<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
FORM T-3
FOR APPLICATIONS FOR QUALIFICATION OF INDENTURES
UNDER THE TRUST INDENTURE ACT OF 1939
............
PARAGON TRADE BRANDS, INC.
(NAME OF APPLICANT)
180 TECHNOLOGY PARKWAY, NORCROSS, GEORGIA 30092
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
SECURITIES TO BE ISSUED UNDER THE INDENTURE TO BE QUALIFIED
............
TITLE OF CLASS AMOUNT
............
Senior Subordinated Notes Due 2005 $182,000,000
Approximate date of proposed issuance: January 28, 2000
Paragon Trade Brands, Inc.
180 Technology Parkway
Norcross, Georgia 30092
(Name and address of agent for service)
With a copy to:
H. Sadler Poe, Esq.
Alston & Bird LLP
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309-3424
(404) 881-7000
The applicant hereby amends this application for qualification on such date or
dates as may be necessary to delay its effectiveness until (i) the 20th day
after the filing of a further amendment which specifically states that it shall
supersede this amendment, or (ii) such date as the Commission, acting pursuant
to Section 307(c) of the Trust Indenture Act of 1939, as amended (the "Act"),
may determine upon the written request of this applicant.
<PAGE> 2
GENERAL
1. GENERAL INFORMATION. Furnish the following as to the applicant.
(a) Form of organization:
A corporation.
(b) State or other sovereign power under the laws of which
organized:
Delaware.
2. SECURITIES ACT EXEMPTION APPLICABLE. State briefly the facts relied
upon by the applicant as a basis for the claim that registration of the
indenture securities under the Securities Act of 1933 is not required.
On January 6, 1998, Paragon Trade Brands, Inc., a Delaware corporation
(the "Company"), filed a voluntary petition for relief under Chapter 11 of the
United States Bankruptcy Code (the "Bankruptcy Code"), thereby commencing Case
No. 98-60390 (the "Bankruptcy Case"), in the United States Bankruptcy Court for
the Northern District of Georgia (the "Bankruptcy Court"). On or about November
15, 1999, the Company and its Official Committee of Unsecured Creditors filed a
Second Amended Plan of Reorganization (as subsequently modified through January
13, 2000, the "Plan") and related Disclosure Statement (as subsequently modified
through January 13, 2000, the "Disclosure Statement") with the Bankruptcy Court.
By order dated November 18, 1999, the Bankruptcy Court approved the Disclosure
Statement as containing "adequate information" as such term is defined in the
Bankruptcy Code. By order dated January 13, 2000, the Bankruptcy Court confirmed
the Plan.
The Effective Date (as defined below) of the Plan is conditioned upon,
among other things, the Company's obtaining exit financing as contemplated in
the Plan, and upon the execution and delivery of all documents required to be
executed and delivered under the terms of the Plan or any agreement incorporated
therein. Accordingly, if these and certain other conditions precedent are
satisfied or waived as set forth in the Plan, the Effective Date (as defined
below) may occur, and the Notes (as defined below) may be issued, on or about
January 28, 2000.
Under the Plan, the existing equity stock of the Company will be
canceled, and new shares will be issued as set forth in the Plan. In general,
Wellspring Capital Management, LLC (or its designee) ("Wellspring") will
purchase approximately 97.5% of the stock in the Company (after giving effect to
the reorganization) for $117 million cash, with the balance of the equity stock
going to old shareholders pro rata. In addition, the existing shareholders and
creditors had the right to elect to exercise rights to purchase a portion of
Wellspring's shares at $10.00 per share. In the aggregate, certain shareholders
exercised such rights to purchase approximately 220,000 shares of the equity in
the Company (after reorganization) from Wellspring (approximately 1%). The
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"Effective Date" of the Plan is expected to occur on the date the Wellspring
stock purchase agreement is closed. On the Effective Date, the creditors of the
Company will receive, pursuant to the Plan, among other things, a pro rata share
of (i) the $117 million purchase price being invested by Wellspring; and (ii)
the $146 million in aggregate principal amount of 11.25% Senior Subordinated
Notes due 2005 (the "Notes"), to be issued under the indenture to be qualified,
and guarantees (the "Guarantees") of such Notes by PTB International, Inc., PTB
Acquisition Sub, Inc., And PTB Holdings, Inc. In addition, subject to the
satisfaction of certain conditions contained in the Indenture, the Company may
issue up to approximately $36 million in additional Notes pursuant to the
Indenture in lieu of paying interest in cash.
The issuance of the Notes will not be registered under the Securities
Act of 1933, as amended (the "Securities Act"), but instead the Notes will be
issued pursuant to the exemption from the registration requirements of the
Securities Act provided by Section 1145 of the Bankruptcy Code. Generally,
section 1145 of the Bankruptcy Code exempts the offer or sale of securities
under a plan of reorganization from registration under the Securities Act and
under equivalent state securities and "blue sky" laws if the following
requirements are satisfied: (i) the securities are issued by the debtor or its
successor under a plan of reorganization; (ii) the recipients of the securities
hold a claim against the debtor, an interest in the debtor or a claim for an
administrative expense against the debtor; and (iii) the securities are issued
entirely in exchange for the recipient's claim against or interest in the debtor
or are issued "principally" in such exchange and "partly" for cash or property.
The Company believes that the issuance of the Notes under the Plan will satisfy
such requirements of section 1145 of the Bankruptcy Code and, therefore, such
issuance is exempt from the registration requirements referred to above.
AFFILIATIONS
3. AFFILIATES. Furnish a list or diagram of all affiliates of the
applicant and indicate the respective percentages of voting securities or other
bases of control.
As of January 17, 2000
13.71% of the voting common stock of the Company is held by Wellington
Management Company, LLP, based on publicly available information
reported as of January 29, 1999.
Bobby V. Abraham is a Director and Chief Executive Officer of the
Company.
Adrian D.P. Bellamy is a Director of the Company.
Thomas B. Boklund is a Director of the Company.
Robert L. Schuyler is a Director of the Company.
