loans provided to be made by it hereunder,
regardless of the failure of any other Lender to fund its Revolving Credit
Commitment hereunder.
SECTION 3.03. INTEREST.
(a) Borrower agrees to pay interest in respect of all
unpaid principal amounts of the Revolving Loans from the respective dates such
principal amounts were advanced to maturity (whether by acceleration, notice of
prepayment or otherwise) at rates per annum equal to the applicable rates
indicated below:
(i) For Base Rate Advances--The Base Rate in effect from
time to time plus (or minus) the Applicable Margin; and
(ii) For Eurodollar Advances--The relevant Adjusted LIBO
Rate plus the Applicable Margin.
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(b) Overdue principal and, to the extent not prohibited
by applicable law, overdue interest, in respect of the Revolving Loans, and all
other overdue amounts owing hereunder, shall bear interest from each date that
such amounts are overdue:
(i) in the case of overdue principal and interest with
respect to all Revolving Loans outstanding as Eurodollar Advances, at
the greater of (A) the rate otherwise applicable for the then-current
Interest Period plus an additional two percent (2.0%) per annum or (B)
the rate in effect for Base Rate Advances plus an additional two
percent (2.0%) per annum; and
(ii) in the case of overdue principal and interest with
respect to all other Revolving Loans outstanding as Base Rate
Advances, and all other Obligations hereunder (other than Revolving
Loans), at a rate equal to the applicable Base Rate plus an additional
two percent (2.0%) per annum.
(c) Interest on each Revolving Loan shall accrue from and
including the date of such Revolving Loan to but excluding the date of any
repayment thereof; provided that, if a Revolving Loan is repaid on the same day
made, one day's interest shall be paid on such Revolving Loan. Interest on all
outstanding Base Rate Advances shall be payable quarterly in arrears on the
last day of each calendar quarter, commencing on September 30, 1996. Interest
on all outstanding Eurodollar Advances shall be payable on the last day of each
Interest Period applicable thereto, and, in the case of Eurodollar Advances
having an Interest Period in excess of three months, on each three month
anniversary of the initial date of such Interest Period. Interest on all
Revolving Loans shall be payable on any conversion of any Advances comprising
such Revolving Loans into Advances of another Type, prepayment (on the amount
prepaid), at maturity (whether by acceleration, notice of prepayment or
otherwise) and, after maturity, on demand.
(d) The Agent, upon determining the Adjusted LIBO Rate
for any Interest Period, shall promptly notify by telephone (confirmed in
writing) or in writing Borrower and the other Lenders. Any such determination
shall, absent manifest error, be final, conclusive and binding for all
purposes.
SECTION 3.04. INTEREST PERIODS.
(a) In connection with the making or continuation of, or
conversion into, each Borrowing of Eurodollar Advances, Borrower shall select
an Interest Period to be applicable to such Eurodollar Advances, which Interest
Period shall be either a 1, 2, 3 or 6 month period.
(b) Notwithstanding paragraph (a) of this Section 3.04:
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(i) The initial Interest Period for any Borrowing of
Eurodollar Advances shall commence on the date of such Borrowing
(including the date of any conversion from a Borrowing consisting of
Base Rate Advances) and each Interest Period occurring thereafter in
respect of such Borrowing shall commence on the day on which the next
preceding Interest Period expires;
(ii) If any Interest Period would otherwise expire on a
day which is not a Business Day, such Interest Period shall expire on
the next succeeding Business Day, provided that if any Interest Period
in respect of Eurodollar Advances would otherwise expire on a day that
is not a Business Day but is a day of the month after which no further
Business Day occurs in such month, such Interest Period shall expire
on the next preceding Business Day;
(iii) Any Interest Period in respect of Eurodollar Advances
which begins on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period shall,
subject to part (iv) below, expire on the last Business Day of such
calendar month; and
(iv) No Interest Period with respect to the Revolving
Loans shall extend beyond the Maturity Date.
SECTION 3.05. FEES.
(a) Borrower shall pay to the Agent, for the ratable
benefit of each Lender based upon its respective Pro Rata Share, a commitment
fee (the "Commitment Fee") for the period commencing on the Closing Date and
ending on the Maturity Date, payable quarterly in arrears on the last day of
each calendar quarter, commencing on September 30, 1996, and on the Maturity
Date, equal to the Applicable Commitment Percentage multiplied by the average
daily unused portion of the Revolving Credit Commitments.
(b) Borrower shall pay to the Agent and its Affiliates such
structuring and syndication fees and annual administrative fees in the
respective amounts and on the dates set forth in the Fee Letter.
SECTION 3.06. VOLUNTARY PREPAYMENTS OF BORROWINGS.
(a) Borrower may, at its option, prepay Borrowings
consisting of Base Rate Advances at any time in whole, or from time to time in
part, in amounts aggregating $500,000 or any greater integral multiple of
$50,000, by paying the principal amount to be prepaid together with interest
accrued and unpaid thereon to the date of prepayment. Borrowings consisting of
Eurodollar Advances may be prepaid, at Borrower's option, in whole, or from
time to time in part, in amounts aggregating $1,500,000 or any greater integral
multiple of $250,000, by paying the principal amount to be prepaid, together
with
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interest accrued and unpaid thereon to the date of prepayment, and all
compensation payments pursuant to Section 3.12 if such prepayment is made on a
date other than the last day of an Interest Period applicable thereto. Each
such optional prepayment shall be applied in accordance with Section 3.06(c)
below.
(b) Borrower shall give written notice (or telephonic
notice confirmed in writing) to the Agent of any intended prepayment of the
Revolving Loans (i) by 11:00 A.M. (local time for the Agent) on the Business
Day of any prepayment of Base Rate Advances and (ii) not less than three
Business Days prior to any prepayment of Eurodollar Advances. Such notice,
once given, shall be irrevocable. Upon receipt of such notice of prepayment
pursuant to the first sentence of this paragraph (b), the Agent shall promptly
(and in any event by the same time on the next succeeding Business Day as such
notice is received) notify each Lender of the contents of such notice and of
such Lender's Pro Rata Share of such prepayment.
(c) Borrower, when providing notice of prepayment
pursuant to Section 3.06(b), may designate the Types of Advances and the
specific Borrowing or Borrowings which are to be prepaid, provided that (i) if
any prepayment of Eurodollar Advances made pursuant to a single Borrowing of
the Revolving Loans shall reduce the outstanding Advances made pursuant to such
Borrowing to an amount less than $1,500,000, such Borrowing shall immediately
be converted into Base Rate Advances; and (ii) each prepayment made pursuant to
a single Borrowing shall be applied pro rata among the Revolving Loans
comprising such Borrowing. In the absence of a designation by Borrower, the
Agent shall, subject to the foregoing, make such designation in its discretion
but using reasonable efforts to avoid funding losses to the Lenders pursuant to
Section 3.12 subject to the last sentence of Section 3.15. All voluntary
prepayments shall be applied to the payment of interest before application to
principal.
SECTION 3.07. PAYMENTS, ETC.
(a) Except as otherwise specifically provided herein, all
payments under this Agreement and the other Credit Documents, shall be made
without defense, set-off or counterclaim to the Agent not later than 12:00 noon
(local time for the Agent) on the date when due and shall be made in Dollars in
immediately available funds at its Payment Office.
(b) (i) All such payments shall be made free and clear of
and without deduction or withholding for any Taxes in respect of this
Agreement, the Revolving Credit Notes or other Credit Documents, or any
payments of principal, interest, fees or other amounts payable hereunder or
thereunder (but excluding, except as provided in paragraph (iii) hereof, any
Taxes (x) on the overall net income of the Agent or the Lenders or (y) any
Taxes in the form of franchise taxes, in each case, imposed pursuant to the
laws of the jurisdiction in which the principal executive office or appropriate
Lending Office of such
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Lender or the Agent is located). If any Taxes are so levied or imposed,
Borrower agrees (A) to pay the full amount of such Taxes, and such additional
amounts as may be necessary so that every net payment of all amounts due
hereunder and under the Revolving Credit Notes and other Credit Documents,
after withholding or deduction for or on account of any such Taxes (including
additional sums payable under this Section 3.07), will not be less than the
full amount provided for herein had no such deduction or withholding been
required, (B) to make such withholding or deduction and (C) to pay the full
amount deducted to the relevant authority in accordance with applicable law.
Borrower will furnish to the Agent and each Lender, within 30 days after the
date the payment of any Taxes is due pursuant to applicable law, certified
copies of tax receipts evidencing such payment by Borrower. Borrower will
indemnify and hold harmless the Agent and each Lender and reimburse the Agent
and each Lender upon written request for the amount of any Taxes so levied or
imposed and paid by the Agent or Lender and any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto, whether or
not such Taxes were correctly or illegally asserted; provided that, the
Borrower shall not be required to indemnify any Lender or the Agent for any Tax
applicable to such Lender or the Agent on the Closing Date. A certificate as
to the amount of such payment by such Lender or the Agent shall constitute
prima facie evidence of the matters contained therein.
(ii) Each Lender that is organized under the laws of any
jurisdiction other than the United States of America or any State thereof
(including the District of Columbia) agrees to furnish to Borrower and the
Agent, prior to the time it becomes a Lender hereunder, two copies of either
U.S. Internal Revenue Service Form 4224 or U.S. Internal Revenue Service Form
1001 or any successor forms thereto (wherein such Lender claims entitlement to
complete exemption from or reduced rate of U.S. Federal withholding tax on
interest paid by Borrower hereunder) and to provide to Borrower and the Agent a
new Form 4224 or Form 1001 or any successor forms thereto if any previously
delivered form is found to be incomplete or incorrect in any material respect
or upon the obsolescence of any previously delivered form; provided, however,
that no Lender shall be required to furnish a form under this paragraph (ii)
after the date that it becomes a Lender hereunder if it is not entitled to
claim an exemption from or a reduced rate of withholding under applicable law.
(iii) Borrower shall also reimburse the Agent and each
Lender, upon written request, for any Taxes imposed (including, without
limitation, Taxes imposed on the overall net income of the Agent or Lender or
its applicable Lending Office pursuant to the laws of the jurisdiction in which
the principal executive office or the applicable Lending Office of the Agent or
Lender is located) as the Agent or Lender shall determine are payable by the
Agent or Lender in respect of amounts paid by or on behalf of Borrower to or on
behalf of the Agent or Lender pursuant to paragraph (i) hereof.
(c) Subject to Section 3.04(ii), whenever any payment to
be made hereunder or under any Revolving Credit Note shall be stated to be due
on a day which is not a Business Day, the due date thereof shall be extended to
the next succeeding Business Day
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and, with respect to payments of principal, interest thereon shall be payable
at the applicable rate during such extension.
(d) All computations of interest and fees shall be made
on the basis of a year of 360 days for the actual number of days (including the
first day but excluding the last day) occurring in the period for which such
interest or fees are payable (to the extent computed on the basis of days
elapsed). Interest on Base Rate Advances shall be calculated based on the Base
Rate from and including the date of such Revolving Loan to but excluding the
date of the repayment or conversion thereof. Interest on Eurodollar Advances
shall be calculated as to each Interest Period from and including the first day
thereof to but excluding the last day thereof. Each determination by the Agent
of an interest rate or fee hereunder shall be made in good faith and shall
constitute prima facie evidence of the matters contained therein.
(e) Payment by the Borrower to the Agent in accordance
with the terms of this Agreement shall, as to the Borrower, constitute payment
to the Lenders under this Agreement.
SECTION 3.08. INTEREST RATE NOT ASCERTAINABLE, ETC. In the
event that the Agent shall have determined (which determination shall be made
in good faith and, absent manifest error, shall be final, conclusive and
binding upon all parties) that on any date for determining the Adjusted LIBO
Rate for any Interest Period, by reason of any changes arising after the date
of this Agreement affecting the London interbank market, or the Agent's
position in such market, adequate and fair means do not exist for ascertaining
the applicable interest rate on the basis provided for in the definition of
Adjusted LIBO Rate, then, and in any such event, the Agent shall forthwith give
notice (by telephone confirmed in writing) to Borrower and to the Lenders, of
such determination and a summary of the basis for such determination. Until
the Agent notifies Borrower that the circumstances giving rise to the
suspension described herein no longer exist (which notice Agent agrees to give
to the Borrower upon Agent obtaining knowledge that such circumstances have
ceased to exist), the obligations of the Lenders to make or permit portions of
the Revolving Loans to remain outstanding past the last day of the then current
Interest Periods as Eurodollar Advances shall be suspended, and such affected
Advances shall bear the same interest as Base Rate Advances.
SECTION 3.09. ILLEGALITY.
(a) In the event that any Lender shall have determined
(which determination shall be made in good faith and, absent manifest error,
shall be final, conclusive and binding upon all parties) at any time that the
making or continuance of any Eurodollar Advance has become unlawful by
compliance by such Lender in good faith with any applicable law, governmental
rule, regulation, guideline or order (whether or not having
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<PAGE> 32
the force of law and whether or not failure to comply therewith would be
unlawful), then, in any such event, the Lender shall give prompt notice (by
telephone confirmed in writing) to Borrower and to the Agent of such
determination and a summary of the basis for such determination (which notice
the Agent shall promptly transmit to the other Lenders).
(b) Upon the giving of the notice to Borrower referred to
in subsection (a) above, (i) Borrower's right to request from such Lender, and
such Lender's obligation to make Eurodollar Advances shall be immediately
suspended, and such Lender shall make an Advance as part of the requested
Borrowing of Eurodollar Advances as a Base Rate Advance, which Base Rate
Advance shall, for all other purposes, be considered part of such Borrowing,
and (ii) if the affected Eurodollar Advance or Advances are then outstanding,
Borrower shall immediately, or if permitted by applicable law, no later than
the date permitted thereby, upon at least one Business Day's written notice to
the Agent and the affected Lender, convert each such Advance into a Base Rate
Advance or Advances, provided that if more than one Lender is affected at any
time, then all affected Lenders must be treated the same pursuant to this
Section 3.09(b).
SECTION 3.10. INCREASED COSTS.
(a) If, after the date hereof, by reason of (x) the
introduction of or any change (including, without limitation, any change by way
of imposition or increase of reserve requirements) in or in the interpretation
of any law or regulation, or (y) the compliance with any guideline or request
from any central bank or other governmental authority or quasi-governmental
authority exercising control over banks or financial institutions generally
(whether or not having the force of law):
(i) any Lender (or its applicable Lending Office) shall
be subject to any tax, duty or other charge with respect to its
Eurodollar Advances or its obligation to make Eurodollar Advances, or
the basis of taxation of payments to any Lender of the principal of or
interest on its Eurodollar Advances or its obligation to make
Eurodollar Advances shall have changed (except for changes in the tax
on the overall net income of such Lender or its applicable Lending
Office, or franchise taxes applicable thereto, in each case, as
imposed by the jurisdiction in which such Lender's principal executive
office or applicable Lending Office is located); or
(ii) any reserve (including, without limitation, any
imposed by the Board of Governors of the Federal Reserve System),
special deposit or similar requirement against assets of, deposits
with or for the account of, or credit extended by, any Lender's
applicable Lending Office shall be imposed or deemed applicable or any
other condition affecting its Eurodollar Advances or its obligation to
make Eurodollar Advances shall be imposed on any Lender or its
applicable Lending Office or the London interbank market;
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and as a result thereof there shall be any increase in the cost to such Lender
of agreeing to make or making, funding or maintaining Eurodollar Advances
(except to the extent already included in the determination of the applicable
Adjusted LIBO Rate for Eurodollar Advances) or its obligation to make
Eurodollar Advances, or there shall be a reduction in the amount received or
receivable by such Lender or its applicable Lending Office, then Borrower shall
from time to time (subject, in the case of certain Taxes, to the applicable
provisions of Section 3.07(b)), upon written notice from and demand by such
Lender on Borrower (with a copy of such notice and demand to the Agent), pay to
the Agent for the account of such Lender within five Business Days after the
date of such notice and demand, additional amounts sufficient to indemnify such
Lender against such increased cost. A certificate as to the amount of such
increased cost, submitted to Borrower and the Agent by such Lender in good
faith and accompanied by a statement prepared by such Lender describing in
reasonable detail the basis for and calculation of such increased cost, shall
constitute prima facie evidence of the matters contained therein.
(b) If any Lender shall advise the Agent that at any
time, because of the circumstances described in clauses (x) or (y) in Section
3.10(a) or any other circumstances beyond such Lender's reasonable control
arising after the date of this Agreement affecting such Lender or the London
interbank market or such Lender's position in such market, the Adjusted LIBO
Rate as determined by the Agent will not adequately and fairly reflect the cost
to such Lender of funding its Eurodollar Advances, then, and in any such event:
(i) the Agent shall forthwith give notice (by telephone
confirmed in writing) to Borrower and to the other Lenders of such
advice;
(ii) Borrower's right to request from such Lender and such
Lender's obligation to make or permit portions of the Revolving Loans
to remain outstanding past the last day of the then current Interest
Periods as Eurodollar Advances shall be immediately suspended; and
(iii) such Lender shall make a Revolving Loan as part of
the requested Borrowing of Eurodollar Advances as a Base Rate Advance,
which such Base Rate Advance shall, for all other purposes, be
considered part of such Borrowing.
SECTION 3.11. LENDING OFFICES.
(a) Each Lender agrees that, if requested by Borrower, it
will use reasonable efforts (subject to overall policy considerations of such
Lender) to designate an alternate Lending Office with respect to any of its
Eurodollar Advances affected by the matters or circumstances described in
Sections 3.07(b), 3.08, 3.09 or 3.10 to reduce the liability of Borrower or
avoid the results provided thereunder, so long as such designation is not
disadvantageous to such Lender as reasonably determined by such Lender, which
determination shall be conclusive and binding on all
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parties hereto. Nothing in this Section 3.11 shall affect or postpone any of
the obligations of Borrower or any right of any Lender provided hereunder.
(b) If any Lender that is organized under the laws of any
jurisdiction other than the United States of America or any State thereof
(including the District of Columbia) issues a public announcement with respect
to the closing of its lending offices in the United States such that any
withholdings or deductions and additional payments with respect to Taxes may be
required to be made by Borrower thereafter pursuant to Section 3.07(b), such
Lender shall use reasonable efforts to furnish Borrower notice thereof as soon
as practicable thereafter; provided, however, that no delay or failure to
furnish such notice shall in any event release or discharge Borrower from its
obligations to such Lender pursuant to Section 3.07(b) or otherwise result in
any liability of such Lender.
SECTION 3.12. FUNDING LOSSES. Borrower shall compensate each
Lender, upon its written request to Borrower (which request shall set forth the
basis for requesting such amounts in reasonable detail and which request shall
be made in good faith and shall constitute prima facie evidence of the matters
contained therein), for all losses, expenses and liabilities (including,
without limitation, any interest paid by such Lender to lenders of funds
borrowed by it to make or carry its Eurodollar Advances, in either case to the
extent not recovered by such Lender in connection with the re-employment of
such funds and including loss of anticipated profits), which the Lender may
sustain: (i) if for any reason (other than a default by such Lender) a
Borrowing of, or conversion to or continuation of, Eurodollar Advances to
Borrower does not occur on the date specified therefor in a Notice of Borrowing
or Notice of Conversion/Continuation (whether or not withdrawn), (ii) if any
repayment (excluding any mandatory prepayments pursuant to Section 2.04 but
including any conversions pursuant to Section 3.09(b)) of any Eurodollar
Advances to Borrower occurs on a date which is not the last day of an Interest
Period applicable thereto, or (iii), if, for any reason, Borrower defaults in
its obligation to repay its Eurodollar Advances when required by the terms of
this Agreement.
SECTION 3.13. ASSUMPTIONS CONCERNING FUNDING OF EURODOLLAR
ADVANCES. Calculation of all amounts payable to a Lender under this Article
III shall be made as though that Lender had actually funded its relevant
Eurodollar Advances through the purchase of deposits in the relevant market
bearing interest at the rate applicable to such Eurodollar Advances in an
amount equal to the amount of the Eurodollar Advances and having a maturity
comparable to the relevant Interest Period and through the transfer of such
Eurodollar Advances from an offshore office of that Lender to a domestic office
of that Lender in the United States of America; provided, however, that each
Lender may fund each of its Eurodollar Advances in any manner it sees fit and
the foregoing assumption shall be used only for calculation of amounts payable
under this Article III.
SECTION 3.14. APPORTIONMENT OF PAYMENTS. Aggregate principal
and interest payments in respect of Revolving Loans and commitment fees shall
be apportioned among all outstanding Revolving Credit Commitments and Revolving
Loans to which such payments relate, proportionately to the Lenders' respective
pro rata portions of such Revolving Credit Commitments and outstanding
Revolving Loans. The Agent shall promptly distribute to each Lender at its
payment
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office specified by any Lender its share of all such payments received by the
Agent on the same Business Day as such payment is deemed to be received by the
Agent.
SECTION 3.15. SHARING OF PAYMENTS, ETC. If any Lender shall
obtain any payment or reduction (including, without limitation, any amounts
received as adequate protection of a deposit treated as cash collateral under
the Bankruptcy Code) of the Obligations (whether voluntary, involuntary,
through the exercise of any right of set-off, or otherwise) in excess of its
Pro Rata Share of payments or reductions on account of such obligations
obtained by all the Lenders, such Lender shall forthwith (i) notify each of the
other Lenders and Agent of such receipt, and (ii) purchase from the other
Lenders such participations in the affected obligations as shall be necessary
to cause such purchasing Lender to share the excess payment or reduction, net
of costs incurred in connection therewith, ratably with each of them, provided
that if all or any portion of such excess payment or reduction is thereafter
recovered from such purchasing Lender or additional costs are incurred, the
purchase shall be rescinded and the purchase price restored to the extent of
such recovery or such additional costs, but without interest unless the Lender
obligated to return such funds is required to pay interest on such funds.
Borrower agrees that any Lender so purchasing a participation from another
Lender pursuant to this Section 3.15 may, to the fullest extent permitted by
law, exercise all its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Lender were the direct
creditor of Borrower in the amount of such participation.
SECTION 3.16. CAPITAL ADEQUACY. Without limiting any other
provision of this Agreement, in the event that any Lender shall have determined
that any law, treaty, governmental (or quasi-governmental) rule, regulation,
guideline or order regarding capital adequacy not currently in effect or fully
applicable as of the Closing Date, or any change therein or in the
interpretation or application thereof after the Closing Date, or compliance by
such Lender with any request or directive regarding capital adequacy not
currently in effect or fully applicable as of the Closing Date (whether or not
having the force of law and whether or not failure to comply therewith would be
unlawful) from a central bank or governmental authority or body having
jurisdiction, does or shall have the effect of reducing the rate of return on
such Lender's capital as a consequence of its obligations hereunder to a level
below that which such Lender could have achieved but for such law, treaty,
rule, regulation, guideline or order, or such change or compliance (taking into
consideration such Lender's policies with respect to capital adequacy) by an
amount deemed by such Lender to be material, then within ten (10) Business Days
after written notice and demand by such Lender (with copies thereof to the
Agent), Borrower shall from time to time pay to such Lender additional amounts
sufficient to compensate such Lender for such reduction (but, in the case of
outstanding Base Rate Advances, without duplication of any amounts already
recovered by such Lender by reason of an adjustment in the applicable Base
Rate). Each certificate as to the amount payable under this Section 3.16
(which certificate shall set forth the basis for requesting such amounts in
reasonable detail), submitted to Borrower by any Lender in good faith, shall
constitute prima facie evidence of the matters contained therein.
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SECTION 3.17. NOTICE OF CAPITAL ADEQUACY AND INCREASED COSTS
CLAIMS; LIMITATION ON PAYMENT OBLIGATIONS.
(a) Each Lender agrees to notify the Borrower as promptly as
practicable upon such Lender obtaining actual knowledge of any event occurring
after the Closing Date entitling such Lender to compensation pursuant to
Section 3.10 or Section 3.16 hereof; provided that, except as set forth in
subsection (b) below, the failure of any Lender to give such notice shall not
release the Borrower from any of its obligations pursuant to such Sections.
(b) In the event that any Lender fails to make written demand
for indemnification or compensation pursuant to Section 3.10 or Section 3.16
hereof within one year after the date that such Lender receives actual notice
or obtains actual knowledge of the promulgation of a law, rule, order or
interpretation or occurrence of another event giving rise to a claim pursuant
to such Sections, the Borrower shall not have any obligation to pay any amount
with respect to claims accruing prior to the date which is one year preceding
such written demand.
ARTICLE IV.
CONDITIONS TO BORROWINGS
The obligations of each Lender to make Advances to Borrower
hereunder is subject to the satisfaction of the following conditions:
SECTION 4.01. CONDITIONS PRECEDENT TO INITIAL REVOLVING
LOANS. At the time of the making of the initial Revolving Loans hereunder (or
the deemed making of Revolving Loans pursuant to Section 2.01(c)(i)) on the
Closing Date, all obligations of Borrower hereunder incurred prior to the
initial Revolving Loans, including, without limitation, Borrower's obligations
(i) to reimburse the reasonable fees and expenses of counsel to the Agent and
any fees and expenses payable to the Agent or its Affiliates as previously
agreed with Borrower, including without limitation, the fees set forth in the
Fee Letter and (ii) to pay all accrued interest and fees pursuant to the Former
Agreement (but excluding the principal amount outstanding thereunder), shall
have been paid in full, and the Agent shall have received the following, in
form and substance reasonably satisfactory in all respects to the Agent:
(a) the duly executed counterparts of this Agreement;
(b) the duly completed Revolving Credit Notes evidencing
the Revolving Credit Commitments;
(c) a duly executed Note Assignment and original
Intercompany Loan Documents, duly endorsed to the Agent, with respect
to each Intercompany Loan existing on the Closing Date;
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(d) certificates of the Secretary or Assistant Secretary
of each of the Credit Parties attaching and certifying copies of the
resolutions of the boards of directors of the Credit Parties,
authorizing as applicable the execution, delivery and performance of
the Credit Documents;
(e) certificates of the Secretary or an Assistant
Secretary of each of the Credit Parties certifying (i) the name, title
and true signature of each officer of such entities executing the
Credit Documents, and (ii) the bylaws of such entities;
(f) certified copies of the certificate or articles of
incorporation of each Credit Party certified by the Secretary of State
and by the Secretary or Assistant Secretary of such Credit Party,
together with certificates of good standing or existence, as may be
available from the Secretary of State of the jurisdiction of
incorporation or organization of such Credit Party and each other
jurisdiction where such Credit Party's ownership of property or the
conduct of its business require it to be qualified, except where a
failure to be so qualified would not have a Materially Adverse Effect;
(g) certificate of Borrower in substantially the form of
Exhibit D attached hereto and appropriately completed;
(h) the favorable opinion of Alston & Bird, counsel to
the Credit Parties, in the form of Exhibit E, addressed to the Agent
and each of the Lenders;
(i) copies of all documents and instruments, including
all consents, authorizations and filings, required or advisable under
any Requirement of Law or by any material Contractual Obligation of
the Credit Parties, in connection with the execution, delivery,
performance, validity and enforceability of the Credit Documents and
the other documents to be executed and delivered hereunder, and such
consents, authorizations, filings and orders shall be in full force
and effect and all applicable waiting periods shall have expired;
(j) certificates, reports and other information as the
Agent may reasonably request from any Consolidated Company in order to
satisfy the Lenders as to the absence of any material liabilities or
obligations arising from matters relating to employees of the
Consolidated Companies, including employee relations, collective
bargaining agreements, Plans and other compensation and employee
benefit plans;
(k) certificates, reports, environmental audits and
investigations, and other information as the Agent may reasonably
request from any Consolidated Company in order to satisfy the Lenders
as to the absence of any material liabilities or obligations arising
from environmental and employee health and safety exposures to which
the Consolidated
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Companies may be subject, and the plans of the Consolidated Companies
with respect thereto;
(l) certificates, reports and other information as the
Agent may reasonably request from any Consolidated Company in order to
satisfy the Lenders as to the absence of any material liabilities or
obligations arising from litigation (including without limitation,
products liability and patent infringement claims) pending or
threatened against the Consolidated Companies;
(m) a summary, set forth in format and detail reasonably
acceptable to the Agent, of the types and amounts of insurance
(property and liability) maintained by the Consolidated Companies;
(n) evidence assuring the Agent and the Lenders that all
corporate proceedings and all other legal matters relating to the
Credit Parties in connection with the authorization, legality,
validity and enforceability of the Credit Documents are in form and
substance satisfactory to the Lenders;
(o) review of the subordination provisions in all
Subordinated Debt of the Borrower shall have been completed and such
provisions shall be in form and substance satisfactory to the Lenders;
and
(p) a certified copy of the Seller Note, the Buyer Note
and the documents governing the same.
SECTION 4.02. CONDITIONS TO ALL REVOLVING LOANS. At the time
of the making of all Revolving Loans including the initial Revolving Loans
hereunder (before as well as after giving effect to such Revolving Loans and to
the proposed use of the proceeds thereof), the following conditions shall have
been satisfied or shall exist:
(a) there shall exist no Default or Event of Default;
(b) all representations and warranties by Borrower
contained herein shall be true and correct in all material respects
with the same effect as though such representations and warranties had
been made on and as of the date of such Revolving Loans (except to the
extent such representations and warranties specifically relate to an
earlier date);
(c) since the date of the most recent financial
statements of the Consolidated Companies described in Section 5.14,
there shall have been no change which has had or could reasonably be
expected to have a Materially Adverse Effect (whether or not any
notice with respect to such change has been furnished to the Lenders
pursuant to Section 6.07);
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(d) there shall be no action or proceeding instituted or
pending before any court or other governmental authority or, to the
knowledge of Borrower, threatened (i) which reasonably could be
expected to have a Materially Adverse Effect, or (ii) seeking to
prohibit or restrict one or more Credit Party's ownership or operation
of any portion of its business or assets, or to compel one or more
Credit Party to dispose of or hold separate all or any portion of its
businesses or assets, where such portion or portions of such
business(es) or assets, as the case may be, constitute a material
portion of the total businesses or assets of the Consolidated
Companies taken as a whole;
(e) the Revolving Loans to be made and the use of
proceeds thereof shall not contravene, violate or conflict with, or
involve the Agent or any Lender in a violation of, any law, rule,
injunction, or regulation, or determination of any court of law or
other governmental authority applicable to Borrower; and
(f) the Agent shall have received such other documents or
legal opinions as the Agent or any Lender may reasonably request, all
in form and substance reasonably satisfactory to the Agent.
Each request for a Borrowing and the acceptance by Borrower of
the proceeds thereof shall constitute a representation and warranty by
Borrower, as of the date of the Revolving Loans comprising such Borrowing,
that the applicable conditions specified in Sections 4.01 and 4.02 have been
satisfied.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
Borrower (as to itself and all other Consolidated Companies)
represents and warrants as follows:
SECTION 5.01. CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each
of the Consolidated Companies is a corporation duly organized, validly
existing, and in good standing under the laws of the jurisdiction of its
incorporation, and each of the Credit Parties has the corporate power and
authority and the legal right to own and operate its property and to conduct
its business. Each of the Consolidated Companies (i) has the corporate power
and authority and the legal right to own and operate its property and to
conduct its business, (ii) is duly qualified as a foreign corporation and in
good standing under the laws of each jurisdiction where its ownership of
property or the conduct of its business requires such qualification, and (iii)
is in compliance with all Requirements of Law, where (a) the failure to have
such power, authority and legal right as set forth in clause (i), (b) the
failure to be so qualified or in good standing as set forth in clause (ii), or
(c) the failure to comply with Requirements of Law as set forth in clause
(iii), would reasonably be
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expected, in the aggregate, to have a Materially Adverse Effect. The
jurisdiction of incorporation or organization, and the ownership of all issued
and outstanding capital stock, for each Subsidiary as of the date of this
Agreement is accurately described on Schedule 5.01.
SECTION 5.02. CORPORATE POWER; AUTHORIZATION. Each of the
Credit Parties has the corporate power and authority to make, deliver and
perform the Credit Documents to which it is a party and has taken all necessary
corporate action to authorize the execution, delivery and performance of such
Credit Documents. No consent or authorization of, or filing with, any Person
(including, without limitation, any governmental authority), is required in
connection with the execution, delivery or performance by any Credit Party, or
the validity or enforceability against any Credit Party, of the Credit
Documents, other than such consents, authorizations or filings which have been
made or obtained.
SECTION 5.03. ENFORCEABLE OBLIGATIONS. This Agreement has
been duly executed and delivered, and each other Credit Document will be duly
executed and delivered, by the respective Credit Parties, and this Agreement
constitutes, and each other Credit Document when executed and delivered will
constitute, legal, valid and binding obligations of the Credit Parties,
respectively, enforceable against the Credit Parties in accordance with their
respective terms, except as may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity.
SECTION 5.04. NO LEGAL BAR. The execution, delivery and
performance by the Credit Parties of the Credit Documents will not violate any
Requirement of Law or cause a breach or default under any of their respective
Contractual Obligations.
SECTION 5.05. NO MATERIAL LITIGATION. Except as set forth on
Schedule 5.05 or in any notice furnished to the Lenders pursuant to Section
6.07(e) at or prior to the respective times the representations and warranties
set forth in this Section 5.05 are made or deemed to be made hereunder, no
litigation, investigations or proceedings of or before any courts, tribunals,
arbitrators or governmental authorities are pending or, to the knowledge of
Borrower, threatened against any of the Consolidated Companies, or against any
of their respective properties or revenues, existing or future (a) with respect
to any Credit Document, or any of the transactions contemplated hereby or
thereby, or (b) which, if adversely determined, would reasonably be expected to
have a Materially Adverse Effect.
SECTION 5.06. INVESTMENT COMPANY ACT, ETC. None of the
Credit Parties is an "investment company" or a company "controlled" by an
"investment company" (as each of the quoted terms is defined or used in the
Investment Company Act of 1940, as amended). None of the Credit Parties is
subject to regulation under the Public Utility Holding Company Act of 1935, the
Federal Power Act, or any foreign, federal or local statute or regulation
limiting its ability to incur indebtedness for money borrowed, guarantee such
indebtedness, or pledge its assets to secure such indebtedness, all as
contemplated hereby or by any other Credit Document.
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SECTION 5.07. MARGIN REGULATIONS. No part of the proceeds of
any of the Revolving Loans will be used for any purpose which violates, or
which would be inconsistent or not in compliance with, the provisions of the
applicable Margin Regulations.
SECTION 5.08. COMPLIANCE WITH ENVIRONMENTAL LAWS.
(a) The Consolidated Companies have received no notices
of claims or potential liability under, and are in compliance with, all
applicable Environmental Laws, where such claims and liabilities under, and
failures to comply with, such statutes, regulations, rules, ordinances, laws or
licenses, would reasonably be expected to result in penalties, fines, claims or
other liabilities to the Consolidated Companies in amounts in excess of
$3,000,000, either individually or in the aggregate (including any such
penalties, fines, claims, or liabilities relating to the matters set forth on
Schedule 5.08(a)), except as set forth on Schedule 5.08(a) or in any notice
furnished to the Lenders pursuant to Section 6.07(f) at or prior to the
respective times the representations and warranties set forth in this Section
5.08(a) are made or deemed to be made hereunder.
(b) Except as set forth on Schedule 5.08(b) or in any
notice furnished to the Lenders pursuant to Section 6.07(f) at or prior to the
respective times the representations and warranties set forth in this Section
5.08(b) are made or deemed to be made hereunder, none of the Consolidated
Companies has received any notice of violation, or notice of any action, either
judicial or administrative, from any governmental authority (whether United
States or foreign) relating to the actual or alleged violation of any
Environmental Law, including, without limitation, any notice of any actual or
alleged spill, leak, or other release of any Hazardous Substance, waste or
hazardous waste by any Consolidated Company or its employees or agents, or as
to the existence of any contamination on any properties owned by any
Consolidated Company, where any such violation, spill, leak, release or
contamination would reasonably be expected to result in penalties, fines,
claims or other liabilities to the Consolidated Companies in amounts in excess
of $3,000,000, either individually or in the aggregate.
(c) Except as set forth on Schedule 5.08(c), the
Consolidated Companies have obtained all necessary governmental permits,
licenses and approvals which are material to the operations conducted on their
respective properties, including without limitation, all required material
permits, licenses and approvals for (i) the emission of air pollutants or
contaminants, (ii) the treatment or pretreatment and discharge of waste water
or storm water, (iii) the treatment, storage, disposal or generation of
hazardous wastes, (iv) the withdrawal and usage of ground water or surface
water, and (v) the disposal of solid wastes.
SECTION 5.09. INSURANCE. The Consolidated Companies
currently maintain insurance with respect to their respective properties and
businesses, with financially sound and reputable insurers, having coverages
against losses or damages of the kinds customarily insured against by reputable
companies in the same or similar businesses, such insurance being in amounts no
less than those amounts which are customary for such companies under similar
circumstances. The
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Consolidated Companies have paid all material amounts of insurance premiums now
due and owing with respect to such insurance policies and coverages, and such
policies and coverages are in full force and effect.
SECTION 5.10. NO DEFAULT. None of the Consolidated Companies
is in default under or with respect to any Contractual Obligation in any
respect which has had or is reasonably expected to have a Materially Adverse
Effect.
SECTION 5.11. NO BURDENSOME RESTRICTIONS. Except as set
forth on Schedule 5.11 or in any notice furnished to the Lenders pursuant to
Section 6.07(k) at or prior to the respective times the representations and
warranties set forth in this Section 5.11 are made or deemed to be made
hereunder, none of the Consolidated Companies is a party to or bound by any
Contractual Obligation or Requirement of Law which has had or would reasonably
be expected to have a Materially Adverse Effect.
SECTION 5.12. TAXES. Except as set forth on Schedule 5.12,
each of the Consolidated Companies have filed or caused to be filed all
declarations, reports and tax returns which are required to have been filed,
and has paid all taxes, custom duties, levies, charges and similar
contributions ("taxes" in this Section 5.12) shown to be due and payable on
said returns or on any assessments made against it or its properties, and all
other taxes, fees or other charges imposed on it or any of its properties by
any governmental authority (other than those the amount or validity of which is
currently being or is expected by the Borrower to be contested in good faith by
appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided in its books); and no tax liens have been filed and, to
the knowledge of Borrower, no claims are being asserted with respect to any
such taxes, fees or other charges.
