FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 2, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-6905
RUDDICK CORPORATION
(Exact name of registrant as specified in its charter)
NORTH CAROLINA 56-0905940
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
2000 Two First Union Center
Charlotte, North Carolina 28282
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (704) 372-5404
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Outstanding Shares
Class As of April 28, 1995
Common Stock 23,052,284 shares
RUDDICK CORPORATION
INDEX
PAGE NO.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED CONDENSED BALANCE SHEETS -
APRIL 2, 1995 AND OCTOBER 2, 1994 2
CONSOLIDATED CONDENSED STATEMENTS OF
INCOME - THREE MONTHS AND SIX MONTHS
ENDED APRIL 2, 1995 AND APRIL 3, 1994 3
CONSOLIDATED CONDENSED STATEMENTS OF
CASH FLOWS - SIX MONTHS ENDED
APRIL 2, 1995 AND APRIL 3, 1994 4
NOTES TO CONSOLIDATED CONDENSED FINANCIAL
STATEMENTS 5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS 6-9
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE
OF SECURITY HOLDERS 10
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 11
SIGNATURES 11
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
RUDDICK CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
APRIL 2, OCTOBER 2,
1995 1994
ASSETS (Unaudited) (Unaudited)
------ ----------- -----------
CURRENT ASSETS:
Cash and Temporary Cash
Investments $ 7,077 $ 14,531
Accounts Receivable, Net 66,251 62,302
Inventories 184,260 180,784
Other 29,430 19,030
----------- -----------
Total Current Assets 287,018 276,647
PROPERTY, NET 316,427 299,660
INVESTMENT AND OTHER ASSETS 59,014 64,485
----------- -----------
Total $ 662,459 $ 640,792
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
CURRENT LIABILITIES:
Notes Payable $ 4,588 $ 5,596
Current Portion of Long-Term Debt 5,635 5,415
Accounts Payable 121,929 125,767
Income Taxes Payable 4,762 3,162
Other Accrued Liabilities 48,324 50,464
----------- -----------
Total Current Liabilities 185,238 190,404
----------- -----------
LONG-TERM DEBT AND DEFERRED
LIABILITIES 174,430 159,179
----------- -----------
SHAREHOLDERS' EQUITY:
Common Stock - Common 54,276 57,620
Retained Earnings 250,551 235,543
Cumulative Translation Adjustments (2,036) (1,954)
----------- -----------
Shareholders' Equity 302,791 291,209
----------- -----------
Total $ 662,459 $ 640,792
=========== ===========
2
<PAGE>
RUDDICK CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(in thousands, except share and per share data)
THREE MONTHS ENDED
----------------------------
APRIL 2, APRIL 3,
1995 1994
(Unaudited) (Unaudited)
----------- -----------
NET SALES
American & Efird $ 77,294 $ 67,142
Harris Teeter 416,554 385,880
Jordan Graphics 16,034 12,860
----------- -----------
Total 509,882 465,882
----------- -----------
OPERATING PROFIT
American & Efird 9,824 5,801
Harris Teeter 10,272 9,266
Jordan Graphics 503 (91)
Ruddick Investment 196 331
----------- -----------
Total 20,795 15,307
----------- -----------
OTHER COSTS AND DEDUCTIONS
Interest expense, net 2,724 2,044
Other expense 2,262 2,154
----------- -----------
Total 4,986 4,198
----------- -----------
Income Before Taxes 15,809 11,109
Taxes 5,507 3,665
----------- -----------
NET INCOME $ 10,302 $ 7,444
=========== ===========
AVERAGE NUMBER OF SHARES OF
COMMON STOCK AND COMMON STOCK
EQUIVALENTS OUTSTANDING:
Primary 23,280,620 23,686,960
Fully Diluted 23,283,128 23,686,962
NET INCOME PER SHARE:
PRIMARY $0.45 $0.32
FULLY DILUTED $0.45 $0.32
DIVIDENDS DECLARED PER SHARE:
Common $0.07 $0.07
$.56 Convertible Preference - $0.14
3
<PAGE>
RUDDICK CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (CONTINUED)
(in thousands, except share and per share data)
SIX MONTHS ENDED
----------------------------
APRIL 2, APRIL 3,
1995 1994
(Unaudited) (Unaudited)
----------- -----------
NET SALES
American & Efird $ 147,010 $ 130,862
Harris Teeter 840,429 773,871
Jordan Graphics 30,766 25,715
----------- -----------
Total 1,018,205 930,448
----------- -----------
OPERATING PROFIT
American & Efird 16,471 11,718
Harris Teeter 20,285 17,027
Jordan Graphics 457 (335)
Ruddick Investment 800 451
----------- -----------
Total 38,013 28,861
----------- -----------
OTHER COSTS AND DEDUCTIONS
Interest expense, net 5,361 4,116
Other expense 4,160 3,256
----------- -----------
Total 9,521 7,372
----------- -----------
Income Before Taxes 28,492 21,489
Taxes 9,924 7,780
----------- -----------
NET INCOME $ 18,568 $ 13,709
=========== ===========
AVERAGE NUMBER OF SHARES OF
COMMON STOCK AND COMMON STOCK
EQUIVALENTS OUTSTANDING:
Primary 23,316,426 23,720,187
Fully Diluted 23,325,322 23,720,445
NET INCOME PER SHARE:
PRIMARY $0.80 $0.58
FULLY DILUTED $0.80 $0.58
DIVIDENDS DECLARED PER SHARE:
Common $0.14 $0.14
$.56 Convertible Preference - $0.28
<PAGE>
RUDDICK CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(in thousands)
SIX MONTHS ENDED
----------------------------
APRIL 2, APRIL 3,
1995 1994
(Unaudited) (Unaudited)
----------- -----------
CASH FLOW FROM INCOME $ 39,608 $ 37,245
Decrease (Increase) in Current
Assets (13,155) (3,898)
Increase (Decrease) in Current
Liabilities (4,982) (5,051)
----------- -----------
NET CASH PROVIDED BY OPERATING
ACTIVITIES 21,471 28,296
----------- -----------
INVESTING ACTIVITIES
Purchase of Assets (52,818) (35,761)
Cash Proceeds from Sales of
Assets 18,468 2,492
Company Owned Life Insurance, Net (4,423) (5,481)
Other, Net (275) 313
----------- -----------
NET CASH USED IN INVESTING ACTIVITIES (39,048) (38,437)
----------- -----------
FINANCING ACTIVITIES
Proceeds (Repayments) of Long-Term
Borrowings 20,077 10,800
Payment of Principal on Long-Term
Debt (2,562) (2,889)
Dividends (3,236) (3,253)
Other, Net (4,156) (1,196)
----------- -----------
NET CASH PROVIDED BY FINANCING
ACTIVITIES 10,123 3,462
----------- -----------
INCREASE (DECREASE) IN BALANCE
SHEET CASH (7,454) (6,679)
BALANCE SHEET CASH AT BEGINNING
OF PERIOD 14,531 12,392
----------- -----------
BALANCE SHEET CASH AT END OF PERIOD $ 7,077 $ 5,713
=========== ===========
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION
Cash Paid During the Year for:
Interest $ 5,824 $ 3,897
Income Taxes $ 9,718 $ 8,442
4
<PAGE>
RUDDICK CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
IN THE OPINION OF MANAGEMENT, THE INFORMATION FURNISHED REFLECTS ALL
ADJUSTMENTS (CONSISTING ONLY OF NORMAL RECURRING ACCRUALS) NECESSARY
TO PRESENT FAIRLY THE RESULTS FOR THE INTERIM PERIODS PRESENTED.
5
ITEM 2.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Results of Operations
The following table shows net sales and operating profit for
each of Ruddick Corporation's subsidiaries for the quarters and six
months ended April 2, 1995 and April 3, 1994:
(In Thousands) Quarter Ended Six Months Ended
April 2, April 3, April 2, April 3,
1995 1994 1995 1994
Net Sales
American & Efird $ 77,294 $ 67,142 $ 147,010 $130,862
Harris Teeter 416,554 385,880 840,429 773,871
Jordan Graphics 16,034 12,860 30,766 25,715
Total $ 509,882 $ 465,882 $1,018,205 $930,448
Operating Profit
American & Efird $ 9,824 $ 5,801 $ 6,471 $ 11,718
Harris Teeter 10,272 9,266 20,285 17,027
Jordan Graphics 503 (91) 457 (335)
Ruddick Investment 196 331 800 451
Total $ 20,795 $ 15,307 $ 38,013 $ 28,861
For the Three Months Ended April 2, 1995 and April 3, 1994
Consolidated sales of $510 million in the second quarter of
fiscal 1995 increased 9% over the $466 million reported for the
comparable period last year. Total operating profit of $20.8
million increased 36% from last year. Net income after taxes of
$10.3 million increased 38% over the $7.4 million last year.
Fully diluted and primary earnings per share were $.45 in the
second quarter of fiscal 1995 and compare to $.32 for the
comparable period last year.
In the second quarter of fiscal 1995, American & Efird sales
of $77.3 million increased 15% over the $67.1 million reported for
the comparable period last year. Sales were strong in most of
A&E's major market segments during the quarter. Operating profit
of $9.8 million was up 69% over the $5.8 million reported last
year. Increased operating profit resulted primarily from sales
increases, efficient plant operating schedules, and other cost
reductions. Operating profit in the international division showed
improvement in most countries although startup costs in Mexico had
an adverse impact. Consumer products recorded an increase in
operating profit.
6
Harris Teeter sales in the second fiscal quarter of $417 million
increased 8% over the $386 million reported for the same period
last year. Net sales for stores in operation during both periods
increased 7.5%. The sales increase continues to be driven by
aggressive feature plans and advertising. Operating profit of
$10.3 million was up 11% from the $9.3 million reported for the
comparable period last year. This increase was the result of
increased sales volume and of more efficient operations in stores
located in Atlanta, Georgia and Columbia, South Carolina. During
the quarter, one new store was opened, one store was replaced and
one store was closed leaving 139 in operation at April 2, 1995
compared to 141 in operation at April 3, 1994.
During the second fiscal quarter, Harris Teeter did not close
any stores under a previously announced marketing strategy and plan
for which a restructuring reserve of $5.3 million, before taxes was
established in fiscal 1993. There were no charges incurred against
the reserve during the second fiscal quarter of 1995. A cumulative
total of $721 thousand has been charged for all periods to date.
The plan calls for the replacement of an anticipated 12 smaller,
less competitive stores with larger stores offering increased
variety and drawing from a larger marketing area, with related
store closings planned to occur during fiscal years ending 1994
through 1996. Management anticipates that, on average, half of the
charges associated with each store closing will be incurred in the
year of the closing and the balance, within four years thereafter.
Management expects that the effect on operating results of any
fiscal year and on liquidity will not be material, and that capital
resources will be adequate to complete such restructuring.
Jordan Graphics sales of $16 million in the second quarter of
fiscal 1995 increased 25% from the comparable period last year.
Sales gains were realized in all product lines. Operating profit
this year was $503 thousand compared to a loss of $91 thousand last
year. The more favorable results were generally attributable to
increased sales, better service, aggressive cost reduction efforts,
and operational improvements. Although improvement in operating
profit is being achieved, Jordan continues to operate in an
industry with excess manufacturing capacity and an extremely tight
paper supply. The current level of sales may be difficult to
maintain throughout the year.
Ruddick Investment reported an operating profit of $196
thousand in the quarter from its investment assets. During the
quarter, a gain of $2.7 million was realized from the sale of the
Morrocroft Village shopping center in Charlotte, N.C. This center
includes a 63,000 square foot Harris Teeter store which is under a
long-term lease from the new owner. Also during the quarter, a
reserve in the amount of $3.0 million was recorded to provide
protection from the potential exposure to future investment losses.
This reserve was deemed prudent as a result of the strategy toward
investing in larger and fewer investments and recent developments
with respect to certain investments in the second quarter.
For the Six Months Ended April 2, 1995 and April 3, 1994
Consolidated sales for the six months ended April 2, 1995 of $1
billion increased 9% over the $930 million reported for the first
six months of fiscal 1994, with all subsidiary
7
companies reporting increases. Operating profit of $38.0 million
was up 31.7% from the $28.9 million reported for the comparable
period last year, with all subsidiaries reporting increases. Net
income of $18.6 million was up 35% from the $13.7 million reported
last year. Fully diluted earnings per share for the first six
months this year were $.80 versus $.58 a year ago.
American & Efird sales of $147.0 million for the first six
months this year increased 12.3% over the comparable period last
year. Sales increases were recorded in most product lines except
that industrial cotton thread and consumer sales showed some
weakness. The 40% increase in operating profit was generally the
result of increased sales, efficient plant operating schedules, and
other cost reductions.
Harris Teeter sales of $840.4 million for the six months ended
April 2, 1995 were 8.6% higher than for the same period last year,
primarily the result of volume generated by feature programs and
effective advertising. Operating profit was up 19% from the
comparable period last year due largely to the improved operating
results in the Columbia, South Carolina and Atlanta, Georgia
markets.
Jordan Graphics sales of $30.8 million for the six months
ended April 2, 1995 increased 19.6% over the comparable period last
year with sales increases being recorded in all product lines. The
operating profit for the six months was realized totally within the
second fiscal quarter due to increasing sales, better service,
aggressive cost reduction efforts and operational improvements.
Ruddick Investment's increase in operating profit occurred
primarily in the first fiscal quarter due to increased rental
income generated from the Morrocroft Village shopping center, which
was sold during the second quarter at a gain. Subsequently, a
reserve was recorded to provide protection from the potential
exposure to future investment losses.
Capital Resources and Liquidity
Ruddick has an overall financial goal of earning at least a
15% return on beginning shareholders' equity. The Company has not
met that objective in a number of years. At the same time, Ruddick
seeks to limit long-term debt so as to constitute no more than 40%
of capital employed, which includes long-term debt and
shareholders' equity. As of April 2, 1995, this percentage was
29.4% and compares to 27.3% at October 2, 1994.
The Company's principal source of liquidity has been revenue
from operations. The Company also has the ability to borrow up to
an aggregate of $100 million under established revolving lines of
credit with three banks. The maximum amount outstanding under
these credit facilities during the quarter ended April 2, 1995 was
$56.4 million, which amount was outstanding at quarter end. The
majority of additional borrowings under Ruddick's revolving credit
facilities were used for capital expenditures. Borrowings and
repayments under these revolving credit facilities are of the same
nature as short-term credit lines; however, due to
8
the nature and terms of the agreements allowing up to five years
for repayment, all borrowings under these facilities are classified
as long-term debt.
Working capital of $101.8 million at April 2, 1995, increased
$15.5 million from October 2, 1994, largely the result of
increases in accounts receivable, inventory and other current
assets and reductions in current liabilities, mainly dividends
payable. The current ratio was 1.5 at April 2, 1995, and 1.5 at
October 2, 1994.
Covenants in certain of the Company's long-term debt
agreements limit the total indebtedness that the Company may incur.
Management believes that the limit on indebtedness does not
significantly restrict the Company's liquidity and that such
liquidity is adequate to meet foreseeable requirements.
While an increase in capital expenditures is expected in the
remainder of fiscal 1995, management expects that internally
generated funds, supplemented by available borrowing capacity, will
be adequate to finance such expenditures.
9
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Annual Meeting of Shareholders of Ruddick Corporation was
held on February 2, 1995 (the "Annual Meeting"). Proxies
for the Annual Meeting were solicited pursuant to Regulation 14A
under the Securities Exchange Act of 1934, as amended. The
shareholders voted upon the following matter at the Annual Meeting:
ELECTION OF DIRECTORS
The shareholders elected four directors for terms ending in
1998. In addition, the following directors currently are serving
for terms to expire in 1996 or 1997, as indicated: Edwin B.
Borden, Jr. (1996), R. Stuart Dickson (1996), Hugh L. McColl, Jr.
(1996), Thomas M. Belk (1997), James E. S. Hynes (1997), and E. C.
Wall, Jr. (1997). There was no solicitation in opposition to
management's nominees as listed in the proxy statement, and all
such nominees were elected. The following information is furnished
with respect to each director elected at the meeting:
Shares
Director Elected Shares Voted Withholding Broker
at Annual Meeting for Election Authority Non-Votes
John W. Copeland 19,334,079 167,597 N/A
Alan T. Dickson 19,328,804 172,872 N/A
Beverly F. Dolan 19,313,362 188,314 N/A
Roddey Dowd, Sr. 19,271,884 229,292 N/A
10
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS
Exhibit No. Description of Exhibit
4.1 Revolving Credit Agreement dated as of February 15,
1995 between Ruddick Corporation and First
Union National Bank of North Carolina
4.2 Revolving Credit Agreement dated as of February 15,
1995 between Ruddick Corporation and
NationsBank, National Association (Carolinas)
4.3 Revolving Credit Agreement dated as of February 15,
1995 between Ruddick Corporation and Wachovia Bank
of North Carolina, National Association
11 Statement re: Computation of
per share earnings
27 Financial Data Schedule
(B) REPORTS ON FORM 8-K - None
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF
1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON
ITS BEHALF BY THE UNDERSIGNED THEREUNTO DULY AUTHORIZED.
RUDDICK CORPORATION
DATE: May 15, 1995
/s/ R. N. BRIGDEN
VICE PRESIDENT - FINANCE
(PRINCIPAL FINANCIAL OFFICER)
REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT, dated as of this 15th day
of February, 1995, is entered into by and between RUDDICK
CORPORATION, a North Carolina corporation (herein called the
"Borrower"), and FIRST UNION NATIONAL BANK OF NORTH CAROLINA, a
national banking association (the "Bank");
W I T N E S S E T H:
WHEREAS, the Borrower and the Bank currently are parties to
an Amended and Restated Revolving and Term Loan Agreement dated
as of March 31, 1994 (the "Existing Credit Agreement") pursuant
to which the Bank agreed to make available to the Borrower a
revolving credit facility in an aggregate principal amount of up
to $20,000,000 as evidenced by that interim promissory note of
the Borrower dated May 16, 1994 payable to the order of the Bank
in the original principal amount of $20,000,000 (the "Existing
Note"); and
WHEREAS, the Borrower has requested that the Bank make
available to the Borrower a revolving credit facility of up to
$33,333,333.00, a portion of the proceeds of which will be used
to repay all principal outstanding under the Existing Note
together with any accrued and unpaid interest thereon;
NOW, THEREFORE, in consideration of the mutual covenants,
promises and conditions herein set forth, the Borrower and the
Bank hereby agree as follows:
1. DEFINITIONS. The terms defined in this Section
(except as herein otherwise expressly provided or unless the
context otherwise requires) for purposes of this Agreement shall
have the respective meanings specified in this Section. Unless
otherwise specified herein, all accounting terms used herein
shall be interpreted in the manner consistent with their usage in
Generally Accepted Accounting Principles. All determinations of
Consolidated Current Liabilities, Consolidated EBITDA,
Consolidated Fixed Charges, Consolidated Funded Debt,
Consolidated Net Income, Consolidated Tangible Net Worth,
Consolidated Shareholders' Equity and Consolidated Total Assets
shall be made by reference to the consolidated financial
statements of the Borrower and its subsidiaries described in
Section 12(a) hereof. All other financial determinations shall be
made by reference to the detailed accounting records of the
Borrower and its subsidiaries, consolidated on the same basis as
in the preparation of the financial statements described in
Section 12(a) hereof.
"Advance" means any borrowing hereunder that is a Base
Rate Loan, a CD Rate Loan or a LIBOR Loan, as the case may
be.
"Agreement" means this Revolving Credit Agreement,
including all exhibits and schedules hereto, as the same may
from time to time be modified, amended or supplemented.
