<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) December 31, 1995
FUQUA ENTERPRISES, INC.
(Exact name of registrant, as specified in its charter)
Delaware 13-1988043
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation)
1-5091
------------------------
(Commission File Number)
One Atlantic Center, Suite 5000
1201 W. Peachtree Street, N.W., Atlanta, Georgia 30309
------------------------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: 404-815-2000
------------
Not Applicable
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
<PAGE> 2
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On December 31, 1995, Fuqua Enterprises, Inc. ("Fuqua") consummated
the previously announced sale of 100% of the stock of its wholly-owned
insurance subsidiary, American Southern Insurance Company ("American
Southern"), to Atlantic American Corporation ("Atlantic"). The sale price was
$34,000,000 and consisted of approximately $22,648,000 in cash and a note of
approximately $11,352,000 due October, 1996. The note accrues interest at the
prime rate; one-half of the interest is payable quarterly and the remaining
interest is due in October, 1996.
The sales price was determined as a result of arms-length negotiations
between Fuqua and Atlantic taking into consideration many factors including the
investment return, the nature of the business, prospects for growth and the
desire by Fuqua to concentrate on its core manufacturing businesses.
D. Raymond Riddle, a director of Fuqua, also serves as a director of
Atlantic.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(b) Pro Forma Condensed Consolidated Financial Information
The unaudited pro forma condensed consolidated statements of income
for the nine-months ended September 30, 1995 and for the year ended December
31, 1994 give effect to the sale of American Southern (which previously had
been reported as a discontinued operation) as if the transaction was
consummated on January 1, 1995 and January 1, 1994, respectively. The
unaudited pro forma condensed consolidated balance sheet at September 30, 1995
gives effect to the sale of American Southern as if the transaction was
consummated on September 30, 1995. The pro forma information should be read in
conjunction with the consolidated financial statements of Fuqua which are
included in Fuqua's Form 10-K for the year ended December 31, 1994 and with the
condensed consolidated financial statements included in Fuqua's quarterly
report on Form 10-Q for the quarter ended September 30, 1995. This unaudited
pro forma condensed consolidated financial information is not necessarily
indicative of actual or future operating results or financial position that
would have occurred or will occur as a result of the sale of American Southern.
(c) 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 8-K Exhibits Commission Document
- ------------- ---------------------------------------------- ------------------------------ -------------------
<S> <C> <C> <C>
2 Stock Purchase Agreement between Atlantic Quarterly Report on Form 10-Q 2(b)
and Fuqua dated as of October 16, 1995. for the quarterly period ended
(Fuqua agrees to furnish a copy of any omitted September 30, 1995
schedule to the Commission upon request.)
10(a) Promissory Note dated as of December 31, 1995
between Atlantic and Fuqua.
99.1 Press Release dated January 2, 1996.
</TABLE>
2
<PAGE> 3
ITEM 7(b)
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
FUQUA ENTERPRISES, INC. AND SUBSIDIARIES
(Dollars In Thousands)
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
---------- ----------- ---------
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . $ 4,652 $ 22,648(1) $ 27,300
Investments available for sale . . . . . . . . . . . . . . . . . . 8,465 8,465
Receivables, less allowance of $450 . . . . . . . . . . . . . . . 17,095 11,352(1) 28,447
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,885 23,885
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . 970 970
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . 970 970
------------------------------------------
Total Current Assets . . . . . . . . . . . . . . . . . . . . . 56,037 34,000 90,037
------------------------------------------
Property, plant and equipment . . . . . . . . . . . . . . . . . . . 27,967 27,967
Less accumulated depreciation . . . . . . . . . . . . . . . . . . . (12,898) (12,898)
------------------------------------------
Net Property, Plant and Equipment . . . . . . . . . . . . . . . 15,069 15,069
------------------------------------------
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 147 147
------------------------------------------
Total Assets of Continuing Operations . . . . . . . . . . . . . . . 71,253 34,000 105,253
Total Assets of Discontinued Operations . . . . . . . . . . . . . 99,617 (99,617)(2)
------------------------------------------
Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . $170,870 $(65,617) $105,253
==========================================
</TABLE>
NOTES:
(1) This adjustment represents the $34,000,000 proceeds from the sale of
American Southern consisting of cash of $22,648,000 and a note of
$11,352,000, which is due October 1996.
(2) This adjustment represents removal of the assets and liabilities of
American Southern which had been treated as a discontinued operation in
the historical financial statements and which are assumed to be sold
at September 30, 1995.
3
<PAGE> 4
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
FUQUA ENTERPRISES, INC. AND SUBSIDIARIES
(Dollars In Thousands)
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
------------ ----------- ---------
<S> <C> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses . . . . . . . . . . . . . . . $ 6,282 $ 6,282
Accrued income taxes . . . . . . . . . . . . . . . . . . . . . . . (766) (766)
Long-term liabilities due within one year . . . . . . . . . . . . . 257 257
------------------------------------------
Total Current Liabilities . . . . . . . . . . . . . . . . . . . . 5,773 5,773
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . 644 644
Long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . 28,039 28,039
------------------------------------------
Total Liabilities of Continuing Operations . . . . . . . . . . 34,456 34,456
Total Liabilities of Discontinued Operations . . . . . . . . . 64,097 $(64,097)(2)
------------------------------------------
Total Liabilities . . . . . . . . . . . . . . . . . . . . . . 98,553 (64,097) 34,456
------------------------------------------
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
3,904,670 shares . . . . . . . . . . . . . . . . . . . . . . . 9,759 9,759
Additional paid-in capital . . . . . . . . . . . . . . . . . . . 15,140 15,140
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . 48,122 (879)(3) 47,243
Unrealized gains on investments . . . . . . . . . . . . . . . . . 671 (641)(4) 30
Treasury stock, at cost: 70,501 shares . . . . . . . . . . . . . (1,375) (1,375)
------------------------------------------
Total Stockholders' Equity . . . . . . . . . . . . . . . . . 72,317 (1,520) 70,797
------------------------------------------
Total Liabilities and Stockholders' Equity . . . . . . . . . $170,870 $(65,617) $105,253
==========================================
</TABLE>
NOTES:
(2) This adjustment represents removal of the assets and liabilities of
American Southern which had been treated as a discontinued operation in
the historical financial statements and which are assumed to be sold
at September 30, 1995.