SECTION 5.13. SUBSIDIARIES. Except as disclosed on Schedule
5.01, on the date of this Agreement, Borrower has no Subsidiaries and neither
Borrower nor any Subsidiary is a joint venture partner or general partner in
any partnership. After the date of this Agreement, except as disclosed on
Schedule 5.01 or in any notice furnished pursuant to Section 6.07(l) at or
prior to the respective times the representations and warranties set forth in
this Section 5.13 are made or deemed to be made hereunder, Borrower has no
Subsidiaries.
SECTION 5.14. FINANCIAL STATEMENTS. Borrower has furnished
to the Agent and the Lenders (i) the audited consolidated and unaudited
consolidating balance sheets as of December 31, 1995, 1994 and 1993 of Borrower
and the related consolidated and consolidating statements of income and
shareholders' equity and consolidated statements of cash flows for the fiscal
years then ended, including in each case the related schedules and notes, (ii)
the unaudited balance sheet of Borrower presented on a consolidated basis as
at the end of the first fiscal quarter of 1996, and the related unaudited
consolidated statements of income and cash flows presented on a consolidated
basis for the year-to-date period then ended, setting forth in each case in
comparative form the figures for the corresponding quarter of Borrower's
previous fiscal year. The foregoing financial statements fairly present in all
material respects the consolidated financial condition of Borrower as
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at the dates thereof and results of operations for such periods in conformity
with GAAP consistently applied (subject, in the case of the quarterly financial
statements, to normal year-end audit adjustments and the absence of certain
footnotes). The Consolidated Companies taken as a whole do not have any
material contingent obligations, contingent liabilities, or material
liabilities for known taxes, long-term leases or unusual forward or long-term
commitments not reflected in the foregoing financial statements or the notes
thereto. Since December 31, 1995, there have been no changes with respect to
the Consolidated Companies which has had or would reasonably be expected to
have a Materially Adverse Effect.
SECTION 5.15. ERISA. Except as disclosed on Schedule 5.15:
(1) Identification of Plans. None of the Consolidated
Companies nor any of their respective ERISA Affiliates maintains or contributes
to, or has during the past six years maintained or contributed to, any Plan
that is subject to Title IV of ERISA;
(2) Compliance. Each Plan maintained by the Consolidated
Companies has at all times been maintained, by its terms and in operation, in
compliance with all applicable laws, and the Consolidated Companies are subject
to no tax or penalty with respect to any Plan of such Consolidated Company or
any ERISA Affiliate thereof, including without limitation, any tax or penalty
under Title I or Title IV of ERISA or under Chapter 43 of the Tax Code, or any
tax or penalty resulting from a loss of deduction under Sections 162, 404, or
419 of the Tax Code, where the failure to comply with such laws, and such taxes
and penalties, together with all other liabilities referred to in this Section
5.15 (taken as a whole), would in the aggregate have a Materially Adverse
Effect;
(3) Liabilities. The Consolidated Companies are subject
to no liabilities (including withdrawal liabilities) with respect to any Plans
of such Consolidated Companies or any of their ERISA Affiliates, including
without limitation, any liabilities arising from Titles I or IV of ERISA, other
than obligations to fund benefits under an ongoing Plan and to pay current
contributions, expenses and premiums with respect to such Plans, where such
liabilities, together with all other liabilities referred to in this Section
5.15 (taken as a whole), would in the aggregate have a Materially Adverse
Effect;
(4) Funding. The Consolidated Companies and, with
respect to any Plan which is subject to Title IV of ERISA, each of their
respective ERISA Affiliates, have made full and timely payment of all amounts
(A) required to be contributed under the terms of each Plan and applicable law,
and (B) required to be paid as expenses (including PBGC or other premiums) of
each Plan, where the failure to pay such amounts (when taken as a whole,
including any penalties attributable to such amounts) would have a Materially
Adverse Effect. No Plan subject to Title IV of ERISA has an "amount of
unfunded benefit liabilities" (as defined in Section 4001(a)(18) of ERISA),
determined as if such Plan terminated on any date on which this representation
and warranty is deemed made, in any amount which, together with all other
liabilities referred to in this Section 5.15 (taken as a whole), would have a
Materially Adverse Effect if such amount were then due and
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payable. The Consolidated Companies are subject to no liabilities with respect
to post-retirement medical benefits in any amounts which, together with all
other liabilities referred to in this Section 5.15 (taken as a whole), would
have a Materially Adverse Effect if such amounts were then due and payable.
SECTION 5.16. PATENTS, TRADEMARKS, LICENSES, ETC. Except as
set forth on Schedule 5.16, (i) the Consolidated Companies have obtained and
hold in full force and effect all material patents, trademarks, service marks,
trade names, copyrights, licenses and other such rights, free from burdensome
restrictions, which are necessary for the operation of their respective
businesses as presently conducted, and (ii) to the best of Borrower's
knowledge, no product, process, method, service or other item presently sold by
or employed by any Consolidated Company in connection with such business
infringes any patents, trademark, service mark, trade name, copyright, license
or other right owned by any other person and there is not presently pending, or
to the knowledge of Borrower, threatened, any claim or litigation against or
affecting any Consolidated Company contesting such Person's right to sell or
use any such product, process, method, substance or other item where the result
of such failure to obtain and hold such benefits or such infringement would
have a Materially Adverse Effect.
SECTION 5.17. OWNERSHIP OF PROPERTY. Except as set forth on
Schedule 5.17, (i) each Consolidated Company has good and marketable fee simple
title to or a valid leasehold interest in all of its real property and good
title to, or a valid leasehold interest in, all of its other property, as such
properties are reflected in the consolidated balance sheet of the Consolidated
Companies as of December 31, 1995 referred to in Section 5.14, other than
properties disposed of in the ordinary course of business since such date or as
otherwise permitted by the terms of this Agreement, subject to no Lien or title
defect of any kind, except Permitted Liens. The Consolidated Companies enjoy
peaceful and undisturbed possession under all of their respective leases.
SECTION 5.18. INDEBTEDNESS. Except for the Indebtedness
outstanding under the Former Agreement and for the Indebtedness set forth on
Schedule 7.01, none of the Consolidated Companies is an obligor in respect of
any Indebtedness for borrowed money, or any commitment to create or incur any
Indebtedness for borrowed money, in an amount not less than $100,000 in any
single case, and such Indebtedness and commitments for amounts less than
$100,000 do not exceed $1,000,000 in the aggregate for all such Indebtedness
and commitments of the Consolidated Companies.
SECTION 5.19. FINANCIAL CONDITION. On the Closing Date and
after giving effect to the transactions contemplated by this Agreement and the
other Credit Documents, including without limitation, the use of the proceeds
of the Revolving Loans as provided in Section 2.01(c)(i) the assets of each
Credit Party at fair valuation and based on their present fair saleable value
(including, without limitation, the fair and realistic value of any rights in
respect of any Intercompany Loans held by such Credit Party) will exceed such
Credit Party's debts, including contingent liabilities, (ii) the remaining
capital of such Credit Party will not be unreasonably small to conduct the
Credit Party's business, and (iii) such Credit Party will not have incurred
debts, or have intended to incur
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debts, beyond the Credit Party's ability to pay such debts as they mature. For
purposes of this Section 5.19, "debt" means any liability on a claim, and
"claim" means (a) the right to payment, whether or not such right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured, or (b) the right
to an equitable remedy for breach of performance if such breach gives rise to a
right to payment, whether or not such right to an equitable remedy is reduced
to judgment, fixed, contingent, matured, unmatured, disputed, undisputed,
secured or unsecured.
SECTION 5.20. LABOR MATTERS. Except as set forth in Schedule
5.20 or in any notice furnished to the Lenders pursuant to Section 6.07(k) at
or prior to the respective times the representations and warranties set forth
in this Section 5.20 are made or deemed to be made hereunder, the Consolidated
Companies have experienced no strikes, labor disputes, slow downs or work
stoppages due to labor disagreements which have had, or would reasonably be
expected to have, a Materially Adverse Effect, and, to the best knowledge of
Borrower, there are no such strikes, disputes, slow downs or work stoppages
threatened against any Consolidated Company. The hours worked and payment made
to employees of the Consolidated Companies have not been in violation in any
material respect of the Fair Labor Standards Act or any other applicable law
dealing with such matters. All payments due from the Consolidated Companies,
or for which any claim may be made against the Consolidated Companies, on
account of wages and employee health and welfare insurance and other benefits
have been paid or accrued as liabilities on the books of the Consolidated
Companies where the failure to pay or accrue such liabilities would reasonably
be expected to have a Materially Adverse Effect.
SECTION 5.21. PAYMENT OR DIVIDEND RESTRICTIONS. Except as
set forth in Section 7.04 or described on Schedule 5.21, none of the
Consolidated Companies is party to or subject to any agreement or understanding
restricting or limiting the payment of any dividends or other distributions by
any such Consolidated Company.
SECTION 5.22. INTERCOMPANY LOANS. The Intercompany Loans and
the Intercompany Loan Documents have been duly authorized and approved by all
necessary corporate and shareholder action on the part of the parties thereto,
and constitute the legal, valid and binding obligations of the parties thereto,
enforceable against each of them in accordance with their respective terms,
except as may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, or similar laws affecting creditors' rights generally, and by
general principles of equity.
SECTION 5.23. DISCLOSURE. No representation or warranty
contained in this Agreement (including the Schedules attached hereto) or in any
other document furnished from time to time pursuant to the terms of this
Agreement, contains or will contain any untrue statement of a material fact or
omits or will omit to state any material fact necessary to make the statements
herein or therein not misleading in any material respect as of the date made or
deemed to be made. Except as may be set forth herein (including the Schedules
attached hereto), there is no fact known to Borrower which has had, or is
reasonably expected to have, a Materially Adverse Effect.
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ARTICLE VI.
AFFIRMATIVE COVENANTS
So long as any Revolving Credit Commitment remains in effect
hereunder or any Revolving Credit Note shall remain unpaid, Borrower will:
SECTION 6.01. CORPORATE EXISTENCE, ETC. Except as otherwise
permitted pursuant to Section 7.03, preserve and maintain, and cause each of
its Subsidiaries to preserve and maintain, its corporate existence, its
material rights, franchises, and licenses, and its material patents and
copyrights (for the scheduled duration thereof), trademarks, trade names, and
service marks, necessary or desirable in the normal conduct of its business,
and its qualification to do business as a foreign corporation in all
jurisdictions where it conducts business or other activities making such
qualification necessary, where the failure to be so qualified would reasonably
be expected to have a Materially Adverse Effect.
SECTION 6.02. COMPLIANCE WITH LAWS, ETC. Comply, and cause
each of its Subsidiaries to comply with all Requirements of Law (including,
without limitation, the Environmental Laws subject to the exception set forth
in Section 5.08 where the penalties, claims, fines, and other liabilities
resulting from noncompliance with such Environmental Laws do not involve
amounts in excess of $3,000,000 in the aggregate) and Contractual Obligations
applicable to or binding on any of them where the failure to comply with such
Requirements of Law and Contractual Obligations would reasonably be expected to
have a Materially Adverse Effect.
SECTION 6.03. PAYMENT OF TAXES AND CLAIMS, ETC. Pay, and
cause each of its Subsidiaries to pay, (i) all taxes, assessments and
governmental charges imposed upon it or upon its property, and (ii) all claims
(including, without limitation, claims for labor, materials, supplies or
services) which might, if unpaid, become a Lien upon its property, unless, in
each case, the validity or amount thereof is being contested in good faith by
appropriate proceedings and adequate reserves are maintained with respect
thereto.
SECTION 6.04. KEEPING OF BOOKS. Keep, and cause each of its
Subsidiaries to keep, proper books of record and account, containing complete
and accurate entries of all their respective financial and business
transactions.
SECTION 6.05. VISITATION, INSPECTION, ETC. Permit, and cause
each of its Subsidiaries to permit, any representative of the Agent or any
Lender, at the Agent's or such Lender's expense, to visit and inspect any of
its property, to examine its books and records and to make copies and take
extracts therefrom, and to discuss its affairs, finances and accounts with its
officers, all at such reasonable times, upon reasonable prior notice, and as
often as the Agent or such Lender may reasonably request; provided that, no
notice shall be required in the event that an Event of Default has occurred and
is continuing.
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SECTION 6.06. INSURANCE; MAINTENANCE OF PROPERTIES.
(a) Maintain or cause to be maintained with financially
sound and reputable insurers, insurance with respect to its properties and
business, and the properties and business of its Subsidiaries, against loss or
damage of the kinds customarily insured against by reputable companies in the
same or similar businesses, such insurance to be of such types and in such
amounts as is customary for such companies under similar circumstances.
(b) Cause, and cause each of the Consolidated Companies
to cause, all properties used or useful in the conduct of its business to be
maintained and kept in good condition, repair and working order (ordinary wear
and tear excepted) and supplied with all necessary equipment and will cause to
be made all necessary repairs, renewals, replacements, settlements and
improvements thereof, all as in the judgment of Borrower may be necessary so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times; provided, however, that nothing in this
Section shall prevent Borrower from discontinuing the operation or maintenance
of any such properties if such discontinuance is, in the judgment of Borrower,
desirable in the conduct of its business or the business of any Consolidated
Company.
SECTION 6.07. REPORTING COVENANTS. Furnish to each Lender:
(a) Annual Financial Statements. As soon as available
and in any event within 90 days after the end of each fiscal year of
Borrower, a balance sheet of the Consolidated Companies as at the end
of such year, presented on a consolidated and consolidating basis, and
the related statements of income, shareholders' equity, and cash flows
of the Consolidated Companies for such fiscal year, presented on a
consolidated and consolidating basis (other than statements of cash
flow), setting forth in each case in comparative form the figures for
the previous fiscal year, all in reasonable detail and accompanied, as
to the consolidated statements, by a report thereon of Ernst & Young,
L.L.P. or other independent public accountants of comparable
recognized national standing, which such report shall be unqualified
as to going concern and scope of audit and otherwise satisfactory to
the Lenders and shall state that such financial statements present
fairly in all material respects the financial condition as at the end
of such fiscal year on a consolidated basis, and the results of
operations and statements of cash flows of the Consolidated Companies
for such fiscal year in accordance with GAAP and that the examination
by such accountants in connection with such consolidated financial
statements has been made in accordance with generally accepted
auditing standards;
(b) Quarterly Financial Statements. As soon as available
and in any event within 45 days after the end of each fiscal quarter
of Borrower (other than the fourth fiscal quarter), a balance sheet of
the Consolidated Companies as at the end of such quarter presented on
a consolidated basis and the related statements of income,
shareholders' equity (but only if such statement of shareholders'
equity is required to be prepared for such fiscal quarter under
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GAAP or the accounting requirements of the Securities and Exchange
Commission, including, without limitation, Regulation S-X), and cash
flows of the Consolidated Companies for such fiscal quarter and for
the portion of Borrower's fiscal year ended at the end of such
quarter, presented on a consolidated basis setting forth in each case
in comparative form the figures for the corresponding quarter and the
corresponding portion of Borrower's previous fiscal year, all in
reasonable detail and certified by the chief financial officer or
principal accounting officer of Borrower that such financial
statements fairly present in all material respects the financial
condition of the Consolidated Companies as at the end of such fiscal
quarter on a consolidated basis, and the results of operations and
statements of cash flows of the Consolidated Companies for such fiscal
quarter and such portion of Borrower's fiscal year, in accordance with
GAAP consistently applied (subject to normal year-end audit
adjustments and the absence of certain footnotes);
(c) No Default/Compliance Certificate. Together with the
financial statements required pursuant to subsections (a) and (b)
above, a certificate of the treasurer or chief financial officer of
Borrower substantially in the form of Exhibit F attached hereto: (i)
to the effect that, based upon a review of the activities of the
Consolidated Companies and such financial statements during the period
covered thereby, there exists no Event of Default and no Default under
this Agreement, or if there exists an Event of Default or a Default
hereunder, specifying the nature thereof and the proposed response
thereto, (ii) demonstrating in reasonable detail compliance as at the
end of such fiscal year or such fiscal quarter with Section 6.08 and
Sections 7.01 through 7.05, (iii) certifying, with respect to the
consolidating financial statements required pursuant to subsection (a)
above, that such financial statements fairly present in all material
respects the financial condition of the relevant Consolidated Company
as at the end of such fiscal quarter on a consolidating basis, and the
results of operations of such Consolidated Company for such fiscal
year, in accordance with GAAP consistently applied, and (iv)
indicating the number of shares of Voting Stock of the Borrower owned
by the Persons comprising the Fuqua Family;
(d) Notice of Default. Promptly after any Executive
Officer of Borrower has notice or knowledge of the occurrence of an
Event of Default or a Default, a certificate of the chief executive
officer, chief financial officer or principal accounting officer of
Borrower specifying the nature thereof and the proposed response
thereto;
(e) Litigation. Promptly after (i) the occurrence
thereof, notice of the institution of or any material adverse
development in any material action, suit or proceeding or any
governmental investigation or any arbitration, before any court or
arbitrator or any governmental or administrative body, agency or
official, against any Consolidated Company, or any material property
of any thereof, or (ii) an Executive Officer obtains actual knowledge
thereof, notice of the threat of any such action, suit, proceeding,
investigation or arbitration;
(f) Environmental Notices. Promptly after receipt
thereof, notice of any actual or alleged violation, or notice of any
action, claim or request for information, either judicial
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or administrative, from any governmental authority relating to any
actual or alleged claim, notice of potential responsibility under or
violation of any Environmental Law, or any actual or alleged spill,
leak, disposal or other release of any waste, petroleum product, or
hazardous waste or Hazardous Substance by any Consolidated Company
which could reasonably be expected to result in penalties, fines,
claims or other liabilities to any Consolidated Company in amounts in
excess of $3,000,000;
(g) ERISA. (i) Promptly after the occurrence thereof
with respect to any Plan of any Consolidated Company or any ERISA
Affiliate thereof, or any trust established thereunder, notice of (A)
a "reportable event" described in Section 4043 of ERISA and the
regulations issued from time to time thereunder (other than a
"reportable event" not subject to the provisions for 30-day notice to
the PBGC under such regulations or for which penalties have been
waived under PBGC Technical Update 95-3), or (B) any other event
which could subject any Consolidated Company to any tax, penalty or
liability under Title I or Title IV of ERISA or Chapter 43 of the Tax
Code, or any tax or penalty resulting from a loss of deduction under
Sections 162, 404 or 419 of the Tax Code, where any such taxes,
penalties or liabilities exceed or could exceed $250,000 in the
aggregate;
(ii) Promptly after such notice must be provided
to the PBGC, or to a Plan participant, beneficiary or alternative
payee, any notice required under Section 101(d), 302(f)(4), 303, 307,
4041(b)(1)(A) or 4041(c)(1)(A) of ERISA or under Section 401(a)(29) or
412 of the Tax Code with respect to any Plan of any Consolidated
Company or any ERISA Affiliate thereof;
(iii) Promptly after receipt, any notice received
by any Consolidated Company or any ERISA Affiliate thereof concerning
the intent of the PBGC or any other governmental authority to
terminate a Plan of such Company or ERISA Affiliate thereof which is
subject to Title IV of ERISA, to impose any liability on such Company
or ERISA Affiliate under Title IV of ERISA or Chapter 43 of the Tax
Code;
(iv) Upon the request of the Agent, promptly upon
the filing thereof with the Internal Revenue Service ("IRS") or the
Department of Labor ("DOL"), a copy of IRS Form 5500 or annual report
for each Plan of any Consolidated Company or ERISA Affiliate thereof
which is subject to Title IV of ERISA;
(v) Upon the request of the Agent, (A) true and
complete copies of any and all documents, government reports and IRS
determination or opinion letters or rulings for any Plan of any
Consolidated Company from the IRS, PBGC or DOL, (B) any reports filed
with the IRS, PBGC or DOL with respect to a Plan of the Consolidated
Companies or any ERISA Affiliate thereof, or (C) a current statement
of withdrawal liability for each Multiemployer Plan of any
Consolidated Company or any ERISA Affiliate thereof;
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(h) Liens. Promptly upon any Consolidated Company
becoming aware thereof, notice of the filing of any federal statutory
Lien, tax or other state or local government Lien or any other Lien
affecting their respective properties, other than Permitted Liens;
(i) Public Filings, Etc. Promptly upon the filing
thereof or otherwise becoming available, copies of all financial
statements, annual, quarterly and special reports, proxy statements
and notices sent or made available generally by Borrower to its public
security holders, of all regular and periodic reports and all
registration statements (other than any registration statement on Form
S-8 (or its equivalent) filed under the Securities Act of 1933, as
amended) and prospectuses, if any, filed by any of them with any
securities exchange, and of all press releases and other statements
made available generally to the public containing material
developments in the business or financial condition of Borrower and
the other Consolidated Companies;
(j) Accountants' Reports. Promptly upon receipt thereof,
copies of all financial statements of, and all reports submitted by,
independent public accountants to Borrower in connection with each
annual, interim, or special audit of Borrower's financial statements,
including without limitation, the comment letter submitted by such
accountants to management in connection with their annual audit;
(k) Burdensome Restrictions, Etc. Promptly upon the
existence or occurrence thereof, notice of the existence or occurrence
of (i) any Contractual Obligation or Requirement of Law described in
Section 5.11, (ii) failure of any Consolidated Company to hold in full
force and effect those material trademarks, service marks, patents,
trade names, copyrights, licenses and similar rights necessary in the
normal conduct of its business, and (iii) any strike, labor dispute,
slow down or work stoppage as described in Section 5.20;
(l) Subsidiaries. Promptly upon the creation or
Acquisition of any new Subsidiary, notice of such event together with
a description of such Subsidiary and such transaction, relating
thereto;
(m) Asset Sale. Promptly upon the consummation of any
Asset Sale, notice of such event including the amount of Net Proceeds
received in connection therewith;
(n) Intercompany Loans. Together with the certificate
delivered pursuant to subsection (c) above, a list of the outstanding
Intercompany Loans as of the last day of the fiscal quarter for which
such certificate is delivered, indicating the outstanding balance on
each of the Intercompany Notes; and
(o) Other Information. With reasonable promptness, such
other information about the Consolidated Companies as the Agent or any
Lender may reasonably request from time to time.
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SECTION 6.08. FINANCIAL COVENANTS.
(a) Debt to Capital Ratio. Maintain a ratio of
Consolidated Funded Debt to Total Capitalization equal to or less than 0.6:1.0,
measured as of the last day of each fiscal quarter.
(b) Interest Coverage. Maintain an Interest Coverage
Ratio equal to or greater than 2.0:1.0, measured as of the last day of each
fiscal quarter for the immediately preceding four fiscal quarters ending on
such date.
(c) Consolidated Funded Debt to Cash Flow. Maintain a
ratio of (i) Consolidated Funded Debt to (ii) Consolidated EBITDA equal to or
less than 4.0:1.0, measured as of the last day of each fiscal quarter, and in
the case of Consolidated EBITDA, calculated for the immediately preceding four
fiscal quarters ending on such date.
(d) First Fiscal Quarter 1996 Calculations. Schedule
6.08 sets forth the calculation of the financial covenant amounts, ratios, and
percentages required by paragraphs (a) through (c) of this Section 6.08
calculated as of March 31, 1996.
SECTION 6.09. NOTICES UNDER CERTAIN OTHER INDEBTEDNESS.
Immediately upon its receipt thereof, Borrower shall furnish the Agent a copy
of any notice received by it or any other Consolidated Company from the
holder(s) of Indebtedness referred to in Section 7.01(b), (c), (d), (f), (g),
(i), (j) or (l) (or from any trustee, agent, attorney, or other party acting on
behalf of such holder(s)) in an amount which, in the aggregate, exceeds
$3,000,000, where such notice states or claims (i) the existence or occurrence
of any default or event of default with respect to such Indebtedness under the
terms of any indenture, loan or credit agreement, debenture, note, or other
document evidencing or governing such Indebtedness, or (ii) the existence or
occurrence of any event or condition which requires or permits holder(s) of any
Indebtedness to exercise rights under any Change in Control Provision.
ARTICLE VII.
NEGATIVE COVENANTS
So long as any Revolving Credit Commitment remains in effect
hereunder or any Revolving Credit Note shall remain unpaid, Borrower will not
and will not permit any Subsidiary to:
SECTION 7.01. INDEBTEDNESS. Create, incur, assume,
guarantee, suffer to exist or otherwise become liable on or with respect to,
directly or indirectly, any Indebtedness, other than:
(a) Indebtedness of the Borrower under this Agreement;
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(b) Indebtedness outstanding on the Closing Date and
described on Schedule 7.01, including the line of credit extended by
SunTrust in aggregate principal amount not to exceed $5,000,000 and
the letter of credit facility for trade letters of credit extended by
SunTrust in an aggregate face amount not to exceed $3,000,000;
(c) The Seller Note and any stand-by letter of credit
facility established by the Borrower solely for support thereof (which
letter of credit and accompanying documentation has been approved in
writing by the Required Lenders);
(d) Indebtedness not otherwise permitted by this Section
7.01; provided however, that the aggregate principal amount of the
Indebtedness permitted by this paragraph (d) at any one time
outstanding may not exceed $10,000,000 in the aggregate with respect
to the Consolidated Companies; provided further, the amount of such
Indebtedness which constitutes an obligation of the Subsidiaries of
the Borrower may not exceed at any one time outstanding $5,000,000 in
the aggregate;
(e) unsecured current liabilities (other than liabilities
for borrowed money or liabilities evidenced by promissory notes, bonds
or similar instruments) incurred in the ordinary course of business
and not more than 30 days past due;
(f) Subordinated Debt of the Borrower which is unsecured
and approved as to terms and conditions by the Required Lenders;
(g) Guarantees approved in writing by the Required
Lenders;
(h) Endorsements of instruments for deposit or collection
in the ordinary course of business;
(i) Indebtedness of a Person which is acquired by or
consolidated with a Consolidated Company as long as such Indebtedness
is not obtained in contemplation of such acquisition; provided that,
such Indebtedness does not exceed $12,500,000 in aggregate amount with
respect to any single Acquisition or related series of Acquisitions
and does not exceed $25,000,000 in aggregate amount during the term of
this Agreement;
(j) Guarantees of Indebtedness of potential Acquisition
targets which Indebtedness (x) has a term of one year or less and (y)
when aggregated with all other such Indebtedness Guaranteed by
Borrower, does not exceed $5,000,000 in principal amount at any time
outstanding;
(k) Intercompany Loans among the Borrower and its
Subsidiaries; provided that, the obligations of each obligor of such
Indebtedness shall (i) be evidenced by an Intercompany Note which is
pledged to the Agent for the benefit of the Lenders pursuant to a Note
Assignment, (ii) be subordinated in right of payment to the
Obligations on terms and
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conditions satisfactory to the Required Lenders, in the case of
Intercompany Loans made to the Borrower, (iii) be payable on demand,
in the case of Intercompany Loans made by the Borrower, and (iv) in
the case of any sale of all or substantially all of the assets of any
Subsidiary which has executed and delivered an Intercompany Note, or
any sale of assets of any such Subsidiary after the Borrower has
indicated to the Agent its intention that such Subsidiary shall cease
operation, the Net Proceeds of any such asset sale, following
satisfaction of, and provision for, all other obligations, accruals
and reserves for future payment, of such Subsidiary, shall be applied
to repay the Indebtedness evidenced by such Intercompany Note and no
advances shall be made to such Subsidiary pursuant to any Intercompany
Note in excess of the principal amount of advances outstanding on the
date of such sale or the date of indication of such intention to the
Agent (with the express understanding that Kroy Tanning Company,
Incorporated, has ceased operation as of the Closing Date); and
(l) Indebtedness incurred in connection with the
refinancing, extension or renewal of Indebtedness described in
subparagraphs (b), (d) and (i) above so long as such Indebtedness is
extended on terms at least as favorable, and in a principal amount no
greater than, the Indebtedness refinanced or renewed or extended.
SECTION 7.02. LIENS. Create, incur, assume or suffer to
exist any Lien on any of its property now owned or hereafter acquired to secure
any Indebtedness other than:
(a) Liens existing on the Closing Date and disclosed on
Schedule 7.02 and Liens granted on or after the Closing Date to the
Agent for the benefit of the Lenders;
(b) any Lien securing Indebtedness permitted by Section
7.01(d);
(c) Liens for taxes not yet due, and Liens for taxes or
Liens imposed by ERISA which are being contested in good faith by
appropriate proceedings and with respect to which adequate reserves
are being maintained in accordance with GAAP;
(d) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other Liens imposed by law
and created in the ordinary course of business for amounts not yet due
or which are being contested in good faith by appropriate proceedings
and with respect to which adequate reserves are being maintained in
accordance with GAAP;
(e) Liens incurred or deposits made in the ordinary
course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or to
secure the performance of tenders, statutory obligations, surety and
appeal bonds, bids, leases, government contracts, performance and
return-of-money bonds and other similar obligations (exclusive of
obligations for the payment of borrowed money);
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(f) zoning, easements and restrictions on the use of real
property which do not materially impair the use of such property;
(g) rights in property reserved or vested in any
governmental authority which do not materially impair the use of such
property; and
(h) Liens securing Indebtedness permitted by Section
7.01(i).
SECTION 7.03. MERGERS, CONSOLIDATIONS, ETC. Merge or
consolidate with any other Person, except that this Section 7.03 shall not
apply to (i) any merger or consolidation of Borrower with any other Person
provided that the Borrower is the surviving corporation after such merger or
consolidation, (ii) any merger or consolidation of any of the Borrower's
Subsidiaries with any other Person in connection with an Acquisition made in
compliance with the terms hereof; provided that, after giving effect thereto,
the surviving corporation shall be a Subsidiary of the Borrower and the
Borrower shall retain the same or greater percentage of ownership of such
surviving Subsidiary as Borrower held in the merging Subsidiary, or (iii) any
merger of a Subsidiary of the Borrower into the Borrower or another
wholly-owned Subsidiary of the Borrower;
SECTION 7.04. RESTRICTED PAYMENTS. Make, declare or commit
to make any Restricted Payment, other than:
(i) dividends payable to the Borrower by its
Subsidiaries;
(ii) mandatory sinking fund payments, other required
prepayments, mandatory installments or final payment at maturity
required by the terms of any Subordinated Debt; and
(iii) cash dividends declared and paid, and all
other Restricted Payments made, after the Closing Date in an aggregate
amount not to exceed the sum of (x) $2,500,000 plus (y) 50% of
Consolidated Net Income (or minus 100% of Consolidated Net Loss)
earned by Borrower after June 30, 1996 (such period to be treated as
one accounting period);
provided, however, no such Restricted Payment may be declared or paid pursuant
to this Section 7.04 unless no Default or Event of Default exists at the time
of such declaration or payment, or would exist as a result of such declaration
or payment.
SECTION 7.05. INVESTMENTS, LOANS, ACQUISITIONS ETC. (i) Make
or enter into any Acquisition, (ii) make, permit or hold any Investments, or
(iii) otherwise acquire or hold any Subsidiaries, other than:
(a) Investments in Subsidiaries of Borrower existing as
of the Closing Date;
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(b) Investments in Cash Equivalents;
(c) Investments in other instruments which have received
and continue to be rated as Investment Grade;
(d) Investments received in settlement of Indebtedness
created in the ordinary course of business or Investments in the form
of loans to employees in the ordinary course of business;
(e) Intercompany Loans and Guarantees to the extent
permitted by Section 7.01;
(f) Acquisitions, provided that:
(x) before and after giving effect to such
Acquisition, no Default or Event of Default shall exist
hereunder, as certified by Borrower to the Lenders in writing,
together with evidence of the calculation of the financial
covenants hereunder, as of the closing date of such
Acquisition;
(y) such Acquisition shall have been approved in
advance by a majority of the board of directors of the seller;
and
(z) in the case of any Acquisition where the
total consideration to be paid by the Borrower exceeds
$5,000,000, the Lenders shall have been given reasonable
notice of the proposed Acquisition, access to the due
diligence information collected or prepared by the Borrower in
connection with the Acquisition, and a reasonable opportunity
to review such information and question the management of the
Borrower regarding such information;
(g) Investments in the form of loans to potential
Acquisition targets which loans (x) are for a term of one year or
less, and (y) when aggregated with all other such loans, do not exceed
$5,000,000 in principal amount at any time outstanding;
(h) the Buyer Note; and
(i) Other Investments not permitted by the preceding
paragraphs to the extent reflected on the balance sheet of the
Consolidated Companies as of the Closing Date and set forth on
Schedule 7.05 attached hereto.
SECTION 7.06. ASSET SALES. Enter into any Asset Sale, except
that:
(a) the Borrower or any Subsidiary may enter into any
Asset Sale, in each case, for consideration which represents the fair
value (as determined by action of the Board of
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Directors of the Borrower or such Subsidiary, as the case may be) at
the time of such Asset Sale, so long as:
(i) immediately after the consummation of the
Asset Sale, and after giving effect thereto, the aggregate
Asset Value (determined with respect to any asset at the time
of the Asset Sale) of all such assets of the Borrower and its
Subsidiaries which were the subject of Asset Sales during the
current fiscal quarter and preceding three fiscal quarters of
Borrower shall not exceed ten percent (10%) of Total Assets as
of the end of the immediately preceding fiscal year; and
(ii) before and immediately after the consummation
of the Asset Sale, and after giving effect thereto, no Default
or Event of Default shall exist hereunder;
provided, however, that to the extent that Borrower or any Subsidiary
invests the Net Proceeds of any Asset Sale into assets of similar
quality, type and Asset Value within twelve (12) months after such
Asset Sale, as certified by the Borrower to the Lenders with such
additional supporting documentation as the Required Lenders may
reasonably request, the Asset Value of such Asset Sale, to the extent
of such reinvested Net Proceeds, shall not be included for purposes of
determining Compliance with clause (i) above with respect to any
subsequent Asset Sale; and
(b) any Subsidiary of the Borrower may enter into an
Asset Sale or lease of its assets to the Borrower or any other
Subsidiary of the Borrower.
SECTION 7.07. SALE AND LEASEBACK TRANSACTIONS. Sell or
transfer any property, real or personal, whether now owned or hereafter
acquired, and thereafter rent or lease such property or other property which
any Consolidated Company intends to use for substantially the same purpose or
purposes as the property being sold or transferred, except for such
transactions occurring after the Closing Date with respect to properties (in
the aggregate with respect to all such transactions) having Asset Values not
greater than $10,000,000 in the aggregate.
SECTION 7.08. TRANSACTIONS WITH AFFILIATES. Enter into any
transaction or series of related transactions which in the aggregate would be
material, whether or not in the ordinary course of business, with any Affiliate
of any Consolidated Company (but excluding any Affiliate which is also a
wholly-owned Subsidiary of Borrower and any compensation arrangement with an
officer or director of the Borrower or any other Consolidated Company entered
into in the ordinary course of business), other than on terms and conditions
substantially as favorable to such Consolidated Company as would be obtained by
such Consolidated Company at the time in a comparable arm's-length transaction
with a Person other than an Affiliate.
SECTION 7.09. ISSUANCE OF CAPITAL STOCK. Allow any
Subsidiary of Borrower to issue any shares, interests, warrants, participations
or other equivalent instruments to any Person other than the Borrower.
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SECTION 7.10. ERISA. Without first obtaining the written
approval of the Required Lenders, take or fail to take any action which might
reasonably be expected to have a Materially Adverse Effect with respect to any
Plan of any Consolidated Company or, with respect to its ERISA Affiliates, any
Plans which are subject to Title IV of ERISA or to continuation health care
requirements for group health plans under the Tax Code, including without
limitation (i) establishing any such Plan, (ii) amending any such Plan (except
where required to comply with applicable law), (iii) terminating or withdrawing
from any such Plan, or (iv) incurring an amount of unfunded benefit
liabilities, as defined in Section 4001(a)(18) of ERISA, or any withdrawal
liability under Title IV of ERISA with respect to any such Plan.
SECTION 7.11. LIMITATION ON PAYMENT RESTRICTIONS AFFECTING
CONSOLIDATED COMPANIES. Create or otherwise cause or suffer to exist or become
effective, any consensual encumbrance or restriction on the ability of any
Consolidated Company to (i) pay dividends or make any other distributions on
any stock of a Subsidiary of the Borrower, or (ii) pay any Indebtedness owed to
Borrower or any other Consolidated Company, or (iii) transfer any of its
property or assets to Borrower or any other Consolidated Company, except any
consensual encumbrance or restriction existing as of the Closing Date.
SECTION 7.12. ACTIONS UNDER CERTAIN DOCUMENTS. Without the
prior written consent of the Required Lenders (i) modify, amend, cancel or
rescind the provisions of any agreements or documents evidencing or governing
(x) Subordinated Debt, or (y) the maturity date, principal amount, interest
rate, amortization schedule or offset rights with respect to either the Seller
Note or the Buyer Note or (ii) make any payment with respect to Subordinated
Debt except payments expressly permitted by the terms of such Subordinated
Debt.
SECTION 7.13. CHANGES IN FISCAL YEAR. Change its fiscal year
from that in effect as of the Closing Date.
ARTICLE VIII.
