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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1995
Commission file number 0-9286
COCA-COLA BOTTLING CO. CONSOLIDATED
(Exact name of Registrant as specified in its charter)
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DELAWARE 56-0950585
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
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1900 REXFORD ROAD,
CHARLOTTE, NORTH CAROLINA 28211
(Address of principal executive offices)
(Zip Code)
(704) 551-4400
(Registrant's telephone number, including area code)
Securities Registered Pursuant to Section 12(b) of the Act: None
Securities Registered Pursuant to Section 12(g) of the Act:
Common Stock, $l.00 par value
(Title of Class)
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 by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements,
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
State the aggregate market value of voting stock held by non-affiliates of the
Registrant.
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MARKET VALUE AS OF MARCH 14, 1996
Common Stock, $1 par value $241,681,000
Class B Common Stock, $1 par value *
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* No market exists for the shares of Class B Common Stock, which is neither
registered under Section 12 of the Act nor subject to Section 15(d) of the Act.
The Class B Common Stock is convertible into Common Stock on a share for share
basis at the option of the holder.
Indicate the number of shares outstanding of each of the Registrant's classes
of common stock, as of the latest practicable date.
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CLASS OUTSTANDING AS OF MARCH 14, 1996
Common Stock, $1 Par Value 7,958,059
Class B Common Stock, $1 Par Value 1,336,362
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DOCUMENTS INCORPORATED BY REFERENCE
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Proxy Statement to be filed pursuant to Section 14 of the Exchange Act with respect
to the 1996 Annual Meeting of Shareholders.......................................................... Part III, Items 10-13
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PART I
ITEM 1 -- BUSINESS
INTRODUCTION AND RECENT DEVELOPMENTS
Coca-Cola Bottling Co. Consolidated, a Delaware corporation (the
"Company"), is engaged in the production, marketing and distribution of
carbonated and noncarbonated beverages, primarily products of The Coca-Cola
Company, Atlanta, Georgia ("The Coca-Cola Company"). The Company has been in the
soft drink manufacturing business since 1902.
The Company has grown significantly since 1984. In 1984, net sales were
$130.2 million. In 1995, net sales were $761.9 million. The Company's franchise
territory was concentrated in North Carolina prior to 1984. A series of
acquisitions since 1984 have significantly expanded the Company's franchise
territory. The most significant acquisitions were as follows:
(Bullet) February 8, 1985 -- Acquisition of various subsidiaries of Wometco
Coca-Cola Bottling Company which included franchise territories in
parts of Alabama, Tennessee and Virginia. Other noncontiguous
territories acquired in this acquisition were subsequently sold.
(Bullet) January 27, 1989 -- Acquisition of all of the outstanding stock of
The Coca-Cola Bottling Company of West Virginia, Inc. which
included franchise territory covering most of the state of West
Virginia.
(Bullet) December 20, 1991 -- Acquisition of all of the outstanding capital
stock of Sunbelt Coca-Cola Bottling Company, Inc. ("Sunbelt")
which included franchise territory covering parts of North
Carolina and South Carolina.
(Bullet) July 2, 1993 -- Formation of Piedmont Coca-Cola Bottling
Partnership ("Piedmont"). Piedmont is a joint venture owned
equally by the Company and The Coca-Cola Company through their
respective subsidiaries. Piedmont distributes and markets soft
drink products, primarily in parts of North Carolina and South
Carolina. The Company sold and contributed certain franchise
territories to Piedmont upon formation. The Company currently
provides part of the finished product requirements for Piedmont
and receives a fee for managing the operations of Piedmont
pursuant to a Management Agreement.
These transactions, along with several smaller acquisitions of additional
franchise territory, have resulted in the Company becoming the second largest
Coca-Cola bottler in the United States.
The Coca-Cola Company currently owns an economic interest of approximately
30% and a voting interest of approximately 23% in the Company. The Company sold
1,355,033 shares of newly issued Common Stock and 269,158 shares of Class B
Common Stock to The Coca-Cola Company in June 1987. An additional 1.1 million
shares of the Company's Common Stock were issued to The Coca-Cola Company on
January 27, 1989 in exchange for outstanding stock of The Coca-Cola Bottling
Company of West Virginia, Inc., and The Coca-Cola Company purchased an
additional 33,464 shares of Common Stock on June 25, 1993 pursuant to the
exercise of its right to maintain its proportionate voting and equity interests
in the Company under the terms of a Stock Rights and Restrictions Agreement
dated January 27, 1989.
The Company considers acquisition opportunities for additional territories
on an ongoing basis. To achieve its goals, further purchases and sales of
franchise rights and entities possessing such rights and other related
transactions designed to facilitate such purchases and sales may occur.
GENERAL
In its soft drink operations, the Company holds franchises under which it
produces and markets, in certain regions, carbonated soft drink products of The
Coca-Cola Company, including Coca-Cola classic, caffeine free Coca-Cola classic,
diet Coke, caffeine free diet Coke, Cherry Coke, TAB, Sprite, diet Sprite, Mello
Yello, diet Mello Yello, Mr. PiBB, Barq's Root Beer, Fresca, Minute Maid orange
and diet Minute Maid orange sodas. The Company also distributes and markets
POWERaDE, ready-to-drink Nestea, Fruitopia and Minute Maid Juices To Go in
certain of its markets. The Company produces and markets Dr Pepper in most of
its regions. Various other products, including Welch's flavors, Seagrams'
products and Sundrop are produced and marketed in one or more of the Company's
regions under franchise agreements with the companies that manufacture the
concentrate for those beverages. In addition, the Company also produces soft
drinks for other Coca-Cola franchise bottlers.
The Company's principal soft drink is Coca-Cola classic. During the last
three fiscal years, sales of products under the trademark Coca-Cola have
accounted for more than half of the Company's soft drink sales. In total, the
products of The Coca-Cola Company accounted for approximately 90% of the
Company's soft drink sales during fiscal 1995.
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FRANCHISES
The Company's franchises from The Coca-Cola Company entitle the Company to
produce and market The Coca-Cola Company's soft drinks in bottles, cans and five
gallon, pressurized, pre-mix containers. The Company is one of many companies
holding such franchises. The Coca-Cola Company is the sole owner of the secret
formulas pursuant to which the primary components (either concentrates or
syrups) of Coca-Cola trademark beverages are manufactured. The concentrates,
when mixed with water and sweetener, produce syrup which, when mixed with
carbonated water, produce the soft drinks known as "Coca-Cola," "Coca-Cola
classic," "Coke" and other soft drinks of The Coca-Cola Company which are
manufactured and marketed by the Company. The Company also purchases natural
sweeteners from The Coca-Cola Company. No royalty or other compensation is paid
under the franchise agreements to The Coca-Cola Company for the Company's right
to use in its territories the franchised tradenames and trademarks, such as
"Coca-Cola," "Coca-Cola classic" and "Coke," and their associated patents,
copyrights, designs and labels, all of which are owned by The Coca-Cola Company.
The Company has similar arrangements with the Dr Pepper Company and other
franchisors.
BOTTLE CONTRACTS. The Company is party to standard bottle contracts with
The Coca-Cola Company for each of its bottling territories (the "Bottle
Contracts") which provide that the Company will purchase its entire requirement
of concentrates and syrups for Coca-Cola, Coca-Cola classic, caffeine free
Coca-Cola classic, Cherry Coke, diet Coke, caffeine free diet Coke and diet
Cherry Coke (together, the "Coca-Cola Trademark Beverages") from The Coca-Cola
Company. The Company has the exclusive right to distribute Coca-Cola Trademark
Beverages for sale in its territories in authorized containers of the nature
currently used by the Company, which include cans and returnable and
non-returnable bottles. The Coca-Cola Company may determine from time to time
what containers of this type to authorize for use by the Company.
The price The Coca-Cola Company may charge for syrup or concentrate under
the Bottle Contracts is set by The Coca-Cola Company from time to time. Except
as provided in the Supplementary Agreement described below, there are no
limitations on prices for concentrate or syrup. Consequently, the prices at
which the Company purchases concentrates and syrup under the Bottle Contracts
may vary materially from the prices it has paid during the periods covered by
the financial information included in this report.
Under the Bottle Contracts, the Company is obligated to maintain such
plant, equipment, staff and distribution facilities as are required for the
manufacture, packaging and distribution of the Coca-Cola Trademark Beverages in
authorized containers, and in sufficient quantities to satisfy fully the demand
for these beverages in its territories; to undertake adequate quality control
measures and maintain sanitation standards prescribed by The Coca-Cola Company;
to develop, to stimulate, and to satisfy fully the demand for Coca-Cola
Trademark Beverages and to use all approved means, and to spend such funds on
advertising and other forms of marketing, as may be reasonably required to meet
that objective; and to maintain such sound financial capacity as may be
reasonably necessary to assure performance by the Company and its affiliates of
their obligations to The Coca-Cola Company.
The Bottle Contracts require the Company to submit to The Coca-Cola Company
each year its plans for marketing, management and advertising with respect to
the Coca-Cola Trademark Beverages for the ensuing year. Such plans must
demonstrate that the Company has the financial capacity to perform its duties
and obligations to The Coca-Cola Company under the Bottle Contracts. The Company
must obtain The Coca-Cola Company's approval of those plans, which approval may
not be unreasonably withheld, and if the Company carries out its plan in all
material respects, it will have satisfied its contractual obligations. Failure
to carry out such plans in all material respects would constitute an event of
default that, if not cured within 120 days of notice of such failure, would give
The Coca-Cola Company the right to terminate the Bottle Contracts. If the
Company at any time fails to carry out a plan in all material respects with
respect to any geographic segment (as defined by The Coca-Cola Company) of its
territory, and if that failure is not cured within six months of notice of such
failure, The Coca-Cola Company may reduce the territory covered by the
applicable Bottle Contract by eliminating the portion of the territory with
respect to which the failure has occurred.
The Coca-Cola Company has no obligation under the Bottle Contracts to
participate with the Company in expenditures for advertising and marketing. As
it has in the past, The Coca-Cola Company may contribute to such expenditures
and undertake independent advertising and marketing activities, as well as
cooperative advertising and sales promotion programs which require mutual
cooperation and financial support of the Company. The future levels of marketing
support and promotional funds provided by The Coca-Cola Company may vary
materially from the levels provided during the periods covered by the financial
information included in this report.
The Coca-Cola Company has the right to reformulate any of the Coca-Cola
Trademark Beverages and to discontinue any of the Coca-Cola Trademark Beverages,
subject to certain limitations, so long as all Coca-Cola Trademark Beverages are
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not discontinued. The Coca-Cola Company may also introduce new beverages under
the trademarks "Coca-Cola" or "Coke" or any modification thereof, and in that
event the Company would be obligated to manufacture, package, distribute and
sell the new beverages with the same duties as exist under the Bottle Contracts
with respect to Coca-Cola Trademark Beverages.
If the Company acquires the right to manufacture and sell Coca-Cola
Trademark Beverages in any additional territory, the Company has agreed that
such new territory will be covered by a standard contract in the same form as
the Bottle Contracts and that any existing agreement with respect to the
acquired territory automatically shall be amended to conform to the terms of the
Bottle Contracts. In addition, if the Company acquires control, directly or
indirectly, of any bottler of Coca-Cola Trademark Beverages, or any party
controlling a bottler of Coca-Cola Trademark Beverages, the Company must cause
the acquired bottler to amend its franchises for the Coca-Cola Trademark
Beverages to conform to the terms of the Bottle Contracts.
The Bottle Contracts are perpetual, subject to termination by The Coca-Cola
Company in the event of default by the Company. Events of default by the Company
include (1) the Company's insolvency, bankruptcy, dissolution, receivership or
similar conditions; (2) the Company's disposition of any interest in the
securities of any bottling subsidiary without the consent of The Coca-Cola
Company; (3) termination of any agreement regarding the manufacture, packaging,
distribution or sale of Coca-Cola Trademark Beverages between The Coca-Cola
Company and any person that controls the Company; (4) any material breach of any
obligation occurring under the Bottle Contracts (including, without limitation,
failure to make timely payment for any syrup or concentrate or of any other debt
owing to The Coca-Cola Company, failure to meet sanitary or quality control
standards, failure to comply strictly with manufacturing standards and
instructions, failure to carry out an approved plan as described above, and
failure to cure a violation of the terms regarding imitation products), that
remains uncured for 120 days after notice by The Coca-Cola Company; or (5)
producing, manufacturing, selling or dealing in any "Cola Product," as defined,
or any concentrate or syrup which might be confused with those of The Coca-Cola
Company; or (6) selling any product under any trade dress, trademark, or
tradename or in any container in which The Coca-Cola Company has a proprietary
interest; or (7) owning any equity interest in or controlling any entity which
performs any of the activities described in (5) or (6) above. In addition, upon
termination of the Bottle Contracts for any reason, The Coca-Cola Company, at
its discretion, may also terminate any other agreements with the Company
regarding the manufacture, packaging, distribution, sale or promotion of soft
drinks, including the Allied Bottle Contracts described elsewhere herein.
The Company is prohibited from assigning, transferring or pledging its
Bottle Contracts, or any interest therein, whether voluntarily or by operation
of law, without the prior consent of The Coca-Cola Company. Moreover, the
Company may not enter into any contract or other arrangement to manage or
participate in the management of any other Coca-Cola bottler without the prior
consent of The Coca-Cola Company.
The Coca-Cola Company may automatically amend the Bottle Contracts if 80%
of the domestic bottlers who are parties to agreements with The Coca-Cola
Company containing substantially the same terms as the Bottle Contracts, which
bottlers purchased for their own account 80% of the syrup and equivalent gallons
of concentrate for Coca-Cola Trademark Beverages purchased for the account of
all such bottlers, agree that their bottle contracts shall be likewise amended.
SUPPLEMENTARY AGREEMENT. The Company and The Coca-Cola Company are also
parties to a Supplementary Agreement (the "Supplementary Agreement") that
modifies some of the provisions of the Bottle Contracts. The Supplementary
Agreement provides that The Coca-Cola Company will exercise good faith and fair
dealing in its relationship with the Company under the Bottle Contracts; offer
marketing support and exercise its rights under the Bottle Contracts in a manner
consistent with its dealings with comparable bottlers; offer to the Company any
written amendment to the Bottle Contracts (except amendments dealing with
transfer of ownership) which it offers to any other bottler in the United
States; and, subject to certain limited exceptions, sell syrups and concentrates
to the Company at prices no greater than those charged to other bottlers which
are parties to contracts substantially similar to the Bottle Contracts.
The Supplementary Agreement permits transfers of the Company's capital
stock that would otherwise be limited by the Bottle Contracts.
ALLIED BOTTLE CONTRACTS. Other contracts with The Coca-Cola Company (the
"Allied Bottle Contracts") grant similar exclusive rights to the Company with
respect to the distribution of Sprite, Mr. PiBB, Mello Yello, diet Mello Yello,
Fanta, TAB, diet Sprite, sugar free Mr. PiBB, Fresca, Minute Maid orange and
diet Minute Maid orange sodas (the "Allied Beverages") for sale in authorized
containers in its territories. These contracts contain provisions that are
similar to those of the Bottle Contracts with respect to pricing, authorized
containers, planning, quality control, trademark and transfer restrictions and
related matters. Each Allied Bottle Contract has a term of 10 years and is
renewable by the Company for an additional 10
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years at the end of each 10 year period, but is subject to termination in the
event of (1) the Company's insolvency, bankruptcy, dissolution, receivership or
similar condition; (2) termination of the Company's Bottle Contract covering the
same territory by either party for any reason; and (3) any material breach of
any obligation of the Company under the Allied Bottle Contract that remains
uncured for 120 days after notice by The Coca-Cola Company. The Coca-Cola
Company recently purchased Barq's, Inc. from whom the Company has been granted
rights to manufacture and market Barq's Root Beer. The Bottler's Agreement
between the Company and Barq's, Inc. remains in effect and The Coca-Cola Company
has not informed the Company of any intention to replace it.
POST-MIX RIGHTS. The Company also has the non-exclusive right to sell
Coca-Cola classic and other fountain syrups ("post-mix syrup") of The Coca-Cola
Company.
OTHER BOTTLING AGREEMENTS. The bottling agreements from most other soft
drink franchisors are similar to those described above in that they are
renewable at the option of the Company and the franchisors at prices
unilaterally fixed by the franchisors. They also contain similar restrictions on
the use of trademarks, approved bottles, cans and labels and sale of imitations
or substitutes as well as termination for cause provisions. Sales of beverages
by the Company under these agreements represented approximately 10% of the
Company's sales for fiscal 1995.
The territories covered by the Allied Bottle Contracts and by bottling
agreements for products of franchisors other than The Coca-Cola Company in most
cases correspond with the territories covered by the Bottle Contracts. The
variations do not have a material effect on the business of the Company taken as
a whole.
MARKETS AND PRODUCTION AND DISTRIBUTION FACILITIES
As of March 14, 1996, the Company held franchises from The Coca-Cola
Company covering the majority of central, northern and western North Carolina,
and portions of Alabama, Mississippi, Tennessee, Kentucky, Virginia, West
Virginia, Ohio, Pennsylvania, Georgia and Florida. The total population within
the Company's franchise territory is approximately 12.1 million.
As of March 14, 1996, the Company operated in six principal geographical
regions. Certain information regarding each of these markets follows:
1. NORTH CAROLINA. This region includes the majority of central and western
North Carolina, including Raleigh, Greensboro, Winston-Salem, High Point,
Hickory, Asheville, Fayetteville and Charlotte and the surrounding areas. The
region has an estimated population of 5.2 million. Production/distribution
facilities are located in Charlotte and 15 other distribution facilities are
located in the region.
2. SOUTH ALABAMA. This region includes a portion of southwestern Alabama,
including the area surrounding Mobile, and a portion of southeastern
Mississippi. The region has an estimated population of 900,000. A
production/distribution facility is located in Mobile, and five other
distribution facilities are located in the region.
3. SOUTH GEORGIA. This region includes a small portion of eastern Alabama,
a portion of southwestern Georgia surrounding Columbus, Georgia, in which a
distribution facility is located, and a portion of the Florida Panhandle,
including Panama City and Quincy. Four other distribution facilities are located
in the region. This region has an estimated population of 1.0 million.
4. MIDDLE TENNESSEE. This region includes a portion of central Tennessee,
including areas surrounding Nashville, and a small portion of southern Kentucky.
The region has an estimated population of 1.6 million. A production/distribution
facility is located in Nashville and seven other distribution facilities are
located in the region.
5. WESTERN VIRGINIA. This region includes most of southwestern Virginia,
including areas surrounding Roanoke, a portion of the southern piedmont of
Virginia, a portion of northeastern Tennessee and a portion of southeastern West
Virginia. The region has an estimated population of 1.5 million. A
production/distribution facility is located in Roanoke and seven other
distribution facilities are located in the region.
6. WEST VIRGINIA. This region includes most of the state of West Virginia,
a portion of eastern Kentucky, a portion of eastern Ohio and a portion of
southwestern Pennsylvania. The region has an estimated population of 1.9
million. There are 11 distribution facilities located in the region.
The Company owns 100% of the operations in each of the regions listed.
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The Company sold the majority of its South Carolina franchise territory to
Piedmont in July 1993. Pursuant to a Management Agreement, the Company produces
a portion of the soft drink products for Piedmont. The Company currently owns a
50% interest in Piedmont. Piedmont's franchise territory covers parts of eastern
North Carolina and most of South Carolina. This region has an estimated
population of 4.1 million.
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 pursuant to a
10-year Management Agreement. SAC has significantly expanded its operations by
adding two PET bottling lines. The new bottling lines supply a portion of the
Company's and Piedmont's volume requirements for PET product. The Company
executed member purchase agreements with SAC that require minimum annual
purchases of canned product, 20 ounce PET product, 2 liter PET product and 3
liter PET product by the Company. Products purchased pursuant to these member
purchase agreements total approximately $40 million on an annual basis.
In addition to producing bottled and canned soft drinks for the Company's
franchise territories, each production facility also produces some products for
sale by other Coca-Cola bottlers. With the exception of the Company's production
of soft drink products for Piedmont, this contract production is currently not
material in the Company's production centers.
RAW MATERIALS
In addition to concentrates obtained by the Company from The Coca-Cola
Company and other concentrate companies for use in its soft drink manufacturing,
the Company also purchases sweeteners, carbon dioxide, glass and plastic
bottles, cans, closures, pre-mix containers and other packaging materials as
well as equipment for the production, distribution and marketing of soft drinks.
Except for sweetener, cans and plastic bottles, the Company purchases its raw
materials from multiple suppliers.
The cost of aluminum cans increased significantly at the beginning of 1995
as a result of increases in the price of aluminum ingot. The Company entered
into supply agreements in the fourth quarter of 1995 with its aluminum can
suppliers which require the Company to purchase the majority of its aluminum can
requirements for two of its four manufacturing facilities. These agreements,
which extend through the end of 2000, also reduce the variability of the cost of
cans for these two facilities.
The Company purchases substantially all of its plastic bottles (20 ounce, 1
liter, 2 liter and 3 liter sizes) from manufacturing plants which are owned and
operated by two cooperatives of Coca-Cola bottlers, including the Company. The
Company joined the southwest cooperative in February 1985 following its
acquisition of the bottling subsidiaries of Wometco Coca-Cola Bottling Company.
The Company joined the southeast cooperative in 1984.
None of the materials or supplies used by the Company is in short supply,
although the supply of specific materials could be adversely affected by
strikes, weather conditions, governmental controls or national emergency
conditions.
MARKETING
The Company's soft drink products are sold and distributed directly by its
employees to retail stores and other outlets, including food markets,
institutional accounts and vending machine outlets. During 1995, approximately
75% of the Company's total sales were made in the take-home channel through
supermarkets, convenience stores and other retail outlets. The remaining sales
were made in the cold drink channel, primarily through dispensing machines,
owned either by the Company, retail outlets or third party vending companies.
New product introductions, packaging changes and sales promotions have been
the major competitive techniques in the soft drink industry in recent years and
have required and are expected to continue to require substantial expenditures.
New product introductions in recent years include: caffeine free Coca-Cola
classic; caffeine free diet Coke; Cherry Coke; diet Mello Yello; Minute Maid
orange; diet Minute Maid orange; ready-to-drink Nestea; Fruitopia; POWERaDE; and
Minute Maid Juices To Go. New product introductions have entailed increased
operating costs for the Company resulting from special marketing efforts,
obsolescence of replaced items and, occasionally, higher raw materials costs.
After several new package introductions in recent years, the Company now
sells its soft drink products in a variety of returnable and non-returnable
bottles, both glass and plastic, and in cans, in varying proportions from market
to market. There may be as many as eight different packages for Coca-Cola
classic within a single geographical area. Physical unit sales of soft drinks
during fiscal year 1995 were approximately 48% cans, 49% non-returnable bottles,
2% pre-mix and 1% returnable bottles.
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Advertising in various media, primarily television and radio, is relied
upon extensively in the marketing of the Company's soft drinks. The Coca-Cola
Company and Dr Pepper Company have joined the Company in making substantial
expenditures in cooperative advertising in the Company's marketing areas. The
Company also benefits from national advertising programs conducted by The
Coca-Cola Company and Dr Pepper Company. In addition, the Company expends
substantial funds on its own behalf for extensive local sales promotions of the
Company's soft drink products. These expenses are partially offset by marketing
funds which the concentrate companies provide to the Company in support of a
variety of marketing programs, such as price promotions, merchandising programs
and point-of-sale displays.
The substantial outlays which the Company makes for advertising are
generally regarded as necessary to maintain or increase sales volume, and any
curtailment of the funding provided by The Coca-Cola Company for advertising or
marketing programs which benefit the Company could have a material effect on the
business of the Company.
SEASONALITY
Sales are somewhat seasonal, with the highest sales volume occurring in
May, June, July and August. The Company has adequate production capacity to meet
sales demands during these peak periods.
COMPETITION
The soft drink industry is highly competitive. The Company's competitors
include several large soft drink manufacturers engaged in the distribution of
nationally advertised products, as well as similar companies which market
lesser-known soft drinks in limited geographical areas and manufacturers of
private brand soft drinks. In each region in which the Company operates, between
75% and 95% of carbonated soft drink sales in bottles, cans and pre-mix
containers are accounted for by the Company and its principal competition, which
in each region includes the local bottler of Pepsi-Cola and, in some regions,
also includes the local bottler of Royal Crown products. The Company's
carbonated beverage products also compete with, among others, noncarbonated
beverages and citrus and noncitrus fruit drinks.
The principal methods of competition in the soft drink industry are
point-of-sale merchandising, new product introductions, packaging changes, price
promotions, quality of distribution and advertising.
GOVERNMENT REGULATION
The production and marketing of beverages are subject to the rules and
regulations of the United States Food and Drug Administration ("FDA") and other
federal, state and local health agencies. The FDA also regulates the labeling of
containers.
No reformulation of the Company's products is presently required by any
rule or regulation, but there can be no assurance that future government
regulations will not require reformulation of the Company's products.
From time to time, legislation has been proposed in Congress and by certain
state and local governments which would prohibit the sale of soft drink products
in non-returnable bottles and cans or require a mandatory deposit as a means of
encouraging the return of such containers in an attempt to reduce solid waste
and litter. The Company is currently not impacted by this type of proposed
legislation.
Soft drink and similar-type taxes have been in place in North Carolina,
South Carolina, West Virginia and Tennessee for several years. To the Company's
knowledge, legislation has not been proposed or enacted to increase the tax in
West Virginia or Tennessee. The North Carolina soft drink tax will be reduced by
25% beginning July 1, 1996. The South Carolina soft drink tax has been repealed
and will be phased out over a six-year period beginnning July 1, 1996.
ENVIRONMENTAL REMEDIATION
The Company does not currently have any material capital expenditure
commitments for environmental remediation for any of its properties.
EMPLOYEES
As of March 14, 1996, the Company had a total of approximately 4,800
full-time employees, of whom approximately 400 were union members. Management of
the Company believes that the Company's relations with its employees are
generally good.
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ITEM 2 -- PROPERTIES
The principal properties of the Company include its corporate headquarters,
its four production facilities and its 54 distribution centers, all of which are
owned by the Company except for its corporate headquarters, two
production/distribution facilities and nine distribution centers.
On November 30, 1992, the Company and the owner of the Company's Snyder
Production Center in Charlotte, North Carolina agreed to the early termination
of the Company's lease. Harrison Limited Partnership One purchased the property
contemporaneously with the termination of the lease, and the Company and
Harrison Limited Partnership One entered into an agreement under which the
Company leased the property for a 10-year term beginning on December 1, 1992.
JFH Management, Inc., a North Carolina corporation of which J. Frank Harrison,
Jr. is the sole shareholder, serves as sole general partner of the limited
partnership that purchased the production center property. The sole limited
partner of the limited partnership is a trust as to which J. Frank Harrison, III
and Reid M. Henson are co-trustees, share investment powers, and as to which
they share voting power for purposes of this partnership interest. The
beneficiaries of this trust are J. Frank Harrison, Jr. and his descendants. The
annual base rent the Company is obligated to pay under the lease agreement is
subject to adjustment for increases in the Consumer Price Index and for
increases or decreases in interest rates based on London Interbank Offered Rate
("LIBOR").
On June 1, 1993, Beacon Investment Corporation, a North Carolina
corporation of which J. Frank Harrison, III is sole shareholder, purchased the
office building located on Rexford Road in Charlotte, North Carolina, in which
the Company leases its executive offices. Contemporaneously, the Company entered
into a 10-year lease commencing June 1, 1993 with Beacon Investment Corporation
for office space within the building. The annual base rent the Company is
obligated to pay under the lease agreement is subject to adjustment for
increases in the Consumer Price Index and for increases or decreases in interest
rates based on LIBOR.
The Company also leases its 297,500 square-foot production/distribution
facility in Nashville, Tennessee. The lease requires monthly payments through
2002. The Company's other real estate leases are not material.
The Company owns and operates two soft drink production facilities apart
from the leased facilities described above. The current percentage utilization
of the Company's production centers as of March 14, 1996 is approximately as
indicated below:
PRODUCTION FACILITIES
<TABLE>
<CAPTION>
PERCENTAGE
LOCATION UTILIZATION*
<S> <C>
Charlotte, North Carolina................................................................ 84%
Mobile, Alabama.......................................................................... 81%
Nashville, Tennessee..................................................................... 63%
Roanoke, Virginia........................................................................ 74%
</TABLE>
* Estimated 1996 production divided by capacity (based on 80 hours of operations
per week).
The Company currently has sufficient production capacity to meet its
operational requirements. In addition to the production facilities noted above,
the Company also has access to production capacity from South Atlantic Canners,
Inc.
Bottled and canned soft drinks are transported to distribution centers for
storage pending sale. The number of centers by market area as of March 14, 1996
is as follows:
DISTRIBUTION CENTERS
<TABLE>
<CAPTION>
NUMBER OF
REGION CENTERS
<S> <C>
North Carolina............................................................................ 16
South Alabama............................................................................. 6
South Georgia............................................................................. 5
Middle Tennessee.......................................................................... 8
Western Virginia.......................................................................... 8
West Virginia............................................................................. 11
</TABLE>
7
<PAGE>
The Company's distribution facilities are all in good condition and are
adequate for the Company's operations as presently conducted.
The Company also operates approximately 2,600 vehicles in the sale and
distribution of its soft drink products, of which approximately 1,400 are
delivery trucks. In addition, the Company owns or leases approximately 113,000
soft drink dispensing and vending machines.
ITEM 3 -- LEGAL PROCEEDINGS
On March 4, 1993, a Complaint was filed against the Company, the
predecessor bottling company for the Laurel, Mississippi territory and other
unnamed parties by the testatrix spouse of a deceased former employee of the
predecessor bottler. This suit alleges misrepresentation and fraud in connection
with the severance package offered to employees terminated by the predecessor
bottler in connection with the acquisition of the Laurel franchise subsidiary of
the Company. Plaintiff seeks damages in an amount up to $18 million in
compensatory and punitive damages. The Company believes that the Complaint is
without merit and its ultimate disposition will not have a material adverse
effect on the financial condition or results of operations of the Company.
ITEM 4 -- SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during the
fourth quarter of the fiscal year ended December 31, 1995.
EXECUTIVE OFFICERS OF THE REGISTRANT
Pursuant to General Instruction G(3) of Form 10-K, the following list is
included as an unnumbered item in Part I of this Report in lieu of being
included in the Proxy Statement for the Annual Meeting of Shareholders to be
filed.
The following is a list of names and ages of all the executive officers of
the Registrant as of March 14, 1996, indicating all positions and offices with
the Registrant held by each such person. All officers have served in their
present capacities for the past five years except as otherwise stated.
J. FRANK HARRISON, JR., age 65, is Chairman of the Board of Directors of
the Company and has served the Company in that capacity since 1977. Mr.
Harrison, Jr. served as Chief Executive Officer of the Company from August 1980
until April 1983. He has previously served the Company as Vice Chairman of the
Board of Directors. He has been a Director of the Company since 1973. Mr.
Harrison, Jr. presently is a Director of Dixie Yarns, Inc. Mr. Harrison, Jr. is
Chairman of the Executive Committee and the Finance Committee and is a member of
the Compensation Committee.
J. FRANK HARRISON, III, age 41, is a Vice Chairman of the Board of
Directors and Chief Executive Officer of the Company. Mr. Harrison has served in
the capacity of Vice Chairman since his election in November 1987 and was
appointed as the Company's Chief Executive Officer in May 1994. He was first
employed by the Company in 1977, and has served as a Division Sales Manager and
as a Vice President of the Company. Mr. Harrison, III is a Director of Wachovia
Bank & Trust Co., N.A., Southern Region Board. He is Chairman of the
Compensation Committee and is a member of the Executive Committee, the Audit
Committee and the Finance Committee.
REID M. HENSON, age 56, has served as a Vice Chairman of the Board of
Directors of the Company since 1983. Prior to that time, Mr. Henson served as a
consultant for JTL Corporation, a management company, and later as President of
JTL Corporation. He has been a Director of the Company since 1979, is Chairman
of the Audit Committee and is a member of the Executive Committee, the
Retirement Benefits Committee and the Finance Committee.
JAMES L. MOORE, JR., age 53, is President and Chief Operating Officer of
the Company. Prior to his election as President in March 1987, he served as
President and Chief Executive Officer of Atlantic Soft Drink Co., a soft drink
bottling subsidiary of Grand Metropolitan USA. Mr. Moore has been a Director of
the Company since March 1987. He is a member of the Executive Committee and is
Chairman of the Retirement Benefits Committee.
DAVID V. SINGER, age 40, is Vice President and Chief Financial Officer. In
addition to his Finance duties, Mr. Singer has overall responsibility for the
Company's Purchasing/Materials Management function as well as the Manufacturing
function. He served as Vice President, Chief Financial Officer and Treasurer
from October 1987 through May 1992; prior to that he was Vice President and
Treasurer. Prior to joining the Company in March 1986, Mr. Singer was a Vice
President of Corporate Banking for Mellon Bank, N.A.
8
<PAGE>
M. CRAIG AKINS, age 45, is Vice President, Cold Drink Market, a position he
has held since October 1993. He was Vice President, Division Manager of the
Tennessee Division from 1989-1993. From 1987 through 1988, he was General
Manager of the Nashville, TN sales center. From 1985 through 1986, he was Trade
Development Director of the Tennessee Division. Prior to joining the Company in
1985, he was a Regional Trade Development Manager for Coca-Cola USA.
STEVEN D. CALDWELL, age 46, joined the Company in April 1987 as Vice
President, Business Systems and Services. Prior to joining the Company, he was
Director of MIS at Atlantic Soft Drink Co., a soft drink bottling subsidiary of
Grand Metropolitan USA for four years.
WILLIAM B. ELMORE, age 40, is Vice President, Regional Manager for the
Virginia Division, West Virginia Division and Tennessee Division, a position he
has held since November 1991. He was Vice President, Division Manager of the
West Virginia Division from 1989-1991. He was Senior Director, Corporate
Marketing from 1988-1989. Preceding that, he held various positions in sales and
marketing in the Charlotte Division from 1985-1988. Before joining the Company
in 1985, he was employed by Coca-Cola USA for seven years where he held several
positions in their field sales organization.
NORMAN C. GEORGE, age 40, is Vice President, Regional Manager for the
Carolinas South Region, a position he has held since November 1991. He served as
Vice President, Division Manager of the Southern Division from 1988-1991. He
served as Vice President, Division Manager of the Alabama Division from
1986-1988. From 1982-1986, he served as Director of Sales and Operations in the
Northern Division. Prior to joining the Company in 1982, he was Sales Manager of
the Dallas-Fort Worth Dr Pepper Bottling Company in Irving, Texas.
BRENDA B. JACKSON, age 35, is Vice President and Treasurer, a position she
has held since January 1993. From February 1992 until her promotion, she served
as Assistant Treasurer. Mrs. Jackson joined the Company in March 1989 as
Director of Finance.
UMESH M. KASBEKAR, age 38, is Vice President, Planning and Administration,
a position he has held since December 1994. He was Vice President, Planning from
December 1988 until December 1994. He was first employed by the Company in 1983
and held various other positions with the Company from 1983 to 1988.
C. RAY MAYHALL, age 48, is Vice President, Regional Manager for the Georgia
Division, Alabama Division and the Carolinas North Region, a position he has
held since November 1991. He served as Vice President, Division Manager of the
Northern Division from 1989-1991. Before joining the Company in 1989, he was
Vice President, Sales and Marketing of Florida Coca-Cola Bottling Company, a
position he had held since 1987. Prior to 1987, he was Division Manager of the
Central Florida Division of Florida Coca-Cola Bottling Company for six years.
ROBERT D. PETTUS, JR., age 51, is Vice President, Human Resources, a
position he has held since September 1984. Prior to joining the Company, he was
Director, Employee Relations for the Texize Division of Morton-Thiokol for seven
years.
JAMES B. STUART, age 53, joined the Company in October 1990 as Vice
President, Marketing. Mr. Stuart had been Senior Vice President, Sales and
Marketing with JTL Corporation from 1980 until such company was acquired by The
Coca-Cola Company in 1986. From 1987 until joining the Company in 1990, Mr.
Stuart formed his own marketing company, serving a number of clients inside and
outside the soft drink industry. During this period, he worked almost
exclusively with the International Business Sector of The Coca-Cola Company.
STEVEN D. WESTPHAL, age 41, is Vice President and Controller of the
Company, a position he has held since November 1987. Prior to joining the
Company, he was Vice President-Finance for Joyce Beverages, an independent
bottler, beginning in January 1985. Prior to working for Joyce Beverages, he was
Director of Corporate Planning for Mid-Atlantic Coca-Cola Bottling Company, Inc.
from December 1981 to December 1984.
9
<PAGE>
PART II
ITEM 5 -- MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company has two classes of common stock outstanding, Common Stock and
Class B Common Stock. The Common Stock is traded on the Nasdaq National Market
tier of the Nasdaq Stock MarketSM under the symbol COKE. The table below sets
forth for the periods indicated the high and low reported sales prices per share
of Common Stock. There is no established public trading market for the Class B
Common Stock. Shares of Class B Common Stock are convertible on a
share-for-share basis into shares of Common Stock.
<TABLE>
<CAPTION>
FISCAL YEAR
1995
HIGH LOW
<S> <C> <C>
First quarter.............................................................................. $ 29 3/4 $ 26
Second quarter............................................................................. 32 3/4 29 1/4
Third quarter.............................................................................. 35 7/8 31
Fourth quarter............................................................................. 35 1/2 33 1/4
</TABLE>
<TABLE>
<CAPTION>
1994
HIGH LOW
<S> <C> <C>
First quarter.............................................................................. $ 37 1/4 $ 27
Second quarter............................................................................. 30 1/4 24
Third quarter.............................................................................. 31 26 3/4
Fourth quarter............................................................................. 29 3/4 24
</TABLE>
On February 8, 1994, the Board of Directors declared an increase in the
first quarter 1994 dividends. Shareholders of record as of February 24, 1994
received $.25 per share on both their Common Stock and Class B Common Stock
shares, payable on March 10, 1994. This dividend rate was maintained throughout
1994 and 1995.
Pursuant to the Company's Certificate of Incorporation, no cash dividend or
dividend of property or stock other than stock of the Company may be declared
and paid, per share, on the Class B Common Stock unless a dividend of an amount
greater than or equal to such cash or property or stock has been declared and
paid on the Common Stock. Reference should be made to Article Fourth of the
Company's Certificate of Incorporation for additional provisions relating to the
relative dividend rights of holders of Common Stock and Class B Common Stock.
The amount and frequency of future dividends will be determined by the
Company's Board of Directors in light of the earnings and financial condition of
the Company at such time, and no assurance can be given that dividends will be
declared in the future.
The number of shareholders of record of the Common Stock and Class B Common
Stock, as of March 14, 1996, was 1,171 and 14, respectively.
ITEM 6 -- SELECTED FINANCIAL DATA
The following table sets forth certain selected financial data concerning
the Company for the five years ended December 31, 1995. The data for the five
years ended December 31, 1995 is unaudited but is derived from audited
statements of the Company. This information should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" set forth in Item 7 hereof and is qualified in its entirety by
reference to the more detailed financial statements and notes contained in Item
8 hereof. This information should also be read in conjunction with the
"Introduction and Recent Developments" section in Item 1 hereof which details
the Company's significant acquisitions and divestitures since 1984.
10
<PAGE>
SELECTED FINANCIAL DATA*
IN THOUSANDS (EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FISCAL YEAR
SUMMARY OF OPERATIONS 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Net sales....................................................... $761,876 $723,896 $686,960 $ 655,778 $464,733
Cost of products sold........................................... 447,636 427,140 396,077 372,865 262,887
Selling expenses................................................ 158,831 149,992 144,411 151,382 107,266
General and administrative expenses............................. 54,720 54,559 51,125 47,154 37,995
Depreciation expense............................................ 26,746 24,188 23,284 22,217 18,785
Amortization of goodwill and intangibles........................ 12,230 12,309 14,784 18,326 10,884
Total costs and expenses........................................ 700,163 668,188 629,681 611,944 437,817
Income from operations.......................................... 61,713 55,708 57,279 43,834 26,916
Interest expense................................................ 33,091 31,385 30,994 36,862 21,556
Other income (expense), net..................................... (3,401) 63 (2,270) (2,121) (2,404)
Income before income taxes, extraordinary charge and effect of
accounting changes............................................ 25,221 24,386 24,015 4,851 2,956
Federal and state income taxes.................................. 9,685 10,239 9,182 2,768 20
Income before extraordinary charge and effect of accounting
changes....................................................... 15,536 14,147 14,833 2,083 2,936
Extraordinary charge............................................ (5,016)
Effect of accounting changes.................................... (2,211) (116,199)
Net income (loss)............................................... 10,520 11,936 14,833 (114,116) 2,936
Preferred stock dividends....................................... 4,195 728
Net income (loss) applicable to common shareholders............. $ 10,520 $ 11,936 $ 14,833 $(118,311) $ 2,208
Income (loss) per share:
Income (loss) before extraordinary charge and effect of
accounting changes......................................... $ 1.67 $ 1.52 $ 1.60 $ (.23) $ .24
Extraordinary charge.......................................... (.54)
Effect of accounting changes.................................. (.24) (12.66)
Net income (loss) applicable to common shareholders........... $ 1.13 $ 1.28 $ 1.60 $ (12.89) $ .24
Cash dividends per share:
Common........................................................ $ 1.00 $ 1.00 $ .88 $ .88 $ .88
Class B Common................................................ $ 1.00 $ 1.00 $ .52 $ .52 $ .52
YEAR-END FINANCIAL POSITION
Total assets.................................................... $676,571 $664,159 $648,449 $ 785,871 $785,196
Long-term debt.................................................. 419,896 432,971 434,358 555,126 479,414
Redeemable preferred stock...................................... 7,280
Shareholders' equity............................................ 38,972 33,981 29,629 25,806 205,426
OTHER INFORMATION
Weighted average number of Common and Class B Common shares
outstanding................................................... 9,294 9,294 9,258 9,181 9,181
</TABLE>
* All years presented are 52-week years except for 1992 which is a 53-week
year. In December 1991, the Company acquired Sunbelt Coca-Cola Bottling Company,
Inc. See Note 2 to the consolidated financial statements for information
concerning the Company's investment in Piedmont Coca-Cola Bottling Partnership.
During 1992, the Company changed its method of accounting for income taxes and
for postretirement benefits other than pensions. In 1994, the Company changed
its method of accounting for postemployment benefits, as described in Note 12.
In 1995, the Company recorded an extraordinary charge related to the repurchase
at a premium of a portion of the Company's long-term debt, as described in Note
6.
11
<PAGE>
ITEM 7 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
INTRODUCTION
Coca-Cola Bottling Co. Consolidated (the "Company") is engaged in the
production, marketing and distribution of soft drinks, primarily products of The
Coca-Cola Company. Since 1984, the Company has expanded its franchise territory
throughout the Southeast, primarily through acquisitions.
The current year provided significant challenges for the Company, with
substantial price increases for raw materials and a rise in short term interest
rates. The Company experienced increased packaging costs for both aluminum cans
and plastic bottles. The Company was able to offset these cost increases by
generating higher volume and increased net selling prices. The net selling price
increased by approximately 4%. Franchise sales volume increased by 5% over 1994.
The introduction of the 20 ounce contour bottle throughout the Company's
franchise territory contributed to the successful increases in both sales volume
and net selling prices. Interest expense increased by $1.7 million due to higher
short-term interest rates more than offsetting the interest savings resulting
from the $13 million reduction in long-term debt.
Capital expenditures of $37 million in 1995 and $49 million in 1994 were
made to maintain the Company's physical asset base as well as providing the
Company with the opportunity to take advantage of new packages and higher margin
channels.
On November 1, 1995, the Company issued $100 million of 6.85% debentures
under its $400 million shelf registration filed with the Securities and Exchange
Commission in 1994. The proceeds from the issuance of the debentures were used
for the early retirement of approximately $87 million of the Company's
Medium-Term Notes which matured between 1999 and 2002 and with varying rates of
interest from 7.99% to 10.00%. In conjunction with the early retirement of the
Medium-Term Notes, the Company recorded an after tax extraordinary charge of
$5.0 million or $.54 per share for 1995. This refinancing has allowed the
Company to take advantage of lower long-term interest rates.
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 of The Coca-Cola Company and other third party licensors, primarily in
certain portions of North Carolina and South Carolina. The Company provides a
portion of the soft drink products to Piedmont at cost and receives a fee for
managing the business of Piedmont pursuant to a management agreement. The
Company and The Coca-Cola Company, through their respective subsidiaries, each
beneficially own a 50% interest in Piedmont. The Company is accounting for its
investment in Piedmont using the equity method of accounting.
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 pursuant to this
10-year management agreement. SAC has significantly expanded its operations by
adding two PET bottling lines. These new bottling lines will supply a portion of
the Company's and Piedmont's volume requirements for PET product.
RESULTS OF OPERATIONS
1995 COMPARED TO 1994
The Company reported net income of $10.5 million or $1.13 per share for
fiscal 1995 compared to $11.9 million or $1.28 per share for fiscal 1994. The
1995 results reflect an after tax extraordinary charge of $5.0 million or $.54
per share on the early retirement of some of the Company's Medium-Term Notes. A
one-time, after-tax noncash charge of $2.2 million or $.24 per share was
recorded in 1994 upon the adoption of Statement of Financial Accounting
Standards No. 112, "Employers' Accounting for Postemployment Benefits" ("SFAS
112").
Pretax earnings in 1995 were slightly higher than pretax earnings in 1994
despite increases in certain raw material costs and short-term interest rates.
Costs of goods sold related to net franchise sales increased due to higher
packaging costs; however, selling price increases more than offset the higher
cost of goods sold. The cost of aluminum cans increased significantly at the
beginning of 1995 as a result of increases in the price of aluminum ingot. The
Company entered into agreements in the fourth quarter of 1995 with its aluminum
can suppliers which require the Company to purchase the majority of its aluminum
can requirements for two of its four manufacturing facilities. These agreements,
which extend through the end of 2000, also reduce the variability of the cost of
cans for these two facilities. The cost of resin used to make plastic bottles
also increased significantly during 1995. The Company does not expect a similar
increase in the cost of plastic bottles in 1996.
12
<PAGE>
Net franchise sales for 1995 increased 9%, reflecting a volume increase of
approximately 5% and higher average net selling prices. Sales to other bottlers
decreased by 13% during 1995 as compared to 1994 primarily due to South Atlantic
Canners providing a larger portion of Piedmont's finished products requirements.
Finished products are sold by the Company to Piedmont at cost. The Company's
share of Piedmont's net loss increased from $671,000 in 1994 to $2.1 million in
1995. The increased loss was due primarily to higher short-term interest rates
on Piedmont's variable rate debt.
Gross margin increased 6% in 1995. As a percentage of net franchise sales,
gross margin decreased slightly due to higher ingredient costs.
Selling expenses for 1995 increased at a slower rate than net sales.
Selling expenses decreased from 26.3% of net franchise sales in 1994 to 25.9% of
net franchise sales in 1995. Increased selling costs were due to the Company's
ongoing commitment to sales development programs which resulted in increased
market share in 1995. Employment costs rose over 1994 levels due to increases in
franchise volume and in certain sales and operational areas as the Company
strives to improve employee retention in key markets.
Depreciation expense increased 10.6% as a result of significant capital
spending in 1995 and 1994, primarily for manufacturing improvements related to
packaging changes and improvements to distribution facilities.
Interest expense increased by 5.4% in 1995 despite a reduction in long-term
debt of $13 million. This increase is attributable to an average borrowing cost
in 1995 of 7.3% versus 6.6% in 1994, due primarily to higher interest rates on
the Company's variable rate debt. The early retirement of approximately $87
million of Medium-Term Notes in the fourth quarter of 1995 is expected to reduce
interest expense in 1996 as a result of lower interest rates.
The $3.5 million change in "other income (expense), net" primarily reflects
a $1.2 million loss on disposal of assets in 1995 compared to a $1.4 million
gain on disposals in 1994. In addition, higher short-term interest rates
increased the cost of the Company's accounts receivable sale program by $.6
million.
The effective tax rate for federal and state income taxes was approximately
38.4% in 1995 versus approximately 42% in 1994. The difference between the
effective rate and the statutory rate was due primarily to amortization of
nondeductible goodwill, state income taxes, nondeductible premiums on officers'
life insurance and other nondeductible expenses. The 1995 rate was lower than
the 1994 rate due to the utilization of certain credits and the reduced impact
of nondeductible items.
1994 COMPARED TO 1993
The Company reported net income of $11.9 million or $1.28 per share for
fiscal 1994 compared to $14.8 million or $1.60 per share for fiscal 1993. A
one-time, after-tax noncash charge of $2.2 million or $.24 per share was
recorded in the first quarter of 1994 upon the adoption of 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.
Pretax earnings in 1994 were slightly higher than pretax earnings in 1993
despite higher short-term interest rates that increased interest expense by
approximately 10% in the second half of 1994 versus the second half of 1993.
Due to the formation of Piedmont on July 2, 1993, results of operations for
1994 are not directly comparable to the results of operations for 1993. On a
comparable franchise territory basis, net franchise sales for 1994 increased
5.2%, reflecting a volume increase of 4.6% and slightly higher average net
selling prices. The higher net selling prices maintained the increases in net
selling prices realized in 1993. Sales to other bottlers increased 57% during
1994 as compared to 1993 primarily due to the sale of soft drink products to
Piedmont. Finished products are sold to Piedmont at cost.
When adjusted for comparable territories, gross margin increased 4.8%. As a
percentage of net franchise sales, gross margin decreased slightly due to higher
ingredient costs.
For comparable franchise territories, selling expenses increased from
approximately 24.3% of net franchise sales in 1993 to approximately 26.3% of net
franchise sales in 1994. New sales development programs contributed to the
increase in selling expenses and resulted in improved market share. Higher
employment costs were incurred due to planned increases in certain sales and
operations functions to improve customer service and to reduce turnover.
Increased expenses associated with the cold drink effort resulted in a record
number of placements of vending equipment. For the comparable franchise
territories, general and administrative expenses as a percentage of net sales
increased slightly due to higher employment costs.
13
<PAGE>
Amortization of goodwill and intangibles decreased 16.7% for fiscal 1994,
reflecting the 1993 sale and contribution of franchise territories to Piedmont.
Depreciation expense increased 3.9% as a result of increased capital spending,
primarily for manufacturing improvements related to packaging changes and other
line efficiency projects.
Interest expense increased 1.3% due to higher short-term interest rates.
The Company's overall weighted average borrowing rate on its long-term debt
increased from an average of 5.9% during 1993 to an average of 6.6% during 1994.
The change in "other income (expense), net" for 1994 was due primarily to a
third quarter 1994 gain on the sale of one of the Company's aircraft and 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. Gains of
approximately $1.4 million on sales of property, plant and equipment were
included in "other income (expense), net" in 1994. Losses of approximately $1.1
million on sales of property, plant and equipment were included in "other income
(expense), net" in 1993.
The effective tax rate for federal and state income taxes was approximately
42% in 1994 versus approximately 38% in 1993. The difference between the
effective rate and the statutory rate was due primarily to amortization of
nondeductible goodwill, state income taxes, nondeductible premiums on officers'
life insurance and other nondeductible expenses. The 1993 rate was lower due to
the utilization of certain tax benefits from prior years. The formation of
Piedmont allowed the utilization of these benefits.
FINANCIAL CONDITION
Working capital increased by $4.0 million from a deficit of $14.3 million
on January 1, 1995 to a deficit of $10.3 million on December 31, 1995. The
working capital deficit is a result of the Company's sale of its trade accounts
receivable. The Company had sold trade accounts receivable of $35 million as of
December 31, 1995 and January 1, 1995. Proceeds from the sale of the Company's
trade accounts receivable were used to reduce its outstanding long-term debt.
The increase in working capital was primarily due to an increase in trade
accounts receivable and a decrease in accrued interest payable. Trade accounts
receivable increased principally due to increases in net sales. Accrued interest
declined due to the early retirement and refinancing of a portion of the
Company's long-term debt.
Other liabilities increased by $6.2 million primarily due to deferred
revenue received from certain franchisors under multi-year marketing programs
and liabilities accrued under certain deferred compensation programs.
In March 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standard No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of." This statement,
which is effective for fiscal years beginning after December 15, 1995, requires
that an entity evaluate long-lived assets and certain other identifiable
intangible assets for impairment whenever events or changes in circumstances
indicate that the carrying amount of the asset may not be recoverable. An
impairment loss meeting the recognition criteria is to be measured as the amount
by which the carrying amount for financial reporting purposes exceeds the fair
value of the asset. The Company plans to adopt this statement in 1996 and does
not expect adoption of the statement to have a material effect on the Company's
financial position or results of operations.
In October 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standard No. 123, "Accounting for Stock-Based
Compensation," effective for fiscal years beginning after December 15, 1995.
This statement defines a fair value method of accounting for employee stock
options and encourages entities to adopt that method of accounting for its stock
compensation plans. Under the prescribed method, compensation cost would be
measured at the grant date based on the fair value of the award and would be
recognized over the related service period. An entity that does not adopt the
fair value method of accounting will be required to include in its financial
statements pro forma disclosures of net income and earnings per share as if the
fair value method of accounting had been applied. The Company plans to adopt
this statement in 1996 and does not expect adoption of the statement to have a
material effect on the Company's financial position or results of operations.
LIQUIDITY AND CAPITAL RESOURCES
On December 21, 1995, the Company amended and restated a revolving credit
agreement totaling $170 million and extended the maturity date to December 2000.
The agreement contains several covenants that establish ratio requirements
related to debt, interest expense and cash flow. A facility fee of 1/8% per year
on the banks' commitment is payable quarterly. There were no amounts outstanding
under this facility on December 31, 1995.
14
<PAGE>
On November 20, 1995, the Company entered into a $170 million variable rate
loan agreement with $85 million maturing in November 2002 and $85 million
maturing in November 2003. This loan was used to repay two $60 million loans and
other debt. As of December 31, 1995, $170 million was outstanding under this
agreement.
On November 1, 1995, the Company issued $100 million of 6.85% debentures
due 2007 pursuant to a $400 million shelf registration filed in 1994 with the
Securities and Exchange Commission. The net proceeds from this issuance were
used to repurchase approximately $87 million of the Company's Medium-Term Notes
due between 1999 and 2002 and to repay other outstanding borrowings.
The Company borrows from time to time under informal lines of credit from
various banks. On December 31, 1995, the Company had $246 million available
under these lines, of which $22.6 million was outstanding. Loans under these
lines are made at the discretion of the banks at rates negotiated at the time of
borrowing.
A $100 million commercial paper program was established in January 1990 for
general corporate purposes. On December 31, 1995, there were no amounts
outstanding under this program.
It is the Company's intent to renew any borrowings under the revolving
credit facility and the lines of credit as they mature. 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.
On June 26, 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. This arrangement
was amended in June 1995 to extend the arrangement to June 1998 on terms
substantially similar to those previously in place. On December 31, 1995, the
Company had sold $35 million of its trade accounts receivable and used the
proceeds to reduce its outstanding long-term debt.
On October 30, 1992, the Company entered into a three-year, $50 million
loan agreement. This agreement was amended November 30, 1992 to increase this
facility by $25 million to a total of $75 million. The proceeds from the loan
agreement were used primarily to redeem the Company's outstanding preferred
stock. On January 31, 1994, funds from informal lines of credit were used to
repay the $75 million loan agreement.
As of December 31, 1995, the Company was in compliance with the covenants
contained in its various borrowing agreements.
The Company uses interest rate hedging products to modify risk from
interest rate fluctuations in its underlying debt. The Company has historically
altered its fixed/floating 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. Sensitivity analyses are performed to review the
impact of various interest rate movements on the Company's financial position
and coverage ratios. The Company does not use derivative financial instruments
for trading purposes.
The weighted average interest rate of the debt portfolio as of December 31,
1995 is 7.2%. Approximately 48% of the Company's debt portfolio of $420 million
was subject to changes in short-term interest rates as of December 31, 1995.
Leasing is used to lower the Company's overall cost for certain capital
equipment additions. Total lease expense in 1995 was $23.3 million compared to
$20.9 million in 1994. The Company plans to lease the majority of its vending
and fleet requirements in 1996.
At the end of 1995, the Company had no material commitments for the
purchase of capital assets other than those related to normal replacement of
equipment.
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.
15
<PAGE>
ITEM 8 -- FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
COCA-COLA BOTTLING CO. CONSOLIDATED
CONSOLIDATED BALANCE SHEETS
IN THOUSANDS (EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
DEC. 31, JAN. 1,
1995 1995
<S> <C> <C>
ASSETS
Current assets:
Cash............................................................................................ $ 2,434 $ 1,812
Accounts receivable, trade, less allowance for
doubtful accounts of $406 and $400............................................................ 12,098 7,756
Accounts receivable from The Coca-Cola Company.................................................. 6,725 4,514
Due from Piedmont Coca-Cola Bottling Partnership................................................ 4,584 1,383
Accounts receivable, other...................................................................... 9,492 7,232
Inventories..................................................................................... 27,989 31,871
Prepaid expenses and other current assets....................................................... 6,935 5,054
Total current assets 70,257 59,622
PROPERTY, PLANT AND EQUIPMENT, less accumulated depreciation of $153,602 and $141,419........... 191,800 185,633
INVESTMENT IN PIEDMONT COCA-COLA BOTTLING PARTNERSHIP........................................... 65,624 67,729
OTHER ASSETS.................................................................................... 33,268 23,394
IDENTIFIABLE INTANGIBLE ASSETS, less accumulated amortization of $85,535 and $75,667............ 247,983 257,851
EXCESS OF COST OVER FAIR VALUE OF NET ASSETS OF BUSINESSES ACQUIRED, less accumulated
amortization of $23,980 and $21,689........................................................... 67,639 69,930
Total......................................................................................... $676,571 $664,159
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
16
<PAGE>
<TABLE>
<CAPTION>
DEC. 31, JAN. 1,
1995 1995
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Portion of long-term debt payable within one year............................................... $ 120 $ 300
Accounts payable and accrued liabilities........................................................ 65,510 55,215
Accounts payable to The Coca-Cola Company....................................................... 3,636 2,930
Accrued compensation............................................................................ 5,049 4,246
Accrued interest payable........................................................................ 6,259 11,275
Total current liabilities..................................................................... 80,574 73,966
DEFERRED INCOME TAXES........................................................................... 97,252 89,531
OTHER LIABILITIES............................................................................... 39,877 33,710
LONG-TERM DEBT.................................................................................. 419,896 432,971
Total liabilities............................................................................. 637,599 630,178
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
Class B Common Stock, $1 par value:
Authorized-10,000,000 shares; Issued-1,964,476 shares......................................... 1,965 1,965
Class C Common Stock, $1 par value:
Authorized-20,000,000 shares; Issued-None
Capital in excess of par value.................................................................. 120,733 130,028
Accumulated deficit............................................................................. (76,032) (86,552)
Minimum pension liability adjustment (138) (3,904)
56,618 51,627
Less-Treasury stock, at cost:
Common-2,132,800 shares....................................................................... 17,237 17,237
Class B Common-628,114 shares................................................................. 409 409
Total shareholders' equity.................................................................... 38,972 33,981
Total......................................................................................... $676,571 $664,159
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
17
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
CONSOLIDATED STATEMENTS OF OPERATIONS
IN THOUSANDS (EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FISCAL YEAR
1995 1994 1993
<S> <C> <C> <C>
NET SALES (includes sales to Piedmont of $71,123, $85,272 and $42,183)................... $761,876 $723,896 $686,960
Cost of products sold, excluding depreciation shown below (includes $62,526, $75,879 and
$38,944 related to sales to Piedmont).................................................. 447,636 427,140 396,077
GROSS MARGIN............................................................................. 314,240 296,756 290,883
Selling expenses......................................................................... 158,831 149,992 144,411
General and administrative expenses...................................................... 54,720 54,559 51,125
Depreciation expense..................................................................... 26,746 24,188 23,284
Amortization of goodwill and intangibles................................................. 12,230 12,309 14,784
INCOME FROM OPERATIONS................................................................... 61,713 55,708 57,279
Interest expense......................................................................... 33,091 31,385 30,994
Other income (expense), net.............................................................. (3,401) 63 (2,270)
Income before income taxes, extraordinary charge and effect of accounting change......... 25,221 24,386 24,015
Federal and state income taxes:
Current................................................................................ 751 304 1,921
Deferred............................................................................... 8,934 9,935 7,261
Total federal and state income taxes..................................................... 9,685 10,239 9,182
Income before extraordinary charge and effect of accounting change....................... 15,536 14,147 14,833
Extraordinary charge, net of tax benefit of $3,127....................................... (5,016)
Effect of accounting change.............................................................. (2,211)
NET INCOME............................................................................... $ 10,520 $ 11,936 $ 14,833
Income per share:
Income before extraordinary charge and effect of accounting change..................... $ 1.67 $ 1.52 $ 1.60
Extraordinary charge................................................................... (.54)
Effect of accounting change............................................................ (.24)
NET INCOME............................................................................. $ 1.13 $ 1.28 $ 1.60
Cash dividends per share:
Common Stock........................................................................... $ 1.00 $ 1.00 $ .88
Class B Common Stock................................................................... 1.00 1.00 .52
Weighted average number of Common and Class B Common shares outstanding.................. 9,294 9,294 9,258
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
18
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
IN THOUSANDS
<TABLE>
<CAPTION>
FISCAL YEAR
1995 1994 1993
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income............................................................................... $ 10,520 $ 11,936 $ 14,833
Adjustments to reconcile net income to net cash provided by operating activities:
Extraordinary charge................................................................ 5,016
Effect of accounting change......................................................... 2,211
Depreciation expense................................................................ 26,746 24,188 23,284
Amortization of goodwill and intangibles............................................ 12,230 12,309 14,784
Deferred income taxes............................................................... 8,934 9,935 7,261
(Gains) losses on sale of property, plant and equipment............................. 1,182 (1,361) 1,148
Amortization of debt costs.......................................................... 467 448 511
Undistributed loss of Piedmont Coca-Cola Bottling Partnership....................... 2,105 671 1,600
Increase in current assets less current liabilities................................. (3,174) (8,667) (403)
Increase in other noncurrent assets................................................. (9,588) (3,287) (4,414)
Increase in other noncurrent liabilities............................................ 10,891 7,779 1,191
Other............................................................................... 237 521 25
Total adjustments........................................................................ 55,046 44,747 44,987
Net cash provided by operating activities................................................ 65,566 56,683 59,820
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt............................................. 73,840
Payments on long-term debt............................................................... (1,387) (120,768)
Issuance of Common Stock................................................................. 2,269
Redemption of Medium-Term Notes.......................................................... (95,948)
Cash dividends paid...................................................................... (9,295) (9,294) (7,665)
Other.................................................................................... 791 (1,654) (1,376)
Net cash used in financing activities.................................................... (30,612) (12,335) (127,540)
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment............................................... (37,284) (49,292) (28,786)
Proceeds from the sale of property, plant and equipment.................................. 2,952 5,494 1,908
Acquisitions of companies, net of cash acquired.......................................... (1,488)
Net proceeds from sale and contribution of assets to Piedmont Coca-Cola Bottling
Partnership............................................................................ 95,934
Net cash provided by (used in) investing activities...................................... (34,332) (43,798) 67,568
NET INCREASE (DECREASE) IN CASH.......................................................... 622 550 (152)
CASH AT BEGINNING OF YEAR................................................................ 1,812 1,262 1,414
CASH AT END OF YEAR...................................................................... $ 2,434 $ 1,812 $ 1,262
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
19
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
IN THOUSANDS
<TABLE>
<CAPTION>
CLASS MINIMUM
B CAPITAL 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 3, 1993............................ $ 9,977 $1,965 $ 144,831 $(113,321) $ 17,646
Net income............................................ 14,833
Cash dividends paid................................... (7,665)
Issuance of Common Stock.............................. 113 2,156
Minimum pension liability adjustment.................. $ (5,614)
Balance on January 2, 1994............................ 10,090 1,965 139,322 (98,488) (5,614) 17,646
Net income............................................ 11,936
Cash dividends paid................................... (9,294)
Minimum pension liability adjustment.................. 1,710
Balance on January 1, 1995............................ 10,090 1,965 130,028 (86,552) (3,904) 17,646
Net income............................................ 10,520
Cash dividends paid................................... (9,295)
Minimum pension liability adjustment.................. 3,766
BALANCE ON DECEMBER 31, 1995.......................... $10,090 $1,965 $ 120,733 $ (76,032) $ (138) $ 17,646
</TABLE>
See Accompanying Notes to Consolidated Financial Statements.
