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: September 25, 1997
ShoLodge, Inc.
(Exact name of registrant as specified in its charter)
Tennessee
(State or other jurisdiction of
incorporation or organization)
0-19840 62-1015641
(Commission File Number) (I.R.S. Employer Identification
Number)
130 Maple Drive North
Hendersonville, TN
(Address of principal executive offices)
37075
(Zip Code)
615-264-8000
(Registrant's telephone number)
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ITEM 5 - OTHER EVENTS.
On September 25, 1997 the Company closed its public offering of
$35,000,000 of 9.55% Senior Subordinated Notes, due 2007, Series B (the
"Notes'). The net proceeds from the sale of the Notes will be used to
reduce certain indebtedness of the Company under its revolving credit
facility incurred (i) to fund development and renovation of lodging
facilities and (ii) for general corporate purposes.
ITEM 7 - FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS.
The following exhibits are being filed herewith:
1. Underwriting Agreement dated September 22, 1997 between the
Company and J. C. Bradford & Co., L.L.C. and Dain Bosworth Incorporated as
representatives of the several underwriters, relating to the Company's
offering of $35,000,000 of 9.55% Senior Subordinated Notes, due 2007,
Series B.
2. Second Supplemental Indenture dated as of September 25, 1997
relating to 9.55% Senior Subordinated Notes due 2007, Series B,
supplemental to Indenture dated November 15, 1996, including form of notes.
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Signatures
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
SHOLODGE, INC.
Date: September 29, 1997 By : /s/ Bob Marlowe
Bob Marlowe
Chief Accounting Officer,
Secretary and Treasurer
SHOLODGE, INC.
$35,000,000
9.55% Senior Subordinated Notes Due 2007, Series B
UNDERWRITING AGREEMENT
September 22, 1997
J.C. BRADFORD & CO., L.L.C.
DAIN BOSWORTH INCORPORATED
As Representatives of the Several Underwriters
c/o J.C. Bradford & Co., L.L.C.
J.C. Bradford Financial Center
330 Commerce Street
Nashville, Tennessee 37201
Ladies and Gentlemen:
ShoLodge, Inc., a Tennessee corporation (the "Company"), proposes to
sell to the underwriters named in Schedule I hereto (the "Underwriters")
for whom you are acting as the representatives (the "Representatives") an
aggregate of $35,000,000 in principal amount of its 9.55% Senior
Subordinated Notes Due 2007, Series B(the "Notes"). The Notes are to be
sold to the Underwriters, acting severally and not jointly, in such amounts
as are set forth in Schedule I hereto opposite the name of such
Underwriter. The Notes are to be issued pursuant to an Indenture, dated as
of November 15, 1996, between the Company and Bankers Trust Company, New
York, New York, as trustee (the "Trustee") as amended and supplemented by a
Second Supplemental Indenture to be dated as of September 25, 1997. Such
Indenture, as amended and supplemented, is herein referred to as the
"Indenture."
1. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, each of the Underwriters that:
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Securities Act"), a registration statement on Form S-3
(Registration No.333-14463), including the related preliminary
prospectus, preliminary prospectus supplement and a Statement of
Eligibility on Form T-1 with respect to the Trustee pursuant to the
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Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"),
has filed such amendment thereto, if any, and such amended preliminary
prospectuses and amended preliminary prospectus supplements as may
have been required to the date hereof, and will file such additional
amendments thereto and such amended prospectuses and prospectus
supplements as may hereafter be required, relating to the Notes. The
Company has met all of the eligibility requirements for the use of a
registration statement on Form S-3. Copies of such registration
statement and any amendments, including any post-effective amendments,
and all forms of the related prospectuses and prospectus supplements
contained therein, any supplements thereto and all documents
incorporated by reference therein, have been delivered to you. Such
registration statement, including the prospectus, prospectus
supplement, Part II, all financial schedules and exhibits thereto, all
documents incorporated therein by reference, and all information
deemed to be a part of such Registration Statement pursuant to Rule
430A under the Securities Act, as amended at the time when it shall
become effective, is herein referred to as the "Registration
Statement," and the prospectus and prospectus supplement used in
connection with the offer and sale of the Notes included as part of
the Registration Statement on file with the Commission that discloses
all the information that was omitted from the prospectus on the
effective date hereof pursuant to Rule 430A of the Rules and
Regulations (as defined below) and in the form filed pursuant to Rule
424(b) under the Securities Act, together with all documents
incorporated by reference therein, is herein referred to as the
"Final Prospectus." Any prospectus and prospectus supplement used in
connection with the offer and sale of the Notes included in the
Registration Statement and in any amendment thereto prior to the date
the Notes are first offered to the public together with all documents
incorporated by reference therein, is referred to herein as a
"Preliminary Prospectus." For purposes of this Agreement, "Rules and
Regulations" means the rules and regulations promulgated by the
Commission under either the Securities Act, or the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), or the Trust Indenture
Act, as applicable.
(b) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus, and each Preliminary
Prospectus, at the time of filing thereof, complied with the
requirements of the Securities Act and the Rules and Regulations, and
did not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; except that the foregoing does
not apply to statements or omissions made in reliance upon and in
conformity with written information furnished to the Company by any
Underwriter specifically for use therein (it being understood that the
only information so provided is the information included in the last
paragraph on the cover page and under the caption "Underwriting" in
the Preliminary Prospectus). When the Registration Statement becomes
effective and at all times subsequent thereto up to and including the
Closing Date (as hereinafter defined), (i) the Registration Statement,
the Preliminary Prospectus and Final Prospectus and any amendments or
supplements thereto will contain all statements which are required to
be stated therein in accordance with the Securities Act, the Exchange
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Act, the Trust Indenture Act and the Rules and Regulations and will
comply with the requirements of the Securities Act, the Exchange Act,
the Trust Indenture Act and the Rules and Regulations, and (ii)
neither the Registration Statement, the Preliminary Prospectus nor the
Final Prospectus nor any amendment or supplement thereto will include
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances in which they are made, not
misleading; except that the foregoing does not apply to statements or
omissions made in reliance upon and in conformity with written
information furnished to the Company by any Underwriter specifically
for use therein (it being understood that the only information so
provided is the information included in the last paragraph on the
cover page and under the caption "Underwriting" in the Preliminary
Prospectus and the Final Prospectus) or information contained in the
Statement of Eligibility and Qualification on Form T-1 of the Trustee
other than information furnished to the Trustee by the Company
specifically for inclusion therein.
(c) The Company and each subsidiary of the Company (as defined
herein, the term "subsidiary" includes any corporation, joint venture
or partnership in which the Company or any subsidiary of the Company
has an ownership interest) is duly organized and validly existing and
in good standing under the laws of the respective jurisdictions of
their organization or incorporation, as the case may be, with full
power and authority (corporate, partnership and other, as the case may
be) to own, lease and operate their properties and conduct their
businesses as now conducted and are duly qualified or authorized to do
business and are in good standing in all jurisdictions wherein the
nature of its business or the character of property owned or leased
may require it to be qualified or authorized to do business. The
Company and its subsidiaries hold all licenses, consents and
approvals, and have satisfied all eligibility and other similar
requirements imposed by federal and state regulatory bodies,
administrative agencies or other governmental bodies, agencies or
officials, in each jurisdiction in which the Company has an office and
any other jurisdiction in which such license, consent, approval or
requirement is material to the conduct of the business in which it is
engaged.
(d) The outstanding shares of capital stock of the Company and
its corporate subsidiaries have been duly authorized and validly
issued, fully paid and nonassessable and were not issued in violation
of any preemptive or similar rights. All of the outstanding stock of
each of the Company's corporate subsidiaries is owned by the Company,
clear of any lien, encumbrance, pledge, equity or claim of any kind.
The partnership and joint venture interests of each partnership and
joint venture subsidiary are duly authorized, validly issued, and are
owned by the Company, directly or indirectly, clear of any lien,
encumbrance, pledge, equity or claim of any kind, except as may be set
forth in the respective partnership or joint venture agreement.
(e) The capitalization of the Company as of July 13, 1997 is as
set forth under the caption "Capitalization" in the Preliminary
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Prospectus and the Final Prospectus. The Notes have been duly and
validly authorized and, when executed, authenticated and delivered in
accordance with the Indenture and paid for by the Underwriters
pursuant to this Agreement and the Indenture, will constitute legal
and binding obligations of the Company entitled to the benefits of the
Indenture and will conform in all material respects to the description
thereof contained in the Preliminary Prospectus and the Final
Prospectus. The Underwriters will receive good and marketable title
to the Notes to be issued and delivered hereunder, free and clear of
all liens, encumbrances, claims, security interests, and restrictions,
whatsoever.
(f) The Company has full legal right, power and authority to
enter into this Agreement and the Indenture and to sell and deliver
the Notes to be issued and sold by the Company to the Underwriters as
provided herein, and this Agreement and the Indenture have been duly
authorized, executed and delivered by the Company and constitute valid
and binding agreements of the Company enforceable against the Company
in accordance with their terms. No consent, approval, authorization or
order of any court or governmental agency or body or third party is
required for the performance of this Agreement or the Indenture by the
Company or the consummation by the Company of the transactions
contemplated hereby or thereby, except such as have been obtained and
such as may be required by the National Association of Securities
Dealers, Inc. ("NASD") or under the Securities Act, the Trust
Indenture Act or state securities or Blue Sky laws in connection with
the purchase and distribution of the Notes by the Underwriters. The
issue and sale of the Notes by the Company, the Company's performance
of this Agreement and the Indenture and the consummation of the
transactions contemplated hereby and thereby will not result in a
breach or violation of, or conflict with, any of the terms and
provisions of, or constitute a default by the Company or any of its
subsidiaries under, any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which the Company
or any of its subsidiaries is a party or to which the Company or any
of its subsidiaries or any of their respective properties is subject,
the charter or by-laws of the Company or any of its corporate
subsidiaries or the partnership or joint venture agreements of any
partnership or joint venture subsidiary or any statute or any
judgment, decree, order, rule or regulation of any court or
governmental agency or body applicable to the Company or any of its
subsidiaries or any of their respective properties. Neither the
Company nor any of its subsidiaries is in violation of its respective
charter, certificate of incorporation, partnership agreement or joint
venture agreement, as the case may be, or by-laws or any law,
administrative rule or regulation or arbitrators' or administrative or
court decree, judgment or order or in violation or default (there
being no existing state of facts which with notice or lapse of time or
both would constitute a default) in the performance or observance of
any obligation, agreement, covenant or condition contained in any
contract, indenture, deed of trust, mortgage, loan agreement, note,
lease, agreement or other instrument or permit to which it is a party
or by which it or any of its properties is or may be bound, except
such violation or defaults which in the aggregate would not be
material to the Company and its subsidiaries taken as a whole.
