As filed with the Securities and Exchange Commission on ----------, 1995
Registration No. ---------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC.
(Exact Name of Registrant as Specified in its Charter)
ALABAMA
(State or Other Jurisdiction of Incorporation or Organization)
5410 63-0393676
(Primary Standard Industrial (IRS Employer
Classification Code Number) Identification Number)
2400 J. Terrell Wooten Drive Post Office Box 2400
Bessemer, Alabama 35020 Bessemer, Alabama 35021
(205) 481-2300 (205) 481-2300
(Location Address, Including (Mailing Address, Including
Zip Code, and Telephone Zip Code, and Telephone
Number, Including Area Code, Number, Including Area Code,
of Registrant's Principal of Registrant's Principal
Executive Offices) Executive Offices)
D. T. STEWART
President and Chief Executive Officer
Post Office Box 2400
Bessemer, Alabama 35021
(205) 481-2300
(Name, Address, Including Zip Code, and Telephone
Number, Including Area Code, of Agent for Service)
Copies of Communications to:
John P. McKleroy, Jr., Esq.
SPAIN & GILLON
2117 Second Avenue North
Birmingham, Alabama 35203
If any of the securities being registered on this Form are to
be offered on a delayed or continuous basis pursuant to Rule 415
under the Securities Act of 1933 check the following box. (Checked)
CALCULATION OF REGISTRATION FEE
Title Of Each Proposed Proposed
Class of Amount Maximum Maximum Amount of
Securities to to be Offering Price Aggregate Registration
be Registered Registered Per Unit Offering Price Fee
Common Stock 25,000* $221.94 $5,548,500 $1,913.29
Par Value $.01
Per Share
* Pursuant to Rule 429, this Registration Statement also relates to
the Registration Statement on file under File No. 33-19645.
PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC.
<TABLE>
CROSS REFERENCE SHEET
<CAPTION>
Form S-1 Item
Number and Captions Location in Prospectus
<S> <C>
1. Forepart of the Registration Statement and Outside
Front Cover Page of Prospectus Cover Page
2. Inside Front and Outside Back Cover
Pages of Prospectus Inside Front; Cover Page
3. Summary Information Prospectus Summary
Risk Factors Not Applicable
Ratio of Earnings Not Applicable
4. Use of Proceeds Use of Proceeds
5. Determination of Offering Price Cover Page;
Price of Common Stock
6. Dilution Not Applicable
7. Selling Security Holders Not Applicable
8. Plan of Distribution Distribution of the Company's
Stock
9. Description of Securities to be Registered Cover Page;
Description of Common Stock
10. Interests of Named Experts and Counsel Interests of
Named Experts
and Counsel
11. Information with Respect to the Registrant
(a) Description of Business Cover Page;
Prospectus Summary;
The Company; Business;
Management's Discussion and
Analysis of Financial Condition
and Results of Operations
(b) Description of Property Properties
(c) Legal Proceedings Legal Proceedings
(d) Market Price and Dividends Cover Page;
Prospectus Summary;
Business; Description of Common
Stock
(e) Financial Statements Financial Statements
(f) Selected Financial Information Prospectus
Summary; Selected
Financial Data
(g) Supplementary Financial Information Not Applicable
(h) Management's Discussion and Analysis
of Financial Condition and Results
of Operations Management's Discussion
and Analysis of
Financial Condition
and Results of Operations
(i) Changes in and Disagreements with
Accountants on Accounting and
Financial Disclosure Not Applicable
(j) Directors, Executive Officers, Promoters
and Control Persons Executive Officers
and Directors
(k) Executive Compensation Executive Compensation
(l) Security Ownership of Certain Beneficial
Owners and Management Executive Officers
and Directors;
Security Ownership of
Certain Beneficial
Owners and Management
(m) Certain Relationships and Related
Transactions Not Applicable
12. Disclosure of Commission Position on Indemnification
for Securities Act Liabilities Indemnification for
Securities
Act Liabilities
</TABLE>
25,000 Shares
PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC.
Common Stock
Piggly Wiggly Alabama Distributing Co., Inc. (the "Company")
is an Alabama corporation engaged in the operation of wholesale
grocery warehouse and distribution facilities as a cooperative for
the benefit of its member-stockholders. See "The Company."
The Company's Articles of Incorporation provide that only
operators of retail grocery stores approved by the Board of
Directors are eligible to own and hold the Company's Common Stock.
Holders of shares of Common Stock are entitled to one vote per
share on all matters to be voted on by stockholders and are not
entitled to cumulate their votes in the election of Directors. The
holders of Common Stock have no pre-emptive rights. See
"Description of Common Stock."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Underwriting
Price Discounts and Proceeds
Public(1) Commissions(2) to Issuer(3)
Per Share $ 221.94(4) -- $ 221.94
Total $ 5,548,500(4) -- $ 5,548,500
(1) Purchasers are limited to retail grocery store operators
approved by the Board of Directors.
(2) No underwriter is involved in this offering.
(3) Before deducting other expenses of issuance and
distribution estimated not to exceed $18,237.85.
(4) Shares are sold at the "Adjusted Book Value" per share
determined on an annual basis. See "Price of Common Stock." As of
the date of this prospectus, the Adjusted Book Value is $221.94.
The date of this Prospectus is ----------, 1995
Stockholders of Piggly Wiggly Alabama Distributing Co., Inc.
will be furnished with a copy of the Company's annual financial
statements within 120 days of the conclusion of each fiscal year.
The annual financial statements of the Company are prepared by an
independent certified public accountant.
TABLE OF CONTENTS
Page
Summary 3
Use of Proceeds 5
The Company 5
Business 5
Properties 8
Selected Financial Data 9
Description of Common Stock 11
Legal Proceedings 13
Management's Discussion and Analysis of
Financial Condition and Results of Operations 14
Management-Executive Officers and Directors 16
Management Remuneration 19
Security Ownership of Certain Beneficial Owners
and Management 21
Legal Matters 22
Experts 22
Indemnification for Securities Acts Liabilities 22
Financial Statements F-1
The Company is subject to the informational requirements of
the Exchange Act and in accordance therewith files reports and
other information with the Securities and Exchange Commission.
Reports and other information filed by the Company can be inspected
and copies at the public reference facilities maintained by the
Commission at 450 Fifth Street, N. W., Room 1024, Washington, D.C.
20549.
No person is authorized to give any information or to make any
representations other than as contained in this Prospectus in
connection with the offering made hereby. Any information, date or
representation not contained in this Prospectus must not be relied
upon as having been authorized by the Company. This Prospectus does
not constitute an offer to sell, or a solicitation of an offer to
buy, any of the securities covered by this Prospectus in any
jurisdiction in which or to any person to whom it is unlawful to
make such offer or solicitation. The delivery of this Prospectus at
any time does not imply that information herein is correct as of
any time subsequent to its date.
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more
detailed information and financial statements appearing elsewhere
in this Prospectus.
THE COMPANY
Piggly Wiggly Alabama Distributing Co., Inc. (the "Company")
is engaged in the operation of wholesale grocery warehouse and
distribution facilities located in Bessemer, Alabama as a
cooperative for the benefit of its member-stockholders. The mailing
address of the executive office is 2400 J. Terrell Wooten Drive,
P.O. Box 2400, Bessemer, Alabama, 35021 and the telephone number is
(205) 481-2300. From its warehouse and distribution facilities, the
Company distributes grocery products, including dry groceries,
meats, produce, frozen foods, dairy products, health and beauty
aids, tobacco products and other related items and services. The
Company's customers include non-franchised retail grocery stores,
however, most of its customers are retail grocery stores operated
under franchise issued by the Piggly Wiggly Corporation. The
Company's sales territory consists of parts of Alabama, Tennessee,
Georgia, Mississippi, Florida and North Carolina. As of January 15,
1995, the Company sold to and serviced 205 retail grocery stores.
THE OFFERING
Common Shares to be Sold by Company 25,000
Shares Outstanding after the Offering 110,242
Use of Proceeds by Company To purchase inventory and use
for general operating expenses.
See "Use of Proceeds."
Market There is no market for the
Common Stock. Only retail
grocery store operators approved
by the Company's Board of
Directors may purchase Common
Stock.
COMMON STOCK
Only operators of retail grocery stores who are approved by
the Board of Directors are eligible to subscribe and own Common
Stock in the Company. See "Restrictions of Ownership and
Transferability." Each stockholder must purchase and maintain an
amount of Common Stock equal in value to 125% of the operator's
average weekly retail sales. A determination of how much Common
Stock an operator is required to purchase and own is made initially
at the time an operator is approved as a member of the cooperative
by the Board of Directors and the Company begins servicing the
operator with grocery products and services. Once the initial
subscription is paid, subsequent reevaluations of stock purchase
requirements are performed generally on an annual basis and at such
time as the number of stores owned by the operator increases or
decreases. See "Amount of Common Stock Required To Be Purchased."
The price of the Common Stock is the Adjusted Book Value per share.
See "Price of Common Stock." An operator may pay for his Common
Stock over time by making an initial minimum payment of fifteen
percent (15%) of the subscription price, with the balance of the
subscription price paid in weekly installments by adding an amount
equal to one and one-quarter percent (1 1/4%) of the operator's
weekly purchases to the weekly invoice statements from the Company.
No interest or other expense is charged on the deferred payments as
long as they are timely paid. All items on the weekly invoice
statement from the Company bear interest at eighteen percent (18%)
per annum if not paid within seven (7) days.
Annual profits of the Company in excess of $400,000 from sales
to member-stockholders are accrued to the stockholders as patronage
dividends in the proportion that sales from the Company to each
member-stockholder bear to the total sales of the Company to all
member-stockholders. The amount of annual income retained by the
Company is determined by the Board of Directors and approved by the
stockholders.
<TABLE>
SELECTED FINANCIAL DATA
Summary Income Statement Data:
<CAPTION>
(Dollar Amounts in thousands, except for per share data)
Fiscal Periods Ending
July 29, July 30, July 31, July 26, July 27,
1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Total Sales $372,223 $353,027 $351,212 $342,402 $333,106
Patronage dividends $ 3,818 $ 2,046 $ 2,839 $ 2,023 $ 2,505
Net Income $ 255 $ 274 $ 276 $ 264 $ 289
Earnings per common
share and common
share equivalent
Primary $ 3.58 $ 4.10 $ 4.21 $ 4.06 $ 4.04
Fully diluted $ 3.58 $ 4.10 $ 4.21 $ 4.06 $ 4.01
</TABLE>
<TABLE>
Summary Balance Sheet Data:
<CAPTION>
July 29, July 30, July 31,
1994 1993 1992
<S> <C> <C> <C>
Total Assets $54,255 $50,163 $52,641
Total Liabilities $39,327 $36,486 $39,974
Total Equity $14,928 $13,677 $12,667
</TABLE>
USE OF PROCEEDS
The Company is a cooperative existing for the benefit of its
member-stockholders. This offering shall be used to raise capital
from new and existing member-stockholders for the purchase of
inventory and other general operating expenses of the Company. The
Company reserves the right to use a portion of the proceeds from
the sale of the Common Stock for special capital expenditures in
the event such need arises, even though it is not anticipated that
the proceeds would constitute the primary source of funding for any
capital improvement.
THE COMPANY
The Company was incorporated under the laws of the State of
Delaware on September 18, 1958 under the name of Piggly Wiggly
Alabama Distributing Company, Inc. On September 26, 1979, it was
reorganized as an Alabama corporation under the name of Piggly
Wiggly Alabama Distributing Co., Inc. (the "Company"). The Company
has its principal place of business at 2400 J. Terrell Wooten
Drive, Bessemer, Alabama. During the past five years, the Company
has steadily grown, increasing sales from $333,106,000 in 1990 to
$372,223,000 in 1994. The number of grocery stores serviced by the
Company has expanded from 168 in 1990 to 198 in 1994.
BUSINESS
Business Objective
The Company was organized and is being operated for the
purpose of providing grocery warehousing and distribution
facilities for its stockholders who are retail grocery operators in
parts of Alabama, Tennessee, Georgia, Mississippi, Florida and
North Carolina. While it is the hope and continued intention of the
management of the Company that the Company operate with a
reasonable profit, the primary objective of the Company is to
provide groceries, food products and related items and services at
low cost to its stockholders so that they may effectively meet
competition in their retail grocery market. Under the
circumstances, the intention that the Company operate with a
reasonable profit is subordinate to its primary objective, which
might result in a less profitable operation than would be the case
in the event there was no connection between the Company as a
supplier and its stockholders as customers.
Distribution
The Company operates wholesale grocery warehouse distribution
facilities in Bessemer, Alabama. From its warehouse and
distribution facilities, the Company distributes grocery products,
including dry groceries, frozen foods, meats, produce, tobacco
products, dairy products, health and beauty aids and other related
items and provides services to retail grocery stores operated under
franchise issued by the Piggly Wiggly Corporation and to
non-franchised retail grocery stores generally located within a
250-mile radius from the Company's warehouse facilities in
Bessemer, Alabama. The Company purchases its grocery products from
approximately 1200 food and related produce vendors. The percentage
of total sales produced by the various departments of the Company
during the last three years is reflected in the following table:
1994 1993 1992
---- ---- ----
Dry Groceries 50% 49% 49%
Meats 21% 22% 21%
Produce 5% 5% 5%
Dairy Products 9% 9% 9%
Tobacco Products 6% 7% 8%
Frozen Foods 4% 4% 4%
Health & Beauty Aids 3% 3% 3%
Deli 2% 1% 1%
---- ---- ----
100% 100% 100%
The Company's sales territory consists of parts of Alabama,
Tennessee, Georgia, Mississippi, Florida, and North Carolina. As of
January 15, 1995, the Company distributed to and serviced 205
retail grocery stores. For comparison with sales and operating
profit from previous years, see "Financial Statements."
The Company's inventory turns over approximately once in a 3
week period. Although retail grocery store operators have a right
to return merchandise, the actual percentage of returned
merchandise in the past five years has been negligible. Deliveries
of merchandise are made to the operators by the Company within two
days from the date an order is placed by a fleet of 51 tractors
leased by the company and 108 trailers owned by the Company. The
Company's handling of inventory is consistent with the practice of
the wholesale grocery warehouse industry. All store operators who
purchase from the Company are invoiced for the merchandise at the
time of delivery. Unpaid invoices are reflected in weekly
statements sent to operators which are to be paid within one (1)
week.
The Company is not dependent upon any single customer, the
loss of which would have a material adverse effect on its business.
The Company's largest customer accounts for less than six percent
of the Company's sales.
Patronage Dividends
The Company has a policy approved by the stockholders by which
a patronage dividend is to be accrued to each member-stockholder
from profits exceeding $400,000 from sales to member-stockholders
of the Company for any fiscal year. The amount of the patronage
dividend which is accrued to each member-stockholder is the
proportion that the sales from the Company to each
member-stockholder bear to the total sales of the Company to all
member-stockholders. The patronage dividends accrued for the past
five years are as follows:
Year Patronage Dividend
---- ------------------
1990 $2,504,979
1991 $2,022,716
1992 $2,839,541
1993 $2,046,458
1994 $3,818,545
The Company's By-Laws provide that patronage dividends shall
be paid 50% in cash eight and one-half months after year end and
50% in promissory notes issued by the Company. These notes bear
interest at an annual rate of 7.5%. Interest only is paid quarterly
and the notes mature 10 years after issuance and are redeemable by
the Company at any time. Pursuant to the loan agreement with
Compass Bank described in "Properties" below, this method of
payment may not be changed during the term of the loan, without
prior consent of Compass Bank.
With permission from Compass Bank, the 1986, 1987, and 1988
patronage dividend notes have been redeemed ahead of schedule.
Competition
The wholesale food distribution business in which the Company
operates is a highly competitive market. The Company competes
favorably with regional and national wholesales grocery
distributors as well as representatives of individual manufacturing
concerns who sell directly to store operators. There are generally
at least two regional or national distributors in any given
geographical area with whom the Company competes. Because the sales
volume of its competitors for these markets is not known, the
Company is unable to determine accurately its exact rank in the
market. The Company believes that price, credit terms, patronage
dividends and rebates, breadth of selection and services offered in
conjunction with the grocery goods and products are factors in
influencing the retail grocery store operator's selection of a
wholesale distributor. The Company has been successful in utilizing
a combination of these factors to achieve its steady rate of
growth.
Employees
As of January 15, 1995, the Company had approximately 464
employees, divided into the following departments:
Warehouse Employees 205
Office and Administrative 74
Truck Drivers and Deliverymen 81
Retail Services 29
Supervisors 45
Data Processing 15
Shop and Maintenance 15
The truck drivers and warehouse employees are affiliated with
the Teamsters International Local Union No. 612. The Company enjoys
excellent working relations with its employees.
Connection With Piggly Wiggly Corporation
On June 20, 1984, the Company and Piggly Wiggly Corporation
entered into a Stock Purchase and Distributor's Agreement whereby
the Company granted Piggly Wiggly Corporation a first right of
refusal for the purchase of the Company and Piggly Wiggly
Corporation authorized the Company to act as a distributor of
Piggly Wiggly products and to use Piggly Wiggly trademarks, service
marks, copyright, trade names and logos. The Company shall have
such rights unless and until it defaults under the terms and
conditions of the Stock Purchase and Distributor's Agreement. As of
the date hereof, no such default has occurred.
Piggly Wiggly Corporation holds no ownership interest in the
Company and the Company is totally owned by its
member-stockholders.
PROPERTIES
In May, 1988, the Company completed construction and occupied
its office, warehouse and distribution facility on approximately 36
acres in Bessemer, Alabama. The warehouse consists of approximately
289,000 square feet of dry goods storage area, 115,290 square feet
of perishable and frozen foods storage and 27,000 square feet of
general office space. The cost of the facility was approximately
$20 million. The Company also owns an additional 216 acres at the
Bessemer site which is being held by the Company for future
development and/or sale.
The office, warehouse and distribution facility was financed
with Industrial Development Bonds issued by the Industrial
Development Board of the City of Bessemer, Alabama. The Bonds were
sold on May 27, 1987. The transaction has the form of a lease;
however, the economic substance of the lease is that the Company
financed the construction through the lease, and accordingly, the
property and the accompanying debt is recorded in the Company's
assets and liabilities. The lease contains a bargain purchase
option and expires or is cancelable at the debt repayment date. The
lease provides for minimum lease payments sufficient to cover the
debt service and related expenses. The bonds were purchased by
Compass Bank. The original bond indenture had an interest rate of
9.625% until May 1, 1997, at which time the rate was scheduled to
become variable at 3% above the six month treasury bill index. In
September 1994, the indenture was amended to bear interest at a
fixed rate of 8.625%. The amendment allows the Company to prepay up
to $750,000 of principal each year without penalty. There is a
formula redemption fee for prepayments in excess of $750,000
annually prior to April 1, 2002. The loan agreement gives the bond
purchaser a security interest in all the assets of the Company and
places certain restrictions and performance requirements on the
Company for the period of the loan. These restrictions include a
limit of 50% of the patronage dividend being paid in cash and
limits the amount of capital expenditures and additional debt which
may be incurred by the Company.
The Company was in compliance with all requirements of the
loan at July 29, 1994 and as of the date of this report.
In April 1994, the Board of Directors approved a plan of
expansion of the warehouse and distribution facility. The plan
calls for the addition of approximately 130,000 square feet of dry
grocery space and approximately 80,000 square feet of new freezer
space, along with the related racks and equipment necessary to
utilize the additional facilities. The cost of the additional
facilities is expected to be approximately $12,500,000. Work on
this expansion began in September 1994.
Financing arrangements have been negotiated with Compass Bank
whereby approximately $10,000,000 will be borrowed under a three
year revolving line of credit at the bank's prime rate or 175 basis
points over LIBOR, whichever is lower. The line will decline
$1,000,000 per year for three years and is expected to be
renegotiated prior to maturity.
PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC.
AND SUBSIDIARIES
SELECTED FINANCIAL DATA
The following sets forth selected financial information of
Piggly Wiggly Alabama Distributing Co., Inc. and Subsidiaries for
the five fiscal periods ended July 29, 1994. The material should be
read in conjunction with the consolidated financial statements and
related notes with respect to the three fiscal periods ended July
29, 1994.
<TABLE>
<CAPTION>
(Dollar Amounts in thousands)
Fiscal Periods Ending
--------------------------------------------------------------------
July 29, July 30, July 31, July 26, July 27,
1994 1993 1992 1991 1990
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
OPERATIONS
Net Sales $372,223 $353,027 $351,212 $342,402 $333,106
Cost of Sales 353,576 333,476 328,716 323,138 315,457
-------- -------- -------- -------- --------
Gross Profit
on sales 18,647 19,551 22,496 19,264 17,649
Purchase
discounts 5,502 5,143 5,060 4,861 4,760
Other operating
income 2,081 1,144 1,321 1,593 2,109
-------- -------- -------- -------- --------
Gross Profit 26,230 25,838 28,877 25,718 24,518
Selling, general
and
administrative
expenses 18,059 19,297 21,196 19,11 17,650
Depreciation and
amortization 2,004 1,992 2,124 1,876 1,745
-------- -------- -------- -------- --------
Operating
income 6,167 4,549 5,557 4,731 5,123
Interest expense 1,949 2,103 2,318 2,308 2,218
-------- -------- -------- -------- --------
Income before
patronage
dividends 4,218 2,446 3,239 2,423 2,905
Patronage
Dividends 3,818 2,046 2,839 2,023 2,505
-------- -------- -------- -------- --------
Income before
income
taxes 400 400 400 400 400
Income taxes 145 126 124 136 143
-------- -------- -------- -------- --------
Net income $ 255 $ 274 $ 276 $ 264 $ 257
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
</TABLE>
<TABLE>
PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC.
AND SUBSIDIARIES
SELECTED FINANCIAL DATA
<CAPTION>
(Dollar Amounts in thousands, except for per share data)
Fiscal Periods Ending
--------------------------------------------------------------------
July 29, July 30, July 31, July 26, July 27,
1994 1993 1992 1991 1990
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
FINANCIAL DATA
Depreciation and
amortization $ 2,004 $ 1,992 $ 2,124 $ 1,876 $ 1,745
------- ------- ------- ------- -------
------- ------- ------- ------- -------
Property and
equipment at
cost net of
accumulated
depreciation $17,711 $18,988 $20,631 $21,621 $21,982
------- ------- ------- ------- -------
------- ------- ------- ------- -------
Leased property
under capital
leases--net
of amortization $ 1,111 $ 1,025 $ 1,550 $ 2,076 $ 333
------- ------- ------- ------- -------
------- ------- ------- ------- -------
Long-term debt
excluding
current
installments $20,180 $21,567 $23,828 $24,678 $22,879
------- ------- ------- ------- -------
------- ------- ------- ------- -------
Total assets $54,256 $50,163 $52,641 $51,257 $49,656
------- ------- ------- ------- -------
------- ------- ------- ------- -------
PER SHARE DATA
Earnings per common
share and
common share
equivalent
Primary $ 3.58 $ 4.10 $ 4.21 $ 4.06 $ 4.04
------- ------- ------- ------- -------
------- ------- ------- ------- -------
Fully
Diluted $ 3.58 $ 4.10 $ 4.21 $ 4.06 $ 4.01
------- ------- ------- ------- -------
------- ------- ------- ------- -------
</TABLE>
DESCRIPTION OF COMMON STOCK
The authorized capital stock of the Company consists of
200,000 shares of Common Stock, par value $.01 per share of which
72,700(1) shares were issued and outstanding as of the date of this
Prospectus. All of the issued and outstanding Common Stock is owned
by retail grocery store operators. As of July 29, 1994, 177
stockholders of record held Common Stock in the Company. All of the
outstanding shares of Common Stock are fully paid and
non-assessable, and the shares of Common Stock offered hereby, upon
payment thereof, will be fully paid and non-assessable. Retail
grocery store operators who are approved by the Board of Directors
as stockholders must initially purchase and thereafter must
maintain by additional purchases an amount of Common Stock equal in
value to 125% of the operator's average weekly retail sales. See
"Amount of Common Stock Required to Be Purchased."
(1) As of the date of this Prospectus an additional 12,542
shares of Common Stock were under subscription by existing
member-stockholders, but have not yet been issued.
Restrictions on Ownership and Transferability
The Articles of Incorporation of the Company provide that only
approved operators of retail grocery stores supplied by the Company
are eligible to own and hold Common Stock. Operators may be sole
proprietorships, partnerships or corporations operating one or more
grocery stores at the retail level.
Because stock ownership is limited to approved retail grocery
store operators, there is no established public trading market for
the Common Stock of the Company. The Articles provide that if
anyone other than an approved retail grocery store operator should
acquire any shares of the Common Stock, such person shall not have
the right to vote the shares and the company has the option to
purchase such shares at their par value, at any time within three
years after discovery by the Company that a person other than an
approved retail grocery store operator serviced by the company has
acquired such shares. The Company's Articles of Incorporation
further provide that in the event of the death of a holder of any
of the Common Stock, or in the event such a holder ceases to be
supplied by the Company, the Company has the option to purchase
such shares at the Adjusted Book Value per share, at any time
within three years after discovery of the event resulting in such
option. Under these redemption options, the Company can redeem
stock only to the extent of unreserved and unrestricted earned
surplus or to the extent of unreserved and unrestricted capital
surplus.
Redemption Policy
Even though the Company is provided by the Articles of
Incorporation with an option, and not an obligation, to redeem
stock, the Board of Directors has adopted a policy under which all
redemption requests by a deceased Stockholder's representative or
by a Stockholder no longer serviced by the Company are honored to
the extent unreserved and unrestricted earned or capital surplus is
available for such redemption. Redemptions are generally
accomplished one year after a written redemption request is made to
the Board of Directors. The Board of Directors reserves the right
to revise the redemption policy at any time to a different policy
consistent with the Company's Articles of Incorporation and
By-Laws.
Restrictive Legends
The Stock Certificates for the Company contain a legend
reflecting the restrictions on transfer, a lien which is imposed on
the stock by the Company for any liability of the stockholder to
the Company, and other rights and restrictions of such stock as set
forth in the Company's By-Laws.
Voting Rights
The Board of Directors are divided into three classes of three
members each, with each director serving a three year term. The
expiration of term for each director class is staggered so that the
directors in class one are elected at the Annual Stockholders
meeting in year one, while the directors for classes two and three
are chosen in years two and three, respectively. While not the
intent of the Company, this classification of the Board of
Directors would tend to discourage any attempt to control the Board
of Directors since a two-year period would be required to elect
sufficient directors favorable to a person seeking to acquire
control.
Holders of Common Stock are entitled to one vote for each
share held and are not entitled to cumulate their votes in the
election of Directors. Certain actions taken by the Company, such
as an amendment to the Articles of Incorporation, require a
majority vote of outstanding stock. Under Alabama law, actions such
as dissolution of the Company and the sale of assets other than in
the ordinary course of business, require a two-thirds (2/3) vote of
outstanding stock.
Dividend and Other Stock Rights
Owners of Common Stock are entitled to such patronage
dividends and regular dividends as are declared by the Board of
Directors in accordance with the policies of the Company set out in
the Articles of Incorporation and By-Laws. See "Patronage
Dividends."
The Company is authorized to declare and pay regular dividends
on Common Stock, but none have been declared or paid, nor is it
anticipated that any will be paid as long as net profits of the
Company in excess of the approved retainage (which is currently
$400,000 per year) are accrued to member-stockholders through
patronage dividends.
The holders of Common Stock do not have pre-emptive rights
with respect to additional Common Stock that may be issued, but are
entitled under Alabama Law to share on a pro rata basis in any
distribution to shareholders upon liquidation.
Amount of Common Stock Required to Be Purchased
Each retail store operator approved as a stockholder must
initially purchase, and thereafter maintain by additional purchases
if necessary, an amount of Common Stock equal in value(1) to 125% of
the operator's average weekly retail sales. A minimum deposit of
fifteen percent (15%) of the subscription price on the initial
purchase of stock is required, with the balance of the price to be
paid by adding an amount equal to one and one-quarter percent (1
1/4%) of the operator's weekly purchases to the weekly statements
from the Company and, upon election by the member-stockholder, by
directing the Company to retain a part or all of any cash patronage
dividends to which the operator is entitled, until the stock
subscription is paid.(2) The value of the Company's Common Stock is
determined as of the end of each fiscal year in the manner set
forth in "Price of Common Stock." Each operator's weekly retail
sales average is determined at the end of the calendar year.
(1) For equalization purposes, stock owned by the operator is
valued at Adjusted Book Value per share.
(2) There is no time requirement by which the purchase price of
the stock must be paid. If an operator chooses to make no more than
the minimum initial payment of fifteen percent (15%) of the
purchase price for his required stock purchases, and chooses not to
apply any cash patronage dividends to the remaining eighty-five
(85%) of the purchase price for this stock, the one and one-quarter
percent (1 1/4%) weekly add-on to weekly purchases will provide a payout
period of approximately one hundred fifty-four (154) weeks in the absence
of an increase or decrease in average weekly sales.
Where it is necessary for operators who hold the Company's
Common Stock to purchase additional shares in order to maintain the
required relationship between the value of their Common Stock and
their average weekly retail sales (the "stock equalization
process"), the operators are permitted to pay for the additional
stock by adding an amount equal to one and one-quarter percent (1
1/4%) of their weekly purchases to the weekly statement from the
Company and, upon election by the member-stockholder, by directing
the Company to retain a part or all of any such cash patronage
dividends to which the operator is entitled, until the subscription
is paid.
Stock certificates reflecting the amount of the initial
downpayment, lump sum payments, and final payment are issued within
ninety (90) days of these payments. Payments are aggregated on the
fourth Friday of each fiscal year and certificates for Common Stock
equal in value to such payments, less the value of previous issues,
are issued shortly thereafter.
The Company's By-Laws do not specifically prohibit
stockholders from purchasing shares of the Company's Common Stock
in excess of the amount of Common Stock required to be purchased as
described herein. It has, however, been the Company's policy and
practice since its inception in 1958 to limit the ownership of
shares by any stockholder to an amount of Common Stock equal in
value to 125% of the stockholder's average weekly retail sales.
Price of Common Stock
Shares of stock in the Company are sold at the "Adjusted Book
Value" per share which is determined on an annual basis as of the
end of the fiscal year. The Adjusted Book Value per share is
determined by dividing the sum of (1) the Stockholders' Equity, (2)
the Capital Stock Subscriptions, and (3) 40% of the LIFO Reserve by
the sum of (1) the number of shares of Common Stock outstanding,
and (2) the number of shares of Common Stock under subscription. As
of the date of this prospectus, the Adjusted Book Value per share
of the Common Stock was $221.94, determined as follows:
Stockholders' Equity = $13,896,265
Capital Stock Subscriptions = $ 3,315,608
40% of LIFO Reserve = $ 1,504,800
Number of Shares Outstanding = 68,999
Number of Shares Under Subscription = 15,333
Stockholders' Equity + Capital Stock + 40% LIFO Reserve
Subscriptions
No. of Shares + No. of Shares
Outstanding under
Subscription
$13,896,265 + $3,315,608 + $1,504,800
= $221.94
68,999 + 15,333
Distribution of the Company's Stock
The Common Stock of the Company will not be sold through any
securities broker or dealer. There is no established public trading
market of the Common Stock of the Company. All stock of the Company
is and will be sold directly by the Company to approved operators
of retail grocery stores, and no commissions will be charged on
these sales. The Company solicits retail grocery operators within
the Company's service area to purchase grocery products from the
Company. As a prerequisite to becoming a member of the Company, the
new operator must purchase Common Stock from the Company. See
"Amount of Common Stock Required to be Purchased."
LEGAL PROCEEDINGS
There are no material legal proceedings against the Company or
its subsidiaries other than ordinary routine litigation incidental
to the business of the Company and its subsidiaries.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
Results of Operations
The fiscal year ended July 31, 1992 contained 53 weeks, while
the fiscal years ended July 30, 1993 and July 29, 1994 contained 52
weeks. Comparison percentages have been adjusted as necessary to
reflect this difference.
The Company's sales increased 5.4% in 1994, 2.4% in 1993 and
0.6% in 1992. The 1994 and 1993 increases were the result of
additional stores added to the customer base.
Gross profit as a percent of sales was 7.0% in 1994, 7.3% in
1993, and 8.2% in 1992, while operating expenses as a percent of
sales were 5.4% in 1994, 6.0% in 1993 and 6.6% in 1992.
Operating expenses decreased 5.8% in 1994 and 7.0% in 1993
after increasing 9.0% in 1992. Because approximately 75% of the
sales of the subsidiary were purchased from the parent and the net
sales of the retail subsidiary are only 2.7% of total sales, the
retail subsidiary did not have significant impact on total sales;
however, the operating expenses of the subsidiary were not
eliminated and therefore have a significant impact to total
operating expenses. The 1994 and 1993 net decreases in operating
expenses were due to the reduction of operating expenses at the
subsidiary level (they were zero in 1994). Operating expenses at
the wholesale level increased by 6.2% in 1994 and 6.3% during 1993.
These increases were due largely to increases in employment related
expenses. For the fiscal years 1994, 1993, and 1992, employment
related expenses averaged 60% of total operating expenses and 3.3%
of sales. These expenses increased 7.1% in 1994, 9.0% in 1993, and
13.1% in 1992. These increases were due to increases in retail
services to member customers, the cost of health insurance and
other employee benefits, and increases in sales volume.
Operating income increased 35.5% in 1994, decreased 16.6% in
1993, and increased 15.3% in 1992. The 1992 increase was due to
efficiencies at the warehouse level and improvements in the
operations of the retail subsidiary. The 1993 changes were due to
the increase in operating expenses discussed above. The 1994
increase was due to increased sales volume, stabilization of
expenses as a percent of sales and the end of the operation of the
retail subsidiary in 1993.
The financial expenses of the Company have declined by 16%
since 1992. This decline was due to the reduction in long-term
debt. The warehouse facility debt is being reduced on schedule, and
an additional payment of $750,000 was made on the debt in May 1994.
The perishable warehouse mortgage of $399,000 was paid in January
1993, the patronage dividend notes of $1,072,000 due in 1997 were
paid in January 1993, and the patronage dividend notes of $985,205
due in 1998 and 1999 were paid in December 1993. The financial
expenses will increase as the cost of the debt required for the
warehouse expansion begins in 1995.
Because all income in excess of $400,000 is returned to the
member-stockholders as a patronage dividend, once net income has
reached the $400,000 level, it does not change with overall
profitability.
The patronage dividend was 1.03% of sales in 1994, 0.58% of
sales in 1993 and 0.80% of sales in 1992.
Liquidity and Capital Resources
The Company's liquidity needs relate primarily to working
capital to support increased levels of inventories and receivables,
and funding of capital expenditures. In recent years, the Company
has met these needs in a number of ways. The construction of the
warehouse and operating facility was funded with long-term debt.
The 1995 addition of $12,000,000 will be funded in part by a
$10,000,000 3 year revolving line of credit and the remaining
$2,000,000 from operations. The portion of capital expenditures for
replacement and additional delivery vehicles are funded through
capital leases. Other capital expenditures have been funded from
cash generated by operations and from member-stockholders'
equalization purchases of Common Stock (each member store is
required to own stock equal in value to 125% of its average weekly
retail sales), except for occasional short-term borrowing to match
cash flow needs. During the last three years such short-term
borrowings have not been necessary. The Company does not experience
significant seasonal fluctuations in demand for working capital.