20
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
Coca-Cola Bottling Co. Consolidated (the "Company") is engaged in the
production, marketing and distribution of carbonated and noncarbonated
beverages, primarily products of The Coca-Cola Company. The Company operates in
portions of 11 states, principally in the southeastern region of the United
States.
The consolidated financial statements include the accounts of the Company
and its majority owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated.
The fiscal years presented are the 52-week periods ended December 31, 1995,
January 1, 1995 and January 2, 1994.
Certain prior year amounts have been reclassified to conform to current
year classifications.
The Company's more significant accounting policies are as follows:
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash on hand, cash in banks and cash
equivalents, which are highly liquid debt instruments with maturities of less
than 90 days.
INVENTORIES
Inventories are stated at the lower of cost, primarily determined on the
last-in, first-out basis ("LIFO"), or market.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are recorded at cost and depreciated using
the straight-line method over the estimated useful lives of the assets.
Additions and major replacements or betterments are added to the assets at cost.
Maintenance and repair costs and minor replacements are charged to expense when
incurred. When assets are replaced or otherwise disposed of, the cost and
accumulated depreciation are removed from the accounts, and the gains or losses,
if any, are reflected in income.
INVESTMENT IN PIEDMONT COCA-COLA BOTTLING PARTNERSHIP
The Company beneficially owns a 50% interest in Piedmont Coca-Cola Bottling
Partnership ("Piedmont"). The Company accounts for its interest in Piedmont
using the equity method of accounting.
With respect to Piedmont, sales of soft drink products at cost, management
fee revenue and the Company's share of Piedmont's results from operations are
included in "Net sales." See Note 2 for additional information.
INCOME TAXES
The Company provides deferred income taxes for the tax effects of temporary
differences between the financial reporting and income tax bases of the
Company's assets and liabilities.
BENEFIT PLANS
The Company has a noncontributory pension plan covering substantially all
nonunion employees and one noncontributory pension plan covering certain union
employees. Costs of the plans are charged to current operations and consist of
several components of net periodic pension cost based on various actuarial
assumptions regarding future experience of the plans. In addition, certain other
union employees are covered by plans provided by their respective union
organizations. The Company expenses amounts as paid in accordance with union
agreements. The Company recognizes the cost of postretirement benefits, which
consist principally of medical benefits, during employees' periods of active
service.
Amounts recorded for benefit plans reflect estimates related to future
interest rates, investment returns, employee turnover, wage increases and health
care costs. The Company reviews all assumptions and estimates on an ongoing
basis.
21
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
INTANGIBLE ASSETS AND EXCESS OF COST OVER FAIR VALUE OF NET ASSETS OF BUSINESSES
ACQUIRED
Identifiable intangible assets resulting from the acquisition of Coca-Cola
bottling franchises are being amortized on a straight-line basis over periods
ranging from 17 to 40 years. The excess of cost over fair value of net assets of
businesses acquired is being amortized on a straight-line basis over 40 years.
The Company continually monitors conditions that may affect the carrying
value of its intangible assets. When conditions indicate potential impairment of
an intangible asset, the Company will undertake necessary market studies and
reevaluate projected future cash flows associated with the intangible asset.
When projected future cash flows, not discounted for the time value of money,
are less than the carrying value of the intangible asset, the impaired asset is
written down to its net realizable value.
PER SHARE AMOUNTS
Per share amounts are calculated based on the weighted average number of
Common and Class B Common shares outstanding.
POSTEMPLOYMENT BENEFITS
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. Postemployment benefits
encompass various types of employer-provided benefits including, but not limited
to, workers' compensation, disability-related benefits and severance benefits.
The Company adopted the provisions of SFAS 112 in the first quarter of
1994, effective January 3, 1994.
DERIVATIVE FINANCIAL INSTRUMENTS
Premiums paid for interest rate cap agreements are amortized to interest
expense over the terms of the agreements. Unamortized premiums are included in
other liabilities. Amounts receivable under cap agreements are accrued as a
reduction of interest expense.
Unamortized deferred gains or losses on interest rate swap terminations are
amortized over the lives of the initial agreements as an adjustment to interest
expense. Amounts receivable or payable under interest rate swap agreements are
included in other assets or other liabilities.
Forward rate agreements are used to fix the interest rate reset periods on
a portion of debt that is floating. The differential to be paid or received
under these agreements is accrued as interest rates change and is recognized as
an adjustment to interest expense over the terms of the agreements. Amounts
receivable or payable under forward rate agreements are included in other assets
or other liabilities.
2. INVESTMENT IN 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 certain 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 portion of
the soft drink products for Piedmont at cost and receives a fee for managing the
operations of Piedmont pursuant to a management agreement.
Subsidiaries of the Company made an initial capital contribution to
Piedmont of $70 million in the aggregate. The capital contribution made by such
subsidiaries was composed of approximately $21.7 million in cash and of bottling
operations and certain assets used in connection with the Company's Wilson,
North Carolina and Greenville and Beaufort, South Carolina territories. The cash
contributed to Piedmont by the Company's subsidiaries was provided from the
Company's available credit facilities. The Company sold other territories to
Piedmont for an aggregate purchase price of approximately $118 million. Assets
were sold or contributed at their approximate carrying values. Proceeds from the
sale of territories to
22
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Piedmont, net of the Company's cash contribution, totaled approximately $96
million and were used to reduce the Company's long-term debt.
Summarized financial information for Piedmont is as follows:
<TABLE>
<CAPTION>
DEC. 31, JAN. 1,
IN THOUSANDS 1995 1995
<S> <C> <C>
Current assets........................................................................................ $ 22,136 $ 18,907
Noncurrent assets..................................................................................... 351,450 358,371
Total assets.......................................................................................... $373,586 $377,278
Current liabilities................................................................................... $ 13,775 $ 7,035
Noncurrent liabilities................................................................................ 228,563 234,785
Total liabilities..................................................................................... 242,338 241,820
Partners' equity...................................................................................... 131,248 135,458
Total liabilities and partners' equity $373,586 $377,278
Company's equity investment........................................................................... $ 65,624 $ 67,729
</TABLE>
<TABLE>
<CAPTION>
FISCAL FISCAL FOR THE PERIOD
YEAR YEAR JULY 2, 1993 THROUGH
IN THOUSANDS 1995 1994 JANUARY 2, 1994
<S> <C> <C> <C>
Net sales........................................................................ $212,665 $194,054 $ 91,259
Cost of products sold............................................................ 126,197 109,563 52,535
Gross margin..................................................................... 86,468 84,491 38,724
Income from operations........................................................... 5,618 6,705 1,209
Net loss......................................................................... $ (4,210) $ (1,342) $ (3,200)
Company's equity in loss......................................................... $ (2,105) $ (671) $ (1,600)
</TABLE>
3. INVENTORIES
Inventories are summarized as follows:
<TABLE>
<CAPTION>
DEC.
31, JAN. 1,
IN THOUSANDS 1995 1995
<S> <C> <C>
Finished products....................................................................................... $17,809 $17,621
Manufacturing materials................................................................................. 8,809 12,638
Used bottles and cases.................................................................................. 1,371 1,612
Total inventories....................................................................................... $27,989 $31,871
</TABLE>
The amounts included above for inventories valued by the LIFO method were
greater than replacement or current cost by approximately $1.2 million and $2.1
million on December 31, 1995 and January 1, 1995, respectively, as a result of
inventory premiums associated with certain acquisitions.
23
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4. PROPERTY, PLANT AND EQUIPMENT
The principal categories and estimated useful lives of property, plant and
equipment were as follows:
<TABLE>
<CAPTION>
DEC. 31, JAN. 1, ESTIMATED
IN THOUSANDS 1995 1995 USEFUL LIVES
<S> <C> <C> <C>
Land.................................................................... $ 9,500 $ 9,898
Buildings............................................................... 71,359 65,973 10-50 years
Machinery and equipment................................................. 80,909 76,296 5-20 years
Transportation equipment................................................ 48,267 42,439 4-10 years
Furniture and fixtures.................................................. 23,027 21,180 7-10 years
Vending equipment....................................................... 88,903 88,666 6-13 years
Leasehold and land improvements......................................... 20,048 18,049 5-20 years
Construction in progress................................................ 3,389 4,551
Total property, plant and equipment, at cost............................ 345,402 327,052
Less: Accumulated depreciation.......................................... 153,602 141,419
Property, plant and equipment, net...................................... $191,800 $185,633
</TABLE>
5. IDENTIFIABLE INTANGIBLE ASSETS
The principal categories and estimated useful lives of identifiable
intangible assets, net of accumulated amortization, were as follows:
<TABLE>
<CAPTION>
DEC. 31, JAN. 1, ESTIMATED
IN THOUSANDS 1995 1995 USEFUL LIVES
<S> <C> <C> <C>
Franchise rights........................................................ $217,149 $223,679 40 years
Customer lists.......................................................... 25,400 28,129 17-23 years
Advertising savings..................................................... 4,764 5,278 17-23 years
Other................................................................... 670 765 17-18 years
Total identifiable intangible assets.................................... $247,983 $257,851
</TABLE>
24
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6. LONG-TERM DEBT
Long-term debt is summarized as follows:
<TABLE>
<CAPTION>
FIXED(F) OR
INTEREST VARIABLE(V) INTEREST DEC. 31, JAN. 1,
IN THOUSANDS MATURITY RATE RATE PAID 1995 1995
<S> <C> <C> <C> <C> <C> <C>
Lines of Credit................................ 2000 6.00%- V Varies $ 22,590 $ 93,420
6.04%
Term Loan Agreement............................ 2002 6.44%- V Varies 85,000 60,000
6.46%
Term Loan Agreement............................ 2003 6.44%- V Varies 85,000 60,000
6.46%
Medium-Term Notes.............................. 1998 6.37% V Quarterly 10,000 10,000
Medium-Term Notes.............................. 1998 10.05% F Semi- 2,000 2,000
annually
Medium-Term Notes.............................. 1999 7.99% F Semi- 28,585 66,500
annually
Medium-Term Notes.............................. 2000 10.00% F Semi- 25,500 55,000
annually
Medium-Term Notes.............................. 2002 8.56% F Semi- 47,000 66,500
annually
Debentures..................................... 2007 6.85% F Semi- 100,000
annually
Notes acquired in Sunbelt acquisition.......... 2001 8.00% F Quarterly 217 5,327
Other notes payable............................ 1996- 6.85%- F Varies 14,124 14,524
2001 12.00%
420,016 433,271
Less: Portion of long-term debt payable within one year............................................... 120 300
Long-term debt........................................................................................ $419,896 $432,971
</TABLE>
The principal maturities of long-term debt outstanding on December 31, 1995
were as follows:
<TABLE>
<CAPTION>
IN THOUSANDS
<S> <C>
1997.............................................................................................................. $ 125
1998.............................................................................................................. 12,050
1999.............................................................................................................. 28,635
2000.............................................................................................................. 50,762
Thereafter........................................................................................................ 328,324
Total long-term debt.............................................................................................. $419,896
</TABLE>
On December 21, 1995, the Company amended and restated the revolving credit
agreement totaling $170 million and extended the revolving credit maturity date
to December 2000. The agreement contains several covenants which establish ratio
requirements related to debt, interest expense and cash flow. A facility fee of
1/8% per year on the banks' commitment is payable quarterly. There were no
amounts outstanding under this facility as of December 31, 1995.
A $100 million commercial paper program was established in January 1990 for
general corporate purposes. On December 31, 1995, there were no amounts
outstanding under this program.
The Company borrows from time to time under informal lines of credit from
various banks. On December 31, 1995, the Company had $246 million of credit
available under these lines, of which $22.6 million was outstanding. Loans under
these lines are made at the sole discretion of the banks at rates negotiated at
the time of borrowing. It is the Company's intent to
25
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
renew such borrowings as they mature. To the extent that these borrowings, the
borrowings under the revolving credit facility described above, and outstanding
commercial paper do not exceed the amount available under the Company's $170
million revolving credit facility, they are classified as noncurrent
liabilities.
On November 20, 1995, the Company entered into a $170 million loan
agreement with $85 million maturing in November 2002 and $85 million maturing in
November 2003. This loan was used to repay two $60 million loans previously
entered into by the Company and other bank debt.
On June 26, 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. As of December 31,
1995 and January 1, 1995, the Company had sold $35 million of its trade accounts
receivable and used the proceeds to reduce its outstanding long-term debt. This
arrangement was amended in June 1995 to extend the arrangement to June 1998 on
terms substantially similar to those previously in place. The discount on sales
of trade accounts receivable was $2.2 million, $1.6 million, $1.4 million in
1995, 1994 and 1993, respectively, and is included in "other income (expense),
net."
On October 12, 1994, a $400 million shelf registration for debt and equity
securities filed with the Securities and Exchange Commission became effective
and the securities thereunder became available for issuance. On November 1,
1995, the Company issued $100 million of 6.85% debentures due 2007 pursuant to
such registration. The net proceeds from this issuance were used principally for
refinancing existing indebtedness with the remainder used to repay other bank
debt. As of December 31, 1995, $37.9 million of Medium-Term Notes due 1999 with
a coupon rate of 7.99%, $29.5 million of Medium-Term Notes due 2000 with a
coupon rate of 10.00% and $19.5 million of Medium-Term Notes due 2002 with a
coupon rate of 8.56% had been repurchased. An after tax extraordinary charge of
$5.0 million related to the premium paid on these repurchases was recorded in
the fourth quarter of 1995.
As of December 31, 1995, the Company was in compliance with the covenants
covering all of its various borrowing agreements.
The Company has a weighted average interest rate of 7.2% for the debt
portfolio as of December 31, 1995 compared to 7.0% at January 1, 1995. The
Company's overall weighted average borrowing rate on its long-term debt
increased from an average of 6.6% during 1994 to an average of 7.3% during 1995.
As of December 31, 1995, after taking into account all of the interest rate
hedging activities, approximately $203 million or 48% of the total debt
portfolio was subject to changes in short-term interest rates.
A rate increase of 1% would increase annual interest expense by
approximately $2.0 million and net income for the year ended December 31, 1995
would have been reduced by approximately $1.2 million. Interest coverage as of
December 31, 1995 would have been 2.0 times (versus 2.1 times) if interest rates
increased by 1%.
7. DERIVATIVE FINANCIAL INSTRUMENTS
The Company uses interest rate hedging products to modify risk from
interest rate fluctuations in its underlying debt. The Company has historically
altered its fixed/floating 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. During 1995, and in conjunction with the Company's
early retirement of a portion of its Medium-Term Notes, all but two of the
derivative financial instruments held by the Company were extinguished.
All deferred gains and losses on interest rate hedging transactions
associated with the retired Medium-Term Notes have been recognized in 1995. The
notional amount of the extinguished interest rate swaps exceeds the amount of
debt retired due to the Company's practice of offsetting swaps. Offsetting swaps
rather than an original swap were used to help mitigate counterparty credit risk
as well as reduce administrative burden. The offsetting swaps along with
original swaps and the underlying debt were accounted for as a combined
instrument. The Company does not use derivative financial instruments for
trading or other speculative purposes nor does it use leveraged financial
instruments. All of the Company's outstanding interest rate swap agreements are
LIBOR-based. The Company's two remaining interest rate swaps are with the same
financial institution and effectively offset each other. Accordingly, risk of
counterparty nonperformance is considered minimal.
26
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Derivative financial instruments are summarized as follows:
<TABLE>
<CAPTION>
December 31, 1995 January 1, 1995
Remaining Remaining
IN THOUSANDS Amount Term Amount Term
<S> <C> <C> <C> <C>
Interest rate swaps -- floating............................................ $60,000 8 years $221,600 6-9 years
Interest rate swaps -- fixed............................................... 60,000 8 years 215,000 1-9 years
Interest rate caps......................................................... -0- -- 110,000 .5 years
</TABLE>
INTEREST RATE SWAP ACTIVITY
The table below summarizes interest rate swap activity for the period
ending December 31, 1995:
<TABLE>
<CAPTION>
IN THOUSANDS
<S> <C>
Total swaps, January 1, 1995..................................................................................... $ 436,600
New swaps........................................................................................................ 25,000
Terminated swaps................................................................................................. (341,600)
Expired swaps.................................................................................................... -0-
Total swaps, December 31, 1995................................................................................... $ 120,000
</TABLE>
8. FAIR VALUES OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used by the Company in
estimating the fair values of its financial instruments:
PUBLIC DEBT
The fair values of the Company's public debt are based on estimated market
prices.
NON-PUBLIC VARIABLE RATE LONG-TERM DEBT
The carrying amounts of the Company's variable rate borrowings approximate
their fair values.
NON-PUBLIC FIXED RATE LONG-TERM DEBT
The fair values of the Company's fixed rate long-term borrowings are
estimated using discounted cash flow analyses based on the Company's current
incremental borrowing rates for similar types of borrowing arrangements.
DERIVATIVE FINANCIAL INSTRUMENTS
Fair values for the Company's interest rate swaps are based on current
settlement values.
The carrying amounts and fair values of the Company's balance sheet and
off-balance-sheet instruments were as follows:
<TABLE>
<CAPTION>
December 31, 1995 January 1, 1995
IN THOUSANDS Carrying Amount Fair Value Carrying Amount Fair Value
<S> <C> <C> <C> <C>
Balance Sheet Instruments
Public debt...................................................... $ 213,085 $ 228,103 $ 200,000 $ 201,119
Non-public variable rate long-term debt.......................... 192,590 192,590 213,420 213,420
Non-public fixed rate long-term debt............................. 14,341 16,189 19,851 19,030
Off-Balance-Sheet Instruments
Interest rate swaps.............................................. (4,725) (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.
27
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
9. COMMITMENTS AND GUARANTEES
Operating lease payments are charged to expense as incurred. Such rental
expenses included in the consolidated statements of operations were $23.3
million, $20.9 million and $17.3 million for 1995, 1994 and 1993, respectively.
The following is a summary of future minimum lease payments for all
operating leases as of December 31, 1995:
<TABLE>
<CAPTION>
IN THOUSANDS
<S> <C>
1996.............................................................................................................. $ 23,255
1997.............................................................................................................. 20,759
1998.............................................................................................................. 18,940
1999.............................................................................................................. 14,588
2000.............................................................................................................. 11,445
Thereafter........................................................................................................ 29,651
Total minimum lease payments...................................................................................... $118,638
</TABLE>
The Company is a member of one cooperative from which it is obligated to
purchase a specified minimum number of plastic bottles on an annual basis
through December 1998. The annual purchase commitment under this agreement is
approximately $.5 million. The Company is a member of another cooperative from
which it is obligated to purchase a specified number of cases of finished
product on an annual basis. The current annual purchase commitment under this
agreement is approximately $40 million.
The Company guarantees a portion of the debt for one cooperative from which
the Company purchases plastic bottles. The Company also guarantees a portion of
debt for South Atlantic Canners, Inc., a manufacturing cooperative that is being
managed by the Company. See Note 13 to the consolidated financial statements for
additional information concerning these financial guarantees. The total amounts
guaranteed on December 31, 1995 and January 1, 1995 were $35.2 million and $31.0
million, respectively.
The Company has entered into purchase agreements for aluminum cans on an
annual basis through 2000. The annual purchase commitment under these agreements
is approximately $39 million.
10. INCOME TAXES
The provision for income taxes on income before extraordinary charge and
the effect of an accounting change consisted of the following:
<TABLE>
<CAPTION>
FISCAL YEAR
IN THOUSANDS 1995 1994 1993
<S> <C> <C> <C>
Current:
Federal................................................................................... $ 751 $ 304 $ 1,921
State.....................................................................................
751 304 1,921
Deferred:
Federal................................................................................... 9,382 8,957 (27,748)
State..................................................................................... 2,130 1,213 (3,662)
Benefit of acquired loss carryforwards used to reduce franchise value..................... 35,599
Benefit (expense) of minimum pension liability adjustment................................. (2,578) (359) 3,072
Other..................................................................................... 124
8,934 9,935 7,261
Income tax expense.......................................................................... $ 9,685 $10,239 $ 9,182
</TABLE>
Income tax benefits of $1.7 million were recorded in 1994 in conjunction
with the adoption of SFAS 112. Income tax benefits of $3.1 million were recorded
in 1995 related to the extraordinary charge associated with the early retirement
of long-term debt at a premium.
28
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Company made income tax payments for alternative minimum tax of
approximately $1.1 million and $.3 million during 1995 and 1994, respectively.
Deferred income taxes are recorded based upon differences between the
financial statement and tax bases of assets and liabilities and available tax
credit carryforwards. Temporary differences and carryforwards that comprised a
significant part of deferred income tax assets and liabilities were as follows:
<TABLE>
<CAPTION>
DEC. 31, JAN. 1,
IN THOUSANDS 1995 1995
<S> <C> <C>
Intangible assets..................................................................................... $106,752 $107,886
Depreciation.......................................................................................... 23,166 22,249
Investment in Piedmont................................................................................ 19,417 18,715
Other................................................................................................. 10,309 16,920
Gross deferred income tax liabilities................................................................. 159,644 165,770
Net operating loss carryforwards...................................................................... (39,736) (56,497)
Other................................................................................................. (25,817) (18,278)
Gross deferred income tax assets...................................................................... (65,553) (74,775)
Tax benefit of minimum pension liability adjustment................................................... (48) (2,713)
Deferred income tax liability......................................................................... $ 94,043 $ 88,282
</TABLE>
Net current deferred tax assets of $3.2 million and $1.2 million were
included in prepaid expenses and other current assets on December 31, 1995 and
January 1, 1995, respectively.
Reported income tax expense is reconciled to the amount computed on the
basis of income before income taxes, extraordinary charge and effect of
accounting change at the statutory rate as follows:
<TABLE>
<CAPTION>
FISCAL YEAR
IN THOUSANDS 1995 1994 1993
<S> <C> <C> <C>
Statutory expense.............................................................................. $8,827 $ 8,535 $ 8,405
Amortization of franchise and goodwill assets.................................................. 364 364 364
State income taxes, net of federal benefit..................................................... 758 1,244 1,185
Effect of change in statutory tax rates........................................................ 2,100
Adjustment of valuation allowance.............................................................. (3,216)
Other.......................................................................................... (264) 96 344
Income tax expense............................................................................. $9,685 $10,239 $ 9,182
</TABLE>
The Company had $3.5 million of investment tax credits available to reduce
future income tax payments for federal income tax purposes on December 31, 1995.
These credits expire in varying amounts through 2001.
On December 31, 1995, the Company had $97 million and $132 million of
federal and state net operating losses, respectively, available to reduce future
income taxes. The net operating loss carryforwards expire in varying amounts
through 2007.
The Omnibus Budget Reconciliation Act of 1993 increased the maximum federal
income tax rate from 34% to 35% effective January 1, 1993. This increase
resulted in additional income tax expense of $2.1 million for the year ended
January 2, 1994.
11. CAPITAL TRANSACTIONS
On April 9, 1993, the Company acquired all of the outstanding stock of
Whirl-i-Bird, Inc. in exchange for 80,000 shares of the Company's Common Stock
valued at $1.6 million (based on the closing market price of $20 per share on
March 17, 1993). Whirl-i-Bird, Inc. had previously leased a helicopter to the
Company from time to time and was wholly owned by J. Frank Harrison, Jr., the
Chairman of the Board of Directors of the Company. On June 25, 1993, the Company
issued
29
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
33,464 shares of its Common Stock to The Coca-Cola Company at a price of $20 per
share. These shares were issued pursuant to a Stock Rights and Restrictions
Agreement dated January 27, 1989 that provided The Coca-Cola Company a
preemptive right to purchase a number of shares of the Company's equity
securities as necessary to allow it to maintain ownership of both 29.67% of the
outstanding shares of common stock of all classes and 22.59% of the total votes
of all outstanding shares of all classes. This preemptive right was triggered by
the issuance of shares pursuant to the Whirl-i-Bird transaction.
Shareholders with Class B Common Stock are entitled to 20 votes per share
compared to one vote per share on the Common Stock. Dividends on the Class B
Common Stock are permitted to equal, but not exceed, dividends on the Common
Stock. On February 8, 1994, the Board of Directors increased the dividend for
the first quarter of 1994 to $.25 per share on both the Common and Class B
Common shares outstanding. This dividend rate was maintained throughout 1994 and
1995.
On March 8, 1989, the Company granted J. Frank Harrison, Jr. an option for
the purchase of 100,000 shares of Common Stock exercisable at the closing market
price of the stock on the day of grant. The closing market price of the stock on
March 8, 1989 was $27.00 per share. The option is exercisable, in whole or in
part, at any time at the election of Mr. Harrison, Jr. over a period of 15 years
from the date of grant. This option has not been exercised with respect to any
such shares.
On August 9, 1989, the Company granted J. Frank Harrison, III an option for
the purchase of 150,000 shares of Common Stock exercisable at the closing market
price of the stock on the day of grant. The closing market price of the stock on
August 9, 1989 was $29.75 per share. The option may be exercised, in whole or in
part, during a period of 15 years beginning on the date of grant. The option is
currently exercisable with respect to 127,500 shares and is exercisable with
respect to an additional 7,500 shares annually. This option has not been
exercised with respect to any such shares.
12. BENEFIT PLANS
Pension plan expense related to the two Company-sponsored pension plans for
1995, 1994 and 1993 was $2.7 million, $2.6 million and $2.5 million,
respectively, including the pro rata share of past service costs, which are
being amortized over 30 years. In addition, certain employees are covered by
pension plans administered by unions.
Retirement benefits under the Company's principal pension plan are based on
the employee's length of service, average compensation over the five consecutive
years which gives the highest average compensation and the average of the Social
Security taxable wage base during the 35-year period before a participant
reaches Social Security retirement age. Contributions to the plan are based on
the projected unit credit actuarial funding method and are limited to the
amounts that are currently deductible for tax purposes.
The following table sets forth the status of the two Company-sponsored
plans:
<TABLE>
<CAPTION>
DEC. 31, JAN. 1,
IN THOUSANDS 1995 1995
<S> <C> <C>
Actuarial present value of benefit obligations:
Accumulated benefit obligation, including vested benefits of $48,990 and $40,779..................... $ 50,236 $ 42,282
Projected benefit obligation for service rendered to date.............................................. (56,427) (47,355)
Plan assets at fair market value....................................................................... 51,988 41,107
Projected benefit obligation in excess of plan assets.................................................. (4,439) (6,248)
Unrecognized net loss.................................................................................. 11,752 12,158
Unrecognized prior service cost........................................................................ (1,207) 12
Unrecognized net asset being amortized over 7 years.................................................... (210) (280)
Additional minimum pension liability................................................................... (225) (6,816)
Pension asset (liability).............................................................................. $ 5,671 $ (1,174)
</TABLE>
Under the requirements of Statement of Financial Accounting Standards No.
87, "Employers' Accounting for Pensions," an additional minimum pension
liability for certain plans, representing the excess of accumulated benefits
over plan assets,
30
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
was recognized as of January 2, 1994. The increase in liabilities was charged
directly to shareholders' equity. As of December 31, 1995 and January 1, 1995,
the minimum pension liability adjustment, net of income taxes, was $138,000 and
$3.9 million, respectively.
Net periodic pension cost for the Company-sponsored pension plans included
the following:
<TABLE>
<CAPTION>
FISCAL YEAR
IN THOUSANDS 1995 1994 1993
<S> <C> <C> <C>
Service cost-benefits earned.................................................................. $ 1,901 $ 1,916 $ 1,693
Interest cost on projected benefit obligation................................................. 4,015 3,556 3,310
Actual return on plan assets.................................................................. (6,993) 1,169 (3,965)
Net amortization and deferral................................................................. 3,732 (4,034) 1,446
Net periodic pension cost..................................................................... $ 2,655 $ 2,607 $ 2,484
</TABLE>
The actuarial assumptions that were used for the Company's principal
pension plan calculations were as follows:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Weighted average discount rate used in determining the actuarial present value of the projected benefit
obligation............................................................................................... 7.75% 8.25%
Weighted average expected long-term rate of return on plan assets.......................................... 9.0% 9.0%
Weighted average rate of compensation increase............................................................. 4.50% 4.75%
</TABLE>
The Company provides a 401(k) Savings Plan for substantially all of its
nonunion employees. Under provisions of the Savings Plan, an employee is vested
with respect to Company contributions upon the earlier of two consecutive years
of service while participating in the Savings Plan or after five years of
service with the Company. The total cost for this benefit in 1995, 1994 and 1993
was $1.6 million, $1.3 million and $1.5 million, respectively.
The Company recognizes the cost of postretirement benefits, which consist
principally of medical benefits, during employees' periods of active service.
The Company does not pre-fund these benefits and has the right to modify or
terminate certain of these plans in the future.
The components of postretirement benefit expense were as follows:
<TABLE>
<CAPTION>
FISCAL YEAR
IN THOUSANDS 1995 1994 1993
<S> <C> <C> <C>
Service cost -- benefits earned.................................................................. $ 338 $ 304 $ 238
Interest cost on projected benefit obligation.................................................... 1,275 989 1,223
Net amortization................................................................................. 11
Net postretirement benefit cost.................................................................. $1,624 $1,293 $1,461
</TABLE>
The accrued postretirement benefit obligation was comprised of the
following:
<TABLE>
<CAPTION>
DEC. 31, JAN. 1,
IN THOUSANDS 1995 1995
<S> <C> <C>
Accumulated postretirement benefit obligation:
Retirees.............................................................................................. $10,025 $ 9,163
Fully eligible active plan participants............................................................... 2,231 1,738
Other active plan participants........................................................................ 4,124 3,251
16,380 14,152
Unrecognized transition asset........................................................................... 394 418
Unrecognized net loss................................................................................... (2,443) (1,622)
Accrued postretirement benefit obligation............................................................... $14,331 $12,948
</TABLE>
31
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The weighted average health care cost trend rate used in measuring the
postretirement benefit expense was 9% in 1995 gradually declining to 5.25% in
1999 and remaining at that level thereafter. A 1% increase in this annual trend
rate would have increased the accumulated postretirement benefit obligation on
December 31, 1995 by approximately $1.7 million and postretirement benefit
expense in 1995 would have increased by approximately $227,000. The weighted
average discount rates used to estimate the accumulated postretirement benefit
obligation were 7.75% and 8.25% as of December 31, 1995 and January 1, 1995,
respectively.
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,
and recorded a one-time, after tax charge of $2.2 million. The annual
incremental cost of adoption of SFAS No. 112 is not material on an ongoing
basis.
13. RELATED PARTY TRANSACTIONS
The Company's business consists primarily of the production, marketing and
distribution of soft drink products of The Coca-Cola Company, which is the sole
owner of the secret formulas under which the primary components (either
concentrates or syrups) of its soft drink products are manufactured.
Accordingly, the Company purchases a substantial majority of its requirements
for concentrates and syrups from The Coca-Cola Company in the ordinary course of
its business. The Company paid The Coca-Cola Company approximately $186 million,
$187 million and $158 million in 1995, 1994 and 1993, respectively, for
sweetener, syrup, concentrate and other miscellaneous purchases. Additionally,
the Company engages in a variety of marketing programs, local media advertising
and similar arrangements to promote the sale of products of The Coca-Cola
Company in territories operated by the Company. Total direct marketing support
provided to the Company by The Coca-Cola Company was approximately $36 million,
$32 million and $28 million in 1995, 1994 and 1993, respectively. In addition,
the Company paid approximately $18 million, $15 million and $13 million in 1995,
1994 and 1993, respectively, for local media and marketing program expense
pursuant to cooperative advertising and cooperative marketing arrangements with
The Coca-Cola Company.
On July 2, 1993, the Company and The Coca-Cola Company formed Piedmont. The
Company and The Coca-Cola Company, through their respective subsidiaries, each
beneficially own a 50% interest in Piedmont. The Company provides a portion of
the soft drink products for Piedmont at cost and receives a fee for managing the
operations of Piedmont pursuant to a management agreement. The Company sold
product to Piedmont during 1995, 1994 and the six months ended January 2, 1994,
at cost, totaling $62.5 million, $75.9 million and $38.9 million, respectively.
The Company received $10.7 million, $10.1 million and $4.8 million for
management services pursuant to its management agreement with Piedmont for 1995,
1994 and 1993, respectively. Also, the Company subleased various fleet and
vending equipment to Piedmont at cost. These sublease rentals amounted to
approximately $784,000, $693,000 and $380,000 in 1995, 1994 and 1993,
respectively. In addition, Piedmont subleased various fleet and vending
equipment to the Company at cost. These sublease rentals amounted to
approximately $186,000, $56,000 and $2,000 in 1995, 1994 and 1993, respectively.
On November 30, 1992, the Company and the owner of the Company's Snyder
Production Center in Charlotte, North Carolina agreed to the early termination
of the Company's lease. Harrison Limited Partnership One purchased the property
contemporaneously with the termination of the lease, and the Company and
Harrison Limited Partnership One entered into an agreement pursuant to which the
Company leased the property for a 10-year term beginning on December 1, 1992. A
North Carolina corporation owned entirely by J. Frank Harrison, Jr. serves as
sole general partner of the limited partnership. The sole limited partner of
this limited partnership is a trust as to which J. Frank Harrison, III and Reid
M. Henson are co-trustees. The annual base rent the Company is obligated to pay
for its lease of the Snyder Production Center is subject to adjustment for
increases in the Consumer Price Index and for increases or decreases in interest
rates, using LIBOR as the measurement device. Rent expense under this lease
totaled $2,593,000, $2,007,000 and $1,947,000 in 1995, 1994 and 1993,
respectively.
On June 1, 1993, the Company entered into a 10-year lease agreement with
Beacon Investment Corporation related to the Company's headquarters office
building. Beacon Investment Corporation's sole shareholder is J. Frank Harrison,
III. The annual base rent the Company is obligated to pay under this lease is
subject to adjustment for increases in the Consumer Price
32
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Index and for increases or decreases in interest rates, using LIBOR as the
measurement device. Rent expense under this lease totaled $1,804,000, $1,560,000
and $738,000 in 1995, 1994 and 1993, respectively.
The Company is a shareholder in two entities from which it purchases
substantially all its requirements for plastic bottles. Net purchases from these
entities were approximately $52 million, $44 million and $47 million in 1995,
1994 and 1993, respectively. In connection with its participation in one of
these cooperatives, the Company has guaranteed a portion of the cooperative's
debt. On December 31, 1995, such guarantee amounted to approximately $20
million.
The Company has also guaranteed a portion of debt for South Atlantic
Canners, Inc., a manufacturing cooperative that is being managed by the Company.
On December 31, 1995, such guarantee was approximately $15.2 million.
The Company leases vending equipment from Coca-Cola Financial Corporation
("CCFC"), a subsidiary of The Coca-Cola Company. Future lease payments to CCFC
as of December 31, 1995 totaled $49.6 million. During 1995, the Company made
lease payments to CCFC totaling $4.4 million.
See Note 11 to the consolidated financial statements for information
concerning the Whirl-i-Bird transaction.
14. LITIGATION
On March 4, 1993, a Complaint was filed against the Company, the
predecessor bottling company for the Laurel, Mississippi territory and other
unnamed parties by the testatrix spouse of a deceased former employee of the
predecessor bottler. This suit alleges misrepresentation and fraud in connection
with the severance package offered to employees terminated by the predecessor
bottler in connection with the acquisition of the Laurel franchise subsidiary of
the Company. Plaintiff seeks damages in an amount up to $18 million in
compensatory and punitive damages. The Company believes that the Complaint is
without merit and its ultimate disposition will not have a material adverse
effect on the financial condition or results of operations of the Company.
15. RISKS AND UNCERTAINTIES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Approximately 90% of the Company's sales are products of The Coca-Cola
Company, which is the sole supplier of the concentrate required to manufacture
these products. Additionally, the Company purchases virtually all of its
requirements for sweetener from The Coca-Cola Company.
The Company currently obtains all of its aluminum cans from two domestic
suppliers. The Company currently obtains all of its PET bottles from two
domestic cooperatives. The inability of either of these aluminum can or PET
bottle suppliers to meet the Company's requirement for containers could result
in short-term shortages until alternative sources of supply could be located.
Less than 10% of the Company's labor force is currently covered by
collective bargaining agreements. There are no material collective bargaining
contracts expiring during 1996.
33
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
16. SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Changes in current assets and current liabilities affecting cash, net of
effects from acquisitions and divestitures and the effect of an accounting
change, were as follows:
<TABLE>
<CAPTION>
FISCAL YEAR
IN THOUSANDS 1995 1994 1993
<S> <C> <C> <C>
Accounts receivable, trade, net............................................................... $(4,342) $(2,796) $(9,319)
Due from Piedmont............................................................................. (3,201) 1,071 (2,454)
Accounts receivable, other.................................................................... (4,471) 5,710 (3,524)
Inventories................................................................................... 3,882 (4,338) (2,939)
Prepaid expenses and other assets............................................................. (1,881) (1,729) (845)
Portion of long-term debt payable within one year............................................. (180) (411) (793)
Accounts payable and accrued liabilities...................................................... 11,232 (9,381) 20,656
Accrued compensation.......................................................................... 803 2,040 (251)
Accrued interest payable...................................................................... (5,016) 1,167 (934)
Increase in current assets less current liabilities........................................... $(3,174) $(8,667) $ (403)
</TABLE>
Cash payments for interest and income taxes were as follows:
<TABLE>
<CAPTION>
FISCAL YEAR
IN THOUSANDS 1995 1994 1993
<S> <C> <C> <C>
Interest..................................................................................... $36,749 $30,218 $31,417
Income taxes................................................................................. 1,475 56 2,900
</TABLE>
17. QUARTERLY FINANCIAL DATA (UNAUDITED)
Set forth below are unaudited quarterly financial data for the fiscal years
ended December 31, 1995 and January 1, 1995.
<TABLE>
<CAPTION>
IN THOUSANDS (EXCEPT PER SHARE DATA) QUARTER
YEAR ENDED DECEMBER 31, 1995 1 2 3 4
<S> <C> <C> <C> <C>
Net sales.................................................................... $170,977 $207,876 $203,559 $179,464
Gross margin................................................................. 72,074 87,134 82,727 72,305
Income before extraordinary charge........................................... 1,957 8,054 4,639 886
Extraordinary charge......................................................... (5,016)
Net income (loss)............................................................ 1,957 8,054 4,639 (4,130)
Per share:
Income before extraordinary charge......................................... .21 .87 .50 .09
Extraordinary charge....................................................... (.54)
Net income (loss).......................................................... .21 .87 .50 (.45)
Weighted average number of common shares outstanding......................... 9,294 9,294 9,294 9,294
</TABLE>
<TABLE>
<CAPTION>
IN THOUSANDS (EXCEPT PER SHARE DATA) QUARTER
YEAR ENDED JANUARY 1, 1995 1 2 3 4
<S> <C> <C> <C> <C>
Net sales.................................................................... $163,817 $200,692 $188,418 $170,969
Gross margin................................................................. 66,333 81,751 75,864 72,808
Income before effect of accounting change.................................... 1,510 6,700 4,899 1,038
Effect of accounting change.................................................. (2,211)
Net income (loss)............................................................ (701) 6,700 4,899 1,038
Per share:
Income before effect of accounting change.................................. .16 .72 .53 .11
Effect of accounting change................................................ (.24)
Net income (loss).......................................................... (.08) .72 .53 .11
Weighted average number of common shares outstanding......................... 9,294 9,294 9,294 9,294
</TABLE>
34
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS
OF COCA-COLA BOTTLING CO. CONSOLIDATED
In our opinion, the consolidated financial statements listed in the index
appearing under Item 14(a) (1) and (2) of this filing present fairly, in all
material respects, the financial position of Coca-Cola Bottling Co. Consolidated
and its subsidiaries at December 31, 1995 and January 1, 1995, and the results
of their operations and their cash flows for each of the three years in the
period ended December 31, 1995, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of the Company's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with generally accepted auditing standards which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion expressed
above.
During 1994, the Company changed its method of accounting for
postemployment benefits, as described in Note 12.
PRICE WATERHOUSE LLP
Charlotte, North Carolina
February 23, 1996
35
<PAGE>
The financial statement schedule required by Regulation S-X is set forth in
response to Item 14 below.
The supplementary data required by Item 302 of Regulation S-K is set forth
in Note 17 to the financial statements.
ITEM 9 -- CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not applicable.
PART III
ITEM 10 -- DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
For information with respect to the executive officers of the Company, see
"Executive Officers of the Registrant" at the end of Part I of this Report. For
information with respect to the Directors of the Company, see the "Election of
Directors" and "Certain Transactions" sections of the Proxy Statement for the
1996 Annual Meeting of Shareholders to be filed with the Securities and Exchange
Commission, which is incorporated herein by reference. For information with
respect to Section 16 reports for directors and executive officers of the
Company, see the "Election of Directors -- Beneficial Ownership of Management"
section of the Proxy Statement for the 1996 Annual Meeting of Shareholders.
ITEM 11 -- EXECUTIVE COMPENSATION
For information with respect to executive compensation, see the "Executive
Compensation" section of the Proxy Statement for the 1996 Annual Meeting of
Shareholders to be filed with the Securities and Exchange Commission, which is
incorporated herein by reference (other than the subsections entitled "Report of
the Compensation Committee on Annual Compensation of Executive Officers" and
"Common Stock Performance," which are specifically excluded from such
incorporation).
ITEM 12 -- SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
For information with respect to security ownership of certain beneficial
owners and management, see the "Principal Shareholders" and "Election of
Directors -- Beneficial Ownership of Management" sections of the Proxy Statement
for the 1996 Annual Meeting of Shareholders to be filed with the Securities and
Exchange Commission, which is incorporated herein by reference.
ITEM 13 -- CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
For information with respect to certain relationships and related
transactions, see the "Certain Transactions" and "Compensation Committee
Interlocks and Insider Participation" sections of the Proxy Statement for the
1996 Annual Meeting of Shareholders to be filed with the Securities and Exchange
Commission, which are incorporated herein by reference.
PART IV
ITEM 14 -- EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
A. List of Documents filed as part of this report.
1. Financial Statements
Report of Independent Accountants
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Cash Flows
Consolidated Statements of Changes in Shareholders' Equity
Notes to Consolidated Financial Statements
2. Financial Statement Schedule
The following financial statement schedule is filed as part
of this report following this Item 14. The Report of Independent
Accountants with respect to the financial statement schedule is
included in Item 8 above.
Schedule II -- Valuation and Qualifying Accounts and Reserves
36
<PAGE>
All other financial statements and schedules not listed have
been omitted because the required information is included in the
consolidated financial statements or the notes thereto, or is not
applicable or required.
3. Listing of Exhibits:
(i) Exhibits Incorporated by Reference:
EXHIBIT INDEX
<TABLE>
<CAPTION>
Page Number or
Number Description Incorporation by Reference to
<S> <C> <C>
(1.1) Underwriting Agreement dated November 1, 1995 Exhibit 1.1 to the Company's
among the Company, Citicorp Securities, Inc. and Quarterly Report on Form 10-Q
Solomon Brothers, Inc. for the quarter ended October 1,
1995.
(3.1) Bylaws of the Company, as amended. Exhibit 3.2 to the Company's
Registration Statement
(No. 33-54657) on Form S-3.
(3.2) Restated Certificate of Incorporation of the Company. Exhibit 3.1 to the Company's
Registration Statement
(No. 33-54657) on Form S-3.
(4.1) Specimen of Common Stock Certificate. Exhibit 4.1 to the Company's
Registration Statement
(No. 2-97822) on Form S-1.
(4.2) Specimen Fixed Rate Note under the Company's Exhibit 4.1 to the Company's
Medium-Term Note Program, pursuant to which it Current Report on Form 8-K
may issue, from time to time, up to $200 million dated February 14, 1990.
aggregate principal amount of its Medium-Term
Notes, Series A.
.
(4.3) Specimen Floating Rate Note under the Company's Exhibit 4.2 to the Company's
Medium-Term Note Program, pursuant to which it Current Report on Form 8-K
may issue, from time to time, up to $200 million dated February 14, 1990.
aggregate principal amount of its Medium-Term
Notes, Series A.
(4.4) Indenture dated as of October 15, 1989 between the Exhibit 4. to the Company's
Company and Manufacturers Hanover Trust Company Registration Statement
of California, as Trustee, in connection with the Company's (No. 33-31784) on Form S-3
$200 million shelf registration of its Medium-Term as filed on February 14, 1990.
Notes, Series A, due from nine months to 30 years
from date of issue.
<PAGE>
(4.5) Selling Agency Agreement, dated as of February 14, Exhibit 1.2 to the Company's
1990, between the Company and Salomon Brothers Registration Statement
and Goldman Sachs, as Agents, in connection with the (No. 33-31784) on Form S-3
Company's $200 million Medium-Term Notes, Series A, as filed on February 14, 1990.
due from nine months to 30 years from date of issue.
(4.6) Form of Debenture issued by the Company to two Exhibit 4.04 to the Company's
shareholders of Sunbelt Coca-Cola Bottling Company, Current Report on Form 8-K
Inc. dated as of December 19, 1991. dated December 19, 1991.
(4.7) Commercial Paper Dealer Agreement, dated as of Exhibit 4.14 to the Company's
February 11, 1993, between the Company and Annual Report on Form 10-K
Citicorp Securities Markets, Inc., as co-agent. for the fiscal year ended
January 3, 1993.
(4.8) Amended and restated commercial paper agreement, Exhibit 4.13 to the Company's
dated as of November 14, 1994, between the Company Annual Report on Form 10-K
and Goldman Sachs Money Markets, L.P. for the fiscal year ended
January 1, 1995.
(4.9) Supplemental Indenture, dated as of March 3, 1995, Exhibit 4.15 to the Company's
between the Company and NationsBank of Georgia, Annual Report, as amended, on
National Association, as Trustee. Form 10-K/A-2 for the fiscal
year ended January 1, 1995.
(4.10) First Omnibus Amendment to Purchase Agreements, Exhibit 4.1 to the Company's
dated as of June 26, 1995, by and among the Company, Quarterly Report on Form 10-Q
as Seller, Corporate Receivables Corporation, as the for the quarter ended July 2,
Investor, and Citicorp North America, Inc., individually 1995.
and as agent.
(4.11) Form of the Company's 6.85% Debentures due 2007. Exhibit 4.1 to the Company's
Quarterly Report on Form 10-Q
for the quarter ended October 1,
1995.
(4.12) The Registrant, by signing this report, agrees to furnish
the Securities and Exchange Commission, upon its request,
a copy of any instrument which defines the rights of
holders of long-term debt of the Registrant and its
subsidiaries for which consolidated financial statements
are required to be filed, and which authorizes a total amount
of securities not in excess of 10 percent of total assets of
the Registrant and its subsidiaries on a consolidated basis.
<PAGE>
(4.13) Loan Agreement dated as of November 20, 1995 Exhibit included in this filing.
between the Company and LTCB Trust Company, as
Agent, and other banks named therein.
(4.14) Amended and Restated Credit Agreement dated as of Exhibit included in this filing.
December 21, 1995 between the Company and NationsBank,
N.A., Bank of America National Trust and Savings
Association and other banks named therein.
(10.1) Employment Agreement of James L. Moore, Jr. dated as Exhibit 10.2 to the Company's
of March 16, 1987. Annual Report on Form 10-K
for the fiscal year ended
December 31, 1986.
(10.2) Amendment, dated as of May 18, 1994, to Employment Exhibit 10.84 to the Company's
Agreement designated as Exhibit 10.1. Annual Report on Form 10-K
for the fiscal year ended
January 1, 1995.
(10.3) Stock Rights and Restrictions Agreement by and Exhibit 28.01 to the Company's
between Coca-Cola Bottling Co. Consolidated and Current Report on Form 8-K
The Coca-Cola Company dated January 27, 1989. dated January 27, 1989.
(10.4) Description and examples of bottling franchise agreements Exhibit 10.20 to the Company's
between the Company and The Coca-Cola Company. Annual Report on Form 10-K
for the fiscal year ended
December 31, 1988.
(10.5) Lease, dated as of December 11, 1974, by and between Exhibit 19.6 to the Company's
the Company and the Ragland Corporation, related to the Annual Report on Form 10-K
production/distribution facility in Nashville, Tennessee. for the fiscal year ended
December 31, 1988.
(10.6) Amendment to Lease Agreement designated as Exhibit 19.7 to the Company's
Exhibit 10.5. Annual Report on Form 10-K
for the fiscal year ended
December 31, 1988.
(10.7) Second Amendment to Lease Agreement designated as Exhibit 19.8 to the Company's
Exhibit 10.5. Annual Report on Form 10-K
for the fiscal year ended
December 31, 1988.
<PAGE>
(10.8) Supplemental Savings Incentive Plan, dated as of April 1, Exhibit 10.36 to the Company's
1990 between certain Eligible Employees of the Company Annual Report on Form 10-K
and the Company. for the fiscal year ended
December 30, 1990.
(10.9) Description and example of Deferred Compensation Exhibit 19.1 to the Company's
Agreement, dated as of October 1, 1987, between Eligible Annual Report on Form 10-K
Employees of the Company and the Company under for the fiscal year ended
the Officer's Split-Dollar Life Insurance Plan. December 30, 1990.
(10.10) Consolidated/Sunbelt Acquisition Agreement, dated as of Exhibit 2.01 to the Company's
December 19, 1991, by and among the Company and the Current Report on Form 8-K
shareholders of Sunbelt Coca-Cola Bottling Company, Inc. dated December 19, 1991.
(10.11) Officer Retention Plan, dated as of January 1, 1991, Exhibit 10.47 to the Company's
between certain Eligible Officers of the Company and the Annual Report on Form 10-K
Company. for the fiscal year ended
December 29, 1991.
(10.12) Acquisition Agreement, by and among Sunbelt Coca-Cola Exhibit 10.50 to the Company's
Bottling Company, Inc., Sunbelt Carolina Acquisition Annual Report on Form 10-K
Company,Inc., certain of the common stockholders of for the fiscal year ended
Coca-Cola Bottling Co. Affiliated, Inc., and the stock- ended December 29, 1991.
holders of TRNH, Inc., dated as of November 7, 1989.
(10.13) Amendment Number One to the Sunbelt/Affiliated Exhibit 10.04 to the Company's
Acquisition Agreement, dated as of December 29, 1989, Quarterly Report on Form 10-Q
between Sunbelt Coca-Cola Bottling Company, Inc., for the quarter ended March 29,
Sunbelt Carolina Acquisition Company, Inc., certain 1992.
of the common stockholders of Coca-Cola Bottling Co.
Affiliated, Inc. and the stockholders of TRNH, Inc.
(10.14) Amendment Number Two to the Sunbelt/Affiliated Exhibit 10.05 to the Company's
Acquisition Agreement, dated as of December 29, 1989, Quarterly Report on Form 10-Q
between Sunbelt Coca-Cola Bottling Company, Inc., for the quarter ended March 29,
Sunbelt Carolina Acquisition Company, Inc., certain of 1992.
the common stockholders of Coca-Cola Bottling Co.
Affiliated, Inc. and the stockholders of TRNH, Inc.
(10.15) Amendment Number Three to the Sunbelt/Affiliated Exhibit 10.06 to the Company's
Acquisition Agreement, dated as of December 29, 1989, Quarterly Report on Form 10-Q
between Sunbelt Coca-Cola Bottling Company, Inc., for the quarter ended March 29,
Sunbelt Carolina Acquisition Company, Inc., certain of 1992.
the common stockholders of Coca-Cola Bottling Co.
Affiliated, Inc. and the stockholders of TRNH, Inc.
<PAGE>
(10.16) Lease Agreement, dated as of November 30, 1992, between Exhibit 10.38 to the Company's
the Company and Harrison Limited Partnership One, Annual Report on Form 10-K
related to the Snyder Production Center in Charlotte, for the fiscal year ended
North Carolina. January 3, 1993.
(10.17) Termination and Release Agreement dated as of March 27, Exhibit 10.43 to the Company's
1992 by and among Sunbelt Coca-Cola Bottling Company, Annual Report on Form 10-K
Coca-Cola Bottling Co. Affiliated, Inc., the agent for for the fiscal year ended
holders of certain debentures of Sunbelt issued pursuant January 3, 1993.
to a certain Indenture dated as of January 11, 1990, as
amended, and Wilmington Trust Company which acted as
trustee under the Indenture.
(10.18) Reorganization Plan and Agreement by and among Exhibit 10.03 to the Company's
Coca-Cola Bottling Co. Consolidated, Chopper Acquisitions, Quarterly Report on Form 10-Q
Inc., Whirl-i-Bird, Inc. and J. Frank Harrison, Jr. for the quarter ended April 4,
1993.
(10.19) Partnership Agreement of Carolina Coca-Cola Bottling Exhibit 2.01 to the Company's
Partnership,* dated as of July 2, 1993, by and among Current Report on Form 8-K
Carolina Coca-Cola Bottling Investments, Inc., Coca-Cola dated July 2, 1993.
Ventures, Inc., Coca-Cola Bottling Co. Affiliated, Inc.,
Fayetteville Coca-Cola Bottling Company and Palmetto
Bottling Company.
(10.20) Asset Purchase Agreement, dated as of July 2, 1993, by Exhibit 2.02 to the Company's
and among Carolina Coca-Cola Bottling Partnership,* Current Report on Form 8-K
Coca-Cola Bottling Co. Affiliated, Inc. and Coca-Cola dated July 2, 1993.
Bottling Co. Consolidated.
(10.21) Asset Purchase Agreement, dated as of July 2, 1993, by Exhibit 2.03 to the Company's
and among Carolina Coca-Cola Bottling Partnership,* Current Report on Form 8-K
Fayetteville Coca-Cola Bottling Company and Coca-Cola dated July 2, 1993.
Bottling Co. Consolidated.
(10.22) Asset Purchase Agreement, dated as of July 2, 1993, by Exhibit 2.04 to the Company's
and among Carolina Coca-Cola Bottling Partnership,* Current Report on Form 8-K
Palmetto Bottling Company and Coca-Cola Bottling Co. dated July 2, 1993.
Consolidated.
<PAGE>
(10.23) Definition and Adjustment Agreement, dated July 2, 1993, Exhibit 2.05 to the Company's
by and among Carolina Coca-Cola Bottling Partnership,* Current Report on Form 8-K
Coca-Cola Ventures, Inc., Coca-Cola Bottling Co. dated July 2, 1993.
Consolidated, CCBC of Wilmington, Inc., Carolina
Coca-Cola Bottling Investments, Inc., The Coca-Cola
Company, Carolina Coca-Cola Holding Company, The
Coastal Coca-Cola Bottling Company, Eastern Carolina
Coca-Cola Bottling Company, Inc., Coca-Cola Bottling Co.
Affiliated, Inc., Fayetteville Coca-Cola Bottling Company
and Palmetto Bottling Company.
(10.24) Management Agreement, dated as of July 2, 1993, by and Exhibit 10.01 to the Company's
among Coca-Cola Bottling Co. Consolidated, Carolina Current Report on Form 8-K
Coca-Cola Bottling Partnership,* CCBC of Wilmington, dated July 2, 1993.
Inc., Carolina Coca-Cola Bottling Investments, Inc.,
Coca-Cola Ventures, Inc. and Palmetto Bottling Company.
(10.25) Post-Retirement Medical and Life Insurance Benefit Exhibit 10.02 to the Company's
Reimbursement Agreement, dated July 2, 1993, by and Current Report on Form 8-K
between Carolina Coca-Cola Bottling Partnership* and dated July 2, 1993.
Coca-Cola Bottling Co. Consolidated.
(10.26) Aiken Asset Purchase Agreement, dated as of August 6, Exhibit 2.01 to the Company's
1993 by and among Carolina Coca-Cola Bottling Quarterly Report on Form 10-Q
Partnership,* Palmetto Bottling Company and Coca-Cola for the quarter ended July 4,
Bottling Co. Consolidated. 1993.
(10.27) Aiken Definition and Adjustment Agreement, dated as of Exhibit 2.02 to the Company's
August 6, 1993, by and among Carolina Coca-Cola Quarterly Report on Form 10-Q
Bottling Partnership*, Coca-Cola Ventures, Inc., Coca-Cola for the quarter ended July 4,
Bottling Co. Consolidated, Carolina Coca-Cola Bottling 1993.
Investments, Inc., The Coca-Cola Company and Palmetto
Bottling Company.
(10.28) Lease Agreement, dated as of June 1, 1993, between the Exhibit 10.01 to the Company's
Company and Beacon Investment Corporation, related Quarterly Report on Form 10-Q
to the Company's corporate headquarters in Charlotte, for the quarter ended July 4,
North Carolina. 1993.
(10.29) Amended and Restated Guaranty Agreement, dated as of Exhibit 10.06 to the Company's
July 15, 1993 re: Southeastern Container, Inc. Quarterly Report on Form 10-Q
for the quarter ended July 4,
1993.
<PAGE>
(10.30) Agreement, dated as of December 23, 1993, between Exhibit 10.1 to the Company's
the Company and Western Container Corporation Quarterly Report on Form 10-Q
covering purchase of PET bottles. for the quarter ended
October 2, 1994.
(10.31) Management Agreement, dated as of June 1, 1994, by Exhibit 10.6 to the Company's
and among Coca-Cola Bottling Co. Consolidated and Quarterly Report on Form 10-Q
South Atlantic Canners, Inc. for the quarter ended July 3,
1994.
(10.32) Guaranty Agreement, dated as of July 22, 1994, between Exhibit 10.7 to the Company's
Coca-Cola Bottling Co. Consolidated and Wachovia Quarterly Report on Form 10-Q
Bank of North Carolina, N.A. for the quarter ended July 3, 1994.
(10.33) Selling Agency Agreement, dated as of March 3, 1995, Exhibit 10.83 to the Company's
between the Company, Salomon Brothers Inc. and Annual Report on Form 10-K
Citicorp Securities, Inc. for the fiscal year ended
January 1, 1995.
(10.34) Agreement, dated as of March 1, 1994, between the Exhibit 10.85 to the Company's
Company and South Atlantic Canners, Inc. Annual Report on Form 10-K
for the fiscal year ended
January 1, 1995.
(10.35) Stock Option Agreement, dated as of March 8, 1989, Exhibit 10.86 to the Company's
of J. Frank Harrison, Jr. Annual Report on Form 10-K
for the fiscal year ended
January 1, 1995.
(10.36) Stock Option Agreement, dated as of August 9, 1989, Exhibit 10.87 to the Company's
of J. Frank Harrison, III. Annual Report on Form 10-K for
the fiscal year ended January 1,
1995.
(10.37) First Amendment to Credit Agreement, Line of Credit Exhibit 10.8 to the Company's
Note and Mortgage, and Reaffirmation of Term Note, Quarterly Report on Form 10-Q
Security Agreement, Guaranty Agreement and Addendum for the quarter ended April 2,
to Guaranty Agreement, dated as of March 31, 1995, by 1995.
and among the Company, South Atlantic Canners, Inc.
and Wachovia Bank of North Carolina, N.A.