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(g) The consolidated financial statements and the related notes
of the Company included or incorporated by reference in the
Registration Statement, the Preliminary Prospectus and the Final
Prospectus present fairly the consolidated financial position, results
of operations and changes in financial position and cash flow of the
Company and its subsidiaries, at the dates and for the periods to
which they relate and have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis
throughout the periods indicated. The other financial statements and
schedules included or incorporated by reference in or as schedules to
the Registration Statement conform to the requirements of the
Securities Act, the Exchange Act, the Trust Indenture Act and the
Rules and Regulations and present fairly the information presented
therein for the periods shown. The financial and statistical data set
forth in the Preliminary Prospectus and the Final Prospectus under the
captions "Prospectus Summary," "Use of Proceeds," "Capitalization,"
"Selected Consolidated Financial Data," "Management's Discussion and
Analysis of Financial Condition and Results of Operations," and
"Business" fairly presents the information set forth therein on the
basis stated in the Preliminary Prospectus and the Final Prospectus.
Deloitte & Touche LLP, which has examined certain of the financial
statements and schedules as set forth in its reports incorporated by
reference into the Registration Statement, Preliminary Prospectus and
the Final Prospectus, are independent accountants as required by the
Securities Act and the Rules and Regulations.
(h) The Company's Annual Report on Form 10-K for the fiscal year
ended December 29, 1996, and Quarterly Reports on Form 10-Q for the
fiscal quarters ended April 20, 1997 and July 13, 1997, at the time
of filing with the Commission, conformed in all material respects to
the requirements of the Securities Act and the Exchange Act and the
Rules and Regulations and none of such documents or statements
contained any untrue statement of a material fact or omitted to state
a fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they
were made not misleading.
(i) Subsequent to December 29, 1996, neither the Company nor any
of its subsidiaries has sustained any material loss or interference
with its business or properties from fire, flood, hurricane,
earthquake, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, which is not disclosed in the Preliminary Prospectus
and the Final Prospectus; and subsequent to the respective dates as of
which information is given in the Registration Statement, the
Preliminary Prospectus and the Final Prospectus, (i) neither the
Company nor any of its subsidiaries has incurred any material
liabilities or obligations, direct or contingent, or entered into any
material transactions not in the ordinary course of business, and (ii)
there has not been any material change in the capital stock,
partnership interests, joint venture interests, long-term debt, credit
facilities, obligations under capital leases or short-term borrowings
of the Company or any of its subsidiaries, or any material adverse
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change, or any development involving a prospective material adverse
change, in the general affairs, management, business, prospects,
financial position, net worth or results of operations of the Company
or any of its subsidiaries, except in each case as described in or
contemplated by the Preliminary Prospectus and the Final Prospectus.
(j) There are no legal or governmental proceedings required to
be described in the Registration Statement, the Preliminary Prospectus
or the Final Prospectus that are not described as required. Except as
described in the Preliminary Prospectus and the Final Prospectus,
there is not pending, or to the knowledge of the Company threatened,
any action, suit, proceeding, inquiry or investigation, to which the
Company or any of its subsidiaries, or any of their respective
officers or directors is a party, or to which the property of the
Company or any of its subsidiaries is subject, before or brought by
any court or governmental agency or body, wherein an unfavorable
decision, ruling or finding could prevent or materially hinder the
consummation of this Agreement or result in a material adverse change
in the business condition (financial or other), prospects, financial
position, net worth or results of operations of the Company or any of
its subsidiaries taken as a whole.
(k) There are no contracts or other documents required by the
Securities Act or by the Rules and Regulations to be described in the
Registration Statement, the Preliminary Prospectus or the Final
Prospectus or to be filed as exhibits to the Registration Statement
which have not been described or filed as required.
(l) Except as described in the Preliminary Prospectus and the
Final Prospectus, the Company and its subsidiaries each have good and
marketable title to all real and material personal property owned by
them, free and clear of all material liens, charges, encumbrances or
defects except those reflected in the financial statements hereinabove
described. The real and personal property and buildings referred to
in the Preliminary Prospectus and the Final Prospectus which are
leased from others by the Company or its subsidiaries are held under
valid, subsisting and enforceable leases. The Company or its
subsidiaries own or lease all such properties as are necessary to
their operations as now conducted.
(m) The Company's system of internal accounting controls taken
as a whole is sufficient to meet the broad objectives of internal
accounting control insofar as those objectives pertain to the
prevention or detection of errors or irregularities in amounts that
would be material in relation to the Company's financial statements.
Except as disclosed in the Preliminary Prospectus and the Final
Prospectus, neither the Company nor any of its subsidiaries, nor to
the best of the Company's knowledge any employee or agent of the
Company or any subsidiary, director, officer, agent, employee or other
person acting on behalf of the Company or any of its subsidiaries has,
directly or indirectly used any funds of the Company or any of its
subsidiaries for unlawful contributions, gifts, entertainment or other
<PAGE>
unlawful expenses relating to political activity; made any unlawful
payment to foreign or domestic government officials or employees or to
foreign or domestic political parties or campaigns from corporate
funds; violated any provision of the Foreign Corrupt Practices Act of
1977, as amended; made any bribe, rebate, payoff, influence payment,
kickback or other unlawful payment; or received or retained any funds
in violation of any law, rule or regulation.
(n) The Company and its subsidiaries have filed all federal,
state and all material local income, excise and franchise tax returns
required to be filed through the date hereof and have paid all taxes
shown as due therefrom; and there is no tax deficiency that has been,
nor does the Company or any subsidiary have knowledge of any tax
deficiency which is likely to be, asserted against the Company or any
of its subsidiaries, which if determined adversely could materially
and adversely affect the earnings, assets, affairs, business prospects
or condition (financial or other) of the Company or any of its
subsidiaries taken as a whole.
(o) The Company and its subsidiaries operate their business in
conformity in all material respects with all applicable statutes,
common laws, ordinances, decrees, orders, rules and regulations of
governmental bodies. Each of the hotels owned, leased, operated or
managed, directly or indirectly, by the Company and its subsidiaries
is being operated in compliance in all material respects with all
applicable laws, orders, rules or regulations and has all licenses,
approvals or consents now required to operate as currently being
operated, and the Company and its subsidiaries are not aware of any
existing or imminent matter which may materially adversely impact the
operations or business prospects of any of its hotels other than as
specifically disclosed in the Preliminary Prospectus and the Final
Prospectus.
(p) The Company and its subsidiaries have filed with the
applicable regulatory authorities all statements, reports, information
or forms now required by any applicable law, regulation or order; all
such filings or submissions were in material compliance with
applicable laws when filed and no deficiencies have been asserted by
any regulatory commission, agency or authority with respect to such
filings or submissions. Neither the Company nor any of its
subsidiaries has failed to maintain in full force and effect any
material license or permit necessary or proper for the conduct of its
business, or received any notification that any revocation or
limitation thereof is threatened or pending, and, except as disclosed
in the Preliminary Prospectus and the Final Prospectus, the Company is
not aware of any pending change under any law, regulation, license or
permit which would materially adversely affect their businesses,
operations, property or business prospects. Neither the Company nor
any of its subsidiaries has received any notice of violation of or
been threatened with a charge of violating and is not, to the best of
the Company's knowledge, under investigation with respect to a
possible violation of any provision of any law, regulation or order.
(q) No labor dispute exists with the employees of the Company or
its subsidiaries or is imminent which would materially adversely
<PAGE>
affect the Company or its subsidiaries taken as a whole. The Company
is not aware of any existing or imminent labor disturbance by its
employees or by any employees of its subsidiaries which could be
expected to materially adversely affect the condition (financial or
otherwise), results of operations, properties, affairs, management,
business affairs or business prospects of the Company or any of its
subsidiaries.
(r) Except as disclosed in the Preliminary Prospectus and the
Final Prospectus, the Company or its subsidiaries own or possess, or
can acquire on reasonable terms, the patents, licenses, copyrights,
trademarks, service marks and trade names presently employed by them
in connection with the businesses now operated by them, including all
rights necessary to use and franchise the use of the "Shoney's Inn",
"Shoney's Inn & Suites" and "Innlink" and "Sumner Suites" service
marks, and neither the Company nor any of its subsidiaries has
received any notice of infringement of or conflict with asserted
rights of others with respect to any of the foregoing which the
Company believes, alone or in the aggregate, would result in any
material adverse change in the condition (financial or otherwise),
results of operations, properties, affairs, management, business
affairs or business prospects of the Company or its subsidiaries,
taken as a whole.
(s) Neither the Company nor any of its subsidiaries nor to the
knowledge of the Company any of the respective directors, officers,
employees or agents of the Company and its subsidiaries, have taken or
will take, directly or indirectly, any action designed to cause or
result in, or which has constituted or which might be expected to
constitute, stabilization or manipulation of the price of the capital
stock or other securities of the Company.
(t) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the
businesses in which each is engaged; and the Company has no reason to
believe that it will not be able to renew such existing insurance
coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its
business at a comparable cost.