(3) This adjustment represents the loss on the sale of American Southern which
would be realized if the sale transaction had occurred on September 30,
1995.
(4) This adjustment represents the removal of unrealized appreciation on the
investments of American Southern which are liquidated with the sale of
American Southern at September 30, 1995.
4
<PAGE> 5
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FUQUA ENTERPRISES, INC. AND SUBSIDIARIES
(In Thousands, Except Per Share Data)
<TABLE>
<CAPTION>
FOR NINE MONTHS ENDED FOR YEAR ENDED
SEPTEMBER 30, 1995 DECEMBER 31, 1994
----------------------------------------- ----------------------------------------
PRO FORMA PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA HISTORICAL ADJUSTMENTS PRO FORMA
---------- ----------- --------- ---------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
REVENUES:
Net sales . . . . . . . . . . . . . . $ 96,186 $ 96,186 $126,515 $126,515
Investment income . . . . . . . . . . 576 $ 663(1) 1,239 541 $ 541(1) 1,082
-------------------------------------------------------------------------------------
Total revenues . . . . . . . . . . . 96,762 663 97,425 127,056 541 127,597
-------------------------------------------------------------------------------------
COSTS AND EXPENSES:
Cost of sales . . . . . . . . . . . . 83,929 83,929 108,349 108,349
Selling, general and
administrative expenses . . . . . 7,823 7,823 9,603 9,603
Interest expense . . . . . . . . . . 1,172 1,172 906 906
-------------------------------------------------------------------------------------
Total costs and expenses . . . . . . 92,924 92,924 118,858 118,858
-------------------------------------------------------------------------------------
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES . . . . . . . . . 3,838 663 4,501 8,198 541 8,739
INCOME TAXES . . . . . . . . . . . . . 1,340 265(2) 1,605 2,549 216(2) 2,765
-------------------------------------------------------------------------------------
INCOME FROM CONTINUING OPERATIONS . . . $ 2,498 $ 398 $ 2,896 $ 5,649 $ 325 $ 5,974
-------------------------------------------------------------------------------------
PER SHARE:
Income from continuing operations . . $ .65 $ .75 $ 1.46 $ 1.55
-------------------------------------------------------------------------------------
Common shares and equivalents . . . . . 3,864 3,864 3,860 3,860
-------------------------------------------------------------------------------------
</TABLE>
NOTES:
(1) This adjustment represents interest earned on the portion of the proceeds
from the sale of American Southern represented by the note which accrues
interest at prime. The interest which can be earned on the cash portion
of the proceeds from the sale of American Southern has not been reflected
in the pro forma adjustments. Such interest at an assumed rate of 6% and
before the effect of income taxes would be approximately $1,019 and $1,510
($.16 and $.23 per share, after tax) for the nine months ended September
30, 1995 and for the year ended December 31, 1994, respectively.
(2) This adjustment represents the income taxes which would result from the
additional interest income earned on the portion of the proceeds from the
sale of American Southern represented by the note.
5
<PAGE> 6
SIGNATURE
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 hereunto 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: January 12, 1996
6
<PAGE> 7
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
<S> <C>
10(a) Promissory Note dated December 31, 1995 between Atlantic
and Fuqua
99.1 Press Release dated January 2, 1996.
</TABLE>
<PAGE> 1
EXHIBIT 10(a)
PROMISSORY NOTE
$11,352,168.00 Date: December 31, 1995
FOR VALUE RECEIVED, the undersigned, ATLANTIC AMERICAN CORPORATION,
hereby promises to pay to the order of FUQUA ENTERPRISES, INC. (f/k/a Vista
Resources, Inc. and hereinafter, together with its successors and assigns,
referred to as the "Holder") at the offices of the Holder located at 1201 West
Peachtree Street, Suite 5000, Atlanta, Georgia 30309, or at such other place as
the Holder may designate in writing to the undersigned, an amount equal to the
aggregate amount of all payments of principal (including the Additional Amounts
and accrued interest added to principal in accordance with Section 2(c) of the
InterRedec Note both before and after the date hereof) and interest paid by the
Holder after the date hereof under that certain Nonnegotiable Note dated
October 11, 1991 ((the "InterRedec Note"); terms used herein and not defined
herein have their respective defined meaning as set forth in the InterRedec
Note) executed and delivered by the Holder in favor of InterRedec Southern
Company, Inc. (together with its successors and assigns including, but not
limited to, the Board of Governors of the Federal Reserve System or any person
or entity to whom the InterRedec Note may be pledged, "InterRedec"), a copy of
which is attached hereto as Exhibit A. Payments under this Note shall be due
and payable in the exact amounts and at the exact times as the amounts owing by
the Holder to InterRedec are originally scheduled to become due and payable
under the InterRedec Note, it being the intent of the undersigned and, by
acceptance hereof, the Holder, that the undersigned shall pay the Holder an
amount equal to each amount of principal (including the Additional Amounts and
accrued interest added to principal in accordance with Section 2(c) of the
InterRedec Note both before and after the date hereof) and interest paid from
the date hereof by the Holder to InterRedec (or its successors and assigns)
under the InterRedec Note simultaneously with each such payment by the Holder
to InterRedec.