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Alan J. Cyron is the Executive Vice President, Chief Financial Officer,
and Assistant Secretary of the Company.
Robert E. McClain is the Executive Vice President - Sales and Marketing
of the Company.
John R. Cook is the Vice President - Technical Support of the Company.
Kathy L. Evenson is the Director of Human Resources of the Company.
Catherine O. Hasbrouck is the Vice President, General Counsel and
Secretary of the Company.
Stanley Littman is the Vice President - Technology and Materials of the
Company.
Christine I. Oliver is the Executive Vice President - Customer
Management of the Company.
Jeffrey S. Schoen is the Vice President - Manufacturing of the Company.
100% of the voting common stock of Paragon Trade Brands (Canada) Inc.
is held by the Company.
100% of the voting common stock of Paragon Trade Brands FSC, Inc. is
held by the Company.
100% of the voting common stock of PTB International, Inc. is held by
the Company.
100% of the voting common stock of PTB Acquisition Sub, Inc. is held by
the Company.
100% of the voting common stock of PTB Holdings, Inc. is held by the
Company.
49% of the ownership interests of Paragon-Mabesa International, S.A. de
C.V. is held by PTB International, Inc.
49% of the ownership interests of Stronger Corporation, S.A. is held by
PTB International, Inc.
40% of the ownership interests of Goodbaby Paragon Hygienic Products
Co. Ltd. is held by the Company.
As of the Effective Date:
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<PAGE> 5
Up to 6,891,000 shares, or approximately 58%, of the voting common
stock of the Company will be held by PTB Acquisition Company LLC;
Up to 2,500,000 shares, or approximately 21%, of the voting common
stock of the Company will be held by Co-Investment Partners, L.P.;
Up to 2,500,000 shares, or approximately 21%, of the voting common
stock of the Company will be held by Ontario Teachers Pension Plan
Board;
100% of the membership interests of PTB Acquisition Company LLC will be
held by Wellspring Capital Partners II, L.P.
58% of the voting common stock of Far & Wide Travel Corp. will be held
by Wellspring Capital Partners II, LP.
6% of the partnership interests of Wellspring Capital Partners II, L.P.
will be held by Wellspring Associates II LLC.
By virtue of a management agreement between Wellspring Capital
Management, LLC and Wellspring Capital Partners II, L.P., Wellspring
Capital Management, LLC will exercise managerial control over
Wellspring Capital Partners II, L.P.
50% of the membership interests of Wellspring Capital Management, LLC
will be held by Greg Feldman.
Greg Feldman will be the managing member of WS Acquisition LLC and
Train Acquisition LLC and a director of the Company.
53% of the voting common stock of The Hockey Company will be held by WS
Acquisition LLC.
75% of the membership interests of Lionel LLC will be held by Train
Acquisition LLC
100% of the voting common stock of PTB Acquisition Sub, Inc. will be
held by the Company.
100% of the voting common stock of Paragon Trade Brands FSC, Inc. will
be held by the Company.
100% of the voting common stock of PTB International, Inc. will be
held by the Company.
100% of the voting common stock of Paragon Trade Brands (Canada) Inc.
will be held by the Company.
100% of the voting common stock of PTB Holdings, Inc. will be held by
the Company.
49% of the ownership interests of Paragon-Mabesa International, S.A. de
C.V. will be held by PTB International, Inc.
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49% of the ownership interests of Stronger Corporation, S.A. will be
held by PTB International, Inc.
40% of the ownership interests of Goodbaby Paragon Hygienic Products
Co. Ltd., will be held by PTB International, Inc.
Bobby V. Abraham will be a director and the chief executive officer of
the Company.
David W. Cole will be a director of the Company.
David Mariano will be a director of the Company.
James R. McManus will be a director of the Company.
Thomas F. Ryan, Jr. will be a director of the Company.
J. Dale Sherratt will be a director of the Company.
Carl Stanton will be a director of the Company.
Thomas J. Volpe will be a director of the Company.
Alan J. Cyron will be the Executive Vice President, Chief Financial
Officer and Assistant Secretary of the Company.
Robert E. McClain will be the Executive Vice President - Sales and
Marketing of the Company.
John R. Cook will be the Vice President - Technical Support of the
Company.
Kathy L. Evenson will be the Director of Human Resources of the
Company.
Catherine O. Hasbrouck will be the Vice President, General Counsel and
Secretary of the Company.
Stanley Littman will be the Vice President - Technology and Materials
of the Company.
Christine I. Oliver will be the Executive Vice President - Customer
Management of the Company.
Jeffrey S. Schoen will be the Vice President - Manufacturing of the
Company.
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MANAGEMENT AND CONTROL
4. DIRECTORS AND EXECUTIVE OFFICERS. List the names and complete mailing
addresses of all directors and executive officers of the applicant and
all persons chosen to become directors or executive offices. Indicate
all offices with the applicant held or to be held by each person named.
As of January 17, 2000
<TABLE>
<CAPTION>
Name and Mailing Address Title
-----------------------------------------------------------------------------------------
<S> <C>
Bobby V. Abraham Director and Chief Executive Officer
Paragon Trade Brands, Inc.
180 Technology Parkway
Norcross, Georgia 30092
Adrian D.P. Bellamy Director
Paragon Trade Brands, Inc.
180 Technology Parkway
Norcross, Georgia 30092
Thomas B. Boklund Director
Paragon Trade Brands, Inc.
180 Technology Parkway
Norcross, Georgia 30092
Robert L. Schuyler Director
Paragon Trade Brands, Inc.
180 Technology Parkway
Norcross, Georgia 30092
Alan J. Cyron Executive Vice President, Chief
Paragon Trade Brands, Inc. Financial Officer, Assistant Secretary
180 Technology Parkway
Norcross, Georgia 30092
Robert E. McClain Executive Vice President - Sales and
Paragon Trade Brands, Inc. Marketing
180 Technology Parkway
Norcross, Georgia 30092
John R. Cook Vice President - Technical Support
Paragon Trade Brands, Inc.