(u) Neither the Company nor any of its subsidiaries is or will
be as a result of the consummation of the transactions contemplated by
this Agreement, an "investment company" or a company "controlled" by
an "investment company" within the meaning of the Investment Company
Act of 1940.
(v) Neither the Company nor any agent acting on its behalf has
taken or will take any action that might cause this Agreement or the
sale of the Notes to violate Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System.
(w) Except as disclosed to the Underwriters in writing, neither
the Company nor any director, officer or holder of five percent or
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more of any class of securities of the Company or any of its
subsidiaries is a member or an associate or affiliate of a member of
the "NASD."
(x) The Company has filed with the Commission and the NASD all
reports, documents and statements required to be filed by the Company
pursuant to the Securities Act, the Exchange Act, the Rules and
Regulations and all the rules and regulations of the NASD relating to
the Company's capital stock, and each of such reports, documents and
statements, at the time that they were filed, complied in all material
respects with the requirements of the Securities Act, the Exchange Act
and the Rules and Regulations.
2. PURCHASE, SALE AND DELIVERY OF THE NOTES.
(a) On the basis of the representations, warranties, agreements
and covenants herein contained and subject to the terms and conditions
herein set forth, the Company agrees to sell to each of the
Underwriters, and each of the Underwriters, severally and not jointly,
agrees to purchase at a purchase price of $965 per $1,000 principal
amount, the principal amount of Notes set forth opposite such
Underwriter's name in Schedule I hereto.
(b) Certificates in definitive form for the Notes which each
Underwriter has agreed to purchase hereunder shall be delivered by or
on behalf of the Company to the Underwriters for the account of such
Underwriter against payment by such Underwriter or on its behalf of
the purchase price therefor by certified or official bank check
payable in next day funds to the order of the Company at the offices
of J.C. Bradford & Co., L.L.C., ("Bradford"), 330 Commerce Street,
Nashville, Tennessee 37201, or at such other place as may be agreed
upon by Bradford and the Company, at 10:00 A.M., Nashville time, on
the third full business day after this Agreement becomes effective,
or, at the election of the Representatives, on the fourth full
business day after this Agreement becomes effective, if it becomes
effective after 4:30 P.M. Eastern time, or at such other time not
later than the seventh full business day thereafter as the
Representatives and the Company may determine, such time of delivery
against payment being herein referred to as the "Closing Date." The
certificates in definitive form for the Notes to be delivered will be
in good delivery form and in such denominations and registered in such
names as Bradford may request not less than 48 hours prior to the
Closing Date. Such certificates will be made available for checking
and packaging at a location in New York, New York as may be designated
by you, at least 24 hours prior to the Closing Date. It is understood
that you may (but shall not be obligated to) make payment on behalf of
any Underwriter or Underwriters for the Notes to be purchased by such
Underwriter or Underwriters. No such payment shall relieve such
Underwriter or Underwriters from any of its or their obligations
hereunder.
3. OFFERING BY THE UNDERWRITERS. After this Agreement becomes
effective, the several Underwriters propose to offer for sale to the public
<PAGE>
the Notes which may be sold at the price and upon the terms set forth in
the Final Prospectus. The several Underwriters agree that they will
deliver the Preliminary Prospectus and the Final Prospectus as required by
Rule 15c2-8 enacted under the Exchange Act.
4. COVENANTS OF THE COMPANY. The Company covenants and agrees with
each of the Underwriters that:
(a) The Company shall comply with the provisions of and make all
requisite filings with the Commission pursuant to Rules 424 and 430A
of the Rules and Regulations and to notify you promptly (in writing,
if requested) of all such filings. The Company shall notify you
promptly of any request by the Commission for any amendment of or
supplement to the Registration Statement, the Preliminary Prospectus
or the Final Prospectus or for additional information; the Company
shall prepare and file with the Commission, promptly upon your
request, any amendments of or supplements to the Registration
Statement, the Preliminary Prospectus or the Final Prospectus which,
in your opinion, may be necessary or advisable in connection with the
distribution of the Notes; and the Company shall not file any
amendment of or supplement to the Registration Statement, the
Preliminary Prospectus or the Final Prospectus which is not approved
by you after reasonable notice thereof, such approval not to be
unreasonably withheld or delayed. The Company shall advise you
promptly of the issuance by the Commission or any jurisdiction or
other regulatory body of any stop order or other order suspending the
effectiveness of the Registration Statement, suspending or preventing
the use of the Preliminary Prospectus or the Final Prospectus or
suspending the qualification of the Notes for offering or sale in any
jurisdiction, or of the institution of any proceedings for any such
purpose; and the Company shall use its best efforts to prevent the
issuance of any stop order or other such order and, should a stop
order or other such order be issued, to obtain as soon as possible the
lifting thereof.
(b) The Company will take or cause to be taken all necessary
action and furnish to whomever you direct such information as may be
reasonably required in qualifying the Notes for offer and sale under
the securities or Blue Sky laws of such jurisdictions as the
Underwriters may designate and will continue such qualifications in
effect for as long as may be reasonably necessary to complete the
distribution of the Notes.
(c) Within the time during which a Final Prospectus relating to
the Notes is required to be delivered under the Securities Act, the
Company shall comply with all requirements imposed upon it by the
Securities Act, as now and hereafter amended, and by the Rules and
Regulations, as from time to time in force, so far as is necessary to
permit the continuance of sales of or dealings in the Notes as
contemplated by the provisions hereof and the Final Prospectus. If
during such period any event occurs as a result of which the Final
Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances then existing, not misleading, or if during such period
<PAGE>
it is necessary to amend the Registration Statement or supplement the
Final Prospectus to comply with the Securities Act, the Company shall
promptly notify you and shall amend the Registration Statement or
supplement the Final Prospectus (at the expense of the Company) so as
to correct such statement or omission or effect such compliance.
(d) The Company will furnish without charge to the
Representatives and make available to the Underwriters copies of the
Preliminary Prospectus and the Final Prospectus, and all amendments
and supplements thereto, in each case as soon as available and in such
quantities as the Underwriters may reasonably request.
(e) The Company will (i) deliver to you at such office or
offices as you may designate as many copies of the Preliminary
Prospectus and Final Prospectus as you may reasonably request, and
(ii) for a period of not more than nine months after the Registration
Statement becomes effective, send to the Underwriters as many
additional copies of the Final Prospectus and any supplement thereto
as you may reasonably request.
(f) The Company will apply the net proceeds from the sale of the
Notes as set forth under the caption "Use of Proceeds" in the Final
Prospectus.
(g) The Company will, from time to time, after the effective
date of this Agreement file with the Commission such reports as are
required by the Securities Act, the Exchange Act and the Rules and
Regulations, and shall also file with state securities commissions in
states where the Notes have been sold by you (as you shall have
advised us in writing) such reports as are required to be filed by the
securities acts and the regulations of those states.
(h) If at any time during the 25 day period after the date of
the Final Prospectus, any rumor, publication or event relating to or
affecting the Company shall occur as a result of which, in your
opinion, the market price for the Notes has been or is likely to be
materially affected (regardless of whether such rumor, publication or
event necessitates a supplement to or amendment of the Final
Prospectus), the Company will, after written notice from you advising
it as to the effect set forth above, prepare, consult with you
concerning the substance of and disseminate a press release or other
public statement, reasonably satisfactory to you, responding to or
commenting on such rumor, publication or event.
(i) The Company will not take, directly or indirectly, any
action designed to cause or result in, or which might constitute or be
expected to constitute, stabilization or manipulation of the price of
the Notes or of any other security to facilitate the sale or resale of
the Notes.
<PAGE>
5. EXPENSES. The Company agrees with the Underwriters that (a)
whether or not the transactions contemplated by this Agreement are
consummated or this Agreement becomes effective or is terminated, the
Company will pay all fees and expenses incident to the performance of the
obligations of the Company hereunder, including, but not limited to, (i)
the Commission's registration fee, (ii) the expenses of printing (or
reproduction) and distributing the Preliminary Prospectus, the Final
Prospectus, any amendments or supplements thereto, the Indenture and this
Agreement and other underwriting documents, including Underwriter's
Questionnaires, Underwriter's Powers of Attorney, Blue Sky Memoranda,
Selected Dealer Agreements and Agreements Among Underwriters, (iii) fees
and expenses of accountants and counsel for the Company, (iv) expenses of
registration or qualification of the Notes under state Blue Sky and
securities laws, including the fees and disbursements of counsel to the
Underwriters in connection therewith, (v) filing fees paid or incurred by
the Underwriters and related fees and expenses of counsel to the
Underwriters in connection with filings with the NASD, (vi) all travel,
lodging and reasonable living expenses incurred by the Company in
connection with marketing, dealer and other meetings attended by the
Company and the Underwriters in marketing the Notes, (vii) the costs and
charges of the Company's transfer agent and registrar and the cost of
preparing the certificates for the Notes, (viii) the fees and expenses of
the Trustee in connection with the Indenture and the Notes and (ix) all
other costs and expenses incident to the performance of the Company's
obligations hereunder not otherwise provided for in this Section; and (b)
actual, accountable out-of-pocket expenses, including counsel fees,
disbursements and expenses, incurred by the Underwriters in connection with
investigating, preparing to market and marketing the Notes and proposing to
purchase and purchasing the Notes under this Agreement, will be borne and
paid by the Company if the sale of the Notes provided for herein is not
consummated (i) by reason of the termination of this Agreement by the
Company pursuant to Section 12(a)(i), (ii) by reason of termination of this
Agreement by the Underwriters pursuant to Sections 12(b)(iii), 12(b)(iv) or
12(b)(v), or (iii) because of any failure or refusal on the part of the
Company to comply with the terms or fulfill any of the conditions of this
Agreement.
6. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The respective
obligations of the Underwriters to purchase and pay for the Notes shall be
subject, in their discretion, to the accuracy of the representations and
warranties of the Company herein as of the date hereof and as of the
Closing Date as if made on and as of the Closing Date, to the accuracy of
the statements of the Company's officers made pursuant to the provisions
hereof, to the performance by the Company of all of its covenants and
agreements hereunder and to the following additional conditions:
(a) All filings required by Rule 424 and Rule 430A of the Rules
and Regulations shall have been made; no stop order suspending the
effectiveness of the Registration Statement shall have been issued and
no proceedings for that purpose shall have been instituted or
threatened or, to the knowledge of the Company or the Underwriters,
shall be contemplated by the Commission; any request of the Commission
for additional information (to be included in the Registration
Statement or the Final Prospectus or otherwise) shall have been
<PAGE>
complied with to your satisfaction; and the NASD, upon review of the
terms of the public offering of the Notes, shall not have objected to
such offering, such terms or the Underwriters' participation in the
same.
(b) No Underwriter shall have advised the Company that the
Registration Statement, Preliminary Prospectus, or Final Prospectus,
any documents incorporated therein by reference, or any amendment or
any supplement thereto, contains an untrue statement of fact which, in
your judgment, is material, or omits to state a fact which, in your
judgment, is material and is required to be stated therein or
necessary to make the statements therein not misleading and the
Company shall not have cured such untrue statement of fact or stated a
statement of fact required to be stated therein.
(c) The Representatives shall have received an opinion, dated
the Closing Date, from Boult, Cummings, Conners & Berry, PLC, counsel
for the Company, to the effect that:
(i) The Company is validly existing in good standing as a
corporation under the laws of the State of Tennessee, with all
requisite corporate power and authority to own, lease and operate
its properties and conduct its business as now conducted, and is
duly qualified to do business as a foreign corporation in good
standing in all other jurisdictions where the failure to so
qualify would have a material adverse effect upon the business of
the Company and its subsidiaries taken as a whole.
(ii) Each corporate subsidiary of the Company is validly
existing in good standing under the laws of the jurisdiction of
its incorporation, has all requisite corporate power and
authority to own, lease and operate its properties and to conduct
its business as now conducted; each such corporate subsidiary is
duly qualified or authorized to do business as a foreign
corporation and is in good standing in all jurisdictions where
the failure to so qualify would have a material adverse effect
upon the business of the Company and its subsidiaries taken as a
whole. The corporate records reflect that all outstanding stock
of each of the corporate subsidiaries is owned beneficially and
of record by the Company, free and clear of all liens,
encumbrances, equities and claims. The partnership and joint
ventures in which the Company or its subsidiaries are partners or
joint venturers were formed in accordance with applicable
partnership law and, to the knowledge of such counsel, such
partnership and joint venture interests are owned clear of any
lien, encumbrance, pledge, equity or claim of any kind. To such
counsel's knowledge, no options or warrants or other rights to
purchase, agreements or other obligations to issue or other
rights to convert any obligations into any shares of capital
stock or of ownership interests in any of the Company's
subsidiaries are outstanding, except such rights as may be set
forth in the partnership or joint venture agreements.
<PAGE>
(iii)The Notes have been duly and validly authorized and,
when executed by the Company, authenticated by the Trustee in
accordance with the Indenture and delivered in accordance with
this Agreement, will constitute legal and binding obligations of
the Company entitled to the benefits of the Indenture, except as
enforceability may be limited by general equitable principles,
bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfers, fraudulent conveyances or other laws affecting
creditor's rights generally. Upon issuance and delivery thereof
and payment therefor as provided in the Underwriting Agreement,
the Underwriters will receive good and marketable title to the
Notes to be issued and delivered pursuant to this Agreement, free
and clear of all liens, encumbrances, claims, security interests
and restrictions. The Notes conform in all material respects to
the description thereof contained in the Final Prospectus.
(iv) The Company has all requisite corporate right, power
and authority to enter into and perform its obligations under
this Agreement and the Indenture and to issue, sell and deliver
the Notes to be sold by it to the Underwriters as provided
herein, and this Agreement and the Indenture have been duly
authorized, executed and delivered by the Company and each
constitutes the valid and legally binding obligation of the
Company enforceable against the Company in accordance with its
terms, subject to the usual and customary exceptions in legal
opinions of this nature.
(v) No consent, approval, authorization or order of any
court or governmental agency or body or third party is required
for the performance of this Agreement and the Indenture by the
Company or the consummation by the Company of the transactions
contemplated hereby and thereby, except (i) such as have been
obtained from third parties, (ii) such as have been obtained
under the Securities Act and Trust Indenture Act and (iii) such
as may be required by the NASD and under state securities or Blue
Sky laws in connection with the purchase and distribution of the
Notes by the several Underwriters and except such as will not, if
not obtained, have a material adverse effect on the transactions
contemplated hereby. The performance of this Agreement and the
Indenture by the Company and the consummation by the Company of
the transactions contemplated hereby and thereby (including the
use of proceeds from the sale of the Notes as described in the
Final Prospectus) will not conflict with or result in a breach or
violation by the Company or any of its subsidiaries of any of the
terms or provisions of, or constitute a default by the Company
under, any material indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument known to such
counsel to which the Company or any of its subsidiaries is a
party or to which the Company, any of its subsidiaries or any of
their respective properties is subject, the charter or by-laws of
the Company or any of its subsidiaries, any statute, or any
judgment, decree, order, rule or regulation of any court or
governmental agency or body (other than state securities or blue
<PAGE>
sky laws, as to which such counsel need express no opinion) known
to such counsel to be applicable to the Company, any of its
subsidiaries or any of their respective properties.
(vi) Except as described in the Final Prospectus, there is
not pending, or to such counsel's knowledge, threatened, any
action, suit, proceeding, inquiry or investigation, to which the
Company or any of its subsidiaries is a party, or to which the
property of the Company or any of its subsidiaries is subject,
before or brought by any court or governmental agency or body,
which, if determined adversely to the Company or any of its
subsidiaries, would result in any material adverse change in the
business, financial position, net worth or results of operations,
or would materially adversely affect the properties or assets, of
the Company and its subsidiaries taken as a whole.
(vii)To such counsel's knowledge, no default exists, and no
event has occurred which with notice or after the lapse of time
to cure or both, would constitute a default, in the due
performance and observance of any term, covenant or condition of
any material indenture, mortgage, deed of trust, loan agreement,
lease or other agreement or instrument known to such counsel to
which the Company or any of its subsidiaries is a party or to
which it or its properties is subject, or of the Charter or by-
laws of the Company or any of its subsidiaries which would result
in any material adverse change in the business, financial
condition, net worth or results of operations, or could
materially adversely affect the properties or assets of the
Company or any of its subsidiaries taken as a whole.
(viii)The Registration Statement and all post effective
amendments thereto have become effective under the Securities
Act, and, to the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been
instituted or are threatened, pending or contemplated by the
Commission. All filings required by Rule 424 and Rule 430A of
the Rules and Regulations have been made; the Registration
Statement, the Preliminary Prospectus and Final Prospectus, and
any amendments or supplements thereto (including any documents
incorporated by reference into the Prospectus, at the time they
were filed) (except for the financial statements and schedules
included therein as to which such counsel need express no
opinion), as of their respective effective or issue dates,
complied as to form in all material respects with the
requirements of the Securities Act, the Exchange Act and the
Rules and Regulations; the descriptions in the Registration
Statement, the Preliminary Prospectus and the Final Prospectus of
statutes, regulations, legal and governmental proceedings, and
contracts and other documents are accurate in all material
respects and present fairly the information required to be
stated; and such counsel does not know of any pending or
threatened legal or governmental proceedings, statutes or
regulations required to be described in the Registration
Statement or the Final Prospectus which are not described as
<PAGE>
required or of any contracts or documents of a character required
to be described in the Registration Statement or the Final
Prospectus or to be filed as exhibits to the Registration
Statement which are not described and filed as required.
(ix) Neither the Company nor any of its subsidiaries is, or
will be as a result of the consummation of the transactions
contemplated by this Agreement, an "investment company" or a
company "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940.
In addition to the matters set forth above, such opinion shall also
include a statement to the effect that nothing has come to the attention of
such counsel which leads them to believe that the Registration Statement,
the Preliminary Prospectus and the Final Prospectus or any amendment or
supplement thereto contains an untrue statement of a material fact or omits
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading (except that such counsel need
express no view as to financial statements, schedules and other financial
information included therein).
The opinions to be rendered pursuant to paragraph (c) may be limited
to federal law, and as to state law matters, to the laws of the state of
Tennessee. Such counsel may also rely on opinion of other counsel as to
matters of local law provided that such counsel shall state that they
believe both they and you are justified in relying on such opinion.
(d) The Underwriters shall have received an opinion or opinions,
dated the Closing Date, of Bass, Berry & Sims PLC, counsel for the
Underwriters, with respect to the Registration Statement and the Final
Prospectus, and such other related matters as the Underwriters may
require, and the Company shall have furnished to such counsel such
documents as they may reasonably request for the purpose of enabling
them to pass upon such matters.