EVENTS OF DEFAULT
Upon the occurrence and during the continuance of any of the
following specified events (each an "Event of Default"):
SECTION 8.01. PAYMENTS. Borrower shall fail to make promptly
when due (including, without limitation, by mandatory prepayment) any principal
payment with respect to the Revolving Loans, or Borrower shall fail to make any
payment of interest, fee or other amount payable hereunder within five (5) days
of the due date thereof;
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SECTION 8.02. COVENANTS WITHOUT NOTICE. Borrower shall fail
to observe or perform any covenant or agreement contained in (i) Sections 6.01,
6.05, 6.07 or 6.09 and such failure shall remain unremedied for five (5) days
after the earlier of (x) any Executive Officer of the Borrower obtaining
knowledge thereof or (y) written notice thereof shall have been given to
Borrower by Agent or any Lender or (ii) Section 6.08 or Article VII;
SECTION 8.03. OTHER COVENANTS. Borrower shall fail to
observe or perform any covenant or agreement contained in this Agreement, other
than those referred to in Sections 8.01 and 8.02, and, if capable of being
remedied, such failure shall remain unremedied for 30 days after the earlier of
(i) any Executive Officer of the Borrower obtaining knowledge thereof, or (ii)
written notice thereof shall have been given to Borrower by Agent or any
Lender;
SECTION 8.04. REPRESENTATIONS. Any representation or
warranty made or deemed to be made by Borrower or any other Credit Party or by
any of its officers under this Agreement or any other Credit Document
(including the Schedules attached thereto), or any certificate or other
document submitted to the Agent or the Lenders by any such Person pursuant to
the terms of this Agreement or any other Credit Document, shall be incorrect in
any material respect when made or deemed to be made or submitted;
SECTION 8.05. NON-PAYMENTS OF OTHER INDEBTEDNESS. Any
Consolidated Company shall fail to make when due (whether at stated maturity,
by acceleration, on demand or otherwise, and after giving effect to any
applicable grace period) any payment of principal of or interest on any
Indebtedness (other than the Obligations) exceeding $3,500,000 individually or
in the aggregate;
SECTION 8.06. DEFAULTS UNDER OTHER AGREEMENTS; CHANGE IN
CONTROL PROVISIONS. Any Consolidated Company shall fail to observe or perform
any covenants or agreements contained in any agreements or instruments relating
to any of its Indebtedness exceeding $3,500,000 individually or in the
aggregate, or any other event shall occur if the effect of such failure or
other event is to accelerate, or to permit the holder of such Indebtedness or
any other Person to accelerate, the maturity of such Indebtedness; or any such
Indebtedness shall be required to be prepaid (other than by a regularly
scheduled required prepayment) in whole or in part prior to its stated
maturity; or any event or condition shall occur or exist which, pursuant to the
terms of any Change in Control Provision, requires or permits the holder(s) of
the Indebtedness subject to such Change in Control Provision to require that
such Indebtedness exceeding $3,500,000 individually or in the aggregate, be
redeemed, repurchased, defeased, prepaid or repaid, in whole or in part, or the
maturity of such Indebtedness to be accelerated, unless such failure or the
effect of such Change in Control Provision is waived in writing by the holders
of such Indebtedness;
SECTION 8.07. BANKRUPTCY. Borrower or any other Consolidated
Company shall commence a voluntary case concerning itself under the Bankruptcy
Code or applicable foreign bankruptcy laws; or an involuntary case for
bankruptcy is commenced against any Consolidated Company and the petition is
not controverted within 20 days, or is not dismissed within 60 days, after
commencement of the case; or a custodian (as defined in the Bankruptcy Code) or
similar
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official under applicable foreign bankruptcy laws is appointed for, or takes
charge of, all or any substantial part of the property of any Consolidated
Company; or any Consolidated Company commences proceedings of its own
bankruptcy or to be granted a suspension of payments or any other proceeding
under any reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction,
whether now or hereafter in effect, relating to any Consolidated Company or
there is commenced against any Consolidated Company any such proceeding which
remains undismissed for a period of 60 days; or any Consolidated Company is
adjudicated insolvent or bankrupt; or any order of relief or other order
approving any such case or proceeding is entered; or any Consolidated Company
suffers any appointment of any custodian or the like for it or any substantial
part of its property to continue undischarged or unstayed for a period of 60
days; or any Consolidated Company makes a general assignment for the benefit of
creditors; or any Consolidated Company shall fail to pay, or shall state in
writing that it is unable to pay, or shall be unable to pay, its debts
generally as they become due; or any Consolidated Company shall call a meeting
of its creditors with a view to arranging a composition or adjustment of its
debts; or any Consolidated Company shall by any act or failure to act indicate
its consent to, approval of or acquiescence in any of the foregoing; or any
corporate action is taken by any Consolidated Company for the purpose of
effecting any of the foregoing;
SECTION 8.08. ERISA. A Plan of a Consolidated Company or a
Plan subject to Title IV of ERISA of any of its ERISA Affiliates
(i) shall fail to be funded in accordance with the
minimum funding standard required by applicable law,
the terms of such Plan, Section 412 of the Tax Code
or Section 302 of ERISA for any plan year or a waiver
of such standard is sought or granted with respect to
such Plan under applicable law, the terms of such
Plan or Section 412 of the Tax Code or Section 303 of
ERISA; or
(ii) is being, or has been, terminated or the subject of
termination proceedings under applicable law or the
terms of such Plan; or
(iii) shall require a Consolidated Company to provide
security under applicable law, the terms of such
Plan, Section 401 or 412 of the Tax Code or Section
306 or 307 of ERISA; or
(iv) results in a liability to a Consolidated Company
under applicable law, the terms of such Plan, or
Title IV of ERISA;
and there shall result from any such failure, waiver, termination or other
event a liability to the PBGC or a Plan that would have a Materially Adverse
Effect;
SECTION 8.09. MONEY JUDGMENT. Judgments or orders for the
payment of money in excess of $5,000,000 individually or in the aggregate
(unless the Borrower's insurers have
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affirmatively agreed in writing that such amounts are covered by insurance) or
otherwise having a Materially Adverse Effect shall be rendered against Borrower
or any other Consolidated Company and such judgment or order shall continue
unsatisfied (in the case of a money judgment) and in effect for a period of 60
days during which execution shall not be effectively stayed or deferred
(whether by action of a court, by agreement or otherwise);
SECTION 8.10. OWNERSHIP OF SUBSIDIARIES. If Borrower shall
at any time fail to own and control the shares of Voting Stock of any
Subsidiary which it owned or controlled as of the Closing Date or such later
date when such Subsidiary was created or acquired, except in connection with an
Asset Sale or a merger or consolidation permitted hereunder;
SECTION 8.11. CHANGE IN CONTROL OF BORROWER. If any of the
following shall occur:
(a) any individual, entity, or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended), other than the Fuqua Family, shall acquire the stock of the Borrower
resulting in beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the such Act) of more than 30% of the combined voting power of the then
outstanding Voting Stock of the Borrower entitled to vote for the election of a
majority of the members of the board of directors of the Borrower; or
(b) the Persons comprising the Fuqua Family shall cease to
own, in the aggregate, at least 720,000 shares of the outstanding Voting Stock
of the Borrower (without regard to any dilution thereof); or
(c) a change in the board of directors of the Borrower shall
occur such that, as of any date, a majority of the Board of Directors of the
Borrower consists of individuals who were not either (i) directors of the
Borrower as of the corresponding date of the previous year, (ii) selected or
nominated to be selected to become directors by the Board of Directors of the
Borrower of which a majority consisted of individuals described in clause (i),
or (iii) selected or nominated to be selected to become directors by the Board
of Directors of the Borrower of which a majority consisted of individuals
described in clause (i) and individuals described in clause (ii);
SECTION 8.12. DEFAULT UNDER OTHER CREDIT DOCUMENTS. There
shall exist or occur any "Event of Default" as provided under the terms of any
other Credit Document, or any Credit Document ceases to be in full force and
effect or the validity or enforceability thereof is disaffirmed by or on behalf
of Borrower or any other Credit Party, or at any time it is or becomes unlawful
for Borrower or any other Credit Party to perform or comply with its
obligations under any Credit Document, or the obligations of Borrower or any
other Credit Party under any Credit Document are not or cease to be legal,
valid and binding on Borrower or any such Credit Party;
then, and in any such event, and at any time thereafter if any Event of Default
shall then be continuing, the Agent may, and upon the written or telex request
of the Required Lenders, shall, by written notice to Borrower, take any or all
of the following actions, without prejudice to the rights
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of the Agent, any Lender or the holder of any Revolving Credit Note to enforce
its claims against Borrower or any other Credit Party: (i) declare all
Revolving Credit Commitments terminated, whereupon the Revolving Credit
Commitments of each Lender shall terminate immediately and any commitment fee
shall forthwith become due and payable without any other notice of any kind;
(ii) declare the principal of and any accrued interest on the Revolving Loans,
and all other Obligations owing hereunder to be, whereupon the same shall
become, forthwith due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower; provided,
that, if an Event of Default specified in Section 8.07 shall occur, the result
which would occur upon the giving of written notice by the Agent to any Credit
Party, as specified in clauses (i) and (ii) above, shall occur automatically
without the giving of any such notice, and (iii) may exercise any other rights
or remedies available under the Credit Documents, at law or in equity.
ARTICLE IX.
THE AGENT
SECTION 9.01. APPOINTMENT OF AGENT. Each Lender hereby
designates SunTrust as Agent to administer all matters concerning the Revolving
Loans and to act as herein specified. Each Lender hereby irrevocably
authorizes, and each holder of any Revolving Credit Note by the acceptance of a
Revolving Credit Note shall be deemed irrevocably to authorize, the Agent to
take such actions on its behalf under the provisions of this Agreement, the
other Credit Documents, and all other instruments and agreements referred to
herein or therein, and to exercise such powers and to perform such duties
hereunder and thereunder as are specifically delegated to or required of the
Agent by the terms hereof and thereof and such other powers as are reasonably
incidental thereto. The Agent may perform any of its duties hereunder by or
through their agents or employees.
SECTION 9.02. AUTHORIZATION OF AGENT WITH RESPECT TO THE
SECURITY DOCUMENTS. (a) Each Lender hereby authorizes the Agent to enter into
each of the Security Documents substantially in the form attached hereto, and
to take all action contemplated thereby. All rights and remedies under the
Security Documents may be exercised by the Agent for the benefit of the Agent
and the Lenders and the other beneficiaries thereof upon the terms thereof.
The Lenders further agree that the Agent may assign its rights and obligations
under any of the Security Documents to any affiliate of the Agent or to any
trustee, if necessary or appropriate under applicable law, which assignee in
each such case shall (subject to compliance with any requirements of applicable
law governing the assignment of such Security Documents) be entitled to all the
rights of the Agent under and with respect to the applicable Security Document.
(b) In each circumstance where, under any provision of
any Security Document, the Agent shall have the right to grant or withhold any
consent, exercise any remedy, make any determination or direct any action by
the Agent under such Security Document, the Agent shall act in respect of such
consent, exercise of remedies, determination or action, as the case may be,
with the consent of and at the direction of the Required Lenders; provided,
however, that no such consent
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of the Required Lenders shall be required with respect to any consent,
determination or other matter that is, in the Agent's judgment, ministerial or
administrative in nature. In each circumstance where any consent of or
direction from the Required Lenders is required, the Agent shall send to the
Lenders a notice setting forth a description in reasonable detail of the matter
as to which consent or direction is requested and the Agent's proposed course
of action with respect thereto.
SECTION 9.03. NATURE OF DUTIES OF AGENT. The Agent shall
have no duties or responsibilities except those expressly set forth in this
Agreement and the other Credit Documents. None of the Agent nor any of its
respective officers, directors, employees or agents shall be liable for any
action taken or omitted by it as such hereunder or in connection herewith,
unless caused by its or their gross negligence or willful misconduct. The
duties of the Agent shall be ministerial and administrative in nature; the
Agent shall not have by reason of this Agreement a fiduciary relationship in
respect of any Lender; and nothing in this Agreement, express or implied, is
intended to or shall be so construed as to impose upon the Agent any
obligations in respect of this Agreement or the other Credit Documents except
as expressly set forth herein. In carrying out its duties as expressly set
forth in this Agreement and the other Credit Documents, the Agent shall act in
a manner customary to its administration of credit facilities of a similar size
and nature provided to borrowers of similar standing for its own account.
SECTION 9.04. LACK OF RELIANCE ON THE AGENT.
(a) Independently and without reliance upon the Agent,
each Lender, to the extent it deems appropriate, has made and shall continue to
make (i) its own independent investigation of the financial condition and
affairs of the Credit Parties in connection with the taking or not taking of
any action in connection herewith, and (ii) its own appraisal of the
creditworthiness of the Credit Parties, and, except as expressly provided in
this Agreement, the Agent shall have no duty or responsibility, either
initially or on a continuing basis, to provide any Lender with any credit or
other information with respect thereto, whether coming into its possession
before the making of the Revolving Loans or at any time or times thereafter.
(b) The Agent shall not be responsible to any Lender for
any recitals, statements, information, representations or warranties herein or
in any document, certificate or other writing delivered in connection herewith
or for the execution, effectiveness, genuineness, validity, enforceability,
collectibility, priority or sufficiency of this Agreement, the Revolving Credit
Notes, the Note Assignment or any other documents contemplated hereby or
thereby, or the financial condition of the Credit Parties, or be required to
make any inquiry concerning either the performance or observance of any of the
terms, provisions or conditions of this Agreement, the Revolving Credit Notes,
the Note Assignment or the other documents contemplated hereby or thereby, or
the financial condition of the Credit Parties, or the existence or possible
existence of any Default or Event of Default.
SECTION 9.05. CERTAIN RIGHTS OF THE AGENT. If the Agent
shall request instructions from the Required Lenders with respect to any action
or actions (including the failure to act) in
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connection with this Agreement, the Agent shall be entitled to refrain from
such act or taking such act, unless and until the Agent shall have received
instructions from the Required Lenders; and the Agent shall not incur liability
in any Person by reason of so refraining. Without limiting the foregoing, no
Lender shall have any right of action whatsoever against the Agent as a result
of the Agent acting or refraining from acting hereunder in accordance with the
instructions of the Required Lenders.
SECTION 9.06. RELIANCE BY AGENT. The Agent shall be entitled
to rely, and shall be fully protected in relying, upon any note, writing,
resolution, notice, statement, certificate, telex, teletype or telecopier
message, cable gram, radiogram, order or other documentary, teletransmission or
telephone message believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person. The Agent may consult with legal
counsel (including counsel for any Credit Party), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts.
SECTION 9.07. INDEMNIFICATION OF AGENT. To the extent the
Agent is not reimbursed and indemnified by the Credit Parties, each Lender will
reimburse and indemnify the Agent, ratably according to the respective amounts
of the Revolving Loans outstanding under all Facilities (or if no amounts are
outstanding, ratably in accordance with the Total Commitments), in either case,
for and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses (including counsel fees
and disbursements) or disbursements of any kind or nature whatsoever which may
be imposed on, incurred by or asserted against the Agent in performing its
duties hereunder, in any way relating to or arising out of this Agreement or
the other Credit Documents; provided that no Lender shall be liable to the
Agent for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Agent's gross negligence or willful misconduct.
SECTION 9.08. THE AGENT IN ITS INDIVIDUAL CAPACITY. With
respect to its obligation to lend under this Agreement, the Revolving Loans
made by it and the Revolving Credit Notes issued to it, the Agent shall have
the same rights and powers hereunder as any other Lender or holder of a
Revolving Credit Note and may exercise the same as though it were not
performing the duties specified herein; and the terms "Lenders", "Required
Lenders", "holders of Revolving Credit Notes", or any similar terms shall,
unless the context clearly otherwise indicates, include the Agent in its
individual capacity. The Agent may accept deposits from, lend money to, and
generally engage in any kind of banking, trust, financial advisory or other
business with the Consolidated Companies or any affiliate of the Consolidated
Companies as if it were not performing the duties specified herein, and may
accept fees and other consideration from the Consolidated Companies for
services in connection with this Agreement and otherwise without having to
account for the same to the Lenders.
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SECTION 9.09. HOLDERS OF REVOLVING CREDIT NOTES. The Agent
may deem and treat the payee of any Revolving Credit Note as the owner thereof
for all purposes hereof unless and until a written notice of the assignment or
transfer thereof shall have been filed with the Agent. Any request, authority
or consent of any Person who, at the time of making such request or giving such
authority or consent, is the holder of any Revolving Credit Note shall be
conclusive and binding on any subsequent holder, transferee or assignee of such
Revolving Credit Note or of any Revolving Credit Note or Revolving Credit Notes
issued in exchange therefor.
SECTION 9.10. SUCCESSOR AGENT.
(a) The Agent may resign at any time by giving written
notice thereof to the Lenders and Borrower and may be removed at any time with
or without cause by the Required Lenders; provided, however, the Agent may not
resign or be removed until a successor Agent has been appointed and shall have
accepted such appointment. Upon any such resignation or removal, the Required
Lenders shall have the right to appoint a successor Agent subject to Borrower's
prior written approval. If no successor Agent shall have been so appointed by
the Required Lenders, and shall have accepted such appointment, within 30 days
after the retiring Agent's giving of notice of resignation or the Required
Lenders' removal of the retiring Agent, then the retiring Agent may, on behalf
of the Lenders, appoint a successor Agent subject to Borrower's prior written
approval, which shall be a bank which maintains an office in the United States,
or a commercial bank organized under the laws of the United States of America
or any State thereof, or any Affiliate of such bank, having a combined capital
and surplus of at least $100,000,000. In the event that the Agent is no longer
a Lender hereunder, the Agent shall promptly resign as Agent.
(b) Upon the acceptance of any appointment as the Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Agent's resignation or
removal hereunder as Agent, the provisions of this Article X shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was an
Agent under this Agreement.
ARTICLE X.
MISCELLANEOUS
SECTION 10.01. NOTICES. All notices, requests and other
communications to any party hereunder shall be in writing (including bank wire,
telex, telecopy or similar teletransmission or writing) and shall be given to
such party at its address or applicable teletransmission number set forth on
the signature pages hereof, or such other address or applicable
teletransmission number as such party may hereafter specify by notice to the
Agent and Borrower. Each such notice, request or other communication shall be
effective (i) if given by telex, when such telex is transmitted to the telex
number specified in this Section and the appropriate answerback is received,
(ii) if given by mail,
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72 hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid, (iii) if given by telecopy, when such
telecopy is transmitted to the telecopy number specified in this Section and
the appropriate confirmation is received, or (iv) if given by any other means
(including, without limitation, by air courier), when delivered or received at
the address specified in this Section; provided that notices to the Agent shall
not be effective until received.
SECTION 10.02. AMENDMENTS, ETC. No amendment or waiver of
any provision of this Agreement or the other Credit Documents, nor consent to
any departure by any Credit Party therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Required Lenders, and
then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided that no amendment,
waiver or consent shall, unless in writing and signed by all the Lenders do any
of the following: (i) waive any of the conditions specified in Section 4.01 or
4.02, (ii) increase the Revolving Credit Commitments or other contractual
obligations to Borrower under this Agreement, (iii) reduce the principal of,
or interest on, the Revolving Credit Notes or any fees hereunder, (iv) postpone
any date fixed for the payment in respect of principal of, or interest on, the
Revolving Credit Notes or any fees hereunder, (v) change the percentage of the
Revolving Credit Commitments or of the aggregate unpaid principal amount of the
Revolving Credit Notes, or the number or identity of Lenders which shall be
required for the Lenders or any of them to take any action hereunder, (vi)
agree to release any Credit Party from its obligations under any Intercompany
Note, (vii) modify the definition of "Required Lenders," or (viii) modify this
Section 10.02. Notwithstanding the foregoing, no amendment, waiver or consent
shall, unless in writing and signed by the Agent in addition to the Lenders
required hereinabove to take such action, affect the rights or duties of the
Agent under this Agreement or under any other Credit Document.
SECTION 10.03. NO WAIVER; REMEDIES CUMULATIVE. No failure or
delay on the part of the Agent, any Lender or any holder of a Revolving Credit
Note in exercising any right or remedy hereunder or under any other Credit
Document, and no course of dealing between any Credit Party and the Agent, any
Lender or the holder of any Revolving Credit Note shall operate as a waiver
thereof, nor shall any single or partial exercise of any right or remedy
hereunder or under any other Credit Document preclude any other or further
exercise thereof or the exercise of any other right or remedy hereunder or
thereunder. The rights and remedies herein expressly provided are cumulative
and not exclusive of any rights or remedies which the Agent, any Lender or the
holder of any Revolving Credit Note would otherwise have. No notice to or
demand on any Credit Party not required hereunder or under any other Credit
Document in any case shall entitle any Credit Party to any other or further
notice or demand in similar or other circumstances or constitute a waiver of
the rights of the Agent, the Lenders or the holder of any Revolving Credit Note
to any other or further action in any circumstances without notice or demand.
SECTION 10.04. PAYMENT OF EXPENSES, ETC. Borrower shall:
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(i) whether or not the transactions hereby contemplated
are consummated, pay all reasonable, out-of-pocket costs and expenses
of the Agent in the administration (both before and after the
execution hereof and including reasonable expenses actually incurred
relating to advice of counsel as to the rights and duties of the Agent
and the Lenders with respect thereto) of, and in connection with the
preparation, execution and delivery of, preservation of rights under,
enforcement of, and, after a Default or Event of Default, refinancing,
renegotiation or restructuring of, this Agreement and the other Credit
Documents and the documents and instruments referred to therein, and
any amendment, waiver or consent relating thereto (including, without
limitation, the reasonable fees actually incurred and disbursements of
counsel for the Agent), and in the case of enforcement of this
Agreement or any Credit Document after an Event of Default, all such
reasonable, out-of-pocket costs and expenses (including, without
limitation, the reasonable fees actually incurred and reasonable
disbursements and charges of counsel), for any of the Lenders;
(ii) subject, in the case of certain Taxes, to the
applicable provisions of Section 3.07(b), pay and hold each of the
Lenders harmless from and against any and all present and future
stamp, documentary, and other similar Taxes with respect to this
Agreement, the Revolving Credit Notes and any other Credit Documents,
any collateral described therein, or any payments due thereunder, and
save each Lender harmless from and against any and all liabilities
with respect to or resulting from any delay or omission to pay such
Taxes; and
(iii) indemnify the Agent and each Lender, and their
respective officers, directors, employees, representatives and agents
from, and hold each of them harmless against, any and all costs,
losses, liabilities, claims, damages or expenses incurred by any of
them (whether or not any of them is designated a party thereto) (an
"Indemnitee") arising out of or by reason of any investigation,
litigation or other proceeding related to any actual or proposed use
of the proceeds of any of the Revolving Loans or any Credit Party's
entering into and performing of the Agreement, the Revolving Credit
Notes, or the other Credit Documents, including, without limitation,
the reasonable fees actually incurred and disbursements of counsel
incurred in connection with any such investigation, litigation or
other proceeding; provided, however, Borrower shall not be obligated
to indemnify any Indemnitee for any of the foregoing arising out of
such Indemnitee's gross negligence or willful misconduct;
(iv) without limiting the indemnities set forth in
subsection (iii) above, indemnify each Indemnitee for any and all
reasonable expenses and costs (including without limitation, remedial,
removal, response, abatement, cleanup, investigative, closure and
monitoring costs), losses, claims (including claims for contribution
or indemnity and including the cost of investigating or defending any
claim and whether or not such claim is ultimately defeated, and
whether such claim arose before, during or after any Credit Party's
ownership, operation, possession or control of its business, property
or facilities or before, on or after the date hereof, and including
also any amounts paid incidental to any compromise or settlement by
the Indemnitee or Indemnitees to the holders of any such claim),
lawsuits, liabilities, obligations, actions, judgments, suits,
disbursements, encumbrances, liens, damages
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(including without limitation damages for contamination or destruction
of natural resources), penalties and fines of any kind or nature
whatsoever (including without limitation in all cases the reasonable
fees actually incurred, other charges and disbursements of counsel in
connection therewith) incurred, suffered or sustained by that
Indemnitee based upon, arising under or relating to Environmental Laws
based on, arising out of or relating to in whole or in part, the
existence or exercise of any rights or remedies by any Indemnitee
under this Agreement, any other Credit Document or any related
documents.
If and to the extent that the obligations of Borrower under this
Section 10.04 are unenforceable for any reason, Borrower hereby agrees
to make the maximum contribution to the payment and satisfaction of
such obligations which is permissible under applicable law.
SECTION 10.05. RIGHT OF SETOFF. In addition to and not in
limitation of all rights of offset that any Lender or other holder of a
Revolving Credit Note may have under applicable law, each Lender or other
holder of a Revolving Credit Note shall, upon the occurrence of any Event of
Default and whether or not such Lender or such holder has made any demand or
any Credit Party's obligations have matured, have the right to appropriate and
apply to the payment of any Credit Party's obligations hereunder and under the
other Credit Documents, all deposits of any Credit Party (general or special,
time or demand, provisional or final) then or thereafter held by and other
indebtedness or property then or thereafter owing by such Lender or other
holder to any Credit Party, whether or not related to this Agreement or any
transaction hereunder. Each Lender agrees to give the Borrower prompt notice
after the exercise by such Lender of the rights described in this Section
10.05, but the failure of such Lender to give such notice shall not affect the
validity of the exercise of any such right. Any amounts received by the
Lenders with respect to the exercise of any such right of offset shall be
applied as set forth in Section 3.15 unless such offset was against funds held
in a special account expressly pledged to secure other obligations of the
Borrower to such Lender.
SECTION 10.06. BENEFIT OF AGREEMENT; ASSIGNMENTS AND
PARTICIPATIONS.
(a) This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns of the
parties hereto, provided that Borrower may not assign or transfer any of its
interest hereunder without the prior written consent of the Lenders.
(b) Any Lender may make, carry or transfer Revolving
Loans at, to or for the account of, any of its branch offices or the office of
an Affiliate of such Lender.
(c) Each Lender may assign all or a portion of its
interests, rights and obligations under this Agreement (including all or a
portion of any of its Revolving Credit Commitments and the Revolving Loans at
the time owing to it and the Revolving Credit Notes held by it) to any
financial institution; provided, however, that (i) the Agent and Borrower must
give their prior written
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consent to such assignment (which consent shall not be unreasonably withheld or
delayed) unless such assignment is to an Affiliate of the assigning Lender,
(ii) the amount of the Revolving Credit Commitments of the assigning Lender
subject to each assignment (determined as of the date the assignment and
acceptance with respect to such assignment is delivered to the Agent) shall not
be less than an amount equal to $10,000,000 or greater integral multiplies
thereof, and (iii) the parties to each such assignment shall execute and
deliver to the Agent an Assignment and Acceptance, together with the Revolving
Credit Note or Revolving Credit Notes subject to such assignment and, unless
such assignment is to an Affiliate of such Lender, a processing and recordation
fee of $3,000. Borrower shall not be responsible for such processing and
recordation fee or any costs or expenses incurred by any Lender or the Agent in
connection with such assignment. From and after the effective date specified
in each Assignment and Acceptance, which effective date shall be at least five
(5) Business Days after the execution thereof, the assignee thereunder shall be
a party hereto and to the extent of the interest assigned by such Assignment
and Acceptance, have the rights and obligations of a Lender under this
Agreement. Notwithstanding the foregoing, the assigning Lender must retain
after the consummation of such Assignment and Acceptance, a minimum aggregate
amount of Revolving Credit Commitments of $5,000,000 or such lesser amount
shown on the signature page of such Lender; provided, however, no such minimum
amount shall be required with respect to any such assignment made at any time
there exists an Event of Default hereunder. Within five (5) Business Days
after receipt of the notice and the Assignment and Acceptance, Borrower, at its
own expense, shall execute and deliver to the Agent, in exchange for the
surrendered Revolving Credit Note or Revolving Credit Notes, a new Revolving
Credit Note or Revolving Credit Notes to the order of such assignee in a
principal amount equal to the applicable Revolving Credit Commitments assumed
by it pursuant to such Assignment and Acceptance and new Revolving Credit Note
or Revolving Credit Notes to the assigning Lender in the amount of its retained
Revolving Credit Commitment or Revolving Credit Commitments. Such new
Revolving Credit Note or Revolving Credit Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such surrendered
Revolving Credit Note or Revolving Credit Notes, shall be dated the date of the
surrendered Revolving Credit Note or Revolving Credit Notes which they replace,
and shall otherwise be in substantially the form attached hereto.
(d) Each Lender may, without the consent of Borrower or
the Agent, sell participations to one or more banks or other entities in all or
a portion of its rights and obligations under this Agreement (including all or
a portion of its Revolving Credit Commitments and the Revolving Loans owing to
it and the Revolving Credit Notes held by it), provided, however, that (i) no
Lender may sell a participation in its aggregate Revolving Credit Commitments
(after giving effect to any permitted assignment hereof) in an amount in excess
of fifty percent (50%) of such aggregate Revolving Credit Commitments,
provided, however, sales of participations to an Affiliate of such Lender shall
not be included in such calculation; provided, however, no such maximum amount
shall be applicable to any such participation sold at any time there exists an
Event of Default hereunder, (ii) such Lender's obligations under this Agreement
shall remain unchanged, (iii) such Lender shall remain solely responsible to
the other parties hereto for the performance of such obligations, and (iv) the
participating bank or other entity shall not be entitled to the benefit (except
through its selling Lender) of the cost protection provisions contained in
Article IV of this
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Agreement, and (v) Borrower and the Agent and other Lenders shall continue to
deal solely and directly with each Lender in connection with such Lender's
rights and obligations under this Agreement and the other Credit Documents, and
such Lender shall retain the sole right to enforce the obligations of Borrower
relating to the Revolving Loans and to approve any amendment, modification or
waiver of any provisions of this Agreement.
(e) Any Lender or participant may, in connection with the
assignment or participation or proposed assignment or participation, pursuant
to this Section, disclose to the assignee or participant or proposed assignee
or participant any information relating to Borrower or the other Consolidated
Companies furnished to such Lender by or on behalf of Borrower or any other
Consolidated Company. With respect to any disclosure of confidential,
non-public, proprietary information, such proposed assignee or participant
shall agree to use the information only for the purpose of making any necessary
credit judgments with respect to this credit facility and not to use the
information in any manner prohibited by any law, including without limitation,
the securities laws of the United States. The proposed participant or assignee
shall agree not to disclose any of such information except (i) to directors,
employees, auditors or counsel to whom it is necessary to show such
information, each of whom shall be informed of the confidential nature of the
information, (ii) in any statement or testimony pursuant to a subpoena or order
by any court, governmental body or other agency asserting jurisdiction over
such entity, or as otherwise required by law (provided prior notice is given to
Borrower and the Agent unless otherwise prohibited by the subpoena, order or
law), and (iii) upon the request or demand of any regulatory agency or
authority with proper jurisdiction. The proposed participant or assignee shall
further agree to return all documents or other written material and copies
thereof received from any Lender, the Agent or Borrower relating to such
confidential information unless otherwise properly disposed of by such entity.
(f) Any Lender may at any time assign all or any portion
of its rights in this Agreement and the Revolving Credit Notes issued to it to
a Federal Reserve Bank; provided that no such assignment shall release the
Lender from any of its obligations hereunder.
(g) If any Lender requests compensation pursuant to
Section 3.07(b), Section 3.10(a) or Section 3.16, or the obligations of any
Lender to make Eurodollar Advances, or to continue or to convert Base Rate
Advances into, Eurodollar Advances, shall be suspended pursuant to Section
3.09(b) or Section 3.10(b), then and in such event, upon request from the
Borrower delivered to such Lender and the Agent, such Lender shall assign, in
accordance with the provisions of Section 10.06(c), all of its rights and
obligations under this Agreement and the other Credit Documents to another
Lender or other financial institution selected by the Borrower and consented to
by the Agent in consideration for the payment by such assignee to the Lender of
the principal of and interest on the outstanding Revolving Loans accrued to the
date of such assignment, together with any and all other amounts owing to such
Lender under any provisions of this Agreement or the other Credit Documents
accrued to the date of such assignment, and the assumption of such Lender's
Revolving Credit Commitment.
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SECTION 10.07. GOVERNING LAW; SUBMISSION TO JURISDICTION.
(a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER AND UNDER THE REVOLVING CREDIT NOTES SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW (WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAW PRINCIPLES THEREOF) OF THE STATE OF GEORGIA.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT, THE REVOLVING CREDIT NOTES OR ANY OTHER CREDIT DOCUMENT MAY BE
BROUGHT IN THE SUPERIOR COURT OF FULTON COUNTY, GEORGIA, OR ANY OTHER COURT OF
THE STATE OF GEORGIA OR OF THE UNITED STATES OF AMERICA FOR THE NORTHERN
DISTRICT OF GEORGIA, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, BORROWER
HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. TO THE EXTENT
PERMITTED UNDER APPLICABLE LAW, THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE
TRIAL BY JURY, AND BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING,
WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.
(c) Nothing herein shall affect the right of the Agent,
any Lender, any holder of a Revolving Credit Note or any Credit Party to serve
process in any other manner permitted by law or to commence legal proceedings
or otherwise proceed against Borrower in any other jurisdiction.
SECTION 10.08. INDEPENDENT NATURE OF LENDERS' RIGHTS. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights pursuant to this Agreement and its Revolving Credit Notes, and it shall
not be necessary for any other Lender to be joined as an additional party in
any proceeding for such purpose.
SECTION 10.09. COUNTERPARTS. This Agreement may be executed
in any number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument.
SECTION 10.10. EFFECTIVENESS; SURVIVAL; SUPERSEDING FORMER
AGREEMENT.
(a) This Agreement shall become effective on the date
(the "Effective Date") on which all of the parties hereto shall have signed a
copy hereof (whether the same or different copies) and shall have delivered the
same to the Agent pursuant to Section 10.01 or, in the case of the
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Lenders, shall have given to the Agent written or telex notice (actually
received) that the same has been signed and mailed to them.
(b) The obligations of Borrower under Sections 3.07(b),
3.10, 3.12, 3.13, 3.16 and 10.04 hereof shall survive the payment in full of
the Revolving Credit Notes after the Maturity Date. All representations and
warranties made herein, in the certificates, reports, notices, and other
documents delivered pursuant to this Agreement shall survive the execution and
delivery of this Agreement, the other Credit Documents, and such other
agreements and documents, the making of the Revolving Loans hereunder, and the
execution and delivery of the Revolving Credit Notes.
(c) Former Agreement. The terms of this Agreement shall
supersede the terms of the Former Agreement as of the Closing Date and the
Former Agreement shall thereafter be of no further force or effect except that
the indemnitees set froth therein shall survive in accordance with the terms
thereof.
SECTION 10.11. SEVERABILITY. In case any provision in or
obligation under this Agreement or the other Credit Documents shall be invalid,
illegal or unenforceable, in whole or in part, in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction,
shall not in any way be affected or impaired thereby.
SECTION 10.12. INDEPENDENCE OF COVENANTS. All covenants
hereunder shall be given independent effect so that if a particular action or
condition is not permitted by any of such covenants, the fact that it would be
permitted by an exception to, or be otherwise within the limitation of, another
covenant, shall not avoid the occurrence of a Default or an Event of Default if
such action is taken or condition exists.
SECTION 10.13. CHANGE IN ACCOUNTING PRINCIPLES, FISCAL YEAR
OR TAX LAWS. If (i) any preparation of the financial statements referred to in
Section 6.07 hereafter occasioned by the promulgation of rules, regulations,
pronouncements and opinions by or required by the Financial Accounting
Standards Board or the American Institute of Certified Public Accounts (or
successors thereto or agencies with similar functions) result in a material
change in the method of calculation of financial covenants, standards or terms
found in this Agreement, (ii) there is any change in Borrower's fiscal quarter
or fiscal year which is consented to by the Required Lenders, or (iii) there is
a material change in federal tax laws which materially affects any of the
Consolidated Companies' ability to comply with the financial covenants,
standards or terms found in this Agreement, Borrower and the Required Lenders
agree to enter into negotiations in order to amend such provisions so as to
equitably reflect such changes with the desired result that the criteria for
evaluating any of the Consolidated Companies' financial condition shall be the
same after such changes as if such changes had not been made. Unless and until
such provisions have been so amended, the provisions of this Agreement shall
govern.
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SECTION 10.14. HEADINGS DESCRIPTIVE; ENTIRE AGREEMENT. The
headings of the several sections and subsections of this Agreement are inserted
for convenience only and shall not in any way affect the meaning or
construction of any provision of this Agreement. This Agreement, the other
Credit Documents, and the agreements and documents required to be delivered
pursuant to the terms of this Agreement constitute the entire agreement among
the parties hereto and thereto regarding the subject matters hereof and thereof
and supersede all prior agreements, representations and understandings related
to such subject matters.
[Signatures Set Forth On Next Pages]
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered in Atlanta, Georgia, by their duly
authorized officers as of the day and year first above written.
<TABLE>
<S> <C>
Address for Notices: FUQUA ENTERPRISES, INC.
One Atlantic Center, Suite 5000
1201 West Peachtree Street, N.W.
Atlanta, Georgia 30309 By: /s/ L. P. Klamon
Attn: Chief Financial Officer -------------------------------------
Telecopy No.: (404) 815-4529 Lawrence P. Klamon
President and Chief Executive Officer
Attest: /s/ Mildred H. Hutcheson
---------------------------------
Mildred H. Hutcheson
Secretary
[CORPORATE SEAL]
</TABLE>
[Signature Page to Amended and Restated Credit Agreement, dated as of June 28,
1996 by and among Fuqua Enterprises, Inc., SunTrust Bank, Atlanta, as Agent and
certain other financial institutions named therein.]
67
<PAGE> 74
<TABLE>
<S> <C>
Address for Notices: SUNTRUST BANK, ATLANTA,
AS AGENT
25 Park Place, N.E.
23rd Floor
Atlanta, Georgia 30303 By: /s/ R. Michael Dunlap
Attention: Michael Dunlap -----------------------------------
Title: Vice President
Telecopy No.: 404/588-8833 By: /s/ Willem-Jan O. Hattink
-----------------------------------
Title: Group Vice President
Payment Office:
25 Park Place, N.E.
23rd Floor
Atlanta, Georgia 30303
</TABLE>
[Signature Page to Amended and Restated Credit Agreement, dated as of June 28,
1996 by and among Fuqua Enterprises, Inc., SunTrust Bank, Atlanta, as Agent and
certain other financial institutions named therein.]