180 Technology Parkway
Norcross, Georgia 30092
</TABLE>
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<PAGE> 8
<TABLE>
<S> <C>
Kathy L. Evenson Director of Human Resources
Paragon Trade Brands, Inc.
180 Technology Parkway
Norcross, Georgia 30092
Catherine O. Hasbrouck Vice President, General Counsel and
Paragon Trade Brands, Inc. Secretary
180 Technology Parkway
Norcross, Georgia 30092
Stanley Littman Vice President - Technology and Materials
Paragon Trade Brands, Inc.
180 Technology Parkway
Norcross, Georgia 30092
Christine I. Oliver Executive Vice President - Customer
Paragon Trade Brands, Inc. Management
180 Technology Parkway
Norcross, Georgia 30092
Jeffrey S. Schoen Vice President - Manufacturing
Paragon Trade Brands, Inc.
180 Technology Parkway
Norcross, Georgia 30092
As of the Effective Date
Name and Mailing Address Title
----------------------------------------------------------------------------------------------
Bobby V. Abraham Director and Chief Executive Officer
Paragon Trade Brands, Inc.
180 Technology Parkway
Norcross, Georgia 30092
Alan J. Cyron Executive Vice President, Chief
Paragon Trade Brands, Inc. Financial Officer, Assistant Secretary
180 Technology Parkway
Norcross, Georgia 30092
David W. Cole Director
Torbitt & Castleman, Inc.
One Quality Place
Buckner, Kentucky 40010
</TABLE>
-8-
<PAGE> 9
<TABLE>
<S> <C>
Greg Feldman Director
Wellspring Capital Management, LLC
620 Fifth Avenue, Suite 216
New York, New York 10020
David Mariano Director
Wellspring Capital Management, LLC
620 Fifth Avenue, Suite 216
New York, New York 10020
James R. McManus Director
Timesoft
285 Riverside Avenue
Westport, Connecticut 06880
Thomas F. Ryan, Jr. Director
Hill, Holiday, Connors,
Cosmopulos, Inc.
200 Clarendon Street, 39th Floor
Boston, Massachusetts 02116
J. Dale Sherratt Director
Cambridge Nutraceuticals, Inc.
294 Washington Street, Suite 601
Boston, Massachusetts 02108-4608
Carl Stanton Director
Wellspring Capital Management, LLC
620 Fifth Avenue, Suite 216
New York, New York 10020
Thomas J. Volpe Director
Interpublic Group of Companies, Inc.
1271 Avenue of the Americas
New York, New York 10020
Robert E. McClain Executive Vice President - Sales and
Paragon Trade Brands, Inc. Marketing
180 Technology Parkway
Norcross, Georgia 30092
John R. Cook Vice President - Technical Support
Paragon Trade Brands, Inc.
180 Technology Parkway
Norcross, Georgia 30092
</TABLE>
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<TABLE>
<S> <C>
Kathy L. Evenson Director of Human Resources
Paragon Trade Brands, Inc.
180 Technology Parkway
Norcross, Georgia 30092
Catherine O. Hasbrouck Vice President, General Counsel and
Paragon Trade Brands, Inc. Secretary
180 Technology Parkway
Norcross, Georgia 30092
Stanley Littman Vice President - Technology and Materials
Paragon Trade Brands, Inc.
180 Technology Parkway
Norcross, Georgia 30092
Christine I. Oliver Executive Vice President - Customer
Paragon Trade Brands, Inc. Management
180 Technology Parkway
Norcross, Georgia 30092
Jeffrey S. Schoen Vice President - Manufacturing
Paragon Trade Brands, Inc.
180 Technology Parkway
Norcross, Georgia 30092
</TABLE>
5. PRINCIPAL OWNERS OF VOTING SECURITIES. Furnish the following
information as to each person owning 10 percent or more of the voting securities
of the applicant.
As of January 17, 2000, based on publicly available information reported
as of January 29, 1999:
<TABLE>
<CAPTION>
Name and Complete Title of Class Percentage of
Mailing Address Owned Amount Owned Securities Owned
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Wellington Management Common 1,637,800 13.71%
Company, LLP Stock
75 State Street
Boston, MA 02109
</TABLE>
As of the Effective Date:
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<TABLE>
<CAPTION>
Name and Complete Title of Class Percentage of
Mailing Address Owned Amount Owned Securities Owned
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PTB Acquisition Common 6,891,000 58%
Company LLC Stock
c/o Wellspring Capital
Management, LLC
620 Fifth Avenue, Suite 216
New York, NY 10020
Co-Investment Partners, L.P. 2,500,000 21%
660 Madison Avenue, 23rd Floor
New York, New York 10021
Ontario Teachers Pension Plan Board 2,500,000 21%
5650 Yonge Street, 5th Floor
Toronto, Ontario M2M 4H5
Canada
</TABLE>
6. UNDERWRITERS. Give the name and complete mailing address of (a) each
person who, within three years prior to the date of filing the application,
acted as an underwriter of any securities of the obligor which were outstanding
on the date of filing the application, and (b) each proposed principal
underwriter of the securities proposed to be offered, As to each person
specified in (a), give the title of each class of securities underwritten.
(a) Within three years prior to the date of the filing of this
Application, no person acted as an underwriter of any securities of the Company
which are currently outstanding.
CAPITAL SECURITIES
7. CAPITALIZATION. (a) Furnish the following information as to each
authorized class of securities of the applicant.