(10.38) Guaranty Agreement and Addendum, dated as of March 31, Exhibit 10.9 to the Company's
1995, between the Company and Wachovia Bank of North Quarterly Report on Form 10-Q
Carolina, N.A. for the quarter ended April 2,
1995.
<PAGE>
(10.39) Can Supply Agreement, dated November 7, 1995, between Exhibit 10.16 to the Company's
the Company and American National Can Company. Quarterly Report on Form 10-Q
for the quarter ended October 1,
1995.
(10.40) Lease Agreement, dated as of July 17, 1988, between the Exhibit 19.4 to the Company's
Company and GE Capital Fleet Services covering Quarterly Report on Form 10-Q
various vehicles. for the quarter ended March 31,
1990.
(10.41) Master Motor Vehicle Lease Agreement, dated as of Exhibit 19.5 to the Company's
December 15, 1988, between the Company and Quarterly Report on Form 10-Q
Citicorp North America, Inc. covering various vehicles. for the quarter ended March 31,
1990.
(10.42) Master Lease Agreement, beginning on April 12, 1989, Exhibit 19.6 to the Company's
between the Company and Citicorp North America, Quarterly Report on Form 10-Q
Inc. covering various equipment. for the quarter ended March 31,
1990.
(10.43) Master Lease Agreement, dated as of January 7, 1992 Exhibit 10.01 to the Company's
between the Company and Signet Leasing and Financial Quarterly Report on Form 10-Q
Corporation covering various vehicles. for the quarter ended March 29,
1992.
(10.44) Master Equipment Lease, dated as of February 9, 1993, Exhibit 10.37 to the Company's
between the Company and Coca-Cola Financial Annual Report on Form 10-K
Corporation covering various vending machines. for the fiscal year ended
January 3, 1993.
(10.45) Motor Vehicle Lease Agreement No. 790855, dated as of Exhibit 10.39 to the Company's
December 31, 1992, between the Company and Citicorp Annual Report on Form 10-K
Leasing, Inc. covering various vehicles. for the fiscal year ended
January 3, 1993.
(10.46) Master Lease Agreement, dated as of February 18, 1992, Exhibit 10.69 to the Company's
between the Company and Citicorp Leasing, Inc. Annual Report on Form 10-K
covering various equipment. for the fiscal year ended
January 2, 1994.
(10.47) Lease Agreement dated as of December 15, 1994 between Exhibit 10.1 to the Company's
the Company and BA Leasing & Capital Corporation. Quarterly Report on Form 10-Q
for the quarter ended April 2,
1995.
<PAGE>
(10.48) Beverage Can and End Agreement dated November 9, 1995 Exhibit included in this filing.
between the Company and Ball Metal Beverage Container
Group.
(10.49) Member Purchase Agreement, dated as of August 1, Exhibit included in this filing.
1994 between the Company and South Atlantic
Canners, Inc., regarding minimum annual purchase
requirements of canned product by the Company.
(10.50) Member Purchase Agreement, dated as of August 1, 1994 Exhibit included in this filing.
between the Company and South Atlantic Canners, Inc.,
regarding minimum annual purchase requirements of
20 ounce PET product by the Company.
(10.51) Member Purchase Agreement, dated as of August 1, 1994 Exhibit included in this filing.
between the Company and South Atlantic Canners, Inc.,
regarding minimum annual purchase requirements of 2 Liter
PET product by the Company.
(10.52) Member Purchase Agreement, dated as of August 1, 1994 Exhibit included in this filing.
between the Company and South Atlantic Canners, Inc.,
regarding minimum annual purchase requirements of 3 Liter
PET product by the Company.
(10.53) Description of the Company's 1996 Bonus Plan for officers. Exhibit included in this filing.
(21.1) List of subsidiaries. Exhibit included in this filing.
(23.1) Consent of Independent Accountants to Incorporation by Exhibit included in this filing.
Reference into Form S-3 (Registration No. 33-4325) and
Form S-3 (Registration No. 33-54657).
(27.1) Financial data schedule for period ended December 31, Exhibit included in this filing.
1995.
(99.1) Audited Financial Statements of Piedmont Coca-Cola Included as Item 14D of Part IV
Bottling Partnership for the 1994 and 1993 fiscal periods. to the Company's Annual Report
on Form 10-K for the fiscal year
ended January 1, 1995.
(99.2) Information, financial statements and exhibits required To be supplied by amendment.
by Form 11-K with respect to the Coca-Cola Bottling Co.
Consolidated Savings Plan.
</TABLE>
* Carolina Coca-Cola Bottling Partnership's name was changed to Piedmont
Coca-Cola Bottling Partnership.
<PAGE>
B. Reports on Form 8-K.
There were no Current Reports on Form 8-K filed by the Company during
the fourth quarter of 1995.
40
<PAGE>
SCHEDULE II
COCA-COLA BOTTLING CO. CONSOLIDATED
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
(IN THOUSANDS)
<TABLE>
<CAPTION>
ADDITIONS
BALANCE AT CHARGED TO
BEGINNING COSTS AND BALANCE AT
DESCRIPTION OF YEAR EXPENSES OTHER (1) DEDUCTIONS END OF YEAR
<S> <C> <C> <C> <C> <C>
Allowance for doubtful accounts:
Fiscal year ended December 31, 1995.................... $ 400 $319 $ 313 $ 406
Fiscal year ended January 1, 1995...................... $ 425 $600 $ 625 $ 400
Fiscal year ended January 2, 1994...................... $ 400 $443 $ (20) $ 398 $ 425
Deferred tax assets valuation allowance:
Fiscal year ended January 2, 1994...................... $ 29,934 $ (26,718) $3,216 $ 0
</TABLE>
(1) Arising from business combinations and divestitures.
41
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) 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: March 27, 1996
By: /s/ JAMES L. MOORE, JR.
JAMES L. MOORE, JR.
PRESIDENT AND CHIEF OPERATING OFFICER
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
By: /s/ J. FRANK HARRISON, JR. Chairman of the Board and Director March 27, 1996
J. FRANK HARRISON, JR.
By: /s/ J. FRANK HARRISON, III Vice Chairman of the Board, Chief Executive March 27, 1996
Officer and Director
J. FRANK HARRISON, III
By: /s/ JAMES L. MOORE, JR. President and Chief Operating Officer and March 27, 1996
Director
JAMES L. MOORE, JR.
By: /s/ REID M. HENSON Vice Chairman of the Board and Director March 27, 1996
REID M. HENSON
By: /s/ H. W. MCKAY BELK Director March 27, 1996
H. W. MCKAY BELK
By: /s/ JOHN M. BELK Director March 27, 1996
JOHN M. BELK
By: /s/ H. REID JONES Director March 27, 1996
H. REID JONES
By: /s/ DAVID L. KENNEDY, JR. Director March 27, 1996
DAVID L. KENNEDY, JR.
By: /s/ NED R. MCWHERTER Director March 27, 1996
NED R. MCWHERTER
By: /s/ JOHN W. MURREY, III Director March 27, 1996
JOHN W. MURREY, III
By: /s/ DAVID V. SINGER Vice President and Chief Financial Officer March 27, 1996
DAVID V. SINGER
By: /s/ STEVEN D. WESTPHAL Vice President and Chief Accounting Officer March 27, 1996
STEVEN D. WESTPHAL
</TABLE>
42
<PAGE>
EXECUTION COPY
EXHIBIT 4.13
<PAGE>
***********************************************************
COCA-COLA BOTTLING CO. CONSOLIDATED
as Borrower
-----------
LOAN AGREEMENT
Dated as of November 20, 1995
-----------
The financial institutions identified herein
as Banks
and
LTCB TRUST COMPANY
as Agent
**********************************************************
-5-
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
Section 1. Definitions and Accounting Matters............................................................1
1.01 Certain Defined Terms.........................................................................1
1.02 Certain Definitions Relating to Trigger Events...............................................10
1.03 Accounting Terms.............................................................................14
1.04 Compliance Certificates and Opinions.........................................................14
Section 2. Commitments and Loans................................................................................15
2.01 Commitments..................................................................................15
2.02 Borrowings...................................................................................15
2.03 Fees.........................................................................................16
2.04 Lending Offices..............................................................................16
2.05 Loan Accounts................................................................................16
2.06 Notes........................................................................................16
2.07 Several Obligations and Remedies.............................................................17
Section 3. Payments of Principal and Interest...........................................................17
3.01 Repayment of Loans...........................................................................17
3.02 Interest.....................................................................................17
3.03 Prepayments of the Loans.....................................................................18
3.04 Limitation on Interest.......................................................................19
Section 4. Payments and Computations....................................................................19
4.01 Payments.....................................................................................19
4.02 Computations.................................................................................20
4.04 Sharing of Payments..........................................................................20
Section 5. Yield Protection and Illegality..............................................................21
5.01 Additional Costs.............................................................................21
5.02 Changes in Circumstances.....................................................................22
5.03 Illegality...................................................................................23
5.04 Compensation.................................................................................23
5.05 Taxes........................................................................................24
5.06 Prepayments..................................................................................25
Section 6. Conditions Precedent.........................................................................25
6.01 Conditions Precedent to the Initial Borrowing................................................25
6.02 Each Borrowing...............................................................................26
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Page
Section 7. Representations and Warranties...............................................................26
7.01 Corporate Existence..........................................................................26
7.02 Financial Condition..........................................................................27
7.03 Litigation...................................................................................27
7.04 No Breach....................................................................................27
7.05 Corporate Action.............................................................................28
7.06 Approvals....................................................................................28
7.07 Use of Loans.................................................................................28
7.08 ERISA........................................................................................28
7.09 Taxes........................................................................................28
7.10 Ownership....................................................................................29
7.11 Ranking......................................................................................29
7.12 Investment Company Act.......................................................................29
7.13 Public Utility Holding Company Act...........................................................29
7.14 Compliance with Laws.........................................................................29
7.15 Voting Agreement.............................................................................29
7.16 Ownership of Property; Licenses. ...........................................................30
7.17 Nature of Business...........................................................................30
7.18 Bottle Contracts and Allied Bottle Contracts.................................................30
7.19 Debt Instruments.............................................................................30
Section 8. Covenants of the Company.....................................................................30
8.01 Financial Statements.........................................................................31
8.02 Corporate Existence, Etc.....................................................................32
8.03 Use of Proceeds..............................................................................33
8.04 Mergers and Consolidations...................................................................33
8.05 Restrictions on Debt.........................................................................34
8.06 Restrictions on Sales and Leasebacks.........................................................35
8.07 Ranking......................................................................................37
8.08 Business.....................................................................................37
8.09 New Revolving Credit Agreement...............................................................37
Section 9. Events of Default............................................................................37
Section 10. The Agent....................................................................................40
10.01 Appointment, Powers and Immunities...........................................................40
10.02 Reliance by Agent............................................................................41
10.03 Defaults.....................................................................................41
10.04 Rights as a Bank.............................................................................41
10.05 Indemnification..............................................................................41
10.06 Non-Reliance on Agent and other Banks........................................................42
10.07 Failure to Act...............................................................................42
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Page
10.08 Resignation or Removal of Agent..............................................................42
10.09 Agent's Office...............................................................................43
Section 11. Miscellaneous................................................................................43
11.01 Waiver.......................................................................................43
11.02 Notices......................................................................................43
11.03 Expenses.....................................................................................43
11.04 Amendments...................................................................................44
11.05 Successors and Assigns.......................................................................44
11.06 Assignments and Participations...............................................................44
11.07 Survival.....................................................................................45
11.08 Captions.....................................................................................46
11.09 Counterparts.................................................................................46
11.10 GOVERNING LAW................................................................................46
11.11 JURISDICTION AND SERVICE OF PROCESS..........................................................46
11.12 Severability.................................................................................47
11.13 Waiver of Stay or Extension Law..............................................................47
Schedule 1 Principal Subsidiaries
Schedule 2 Litigation
Schedule 3 Employee Disputes
Schedule 4 Ownership
Schedule 5 Bottle Contracts and Allied Bottle Contracts
Schedule 6 Debt Instruments
Exhibit A Form of Note
Exhibit B Form of Opinion of Company's Counsel
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<PAGE>
LOAN AGREEMENT, dated as of November 20, 1995, among COCA-COLA
BOTTLING CO. CONSOLIDATED, a corporation duly organized and validly existing
under the laws of the State of Delaware (the "Company"); the financial
institutions named herein as lenders (the "Banks"); and LTCB TRUST COMPANY, a
trust company organized under the laws of the State of New York, as agent on
behalf of the Banks (in such capacity, the "Agent").
WHEREAS, the Company has requested the Banks to make term
loans to the Company in an aggregate principal amount up to but not exceeding
$170,000,000 for the purpose of refinancing certain existing indebtedness of the
Company and for other general corporate purposes of the Company;
WHEREAS, the Banks are willing to make such loans to the
Company on the terms and conditions of this Agreement; and
WHEREAS, the Agent has been requested to act as agent for the
Banks, and the Agent is willing to act as such agent on the terms and conditions
of this Agreement,
NOW THEREFORE, in consideration of the premises and mutual
covenants contained herein, the parties hereto hereby agree as follows:
Section 1. Definitions and Accounting Matters.
1.01 Certain Defined Terms. As used herein, the following
terms shall have the following meanings (all terms defined in this Section 1 or
in other provisions of this Agreement in the singular shall have the same
meanings when used in the plural and vice versa):
"Affiliate" shall mean, as to any Person, any Subsidiary of
such Person and any other Person which, directly or indirectly, controls, is
controlled by, or is under direct or indirect common control with, such Person.
For purposes of this definition "control" of a Person means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have corresponding meanings.
"Allied Bottle Contracts" shall mean, collectively, any
contract between the Company or any of its Subsidiaries and The Coca-Cola
Company providing for the Company or such Subsidiary to purchase its
requirements of concentrates and syrups for Allied Products from The Coca-Cola
Company and/or granting to the Company or such Subsidiary exclusive distribution
rights with respect to Allied Products in the Company's or such Subsidiary's res
pective territories, in each case as amended or supplemented from time to time.
"Allied Products" shall mean all products of The Coca-Cola
Company, other than Coca-Cola Trademark Beverages.
<PAGE>
"Applicable Lending Office" shall mean, for any Bank, the
Lending Office of such Bank (or of an affiliate of such Bank) designated on the
signature pages hereof or such other office or offices of such Bank (or of an
affiliate of such Bank) as such Bank may from time to time specify to the
Company and the Agent in writing as the office or offices at which all or a
portion of its Loan is to be made and maintained .
"Applicable Margin" shall mean 0.45%; provided that, at any
time when the Senior Debt Rating of the Company with S&P shall be below BBB- and
the Senior Debt Rating of the Company with Moody's shall be below Baa3 (or at
any time when neither S&P nor Moody's has a Senior Debt Rating for the Company),
the Applicable Margin shall be 0.55% (such change in the Applicable Margin shall
not prejudice any rights that the Agent or any Bank may have with respect to any
Trigger Event that may occur in connection with such rating)
"Attributable Debt" shall mean, as to any particular lease
under which any Person is at the time liable, at any date as of which the amount
thereof is to be determined, the total net amount of rent required to be paid by
such Person under such lease during the remaining primary term thereof,
discounted from the respective due date thereof to such date at a rate per annum
equal to the weighted average interest rate applicable to the Loans. The
weighted average interest rate applicable to the Loans shall be calculated at
any time by dividing the aggregate of the annual interest payments required on
the Loans (calculated as if the interest rate on the Loans then in effect were
to be applied to a year of 365 days) by the aggregate principal amount of the
Loans outstanding on such date. The net amount of rent required to be paid under
any such lease for any such period shall be the amount of the rent payable by
the lessee with respect to such period, after excluding amounts required to be
paid on account of maintenance and repairs, insurance, taxes, assessments, water
rates and similar charges. In the case of any lease which is terminable by the
lessee upon the payment of a penalty, such net amount shall also include the
amount of such penalty, but no rent shall be considered as required to be paid
under such lease subsequent to the first date upon which it may be so
terminated.
"Board of Directors" shall mean either the board of directors
of the Company or any duly authorized committee of the board.
"Board Resolution" shall mean a copy of a resolution certified
by the Secretary or an Assistant Secretary of the Company to have been duly
adopted by the Board of Directors and to be in full force and effect on the date
of such certification, and delivered to the Agent and the Banks.
"Bottle Contracts" shall mean, collectively, any contract
between the Company or any of its Subsidiaries and The Coca-Cola Company
providing for the Company or such Subsidiary to purchase its requirements of
concentrates and syrups for Coca-Cola Trademark Beverages from The Coca-Cola
Company and/or granting to the Company or such Subsidiary exclusive distribution
rights with respect to Coca-Cola Trademark Beverages in the Company's or such
Subsidiary's respective territories, in each case as amended or supplemented
from time to time.
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<PAGE>
"Business Day" shall mean any day (but not a Saturday or
Sunday) on which commercial banks are not authorized or required to close in New
York City, and which is also a day on which dealings in Dollar deposits are
carried out in the London interbank market.
"Capital Stock", as applied to the stock of any corporation,
shall mean the capital stock of every class whether now or hereafter authorized,
regardless of whether such capital stock shall be limited to a fixed sum or
percentage with respect to the rights of the holders thereof to participate in
dividends and in the distribution of assets upon the voluntary or involuntary
liquidation, dissolution or winding up of such corporation.
"Coca-Cola Trademark Beverages" shall mean all products
identified as such in the Company's Form 10-K filed with the SEC for the fiscal
year of the Company ended January 1, 1995 or in any other Form 10-K filed for
any subsequent fiscal year, and any other beverage products produced or marketed
by The Coca-Cola Company.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Commitment" shall mean, with respect to each Bank, the
obligation of such Bank to make a Loan to the Company on each borrowing date
pursuant to Section 2.01 hereof, all such Loans to be in an aggregate principal
amount up to but not exceeding the amount set forth opposite such Bank's name on
the signature pages hereof, on the terms and conditions of this Agreement.
"Commitment Termination Date" shall mean December 29, 1995.
"Common Stock" shall mean any and all Capital Stock of the
Company that is not Preferred Stock, being on the date hereof designated "Common
Stock", "Class B Common Stock" and "Class C Common Stock".
"Consolidated Net Tangible Assets" shall mean the aggregate
amount of assets of the Company and its consolidated Subsidiaries (less
applicable reserves and other properly deductible items) after deducting
therefrom (i) all current liabilities, and (ii) all goodwill, trade names,
trademarks, patents, unamortized debt discount and expense and other like
intangibles, all as set forth on the most recent balance sheet of the Company
and its consolidated Subsidiaries and computed in accordance with generally
accepted accounting principles. For purposes of this definition, any leasehold
interest of the Company or any Restricted Subsidiary shall be deemed to be a
tangible asset if the rental obligations thereunder are included in Funded Debt.
"Corporation" includes corporations, associations, companies
and business trusts.
"Debt" shall mean, with respect to any Person, all
indebtedness and other obligations of such Person of the type described in
clauses (a) and (b) of the definition of "Indebtedness" in this Section 1.01,
and all Guarantees and Hypothecations of such Person in respect of such
indebtedness and other obligations.
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<PAGE>
"Default" shall mean an Event of Default or an event which
with notice or lapse of time or both would become an Event of Default.
"Designated Event" shall have the meaning assigned to that
term in Section 1.02 hereof.
"Dollars" and "$" shall mean lawful money of the United States
of America.
"Environmental Laws" shall mean all Governmental Requirements
relating to health, safety, industrial hygiene, pollution or environmental
matters, including Governmental Requirements relating to emissions, discharges,
releases, or threatened releases of pollutants, contaminants, chemicals or
industrial, toxic or hazardous substances or wastes into the environment
(including, without limitation, air, surface water, ground water or land), or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of pollutants, contaminants, chemicals
or industrial, toxic or hazardous substances (including, without limitation,
asbestos) or wastes.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time.
"ERISA Affiliate" shall mean any corporation or trade or
business which is a member of the same controlled group of corporations (within
the meaning of Section 414(b) of the Code) as the Company or is under common
control (within the meaning of Section 414(c) of the Code) with the Company.
"Event of Default" shall have the meaning assigned to that
term in Section 9 hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Existing Term Loan Agreements" shall mean, collectively, (i)
the Loan Agreement, dated as of June 28, 1990, among the Company, the financial
institutions named therein as "Banks", and LTCB Trust Company, as agent on
behalf of such banks, as heretofore amended, and (ii) the Loan Agreement, dated
as of February 20, 1992, among the Company, the financial institutions named
therein as "Banks", LTCB Trust Company, as agent on behalf of such banks, and
Trust Company Bank, as lead manager, as heretofore amended.
"FDA" shall mean the United States Food and Drug
Administration, and any successor thereto.
"Funded Debt" shall mean (i) all Debt having a maturity of
more than 12 months from the date as of which the amount thereof is to be
determined or having a maturity of 12 months or less but by its terms being
renewable or extendable beyond 12 months from such date at the option of the
borrower, and (ii) all rental obligations payable more than 12 months from such
date under Capital Leases (such rental obligations to be included as Funded Debt
as the
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<PAGE>
amount so capitalized and to be included for the purposes of the definition of
Consolidated Net Tangible Assets both as an asset and as Funded Debt at the
amount so capitalized).
"Governmental Authority" shall mean (a) the government of any
federal, state, municipal or other political subdivision in which property of
the Company or any of its Sub sidiaries is located and (b) any other government
exercising jurisdiction over the Company or any of its Subsidiaries, including
all agencies and instrumentalities of such government.
"Governmental Requirements" shall mean laws, ordinances,
statutes, codes, rules, regulations, orders, decrees and judgments of any
Governmental Authority.
"Health Laws" shall mean all Governmental Requirements,
whether promulgated by the FDA, any state agency charged with the supervision of
public health or related matters or otherwise, in any way relating to the
production, marketing or distribution of beverages (including, without
limitation, any thereof relating to labeling of containers).
"Indebtedness" shall mean, with respect to any Person (but
without duplication):
(a) all indebtedness and other obligations of such Person for
borrowed money or for the deferred purchase price of property or
services, and without duplication, all obligations of such Person
evidenced by bonds, debentures, promissory notes or other similar
evidences of indebtedness;
(b) all indebtedness and other obligations of such Person
arising under interest rate and currency swaps and other similar
hedging arrangements, or under acceptance facilities, and the full
stated amount of all letters of credit issued for account of such
Person and, without duplication, all drafts drawn thereunder, and all
obligations of such Person arising in respect of the sale by such
Person, with or without recourse, or discount of any notes or accounts
receivable of such Person;
(c) all obligations of such Person under leases or other
contractual arrange ments which have been, or should be, recorded as
capital leases in accordance with generally accepted accounting
principles (collectively, "Capital Leases");
(d) all obligations of such Person under direct or indirect
guarantees (includ ing, without limitation, agreements to "keep well")
in respect of, and obligations, contin gent or otherwise, to purchase
or acquire or otherwise to assure a creditor against loss in respect
of, indebtedness or obligations of others of the kinds referred to
above in clause (a), (b) or (c)(collectively, "Guarantees"); and
(e) all indebtedness and other obligations referred to above
in clauses (a), (b), (c) or (d) secured by (or for which the holder of
such indebtedness or other obligation has a right, contingent or
otherwise, to be secured by) any Mortgage upon or in property
(including, without limitation, contract rights and accounts
receivable) owned by such Person even though such Person has not
assumed or become liable beyond the value of
-5-
<PAGE>
the property pledged for the payment of such indebtedness or other
obligation (collectively, "Hypothecations").
"Interest Period" shall mean, with respect to each Loan, each
successive period commencing on the date on which such Loan is made or (in the
case of Interest Periods for such Loan after the initial Interest Period
therefor) the last day of the next preceding Interest Period for such Loan and
ending on the numerically corresponding day in the first, second, third or sixth
calendar month thereafter, as the Company may select as provided in Section
3.02(d) hereof, except that each Interest Period which commences on the last
Business Day of a calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent calendar month)
shall end on the last Business Day of the appropriate subsequent calendar month.
Notwithstanding the foregoing: (i) each Interest Period which would otherwise
end on a day which is not a Business Day shall end on the next succeeding
Business Day, unless such next succeeding Business Day falls in a subsequent
calendar month, in which case such Interest Period shall end on the next
preceding Business Day; and (ii) each Interest Period which would otherwise
commence before and end after the Interim Maturity Date or the Maturity Date
shall end on the Interim Maturity Date or the Maturity Date, as the case may be.
"Interim Maturity Date" shall mean November 20, 2002; provided
that if such date is not a Business Day, the Interim Maturity Date shall be the
next succeeding Business Day, unless such next succeeding Business Days falls in
a subsequent calendar month, in which case the Interim Maturity Date shall be
the next preceding Business Day.
"LIBOR" shall mean, for any Interest Period, the rate per
annum, as determined by the Agent (rounded upwards, if necessary, to the nearest
1/16 of 1%) to be the arithmetic mean of the interest rates per annum quoted by
each of the Reference Banks at approximately 11:00 a.m. London time (or as soon
thereafter as practicable) two Business Days prior to the first day of such
Interest Period for the offering by such Reference Bank to leading banks in the
London interbank market of Dollar deposits having a term comparable to such
Interest Period and in an amount comparable to the principal amount of the Loan
of such Reference Bank scheduled to be outstanding for such Interest Period;
provided that if any Reference Bank is not scheduled to have a Loan outstanding
for such Interest Period, the LIBOR for such Interest Period shall be determined
by such Reference Bank by reference to such principal amount as the Agent shall
determine. If any Reference Bank does not timely furnish information for
determination of the LIBOR for any Interest Period, the Agent shall determine
the LIBOR for such Interest Period on the basis of information timely furnished
by the remaining Reference Bank or Reference Banks.
"Loan(s)" shall mean the loans provided for by Section 2.01
hereof.
"Loan Documents" shall mean this Agreement, the Notes and the
fee letter dated November 20, 1995 between the Agent and the Company.
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<PAGE>
"LTCB" shall mean The Long-Term Credit Bank of Japan, Limited;
provided that for purposes of Section 10.04 hereof, "LTCB" shall mean each of
The Long-Term Credit Bank of Japan, Limited and LTCB Trust Company.
"Maturity Date" shall mean November 20, 2003; provided that if
such date is not a Business Day, the Maturity Date shall be the next succeeding
Business Day, unless such next succeeding Business Days falls in a subsequent
calendar month, in which case the Maturity Date shall be the next preceding
Business Day.
"Mortgage" shall mean, with respect to any asset, revenue or
other property, any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind in respect of such asset, revenue or other property, and
any other arrangement having the practical effect of any of the foregoing.
"Multiemployer Plan" shall mean a Plan defined as such in
Section 3(37) of ERISA to which contributions have been made by the Company or
any ERISA Affiliate and which is covered by Title IV of ERISA.
"NationsBank Revolving Credit Agreement" shall mean the
Revolving Credit Agreement dated as of March 17, 1992 among the Company, the
financial institutions identified therein as lenders, and NationsBank N.A., as
agent for such lenders, as such agreement may be amended, supplemented,
extended, restated, replaced or refinanced (by a New Revolving Credit Agreement)
from time to time.
"New Revolving Credit Agreement" shall mean a revolving credit
agreement dated after the date hereof among the Company and the banks named
therein, which replaces or refinances the NationsBank Revolving Credit
Agreement, as such credit agreement may be amended, supplemented, extended,
restated, replaced or refinanced from time to time.
"Note(s)" shall mean the promissory notes provided for by
Section 2.06 hereof to further evidence the Loans and, collectively, any
promissory note or notes issued in substitution therefor.
"Officers' Certificate" shall mean a certificate addressed to
the Agent and the Banks signed by the Chairman of the Board, a Vice Chairman,
the President or a Vice President, and by the Treasurer, an Assistant Treasurer,
the Controller, an Assistant Controller, the Secre tary or an Assistant
Secretary, of the Company, and delivered to the Agent and the Banks.
"Opinion of Counsel" shall mean a written opinion addressed to
the Agent and the Banks of counsel, who may (except as otherwise provided in
this Agreement) be counsel for, or an employee of, the Company, and who shall be
acceptable to the Agent.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or
any entity succeeding to any or all of its functions under ERISA.
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<PAGE>
"Person" shall mean an individual, a corporation, a company, a
voluntary associa tion, a partnership, a trust, an unincorporated organization
or a government or any agency, instrumentality or political subdivision thereof.
"Plan" shall mean an employee benefit or other plan
established or maintained by the Company or any ERISA Affiliate and which is
covered by Title IV of ERISA, other than a Multiemployer Plan.
"Post-Default Rate" shall mean, in respect of any principal of
any Loan or any interest thereon under this Agreement or the Notes which is not
paid when due (whether at stated maturity, by acceleration or otherwise), a rate
per annum during the period commencing on the due date to but excluding the date
on which such amount is paid in full equal to 2% above the Prime Rate as in
effect from time to time; provided that, if such amount in default is principal
of a Loan and the due date is a day other than the last day of an Interest
Period therefor, the "Post-Default Rate" for such principal shall be, for the
period commencing on the due date and ending on the last day of the then current
Interest Period therefor, 2% above the interest rate for such Loan as provided
in Section 3.02(a) hereof and, thereafter, the rate provided for above in this
definition.
"Preferred Stock", as applied to the Capital Stock of any
corporation, shall mean Capital Stock ranking prior to the shares of any other
class of Capital Stock of said corporation as to the payment of dividends or the
distribution of assets on any voluntary or involuntary liquidation.
"Prime Rate" shall mean the rate of interest from time to time
announced by LTCB at its New York Branch as its prime commercial lending rate
for extensions of credit in Dollars, which rate is not necessarily the lowest
rate of interest charged by LTCB. Each change in any interest rate provided for
herein or in the Notes based upon the Prime Rate resulting from a change in the
Prime Rate shall take effect at the time of such change in the Prime Rate.
"Principal Property" shall mean any building, structure or
other facility, together with the land upon which it is erected and fixtures
comprising a part thereof, used primarily for the bottling, canning or packaging
of soft drinks or soft drink products or warehousing and distributing of such
products, owned or leased by the Company or any Subsidiary of the Com pany, the
gross book value (without deduction of any depreciation reserves) of which on
the date as of which the determination is being made exceeds 3% of Consolidated
Net Tangible Assets, other than any such building, structure or other facility
or portion thereof which, in the reasonable opinion of the Board of Directors of
the Company, is not of material importance to the total business conducted by
the Company and its Subsidiaries as an entirety.
"Reference Banks" shall mean the principal London offices of
LTCB, Societe Generale and Credit Lyonnais.
-8-
<PAGE>
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System (or any successor), as the same may be
amended or supplemented from time to time.
"Regulatory Change" shall mean (i) any change after the date
of this Agreement in Japanese, United States Federal or state, or foreign law or
regulations (including, without limitation, Regulation D) or (ii) the adoption
or making after such date of any interpretations, directives or requests
applying to a class of banks including LTCB or any of the Banks, of or under any
Japanese, United States Federal or state, or foreign law or regulations (whether
or not having the force of law) by any court or governmental or monetary
authority charged with the interpretation or administration thereof.
"Required Banks" shall mean, at any time, Banks then holding
more than 50% of the aggregate outstanding principal amount of the Loans, or if
no Loans are then outstanding, which hold more than 50% of the aggregate amount
of the Commitments, or if no Loans or Commitments are then outstanding, which
held more than 50% of the Loans immediately prior to the payment thereof in
full.
"Restricted Subsidiary" shall mean a Subsidiary of the Company
which (i) owns a Principal Property as of the date hereof, or (ii) acquires a
Principal Property after the date hereof from the Company or a Restricted
Subsidiary other than for cash equal to such property's fair market value as
determined by the Board of Directors of the Company, or (iii) acquires a
Principal Property after the date hereof by purchase with funds substantially
all of which are provided by the Company or a Restricted Subsidiary or with the
proceeds of indebtedness for money borrowed, which indebtedness is guaranteed in
whole or in part by the Company or a Restricted Subsidiary, or (iv) is a party
to any contract with respect to the bottling, canning, packaging or distribution
of soft drinks or soft drink products, other than any such contract which in the
reasonable opinion of the Board of Directors of the Company is not of material
importance to the total business conducted by the Company and its Subsidiaries
as an entirety, and in any event includes each of the Subsidiaries listed in
Schedule 1 as of the date hereof.
"SEC" shall mean the Securities and Exchange Commission, or
any successor thereto.
"Senior Debt Rating" shall mean the rating assigned by S&P or
Moody's, as the case may be, to the Company's senior medium-term debt
obligations.
"Subsidiary" shall mean any corporation, partnership or other
Person of which at least a majority of the outstanding Voting Shares is at the
time directly or indirectly owned or controlled by the Company or one or more of
the Subsidiaries or by the Company and one or more of the Subsidiaries.
"Trigger Event" shall mean the occurrence and continuance of
any Designated Event and, at any time when any securities of the Company that
are rated by either Rating Agency are outstanding, a Rating Decline also has
occurred and is continuing.
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"Voting Shares" shall mean Capital Stock of the class or
classes having general voting power under ordinary circumstances for the
election of the board of directors, managers or trustees of a corporation
(irrespective of whether at the time stock of any other class or classes shall
have or might have voting power by reason of the happening of any contingency).
1.02 Certain Definitions Relating to Trigger Events.
"Designated Event" shall mean any of the following:
(i) a "person" or "group" (within the meaning of
Sections 13(d) and 14(d)(2) of the Exchange Act) other than a Permitted
Holder (as defined below) becoming the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act) of Voting Shares (as defined
below in this definition) of the Company entitled to exercise more than
25% (or, in the case of any person or group consisting solely of one or
more Company Employee Benefit Plans (as defined below), 35%) of the
total voting power of all outstanding Voting Shares of the Company
(calculated in accordance with Rule 13d-3 under the Exchange Act); or
(ii) a change in the Board of Directors of the Company
in which the individuals who constituted the Board of Directors of the
Company at the beginning of the two-year period immediately preceding
such change (together with any other director whose election by the
Board of Directors of the Company or whose nomination for election by
the shareholders of the Company was approved by a vote of at least
two-thirds of the directors then in office who either were directors at
the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute
a majority of the directors then in office; or
(iii) any consolidation of the Company with, or merger
of the Company into, any other person, any merger of another Person
into the Company, or any sale, lease, conveyance or transfer of all or
substantially all of the assets of the Company to another Person (other
than (x) a merger which does not result in any reclassification,
conversion, exchange or cancellation of outstanding shares of Common
Stock of the Company, or (y) a merger which is effected solely to
change the jurisdiction of incorporation of the Company); or
(iv) the purchase or other acquisition by the Company
or any Subsidiary of the Company, directly or indirectly, of beneficial
ownership of its Voting Shares if the Voting Shares of the Company
acquired in such acquisition and all other such acquisitions effected
after the date of the making of the Loans under this Agreement and
within the 12-month period ending on the date of such acquisition were
entitled to exercise in the aggregate more than 30% of the total voting
power of all Voting Shares outstanding on the day before the first such
acquisition during such period (taking into account any stock split,
stock dividend or similar transaction effected during such period and
calculating the voting power of Voting Shares so acquired based on the
voting power thereof immediately before being so acquired); or
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(v) either (x) the distribution by the Company,
directly or indirectly, of cash, securities or other property in
respect of its Common Stock (other than a distribution paid solely in
its Common Stock or rights to acquire its Common Stock), or (y) the
purchase or other acquisition by the Company or any Subsidiary of the
Company, directly or indirectly, of any Common Stock of the Company
(other than an acquisition of Common Stock of the Company (1) by the
Company from any wholly-owned Subsidiary of the Company, (2) by any
wholly-owned Subsidiary of the Company from the Company or another
wholly-owned Subsidiary of the Company or (3) solely in exchange for or
upon conversion of Common Stock of the Company), if the sum of the
Applicable Equity Percentages (as defined below) for such distribution
or acquisition and all other such distributions and acquisitions
effected after the date of the making of the Loans under this Agreement
and during the 12-month period ending on the date on which such
distribution or acquisition is effected exceeds 30%.
For purposes of this definition: "Applicable Equity
Percentage" shall mean, for any distribution or acquisition, the percentage
equal to (x) the Fair Market Value (as defined below) on the Valuation Date (as
defined below) of the cash, securities and other property distributed in respect
of, or paid or otherwise exchanged to acquire, Common Stock of the Company in
such distribution or acquisition divided by (y) the Fair Market Value on the
Reference Date (as defined below) of the Common Stock of the Company outstanding
on such Reference Date; "Valuation Date" shall mean (x) for any distribution,
the record date therefor or (y) for any acquisition, the date thereof; and
"Reference Date" shall mean (x) for any distribution, the day before the
earlier of the record date for such distribution and the first date on which the
relevant common stock trades the regular way without the right to receive such
distribution, or (y) for any acquisition, the day before the date of such
acquisition. "Voting Shares" shall mean (solely for purposes of this Section
1.02) all outstanding shares of any class or classes (however designated) of
capital stock entitled to vote generally in the election of members of the Board
of Directors of the Company. "Permitted Holder" shall mean (i) J. Frank
Harrison, Jr. or J. Frank Harrison, III, (ii) any heir, executor, administrator,
testamentary trustee, legatee, beneficiary or distributee of J. Frank Harrison,
Jr. or J. Frank Harrison, III, (iii) any trust, the beneficiaries of which
include only J. Frank Harrison, Jr., J. Frank Harrison, III or any person
described in clause (ii) hereof and (iv) The Coca-Cola Company.
In addition, so long as any Person (a "Holding Company") owns,
directly or indirectly, Voting Shares of the Company entitled to exercise 50% or
more of the total voting power of all outstanding Voting Shares of the Company,
any references to the "Company" in clauses (i) through (v) above and in any
related definitions shall be deemed to refer to the Company and such Holding
Company (from and after the date on which such Holding Company first became such
an owner of Voting Shares of the Company) as one entity.
A "Rating Decline" shall be deemed to exist for any Designated
Event if either (i) on any date within the Comparison Period (as defined below)
for such Designated Event:
(a) in the event any medium-term notes or other medium-term
securities of the Company that are rated by either of the Rating
Agencies at such time ("Rated
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Medium-Term Notes") are rated Investment Grade (as defined below) by
either or both of the Rating Agencies on the Rating Date (as defined
below) for such Designated Event, the rating of the Rated Medium-Term
Notes by each Rating Agency rating the Rated Medium-Term Notes shall be
below Investment Grade; or
(b) in the event that no Rated Medium-Term Notes of the
Company are rated Investment Grade by either of the Rating Agencies on
the Rating Date for such Desig nated Event, the rating of any
outstanding Rated Medium-Term Notes of the Company by each Rating
Agency shall be (or be lower than) the Full-Category-Lower Rating (as
defined below) for the rating of such Rated Medium-Term Notes of the
Company by such Rating Agency on such Rating Date; or
(c) in the event that there are no medium-term notes or
medium-term securities of the Company that are rated by either Rating
Agency at such time and any short-term notes or other short-term
securities of the Company that are rated by either of the Rating
Agencies ("Rated Short-Term Notes") (Rated Medium-Term Notes and Rated
Short-Term Notes hereafter referred to collectively as "Rated Notes")
are rated Investment Grade (as defined below) by either or both of the
Rating Agencies on the Rating Date (as defined below) for such
Designated Event, the rating of the Rated ShortTerm Notes by each
Rating Agency rating the Rated Short-Term Notes shall be below
Investment Grade; or
(ii) on the last day of such Comparison Period for
such Designated Event either (A) no notes or other securities
of the Company are rated by Moody's or S&P, or (B) notes or
other securities of the Company are rated by either (but not
both) of Moody's and S&P, but are not rated by either Duff's
or Fitch's.
"Investment Grade" shall mean, (A) for medium-term securities,
a rating of at least Baa3, in the case of a rating by Moody's, a rating of at
least BBB-, in the case of a rating by S&P, a rating of at least BBB- in the
case of a rating by Duff's, and a rating of at least BBB-, in the case of a
rating by Fitch's and (B) for short-term securities, a rating of at least A-3,
in the case of a rating by Moody's, a rating of at least P-3, in the case of a
rating by S&P, a rating of at least D-3, in the case of a rating by Duff's, and
a rating of at least F-3, in the case of a rating by Fitch's.
"Comparison Period" shall mean, for any Designated Event, the
period (i) com mencing on the date of the occurrence of such Designated Event
and (ii) ending on the 90th day after the first public announcement of such
occurrence or, if on such 90th day the rating of the Rated Notes by Moody's
shall be listed on the "Watchlist" of Moody's with a designation of "down" or
"uncertain" (or on such similar list with such similar designations as may be
maintained by Moody's from time to time) or the rating of the Rated Notes by S&P
shall be listed on the "Creditwatch" of S&P with a designation of "negative
implications" or "developing" (or on such similar list with such similar
designations as may be maintained by S&P from time to time), or the rating of
the Rated Notes by Duff's shall be listed on the "DP Watchlist" of Duff's with a
designation of "down" or "up/down" (or such similar list with such
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similar designations as may be maintained by Duff's from time to time) or the
rating of the Rated Notes by Fitch's shall be listed on the "FitchAlert" of
Fitch's with a designation of "declining" or "uncertain" (or such similar list
with such similar designations as may be maintained by Fitch's from time to
time) the day 5 days after the first date thereafter on which the rating of the
Rated Notes by each Rating Agency rating the Rated Notes shall not be so listed.
"Rating Date", for any Designated Event, shall mean the
earlier of:
(i) the date that is either (x) the 90th day prior
to the date of the earlier of (a) the first public announcement of an
intention to effect such Designated Event and (b) the occurrence of
such Designated Event, or (y) if the Rated Notes are not rated by both
Rating Agencies on such 90th day, the next preceding day on which the
Rated Notes are so rated (or, if such 90th day is before the date of
the first issuance of any Rated Note, the date of such first issuance);
or
(ii) if during the 180-day period ending on the
date referred to in clause (i) an intention to effect any other
Designated Event was first publicly announced but such other Designated
Event did not occur, the date that is the earliest of the Rating Dates
for any such other Designated Events.
"Full-Category-Lower Rating", for any rating of the Rated
Notes by any Rating Agency on any Rating Date, shall mean the rating of the next
lower Rating Category as compared to such rating by such Rating Agency on such
Rating Date, modified by the same gradation (if applicable) within such next
lower Rating Category as the gradation within the Rating Category of such rating
by such Rating Agency on such Rating Date ("gradation" in the case of
medium-term ratings meaning + and - for S&P, Duff's and Fitch's and 1, 2 and 3
for Moody's; and the "Rating Category" of any rating shall mean (from highest to
lowest), with respect to a medium-term rating by S&P, BB, B, CCC, CC, C and D,
or, with respect to a medium-term rating by Moody's, Ba, B, Caa, Ca and C, or,
with respect to a medium-term rating by Duff's, BB, B and CCC, or, with respect
to a medium-term rating by Fitch's, BB, B, CCC, CC, C, DDD, DD and D). For
example, the Full-Category-Lower Ratings for the S&P medium-term ratings of
"BB-" and "CCC-" are "B-" and "CC", respectively.
"Moody's" means Moody's Investors Service, together with its
successors.
"S&P" means Standard & Poor's Corporation, together with its
successors.
"Duff's" means Duff & Phelps Inc., together with its
successors.
"Fitch's" means Fitch's Investors' Service, Inc., together
with its successors.
"Rating Agencies" means, at any time, Moody's and S&P;
provided that if at such time either (but not both) of Moody's or S&P shall no
longer be rating any of the applicable notes or other securities of the Company
(medium-term notes and securities in the case of clauses (a) and (b) of the
definition of Rating Decline, and short-term notes and securities in the
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case of clause (c) thereof), then "Rating Agencies" shall mean the one that is
still rating such securities and either (i) Duff's (if it is rating such
securities) or (ii) if Duff's is not rating such securities but Fitch's is
rating such securities, Fitch's.
"Company Employee Benefit Plan" shall mean any employee
benefit plan (as defined in Section 3(3) of ERISA) maintained by the Company or
any Subsidiary.
"Fair Market Value" of any item shall mean the fair market
value of the subject item as determined in good faith by the Board of Directors
of the Company.
1.03 Accounting Terms. All accounting terms not otherwise
defined herein have the meanings assigned to them in accordance with generally
accepted accounting principles in the United States and, except as otherwise
herein expressly provided, the term "generally accepted accounting principles"
with respect to any computation required or permitted hereunder shall mean such
accounting principles as are generally accepted in the United States at the date
of such computation.
1.04 Compliance Certificates and Opinions. Except as otherwise
expressly provided by this Agreement, upon any application or request by the
Company to the Agent and the Banks to take any action under any provision of
this Agreement, the Company shall furnish to the Agent an Officers' Certificate
stating that all conditions precedent, if any, provided for in this Agreement
relating to the proposed action have been complied with and, if reasonably
requested by the Agent, an Opinion of Counsel stating that in the opinion of
such counsel all such conditions precedent, if any, have been complied with,
except that in the case of any such application or request as to which the
furnishing of such documents is specifically required by any provision of this
Agreement relating to such particular application or request, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or cove nant provided for in this Agreement shall include:
(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual,
he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
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Section 2. Commitments and Loans.
2.01 Commitments. Each Bank severally agrees, subject to the
terms and conditions of this Agreement, to make one loan to the Company on any
Business Day on or prior to November 20, 1995, and to make one additional loan
to the Company on any Business Day on or prior to the Commitment Termination
Date, which loans collectively shall be in an aggregate principal amount up to
but not exceeding the respective Commitment amount specified opposite such
Bank's name on the signature pages hereof. Each such borrowing of Loans shall be
made by the Banks pro rata in accordance with their respective Commitments.
2.02 Borrowings. The Company shall give the Agent written
notice of each requested borrowing of the Loans not later than 10:00 a.m. (New
York time) on the date that is not less than five Business Days prior to the
date of such requested borrowing. Each such notice of borrowing shall specify
the aggregate principal amount of the Loans to be borrowed (which shall not, in
the aggregate, exceed $120,000,000 on the occasion of the initial borrowing
hereunder, and shall not, in the aggregate, exceed $50,000,000 on the occasion
of the second (and final) borrowing hereunder), the date of borrowing (which
shall be a Business Day not later than November 20, 1995, in the case of the
initial borrowing hereunder, and the Commitment Termination Date in the case of
the second (and final) borrowing hereunder) and the initial Interest Period that
will apply to the Loans borrowed as part of such borrowing. Each such notice of
borrowing shall be irrevocable and shall be effective upon receipt thereof by
the Agent. Promptly after the Agent's receipt of any notice of borrowing (and in
any event not later than the date three Business Days prior to the date of the
requested borrowing), the Agent shall give each Bank notice of the contents
thereof and of each Bank's pro rata share of the aggregate principal amount of
the requested borrowing.
Not later than 10:00 a.m. New York time on the date of each
requested borrowing, each Bank shall make available to the Agent the principal
amount of such Bank's Loan to be made as part of such borrowing by paying the
same, in Dollars and in immediately available funds, to the Agent's account no.
04 203606 maintained at Bankers Trust Company, New York, New York, ABA no.
021001033, ref: "Coca-Cola Bottling Co. Consolidated". Not later than 3:00 p.m.
(New York time), the Agent shall, subject to the terms and conditions of this
Agreement, make available to the Company the amounts so received from the Banks
by depositing the same, in immediately available funds, in the Company's account
no. 001240985 "Coca-Cola Bottling Co. Consolidated" maintained with NationsBank
of North Carolina, N.A., One NationsBank Plaza, Charlotte, North Carolina, ABA
no. 053000196; provided, that, notwithstanding the foregoing, the Borrower
hereby irrevocably authorizes and instructs the Agent to apply the proceeds of
the Loans made on the occasion of the initial borrowing hereunder to repay or
prepay in full, on the borrowing date of the initial Loans, any outstanding
principal amount of the loans under the Existing Term Loan Agreements. The
second borrowing of the Loans shall be the final borrowing, and accordingly
shall terminate any Commitments that remain unborrowed. Any portion of the
Commitments not utilized on December 29, 1995 will terminate on such date.
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2.03 Fees. (a) The Company shall pay to the Agent, for the
account of each Bank, a commitment fee at a rate of 0.15% per annum on the
average daily unutilized amount of the Commitment of such Bank, from and
including the date of this Agreement to but not including the Commitment
Termination Date; provided, that if the initial borrowing of Loans occurs on or
prior to November 20, 1995, no such commitment fee shall be payable with respect
to the portion of the Commitments (up to an aggregate Commitment amount of
$120,000,000) borrowed on such date, for the period from the signing date of
this Agreement to but not including such borrowing date. Accrued commitment fee
shall be payable in arrears on the Commitment Termination Date or, if earlier,
the date on which the Commitments are borrowed or otherwise are terminated in
full.
(b) In the event that any portion of the Commitments remains
in effect at any time after 10:00 a.m. (New York time) on the Commitment
Termination Date, or in the event that any portion of the Commitments is
terminated for any reason on any day prior to the Commitment Termination Date,
the Borrower shall pay to the Agent for the account of each Bank a commitment
termination fee in an amount equal to 0.125% of the amount of such remaining
Commitment of such Bank or the portion so terminated, as the case may be. Such
fee shall be payable on the Commitment Termination Date or, in the case of any
earlier termination, the date of such termination.
(c) The Company shall pay to the Agent for its own account
such fees in such amounts and at the times set forth in the letter dated
November 20, 1995 between the Agent and the Company.
2.04 Lending Offices. Each Bank shall make and maintain its
Loans at such Bank's Applicable Lending Office or at such other Applicable
Lending Office(s) as such Bank may select in accordance with the definition of
such term in Section 1.01 hereof.
2.05 Loan Accounts. Each Bank shall record on its internal
records the amount of the Loans made by it and each payment of principal,
interest, fees and other amounts payable by the Company hereunder and under the
Notes, and such records shall be rebuttably presumptive evidence of the
Company's obligations in respect of such amounts. The Agent also shall record on
its internal records the amount of all Loans of the Banks and each payment of
principal, interest, fees and other amounts payable by the Company hereunder and
under the Notes, and such records shall be rebuttably presumptive evidence of
the Company's obligations in respect of such amounts; provided that in the event
of any discrepancy between the records of the Agent and the records of any Bank,
the records of such Bank shall prevail.
2.06 Notes.
(a) Without limiting the provisions of Section 2.05 hereof,
each Loan made by each Bank shall be further evidenced by a promissory note of
the Company in substantially the form of Exhibit A hereto. A separate note shall
evidence the Loan made by each Bank on the occasion of each borrowing of Loans.
Each Note to the order of a Bank shall be dated the date of the borrowing of the
respective Loan hereunder to be evidenced by such Note, shall be
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payable to the order of such Bank in a principal amount equal to the amount of
such Loan and shall be otherwise duly completed, executed and delivered. Any
payments and prepayments made on account of the principal of each Note shall be
recorded by the Bank holding such Note on its books and, prior to any transfer
of such Note, endorsed by such Bank on the schedule attached to such Note or any
continuation thereof; but no failure by such Bank to make, or delay in making,
such recording or endorsement shall affect the obligations of the Company under
this Agreement or such Note.
(b) Each Bank shall be entitled to have its Notes subdivided,
by exchange for promissory notes in minimum denominations of $10,000,000 (in the
aggregate amount of all Notes of such Bank).
2.07 Several Obligations and Remedies. The obligations of the
Banks under this Agreement are several, and neither the Agent nor any other Bank
shall be responsible for the failure of any Bank to make its Loans hereunder.
The rights of the Banks also are several, and the amounts payable by the Company
at any time under this Agreement and the Notes to each Bank shall be a separate
and independent debt. Each Bank shall be entitled separately to protect and
enforce its rights arising out of this Agreement and the Notes, and it shall not
be necessary for any other Bank or the Agent to consent to, or be joined as an
additional party in, any proceedings for such purpose.
Section 3. Payments of Principal and Interest.
3.01 Repayment of Loans. The Company will pay to the Agent for
the account of each Bank the unpaid principal amount of each Loan in full in two
installments, the first of which shall be in the aggregate principal amount of
$85,000,000 for all of the Banks and shall be payable on the Interim Maturity
Date, and the second of which shall be in the aggregate principal amount of
$85,000,000 for all of the Banks (or such other amount as shall equal the
aggregate principal amount of all Loans that are then outstanding) and shall be
payable on the Maturity Date. For the avoidance of doubt, (i) assuming that the
Commitments are fully drawn, the installment of principal of each Loan made by
each Bank that the Company shall be obligated to pay on the Interim Maturity
Date shall be one-half of the original principal amount of such Loan, with the
full remaining balance of the principal amount of such Loan to be payable on the
Maturity Date, and (ii) in the event that less than all of the Commitments are
drawn, the aggregate initial installment of the Loans payable on the Interim
Maturity Date shall be $85,000,000 for all of the Banks, and the second (and
final) aggregate installment of the Loans payable on the Maturity Date shall be
the remaining aggregate principal balance of the Loans outstanding on such date.
3.02 Interest.
(a) The Company will pay to the Agent for the account of each
Bank interest on the unpaid principal amount of each installment of each Loan
and Note for the period commencing on the date of such Loan to but excluding the
date on which such installment shall be paid in full, at a rate per annum, for
each Interest Period for such Loan equal to the LIBOR
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for such Interest Period plus the Applicable Margin in effect from time to time
during such Interest Period.
(b) Notwithstanding the foregoing, the Company will pay to
Agent for the account of each Bank interest at the Post-Default Rate on any
principal of the Loans and (to the fullest extent permitted by law) on interest
hereunder or under the Notes, which shall not be paid in full when due (whether
at stated maturity, by acceleration or otherwise), for the period commencing on
the due date thereof to but excluding the date on which the same is paid in
full.
(c) Accrued interest on the Loans and the Notes shall be
payable on the last day of each Interest Period and upon the payment or
prepayment of the Loans, except that interest payable on any amount at the
Post-Default Rate shall be payable from time to time on demand by the Agent or
any Bank.
(d) The Company shall select the duration of the initial
Interest Period for each Loan in the notice of borrowing for such Loan given
pursuant to Section 2.02 hereof. The Company shall select the duration of each
subsequent Interest Period for each Loan by giving written notice to the Agent,
and such Interest Period shall apply to all Loans then outstanding that were
made as part of the same borrowing. Such notice with respect to any Interest
Period shall be irrevocable and shall be effective only if received by the Agent
not later than 10:00 a.m. New York time on the date three Business Days prior to
the first day of such Interest Period. In the event that the Company fails to
select the duration of any Interest Period for any Loans within the time period
and otherwise as provided in this Section 3.02, such Interest Period shall have
a duration of one month. The Agent shall promptly notify the Banks of the
duration of each Interest Period.
3.03 Prepayments of the Loans.
(a) The Company shall have the right to prepay the Loans in
full or in part at any time or from time to time; provided that: (i) the Company
shall give the Agent written notice of each such prepayment, which notice shall
be irrevocable, shall specify the aggregate principal amount of the Loans of all
the Banks to be prepaid (which, if less than the full unpaid principal amount of
the Loans, shall be at least $5,000,000 or, if higher, an integral multiple of
$1,000,000), and the date of prepayment, and shall be effective only if received
by the Agent not later than 10:00 a.m. New York time on the date 10 days prior
to the requested date of such prepayment, (ii) such prepayment shall be
accompanied by all amounts that may be required to be paid to each Bank pursuant
to Section 5.04 hereof, (iii) except in the case of non-ratable prepayments
pursuant to Sections 5.01(b), 5.03 or 5.06 hereof, such prepayment shall be
applied ratably to the Loans of all the Banks in accordance with the unpaid
principal amount of the respective Loans then held by each of them, and (iv)
such prepayment shall be applied to the installments of the Loans in the inverse
order of their maturity. The Agent shall promptly notify the Banks of each
notice of prepayment.
(b) Any portion of the Loans prepaid, whether pursuant to this
Section 3.03, Section 5.03 or otherwise, may not be reborrowed.
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(c) No portion of the Commitments may be voluntarily reduced
or terminated by the Company.
3.04 Limitation on Interest. Anything in this Agreement or in
any Note to the contrary notwithstanding, in no event shall any Bank be entitled
to take, charge, collect or receive interest on the Loans or the Notes in excess
of the maximum rate permitted under applicable law.
Section 4. Payments and Computations.
4.01 Payments.
(a) All payments of principal of the Loans, interest thereon
and all other fees, indemnities and other amounts to be paid by the Company
under this Agreement and the Notes shall be made in Dollars, in immediately
available funds, to the Agent at its account No. 04 203606 at Bankers Trust
Company, New York, New York ABA no. 021001033, ref.: "CocaCola Bottling Co.
Consolidated" (or at such other account or at such other place in New York City
as the Agent may notify the Company from time to time), for account of each
Bank's Applicable Lending Office not later than 10:00 a.m. New York time on the
date on which such payment shall become due. Each such payment made after such
time on any such due date shall be deemed to have been made on the next
succeeding Business Day, and interest shall accrue thereon as provided in
Section 3.02(b). Each payment received by the Agent under this Agreement or any
Note for account of a Bank shall be paid promptly to such Bank, in immediately
available funds, for account of such Bank's Applicable Lending Office.
(b) All payments and prepayments of principal of the Loans
shall be accompanied by interest on the Loans accrued to the date of payment or
prepayment.
(c) All payments shall be made without set-off, counterclaim
or deduction of any kind. Upon the occurrence and during the continuance of a
Default, then in addition to any rights that the Agent or any Bank may have
under applicable law, the Agent and each Bank may (but shall not be obligated
to) debit the amount of any such payment to any ordinary deposit account of the
Company with the Agent or such Bank or any affiliate of the Agent or such Bank
(with subsequent written notice to the Company).
(d) If the stated due date of any payment under this Agreement
or the Notes would otherwise fall on a day which is not a Business Day, such
date shall be extended to the next succeeding Business Day and interest shall be
payable for any principal so extended for the period of such extension.
(e) Each payment or prepayment of principal of or interest on
the Loans or of commitment fee or commitment termination fee shall be made to
the Agent for the account of the Banks pro rata in accordance with the
respective unpaid principal amounts of their respective Loans.
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4.02 Computations. Interest on the Loans and the Notes and on
interest thereon and all commitment fees hereunder shall be computed on the
basis of a year of 360 days and actual days elapsed (including the first day but
excluding the last day) occurring in the period for which payable.
4.03 Non-Receipt of Funds by the Agent. Unless the Agent shall
have been notified by a Bank or the Company prior to the date on which such Bank
or the Company (as the case may be) is scheduled to make any payment to the
Agent of any amount required to be paid under this Agreement or any Note (such
payment being herein called a "Required Payment"), which notice shall be
effective upon receipt, that it does not intend to make the Required Payment to
the Agent, the Agent may assume that the Required Payment has been made and may,
in reliance upon that assumption (but shall not be required to), make the amount
of such Required Payment available to the intended recipient(s) on such date. If
such Bank or the Com pany (as the case may be) has not in fact made the Required
Payment to the Agent, the recipient(s) of such payment shall, on demand, repay
to the Agent the amount so made available together with interest thereon in
respect of each day during the period commencing on the date such amount was so
made available by the Agent until the date on which the Agent recovers such
amount at a rate per annum equal to the effective federal funds rate for such
day (as determined by the Agent).
4.04 Sharing of Payments. If any Bank shall obtain payment of
any principal of or interest on any Loan through the exercise of any right of
set-off, banker's lien, counterclaim or similar right or otherwise, and, as a
result of such payment, such Bank shall have received a greater percentage of
the principal or interest then due hereunder to such Bank than the percentage
received by any other Banks, it shall promptly purchase from such other Banks
participations in the Loans made by such other Banks in such amounts, and make
such other adjustments from time to time as shall be equitable, to the end that
all the Banks shall share the benefit of such excess payment (net of any
expenses which may be incurred by such Bank in obtaining or preserving such
excess payment) pro rata in accordance with the unpaid principal of and/or
interest on the Loans held by each of the Banks. To such end, all the Banks
shall make appropriate adjustments among themselves (by the resale of
participations sold or otherwise) if such excess payment is rescinded or must
otherwise be restored. The Company agrees that any Bank so purchasing a
participation in the Loans made by other Banks may exercise all rights of
set-off, banker's lien, counterclaim or similar rights with respect to such
participation as fully as if such Bank were a direct holder of the Loans in the
amount of such participation. Nothing contained herein shall require any Bank to
exercise any such right or shall affect the right of any Bank to exercise, and
retain the benefits of exercising, any such right with respect to any other
indebtedness or obligation of the Company or any of its Affiliates. If under any
applicable bankruptcy, insolvency or other similar law, any Bank receives a
secured claim in lieu of a right of set-off to which this Section 4.04 applies,
such Bank shall, to the extent practicable, exercise its rights in respect of
such secured claim in a manner consistent with the rights of the Banks entitled
under this Section 4.04 to share in the benefits of any recovery on such secured
claim.
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Section 5. Yield Protection and Illegality.