68
<PAGE> 75
<TABLE>
<S> <C> <C>
Address for Notices: SUNTRUST BANK, ATLANTA
25 Park Place, N.E.
23rd Floor
Atlanta, Georgia 30303 By: /s/ R. Michael Dunlap
Attention: Michael Dunlap ------------------------------
Telecopy No.: (404) 588-8833 Title: Vice President
By: /s/ Willem-Jan O. Hattink
------------------------------
Title: Group Vice President
REVOLVING CREDIT COMMITMENT: $32,500,000.00
PRO RATA SHARE OF REVOLVING
CREDIT COMMITMENTS: 32.5%
</TABLE>
[Signature Page to Amended and Restated Credit Agreement, dated as of June 28,
1996 by and among Fuqua Enterprises, Inc., SunTrust Bank, Atlanta, as Agent and
certain other financial institutions named therein.]
69
<PAGE> 76
<TABLE>
<S> <C> <C>
Address for Notices: WACHOVIA BANK OF GEORGIA, N.A.
191 Peachtree Street
29th Floor
Mail Code 3940 By: /s/ Karen H. McClain
Atlanta, Georgia 30303 ---------------------------
Attention: Karen H. McClain Title: Vice President
Telecopy No.: (404) 332-5016
REVOLVING CREDIT COMMITMENT: $27,500,000.00
PRO RATA SHARE OF REVOLVING
CREDIT COMMITMENTS: 27.5%
</TABLE>
[Signature Page to Amended and Restated Credit Agreement, dated as of June 28,
1996 by and among Fuqua Enterprises, Inc., SunTrust Bank, Atlanta, as Agent and
certain other financial institutions named therein.]
70
<PAGE> 77
<TABLE>
<S> <C> <C>
Address for Notices: FLEET BANK OF MAINE
Two Portland Square
Mail Code: MEPMP05B By: /s/ Bradford A. Hunter
Portland, ME 04101 -------------------------------
Attention: Chip Kelley Title: Senior Vice President
Telecopy No.: (207) 874-5167
REVOLVING CREDIT COMMITMENT: $22,500,000.00
PRO RATA SHARE OF REVOLVING
CREDIT COMMITMENTS: 22.5%
</TABLE>
[Signature Page to Amended and Restated Credit Agreement, dated as of June 28,
1996 by and among Fuqua Enterprises, Inc., SunTrust Bank, Atlanta, as Agent and
certain other financial institutions named therein.]
71
<PAGE> 78
<TABLE>
<S> <C> <C>
Address for Notices: FIRST UNION NATIONAL BANK OF GEORGIA
4570 Ashford Dunwoody Road
2nd Floor By: /s/ Richard Davis
Mail Code: GA1974 --------------------------------
Atlanta, Georgia 30346 Title: Vice President
Attention: Richard Davis
Telecopy No.: (404) 865-2388
REVOLVING CREDIT COMMITMENT: $17,500,000.00
PRO RATA SHARE OF REVOLVING
CREDIT COMMITMENTS: 17.5%
</TABLE>
[Signature Page to Amended and Restated Credit Agreement, dated as of June 28,
1996 by and among Fuqua Enterprises, Inc., SunTrust Bank, Atlanta, as Agent and
certain other financial institutions named therein.]
72
<PAGE> 79
SCHEDULE 1.01
INTERCOMPANY LOANS
Borrower advances funds to the following Subsidiaries as evidenced by
Intercompany Notes:
<TABLE>
<CAPTION>
SUBSIDIARY AMOUNT OF INDEBTEDNESS ESTIMATED AS OF
JUNE 30, 1996
<S> <C>
Basic American Medical Products, Inc. $ 236,000
Lumex Medical Products, Inc. $35,276,000
MUL Acquisition Corp. II $ 5,500,000
Irving Tanning Company $13,981,000
Kroy Tanning Company $ 6,500,000
</TABLE>
<PAGE> 80
SCHEDULE 5.01
ORGANIZATION AND OWNERSHIP OF SUBSIDIARIES
The jurisdiction of incorporation and the ownership of all issued and
outstanding capital stock for each Subsidiary of Borrower are as follows:
<TABLE>
<CAPTION>
Jurisdiction of Date of Percentage of
Name of Subsidiary Incorporation Incorporation Ownership
---------------------------- --------------- ------------- -------------
<S> <C> <C> <C>
Hancock-Ellsworth Tanners, Inc. Delaware 2-3-70 100%
Irving Tanning Company Delaware 3-30-62 100%
Irving Leather Company Maine 3-16-78 100%
Vista Leather International Corp. Barbados 7-18-94 100%
Kroy Tanning Company, Incorporated Delaware 2-2-65 100%
Collagen International Products Corporation New York 6-30-70 100%
Seagrave Leather Corporation Maine 10-1-79 100%
Wilton Tanning Company Maine 6-29-59 100%
Basic American Medical Products, Inc Georgia 7-30-76 100%
Lumex Medical Products, Inc. Delaware 3-7-96 100%
MUL Acquisition Corp. II Delaware 3-7-96 100%
Irving Asian Partners, Ltd. British Virgin
Islands 1-3-96 70%
</TABLE>
JOINT VENTURES:
Irving Asian Partners, Ltd. holds a 50% interest in Tan Tec
Industrial, Limited, a British Virgin Islands corporation, who in turn has a
50% interest in a joint venture in a Chinese tanning operation.
<PAGE> 81
SCHEDULE 5.05
CERTAIN PENDING AND THREATENED LITIGATION
1. Darlene Vasconcellos, et. al. v. Lumex, Inc., et. al., United
States District Court, Eastern District of New York, Civil Action No.
CV-96-2515. This is an action brought against, among others, Lumex, Inc. and
Lumex Medical Products, Inc. ("LMPI") by a former employee and her husband.
Ms. Vasconcellos was on a medical leave of absence from her job at Lumex, Inc.
at the time it was acquired by LMPI. Ms. Vasconcellos resigned before ever
returning to work and, thus, never actually worked for LMPI. Ms. Vasconcellos
has asserted causes of action for sex discrimination, sexual harassment and
retaliation under Title VII of the Civil Rights Act of 1964 and the New York
Human Rights Law. As damages for these causes of action, she seeks lost wages
and benefits in an undetermined amount, front pay and benefits for a reasonably
period of time, compensatory and punitive damages in the amount of $300,000
(Title VII), attorney's fees and costs, and compensatory damages in the amount
of $3,000,000 (New York Human Rights Law). Ms. Vasconcellos also has asserted
causes of action for assault and intentional infliction of emotional distress
against defendants other than LMPI. Mr. Vasconcellos has asserted a cause of
action against LMPI for loss of consortium in which he seeks to recover
compensatory and punitive damages in the amount of $8,000,000. This action is
in the earliest stages of litigation. LMPI believes that some or all of the
conduct alleged, to the extent that it occurred at all, occurred prior to its
acquisition of Lumex, Inc. LMPI denies that it has acted unlawfully with
respect to Mr. and Ms. Vasconcellos and intends to defend this action
vigorously.
2. The Borrower, through its insurer, has retained counsel on
behalf of Lumex, Inc. and its subsidiary, Sci-O-Tech, Inc., in connection with
the following matter: Nelly Ruiz, as Administratrix of the Estate of Victor M.
Ruiz, Sr. a/k/a Victor M. Ruiz, Deceased, Plaintiff, against Bronx-Lebanon
Special Care Center, and Bronx-Lebanon Nursing Home, Defendant. Supreme Court
of the State of New York, County of Bronx, Index No. 21147/92; Bronx-Lebanon
Special Care Center, Inc., Third-Party Plaintiff, against Protective Alarms,
Inc., Cerberus Pyrotronics, Inc., Sci-O-Tech, Inc. and Lumex, Inc.,
Third-Party Defendants. Supreme Court of the State of New York, County of
Bronx, Third Party Index No. 78885/96. Although a final determination has not
been made, it appears that the Borrower and Lumex Medical Products, Inc. may be
required pursuant to the terms of the Asset Sale Agreement for the Lumex
transaction to indemnify Lumex, Inc. and Sci-O-Tech, Inc. in connection with
the above-referenced matter.
3. See also Schedules 5.12 and 5.20.
4. Investigations and proceedings, if any, relating to the
matters described in paragraphs 1 and 2 on Schedule 5.08.
Inclusion of items on this Schedule does not necessarily mean that the
foregoing matters constitute material litigation for other purposes (such as
disclosure under federal securities laws).
<PAGE> 82
SCHEDULE 5.08(A)
ENVIRONMENTAL COMPLIANCE
1. In connection with the acquisition of the Lumex division of
Lumex, Inc., Lumex Medical Products, Inc. acquired a parcel of real property
located at 100 Spence Street in Bay Shore, New York. Lumex, Inc. advised the
Borrower that this parcel has certain environmental issues as disclosed in Note
E to the Lumex Division December 31, 1995 financial statements, which reads as
follows:
NOTE E-ENVIRONMENTAL CONTINGENCY
In March 1994, the office of the Suffolk County District
Attorney initiated an investigation to determine whether regulated
substances had been discharged from one of the Lumex Division's Bay
Shore facilities in excess of permitted levels. An environmental
consulting firm was engaged by [Lumex, Inc.] to conduct a more
comprehensive site investigation, develop a remediation work plan and
provide a remediation cost estimate. These activities were performed
to determine the nature and extent of contaminants present on the side
and to evaluate their potential off-site extent.
At December 31, 1995, the Lumex Division had $1.33 million in
reserves for remediation costs, including additional investigation
costs as may be required. Reserves are established when it is
probable that a liability has been incurred and such costs can be
reasonably estimated. [Lumex, Inc.]'s estimates of these costs are
based upon currently enacted laws and regulations and the professional
judgment of its consultants and counsel. Where the available
information is sufficient to estimate the amount of liability that
estimate has been used. Where the information is only sufficient to
establish a range of probable liability and no point within the range
is more likely than another, the lower end of the range has been used.
[Lumex, Inc.] has not assumed any such costs will be recoverable from
third parties nor has the Parent discounted any of its cost estimates
although a portion of the remediation work plan would be performed
over a period of years.
The amounts of these liabilities are difficult to estimate due
to such factors as the extent to which remedial actions may be
required, laws and regulations change or the actual costs of
remediation differ when the final work plan is performed. The
estimate of the maximum reasonably possible liability exceeds the
current reserves by $2.2 million.
2. In January, 1996, the Borrower made the decision to
discontinue the operations of Kroy Tanning Company, Incorporated ("Kroy") and
made provision in the Borrower's December, 1995 financial statements for a
pretax loss on disposal of Kroy of $4,800,000. Included in this accrual was
$1,800,000 estimated to clean up contaminants. Based on the information now
available, the Borrower expects that the actual amounts that will be incurred
may be less than the amount previously accrued. The clean up required and
related costs will be subject to approval by
<PAGE> 83
the State of Maine's Department of Environmental Protection when Kroy files its
plan to close its East Wilton, Maine tanning facility.
3. The Town of Hartland, Maine charges Irving Tanning Company and
its subsidiaries (the "Leather Operations") for approximately 95% of the costs
to operate the water treatment facility and landfill. These expenditures
include amounts required to maintain state and Federal water quality and
environmental standards, and were approximately $1,000,000 for 1995 and are
anticipated to be approximately the same for 1996.
<PAGE> 84
SCHEDULE 5.08(B)
ENVIRONMENTAL NOTICES
See Schedule 5.08(a).
<PAGE> 85
SCHEDULE 5.08(C)
ENVIRONMENTAL PERMITS
None.
<PAGE> 86
SCHEDULE 5.11
BURDENSOME RESTRICTIONS
None.
<PAGE> 87
SCHEDULE 5.12
TAX FILINGS AND PAYMENTS
Since 1994, American Southern Insurance Company, formerly a subsidiary
of Borrower ("American Southern"), has paid premium taxes in Florida in
accordance with the methodology advocated by the Florida Department of Revenue
(the "Department") in the Florida Premium Tax Litigation described below (the
"Florida Methodology"). For the period from the acquisition of American
Southern through 1993, American Southern did not pay premium taxes in Florida
in accordance with the Florida Methodology. Consequently, to the extent that
the Department prevails in the Florida Premium Tax Litigation and American
Southern is subsequently audited, American Southern estimates that its possible
premium tax exposure in the 1991 through 1993 period is approximately $228,000
plus interest and penalties of approximately $70,000. The full amount of
approximately $298,000 is fully reserved for in American Southern's GAAP
financial statements. With respect to the portion of the 1991 tax year during
which InterRedec Southern Company, Inc. ("InterRedec") owned American Southern,
American Southern estimates that its potential premium tax liability (for which
Borrower would seek indemnification) is approximately $122,500 with related
penalties and interest of approximately $52,700 and $12,250, respectively.
These amounts are not reserved for in American Southern's GAAP financial
statements.
American Southern has a lawsuit (Civil Action No. 95-2588) pending
with the Department in Florida (the "Florida Premium Tax Litigation"). The
issue revolves around the appropriate retaliatory premium tax to be paid by
American Southern to Florida. The Department is alleging that the Georgia tax
rate is 2.25% and the local premium tax rate is 2.5% for a total rate of 4.75%.
The Florida tax rate is 2%. The Department is effectively saying that the
retaliatory rate should be 2.75%. American Southern's major argument is that
in Georgia there is an investment offset available to all companies that can
reduce the effective Georgia rate from 2.25% to .5% and American Southern has
always qualified for this reduction. With a Georgia rate of .5% and a local
premium tax of 2.5%, the total Georgia tax is 3% compared to Florida's 2% for a
retaliatory rate of 1%.
The amount of tax in dispute is approximately $839,999 for the years
1985 through 1990. Penalties and interest with respect to the disputed tax
amount are approximately $748,000 and $86,700, respectively. If the suit is
lost, Borrower intends to seek indemnification from InterRedec, the owner of
American Southern during the period from 1985 to 1990.
In 1993, this suit was tried and American Southern won. In 1994, the
Florida legislature passed a law which was intended to retroactively change the
way the retaliatory tax was calculated. The Department then asked the trial
judge to rehear the case in light of the new Florida law. The case was heard
in November 1994 and in July 1995 the judge ruled for the Department. American
Southern then appealed to the state's District Court of Appeals which ruled in
the Department's favor. American Southern has appealed this ruling to the
Florida Supreme Court. Acceptance of such appeal is discretionary by such
Supreme Court which has not yet indicated if it will accept the appeal.
<PAGE> 88
On December 31, 1995 the Borrower sold its interest in American
Southern to Atlantic American Corporation. Under the terms of the applicable
sale agreement, the Borrower must indemnify Atlantic American Corporation and
American Southern for losses related to the above matter.
<PAGE> 89
SCHEDULE 5.15
EMPLOYEE BENEFIT MATTERS
The following is a list of all of the Plans of Borrower, none of which (other
than the Plan described in number 4) is subject to Title IV of ERISA:
1. American Southern Insurance Company Retirement Plan. On behalf of
employees who are 21 years of age or older and have been employed for
at least one year, American Southern contributes to an employer funded
defined benefit plan. Normal retirement age under the plan is age 65.
Borrower sold its interest in American Southern on December 31, 1995.
<PAGE> 90
SCHEDULE 5.16
PATENT, TRADEMARK, LICENSE AND
OTHER INTELLECTUAL PROPERTY MATTERS
None.
<PAGE> 91
SCHEDULE 5.17
OWNERSHIP OF PROPERTIES
None.
<PAGE> 92
SCHEDULE 5.20
LABOR AND EMPLOYMENT MATTERS
1. The National Labor Relations Board filed an unfair labor
practice complaint against Lumex Medical Products, Inc. alleging that Lumex
Medical Products, Inc., as a successor to Lumex, Inc., created some unfair
labor practices in connection with a union election that took place in October
1995, a date prior to the Borrower's acquisition of certain assets of the Lumex
Division of Lumex, Inc. It is difficult or impossible to assess any monetary
amount involved, but the union is seeking to get a new union election out of
this unfair labor practice procedure. A hearing was scheduled for June 20,
1996, but that hearing date was indefinately postponed because the union filed
more charges the exact nature of which is not know to the Borrower at this
time. This is an administrative proceeding before the National Labor Relations
Board.
2. See also paragraph 1 of Schedule 5.05.
<PAGE> 93
SCHEDULE 5.21
DIVIDEND RESTRICTIONS
None, other than restrictions contained in the Credit Documents.
<PAGE> 94
SCHEDULE 6.08
FINANCIAL COVENANT CALCULATIONS - FIRST QUARTER 1996
<TABLE>
<CAPTION>
Debt to Capital Ratio ($ amounts in thousands) March 31, 1996
--------------
<S> <C> <C> <C>
a. Funded Debt (including the current a. $24,083
portion thereof of Consolidated
Companies)
b. Funded Debt of Other Persons Guaranteed b. 0
by a Consolidated Company
c. Required Stock Redemptions in next 12 c. 0
months
d. Debt outstanding pursuant to SunTrust d. 0
Line of Credit
e. Adjusted Funded Debt (a+b+c+d) e. $24,083
f. Net Worth of Borrower less Treasury f. $83,362
Stock
g. Total Capitalization (e+f) g. $107,445
h. Leverage Ratio (e/g) h. .224 : 1.00
i. Maximum Leverage Ratio i. .6 : 1.00
j. Default Indicated? j. No
</TABLE>
<TABLE>
<CAPTION>
Interest Coverage Ratio 1995 1996 Total
---------------------------------- ------ -----------
Preceding 4
Q2 Q3 Q4 Q1 Quarters
------ ------ ------ ------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
a. Consolidated EBIT a. $3,783 $3,193 $4,077 $1,933 $12,986
b. Consolidated Interest Expense b. $ 737 $ 658 $ 612 $ 658 $ 2,665
c. Ratio of a to b c. 4.87 : 1.00
d. Minimum Ratio d. 2.0 : 1.00
e. Default Indicated? e. No
</TABLE>
<TABLE>
<CAPTION>
Cash Flow Coverage Ratio 1995 1996 Total
---------------------------------- ------ -----------
Preceding 4
Q3 Q4 Q1 Q2 Quarters
------ ------ ------ ------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
a. Consolidated EBIT a. $3,783 $3,193 $4077 $1933 $12,986
b. Depreciation and Amortization b. $ 581 $ 552 $ 625 $ 794 $ 2,552
c. Consolidated EBITDA (a+b) c. $15,538
d. Consolidate Funded Debt d. $24,083
e. Ratio of d/c e. 1.55 : 1.00
f. Maximum Ratio f. 4.0 : 1.00
g. Default Maximum Indicated? g. No
</TABLE>
<PAGE> 95
SCHEDULE 7.01
OUTSTANDING INDEBTEDNESS
<TABLE>
<CAPTION>
Estimated Principal Amount
---------------------------
Outstanding June 30, 1996
-------------------------
<S> <C> <C>
- Non-negotiable Promissory Note, dated
October 11, 1991, between Borrower and
InterRedec Southern Company, Inc.,
which note has been assigned by
InterRedec Southern Company, Inc. to $11,662,000
the Board of Governors of the Federal
Reserve System.
- Letter of Credit issued by First Union
National Bank of Georgia for the
benefit of InterRedec Southern Company
Inc. (Credit enhancement of above $11,803,914.56
note).
- Industrial Revenue Bonds and Related
Agreements between Town of Hartland,
Maine, and Irving Tanning Company
- Maturing October 1, 2004 $ 1,159,000
- Maturing November 1, 1997 $ 123,500
- Maturing March 1, 2001 $ 218,500
- Indebtedness of Basic American Medical
Products, Inc. under Term Loan
Agreement dated as of January 18, 1996
among Basic American Medical Products,
Inc., the Borrower as guarantor, and $ 1,714,000
Suntrust Bank, Atlanta.
- Note payable dated May, 1996 between
Irving Tanning Company and Irving Asian
Partners, Ltd. $ 1,217,000
</TABLE>
<PAGE> 96
<TABLE>
<S> <C> <C>
- Term Loan and Step-Down Revolving Line
of Credit Agreement, dated as of April
1994, between Bank One, Fond du Lac and $1,179,000
Basic American Medical Products, Inc.
- Purchase Money Promissory Note, dated
October 20, 1996 between Basic American
Medical Products, Inc. and Super
Sagless, Inc. and guaranteed by Fuqua $ 688,000
Enterprises, Inc. (liability under such
guarantee is limited to $1,400,000)
- Letter of Credit issued by SunTrust
Bank, Atlanta for the benefit of
Liberty Mutual Insurance Company for $ 228,300
the account of Fuqua Enterprises, Inc.
</TABLE>
<PAGE> 97
SCHEDULE 7.02
EXISTING LIENS
<TABLE>
<CAPTION>
Secured Party Security
- ------------- --------
<S> <C>
Town of Hartland, Maine and holders of Water treatment facilities and waste disposal
industrial revenue and general obligation bonds, facilities
existing lien holders and related security of
bonds when such entity is acquired by Borrower
SunTrust Bank, Atlanta Certain real property and related equipment of
Basic American Medical Products, Inc.
Banc One, Fond du Lac Certain real property of Basic American Medical
Products, Inc. located in Fond du Lac, Wisconsin
</TABLE>
<PAGE> 98
SCHEDULE 7.05
EXISTING INVESTMENTS
See attached Exhibits A, B, C and D for the statements at May 31, 1996
of Wachovia, Interstate/Johnson Lane, Dreyfus and SunTrust Bank, Atlanta,
respectively, for investments held by Borrower. The Borrower also indirectly
holds the Investment in the joint venture described on Schedule 5.01.
<PAGE> 99
Schedule 8.11
Existing Shareholders
<TABLE>
<CAPTION>
Sole Shared Sole Shared
Member of Fuqua Family Voting Power Voting Power Dispositive Power Dispositive Power Beneficially Owned
---------------------- ------------ ------------ ----------------- ----------------- ------------------
<S> <C> <C> <C> <C> <C>
J. B. Fuqua(1) 693,917 435,698 693,917 435,698 1,129,615
J. Rex Fuqua(2) 310,142 435,698 310,142 435,698 745,840
Fuqua Holdings, Inc.(3) 366,000 0 366,000 0 366,000
Fuqua Holdings - I, L.P.(4) 366,000 0 366,000 0 366,000
The Jennifer Calhoun Fuqua Trust(5) 160,843 0 160,843 0 160,843
The Lauren Brooks Fuqua Trust(6) 160,842 0 160,842 0 160,842
The J. B. Fuqua Foundation, Inc.(7) 69,698 0 69,698 0 69,698
</TABLE>
_________________
(1) J. B. Fuqua may be deemed to own beneficially (through the power to direct
the vote and disposition thereof) 1,129,615 shares of the common stock, $2.50
par value per share, of Borrower (the "Common Stock") (372,232 individually,
160,843 as trustee for The Jennifer Calhoun Fuqua Trust, 160,842 shares as
trustee for The Lauren Brooks Fuqua Trust, 69,698 as an officer and director of
The J.B. Fuqua Foundation, Inc., and 366,000 as an officer and director of
Fuqua Holdings, Inc.).
(2) J. Rex Fuqua may be deemed to own beneficially (through the power to direct
the vote and disposition thereof) 745,840 shares of the Common Stock (310,142
individually, 69,698 as an officer and director of The J.B. Fuqua Foundation,
Inc., and 366,000 as an officer and director of Fuqua Holdings, Inc.).
(3) Fuqua Holdings, Inc., the general partner of Fuqua Holdings - I, L.P., may
be deemed to own beneficially (through the power of its sole directors and
shareholders, J.B. Fuqua and J. Rex Fuqua, to direct the vote and disposition
thereof) 366,000 shares of the Common Stock.
(4) Fuqua Holdings - I, L.P., may be deemed to own beneficially (through the
power of J.B. Fuqua and J. Rex Fuqua as the sole directors and shareholders of
Fuqua Holdings, Inc., the general partner of Fuqua Holdings - I, L.P., to
direct the vote and disposition thereof) 366,000 shares of the Common Stock.
(5) The Jennifer Calhoun Fuqua Trust may be deemed to own beneficially (through
the power of its sole trustee, J.B. Fuqua, to direct the vote and disposition
thereof) 160,843 shares of the Common Stock.
(6) The Lauren Brooks Fuqua Trust may be deemed to own beneficially (through
the power of its sole trustee, J.B. Fuqua, to direct the vote and disposition
thereof) 160,842 shares of the Common Stock.
(7) The J.B. Fuqua Foundation, Inc. may be deemed to own beneficially (through
the power of its directors and officers to direct the vote thereof) 69,698
shares of the Common Stock.
<PAGE> 100
EXHIBIT A
PAGE: 2
<TABLE>
<CAPTION>
SUMMARY OF ACCOUNT
05-31-96
FUQUA ENTERPRISES, INC. ACCOUNT NUMBER:
- -----------------------------------------------------------------------------------------------------------------------------------
ESTIMATED CURRENT
TOTAL TAX MARKET ANNUAL YIELD
DESCRIPTION OF ASSETS COST VALUE INCOME (%)
--------------------- --------- ------ -------- -------
<S> <C> <C> <C> <C>
COMMON STOCKS $ 2,523,568.00 $ 2,388,300.00 $ 201,725 8.4
PREFERRED STOCKS 230,000.00 230,000.00 16,560 7.2
BONDS 19,962,500.00 19,646,800.00 1,O25,000 5.2
SHORT-TERM RESERVES AND CASH 169,821,05 169,821,05 8,403 4.9
-------------- ------------- --------- ---
TOTAL VALUE OF ACCOUNT $22,885,889.05 $ 22,434,921.05 $ 1,251,688 5.6
============= ============= ========= ===
</TABLE>
THE VALUES USED IN THIS REPORT ARE AS OF THE CLOSE OF BUSINESS ON THE REPORT
DATE OR THE MOST REPRESENTATIVE VALUE AVAILABLE ON THAT DATE.
<PAGE> 101
PAGE: 3
<TABLE>
<CAPTION>
LIST OF ASSETS
FUQUA ENTERPRISES, INC. 05-31-96 ACCOUNT NUMBER:
- ------------------------------------------------------------------------------------------------------------------------------------
SHARES ESTIMATED CURRENT
UNITS, OR TOTAL TAX MARKET ANNUAL YIELD
PAR VALUE DESCRIPTION COST VALUE INCOME %
- --------- ----------- ---------- --------- ---------- --------
<S> <C> <C> <C> <C> <C>
COMMON STOCKS
109,600 PREFERRED INCOME OPPORTUNITY FUND $ 1,217,568.00 $ 1,150,800.00 $ 97,325 8.5
INC
USD0.001000
100,000 PREFERED INCOME MGMT FD INC 1,306,000.00 1,237,500.00 104,400 8.4
TOTAL COMMON STOCKS $ 2,523,568.00 $ 2,388,300.00 $ 201,725 8.4
-------------- -------------- ---------- ---
PREFERRED STOCKS
9,200 TEXAS UTIL ELEC CO $ 230,000.00 $ 230,000.00 $ 16,560 7.2
DEP SHS REP 1/4 SH $7.22
CUM PFD
TOTAL PREFERRED STOCKS $ 230,000.00 $ 230,000.00 $ 16,560 7.2
-------------- -------------- ---------- ---
BONDS
20,000,000 UNITED STATES TREAS NTS $19,962,500.00 $19,646,800.00 $1,025,000 5.2
03/01/93 5.125% 02/28/1998
TOTAL BONDS $19,962,500.00 $19,646,800.00 $1,025,000 5.2
-------------- -------------- ---------- ---
SHORT-TERM RESERVES AND CASH
163,201.82 BILTMORE FDS $ 163,201.82 $ 8,103 5.0
MONEY MKT FD INSTL SH CL-A
6,038.40 BILTMORE FDS 6,038.40 300 5.0
MONEY MKT FD INSTL SH CL-A
</TABLE>
<PAGE> 102
PAGE: 4
<TABLE>
<CAPTION>
LIST OF ASSETS
FUQUA ENTERPRISES, INC. 05-31-96 ACCOUNT NUMBER:
- -----------------------------------------------------------------------------------------------------------------------------------
SHARES, ESTIMATED CURRENT
UNITS, OR TOTAL TAX MARKET ANNUAL YIELD
PAR VALUE DESCRIPTION COST VALUE INCOME (%)
- --------- ----------- --------- ------ -------- -------
<S> <C> <C> <C> <C> <C>
169,240.22 TOTAL BILTMORE FDS
MONEY MKT FD INSTL SH CL-A $ 169,240.22 $ 169,240.22 $ 8,403 5.0
CASH 580.83 580.83
TOTAL SHORT-TERM RESERVES
AND CASH $ 169,821.05 $ 169,821.05 $ 8,403 4.9
---------- ---------- -----
TOTAL VALUE OF ACCOUNT $22,885,889.05 $ 22,434,921.05 $ 1,251,688 5.6
============= ============= ========= ===
</TABLE>
THE VALUES USED IN THIS REPORT ARE AS OF THE CLOSE OF BUSINESS ON THE REPORT
DATE OR THE MOST REPRESENTATIVE VALUE AVAILABLE ON THAT DATE.
<PAGE> 103
PAGE: 5
<TABLE>
<CAPTION>
CASH SUMMARY
FUQUA ENTERPRISES, INC. 05-01-96 THROUGH 05-31-96 ACCOUNT NUMBER:
- --------------------------------------------------------------------------------------------------------------------------
AMOUNT TOTAL
------ -----
<S> <C> <C>
OPENING BALANCE 05-01-96 $ 421.91
CASH RECEIPTS
DIVIDENDS $ 8,691.23
SALES OF ASSETS
EQUITY 45,270.00
-----------
TOTAL CASH RECEIPTS 53,961.23
CASH DISBURSEMENTS
OTHER DISBURSEMENTS 4,994.90-
-----------
TOTAL CASH DISBURSEMENTS 4,994.90-
NET SHORT TERM RESERVE PURCHASES AND SALES 48,807.41-
----------
CLOSING BALANCE 05-31-96 $ 580.83
==========
</TABLE>
<PAGE> 104
PAGE: 6
<TABLE>
<CAPTION>
STATEMENT DETAIL
FUQUA ENTERPRISES, INC. 05-01-96 THROUGH 05-31-96 ACCOUNT NUMBER:
- ------------------------------------------------------------------------------------------------------------------------------------
AMOUNT TOTAL
------ -----
<S> <C> <C>
CASH RECEIPTS
DIVIDENDS
-OTHER
BILTMORE FDS
MONEY MKT FD INSTL SH CL-A
05-31-96 DIVIDEND $ 555.29
05-31-96 DIVIDEND 25.54 $ 580.83
-----------
PREFERRED INCOME OPPORTUNITY FUND
INC
USD0.01000
05-31-96 DIV $0.074000 ON 109,600 SHS 8,110.40 8,110.40
FOR PAYABLE DATE OF 05/31/96 ---------
TOTAL OTHER $8,691.23
---------
TOTAL DIVIDENDS $8,691.23
=========
SALE OF ASSETS
-SHORT TERM
BILTMORE FDS
MONEY MKT FD INSTL SH CL-A
SALES FOR PERIOD 05-01-96 THROUGH 05-31-96 (1) 4,994.90 4,994.90
---------
TOTAL SHORT TERM $4,994.90
=========
</TABLE>
<PAGE> 105
PAGE: 7
<TABLE>
<CAPTION>
STATEMENT DETAIL
FUQUA ENTERPRISES, INC. 05-01-96 THROUGH 05-31-96 ACCOUNT NUMBER:
- ----------------------------------------------------------------------------------------------------------
AMOUNT TOTAL
------ -----
<S> <C> <C>
-EQUITY
-PREFERRED
TEXAS UTIL ELEC CO
DEP SHS REP1/4 SH $7.22
CUM PFD
05-20-96 SOLD 05/15/96 1800.00 SHARES $45,270.00 $ 45,720.00
AT 25.150 ---------
TOTAL PREFERRED $ 45,270.00
---------
TOTAL EQUITY $ 45,270.00
---------
TOTAL SALE OF ASSETS $ 50,264.90
=========
TOTAL CASH RECEIPTS $ 58,956.13
=========
</TABLE>
<PAGE> 106
PAGE: 8
<TABLE>
<CAPTION>
STATEMENT DETAIL
FUQUA ENTERPRISES, INC. 05-01-96 THROUGH 05-31-96 ACCOUNT NUMBER:
- -------------------------------------------------------------------------------
AMOUNT TOTAL
<S> <C> <C>
CASH DISBURSEMENTS
PURCHASE OF ASSETS
-SHORT TERM
BILTMORE FDS
MONEY MKT FD INSTL SH CL-A
PURCHASES FOR PERIOD 05-01-96 THROUGH
05-31-96 (3) $53,802.31- $53,802.31-
----------
TOTAL SHORT TERM $53,802.31-
----------
TOTAL PURCHASE OF ASSETS $53,802.31-
==========
OTHER DISBURSEMENTS
05-23-96 WACHOVIA BANK OF GEORGIA, NA 4,994.90- 4,994.90-
COMPENSATION FOR SERVICES RENDERED ---------
DURING THE QUARTER ENDED 05/15/96
TOTAL OTHER DISBURSEMENTS $ 4,994.90-
==========
TOTAL CASH DISBURSEMENTS $58,797.21-
==========
</TABLE>
<PAGE> 107
EXHIBIT B
<TABLE>
<CAPTION>
STATEMENT OF ACCOUNT
===============================================================================================================================
Account Number: For the Period: 05/01/96 Through 05/31/96 Page 2 of 3
Federal I.D. Number: Last Statement: 04/30/96 VISTA RESOURCES, INC.
- -------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO POSITIONS
- -------------------------------------------------------------------------------------------------------------------------------
Estimated
Symbol/ Current % of Dividend/ Annual
Quantity Security Division Rating Price Value Portfolio Yield Income
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
STOCKS
1 BAKER J INC JBAK 9.625 $ 10.00 1.65 .06 $0.00
1 R G BARRY CORP-OHIO RGB 19.750 20.00 3.28 0.00
1 BROWN GROUP INC BG 17.000 17.00 2.79 1.00 1.00
1 L A GEAR INC LA 3.375 3.00 0.49 0.00
1 GENESCO INC GCO 7.625 8.00 1.31 0.00
1 ***HANSON PLC-SPONSORED ADR HAN 14.625 15.00 2.46 .98 1.00
1 IBP INC IBP 27,375 27.00 4.43 .10 0.00
1 MELVILLE CORP MES 40.625 41.00 6.72 .44 0.00
2 NIKE INC-CL B NKE 100.375 201.00 32.95 .60 1.00
1 REEBOK INTERNATIONAL LTD RBK 30.375 30.00 4.92 .30 0.00
2 STRIDE RITE CORP. SRR 9.000 18.00 2.95 .20 0.00
1 TITAN HOLDINGS, INC. TH 15.750 16.00 2.62 .30 0.00
1 TIMBERLAND CO-CL A TBL 22.750 23.00 3.77 0.00
1 WEYCO GROUP INC WEYS 39.500 40.00 6.56 .88 1.00
FORMERLY WEYENBERG SHOE MFG CO
1 WOLVERINE WORLD WIDE INC WWW 33.250 33.00 5.41 .16 0.00
TOTAL STOCKS $502.00 82.31 $4.00
- -------------------------------------------------------------------------------------------------------------------------------
OTHER SECURITIES
51,000 ESCROW ADDRESSOGRAPH ++ 0.00 $0.00
TOTAL OTHER SECURITIES $0.00 0.00 $0.00
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL PRICED SECURITIES $502.00 82.31 $4.00
- -------------------------------------------------------------------------------------------------------------------------------
++ Prices for some securities may not be available. For an actual quote, please contact your Financial Consultant
</TABLE>
<PAGE> 108
EXHIBIT C
ACCOUNT STATEMENT
05/01/96 through 05/31/96 Page -----
1 of 1 -----
Cash Management Plus-Class B -----
Dealer:
Rep: 17439 NCS:
FUQUA ENTERPRISES
1201 W PEACHTREE ST NW STE 5000
ATLANTA GA 30309-3400
ACCOUNT AT-A-GLANCE
<TABLE>
<CAPTION>
Personal account as of 05/31/96 Dividend/distribution summary This period Year-to-date
----------------------------------- --------------------------------------------------------------------
<S> <C> <C> <C> <C>
Total Market Value $158,169.98 Dividend income $670.74 $27,551.54
</TABLE>
ACCOUNT ACTIVITY
-----------------------------------
CASH MANAGEMENT PLUS-CASH B
Account number:
Customer number:
<TABLE>
<CAPTION>
Trade Shares this Total share
date Description Dollar amount Share price transaction owned
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Market Value as of 05/01/96 $157,499.24 $1.00 157,499.240
05/31/96 Dividend reinvested 670.74 1.00 670.740 158,169.980
Market Value as of 05/31/96 $158,169.98 1.00 158,169.980
</TABLE>
INVESTMENT SLIP Cash Management Plus-Class B
Fund Account #:
Customer number:
Dealer:
Rep:
FUQUA ENTERPRISES
1201 W PEACHTREE ST., NW STE 5000
ATLANTA GA 30309-3400
Minimum investment: $100.00
Amount enclosed: [$ ]
X
-------------------------------------
If your address is incorrect, please
make any changes above, have all
registered owners sign and return this
slip. Do not write in the white area
below.