As of January 14, 2000:
<TABLE>
<CAPTION>
Title of Class Amount Authorized Amount Outstanding
--------------------------------------------------------------------------
<S> <C> <C>
Preferred Stock, 10,000,000 shares 0
Par value $0.01 per share
Common Stock, 25,000,000 shares 11,949,694
Par value $0.01 per share
</TABLE>
As of the Effective Date:
<TABLE>
<CAPTION>
Title of Class Amount Authorized Amount Outstanding
--------------------------------------------------------------------------
<S> <C> <C>
Preferred Stock, 5,000,000 shares 0
Par value $0.01 per share
</TABLE>
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<TABLE>
<S> <C> <C>
Common Stock, 20,000,000 shares 11,891,000 (1)
Par value $0.01 per share
11.25% Senior Subordinated $182,000,000 $146,000,000
Notes due 2005 aggregate principal aggregate principal
amount amount
</TABLE>
(1) Warrants to purchase up to an aggregate of 625,821 shares of common
stock of the Company will be outstanding after the Effective Date. Such
warrants will be exercisable at any time after the Effective Date at an
exercise price of $18.91 per share until the earlier of the tenth
anniversary of the Effective Date or, in the event that the warrants
are called pursuant to the warrant agreement governing the terms of the
warrants, the business day immediately preceding the call date. The
exercise price is subject to customary anti-dilution provisions upon
the happening of certain corporate events specified in the warrant
agreement.
(b) Give a brief outline of the voting rights of each class of
voting securities referred to in paragraph (a) above.
Each series of shares of Preferred Stock may have such voting power,
full or limited, or may be without voting powers, as the Board of Directors may
decide. Subject to the provisions of any applicable law, the Company's
certificate of incorporation, resolutions of the Board of Directors authorizing
a series of Preferred Stock or the Company's By-laws, the holders of outstanding
shares of Common Stock shall exclusively possess voting power for the election
of directors and for all other purposes, each holder of record of shares of
Common Stock being entitled to one vote for each share of Common Stock standing
in his or her name on the books of the Corporation.
Holders of the Notes do not have any voting rights by reason of
ownership of those securities. Holders of the Warrants do not have any voting
rights unless and until such Warrants are exercised for shares of the Company's
Common Stock, at which time the holders of the Warrants will vote as holders of
the Common Stock.
INDENTURE SECURITIES
8. ANALYSIS OF INDENTURE PROVISIONS. Insert at this point the analysis of
indenture provisions required under section 305(a)(2) of the Trust Indenture Act
of 1939, as amended (the "TIA").
The Notes will be issued under an indenture (the "Indenture") to be
dated as of the Effective Date, among the Company, as issuer, PTB International,
Inc., PTB Acquisition Sub, Inc. and PTB Holdings, Inc. as guarantors, and
Norwest Bank Minnesota, National Association, as trustee (the "Trustee"), a copy
of which is included as Exhibit T3C hereto. Capitalized terms used in this
Section 8 which are not otherwise defined below or elsewhere in the Application
have the respective meanings assigned to them in the
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Indenture. The following summary of certain provisions of the Indenture does not
purport to be complete and is subject to, and is qualified in its entirety, by
reference to all of the provisions of the Indenture.
(A) EVENTS OF DEFAULT. The following are Events of Default under
the Indenture:
(1) the Company defaults in any payment of interest with
respect to any Note when the same becomes due and payable, whether or not such
payment shall be prohibited by the subordination provisions of the Indenture,
and such default continues for a period of 30 days;
(2) the Company (i) defaults in the payment of the
principal of, or premium, if any, on any Note when the same becomes due and
payable at its Stated Maturity, upon redemption, upon declaration or otherwise,
whether or not such payment shall be prohibited by the subordination provisions
of the Indenture or (ii) fails to redeem or purchase Notes when required
pursuant to this Indenture or the Notes, whether or not such redemption or
purchase shall be prohibited by the subordination provisions of the Indenture;
(3) the Company fails to observe or perform any covenant,
condition or agreement on the part of the Company to be observed or performed
pursuant to the convenants contained in the Indenture relating to limitations on
the Indebtedness, Restricted Payments, sales of Assets and Subsidary Stock,
Change of Control and mergers, consolidations and sales of substantially all of
the Company's assets;
(4) the Company fails to comply with any of its other
agreements or covenants in or provisions of the Notes or this Indenture and such
failure continues for 30 days after the notice specified below;
(5) Indebtedness of the Company or any Significant
Subsidiary is accelerated by the holders thereof because of a default and the
total amount of such Indebtedness accelerated exceeds $15,000,000 or its foreign
currency equivalent at the time;
(6) certain events of bankruptcy, insolvency or
restructuring in respect of either the Company or a Significant Subsidiary;
(7) any judgment or decree for the payment of money in
excess of $15,000,000 above any applicable insurance coverage or its foreign
currency equivalent at the time is entered against the Company or any
Significant Subsidiary, remains outstanding and unstayed for a period of 60 days
following the entry of such judgment or decree; or
(8) the Note Guarantee of any Note Guarantor ceases to be
in full force and effect (other than (x) in accordance with the terms of such
Note Guarantee or (y) with respect to any Note Guarantor that is not a
Significant Subsidiary, as a result of the occurrence of an event described in
clause (6) above) or any Note Guarantor denies or disaffirms its obligations
under its Note Guarantee.
A Default under clause (4) is not an Event of Default until the Trustee
or the Holders of at least 25% in principal amount of the Notes notify the
Company of the Default and the Company does not cure such Default within the
time specified after receipt of such
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notice. Such notice must specify the Default, demand that it be remedied and
state that such notice is a "Notice of Default".
If an Event of Default (other than an Event of Default specified in (6)
above with respect to the Company) occurs and is continuing, the Trustee by
written notice to the Company, or the Holders of at least 25% in principal
amount of the Notes by written notice to the Company and the Trustee, may
declare the principal of, premium, if any, and accrued but unpaid interest on
all the Notes to be due and payable. Upon such a declaration, such principal,
premium, if any, and interest shall be due and payable immediately. If an Event
of Default specified in (6) above with respect to the Company occurs, the
principal of, premium, if any, and interest on all the Notes shall automatically
become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any Noteholders. The Holders of no less than a
majority in aggregate principal amount of then outstanding Notes generally are
authorized to rescind such acceleration if the recission would not conflict with
any judgment or decree and if all existing Events of Default, other than the
non-payment of amounts which have become due solely by such acceleration, have
been cured or waived.