5.01 Additional Costs.
(a) The Company shall pay to the Agent for the account of each
Bank from time to time such amounts as such Bank may reasonably determine to be
necessary to compensate it for any costs which such Bank determines are
attributable to its making or main taining of any of its Loans or its obligation
to make such Loans hereunder or any reduction in any amount receivable by such
Bank from the Company hereunder or under the Notes in respect of its Loans or
such obligation (such increases in costs and reductions in amounts receivable
being herein called "Additional Costs"), resulting from any Regulatory Change
which: (i) changes the basis of taxation of any amounts payable to the Agent or
such Bank by the Company under this Agreement or any Note (other than taxes
imposed on the overall net income of such Bank or of its Applicable Lending
Office by the jurisdiction in which such Bank has its principal office or such
Applicable Lending Office); or (ii) imposes or modifies any reserve, special
deposit, minimum capital, capital ratio or similar requirements, or increases
the rate of any such requirements, relating to any extensions of credit or other
assets of, or any deposits with or other liabilities of, such Bank (including
any of such Bank's Loans or any deposits referred to in the definition of
"LIBOR" in Section 1.01 hereof), or the Commitments or the Notes; or (iii)
imposes any other condition affecting this Agreement or the Notes (or any of
such extensions of credit or liabilities) or the Commitments. The relevant Bank
will notify the Company (with a copy to the Agent) of any event occurring after
the date of this Agreement which will entitle such Bank to compensation pursuant
to this Section 5.01(a) as promptly as practicable after it obtains knowledge
thereof and determines, in the light of its then prevailing policies, to request
such compensation. Notwithstanding the foregoing provisions of this Section
5.01(a), in no event shall any Bank requesting payment of any Additional Costs
under this Section 5.01(a) be entitled to payment of such Additional Costs to
the extent that such Additional Costs arose with respect to any period prior to
the date of the first such request. Further, each Bank will designate a dif
ferent Applicable Lending Office for its Loans if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
opinion of such Bank, be disadvantageous to such Bank in any material respect.
Each Bank will furnish the Company (with a copy to the Agent) with a certificate
setting forth in reasonable detail the basis and amount of each request for
compensation under this Section 5.01(a).
(b) Without limiting the effect of the provisions of Section
5.01(a) hereof (but without duplication), in the event that, by reason of any
Regulatory Change, any Bank becomes subject to restrictions on the amount of any
category of liabilities or assets (relating to any Loan held by it or its
funding), then, if such Bank so elects by notice to the Company (with a copy to
the Agent), the following provisions shall apply:
(x) During the 30-day period following the date of any such
notice (the "Negotiation Period"), such Bank and the Company will
negotiate in good faith (through the Agent) to agree upon a substitute
basis (the "Substitute Basis") for determining the rate of interest to
be applicable to the Loans held by such Bank (including, if
appropriate, alternative periods for such determinations). If so
agreed, the Substitute Basis (plus the
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Applicable Margin) shall thereafter be the rate at which such Loans
bear interest pursuant to Section 3.02 hereof (subject to Section 3.04)
and shall be retroactive to, and take effect from, the beginning of the
then current Interest Period for each Loan.
(y) If at the expiry of the Negotiation Period a Substitute
Basis shall not have been agreed upon, such Bank shall notify the
Company from time to time (with a copy to the Agent) of the cost (as
reasonably determined by such Bank) of funding its Loans (plus the
Applicable Margin) and the interest payable to such Bank on such Loans,
and the Company shall be obligated to pay all such costs and interest
in the amounts and at the rates specified by such Bank. The failure of
the Company and such Bank to agree upon a Substitute Basis at the
expiry of the Negotiation Period shall be deemed to be an election by
the Company to prepay the Loans of such Bank in accordance with Section
3.03 hereof on the date 30 days after such expiry (or, if earlier, on
the last day of the then current Interest Period), subject to Section
5.04 hereof.
(c) Without limiting the effect of the foregoing provisions of
this Section 5.01 (but without duplication), the Company shall pay to the Agent
for the account of each Bank from time to time on request by such Bank (with a
copy to the Agent) such amounts as such Bank may reasonably determine to be
necessary to compensate such Bank for any costs which it determines are
attributable to the maintenance by such Bank (or any Applicable Lending Office),
pursuant to any law or regulation or any interpretation, directive or request
(whether or not having the force of law) of any court or governmental or
monetary authority, by reason of any Regulatory Change, of capital in respect of
the Commitment, the Loans or the Notes held by it (such com pensation to
include, without limitation, an amount equal to any reduction of the rate of
return on assets or equity of such Bank (or any Applicable Lending Office) to a
level below that which such Bank (or any Applicable Lending Office) could have
achieved but for such law, regulation, interpretation, directive or request);
provided that in no event shall any Bank requesting payment of any compensation
under this Section 5.01(c) be entitled to payment of such compensation to the
extent that such compensation is for such costs with respect to any period prior
to the date of the first such request. Such Bank will notify the Company (with a
copy to the Agent) that it is entitled to compensation pursuant to this Section
5.01(c) as promptly as practicable after it determines, in light of its then
prevailing policies, to request such compensation. Each Bank will furnish the
Company with a certificate setting forth in reasonable detail the basis and
amount of each request for compensation under this Section 5.01(c).
(d) Determinations and allocations by each Bank for purposes
of this Section 5.01 of the effect of any Regulatory Change pursuant to Section
5.01(a) or (b) hereof, or of the effect of capital maintained pursuant to
Section 5.01(c) hereof, on its costs or rate of return of maintaining its Loans
or its obligation to make its Loans, or on amounts receivable by it in respect
of its Loans, and of the amounts required to compensate such Bank under this
Section 5.01, shall be conclusive, provided that such determinations and
allocations are reasonable.
5.02 Changes in Circumstances. Anything herein to the contrary
notwithstanding, if, on or prior to the determination of the interest rate for
any Loan for any Interest Period therefor either (i) the Agent determines (which
determination shall be conclusive)
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that quotations of interest rates for the deposits referred to in the definition
of "LIBOR" in Section 1.01 hereof are not being provided in the relevant amounts
or for the relevant maturities for purposes of determining the rate of interest
for such Loan as provided herein, then the Agent shall give the Company and the
Banks prompt written notice thereof, or (ii) any Bank determines that the LIBOR
for such Interest Period will not adequately reflect the cost to such Bank of
funding its Loan or Loans for such Interest Period, then such Bank shall give
the Agent and the Company prompt written notice thereof; and, if such Loan has
not then been made, the obligation of the Banks to make the Loans shall
immediately terminate, and if such Loan has been made, the following provisions
shall apply:
(a) During the 30-day period following the date of any such
notice (the "Negotiation Period"), the Banks and the Company will
negotiate in good faith (through the Agent) to agree upon a substitute
basis (the "Substitute Basis") for determining the rate of interest to
be applicable to the Loans (including, if appropriate, alternative
periods for such determinations). If so agreed, the Substitute Basis
(plus the Applicable Margin) shall thereafter be the rate at which the
Loans bear interest pursuant to Section 3.02 hereof (subject to Section
3.04) and shall be retroactive to, and take effect from, the beginning
of the then current Interest Period.
(b) If at the expiry of the Negotiation Period a Substitute
Basis shall not have been agreed upon, each Bank shall notify the
Company from time to time (with a copy to the Agent) of the cost (as
reasonably determined by such Bank) of funding its Loans (plus the
Applicable Margin) and the interest payable to such Bank on such Loans,
and the Company shall be obligated to pay all such costs and interest
in the amounts and at the rates specified by such Bank. The failure of
the Company and the Banks to agree upon a Substitute Basis at the
expiry of the Negotiation Period shall be deemed to be an election by
the Company to prepay the Loans of the Banks in accordance with Section
3.03 hereof on the date 30 days after such expiry (or, if earlier, the
last day of the then current Interest Period), subject to Section 5.04
hereof.
5.03 Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Bank or its Applicable
Lending Office to make or maintain its Loans hereunder, then such Bank shall
promptly notify the Company and the Agent and, if the Loans have not then been
made, the obligation of such Bank to make its Loans shall immediately terminate,
and if the Loans have been made, the Company shall prepay the Loans of such Bank
in full on the last day of the then current Interest Period therefor, or on such
earlier date as such Bank may reasonably require in light of the applicable
legal requirements. Such Bank agrees that it will designate a different
Applicable Lending Office for its Loans if such designation will avoid the
illegality that is the reason for the required prepayment pursuant to this
Section 5.03 and will not, in the opinion of such Bank, be disadvantageous to
such Bank in any material respect.
5.04 Compensation. Whether or not any Loan is made, the
Company shall pay to the Agent for its own account or for the account of each
Bank (as the case may be), immediately upon the request of the Agent or such
Bank from time to time, such amount or
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amounts as shall be sufficient (in the reasonable opinion of the Agent or such
Bank) to com pensate it for any loss, cost or expense which the Agent or such
Bank determines are attributable to:
(a) any payment or prepayment of any Loan for any reason
(including, without limitation, any prepayment or acceleration of the
Loans pursuant to Section 3.03, 5.03 or 9 hereof for any reason) on a
date other than the last day of an Interest Period for such Loan or any
failure to continue a LIBOR Loan for the designated Interest Period; or
(b) any failure by the Company for any reason (including,
without limitation, the failure of any of the conditions precedent
specified in Section 6 hereof to be satisfied) to borrow the Loans on
any date scheduled for the borrowing thereof.
Without limiting the effect of the first sentence of this Section 5.04, such
compensation to any Bank shall not include the amount attributable to the
Applicable Margin but shall include an amount equal to the excess, if any, of
(i) the amount of interest which otherwise would have ac crued on the principal
amount so paid, prepaid or not borrowed for the period from the date of such
payment, prepayment or failure to borrow to the last day of the then current
Interest Period for the respective Loans (or, in the case of a failure to
borrow, the Interest Period for such Loans which would have commenced on the
date specified for such borrowing) at the applicable rate of interest for such
Loan provided for herein over (ii) the interest component of the amount such
Bank would have bid in the London interbank market for Dollar deposits of
leading banks in amounts comparable to such principal amount and with maturities
comparable to such period (as reasonably determined by such Bank).
5.05 Taxes. All payments of principal, interest, fees and
other amounts under this Agreement or the Notes paid or payable to the Agent or
any Bank (as used in this Section 5.05, "Payments") shall be made free and clear
of, and without deduction by reason of, any and all taxes, duties, assessments,
withholdings, retentions or other similar charges whatsoever imposed, levied,
collected, withheld or assessed by any jurisdiction or any agency or taxing
authority thereof or therein (as used in this Section 5.05, "Taxes"), all of
which shall be paid by the Company for its own account not later than the date
when due. If the Company is required by law or regulation to deduct or withhold
any Taxes from any Payment, the Company shall: (a) make such deduction or
withholding; (b) pay the amount so deducted or withheld to the appropriate
taxing authority not later than the date when due; (c) deliver to the Agent,
promptly and in any event within 15 days after the date on which such Taxes
become due, original tax receipts and other evidence satisfactory to the Agent
of the payment when due of the full amount of such Taxes; and (d) pay to the
Agent for the account of itself or of the respective Bank, forthwith upon any
request by the Agent or such Bank therefor from time to time, such addi tional
amounts as may be necessary so that the Agent or such Bank receives, free and
clear of all Taxes, the full amount of such Payment stated to be due under this
Agreement or the Notes as if no such deduction or withholding had been made. The
Company hereby indemnifies the Agent and each Bank and holds each of them
harmless for any loss, cost, damage, penalty or expense whatsoever arising from
any failure of the Company to make, or delay in making, any deduction or
withholding of Taxes, or its failure to pay when due the amount so deducted or
withheld to the
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appropriate taxation authority or its failure otherwise to comply with the terms
and conditions of this Section 5.05. Each Bank will designate a different
Applicable Lending Office for its Loans if such designation will avoid the need
for, or reduce the amount of, any additional amount that the Company is required
to pay to such Bank under this Section 5.05 and will not, in the opinion of such
Bank, be disadvantageous to such Bank in any material respect.
Each Bank that is organized under the laws of a jurisdiction
other than the United States or any state or other political subdivision,
district or territory thereof agrees that it will deliver to the Company on the
date of its execution of this Agreement and thereafter as may be required from
time to time by applicable law or regulation United States Internal Revenue
Service Form 4224 or 1001 (or any successor form) or such other form as from
time to time may be required to demonstrate that payments made by the Company to
such Bank under this Agreement and the Notes either are exempt from United
States Federal withholding taxes or are payable at a reduced rate (if any)
specified in any applicable tax treaty or convention.
5.06 Prepayments. If the Company becomes obligated to pay any
Bank Additional Costs, compensation or additional amounts pursuant to Section
5.01 hereof, the Company may prepay the Loans of such Bank non-ratably in
accordance with the terms of Section 3.03 hereof.
Section 6. Conditions Precedent.
6.01 Conditions Precedent to the Initial Borrowing. The
obligation of each Bank to make its Loan hereunder on the occasion of the
initial borrowing under Section 2.02 hereof is subject to the receipt by the
Agent of the following documents, each of which shall be satisfactory to the
Agent in form and substance, and with sufficient copies for the Agent and each
Bank:
(a) An Officers' Certificate (which shall include the
signature thereon of the Secretary of the Company) containing certified
copies of the certificate of incorporation and bylaws and all other
organizing documents of the Company and all corporate action taken by
the Company approving this Agreement, the Notes, the borrowing by the
Company of the full amount of the Commitments hereunder and the
performance of its obligations hereunder and thereunder (including,
without limitation, a certificate setting forth the resolutions of the
Board of Directors of the Company adopted in respect of the
transactions contemplated hereby and thereby and any shareholder action
taken in respect thereof) and good standing certificates for the
Company from the States of Delaware, Tennessee, Virginia, North
Carolina and South Carolina and good standing certificates for each of
the Subsidiaries listed in Schedule 1 hereto from the states of their
respective incorporation and from each state in which such Subsidiary
is doing business, as set forth in said Schedule 1.
(b) An Officers' Certificate (which shall include the
signature thereon of the Secretary of the Company) in respect of each
of the officers who is authorized to sign this Agreement and the Notes
on its behalf.
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(c) An Officers' Certificate to the effect set forth in
Section 6.02 hereof.
(d) An opinion of Witt, Gaither & Whitaker, special counsel to
the Company, substantially in the form of Exhibit B hereto.
(e) The Notes in respect of the initial Loans, duly executed
and delivered by the Company to the order of each Bank and otherwise
appropriately completed.
(f) Evidence of the payment of the fee described in Section
2.03(c) hereof.
(g) An Officers' Certificate stating that the Senior Debt
Rating of the Company by Moody's is at least Baa3 and by S&P is at
least BBB-.
(h) Evidence that all principal of and interest on all loans
outstanding under the Existing Term Loan Agreements have been or,
simultaneously with the making of the Loans hereunder are being,
irrevocably paid in full, together with such broken funding payments
and other costs as may be provided for in the Existing Term Loan
Agreements.
(i) Such other opinions and other documents as the Agent or
any Bank may reasonably request.
6.02 Each Borrowing. The obligation of the Banks to make the
Loans to the Company upon the occasion of each borrowing hereunder (including,
without limitation, the initial borrowing) is subject to the further condition
precedent that, as of the date of the Loans to be made as part of such borrowing
and after giving effect thereto: (a) no Default or Rating Decline shall have
occurred and be continuing; and (b) the representations and warranties made by
the Company in this Agreement shall be true and correct in all material respects
on and as of the date of the making of such Loans, with the same force and
effect as if made on and as of such date and the Company shall, on the date of
each borrowing hereunder (including, without limitation, the date of the second
(and final) borrowing), furnish an Officer's Certificate with respect to
compliance by the Company with clauses (a) and (b) above; and (c) in the case of
the second (and final) borrowing hereunder, the Agent shall have received the
Notes in respect of such Loans, duly executed and delivered by the Company to
the order of each Bank and otherwise appropriately completed, and evidence of
the payment of all fees described in Section 2.03 hereof.
Section 7. Representations and Warranties. The Company
represents and warrants to the Agent and each Bank that:
7.01 Corporate Existence. Each of the Company and each of its
Subsidiaries: (a) is a corporation duly incorporated and validly existing under
the laws of the jurisdiction of its incorporation; (b) has all requisite
corporate power, and has all governmental licenses, authorizations, consents and
approvals necessary to own its assets and carry on its business as now being
conducted; and (c) is qualified to do business in all jurisdictions in which the
nature
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of the business conducted by it makes such qualification necessary. The Company
is qualified to do business in Virginia, Tennessee, North Carolina and South
Carolina, and each of the Subsidiaries listed in Schedule 1 is qualified to do
business in the states indicated for such Subsidiary in Schedule 1.
7.02 Financial Condition. The audited consolidated balance
sheet of the Company and the consolidated Subsidiaries as at January 2, 1995 and
the related consolidated statements of operations, cash flows and changes in
shareholders' equity of the Company and the consolidated Subsidiaries for the
fiscal year ended on said date, with the opinion thereon of Price Waterhouse &
Co., and the unaudited consolidated balance sheet of the Company and the
consolidated Subsidiaries as at July 2, 1995 and the related consolidated
statements of operations, cash flows and changes in Shareholders' equity of the
Company and the consolidated Subsidiaries for the six-month period ended on such
date, heretofore furnished to the Agent and each Bank, are complete and correct
and fairly present the consolidated financial condition of the Company and the
consolidated Subsidiaries as at said dates and the consolidated results of their
operations for the fiscal year and six-month period ended on said dates,
subject, in the case of such financial statements as at July 2, 1995, to normal
year-end adjustments all in conformity with generally accepted accounting
principles applied on a consistent basis. As at such dates, neither the Company
nor any of its Subsidiaries had any material contingent liabilities, liabilities
for taxes, unusual forward or long-term commitments or unrealized or anticipated
losses from any unfavorable commitments, except as referred to or reflected or
provided for in said balance sheets as at said dates and except as are not
required by generally accepted accounting principles and practices to be
disclosed on the financial statements referred to herein. Since January 2, 1995,
there has been no material adverse change in the consolidated financial
condition or operations, or the prospects or business taken as a whole, of the
Company and its consolidated Subsidiaries from that set forth in said financial
statements as at said date.
7.03 Litigation. Except as disclosed in Schedule 2 hereto,
there are no legal or arbitral proceedings or any proceedings by or before any
governmental or regulatory authority or agency, now pending or (to the best
knowledge of the Company) threatened against the Company or any Subsidiary that
could reasonably be expected to have a material adverse effect on the
consolidated financial condition, business or results of operations taken as a
whole, of the Company and its consolidated Subsidiaries or on the Company's
ability to perform its obligations hereunder and under the Notes.
7.04 No Breach. None of the execution and delivery of this
Agreement or the Notes, the consummation of the transactions herein or therein
contemplated and compliance with the terms and provisions hereof and thereof
will conflict with or result in a breach of, or require any consent under, (i)
the certificate of incorporation or bylaws of the Company, (ii) any applicable
law, rule or regulation, or any order, writ, injunction or decree of any court
or governmental authority or agency, or (iii) any agreement or other instrument
to which the Company or any Subsidiary is a party or by which its respective
assets, revenues or other properties may be bound, or constitute a default under
any such agreement or instrument, or result in the creation or imposition of any
Lien upon any of the assets, revenues or other
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properties of the Company or any Subsidiary pursuant to the terms of any such
agreement or instrument.
7.05 Corporate Action. The Company has all necessary corporate
power and authority to execute, deliver and perform its obligations under this
Agreement and the Notes and to borrow the full amount of the Commitments; and
the execution, delivery and performance by the Company of this Agreement and the
Notes and the borrowing of the full amount of the Commitments have been duly
authorized by all necessary corporate action on its part; and this Agreement has
been duly and validly executed and delivered by the Company and constitutes, and
the Notes when executed and delivered for value will constitute, the Company's
legal, valid and binding obligation, enforceable in accordance with their
respective terms, except as such enforceability may be limited by (a) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws of
general applicability affecting the enforcement of creditors' rights and (b) the
application of general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
7.06 Approvals. No authorizations, approvals or consents of,
and no filings or registrations with, any governmental or regulatory authority
or agency are necessary for the execution, delivery or performance by the
Company of this Agreement or the Notes or for the validity or enforceability
thereof.
7.07 Use of Loans. Neither the Company nor any Subsidiary is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose, whether immediate, incidental or ultimate, of
buying or carrying margin stock (within the meaning of Regulation U or X of the
Board of Governors of the Federal Reserve System) and no part of the proceeds of
the Loans hereunder will be used to buy or carry any margin stock. Without
prejudice to the foregoing, the proceeds of the initial borrowing of the Loans
will be used solely to refinance the loans outstanding under the Existing Term
Loan Agreements.
7.08 ERISA. Each of the Company and the ERISA Affiliates has
fulfilled all obligations under the minimum funding standards of ERISA and the
Code with respect to each Plan, has paid, or, in accordance with ERISA and the
Code, has accrued a liability for, all contributions requested on behalf of each
Multiemployer Plan, is in compliance in all substantial respects with all
applicable provisions of ERISA and the Code, and has not incurred any liability
to the PBGC in excess of $25,000, except for premiums due, or any Plan or
Multiemployer Plan except for claims for benefits or requirements for
contributions, in either case made in accordance with the terms of such Plan or
Multi-Employer Plan. Except as disclosed in Schedule 3 hereto, there are no
disputes relating to ERISA or employee benefits or relations to which the
Company or any of its Restricted Subsidiaries is a party and which if adversely
determined would subject the Company or any of its Restricted Subsidiaries to
any material liability.
7.09 Taxes. United States Federal income tax returns of the
Company and the Subsidiaries have been examined and closed through the fiscal
year of the Company ended December 31, 1987 (except with respect to Sunbelt
Coca-Cola Bottling Company, Inc., which
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income tax returns have been examined and closed through the fiscal year ended
December 31, 1988 and Coca-Cola Bottling Company Affiliated, Inc., which income
tax returns have been examined and closed through the fiscal year ended December
31, 1989). Each of the Company and the Subsidiaries has filed all United States
Federal income tax returns and all other material tax returns which are required
to be filed by it and has paid all taxes due pursuant to such returns or
pursuant to any assessment received by the Company or any Subsidiary. The
charges, accruals and reserves on the books of the Company and the Subsidiaries
in respect of taxes and other governmental charges are, in the opinion of the
Company, adequate.
7.10 Ownership. 29.67% of the shares of the Common Stock of
the Company issued and outstanding as of the date hereof are owned, both
beneficially and of record and free and clear of all Mortgages, directly by The
Coca-Cola Company. All such shares of Common Stock have been legally and validly
issued and are fully paid and non-assessable. Except as disclosed in Schedule 4
hereto, there are no outstanding options, warrants, rights, agreements,
contracts, calls, commitments or demands of any character obligating or
entitling either the Company or The Coca-Cola Company to sell, issue, redeem or
repurchase any Capital Stock of the Company.
7.11 Ranking. The obligations of the Company under this
Agreement and the Notes rank at least pari passu in right of payment and in all
other respects with all other Indebtedness of the Company, except that any Debt
of the Company, secured to the extent permitted by clauses (1), (2), (3), (4)(a)
or (5) of Section 8.05 hereof, and any renewal of such Debt renewed and secured
in accordance with clause (6) of said Section 8.05, may, solely with respect to
the collateral securing such Debt, rank senior in right of security to the
obligations of the Company under this Agreement and the Notes.
7.12 Investment Company Act. Neither the Company nor any of
its Subsidiaries is, nor is any of them "controlled by", an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
7.13 Public Utility Holding Company Act. Neither the Company
nor any of its Subsidiaries is a "holding company" nor is any of them a
"subsidiary company" of a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended, nor is any of them a public
utility under any applicable state law.
7.14 Compliance with Laws. To the best of the Company's
knowledge the Company is in compliance with all applicable laws, ordinances and
regulations, including, without limitation, all Environmental Laws and Health
Laws, the failure to comply with which could have a material adverse effect on
the business, operations or financial condition of the Company or any of its
Subsidiaries.
7.15 Voting Agreement. Based upon information furnished to the
Company by the parties to the Voting Agreement (as defined below in this Section
7.15), pursuant to the terms of a voting agreement among The Coca-Cola Company,
J. Frank Harrison, Jr., J. Frank Harrison, III and Reid M. Henson, in his
capacity as co-trustee of certain trusts holding shares of the
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Company's Class B Common Stock, dated January 27, 1989 (the "Voting Agreement"),
The Coca-Cola Company granted an irrevocable proxy with respect to any shares of
Class B Common Stock or Common Stock owned by The Coca-Cola Company and any
shares of Common Stock into which shares of Class B Common Stock are converted
or exchanged to J. Frank Harrison, III, for life, and thereafter to J. Frank
Harrison, Jr. Schedule 4 hereto contains a true and complete (in all material
respects) description of the Voting Agreement.
7.16 Ownership of Property; Licenses. Each of the Company and
each of its Restricted Subsidiaries has good record and marketable title to, or
a valid leasehold interest in, all of its respective Principal Properties as
shown on the financial statements referred to in Section 7.02 hereof and is
licensed to use all relevant patents, trademarks, tradenames, technical
information, technology, know-how, licenses, franchises and processes necessary
for the normal operation and business of the Company or such Subsidiary.
7.17 Nature of Business. The Company and its Restricted
Subsidiaries are engaged primarily in the business of bottling, canning,
marketing and distribution of soft drinks, primarily products of The Coca-Cola
Company and other beverages and activities related thereto (it being understood
that certain Subsidiaries of the Company organized under the laws of the State
of Delaware merely hold Bottle Contracts or Allied Bottle Contracts as their
principal asset and are not operating Subsidiaries); provided, that
notwithstanding the foregoing, the Company has acquired other businesses, assets
and properties related or incidental to the foregoing which it may operate on a
temporary or permanent basis. Not less than 80% of the annual revenues of the
Company and its consolidated Subsidiaries are derived from the bottling,
canning, marketing and distribution of products of The Coca-Cola Company and
activities related thereto.
7.18 Bottle Contracts and Allied Bottle Contracts. The
agreements identified in Schedule 5 are all of the material Bottle Contracts and
Allied Bottle Contracts to which the Company or any Restricted Subsidiary is a
party as of the date hereof. Each Bottle Contract and Allied Bottle Contract is
in full force and effect and the Company and each of its Restricted Subsidiaries
are in substantial compliance with the terms and conditions applicable to them
contained in such Bottle Contracts and Allied Bottle Contracts.
7.19 Debt Instruments. The agreements identified in Schedule 6
are all of the agreements, bonds, debentures, notes and other instruments
evidencing Debt in an original principal amount of greater than or equal to
$5,000,000 of the Company or any of its Restricted Subsidiaries and in respect
of which any of them is obligated, directly or contingently, as of the date
hereof. Each of the Company and each of its Subsidiaries is in full compliance
with the terms and conditions applicable to them contained in each such
agreement, bond, debenture, note or other instrument.
Section 8. Covenants of the Company. The Company agrees that,
so long as any Commitment is in effect and until payment in full of the Loans
hereunder, all interest thereon and all other amounts payable by the Company
hereunder and under the Notes:
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8.01 Financial Statements. The Company shall deliver to the
Agent, with a sufficient number of copies for each of the Banks:
(a) as soon as available and in any event within 60 days after
the end of each of the first three fiscal quarterly periods of each
fiscal year of the Company, unaudited consolidated statements of
income, retained earnings and changes in financial position of the
Company and the consolidated Subsidiaries for such period and for the
period from the beginning of the respective fiscal year to the end of
such period, and the related consolidated balance sheet as at the end
of such period, setting forth in each case in comparative form the
corresponding figures for the corresponding period in the preceding
fiscal year, accompanied by an Officers' Certificate (which shall
include the signature thereon of the chief financial officer of the
Company), which certificate shall state that said financial statements
fairly present the consolidated financial condition and results of
operations of the Company and the consolidated Subsidiaries in
accordance with generally accepted accounting principles, consistently
applied (except for changes to which the Company's auditors have
agreed), as at the end of, and for, such period (subject to normal
year-end audit adjustments).
(b) as soon as available and in any event within 90 days after
the end of each fiscal year of the Company, audited consolidated
statements of income, retained earnings and changes in financial
position of the Company and the consolidated Subsidiaries for such year
and the related consolidated balance sheet as at the end of such year,
setting forth in each case in comparative form the corresponding
figures for the preceding fiscal year, and accompanied by an opinion
thereon of Price Waterhouse & Co. or other comparable independent
public accountants of recognized national standing, which opinion shall
state that said financial statements fairly present the consolidated
financial condition and results of operations of the Company and the
consolidated Subsidiaries as at the end of, and for, such fiscal year,
and a certificate of such accountants stating that, in making the
examination necessary for their opinion, they obtained no knowledge,
except as specifically stated, of any Default.
(c) at the time the Company furnishes each set of financial
statements pursuant to paragraph (a) or (b) above, an Officers'
Certificate (which shall include the signature thereon of the chief
financial officer of the Company) (i) to the effect that, during the
most recent fiscal quarter reported on such financial statement, no
Default, Designated Event or Rating Decline has occurred and is
continuing (or, if any Default, Designated Event or Rating Decline has
occurred and is continuing, describing the same in reasonable detail),
(ii) as long as the Revolving Credit Agreement is in effect, stating
that the Company has during the most recent fiscal quarter complied
with all of the terms of the NationsBank Credit Agreement (including,
without limitation, any New Revolving Credit Agreement), (or if the
Company has failed to comply in any respect with any of the foregoing,
describing such failure to comply in reasonable detail) and (iii)
setting forth in reasonable detail the computations necessary to
determine whether the Company is in compliance with Sections 8.04, 8.05
and 8.06 hereof as of the end of the respective fiscal quarter or
fiscal year.
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(d) promptly upon their becoming available, copies of all
registration statements and regular periodic reports, if any, which the
Company shall have filed with the SEC (or any governmental agency
substituted therefor) or any national securities exchange and copies of
all press releases material to the Company's operations or financial
condition issued by the Company or any of its Subsidiaries.
(e) promptly upon the mailing thereof to the shareholders of
the Company generally, copies of all financial statements, reports and
proxy statements so mailed.
(f) promptly (and in any event not later than 15 days) after
the President or Chief Financial Officer of the Company knows that any
Default has occurred, a notice of such Default, Designated Event or
Rating Decline, stating that it is a "Notice of Default", "Notice of
Designated Event" or "Notice of Rating Decline", as the case may be,
and describing the same in reasonable detail.
(g) promptly (and in any event no later than 2 days) after any
officer of the Company knows of any change in (or withdrawal or
elimination of) the Company's Senior Debt Rating by either S&P or
Moody's, notice of such change.
(h) from time to time such other information regarding the
business, affairs or financial condition of the Company or any of the
Subsidiaries as the Agent, at the request of any Bank, may reasonably
request.
8.02 Corporate Existence, Etc. The Company shall, and shall
cause each Subsidiary to: (a) preserve and maintain its corporate existence and
all of its rights, privileges and franchises, provided that the Company shall
not be required to preserve any such right or franchise if the Board of
Directors shall determine that the preservation thereof is no longer desirable
in the conduct of the business of the Company and its Subsidiaries as a whole,
and provided further that the foregoing shall not prevent the Company from
engaging in a merger or consolidation permitted by Section 8.04 hereof; (b)
comply with the requirements of all applicable laws, rules, regulations and
orders of governmental or regulatory authorities (including, without limitation,
all Environmental Laws and all Health Laws) the failure to comply with which
would have a material adverse effect on the business or financial condition of
the Company and its Subsidiaries, taken as a whole; (c) pay and discharge all
taxes, assessments and governmental charges or levies imposed on it or on its
income or profits or on any of its property prior to the date on which penalties
attach thereto, except for any such tax, assessment, charge or levy the payment
of which is being contested in good faith and by proper proceedings and against
which adequate reserves are being maintained and except that the failure to pay
or discharge any such tax, assessment, governmental charge or levy in an amount
or amounts which in the aggregate would not have material adverse effect on the
business or financial condition of the Company and its Subsidiaries, taken as a
whole, shall not be deemed to be a breach of this covenant; (d) maintain all of
its Principal Properties used or useful in its business in good working order
and condition, ordinary wear and tear excepted and except to the extent that
failure to maintain any of such Principal Properties in good working order and
condition would not have a material adverse effect on the business or financial
condition of the Company and its
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Subsidiaries, taken as a whole; (e) maintain proper books and records of account
and permit representatives of the Agent and each Bank, during normal business
hours, to examine and make extracts from its books and records, to inspect its
properties, and to discuss its business and affairs with its officers, all to
the extent reasonably requested by the Agent or such Bank with reasonable
notice; and (f) keep insured by reputable insurers all property of a character
usually insured by corporations of similar size engaged in the same or similar
business against loss or damage of the kinds and in the amounts customarily
insured against by such corporations and carry such other insurance as is
usually carried by such corporations.
8.03 Use of Proceeds. The Company shall use the proceeds of
the Loans made as part of the initial borrowing hereunder solely to refinance
the entire principal amount of the loans outstanding under the Existing Term
Loan Agreements and shall use the proceeds of the Loans made as a part of any
subsequent borrowing solely for the Company's general corporate purposes (which
shall include, without limitation, the repurchase of debt securities outstanding
on the date of this Agreement), and in any event all proceeds of the Loans shall
be used solely in compliance with Regulations G, T, U and X of the Board of
Governors of the Federal Reserve System.
8.04 Mergers and Consolidations. The Company shall not
consolidate with or merge into any other Person or convey or transfer all or
substantially all of its assets, revenues and other properties as an entirety to
any Person, whether in a single transaction or in a series of related
transactions, unless:
(a) the Person formed by such consolidation or into
which the Company is merged or the Person which acquires by conveyance
or transfer the assets, revenues and other properties of the Company
substantially as an entirety (the "Surviving Entity") shall be a
corporation organized and existing under the laws of the United States
of America, any State thereof or the District of Columbia and shall
expressly assume, by an agreement supplemental hereto, executed and
delivered to the Agent for the benefit of the Agent and the Banks in
form satisfactory to the Agent, the due and punctual payment of the
principal of and interest on all the Loans and Notes and all other
amounts payable under this Agreement and the Notes and the performance
and observance of every covenant of this Agreement on the part of the
Company to be performed or observed;
(b) immediately after giving effect to such
transaction, no Default or Event of Default shall have occurred and be
continuing, nor shall any Rating Decline be likely to occur as an
immediate consequence of such transaction (in the reasonable judgment
of the Company's Board of Directors) and, without limiting the
foregoing, The Coca-Cola Company shall directly own and continue to
own, both beneficially and of record and free and clear of all
Mortgages, and control at least 20% of the Common Stock of the
Surviving Entity; and
(c) the Company has delivered to the Agent for the
benefit of the Agent and the Banks an Officers' Certificate and an
Opinion of Counsel in form and substance reasonably satisfactory to the
Agent, each stating that such consolidation,
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merger, conveyance or transfer and such supplemental indenture comply
with this Section 8.04 and that all conditions precedent herein
provided for relating to such transaction have been complied with.
Anything in this Section 8.04 to the contrary notwithstanding,
no such consolidation, merger, conveyance or transfer shall be entered into or
made by the Company with or to another corporation which has outstanding any
obligations secured by a Mortgage if, as a result of such consolidation, merger,
conveyance or transfer, any Principal Property of the Company or any Restricted
Subsidiary would be subjected to the lien of such Mortgage and such Mortgage is
not expressly excluded from the restrictions or permitted by the provisions of
Section 8.05 unless simultaneously therewith or prior thereto effective
provision shall be made for the securing of all the Loans and the Notes
(together with, if the Company shall so determine, any other Debt of the Company
now existing or hereafter created which is not subordinated to the Loans and the
Notes), equally and ratably with (or, at the option of the Company, prior to)
the obligations secured by such Mortgage by a lien upon such Principal Property.
8.05 Restrictions on Debt. The Company will not itself, and
will not permit any Subsidiary to, incur, issue, assume or guarantee any Debt,
whether or not evidenced by negotiable instruments or securities, or any notes,
bonds, debentures or other similar evidences of indebtedness for money borrowed,
secured by any Mortgage on any Principal Property of the Company or any
Subsidiary, or on any shares of Capital Stock or Debt of any Subsidiary, without
effectively providing that the Loans and the Notes (together with, if the
Company shall so determine, any other Debt of the Company or such Subsidiary
then existing or thereafter created which is not subordinate to the Loans and
the Notes) shall be secured equally and ratably with (or, at the option of the
Company, prior to) such secured Debt, so long as such secured Debt shall be so
secured, and will not permit any Subsidiary to, incur, issue, assume or guaranty
any unsecured Debt or to issue any Preferred Stock, in each instance unless the
aggregate amount of (A) all such Debt, (B) the aggregate preferential amount to
which such Preferred Stock would be entitled on any involuntary distribution of
assets and (C) Attributable Debt of the Company and its Subsidiaries in respect
of sale and leaseback transactions (as defined in Section 8.06) would not exceed
10% of Consolidated Net Tangible Assets; provided, however, that this Section
8.05 shall not apply to, and there shall be excluded from Debt in any
computation under this Section 8.05:
(1) Debt secured by Mortgages on property of, or on
any shares of Capital Stock or Debt of, any corporation, and unsecured
Debt of any corporation, existing at the time such corporation becomes
a Subsidiary;
(2) Debt secured by Mortgages in favor of the Company
or any Subsidiary and unsecured Debt payable to the Company or any
Subsidiary;
(3) Debt secured by Mortgages in favor of the United
States of America, or any agency, department or other instrumentality
thereof, to secure progress, advance or other payments pursuant to any
contract or provision of any statute;
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(4) (a) Debt secured by Mortgages on property
(including, without limitation, shares of Capital Stock or Debt of any
Subsidiary held by the Company existing at the time of acquisition
thereof (including, without limitation, acquisition through merger or
consolidation)) or to secure the payment of all or any part of the
purchase price or construction cost thereof or to secure any Debt
incurred prior to, at the time of, or within 120 days after, the
acquisition of such property (or shares of Capital Stock or Debt) or
the completion of any such construction for the purpose of financing
all or any part of the purchase price or construction cost thereof, and
(b) unsecured Debt incurred to finance the acquisition of any property
(or shares of Capital Stock or Debt) other than shares of Capital Stock
or Debt of the Company, or to finance construction on property incurred
prior to, at the time of, or within 120 days after the later of the
acquisi tion of such property or the completion of construction
thereon;
(5) Debt secured by Mortgages securing obligations
issued by a state, territory or possession of the United States, or any
political subdivision of any of the foregoing or the District of
Columbia, to finance the acquisition of or construction on property,
and on which the interest is not, in the opinion of tax counsel of
recognized standing or in accordance with a ruling issued by the
Internal Revenue Service, includable in gross income of the holder by
reason of Section 103(a)(1) of the Code (or any successor to such
provision) as in effect at the time of the issuance of such
obligations; and
(6) any extensions, renewal or replacement (or
successive extensions, renewals or replacements), as a whole or in
part, of any Debt referred to in the foregoing clauses (1) to (5),
inclusive; provided, that (i) such extension, renewal or replacement,
in the case of Debt secured by a Mortgage, shall be limited to all or a
part of the same property, shares of Capital Stock or Debt that secured
the Mortgage extended, renewed or replaced (plus improvements on such
property), and (ii) the Debt secured by such Mortgage at such time is
not increased;
and provided, further, that this Section 8.05 shall not apply to any issuance of
Preferred Stock by a Subsidiary to the Company or another Subsidiary, provided
that such Preferred Stock shall not thereafter be transferable to any Person
other than the Company or a Subsidiary.
8.06 Restrictions on Sales and Leasebacks. The Company will
not itself, and will not permit any Restricted Subsidiary to, enter into any
transaction after the date hereof with any bank, insurance company, lender or
other investor, or to which any such bank, insurance company, lender or investor
is a party, providing for the leasing by the Company or a Restricted Subsidiary
of any Principal Property which has been or is to be sold or transferred by the
Company or such Restricted Subsidiary to such bank, insurance company, lender or
investor, or to any person to whom funds have been or are to be advanced by such
bank, insurance company, lender or investor on the security of such Principal
Property (herein referred to as a "sale and leaseback transaction") unless,
after giving effect thereto, the aggregate amount of all Attributable Debt with
respect to such transactions plus all Debt to which Section 8.05 is applicable
would not exceed 10% of Consolidated Net Tangible Assets. This covenant shall
not
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apply to, and there shall be excluded from Attributable Debt in any computation
under this Section 8.06, Attributable Debt with respect to any sale and
leaseback transaction if:
(1) the lease in such sale and leaseback transaction
is for a period, including renewal rights, of not in excess of three
years, or
(2) the Company or a Restricted Subsidiary, within
180 days after the sale or transfer shall have been made by the Company
or by a Restricted Subsidiary, applies an amount not less than the
greater of the net proceeds of the sale of the Principal Property
leased pursuant to such arrangement or the fair market value of the
Principal Property so leased at the time of entering into such
arrangement (as determined in any manner approved by the Board of
Directors) to (a) the retirement of Funded Debt of the Company ranking
on a parity with the Loans or the retirement of Funded Debt of a
Restricted Subsidiary; provided, however, that the amount to be applied
to the retirement of such Funded Debt of the Company or a Restricted
Subsidiary shall be reduced by (x) the principal amount of the Loans or
Notes (or other notes or debentures constituting such Funded Debt) that
are prepaid in accordance with Section 3.03 hereof or are delivered
within such 180-day period to the applicable trustee for retirement and
cancellation and (y) the principal amount of such Funded Debt, other
than items referred to in the preceding clause (x), voluntarily retired
by the Company or a Restricted Subsidiary within 180 days after such
sale; and provided, further, that, notwithstanding the foregoing, no
retirement referred to in this clause (a) may be effected by payment at
maturity or pursuant to any mandatory sinking funds payment or any
mandatory prepayment provision, or (b) the purchase of other property
which will constitute a Principal Property having a fair market value,
in the opinion of the Board of Directors of the Company, at least equal
to the fair market value of the Principal Property leased in such sale
and leaseback transaction less the amount of any Funded Debt retired
pursuant to clause (a) of this subsection, or
(3) such sale and leaseback transaction is entered
into prior to, at the time of, or within 180 days after the later of
the acquisition of the Principal Property or the completion of
construction thereon, or
(4) the lease in such sale and leaseback transaction
secures or relates to obligations issued by a state, territory or
possession of the United States, or any polit ical subdivision of any
of the foregoing, or the District of Columbia, to finance the
acquisition of or construction on property, and on which the interest
is not, in the opinion of tax counsel of recognized standing or in
accordance with a ruling issued by the Internal Revenue Service,
includable in gross income of the holder by reason of Section 103(a)(1)
of the Code (or any successor to such provision) as in effect at the
time of the issuance of such obligations, or
(5) such sale and leaseback transaction is entered
into between the Company and a Restricted Subsidiary or between
Restricted Subsidiaries.
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8.07 Ranking. The Company will ensure that at all times its
obligations under this Agreement and the Notes continue to rank at least pari
passu in right of payment and in all other respects with all other Indebtedness
of the Company, except that any Debt of the Company, secured to the extent
permitted by clauses (1), (2), (3), (4)(a) or (5) of Section 8.05 hereof, and
any renewal of such Debt renewed and secured in accordance with clause (6) of
said Section 8.05, may, solely with respect to the collateral securing such
Debt, rank senior in right of security to the obligations of the Company under
this Agreement and the Notes.
8.08 Business. The Company will not, and will not permit any
of its Restricted Subsidiaries to, engage primarily in any business other than
that described in the first sentence of Section 7.17 hereof and the Company
shall, and shall cause each of its Restricted Subsidiaries to, maintain in full
force and effect each Bottle Contract disclosed in Schedule 5 hereof; provided,
however, that the Company may, in the normal course of its business, modify,
amend or replace any such Bottle Contract or any term thereof if, in the
discretion of the Company's Board of Directors, such modification, amendment or
replacement is desirable and in furtherance of the business of the Company and
would not have a material adverse effect on the business or financial condition
of the Company and its Subsidiaries, taken as a whole; and, provided further,
that notwithstanding the terms of this Section 8.08 the Company may, through
acquisition, either temporarily or permanently, acquire other businesses, assets
and properties, related or incidental to its business described in the first
sentence of Section 7.17 hereof.
8.09 New Revolving Credit Agreement. At a reasonable time
prior to the execution thereof, the Company shall deliver to the Agent and the
Banks a copy of any proposed New Revolving Credit Agreement.
Section 9. Events of Default. If one or more of the following
events (herein called "Events of Default") shall occur and be continuing:
(a) The Company shall fail to pay any principal of the Loans
or Notes when due; or the Company shall fail to pay any interest or any
other amount payable by it under this Agreement or under the Notes and
such failure shall not be fully remedied within 30 days after the date
when due; or
(b) The Company or any Restricted Subsidiary shall fail to pay
when due any principal of or interest on any bond, debenture, note or
other Indebtedness (other than under this Agreement) having an
aggregate principal amount of $1,000,000 (or its equivalent in other
currencies) or more and such failure shall continue after the expiry of
any grace period; or any event of default specified in any bond,
debenture, note, agreement, indenture or other document evidencing or
relating to any such Indebtedness shall occur if the effect of such
event is to cause, or to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or
holders) to cause, such Indebtedness to become due prior to its stated
maturity; or any Indebtedness of the Company or any of its Restricted
Subsidiaries is declared to be or otherwise becomes due prior to its
stated maturity; provided, however, that if such default or
acceleration under such evidence of Indebtedness, indenture or other
instrument shall be cured by the
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Company, or be waived by the holders of such indebtedness, in each case
as may be permitted by such evidence of Indebtedness, indenture or
other instrument, the Event of Default hereunder by reason of such
default shall be deemed likewise to have been thereupon cured or waived
; provided, further, that, for purposes of this Section 9(b), the term
"Indebtedness" shall in any event include the NationsBank Revolving
Credit Agreement, irrespective of the aggregate outstanding principal
amount of loans outstanding thereunder; or
(c) Any representation or warranty made herein by the Company
or any officer of the Company or in any certificate furnished to the
Agent or any Bank pursuant to the provisions hereof or thereof, shall
have been false or misleading as of the time made or furnished in any
material respect; or
(d) The Company shall default in the performance of any of its
obligations under Section 8.01(f), 8.02(a), 8.03 or 8.04, hereof; or
the Company shall default in the performance of any of its other
obligations in this Agreement and such default shall continue
unremedied for a period of 60 days after written notice (by registered
or certified mail) of such default is given to the Company; or
(e) The Company or any Restricted Subsidiary shall (i) apply
for or consent to the appointment of, or the taking of possession by, a
receiver, custodian, trustee or li quidator of itself or of all or a
substantial part of its property, (ii) make a general assignment for
the benefit of its creditors, (iii) commence a voluntary case under any
relevant bankruptcy code or similar law (as now or hereafter in
effect), (iv) file a petition seeking to take advantage of any other
law relating to bankruptcy, insolvency, reorganization, winding-up, or
composition or readjustment of debts, (v) fail to con trovert in a
timely and appropriate manner, or acquiesce in writing to, any petition
filed against it in an involuntary case under any relevant bankruptcy
code or similar law (as now or hereafter in effect), or (vi) admit in
writing its inability to pay its debts generally as they become due, or
(vii) take any corporate action for the purpose of effecting any of the
foregoing; or
(f) A proceeding or case shall be commenced, without the
application or consent of the Company or any Restricted Subsidiary, in
any court of competent jurisdiction, seeking (i) its liquidation,
reorganization, dissolution or winding-up, or the composition or
readjustment of its debts, (ii) the appointment of a trustee, receiver,
custodian, liquidator or the like of the Company or such Subsidiary or
of all or any substantial part of its assets, or (iii) similar relief
in respect of the Company or such Subsidiary under any law relating to
bankruptcy, insolvency, reorganization, winding-up, or composition or
adjustment of debts, and such proceeding or case shall continue
undismissed, or an order, judgment or decree approving or ordering any
of the foregoing shall be entered and continue unstayed and in effect,
for a period of 60 days; or an order for relief against the Company or
any Subsidiary shall be entered in an involuntary case under any
relevant bankruptcy code or similar law (as now or hereafter in
effect); or
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(g) A final judgment or judgments for the payment of money in
excess of $10,000,000 in the aggregate shall be rendered by a court or
courts against the Company and/or any Restricted Subsidiary and the
same shall not be discharged (or bona fide negotiations in good faith
shall not be in progress seeking such discharge), or a stay of
execution thereof shall not be procured, within 60 days from the date
of entry thereof and the Company or the relevant Subsidiary shall not,
within said period of 60 days, or such longer period during which
execution of the same shall have been stayed, appeal there from and
cause the execution thereof to be stayed during such appeal; or
(h) The Coca-Cola Company shall fail to directly own, both
beneficially and of record and free and clear of all Mortgages, and
control at least 20% of the Common Stock of the Company and such
failure shall continue unremedied for a period of 90 days after the
date on which such failure occurred; or
(i) Any Trigger Event shall occur and shall continue for a
period of 40 days after the occurrence thereof;
THEREUPON: (1) in the case of an Event of Default other than one referred to in
clause (e), (f), or (i) of this Section 9, the Agent may, and upon instructions
from Banks holding 25% of the aggregate outstanding principal amount of the
Loans shall, by written notice to the Company, cancel the Commitments and/or
declare the principal amount then outstanding of and the accrued interest on the
Loans and the Notes and all other amounts payable by the Company hereunder and
under the Notes to be forthwith due and payable, whereupon such amounts shall be
immediately due and payable without presentment, demand, protest or other
formalities of any kind (other than the notice expressly provided for above in
this subclause (1)), all of which are hereby expressly waived by the Company;
and (2) in the case of an Event of Default referred to in clause (e) or (f) of
this Section 9, the Commitments shall be automatically canceled and the
principal amount then outstanding of, and the accrued interest on, the Loans and
all other amounts payable by the Company hereunder and under the Notes shall
become automatically immediately due and payable without presentment, demand,
protest or other formalities of any kind, all of which are hereby expressly
waived by the Company; and (3) in the case of an Event of Default referred to in
clause (i) of this Section 9, on the date 80 days after notice by the Agent to
the Company of the occurrence of such Event of Default, whether or not such
Event of Default shall then be continuing, the Commitments shall be
automatically cancelled and the principal amount then outstanding of, and
accrued interest on, the Loans and all other amounts payable by the Company
hereunder and under the Notes shall become automatically due and payable without
presentment, demand, protest or other formalities of any kind (other than the
notice expressly provided for above in this subclause (3)), all of which are
hereby expressly waived by the Company. In the event that the Agent gives notice
to the Company of the occurrence of an Event of Default referred to in clause
(i) of this Section 9 and, during the 80-day period following the giving of such
notice, another Event of Default shall occur under any of the clauses of this
Section 9, the Agent and the Banks shall have all remedies available to them in
respect of such subsequent Event of Default under subclause (1) or (2) of the
preceding sentence, under applicable law or otherwise without regard to such
80-day period.
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At any time after such a declaration of acceleration (but not
after an acceleration pursuant to clause (2) or (3) of the preceding sentence)
has been made and before a judgment or decree for payment of the money due has
been obtained by the Agent or any Bank, the Banks, by written notice to the
Company and the Agent, may (but shall not be obligated to) rescind and annul
such declaration and its consequences if:
(1) the Company has paid
(A) all overdue interest on all Loans and
Notes,
(B) to the extent that payment of such
interest is lawful, interest upon overdue principal and
interest at the rate or rates prescribed therefor in this
Agreement, and
(C) all sums paid or advanced by the Agent
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Agent, its agents and
counsel;
and
(2) all Events of Default, other than the non-payment
of principal which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 11.04
hereof.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section 10. The Agent.
10.01 Appointment, Powers and Immunities. Each Bank hereby
irrevocably appoints and authorizes the Agent to act as its agent hereunder with
such powers as are specifi cally delegated to the Agent by the terms of this
Agreement, together with such other powers as are reasonably incidental thereto.
The Agent (which term as used in this sentence and in Section 10.05 and the
first sentence of Section 10.06 hereof shall include reference to its
affiliates; and its own and its affiliates' officers, directors, employees and
agents): (a) shall have no duties or responsibilities except those expressly set
forth in this Agreement, and shall not by reason of this Agreement be a trustee
or other fiduciary for any Bank; (b) shall not be responsible to the Banks for
any recitals, statements, representations or warranties contained in this
Agreement, or in any certificate or other document referred to or provided for
in, or received by any of them under, this Agreement, or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement, any Note or any other document referred to or provided for herein or
therein or for any failure by the Company or any other Person to perform any of
its obligations hereunder or thereunder; (c) shall not be required to initiate
or conduct any litigation or collection proceedings hereunder; and (d) shall not
be responsible for any action taken or omitted to be taken by it hereunder or
under any other document or instrument referred to or provided for herein or in
connection herewith, except for its own gross negligence or willful mis-
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conduct. The Agent may employ agents and attorneys-in-fact and shall not be
responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it in good faith. The Agent may deem and treat the
payee of any Note as the holder thereof for all purposes hereof unless and until
a written notice of the assignment or transfer thereof shall have been filed
with the Agent.
10.02 Reliance by Agent. The Agent shall be entitled to rely
upon any certification, notice or other communication (including any thereof by
telephone, telex, telegram, facsimile or cable) believed by it to be genuine and
correct and to have been signed or sent by or on behalf of the proper Person or
Persons, and upon advice and statements of legal counsel, independent
accountants and other experts selected by the Agent. As to any matters not
expressly provided for by this Agreement, the Agent shall in all cases be fully
protected in acting, or in refraining from acting, hereunder in accordance with
instructions signed by the Required Banks, and such instructions of the Required
Banks and any action taken or failure to act pursuant thereto shall be binding
on all of the Banks.
10.03 Defaults. The Agent shall not be deemed to have
knowledge of the occurrence of a Default (other than the nonpayment of principal
of or interest on the Loans) unless the Agent has received notice from a Bank or
the Company specifying such Default and stating that such notice is a "Notice of
Default". In the event that the Agent receives such a notice of the occurrence
of a Default, the Agent shall give prompt notice thereof to the Banks (and shall
give each Bank prompt notice of each such nonpayment). The Agent shall (subject
to Section 10.07 hereof) take such action with respect to such Default as shall
be directed by the Required Banks, provided that, unless and until the Agent
shall have received such directions, the Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, with respect to such
Default as it shall deem advisable in the best interest of the Banks.
10.04 Rights as a Bank. With respect to the Commitment, Loans
and Notes held by it, LTCB (and any, successor acting as Agent) in its capacity
as a Bank hereunder shall have the same rights and powers hereunder as any,
other Bank and may exercise the same as though it (or its affiliates) were not
acting as the Agent, and the term "Bank" or "Banks" shall, unless the context
otherwise indicates, include the Agent in its individual capacity. LTCB (and any
successor acting as Agent) and its affiliates may (without having to account
therefor to any Bank) accept deposits from, lend money to and generally engage
in any kind of banking, trust or other business with the Company (and any of its
affiliates) as if it (or its affiliate) were not acting as the Agent, and LTCB
and its affiliates may accept fees and other consideration from the Com pany for
services in connection with this Agreement or otherwise without having to
account for the same to the Banks.
10.05 Indemnification. The Banks agree to indemnify the Agent
(to the extent not reimbursed under Section 11.03 hereof, but without limiting
the obligations of the Company under said Section 11.03), ratably in accordance
with the aggregate principal amount of the Loans held by the Banks (or, if no
Loans are at the time outstanding, ratably in accordance with their respective
Commitments, or, if no Loans or Commitments are then outstanding, ratably in
accordance with the principal amount of the Loans held by each of them
immediately prior to the
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payment thereof in full), for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind and nature whatsoever which may be imposed on, incurred by or
asserted against the Agent in any way relating to or arising out of this
Agreement or any other documents contemplated by or referred to herein or the
transactions contemplated hereby (including, without limitation, the costs and
expenses which the Company is obligated to pay under Section 11.03 hereof) or
the enforcement of any of the terms hereof or of any such other documents,
provided that no Bank shall be liable for any of the foregoing to the extent
they arise from the gross negligence or willful misconduct of the party to be
indemnified.
10.06 Non-Reliance on Agent and other Banks. Each Bank agrees
that it has, independently and without reliance on the Agent or any other Bank,
and based on such documents and information as it has deemed appropriate, made
its own credit analysis of the Company and its Affiliates and decision to enter
into this Agreement and that it will, independently and without reliance upon
the Agent or any other Bank, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under this Agreement. The Agent shall
not be required to keep itself informed as to the performance or observance by
the Company of this Agreement or any other document referred to or provided for
herein or to inspect the properties or books of the Company or any of its
Affiliates. Except for notices, reports and other documents and information
expressly required to be furnished to the Banks by the Agent hereunder, the
Agent shall not have any duty or responsibility to provide any Bank with any
credit or other information concerning the affairs, financial condition or
business of the Company or any of its Affiliates which may come into the
possession of the Agent or any of its affiliates.
10.07 Failure to Act. Except for action expressly required of
the Agent hereunder, the Agent shall in all cases be fully justified in failing
or refusing to act hereunder unless it shall be indemnified to its satisfaction
by the Banks against any and all liabilities and expenses which may be incurred
by it by reason of taking or continuing to take any such action.
10.08 Resignation or Removal of Agent. Subject to the
appointment and acceptance of a successor Agent as provided below, the Agent may
resign at any time by giving notice thereof to the Banks and the Company and the
Agent may be removed at any time with or without cause by the Required Banks.
Upon any such resignation or removal, the Required Banks shall have the right,
with the consent of the Company (which consent shall not be unreasonably
withheld), to appoint a successor Agent. If no successor Agent shall have been
so appointed by the Required Banks and shall have accepted such appointment
within 30 days after the retiring Agent's giving of notice of resignation or the
Required Banks' removal of the retiring Agent, then the retiring Agent may, on
behalf of the Banks, appoint a successor Agent, which shall be a bank which has
an office in New York, New York and which has a combined capital and surplus of
at least $100,000,000. Upon the acceptance of any appointment as Agent hereunder
by a successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's
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resignation or removal hereunder as Agent, the provisions of this Section 10
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Agent.
10.09 Agent's Office. The Agent acts initially through the New
York office of LTCB Trust Company, but may hereafter change the office at which
it performs its functions as Agent to any other office of itself or any of its
affiliates (including, without limitation, to any office of LTCB) by giving
prompt subsequent notice to the Company and the Banks.
Section 11. Miscellaneous.
11.01 Waiver. No failure on the part of the Agent or any Bank
to exercise and no delay in exercising, and no course of dealing with respect
to, any right, power or privilege under this Agreement or the Notes shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege under this Agreement or the Notes preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege. The remedies provided herein are cumulative and not exclusive of any
remedies provided by law.
11.02 Notices. All notices and other communications provided
for herein (including, without limitation, any modifications of, or waivers or
consents under, this Agreement or the Notes) shall be given or made by telex,
telecopy, telegraph, cable or in writing and telexed, telecopied, telegraphed,
cabled, mailed or delivered to the intended recipient at the "Address for
Notices" specified below its name on the signature pages hereof; or, as to any
party, at such other address as shall be designated by such party in a notice to
the other parties. Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given when transmitted by telex
or telecopier, delivered to the telegraph or cable office or personally
delivered or, in the case of a mailed notice, upon receipt, in each case given
or addressed as aforesaid; provided that any such communication which is not
received during normal business hours of the recipient shall be deemed to be
duly given at the opening of business on its next business day.
11.03 Expenses. Whether or not any Loan is made hereunder, the
Company agrees, promptly upon request by the Agent or any Bank therefor from
time to time, to pay or reimburse the Agent and each Bank for paying: (a) all
reasonable out-of-pocket costs and expenses of the Agent (including, without
limitation, the reasonable fees and expenses of Christy & Viener, special New
York counsel to the Agent and the Banks, and of all other outside counsels to
the Agent and the Banks) in connection with (i) the preparation, execution and
delivery of this Agreement and the Notes and the making of the Loans hereunder
and the consummation of the transactions contemplated hereby and thereby, and
any costs or expenses of the Agent in connection with the syndication of this
Agreement (whether before or after the date of the initial borrowing hereunder)
and (ii) any amendment, modification or waiver of any of the terms of this
Agreement or the Notes; (b) all reasonable out-of-pocket costs and expenses of
the Agent and each Bank (including, without limitation, the reasonable fees and
expenses of all outside counsels to the Agent or such Bank and all court costs)
in connection with the enforcement of or exercise or preservation of any rights
of the Agent or such Bank under this
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Agreement or the Notes; (c) all transfer, stamp, documentary or other similar
taxes, assessments or charges levied by any governmental or revenue authority in
any jurisdiction in respect of this Agreement or the Notes or any other document
referred to herein; (d) all normal administrative costs and expenses of the
Agent incident to the performance of its agency duties hereunder; and (e) all
reasonable fees and expenses of counsel to the Agent and the Banks in connection
with the syndication (whether by assignment or participation), after the date on
which the Loans are made, of its Commitment and Loans under this Agreement. The
Company hereby agrees to indemnify the Agent and each Bank and its respective
directors, officers, employees, counsels and agents from, and hold each of them
harmless against, any and all losses, liabilities, claims, damages or expenses
incurred by any of them arising out of or by reason of any investigation or
litigation or other proceedings (including any threatened investigation or
litigation or other proceedings) relating to any actual or proposed use by the
Company or any of its Affiliates of the proceeds of the Loans, including,
without limitation, the reasonable fees and expenses of counsel incurred in
connection with any such investigation or litigation or other proceedings (but
excluding any such losses, liabilities, claims, damages or expenses incurred
solely by reason of the gross negligence or willful misconduct of the Person to
be indemnified).
11.04 Amendments. Any provision of this Agreement may be
modified, amended or (unless 25% of the Banks shall theretofore have given
notice to the Agent of their instructions to cancel the Commitments and/or
declare all amounts due hereunder immediately due and payable pursuant to
Section 9 hereof) waived, but only in writing signed by the Company, the Agent
and the Required Banks; provided that any modification, amendment or waiver that
would (a) extend the date fixed for the payment of principal of or interest on
any of the Loans or any other amounts payable hereunder or under the Notes, (b)
reduce any payment of principal of or interest on any of the Loans or any other
amounts payable hereunder or under the Notes, (c) reduce the rate at which
interest is payable hereunder or under the Notes, or (d) change this Section
11.04 or the definition of "Required Banks" in Section 1.01 hereof or otherwise
change the number of parties hereto whose approval or consent is necessary for
any modification, amendment or waiver of any of the terms of, or any other
action under, this Agreement or the Notes, shall be in writing signed by the
Company, the Agent and all of the Banks. The Agent or any Bank may grant or
withhold its consent to any requested modification, amendment or waiver at its
sole discretion.