<PAGE> 109
EXHIBIT D
PAGE 1
OVERNIGHT REPO AGREEMENTS
MONTHLY ACTIVITY STATEMENT
STATEMENT PERIOD 05/01/96 - 05/31/96
FUQUA ENTERPRISES INC
ONE ATLANTIC CENTER STE 5000
1201 W PEACHTREE ST NW
ATLANTA GA 30309-3400
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
STATEMENT SUMMARY
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INTEREST PAID 9,381.62 INTEREST PAID YEAR TO DATE 24,846.44
INTEREST EARNED 9,566.39 INTEREST EARNED YEAR TO DATE 25,284.76
AVERAGE BALANCE 2,511,709.67 AVERAGE BALANCE YEAR TO DATE 3,535,913.78
AVERAGE MONTHLY YIELD 4.423% AVERAGE YIELD YEAR TO DATE 4.438%
CUSTOMER NUMBER CUSTOMER TAX ID NUMBER
- ---------------------------------------------------------------------------------------------------------
INTEREST PAYABLE 438.32
- ---------------------------------------------------------------------------------------------------------
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
MONTHLY ACTIVITY
- ---------------------------------------------------------------------------------------------------------
TRANSACTION TRANSACTION INTEREST
DATE AMOUNT NET CHANGE BALANCE RATE EARNED
<S> <C> <C> <C> <C>
4-30-96 2,015,000.00
5-01-96 893,000.00 2,908,000.00 4.4500000 359.46
5-02-96 96,000.00- 2,812,000.00 4.4500000 347.59
5-03-96 82,000.00- 2,730,000.00 4.4000000 1,001.00
5-06-96 298,000.00- 2,432,000.00 4.4500000 300.62
5-07-96 100,000.00- 2,332,000.00 4.4500000 288.26
5-08-96 46,000.00- 2,286,000.00 4.5500000 288.93
5-09-96 1,104,000.00 3,390,000.00 4.4500000 419.04
5-10-96 682,000.00- 2,708,000.00 4.3750000 987.29
5-13-96 106,000.00 2,814,000.00 4.4300000 346.28
5-14-96 69,000.00- 2,745,000.00 4.4300000 337.79
5-15-96 966,000.00- 1,779,000.00 4.6000000 227.32
5-16-96 286,000.00 2,065,000.00 4.4500000 255.26
5-17-96 293,000.00- 1,772,000.00 4.3750000 646.04
5-20-96 316,000.00 2,088,000.00 4.4000000 255.20
5-21-96 436,000.00 2,524,000.00 4.3500000 304.98
5-22-96 73,000.00 2,597,000.00 4.5500000 328.23
5-23-96 343,000.00- 2,254,000.00 4.4000000 275.49
5-24-96 471,000.00- 1,783,000.00 4.3500000 861.78
5-28-96 952,000.00 2,735,000.00 4.4000000 334.28
5-29-96 1,181,000.00 3,916,000.00 4.4000000 478.62
5-30-96 40,000.00 3,956,000.00 4.4100000 484.61
5-31-96 488,000.00- 3,468,000.00 4.5500000 438.32
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
SECURITY DESCRIPTION
- ---------------------------------------------------------------------------------------------------------
TRANSACTION PAR AMOUNT MATURITY MARKET MARKET
DATE /CURR FACE COUPON DATE PRICE VALUE
<S> <C> <C> <C> <C> <C>
5-01-96 2,938,000 5.125 12-31-98 99 2,908,620.00
U S TREASURY NOTE
5-02-96 2,834,000 5.125 12-31-98 99 08/32 2,812,745.00
U S TREASURY NOTE
5-03-96 2,765,000 5.125 12-31-98 98 24/32 2,730,437.50
U S TREASURY NOTE
5-06-96 2,457,000 5.125 12-31-98 99 2,432,430.00
U S TREASURY NOTE
5-07-96 2,375,000 5.125 4-30-98 98 07/32 2,332,695.31
U S TREASURY NOTE
</TABLE>
<PAGE> 110
PAGE 2
OVERNIGHT REPO AGREEMENTS
MONTHLY ACTIVITY STATEMENT
STATEMENT PERIOD 05/01/96 - 05/31/96
FUQUA ENTERPRISES INC
ONE ATLANTIC CENTER STE 5000
1201 W PEACHTREE ST NW
ATLANTA GA 30309-3400
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
SECURITY DESCRIPTION
- ---------------------------------------------------------------------------------------------
TRANSACTION PAR AMOUNT MATURITY MARKET MARKET
DATE /CURR FACE COUPON DATE PRICE VALUE
<S> <C> <C> <C> <C> <C> <C>
5-08-96 450,000 5.125 12-31-98 98 28/32 444,937.50
U S TREASURY NOTE
5-08-96 1,830,000 5.625 1-31-98 100 20/32 1,841,437.50
U S TREASURY NOTE
5-09-96 3,425,000 5.125 12-31-98 99 3,390,750.00
U S TREASURY NOTE
5-10-96 2,612,000 5.125 12-31-98 99 04/32 2,589,145.00
U S TREASURY NOTE
5-10-96 121,000 5.125 4-30-98 98 12/32 119,033.75
U S TREASURY NOTE
5-13-96 2,836,000 5.125 12-31-98 99 08/32 2,814,730.00
U S TREASURY NOTE
5-14-96 2,759,000 5.125 12-31-98 99 16/32 2,745,205.00
U S TREASURY NOTE
5-15-96 1,760,000 5.625 1-31-98 101 04/32 1,779,800.00
U S TREASURY NOTE
5-16-96 2,045,000 5.625 1-31-98 101 2,065,450.00
U S TREASURY NOTE
5-17-96 1,755,000 5.625 1-31-98 101 1,772,550.00
U S TREASURY NOTE
5-20-96 2,065,000 5.625 1-31-98 101 04/32 2,088,231.25
U S TREASURY NOTE
5-21-96 2,496,000 5.625 1-31-98 101 04/32 2,524,080.00
U S TREASURY NOTE
5-22-96 2,634,000 5.125 4-30-98 98 20/32 2,597,782.50
U S TREASURY NOTE
5-23-96 2,283,000 5.125 4-30-98 98 24/32 2,254,462.50
U S TREASURY NOTE
5-24-96 1,764,000 5.625 1-31-98 101 04/32 1,783,845.00
U S TREASURY NOTE
5-28-96 2,767,000 5.125 4-30-98 98 28/32 2,735,871.25
U S TREASURY NOTE
5-29-96 3,961,000 5.125 4-30-98 98 28/32 3,916,438.75
U S TREASURY NOTE
5-30-96 3,983,000 5.125 12-31-98 99 11/32 3,956,861.56
U S TREASURY NOTE
5-31-96 3,491,000 5.125 12-31-98 99 11/32 3,468,090.31
U S TREASURY NOTE
- ---------------------------------------------------------------------------------------------
</TABLE>
THE FUNDS HELD PURSUANT TO THE REPURCHASE AGREEMENT ARE NOT A DEPOSIT
AND THEREFORE, NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION
<PAGE> 111
EXHIBIT A
FORM OF
REVOLVING CREDIT NOTE
U.S. $________________ June 28, 1996
Atlanta, Georgia
FOR VALUE RECEIVED, the undersigned FUQUA ENTERPRISES, INC., a
Delaware corporation (herein called the "Borrower"), hereby promises to pay to
the order of __________________, a ___________________________ (herein,
together with any subsequent holder hereof, called the "Lender"), for the
account of its applicable Lending Office, the lesser of (i) the principal sum
of _____________________________________ AND NO/100 UNITED STATES DOLLARS
($_______________) and (ii) the outstanding principal amount of the Advances
made by the Lender to the Borrower as Revolving Loans pursuant to the terms of
the Credit Agreement referred to below on the Maturity Date (as defined in the
Credit Agreement referred to below). The Borrower likewise promises to pay
interest on the outstanding principal amount of each such Advance, at such
interest rates, payable at such times, and computed in such manner, as are
specified for such Advance in the Credit Agreement in strict accordance with
the terms thereof.
The Lender shall record all Advances made pursuant to its Revolving
Credit Commitment under the Credit Agreement and all payments of principal of
such Advances and, prior to any transfer hereof, shall endorse such Advances
and payments on the schedule annexed hereto and made a part hereof, or on any
continuation thereof which shall be attached hereto and made a part hereof or
on the books and records of the Lender, which endorsement shall constitute
prima facie evidence of the accuracy of the information so endorsed; provided,
however, that delay or failure of the Lender to make any such endorsement or
recordation shall not affect the obligations of the Borrower hereunder or under
the Credit Agreement with respect to the Advances evidenced hereby.
Any principal or, to the extent not prohibited by applicable law,
interest due under this Revolving Credit Note that is not paid on the due date
therefor, whether on the Maturity Date, whether or not resulting from the
acceleration of maturity upon the occurrence of an Event of Default, shall bear
interest from the date due to payment in full at the rate as provided in
Section 3.03(b) of the Credit Agreement.
All payments of principal and interest shall be made in lawful money
of the United States of America in immediately available funds at the Payment
Office of the Agent specified in the Credit Agreement.
<PAGE> 112
This Revolving Credit Note is issued pursuant to, and is one of the
Revolving Credit Notes referred to in, that certain Amended and Restated Credit
Agreement dated as of June 28, 1996 among the Borrower, SunTrust Bank, Atlanta,
individually and as Agent, and the other lenders set forth on the signature
pages thereof (as the same may hereafter be amended, modified or supplemented
from time to time, the "Credit Agreement") and each assignee thereof becoming a
"Lender" as provided therein, and the Lender is and shall be entitled to all
benefits thereof and all Security Documents executed and delivered to the
Lenders or the Agent in connection therewith. Terms defined in the Credit
Agreement are used herein with the same meanings. The Credit Agreement, among
other things, contains provisions for acceleration of the maturity hereof upon
the happening of certain stated events.
The Borrower agrees to make payments of principal on the Advances
outstanding hereunder as Revolving Loans on the dates and in the amounts
specified in the Credit Agreement for such Advances in strict accordance with
the terms thereof.
This Revolving Credit Note may be prepaid in whole or in part in
accordance with the terms and conditions of the Credit Agreement.
In case an Event of Default shall occur and be continuing, the
principal of and all accrued interest on this Revolving Credit Note may
automatically become, or be declared, due and payable in the manner and with
the effect provided in the Credit Agreement. The Borrower agrees to pay, and
save the Lender harmless against any liability for the payment of, all
reasonable out-of-pocket costs and expenses, including reasonable attorneys'
fees actually incurred, arising in connection with the enforcement by the
Lender of any of its rights under this Revolving Credit Note or the Credit
Agreement.
THIS REVOLVING CREDIT NOTE HAS BEEN EXECUTED AND DELIVERED IN GEORGIA
AND THE RIGHTS AND OBLIGATIONS OF THE LENDER AND THE BORROWER HEREUNDER SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS (WITHOUT GIVING EFFECT
TO THE CONFLICT OF LAW PRINCIPLES THEREOF) OF THE STATE OF GEORGIA.
The Borrower expressly waives any presentment, demand, protest or
notice in connection with this Revolving Credit Note, now or hereafter required
by applicable law. TIME IS OF THE ESSENCE OF THIS REVOLVING CREDIT NOTE.
-2-
<PAGE> 113
IN WITNESS WHEREOF, the Borrower has caused this Revolving Credit Note
to be executed and delivered under seal by its duly authorized officers as of
the date first above written.
FUQUA ENTERPRISES, INC.
By:
------------------------------
Name:
Title:
Attest:
------------------------------
Name:
Title:
[CORPORATE SEAL]
-3-
<PAGE> 114
Revolving Credit Note (cont'd)
ADVANCES AND PAYMENTS OF PRINCIPAL
<TABLE>
<CAPTION>
Last Day of
Amount of Applicable Notation Made
Date Amount of Advance Interest Rate Principal Prepaid Interest Period By
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
</TABLE>
-4-
<PAGE> 115
EXHIBIT B
NOTICE OF BORROWING
SunTrust Bank, Atlanta, as Agent
for the Lenders parties to the
Credit Agreement referenced below
25 Park Place
23rd Floor
Atlanta, Georgia 30303
[Date]
Re: FUQUA ENTERPRISES, INC.
Ladies and Gentlemen:
The undersigned, FUQUA ENTERPRISES, INC., a Delaware
corporation (the "Borrower"), refers to that certain Amended and Restated
Credit Agreement, dated as of June 28, 1996 (the "Credit Agreement"; the terms
defined therein being used herein as therein defined), among the undersigned,
the lenders (the "Lenders") from time to time parties thereto and SunTrust
Bank, Atlanta, as Agent, and hereby gives you irrevocable notice pursuant to
Section 3.01(a) of the Credit Agreement that the undersigned hereby requests a
Borrowing under the Credit Agreement (the "Proposed Borrowing"), and in that
connection sets forth below the information relating to such Borrowing as
required by Section 3.01(a) of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is
___________ , 19__.
(ii) The Proposed Borrowing shall be comprised of [Base
Rate Advances] [Eurodollar Advances].(1)
(iii) The amount of the Proposed Borrowing is
$_____________________.
[(iv) The Interest Period for the Proposed Borrowing if
comprised of Eurodollar Advances is _______
month[s].](2)
__________________________________
(1) Total number of outstanding Borrowings may not exceed
six.
(2) Not applicable if the Proposed Borrowing is to be
comprised of Base Rate Advances.
<PAGE> 116
The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the Proposed Borrowing
before and after giving effect thereto:
(a) there exists no Default or Event of Default;
(b) all representations and warranties of Borrower
contained in the Credit Agreement are true and correct in all material
respects with the same effect as though such representations and
warranties had been made on and as of the date of the Proposed
Borrowing (except to the extent such representations and warranties
specifically relate to an earlier date in which case they shall be
true and correct as of such date);
(c) since the date of the most recent financial
statements of the Consolidated Companies described in Section 5.14 of
the Credit Agreement, there has occurred no change which has had or
could reasonably be expected to have a Materially Adverse Effect
(whether or not any notice with respect to such change has been
furnished to the Lenders pursuant to Section 6.07 of the Credit
Agreement);
(d) there is no action or proceeding instituted or
pending before any court or other governmental authority or, to the
knowledge of Borrower, threatened (i) which reasonably could be
expected to have a Materially Adverse Effect, or (ii) seeking to
prohibit or restrict one or more Credit Party's ownership or operation
of any portion of its business or assets, or to compel one or more
Credit Party to dispose of or hold separate all or any portion of its
businesses or assets, where such portion or portions of such
business(es) or assets, as the case may be, constitute a material
portion of the total businesses or assets of the Consolidated
Companies taken as a whole; and
(e) the Proposed Borrowing and the use of proceeds
thereof shall not contravene, violate or conflict with, or involve the
Agent or any Lender in a violation of, any law, rule, injunction, or
regulation, or determination of any court of law or other governmental
authority applicable to Borrower.
Very truly yours,
FUQUA ENTERPRISES, INC.
By:
------------------------------
Name:
Title:
<PAGE> 117
EXHIBIT C
FORM OF
NOTICE OF CONTINUATION/CONVERSION
SunTrust Bank, Atlanta, as Agent
for the Lenders parties to the
Credit Agreement referenced below
25 Park Place
23rd Floor
Atlanta, Georgia 30303
[Date]
Re: FUQUA ENTERPRISES, INC.
Ladies and Gentlemen:
The undersigned, FUQUA ENTERPRISES, INC., a Delaware
corporation (the "Borrower"), refers to that certain Amended and Restated
Credit Agreement, dated as of June 28, 1996 (the "Credit Agreement"; the terms
defined therein being used herein as therein defined), among the undersigned,
the lenders (the "Lenders") from time to time parties thereto and SunTrust
Bank, Atlanta, as Agent, and hereby gives you irrevocable notice pursuant to
Section 3.01(b) of the Credit Agreement that the undersigned hereby requests
the [conversion] [continuation] of a Borrowing under the Credit Agreement as
specified below in accordance with Section 3.01(b) of the Credit Agreement:
[The Borrower hereby requests the conversion of a
Borrowing comprised of Base Rate Advances to a Borrowing comprised of
Eurodollar Advances, as follows:
(i) the Business Day of the proposed conversion
is __________, 19__.
(ii) the amount of the Borrowing is $_________.
(iii) the Interest Period applicable to the
Eurodollar Advances upon such conversion shall be ____
month(s).]
[The Borrower hereby requests the conversion of a Borrowing
comprised of Eurodollar Advances to a Borrowing comprised of Base Rate
Advances, as follows:
(i) the Business Day of the proposed conversion,
which shall be the
<PAGE> 118
last day of the current Interest Period applicable to the
Borrowing to be converted, is ________, 19___.
(ii) the amount of the Borrowing to be
converted is $__________________.]
[The Borrower hereby requests the continuation of a
Borrowing comprised of Eurodollar Advances for an additional Interest
Period, as follows:
(i) the Business Day of the proposed
continuation, which shall be the last day of the current
Interest Period applicable to the Borrowing to be continued,
is ________, 19 __.
(ii) the amount of the Borrowing to
be continued is $_____________________ .
(iii) the Interest Period applicable to the
Eurodollar Advances upon such continuation shall be __________
month(s).]
The undersigned hereby certifies that the following statement
is true on the date hereof, and will be true on the date of the proposed
continuation or conversion:
No Default or Event of Default exists or shall result from
such proposed continuation or conversion.](1)
Very truly yours,
FUQUA ENTERPRISES, INC.
By:
-------------------------------
Name:
Title:
__________________________________
(1) Applicable only upon the conversion to, or
continuation of, a Borrowing comprised of Eurodollar
Advances.
<PAGE> 119
EXHIBIT D
CLOSING CERTIFICATE
The undersigned, being the _____________________ of FUQUA ENTERPRISES,
INC., a Delaware corporation (the "Borrower"), hereby gives this certificate to
induce SUNTRUST BANK, ATLANTA, a Georgia banking corporation, and each of the
other lenders named on the signature pages to the Credit Agreement defined
below (collectively referred to as the "Lenders"), SunTrust Bank, Atlanta, as
agent for itself and the other Lenders (in such capacity, the "Agent"), to
consummate certain financial accommodations with the Borrower pursuant to the
terms of the Credit Agreement dated as of even date herewith (the "Credit
Agreement"). Capitalized terms used herein and not defined herein have the
same meanings assigned to them in the Credit Agreement:
The undersigned hereby certifies to the Agent and the Lenders that:
1. In his/her aforesaid capacity as the _________________ of the
Borrower, [s]he has knowledge of the business and financial affairs of the
Borrower sufficient to issue this certificate and is authorized and empowered
to issue this certificate for and on behalf of the Borrower.
2. All representations and warranties contained in the Credit Agreement
are true and correct on and as of the date hereof.
3. After giving effect to the Loans to be made to the Borrower pursuant
to the Credit Agreement on the date hereof, no Default or Event of Default has
occurred and is continuing.
4. Since the date of the audited financial statements of the Consolidated
Companies described in Section 5.14 of the Credit Agreement, there has been no
change which has had or could reasonably be expected to have a Materially
Adverse Effect.
5. Except as may be described on Schedule 5.05 of the Credit Agreement,
no action or proceeding has been instituted or is pending before any court or
other governmental authority, or, to the knowledge of the Borrower, threatened
(i) which reasonably could be expected to have a Materially Adverse Effect, or
(ii) seeking to prohibit or restrict one or more Credit Party's ownership or
operation of any portion of its businesses or assets, where such portion or
portions of such businesses or assets, as the case may be, constitute a
material portion of the total businesses or assets of the Consolidated
Companies, taken as a whole.
6. The Advances to be made on the date hereof are being used solely for
the purposes provided in the Credit Agreement, and such Advances and use of
proceeds thereof will not
<PAGE> 120
contravene, violate or conflict with, or involve the Agent or any Lender in a
violation of, any law, rule, injunction, or regulation, or determination of any
court of law or other governmental authority, applicable to the Borrower.
7. Based upon the Agent's representation that the information provided
pursuant to Sections 4.01(k) through (n) is satisfactory, the conditions
precedent set forth in Sections 4.01 and 4.02 of the Credit Agreement have been
or will be satisfied (or have been waived pursuant to the terms of the Credit
Agreement) prior to or concurrently with the making of the Revolving Loans
under the Credit Agreement on the date hereof.
8. The execution, delivery and performance by the Credit Parties of the
Credit Documents will not violate any Requirement of Law or cause a breach or
default under any of their respective Contractual Obligations.
9. Each of the Credit Parties has the corporate power and authority to
make, deliver and perform the Credit Documents to which it is a party and has
taken all necessary corporate action to authorize the execution, delivery and
performance of such Credit Documents. No consents or authorization of, or
filing with, any Person (including, without limitation, any governmental
authority), is required in connection with the execution, delivery or
performance by any Credit Party, or the validity or enforceability against any
Credit Party, of the Credit Documents, other than such consents, authorizations
or filings which have been made or obtained.
IN WITNESS WHEREOF, the undersigned has executed this certificate
solely in his/her aforesaid capacity as of this ____ day of June, 1996.
---------------------------------------
By:
Title:
<PAGE> 121
EXHIBIT E
FORM OF OPINION OF ALSTON & BIRD
June 28, 1996
To: Each of the Lenders party to the
Credit Agreement referenced below
and each assignee thereof that
becomes a "Lender" as provided
therein and SunTrust Bank,
Atlanta, as Agent
Re: Amended and Restated Credit Agreement dated as of June 28,
1996, by and among Fuqua Enterprises, Inc., each of the
Lenders listed on the signature pages thereto and SunTrust
Bank, Atlanta, as Agent thereunder (the "Credit Agreement")
Ladies and Gentlemen:
This opinion is furnished pursuant to Section 4.01 of the Credit
Agreement. Terms used herein which are defined in the Credit Agreement shall
have the respective meanings set forth or referred to in the Credit Agreement,
unless otherwise defined herein.
We have acted as counsel to Fuqua Enterprises, Inc., a Delaware
corporation (the "Company"), Irving Tanning Company, a Delaware corporation
("Irving"), Kroy Tanning Company, Incorporated, a Delaware corporation
("Kroy"), Basic American Medical Products, Inc., a Georgia corporation
("Basic"), Lumex Medical Products, Inc., a Delaware corporation ("Lumex") and
MUL Acquisition Corp. II ("MUL"; each of Kroy, Irving, Basic, Lumex and MUL may
be referred to herein as a "Subsidiary", and the Company and the Subsidiaries
may be collectively referred to herein as the "Credit Parties"), in connection
with the preparation, negotiation, execution and delivery of the following
documents (collectively, the "Credit Documents"):
1. The Credit Agreement;
2. The Revolving Credit Notes;
3. The Note Assignment; and
4. The other instruments, documents, certificates, agreements and
writings executed and delivered by the Credit Parties in
connection with the closing of the Credit Agreement.
<PAGE> 122
June 28, 1996
Page 2
In connection with this opinion, we have examined and relied on the
executed originals of the Credit Documents and the following certificates,
instruments and documents relating to the Credit Parties:
1. Officer's Certificate of the Chief Financial Officer
of the Company, a copy of which is attached hereto as Exhibit A-1;
2. Officer's Certificate of the Assistant Treasurer of
Irving, a copy of which is attached hereto as Exhibit A-2;
3. Officer's Certificate of the Assistant Treasurer of
Kroy, a copy of which is attached hereto as Exhibit A-3;
4. Officer's Certificate of the Treasurer of Basic, a
copy of which is attached hereto as Exhibit A-4;
5. Officer's Certificate of the Vice President and
Treasurer of Lumex, a copy of which is attached hereto as Exhibit A-5;
6. Officer's Certificate of the Vice President and
Treasurer of MUL, a copy of which is attached hereto as Exhibit A-6;
7. Certificates of the Secretaries of State or other
appropriate governmental agency of (a) the state of the Company's
incorporation regarding its existence and good standing and (b) the
states listed on Exhibit B attached hereto regarding the Company's
qualification to do business and good standing in those states;
8. Certificates of the Secretaries of State or other
appropriate governmental agency of (a) the respective state of each
Subsidiary's incorporation regarding its existence and good standing
and (b) the states listed on Exhibit B attached hereto regarding such
Subsidiary's qualification to do business and good standing in those
states; and
9. The documents described on Exhibit C attached hereto
(collectively, the "Listed Contractual Obligations").
We have also made such investigations of law and fact as we have
deemed necessary as the basis for the opinions expressed herein.
Whenever our opinion herein with respect to the existence or absence
of facts is indicated to be based on our knowledge or awareness, it is intended
to signify that during the course of our representation of the Credit Parties
as herein described, no information has come to the attention of Paul M.
Cushing, Bryan E. Davis, Richard W. Grice,
<PAGE> 123
June 28, 1996
Page 3
William S. Ortwein or Clare H. Draper, IV which would give us actual knowledge
of the existence or absence of such facts.
We have assumed the genuineness of all signatures (other than those on
behalf of the Credit Parties on the Credit Documents) on, and authenticity of,
all documents submitted to us as originals and the conformity to original
documents of all documents submitted to us as copies.
With respect to any element of mutuality which may be required in
order to support the enforceability of the Credit Documents, we have assumed
that the Lenders and the Agent have all requisite power and authority to enter
into and perform their respective obligations under the Credit Agreement and
the other Credit Documents to which they are parties, that the Credit Agreement
and such other Credit Documents have been duly authorized, executed and
delivered by the Lenders and the Agent, and that the Credit Agreement and such
other Credit Documents constitute the legal, valid and binding obligations of
the Lenders and the Agent. Further, to the extent applicable law requires that
the Lenders or Agent act in accordance with duties of good faith and fair
dealing, in a commercially reasonable manner, or otherwise in compliance with
applicable legal requirements (including, without limitation, federal and state
securities laws) in exercising their respective rights and remedies under the
Credit Documents, we have assumed that the Lenders and Agent will fully comply
with such legal requirements, notwithstanding any provisions of the Credit
Documents that purport to grant the Lenders or Agent the right to act or fail
to act in a manner contrary to such legal requirements, or based on its sole
judgment or in its sole discretion or provisions of similar import.
With respect to the opinions expressed in paragraph 1(c) below
regarding the qualification and good standing of the Credit Parties in certain
jurisdictions, such opinions are based solely upon certificates provided by
agencies of those states described in items 7 and 8 above, copies of which have
been delivered to you at the closing of the Credit Agreement, and such opinions
are limited to the meaning ascribed to such certificates by each applicable
state agency.
Based on the foregoing, and subject to the qualifications and
assumptions contained herein, we are of the opinion that:
1. Each of the Credit Parties (a) is validly existing as a
corporation and in good standing under the laws of its state of incorporation,
(b) has the corporate power and authority to own and operate its properties and
to conduct its business as now conducted and (c) is qualified as a foreign
corporation in, and is in good standing under the laws of, the jurisdictions
set forth on Exhibit B attached hereto, as applicable.
2. Each of the Credit Parties has the corporate power and
authority to make, deliver and perform the Credit Documents to which it is a
party and has taken all
<PAGE> 124
June 28, 1996
Page 4
necessary corporate action to authorize the execution, delivery and performance
of such Credit Documents.
3. No consent, approval or authorization of, or registration,
declaration or filing with, (i) any United States federal or (ii) any state,
local or other governmental authority of the State of Georgia is required in
connection with the execution, delivery, performance, validity or
enforceability of the Credit Documents or the use of the proceeds of the Loans.
4. The execution, delivery and performance by each of the Credit
Parties of the Credit Documents to which it is a party do not and will not (a)
violate (i) any existing law, rule or regulation of the United States of
America or of the State of Georgia applicable to such Credit Party, (ii) the
certificate or articles of incorporation or by-laws of such Credit Party or
(iii) the terms of any Listed Contractual Obligation nor (b) result in the
creation of any Lien on the property or assets of any Credit Party pursuant to
the terms of any of the Listed Contractual Obligations.
5. Each of the Credit Parties has duly authorized, executed and
delivered each Credit Document to which it is a party. Each of the Credit
Documents constitutes the legal, valid and binding obligations of each of the
Credit Party that is a party thereto, enforceable against such Credit Party in
accordance with its terms. The provisions of the Credit Documents with respect
to payment of interest, fees, costs, and other charges for the use of money do
not violate the interest and usury laws as in effect in the State of Georgia.
6. None of the Credit Parties is an "investment company" or a
company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, or a "subsidiary company" of a "holding
company" or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company" within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
7. The making of any Revolving Loans and the application of the
proceeds thereof as provided in the Credit Agreement do not violate Regulation
G, T, U or X of the Board of Governors of the Federal Reserve System.
8. To our knowledge, except as reflected in Schedule 5.05 to the
Credit Agreement, there is no litigation or proceeding pending or threatened
against any Credit Party which, if adversely determined, would reasonably be
expected to have a Material Adverse Effect.
Our opinions set forth above are subject to the following
qualifications:
A. We are licensed to practice law only in the State of Georgia
but are generally familiar with, and have reviewed in connection with this
transaction relevant
<PAGE> 125
June 28, 1996
Page 5
portions of, the General Business Corporation Law of the State of Delaware.
Accordingly, we express no opinion as to matters of law other than federal laws
of the United States of America, the laws of the State of Georgia and matters
set forth in the published statutes of the General Corporation Law of the State
of Delaware. The opinions expressed in this opinion letter do not address
federal securities laws and regulations administered by the Securities and
Exchange Commission (other than the Public Utility Holding Company Act of 1935
and the Investment Company Act of 1940), any state "Blue Sky" laws and
regulations, or laws and regulations relating to commodity (and other) futures
and indices and other similar instruments.
B. Enforceability of the Credit Documents is subject to (i)
bankruptcy, insolvency, moratorium, reorganization or similar laws affecting
the enforcement of creditors' rights generally, and (ii) general policies of
equity, regardless of whether enforceability is considered in a proceeding in
equity or at law.
C. No opinion is expressed with respect to the validity, binding
effect, or enforceability of:
(a) any provision of a Credit Document requiring
indemnification for, or providing exculpation, release, or exemption
from liability for, action or inaction, to the extent such action or
inaction involves negligence or willful misconduct, or to the extent
such indemnification, exculpation, release or exemption from liability
is otherwise contrary to public policy;
(b) any provision of a Credit Document imposing increased
interest rates or late payment charges upon delinquency in payment or
other default or providing for liquidated damages or for premiums on
prepayment, acceleration, or termination, to the extent any such
provisions may be deemed to be penalties or forfeitures;
(c) any provision of a Credit Document that has the
effect of waiving the right to jury trial, statutes of limitation,
marshaling of assets or similar requirements, or consenting or waiving
objections to the jurisdiction of certain courts, or the venue or
forum for judicial actions;
(d) any provision of a Credit Document providing that
waivers or consents by a party may not be given effect unless in
writing or in compliance with particular requirements, or that a
party's course of dealing, course of performance, or the like or
failure or delay in taking action may not constitute a waiver of
related rights or provisions, or that one or more waivers may not
under certain circumstances constitute a waiver of other matters of
the same kind;
<PAGE> 126
June 28, 1996
Page 6
(e) any provision of a Credit Document providing that a
party has the right to pursue multiple remedies without regard to
other remedies elected or that all remedies are cumulative;
(f) any provision of a Credit Document purporting to
require payment by any Credit Party of any Lender's or the Agent's
attorneys' fees without compliance with the applicable requirements of
O.C.G.A. Section 13-1-11;
(g) any provision of a Credit Document providing that
modifications to such document may only be made in writing or that the
provisions of such document are severable;
(h) any provision of a Credit Document purporting to
permit the exercise, under certain circumstances, of rights or
remedies without notice or without providing opportunity to cure
failures to perform;
(i) any provision of a Credit Document purporting to
grant rights of setoff otherwise than in accordance with applicable
law; and
(j) any provision of a Credit Document purporting to
require a waiver of defenses, setoffs, or counterclaims against the
Lenders or Agent.
D. We note that certain waivers of notices and other rights and
remedial provisions contained in the Credit Documents may be unenforceable
under applicable law, but the Credit Documents contain adequate other
provisions for enforcing payment of the obligations evidenced, guaranteed or
secured thereby and for the practical realization of the rights and remedies
afforded thereby, and the inclusion of such waivers, rights and remedial
provisions in the Credit Documents does not affect the legality, validity or
binding effect of such Credit Documents or affect the enforceability of the
other provisions of the Credit Documents.
E. Our knowledge of the business and affairs of each of the
Credit Parties and of the implications thereof on the applicability of any laws
to them is based solely on the officer's certificates attached hereto.
F. For purposes of the opinions expressed in paragraph 5 above,
we have assumed that the interest and other fees and charges, whether or not
denominated as "interest," which may be received by the Agent and the Lenders
in respect of the Loans and the other financial accommodations to be made under
the Credit Documents and the interest and other fees and charges which are
actually received by the Agent and the Lenders in respect of such loans and
financial accommodations will not exceed five percent (5%) per month of the
amount of such loans and financial accommodations. Further, we express no
opinion as to the enforceability of any provision of the Credit Documents which
purports to charge interest on unpaid interest.
<PAGE> 127
June 28, 1996
Page 7
Opinions rendered herein are as of the date hereof, and we make no
undertaking and expressly disclaim any duty to supplement such opinions if,
after the date hereof, facts and circumstances come to our attention or changes
in the law occur which could affect such opinions.
This opinion has been delivered solely for the benefit of the Lenders,
the Agent, their respective counsel and successors and permitted assigns, and
may not be relied upon by any other person or entity or for any other purpose
without the express written permission of the undersigned.
Very truly yours,
ALSTON & BIRD
By:
-------------------------------
A Partner
<PAGE> 128
EXHIBIT A-1
OFFICER'S CERTIFICATE
I, Brady W. Mullinax, Jr., Vice President-Finance, Treasurer and Chief
Financial Officer of Fuqua Enterprises, Inc., a Delaware corporation (the
"Company"), hereby acknowledge and agree that Alston & Bird may rely and will
be relying on this Certificate in rendering their opinion (the "Opinion") in
connection with the transactions contemplated by that certain Amended and
Restated Credit Agreement dated as of the date hereof (the "Credit Agreement")
by and among the Company, the lenders from time to time party thereto (the
"Lenders") and SunTrust Bank, Atlanta, as agent (the "Agent"). Capitalized
terms used herein and not otherwise defined herein have the respective meanings
given them in, or by reference in, the Opinion.
I hereby certify to Alston & Bird that, to the best of my knowledge:
1. A copy of the Opinion has been provided to the undersigned in
connection with the certifications made herein. Further, the undersigned is
familiar with each of the Credit Documents.
2. Alston & Bird may rely on all certificates from the Company or
state officials provided to the Agent or any Lender in connection with the
Credit Agreement as if the same were addressed to Alston & Bird. The
certificate of incorporation of the Company have not been amended, revoked or
otherwise changed since the date of certification by the Secretary of State of
the State of Delaware of the copy of such certificate delivered to the Agent
under the Credit Agreement.
3. The resolutions of the Board of Directors and the Executive
Committee of the Board of Directors of the Company reviewed and relied upon by
Alston & Bird are true, complete and correct, the resolutions have not been
amended or revoked since the date adopted and are the only resolutions relating
to the matters that are the subject matter of the Opinion. Further, the
Company's relevant corporate resolutions were adopted in compliance with any
procedural requirements of the Company's certificate of incorporation and
bylaws and the Delaware Corporation Laws.
4. The Company currently is engaged in the businesses described
in Item 1 and the second paragraph under Item 7 of the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1995 (the "Annual Report"),
which description is incorporated herein.
5. The Company has not received any notice from the Secretary of
State of the State of Delaware of a determination that any grounds exist for
administratively dissolving the Company and the Company has not received notice
of the commencement of any action to judicially dissolve the Company. Neither
the Board of Directors nor the shareholders of the Company have taken any
action with respect to the dissolution of the
<PAGE> 129
Company, and the Company has not filed any notice of intent to dissolve with
the State of Delaware.
6. The Company owns or leases places of business in only the
States of Georgia and New York.
7. All directors signing the Company's consent resolution
authorizing the transactions contemplated by the Credit Agreement were duly
appointed and incumbent in their offices at the time of all relevant corporate
action and at all relevant times thereafter.
8. Except as set forth on Exhibit C to the Opinion, the Company
is not a party to or bound by any contract, agreement, indenture, lease or
other document the violation or termination of which could have a Materially
Adverse Effect.
9. Other than the Securities and Exchange Commission and the New
York Stock Exchange and except as discussed in Item 1. of the Annual Report, the
Company does not regularly deal with or report to any federal or state
governmental agency or authority.
10. Except as set forth on Schedule 5.05 to the Credit Agreement,
there is no litigation or proceeding pending or threatened against the Company
or any of its properties, which, if adversely determined, would reasonably be
expected to have a Materially Adverse Effect or any outstanding judicial or
administrative decree, writ, judgment or order to which the Company or any of
its properties is subject which has had or, if adversely determined, would
reasonably be expected to have a Materially Adverse Effect.
11. The Company is not engaged principally, or as one of its
important activities, in the business of purchasing or carrying "margin stock"
(as defined below), and no part of the proceeds of any Loans to the Company or
any Intercompany Loans to any other Consolidated Company will be used to
purchase or carry any margin stock or to extend credit to others for the
purpose of purchasing or carrying any margin stock. For purposes of this
certificate, the term "margin stock" shall mean (i) any equity security
registered or having unlisted trading privileges on a national securities
exchange; (ii) any OTC margin stock; (iii) any OTC security designated as
qualified for trading in the National Market System; (iv) any debt security
convertible into or carrying a subscription right to purchase a margin stock;
(v) any warrant or right to subscribe to or purchase a margin stock; or (vi)
any security issued by an investment company registered under Section 8 of the
Investment Company Act of 1940 other than (a) a company licensed under the
Small Business Investment Act of 1958, as amended; or (b) a company which has
at least 95 percent of its assets continuously invested in government or
municipal securities; or (c) a company which issues face-amount certificates.
12. The Company is not, nor does it hold itself out as being
primarily, nor does it propose to engage primarily, in the business of
investing, reinvesting, or trading in securities. The Company is not engaged
nor does it propose to engage in the business of
- 2 -
<PAGE> 130
issuing face-amount certificates of the installment type, nor has the Company
been engaged in such business nor does it have any such certificate
outstanding. The Company is not engaged nor does it propose to engage in the
business of investing, reinvesting, owning, holding or trading in securities,
and it neither owns nor does it propose to acquire investment securities having
a value exceeding 40% of the value of the Company's total assets (exclusive of
government securities and cash items) on an unconsolidated basis. The Company
is not controlled by an entity that satisfies any of the foregoing criteria.