(e) The Representatives shall have received from Deloitte &
Touche LLP, a letter dated the date hereof and, at the Closing Date, a
second letter dated the Closing Date, in form and substance
satisfactory to the Representatives, stating that they are independent
public accountants with respect to the Company and its subsidiaries
within the meaning of the Securities Act and the applicable Rules and
Regulations, and to the effect that:
(i) In their opinion, the audited financial statements and
financial statement schedules examined by them and included or
incorporated by reference in the Registration Statement comply as
to form in all material respects with the applicable accounting
requirements of the Securities Act and the published Rules and
Regulations and are presented in accordance with generally
accepted accounting principles; and they have made a review in
accordance with standards established by the American Institute
of Certified Public Accountants of the interim financial
<PAGE>
statements, selected financial data, and/or condensed financial
statements derived from audited financial statements of the
Company;
(ii) The unaudited selected financial information included
in the Final Prospectus under the captions "SUMMARY FINANCIAL
DATA" and "SELECTED FINANCIAL AND OPERATING DATA" for each of the
fiscal years ended December 25,1994, December 31, 1995, and
December 29, 1996 agrees with the corresponding amounts in the
audited financial statements incorporated by reference in the
Final Prospectus or previously reported on by them;
(iii)On the basis of a reading of the latest available
interim financial statements (unaudited) of the Company, if any,
a reading of the minute books of the Company and its
subsidiaries, inquiries of officials of the Company responsible
for financial and accounting matters and other specified
procedures, all of which have been agreed to by the
Representatives, nothing came to their attention that caused them
to believe that:
(A) Any unaudited interim financial statements
included or incorporated by reference in the Registration
Statement or the Final Prospectus do not comply as to form
in all material respects with the applicable accounting
requirements of the federal securities laws and the
published rules and regulations thereunder or are not in
conformity with generally accepted accounting principles
applied on a basis substantially consistent with the basis
for the audited financial statements incorporated by
reference in the Registration Statement or in the Final
Prospectus;
(B) Any other unaudited financial statement data
included or incorporated by reference in the Registration
Statement or the Final Prospectus do not agree with the
corresponding items in the unaudited financial statements
from which data was derived and any such unaudited data were
not determined on a basis substantially consistent with the
basis for the corresponding amounts in the unaudited
financial statements included or incorporated by reference
in the Registration Statement or the Final Prospectus;
(C) At a specified date not more than five days prior
to the date of delivery of such respective letter, there was
any decline in stockholders' equity or increase in long-term
debt of the Company, or other items specified by the
Underwriters in each case as compared with amounts shown in
the latest balance sheets included or incorporated by
reference in the Final Prospectus, except in each case for
<PAGE>
changes, decreases or increases which the Final Prospectus
discloses have occurred or may occur or which are described
in such letters; and
(D) For the period from the closing date of the latest
statements of income included or incorporated by reference
in the Effective Prospectus and the Final Prospectus to a
specified date not more than five days prior to the date of
delivery of such respective letter, there were any decreases
in total revenues or net income of the Company, or other
items specified by the Underwriters, or any increases in any
items specified by the Underwriters, in each case as
compared with the corresponding period of the preceding
year, except in each case for decreases which the Final
Prospectus discloses have occurred or may occur or which are
described in such letter.
(iv) They have carried out certain specified procedures, not
constituting an audit, with respect to certain amounts,
percentages and financial information specified by you which are
derived from the general accounting records of the Company, which
appear or are incorporated by reference in the Registration
Statement and the Final Prospectus and have compared and agreed
such amounts, percentages and financial information with the
accounting records of the Company or to analyses and schedules
prepared by the Company from its detailed accounting records.
In the event that the letters to be delivered referred to above set
forth any such changes, decreases or increases, it shall be a further
condition to the obligations of the Underwriters that the Underwriters
shall have determined, after discussions with officers of the Company
responsible for financial and accounting matters and with Deloitte &
Touche LLP, that such changes, decreases or increases as are set forth
in such letters do not reflect a material adverse change in the
stockholders' equity or long-term debt of the Company as compared with
the amounts shown in the latest balance sheets of the Company included
or incorporated by reference in the Registration Statement or the
Final Prospectus, or a material adverse change in total revenues or
net income of the Company, in each case as compared with the
corresponding period of the prior year.
(f) There shall have been furnished to the Representatives a
certificate, dated the Closing Date and addressed to you, signed by
the Chief Executive Officer and by the Chief Financial Officer of the
Company to the effect that:
(i) the representations and warranties of the Company in
Section 1 of this Agreement are true and correct, as if made at
and as of the Closing Date, and the Company has complied with all
the agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date;
<PAGE>
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceedings for
that purpose have been initiated or are pending, or to their
knowledge, threatened under the Securities Act;
(iii)all filings required by Rule 424 and Rule 430A of the
Rules and Regulations have been made;
(iv) they have carefully examined the Registration
Statement, the Preliminary Prospectus and the Final Prospectus,
the documents incorporated therein by reference and any
amendments or supplements thereto, and such documents do not
include any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to
make the statements therein not misleading; and
(v) since the effective date of the Registration Statement,
there has occurred no event required to be set forth in an
amendment or supplement to the Registration Statement, the
Preliminary Prospectus or the Final Prospectus which has not been
so set forth.
(g) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Final Prospectus, and
except as stated therein, neither the Company nor any of its
subsidiaries has sustained any material loss or interference with its
business or properties from fire, flood, hurricane, earthquake,
accident or other calamity, whether or not covered by insurance, or
from any labor dispute or any court or governmental action, order or
decree, or become a party to or the subject of any litigation which is
material to the Company, nor shall there have been any material
adverse change, or any development involving a prospective material
adverse change, in the business, properties, key personnel,
capitalization, net worth, results of operations or condition
(financial or other) of the Company, which loss, interference,
litigation or change, in your judgment shall render it unadvisable to
commence or continue the offering of the Notes at the offering price
to the public set forth on the cover page of the Prospectus or to
proceed with the delivery of the Notes.
(h) At or prior to the Closing Date, none of the following
events shall have occurred: (i) suspension in the trading in securities on
the New York Stock Exchange, the American Stock Exchange or the over-the-
counter market; (ii) the establishment of minimum or maximum prices on the
New York Stock Exchange, the American Stock Exchange or the over-the-
counter market; (iii) the declaration of a banking moratorium by federal or
state authorities; (iv) suspension in the trading of securities of the
Company on any exchange or market; or (v) a material change in general
economic, political or financial conditions or the effect of international
conditions on the financial markets in the United States shall, in your
reasonable judgment, make it inadvisable to proceed with the offering of
the Notes at the offering price to the public set forth on the cover page
of this Final Prospectus or to proceed with the delivery of the Notes.
<PAGE>
All such opinions, certificates, letters and documents delivered
pursuant to this Agreement will comply with the provisions hereof only if
they are reasonably satisfactory to the Representatives and their counsel.
The Company shall furnish to the Representatives such conformed copies of
such opinions, certificates, letters and documents in such quantities as
the Representatives shall reasonably request.
7. CONDITION OF THE COMPANY'S OBLIGATIONS. The obligations
hereunder of the Company are subject to the condition set forth in Section
6(a) hereof.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter, and each person, if any, who controls any Underwriter
within the meaning of the Securities Act, against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter or
controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based in whole or in
part upon (i) any inaccuracy in the representations and warranties of
the Company contained herein, (ii) any failure of the Company to
perform its obligations hereunder or under law or (iii) any untrue
statement or alleged untrue statement of any material fact contained
in the Registration Statement, the Preliminary Prospectus, or Final
Prospectus, or any document incorporated therein by reference or any
amendment or supplement thereto, or in any Blue Sky application or
other written information furnished by the Company filed in any state
or other jurisdiction in order to qualify any or all of the Notes
under the securities laws thereof (a "Blue Sky Application"). The
Company agrees to indemnify and hold harmless each Underwriter, and
each person, if any, who controls any Underwriter within the meaning
of the Securities Act, against all losses, claims, damages, or
liabilities, joint or several, to which such Underwriter or
controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon the
Company's omission or alleged omission to state in the Registration
Statement, the Preliminary Prospectus, or Final Prospectus, any
document incorporated therein by reference or any amendment or
supplement thereto or any Blue Sky Application a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter and each
such controlling person for any legal or other expenses reasonably
incurred by such Underwriter or such controlling person in connection
with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred. Notwithstanding
the foregoing, the Company will not be liable in any such case to the
extent that any such loss, claim, damage, or liability arises out of
or is based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in the Registration Statement, the
Preliminary Prospectus, any document incorporated therein by reference
or Final Prospectus or such amendment or such supplement or any Blue
Sky Application in reliance upon and in conformity with written
<PAGE>
information furnished to the Company by any Underwriter specifically
for use therein (it being understood that the only information so
provided by the Underwriters is the information included in the last
paragraph on the cover page and under the caption "Underwriting" in
the Preliminary Prospectus and the Final Prospectus).
(b) Each Underwriter will indemnify and hold harmless the
Company, each of its directors, each of its officers who signed the
Registration Statement and each person, if any, who controls the
Company within the meaning of the Securities Act against any losses,
claims, damages or liabilities to which the Company or any such
director, officer or controlling person may become subject, under the
Securities Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, the Preliminary
Prospectus, the Final Prospectus, or any amendment or supplement
thereto, or any Blue Sky Application, or arise out of or are based
upon the omission or the alleged omission to state in the Registration
Statement, the Preliminary Prospectus, the Final Prospectus or any
amendment or supplement thereto or any Blue Sky Application a material
fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by any
Underwriter specifically for use therein (it being understood that the
only information so provided is the information included in the last
paragraph on the cover page and under the caption "Underwriting" in
the Preliminary Prospectus, and the Final Prospectus) and will
reimburse any legal or other expenses reasonably incurred by the
Company or any such director, officer or controlling person in
connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred. This
indemnity agreement will be in addition to any liability which such
Underwriters may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, including
governmental proceedings, such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party under
this Section 8 notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not
relieve it from any liability which it may have to any indemnified
party otherwise than under this Section 8. In case any such action is
brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate therein, and to the extent that it may
wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel satisfactory to such
indemnified party; and after notice from the indemnifying party to
such indemnified party of its election to so assume the defense
thereof, the indemnifying party will not be liable to such indemnified
party under this Section 8 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation except
<PAGE>
that the indemnified party shall have the right to employ separate
counsel if, in its reasonable judgment, it is advisable for the
indemnified party and any other Underwriter to be represented by
separate counsel, and in that event the fees and expenses of separate
counsel shall be paid by the indemnifying party.