11.05 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
11.06 Assignments and Participations.
(a) The Company may not assign its rights or obligations
hereunder or under the Notes without the prior written consent of the Agent and
all of the Banks.
(b) Any Bank may assign to any bank or other financial
institution all or any portion of its Commitment, Loans or Notes without the
consent of the Company or the Agent; provided that any assignment of less than
the full Commitment, Loans or Notes held by a Bank shall be in an aggregate
principal amount of not less than $10,000,000. Prior and as a condition
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precedent to the effectiveness of any such assignment, the Bank that is the
assignor of such assignment shall pay to the Agent for its own account a
non-refundable recordation fee of $3,000. Each assignee shall have, to the
extent of such assignment (unless otherwise provided in such assignment), the
obligations, rights and benefits of a "Bank" hereunder holding the Commitment
and Loans (or portions thereof) assigned to it.
(c) Any Bank may sell to one or more other banks or financial
institutions a participation in all or any part of its Commitment, Loans and
Notes. Such Bank shall remain responsible for its performance under this
Agreement, shall remain the holder of its Note for all purposes under this
Agreement, and the Agent and the Company shall continue to deal solely and
directly with such Bank, in connection with such Bank's rights and obligations
under this Agreement. No participant shall be entitled to receive any greater
payment pursuant to Section 5.01 or 5.05 hereof than the Bank selling such
participant's participation would have been entitled to receive with respect to
the rights subject to the relevant participation. The participant's rights
against the Bank selling such participant's participation in respect of such
participation shall be those set forth in the agreement (the "Participation
Agreement") executed by such Bank in favor of such participant. In no event
shall a Bank grant a participation that conveys to the participant the right to
vote under this Agreement, except that a Bank may agree in the Participation
Agreement that it will not, without the consent of the participant, agree to (i)
the extension of any date fixed for the payment of principal of or interest on
the Loan or other amounts payable hereunder or under the Notes held by such
Bank, (ii) the reduction of any payment of principal thereof or other amounts
payable hereunder or under the Notes held by such Bank, or (iii) the reduction
of the rate at which interest is payable thereon to a level below the rate at
which the participant is entitled to receive interest or fee (as the case may
be) in respect of such participation.
(d) Any Bank may furnish any information concerning the
Company or any of its Subsidiaries or other Affiliates in the possession of such
Bank (other than, without the prior written consent of the Company, any
information with respect to Piedmont Coca-Cola Bottling Partnership) from time
to time to assignees and participants (including prospective assignees and
participants).
(e) In addition to the assignments and participations
permitted under the foregoing provisions of this Section 11.06, any Bank may
assign or pledge all or any portion of its Loans and its Notes to any Federal
Reserve Bank as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System or any operating circular issued by such
Federal Reserve Bank.
11.07 Survival. Without limiting the survival of any other
provisions of this Agreement or the Notes, the obligations of the Company under
Sections 5.01, 5.04, 5.05 and 11.03 hereof and of the Banks under Section 10.05
hereof shall survive the repayment of the Loans and the termination of the
Commitments.
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11.08 Captions. Captions and section headings appearing herein
are included solely for convenience of reference and are not intended to affect
the interpretation of any provision of this Agreement.
11.09 Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument and any of the parties hereto may execute this Agreement by
signing any such counterpart.
11.10 GOVERNING LAW. THIS AGREEMENT AND THE NOTES
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
11.11 JURISDICTION AND SERVICE OF PROCESS. (A) ANY SUIT,
ACTION OR PROCEEDING AGAINST THE COMPANY WITH RESPECT TO THIS
AGREEMENT, THE LOANS OR THE NOTES OR ANY JUDGMENT ENTERED BY ANY COURT
IN RESPECT THEREOF MAY BE BROUGHT IN THE SUPREME COURT OF THE STATE OF
NEW YORK, COUNTY OF NEW YORK, IN THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK, OR IN ANY STATE OR FEDERAL COURT
SITTING IN NORTH CAROLINA (COLLECTIVELY, THE "SUBJECT COURTS"), AS THE
AGENT OR ANY BANK MAY ELECT IN ITS SOLE DISCRETION AND THE COMPANY
HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF EACH OF
THE SUBJECT COURTS FOR THE PURPOSE OF ANY SUCH SUIT, ACTION, PROCEEDING
OR JUDGMENT. THE COMPANY HEREBY AGREES THAT SERVICE OF ALL WRITS,
PROCESS AND SUMMONSES IN ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
THE STATE OF NEW YORK MAY BE MADE UPON CT CORPORATION SYSTEM (THE "NEW
YORK PROCESS AGENT"), CURRENTLY LOCATED AT 1633 BROADWAY, NEW YORK, NEW
YORK 10019. THE COMPANY HEREBY IRREVOCABLY APPOINTS THE NEW YORK
PROCESS AGENT AS ITS AGENT TO ACCEPT SERVICE OF ANY AND ALL SUCH WRITS,
PROCESS OR SUMMONSES, AND AGREES THAT THE FAILURE OF SUCH PROCESS AGENT
TO GIVE NOTICE OF ANY SUCH SERVICE TO THE COMPANY SHALL NOT IMPAIR OR
AFFECT THE VALIDITY OF SUCH SERVICE OR OF ANY JUDGMENT BASED THEREON.
THE COMPANY HEREBY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS IN ANY SUIT, ACTION OR PROCEEDING IN ANY OF THE SUBJECT COURTS
BY THE MAILING THEREOF BY THE AGENT OR ANY BANK BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO THE COMPANY ADDRESSED AS PROVIDED
IN SECTION 11.02 HEREOF. NOTHING HEREIN SHALL IN ANY WAY BE DEEMED TO
LIMIT THE ABILITY OF THE AGENT OR ANY BANK TO SERVE ANY WRITS, PROCESS
OR SUMMONSES IN ANY OTHER MANNER PERMITTED BY APPLICABLE
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LAW OR TO BRING PROCEEDINGS AGAINST THE COMPANY IN ANY COMPETENT COURT
OF ANY OTHER JURISDICTION OR JURISDICTIONS, AND IN SUCH MANNER, AS MAY
BE PERMITTED BY APPLICABLE LAW.
(B) THE COMPANY HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT IT MAY NOW OR HEREAFTER HAVE
TO TRIAL BY JURY IN, AND ANY OBJECTION WHICH IT NOW OR HEREAFTER MAY
HAVE TO THE LAYING OF VENUE OF, ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF THIS AGREEMENT OR ANY NOTE BROUGHT IN ANY OF THE SUBJECT COURTS,
AND HEREBY FURTHER IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
ANY OF THE SUBJECT COURTS HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
11.12 Severability. Any provision of this Agreement or the
Notes that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or thereof
or affecting the validity or enforceability of such provision in any other
jurisdiction.
11.13 Waiver of Stay or Extension Law. The Company covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the perfor mance of this
Agreement or the Notes; and the Company (to the extent that it may lawfully do
so) hereby expressly waives all benefit or advantage of any such law and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Agent or any Bank,
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<PAGE>
but will suffer and permit the execution of every such power as though no such
law had been enacted.
The parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
COCA-COLA BOTTLING CO. CONSOLIDATED
By
Title:
Address for Notices:
1900 Rexford Road
Charlotte, North Carolina 28211
Telecopier No.: (704) 551-4451
Telephone No.: (704) 551-4565
Attention: Ms. Brenda B. Jackson
with a copy to:
Witt, Gaither & Whitaker
1100 American National Bank Building
Chattanooga, Tennessee 37402-2606
Attention: Geoffrey G. Young, Esq.
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LTCB TRUST COMPANY, as Agent
By
Title:
Address for Notices:
165 Broadway
New York, New York 10006
Telex No.: 425722 LTCB UI
Telecopier No.: (212) 608-3081
Telephone No.: (212) 355-4854
Attention: Winston Brown
with a copy to:
The Long-Term Credit Bank of Japan, Ltd.
245 Peachtree Center Avenue, N.E.
Suite 2801
Atlanta, Georgia 30303
Telecopier No.: (404) 658-9751
Telephone No.: (404) 659-7210
Attention: Mr. Philip Marsden
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$ 40,000,000.00 LTCB TRUST COMPANY, as lender
By
Title:
Lending Office:
165 Broadway
New York, New York 10006
Address for Notices:
165 Broadway
New York, New York 10006
Telex No.: 425722 LTCB UI
Telecopier No.: (212) 608-3081
Telephone No.: (212) 335-4854
Attention: Winston Brown
with a copy to:
The Long-Term Credit Bank of Japan, Ltd.
245 Peachtree Center Avenue, N.E.
Suite 2801
Atlanta, Georgia 30303
Telecopier No.: (404) 658-9751
Telephone No.: (404) 659-7210
Attention: Mr. Philip Marsden
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$ 33,000,000.00 SUNTRUST BANK, as lender
By
Title:
By
Title:
Lending Office:
25 Park Place
24th Floor
Atlanta, Georgia 30303
Address for Notices:
P.O. Box 4418
Mail Code 120
Atlanta, Georgia 30302
Telex No.: 544210 TRUSCO INT ATL
Telecopier No.: (404) 827-6270
Telephone No.: (404) 230-5162
Attention: Mr. Raymond King
Vice President
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$ 18,000,000.00 THE SAKURA BANK, LIMITED, as lender
By
Title:
Lending Office:
245 Peachtree Center Avenue, N.E.
Suite 2703
Atlanta, GA 30303
Address for Notices:
245 Peachtree Center Avenue, N.E.
Suite 2703
Atlanta, GA 30303
Telecopier No.: (404) 521-1133
Telephone No.: (404) 521-3111
Attention: Mr. J. Hutchins Corbett
Assistant Vice President
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$ 15,000,000.00 COMMERZBANK AG, as lender
By
Title:
By
Title:
Lending Office:
1230 Peachtree Street, N.E.
Suite 3500
Atlanta, Georgia 30309
Address for Notices:
1230 Peachtree Street, N.E.
Suite 3500
Atlanta, Georgia 30309
Telecopier No.: (404) 888 6539
Telephone No.: (404) 888 6517
Attention: Mr. Eric Kagerer
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$ 14,000,000.00 DG BANK, as lender
By
Title:
By
Title:
Lending Office:
DG Bank Building
609 Fifth Avenue
New York, New York 10017-1021
Address for Notices:
DG Bank Building
609 Fifth Avenue
New York, New York 10017-1021
Telecopier No.: (212) 745-1556
Telephone No.: (404) 745-1564
Attention: Mr. Trevor Brookes
Assistant Vice President
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$ 10,000,000.00 THE CHUO TRUST & BANKING CO., LTD., as lender
By
Title:
Lending Office:
2 World Trade Center
Suite 8322
New York, New York 10048
Address for Notices:
2 World Trade Center
Suite 8322
New York, New York 10048
Telecopier No.: (212) 466-1140
Telephone No.: (212) 938-2715
Attention: Mr. Eric Seely
Vice President
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$ 10,000,000.00 CREDIT LYONNAIS, as lender
By
Title:
Lending Office:
One Peachtree Center
Suite 4400
303 Peachtree Street, N.E.
Atlanta, GA 30308
Address for Notices:
One Peachtree Center
Suite 4400
303 Peachtree Street, N.E.
Atlanta, GA 30308
Telecopier No.: (404) 584-5249
Telephone No.: (404) 524-3700
Attention: Mr. David Edge
Vice President
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$ 10,000,000.00 SOCIETE GENERALE, as lender
By
Title:
Lending Office:
4800 Trammell Crow Center
2001 Ross Avenue
Dallas, Texas 75201
Address for Notices:
4800 Trammell Crow Center
2001 Ross Avenue
Dallas, Texas 75201
Telecopier No.: (214) 979-1104
Telephone No.: (214) 979-2777
Attention: Mr. Ralph Saheb
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$ 10,000,000.00 THE CHIBA BANK, LTD., as lender
By
Title:
Lending Office:
1133 Avenue of the Americas
15th Floor
New York, New York 10036
Address for Notices:
1133 Avenue of the Americas
15th Floor
New York, New York 10036
Telecopier No.: (212) 354-8575
Telephone No.: (212) 354-8390
Attention: Mr. Carmen Augustino
Vice President
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$ 10,000,000.00 THE INDUSTRIAL BANK OF JAPAN, LIMITED,
ATLANTA AGENCY, as lender
By
Title:
Lending Office:
One Ninety One Peachtree Tower
Suite 3600
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Address for Notices:
One Ninety One Peachtree Tower
Suite 3600
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Telecopier No.: (404) 577-6818
Telephone No.: (404) 524-8770
Attention: Business Operations Department
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EXHIBIT A
PROMISSORY NOTE
$_____________ ____________, 1995
New York, New York
FOR VALUE RECEIVED, Coca-Cola Bottling Co. Consolidated, a
Delaware corporation (the "Company"), hereby promises to pay to the order of
[Name of Bank] (the "Bank"), for account of its Applicable Lending Office
provided for in the Loan Agreement referred to below, at account no. 04 203606
of LTCB Trust Company, as agent for the Bank (in such capacity, the "Agent") at
Bankers Trust Company, New York, New York, ABA No. 021001033, ref.: "Coca-Cola
Bottling Co. Consolidated" (or at such other account or at such other place in
New York City as the Agent may notify the Company from time to time), the
principal sum of _____________ Dollars, in lawful money of the United States of
America and in immediately available funds, without set-off, counterclaim or
deduction of any kind, in two equal, consecutive installments, the first of
which shall be in the amount of _____________ ($_________) (or such lesser
amount as shall equal the full remaining principal amount of the Loans of the
Bank outstanding under the Loan Agreement) and shall be payable on ___________,
2002 (or if such day is not a Business Day, as defined in the Loan Agreement, on
the next succeeding Business Day, unless such next succeeding Business Day falls
in a different calendar month, in which case the next preceding Business Day),
and the second of which shall be in the amount of _______________
($_________)(or such other amounts as shall equal the full remaining principal
amount of the Loans of the Bank outstanding under the Loan Agreement) and shall
be payable on _________, 2003 (or if such day is not a Business Day, as defined
in the Loan Agreement, on the next succeeding Business Day, unless such next
succeeding Business Day falls in a different calendar month, in which case the
next preceding Business Day), and to pay interest on the unpaid principal amount
of this Note, at such office, in like money, manner and funds, for the period
commencing on the date of this Note until this Note shall be paid in full, at
the rates per annum and on the dates provided in the Loan Agreement.
The duration of each Interest Period for the Loan evidenced
hereby and the amount of each payment or prepayment made on account of the
principal thereof shall be recorded by the Bank on its books and, prior to any
transfer of this Note, endorsed by the Bank on the schedule attached hereto or
any continuation thereof; provided that no failure by the Bank to make, or delay
in making, such recording or endorsement shall affect the obligations of the
Company under this Note.
This Note is one of the Notes referred to in the Loan
Agreement dated as of November __, 1995 (as amended and in effect from time to
time, the "Loan Agreement") among the Company, the banks named therein
(including the Bank), and LTCB Trust Company, as Agent, providing for Loans to
the Company in Dollars, and evidences a Loan made by the Bank thereunder. Except
as otherwise expressly defined in this Note, capitalized terms used in this Note
have the respective meanings assigned to them in the Loan Agreement.
-1-
<PAGE>
The Loan Agreement provides for the acceleration of the
maturity of this Note upon the occurrence of certain events and for prepayments
of the Loans upon the terms and conditions specified therein.
The Company agrees to pay all costs of collection in case
default is made in any payment under this Note.
The Company hereby waives diligence, presentment, protest and
all notices and demands whatsoever in respect of this Note.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
COCA-COLA BOTTLING CO.
CONSOLIDATED
By
Title:
-2-
<PAGE>
LOAN
Amount Unpaid
Paid or Interest Principal Notation
Prepaid Period Amount Made By
-3-
<PAGE>
EXHIBIT B
[Form of Opinion of Counsel to the Company]
_____________, 19__
To the Agent and Banks
parties to the Loan
Agreement referred
to below
Gentlemen:
We have acted as counsel to Coca-Cola Bottling Co.
Consolidated, a Delaware corporation (the "Company"), in connection with the
Loan Agreement dated as of November ___, 1995 (the "Loan Agreement") among the
Company, the banks named therein (the "Banks") and LTCB Trust Company as agent
for the Banks (in such capacity, the "Agent"), which provides, among other
things, for loans to be made to the Company in the aggregate principal amount of
up to $170,000,000. Capitalized terms used herein and not defined herein have
the meanings assigned to them by or pursuant to the terms of the Loan Agreement.
In rendering the opinion hereinafter set forth, we have
examined executed copies of the Loan Agreement and the Notes and we have
examined and relied upon originals or photo static or certified copies of such
corporate records, certificates of officers of the Company, certificates or
telexes of public officials, and such other agreements, documents and
instruments as we have deemed relevant and necessary as the basis for the
opinions hereinafter expressed. In such examination, we have assumed the
genuineness of all signatures of all parties (other than those on behalf of the
Company to the extent we have witnessed them), the conformity to original
documents of all copies submitted to us as certified, conformed or photostatic
copies and the legal competence of each individual (other than officers of the
Company) executing any document. As to any opinion below relating to the
existence, qualification or good standing of any corporation in any
jurisdiction, our opinion relies entirely upon and is limited by those
certificates of public or governmental officials obtained in connection
therewith and delivered to you and assumes that such certificates were accurate
and properly given.
We have relied, in whole or in part, upon representations of
the management of the Company and have assumed, without independent inquiry, the
completeness and accuracy of those representations as to all matters of fact
(including factual conclusions and characterizations and descriptions of
purpose, intention or other state of mind) regarding the Company relevant to:
-1-
<PAGE>
the opinion as to breach, default or creation of any Mortgage expressed in
paragraph 2; the opinion as to the execution and delivery of the Loan Agreement
and the Notes (only insofar as we have not witnessed the same, and not as to the
capacity of the signing officers) expressed in paragraph 3; the opinion
expressed in paragraph 4, other than as to proceedings of which we are aware;
and the facts supporting the legal conclusions in paragraphs 6 and 7.
The opinions herein are limited to the federal laws of the
United States, the laws of the States of Tennessee and North Carolina and the
corporate laws of the State of Delaware, and without limiting the foregoing, no
opinion is expressed herein with respect to the laws of any other jurisdiction
or with respect to the effect of any such laws on the matters with respect to
which opinions are given herein. We are opining solely on those items expressly
stated herein and no opinion should otherwise be implied from the text hereof.
Except as otherwise expressly provided herein, we are relying solely on the
written documents effectuating the transaction and are neither considering nor
expressing an opinion regarding the effects, if any, of any parol evidence, oral
or written, that a court might consider. When the opinions expressed herein are
subject to a knowledge standard, this means the actual knowledge of our
attorneys.
Each opinion set forth below relating to the enforceability of
any agreement or instrument against the Company is subject to the following
general qualifications:
(i) as to any instrument delivered by the Company, we assume
that the Company has received the agreed upon consideration therefor;
(ii) as to any agreement to which the Company is a party, we
assume that such agreement has been duly executed by and is the binding
obligation of each other party thereto;
(iii) the validity, binding nature or enforceability of any
obligation of the Company may be limited by bankruptcy, insolvency,
reorganization, moratorium, marshalling or other laws affecting the
enforcement generally of creditors' rights and remedies (including such
as may deny giving effect to waivers of debtors' or guarantors'
rights);
(iv) the validity, binding nature or enforceability of any
obligation or term of the Loan Agreement or the Notes may be subject to
general principles of equity, whether at law or in equity; and
(v) the acceptance by the North Carolina courts of the
jurisdiction of the courts of New York and the waiver of the right to
jury trial, and the necessity of the Agent or the Banks to qualify to
do business in North Carolina in order to enforce the Loan Agreement or
the Notes may be subject to the discretion of the court before which
any proceeding raising such issues may be brought.
Based upon the foregoing, we are of the opinion that:
1. The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware, is duly
qualified to transact business in the States of Delaware, Tennessee, Virginia,
North Carolina and South Carolina and has the
-2-
<PAGE>
necessary corporate power to make and perform the Loan Agreement and the Notes
and to borrow under the Loan Agreement.
2. The making and performance by the Company of the Loan
Agreement and the Notes, the borrowing of the full amount of the Commitments
under the Loan Agreement and the consummation of the other transactions
contemplated by each of the foregoing have been duly authorized by all necessary
corporate action (including, without limitation, any necessary shareholder
action); do not and will not violate any provision of its certificate of
incorporation or bylaws; do not violate any provision of law or regulation
applicable to the Company or any of its assets, revenues or other properties;
and do not and will not result in the breach of, or constitute a default or
require any consent under, or result in the creation of any Mortgage upon any of
the assets, revenues or other properties of the Company or any of its
Subsidiaries pursuant to, any indenture, loan or credit agreement, guaranty,
mortgage, security agreement, bond, note or other agreement or instrument to
which the Company or any Subsidiary is a party or by which the Company or any
Subsidiary or its respective assets, revenues or other properties may be bound
where the occurrence of which either individually or in the aggregate could
reasonably be expected to have a material adverse effect on the business,
operations, properties, assets or financial condition of the Company.
3. Each of the Loan Agreement and the Notes has been duly
executed and delivered by the Company and, if North Carolina law were to be
applied to the Loan Agreement and the Notes notwithstanding the choice of New
York law to apply thereto, constitutes the legal, valid and binding obligation
of the Company enforceable in accordance with its respective terms.
4. Except as disclosed in Schedule 2 to the Loan Agreement,
there are no legal or arbitral proceedings, and no proceedings by or before any
governmental or regulatory authority or agency, pending or (to the best of our
knowledge) threatened against or affecting the Company or any Subsidiary, or any
properties or rights of the Company or any Subsidiary, which could reasonably be
expected to have a material adverse effect on the ability of the Company to
perform its obligations under the Loan Agreement or the Notes.
5. No authorizations, consents, approvals or licenses of, or
filings or registrations with, any governmental or regulatory authority or
agency are required in connection with the execution, delivery or performance by
the Company of the Loan Agreement or the Notes.
6. Neither the Company nor any of its Subsidiaries is, nor is
any of them "controlled by", an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
7. Neither the Company nor any of its Subsidiaries is a
"holding company", nor is any of them a "subsidiary company" of a "holding
company", within the meaning of the
-3-
<PAGE>
Public Utility Holding Company Act of 1935, as amended, nor is any of them a
public utility under any North Carolina law.
8. In accordance with current interpretations of applicable
North Carolina law and assuming that the Agent and each Bank only have executed,
delivered and performed under the Loan Agreement and the Notes and have taken no
other actions pursuant to the transactions herein discussed or otherwise which
would require them to qualify to do business in the State of North Carolina, in
order for the Agent or any Bank to enforce its rights under the Loan Agreement
and the Notes in the North Carolina courts, it is not necessary for the Agent or
any Bank to qualify to do business, as a foreign bank or otherwise, in the State
of North Carolina, nor will any of them be deemed to be doing business in North
Carolina solely by reason of the execution, delivery or performance by any party
of the Loan Agreement or the Notes.
9. In accordance with current interpretations of applicable
North Carolina law, the choice of New York law to govern the Loan Agreement and
the Notes is a valid choice of law and should be given effect by the courts of
North Carolina.
We point out the enforceability of the indemnity provisions
contained in the Loan Agreement may be limited by applicable securities laws or
public policy.
The opinion set forth above is solely for the benefit of the
Agent and the Banks and that of their respective counsels, successors and
assigns, may not be quoted, circulated or published, in whole or in part, or
furnished to or relied upon in any manner by any other Person without our prior
written authorization. Furthermore, this opinion is given to you as of the date
hereof and we assume no obligation to advise you of changes that may hereafter
be brought to our attention.
Very truly yours,
-4-
</TABLE>
<PAGE>
AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of December 21, 1995
among
COCA-COLA BOTTLING CO. CONSOLIDATED,
THE BANKS NAMED ON THE SIGNATURE PAGES HERETO
and
NATIONSBANK, N.A.,
as Administrative and Syndication Agent
and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
as Documentation Agent
<PAGE>
AMENDED AND RESTATED CREDIT AGREEMENT
COCA-COLA BOTTLING CO. CONSOLIDATED
Table of Contents
<TABLE>
<CAPTION>
Page
<S> <C> <C>
SECTION 1. DEFINITIONS.................................................................................... 3
1.01. Certain Definitions............................................................................. 3
1.02. Construction.................................................................................... 14
1.03. Accounting Principles........................................................................... 15
SECTION 2. THE LOANS....................................................................................... 17
2.01. Revolving Loans................................................................................. 17
2.02. Competitive Bid Loans........................................................................... 17
2.03. Available Amounts of Loans...................................................................... 23
2.04. Borrowing, Repayment and Reborrowing of
Revolving Loans; Pro Rata Sharing of
Revolving Loans................................................................................. 23
2.05. The Notes....................................................................................... 24
2.06. Making of Revolving Loans; Standard Notice...................................................... 25
2.07. Facility Fees; Termination or Reduction of
Commitments..................................................................................... 26
2.08. Agent's Fees.................................................................................... 27
2.09. Interest Rates; Maturity Periods Etc. for
Revolving Loans................................................................................. 27
2.10. Prepayments..................................................................................... 31
2.11. Interest Payment Dates.......................................................................... 32
2.12. Pro Rata Treatment and Payments................................................................. 32
2.13. Additional Compensation in Certain
Circumstances................................................................................... 33
2.14. Regulation D Costs.............................................................................. 35
2.15. Funding by Branch, Subsidiary or Affiliate...................................................... 35
2.16. Extension of Expiration Dates................................................................... 36
SECTION 3. REPRESENTATIONS AND WARRANTIES...................................................................... 37
3.01. Financial Condition............................................................................. 37
3.02. No Adverse Change............................................................................... 37
3.03. Corporate Existence; Compliance with Law........................................................ 37
3.04. Corporate Power; Authorization; Enforceable
Obligations..................................................................................... 38
3.05. No Legal Bar.................................................................................... 38
3.06. No Material Litigation.......................................................................... 38
3.07. No Default...................................................................................... 38
3.08. Taxes ......................................................................................... 39
3.09. Subsidiaries.................................................................................... 39
3.10. Material Agreements............................................................................. 39
3.11. Indebtedness and Contingent Obligations......................................................... 39
3.12. Pension-Related Matters......................................................................... 39
3.13. Federal Regulations............................................................................. 40
3.14. Investment Company Act.......................................................................... 40
3.15. Pari Passu Status............................................................................... 40
i
<PAGE>
SECTION 4. CONDITIONS OF EFFECTIVENESS..................................................................... 41
4.01. Initial Set of Loans. .......................................................................... 41
4.02. Subsequent Loans. ............................................................................. 42
SECTION 5. AFFIRMATIVE COVENANTS........................................................................... 44
5.01. Financial Statements............................................................................ 44
5.02. Certificates; Other Information................................................................. 44
5.03. Visitation...................................................................................... 45
5.04. Preservation of Existence and Franchises........................................................ 45
5.05. Insurance....................................................................................... 45
5.06. Maintenance of Properties....................................................................... 45
5.07. Payment of Taxes and Other Potential
Charges and Priority Claims; Payment of
Other Current Liabilities....................................................................... 46
5.08. Continuation of Business........................................................................ 46
5.09. Use of Loan Proceeds............................................................................ 46
5.10. Notice of Pension-Related Events................................................................ 47
5.11. Notices of Events of Default, Levies Etc........................................................ 47
SECTION 6. NEGATIVE COVENANTS.............................................................................. 49
6.01. Financial Maintenance Covenants................................................................. 49
6.02. Liens ......................................................................................... 49
6.03. Guarantees...................................................................................... 50
6.04. Investments..................................................................................... 50
6.05. Dispositions of Assets.......................................................................... 51
6.06. Material Agreements............................................................................. 52
6.07. Compliance with Federal Reserve Regulations..................................................... 53
6.08. Merger ......................................................................................... 53
6.09. Fiscal Periods.................................................................................. 53
6.10. Indebtedness of Subsidiaries.................................................................... 54
SECTION 7. DEFAULTS........................................................................................ 55
7.01. Events of Default............................................................................... 55
7.02. Rights of Set-Off............................................................................... 57
SECTION 8. THE AGENT....................................................................................... 59
8.01. Appointment..................................................................................... 59
8.02. Delegation of Duties............................................................................ 59
8.03. Nature of Duties; Independent Credit
Investigation................................................................................... 59
8.04. Actions in Discretion of Agent; Instructions
from Required Banks............................................................................. 59
8.05. Exculpatory Provisions.......................................................................... 60
8.06. Reimbursement and Indemnification............................................................... 60
8.07. Reliance by Agent............................................................................... 60
8.08. NationsBank, N.A. in its Individual Capacity.................................................... 61
8.09. Holders of Notes................................................................................ 61
8.10. Successor Agent................................................................................. 61
SECTION 9. MISCELLANEOUS................................................................................... 62
9.01. Equalization of Banks........................................................................... 62
9.02. No Implied Waiver; Cumulative Remedies;
Writing Required; Attorney's Fees in
ii
<PAGE>
Certain Circumstances........................................................................... 62
9.03. Taxes ......................................................................................... 62
9.04. Modifications, Amendments or Waivers............................................................ 63
9.05. Notices......................................................................................... 63
9.06. Reimbursement for Certain Expenses.............................................................. 64
9.07. Severability.................................................................................... 64
9.08. Consent to Jurisdiction; Waiver of Jury Trial................................................... 64
9.09. Governing Law................................................................................... 65
9.10. Prior Understandings............................................................................ 65
9.11. Survival........................................................................................ 65
9.12. Binding Effect. ............................................................................... 65
9.13. Assignments and Participations.................................................................. 65
9.14. Headings; Table of Contents..................................................................... 67
9.15. Counterparts.................................................................................... 68
EXHIBIT A Applicable Commitment Percentage
EXHIBIT B Form of Assignment and Acceptance
EXHIBIT C Form of Note for Revolving Loans
EXHIBIT D Form of Note for Competitive Bid Loans
EXHIBIT E Form of Competitive Bid Quote Request
EXHIBIT F Form of Competitive Bid Quote
EXHIBIT G Opinion of Counsel
EXHIBIT H Margin Certificate
SCHEDULE 1 Certain Material Litigation
SCHEDULE 2 Subsidiaries
SCHEDULE 3 Material Agreements
SCHEDULE 4 Material Indebtedness and Contingent Liabilities
SCHEDULE 5 Material Liens
SCHEDULE 6 Existing Subsidiaries Guaranties
</TABLE>
iii
<PAGE>
AMENDED AND RESTATED
CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of December 21,
1995, by and among COCA-COLA BOTTLING CO. CONSOLIDATED, a Delaware corporation
(hereinafter called the "Company"), the banks named on the signature pages
hereto and each other bank which may hereafter execute and deliver an instrument
of assignment with respect to this Agreement pursuant to Section 9.13 hereof
(hereinafter each called a "Bank" and collectively the "Banks"), and
NATIONSBANK, N.A. (formerly known as NationsBank of North Carolina, National
Association), as Administrative and Syndication Agent for the Banks under this
Agreement and related documentation (hereinafter in such capacity called the
"Agent") and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as
Documentation Agent;
W I T N E S S E T H T H A T :
WHEREAS, the Company, the Banks signatories thereto, and NationsBank,
N.A., acting as agent, entered into a Credit Agreement dated as of March 17,
1992, as amended (the "Prior Agreement") pursuant to which the banks party
thereto (the "Prior Lenders") have agreed to make from time to time and have
made loans to the Company of up to $170,000,000; and
WHEREAS, the Company has requested that the Banks agree to amend and
restate the Prior Agreement in its entirety as provided herein;
NOW, THEREFORE, the parties hereto, in consideration of their mutual
covenants and agreements hereinafter set forth and intending to be legally bound
hereby, covenant and agree as follows:
<PAGE>
AMENDMENT AND RESTATEMENT
The Company, the Agent and the Banks hereby agree that upon the
effectiveness of this Agreement, the terms and provisions of the Prior Agreement
shall be and hereby are amended and restated in their entirety by the terms and
conditions of this Agreement and the terms and provisions of the Prior
Agreement, except as otherwise provided herein, shall be superseded by this
Agreement.
Notwithstanding the amendment and restatement of the Prior Agreement by
this Agreement, the Company shall continue to be liable to the Prior Lenders
with respect to agreements on the part of the Company under the Prior Agreement
to indemnify and hold harmless the Banks from and against all claims, demands,
liabilities, damages, losses, costs, charges and expenses to which the Prior
Lenders may be subject arising in connection with the Prior Agreement. This
Agreement is given as a substitution of, and not as a payment of, the
obligations of Borrower under the Prior Agreement and is not intended to
constitute a novation of the Prior Agreement. Upon the effectiveness of this
Agreement, all amounts outstanding and owing by Company under the Prior
Agreement as of the Closing Date, as determined by the Banks, shall constitute
Loans hereunder.
2
<PAGE>
SECTION 1. DEFINITIONS
1.01. Certain Definitions. In addition to other words and terms defined
elsewhere in this Agreement, the following words and terms shall have the
following meanings, respectively, unless the context hereof clearly requires
otherwise:
"Absolute Rate" shall have the meaning assigned to such term in Section
2.02(d)(ii)(D) hereof.
"Absolute Rate Auction" shall mean a solicitation of Competitive Bid
Quotes setting forth Absolute Rates pursuant to Section 2.02 hereof.
"Absolute Rate Loan" or "Absolute Rate Loans" shall mean any or all
Competitive Bid Loans the interest rates of which are determined on the basis of
Absolute Rates pursuant to an Absolute Rate Auction.
"Agreement" shall mean this Amended and Restated Credit Agreement dated
as of December 21, 1995 as it may be hereafter further amended in accordance
with its terms.
"Applicable Commitment Percentage" shall mean, for each Bank, with
respect to the Loans hereunder, a fraction, the numerator of which shall be the
then amount of such Bank's Commitment and the denominator of which shall be the
Total Commitment, which Applicable Commitment Percentage for each Bank as of the
Effective Date is as set forth in Exhibit A attached hereto and incorporated
herein by this reference; provided, that the Applicable Commitment Percentage of
each Bank shall be increased or decreased to reflect any assignments to or by
such Bank effected in accordance with Section 9.13 hereof.
"Applicable Margin" means for each LIBOR-Rate Loan the interest on
which is computed by reference to the LIBOR-Rate and the Facility Fee, as the
case may be, (i) for the period from the Effective Date through the fifth day
following the date of receipt by the Agent of a Compliance Certificate in
respect of the fiscal period of the Borrower and its Subsidiaries ending
December 31, 1995, 22.5 basis points per annum in the case of a LIBOR-Rate Loan
and 12.5 basis points in the case of the Facility Fee, and (ii) thereafter that
number of basis points per annum set forth below, which shall be (a) determined
as of the end of each fiscal quarter of the Company (each a "Determination
Date") and furnished to the Agent not later than the time set forth in Section
5.01 hereof (the "Calculation Date") and (c) applicable from the fifth day
following the receipt of a Compliance Certificate until the fifth day following
receipt of a Compliance Certificate in respect of a subsequent fiscal quarter,
based upon the lower Applicable Margin as determined by either (X) Consolidated
Funded Indebtedness/Cash Flow Ratio as at the Determination Date for the
four-quarter period
3
<PAGE>
of the Company ended at the Determination Date or (Y) the highest Debt Rating,
as specified below:
<TABLE>
<CAPTION>
Applicable Margin
Funded Indebtedness/ Debt Rating
Cash Flow Ratio or S&P/Moody's LIBOR-Rate Facility Fee
<S> <C> <C> <C>
a) Greater than or a) -- 37.5 basis points 25 basis points
Equal to 5.00 to
1.00
b) Less than 5.00 to b) BBB-/Baa3 25 15
1.00 but Greater
than or Equal to
4.00 to 1.00
c) Less than 4.00 to c) BBB/Baa2 22.5 12.5
1.00 but Greater
than or Equal to
3.00 to 1.00
d) Less than 3.00 to d) BBB+/Baa1 20 10
1.00 but Greater
than or Equal to
2.00 to 1.00
e) Less than 2.00 to e) A/A2 or 17 8
1.00 better
</TABLE>
"Agreement" shall mean this Amended and Restated Credit Agreement as
the same may be further amended, modified or supplemented from time to time.
"Assignment and Acceptance" shall mean an Assignment and Acceptance in
the form of Exhibit B (with blanks appropriately filled in) delivered in
connection with an assignment of a portion of a Bank's interest under this
Agreement pursuant to Section 9.13.
"Business Day" shall mean (i) with respect to the selection of the
LIBOR-Rate Option, prepayment of any part of a Set of LIBORRate Loans,
determining the first or last day of any LIBOR-Rate Maturity Period, the giving
of notices or quotes in connection with a Euro Auction or a payment of principal
of or interest on, or the Interest Period for, a Euro-based Loan, a day for
dealings in deposits in Dollars by and among banks in the London interbank
market and on which commercial banks are open for domestic and international
business in Charlotte, North Carolina and New York, New York and (ii) with
respect to selection of any other interest rate Option, prepayment of any part
of any other Set of Revolving Loans, determining the first or last day of any
other Maturity Period, the giving of notices or quotes in connection with a Euro
Auction, or a payment of principal of or interest on, or the Interest Period
for, a Competitive Bid Loan and in every other context, any day other than a
Saturday, Sunday or other day on which banking institutions are authorized or
obligated to close in Charlotte, North Carolina or New York, New York.
4
<PAGE>
"Capitalized Lease" shall mean any lease which, in accordance with
GAAP, is required to be capitalized on the balance sheet of the lessee, and
"Capitalized Lease Obligations" of any person shall mean the aggregate amount
which, in accordance with GAAP, is required to be reported as a liability on the
balance sheet of such person as lessee under a Capitalized Lease.
"Cash Flow/Fixed Charges Ratio" shall mean, in respect of any period,
the ratio of the amount of Consolidated Cash Flow for the four most recent
fiscal quarters of the Company to Consolidated Fixed Charges for the same
period.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute of similar import, and regulations thereunder, in each case as
in effect from time to time. References to sections of the Code shall be
construed to also refer to any successor sections.
"Commitment" shall have the meaning assigned to that term in Section
2.01 hereof.
"Competitive Bid Borrowing" has the meaning assigned to such term in
Section 2.02(b) hereof.
"Competitive Bid Loan" or "Competitive Bid Loans" means any or all of
the Loans described in Section 2.02 hereof.
"Competitive Bid Maturity Date" shall have the meaning assigned to such
term in Section 2.02(j) hereof.
"Competitive Bid Notes" means, collectively, the promissory notes of
the Company with respect to Competitive Bid Loans provided for by Section 2.02
hereof executed and delivered to the Banks as provided in Section 2.04(c)
substantially in the form attached hereto as Exhibit C and incorporated herein
by reference, with appropriate insertions as to dates and names of Banks, and
all promissory notes delivered in substitution or exchange therefor, in each
case as the same shall be amended, modified or supplemented and in effect from
time to time.
"Competitive Bid Quote" means an offer in accordance with Section
2.02(d) hereof by a Bank to make a Competitive Bid Loan with one single
specified interest rate.
"Competitive Bid Quote Request" has the meaning assigned to such term
in Section 2.02(b) hereof.
"Compliance Certificate" means a certificate in the form of Exhibit H
attached hereto.
"Consolidated Cash Flow" shall mean Consolidated Operating Income for
the applicable period plus any amounts deducted for depreciation, amortization,
operating lease expense, and discounts
5
<PAGE>
in time drafts or commercial paper created under the accounts receivable sales
program in determining Consolidated Operating Income.
"Consolidated Fixed Charges" shall mean, in respect of any period, the
sum of (i) Consolidated Net Interest Expense for such period, (ii) the amount of
obligations of the Company and its Consolidated Subsidiaries as Lessees, on
leases other than Capitalized Leases, accrued during such period, (iii) payments
made or required to be made by the Company and its Consolidated Subsidiaries
during such period under agreements providing for or containing covenants not to
compete and (iv) the amount of discount on time drafts or commercial paper
created under the accounts receivable sales program accrued during such period.
"Consolidated Funded Indebtedness" shall mean all Funded Indebtedness
of the Company and its Consolidated Subsidiaries, determined and consolidated in
accordance with GAAP.
"Consolidated Funded Indebtedness/Cash Flow Ratio" shall mean, in
respect of any period, the ratio of (a) the aggregate amount of (i) Consolidated
Funded Indebtedness and (ii) fifty percent (50%) of every Contingent Obligation
of the Company and its Consolidated Subsidiaries, determined and consolidated in
accordance with GAAP and (iii) 50% of the greater of (x) the amount on the books
of the Company and its Consolidated Subsidiaries reflecting NonConvertible
Preferred Stock, Series A, $100 par value, of the Company and its Consolidated
Subsidiaries and (y) the maximum aggregate amount of obligations of the Company
and its Consolidated Subsidiaries, whether contingent or otherwise, to
repurchase, redeem or otherwise acquire, at the time of calculation or
thereafter, such Non-Convertible Preferred Stock Series A of the Company or a
Consolidated Subsidiary, in the case of (i), (ii) and (iii), as of the last day
of said period to (b) the aggregate amount of (i) the Consolidated Cash Flow and
(ii) Acquisition Cash Flow for said period. For all purposes hereof, the Funded
Indebtedness/Cash Flow Ratio shall be calculated for a period of four
consecutive fiscal quarters of the Company ending with the fiscal quarter which
was at the time in question most recently completed.
"Consolidated Net Income" shall mean, in respect of any period, the net
income of the Company and its Consolidated Subsidiaries (after taxes) for such
period, determined and consolidated in accordance with GAAP.
"Consolidated Net Interest Expense" shall mean the aggregate net
obligations for interest payments of the Company and its Consolidated
Subsidiaries, determined and consolidated in accordance with GAAP, excluding,
however, such amounts as arise from the amortization of capitalized interest,
discount and fees reflected as an asset on the Company's books and records on
the Effective Date.
6
<PAGE>
"Consolidated Net Sales" shall mean, in respect of any period, the net
sales of the Company and its Consolidated Subsidiaries for such period,
determined and consolidated in accordance with GAAP.
"Consolidated Operating Income" shall mean the net income of the
Company and its Consolidated Subsidiaries, before any deduction in respect of
interest or taxes, determined and consolidated in accordance with GAAP,
excluding, however, extraordinary items in accordance with GAAP (which shall
include without limitation, in any event, any income, net of expenses, or loss
realized by the Company or any Consolidated Subsidiary from any sale of assets
outside the ordinary course of business, whether tangible or intangible,
including franchise territories and securities).
"Consolidated Subsidiaries" at any particular time shall mean those
Subsidiaries whose accounts are or should be consolidated with those of the
Company at such time in accordance with GAAP.
"Contingent Obligation" shall mean, as to any person, any obligation of
such person guaranteeing, assuming or endorsing any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other person (the
"primary obligor") in any manner, whether directly or indirectly, including
without limitation any obligation of such person, whether or not contingent, to
advance funds for the purchase or payment of any such primary obligation or to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor and including 50%
of any take or pay contract; provided, however, that the term Contingent
Obligation shall not include endorsements of instruments for deposit or
collection in the ordinary course of business. The amount of any Contingent
Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Contingent Obligation
is made (or a percentage thereof, if applicable) or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof as
determined by the Company in good faith.
"Contractual Obligation" shall mean, as to any person, any provision of
any security issued by such person or of any agreement, instrument or
undertaking to which such person is a party or by which it or any of its
property is bound.
"Controlled Group Member" means each trade or business (whether or not
incorporated) which together with the Company is treated as a single employer
under Section 4001(b)(1) of ERISA.
"Corresponding Source of Funds" shall mean in the case of any
LIBOR-Rate Loan, the proceeds of hypothetical receipts by a Notional LIBOR-Rate
Funding Office or by a Bank through a Notional LIBOR-Rate Funding Office of one
or more Dollar deposits in the interbank eurodollar market at the beginning of
the LIBOR-Rate Maturity Period corresponding to such LIBOR-Rate Loan, having
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maturities approximately equal to such LIBOR-Rate Maturity Period and in an
aggregate amount approximately equal to the principal amount of such LIBOR-Rate
Loan.
"Debt Rating" means the rating assigned from time to time by either S&P
or Moody's with respect to Funded Indebtedness of the Company.
"Dollar", "Dollars" and the symbol "$" shall mean lawful money of the
United States of America.
"Effective Date" shall mean the earliest date on which this Agreement
shall have been executed and delivered by the Company and the Agent and the
Agent shall have been notified by each Bank that such Bank has executed and
delivered this Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, and regulations
thereunder, in each case as in effect from time to time. References to sections
of ERISA shall be construed to also refer to any successor sections.
"EURO Auction" shall mean a solicitation of Competitive Bid Quotes
setting forth EURO-based Margins based on the EURO-Rate pursuant to Section 2.02
hereof.
"EURO-based Loans" shall mean Competitive Bid Loans the interest rates
of which are determined on the basis of the EURORate pursuant to a EURO Auction.
"EURO-based Margin" shall have the meaning assigned to such term in
Section 2.02(d)(ii)(C) hereof.
"EURO-Rate" for any date, as used herein, shall mean with respect to
each proposed EURO-based Loan a rate of interest (which shall be the same for
each day in the applicable Interest Period) equal to a rate determined on the
basis of the offered rates for deposits in Dollars, for a period equal to such
Interest Period, commencing on the first day thereof, which determination shall
be based on the British Bankers Association interest settlement rates as
generally found on page 3750 of the Telerate News Service as of 11:00 a.m.,
London time, two Business Days prior to the first day of such Interest Period.
"Event of Default" shall mean any of the Events of Default described in
Section 7.01 hereof.
"Facility Fee" shall have the meaning assigned to such term in Section
2.07(a) hereof.
"Federal Funds Effective Rate" for any day, as used herein, shall mean
the rate per annum (rounded upward to the nearest 1/100 of 1%) announced by the
Federal Reserve Bank of New York (or any
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successor) on such day as being the weighted average of the rates on overnight
Federal funds transactions arranged by Federal funds brokers on the previous
trading day, as computed and announced by such Federal Reserve Bank (or any
successor) in substantially the same manner as such Federal Reserve Bank
computes and announces the weighted average it refers to as the "Federal Funds
Effective Rate" as of the date of this Agreement; provided, if such Federal
Reserve Bank (or its successor) does not announce such rate on any day, the
"Federal Funds Effective Rate" for such day shall be the Federal Funds Effective
Rate for the last day on which such rate was announced.
"Financial Provisions" shall have the meaning assigned to such term in
Section 1.03(c) hereof.
"Funded Indebtedness" of a person shall mean all liabilities of such
person incurred in respect of borrowed money or commercial paper, of any
maturity, plus other Indebtedness (including the current portion thereof) of
such person which would be classified in whole or part as a long-term liability
of such person in accordance with GAAP, and shall in any event include (i) any
Indebtedness having a final maturity more than one year from the date of
creation of such Indebtedness and (ii) any Indebtedness, regardless of its term,
which is renewable or extendable by such person (pursuant to the terms thereof
or pursuant to a revolving credit or similar agreement or otherwise) to a date
more than one year from the date of creation of such Indebtedness or any date of
determination of Funded Indebtedness.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as such principles shall be in effect at the time of
the computation or determination or as of the date of the relevant financial
statements (the "Relevant Date"), subject to Section 1.03 hereof, applied both
to classification of items and amounts.
"Indebtedness" of a person shall mean:
(i) all indebtedness or liability for or on account of
money borrowed by, or credit extended to or on behalf of, or
for or on account of deposits with or advances to, such person;
(ii) all obligations of such person evidenced by bonds,
debentures, notes or similar instruments;
(iii) any amount secured by a Lien on property owned by such person
and Capitalized Lease Obligations of such person (without regard to any
limitation of the rights and remedies of the holder of such Lien or the
lessor under such Capitalized Lease to repossession or sale of such
property); and
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(iv) the aggregate amount which, in accordance with GAAP, is
required to be reported as a liability on the balance sheet of such
person under a product financing or similar arrangement pursuant to
paragraph 8 of AICPA Statement of Accounting Standards No. 49 or any
similar requirement of GAAP.
"Indebtedness/Cash Flow Ratio" shall mean in respect of any period, the
ratio of the amount of the Consolidated Indebtedness as of the last day of said
period to the amount of the Consolidated Cash Flow for said period. For all
purposes hereof the Indebtedness/Cash Flow Ratio shall be calculated for a
period of four consecutive fiscal quarters of the Company ending with the fiscal
quarter which was at the time in question most recently completed.
"Interest Period" shall mean with respect to any Competitive Bid Loan,
the period commencing on the date such Competitive Bid Loan is made and ending
7, 14, 30, 60, 90 or 180 days thereafter, as the Company may specify in the
related Competitive Bid Loan Quote Request as provided in Section 2.02(b)
hereof, provided that:
(i) no Interest Period may end after the Revolving
Expiration Date;
(ii) each Interest Period that would otherwise end on a day that is
not a Business Day shall end on the next succeeding Business Day or, in
the case of an Interest Period for a EURO-based Loan, if such next
succeeding Business Day falls in the next succeeding calendar month,
then such Interest Period shall end on the next preceding Business Day;
and
(iii) notwithstanding clauses (i) and (ii) above, no Interest Period
for any Competitive Bid Loan shall have a duration of less than 7 days
and, if the Interest Period for any Competitive Bid Loan would
otherwise be a shorter period, such Competitive Bid Loan shall not be
available hereunder.
"Law" shall mean any law (including common law), constitution, statute,
treaty, regulation, rule, ordinance, order, injunction, writ, decree or award of
any Official Body.
"LIBOR-Rate" and "LIBOR-Rate Option" shall have the meanings assigned
to those terms in subsection 2.09(a)(iii) hereof.
"LIBOR-Rate Loan" shall mean a Loan bearing interest under or by
reference to the LIBOR-Rate Option.
"LIBOR-Rate Maturity Period" shall have the meaning assigned to that
term in Section 2.09(b) hereof.
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"Lien" shall mean any mortgage, deed of trust, pledge, lien, security
interest, charge or other encumbrance or security arrangement of any nature
whatsoever, including but not limited to any conditional sale or title retention
arrangement, any assignment, deposit arrangement or lease intended as, or having
the effect of, security.
"Loan" or "Loans" shall mean any or all Revolving Loans or Competitive
Bid Loans made by one or more of the Banks to the Company under this Agreement,
as required by the context.
"Material Agreements" shall have the meaning assigned to that term in
Section 3.10 hereof.
"Material Subsidiary" shall mean a Subsidiary of the Company which (i)
owns, leases or occupies any building, structure or other facility used
primarily for the bottling, canning or packaging of soft drinks or soft drink
products or warehousing and distributing of such products, other than any such
building, structure or other facility or portion thereof, which, in the
reasonable opinion of the Board of Directors of the Company, is not of material
importance to the total business conducted by the Company and its Subsidiaries
as an entirety, or (ii) is a party to any contract with respect to the bottling,
canning, packaging or distribution of soft drinks or soft drink products, other
than any such contract which in the reasonable opinion of the Board of Directors
of the Company is not of material importance to the total business conducted by
the Company and its Subsidiaries as an entirety, and in any event includes each
of the Subsidiaries indicated as Material Subsidiaries listed in Schedule 2 as
of the date hereof.
"Maturity Date" shall mean any of the Revolving Loan Maturity Date and
the Competitive Bid Maturity Date.
"Month", with respect to a LIBOR-Rate Maturity Period, means the
interval between the days in consecutive calendar months numerically
corresponding to the first day of such Maturity Period. The last Business Day of
a calendar month shall be deemed to be such numerically corresponding day for
such calendar month if there is no such numerically corresponding day in such
calendar month or if the first day of such LIBOR-Rate Maturity Period is the
last Business Day of a calendar month.
"Moody's" means Moody's Investors Service, Inc., a Delaware
corporation.
"Multiemployer Plan" means any employee benefit plan which is a
"multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA and to
which the Company or any Controlled Group Member has or had an obligation to
contribute.
"Note" or "Notes" shall mean a Revolving Note, a Competitive Bid Note,
or all of the Revolving Notes and Competitive Bid Notes,
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as the case may be, of the Company executed and delivered under this Agreement
as required by Section 2.04 hereof, or any promissory note executed and
delivered pursuant to Section 2.15 or Section 9.13 hereof, together with all
extensions, renewals, refinancings or refundings of any thereof in whole or in
part.
"Notional LIBOR-Rate Funding Office" shall have the meaning given to
that term in Section 2.15(a) hereof.
"Office", when used in reference to the Agent, shall mean its office
located at NationsBank Plaza, Charlotte, North Carolina 28255, or such other
office or offices of the Agent as may be designated in writing from time to time
by the Agent to the
Company.
"Official Body" shall mean any government or political subdivision or
any agency, authority, bureau, central bank, commission, department or
instrumentality of either, or any court, tribunal, grand jury or arbitrator, in
each case whether foreign or domestic.
"Option" shall mean the Prime Rate Option or the LIBOR-Rate Option, as
the case may be.
"PBGC" means the Pension Benefit Guaranty Corporation established under
Title IV of ERISA or any other governmental agency, department or
instrumentality succeeding to the functions of said corporation.
"Person" shall mean an individual, corporation, partnership, trust,
unincorporated association, joint venture, joint-stock company, government
(including political subdivisions), governmental authority or agency, or any
other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) to which Section 4021 of ERISA applies and (i) which is
maintained for employees of the Company or any Controlled Group Member or (ii)
to which the Company or any Controlled Group Member made, or was required to
make, contributions at any time within the preceding five years.
"Potential Default" shall mean any event or condition which with
notice, passage of time or a determination by the Required Banks, or any
combination of the foregoing, would constitute an Event of Default.
"Prime Rate" and "Prime Rate Option" shall have the meanings assigned
to those terms in subsection 2.09(a)(i) hereof.
"Prime Rate Maturity Period" shall have the meaning assigned to that
term in Section 2.09(b) hereof.
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"Prime Rate Loan" shall mean a Revolving Loan bearing interest under or
by reference to the Prime Rate Option.
"Relevant Date" shall have the meaning assigned to such term in the
definition of GAAP.
"Reportable Event" means (i) a reportable event described in Section
4043 of ERISA and regulations thereunder, (ii) a withdrawal by a substantial
employer from a Plan to which more than one employer contributes, as referred to
in Section 4063(b) of ERISA, or (iii) a cessation of operations at a facility
causing more than twenty percent (20%) of Plan participants to be separated from
employment, as referred to in Section 4068(f) of ERISA.
"Required Banks" shall mean, at any particular date, the holders of at
least 51% of the aggregate unpaid principal amount of the Revolving Notes at
such date (or if no such amount is outstanding, Banks whose Commitments
aggregate at least 51% of the Total Commitments at such date).
"Responsible Officer" shall mean the President, the Controller, the
Treasurer or the Chief Financial Officer of the Company.
"Revolving Expiration Date" shall mean December 31, 2000 or such later
date as may be established as the Revolving Expiration Date pursuant to Section
2.16 hereof.
"Revolving Loan" or "Revolving Loans" shall mean any or all Loans
provided for in Section 2.01 hereof.
"Revolving Loan Maturity Date" shall have the meaning assigned to such
terms in Section 2.09(b) hereof.
"Revolving Maturity Period" shall have the meaning assigned to that
term in Section 2.09(b) hereof.
"Revolving Notes" means, collectively, the promissory notes of the
Company with respect to Revolving Loans provided for in Section 2.01 hereof
executed and delivered to the Banks as provided in Section 2.04(a) substantially
in the form attached hereto as Exhibit D and incorporated herein by reference,
with appropriate insertions as to dates and names of Banks, and all promissory
notes delivered in substitution or exchange therefor, in each case as the same
shall be amended, modified or supplemented and in effect from time to time.
"Rollover Loan" shall mean a Loan made on the Maturity Date of a
preceding Loan to refund in whole or in part the principal amount of such
preceding Loan then outstanding.
"S&P" means Standard & Poor's Ratings Group, a division of
McGraw-Hill, Inc. or any successor to the rating business thereof.
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"Set" of Revolving Loans shall mean all of the Revolving Loans made
hereunder by the Banks at any one time. All Revolving Loans included in each Set
of Revolving Loans shall bear interest by reference to the same Option and shall
mature on the same Revolving Loan Maturity Date.
"Standard Notice" shall mean an irrevocable notice provided to the
Agent in accordance with Section 9.05 hereof on a Business Day which is
(i) not later than the Business Day on which funds are to be
disbursed or a prepayment made in the case of the selection of the
Prime Rate Option or the prepayment of any part of any Prime Rate Loan;
and
(ii) at least three Business Days in advance in the case
of the selection of the LIBOR-Rate Option or the prepayment of
any LIBOR-Rate Loan.
Standard Notice must be provided no later than 9:30 o'clock a.m., Charlotte,
North Carolina time, on the last day permitted for such notice.
"Subsidiary" of the Company shall mean (i) any corporation of which a
majority (by number of shares or number of votes) of any class of outstanding
capital stock normally entitled to vote for the election of one or more
directors (regardless of any contingency which may suspend or dilute the voting
rights of such class) is owned directly or indirectly by the Company or one or
more Subsidiaries and (ii) any limited liability company of which the members
consist solely of the Company or Subsidiaries.
"Total Commitment" means the sum of the Commitments of all Banks, which
sum shall not exceed $170,000,000 and may be (i) increased as provided in
2.07(b) and (ii) reduced from time to time pursuant to 2.07(c) hereof.
1.02. Construction.
(a) Unless the context of this Agreement otherwise clearly
requires, references to the plural include the singular, the singular
the plural and the part the whole and "or" has the inclusive meaning
represented by the phrase "and/or". References in this Agreement to
"determination" by a person include good faith estimates by such person
(in the case of quantitative determinations) and good faith beliefs by
such person (in the case of qualitative determinations). The words
"hereof", "herein", "hereunder" and similar terms in this Agreement
refer to this Agreement as a whole and not to any particular provision
of this Agreement. The section and other headings contained in this
Agreement and the Table of Contents preceding this Agreement are for
reference only and shall not control or affect the construction of this
Agreement
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or the interpretation hereof in any respect. Section, subsection and
exhibit references are to this Agreement unless otherwise specified.
(b) As used herein and in the Notes or any certificate or
other document made or delivered pursuant hereto, accounting terms
relating to the Company and its Subsidiaries not defined in Section
1.01 (or if partly defined in Section 1.01, to the extent not defined)
shall have the respective meanings given to them under GAAP.
1.03. Accounting Principles.
(a) Except as otherwise provided in this Agreement, all
computations and determinations as to accounting or financial matters
and all financial statements to be delivered pursuant to this Agreement
shall be made and prepared in accordance with GAAP (including
principles of consolidation where appropriate), and all accounting or
financial terms shall have the meanings ascribed to such terms by GAAP.
(b) If any change in GAAP after the date of this Agreement is
or shall be required to be applied to transactions then or thereafter
in existence, and a violation of one or more provisions of this
Agreement shall have occurred or in the opinion of the Company would
likely occur which would not have occurred or be likely to occur if no
change in accounting principles had taken place,
(i) The parties agree that such violation shall not
be considered to constitute an Event of Default or a Potential
Default for a period of 30 days from the date the Company
notifies the Banks of the application of this subsection
1.03(b);
(ii) The parties agree in such event to negotiate in
good faith to attempt to draft an amendment of this Agreement
which shall approximate to the extent possible the economic
effect of the original financial covenants after taking into
account such change in GAAP; and
(iii) If the parties are unable to negotiate such an
amendment within 30 days of such notice by the Company, the
Company shall have the option of submitting the drafting of
such an amendment to a firm of independent certified public
accountants of nationally recognized standing acceptable to
the parties, which shall complete its draft of such amendment
within 90 days of submission; if the Company and the Required
Banks cannot agree, the firm shall be selected by binding
arbitration in the City of Charlotte, North Carolina in
accordance with the rules then in effect of the American
Arbitration Association. If the Company does not exercise such
option within said
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period, then as used in this Agreement, "GAAP" shall mean
generally accepted accounting principles in effect at the
Relevant Date. The parties agree that if the Company elects
the option set forth in this paragraph (iii) of subsection
1.03(b), until such firm has been selected and completes
drafting such amendment, no such violation shall constitute an
Event of Default or a Potential Default.
(c) If any change in GAAP after the date of this Agreement is
required to be applied to transactions or conditions then or thereafter
in existence, and the Required Banks shall assert that the effect of
such change is or shall likely be to distort materially the effect of
any of the definitions of financial terms in Section 1.01 hereof or any
of the covenants of the Company in Section 6 hereof (the "Financial
Provisions"), so that the intended economic effect of any of the
Financial Provisions will not in fact be accomplished,
(i) The Agent shall notify the Company of such
assertion, specifying the change in GAAP which is objected to,
and until otherwise determined as provided below, the
specified change in GAAP shall not be made by the Company in
its financial statements for the purpose of applying the
Financial Provisions; and
(ii) The parties shall follow the procedures set forth in
paragraph (ii) and the first sentence of paragraph (iii) of
subsection (b) of this Section 1.03. If the parties are unable
to agree on an amendment as provided in said paragraph (ii)
and if the Company does not exercise the option set forth in
the first sentence of said paragraph (iii) within the
specified period, then as used in this Agreement "GAAP" shall
mean generally accepted accounting principles in effect at the
Relevant Date, except that the specified change in GAAP which
is objected to by the Required Banks shall not be made in
applying the Financial Provisions. The parties agree that if
the Company elects the option in the first sentence of said
paragraph (iii), until such independent firm has been selected
and completes drafting such amendment, the specified change in
GAAP shall not be made in applying the Financial Provisions.
(d) All expenses of compliance with this Section 1.03
shall be paid for by the Company.