13. The Company does not, directly or indirectly, own, control or
hold, with the power to vote ten percent or more of the outstanding voting
securities of (i) any company which owns or operates facilities used for the
generation, transmission, or distribution of electric energy for sale, or any
company which owns or operates facilities used for the distribution at retail
of natural or manufactured gas for heat, light, or power (any such company
shall be referred to herein as a "Public Utility"), or (ii) any company which
directly or indirectly owns, controls or holds with power to vote, the voting
securities of any Public Utility, or (iii) any company whose voting securities
are directly or indirectly owned, controlled or held with power to vote, by any
company which directly or indirectly owns, controls or holds with power to
vote, the voting securities of any Public Utility. The Company has not
received notification from the Securities and Exchange Commission that,
pursuant to the Public Utility Holding Company Act of 1935, the Commission has
determined that (i) the Company, or (ii) any person the Company directly or
indirectly owns, controls or holds with power to vote, the voting securities
of, or (iii) any person which directly or indirectly owns, controls or holds
with power to vote, the voting securities of the Company, constitutes a
"holding company," or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary" of a "holding company."
14. The undersigned is not aware of any consent, approval or
authorization of, or registration, declaration or filing with, (i) any United
States federal or (ii) any state, local, or other governmental authority of the
State of Georgia, required in connection with the execution, delivery,
performance, validity or enforceability of the Credit Documents or the use of
the proceeds of the Loans.
IN WITNESS WHEREOF, the undersigned has duly executed and delivered
this Certificate as of June 28, 1996.
By:
------------------------------------
Brady W. Mullinax, Jr.
Vice President-Finance, Treasurer
and Chief Financial Officer of
Fuqua Enterprises, Inc.
- 3 -
<PAGE> 131
EXHIBIT A-2
OFFICER'S CERTIFICATE
I, Brady W. Mullinax, Jr., Assistant Treasurer of Irving Tanning
Company, a Delaware corporation (the "Company"), hereby acknowledge and agree
that Alston & Bird may rely and will be relying on this Certificate in
rendering their opinion (the "Opinion") in connection with the transactions
contemplated by that certain Amended and Restated Credit Agreement dated as of
the date hereof (the "Credit Agreement") by and among the Fuqua Enterprises,
Inc., the lenders from time to time party thereto (the "Lenders") and SunTrust
Bank, Atlanta, as agent (the "Agent"). Capitalized terms used herein and not
otherwise defined herein have the respective meanings given them in, or by
reference in, the Opinion.
I hereby certify to Alston & Bird that, to the best of my knowledge:
1. A copy of the Opinion has been provided to the undersigned in
connection with the certifications made herein. Further, the undersigned is
familiar with each of the Credit Documents.
2. Alston & Bird may rely on all certificates from the Company or
state officials provided to the Agent or any Lender in connection with the
Credit Agreement as if the same were addressed to Alston & Bird. The
certificate of incorporation of the Company have not been amended, revoked or
otherwise changed since the date of certification by the Secretary of State of
the State of Delaware of the copy of such certificate delivered to the Agent
under the Credit Agreement.
3. The resolutions of the Board of Directors of the Company
reviewed and relied upon by Alston & Bird are true, complete and correct, the
resolutions have not been amended or revoked since the date adopted and are the
only resolutions relating to the matters that are the subject matter of the
Opinion. Further, the Company's relevant corporate resolutions were adopted in
compliance with any procedural requirements of the Company's certificate of
incorporation and bylaws and the Delaware Corporation Laws.
4. The Company is engaged in the business of producing leather
and finished leather from cowhide for a variety of consumer goods as more
particularly described in Item 1. of the Fuqua Enterprises, Inc. Annual Report
on Form 10-K for the fiscal year ended December 31, 1995 (the "Annual Report"),
which description is incorporated herein.
5. The Company has not received any notice from the Secretary of
State of the State of Delaware of a determination that any grounds exist for
administratively dissolving the Company and the Company has not received notice
of the commencement of any action to judicially dissolve the Company. Neither
the board of directors nor the
<PAGE> 132
shareholders of the Company have taken any action with respect to the
dissolution of the Company, and the Company has not filed any notice of intent
to dissolve with the State of Delaware.
6. The Company owns or leases places of business in Hong Kong and
the States of Maine and New York.
7. All directors signing the Company's consent resolution
authorizing the transactions contemplated by that certain Credit Agreement were
duly appointed and incumbent in their offices at the time of all relevant
corporate action and at all relevant times thereafter.
8. Except as set forth on Exhibit C to the Opinion, the Company
is not a party to or bound by any contract, agreement, indenture, lease or
other document the violation or termination of which could have a Materially
Adverse Effect.
9. Except as discussed in Item 1. of the Annual Report, the
Company does not regularly deal with or report to any federal or state
governmental agency or authority.
10. Except as set forth on Schedule 5.05 to the Credit Agreement,
there is no litigation or proceeding pending or threatened against the Company
or any of its properties, which, if adversely determined, would reasonably be
expected to have a Material Adverse Effect or any outstanding judicial or
administrative decree, writ, judgment or order to which the Company or its
properties is subject which has had or, if adversely determined, would
reasonably be expected to have a Materially Adverse Effect.
11. The Company is not engaged principally, or as one of its
important activities, in the business of purchasing or carrying "margin stock"
(as defined below), and no part of the proceeds of any Loans to the Company or
any Intercompany Loans to any other Consolidated Company will be used to
purchase or carry any margin stock or to extend credit to others for the
purpose of purchasing or carrying any margin stock. For purposes of this
certificate, the term "margin stock" shall mean (i) any equity security
registered or having unlisted trading privileges on a national securities
exchange; (ii) any OTC margin stock; (iii) any OTC security designated as
qualified for trading in the National Market System; (iv) any debt security
convertible into or carrying a subscription right to purchase a margin stock;
(v) any warrant or right to subscribe to or purchase a margin stock; or (vi)
any security issued by an investment company registered under Section 8 of the
Investment Company Act of 1940 other than (a) a company licensed under the
Small Business Investment Act of 1958, as amended; or (b) a company which has
at least 95 percent of its assets continuously invested in government or
municipal securities; or (c) a company which issues face-amount certificates.
12. The Company is not, nor does it hold itself out as being
primarily, nor does it propose to engage primarily, in the business of
investing, reinvesting, or trading securities. The Company is not engaged nor
does it propose to engage in the business of
- 2 -
<PAGE> 133
issuing face-amount certificates of the installment type, nor has the Company
been engaged in such business nor does it have any such certificate
outstanding. The Company is not engaged nor does it propose to engage in the
business of investing, reinvesting, owning, holding or trading in securities,
and it neither owns nor does it propose to acquire investment securities having
a value exceeding 40% of the value of the Company's total assets (exclusive of
government securities and cash items) on an unconsolidated basis.
13. The Company does not, directly or indirectly, own, control, or
hold, with the power to vote ten percent or more of the outstanding voting
securities of (i) any company which owns or operates facilities used for the
generation, transmission, or distribution of electric energy for sale, or any
company which owns or operates facilities used for the distribution at retail
of natural or manufactured gas for heat, light, or power (any such company
shall be referred to herein as a "Public Utility"), or (ii) any company which
directly or indirectly owns, controls or holds with power to vote, the voting
securities of any Public Utility, or (iii) any company whose voting securities
are directly or indirectly owned, controlled or held with power to vote, by any
company which directly or indirectly owns, controls or holds with power to
vote, the voting securities of any Public Utility. The Company has not
received notification from the Securities and Exchange Commission that,
pursuant to the Public Utility Holding Company Act of 1935, the Commission has
determined that (i) the Company, or (ii) any person the Company directly or
indirectly owns, controls or holds with power to vote, the voting securities
of, or (iii) any person which directly or indirectly owns, controls or holds
with power to vote, the voting securities of the Company, constitutes a
"holding company," or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary" of a "holding company."
14. The undersigned is not aware of any consent, approval or
authorization of, or registration, declaration or filing with, (i) any United
States federal or (ii) any state, local, or other governmental authority of the
State of Georgia, required in connection with the execution, delivery,
performance, validity or enforceability of the Credit Documents or the use of
the proceeds of the Loans.
IN WITNESS WHEREOF, the undersigned has duly executed and delivered
this Certificate as of June 28, 1996.
By:
------------------------------------
Brady W. Mullinax, Jr.
Assistant Treasurer
Irving Tanning Company
- 3 -
<PAGE> 134
EXHIBIT A-3
OFFICER'S CERTIFICATE
I, Brady W. Mullinax, Jr., Assistant Treasurer of Kroy Tanning
Company, Incorporated, a Delaware corporation (the "Company"), hereby
acknowledge and agree that Alston & Bird may rely and will be relying on this
Certificate in rendering their opinion (the "Opinion") in connection with the
transactions contemplated by that certain Amended and Restated Credit Agreement
dated as of the date hereof (the "Credit Agreement") by and among the Fuqua
Enterprises, Inc., the lenders from time to time party thereto (the "Lenders")
and SunTrust Bank, Atlanta, as agent (the "Agent"). Capitalized terms used
herein and not otherwise defined herein have the respective meanings given them
in, or by reference in, the Opinion.
I hereby certify to Alston & Bird that, to the best of my knowledge:
1. A copy of the Opinion has been provided to the undersigned in
connection with the certifications made herein. Further, the undersigned is
familiar with each of the Credit Documents.
2. Alston & Bird may rely on all certificates from the Company or
state officials provided to the Agent or any Lender in connection with the
Credit Agreement as if the same were addressed to Alston & Bird. The
certificate of incorporation of the Company have not been amended, revoked or
otherwise changed since the date of certification by the Secretary of State of
the State of Delaware of the copy of such certificate delivered to the Agent
under the Credit Agreement.
3. The resolutions of the Board of Directors of the Company
reviewed and relied upon by Alston & Bird are true, complete and correct, the
resolutions have not been amended or revoked since the date adopted and are the
only resolutions relating to the matters that are the subject matter of the
Opinion. Further, the Company's relevant corporate resolutions were adopted in
compliance with any procedural requirements of the Company's certificate of
incorporation and bylaws and the Delaware Corporation Laws.
4. The Company is engaged in the business of producing leather
and finished leather from deerskin and lambskin for a variety of consumer goods
as more particularly described in Item 1. of the Fuqua Enterprises, Inc. Annual
Report on Form 10-K for the fiscal year ended December 31, 1994 (the "Annual
Report"), which description is incorporated herein.
5. The Company has not received any notice from the Secretary of
State of the State of Delaware of a determination that any grounds exist for
administratively dissolving the Company and the Company has not received notice
of the commencement of any action to judicially dissolve the Company. Neither
the board of directors nor the
<PAGE> 135
shareholders of the Company have taken any action with respect to the
dissolution of the Company, and the Company has not filed any notice of intent
to dissolve with the State of Delaware.
6. The Company owns or leases places of business in only the
State of Maine.
7. All directors signing the Company's consent resolution
authorizing the transactions contemplated by that certain Credit Agreement were
duly appointed and incumbent in their offices at the time of all relevant
corporate action and at all relevant times thereafter.
8. Except as set forth on Exhibit C to the Opinion, the Company
is not a party to or bound by any contract, agreement, indenture, lease or
other document the violation or termination of which could have a Materially
Adverse Effect.
9. Other than the Securities and Exchange Commission and various
state securities authorities and except as discussed in Item 1. of the Annual
Report and Item 1. of the Fuqua Enterprises, Inc. Annual Report on Form 10-K
for the fiscal year ended December 31, 1995, the Company does not regularly
deal with or report to any federal or state governmental agency or authority.
10. Except as set forth on Schedule 5.05 to the Credit Agreement,
there is no litigation or proceeding pending or threatened against the Company
or any of its properties, which, if adversely determined, would reasonably be
expected to have a Materially Adverse Effect or any outstanding judicial or
administrative decree, writ, judgment or order to which the Company or its
properties are subject which has had or, if adversely determined, would
reasonably be expected to have a Materially Adverse Effect.
11. The Company is not engaged principally, or as one of its
important activities, in the business of purchasing or carrying "margin stock"
(as defined below), and no part of the proceeds of any Loans to the Company or
any Intercompany Loans to any other Consolidated Company will be used to
purchase or carry any margin stock or to extend credit to others for the
purpose of purchasing or carrying any margin stock. For purposes of this
certificate, the term "margin stock" shall mean (i) any equity security
registered or having unlisted trading privileges on a national securities
exchange; (ii) any OTC margin stock; (iii) any OTC security designated as
qualified for trading in the National Market System; (iv) any debt security
convertible into or carrying a subscription right to purchase a margin stock;
(v) any warrant or right to subscribe to or purchase a margin stock; or (vi)
any security issued by an investment company registered under Section 8 of the
Investment Company Act of 1940 other than (a) a company licensed under the
Small Business Investment Act of 1958, as amended; or (b) a company which has
at least 95 percent of its assets continuously invested in government or
municipal securities; or (c) a company which issues face-amount certificates.
- 2 -
<PAGE> 136
12. The Company is not, nor does it hold itself out as being
primarily, nor does it propose to engage primarily, in the business of
investing, reinvesting, or trading securities. The Company is not engaged nor
does it propose to engage in the business of issuing face-amount certificates
of the installment type, nor has the Company been engaged in such business nor
does it have any such certificate outstanding. The Company is not engaged nor
does it propose to engage in the business of investing, reinvesting, owning,
holding or trading in securities, and it neither owns nor does it propose to
acquire investment securities having a value exceeding 40% of the value of the
Company's total assets (exclusive of government securities and cash items) on
an unconsolidated basis.
13. The Company does not, directly or indirectly, own, control, or
hold, with the power to vote ten percent or more of the outstanding voting
securities of (i) any company which owns or operates facilities used for the
generation, transmission, or distribution of electric energy for sale, or any
company which owns or operates facilities used for the distribution at retail
of natural or manufactured gas for heat, light, or power (any such company
shall be referred to herein as a "Public Utility"), or (ii) any company which
directly or indirectly owns, controls or holds with power to vote, the voting
securities of any Public Utility, or (iii) any company whose voting securities
are directly or indirectly owned, controlled or held with power to vote, by any
company which directly or indirectly owns, controls or holds with power to
vote, the voting securities of any Public Utility. The Company has not
received notification from the Securities and Exchange Commission that,
pursuant to the Public Utility Holding Company Act of 1935, the Commission has
determined that (i) the Company, or (ii) any person the Company directly or
indirectly owns, controls or holds with power to vote, the voting securities
of, or (iii) any person which directly or indirectly owns, controls or holds
with power to vote, the voting securities of the Company, constitutes a
"holding company," or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary" of a "holding company."
14. The undersigned is not aware of any consent, approval or
authorization of, or registration, declaration or filing with, (i) any United
States federal or (ii) any state, local, or other governmental authority of the
State of Georgia, required in connection with the execution, delivery,
performance, validity or enforceability of the Credit Documents or the use of
the proceeds of the Loans.
IN WITNESS WHEREOF, the undersigned has duly executed and delivered
this Certificate as of June 28, 1996.
By:
------------------------------------
Brady W. Mullinax, Jr.,
Assistant Treasurer
Kroy Tanning Company, Incorporated
- 3 -
<PAGE> 137
EXHIBIT A-4
OFFICER'S CERTIFICATE
I, Brady W. Mullinax, Jr., Treasurer of Basic American Medical
Products, Inc., a Georgia corporation (the "Company"), hereby acknowledge and
agree that Alston & Bird may rely and will be relying on this Certificate in
rendering their opinion (the "Opinion") in connection with the transactions
contemplated by that certain Amended and Restated Credit Agreement dated as of
the date hereof (the "Credit Agreement") by and among the Fuqua Enterprises,
Inc., the lenders from time to time party thereto (the "Lenders") and SunTrust
Bank, Atlanta, as agent (the "Agent"). Capitalized terms used herein and not
otherwise defined herein have the respective meanings given them in, or by
reference in, the Opinion.
I hereby certify to Alston & Bird that, to the best of my knowledge:
1. A copy of the Opinion has been provided to the undersigned in
connection with the certifications made herein. Further, the undersigned is
familiar with each of the Credit Documents.
2. Alston & Bird may rely on all certificates from the Company or
state officials provided to the Agent or any Lender in connection with the
Credit Agreement as if the same were addressed to Alston & Bird. The articles
of incorporation of the Company have not been amended, revoked or otherwise
changed since the date of certification by the Secretary of State of the State
of Georgia of the copy of such certificate delivered to the Agent under the
Credit Agreement. The Company is current in its net worth and income tax
payments and filings to the Georgia Department of Revenue.
3. The resolutions of the Board of Directors of the Company
reviewed and relied upon by Alston & Bird are true, complete and correct, the
resolutions have not been amended or revoked since the date adopted and are the
only resolutions relating to the matters that are the subject matter of the
Opinion. Further, the Company's relevant corporate resolutions were adopted in
compliance with any procedural requirements of the Company's articles of
incorporation and bylaws and the Georgia Business Corporation Code.
4. The Company currently is engaged in the business described in
Item 1 of the Fuqua Enterprises, Inc. Annual Report on Form 10-K for the
fiscal year ended December 31, 1995 (the "Annual Report"), which description is
incorporated herein.
5. The Company has not received any notice from the Secretary of
State of the State of Georgia of a determination that any grounds exist for
administratively dissolving the Company and the Company has not received notice
of the commencement of any action to judicially dissolve the Company. Neither
the board of directors nor the
<PAGE> 138
shareholders of the Company have taken any action with respect to the
dissolution of the Company, and the Company has not filed any notice of intent
to dissolve with the State of Georgia.
6. The Company owns or leases places of business in only the
States of Georgia, Mississippi and Wisconsin.
7. All directors signing the Company's consent resolution
authorizing the transactions contemplated by that certain Credit Agreement were
duly appointed and incumbent in their offices at the time of all relevant
corporate action and at all relevant times thereafter.
8. Except as set forth on Exhibit C to the Opinion, the Company
is not a party to or bound by any contract, agreement, indenture, lease or
other document the violation or termination of which could have a Materially
Adverse Effect.
9. Except as discussed in Item 1. of the Annual Report, the
Company does not regularly deal with or report to any federal or state
governmental agency or authority.
10. Except as set forth on Schedule 5.05 to the Credit Agreement,
there is no litigation or proceeding pending or threatened against the Company
or any of its properties, which, if adversely determined, would reasonably be
expected to have a Materially Adverse Effect or any outstanding judicial or
administrative decree, writ, judgment or order to which the Company or its
properties are subject which has had or, if adversely determined, would
reasonably be expected to have a Materially Adverse Effect.
11. The Company is not engaged principally, or as one of its
important activities, in the business of purchasing or carrying "margin stock"
(as defined below), and no part of the proceeds of any Loans to the Company or
any Intercompany Loans to any other Consolidated Company will be used to
purchase or carry any margin stock or to extend credit to others for the
purpose of purchasing or carrying any margin stock. For purposes of this
certificate, the term "margin stock" shall mean (i) any equity security
registered or having unlisted trading privileges on a national securities
exchange; (ii) any OTC margin stock; (iii) any OTC security designated as
qualified for trading in the National Market System; (iv) any debt security
convertible into or carrying a subscription right to purchase a margin stock;
(v) any warrant or right to subscribe to or purchase a margin stock; or (vi)
any security issued by an investment company registered under Section 8 of the
Investment Company Act of 1940 other than (a) a company licensed under the
Small Business Investment Act of 1958, as amended; or (b) a company which has
at least 95 percent of its assets continuously invested in government or
municipal securities; or (c) a company which issues face-amount certificates.
12. The Company is not, nor does it hold itself out as being
primarily, nor does it propose to engage primarily, in the business of
investing, reinvesting, or trading securities. The Company is not engaged nor
does it propose to engage in the business of
- 2 -
<PAGE> 139
issuing face-amount certificates of the installment type, nor has the Company
been engaged in such business nor does it have any such certificate
outstanding. The Company is not engaged nor does it propose to engage in the
business of investing, reinvesting, owning, holding or trading in securities,
and it neither owns nor does it propose to acquire investment securities having
a value exceeding 40% of the value of the Company's total assets (exclusive of
government securities and cash items) on an unconsolidated basis.
13. The Company does not, directly or indirectly, own, control, or
hold, with the power to vote ten percent or more of the outstanding voting
securities of (i) any company which owns or operates facilities used for the
generation, transmission, or distribution of electric energy for sale, or any
company which owns or operates facilities used for the distribution at retail
of natural or manufactured gas for heat, light, or power (any such company
shall be referred to herein as a "Public Utility"), or (ii) any company which
directly or indirectly owns, controls or holds with power to vote, the voting
securities of any Public Utility, or (iii) any company whose voting securities
are directly or indirectly owned, controlled or held with power to vote, by any
company which directly or indirectly owns, controls or holds with power to
vote, the voting securities of any Public Utility. The Company has not
received notification from the Securities and Exchange Commission that,
pursuant to the Public Utility Holding Company Act of 1935, the Commission has
determined that (i) the Company, or (ii) any person the Company directly or
indirectly owns, controls or holds with power to vote, the voting securities
of, or (iii) any person which directly or indirectly owns, controls or holds
with power to vote, the voting securities of the Company, constitutes a
"holding company," or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary" of a "holding company."
14. The undersigned is not aware of any consent, approval or
authorization of, or registration, declaration or filing with, (i) any United
States federal or (ii) any state, local, or other governmental authority of the
State of Georgia, required in connection with the execution, delivery,
performance, validity or enforceability of the Credit Documents or the use of
the proceeds of the Loans.
IN WITNESS WHEREOF, the undersigned has duly executed and delivered
this Certificate as of June 28, 1996.
By:
-----------------------------------
Brady W. Mullinax, Jr.
Treasurer Basic
American Medical Products, Inc.
- 3 -
<PAGE> 140
EXHIBIT A-5
OFFICER'S CERTIFICATE
I, Brady W. Mullinax, Jr., Vice President and Treasurer of Lumex
Medical Products, Inc., a Delaware corporation (the "Company"), hereby
acknowledge and agree that Alston & Bird may rely and will be relying on this
Certificate in rendering their opinion (the "Opinion") in connection with the
transactions contemplated by that certain Amended and Restated Credit Agreement
dated as of the date hereof (the "Credit Agreement") by and among the Fuqua
Enterprises, Inc., the lenders from time to time party thereto (the "Lenders")
and SunTrust Bank, Atlanta, as agent (the "Agent"). Capitalized terms used
herein and not otherwise defined herein have the respective meanings given them
in, or by reference in, the Opinion.
I hereby certify to Alston & Bird that, to the best of my knowledge:
1. A copy of the Opinion has been provided to the undersigned in
connection with the certifications made herein. Further, the undersigned is
familiar with each of the Credit Documents.
2. Alston & Bird may rely on all certificates from the Company or
state officials provided to the Agent or any Lender in connection with the
Credit Agreement as if the same were addressed to Alston & Bird. The
certificate of incorporation of the Company have not been amended, revoked or
otherwise changed since the date of certification by the Secretary of State of
the State of Delaware of the copy of such certificate delivered to the Agent
under the Credit Agreement.
3. The resolutions of the Board of Directors of the Company
reviewed and relied upon by Alston & Bird are true, complete and correct, the
resolutions have not been amended or revoked since the date adopted and are the
only resolutions relating to the matters that are the subject matter of the
Opinion. Further, the Company's relevant corporate resolutions were adopted in
compliance with any procedural requirements of the Company's certificate of
incorporation and bylaws and the Delaware Corporation Laws.
4. The Company is engaged in the business described in the second
paragraph of Item 7. of the Fuqua Enterprises, Inc. Annual Report on Form 10-K
for the fiscal year ended December 31, 1995, which description is incorporated
herein.
5. The Company has not received any notice from the Secretary of
State of the State of Delaware of a determination that any grounds exist for
administratively dissolving the Company and the Company has not received notice
of the commencement of any action to judicially dissolve the Company. Neither
the board of directors nor the shareholders of the Company have taken any
action with respect to the dissolution of the
<PAGE> 141
Company, and the Company has not filed any notice of intent to dissolve with
the State of Delaware.
6. The Company owns or leases places of business in the States of
New York, Pennsylvania, California and Tennessee.
7. All directors signing the Company's consent resolution
authorizing the transactions contemplated by that certain Credit Agreement were
duly appointed and incumbent in their offices at the time of all relevant
corporate action and at all relevant times thereafter.
8. Except as set forth on Exhibit C to the Opinion, the Company
is not a party to or bound by any contract, agreement, indenture, lease or
other document the violation or termination of which could have a Materially
Adverse Effect.
9. Other than the Securities and Exchange Commission and various
state securities authorities and except as discussed in Item 1. of the Annual
Report, the Company does not regularly deal with or report to any federal or
state governmental agency or authority.
10. Except as set forth on Schedule 5.05 to the Credit Agreement,
there is no litigation or proceeding pending or threatened against the Company
or any of its properties, which could have a Material Adverse Effect or any
outstanding judicial or administrative decree, writ, judgment or order to which
the Company or its properties is subject which has had or could have a
Materially Adverse Effect.
11. The Company is not engaged principally, or as one of its
important activities, in the business of purchasing or carrying "margin stock"
(as defined below), and no part of the proceeds of any Loans to the Company or
any Intercompany Loans to any other Consolidated Company will be used to
purchase or carry any margin stock or to extend credit to others for the
purpose of purchasing or carrying any margin stock. For purposes of this
certificate, the term "margin stock" shall mean (i) any equity security
registered or having unlisted trading privileges on a national securities
exchange; (ii) any OTC margin stock; (iii) any OTC security designated as
qualified for trading in the National Market System; (iv) any debt security
convertible into or carrying a subscription right to purchase a margin stock;
(v) any warrant or right to subscribe to or purchase a margin stock; or (vi)
any security issued by an investment company registered under Section 8 of the
Investment Company Act of 1940 other than (a) a company licensed under the
Small Business Investment Act of 1958, as amended; or (b) a company which has
at least 95 percent of its assets continuously invested in government or
municipal securities; or (c) a company which issues face-amount certificates.
12. The Company is not, nor does it hold itself out as being
primarily, nor does it propose to engage primarily, in the business of
investing, reinvesting, or trading securities. The Company is not engaged nor
does it propose to engage in the business of
- 2 -
<PAGE> 142
issuing face-amount certificates of the installment type, nor has the Company
been engaged in such business nor does it have any such certificate
outstanding. The Company is not engaged nor does it propose to engage in the
business of investing, reinvesting, owning, holding or trading in securities,
and it neither owns nor does it propose to acquire investment securities having
a value exceeding 40% of the value of the Company's total assets (exclusive of
government securities and cash items) on an unconsolidated basis.
13. The Company does not, directly or indirectly, own, control, or
hold, with the power to vote ten percent or more of the outstanding voting
securities of (i) any company which owns or operates facilities used for the
generation, transmission, or distribution of electric energy for sale, or any
company which owns or operates facilities used for the distribution at retail
of natural or manufactured gas for heat, light, or power (any such company
shall be referred to herein as a "Public Utility"), or (ii) any company which
directly or indirectly owns, controls or holds with power to vote, the voting
securities of any Public Utility, or (iii) any company whose voting securities
are directly or indirectly owned, controlled or held with power to vote, by any
company which directly or indirectly owns, controls or holds with power to
vote, the voting securities of any Public Utility. The Company has not
received notification from the Securities and Exchange Commission that,
pursuant to the Public Utility Holding Company Act of 1935, the Commission has
determined that (i) the Company, or (ii) any person the Company directly or
indirectly owns, controls or holds with power to vote, the voting securities
of, or (iii) any person which directly or indirectly owns, controls or holds
with power to vote, the voting securities of the Company, constitutes a
"holding company," or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary" of a "holding company."
14. The undersigned is not aware of any consent, approval or
authorization of, or registration, declaration or filing with, (i) any United
States federal or (ii) any state, local, or other governmental authority of the
State of Georgia, required in connection with the execution, delivery,
performance, validity or enforceability of the Credit Documents or the use of
the proceeds of the Loans.
IN WITNESS WHEREOF, the undersigned has duly executed and delivered
this Certificate as of June 28, 1996.
By:
-------------------------------------
Brady W. Mullinax, Jr.
Vice President and Treasurer
Lumex Medical Products, Inc.
- 3 -
<PAGE> 143
EXHIBIT A-6
OFFICER'S CERTIFICATE
I, Brady W. Mullinax, Jr., Vice President and Treasurer of MUL
Acquisition Corp. II, a Delaware corporation (the "Company"), hereby
acknowledge and agree that Alston & Bird may rely and will be relying on this
Certificate in rendering their opinion (the "Opinion") in connection with the
transactions contemplated by that certain Amended and Restated Credit Agreement
dated as of the date hereof (the "Credit Agreement") by and among the Fuqua
Enterprises, Inc., the lenders from time to time party thereto (the "Lenders")
and SunTrust Bank, Atlanta, as agent (the "Agent"). Capitalized terms used
herein and not otherwise defined herein have the respective meanings given them
in, or by reference in, the Opinion.
I hereby certify to Alston & Bird that, to the best of my knowledge:
1. A copy of the Opinion has been provided to the undersigned in
connection with the certifications made herein. Further, the undersigned is
familiar with each of the Credit Documents.
2. Alston & Bird may rely on all certificates from the Company or
state officials provided to the Agent or any Lender in connection with the
Credit Agreement as if the same were addressed to Alston & Bird. The
certificate of incorporation of the Company have not been amended, revoked or
otherwise changed since the date of certification by the Secretary of State of
the State of Delaware of the copy of such certificate delivered to the Agent
under the Credit Agreement.
3. The resolutions of the Board of Directors of the Company
reviewed and relied upon by Alston & Bird are true, complete and correct, the
resolutions have not been amended or revoked since the date adopted and are the
only resolutions relating to the matters that are the subject matter of the
Opinion. Further, the Company's relevant corporate resolutions were adopted in
compliance with any procedural requirements of the Company's certificate of
incorporation and bylaws and the Delaware Corporation Laws.
4. The Company is engaged in the business of passively holding
intangible property for investment, including trademarks and patents for which
the Company will be responsible for registration and protection.
5. The Company has not received any notice from the Secretary of
State of the State of Delaware of a determination that any grounds exist for
administratively dissolving the Company and the Company has not received notice
of the commencement of any action to judicially dissolve the Company. Neither
the board of directors nor the shareholders of the Company have taken any
action with respect to the dissolution of the
<PAGE> 144
Company, and the Company has not filed any notice of intent to dissolve with
the State of Delaware.
6. The Company owns or leases places of business only in State of
Delaware.
7. All directors signing the Company's consent resolution
authorizing the transactions contemplated by that certain Credit Agreement were
duly appointed and incumbent in their offices at the time of all relevant
corporate action and at all relevant times thereafter.
8. Except as set forth on Exhibit C to the Opinion, the Company
is not a party to or bound by any contract, agreement, indenture, lease or
other document the violation or termination of which could have a Materially
Adverse Effect.
9. The Company does not regularly deal with or report to any
federal or state governmental agency or authority.
10. Except as set forth on Schedule 5.05 to the Credit Agreement,
there is no litigation or proceeding pending or threatened against the Company
or any of its properties, which could have a Material Adverse Effect or any
outstanding judicial or administrative decree, writ, judgment or order to which
the Company or its properties is subject which has had or could have a
Materially Adverse Effect.
11. The Company is not engaged principally, or as one of its
important activities, in the business of purchasing or carrying "margin stock"
(as defined below), and no part of the proceeds of any Loans to the Company or
any Intercompany Loans to any other Consolidated Company will be used to
purchase or carry any margin stock or to extend credit to others for the
purpose of purchasing or carrying any margin stock. For purposes of this
certificate, the term "margin stock" shall mean (i) any equity security
registered or having unlisted trading privileges on a national securities
exchange; (ii) any OTC margin stock; (iii) any OTC security designated as
qualified for trading in the National Market System; (iv) any debt security
convertible into or carrying a subscription right to purchase a margin stock;
(v) any warrant or right to subscribe to or purchase a margin stock; or (vi)
any security issued by an investment company registered under Section 8 of the
Investment Company Act of 1940 other than (a) a company licensed under the
Small Business Investment Act of 1958, as amended; or (b) a company which has
at least 95 percent of its assets continuously invested in government or
municipal securities; or (c) a company which issues face-amount certificates.
12. The Company is not, nor does it hold itself out as being
primarily, nor does it propose to engage primarily, in the business of
investing, reinvesting, or trading securities. The Company is not engaged nor
does it propose to engage in the business of issuing face-amount certificates
of the installment type, nor has the Company been engaged in such business nor
does it have any such certificate outstanding. The Company is not engaged nor
does it propose to engage in the business of investing, reinvesting,
<PAGE> 145
owning, holding or trading in securities, and it neither owns nor does it
propose to acquire investment securities having a value exceeding 40% of the
value of the Company's total assets (exclusive of government securities and
cash items) on an unconsolidated basis.
13. The Company does not, directly or indirectly, own, control, or
hold, with the power to vote ten percent or more of the outstanding voting
securities of (i) any company which owns or operates facilities used for the
generation, transmission, or distribution of electric energy for sale, or any
company which owns or operates facilities used for the distribution at retail
of natural or manufactured gas for heat, light, or power (any such company
shall be referred to herein as a "Public Utility"), or (ii) any company which
directly or indirectly owns, controls or holds with power to vote, the voting
securities of any Public Utility, or (iii) any company whose voting securities
are directly or indirectly owned, controlled or held with power to vote, by any
company which directly or indirectly owns, controls or holds with power to
vote, the voting securities of any Public Utility. The Company has not
received notification from the Securities and Exchange Commission that,
pursuant to the Public Utility Holding Company Act of 1935, the Commission has
determined that (i) the Company, or (ii) any person the Company directly or
indirectly owns, controls or holds with power to vote, the voting securities
of, or (iii) any person which directly or indirectly owns, controls or holds
with power to vote, the voting securities of the Company, constitutes a
"holding company," or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary" of a "holding company."
14. The undersigned is not aware of any consent, approval or
authorization of, or registration, declaration or filing with, (i) any United
States federal or (ii) any state, local, or other governmental authority of the
State of Georgia, required in connection with the execution, delivery,
performance, validity or enforceability of the Credit Documents or the use of
the proceeds of the Loans.
IN WITNESS WHEREOF, the undersigned has duly executed and delivered
this Certificate as of June 28, 1996.
By:
-------------------------------------
Brady W. Mullinax, Jr.
Vice President and Treasurer
MUL Acquisition Corp. II
<PAGE> 146
EXHIBIT B
Jurisdictions of Qualification
Company
Delaware
Georgia
Maine
New York
Irving
Delaware
Maine
New York
Kroy
Delaware
Maine
Massachusetts
Basic
Georgia
Mississippi
Wisconsin
Lumex
Delaware
California
Georgia
New York
Pennsylvania
Tennessee
MUL
Delaware
<PAGE> 147
EXHIBIT C
Listed Contractual Obligations
1. Agreement between Town of Hartland, Maine and Irving Tanning Company
dated September 26, 1994 related to General Obligation Bonds.
2. Management Agreement between Vista and Fuqua National Corporation
dated April 10, 1989.
3. Assignment to Fuqua Capital Corporation of the Management Agreement
between Vista and Fuqua National Corporation.
4. First Amendment to Management Agreement between Fuqua Capital
Corporation and Vista dated September 14, 1994.
5. Lease Agreement between Vista (Leasee) and Sumitomo Life Realty (N.Y.)
Inc. (Lessor) dated January 17, 1990.
6. First Amendment to the Lease Agreement between Vista (Lessee) and
Sumitomo Life Realty (N.Y.) Inc. dated September 6, 1990.
7. Second Amendment to the Lease Agreement between Vista (Lessee) and
Sumitomo Life Realty (N.Y.) Inc. dated February 21, 1992.
8. Third Amendment to the Lease Agreement between Vista (Lessee) and
Sumitomo Life Realty (N.Y.) Inc. dated October 28, 1994.
9. Sublease Agreement between Vista and Fuqua Capital Corporation dated
October 31, 1994.
10. Lease Agreement between Empire State Building Company (Lessor) and
Vista (Lessee) dated March 1, 1993 along with Lease Modification
Agreement and Space Deletion Agreement dated February 18, 1994.
11. International Sales Representative Agreement between Irving Tanning
Company, Inc. and Fineco Leather Ltd. dated June 1, 1995.
12. Agreement between IBP, Inc. and Irving Tanning Company, Inc. dated
June 10, 1994.
13. Stock Purchase Agreement among Vista, Concorde Finance & Investment,
Inc., InterRedec, Inc., InterRedec Southern Company, Inc. and American
Southern Company dated September 17, 1991.
C-1
<PAGE> 148
14. Non-negotiable Promissory Note between Vista and InterRedec Southern
Company, Inc. dated October 11, 1991.
15. $5 Million Uncommitted Promissory Note dated as of November 6, 1995
executed by Fuqua Enterprises, Inc. in favor of SunTrust Bank,
Atlanta.
16. Letter Agreement dated as of December 8, 1995 between Fuqua
Enterprises, Inc. and First Union National Bank of Georgia.
17. Application and Agreement for Irrevocable Standby Letter of Credit
dated as of December 8, 1995 executed by Fuqua Enterprises, Inc. to
First Union National Bank of Georgia, as Issuer.
18. Credit Agreement dated as of April 29, 1994 by and between Basic
American Medical Products, Inc. and Bank One, Fond du Lac.
19. Agreement for Purchase and Sale of Certain Assets dated as of October
20, 1995 between Super Sagless, Inc. and Basic American Medical
Products, Inc.
20. Non-Negotiable Purchase Money Promissory Note dated October 20 ,1995
executed by Basic American Medical Products, Inc. in favor of Super
Sagless, Inc.
21. Security Agreement dated as of October 20, 1995 by and between Basic
American Medical Products, Inc. and Super Sagless, Inc.
22. Unconditional Guarantee of Performance of Fuqua in favor of Super
Sagless, Inc. dated November 15, 1995.
23. Guaranty dated as of October 20, 1995 executed by Leggett & Platt,
Incorporated in favor of Basic American Medical Products, Inc.
24. Agreement and Plan of Merger among Basic American Medical Products,
Inc., BA Acquisition Corporation and Fuqua Enterprises, Inc. dated
October 6, 1995.
25. Stock Purchase Agreement between Atlantic American Corporation and
Fuqua Enterprises, Inc. dated October 16, 1995.
26. Promissory Note between Atlantic American Corporation and Fuqua dated
December 31, 1995.
27. Agreement between Lumex Medical Products, Inc. and Local 422-S,
Products, Service and Sales District IUC, AFL- CIO.