It is management's belief that the items in the balance sheet
which most clearly reflect the Company's liquidity condition are
the merchandise inventories, trade accounts receivable and accounts
payable. Merchandise inventories turn approximately 17 times per
year. The majority of trade accounts receivable are paid within 7
days of weekly billing, On the average, all trade accounts
receivable are paid within approximately 10 days. The Company pays
merchandise vendor payables within the period of discount terms.
The average number of days within which accounts payable are paid
is approximately 10. The ratio of merchandise inventory plus trade
accounts receivable to accounts payable is approximately 2 to 1.
The ratio of current assets to current liabilities was 1.7 in 1994
and 1.8 in each of the prior two years.
The Company's Certificate of Incorporation and By-Laws require
that all member-stockholders own Common Stock in the Company equal
in value to 125% of their average weekly retail sales. This
requirement tends to insure that as sales of the member-stockholder
increase at the retail level, the cash equity of the Company will
also increase. This increase in cash equity will provide additional
liquidity to the Company to help expand its assets, including
inventories, to meet the larger retail sales volume of member
stores.
Net additions to property, plant and equipment, other than the
construction and equipping of the warehouse and delivery vehicles
financed through capital leases, a portion of the 1995 addition as
described above, were funded from cash flow from the Company's
operations and from stockholders' equalization. Additions to
property, plant and equipment and capital lease property were
$1,449,481, $710,668, and $607,980 in fiscal years 1994, 1993 and
1992, respectively.
The Company's debt to equity ratio was 1.4 in 1994, 1.6 in
1993 and 1.9 in 1992.
Inflation
Inflation has increased many of the Company's costs and
expenses in recent years, particularly repairs and maintenance and
employment related costs. However, the Company has increased its
gross sales volume during the recent years while improving
efficiency in distribution and administration. Management estimates
that inflation increased expenses during the last three years by 3%
annually.
EXECUTIVE OFFICERS AND DIRECTORS
The following table sets forth certain information concerning
the Executive Officers and all Directors of the Company, including
the Directors' beneficial ownership of shares of the Company's
Common Stock and the total share ownership of all Officers and
Directors as a group. None of the Executive Officers of the Company
own any shares of stock in the Company except those Officers who
are also Directors and owners of retail grocery stores supplied by
the Company. Except for the stock subscriptions required by the
Company, no Executive Officers or Directors have any contracts or
agreements under which they may acquire stock in the Company except
those Officers who are also Directors and owners of retail grocery
stores supplied by the Company. All share ownership information is
as of the date of this Prospectus. All persons listed below have been
engaged in the same or similar occupations for more than the last five
years. All of the Directors are engaged in the operation of retail grocery
stores and purchase grocery products and items from the Company for
resale. All such purchases are made at the same price level at
which the remaining stockholders purchase grocery products and
items from the Company. The Directors are not given any price
differential or discount for their service on the Board of
Directors. Directors are elected to a three-year term of office
while Officers of the Corporation are elected to a one-year term of
office. The By-Laws of the Company require Directors to be
stockholders of the Company or hold a minimum of a 25% ownership
interest in a corporation, firm or partnership which owns stock in
the Company.
<TABLE>
<CAPTION>
Principal Amount of
Occupation, (1) Common Stock
Position and Nature of
Expiration with Company Beneficial Percent
of and Director- Ownership of
Director Term of ship of Other Common
Name and Age Since Director Companies Direct Indirect Stock
------------ ---------- -------- -------------- ------ -------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
Julian Gordon (63) 1980 1996 Chairman of the -0- 1,371 (2) 1.6%
Board, Grocery
Store Operator
(former President
of the Company)(2)
James Salmon (66) 1970 1996 Vice Chairman of -0- 2,559 (3) 3.0%
the Board, Director
Grocery Store
Operator(3)
D.T. Stewart (50) Not a -- President and -0- -0- 0 %
Director Chief Executive
Officer(4)
Louia Moseley (48) Not a -- Senior Vice -0- -0- 0 %
Director President
and MIS Director(5)
Jerry McCann (45) Not a -- Vice President -0- -0- 0 %
Director and Director Retail
Operations(6)
Bobby L. Martin (48) Not a -- Vice President -0- -0- 0 %
Director of Finance and
Controller(7)
Homer Vinson (61) 1983 1996 Secretary/Treasurer -0- 972 (8) 1.1%
of the Company,
Director, Grocery
Store Operator(8)
Harmon Looney (82) 1958 1995 Director, Grocery 633 -0- .8%
Store Operator
(former President
of the Company)
Billy Huff (59) 1987 1995 Director, Grocery -0- 1,304 (9) 1.5%
Store Operator(9)
Stanley Virciglio (60) 1987 1995 Director, Grocery -0- 1,792(10) 2.1%
Store Operator(10)
Mary Hardin (79) 1972 1997 Director, Grocery -0- 5,366(11) 6.3%
Store Operator(11)
Louis Day (65) 1985 1997 Director, Grocery -0- 1,365(12) 1.6%
Store Operator(12)
J.T. Milligan (59) 1985 1997 Director, Grocery -0- 2,136(13) 2.5%
Store Operator(13) -- ---------- ----
Total ownership interest of executive
officers and directors as a group 633 16,865 20.5%
--- ---------- ----
<FN>
(1) Each Director has been actively involved at the retail
level of the grocery business for at least the last five years.
(2) Julian Gordon shares an investment and voting interest
in Piggly Wiggly of Canton, Mississippi, Inc. and Piggly Wiggly of
Carthage, Inc. which corporations own in the aggregate 1,371 shares
of Common Stock of the Company.
(3) James Salmon holds the sole investment and voting
interest in W.E. Salmon, Inc. which owns 2,559 shares of Common
Stock of the Company.
(4) D.T. Stewart, the President of the Company, has been
involved actively with the wholesale level of the grocery business
since his employment with the company in 1965. He was elected
President on January 1, 1994 and prior to that time served as First
Vice President.
(5) Louia Moseley, the Senior Vice President and MIS
Director, has been involved with the wholesale level of the grocery
business since his employment with the company in 1965.
(6) Jerry McCann, Vice President and Director Retail
Operations, has been involved with the wholesale level of the
grocery business since his employment with the company in 1988.
(7) Bobby L. Martin, Vice President of Finance and
Controller of the Company, has been involved with the wholesale
level of the grocery business since his employment with the company
in 1982.
(8) Homer Vinson shares investment and voting interest in
Piggly Wiggly of Red Bay, Inc. which owns in the aggregate of 972
shares of Common Stock of the Company.
(9) Billy Huff shares investment and voting interest in
The Huff Corporation, Westco Foods, Inc., B&F Foods, Inc. and
Shuqualak Foods, Inc., which corporations own 1,304 shares of
Common Stock of the Company.
(10) Stanley Virciglio owns the sole investment and voting
interest in Piggly Wiggly Food Stores of Jefferson County, Inc.,
which owns 1,792 shares of Common Stock of the Company.
(11) The 5,366 shares are owned by Hardin & Company, Inc.
Mary G. Hardin shares investment and voting interest and owns 42%
of the Common Stock of Hardin & Company, Inc., and her daughters,
Mary Lee Hardin and Elisabeth Hardin, each own 29% of the Common
Stock of Hardin & Company, Inc. (See footnotes 1, 2 and 3 on page
21).
(12) Louis Day shares investment and voting interest in
L.A. Day Company, Inc. and Piggly Wiggly of Middle Tennessee, Inc.,
which corporations own in the aggregate 1,365 shares of Common
Stock of the Company.
(13) J.T. Milligan holds the sole investment and voting
interest in J.T.M. Corporation and shares investment and voting
interest in South Star Food Corp., which corporations own in the
aggregate 2,136 shares of Common Stock of the Company. The total of
2,136 shares beneficially owned does not include shares of Common
Stock owned or under subscription by B.G. Milligan and J. Keith
Milligan, Mr. Milligan's sons and Ubagit Corp., a corporation owned
by Mr. Milligan's family, who collectively own 1,228 shares of
Common Stock of the Company.
</TABLE>
Meetings of the Board of Directors
During the fiscal year ended July 29, 1994, there were nine
meetings of the Board of Directors. Each Director attended more
than 75% of the meetings of the Board.
EXECUTIVE COMPENSATION
The Directors of the Company serve without compensation. The
following table show the cash compensation paid the chief executive
officer of the company during the fiscal year ended July 29, 1994.
No other executive officer's cash compensation exceeded $100,000 in
the fiscal year ended July 29, 1994.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Annual Compensation
------------------------ Other annual All Other
Name and Salary Bonus Compensation Compensation
Principal Position Year ($) ($) ($) ($)
------------------ ---- ------ ------ ------------ ------------
<S> <C> <C> <C> <C> <C>
D.T. Stewart
President and Chief
Executive Officer(1) 1994 80,875 5,000 -- --
J. Terrell Wooten
President and Chief
Executive Officer(1) 1994 49,065 0 -- --
1993 99,855 5,000 -- 25,239(2)
1992 101,636 5,000 -- 45,800(2)
<FN>
(1) J. Terrell Wooten served as President and Chief Executive
Officer for a portion of the fiscal year until his retirement on
December 31, 1993. D.T. Stewart was elected President and Chief
Executive Officer on January 1, 1994 and served as such for the
remainder of the fiscal year ended July 29, 1994.
(2) This amount includes the cash equivalent of a furnished
company car, a contribution to the Company Profit Sharing Plan and
the annual contribution to the Deferred Compensation Plan referred
to below.
</TABLE>
Deferred Compensation Plan
The Deferred Compensation Plan, as amended, for J. Terrell
Wooten, the former President and Chief Executive Officer of the
Company provides that he will be paid 10 annual payments of $36,000
each beginning in 1994.
Profit Sharing Plan
The Company has maintained a Profit Sharing Plan ("Plan") for
the benefit of all of its employees since December 31, 1976. The
Plan was amended effective August 1, 1988 to comply with changes in
the law and to revise certain provisions of the Plan. Employees
become participants of the Plan during the first Plan Year
following their employment date in which they have accrued a
minimum of 1,000 hours of employment service. Annual contributions
are made to the Plan by the Company in amounts determined by the
Board of Directors. All contributions to the Plan are allocated to
the participants' accounts pursuant to a formula based on a
participant's credit units. Participants receive one credit unit
for each $1,000 of annual compensation and two credit units for
each year of service. The Company's annual contribution is
allocated among the participants' accounts in the same proportion
that each participant's credit units bear to the credits units of
all participants for that year. A participant's account vests after
five years. At death, disability or retirement, each participant or
beneficiary is paid the amount in the participant's account. If the
participant's employment is terminated, the participant's vested
account balance may be distributed to the participant depending on
the value of the account and consent of the participant. Payment
may be made in lump sum or in installments.
401(k) Plan
Effective January 1, 1991, the Company adopted The Piggly
Wiggly Alabama Distributing Co., Inc. 401(k) Plan (the "Plan")
pursuant to Section 401(k) of the Internal Revenue Code. This Plan
permits eligible employees to save a portion of their compensation
annually on a before-tax basis, which are referred to as "Elective
Deferrals". The Company may make a Matching Contribution from year
to year. The company is not obligated to make any Matching
Contributions. In addition, the Company may make annual
Discretionary Contributions in amounts as it may choose. The
Company is not obligated to make any Discretionary Contributions.
The Plan provides for distributions in the event of
retirement, death, disability or termination of employment.
Contributions to the Plan which are elected by the
employee("Elective Deferrals") are 100% vested immediately.
Matching Contributions and Discretionary Contributions made by the
employer vest according to a vesting schedule.
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
Security Ownership of Certain Beneficial Owners
The following table sets forth the names of all persons who
are known by the Company to be beneficial owners of more than five
percent of the Company's stock as of July 29, 1994.
<TABLE>
<CAPTION>
Amount and
Name and Nature of
Title of Address of Beneficial Percent
Class Beneficial Owner Ownership of Class
-------- ------------------ ---------- --------
<S> <C> <C> <C>
Common Mary G. Hardin 5,366(1) 6.3%
P.O. Box 69
Gadsden, AL 35999
Common Elisabeth Hardin 5,366(2) 6.3%
P.O. Box 69
Gadsden, AL 35999
Common Mary Lee Hardin 5,366(3) 6.3%
P.O. Box 69
Gadsden, AL 35999
<FN>
(1) The 5,366 shares are owned by Hardin & Company, Inc. Mary
G. Hardin shares investment and voting interest in and owns 42% of
the Common Stock of Hardin & Company, Inc., and her daughters, Mary
Lee Hardin and Elisabeth Hardin, each own 29% of the Common Stock
of Hardin & Company, Inc. (See Footnotes 2 and 3).
(2) The 5,366 shares are owned by Hardin & Company, Inc.
Elisabeth Hardin shares investment and voting interest in and owns
29% of the Common Stock of Hardin & Company, Inc., and her sister,
Mary Lee Hardin, owns 29% of the Common Stock of Hardin & Company,
Inc., and the remaining 42% is owned by her mother, Mary G. Hardin
(See Footnotes 1 and 3).
(3) The 5,366 shares are owned by Hardin & Company, Inc. Mary
Lee Hardin shares investment and voting interest in and owns 29% of
the Common Stock of Hardin & Company, Inc., and her sister,
Elisabeth Hardin, owns 29% of the Common Stock of Hardin & Company,
Inc., and the remaining 42% is owned by her mother, Mary G. Hardin
(See Footnotes 1 and 2).
</TABLE>
Security Ownership of Management
The security ownership of Management of the Registrant is set
forth on pages 16 and 17 hereof under the heading "Executive
Officers and Directors."
LEGAL MATTERS
The validity of the Common Stock offered hereby will be passed
upon for the Company by Spain & Gillon, 2117 Second Avenue North,
Birmingham, Alabama 35203.
EXPERTS
The financial statements and schedules included in this
Prospectus and elsewhere in the Registration Statement have been
examined by Dent, Baker & Company, independent certified public
accountants, and are included herein in reliance upon the report of
Dent, Baker & Company given upon their authority as experts in
accounting and auditing.
INDEMNIFICATION FOR SECURITIES ACTS LIABILITIES
The By-Laws of the Company provide that the Company is
empowered to indemnify its directors, officers, employees or agents
against expenses, judgements and fines, actually and reasonably
incurred by them in connection with any suit, action or proceeding
in which they are named as a party by reason of their position with
the Company. This indemnity is conditioned upon the director,
officer, employee or agent acting in good faith, in a matter which
he reasonably believed to be in the best interest of the Company
and under circumstances in which he had no reasonable cause to
believe his conduct to be liable for misconduct or negligence in
the performance of his duty to the Company. The directors,
officers, employees and agents are entitled to indemnity only if
the court in which the suit was brought shall determine upon
application that, despite an adjudication of liability against the
director, officer, employee or agent, and in view of all the
circumstances of the case, he is fairly and reasonably entitled to
indemnity for such expenses as the court shall deem proper.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or
persons controlling the Company pursuant to the foregoing
provisions, the Company has been informed that in the opinion of
the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is therefore
unenforceable.
INDEX TO FINANCIAL STATEMENTS
Page
INDEPENDENT AUDITORS' REPORT F-1
CONSOLIDATED BALANCE SHEETS
July 29, 1994 and July 30, 1993 F-2 - F-3
CONSOLIDATED STATEMENTS OF INCOME
Years ended July 29, 1994, July 30, 1993 and July 31, 1992 F-4
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Years ended July 29, 1994, July 30, 1993 and July 31, 1992 F-5
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended July 29, 1994, July 30, 1993 and July 31, 1992 F-6 - F-7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
July 29, 1994, July 30, 1993 and July 31, 1992 F-8 - F-19
The Board of Directors
Piggly Wiggly Alabama Distributing Co., Inc.
and Subsidiaries
INDEPENDENT AUDITORS' REPORT
We have audited the accompanying consolidated balance sheets
of Piggly Wiggly Alabama Distributing Co., Inc. and Subsidiaries as
of July 29, 1994 and July 30, 1993, and the related consolidated
statements of income, stockholders' equity, and cash flows for each
of the three fiscal years in the period ended July 29, 1994. 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 in accordance with generally accepted
auditing standards. Those standards 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. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the financial
position of Piggly Wiggly Alabama Distributing Co., Inc. and
Subsidiaries as of July 29, 1994 and July 30, 1993, and the
consolidated results of operations and cash flows for each of the
three fiscal years in the period ended July 29, 1994, in conformity
with generally accepted accounting principles.
DENT, BAKER & COMPANY
September 23, 1994
<TABLE>
PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
July 29, 1994 and July 30, 1993
<CAPTION>
ASSETS 1994 1993
------------ ------------
<S> <C> <C>
CURRENT ASSETS
Cash $ 2,815,253 $ 1,039,553
Short-term investments 1,142,228 --
Receivables
Trade accounts 9,152,077 9,536,146
Other 315,851 196,445
------------ ------------
Total receivables 9,467,928 9,732,591
Inventories 18,495,239 15,758,041
Prepaid expenses 196,561 224,595
Deferred tax asset 107,200 73,079
------------ ------------
Total current assets 32,224,409 26,827,859
NOTES RECEIVABLE 1,471,353 1,556,419
PROPERTY AND EQUIPMENT
At cost net of accumulated
depreciation of $9,016,911
(1993, $9,166,166) 17,710,689 18,988,198
LEASED PROPERTY UNDER
CAPITAL LEASES
Net of accumulated
amortization of
$1,793,634 (1993, $1,601,877) 1,110,882 1,025,055
OTHER ASSETS
Unamortized loan costs 325,815 368,174
Property held for sale or
lease 1,412,472 1,397,503
------------ ------------
Total other assets 1,738,287 1,765,677
------------ ------------
TOTAL ASSETS $54,255,620 $50,163,208
------------ ------------
------------ ------------
<FN>
The Notes to Consolidated Financial Statements are an integral part
of these statements.
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY 1994 1993
------------ ------------
<S> <C> <C>
CURRENT LIABILITIES
Notes payable $ 100,000 $ 100,000
Current installments on long-term debt 1,378,220 1,255,394
Current capital lease obligations 592,316 513,460
Accounts payable -- trade 14,265,082 11,266,034
Accrued expenses 887,096 749,206
Accrued income tax 15,850 11,255
Accrued patronage dividends 1,909,272 1,023,229
---------- ----------
Total current liabilities 19,147,836 14,918,578
LONG-TERM DEBT
Notes payable -- long-term portion 18,988,133 20,438,611
Capital lease -- long-term obligations 900,242 848,786
Deferred tax liability -- long-term portion 291,200 279,980
---------- ----------
Total long-term debt 20,179,575 21,567,377
---------- ----------
Total liabilities 39,327,411 36,485,955
STOCKHOLDERS' EQUITY
Common stock of $.01 par value per
share, authorized 200,000 shares;
issued 68,999 shares (1993, 65,510 shares) 690 655
Additional paid-in capital 12,213,162 11,353,721
Common stock purchase deposits 1,031,944 772,093
Retained earnings 1,682,413 1,550,784
---------- ----------
Total stockholders' equity 14,928,209 13,677,253
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $54,255,620 $50,163,208
---------- ----------
---------- ----------
<FN>
The Notes to Consolidated Financial Statements are an integral part
of these statements.
</TABLE>
<TABLE>
PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Years ended July 29, 1994, July 30, 1993 and July 31, 1992
<CAPTION>
July 29, July 30, July 31,
1994 1993 1992
------------ ------------ ------------
<S> <C> <C> <C>
Net sales $372,223,423 $353,027,019 $351,212,393
Cost of sales 353,576,278 333,475,534 328,715,943
------------ ------------ ------------
GROSS PROFIT ON SALES 18,647,145 19,551,485 22,496,450
Purchase discounts 5,501,576 5,142,815 5,059,882
Other operating income 2,081,323 1,143,577 1,320,844
------------ ------------ ------------
GROSS PROFIT 26,230,044 25,837,877 28,877,176
Selling, general and
administrative expenses 18,058,955 19,296,509 21,195,222
Depreciation and amortization 2,003,648 1,991,625 2,124,474
------------ ------------ ------------
OPERATING INCOME 6,167,441 4,549,743 5,557,480
Interest expense 1,948,896 2,103,285 2,317,939
------------ ------------ ------------
INCOME BEFORE PATRONAGE
DIVIDENDS AND
INCOME TAXES 4,218,545 2,446,458 3,239,541
Patronage dividends 3,818,545 2,046,458 2,839,541
------------ ------------ ------------
INCOME BEFORE INCOME TAXES 400,000 400,000 400,000
Provision for income taxes 144,935 125,712 123,980
------------ ------------ ------------
NET INCOME $ 255,065 $ 274,288 $ 276,020
------------ ------------ ------------
------------ ------------ ------------
Earnings per common share
and common share equivalent
Primary $ 3.58 $ 4.10 $ 4.21
------------ ------------ ------------
------------ ------------ ------------
Fully diluted $ 3.58 $ 4.10 $ 4.21
------------ ------------ ------------
------------ ------------ ------------
<FN>
The Notes to Consolidated Financial Statements are an integral part
of these statements.
</TABLE>
<TABLE>
PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Years ended July 29, 1994, July 30, 1993 and July 31, 1992
<CAPTION>
July 29, July 30, July 31,
1994 1993 1992
---------- ---------- ----------
<S> <C> <C> <C>
COMMON STOCK
Balance, beginning of year $ 655 $ 640 $ 626
Add new issues during the year 63 33 35
Less redemptions during the year 28 18 21
----------- ----------- -----------
Balance, end of year $ 690 $ 655 $ 640
----------- ----------- -----------
----------- ----------- -----------
ADDITIONAL PAID-IN CAPITAL
Balance, beginning of year $11,353,721 $10,979,009 $10,660,334
Add premiums received on
common stock 1,346,787 704,750 717,752
Less refund of premium
received on common
stock redeemed 487,346 330,038 399,077
----------- ----------- -----------
Balance, end of year $12,213,162 $11,353,721 $10,979,009
----------- ----------- -----------
----------- ----------- -----------
COMMON STOCK PURCHASE DEPOSITS
Balance, beginning of year $ 722,093 $ 360,771 $ 525,897
Add cash collections 1,656,701 1,116,105 552,661
Less fully paid stock issued 1,346,850 704,783 717,787
----------- ----------- -----------
Balance, end of year $ 1,031,944 $ 772,093 $ 360,771
----------- ----------- -----------
----------- ----------- -----------
RETAINED EARNINGS
Balance, beginning of year $ 1,550,784 $ 1,327,231 $ 1,099,240
Add net income 255,065 274,288 276,020
Less excess of purchase price
over issue price of stock
redeemed and cancelled 123,436 50,735 48,029
----------- ----------- -----------
Balance, end of year $ 1,682,413 $ 1,550,784 $ 1,327,231
----------- ----------- -----------
----------- ----------- -----------
TOTAL STOCKHOLDERS' EQUITY $14,928,209 $13,677,253 $12,667,651
----------- ----------- -----------
----------- ----------- -----------
<FN>
The Notes to Consolidated Financial Statements are an integral part
of these statements.
</TABLE>
<TABLE>
PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended July 29, 1994, July 30, 1993 and July 31, 1992
<CAPTION>
July 29, July 30, July 31,
1994 1993 1992
------------ ------------ ------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from customers $372,651,848 $351,763,657 $351,090,397
Cash paid for cost of sales and inventories (347,967,323) (327,304,083) (322,951,447)
Cash paid to other suppliers and employees (17,853,589) (19,284,724) (21,031,159)
Cash paid for patronage dividends (1,023,230) (1,606,313) (1,178,320)
Interest received 240,127 198,632 179,648
Interest paid (1,806,249) (2,103,680) (2,296,168)
Income taxes paid (163,241) (253,890) (249,243)
Miscellaneous income received 1,613,363 956,629 1,146,059
------------ ------------ ------------
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES 5,691,706 2,366,228 4,709,767
------------ ------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment and
capital lease equipment (1,449,481) (710,668) (607,980)
Proceeds from sale of property and equipment 806,023 968,814 5,875
(Increase) decrease in notes receivable (34,340) (1,422,821) (169,613)
Additions to short-term investments (1,142,228) -- --
------------ ------------ ------------
NET CASH PROVIDED (USED) BY
INVESTING ACTIVITIES (1,820,026) (1,164,675) (771,718)
------------ ------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term debt 702,416 -- --
Debt reduction
Short-term -- -- --
Long-term (2,650,012) (1,990,249) (2,084,063)
Collections on common stock subscriptions 1,606,701 1,116,105 552,661
Redemption cost -- common stock (610,810) (380,791) (447,137)
Cash paid for early redemption of
patronage dividend notes (1,144,275) (1,072,282) --
------------ ------------ ------------
NET CASH PROVIDED (USED) BY
FINANCING ACTIVITIES (2,095,980) (2,327,217) (1,978,539)
------------ ------------ ------------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 1,775,700 (1,125,664) 1,959,510
------------ ------------ ------------
CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR 1,039,553 2,165,217 205,707
------------ ------------ ------------
CASH AND CASH EQUIVALENTS AT
END OF YEAR $ 2,815,253 $ 1,039,553 $ 2,165,217
------------ ------------ ------------
------------ ------------ ------------
<FN>
The Notes to Consolidated Financial Statements are an integral part
of these statements.
</TABLE>
<TABLE>
PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
Years ended July 29, 1994, July 30, 1993 and July 31, 1992
<CAPTION>
July 29, July 30, July 31,
1994 1993 1992
---------- ---------- ----------
<S> <C> <C> <C>
RECONCILIATION OF NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES
Net income $ 255,065 $ 274,288 $ 276,020
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization of capital
lease property 2,003,648 1,906,194 2,125,575
Amortization 42,359 55,415 42,359
(Gain) loss on sale of property and
equipment (183,477) 4,251 (5,875)
Changes in assets and liabilities:
(Increase) decrease in trade
receivables 384,069 (1,255,929) (111,258)
(Increase) decrease in inventories (2,737,198) 1,933,714 (671,104)
(Increase) decrease in prepaid expenses 28,034 68,177 (33,222)
(Increase) decrease in deferred tax
asset (34,121) (73,079) --
(Increase) decrease in prepaid income
tax -- (121,514) --
Increase (decrease) in accounts payable
and accrued expenses 3,136,938 (953,108) 1,469,895
Increase (decrease) in accrued patronage
dividends 886,043 (396,542) 408,413
Increase (decrease) in accrued income
taxes payable 4,595 (42,065) (66,063)
Increase (decrease) in deferred patronage
dividends payable 1,909,272 836,687 1,252,808
Increase (decrease) in deferred income
taxes payable 11,220 108,480 (59,200)
Increase in deferred compensation
payable (14,741) 21,259 81,419
----------- ---------- ----------
NET CASH PROVIDED BY OPERATING
ACTIVITIES $ 5,691,706 $2,366,228 $ 4,709,767
----------- ---------- ----------
----------- ---------- ----------
<FN>
The Notes to Consolidated Financial Statements are an integral part
of these statements.
</TABLE>
PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
July 29, 1994, July 30, 1993 and July 31, 1992
NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
The Company is an Alabama corporation that operates as a
wholesale grocery cooperative, which provides wholesale groceries
and grants credit to its stockholders/customers who are retail
grocery operators in Alabama, Tennessee, Georgia, Mississippi,
Florida and North Carolina.
Annually, the Company returns to its stockholders/customers as
a patronage dividend all of its income in excess of an amount
approved by the stockholders to be retained. The patronage dividend
is required to be distributed within an 8 1/2 month period after the
Company's year end. The retainage amount approved by the
stockholders for the years ended July 29, 1994, July 30, 1993 and
July 31, 1992, was $400,000.
As more fully described in Note 11 of the Notes to
Consolidated Financial Statements, the Company acquired the
operating assets and began operation of four retail grocery stores
during the fiscal year ended July 27, 1990. These operating assets
were sold in February 1993 and the Subsidiary was inactive at July
29, 1994 and July 30, 1993.
The fiscal year ended July 29, 1994 is composed of 52 weeks.
The fiscal years ended July 30, 1993 and July 31, 1992 are composed
of 52 and 53 weeks, respectively.
Basis of Consolidation
The financial statements include the accounts of Piggly Wiggly
Alabama Distributing Co., Inc. and its wholly-owned subsidiaries,
BLM Enterprises, Inc. and Onsite Sales & Service, Inc. Both
wholly-owned subsidiaries were inactive at July 29, 1994 and July
30, 1993.
Cash and Cash Equivalents
Cash and highly liquid debt instruments purchased with an
original maturity of three months or less are considered to be cash
equivalents.
Bad Debts
Bad debts are charged to expense when deemed uncollectible
under the specific write-off method, which approximates the amount
of bad debts had the reserve method been used.
Inventories
The wholesale inventory is valued at the lower of cost,
last-in, first-out (LIFO) or market. If the first-in, first-out
(FIFO) method of inventory pricing had been used by the Company,
inventory would have been approximately $3,762,000 and $3,571,000
higher than reported at July 29, 1994 and July 30, 1993,
respectively.
A summary of inventories at July 29, 1994 and July 30, 1993 is
as follows:
Description 1994 1993
---------- ------------ ------------
Wholesale grocery inventories $18,495,239 $15,758,041
------------ ------------
------------ ------------
Property and Equipment
Property and equipment are recorded at cost. Depreciation on
buildings and improvements is determined under the straight-line
method over the estimated useful life of the buildings and
substantially all other assets are depreciated under accelerated
and straight-line methods over the estimated useful lives of the
assets.
Estimated useful lives of the assets are as follows:
Buildings and improvements 25 - 35 years
Machinery and equipment 5 - 10 years
Automobiles 3 - 5 years
Amortization of Intangibles and Leased Property Under Capital
Leases
Loan costs and origination fees are being amortized on the
straight-line method over the life of the loan. Amortization of
leased property under capital leases is computed under the
straight-line method over the term of the leases.
NOTE 2 -- PROPERTY AND EQUIPMENT
A summary of property and equipment and accumulated
depreciation at July 29, 1994 and July 30, 1993 is as follows:
1994
------------------------------------------
Accumulated
Description Cost Depreciation Net
---------- ----------- ------------ ----------
Land $ 242,069 $ -- $ 242,069
Buildings and improvements 16,125,123 2,883,750 13,241,373
Equipment 10,360,408 6,133,161 4,227,247
----------- ----------- -----------
Totals $26,727,600 $ 9,016,911 $17,710,689
----------- ----------- -----------
----------- ----------- -----------
1993
------------------------------------------
Accumulated
Description Cost Depreciation Net
---------- ----------- ------------ ----------
Land $ 365,882 $ -- $ 365,882
Buildings and improvements 17,738,458 3,583,588 14,154,870
Equipment 10,050,024 5,582,578 4,467,446
----------- ----------- -----------
Totals $28,154,364 $ 9,166,166 $18,988,198
----------- ----------- -----------
----------- ----------- -----------
Depreciation charged to expense for each of the three fiscal
years included in the period ended July 29, 1994 is as follows:
1994 1993 1992
----------- ----------- -----------
Total depreciation $ 1,439,280 $ 1,466,241 $1,599,090
----------- ----------- ----------
----------- ----------- ----------
NOTE 3 -- DESCRIPTION OF CAPITAL LEASE OBLIGATIONS
The Company leases vehicles used in the delivery of
merchandise. The vehicle leases are generally for 5 years and are
classified as capital leases. The leases are cancelable after one
year at either the lessee's or lessor's option, with 120 days
notification to the other party. The leases require the Company to
purchase the vehicles at a determinable value, but not less than
approximately 20% of original value if the Company cancels the
leases. If the lessor cancels the leases, the Company has the
option of purchasing the vehicles at a determinable value but not
less than approximately 20% of original value. The leasing
arrangement provides for contingent minimum lease payment increases
or decreases based on the annual rise or fall of the automotive
section of the Consumer Price Index, excluding fuel prices.
The following is a schedule by years of future minimum lease
payments under capital leases together with the present value of
the net minimum lease payments as of July 29, 1994.
Year Ending July
----------------
1995 $1,022,928
1996 822,402
1997 220,824
1998 220,824
1999 184,020
----------
Total minimum lease payments 2,470,998
Less: Amount representing estimated
executory costs and profit
thereon, included in total
minimum lease payments 864,130
Less: Amount representing interest 114,310
----------
Present value of net minimum lease
payments $1,492,558
----------
----------
The present value of the net minimum lease payments is
included in the financial statements in the following categories:
1994 1993
---------- ----------
Current capital lease obligations $ 592,316 $ 513,460
Capital lease - long-term obligations 900,242 848,786
---------- ----------
Totals $1,492,558 $1,362,246
---------- ----------
---------- ----------
Assets carried on the balance sheets under the heading of
leased property under capital leases at July 29, 1994 and July 30,
1993 are summarized as follows:
Class of Property 1994 1993
---------------- ---------- ----------
Delivery vehicles $2,904,516 $2,626,932
Less: Amortization 1,793,634 1,601,877
---------- ----------
Net leased property under
capital leases $1,110,882 $1,025,055
---------- ----------
---------- ----------
Amortization charged to expense for each of the three fiscal
years included in the period ended July 29, 1994 is as follows:
1994 1993 1992
-------- -------- --------
Total amortization $564,368 $525,384 $525,384
-------- -------- --------
-------- -------- --------
NOTE 4 -- COMMON STOCK PURCHASE DEPOSITS
Each stockholder/customer retail operator is required to
purchase and maintain by additional purchases, if necessary, an
amount of stock equal in value to 125% of the operator's average
weekly retail sales. The normal terms of the initial stock purchase
are a minimum 15% down payment with the balance to be paid by a 1
1/4% addition to weekly purchases from the Company by the retail
operator. Common stock certificates equivalent to the 15% down
payment are issued within ninety (90) days of the down payment.
Additionally, equivalent shares are issued at least annually for
subscription payments received. Common stock purchase deposits
represent amounts paid under subscriptions for shares that have not
yet been issued. There are 15,333 shares under subscription at July
29, 1994 at an average price of $216.24. At July 30, 1993, 13,686
shares were under subscription at an average price of $214.14.
Common stock purchase deposits are nonforfeitable by the
operator and are refundable if the operator dies or ceases to do
business with the Company. The Company has the right to offset
these deposits and common stock against amounts due the Company on
termination of membership.
The Certificate of Incorporation grants the Company an
irrevocable option to redeem shares of any stockholder who dies or
ceases to be served by the warehouse. The redemption price for
shares redeemed in this manner is determined annually by the Board
of Directors. The excess of the redemption price over the issue
price for shares redeemed in this manner amounted to $123,436,
$50,735 and $48,029 for the years ended July 29, 1994, July 30,
1993 and July 31, 1992, respectively. The redemption price at July
29, 1994 was $221.94. The redemption price at July 30, 1993 was
$217.99 and at July 31, 1992 the redemption price was $214.84.
NOTE 5 -- NOTES PAYABLE AND LONG-TERM DEBT
Notes payable and long-term debt at July 29, 1994 and July 30,
1993 are summarized as follows:
Notes Payable 1994 1993
------------ ---------- ----------
Debentures payable $ 100,000 $ 100,000
---------- ----------
---------- ----------
1994
------------------------------------------
Current Long-term
Long-Term Debt Portion Debt Total
-------------- ------------ ----------- -----------
Deferred compensation payable $ 34,598 $ 184,513 $ 219,111
Industrial Revenue Bonds 1,343,622 12,054,862 13,398,484
Deferred patronage dividends -- 6,748,758 6,748,758
----------- ----------- -----------
Totals $ 1,378,220 $18,988,133 $20,366,353
----------- ----------- -----------
----------- ----------- -----------
1993
------------------------------------------
Current Long-term
Long-Term Debt Portion Debt Total
-------------- ---------- ---------- ----------
Deferred compensation payable $ 34,598 $ 199,252 $ 233,850
Industrial Revenue Bonds 1,220,796 14,255,599 15,476,395
Deferred patronage dividends -- 5,983,760 5,983,760
----------- ----------- -----------
Totals $ 1,255,394 $20,438,611 $21,694,005
----------- ----------- -----------
----------- ----------- -----------
The Company also has available a $2,500,000 line of credit.