"Applicable Margin" means, for the purposes of
calculating (i) the applicable interest rate for the
Interest Period for any LIBOR Loan, (ii) the applicable
interest rate for any CD Rate Loan and (iii) the applicable
rate for the Commitment Fee for purposes of Section 5
hereof, the percent per annum set forth below. Such
Applicable Margin shall be (A) determined as of the last day
of each fiscal quarter of the Borrower (the "Determination
Date") based upon the ratio of Consolidated Funded Debt as
at the Determination Date to Consolidated EBITDA for the
four-quarter period then ended (such calculation to be made
based upon the financial statements as of such date and for
the period then ended delivered pursuant to Section 12(a)
hereof and applied retroactively to such Determination Date)
and (B) applicable to all LIBOR Loans made, renewed or
converted, all CD Rate Loans outstanding and any Commitment
Fee accruing, as the case may be, on or after the most
recent Determination Date to occur, as specified below:
Ratio of Applicable
Consolidated Funded Margin Applicable
Debt to for CD Margin for
Consolidated Rate Loans and Commitment
EBITDA LIBOR Loans Fee
Greater than or equal to
3.75 to 1.00 .725% .25%
Greater than or equal to
3.00 to 1.00 but
less than 3.75 to 1.00 .600% .225%
Greater than or equal to
2.25 to 1.00 but
less than 3.00 to 1.00 .525% .175%
Greater than or equal to
1.50 to 1.00 but
less than 2.25 to 1.00 .450% .150%
Greater than or equal to
.900 to 1.00 but
less than 1.50 to 1.00 .400% .125%
Less than .900 to 1.00 .375% .125%
"Authorized Officer" means any of the President, Vice
President-Finance and Principal Accounting Officer (for
Securities and Exchange Commission reporting purposes) of
the Borrower.
"Base Rate" means, for any Base Rate Loan, the greater
of (i) the Prime Rate or (ii) the Federal Funds Effective
Rate plus one-half of one percent (.5%), each change in such
Base Rate to be effective as of the effective date of any
change in the Prime Rate or the Federal Funds Effective Rate
giving rise thereto.
"Base Rate Loan" means any Loan for which the rate of
interest is determined by reference to the Base Rate.
"Business Day" means any date which is not a Saturday,
Sunday or a day on which banks in the state of North
Carolina are authorized or obligated by law, executive order
or governmental decree to be closed.
"CD Rate" means the secondary certificate of deposit
rate for a maturity of 90 days as recorded by the New York
Federal Reserve Bank, as adjusted for current bank reserve
requirements and Federal Deposit Insurance Corporation
insurance for certificates of deposit in excess of $100,000,
plus the Applicable Margin with respect to CD Rate Loans.
"CD Rate Loan" means a Loan for which the rate of
interest is determined by reference to the CD Rate. Any
change in the interest rate resulting from a change in the
90-day CD Rate shall become effective as of the opening of
business on the date of such change in the interest rate
caused by a change in the 90-day CD Rate.
"Closing Date" means the date on which this Agreement
is executed and delivered by the Borrower and the Bank and
on which the conditions set forth in Section 11(a) hereof
have been satisfied.
"Code" means the Internal Revenue Code of 1986, as
amended from time to time, including any rules and
regulations promulgated thereunder.
"Consistent Basis" means in reference to the applica-
tion of Generally Accepted Accounting Principles, that the
accounting principles observed in the current period are
comparable in all material respects to those applied in the
preceding period.
"Consolidated Current Liabilities" means the current
liabilities of the Borrower and its subsidiaries on a
consolidated basis.
"Consolidated EBITDA" means, with respect to the
Borrower and its subsidiaries for any period of computation
thereof, the SUM of, without duplication, (i) Consolidated
Net Income, (ii) consolidated interest expense, (iii) taxes
paid on income, (iv) amortization, and (v) depreciation, all
determined on a consolidated basis in accordance with
Generally Accepted Accounting Principles.
"Consolidated Fixed Charge Ratio" means, with respect
to the Borrower and its subsidiaries for the four
consecutive fiscal quarters immediately preceding the time
of calculation, the sum of (a) (i) Consolidated Net Income,
(ii) Consolidated Fixed Charges and (iii) income taxes,
divided by (b) Consolidated Fixed Charges.
"Consolidated Fixed Charges" means consolidated net
interest expense plus consolidated rent payments under
operating leases for the period of the Borrower and its
subsidiaries.
"Consolidated Funded Debt" means all Indebtedness which
constitutes consolidated long term debt of the Borrower and
its subsidiaries, including (a) any Indebtedness with a
maturity more than one year after the creation of such
Indebtedness and (b) any portion thereof included in
Consolidated Current Liabilities.
"Consolidated Net Income" means the consolidated net
income of the Borrower and its subsidiaries, after provision
for taxes.
"Consolidated Shareholders' Equity" means shareholders'
equity of the Borrower determined on a consolidated basis in
accordance with GAAP.
"Consolidated Tangible Net Worth" means the
Consolidated Shareholders' Equity reduced by the recorded
net balances of copyrights, patents, trademarks, goodwill,
capitalized advertising costs, organization costs, licenses,
franchises, exploration permits and import and export
permits.
"Consolidated Total Assets" means the aggregate amount
of all assets or resources of the Borrower and its
subsidiaries on a consolidated basis.
"Consolidated Total Capitalization" means the total of
Consolidated Funded Debt and Consolidated Shareholders'
Equity of the Borrower and its subsidiaries.
"Default" means any event which with the giving of
notice, lapse of time, or both, would become an Event of
Default.
"Dollars" and the symbol "$" means dollars constituting
legal tender for the payment of public and private debts in
the United States.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time, including any
rules and regulations promulgated thereunder.
"Event of Default" has the meaning given such term in
SECTION 16 hereof.
"Fiscal Year" means the 52/53-week fiscal period of the
Borrower ending on the Sunday closest to September 30 of
each calendar year.
"Fiscal Year End" means the last day of the Borrower's
Fiscal Year.
"Generally Accepted Accounting Principles" or "GAAP"
means those principles of accounting set forth in the
Statements of the Financial Accounting Standards Board or
the American Institute of Certified Public Accountants or
which have other substantial authoritative support and are
applicable in the circumstances as of the date of a report
as such principles are from time to time supplemented and
amended.
"Indebtedness" means all obligations for borrowed money
or the deferred purchase price of property or services,
capitalized lease obligations determined in accordance with
Statement No. 13 of the Financial Accounting Standards Board
as in effect as of the date of this Agreement, and
guarantees of the foregoing, but shall exclude any such
obligations or guarantees of an Unrestricted Subsidiary or
any such obligations or guarantees of or by the Borrower to
an Unrestricted Subsidiary unless such obligations of or by
the Borrower to an Unrestricted Subsidiary are deemed to be
material with regard to financial reporting in accordance
with GAAP.
"Interest Period" for each LIBOR Loan means a period
commencing on the date such LIBOR Loan is made or converted
and each subsequent period commencing on the last day of the
immediately preceding Interest Period for such LIBOR Loan,
and ending, at the Borrower's option, on the date one, two,
three or six months thereafter as notified to the Bank by
the Borrower three (3) LIBOR Business Days prior to the
beginning of such Interest Period; PROVIDED, that,
(i) if the Borrower fails to notify the Bank of
the length of an Interest Period three (3) LIBOR
Business Days prior to the first day of such Interest
Period, the Loan for which such Interest Period was to
be determined shall be deemed to be a CD Rate Loan;
(ii) if an Interest Period for a LIBOR Loan would
end on a day which is not a LIBOR Business Day such
Interest Period shall be extended to the next LIBOR
Business Day (unless such extension would cause the
applicable Interest Period to end in the succeeding
calendar month, in which case such Interest Period
shall end on the next preceding LIBOR Business Day);
(iii) any Interest Period which begins on the
last LIBOR Business Day of a calendar month (or on a
day for which there is no numerically corresponding day
in the calendar month at the end of such Interest
Period) shall end on the last LIBOR Business Day of a
calendar month; and
(iv) no Interest Period shall extend past the
Termination Date.
"LIBOR Base Rate" means for any LIBOR Loan, in respect
of the Interest Period specified by the Borrower for such
LIBOR Loan, the rate (expressed as a percentage and rounded
upward if necessary to the nearest 1/100 of 1%) (which shall
be the same for each day of such Interest Period) determined
by the Bank in good faith in accordance with its usual
procedures for its customers generally to be the average of
the rates per annum for deposits in Dollars offered to major
banks in the London interbank market at approximately 11:00
A.M. London, England time two (2) LIBOR Business Days prior
to the commencement of the applicable Interest Period in an
amount approximately equal to the principal amount of, and
for a period comparable to the Interest Period for, such
LIBOR Loan.
"LIBOR Business Day" means a Business Day on which the
relevant international financial markets are open for the
transaction of the business contemplated by this Agreement
in London, England and Charlotte, North Carolina.
"LIBOR Loan" means a Loan for which the rate of
interest is determined by reference to the LIBOR Rate.
"LIBOR Rate" means, for the Interest Period for any
LIBOR Loan, the rate of interest per annum determined
pursuant to the following formula:
LIBOR = (Libor Base Rate\(1-Reserve Requirement))
Rate + Applicable Margin
"Lien" means as to any Person, any mortgage, lien,
pledge, adverse claim, charge, security interest, or other
encumbrance in or on, or interest or title of any vendor,
lessor, lender or other secured party to or of the Person
under any conditional sale or other title retention
agreement or capital lease with respect to any property or
asset of the Person.
"Loan" or "Loans" means any of the Base Rate Loans, CD
Rate Loans or LIBOR Loans.
"Note" means the revolving credit promissory note
delivered pursuant to SECTION 2(b) hereof.
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA.
"Person" means any individual, joint venture,
corporation, company, voluntary association, partnership,
trust, joint stock company, unincorporated organization,
association, government, or any agency, instrumentality, or
political subdivision thereof, or any other form of entity.
"Plan" means any employee benefit or other plan
established or maintained or to which contributions have
been made by the Borrower or any subsidiary and which is
covered by Title IV of ERISA or to which Section 412 of the
Code applies.
"Prime Rate" means the rate of interest per annum
announced publicly by the Bank as its prime rate from time
to time. The Prime Rate is not necessarily the best or the
lowest rate of interest offered by the Bank.
"Property or Equipment" means any interest in any kind
of property, equipment, or asset, whether real, personal, or
mixed, or tangible or intangible.
"Regulatory Change" means any change in, or the
adoption or making of new, United States Federal or state
laws or regulations (including Regulation D of the Board of
Governors of the Federal Reserve System ("Regulation D") and
capital adequacy regulations) or foreign laws or regulations
or the adoption or making after such date of any
interpretations, directives or requests applying to a class
of banks, which includes the Bank, under any United States
Federal or state or foreign laws or regulations (whether or
not having the force of law) by any court or governmental or
monetary authority charged with the interpretation or
administration thereof or compliance by the Bank with any
request or directive regarding capital adequacy, whether or
not having the force of law, whether or not failure to
comply therewith would be unlawful.
"Reportable Event" has the meaning given such term in
Section 4043(b) of Title IV of ERISA.
"Reserve Requirement" means, for any LIBOR Loan, the
maximum aggregate rate at which reserves (including, without
limitation, any marginal, supplemental or emergency
reserves) are required to be maintained with respect thereto
under Regulation D by the member banks of the Federal
Reserve System with respect to Dollar funding in the London
interbank market. Without limiting the effect of the
foregoing, the Reserve Requirement shall reflect any other
reserves required to be maintained by such member banks by
reason of any Regulatory Change against (i) any category of
liabilities which includes deposits by reference to which
the LIBOR Base Rate is to be determined or (ii) any category
of extensions of credit or other assets which include LIBOR
Loans.
"Restricted Subsidiary" shall mean any Subsidiary that
is not an Unrestricted Subsidiary.
"Revolving Credit Facility" means the facility
described in SECTION 2(a) hereof providing for Loans to the
Borrower by the Bank in an aggregate principal amount equal
to not more than the Committed Amount.
"Subsidiary" means any corporation of which the
Borrower at the time owns, directly or through any
intervening medium, more than 50% of the shares of its
voting stock which has power to elect a majority of the
board of directors.
"Termination Date" means the earliest to occur of
(i) February 15, 2000 or such later date as shall be
determined pursuant to SECTION 9 hereof, or (ii) the date of
termination of Bank's obligations pursuant to SECTION 16
upon the occurrence of an Event of Default, or (iii) such
date as the Borrower may voluntarily and permanently
terminate the Revolving Credit Facility by payment in full
of all amounts outstanding hereunder.
"Unrestricted Subsidiary" shall mean any subsidiary
created or acquired by the Borrower or its Restricted
Subsidiaries which is incorporated outside the United States
or substantially all of the business of which is carried on
outside the United States.
2. THE LOAN.
(a) COMMITMENT TO LEND. Subject to the terms and
conditions of this Agreement, the Bank agrees to make Loans
to the Borrower, at any time and from time to time before
February 15, 2000, in an aggregate principal amount not in
excess at any time of $33,333,333 (the "Committed Amount",
which Committed Amount is a portion of aggregate financing
commitments of $100,000,000 ("Total Commitments") from the
Bank, Wachovia Bank of North Carolina, N.A. and NationsBank,
National Association (Carolinas) (collectively, the
"Banks")). Prior to the Termination Date, the Borrower may
use the Committed Amount by borrowing, paying and
reborrowing such amount, all in accordance with the terms
and conditions of this Agreement.
Borrower agrees to borrow, pay and reborrow in amounts
from the Banks on a pro rata basis as determined by each
Bank's Committed Amount in relation to Total Commitments.
Each borrowing shall be in an aggregate amount of not less
than $300,000 or an integral multiple thereof, to be shared
by the Banks pro rata.
(b) THE NOTE. On or before the date of the first
borrowing hereunder, Borrower shall execute and deliver to
the Bank a revolving credit promissory note in the principal
amount of $33,333,333, dated as of the date of this
Agreement and payable in full on the Termination Date (as
the same may be extended pursuant to SECTION 9 hereof) in
form and substance substantially similar to the attached
EXHIBIT A. The Bank or subsequent holder is hereby
authorized by the Borrower and agrees to set forth on the
reverse side of the Note issued to the Bank the amount of
each borrowing made thereunder and repayment thereof made by
the Borrower.
(c) ADVANCES AND RATE SELECTION. The Borrower shall
give the Bank (A) telephonic notice of each LIBOR Loan,
whether representing an additional Advance hereunder or the
conversion of borrowings hereunder from Base Rate Loans or
CD Rate Loans to LIBOR Loans or the election of a subsequent
Interest Period for any LIBOR Loan, prior to 2:00 P.M.
Charlotte, North Carolina time at least three LIBOR Business
Days prior to the day such Advance is to be made or such
Loan is to be converted or continued; and (B) telephonic
notice of each Base Rate Loan or CD Rate Loan representing
an additional Advance hereunder or the conversion of
borrowings hereunder from LIBOR Loans to Base Rate Loans or
CD Rate Loans prior to 2:00 P.M. Charlotte, North Carolina
time on the day such Advance is to be made or such Loan is
to be converted. Each such notice, which shall be effective
upon receipt by the Bank, shall specify the amount of the
Advance, the type of Loan (Base Rate, CD Rate or LIBOR), the
date of the Advance and, if a LIBOR Loan, the Interest
Period to be used in the computation of interest. In the
case of a LIBOR Loan, the Borrower shall provide the Bank
written confirmation of telephonic notice of such LIBOR Loan
on the same day by telefacsimile transmission setting forth
the information described above, but failure to provide such
confirmation shall not affect the validity of such
telephonic notice. The Borrower shall have the option to
elect the duration of subsequent Interest Periods and to
convert the Loans in accordance with SECTION 8 hereof. If
the Bank does not receive a notice of election of duration
of an Interest Period or to convert by the time prescribed
hereby and by SECTION 8 hereof, the Borrower shall be deemed
to have elected to convert to or continue such Loan as a CD
Rate Loan until the Borrower otherwise notifies the Bank in
accordance herewith and with SECTION 8.
(d) REPAYMENTS. Each repayment shall be in an
aggregate amount of not less than $300,000 or an integral
multiple thereof, each such repayment to be shared on a pro
rata basis by the Banks as determined by each Bank's
Committed Amount in relation to Total Commitments with
respect to each and every such repayment.
3. PAYMENT OF INTEREST. The Borrower shall pay interest
to the Bank on the outstanding and unpaid principal amount of
each Loan, for the period commencing on the date of such Loan
until such Loan shall be due, at the LIBOR Rate, CD Rate or the
Base Rate, as elected or deemed elected by the Borrower or
otherwise applicable to such Loan as herein provided. Interest
on the outstanding principal balance of each Loan shall be
computed on the basis of a year of 360 days and calculated for
the actual number of days elapsed. Interest on each Loan shall
be paid (i) quarterly in arrears on the last Business Day of each
March, June, September and December commencing March 1995, on
each Base Rate Loan and on each CD Rate Loan, (ii) on the last
day of the applicable Interest Period for each LIBOR Loan and,
for any LIBOR Loan having an Interest Period extending beyond
three months, also on the date occurring three months after the
commencement of such Interest Period, and (iii) upon payment in
full of the principal amount of such Loan.
Interest on the Note after default shall be determined based
on the Base Rate plus 1%, but not to exceed the highest rate
permitted by applicable law.
4. PAYMENT OF PRINCIPAL. The principal amount of all
Loans shall be due and payable to the Bank in full on the
Termination Date (as the same may be extended pursuant to SECTION
9 hereof) or earlier as herein expressly provided. Except as
hereinafter provided, the principal amount of the Loans may be
prepaid in whole or in part at any time without premium or
penalty.
The Borrower shall promptly pay to the Bank, upon request,
such amount or amounts as shall be sufficient (in the reasonable
determination of the Bank) to compensate it for any loss, cost or
expense incurred by it as a result of any of the following (each
a "Breakage Event"):
(a) any payment, prepayment or conversion of a LIBOR
Loan on a date other than the last day of the Interest
Period for such LIBOR Loan; or
(b) any failure by the Borrower to borrow a LIBOR Loan
or convert a Base Rate Loan or a CD Rate Loan into a LIBOR
Loan on the date for such borrowing or conversion specified
in the relevant notice under SECTION 8 hereof;
such compensation to include, without limitation, an amount equal
to the excess, if any, of the amount of interest which would have
accrued on the principal amount of such LIBOR Loan for the period
from the date of such Breakage Event to the last day of the then
current Interest Period for such LIBOR Loan at (i) the LIBOR Base
Rate on the first day of such Interest Period over (ii) the LIBOR
Base Rate as reasonably determined by the Bank as of the date of
such Breakage Event for Dollar deposits of amounts comparable to
such principal amount and maturities comparable to such period.
A good faith determination of the Bank as to the amounts payable
pursuant to this SECTION 4 shall be conclusive absent manifest
error. The Bank shall furnish to the Borrower calculations in
reasonable detail setting forth the Bank's determination of the
amount of such compensation.
5. COMMITMENT FEE. Until the Borrower's option to borrow
hereunder has been fully exercised, the Borrower will pay to the
Bank a commitment fee (the "Commitment Fee") equal in amount to
the product of the Applicable Margin with respect to the
Commitment Fee multiplied by the average daily amount by which
the Bank's Committed Amount exceeds the average daily principal
amount outstanding under the Note for the applicable period,
payable in arrears from the date hereof on the interest due dates
set out in SECTION 3(i) hereof.
6. TERMINATION OR REDUCTION OF COMMITTED AMOUNT. So long
as the Note is outstanding, Borrower shall have the right from
time to time upon not less than three days' prior written notice
to the Banks to terminate, or to reduce, the Total Commitments
and the Bank's Committed Amount on a pro rata basis. Any partial
reduction shall be in an amount equal to 5% of Total Commitments
or any integral multiple thereof and shall reduce permanently the
Bank's Committed Amount as a pro rata share of Total Commitments.
Each reduction shall be accompanied by a prepayment of the Note
(together with accrued interest thereon) to the extent that the
principal amount thereof then outstanding exceeds the Committed
Amount as so reduced.
7. USE OF PROCEEDS. The proceeds of the Loans made
hereunder shall be used by the Borrower first to repay all
amounts outstanding under the Existing Note, with the excess to
be used for general corporate purposes.
8. CONVERSIONS AND ELECTIONS OF INTEREST PERIODS. The
duration of the initial Interest Period for each LIBOR Loan shall
be as specified by the Borrower. Provided that no Event of
Default shall have occurred and be continuing and subject to the
limitations set forth below, the Borrower may on not less than
three LIBOR Business Days' notice to the Bank on or before 2:00
P.M. Charlotte, North Carolina time:
(a) elect a subsequent Interest Period for all or a
portion of the outstanding LIBOR Loans to begin on the last
day of the Interest Period for such LIBOR Loans;
(b) convert all or a portion of the outstanding LIBOR
Loans to Base Rate Loans or CD Rate Loans on the last day of
the Interest Period for such LIBOR Loans; and
(c) convert all or a portion of the outstanding Base
Rate Loans and CD Rate Loans to LIBOR Loans on any date.