28. Sublease Agreement by and between Crossroads Incubation Corporation
and Lumex, Inc. dated as of December 1, 1989 as assigned to Lumex
pursuant to that
C-2
<PAGE> 149
certain Assignment and Assumption of Lease between Lumex, Inc. and
Lumex dated as of April 3, 1996.
29. Asset Sale Agreement dated as of March 13, 1996 by and among Lumex,
Inc., MUL and Fuqua.
30. Registration Rights Agreement dated as of November 8, 1995 by and
between Fuqua Enterprises, Inc. and Gene J. Minotto.
31. Contract between Lumex Medical Products, Inc. and the United States of
America (Department of Veteran's Affairs) V797P-3768j.
32. Contract between Lumex Medical Products, Inc. and the United States of
America (Department of Veteran's Affairs) V797P-3253j.
33. Contract between Lumex Medical Products, Inc. and the United States of
America (General Services Administration/FSS National Furniture
Center) GS-27F-3011D.
C-3
<PAGE> 150
EXHIBIT F
FORM OF
COMPLIANCE CERTIFICATE
SunTrust Bank, Atlanta, as Agent
and each of the Lenders party
to the Credit Agreement referenced
below
Re: Fuqua Enterprises, Inc.
Gentlemen:
The undersigned, ______________________, being the chief financial
officer of Fuqua Enterprises, Inc., a Delaware corporation (the "Borrower"),
hereby delivers this Compliance Certificate to the Agent and Lenders as
required by the terms of that certain Amended and Restated Credit Agreement
dated as of June 28, 1996 by and among SunTrust Bank, Atlanta, individually and
as Agent, the Borrower and the Lenders party thereto (the "Credit Agreement").
All terms used herein without definition shall have the meaning set forth in
the Credit Agreement.
1. The undersigned is duly authorized to execute and deliver this
certificate on behalf of the Borrower in his or her capacity as the chief
financial officer of the Borrower.
2. The calculations set forth in Attachment 1 hereto are true and
accurate computations of the financial covenants and the other provisions
identified on such Attachment in accordance with the terms of the Credit
Agreement.
[Add for quarterly reports: 3. The consolidated financial statements
of the Consolidated Companies attached hereto for the fiscal quarter ending
____________________ fairly present in all material respects the financial
condition of the Consolidated Companies as at the end of such fiscal quarter on
a consolidated basis, and the results of operations and statements of cash
flows of the Consolidated Companies for such fiscal quarter and such portion of
Borrower's fiscal year, in accordance with GAAP consistently applied (subject
to normal year-end audit adjustments and the absence of certain footnotes).]
4. Based upon a review of the activities of Consolidated
Companies and the financial statements attached hereto during the period
covered thereby, there exists no Event of Default or Default under the Credit
Agreement.
________________________________________
Name:
Title:
<PAGE> 151
Attachment No. 1 to Compliance Certificate
The Compliance Certificate attached hereto is as of __________________
_________ and pertains to the period from ___________________________ to ______
____________________.
<TABLE>
<S> <C> <C>
1. Debt to Capital Ratio - Calculated Quarterly
a. Funded Debt (including the current portion
thereof) of the Consolidated Companies
-----------------------
b. Funded Debt of Other Persons Guaranteed
by a Consolidated Company
-----------------------
c. Required Stock Redemptions in next
12 months
-----------------------
d. Debt outstanding pursuant to
SunTrust Line of Credit
-----------------------
e. Adjusted Funded Debt (a+b+c+d)
-----------------------
f. Net Worth of Borrower less
Treasury Stock
-----------------------
g. Total Capitalization (e+f)
-----------------------
h. Leverage Ratio e/g %
-----------------------
i. Maximum Leverage Ratio .6:1:00
-----------------------
j. Default Indicated? Yes/No
2. Interest Coverage Ratio - Calculated Quarterly
For Preceding Four Quarters
a. Consolidated EBIT
-----------------------
b. Consolidated Interest Expense
-----------------------
c. Ratio of (a)/(b)
-----------------------
d. Minimum Ratio 2.0:1.0
-----------------------
e. Default Indicated? Yes/No
3. Cash Flow Coverage Ratio - Calculated Quarterly
For Preceding Four Quarters
a. Consolidated Net Income (Loss)
-----------------------
b. Depreciation and Amortization
-----------------------
c. Consolidated EBITDA (a+b)
-----------------------
d. Consolidated Funded Debt
-----------------------
e. Ratio of (c)/(d)
-----------------------
f. Minimum Ratio 4.0:1.0
-----------------------
g. Default Indicated? Yes/No
</TABLE>
<PAGE> 152
4. Indebtedness (Section 7.01)
List all outstanding Indebtedness incurred since later of Closing Date
or date of last Compliance Certificate and indicate provision of Credit
Agreement permitting the same:
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
<TABLE>
<S> <C> <C>
5. Liens (Section 7.02)
a. Amount of Indebtedness permitted
by Section 7.01(d) Secured by Liens $
----------------------
b. Amount Permitted $10,000,000.00
c. Default Indicated? Yes/No
6. Restricted Payments (Section 7.04)
Total Amount of all Restricted Payments
made since Closing Date $
----------------------
50% of Net Income since 6-30-96
(calculated as one accounting period) $
----------------------
+ $2,500,000 $2,500,000.00
Amount Permitted: $
----------------------
Default Indicated? Yes/No
7. Stock Ownership
Amount of Shares of Voting Stock
owned by Fuqua Family as of date hereof
-----------------------
Amount Required 720,000
-----------------------
Default Indicated? Yes/No
</TABLE>
8. Intercompany Loans
As listed below:
<TABLE>
<CAPTION>
Note Delivered
Obligor Obligee Amount Outstanding Pursuant to Assignment?
------- ------- ------------------ -----------------------
<S> <C> <C> <C>
Yes/No
</TABLE>
-2-
<PAGE> 153
EXHIBIT G
ASSIGNMENT AND ACCEPTANCE AGREEMENT
ASSIGNMENT AND ACCEPTANCE AGREEMENT (the "Assignment
Agreement") dated as of _____________, 19__ between ___________________________
___________________ ("Assignor") and _____________________________ ("Assignee").
All capitalized terms used herein and not otherwise defined shall have the
respective meanings provided such terms in the Credit Agreement referred to
below.
W I T N E S S E T H:
WHEREAS, Assignor is a party to an Amended and Restated Credit
Agreement, dated as of June 28, 1996 (as amended to the date hereof, the
"Credit Agreement"), among Fuqua Enterprises, Inc., a Delaware corporation (the
"Borrower"), various financial institutions (including Assignor, the "Lenders")
and SunTrust Bank, Atlanta, as Agent (the "Agent"); and
WHEREAS, Assignor has a Revolving Credit Commitment of
$___________ under the Credit Agreement pursuant to which it has made
outstanding Advances; and
WHEREAS, Assignor and Assignee wish Assignor to assign to
Assignee its rights under the Credit Agreement with respect to a portion of its
Revolving Credit Commitment and of its outstanding Advances thereunder; and
WHEREAS, Assignor and Assignee wish Assignee to assume the
obligations of Assignor under the Credit Agreement to the extent of the rights
so assigned;
NOW THEREFORE, in consideration of the mutual agreements
herein contained, the parties hereto agree as follows:
1. Assignment. Assignor hereby assigns to Assignee,
without recourse, or representation or warranty (other than expressly provided
herein) and subject to Section 4(b) hereof, ___% as the "Assignee's Share"
("Assignee's Share") of all of Assignor's rights, title and interest arising
under the Credit Agreement relating to Assignor's Revolving Credit Commitment,
including with respect to Assignee's Share of the Advances heretofore made by
the Assignor under the Revolving Credit Commitment pursuant to the Credit
Agreement. The dollar amount of Assignee's Share of Assignor's Revolving
Credit Commitment is $__________ and the dollar amount of Assignee's Share of
Assignor's outstanding Advances under the Revolving Credit Commitments is
$__________.
2. Assumption. Assignee hereby assumes from Assignor
all of Assignor's obligations arising under the Credit Agreement relating to
Assignee's Share of Assignor's Revolving Credit Commitment and of the Advances
outstanding thereunder. It is the intent of the parties hereto
<PAGE> 154
that Assignor shall be released from all of its obligations under the Credit
Agreement relating to Assignee's Share.
3. Assignments; Participations. Assignee may not assign
all or any part of the rights granted to it hereunder. Assignee may sell or
grant participations in all or any part of the rights granted to it hereunder
in accordance with the provisions of Section 10.06 of the Credit Agreement.
4. Payment of Interest and Fees to Assignee.
(a) As of the date hereof interest is payable by
the Borrower in respect of Assignee's Share of the Eurodollar Advances at a rate
equal to ___% per annum above LIBOR and a Commitment Fee equal to ___% per annum
on the Assignee's Share of the average daily unused portion of the Revolving
Credit Commitment.
(b) Notwithstanding anything to the contrary
contained in this Assignment Agreement, if and when Assignor receives or
collects any payment of interest on any Advance attributable to Assignee's Share
or any payment of the Commitment Fee attributable to Assignee's Share which, in
any such case, are required to be paid to Assignee pursuant to clause (a) above,
Assignor shall distribute to Assignee such payment but only to the extent such
interest or fee accrued after the Assignment Effective Date (as hereinafter
defined).
(c) Notwithstanding anything to the contrary
contained in this Assignment Agreement, if and when Assignee receives or
collects any payment of interest on any Advance or any payment of the Commitment
Fee which, in any such case, is required to be paid to Assignor pursuant to
clause (a) above, Assignee shall distribute to Assignor such payment.
5. Payments on Assignment Effective Date. In
consideration of the assignment by Assignor to Assignee of Assignee's Share of
Assignor's Revolving Credit Commitment and Advances as set forth above,
Assignee agrees to pay to Assignor on or prior to the Assignment Effective Date
an amount specified by Assignor in writing on or prior to the Assignment
Effective Date which represents Assignee's Share of the principal amount of the
respective Advances made by Assignor pursuant to the Revolving Credit
Commitment and outstanding on the Assignment Effective Date.
6. Effectiveness. (a) This Assignment Agreement shall
become effective on the date (the "Assignment Effective Date") (which is at
least five days after the date hereof) on which (i) Assignor and Assignee shall
have signed a copy hereof (whether the same or different copies) and, in the
case of Assignee, shall have delivered same to Assignor, (ii) the Borrower
shall have consented hereto, (iii) a copy of the fully executed Assignment, a
fee of $3,000 and the Revolving Credit Notes evidencing the Revolving Credit
Commitment assigned hereby shall have been delivered to the Agent, and (iv)
Assignee shall have paid to Assignor the amount set forth in Section 5.
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<PAGE> 155
(b) It is agreed that all interest on any Advance
attributable to Assignee's Share and all Commitment Fees attributable to
Assignee's Share, which, in each case, accrues on and after the Assignment
Effective Date shall be paid directly to the Assignee in accordance with the
terms of the Credit Agreement.
7. Amendment of Credit Agreement. On the Assignment
Effective Date the Credit Agreement shall be amended by deeming the signature
of Assignee herein as a signature to the Credit Agreement. The Assignee shall
be deemed a "Lender" for all purposes under the Credit Agreement and shall be
subject to and shall benefit from all of the rights and obligations of a Lender
under the Credit Agreement. The address of the Assignee for notice purposes
shall be as set forth below, and the Credit Agreement shall be amended by
deeming such signature page and address to be included thereon. Without
limiting the generality of the foregoing, Assignee agrees that it will perform
its obligations as a Lender under the Credit Agreement as required by the terms
thereof and Assignee appoints and authorizes the Agent to take such actions as
Agent on its behalf and exercise such powers under the Credit Agreement and the
other loan documents as are delegated to the Agent by the terms of the Credit
Agreement and the other credit documents, together with such powers as are
reasonably incidental thereto.
8. Representations and Warranties. Each of the Assignor
and the Assignee represents and warrants to the other party as follows:
(a) it has full power and authority, and has taken
all action necessary, to execute and deliver this Assignment Agreement and to
fulfill its obligations under, and to consummate the transactions contemplated
by, this Assignment Agreement;
(b) the making and performance by it of this
Assignment Agreement and all documents required to be executed and delivered by
it hereunder do not and will not violate any law or regulation of the
jurisdiction of its incorporation or any other law or regulation applicable to
it;
(c) this Assignment Agreement has been duly
executed and delivered by it and constitutes its legal, valid and binding
obligation, enforceable in accordance with its terms; and
(d) all consents, licenses, approvals,
authorizations, exemptions, registrations, filings, opinions and declarations
from or with any agency, department, administrative authority, statutory
corporation or judicial entity necessary for the validity or enforceability of
its obligations under this Assignment Agreement have been obtained, and no
governmental authorizations other than any already obtained are required in
connection with its execution, delivery and performance of this Assignment
Agreement.
-3-
<PAGE> 156
9. Expenses. The Assignor and the Assignee agree that
each party shall bear its own expenses in connection with the preparation and
execution of this Assignment Agreement.
10. Miscellaneous. (a) Assignor shall not be responsible
to Assignee for the execution (by any party other than the Assignor),
effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of the Credit Agreement, the Revolving Credit Notes or the Note
Assignments or for any representations, warranties, recitals or statements made
therein or in any written or oral statement or in any financial or other
statements, instruments, reports, certificates or any other documents made or
furnished or made available by Assignor to Assignee or by or on behalf of the
Borrower or any other Credit Party to Assignor or Assignee in connection with
the Credit Agreement, the Revolving Credit Notes or the Note Assignments and
the transactions contemplated thereby. Assignor shall not be required to
ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained in the Credit
Agreement, the Revolving Credit Notes or the Note Assignments or as to the use
of the proceeds of the Advances or as to the existence or possible existence of
any event which constitutes an Event of Default or which with the giving of
notice or the passage of time or both would constitute an Event of Default.
(b) Assignee represents and warrants that it has
made its own independent investigation of the financial condition and affairs
of the Borrower and each other Credit Party in connection with the making of
the Advances and the assignment of Assignee's Share of Assignor's Revolving
Credit Commitment and of Assignor's Advances to Assignee hereunder and has made
and shall continue to make its own appraisal of the creditworthiness of the
Borrower and each other Credit Party. Assignor shall have no duty or
responsibility either initially or on a continuing basis to make any such
investigation or any such appraisal on behalf of Assignee or to provide
Assignee with any credit or other information with respect thereto, whether
coming into its possession before the making of the Advances or at any time or
times thereafter and shall further have no responsibility with respect to the
accuracy of, or the completeness of, any information provided to Assignee,
whether by Assignor or by or on behalf of either the Borrower or any other
Credit Party.
(c) THE VALIDITY, CONSTRUCTION AND ENFORCEABILITY
OF THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
GEORGIA.
(d) No term or provision of this Assignment
Agreement may be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by both parties.
(e) This Assignment Agreement may be executed in
one or more counterparts, each of which shall be an original but all of which,
taken together, shall constitute one and the same instrument.
(f) The Assignor may at any time or from time to
time grant to others assignments or participations in its Revolving Credit
Commitment or the Advances but not in the
-4-
<PAGE> 157
portions thereof assigned to Assignee pursuant to this Assignment Agreement.
The Assignor represents and warrants that it has not at any time prior to the
Assignment Effective Date encumbered or assigned the portion of its Revolving
Credit Commitment or Advances being assigned hereunder.
(g) All payments hereunder or in connection
herewith shall be made in Dollars and in immediately available funds, if
payable to the Assignor, to the account of the Assignor at its address as
designated in the Credit Agreement, and, if payable to the Assignee, to the
account of the Assignee's address, as designated on the signature page hereof.
(h) This Assignment Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Neither of the parties hereto may assign or transfer
any of its rights or obligations under this Assignment Agreement without the
prior consent of the other party.
(i) All representations and warranties made
herein and indemnities provided for herein shall survive the consummation of
the transaction contemplated hereby.
(j) The Assignee acknowledges receipt of copies
of the documents received in connection with the transactions contemplated by
the Credit Agreement and this Assignment Agreement.
-5-
<PAGE> 158
IN WITNESS WHEREOF, the parties hereto have executed this
Assignment Agreement as of the date first above written.
<TABLE>
<S> <C>
[NAME OF ASSIGNOR]
By:
_________________________________________
Title:
Assignee's Share of [NAME OF ASSIGNEE]
Revolving Credit Commitment:
$ By:
_____________________________ _________________________________________
Title:
</TABLE>
Address:
___________________________________________________
___________________________________________________
___________________________________________________
Tel. No: ________________________
Fax No: ________________________
CONSENTED TO AS OF THE
DATE SET FORTH ABOVE:
FUQUA ENTERPRISES, INC.
By:________________________________________
Title:__________________________________
-6-
<PAGE> 159
EXHIBIT H
NOTE ASSIGNMENT AGREEMENT
THIS NOTE ASSIGNMENT AGREEMENT (the "Assignment") dated as of
June 28, 1996, made by FUQUA ENTERPRISES, INC., a Delaware corporation (the
"Borrower") and each of the Subsidiaries of the Borrower named on the
signature pages hereof or from time to time becoming a party hereto (the
"Assigning Subsidiaries" and together with the Borrower, collectively, the
"Assignors" and individually, an "Assignor"), in favor of SUNTRUST BANK,
ATLANTA a Georgia banking corporation, (the "Agent"), in its capacity as agent
for banks and other lending institutions parties to the Credit Agreement (as
hereinafter defined) and each assignee thereof becoming a "Lender" as provided
therein (the "Lenders").
PRELIMINARY STATEMENTS:
(1) Certain lenders (together with other lenders that may
from time to time become parties thereto, the "Lenders"), the Agent and the
Borrower have entered into that certain Amended and Restated Credit Agreement
dated as of the date hereof (as amended, supplemented or otherwise modified
from time to time, the "Credit Agreement", the terms defined therein and not
otherwise defined herein being used herein as therein defined).
(2) Pursuant to the Credit Agreement, the Lenders have
agreed to allow certain Intercompany Loans to and from the Borrower and its
Subsidiaries and between Subsidiaries of the Borrower upon the condition that
such Intercompany Loans are evidenced by an Intercompany Note which has been
pledged to the Agent for the benefit of the Lenders to secure the Obligations
of the Borrower.
(3) The parties hereto wish to enter into this Assignment in
fulfillment of the above-referenced condition.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants hereinafter contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
each of the Assignors hereby agrees with the Agent as follows:
SECTION 1. ASSIGNMENT. As collateral (collectively the
"Assigned Collateral") to secure the Secured Obligations (as defined in Section
2) each of the Assignors hereby:
(a) collaterally assigns and grants to the Agent, for the
ratable benefit of the Lenders, a lien on and a security interest in,
all of Assignor's right, title and interest in and to the Intercompany
Loans owing to each party hereto from the Borrower or any Subsidiary
of the Borrower, each Intercompany Note evidencing any such
Intercompany Loan and all other instruments evidencing such
Intercompany Loans, all other Intercompany Loan
<PAGE> 160
Documents and all renewals and extensions thereof, accessions thereto
and substitutions therefor, whether now owned or held or hereafter
owned or held by any such Assignor; and
(b) collaterally assigns and grants to the Agent, for the
ratable benefit of the Lenders, to the maximum extent permitted by
applicable law, a lien on and a security interest in, all Proceeds of
the foregoing. Proceeds shall have the meaning assigned that term
under the Uniform Commercial Code as in effect in the State of Georgia
or under other relevant law and, in any event, shall include, but not
be limited to, any and all (i) instruments representing obligations
to pay amounts in respect of Assigned Collateral and (ii) other
amounts from time to time paid or payable under or in connection with
any of the Assigned Collateral.
Each of the parties hereto acknowledges and agrees that the assignment and
security interest created by this Assignment is, and is intended to be, a first
priority security interest with respect to all Intercompany Loans, Intercompany
Notes, Intercompany Loan Documents or other Assigned Collateral, whether now
existing or hereafter incurred or executed.
SECTION 2. SECURED OBLIGATIONS. This Assignment secures, and
the Assigned Collateral is collateral security for, the prompt payment or
performance in full when due, whether at stated maturity, by acceleration or
otherwise of all payments and other Obligations of the Borrower now existing or
hereafter arising, whether for principal, premium or interest (all such
obligations being the "Secured Obligations").
SECTION 3. NO RELEASE. Nothing set forth in this Assignment
shall relieve any Assignor from the performance of any term, covenant,
condition or agreement on such Assignor's part to be performed or observed
under or in respect of any of the Assigned Collateral or from any liability to
any entity under or in respect of any of the Assigned Collateral or impose any
obligation on the Agent or any Lender to perform or observe any such term,
covenant, condition or agreement on any Assignor's part to be so performed or
observed or impose any liability on the Agent or any Lender for any act or
omission on the part of any Assignor relating thereto or for any breach of any
representation or warranty on the part of any Assignor contained in this
Assignment, or in respect of the Assigned Collateral or made in connection
herewith or therewith. This paragraph shall survive the termination of this
Assignment and the discharge of each Assignor's other obligations hereunder.
SECTION 4. DELIVERY OF ASSIGNED COLLATERAL. All certificates
or instruments representing or evidencing the Intercompany Loans from the
Borrower or any Subsidiary of the Borrower, including without limitation, the
Intercompany Notes, upon delivery thereof to any Assignor, shall be promptly
delivered to and held by the Agent pursuant hereto and shall be 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.
-2-
<PAGE> 161
SECTION 5. REPRESENTATIONS AND WARRANTIES. Each Assignor
represents and warrants as follows:
(a) Such Assignor is, and at the time of the delivery of
the Assigned Collateral pursuant to Section 4 of this Assignment will
be, the legal and beneficial owner of the Assigned Collateral free and
clear of any Lien except for the Lien and security interest created by
this Assignment;
(b) Such Assignor has full corporate power and authority
and legal right to pledge all the Assigned Collateral pursuant to this
Assignment and make the transfers contemplated by Section 4 hereof;
(c) No consent of any other party (including, without
limitation, stockholders or creditors of such Assignor) and no
consent, authorization, approval, or other action by, and no notice to
or filing with, any governmental authority or other Person is required
either (i) for the transfer by such Assignor of the Assigned
Collateral as contemplated by this Assignment or for the execution,
delivery or performance of this Assignment by such Assignor or (ii)
for the exercise by the Agent of the remedies in respect of the
Assigned Collateral pursuant to this Assignment, except as may be
required in connection with such disposition by laws affecting the
offering and sale of instruments generally or as otherwise required by
laws affecting creditors in general in connection with the exercise of
remedies by a secured party;
(d) Except as otherwise permitted by this Assignment, the
Assignors at all times will be the sole beneficial owners of the
Assigned Collateral;
(e) All information set forth herein relating to the
Assigned Collateral is accurate and complete in all material respects
as of the date hereof.
SECTION 6. SUPPLEMENTS, FURTHER ASSURANCES. Each Assignor
agrees that at any time and from time to time, at the expense of the Borrower,
any Assignor will promptly execute and deliver all further instruments and
documents and take all further action that may be necessary or that the Agent
may reasonably request, in order to protect any security interest granted or
purported to be granted hereby or to enable the Agent to exercise and enforce
its rights and remedies hereunder with respect to any Assigned Collateral.
SECTION 7. PAYMENTS ON NOTES.
(a) As long as no Event of Default shall have occurred
and be continuing under the terms of this Assignment, each Assignor shall be
entitled to receive and retain, and to utilize free and clear of the lien of
this Assignment, any and all payments of interest and principal in respect of
the Assigned Collateral; provided, however, that any and all payments in the
form of securities or notes shall be, and shall be forthwith delivered to the
Agent to hold as, Assigned Collateral and shall,
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<PAGE> 162
if received by any Assignor, be received in trust for the benefit of the Agent,
be segregated from the other property or funds of such Assignor, and be
forthwith delivered to the Agent as Assigned 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 under the terms of this Assignment, all rights of each
Assignor to receive payments of interest or principal which it would otherwise
be authorized to receive and retain pursuant to Section 7(a) above shall cease
and all rights shall thereupon become vested in the Agent who shall thereupon
have the sole right to receive and hold such payments during the continuance of
such Event of Default.
(c) All payments which are received by any Assignor
contrary to the provisions of Section 7(b) above shall be received in trust for
the benefit of the Agent, shall be segregated from other funds of such Assignor
and shall be forthwith paid over to the Agent as Assigned Collateral in the
same form as so received (with any necessary endorsement).
SECTION 8. COVENANTS. Each of the Assignors hereby covenants
and agrees as follows:
(a) Not to encumber the Assigned Collateral with any
Lien, other than the Lien of this Assignment;
(b) To permit, and cause each of its Subsidiaries to
permit, any representative of the Agent or any Lender, at the Agent's
or such Lender's expense, to visit and inspect any of its property, to
examine its books and records and to make copies and take extracts
therefrom, and to discuss its affairs, finances and accounts with its
officers, all at such reasonable times, upon reasonable prior notice,
and as often as the Agent or such Lender may reasonably request;
provided that, no notice shall be required in the event that an Event
of Default has occurred and is continuing; and
(c) Not to sell or otherwise dispose of, or grant any
option or warrant with respect to, any of the Assigned Collateral; and
(d) To assign hereunder, in accordance with Sections 2
and 7, any and all additional instruments, agreements and other
documents which are to become part of the Assigned Collateral.
SECTION 9. AGENT APPOINTED ATTORNEY-IN FACT. Each of the
Assignors hereby appoints the Agent as such Assignor's attorney-in-fact, with
full authority in the place and stead of such Assignor and in the name of such
Assignor or otherwise, from time to time 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 purposes of this Assignment; provided that, unless
an Event of Default has occurred and is continuing, the Agent shall not
exercise its rights pursuant to this Section 9 until five (5) days after
written request to the Assignor to take such action or to execute such
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<PAGE> 163
instrument. If such Assignor fails to perform any agreement contained herein
within five (5) days after receipt of a written request to do so from the
Agent, the Agent may itself perform, or cause performance of, such agreement.
SECTION 10. REMEDIES UPON DEFAULT; DECISIONS RELATING TO
EXERCISE OF REMEDIES.
A. DEFINITION OF EVENTS OF DEFAULT. The following
specified events shall constitute events of default ("Events of Default"):
(a) The occurrence of any "Event of Default" pursuant to
the Credit Agreement (as such term is defined therein);
(b) any representation, warranty or statement made or
deemed to be made by any of the Assignor or any of its officers under
or in connection with this Assignment shall have been incorrect in any
material respect when made or deemed to be made; or
(c) any the Assignor shall fail to observe or perform any
covenant or agreement set forth in this Assignment.
B. REMEDIES UPON DEFAULT. If any Event of Default under
this Assignment shall have occurred and be continuing, the Agent may from
time to time exercise, in its sole discretion and without further notice or
demand, with respect to the Assigned Collateral, in addition to other rights
and remedies provided for herein or otherwise available to it, all of the
rights and remedies of a secured party under the Uniform Commercial Code (the
"Code") in effect in the State of Georgia.
SECTION 11. APPLICATION OF PROCEEDS. After and during the
continuance of an Event of Default described in Section 10, any cash held by
the Agent as Assigned Collateral and all cash proceeds received by the Agent
(all such cash being "Proceeds") in respect of any sale of, collection from, or
other realization upon all or any part of the Assigned Collateral pursuant to
the exercise by the Agent of its remedies as a secured creditor as provided in
Section 12 of this Assignment shall be applied promptly from time to time by
the Agent:
FIRST, to the payment of the reasonable costs and expenses of
such sale, collection or other realization, including all expenses,
liabilities and advances made or incurred by the Agent or the Lenders
in connection therewith;
SECOND, to the payment of the Secured Obligations then due;
and
THIRD, after payment in full of all Secured Obligations, to
the Assignor owed such indebtedness, or its successors or assigns, or
to whomsoever may be lawfully entitled to
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<PAGE> 164
receive the same or as a court of competent jurisdiction may direct,
of any surplus then remaining from such Proceeds.
SECTION 12. EXPENSES. The Assignors, jointly and severally,
will upon demand pay to the Agent and each Lender the amount of any and all
reasonable expenses, including the reasonable fees and expenses of its counsel
and of any experts and agents, which the Agent or any Lender may actually incur
in connection with (i) the administration of this Assignment, (ii) the custody
or preservation of, or the sale of, collection from, or other realization upon,
any of the Assigned Collateral, (iii) the exercise or enforcement of any of the
rights of the Agent or any Lender hereunder or (iv) the failure by any Assignor
to perform or observe any of the provisions hereof except where such expenses
result solely from the gross negligence or willful misconduct of the Agent or
such Lender.
SECTION 13. NO WAIVER. No failure on the part of the Agent
or any Lender 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 Agent or any
Lender of any right, 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 full extent permitted by law cumulative and
are not exclusive of any remedies provided by law.
SECTION 14. AMENDMENTS, ETC. This Assignment may not be
amended, modified or waived except with the written consent of each of the
Assignors and the Agent. Any amendment, modification or supplement of or to
any provision of this Assignment, any termination or waiver of any provision of
this Assignment and any consent to any departure by any Assignor from the terms
of any provision of this Assignment shall be effective only in the specific
instance and for the specific purpose for which made or given. No notice to or
demand upon any Assignor in any instance hereunder shall entitle such Assignor
or any other Assignor to any other or further notice or demand in similar or
other circumstances.
SECTION 15. TERMINATION. This Assignment shall terminate
upon the payment in full in cash in the applicable currency of all Secured
Obligations, and then the Agent shall, upon the request and at the expense of
the Assignors, forthwith assign, transfer and deliver, against receipt and
without recourse to the Agent or any Lender, such of the Assigned Collateral as
shall not have been sold or otherwise applied pursuant to the terms hereof to
or on the order of the Assignor.
SECTION 16. NOTICES. All notices, demands, instructions and
other communications required or permitted to be given to or made upon any
party hereto shall be in writing sent by first-class, registered or certified
mail, postage prepaid and addressed as follows:
(1) If to Agent, at the address specified in the Credit
Agreement, and
(2) If to Assignors, at the address specified on the
signature page hereto for such Assignor.
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<PAGE> 165
Either the Agent or any Assignor may change its address for notice purposes by
notice to the other parties as specified herein.
SECTION 17. ADDITIONAL ASSIGNORS. Upon execution and delivery
by any Subsidiary of the Borrower of an instrument in the form of Annex 1, such
Subsidiary of the Borrower shall become an Assignor hereunder with the same
force and effect as if originally named an Assignor herein (each an "Additional
Assignor"). The execution and delivery of any such instrument shall not
require the consent of any Assignor hereunder. The rights and obligations of
each Assignor hereunder shall remain in full force and effect notwithstanding
the addition of any Additional Assignor as a party to this Assignment.
SECTION 18. CONTINUING SECURITY INTEREST; SUCCESSORS AND
ASSIGNS. This Assignment shall create a continuing security interest in the
Assigned Collateral and shall (i) remain in full force and effect until payment
in full in cash in the applicable currency of all Secured Obligations or
otherwise terminated pursuant to Section 15, (ii) be binding upon the
Assignors, their respective successors and assigns, and (iii) inure, together
with the rights and remedies of the Agent hereunder, to the benefit of the
Agent, each Lender and each of its successors, transferees and assigns.
SECTION 19. GOVERNING LAW. This Assignment shall be governed
by, and construed in accordance with, the laws of the State of Georgia without
regard to the principles of conflicts of laws thereof.
SECTION 20. EXECUTION IN COUNTERPARTS. This Assignment may
be executed in any number of counterparts, each of which counterparts, when so
executed and delivered, shall be deemed to be an original and all of which
counterparts, taken together, shall constitute one and the same Assignment.
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<PAGE> 166
IN WITNESS WHEREOF, each of the Assignors has caused this
Assignment to be duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.
<TABLE>
<S> <C>
ASSIGNORS:
ADDRESS: FUQUA ENTERPRISES, INC.
One Atlantic Center
1201 W. Peachtree Street By: __________________________________________
Suite 5000 Lawrence P. Klamon
Atlanta, GA 30309-3424 President and Chief Executive Officer
Attest: __________________________________________
Mildred H. Hutcheson
Secretary
[CORPORATE SEAL]
ADDRESS: IRVING TANNING COMPANY
One Atlantic Center
1201 W. Peachtree Street By: __________________________________________
Suite 5000 Title: __________________________________
Atlanta, GA 30309-3424
Attest: __________________________________________
Title: __________________________________
[CORPORATE SEAL]
</TABLE>
-8-
<PAGE> 167
ANNEX 1
SUPPLEMENT
TO
NOTE ASSIGNMENT AGREEMENT
THIS SUPPLEMENT TO NOTE ASSIGNMENT AGREEMENT (this "Supplement to Note
Agreement"), dated as of ___________, 19__, made by __________________________,
a ________ corporation (the "Additional Assignor"), in favor of SUNTRUST BANK,
ATLANTA, a Georgia banking corporation (the "Agent"), in its capacity as agent
for banks and other lending institutions parties to the Credit Agreement (as
hereinafter defined) and each assignee thereof becoming a "Lender" as provided
therein (the "Lenders").
PRELIMINARY STATEMENTS:
(1) Certain lenders (together with other lenders that may
from time to time become parties thereto, the "Lenders"), the Agent and the
Borrower have entered into that certain Amended and Restated Credit Agreement
dated as of June 28, 1996 (as amended, supplemented or otherwise modified from
time to time, the "Credit Agreement", the terms defined therein and not
otherwise defined herein being used herein as therein defined).
(2) Pursuant to the Credit Agreement, the Lenders have
agreed to allow certain Intercompany Loans to and from the Borrower and its
Subsidiaries and between Subsidiaries of the Borrower upon the condition that
such Intercompany Loans are evidenced by an Intercompany Note which has been
pledged to the Agent for the benefit of the Lenders to secure the Obligations
of the Borrower.
(3) The Borrower and certain Subsidiaries of the Borrower
(collectively, the "Assignors") have executed and delivered that certain Note
Assignment Agreement dated as of June 28, 1996 (the "Note Assignment
Agreement") pursuant to which the Assignors have assigned and granted to the
Agent, for the benefit of the Lenders, a lien on and a security interest in,
all of their right title and interest in and to the Intercompany Loans, the
Intercompany Notes and the Intercompany Loan Documents to secure all of the
Obligations of the Borrower under the Credit Agreement and the other Credit
Documents (as defined in the Credit Agreement);
(4) It is a condition subsequent to the Lenders' obligation to
make loans to the Borrower under the Credit Agreement that the Additional
Assignor execute and deliver to the Agent this Supplement to Note Agreement,
and the Additional Assignor desires to execute and deliver this Supplement to
Note Agreement to satisfy such condition subsequent;
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<PAGE> 168
NOW, THEREFORE, in consideration of the premises and the
mutual covenants hereinafter contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Additional Assignor hereby agrees with the Agent as follows:
1. DEFINED TERMS. Capitalized terms not otherwise defined herein
which are used in the Note Assignment Agreement are used herein with the
meanings specified for such terms in the Note Assignment Agreement.
2. ADDITIONAL ASSIGNOR. The Additional Assignor agrees that it
shall be and become an Assignor for all purposes of the Note Assignment
Agreement and shall be fully bound thereby to the same extent and with the same
effect as though the Additional Assignor had been one of the Assignor
originally executing and delivering the Note Assignment Agreement. Without
limiting the foregoing, the Additional Assignor hereby agrees with the Agent
that:
(a) As collateral (collectively the "Assigned
Collateral") to secure the Secured Obligations (as defined in Section
2(b)) the Additional Assignors hereby:
(i) collaterally assigns and grants to the Agent,
for the ratable benefit of the Lenders, a lien on and a
security interest in, all of the Additional Assignor's right,
title and interest in and to the Intercompany Loans owing to
each party hereto from the Borrower or any Subsidiary of the
Borrower, each Intercompany Note evidencing any such
Intercompany Loan and all other instruments evidencing such
Intercompany Loans, all other Intercompany Loan Documents and
all renewals and extensions thereof, accessions thereto and
substitutions therefor, whether now owned or held or hereafter
owned or held by such Additional Assignor; and
(b) collaterally assigns and grants to the Agent, for the
ratable benefit of the Lenders, to the maximum extent permitted by
applicable law, a lien on and a security interest in, all Proceeds of
the foregoing. Proceeds shall have the meaning assigned that term
under the Uniform Commercial Code as in effect in the State of Georgia
or under other relevant law and, in any event, shall include, but not
be limited to, any and all (i) instruments representing obligations
to pay amounts in respect of Assigned Collateral and (ii) other
amounts from time to time paid or payable under or in connection with
any of the Assigned Collateral.
Each of the parties hereto acknowledges and agrees that the assignment and
security interest created by this Assignment is, and is intended to be, a first
priority security interest with respect to all Intercompany Loans, Intercompany
Notes, Intercompany Loan Documents or other Assigned Collateral, whether now
existing or hereafter incurred or executed.
(c) This Assignment secures, and the Assigned Collateral is
collateral security for, the prompt payment or performance in full
when due, whether at stated maturity, by acceleration or otherwise of
all payments and other Obligations of the Borrower now existing
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<PAGE> 169
or hereafter arising, whether for principal, premium or interest (all
such obligations being the "Secured Obligations").
All references in the Note Assignment Agreement to "Assignors" or any
"Assignor" shall be deemed to include and to refer to the Additional Assignor.
3. GOVERNING LAW. This Supplement to Note Agreement shall be
governed by, and construed in accordance with, the laws of the State of Georgia
without regard to the principles of conflicts of laws thereof.
IN WITNESS WHEREOF, the Additional Assignor has caused this
Supplement to Note Agreement to be duly executed and delivered under seal by
its duly authorized officers as of the date first above written.
<TABLE>
<S> <C>
Address for Notices: ADDITIONAL ASSIGNOR:
__________________________
By: __________________________________________
Title: ___________________________________
Attest: __________________________________________
Title: ___________________________________
[CORPORATE SEAL]
</TABLE>
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<PAGE> 170
EXHIBIT A
1. Promissory Note, dated as of June 28, 1996, made by Irving Tanning
Company in favor of Fuqua Enterprises, Inc., in the maximum principal
amount of $100,000,000.