The Company will not, without prior written consent of each
Representative, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action, suit or
proceeding (or related cause of action or portion thereof) in respect
of which indemnification may be sought hereunder (whether or not such
Underwriter is a party to such claim, action, suit or proceeding),
unless such settlement, compromise or consent includes an
unconditional release of such Underwriter from all liability arising
out of such claim, action, suit or proceeding (or related cause of
action or portion thereof).
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in the
preceding part of this Section 8 is for any reason held to be
unavailable to the Underwriters, or the Company or is insufficient to
hold harmless an indemnified party, then the Company shall contribute
to the damages paid by the Underwriters, and the Underwriters shall
contribute to the damages paid by the Company provided, however, that
no person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. In determining the amount of contribution to which
the respective parties are entitled, there shall be considered the
relative benefits received by each party from the offering of the
Notes (taking into account the portion of the proceeds of the offering
realized by each), the parties' relative knowledge and access to
information concerning the matter with respect to which the claim was
asserted, the opportunity to correct and prevent any statement or
omission, and any other equitable considerations appropriate under the
circumstances. The Company and the Underwriters agree that it would
not be equitable if the amount of such contribution were determined by
pro rata or per capita allocation (even if the Underwriters were
treated as one entity for such purpose). No Underwriter or person
controlling such Underwriter shall be obligated to make contribution
hereunder which in the aggregate exceeds the underwriting discount
applicable to the Notes purchased by such Underwriter under this
Agreement, less the aggregate amount of any damages which such
Underwriter and its controlling persons have otherwise been required
to pay in respect of the same or any similar claim. The Underwriters'
obligations to contribute hereunder are several in proportion to their
respective underwriting obligations and not joint. For purposes of
this Section, each person, if any, who controls an Underwriter within
the meaning of Section 15 of the Securities Act shall have the same
rights to contribution as such Underwriter, and each director of the
Company, each officer of the Company who signed the Registration
Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act, shall have the same
rights to contribution as the Company.
<PAGE>
(e) The obligations of the Company under this Section 8 shall be
in addition to any liability which the Company may otherwise have and
shall extend, upon the same terms and conditions, to each person, if
any, who controls any Underwriter within the meaning of the Securities
Act; and the obligations of the Underwriters under this Section 8
shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms
and conditions, to each officer and director of the Company and to
each person, if any, who controls the Company within the meaning of
the Securities Act.
9. DEFAULT OF UNDERWRITERS. If any Underwriter defaults in its
obligation to purchase Notes hereunder and if the total amount of Notes
which such defaulting Underwriter agreed but failed to purchase is ten
percent or less of the total amount of Notes to be sold hereunder, the non-
defaulting Underwriters shall be obligated severally to purchase (in the
respective proportions which the amount of Notes set forth opposite the
name of each non-defaulting Underwriter in Schedule I hereto bears to the
total amount of Notes set forth opposite the names of all the non-
defaulting Underwriters), the Notes which such defaulting Underwriter or
Underwriters agreed but failed to purchase. If any Underwriter so defaults
and the total number of Notes with respect to which such default or
defaults occur is more than ten percent of the total amount of Notes to be
sold hereunder, and arrangements satisfactory to the other Underwriters and
the Company for the purchase of such Notes by other persons (who may
include the non-defaulting Underwriters) are not made within 36 hours after
such default, this Agreement, insofar as it relates to the sale of the
Notes, will terminate without liability on the part of the non-defaulting
Underwriters or the Company except for (i) the provisions of Section 8
hereof, and (ii) the expenses to be paid or reimbursed by the Company
pursuant to Section 5. As used in this Agreement, the term "Underwriter"
includes any person substituted for an Underwriter under this Section 9.
Nothing herein shall relieve a defaulting Underwriter from liability for
its default.
10. SURVIVAL CLAUSE. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company, its
officers and the Underwriters set forth in this Agreement or made by or on
behalf of them, respectively, pursuant to this Agreement shall remain in
full force and effect, regardless of (i) any investigation made by or on
behalf of the Company, any of its officers or directors, any Underwriter or
any controlling person, (ii) any termination of this Agreement and (iii)
delivery of and payment for the Notes.
11. EFFECTIVE DATE. This Agreement shall become effective at such
time as the Representatives shall release the Notes for sale to the public;
provided, however, that the provisions of Sections 5, 8, 10, and 11 hereof
shall at all times be effective. For purposes of this Section 11, the Notes
shall be deemed to have been so released upon the release by the
Representatives for publication, at any time after date hereof, of any
newspaper advertisement relating to the Notes or upon the release by the
Representatives of telegrams offering the Notes for sale to securities
dealers, whichever may occur first.
<PAGE>
12. TERMINATION.
(a) The Company's obligations under this Agreement may be
terminated by the Company by notice to the Representatives (i) at any
time before it becomes effective in accordance with Section 11 hereof,
or (ii) in the event that the condition set forth in Section 7 shall
not have been satisfied at or prior to the Closing Date.
(b) This Agreement may be terminated by the Representatives by
notice to the Company (i) at any time before it becomes effective in
accordance with Section 11 hereof; (ii) in the event that at or prior
to the Closing Date the Company shall have failed, refused or been
unable to perform any agreement on the part of the Company to be
performed hereunder or any other condition to the obligations of the
Underwriters hereunder is not fulfilled; (iii) if at or prior to the
Closing Date trading in securities on the New York Stock Exchange, the
American Stock Exchange or the over-the-counter market shall have been
suspended or materially limited or minimum or maximum prices shall
have been established on either of such Exchanges or such market, or a
banking moratorium shall have been declared by Federal or state
authorities; (iv) if at or prior to the Closing Date trading in
securities of the Company shall have been suspended on any exchange or
market; or (v) if there shall have been such a material change in
general economic, political or financial conditions or if the effect
of international conditions on the financial markets in the United
States shall be such as, in your reasonable judgment, makes it
inadvisable to commence or continue the offering of the Notes at the
offering price to the public set forth on the cover page of the
Prospectus or to proceed with the delivery of the Notes.
(c) Termination of this Agreement pursuant to this Section 12
shall be without liability of any party to any other party other than
as provided in Sections 5 and 8 hereof.
13. NOTICES. All communications hereunder shall be in writing and,
if sent to any of the Underwriters, shall be mailed or delivered or
telegraphed and confirmed in writing to the Representatives in care of J.C.
Bradford & Co., L.L.C., J.C. Bradford Financial Center, 330 Commerce
Street, Nashville, Tennessee 37201, Attention: Robert S. Doolittle, or if
sent to the Company shall be mailed, delivered or telegraphed and confirmed
in writing to the Company at 130 Maple Drive North, Hendersonville,
Tennessee 37075, Attention: Leon Moore.
14. MISCELLANEOUS. This Agreement shall inure to the benefit of and
be binding upon the several Underwriters and, the Company and their
respective successors and legal representatives. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
other person any legal or equitable right, remedy or claim under or in
respect of this Agreement. This Agreement and all conditions and
provisions hereof are intended to be for the sole and exclusive benefit of
the Company and the several Underwriters and for the benefit of no other
person except that (i) the representations and warranties of the Company
contained in this Agreement shall also be for the benefit of any person or
<PAGE>
persons who control any Underwriter within the meaning of Section 15 of the
Securities Act, and (ii) the indemnities by the Underwriters shall also be
for the benefit of the directors of the Company, officers of the Company
who have signed the Registration Statement, and any person or persons who
control the Company within the meaning of Section 15 of the Securities Act.
No purchaser of Notes from any Underwriter will be deemed a successor
because of such purchase. The validity and interpretation of this
Agreement shall be governed by the laws of the State of Tennessee. This
Agreement may be executed in two or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and
the same instrument. You hereby represent and warrant to the Company that
you have authority to act hereunder on behalf of the several Underwriters,
and any action hereunder taken by you will be binding upon all the
Underwriters.
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please indicate your acceptance thereof in the space provided
below for that purpose, whereupon this letter shall constitute a binding
agreement between the Company and each of the several Underwriters.
Very truly yours,
SHOLODGE, INC.
By:/s/ Richard L. Johnson
Title: Executive Vice President
Confirmed and accepted as of the
date first above written.
J.C. BRADFORD & CO., L.L.C.
DAIN BOSWORTH INCORPORATED
For themselves and as Representatives
of the several Underwriters
By:Robert Doolittle
Partner
<PAGE>
SCHEDULE I
UNDERWRITERS
<TABLE>
<CAPTION>
Principal Amount of Firm
Underwriter Notes to Be Purchased
<S> <C>
J.C. Bradford & Co., L.L.C.. $17,500,000
Dain Bosworth Incorporated $17,500,000
TOTAL $35,000,000
</TABLE>
SHOLODGE, INC.
AND
BANKERS TRUST COMPANY,
TRUSTEE
_________________________
SECOND SUPPLEMENTAL INDENTURE
Dated as of September 25, 1997
9.55% Senior Subordinated Notes due 2007, Series B
Supplemental to Indenture dated as of November 15, 1996
<PAGE>
SECOND SUPPLEMENTAL INDENTURE, dated as of September 25, 1997 (the
"Second Supplemental Indenture"), to the Indenture, dated as of November
15, 1996 (the "Indenture"), between ShoLodge, Inc., a corporation duly
organized under the laws of the State of Tennessee (the "Company"), having
its principal office at 130 Maple Drive North, Hendersonville, Tennessee
37075, and Bankers Trust Company, a New York banking corporation (the
"Trustee"), having a corporate trust office at Four Albany Street, New
York, NY 10006.
