SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) March 31, 1995
SIGNAL APPAREL COMPANY, INC.
(Exact Name of Registrant as specified in its Charter)
Indiana 1-2782 62-0641635
(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification
incorporation) No.)
200-A MANUFACTURERS ROAD, CHATTANOOGA, TN 37405
(Address of principal executive offices) (ZIP Code)
Registrant's telephone number, including area code (615) 752-2032
Item 5. OTHER EVENTS
Effective March 31, 1995, Signal Apparel Company, Inc. (the
"COMPANY") entered into a credit agreement with Walsh Greenwood &
Co. ("WALSH GREENWOOD") (the "CREDIT AGREEMENT"). Walsh Greenwood
is a principal shareholder of the Company and Paul R. Greenwood and
Stephen Walsh, directors of the Company, are each general partners
of Walsh Greenwood. Under the Credit Agreement, Walsh Greenwood
will lend the Company up to $15,000,000 for a three-year term. The
material terms of the Credit Agreement are: (i) a maximum
borrowing of $15,000,000, which shall be drawn in increments of
$1,000,000 upon notice received two business days prior to each
draw (as of the date hereof, the Company has drawn approximately
$12,000,000; (ii) the issuance to Walsh Greenwood of warrants to
purchase 1,500,000 shares of the Company's Common Stock at $2.25
per share, which warrants vest on the basis of 100,000 warrants for
each $1,000,000 drawn and which are exercisable for three years
from vesting, such warrants containing antidilution provisions no
more favorable than the equivalent provisions in the currently
outstanding warrants issued to principal shareholders of the
Company (as of the date hereof, 1,200,000 of such warrants have
vested); (iii) the issuance to Walsh Greenwood of warrants to
purchase 1,500,000 shares of the Company's Common Stock at a 25%
discount to the 20 day average trade price in December 1996, which
warrants vested immediately upon the commitment by Walsh Greenwood
of the full amount of the credit and which will be exercisable for
three years beginning January 1, 1997, such warrants containing
antidilution provisions no more favorable than the equivalent
provisions in the currently outstanding warrants issued to
principal shareholders of the Company; (iv) all warrants issued
have registration rights no more favorable than the equivalent
provisions in the currently outstanding warrants issued to
principal shareholders of the Company, except that such rights
include three demand registrations; (v) interest upon the
outstanding balance of the credit is at the rate of 25% per annum,
payable on December 31, 1995 and quarterly thereafter (the Company
is obligated only to pay interest at the rate of 15% per annum
until maturity, with the balance being due at maturity); (vi) all
borrowings are secured by a security interest in all assets of the
Company currently pledged to its senior lenders, but said security
interest is subordinate to the security interests of the senior
lenders; and (vii) all borrowings may be used for only working
capital and may not be used to repay any principal of any bank
debt.
As additional conditions to the foregoing extension of credit, the
Company obtained the agreement of the holders of its preferred
stock (1) to forego all future dividends from January 1, 1995 until
the principal and interest of all the borrowing under the Credit
Agreement has been paid in full and (2) to grant the Company the
right, after repayment of a $6,500,000 NationsBank loan and the
borrowing from Walsh Greenwood, to redeem the outstanding shares of
preferred stock with shares of its Common Stock valued for such
purpose at $7.00 per share, which right of redemption will extend
until June 30, 1998.
Walsh Greenwood's ability to exercise any of the warrants to
purchase up to 3,000,000 shares of the Company's Common Stock, as
described above, is contingent upon the approval of the issuance of
such warrants by the shareholders of the Company. Such vote will
occur on May 11, 1995 at the Annual Meeting of Shareholders.
Item 7. EXHIBITS
(1) Listing of Exhibits Incorporated by Reference:
None.
(2) Listing of Exhibits Filed with this Report:
(4-1) Credit Agreement dated as of March 31, 1995 between the
Company and Walsh Greenwood & Co.
(4-2) Promissory Note in face amount of $15,000,000 dated
March 31, 1995 issued to Walsh Greenwood by the Company
(4-3) Fixed Rate Warrant Certificate for 1,500,000 Warrants
dated March 31, 1995 issued to Walsh Greenwood by the
Company
(4-4) Discount Rate Warrant Certificate for 1,500,000
Warrants dated March 31, 1995 issued to Walsh Greenwood
by the Company
(10-1) Agreement among Signal Apparel Company, Inc. and
certain shareholders of Signal Apparel Company, Inc.
(10-2) Tennessee Deed of Trust and Security Agreement dated
March 31, 1995 between the Company and Walsh Greenwood
(10-3) Deed to Secure Debt and Security Agreement dated March
31, 1995 between the Company and Walsh Greenwood
(10-4) Real Estate Mortgage, Security Agreement, Assignment of
Lease and Rents and Fixture Filing dated March 31, 1995
between Shirt Shed and Walsh Greenwood
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned thereunto duly authorized.
SIGNAL APPAREL COMPANY, INC.
(Registrant)
By: /s/ William H. Watts
William H. Watts
Senior Vice President and
Chief Financial Officer
Date: May 11, 1995
SIGNAL APPAREL COMPANY, INC.
CURRENT REPORT ON FORM 8-K
EXHIBIT INDEX
EXHIBIT SEQUENTIAL
NO. DESCRIPTION PAGE NO.
(4-1) Credit Agreement dated as
of March 31, 1995 between
the Company and Walsh
Greenwood & Co.
(4-2) Promissory Note in face
amount of $15,000,000
dated March 31, 1995
issued to Walsh Greenwood
by the Company
(4-3) Fixed Rate Warrant Certificate
for 1,500,000 Warrants
dated March 31, 1995
issued to Walsh Greenwood
by the Company
(4-4) Discount Rate Warrant Certificate
for 1,500,000 Warrants
dated March 31, 1995
issued to Walsh Greenwood
by the Company
(10-1) Agreement among Signal Apparel
Company, Inc. and certain
shareholders of Signal Apparel
Company, Inc.
(10-2) Tennessee Deed of Trust and
Security Agreement dated March
31, 1995 between the Company
and Walsh Greenwood
(10-3) Deed to Secure Debt and Security
Agreement dated March 31, 1995
between the Company and Walsh
Greenwood
(10-4) Real Estate Mortgage, Security
Agreement, Assignment of Leases
and Rents and Fixture Filing
dated March 31, 1995 between
Shirt Shed and Walsh Greenwood