The undersigned acknowledges that, as of the date hereof, the
principal amount (including the Additional Amounts that have now accrued
pursuant to paragraphs 2(c), 6, 7 and 8 of the InterRedec Note) due and owing
by the Holder under the InterRedec Note equals $11,352,168.00, which amount
includes $1,352,168.00 of accrued and unpaid interest added to the principal
amount of the InterRedec Note in accordance with Section 2(c) of the InterRedec
Note.
The undersigned further acknowledges that the originally scheduled
amounts payable under the InterRedec Note may be reduced pursuant to paragraphs
10, 11 and 16 thereof. Whether and to what extent the amounts due and owing
under the InterRedec Note, and therefore this Note, are reduced pursuant to
such paragraphs shall be matters solely between the Holder and InterRedec and
any payment, agreement, settlement, arbitration or judicial award, or refund or
return of monies with respect to such matters
<PAGE> 2
shall, for purposes of this Note and the amounts owing by the undersigned
hereunder, be binding upon the undersigned and the undersigned shall not be
entitled to withhold or offset any amount owing hereunder in the event the
undersigned disputes the amount or time any payment is made by the Holder under
the InterRedec Note with respect to such matters. In this connection, if,
pursuant to paragraph 16 of the Note, the Holder has a claim for Damages (as
such term is used in the InterRedec Note) and the Holder pays an amount of
proceeds due under the InterRedec Note into escrow as contemplated therein, the
undersigned shall simultaneously pay an amount of proceeds due under this Note
into escrow pursuant to such terms and arrangements as the undersigned and the
Holder shall mutually and reasonably agree. To the extent any Damages paid into
escrow by the Holder are returned or refunded to the Holder (whether pursuant
to mutual agreement or arbitration or judicial award), the escrow arranged
between the Holder and the undersigned shall provide that the undersigned shall
be entitled to receive the same amount of funds so refunded or returned to the
Holder. To the extent InterRedec is entitled to receive (whether by mutual
agreement or arbitration or judicial award) any Damages paid into escrow by the
Holder, the escrow arrangements between the Holder and the undersigned shall
provide that the Holder shall be entitled to receive the same amount of funds
so received by InterRedec. Notwithstanding any provisions contained herein to
the contrary, any payment by InterRedec to the Holder that is in satisfaction
of a liability of American Southern that has been paid by American Southern,
and not previously reimbursed by the Holder, shall be promptly paid to the
undersigned. Pursuant to Sections 5.04(e) and 7.01 of the Stock Purchase
Agreement (as defined below), the undersigned may have a separate cause of
action against the Holder with respect to any such dispute relating to such
matters.
The undersigned shall have the right at any time and from time to time
to prepay the indebtedness represented by this Note in whole or in part without
premium or penalty, but with accrued interest to the date of such prepayment on
the principal amount prepaid. By acceptance hereof, during the time this Note
is outstanding, the Holder agrees not to exercise its right to prepay all or a
portion of the principal of the InterRedec Note prior to its stated maturity
pursuant to paragraph 9 of the InterRedec Note. Further, the undersigned shall
not be obligated to make any mandatory prepayment of the principal amount of,
or accrued interest on, this Note by reason of the making by the Holder of any
mandatory prepayment of principal or interest under the InterRedec Note by
reason of the occurrence of an Event of Default under the InterRedec Note. In
such event, the undersigned shall pay the amount of any such mandatory
prepayment at the originally scheduled payment dates under the InterRedec Note
and in any event no later than October 11, 1996 (the "Maturity Date"). For
purposes of this Note, a drawing under that certain Irrevocable Standby Letter
of Credit No. 062173 dated December 8, 1995 issued by First Union National
Bank of Georgia in favor of the Holder, a copy of which is attached hereto as
Exhibit B (the "Letter of Credit"), shall constitute a payment under the
InterRedec Note; provided, however, that in the event any such drawing occurs
prior to the Maturity Date, the undersigned shall not be obligated to pay to
the Holder the amount of such drawing until the Maturity Date. In any event,
interest shall continue to accrue on the unpaid principal amount of this Note
notwithstanding any mandatory prepayment
-2-
<PAGE> 3
under the InterRedec Note or drawing under the Letter of Credit prior to the
Maturity Date at the pre-default rates and in the manner set forth in the
InterRedec Note.
If, pursuant to paragraph 12 of the InterRedec Note, InterRedec pays
the Holder any Offset Amount thereby increasing the outstanding amount of the
InterRedec Note, the Holder may, at its option, either (i) immediately pay such
amount directly to the undersigned whereupon the principal amount outstanding
under this Note shall be automatically increased by such amount or (ii) retain
such payment by InterRedec whereupon the outstanding amount of this Note shall
remain reduced by the amount of such amount retained.
In no event shall the amount of interest due or payable under this
Note exceed the maximum rate of interest allowed by applicable law and, in the
event any such payment is inadvertently paid by the undersigned or
inadvertently received by the Holder, then such excess sum shall be credited as
a payment of principal, unless the undersigned shall notify the Holder in
writing that the undersigned elects to have such excess sum returned to it
forthwith. It is the express intent of the parties hereto that the undersigned
not pay and the Holder not receive, directly or indirectly, in any manner
whatsoever, interest in excess of that which may be lawfully paid by the
undersigned under applicable law.