Notice of any such elections or conversions shall specify
the effective date of such election or conversion and the
Interest Period to be applicable to the LIBOR Loan as continued
or converted. Each election and conversion pursuant to this
SECTION 8 shall be subject to the limitations on LIBOR Loans set
forth in the definition of "Interest Period" herein. If the Bank
does not receive a notice of election of duration of an Interest
Period or to convert an outstanding LIBOR Loan by the time
prescribed above, the Borrower shall be deemed to have elected to
convert such LIBOR Loan to a CD Rate Loan on the last day of the
Interest Period for such LIBOR Loan.
9. EXTENSION OF TERMINATION DATE. The Borrower shall have
the option to extend the Termination Date for an additional 365-
day period upon each anniversary of the Closing Date such that
the Revolving Credit Facility, as so extended, will continuously
have a five year term. The Termination Date shall be deemed
automatically extended, and the provisions of this Agreement and
the Note shall continue to be in full force and effect for such
extended five year period, UNLESS: (i) the Borrower shall give
written notice to the Bank, not less than 15 days prior to the
anniversary date of the Closing Date, of its intention not to so
extend the Termination Date; or (ii) the Bank shall give written
notice to the Borrower, not less than 15 days prior to the
anniversary date of the Closing Date, of its intention not to so
extend the Termination Date.
10. REPRESENTATIONS AND WARRANTIES. In borrowing
hereunder, the Borrower represents and warrants to the Bank,
which representations and warranties will survive the delivery of
the Note and the making of the Loans hereunder, as follows:
(a) DUE INCORPORATION, ETC. The Borrower and each
Restricted Subsidiary is a corporation duly organized,
validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated, and has the
corporate power and legal authority to own its property and
to carry on its business as now being conducted and is duly
qualified to transact business as a foreign corporation in
every jurisdiction where such qualification is necessary.
The Borrower has the corporate power to execute and perform
this Agreement, to borrow hereunder and to execute and
deliver the Note, and to do so will not violate its Articles
of Incorporation or Bylaws, any law to which it is subject,
or any agreement or instrument to which it is a party.
(b) LITIGATION. Except as set forth in the financial
statements described in SECTION 10(c) hereof, there is no
litigation or proceeding pending or, to the knowledge of the
Borrower, threatened which, if decided adversely to the
Borrower or any subsidiary, would have a material adverse
effect upon the financial condition or business of the
Borrower and its subsidiaries, taken as a whole.
(C) FINANCIAL CONDITION. The Consolidated Balance
Sheet of the Borrower and its subsidiaries as at October 2,
1994 and the related Statements of Consolidated Income and
Retained Earnings and Statements of Cash Flows of the
Borrower and its subsidiaries for the fiscal year then
ended, all of which have been delivered to the Bank prior to
the execution of this Agreement, are correct and complete
and fairly present the financial condition of the Borrower
and its subsidiaries and the results of their operations and
their retained earnings as of the dates and for the periods
referred to. The consolidated balance sheets of the
Borrower and its subsidiaries as at January 1, 1995 and the
related statements of consolidated income and retained
earnings and statements of consolidated cash flows for the
three-month period then ended, copies of which have been
furnished to the Bank, are true and correct and present
fairly, subject to normal recurring year-end adjustments,
the financial condition of the Borrower and its subsidiaries
as at such date and the results of their operations and
their retained earnings as of such date and for such period.
All financial statements have been prepared in accordance
with Generally Accepted Accounting Principles applied on a
Consistent Basis throughout the periods involved. Since
January 1, 1995, no material adverse changes in the
financial condition, the business or operations of the
Borrower and its subsidiaries, taken as a whole, have
occurred.
The real estate and other fixed assets of the Borrower
and its subsidiaries are subject to no mortgage or lien
securing an indebtedness of a material principal amount
except as shown in the balance sheets referred to above.
The Borrower and its subsidiaries have no liabilities,
direct or contingent, except those disclosed in the
financial statements referred to above, and except those
arising in the ordinary course of business since the dates
of such financial statements, having in the aggregate no
materially adverse effect on the financial condition of the
Borrower and its subsidiaries, taken as a whole. The
Borrower and its subsidiaries have made no investments in,
advances to or guaranties of the obligations of any
corporation, individual or other entity other than Borrower
in an aggregate amount material to the consolidated
financial condition of the Borrower and its subsidiaries,
taken as a whole, except those disclosed in the financial
statements referred to above.
(d) GOVERNMENTAL CONTRACTS. The Borrower and its
subsidiaries are not subject to the renegotiation of any
government contract in any material amount.
(e) TAX RETURNS. The Borrower and its subsidiaries
have filed all required federal, state, and local tax
returns and have paid all taxes as shown on such returns as
they have become due. Federal income tax returns have been
audited, or closed by the operation of applicable statutes
of limitation, through 1990, and no claims have been
assessed and are unpaid with respect to such taxes except as
shown in the financial statements referred to in SECTION
10(c) above.
11. CONDITIONS TO CLOSING.
(a) CONDITIONS PRECEDENT. The obligation of the Bank
to lend hereunder is subject to the following conditions
precedent:
(i) LEGAL OPINION. On or before the date
hereof, the Bank shall have received the favorable
written opinion of Smith Helms Mulliss & Moore, L.L.P.,
counsel for the Borrower, addressed to the Bank, and
satisfactory in form and substance to the Bank,
substantially in the form of EXHIBIT B attached hereto.
(ii) CORPORATE RESOLUTIONS. The Bank shall have
received, on or before the date of the first borrowing
hereunder, (A) a copy of the resolutions of the Board
of Directors, or appropriate committee thereof, of the
Borrower, certified on such date, authorizing the
execution and delivery of this Agreement, the borrowing
hereunder and the execution and delivery of the Note;
and (B) such additional documents as the Bank or
counsel for the Bank may reasonably request.
(iii) REPRESENTATIONS AND WARRANTIES. On the
date of any Advance hereunder, the representations and
warranties set forth in SECTION 10 hereof shall be true
and correct on and as of such date with the same effect
as though such representations and warranties had been
made on and as of such date.
(iv) DUE COMPLIANCE. At the time of each Advance
hereunder, the Borrower and each subsidiary shall be in
compliance with all of the terms and provisions set
forth herein on their part to be observed and
performed, and no Event of Default as specified in
SECTION 16 below, nor any event which upon notice or
lapse of time, or both, would constitute such an Event
of Default, shall have occurred at the time of such
borrowing.
(v) PAYMENT OF FACILITY FEE. On or before the
date hereof, the Bank shall have received payment of
all fees due and payable in connection with the
Revolving Credit Facility established hereby.
(b) COVENANT AND CONDITION SUBSEQUENT. The Borrower
shall deliver to the Bank, not more than 90 days after the
date of the first borrowing hereunder, such additional
documents as the Bank or counsel for the Bank may reasonably
request.
12. AFFIRMATIVE COVENANTS. The Borrower covenants and
agrees that from the date hereof and until payment in full of the
principal and interest on the Note, unless the Bank shall
otherwise consent in writing, the Borrower will:
(a) FINANCIAL REPORTS AND OTHER DATA.
(i) As soon as practicable and in any event
within 45 days after the end of each of the first three
quarterly periods of each Fiscal Year of the Borrower,
deliver to the Bank (A) a consolidated balance sheet of
the Borrower and its subsidiaries as at the end of such
quarterly period, and related consolidated statements
of income and retained earnings for such quarterly
period and for the period from the beginning of the
current Fiscal Year to the end of such quarterly
period, setting forth in comparative form figures for
the corresponding periods in the preceding Fiscal Year,
all to be in reasonable detail and certified by an
Authorized Officer to have been prepared in accordance
with Generally Accepted Accounting Principles applied
on a Consistent Basis, subject only to changes result-
ing from normal, recurring year-end adjustments; and
(B) computations demonstrating compliance with the
provisions of SECTIONS 12(l), 12(m) and 13(a) hereof,
certified by an Authorized Officer to be true and
correct and to have been prepared from the foregoing
quarterly statements, provided however that in making
the quarterly (but not the annual) computation of
Consolidated Tangible Net Worth as described in SECTION
12(m), the Borrower may omit adjustments for
amortization of intangible items unless such
adjustments are requested by the Bank;
(ii) As soon as practicable and in any event
within 90 days after each Fiscal Year End, deliver to
the Bank (A) a consolidated balance sheet of the
Borrower and its subsidiaries as at such Fiscal Year
End, and related consolidated statements of income and
retained earnings and changes in consolidated financial
position for such Fiscal Year, setting forth in each
case in comparative form corresponding figures from the
preceding annual statements, all in reasonable detail
and satisfactory in scope to the Bank, and audited by
and containing (as to the consolidated financial
statements) an unqualified opinion of independent
certified public accountants of national standing as
shall be satisfactory to the Bank and (B) the
computations required by SECTION 12(a)(i)(B) hereof;
(iii) Deliver to the Bank a copy of each
report filed by the Borrower with the Securities and
Exchange Commission pursuant to SECTION 13(a) or 14 of
the Securities Exchange Act of 1934, including each
Annual Report on Form 10-K, Quarterly Report on Form
10-Q, Current Report on Form 8-K, and definitive proxy
statement, in each case within 15 days of the filing
thereof; and
(iv) With reasonable promptness, deliver such
additional financial or other data as the Bank may
reasonably request. The Bank is hereby authorized to
deliver a copy of any financial statements or other
information relating to the business operations or
financial condition of the Borrower and its
subsidiaries which may be furnished to it or come to
its attention pursuant to this Agreement or otherwise,
to any regulatory body or agency having jurisdiction
over the Bank.
(b) TAXES AND LIENS. Promptly pay, or cause to be
paid, all taxes, assessments or other governmental charges
which may lawfully be levied or assessed upon the income or
profits of the Borrower, or any subsidiary, or upon any
property, real, personal or mixed, belonging to the Borrower
or any subsidiary, or upon any part thereof, and also any
lawful claims for labor, material and supplies which, if
unpaid, might become a lien or charge against any such
property; provided, however, neither the Borrower nor any
subsidiary shall be required to pay any such tax,
assessment, charge, levy or claim so long as the validity
thereof shall be actively contested in good faith by proper
proceedings and provided the Borrower shall, if requested by
the Bank, set up reserves therefor consistent with Financial
Accounting Standards Board Statement No. 5 and Accounting
Principles Board Statement No. 11 (such reserves not
required to be separately funded); but provided further that
any such tax, assessment, charge, levy or claim shall be
paid forthwith upon the commencement of proceedings to
foreclose any lien securing the same unless such proceeding
has been properly stayed.
(c) BUSINESS AND EXISTENCE. Do or cause to be done
all things necessary to preserve and to keep in full force
and effect its corporate existence, rights and franchises,
trade names, patents, trademarks and permits.
(d) INSURANCE ON PROPERTIES. Keep its business and
properties insured at all times with responsible insurance
companies and carry such types and amounts of insurance as
are usually carried by corporations engaged in the same or a
similar business similarly situated.
(e) MAINTAIN PROPERTY. Maintain its properties in
good order and repair and, from time to time, make all
needful and proper repairs, renewals, replacements,
additions and improvements thereto.
(f) RIGHT OF INSPECTION. Permit the Bank, at its
expense, to visit and inspect any of the properties,
corporate books and financial reports of the Borrower and
its subsidiaries in the presence of a corporate officer of
the Borrower or persons designated by them and to discuss
their affairs, finances and accounts with the principal
officers of the Borrower and their independent public
accountants, all at such reasonable times and as often as
the Bank may reasonably request.
(g) OBSERVE ALL LAWS. Conform to and duly observe all
laws, regulations and other valid requirements of any
regulatory authority with respect to the conduct of its
business, violation of which would materially adversely
affect the operations or business of the Borrower or any of
its subsidiaries.
(h) COVENANTS EXTENDED TO RESTRICTED SUBSIDIARIES.
Cause each Restricted Subsidiary to do with respect to
itself, its business and its assets, each of the things
required of the Borrower in SECTIONS 12(b) through 12(g)
hereof.
(i) BORROWER'S KNOWLEDGE OF DEFAULT. Immediately give
notice to the Bank of the occurrence of any Default or Event
of Default hereunder or under any other obligation
representing Indebtedness of the Borrower or any Restricted
Subsidiary, of which the Borrower or such subsidiary has
knowledge, specifying the nature thereof, the period of
existence thereof and what action the Borrower proposes to
take with respect thereto.
(j) JUDGMENTS, ETC. Immediately give the Bank written
notice of any judgment, attachment, levy, or execution
against the Borrower or any assets of the Borrower or any
subsidiary which involves (i) an amount of $250,000 or more
in excess of the amount covered by insurance, or (ii) an
amount in excess of $1,000,000, and establish or cause to be
established appropriate and adequate reserves to cover any
such claim, levy, attachment, or execution in any amount
satisfactory to its independent certified public
accountants.
(k) ERISA. Comply with all requirements of ERISA
applicable to it and its Restricted Subsidiaries and furnish
to the Bank as soon as possible and in any event within 30
days after the Borrower or its Restricted Subsidiaries or
duly appointed administrator of a Plan knows or has reason
to know that any Reportable Event with respect to any Plan
has occurred, a statement of an Authorized Officer setting
forth details as to such Reportable Event and any action
which the Borrower or its Restricted Subsidiaries proposes
to take with respect thereto, together with a copy of the
notice of such Reportable Event given to the PBGC or a
statement that said notice will be filed with the annual
report to the United States Department of Labor with respect
to such Plan if such filing has been authorized.
(l) CONSOLIDATED FIXED CHARGE RATIO. Maintain at the
end of each of the Borrower's fiscal quarters, a
Consolidated Fixed Charge Ratio of at least 1.50 to 1.00.
For purposes of this SECTION 12(l), the term "Consolidated
Fixed Charge Ratio" means for the four consecutive fiscal
quarters immediately preceding the time of any such
calculation (a) the sum of (i) Consolidated Net Income, (ii)
Consolidated Fixed Charges and (iii) income taxes, divided
by (b) Consolidated Fixed Charges.
(m) CONSOLIDATED TANGIBLE NET WORTH. Maintain
Consolidated Tangible Net Worth of not less than the
Required Amount computed in accordance with the remainder of
this paragraph. The Required Amount shall be $238,589,000
during Fiscal Year 1995. As of the last day of each Fiscal
Year, beginning with Fiscal Year 1995, the Required Amount,
including any prior increases, shall be increased by 40% of
the Consolidated Net Income for such Fiscal Year. In the
event Consolidated Net Income is a negative amount for any
Fiscal Year, the Required Amount shall not be adjusted as of
the end of such Fiscal Year, and the amount of any such
negative amount shall be carried forward and offset against
Consolidated Net Income for the next Fiscal Year for which
Consolidated Net Income is positive until such negative
amount is fully used.
13. NEGATIVE COVENANTS. The Borrower covenants and agrees
that from the date hereof until payment in full of the principal
and interest on the Note, unless the Bank shall otherwise consent
in writing, it will not, nor will it permit any Restricted
Subsidiary to, either directly or indirectly:
(a) CONSOLIDATED FUNDED DEBT. Incur, create, assume or
guarantee, or otherwise become or be liable in respect of
any Indebtedness which would be included in Consolidated
Funded Debt except:
(i) the Note;
(ii) the respective revolving credit promissory
notes of the Borrower payable to NationsBank, National
Association (Carolinas) and Wachovia Bank of North
Carolina, N.A. in the principal amounts of
$33,333,334.00 and $33,333,333.00, respectively, and
each dated as of the date hereof;
(iii) Indebtedness existing as of the date hereof;
and
(iv) Additional Indebtedness which in the
aggregate when added to the Indebtedness evidenced by
the Note or existing as of the date hereof, does not
exceed 60% of Consolidated Total Capitalization.
(b) RESTRICTED SUBSIDIARY INDEBTEDNESS. Incur,
create, assume or guarantee or otherwise become liable in
respect of any Indebtedness of a Restricted Subsidiary
except:
(i) borrowings among the Borrower and the
Restricted Subsidiaries;
(ii) extensions, renewals, or replacements of
Indebtedness existing as of the date hereof (without
increasing the principal amount thereof);
(iii) Indebtedness directly related to the
acquisition or construction of Property or Equipment,
but only to the extent of the purchase price or cost
thereof, or any Indebtedness assumed by imposition of
law in connection with the acquisition of an existing
business; or
(iv) Other Indebtedness in an amount not exceeding
15% of Consolidated Tangible Net Worth.
(c) LIMITATIONS ON LIENS. Incur, create, assume or
permit to exist any Lien of any kind upon any of its
property now owned or hereafter acquired or assets of any
character in an amount in excess of 15% of Consolidated
Tangible Net Worth, unless the Note is equally and ratably
secured with the Indebtedness secured by such Lien except
that the following Liens shall not be included in making a
determination of the amount of Liens:
(i) Liens for taxes or assessments or other
governmental charges or levies, either not yet due and
payable or being contested in good faith or to the
extent that nonpayment thereof shall be permitted;
(ii) Liens created by or resulting from any
litigation or legal proceeding which is currently being
contested in good faith by appropriate proceedings;
(iii) Other Liens incidental to the normal
conduct of the business of the Borrower or any
Restricted Subsidiary or the ownership of its property
which are not incurred in connection with the
incurrence of Indebtedness and which do not in the
aggregate materially impair the use of such property in
the operation of the business of the Borrower, and the
Borrower and its Restricted Subsidiaries taken as a
whole or the value of such property for the purposes of
such business;
(iv) Liens existing at the time of the issuance of
the Note;
(v) the extension, renewal or replacement of any
Lien permitted by the foregoing subparagraph (iv) in
respect of the same property theretofore subject
thereto or the extension, renewal or replacement
thereof (without increase of principal amount of the
Indebtedness secured);
(vi) Liens granted by the Restricted Subsidiaries
in favor of the Borrower; and
(vii) (A) any Lien on Property or Equipment
granted with respect to such Property or Equipment in
connection with the provision of all or a part of the
purchase price or cost of the construction of such
Property or Equipment (but not in excess of the amount
of such purchase price or cost) created
contemporaneously with, or within 120 days after, such
acquisition or the completion of such construction, or
(B) any Lien on Property or Equipment existing in such
Property or Equipment at the time of acquisition
thereof, whether or not the debt secured thereby is
assumed by the Borrower or such Restricted Subsidiary,
or (C) any Lien existing on the Property or Equipment
of a corporation at the time such corporation is merged
into or consolidated with the Borrower or a Restricted
Subsidiary, or at the time of a sale, lease or other
disposition of the Properties or Equipment of a
corporation or firm as an entirety or substantially as
an entirety to the Borrower or a Restricted Subsidiary;
provided however that the amount of any Lien permitted
under this subparagraph (vii) shall not exceed the fair
market value of the Property or Equipment covered by
such Lien.
(d) CONSOLIDATION, MERGER OR REORGANIZATION. Enter
into any transaction of merger or consolidation except that
(i) a Restricted Subsidiary may merge into the Borrower or
another Restricted Subsidiary, and (ii) the Borrower may
merge or consolidate with any corporation organized under
the laws of any state in the United States so long as (A)
the resulting or surviving entity expressly assumes the
obligations of the Borrower under this Agreement and the
Note and (B) no Event of Default exists hereunder after
giving effect to such merger.
(e) SALE OF ASSETS, DISSOLUTION, ETC. Sell, assign,
lease or otherwise dispose of all or substantially all of
its properties or assets (other than inventory), or any of
its notes, accounts or contract rights, or any assets or
properties necessary or desirable for the proper conduct of
its business, or wind up, liquidate or dissolve, or agree to
any of the foregoing, or permit any Restricted Subsidiary to
do so, except, as to any such transaction, to the extent the
total assets involved do not exceed either
(i) together with any other assets involved in
such transactions during the same Fiscal Year, 10% of
Consolidated Total Assets determined as of the end of
the last fiscal quarter prior to such transaction,
or,
(ii) together with any other assets involved in
such transactions since the date of this Agreement on a
cumulative basis, 25% of Consolidated Total Assets
determined as of the end of the last fiscal quarter
prior to such transaction.