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SECTION 2. THE LOANS
2.01. Revolving Loans. Subject to the terms and conditions and relying
upon the representations and warranties herein set forth, each Bank severally
agrees (such agreement being herein called such Bank's "Commitment") to make
Revolving Loans, some of which may be Rollover Loans, to the Company at any time
or from time to time on or after the Effective Date and prior to the Revolving
Expiration Date in an aggregate principal amount not exceeding at any time
outstanding such Bank's Applicable Commitment Percentage of the Total
Commitment. The amount, designated as the "Original Commitment Amount", of each
Bank's Commitment as of the Effective Date is set opposite such Bank's signature
to this Agreement.
2.02. Competitive Bid Loans.
(a) Making of Competitive Bid Loans. In addition to Revolving
Loans, the Company may, as set forth in this Section 2.02, request the
Banks to make offers to make one or more Competitive Bid Loans to the
Company at any time or from time to time on or after the Effective Date
and prior to the Revolving Expiration Date. Each Bank may, but shall
have no obligation to, make one or more such offers and the Company
may, but shall have no obligation to, accept any such offers in the
manner set forth in this Section 2.02. Competitive Bid Loans may be
Absolute Rate Loans or EURO-based Loans (each a "type" of Competitive
Bid Loan), provided that the aggregate principal amount of all
Competitive Bid Loans at any one time outstanding shall not exceed the
Total Commitment and shall be in accordance with Section 2.03 hereof.
(b) Competitive Bid Quote Requests. When the Company wishes to
request offers to make Competitive Bid Loans under this Section 2.02,
it shall transmit to the Agent by telex or telecopy, at its Office,
notice (a "Competitive Bid Quote Request") so as to be received no
later than 11:00 a.m. Charlotte, North Carolina time on (x) the fourth
Business Day prior to the date of borrowing proposed therein, in the
case of a LIBOR Auction or (y) the Business Day next preceding the date
of borrowing proposed therein, in the case of an Absolute Rate Auction
(or, in either case, such other time on such date prior to 3:00 p.m. as
the Company and Agent may agree). The Company may request offers to
make Competitive Bid Loans for up to three different Interest Periods
in a single notice; provided that the request for each separate
Interest Period shall be deemed to be a separate Competitive Bid Quote
Request for a separate borrowing (a "Competitive Bid Borrowing"). Each
such notice shall be substantially in the form of Exhibit E hereto and
in any case shall specify as to each Competitive Bid Borrowing:
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(i) the proposed date of such Competitive Bid
Borrowing, which shall be a Business Day;
(ii) the aggregate amount of such Competitive Bid
Borrowing, which shall be at least $10,00,000 (or a higher
integral multiple of $1,000,000) but shall not cause the
limits specified in Section 2.03 hereof to be violated;
(iii) the duration of the Interest Period applicable
thereto, subject to the provisions of the definition of
"Interest Period" (including without limitation that no such
Interest Period shall end after the Revolving Expiration
Date); and
(iv) whether the Competitive Bid Quotes requested are to
set forth a EURO-based Margin or an Absolute Rate. No
Competitive Bid Quote Request shall be given within four
Business Days of any other Competitive Bid Quote Request
requesting a EURO Auction or within one Business Day of any
other Competitive Bid Quote Request requesting an Absolute
Rate Auction (or such other number of days as the Company and
Agent may agree).
(c) Invitation for Competitive Bid Quotes. Not later than 3:00
p.m. Charlotte, North Carolina time on the date of receipt of a
Competitive Bid Quote Request, the Agent shall transmit to the Banks by
telex or telecopy notice of such request, which notice shall constitute
an invitation by the Company to each Bank to submit Competitive Bid
Quotes offering to make Competitive Bid Loans in accordance with such
Competitive Bid Quote Request.
(d) Submission and Contents of Competitive Bid Quotes.
(i) Each Bank may submit one or more Competitive Bid Quotes,
each containing an offer to make a Competitive Bid Loan in
response to any Competitive Bid Quote Request; provided that,
if the Company's request under Section 2.02(b) hereof
specifies more than one Interest Period, such Bank may make a
single submission containing one or more Competitive Bid
Quotes for each such Interest Period. Each Competitive Bid
Quote must comply with the requirements of this Section
2.02(d) and must be submitted to the Agent by telex or
telecopy at its Office not later than (x) 12:00 Noon
Charlotte, North Carolina time on the third Business Day prior
to the proposed date of borrowing, in the case of a EURO
Auction or (y) 10:00 a.m. Charlotte, North Carolina time on
the proposed date of borrowing, in the case of an Absolute
Rate Auction (or, in either case upon reasonable notice to the
Banks, such other time and date as the Company and the Agent
may agree); provided that any Competitive Bid
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Quote submitted by the Agent (or an affiliate of the Agent) in
the capacity of a Bank may be submitted, and may only be
submitted, if the Agent (or such affiliate) notifies the
Company of the terms of the offer or offers contained therein
not later than (x) 11:30 a.m. Charlotte, North Carolina time
on the third Business Day prior to the proposed date of
borrowing, in the case of a EURO Auction or (y) 9:30 a.m.
Charlotte, North Carolina time on the proposed date of
borrowing, in the case of an Absolute Rate Auction. Subject to
Sections 2.13, 3, 4.01, 4.03, 6 and 7, any Competitive Bid
Quote so made shall be irrevocable except with the written
consent of the Agent given on the instructions of the Company.
(ii) Each Competitive Bid Quote shall be substantially in
the form of Exhibit F hereto and shall in any case specify:
(A) the proposed date of borrowing and the
Interest Period therefor;
(B) the principal amount of the Competitive
Bid Loan for which each such offer is being made,
which principal amount shall be at least $5,000,000
or a higher integral multiple of $1,000,000; provided
that the aggregate principal amount of all
Competitive Bid Loans for which a Bank submits
Competitive Bid Quotes (x) may be greater than, less
than or equal to the Commitment of such Bank but (y)
may not exceed the principal amount of the
Competitive Bid Borrowing for which offers were
requested in the related Competitive Bid Quote
Request;
(C) in the case of a EURO Auction, the
margin above (or, if a negative margin is offered,
below) the applicable LIBOR-Rate (the "EURO-based
Margin") offered for each such Competitive Bid Loan,
expressed as a percentage (rounded upwards, if
necessary, to the nearest 1/10,000th of 1%) to be
added to the applicable EURO-Rate;
(D) in the case of an Absolute Rate Auction,
the rate of interest per annum, calculated on the
basis of a 360-day year (rounded upwards, if
necessary, to the nearest 1/10,000th of 1%) (the
"Absolute Rate") offered for each such Facility B
Loan; and
(E) the identity of the quoting Bank.
(iii) No Competitive Bid Quote shall contain
qualifying, conditional or similar language or propose
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terms other than or in addition to those set forth in the
applicable Competitive Bid Quote Request and, in particular,
no Competitive Bid Quote may be conditioned upon acceptance by
the Company of all (or some specified minimum) of the
principal amount of the Competitive Bid Loan for which such
Competitive Bid Quote is being made, and the Agent shall
disregard any Competitive Bid Quote that contains such
language or terms or conditions or that arrives at the Agent's
Office after the time set forth for submission of Competitive
Bid Quotes in Section 2.02(d)(i) hereof.
(e) Notice to the Company. The Agent shall (x) in the case of
a EURO Auction, by 1:00 p.m. Charlotte, North Carolina time on the day
(which shall be a Business Day) a Competitive Bid Quote is submitted or
(y) in the case of an Absolute Rate Auction, by 10:30 a.m. Charlotte,
North Carolina time on the day (which shall be a Business Day) a
Competitive Bid Quote is submitted, notify the Company by telex or
telecopy of the terms (i) of any Competitive Bid Quote submitted by a
Bank that is in accordance with Section 2.02(d) hereof and (ii) of any
Competitive Bid Quote that amends, modifies or is otherwise
inconsistent with a previous Competitive Bid Quote submitted by such
Bank with respect to the same Competitive Bid Quote Request. Any such
subsequent Competitive Bid Quote shall be disregarded by the Agent
unless such subsequent Competitive Bid Quote is submitted solely to
correct a manifest error in such former Competitive Bid Loan for which
offers have been received for each Interest Period specified in the
related Competitive Bid Quote Request, (B) the respective principal
amounts and LIBOR-Rate Margins or Absolute Rates, as the case may be,
so offered by each Bank, identifying the Bank that made each
Competitive Bid Quote and (C) if the Agent is notifying the Company of
more than one Competitive Bid Quote for a single Interest Period, the
Agent shall arrange the Competitive Bid Quotes in ascending yield
order.
(f) Acceptance and Notice by the Company. Not later than (x)
1:30 p.m. Charlotte, North Carolina time on the third Business
Day prior to the proposed date of the borrowing, in the case
of a LIBOR Auction or (y) 10:45 a.m. Charlotte, North Carolina
time the proposed date of the borrowing, in the case of an
Absolute Rate Auction (or, in either case upon reasonable
prior notice to the Banks, such other time and date as the
Company and the Agent may agree), the Company shall notify the
Agent by telex or telecopy at its Office of its acceptance or
nonacceptance of the offers so notified to it pursuant to
Section 2.02(e) hereof (and the failure of the Company to give
such notice by such time shall constitute nonacceptance) and
the Agent shall promptly notify each affected Bank in
accordance with Section 2.02(h) hereof. In the case of
acceptance, such notice shall specify the
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aggregate principal amount of offers for each Interest Period
that are accepted. The Company may accept any Competitive Bid
Quote in whole or in part (provided that any Competitive Bid
Quote accepted in part shall be at least $5,000,000 or a
higher integral multiple of $1,000,000); provided that:
(i) the aggregate principal amount of each Competitive Bid
Borrowing may not exceed the applicable amount set forth in
the related Competitive Bid Quote Request;
(ii) the aggregate principal amount of each Competitive
Bid Borrowing shall be at least $10,000,000 (or a higher
integral multiple of $1,000,000) but shall not cause the
limits specified in Section 2.03 hereof to be violated;
(iii) acceptance of offers may be made only in ascending
order of EURO-based Margins or Absolute Rates, as the case may
be; and
(iv) the Company may not accept any offer where the Agent
has advised the Company that such offer fails to comply with
Section 2.02(d)(ii) hereof or otherwise fails to comply with
the requirements of this Agreement (including, without
limitation, Section 2.03 hereof).
(g) Allocation by Agent. If offers are made by two or more
Banks with the same EURO-based Margins or Absolute Rates, as the case
may be, for a greater aggregate principal amount than the amount in
respect of which offers are accepted for the related Interest Period,
the principal amount of Competitive Bid Loans in respect of which such
offers are accepted shall be allocated by the Agent among such Banks as
nearly as possible (in such multiples, not less than $1,000,000, as the
Agent may deem appropriate) in proportion to the aggregate principal
amount of such offers. If two or more such offers cannot be allocated
evenly within the limits set forth in the immediately preceding
sentence, the Agent shall have discretion to allocate a larger share of
such Competitive Bid Loans to one or more of the successful Banks and
in making such allocation shall use reasonable efforts to take into
account previous allocations of unequal shares to one or more of such
Banks in connection with other Competitive Bid Loans. Determinations by
the Agent of the amounts of Competitive Bid Loans to be allocated to
each such Bank shall be conclusive absent manifest error.
(h) Notice to Banks. On the date the Company notifies the
Agent of its acceptance of one or more of the offers made by any Bank
or Banks pursuant to Section 2.02(f) hereof, the Agent shall (x) not
later than 4:00 p.m. Charlotte, North Carolina time on such date, in
the case of a EURO Auction or
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(y) as promptly as practicable on such date, in the case of an Absolute
Rate Auction notify each Bank which has made an offer (i) of the
aggregate amount of each Competitive Bid Borrowing with respect to
which the Company accepted one or more offers and such Bank's share of
such Competitive Bid Borrowing or (ii) that the Company accepted no
offers, such notice to be by telex or telecopy.
(i) Funding of Competitive Bid Loans. Any Bank whose offer to
make any Competitive Bid Loan has been accepted shall, not later than
1:00 p.m. Charlotte, North Carolina time on the date specified in the
related Competitive Bid Quote Request for the making of such
Competitive Bid Loan, make the amount of such Competitive Bid Loan
available to the Company at the Agent's Office in immediately available
funds. If any Bank makes a new Competitive Bid Loan hereunder on a day
on which the Company is to repay all or any part of an outstanding
Competitive Bid Loan from such Bank, such Bank shall apply the proceeds
of its new Competitive Bid Loan to make such repayment and only an
amount equal to the difference (if any) between the amount being
borrowed and the amount being repaid shall be made available by such
Bank to the Company as provided by this Section 2.02(i), or remitted by
the Company to the Agent as provided in Section 2.12 hereof, as the
case may be.
(j) Competitive Bid Maturity Dates. The principal amount of
each Competitive Bid Loan shall be due and payable on the last day of
the applicable Interest Period specified in the related Competitive Bid
Quote Request (the "Competitive Bid Maturity Date").
(k) Competitive Bid Interest Payment Dates. Interest on
each Competitive Bid Loan shall be due and payable on the
Competitive Bid Maturity Date thereof and thereafter on demand
at the rates provided for in Section 2.02(o).
(l) No Reduction of Commitment. The amount of any
Competitive Bid Loan made by any Bank shall neither constitute
a utilization of, nor reduce, such Bank's Commitment, except
by application of Section 2.03 hereof.
(m) Register. The Agent shall maintain a register for the recordation
of the names and addresses of Banks that have made Competitive Bid
Loans and the principal amount of the Competitive Bid Loans owing to
each Bank from time to time together with the Competitive Bid Maturity
Dates and interest rates applicable to each such Competitive Bid Loan,
and other terms applicable thereto (the "Register"). The entries in the
Register shall be prima facie evidence with respect to the entries
therein. The Register shall be available for inspection by the Company
or any Bank at any reasonable time and from time to time upon
reasonable prior notice.
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(n) Interest Rates for Competitive Bid Loans. The
outstanding principal amount of each Competitive Bid Loan
shall bear interest for each day until due at the following
rate or rates per annum:
(i) For each EURO-based Loan, a rate per annum equal
to the EURO Rate applicable to the Interest Period therefor
plus the EURO-based Margin quoted by the Bank making such Loan
in the related Competitive Bid Quote submitted in accordance
with Section 2.02(d) hereof; and
(ii) For each Absolute Rate Loan, a rate per annum equal
to the Absolute Rate quoted by the Bank making such Loan in
the related Competitive Bid Quote submitted in accordance with
Section 2.02(d) hereof.
(o) Interest After Maturity for Competitive Bid Loans. After
the principal amount of any Competitive Bid Loan shall have become due
(by acceleration or otherwise), such Loan shall bear interest for each
day until paid (before and after judgment) (i) until the Competitive
Bid Maturity Date of the applicable Interest Period of such Loan, at a
rate per annum 1% above the rate otherwise applicable to such Loan and
(ii) thereafter the greater of (x) 1% above the Prime Rate on the day
such Loan became due and (y) 1% above the current Prime Rate from time
to time, such interest rate to change automatically from time to time
effective as of the effective date of each change in the Prime Rate.
(p) Computation of Interest on Competitive Bid Loans.
Interest on Competitive Bid Loans hereunder hall be computed
on the basis of a year of 360 days and actual days elapsed.
2.03. Available Amounts of Loans. The aggregate amount of Loans at any
one time outstanding shall not exceed the Total Commitment. No Loan shall be
made or requested hereunder if the making of such Loan would cause the aggregate
principal amount of all Loans outstanding hereunder to exceed the Total
Commitment. Reference is made to Section 6.01(c) with respect to available
amounts of Loans.
2.04. Borrowing, Repayment and Reborrowing of Revolving Loans; Pro Rata
Sharing of Revolving Loans. Within the aforesaid limits of time and amount set
forth in Sections 2.01 and 2.03, and subject to Section 2.07(b) hereof (with
respect to termination or reduction of the Commitments) and all other applicable
provisions of this Agreement, the Company may borrow, repay and reborrow
Revolving Loans hereunder on and after the Effective Date and prior to the
Revolving Expiration Date. Each Bank shall be obligated to advance its
Applicable Commitment Percentage of each Set of Revolving Loans hereunder, but
the aggregate principal amount of each Bank's Revolving Loans hereunder shall
never exceed the amount of its Applicable Commitment Percentage of the Total
Commitment.
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2.05. The Notes.
(a) The obligation of the Company to repay the unpaid
principal amount of the Revolving Loans made by each Bank and to pay interest
thereon shall be evidenced by a single promissory note of the Company (a
"Revolving Note") in substantially the form attached hereto as Exhibit D, with
the blanks appropriately filled. Each such Revolving Note shall be dated as of
the date of this Agreement, shall bear interest as specified pursuant to Section
2.09(a) or as otherwise provided herein, and shall be payable to the order of
the Bank named as payee therein in a face amount equal to the Dollar amount of
such Bank's Applicable Commitment Percentage as set forth opposite its signature
hereto. The Revolving Notes shall be delivered by the Company to the Agent at or
prior to the closing of the first Set of Revolving Loans to be made hereunder on
or after Effective Date and the Agent shall promptly forward such Revolving
Notes to the respective Banks. Each Bank which is a party to the Prior
Agreement, upon such receipt of its Revolving Note from the Agent, shall
promptly deliver to the Agent the Revolving Note previously delivered by the
Company pursuant to the Prior Agreement and the Agent shall promptly forward the
same to the Company.
(b) The outstanding principal amount of each Revolving Loan
evidenced by each Revolving Note from time to time, the Revolving Loan Maturity
Date of such Revolving Loan and the rate of interest and the amount of accrued
and unpaid interest payable in respect thereof shall be determined from the
records of the Agent, which shall be conclusive absent manifest error. In the
event the holder of a Revolving Note shall assign said Revolving Note, it shall
attach thereto a schedule, which shall be verified by the Agent, setting forth
the then outstanding principal amount of each Revolving Loan evidenced by such
Revolving Note and the Revolving Loan Maturity Date thereof.
(c) The obligation of the Company to repay the unpaid
principal amount of any Competitive Bid Loans made by any Bank and to pay
interest thereon shall be evidenced by a single promissory note of the Company
(a "Competitive Bid Note") in substantially the form attached hereto as Exhibit
C, with the blanks appropriately filled. The Competitive Bid Loan Note payable
to each Bank shall be dated as of the date of this Agreement, shall bear
interest as provided in Section 2.02(n) or as otherwise provided herein, and
shall be payable to the order of the Bank named as payee therein in a face
amount equal to the Total Commitment. The Competitive Bid Loan Note for each
Bank shall be delivered by the Company to the Agent at the Effective Date and
the Agent shall promptly forward such Competitive Bid Loan Note to such Bank.
Each Bank, upon such receipt of its Note from the Agent, shall promptly deliver
to the Agent the Note previously delivered by the Company under this Section
2.05(c) and the Agent shall promptly forward the same to the Company.
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(d) The outstanding principal amount of each Competitive Bid
Loan evidenced by each Competitive Bid Loan Note from time to time, the
Competitive Bid Loan Maturity Date of such Competitive Bid Loan and the rate of
interest and the amount of accrued and unpaid interest payable in respect
thereof shall be determined from the records of the Agent, which shall be
conclusive absent clear error. In the event the holder of a Competitive Bid Loan
Note shall assign said Competitive Bid Loan Note, it shall attach thereto a
schedule, which shall be verified by the Agent, setting forth the then
outstanding principal amount of each Competitive Bid Loan evidenced by such
Competitive Bid Loan Note and the Competitive Bid Loan Maturity Date thereof.
2.06. Making of Revolving Loans; Standard Notice. (a) Whenever the
Company desires that the Banks make a Set of Revolving Loans hereunder, the
Company shall provide Standard Notice to the Agent at its Office, setting forth
the following information:
(i) The date, which shall be a Business Day, on which
such Set of Revolving Loans is to be made;
(ii) The total principal amount of such Set of Revolving Loans,
which shall be an integral multiple of $1,000,000 conforming to the
provisions of Section 2.09(c) hereof;
(iii) The interest rate Option applicable to such Set of
Revolving Loans, selected in accordance with Section 2.09(a)
hereof; and
(iv) The Maturity Period for such Set of Revolving Loans selected
in accordance with Section 2.09(b) hereof.
Standard Notice having been so provided, the Agent shall promptly notify each
Bank of the information contained therein and of such Bank's proportionate share
of the aggregate proposed borrowing. On the borrowing date specified in such
notice (i) if the Revolving Loans described in such notice are Rollover Loans
(or to the extent the same are Rollover Loans), the proceeds thereof shall be
applied by the Agent directly against the amounts due and payable on the prior
Revolving Loans refunded in whole or in part by such Rollover Loans, pro rata in
accordance with the amount due each Bank, or (ii) if the Revolving Loans
described in such notice are not Rollover Loans (or to the extent the same are
not Rollover Loans), each Bank shall make the proceeds of its Revolving Loan
available to the Company at the Agent's Office not later than 11:00 o'clock
a.m., Charlotte, North Carolina time, on the specified borrowing date, in
immediately available funds.
(b) Absent contrary notice from the Company by 10:00 o'clock
a.m., Charlotte, North Carolina time, one Business Day prior to any Revolving
Loan Maturity Date (other than the Revolving Expiration Date), and subject to
the provisions of Section 2.09(c) hereof so long as no Potential Default or
Event of
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Default has occurred and is continuing, the Company shall, at the option of the
Agent, be deemed to have given the Agent notice at such time pursuant to Section
2.04(a) to the effect that the Company requests that the Banks make a Set of
Prime Rate Loans to the Company on such Revolving Loan Maturity Date in
aggregate principal amount equal to the aggregate principal amount of the Loans
becoming due and payable on such Revolving Loan Maturity Date.
2.07. Facility Fees; Termination or Reduction of Commitments;
Increase in Commitment.
(a) Facility Fees. The Company agrees to pay to the Agent for
the account of each Bank, as consideration for such Bank's Commitment hereunder,
a per annum fee (the "Facility Fee") equal to the Applicable Margin for the
Facility Fee times each such Bank's Commitment from the Effective Date to and
including the Revolving Expiration Date. Such fees shall be payable quarterly on
the first day of each January, April, July and October after the date hereof,
commencing April 1, 1996, and on the Revolving Expiration Date or upon the
earlier termination of the Commitments, for the preceding period for which such
fees have not been paid.
(b) Termination or Reduction of Commitments. (i) From and
after the 91st day following the Effective Date the Company may at any time or
from time to time terminate in whole the Commitments of the Banks if no
Revolving Loans are then outstanding, or reduce ratably in part the respective
Commitments to an aggregate amount not less than the total Loans then
outstanding, by giving not less than three Business Days' notice (which shall be
irrevocable) to such effect to the Agent; provided that any such partial
reduction shall be in an aggregate principal amount of $5,000,000 or any higher
amount in increments of $1,000,000. The Agent shall promptly advise each Bank of
the date of any such termination of the Commitments and of the date and amount
of each such reduction of Commitments. Each such reduction shall be permanent
and may not be re-instated, and commencing on the date thereof the Facility Fees
shall be calculated upon the amount of the Commitments as so reduced.
(ii) From and after the Effective Date the amount of the Total
Commitment shall be permanently reduced by the net proceeds from the sale,
transfer or other disposition of assets of the Company and its Subsidiaries not
otherwise permitted pursuant to Section 6.05 hereof. The Company shall give the
Agent written notice of receipt of net proceeds and to the extent that such net
proceeds exceed the unused amount of the Total Commitment shall reduce the
outstanding loans by such excess. Each such reduction shall be permanent and
commencing on the date thereof the Facility Fees shall be calculated upon the
amount of the Commitments as so reduced.
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(c) Increase in Total Commitment. The Company may request that
the Banks increase the Total Commitment to up to $220,000,000 upon the giving at
least ninety (90) days prior written notice to the Agent setting forth the
amount of such increase (the "Increase Amount"). The Agent shall give each Bank
prompt notice of the Increase Amount. Each Bank shall notify the Agent within
thirty (30) days of receipt of such notice of the amount, if any, of the
Increase Amount which it is willing to agree to lend. The Agent shall give the
Company a statement summarizing the portion of the Increase Amount which each
Bank has agreed to lend and the Company and the Agent shall determine within
thirty (30) days the portion of the Increase Amount to be allocated to each
Bank. The Company shall cause there to be executed and delivered to the Agent at
or prior to the effective date of the increase in the Total Commitment new Notes
representing such increase, together with such resolutions, opinions,
certificates and other instruments as the Agent shall reasonably request,
including a certificate of a Responsible Officer reaffirming as of the date of
such increase all of the representations and warranties set forth in Section 3
hereof. Each Bank in its sole discretion shall determine whether to make
available any portion of the Increase Amount, and nothing contained in this
Section 2.08(c) shall be construed to require any increase by a Bank. Exhibit A
shall be amended at the time of such increase to reflect the new Applicable
Commitment Percentage of each Bank. Any fees payable by reason of the increase
in the Total Commitment shall be due and payable on the date such increase
becomes effective.
2.08. Agent's Fees. In consideration of the Agent's services in
administering the credits provided for in this Agreement, the Company agrees to
pay the Agent an annual fee and competitive bid administrative fee in the amount
and at the times specified in a separate letter agreement between the Company
and the Agent.
2.09. Interest Rates; Maturity Periods Etc. for Revolving
Loans.
(a) Optional Basis of Borrowing for Revolving Loans. The
outstanding principal amount of the Loans included in each Set of Revolving
Loans shall bear interest for each day until due on a single basis selected by
the Company from the interest rate Options set forth below, it being understood
that subject to the provisions of this Agreement the Company may select
different Options to apply simultaneously to different Sets of Revolving Loans:
(i) Prime Rate Option: A rate per annum for each day equal to
the Prime Rate for such day, such interest rate to change automatically
from time to time effective as of the effective date of each change in
the Prime Rate. "Prime Rate", as used herein, shall mean the greater of
(A) the interest rate per annum announced from time to time by
NationsBank, N.A. as its prime rate or (B) the Federal Funds Effective
Rate plus 1/2%.
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(ii) LIBOR-Rate Option. A rate per annum for each day obtained
by dividing (the resulting quotient to be rounded upward to the nearest
100th of 1%) the LIBOR-Rate for such day by a number equal to 1.00
minus the LIBOR-Rate Reserve Percentage and adding to the resulting
quotient the Applicable Margin.
"LIBOR-Rate" for any day, as used herein, shall mean with respect
to each proposed Set of LIBOR-Rate Loans a rate of interest (expressed
as a percentage and rounded upward if necessary to the nearest 1/100 of
1%) (which shall be the same for each day in the applicable LIBOR-Rate
Maturity Period) determined in good faith by the Agent in accordance
with its usual procedures (which determination shall be conclusive
absent manifest error and shall be based on review of the British
Bankers Association interest settlement rates as generally found on
page 3750 of the Telerate News Service) to be the average of the rates
per annum for deposits in Dollars offered to major money center banks
in the London interbank market at approximately 11:00 o'clock a.m.,
London time, two Business Days prior to the first day of such Revolving
Loan Maturity Period for delivery on the first day of such Revolving
Loan Maturity Period in amounts comparable to the amount of the
LIBOR-Rate Loan to be funded and having maturities comparable to such
Revolving Loan Maturity Period.
"LIBOR-Rate Reserve Percentage" for any day is the maximum
effective percentage (expressed as a decimal fraction, rounded upward
to the nearest 1/100 of 1%), as determined in good faith by the Agent
(which determination shall be conclusive absent manifest error), which
is in effect on such day as prescribed by the Board of Governors of the
Federal Reserve System (or any successor) for determining the reserve
requirements (including without limitation supplemental, marginal and
emergency reserve requirements) for a member bank of such System in
respect of Dollar funding in the London interbank market in respect of
any LIBOR-Rate Loan.
The Agent shall give prompt notice to the Company of the
LIBOR-Rate as so determined.
(b) Revolving Loan Maturity Periods. At any time when the Company shall
request the Banks to make a Set of Revolving Loans the Company shall fix the
term of such Revolving Loans (the "Revolving Loan Maturity Period" thereof),
which Revolving Loan Maturity Period shall be (i) the next Business Day in the
case of selection of the Prime Rate Option (a "Prime Rate Maturity Period") or
(ii) one month, two months, three months or six months in the case of selection
of the LIBOR-Rate Option (a "LIBOR-Rate Maturity Period"); provided, that:
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(i) Each Prime Rate Maturity Period which would otherwise end on a
day not a Business Day shall be extended to the next succeeding
Business Day;
(ii) Each LIBOR-Rate Maturity Period which would otherwise end on a
day which is not a Business Day shall be extended to the next
succeeding Business Day unless such Business Day falls in another
calendar month, in which case such Maturity Period shall end on the
next preceding Business Day; and
(iii) The Company may not fix a Revolving Loan Maturity Period which
would end after the Revolving Expiration Date when any Revolving Loan
is outstanding.
The last day of a Revolving Loan Maturity Period is herein sometimes called the
"Revolving Loan Maturity Date" thereof.
(c) Transactional Amounts. Every selection of an interest rate Option
and every prepayment of the Revolving Loans shall be in a principal amount such
that after giving effect thereto the aggregate outstanding principal amount of
the Prime Rate Loans and each Set of LIBOR-Rate Loans shall be as set forth in
the table below:
Type or Set of
Revolving Loans Allowable Aggregate Principal Amounts
Prime Rate Loans An integral multiple of $1,000,000
Each Set of An integral multiple of $1,000,000
LIBOR-Rate Loans but not less than $5,000,000
(d) Interest After Maturity. After the principal amount of any Prime
Rate Loan shall have become due (by acceleration or otherwise), such Loan shall
bear interest for each day until paid (before and after judgment) at a rate per
annum which shall be the greater of (i) 1% above the Prime Rate on the day such
Revolving Loan became due and (ii) 1% above the current Prime Rate from time to
time, such interest rate to change automatically from time to time effective as
of the effective date of each change in the Prime Rate. After the principal
amount of any LIBOR-Rate Loan shall have become due (by acceleration or
otherwise), such Loan shall bear interest for each day until paid (before and
after judgment) (iii) until the Revolving Loan Maturity Date of the currently
applicable Revolving Loan Maturity Period of such Revolving Loan, at a rate per
annum 1% above the rate otherwise applicable to such Revolving Loan and (iv)
thereafter in accordance with the previous sentence.
(e) Computation of Interest and Fees. Interest on Revolving Loans
hereunder shall be computed on the basis of a year of 360 days and actual days
elapsed and the Facility Fee shall be computed on the basis of a year of 365 or
366 days, as the case may be.
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(f) LIBOR-Rate Unascertainable; Impracticability. If
(i) on any date on which a LIBOR-Rate would otherwise be set
the Agent shall have in good faith determined (which determination
shall be conclusive absent manifest error) that adequate and reasonable
means do not exist for ascertaining such LIBOR-Rate; or
(ii) on any date on which a LIBOR-Rate would otherwise be set two
or more Banks shall have in good faith determined (which determination
shall be conclusive absent manifest error) that the effective cost to
each such Bank of funding its Revolving Loan to which such rate would
apply, will exceed the interest rate payable by the Company in respect
thereof under this Agreement; or
(iii) at any time any Bank shall have determined in good faith
(which determination shall be conclusive absent manifest error) that
the making, maintenance or funding by such Bank of any LIBOR-Rate Loan
has been made impracticable or unlawful by (A) the occurrence of a
contingency which materially and adversely affects the secondary market
for negotiable certificates of deposit maintained by dealers of
recognized standing or the interbank eurodollar market, as the case may
be, or (B) compliance by such Bank in good faith with any Law or
guideline or interpretation or administration thereof by any Official
Body charged with the interpretation or administration thereof or with
any request or directive of any such Official Body (whether or not
having the force of law);
then, and in any such event, such Bank or Banks, as the case may be, shall
forthwith so notify the Agent, and the Agent shall forthwith advise the other
Banks and the Company thereof. A certificate as to the specific circumstances
specified in such notice shall be promptly submitted by the Agent or such Bank
or Banks, as the case may be, to the Agent (which shall promptly confirm the
same to the Company and the other Banks).
Upon such date as shall be specified in such notice (which shall not be
earlier than the date such notice is given) the obligation of each of the Banks
to allow the Company to select the LIBOR-Rate Option shall be suspended until
the Agent shall have determined or the Bank or Banks furnishing such notice
shall have later notified the Agent of its or their determination in good faith
(which determination shall be conclusive) that the circumstances giving rise to
such previous determination no longer exist.
If a Bank notifies the Agent of a determination under subsection
2.09(f)(iii) the Revolving Loans covered by such notice which are then
outstanding shall be due and payable on the date specified in such notice.
Absent contrary notice from the Company to the Agent by 10:00 o'clock a.m.,
Charlotte, North Carolina time,
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one Business day prior to such date, the Company shall, at the option of the
Agent, be deemed to have notified the Agent at such time pursuant to Section
2.07(a) to the effect that the Company requests the Banks to make a Set of Prime
Rate Loans to the Company on such date for a Revolving Loan Maturity Period of
30 days in aggregate principal amount equal to the aggregate principal amount of
the outstanding Loans covered by such notice.
If at the time the Agent or any Bank or Banks make(s) a determination
under subsection 2.09(f)(i) or (ii) in respect of the LIBOR-Rate Option, the
Company has previously notified the Agent that it wishes to select that Option
in respect of a proposed Set of Revolving Loans, but such Option has not yet
gone into effect, such notification shall be deemed to provide for selection of
the Prime Rate Option instead.
2.10. Prepayments. Subject to the provisions of Section
2.13(b) the Company shall have the right at its option from time to
time to prepay (or in the case of clause (b) below, pay) the
Revolving Loans in whole or part without premium or penalty:
(a) at any time with respect to any Set of Prime Rate
Loans,
(b) on the Revolving Loan Maturity Date of any Set of
LIBOR-Rate Loans, as to such Loans, or
(c) on the date specified in a notice given by the Agent or
any Bank pursuant to Section 2.09(f) hereof with respect to any of the
LIBOR-Rate Loans.
Whenever the Company desires to prepay all or any part of the Revolving Loans,
it shall provide Standard Notice to the Agent setting forth the following
information:
(d) The date, which shall be a Business Day, on which
the proposed prepayment is to be made;
(e) The total principal amount of such prepayment, which shall
be the sum of the principal amounts selected pursuant to clause (f)
below; and
(f) The principal amounts selected in accordance with Section
2.09(c) hereof of each Set of Prime Rate Loans or LIBOR-Rate Loans, as
the case may be, to be prepaid in whole or in part.
Standard Notice having been so provided, on the date specified in such notice
the principal amount of the Revolving Loans specified in such notice, together
with interest on such principal amount to such date, shall be due and payable.
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2.11. Interest Payment Dates. Interest on each Set of LIBORRate Loans
shall be due and payable on the Maturity Date thereof and thereafter on demand,
and if any Maturity Period is longer than three months also on the last Business
Day of the third month of such Maturity Period. Interest on Prime Loans shall be
due and payable quarterly on the first day of each January, April, July and
October, beginning January 1, 1996.
2.12. Pro Rata Treatment and Payments. Each Set of Revolving Loans made
by the Banks hereunder shall be made by them ratably based on their Applicable
Commitment Percentages until the Revolving Expiration Date; provided, that the
failure of any Bank to fund any particular Revolving Loan shall not relieve any
other Bank of its obligation to lend hereunder nor in any way alter or modify
such obligation of any Bank. Each payment or prepayment against an outstanding
Set of Revolving Loans hereunder shall (except as otherwise provided in Sections
2.13 and 2.14) be applied pro rata to such Revolving Loans in proportion to the
outstanding principal amount of each on the date of such payment or prepayment.
All payments and prepayments to be made in respect of principal, interest,
Facility Fee or other amounts due from the Company in connection with Loans
hereunder or under any Note shall be payable at 12:00 o'clock Noon, Charlotte,
North Carolina time, on the day when due without presentment, demand, protest or
notice of any kind, all of which are hereby expressly waived, and an action
therefor shall immediately accrue. Such payments shall be made to the Agent at
its Office in Dollars in funds immediately available at such Office without
setoff, counterclaim or other deduction of any nature, and shall be distributed
by the Agent in immediately available funds on the day received by the Agent to
each Bank pro rata, except as aforesaid. All payments to be made in respect of
principal, interest, fees or other amounts due from the Company in connection
with Competitive Bid Loans hereunder or under any Competitive Bid Note shall be
payable at 12:00 Noon, Charlotte, North Carolina time, on the date due without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived, and an action therefore shall immediately accrue. Such
payments shall be made to the Agent at its office without setoff, counterclaim
or deduction of any nature (except as permitted by Section 2.02(i) hereof), and
shall be distributed by the Agent in immediately available funds on the day
received by the Agent to the Bank which made the Competitive Bid Loan to which
such payment relates. To the extent permitted by law, after there shall have
become due (by acceleration or otherwise) interest, Facility Fees or any other
amounts due from the Company hereunder or under the Notes (excluding overdue
principal, which shall bear interest as described in Section 2.09(d) hereof, but
including interest payable under this Section 2.12), such amounts shall bear
interest for each day until paid (before and after judgment), payable on demand,
at a rate per annum 1.25% above the then current Prime Rate, such interest rate
to change automatically from time to time effective as of the effective date of
each change in the Prime Rate. The Company shall, at the time of making each
payment under this
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Agreement or any Note, specify to the Agent the Loan or Loans or other amounts
payable by the Company hereunder to which such payment is to be applied (and if
the Company fails to so specify, or if an Event of Default has occurred and is
continuing, the Agent may distribute such payment to the Banks in such manner as
it or the Required Banks may determine to be appropriate, provided that any
payment so directed to pay any Revolving Loans shall be made in accordance with
this Section 2.12).
2.13. Additional Compensation in Certain Circumstances.
(a) Increased Costs or Reduced Return Resulting From Taxes, Reserves,
Capital Adequacy Requirements, Expenses, etc. If any Law or guideline or
interpretation or application thereof by any Official Body charged with the
interpretation or administration thereof or compliance with any request or
directive of any Official Body (whether or not having the force of law), now
existing or hereafter adopted:
(i) subjects a Bank or its Notional LIBOR-Rate Funding Office
to any new tax or changes the basis of taxation with respect to this
Agreement, the Notes, the Loans or payments by the Company of
principal, interest, Facility Fee or other amounts due hereunder or
under the Notes (except for taxes on the overall net income of a Bank
or such Notional LIBOR-Rate Funding Office imposed by the country,
state, county, city or equivalent jurisdiction in which the Bank's
principal executive office or Notional LIBOR-Rate Funding Office is
located),
(ii) imposes, modifies or deems applicable any reserve, special
deposit or similar requirement against credits or commitments to extend
credit extended by, or assets (funded or contingent) of, deposits with
or for the account of or other acquisitions of funds by, a Bank or its
Notional LIBOR-Rate Funding Office (other than requirements expressly
included herein in the determination of the LIBOR-Rate hereunder),
(iii) imposes, modifies or deems applicable any capital adequacy or
similar requirement (A) against assets (funded or contingent) of, or
credits or commitments to extend credit extended by, a Bank or its
Notional LIBOR-Rate Funding Office, or (B) otherwise applicable to the
obligations of a Bank or its Notional LIBOR-Rate Funding Office under
this Agreement, or
(iv) imposes upon a Bank or its Notional LIBOR-Rate Funding Office
any other condition or expense with respect to this Agreement, the
Notes or the making, maintenance or funding of any part of the Loans,
and the result of any of the foregoing is to increase the cost to, reduce the
income receivable by, or impose any expense (including
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loss of margin) upon such Bank or its Notional LIBOR-Rate Funding Office with
respect to this Agreement, the Notes or the making, maintenance or funding of
any part of the Loans (or, in the case of any capital adequacy or similar
requirement, to have the effect of reducing the rate of return on such Bank's
capital, taking into consideration such Bank's policies with respect to capital
adequacy) by an amount which such Bank deems to be material (each Bank being
deemed for this purpose to have made, maintained or funded its LIBOR-Rate Loans
from a Corresponding Source of Funds), such Bank shall from time to time notify
the Company of the amount determined in good faith (using any reasonable
averaging and attribution methods) by such Bank (which determination shall be
conclusive) to be necessary to compensate such Bank or such Notional LIBOR-Rate
Funding Office for such increase, reduction or imposition. Such amount shall be
due and payable by the Company to such Bank ten Business Days after such notice
is given. A certificate by such Bank as to the amount due under this Section
2.13(a) from time to time and describing in reasonable detail the determination
of such amount shall be conclusive absent manifest error. Each Bank agrees that
it will use good faith efforts to notify the Company of the occurrence of any
event that would give rise to a payment under this Section 2.13(a); provided,
however, that any failure of a Bank to give any such notice for a period of
three months after the Maturity Date of the first Maturity Period or Interest
Period, as the case may be, as to which such payment relates shall have no
effect on the Company's obligations hereunder.
(b) Indemnity. In addition to the compensation required by Section
2.13(a) hereof, the Company shall indemnify each Bank against any loss or
expense (including loss of margin) which such Bank sustains or incurs as a
consequence of any
(i) payment or prepayment by the Company of any of such Bank's
LIBOR-Rate Loans on a day other than the Maturity Date thereof,
(ii) payment by the Company of any of such Bank's Competitive
Bid Loans on a day other than the Maturity Date therefor,
(iii) attempt by the Company to revoke (expressly, by later
inconsistent notices or otherwise) in whole or part any notice stated
herein to be irrevocable (the Banks collectively, but not singly,
having in their sole discretion the options (A) to give effect to such
attempted revocation and obtain indemnity under this Section 2.13(b) or
(B) to treat such attempted revocation as having no force or effect, as
if never made), or
(iv) default by the Company in the performance or observance
of any covenant or condition contained in this Agreement or the Notes,
including without limitation any
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failure of the Company to pay when due (by acceleration or otherwise)
any principal, interest, commitment fee or any other amount due
hereunder or under a Note.
If a Bank sustains or incurs any such loss or expense it shall from time to time
notify the Agent of the amount determined in good faith by such Bank (which
determination shall be conclusive absent manifest error) to be necessary to
indemnify such Bank for such loss or expense, and the Agent shall promptly so
notify the Company. Such amount shall be due and payable by the Company to such
Bank ten Business Days after such notice is given.
2.14. Regulation D Costs. Without duplication of or limitation by
Section 2.13, if any Bank determines in good faith that it has incurred or is
incurring any reserve costs under Regulation D of the Board of Governors of the
Federal Reserve System from time to time in effect (or any successor or other
regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal Reserve System)
with respect to Eurocurrency liabilities, which costs such Bank determines are
attributable to making, funding or maintaining any of its LIBOR-Rate Loans
hereunder, then, within ten Business Days of demand by such Bank, the Company
shall pay such Bank the amount of such reserve costs so incurred as reasonably
determined by such Bank.
2.15. Funding by Branch, Subsidiary or Affiliate.
(a) Notional Funding. Each Bank shall have the right from time to time,
prospectively or retrospectively, without notice to the Company, to deem any
branch, subsidiary or affiliate of such Bank to have made, maintained or funded
any part of such Bank's LIBOR-Rate Loans or Euro-based Loans at any time. Any
branch, subsidiary or affiliate so deemed shall be known as a "Notional
LIBOR-Rate Funding Office". Each Bank shall deem any of its LIBORRate Loans or
Euro-based Loans or the funding therefor to have been transferred to a different
Notional LIBOR-Rate Funding Office (i) if such transfer would avoid or cure an
event or condition described in subsection 2.09(f)(ii) hereof or would lessen an
indemnity payable to the Bank under Sections 2.13 or 2.14 hereof, and if (ii)
such Bank determines in its sole discretion that such transfer would be
practicable and would not have a material adverse effect on such Loans, the Bank
or its Notional LIBOR-Rate Funding Office (it being assumed for purposes of such
determination that each of the Bank's LIBOR-Rate Loans is actually made or
maintained by or funded through the corresponding Notional LIBOR-Rate Funding
Office). Notional LIBOR-Rate Funding Offices may be selected by a Bank without
regard to the Bank's actual methods of making, maintaining or funding its Loans
or any sources of funding actually used by or available to the Bank.
(b) Actual Funding. Each Bank shall have the right from time
to time to make or maintain any of the LIBOR-Rate Loans or Euro-
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based Loans funded by such Bank by arranging for a branch, subsidiary or
affiliate of the Bank to make or maintain such Loans. Each Bank shall have the
right to (i) hold the Note payable to its order for the benefit and account of
such branch, subsidiary or affiliate or (ii) request the Company to issue one or
more promissory notes in the principal amount of designated LIBOR-Rate Loans or
Euro-based Loans made by such Bank in substantially the form attached hereto as
Exhibit C or Exhibit D, with the blanks appropriately filled, payable to such
branch, subsidiary or affiliate and with appropriate changes reflecting that the
holder thereof is not obligated to make any additional Loans to the Company. The
Company agrees to comply promptly with any such request under clause (ii). If a
Bank causes a branch, subsidiary or affiliate to make or maintain any of its
Loans hereunder, all terms and conditions of this Agreement shall, except where
the context clearly requires otherwise, be applicable to such Loans and to any
promissory note payable to the order of such branch, subsidiary or affiliate to
the same extent as if such Loans were made or maintained, and such promissory
note were a Note payable to the order of, such Bank.
2.16. Extension of Expiration Dates. At the request of the Company the
Banks may, in their sole discretion, elect to extend the Revolving Expiration
Date then in effect for additional periods of one year each. The Company shall
notify the Banks of its request for such an extension by delivering to the Agent
and the Banks notice of such request signed by a Responsible Officer not more
than ninety (90) days nor less than sixty (60) days prior to each anniversary of
the Effective Date. If all the Banks shall elect to so extend, the Agent shall
notify the Company in writing within sixty (60) days of its receipt of such
request for extension of the decision of the Banks as to whether to extend the
Revolving Expiration Date. Failure by any Bank to respond to a request for an
extension shall constitute a refusal of such Bank to give its consent to such
extension. Failure by the Agent to give such notice shall constitute refusal by
the Banks to extend the Revolving Expiration Date.
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SECTION 3. REPRESENTATIONS AND WARRANTIES
In order to induce the Banks to enter into this Agreement and to make
the Loans herein provided for, the Company hereby covenants, represents and
warrants to each Bank that:
3.01. Financial Condition. The consolidated balance sheet of the
Company and its Consolidated Subsidiaries as at January 1, 1995 and the related
consolidated statements of income and retained earnings and changes in financial
position for the fiscal year ended on such date, certified by Price Waterhouse &
Co., copies of which have heretofore been furnished to each Bank, are complete
and correct in all material respects and present fairly the consolidated
financial condition of the Company and its Consolidated Subsidiaries as at such
date, and the consolidated results of their operations and changes in financial
position for the fiscal year then ended. The unaudited consolidated balance
sheet of the Company and its Consolidated Subsidiaries as at October 1, 1995 and
the related unaudited consolidated statements of income and retained earnings
and changes in financial position for the nine-month period ended on such date,
certified by a Responsible Officer, copies of which have heretofore been
furnished to each Bank, are complete and correct in all material respects and
present fairly the consolidated financial condition of the Company and its
Consolidated Subsidiaries as at such date, and the consolidated results of their
operations and changes in financial position for the nine-month period then
ended (subject to normal year-end audit adjustments). All such financial
statements, including the related schedules and notes thereto, have been
prepared in accordance with GAAP applied consistently throughout the periods
involved. Except for the guarantees of indebtedness permitted in Section 6.03,
neither the Company nor any of its Consolidated Subsidiaries has any material
Contingent Obligation or liability for taxes, long-term lease or unusual forward
or long-term commitment, which is not reflected herein or in the schedules and
exhibits hereto or in the foregoing statements or in the notes thereto.
3.02. No Adverse Change. Since October 1, 1995 there has been no
material adverse change in the business, operations, assets or financial or
other condition of the Company and its Subsidiaries taken as a whole.
3.03. Corporate Existence; Compliance with Law. Each of the Company and
its Material Subsidiaries (a) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, (b) has the
corporate power and authority and the legal right to own and operate its
property, to lease the property it operates and to conduct the business in which
it is currently engaged, (c) is duly qualified as a foreign corporation and is
in good standing under the laws of each jurisdiction where its ownership, lease
or operation of property or the conduct of its business requires such
qualification and the
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failure to so qualify would not have a material adverse effect on the business
of the Company and its Subsidiaries taken as a whole, and (d) to the best of the
Company's knowledge after due diligence, is in compliance with all applicable
Laws (i) subject to the possible implications of the litigation and proceedings
described in Schedule 1 hereto and (ii) except to the extent that the failure to
comply with any such Laws could not, in the aggregate, have a material adverse
effect on the business, operations, property or financial or other condition of
the Company and its Subsidiaries taken as a whole, and could not materially
adversely affect the ability of the Company to perform its obligations under
this Agreement and the Notes.
3.04. Corporate Power; Authorization; Enforceable Obligations. The
Company has the corporate power and authority and the legal right to make,
deliver and perform this Agreement and the Notes and to borrow hereunder and has
taken all necessary corporate action to authorize the borrowings on the terms
and conditions of this Agreement and the Notes and the execution, delivery and
performance of this Agreement and the Notes. No consent or authorization of,
filing with, or other act by or in respect of any person, is required in
connection with the borrowings hereunder or the execution, delivery,
performance, validity or enforceability of this Agreement or the Notes. This
Agreement has been, and each Note will be, duly executed and delivered on behalf
of the Company and this Agreement constitutes, and each Note when executed and
delivered will constitute, legal, valid and binding obligations of the Company
enforceable against the Company in accordance with their respective terms.
3.05. No Legal Bar. The execution, delivery and performance of this
Agreement and the Notes, the borrowings hereunder and the use of the proceeds
thereof will not violate any Law or any Contractual Obligation of the Company or
any of its Subsidiaries and will not result in, or require, the creation or
imposition of any Lien on any of its or their respective properties or revenues
pursuant to any Law or Contractual Obligation.
3.06. No Material Litigation. Except as set forth in Schedule 1, no
litigation, investigation or proceeding of or before any Official Body is
pending or, to the knowledge of the Company, threatened by or against the
Company or any of its Material Subsidiaries or against any of its or their
respective properties or revenues (a) with respect to this Agreement or the
Notes or any of the transactions contemplated hereby, or (b) which, in the
reasonable judgment of the Company, would have a material adverse effect on the
business, operations, property or financial or other condition of the Company
and its Subsidiaries taken as a whole.
3.07. No Default. Neither the Company nor any of its Material
Subsidiaries is in default under or with respect to any Contractual Obligation
in any respect which could be materially adverse to the business, operations,
property or financial or other
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condition of the Company and its Subsidiaries taken as a whole, or which could
materially adversely affect the ability of the Company to perform its
obligations under this Agreement and the Notes.
3.08. Taxes. Each of the Company and its Subsidiaries has filed or
caused to be filed all tax returns which to the knowledge of the Company are
required to be filed and has paid all taxes shown to be due and payable on said
returns or on any assessments made against it or any of its property and all
other taxes, fees or other charges imposed on it or any of its property by any
Official Body (other than those the amount or validity of which is currently
being contested in good faith by appropriate proceedings and with respect to
which reserves in conformity with GAAP have been provided on the books of the
Company or its Subsidiaries, as the case may be, or those the failure to pay
which, in the aggregate, would not be materially adverse to the business,
operations, property or financial or other condition of the Company and its
Subsidiaries taken as a whole); and no tax liens have been filed and, to the
knowledge of the Company, no claims are being asserted with respect to any such
taxes, fees or other charges.
3.09. Subsidiaries. Schedule 2 hereto contains an accurate list of all
of the presently existing Subsidiaries and Material Subsidiaries, setting forth
their respective jurisdictions of incorporation and the percentage of their
respective outstanding capital stock owned by the Company or other Subsidiaries;
all of the issued and outstanding shares of capital stock of the Subsidiaries
have been duly authorized and issued and are fully paid and non-assessable.
3.10. Material Agreements. The agreements identified on Schedule 3
hereto (the "Material Agreements") are all of the material business contracts
(other than purchase and sales agreements and credit agreements) to which the
Company or any Material Subsidiary is a party; each Material Agreement is in
full force and effect; and the Company and its Material Subsidiaries are in full
compliance with the terms and provisions applicable to them contained in the
Material Agreements. The aggregate amount of all payments to be made by the
Company under all noncompetition agreements in effect on the Effective Date does
not exceed $5,000,000.
3.11. Indebtedness and Contingent Obligations. Schedule 4 hereto
accurately identifies the material items of Indebtedness and the material
Contingent Obligations for which the Company or any Subsidiary is obligated.
3.12. Pension-Related Matters. A copy of the most recent Annual Report
(5500 Series Form), including all attachments thereto, filed with the Internal
Revenue Service has been provided to the Agent for each Plan and fairly presents
the funding status of each Plan. There has been no material deterioration in any
Plan's funding status since the date of such Annual Report. The
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Company has provided the Agent with a list of all Plans and Multiemployer Plans
and all available information with respect to its or any Controlled Group
Member's direct, indirect, or potential withdrawal liability to any
Multiemployer Plan.
3.13. Federal Regulations. No part of the proceeds of any Loans
hereunder will be used for "purchasing" or "carrying" "margin stock" within the
respective meanings of each of the quoted terms under Regulation U of the Board
of Governors of the Federal Reserve System as now and from time to time
hereafter in effect, or for any purpose which violates (or which would be
inconsistent with) the provisions of Regulations G, T, U or X of such Board of
Governors.
3.14. Investment Company Act. The Company is not an "investment
company" or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
3.15. Pari Passu Status. The obligations of the Company hereunder and
under the Notes rank and will rank at least pari passu in priority of payment
with all other senior unsecured Indebtedness of the Company.
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SECTION 4. CONDITIONS OF EFFECTIVENESS
4.01. Initial Set of Loans. The effectiveness of this Agreement and the
obligation of the Banks to fund the initial Set of Revolving Loans under this
Agreement (and the obligation of a Bank to fund a Competitive Bid Loan for which
such Bank has submitted a Competitive Bid Quote that has been accepted by the
Company hereunder) is subject to the accuracy, as of the Effective Date, of the
representations and warranties herein contained, to the performance by the
Company of its obligations to be performed hereunder on or before the date of
such Loans and to the satisfaction of the following further conditions:
(a) Representations and Warranties. The representations and
warranties contained in Section 3 shall be true on and as of the date
of such Loans (or Competitive Bid Loan, if applicable) with the same
effect as though made on and as of such date, and on such date no Event
of Default and no Potential Default shall have occurred and be
continuing or shall exist after giving effect to all of the Loans to be
made on said date.
(b) Proceedings and Incumbency Certificate. At the time of
making such Loans (or Competitive Bid Loan, if applicable) there shall
have been delivered to the Agent, together with sufficient signed
copies to provide one for each of the Banks, a certificate, dated not
earlier than the Effective Date and not later than the date of such
Loans (or Competitive Bid Loan, if applicable) and signed by the
Secretary or an Assistant Secretary of the Company, certifying as to
(i) the corporate proceedings taken by the Company referred to in to
Section 3.04 hereof and (ii) the incumbency of the officer or officers
of the Company authorized to sign this Agreement and the Notes to be
issued hereunder, together with true signatures of such officer or
officers; the Agent and each of the Banks may conclusively rely on such
certificate.
(c) Opinion of Counsel. At the time of making such Loans (or
Competitive Bid Loan, if applicable) each Bank shall have received a
favorable written opinion, dated not earlier than the Effective Date
and not later than the date of such Loans (or Competitive Bid Loan, if
applicable) of Messrs. Witt, Gaither & Whitaker, substantially in the
form attached hereto as Exhibit G.
(d) Legal Details and Proceedings. All legal details and
proceedings in connection with the transactions contemplated by this
Agreement shall be satisfactory to the Agent, and the Banks shall have
received all such counterpart original or certified or other copies of
such documents and proceedings in connection with such transactions, in
form and substance satisfactory to the Agent, as any Bank may
reasonably request.
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(e) Notes. The Company shall have delivered to the
Agent such Notes as shall be required by Section 2.04(a) and
(c).
4.02. Subsequent Loans. The obligation of the Banks to fund each Set of
Revolving Loans subsequent to the initial Set thereof and the obligation of a
Bank to fund each Competitive Bid Loan for which such Bank has submitted a
Competitive Bid Quote that has been accepted by the Company hereunder is subject
to the accuracy of the representations and warranties herein contained, to the
performance by the Company of its obligations to be performed hereunder on or
before the date of each such subsequent Set of Revolving Loans or Competitive
Bid Loans, as the case may be, and to the satisfaction of the following further
conditions:
(a) Representations; Defaults. The representations and
warranties contained in Sections 3.03 (except clause (d) thereof),
3.04, 3.05, 3.06, 3.07, 3.13, 3.14 and 3.15 hereof (and in the case of
Revolving Loans which are neither Rollover Loans nor Loans the proceeds
of which will be promptly used by the Company to finance payments at
maturity of Competitive Bid Loans on which the Standard Notice with
respect to such Revolving Loans is given hereunder 3.03(d) hereof)
shall be true on and as of the date of such Loans, with the same effect
as though made on and as of such date, and on such date (i) each of the
Material Agreements identified as a "bottler's contract" or "first line
contract" in Schedule 3 shall be in full force and effect and the
Company or Subsidiary party thereto shall be in full compliance
therewith and (ii) no Event of Default and no Potential Default shall
have occurred and be continuing or shall exist after giving effect to
all of the Loans to be made on said date.
(b) Legal Details. All legal details and proceedings in
connection with the transactions contemplated by this Agreement shall
be satisfactory to the Agent, and the Banks shall have received all
such counterpart originals or certified or other copies of such
documents and proceedings in connection with such transactions, in form
and substance satisfactory to the Agent, as any Bank may reasonably
request.
The delivery by the Company to the Agent of Standard Notice with respect to each
proposed Revolving Loan hereunder, other than in respect of the initial Set of
Revolving Loans shall automatically constitute a representation by the Company
to each Bank that the conditions provided in clause (a) of this Section 4.02 are
true on the date such notice is delivered, except as otherwise stated in such
notice, and will be true on the date such Loan is made unless the Agent is
advised to the contrary by the Company before such Loan is made. The delivery by
the Company to the Agent of a Competitive Bid Quote Request with respect to a
proposed
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Competitive Bid Loan hereunder shall automatically constitute a representation
by the Company to each Bank that the conditions provided in clause (a) of this
Section 4.02 are true on the date such request is delivered, except as otherwise
stated in such request and will be true on the date such Loan is made unless the
Agent is advised to the contrary by the Company before such Loan is made.
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SECTION 5. AFFIRMATIVE COVENANTS
The Company covenants that from and after the date hereof and so long
as it may borrow hereunder and until payment in full of all Notes issued
hereunder and interest thereon and fees, unless the Required Banks shall
otherwise consent in writing:
5.01. Financial Statements. The Company will furnish to each
Bank:
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of the Company, copies of the
consolidated balance sheet of the Company and its Consolidated
Subsidiaries as at the end of such year and of the related consolidated
statements of income and retained earnings and changes in financial
position for such year, setting forth in each case in comparative form
the figures for the previous year, certified without qualification
arising out of the scope of the audit, by independent certified public
accountants of nationally recognized standing; and
(b) as soon as available, but in any event not later than 45
days after the end of each of the first three quarterly periods of each
fiscal year of the Company, copies of the unaudited consolidated
balance sheet of the Company and its Consolidated Subsidiaries as at
the end of such quarter and of the related unaudited consolidated
statements of income and retained earnings and changes in financial
position of the Company and its Consolidated Subsidiaries for such
quarterly period and the portion of the fiscal year through such date,
setting forth in each case in comparative form figures for the previous
year, certified by a Responsible Officer (subject to normal year-end
audit adjustments).
All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein (except as
approved by such accountants or officer, as the case may be, and disclosed
therein).
5.02. Certificates; Other Information. The Company will
furnish to each Bank:
(a) concurrently with the delivery of the financial statements
referred to in Section 5.01(a) above, a certificate of the independent
certified public accountants certifying such financial statements
stating that in making the examination necessary therefor no knowledge
was obtained of any Potential Default or Event of Default, except as
specified in such certificate, and certifying the Company's compliance
with the terms of Section 6.01;
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(b) concurrently with the delivery of the financial statements
referred to in Sections 5.01(a) and (b) above, (i) a Compliance
Certificate, and (ii) a certificate of a Responsible Officer stating
that such officer has no knowledge of any Potential Default or Event of
Default except as specified in such certificate;
(c) promptly upon the mailing thereof to the shareholders of
the Company, copies of all financial statements, reports and proxy
statements so mailed;
(d) promptly upon the filing thereof, copies of all
registration statements and annual, quarterly, monthly or other regular
reports which the Company files with the
Securities and Exchange Commission; and (e) promptly, such additional
financial and other information as any Bank may from time to time
reasonably request.
5.03. Visitation. The Company shall permit such persons as the Agent or
any Bank may designate to visit and inspect any of the properties of the Company
and of any Subsidiary, to examine their respective books and records and take
copies and extracts therefrom and to discuss their respective affairs with their
respective officers, employees and independent accountants at such times and as
often as the Agent or any Bank may reasonably request. The Company hereby
authorizes such officers, employees and independent accountants to discuss with
the Agent or any Bank the affairs of the Company and its Subsidiaries.
5.04. Preservation of Existence and Franchises. The Company shall, and,
except as provided in Section 6.08 hereof, shall cause each of its Subsidiaries
to, maintain its corporate existence, rights and franchises in full force and
effect in its jurisdiction of incorporation. The Company shall, and shall cause
each of its Subsidiaries to, qualify and remain qualified as a foreign
corporation in each jurisdiction in which failure to receive or retain such
qualification would have a material adverse effect on the business, operations
or financial condition of the enterprise comprised of the Company and its
Subsidiaries taken as a whole.