If a Default occurs and is continuing and if it is actually known to
the Trustee, the Trustee shall mail to each Noteholder notice of the Default
within 30 days after it occurs. Except in the case of a Default in the payment
of principal of, premium, if any, or interest on any Note (including payments
pursuant to the mandatory redemption provisions of such Note, if any), the
Trustee may withhold the notice if and so long as a committee of its Trust
Officers in good faith determines that withholding the notice is in the
interests of Noteholders.
(B) AUTHENTICATION AND DELIVERY; APPLICATION OF PROCEEDS.
The Notes must be executed on behalf of the Company by its Chief
Executive Officer, President, Chief Operating Officer, Chief Financial Officer,
Treasurer or any Vice President, and shall be attested by the Company's
Secretary or one of its Assistant Secretaries, in each case by manual or
facsimile signature. The Notes must be authenticated by manual signature of an
authorized signatory of the Trustee and will not be valid for any purpose unless
so authenticated. The Trustee shall, upon receipt of a Company Order requesting
such action, authenticate Notes, excluding Secondary Securities, for original
issue up to the aggregate principal amount not to exceed $146,000,000
outstanding at any given time, except for any Secondary Securities that may be
issued pursuant to the terms of the Indenture, and other exceptions contained in
the Indenture. The Company Order will specify the amount of Notes to be
authenticated and the date on which the Notes are to be authenticated and must
further provide instructions concerning registration, amounts for each Holder
and delivery. In the case of Secondary Securities, the Company shall give
written notice to the Trustee of the amount of interest to be paid in Secondary
Securities not less than five Business Days prior to the applicable Interest
Payment Date, and the Trustee or an authenticating agent (upon written order of
the Company signed by an Authorized Representative of the Company given not
less than
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<PAGE> 15
five nor more than 45 days prior to such Interest Payment Date) shall
authenticate for original issue (pro rata to each Holder of any Notes on the
applicable Record Date) Secondary Securities in an aggregate principal amount
equal to the amount of cash interest not paid on such Interest Payment Date.
A Note will not be valid or entitled to any benefits under the
Indenture or obligatory for any purpose unless executed by the Company and
authenticated by the manual signature of one of the authorized signatories of
the Trustee as provided in the Indenture. The Trustee may appoint an
authenticating agent reasonably acceptable to the Company to authenticate the
Notes.
There will be no proceeds from the issuance of the Notes because such
securities (together with other securities of the Company) will be issued or
distributed pursuant to the Plan in exchange for the satisfaction and discharge
of certain claims arising from the ownership of certain securities of or claims
against the Company in the Bankruptcy Case. Accordingly, no provisions are
contained in the Indenture with respect to the use by the Company of proceeds of
the issuance of the Notes.
(C) RELEASE AND SUBSTITUTION OF PROPERTY SUBJECT TO THE LIEN OF
THE INDENTURE.
The Notes are unsecured and as such, there is no property subject to a
lien of the indenture.
(D) SATISFACTION AND DISCHARGE.
If the Company delivers to the Trustee all outstanding Notes (other
than Notes replaced pursuant to the terms of the Indenture) for cancellation or
(ii) all outstanding Notes have become due and payable and the Company
irrevocably deposits with the Trustee funds sufficient to pay at Stated Maturity
or, in the case of a redemption, upon redemption all outstanding Notes (other
than Notes replaced pursuant to the terms of the Indenture), together with
accrued but unpaid interest thereon to Stated Maturity or such Redemption Date
(absent any subsequent order or judgment enjoining, restraining or prohibiting
the application of such funds), and, in either case, the Company pays all other
sums payable thereunder by the Company, then the obligations of the Company
under the Notes and the Indenture will terminate (except for certain obligations
of the Company to indemnify the Trustee under certain circumstances and certain
obligations with respect to unclaimed funds).
In addition, the Company may, at its option and at any time, elect to
have its obligations discharged with respect to the outstanding Notes ("Legal
Defeasance"). Such Legal Defeasance means that the Company shall be deemed to
have paid and discharged the entire Indebtedness represented by the outstanding
Notes, and the Indenture shall cease to be of further effect as to all
outstanding Notes and Guarantees except as to the following obligations which
will survive unless otherwise terminated or discharged under
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<PAGE> 16
the Indenture (a) the rights of Holders of outstanding Notes to receive payments
in respect of the principal of, premium, if any, and interest on such Notes when
such payments are due from the trust referred to below; (b) the Company's
obligations with respect to the Notes concerning, among other things, issuing
temporary Notes, transfer and exchange of Notes, mutilated, destroyed, lost or
stolen Notes, and the maintenance of an office or agency for payment and money
for security payments held in trust and the maintenance of its corporate
existence; (c) the rights, powers, trusts, duties, and immunities of the
Trustee, and the Company's obligations in connection therewith; (d) the
provisions of the Indenture relating to redemption of the Notes; and (d) the
Legal Defeasance provisions of the Indenture. The Company may cause Legal
Defeasance to occur at any time. In addition, the Company may, at its option and
at any time, elect to have its obligations released with respect to certain
covenants that are described in the Indenture ("Covenant Defeasance") and
thereafter any omission to comply with such obligations shall not constitute a
Default or Event of Default with respect to the Notes.
