<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 2, 1995
Commission File Number 0-9286
COCA-COLA BOTTLING CO. CONSOLIDATED
(Exact name of registrant as specified in its charter)
Delaware 56-0950585
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
1900 Rexford Road, Charlotte, North Carolina 28211
(Address of principal executive offices) (Zip Code)
(704) 551-4400
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes X No
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at May 5, 1995
Common Stock, $1 Par Value 7,958,059
Class B Common Stock, $1 Par Value 1,336,362
<PAGE>
PART I - FINANCIAL INFORMATION
Item l. Financial Statements.
Coca-Cola Bottling Co. Consolidated
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
In Thousands (Except Share Data)
April 2, Jan. 1, April 3,
1995 1995 1994
ASSETS
Current Assets:
Cash $ 2,139 $1,812 $ 2,686
Accounts receivable, trade,
less allowance for doubtful
accounts of $402, $400 and $417 8,923 7,756 11,438
Accounts receivable from The
Coca-Cola Company 6,582 4,514 7,325
Due from Piedmont Coca-Cola Bottling
Partnership 188 1,383 4,737
Accounts receivable, other 5,096 7,232 7,108
Inventories 31,884 31,871 31,823
Prepaid expenses and other current assets 5,239 5,054 4,053
Total current assets 60,051 59,622 69,170
Property, plant and equipment, less
accumulated depreciation of $143,635,
$141,419 and $137,137 185,997 185,633 170,385
Investment in Piedmont Coca-Cola
Bottling Partnership 66,930 67,729 67,754
Other assets 24,055 23,394 21,277
Identifiable intangible assets, less
accumulated amortization of $78,134,
$75,667 and $68,267 255,384 257,851 265,251
Excess of cost over fair value of net
assets of businesses acquired, less
accumulated amortization of $22,262,
$21,689 and $19,971 69,357 69,930 71,648
Total $661,774 $664,159 $665,485
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
LIABILITIES AND SHAREHOLDERS' EQUITY
April 2, Jan. 1, April 3,
1995 1995 1994
Current Liabilities:
Portion of long-term debt payable
within one year $ 247 $ 300 $ 611
Accounts payable and accrued
liabilities 60,506 59,413 63,500
Accounts payable to The Coca-Cola
Company 4,638 2,930 4,366
Accrued compensation 2,118 4,246 2,881
Accrued interest payable 5,998 11,275 4,757
Total current liabilities 73,507 78,164 76,115
Deferred income taxes 90,862 89,531 79,511
Other liabilities 27,391 29,512 21,758
Long-term debt 436,400 432,971 461,497
Total liabilities 628,160 630,178 638,881
Shareholders' Equity:
Convertible Preferred Stock, $100 par value:
Authorized-50,000 shares; Issued-None
Nonconvertible Preferred Stock, $100 par value:
Authorized-50,000 shares; Issued-None
Preferred Stock, $.01 par value:
Authorized-20,000,000 shares; Issued-None
Common Stock, $1 par value:
Authorized-30,000,000 shares;
Issued-10,090,859 shares 10,090 10,090 10,090
Class B Common Stock, $1 par value:
Authorized-10,000,000 shares;
Issued-1,964,476 shares 1,965 1,965 1,965
Class C Common Stock, $1 par value:
Authorized-20,000,000 shares; Issued-None
Capital in excess of par value 127,704 130,028 136,998
Accumulated deficit (84,595) (86,552) (99,189)
Minimum pension liability adjustment (3,904) (3,904) (5,614)
51,260 51,627 44,250
Less-Treasury stock, at cost:
Common-2,132,800 shares 17,237 17,237 17,237
Class B Common-628,114 shares 409 409 409
Total shareholders' equity 33,614 33,981 26,604
Total $661,774 $664,159 $665,485
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
Coca-Cola Bottling Co. Consolidated
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
In Thousands (Except Per Share Data)
First Quarter
1995 1994
Net sales (includes sales to Piedmont of
$16,682 and $20,564) $ 170,977 $ 163,817
Cost of products sold, excluding depreciation shown
below (includes $15,222 and $18,905 related to
sales to Piedmont) 98,903 97,484
Gross margin 72,074 66,333
Selling expenses 36,448 34,639
General and administrative expenses 13,493 12,659
Depreciation expense 6,386 5,773
Amortization of goodwill and intangibles 3,057 3,073
Income from operations 12,690 10,189
Interest expense 8,437 7,526
Other expense, net 964 14
Income before income taxes and effect of
accounting change 3,289 2,649
Federal and state income taxes 1,332 1,139
Income before effect of accounting change 1,957 1,510
Effect of accounting change (2,211)
Net income (loss) $ 1,957 $ (701)
Income (loss) per share:
Income before effect of accounting change $ .21 $ .16
Effect of accounting change (.24)
Net income (loss) $ .21 $ (.08)
Cash dividends per share:
Common Stock $ .25 $ .25
Class B Common Stock .25 .25
Weighted average number of Common and
Class B Common shares outstanding 9,294 9,294
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
Coca-Cola Bottling Co. Consolidated
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED)
In Thousands
<TABLE>
<CAPTION>
Capital Minimum
Class B in Pension
Common Common Excess of Accumulated Liability Treasury
Stock Stock Par Value Deficit Adjustment Stock
<S> <C> <C> <C> <C> <C> <C>
Balance on
January 2, 1994 $10,090 $1,965 $139,322 $(98,488) $(5,614) $17,646
Net loss (701)
Cash dividends
declared:
Common (2,324)
Balance on
April 3, 1994 $10,090 $1,965 $136,998 $(99,189) $(5,614) $17,646
Balance on
January 1, 1995 $10,090 $1,965 $130,028 $(86,552) $(3,904) $17,646
Net income 1,957
Cash dividends
declared:
Common (2,324)
Balance on
April 2, 1995 $10,090 $1,965 $127,704 $(84,595) $(3,904) $17,646
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
Coca-Cola Bottling Co. Consolidated
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
In Thousands
First Quarter
1995 1994
Cash Flows from Operating Activities
Net income (loss) $ 1,957 $ (701)
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Effect of accounting change 2,211
Depreciation expense 6,386 5,773
Amortization of goodwill and intangibles 3,057 3,073
Deferred income taxes 1,332 1,139
(Gains) losses on sale of property, plant and
equipment 507 (356)
Amortization of debt costs 114 114
Undistributed loss of Piedmont Coca-Cola Bottling
Partnership 799 646
Increase in current assets less current liabilities (4,759) (20,049)
Increase in other noncurrent assets (723) (1,305)
Decrease in other noncurrent liabilities (1,232) (238)
Other 2 125
Total adjustments 5,483 (8,867)
Net cash provided by (used in) operating activities 7,440 (9,568)
Cash Flows from Financing Activities
Proceeds from the issuance of long-term debt 3,434 27,166
Payments on long-term debt (5) (28)
Cash dividends paid (2,324) (2,324)
Other (960) (913)
Net cash provided by financing activities 145 23,901
Cash Flows from Investing Activities
Additions to property, plant and equipment (7,641) (14,681)
Proceeds from the sale of property, plant and equipment 383 1,772
Net cash used in investing activities (7,258) (12,909)
Net increase in cash 327 1,424
Cash at beginning of period 1,812 1,262
Cash at end of period $ 2,139 $ 2,686
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
Coca-Cola Bottling Co. Consolidated
Notes to Consolidated Financial Statements (Unaudited)
1. Accounting Policies
The consolidated financial statements include the accounts of Coca-Cola
Bottling Co. Consolidated and its majority owned subsidiaries ("the
Company"). All significant intercompany accounts and transactions have
been eliminated.
The information contained in the financial statements is unaudited.
The statements reflect all adjustments which, in the opinion of
management, are necessary for a fair statement of the results for the
interim periods presented. Except for the accounting change discussed
in Note 2, all such adjustments are of a normal, recurring nature.
The accounting policies followed in the presentation of interim
financial results are the same as those followed on an annual basis.
These policies are presented in Note 1 to the consolidated financial
statements included in the Company's Annual Report on Form 10-K for the
year ended January 1, 1995 filed with the Securities and Exchange
Commission.
Certain prior year amounts have been reclassified to conform to current
year classifications.
2. Accounting Change
In November 1992, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 112, "Employers'
Accounting for Postemployment Benefits" ("SFAS 112"). SFAS 112
requires the accrual, during the years that employees render service,
of the expected cost of providing postemployment benefits if certain
criteria are met. The Company adopted the provisions of SFAS 112 in
the first quarter of 1994, effective January 3, 1994. As a result, the
Company recorded a one-time, after-tax charge of $2.2 million. This
charge appears within the caption "Effect of accounting change."
<PAGE>
Coca-Cola Bottling Co. Consolidated
Notes to Consolidated Financial Statements (Unaudited)
3. Summarized Income Statement Data of Piedmont Coca-Cola Bottling
Partnership
On July 2, 1993, the Company and The Coca-Cola Company formed Piedmont
Coca-Cola Bottling Partnership ("Piedmont") to distribute and market
soft drink products primarily in portions of North Carolina and South
Carolina. The Company and The Coca-Cola Company, through their
respective subsidiaries, each beneficially own a 50% interest in
Piedmont. The Company provides a majority of the soft drink products
to Piedmont and receives a fee for managing the business of Piedmont
pursuant to a management agreement. Summarized income statement data
for Piedmont is as follows:
First Quarter
In Thousands 1995 1994
Net sales $45,688 $43,961
Gross margin 18,923 19,174
Income from operations 1,004 1,015
Net loss (1,598) (1,292)
4. Inventories
Inventories are summarized as follows:
April 2, Jan. 1, April 3,
In Thousands 1995 1995 1994
Finished products $18,708 $17,621 $20,203
Manufacturing materials 11,633 12,638 10,094
Used bottles and cases 1,543 1,612 1,526
Total inventories $31,884 $31,871 $31,823
<PAGE>
Coca-Cola Bottling Co. Consolidated
Notes to Consolidated Financial Statements (Unaudited)
5. Long-Term Debt
Long-term debt is summarized as follows:
<TABLE>
<CAPTION>
Fixed(F) or
Interest Variable Interest April 2, Jan. 1, April 3,
In Thousands Maturity Rate (V) Rate Paid 1995 1995 1994
<S> <C> <C> <C> <C> <C> <C> <C>
Lines of Credit 1997 6.18% - V Varies $ 96,860 $93,420 $116,525
6.62%
Commercial Paper 3,989
Term Loan Agreement 2000 7.50% V Semi- 60,000 60,000 60,000
annually
Term Loan Agreement 2001 7.25% V Semi- 60,000 60,000 60,000
annually
Medium-Term Notes 1998 6.86% V Quarterly 10,000 10,000 10,000
Medium-Term Notes 1999 7.99% F Semi- 66,500 66,500 66,500
annually
Medium-Term Notes 2000 10.05% F Semi- 57,000 57,000 57,000
annually
Medium-Term Notes 2002 8.56% F Semi- 66,500 66,500 66,500
annually
Notes acquired in
Sunbelt acquisition 2001 8.00% F Quarterly 5,321 5,327 5,429
Capital leases and
other notes payable 1995 - 6.85% - F Varies 14,466 14,524 16,165
2001 12.00%
Less: Portion of long- 436,647 433,271 462,108
term debt payable
within one year 247 300 611
Long-term debt $436,400 $432,971 $461,497
</TABLE>
<PAGE>
Coca-Cola Bottling Co. Consolidated
Notes to Consolidated Financial Statements (Unaudited)
5. Long-Term Debt (cont.)
As of April 2, 1995, the Company was in compliance with all of the
covenants of its various borrowing agreements.
It is the Company's intent to renew its lines of credit, commercial
paper borrowings and borrowings under the revolving credit facility
as they mature. To the extent that these borrowings do not exceed
the amount available under the Company's $170 million revolving
credit facility, they are classified as noncurrent liabilities.
A $100 million commercial paper program was established in January
1990 with funds to be used for general corporate purposes. There
were no balances outstanding under this program on April 2, 1995 or
on January 1, 1995. On April 3, 1994, approximately $4.0 million was
outstanding under the commercial paper program.
In June 1992, the Company entered into a three-year arrangement under
which it has the right to sell an undivided interest in a designated
pool of trade accounts receivable for up to a maximum of $40 million.
The Company had sold trade receivables of $35 million, $35 million
and $31 million as of April 2, 1995, January 1, 1995 and April 3,
1994, respectively. It is the Company's intent to seek renewal of
this arrangement prior to its expiration.
On October 12, 1994, a $400 million shelf registration for debt and
equity securities filed with the Securities and Exchange Commission
became effective and available for issuance. As of April 2, 1995, no
securities had been issued under this shelf registration. In any
future offering under such registration, net proceeds from sales of
the securities could be used for general corporate purposes,
including repayment of debt, future acquisitions, capital
expenditures and/or working capital.
The Company has guaranteed a portion of the debt for two cooperatives
in which the Company is a member. The amounts guaranteed were $34.2
million, $31.0 million and $15.7 million as of April 2, 1995, January
1, 1995 and April 3, 1994, respectively.
<PAGE>
Coca-Cola Bottling Co. Consolidated
Notes to Consolidated Financial Statements (Unaudited)
6. Derivative Financial Instruments
The Company uses derivative financial instruments to cost effectively
modify risk from interest rate fluctuations in its underlying debt.
The Company has historically altered its fixed/floating interest rate
mix based upon anticipated operating cash flows of the Company
relative to its debt level and the Company's ability to absorb
increases in interest rates. These derivative financial instruments
are not used for trading purposes.
The Company has entered into interest rate swaps that resulted in
weighted average interest rates for the debt portfolio of
approximately 7.5%, 7.0% and 6.3% as of April 2, 1995, January 1,
1995 and April 3, 1994, respectively. The Company's overall weighted
average interest rate on its long-term debt increased from an average
of 5.5% during the first quarter of 1994 to an average of 7.3% during
the first quarter of 1995. After taking into account the effect of
all of the interest rate swap activities, approximately 47%, 47% and
46% of the total debt portfolio was subject to changes in short-term
interest rates as of April 2, 1995, January 1, 1995 and April 3,
1994, respectively.
A rate increase of 1% would have increased first quarter 1995
interest expense by approximately $.5 million and net income for the
quarter ended April 2, 1995 would have been reduced by approximately
$.3 million. Interest coverage as of April 2, 1995 would have been
2.5 times (versus 2.6 times) if interest rates had increased by 1%.
Derivative financial instruments were as follows:
<TABLE>
<CAPTION>
April 2, 1995 Jan. 1, 1995 April 3, 1994
Remaining Remaining Remaining
In Thousands Amount Term Amount Term Amount Term
<S> <C> <C> <C> <C> <C> <C>
Interest rate swaps-floating $221,600 5-8 years $221,600 6-9 years $221,600 6-9 years
Interest rate swaps-fixed 215,000 1-8 years 215,000 1-9 years 265,000 2-9 years
Interest rate caps 30,000 .5 year 110,000 .5 year 110,000 1 year
</TABLE>
<PAGE>
Coca-Cola Bottling Co. Consolidated
Notes to Consolidated Financial Statements (Unaudited)
6. Derivative Financial Instruments (cont.)
The table below summarizes interest rate swap activity.
First Quarter
In Thousands 1995
Total swaps, beginning of period $436,600
New swaps -
Terminated swaps -
Expired swaps -
Total swaps, end of period $436,600
Deferred gains on terminated interest rate swap contracts were $3.9
million, $4.2 million and $4.4 million on April 2, 1995, January 1,
1995 and April 3, 1994, respectively.
The carrying amounts and fair values of the Company's balance sheet
and off-balance-sheet instruments were as follows:
<TABLE>
<CAPTION>
April 2, 1995 Jan. 1, 1995
Carrying Fair Carrying Fair
In Thousands Amount Value Amount Value
<S> <C> <C> <C> <C>
Balance Sheet Instruments
Public debt $200,000 $207,214 $200,000 $201,119
Non-public variable rate long-term
debt 216,860 216,860 213,420 213,420
Non-public fixed rate long-term debt 19,787 19,424 19,851 19,030
Off-Balance-Sheet Instruments
Interest rate swaps (7,701) (11,123)
</TABLE>
The fair values of the interest rate swaps represent the estimated
amounts the Company would have had to pay to terminate these
agreements.
<PAGE>
Coca-Cola Bottling Co. Consolidated
Notes to Consolidated Financial Statements (Unaudited)
7. Supplemental Disclosures of Cash Flow Information
Changes in current assets and current liabilities affecting cash, net
of effects from acquisitions and divestitures and effect of
accounting change, were as follows:
First Quarter
In Thousands 1995 1994
Accounts receivable, trade, net $(1,167) $(6,478)
Due from Piedmont 1,195 (2,283)
Accounts receivable, other 68 3,023
Inventories (13) (4,290)
Prepaid expenses and other current assets (185) (728)
Portion of long-term debt payable within one year (53) (100)
Accounts payable and accrued liabilities 2,801 (4,516)
Accrued compensation (2,128) 674
Accrued interest payable (5,277) (5,351)
Increase in current assets less current liabilities $(4,759) $(20,049)
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Introduction:
The following discussion presents management's analysis of the
results of operations for the first three months of 1995 compared
to the first three months of 1994 and changes in financial
condition from April 3, 1994 and January 1, 1995 to April 2,
1995.
The Company reported net income of $2.0 million or $.21 per share
for the first quarter of 1995 compared with a net loss of $.7
million or $.08 per share for the same period in 1994. The
results for the first quarter of 1994 include a one-time, after-
tax noncash charge of $2.2 million or $.24 per share related to
the adoption of Statement of Financial Accounting Standards No.
112, "Employers' Accounting for Postemployment Benefits."
On June 1, 1994, the Company executed a management agreement with
South Atlantic Canners, Inc. ("SAC"), a manufacturing cooperative
located in Bishopville, South Carolina. The Company is a member
of the cooperative and receives a fee for managing the day-to-day
operations of SAC. SAC has completed the expansion of its
bottling lines and is now providing a portion of the product
requirements for both the Company and Piedmont Coca-Cola Bottling
Partnership.
The results for interim periods are not necessarily indicative of
the results to be expected for the year due to seasonal factors.
Results of Operations:
For the first quarter of 1995, net franchise sales increased 6.6%
over the 1994 period due to increased net selling prices.
Selling prices were increased in order to cover the anticipated
increased cost of raw materials, primarily aluminum cans. Case
volume was essentially unchanged from the comparable 1994 period.
In the first quarter of 1994, franchise sales volume increased
more than 6% from the first quarter of 1993 after adjusting 1993
results to reflect comparable franchise territories.
In the first quarter of 1995, gross margin on net franchise sales
increased by 7.6% and was slightly higher as a percentage of net
franchise sales. Cost of goods sold related to net franchise
sales increased due to increases in packaging costs, but selling
price increases more than offset the increase in cost of goods
sold. Although the cost of cans increased during the first
quarter of 1995, recent agreements currently in place with
suppliers ensure that the cost of cans will not increase further
this year and may decline from current pricing if aluminum ingot
prices decrease below a specified level.
<PAGE>
For the first quarter of 1995, selling expenses increased 5.2%
over the 1994 period. Selling expenses related to franchise
sales increased more than 7% due primarily to higher employment
costs and increased expenses related to sales development
programs and casualty insurance. General and administrative
expenses increased due to increased employment costs. As a
percentage of net franchise sales, general and administrative
expenses were unchanged between the two periods.
Depreciation expense increased 10.6% between the first quarter of
1994 and the first quarter of 1995. This change reflects the
high level of capital expenditures during 1994. During 1994,
certain improvements were made at the manufacturing facilities to
produce new packages.
Interest expense increased 12.1% from the first quarter of 1994
to the first quarter of 1995 due to higher short-term interest
rates. Outstanding long-term debt decreased approximately $25
million from April 3, 1994 to April 2, 1995. The Company's
weighted average interest rate increased from an average of 5.5%
during the first quarter of 1994 to an average of 7.3% during the
first quarter of 1995.
The change in "other expense, net" between the first quarter of
1994 and the first quarter of 1995 was due primarily to a first
quarter 1994 gain on the sale of an idle production facility.
This facility was acquired in the 1991 Sunbelt acquisition and
was closed in April 1992. For the first quarter of 1995, losses
of approximately $.5 million on sales of property, plant and
equipment were included in "other expense, net." Gains of
approximately $.4 million on sales of property, plant and
equipment were included in "other expense, net" for the first
quarter of 1994.