Notwithstanding the foregoing, (x) any Restricted Subsidiary
may sell, lease, transfer, or otherwise dispose of its
assets to the Borrower or any other Restricted Subsidiary
and such assets shall not be included in the foregoing
calculations, and (y) upon the Borrower's giving notice to
the Bank of the intention of the Borrower or any Restricted
Subsidiary to sell, lease, transfer or otherwise dispose of
assets, for value, in an amount up to 25% of Consolidated
Total Assets as of the last fiscal quarter end prior to such
notice, and to reinvest the proceeds within one year
following such transaction, the Borrower or any Restricted
Subsidiary may effect such transactions and the assets
involved shall not be included in any calculation under (i)
or (ii) above, unless (A) the Bank fails to consent to the
proposed transactions within 10 days following the giving of
said notice, provided that such consent may not be
unreasonably withheld, or (B) proceeds are not reinvested
within the one year period, in which case the assets
involved in the transaction shall be deemed transferred as
of the expiration of such one year period and included the
calculations set forth in (i) and (ii) above. Any breach of
the covenant expressed in this SECTION 13(e) may be cured by
the prepayment, without penalty, of an amount of the
outstanding amount of the Note as bears the same proportion
to the total outstanding amount of such Note as the net book
value of the assets conveyed in violation of this section
shall be to the Consolidated Total Assets of the Borrower as
of the last fiscal quarter end prior to such transaction.
(f) FISCAL YEAR. Change its Fiscal Year End.
14. OPINIONS AND NOTICE OF OTHER DEFAULT. The Borrower
shall furnish at the reasonable request of the Bank opinions of
legal counsel and certificates of its officers, satisfactory to
the Bank, regarding matters incident to this Agreement. In
addition, the Borrower shall give the Bank prompt written notice
of the occurrence of any Event of Default under the terms of this
Agreement and of a default or failure of performance under any
other material agreement or contract to which it is a party or by
which it is bound.
15. DOCUMENTARY STAMPS. If any documentary or recording
tax should be assessed or the affixing of any stamps be required
in connection with the borrowing hereunder or the security
therefor, by state or federal governments, the Borrower will pay
the tax and the cost of the stamps.
16. DEFAULT. The occurrence of any one or more of the
following Events of Default will constitute a default by the
Borrower under this Agreement, whereupon the Note and all
indebtedness of the Borrower to the Bank will, at the option of
the Bank, immediately become due and payable without
presentation, demand, protest, or notice of any kind, all of
which are hereby expressly waived, and the Borrower will pay the
reasonable attorney's fees incurred by the Bank in connection
with such default or recourse against any collateral held by the
Bank as security for the indebtedness owed by the Borrower:
(a) Non-payment when due, whether by acceleration or
otherwise, of any principal payment on the Note;
(b) Non-payment, within ten days after the due date,
of interest on the Note, or of any premium, fee or other
charge under this Agreement;
(c) A breach or failure of performance by the Borrower
or any subsidiary of any provision of this Agreement which
is not remedied within 30 days after written notice from the
Bank;
(d) A representation or warranty by the Borrower is
false or erroneous in any material respect on the date as of
which made;
(e) Borrower or a Restricted Subsidiary: (i) files a
petition or has a petition filed against it under the
Bankruptcy Code or any proceeding for the relief of
insolvent debtors; (ii) generally fails to pay its debts as
such debts become due; (iii) has a custodian appointed for
it or its assets; (iv) benefits from or is subject to the
entry of an order for relief by any court of insolvency; (v)
makes an admission of insolvency seeking the relief provided
in the Bankruptcy Code or any other insolvency law; (vi)
makes an assignment for the benefit of creditors; (vii) has
a receiver appointed, voluntarily or otherwise, for its
property; (viii) suspends business; (ix) permits a judgment
in the amount of $250,000 or more to be obtained against it
which is not subject to payment by applicable insurance
coverage or is not promptly paid or promptly appealed and
secured pending appeal; or (x) becomes insolvent, however
otherwise evidenced;
(f) Failure by Borrower or a Restricted Subsidiary to
pay when due, or within any applicable grace period, any
amount owing on account of indebtedness for money borrowed
or the failure by Borrower or a Restricted Subsidiary to
observe or perform any covenant or undertaking on its part
to be observed or performed in any agreement evidencing,
securing or relating to such indebtedness, resulting in any
such case in an event of default or acceleration by the
holder of such indebtedness of the date on which such
indebtedness would otherwise be due and payable; or
(g) If the Borrower or a Restricted Subsidiary shall
become a party to merger, consolidation or other
reorganization with any other Person (including a de facto
merger by which all or substantially all of the property or
assets of another Person are acquired) which results in a
change of control of the Borrower except:
(i) a merger with a Restricted Subsidiary or
other domestic Subsidiary in which the Borrower is the
surviving or continuing corporation,
(ii) a merger between or among Restricted
Subsidiaries, and
(iii) a merger, consolidation or other
reorganization through which the Borrower acquires a
business which becomes a Subsidiary of the Borrower,
provided that no Event of Default exists hereunder
after giving effect to such merger, consolidation or
other reorganization.
17. TERMINATION OF EXISTING CREDIT AGREEMENT. Upon the
initial Advance hereunder and the use thereof to pay all
indebtedness of the Borrower to the Bank under the Existing Note,
as set forth in SECTION 7 hereof, the Existing Note shall
immediately be marked "cancelled," and shall be of no further
force and effect, and shall promptly be returned by the Bank to
the Borrower, and the Existing Credit Agreement shall be deemed
terminated and be of no further force and effect.
18. GENERAL.
(a) All notices with respect to this Agreement shall
be deemed to be completed upon mailing first class,
certified or registered mail, postage prepaid, addressed as
follows or to such other address as the parties hereto shall
have been notified:
The Borrower: Ruddick Corporation
2000 Two First Union Center
Charlotte, North Carolina 28282
Attention: Vice President-Finance
The Bank: First Union National Bank of
North Carolina
301 S. Tryon Street
Corporate Banking
Main 2 (Second Floor)
Charlotte, North Carolina 28202
Attn: William W. Tyson
(b) No failure or delay by the Bank to exercise any
right, power or privilege hereunder shall operate as a
waiver of any such right, power or privilege, nor shall any
single or partial exercise of any right, power or privilege
preclude any other or future exercise thereof. The rights
and remedies herein provided are cumulative and not
exclusive of any rights or remedies provided by law.
(c) The provisions of this Agreement shall extend to
and be available to any subsequent holder of the Note, as
well as to the Bank.
(d) The Agreement and the Note shall be deemed to be
contracts made under, and for all purposes shall be
construed in accordance with, the laws of the State of North
Carolina.
[Signatures appear on following page]<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the year and day first above
written.
ATTEST: RUDDICK CORPORATION
\s\ DONALD B. WILLIFORD By:\S\ RICHARD N. BRIGDEN
Secretary Richard N. Brigden
Vice President-Finance
(Corporate Seal)
ATTEST: FIRST UNION NATIONAL BANK
OF NORTH CAROLINA
/s/ MARY MACK By:\S\ WILLIAM W. TYSON
Assistant Secretary Senior Vice President
(Corporate Seal)
<PAGE>
EXHIBIT A
PROMISSORY NOTE
$33,333,333.00 February 15, 1995
Charlotte, North Carolina
FOR VALUE RECEIVED, RUDDICK CORPORATION (the "Borrower")
promises to pay to the order of FIRST UNION NATIONAL BANK OF
NORTH CAROLINA (the "Bank"), at its main office in Charlotte,
North Carolina, the amount of the unpaid principal balance, not
exceeding $33,333,333.00, specified on the reverse hereof in
accordance with Section 2 of the Revolving Credit Agreement dated
of even date herewith among the Borrower and the Bank (as amended
and supplemented and in effect from time to time, the "Credit
Agreement") on the Termination Date or such earlier date as may
be required pursuant to the terms of the Credit Agreement, and to
pay interest at said office, from the date hereof, on the unpaid
principal balance owing hereunder, on the dates and at the rates
provided in the Credit Agreement. Interest on the Note after
default shall be determined based on the Base Rate plus 1%, but
not to exceed the highest rate permitted by applicable law. All
or any portion of the principal amount of such Loans may be
prepaid as provided in the Credit Agreement.
This Note is the Note referred to in the Credit Agreement,
and the terms and conditions set forth in the Credit Agreement
are incorporated herein by reference and shall be considered a
part hereof to the same extent as if written herein. All
capitalized terms used herein and not otherwise defined herein
shall have the meanings set forth in the Credit Agreement.
In addition to the provisions relating to occurrences of
other Events of Default set forth in the Credit Agreement, upon
(i) non-payment when due, whether by acceleration or otherwise,
of the outstanding principal amount hereof or (ii) non-payment,
within ten days after the due date thereof, of interest or of any
premium, fee or other charge under the Credit Agreement, the
entire principal amount and any accrued interest outstanding
under this Note shall, at the option of the holder thereof,
become immediately due and payable, without presentation, demand,
protest or notice of any kind, all of which are hereby expressly
waived by the Borrower, and the Borrower shall pay to the Bank
reasonable attorneys' fees in connection with such default or
recourse against any collateral held by the Bank as security for
the Borrower's indebtedness.
Interest hereunder shall be computed on the basis of a 360-
day year for the actual number of days in the interest period.
This Note shall be governed by, and construed in accordance
with, the law of the State of North Carolina.
All parties to this Note, including endorsers, sureties and
guarantors, if any, hereby waive presentment for payment, demand,
protest, notice of nonpayment or dishonor, and of protest, and
any and all other notices and demands whatsoever, and agree to
remain bound until the interest and principal are paid in full
notwithstanding any extension or extensions of time for payment
which may be granted even though the period of extension may be
indefinite, and notwithstanding any inaction by, or failure to
assert any legal right available to, the holder of this Note.
IN WITNESS WHEREOF, the Borrower has caused this Note to be
executed in its corporate name and its seal affixed hereto by its
duly authorized officers pursuant to a resolution of its Board of
Directors, or appropriate committee thereof, duly adopted, all as
of the date and year first above written.
RUDDICK CORPORATION
ATTEST:
______________________ By: ______________________
___________ Secretary Name: Richard N. Brigden
Title: Vice President - Finance
[SEAL]<PAGE>
EXHIBIT B
Opinion of Smith Helms Mulliss & Moore, L.L.P.
1. Each of the Borrower and American & Efird, Inc., Harris
Teeter, Inc., Jordan Graphics, Inc. and R. S. Dickson & Company
(each, a "Major Subsidiary") is a corporation duly organized,
existing and validly existing under the laws of the State of
North Carolina and has the corporate power to own its properties
and to carry on its business as now being conducted. To the best
of our knowledge after due inquiry, the Borrower is not engaged
in any activity that would require it to qualify to do business
in any jurisdiction other than North Carolina. While we have not
made any inquiry of governmental officials in any jurisdiction
other than North Carolina, we have no reason to believe that any
of the Major Subsidiaries as of the date hereof has failed to
qualify to do business in any foreign jurisdiction where the
failure to so qualify would have a materially adverse effect on
the consolidated financial condition of the Borrower and its
subsidiaries, taken as a whole.
2. The Borrower is duly authorized under all applicable
provisions of law to execute and deliver the Agreement and the
Note and all corporate action on its part required for the lawful
execution, delivery and performance thereof has been duly taken;
and the Note has been duly executed and delivered by the proper
officers of the Borrower and upon receipt by the Borrower of the
loan evidenced thereby will be entitled to the benefits of the
Agreement; and the Agreement and the Note are the legal, valid
and binding obligations of the Borrower, enforceable in
accordance with their terms, subject as to enforcement of
remedies to applicable bankruptcy, reorganization, insolvency,
moratorium, fraudulent conveyance or other similar laws affecting
the rights of creditors now or hereafter in effect, and to
equitable principles that may limit the right to specific
enforcement of remedies, and further subject to the application
of principles of public policy.
3. Neither the execution, creation or issuance of the
Agreement or the Note, nor the fulfillment of or compliance with
their terms, will conflict with, or result in a breach of the
terms, conditions or provisions of, or constitute a violation of
or default under, any applicable law, regulation, or writ or
decree or the Articles of Incorporation or Bylaws of the Borrower
or any of the Major Subsidiaries as of the date hereof, or, to
our knowledge, any agreement or instrument to which the Borrower
or any Major Subsidiary is a party, or, to our knowledge, create
any lien, charge or encumbrance upon any of the property or
assets of the Borrower or any Major Subsidiary pursuant to the
terms of any agreement or instrument to which the Borrower or any
Major Subsidiary is a party or by which they are bound.
4. No authorization, approval or consent of any regulatory
body is necessary or required in connection with the lawful
execution, delivery and performance of the Agreement or the Note
which has not been obtained.
REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT, dated as of this 15th day
of February, 1995, is entered into by and between RUDDICK
CORPORATION, a North Carolina corporation (herein called the
"Borrower"), and NATIONSBANK, NATIONAL ASSOCIATION (CAROLINAS)
(successor in interest to NationsBank of North Carolina, National
Association), a national banking association (the "Bank");
W I T N E S S E T H:
WHEREAS, the Borrower and the Bank currently are parties to
an Amended and Restated Revolving and Term Loan Agreement dated
as of March 31, 1994 (the "Existing Credit Agreement") pursuant
to which the Bank agreed to make available to the Borrower a
revolving credit facility in an aggregate principal amount of up
to $20,000,000 as evidenced by that interim promissory note of
the Borrower dated March 31, 1994 payable to the order of the
Bank in the original principal amount of $20,000,000 (the
"Existing Note"); and
WHEREAS, the Borrower has requested that the Bank make
available to the Borrower a revolving credit facility of up to
$33,333,334.00, a portion of the proceeds of which will be used
to repay all principal outstanding under the Existing Note
together with any accrued and unpaid interest thereon;
NOW, THEREFORE, in consideration of the mutual covenants,
promises and conditions herein set forth, the Borrower and the
Bank hereby agree as follows:
1. DEFINITIONS. The terms defined in this Section (except
as herein otherwise expressly provided or unless the context
otherwise requires) for purposes of this Agreement shall have the
respective meanings specified in this Section. Unless otherwise
specified herein, all accounting terms used herein shall be
interpreted in the manner consistent with their usage in
Generally Accepted Accounting Principles. All determinations of
Consolidated Current Liabilities, Consolidated EBITDA,
Consolidated Fixed Charges, Consolidated Funded Debt,
Consolidated Net Income, Consolidated Tangible Net Worth,
Consolidated Shareholders' Equity and Consolidated Total Assets
shall be made by reference to the consolidated financial
statements of the Borrower and its subsidiaries described in
SECTION 12(a) hereof. All other financial determinations shall be
made by reference to the detailed accounting records of the
Borrower and its subsidiaries, consolidated on the same basis as
in the preparation of the financial statements described in
SECTION 12(a) hereof.
"Advance" means any borrowing hereunder that is a Base
Rate Loan, a CD Rate Loan or a LIBOR Loan, as the case may
be.
"Agreement" means this Revolving Credit Agreement,
including all exhibits and schedules hereto, as the same may
from time to time be modified, amended or supplemented.
"Applicable Margin" means, for the purposes of
calculating (i) the applicable interest rate for the
Interest Period for any LIBOR Loan, (ii) the applicable
interest rate for any CD Rate Loan and (iii) the applicable
rate for the Commitment Fee for purposes of SECTION 5
hereof, the percent per annum set forth below. Such
Applicable Margin shall be (A) determined as of the last day
of each fiscal quarter of the Borrower (the "Determination
Date") based upon the ratio of Consolidated Funded Debt as
at the Determination Date to Consolidated EBITDA for the
four-quarter period then ended (such calculation to be made
based upon the financial statements as of such date and for
the period then ended delivered pursuant to SECTION 12(a)
hereof and applied retroactively to such Determination Date)
and (B) applicable to all LIBOR Loans made, renewed or
converted, all CD Rate Loans outstanding and any Commitment
Fee accruing, as the case may be, on or after the most
recent Determination Date to occur, as specified below:
Ratio of Applicable
Consolidated Funded Margin Applicable
Debt to for CD Margin for
Consolidated Rate Loans and Commitment
EBITDA LIBOR Loans Fee
Greater than or equal to
3.75 to 1.00 .725% .25%
Greater than or equal to
3.00 to 1.00 but
less than 3.75 to 1.00 .600% .225%
Greater than or equal to
2.25 to 1.00 but
less than 3.00 to 1.00 .525% .175%
Greater than or equal to
1.50 to 1.00 but
less than 2.25 to 1.00 .450% .150%
Greater than or equal to
.900 to 1.00 but
less than 1.50 to 1.00 .400% .125%
Less than .900 to 1.00 .375% .125%
"Authorized Officer" means any of the President, Vice
President-Finance and Principal Accounting Officer (for
Securities and Exchange Commission reporting purposes) of
the Borrower.
"Base Rate" means, for any Base Rate Loan, the greater
of (i) the Prime Rate or (ii) the Federal Funds Effective
Rate plus one-half of one percent (.5%), each change in such
Base Rate to be effective as of the effective date of any
change in the Prime Rate or the Federal Funds Effective Rate
giving rise thereto.
"Base Rate Loan" means any Loan for which the rate of
interest is determined by reference to the Base Rate.
"Business Day" means any date which is not a Saturday,
Sunday or a day on which banks in the state of North
Carolina are authorized or obligated by law, executive order
or governmental decree to be closed.
"CD Rate" means the secondary certificate of deposit
rate for a maturity of 90 days as recorded by the New York
Federal Reserve Bank, as adjusted for current bank reserve
requirements and Federal Deposit Insurance Corporation
insurance for certificates of deposit in excess of $100,000,
PLUS the Applicable Margin with respect to CD Rate Loans.
"CD Rate Loan" means a Loan for which the rate of
interest is determined by reference to the CD Rate. Any
change in the interest rate resulting from a change in the
90-day CD Rate shall become effective as of the opening of
business on the date of such change in the interest rate
caused by a change in the 90-day CD Rate.
"Closing Date" means the date on which this Agreement
is executed and delivered by the Borrower and the Bank and
on which the conditions set forth in SECTION 11(a) hereof
have been satisfied.
"Code" means the Internal Revenue Code of 1986, as
amended from time to time, including any rules and
regulations promulgated thereunder.
"Consistent Basis" means in reference to the applica-
tion of Generally Accepted Accounting Principles, that the
accounting principles observed in the current period are
comparable in all material respects to those applied in the
preceding period.
"Consolidated Current Liabilities" means the current
liabilities of the Borrower and its subsidiaries on a
consolidated basis.
"Consolidated EBITDA" means, with respect to the
Borrower and its subsidiaries for any period of computation
thereof, the SUM of, without duplication, (i) Consolidated
Net Income, (ii) consolidated interest expense, (iii) taxes
paid on income, (iv) amortization, and (v) depreciation, all
determined on a consolidated basis in accordance with
Generally Accepted Accounting Principles.
"Consolidated Fixed Charge Ratio" means, with respect
to the Borrower and its subsidiaries for the four
consecutive fiscal quarters immediately preceding the time
of calculation, the sum of (a) (i) Consolidated Net Income,
(ii) Consolidated Fixed Charges and (iii) income taxes,
divided by (b) Consolidated Fixed Charges.
"Consolidated Fixed Charges" means consolidated net
interest expense plus consolidated rent payments under
operating leases for the period of the Borrower and its
subsidiaries.
"Consolidated Funded Debt" means all Indebtedness which
constitutes consolidated long term debt of the Borrower and
its subsidiaries, including (a) any Indebtedness with a
maturity more than one year after the creation of such
Indebtedness and (b) any portion thereof included in
Consolidated Current Liabilities.
"Consolidated Net Income" means the consolidated net
income of the Borrower and its subsidiaries, after provision
for taxes.
"Consolidated Shareholders' Equity" means shareholders'
equity of the Borrower determined on a consolidated basis in
accordance with GAAP.
"Consolidated Tangible Net Worth" means the
Consolidated Shareholders' Equity reduced by the recorded
net balances of copyrights, patents, trademarks, goodwill,
capitalized advertising costs, organization costs, licenses,
franchises, exploration permits and import and export
permits.