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in trust, for the
benefit of the Holders of the Notes, U.S. Legal Tender or non-callable US
Government Obligations for the payment of the principal of and interest on the
outstanding Notes to maturity or redemption, as the case may be; (b) the Company
must deliver to the Trustee a certificate from a nationally recognized firm of
independent accountants expressing its opinion that the payments of principal
and interest when due and without reinvestment of the deposited US Government
Obligations plus any deposited money without investment will provide cash at
such times and in such amounts as will be sufficient to pay principal of,
premium, if any, and interest when due on all the Notes to Stated Maturity or
redemption, as the case may be; (c) 91 days must pass after the deposit is made
and during the 91-day period no Default specified in clause (6) of the Events of
Default described above with respect to the Company occurs which is continuing
at the end of the period; (d) the deposit must not result in a breach or
violation of, or constitute a default under any other agreement or instrument
binding on the Company or any of its Subsidiaries and is not prohibited by the
subordination provisions of the Indenture; (e) the Company must deliver to the
Trustee an Opinion of Counsel to the effect that the trust resulting from the
deposit does not constitute, or is qualified as, a regulated investment company
under the Investment Company Act of 1940; (f) in the case of the Legal
Defeasance option, the Company must deliver to the Trustee an Opinion of Counsel
stating that (i) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling, or (ii) since the date of
this Indenture there has been a change in the applicable Federal income tax law,
in either case to the effect that, and based thereon such Opinion of Counsel
shall confirm that, the Noteholders will not recognize income, gain or loss for
Federal income tax purposes as a result of such defeasance and will be subject
to Federal income tax
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<PAGE> 17
on the same amounts, in the same manner and at the same times as would have been
the case if such defeasance had not occurred; (g) in the case of the Covenant
Defeasance option, the Company must deliver to the Trustee an Opinion of Counsel
to the effect that the Noteholders will not recognize income, gain or loss for
Federal income tax purposes as a result of such Covenant Defeasance and will be
subject to Federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Covenant Defeasance had not
occurred; (h) the Company must deliver to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent to the
defeasance and discharge of the Notes have been complied with; (i) the Company
must deliver to the Trustee an Officer's Certificate stating that the deposit
was not made by the Company with the intent of preferring the Holders over any
other creditors of the Company or the Note Guarantors or with the intent of
defeating, hindering, delaying or defrauding any other creditors of the Company,
the Note Guarantors or others; and (j) such legal defeasance or covenant
defeasance much not cause the Trustee to have a conflicting interest within the
meaning of the TIA (assuming for the purposes of this clause (j) that all Notes
are in default within the meaning of such Act).
(E) EVIDENCE AS TO COMPLIANCE WITH CONDITIONS AND COVENANTS.
The Company must deliver to the Trustee within 120 days after the end
of each fiscal year of the Company an Officers' Certificate stating that in the
course of the performance by the signers of their duties as Officers of the
Company they would normally have knowledge of any Default and whether or not the
signers know of any Default that occurred during such period. If they do, the
certificate shall describe the Default, its status and what action the Company
is taking or proposes to take with respect thereto. The Company also shall
comply with TIA Section 314(a)(4). Additionally, the Company is required to
deliver to the Trustee, within 30 days after the occurrence thereof, written
notice in the form of an Officers' Certificate of any Event of Default described
under clause (3), (5) or (8) above, and any event which with the giving of
notice or the lapse of time would become an Event of Default under clause (4),
under certain circumstances, (6), or (7) above, its status and what action the
Company is taking or proposes to take with respect thereto. Any such certificate
or opinion must comply with the requirements of the TIA and the Indenture.
9. OTHER OBLIGORS. Give the name and complete mailing address of any
person, other than the applicant, who is an obligor upon the indenture
securities.
PTB International, Inc., 180 Technology Parkway, Norcross, Georgia
30092, is a guarantor of the Notes.
PTB Acquisition Sub, Inc., 180 Technology Parkway, Norcross, Georgia
30092, is a guarantor of the Notes.
PTB Holdings, Inc., 180 Technology Parkway, Norcross, Georgia 30092, is
a guarantor of the Notes.
CONTENTS OF APPLICATION FOR QUALIFICATION. This application for qualification
comprises:
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<PAGE> 18
(a) Pages numbered 1 to 20, consecutively.(l)
(b) The statement of eligibility and qualification of the trustee
under the indenture to be qualified.
(c) The following exhibits in addition to those filed as part of
the statement of eligibility and qualification of the trustee:
<TABLE>
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Exhibit T3A.1 Existing Certificate of Incorporation
of the Company. Incorporated by reference
from Paragon Trade Brands, Inc.'s Annual
Report on Form 10-K for the fiscal year
ended December 25, 1994.
* Exhibit T3A.2 Amended and Restated Certificate of
Incorporation to be in effect simultaneously
with the Effective Date.
Exhibit T3B.1 Existing Bylaws of the Company. Incorporated by
reference from Paragon Trade Brands, Inc.'s
Quarterly Report on Form 10-Q for the quarter
ended June 25, 1995.
* Exhibit T3B.2 Bylaws to be in effect simultaneously with the
Effective Date.
* Exhibit T3C Form of Indenture to be qualified for Senior
Subordinated Notes due 2005.
Exhibit T3D Not applicable.
* Exhibit T3E.1 Debtors' Second Amended Plan of Reorganization
dated as of November 15, 1999, and exhibits thereto.
* Exhibit T3E.2 Debtors' Disclosure Statement for Second Amended
Plan of Reorganization dated November 15, 1999, and
exhibits thereto.
* Exhibit T3E.3 Order Approving Disclosure Statement and Establishing
Solicitation and Confirmation Process Procedures.
* Exhibit T3E.4 Notification of Non-Voting Status to Class 1.
* Exhibit T3E.5 Notification of Non-Voting Status to Class 2.
</TABLE>
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<PAGE> 19
<TABLE>
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*Exhibit T3E.6 Notification of Deemed Rejection.
*Exhibit T3E.7 Letter from the Equity Committee to Holders of Common Stock
Issued by the Company.
*Exhibit T3E.8 Notice of Rights Offering to Holders of Class 3A Claims.
*Exhibit T3E.9 Notice of Rights Offering to Holders of Class 4A Interests.
*Exhibit T3E.10 Notice of Procedures and Deadlines Concerning Wholly Contingent,
Unliquidated and/or Undetermined Claims Against the Debtor.
*Exhibit T3E.11 Ballots for Class 3A, 3B, 4A (Master and Beneficial Holders)
Exhibit T3E.12 Letter to Holders of Class 3A Claims Explaining Delivery of
Notes
Exhibit T3E.13 Notice of Entry of Confirmation Order
*Exhibit T3F See Exhibit T3C for cross reference sheet showing the
location in the Indenture of the provisions inserted therein
pursuant to Section 310 through 318(a), inclusive, of the TIA.
*Exhibit 99.1 Statement of Eligibility and Qualification of the Trustee.