Changes in Financial Condition:
Working capital increased $5.1 million from January 1, 1995 and
decreased $6.5 million from April 3, 1994 to April 2, 1995. The
increase from January 1, 1995 resulted principally from a
decrease in accrued interest payable. The decrease from April 3,
1994 was due principally to decreases in trade accounts
receivable and amounts due from Piedmont Coca-Cola Bottling
Partnership. The decrease in trade accounts receivable from
April 3, 1994 to April 2, 1995 was primarily due to an increase
in trade accounts receivable sold. The Company had sold trade
accounts receivable of $35 million as of April 2, 1995 and as of
January 1, 1995 compared to $31 million on April 3, 1994. It is
the Company's intent to seek renewal of this arrangement to sell
trade accounts receivable prior to the June 1995 expiration of
the current agreement.
Capital expenditures in the first quarter of 1995 were $7.6
million as compared to $14.7 million in the first quarter of
1994. Expenditures for 1995 capital additions are expected to be
lower than expenditures for 1994 capital additions.
<PAGE>
Long-term debt decreased $25 million from April 3, 1994 and
increased $3.4 million from January 1, 1995. The level of debt
as of April 3, 1994 had increased due to significant additions to
property, plant and equipment during the first quarter of 1994.
As of April 2, 1995, the Company was in compliance with all of
the covenants of its various borrowing agreements.
It is the Company's intent to renew any borrowings under its $170
million revolving credit facility and the informal lines of
credit as they mature and, to the extent that any borrowings
under the revolving credit facility, the informal lines of credit
and commercial paper program do not exceed the amount available
under the Company's $170 million revolving credit facility, they
are classified as noncurrent liabilities. As of April 2, 1995,
the Company had no amounts outstanding under the revolving credit
facility or the commercial paper program and had approximately
$97 million outstanding under the informal lines of credit.
The Company uses derivative financial instruments to modify risk
from interest rate fluctuations. Derivative financial
instruments are not used for trading purposes. As of April 2,
1995, the debt portfolio had a weighted average interest rate of
approximately 7.5% and approximately 47% of the total portfolio
of $437 million was subject to changes in short-term interest
rates.
On October 12, 1994, a $400 million shelf registration for debt
and equity securities filed with the Securities and Exchange
Commission became effective and available for issuance. As of
April 2, 1995, no securities had been issued under this shelf
registration. In any future offering under such registration,
net proceeds from sales of the securities could be used for
general corporate purposes, including repayment of debt, future
acquisitions, capital expenditures and/or working capital.
Management believes that the Company, through the generation of
cash flow from operations and the utilization of unused borrowing
capacity, has sufficient financial resources available to
maintain its current operations and provide for its current
capital expenditure requirements. The Company considers the
acquisition of additional franchise territories on an ongoing
basis.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
On February 21, 1995, Carolina Beverage Corporation ("CBC") filed a
Complaint for Declaratory Judgment in the General Court of Justice,
Superior Court Division, Rowan County, North Carolina (Docket No.
95-CVS-432) seeking a judicial interpretation of the contractual
relationship, if any, between CBC and either the Company or
Coca-Cola Bottling Co. Affiliated, Inc. ("Affiliated"), a subsidiary
of the Company, regarding the sale of CHEERWINE(R) in the Asheville,
North Carolina territory. The Court granted CBC's request for a pretrial
injunction barring the Company and Affiliated from continuing to sell
CHEERWINE(R) in the Asheville territory, finding that Affiliated would
not be irreparably harmed by the loss of its contract as it could be
compensated adequately by money damages for the value of the contract.
The Company has filed pleadings denying CBC's right to terminate the
CHEERWINE(R) License Agreement, asserting the continued existence of
the contract and claiming damages for breach of contract, unfair trade
practices and bad faith. The Company is confident in the strengths of
its case and, since CBC is now marketing CHEERWINE(R) in Affiliated's
territory, does not believe that CBC would be entitled to any damages
should it ultimately prevail. Conversely, the Company believes it would
be entitled to compensation from CBC should the Court or jury determine
that CBC wrongfully terminated Affiliated's License Agreement.
In 1994, sales of CHEERWINE(R) products represented less than 1% of the
Company's total sales volume.
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit
Number Description
10.1 Lease Agreement dated as of December 15,
1994 between the Company and BA Leasing & Capital
Corporation.
10.2 Lease Schedule No. 001 - Revised, dated
as of January 10, 1995, of a Lease Agreement dated
as of December 15, 1994 between the Company and BA
Leasing & Capital Corporation covering various
vehicles.
10.3 Lease Schedule No. 002 - Revised, dated
as of January 18, 1995, of a Lease Agreement dated
as of December 15, 1994 between the Company and BA
Leasing & Capital Corporation covering various
vehicles.
10.4 Lease Schedule No. 003, dated as of
January 31, 1995, of a Lease Agreement dated as of
December 15, 1994 between the Company and BA
Leasing & Capital Corporation covering various
vehicles.
10.5 Lease Schedule No. 004, dated as of
February 8, 1995, of a Lease Agreement dated as of
December 15, 1994 between the Company and BA
Leasing & Capital Corporation covering various
vehicles.
10.6 Lease Schedule No. 005 - Revised, dated
as of February 8, 1995, of a Lease Agreement dated
as of December 15, 1994 between the Company and BA
Leasing & Capital Corporation covering various
vehicles.
10.7 Lease Schedule No. 006 - Revised, dated
as of February 27, 1995, of a Lease Agreement
dated as of December 15, 1994 between the Company
and BA Leasing & Capital Corporation covering
various vehicles.
10.8 First Amendment to Credit Agreement,
Line of Credit Note and Mortgage, and
Reaffirmation of Term Note, Security Agreement,
Guaranty Agreement and Addendum to Guaranty
Agreement, dated as of March 31, 1995, by and
among the Company, South Atlantic Canners, Inc.
and Wachovia Bank of North Carolina, N.A.
10.9 Guaranty Agreement and Addendum, dated
as of March 31, 1995, between the Company and
Wachovia Bank of North Carolina, N.A.
10.10 Lease Funding No. 95002, dated as
of March 9, 1995, of a Master Equipment Lease
between the Company and Coca-Cola Financial
Corporation covering various vending machines.
10.11 Lease Funding No. 95003, dated as
of April 10, 1995, of a Master Equipment Lease
between the Company and Coca-Cola Financial
Corporation covering various vending machines
27 Financial data schedule for period ended
April 2, 1995.
(b) Reports on Form 8-K
None.
<PAGE>
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.
COCA-COLA BOTTLING CO. CONSOLIDATED
(REGISTRANT)
Date: May 15, 1995 By: /s/ David V. Singer
David V. Singer
Principal Financial Officer of the Registrant
and
Vice President - Chief Financial Officer
EXHIBIT 10.1
<PAGE>
L E A S E A G R E E M E N T
dated as of December 15, 1994
between
BA LEASING & CAPITAL CORPORATION
and
COCA-COLA BOTTLING CO. CONSOLIDATED
<PAGE>
CONTENTS
Parties . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1. LEASE . . . . . . . . . . . . . . . . . . . . . . . 1
1.01 Agreement to Lease . . . . . . . . . . . . . 1
1.02 Procurement . . . . . . . . . . . . . . . . . 1
1.03 Conditions Precedent . . . . . . . . . . . . 1
1.04 Lease Schedules . . . . . . . . . . . . . . . 1
2. TERM, RENT AND PAYMENTS . . . . . . . . . . . . . . 2
2.01 Term. . . . . . . . . . . . . . . . . . . . . 2
2.02 Rent . . . . . . . . . . . . . . . . . . . . 2
2.03 Payment . . . . . . . . . . . . . . . . . . . 2
2.04 Net Lease . . . . . . . . . . . . . . . . . . 2
2.05 Application of Payments . . . . . . . . . . . 3
2.06 Excessive Rent . . . . . . . . . . . . . . . 3
2.07 Advance Payments . . . . . . . . . . . . . . 3
3. WARRANTIES . . . . . . . . . . . . . . . . . . . . . 3
4. COVENANTS WITH RESPECT TO THE UNITS. . . . . . . . . 4
4.01 Use . . . . . . . . . . . . . . . . . . . . . 4
4.02 Possession . . . . . . . . . . . . . . . . . 4
4.03 Liens . . . . . . . . . . . . . . . . . . . . 4
4.04 Titling, Licensing and Registration . . . . . 4
(a) Characterization of Lease . . . . . . 4
(b) PreClosing Titling and
Registration . . . . . . . . . . . . . 5
(c) Titling and Registration of Units . . 5
(d) Delivery of Titles . . . . . . . . . . 5
(e) Ownership . . . . . . . . . . . . . 5
4.05 Maintenance . . . . . . . . . . . . . . . . . 6
4.06 Alterations . . . . . . . . . . . . . . . . . 6
4.07 Inspection . . . . . . . . . . . . . . . . . 6
5. INDEMNITIES . . . . . . . . . . . . . . . . . . . . 6
5.01 General Indemnity . . . . . . . . . . . . . . 6
5.02 General Tax Indemnity . . . . . . . . . . . . 7
5.03 Special Tax Indemnity . . . . . . . . . . . . 8
(a) Definition of Loss . . . . . . . . . . 8
(b) Payments . . . . . . . . . . . . . . . 9
(c) Timing of Payments . . . . . . . . . . 10
(d) Exceptions . . . . . . . . . . . . . . 10
(e) Computations . . . . . . . . . . . . . 11
(f) Contest . . . . . . . . . . . . . . . 11
(g) Survival . . . . . . . . . . . . . . . 12
(h) Lessor . . . . . . . . . . . . . . . . 12
6. RISK OF LOSS; CASUALTIES; INDEMNITY . . . . . . . . 12
6.01 Casualty Value Payments . . . . . . . . . . . 12
6.02 Effect of Casualty Value Payments . . . . . . 12
<PAGE>
7. INSURANCE . . . . . . . . . . . . . . . . . . . . . 13
8. DEFAULTS; REMEDIES . . . . . . . . . . . . . . . . . 13
8.01 Events of Default . . . . . . . . . . . . . . 13
8.02 Remedies . . . . . . . . . . . . . . . . . . 14
8.03 Expenses . . . . . . . . . . . . . . . . . . 15
8.04 Nonexclusive . . . . . . . . . . . . . . . . 15
8.05 Right of Lessor to Perform . . . . . . . . . 15
9. RETURN OF UNITS . . . . . . . . . . . . . . . . . . 15
10. ASSIGNMENT . . . . . . . . . . . . . . . . . . . . . 17
11. FURTHER ASSURANCES . . . . . . . . . . . . . . . . . 17
12. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . 18
12.01 Effect of Waiver . . . . . . . . . . . . . . 18
12.02 Survival of Covenants . . . . . . . . . . . . 18
12.03 Applicable Law; Severability . . . . . . . . 18
12.04 Financial Information . . . . . . . . . . . . 18
12.05 Notices . . . . . . . . . . . . . . . . . . . 18
12.06 Counterparts . . . . . . . . . . . . . . . . 18
12.07 Transaction Costs . . . . . . . . . . . . . . 19
12.08 Effect and Modification of Lease . . . . . . 19
APPENDIX
EXHIBIT A Form of Purchase Agreement Assignment
EXHIBIT B Form of Lease Schedule
EXHIBIT C Form of Bill of Sale
EXHIBIT D Form of Opinion of Counsel
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Lease No. 1994-1 (940148)
LEASE AGREEMENT (this "Lease") dated December
15, 1994 between BA LEASING & CAPITAL CORPORATION, a
California corporation ("Lessor") and COCA-COLA
BOTTLING CO. CONSOLIDATED, a Delaware corporation
("Lessee").
SECTION 1. LEASE.
1.01 Agreement to Lease. Lessor agrees to acquire
and lease to Lessee, and Lessee agrees to lease from Lessor
certain personal property (the "Units" and, individually, a
"Unit") described in the Appendix hereto (the "Appendix"), on
the terms and conditions set forth herein and in the Appendix.
1.02 Procurement. Lessee has ordered or shall order
the Units pursuant to one or more purchase orders or other
contracts of sale ("Purchase Agreements" and individually a
"Purchase Agreement") from one or more vendors ("Vendors" and
individually a "Vendor"). Lessee shall assign to Lessor all
of Lessee's right, title and interest in and to the applicable
Purchase Agreement as it relates to the Units by executing and
delivering to Lessor a Purchase Agreement Assignment
substantially in the form of Exhibit A. Lessor agrees to (a)
accept the assignment and (b) subject to Section 1.03, unless
Lessee has paid the Vendor, assume the obligations of Lessee
under the Purchase Agreement to purchase and pay for the Unit,
but no other duties and obligations thereunder. Nevertheless,
Lessee shall remain liable to Vendor in respect of its duties
and obligations in accordance with the Purchase Agreement.
Lessee represents and warrants in connection with the
assignment of any Purchase Agreement that (a) Lessee has the
right to assign the Purchase Agreement, (b) the right, title
and interest of Lessee in the Purchase Agreement so assigned
is and shall be free from all claims, liens, security
interests and encumbrances, (c) Lessee will warrant and defend
the assignment against claims and demands of all persons and
(d) the Purchase Agreement contains no conditions under which
Vendor may reclaim title to any Unit after delivery,
acceptance and payment therefor.
1.03 Conditions Precedent. The obligation of Lessor
to pay for each Unit is subject to satisfaction of the
conditions precedent set forth in the Appendix. If any of
those conditions is not met with respect to any Unit, Lessor
shall assign to Lessee all the right, title and interest of
Lessor in and to the Unit and any Purchase Agreement
theretofore assigned to Lessor, as it relates to the Unit.
1.04 Lease Schedules. Lessee shall deliver to
Lessor, not later than four business days before the relevant
Scheduling Date (as defined in the Appendix), an original
invoice for each Unit. Lessor shall then prepare and deliver
to Lessee, within two business days before such Scheduling
Date, for Lessee's signature (a) two executed counterparts of
a Lease Schedule in the form of Exhibit B (a "Schedule") and
(b) if title to any
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<PAGE>
Unit has been transferred by the applicable Vendor or Lessee
has received the Unit before executing and delivering the
relevant Purchase Agreement Assignment to Lessor, a Bill of
Sale therefor in the form of Exhibit C. Lessee shall execute
those documents and return them to Lessor not later than such
Scheduling Date. If Lessor receives those documents later than
such Scheduling Date Lessor may reject them and regenerate the
Schedule for a later Scheduling Date.
Subject to satisfaction of all applicable conditions
precedent, Lessor shall, upon receipt of such documents signed
by Lessee, execute the Schedule and pay the Vendor or Lessee,
as the case may be, the Purchase Prices of the Units described
in the Schedule, and deliver a fully signed counterpart of the
Schedule to Lessee.
SECTION 2. TERM, RENT AND PAYMENTS.
2.01 Term. The term of this Lease as to each Unit
shall begin upon its receipt by Lessee and continue as
specified in the Schedule.
2.02 Rent. Lessee shall pay to Lessor rent for each
Unit as described in the Appendix and in the amounts and at
the times set forth in the Schedule therefor.
2.03 Payment. Rent and all other sums due Lessor
hereunder shall be paid at the office of Lessor set forth
below unless otherwise specified by Lessor.
2.04 Net Lease. THIS LEASE IS A NET LEASE AND LESSEE
SHALL NOT BE ENTITLED TO ANY ABATEMENT OR REDUCTION OF RENT OR
ANY SET OFF AGAINST RENT, WHETHER ARISING BY REASON OF ANY
PAST, PRESENT OR FUTURE CLAIM OF ANY NATURE BY LESSEE AGAINST
LESSOR OR OTHERWISE. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED
HEREIN, THIS LEASE SHALL NOT TERMINATE, NOR SHALL THE
OBLIGATIONS OF LESSOR OR LESSEE BE OTHERWISE AFFECTED BY ANY
CIRCUMSTANCE, including, without limitation (a) any defect in,
damage to, loss of possession or use or destruction of any
Unit, however caused, (b) the attachment of any lien,
encumbrance, security interest or other right or claim of any
third party to any Unit, (c) any prohibition or restriction of
or interference with Lessee's use of any Unit by any person or
entity, (d) the insolvency of or the commencement by or
against Lessee of any bankruptcy, reorganization or similar
proceeding, or (e) any other cause, whether similar or
dissimilar to the foregoing, any present or future law to the
contrary notwithstanding. IT IS THE INTENTION OF THE PARTIES
THAT ALL RENT AND OTHER AMOUNTS PAYABLE BY LESSEE HEREUNDER
SHALL BE PAYABLE IN ALL EVENTS IN THE MANNER AND AT THE TIMES
HEREIN PROVIDED UNLESS LESSEE'S OBLIGATIONS IN RESPECT THEREOF
HAVE BEEN TERMINATED PURSUANT TO THE EXPRESS PROVISIONS OF
THIS LEASE.
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<PAGE>
2.05 Application of Payments. If an Event of Default
exists, payments shall be applied in the following order: (a)
any unreimbursed or unpaid expenses, including allocated time
charges of internal counsel for Lessor and any other
attorney's fees; (b) any unreimbursed or unpaid interest on
late payments; and (c) rent and all other sums due thereunder.
Payments shall be evidenced by entries in records maintained
by Lessor which shall be conclusive, absent manifest error.
2.06 Excessive Rent. If a court finally determines
Lessor has received any payments which are determined to be
interest and which result in interest charges to Lessee in
excess of the highest rate permitted by applicable law, such
payments, to the extent they result in such excess, shall be
deemed to have been payments on account of Base Rent and shall
be so credited. If such credit results in Lessee having paid
to Lessor any sum in excess of Base Rent plus interest charges
at the highest rate allowed by law, then such sum shall be
refunded to Lessee and Lessee hereby waives any further remedy
or claim against Lessor on account of Lessor having received
such sum.
2.07 Advance Payments. If any amount is received by
Lessor on or before the Scheduling Date, either as advance
rental or otherwise, such amount shall be held as security for
the performance of the terms of this Lease, and Lessor may,
but shall not be required to, apply such amount to any overdue
financial obligation of Lessee to Lessor. If such amount is
so applied, Lessee will pay the same amount to Lessor on
demand as a replacement for such amount. If Lessee is not in
default under this Lease, such amount shall be refunded upon
the request of Lessee. Lessee shall not receive any interest
on such deposits.
SECTION 3. WARRANTIES.
LESSEE ACKNOWLEDGES AND AGREES THAT (a) EACH UNIT IS OF
A SIZE, DESIGN, CAPACITY AND MANUFACTURE SELECTED BY LESSEE,
(b) LESSEE IS SATISFIED THAT THE SAME IS SUITABLE FOR ITS
PURPOSES, (c) LESSOR IS NOT A MANUFACTURER THEREOF NOR A
DEALER IN PROPERTY OF SUCH KIND AND (d) LESSOR HAS NOT MADE,
AND DOES NOT HEREBY MAKE, ANY REPRESENTATION, WARRANTY OR
COVENANT WITH RESPECT TO THE TITLE, MERCHANTABILITY,
CONDITION, QUALITY, DESCRIPTION, DURABILITY, FITNESS FOR
PURPOSE OR SUITABILITY OF ANY UNIT IN ANY RESPECT OR IN
CONNECTION WITH OR FOR THE PURPOSES AND USES OF LESSEE.
Lessor hereby assigns to Lessee, to the extent assignable, any
warranties, covenants and representations of Vendor with
respect to any Unit, but any action taken by Lessee by reason
thereof shall be at Lessee's expense and shall be consistent
with Lessee's obligations under Section 2. Any amounts
received by Lessee as payment under any such warranty shall be
applied to restore the relevant Units to the condition
required by this Lease, with the balance of such
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<PAGE>
amount, if any, to be paid over to Lessor. Lessee shall not take
any action or fail to take any action the effect of which would
be to invalidate any such warranty.
SECTION 4. COVENANTS WITH RESPECT TO THE UNITS.
4.01 Use. Lessee shall not use, operate, maintain or
store any Unit improperly, carelessly or in violation of any
applicable law or regulation of any government authority.
4.02 Possession. Lessee shall not (a) abandon any
Unit, or (b) sublease any Unit or permit its use by anyone
other than Lessee or Piedmont Coca-Cola Bottling Partnership
without the prior written consent of Lessor, not to be
unreasonably withheld. No such sublease shall relieve Lessee
of its obligations hereunder.
4.03 Liens. Lessee shall not sell, assign or
transfer, or directly or indirectly create, incur or suffer to
exist any lien, claim, security interest or encumbrance of any
kind on any of its rights hereunder or in any Unit.