"Consolidated Total Assets" means the aggregate amount
of all assets or resources of the Borrower and its
subsidiaries on a consolidated basis.
"Consolidated Total Capitalization" means the total of
Consolidated Funded Debt and Consolidated Shareholders'
Equity of the Borrower and its subsidiaries.
"Default" means any event which with the giving of
notice, lapse of time, or both, would become an Event of
Default.
"Dollars" and the symbol "$" means dollars constituting
legal tender for the payment of public and private debts in
the United States.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time, including any
rules and regulations promulgated thereunder.
"Event of Default" has the meaning given such term in
SECTION 16 hereof.
"Fiscal Year" means the 52/53-week fiscal period of the
Borrower ending on the Sunday closest to September 30 of
each calendar year.
"Fiscal Year End" means the last day of the Borrower's
Fiscal Year.
"Generally Accepted Accounting Principles" or "GAAP"
means those principles of accounting set forth in the
Statements of the Financial Accounting Standards Board or
the American Institute of Certified Public Accountants or
which have other substantial authoritative support and are
applicable in the circumstances as of the date of a report
as such principles are from time to time supplemented and
amended.
"Indebtedness" means all obligations for borrowed money
or the deferred purchase price of property or services,
capitalized lease obligations determined in accordance with
Statement No. 13 of the Financial Accounting Standards Board
as in effect as of the date of this Agreement, and
guarantees of the foregoing, but shall exclude any such
obligations or guarantees of an Unrestricted Subsidiary or
any such obligations or guarantees of or by the Borrower to
an Unrestricted Subsidiary unless such obligations of or by
the Borrower to an Unrestricted Subsidiary are deemed to be
material with regard to financial reporting in accordance
with GAAP.
"Interest Period" for each LIBOR Loan means a period
commencing on the date such LIBOR Loan is made or converted
and each subsequent period commencing on the last day of the
immediately preceding Interest Period for such LIBOR Loan,
and ending, at the Borrower's option, on the date one, two,
three or six months thereafter as notified to the Bank by
the Borrower three (3) LIBOR Business Days prior to the
beginning of such Interest Period; PROVIDED, that,
(i) if the Borrower fails to notify the Bank of
the length of an Interest Period three (3) LIBOR
Business Days prior to the first day of such Interest
Period, the Loan for which such Interest Period was to
be determined shall be deemed to be a CD Rate Loan;
(ii) if an Interest Period for a LIBOR Loan would
end on a day which is not a LIBOR Business Day such
Interest Period shall be extended to the next LIBOR
Business Day (unless such extension would cause the
applicable Interest Period to end in the succeeding
calendar month, in which case such Interest Period
shall end on the next preceding LIBOR Business Day);
(iii) any Interest Period which begins on the
last LIBOR Business Day of a calendar month (or on a
day for which there is no numerically corresponding day
in the calendar month at the end of such Interest
Period) shall end on the last LIBOR Business Day of a
calendar month; and
(iv) no Interest Period shall extend past the
Termination Date.
"LIBOR Base Rate" means for any LIBOR Loan, in respect
of the Interest Period specified by the Borrower for such
LIBOR Loan, the rate (expressed as a percentage and rounded
upward if necessary to the nearest 1/100 of 1%) (which shall
be the same for each day of such Interest Period) determined
by the Bank in good faith in accordance with its usual
procedures for its customers generally to be the average of
the rates per annum for deposits in Dollars offered to major
banks in the London interbank market at approximately 11:00
A.M. London, England time two (2) LIBOR Business Days prior
to the commencement of the applicable Interest Period in an
amount approximately equal to the principal amount of, and
for a period comparable to the Interest Period for, such
LIBOR Loan.
"LIBOR Business Day" means a Business Day on which the
relevant international financial markets are open for the
transaction of the business contemplated by this Agreement
in London, England and Charlotte, North Carolina.
"LIBOR Loan" means a Loan for which the rate of
interest is determined by reference to the LIBOR Rate.
"LIBOR Rate" means, for the Interest Period for any
LIBOR Loan, the rate of interest per annum determined
pursuant to the following formula:
LIBOR = (Libor Base Rate\(1-Reserve Requirement))
Rate + Applicable Margin
"Lien" means as to any Person, any mortgage, lien,
pledge, adverse claim, charge, security interest, or other
encumbrance in or on, or interest or title of any vendor,
lessor, lender or other secured party to or of the Person
under any conditional sale or other title retention
agreement or capital lease with respect to any property or
asset of the Person.
"Loan" or "Loans" means any of the Base Rate Loans, CD
Rate Loans or LIBOR Loans.
"Note" means the revolving credit promissory note
delivered pursuant to SECTION 2(b) hereof.
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA.
"Person" means any individual, joint venture,
corporation, company, voluntary association, partnership,
trust, joint stock company, unincorporated organization,
association, government, or any agency, instrumentality, or
political subdivision thereof, or any other form of entity.
"Plan" means any employee benefit or other plan
established or maintained or to which contributions have
been made by the Borrower or any subsidiary and which is
covered by Title IV of ERISA or to which Section 412 of the
Code applies.
"Prime Rate" means the rate of interest per annum
announced publicly by the Bank as its prime rate from time
to time. The Prime Rate is not necessarily the best or the
lowest rate of interest offered by the Bank.
"Property or Equipment" means any interest in any kind
of property, equipment, or asset, whether real, personal, or
mixed, or tangible or intangible.
"Regulatory Change" means any change in, or the
adoption or making of new, United States Federal or state
laws or regulations (including Regulation D of the Board of
Governors of the Federal Reserve System ("Regulation D") and
capital adequacy regulations) or foreign laws or regulations
or the adoption or making after such date of any
interpretations, directives or requests applying to a class
of banks, which includes the Bank, under any United States
Federal or state or foreign laws or regulations (whether or
not having the force of law) by any court or governmental or
monetary authority charged with the interpretation or
administration thereof or compliance by the Bank with any
request or directive regarding capital adequacy, whether or
not having the force of law, whether or not failure to
comply therewith would be unlawful.
"Reportable Event" has the meaning given such term in
Section 4043(b) of Title IV of ERISA.
"Reserve Requirement" means, for any LIBOR Loan, the
maximum aggregate rate at which reserves (including, without
limitation, any marginal, supplemental or emergency
reserves) are required to be maintained with respect thereto
under Regulation D by the member banks of the Federal
Reserve System with respect to Dollar funding in the London
interbank market. Without limiting the effect of the
foregoing, the Reserve Requirement shall reflect any other
reserves required to be maintained by such member banks by
reason of any Regulatory Change against (i) any category of
liabilities which includes deposits by reference to which
the LIBOR Base Rate is to be determined or (ii) any category
of extensions of credit or other assets which include LIBOR
Loans.
"Restricted Subsidiary" shall mean any Subsidiary that
is not an Unrestricted Subsidiary.
"Revolving Credit Facility" means the facility
described in SECTION 2(a) hereof providing for Loans to the
Borrower by the Bank in an aggregate principal amount equal
to not more than the Committed Amount.
"Subsidiary" means any corporation of which the
Borrower at the time owns, directly or through any
intervening medium, more than 50% of the shares of its
voting stock which has power to elect a majority of the
board of directors.
"Termination Date" means the earliest to occur of
(i) February 15, 2000 or such later date as shall be
determined pursuant to SECTION 9 hereof, or (ii) the date of
termination of Bank's obligations pursuant to SECTION 16
upon the occurrence of an Event of Default, or (iii) such
date as the Borrower may voluntarily and permanently
terminate the Revolving Credit Facility by payment in full
of all amounts outstanding hereunder.
"Unrestricted Subsidiary" shall mean any subsidiary
created or acquired by the Borrower or its Restricted
Subsidiaries which is incorporated outside the United States
or substantially all of the business of which is carried on
outside the United States.
2. THE LOAN.
(a) COMMITMENT TO LEND. Subject to the terms and
conditions of this Agreement, the Bank agrees to make Loans
to the Borrower, at any time and from time to time before
February 15, 2000, in an aggregate principal amount not in
excess at any time of $33,333,334 (the "Committed Amount",
which Committed Amount is a portion of aggregate financing
commitments of $100,000,000 ("Total Commitments") from the
Bank, First Union National Bank of North Carolina and
Wachovia Bank of North Carolina, N.A. (collectively, the
"Banks")). Prior to the Termination Date, the Borrower may
use the Committed Amount by borrowing, paying and
reborrowing such amount, all in accordance with the terms
and conditions of this Agreement.
Borrower agrees to borrow, pay and reborrow in amounts
from the Banks on a pro rata basis as determined by each
Bank's Committed Amount in relation to Total Commitments.
Each borrowing shall be in an aggregate amount of not less
than $300,000 or an integral multiple thereof, to be shared
by the Banks pro rata.
(b) THE NOTE. On or before the date of the first
borrowing hereunder, Borrower shall execute and deliver to
the Bank a revolving credit promissory note in the principal
amount of $33,333,334, dated as of the date of this
Agreement and payable in full on the Termination Date (as
the same may be extended pursuant to SECTION 9 hereof) in
form and substance substantially similar to the attached
EXHIBIT A. The Bank or subsequent holder is hereby
authorized by the Borrower and agrees to set forth on the
reverse side of the Note issued to the Bank the amount of
each borrowing made thereunder and repayment thereof made by
the Borrower.
(c) ADVANCES AND RATE SELECTION. The Borrower shall
give the Bank (A) telephonic notice of each LIBOR Loan,
whether representing an additional Advance hereunder or the
conversion of borrowings hereunder from Base Rate Loans or
CD Rate Loans to LIBOR Loans or the election of a subsequent
Interest Period for any LIBOR Loan, prior to 2:00 P.M.
Charlotte, North Carolina time at least three LIBOR Business
Days prior to the day such Advance is to be made or such
Loan is to be converted or continued; and (B) telephonic
notice of each Base Rate Loan or CD Rate Loan representing
an additional Advance hereunder or the conversion of
borrowings hereunder from LIBOR Loans to Base Rate Loans or
CD Rate Loans prior to 2:00 P.M. Charlotte, North Carolina
time on the day such Advance is to be made or such Loan is
to be converted. Each such notice, which shall be effective
upon receipt by the Bank, shall specify the amount of the
Advance, the type of Loan (Base Rate, CD Rate or LIBOR), the
date of the Advance and, if a LIBOR Loan, the Interest
Period to be used in the computation of interest. In the
case of a LIBOR Loan, the Borrower shall provide the Bank
written confirmation of telephonic notice of such LIBOR Loan
on the same day by telefacsimile transmission setting forth
the information described above, but failure to provide such
confirmation shall not affect the validity of such
telephonic notice. The Borrower shall have the option to
elect the duration of subsequent Interest Periods and to
convert the Loans in accordance with SECTION 8 hereof. If
the Bank does not receive a notice of election of duration
of an Interest Period or to convert by the time prescribed
hereby and by SECTION 8 hereof, the Borrower shall be deemed
to have elected to convert to or continue such Loan as a CD
Rate Loan until the Borrower otherwise notifies the Bank in
accordance herewith and with SECTION 8.
(d) REPAYMENTS. Each repayment shall be in an
aggregate amount of not less than $300,000 or an integral
multiple thereof, each such repayment to be shared on a pro
rata basis by the Banks as determined by each Bank's
Committed Amount in relation to Total Commitments with
respect to each and every such repayment.
3. PAYMENT OF INTEREST. The Borrower shall pay interest
to the Bank on the outstanding and unpaid principal amount of
each Loan, for the period commencing on the date of such Loan
until such Loan shall be due, at the LIBOR Rate, CD Rate or the
Base Rate, as elected or deemed elected by the Borrower or
otherwise applicable to such Loan as herein provided. Interest
on the outstanding principal balance of each Loan shall be
computed on the basis of a year of 360 days and calculated for
the actual number of days elapsed. Interest on each Loan shall
be paid (i) quarterly in arrears on the last Business Day of each
March, June, September and December commencing March 1995, on
each Base Rate Loan and on each CD Rate Loan, (ii) on the last
day of the applicable Interest Period for each LIBOR Loan and,
for any LIBOR Loan having an Interest Period extending beyond
three months, also on the date occurring three months after the
commencement of such Interest Period, and (iii) upon payment in
full of the principal amount of such Loan.
Interest on the Note after default shall be determined based
on the Base Rate plus 1%, but not to exceed the highest rate
permitted by applicable law.
4. PAYMENT OF PRINCIPAL. The principal amount of all
Loans shall be due and payable to the Bank in full on the
Termination Date (as the same may be extended pursuant to SECTION
9 hereof) or earlier as herein expressly provided. Except as
hereinafter provided, the principal amount of the Loans may be
prepaid in whole or in part at any time without premium or
penalty.
The Borrower shall promptly pay to the Bank, upon request,
such amount or amounts as shall be sufficient (in the reasonable
determination of the Bank) to compensate it for any loss, cost or
expense incurred by it as a result of any of the following (each
a "Breakage Event"):
(a) any payment, prepayment or conversion of a LIBOR
Loan on a date other than the last day of the Interest
Period for such LIBOR Loan; or
(b) any failure by the Borrower to borrow a LIBOR Loan
or convert a Base Rate Loan or a CD Rate Loan into a LIBOR
Loan on the date for such borrowing or conversion specified
in the relevant notice under SECTION 8 hereof;
such compensation to include, without limitation, an amount equal
to the excess, if any, of the amount of interest which would have
accrued on the principal amount of such LIBOR Loan for the period
from the date of such Breakage Event to the last day of the then
current Interest Period for such LIBOR Loan at (i) the LIBOR Base
Rate on the first day of such Interest Period over (ii) the LIBOR
Base Rate as reasonably determined by the Bank as of the date of
such Breakage Event for Dollar deposits of amounts comparable to
such principal amount and maturities comparable to such period.
A good faith determination of the Bank as to the amounts payable
pursuant to this SECTION 4 shall be conclusive absent manifest
error. The Bank shall furnish to the Borrower calculations in
reasonable detail setting forth the Bank's determination of the
amount of such compensation.
5. COMMITMENT FEE. Until the Borrower's option to borrow
hereunder has been fully exercised, the Borrower will pay to the
Bank a commitment fee (the "Commitment Fee") equal in amount to
the product of the Applicable Margin with respect to the
Commitment Fee multiplied by the average daily amount by which
the Bank's Committed Amount exceeds the average daily principal
amount outstanding under the Note for the applicable period,
payable in arrears from the date hereof on the interest due dates
set out in SECTION 3(i) hereof.
6. TERMINATION OR REDUCTION OF COMMITTED AMOUNT. So long
as the Note is outstanding, Borrower shall have the right from
time to time upon not less than three days' prior written notice
to the Banks to terminate, or to reduce, the Total Commitments
and the Bank's Committed Amount on a pro rata basis. Any partial
reduction shall be in an amount equal to 5% of Total Commitments
or any integral multiple thereof and shall reduce permanently the
Bank's Committed Amount as a pro rata share of Total Commitments.
Each reduction shall be accompanied by a prepayment of the Note
(together with accrued interest thereon) to the extent that the
principal amount thereof then outstanding exceeds the Committed
Amount as so reduced.
7. USE OF PROCEEDS. The proceeds of the Loans made
hereunder shall be used by the Borrower first to repay all
amounts outstanding under the Existing Note, with the excess to
be used for general corporate purposes.
8. CONVERSIONS AND ELECTIONS OF INTEREST PERIODS. The
duration of the initial Interest Period for each LIBOR Loan shall
be as specified by the Borrower. Provided that no Event of
Default shall have occurred and be continuing and subject to the
limitations set forth below, the Borrower may on not less than
three LIBOR Business Days' notice to the Bank on or before 2:00
P.M. Charlotte, North Carolina time:
(a) elect a subsequent Interest Period for all or a
portion of the outstanding LIBOR Loans to begin on the last
day of the Interest Period for such LIBOR Loans;
(b) convert all or a portion of the outstanding LIBOR
Loans to Base Rate Loans or CD Rate Loans on the last day of
the Interest Period for such LIBOR Loans; and
(c) convert all or a portion of the outstanding Base
Rate Loans and CD Rate Loans to LIBOR Loans on any date.
Notice of any such elections or conversions shall specify
the effective date of such election or conversion and the
Interest Period to be applicable to the LIBOR Loan as continued
or converted. Each election and conversion pursuant to this
SECTION 8 shall be subject to the limitations on LIBOR Loans set
forth in the definition of "Interest Period" herein. If the Bank
does not receive a notice of election of duration of an Interest
Period or to convert an outstanding LIBOR Loan by the time
prescribed above, the Borrower shall be deemed to have elected to
convert such LIBOR Loan to a CD Rate Loan on the last day of the
Interest Period for such LIBOR Loan.
9. EXTENSION OF TERMINATION DATE. The Borrower shall have
the option to extend the Termination Date for an additional 365-
day period upon each anniversary of the Closing Date such that
the Revolving Credit Facility, as so extended, will continuously
have a five year term. The Termination Date shall be deemed
automatically extended, and the provisions of this Agreement and
the Note shall continue to be in full force and effect for such
extended five year period, UNLESS: (i) the Borrower shall give
written notice to the Bank, not less than 15 days prior to the
anniversary date of the Closing Date, of its intention not to so
extend the Termination Date; or (ii) the Bank shall give written
notice to the Borrower, not less than 15 days prior to the
anniversary date of the Closing Date, of its intention not to so
extend the Termination Date.
10. REPRESENTATIONS AND WARRANTIES. In borrowing
hereunder, the Borrower represents and warrants to the Bank,
which representations and warranties will survive the delivery of
the Note and the making of the Loans hereunder, as follows:
(a) DUE INCORPORATION, ETC. The Borrower and each
Restricted Subsidiary is a corporation duly organized,
validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated, and has the
corporate power and legal authority to own its property and
to carry on its business as now being conducted and is duly
qualified to transact business as a foreign corporation in
every jurisdiction where such qualification is necessary.
The Borrower has the corporate power to execute and perform
this Agreement, to borrow hereunder and to execute and
deliver the Note, and to do so will not violate its Articles
of Incorporation or Bylaws, any law to which it is subject,
or any agreement or instrument to which it is a party.
(b) LITIGATION. Except as set forth in the financial
statements described in SECTION 10(c) hereof, there is no
litigation or proceeding pending or, to the knowledge of the
Borrower, threatened which, if decided adversely to the
Borrower or any subsidiary, would have a material adverse
effect upon the financial condition or business of the
Borrower and its subsidiaries, taken as a whole.
(c) FINANCIAL CONDITION. The Consolidated Balance
Sheet of the Borrower and its subsidiaries as at October 2,
1994 and the related Statements of Consolidated Income and
Retained Earnings and Statements of Cash Flows of the
Borrower and its subsidiaries for the fiscal year then
ended, all of which have been delivered to the Bank prior to
the execution of this Agreement, are correct and complete
and fairly present the financial condition of the Borrower
and its subsidiaries and the results of their operations and
their retained earnings as of the dates and for the periods
referred to. The consolidated balance sheets of the
Borrower and its subsidiaries as at January 1, 1995 and the
related statements of consolidated income and retained
earnings and statements of consolidated cash flows for the
three-month period then ended, copies of which have been
furnished to the Bank, are true and correct and present
fairly, subject to normal recurring year-end adjustments,
the financial condition of the Borrower and its subsidiaries
as at such date and the results of their operations and
their retained earnings as of such date and for such period.
All financial statements have been prepared in accordance
with Generally Accepted Accounting Principles applied on a
Consistent Basis throughout the periods involved. Since
January 1, 1995, no material adverse changes in the
financial condition, the business or operations of the
Borrower and its subsidiaries, taken as a whole, have
occurred.
The real estate and other fixed assets of the Borrower
and its subsidiaries are subject to no mortgage or lien
securing an indebtedness of a material principal amount
except as shown in the balance sheets referred to above.
The Borrower and its subsidiaries have no liabilities,
direct or contingent, except those disclosed in the
financial statements referred to above, and except those
arising in the ordinary course of business since the dates
of such financial statements, having in the aggregate no
materially adverse effect on the financial condition of the
Borrower and its subsidiaries, taken as a whole. The
Borrower and its subsidiaries have made no investments in,
advances to or guaranties of the obligations of any
corporation, individual or other entity other than Borrower
in an aggregate amount material to the consolidated
financial condition of the Borrower and its subsidiaries,
taken as a whole, except those disclosed in the financial
statements referred to above.