RECITALS OF THE COMPANY
WHEREAS, the Company has duly authorized the execution and delivery of
the Indenture to provide for the issuance from time to time of one or more
series of its senior subordinated notes (the "Notes") to be issued in one
or more series as in the Indenture provided;
WHEREAS, the Company desires and has requested the Trustee to join it
in the execution and delivery of this Second Supplemental Indenture in
order to establish and provide for the issuance by the Company of a series
of Notes designated as its 9.55% Senior Subordinated Notes due 2007, Series
B in the aggregate principal amount of up to $35,000,000, substantially in
the form attached hereto as Exhibit "A" (the "Series B Notes"), on the
terms set forth herein;
WHEREAS, Section 14.1 of the Indenture provides that a supplemental
Indenture may be entered into by the Company and the Trustee without the
consent of any holder of any Notes for such purpose provided certain
conditions are met;
WHEREAS, the conditions set forth in the Indenture for the execution
and delivery of this Second Supplemental Indenture have been complied with;
and
WHEREAS, all things necessary to make this Second Supplemental
Indenture a valid agreement of the Company and the Trustee, in accordance
with its terms, and a valid amendment of, and supplement to, the Indenture
have been done;
NOW THEREFORE:
In consideration of the premises and the purchase and acceptance of
the Series B Notes by the holders thereof the Company mutually covenants
and agrees with the Trustee, for the equal and proportionate benefit of all
holders of the Series B Notes, that the Indenture is supplemented and
amended, to the extent and for the purposes expressed herein, as follows:
1. ESTABLISHMENT OF SERIES B NOTES UNDER THE INDENTURE. The Company
hereby establishes the Series B Notes in the form of Exhibit A hereto in an
aggregate principal amount of $35,000,000 and on the terms set forth
therein as a series of Notes under the Indenture pursuant to this Second
Supplemental Indenture.
2. OPTIONAL REDEMPTION BY THE COMPANY. In accordance with SECTION
6.1 of the Indenture, the Series B Notes will be subject to optional
redemption by the Company as provided in the form of Series B Note attached
as Exhibit A hereto.
<PAGE>
3. REDEMPTION AT OPTION OF HOLDER. In the event that a holder or
his or her duly authorized representative notifies the Trustee of such
person's desire to redeem all or any portion of a Series B Note pursuant to
SECTION 7.1(A) or (B) of the Indenture, the Trustee shall furnish such
holder with the form set forth in Exhibit A to the Indenture (for
redemptions pursuant to SECTION 7.1(A) of the Indenture) or Exhibit B to
the Indenture (for redemptions pursuant to SECTION 7.1(B) of the
Indenture).
4. TRUSTEE DISCLAIMER. The Trustee makes no representations as to
the validity or sufficiency of this Second Supplemental Indenture or the
Series B Notes, and assumes no responsibility for the recitals contained
herein or therein which shall be taken as the statements of the Company.
5. GOVERNING LAW. This Second Supplemental Indenture and the Series
B Notes shall be governed by the laws of the State of Tennessee as to all
matters affecting the duties, liabilities, privileges, rights and
obligations of the Noteholders, the Company and any agents of the
foregoing, include but not limited to, matters of validity, construction,
effect and performance; however, the duties and responsibilities of the
Trustee shall be governed by the laws of the State of New York.
IN WITNESS WHEREOF, SHOLODGE, INC. has caused this Second Supplemental
Indenture to be signed and acknowledged by its Chairman of the Board,
President or one of its Vice Presidents, and its corporate seal to be
affixed hereunto, and the same to be attested by its Secretary; and Bankers
Trust Company has caused this Second Supplemental Indenture to be signed
and acknowledged, and its corporate seal to be affixed hereunto, and the
same to be attested; all as of the day and year first above written.
SHOLODGE, INC.
Attest:
/s/Bob Marlowe By: /s/Leon Moore
Secretary Its: President
[Corporate Seal]
BANKERS TRUST COMPANY
Attest:
/s/Kevin Weeks By: /s/Susan Johnson
Title: Assistant vice president Its: Assistant vice president
[Corporate Seal]
<PAGE>
Exhibit A to Second Supplemental Indenture
[FORM OF FACE OF NOTES]
No. ShoLodge, Inc. $
9.55% SENIOR SUBORDINATED NOTE DUE 2007, SERIES B
ShoLodge, Inc., a corporation organized and existing under the laws of
the State of Tennessee (hereinafter called the "Company," which term shall
include any successor corporation as defined in the Indenture referred to
on the reverse side hereof), for value received, hereby promises to pay to[
], or registered assigns, the sum of [ ] Dollars on or
before September 1, 2007, in such coin or currency of the United States of
America as at the time of payment is legal tender for public and private
debts, and to pay interest (calculated on the basis of a 360-day year of
twelve 30-day months) on the unpaid principal amount hereof in like coin or
currency from the Interest Payment Date to which interest hereon has been
paid immediately preceding the date hereof (unless the date hereof is an
Interest Payment Date to which interest has been paid, in which case from
the date hereof) or, if no interest has been paid on this Note since the
Original Issue Date hereof, as defined in the Indenture referred to on the
reverse side hereof, from such Original Issue Date, at the rate of 9.55%
per annum, payable quarterly on February 1, May 1, August 1 and November 1,
commencing November 1, 1997, until the principal hereof shall have been
paid or duly provided for. The interest so payable on any Interest Payment
Date will be paid to the person in whose name this Note is registered at
the close of business on the fifteenth day of the month immediately
preceding such Interest Payment Date (whether or not such fifteenth day
shall be a regular business day), unless the Company shall default in the
payment of interest due on such Interest Payment Date, in which case such
defaulted interest shall be paid to the person in whose name this Note is
registered at the close of business on a Special Record Date for the
payment of such defaulted interest established by notice to the registered
holders of Notes given by mail to said holders as their names and addresses
appear in the Note Register (as defined in the Indenture referred to on the
reverse side hereof) not less than 10 days preceding such Special Record
Date. The principal hereof and the interest hereon shall be payable at an
office or agency of the Company maintained for that purpose in New York,
New York or such other office or agency maintained for that purpose;
provided, however, that the interest on this Note may be payable, at the
option of the Company, by check mailed to the person entitled thereto as
such person's address shall appear on the Note Register (including the
records of any Note Co-Registrar).
Reference is hereby made to the further provisions of this Note set
forth on the reverse side hereof, and such further provisions shall for all
purposes have the same effect as though fully set forth at this place.
This Note shall not be entitled to any benefit under the Indenture
referred to on the reverse side hereof, or be or become valid or obligatory
for any purpose, until the authentication certificate endorsed hereon shall
have been signed by Bankers Trust Company, Trustee under such Indenture, or
a successor trustee thereto under such Indenture.
IN WITNESS WHEREOF, SHOLODGE, INC. has caused this Note to be signed
in its name by its Chairman of the Board, President or one of its Vice
Presidents by his signature or a facsimile thereof, and its corporate seal
to be affixed or printed or engraved hereon, or a facsimile thereof, and
attested by its Secretary by his signature or a facsimile thereof.
Dated: SHOLODGE, INC.
By:
Title:
[CORPORATE SEAL]
Attest:
_________________________
Title: Secretary
[FORM OF TRUSTEE'S AUTHENTICATION CERTIFICATE]
TRUSTEE'S AUTHENTICATION CERTIFICATE
This is one of the Notes described in the within-mentioned Indenture.
Bankers Trust Company
as Trustee
By:
Authorized Signatory
[FORM OF REVERSE OF NOTE]
ShoLodge, Inc.
9.55% SENIOR SUBORDINATED NOTE DUE 2007, SERIES B
This Note is one of a duly authorized issue of Notes of the Company
designated as its 9.55% Senior Subordinated Notes due 2007, Series B
(herein called the "Notes"), limited in aggregate principal amount of up to
$35,000,000 (except for Notes authenticated and delivered upon transfer of,
or in exchange for or in lieu of other Notes), all issued and to be issued
only in fully registered form without coupons under an Indenture dated as
of November 15, 1996 and Second Supplemental Indenture dated as of
September 25, 1997 (such Indenture and Second Supplemental Indenture,
together with any indenture supplemental thereto, called the "Indenture"),
each duly executed and delivered by ShoLodge, Inc. to Bankers Trust
Company, New York, New York, Trustee (the Trustee, together with its
successors being herein called the "Trustee"), to which Indenture (which is
hereby made a part hereof and to all of which the holder by acceptance
hereof assents) reference is hereby made for a description of the
respective rights of and restrictions upon the Company and the holders of
the Notes, and the rights, limitations of rights, duties and immunities of
the Trustee in respect thereof.
The Notes are redeemable at the option of the Company as a whole at
any time, or in part from time to time, prior to maturity, commencing
September 1, 2000, on not less than 30 nor more than 60 days' notice given
as provided in the Indenture, upon payment of the then applicable
redemption price (expressed in percentages of the principal amount) set
forth below under the heading "General Redemption Prices," together in each
case with accrued and unpaid interest to the date fixed for redemption, all
subject to the conditions more fully set forth in the Indenture. The
General Redemption Prices (expressed in percentages of the principal
amount) applicable during the 12-month period beginning September 1 in the
years indicated below are as follows:
General Redemption Prices
If redeemed during the 12 month period beginning September 1,
2000 ......................... 104%
2001 ......................... 103%
2002.......................... 102%
2003.......................... 101%
2004 and thereafter .......... 100%
Unless the Notes have been declared due and payable prior to their
maturity by reason of an Event of Default and such Event of Default has not
been waived and such declaration has not been rescinded or annulled, a
holder has the right under SECTION 7.1 of the Indenture to present Notes
for payment prior to their maturity, and the Company will redeem the same
(or any portion of the principal amount thereof which is $1,000 or an
integral multiple thereof, as the holder may specify), subject to the
following limitations: (a) the Company will have no obligation to redeem
any Notes prior to December 1, 1999, except on the death of a holder as
described below, and (b) the Company will have no obligation to redeem
Notes (on the death of a holder or otherwise) in excess of the following
annual maximum amounts (collectively, the "Annual Amount Limitations") of
(i) $50,000 per holder and (ii) an aggregate amount for all notes of all
series issued under the Indenture submitted for redemption equal to five
percent (5%) of the aggregate original principal amount of the notes of all
series theretofore issued under the Indenture (the "Five Percent
Limitation"). Notes submitted for redemption, except for Notes submitted
for redemption following the death of a holder, must be submitted by
November 1 of any year, commencing on November 1, 1999, for redemption on
the following December 1. If the $50,000 per holder limitation has been
reached and the Five Percent Limitation has not been reached, if Notes have
been properly presented for payment each in an aggregate principal amount
exceeding $50,000, the Company will redeem such Notes in order of their
receipt (except Notes presented for payment in the event of death of a
holder, which will be given priority in order of their receipt), up to the
aggregate limitation of five percent (5%) of the aggregate principal amount
of the notes of all series issued under this Indenture, notwithstanding the
$50,000 limitation.