4.04 Titling, Licensing and Registration.
(a) Characterization of Lease. Lessee and
Lessor agree that:
(i) For Federal income tax purposes,
this Lease is intended to be a lease of the Units,
notwithstanding (in the case of Units that are Motor
Vehicles) the Terminal Rental Adjustment and related
provisions, as a result of the provisions of Section
7701(h) of the Code;
(ii) For purposes of the Uniform
Commercial Code of each state, in the case of Units
that are Motor Vehicles, notwithstanding the Terminal
Rental Adjustment, the TRAC Amount and the Estimated
Fair Market Value, and notwithstanding the Payment
Limitation, this Lease is properly characterized, as to
such Units, as a "true lease" and, in the case of Units
that are not Motor Vehicles, this Lease is properly
characterized, as to such Units, as a "true lease"; and
(iii) For vehicle titling and
registration purposes, the characterization of this
Lease for purposes of the Uniform Commercial Code is
relevant (and characterization of this Lease for
Federal income tax purposes is irrelevant) for
determining whether any Unit that is a Motor Vehicle
should be titled or registered in the name of Lessor or
Lessee.
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<PAGE>
(b) Pre-Closing Titling and Registration.
Lessee may cause title and registration of a Motor Vehicle to
be in Lessor's name before the Scheduling Date therefor if the
expected fair market value of such Motor Vehicle at Lease
termination is substantially equal to the TRAC Amount
therefor. In such case Lessor shall be considered the nominee
for the benefit of Lessee until such Scheduling Date.
Thereafter such title shall be held as provided in Section
4.04(d). If Lessor is named as owner on any certificate of
title or registration for any Unit before its Scheduling Date,
all obligations of Lessee hereunder shall apply with respect
to such Unit, except that no rent shall accrue for such Unit
before its Scheduling Date.
(c) Titling and Registration of Units.
Unless titling and registration of a Unit in Lessor's name has
theretofore been accomplished pursuant to Section 4.04(b),
Lessee shall, at Lessee's sole cost and expense, not later
than 15 Business Days after the Scheduling Date of a Unit,
duly apply or cause application to be made to the appropriate
motor vehicle agency for a certificate of title for, and
registration of, the Unit in the name of Lessor if the
expected fair market value of such Motor Vehicle at Lease
termination is substantially equal to the TRAC Amount
therefor.
(d) Delivery of Titles. As each certificate
of title is issued, Lessee shall promptly deliver or cause to
be delivered such certificate to Lessor and in any event shall
deliver a certificate of title for each Unit to Lessor not
later than 30 days following the Unit's Scheduling Date. Upon
Lessee's purchase or sale of such Unit in accordance with Item
G of the Appendix or upon Lessor's receipt of all payments to
which it is entitled upon a Casualty Occurrence with respect
to such Unit pursuant to Section 6.01, Lessor shall, if no
Event of Default then exists, deliver such certificate of
title for such Unit to Lessee within 10 days of payment,
properly endorsed and released.
(e) Ownership. The parties intend that
this Lease is a true lease and in no event shall this
agreement be construed as a sale of the Units. Title to the
Units shall at all times remain in Lessor, and Lessee shall
acquire no ownership, title, property, right, equity, or
interest in the Units other than its leasehold interest solely
as Lessee subject to all the terms and conditions hereof.
Notwithstanding the express intent of the parties, if a court
of competent jurisdiction determines this agreement is not a
true lease, but rather one intended as security, then solely
in that event and for the expressly limited purposes thereof,
Lessee shall be deemed to have hereby granted Lessor a
security interest in the Units, and all accessions thereto,
substitutions and replacements therefore, and proceeds
(including insurance
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<PAGE>
proceeds) thereof to secure the prompt payment and performance
as and when due of all obligations and indebtedness of Lessee
to Lessor arising under this Lease.
4.05 Maintenance. Lessee shall at its expense at all
times during the term of this Lease maintain the Units in good
operating order, repair, condition and appearance and in
accordance with the manufacturer's recommended procedures.
4.06 Alterations. Lessee shall not alter any Unit or
affix or place any accessory, equipment or device on any Unit
if such alteration or addition would impair any applicable
warranty or the originally intended function or use or reduce
the value of the Unit. All repairs, parts, accessories,
equipment and devices furnished, affixed or installed to or on
any Unit, excluding temporary replacements, shall thereupon
become the property of Lessor. If no Event of Default exists,
Lessee may remove at its expense any such parts, accessories,
equipment and devices at the expiration of the term of this
Lease with respect to the Unit, if such parts, accessories,
equipment or devices are readily removable and such removal
will not impair the originally intended function or use of the
Unit.
4.07 Inspection. Upon prior notice to Lessee, Lessor
and its designees shall have the right at all reasonable times
to inspect any Unit, observe its use and inspect records
related thereto.
SECTION 5. INDEMNITIES.
5.01 General Indemnity. Lessee waives and releases
any claim now or hereafter existing against Lessor, any
company controlled by, controlling, or under common control
with Lessor and all of their directors, officers, employees,
agents, attorneys, successors and assigns (each, an
"Indemnified Person") on account of, and shall indemnify,
reimburse and hold each Indemnified Person harmless from, any
and all claims (including, but not limited to, claims based on
or relating to copyright, trademark or patent infringement,
environmental liability, negligence, strict liability in tort,
statutory liability or violation of laws), losses, damages,
obligations, penalties, liabilities, demands, suits, judgments
or causes of action, and all legal proceedings, and any
reasonable costs or expenses in connection therewith,
including reasonable attorneys' fees, including reasonable
allocated time charges of internal counsel, in each case
imposed on, incurred by or asserted against the Indemnified
Person in any way relating to or arising in any manner out of
(a) the registration, purchase, taking or foreclosure of a
security interest in, or the ownership, delivery, condition,
lease, assignment, storage, transportation, possession, use,
operation, return, repossession, sale or other disposition of,
any Unit, before or
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<PAGE>
during the term of this Lease as to the Unit, (b) any alleged
or actual defect in any Unit (whether arising from the material
or any article used therein, the design, testing, use,
maintenance, service, repair, or overhaul thereof or otherwise),
regardless of when such defect is discovered or alleged, whether
or not the Unit is in Lessee's possession and no matter where
it is located, or (c) this Lease or any other related document,
the enforcement hereof or thereof or the consummation of the
transactions contemplated hereby or thereby. Notwithstanding
the foregoing, this Section 5.01 will not apply to any claims
resulting solely and primarily from any breach by Lessor of
its obligations hereunder.
5.02 General Tax Indemnity.
(a) Lessee shall pay or reimburse Lessor for,
and indemnify and hold Lessor harmless from, all fees
(including, but not limited to, license, documentation,
recording or registration fees), and all sales, use, gross
receipts, property, occupational, value-added or other taxes,
levies, imposts, duties, assessments, charges or withholdings
of any nature whatsoever, together with any penalties, fines
or additions to tax, or interest thereon (all of the foregoing
being hereafter referred to as "Impositions"), arising at any
time before or during the term of this Lease, or upon any
termination of this Lease or return of the Units to Lessor,
and levied or imposed on Lessor, directly or otherwise, by any
federal, state or local government or taxing authority in the
United States or by any foreign country or foreign or
international taxing authority on or with respect to (i) any
Unit, (ii) the exportation, importation, registration,
purchase, ownership, delivery, leasing, possession, use,
operation, storage, maintenance, repair, transportation,
return, sale, transfer of title or other disposition thereof,
(iii) the rents, receipts, or earnings arising from any Unit,
or (iv) this Lease or any payment made hereunder, excluding,
however, taxes measured by Lessor's net income imposed or
levied by the United States or any state thereof but not
excluding any such net income taxes that by the terms of the
statute imposing such tax expressly relieve Lessee or Lessor
from the payment of any Impositions Lessee would otherwise
have been obligated to pay, reimburse or indemnify.
(b) Lessor shall pay directly all Impositions
for which Lessor is primarily responsible and as to which
Lessor gives Lessee notice Lessor will pay directly; and
Lessee shall promptly reimburse Lessor for such Impositions so
paid (except any Impositions excluded by Section 5.02(a)) upon
presentation of a bill therefor.
(c) Lessee shall pay on or before the time or
times prescribed by law any Impositions for which Lessee is
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<PAGE>
primarily responsible under applicable law and any other
Impositions (except any Impositions excluded by Section
5.02(a)) not payable by Lessor pursuant to Section 5.02(b),
but Lessee shall have no obligation to pay any such Imposition
while Lessee is contesting such Imposition in good faith and
by appropriate legal proceedings and the nonpayment thereof
does not, in the opinion of Lessor, adversely affect the
title, property, use, disposition or other rights of Lessor
with respect to the Units. Lessee shall furnish on Lessor's
request proof of payment of any Imposition paid by Lessee.
(d) If Lessor is not entitled to a
corresponding and equal deduction with respect to any
Imposition Lessee is required to pay or reimburse under
Section 5.02(a), (b) or (c) and the payment or reimbursement
constitutes income to Lessor, then Lessee shall also pay to
Lessor the amount of any Imposition Lessor is obligated to pay
in respect of (i) such payment or reimbursement by Lessee and
(ii) any payment by Lessee made pursuant to this Section
5.02(d).
(e) Lessor shall prepare and file all
required property tax reports or returns as "Owner" of the
Units but Lessee must timely provide Lessor with all
information that Lessor requires to prepare properly any such
report or return. Lessee shall report the Units as "Equipment
Leased from Others" on any property tax reports or returns
required to be filed by Lessee. Lessee shall furnish on
Lessor's request copies of reports or returns so filed.
5.03 Special Tax Indemnity.
(a) Definition of Loss. For all Federal,
state and local income tax purposes, if for any reason:
(i) Depreciation. Lessor is not
entitled to annual accelerated cost recovery deductions
("Depreciation Deductions") for each Unit as provided
by Section 168(a) of the Internal Revenue Code of 1986,
as amended (the "Code") based on (A) a basis for
depreciation equal to the Purchase Price of the Unit,
(B) use of the 200% declining balance method, switching
to the straight-line method as provided in Section
168(b)(1) of the Code, (C) a recovery period of three
years, in the case of Units that are over-the-road
tractors, and five years, in the case of all other
Units, as provided in Section 168(c) of the Code, (D) a
salvage value equal to zero and (E) the half-year
convention;
(ii) Inclusions. Lessor is required to
include in gross income (an "Inclusion") any amount
with respect to the Lease other than (A) Supplemental
Rent, Interim Rent, Base Rent and rent payable with
respect to
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<PAGE>
any extension of the term of the Lease, (B) any commitment
fee and nonutilization fee payable under the Lease,
(C) any amounts payable with respect to a casualty with
respect to any Unit or any other event giving rise to a
payment of Casualty Value or an amount determined by
reference thereto, (D) any amounts payable with respect
to an election to purchase the Units, (E) any amounts
payable as interest on overdue payments, and (F) the
amount of any indemnity payment; in each case at the
time and in the amount each such payment accrues under
the terms of the Lease; or
(iii) Foreign Tax Credits. Lessor's
federal income tax liability is increased as a result
of a reduction in the foreign tax credits available for
utilization by Lessor;
(any of the foregoing being a "Loss"), then, except as
provided in Section 5.03(d), Lessee shall indemnify Lessor
with respect to such Loss by making payments in the amounts
and at the times specified herein. Any Loss suffered for
federal income tax purposes will be deemed to give rise to a
corresponding loss for state and local income tax purposes,
and no Loss will be considered suffered for state and local
income tax purposes unless there is a corresponding Loss for
federal income tax purposes.
(b) Payments.
(i) Lessee's Payments. If a Loss
occurs, Lessee shall pay Lessor an amount which, after
reduction by the net amount of all additional taxes
payable by Lessor in respect of the receipt or accrual
of such amount under the laws of the United States and
California (the amount of such taxes to be computed
assuming Lessor is subject to the highest marginal
Federal and California statutory rate for income or
franchise taxes then generally applicable to
corporations), is equal to the sum of (A) the net
additional Federal income taxes payable by Lessor as a
result of such Loss, plus (B) any interest, penalties
or additions to tax payable by Lessor as a result of
such Loss, such sum to be determined (1) in the case of
loss of a Depreciation Deduction, by assuming that
Lessor's combined marginal federal, state and local
income tax rate will be 40.2%, (2) in the case of an
Inclusion, by assuming Lessor is subject to the highest
marginal Federal and California statutory rate for
income or franchise taxes then generally applicable to
corporations and (3) in the case of a loss of foreign
tax credits, by assuming Lessor can fully and currently
utilize all
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available credits for foreign taxes to reduce its federal
income tax liability.
(ii) Lessor's Payments. Lessor shall
pay Lessee an amount equal to the sum of (i) the net
reduction in Federal income taxes, if any, realized by
Lessor attributable to any Loss or circumstances
resulting in a Loss, such sum to be determined
utilizing the rates set forth in Section 5.03(b)(i)(1)
or (2), as applicable, and (ii) the net amount of any
additional reduction in Federal and California income
and franchise taxes, if any, realized by Lessor as a
result of any payment pursuant to this sentence.
However, the aggregate amount paid by Lessor to Lessee
hereunder with respect to any Loss shall not exceed the
aggregate amount paid by Lessee to Lessor with respect
to such Loss.
(c) Timing of Payments.
(i) Time of Lessee's Payments. Any
amount payable to Lessor shall be paid within 30 days
after written notice to Lessee by Lessor that a Loss
has occurred (which notice shall describe the Loss in
reasonable detail and set forth the computation of the
amount payable). The time at which a Loss occurs shall
be deemed to be the date the additional Federal income
taxes resulting from the Loss would become due under
the assumptions set forth in paragraph (e).
(ii) Time of Lessor's Payments. Any
amount payable to Lessee shall be paid within 30 days
after the date on which Lessor would realize the
reduction in Federal income tax under the assumptions
set forth in paragraph (e), and shall be accompanied by
a written statement describing the computation of the
amount so payable as determined by Lessor.
(d) Exceptions. Lessee shall not be required
to make any payment hereunder in respect of any Loss that
results solely from one or more of the following causes:
(i) the failure of Lessor to have
sufficient taxable income to benefit from the
depreciation deductions described in paragraph 1;
(ii) the failure of Lessor to claim
timely or properly any tax benefit or treatment
referred to in paragraph 1 in a tax return of Lessor,
unless such failure is based on a good faith
determination of Lessor that it is not entitled to
claim such tax benefit or treatment;
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(iii) a voluntary disposition by Lessor
of all or any part of its interest in a Unit before any
default by Lessee;
(iv) any event giving rise to a payment
of Casualty Value or an amount determined by reference
thereto, but only if such payment has been made in
full;
(v) a foreclosure of a lien on any
Unit by any person holding such lien through Lessor
which foreclosure results solely from an act of Lessor;
or
(vi) the failure of Lessor to qualify
for the half-year convention provided by Code
(section indicator)168(d)(1).
(e) Computations. Whenever it may be
necessary to determine (i) whether there has been a Loss or
(ii) the amount of any payment required to be made hereunder
by either Lessee or Lessor, such determination shall be made
assuming (A) Lessor could fully benefit from any deductions
and would suffer the full detriment of any additional income,
(B) Lessor pays its annual federal income and state and local
franchise or income taxes on quarterly estimated payment dates
in accordance with the following schedule: 25% of the total
income taxes for each year is paid on each April 15, June 15,
September 15 and December 15 of the year with respect to which
such taxes are imposed ("Estimated Tax Payment Dates") and (C)
Lessor will compute its taxable income under the accrual
method of accounting.
(f) Contest.
(i) Lessor shall have no obligation to
contest any disallowance or adjustment or other action
that may result in a Loss unless: (A) Lessor receives
a written notification by any taxing authority of a
proposed disallowance or adjustment (a "Disallowance"),
(B) Lessee requests Lessor to contest the Disallowance
within 45 days after Lessor has notified Lessee thereof
and within 60 days thereafter delivers to Lessor an
opinion of tax counsel satisfactory to Lessor that
Lessor should prevail in the contest, (C) Lessee
promptly pays the amount required under paragraph 2 if
Lessor elects to pay the tax and sue for a refund,
(D) the amount at issue in such contest exceeds
$100,000, and (E) Lessee fully indemnifies Lessor for
the tax and for all costs and expenses incurred by
Lessor in connection with such contest including
allocated time charges of internal counsel for Lessor
and any other reasonable attorney's fees and expenses,
and promptly reimburses Lessor for all such costs and
expenses as incurred.
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(ii) Lessor shall have the right to
control the conduct of the contest of any proposed
adjustment; provided, however, that Lessee shall be
kept informed of the status of such contest and shall
have the right to participate in the conduct of such
contest. If, in the course of contesting any claim
referred to in this Section 5.03, the Internal Revenue
Service advises Lessor that it is willing to agree to a
settlement of such claim, Lessor shall notify Lessee of
such settlement proposal. If, after receipt of such
notice, Lessee so requests, and such settlement
proposal relates exclusively to a Loss indemnifiable by
Lessee hereunder for which Lessee has acknowledged its
liability hereunder, Lessor shall agree to the
settlement as proposed by the Internal Revenue Service
and described to Lessee. At any time, Lessor may agree
to a settlement proposal, without Lessee's approval or
consent, by notifying Lessee in writing that Lessor has
waived its right to indemnity with respect to such
settlement.
(g) Survival. All of Lessor's rights and
privileges arising from the indemnities contained herein shall
survive the expiration or other termination of this Lease.
(h) Lessor. For purposes of this Income Tax
Indemnity, "Lessor" shall include any affiliated group (within
the meaning of Section 1504 of the Code) of which Lessor is or
becomes a member for any year in which a consolidated income
tax return is filed for such affiliated group.
SECTION 6. RISK OF LOSS; CASUALTIES; INDEMNITY.
6.01 Casualty Value Payments. If any Unit is worn
out, lost, stolen, destroyed, or irreparably damaged, from any
cause whatsoever, or taken or requisitioned by condemnation or
otherwise (any such occurrence being hereinafter called a
"Casualty Occurrence") before or during the term of this Lease
as to such Unit, Lessee shall give Lessor prompt notice
thereof, but in event not later than 10 days after Lessee is
reasonably able to determine that a Casualty Occurrence
occurred. On the first rent payment date after the Casualty
Occurrence or, if there is no such rent payment date, 30 days
after the Casualty Occurrence, Lessee shall pay to Lessor an
amount equal to the rent payment in respect of such Unit, if
any, due on such date plus a sum equal to the Casualty Value
for the Unit as of such date, determined according to the
Appendix.
6.02 Effect of Casualty Value Payments. Upon the
making of such payment by Lessee in respect of any Unit, the
rent for the Unit shall cease to accrue, the term of this
Lease as to the Unit shall terminate and Lessor shall be
entitled to recover possession of the Unit. If Lessor
receives the Casualty
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Value for a Unit, Lessee shall be entitled to the proceeds of
any recovery in respect of the Unit from insurance or otherwise.
Except as provided in this Section 6.02, Lessee shall not be
released from its obligations hereunder in the event of, and
shall bear the risk of, any Casualty Occurrence to any Unit
before or during the term of this Lease with respect to the Unit.
SECTION 7. INSURANCE.
Lessee, at its own cost and expense, shall keep the
Units insured against all risks for the value of the Units and
in no event for less than the Casualty Value of the Units.
Notwithstanding the foregoing, if no Event of Default exists,
Lessee may self-insure with respect to the insurance required
in the preceding sentence. Lessee shall maintain public
liability insurance against such risks in amounts not less
than $5 million combined single limit. All such insurance
shall be in such form as Lessor shall approve, with
financially sound and reputable independent insurers, shall
specify Lessor and Lessee as insurers and shall provide that
such insurance may not be canceled as to Lessor or altered in
any way that would affect the interest of Lessor without at
least 30 days prior written notice to Lessor. All insurance
shall be primary, without right of contribution from any other
insurance carried by Lessor, shall contain a "breach of
warranty" provision satisfactory to Lessor, and shall provide
that all amounts payable by reason of loss or damage to all
the Units shall be payable solely to Lessor. Lessee shall
provide Lessor with evidence satisfactory to Lessor of the
required insurance at the time specified in Item B, Paragraph
2 of the Appendix.
SECTION 8. DEFAULTS; REMEDIES.