</TABLE>
*previously filed
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<PAGE> 20
................
(1) Pursuant to Rule 309(a) of Regulation S-T, requirements as to
sequential numbering shall not apply to this electronic format
document.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
applicant, Paragon Trade Brands, Inc., a corporation organized and existing
under the laws of Delaware, has duly caused this application to be signed on its
behalf by the undersigned, thereunto duly authorized, and its seal to be
hereunto affixed and attested, all in the City of Atlanta and State of Georgia,
on the 26th day of January, 2000.
PARAGON TRADE BRANDS, INC.
By: /s/ Catherine O. Hasbrouck
------------------------------------
Name: Catherine O. Hasbrouck
------------------------------------
Title: Vice President, General Counsel
-----------------------------------
and Secretary
-----------------------------------
Attest: /s/ Melanie Y. Zeller
---------------------------
Name: Melanie Y. Zeller
----------------------
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<PAGE> 1
EXHIBIT T3E.12
[Letterhead of Paragon Trade Brands]
January __, 2000
In Re Paragon Trade Brands, Inc., Case No. 98-60390 pending in the
United States Bankruptcy Court,
Northern District of Georgia, Atlanta Division
To the Unsecured Creditors of Class 3A under the Modified Second Amended Plan of
Reorganization (the "Plan")
Re: Delivery of your 11.25% Senior Subordinated Notes, due 2005 (the
"Notes")
Ladies and Gentlemen:
As a Class 3A Unsecured Creditor under the Plan, you are entitled to
receive your pro rata share of the $146,000,000 original principal amount of the
Notes. The Notes have been listed in The Depository Trust Company's ("DTC")
book-entry-only program with the result that only one Note representing the
entire principal amount will be issued. Accordingly, you will not receive a
paper certificate representing your share of the Notes; instead, you can hold
your Notes only in an account you maintain with a securities broker. In order
for us to transfer your Notes to you, it will be necessary for you to give us
information regarding your account and your broker. We have enclosed a form
which requests the information we will need to transfer your Notes to your
account.
Please complete the form as soon as possible and return it to Miriam
Bloom of Bankruptcy Services LLC ("BSI"), which is serving as distribution agent
for the cash and Notes to which Class 3A Unsecured Creditors are entitled. An
envelope addressed to BSI is enclosed for your convenience. If you have any
questions concerning how to complete the form, you may call Miriam Bloom at
(212) 376 8494.
PLEASE NOTE THAT WE CANNOT TRANSFER YOUR SHARE OF THE NOTES TO YOU
UNTIL YOU HAVE COMPLETED THE ENCLOSED FORM AND RETURNED IT TO BSI, INCLUDING THE
BROKERAGE ACCOUNT INFORMATION. WE URGE YOU TO RESPOND PROMPTLY
We have also included some additional information concerning DTC and
its book-entry-only program.
Very truly yours,
-------------------------------
Catherine O. Hasbrouck
Vice President, General Counsel
and Secretary
<PAGE> 2
PLEASE PROVIDE THE INFORMATION REQUESTED BELOW,
THEN SIGN AND RETURN THE COMPLETED FORM TO
MIRIAM BLOOM
BANKRUPTCY SERVICES LLC
70 EAST 55TH STREET
6TH FLOOR
NEW YORK, NY 10022
FAX: 212-376-8989
VOICE: 212-376-8494
- -------------------------------------------------------------------------------
PLEASE INSERT THE REQUESTED INFORMATION CONCERNING YOUR SECURITIES
BROKERAGE ACCOUNT:
Your Name: ________________________________
Please Print
Name of Brokerage Company: _________________________________
Your broker's address: _________________________________
_________________________________
_________________________________
Your account number at your broker _________________________________
Your contact at your broker: _________________________________
Your contact's telephone number: _________________________________
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
By signing and returning this form to BSI, you will authorize BSI to transfer
all of the 11.25% Senior Subordinated Notes, due 2005 of Paragon Trade Brands,
Inc. to which you are entitled by virtue of Paragon's Plan in its bankruptcy
proceeding to the brokerage account you have identified above.
- -------------------------------------------------------------------------------
PLEASE SIGN THIS FORM IN THE APPROPRIATE BLOCK:
- -------------------------------------------------------------------------------
<PAGE> 3
IF YOU ARE AN INDIVIDUAL: IF YOU ARE AN ENTITY:
-------------------------------- ----------------------------------
Sign above Entity Name
________________________________ By: ___________________________
Print your name above
Title: ___________________________
By: ___________________________
Title: ___________________________
- --------------------------------------------------------------------------------
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<PAGE> 4
ADDITIONAL INFORMATION CONCERNING
THE DEPOSITORY TRUST COMPANY
AND
ITS BOOK-ENTRY-ONLY PROGRAM
The Depository Trust Company ("DTC"), New York, NY, will act as
securities depository for Paragon Trade Brands, Inc.'s 11.25% Senior
Subordinated Notes, due 2005 (the "Notes"). The Notes will be issued as
fully-registered securities registered in the name of Cede & Co. (DTC's
partnership nominee) or any other name as may be requested by an authorized
representative of DTC. One fully-registered note certificate in the amount of
$146,000,000 will be issued for the entire issue of the Notes. That note
certificate will be deposited with Norwest Bank Minnesota, National Association,
the trustee for the Notes and DTC's custodian.
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934. DTC holds securities that its participants ("Direct Participants")
deposit with DTC. DTC also facilitates the settlement among Direct Participants
of securities transactions, such as transfers and pledges, in deposited
securities through electronic computerized book-entry changes in Direct
Participants' accounts, thereby eliminating the need for physical movement of
securities certificates. Direct Participants include securities brokers and
dealers, banks, trust companies, clearing corporations, and certain other
organizations. DTC is owned by a number of its Direct Participants and by the
New York Stock Exchange, Inc., the American Stock Exchange LLC, and the National
Association of Securities Dealers, Inc. Access to the DTC system is also
available to others such as securities brokers and dealers, banks, and trust
companies that clear through or maintain a custodial relationship with a Direct
Participant, either directly or indirectly ("Indirect Participants"). The Rules
applicable to DTC and its Direct and Indirect Participants are on file with the
Securities and Exchange Commission.