2. Promissory Note, dated as of June 28, 1996, made by Kroy Tanning
Company, Incorporated in favor of Irving Tanning Company, in the
maximum principal amount of $6,500,000.
3. Intercompany Note dated June 28, 1996 executed by Basic American
Medical Products, Inc. in favor of Fuqua Enterprises, Inc. and in the
maximum principal amount of $100,000,000.
4. Intercompany Note dated June 28, 1996 executed by Lumex Medical
Products, Inc. in favor of Fuqua Enterprises, Inc. and in the maximum
principal amount of $100,000,000.
5. Intercompany Note dated June 28, 1996 executed by MUL Acquisition
Corp. II in favor of Fuqua Enterprises, Inc. and in the maximum
principal amount of $100,000,000.
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<PAGE> 171
EXHIBIT I
FORM OF INTERCOMPANY NOTE
$________________ Atlanta, Georgia
______________, 199_
FOR VALUE RECEIVED, the undersigned, _______________________, a
_______________ corporation (the "Borrower") hereby unconditionally promises to
pay to the order of FUQUA ENTERPRISES, INC. (together with any other holder
hereof, the "Lender"), at its office at 1201 West Peachtree Street, Suite 5000,
Atlanta, Georgia 30309 or at such other address as may be specified by the
Lender to the Borrower, the principal sum of ___________________________ AND
___/100 DOLLARS ($_________________), or such lesser or greater amount as may
be the aggregate principal amount outstanding of all advances (each an
"Advance") made by the Lender to the Borrower pursuant to this Note.
The Borrower agrees to pay principal at said office, in like money,
from time to time on DEMAND by the Lender. The Borrower further agrees to pay
interest at said office, in like money, on the outstanding principal balance of
Advances owing hereunder at the variable rate equal to (a) the lowest rate of
interest payable from time to time by Fuqua Enterprises, Inc. on Revolving
Loans outstanding under and as defined in the Amended and Restated Credit
Agreement dated as of July __, 1996 (the "Credit Agreement") by and among Fuqua
Enterprises, Inc., certain Lenders from time to time party thereto and SunTrust
Bank, Atlanta, as Agent (the "Agent") or (b) if no such Revolving Loans shall
be then outstanding under the Credit Agreement or if such Credit Agreement
shall have been terminated, at the rate of interest publicly announced by the
Agent as its prime lending rate. All accrued and unpaid interest shall be
payable on DEMAND.
The date and amount of each Advance made by the Lender to the Borrower
under this Note, each repayment of principal in respect thereof and the accrual
of interest under this Note, shall be recorded by the Lender on its books and,
prior to any transfer of this Note, endorsed by the Lender on Schedule I
attached hereto; provided, however, that the failure of the Lender to make any
such recordation or endorsement shall not affect the obligation of the Borrower
to make a payment when due of any amount owing under this Note. Any such
recordations or endorsements made by the Lender on
<PAGE> 172
its books or this Note shall be conclusive and binding on the Borrower absent
manifest error.
The Borrower hereby waives presentment, demand, protest and notice of
any kind. No failure to exercise, and no delay in exercising any rights
hereunder on the part of the holder hereof shall operate as a waiver of such
rights.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF GEORGIA.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Note under seal as of the date written above.
______________________________
By:___________________________
Name:____________________
Title:___________________
<PAGE> 173
SCHEDULE I
<TABLE>
<CAPTION>
Amount of Amount of Outstanding
Date Borrowing Payment Principal Balance Notation
- ---- --------- --------- ----------------- --------
<S> <C> <C> <C> <C>
</TABLE>
<PAGE> 1
EXHIBIT 10(b)
FUQUA
ENTERPRISES, INC.
March 26, 1996
Mr. Sergio Diaz
President
Local 422-S, Production Service and Sales
District Council, IUC, AFL-CIO
3250 Veterans Memorial Highway
Bohemia, NY 11716
Re: Recognition of Local 422-S and acceptance of current Collective
Bargaining Agreement by new owner of Lumex.
Dear Mr. Diaz:
As you know, the Lumex Division of Lumex, Inc. will be sold to a subsidiary
of Fuqua Enterprises, Inc. known as Lumex Medical Products, Inc. The transaction
is expected to close in April. In hopes of continuing the cooperative and
mutually beneficial relationship between your union and the management of Lumex
Division, we have agreed to recognize the union and adopt the Collective
Bargaining Agreement negotiated between Local 422-S, Production Service and
Sales District Council and Lumex Division on October 19, 1995 and covering the
period October 20, 1995 through October 19, 1998. Consequently, on the date of
sale of the Lumex Division, that Collective Bargaining Agreement will be
formally assigned in its entirety to the new owners of Lumex Division, Lumex
Medical Products, Inc. Under this arrangement, the new owner will be bound by,
and receive benefits of, the Collective Bargaining Agreement in all respects and
all terms will remain the same. Of course, some minor technical changes, such as
the names of certain funds, will be made because the ownership is changing, (for
example, the "Lumex, Inc. Savings and Investment Plan Retirement Account" in
Article XIII of the Collective Bargaining Agreement will change to the "Fuqua
Enterprises, Inc. Savings and Retirement Plan for Union Employees", effective
Closing Date) but the substantive terms of the Agreement will not change in any
way.
We would appreciate your signing on the signature line below to acknowledge
receipt of this letter and assignment of the Collective Bargaining Agreement
from Lumex Division to Lumex Medical Products, Inc. We are pleased to be working
with you and we look forward to a solid and cooperative relationship with Local
422-S.
Sincerely,
/s/ JOHN J. HUNTZ, Jr.
--------------------------------------
John J. Huntz, Jr.
/s/ SERGIO DIAZ
- --------------------------------------
Sergio Diaz, President
Local 422-S, Production Service and Sales
District Counsel, IUC, AFL-CIO
<PAGE> 2
AGREEMENT
between
LUMEX DIVIDION OF
LUMEX, INC.
and
LOCAL 422-S, PRODUCTION SERVICE AND
SALES DISTRICT COUNCIL, IUC, AFL-CIO
October 20, 1995 -- October 19, 1998
<PAGE> 3
INDEX
<TABLE>
<CAPTION>
ARTICLE PAGE
------- ----
<S> <C> <C>
Bereavement Leave............................................................ XIV 13
Bulletin Board............................................................... XVII 14
Complete Settlement.......................................................... XXIII 19
Discharge and Discipline..................................................... XIX 15
Dues Checkoff................................................................ III 2
Employer Reviews............................................................. XV 13
Grievance Procedure.......................................................... XX 16
Health and Welfare Program................................................... XII 10
Hiring Practice.............................................................. XVI 14
Holidays..................................................................... V 3
Injury on the Job............................................................ XXVI 20
Jury Duty.................................................................... XI 10
Legality..................................................................... XXV 20
Management of the Business; Flexibility of Job Assignments................... XXIV 19
Recognition of the Union..................................................... I 1
Reporting Pay................................................................ XXVII 21
Rest Periods................................................................. XXI 18
Retirement Fund.............................................................. XIII 12
Seniority.................................................................... VII 6
Sick/Personal Leave.......................................................... X 9
Strike and Lockout........................................................... XXII 18
Term of Agreement............................................................ XXVIII 21
Trial Periods................................................................ VIII 7
Union Rights................................................................. XVIII 14
Union Security............................................................... II 2
Vacations.................................................................... VI 4
Wages........................................................................ IX 7
Workweek, Overtime........................................................... IV 2
</TABLE>
<PAGE> 4
AGREEMENT made and entered into this 19th day of October, 1995, by and
between LUMEX DIVISION OF LUMEX, INC., located at 81 and 100 Spence Street, Bay
Shore, New York (hereinafter referred to as the "Employer") and LOCAL 422-S,
PRODUCTION SERVICE AND SALES DISTRICT COUNCIL, IUC, AFL-CIO, located at 3250
Veterans Memorial Highway, Bohemia, New York 11716 (hereinafter referred to as
the "Union").
WHEREAS, the parties desire to enter into an agreement relating to wages,
hours and other conditions of employment, for the purpose of establishing and
maintaining harmonious relations between the Employer and employees and to that
end provide for the fair and peaceful adjustment of any disputes which may arise
between them.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereby agree as follows:
ARTICLE I
RECOGNITION OF THE UNION
The Employer hereby recognizes the Union as the sole and exclusive
bargaining agent for its production, maintenance, shipping, receiving, and
driver employees, excluding, however, all office clerical, professional, and
technical employees, watchmen, guards, supervisors, foremen, assistant foremen,
and working foremen, management trainees, part-time employees, and short-term
summer help.
It is agreed that the principal scope of this clause does not extend to or
include Specialty Crafts and Technical Employees. This note is to be preserved
as a clarification note without necessity or change to the current contract
language.
1
<PAGE> 5
Employees who regularly work 25 hours or less are excluded from the Union
coverage. Employees who regularly work in excess of 25 hours but less than the
regular 40-hour week shall be covered by the contract and there shall be special
pro rata allowance of benefits so that their regular number of hours in
relationship to the 40-hour week can be the basis for a formula of benefit
allowances.
ARTICLE II
UNION SECURITY
The Employer agrees that as a condition of continued employment all present
employees within the unit covered by this Agreement shall become members of the
Union thirty-one (31) days after the execution of this Agreement. It shall also
be a condition of employment that all employees within the unit covered by this
Agreement who are hired on or after its effective date shall, thirty-one (31)
days after the beginning of such employment, become members of the Union.
ARTICLE III
DUES CHECKOFF
The Employer shall deduct each month from the wages of all employees who
have authorized and directed the Employer in writing to check off their Union
dues and initiation fees an amount equal to the Union dues of such employees as
certified in writing by the Union to the Employer.
ARTICLE IV
WORKWEEK, OVERTIME
A. The standard workweek shall be five (5) days, Monday through Friday,
inclusive, consisting of forty (40) hours.
B. All work performed beyond eight (8) hours in a day
2
<PAGE> 6
and over forty (40) straight-time hours in any payroll week shall be considered
overtime work, to be paid for at the rate of one and one-half times the
straight-time rate of pay. All work performed on a Saturday shall be paid for at
the rate of time and one-half. However, in the event an employee scheduled for
work on a Saturday fails to report for work or fails to work on any weekday
following a Saturday worked, the Employer has the option not to schedule
overtime for such employee for two successive overtime assignments.
C. The Employer may require employees to work overtime when requested to do
so. Continuous refusal by an employee to work overtime when so requested shall
be considered grounds for discharge.
D. All work performed on Sunday shall be paid for at the rate of double the
straight-time rate.
ARTICLE V
HOLIDAYS
A. All employees who have completed their trial period (60 workdays) shall
receive eight (8) hours' straight time pay for each of the following holidays
regardless of the day of the week on which the holiday falls:
New Year's Day Independence Day
Washington's Birthday Labor Day
Good Friday Thanksgiving Day
Memorial Day Day after Thanksgiving
Day before Christmas Day before New Year's
Christmas Day
3
<PAGE> 7
Employees who successfully complete their trial period shall be paid for
any holidays which fell during their trial period.
B. In order to qualify for pay for a holiday, an employee must have worked
the scheduled workday immediately following the holiday. In the event of two
consecutive holidays, failure to work the next scheduled workday after the
holiday will result in the loss of one day's holiday pay. The day after holiday
eligibility requirement shall not apply to absence for a religious holiday.
C. Employees required to work on any of the above holidays shall receive
time and one-half pay for the hours worked, in addition to eight (8) hours'
straight-time pay for the holiday.
D. In the event one of the above-enumerated holidays falls on a Saturday or
Sunday, the Employer may elect to celebrate it on Friday or Monday,
respectively, or to remain open and pay for the hours worked on that day in lieu
thereof.
E. In the event an employee wants to celebrate Martin Luther King's
Birthday, he shall be allowed to charge such as a sick/personal day.
ARTICLE VI -- VACATIONS
A. All employees covered by this Agreement who have performed continuous
work service as indicated below as of the qualifying date of July 1 of the
vacation year shall be entitled to paid vacation as follows:
<TABLE>
<S> <C>
One (1) year (but less than two (2) years) of
continuous work performance................. Five (5) days at
</TABLE>
4
<PAGE> 8
<TABLE>
<S> <C>
their base rate of pay
Two (2) years (but less than six (6) years) of Ten (10) days at their base rate of
continuous work performance................. pay
Employees shall receive an extra day's
vacation for each year of service above five
(5) years continuous work performance up to
a maximum of fifteen (15) days after ten
(10) years (6 years -- 11 days; 7
years -- 12 days; 8 years -- 13 days; 9
years -- 14 days; 10 years -- 15 days).
Ten (10) years (but less than sixteen (16) Fifteen (15) days at their base rate
years of continuous work performance........ of pay
Employees shall receive an extra day's
vacation for each year of service above
fifteen (15) years continuous work
performance up to a maximum of twenty (20)
days after twenty (20) years (16 years -- 16
days; 17 years -- 17 days; 18 years -- 18
days; 19 years -- 19 days; 20 years -- 20
days)
Twenty (20) years (but less than Twenty-five
(25) years) of continuous work Twenty (20) days at their base rate
performance................................. of pay
Twenty (20) years (but less than Twenty-five
(25) years) of continuous work Twenty (20) days at their base rate
performance................................. of pay
Twenty-five (25) years of continuous work Twenty-five (25) days at their base
performance over............................ rate of pay
</TABLE>
B. Employees covered by this Agreement who have performed at least six (6)
months' work service but less than (1) year of work service as of the July 1
qualifying date shall receive a pro rata vacation allowance according to the
period of work performance rendered during the vacation year up to the
qualifying date. For example, six (6) months would entitle an
5
<PAGE> 9
employee to 6/12ths of five (5) days or two and one-half (2 1/2) days. Such pro
rata vacation allowance shall also extend to employees who have performed at
least six (6) months of work service in the vacation year and are laid off for
lack of work. A layoff of ten (10) consecutive calendar days or less shall not
constitute an interruption in work service for purposes of computing vacation
entitlement under the continuous work performance provisions above set forth.
The exception permitted against forfeited vacation allowance shall be reduced
from two years' employment requirement to one year employment requirement as a
pre-condition to receipt of accrued vacation pay. Thus, employees who resign or
are terminated for just cause prior to the qualifying date for computing
vacations shall forfeit vacation allowance except for employees who have worked
for at least one year who shall receive their accrued vacation pay.
C. Vacations shall be taken during the vacation period designated by the
Employer. The Employer reserves the right to close down the operation of its
plant for business/vacation purposes. in such event, the Employer agrees to
provide a posted, four (4) weeks' advance notice as to when the vacation period
will take place.
ARTICLE VII
SENIORITY
A. Seniority of all employees shall be computed from the date of hire and
shall be accumulated and carried forward on transfers, from department to
department and from job to job.
B. In the event layoffs become necessary, they shall be
6
<PAGE> 10
based on seniority in the department.
C. Seniority shall be lost for the following reasons:
1. Voluntary quitting
2. Discharge for cause.
3. After six (6) months' layoff.
4. Failure to report for work within one (1) week after notice of
recall.
D. Recall from layoff shall be made on the same basis as layoffs in reverse
order.
ARTICLE VIII
TRIAL PERIODS
A. All employees shall have a trial period of sixty (60) workdays with
provision that the Employer's request for extension of such trail period shall
not be unreasonably withheld by the Union. Employees who are rehired within one
year of their leaving of employment shall be treated as new employees.
B. The Employer may, at its discretion, lay off or discharge an employee
during his trial period without recourse by either the Union or the affected
employee.
ARTICLE IX
WAGES
A. Effective October 20, 1995, all employees who have completed their trial
period as of October 20, 1995, and who have not received the adjustment provided
for in paragraph "D" of this article on or after January 1, 1995 and on or
before October 20, 1995, shall receive an increase of fifty ($0.50) cents per
hour in their regular hourly rate. Those employees who have completed their
trial period and who have received the adjustment provided
7
<PAGE> 11
for in paragraph "D" of this article shall receive the difference between fifty
($0.50) cents per hour and the adjustment in their regular hourly rate provided
in accordance with paragraph "D".
B. Effective October 20, 1996, all employees who have completed their trial
period as of October 20, 1996, and who have not received the adjustment provided
for in paragraph "D" of this article on or after January 1, 1996 and on or
before October 20, 1996 shall receive an increase of forty-five ($0.45) cents
per hour in their regular hourly rate. Those employees who have completed their
trial period and who have received the adjustment provided for in paragraph "D"
of this article shall receive the difference between forty-five ($0.45) cents
per hour and the adjustment in their hourly rate provided in accordance with
paragraph "D".
C. Effective October 20, 1997, all employees who have completed their trial
period as of October 20, 1997 and who have not received the adjustment provided
for in paragraph "D" of this article on or after January 1, 1997 and on or
before October 20, 1997 shall receive an increase of forty-five ($0.45) cents
per hour in their regular hourly rate. Those employees who have completed their
trial period and who have received the adjustment provided for in paragraph "D"
of this article shall receive the difference between forty-five ($0.45) cents
per hour and the adjustment in their regular hourly rate provided in accordance
with paragraph "D".
8
<PAGE> 12
D. Employees newly hired shall receive an increase of twenty ($.20) cents
per hour on completion of their first thirty (30) days of work service.
E. Employees working on the second and third shifts shall receive,
respectively, the (10%) and fifteen (15%) percent differentials above the first
shift rate.
F. On or before November 19, 1995, there shall be paid to each employee in
the employ of the Employer on the date this Agreement is entered into a bonus of
two hundred ($200.00) dollars.
ARTICLE X
SICK/PERSONAL LEAVE
Employees covered by this agreement shall be entitled to a total of six (6)
days' sick/personal leave with pay during each contract year. Sick/personal
leave may be taken to the extent it has accrued. Employees who as of January 1
of each year have at least one (1) year's employment with the Employer shall be
credited with three (3) days' sick/personal leave. As of July 1, each employee
shall be credited with an additional three (3) days of sick/personal leave.
Employees with less than one (1) year's employment as of January 1 shall accrue
sick/personal leave at the rate of one (1) day for each eight (8) week period
after an initial four (4) week waiting period in each contract year. Unused
sick/personal leave days shall be paid for at the end of each calendar year. For
those employees on the Employer's payroll on or before July 1, in the event
there are unused sick/personal days at the end of the calendar year, one
additional day plus the unused day shall be paid at the end of each calendar
year.
9
<PAGE> 13
ARTICLE XI
JURY DUTY
Employees who are required to serve on a jury shall be reimbursed by the
Employer at their straight-time daily rate less jury fees received by them up to
a maximum of ten (10) days actually served. Reimbursement shall be made upon
presentation of their jury duty summons and evidence of the amount of payment
received from the state.
ARTICLE XII
HEALTH AND WELFARE PROGRAM
A.1. The Employer agrees to contribute monthly, on or before the tenth day
of each month, to the Production Service and Sales District Council Health Fund
("Health Fund"), its successors and/or assigns in trust, fifty ($50.00) dollars
for each employee covered by this Agreement who has completed thirty days of
employment, together with a monthly report on schedules furnished by the Fund,
for each month; said contributions are to be used to pay for use of the Union's
medical center and its related services for the sole benefit of employees and
their families (where applicable) and the administration of the Health Fund. The
medical center contribution shall be adjusted on July 1, 1998, to seventy-five
($75.00) dollars. When an employee has completed ninety (90) days of continuous
service, the Employer's total contribution to the Health Fund, inclusive of the
contribution for the medical center set forth above, shall be one hundred fifty
($150.00) dollars or three hundred ($300.00) dollars, respectively, for
individual or family hospitalization coverage. The individual/family
hospitalization rates shall be adjusted on July
10
<PAGE> 14
1, 1997, and 1998, respectively, to one hundred seventy-five ($175.00)/three
hundred twenty-five ($325.00) dollars, and two hundred ($200.00)/four hundred
($400.00) dollars.
2. The Employer shall make only the medical center contribution provided
for in paragraph A.1. for those employees who elect alternative health insurance
offered by the Employer at its discretion, with the balance of the contribution
provided for in paragraph A.1. to be paid toward the cost of the premium for the
alternative health insurance. Any difference between the Employer contribution
provided for above and the cost of the alternative health insurance shall be
paid by the employee on a weekly basis in an amount based upon the Employer's
sole determination.
3. The Employer shall have no obligation to make more than one contribution
to the Health Fund per family.
B. The Employer shall provide New York State Disability Benefits Coverage,
as required by the New York State Disability Benefits Law, at its own expense
for each employee covered by this Agreement.
C. Employer contributions shall be made for employees who are out of work
because of layoff or illness and who return to work at the end of such layoff or
illness for up to three months of such layoff or illness.
D. The Union shall have the right to inspect Employer records at reasonable
times upon advance arrangement to verify the Employer's compliance with this
Article.
E. The Employer shall have the right to substitute its
11
<PAGE> 15
own insurance coverage in place of the coverage provided for in this Article at
any time, provided the substitute coverage is comparable to or better than the
existing coverage, and, provided further, that there is no cost to the employee.
F. If any legislation is enacted during the term of this agreement which
imposes any insurance requirements upon the Employer which will increase its
costs for insurance beyond those provided for in this agreement, the Employer
shall have the right to reopen negotiations on health insurance. Such reopener
shall be limited solely to health insurance, and neither the Employer nor the
Union shall have the right or the obligation to discuss any other subject. No
other provision of this agreement shall be affected by this reopener, including,
without any limitation intended, the no-strike/no-lockout commitments.
ARTICLE XIII
RETIREMENT FUND
A. The Employer shall make contributions to the Lumex, Inc. Savings and
Investment Plan Retirement Account ("Retirement Account") in accordance with its
terms for all employees. The terms of the Retirement Account are established and
modified at the Employer's sole discretion, provided that such terms shall be
the same for all of the Employer's employees, including those not covered by
this Agreement. The Union hereby expressly waives any right it might otherwise
have to negotiate over the terms of the Retirement Account, and such waiver
shall survive for one year beyond the term of this Agreement. However, the Union
shall have the right to inspect Employer records at reasonable times, upon
12
<PAGE> 16
advance arrangement to verify the Employer's compliance with this provision.
B. Disputes concerning this article shall not be subject to arbitration.
C. Employees covered by this Agreement who have completed one year of
employment shall be eligible to participate in the Employer's 401(k) plan in
accordance with its terms for all employees, effective the first enrollment
period following October 20, 1996. The terms of the 401(k) plan are established
and modified at the Employer's sole discretion, provided that such terms shall
be the same for all of the Employer's employees, including those not covered by
this Agreement. The Union hereby expressly waives any right it might otherwise
have to negotiate over the terms of the 401(k) plan, and such waiver shall
survive for one year beyond the term of this Agreement. However, the Union shall
have the right to inspect Employer records at reasonable times, upon advance
arrangement to verify the Employer's compliance with this provision.
ARTICLE XIV
BEREAVEMENT LEAVE
Employees shall be entitled to leave with pay for any workday within three
days of the date of the death of their parent, spouse, child, or sibling, upon
presentation of an official copy of the death certificate.
ARTICLE XV
EMPLOYER REVIEWS
A. The Employer retains the right to grant individual increases beyond
those provided by this Agreement, where, in its
13
<PAGE> 17
sole judgment, such increases are justified by superior work performance and/or
skills. Employer determinations shall not be subject to the arbitration and/or
grievance procedures of the Agreement.
ARTICLE XVI
HIRING PRACTICE
It is agreed that the Employer will provide the Union with prior notice of
job openings so that the Union may refer applicants if it has qualified persons
available. The Employer remains free to hire from any source. Further, prompt
advice to the Union of new hires will be provided when they occur regardless of
source.
ARTICLE VII
BULLETIN BOARD
The Employer agrees to place a bulletin board at an appropriate location in
the plant for the use of the Union. The Union representatives may present
official bulletins for posting on the bulletin board, providing, however, that
such material is in no way derogatory to the Employer.
ARTICLE XVIII
UNION RIGHTS
A. Officers or representatives of the Union shall be admitted during
working hours to the premises of the Employer for the purpose of ascertaining
whether this Agreement is being observed by the parties or for assisting in the
adjustment of grievances, provided, however, that such visit does not interfere
with production in the plant and provided that the Union representatives have
first reported their presence to the Employer before entering the plant.
14
<PAGE> 18
B. The Union shall have the right to designate one shop steward for each
one hundred employees whom the Employer will recognize for the purpose of
settling grievances. The Union will notify the Employer in writing of the
employees who have been designated as shop stewards. Shop stewards shall not
lose any pay while attempting to settle grievances during their normal working
hours, provided there is no unreasonable interruption or delay of the Employer's
operations.
C. The Employer will consult with the Union before putting any new work
standard into effect. This shall not affect the Employer's right to establish
work standards.
ARTICLE XIX
DISCHARGE AND DISCIPLINE
A. The Employer shall have the right to discipline, suspend or discharge
any employee for just cause. Just cause shall include, but in no way be limited
to, poor work performance, drunkenness, dishonesty, theft, assault, gambling on
premises, possession of or drug usage, loansharking, gross negligence,
insubordination, chronic absenteeism, and chronic lateness. An authorized Union
representative shall be notified at the time such suspension or discharge takes
place. Where a concerned employee's prior record is clear of repeated warning
notices and/or suspension action, discharge action, whenever reasonable, will be
initiated only after a prior suspension action. Warnings for absenteeism and/or
lateness shall be removed from an employee's records one year from their date of
issue.
B. The Union shall have the right to intercede on behalf
15
<PAGE> 19
of any regular employee to question the propriety of any discharge or other
disciplinary action and may present the matter as a grievance to be settled
under the grievance and arbitration procedure provided in this Agreement, except
that discipline and dismissal for absenteeism and/or lateness shall not be
subject to arbitration. In the event of a discharge for reasons other than
absenteeism or lateness, following completion of Steps 1, 2 and 3 of the
grievance procedure, the matter may be submitted to expedited arbitration within
six weeks to one of the following arbitrators in order on a rotating basis:
Herbert Haber, Eugene Coughlin, Herbert Marx, and George Peek. Should it be
decided that a discharged employee is entitled to reinstatement, any award of
backpay shall not exceed four (4) weeks' wages.
ARTICLE XX
GRIEVANCE PROCEDURE
In the event that any grievance should arise regarding the interpretation
or application of the terms of this Agreement, it shall be resolved through the
following procedure:
Step 1 -- The employee having a grievance shall immediately take it up
with his foreman. If the grievance is not resolved, the employee, within
two (2) working days of the date of the alleged grievance, together with
the shop steward, will present the grievance to the foreman.
Step 2 -- If not satisfactorily adjusted, the grievance will be taken
up, within four (4) working days of the date of the alleged grievance, by
the steward and the aggrieved employee, with a representative of the
Employer.
16
<PAGE> 20
Step 3 -- If not satisfactorily adjusted, the grievance will be taken
up, within six (6) working days of the date of the alleged grievance, by
the Union representative, shop steward, and the aggrieved employee, with a
representative of the Employer. The Employer shall thereafter render a
decision within four (4) working days.
Step 4 -- If the grievance shall not have been resolved between the
parties in accordance with the grievance procedure, then either party may,
on written notice to the other, submit the grievance to arbitration no
later than fifteen (15) working days from the date of the occurrence of the
alleged grievance. The parties agree that the arbitrator shall be
designated from among the following on a rotating basis: Herbert Haber,
Eugene Coughlin, Herbert Marx, and George Peek; that the decision of the
arbitrator shall be final and binding; and that the arbitrator shall not
have the power to add to, subtract from, or modify any provision of this
Agreement. Disputes concerning discipline and dismissal for absenteeism
and/or lateness shall not be subject to arbitration, although such disputes
shall be subject to the steps of the grievance procedure preceding
arbitration.
If no employee specifically is involved and the grievance affects only the
application or interpretation of this Agreement, either party may, in the first
instance, invoke the machinery of this provision at Step 3.
Grievances may be processed during working time, provided there is no
unreasonable interruption or delay of the Employer's
17
<PAGE> 21
operations.
In the event there are any costs for the services of an arbitrator, it is
agreed that such costs will be shared equally by the parties.
ARTICLE XXI
REST PERIODS
There shall be two (2) separate ten (10) minute rest periods each day, one
in the morning and one in the afternoon, as scheduled by the Employer. These
rest periods shall be without loss of pay. Employees shall remain on the
Employer's premises during rest periods.
ARTICLE XXII
STRIKE AND LOCKOUT
A. The Employer agrees not to lock out its employees during the term of
this Agreement. The Union and its members agree not to engage in or condone any
strike, sympathy strike, slowdown or other stoppage of or interference with
production during the term of this Agreement. Noncompliance with these
provisions is grounds for immediate discharge or other discipline, at the sole
discretion of the Employer, and the Employer shall have the right to impose
discipline and/or dismissal in whatever manner deemed appropriate, in its sole
discretion, and same need not be uniform or consistent for all employees in the
event more than one employee is involved.
B. Notwithstanding paragraph "A" of this article, no employee of the
Employer shall be required to cross a lawful Union picket line at the premises
of Cybex Division where such picket line is comprised of Cybex Division
employees and authorized by the
18
<PAGE> 22
Union. This is the sole and exclusive exception to paragraph "A" of this
article.
ARTICLE XXIII
COMPLETE SETTLEMENT
A. This Agreement may not be changed or modified except by a writing duly
executed by the parties or their undersigned representatives.
B. It is understood and agreed that all matters in dispute or controversy
between the parties hereto are completely settled, adjusted and closed by this
Agreement. In addition, any claims for changes in terms and conditions of
employment or other contractual terms contained in this contract, regardless of
whether such issues were raised during negotiations leading to this Agreement,
shall be deemed to be completely settled by the execution of this Agreement.
ARTICLE XXIV
MANAGEMENT OF THE BUSINESS;
FLEXIBILITY OF JOB ASSIGNMENTS
A. Subject only to the express provisions contained in this Agreement, the
Employer shall continue to have the sole right to manage and operate its
business and property, and to direct its working force, including, but not
limited to, effecting any changes in the nature or scope of the business, or
method or system of operating the same, the discontinuance of, consolidation or
change in the organization of departments or job classifications, the location
of work duties, the establishing of work standards, the setting or revising of
the scheduled working hours, the promulgation of reasonable work rules, the
subcontracting of work, the employment of and assignment of employees, the need
for and the
19
<PAGE> 23
extent of any layoffs, and the sufficiency of the production furnishings and
equipment at the Employer's place of business.
B. Existing Employer practices pertaining to flexibility of assignments
between jobs on an irregular basis in the event of emergency production
requirements and/or absenteeism shall be retained. Such practices do not and
shall not require a change in the employee's wage rates commensurate with the
employee's temporary change in job classification.
ARTICLE XXV
LEGALITY
If any provision of this agreement should be held or adjudged illegal, or
in violation of any present or future law, such adjudication shall not
invalidate any other portion or provision of this Agreement nor relieve either
party thereto from their liabilities and obligations under this Agreement, but
the same shall continue in full force and effect. In the event that any portion
of said Agreement is held illegal as above mentioned, the parties agree to meet
promptly in order to agree upon a proper and legal substitute therefor.
ARTICLE XXVI
INJURY ON THE JOB
A. Employees injured during the course of their work who, because of such
injury, are not able to continue working, shall be paid for the remainder of
their regular hours and such shall not be charged to sick days.
B. In the event an employee is required to return to the doctor indicated
by the Employer the day after the injury, the employee shall be paid for the
time lost provided the employee has
20
<PAGE> 24
returned first to the Employer before proceeding to the doctor again and,
provided further, that the doctor has indicated incapacity for continuance of
work. Under these conditions, two (2) hours of paid work time will be provided
for such second day visit to the doctor.
ARTICLE XXVII
REPORTING PAY
Employees who have been scheduled to report for work and who do report
shall receive at least for (4) hours of work or pay in lieu thereof, except in
cases of plant shutdown due to storm, power failure, Act of God, or other
occurrence beyond the Employer's control, in which cases employees who wish to
be paid may use available unused sick or vacation time.
ARTICLE XXVIII
TERMS OF AGREEMENT
This agreement shall be effective October 20, 1995 and shall continue in
full force and effect to October 19, 1998, and from year to year thereafter
until terminated at the end of any yearly period, by either party giving written
notice to the other party by registered mail, sixty (60) days prior to such
termination date, in which event negotiations for a new contract shall commence
at the request of either party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and have set their hands and seals thereto executing this Agreement by
their duly-authorized agents this 19th day of October, 1995.
LUMEX DIVISION OF LUMEX, INC. LOCAL 422-S, PRODUCTION SERVICE AND
SALES DISTRICT COUNCIL, IUC, AFL-CIO
By: By:
----------------------------------- ---------------------------------
21
<PAGE> 25
LUMEX DIVISION OF LUMEX, INC. LOCAL 422-S, PRODUCTION SERVICE AND SALES
DISTRICT COUNCIL, IUG, AFL-CIO
By: /s/ SOPHIE CARDONE By: /s/ SEIGRO DIAZ
----------------------------------- --------------------------------------
Sophie Cardone Seigro Diaz
January 31, 1996 January 31, 1996
/s/ JOHN BARTOLOTTA
--------------------------------------
John Bartolotta
Secretary Treasurer
/s/ JUAN GONZALEZ
--------------------------------------
Juan Gonzalez
/s/ JESUS CALIXTO
--------------------------------------
Jesus Calixto
/s/ VICTOR T. NAVARRO
--------------------------------------
Victor T. Navarro
/s/ CARMEN TORRES
--------------------------------------
Carman Torres
/s/ JOSE RODRIGUEZ
--------------------------------------
Jose Rodriguez
/s/ OBIE EDWARDS
--------------------------------------
Obie Edwards
/s/ EDWIN ORTIZ
--------------------------------------
Edwin Ortiz
/s/ RAMON MENDEZ
--------------------------------------
Ramon Mendez
/s/ ROSA IGLESIAS
--------------------------------------
Rosa Iglesias
/s/ SAUL E. SORIANO
--------------------------------------
Saul E. Soriano
/s/ GARY SEINFELD
--------------------------------------
Gary Seinfeld
22
<PAGE> 1
Exhibit 11
FUQUA ENTERPRISES, INC.
NUMBER OF SHARES USED IN COMPUTING EARNINGS PER SHARE
JUNE 30, 1996
PRIMARY EARNINGS PER SHARE:
TREASURY STOCK METHOD:
<TABLE>
<CAPTION>
NUMBER OF
TRADING TOTAL TOTAL
MONTH DAYS HIGH LOW
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
April 21 $ 565.375 $ 558.125
May 22 627.375 622.125
June 20 579.625 576.125
-- ----------- -----------
63 $ 1,772.375 $ 1,756.375 $3,528.750
== =========== =========== ==========
AVERAGE: $3,528.750 divided by 63 divided by 2 = $28.006
==========================================================================================================
</TABLE>
<TABLE>
<CAPTION>
OPTIONS OPTION
OUTSTANDING SHARES PRICE EXTENSION
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
5,000 9.500 47,500
121,000 20.250 2,450,250
25,000 20.375 509,375
5,000 21.000 105,000
15,000 20.625 309,375
4,000 18.625 74,500
150,000 20.500 3,075,000
100,000 18.375 1,837,500
------- -----------
Total 425,000 $ 8,408,500
======= ===========
- ----------------------------------------------------------------------------------------------------------
Average Price (above) $ 28.006
----------
Total Option Extension Divided by Average Price 300,240
Options Outstanding 425,000
----------
Common Stock Equivalents 124,760
Average Shares Outstanding (see page 2) 4,478,792
----------
Use for Primary Earnings Per Share 2nd Quarter 4,603,552
----------
Use for Primary Earnings Per Share 1st Quarter 4,499,711
----------
Use for 1st half of 1996 (Average) 4,551,632
----------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
-continued-
1
<PAGE> 2
FULLY DILUTED EARNINGS PER SHARE:
AVERAGE NUMBER OF SHARES OUTSTANDING:
<TABLE>
<CAPTION>
BEGINNING ENDING NUMBER SHARES
DATE DATE OF DAYS OUTSTANDING EXTENSION
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
4-1-96 4-10-96 10 4,478,347 44,783,470
4-11-96 4-30-96 20 4,478,847 89,576,940
5-1-96 5-31-96 31 4,478,847 138,844,257
6-1-96 6-30-96 30 4,478,847 134,365,410
-- -----------
91 407,570,077
== ===========
Average Number of Shares Outstanding:
Second Quarter (Extension Divided by Number of Days) 4,478,792
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
FIRST
QUARTER
-------
<S> <C>
Closing Price - 6-30-96 $ 29.000
----------
Total Option Extension (from page 1) Divided by Closing Price 289,948
Options Outstanding 425,000
----------
Common Stock Equivalents 135,052
Average Shares Outstanding (from above) 4,478,792
----------
Fully Diluted Shares 4,613,844
Less Primary Shares (from page 1) 4,603,552
----------
Additional Shares 10,291
----------
Percentage .22%
(Note: Anti-dilutive or less than 3.0%; no fully diluted presentation required.)
- ------------------------------------------------------------------------------------------------------------
</TABLE>
2
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE JUNE 30,
1996 CONDENSED CONSOLIDATED FINANCIAL STATEMENTS INCLUDED IN FORM 10-Q AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 6,017
<SECURITIES> 22,381
<RECEIVABLES> 50,293
<ALLOWANCES> (312)
<INVENTORY> 32,288
<CURRENT-ASSETS> 118,684
<PP&E> 45,740
<DEPRECIATION> (12,481)
<TOTAL-ASSETS> 181,715
<CURRENT-LIABILITIES> 39,625
<BONDS> 56,867
0
0
<COMMON> 11,309
<OTHER-SE> 73,914
<TOTAL-LIABILITY-AND-EQUITY> 181,715
<SALES> 77,398
<TOTAL-REVENUES> 78,665
<CGS> 60,374
<TOTAL-COSTS> 72,175
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 162
<INTEREST-EXPENSE> 1,094
<INCOME-PRETAX> 5,396
<INCOME-TAX> 1,958
<INCOME-CONTINUING> 3,438
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,438
<EPS-PRIMARY> .76
<EPS-DILUTED> 0
</TABLE>