8.01 Events of Default. The following shall
constitute events of default ("Events of Default") hereunder:
(a) Lessee fails to make any payments to
Lessor within 10 days of the date when due hereunder;
(b) Any representation or warranty of Lessee
contained herein or in any document furnished to Lessor in
connection herewith is incorrect or misleading in any material
respect when made and is not corrected (if capable of being
corrected) within 10 days after notice thereof from Lessor to
Lessee;
(c) Lessee fails to observe or perform any
other covenant, agreement or warranty made by Lessee hereunder
and such failure continues for 10 days after written notice
thereof to Lessee;
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(d) Any default occurs under any other
agreement for borrowing money or receiving credit under which
Lessee or any guarantor or general partner of Lessee may be
obligated as borrower, lessee or guarantor, if such default
consists of the failure to pay any indebtedness when due or
perform any other obligation thereunder if such default gives
the holder of the indebtedness the right to accelerate the
indebtedness; provided, that if the default under such other
agreement is cured or waived by the parties thereto, default
under this subsection (d) shall be deemed likewise to have
been thereupon cured or waived;
(e) Lessee, any guarantor of this Lease or
any general partner of Lessee makes an assignment for the
benefit of creditors or files any petition or action under any
bankruptcy, reorganization, insolvency or moratorium law, or
any other law or laws for the relief of, or relating to,
debtors;
(f) Any involuntary petition is filed under
any bankruptcy statute against Lessee, any guarantor of this
Lease or any general partner of Lessee, or any receiver,
trustee, custodian or similar official is appointed to take
possession of the properties of Lessee, any guarantor of this
Lease or any general partner of Lessee, unless such petition
or appointment is set aside or withdrawn or ceases to be in
effect within 60 days from the date of the filing or
appointment; or
(g) Lessee, any guarantor of this Lease or
any general partner of Lessee liquidates, dissolves, dies or
enters into any partnership, joint venture (other than in its
ordinary course of business), consolidation, merger or other
combination, or sells, leases or disposes of a substantial
portion of its business or assets; provided that the foregoing
shall not apply to the participation in a joint venture or
partnership for the expansion of Lessee's bottling business or
a consolidation, merger or other combination in which Lessee
is the survivor.
8.02 Remedies. If any Event of Default occurs,
Lessor, at its option, may:
(a) proceed by appropriate court action or
actions either at law or in equity, to enforce performance by
Lessee of the applicable covenants of this Lease or to recover
damages for the breach thereof; or
(b) by notice in writing to Lessee terminate
this Lease, whereupon all rights of Lessee to use the Units
shall terminate, but Lessee shall remain liable as hereinafter
provided; and thereupon Lessor may enter upon the premises of
Lessee or other premises where any of the Units may be and
take possession of all or any of such Units and thenceforth
hold the same free from any right of Lessee, its successors or
assigns,
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but Lessor shall, nevertheless, have a right to recover from
Lessee any and all amounts that under the terms of this Lease
may be then due or that may have accrued to the date of such
termination (computing the rent for any number of days less
than a full rent period by multiplying the rent for such full
rental period by a fraction of which the numerator is such
number of days and the denominator is the total number of days
in such full rent period) and also to recover forthwith from
Lessee: (i) as damages for loss of the bargain and not as a
penalty, a sum, with respect to each Unit, that equals (x) the
present value, at the time of such termination, of the entire
unpaid balance of all rent for the Unit that would otherwise
have accrued hereunder from the date of such termination to the
end of the term of this Lease as to such Unit minus (y) the
then present value of the rent Lessor reasonably estimates to be
obtainable for the Unit during such period, such present value
to be computed in each case by discounting at a rate equal to
the then judgment rate of interest fixed under California law,
compounded at the same frequency as rent is payable hereunder,
from the respective dates upon which rent would have been
payable hereunder had the Lease not been terminated and (ii)
any damages and expenses in addition thereto that Lessor sustains
because of the breach of any covenant, representation or warranty
contained in this Lease other than for the payment of rent.
Lessee hereby waives any rights now or hereafter
conferred by statute or otherwise that may require Lessor to
sell, lease or otherwise use any Unit in mitigation of
Lessor's damages upon any default by Lessee, except as may be
set forth in this Section 8.02, or that may otherwise limit or
modify any of Lessor's rights or remedies under Section 8.02.
8.03 Expenses. Lessee agrees to pay all reasonable
allocated time charges, costs and expenses of internal counsel
for Lessor and any other reasonable attorneys' fees, expenses
or out-of-pocket costs incurred by Lessor in enforcing this
Lease.
8.04 Nonexclusive. The remedies herein provided in
favor of Lessor shall not be deemed exclusive, but shall be
cumulative, and shall be in addition to all other remedies in
its favor existing at law or in equity.
8.05 Right of Lessor to Perform. If Lessee fails to
perform any of its agreements contained herein, Lessor may
perform such agreement, and Lessee shall pay the reasonable
expenses incurred by Lessor in connection with such
performance, upon demand.
SECTION 9. RETURN OF UNITS.
Upon expiration of the term of this Lease in respect of
each Unit, or if Lessor rightfully demands possession of a
Unit
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pursuant to this Lease or otherwise, Lessee, at its expense,
shall forthwith deliver possession of the Unit to Lessor,
together with its manuals and maintenance records, in the
condition required by Section 4 and any additional requirements
specified in the Appendix. Upon such return the Unit shall be
free and clear of all liens, encumbrances or rights of others
whatsoever. Lessee shall, by whichever of the following means
Lessor may specify (after first storing the Unit, at Lessor's
request, at the place where the Unit is to be located hereunder,
free of charge for a period not to exceed 9O days, during which
time Lessor will be allowed reasonable access thereto) deliver
the Unit to Lessor in the continental United States as follows:
(i) at Lessee's premises; (ii) at Lessee's expense to such place
as Lessor shall specify; or (iii) the loading of the Unit on
board such carrier and to such destinations as Lessor may
designate with freight charges prepaid by Lessee. If the Unit
is shipped pursuant to clause (i) of the preceding sentence,
Lessee shall obtain and pay for a policy of transit insurance
in an amount equal to the replacement value of the Unit and
Lessor shall be named as the Loss payee on all such policies
of insurance. Lessor shall have the right to inspect the Unit
before or after its return, and Lessee shall pay the reasonable
costs of such inspection if the Unit is not in the condition
required by this Lease. In addition, if repairs are made
necessary, in the reasonable opinion of Lessor, to place the
Unit in the condition required by this Lease, Lessee agrees to
pay the cost of such repairs and further agrees to pay Lessor
rent for the period of time reasonably necessary to accomplish
such repairs, based on a daily pro-rated amount of the previous
rent. Rent shall accrue at a daily pro-rated amount of the
previous rent, for each day that Lessee does not return the
Unit as required, but such payment of rent does not extend the
term of this Lease.
Each Motor Vehicle Unit returned to Lessor pursuant to
this Section 9 shall have (a) at least 50% original tread on
all tires, which may not include recapped tires, except that
if technology regarding recapped tires has significantly
improved since the date hereof, Lessor may, in its reasonable
discretion, accept recapped tires; (b) all cargo boxes
substantially air and water tight; (c) no promotional decals
or cracked or broken glass, except for minor chips and cracks
that do not materially reduce the value or utility of the
particular Units involved; (d) the engine, transmission and
drive train in roadworthy condition and the remainder of the
Unit in good operating condition, capable of performing its
originally intended use; (e) all operating components of each
Unit able to perform their function as originally intended;
(f) all mechanical and electrical equipment, including radios,
heaters, and air conditioners in proper operating condition;
and (g) no damage to all other exterior and interior
materials, the cost of repairs of which, taken together,
exceed $500 per Unit, and otherwise,
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ordinary wear and tear resulting from ordinary use in the rental
market alone excepted, in the same condition as when delivered
to Lessee hereunder. But such ordinary wear and tear exception
shall not derogate from the specific requirements of this Section
9. Upon the return of any Unit to Lessor, Lessee will, at
Lessor's request, promptly deliver to Lessor all maintenance
records as kept by Lessee or Lessee's affiliates in the normal
course of business, repair orders, license plates, registration
certificates and all other similar documents for the Unit, in
their entirety.
If the proceeds of sale of any Motor Vehicle Unit
received by Lessor under paragraph 2 of Item E of the Appendix
at the scheduled expiration of the Lease term of the Unit (net
of sales costs and any applicable taxes) and any Terminal
Rental Adjustment payment by Lessee with respect to the Unit
equals or exceeds the TRAC Amount for the Unit, then Lessee
shall have no liability under this Section 9.
SECTION 10. ASSIGNMENT.
Lessor may at any time assign or transfer all of the
right, title or interest of Lessor in and to this Lease, and
the rights, benefits and advantages of Lessor hereunder,
including the rights to receive payment of rent or any other
payment hereunder and Lessor's title to the Units and any and
all obligations of Lessor in connection herewith, (a) in the
case of an assignment or transfer to a party who is at the
time a creditor of Lessee, without Lessee's consent and (b) in
all other cases, with the consent of Lessee, not to be
unreasonably withheld. Lessor may, subject to obtaining an
appropriate confidentiality agreement therefrom, disclose to
any potential or actual assignee or transferee any information
in Lessor's possession relating to Lessee or the Lease. Any
such assignment or transfer shall be subject and subordinate
to this Lease and the rights and interests of Lessee
hereunder. NO ASSIGNMENT OF THIS LEASE OR ANY RIGHT OR
OBLIGATION HEREUNDER MAY BE MADE BY LESSEE OR ANY ASSIGNEE OF
LESSEE WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR.
SECTION 11. FURTHER ASSURANCES.
Lessee confirms there is no pending litigation, tax
claim, proceeding or dispute that may materially adversely
affect its financial condition or impair its ability to
perform its obligations hereunder. Lessee will, at its
expense, maintain its legal existence in good standing and do
any further act and execute, acknowledge, deliver, file,
register and record any further documents Lessor may
reasonably request in order to protect Lessor's title to the
Units and Lessor's rights and benefits under this Lease.
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SECTION 12. MISCELLANEOUS.
12.01 Effect of Waiver.
No delay or omission to exercise any right, power or
remedy accruing to Lessor upon any breach or default of Lessee
hereunder shall impair any such right, power or remedy nor
shall it be construed to be a waiver of any such breach or
default, or an acquiescence therein or of or in any similar
breach or default thereafter occurring, nor shall any waiver
of any single breach or default be deemed a waiver of any
other breach or default theretofore or thereafter occurring.
Any waiver, permit, consent or approval of any kind or
character on the part of Lessor of any breach or default under
this Lease must be in writing specifically set forth.
12.02 Survival of Covenants. All obligations of
Lessee under Sections 1, 2, 4, 5, 6, 7, 8, 9 and 11 and the
Appendix shall survive the expiration or termination of this
Lease to the extent required for their full observance and
performance.
12.03 Applicable Law; Severability. This Lease shall
be governed by and construed under the laws of California, to
the jurisdiction of which, and of federal courts in
California, the parties hereto submit. If any provision
hereof is held invalid, the remaining provisions shall remain
in full force and effect.
12.04 Financial Information. Lessee shall, and shall
cause any Guarantor to, keep its books and records in
accordance with generally accepted accounting principles and
practices consistently applied and shall, and shall cause any
Guarantor to, deliver to Lessor such financial statements and
information as may be set forth in the Appendix or as Lessor
may reasonably request. Credit information relating to
Lessee, any guarantor or general partner of Lessee may be
disseminated among Lessor and any of its affiliates and any of
their respective successors and assigns.
12.05 Notices. All demands, notices and other
communications hereunder shall be in writing and shall be
deemed to have been duly given when personally delivered, or
when deposited in the mail, first class postage prepaid, sent
by or delivered to a telegraph office, charges prepaid, or by
telecopier, followed by delivery of a copy thereof by mail or
telegram as aforesaid, addressed to each party at the address
set forth below the signature of such party on the signature
page, or at such other address as may hereafter be furnished
in writing by such party to the other.
12.06 Counterparts. Two counterparts of this Lease
have been executed by the parties hereto. One counterpart has
been prominently marked "Lessor's Copy". One counterpart has
been
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prominently marked "Lessee's Copy". Only the counterpart marked
"Lessor's Copy" shall evidence a monetary obligation of Lessee.
12.07 Transaction Costs. Lessee shall reimburse
Lessor for any reasonable legal expenses of Lessor (including
allocated time charges of internal counsel for Lessor) in
connection with negotiating, drafting or altering this Lease
and any related documents.
12.08 Effect and Modification of Lease. This Lease
exclusively and completely states the rights of Lessor and
Lessee with respect to the leasing of the Units and supersedes
all prior agreements, oral or written, with respect thereto.
No variation or modification of this Lease shall be valid
unless in writing.
(The initials BBJ appear here)
(LESSEE'S INITIALS)
LESSEE'S COPY
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The parties hereto have executed this Lease Agreement
as of the day and year first above written.
BA LEASING & CAPITAL COCA-COLA BOTTLING
CORPORATION CO. CONSOLIDATED
By: (Signature of Sonia Delen By:(Signature of Brenda B. Jackson
appears here) appears here)
Title: Assistant Vice President Title: Vice President & Treasurer
By: (Signature of Gail D. Smedal P.O. Box 31487
appears here) Charlotte, NC 28231-1487
Title: Vice President
Four Embarcadero Center
Suite 1200
San Francisco, CA 94111
Attn: Contract Administration
Fax #: 415/765-7373 Fax #: 704-551-4451
LESSEE CERTIFIES, UNDER PENALTY OF PERJURY, THAT (1)
IT INTENDS THAT MORE THAN 50% OF THE USE OF THE UNITS THAT ARE
MOTOR VEHICLES IS TO BE IN ITS TRADE OR BUSINESS, AND (2) IT
HAS BEEN ADVISED THAT IT WILL NOT BE TREATED AS OWNER OF SUCH
UNITS FOR FEDERAL INCOME TAX PURPOSES.
COCA-COLA BOTTLING CO. CONSOLIDATED
By Brenda B. Jackson
Title Vice President & Treasurer
LESSEE'S COPY
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Lease No. 1994-1 (940148)
APPENDIX TO LEASE AGREEMENT dated as
of December 15, 1994 between BA LEASING &
CAPITAL CORPORATION and COCA-COLA BOTTLING
CO. CONSOLIDATED.
A. Units.
The Units to be leased hereunder consist of new personal
property comprising OTR Tractors ("Type A Units"), OTR Trailers
("Type B Units"), Route Equipment ("Type C Units"), Vending Trucks
("Type D Units") and Forklifts ("Type E Units"), and all
modifications, replacements and substitutions thereof and
therefor; provided that Lessor reserves the right to disapprove
any equipment for leasing hereunder. The Type A, B, C and D Units
are sometimes referred to in this Lease as the "Motor Vehicles",
and individually, a "Motor Vehicle".
B. Purchase Price; Conditions Precedent.
1. "Purchase Price" with respect to each Unit means the
amount Lessor pays for such Unit. Without the prior written
consent of Lessor, the sum of the Purchase Price of all Units
leased hereunder shall not exceed $12,149,500 (the "Maximum
Purchase Price"), the Purchase Price of each Unit shall not
exceed, in the case of new equipment, the amount invoiced by
Vendor therefor and, in the case of used equipment, the fair
market value for similar used equipment, and the aggregate amount
of installation, transportation and any similar costs with respect
to any Unit shall not exceed 20% of the total Purchase Price for
the Unit.
In no event will any Schedule contain Units with an
aggregate Purchase Price of less than $5,000.
2. The obligation of Lessor to pay for each Unit is
subject to satisfaction of the following conditions precedent:
(a) Lessee shall have executed and delivered to
Lessor the Schedule therefor as required under Section 1.03 of the
Lease;
(b) Lessor shall have received a duly executed bill
of sale for the Unit, if required by Section 1.04 of the Lease;
(c) its Delivery Date shall be during the
Utilization Period set forth below;
(d) there shall exist no Event of Default nor any
event which, with notice or lapse of time or both, would become an
Event of Default (a "Default");
(e) Lessor shall have received satisfactory evidence
that Lessor has been named as owner or lien holder (as required by
Section 4.04 of the Lease) on all vehicle title or registration
documents;
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(f) delivery to Lessor, no later than the first
assignment by Lessee of a Purchase Agreement hereunder (or, in the
case of a sale and leaseback, the first Delivery Date), at
Lessee's sole expense, the following documents, in form and
substance satisfactory to Lessor:
(i) evidence of Lessee's authority to enter into
and perform its obligations under this Lease and of the
incumbency of the person or persons authorized to execute
and deliver this Lease and any other agreement or document
required hereunder, including specimen signatures of such
persons;
(ii) certificates of insurance, together with loss
payable and other endorsements complying with, or other
evidence acceptable to Lessor that Lessee has complied
with, Section 7 of the Lease;
(iii) UCC financing statements executed by Lessee,
together, at Lessor's option, with certificates of filing
officers as to the nonexistence of any prior UCC filings;
(iv) an opinion of counsel, substantially in the
form of Exhibit D; and
(v) any other documents as Lessor may reasonably
request.
C. Term.
The lease term for each Unit shall consist of an Interim
Term followed immediately by a Base Term. The Interim Term for
each Unit shall commence on, and include, the date of its receipt
by Lessee and shall continue until, but not include, its Base
Date. The Base Term of each Unit shall commence on, and include
its Base Date and shall continue for the number of months
specified in Attachment 1 to this Appendix. The Base Date for
each Unit shall be on the first or fifteenth day of the month, as
specified by Lessor, not more than three months following the
Scheduling Date. The Base Date shall not be earlier than the
later of the Delivery Date and the date the Unit is placed in
service by Lessor within the meaning of the Internal Revenue Code.
However, if Lessee does not deliver the Schedule to Lessor as
required by Section 1.03, Lessor may either terminate this Lease
as to such Unit or reschedule the Base Date to the next succeeding
month, in which event the provisions of this sentence shall
continue to apply.
D. Utilization Period.
All Delivery Dates for Units leased hereunder must occur
between the date of this Lease and December 31, 1995, inclusive
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which date may be extended by Lessor by notice to Lessee (the
"Utilization Period").
E. Rent.
1. Base Rent. Lessee shall pay rent for the use of
each Unit during the Base Term ("Base Rent") in arrears in
consecutive quarterly installments, with the first such
installment due three months following the Base Date. Each Base
Rent installment for each Unit will be an amount equal to the
relevant percentage of the Purchase Price of the Unit specified
below (the "Indicative Base Rent Rate"), which rate will be
adjusted corresponding to changes in the Index Rate four business
days before the Scheduling Date. Unless the Index Rate is more
than .125 percentage points different than the Indicative Index
Rate shown on Attachment 1 to this Appendix, there will be no
adjustment in the Base Rent. However, if the Index Rate four
business days before the Scheduling Date is more than .125
percentage points higher or lower, an adjustment will be made to
preserve Lessor's Economics.
"Scheduling Date" of each Unit means the date on
which the item of Unit is paid for by the Lessor.
"Index Rate" means the bond-equivalent yield per
annum for U.S. Treasury Notes specified on Attachment 1 to this
Appendix, as published in the Wall Street Journal four business
days before the Scheduling Date.
"Lessor's Economics" shall mean Lessor's anticipated
nominal after tax multiple-investment-sinking-fund yield
incorporating the same assumptions as were utilized by Lessor in
calculating the Indicative Base Rents.
2. Terminal Rental Adjustment. If the proceeds (net
of applicable taxes, sale costs and costs of warranty transfer)
received by Lessor from the sale of any Unit that is a Motor
Vehicle, (in the case of sale to a third party) or the fair market
sale value determined pursuant to Item (G) (in the case of a sale
to Lessee) are less than the TRAC amount for such Unit, Lessee
shall promptly pay to Lessor, upon demand, an amount equal to the
difference between (i) the TRAC Amount for such Unit set forth in
Attachment 1 to this Appendix and (ii) the net proceeds from such
sale actually received by or for the account of Lessor. If any
Unit that is a Motor Vehicle is sold after the scheduled
expiration of this Lease at a price exceeding the TRAC Amount for
such Unit, then Lessor shall promptly pay to Lessee an amount
equal to the amount by which the net proceeds from such sale
actually received by or for the account of Lessor exceeds the TRAC
Amount for such Unit. Any payment under this Item shall be
considered a terminal rental adjustment ("Terminal Rental
Adjustment"). However, for Type A Units the deficiency shall not
exceed 10.34% of the Purchase Price thereof. Lessee hereby
represents that this limitation on Lessor's
-3-
<PAGE>
recourse will not disqualify this transaction for treatment
under the TRAC lease provisions of the Code.
Lessor and Lessee intend this Lease to be a
"qualified motor vehicle operating agreement" as to the Units
containing a "Terminal Rental Adjustment", all within the meaning
of section 7701(h), or any successor section, of the Internal
Revenue Code.
F. Location; Return Condition; Casualty Values
1. Location. The Units shall be titled in the states
of Alabama, Florida, Georgia, Kentucky, Mississippi, North
Carolina, Ohio, South Carolina, Tennessee, Virginia and West
Virginia and the Schedule relating to each Unit shall set forth
the state in which such Unit is to be titled. Lessee shall give
Lessor notice of any change in the titling location required by
applicable law at least 10 days before such change is required.