Subject to the Annual Amount Limitations (and unless the Notes have
been declared due and payable prior to their maturity by reason of an Event
of Default and such Event of Default has not been waived and such
declaration has not been rescinded or annulled), Notes submitted for
redemption upon the death of any holder (or any portion of the principal
amount of such Notes which is $1,000 or an integral multiple thereof, as
the holder may specify), will be redeemed within sixty (60) days following
receipt by the Trustee of a written request therefor from such holder's
personal representative, or surviving joint tenant(s), tenant by the
entirety or tenant(s) in common.
The price to be paid by the Company for all Notes presented to it for
redemption pursuant to these provisions is 100% of the principal amount
thereof to be redeemed, plus accrued but unpaid interest on such principal
amount to the date of payment.
In the case of Notes registered in the name of banks, trust companies
or broker-dealers who are members of a national securities exchange or the
National Association of Securities Dealers, Inc. ("Qualified
Institutions"), the $50,000 per holder limitation applies to each
beneficial owner of Notes held by any Qualified Institution as if such
beneficial owner were a separate holder. A Note held in tenancy by the
entirety, joint tenancy or tenancy in common will be deemed to be held by a
single holder, and the death of a tenant by the entirety, joint tenant or
tenant in common will be deemed the death of a holder. The death of a
person who, during his or her lifetime, was entitled to substantially all
of the beneficial ownership interest of a Note, will be deemed the death of
the holder, regardless of the registered holder. For purposes of a
holder's request for redemption and a request for redemption on behalf of a
deceased holder, such beneficial interest shall be deemed to exist if the
holder certifies street name or nominee ownership, ownership by a custodian
for the benefit of a minor under the Uniform Gifts to Minors Act, community
property or other joint ownership arrangements between a husband and wife
(including individual retirement accounts or Keogh plans maintained solely
by or for the holder or decedent, or by or for the holder or decedent and
his or her spouse) and trusts and certain other arrangements whereby a
person has substantially all of the beneficial ownership interests in the
Note during his or her lifetime. Beneficial interests shall include the
power to sell, transfer or otherwise dispose of a Note and the right to
receive the proceeds therefrom, as well as interest and principal payable
with respect thereto.
Notes may be presented for redemption by delivering to the Trustee at
its main office as defined in the Indenture: (a) a written request for
redemption, in the form attached to the Indenture and provided by the
Trustee upon written request, signed by the registered holder or his or her
duly authorized representative, (b) the Note to be redeemed, (c) in the
case of a surviving tenant or personal representative of a deceased holder
or beneficial owner, appropriate evidence of death and such other
additional documents as the Trustee shall require, including, but not
limited to, inheritance or estate tax waivers and evidence of authority of
the personal representative and (d) certification that the aggregate
requests for prepayment tendered on behalf of a registered holder or
beneficial owner do not exceed (or a description of the amount by which
such aggregate requests exceed) the $50,000 per holder limitation for the
applicable annual redemption period. In addition, any request for
prepayment must be delivered to the Trustee by hand or registered mail,
return receipt requested.
Any Notes tendered or any request for prepayment may be withdrawn by
written request received by the Trustee three (3) business days prior to
the issuance of a check in payment thereof.
Notes presented for redemption as set forth above will be redeemed in
order of their receipt by the Trustee, except that Notes presented for
payment in the event of death of a holder will be given priority in order
of their receipt over other Notes. Notes not redeemed in any such period
because they have not been presented prior to November 1 of that period or
because of the Annual Amount Limitations will be held in order of their
receipt for redemption during the following twelve (12) month period(s)
until redeemed, unless sooner withdrawn by the holder. Holders of Notes
presented for redemption shall be entitled to and shall receive scheduled
monthly payments of interest thereon on scheduled Interest Payment Dates
until their Notes are redeemed.
In the case of any Notes which are presented for redemption in part
only, upon such redemption the Company shall execute and the Trustee shall
authenticate and deliver to or on the order of the holder of such Notes,
without service charge, a new Note or Notes, of any authorized denomination
or denominations as requested by such holder, in aggregate principal amount
equal to the unredeemed portion of the principal of the Notes so presented.
The Company may redeem, in acceptance of tenders made pursuant hereto,
Notes in excess of the principal amount that the Company is obligated to
redeem, and may purchase Notes in the open market. However, the Company
may not use any Notes purchased in the open market as a credit against its
redemption obligations hereunder.
In the event that there shall occur a Change in Control (as defined in
the Indenture), the holder of this Note shall have the right, subject to
certain conditions stated in the Indenture, to present it for payment prior
to maturity, and the Company will redeem the same (or any portion of the
principal amount thereof which is $1,000 or an integral multiple thereof,
as the holder shall specify). The $50,000 per holder limitation and the
Five Percent Limitation shall not apply to any such redemption.
To the extent permitted by, and as provided in, the Indenture, the
Company may, by entering into an indenture or indentures supplemental to
the Indenture, modify, alter, add to or eliminate in any manner any
provisions of the Indenture, or the rights of the holders or the rights and
obligations of the Company, upon the consent, as in the Indenture provided,
of the holders of not less than fifty-one percent (51%) in principal amount
of the Notes then outstanding. Notwithstanding the foregoing, no
supplemental indenture shall, without the consent of the holder of each
outstanding Note affected thereby, change the Stated Maturity of the
principal of, or any installment of interest on any Note, or reduce the
principal amount thereof or the rate of interest thereon, reduce the
percentage of the aggregate principal amount of outstanding Notes the
consent of the holders of which is required for any supplemental indenture
or for any waiver of compliance with certain provisions of the Indenture,
or modify any of the provisions of the Indenture relating to the foregoing,
all except as provided in the Indenture.
If an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of and all interest accrued on
all the Notes at any such time outstanding under the Indenture may be
declared, and upon such declaration shall become, immediately due and
payable, in the manner, with the effect and subject to the conditions
provided in the Indenture. The Indenture provides that such declaration
and its consequence may be waived by the holders of a majority in principal
amount of the Notes then outstanding.
The Notes are issuable as registered Notes without coupons in
denominations of integral multiples of $1,000. Subject to the provisions
of the Indenture, the transfer of this Note is registrable by the
registered holder hereof, in person or by his attorney duly authorized in
writing, at the office or agency of the Company in New York, New York or at
any other office or agency the Company maintains for that purpose on books
of the Company to be kept for that purpose at said office, upon surrender
and cancellation of this Note duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Trustee,
and thereupon a new fully registered Note of the same series, of the same
aggregate principal amount and in authorized denominations, will be issued
to the transferee or transferees in exchange therefor; and this Note, with
or without others of the same series, may in like manner be exchanged for
one or more new fully registered Notes of the same series of other
authorized denominations but of the same aggregate principal amount; all as
provided in the Indenture. No service charge shall be made for any such
transfer, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge or expense that may be imposed in
relation thereto.
Prior to due presentment for registration of transfer, the Company,
the Trustee or any agent of the Company or the Trustee may deem and treat
the person in whose name this Note shall be registered at any given time
upon the Note Register as the absolute owner of this Note for the purpose
of receiving any payment of, or on account of, the principal and interest
on this Note and for all other purposes whether or not this Note be
overdue; and neither the Company nor the Trustee, nor any agent of the
Company or the Trustee shall be bound by any notice to the contrary.
No recourse under any obligation, covenant or agreement contained in
the Indenture or in any Note, or because of the creation of the
indebtedness represented hereby, shall be had against any incorporator, any
past, present or future stockholder, or any officer or director of the
Company or any successor corporation, as such under any rule of law,
statute or constitution.
In any case where the date fixed for the payment of principal or
interest on any of the Notes or the date fixed for redemption thereof shall
not be a business day, then payment of such principal or interest need not
be made on such date, but may be made on the next succeeding business day
with the same force and effect as if made on the date fixed for such
payment or redemption, and no interest shall accrue for the period from or
after such date.
All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
ASSIGNMENT FORM
VIA HAND DELIVERY OR REGISTERED MAIL, RETURN RECEIPT REQUESTED
Bankers Trust Company, Corporate Trust and Agency Group
Four Albany Street
New York, NY 10006
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
(Insert assignee's Soc. Sec. or tax I.D. No.)
________________________
________________________
________________________
________________________
(Print or type assignee's name, address and zip code) and irrevocably appoint
________________ agent to transfer this Note on the books of the Company.
The agent may substitute another to act for him.
Date________________________ Your signature:_______________________________
Signature(s) must be guaranteed by an eligible guarantor institution which is a
member of a recognized signature program, I.E., Securities Transfer Agents
Medallion Program ("STAMP"), Stock Exchange Medallion Program ("SEMP") or
New York Stock Exchange Medallion Signature Program ("MSP"). Sign exactly
as your name appears on the Note. If the Assignment Form is executed by a
person other than a registered holder, enclose appropriate evidence of your
authority to effect the assignment.
TO REDEEM A NOTE PURSUANT TO SECTION 7.1 OF THE INDENTURE, REQUEST A REDEMPTION
FORM AND PROVIDE YOUR NAME AND MAILING ADDRESS, VIA HAND DELIVERY OR REGISTERED
MAIL, RETURN RECEIPT REQUESTED TO:
BANKERS TRUST COMPANY
CORPORATE TRUST AND AGENCY GROUP
FOUR ALBANY STREET
NEW YORK, NY 10006