The line bears interest at the bank's prime rate. The line and any
other debts to the Company's lead bank are cross-collateralized
with the Industrial Revenue Bonds and are secured by substantially
all assets of the Company. The interest rate at July 29, 1994 was
7.75%. There were no outstanding draws against this line of credit
at July 29, 1994 or July 30, 1993.
The debentures payable represent short-term loans to the
Company by store operators. The debentures bear interest at
approximately 80% of the bank prime rate. The debentures are
payable on demand; however, there is a partial interest forfeiture
for debentures presented for payment within six months of issue.
The weighted average interest rate on the debentures at July 29,
1994 was approximately 6.5%.
The deferred compensation payable is the present value
discounted at 10% of an unfunded deferred compensation agreement
with an officer of the Company. The agreement calls for 10 annual
installments of $36,000, commencing January 1, 1994.
The Industrial Revenue Bonds were issued on May 27, 1987, to
finance the construction of a new warehouse, office and
distribution facility. The transaction has the form of a lease,
however, the economic substance of the lease is that the Company is
financing the facility through the lease, and, accordingly, it is
recorded in the Company's assets and liabilities. The lease
contains a bargain purchase option and expires or is cancelable at
the debt repayment date.
The lease provides for minimum lease payments sufficient to
cover the debt service and related expenses. The bonds required
monthly payments of interest only until May 1, 1989, at which time
monthly principal and interest payments of approximately $225,000
began. The original bond indenture had an interest rate of 9.625%
until May 1, 1997, at which time the rate was scheduled to become
variable at 3% above the six month treasury bill index. In
September 1994, the indenture was amended to bear interest at a
fixed rate of 8.625%. The monthly principal and interest payment is
approximately $200,000. The amendment allows the Company to prepay
up to $750,000 of principal each year without penalty. There is a
formula redemption fee for prepayments in excess of $750,000
annually prior to April 1, 2002.
The bonds are secured by all unencumbered assets and a
subordinate security interest in any assets with prior security
interests. Additionally, the bonds contain covenants which restrict
the unrelated capital expenditures to $1,000,000 per year on a
cumulative basis over the life of the bonds. The indenture
restricts additional debt, new leases, payment of patronage
dividends, equity levels and the retirement of notes issued as
partial payment of patronage dividends. The indenture requires the
Company to maintain certain financial ratios over the life of the
bonds. At July 29, 1994, and the date of this report, the Company
was in compliance with the bond covenants and restrictions.
On March 17, 1987, the stockholders approved a plan which
provided for the payment of patronage dividends, 50% in cash and
50% in 10 year 7.5% promissory notes. The deferred patronage
dividends payable represent the portion of the patronage dividends
that were paid in the form of ten year 7.5% promissory notes.
Interest on the notes is paid quarterly. The notes are subordinate
to secured creditors. During the year ended July 29, 1994, the
Company redeemed the 1987 and 1988 deferred patronage dividends
payable amounting to $985,205. During the year ended July 30, 1993,
the Company redeemed the 1986 deferred patronage dividends payable
amounting to $1,072,283. There was no gain or loss on the early
redemptions.
The aggregate maturities on the outstanding long-term debt at
July 29, 1994 are as follows:
Year Ending July
--------------
1995 $ 1,378,220
1996 1,528,554
1997 1,788,917
1998 1,940,765
1999 2,045,856
Later years 11,975,241
-----------
Total $20,657,553
-----------
-----------
NOTE 6 -- EARNINGS PER COMMON SHARE AND COMMON SHARE EQUIVALENT
Primary earnings per common share and common share equivalent
were computed by dividing net income by the weighted average number
of shares and share equivalents outstanding during the period.
Fully paid stock subscriptions and stock subscriptions priced below
the current redemption price are considered common stock
equivalents for purposes of computing earnings per common share and
common share equivalent. Proceeds from the assumed purchase of
subscribed shares priced below the current redemption price were
assumed to be used to purchase treasury stock at the current
redemption price. The weighted average number of common shares and
common share equivalents outstanding at July 29, 1994 was 71,197
shares (66,935 shares in fiscal 1993 and 64,437 shares in fiscal
1992). Fully diluted earnings per common share and common share
equivalent are computed as above, except that the issue of common
shares under subscription is assumed to take place at the beginning
of the fiscal year when the result is dilutive.
NOTE 7 -- PROFIT SHARING PLAN
The Company has a profit sharing plan which covers
substantially all employees. The amount of contributions, if any,
are determined annually by the Board of Directors. The amount of
contributions to the plan charged to expense for the year ended
July 29, 1994 was $225,000 ($125,000 for the years ended July 30,
1993 and July 31, 1992). It is the policy of the Company to fund
profit sharing cost accrued.
The Company also has a 401(k) plan available to all full-time
employees who have at least one year of service. The Plan allows
electing participants to contribute up to 15% of their compensation
to the Plan. The Company contributes 25% of the first 5% of elected
contributions. The 401(k) plan year is a calendar year. Company
contributions to the Plan for the years ended July 29, 1994 and
July 30, 1993 amounted to approximately $50,000 and $36,000,
respectively.
NOTE 8 -- INCOME TAXES
During the year ended July 30, 1993, the Company and its
subsidiaries adopted Statement of Financial Accounting Standards
Statement No. 109 - Accounting for Income Taxes (SFAS 109). The
Company and its subsidiaries had previously used the liability
method for computing deferred taxes. Under the liability method,
the deferred tax liability is determined based on the difference
between the financial statement and tax basis of assets and
liabilities as measured by the enacted tax rates which are expected
to be in effect when these differences reverse. Adoption of SFAS
109 did not have a material effect on the financial statements and
did not require restatement of the prior periods. Deferred tax
expense is the result of changes in the deferred tax liability.
A reconciliation of the statutory provision for income taxes
to financial reporting is as follows:
1994 1993 1992
-------- -------- --------
Pre-tax income from domestic operations $400,000 $400,000 $400,000
-------- -------- --------
-------- -------- --------
Statutory provision $136,000 $136,000 $136,000
Nondeductible expenses 7,800 4,200 4,280
Benefit of fuel tax credit (26,122) (21,949) (20,653)
State income taxes net of Federal
tax benefit 13,200 9,579 9,600
Other -- net 14,057 (2,118) (5,247)
-------- -------- --------
Provision for income taxes $144,935 $125,712 $123,980
-------- -------- --------
-------- -------- --------
The provision for income taxes is composed of the following:
1994 1993 1992
-------- -------- --------
Current
Federal $150,265 $ 78,099 $164,285
State 17,570 10,495 18,895
-------- -------- --------
Total current 167,835 88,594 183,180
Deferred
Federal (20,381) 33,100 (54,850)
State (2,519) 4,018 (4,350)
-------- -------- --------
Total deferred (22,900) 37,118 (59,200)
-------- -------- --------
Provision for income taxes $144,935 $125,712 $123,980
-------- -------- --------
-------- -------- --------
Current and deferred tax assets and liabilities are comprised
of the following at July 29, 1994 and July 30, 1993:
1994 1993
-------- --------
Current deferred tax assets
Unearned marketing promotions $ 102,000 $ --
Unrealized decline in asset values 38,300 --
Book over tax depreciation -- 61,279
Deferred compensation accruals 11,800 11,800
--------- --------
Total current deferred tax assets 152,100 --
Current deferred tax liabilities
Tax over book depreciation (44,800) --
Other -- net (100) --
--------- --------
Total current deferred tax liabilities (44,900) --
--------- --------
Net current deferred tax assets $ 107,200 $ 73,079
--------- --------
--------- --------
Deferred tax assets
Unearned marketing promotions $ 32,300 $ --
Deferred compensation accruals 62,700 67,800
Unrealized decline in asset values 9,800 --
Additional cost of inventories for
tax purposes 87,800 101,600
--------- --------
Total deferred tax assets 192,600 169,400
Deferred tax liabilities
Tax over book depreciation (483,800) (449,380)
--------- --------
Net deferred tax liability (291,200) (279,980)
--------- --------
Net $(184,000) $(206,901)
--------- --------
--------- --------
The net deferred tax liability in the accompanying balance
sheet includes the following amounts of deferred tax assets and
liabilities:
1994 1993
-------- --------
Deferred tax asset -- current $ 107,200 $ 73,079
Deferred tax liability (291,200) (279,980)
--------- ---------
Net deferred tax liability $(184,000) $(206,901)
--------- ---------
--------- ---------
NOTE 9 -- OPERATING LEASES
The Company has leased several store locations and sub-leased
the store locations to the store operators. The leases expire at
various times through 2013 and most have renewal options for five
to ten years. Several of the leases and sub-leases have contingent
rentals based on store sales above certain levels.
The following is a schedule by years of future minimum rental
payments and minimum sub-lease rentals required under operating
leases described above as of July 29, 1994:
Minimum Net
Minimum Sub-lease (Income)
Year Ending July Rentals Rentals Expense
---------------- ---------- ---------- ----------
1995 $ 2,331,229 $ 2,361,607 $ (30,378)
1996 2,256,959 2,283,623 (26,664)
1997 2,175,869 2,198,479 (22,610)
1998 2,064,020 2,081,037 (17,017)
1999 1,908,415 1,989,472 (81,057)
Remaining years 11,855,258 12,448,020 (592,762)
----------- ----------- ----------
Totals $22,591,750 $23,362,238 $(770,488)
----------- ----------- ----------
----------- ----------- ----------
The following schedule shows the composition of net rental
expense (income) for all operating leases except those with terms
of a month or less that were not renewed.
1994 1993 1992
---------- ---------- ----------
Minimum rentals $ 2,387,700 $ 2,044,319 $1,980,126
Less: Sub-lease rentals 2,420,901 2,060,695 1,691,955
----------- ----------- ----------
Net rental expense (income) $ (33,201) $ (16,376) $ 288,171
----------- ----------- ----------
----------- ----------- ----------
NOTE 10 -- FINANCIAL INSTRUMENTS
Concentrations of Credit Risk
Financial instruments which potentially subject the Company to
significant concentrations of credit risk consists principally of
cash investments and trade accounts receivable.
The Company maintains cash and cash equivalents in various
accounts with a financial institution located in Alabama. Accounts
at the financial institution are insured by the Federal Deposit
Insurance Corporation up to $100,000. At July 29, 1994, and July
30, 1993, the Company's uninsured cash balance totaled
approximately $1,908,200 and $840,000, respectively. The Company
performs periodic evaluations of the relative credit standing of
this financial institution as a part of its overall cash investment
strategy.
Concentrations of credit risk with respect to trade accounts
receivable are limited due to the large number of entities
comprising the Company's customer base and the stockholder/customer
relationship.
NOTE 11 -- INFORMATION ABOUT SUBSIDIARIES
The Company owns 100% of the outstanding common stock of BLM
Enterprises, Inc. BLM Enterprises, Inc. owns 100% of the
outstanding common stock of Onsite Sales & Service, Inc. Onsite
Sales & Service, Inc. has not been active since its inception in
1988.
As more fully explained in the following paragraph, during the
fiscal year ended July 30, 1993, the Company sold the operating
assets of its retail subsidiary, BLM Enterprises, Inc. At July 30,
1993, BLM Enterprises, Inc. was inactive.
On October 28, 1992, the Company entered into an agreement to
sell the assets of its retail subsidiary, BLM Enterprises, Inc. The
sale took place over a four month period ending February 1993.
There was no significant gain or loss realized on the sale of the
retail subsidiary's operating assets.
The Subsidiary was inactive for the entire fiscal year ended
July 29, 1994. Included in the consolidated results of operations
for the years ended July 30, 1993 and July 31, 1992 are the
following summarized results of operations for the parent and its
operating subsidiary:
Intercompany
1994 Company BLM Eliminations Consolidated
---- -------- ---- ------------ ------------
(Amounts stated in thousands)
Net sales $349,410 $9,629 $(6,012) $353,027
Cost of sales 331,276 8,211 (6,012) 333,475
-------- ------ ------ --------
Gross profit on sales 18,134 1,418 -- 19,552
Other operating income 6,243 43 -- 6,286
-------- ------ ------ --------
Gross profit 24,377 1,461 -- 25,838
Selling, general and
administrative
expenses 18,883 2,405 -- 21,288
-------- ------ ------ --------
Operating income
(loss) before income
taxes, interest and
patronage dividends 5,494 (944) -- 4,550
Interest expense 2,103 -- -- 2,103
Patronage dividends 2,047 -- -- 2,047
Provision for income taxes 126 -- -- 126
-------- ------ ------ --------
Net income (loss) $ 1,218 $ (944) $ -- $ 274
-------- ------ ------ --------
-------- ------ ------ --------
Intercompany
1993 Company BLM Eliminations Consolidated
---- ------ ------ ------------ ------------
(Amounts stated in thousands)
Net sales $341,164 $26,760 $(16,711) $351,213
Cost of sales 322,987 22,440 (16,711) 328,716
-------- ------ ------ --------
Gross profit on sales 18,177 4,320 -- 22,497
Other operating income 6,223 158 -- 6,381
-------- ------ ------ --------
Gross profit 24,400 4,478 -- 28,878
Selling, general and
administrative expenses 18,112 5,208 -- 23,320
-------- ------ -------- --------
Operating income
(loss) before income
taxes, interest and
patronage dividends 6,288 (730) -- 5,558
Interest expense 2,318 -- -- 2,318
Patronage dividends 2,840 -- -- 2,840
Provision for income taxes 124 -- -- 124
-------- ------ -------- --------
Net income (loss) $ 1,006 $ (730) $ -- $ 276
-------- ------ -------- --------
-------- ------ -------- --------
NOTE 12 -- SUBSEQUENT EVENT
The Board of Directors approved a preliminary plan of
expansion in April 1994. Site work on the expansion began in
September 1994. Currently, the plan is to add approximately 130,000
square feet of additional dry grocery warehouse space,
approximately 80,000 square feet of new freezer space, and all
related racks and equipment necessary to utilize the additional
facilities. The cost of the additional facilities and related racks
and equipment is expected to be approximately $12,500,000.
Financing arrangements have been negotiated with the Company's lead
bank whereby approximately $10,000,000 will be borrowed under a
three year revolving line of credit at the bank's prime rate or 175
basis points over the LIBOR rate, whichever is lower. The line is
scheduled to decline $1,000,000 per year and is expected to be
renegotiated prior to maturity in November 1997.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 16. Exhibits and Financial Statement Schedules
Exhibit Number Description
-------------- ----------
2.1 Plan of Corporation Recapitalization*
3.1 Restatement of Articles of Incorporation*
3.2 Amendment to Certificate of Incorporation*
3.3 Restatement of By-Laws with amendments as amended
through September 30, 1992*
4.1 Equalization and Stock Redemption Policy*
4.2 Specimen Common Stock Certificate*
4.3 Excerpt from Restatement of Articles of Incorporation
Defining Stock Rights*
4.4 Excerpts from Restatement of By-Laws Defining Stock Rights*
5.1 Opinion of Counsel as to Legality of the Securities
Being Registered*
10.1 Stock Purchase and Distributors Agreement*
10.2 Deferred Compensation Agreement by and between the
Company and J. Terrell Wooten*
10.3 Lease Agreement*
10.4 Profit Sharing Plan for Employees of Company dated May 17, 1990*
10.5 Statutory Warranty Deed dated December 30, 1985 whereby
Registrant purchased 237 acres of land in Bessemer,
Alabama for future warehouse site*
10.6 Truck Lease and Service Agreement dated September 28, 1990*
10.7 Bill of Sale dated March 2, 1986 whereby BLM Enterprises
Inc., a wholly-owned subsidiary of the Registrant, sold the
Fayetteville, Tennessee store to Piggly Wiggly of
Fayetteville, Inc., a corporation principally owned by Merritt
Robbins, a Director and Secretary/Treasurer of the Registrant*
10.8 Warranty Deed dated May 14, 1986 whereby Registrant
purchased approximately 15 acres of land in Bessemer,
Alabama to be used as future warehouse site*
10.9 Inducement Agreement executed by and between Registrant
and The Industrial Development Board of the City of
Bessemer concerning the financing of the new warehouse in
Bessemer, Alabama*
10.10 Renewal of and Amendment to Inducement Agreement
executed by and between the Registrant and the Industrial
Development Board of the City of Bessemer*
10.11 Letter of agreement by and between Registrant and Brice
Building Company, Inc. concerning the site preparation
work for the new warehouse*
10.12 Lease by and between Registrant and Bruno's, Inc. concerning
the leasing of additional warehouse space adjacent to present
warehouse site*
10.13 Guaranty Agreement from Piggly Wiggly Alabama Distributing
Co., Inc. to Central Bank of the South, as Trustee,
guaranteeing the payment of Industrial Development Revenue
Bonds issued by the City of Bessemer, Bessemer, Alabama, in
the financing of the new distribution center*
10.14 Warranty Deed whereby Piggly Wiggly Alabama Distributing
Co., Inc. conveyed approximately 35 acres of real estate
situated in the City of Bessemer, Alabama to the Industrial
Development Board of the City of Bessemer to facilitate the
financing of the new Distribution Center*
10.15 Lease Agreement executed by and between the Industrial
Development Board of the City of Bessemer as lessor and
Piggly Wiggly Alabama Distributing Co., Inc. as lessee
whereby the new Distribution Center is being leased by the
Registrant*
10.16 Construction Contract by and between Industrial Development
Board and the City of Bessemer as owner and Brice Building
Co., Inc. as contractor guaranteed by Piggly Wiggly Alabama
Distributing Co., Inc. for the construction of the new
Distribution Center in Bessemer, Alabama*
10.17 Mortgage, Security Agreement and Assignment of Rents and
Leases (First) whereby Piggly Wiggly Alabama Distributing
Co., Inc. has executed a first mortgage to Central Bank of the
South on approximately 220 undeveloped acres of real estate
owned by the Registrant in Bessemer, Alabama as additional
security for the payment of the $20,000,000 bond issue*
10.18 Mortgage, Security Agreement and Assignment of Rents and
Leases (Second) executed by Piggly Wiggly Alabama
Distributing Co., Inc. in favor of Central Bank of the South
granting a second mortgage on the existing perishable
warehouse owned by the Registrant as additional security for
the repayment of the $20,000,000 bond issue*
10.19 Security Agreement executed by Piggly Wiggly Alabama
Distributing Co., Inc. in favor of Central Bank of the
South as additional security for payment of the $20,000,000
bond issue*
10.20 Amendment No. 1 to Deferred Compensation Agreement for
J. Terrell Wooten*
10.21 401(k) Plan dated December 20, 1990*
10.22 Agreement and Assignment by and between Piggly Wiggly
Alabama Distributing Co., Inc., R & D Foods, Inc.,
Piggly Wiggly of Atlanta, Inc., et al., dated effective
as of November 25, 1989*
10.23 Purchase and Sale Agreement by and between BLM Enterprises,
Inc. (a wholly-owned subsidiary of the Registrant) and Holder
Enterprises, Inc. dated April 20, 1990.*
10.24 Amendment No. 1 to Guaranty Agreement from Piggly Wiggly
Alabama Distributing Co., Inc. to Central Bank of the South,
as Trustee, guaranteeing the payment of Industrial Development
Revenue Bonds issued to the City of Bessemer, Bessemer, Alabama,
in the amount of $20,000,000 which will be used to construct a
new Distribution Center*
10.25 Amended and Restated Deferred Compensation Agreement for
J. Terrell Wooten*
10.26 A copy of Profit Sharing Plan Registrant dated
September 9, 1993*
10.27 A copy of Purchase and Sale Agreement dated October 28, 1992
executed by Registrant and its solely owned subsidiary, BLM
Enterprises, Inc. concerning the sale of certain Atlanta,
Georgia retail grocery stores*
10.28 A copy of Revolving Credit and Security Agreement,
dated January 13, 1995, whereby the Registrant has obtained a
$10 million line of credit from Compass Bank in regard to
construction of an addition to existing Warehouse facilities**
10.29 A copy of a $10 million Master Revolving Promissory Note,
dated January 13, 1995, executed by Registrant to Compass
Bank, the proceeds of which will be used in regard to
constructing and furnishing an addition to existing Warehouse**
10.30 A copy of Architect Agreement executed on behalf of Registrant
and Holmes & Holmes, Architect, dated June 16, 1994, concerning
new addition to Warehouse facilities**
10.31 First Supplemental Guaranty Agreement from Registrant to Compass
Bank, dated September 1, 1994, amending existing $20 million
Guaranty of Registrant to Compass Bank**
10.32 A copy of Amendment to The Industrial Development Board of the
City of Bessemer Industrial Development Revenue Bond (Piggly
Wiggly Alabama Distributing Co., Inc. Project (Series 1987)),
dated September 30, 1994**
10.33 A copy of First Supplemental Mortgage and Indenture of Trust
between The Industrial Development Board of the City of Bessemer
and Compass Bank, dated September 1, 1994, in regard to initial
$20 million Bond financing of Bessemer Warehouse Project**
10.34 A copy of First Amendment to the Piggly Wiggly Alabama
Distributing Co., Inc. Profit Sharing Plan and Trust, dated
September 29, 1994**
10.35 A copy of First Amendment to the Piggly Wiggly Alabama
Distributing Co., Inc. Employee Benefit Plan and Trust,
dated September 29, 1994**
10.36 A copy of Commercial Sales Contract whereby Registrant sold
its vacant Perishable Warehouse located at 601 Republic Circle,
Birmingham, Alabama for $750,000**
11.1 Computation of Earnings Per Share**
23.1 Consent of Spain & Gillon*
23.2 Consent of Dent, Baker & Company**
24.1 Power of Attorney executed by each member of the Board
of Directors authorizing D. T. Stewart, President and
Chief Executive Officer, to execute Registration
Statement**
FINANCIAL STATEMENT SCHEDULES
Schedule V Property and Equipment
Schedule VI Accumulated Depreciation
Schedule IX Short Term Borrowings
*Previously filed
**Filed herewith
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant has duly caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the
City of Bessemer, State of Alabama, on March 30, 1995.
PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC.
By: /s/ D. T. Stewart
D. T. Stewart
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of
1933, this registration statement has been signed by the
following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Julian Gordon by: D. T. Stewart Chairman of the Board March 30, 1995
Julian Gordon*
/s/ D. T. Stewart President and Chief March 30, 1995
D. T. Stewart Executive Officer
/s/ Bobby L. Martin Vice President of March 30, 1995
Bobby L. Martin Finance and Controller
/s/ James Salmon by: D. T. Stewart Vice Chairman of the March 30, 1995
James Salmon* Board and Director
/s/ Homer Vinson by: D. T. Stewart Secretary, Treasurer March 30, 1995
Homer Vinson* and Director
/s/ Harmon Looney by: D. T. Stewart Director March 30, 1995
Harmon Looney*
/s/ Mary Hardin by: D. T. Stewart Director March 30, 1995
Mary Hardin*
/s/ Louis Day by: D. T. Stewart Director March 30, 1995
Louis Day*
Director March 30, 1995
J. T. Milligan
/s/ Billy Huff by: D. T. Stewart Director March 30, 1995
Billy Huff*
/s/ Stanley Virciglio by: D. T. Stewart Director March 30, 1995
Stanley Virciglio*
<FN>
*Executed by D. T. Stewart pursuant to Power of Attorney filed as Exhibit 24.1
to this Registration Statement and incorporated herein by reference.
</TABLE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Form S-1
Registration Statement of Piggly Wiggly Alabama Distributing Co., Inc.
of our report dated September 23, 1994, included in the 1994 Annual
Report to Shareholders of Piggly Wiggly Alabama Distributing Co.,
Inc.
Our audit also included the financial statement schedules of
Piggly Wiggly Alabama Distributing Co., Inc. listed in the accompanying
index to the financial statements. These schedules are the responsibility
of the Company's management. Our responsibility is to express an opinion
based on our audits. In our opinion, the financial statement schedules
referred to above, when considered in relation to the basic financial
statements taken as a whole, present fairly in all material respects the
information set forth therein.
DENT, BAKER & COMPANY
Birmingham, Alabama
October 6, 1994
<TABLE>
SCHEDULE V
PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC.
AND SUBSIDIARIES
Property and Equipment
<CAPTION>
Other
Balance at Changes Balance
Beginning Additions (Add) at End
Classification of Period at Cost Retirements (Deduct) of Period
-------------- ---------- -------- ----------- -------- --------
<S> <C> <C> <C> <C> <C>
At July 31, 1992
Land $ 365,882 $ -- $ -- $ -- $ 365,882
Buildings and
improvements 17,772,680 -- -- -- 17,772,680
Equipment 11,723,604 607,094 29,945 -- 12,300,753
----------- ---------- ---------- -------- ----------
Totals $29,862,166 $ 607,094 $ 29,945 $ -- $30,439,315
----------- ---------- ---------- -------- ----------
----------- ---------- ---------- -------- ----------
At July 30, 1993
Land $ 365,882 $ -- $ -- $ -- $ 365,882
Buildings and
improvements 17,772,680 -- 34,222 -- 17,738,458
Equipment 12,300,753 745,698 2,996,427 -- 10,050,024
----------- ---------- ---------- -------- ----------
Totals $30,439,315 $ 745,698 $3,030,649 $ -- $28,154,364
----------- ---------- ---------- -------- ----------
----------- ---------- ---------- -------- ----------
At July 29, 1994
Land $ 365,882 $ -- $ 123,813 $ -- $ 242,069
Buildings and
improvements 17,738,458 5,030 1,618,365 -- 16,125,123
Equipment 10,050,024 732,058 421,675 -- 10,360,407
----------- ---------- ---------- -------- ----------
Totals $28,154,364 $ 737,088 $2,163,853 $ -- $26,727,599
----------- ---------- ---------- -------- ----------
----------- ---------- ---------- -------- ----------
</TABLE>
The additions for the year ended July 29, 1994 include
approximately $400,000 of normal replacements and approximately
$337,000 of nonrecurring equipment purchases. The retirements for
the year ended July 29, 1994 include the sale of a perishable foods
warehouse and real estate with an original cost of approximately
$1,618,000 and $123,800, respectively.
The additions for the year ended July 30, 1993 include
approximately $400,000 of normal replacements and approximately
$345,000 of nonrecurring equipment purchases. The retirements for
the year ended July 30, 1993 include a retirement of fully
depreciated equipment no longer used in the wholesale trade with an
original cost of approximately $1,475,000 and the sale of the
retail operating assets with an original cost of approximately
$1,412,000.
The additions for the year ended July 30, 1992 include
approximately $400,000 of normal replacements and additions and
approximately $200,000 of nonrecurring retail operation equipment
purchases.
A summary of property and equipment and accumulated
depreciation at July 29, 1994 and July 30, 1993 is as follows:
<TABLE>
<CAPTION>
1994
----------------------------------------------
Accumulated
Cost Depreciation Net
----------- ------------ -----------
<S> <C> <C> <C>
Land $ 242,069 $ -- $ 242,069
Buildings and improvements 16,125,123 2,883,751 13,241,372
Equipment 10,360,407 6,133,161 4,227,246
----------- ---------- -----------
Totals $26,727,599 $9,016,912 $17,710,687
----------- ---------- -----------
----------- ---------- -----------
1993
----------------------------------------------
Accumulated
Cost Depreciation Net
----------- ------------ ------------
Land $ 365,882 $ -- $ 365,882
Buildings and improvements 17,738,458 3,583,588 14,154,870
Equipment 10,050,024 5,582,578 4,467,446
----------- ---------- -----------
Totals $28,154,364 $9,166,166 $18,988,198
----------- ---------- -----------
----------- ---------- -----------
</TABLE>
Depreciation on buildings and improvements is determined under
the straight-line method over the estimated useful life of the
buildings and improvements. Substantially all other assets are
depreciated under accelerated and straight-line methods over the
estimated useful lives of the assets.
Estimated useful lives of the assets are as follows:
Buildings and improvements 25-35 years
Machinery and equipment 5-10 years
Automobiles 3-5 years
<TABLE>
Capital Lease Property
<CAPTION>
Other
Balance at Changes Balance
Beginning Additions (Add) at End
Description of Period at Cost Retirements (Deduct) of Period
----------- ---------- -------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C>
At July 31, 1992
Leased property under
capital leases $2,626,932 $ -- $ -- $ -- $2,626,932
---------- -------- ---------- -------- ----------
---------- -------- ---------- -------- ----------
At July 30, 1993
Leased property under
capital leases $2,626,932 $ -- $ -- $ -- $2,626,932
---------- -------- ---------- -------- ----------
---------- -------- ---------- -------- ----------
At July 29, 1994
Leased property under
capital leases $2,626,932 $ 702,416 $ 424,832 $ -- $2,904,516
---------- ---------- ---------- -------- ----------
---------- ---------- ---------- -------- ----------
</TABLE>
Leased property under capital leases, consists of tractors
used for the delivery of merchandise, which are leased generally
for a five year term. The acquisitions during the year ended July
29, 1994 were the result of entering into a new capital lease for
11 tractors during the year. The retirements result from the
expiration of the lease term of 8 tractors.
Assets carried on the balance sheets under the heading of
leased property under capital leases at July 29, 1994 and July 30,
1993 are summarized as follows:
Class of Property 1994 1993
---------- ----------
Delivery vehicles $2,904,516 $2,626,932
Less: amortization 1,793,634 1,601,877
---------- ----------
Net leased property
under capital leases $1,110,882 $1,025,055
---------- ----------
---------- ----------
Amortization charged to expense for each of the three fiscal
years included in the period ended July 29, 1994 is as follows:
1994 1993 1992
-------- -------- --------
Total amortization $564,368 $525,384 $525,385
-------- -------- --------
-------- -------- --------
<TABLE>
SCHEDULE VI
PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC.
AND SUBSIDIARIES
Accumulated Depreciation
<CAPTION>
Additions
Balance at Charged to Other Balance
Beginning Costs and Changes at End
Description of Period Expenses Retirements Add (Deduct) of Period
---------- ---------- ---------- ---------- ------------ --------
<S> <C> <C> <C> <C> <C>
At July 31, 1992
Buildings and
improvements $2,577,945 $ 515,848 $ -- $ -- $3,093,793
Equipment 5,660,606 1,083,242 29,731 -- 6,714,117
---------- ---------- ---------- -------- ----------
Totals $8,238,551 $1,599,090 $ 29,731 $ -- $9,807,910
---------- ---------- ---------- -------- ----------
---------- ---------- ---------- -------- ----------
At July 30, 1993
Buildings and
improvements $3,093,793 $ 526,031 $ 36,236 $ -- $3,583,588
Equipment 6,714,117 940,210 2,071,749 -- 5,582,578
---------- ---------- ---------- -------- ----------
Totals $9,807,910 $1,466,241 $2,107,985 $ -- $9,166,166
---------- ---------- ---------- -------- ----------
---------- ---------- ---------- -------- ----------
At July 29, 1994
Buildings and
improvements $3,583,588 $ 502,253 $1,202,090 $ -- $2,883,751
Equipment 5,582,578 937,027 386,444 -- 6,133,161
---------- ---------- ---------- -------- ----------
Totals $9,166,166 $1,439,280 $1,588,534 $ -- $9,016,912
---------- ---------- ---------- -------- ----------
---------- ---------- ---------- -------- ----------
Accumulated Amortization -- Capital Lease Property
Leased property under
capital leases - tractors
At July 31, 1992
Accumulated
amortization $ 551,108 $ 525,385 $ -- $ -- $1,076,493
---------- ---------- ---------- -------- ----------
---------- ---------- ---------- -------- ----------
At July 30, 1993
Accumulated
amortization $1,076,493 $ 525,384 $ -- $ -- $1,601,877
---------- ---------- ---------- -------- ----------
---------- ---------- ---------- -------- ----------
At July 29, 1994
Accumulated
amortization $1,601,877 $ 564,368 $ 372,611 $ -- $1,793,634
---------- ---------- ---------- -------- ----------
---------- ---------- ---------- -------- ----------
</TABLE>
<TABLE>
SCHEDULE IX
PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC.
AND SUBSIDIARIES
Short-Term Borrowings
Years ended July 29, 1994, July 30, 1993 and July 31, 1992
<CAPTION>
Maximum Average Weighted
Amount Amount Average
Balance at Weighted Outstanding Outstanding Interest Rate
End of Average During the During the During the
Category Period Interest Rate Period Period Period
-------- ---------- ------------ ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
At July 31, 1992
Debentures payable $100,000 5.40% (a) $100,000 (a) $100,000 (a) 5.40% (a)
Bank line of credit $ -- -- % (a) $ -- (a) $ -- (a) -- % (a)
At July 30, 1993
Debentures payable $100,000 5.40% (a) $100,000 (a) $100,000 (a) 5.40% (a)
Bank line of credit $ -- -- % (a) $ -- (a) $ -- (a) 6.00% (a)
At July 29, 1994
Debentures payable $100,000 6.50% (a) $100,000 (a) $100,000 (a) 5.75% (a)
Bank line of credit $ -- -- % (a) $ -- (a) $ -- (a) 7.75% (a)
<FN>
(a) Computed on a month end basis
</TABLE>
The debentures payable represent short-term loans to the
Company by operators. The debentures bear interest at 90% of the
bank prime rate for amounts $100,000 or more and at 80% of the bank
prime rate for amounts under $100,000. The debentures are payable
on demand; however, there is a partial interest forfeiture for
debentures presented for payment within six months of issue. The
interest rate on the debentures at July 29, 1994 was approximately
6.5%.
The notes payable - bank line of credit represent draws
against the Company's $2,500,000 line of credit. The line bears
interest at the bank's prime rate. The line and any other debts to
the Company's lead bank are cross-collateralized with the
Industrial Revenue Bonds and are secured by substantially all
assets of the Company.