2. Return Location and Condition. Any Unit returned
pursuant to Section 9 of the Lease shall be returned at the place
Lessor specifies within the state in which the Unit was originally
delivered or, if the Unit has been moved to another state in
accordance with this Lease, within such other state. Upon such
return such Unit shall be in good operating condition and,
ordinary wear and tear excepted, in the same condition as on its
Delivery Date.
3. Casualty Values. The Casualty Values of each Unit
shall be the percentages of the Purchase Price thereof as set
forth in Attachment 1 to this Appendix which will be adjusted
consistent with any adjustment of Base Rents as provided herein,
and such adjusted Casualty Values will be as set forth on the
Schedule relating to such Unit.
G. Sale Upon Expiration of Lease; Lessee Purchase Option.
Upon the scheduled expiration of this Lease with respect to
all, but not less than all, of the Units, Lessee may:
(a) purchase such Units for a price equal to the fair
market sale value (as determined herein) of such Units on such
date of expiration upon 45 days prior written notice to Lessor, or
(b) surrender such Units to Lessor on such date of
expiration pursuant to Item F.
If Lessee elects to surrender such Units, Lessee shall sell
such Units as agent for Lessor. Lessee's authority to act as such
agent shall expire 30 days after such date of expiration,
whereupon Lessor shall sell such Units as soon as practicable
thereafter, in a commercially reasonable manner (which may be by
auction in the wholesale market). While acting as Lessor's agent,
Lessee shall not
-4-
<PAGE>
consummate any proposed sale of a Unit that is a Motor Vehicle for
a price (net of applicable taxes and sales costs) less than
the TRAC Amount without notifying Lessor and obtaining Lessor's
prior written consent to such sale.
If Lessee exercises the purchase option, Lessee shall, if
no Event of Default exists on the date of such notice or on the
closing date of the purchase, purchase the Units at a purchase
price equal to the fair market sale value of such Units as of the
last day of the applicable Lease Term. The fair market sale value
shall mean the open market cash purchase price that an informed
and willing person (other than a lessee-user in possession) would
pay for the Units in an arms-length transaction to a willing and
informed owner under no compulsion to sell and assuming the Units
are in the condition as required in the Lease. The fair market
sale value for Type C Units shall not exceed 25% of the Purchase
Price for such Units. The fair market sale value of the Units
shall be determined no later than 30 days before such expiration
date by mutual consent of Lessor and Lessee. If they are unable
to agree, the fair market sale value shall be determined in an
appraisal mutually agreed to by two recognized independent
automotive appraisers, one of which shall be chosen by Lessor and
one by Lessee with each of Lessee and Lessor paying the expenses
of its appointed appraiser. If such appraiser cannot reach
agreement on the amount of such appraisal, the determination shall
be made by an appraisal arrived at by a third independent
appraiser chosen by mutual consent of such two appraisers. Lessee
and Lessor shall share equally the expenses of such third
appraisal. Upon receipt of the purchase price and all other
amounts due under the Lease, Lessor shall transfer to Lessee,
without recourse or warranty other than a warranty of retransfer
of all interest received by Lessor from Lessee subject to any
liens not created by Lessor, on an AS-IS, WHERE-IS basis, all of
Lessor's right, title and interest, if any, in such Units within
10 days of payment.
Whether or not Lessee purchases or surrenders the Motor
Vehicle Units, Lessee shall pay Lessor, as rent, any Terminal
Rental Adjustments.
H. Late Charges.
Lessee shall pay Lessor interest on late payments at the
rate of 2% in excess of the Reference Rate, computed daily on the
basis of a 360-day year and actual days elapsed, which results in
more interest than if a 365-day year is used.
"Reference Rate" is the rate of interest publicly announced
from time to time by Bank of America National Trust and Savings
Association in San Francisco, California ("Bank") as its Reference
Rate. The Reference Rate is set based on various factors,
including Bank's costs and desired return, general economic
conditions and
-5-
<PAGE>
other factors, and is used as a reference point for pricing some
loans. Loans may be priced at, above or below the Reference Rate.
I. Nonutilization Fee.
If upon the expiration of the Utilization Period the
Purchase Price of all Units leased hereunder is less than
$7,000,000, then Lessee shall pay to Lessor 1% of the difference
between the Purchase Price and $11,045,000. Such amount shall be
due and payable when billed by Lessor.
<PAGE>
-6-
EXHIBIT 10.2
<PAGE>
Lease No. 940148
LEASE SCHEDULE AND ACCEPTANCE CERTIFICATE NO. 001 - REVISED
Reference is made to the Lease Agreement dated as of December 15, 1994
between BA LEASING & CAPITAL CORPORATION, as Lessor, and COCA-COLA BOTTLING
CO. CONSOLIDATED, as Lessee (together with the Appendix thereto, the "Lease";
capitalized terms not otherwise defined herein having the same meanings as
in the Lease). The Lease is incorporated herein by reference.
1. ACCEPTANCE; CONFIRMATIONS. Lessee confirms that (A) the equipment
described in Annex A to this Lease Schedule (the "Units") has been delivered
to, is in the possession of and is accepted by Lessee for leasing under, and
constitutes "Units" subject to and governed by, the Lease, (B) the Units (i)
have been fully inspected by qualified agents of Lessee and are in good order,
operating condition and repair, (ii) have been properly installed (subject
only to any minor undischarged obligations of suppliers, manufacturers or
installers thereof to promptly update and conform the same as provided by
their respective agreements and warranties), (iii) meet all recommended or
applicable safety standards, (iv) are, as of the Delivery Date set forth
below, available for use and service by Lessee and Lessor, and (v) have
been marked or labeled showing Lessor's interest in the form and to the
extent required by the Lease and (C) Lessee must pay the rent and all other
sums provided for in the Lease with respect to such Units.
2. DELIVERY DATE; SCHEDULING DATE. The Delivery Date of the Units is
January 10, 1995. The Scheduling Date of the Units is January 10, 1995.
3. TERM. The Term of the Lease with respect to the Units is comprised
of an Interim Term that begins on the Delivery Date and continues until
April 1, 1995 (the "Base Date") and a Base Term that begins on the Base
Date and continues until April 1, 2003.
4. RENT. The total rents for the Units is $2,510,820.56, comprised of
Base Rent payable in 32 consecutive quarterly installments, with the first
such installment due three months following the Base Date. The Base Rent
installments are set forth in Annex B hereto.
5. CASUALTY VALUES. The Casualty Values for the Units are set forth
in Annex B hereto.
6. CHATTEL PAPER COUNTERPARTS. Two counterparts of this Lease Schedule
and Acceptance Certificate have been executed by the parties hereto. One
counterpart has been prominently marked "Lessor's Copy". One counterpart
has been prominently marked "Lessee's Copy". Only the counterpart marked
"Lessor's Copy" shall evidence a monetary obligation of Lessee.
IN WITNESS WHEREOF, Lessor and Lessee have executed this Lease Schedule
and Acceptance Certificate as of the Delivery Date set forth above.
Lessor: Lessee:
BA LEASING & CAPITAL CORPORATION COCA-COLA BOTTLING CO. CONSOLIDATED
By: (Signature of Sonia Delen By: (Signature of Steven D. Westphal
appears here) appears here)
Title: Assistant Vice President Title: Vice President & Controller
By: (Signature of Gail D. Smedal LESSEE'S COPY
appears here)
Title: Vice President
<PAGE>
EXHIBIT 10.3
<PAGE>
Lease No. 940148
LEASE SCHEDULE AND ACCEPTANCE CERTIFICATE NO. 002 - REVISED
Reference is made to the Lease Agreement dated as of December 15, 1994
between BA LEASING & CAPITAL CORPORATION, as Lessor, and COCA-COLA BOTTLING
CO. CONSOLIDATED, as Lessee (together with the Appendix thereto, the "Lease";
capitalized terms not otherwise defined herein having the same meanings as
in the Lease). The Lease is incorporated herein by reference.
1. ACCEPTANCE; CONFIRMATIONS. Lessee confirms that (A) the equipment
described in Annex A to this Lease Schedule (the "Units") has been delivered
to, is in the possession of and is accepted by Lessee for leasing under, and
constitutes "Units" subject to and governed by, the Lease, (B) the Units (i)
have been fully inspected by qualified agents of Lessee and are in good order,
operating condition and repair, (ii) have been properly installed (subject
only to any minor undischarged obligations of suppliers, manufacturers or
installers thereof to promptly update and conform the same as provided by
their respective agreements and warranties), (iii) meet all recommended or
applicable safety standards, (iv) are, as of the Delivery Date set forth
below, available for use and service by Lessee and Lessor, and (v) have
been marked or labeled showing Lessor's interest in the form and to the
extent required by the Lease and (C) Lessee must pay the rent and all other
sums provided for in the Lease with respect to such Units.
2. DELIVERY DATE; SCHEDULING DATE. The Delivery Date of the Units is
January 18, 1995. The Scheduling Date of the Units is January 18, 1995.
3. TERM. The Term of the Lease with respect to the Units is comprised
of an Interim Term that begins on the Delivery Date and continues until
April 15, 1995 (the "Base Date") and a Base Term that begins on the Base
Date and continues until April 15, 2003.
4. RENT. The total rents for the Units is $666,448.80, comprised of
Base Rent payable in 32 consecutive quarterly installments, with the first
such installment due three months following the Base Date. The Base Rent
installments are set forth in Annex B hereto.
5. CASUALTY VALUES. The Casualty Values for the Units are set forth
in Annex B hereto.
6. CHATTEL PAPER COUNTERPARTS. Two counterparts of this Lease Schedule
and Acceptance Certificate have been executed by the parties hereto. One
counterpart has been prominently marked "Lessor's Copy". One counterpart
has been prominently marked "Lessee's Copy". Only the counterpart marked
"Lessor's Copy" shall evidence a monetary obligation of Lessee.
IN WITNESS WHEREOF, Lessor and Lessee have executed this Lease Schedule
and Acceptance Certificate as of the Delivery Date set forth above.
Lessor: Lessee:
BA LEASING & CAPITAL CORPORATION COCA-COLA BOTTLING CO. CONSOLIDATED
By: (Signature of Sonia Delen By: (Signature of Steven D. Westphal
appears here) appears here)
Title: Assistant Vice President Title: Vice President & Controller
By: (Signature of Gail D. Smedal LESSEE'S COPY
appears here)
Title: Vice President
<PAGE>
EXHIBIT 10.4
<PAGE>
Lease No. 940148
LEASE SCHEDULE AND ACCEPTANCE CERTIFICATE NO. 003
Reference is made to the Lease Agreement dated as of December 15, 1994
between BA LEASING & CAPITAL CORPORATION, as Lessor, and COCA-COLA BOTTLING
CO. CONSOLIDATED, as Lessee (together with the Appendix thereto, the "Lease";
capitalized terms not otherwise defined herein having the same meanings as
in the Lease). The Lease is incorporated herein by reference.
1. ACCEPTANCE; CONFIRMATIONS. Lessee confirms that (A) the equipment
described in Annex A to this Lease Schedule (the "Units") has been delivered
to, is in the possession of and is accepted by Lessee for leasing under, and
constitutes "Units" subject to and governed by, the Lease, (B) the Units (i)
have been fully inspected by qualified agents of Lessee and are in good order,
operating condition and repair, (ii) have been properly installed (subject
only to any minor undischarged obligations of suppliers, manufacturers or
installers thereof to promptly update and conform the same as provided by
their respective agreements and warranties), (iii) meet all recommended or
applicable safety standards, (iv) are, as of the Delivery Date set forth
below, available for use and service by Lessee and Lessor, and (v) have
been marked or labeled showing Lessor's interest in the form and to the
extent required by the Lease and (C) Lessee must pay the rent and all other
sums provided for in the Lease with respect to such Units.
2. DELIVERY DATE; SCHEDULING DATE. The Delivery Date of the Units is
January 31, 1995. The Scheduling Date of the Units is January 31, 1995.
3. TERM. The Term of the Lease with respect to the Units is comprised
of an Interim Term that begins on the Delivery Date and continues until
April 15, 1995 (the "Base Date") and a Base Term that begins on the Base
Date and continues until April 15, 2003.
4. RENT. The total rents for the Units is $675,581.28, comprised of
Base Rent payable in 32 consecutive quarterly installments, with the first
such installment due three months following the Base Date. The Base Rent
installments are set forth in Annex B hereto.
5. CASUALTY VALUES. The Casualty Values for the Units are set forth
in Annex B hereto.
6. CHATTEL PAPER COUNTERPARTS. Two counterparts of this Lease Schedule
and Acceptance Certificate have been executed by the parties hereto. One
counterpart has been prominently marked "Lessor's Copy". One counterpart
has been prominently marked "Lessee's Copy". Only the counterpart marked
"Lessor's Copy" shall evidence a monetary obligation of Lessee.
IN WITNESS WHEREOF, Lessor and Lessee have executed this Lease Schedule
and Acceptance Certificate as of the Delivery Date set forth above.
Lessor: Lessee:
BA LEASING & CAPITAL CORPORATION COCA-COLA BOTTLING CO. CONSOLIDATED
By: (Signature of Sonia Delen By: (Signature of Steven D. Westphal
appears here) appears here)
Title: Assistant Vice President Title: Vice President & Controller
By: (Signature of Gail D. Smedal LESSEE'S COPY
appears here)
Title: Vice President
<PAGE>
EXHIBIT 10.5
<PAGE>
Lease No. 940148
LEASE SCHEDULE AND ACCEPTANCE CERTIFICATE NO. 004
Reference is made to the Lease Agreement dated as of December 15, 1994
between BA LEASING & CAPITAL CORPORATION, as Lessor, and COCA-COLA BOTTLING
CO. CONSOLIDATED, as Lessee (together with the Appendix thereto, the "Lease";
capitalized terms not otherwise defined herein having the same meanings as
in the Lease). The Lease is incorporated herein by reference.
1. ACCEPTANCE; CONFIRMATIONS. Lessee confirms that (A) the equipment
described in Annex A to this Lease Schedule (the "Units") has been delivered
to, is in the possession of and is accepted by Lessee for leasing under, and
constitutes "Units" subject to and governed by, the Lease, (B) the Units (i)
have been fully inspected by qualified agents of Lessee and are in good order,
operating condition and repair, (ii) have been properly installed (subject
only to any minor undischarged obligations of suppliers, manufacturers or
installers thereof to promptly update and conform the same as provided by
their respective agreements and warranties), (iii) meet all recommended or
applicable safety standards, (iv) are, as of the Delivery Date set forth
below, available for use and service by Lessee and Lessor, and (v) have
been marked or labeled showing Lessor's interest in the form and to the
extent required by the Lease and (C) Lessee must pay the rent and all other
sums provided for in the Lease with respect to such Units.
2. DELIVERY DATE; SCHEDULING DATE. The Delivery Date of the Units is
February 8, 1995. The Scheduling Date of the Units is February 8, 1995.
3. TERM. The Term of the Lease with respect to the Units is comprised
of an Interim Term that begins on the Delivery Date and continues until
May 1, 1995 (the "Base Date") and a Base Term that begins on the Base Date
and continues until May 1, 2003.
4. RENT. The total rents for the Units is $193,475.44, comprised of
Base Rent payable in 32 consecutive quarterly installments, with the first
such installment due three months following the Base Date. The Base Rent
installments are set forth in Annex B hereto.
5. CASUALTY VALUES. The Casualty Values for the Units are set forth
in Annex B hereto.
6. CHATTEL PAPER COUNTERPARTS. Two counterparts of this Lease Schedule
and Acceptance Certificate have been executed by the parties hereto. One
counterpart has been prominently marked "Lessor's Copy". One counterpart
has been prominently marked "Lessee's Copy". Only the counterpart marked
"Lessor's Copy" shall evidence a monetary obligation of Lessee.
IN WITNESS WHEREOF, Lessor and Lessee have executed this Lease Schedule
and Acceptance Certificate as of the Delivery Date set forth above.
Lessor: Lessee:
BA LEASING & CAPITAL CORPORATION COCA-COLA BOTTLING CO. CONSOLIDATED
By: (Signature of Sonia Delen By: (Signature of Steven D. Westphal
appears here) appears here)
Title: Assistant Vice President Title: Vice President
By: (Signature of Gail D. Smedal LESSEE'S COPY
appears here)
Title: Vice President
<PAGE>
EXHIBIT 10.6
<PAGE>
Lease No. 940148
LEASE SCHEDULE AND ACCEPTANCE CERTIFICATE NO. 005 - REVISED
Reference is made to the Lease Agreement dated as of December 15, 1994
between BA LEASING & CAPITAL CORPORATION, as Lessor, and COCA-COLA BOTTLING
CO. CONSOLIDATED, as Lessee (together with the Appendix thereto, the "Lease";
capitalized terms not otherwise defined herein having the same meanings as
in the Lease). The Lease is incorporated herein by reference.
1. ACCEPTANCE; CONFIRMATIONS. Lessee confirms that (A) the equipment
described in Annex A to this Lease Schedule (the "Units") has been delivered
to, is in the possession of and is accepted by Lessee for leasing under, and
constitutes "Units" subject to and governed by, the Lease, (B) the Units (i)
have been fully inspected by qualified agents of Lessee and are in good order,
operating condition and repair, (ii) have been properly installed (subject
only to any minor undischarged obligations of suppliers, manufacturers or
installers thereof to promptly update and conform the same as provided by
their respective agreements and warranties), (iii) meet all recommended or
applicable safety standards, (iv) are, as of the Delivery Date set forth
below, available for use and service by Lessee and Lessor, and (v) have
been marked or labeled showing Lessor's interest in the form and to the
extent required by the Lease and (C) Lessee must pay the rent and all other
sums provided for in the Lease with respect to such Units.
2. DELIVERY DATE; SCHEDULING DATE. The Delivery Date of the Units is
February 8, 1995. The Scheduling Date of the Units is February 8, 1995.
3. TERM. The Term of the Lease with respect to the Units is comprised
of an Interim Term that begins on the Delivery Date and continues until
May 1, 1995 (the "Base Date") and a Base Term that begins on the Base Date
and continues until May 1, 2003.
4. RENT. The total rents for the Units is $452,814.24, comprised of
Base Rent payable in 32 consecutive quarterly installments, with the first
such installment due three months following the Base Date. The Base Rent
installments are set forth in Annex B hereto.
5. CASUALTY VALUES. The Casualty Values for the Units are set forth
in Annex B hereto.
6. CHATTEL PAPER COUNTERPARTS. Two counterparts of this Lease Schedule
and Acceptance Certificate have been executed by the parties hereto. One
counterpart has been prominently marked "Lessor's Copy". One counterpart
has been prominently marked "Lessee's Copy". Only the counterpart marked
"Lessor's Copy" shall evidence a monetary obligation of Lessee.
IN WITNESS WHEREOF, Lessor and Lessee have executed this Lease Schedule
and Acceptance Certificate as of the Delivery Date set forth above.
Lessor: Lessee:
BA LEASING & CAPITAL CORPORATION COCA-COLA BOTTLING CO. CONSOLIDATED
By: By: (Signature of Brenda B. Jackson
appears here)
Title: Title: Vice President & Treasurer
By: LESSOR'S COPY
Title:
<PAGE>
EXHIBIT 10.7
<PAGE>
Lease No. 940148
LEASE SCHEDULE AND ACCEPTANCE CERTIFICATE NO. 006 - REVISED
Reference is made to the Lease Agreement dated as of December 15, 1994
between BA LEASING & CAPITAL CORPORATION, as Lessor, and COCA-COLA BOTTLING
CO. CONSOLIDATED, as Lessee (together with the Appendix thereto, the "Lease";
capitalized terms not otherwise defined herein having the same meanings as
in the Lease). The Lease is incorporated herein by reference.
1. ACCEPTANCE; CONFIRMATIONS. Lessee confirms that (A) the equipment
described in Annex A to this Lease Schedule (the "Units") has been delivered
to, is in the possession of and is accepted by Lessee for leasing under, and
constitutes "Units" subject to and governed by, the Lease, (B) the Units (i)
have been fully inspected by qualified agents of Lessee and are in good order,
operating condition and repair, (ii) have been properly installed (subject
only to any minor undischarged obligations of suppliers, manufacturers or
installers thereof to promptly update and conform the same as provided by
their respective agreements and warranties), (iii) meet all recommended or
applicable safety standards, (iv) are, as of the Delivery Date set forth
below, available for use and service by Lessee and Lessor, and (v) have
been marked or labeled showing Lessor's interest in the form and to the
extent required by the Lease and (C) Lessee must pay the rent and all other
sums provided for in the Lease with respect to such Units.