(d) GOVERNMENTAL CONTRACTS. The Borrower and its
subsidiaries are not subject to the renegotiation of any
government contract in any material amount.
(e) TAX RETURNS. The Borrower and its subsidiaries
have filed all required federal, state, and local tax
returns and have paid all taxes as shown on such returns as
they have become due. Federal income tax returns have been
audited, or closed by the operation of applicable statutes
of limitation, through 1990, and no claims have been
assessed and are unpaid with respect to such taxes except as
shown in the financial statements referred to in SECTION
10(c) above.
11. CONDITIONS TO CLOSING.
(a) CONDITIONS PRECEDENT. The obligation of the Bank
to lend hereunder is subject to the following conditions
precedent:
(i) LEGAL OPINION. On or before the
date hereof, the Bank shall have received the favorable
written opinion of Smith Helms Mulliss & Moore, L.L.P.,
counsel for the Borrower, addressed to the Bank, and
satisfactory in form and substance to the Bank,
substantially in the form of EXHIBIT B attached hereto.
(ii) CORPORATE RESOLUTIONS. The Bank shall have
received, on or before the date of the first borrowing
hereunder, (A) a copy of the resolutions of the Board
of Directors, or appropriate committee thereof, of the
Borrower, certified on such date, authorizing the
execution and delivery of this Agreement, the borrowing
hereunder and the execution and delivery of the Note;
and (B) such additional documents as the Bank or
counsel for the Bank may reasonably request.
(iii) REPRESENTATIONS AND WARRANTIES. On the
date of any Advance hereunder, the representations and
warranties set forth in SECTION 10 hereof shall be true
and correct on and as of such date with the same effect
as though such representations and warranties had been
made on and as of such date.
(iv) DUE COMPLIANCE. At the time of each Advance
hereunder, the Borrower and each subsidiary shall be in
compliance with all of the terms and provisions set
forth herein on their part to be observed and
performed, and no Event of Default as specified in
SECTION 16 below, nor any event which upon notice or
lapse of time, or both, would constitute such an Event
of Default, shall have occurred at the time of such
borrowing.
(v) PAYMENT OF FACILITY FEE. On or before the
date hereof, the Bank shall have received payment of
all fees due and payable in connection with the
Revolving Credit Facility established hereby.
(b) COVENANT AND CONDITION SUBSEQUENT. The Borrower
shall deliver to the Bank, not more than 90 days after the
date of the first borrowing hereunder, such additional
documents as the Bank or counsel for the Bank may reasonably
request.
12. AFFIRMATIVE COVENANTS. The Borrower covenants and
agrees that from the date hereof and until payment in full of the
principal and interest on the Note, unless the Bank shall
otherwise consent in writing, the Borrower will:
(a)FINANCIAL REPORTS AND OTHER DATA.
(i) As soon as practicable and in any event
within 45 days after the end of each of the first three
quarterly periods of each Fiscal Year of the Borrower,
deliver to the Bank (A) a consolidated balance sheet of
the Borrower and its subsidiaries as at the end of such
quarterly period, and related consolidated statements
of income and retained earnings for such quarterly
period and for the period from the beginning of the
current Fiscal Year to the end of such quarterly
period, setting forth in comparative form figures for
the corresponding periods in the preceding Fiscal Year,
all to be in reasonable detail and certified by an
Authorized Officer to have been prepared in accordance
with Generally Accepted Accounting Principles applied
on a Consistent Basis, subject only to changes result-
ing from normal, recurring year-end adjustments; and
(B) computations demonstrating compliance with the
provisions of SECTIONS 12(l), 12(m) and 13(a) hereof,
certified by an Authorized Officer to be true and
correct and to have been prepared from the foregoing
quarterly statements, provided however that in making
the quarterly (but not the annual) computation of
Consolidated Tangible Net Worth as described in SECTION
12(m), the Borrower may omit adjustments for
amortization of intangible items unless such
adjustments are requested by the Bank;
(ii) As soon as practicable and in any event
within 90 days after each Fiscal Year End, deliver to
the Bank (A) a consolidated balance sheet of the
Borrower and its subsidiaries as at such Fiscal Year
End, and related consolidated statements of income and
retained earnings and changes in consolidated financial
position for such Fiscal Year, setting forth in each
case in comparative form corresponding figures from the
preceding annual statements, all in reasonable detail
and satisfactory in scope to the Bank, and audited by
and containing (as to the consolidated financial
statements) an unqualified opinion of independent
certified public accountants of national standing as
shall be satisfactory to the Bank and (B) the
computations required by SECTION 12(a)(i)(B) hereof;
(iii) Deliver to the Bank a copy of each report
filed by the Borrower with the Securities and Exchange
Commission pursuant to SECTION 13(a) or 14 of the
Securities Exchange Act of 1934, including each Annual
Report on Form 10-K, Quarterly Report on Form 10-Q,
Current Report on Form 8-K, and definitive proxy
statement, in each case within 15 days of the filing
thereof; and
(iv) With reasonable promptness, deliver such
additional financial or other data as the Bank may
reasonably request. The Bank is hereby authorized to
deliver a copy of any financial statements or other
information relating to the business operations or
financial condition of the Borrower and its
subsidiaries which may be furnished to it or come to
its attention pursuant to this Agreement or otherwise,
to any regulatory body or agency having jurisdiction
over the Bank.
(b) TAXES AND LIENS. Promptly pay, or cause to be
paid, all taxes, assessments or other governmental charges
which may lawfully be levied or assessed upon the income or
profits of the Borrower, or any subsidiary, or upon any
property, real, personal or mixed, belonging to the Borrower
or any subsidiary, or upon any part thereof, and also any
lawful claims for labor, material and supplies which, if
unpaid, might become a lien or charge against any such
property; provided, however, neither the Borrower nor any
subsidiary shall be required to pay any such tax,
assessment, charge, levy or claim so long as the validity
thereof shall be actively contested in good faith by proper
proceedings and provided the Borrower shall, if requested by
the Bank, set up reserves therefor consistent with Financial
Accounting Standards Board Statement No. 5 and Accounting
Principles Board Statement No. 11 (such reserves not
required to be separately funded); but provided further that
any such tax, assessment, charge, levy or claim shall be
paid forthwith upon the commencement of proceedings to
foreclose any lien securing the same unless such proceeding
has been properly stayed.
(c) BUSINESS AND EXISTENCE. Do or cause to be done
all things necessary to preserve and to keep in full force
and effect its corporate existence, rights and franchises,
trade names, patents, trademarks and permits.
(d) INSURANCE ON PROPERTIES. Keep its business and
properties insured at all times with responsible insurance
companies and carry such types and amounts of insurance as
are usually carried by corporations engaged in the same or a
similar business similarly situated.
(e) MAINTAIN PROPERTY. Maintain its properties in
good order and repair and, from time to time, make all
needful and proper repairs, renewals, replacements,
additions and improvements thereto.
(f) RIGHT OF INSPECTION. Permit the Bank, at its
expense, to visit and inspect any of the properties,
corporate books and financial reports of the Borrower and
its subsidiaries in the presence of a corporate officer of
the Borrower or persons designated by them and to discuss
their affairs, finances and accounts with the principal
officers of the Borrower and their independent public
accountants, all at such reasonable times and as often as
the Bank may reasonably request.
(g) OBSERVE ALL LAWS. Conform to and duly observe all
laws, regulations and other valid requirements of any
regulatory authority with respect to the conduct of its
business, violation of which would materially adversely
affect the operations or business of the Borrower or any of
its subsidiaries.
(h) COVENANTS EXTENDED TO RESTRICTED SUBSIDIARIES.
Cause each Restricted Subsidiary to do with respect to
itself, its business and its assets, each of the things
required of the Borrower in SECTIONS 12(b) through 12(g)
hereof.
(i)BORROWER'S KNOWLEDGE OF DEFAULT. Immediately give
notice to the Bank of the occurrence of any Default or Event
of Default hereunder or under any other obligation
representing Indebtedness of the Borrower or any Restricted
Subsidiary, of which the Borrower or such subsidiary has
knowledge, specifying the nature thereof, the period of
existence thereof and what action the Borrower proposes to
take with respect thereto.
(j) JUDGMENTS, ETC. Immediately give the Bank written
notice of any judgment, attachment, levy, or execution
against the Borrower or any assets of the Borrower or any
subsidiary which involves (i) an amount of $250,000 or more
in excess of the amount covered by insurance, or (ii) an
amount in excess of $1,000,000, and establish or cause to be
established appropriate and adequate reserves to cover any
such claim, levy, attachment, or execution in any amount
satisfactory to its independent certified public
accountants.
(k) ERISA. Comply with all requirements of ERISA
applicable to it and its Restricted Subsidiaries and furnish
to the Bank as soon as possible and in any event within 30
days after the Borrower or its Restricted Subsidiaries or
duly appointed administrator of a Plan knows or has reason
to know that any Reportable Event with respect to any Plan
has occurred, a statement of an Authorized Officer setting
forth details as to such Reportable Event and any action
which the Borrower or its Restricted Subsidiaries proposes
to take with respect thereto, together with a copy of the
notice of such Reportable Event given to the PBGC or a
statement that said notice will be filed with the annual
report to the United States Department of Labor with respect
to such Plan if such filing has been authorized.
(l) CONSOLIDATED FIXED CHARGE RATIO. Maintain at the
end of each of the Borrower's fiscal quarters, a
Consolidated Fixed Charge Ratio of at least 1.50 to 1.00.
For purposes of this SECTIONI 12(l), the term "Consolidated
Fixed Charge Ratio" means for the four consecutive fiscal
quarters immediately preceding the time of any such
calculation (a) the sum of (i) Consolidated Net Income, (ii)
Consolidated Fixed Charges and (iii) income taxes, divided
by (b) Consolidated Fixed Charges.
(m) CONSOLIDATED TANGIBLE NET WORTH. Maintain
Consolidated Tangible Net Worth of not less than the
Required Amount computed in accordance with the remainder of
this paragraph. The Required Amount shall be $238,589,000
during Fiscal Year 1995. As of the last day of each Fiscal
Year, beginning with Fiscal Year 1995, the Required Amount,
including any prior increases, shall be increased by 40% of
the Consolidated Net Income for such Fiscal Year. In the
event Consolidated Net Income is a negative amount for any
Fiscal Year, the Required Amount shall not be adjusted as of
the end of such Fiscal Year, and the amount of any such
negative amount shall be carried forward and offset against
Consolidated Net Income for the next Fiscal Year for which
Consolidated Net Income is positive until such negative
amount is fully used.
13. NEGATIVE COVENANTS. The Borrower covenants and agrees
that from the date hereof until payment in full of the principal
and interest on the Note, unless the Bank shall otherwise consent
in writing, it will not, nor will it permit any Restricted
Subsidiary to, either directly or indirectly:
(a) CONSOLIDATED FUNDED DEBT. Incur, create, assume or
guarantee, or otherwise become or be liable in respect of
any Indebtedness which would be included in Consolidated
Funded Debt except:
(i) the Note;
(ii) the respective revolving credit promissory
notes of the Borrower payable to First Union National
Bank of North Carolina and Wachovia Bank of North
Carolina, N.A., respectively, each in the principal
amount of $33,333,333.00 and dated as of the date
hereof;
(iii) Indebtedness existing as of the date
hereof; and
(iv) Additional Indebtedness which in the
aggregate when added to the Indebtedness evidenced by
the Note or existing as of the date hereof, does not
exceed 60% of Consolidated Total Capitalization.
(b) RESTRICTED SUBSIDIARY INDEBTEDNESS. Incur,
create, assume or guarantee or otherwise become liable in
respect of any Indebtedness of a Restricted Subsidiary
except:
(i) borrowings among the Borrower and the
Restricted Subsidiaries;
(ii) extensions, renewals, or replacements of
Indebtedness existing as of the date hereof (without
increasing the principal amount thereof);
(iii) Indebtedness directly related to the
acquisition or construction of Property or Equipment,
but only to the extent of the purchase price or cost
thereof, or any Indebtedness assumed by imposition of
law in connection with the acquisition of an existing
business; or
(iv) Other Indebtedness in an amount not exceeding
15% of Consolidated Tangible Net Worth.
(c) LIMITATIONS ON LIENS. Incur, create, assume or
permit to exist any Lien of any kind upon any of its
property now owned or hereafter acquired or assets of any
character in an amount in excess of 15% of Consolidated
Tangible Net Worth, unless the Note is equally and ratably
secured with the Indebtedness secured by such Lien except
that the following Liens shall not be included in making a
determination of the amount of Liens:
(i) Liens for taxes or assessments or other
governmental charges or levies, either not yet due and
payable or being contested in good faith or to the
extent that nonpayment thereof shall be permitted;
(ii) Liens created by or resulting from any
litigation or legal proceeding which is currently being
contested in good faith by appropriate proceedings;
(iii) Other Liens incidental to the normal
conduct of the business of the Borrower or any
Restricted Subsidiary or the ownership of its property
which are not incurred in connection with the
incurrence of Indebtedness and which do not in the
aggregate materially impair the use of such property in
the operation of the business of the Borrower, and the
Borrower and its Restricted Subsidiaries taken as a
whole or the value of such property for the purposes of
such business;
(iv) Liens existing at the time of the issuance of
the Note;
(v) the extension, renewal or replacement of any
Lien permitted by the foregoing subparagraph (iv) in
respect of the same property theretofore subject
thereto or the extension, renewal or replacement
thereof (without increase of principal amount of the
Indebtedness secured);
(vi) Liens granted by the Restricted Subsidiaries
in favor of the Borrower; and
(vii) (A) any Lien on Property or Equipment
granted with respect to such Property or Equipment in
connection with the provision of all or a part of the
purchase price or cost of the construction of such
Property or Equipment (but not in excess of the amount
of such purchase price or cost) created
contemporaneously with, or within 120 days after, such
acquisition or the completion of such construction, or
(B) any Lien on Property or Equipment existing in such
Property or Equipment at the time of acquisition
thereof, whether or not the debt secured thereby is
assumed by the Borrower or such Restricted Subsidiary,
or (C) any Lien existing on the Property or Equipment
of a corporation at the time such corporation is merged
into or consolidated with the Borrower or a Restricted
Subsidiary, or at the time of a sale, lease or other
disposition of the Properties or Equipment of a
corporation or firm as an entirety or substantially as
an entirety to the Borrower or a Restricted Subsidiary;
provided however that the amount of any Lien permitted
under this subparagraph (vii) shall not exceed the fair
market value of the Property or Equipment covered by
such Lien.
(d) CONSOLIDATION, MERGER OR REORGANIZATION. Enter
into any transaction of merger or consolidation except that
(i) a Restricted Subsidiary may merge into the Borrower or
another Restricted Subsidiary, and (ii) the Borrower may
merge or consolidate with any corporation organized under
the laws of any state in the United States so long as (A)
the resulting or surviving entity expressly assumes the
obligations of the Borrower under this Agreement and the
Note and (B) no Event of Default exists hereunder after
giving effect to such merger.
(e) SALE OF ASSETS, DISSOLUTION, ETC. Sell, assign,
lease or otherwise dispose of all or substantially all of
its properties or assets (other than inventory), or any of
its notes, accounts or contract rights, or any assets or
properties necessary or desirable for the proper conduct of
its business, or wind up, liquidate or dissolve, or agree to
any of the foregoing, or permit any Restricted Subsidiary to
do so, except, as to any such transaction, to the extent the
total assets involved do not exceed either
(i) together with any other assets involved in
such transactions during the same Fiscal Year, 10% of
Consolidated Total Assets determined as of the end of
the last fiscal quarter prior to such transaction,
or,
(ii) together with any other assets involved in
such transactions since the date of this Agreement on a
cumulative basis, 25% of Consolidated Total Assets
determined as of the end of the last fiscal quarter
prior to such transaction.
Notwithstanding the foregoing, (x) any Restricted Subsidiary
may sell, lease, transfer, or otherwise dispose of its
assets to the Borrower or any other Restricted Subsidiary
and such assets shall not be included in the foregoing
calculations, and (y) upon the Borrower's giving notice to
the Bank of the intention of the Borrower or any Restricted
Subsidiary to sell, lease, transfer or otherwise dispose of
assets, for value, in an amount up to 25% of Consolidated
Total Assets as of the last fiscal quarter end prior to such
notice, and to reinvest the proceeds within one year
following such transaction, the Borrower or any Restricted
Subsidiary may effect such transactions and the assets
involved shall not be included in any calculation under (i)
or (ii) above, unless (A) the Bank fails to consent to the
proposed transactions within 10 days following the giving of
said notice, provided that such consent may not be
unreasonably withheld, or (B) proceeds are not reinvested
within the one year period, in which case the assets
involved in the transaction shall be deemed transferred as
of the expiration of such one year period and included the
calculations set forth in (i) and (ii) above. Any breach of
the covenant expressed in this SECTION 13(e) may be cured by
the prepayment, without penalty, of an amount of the
outstanding amount of the Note as bears the same proportion
to the total outstanding amount of such Note as the net book
value of the assets conveyed in violation of this section
shall be to the Consolidated Total Assets of the Borrower as
of the last fiscal quarter end prior to such transaction.
(f) FISCAL YEAR. Change its Fiscal Year End.
14. OPINIONS AND NOTICE OF OTHER DEFAULT. The Borrower
shall furnish at the reasonable request of the Bank opinions of
legal counsel and certificates of its officers, satisfactory to
the Bank, regarding matters incident to this Agreement. In
addition, the Borrower shall give the Bank prompt written notice
of the occurrence of any Event of Default under the terms of this
Agreement and of a default or failure of performance under any
other material agreement or contract to which it is a party or by
which it is bound.
15. DOCUMENTARY STAMPS. If any documentary or recording
tax should be assessed or the affixing of any stamps be required
in connection with the borrowing hereunder or the security
therefor, by state or federal governments, the Borrower will pay
the tax and the cost of the stamps.
16. DEFAULT. The occurrence of any one or more of the
following Events of Default will constitute a default by the
Borrower under this Agreement, whereupon the Note and all
indebtedness of the Borrower to the Bank will, at the option of
the Bank, immediately become due and payable without
presentation, demand, protest, or notice of any kind, all of
which are hereby expressly waived, and the Borrower will pay the
reasonable attorney's fees incurred by the Bank in connection
with such default or recourse against any collateral held by the
Bank as security for the indebtedness owed by the Borrower:
(a) Non-payment when due, whether by acceleration or
otherwise, of any principal payment on the Note;
(b) Non-payment, within ten days after the due date,
of interest on the Note, or of any premium, fee or other
charge under this Agreement;
(c) A breach or failure of performance by the Borrower
or any subsidiary of any provision of this Agreement which
is not remedied within 30 days after written notice from the
Bank;
(d) A representation or warranty by the Borrower is
false or erroneous in any material respect on the date as of
which made;
(e) Borrower or a Restricted Subsidiary: (i) files a
petition or has a petition filed against it under the
Bankruptcy Code or any proceeding for the relief of
insolvent debtors; (ii) generally fails to pay its debts as
such debts become due; (iii) has a custodian appointed for
it or its assets; (iv) benefits from or is subject to the
entry of an order for relief by any court of insolvency; (v)
makes an admission of insolvency seeking the relief provided
in the Bankruptcy Code or any other insolvency law; (vi)
makes an assignment for the benefit of creditors; (vii) has
a receiver appointed, voluntarily or otherwise, for its
property; (viii) suspends business; (ix) permits a judgment
in the amount of $250,000 or more to be obtained against it
which is not subject to payment by applicable insurance
coverage or is not promptly paid or promptly appealed and
secured pending appeal; or (x) becomes insolvent, however
otherwise evidenced;
(f) Failure by Borrower or a Restricted Subsidiary to
pay when due, or within any applicable grace period, any
amount owing on account of indebtedness for money borrowed
or the failure by Borrower or a Restricted Subsidiary to
observe or perform any covenant or undertaking on its part
to be observed or performed in any agreement evidencing,
securing or relating to such indebtedness, resulting in any
such case in an event of default or acceleration by the
holder of such indebtedness of the date on which such
indebtedness would otherwise be due and payable; or
(g) If the Borrower or a Restricted Subsidiary shall
become a party to merger, consolidation or other
reorganization with any other Person (including a de facto
merger by which all or substantially all of the property or
assets of another Person are acquired) which results in a
change of control of the Borrower except:
(i) a merger with a Restricted Subsidiary or
other domestic Subsidiary in which the Borrower is the
surviving or continuing corporation,
(ii) a merger between or among Restricted
Subsidiaries, and
(iii) a merger, consolidation or other
reorganization through which the Borrower acquires a
business which becomes a Subsidiary of the Borrower,
provided that no Event of Default exists hereunder
after giving effect to such merger, consolidation or
other reorganization.