5.05. Insurance. The Company shall, and shall cause each Subsidiary to,
maintain with financially sound and reputable insurers insurance with respect to
its properties and business and against such liabilities, casualties and
contingencies and of such types and in such amounts as is customary in the case
of corporations engaged in the same or a similar business or having similar
properties similarly situated.
5.06. Maintenance of Properties. Except as provided in Section 6.05,
the Company shall, and shall cause each Subsidiary to, (i) maintain or cause to
be maintained in good repair, working order and condition the properties now or
hereafter owned, leased or otherwise possessed by it and (ii) make or cause to
be made all
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needful and proper repairs, renewals, replacements and improvements thereto, so
that, in the case of clauses (i) and (ii) above, the business now or hereafter
carried on by the Company or any Subsidiary may be properly and advantageously
conducted at all times.
5.07. Payment of Taxes and Other Potential Charges and Priority Claims;
Payment of Other Current Liabilities. The Company shall, and shall cause each
Subsidiary to, pay or discharge any of the following described taxes,
assessments, charges, levies, claims and liabilities which are material to the
Company and its Subsidiaries when taken as a whole:
(a) on or prior to the date on which penalties attach thereto,
all taxes, assessments and other governmental charges or levies imposed
upon it or any of its properties or income;
(b) on or prior to the date when due, all lawful claims of
materialmen, mechanics, carriers, warehousemen, landlords and other
like persons which, if unpaid, might result in the creation of a Lien
upon any such property;
(c) on or prior to the date when due, all other lawful claims
which, if unpaid, might result in the creation of a Lien upon any such
property (other than Liens not forbidden by Section 6.02 hereof) or
which, if unpaid, might give rise to a claim entitled to priority over
general creditors of the Company or such Subsidiary in a case under
Title 11 (Bankruptcy) of the United States Code, as amended, or in any
insolvency proceeding or dissolution or winding-up involving the
Company or such Subsidiary; and
(d) all other current liabilities so that none is overdue,
unless the creditor has consented thereto, more than 90 days; provided
that unless and until foreclosure, distraint, levy, sale or similar
proceedings shall have been commenced, the Company or such Subsidiary
need not pay or discharge any such tax, assessment, charge, levy, claim
or current liability so long as the validity thereof is contested in
good faith and by appropriate proceedings diligently conducted and so
long as such reserves or other appropriate provisions as may be
required by GAAP shall have been made therefor and so long as such
failure to pay or discharge does not have a material adverse effect on
the business, operations or financial condition of the enterprise
comprised of the Company and its Subsidiaries taken as a whole.
5.08. Continuation of Business. The Company shall, and shall cause each
Subsidiary to, continue to engage in its business substantially as conducted on
the date hereof.
5.09. Use of Loan Proceeds. The proceeds of all Loans hereunder to the
extent they are not Rollover Loans, shall be
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applied by the Company to any one or more of the following purposes: (a) to pay
at maturity commercial paper issued by the Company or (b) subject to the
provisions of Section 6 hereof, to other general corporate purposes of the
Company, including without limitation the payment of obligations incurred by the
Company or any of its Subsidiaries for capital expenditures or the purchase of
the capital stock or assets of other Coca-Cola bottling related enterprises.
5.10. Notice of Pension-Related Events. Promptly after the Company, any
Controlled Group Member or any administrator of a Plan:
(i) receives the notification referred to in clauses
(i), (iv) or (vii) of Section 7.01(f) hereof,
(ii) has knowledge of (A) the occurrence of a Reportable Event with
respect to a Plan; (B) any event which has occurred or any action which
has been taken to amend or terminate a Plan as referred to in clauses
(ii) and (vi) of Section 7.01(f) hereof; (C) any event which has
occurred or any action which has been taken which could result in
complete withdrawal, partial withdrawal, or secondary liability for
withdrawal liability payments with respect to a Multiemployer Plan as
referred to in clause (vii) of Section 7.01(f) hereof; or (D) any
action which has been taken in furtherance of, any agreement which has
been entered into for, or any petition which has been filed with a
United States district court for, the appointment of a trustee for a
Plan as referred to in clause (iii) of Section 7.01(f) hereof, or
(iii) files a notice of intent to terminate a Plan with the Internal
Revenue Service or the PBGC; or files with the Internal Revenue Service
a request pursuant to Section 412(d) of the Code for a variance from
the minimum funding standard for a Plan; or files a return with the
Internal Revenue Service with respect to the tax imposed under Section
4971(a) of the Code for failure to meet the minimum funding standards
established under Section 412 of the Code for a Plan,
the Company will furnish to the Agent a copy of any notice received, request or
petition filed and agreement entered into; the most recent Annual Report (Form
5500 Series) and attachments thereto for the Plan; the most recent actuarial
report for the Plan; any notice, return or materials required to be filed with
the Internal Revenue Service in connection with the event, action or filing; and
a written statement of a Responsible Officer describing the event or the action
taken and the reasons therefor.
5.11. Notices of Events of Default, Levies Etc. Promptly upon becoming
aware thereof the Company shall give notice to the Agent of:
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(a) the occurrence of any Event of Default or Potential
Default, accompanied by a written statement of a Responsible Officer
setting forth the details thereof and of any action with respect
thereto taken or contemplated by the Company;
(b) the filing against the Company or any of its Subsidiaries
of any attachment, levy, writ of execution or other similar legal
process against assets of the Company or such Subsidiary having a book
value in excess of $1,000,000, unless the claim giving rise to such
process is adequately covered by insurance or is being contested in
good faith by the Company or such Subsidiary by legal proceedings
diligently pursued; or
(c) the commencement, existence or threat of any litigation or
other proceeding by or before any Official Body against or affecting
the Company or any of its Subsidiaries which, if adversely decided,
would have a material adverse effect on the business, operations or
financial condition of the enterprise comprised of the Company and its
Subsidiaries taken as a whole.
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SECTION 6. NEGATIVE COVENANTS
The Company covenants and agrees that from and after the date hereof
and so long as it may borrow hereunder and until payment in full of all Notes
issued hereunder and interest thereon and fees, unless the Required Banks shall
otherwise consent in writing:
6.01. Financial Maintenance Covenants.
(a) Cash Flow/Fixed Charges Ratio. The Cash Flow/Fixed Charges
Ratio, as determined quarterly as of the last day of each fiscal
quarter of the Company (and treating such quarter as having been
completed), shall not be less than 1.50 to 1 for each fiscal quarter.
(b) Consolidated Funded Indebtedness/Cash Flow Ratio. The
Consolidated Funded Indebtedness/Cash Flow Ratio, as determined
quarterly as of the last day of each fiscal quarter of the Company (and
treating such quarter as having been completed), shall not exceed
six-to-one for any fiscal quarter.
6.02. Liens. The Company shall not, and shall not permit any Subsidiary
to, at any time create, incur, assume or suffer to exist any Lien on any of its
property or assets, tangible or intangible, now owned or hereafter acquired, or
agree or become liable to do so, except:
(a) The existing material Liens listed in Schedule 5 hereto
(and extension, renewal and replacement Liens upon the same property
previously subject to an existing Lien, provided the amount secured by
each Lien constituting such an extension, renewal or replacement Lien
shall not exceed the amount secured by the Lien previously existing);
(b) Liens arising from taxes, assessments, or claims described
in Section 5.07 hereof that are not yet due or that remain payable
without penalty or to the extent permitted to remain unpaid under the
proviso to such Section 5.07;
(c) deposits or pledges to secure worker's compensation,
unemployment insurance, old age benefits or other social security
obligations, or in connection with or to secure the performance of
bids, tenders, trade contracts or leases, or to secure statutory
obligations, or stay, surety or appeal bonds, or other pledges or
deposits of like nature and all in the ordinary course of business;
(d) Liens on property securing all or part of the purchase
price thereof and Liens (whether or not assumed) existing in property
at the time of purchase thereof by the Company or a Subsidiary, as the
case may be (and extension, renewal and replacement Liens upon the same
property
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previously subject to a Lien described in this clause (d), provided the
amount secured by each Lien constituting such extension, renewal or
replacement shall not exceed the amount secured by the Lien previously
existing), provided that each such Lien is confined solely to the
property so purchased, improvements thereto and proceeds thereof;
(e) Liens resulting from progress payments or partial payments
under United States Government contracts or subcontracts thereunder;
(f) Liens arising from legal proceedings, so long as such
proceedings are being contested in good faith by appropriate
proceedings diligently conducted and execution is stayed on all
judgments resulting from any such proceedings; and
(g) zoning restrictions, easements, minor restrictions on the
use of real property, minor irregularities in title thereto and other
minor Liens that do not in the aggregate materially detract from the
value of a property or asset to, or materially impair its use in the
business of, the Company or such Subsidiary.
6.03. Guarantees. The Company shall not, and shall not permit any
Subsidiary to, directly or indirectly assume, guarantee, become surety for or
endorse or otherwise become or remain directly or contingently liable upon or
with respect to Indebtedness of any other person or persons except, (i) in the
case of the Company only, with respect to obligations in an aggregate principal
amount not to exceed $50 million and (ii) existing guarantees of Subsidiaries
described in Schedule 6 hereto.
6.04. Investments. The Company shall not, and shall not permit any
Subsidiary to, at any time purchase, acquire or own any stock, bonds, notes or
other securities of, or any partnership or other interest in, or make any
capital contribution to, any other person (any of the foregoing being referred
to in this Section 6.04 as an "investment"), except:
(a) investments existing on the date hereof in Southeastern
Container, Western Container Corporation and South Atlantic Canners and
other investments existing on the date hereof with an aggregate value
on the books of the Company not in excess of $750,000;
(b) investments in the capital stock of Subsidiaries listed in
Schedule 2 hereto and investments in any cooperative providing
bottling, canning or other productive services to the Company or any
Subsidiary;
(c) investments in obligations backed by the full faith and
credit of the United States of America;
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(d) investments in certificates of deposit issued (i) by any
of the Banks, or (ii) by any bank or by United States or Canadian
commercial banks having shareholders' equity of at least $500,000,000
and whose long term obligations are rated "AA" or "Aa" by Standard &
Poor's Corporation or Moody's Investors Service, Inc., respectively;
(e) investments in commercial paper or corporate promissory
notes maturing, or which may be redeemed by the holder, not more than
six months after the date of acquisition and rated "A-1" by Standard &
Poor's Corporation or "P-1" by Moody's Investors Service, Inc.;
(f) investments in repurchase agreements held in safekeeping
at substantial repositories and secured by investments of the kind
listed in clauses (c), (d) and (e) above;
(g) investments in time deposits denominated in Dollars in
commercial banks (including branch offices of United States banks)
located in Western Europe and having shareholders' equity of at least
$500,000,000;
(h) investments in assets, franchises and businesses after the
date hereof, the result of which does not cause the Company to violate
any term of Section 6.01 hereof, and as to which in the case of each
such investment, the chief financial officer of the Company shall have
sent to each Bank a certificate certifying that the acquisition is
permitted under Section 6.04 including this subsection (h), and in the
event that the purchase price of any soft drink bottling assets,
franchises and business acquired singly or as a group exceeds $50
million, shall have sent to each Bank a copy of audited and/or
unaudited financial statements for the most recently completed fiscal
year and interim period relating to the assets, franchises and
businesses acquired; and
(i) other investments not exceeding $500,000 in the aggregate
at any time for the Company and all Subsidiaries.
6.05. Dispositions of Assets. The Company shall not, and shall not
permit any Subsidiary to, sell, convey, assign, abandon or otherwise transfer or
dispose of, voluntarily or involuntarily (any of the foregoing being referred to
in this Section 6.05 as a "transaction" and any series of related transactions
constituting but a single transaction), any of its properties or assets,
tangible or intangible, except:
(a) transactions (including sales of trucks, vending
machines and other equipment) in the ordinary course of
business.
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(b) transactions between Subsidiaries or between the Company
and Subsidiaries; provided, if the transaction should involve the
transfer by the Company of bottling contracts either listed as or
constituting at anytime a Material Agreement or scheduled on Schedule
3: (i) the recipient Subsidiary after the transaction shall remain a
wholly-owned Subsidiary of the Company; and (ii) the recipient
Subsidiary after the transaction (x) shall have substantially all of
the previous rights of the Company under such bottling contracts, and
(y) shall sublicense to the Company, at least for the term of this
Agreement, substantially all of its rights under such bottling
contracts, especially the right to bottle and sell the products
licensed in the territories granted by such bottling contracts;
provided, further, that to the extent there is a transfer of assets,
other than bottling contracts, to a Subsidiary, such Subsidiary shall
continue at all times to be wholly-owned, directly or indirectly, by
the Company;
(c) any sale of real property not used in the current
operations of the Company and for not less than the fair market value
of such property, provided that the aggregate proceeds of sales
pursuant to this clause (c) shall not exceed $10,000,000 in any fiscal
year of the Company;
(d) other sales, conveyances, assignments or other transfers
or dispositions in immediate exchange for cash or tangible assets,
subject to prior approval in each case by the Required Banks;
(e) other sales, conveyances, assignments or other transfers
or dispositions that do not in the aggregate exceed $10,000,000 in any
fiscal year of the Company;
(f) the sale for cash of any and all accounts receivable
in a face amount not to exceed Fifty Million Dollars
($50,000,000); and
(g) transfers or dispositions for cash, other than as provided
by subsections (a) through (f) of this section 6.05, if on the date of
the consummation thereof, if such date is prior to the Revolving
Expiration Date, the Commitments are permanently reduced on such date
by the amount of the net cash proceeds of such transfers or
dispositions in the manner set forth in Section 2.07(b)(ii).
6.06. Material Agreements. The Company shall not, and shall not permit
any Subsidiary to, (a) agree to any material modification (by amendment,
separate new agreement or otherwise) of any Material Agreement identified as a
"bottler's contract" or "first line contract" in Schedule 3 or (b) agree to any
material modification of any other Material Agreement, franchise agreement or
bottling contract to which the Company or a Subsidiary is now or hereafter party
if the effect of such modification would be
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materially adverse to the business, operations, property or financial or other
condition of the Company and its Subsidiaries taken as a whole; and the Company
shall not, and shall not permit any Subsidiary to, (i) suffer or permit any such
bottler's contract or first line contract referred to in clause (a) above to be
in default or to lapse or be withdrawn by reason of any act or omission on the
part of the Company or any Subsidiary or (ii) suffer or permit any such other
Material Agreement, franchise agreement or bottling contract to which the
Company or a Subsidiary is now or hereafter party to be in default or to lapse
or be withdrawn by reason of any act or omission on the part of the Company or
any Subsidiary if the effect of such default, lapse or withdrawal would be
materially adverse to the business, operations, property or financial or other
condition of the Company and its Subsidiaries taken as a whole.
6.07. Compliance with Federal Reserve Regulations. The Company shall
not, and shall not permit any Subsidiary to, create, incur or assume any
Indebtedness or other liability, or to make any investment, resulting directly
or indirectly in a violation of Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System, as amended or modified from time to
time, or of other applicable Law.
6.08. Merger. The Company shall not, and shall not permit any
Subsidiary to, merge with or into or consolidate with any other Person, or agree
to do any of the foregoing, except that if no Event of Default or Potential
Default shall occur and be continuing or shall exist at the time of such merger
or consolidation or immediately thereafter and after giving effect thereto
(a) the Company may merge with any other corporation,
including a Subsidiary, if the Company shall be the surviving
corporation;
(b) a wholly-owned Subsidiary may merge with or into or
consolidate with any other wholly-owned Subsidiary; and
(c) a wholly-owned Subsidiary may merge with any other
corporation, if such Subsidiary shall be the surviving
corporation.
6.09. Fiscal Periods. The Company will not permit its fiscal year to
end on a date other than a December 31 or a date within 5 days thereof and will
not permit any fiscal quarter to end on a date other than a March 31, June 30,
September 30 or December 31 or a date within 5 days thereof. For purposes of the
covenants, definitions and other provisions of this Agreement, a fiscal period
which ends within five days of a March 31, June 30, September 30 or December 31
shall be deemed to end on such March 31, June 30, September 30 or December 31,
as the case may be.
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6.10. Indebtedness of Subsidiaries. The Company shall not
permit any Subsidiary to incur or permit to exist any Indebtedness
except Indebtedness to the Company or another Subsidiary.
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SECTION 7. DEFAULTS
7.01. Events of Default. If one or more of the following described
Events of Default shall occur and be continuing or shall exist and shall not
have been remedied, that is to say:
(a) The Company shall default in the payment of principal of
any of the Notes when due; or the Company shall default in the payment
of interest on any of the Notes or of the Facility Fee when due and
such default shall not be remedied for a period of five days
thereafter; or
(b) The Company or any Subsidiary shall default in (i) any
payment of the principal of or interest on any other obligation for
borrowed money or (ii) any obligation for the deferred purchase price
of property or (iii) any lease or rental obligation or (iv) in the
performance of any covenant, term or condition contained in any
agreement or instrument under which any such obligation is created, and
shall not have cured such default specified in clauses (i), (ii), (iii)
or (iv) within any period of grace provided by such agreement or
instrument if the effect of such default is to cause, or to permit the
holder or holders of such obligation (or a trustee on behalf of such
holder or holders) to cause, an obligation in excess of $10,000,000 to
become due prior to its stated maturity and such default is not waived
or cured in accordance with the terms thereof; or
(c) Any representation or warranty made by the Company herein
or in any certificate or financial statement furnished pursuant to the
provisions hereof, or any such certificate or financial statement
furnished pursuant to the provisions hereof, shall prove to have been
false or misleading in any material respect as of the time made or
furnished; or
(d) The Company shall default in the performance or observance
of any covenant contained in Section 6 hereof and such default shall
not be remedied for a period of five days after notice thereof to the
Company from the holder of any Note; or
(e) The Company shall default in the performance or observance
of any other covenant, agreement, condition, provision or duty
hereunder and such default shall not be remedied for a period of 30
days after notice thereof to the Company from the holder of any Note;
or
(f) The Required Banks shall determine in good faith (which
determination shall be conclusive) that the potential liabilities
associated with the events set forth in clauses (i) through (vii)
below, individually or in the aggregate, could have a material adverse
effect on the business operations or financial condition of the
Company:
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(i) The PBGC notifies a Plan pursuant to Section 4042
of ERISA by service of a complaint, threat of filing a law
suit or otherwise of its determination that an event described
in Section 4042(a) of ERISA has occurred, a Plan should be
terminated or a trustee should be appointed for a Plan; or
(ii) Any action is taken to terminate a Plan pursuant to
its provisions or the plan administrator files with the PBGC a
notice of intent to terminate a Plan in accordance with
Section 4041 of ERISA; or
(iii) Any action is taken by a plan administrator to have a
trustee appointed for a Plan pursuant to Section 4042 of
ERISA; or
(iv) A return is filed with the Internal Revenue Service,
or a Plan is notified by the Secretary of the Treasury that a
notice of deficiency under Section 6212 of the Code has been
mailed, with respect to the tax imposed under Section 4971(a)
of the Code for failure to meet the minimum funding standards
established under Section 412 of the Code; or
(v) A Reportable Event occurs with respect to a Plan; or
(vi) Any action is taken to amend a Plan to become an
employee benefit plan described in Section 4021(b)(1) of
ERISA, causing a Plan termination under Section 4041(e) of
ERISA; or
(vii) The Company or any Controlled Group Member receives a
notice of liability or demand for payment on account of
complete withdrawal under Section 4203 of ERISA, partial
withdrawal under Section 4205 of ERISA or on account of
becoming secondarily liable for withdrawal liability payments
under Section 4204 of ERISA (sale of assets); or
(g) The Coca-Cola Company and any of its wholly-owned
subsidiaries shall fail for a period of ninety days to own at least 20%
of the capital stock of the Company, or such lesser percentage as shall
result solely from the issuance after the date hereof by the Company
for fair consideration of capital stock to any other person;
then, and in any such event, the Banks shall be under no further obligation to
make Loans hereunder and the Agent shall, upon written request of the Required
Banks, by written or telegraphic notice to the Company, declare all Notes then
outstanding hereunder and interest accrued thereon and all other liabilities of
the Company hereunder and thereunder to be forthwith due and payable,
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and the same shall thereupon become and be due and payable without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived.
If one or more of the following described Events of Default shall occur
and be continuing or shall exist and shall not have been remedied, that is to
say:
(i) A proceeding shall have been instituted in a court having
jurisdiction in the premises seeking a decree or order for relief in
respect of the Company or any Subsidiary in an involuntary case under
any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or for the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or other similar official)
of the Company or any Subsidiary or for any substantial part of its
property, or for the winding-up or liquidation of its affairs and such
proceeding shall remain undismissed or unstayed and in effect for a
period of 60 days or such court shall enter a decree or order granting
the relief sought in such proceeding; or
(j) The Company or any Subsidiary shall commence a voluntary
case under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect, shall consent to the entry of an order for
relief in an involuntary case under any such law, or shall consent to
the appointment of or taking possession by a receiver, liquidator,
assignee, trustee, custodian, sequestrator (or other similar official)
of the Company or any Subsidiary or for any substantial part of its
property, or shall make a general assignment for the benefit of
creditors, or shall fail generally to pay its debts as they become due,
or shall take any corporate action in furtherance of any of the
foregoing;
then, and in any such event, the Banks shall be under no further obligation to
make Loans hereunder and all Notes then outstanding hereunder and interest
accrued thereon and all other liabilities of the Company hereunder and
thereunder shall thereupon become and be due and payable without presentment,
demand, protest or notice of any kind, all of which are hereby expressly waived.
The Agent, any Bank or holder of a Note giving any notice to the
Company under this Section 7.01 shall simultaneously send a copy of such notice
to the holders of the other Notes. Promptly after the Agent receives actual
notice of the existence of an Event of Default, the Agent shall give each Bank
notice thereof.
7.02. Rights of Set-Off. In case an Event of Default shall occur and be
continuing or shall exist, the holder of any Note and any holder of a
participation in a Note (whether such participation was acquired pursuant to
Section 9.01 or Section 9.13 or otherwise) shall have the right, in addition to
all other rights and remedies
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available to it, without notice to the Company, to set-off against and apply to
the then unpaid balance of all the Notes and/or participations and all other
obligations of the Company hereunder any debt owing to, and any other funds held
in any manner for the account of, the Company by such holder, including, without
limitation, all funds in all deposit accounts (general or special) now or
hereafter maintained by the Company for its own account with such holder. Such
right, in case of an Event of Default, shall exist whether or not any such
holder or the Agent shall have made any demand under this Agreement or any Note
and/or participation and whether or not the Notes and/or participations and such
other obligations are matured or unmatured. The Company hereby confirms each
such holder's and each Bank's right of banker's lien and set-off and nothing in
this Agreement shall be deemed any waiver or prohibition of any such holder's or
of any Bank's right of banker's lien or set-off.
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SECTION 8. THE AGENT
8.01. Appointment. The Banks hereby appoint NationsBank,
N.A. to act as Agent as herein specified for the Banks hereunder.
Each of the Banks hereby irrevocably authorizes, and each holder of
any Note by the acceptance of such Note shall be deemed irrevocably
to authorize, the Agent to take such action on its behalf under the
provisions of this Agreement and any other instruments and
agreements referred to herein, and to exercise such powers and to
perform such duties hereunder, as are specifically delegated to or
required of the Agent by the terms hereof, together with such
powers as are reasonably incidental thereto. NationsBank, N.A.
agrees to act as the Agent on behalf of the Banks to the extent
provided in this Agreement.
8.02. Delegation of Duties. The Agent may perform any of its
duties hereunder by or through agents or employees and shall be
entitled to advice of counsel concerning all matters pertaining to
its duties hereunder.
8.03. Nature of Duties; Independent Credit Investigation. The Agent
shall have no duties or responsibilities except those expressly set forth in
this Agreement. The duties of the Agent shall be mechanical and administrative
in nature; the Agent shall not have by reason of this Agreement a fiduciary
relationship in respect of any Bank; and nothing in this Agreement, expressed or
implied, is intended to or shall be so construed as to impose upon the Agent any
obligations in respect of this Agreement except as expressly set forth herein.
Each Bank expressly acknowledges (i) that the Agent has not made any
representations or warranties to it and that no act by the Agent hereafter
taken, including any review of the affairs of the Company, shall be deemed to
constitute any representation or warranty by the Agent to any Bank; (ii) that it
has made and will make its own independent investigation of the financial
condition and affairs, and its own appraisal of the credit-worthiness, of the
Company in connection with this Agreement; and (iii) that the Agent shall have
no duty or responsibility, either initially or on a continuing basis, to provide
any Bank with any credit or other information, whether coming into its
possession before the making of any Loans hereunder or at any time or times
thereafter except information expressly required to be given to the Banks
hereunder.
8.04. Actions in Discretion of Agent; Instructions from Required Banks.
The Agent agrees, upon the written request of the Required Banks, to take any
action of the type specified as being within the Agent's rights, powers or
discretion herein. In the absence of a request by the Required Banks, the Agent
shall have authority pursuant to Section 8.03 hereof, in its sole discretion, to
take or not to take any such action, unless this Agreement specifically requires
the consent of the Required Banks or all the Banks. Any action taken or failure
to act pursuant to such instructions or discretion shall be binding on all the
Banks and
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on all holders of Notes. No Bank shall have any right of action whatsoever
against the Agent as a result of the Agent acting or refraining from acting
hereunder in accordance with the instructions of the Required Banks, or in the
absence of such instructions, in the absolute discretion of the Agent (unless
this Agreement specifically requires the consent of the Required Banks or all
the Banks), subject to the provisions of Section 8.05.
8.05. Exculpatory Provisions. Neither the Agent nor any of its
directors, officers, employees or agents shall be liable to any Bank for any
action taken or omitted to be taken by it or them hereunder, or in connection
herewith, unless caused by its or their own gross negligence or willful
misconduct. In performing its functions and duties hereunder on behalf of the
Banks, the Agent shall exercise the same care which it would exercise in dealing
with loans for its own account, but it shall not (i) be responsible in any
manner to any of the Banks for the effectiveness, enforceability, genuineness,
validity or the due execution of this Agreement or any of the Notes, or for any
recital, representation, warranty, document, certificate, report or statement
herein or made or furnished under or in connection with this Agreement, or (ii)
be under any obligation to any of the Banks to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions hereof or
thereof on the part of the Company, or the financial condition of the Company,
or the existence or possible existence of any Event of Default or Potential
Default. Promptly after the Agent receives actual notice of the existence of a
Potential Event of Default or an Event of Default, the Agent shall give each
Bank notice thereof.
8.06. Reimbursement and Indemnification. Each Bank agrees to reimburse
and indemnify the Agent (to the extent not reimbursed by the Company), ratably
in proportion to its Commitment, for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against the Agent, in its capacity as such, in any
way relating to or arising out of this Agreement or the Notes or any action
taken or omitted by the Agent hereunder or thereunder; provided that no Bank
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
to the extent that the same result from (i) the Agent's gross negligence or
willful misconduct, (ii) a claim against the Agent or the Banks with respect to
which such Bank was not given notice and the opportunity to participate in the
defense thereof, at its expense, or (iii) a compromise and settlement agreement
entered into without the consent of such Bank.
8.07. Reliance by Agent. The Agent shall be entitled to rely upon any
writing, telegram, telex or teletype message, resolution, notice, consent,
certificate, letter, cablegram, statement, order or other document or
conversation by telephone or otherwise
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believed by it to be genuine and correct and to have been signed, sent or made
by the proper party or parties, and upon opinions of counsel and other
professional advisors selected by the Agent. Subject to Section 8.05, the Agent
shall be fully justified in failing or refusing to take any action hereunder
unless it shall first be indemnified to its satisfaction by the Banks against
any and all liability and expense which may be incurred by it by reason of
taking or continuing to take any such action.
8.08. NationsBank, N.A. in its Individual Capacity. With respect to its
Commitment, the Loans made by it and the Note held by it, NationsBank, N.A.
shall have the same rights and powers hereunder as any other Bank and may
exercise the same as though it were not the Agent, and the terms "Banks" or
"holders of Notes" shall, unless the context hereof otherwise indicates, include
NationsBank, N.A. in its individual capacity. NationsBank, N.A. and its
affiliates may, without liability to account, make loans to, accept deposits
from, act as trustee under indentures of, and generally engage in any kind of
banking or trust business with, the Company and its shareholders, Subsidiaries
and affiliates as though it were not acting as Agent hereunder.
8.09. Holders of Notes. The Agent may deem and treat the payee of any
Note as the owner of such Note for all purposes hereof unless and until written
notice of the assignment or transfer thereof shall have been filed with the
Agent. Any request, authority or consent of any party who at the time of making
such request or giving such authority or consent is the holder of any Note shall
be conclusive and binding on any subsequent holder, transferee or assignee of
such Note or of any Note or Notes issued in exchange therefor.
8.10. Successor Agent. The Agent may resign at any time by giving
written notice thereof to the Banks and the Company. Upon any such resignation,
the Required Banks shall have the right to appoint a successor Agent. If no
successor Agent shall have been so appointed, and shall have accepted such
appointment, within 30 days after the retiring Agent's giving of notice of
resignation, then the retiring Agent may, on behalf of the Banks, appoint a
successor Agent which shall be a commercial bank organized or regulated under
the laws of the United States of America or any State thereof and having a
combined capital and surplus of at least $100,000,000. Upon the acceptance by a
successor Agent of its appointment as Agent hereunder, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties under this Agreement. After any retiring Agent's
resignation hereunder as Agent, the provisions of this Section 8 shall inure to
its benefit as to any actions taken or omitted by it while it was Agent under
this Agreement.
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SECTION 9. MISCELLANEOUS
9.01. Equalization of Banks. The Banks agree among themselves that,
with respect to all amounts received (except under Sections 2.13 and 2.14
hereof) by any Bank for application on any obligation relating to Revolving
Loans hereunder or on the Revolving Notes, equitable adjustment will be made in
the manner stated in the next succeeding sentence so that, in effect, all such
amounts will be shared ratably among the Banks, in proportion to their
Commitments, whether received by voluntary payment, by realization upon
security, by the exercise of the right of set-off or banker's lien, by
counterclaim or cross action or any other non-pro rata source. Any Bank
receiving any such amount shall purchase for cash from the other Banks an
interest in their Revolving Notes in such principal amount as shall result in a
ratable participation by each of the Banks in the aggregate unpaid principal
amount of all outstanding Revolving Notes then held by all of the Banks;
provided that if all or any portion of such excess amount is thereafter
recovered from such Bank, such purchase shall be rescinded and the purchase
price restored to the extent of such recovery, together with interest equal to
the pro rata amount of interest, if any, which is required to be paid by such
Bank pursuant to court order.
9.02. No Implied Waiver; Cumulative Remedies; Writing Required;
Attorney's Fees in Certain Circumstances. No delay or failure of the Agent, any
Bank or the holder of any Note in exercising any right, power or privilege
hereunder shall affect such right, power or privilege except as and to the
extent that the assertion of any such right, power or privilege shall be barred
by an applicable statute of limitations; nor shall any single or partial
exercise thereof or any abandonment or discontinuance of steps to enforce such a
right, power or privilege preclude any further exercise thereof or of any other
right, power or privilege. The rights and remedies hereunder of the Agent, the
Banks and the holders of the Notes are cumulative and not exclusive of any
rights or remedies which they would otherwise have. Any waiver, permit, consent
or approval of any kind or character on the part of any Bank or of the holder of
any Note of any breach or default under this Agreement, or any such waiver of
any provision or condition of this Agreement, must be in writing and shall be
effective only to the extent in such writing specifically set forth. In the
event of termination adversely to the Company of any action at law or suit in
equity in relation to this Agreement or the Notes, the Company, in addition to
all other sums which the Company may be required to pay, will pay a reasonable
sum for attorney's fees and other costs incurred by the holder or holders of the
Notes in connection with such action or suit.
9.03. Taxes. The Company agrees to pay any and all stamp, document,
transfer or recording taxes, and similar impositions payable or hereafter
determined to be payable in connection with
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this Agreement or the Notes or any other documents, instruments or transactions
pursuant to or in connection herewith, and agrees to save the Agent and each
Bank harmless from and against any and all present or future claims or
liabilities with respect to, or resulting from any delay in paying or omission
to pay, any such taxes or similar impositions.
9.04. Modifications, Amendments or Waivers. With the written consent of
the Required Banks, the Agent, acting on behalf of all the Banks, and the
Company may from time to time enter into agreements amending or changing any
provision of this Agreement or the rights of the Banks or the Company hereunder,
or the Agent with the written consent of the Required Banks may grant waivers or
consents to a departure from the due performance of the obligations of the
Company hereunder, any such agreement, waiver or consent made with such written
consent being effective to bind all the Banks; provided, that no such agreement,
waiver or consent may be made which will:
(i) Reduce or increase the amount or alter the terms
of the Commitment of any Bank hereunder, or alter the
provisions relating to the facility fee payable to any Bank
hereunder, or amend Section 2.13 or Section 2.14 hereof,
without the written consent of all the Banks; or
(ii) Extend the time for payment of principal or interest
on any Note, or reduce the principal amount of or the rate of
interest borne by any Note, or otherwise affect the terms of
payment of the principal of or interest on any Note, without
the written consent of the holder of such Note;
(iii) Change the percentages specified in the definition
herein of "Required Banks", or amend Section 9.01 or this
Section 9.04, without the written consent of all the Banks; or
(iv) Change any of the provisions of Section 8
hereof, without the written consent of all the Banks.
9.05. Notices. All notices by the Company to the Agent under Sections
2.06, 2.07(b), 2.09(f), 2.10 and 2.13 hereof and by the Agent to the Company
under Section 7.01 hereof shall be sent by telex or by telephone confirmed by
telex or letter, and shall be effective when telephoned or, in the case of
telex, when received. All notices by the Agent under Section 2.02(h) hereof
shall be sent by telex, telecopy or by telephone confirmed by telex, telecopy or
telephone, when received; and all other notices by the Company, the Agent or any
Bank under Section 2.02 hereof shall be sent by telex or telecopy, and shall be
effective when received. All notices by
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any person to a Bank (except as otherwise provided in the preceding two
sentences) under any of said Sections shall be in writing, including telegram or
telex, with all charges or postage prepaid, and shall be effective when received
by such Bank. All other notices, requests, demands, directions and other
communications (collectively "notices") given to or made upon any party hereto
under the provisions of this Agreement shall be in writing unless otherwise
expressly permitted hereunder and shall be delivered or sent by first-class or
first-class express mail, or by telex or telecopier with confirmation in writing
mailed first class, in all cases with postage or charges prepaid, addressed, if
to a Bank, at its (first) address set forth with its signature hereto, if to the
Agent, at its Office, and, if to the Company, at 1900 Rexford Road, Charlotte,
North Carolina 28211, Attention: Vice President and Treasurer, or in accordance
with any unrevoked written direction from any party to the other parties hereto.
Except as otherwise expressly provided herein, any properly given notice
hereunder shall be effective when received in the case of any notice delivered
directly to the addressee or sent by first-class mail, telex or telecopier. Any
Bank or holder of a Note giving any notice to the Company shall simultaneously
send a copy thereof to the Agent, and the Agent shall promptly notify the other
Banks of the receipt by it of any notice.
9.06. Reimbursement for Certain Expenses. The Company agrees to pay or
cause to be paid and to save the Agent and each Bank harmless against liability
for the payment of all reasonable out-of-pocket expenses, including counsel fees
(i) incurred by the Agent in connection with the preparation, execution and
performance of this Agreement and related transactions, (ii) incurred by the
Agent in connection with any requested amendments, waivers or consents related
to the provisions hereof and (iii) incurred by the Agent or any Bank in
connection with the enforcement of this Agreement. The obligations of the
Company under this Section 9.06 shall survive the payment of the Notes.
9.07. Severability. The provisions of this Agreement are intended to be
severable. If any provision of this Agreement shall be held invalid or
unenforceable in whole or in part in any jurisdiction, such provision shall, as
to such jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without in any manner affecting the validity or enforceability
thereof in any other jurisdiction or the remaining provisions hereof in any
jurisdiction.
9.08. Consent to Jurisdiction; Waiver of Jury Trial. All judicial
proceedings brought against the Company in connection with this Agreement may be
brought in any state or federal court of competent jurisdiction in the State of
North Carolina, and by execution and delivery of this Agreement, the Company
accepts, for
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itself and in connection with its properties, generally and unconditionally, the
nonexclusive jurisdiction of the aforesaid courts, and irrevocably agrees to be
bound by any final judgment rendered thereby in connection with this Agreement
from which no appeal has been taken or is available. The Company irrevocably
consents to the service of process of any of the aforementioned courts in any
such action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to its notice address specified in Section
9.05, such service to become effective ten (10) days after such mailing or at
such earlier time provided by law. The company irrevocably waives (a) trial by
jury in any action or proceeding in connection with this Agreement, and (b) any
objection (including without limitation, any objection of the laying of venue or
based on the grounds of forum non conveniens) which it may now or hereafter have
to the bringing of any such action or proceeding in connection with this
Agreement in any jurisdiction set forth above. Nothing herein shall affect the
right to serve process in any other manner permitted by law or shall limit the
right of the Agent or any Bank to bring proceedings against the Company in the
courts of any other jurisdiction.
9.09. Governing Law. This Agreement and the Notes issued hereunder
shall be deemed to be contracts under the laws of the State of North Carolina
and for all purposes shall be governed by and construed in accordance with the
laws of said State.
9.10. Prior Understandings. This Agreement supersedes all prior
understandings and agreements, whether written or oral, among the parties hereto
relating to the transactions provided for herein.
9.11. Survival. All representations, warranties, covenants and
agreements of the Company contained herein or made in writing in connection
herewith shall survive the making of Loans hereunder and shall continue in full
force and effect so long as any of the Notes is outstanding and until payment in
full of all of the Company's obligations hereunder.
9.12. Binding Effect. This Agreement shall become effective upon the
Effective Date and shall be binding upon and inure to the benefit of each party
hereto and its successors and assigns, except that the Company may not assign
its rights hereunder or any interest herein without the prior written consent of
the Banks.
9.13. Assignments and Participations.
(a) At any time after the Effective Date each Bank may, with the prior
consent of the Agent and the Company, which consent shall not be unreasonably
withheld, assign to one or more banks or financial institutions all or a portion
of its rights and
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obligations under this Agreement (including, without limitation, all or a
portion of the Notes payable to its order); provided, that (i) each such
assignment shall be of a constant, and not a varying, percentage of all of the
assigning Bank's rights and obligations (including Loans) under this Agreement,
(ii) for each assignment involving the issuance and transfer of Notes, the
assigning Bank shall execute an Assignment and Acceptance and the Company hereby
consents to execute replacement Notes to give effect to the assignment, (iii)
the minimum Commitment which shall be assigned is $5,000,000 and (iv) such
assignee shall have an office located in the United States. Upon such execution,
delivery, approval and acceptance, from and after the effective date specified
in each Assignment and Acceptance, (x) the assignee thereunder shall be a party
hereto and, to the extent that rights and obligations hereunder or under such
Notes have been assigned or negotiated to it pursuant to such Assignment and
Acceptance have the rights and obligations of a Bank hereunder and a holder of
such Notes and (y) the assignor thereunder shall, to the extent that rights and
obligations hereunder or under such Notes have been assigned or negotiated by it
pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement. No assignee shall have the
right to further assign its rights and obligations pursuant to this Section
9.01. Any Bank who makes an assignment shall pay to the Agent a one-time
administrative fee of $2,500.00.
(b) By executing and delivering an Assignment and Acceptance, the Bank
assignor thereunder and the assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) the assignment made under
such Assignment and Acceptance is made under such Assignment and Acceptance
without recourse; (ii) such assigning Bank makes no representation or warranty
and assumes no responsibility with respect to the financial condition of the
Borrower or any Subsidiary or the performance or observance by the Borrower or
any Subsidiary of any of its obligations under any Loan Document or any other
instrument or document furnished pursuant hereto; (iii) such assignee confirms
that it has received a copy of this Agreement, together with copies of the
financial statements delivered pursuant to Section 5.01 and such other documents
and information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the Agent, such assigning Bank or any
other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (v) such assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement and the Notes as are delegated to the Agent by
the terms hereof and thereof, together with such powers as are reasonably
incidental thereto; and (vi)
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such assignee agrees that it will perform in accordance with their terms all of
the obligations which by the terms of this Agreement are required to be
performed by it as a Bank and a holder of such Notes.
(c) The Agent shall maintain at its address referred to herein a copy
of each Assignment and Acceptance delivered to and accepted by it.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Bank, the Agent shall give prompt notice thereof to the Company.
(e) Each Bank may sell participations to one or more banks or other
entities as to all or a portion of its rights and obligations under this
Agreement; provided, that (i) such Bank's obligations under this Agreement shall
remain unchanged, (ii) such Bank shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) such Bank shall
remain the holder of any Notes issued to it for the purpose of this Agreement,
(iv) such participations shall be in a minimum amount of $1,000,000, and (v) the
Company, the Agent and the other Banks shall continue to deal solely and
directly with such Bank in connection with such Bank's rights and obligations
under this Agreement and with regard to any and all payments to be made under
this Agreement; provided, that the participation agreement between a Bank and
its participants may provide that such Bank will obtain the approval of such
participant prior to such Bank's agreeing to any amendment or waiver of any
provisions of this Agreement which would (A) extend the maturity of the
Revolving Note, (B) reduce the interest rate hereunder, or (C) increase the
Commitment of the Bank granting the participation, and (vi) the sale of any such
participations which require the Company to file a registration statement with
the United States Securities and Exchange Commission or under the securities
regulations or laws of any state shall not be permitted.
(f) Notwithstanding any other provision set forth in this Agreement,
any Bank may at any time create a security interest in all or any portion of its
rights under this Agreement (including, without limitation, the Loans owing to
it and the Note or Notes held by it) in favor of any Federal Reserve Bank in
accordance with Regulation A of the Board of Governors of the Federal Reserve
System. In addition, any Bank may assign to an affiliate of such Bank all of any
portion of its commitment without the consent of the Company or the Bank.
9.14. Headings; Table of Contents. The Section and other
headings contained in this Agreement and the Table of Contents
which precedes this Agreement are for reference purposes only and
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shall not control or affect the construction of this Agreement or the
interpretation thereof in any respect.
9.15. Counterparts. This Agreement may be executed in as many
counterparts as may be deemed necessary and convenient, and by the different
parties hereto on separate counterparts, each of which, when so executed, shall
be deemed an original, but all such counterparts shall constitute but one and
the same instrument.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto, by their officers thereunto
duly authorized, have executed this Agreement as of the day and year first above
written.
WITNESS: COCA-COLA BOTTLING CO. CONSOLIDATED
- ------------------------
By:____________________________
________________________ Name: Brenda B. Jackson
Title: Treasurer
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Original Commitment NATIONSBANK, N.A., in its
Amount: $36,000,000 individual capacity and as
Administrative and Syndication
Agent
By:____________________________
Name: Thomas F. O'Neill
Title: Senior Vice President
Address: NationsBank Plaza
Charlotte, NC 28255
Attention: Corporate Banking
Department
With copy to:
600 Peachtree Street, N.E.
21st Floor
Atlanta, Georgia 30308-2213
Attention: Thomas F. O'Neill
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Original Commitment CITIBANK, N.A.
Amount: $34,000,000
By:_______________________________
Title:____________________________
Address: 399 Park Avenue
New York, NY 10043
Attention: Barbara Cohen
Vice President
With copy to:
400 Perimeter Center Terrace
Suite 600
Atlanta, GA 30346
Attention: Kirk P. Lakeman
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Original Commitment BANK OF AMERICA NATIONAL TRUST
Amount: $30,000,000 AND SAVINGS ASSOCIATION, in its
individual capacity and as
Documentation Agent
By:_______________________________
Title:____________________________
Address: 1850 Gateway Boulevard
Concord, CA 94520
Attention: Susan Hardeman
With copy to:
230 Peachtree Street, N.W.
Suite 1700
Atlanta, GA 30303
Attention: William O. Tucker
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Original Commitment SUNTRUST BANK, ATLANTA
Amount: $20,000,000
By:_______________________________
Title:____________________________
By:_______________________________
Title:____________________________
Address: 25 Park Place
Mail Code 118
Atlanta, GA 30303
Attention: Frank Callison
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Original Commitment SOCIETE GENERALE
Amount: $10,000,000
By:_______________________________
Title:____________________________
Address: 4800 Trammell Crow Center
2001 Ross Avenue
Dallas, Texas 75201
Attention: Ralph Saheb
With a copy to:
Societe Generale
303 Peachtree N.W.
Atlanta, Georgia 30308
Attention: Jerome Jacques
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Original Commitment WACHOVIA BANK OF NORTH CAROLINA,
Amount: $10,000,000 N.A.
By:_______________________________
Title:____________________________
Address: 400 South Tryon Street
Charlotte, NC 28285
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Original Commitment LTCB TRUST COMPANY
Amount: $10,000,000
By:_______________________________
Title:____________________________
Address:
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Original Commitment SIGNET BANK/VIRGINIA
Amount: $10,000,000
By:_______________________________
Title:____________________________
Address: P.O. Box 25970
Richmond, VA 23260
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Original Combined KREDIETBANK, N.V.
Commitment Amount:
$10,000,000
By:_______________________________
Title:____________________________
Address: 1349 W. Peachtree Street
Suite 1750
Atlanta, Georgia 30309
(404) 876-2556
(404) 876-3212
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EXHIBIT A
APPLICABLE COMMITMENT PERCENTAGES
Bank Committed Percentage
NationsBank, N.A. 21.2%
Citibank, N.A. 20.0%
Bank of American National Trust
and Savings Association 17.6%
SunTrust Bank, Atlanta 11.7%
Societe Generale 5.9%
Wachovia Bank of North Carolina, N.A. 5.9%
LTCB Trust Company 5.9%
Signet Bank/Virginia 5.9%
Kredietbank, N.A. 5.9%
TOTAL: 100.0%
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EXHIBIT B
FORM OF ASSIGNMENT AND ACCEPTANCE
DATED ______________, 19__
Reference is made to the Amended and Restated Credit
Agreement dated as of December 21, 1995 (the "Agreement") among
Coca-Cola Bottling Co. Consolidated, a Delaware corporation
("Company"), the Banks (as defined in the Agreement) and
NationsBank, N.A., as Agent for the Banks ("Agent"). Unless
otherwise defined herein, terms defined in the Agreement are used
herein with the same meanings.
_______________________ (the "Assignor") and _______________
(the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee,
and the Assignee hereby purchases and assumes from the Assignor,
WITHOUT RECOURSE, a ___%1 interest in and to all of the
Assignor's rights and obligations under the Agreement as of the
Effective Date (as defined below), including, without limitation,
such percentage interest in the Assignor's Loan owing to the
Assignor on the Effective Date, and the Notes held by the
Assignor.
2. The Assignor (i) represents and warrants that, as of
the date hereof, the aggregate outstanding principal amount of
the Revolving Loan owing to it (without giving effect to
assignments thereof which have not yet become effective) is
$______; (ii) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder
and that such interest is free and clear of any adverse claim;
(iii) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with the Agreement or
the Revolving Note or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the
Agreement or the Revolving Note or any other instrument or
document furnished pursuant thereto; (iv) makes no representation
or warranty and assumes no responsibility with respect to the
financial condition of the Company or the performance or
observance by Borrower of any of its obligations under the
Agreement or the Revolving Note or any other instrument or
document furnished pursuant thereto and (v) attaches the Notes
referred to in paragraph 1 above and requests that the Agent
exchange such Note for new Notes as follows: A Revolving Note,
dated ______, 19__ in the principal amount of $_______, payable
to the order of the Assignor, and a Revolving Note, dated ______,
19__, in principal amount of $_________ payable to the order of
the Assignee; and a Competitive Bid Note dated _______, 19__ in
the
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principal amount of $________, payable to the order of the
Assignor, and a Competitive Bid Note, dated ________, 19__,
in the principal amount of $________ payable to the order of
the Assignee.
3. The Assignee (i) confirms that it has received a copy
of the Agreement, together with copies of the financial
statements referred to in Section 5.01 thereof and such other
documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will,
independently and without reliance upon the Agent, the Assignor,
or any other Bank and based on such documents and information as
it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the
Agreement; (iii) appoints and authorizes the Agent to take such
actions on its behalf and to exercise such powers thereof,
together with such powers as are reasonably incidental thereto;
(iv) agrees that it will perform in accordance with its terms
all of the obligations which by the terms of the Agreement are
required to be performed by the Bank; and (v) specifies as its
address for notices the office set forth beneath its name of the
signature pages hereof.
4. The effective date for this Assignment and Acceptance
shall be ________________ (the "Effective Date"). Following the
execution of this Assignment and Acceptance, it will be delivered
to the Agent for acceptance and recording by the Agent. The
Assignor shall retain all the rights accrued to it prior to the
Effective Date.
5. Upon such acceptance and recording, as of the Effective
Date, (i) the Assignee shall be a party to the Agreement and, to
the extent provided in this Assignment and Acceptance, have the
rights and obligations of a Bank thereunder and (ii) the Assignor
shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under
the Agreement.
6. Upon such acceptance and recording, from and after the
Effective Date, the Agent shall make all payments under the
Agreement and Notes in respect of the interest assigned hereby
(including, without limitation, all payments of principal,
interest and facility fees with respect thereto) to the Assignee.
The Assignor and Assignee shall make all appropriate adjustments
in payments under the Agreement and the Notes for periods prior
to the Effective Date directly between themselves.
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7. This Assignment and Acceptance shall be governed by and
construed in accordance with, the laws of the State of North
Carolina.
[NAME OF ASSIGNOR]
By: _________________________
Name:
Title:
Notice Address:
After the Effective Date
Outstanding Revolving Loans: $_______
[NAME OF ASSIGNEE]
By: _________________________
Name:
Title:
Notice Address:
After the Effective Date
Outstanding Revolving Loans: $_______
Accepted this ___ day of _____, 19__
NATIONSBANK, N.A.
By: __________________________________
Name:
Title:
We consent to the within
Assignment this ___ day of
__________, 199_.
COCA-COLA BOTTLING CO. CONSOLIDATED
By: _______________________________
Title: ____________________________
82
<PAGE>
EXHIBIT C
[Form of Note for Competitive Bid Loans]
COCA-COLA BOTTLING CO. CONSOLIDATED
Promissory Note
$170,000,000 December 21, 1995
FOR VALUE RECEIVED, the undersigned COCA-COLA BOTTLING CO.
CONSOLIDATED, a Delaware corporation (the "Company"), hereby
promises to pay to the order of _______________ (the "Bank") on
the Competitive Bid Maturity Date of each Competitive Bid Loan
made by the Bank to the Company pursuant to the Agreement
described below, the lesser of (i) the principal sum of One
Hundred Seventy Million Dollars ($170,000,000) or (ii) the unpaid
principal amount of all such Competitive Bid Loans made by the
Bank maturing on such Competitive Bid Maturity Date. The Company
further promises to pay to the order of the Bank interest on the
unpaid principal amount of each such Competitive Bid Loan form
time to time outstanding at the rate or rates per annum
determined pursuant to Section 2.02 of, or as otherwise provided
in, the Agreement, payable on the dates set forth in Sections
2.02(i) and 2.12 of, or as otherwise provided in, the Agreement.
This Competitive Bid Note is one of the "Competitive Bid
Notes" referred to in, and is entitled to the benefits provided
by, the Amended and Restated Credit Agreement dated as of
December 21, 1995 among the Company, the banks named on the
signature pages thereto and NationsBank, N.A., as Agent, (as the
same may from time to time be further amended and modified, the
"Agreement"). Said Agreement, among other things, contains
provisions for acceleration of the maturity of Competitive Bid
Loans evidenced hereby upon the happening of certain stated
events, upon the terms and conditions therein specified. Terms
defined in the agreement shall have the same meanings herein.
Subject to the provisions of the Agreement, payments of both
principal and interest shall be made at the office of
NationsBank, N.A., located at Independence Center, Charlotte,
North Carolina 28255, in lawful money of the United States of
America in immediately available funds.
The Company waives presentment, demand, notice, protest and
all other demands and notices in connection with the delivery,
acceptance, performance, default or enforcement of this
Competitive Bid Note and the Agreement, and an action for amounts
due hereunder or thereunder shall immediately accrue.
83
<PAGE>
This Competitive Bid Note shall be governed by and construed
and enforced in accordance with the laws of the State of North
Carolina.
COCA-COLA BOTTLING CO. CONSOLIDATED
By:________________________________
Title:_____________________________
84
<PAGE>
EXHIBIT D
[Form of Note for Revolving Loans]
COCA-COLA BOTTLING CO. CONSOLIDATED
Promissory Note
$_________________________ December 21, 1995
FOR VALUE RECEIVED, the undersigned COCA-COLA BOTTLING CO.
CONSOLIDATED, a Delaware corporation (the "Company"), hereby
promises to pay to the order of _____________ (the "Bank") on the
Revolving Loan Maturity Date of each Revolving Loan made by the
Bank to the Company pursuant to the Agreement described below,
the lesser of (i) the principal sum of _________ Dollars
($_______) or (ii) the unpaid principal amount of all such
Revolving Loans made by the Bank maturing on such Maturity Date.
The Company further promises to pay to the order of the Bank
interest on the unpaid principal amount hereof from time to time
outstanding at the rate or rates per annum determined pursuant to
Section 2.09(a) of, or as otherwise provided in the Agreement,
payable on the dates set forth in Section 2.11 of, or as
otherwise provided in, the Agreement.
This Revolving Note is one of the "Revolving Notes" referred
to in, and is entitled to the benefits provided by, the Amended
and Restated Credit Agreement dated as of December 21, 1995 among
the Company, the banks named on the signature pages thereto and
NationsBank, N.A., as Agent (as the same may from time to time be
further amended or modified, the "Agreement"). Said Agreement,
among other things, contains provisions for prepayments on
account of the principal of Loans evidenced hereby prior to the
maturity thereof and also for acceleration of the maturity of
such Loans upon the happening of certain stated events, upon the
terms and conditions therein specified. Terms defined in the
Agreement shall have the same meanings herein. Borrower agrees
to pay Default Interest when and as provided in Section 2.09(d)
of the Agreement.
Subject to the provisions of the Agreement, payments of both
principal and interest shall be made at the office of
NationsBank, N.A. located at Independence Center, Charlotte,
North Carolina 28255, in lawful money of the United States of
America in immediately available funds.
The Company waives presentment, demand, notice, protest and
all other demands and notices in connection with the delivery,
acceptance, performance, default or enforcement of this Note and
85
<PAGE>
the Agreement, and an action for amounts due hereunder or
thereunder shall immediately accrue.
This Note shall be governed by and construed and enforced in
accordance with the laws of the State of North Carolina.
COCA-COLA BOTTLING CO. CONSOLIDATED
By:________________________________
Title:_____________________________
86
<PAGE>
EXHIBIT E
[Form of Competitive Bid Quote Request]
__________, 19__
To: NationsBank, N.A.
Independence Center, 15th Floor
Charlotte, North Carolina 28255
Attention: Agency Services
From: Coca-Cola Bottling Co. Consolidated
Re: Competitive Bid Quote Request
Pursuant to Section 2.02(b) of the Amended and Restated
Credit Agreement dated as of December 21, 1995 among Coca-Cola
Bottling Co. Consolidated, the banks named on the signature pages
thereto and NationsBank, N.A., as Agent, (as the same may from
time to time be further amended or modified, the "Agreement"), we
hereby give notice that we request Quotes for the following
proposed Competitive Bid Borrowing(s):
Borrowing Principal Interest
Date Amount 1 Type2 Period 3
Terms used herein have the meanings assigned to them in the
Agreement.
COCA-COLA BOTTLING CO. CONSOLIDATED
By:________________________________
Title:
87
<PAGE>
EXHIBIT F
[Form of Competitive Bid Quote]
NationsBank, N.A., as Agent
Independence Center, 15th Floor
Charlotte, North Carolina 28255
Attention: Agency Services
Re: Competitive Bid Quote to Coca-Cola Bottling Co. Consolidated
(the "Company")
This Competitive Bid Quote is given in accordance with
Section 2.02(d) of the Amended and Restated Credit Agreement
dated as of December 21, 1995, among Coca-Cola Bottling Co.
Consolidated, the banks named on the signature pages thereto and
NationsBank, N.A., as Agent (as the same may from time to time be
further amended or modified, the "Agreement"). Terms defined in
the agreement are used herein as defined therein.
In response to the Company's invitation dated ________,
19__, we hereby make the following Competitive Bid Loan(s) in the
following principal amounts, for the following Interest Periods
and at the following rates:
Borrowing Principal Interest
Date 1 Amount 2 Type3 Period 4 Rate5
88
<PAGE>
We understand and agree that the offer(s) set forth above,
subject to the satisfaction of the applicable conditions set
forth in the agreement, irrevocably obligate(s) us to make the
Competitive Bid Loan(s) for which any offer(s) [is] [are]
accepted, in whole or in part (subject to Section 2.02(g) of the
Agreement).
Very truly yours,
[Name of Bank]
Dated: By:________________________
Authorized Officer
89
<PAGE>
EXHIBIT G
Opinion of Counsel to the Company
See attached.
90
<PAGE>
EXHIBIT H
Margin Certificate
91
<PAGE>
SCHEDULE 1
Certain Material Litigation
92
<PAGE>
SCHEDULE 2
Subsidiaries
93
<PAGE>
SCHEDULE 3
Material Agreements
94
<PAGE>
SCHEDULE 4
Material Indebtedness and Contingent Liabilities
95
<PAGE>
SCHEDULE 5
Material Liens
96
<PAGE>
SCHEDULE 6
Existing Subsidiary Guarantees
97
<PAGE>
STRICTLY CONFIDENTIAL
November 9, 1995
BEVERAGE CAN AND END AGREEMENT
This letter confirms our agreement for the Ball Metal Beverage Container
Group (BMBCG) to supply 202 12 oz aluminum cans and ends to Coca-Cola Bottling
Company Consolidated, Inc. (CCBCC).
Supply Volume and Period
Location Volume Supply Period
Mobile 200MM January 1, 1996 through December 31, 2000 (5 years*).
This agreement incorporates the "Alcan Band Agreement"
formula pricing, and also includes BMBCG conversion
prices subject to market changes as detailed below.
Nashville 185MM January 1, 1996 through December 31, 1996. This
agreements incorporates a one-year fixed London Metal
Exchange/Mid West Premium (LME/MWP) ingot price
and fixed BMBCG conversion price. Sheet conversion
price subject to market changes.
Specifications
202 / 211 x 413 12 oz aluminum non-basecoated soft drink cans (.0112" input
gauge). 202 B-64 aluminum SOT soft drink ends (.0086" input gauge shell &
.0100" input tab).
Supply Points
The 12 oz cans will be supplied from Conroe, TX and Findlay, Ohio. Ends will
be supplied from Findlay, Ohio. If the supply point is changed, it will be a
mutually agreed upon, qualified location, that is approved by CCBCC.
<PAGE>
November 9, 1995
Page 2
Formula Pricing (Examples Attached)
Three factors determine can and end pricing:
1. LME + MWP ingot price (Alcan Band Ceiling/Floor and fixed ingot).
2. Ingot conversion to aluminum sheet for body, shell, and tab stock (Alcan
Band Formula and market price).
3. Sheet conversion to aluminum beverage cans and ends (BMBCG Conversion Price).
Alcan Band Major Points (Mobile)
(Bullet) LME/MWP ingot ceiling of $.85/lb. and a floor of $.70/lb.
(Bullet) *Five (5) year agreement between CCBCC, Alcan and BMBCG. Note: If the
LME/MWP is outside the band for 75% of the days from July 1, 1999
through December 31, 1999, then the contract is involuntarily
extended for a 6th year (2001). This agreement (according to the
Alcan Band) may be extended by mutual agreement between CCBCC, Alcan
and BMBCG for an additional 7th year (2002); this option must be
exercised by October 1, 2001 (October 1 of 6th year). Two successive
three (3) year extensions will also be made available provided all
parties agree on the terms and conditions twelve (12) months prior to
the termination of the initial five- (5) year term or any
extension period as discussed above.
(Bullet) Six (6) month average of the LME/MWP prices will be established twice
each year.
(Bullet) Binding agreement on all parties.
(Bullet) 50% of Intermediate Materials Producers Price Index (PPI) added to
ceiling and floor for 1997 and beyond.
(Bullet) Can sheet conversion price $.324/lb. (.0112") for 1996. Thereafter,
conversion price based on 50% of Intermediate Materials PPI % change.
<PAGE>
November 9, 1995
Page 3
Alcan Band Major Points (Mobile) (Continued)
(Bullet) End sheet conversion price $.849/lb. (.0086"). An increase of $.01
to $.02/lb. is expected in 1996 due to coating cost increase. 1997
and beyond, 50% of PPI change applies.
(Bullet) Significant increases not included in PPI require adjustment to
price, but no greater than other first tier aluminum suppliers.
Ball required to take minimum 95% of committed volume in six month period
and can take maximum of 55% of annual volume in any 6 month period. CCBCC
requirements should mirror this requirement as closely as possible.
Backhaul
<TABLE>
<CAPTION>
Can End Dunnage
Ball Supply Consolidated Bottling Backhaul Backhaul Backhaul Truckloads
Location Location ($/M) ($/M) (T/L) Volume /Year
<S> <C> <C> <C> <C> <C> <C>
Findlay, OH Nashville, TN $ 3.31 $ 0.09 $ 575.00 185,000,000 1029.4
Conroe,TX Mobile,AL $ 2.43 $ 0.14 $ 695.60 200,000,000 1112.9
</TABLE>
Sales Terms
Invoices are issued once per week on Monday for the previous weeks shipments.
Terms: 1% 10 days, net 30 days from Monday invoice date. Interest assessed on
past due invoices is at prime + 2%.