2. DELIVERY DATE; SCHEDULING DATE. The Delivery Date of the Units is
February 27, 1995. The Scheduling Date of the Units is February 27, 1995.
3. TERM. The Term of the Lease with respect to the Units is comprised
of an Interim Term that begins on the Delivery Date and continues until
April 15, 1995 (the "Base Date") and a Base Term that begins on the Base
Date and continues until April 15, 2003.
4. RENT. The total rents for the Units is $580,399.53, comprised of
Base Rent payable in 32 consecutive quarterly installments, with the first
such installment due three months following the Base Date. The Base Rent
installments are set forth in Annex B hereto.
5. CASUALTY VALUES. The Casualty Values for the Units are set forth
in Annex B hereto.
6. CHATTEL PAPER COUNTERPARTS. Two counterparts of this Lease Schedule
and Acceptance Certificate have been executed by the parties hereto. One
counterpart has been prominently marked "Lessor's Copy". One counterpart
has been prominently marked "Lessee's Copy". Only the counterpart marked
"Lessor's Copy" shall evidence a monetary obligation of Lessee.
IN WITNESS WHEREOF, Lessor and Lessee have executed this Lease Schedule
and Acceptance Certificate as of the Delivery Date set forth above.
Lessor: Lessee:
BA LEASING & CAPITAL CORPORATION COCA-COLA BOTTLING CO. CONSOLIDATED
By: By: (Signature of Brenda B. Jackson
appears here)
Title: Title: Vice President & Treasurer
By: LESSOR'S COPY
Title:
<PAGE>
EXHIBIT 10.8
<PAGE>
[EXECUTION COPY]
FIRST AMENDMENT TO CREDIT AGREEMENT, LINE OF CREDIT NOTE
AND MORTGAGE, AND REAFFIRMATION OF TERM NOTE, SECURITY AGREEMENT,
GUARANTY AGREEMENT AND ADDENDUM TO GUARANTY AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT, LINE OF CREDIT
NOTE AND MORTGAGE, AND REAFFIRMATION OF TERM NOTE, SECURITY
AGREEMENT, GUARANTY AGREEMENT AND ADDENDUM TO GUARANTY AGREEMENT
(the "Amendment"), made as of March 31, 1995, by and among SOUTH
ATLANTIC CANNERS, INC. (together with its successors and assigns,
the "Borrower"), COCA-COLA BOTTLING CO. CONSOLIDATED (together
with its successors and assigns,"Consolidated") and WACHOVIA BANK
OF NORTH CAROLINA, N.A. (together with endorsees, successors and
assigns, the "Bank").
BACKGROUND
The Bank agreed to make a line of credit loan to the Borrower in
the maximum principal amount of $5,000,000 as evidenced by that
certain Line of Credit Note dated July 22, 1994 (the "1994 Line
of Credit Note") and to make a term loan to the Borrower (in one
or more advances) in the principal amount of $15,000,000 as
evidenced by that certain Term Note dated July 22, 1994, both
loans being made on the terms and subject to the conditions set
forth in that certain Credit Agreement dated as of July 22, 1994
(the "1994 Agreement").
In order to induce the Bank to make the Loans, the Borrower,
contemporaneously with the execution and delivery of the 1994
Agreement, executed and delivered the other Loan Documents.
Consolidated manages the day-to-day operations of the
Borrower as more fully set forth in the Management Agreement.
The Bank agreed to make the Loans, and agrees to the
modifications contained herein, including without limitation the
extension of additional credit to the Borrower, in reliance on
the continuation of the Management Agreement.
The Bank and the Borrower have agreed to modify the terms
and conditions of the Line of Credit Loan, and to extend
additional credit to the Borrower under the Line of Credit Loan
on the terms and subject to the conditions set forth below.
Consolidated has agreed to affirm its existing Unconditional
Guarantee and to execute and deliver to the Bank the Line of
Credit Guarantee, on the terms and conditions set forth therein.
NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, including the covenants, terms
and conditions hereinafter appearing, and to induce the Bank to
extend
<PAGE>
additional credit, the parties hereby covenant and agree
as follows:
Section 1. Definitions. All defined terms used and not
defined herein are used as defined in the 1994 Agreement and the
1994 Mortgage (as defined below). As used herein and in the 1994
Agreement, the following terms shall have the meanings specified
herein (to be equally applicable to both the singular and plural
forms of the terms defined), and the definitions of any of the
following terms which appear in the 1994 Agreement are hereby
deleted in their entirety:
"Agreement" shall mean the 1994 Agreement, as amended
by this Amendment and as subsequently amended, modified or
supplemented from time to time in accordance with its terms.
"Commitment" shall mean the commitment to lend set
forth in Section 2.01 of the Agreement, as amended by this
Amendment.
"Line of Credit Guarantee" shall mean the Guarantee
Agreement and Addendum to Guarantee by Consolidated of even date
herewith, guaranteeing the additional portion of the Line of
Credit Loan, as subsequently amended, modified or supplemented
from time to time in accordance with its terms.
"Line of Credit Note" shall mean the 1994 Line of
Credit Note as amended by this Amendment and as subsequently
amended, modified or supplemented from time to time in accordance
with its terms.
"Loan Documents" means the Agreement, as amended by
this Amendment, the Notes, the Security Agreement, the Mortgage,
the Unconditional Guarantee, the Line of Credit Guarantee, and
any other document evidencing or securing the Loans, and all
other instruments, certificates, financing statements or other
documents executed or delivered in connection with the
transactions contemplated hereby or thereby.
"Modification of Mortgage" shall mean the Modification
of Mortgage dated March 31, 1995 executed by the Borrower in
favor of the Bank.
"Mortgage" shall mean the 1994 Mortgage as amended by
this Amendment and as subsequently amended, modified,
supplemented, renewed or extended from time to time in accordance
with its terms.
"1994 Agreement" shall have the meaning set forth in
the recitals hereto.
"1994 Line of Credit Note" shall have the meaning set
forth in the recitals hereto.
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<PAGE>
"1994 Mortgage" shall mean the Corporate Mortgage of
Real Property executed by the Borrower in favor of the Bank dated
July 21, 1994, as recorded in Lee County, South Carolina on
July 22, 1994 at Book 168, Page 214.
"Term Loan" shall have the meaning set forth in
Section 3 of this Amendment.
Section 2. Line of Credit Loan. Subject to the terms and
conditions contained herein and in the 1994 Agreement, through
the Termination Date, the Bank will make Advances to the Borrower
under the Line of Credit Loan of up to TEN MILLION DOLLARS
($10,000,000) (as such figure may be reduced from time to time as
provided in the Agreement, the "Commitment"). In all other
respects, the terms of Section 2.01 of the 1994 Agreement shall
remain in full force and effect.
Section 3. Term Loan. Subject to the terms and conditions
contained herein and in the 1994 Agreement, Section 2.02 of the
1994 Agreement is hereby amended as follows:
(a) Section 2.02(a) of the 1994 Agreement is deleted in its
entirety and the following provision is substituted therefor:
(a) Subject to the terms and conditions
hereinafter set forth, on and after the Closing
Date through and including December 30, 1994, at
the Borrower's request the Bank agreed to lend to
the Borrower, in one or more advances, the sum of
FIFTEEN MILLION DOLLARS ($15,000,000) (the "Term
Loan"). Due to the principal repayment of $375,000
made pursuant to Section 2.02(c) of this Agreement
on December 30, 1994, availability under the Term
Loan has been permanently reduced to $14,625,000.
From December 30, 1994 through and including
March 31, 1995, at the Borrower's request, the
Bank agrees to lend to the Borrower, in one or
more advances (each, an "Advance"), and the
Borrower agrees to borrow from the Bank, the sum
of FOURTEEN MILLION SIX HUNDRED TWENTY-FIVE
THOUSAND DOLLARS ($14,625,000); provided, that the
Borrower is obligated to take Advances under the
Term Loan aggregating $14,625,000 in principal on
or before March 31, 1995; and provided, further,
that each Advance under the Term Loan shall be in
the minimum principal amount of $500,000, that no
more than four (4) Advances shall be made by the
Bank between December 30, 1994 and March 31, 1995,
and that the Advances made on or before March 31,
1995 must total $14,625,000 in principal. The
Term Loan shall be a Euro-Dollar Loan.
3
<PAGE>
(b) Section 2.02(d)(iii) of the 1994 Agreement is amended
by deleting the date "November 30, 1994" in the first line
thereof and substituting the date "March 31, 1995."
(c) In all other respects, the terms of Section 2.02 of the
1994 Agreement shall remain in full force and effect.
Section 4. Fees. Subject to the terms and conditions
contained herein and in the 1994 Agreement, Section 2.08 of the
1994 Agreement is amended as follows:
(a) Section 2.08(b) is deleted in its entirety and the
following provision is substituted therefor:
(b) From and after the date hereof to and
including March 31, 1995, the Borrower shall pay
to the Bank a commitment fee at the rate of one-
eighth (1/8) of one percent (0.125%) per annum on
the average daily balance of the undrawn portion
of the Term Loan principal. The Bank shall
calculate the amount of such fee on or after
November 30, 1994 and again on or after March 31,
1995. In each case, such fee shall be due and
payable by the Borrower within five (5) Domestic
Business Days after receipt of a written invoice
from the Bank setting forth the amount of such
fee.
(b) In all other respects, the terms of Section 2.08 of the
1994 Agreement shall remain in full force and effect.
Section 5. Information for Stub Accounting Period.
(a) Subject to the terms and conditions contained herein and in
the 1994 Agreement, Section 6.01 of the 1994 Agreement is amended
by deleting the parenthetical, "including without limitation for
any stub accounting period running from August 31, 1994 through
the fiscal year end of Consolidated)" in the second through
fourth lines thereof, and substituting the following
parenthetical therefor:
(except the short Fiscal Year of the Borrower
ended January 1, 1995)
(b) Section 6.01 of the 1994 Agreement is amended by adding
the following subsection (h) thereto:
(h) as soon as available and in any event
within 90 days after the end thereof, (i) a
balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of
the stub accounting period running from
August 31, 1994 through January 1, 1995 and
the related statement of income and statement
of cash
4
<PAGE>
flows for such period and for the portion of the
Fiscal Year ended at the end of such stub accounting
period, all certified (subject to normal year-end
adjustments) as to fairness of presentation and
consistency with past practice of the Borrower's
auditors by the chief financial officer or the
treasurer of Consolidated, and (ii) simultaneously
with the delivery of information set forth in
clause (i) above, a certificate of the chief
financial officer or the treasurer of Consolidated
stating whether any Default exists on the date of
such certificate, and if any Default then exists,
setting forth the details thereof and the action
which the Borrower is taking or proposes to take
with respect thereto.
(c) In all other respects, the terms of Section 6.01 of the
1994 Agreement shall remain in full force and effect.
Section 6. Operating Leases. Subject to the terms and
conditions contained herein and in the 1994 Agreement, Section
6.03 of the 1994 Agreement is amended by deleting the dollar
amount "$800,000" in the fourth line thereof and substituting
therefor the dollar amount "$600,000."
Section 7. Conditions to Actions Set Forth Herein. (a) It
is a condition precedent that prior to the extension of
additional credit to the Borrower as contemplated hereby, and
prior to the effectiveness of the amendments contained herein,
the Borrower shall have furnished to the Bank, in form and
substance satisfactory to the Bank, the following:
(i) Four executed counterparts of this Amendment;
(ii) The executed Modification of Mortgage;
(iii) Four executed counterparts of the Line of Credit
Guarantee;
(iv) Officer's Certificate of the Borrower;
(v) Certificates of the existence and good standing of
the Borrower and Consolidated issued by the Secretaries
of State of the jurisdiction of organization and each
jurisdiction where each is required to qualify to do
business as a foreign corporation, each dated within
ten (10) days prior to the date hereof;
(vi) A certificate of the President or Secretary of the
Borrower certifying: (i) that attached thereto is a
true
5
<PAGE>
and complete copy of the Bylaws of the Borrower as
in effect on the date hereof; and (ii) that attached
thereto is a true and complete copy of resolutions
adopted by the Board of Directors of the Borrower
approving the execution, delivery and performance of
this Amendment and the Modification of Mortgage on
behalf of the Borrower, and the transactions contem-
plated herein and therein, and authorizing duly
appointed representatives of Consolidated to execute
this Amendment and the Modification of Mortgage on the
Borrower's behalf, and that those resolutions remain in
full force and effect. The Bank may rely on such
certificate as to authorized persons until it receives
another certificate of the Borrower canceling or amend-
ing the prior certificate;
(vii) Copies of tax, lien and judgment search reports
satisfactory to the Bank, in such jurisdictions as the
Bank may determine, covering the Realty and all
personal property of the Borrower;
(viii) A certificate of a vice president and assistant
secretary of Consolidated certifying: (i) that
attached thereto is a true and complete copy of
resolutions adopted by the Board of Directors of
Consolidated approving the execution, delivery and
performance of this Amendment and the Line of Credit
Guarantee, and that those resolutions remain in full
force and effect; (ii) the names and signatures of
those persons authorized on behalf of Consolidated to
execute this Amendment and the Modification of Mortgage
on behalf of the Borrower and the other documents and
certificates to be delivered pursuant thereto and to
sign the Line of Credit Guarantee on behalf of
Consolidated; (iii) that all of the representations and
warranties contained in Article V of the 1994
Agreement and contained in this Amendment and in the
Line of Credit Guarantee are true and correct in all
respects as of the date hereof; and (iv) that no event
has occurred and is continuing, or would result from
the consummation of the transactions contemplated
hereby and by the other documents delivered in
connection herewith, which constitutes or would
constitute a Default or an Event of Default. The Bank
may rely on such certificate as to authorized persons
until it receives another certificate of the Borrower
canceling or amending the prior certificate;
(ix) An opinion of counsel for the Borrower and
Consolidated dated the date hereof in form and
substance acceptable to the Bank as to the matters set
forth on ADDENDUM I hereto;
6
<PAGE>
(x) Executed waivers and consents from each of the
members of the Borrower with respect to the Security
Agreement dated _______________ among the Borrower and
its members;
(xi) Four executed originals of the Reaffirmation
Agreement of American National Can Company, Inc.; and
(xii) Such other documentation as the Bank may request.
(b) It is also a condition precedent that prior to the
extension of additional credit to the Borrower as contemplated
hereby, and prior to the effectiveness of the amendments
contained herein, the following additional conditions shall be
satisfied:
(i) No Default or Event of Default shall exist as of
the date of such funding;
(ii) The Borrower shall have performed and complied
with all agreements and conditions contained herein, in
the 1994 Agreement and in each of the other Loan
Documents which are required to be performed or
complied with by the Borrower;
(iii) As of the date of such funding, no event shall
have occurred that could reasonably be expected to
cause a Material Adverse Effect;
(iv) The representations and warranties contained
herein and in Article V of the 1994 Agreement and in
each of the other Loan Documents shall be true and
correct in all respects as of the date of such funding;
(v) The following documents shall have been recorded
in all appropriate jurisdictions and the Bank shall
have received acknowledgment copies thereof, or in lieu
thereof other evidence reasonably satisfactory to the
Bank that such recordations have been made:
(A) Memorandum of Lease between the Borrower and
the Town of Bishopville; and
(vi) Such other action shall have been taken as the
Bank may reasonably request.
(c) It is a condition subsequent to the transactions
contemplated hereby that within thirty (30) days after the
closing of such transactions, the Borrower shall have recorded
the following in all appropriate jurisdictions and the Bank shall
have received acknowledgment copies thereof, in form satisfactory
to the Bank:
7
<PAGE>
(i) Easement in favor of the Borrower from the
Town of Bishopville with respect to encroachments
of sewers;
(ii) Easement in favor of the Borrower from the
Town of Bishopville with respect to an
encroachment of a sanitary sewer; and
(iii) UCC termination statements executed by
NationsBank (formerly Citizens and Southern
National Bank).
(d) It is a condition subsequent to the transactions
contemplated hereby that within sixty (60) days after the closing
of such transactions, the Borrower shall have furnished to the
Bank, in form and substance satisfactory to the Bank, the
following:
(i) Additional corporate resolutions of the
Borrower authorizing the transactions contemplated
hereby;
(ii) Substitute opinion of McDermott, Will &
Emery, counsel to the Borrower, dated the date
hereof, as to matters set forth on Addendum I
hereto; and
(iii) Consents and estoppels in favor of the Bank
from the following equipment lessors:
(A) Illinois Tool Works Inc.; and
(b) Riverwood International USA, Inc.
Section 8. Additional Representations, Warranties and
Covenant. In order to induce the Bank to enter into this
Amendment, the Borrower reaffirms the representations and
warranties contained in the 1994 Agreement as of the date hereof
(subject only to the changes set forth in the Schedules attached
to this Amendment), and makes the additional representations and
warranties set forth below:
(a) Each of the Borrower and Consolidated is duly organized,
validly existing and in good standing under the laws of the state
of its incorporation and is duly qualified to transact business
in every jurisdiction where, by the nature of its business, such
qualification is necessary.
(b) Each of the Borrower and Consolidated has all corporate
powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now
conducted.
8
<PAGE>
(c) Each of the Borrower and Consolidated has full power and
authority to enter into this Amendment, and Consolidated has full
power and authority to enter into the Line of Credit Guarantee,
all such action having been duly authorized by all proper and
necessary corporate action.
(d) Neither the execution of this Amendment or the Line of
Credit Guarantee, nor the fulfillment of or compliance with their
respective provisions and terms, will (A) conflict with, or
result in a breach of the terms, conditions or provisions of, or
constitute a violation of or default under, or require any
approval under, any applicable law, regulation, judgment, writ,
order or decree binding on the Borrower or Consolidated, or the
certificate of incorporation, bylaws or other organizational
documents of the Borrower or Consolidated, or any agreement or
instrument to which the Borrower or Consolidated is now a party
or by which either of them or any of their respective properties
are bound or affected, or (B) create any lien, charge or
encumbrance upon any of the property or assets of the Borrower or
Consolidated pursuant to the terms of any agreement or instrument
to which the Borrower or Consolidated is a party or by which
either of them or any of their respective properties are bound
except as contemplated hereby.
(e) This Amendment and the Line of Credit Guarantee have
each been duly executed and delivered by each of the Borrower and
Consolidated, as the case may be, and each is the legal, valid
and binding obligation of each of the Borrower and Consolidated,
as the case may be, enforceable against each of them in
accordance with its terms.
(f) The Collateral is not subject to any liens or
encumbrances as of the date hereof except the lien of the Bank
and except as otherwise referred to on Schedule 1.01 of the
Agreement (as amended by Schedule 1.01 attached to this
Amendment).
(g) There is no action, suit or proceeding pending or
threatened against or affecting the Borrower or Consolidated
before any court or arbitrator or any governmental authority
which could materially adversely affect the business,
consolidated financial position or consolidated results of
operations of the Borrower and Consolidated, or which in any
manner draws into question the validity of, or could materially
impair the ability of the Borrower to perform its obligations
under the Agreement or the ability of Consolidated to perform its
obligations under the Unconditional Guarantee or the Line of
Credit Guarantee.
(h) Except as otherwise disclosed on Schedule 1.01 to the
1994 Agreement (as amended by Schedule 1.01 attached to this
Amendment), the Bank continues to hold a valid first priority
lien on all of the Collateral, including without limitation the
Realty, free and clear of all defects and encumbrances (except
Permitted
9
<PAGE>
Encumbrances and those exceptions to title listed in
the title policy delivered to the Bank on the Closing Date).
(i) The audited consolidated financial statements of
Consolidated for the fiscal year ended January 1, 1995, and the
unaudited financial statements of the Borrower for the four
months ended January 1, 1995, copies of which have been furnished
to the Bank, are correct and complete and present fairly the
financial condition and results of operations of the Borrower and
Consolidated as of the dates and for the periods referred to
therein. Neither the Borrower nor Consolidated has any material
direct or contingent liabilities as of the date of this Amendment
which are not provided for or reflected in such financial
statements or referred to in notes thereto, except for
(a) liabilities contemplated by this Amendment, (b) borrowings
under the Loan Documents since January 1, 1995 and
(c) liabilities incurred in the ordinary course of business since
January 1, 1995. The financial statements of the Borrower have
been prepared on a basis consistent with the most recent audited
consolidated financial statements of the Borrower previously
delivered to the Bank. There has been no material adverse change
in the business, properties or condition, financial or otherwise,
of the Borrower or Consolidated since July 22, 1994.