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Number Description Page
-------------- ---------- ----
<S> <C> <C>
2.1 Plan of Corporation Recapitalization*
3.1 Restatement of Articles of Incorporation*
3.2 Amendment to Certificate of Incorporation*
3.3 Restatement of By-Laws with amendments as amended
through September 30, 1992*
4.1 Equalization and Stock Redemption Policy*
4.2 Specimen Common Stock Certificate*
4.3 Excerpt from Restatement of Articles of Incorporation
Defining Stock Rights*
4.4 Excerpts from Restatement of By-Laws Defining Stock Rights*
5.1 Opinion of Counsel as to Legality of the Securities
Being Registered*
10.1 Stock Purchase and Distributors Agreement*
10.2 Deferred Compensation Agreement by and between the
Company and J. Terrell Wooten*
10.3 Lease Agreement*
10.4 Profit Sharing Plan for Employees of Company
dated May 17, 1990*
10.5 Statutory Warranty Deed dated December 30, 1985
whereby Registrant purchased 237 acres of land in Bessemer,
Alabama for future warehouse site*
10.6 Truck Lease and Service Agreement dated September 28, 1990*
10.7 Bill of Sale dated March 2, 1986 whereby BLM Enterprises
Inc., a wholly-owned subsidiary of the Registrant, sold the
Fayetteville, Tennessee store to Piggly Wiggly of Fayetteville,
Inc., a corporation principally owned by Merritt Robbins, a
Director and Secretary/Treasurer of the Registrant*
10.8 Warranty Deed dated May 14, 1986 whereby Registrant
purchased approximately 15 acres of land in Bessemer,
Alabama to be used as future warehouse site*
10.9 Inducement Agreement executed by and between Registrant
and The Industrial Development Board of the City of
Bessemer concerning the financing of the new warehouse in
Bessemer, Alabama*
10.10 Renewal of and Amendment to Inducement Agreement
executed by and between the Registrant and the Industrial
Development Board of the City of Bessemer*
10.11 Letter of agreement by and between Registrant and Brice
Building Company, Inc. concerning the site preparation
work for the new warehouse*
10.12 Lease by and between Registrant and Bruno's, Inc. concerning
the leasing of additional warehouse space adjacent to present
warehouse site*
10.13 Guaranty Agreement from Piggly Wiggly Alabama Distributing
Co., Inc. to Central Bank of the South, as Trustee,
guaranteeing the payment of Industrial Development Revenue
Bonds issued by the City of Bessemer, Bessemer, Alabama, in
the financing of the new distribution center*
10.14 Warranty Deed whereby Piggly Wiggly Alabama Distributing
Co., Inc. conveyed approximately 35 acres of real estate
situated in the City of Bessemer, Alabama to the Industrial
Development Board of the City of Bessemer to facilitate the
financing of the new Distribution Center*
10.15 Lease Agreement executed by and between the Industrial
Development Board of the City of Bessemer as lessor and
Piggly Wiggly Alabama Distributing Co., Inc. as lessee whereby
the new Distribution Center is being leased by the Registrant*
10.16 Construction Contract by and between Industrial Development
Board and the City of Bessemer as owner and Brice Building
Co., Inc. as contractor guaranteed by Piggly Wiggly Alabama
Distributing Co., Inc. for the construction of the new
Distribution Center in Bessemer, Alabama*
10.17 Mortgage, Security Agreement and Assignment of Rents and
Leases (First) whereby Piggly Wiggly Alabama Distributing
Co., Inc. has executed a first mortgage to Central Bank of the
South on approximately 220 undeveloped acres of real estate
owned by the Registrant in Bessemer, Alabama as additional
security for the payment of the $20,000,000 bond issue*
10.18 Mortgage, Security Agreement and Assignment of Rents and
Leases (Second) executed by Piggly Wiggly Alabama
Distributing Co., Inc. in favor of Central Bank of the South
granting a second mortgage on the existing perishable
warehouse owned by the Registrant as additional security for
the repayment of the $20,000,000 bond issue*
10.19 Security Agreement executed by Piggly Wiggly Alabama
Distributing Co., Inc. in favor of Central Bank of the South as
additional security for payment of the $20,000,000 bond issue*
10.20 Amendment No. 1 to Deferred Compensation Agreement
for J. Terrell Wooten*
10.21 401(k) Plan dated December 20, 1990*
10.22 Agreement and Assignment by and between Piggly Wiggly
Alabama Distributing Co., Inc., R & D Foods, Inc.,
Piggly Wiggly of Atlanta, Inc., et al., dated effective as of
November 25, 1989*
10.23 Purchase and Sale Agreement by and between BLM
Enterprises, Inc. (a wholly-owned subsidiary of the Registrant)
and Holder Enterprises, Inc. dated April 20, 1990.*
10.24 Amendment No. 1 to Guaranty Agreement from Piggly Wiggly
Alabama Distributing Co., Inc. to Central Bank of the South,
as Trustee, guaranteeing the payment of Industrial Development
Revenue Bonds issued to the City of Bessemer, Bessemer, Alabama,
in the amount of $20,000,000 which will be used to
construct a new Distribution Center*
10.25 Amended and Restated Deferred Compensation Agreement for
J. Terrell Wooten*
10.26 A copy of Profit Sharing Plan Registrant dated
September 9, 1993*
10.27 A copy of Purchase and Sale Agreement dated October 28, 1992
executed by Registrant and its solely owned subsidiary, BLM
Enterprises, Inc. concerning the sale of certain Atlanta, Georgia
retail grocery stores*
10.28 A copy of Revolving Credit and Security Agreement, dated
January 13, 1995, whereby the Registrant has obtained a
$10 million line of credit from Compass Bank in regard to
construction of an addition to existing Warehouse facilities**
10.29 A copy of a $10 million Master Revolving Promissory Note, dated
January 13, 1995, executed by Registrant to Compass Bank, the
proceeds of which will be used in regard to constructing and
furnishing an addition to existing Warehouse**
10.30 A copy of Architect Agreement executed on behalf of Registrant
and Holmes & Holmes, Architect, dated June 16, 1994, concerning
new addition to Warehouse facilities**
10.31 First Supplemental Guaranty Agreement from Registrant to
Compass Bank, dated September 1, 1994, amending existing
$20 million Guaranty of Registrant to Compass Bank**
10.32 A copy of Amendment to The Industrial Development Board of the
City of Bessemer Industrial Development Revenue Bond (Piggly
Wiggly Alabama Distributing Co., Inc. Project (Series 1987)),
dated September 30, 1994**
10.33 A copy of First Supplemental Mortgage and Indenture of Trust
between The Industrial Development Board of the City of Bessemer
and Compass Bank, dated September 1, 1994, in regard to initial
$20 million Bond financing of Bessemer Warehouse Project**
10.34 A copy of First Amendment to the Piggly Wiggly Alabama
Distributing Co., Inc. Profit Sharing Plan and Trust, dated
September 29, 1994**
10.35 A copy of First Amendment to the Piggly Wiggly Alabama
Distributing Co., Inc. Employee Benefit Plan and Trust, dated
September 29, 1994**
10.36 A copy of Commercial Sales Contract whereby Registrant sold its
vacant Perishable Warehouse located at 601 Republic Circle,
Birmingham, Alabama for $750,000**
11.1 Computation of Earnings Per Share**
23.1 Consent of Spain & Gillon*
23.2 Consent of Dent, Baker & Company**
24.1 Power of Attorney executed by each member of the Board
of Directors authorizing D. T. Stewart, President and
Chief Executive Officer, to execute Registration
Statement**
<FN>
*Previously filed
**Filed herewith
</TABLE>
EXHIBIT 10.28
REVOLVING CREDIT AND SECURITY AGREEMENT
This Revolving Credit and Security Agreement (as may be
amended, this "Agreement") is executed and delivered this ----- day
of -----, 19--- by and between PIGGLY WIGGLY ALABAMA DISTRIBUTING
CO., INC., an Alabama corporation ("Borrower"), with its chief
executive office and its principal place of business at 2400 J.
Terrell Wooten Drive, Bessemer, Alabama 35201, and COMPASS BANK, an
Alabama banking corporation ("Bank"), with its principal place of
business at 15 South 20th Street, Birmingham, Alabama 35233.
Borrower has applied to Bank for a revolving line of credit not to
exceed an aggregate principal amount at any one time outstanding
the sum of TEN MILLION AND NO/100 DOLLARS ($10,000,000.00) (the
"Revolving Line") to be evidenced by a Master Revolving Promissory
Note (the "Note") in such amount and to be secured by a security
interest in all of the Collateral (as defined herein) on the terms
hereinafter set forth.
Bank is willing to extend the Revolving Line to Borrower up to
an aggregate principal amount not in excess of the amount set forth
above upon the security of the Collateral on the terms and subject
to the conditions hereinafter set forth to refinance some of the
Borrower's existing indebtedness and to provide Borrower with
ordinary working capital.
Accordingly, Borrower and Bank in consideration of the
premises, the credit to be extended hereunder, and other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, agree as follows:
SECTION 1. Definitions - as herein used.
1.1 "Account" and "Account Receivable" shall include all
accounts, accounts receivable, notes receivable, contracts rights,
retail installment sales contracts, drafts, documents, title
retention and lien instrument, security agreements, acceptances,
instruments, conditional sales contracts, chattel mortgages,
chattel paper, general intangibles, and other forms of obligation
and rights to payment and receivables whether or not yet earned by
performance, including, without limitation, state and federal tax
refunds.
1.2 "Account Debtor" shall mean the party who is obligated on
or under any Account Receivable.
1.3 "Bond Guaranty Agreement" means that certain Guaranty
Agreement from Borrower to Central Bank of the South (now Compass
Bank), as Trustee relating to $20,000,000 Industrial Development
Revenue Bond, City of Bessemer Industrial Revenue Board (Piggly
Wiggly Alabama Distributing Co., Inc. Project) Series 1987, as
amended September 1, 1994, and as the same may be hereafter amended
by written agreement of the parties thereto.
1.4 "Borrower's Loan Account" shall mean the account on
the books of Bank in which Bank will record loans and other
advances made by the Bank to or on behalf of Borrower pursuant to
this agreement, payments received on such loans and advances and
other appropriate debits and credits as provided by this Agreement
or any of the other Loan Documents.
1.5 "Collateral" shall mean any and all property in which Bank
acquired, now has, by this Agreement or any of the other Loan
Documents (as defined herein) acquires, or hereafter acquires a
security interest or other rights or interests as security for the
Liabilities (as defined herein).
1.6 "Insolvency" of Borrower or any other person or entity
shall mean that there shall have occurred with respect to Borrower
or such other person or entity one or more of the following events:
dissolution, termination of existence, liquidation, insolvency,
business failure, appointment of a receiver of any part of the
property of, assignment for the benefit of creditors by or against
Borrower or such other person or entity, or institution of any
action or proceeding with respect to Borrower or such other person
or entity under or pursuant to any insolvency laws relating to the
relief of debtors by or against Borrower or such other person or
entity, institution of proceedings in bankruptcy or with respect to
the readjustment of indebtedness, reorganization, composition or
extension by or against Borrower or such other person or entity
(including), without limitation, under or pursuant to the United
States Bankruptcy Code, as amended, or under any similar law at any
time enacted), or if any corporate action shall be taken for the
purpose of effecting any of the foregoing.
1.7 "Inventory" shall mean all of Borrower's inventory (as
defined in the Uniform Commercial Code as enacted in the State of
Alabama, or in any other jurisdiction), including, without
limitation, all finished goods, other goods, merchandise and other
personal property now owned or hereafter acquired by Borrower which
are held for sale, lease, or rental or are furnished or to be
furnished under a contract of service and all raw materials, work
in process, component parts, materials or supplies used or to be
used, or consumed or to be consumed, in Borrower's business, and
related products and all goods represented thereby, wherever
located, and all such goods that may be reclaimed or repossessed
from or returned by Borrower's customers, and all shipping and
packaging materials relating to any of the foregoing.
1.8 "Liabilities" shall mean any and all obligations,
indebtedness and liabilities of Borrower to Bank of every kind and
description, whether direct or indirect, absolute or contingent,
joint or several, due or to become due, liquidated or unliquidated,
now existing or hereafter arising, and all extensions,
modifications, renewals, and refinancings thereof, regardless of
how such Liabilities arise or by what agreement or instrument (if
any) they may be evidenced and include obligations to perform acts
and refrain from taking actions as well as obligations to pay
money. Without limiting the foregoing, Liabilities shall
specifically include all liabilities and obligations of Borrower
hereunder and the obligation to repay the indebtedness evidenced by
the Note.
1.9 "Loan Documents" shall mean and include the Note, this
Agreement and any other agreement, document or instrument now or
hereafter evidencing, securing, guaranteeing or relating to the
Revolving Line or any of the other Liabilities, obligations or
indebtedness of Borrower to Bank, as the same may be amended.
1.10 "Permitted Liens" shall mean any of the following:
(a) liens of carriers, warehousemen, landlords, mechanics,
laborers and materialmen arising by law for sums which are (i) not
yet due or (ii) being diligently contested in good faith and with
respect to which Borrower has set aside sufficient reserves with
Bank; and
(b) liens for taxes which are (i) not yet due or (ii) being
diligently contested in good faith by appropriate proceedings and
with respect to which Borrower has set aside sufficient reserves
with Bank.
1.11 Any terms used to describe Bank's security interest
hereunder not specifically defined herein shall have the meanings
and definitions given those terms under the Uniform Commercial Code
of Alabama as in effect on the date hereof.
SECTION 2. Borrower's Representations and Warranties; Certain
Covenants.
To induce Bank to enter into this Agreement, Borrower
represents, warrants and covenants as follows:
2.1 Borrower (a) is a duly organized Alabama corporation,
validly existing, and in good standing under the laws of the State
of Alabama; (b) has all necessary licenses and corporate power and
authority to own its assets and conduct its business as now
conducted or presently proposed to be conducted; (c) has no
subsidiaries other than Miller Grocery Company, Inc. and BLM
Enterprises, Inc.; and (c) is duly qualified and in good standing
(and will remain so qualified and in good standing) in every
jurisdiction in which it is or shall be doing business or in which
the failure so to qualify and remain in good standing would or
could have an adverse effect on its business or properties, the
Collateral or Bank.
2.2 The execution, delivery, and performance hereof are within
Borrower's corporate powers, have been duly and validly authorized
and are not in contravention of the law or the terms of Borrower's
charter, by-laws, or other incorporation papers, or of any
indenture, agreement, or undertaking or any law, regulation or
order to which Borrower is a party or by which it or any of its
properties is or may be bound. Upon execution and delivery hereof,
this Agreement will be a valid and binding obligation of Borrower
enforceable in accordance with its terms. This Agreement, the Note
and all other Loan Documents executed by Borrower have been validly
executed and delivered by Borrower and constitute legal, valid, and
binding obligations of Borrower enforceable against Borrower in
accordance with their respective terms, except as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, or
similar laws as the time in effect affecting the rights of
creditors generally.
2.3 Except for the Permitted Liens and the security
interests granted to Bank hereby or by any of the other Loan
Documents in favor of Bank, Borrower is and, as to Accounts
Receivables, Inventory and other Collateral arising or to be
acquired after the date hereof, shall be the sole and exclusive
owner of the Accounts, the Inventory, and each and every other item
of Collateral free from any lien, claim, charge, security interest,
mortgage, secondary financing or encumbrance, and Borrower shall
defend the Accounts, the Inventory, and each and every other item
of Collateral and all Proceeds and products thereof against all
claims and demands of all persons at any time claiming the same or
any interest therein adverse to the interests of Bank.
2.4 Borrower will promptly pay all taxes or charges levied on
or with respect to, and will at all times keep the Accounts, the
Inventory, and each and every other item of Collateral, free and
clear of all liens, claims, charges, security interests, mortgages,
secondary financing and encumbrances whatsoever, other than the
Permitted Liens and the security interests granted to Bank hereby
or by any of the other Loan Documents. Borrower agrees to take all
actions that Bank may request to establish and maintain a valid
title and security interest in the Accounts and each and every
other item of Collateral and the Inventory, free and clear of all
other liens, claims, charges, security interests, mortgages,
secondary financing and encumbrances whatsoever (other than the
Permitted Liens), including, without limitation, the payment of any
amounts, taxes, assessments, fees and/or charges necessary to
perfect and note Bank's interest in the same. If such amounts,
taxes, assessments, fees and/or charges remain unpaid after the
date fixed for the payment of same, or if any lien, claim, charge,
security interest, mortgage, secondary financing or encumbrances
shall arise, or be claimed or asserted with respect to the
Accounts, the Inventory, or any other item of Collateral, Bank may,
without notice to Borrower, pay such taxes, assessments, charges or
claims, or take any and all other actions (including the payment of
money) deemed desirable by Bank to remove any such lien, claim,
charge, security interest, mortgage, secondary financing or
encumbrance, and Borrower agrees that the amounts thereof, along
with any amounts necessary to perfect and note Bank's interest in
any Collateral, shall be charged to Borrower's Loan Account
described herein and shall bear interest at the rate of interest
borne by Borrower's obligations under the Note.
2.5 Borrower will not ( and will not allow or suffer any other
person or entity to ) sell (except for the sale of Inventory in the
normal and ordinary course of Borrower's business), transfer,
lease, convey or otherwise dispose of the Collateral, any portion
thereof, or any interest therein (or any of the Proceeds thereof,
including, without limitation, money, checks, money orders, drafts,
notes, instruments, chattel paper, Accounts, returns or
repossessions), without Bank's prior written consent.
2.6 At the time any Account becomes subject to a security
interest in favor of Bank, said Account shall be good and valid
Account representing an undisputed, bona fide indebtedness incurred
by the Account Debtor named therein, for merchandise held subject
to delivery instructions or theretofore shipped or delivered
pursuant to a contract of sale; or for services theretofore
performed by Borrower with or for said Account Debtor; there shall
be no set-offs, counterclaims, or disputes against any such Account
except as indicated in some written list, statement or invoice
furnished to Bank with reference thereto; and Borrower shall be the
lawful owner of all such Accounts and shall have good right to
subject the same to a security interest in favor of bank. No such
Account shall be sold, assigned, or transferred to any person other
than Bank or in any way encumbered except to Bank, and Borrower
shall defend the same against the lawful claims and demands of all
persons other than Bank.
2.7 At the time Borrower pledges, sells, assigns or transfers
to Bank any instrument, document of title, security, chattel paper
or other property, or any interest therein, Borrower shall be the
lawful owner thereof and shall have good right to pledge, sell,
assign or transfer the same; none of such property shall have been
pledged, sold, assigned or transferred to any person other than
Bank or in any way encumbered (except for the Permitted Liens), and
Borrower shall defend the same against the lawful claims and
demands of all persons other than Bank.
2.8 All records of Borrower pertaining to Accounts Receivable,
general intangibles and contract rights are and shall be kept at
Borrower's chief executive office as noted on the first page of
this Agreement.
2.9 Subject to any limitations and stated therein or in
connection therewith, all balance sheets, earnings statements and
other financial data which have been or may hereafter be furnished
to Bank to induce it to enter into this Agreement to extend credit
from time to time hereunder, or otherwise furnished in connection
herewith, do or shall fairly represent the financial condition of
Borrower (or other persons or entities, as applicable) as of the
dates and results of operations for the periods for which the same
are furnished in accordance with generally accepted accounting
principles consistently applied, and all other information, reports
and other papers and data furnished to Bank shall be accurate, as
of the relevant date, and correct in all material respects and
complete insofar as completeness may be necessary to give Bank a
true and accurate knowledge of the subject matter.
2.10 With respect to any and all equipment which may now or
hereafter constitute Collateral hereunder, Borrower shall maintain
possession of same, keep the same in good repair, and maintain
casualty insurance on the same naming Bank as lender loss payee
under a New York (long-form) standard mortgagee endorsement.
2.11 Borrower's name, chief executive office and principal
place of business are and always have been as set forth on the
first page of this Agreement, except as otherwise disclosed in
writing to Bank. Borrower will promptly advise Bank in writing of
any change in Borrower's name, chief executive office or principal
place of business.
2.12 Borrower is not now in default under any agreement
evidencing an obligation for the payment of money, performance of
a service or delivery of goods, demand for performance under which,
or acceleration of the maturity of which would render Borrower
insolvent or unable to meet its other debts as they become due or
conduct its business as usual.
2.13 In the event (a) any of Borrower's warranties or
representations shall prove to be false or misleading; (b) any
Account Debtor in judicial proceeding, shall assert against Bank or
any of its officers, employees, directors or agents a claim or
defense arising out of any transaction between the Account Debtor
and Borrower; or (c) Borrower or any other person or entity shall
assert against Bank or any of its officers, employees, directors or
agents a claim or defense arising out of or relating to any of the
Liabilities or any of the Loan Documents, Borrower agrees to
indemnify and hold Bank harmless from and against any liability,
judgment, cost, attorneys' fees or other expense whatsoever arising
therefrom.
2.14 Borrower will pay any and all taxes (with the exception
of taxes measured by income) charges and expenses of every kind or
description paid or incurred by Bank under or with respect to the
Revolving Line, the Loan Documents, any advances hereunder or any
Collateral thereof or the collection of a realization upon the
same. Borrower hereby authorizes Bank to debit such and all other
taxes, charges and expenses provided for in this Agreement
(including, without limitation, those taxes, charges and expenses
for which Borrower is liable hereunder) to Borrower's Loan Account.
2.15 There are no judgments, actions, suits, claims,
proceedings or investigations existing, outstanding, pending, or to
the best of Borrower's knowledge after due injury, threatened or in
prospect, before any court, agency or tribunal, or governmental
authority against or involving Borrower which do or could
materially affect the business, properties, prospects, financial
condition, earnings, results of operations or earnings capacity of
Borrower or any guarantor or which question the validity of the
Revolving Line or any of the Loan Documents, or any action or
instrument contemplated by any of them.
2.16 Borrower is not engaged in the business of extending
credit for the purpose of purchasing or carrying "margin" stock
within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System (12 C.F.R. Part 221), as amended from time
to time. Borrower 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.
2.17 Neither this Agreement, nor any document, certificate, or
statement furnished (or to be furnished) to Bank by or on behalf of
Borrower pursuant to or in connection with this Agreement contains
(or will contain) any untrue statement of a material fact or omits
(or will omit) to state a material fact necessary to make the
statements contained herein and therein not misleading. There is no
fact known to Borrower that materially and adversely affects, or
will materially and adversely affect, the assets, business,
operations, or condition of Borrower that has not been specifically
set forth in this Agreement or otherwise disclosed by Borrower to
Bank in writing.
Nothing in this Section 2 shall be deemed to extend the
availability of the Revolving Line beyond the time noted in Section
13 hereof.
SECTION 3. Bank's Agreement to Make Advances
3.1 From the date hereof until November 1, 1997 (the "Maturity
Date"), or such future date to which the Maturity Date of the
Revolving Line may be extended (any such extension to be at Bank's
sole discretion and evidenced by a writing executed by Bank),
subject to the terms and conditions of this Agreement and
Borrower's performance of and compliance with each of the Loan
Documents, and so long as no event of default (including, without
limitation, the breach of any warranty or representation) hereunder
or under any of the other Loan Documents shall have occurred or be
continuing, Bank agrees to extend to Borrower an open-end credit
line in an initial maximum amount at any time outstanding of
$10,000,000.00, which maximum amount shall be reduced on November
1, 1995 to $9,000,000.00 and on November 1, 1996 to $8,000,000.00.
If at any time Borrower is not entitled to any advances by the
terms of this Agreement, Bank may, in its sole discretion, make
requested advances; however, it is expressly acknowledged and
agreed that, in such event, Bank shall have the right, in its sole
discretion, to decline to make any request advance and to require
any payment required under the terms of the Agreement without prior
notice to Borrower and the making of any such advances shall not be
contrued as a waiver of such right by Bank.
3.2 All borrowings/advances under the Revolving Line shall be
evidenced by the Note and by entering such borrowings/ advances as
debits to Borrower's Loan Account. Bank shall also record in
Borrower's Loan Account all other charges, expenses and items
properly chargeable to Borrower hereunder, all payments made by
Borrower on account of indebtedness under the Revolving Line and
other appropriate debits and credits. The debit balance of
Borrower's Loan Account shall reflect the amount of Borrower's
indebtedness to Bank from time to time hereunder.
3.3 In the event that the availability of the Revolving Line
hereunder expires by the terms of this Agreement, or by the terms
of any agreement extending the Maturity Date of the Revolving Line,
Bank may, in its sole discretion, make requested advances; however,
it is expressly acknowledged and agreed that, in such event, Bank
shall have the right, in its sole discretion, to decline to make
any requested advance and may require payment in full of Borrower's
Loan Account at any time without prior notice to Borrower and the
making of any such advances shall not be construed as a waiver of
such right by Bank.
Nothing in this Section 3 shall be deemed to extend the
availability of the Revolving Line beyond the time noted in Section
13 hereof.
SECTION 4. Inspection of Records; Further Assurance
Borrower shall at reasonable times and from time to time allow
Bank, by or through any of its officers, agents, employees,
attorneys or accountants to (i) examine, inspect and make extracts
from Borrower's books and records; (ii) analyze Borrower's
financial statements; (iii) arrange for verification of Borrower's
Accounts Receivable under reasonable procedures, directly with
Account Debtors or by other methods; and (iv) inspect, review and
audit Borrower's Inventory and other Collateral at any time during normal
business hours, without prior notice to Borrower. Borrower shall allow,
do, make, execute and deliver all such additional and further acts,
things, deeds, assurances, agreements and instruments which Bank may
require more completely to vest in and assure to Bank its rights hereunder
and in any Collateral and to assure that Borrower's Loan Account Balance
does not exceed Borrower's availability hereunder. Nothing in this Section
4 shall be deemed to extend the availability of the Revolving Line beyond
the time noted in Section 13 hereof.
SECTION 5. Security Interest of Bank in Collateral.
5.1 As security for the payment and performance of all Liabilities,
Bank shall have and is hereby granted a continuing lien on, security
interest in and right of set-off against the following Collateral:
All of Borrower's:
(a) Accounts and Accounts Receivable;
(b) contract rights, chattel paper, notes, notes receivable,
instruments, and general intangibles; and
(c) proceeds of all the foregoing, whether now or hereafter,
owned, existing, created, arising or acquired.
5.2 No submission by Borrower to Bank of any schedule or other
particular identification of Collateral shall be necessary to vest in
Bank a security interest in each and every item of Collateral now existing
or hereafter created or acquired, but rather, such security interest shall
vest in Bank immediately upon the creation or acquisition of any item of
Collateral, without the necessity for any other or further action by
Borrower or Bank; provided, however, that Borrower shall execute such
other and additional documents, instruments and agreements as reasonably
may be required by Bank to evidence the security interests contemplated
hereby.
5.3 To the extent allowable under applicable law, the Uniform
Commercial Code of Alabama shall govern the security interests
provided for herein. In connection therewith, Borrower (at
Borrower's expense) shall take such steps and execute, deliver and
file (as applicable) (or cause the execution, delivery and filing
(as applicable) of such financing statements, continuation
statements, agreements (including, without limitation, security
agreements and landlord, creditor and mortgagee subordination
agreements), documents, and papers (all in form and substance
acceptable to Bank) as Bank may from time to time request to
perfect or preserve the perfection and priority of Bank's security
interests granted hereby or by any of the other Loan Documents.
Borrower hereby appoints and empowers Bank, or any employee of Bank
which Bank may designate for the purpose, as its attorney-in-fact,
to execute and/or endorse (and file, as appropriate) on its behalf
any documents, agreements, papers, checks, financing statements and
other documents which, in Bank's sole judgment, are necessary to be
executed and/or filed in order to (i) perfect or preserve the
perfection and priority of Bank's security interests granted hereby
or by any of the other Loan Documents and (ii) collect or realize
upon the Collateral or otherwise exercise its rights and remedies
under any of the Loan Documents or applicable law.
5.4 If, by reason of location of Borrower, the Collateral or
otherwise, the creation validity, or perfection of security
interests provided for herein are governed by law other than the
Uniform Commercial Code of Alabama, Borrower shall take such steps
and execute and deliver such documents, agreements, papers and
financing statements as Bank may from time to time request to
comply with the Uniform Commercial Code, the Uniform Trust Receipts
Act, the Factors Lien Act, or other laws of Alabama or other assets
or jurisdictions. Borrower hereby appoints and empowers Bank, or
any employee of Bank which Bank may designate for the purpose, as
its attorney-in-fact, to execute and/or endorse (and file, as
appropriate) on its behalf any documents, agreements, papers,
checks, financing statements and other documents which, in Bank's
sole judgment, are necessary to be executed and/or filed in order
to (i) perfect or preserve the perfection and priority of Bank's
security interests granted hereby or by any of the other Loan
Documents and (ii) collect or realize upon the Collateral or
otherwise exercise its rights and remedies under any of the Loan
Documents or applicable law.
5.5 Except for the Permitted Liens, Borrower shall not pledge,
mortgage, or create or suffer to exist a security interest in any
of the Collateral or any Proceeds thereof, or in the Inventory, or
sell, assign, or create a security interest in any of the
Collateral or any Proceeds thereof or in the Inventory in favor of
any person other than Bank.
Nothing in this Section 5 shall be deemed to extend the
availability of the Revolving Line beyond the time noted in Section
13 hereof.
SECTION 6. Collection of Accounts Receivable
6.1 Until Bank requests that Account Debtors on Accounts
Receivable of Borrower be notified of Bank's security interest
therein, Borrower shall continue to collect such Accounts
Receivable. Upon the occurrence of an event of default hereunder,
Borrower shall, at the request of Bank, notify the Account Debtors
of the security interest of Bank in any Account and shall instruct
Account Debtors to remit payments directly to Bank, and Bank may
itself so notify Account Debtors.
6.2 Borrower (i) shall (a) deliver any instrument or chattel
paper evidencing or constituting an Account to Bank, and (b) use
its best efforts to collect all of its Accounts in a commercially
reasonable manner; and (ii) agrees that no court action or other
legal proceeding or garnishment, attachment, repossession of
property, detinue, sequestration or any other attempt to repossess
any merchandise covered by an Account shall be attempted by
Borrower except by or under the direction of competent legal
counsel. Borrower hereby agrees to indemnify and hold Bank harmless
for any loss or liability of any kind or character which may be
asserted against Bank by virtue of any suit filed, process issued,
or any repossession or attempted repossession done or attempted by
Borrower or by virtue of any other actions or endeavors which
Borrower may make to collect any Accounts or repossess any such
merchandise.
Nothing in this Section 6 shall be deemed to extend the
availability of the Revolving Line beyond the time noted in Section
13 hereof.
SECTION 7. Additional Affirmative Covenants.
Until all indebtedness of Borrower to Bank has been paid in
full and all Liabilities have been satisfied:
7.1 Borrower shall submit or cause to be submitted to Bank (i)
Borrower's internally prepared quarterly financial statements
within forty-five (45) days after the close of each quarter in each
fiscal year including a balance sheet as of the close of such
period, an income statement, and such other statements containing
financial information which Bank reasonably may require, prepared
and analyzed in accordance with generally accepted accounting
principles and attested to by an authorized officer of Borrower;
(ii) Borrower's audited fiscal year-end financial statements (in
form and substance acceptable to Bank) with one hundred twenty
(120) days after the close of its fiscal year, including balance
sheets as of the close of such period, income statements,
reconciliations of stockholder's equity, statements of cash flows
and inventory valuations all certified by an independent certified
public accountant acceptable to Bank and analyzed in accordance
with generally accepted accounting principles; (iii) together with
each delivery of financial statements required above, the
certificate of Borrower signed by the president or other authorized
officer of Borrower stating that no event has occurred which
constitutes an event of default or would constitute an event of
default but for the requirement that notice be give, or time elapse
or both, under any loans, notes debentures, bonds, leases, or other
obligations of Borrower then outstanding, including, but not
limited to, this Agreement (such certificate shall publish the
accounting calculations used to determine compliance or
noncompliance with Borrower's financial obligations and financial
covenants, including those provided in this Agreement), or, if any
such event of default or defaults exists, specifying the nature
thereof; and (iv) such other financial and related information when
and as requested by Bank regarding Borrower.
7.2 Borrower shall (i) maintain insurance (written by
insurance companies acceptable to Bank) in form, amount and
substance acceptable to Bank, including, without limitation,
extended multi-peril hazard, worker's compensation, general
liability insurance and insurance upon Borrower's property, all
facets of its businesses and all the Collateral; (ii) furnish to
Bank, upon request, a statement of the insurance coverage; and
(iii) use its best efforts to protect and preserve the Collateral
and shall obtain other or additional insurance promptly, upon
request of Bank, to the extent that such insurance may be
available.
7.3 Borrower does and shall at all times while any Liabilities
remain unsatisfied comply with all applicable laws, ordinances,
rules and regulations of any governmental authority or entity
governing or affecting Borrower, any of its property, the
Collateral or any part thereof, shall immediately notify Bank of
any and all actual, alleged or asserted violations of any such
laws, ordinances, rules or regulations. Without limitation to the
generality of the foregoing, Borrower shall comply, and cause to be
complied with, all laws, governmental standards and regulations
applicable to Borrower or any Collateral in respect of occupational
health and safety, toxic and hazardous waste and substances and
environmental matters. Borrower promptly shall notify Bank of
receipt of any notice of any actual, alleged or asserted violations
of any such laws, standard or regulation. Borrower hereby agrees to
indemnify, defend and hold Bank harmless from all loss, cost,
damage, claim and expense incurred by Bank on account of Borrower's
breach of any representation, warranty or requirement of this
Section, Borrower's failure to perform the obligations of this
Section, and/or Borrower's or any Collateral's violating any
applicable laws, ordinances, rules or regulations, including,
without limitation, any environmental or occupational health and
safety laws or regulations. This indemnification shall survive the
closing of the Revolving Line, payment of the Revolving Line and
the exercise of any right or remedy under any of the Loan
Documents. Borrower represents that there are no pending claims or
threats of claims by private or governmental or administrative
authorities relating to environmental impairment, conditions, or
regulatory requirements involving Borrower or any Collateral.
7.4 Borrower shall comply with the provisions of Section 2.7
of the Bond Guaranty Agreement, the terms of which are hereby
expressly incorporated by this reference as part of this Agreement,
it being further agreed that this reference shall survive the
retirement of the bond referred to in the Bond Guaranty Agreement
and that the provisions of said Section 2.7 shall continue
thereafter to constitute part of this Agreement.
7.5 In consideration of Bank's commitment to set aside funds
sufficient to make advances on the Revolving Line and Bank's
incurring certain administrative expenses, Borrower agrees to and
shall pay to Bank (i) on the date hereof of a $12,500.00
commitment/Administrative fee and (ii) quarterly (or more often as
may be required by the terms below), in arrears, a nonusage fee
(calculated as set forth below on the basis of a 360-day year)
beginning to accrue on the date hereof with the first payment due
on December 31, 1994, and payments thereafter due on the first day
of each succeeding calendar quarter (and on the Maturity Date (or
on any other date when advances under the Revolving Line are
terminated and the amount outstanding under the Revolving Line is
paid in full)) equal to the product of (a) 1/4% of the average
Unused Availability under the Revolving Line for the calendar
quarter or portion thereof preceeding such payment and (b) the
number of days elapsed since the date of the last such payment (if
any), divided by 360. For purposes of this Section, "Unused
Availability" shall mean and refer to the amount by which the
maximum amount available hereunder exceeds the average balance of
Borrower's Loan Account for such period.
7.6 Promptly after the same shall have become known to
Borrower, Borrower shall notify Bank in writing of any action, suit
or proceeding at law or in equity or by or before any governmental
instrumentality or other agency which, if adversely determined,
might impair the ability of Borrower to perform its obligations
under the Loan Documents, impair the ability of Borrower to carry
on its business substantially as now conducted, or which might
materially affect the business, operations, properties, assets or
condition, financial or otherwise, of Borrower.
SECTION 8. Events of Default; Acceleration.