Each of the following events shall constitute an "Event of Default"
under this Note: (i) failure of the undersigned to pay any amount due hereunder
when due and the continuance of such failure for a period of five business days
after written demand therefor, or the undersigned shall in any way fail to
comply with the other terms, covenants or conditions contained in this Note or
in the Stock Purchase Agreement, (ii) any oral or written representation or
warranty made at any time by the undersigned to the Holder under the Stock
Purchase Agreement or otherwise shall prove to have been incorrect or
misleading in any material respect when made; (iii) the undersigned shall (a)
commence a voluntary case under the Bankruptcy Code of 1978, as amended or
other federal bankruptcy law (as now or hereafter in effect); (b) file a
petition seeking to take advantage of any other laws, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, winding up or composition
for adjustment of debts; (c) consent to or fail to contest in a timely and
appropriate manner any petition filed against it in an involuntary case under
such bankruptcy laws or other laws; (d) apply for or consent to, or fail to
contest in a timely and appropriate manner, the appointment of, or the taking
of possession by, a receiver, custodian, trustee, or liquidator of itself or of
a substantial part of its property, domestic or foreign; (e) be unable to, or
admit in writing its inability to, pay its debts as they become due; (f) make a
general assignment for the benefit of creditors, or (g) make a conveyance
fraudulent as to creditors under any state or federal law, or (iv) a case or
other proceeding shall be commenced against the undersigned in any court of
competent jurisdiction seeking (a) relief under the Bankruptcy Code of 1978, as
amended or other federal bankruptcy law (as now or hereafter in effect) or
under any other laws, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding up or adjustment of debts or (b) the appointment of a
trustee, receiver, custodian,
-3-
<PAGE> 4
liquidator or the like for the undersigned or all or any substantial part of
the assets, domestic or foreign, of the undersigned.
Upon the occurrence of an Event of Default (other than an Event of
Default described in clause (iii) or (iv) of the definition thereof), at the
option of the Holder, and without demand or notice of any kind, all outstanding
amounts under this Note (as determined by the then outstanding amounts under
the InterRedec Note) may be immediately declared, and thereupon shall
immediately become, in default and due and payable and the Holder may exercise
any and all rights and remedies available to it at law, in equity or otherwise.
Upon the occurrence of an Event of Default described in clause (iii) or (iv) of
the definition thereof, all outstanding amounts owing under this Note (as
determined by the then outstanding amounts under the InterRedec Note), without
demand or notice of any kind, shall immediately become in default and due and
payable and the Holder may exercise any and all rights and remedies available
to it at law, in equity or otherwise.
Upon the occurrence of an Event of Default under this Note, interest
shall accrue on the outstanding principal amount of this Note (including all
Additional Amounts) at the lower of (i) the Prime Rate (as defined in the
InterRedec Note) plus two percentage points (2%) or eighteen percent (18%) per
annum, such interest, and such principal, being payable on demand.
The Holder shall maintain a ledger or other statement of account
regarding the amounts due under the InterRedec Note and therefore this Note;
provided, however, that the failure of the Holder to maintain such ledger or
statement shall in no way affect its rights or the undersigned's obligations
hereunder. The entries in such ledger or statement shall be binding and
conclusive upon the undersigned absent manifest error.
The undersigned shall pay all expenses incurred by the Holder in the
collection of this Note, including, without limitation, the reasonable fees and
disbursements of counsel to the Holder if this Note is collected by or through
an attorney-at-law. However, the undersigned shall not be liable for any costs
of collection, including attorneys' fees and disbursements, paid by the Holder
to InterRedec.
Time is of the essence of this Note.
The undersigned agrees that all of its payment obligations hereunder
shall be absolute, unconditional and, for the purposes of making payments
hereunder, the undersigned hereby waives any right to assert any setoff,
counterclaim or cross-claim including any right to setoff amounts due and owing
hereunder by reason of any claim for indemnification under the Stock Purchase
Agreement. Any such claim for indemnification shall be made in a separate cause
of action and shall not affect, impair, reduce or modify the amounts owing by
the undersigned hereunder.
-4-
<PAGE> 5
No delay or failure on the part of the Holder in the exercise of any
right or remedy shall operate as a waiver thereof, and no single or partial
exercise by the Holder of any right or remedy shall preclude other or further
exercise thereof or the exercise of any other right or remedy.
All amendments to this Note, and any waiver or consent of the Holder,
must be in writing and signed by the Holder and the undersigned.
The undersigned hereby waives presentment, demand, notice of dishonor,
protests and all other notices whatever.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF GEORGIA.
This Note is the Purchaser Note referred to in Section 2.03(a) of that
certain Stock Purchase Agreement dated as of October 16, 1995 (the "Stock
Purchase Agreement") by and between the initial Holder and the undersigned and
is subject to, and is entitled to the benefits of, the terms and provisions of
the Stock Purchase Agreement.
This Note shall be binding upon the successors and assigns of the
undersigned. A Holder of this Note may assign or transfer this Note to any
person or entity without notice to, or the consent of, the undersigned.