17. TERMINATION OF EXISTING CREDIT AGREEMENT. Upon the
initial Advance hereunder and the use thereof to pay all
indebtedness of the Borrower to the Bank under the Existing Note,
as set forth in SECTION 7 hereof, the Existing Note shall
immediately be marked "cancelled," and shall be of no further
force and effect, and shall promptly be returned by the Bank to
the Borrower, and the Existing Credit Agreement shall be deemed
terminated and be of no further force and effect.
18. GENERAL.
(a) All notices with respect to this Agreement
shall be deemed to be completed upon mailing first class,
certified or registered mail, postage prepaid, addressed as
follows or to such other address as the parties hereto shall
have been notified:
The Borrower: Ruddick Corporation
2000 Two First Union Center
Charlotte, North Carolina 28282
Attention: Vice President-Finance
The Bank: NationsBank, National Association
(Carolinas)
NationsBank Corporate Center
100 North Tryon Street
NC1-007-08-08
Charlotte, North Carolina 28255-
0065
Attention: Mark D. Halmrast
(b) No failure or delay by the Bank to exercise any
right, power or privilege hereunder shall operate as a
waiver of any such right, power or privilege, nor shall any
single or partial exercise of any right, power or privilege
preclude any other or future exercise thereof. The rights
and remedies herein provided are cumulative and not
exclusive of any rights or remedies provided by law.
(c) The provisions of this Agreement shall extend to
and be available to any subsequent holder of the Note, as
well as to the Bank.
(d) The Agreement and the Note shall be deemed to be
contracts made under, and for all purposes shall be
construed in accordance with, the laws of the State of North
Carolina.
[Signatures appear on following page]<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the year and day first above
written.
ATTEST: RUDDICK CORPORATION
\s\ DONALD B. WILLIFORD BY: \S\ RICHARD N. BRIDGEN
Secretary Richard N. Brigden
Vice President-Finance
(Corporate Seal)
ATTEST: NATIONSBANK, NATIONAL ASSOCIATION
(CAROLINAS)
\s\ JACQUELINE MACRORIE BY: \S\ MARK D. HALMRAST
Secretary Assistant Vice President
(Corporate Seal)
<PAGE>
EXHIBIT A
PROMISSORY NOTE
$33,333,334.00 February 15, 1995
Charlotte, North Carolina
FOR VALUE RECEIVED, RUDDICK CORPORATION (the "Borrower")
promises to pay to the order of NATIONSBANK, NATIONAL ASSOCIATION
(CAROLINAS) (the "Bank"), at its main office in Charlotte, North
Carolina, the amount of the unpaid principal balance, not
exceeding $33,333,334.00, specified on the reverse hereof in
accordance with Section 2 of the Revolving Credit Agreement dated
of even date herewith among the Borrower and the Bank (as amended
and supplemented and in effect from time to time, the "Credit
Agreement") on the Termination Date or such earlier date as may
be required pursuant to the terms of the Credit Agreement, and to
pay interest at said office, from the date hereof, on the unpaid
principal balance owing hereunder, on the dates and at the rates
provided in the Credit Agreement. Interest on the Note after
default shall be determined based on the Base Rate plus 1%, but
not to exceed the highest rate permitted by applicable law. All
or any portion of the principal amount of such Loans may be
prepaid as provided in the Credit Agreement.
This Note is the Note referred to in the Credit Agreement,
and the terms and conditions set forth in the Credit Agreement
are incorporated herein by reference and shall be considered a
part hereof to the same extent as if written herein. All
capitalized terms used herein and not otherwise defined herein
shall have the meanings set forth in the Credit Agreement.
In addition to the provisions relating to occurrences of
other Events of Default set forth in the Credit Agreement, upon
(i) non-payment when due, whether by acceleration or otherwise,
of the outstanding principal amount hereof or (ii) non-payment,
within ten days after the due date thereof, of interest or of any
premium, fee or other charge under the Credit Agreement, the
entire principal amount and any accrued interest outstanding
under this Note shall, at the option of the holder thereof,
become immediately due and payable, without presentation, demand,
protest or notice of any kind, all of which are hereby expressly
waived by the Borrower, and the Borrower shall pay to the Bank
reasonable attorneys' fees in connection with such default or
recourse against any collateral held by the Bank as security for
the Borrower's indebtedness.
Interest hereunder shall be computed on the basis of a 360-
day year for the actual number of days in the interest period.
This Note shall be governed by, and construed in accordance
with, the law of the State of North Carolina.
All parties to this Note, including endorsers, sureties and
guarantors, if any, hereby waive presentment for payment, demand,
protest, notice of nonpayment or dishonor, and of protest, and
any and all other notices and demands whatsoever, and agree to
remain bound until the interest and principal are paid in full
notwithstanding any extension or extensions of time for payment
which may be granted even though the period of extension may be
indefinite, and notwithstanding any inaction by, or failure to
assert any legal right available to, the holder of this Note.
IN WITNESS WHEREOF, the Borrower has caused this Note to be
executed in its corporate name and its seal affixed hereto by its
duly authorized officers pursuant to a resolution of its Board of
Directors, or appropriate committee thereof, duly adopted, all as
of the date and year first above written.
RUDDICK CORPORATION
ATTEST:
___________________ By:_________________________________
___________ Secretary Name: Richard N. Brigden
Title: Vice President - Finance
[SEAL]<PAGE>
EXHIBIT B
Opinion of Smith Helms Mulliss & Moore, L.L.P.
1. Each of the Borrower and American & Efird, Inc., Harris
Teeter, Inc., Jordan Graphics, Inc. and R. S. Dickson & Company
(each, a "Major Subsidiary") is a corporation duly organized,
existing and validly existing under the laws of the State of
North Carolina and has the corporate power to own its properties
and to carry on its business as now being conducted. To the best
of our knowledge after due inquiry, the Borrower is not engaged
in any activity that would require it to qualify to do business
in any jurisdiction other than North Carolina. While we have not
made any inquiry of governmental officials in any jurisdiction
other than North Carolina, we have no reason to believe that any
of the Major Subsidiaries as of the date hereof has failed to
qualify to do business in any foreign jurisdiction where the
failure to so qualify would have a materially adverse effect on
the consolidated financial condition of the Borrower and its
subsidiaries, taken as a whole.
2. The Borrower is duly authorized under all applicable
provisions of law to execute and deliver the Agreement and the
Note and all corporate action on its part required for the lawful
execution, delivery and performance thereof has been duly taken;
and the Note has been duly executed and delivered by the proper
officers of the Borrower and upon receipt by the Borrower of the
loan evidenced thereby will be entitled to the benefits of the
Agreement; and the Agreement and the Note are the legal, valid
and binding obligations of the Borrower, enforceable in
accordance with their terms, subject as to enforcement of
remedies to applicable bankruptcy, reorganization, insolvency,
moratorium, fraudulent conveyance or other similar laws affecting
the rights of creditors now or hereafter in effect, and to
equitable principles that may limit the right to specific
enforcement of remedies, and further subject to the application
of principles of public policy.
3. Neither the execution, creation or issuance of the
Agreement or the Note, nor the fulfillment of or compliance with
their terms, will conflict with, or result in a breach of the
terms, conditions or provisions of, or constitute a violation of
or default under, any applicable law, regulation, or writ or
decree or the Articles of Incorporation or Bylaws of the Borrower
or any of the Major Subsidiaries as of the date hereof, or, to
our knowledge, any agreement or instrument to which the Borrower
or any Major Subsidiary is a party, or, to our knowledge, create
any lien, charge or encumbrance upon any of the property or
assets of the Borrower or any Major Subsidiary pursuant to the
terms of any agreement or instrument to which the Borrower or any
Major Subsidiary is a party or by which they are bound.
4. No authorization, approval or consent of any regulatory
body is necessary or required in connection with the lawful
execution, delivery and performance of the Agreement or the Note
which has not been obtained.
REVOLVING CREDIT AGREEMENT
THIS REVOLVING CREDIT AGREEMENT, dated as of this 15th day
of February, 1995, is entered into by and between RUDDICK
CORPORATION, a North Carolina corporation (herein called the
"Borrower"), and WACHOVIA BANK OF NORTH CAROLINA, N.A., a
national banking association (the "Bank");
W I T N E S S E T H:
WHEREAS, the Borrower and the Bank currently are parties to
an Amended and Restated Revolving and Term Loan Agreement dated
as of March 31, 1994 (the "Existing Credit Agreement") pursuant
to which the Bank agreed to make available to the Borrower a
revolving credit facility in an aggregate principal amount of up
to $20,000,000 as evidenced by that interim promissory note of
the Borrower dated March 31, 1994 payable to the order of the
Bank in the original principal amount of $20,000,000 (the
"Existing Note"); and
WHEREAS, the Borrower has requested that the Bank make
available to the Borrower a revolving credit facility of up to
$33,333,333.00, a portion of the proceeds of which will be used
to repay all principal outstanding under the Existing Note
together with any accrued and unpaid interest thereon;
NOW, THEREFORE, in consideration of the mutual covenants,
promises and conditions herein set forth, the Borrower and the
Bank hereby agree as follows:
1. DEFINITIONS. The terms defined in this Section
(except as herein otherwise expressly provided or unless the
context otherwise requires) for purposes of this Agreement shall
have the respective meanings specified in this Section. Unless
otherwise specified herein, all accounting terms used herein
shall be interpreted in the manner consistent with their usage in
Generally Accepted Accounting Principles. All determinations of
Consolidated Current Liabilities, Consolidated EBITDA,
Consolidated Fixed Charges, Consolidated Funded Debt,
Consolidated Net Income, Consolidated Tangible Net Worth,
Consolidated Shareholders' Equity and Consolidated Total Assets
shall be made by reference to the consolidated financial
statements of the Borrower and its subsidiaries described in
SECTION 12(a) hereof. All other financial determinations shall be
made by reference to the detailed accounting records of the
Borrower and its subsidiaries, consolidated on the same basis as
in the preparation of the financial statements described in
SECTION 12(a) hereof.
"Advance" means any borrowing hereunder that is a Base
Rate Loan, a CD Rate Loan or a LIBOR Loan, as the case may
be.
"Agreement" means this Revolving Credit Agreement,
including all exhibits and schedules hereto, as the same may
from time to time be modified, amended or supplemented.
"Applicable Margin" means, for the purposes of
calculating (i) the applicable interest rate for the
Interest Period for any LIBOR Loan, (ii) the applicable
interest rate for any CD Rate Loan and (iii) the applicable
rate for the Commitment Fee for purposes of SECTION 5
hereof, the percent per annum set forth below. Such
Applicable Margin shall be (A) determined as of the last day
of each fiscal quarter of the Borrower (the "Determination
Date") based upon the ratio of Consolidated Funded Debt as
at the Determination Date to Consolidated EBITDA for the
four-quarter period then ended (such calculation to be made
based upon the financial statements as of such date and for
the period then ended delivered pursuant to SECTION 12(a)
hereof and applied retroactively to such Determination Date)
and (B) applicable to all LIBOR Loans made, renewed or
converted, all CD Rate Loans outstanding and any Commitment
Fee accruing, as the case may be, on or after the most
recent Determination Date to occur, as specified below:
Ratio of Applicable
Consolidated Funded Margin Applicable
Debt to for CD Margin for
Consolidated Rate Loans and Commitment
EBITDA LIBOR Loans Fee
Greater than or equal to
3.75 to 1.00 .725% .25%
Greater than or equal to
3.00 to 1.00 but
less than 3.75 to 1.00 .600% .225%
Greater than or equal to
2.25 to 1.00 but
less than 3.00 to 1.00 .525% .175%
Greater than or equal to
1.50 to 1.00 but
less than 2.25 to 1.00 .450% .150%
Greater than or equal to
.900 to 1.00 but
less than 1.50 to 1.00 .400% .125%
Less than .900 to 1.00 .375% .125%
"Authorized Officer" means any of the President, Vice
President-Finance and Principal Accounting Officer (for
Securities and Exchange Commission reporting purposes) of
the Borrower.
"Base Rate" means, for any Base Rate Loan, the greater
of (i) the Prime Rate or (ii) the Federal Funds Effective
Rate plus one-half of one percent (.5%), each change in such
Base Rate to be effective as of the effective date of any
change in the Prime Rate or the Federal Funds Effective Rate
giving rise thereto.
"Base Rate Loan" means any Loan for which the rate of
interest is determined by reference to the Base Rate.
"Business Day" means any date which is not a Saturday,
Sunday or a day on which banks in the state of North
Carolina are authorized or obligated by law, executive order
or governmental decree to be closed.
"CD Rate" means the secondary certificate of deposit
rate for a maturity of 90 days as recorded by the New York
Federal Reserve Bank, as adjusted for current bank reserve
requirements and Federal Deposit Insurance Corporation
insurance for certificates of deposit in excess of $100,000,
PLUS the Applicable Margin with respect to CD Rate Loans.
"CD Rate Loan" means a Loan for which the rate of
interest is determined by reference to the CD Rate. Any
change in the interest rate resulting from a change in the
90-day CD Rate shall become effective as of the opening of
business on the date of such change in the interest rate
caused by a change in the 90-day CD Rate.
"Closing Date" means the date on which this Agreement
is executed and delivered by the Borrower and the Bank and
on which the conditions set forth in SECTION 11(a) hereof
have been satisfied.
"Code" means the Internal Revenue Code of 1986, as
amended from time to time, including any rules and
regulations promulgated thereunder.
"Consistent Basis" means in reference to the applica-
tion of Generally Accepted Accounting Principles, that the
accounting principles observed in the current period are
comparable in all material respects to those applied in the
preceding period.
"Consolidated Current Liabilities" means the current
liabilities of the Borrower and its subsidiaries on a
consolidated basis.
"Consolidated EBITDA" means, with respect to the
Borrower and its subsidiaries for any period of computation
thereof, the SUM of, without duplication, (i) Consolidated
Net Income, (ii) consolidated interest expense, (iii) taxes
paid on income, (iv) amortization, and (v) depreciation, all
determined on a consolidated basis in accordance with
Generally Accepted Accounting Principles.
"Consolidated Fixed Charge Ratio" means, with respect
to the Borrower and its subsidiaries for the four
consecutive fiscal quarters immediately preceding the time
of calculation, the sum of (a) (i) Consolidated Net Income,
(ii) Consolidated Fixed Charges and (iii) income taxes,
divided by (b) Consolidated Fixed Charges.
"Consolidated Fixed Charges" means consolidated net
interest expense plus consolidated rent payments under
operating leases for the period of the Borrower and its
subsidiaries.
"Consolidated Funded Debt" means all Indebtedness which
constitutes consolidated long term debt of the Borrower and
its subsidiaries, including (a) any Indebtedness with a
maturity more than one year after the creation of such
Indebtedness and (b) any portion thereof included in
Consolidated Current Liabilities.
"Consolidated Net Income" means the consolidated net
income of the Borrower and its subsidiaries, after provision
for taxes.
"Consolidated Shareholders' Equity" means shareholders'
equity of the Borrower determined on a consolidated basis in
accordance with GAAP.
"Consolidated Tangible Net Worth" means the
Consolidated Shareholders' Equity reduced by the recorded
net balances of copyrights, patents, trademarks, goodwill,
capitalized advertising costs, organization costs, licenses,
franchises, exploration permits and import and export
permits.
"Consolidated Total Assets" means the aggregate amount
of all assets or resources of the Borrower and its
subsidiaries on a consolidated basis.
"Consolidated Total Capitalization" means the total of
Consolidated Funded Debt and Consolidated Shareholders'
Equity of the Borrower and its subsidiaries.
"Default" means any event which with the giving of
notice, lapse of time, or both, would become an Event of
Default.
"Dollars" and the symbol "$" means dollars constituting
legal tender for the payment of public and private debts in
the United States.
"ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time, including any
rules and regulations promulgated thereunder.
"Event of Default" has the meaning given such term in
SECTION 16 hereof.
"Fiscal Year" means the 52/53-week fiscal period of the
Borrower ending on the Sunday closest to September 30 of
each calendar year.
"Fiscal Year End" means the last day of the Borrower's
Fiscal Year.
"Generally Accepted Accounting Principles" or "GAAP"
means those principles of accounting set forth in the
Statements of the Financial Accounting Standards Board or
the American Institute of Certified Public Accountants or
which have other substantial authoritative support and are
applicable in the circumstances as of the date of a report
as such principles are from time to time supplemented and
amended.
"Indebtedness" means all obligations for borrowed money
or the deferred purchase price of property or services,
capitalized lease obligations determined in accordance with
Statement No. 13 of the Financial Accounting Standards Board
as in effect as of the date of this Agreement, and
guarantees of the foregoing, but shall exclude any such
obligations or guarantees of an Unrestricted Subsidiary or
any such obligations or guarantees of or by the Borrower to
an Unrestricted Subsidiary unless such obligations of or by
the Borrower to an Unrestricted Subsidiary are deemed to be
material with regard to financial reporting in accordance
with GAAP.
"Interest Period" for each LIBOR Loan means a period
commencing on the date such LIBOR Loan is made or converted
and each subsequent period commencing on the last day of the
immediately preceding Interest Period for such LIBOR Loan,
and ending, at the Borrower's option, on the date one, two,
three or six months thereafter as notified to the Bank by
the Borrower three (3) LIBOR Business Days prior to the
beginning of such Interest Period; PROVIDED, that,
(i) if the Borrower fails to notify the Bank of
the length of an Interest Period three (3) LIBOR
Business Days prior to the first day of such Interest
Period, the Loan for which such Interest Period was to
be determined shall be deemed to be a CD Rate Loan;
(ii) if an Interest Period for a LIBOR Loan would
end on a day which is not a LIBOR Business Day such
Interest Period shall be extended to the next LIBOR
Business Day (unless such extension would cause the
applicable Interest Period to end in the succeeding
calendar month, in which case such Interest Period
shall end on the next preceding LIBOR Business Day);
(iii) any Interest Period which begins on the
last LIBOR Business Day of a calendar month (or on a
day for which there is no numerically corresponding day
in the calendar month at the end of such Interest
Period) shall end on the last LIBOR Business Day of a
calendar month; and
(iv) no Interest Period shall extend past the
Termination Date.
"LIBOR Base Rate" means for any LIBOR Loan, in respect
of the Interest Period specified by the Borrower for such
LIBOR Loan, the rate (expressed as a percentage and rounded
upward if necessary to the nearest 1/100 of 1%) (which shall
be the same for each day of such Interest Period) determined
by the Bank in good faith in accordance with its usual
procedures for its customers generally to be the average of
the rates per annum for deposits in Dollars offered to major
banks in the London interbank market at approximately 11:00
A.M. London, England time two (2) LIBOR Business Days prior
to the commencement of the applicable Interest Period in an
amount approximately equal to the principal amount of, and
for a period comparable to the Interest Period for, such
LIBOR Loan.
"LIBOR Business Day" means a Business Day on which the
relevant international financial markets are open for the
transaction of the business contemplated by this Agreement
in London, England and Charlotte, North Carolina.
"LIBOR Loan" means a Loan for which the rate of
interest is determined by reference to the LIBOR Rate.
"LIBOR Rate" means, for the Interest Period for any
LIBOR Loan, the rate of interest per annum determined
pursuant to the following formula:
LIBOR = (Libor Base Rate\(1-Reserve Requirement)
Rate + Applicable Margin
"Lien" means as to any Person, any mortgage, lien,
pledge, adverse claim, charge, security interest, or other
encumbrance in or on, or interest or title of any vendor,
lessor, lender or other secured party to or of the Person
under any conditional sale or other title retention
agreement or capital lease with respect to any property or
asset of the Person.