Any or all of the obligations, indebtedness and liabilities of
Borrower to Bank, including, without limitation, the Liabilities,
shall be, at the portion of Bank and notwithstanding any time or
credit allowed by any of the Loan Documents or any other document,
agreement or instrument evidencing any of the Liabilities,
immediately due and payable without notice or demand, and the
obligation of Bank to make advances hereunder shall immediately
cease and terminate upon and after the occurrence of any of the
following events of default:
(a) default in the payment or performance, when due or
payable, of any of the Liabilities of Borrower or any liability or
obligation (whether now or hereafter existing, arising or incurred,
direct or indirect, conditional or unconditional) of any endorser,
guarantor, or surety for any of the Liabilities of Borrower to
bank;
(b) failure by Borrower, any guarantor or any other person or
entity, as applicable, to (i) pay or perform any act or obligation
imposed hereby or by any of the other Loan Documents, or (ii)
comply with any of the terms, conditions, warranties, covenants or
requirements contained or referenced herein or in one or more of
the other Loan Documents;
(c) failure of Borrower or any other person or entity, as
applicable, to pay when due (i) any tax or (ii) any premium on any
(a) insurance policy assigned to Bank, or (b) any insurance
covering any Collateral;
(d) if any warranty or representation contained herein shall
prove false or misleading or if Borrower or any endorser, guarantor
or surety for any of the Liabilities of Borrower to Bank made or
makes any other misrepresentation to Bank for the purpose of
obtaining credit or any extension of credit;
(e) failure of Borrower or any endorser, guarantor, or surety
for any of the Liabilities of Borrower to Bank to furnish financial
information or to permit the inspection of the books or records or
Collateral of Borrower or of any endorser, guarantor or surety for
any of the Liabilities of Borrower to Bank;
(f) issuance of an injunction or attachment against property
of, the general assignment by, judgment against or filing of
petition in bankruptcy by or against Borrower or any endorser,
guarantor or surety for any of the Liabilities of Borrower to Bank;
the filing of an application in any court for a receiver for
Borrower or any endorser, guarantor or surety for any of the
Liabilities of Borrower to Bank; or the death, dissolution,
incapacity or liquidation of Borrower or of any endorser, guarantor
or surety for any of the Liabilities of Borrower to Bank;
(g) calling of a meeting of creditors, appointment of a
committee of creditors or liquidation agents, or offering of a
composition or extension to creditors by, for or of Borrower or by,
for or of any endorser, guarantor or surety for any of the
Liabilities of Borrower to Bank;
(h) bankruptcy or Insolvency of Borrower or of any endorser,
guarantor or surety for any of the Liabilities of Borrower to Bank;
(i) failure of Borrower or any other person or entity, as
applicable, to maintain any insurance required hereunder and/or
assigned or pledged to Bank in connection herewith;
(j) occurrence or continuation of any default or event of
default by or attributable to Borrower under or in connection with
any mortgage, lease, security agreement, note, bond, indenture,
loan agreement or similar instrument or agreement to which Borrower
is now or may hereafter be a party or by which Borrower or any of
its property (including, without limitation, the Collateral) is now
or may hereafter be bound or affected (including, without
limitation, the Bond Guaranty Agreement);
(k) fraud or misrepresentation by or on behalf of Borrower or
any guarantor in its transactions with Bank;
(l) such a change in the condition or affairs (financial or
otherwise) of Borrower or of any endorser, guarantor or surety for
any of the Liabilities of Borrower to Bank or of the Collateral or
any other source of repayment of or security for any of the
Liabilities which, in the opinion of Bank, impairs Bank's security
or increases its risk;
(m) any breach or violation of or failure to abide by any
warranty, covenant, term or provision of this Agreement, the Note
or any of the other Loan Documents; Bank's nor obtaining or
maintaining a first perfected security interested in any of the
Collateral (subject only to the Permitted Liens); or the
termination, cancellation or revocation of any of the Loan
Documents without Bank's consent or the determination by Bank that
Bank does not have a first perfected security interest in any
material portion of the Collateral or that any of the Loan
Documents is void, voidable or unenforceable; or
(n) any default or event of default under the Note or any of
the other Loan Documents.
SECTION 9. Power to Sell or Collect Collateral
Upon the occurrence of any of the above events of default and
at any time thereafter, Bank shall have, in addition to all other
rights and remedies, the remedies of a secured party under the
Uniform Commercial Code of Alabama (regardless of wether the
Uniform Commercial Code has been enacted in the jurisdiction where
rights or remedies are asserted), including, without limitation,
the right to take possession and dispose of the Collateral, and for
that purpose Bank may, so far as Borrower can give authority
thereof, enter upon any premises on which the Collateral may be
situated and remove the same therefrom or take possession of same
and/or store the same on such premises for a reasonable time
pending disposition under the terms of this Agreement or applicable
law. Bank may require Borrower to assemble the Collateral and make
it available to Bank at a place designated by Bank which is
reasonably convenient to both parties. Unless the Collateral is
perishable or is of a type cutomarily sold on a recognized market,
Bank shall give to Borrower at least five (5) days' prior written
notice of the time and place of any public sale of Collateral or of
the time after which any private sale or any other intended
disposition is to be made. Bank may, at any time, in its
discretion, transfer any securities or other property constituting
Collateral into its own name or that of its nominee and receive the
income therefrom and hold the same as security for the Liabilities
or apply it on principal, interest, charges or expenses due on
Liabilities in any manner deemed appropriate by Bank. Bank may
demand, collect, receipt for, settle, compromise, adjust, sue for,
foreclose or realize upon Collateral as Bank may determine, whether
or not Liabilities or Collateral are then due, and Bank may
receive, open and dispose of mail addressed to Borrower and sign
and endorse notes, checks, drafts, money orders, certificates and
documents of title and related forms or other evidences of payment,
shipment or storage or any form of Collateral on behalf of and in
the same of Borrower as Borrower's attorney-in-fact for such
purpose. Bank may apply Collateral and the Proceeds from any
Collateral against the Liabilities secured hereby in any matter
deemed appropriate by Bank. The enumeration of the foregoing rights
is not intended to be exhaustive, and the exercise of any right
shall not preclude the exercise of any other rights, all of which
shall be cumulative. As against the obligations secured hereby,
borrower hereby expressly waives all claims and all rights to claim
any exemptions, both as to personal and real property, allowed or
allowable under the Constitution or laws of the United States, the
State of Alabama or any other jurisdiction. Any notice to Borrower
of sale, disposition or other intended action by Bank, required by
law to be given to Borrower, sent to Borrower at the address of
Borrower shown on the first page of this Agreement or at such other
address of Borrower as may from time to time be shown on Bank's
records, at least five (5) days prior to such action, shall
constitute reasonable notice to Borrower. Bank may resort to any
security given by this Agreement or to any other security now
existing or hereafter given to secure the payment of Borrower's
Liabilities, in whole or in part, and in such portions and in order
as may seem best to Bank in its sole discretion, and any such
action shall not in any way be considered as a waiver of any of the
rights, benefits, or security interests evidenced by this
Agreement. Bank may, at all times, proceed directly against
Borrower to enforce payment of Borrower's Liabilities and shall not
be required first to enforce its rights in the Collateral or any
other security granted to it. Bank shall not be required to take
any action of any kind to preserve, collect, or protect Bank's or
Borrower's rights in the Collateral or any other security granted
to Bank.
SECTION 10. Set Off.
Bank and any participant and any holder of all or any part of
the Liabilities are given hereby as additional security for all
Liabilities a continuing lien and security interest in and upon any
and all moneys, securities and other property of Borrower and the
Proceeds thereof, now or hereafter held or received by or in
transit to Bank (or such participant or holder) from or for
Borrower, whether for safekeeping, custody, pledge, transmission,
collection or otherwise, and also upon any and all deposit balances
(general or special) and credits of Borrower with, and any and all
claims of Borrower against Bank (or such participant or holder) at
any time existing, and upon the occurrence of an event of default
hereunder, Bank (or such participant or holder) may apply or set
off the same against the Liabilities secured hereby or by any of
the other Loan Documents in any manner deemed appropriate by Bank
(or such participant or holder). Borrower agrees that any other
person or entity purchasing a participation from Bank may exercise
all its rights of payment (including the right of Set-off) with
respect to such participation as fully as if such person or entity
were the direct creditor of Borrower in the amount of such
participation.
SECTION 11. Waivers.
Borrower waives demand, presentment, protest, notice of
protest, notice of intent to accelerate, notice of acceleration,
notice of acceptance of this Agreement, and notice of advances and
loans made, credit extended, Collateral received or delivered or
other action taken in reliance hereon and all other demands and
notices of any description. With respect both to the Liabilities
and Collateral, Borrower assents to any extension or postponement
of the time of payment or any other indulgence, to any
substitution, exchange or release of any or all of the Collateral,
to the addition or release of any party or person primarily or
secondarily liable, to the acceptance of partial payments thereon
and the settlement, compromising or adjusting of any thereof, all
in such manner and at such time or times as Bank may deem
advisable. Bank shall have no duty as to the collection or
protection of any or all of the Collateral or any income therefrom,
nor to the preservation of any rights against prior parties, nor as
to the preservation of any rights pertaining thereto beyond the
safe custody of Collateral in its possession. Bank may exercise its
rights with respect to Collateral without resorting or regard to
other Collateral or resources of reimbursement for the Liabilities.
Bank shall not be deemed to have waived any of its rights upon or
under any of the Liabilities or Collateral unless such waiver be in
writing and signed by Bank. No course of dealing and no delay or
omission on the part of Bank exercising any right shall operate as
a waiver of such right or any other right. A waiver on any one
occasion shall not be construed as a bar to or waiver of any right
on any future occasion. All rights and remedies of Bank with
respect to Liabilities or Collateral, whether evidenced hereby, by
any of the other Loan Documents or by any other instrument or
paper, shall be cumulative and may be exercised singularly or
concurrently.
SECTION 12. Expenses, Proceeds of Collateral
Irrespective of whether the proceeds of the Revolving Line are
disbursed, Borrower shall pay all fees and expenses, including,
without limitation, legal fees and expenses, filing fees, insurance
premiums and expenses, appraisal fees, recording costs and taxes
incurred by Bank or Borrower from time to time in connection with
the preparation and closing, filing administration, amendment and
modification of the Revolving Line, this Agreement, the Note, and
other Loan Documents and those documents and instruments associated
with the perfection and creation of the security interests granted
pursuant hereto or pursuant to any of the other Loan Documents.
Borrower shall pay to Bank on demand any and all such fees and
expenses incurred or paid by Bank together with any and all fees,
expenses and costs (a) of collection or (b) otherwise incurred or
paid by Bank in protecting or enforcing its rights upon or with
respect to any of the Liabilities, the Loan Documents or the
Collateral (including, without limitation, reasonable counsel fees,
including, without limitation, those incurred in connection with
any appeal or any bankruptcy proceedings). After deducting all of
said fees and expenses, the residue of any proceeds of collection
or sale of Liabilities or Collateral shall be applied to the
payment of principal of, interest on, and charges and expenses
related to the Liabilities in such order or preference as Bank may
determine, proper allowance for Liabilities not then due being
made, and, to the extent allowed by law, Borrower shall remain
liable for any deficiency.
SECTION 13. Duration; Extension.
The Revolving Line shall terminate on the Maturity Date, at
which time all principal, interest, charges and expenses
outstanding hereunder, under the Note or under any of the other
Loan Documents shall be due and payable in full unless due sooner
under the terms of the Note, this Agreement or any of the other
Loan Documents. It is understood that any extension hereof may
require a revision of certain portions of this Agreement. No
modification or amendment of this Agreement or extension of the
Maturity Date shall be effective unless placed in writing and duly
executed by Bank and Borrower. It is expressly agreed that this
Agreement shall survive the maturity or termination of the
Revolving Line in all respects necessary for Bank to exercise its
rights and remedies hereunder and with respect to the Collateral.
The maturity or termination of the Revolving Line shall in no way
affect any transactions entered into or rights created or
obligations incurred prior to such maturity or termination; rather,
such rights and obligations shall be fully operative until the same
are fully disposed of, concluded and/or liquidated. Without
limitation to the generality of the foregoing, such maturity or
termination shall not release nor diminish and of (i) Borrower's
obligations and agreements, or (ii) Bank's rights and remedies
arising hereunder or in connection herewith until full and final
pavement and performance of all of the Liabilities. This Agreement
shall be continuing agreement in every respect.
SECTION 14. General.
Any demand upon or notice to Borrower that Bank may elect to
give shall be effective upon delivery if such notice is given
personally, or upon dispatch if deposited in the mails or delivered
to a telegraph, wireless or radio company addressed to Borrower at
the address noted on the first page of this Agreement or, if
Borrower has notified Bank in writing of a change of address, to
Borrower's last address so notified. Demands or notices addressed
to Borrower's address at which Bank cutomarily communicates with
Borrower shall also be effective. In at any time or times by
assignment or otherwise Bank transfers any of the Liabilities
(either separately or together with the Collateral therefor), such
transfer shall carry with it Bank's powers and rights under this
Agreement with respect to the Liabilities and/or Collateral
transferred, and the transferee shall become vested with said
powers and rights whether or not they are specifically referred to
in the transfer. If and to the extent Bank retains any of the
Liabilities or Collateral, Bank will continue to have the rights
and powers herein set forth with respect thereto. The Note, this
Agreement and all of the other Loan Documents, and all rights and
obligations hereunder and thereunder, including matters of
construction, validity and performance, shall be governed by and
construed in accordance with the internal laws of the state of
Alabama, except that any conflict of laws rule of such jurisdiction
that would require reference to the laws of some other jurisdiction
shall be disgarded. Nothing contained herein, or in any of the
documents contemplated hereby, shall be deemed to render Bank on
the one hand, and Borrower on the other hand, partners or venturers
for any purpose. This Agreement is intended to take effect as a
sealed instrument.
SECTION 15. Miscellaneous.
In the event of actual conflict in the terms and provisions of
this Agreement and any of the other Loan Documents or any other
document, instrument or agreement executed in connection with this
Agreement or described or referred to in this Agreement, the terms
and provisions most favorable to bank shall control. No
modification, consent, amendment or waiver of any provision of this
Agreement or any of the other Loan Documents, nor consent to any
departure by Borrower therefrom, shall be effective unless the same
shall be in writing and signed by Bank, and then shall be effective
only in the specific instance and for the purpose for which given.
This Agreement and each of the other Loan Documents are binding
upon Borrower, its successors and assigns, and insure to the
benefit of Bank, its successors and assigns. All representatives
and warranties of Borrower herein, and all covenants and agreements
herein, in the other Loan Documents, or in any other document
delivered hereunder or in connection herewith that are not fully
performed before the date of this Agreement, shall survive such
date.
This Agreement and each of the other Loan Documents shall be
deemed to be drafted by all parties hereto and shall not be
construed against any party hereto. In the event any one or more of
the terms or provisions contained in this Agreement, in any of the
other Loan Documents or in any other instrument or agreement
referred to herein or executed in connection with or as security
for the Liabilities, or any application thereof to any person or
circumstances, shall be declared prohibited, illegal, invalid or
unenforceable to any extent in any jurisdiction, as determined by
a court of competent jurisdiction, such term or provision, in that
jurisdiction, shall be effective only to the extent of such
prohibition, illegality, invalidity or unenforeceability, or as
applied to such persons or circumstances, without invalidating or
rendering unenforeceable the remaining terms or provisions hereof
or thereof or affecting the validity or enforeceability of such
term or provision in any other jurisdiction or as to other persons
or circumstances in such jurisdiction, unless such would effect a
substantial deviation from the general intent and purpose of the
parties, make a significant change in the economic effect of the
transactions contemplated herein on Bank, or impair the validity or
perfection of Bank's security interest in any Collateral or the
validity of any guaranty or other security for the Liabilities, in
which event a substitute provision shall be supplied by the court
in order to provide Bank with the benefits intended by such invalid
term or provision.
SECTION 16. Compliance With Laws.
It is the intention of Bank and Borrower to conform strictly
to any applicable usury laws. Accordingly, if the transactions
contemplated hereby would be usurious under any applicable law,
then, in that event, notwithstanding anything to the contrary in
this Agreement, the other Loan Documents, or any other agreement
entered into in connection with or as security for or guaranteeing
the Revolving Line, it is agreed as follows: (i) the aggregate of
all consideration which constitutes interest under applicable law
that is contracted for, taken, reserved, charged, or received by
Bank under or in connection with the Revolving Line shall under no
circumstances exceed the Highest Lawful Rate (as defined below),
and any excess shall be cancelled automatically and, if theretofore
paid, shall, at the option of Bank, be credited by Bank on the
principal amount of any indebtedness owed to Bank by Borrower or
refunded by Bank to Borrower, and (ii) in the event that the
payment of the Revolving Line is accelerated or in the event of any
required or permitted prepayment, then such consideration that
constitutes interest under law applicable to Bank may never include
more than the Highest Lawful Rate and excess interest, if any, to
Bank provided for in this Agreement or the other Loan Documents or
otherwise with respect to the Revolving Line shall be cancelled
automatically as of the date of such acceleration or prepayment
and, if theretofore paid, shall, at the option of Bank, be credited
by Bank on the principal amount of any indebtedness owed to Bank by
Borrower or refunded by Bank to Borrower.
"Highest Lawful Rate" means the maximum non-usurious interest
rate that at any time or from time to time may be contracted for,
taken, reserved, charged, or received on amounts due to Bank, under
laws applicable to Bank with regard to the Revolving Line that are
presently in effect or, to the extent allowed by law, under such
applicable laws that allow a higher maximum non-usurious rate than
applicable laws now allow.
IN WITNESS WHEREOF, the parties hereto have hereunder set
their hands and seals on this 13 day of January 1995.
BORROWER:
Witness: PIGGLY WIGGLY ALABAMA
Carol Adison DISTRIBUTING CO., INC.
By: D. T. Stewart
Its: President / CEO
BANK:
Witness: COMPASS BANK
Angela Ilovec By: David Cochran
Its: Vice President
STATE OF Alabama
COUNTY OF Jefferson
I, the undersigned, Notary Public in and for said County in
said State, hereby certify that D. T. Stewart, whose name as
President of PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC., an
Alabama corporation, is signed to the foregoing instrument and who
is known to me, acknowledged before me on this day that, being
informed of the contents of the instrument, ---- he, as such
President and with full authority, executed the same voluntarily
for and as the act of said corporation.
Given under my hand this the 13 day of January, 1995
Bill Comart
Notary Public
[NOTARIAL SEAL] My commission expires: 7-25-96
STATE OF Alabama
COUNTY OF Jefferson
I, the undersigned, Notary Public in and for said County in
said State, hereby certify that David Cochran, whose name as Vice
President of COMPASS BANK, an Alabama banking corporation, is
signed to the foregoing instrument and who is known to me,
acknowledged before me on this day that, being informed of the
contents of the instrument, ---- he, as such officer and with full
authority, executed the same voluntarily for and as the act of said
corporation.
Given under my hand this the 13 day of January, 1995
Bill Comart
Notary Public
[NOTARIAL SEAL] My commission expires: 7-25-96
EXHIBIT 10.29
MASTER REVOLVING PROMISSORY NOTE
$10,000,000.00 BIRMINGHAM, ALABAMA
--------------, 1994
The undersigned, PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC.,
a corporation (hereinafter referred to as "Borrower"), has applied
to COMPASS BANK, an Alabama banking corporation ("Bank"; Bank and
any subsequent successor, assignor, transferee or holder of this
Master Revolving Promissory Note (this "Note") is sometimes
referred to herein as "Holder"), for a revolving line of credit not
to exceed an aggregate principal amount at any one time outstanding
the sum of TEN MILLION AND NO/100 DOLLARS ($10,000,000.00) subject
to reduction as provided in the Loan Agreement as herein defined.
Holder is willing to extend such revolving line of credit (the
"Revolving Line") to Borrower on the terms and subject to the
conditions set forth herein and in that certain Revolving Credit
and Security Agreement of even date herewith (the "Loan
Agreement"). Accordingly, Borrower and Holder in consideration of
the premises, the credit to be extended hereunder, and other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, agree as follows:
1. Borrower's Promise to Pay. Borrower promises to pay to
the order of Holder at the main office of Holder or at such other
place as Holder of this Note may from time to time designate in
writing, in lawful money of the United States of America, the
principal sum of TEN MILLION AND NO/100 DOLLARS ($10,000,000.00),
or so much thereof as may have been advanced or re-advanced to
Borrower from time to time during the term hereof and not repaid by
Borrower, with interest (and any charges and expenses) on the terms
and in the manner more particularly set forth below and in the Loan
Agreement. Interest, calculated as set forth below, on the unpaid
principal amount hereof shall be paid, in immediately available
funds, on each Interest Payment Date (as hereinafter defined), from
the date of this Note (unless due sooner by reason of Borrower's
default or maturity of this Note), and the entire unpaid principal
balance outstanding hereunder plus accrued interest (and any
charges and expenses) shall be due and payable in full on November
1, 1997. Any principal amounts outstanding hereunder after maturity
shall bear interest at the Compass Bank Prime Rate (defined below).
1.1 Definitions. The following terms shall, for purposes of
this Note, have the following meanings:
"Alternative Rate" shall mean the LIBOR Rate.
"Authorized Agent" shall mean ------------ or any other agent
of Borrower from time to time designated, in a writing executed by
Borrower and delivered to Holder, as authorized to request advances
and make the interest rate elections provided for herein.
"Business Day" shall mean any day, Monday through Friday, on
which Bank is open for the conduct of its general banking business.
"Compass Bank Prime Rate", as used herein, is a reference rate
established by Bank for use in computing and adjusting interest, is
subject to increase, decrease or change at Bank's discretion, and
is only one of the reference rates or indices that Bank uses. Bank
may lend to others at rates of interest at, or greater or less
than, Compass Bank Prime Rate or the rate(s) provided herein. Any
change in said rate due to a change in Compass Bank Prime Rate
shall take effect on the day of such change.
"LIBOR Rate" means, at the time of any computation required
under Section 4 below, an interest rate equal to (i) Holder's
reasonable estimate of the rate at which United States dollar
deposits in like amount and period requested by Borrower pursuant
to Section 4 would be, at Holder's request, offered to Holder by
brokers or other intermediaries trading in the London interbank
market at approximately 11:00 A.M. (London time), on the date on
which the LIBOR Rate advance is to be made and the interest period
is to apply; plus (ii) one and three-quarters of one percentage
points (1.75%).
"Interest Payment Date" for such periods of time and in such
portions of the principal amount hereof to which (i) the Compass
Bank Prime Rate is applicable shall be the first day of each
calendar month, until paid in full, commencing on the date hereof;
and (ii) an Alternative Rate is applicable shall be the expiration
of the relevant Election Period. If any Interest Payment Date would
otherwise be a day which is not a business day, such Interest
Payment Date shall be extended to the end of the next succeeding
business day.
"Election Date" shall mean, so long as the Compass Bank Prime
Rate is applicable, any Business Day or, so long as an Alternative
Rate is applicable, the last day of any period during which such
Alternative Rate applies. If the last day of any period during
which any Alternative Rate applies falls on a holiday, then the
relevant Election Date shall be the next business day.
"Election Period" shall mean the period of time for which
Borrower elects for any Alternative Rate, as provided in Section 4
below, to apply. Such period shall be any one of 30, 60 or 90 days,
at Borrower's option.
2. Compass Bank Prime Rate. The outstanding principal
balance of this Note will bear interest at the Compass Bank Prime
Rate from time to time prevailing at Bank, such rate to change as
such Compass Bank Prime Rate changes, unless Borrower elects an
Alternative Rate, in which event such Alternative Rate shall apply
for the period or periods specified pursuant to the provisions of
Section 4 below. Any advances of principal hereunder made during
any Election Period shall bear interest at the Compass Bank Prime
Rate until the next Election Date and thereafter until Borrower
elects an Alternative Rate pursuant to the terms hereof.
3. 360-Day Year. Irrespective of whether the applicable
interest rate is Compass Bank Prime Rate or an Alternative Rate,
interest from date on the outstanding unpaid principal balance
shall be calculated by multiplying the product of the relevant
principal amount and the applicable rate set forth herein by the
actual number of days elapsed, and dividing by 360.
4. LIBOR Rate Alternative. In lieu of the Compass Bank Prime
Rate, Borrower may from time to time elect as the interest rate for
any portion (which is an integral multiple of $500,000) or all of
the principal balance of this Note a rate equal to the then
applicable LIBOR Rate. Such election shall be made, and the
resulting interest rate determined, as follows:
4.1 Before 11:00 A.M. on any Election Date, an Authorized
Agent shall telephone David Cochran or any officer of Bank
designated to Borrower from time to time by Bank ("Bank Authorized
Officer") and shall request quotations of the LIBOR Rate for the
Election Period designated by Borrower for all or a portion of the
principal balance then outstanding or proposed to be borrowed
contemporaneously therewith hereunder (which shall be an integral
multiple of $500,000) which Borrower desires to bear interest at
such LIBOR Rate for such Election Period.
4.2 Bank shall thereupon (subject to availability) give its
reasonable estimate (by telephone or facsimile) of the LIBOR Rate
for funds in such face amount and maturity, as so determined, that
shall be applicable to the principal portion hereof and the
Election Period so designated by Borrower. On or before 2:00 P.M.
on the Election Date, the Authorized Agent shall elect whether or
not to accept the quoted LIBOR Rate and shall so inform the Bank
Authorized Officer. If Borrower elects not to accept the quoted
LIBOR Rate or fails to inform the Bank Authorized Agent of its
election prior to such deadline, the Compass Bank Prime Rate shall
apply until the Authorized Agent has elected an Alternate Rate in
the manner set forth above at a subsequent Election Date. At the
conclusion of any Election Period, the principal portion hereof
theretofore bearing interest at the relevant LIBOR Rate shall
revert to bearing interest at the Compass Bank Prime Rate unless an
Authorized Agent has elected an Alternative Rate in the manner set
forth above.
4.3 Notwithstanding the fact that Borrower may have elected
to base the interest rate hereof upon the cost of funds in the
London Interbank Market, Borrower agrees that Holder shall not be
required actually to obtain funds from such source at any time.
4.4 Interest on said election shall be paid by Borrower on
each respective Interest Payment Date.
5. Transaction Statements. Subject to the terms and
conditions of this Note, advances shall be made at the request of
the Authorized Agent. All advances, payments and appropriate
entries and charges hereunder shall be recorded as debits and
credits upon records maintained by Holder. On a monthly basis,
Holder shall render to Borrower a statement showing all
transactions during the immediately preceding month. Borrower shall
make all interest and principal payments as and when required under
the terms of this Note. Subject to the terms of Section 6 below and
Borrower's performance of the other terms and conditions of this
Note, additional payments made by Borrower shall be applied by Bank
to the prepayment of principal and/or interest as so designated by
Borrower. If Borrower fails to so designate, such additional
payments made by Borrower shall be applied by Bank as Bank shall
designate.
6. Prepayments. Borrower may prepay the outstanding
principal balance of this Note, or any part thereof, bearing
interest at the Compass Bank Prime Rate at any time; however,
Borrower shall not be entitled to prepay the outstanding principal
balance of this Note, or any part thereof, bearing interest at an
Alternative Rate, during any Election Period, unless due by reason
of demand or maturity of this Note.
7. Indemnity. Borrower hereby agrees to indemnify Holder,
its officers, employees, and agents from any cost or loss arising
from their actions taken or omitted to be taken in good faith based
upon communications between Borrower and Holder.
8. Expenses. Holder shall be entitled to recover all
expenses incurred in collecting or attempting to collect this Note,
including, without limitation, court costs and reasonable
attorneys' fees. The obligations of Borrower under this Section
shall survive payment of this Note.
9. Waivers. With respect to the amounts due under this Note
and Borrower's obligations hereunder, Borrower waives the
following:
9.1 All rights of exemption of property from levy or sale
under execution or other process for the collection of debts under
the Constitution or laws of the United States or any state thereof;
and
9.2 Demand, presentment, protest, notice of nonpayment,
notice of protest or dishonor, suit against any party, diligence in
collection, and all other requirements necessary to charge or hold
the undersigned liable on any obligations hereunder. Holder may
accept partial payment, or release or exchange any security or any
collateral without discharging or releasing any of the obligations
evidenced hereby or any unreleased collateral.
10. Compliance With Laws. It is the intention of Holder and
Borrower to conform strictly to any applicable usury laws.
Accordingly, if the transactions contemplated hereby would be
usurious under any applicable law, then, in that event,
notwithstanding anything to the contrary in this Note, or any other
agreement entered into in connection with or as security for or
guaranteeing this Note, it is agreed as follows: (i) the aggregate
of all consideration which constitutes interest under applicable
law that is contracted for, taken, reserved, charged, or received
by Holder under this Note or under any other agreement entered into
in connection with or as security for or guaranteeing the Revolving
Line shall under no circumstances exceed the Highest Lawful Rate
(as defined below), and any excess shall be canceled automatically
and, if theretofore paid, shall, at the option of Holder, be
credited by Holder on the principal amount of any indebtedness owed
to Holder by Borrower or refunded by Holder or Borrower, and (ii)
in the event that the payment of the Revolving Line is accelerated
or in the event of any required or permitted prepayment, then such
consideration that constitutes interest under law applicable to
Holder may never include more than the Highest Lawful Rate and
excess interest, if any, to Holder provided for in this Note or
otherwise shall be canceled automatically as of the date of such
acceleration or prepayment and, if theretofore paid, shall, at the
option of Holder, be credited by Holder on the principal amount of
any indebtedness owed to Holder by Borrower or refunded by Holder
to Borrower.
Notwithstanding anything herein to the contrary, in no event
will interest payable to Holder exceed the maximum amount permitted
by the law applicable to Holder (after taking into account all
charges payable to Holder that constitute interest under such
applicable law), but if any amount referred to in this Note that
would be payable to Holder but for the applicability of usury or
other laws limiting the consideration payable to Holder is not paid
to Holder as a result of the applicability of such laws, then
interest on the outstanding principal balance of this Note payable
to Holder shall, to the extent permitted by the law, accrue at the
maximum rate of interest permitted by applicable law (after taking
into account all charges payable to Holder that constitute interest
under applicable law) until the total amount received by Holder
equals the amount it would have received had no such laws been
applicable.
"Highest Lawful Rate" means the maximum non-usurious interest
rate at any time or from time to time may be contracted for, taken,
reserved, charged, or received on amounts due to Holder, under laws
applicable to Holder that are presently in effect or, to the extent
allowed by law, under such applicable laws that allow a higher
maximum non-usurious rate than applicable laws now allow.
11. Lending Installations. Holder may, at its option, book
any part of any advances subject to a LIBOR Rate at any lending
installation selection by Holder ("Lending Installation") and may
change the Lending Installation from time to time. However,
notwithstanding the fact that Borrower has elected (pursuant to the
terms of Section 4 above) as the applicable interest rate for any
portion (which is an integral multiple of $500,000) or all of the
principal balance of this Note a rate equal to the then-applicable
LIBOR Rate, Holder is not required to book LIBOR Rate advances at
any Lending Installation.
12. Failure to Pay or Borrow on Certain Dates. If any
payment of any part of any advances subject to the LIBOR Rate
occurs on a date which is not the last day of an Election Period,
or if any advance which is to be subject to any LIBOR Rate is not
made on the date specified by Borrower for any reason other than
default by Holder, Borrower shall upon demand by Holder indemnify
Holder for all costs incurred by Holder resulting therefrom,
including, without limitation, any loss in liquidating or employing
deposits acquired to fund or maintain such LIBOR Rate advance.
13. Yield Protection.
13.1 General. With respect to LIBOR Rate advances, if any
future law, rule, regulation or directive, or any future judicial
or administrative interpretation of any existing law, rule,
regulation or directive
(a) subjects Holder or any applicable Lending
Installation to any tax, duty, charge or withholding on or from
payments due from Borrower (excluding taxation of the overall net
income of Holder or taxation which may be treated as an offset
against such taxation of overall net income), or
(b) imposes or increases any reserve, assessment,
special deposit or similar requirement against Holder or any
applicable Lending Installation, or
(c) imposes any other condition, the result of which
is to increase the cost to Holder or any applicable Lending
Installation of making, funding or maintaining loans or reduces any
amount receivable by Holder or any applicable Lending Installation
in connection with loans, or require Holder or any applicable
Lending Installation to make any payment calculated by reference to
the amount of loans held or interest received by it,
then upon demand by Holder, Borrower shall pay to Holder that
portion of such increased expense incurred or reduced amount
received which Holder or such Lending Installation determines is
attributable to making, funding and maintaining LIBOR Rate advances
hereunder. Holder promptly shall notify Borrower upon its becoming
aware of any such increased expense or reduced amount received.
13.2 Bank's Certificates; Survival of Indemnity. A
certificate of Holder or any such Lending Installation as to the
amount due under Section 13.1 above shall be presumed to be
correct. Determination of amounts payable under Section 13.1 above
in connection with LIBOR Rate advances shall be calculated as
though Holder or the affected Lending Installation funded the LIBOR
Rate advances through the purchase of a deposit of the type, amount
and maturity corresponding to the deposit used as a reference in
determining the applicable LIBOR Rate for such advance. The amount
specified in the certificate shall be payable at the end of the
applicable Election Period after receipt by Borrower of the
certificate. The obligations of Borrower under Sections 12 and 13
hereof shall survive payment of this Note.
13.3 Illegality Affecting LIBOR Rate Advances. If Holder, in
its reasonable discretion, determines that maintenance of any LIBOR
Rate would violate any applicable law, rule, regulation, or
directive applicable to Holder or any Lending Installation, then
Holder may suspend the availability of a LIBOR Rate, including
LIBOR Rate advances then outstanding, upon notice to Borrower. Such
suspension of availability shall terminate the Election Period with
respect to the affected advances. The Compass Bank Prime Rate will
then apply to such affected advances.
13.4 Availability of Interest Rate. If Holder, in its
reasonable discretion, determines that (a) deposits of a type and
maturity appropriate to match a LIBOR Rate advance are not
available to it, or (b) that the LIBOR Rate does not accurately
reflect the cost to Holder of making the corresponding advance,
Holder may suspend the availability of the affected rate option
with respect to future advances and future interest periods.
14. General. Holder shall not by any act, delay, omission or
otherwise be deemed to have waived any of its rights or remedies,
and no waiver of any kind shall be valid unless in writing and
signed by Holder. All rights and remedies of Holder under the terms
of this Note, and applicable statutes or rules of law, shall be
cumulative and may be exercised successively or concurrently.
Borrower agrees that there are no defenses, equities or setoffs in
respect to the obligations set forth herein. The obligations of
Borrower hereunder shall be binding upon and enforceable against
Borrower and its successors and assigns. Borrower agrees that this
Note shall be governed by and construed under the internal laws of
the State of Alabama (without regard to choice of law
considerations), including, without limitation, applicable usury
laws. This Note has been negotiated, and is being executed and
delivered in the State of Alabama, or if executed elsewhere, shall
become effective upon Bank's receipt and acceptance of the
executed original of this Note in the State of Alabama; provided,
however, that Bank shall have no obligation to give, nor shall
Borrower be entitled to receive, any notice of such acceptance for
this Note to become a binding obligation of Borrower. As used
herein, the terms "Borrower", "Bank", "guarantor" and "Holder"
shall be deemed to include their respective successors, legal
representative and assigns, whether by voluntary action of the
parties or by operation of law. Nothing contained herein, or in any
of the documents contemplated hereby, shall be deemed to render
Bank on the one hand, and Borrower on the other hand, partners or
venturers for any purpose. This Note is given under the seal of all
parties hereto and it is intended that this Note shall constitute
and have the effect of a sealed instrument according to law. Any
provision in this Note which may be unenforceable or invalid under
any applicable law shall be ineffective to the extent such
unenforceability or invalidity without affecting the enforceability
or validity of any other provision hereof.