Any notice to be given hereunder shall be in writing, shall be sent to
such person's address set forth below its signature hereto and shall be deemed
received (i) on the earlier of the date of receipt or the date three business
days after deposit of such notice in the United States mail, if sent postage
prepaid, certified mail, return receipt requested or (ii) when actually
received, if personally delivered or (iii) one business day after deposit of
such notice with a recognized overnight courier or (iv) when confirmation of
transmission has been received by the sender, if via facsimile transmission.
[SIGNATURES ON NEXT PAGE]
-5-
<PAGE> 6
IN WITNESS WHEREOF, the undersigned has duly executed and delivered
this Promissory Note under seal as of the date and year first written above.
ATLANTIC AMERICAN CORPORATION
By: /s/ Hilton H. Howell, Jr.
---------------------------------------------
Name: Hilton H. Howell, Jr.
Title: President and Chief Executive Officer
ATTEST:
By: /s/ John W. Hancock
---------------------------------------------
Name: John W. Hancock
Title: SR. V.P. & Treas.
[CORPORATE SEAL]
Address for Notices:
4370 Peachtree Road, N.E.
Atlanta, Georgia 30319-3000
Attn: Hilton H. Howell, Jr.
Telecopy No.: (404) 231-2123
Accepted:
FUQUA ENTERPRISES, INC.
By: /s/ John J. Huntz, Jr.
------------------------------------
Name: John J. Huntz, Jr.
Title: Executive Vice President and
Chief Operating Officer
Address for Notices:
One Atlantic Center, Suite 5000
1201 West Peachtree Street
Atlanta, Georgia 30309
Attn.: John J. Huntz, Jr.
Telecopy No.: (404) 815-4529
-6-
<PAGE> 7
EXHIBIT A
NONNEGOTIABLE NOTE
$8,000,000.00 October 11, 1991
FOR VALUE RECEIVED, the undersigned, Vista Resources, Inc.
("Vista"), promises to pay to InterRedec Southern Company, Inc. ("InterRedec"),
at such place as InterRedec may designate in writing, the original principal
sum of Eight Million Dollars and no cents ($8,000,000.00), on October 11, 1996;
plus accrued and unpaid interest on the unpaid balance of such principal
amount, at the rate of interest and at the times described below, until full
and final payment.
1. Interest on the unpaid principal balance of this Note
shall accrue at an annual rate (computed on the basis of actual days elapsed
over a 365-day year) of the Prime Rate (as defined below). Vista shall pay all
costs of collection, including reasonable attorney's fees, if this Note is
collected by legal action or through an attorney at law.
2. All principal and interest shall be paid in
immediately available funds and in lawful money of the United States of America
as follows:
(a) Principal shall be due and payable in full on
October 11, 1996, together with all accrued and unpaid interest.
(b) One-half of the interest accruing on the
outstanding principal amount of this Note from the date hereof until
such principal amount is paid in full shall be payable quarterly on
the last day of each calendar quarter (March 31, June 30, September
30, and December 31) during the term of this Note.
(c) One-half of the interest accruing on the
outstanding principal amount of this Note from the date hereof until
such principal amount is paid in full shall be added to the principal
amount of this Note and shall be due and payable in full (without
interest) on October 11, 1996.
(d) Whenever a payment under this Note becomes
due on a day which is not a business day, the due date for such
payment shall be extended to the next succeeding business day, and
interest applicable to such amount shall accrue during any such
extension.
3. "Prime Rate" shall mean the rate stated in the Wall
Street Journal on the first business day of each calendar month as the prime
rate. Any change in the interest rate hereunder resulting from a change in the
Prime Rate shall be effective as of the beginning of the first calendar day of
each calendar month on which the Prime Rate changes.
<PAGE> 8
4. The annual interest rate accruing on this Note on the
date of its execution equals eight percent (8%).
5. This Note is issued pursuant to, and shall be subject
to and have the benefits of, that certain Stock Purchase Agreement (the "Stock
Purchase Agreement"), dated as of September 17, 1991, by and among Vista;
Concorde Finance & Investment, Inc., a Delaware corporation; InterRedec;
InterRedec, Inc., a Delaware corporation; and American Southern Insurance
Company ("ASICo") and the related Pledge and Security Agreement dated of even
date by and between Vista and InterRedec.
6. In addition to any other amounts due and payable
under this Note, Vista promises to pay to InterRedec One Million Dollars and no
cents ($1,000,000.00) on October 11, 1996 if the Earnings Before Taxes (as
defined below) of ASICo and its subsidiaries, on a consolidated basis, equal or
exceed Five Million Dollars and no cents ($5,000,000.00) for its fiscal year
ending December 31, 1992. Any additional amount due to InterRedec under this
Paragraph 6 shall accrue interest under this Note in accordance with Paragraph
1 of this Note from January 1, 1993 through October 11, 1996. (The additional
amount, if any, payable under this Paragraph 6 shall be referred to in this
Note as the "First Additional Amount.")
7. In addition to any other amounts due under this Note,
Vista promises to pay to InterRedec One Million Dollars and no cents
($1,000,000.00) on October 11, 1996 if the Earnings Before Taxes (as defined
below) of ASICo and its subsidiaries, on a consolidated basis, equal or exceed
Fifteen Million Dollars and no cents ($15,000,000.00) on an aggregate basis for
its fiscal years ending December 31, 1992, December 31, 1993, and December 31,
1994. Any additional amount due to InterRedec under this Paragraph 7 shall
accrue interest under this Note in accordance with Paragraph 1 of this Note
from January 1, 1995 through October 11, 1996. (The additional amount, if any,
payable under this Paragraph 7 shall be referred to in this Note as the "Second
Additional Amount"; and the First Additional Amount and the Second Additional
Amount collectively shall be referred to in this Note as the "Additional
Amounts".)