<PAGE>
November 9, 1995
Page 4
Packaging
Packaging materials (can pallets, end pallets, top frames and chipboard) are
returnable and will be reconciled monthly.
Please sign both documents and return one to BMBCG and keep the other copy
for your records.
COCA-COLA BOTTLING BALL METAL BEVERAGE
COMPANY CONSOLIDATED CONTAINER GROUP
/s/ /s/
/s/ /s/
Witness Witness
11/16/95 11/9/95
Date Date
<PAGE>
<PAGE>
MEMBER PURCHASE AGREEMENT
This MEMBER PURCHASE AGREEMENT is entered into as of this
1st day of August, 1994, by and between SOUTH ATLANTIC
CANNERS, INC., a South Carolina corporation, hereinafter referred
to as "SAC," and Coca-Cola Bottling Co. Consolidated, a Delaware
corporation, hereinafter referred to as "Member."
WHEREAS, SAC processes Coca-Cola and other soft drink
beverage products ("Beverage Products") and distributes and sells
them to its members on a cooperative basis; and
WHEREAS, Member is a franchised Coca-Cola bottler which has
satisfied SAC's qualifications for membership and intends to
purchase Beverage Products from SAC in accordance with this
Agreement,
NOW, THEREFORE, in consideration for the mutual undertakings
described herein and other good and valuable consideration, the
parties hereby agree as follows:
Section 1. Purchase Requirement.
A. Member agrees to a minimum purchase requirement of
the lesser of:
(1) eighty percent (80%) of Member's monthly
canned Coca-Cola product ("Canned Product") requirements, or
(2) 4,000,000 (four million) cases of Canned Product on an
annual basis and not less than five percent (5%) of this
amount on a monthly basis.
SAC agrees to sell and deliver such products in accordance with
this Agreement. As used herein, the terms "Coca-Cola product"
and "Coca-Cola products" mean any soft drink product made or
offered by The Coca-Cola Company.
B. The purchase and sale requirement in Section 1A(1)
of this Agreement applies to all Canned Product used during the
term of this Agreement by Member in Member's business or
businesses at the facilities listed in Attachment A. SAC agrees
to use its best efforts to sell Member additional Canned Product
up to Member's total requirements.
C. In the event SAC is unable for any reason to supply
Member with Canned Product for which it is obligated under this
Agreement, SAC shall release Member from Member's commitment to
buy such products from SAC, and Member shall likewise release SAC
from its commitment to sell such products, only with respect to
that portion of the Canned Product that SAC is unable to fill
<PAGE>
from SAC's production and only with respect to the time interval
during which SAC is unable to fill Member's orders from SAC's
production. In the event it should be necessary to allocate
SAC's production among parties entering into agreements similar
to this one, such shortage allocation shall be made among those
parties on the basis of their relative patronage for the prior
six (6) month period or on such other basis as may be determined
by SAC's Board of Directors ("SAC Board"), whose decisions shall
be binding.
Section 2. Price.
SAC will sell Canned Product at such prices as may be set
from time to time by the SAC Board and shall make patronage
refunds in accordance with SAC's Bylaws ("Bylaws"). Member shall
pay SAC in full within the payment time period specified by the
SAC Board. Such time period shall be specified on the invoice
along with any charges for late payment. If payments are not
made on a timely basis, SAC may elect to make future shipments on
a C.O.D. basis.
Section 3. Term.
A. Except as provided in Subparagraph B of this
Section, this Agreement shall be binding upon the parties until
such time as either party gives the other party twelve (12)
months' written notice of termination; provided, however, that
(l) either party shall have the right to terminate this Agreement
upon thirty (30) calendar days' written notice in the event the
other party files a voluntary petition in bankruptcy, is
adjudicated a bankrupt, is adjudged insolvent, makes a general
assignment of assets for the benefit of creditors, or has a
receiver appointed due to insolvency; and (2) SAC may terminate
this Agreement if Member (a) fails to meet the requirements for
membership in accordance with Section 2 of Article II of the
Bylaws, (b) fails to cure a material breach of this Agreement
within forty-five (45) days of receiving notice thereof, or (c)
has been found by SAC to have engaged in more than one violation
of Section 7 of this Agreement relating to Transshipping.
B. This Agreement may be terminated in accordance with
Subparagraph 2 of Section 9-B in the event the Force Majeure
provisions of that Subparagraph are met.
C. If SAC fails to maintain, for any continuous
period of six (6) months ("Comparison Period"), an average price
for Canned Product at or below the "Average Product Price" or a
quality of Canned Product at a level equal to or better than the
"Customary Product Quality," Member shall have the option to
terminate its purchase obligation under this Agreement upon sixty
(60) days' written notice delivered to SAC within three (3)
months after the close of the Comparison Period. As used herein,
the term "Average Product Price" shall mean the average price
-2-
<PAGE>
charged by two other manufacturers of Coca-Cola products selling
in the eastern United States capable of producing quantities
desired by Member during the Comparison Period, and the term
"Customary Product Quality" shall mean the standard quality of
Coca-Cola products customarily sold by other manufacturers of
such products in the eastern United States during the Comparison
Period. For purposes of determining SAC's average price for
Canned Product, the patronage dividend to be received by the
members for such period shall be taken into consideration in
determining the price charged members. If the exact amount of
the patronage dividend has not been determined for the Comparison
Period, reasonable estimates may be used for this purpose.
Section 4. Purchase Estimates and Orders. Member agrees to
provide SAC with estimates of its purchases of Canned Product at
such times and places as shall be required by the SAC Board.
Member shall place all orders with SAC at least fifteen (15)
calendar days prior to the requested delivery date.
Section 5. Delivery. SAC shall ship Canned Product to
Member within a reasonable time after receipt of an order from
Member that is within ten percent (10%) of the estimated amount
previously submitted to SAC by Member for such period. Delivery
shall be upon such terms as the SAC Board may determine from time
to time. Member agrees to accept delivery in such manner as
provided by SAC in accordance with the policy established by the
SAC Board.
Section 6. Certain Events of Default/Damages.
A. If Member (a) fails to purchase any Canned Product
for a period of sixty (60) calendar days, (b) fails to meet its
purchase requirements pursuant to Section 1 of this Agreement or
the Bylaws for a period of sixty (60) calendar days, (c) loses
its Coca-Cola franchise or otherwise ceases to be engaged in the
business of a franchised Coca-Cola bottler on account of
dissolution, merger, reorganization, or any other reason and in
any of such events has not given SAC twelve (12) months' written
notice of the termination of this Agreement as provided in
Section 3 of this Agreement, or (d) Member otherwise terminates
this Agreement without giving twelve (12) months' notice of
termination as provided in Section 3 of this Agreement, such
action shall constitute an Event of Default and Member shall pay
SAC as liquidated damages for failure to give the required notice
of termination an amount equal to the sum of its Canned Product
purchases during the immediately preceding twelve (12) month
period minus operating costs to SAC reasonably associated with
such production, and the amount of the Member's proportionate
interest in capital improvements purchased, or capital
improvements which SAC is under contract to purchase, for Canned
Product for the twelve (12) month notice period. For this
purpose, a Member's proportionate interest shall be measured by
its Canned Product patronage volume over the preceding twelve
-3-
<PAGE>
(12) month period in comparison with the total Canned Product
patronage volume for SAC during such period. These amounts shall
be paid within twenty (20) days of Member's receipt of notice of
the amount due from SAC.
B. Liquidated damages specified in Subparagraph A of
this Section apply only to those damages arising from the failure
to give the requisite notice of termination. Member shall be
responsible for any and all other liability, loss, or damage
arising from any other breach of the Agreement by Member.
C. Damages arising under Subsection A of this Section
6 by virtue of a merger, sale of assets, or other reorganization
in which the former Member's business as a franchised Coca-Cola
bottler is continued by another individual or entity ("Successor
Bottler") shall be abated if (l) the Successor Bottler applies
for and is approved as a member of SAC within thirty (30) days of
such reorganization or (2) the Successor Bottler agrees to honor
and abide by the twelve (12) months' written notice requirement
for termination between SAC and the former member. Member
represents that it will use its best efforts to cause the
Successor Bottler to apply for and be selected as a member of
SAC.
D. In addition to any other rights and remedies
arising under this Agreement, SAC shall be entitled, without
notice to Member, to set off and apply all amounts otherwise
payable under the Bylaws to Member upon withdrawal from SAC
against any and all obligations and liabilities of Member arising
under this Section 6.
Section 7. Transshipping.
A. Members shall not engage in transshipping of
Coca-Cola products in violation of requirements established by
The Coca-Cola Company ("Transshipping").
B. In the event that Member is determined to have
engaged in Transshipping, Member shall indemnify and hold
harmless SAC from any and all claims, losses and liabilities
incurred by SAC growing out of or resulting from such incident or
incidents of Transshipping. The rights of SAC under this Section
7 shall be in addition to other rights and remedies provided for
herein or otherwise available to SAC.
Section 8. Loss of Membership Qualification. In the event
Member ceases to be qualified for membership under Section 2 of
Article II of the Bylaws and fails to surrender its shares of
stock to SAC within thirty (30) days of receiving notice of its
loss of qualification, Member hereby assigns all right, title,
and interest in such shares to SAC, including the right to cancel
such shares.
-4-
<PAGE>
Section 9. Miscellaneous.
A. Representation of Member. Member represents that
it has received a copy of SAC's Articles of Incorporation and
Bylaws and agrees to abide by and be bound by them as well as by
any amendments thereto. In the event of a conflict between the
Articles of Incorporation or Bylaws and the terms of this
Agreement, the provisions of the Articles of Incorporation or
Bylaws shall govern.
B. Force Majeure.
1. If performance of this Agreement is prevented
or restricted by an event of Force Majeure, the party so affected
upon giving prompt notice to the other party shall be temporarily
excused from the performance so prevented or restricted. As used
herein, the term "Force Majeure" shall mean any causes or
contingencies beyond the reasonable control of the party affected
thereby, including but not limited to acts of God, fire,
explosion, breakdown or failure of plant machinery, strike,
walk-out, labor dispute, casualty or accident, lack of or failure
in whole or in part of transportation facilities, lack of or
failure in whole or in part of sources of supply of labor, raw
materials, acts of local, state, or federal governmental bodies
or agencies, or other such occurrences whether or not of like or
similar nature.
2. If an event of Force Majeure persists for
longer than (a) a period necessary to promptly and diligently
pursue efforts to overcome the event of Force Majeure or (b) a
period of four (4) months, whichever period is shorter, then the
party which is not affected by the Force Majeure may, upon ten
(10) days prior notice to the affected party, terminate this
Agreement without any liability of either party to the other.
C. Governing Law. This Agreement shall be interpreted
and construed in accordance with the laws of the State of South
Carolina, without regard to the conflict of laws provisions
thereof.
D. Severability. Should any part of this Agreement be
determined to be invalid or unenforceable, it shall not affect
the validity or enforceability of the remaining parts of this
Agreement. If any portion of this Agreement is unenforceable
because it is excessive or unreasonable, the parties intend that
such provision shall be binding and enforceable to the extent
that it is not excessive or unreasonable. In the event that an
arbitrator or court of competent jurisdiction determines that any
of the provisions of this Agreement specifically set forth herein
are incapable of being enforced, said arbitrator or court is
authorized and requested to modify and enforce such provisions to
the maximum extent permitted by law so as to most nearly
implement the terms of this Agreement.
-5-
<PAGE>
E. Notices. Any notices, requests, demands and other
communications to be given by any party hereunder shall be in
writing and shall be given by personal delivery, by overnight
delivery service or by registered or certified mail, postage
prepaid return receipt requested; and such notice shall be deemed
to be given at the time when the same shall be thus delivered or
mailed.
(i) Notices to be given to SAC shall be given to:
601 Cousar Street
P. O. Box 548
Bishopville, S.C. 29010
ATTN: President
Telecopy Number: (803) 484-5841
With a copy to:
Coca-Cola Bottling Co. Consolidated
1900 Rexford Road
Charlotte, NC 28211
Attention: Chief Financial Officer
Telecopy Number: (704) 551-4451
(ii) Notices to Member shall be given to:
Coca-Cola Bottling Co. Consolidated
1900 Rexford Road
Charlotte, NC 28211
Attention: Chief Financial Officer
Telecopy Number: (704) 551-4451
ATTN: David Singer
Either party may change its address for receiving notice by
written notice given to the other party.
F. Entire Agreement. This Agreement constitutes the
entire agreement of the parties and supersedes all prior written
or oral understandings.
G. No Waiver. Failure on the part of SAC to enforce
any of the provisions of this Agreement shall not constitute a
waiver of such breach or any succeeding breach, and shall not
affect the continuing obligation of the other party which shall
remain bound by the terms of this Agreement in all respects.
H. Prior Canning Agreements Superseded to the Extent
Inconsistent with this Agreement. This Agreement supersedes any
outstanding Canning Agency Agreement or Contract Canners
Agreement between the parties which establish terms by which SAC
shall produce cans or other products for Member, to the extent
such agreements are inconsistent with this Agreement.
-6-
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this
Agreement to be duly executed all as of the date first written above.
SOUTH ATLANTIC CANNERS, INC. /s/ David Singer
By: By: David Singer
Title: Title: VP & CFO
-7-
<PAGE>
ATTACHMENT "A"
Please list the locations, city and county, of the
facilities covered by this Agreement.
MEMBER:
By:
Title:
<PAGE>
<PAGE>
MEMBER PURCHASE AGREEMENT
This MEMBER PURCHASE AGREEMENT is entered into as of this
1st day of August, 1994, by and between SOUTH ATLANTIC
CANNERS, INC., a South Carolina corporation, hereinafter referred
to as "SAC," and CCBCC, a Delaware corporation, hereinafter referred
to as "Member."
WHEREAS, SAC processes Coca-Cola and other soft drink
beverage products ("Beverage Products") and distributes and sells
them to its members on a cooperative basis; and
WHEREAS, Member is a franchised Coca-Cola bottler which has
satisfied SAC's qualifications for membership and intends to
purchase Beverage Products from SAC in accordance with this
Agreement,
NOW, THEREFORE, in consideration for the mutual undertakings
described herein and other good and valuable consideration, the
parties hereby agree as follows:
Section 1. Purchase Requirement.
A. Member agrees to a minimum purchase requirement of the lessor of:
(1) eighty percent (80%) of Member's monthly
Coca-Cola PET 20 ounce bottle product ("20 Oz Bottled
Product") requirements, or
(2) 3,000,000 (three million) cases of 20 Oz Bottled
Product on an annual basis and not less than five percent
(5%) of this amount on a monthly basis.
SAC agrees to sell and deliver such products in accordance with
this Agreement. As used herein, the terms "Coca-Cola product"
and "Coca-Cola products" mean any soft drink product made or
offered by The Coca-Cola Company.
B. The purchase and sale requirement in Section 1A(1)
of this Agreement applies to all 20 Oz Bottled Product used
during the term of this Agreement by Member in Member's business
or businesses at the facilities listed in Attachment A. SAC
agrees to use its best efforts to sell Member additional 20 Oz
Bottled Product up to Member's total requirements.
C. In the event SAC is unable for any reason to supply
Member with 20 Oz Bottled Product for which it is obligated under
this Agreement, SAC shall release Member from Member's commitment
to buy such products from SAC, and Member shall likewise release
SAC from its commitment to sell such products, only with respect
<PAGE>
to that portion of the 20 Oz Bottled Product that SAC is unable
to fill from SAC's production and only with respect to the time
interval during which SAC is unable to fill Member's orders from
SAC's production. In the event it should be necessary to
allocate SAC's production among parties entering into agreements
similar to this one, such shortage allocation shall be made among
those parties on the basis of their relative patronage for the
prior six (6) month period or on such other basis as may be
determined by SAC's Board of Directors ("SAC Board"), whose
decisions shall be binding.
Section 2. Price.
SAC will sell 20 Oz Bottled Product at such prices as may be
set from time to time by the SAC Board and shall make patronage
refunds in accordance with SAC's Bylaws ("Bylaws"). Member shall
pay SAC in full within the payment time period specified by the
SAC Board. Such time period shall be specified on the invoice
along with any charges for late payment. If payments are not
made on a timely basis, SAC may elect to make future shipments on
a C.O.D. basis.
Section 3. Term.
A. Except as provided in Subparagraph B of this
Section, this Agreement shall be binding upon the parties until
such time as either party gives the other party twelve (12)
months' written notice of termination; provided, however, that
(l) either party shall have the right to terminate this Agreement
upon thirty (30) calendar days' written notice in the event the
other party files a voluntary petition in bankruptcy, is
adjudicated a bankrupt, is adjudged insolvent, makes a general
assignment of assets for the benefit of creditors, or has a
receiver appointed due to insolvency; and (2) SAC may terminate
this Agreement if Member (a) fails to meet the requirements for
membership in accordance with Section 2 of Article II of the
Bylaws, (b) fails to cure a material breach of this Agreement
within forty-five (45) days of receiving notice thereof, or (c)
has been found by SAC to have engaged in more than one violation
of Section 7 of this Agreement relating to Transshipping.
B. This Agreement may be terminated in accordance with
Subparagraph 2 of Section 9-B in the event the Force Majeure
provisions of that Subparagraph are met.
C. If SAC fails to maintain, for any continuous
period of six (6) months ("Comparison Period"), an average price
for 20 Oz Bottled Product at or below the "Average Product Price"
or a quality of 20 Oz Bottled Product at a level equal to or
better than the "Customary Product Quality," Member shall have
the option to terminate its purchase obligation under this
Agreement upon sixty (60) days' written notice delivered to SAC
within three (3) months after the close of the Comparison Period.
-2-
<PAGE>
As used herein, the term "Average Product Price" shall mean the
average price charged by two other manufacturers of Coca-Cola
products selling in the eastern United States capable of
producing quantities desired by Member during the Comparison
Period, and the term "Customary Product Quality" shall mean the
standard quality of Coca-Cola products customarily sold by other
manufacturers of such products in the eastern United States
during the Comparison Period. For purposes of determining SAC's
average price for 20 Oz Bottled Product, the patronage dividend
to be received by the members for such period shall be taken into
consideration in determining the price charged members. If the
exact amount of the patronage dividend has not been determined
for the Comparison Period, reasonable estimates may be used for
this purpose.
Section 4. Purchase Estimates and Orders. Member agrees to
provide SAC with estimates of its purchases of 20 Oz Bottled
Product at such times and places as shall be required by the SAC
Board. Member shall place all orders with SAC at least fifteen
(15) calendar days prior to the requested delivery date.
Section 5. Delivery. SAC shall ship 20 Oz Bottled Product
to Member within a reasonable time after receipt of an order from
Member that is within ten percent (10%) of the estimated amount
previously submitted to SAC by Member for such period. Delivery
shall be upon such terms as the SAC Board may determine from time
to time. Member agrees to accept delivery in such manner as
provided by SAC in accordance with the policy established by the
SAC Board.
Section 6. Certain Events of Default/Damages.
A. If Member (a) fails to purchase any 20 Oz Bottled
Product for a period of sixty (60) calendar days, (b) fails to
meet its purchase requirements pursuant to Section 1 of this
Agreement or the Bylaws for a period of sixty (60) calendar days,
(c) loses its Coca-Cola franchise or otherwise ceases to be
engaged in the business of a franchised Coca-Cola bottler on
account of dissolution, merger, reorganization, or any other
reason and in any of such events has not given SAC twelve (12)
months' written notice of the termination of this Agreement as
provided in Section 3 of this Agreement, or (d) Member otherwise
terminates this Agreement without giving twelve (12) months'
notice of termination as provided in Section 3 of this Agreement,
such action shall constitute an Event of Default and Member shall
pay SAC as liquidated damages for failure to give the required
notice of termination an amount equal to the sum of its 20 Oz
Bottled Product purchases during the immediately preceding twelve
(12) month period minus operating costs to SAC reasonably
associated with such production, and the amount of the Member's
proportionate interest in capital improvements purchased, or
capital improvements which SAC is under contract to purchase, for
20 Oz Bottled Product for the twelve (12) month notice period.
-3-
<PAGE>
For this purpose, a Member's proportionate interest shall be
measured by its 20 Oz Bottled Product patronage volume over the
preceding twelve (12) month period in comparison with the total
20 Oz Bottled Product patronage volume for SAC during such
period. These amounts shall be paid within twenty (20) days of
Member's receipt of notice of the amount due from SAC.
B. Liquidated damages specified in Subparagraph A of
this Section apply only to those damages arising from the failure
to give the requisite notice of termination. Member shall be
responsible for any and all other liability, loss, or damage
arising from any other breach of the Agreement by Member.
C. Damages arising under Subsection A of this Section
6 by virtue of a merger, sale of assets, or other reorganization
in which the former Member's business as a franchised Coca-Cola
bottler is continued by another individual or entity ("Successor
Bottler") shall be abated if (l) the Successor Bottler applies
for and is approved as a member of SAC within thirty (30) days of
such reorganization or (2) the Successor Bottler agrees to honor
and abide by the twelve (12) months' written notice requirement
for termination between SAC and the former member. Member
represents that it will use its best efforts to cause the
Successor Bottler to apply for and be selected as a member of
SAC.
D. In addition to any other rights and remedies
arising under this Agreement, SAC shall be entitled, without
notice to Member, to set off and apply all amounts otherwise
payable under the Bylaws to Member upon withdrawal from SAC
against any and all obligations and liabilities of Member arising
under this Section 6.
Section 7. Transshipping.
A. Members shall not engage in transshipping of
Coca-Cola products in violation of requirements established by
The Coca-Cola Company ("Transshipping").
B. In the event that Member is determined to have
engaged in Transshipping, Member shall indemnify and hold
harmless SAC from any and all claims, losses and liabilities
incurred by SAC growing out of or resulting from such incident or
incidents of Transshipping. The rights of SAC under this Section
7 shall be in addition to other rights and remedies provided for
herein or otherwise available to SAC.
Section 8. Loss of Membership Qualification. In the event
Member ceases to be qualified for membership under Section 2 of
Article II of the Bylaws and fails to surrender its shares of
stock to SAC within thirty (30) days of receiving notice of its
loss of qualification, Member hereby assigns all right, title,
-4-
<PAGE>
and interest in such shares to SAC, including the right to cancel
such shares.
Section 9. Miscellaneous.
A. Representation of Member. Member represents that
it has received a copy of SAC's Articles of Incorporation and
Bylaws and agrees to abide by and be bound by them as well as by
any amendments thereto. In the event of a conflict between the
Articles of Incorporation or Bylaws and the terms of this
Agreement, the provisions of the Articles of Incorporation or
Bylaws shall govern.
B. Force Majeure.
1. If performance of this Agreement is prevented
or restricted by an event of Force Majeure, the party so affected
upon giving prompt notice to the other party shall be temporarily
excused from the performance so prevented or restricted. As used
herein, the term "Force Majeure" shall mean any causes or
contingencies beyond the reasonable control of the party affected
thereby, including but not limited to acts of God, fire,
explosion, breakdown or failure of plant machinery, strike,
walk-out, labor dispute, casualty or accident, lack of or failure
in whole or in part of transportation facilities, lack of or
failure in whole or in part of sources of supply of labor, raw
materials, acts of local, state, or federal governmental bodies
or agencies, or other such occurrences whether or not of like or
similar nature.
2. If an event of Force Majeure persists for
longer than (a) a period necessary to promptly and diligently
pursue efforts to overcome the event of Force Majeure or (b) a
period of four (4) months, whichever period is shorter, then the
party which is not affected by the Force Majeure may, upon ten
(10) days prior notice to the affected party, terminate this
Agreement without any liability of either party to the other.
C. Governing Law. This Agreement shall be interpreted
and construed in accordance with the laws of the State of South
Carolina, without regard to the conflict of laws provisions
thereof.
D. Severability. Should any part of this Agreement be
determined to be invalid or unenforceable, it shall not affect
the validity or enforceability of the remaining parts of this
Agreement. If any portion of this Agreement is unenforceable
because it is excessive or unreasonable, the parties intend that
such provision shall be binding and enforceable to the extent
that it is not excessive or unreasonable. In the event that an
arbitrator or court of competent jurisdiction determines that any
of the provisions of this Agreement specifically set forth herein
are incapable of being enforced, said arbitrator or court is
-5-
<PAGE>
authorized and requested to modify and enforce such provisions to
the maximum extent permitted by law so as to most nearly
implement the terms of this Agreement.
E. Notices. Any notices, requests, demands and other
communications to be given by any party hereunder shall be in
writing and shall be given by personal delivery, by overnight
delivery service or by registered or certified mail, postage
prepaid return receipt requested; and such notice shall be deemed
to be given at the time when the same shall be thus delivered or
mailed.
(i) Notices to be given to SAC shall be given to:
601 Cousar Street
P. O. Box 548
Bishopville, S.C. 29010
ATTN: President
Telecopy Number: (803) 484-5841
With a copy to:
Coca-Cola Bottling Co. Consolidated
1900 Rexford Road
Charlotte, NC 28211
Attention: Chief Financial Officer
Telecopy Number: (704) 551-4451
(ii) Notices to Member shall be given to:
ATTN:
Either party may change its address for receiving notice by
written notice given to the other party.
F. Entire Agreement. This Agreement constitutes the
entire agreement of the parties and supersedes all prior written
or oral understandings.
G. No Waiver. Failure on the part of SAC to enforce
any of the provisions of this Agreement shall not constitute a
waiver of such breach or any succeeding breach, and shall not
affect the continuing obligation of the other party which shall
remain bound by the terms of this Agreement in all respects.
-6-
<PAGE>
H. Prior Canning Agreements Superseded to the Extent
Inconsistent with this Agreement. This Agreement supersedes any
outstanding Canning Agency Agreement or Contract Canners
Agreement between the parties which establish terms by which SAC
shall produce cans or other products for Member, to the extent
such agreements are inconsistent with this Agreement.
IN WITNESS WHEREOF, each of the parties has caused this
Agreement to be duly executed all as of the date first written
above.
SOUTH ATLANTIC CANNERS, INC. /s/ David V. Singer
By: By: David V. Singer
Title: Title: VP & CFO
<PAGE>
ATTACHMENT "A"
Please list the locations, city and county, of the facilities covered by this
Agreement.
MEMBER:
By:
Title:
<PAGE>
<PAGE>
MEMBER PURCHASE AGREEMENT
This MEMBER PURCHASE AGREEMENT is entered into as of this
1st day of August, 1994, by and between SOUTH ATLANTIC
CANNERS, INC., a South Carolina corporation, hereinafter referred
to as "SAC," and CCBCC, a Delaware corporation, hereinafter referred
to as "Member."
WHEREAS, SAC processes Coca-Cola and other soft drink
beverage products ("Beverage Products") and distributes and sells
them to its members on a cooperative basis; and
WHEREAS, Member is a franchised Coca-Cola bottler which has
satisfied SAC's qualifications for membership and intends to
purchase Beverage Products from SAC in accordance with this
Agreement,
NOW, THEREFORE, in consideration for the mutual undertakings
described herein and other good and valuable consideration, the
parties hereby agree as follows:
Section 1. Purchase Requirement.
A. Member agrees to a minimum purchase requirement of
the lessor of:
(1) eighty percent (80%) of Member's monthly
Coca-Cola PET two liter bottle product ("2 Liter Bottled
Product") requirements, or
(2) 1,300,000 (one million three hundred thousand) cases
of 2 Liter Bottled Product on an annual basis and not less than five percent
(5%) of this amount on a monthly basis.
SAC agrees to sell and deliver such products in accordance with
this Agreement. As used herein, the terms "Coca-Cola product"
and "Coca-Cola products" mean any soft drink product made or
offered by The Coca-Cola Company.
B. The purchase and sale requirement in Section 1A(1)
of this Agreement applies to all 3 Liter Bottled Product used
during the term of this Agreement by Member in Member's business
or businesses at the facilities listed in Attachment A. SAC
agrees to use its best efforts to sell Member additional 3 Liter
Bottled Product up to Member's total requirements.
C. In the event SAC is unable for any reason to supply
Member with 3 Liter Bottled Product for which it is obligated
under this Agreement, SAC shall release Member from Member's
commitment to buy such products from SAC, and Member shall
likewise release SAC from its commitment to sell such products,
<PAGE>
only with respect to that portion of the 3 Liter Bottled Product
that SAC is unable to fill from SAC's production and only with
respect to the time interval during which SAC is unable to fill
Member's orders from SAC's production. In the event it should be
necessary to allocate SAC's production among parties entering
into agreements similar to this one, such shortage allocation
shall be made among those parties on the basis of their relative
patronage for the prior six (6) month period or on such other
basis as may be determined by SAC's Board of Directors ("SAC
Board"), whose decisions shall be binding.
Section 2. Price.
SAC will sell 3 Liter Bottled Product at such prices as may
be set from time to time by the SAC Board and shall make
patronage refunds in accordance with SAC's Bylaws ("Bylaws").
Member shall pay SAC in full within the payment time period
specified by the SAC Board. Such time period shall be specified
on the invoice along with any charges for late payment. If
payments are not made on a timely basis, SAC may elect to make
future shipments on a C.O.D. basis.
Section 3. Term.
A. Except as provided in Subparagraph B of this
Section, this Agreement shall be binding upon the parties until
such time as either party gives the other party twelve (12)
months' written notice of termination; provided, however, that
(l) either party shall have the right to terminate this Agreement
upon thirty (30) calendar days' written notice in the event the
other party files a voluntary petition in bankruptcy, is
adjudicated a bankrupt, is adjudged insolvent, makes a general
assignment of assets for the benefit of creditors, or has a
receiver appointed due to insolvency; and (2) SAC may terminate
this Agreement if Member (a) fails to meet the requirements for
membership in accordance with Section 2 of Article II of the
Bylaws, (b) fails to cure a material breach of this Agreement
within forty-five (45) days of receiving notice thereof, or (c)
has been found by SAC to have engaged in more than one violation
of Section 7 of this Agreement relating to Transshipping.
B. This Agreement may be terminated in accordance with
Subparagraph 2 of Section 9-B in the event the Force Majeure
provisions of that Subparagraph are met.
C. If SAC fails to maintain, for any continuous
period of six (6) months ("Comparison Period"), an average price
for 3 Liter Bottled Product at or below the "Average Product
Price" or a quality of 3 Liter Bottled Product at a level equal
to or better than the "Customary Product Quality," Member shall
have the option to terminate its purchase obligation under this
Agreement upon sixty (60) days' written notice delivered to SAC
within three (3) months after the close of the Comparison Period.
-2-
<PAGE>
As used herein, the term "Average Product Price" shall mean the
average price charged by two other manufacturers of Coca-Cola
products selling in the eastern United States capable of
producing quantities desired by Member during the Comparison
Period, and the term "Customary Product Quality" shall mean the
standard quality of Coca-Cola products customarily sold by other
manufacturers of such products in the eastern United States
during the Comparison Period. For purposes of determining SAC's
average price for 3 Liter Bottled Product, the patronage dividend
to be received by the members for such period shall be taken into
consideration in determining the price charged members. If the
exact amount of the patronage dividend has not been determined
for the Comparison Period, reasonable estimates may be used for
this purpose.
Section 4. Purchase Estimates and Orders. Member agrees to
provide SAC with estimates of its purchases of 3 Liter Bottled
Product at such times and places as shall be required by the SAC
Board. Member shall place all orders with SAC at least fifteen
(15) calendar days prior to the requested delivery date.
Section 5. Delivery. SAC shall ship 3 Liter Bottled
Product to Member within a reasonable time after receipt of an
order from Member that is within ten percent (10%) of the
estimated amount previously submitted to SAC by Member for such
period. Delivery shall be upon such terms as the SAC Board may
determine from time to time. Member agrees to accept delivery in
such manner as provided by SAC in accordance with the policy
established by the SAC Board.
Section 6. Certain Events of Default/Damages.
A. If Member (a) fails to purchase any 3 Liter Bottled
Product for a period of sixty (60) calendar days, (b) fails to
meet its purchase requirements pursuant to Section 1 of this
Agreement or the Bylaws for a period of sixty (60) calendar days,
(c) loses its Coca-Cola franchise or otherwise ceases to be
engaged in the business of a franchised Coca-Cola bottler on
account of dissolution, merger, reorganization, or any other
reason and in any of such events has not given SAC twelve (12)
months' written notice of the termination of this Agreement as
provided in Section 3 of this Agreement, or (d) Member otherwise
terminates this Agreement without giving twelve (12) months'
notice of termination as provided in Section 3 of this Agreement,
such action shall constitute an Event of Default and Member shall
pay SAC as liquidated damages for failure to give the required
notice of termination an amount equal to the sum of its 3 Liter
Bottled Product purchases during the immediately preceding twelve
(12) month period minus operating costs to SAC reasonably
associated with such production, and the amount of the Member's
proportionate interest in capital improvements purchased, or
capital improvements which SAC is under contract to purchase, for
3 Liter Bottled Product for the twelve (12) month notice period.
-3-
<PAGE>
For this purpose, a Member's proportionate interest shall be
measured by its 3 Liter Bottled Product patronage volume over the
preceding twelve (12) month period in comparison with the total
3 Liter Bottled Product patronage volume for SAC during such
period. These amounts shall be paid within twenty (20) days of
Member's receipt of notice of the amount due from SAC.
B. Liquidated damages specified in Subparagraph A of
this Section apply only to those damages arising from the failure
to give the requisite notice of termination. Member shall be
responsible for any and all other liability, loss, or damage
arising from any other breach of the Agreement by Member.
C. Damages arising under Subsection A of this Section
6 by virtue of a merger, sale of assets, or other reorganization
in which the former Member's business as a franchised Coca-Cola
bottler is continued by another individual or entity ("Successor
Bottler") shall be abated if (l) the Successor Bottler applies
for and is approved as a member of SAC within thirty (30) days of
such reorganization or (2) the Successor Bottler agrees to honor
and abide by the twelve (12) months' written notice requirement
for termination between SAC and the former member. Member
represents that it will use its best efforts to cause the
Successor Bottler to apply for and be selected as a member of
SAC.
D. In addition to any other rights and remedies
arising under this Agreement, SAC shall be entitled, without
notice to Member, to set off and apply all amounts otherwise
payable under the Bylaws to Member upon withdrawal from SAC
against any and all obligations and liabilities of Member arising
under this Section 6.
Section 7. Transshipping.
A. Members shall not engage in transshipping of
Coca-Cola products in violation of requirements established by
The Coca-Cola Company ("Transshipping").
B. In the event that Member is determined to have
engaged in Transshipping, Member shall indemnify and hold
harmless SAC from any and all claims, losses and liabilities
incurred by SAC growing out of or resulting from such incident or
incidents of Transshipping. The rights of SAC under this Section
7 shall be in addition to other rights and remedies provided for
herein or otherwise available to SAC.
Section 8. Loss of Membership Qualification. In the event
Member ceases to be qualified for membership under Section 2 of
Article II of the Bylaws and fails to surrender its shares of
stock to SAC within thirty (30) days of receiving notice of its
loss of qualification, Member hereby assigns all right, title,
-4-
<PAGE>
and interest in such shares to SAC, including the right to cancel
such shares.
Section 9. Miscellaneous.
A. Representation of Member. Member represents that
it has received a copy of SAC's Articles of Incorporation and
Bylaws and agrees to abide by and be bound by them as well as by
any amendments thereto. In the event of a conflict between the
Articles of Incorporation or Bylaws and the terms of this
Agreement, the provisions of the Articles of Incorporation or
Bylaws shall govern.
B. Force Majeure.
1. If performance of this Agreement is prevented
or restricted by an event of Force Majeure, the party so affected
upon giving prompt notice to the other party shall be temporarily
excused from the performance so prevented or restricted. As used
herein, the term "Force Majeure" shall mean any causes or
contingencies beyond the reasonable control of the party affected
thereby, including but not limited to acts of God, fire,
explosion, breakdown or failure of plant machinery, strike,
walk-out, labor dispute, casualty or accident, lack of or failure
in whole or in part of transportation facilities, lack of or
failure in whole or in part of sources of supply of labor, raw
materials, acts of local, state, or federal governmental bodies
or agencies, or other such occurrences whether or not of like or
similar nature.
2. If an event of Force Majeure persists for
longer than (a) a period necessary to promptly and diligently
pursue efforts to overcome the event of Force Majeure or (b) a
period of four (4) months, whichever period is shorter, then the
party which is not affected by the Force Majeure may, upon ten
(10) days prior notice to the affected party, terminate this
Agreement without any liability of either party to the other.
C. Governing Law. This Agreement shall be interpreted
and construed in accordance with the laws of the State of South
Carolina, without regard to the conflict of laws provisions
thereof.
D. Severability. Should any part of this Agreement be
determined to be invalid or unenforceable, it shall not affect
the validity or enforceability of the remaining parts of this
Agreement. If any portion of this Agreement is unenforceable
because it is excessive or unreasonable, the parties intend that
such provision shall be binding and enforceable to the extent
that it is not excessive or unreasonable. In the event that an
arbitrator or court of competent jurisdiction determines that any
of the provisions of this Agreement specifically set forth herein
are incapable of being enforced, said arbitrator or court is
-5-
<PAGE>
authorized and requested to modify and enforce such provisions to
the maximum extent permitted by law so as to most nearly
implement the terms of this Agreement.
E. Notices. Any notices, requests, demands and other
communications to be given by any party hereunder shall be in
writing and shall be given by personal delivery, by overnight
delivery service or by registered or certified mail, postage
prepaid return receipt requested; and such notice shall be deemed
to be given at the time when the same shall be thus delivered or
mailed.
(i) Notices to be given to SAC shall be given to:
601 Cousar Street
P. O. Box 548
Bishopville, S.C. 29010
ATTN: President
Telecopy Number: (803) 484-5841
With a copy to:
Coca-Cola Bottling Co. Consolidated
1900 Rexford Road
Charlotte, NC 28211
Attention: Chief Financial Officer
Telecopy Number: (704) 551-4451
(ii) Notices to Member shall be given to:
ATTN:
Either party may change its address for receiving notice by
written notice given to the other party.
F. Entire Agreement. This Agreement constitutes the
entire agreement of the parties and supersedes all prior written
or oral understandings.
G. No Waiver. Failure on the part of SAC to enforce
any of the provisions of this Agreement shall not constitute a
waiver of such breach or any succeeding breach, and shall not
affect the continuing obligation of the other party which shall
remain bound by the terms of this Agreement in all respects.
-6-
<PAGE>
H. Prior Canning Agreements Superseded to the Extent
Inconsistent with this Agreement. This Agreement supersedes any
outstanding Canning Agency Agreement or Contract Canners
Agreement between the parties which establish terms by which SAC
shall produce cans or other products for Member, to the extent
such agreements are inconsistent with this Agreement.
IN WITNESS WHEREOF, each of the parties has caused this
Agreement to be duly executed all as of the date first written
above.
SOUTH ATLANTIC CANNERS, INC. /s/ David V. Singer
By: By: David V. Singer
Title: Title: VP & CFO
-7-
<PAGE>
ATTACHMENT " A "
Please list the locations, city and county, of the
facilities covered by this Agreement.
MEMBER:
By:
Title:
<PAGE>
<PAGE>
MEMBER PURCHASE AGREEMENT
This MEMBER PURCHASE AGREEMENT is entered into as of this
1st day of August, 1994, by and between SOUTH ATLANTIC
CANNERS, INC., a South Carolina corporation, hereinafter referred
to as "SAC," and CCBCC, a Delaware corporation, hereinafter referred
to as "Member."
WHEREAS, SAC processes Coca-Cola and other soft drink
beverage products ("Beverage Products") and distributes and sells
them to its members on a cooperative basis; and
WHEREAS, Member is a franchised Coca-Cola bottler which has
satisfied SAC's qualifications for membership and intends to
purchase Beverage Products from SAC in accordance with this
Agreement,
NOW, THEREFORE, in consideration for the mutual undertakings
described herein and other good and valuable consideration, the
parties hereby agree as follows:
Section 1. Purchase Requirement.
A. Member agrees to a minimum purchase requirement of
the lesser of:
(1) eighty percent (80%) of Member's monthly
Coca-Cola PET three liter bottle product ("3 Liter Bottled
Product") requirements, or
(2) 840,000 (eight hundred and forty thousand) cases of
3 Liter Bottled Product on an annual basis and not less than five
percent (5%) of this amount on a monthly basis.
SAC agrees to sell and deliver such products in accordance with
this Agreement. As used herein, the terms "Coca-Cola product"
and "Coca-Cola products" mean any soft drink product made or
offered by The Coca-Cola Company.
B. The purchase and sale requirement in Section 1A(1)
of this Agreement applies to all 3 Liter Bottled Product used
during the term of this Agreement by Member in Member's business
or businesses at the facilities listed in Attachment A. SAC
agrees to use its best efforts to sell Member additional 3 Liter
Bottled Product up to Member's total requirements.
C. In the event SAC is unable for any reason to supply
Member with 3 Liter Bottled Product for which it is obligated
under this Agreement, SAC shall release Member from Member's
commitment to buy such products from SAC, and Member shall
likewise release SAC from its commitment to sell such products,
<PAGE>
only with respect to that portion of the 3 Liter Bottled Product
that SAC is unable to fill from SAC's production and only with
respect to the time interval during which SAC is unable to fill
Member's orders from SAC's production. In the event it should be
necessary to allocate SAC's production among parties entering
into agreements similar to this one, such shortage allocation
shall be made among those parties on the basis of their relative
patronage for the prior six (6) month period or on such other
basis as may be determined by SAC's Board of Directors ("SAC
Board"), whose decisions shall be binding.
Section 2. Price.
SAC will sell 3 Liter Bottled Product at such prices as may
be set from time to time by the SAC Board and shall make
patronage refunds in accordance with SAC's Bylaws ("Bylaws").
Member shall pay SAC in full within the payment time period
specified by the SAC Board. Such time period shall be specified
on the invoice along with any charges for late payment. If
payments are not made on a timely basis, SAC may elect to make
future shipments on a C.O.D. basis.
Section 3. Term.
A. Except as provided in Subparagraph B of this
Section, this Agreement shall be binding upon the parties until
such time as either party gives the other party twelve (12)
months' written notice of termination; provided, however, that
(l) either party shall have the right to terminate this Agreement
upon thirty (30) calendar days' written notice in the event the
other party files a voluntary petition in bankruptcy, is
adjudicated a bankrupt, is adjudged insolvent, makes a general
assignment of assets for the benefit of creditors, or has a
receiver appointed due to insolvency; and (2) SAC may terminate
this Agreement if Member (a) fails to meet the requirements for
membership in accordance with Section 2 of Article II of the
Bylaws, (b) fails to cure a material breach of this Agreement
within forty-five (45) days of receiving notice thereof, or (c)
has been found by SAC to have engaged in more than one violation
of Section 7 of this Agreement relating to Transshipping.
B. This Agreement may be terminated in accordance with
Subparagraph 2 of Section 9-B in the event the Force Majeure
provisions of that Subparagraph are met.
C. If SAC fails to maintain, for any continuous
period of six (6) months ("Comparison Period"), an average price
for 3 Liter Bottled Product at or below the "Average Product
Price" or a quality of 3 Liter Bottled Product at a level equal
to or better than the "Customary Product Quality," Member shall
have the option to terminate its purchase obligation under this
Agreement upon sixty (60) days' written notice delivered to SAC
within three (3) months after the close of the Comparison Period.
-2-
<PAGE>
As used herein, the term "Average Product Price" shall mean the
average price charged by two other manufacturers of Coca-Cola
products selling in the eastern United States capable of
producing quantities desired by Member during the Comparison
Period, and the term "Customary Product Quality" shall mean the
standard quality of Coca-Cola products customarily sold by other
manufacturers of such products in the eastern United States
during the Comparison Period. For purposes of determining SAC's
average price for 3 Liter Bottled Product, the patronage dividend
to be received by the members for such period shall be taken into
consideration in determining the price charged members. If the
exact amount of the patronage dividend has not been determined
for the Comparison Period, reasonable estimates may be used for
this purpose.
Section 4. Purchase Estimates and Orders. Member agrees to
provide SAC with estimates of its purchases of 3 Liter Bottled
Product at such times and places as shall be required by the SAC
Board. Member shall place all orders with SAC at least fifteen
(15) calendar days prior to the requested delivery date.
Section 5. Delivery. SAC shall ship 3 Liter Bottled
Product to Member within a reasonable time after receipt of an
order from Member that is within ten percent (10%) of the
estimated amount previously submitted to SAC by Member for such
period. Delivery shall be upon such terms as the SAC Board may
determine from time to time. Member agrees to accept delivery in
such manner as provided by SAC in accordance with the policy
established by the SAC Board.
Section 6. Certain Events of Default/Damages.
A. If Member (a) fails to purchase any 3 Liter Bottled
Product for a period of sixty (60) calendar days, (b) fails to
meet its purchase requirements pursuant to Section 1 of this
Agreement or the Bylaws for a period of sixty (60) calendar days,
(c) loses its Coca-Cola franchise or otherwise ceases to be engaged
in the business of a franchised Coca-Cola bottler on account of
dissolution, merger, reorganization, or any other reason
and in any of such events has not given SAC twelve (12)
months' written notice of the termination of this Agreement as
provided in Section 3 of this Agreement, or (d) Member otherwise
terminates this Agreement without giving twelve (12) months'
notice of termination as provided in Section 3 of this Agreement,
such action shall constitute an Event of Default and Member shall
pay SAC as liquidated damages for failure to give the required
notice of termination an amount equal to the sum of its 3 Liter
Bottled Product purchases during the immediately preceding twelve
(12) month period minus operating costs to SAC reasonably
associated with such production, and the amount of the Member's
proportionate interest in capital improvements purchased, or
capital improvements which SAC is under contract to purchase, for
3 Liter Bottled Product for the twelve (12) month notice period.
-3-
<PAGE>
For this purpose, a Member's proportionate interest shall be
measured by its 3 Liter Bottled Product patronage volume over the
preceding twelve (12) month period in comparison with the total
3 Liter Bottled Product patronage volume for SAC during such
period. These amounts shall be paid within twenty (20) days of
Member's receipt of notice of the amount due from SAC.
B. Liquidated damages specified in Subparagraph A of
this Section apply only to those damages arising from the failure
to give the requisite notice of termination. Member shall be
responsible for any and all other liability, loss, or damage
arising from any other breach of the Agreement by Member.
C. Damages arising under Subsection A of this Section
6 by virtue of a merger, sale of assets, or other reorganization
in which the former Member's business as a franchised Coca-Cola
bottler is continued by another individual or entity ("Successor
Bottler") shall be abated if (l) the Successor Bottler applies
for and is approved as a member of SAC within thirty (30) days of
such reorganization or (2) the Successor Bottler agrees to honor
and abide by the twelve (12) months' written notice requirement
for termination between SAC and the former member. Member
represents that it will use its best efforts to cause the
Successor Bottler to apply for and be selected as a member of
SAC.
D. In addition to any other rights and remedies
arising under this Agreement, SAC shall be entitled, without
notice to Member, to set off and apply all amounts otherwise
payable under the Bylaws to Member upon withdrawal from SAC
against any and all obligations and liabilities of Member arising
under this Section 6.
Section 7. Transshipping.
A. Members shall not engage in transshipping of
Coca-Cola products in violation of requirements established by
The Coca-Cola Company ("Transshipping").
B. In the event that Member is determined to have
engaged in Transshipping, Member shall indemnify and hold
harmless SAC from any and all claims, losses and liabilities
incurred by SAC growing out of or resulting from such incident or
incidents of Transshipping. The rights of SAC under this Section
7 shall be in addition to other rights and remedies provided for
herein or otherwise available to SAC.
Section 8. Loss of Membership Qualification. In the event
Member ceases to be qualified for membership under Section 2 of
Article II of the Bylaws and fails to surrender its shares of
stock to SAC within thirty (30) days of receiving notice of its
loss of qualification, Member hereby assigns all right, title,
-4-
<PAGE>
and interest in such shares to SAC, including the right to cancel
such shares.
Section 9. Miscellaneous.
A. Representation of Member. Member represents that
it has received a copy of SAC's Articles of Incorporation and
Bylaws and agrees to abide by and be bound by them as well as by
any amendments thereto. In the event of a conflict between the
Articles of Incorporation or Bylaws and the terms of this
Agreement, the provisions of the Articles of Incorporation or
Bylaws shall govern.
B. Force Majeure.
1. If performance of this Agreement is prevented
or restricted by an event of Force Majeure, the party so affected
upon giving prompt notice to the other party shall be temporarily
excused from the performance so prevented or restricted. As used
herein, the term "Force Majeure" shall mean any causes or
contingencies beyond the reasonable control of the party affected
thereby, including but not limited to acts of God, fire,
explosion, breakdown or failure of plant machinery, strike,
walk-out, labor dispute, casualty or accident, lack of or failure
in whole or in part of transportation facilities, lack of or
failure in whole or in part of sources of supply of labor, raw
materials, acts of local, state, or federal governmental bodies
or agencies, or other such occurrences whether or not of like or
similar nature.
2. If an event of Force Majeure persists for
longer than (a) a period necessary to promptly and diligently
pursue efforts to overcome the event of Force Majeure or (b) a
period of four (4) months, whichever period is shorter, then the
party which is not affected by the Force Majeure may, upon ten
(10) days prior notice to the affected party, terminate this
Agreement without any liability of either party to the other.
C. Governing Law. This Agreement shall be interpreted
and construed in accordance with the laws of the State of South
Carolina, without regard to the conflict of laws provisions
thereof.
D. Severability. Should any part of this Agreement be
determined to be invalid or unenforceable, it shall not affect
the validity or enforceability of the remaining parts of this
Agreement. If any portion of this Agreement is unenforceable
because it is excessive or unreasonable, the parties intend that
such provision shall be binding and enforceable to the extent
that it is not excessive or unreasonable. In the event that an
arbitrator or court of competent jurisdiction determines that any
of the provisions of this Agreement specifically set forth herein
are incapable of being enforced, said arbitrator or court is
-5-
<PAGE>
authorized and requested to modify and enforce such provisions to
the maximum extent permitted by law so as to most nearly
implement the terms of this Agreement.
E. Notices. Any notices, requests, demands and other
communications to be given by any party hereunder shall be in
writing and shall be given by personal delivery, by overnight
delivery service or by registered or certified mail, postage
prepaid return receipt requested; and such notice shall be deemed
to be given at the time when the same shall be thus delivered or
mailed.
(i) Notices to be given to SAC shall be given to:
601 Cousar Street
P. 0. Box 548
Bishopville, S.C. 29010
ATTN: President
Telecopy Number: (803) 484-5841
With a copy to:
Coca-Cola Bottling Co. Consolidated
1900 Rexford Road
Charlotte, NC 28211
Attention: Chief Financial Officer
Telecopy Number: (704) 551-4451
(ii) Notices to Member shall be given to:
ATTN:
Either party may change its address for receiving notice by
written notice given to the other party.
F. Entire Agreement. This Agreement constitutes the
entire agreement of the parties and supersedes all prior written
or oral understandings.
G. No Waiver. Failure on the part of SAC to enforce
any of the provisions of this Agreement shall not constitute a
waiver of such breach or any succeeding breach, and shall not
affect the continuing obligation of the other party which shall
remain bound by the terms of this Agreement in all respects.
-6-
<PAGE>
H. Prior Canning Agreements Superseded to the Extent
Inconsistent with this Agreement. This Agreement supersedes any
outstanding Canning Agency Agreement or Contract Canners
Agreement between the parties which establish terms by which SAC
shall produce cans or other products for Member, to the extent
such agreements are inconsistent with this Agreement.
IN WITNESS WHEREOF, each of the parties has caused this
Agreement to be duly executed all as of the day first written
above.
SOUTH ATLANTIC CANNERS, INC. /s/ David V. Singer
By: By: David V. Singer
Title: Title: VP & CFO
-7-
<PAGE>
ATTACHMENT "A"
Please list the locations, city and county, of the
facilities covered by this Agreement.
MEMBER:
By:
Title:
<PAGE>
COCA-COLA BOTTLING CO. CONSOLIDATED
1996 ANNUAL BONUS PLAN
PURPOSE
The purpose of the bonus plan is to provide additional incentive to officers and
employees of the Company in key positions.
PLAN ADMINISTRATION
The plan will be administered by the Compensation Committee as elected by the
Board of Directors. The Committee is authorized to establish new guidelines for
administration of the plan, delegate certain tasks to management, make
determinations and interpretations under the plan, and to make awards pursuant
to the plan. All determinations and interpretations of the Committee will be
binding upon the Company and each participant.
PLAN GUIDELINES
ELIGIBILITY: The Compensation Committee is authorized to grant cash awards to
any officer, including officers who are directors and to other employees of the
Company and its affiliates in key positions.
PARTICIPATION: Management will recommend annually key positions which should
qualify for awards under the plan. The Compensation Committee has full and final
authority in its discretion to select the key positions eligible for awards.
Management will inform individuals in selected key positions of their
participation in the plan.
-1-
<PAGE>
QUALIFICATION AND AMOUNT OF AWARD:
1. Participants will qualify for awards under the plan based
(a) Corporate goals set for the fiscal year.
(b) Division/Manufacturing Center goals or individual goals
set for the fiscal year.
(c) The Compensation Committee may, in its sole discretion,
amend or eliminate any individual award.
2. The gross amount of the award will be specified as a percentage of base
salary of the participant and will be determined on the following
basis:
Goal Achievement* Amount of Award
(in percent) (as a % of max.)
89.0 or less 0
89.1 - 94 80
94.1 - 97 90
97.1 - 100 100
100.1 - 105 110
105.1 - 110 120
3. The total cash award to the participant will be computed as follows:
Gross Cash Award = Base Salary X approved bonus % X the indexed
performance factor X overall goal achievement factor.
4. The Compensation Committee will review and approve all awards. The
Committee has full and final authority in its discretion to determine
the actual gross amount to be paid to participants. The gross amount
will be subject to all local, state and federal minimum tax withholding
requirements.
-2-
<PAGE>
5. Participant must be an employee of the Company on the date of payment
to qualify for an award. Any participant who leaves the employ of the
Company, voluntarily or involuntarily, prior to the payment date, is
ineligible for any bonus. An employee who assumes a key position during
the fiscal year may be eligible for a pro-rated award at the option of
the Compensation Committee, provided the participant has been employed
a minimum of three (3) months during the calendar year.
6. Awards under the bonus program will not be made if any material aspects
of the bottle contracts with The Coca-Cola Company are violated.
PAYMENT DATE: Awards shall be paid upon notification from the Company's
independent auditors of the final results of operations for the fiscal year. The
Compensation Committee is authorized to establish an earlier payment date based
on unaudited preliminary results.
SPECIAL AWARD PROVISION: Management may wish to recognize outstanding
performances by individuals who may or may not be in eligible positions to
receive an award. Management may recommend awards for such individuals, and the
Compensation Committee is authorized to make such awards.
AMENDMENTS, MODIFICATIONS AND TERMINATION
The Compensation Committee is authorized to amend, modify or terminate the plan
retroactively at any time, in part or in whole.
-3-
<PAGE>
APPROVED PERFORMANCE CRITERIA FOR
COMPENSATION COMMITTEE TO CONSIDER
IN AWARDING 1996 BONUS PAYMENTS
CORPORATE GOALS
WEIGHTAGE
PERFORMANCE INDICATOR FACTOR GOAL**
1. Cash Flow:
Operating Cash Flow (A) 30% Approved Budget
Free Cash Flow (B) 30% Approved Budget
2. Net Income 10% Approved Budget
3. Unit Volume 10% Approved Budget
4. Nielsen Market Share 10% Positive Share Swing
5. Value Measure 10% Approved Budget
(9 X OCF - Debt)
NOTES:
1. A. Operating cash flow is defined as income from operations
before depreciation and amortization of goodwill and
intangibles.
B. Free cash flow is defined as the net cash available for debt
paydown after considering non-cash charges, capital
expenditures, taxes and adjustments for changes in assets and
liabilities, but before payment of cash dividends.
Specifically excluded would be acquisitions and capital
expenditures made because of acquisitions. Specifically
excluded from operating cash flow are gains/losses from:
- Sales of franchise territories.
- Sales of real estate
- Sales of other assets
- Other items as defined by the Compensation Committee.
NOTE:
**It should be noted that none of the goals reflect the
possibility of a Joint Venture or acquisitions. Should these
events occur the goals would need to be recalculated.
-4-
<PAGE>
2. Net Income is defined as the after-tax reported earnings of the
Company.
3. Unit Volume is defined as bottle, can and pre-mix cases, converted to
8 oz. cases.
4. The following items will be considered for exclusions by the Committee:
- Unusual or extraordinary events of more than $50,000
- Impact of non-budgeted acquisitions made after
January 1, 1996.
- Adjustments required to implement unbudgeted changes in
accounting principles (i.e., FASB rulings regarding health
care benefits for retirees, deferred taxes, etc.).
- Unbudgeted changes in depreciation and amortization schedules.
- Premiums paid or received due to the retirement or refinancing of
debt or hedging vehicles.
5. Bonus program will not be in force if any material aspects of the
Bottle Contracts with TCCC are violated.
6. For purposes of determining 1996 incentive compensation, accounting
practices and principles used to calculate "actual" results will be
consistent with those used in calculating the budget.
-5-
<PAGE>
<PAGE>
LIST OF SUBSIDIARIES
<TABLE>
<CAPTION>
STATE/DATE PERCENT
INVESTMENT IN INCORPORATION OWNED BY OWNERSHIP
<S> <C> <C> <C>
Columbus Coca-Cola Bottling Company Delaware Consolidated 100%
7/10/84
Coca-Cola Bottling Co. of Nashville, Inc. Delaware Consolidated 100%
2/5/85
Coca-Cola Bottling Co. of Roanoke, Inc. Delaware Consolidated 100%
2/5/85
Coca-Cola Bottling Co. of Mobile, Inc. Alabama Consolidated 100%
. 7/29/85
Panama City Coca-Cola Bottling Company Florida Columbus 100%
10/5/31 CCBC, Inc.
Case Advertising, Inc. Delaware Consolidated 100%
2/18/88
C C Beverage Packing, Inc. Delaware Consolidated 100%
3/15/88
Tennessee Soft Drink Production Company Tennessee CCBC of 100%
12/22/88 Nashville, Inc.
The Coca-Cola Bottling Company of West West Virginia Consolidated 100%
Virginia, Inc. 12/28/92
Jackson Acquisitions, Inc. Delaware Consolidated 100%
1/24/90
CCBCC, Inc. Delaware Consolidated 100%
12/20/93
Coca-Cola Bottling Co. Affiliated, Inc. Delaware Consolidated 100%
4/18/35
Metrolina Bottling Company Delaware Consolidated 100%
5/21/93
<PAGE>
LIST OF SUBSIDIARIES (cont.)
STATE/DATE PERCENT
INVESTMENT IN INCORPORATION OWNED BY OWNERSHIP
COBC, Inc. Delaware Columbus Coca- 100%
11/23/93 Cola Bottling
Company
ECBC, Inc. Delaware Coca-Cola Bottling 100%
11/23/93 Co. Affiliated, Inc.
MOBC, Inc. Delaware Coca-Cola Bottling 100%
11/23/93 Co. of Mobile, Inc.
NABC, Inc. Delaware Coca-Cola Bottling 100%
11/23/93 Co. of Nashville,
Inc.
PCBC, Inc. Delaware Panama City Coca- 100%
11/23/93 Cola Bottling
Company
ROBC, Inc. Delaware Coca-Cola Bottling 100%
11/23/93 Co. of Roanoke, Inc.
WCBC, Inc. Delaware Coca-Cola Bottling 100%
11/23/93 Co. Affiliated, Inc.
WVBC, Inc. Delaware The Coca-Cola 100%
11/23/93 Bottling Company
of West Virginia, Inc.
Coca-Cola Ventures, Inc. Delaware Coca-Cola Bottling 100%
6/17/93 Co. Affiliated, Inc.
Whirl-i-Bird, Inc. Tennessee Consolidated 100%
11/3/86
Coca-Cola Bottling Company of North Carolina Consolidated 100%
North Carolina, LLC 12/18/95
Category Management Consulting, LLC North Carolina Consolidated 100%
6/29/95
Chesapeake Treatment Company, LLC North Carolina Consolidated 100%
6/5/95
</TABLE>
<PAGE>
EXHIBIT 23.1
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectus
constituting part of the Registration Statement on Form S-3 (No. 33-4325) and
Registration Statement on Form S-3 (No. 33-54657) of Coca-Cola Bottling Co.
Consolidated of our report dated February 23, 1996 appearing in this Form 10-K.
(Signature of Price Waterhouse LLP)
PRICE WATERHOUSE LLP
Charlotte, North Carolina
March 21, 1996
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements as of and for the year ended December 31, 1995 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1000
<S> <C> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-02-1995
<PERIOD-END> DEC-31-1995
<CASH> 2,434
<SECURITIES> 0
<RECEIVABLES> 12,504
<ALLOWANCES> 406
<INVENTORY> 27,989
<CURRENT-ASSETS> 70,257
<PP&E> 345,402
<DEPRECIATION> 153,602
<TOTAL-ASSETS> 676,571
<CURRENT-LIABILITIES> 80,574
<BONDS> 419,896
<COMMON> 12,055
0
0
<OTHER-SE> 44,563
<TOTAL-LIABILITY-AND-EQUITY> 676,571
<SALES> 761,876
<TOTAL-REVENUES> 761,876
<CGS> 447,636
<TOTAL-COSTS> 447,636
<OTHER-EXPENSES> 252,527
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 33,091
<INCOME-PRETAX> 25,221
<INCOME-TAX> 9,685
<INCOME-CONTINUING> 15,536
<DISCONTINUED> 0
<EXTRAORDINARY> 5,016
<CHANGES> 0
<NET-INCOME> 10,520
<EPS-PRIMARY> 1.13
<EPS-DILUTED> 0
</TABLE>