15. Events of Default. In case of the occurrence of any one
or more of the following events:
(a) Default in the payment of the principal of, interest on
or fees and charges applicable to this Promissory Note, as and when
due and payable;
(b) Default upon any other loan or guaranty obligation of
Borrower to Holder; or
(c) The occurrence of any event of default specified in the
Loan Agreement or any other document executed in connection with
this Promissory Note;
then, or at any time thereafter, the Holder may, with or without
notice to Borrower, declare this Promissory Note to be forthwith
due and payable, both as to principal and interest, without
presentment, demand, protest or other notice of any kind, all of
which are hereby expressly waived, and may, in its sole discretion
proceed to exercise any and all remedies available to it hereunder,
under the Loan Agreement and under applicable law.
IN WITNESS WHEREOF, Borrower has caused this Note to be
executed and delivered by its duly authorized officer in Alabama on
this 13 day of January, 1995.
PIGGLY WIGGLY ALABAMA
DISTRIBUTING CO., INC
By: D. T. Stewart
Its: President/CEO
STATE OF ALABAMA
COUNTY OF JEFFERSON
I, Bobby L. Martin, a notary public in and for said county in
said state, hereby certify that D. T. Stewart, whose name as
President of Piggly Wiggly Alabama Distributing Co., Inc., an
Alabama corporation, is signed to the foregoing statement and who
is known to me, acknowledged before me on this day that, being
informed of the contents of such instrument, he, as such officer
and with full authority, executed the same voluntarily for and as
the act of said corporation.
Given under my hand and official seal this the 13 day of
January, 1995.
[NOTARIAL SEAL] Bobby L. Martin
Notary Public
My Commission Expires: 7-25-96
EXHIBIT 10.30
ARCHITECT AGREEMENT DATED JUNE 16, 1995
AIA Document B141
Standard Form of Agreement Between Owner and Architect
1977 EDITION
AGREEMENT
made as of the 16th day of June in the year of Nineteen Hundred and
Ninety-Four
BETWEEN the Owner: Piggly Wiggly Expansion Project
The Industrial Development Board
of the City of Bessemer,
Piggly Wiggly Expansion Project
and the Architect: Holmes and Holmes, Architect
TERMS AND CONDITIONS OF AGREEMENT BETWEEN OWNER AND ARCHITECT
ARTICLE 1
ARCHITECT'S SERVICES AND RESPONSIBILITIES
BASIC SERVICES
The Architect's Basic Services consist of the five phases
described in Paragraphs 1.1 through 1.5 and include normal
structural, mechanical and electrical engineering services and any
other services included in Article 15 as part of Basic Services.
1.1 SCHEMATIC DESIGN PHASE
1.1.1 The Architect shall review the program furnished by the
Owner to ascertain the requirements of the Project and shall review
the understanding of such requirements with the Owner.
1.1.2 The Architect shall provide a preliminary evaluation of the
program and the Project budget requirements, each in terms of the
other, subject to the limitations set forth in Subparagraph 3.2.1.
1.1.3 The Architect shall review with the Owner alternative
approaches to design and construction of the Project.
1.1.4 Based on the mutually agreed upon program and Project
budget requirements, the Architect shall prepare, for approval by
the Owner, Schematic Design Documents consisting of drawings and
other documents illustrating the scale and relationship of Project
components.
1.1.5 The Architect shall submit to the Owner a Statement of
Probable Construction Cost based on current area, volume or other
unit costs.
1.2 DESIGN DEVELOPMENT PHASE
1.2.1 Based on the approved Schematic Design Documents and any
adjustments authorized by the Owner in the program or Project
budget, the Architect shall prepare, for approval by the Owner,
Design Development Documents consisting of drawings and other
documents to fix and describe the size and character of the entire
Project as to architectural, structural, mechanical and electrical
systems, materials and such other elements as may be appropriate.
1.2.2 The Architect shall submit to the Owner a further Statement
of Probable Construction Cost.
1.3 CONSTRUCTION DOCUMENTS PHASE
1.3.1 Based on the approved Design Development Documents and any
further adjustments in the scope or quality of the Project or in
the Project budget authorized by the Owner, the Architect shall
prepare, for approval by the Owner, Construction Documents
consisting of Drawings and Specifications setting forth in detail
the requirements for the construction of the Project.
1.3.2 The Architect shall assist the Owner in the preparation of
the necessary bidding information, bidding forms, the Conditions of
the Contract, and the form of Agreement between the Owner and the
Contractor.
1.3.3 The Architect shall advise the Owner of any adjustments to
previous Statements of Probable Construction Cost indicated by
changes in requirements or general market conditions.
1.3.4 The Architect shall assist the Owner in connection with the
Owner's responsibility for filing documents required for the
approval of governmental authorities having jurisdiction over the
Project.
1.4 BIDDING OR NEGOTIATION PHASE
1.4.1 The Architect, following the Owner's approval of the
Construction Documents and of the latest Statement of Probable
Construction Cost, shall assist the Owner in obtaining bids or
negotiated proposals, and assist in awarding and preparing
contracts for construction.
1.5 CONSTRUCTION PHASE - ADMINISTRATION OF THE CONSTRUCTION
CONTRACT
1.5.1 The Construction Phase will commence with the award of the
Contract for Construction and, together with the Architect's
obligation to provide Basic Services under this Agreement, will
terminate when final payment to the Contractor is due, or in the
absence of a final Certificate for Payment or of such due date,
sixty days after the Date of Substantial Completion of the Work,
whichever occurs first.
1.5.2 Unless otherwise provided in this Agreement and
incorporated in the Contract Documents, the Architect shall provide
administration of the Contract for Construction as set forth below
and in the edition of AIA Document A201, General Conditions of the
Contract for Construction, current as of the date of this
Agreement.
1.5.3 The Architect shall be a representative of the Owner during
the Construction Phase, and shall advise and consult with the
Owner. Instructions to the Contractor shall be forwarded through
the Architect. The Architect shall have authority to act on behalf
of the Owner only to the extent provided in the Contract Documents
unless otherwise modified by written instrument in accordance with
Subparagraph 1.5.16.
1.5.4 The Architect shall visit the site at intervals appropriate
to the stage of construction or as otherwise agreed by the
Architect in writing to become generally familiar with the progress
and quality of the Work and to determine in general if the Work is
proceeding in accordance with the Contract Documents. However, the
Architect shall not be required to make exhaustive or continuous
on-site inspections to check the quality or quantity of the Work.
On the basis of such on-site observations as an architect, the
Architect shall keep the Owner informed of the progress and quality
of the Work, and shall endeavor to guard the Owner against defects
and deficiencies in the Work of the Contractor.
1.5.5 The Architect shall not have control or charge of and shall
not be responsible for construction means, methods, techniques,
sequences or procedures, or for safety precautions and programs in
connection with the Work, for the acts or omissions of the
Contractor, Sub-contractors or any other persons performing any of
the Work, or for the failure of any of them to carry out the Work
in accordance with the Contract Documents.
1.5.6 The Architect shall at all times have access to the Work
wherever it is in preparation or progress.
1.5.7 The Architect shall determine the amounts owing to the
Contractor based on observations at the site and on evaluations of
the Contractor's Applications for Payment, and shall issue
Certificates for Payment in such amounts, as provided in the
Contract Documents.
1.5.8 The issuance of a Certificate for Payment shall constitute
a representation by the Architect to the Owner, based on the
Architect's observations at the site as provided in Subparagraph
1.5.4 and on the data comprising the Contractor's Application for
Payment, that the Work has progressed to the point indicated; that,
to the best of the Architect's knowledge, information and belief,
the quality of the Work is in accordance with the Contract
Documents (subject to an evaluation of the Work for conformance
with the Contract Documents upon Substantial Completion, to the
results of any subsequent tests required by or performed under the
Contract Documents, to minor deviations from the Contract Documents
correctable prior to completion, and to any specific qualifications
stated in the Certificate for Payment); and that the Contractor is
entitled to payment in the amount certified. However, the issuance
of a Certificate for Payment shall not be a representation that the
Architect has made any examination to ascertain how and for what
purpose the Contractor has used the moneys paid on account of the
Contract Sum.
1.5.9 The Architect shall be the interpreter of the requirements
of the Contract Documents and the judge of the performance
thereunder by both the Owner and Contractor. The Architect shall
render interpretations necessary for the proper execution or
progress of the Work with reasonable promptness on written request
of either the Owner or the Contractor, and shall render written
decisions, within a reasonable time, on all claims, disputes and
other matters in question between the Owner and the Contractor
relating to the execution or progress of the Work or the
interpretation of the Contract Documents.
1.5.10 Interpretations and decisions of the Architect shall be
consistent with the intent of and reasonably inferable from the
Contract Documents and shall be in written or graphic form. In the
capacity of interpreter and judge, the Architect shall endeavor to
secure faithful performance by both the Owner and the Contractor,
shall not show partiality to either, and shall not be liable for
the result of any interpretation or decision rendered in good faith
in such capacity.
1.5.11 The Architect's decision in matters relating to artistic
effect shall be final if consistent with the intent of the Contract
Documents. The Architect's decisions on any other claims, disputes
or other matters, including those in question between the Owner and
the Contractor, shall be subject to arbitration as provided in this
Agreement and in the Contract Documents.
1.5.12 The Architect shall have authority to reject Work which
does not conform to the Contract Documents. Whenever, in the
Architect's reasonable opinion, it is necessary or advisable for
the implementation of the intent of the contract Documents, the
Architect will have authority to require special inspection or
testing of the Work in accordance with the provisions of the
Contract Documents, whether or not such Work be then fabricated,
installed or completed.
1.5.13 The Architect shall review and approve or take other
appropriate action upon the Contractor's submittals such as Shop
Drawings, Product Data and Samples, but only for conformance with
the design concept of the Work and with the information given in
the Contract Documents. Such action shall be taken with reasonable
promptness so as to cause no delay. The Architect's approval of a
specific item shall not indicate approval of an assembly of which
the item is a component.
1.5.14 The Architect shall prepare Change Orders for the Owner's
approval and execution in accordance with the Contract Documents,
and shall have authority to order minor changes in the Work not
involving an adjustment in the Contract Sum or an extension of the
Contract Time which are not consistent with the intent of the
Contract Documents.
1.5.15 The Architect shall conduct inspections to determine the
Dates of Substantial Completion and final completion, shall receive
and forward to the Owner for the Owner's review written warranties
and related documents required by the Contract Documents and
assembled by the Contractor, and shall issue a final Certificate
for Payment.
1.5.16 The extent of the duties, responsibilities and limitations
of authority of the Architect as the Owner's representative during
construction shall not be modified or extended without written
consent of the Owner, the Contractor and the Architect.
1.6 PROJECT REPRESENTATION BEYOND BASIC SERVICES
1.6.1 If the Owner and Architect agree that more extensive
representation at the site than is described in Paragraph 1.5 shall
be provided, the Architect shall provide one or more Project
Representatives to assist the Architect in carrying out such
responsibilities at the site.
1.6.2 Such Project Representatives shall be selected, employed
and directed by the Architect, and the Architect shall be
compensated therefor as mutually agreed between the Owner and the
Architect as set forth in an exhibit appended to this Agreement,
which shall describe the duties, responsibilities and limitations
of authority of such Project Representatives.
1.6.3 Through the observations by such Project Representatives,
the Architect shall endeavor to provide further protection for the
Owner against defects and deficiencies in the Work, but the
furnishing of such project representation shall not modify the
rights, responsibilities or obligations of the Architect as
described in Paragraph 1.5.
1.7 ADDITIONAL SERVICES
The following Services are not included in Basic Services unless so
identified in Article 15. They shall be provided if authorized or
confirmed in writing by the Owner, and they shall be paid for by
the Owner as provided in this Agreement, in addition to me
compensation for Basic Services.
1.7.1 Providing analyses of the Owner's needs, and programming
the requirements of the Project.
1.7.2 Providing financial feasibility or other special studies.
1.7.3 Providing planning surveys, site evaluations, environmental
studies or comparative studies of prospective sites, and preparing
special surveys, studies and submissions required for approvals of
governmental authorities or others having jurisdiction over the
Project.
1.7.4 Providing services relative to future facilities, systems
and equipment which are not intended to be constructed during the
Construction Phase.
1.7.5 Providing services to investigate existing conditions or
facilities or to make measured drawings thereof, or to verify the
accuracy of drawings or other information furnished by the Owner.
1.7.6 Providing documents of alternate, separate or sequential
bids or providing extra services in connection with bidding,
negotiation or construction prior to the completion of the
Construction Documents Phase, when requested by the Owner.
1.7.7 Providing coordination of Work performed by separate
contractors or by the Owner's own forces.
1.7.8 Providing services in connection with the work of a
construction manager or separate consultants retained by the Owner.
1.7.9 Providing Detailed Estimates of Construction Cost, analyses
of owning and operating costs, or detailed quantity surveys or
inventories of material, equipment and labor.
1.7.10 Providing interior design and other similar services
required for or in connection with the selection, procurement or
installation of furniture, furnishings and related equipment.
1.7.11 Providing services for planning tenant or rental sources.
1.7.12 Making revisions in Drawings, Specifications or other
documents when such revisions are inconsistent with written
approvals or instructions previously given, are required by the
enactment or revision of codes, laws or regulations subsequent to
the preparation of such documents or are due to other causes not
solely within the control of the Architect.
1.7.13 Preparing Drawings, Specifications and supporting data and
providing other services in connection with Change Orders to the
extent that the adjustment in the Basic Compensation resulting from
the adjusted Construction Cost is not commensurate with the
services required of the Architect, provided such Change Orders are
required by causes not solely within the control of the Architect.
1.7.14 Making investigations, surveys, valuations, inventories or
detailed appraisals of existing facilities, and services required
in connection with construction performed by the Owner.
1.7.15 Providing consultation concerning replacement of any Work
damaged by fire or other cause during construction and furnishing
services as may be required in connection with the replacement of
such Work.
1.7.16 Providing services made necessary by the default of the
Contractor, or by major defects or deficiencies in the Work of the
Contractor, or by failure of performance of either the Owner or
Contractor under the Contract for Construction.
1.7.17 Preparing a set of reproducible record drawings showing
significant changes in the Work made during construction based on
marked-up prints, drawings and other data furnished by the
Contractor to the Architect.
1.7.18 Providing extensive assistance in the utilization of any
equipment or system such as initial start-up or testing, adjusting
and balancing, preparation of operation and maintenance manuals,
training personnel for operation and maintenance, and consultation
during operation.
1.7.19 Providing services after issuance to the Owner of the
final Certificate for Payment, or in the absence of a final
Certificate for Payment, more than sixty days after the Date of
Substantial Completion of the Work.
1.7.20 Preparing to serve or serving as an expert witness in
connection with any public hearing, arbitration proceeding or legal
proceeding.
1.7.21 Providing services of consultants for other than the
normal architectural, structural, mechanical and electrical
engineering services for the Project.
1.7.22 Providing any other services not otherwise included in
this Agreement or not customarily furnished in accordance with
generally accepted architectural practice.
1.8 TIME
1.8.1 The Architect shall perform Basic and Additional Services as
expeditiously as is consistent with professional skill and care and
the orderly progress of the Work. Upon request of the Owner, the
Architect shall submit for the Owner's approval, a schedule for the
performance of the Architect's services which shall be adjusted as
required as the Project proceeds, and shall include allowances for
periods of time required for the Owner's review and approval of
submissions and for approvals of authorities having jurisdiction
over the Project. This schedule, when approved by the Owner, shall
not, except for reasonable cause, be exceeded by the Architect.
ARTICLE 2
THE OWNER'S RESPONSIBILITIES
2.1 The Owner shall provide full information regarding
requirements for the Project including a program, which shall set
forth the Owner's design objectives, constraints and criteria,
including space requirements and relationships, flexibility and
expandability, special equipment and systems and site requirements.
2.2 If the Owner provides a budget for the Project it shall
include contingencies for bidding, changes in the Work during
construction, and other costs which are the responsibility of the
Owner, including those described in this Article 2 and in
Subparagraph 3.1.2. The Owner shall, at the request of the
Architect, provide a statement of funds available for the Project,
and their source.
2.3 The Owner shall designate, when necessary, a representative
authorized to act in the Owner's behalf with respect to the
Project. The Owner or such authorized representative shall examine
the documents submitted by the Architect and shall render decisions
pertaining thereto promptly, to avoid unreasonable delay in the
progress of the Architect's services.
2.4 The Owner shall furnish a legal description and a certified
land survey of the site, giving, as applicable, grades and lines of
streets, alleys, pavements and adjoining property; rights-of-way,
restrictions, easements, encroachments, zoning, deed restrictions,
boundaries and contours of the site; locations, dimensions and
complete data pertaining to existing buildings, other improvements
and trees; and full information concerning available service and
utility lines both public and private, above and below grade,
including inverts and depths.
2.5 The Owner shall furnish the services of soil engineers or
other consultants when such services are deemed necessary by the
Architect. Such services shall include test borings, test pits,
soil bearing values, percolation tests, air and water pollution
tests, ground corrosion and resistivity tests, including necessary
operations for determining sub-soil, air and water conditions, with
reports and appropriate professional recommendations.
2.6 The Owner shall furnish structural, mechanical, chemical and
other laboratory tests, inspections and reports as required by law
or the Contract Documents.
2.7 The Owner shall furnish all legal, accounting and insurance
counseling services as may be necessary at any time for the
Project, including such auditing services as the Owner may require
to verify the Contractor's Applications for Payment or to ascertain
how or for what purposes the Contractor uses the moneys paid by or
on behalf of the Owner.
2.8 The services, information, surveys and reports required by
Paragraphs 2.4 through 2.7 inclusive shall be furnished at the
Owner's expense, and the Architect shall be entitled to rely upon
the accuracy and completeness thereof.
2.9 If the Owner observes or otherwise becomes aware of any fault
or defect in the Project or nonconformance with the Contract
Documents, prompt written notice thereof shall be given by the
Owner to the Architect.
2.10 The Owner shall furnish required information and services
and shall render approvals and decisions as expeditiously as
necessary for the orderly progress of the Architect's services and
of the Work.
ARTICLE 3
CONSTRUCTION COST
3.1 Definition
3.1.1 The Construction Cost shall be the total cost or estimated
cost to the Owner of all elements of the Project designed or
specified by the Architect.
3.1.2 The Construction Cost shall include at current market
rates, including a reasonable allowance for overhead and profit,
the cost of labor and materials furnished by the Owner and any
equipment which has been designed, specified, selected or specially
provided for by the Architect.
3.1.3 Construction Cost does not include the Compensation of the
Architect and the Architect's consultants, the cost of the land,
rights-of-way, or other costs which are the responsibility of the
Owner as provided in Article 2.
3.2 RESPONSIBILITY FOR CONSTRUCTION COST
3.2.1 Evaluations of the Owner's Project budget, Statements of
Probable Construction Cost and Detailed Estimates of Construction
Cost, if any, prepared by the Architect, represent the Architect's
best judgment as a design professional familiar with the
construction industry. It is recognized, however, that neither the
Architect nor the Owner has control over the cost of labor,
materials or equipment, over the Contractor's methods of
determining bid prices, or over competitive bidding, market or
negotiating conditions. Accordingly, the Architect cannot and does
not warrant or represent that bids or negotiated prices will not
vary from the Project budget proposed, established or approved by
the Owner, if any, or from any Statement of Probable Construction
Cost or other cost estimate or evaluation prepared by the
Architect.
3.2.2 No fixed limit of Construction Cost shall be established as
a condition of this Agreement by the furnishing, proposal or
establishment of a Project budget under Subparagraph 1.1.2 or
Paragraph 2.2 or otherwise, unless such fixed limit has been agreed
upon in writing and signed by the parties hereto. If such a fixed
limit has been established, the Architect shall be permitted to
include contingencies for design, bidding and price escalation, to
determine what materials, equipment, component systems and types of
construction are to be included in the Contract Documents, to make
reasonable adjustments in the scope of the Project and to include
in the Contract Documents alternate bids to adjust the Construction
Cost to the fixed limit. Any such fixed limit shall be increased in
the amount of any increase in the Contract Sum occurring after
execution of the Contract for Construction.
3.2.3 If the Bidding or Negotiation Phase has not commenced
within three months after the Architect submits the Construction
Documents to the Owner, any Project budget or fixed limit of
Construction Cost shall be adjusted to reflect any change in the
general level of prices in the construction industry between the
date of submission of the Construction Documents to the Owner and
the date on which proposals are sought.
3.2.4 If a Project budget or fixed limit of Construction Cost
(adjusted as provided in Subparagraph 3.2.3) is exceeded by the
lowest bona fide bid or negotiated proposal, the owner shall (1)
give written approval of an increase in such fixed limit, (2)
authorize rebidding or renegotiating of the Project within a
reasonable time, (3) if the Project is abandoned, terminate in
accordance with Paragraph 10.2, or (4) cooperate in revising the
Project scope and quality as required to reduce the Construction
Cost. In the case of (4), provided a fixed limit of Construction
Cost has been established as a condition of this Agreement, the
Architect, without additional charge, shall modify the Drawings and
Specifications as necessary to comply with the fixed limit. The
providing of such service shall be the limit of the Architect's
responsibility arising from the establishment of such fixed limit,
and having done so, the Architect shall be entitled to compensation
for all services performed, in accordance with this Agreement,
whether or not the Construction Phase is commenced.
ARTICLE 4
DIRECT PERSONNEL EXPENSE
4.1 Direct Personnel Expense is defined as the direct salaries of
all the Architect's personnel engaged on the Project, and the
portion of the cost of their mandatory and customary contributions
and benefits related thereto, such as employment taxes and other
statutory employee benefits, insurance, sick leave, holidays,
vacations, pensions and similar contributions and benefits.
ARTICLE 5
REIMBURSABLE EXPENSES
5.1 Reimbursable Expenses are in addition to the Compensation for
Basic and Additional Services and include actual expenditures made
by the Architect and the Architect's employees and consultants in
the interest of the Project for the expenses listed in the
following Subparagraphs:
5.1.1 Delete
5.1.2 Delete
5.1.3 Expense of data processing and photographic production
techniques when used in connection with Additional Services.
5.1.4 If authorized in advance by the Owner, expense of overtime
work requiring higher than regular rates.
5.1.5 Expense of renderings, models and mock-ups requested by the
Owner.
5.1.6 Expense of any additional insurance coverage or limits,
including professional liability insurance, requested by the Owner
in excess of that normally carried by the Architect and the
Architect's consultants.
ARTICLE 6
PAYMENTS TO THE ARCHITECT
6.1 PAYMENTS ON ACCOUNT OF BASIC SERVICES
6.1.1 An initial payment as set forth in Paragraph 14.1 is the
minimum payment under this Agreement.
6.1.2 Subsequent payments for Basic Services shall be made
monthly and shall be in proportion to services performed within
each Phase of services, on the basis set forth in Article 14.
6.1.3 If and to the extent that the Contract Time initially
established in the Contract for Construction is exceeded or
extended through no fault of the Architect, compensation for any
Basic Services required for such extended period of Administration
of the Construction Contract shall be computed as set forth in
Paragraph 14.4 for Additional Services.
6.1.4 When compensation is based on a percentage of Construction
Cost, and any portions of the Project are deleted or otherwise not
constructed, compensation for such portions of the Project shall be
payable to the extent services are performed on such portions, in
accordance with the schedule set forth in Subparagraph 14.2.2,
based on (1) the lowest bona fide bid or negotiated proposal, or,
(2) if no such bid or proposal is received, the most recent
Statement of probable Construction Cost or Detailed Estimate of
Construction Cost for such portions of the Project.
6.2 PAYMENTS ON ACCOUNT OF ADDITIONAL SERVICES
6.2.1 Payments on account of the Architect's Additional Services
as defined in Paragraph 1.7 and for Reimbursable Expenses as
defined in Article 5 shall be made monthly upon presentation of the
Architect's statement of services rendered or expenses incurred.
6.3 PAYMENTS WITHHELD
6.3.1 No deductions shall be made from the Architect's
compensation on account of penalty, liquidated damages or other
sums withheld from payments to contractors, or on account of the
cost of changes in the Work other than those for which the
Architect is held legally liable.
6.4 PROJECT SUSPENSION OR TERMINATION
6.4.1 If the Project is suspended or abandoned in whole or in
part for more than three months, the Architect shall be compensated
for all services performed prior to receipt of written notice from
the Owner of such suspension or abandonment, together with
Reimbursable Expenses then due and all Termination Expenses as
defined in Paragraph 10.4. If the Project is resumed after being
suspended for more than three months, the Architect's compensation
shall be equitably adjusted.
ARTICLE 7
ARCHITECT'S ACCOUNTING RECORDS
7.1 Records of Reimbursable Expenses and expenses pertaining to
Additional Services and services performed on the basis of a
Multiple of Direct Personnel Expense shall be kept on the basis of
generally accepted accounting principles and shall be available to
the Owner or the Owner's authorized representative at mutually
convenient times.
ARTICLE 8
OWNERSHIP AND USE OF DOCUMENTS
8.1 Drawings and Specifications as instruments of service are and
shall remain the property of the Architect whether the Project for
which they are made is executed or not. The Owner shall be
permitted to retain copies, including reproducible copies of
Drawings and Specifications for information and reference in
connection with the Owner's use and occupancy of the Project. The
Drawings and Specifications shall not be used by the Owner on other
projects, for additions to this Project, or for completion of this
Project by others provided the Architect is not in default under
this Agreement, except by agreement in writing and with appropriate
compensation to the Architect.
8.2 Submission or distribution to meet official regulatory
requirements or for other purposes in connection with the Project
is not to be construed as publication in derogation of the
Architect's rights.
ARTICLE 9
ARBITRATION
9.1 All claims, disputes and other matters in question between
the parties to this Agreement, arising out of or relating to this
Agreement or the breach thereof, shall be decided by arbitration in
accordance with the Construction Industry Arbitration Rules of the
American Arbitration Association then obtaining unless the parties
mutually agree otherwise. No arbitration, arising out of or
relating to this Agreement, shall include, by consolidation,
joinder or in any other manner, any addition person not a party to
this Agreement except by written notice containing a specific
reference to this Agreement and signed by the Architect, the Owner,
and any other person sought to be joined. Any consent to
arbitration involving an additional person or persons shall not
constitute consent to arbitration of any dispute not described
therein or with any person not named or described therein. This
Agreement to arbitrate and any agreement to arbitrate with an
additional person or persons duly consented to by the parties to
this Agreement shall be specifically enforceable under the
prevailing arbitration law.
9.2 Notice of the demand for arbitration shall be filed in
writing with the other party to this Agreement and with the
American Arbitration Association. The demand shall be made within
a reasonable time after the claim, dispute or other matter in
question has arisen. In no event shall the demand for arbitration
be made after the date when institution of legal or equitable
proceedings based on such claim, dispute or other matter in
question would be barred by the applicable statute of limitations.
9.3 The award rendered by the arbitrators shall be final, and
judgment may be entered upon it in accordance with applicable law
in any court having jurisdiction thereof.
ARTICLE 10
TERMINATION OF AGREEMENT
10.1 This Agreement may be terminated by either party upon seven
days' written notice should the other party fail substantially to
perform in accordance with its terms through no fault of the party
initiating the termination.
10.2 This Agreement may be terminated by the Owner upon at least
seven days' written notice to the Architect in the event that the
Project is permanently abandoned.
10.3 In the event of termination not the fault of the Architect,
the Architect shall be compensated for all services performed to
termination date, together with Reimbursable Expenses then due and
all Termination Expenses as defined in Paragraph 10.4.
10.4 Termination Expenses include expenses directly attributable
to termination for which the Architect is not otherwise
compensated.
ARTICLE 11
MISCELLANEOUS PROVISIONS
11.1 Unless otherwise specified, this Agreement shall be governed
by the law of the principal place of business of the Architect.
11.2 Terms in this Agreement shall have the same meaning as those
in AIA Document A201, General Conditions of the Contract for
Construction, current as of the date of this Agreement.
11.3 As between the parties to this Agreement: as to all acts or
failures to act by either party to this Agreement, any applicable
statute of limitations shall commence to run and any alleged cause
of action shall be deemed to have accrued in any and all events not
later than the relevant Date of Substantial Completion of the Work,
and as to any acts or failures to act occurring after the relevant
Date of Substantial Completion, not later than the date of issuance
of the final Certificate for Payment.
11.4 The Owner and the Architect waive all rights against each
other and against the contractors, consultants, agents and
employees of the other for damages covered by any property
insurance during construction as set forth in the edition of AIA
Document A201, General Conditions, current as of the date of this
Agreement. The Owner and the Architect each shall require
appropriate similar waivers from their contractors, consultants and
agents.
ARTICLE 12
SUCCESSORS AND ASSIGNS
12.1 The Owner and the Architect, respectively, bind themselves,
their partners, successors, assigns and legal representatives to
the other party to this Agreement and to the partners, successors,
assigns and legal representatives of such other party with respect
to all covenants of this Agreement. Neither the Owner nor the
Architect shall assign, sublet or transfer any interest in this
Agreement without the written consent of the other.
ARTICLE 13
EXTENT OF AGREEMENT
13.1 This Agreement represents the entire and integrated
agreement between the Owner and the Architect and supersedes all
prior negotiations, representations or agreements, either written
or oral. This Agreement may be amended only by written instrument
signed by both Owner and Architect.
ARTICLE 14
BASIS OF COMPENSATION
The Owner shall compensate the Architect for the Scope of Services
provided, in accordance with Article 6, Payments to the Architect,
and the other Terms and Conditions of this Agreement, as follows:
14.1 AN INITIAL PAYMENT OF Zero dollars ($0.00) shall be made
upon execution of this Agreement and credited to the Owner's
account as follows:
14.2 BASIC COMPENSATION
14.2.1 FOR BASIC SERVICES, as described in Paragraphs 1.1 through
1.5, and any other services included in Article 15 as part of Basic
Services, Basic Compensation shall be computed as follows:
The Architect shall be paid 3.25 percent of the cost
of the work designed by them. "Cost of the work" does not include
the cost of certain Owner furnished equipment such as racks, lift
trucks, jacks, etc. The "cost of the work" does include the sales
tax savings that will accrue to the Owner should he choose to
employ financing through Industrial Development Bonds.
14.2.2 Where compensation is based on a Stipulated Sum or
Percentage of Construction Cost, payments for Basic Services shall
be made as provided in Subparagraph 6.1.2, so that Basic
Compensation for each Phase shall equal the following percentages
of the total Basic Compensation payable:
Schematic Design Phase: percent (10%)
Design Development Phase: percent (15%)
Construction Documents Phase: percent (50%)
Bidding or Negotiation Phase: percent (5%)
Construction Phase: percent (20%)
14.3 FOR PROJECT REPRESENTATION BEYOND BASIC SERVICES, as
described in Paragraph 1.6, Compensation shall be computed
separately in accordance with Subparagraph 1.6.2.
14.4 COMPENSATION FOR ADDITIONAL SERVICES
14.4.1 FOR ADDITIONAL SERVICES OF THE ARCHITECT, as described in
Paragraph 1.7, and any other services included in Article 15 as
part of Additional Services, but excluding Additional Services of
consultants, Compensation shall be computed as follows:
No additional services are anticipated; however, if any are
requested by the Owner, the Architects shall be paid on a time and
material basis as follows:
Senior Architects . . . . . . . . . . . . . . . . . $75.00 per hour
Junior Architects . . . . . . . . . . . . . . . . . .$50.00 per hour
Draftsmen - 2.5 times rates ($6.00 to $15.00 per hour)
Consultants - our costs times 1.4
Printing, stenographic, and telephone costs -
Our costs times 1.5
Travel at 25 cents per mile.
14.4.2 FOR ADDITIONAL SERVICES OF CONSULTANTS, including
additional structural, mechanical and electrical engineering
services and those provided under Subparagraph 1.7.21 or identified
in Article 15 as part of Additional Services, a multiple of (1.4)
times the amounts billed to the Architect for such services.
14.5 FOR REIMBURSABLE EXPENSES, as described in Article 5, and
any other items included in Article 15 as Reimbursable Expenses, a
multiple of (1.2) times the amounts expended by the Architect, the
Architect's employees and consultants in the interest of the
Project.
14.6 Payments due the Architect and unpaid under this Agreement
shall bear interest from the date payment is due at the rate
entered below, or in the absence thereof, at the legal rate
prevailing at the principal place of business of the Architect.
6%
14.7 The Owner and the Architect agree in accordance with the
Terms and Conditions of this Agreement that:
14.7.1 IF THE SCOPE of the Project or of the Architect's Services
is changed materially, the amounts of compensation shall be
equitably adjusted.
14.7.2 IF THE SERVICES covered by this Agreement have not been
completed within forty eight (48) months of the date hereof,
through no fault of the Architect, the amounts of compensation,
rates and multiples set forth herein shall be equitably adjusted.
ARTICLE 15
OTHER CONDITIONS OR SERVICES
The Architect's letter to Mr. Dennis Stewart dated June 11,
1994, and attached hereto is made a part of this Contract.
This Agreement entered into as of the day and year first
written above.
OWNER
The Industrial Development Board of the City of Bessemer
Piggly Wiggly Expansion Project
By D. T. Stewart
ARCHITECT
Holmes & Holmes, Architects
By Nicholas H. Holmes, Jr.
HOLMES & HOLMES
ARCHITECTS
257 NORTH CONCEPTION STREET
P.O. BOX 864
MOBILE, ALABAMA 36601
(205) 432-8871
FAX (205) 432-8872
June 11, 1994
Mr. Dennis Stewart, President
Piggly Wiggly Alabama Distributing Company
P.O. Box 2400
Bessemer, AL 35031
RE: Piggly Wiggly Expansion Project
Dear Mr. Stewart:
In accordance with our verbal proposal of May 30, 1994, we are
submitting herewith our proposal to provide architectural and
engineering services covering the proposed expansion of your plant
in Bessemer.
We propose to perform architectural and engineering services on
your project for 3.25 percent of the "cost of the work designed by
us." This includes all architectural work performed in our office,
plus structural, civil, mechanical, electrical, refrigeration, and
sprinkler system design performed by specialists in other offices,
retained and paid for by us.
We will assist you in the selection of certain items of material
handling equipment such as, racks shelving, dockboards, etc., but
we would not include the cost of these items as a part of the "work
designed by us."
We will not charge you for any travel or travel expenses in
connection with the work unless it entails travel to some other
location than Bessemer. We will visit and stay in as long and as
often as need be during the design phases of the work. We will have
a representative of our firm visit the job a minimum of one day a
week during construction, more often at certain stages.
The "cost of the work designed by us" will include the sales tax
savings that will accrue to you should you choose to employ
financing through Industrial Development Bonds.
We will absorb all printing and reproduction costs and all mailing,
shipping, and telephone costs.
We suggest that the AIA Standard Form of Agreement Between Owner
and Architect be used and we include two copies, executed by us.
Please sign both copies and return one copy for our records.
Please know that we are delighted to be working with you again on
this most important project.