Purchases of Notes under the DTC system must be made by or through
Direct Participants, which will receive a credit for the Notes on DTC's records.
The ownership interest of each actual purchaser of a Note ("Beneficial Owner")
is in turn to be recorded on the Direct and Indirect Participants' records. The
Class 3A Unsecured Creditors will be Beneficial Owners of the Notes. Beneficial
Owners will not receive written confirmation from DTC of their purchase, but
Beneficial Owners should receive written confirmations providing details of the
transaction, as well as periodic statements of their holdings, from the Direct
or Indirect Participant through which the Beneficial Owner entered into the
transaction. Transfers of ownership interests in the Notes are to be
accomplished by entries made on the books of Direct and Indirect Participants
acting on behalf of Beneficial Owners. Beneficial Owners will not receive
certificates representing their ownership interests in the Notes, except in the
event that use of the book-entry system for the Notes is discontinued.
To facilitate subsequent transfers, all Notes deposited by Direct
Participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co., or any other name as may be requested by an authorized
representative of DTC. The deposit of Notes with DTC and their registration in
the name of Cede & Co. or such other nominee do not effect any change in
beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of
the Notes; DTC's records reflect only the identity of the Direct Participants to
whose accounts such Notes are credited, which may or may not be the Beneficial
Owners. The Direct and Indirect Participants will remain responsible for keeping
account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time. Beneficial Owners of Notes may wish to take
certain steps to augment transmission to them of notices of significant events
with respect to the Notes, such as
-4-
<PAGE> 5
redemptions, tenders, defaults, and proposed amendments to the security
documents. Beneficial Owners of Notes may wish to ascertain that the Direct
Participant or Indirect Participant holding their position has agreed to obtain
and transmit notices to Beneficial Owners, or in the alternative, Beneficial
Owners may wish to provide their names and addresses to the registrar and
request that copies of the notices be provided directly to them.
Redemption notices will be sent to DTC. If less than all of the Notes
are being redeemed, DTC's practice is to determine by lot the amount of the
interest of each Direct Participant in such issue to be redeemed.
Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or
vote with respect to the Notes. Under its usual procedures, DTC will mail an
Omnibus Proxy to the Issuer (Paragon) as soon as possible after the record date.
The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those
Direct Participants to whose accounts the Notes are credited on the record date
(identified in a listing attached to the Omnibus Proxy).
Redemption proceeds, distributions, and dividend payments on the Notes
will be made to Cede & Co., or any other nominee as may be requested by an
authorized representative of DTC. DTC's practice is to credit Direct
Participants' accounts, upon DTC's receipt of funds and corresponding detail
information from Paragon or Norwest Bank of Minnesota, National Association (the
trustee) on the payable date in accordance with their respective holdings shown
on DTC's records. Payments by Participants to Beneficial Owners will be governed
by standing instructions and customary practices, as is the case with securities
held for the accounts of customers in bearer form or registered in "street
name," and will be the responsibility of such Participant and not of DTC, the
trustee or Paragon, subject to any statutory or regulatory requirements as may
be in effect from time to time. Payment of redemption proceeds, distributions,
and dividends to Cede & Co. (or any other nominee as may be requested by an
authorized representative of DTC) is the responsibility of Paragon or the
trustee, disbursement of such payments to Direct Participants shall be the
responsibility of DTC, and disbursement of such payments to the Beneficial
Owners shall be the responsibility of Direct and Indirect Participants.
If Paragon is required to offer to purchase all or part of the Notes as
a result of a change of control or with the proceeds of the sale of certain
assets, a Beneficial Owner may give notice to elect to have its Notes purchased
or tendered, through its Participant, to Paragon's agent, and shall effect
delivery of such Notes by causing the Direct Participant to transfer the
Participant's interest in the Notes, on DTC's records, to Paragon's agent. The
requirement for physical delivery of Notes in connection with an optional tender
or a mandatory purchase will be deemed satisfied when the ownership rights in
the Notes are transferred by Direct Participants on DTC's records and followed
by a book-entry credit of tendered Notes to the account of Paragon's agent at
DTC.
DTC may discontinue providing its services as securities depository
with respect to the Notes at any time by giving reasonable notice to Paragon or
the trustee. Under such circumstances, in the event that a successor securities
depository is not obtained, Note certificates are required to be printed and
delivered.
Paragon may decide to discontinue use of the system of book-entry
transfers through DTC (or a successor securities depository). In that event,
Note certificates will be printed and delivered.
Paragon has obtained this information on DTC and DTC's book-entry
system from sources it believes to be reliable, but Paragon takes no
responsibility for the accuracy thereof.
-5-
<PAGE> 1
EXHIBIT T3E.13
UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
- -----------------------------------------------x
IN RE ) Case No. 98-60390
)
PARAGON TRADE BRANDS, INC., ) Chapter 11
)
Debtor. ) Judge Murphy
)
Federal Tax I.D. No. 91-1554663 )
)
- -----------------------------------------------x
TO ALL CREDITORS AND EQUITY SECURITY HOLDERS OF THE DEBTOR:
NOTICE OF ENTRY OF CONFIRMATION ORDER
PLEASE TAKE NOTICE THAT the Modified Second Amended Plan of
Reorganization for the above-captioned debtor and debtor in possession (the
"Debtor"), which was jointly proposed by the Debtor and its Official Committee
of Unsecured Creditors, was confirmed by order, dated and entered on January 13,
2000, of the United States Bankruptcy Court for the Northern District of
Georgia.
<TABLE>
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WILLKIE FARR & GALLAGHER O'MELVENY & MYERS LLP
Special Reorganization Counsel for Debtor and Debtor in Attorneys for the Official Committee of Unsecured
Possession Creditors
787 Seventh Avenue 153 East 53rd Street
New York, New York 10019 New York, New York 10022
(212) 728-8000 (212) 326-2000
</TABLE>