(j) Neither this Amendment nor the Line of Credit Guarantee
nor any reports, schedules, certificates, agreements or
instruments heretofore delivered to the Bank by the Borrower or
Consolidated or delivered simultaneously with the execution of
this Amendment contain any misrepresentation or untrue statement
of a material fact or omit to state any material fact necessary
to make this Amendment, the Line of Credit Guarantee or any such
reports, schedules, certificates, agreements or instruments not
misleading.
(k) The Borrower is Solvent, and after consummation of this
Amendment and the transactions contemplated hereby and giving
effect to all Debt incurred by the Borrower, will be Solvent.
(l) All representations and warranties by the Borrower and
Consolidated made herein and in the 1994 Agreement and the other
Loan Documents shall survive the delivery of this Amendment and
the further extension of credit by the Bank, and any
investigation at any time made by or on behalf of the Bank shall
not diminish the Bank's rights to rely thereon.
(m) The Borrower shall notify the Bank as to any equipment
leases entered into after the date hereof and shall provide
copies of the same to the Bank. At the request of the Bank, the
Borrower shall within sixty (60) days of any such request obtain
a consent and estoppel in favor of the Bank from the lessee under
any such equipment lease, in form and substance satisfactory to
the Bank.
10
<PAGE>
Section 9. Line of Credit Note. The principal amount of
the 1994 Line of Credit Note is hereby amended to be stated as,
"$10,000,000." The 1994 Line of Credit Note continues to be the
valid and binding obligation of the Borrower, is in full force
and effect and remains secured by the lien of the Bank pursuant
to the Mortgage and the Security Agreement. This is an amendment
and reaffirmation of the 1994 Line of Credit Note and is not a
novation thereof. This Amendment and the 1994 Line of Credit
Note together constitute the Line of Credit Note, and are one and
the same instrument.
Section 10. Term Note. The Term Note continues to be the
valid and binding obligation of the Borrower, is in full force
and effect, remains secured by the lien of the Bank pursuant to
the Mortgage and the Security Agreement, and remains secured by
the Unconditional Guarantee. This is a reaffirmation of the Term
Note and is not a novation thereof.
Section 11. Security Agreement. The security interest and
lien of the Bank granted pursuant to the Security Agreement
continues to secure in full the payment and performance of the
Obligations, including without limitation the full amount of
advances outstanding at any time under the Line of Credit Loan
and the Line of Credit Note, and subject to the foregoing, the
Security Agreement is hereby reaffirmed in all respects.
Section 12. Unconditional Guaranty. Consolidated hereby
reaffirms in all respects the Unconditional Guaranty of all
Obligations arising under the Term Note, on the terms and
conditions set forth in the Unconditional Guaranty.
Section 13. Mortgage. The 1994 Mortgage is hereby amended
by deleting the recital on the first page thereof in its entirety
and substituting the following:
WHEREAS, Borrower is indebted to Lender
in the principal sum of not more than Twenty-
Five Million Dollars ($25,000,000), which
indebtedness is evidenced by that certain
Line of Credit Note dated July 22, 1994 as
amended by that certain First Amendment to
Credit Agreement, Line of Credit Note and
Mortgage and Reaffirmation of Term Note,
Security Agreement, Guarantee Agreement and
Addendum to Guarantee dated March 31, 1995
made by Borrower to the order of Lender in
the amount of $10,000,000; that certain Term
Note dated July 22, 1994 made by Borrower to
the order of Lender in the amount of
$15,000,000; and all other obligations of
Borrower arising in connection with that
certain Credit Agreement dated July 22, 1994
between Borrower and
11
<PAGE>
Lender, as amended by that certain First Amendment
to Credit Agreement, Line of Credit Note and Mortgage
and Reaffirmation of Term Note, Security Agreement,
Guarantee Agreement and Addendum to Guarantee dated
March 31, 1995 (collectively, the "Credit Agreement,"
all of the foregoing collectively referred to herein
as the "Note"), providing for repayment of principal
and interest, with the balance of the indebtedness,
if not sooner paid, due and payable on
September 30, 2004.
Section 14. Bank's Expenses. The Borrower agrees to
reimburse the Bank on demand for the Bank's costs and expenses
incurred in connection with this Amendment and the transactions
contemplated hereby, including, without limitation, the
reasonable fees and expenses of the Bank's counsel.
Section 15. Confirmation of Debt. The Borrower hereby
affirms all of its indebtedness, liabilities and obligations to
the Bank under the Notes, and that such indebtedness, liabilities
and obligations are owed to the Bank in full. The Borrower and
Consolidated agree that the obligations due under the Notes shall
include all costs and expenses incurred by the Bank in connection
with this Amendment and the transactions contemplated hereby
(including without limitation the reasonable fees and expenses of
counsel) which are not reimbursed upon demand by the Bank.
Section 16. Release. The Borrower and Consolidated
acknowledge and agree that, as of the date hereof, neither has
any claim, defense or set-off right against the Bank, its
officers, directors, employees, agents, successors, assigns or
affiliates, nor any claim, defense or set-off right to the
enforcement by the Bank of the full amount of the obligations due
under the Notes. The Borrower and Consolidated hereby forever
expressly waive, release, relinquish, satisfy, acquit and
discharge the Bank, its officers, directors, employees, agents,
successors, assigns and affiliates, from any and all defenses to
payment or other defenses, set-offs, claims, counterclaims,
liability and causes of action, accrued or unaccrued, whether
known or unknown.
Section 17. No Waiver. Except as expressly provided
herein, neither the Bank's entering into this Amendment, nor its
course of dealing, shall operate as a waiver of any event of
default previously or hereafter occurring, or any right or
remedy.
Section 18. Conflicting Terms; No Other Modifications. To
the extent that any of the terms and conditions of this Amendment
are inconsistent with the terms and conditions of the 1994
Agreement or any other Loan Document, the terms and conditions of
this Amendment shall control. Otherwise, unless expressly
modified or superseded herein, all of the terms and conditions of
the 1994
12
<PAGE>
Agreement and the other Loan Documents shall remain
unaffected and in full force and effect.
Section 19. Further Assurances. The Borrower and
Consolidated agree to execute and deliver all documents and to
take all actions as the Bank may require to carry out the
purposes of this Amendment.
Section 20. This Amendment.
(a) Incorporation by Reference. The provisions of
this Amendment are incorporated into the 1994 Agreement and made
a part thereof as if fully set forth therein.
(b) Effect of Delay and Waivers; Amendments. No delay
or omission by the Bank to exercise any right or power accruing
upon any default, omission or failure of performance hereunder
shall impair any such right or power or shall be construed to be
a waiver thereof, but any such right and power may be exercised
from time to time and as often as may be deemed expedient. In
order to entitle the Bank to exercise any remedy now or hereafter
existing at law or in equity or by statute, it shall not be
necessary to give any notice, other than such notice as may be
expressly required. In the event any provision contained in this
Amendment should be breached by any party and thereafter waived
by the other party so empowered to act, such waiver shall be
limited to the particular breach hereunder. No waiver,
amendment, release or modification of this Amendment shall be
established by conduct, custom or course of dealing, but solely
by an instrument in writing duly executed by the parties
thereunto duly authorized by this Amendment.
(c) Counterparts. This Amendment may be executed
simultaneously in several counterparts, each of which shall be
deemed an original, but all of which together shall constitute
one and the same instrument.
(d) Severability. The invalidity or unenforceability
of any one or more phrases, sentences, clauses or Sections
contained in this Amendment shall not affect the validity or
enforceability of the remaining portions of this Amendment, or
any part thereof.
(e) Governing Law. This Amendment shall be governed
by and construed in accordance with the laws of the State of
North Carolina.
(f) References. The words "herein," "hereof,"
"hereunder" and other words of similar import when used in this
Amendment refer to this Amendment as a whole, and not to any
particular article, section or subsection.
13
<PAGE>
Section 21. Schedules. Schedules 1.01, 5.14 and 5.15 of
the 1994 Agreement are amended as set forth on Schedules 1.01,
5.14 and 5.15 attached hereto, incorporated herein and in the
1994 Agreement by reference as if fully set forth herein and
therein.
IN WITNESS WHEREOF, the parties have caused this
Amendment to be executed in their respective names and their
respective seals to be hereunto affixed and attested by their
duly authorized representatives, all as of the date first above
written.
SOUTH ATLANTIC CANNERS, INC.
By COCA-COLA BOTTLING CO.
CONSOLIDATED, as Manager
ATTEST:
By:
___________ Secretary Name:
Title:
(CORPORATE SEAL)
COCA-COLA BOTTLING CO. CONSOLIDATED
ATTEST:
By:
___________ Secretary Name:
Title:
(CORPORATE SEAL)
WACHOVIA BANK OF NORTH CAROLINA, N.A.
By:
Name:
Title:
293\145975
14
<PAGE>
ADDENDUM I TO FIRST AMENDMENT TO CREDIT AGREEMENT, LINE OF
CREDIT NOTE AND MORTGAGE, AND REAFFIRMATION OF TERM NOTE,
SECURITY AGREEMENT, GUARANTY AGREEMENT AND ADDENDUM TO
GUARANTY AGREEMENT
An opinion of counsel for the Borrower and Consolidated as
to the following matters:
(i) each of the Borrower and Consolidated is duly organized,
validly existing and in good standing under the laws of the state
of its incorporation and is duly qualified to transact business
in every jurisdiction where, by the nature of its business, such
qualification is necessary;
(ii) each of the Borrower and Consolidated has all corporate
powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now
conducted;
(iii) each of the Borrower and Consolidated has full power and
authority to enter into this Amendment, and Consolidated has full
power and authority to enter into the Line of Credit Guarantee,
all such action having been duly authorized by all proper and
necessary corporate action;
(iv) to the best knowledge of such counsel, neither the execution
of this Amendment or the Line of Credit Guarantee, nor the
fulfillment of or compliance with their respective provisions and
terms, will (A) conflict with, or result in a breach of the
terms, conditions or provisions of, or constitute a violation of
or default under, or require any approval under, any applicable
law, regulation, judgment, writ, order or decree binding on the
Borrower or Consolidated, or the certificate of incorporation,
bylaws or other organizational documents of the Borrower or
Consolidated, or any agreement or instrument to which the
Borrower or Consolidated is now a party or by which either of
them or any of their respective properties are bound or affected,
or (B) create any lien, charge or encumbrance upon any of the
property or assets of the Borrower or Consolidated pursuant to
the terms of any agreement or instrument to which the Borrower or
Consolidated is a party or by which either of them or any of
their respective properties are bound except as contemplated
hereby;
(v) this Amendment and the Line of Credit Guarantee have each
been duly executed and delivered by each of the Borrower and
Consolidated, as the case may be, and each is the legal, valid
and binding obligation of each of the Borrower and Consolidated,
as the case may be, enforceable against each of them in
accordance with its terms;
(vi) the Collateral is not subject to any liens or encumbrances
as of the date hereof except the lien of the Bank and except as
otherwise referred to on Schedule 1.01 of the Agreement;
<PAGE>
(vii) to the best knowledge of such counsel, there is no action,
suit or proceeding pending or threatened against or affecting the
Borrower or Consolidated before any court or arbitrator or any
governmental authority which could materially adversely affect
the business, consolidated financial position or consolidated
results of operations of the Borrower and Consolidated, or which
in any manner draws into question the validity of, or could
materially impair the ability of the Borrower to perform its
obligations under the Agreement or the ability of Consolidated to
perform its obligations under the Unconditional Guarantee or the
Line of Credit Guarantee; and
(viii) the Bank continues to hold a valid first priority lien on
all of the Collateral, including without limitation the Realty,
free and clear of all defects and encumbrances (except Permitted
Encumbrances and those exceptions to title listed in the title
policy delivered to the Bank on the Closing Date).
293\145975
<PAGE>
EXHIBIT 10.9
<PAGE>
WACHOVIA
Guaranty Agreement
WHEREAS, the undersigned has requested WACHOVIA BANK OF NORTH CAROLINA, N.A.
(herein called "Bank") to extend credit or make certain financial
accommodations to SOUTH ATLANTIC CANNERS, INC., a South Carolina corporation
(herein called "Borrower") or to renew or extend, in whole or in part,
existing indebtedness or financial accommodations of the Borrower to the
Bank, and the Bank has extended credit or extended or renewed existing
indebtedness or made financial accommodations and/or may in the future extend
credit or extend or renew existing indebtedness or make certain financial
accommodations by reason of such request and in reliance upon this guaranty;
NOW, THEREFORE, in consideration of such credit extended or renewed and/or
to be extended or renewed or such financial accommodations made or to be
made in its discretion by the Bank to the Borrower (whether to the same,
greater or lesser extent than any limit, if applicable, of this guaranty),
in consideration of $5.00 and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the undersigned
hereby unconditionally guarantees to the Bank and any of "Bank's Affiliates",
as hereinafter defined (the Bank and the Bank's Affiliates being hereinafter
collectively and/or individually, as the context shall require, referred
to as "Lender"), and their successors, endorsees, transferees and assigns,
the punctual payment when due, whether by acceleration or otherwise, and
at all times thereafter of (a) all debts, liabilities and obligations
whatsoever of the Borrower to the Lender, now existing or hereafter coming
into existence, whether joint or several, whether created directly or
acquired by endorsement, assignment or otherwise, whether absolute or
contingent, secured or unsecured, due or not due, including but not being
limited to notes, checks, drafts, credits, advances and obligations to
reimburse draws against letters of credit; (b) accrued but unpaid interest
on such debts, liabilities and obligations, whether accruing before or after
any maturity(ies) thereof; and (c) reasonable attorneys' fees (*15% of the
then outstanding principal and interest of the indebtedness, to the extent
not prohibited by law) if any such debts, liabilities or obligations
of the Borrower are collected, or the liability of the undersigned hereunder
enforced, by or through any attorney at law (all of (a), (b) and (c) being
hereinafter referred to as the "Obligations"). As used herein, "Bank's
Affiliates" means any entity or entities now or hereafter directly or
indirectly controlled by Wachovia Corporation or any successor thereto.
References herein to Borrower shall be deemed to include any successor
corporations to Borrower, if Borrower is a corporation, or any reconstituted
partnerships of Borrower, if Borrower is a partnership.
*not to exceed
The undersigned consents that, at any time, and from time to time, either with
or without consideration, the whole or any part of any security now or
hereafter held for any Obligations may be substituted, exchanged, compromised,
impaired, released, or surrendered with or without consideration; the time
or place of payment of any Obligations or of any security thereof may be
changed or extended, in whole or in part, to a time certain or otherwise,
and may be renewed or accelerated, in whole or in part; the Borrower may be
granted indulgences generally; any of the provisions of any note or other
instrument evidencing any Obligations or any security therefor may be
modified or waived; any party liable for the payment thereof (including but
not being limited to any co-guarantor) may be granted indulgences or
released; neither the death, termination of existence, bankruptcy, incapacity,
lack of authority nor disability of the Borrower or any one or more of the
guarantors, including any of the undersigned, shall affect the continuing
obligation of any other guarantor, including any of the undersigned, and
that no claim need be asserted against the personal representative,
guardian, custodian, trustee or debtor in bankruptcy or receiver
of any deceased, incompetent, bankrupt or insolvent guarantor; any
deposit balance to the credit of the Borrower or any other party
liable for the payment of the Obligations or liable upon any security
therefor may be released, in whole or in part, at, before and/or after the
stated, extended or accelerated maturity of any Obligations; and the Lender
may release, discharge, compromise or enter into any accord and satisfaction
with respect to any collateral for the Obligations, or the liability of the
Borrower or any of the undersigned, or any liability of any other person
primarily or secondarily liable on any of the Obligations, all without
notice to or further assent by the undersigned, who shall remain bound hereon,
notwithstanding any such exchange, compromise, surrender, extension, renewal,
acceleration, modification, indulgence, release, discharge or accord and
satisfaction.
Without limiting any of the foregoing, in the event of death, incompetency,
or dissolution of the Borrower, or should the Borrower become insolvent (as
defined by the North Carolina Uniform Commercial Code as in effect at the
time), or if a petition in bankruptcy be filed by or against the Borrower,
or if a receiver be appointed for any part of the property or assets of the
Borrower, or if any final judgment for money damages be entered against the
Borrower in a court of competent jurisdiction and remain unsatisfied for a
period of sixty (60) days or more, in the amount of $250,000 or more.
The undersigned expressly waives: (a) notice of acceptance of this guaranty and
of all extensions or renewals of credit or other financial accommodations to
the Borrower; (b) presentment and demand for payment of any of the Obligations;
(c) protest and notice of dishonor or of default to the undersigned or to any
other party with respect to any of the Obligations or with respect to any
security therefor; (d) any invalidity or disability in whole or in part at the
time of the acceptance of, or at any time with respect to, any security for
the Obligations or with respect to any party primarily or secondarily liable
for the payment of the Obligations to the Lender; (e) the fact that any
security for the Obligations may at any time or from time to time be in default
or be inaccurately estimated or may deteriorate in value for any cause
whatsoever; (f) any diligence in the creation or perfection of a security
interest or collection or protection of or realization upon the Obligations or
any security therefor, any liability hereunder, or any party primarily or
secondarily liable for the Obligations or any lack of commercial reasonableness
in dealing with any security for the Obligations; (g) any duty or obligation
on the part of the Lender to ascertain the extent or nature of any security for
the Obligations, or any insurance or other rights respecting such security,
or the liability of any party primarily or secondarily liable for the
Obligations, or to take any steps or action to safeguard, protect, handle,
obtain or convey information respecting, or otherwise follow in any manner, any
such security, insurance or other rights; (h) any duty or obligation on the
Lender to proceed to collect the Obligations from, or to commence an action
against, the Borrower, any other guarantor, or any other person, or to resort
to any security or to any balance of any deposit account or credit on the books
of the Lender in favor of the Borrower or any other person, despite any notice
or request of the undersigned to do so; (i) any rights of the undersigned
pursuant to North Carolina General Statute Section 26-7 or any similar or
subsequent law; (j) to the extent not prohibited by law, the right to assert
any of the benefits under any statute providing appraisal or other rights
which may reduce or prohibit any deficiency judgments in any foreclosure
or other action; (k) all other notices to which the undersigned might
otherwise be entitled; and (l) demand for payment under this guaranty.
This is a guaranty of payment and not of collection. The liability of the
undersigned on this guaranty shall be continuing, direct and immediate and
not conditional or contingent upon either the pursuit of any remedies against
the Borrower or any other person or foreclosure of any security interests
or liens available to the Lender, its successors, endorsees or assigns. The
Lender may accept any payment(s), plan for adjustment of debts, plan for
reorganization or liquidation, or plan of composition or extension proposed
by, or on behalf of, the Borrower or any other guarantor without in any way
affecting or discharging the liability of the undersigned hereunder. If the
Obligations are partially paid, the undersigned shall remain liable for any
balance of such Obligations. This guaranty shall be revived and reinstated
in the event that any payment received by Lender on any Obligation is required
to be repaid or rescinded under present or future federal or state law or
regulation relating to bankruptcy, insolvency or other relief of debtors. The
undersigned agrees to furnish promptly to the Bank annual financial statements
and such other current financial information as the Bank may reasonably request
from time to time.
The undersigned expressly represents and acknowledges that loans and other
financial accommodations by the Lender to the Borrower are and will be to the
direct interest and advantage of the undersigned.
The Lender may, without notice of any kind, sell, assign or transfer all or
any of the Obligations, and in such event each and every immediate and
successive assignee, transferee, or holder of all or any of the Obligations
shall have the right to enforce this guaranty, by suit or otherwise, for
the benefit of such assignee, transferee or holder, as fully as if such
assignee, transferee or holder were herein by name specifically given such
rights, powers and benefits, but the Lender shall have an
2109-NC (3/93) Wachovia Bank of North Carolina, N.A.
<PAGE>
unimpaired right, prior and superior to that of any such assignee, transferee
or holder, to enforce this guaranty for the benefit of the Lender, as to
so much of the Obligations as it has not sold, assigned or transferred.
No delay or failure on the part of the Lender in the exercise of any right
or remedy shall operate as a waiver thereof, and no single or partial
exercise by the Lender of any right or remedy shall preclude other or further
exercise thereof or the exercise of any other right or remedy.