Your sincerely,
Nicholas H. Holmes, Jr., FAIA
Holmes & Holmes, Architect
Copy to File
EXHIBIT 10.31
FIRST SUPPLEMENTAL GUARANTY AGREEMENT
FROM
PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC. TO
COMPASS BANK, AS TRUSTEE
WHEREAS, THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF
BESSEMER, a public corporation organized and existing under the
laws of the State of Alabama (the "Issuer"), and COMPASS BANK
(formerly Central Bank of the South), an Alabama banking
corporation (the "Trustee"), entered into a Mortgage and Indenture
of Trust, dated as of May 1, 1987, as recorded in Real 655, Page
554, in the Bessemer Division of the Jefferson Country Probate
Office (the "Indenture") under which the Issuer issued its
Industrial Development Revenue Bond (Piggly Wiggly Alabama
Distributing Co., Inc. Project), Series 1987 in the principal
amount of $20,000,000 (the "Series 1987 Bond");
WHEREAS, the project acquired with the proceeds of the Series
1987 Bond was leased by the Issuer to Piggly Wiggly Alabama
Distributing Co., Inc. (the "Lessee") by a Lease Agreement dated as
of May 1, 1987, as recorded in Real 655, Page 650, in the Bessemer
Division of the Jefferson County Probate Office (the "Lease");
WHEREAS, the Lessee, as guarantor (the "Guarantor"), provided
to the Trustee a Guaranty Agreement dated as of May 1, 1987 (the
"Guaranty Agreement"), under which the Guarantor guaranteed, in
addition to other obligations, full and prompt payment of the
principal, interest and any premium due on the Series 1987 Bond;
WHEREAS, Compass Bank (formerly Central Bank of the South)
owns 100% of the outstanding Series 1987 Bond;
WHEREAS, the Guarantor has requested that the Trustee enter
into this First Supplemental Guaranty Agreement and that the owner
of the Series 1987 Bond give its consent to the execution of this
First Supplemental Guaranty Agreement; and
WHEREAS, the owner of the Series 1987 Bond has given its
written consent to this First Supplemental Guaranty Agreement.
NOW THEREFORE, in consideration of the premises, the Guarantor
and the Trustee hereby agree to supplement and amend the Guaranty
Agreement as follows:
1. Section 2.7(a)(i) of the Guaranty Agreement is hereby
amended to state as follows:
"(i) the Guarantor's Tangible Net Worth
(A) for the fiscal year ending July 31, 1994 shall not be less than
$17,000,000, and (B) for each fiscal year ending after July 31,
1994 shall not be less than $17,000,000 plus an amount determined
by multiplying $750,000 times the whole number of fiscal years
elapsed since July 31, 1994;".
2. Section 2.7(a)(ii) of the Guaranty Agreement is hereby
amended to state as follows:
"(ii) the Guarantor shall maintain a Debt
to Tangible Net Worth Ratio of no more than 3.0 to 1.0;".
3. Section 2.7(a)(iv) of the Guaranty Agreement is hereby
amended to state as follows:
"(iv) the Guarantor shall not incur, directly or
indirectly, or contract for, directly or indirectly, (A) during the
fiscal year ending July 31, 1987, Capital Expenditures exceeding
$583,334 in the aggregate, and (B) during any single succeeding
fiscal year Capital Expenditures exceeding $1,000,000 in the
aggregate; provided, however, that the covenants contained in this
clause (iv) shall not be violated with respect to Capital
Expenditures in fiscal years ending after July 31, 1987 (a) if for
the most recently completed fiscal year and all other fiscal years
ending on or after July 1, 1988, the average amount of such Capital
Expenditures during such fiscal years did not exceed $1,000,000 in
the aggregate, or (b) as a result of the expansion of the
Guarantor's facilities to occur in the fiscal year of the Guarantor
ending on July 28, 1995 funded from the $10,000,000 revolving line
of credit from Compass Bank to the Guarantor closed on
approximately September 31, 1994;".
4. Section 2.7(a)(ix) of the Guaranty Agreement is hereby
amended by inserting the following clause prior to the period at
the end thereof:
", and (12) indebtedness under the $10,000,000
revolving line of credit from Compass Bank to the Guarantor closed
on approximately September 31, 19934".
IN WITNESS WHEREOF, the Guarantor has caused this First
Supplemental Guaranty Agreement to be executed in its respective
corporate name, has caused its corporate seal to be hereunto
affixed, and has caused this First Supplemental Guaranty Agreement
to be attested, all by its duly authorized officers, as of the
first day of September, 1994.
PIGGLY WIGGLY ALABAMA
DISTRIBUTING CO., INC.
By D. T. Stewart
Its President
Accepted this 30 day of September, 1994, by:
COMPASS BANK, as Trustee
By David S. Cochran
Its Vice President
ATTEST:
ACKNOWLEDGMENT OF GUARANTOR
STATE OF ALABAMA )
JEFFERSON COUNTY )
I, the undersigned, a Notary Public in and for said County in
said State, do hereby certify that D. T. Stewart, whose name as
President of Piggly Wiggly Alabama Distributing Co., Inc. is singed
to the foregoing First Supplemental Guaranty Agreement, and who is
known to me and known to be such officer, acknowledged before me on
this day that, being informed of the contents of said First
Supplemental Guaranty Agreement, he, as such officer and with full
authority, executed the same voluntarily for and as the act of said
company.
Given under my hand and seal of this office this 9 day of
September, 1995.
Bobby L. Martin
Notary Public
CONSENT OF BONDHOLDER
The undersigned, Compass Bank, does hereby certify that it is
the owner of 100% of the outstanding Industrial Development Revenue
Bond (Piggly Wiggly Alabama Distributing Co., Inc. Project), Series
1987 issued by The Industrial Development Board of the City of
Bessemer in the initial principal amount of $20,000,000 (the
"Bond"), and does hereby give its full consent as owner of 100% of
the Bond to the foregoing First Supplemental Guaranty Agreement.
This the 30 day of September, 1994.
COMPASS BANK, as Bondholder
By David S. Cochran
Its Vice President
ATTEST:
EXHIBIT 10.32
AMENDMENT TO
THE INDUSTRIAL DEVELOPMENT BOARD
OF THE CITY OF BESSEMER
INDUSTRIAL DEVELOPMENT REVENUE BOND
(PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC. PROJECT)
SERIES 1987
Pursuant to that certain First Supplemental Mortgage and
Indenture Trust dated as of September 1, 1994, between The
Industrial Development Board of the City of Bessemer and Compass
Bank, The Industrial Development Board of the City of Bessemer
Industrial Development Revenue Bond (Piggly Wiggly Alabama
Distributing Co., Inc. Project), Series 1987 (the "Bond"), is
hereby amended as follows:
1. The rate of interest borne by the Bond (the "Applicable
Rate") shall be calculated and determined as follows: during the
period commencing on September 16, 1994 until and including the
date of actual payment in full of the Bond, the Bond shall bear
interest at a rate "per annum" equal to 8.625%.
2. Clause (iii) of subparagraph (a) of the fourth
paragraph beginning on page five of the Bond is hereby amended to
state as follows:
"(iii) a redemption fee or premium equal to one-twelfth
(1/12) of the Annual Yield Differential (as defined below),
multiplied by the number of months during the period beginning on
the redemption date and ending on April 1, 2002, and discounted to
present value by using a discount factor of the yield on the lowest
yielding U.S. Treasury Bond/Bill with a maturity date closest to
April 1, 2002; provided, however, an aggregate principal amount of
this Bond not to exceed $750,000 in any fiscal year of the Lessee
may be optionally redeemed without premium if such redemption price
is paid from internally generated funds (not from a refinancing);
however, notwithstanding the foregoing or any other provisions in
this Bond or in the Indenture, including without limitation,
Section 1002 of the Indenture, in the event of acceleration of this
Bond at any time and subsequent involuntary or voluntary redemption
or prepayment, in full or in part, regardless of the source of
redemption or prepayment funds, a fee or premium shall be
applicable and shall be in the amount to be calculated pursuant to
the methodology in this clause (iii); as used herein, the term
"Annual Yield Differential" shall mean the difference (but not less
than zero) between (i) the yield on the lowest yielding U.S.
Treasury Bond/Bill with a maturity date closest to April 1, 2002,
on September 16, 1994, and (ii) the yield on the lowest yielding
U.S. Treasury Bond/Bill with a maturity date closest to April 1,
2002, on the date of redemption or prepayment, multiplied by the
principal amount of any prepayment; U.S. Flower bonds shall be
excluded from the computation of the Annual Yield Differential."
3. Any reference in this Bond (except as specifically
described in paragraph 2 immediately hereinabove) to a premium
equal to six (6) months' interest is hereby amended to mean a
premium equal to one-twelfth (1/12) of the Annual Yield
Differential (as defined below), multiplied by the number of months
during the period beginning on the redemption date and ending on
April 1, 2002, and discounted to present value by using a discount
factor of the yield on the lowest yielding U.S. Treasury Bond/Bill
with a maturity date closest to April l, 2002; as used herein, the
term "Annual Yield Differential" shall mean the difference (but not
less than zero) between (i) the yield on the lowest yielding U.S.
Treasury Bond/Bill with a maturity date closest to April 1, 2002,
on September 16, 1994, and (ii) the yield on the lowest yielding
U.S. Treasury Bond/Bill with a maturity date closest to April 1,
2002, on the date of redemption or prepayment, multiplied by the
principal amount of any prepayment; U.S. Flower bonds shall be
excluded from the computation of the Annual Yield Differential.
IN WITNESS WHEREOF, The Industrial Development Board of the
City of Bessemer has caused this Amendment to The Industrial
Development Board of the city of Bessemer Industrial Development
Revenue Bond (Piggly Wiggly Alabama Distributing Co., Inc.
Project), Series 1987 to be executed in its name by the manual
signature of the Chairman of its Board of Directors and has caused
its official corporate seal to be impressed hereon and attested by
the manual signature of its Secretary, all as of the 30 day of
September, 1994.
THE INDUSTRIAL DEVELOPMENT BOARD
OF THE CITY OF BESSEMER
By Lanett Davis
Chairman of its Board of Directors
ATTEST: Robert E. Parker
Secretary
CERTIFICATE OF AUTHENTICATION
The above Amendment to The Industrial Development Board of the
City of Bessemer Industrial Development Revenue Bond (Piggly Wiggly
Alabama Distributing Co., Inc. Project), Series 1987 is being
attached to the Series 1987 Bond pursuant to the above-mentioned
First Supplemental Mortgage and Indenture of Trust.
COMPASS BANK, Birmingham, Alabama, as Trustee
By David S. Cochran
Authorized Officer
EXHIBIT 10.33
FIRST SUPPLEMENTAL
MORTGAGE AND INDENTURE OF TRUST
BETWEEN
THE INDUSTRIAL DEVELOPMENT BOARD
OF THE CITY OF BESSEMER
AND
COMPASS BANK
WHEREAS, THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF
BESSEMER, a public corporation and existing under the laws of the
State of Alabama (the "Issuer"), and COMPASS BANK (formerly Central
Bank of the South), an Alabama banking corporation (the "Trustee"),
entered into a Mortgage and Indenture of Trust, dated as of May 1,
1987, as recorded in Real 655, Page 554, in the Bessemer Division
of the Jefferson County Probate Office (the "Indenture") under
which the Issuer issued its Industrial Development Revenue Bond
(Piggly Wiggly Alabama Distributing Co., Inc. Project), Series 1987
in the principal amount of $20,000,000 (the "Series 1987 Bond");
WHEREAS, the project acquired with the proceeds of the Series
1987 Bond was leased by the Issuer to Piggly Wiggly Alabama
Distributing Co., Inc. (the "Lessee") by a Lease Agreement dated as
of May 1, 1987, as recorded in Real 655, Page 650, in the Bessemer
Division of the Jefferson County Probate Office (the "Lease");
WHEREAS, the Lessee, as guarantor (the "Guarantor"), provided
to the Trustee a Guaranty Agreement dated as of May 1, 1987, under
which the Guarantor guaranteed, in addition to other obligations,
full and prompt payment of the principal, interest and any premium
due on the Series 1987 Bond;
WHEREAS, Compass Bank (formerly Central Bank of the South)
owns 100% of the outstanding Series 1987 Bond;
WHEREAS, the Lessee has requested that the Issuer, the Trustee
and the owner of the Series 1987 Bond give their consent to a
change in the interest rate on the Series 1987 Bond; and
WHEREAS, the owner of the Series 1987 Bond, the Lessee and the
Guarantor have given their written consent to this First
Supplemental Mortgage and Indenture of Trust.
NOW THEREFORE, in consideration of the premises, the Issuer
and the Trustee hereby agree to supplement and amend the Indenture
as follows:
1. The rate of interest borne by the Series 1987 Bond (the
"Applicable Rate") shall be calculated and determined as follows:
during the period commencing on September 16, 1994 until and
including the date of actual payment in full of the Series 1987
Bond, the Series 1987 Bond shall bear interest at a rate "per
annum" equal to 8.625%.
2. Section 301(A)(iii) of the Indenture is hereby amended
to state as follows:
"(iii) a redemption fee or premium equal to one-twelfth
(1/12) of the Annual Yield Differential (as defined below),
multiplied by the number of months during the period beginning on
the redemption date and ending on April 1, 2002, and discounted to
present value by using a discount factor of the yield on the lowest
yielding U.S. Treasury Bond/Bill with a maturity date closest to
April 1, 2002; provided, however, an aggregate principal amount of
the Series 1987 Bond not to exceed $750,000 in any fiscal year of
the Lessee may be optionally redeemed without premium if such
redemption price is paid from internally generated funds (not from
a refinancing); however, notwithstanding the foregoing or any other
provisions in the Series 1987 Bond or in this Indenture, including
without limitation, Section 1002 of this Indenture, in the event of
acceleration of the Series 1987 Bond at any time and subsequent
involuntary or voluntary redemption or prepayment, in full or in
part, regardless of the source of redemption or prepayment funds,
a fee or premium shall be applicable and shall be in the amount to
be calculated pursuant to the methodology in this clause (iii); as
used herein, the term "Annual Yield Differential" shall mean the
difference (but not less than zero) between (i) the yield on the
lowest yielding U.S. Treasury Bond/Bill with a maturity date
closest to April 1, 2002, on September 16, 1994, and (ii) the yield
on the lowest yielding U.S. Treasury Bond/Bill with a maturity date
closest to April 1, 2002, on the date of redemption or prepayment,
multiplied by the principal amount of any prepayment; U.S. Flower
bonds shall be excluded from the computation of the Annual Yield
Differential."
3. Any reference in the Indenture (except as specifically
described in paragraph 2 immediately hereinabove) to a premium
equal to six (6) months' interest is hereby amended to mean a
premium equal to one-twelfth (1/12) of the Annual Yield
Differential (as defined below), multiplied by the number of months
during the period beginning on the redemption date and ending on
April 1, 2002, and discounted to present value by using a discount
factor of the yield on the lowest yielding U.S. Treasury Bond/Bill
with a maturity date closest to April l, 2002; as used herein, the
term "Annual Yield Differential" shall mean the difference (but not
less than zero) between (i) the yield on the lowest yielding U.S.
Treasury Bond/Bill with a maturity date closest to April 1, 2002,
on September 16, 1994, and (ii) the yield on the lowest yielding
U.S. Treasury Bond/Bill with a maturity date closest to April 1,
2002, on the date of redemption or prepayment, multiplied by the
principal amount of any prepayment; U.S. Flower bonds shall be
excluded from the computation of the Annual Yield Differential.
4. Simultaneously with the delivery of this First
Supplemental Mortgage and Indenture of Trust, the officers of the
Issuer shall execute an Amendment to The Industrial Development
Board of the City of Bessemer Industrial Development Revenue Bond
(Piggly Wiggly Alabama Distributing Co., Inc. Project),
incorporating the amendment set out in the preceding paragraphs, to
be attached to the original Series 1987 Bond, and the Trustee shall
authenticate and deliver the amended Series 1987 Bond to Compass
Bank, as Bondholder.
IN WITNESS WHEREOF, the Issuer and the Trustee have caused
this First Supplemental Mortgage and Indenture to be executed in
their respective corporate names, have caused their respective
corporate seals to be hereunto affixed, and have caused this First
Supplemental Mortgage and Indenture of Trust to be attested, all by
their duly authorized officers, as of the first day of September,
1994.
THE INDUSTRIAL DEVELOPMENT BOARD
OF THE CITY OF BESSEMER
By Lanett Davis
Chairman of its Board of Directors
ATTEST: Robert E. Parker
Secretary
COMPASS BANK
By David S. Cochran
Its Vice President
ATTEST:
ACKNOWLEDGMENT OF ISSUER
STATE OF ALABAMA )
JEFFERSON COUNTY )
I, the undersigned, a Notary Public in and for said County in
said State, do hereby certify that Lanett Davis, whose name as
Chairman of the Board of Directors of The Industrial Development
Board of the City of Bessemer is signed to the foregoing First
Supplemental Mortgage and Indenture of Trust, and who is known to
me and known to be such officer, acknowledged before me on this day
that, being informed of the contents of said First Supplemental
Mortgage and Indenture of Trust, he, as such officer and with full
authority, executed the same voluntarily for and as the act of said
Board.
Given under my hand and seal of office this 6 day of
September, 1994.
Bobby L. Martin
Notary Public
ACKNOWLEDGMENT OF TRUSTEE
STATE OF ALABAMA )
JEFFERSON COUNTY )
I, the undersigned, a Notary Public in and for said County in
said State, do hereby certify that David Cochran, whose name as
Vice President of Compass Bank, is signed to the foregoing First
Supplemental Mortgage and Indenture of Trust, and who is known to
me and known to be such officer, acknowledged before me on this day
that, being informed of the contents of said First Supplemental
Mortgage and Indenture of Trust, he, as such officer and with full
authority, executed the same voluntarily for and as the act of said
Bank.
Given under my hand and seal of office this 6th day of
September, 1994.
Pat L. Smith
Notary Public
CONSENT BY BONDHOLDER
The undersigned, Compass Bank, does hereby certify that it is
the owner of 100% of the outstanding Industrial Development Revenue
Bond (Piggly Wiggly Alabama Distributing Co., Inc. Project), Series
1987 issued by The Industrial Development Board of the City of
Bessemer in the initial principal amount of $20,000,000 (the
"Bond"), and does hereby give its full consent as owner of 100% of
the Bond to the foregoing First Supplemental Mortgage and Indenture
of Trust.
This the 30 day of September, 1994.
COMPASS BANK, as Bondholder
By David S. Cochran
ATTEST:
CONSENT BY LESSEE
The undersigned, Piggly Wiggly Alabama Distributing Co., Inc.,
as Lessee under the Lease Agreement dated as of May 1, 1987 between
the Lessee and The Industrial Development Board of the City of
Bessemer, does hereby give its full consent to the execution and
delivery of the foregoing First Supplemental Mortgage and Indenture
of Trust.
This the 9 day of September, 1994.
PIGGLY WIGGLY ALABAMA
DISTRIBUTING CO., INC.
By D. T. Stewart
Its President
ATTEST: Bobby L. Martin
Its Vice President
CONSENT BY GUARANTOR
The undersigned, Guarantor under the Guaranty Agreement dated
as of May 1, 1987 (the "Guaranty Agreement") from the undersigned
Compass Bank (formerly Central Bank of the South), does hereby give
its full consent to the execution and delivery of the foregoing
First Supplemental Mortgage and Indenture of Trust and hereby
acknowledges, restates and reaffirms all of its obligations under
the Guaranty Agreement, which shall remain in full force and
effect, including without limitation, with respect to The
Industrial Development Board of the City of Bessemer Industrial
Development Revenue Bond (Piggly Wiggly Alabama Distributing Co.,
Inc. Project), Series 1987, as amended pursuant to the foregoing
First Supplemental Mortgage and Indenture of Trust.
This the 9 day of September, 1994.
PIGGLY WIGGLY ALABAMA
DISTRIBUTING CO., INC.
By D. T. Stewart
Its President
ATTEST: Bobby L. Martin
Its Vice President
EXHIBIT 10.34
STATE OF ALABAMA )
JEFFERSON COUNTY )
FIRST AMENDMENT TO THE
PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC.
PROFIT SHARING PLAN AND TRUST
WHEREAS, PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC.,
(hereinafter referred to as "Employer"), adopted an Employee Profit
Sharing Plan and Trust effective as of December 31, 1976; and
WHEREAS, said Profit Sharing Plan and Trust was amended by
restatement on May 17, 1990, with an effective date of August 1,
1988;
WHEREAS, said Profit Sharing Plan and Trust was further
amended by restatement on September 13, 1993, with an effective
date of August 1, 1988;
WHEREAS, it is necessary to amend said restated Plan and the
same is hereby amended in the following respects:
Section 8.1 (a) of Article VIII is hereby deleted in its
entirety and the following added in lieu thereof:
ARTICLE VIII
AMENDMENT, TERMINATION AND MERGERS
8.1 AMENDMENT
(a) The Employer reserves the power at any time and from
time to time (and retroactively, if necessary or appropriate to
meet the requirements of the Code or ERISA) to modify or amend, in
whole or in part, any or all provisions of the Plan, provided,
however, that no modification or amendment shall divest an Employee
of a right to those Benefits to which he or she has become entitled
under the Plan. Any amendment to this Plan may be effected by a
written resolution adopted by a majority of the Board of Directors
of the Employer. However, any amendment which affects the rights,
duties or responsibilities of the Trustee and Administrator may
only be made with the Trustee's and Administrator's written
consent. The Trustee shall not be required to execute any such
amendment unless the Trust provisions contained herein are a part
of the Plan and the amendment affects the duties of the Trustee
hereunder."
The foregoing amendment shall be effective as of August 1,
1988.
IN WITNESS WHEREOF, the Employer, pursuant to the approval of
its Board of Directors, has caused these presents to be executed by
its duly authorized officers and its corporate seal to be hereunto
affixed, and the Trustee, for itself, its successors and assigns,
has hereunto set its hand and seal on this the 29 day of Sept.,
1994.
EMPLOYER:
PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC.
By D. T. Stewart
Its President
ATTEST: Bobby L. Martin
Its Vice President
TRUSTEE:
COMPASS BANK
(formerly Central Bank of the South)
By Linda Trucker
ATTEST: Patsy Z. Alford
EXHIBIT 10.35
STATE OF ALABAMA )
JEFFERSON COUNTY )
FIRST AMENDMENT TO THE
PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC.
EMPLOYEE BENEFIT PLAN AND TRUST
WHEREAS, PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC.,
(hereinafter referred to as "Employer"), adopted an Employee
Benefit Plan and Trust effective as of August 1, 1989; and
WHEREAS, it is necessary to amend said Plan and the same is
hereby amended in the following respects:
Section 9.01 of Article IX is hereby deleted in its entirety
and the following added in lieu thereof:
ARTICLE IX
AMENDMENT OF PLAN AND REPLACEMENT OF TRUSTEE
Section 9.01. Amendment of Agreement. The Employer reserves
the right at any time and from time to time to amend in whole or in
part any or all of the provisions of this Agreement, with the
exception of Section 3.03 hereof, by an instrument in writing duly
acknowledged and delivered to the Trustee, provided that no such
amendment which affects the rights, duties, responsibilities or
immunities of the Trustee may be made without its consent. Any such
amendment shall be by a written resolution of a majority of the
Board of Directors of the Employer.
The foregoing amendment shall be effective as of August 1,
1989.
IN WITNESS WHEREOF, the Employer, pursuant to the approval of
its Board of Directors, has caused these presents to be executed by
its duly authorized officers and its corporate seal to be hereunto
affixed, and the Trustee, for itself, its successors and assigns,
has hereunto set its hand and seal on this the 29 day of Sept.,
1994.
EMPLOYER:
PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC.
By D. T. Stewart
Its President
ATTEST: Bobby L. Martin
Its VP
TRUSTEE:
COMPASS BANK
(formerly Central Bank of the South)
By Peggy England
Its Vice President & Trust Officer
ATTEST: David B. Jones
Its Assistant Secretary
EXHIBIT 10.36
COMMERCIAL SALES CONTRACT
Graham & Company, Inc.
2200 Woodcrest Place, Suite 210
Birmingham, Alabama 35209
Phone 205 871-7100 Fax 205 871-3331
March 24, 1994
PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC. (SELLER) hereby agrees
to sell and DOC'S TRANSFER AND WAREHOUSE, OR ITS ASSIGNS
(PURCHASER) hereby agrees to purchase the following described real
estate, together with the improvements thereon and appurtenances
thereto (Property) situated in the City of Birmingham, County of
Jefferson, Alabama, on the terms stated below: Address: 601
Republic Circle, Birmingham, Alabama
AND LEGALLY DESCRIBED AS:
Lot See Exhibit "A" attached Block Survey
Map Book Page , as
recorded in the office of the Judge of Probate of , County.
1. THE PURCHASE PRICE shall be $750,000 (/s/ D.T.S./CEW)
payable as follows:
EARNEST MONEY, (see below) $20,000 (/s/ D.T.S./CEW)
CASH on closing this sale $730,000 (/s/ D.T.S./CEW)
Subject to the Terms and Conditions contained
in Exhibit "B" attached.
2. AGENCY DISCLOSURE: The listing agency Graham & Company,
Inc., represents Seller, and the selling agency Graham & Company,
Inc. represents Seller
D.T.S. Seller's Initials
C.E.W. Purchaser's Initials
3. CONDITION OF PROPERTY: Neither Seller nor any Agent makes
any representations or warranties regarding the condition of the
property except to the extent expressly and specifically set forth
herein. Purchaser has the obligation to determine, either
personally or through or with a representative of Purchaser's
choosing, any and all conditions of the property material to
Purchaser's decision to buy the property, including without
limitation, the condition of the heating, cooling, plumbing and
electrical systems and any built-in appliances, and the roof and
the basement, including floors; structural condition; subsurface
condition; utility and sewer or septic tank availability and
condition.
a. Except as may be required in order to comply with 3b
below, Seller shall not be required to make any repairs to the
Property whatsoever under this Contract. Purchaser accepts the
Property in its present "as is" condition, including ordinary wear
and tear to the closing date. However, if the Property suffers
material damage beyond ordinary wear and tear prior to the closing
date, and Seller refuses to pay for any repairs reasonably required
to restore the Property to a condition at least as good as
previously existing, ordinary wear and tear excepted, Purchaser may
proceed with the closing or cancel the Contract and recover the
earnest money by notifying Seller in writing of the cancellation
with 48 hours of Purchaser's receipt of Seller's notice of refusal
to pay for such repairs; provided, that the notice of cancellation
must in any event be received prior to closing.
b. Seller agrees to deliver the heating, cooling,
plumbing and electrical systems and any built-in appliances in
normal operating condition at the time of closing provided, it
shall be the responsibility of Purchaser to inspect said systems
and equipment prior to and notify seller immediate of any systems
that are not in normal operation condition. Purchaser's failure to
provide such notification prior to closing shall conclusively
establish that Seller has satisfied this covenant. (OMITTED)
4. EARNEST MONEY & PURCHASER'S DEFAULT: Seller hereby
authorizes the listing Agency, Graham & Company, Inc. to hold the
earnest money in trust for Seller pending the fulfillment of this
contract. In the event Purchaser fails to carry out and perform the
terms of this contract, the earnest money shall be forfeited as
liquidated damages at the option of Seller, provided Seller agrees
to the cancellation of this contract. Said earnest money so
forfeited shall be divided equally between Seller and his Agent. In
the event both Purchaser and Seller claim the earnest money, the
person or firm holding the earnest money may interplead the
disputed portion of the earnest money into court.
5. CONVEYANCE: Seller agrees to convey the Property to
Purchaser by general warranty deed, free of all encumbrances except
as herein set forth, and Seller agrees that any encumbrances not
herein excepted or assumed will be cleared at the time of closing.
The Property is sold and is to be conveyed subject to: (i) mineral
and mining rights not owned by Seller; (ii) existing leases and
tenant escrow deposits, that are to be transferred to Purchaser,
subject to any present management and/or rental commission
agreements thereon; (iii) present zoning classification of M-2,
Heavy Industrial; (iv) is not located in a flood plain; and (v)
unless otherwise agreed herein, subject to utility easements
serving the Property, subdivision covenants and restrictions, and
building lines of record, provided that none of the foregoing
materially impair use of the Property for its intended purposes.
6. TITLE INSURANCE: Seller agrees to furnish Purchaser a
standard form title insurance policy by a company qualified to
insure titles in Alabama in the amount of the purchase price,
insuring Purchaser against loss on account of any defect or
encumbrance in the title unless herein excepted; otherwise, the
earnest money shall be refunded. If a mortgagee's title insurance
policy is obtained by Purchaser at the time of closing, the total
expense of the owner's and mortgagee's policies will be divided
equally between Seller and Purchaser, even if the Mortgagee is the
Seller.
7. SURVEY: Purchaser does require a survey by a registered
Alabama land surveyor of Purchaser's choosing. The survey shall be
at Purchaser's expense.
8. PRORATIONS: Ad valorem taxes, rents, operating expenses,
insurance and accrued interest on mortgages assumed, if any, are to
be prorated between Seller and Purchaser as of the date of closing,
and any advance escrow deposits held by mortgagees shall be
credited to the Seller. UNLESS AGREED HEREIN, ALL AD VALOREM TAXES
EXCEPT MUNICIPAL ARE PRESUMED TO BE PAID IN ARREARS FOR PURPOSES OF
PRORATION; MUNICIPAL TAXES, IF ANY ARE PRESUMED TO BE PAID IN
ADVANCE.
9. CLOSING & POSSESSION DATES: The sale shall be closed and
the deed delivered on or before 30 days from full execution subject
to Additional Terms and Conditions (Paragraph 2), except Seller
shall have a reasonable length of time within which to perfect
title or cure defects in the title to the Property. Possession is
to be given on delivery of the deed. (/s/ D.T.S. & CEW)
10. DISCLAIMER: Seller and Purchaser acknowledge that they
have not relied upon advice or representations of Broker (or
Broker's associated salespersons) relative to (i) the legal or tax
consequences of this contract and the sale, purchase or ownership
of the Property, (ii) the structural condition of the Property,
including condition of the roof and basement; (iii) construction
materials; (iv) the nature and operating condition of the
electrical, heating, air conditioning, plumbing, water heating
systems and appliances; (v) the availability of utilities or sewer
services; (vi) the investment or resale value of the Property;
(vii) projections of income or operating expenses; or (viii) any
other matters affecting their willingness to sell or purchase the
Property on terms and price herein set forth. Seller and Purchaser
acknowledge that if such matters are of concern to them in the
decision to sell or purchase the Property, they have sought and
obtained independent advice relative thereto.
11. SELLER WARRANTS that unless excepted herein, Seller has
not received notification from any lawful authority regarding any
assessments, pending public improvements, repairs, replacement, or
alterations to the Property that have not been satisfactorily made.
Seller warrants that there is no unpaid indebtedness on the
Property except as described in the contract. Seller warrants he is
the fee owner of the property or is authorized to execute this
document for the fee owner. THESE WARRANTIES SHALL SURVIVE THE
DELIVERY OF THE DEED.
12. RISK OF LOSS: Seller agrees to keep in force sufficient
hazard insurance on the Property to protect all interests until
this sale is closed and the deed is delivered. If the Property is
destroyed or materially damaged between the date hereof and the
closing, and Seller is unable or unwilling to restore it to its
previous condition prior to closing, Purchaser shall have the
option of cancelling this contract and receiving the Earnest Money
back or accepting the Property in its then condition. If Purchaser
elects to accept the Property in its damaged condition, any
insurance proceeds otherwise payable to Seller by reason of such
damage shall be applied to the balance of the purchase price or
otherwise be payable to Purchaser.
13. HAZARDOUS SUBSTANCES: Seller and Purchaser expressly
acknowledge that the Broker(s) have not made an independent
investigation or determination with respect to the existence or
nonexistence of asbestos, PCB transformers, or other toxic,
hazardous or contaminated substances or gases in, on, or about the
Property, or for the presence of underground storage tanks. Any
such investigation or determination shall be the responsibility of
Seller and/or Purchaser and Broker(s) shall not be held
responsible.
14. FOREIGN INVESTMENT IN REAL PROPERTY TAX ACT (FIRPTA): In
the closing of this transaction, Seller and Purchaser shall comply
with the FIRPTA and the regulations promulgated thereunder by the
IRS.
15. ENTIRE AGREEMENT: This contract constitutes the entire
agreement between Purchaser and Seller regarding the Property, and
supersedes all prior discussion, negotiations and agreements
between Purchaser and Seller, whether oral or written. Neither
Purchaser, Seller, nor Broker nor any sales agent shall be bound by
any understanding, agreement, promise, or representation concerning
the Property, expressed or implied, not specified herein.
THIS IS INTENDED TO BE A LEGALLY BINDING CONTRACT. IF YOU DO
NOT UNDERSTAND THE LEGAL EFFECT OF ANY PART OF THIS CONTRACT, SEEK
LEGAL ADVICE BEFORE SIGNING.
Each of the parties acknowledges that he has a right to be
represented at all times in connection with this Contract and the
closing by an attorney of his own choosing, at his own expense.
Doc's Transfer and Warehouse, Inc.
or its Assigns
Purchaser
H. Y. W By: C. E. Willis
Witness to Purchaser's Signature Its President
PIGGLY-WIGGLY ALABAMA DISTRIBUTING
COMPANY
Seller
Bobby L. Martin By: D. T. Stewart
Witness to Seller's Signature Its President
EARNEST MONEY: Receipt is hereby acknowledged of the earnest money
as hereinafter set forth; Cash X
Firm: Graham & Company, Inc.
COMMISSION: THE COMMISSION PAYABLE TO THE BROKER(S) IN THIS SALE IS
NOT SET BY BIRMINGHAM AREA BOARD OF REALTORS, INC. BUT IN ALL CASES
IN NEGOTIABLE BETWEEN THE BROKER(S) AND THE CLIENT. In this
contract, Seller agrees to pay to Graham & Co., Inc., Broker(s) in
this transaction, in CASH at closing, a commission in the amount of
six percent (6%) of the total purchase price.
C.E.W. D.T.S.
Purchaser Seller
Exhibit "A"
Legal Description: Lot 9-B, according to the Resurvey of Lot 9 of
Republic Industrial Park, First Sector, as recorded in Map Book
104, Page 64, approximately 2.95 acres, and Lot 9-C 1, according to
the Resurvey of Lot 9-C, approximately 5.37 acres, of a Resurvey of
Lot 9 of Republic Industrial Park, First Sector, as recorded in Map
Book 110, Page 43, Jefferson County, Alabama subject to mortgage
recorded in Real Volume 1101, Page 695, Office of the Probate Court
of Jefferson County, Alabama, and assigned by instrument recorded
in Real Volume 1188, Page 633, in said Probate office to
Metropolitan Life Insurance Company, a corporation and further
subject to ad valorem taxes due October 1, 1977, and to easements
and rights of way of record.
/s/ C.E.W.
Exhibit "B"
ADDITIONAL TERMS AND CONDITIONS
1. The sale is subject to Purchaser obtaining a loan commitment
that is acceptable to it. The terms shall include but not be
limited to at least 80% of the sales price to be mortgaged at an
interest rate no greater than 8 1/2%. Purchaser shall have fifteen
days to fulfill this contingency.
2. At closing, Seller at its expense shall deliver to Purchaser
a Phase I site assessment of the subject property. The sale is
contingent upon the review and acceptance of the site assessment by
the Purchaser and its lender. Purchaser and its lender shall accept
or reject the assessment within seven days of the receipt of the
Phase I survey. Any exceptions or objections of Purchaser shall be
made in writing, and Seller shall have a reasonable time either to
remedy the objections or elect to refund the earnest money to
Purchaser.
3. Purchaser shall have the right to lease the property at terms
acceptable to both Seller and Purchaser at the date of full
execution of the agreement for a period of three (3) years or until
performance of the contract, whichever comes first. See attached
form as Exhibit "C". It is understood that the lease shall be a
rate of $1.50 per square foot net of all operating expenses
including but not limited to taxes, insurance and building
maintenance. Found in Exhibit "C" attached. (/s/ D.T.S.)