8. "Earnings Before Taxes" shall mean the pre-tax
earnings of ASICo and its subsidiaries, on a consolidated basis, as determined
in accordance with generally accepted accounting principles, consistently
applied, as adjusted, where not otherwise duplicative, (a) to eliminate any
adjustments to the value of assets or liabilities or other accounting
adjustments resulting from the application of "purchase accounting principles";
(b) to include reasonable finance charges related to injections of capital in
any form contributed by Vista or any third party; and (c) to eliminate any
payments or expense accruals charged by or on behalf of any corporation or
other entity affiliated with American Southern other than its subsidiaries
(other than payments made directly to third parties relating to ASICo or its
subsidiaries.). (Notwithstanding that management fees and certain other
expenses are disregarded in computing the amount of Earnings
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<PAGE> 9
Before Taxes, nothing in this Paragraph 8 shall be construed as denying Vista
the right to assess any such charges.)
9. Vista shall have the right at any time and from time
to time to prepay the indebtedness represented by this Note in whole or in part
without premium or penalty, but with accrued interest to the date of such
prepayment on the principal amount prepaid.
10. Upon the occurrence of any of the following events,
the principal amount of this Note shall automatically be reduced by an amount
determined under Section 3.03 of the Stock Purchase Agreement (an "Offset
Amount") for which InterRedec is determined to be obligated to Vista (and any
such Offset Amount shall first reduce the amount of any Additional Amounts
before reducing the original principal amount of this Note):
(a) Vista and InterRedec shall agree in writing
(including an agreement as to the amount owed by InterRedec to Vista)
that InterRedec is obligated to Vista for indemnification under the
Stock Purchase Agreement and InterRedec shall not have paid Vista such
amount within seven (7) days of the date of such agreement;
(b) Vista and InterRedec shall agree to
arbitration procedures with respect to a dispute concerning the
indemnification provisions of the Stock Purchase Agreement, the
arbitrator thereunder shall enter an award in Vista's favor, and
InterRedec shall not have paid Vista the amount of such award within
seven (7) days of the date such award is entered; or
(c) A court of competent jurisdiction shall enter
a judgment concerning the indemnification provisions of the Stock
Purchase Agreement in Vista's favor and InterRedec shall not have paid
Vista the amount of such judgment within seven (7) days of the date
such judgment is entered.
11. Upon the final assessment of any amount of Taxes (as
defined in the Stock Purchase Agreement) against ASICo or any of the
Subsidiaries for any taxable period ending on or before the date of the
Closing, which final assessment is paid by Purchaser or ASICo and is not
reimbursed by any of the Sellers within five (5) business days after receipt by
Sellers of notice from Purchaser or ASICo that it has paid such Taxes, the
principal amount of this Note shall automatically be reduced by the Offset
Amount with respect to such final assessment (and any such reduction shall
first reduce the amount of any Additional Amounts before reducing the original
principal amount of this Note).
12. Notwithstanding anything in Paragraph 10 or 11 of
this Note, if, after the date on which the principal amount of this Note has
been reduced by an Offset Amount, InterRedec pays Vista the Offset Amount, then
the principal amount of this Note immediately shall be increased for all
purposes by the amount which InterRedec pays Vista.
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<PAGE> 10
13. Notwithstanding any provision to the contrary in this Note, no
party shall be required to pay, and no party shall be permitted to collect, any
amount of interest in excess of the maximum amount of interest permitted by law
("Excess Interest"). If any Excess Interest is provided for or determined by a
court of competent jurisdiction to have been provided for in this Note, then
any Excess Interest shall be refunded to the payor thereof, and the interest
rate provided for and this Note shall automatically be reduced to the maximum
lawful rate allowed from time to time under applicable law.
14. Upon the occurrence of and during the continuance of one or
more Events of Default under and as defined in the Pledge and Security
Agreement:
(a) the full amount of this Note may, at the
option of InterRedec, be declared and immediately become due and payable, and
InterRedec, subject to the limitations set forth in the Pledge and Security
Agreement, may exercise any rights available to it at law and in equity, or
available under any agreement, relating to this Note; and
(b) interest accruing under this Note shall
accrue at the lower of (1) the Prime Rate plus two percentage points (2%), or
(2) eighteen percent (18%) per annum.
15. If the amount of this Note shall become due and payable
pursuant to Paragraph 14 of this Note, Vista shall immediately pay the
outstanding amount due under this Note into an escrow account (and shall
deposit the First Additional Amount and the Second Additional Amount, if any,
directly into the escrow account within five (5) business days of the dates
such amounts are finally determined to be due pursuant to Section 17 of this
Agreement,) with a bank that is reasonably acceptable to the parties and
pursuant to an escrow agreement in a form reasonably satisfactory to the
parties. The escrow agreement shall provide that (a) Vista shall have the
right to receive escrowed funds under the circumstances it would be entitled to
exercise its offset rights hereunder, and (b) any remaining escrowed funds
shall be released to InterRedec on the stated maturity date of this Note,
except that if on such date there are one or more outstanding claims for
Damages (as defined in the Stock Purchase Agreement), an amount of the
escrowed funds which would otherwise be released to InterRedec, equal to the
maximum amount of such claims for Damages, shall remain in escrow until the
resolution of such claims.
16. If, at the maturity of this Note, there are one or more
outstanding claims for Damages (as that term is defined in the Stock Purchase
Agreement), an amount of the proceeds due under this Note equal to maximum
amount of such claims for Damages shall be paid into escrow pursuant to such
terms and arrangements as the parties shall mutually and reasonably agree.