For the purpose of this guaranty, the Obligations shall include all debts,
liabilities and obligations of the Borrower to the Lender, notwithstanding
any right or power of the Borrower or anyone else to assert any claim or
defense as to the invalidity or unenforceability thereof, and no such claim or
defense shall impair or affect the obligations and liabilities of the
undersigned hereunder. Without limiting the generality of the foregoing, if
the Borrower is a corporation, partnership, joint venture, trust or other form
of business organization, this guaranty covers all Obligations purporting to
be made in behalf of such organization by any officer or agent of the same,
without regard to the actual authority of such officer or agent. The term
"corporation" shall include associations of all kinds and all purported
corporations, whether or not correctly and legally chartered and organized.
To the extent not prohibited by law, the undersigned hereby grants to the
Lender a security interest in and security title and hereby assigns, pledges,
transfers and conveys to Lender (i) all property of the undersigned of every
kind or description now or hereafter in the possession or control of the
Lender, exclusive of any such property in the possession or control of the
Lender as fiduciary other than as agent, for any reason including, without
limitation, all cash, stock or other dividends and all proceeds thereof, and
all rights to subscribe for securities incident thereto and any substitutions
or replacements therefor and (ii) any balance or deposit accounts of the
undersigned, whether such accounts be general or special, or individual or
multiple party, and upon all drafts, notes, or other items deposited for
collection or presented for payment by the undersigned with the Lender,
exclusive of any such property in the possession or control of the Lender
as a fiduciary other than as agent, and the Lender may at any time, without
demand or notice, appropriate and apply any of such to the payment of any
of the Obligations, whether or not due, except for other indebtedness,
obligations and liabilities owing to Lender or any of Lender's Affiliates
that constitute open-end credit under, or are subject to, the requirements
of the Truth-in-Lending Act and Federal Reserve Board Regulation Z and any
applicable state consumer laws.
Any amount received by the Lender from whatever source and applied by it
toward the payment of the Obligations shall be applied in such order of
application as the Lender may from time to time elect.
This guaranty shall bind and inure to the benefit of the Lender, its
successors and assigns, and likewise shall bind and inure to the benefit
of the undersigned, their heirs, executors, administrators, successors and
assigns. If more than one person shall execute this guaranty or a similar,
contemporaneous guaranty, the term "undersigned," shall mean, as used
herein, all parties executing this guaranty and such similar guaranties
and all such parties shall be liable, jointly and severally, one with the
other and with the Borrower, for each of the undertakings, agreements,
obligations, covenants and liabilities provided for herein with respect
to the undersigned. This guaranty contains the entire agreement and there
is no understanding that any other person shall execute this or a
similar guaranty. Furthermore, no course of dealing between the parties, no
usage of trade, and no parol or extrinsic evidence shall be used to
supplement or modify any terms of this guaranty; nor are there any
conditions to the complete effectiveness of this guaranty.
This guaranty shall be deemed accepted by Lender in the State of North
Carolina. The parties agree that this guaranty shall be deemed, made,
delivered, performed and accepted by Lender in the State of North Carolina
and shall be governed by the laws of the State of North Carolina. Wherever
possible each provision of this guaranty shall be interpreted in such
manner as to be effective and valid under applicable law, but if any
provision of this guaranty shall be prohibited by or invalid under such law,
such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this guaranty.
The undersigned (a) submits to personal jurisdiction in the State of
North Carolina, the courts thereof and any United States District Court
sitting therein, for the enforcement of this guaranty, (b) waives any and all
personal rights under the law of any jurisdiction to object on any basis
(including, without limitation, inconvenience of forum) to jurisdiction or
venue within the State of North Carolina for the purpose of litigation to
enforce this guaranty, and (c) agrees that service of process may be made
upon the undersigned by first class postage prepaid mail, addressed to the
undersigned at the latest address of the undersigned known to the Bank
(or at such other address as the undersigned may specify for the purpose by
notice to the Bank). Nothing herein contained, however, shall prevent the
Lender from bringing any action or exercising any rights against any
security and against the Borrower personally, and against any assets of the
Borrower, within any other state or jurisdiction.
This guaranty shall remain in full force and effect as to each of the
undersigned unless and until terminated as to one or more of the undersigned
by notice to that effect actually received by the Bank, by registered mail,
addressed to Bank at 301 N. Main St., Suite 32092, Winston-Salem, NC 27101,
but no such notice shall affect or impair the liabilities hereunder of
such of the undersigned who gives or on whose behalf is given any such
notice for the Obligations existing at the date of receipt by the Bank of
such notice, any renewals, modifications, or extensions thereof (whether made
before or after such notice is received), any interest thereon, or any
costs or expenses, including without limitation, reasonable attorneys' fees
incurred in the collection thereof or any future advances made by Lender
to Borrower as required or permitted pursuant to the terms of the instruments,
documents or agreements evidencing or providing for the Obligations. Any
such notice of termination by or on behalf of any of the undersigned shall
affect only that person and shall not affect or impair the liabilities
and obligations hereunder of any other person.
The terms and provisions of any addendum attached hereto are incorporated
herein by reference and made a part hereof.
IN WITNESS WHEREOF, each of the undersigned has executed this guaranty
under seal, this March 31, 1995.
Witness: (Seal)
(Individual Guarantor)
(Seal)
(Individual Guarantor)
Attest: COCA-COLA BOTTLING CO. CONSOLIDATED
(Name of Corporation or Partnership)
Patricia A. Gill By Brenda B. Jackson (Seal)
Title Assistant Secretary Title Vice President & Treasurer
[Corporate Seal] Wachovia Bank of North Carolina, N.A.
<PAGE>
WACHOVIA
Addendum to Guaranty Agreement
This document, upon its acceptance below by WACHOVIA BANK OF NORTH
CAROLINA, N.A. (hereinafter referred to as the "Bank"), shall constitute an
addendum to the Guaranty Agreement, dated March 31, 1995 (herein referred
to as the "Guaranty Agreement") from COCA-COLA BOTTLING CO. CONSOLIDATED,
a Delaware corporation (herein referred to as the "Guarantor(s)") which
provides for the guaranty by Guarantor(s) of the Obligations of SOUTH
ATLANTIC CANNERS, INC., a South Carolina corporation herein referred to
as "Borrower") to Lender, and shall be incorporated in the Guaranty
Agreement by reference and made a part thereof. All capitalized terms
used in this Addendum which are defined in the Guaranty Agreement shall
have the meanings given such terms in the Guaranty Agreement. Only those
sections below which have been checked and completed are included in the
Addendum.
[ ] Notwithstanding any contrary provision of the Guaranty Agreement,
the liability of the Guarantor(s) under the Guaranty Agreement for the
Obligations of the Borrower shall not exceed at any one time an aggregate
of $ ; provided, however, that this limitation shall not
apply (a) to that portion of the Obligations of the Borrower which consists
of accrued but unpaid interest and attorneys' fees incurred in the collection
of the Obligations or the enforcement of liability of the Guarantor(s)
under the Guaranty Agreement and (b) to the liabilities of the Guarantor(s)
under any other guaranties executed by the Guarantor(s) for the benefit of
the Lender, the guaranty of the Guarantor(s) under the Guaranty Agreement
being cumulative with all such other guaranties.
[x] Notwithstanding any contrary provision of the Guaranty Agreement, the
liability of the Guarantor(s) under the Guaranty Agreement for the
Obligations of the Borrower shall be limited to (i) the principal and
interest of that certain promissory note dated July 22, 1994, payable
to the Bank, in the original principal amount of $15,000,000.00, and
any modifications, renewals or extensions thereof, plus (a) reasonable
attorneys' fees if such note is collected, or the liability of the
Guarantor(s) under the Guaranty Agreement is enforced, by or through
any attorney-at-law and (b) the Obligations of the Borrower under any
collateral documents securing such promissory note.*
[ ] To secure the liabilities of the Guarantor(s) to the Lender under
the Guaranty Agreement, together with any other indebtedness, liabilities
and obligations of Guarantor(s), or any of them, to the Lender, now
existing or hereafter incurred or arising, except for other indebtedness,
obligations and liabilities owing to Lender or any of Lender's Affiliates
that constitute open-end credit under, or are subject to, the disclosure
requirements of the Truth-in-Lending Act and the Federal Reserve Board
Regulation Z or any applicable state consumer protection laws, the Guarantor(s)
each hereby grant to the Lender a security interest in and security title
to, and does hereby assign, pledge, transfer and convey to Lender a
continuing general primary lien upon, the following described property
in addition to that granted in the Guaranty:
* See Exhibit A attached hereto and made a part hereof.
Each Guarantor agrees that the security interest and security title granted
hereby shall remain in full force and effect and shall not be released
until all Obligations of the Borrower and all indebtedness, liabilities
and obligations of the Guarantor(s) secured hereby have been indefeasibly
paid in full and such payments are no longer subject to rescission, recovery
or repayment upon the bankruptcy, insolvency, reorganization, moratorium,
receivership or similar proceeding affecting the Borrower, the Guarantor(s)
or any other person.
Witness: (Seal)
(Individual Guarantor)
(Seal)
(Individual Guarantor)
Attest: COCA-COLA BOTTLING CO. CONSOLIDATED
(Name of Corporation or Partnership)
Patricia A. Gill By Brenda B. Jackson (Seal)
Title Assistant Secretary Title Vice President & Treasurer
[Corporate Seal] Accepted
WACHOVIA BANK OF NORTH CAROLINA, N.A.
By Kenneth R. Smith Jr.
Title Senior Vice President
Wachovia Bank of North Carolina, N.A.
<PAGE>
EXHIBIT A TO ADDENDUM TO GUARANTY AGREEMENT
OF COCA-COLA BOTTLING CO. CONSOLIDATED
MARCH 31, 1995
* and (ii) the principal and interest of that certain Line of
Credit Note (the "Line of Credit Note") dated July 22, 1994,
payable to the Bank, as amended by the First Amendment to Credit
Agreement, Line of Credit Note and Mortgage, and Reaffirmation of
Term Note, Security Agreement, Guaranty Agreement and Addendum to
Guaranty Agreement dated as of March 31, 1995, in the new
principal amount of $10,000,000, and any modifications, renewals
or extensions thereof, plus (a) reasonable attorneys' fees if
such note is collected or the liability of the Guarantor under
the Guaranty Agreement is enforced, by or through any attorney-
at-law, and (b) the Obligations of the Borrower under any
collateral documents securing the Line of Credit Note; provided,
that only with respect to said Line of Credit Note, (x) the
Guarantor's guaranty obligations hereunder are limited to
principal amounts outstanding under the Line of Credit Note at
any time in excess of $5,000,000, together with accrued interest
on such principal amounts; (y) the Guarantor acknowledges and
affirms that this is a guaranty of collection, and that upon the
occurrence of an Event of Default under any of the Loan
Documents, or event which with the giving of notice, passage of
time or both would become an Event of Default, and after the
expiration of any applicable cure period under the Loan
Documents, the Guarantor shall immediately pay over to the Bank
all principal amounts outstanding under the Line of Credit Note
in excess of $5,000,000, together with accrued interest on such
principal amounts; and (z) after a default and payment by the
Guarantor as referred to in the preceding clause (y), at such
time as the Bank has collected the full amount of all Obligations
owed to the Bank by the Borrower, the Bank will assign its rights
to the Guarantor, and the Guarantor will become subrogated to the
rights of the Bank for the difference between amounts owed by the
Borrower to the Bank and amounts collected by the Bank from the
Borrower, and for any other amounts paid by Guarantor hereunder.
COCA-COLA BOTTLING CO. CONSOLIDATED
ATTEST:
_________________________ By: _______________________________
______________, Secretary Name:
Title:
[CORPORATE SEAL]
WACHOVIA BANK OF NORTH CAROLINA,
N.A.
By: _______________________________
Name:
Title:
<PAGE>
EXHIBIT 10.10
<PAGE>
TREASURY BOND 7.57%
RENTAL FACTOR 3.31328%
LEASE FUNDING NO: 95002
LEASE SUPPLEMENT TO
MASTER EQUIPMENT LEASE (the "Master Lease")
BETWEEN
COCA-COLA FINANCIAL CORPORATION ("Lessor")
AND
COCA-COLA BOTTLING CO. CONSOLIDATED ("Lessee")
DATED: February 9, 1993
1. Term
The "Initial Term" shall commence on the 9th day of March, 1995 ("Lease
Commencement Date"); and will continue for a term of one hundred eight (108)
months ending on 9th day of March, 2004.
2. Rent
(a) BASIC RENT: As Basic Rent hereunder, Lessee shall pay an aggregate
rental charge of $927,129.96, payable in arrears in thirty-six (36) quarterly
installments of $25,753.61 each, beginning on June 9, 1995 and continuing on the
same day of each calendar quarter thereafter during the Initial Term, with the
final such installment being due and payable on March 9, 2004.
(b) INTERIM RENT: Lessee shall pay Lessor Interim Rent on all payments
made by Lessor for Equipment from the date of Lessor's payment, if paid prior
to the Lease Commencement Date, until the Lease Commencement Date. Interim Rent
shall be calculated from the date of such payment on the basis of a rate which
shall be the lesser of (i) a daily rate of .00037 per dollar so paid by Lessor,
(which rate is based on the rate implied by the Basic Rent amount set forth
above), or (ii) a per annum rate applied to the amount so paid by Lessor equal
to the "Prime Rate" as published in The Wall Street Journal on the last business
day prior to the date of such payment by Lessor. Interim Rent shall be payable
in full on the Lease Commencement Date.
(c) SUPPLEMENTAL RENT: In addition to Basic Rent and Interim Rent,
Lessee shall pay Lessor all Supplemental Rent provided for in the Master Lease
including, without limitation, all applicable sales and use taxes.
<PAGE>
3. Location of the Equipment
The Location(s) of the Equipment leased is (are) set forth on Exhibit "A"
attached hereto.
4. Equipment Leased
The Equipment leased is described on each equipment invoice and
installation notification subject to this Lease Supplement. The supporting
equipment invoices, installation notifications and equipment serial numbers
are summarized on Exhibit "A" attached hereto.
5. Stipulated Loss Value
The "Stipulated Loss Value" of each item of Equipment, as of any
particular date of computation, shall be determined with reference to Exhibit
"B" attached hereto by multiplying the original cost of such item of Equipment
as stated on Exhibit "A" hereto by the percentage of the cost of such item set
forth opposite the applicable month number on Exhibit "B" hereto. For this
purpose the applicable month number means the number of months or partial
months elapsed since the Lease Commencement Date. If only a portion of an item
of Equipment is affected by any event causing calculation of "Stipulated Loss
Value" as specified in the Master Lease, and the cost of such portion of the
Equipment cannot be readily determined from the original cost of such item set
forth on Exhibit A, then the Stipulated Loss Value for such portion of the
Equipment shall be as reasonably calculated by Lessor, with written notice of
such amount being sent to the Lessee by Lessor.
6. Lease
This Lease Supplement is executed and delivered under and pursuant to the
terms of the Master Lease, and this Lease Supplement shall be deemed to be a
part of, and shall be governed by the terms and conditions of the Master Lease.
For purposes of this Lease Supplement, capitalized terms which are used herein
but which are not otherwise defined herein shall have the meanings ascribed to
such terms in the Master Lease.
<PAGE>
IN WITNESS WHEREOF, Lessee has caused this Lease Supplement to be duly executed
and delivered by its duly authorized officers, this 9th day of March, 1995.
LESSEE:
COCA-COLA BOTTLING CO. CONSOLIDATED
(CORPORATE SEAL) By: /s/ Brenda B. Jackson
Attest:Patricia A. Gill Title: Vice President & Treasurer
Title:Assistant Secretary
Accepted in Atlanta, Georgia, this 30 day of MARCH, 1995
LESSOR
COCA-COLA FINANCIAL CORPORATION
By: Andre Balfour
Title: OPERATIONS MANAGER
<PAGE>
EXHIBIT 10.11
<PAGE>
TREASURY BOND 7.23%
RENTAL FACTOR 3.25759%
LEASE FUNDING NO: 95003
LEASE SUPPLEMENT TO
MASTER EQUIPMENT LEASE (the "Master Lease")
BETWEEN
COCA-COLA FINANCIAL CORPORATION ("Lessor")
AND
COCA-COLA BOTTLING CO. CONSOLIDATED ("Lessee")
DATED: February 9, 1993
1. Term
The "Initial Term" shall commence on the 10th day of April, 1995 ("Lease
Commencement Date"); and will continue for a term of one hundred eight (108)
months ending on 10th day of April, 2004.
2. Rent
(a) BASIC RENT: As Basic Rent hereunder, Lessee shall pay an aggregate
rental charge of $1,360,653.12, payable in arrears in thirty-six (36) quarterly
installments of $37,795.92 each, beginning on July 10, 1995 and continuing on
the same day of each calendar quarter thereafter during the Initial Term, with
the final such installment being due and payable on April 10, 2004.
(b) INTERIM RENT: Lessee shall pay Lessor Interim Rent on all payments
made by Lessor for Equipment from the date of Lessor's payment, if paid prior to
the Lease Commencement Date, until the Lease Commencement Date. Interim Rent
shall be calculated from the date of such payment on the basis of a rate which
shall be the lesser of (i) a daily rate of .00037 per dollar so paid by Lessor,
(which rate is based on the rate implied by the Basic Rent amount set forth
above), or (ii) a per annum rate applied to the amount so paid by Lessor equal
to the "Prime Rate" as published in The Wall Street Journal on the last business
day prior to the date of such payment by Lessor. Interim Rent shall be payable
in full on the Lease Commencement Date.
(c) SUPPLEMENTAL RENT: In addition to Basic Rent and Interim Rent,
Lessee shall pay Lessor all Supplemental Rent provided for in the Master Lease
including, without limitation, all applicable sales and use taxes.
<PAGE>
3. Location of the Equipment
The location(s) of the Equipment leased is (are) set forth on Exhibit "A"
attached hereto.
Equipment Leased
The Equipment leased is described on each equipment invoice and
installation notification subject to this Lease Supplement. The supporting
equipment invoices, installation notifications and equipment serial numbers
are summarized on Exhibit "A" attached hereto.
5. Stipulated Loss Value
The "Stipulated Loss Value" of each item of Equipment, as of any
particular date of computation, shall be determined with reference to Exhibit
"B" attached hereto by multiplying the original cost of such item of Equipment
as stated on Exhibit "A" hereto by the percentage of the cost of such item set
forth opposite the applicable month number on Exhibit "B" hereto. For this
purpose the applicable month number means the number of months or partial
months elapsed since the Lease Commencement Date. If only a portion of an item
of Equipment is affected by any event causing calculation of "Stipulated Loss
Value" as specified in the Master Lease, and the cost of such portion of the
Equipment cannot be readily determined from the original cost of such item set
forth on Exhibit A, then the Stipulated Loss Value for such portion of the
Equipment shall be as reasonably calculated by Lessor, with written notice of
such amount being sent to the Lessee by Lessor.
6. Lease
This Lease Supplement is executed and delivered under and pursuant to the
terms of the Master Lease, and this Lease Supplement shall be deemed to be a
part of, and shall be governed by the terms and conditions of the Master Lease.
For purposes of this Lease Supplement, capitalized terms which are used herein
but which are not otherwise defined herein shall have the meanings ascribed to
such terms in the Master Lease.
<PAGE>
IN WITNESS WHEREOF, Lessee has caused this Lease Supplement to be duly executed
and delivered by its duly authorized officers, this 10th day of April, 1995.
LESSEE:
COCA-COLA BOTTLING CO. CONSOLIDATED
(CORPORATE SEAL) By: /s/ Brenda B. Jackson
Attest:Patricia A. Gill Title: Vice President & Treasurer
Title:Assistant Secretary
Accepted in Atlanta, Georgia, this 28 day of April, 1995
LESSOR
COCA-COLA FINANCIAL CORPORATION
By: Andre Balfour
Title: OPERATIONS MANAGER
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements as of and for the three months ended April 2, 1995 and
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> APR-02-1995
<CASH> 2,139
<SECURITIES> 0
<RECEIVABLES> 9,325
<ALLOWANCES> 402
<INVENTORY> 31,884
<CURRENT-ASSETS> 60,051
<PP&E> 329,632
<DEPRECIATION> 143,635
<TOTAL-ASSETS> 661,774
<CURRENT-LIABILITIES> 73,507
<BONDS> 436,400
<COMMON> 12,055
0
0
<OTHER-SE> 21,559
<TOTAL-LIABILITY-AND-EQUITY> 661,774
<SALES> 170,977
<TOTAL-REVENUES> 170,977
<CGS> 98,903
<TOTAL-COSTS> 98,903
<OTHER-EXPENSES> 59,384
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,437
<INCOME-PRETAX> 3,289
<INCOME-TAX> 1,332
<INCOME-CONTINUING> 1,957
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,957
<EPS-PRIMARY> .21
<EPS-DILUTED> 0
</TABLE>