/s/ C.E.W.
Exhibit "C"
Graham & Company, Inc.
2200 Woodcrest Place
Suite 210
Birmingham, Alabama 35209
Phone 205/871-7100
Fax 205/871-3331
COMMERCIAL LEASE
This is a legally binding contract. If not understood, seek
competent advice.
APPROVED BY BIRMINGHAM AREA BOARD OF REALTORS LEASE FORM
AMENDED OCTOBER, 1976 150-C&S
STATE OF ALABAMA )
JEFFERSON COUNTY )
This lease made this 24 day of March, 1994 by and between Piggly
Wiggly Alabama Distributing Co., Inc. ("Lessor"), by GRAHAM &
COMPANY, INC. ("Agent"), and by Doc's Transfer and Warehouse, Inc.
("Lessee"):
WITNESSETH: That the Lessor does hereby demise and let unto
the Lessee the following described premises in the City of
Birmingham, Alabama, to-wit:
601 Republic Circle
Birmingham, Alabama
Subject to existing easements, if any, and the regulatory laws and
ordinances of the political subdivision in which the property is
situated, for use and occupation by the Lessee as
and for no other or different use of purpose,
for and during the term of three years beginning on 24th of March,
1994 and ending on the last day of February, 1997.
In consideration whereof, the Lessee agrees to pay the Lessor
at 2400 J. Terrell Wooten Drive, Bessemer, AL 35024 on the first
day of each month of said term, in advance, as rent for said
premises, the sum of EIGHT THOUSAND EIGHTY-ONE AND 25/100 dollars
($8,081.25) per month, being at the rate of NINETY-SIX THOUSAND
NINE HUNDRED SEVENTY-FIVE dollars ($96,975) per annum, and $1,548
a month for expense and maintenance.
Lessee agrees that a Service and Bookkeeping charge of 10% of
the monthly rent shall become due and payable each and every month
that the rent has not been received in the office of GRAHAM &
COMPANY, INC. by the 10th of the month.
This lease is made upon the following terms, conditions, and
covenants: The Lessor covenants to keep the Lessee in possession of
said premises during said term, but shall not be liable for the
loss of use by eminent domain nor the failure or inability of the
Lessee to obtain possession thereof provided the Lessor shall
exercise due diligence and effort to place the Lessee in
possession. Nothing herein contained shall be construed as a
warranty that said premises are in good condition or are fit or
suitable for the use or purpose for which they are let. The Lessor
or Lessor's agent have made no representations or promises with
respect to said building or the demised premises except as herein
expressly set forth. The Lessee has examined the leased premises
and accepts the same in the physical condition in which the same
now exists (except as otherwise expressly provided herein).
Should the roof of the building leak at any time during said
term, the Lessee will repair the same, but in no event shall the
Lessee be liable for damages or injuries arising from such defect
or the failure to make said repairs; not shall the Lessor be liable
for damages or injuries arising from defective workmanship or
materials, the Lessee hereby expressly waiving the same. Lessor and
its agents, shall not be liable for any deaths, injuries, loss or
damage resulting from any repair or improvement and undertaken,
voluntary or involuntary, by or on behalf of the Lessor, other than
willfully wrongful acts of Lessor.
In the event that the Lessee installs a sign or any equipment
on the roof, then Lessee shall be responsible for repairing any
roof leaks, attributable to such installation, during the term of
this lease at Lessee's sole cost and expense, but no such equipment
or sign may be installed until the consent in writing of the Lessor
is first had and obtained thereto.
Lessor shall not be obligated or required to make any repairs
or do any other work on or about said premises or any part thereof,
or on or about any premises connected therewith, but not hereby
leased, unless and only to the extent herein agree. All portions of
any building hereby leased shall be kept in good repair by Lessee
and at the end of the term hereof, the Lessee shall deliver the
demised premises to Lessor in good repair and condition, reasonable
wear and tear excepted.
However, Lessor reserves the right to enter upon said premises
and to make such repairs and to do such work on or about said
premises as Lessor may deem necessary and proper, or that Lessor
may be lawfully required to make. Lessor reserves the right to
visit and inspect said premises at all reasonable times and the
right to show said premises to prospective tenants and purchasers,
and the right to display "For Sale" and "For Rent" signs on said
premises.
Should the Lessee fail to make repairs agreed to by him under
this lease, the Lessor may enter the premises and make such repairs
and collect the cost thereof from the Lessee as additional rent.
Except as herein specifically provided, the Lessee will not make or
permit to be made any alterations, additions, improvements or
changes in the premises, nor will the Lessee paint the outside of
the building or permit the same to be painted without the written
consent of the Lessor before work is contracted or let. No signs of
any character shall be erected on the roof until the consent
thereof in writing is first had and obtained from the Lessor. The
consent of to a particular alteration, addition, improvement or
change shall not be deemed a consent to, nor a waiver of, a
restriction against alterations, additions, improvements or changes
for the future.
Lessee will replace all plate and other glass, if and when
broken, and failing so to do the Lessor may replace the same and
the Lessee will pay the Lessor the cost and expense thereof upon
demand. Lessee will replace all keys lost or broken, and will pay
all bills for utilities and services used on said premises. Lessee
will keep all sprinklers, doors, air conditioning equipment,
electric wiring, water pipes, water closets, drains, sewer lines
and other plumbing in said premises in such good order and repair
and will do all repairs, modifications and replacements which may
be required by the applicable laws or ordinances. Lessor shall not
be liable for any damages caused by, or growing out of, any
breakage, leakage, getting out of order or defective conditions of
said elevators, air conditioning equipment, electric wiring, pipes,
water closets, drains, and sewer lines or plumbing, or any of them.
Lessee will comply, at all times and in all respects with all the
applicable laws and ordinances relating to nuisance, insofar as the
building and premises hereby let, and the streets and highways
bounding the same, are concerned, and the Lessee will not by any
act, or omissions render the Lessor liable for any violation
thereof. Lessee will not commit any waste of property, or permit
the same to be done and will take good care of said building and
said premises at all times.
The Lessee agrees to pay all sewer rentals or other charges
becoming due, levied under the authority of the Act No. 619 of the
Alabama Legislature of 1949, approved September 19, 1949, or any
other act, law or regulation. Failure to pay said rental shall
constitute a default under the terms of this lease.
Lessee shall during the entire term of this lease, at Lessee's
own expense keep in force by advance payment of premiums, public
utility insurance in an amount of not less than $500,000.00 for
injury to or death of one person or as a result of one occurrence
and not less than $1,000,000.00 for injury to or death of more than
one person as a result of one occurrence and for damage to property
in the amount of $100,000.00, or single limit of $1,000,000.00,
insuring Lessee, Lessor, and Lessor's Agents, Servants and
employees (as an additional assured) against any liability that may
accrue against them or either of them on account of any occurrences
in or about the demised premised during the term or in consequence
of Lessee' occupancy thereof and resulting in personal injury or
death or property damage. Lessee shall on request furnish to Lessor
certificates of all insurance required under this paragraph.
Lessor shall not be liable for any injury or damage caused by,
or growing out of, any defect in said building, or its equipment,
drains, plumbing, wiring, electric equipment or appurtenances, or
in said premises, or caused by, or growing out of fire, rain, wind,
leaks, seepage or other cause.
If the leased premises, or any part thereof, consist of first
floor space, adjacent upon the street, or ground adjacent to the
street, the Lessee will keep the sidewalk, curb and gutter in front
thereof or adjacent thereto clean and free from snow, ice, debris
and obstructions and will hold the Lessor harmless from all damages
or claims arising out of the Lessee's failure to so do.
Upon the happening of any one or more of the events as
expressed in this paragraph, the Lessor shall have the right, at
the option of the Lessor, to either annul and terminate this lease
upon two days written notice to Lessee and thereupon re-enter and
take possession of the premises; or the right upon two days written
notice to the Lessee to re-enter and re-let said premises, from
time to time, as agents of the Lessee, and such re-entry or
re-letting or both, shall not discharge the Lessee from any
liability or obligation hereunder, except that rents (that is,
gross rents less the expense of collecting and handling, and less
commission) collected as a result of such re-letting shall be
credited on the Lessee's liability up to the amount due under the
terms of this lease and the balance, if any, credited to the
Lessor. Nothing herein, however, shall be construed to require the
Lessor to re-enter or re-let, nor shall anything herein be
construed to postpone the right of the Lessor to sue for rents,
whether matured by acceleration or otherwise, but on the contrary,
the Lessor is hereby given the right to sue therefore at any time
after default. The events or default referred to herein are:
failure of the Lessee to pay any one or more of the installments of
rent, or any other sum, provided for in this lease as and when the
same become due, the removal, attempt to remove or permitting to be
removed from said premises, except in the usual course of trade,
the goods, furniture, effects or other property of the Lessee or
any assignee, or sub-tenant of the Lessee; the levy of an execution
or other legal process upon the goods, furniture, effects or other
property of the Lessee brought on the leased premises or upon the
interest of the Lessee in this lease; the filing of a Petition in
Bankruptcy, a Petition for an Arraignment or reorganization by or
against the Lessee; the appointment of a receiver of trustee, or
other court officer, for the assets of the Lessee; the execution of
an assignment for the benefit of creditors of the Lessee; the
vacation or abandonment by the Lessee of the leased premises or the
use thereof for any purpose other than the purpose for which the
same are hereby let or (if the rental herein is based in whole or
in part on the percentage of Lessee's sales) failure of Lessee to
exercise diligent effort to produce the maximum volume of sales;
the assignment by Lessee of this lease or the re-letting or
sub-letting by the Lessee of the leased premises or any part
thereof without the written consent of the Lessor first had and
obtained; the violation by the lessee of any other of the terms,
conditions or covenants not set out in this paragraph on the part
of the Lessee herein contained and failure of the Lessee to remedy
such violation within ten (10) days after written notice thereof is
given by the Lessor to the Lessee.
The Lessee shall not remove any of the goods, wares or
merchandise of the Lessee from said premises other than in the
regular course of Lessee's trade or business without having first
paid all rent due or to become due under the terms of this lease.
Upon termination or breach of this lease or re-entry upon said
premises for any one or more of the causes set forth above, or upon
termination of this lease or re-entry of said premises, the rents
provided for in this lease for the balance of the original rental
term, or any renewal term, or other extended term, and all other
indebtedness to the Lessor owed by the Lessee, shall be and become
immediately due and payable at the option of the Lessor and without
regard to whether or not possession of the premises shall have been
surrendered to or taken by the Lessor. The Lessee agrees to pay
Lessor, or on Lessor's behalf, a reasonable attorney's fee in the
event Lessor employs an attorney to collect any rents due hereunder
by Lessee, or to protect the interest of Lessor in the event the
Lessee is adjudged a bankrupt, or legal process is levied upon the
goods, furniture, effects or personal property of the Lessee upon
the said premises, or upon the interest of the Lessee in this lease
or in said premises, or in the event the Lessee violates any of the
terms, conditions, or covenants on the part of the Lessee herein
contained. In order to further secure the prompt payments of said
rents, as and when the same mature, and the faithful performance by
the Lessee of all and singular the terms, conditions and covenants
on the part of the Lessee herein contained, and all damages, and
costs that the Lessor may sustain by reason of the violation of
said terms, conditions and covenants, or any of them, the lessee
hereby waives any and all rights to claim personal property as
exempt from levy and sale, under the laws of any State or the
United States.
In the event the Lessee abandons the leased premises before
the expiration of the term, whether voluntarily or involuntarily,
or violates any of the terms, conditions, or covenants hereof, the
Lessor shall have the privilege at Lessor's option of re-entering
and taking possession of said premises and leasing all or any
portion of said premises for such term and for such use deemed
satisfactory to the Lessor, applying each month the net proceeds
obtained from said leasing to the credit of the Lessee herein up to
the amount due under the terms of this lease and the balance to the
Lessor and said leasing shall not release the Lessee from liability
hereunder for the rents reserved for the residue of the term
hereof, but Lessee shall be responsible each month for the
difference, if any, between the net rents obtained from such
leasing and the monthly rent reserved hereunder, and said
difference shall be payable to the Lessor on the first day of each
month for the residue of the term hereof.
No re-entry hereunder shall bar the recovery of rent or
damages for the breach of any of the terms, conditions, or
covenants on the part of the Lessee herein contained. The receipt
of rent after breach or condition broken, or delay on the part of
Lessor to enforce any right hereunder, shall not be deemed a waiver
of forfeiture, or a waiver of the right of the Lessor to annul the
lease or to re-enter said premises or to re-let the same, or to
accelerate the maturity of the rents hereunder.
If this lease is terminated by the Lessor for any reason,
including non-payment of rent, and the Lessee pays the rent,
attorney's fees and other charges and thus makes himself current,
and/or remains or continues to be in possession of the leased
premises or any part thereof, with the Lessor's consent, this lease
will be considered reinstated, and will continue in effect as
though it had not been terminated.
All improvements and additions to the leased premises shall
adhere to the leased premises, and become the property of the
Lessor, with the exception of such additions as are usually classed
as furniture and trade fixtures; said furniture and trade fixtures
are to remain the property of the Lessee, and may be removed by the
Lessee two (2) weeks prior to the expiration of this lease,
provided all terms, conditions and covenants of within contract
have been complied with by Lessee and provided said Lessee restores
the building and premises to its original condition, normal wear
and tear excepted.
In the event of the total destruction of, or partial damage
to, the buildings upon the demised premises by fire or other
casualty, Lessee shall proceed with due diligence and dispatch to
repair and restore the buildings to the conditions to which they
existed immediately prior to the occurrence of such casualty, at
Lessee's cost and expense, provided such costs does not exceed the
proceeds of insurance collected on the buildings, by reason of such
casualty, the application of which insurance proceeds are not
prohibited, by reason of any mortgage provision, from being used
toward the cost of restoration and repairing the same.
Each and every transfer or assignment of this lease, or any
interest therein, and each and every sub-letting of said premises,
or any part thereof, or any interest therein, shall be null and
void, unless the written consent of the Lessor be first obtained
thereto. As a condition precedent to the obtaining of such consent,
the assignee or sub-lessee must assume, in writing, all the
obligations of the Lessee hereunder, but such assumption shall not
operate to release the Lessee from any agreement or understanding
on the part of the Lessee expressed or implied in this lease. If a
lease assignment is consummated for this Lessee or any one or more
assigns before the expiration term of this lease, then the Lessee
or his subsequent assigns shall pay a $ assignment fee
to agent for each and every lease assignment made.
All notices and demands authorized or required to be given to
the Lessee under any provision hereof must be in writing, and may
be delivered to the Lessee in person or left on or in the leased
premises or shall be conclusively deemed to have been delivered to
the Lessee if the same be deposited in the United States mail
addressed to the Lessee at the leased premises, with the proper
postage affixed thereto. All notices herein authorized are required
to be given to the Lessor may be given by certified mail, addressed
to the Lessor at the address of the Lessor shown on page 1 of this
lease, or in care of the Lessor's rental agent at that time
authorized by the Lessor to service this lease, and said notices
must be in writing.
THE COMMISSIONS PAYABLE FOR THE SALE, LEASE OR MANAGEMENT OF
PROPERTY ARE NOT SET BY THE BIRMINGHAM BOARD OF REALTORS BUT IN ALL
CASES ARE NEGOTIABLE BETWEEN THE BROKER AND THE CLIENT.
As further consideration for the services rendered by Graham
& Company, Inc., Lessor agrees to pay the agent a cash-out
commission of 4%, in advance, of the total rental for the original
term and 2% of the total rents for any renewals or expansions. Said
leasing commission shall be due upon first payment of rent for
leased space. If sale is not closed as per the sales contract.
In the event this lease is terminated for any reason prior to
the expiration date, the Agent shall not be obligated to refund any
portion of the commission paid.
The undersigned Lessor agrees to pay to GRAHAM & COMPANY,
INC., as agent a commission of six (6) per cent of the sales price
as compensation for services rendered if: (1) the Lessor and Lessee
enter into an agreement whereby Lessee agrees to purchase the
subject property from the Lessor during the term of this Lease or
any extension thereof; or (2) said property is sold or leased
whether by Graham & Company, Inc. or by the undersigned Lessor or
by or through anyone else during the term of the Lease; or (3) any
contract for the sale or lease of said property is made directly or
indirectly by the undersigned Lessor prior to said expiration of
said lease; or (4) within one year after the expiration of the
Lease, said property is sold or leased to the Lessee. If the
subject property is owned by a corporation and the Lessor elects to
effect a sale to the Lessee by a sale of stock rather than assets,
the Lessor shall pay to Graham & Company, Inc. the full agreed
compensation for services rendered.
Lessee will indemnify and hold Lessor and Lessor's agent free
and harmless from all demands, claims and suits or expenses caused
by any default committed hereunder on the part of the Lessee.
Lessee will further indemnify and save harmless Lessor and Lessor's
agent from any loss, cost, damage and/or expenses caused by
injuries to persons or property while in, on or about the demised
premises, not attributable to the willfully wrongful act of the
Lessor or Lessor's agent. Any property stored in the demised
premises shall be at the sole risk of Lessee.
Neither Lessor nor Lessee shall be liable to the other for any
loss or damage from risks ordinarily insured against under fire
insurance policies with extended coverage endorsements,
irrespective of whether such loss or damage results from their
negligence or that of any of their agents, servants, employees,
licensees or contractors to the extent that such losses are covered
by valid and collectable insurance on the property at the time of
the loss.
Should the Lessee continue to occupy the premises after the
expiration of the said term or after a forfeiture incurred, whether
with or against the consent of the Lessor, such tenancy shall be a
tenancy at sufferance and in no event a tenancy from month to
month, or from year to year.
The failure of the Lessor to insist, in any one or more
instances, upon a strict performance of any of the covenants of
this lease, or to exercise any option herein contained, shall not
be construed as a waiver, or a relinquishment for the future, of
such covenant or option, but the same shall continue and remain in
full force and effect. The receipt by the Lessor of rent, with
knowledge of the breach of any covenant hereof, shall not be deemed
a waiver of such breach, and no waiver by the Lessor of any
provision hereof shall be deemed to have been made unless expressed
in writing, and signed by the Lessor.
If all or any part of the demised premises is taken by eminent
domain ("eminent domain" shall include the exercise of any similar
power of taking, and any purchase or acquisition in lieu of
condemnation), or in the event the improvements are condemned and
ordered torn down or removed by lawful authority, then the term of
this lease shall cease as of the date possession shall be taken by
the condemning authority, or as of the date improvements are
ordered torn down or removed, whichever may be applicable, with the
rent to be apportioned as of the date of such taking or of such
order, as the case may be; provided, however, if as a result of a
partial taking of the demised premises by eminent domain, the
ground floor area of the building forming a part of the demised
premises is reduced by not more than twenty-five percent (25%), the
Lessor may elect to continue the term of this lease and to restore,
at Lessor's expense, the remaining premises to a complete
architectural unit with storefront, signs and interior of equal
appearance and utility as they had previous to the taking, but
there will be prorata reduction of the rent payable each month. The
Lessor shall be deemed to have exercised its said option to restore
the premises unless, within 30 days after the date of taking, the
Lessor shall notify the Lessee in writing of its election to
terminate this lease. The Lessor shall be entitled to receive all
of the proceeds of any total or partial taking of the demised
premises by eminent domain, including any part of such award as may
be attributable to the unexpired leasehold interest or other rights
of the Lessee in the premises, and the Lessee hereby assigns, and
transfers to the Lessor all of the Lessee's rights to receive any
part of such proceeds.
The Lessee hereby agrees that upon the expiration or prior
termination of this lease, the Lessee will promptly remove from the
leased premises all signs, trash, debris and property of the
Lessee, and the Lessee will leave the floors, stairs, passageways,
elevator and shafts as clean as it is possible to clean them by
means of the use of broom and shovel.
This least consists of 4 pages together with an Addendum of 0
pages which is attached hereto, initialed by the parties and
incorporated in this lease by reference. In case of conflict
between the printed portion of this lease and the Addendum, the
terms of the Addendum shall prevail.
It is understood and agreed by the parties hereto that this
lease shall be binding upon the Lessee, its executor,
administrator, heirs, assigns or successor.
FURTHER TERMS AND CONDITIONS MADE A PART HEREOF
The lease is an absolute net lease. All taxes, insurance,
special assessments levied upon the property shall be paid by the
Lessee monthly on a one-twelfth share.
IN WITNESS WHEREOF, the Lessor and the Lessee have
respectively executed these presents on the day and year first
above written.
Agent: Graham & Company, Inc.
Piggly Wiggly Alabama Distributing (Lessor)
By: D. T. Stewart
Its President
Doc's Transfer and Warehouse, Inc.
By: C. E. Wills (Lessee)
Its President
Witness for Lessee
H. G. Williams
<TABLE>
EXHIBIT 11
Computation of Earnings Per Share
PIGGLY WIGGLY ALABAMA DISTRIBUTING CO., INC.
AND SUBSIDIARIES
<CAPTION>
1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
Common shares outstanding
at end of period 68,999 65,510 63,954 62,568 58,587
Effect of using weighted
average number of
common shares
outstanding (574) (206) 483 734 (836)
Effect of common share
equivalents - treasury
stock method 2,772 1,631 1,141 1,760 1,732
-------- -------- -------- -------- --------
Shares used in computing
primary earnings
per share 71,197 66,935 65,578 65,062 59,483
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Shares used in computing
fully diluted earnings
per share 71,197 66,935 65,578 65,062 59,483
Net income $255,065 $274,288 $276,020 $264,172 $288,801
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Primary earnings per
common share and
common share equivalent $ 3.58 $ 4.10 $ 4.21 $ 4.06 $ 4.86
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
Fully diluted earnings
per common share and
common share equivalent $ 3.58 $ 4.10 $ 4.21 $ 4.06 $ 4.86
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
</TABLE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Form S-1
Registration Statement of Piggly Wiggly Alabama Distributing Co., Inc.
of our report dated September 23, 1994, included in the 1994 Annual
Report to the Shareholders of Piggly Wiggly Alabama Distributing Co., Inc.
Our audit also included the financial statement schedules of Piggly
Wiggly Alabama Distributing Co., Inc. listed in the accompanying index to
the financial statements. These schedules are the responsibility of the
Company's management. Our responsibility is to express an opinion based on
our audits. In our opinion, the financial statement schedules referred to
above, when considered in relation to the basic financial statements taken
as a whole, present fairly in all material respects the information set
forth therein.
DENT, BAKER & COMPANY
Birmingham, Alabama
October 6, 1994
EXHIBIT 24.1
POWER OF ATTORNEY
STATE OF ALABAMA )
JEFFERSON COUNTY )
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, JULIAN GORDON, as a
Director of Piggly Wiggly Alabama Distributing Co., Inc., do hereby
constitute and appoint D. T. Stewart as my true and lawful
attorney-in-fact and agent, with full power of substitution and
resubstitution, for me and in my name, place and stead, in any and
all capacities, to sign an Amendment Number Eight and all
subsequent Amendments to Registration Statement to be filed on
behalf of Piggly Wiggly Alabama Distributing Co., Inc. with the
Securities and Exchange Commission and the State Securities
Commissioner of Alabama, Georgia, Tennessee, Mississippi and North
Carolina and to sign any or all amendments to the Registration
Statement and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and
Exchange Commission, and the Securities Commissions of said States,
and I grant unto said attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite
and necessary to be done in and about the premises, as fully to all
intents and purposes as I might or could do in person, hereby
ratifying and confirming all that said attorney-in-fact and agent,
or his substitute, may lawfully do or cause to be done by virtue
hereof.
This Power of Attorney shall not be affected by disability,
incompetency, or incapacity of myself.
IN WITNESS WHEREOF, I have hereunto set my hand and seal on
this the 27th day of December, 1994.
Julian Gordon
STATE OF MISSISSIPPI )
LEAKE COUNTY )
I, David M. Howell, a Notary Public in and for said County and
State, hereby certify that JULIAN GORDON, whose name is signed to
the foregoing Power of Attorney, and who is known to me,
acknowledged before me on this day that, being informed of the
contents of the Power of Attorney, he executed the same voluntarily
on the day the same bears date
Given under my hand and official seal, this the 27th day of
December, 1994.
David M. Howell
NOTARY PUBLIC
My Commission Expires: March 20, 1996
STATE OF ALABAMA )
JEFFERSON COUNTY )
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, JAMES SALMON, as a
Director of Piggly Wiggly Alabama Distributing Co., Inc., do hereby
constitute and appoint Julian Gordon and D. T. Stewart, and each of
them, as my true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for me and in my name,
place and stead, in any and all capacities, to sign an Amendment
Number Eight and all subsequent Amendments to Registration
Statement to be filed on behalf of Piggly Wiggly Alabama
Distributing Co., Inc. with the Securities and Exchange Commission
and the State Securities Commissioner of Alabama, Georgia,
Tennessee, Mississippi and North Carolina and to sign any or all
amendments to the Registration Statement and to file the same, with
all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, and the Securities
Commissions of said States, and I grant unto said attorneys-in-fact
and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about
the premises, as fully to all intents and purposes as I might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or their substitutes, may lawfully do
or cause to be done by virtue hereof.
This Power of Attorney shall not be affected by disability,
incompetency, or incapacity of myself.
IN WITNESS WHEREOF, I have hereunto set my hand and seal on
this the 27 day of December, 1994.
James Salmon
STATE OF GA )
FLOYD COUNTY )
I, Brenda Adams, a Notary Public in and for said County and
State, hereby certify that JAMES SALMON, whose name is signed to
the foregoing Power of Attorney, and who is known to me,
acknowledged before me on this day that, being informed of the
contents of the Power of Attorney, he executed the same voluntarily
on the day the same bears date
Given under my hand and official seal, this the 27 day of
December, 1994.
Brenda Adams
NOTARY PUBLIC
STATE OF ALABAMA )
JEFFERSON COUNTY )
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, HOMER VINSON, as a
Director of Piggly Wiggly Alabama Distributing Co., Inc., do hereby
constitute and appoint Julian Gordon and D. T. Stewart, and each of
them, as my true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for me and in my name,
place and stead, in any and all capacities, to sign an Amendment
Number Eight and all subsequent Amendments to Registration
Statement to be filed on behalf of Piggly Wiggly Alabama
Distributing Co., Inc. with the Securities and Exchange Commission
and the State Securities Commissioner of Alabama, Georgia,
Tennessee, Mississippi and North Carolina and to sign any or all
amendments to the Registration Statement and to file the same, with
all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, and the Securities
Commissions of said States, and I grant unto said attorneys-in-fact
and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about
the premises, as fully to all intents and purposes as I might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or their substitutes, may lawfully do
or cause to be done by virtue hereof.
This Power of Attorney shall not be affected by disability,
incompetency, or incapacity of myself.
IN WITNESS WHEREOF, I have hereunto set my hand and seal on
this the 23 day of December, 1994.
Homer Vinson
STATE OF ALABAMA )
FRANKLIN COUNTY )
I, Linda K. Petty, a Notary Public in and for said County and
State, hereby certify that HOMER VINSON, whose name is signed to
the foregoing Power of Attorney, and who is known to me,
acknowledged before me on this day that, being informed of the
contents of the Power of Attorney, he executed the same voluntarily
on the day the same bears date
Given under my hand and official seal, this the 23rd day of
December, 1994.
Linda K. Petty
NOTARY PUBLIC
My Commission Expires: July 19, 1997.
STATE OF ALABAMA )
JEFFERSON COUNTY )
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, HARMON LOONEY, as a
Director of Piggly Wiggly Alabama Distributing Co., Inc., do hereby
constitute and appoint Julian Gordon and D. T. Stewart, and each of
them, as my true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for me and in my name,
place and stead, in any and all capacities, to sign an Amendment
Number Eight and all subsequent Amendments to Registration
Statement to be filed on behalf of Piggly Wiggly Alabama
Distributing Co., Inc. with the Securities and Exchange Commission
and the State Securities Commissioner of Alabama, Georgia,
Tennessee, Mississippi and North Carolina and to sign any or all
amendments to the Registration Statement and to file the same, with
all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, and the Securities
Commissions of said States, and I grant unto said attorneys-in-fact
and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about
the premises, as fully to all intents and purposes as I might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or their substitutes, may lawfully do
or cause to be done by virtue hereof.
This Power of Attorney shall not be affected by disability,
incompetency, or incapacity of myself.
IN WITNESS WHEREOF, I have hereunto set my hand and seal on
this the 23rd day of December, 1994.
Harmon Looney
STATE OF ALABAMA )
TUSCALOOSA COUNTY )
I, Christina M. McPherson, a Notary Public in and for said
County and State, hereby certify that HARMONY LOONEY, whose name is
signed to the foregoing Power of Attorney, and who is known to me,
acknowledged before me on this day that, being informed of the
contents of the Power of Attorney, he executed the same voluntarily
on the day the same bears date
Given under my hand and official seal, this the 23rd day of
December, 1994.
Christina M. McPherson
NOTARY PUBLIC
My Commission Expires: 1-21-96.
STATE OF ALABAMA )
JEFFERSON COUNTY )
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, STANLEY VIRCIGLIO, as
a Director of Piggly Wiggly Alabama Distributing Co., Inc., do
hereby constitute and appoint Julian Gordon and D. T. Stewart, and
each of them, as my true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, for me and in
my name, place and stead, in any and all capacities, to sign an
Amendment Number Eight and all subsequent Amendments to
Registration Statement to be filed on behalf of Piggly Wiggly
Alabama Distributing Co., Inc. with the Securities and Exchange
Commission and the State Securities Commissioner of Alabama,
Georgia, Tennessee, Mississippi and North Carolina and to sign any
or all amendments to the Registration Statement and to file the
same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, and the
Securities Commissions of said States, and I grant unto said
attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to be
done in and about the premises, as fully to all intents and
purposes as I might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their
substitutes, may lawfully do or cause to be done by virtue hereof.
This Power of Attorney shall not be affected by disability,
incompetency, or incapacity of myself.
IN WITNESS WHEREOF, I have hereunto set my hand and seal on
this the 29th day of December, 1994.
Stanley Virciglio
STATE OF ALABAMA )
JEFFERSON COUNTY )
I, Virginia B. Vinson, a Notary Public in and for said County
and State, hereby certify that STANLEY VIRCIGLIO, whose name is
signed to the foregoing Power of Attorney, and who is known to me,
acknowledged before me on this day that, being informed of the
contents of the Power of Attorney, he executed the same voluntarily
on the day the same bears date
Given under my hand and official seal, this the 29th day of
December, 1994.
Virginia B. Vinson
NOTARY PUBLIC
My Commission Expires: 5/16/95.
STATE OF ALABAMA )
JEFFERSON COUNTY )
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, MARY HARDIN, as a
Director of Piggly Wiggly Alabama Distributing Co., Inc., do hereby
constitute and appoint Julian Gordon and D. T. Stewart, and each of
them, as my true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for me and in my name,
place and stead, in any and all capacities, to sign an Amendment
Number Eight and all subsequent Amendments to Registration
Statement to be filed on behalf of Piggly Wiggly Alabama
Distributing Co., Inc. with the Securities and Exchange Commission
and the State Securities Commissioner of Alabama, Georgia,
Tennessee, Mississippi and North Carolina and to sign any or all
amendments to the Registration Statement and to file the same, with
all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, and the Securities
Commissions of said States, and I grant unto said attorneys-in-fact
and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about
the premises, as fully to all intents and purposes as I might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or their substitutes, may lawfully do
or cause to be done by virtue hereof.
This Power of Attorney shall not be affected by disability,
incompetency, or incapacity of myself.
IN WITNESS WHEREOF, I have hereunto set my hand and seal on
this the 23rd day of December, 1994.
Mary Hardin
STATE OF ALABAMA )
ETOWAH COUNTY )
I, Elizabeth Waddell, a Notary Public in and for said County
and State, hereby certify that MARY HARDIN, whose name is signed to
the foregoing Power of Attorney, and who is known to me,
acknowledged before me on this day that, being informed of the
contents of the Power of Attorney, he executed the same voluntarily
on the day the same bears date
Given under my hand and official seal, this the 23rd day of
December, 1994.
Elizabeth Waddell
NOTARY PUBLIC
My Commission Expires: 12-15-97.
STATE OF ALABAMA )
JEFFERSON COUNTY )
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, LOUIS DAY, as a
Director of Piggly Wiggly Alabama Distributing Co., Inc., do hereby
constitute and appoint Julian Gordon and D. T. Stewart, and each of
them, as my true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for me and in my name,
place and stead, in any and all capacities, to sign an Amendment
Number Eight and all subsequent Amendments to Registration
Statement to be filed on behalf of Piggly Wiggly Alabama
Distributing Co., Inc. with the Securities and Exchange Commission
and the State Securities Commissioner of Alabama, Georgia,
Tennessee, Mississippi and North Carolina and to sign any or all
amendments to the Registration Statement and to file the same, with
all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, and the Securities
Commissions of said States, and I grant unto said attorneys-in-fact
and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about
the premises, as fully to all intents and purposes as I might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or their substitutes, may lawfully do
or cause to be done by virtue hereof.
This Power of Attorney shall not be affected by disability,
incompetency, or incapacity of myself.
IN WITNESS WHEREOF, I have hereunto set my hand and seal on
this the 3rd day of January, 1995.
Louis Day
STATE OF TENNESSEE )
MAURY COUNTY )
I, Jennifer Richardson, a Notary Public in and for said County
and State, hereby certify that LOUIS DAY, whose name is signed to
the foregoing Power of Attorney, and who is known to me,
acknowledged before me on this day that, being informed of the
contents of the Power of Attorney, he executed the same voluntarily
on the day the same bears date
Given under my hand and official seal, this the 3rd day of
January, 1995
Jennifer Richardson
NOTARY PUBLIC
My Commission Expires: 4-18-98.
STATE OF ALABAMA )
JEFFERSON COUNTY )
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that I, BILLY HUFF, as a
Director of Piggly Wiggly Alabama Distributing Co., Inc., do hereby
constitute and appoint Julian Gordon and D. T. Stewart, and each of
them, as my true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for me and in my name,
place and stead, in any and all capacities, to sign an Amendment
Number Eight and all subsequent Amendments to Registration
Statement to be filed on behalf of Piggly Wiggly Alabama
Distributing Co., Inc. with the Securities and Exchange Commission
and the State Securities Commissioner of Alabama, Georgia,
Tennessee, Mississippi and North Carolina and to sign any or all
amendments to the Registration Statement and to file the same, with
all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, and the Securities
Commissions of said States, and I grant unto said attorneys-in-fact
and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about
the premises, as fully to all intents and purposes as I might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or their substitutes, may lawfully do
or cause to be done by virtue hereof.
This Power of Attorney shall not be affected by disability,
incompetency, or incapacity of myself.
IN WITNESS WHEREOF, I have hereunto set my hand and seal on
this the 27 day of December, 1994.
Billy Huff
STATE OF ALABAMA )
PICKENS COUNTY )
I, Bobby L. Martin, a Notary Public in and for said County and
State, hereby certify that BILLY HUFF, whose name is signed to the
foregoing Power of Attorney, and who is known to me, acknowledged
before me on this day that, being informed of the contents of the
Power of Attorney, he executed the same voluntarily on the day the
same bears date
Given under my hand and official seal, this the 27 day of
December, 1994.
Bobby L. Martin
NOTARY PUBLIC
My Commission Expires: 7-25-96.