17. Vista shall deliver to InterRedec a written computation of the
Earnings Before Taxes by March 31, 1993, with respect to the First Additional
Amount, and March 31, 1995, with respect to the Second Additional
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<PAGE> 11
Amount. InterRedec shall be deemed to have accepted each such computation
provided unless, within forty-five (45) days after receipt of such written
computation, InterRedec notifies Vista of its objection in writing and, in that
event, Vista shall provide InterRedec with information pertinent to its
computation of Earnings Before Taxes for such years, together with such access
to the pertinent accounting records of American Southern and its subsidiaries
as InterRedec may reasonably request. If the parties are unable to resolve any
disputes relating to the computation of Earnings Before Taxes within thirty
(30) days of InterRedec's notice of objection to Vista's computation, the
parties shall promptly refer the matter for arbitration to a mutually agreed
major accounting firm of national standing which, at the time of such
submission, does not represent or has not represented any of the parties
hereto, and the decision of such major accounting firm shall be rendered within
not more than twenty (20) days of submission and shall be final and binding on
the parties. The expense of such arbitration shall be borne equally by the
parties.
18. If, during the term of this Note, Vista sells all of the
outstanding stock or substantially all of the assets of ASICo to a third party
(a "Subsequent Purchaser"), Vista may assign all of its rights and obligations
under this Note, together with all of its rights and obligations under the
Stock Pledge and Security Agreement, to such Subsequent Purchaser; provided,
however, that Vista (1) must first obtain the written consent of InterRedec to
such assignment which, based upon InterRedec's judgment of the
creditworthiness of the Subsequent Purchaser, shall not unreasonably be
withheld, or (2) delivers to InterRedec a bank letter of credit in a form and
from a bank reasonably acceptable to InterRedec and in an amount which at all
times shall be at least equal to the outstanding principal amount of this Note.
19. The failure or forbearance of InterRedec to exercise any right
hereunder, or otherwise granted to it by law or another agreement, shall not
affect or release the liability of Vista, and shall not constitute a waiver of
such right unless so stated by InterRedec in writing.
20. This Note shall be governed by and construed in accordance
with the substantive laws of the State of Georgia.
This Note is executed under the hand and seal of Vista on the date
first-above written.
VISTA RESOURCES, INC.
[CORPORATE SEAL] By: /s/ Samuel W. Norwood III
--------------------------
Title: President & CEO
-----------------------
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<PAGE> 12
Accepted by:
INTERREDEC, INC.
By: /s/ Bill W. Batastini
--------------------------------
Bill W. Batastini
Vice President
INTERREDEC SOUTHERN COMPANY, INC.
By: /s/ Bill W. Batastini
--------------------------------
Bill W. Batastini
Vice President
CONCORDE FINANCE & INVESTMENTS, INC.
By: /s/ Bill W. Batastini
--------------------------------
Bill W. Batastini
Vice President
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<PAGE> 13
EXHIBIT B
December 8, 1995
InterRedec Southern Company, Inc.
Post Office Box 2049
Sterling Bluff
Richmond Hill, Georgia 31324
IRREVOCABLE STANDBY LETTER OF CREDIT
Gentlemen:
We hereby open our Irrevocable Standby Letter of Credit No. S062173, in your
favor, for the account of Fuqua Enterprises, Inc., 1201 West Peachtree Street,
Suite 5000, Atlanta, Georgia 30309 up to the aggregate amount of
US$11,803,914.56 (Eleven Million Eight Hundred Three Thousand Nine Hundred
Fourteen and 56/100 US Dollars) available by your sight drafts, at sight, drawn
on First Union National Bank of Georgia, and accompanied by (1) a certificate
in the form of Annex A hereto appropriately completed and purportedly signed by
the holder of the promissory note referred to in Annex A and (2) the documents
required by the express terms of such certificate to be delivered with such
certificate.
This Irrevocable Standby Letter of Credit sets forth in full terms of our
undertaking. This undertaking shall not in any way be modified, amended or
amplified by reference to any document or contract referred to herein.
This Letter of Credit expires at this office on January 31, 1997. This Letter
of Credit is transferable. Partial drawings are not permitted.
A drawing presented to us by 12:00 noon, provided that such drawing strictly
complies with the terms hereof, will be honored by us no sooner than two
business days later. Tested telex demands for payment are not acceptable.
Draft(s) under this Letter of Credit must state on their face: "Drawn under
First Union National Bank of Georgia Letter of Credit No. S062173 dated
December 8, 1995."
We hereby engage with you that sight draft(s) drawn under and in strict
compliance with the terms of this Letter of Credit shall be duly honored by us
if presented to us, at this office, on or before the above stated expiration
date as provided for herein.
All notices, if any, with respect to this Letter of Credit will be sent by
facsimile and overnight mail to the addressee named above and to the Federal
Reserve Bank of New York, Legal Department, 33 Liberty Street, New York, New
York 10045-0001, Attention: Thomas C. Baxter, Jr., General Counsel and Executive
Vice President.
Except so far as otherwise expressly stated herein, this Letter of Credit is
subject to the "Uniform Customs and Practice for Documentary Credits (1993
Revision), International Chamber of Commerce Publication No. 500."
Very truly yours,
FIRST UNION NATIONAL BANK OF GEORGIA
/s/ T. Walker Brown
----------------------
By: T. Walker Brown
Title: Vice President
<PAGE> 14
ANNEX A
DRAWING CERTIFICATE
First Union National Bank of Georgia
Two First Union Center, T-7
301 South Tryon Street
Charlotte, North Carolina 28288-0742
Re: Irrevocable Letter of Credit No. S062173 (the
"Letter of Credit") For the Account of Fuqua
Enterprises, Inc., formerly known as Vista Resources,
Inc. (the "Applicant")
Ladies and Gentlemen:
Reference is made to that certain Nonnegotiable Note dated October 11, 1991
executed by the Applicant, payable to InterRedec Southern Company, Inc.
("InterRedec") in the original principal amount of $8,000,000 (the "Note").
The undersigned, the Federal Reserve Bank of New York (the "Holder") hereby
certifies to First Union National Bank of Georgia and to the Applicant that:
1. The Holder is the legal and rightful holder of the Note and is
entitled to make this demand for payment under the Letter of Credit.
2. Attached to this Certificate are (a) the original of the Note and (b)
a copy of the written disbursement instructions executed by the Secretary of
the Board of Governors of the Federal Reserve System (the "Board") required to
be delivered to the Federal Reserve Bank of New York (the "New York Fed") under
Section 10(b) of the Escrow and Security Agreement dated October 8, 1991 by
and among the Board, InterRedec, Inc., the Applicant, Concord Finance &
Investment, Inc., Randy A. Mastro and the Federal Reserve Bank of New York.
3. An Event of Default under and as defined in that certain Stock Pledge
and Security Agreement dated as of October 11, 1991 (the "Pledge Agreement") by
and between the Applicant and InterRedec ("Event of Default") has occurred and
is continuing under Section 3(a) thereof.
4. With respect to paragraphs 5(a), (b) or (c) below, InterRedec has
given written notice to the Applicant at least 30 day's prior to the date of
this certificate, that InterRedec intends to exercise its default rights and
remedies under the Pledge Agreement by drawing on the Letter of Credit. A true
copy of such notice is attached to this Certificate.
5. The statement noted below is true [check one of the following as
applicable]:
[ ] (a) The Applicant and InterRedec have agreed
in writing (including an agreement as to the amount owed
by the Applicant to the Holder) that InterRedec is
entitled to exercise its default rights and remedies
under the Pledge Agreement and a true copy of such
written agreement is attached to this Certificate;
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<PAGE> 15
[ ] (b) The Applicant and InterRedec have agreed to
arbitration procedures with respect to whether
InterRedec is entitled to exercise its default rights
and remedies under the Pledge Agreement, and the
arbitrator thereunder has entered an award in
InterRedec's favor and a true copy of such award is
attached to this Certificate; or
[ ] (c) A court of competent jurisdiction has entered a
judgment in InterRedec's favor that InterRedec is
entitled to exercise its default rights and remedies
under the Pledge Agreement and a true copy of such
judgment is attached to this Certificate.
[ ] (d) After exercising reasonable efforts but in any event
no sooner than 30 days after an Event of Default has
occurred, the Holder has not been able to agree with
the Applicant as to the terms and arrangements of an
escrow as described in paragraph 16 of the Note and
at least 10 days have elapsed since the Holder has
notified the Applicant in writing that it intends to
draw under the Letter of Credit pursuant to this
paragraph 5(d).
6. The Holder is entitled to payment under the Letter of Credit
in the amount of $ . The holder acknowledges that in the event
it draws under the Letter of Credit based upon the certification set forth in
paragraph 5(d) above, the amount the Holder is entitled to draw under the
Letter of Credit shall not exceed $8,803,914.56.
7. Please direct payment under the Letter of Credit by wire
transfer to:
Federal Reserve Bank of New York
59 Maiden Lane, 10th Floor
New York, New York 10045
Attention: Thomas C. Baxter
General Counsel and Executive Vice President
ABA No. 021001208
For further credit to account number 021039898
8. Upon payment by you of the amount demanded hereby in
accordance with the payment instructions set forth above, you are hereby
instructed (a) to mark the Note "Paid in Full" and (b) to deliver the Note to
the Applicant.
IN WITNESS WHEREOF, the undersigned has duly executed and delivered this
Certificate.
[HOLDER OF NOTE]
By:
Name:
Title:
2
<PAGE> 1
EXHIBIT 99.1
NEWS RELEASE Fuqua Enterprises, Inc.
One Atlantic Center
Suite 5000
1201 W. Peachtree Street, NW
Atlanta, Georgia 30309
Contact:
John J. Huntz, Jr.
(404) 815-2000
FUQUA ENTERPRISES CLOSES THE SALE OF
AMERICAN SOUTHERN INSURANCE COMPANY
FOR IMMEDIATE RELEASE
Atlanta, Georgia (January 2, 1996) - Fuqua Enterprises, Inc. (NYSE -
FQE) today announced that on December 31, 1995, it closed the sale of its
insurance subsidiary, American Southern Insurance Company ("American
Southern"), to Atlantic American Corporation for $34 million.
"Although American Southern is a well-managed, solidly profitable
company, remaining in the insurance business is not consistent with Fuqua
Enterprises' plans to focus on the continued growth of its core manufacturing
businesses, especially its medical products segment," said J. Rex Fuqua, Fuqua
Enterprises' Vice Chairman. Mr. Fuqua noted that Fuqua Enterprises has earned a
return of approximately 17% on its investment in American Southern since its
purchase in 1991 and that the cash proceeds from the sale will further enhance
management's goal to vigorously pursue future growth opportunities through
acquisitions.
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