"Loan" or "Loans" means any of the Base Rate Loans, CD
Rate Loans or LIBOR Loans.
"Note" means the revolving credit promissory note
delivered pursuant to SECTION 2(b) hereof.
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA.
"Person" means any individual, joint venture,
corporation, company, voluntary association, partnership,
trust, joint stock company, unincorporated organization,
association, government, or any agency, instrumentality, or
political subdivision thereof, or any other form of entity.
"Plan" means any employee benefit or other plan
established or maintained or to which contributions have
been made by the Borrower or any subsidiary and which is
covered by Title IV of ERISA or to which Section 412 of the
Code applies.
"Prime Rate" means the rate of interest per annum
announced publicly by the Bank as its prime rate from time
to time. The Prime Rate is not necessarily the best or the
lowest rate of interest offered by the Bank.
"Property or Equipment" means any interest in any kind
of property, equipment, or asset, whether real, personal, or
mixed, or tangible or intangible.
"Regulatory Change" means any change in, or the
adoption or making of new, United States Federal or state
laws or regulations (including Regulation D of the Board of
Governors of the Federal Reserve System ("Regulation D") and
capital adequacy regulations) or foreign laws or regulations
or the adoption or making after such date of any
interpretations, directives or requests applying to a class
of banks, which includes the Bank, under any United States
Federal or state or foreign laws or regulations (whether or
not having the force of law) by any court or governmental or
monetary authority charged with the interpretation or
administration thereof or compliance by the Bank with any
request or directive regarding capital adequacy, whether or
not having the force of law, whether or not failure to
comply therewith would be unlawful.
"Reportable Event" has the meaning given such term in
Section 4043(b) of Title IV of ERISA.
"Reserve Requirement" means, for any LIBOR Loan, the
maximum aggregate rate at which reserves (including, without
limitation, any marginal, supplemental or emergency
reserves) are required to be maintained with respect thereto
under Regulation D by the member banks of the Federal
Reserve System with respect to Dollar funding in the London
interbank market. Without limiting the effect of the
foregoing, the Reserve Requirement shall reflect any other
reserves required to be maintained by such member banks by
reason of any Regulatory Change against (i) any category of
liabilities which includes deposits by reference to which
the LIBOR Base Rate is to be determined or (ii) any category
of extensions of credit or other assets which include LIBOR
Loans.
"Restricted Subsidiary" shall mean any Subsidiary that
is not an Unrestricted Subsidiary.
"Revolving Credit Facility" means the facility
described in SECTION 2(a) hereof providing for Loans to the
Borrower by the Bank in an aggregate principal amount equal
to not more than the Committed Amount.
"Subsidiary" means any corporation of which the
Borrower at the time owns, directly or through any
intervening medium, more than 50% of the shares of its
voting stock which has power to elect a majority of the
board of directors.
"Termination Date" means the earliest to occur of
(i) February 15, 2000 or such later date as shall be
determined pursuant to SECTION 9 hereof, or (ii) the date of
termination of Bank's obligations pursuant to SECTION 16
upon the occurrence of an Event of Default, or (iii) such
date as the Borrower may voluntarily and permanently
terminate the Revolving Credit Facility by payment in full
of all amounts outstanding hereunder.
"Unrestricted Subsidiary" shall mean any subsidiary
created or acquired by the Borrower or its Restricted
Subsidiaries which is incorporated outside the United States
or substantially all of the business of which is carried on
outside the United States.
2. THE LOAN.
(a) COMMITMENT TO LEND. Subject to the terms and
conditions of this Agreement, the Bank agrees to make Loans
to the Borrower, at any time and from time to time before
February 15, 2000, in an aggregate principal amount not in
excess at any time of $33,333,333 (the "Committed Amount",
which Committed Amount is a portion of aggregate financing
commitments of $100,000,000 ("Total Commitments") from the
Bank, First Union National Bank of North Carolina and
NationsBank, National Association (Carolinas) (collectively,
the "Banks")). Prior to the Termination Date, the Borrower
may use the Committed Amount by borrowing, paying and
reborrowing such amount, all in accordance with the terms
and conditions of this Agreement.
Borrower agrees to borrow, pay and reborrow in amounts
from the Banks on a pro rata basis as determined by each
Bank's Committed Amount in relation to Total Commitments.
Each borrowing shall be in an aggregate amount of not less
than $300,000 or an integral multiple thereof, to be shared
by the Banks pro rata.
(b) THE NOTE. On or before the date of the first
borrowing hereunder, Borrower shall execute and deliver to
the Bank a revolving credit promissory note in the principal
amount of $33,333,333, dated as of the date of this
Agreement and payable in full on the Termination Date (as
the same may be extended pursuant to SECTION 9 hereof) in
form and substance substantially similar to the attached
EXHIBIT A. The Bank or subsequent holder is hereby
authorized by the Borrower and agrees to set forth on the
reverse side of the Note issued to the Bank the amount of
each borrowing made thereunder and repayment thereof made by
the Borrower.
(c) ADVANCES AND RATE SELECTION. The Borrower shall
give the Bank (A) telephonic notice of each LIBOR Loan,
whether representing an additional Advance hereunder or the
conversion of borrowings hereunder from Base Rate Loans or
CD Rate Loans to LIBOR Loans or the election of a subsequent
Interest Period for any LIBOR Loan, prior to 2:00 P.M.
Charlotte, North Carolina time at least three LIBOR Business
Days prior to the day such Advance is to be made or such
Loan is to be converted or continued; and (B) telephonic
notice of each Base Rate Loan or CD Rate Loan representing
an additional Advance hereunder or the conversion of
borrowings hereunder from LIBOR Loans to Base Rate Loans or
CD Rate Loans prior to 2:00 P.M. Charlotte, North Carolina
time on the day such Advance is to be made or such Loan is
to be converted. Each such notice, which shall be effective
upon receipt by the Bank, shall specify the amount of the
Advance, the type of Loan (Base Rate, CD Rate or LIBOR), the
date of the Advance and, if a LIBOR Loan, the Interest
Period to be used in the computation of interest. In the
case of a LIBOR Loan, the Borrower shall provide the Bank
written confirmation of telephonic notice of such LIBOR Loan
on the same day by telefacsimile transmission setting forth
the information described above, but failure to provide such
confirmation shall not affect the validity of such
telephonic notice. The Borrower shall have the option to
elect the duration of subsequent Interest Periods and to
convert the Loans in accordance with SECTION 8 hereof. If
the Bank does not receive a notice of election of duration
of an Interest Period or to convert by the time prescribed
hereby and by SECTION 8 hereof, the Borrower shall be deemed
to have elected to convert to or continue such Loan as a CD
Rate Loan until the Borrower otherwise notifies the Bank in
accordance herewith and with SECTION 8.
(d) REPAYMENTS. Each repayment shall be in an
aggregate amount of not less than $300,000 or an integral
multiple thereof, each such repayment to be shared on a pro
rata basis by the Banks as determined by each Bank's
Committed Amount in relation to Total Commitments with
respect to each and every such repayment.
3. PAYMENT OF INTEREST. The Borrower shall pay interest
to the Bank on the outstanding and unpaid principal amount of
each Loan, for the period commencing on the date of such Loan
until such Loan shall be due, at the LIBOR Rate, CD Rate or the
Base Rate, as elected or deemed elected by the Borrower or
otherwise applicable to such Loan as herein provided. Interest
on the outstanding principal balance of each Loan shall be
computed on the basis of a year of 360 days and calculated for
the actual number of days elapsed. Interest on each Loan shall
be paid (i) quarterly in arrears on the last Business Day of each
March, June, September and December commencing March 1995, on
each Base Rate Loan and on each CD Rate Loan, (ii) on the last
day of the applicable Interest Period for each LIBOR Loan and,
for any LIBOR Loan having an Interest Period extending beyond
three months, also on the date occurring three months after the
commencement of such Interest Period, and (iii) upon payment in
full of the principal amount of such Loan.
Interest on the Note after default shall be determined based
on the Base Rate plus 1%, but not to exceed the highest rate
permitted by applicable law.
4. PAYMENT OF PRINCIPAL. The principal amount of all
Loans shall be due and payable to the Bank in full on the
Termination Date (as the same may be extended pursuant to SECTION
9 hereof) or earlier as herein expressly provided. Except as
hereinafter provided, the principal amount of the Loans may be
prepaid in whole or in part at any time without premium or
penalty.
The Borrower shall promptly pay to the Bank, upon request,
such amount or amounts as shall be sufficient (in the reasonable
determination of the Bank) to compensate it for any loss, cost or
expense incurred by it as a result of any of the following (each
a "Breakage Event"):
(a) any payment, prepayment or conversion of a LIBOR
Loan on a date other than the last day of the Interest
Period for such LIBOR Loan; or
(b) any failure by the Borrower to borrow a LIBOR Loan
or convert a Base Rate Loan or a CD Rate Loan into a LIBOR
Loan on the date for such borrowing or conversion specified
in the relevant notice under SECTION 8 hereof;
such compensation to include, without limitation, an amount equal
to the excess, if any, of the amount of interest which would have
accrued on the principal amount of such LIBOR Loan for the period
from the date of such Breakage Event to the last day of the then
current Interest Period for such LIBOR Loan at (i) the LIBOR Base
Rate on the first day of such Interest Period over (ii) the LIBOR
Base Rate as reasonably determined by the Bank as of the date of
such Breakage Event for Dollar deposits of amounts comparable to
such principal amount and maturities comparable to such period.
A good faith determination of the Bank as to the amounts payable
pursuant to this SECTION 4 shall be conclusive absent manifest
error. The Bank shall furnish to the Borrower calculations in
reasonable detail setting forth the Bank's determination of the
amount of such compensation.
5. COMMITMENT FEE. Until the Borrower's option to borrow
hereunder has been fully exercised, the Borrower will pay to the
Bank a commitment fee (the "Commitment Fee") equal in amount to
the product of the Applicable Margin with respect to the
Commitment Fee multiplied by the average daily amount by which
the Bank's Committed Amount exceeds the average daily principal
amount outstanding under the Note for the applicable period,
payable in arrears from the date hereof on the interest due dates
set out in SECTION 3(i) hereof.
6. TERMINATION OR REDUCTION OF COMMITTED AMOUNT. So long
as the Note is outstanding, Borrower shall have the right from
time to time upon not less than three days' prior written notice
to the Banks to terminate, or to reduce, the Total Commitments
and the Bank's Committed Amount on a pro rata basis. Any partial
reduction shall be in an amount equal to 5% of Total Commitments
or any integral multiple thereof and shall reduce permanently the
Bank's Committed Amount as a pro rata share of Total Commitments.
Each reduction shall be accompanied by a prepayment of the Note
(together with accrued interest thereon) to the extent that the
principal amount thereof then outstanding exceeds the Committed
Amount as so reduced.
7. USE OF PROCEEDS. The proceeds of the Loans made
hereunder shall be used by the Borrower first to repay all
amounts outstanding under the Existing Note, with the excess to
be used for general corporate purposes.
8. CONVERSIONS AND ELECTIONS OF INTEREST PERIODS. The
duration of the initial Interest Period for each LIBOR Loan shall
be as specified by the Borrower. Provided that no Event of
Default shall have occurred and be continuing and subject to the
limitations set forth below, the Borrower may on not less than
three LIBOR Business Days' notice to the Bank on or before 2:00
P.M. Charlotte, North Carolina time:
(a) elect a subsequent Interest Period for all or a
portion of the outstanding LIBOR Loans to begin on the last
day of the Interest Period for such LIBOR Loans;
(b) convert all or a portion of the outstanding LIBOR
Loans to Base Rate Loans or CD Rate Loans on the last day of
the Interest Period for such LIBOR Loans; and
(c) convert all or a portion of the outstanding Base
Rate Loans and CD Rate Loans to LIBOR Loans on any date.
Notice of any such elections or conversions shall specify
the effective date of such election or conversion and the
Interest Period to be applicable to the LIBOR Loan as continued
or converted. Each election and conversion pursuant to this
SECTION 8 shall be subject to the limitations on LIBOR Loans set
forth in the definition of "Interest Period" herein. If the Bank
does not receive a notice of election of duration of an Interest
Period or to convert an outstanding LIBOR Loan by the time
prescribed above, the Borrower shall be deemed to have elected to
convert such LIBOR Loan to a CD Rate Loan on the last day of the
Interest Period for such LIBOR Loan.
9. EXTENSION OF TERMINATION DATE. The Borrower shall have
the option to extend the Termination Date for an additional 365-
day period upon each anniversary of the Closing Date such that
the Revolving Credit Facility, as so extended, will continuously
have a five year term. The Termination Date shall be deemed
automatically extended, and the provisions of this Agreement and
the Note shall continue to be in full force and effect for such
extended five year period, UNLESS: (i) the Borrower shall give
written notice to the Bank, not less than 15 days prior to the
anniversary date of the Closing Date, of its intention not to so
extend the Termination Date; or (ii) the Bank shall give written
notice to the Borrower, not less than 15 days prior to the
anniversary date of the Closing Date, of its intention not to so
extend the Termination Date.
10. REPRESENTATIONS AND WARRANTIES. In borrowing
hereunder, the Borrower represents and warrants to the Bank,
which representations and warranties will survive the delivery of
the Note and the making of the Loans hereunder, as follows:
(a) DUE INCORPORATION, ETC. The Borrower and each
Restricted Subsidiary is a corporation duly organized,
validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated, and has the
corporate power and legal authority to own its property and
to carry on its business as now being conducted and is duly
qualified to transact business as a foreign corporation in
every jurisdiction where such qualification is necessary.
The Borrower has the corporate power to execute and perform
this Agreement, to borrow hereunder and to execute and
deliver the Note, and to do so will not violate its Articles
of Incorporation or Bylaws, any law to which it is subject,
or any agreement or instrument to which it is a party.
(b) LITIGATION. Except as set forth in the financial
statements described in SECTION 10(c) hereof, there is no
litigation or proceeding pending or, to the knowledge of the
Borrower, threatened which, if decided adversely to the
Borrower or any subsidiary, would have a material adverse
effect upon the financial condition or business of the
Borrower and its subsidiaries, taken as a whole.
(c) FINANCIAL CONDITION. The Consolidated Balance
Sheet of the Borrower and its subsidiaries as at October 2,
1994 and the related Statements of Consolidated Income and
Retained Earnings and Statements of Cash Flows of the
Borrower and its subsidiaries for the fiscal year then
ended, all of which have been delivered to the Bank prior to
the execution of this Agreement, are correct and complete
and fairly present the financial condition of the Borrower
and its subsidiaries and the results of their operations and
their retained earnings as of the dates and for the periods
referred to. The consolidated balance sheets of the
Borrower and its subsidiaries as at January 1, 1995 and the
related statements of consolidated income and retained
earnings and statements of consolidated cash flows for the
three-month period then ended, copies of which have been
furnished to the Bank, are true and correct and present
fairly, subject to normal recurring year-end adjustments,
the financial condition of the Borrower and its subsidiaries
as at such date and the results of their operations and
their retained earnings as of such date and for such period.
All financial statements have been prepared in accordance
with Generally Accepted Accounting Principles applied on a
Consistent Basis throughout the periods involved. Since
January 1, 1995, no material adverse changes in the
financial condition, the business or operations of the
Borrower and its subsidiaries, taken as a whole, have
occurred.
The real estate and other fixed assets of the Borrower
and its subsidiaries are subject to no mortgage or lien
securing an indebtedness of a material principal amount
except as shown in the balance sheets referred to above.
The Borrower and its subsidiaries have no liabilities,
direct or contingent, except those disclosed in the
financial statements referred to above, and except those
arising in the ordinary course of business since the dates
of such financial statements, having in the aggregate no
materially adverse effect on the financial condition of the
Borrower and its subsidiaries, taken as a whole. The
Borrower and its subsidiaries have made no investments in,
advances to or guaranties of the obligations of any
corporation, individual or other entity other than Borrower
in an aggregate amount material to the consolidated
financial condition of the Borrower and its subsidiaries,
taken as a whole, except those disclosed in the financial
statements referred to above.
(d) GOVERNMENTAL CONTRACTS. The Borrower and its
subsidiaries are not subject to the renegotiation of any
government contract in any material amount.
(e) TAX RETURNS. The Borrower and its subsidiaries
have filed all required federal, state, and local tax
returns and have paid all taxes as shown on such returns as
they have become due. Federal income tax returns have been
audited, or closed by the operation of applicable statutes
of limitation, through 1990, and no claims have been
assessed and are unpaid with respect to such taxes except as
shown in the financial statements referred to in SECTION
10(c) above.
11. CONDITIONS TO CLOSING.
(a) CONDITIONS PRECEDENT. The obligation of the Bank
to lend hereunder is subject to the following conditions
precedent:
(i) LEGAL OPINION. On or before the date
hereof, the Bank shall have received the favorable
written opinion of Smith Helms Mulliss & Moore, L.L.P.,
counsel for the Borrower, addressed to the Bank, and
satisfactory in form and substance to the Bank,
substantially in the form of EXHIBIT B attached hereto.
(ii) CORPORATE RESOLUTIONS. The Bank shall have
received, on or before the date of the first borrowing
hereunder, (A) a copy of the resolutions of the Board
of Directors, or appropriate committee thereof, of the
Borrower, certified on such date, authorizing the
execution and delivery of this Agreement, the borrowing
hereunder and the execution and delivery of the Note;
and (B) such additional documents as the Bank or
counsel for the Bank may reasonably request.
(iii) REPRESENTATIONS AND WARRANTIES. On the
date of any Advance hereunder, the representations and
warranties set forth in SECTION 10 hereof shall be true
and correct on and as of such date with the same effect
as though such representations and warranties had been
made on and as of such date.
(iv) DUE COMPLIANCE. At the time of each Advance
hereunder, the Borrower and each subsidiary shall be in
compliance with all of the terms and provisions set
forth herein on their part to be observed and
performed, and no Event of Default as specified in
SECTION 16 below, nor any event which upon notice or
lapse of time, or both, would constitute such an Event
of Default, shall have occurred at the time of such
borrowing.
(v) PAYMENT OF FACILITY FEE. On or before the
date hereof, the Bank shall have received payment of
all fees due and payable in connection with the
Revolving Credit Facility established hereby.
(b) COVENANT AND CONDITION SUBSEQUENT. The Borrower
shall deliver to the Bank, not more than 90 days after the
date of the first borrowing hereunder, such additional
documents as the Bank or counsel for the Bank may reasonably
request.
12. AFFIRMATIVE COVENANTS. The Borrower covenants and
agrees that from the date hereof and until payment in full of the
principal and interest on the Note, unless the Bank shall
otherwise consent in writing, the Borrower will:
(a) FINANCIAL REPORTS AND OTHER DATA.
(i) As soon as practicable and in any event
within 45 days after the end of each of the first three
quarterly periods of each Fiscal Year of the Borrower,
deliver to the Bank (A) a consolidated balance sheet of
the Borrower and its subsidiaries as at the end of such
quarterly period, and related consolidated statements
of income and retained earnings for such quarterly
period and for the period from the beginning of the
current Fiscal Year to the end of such quarterly
period, setting forth in comparative form figures for
the corresponding periods in the preceding Fiscal Year,
all to be in reasonable detail and certified by an
Authorized Officer to have been prepared in accordance
with Generally Accepted Accounting Principles applied
on a Consistent Basis, subject only to changes result-
ing from normal, recurring year-end adjustments; and
(B) computations demonstrating compliance with the
provisions of SECTIONS 12(l), 12(m) and 13(a) hereof,
certified by an Authorized Officer to be true and
correct and to have been prepared from the foregoing
quarterly statements, provided however that in making
the quarterly (but not the annual) computation of
Consolidated Tangible Net Worth as described in SECTION
12(m), the Borrower may omit adjustments for
amortization of intangible items unless such
adjustments are requested by the Bank;
(ii) As soon as practicable and in any event
within 90 days after each Fiscal Year End, deliver to
the Bank (A) a consolidated balance sheet of the
Borrower and its subsidiaries as at such Fiscal Year
End, and related consolidated statements of income and
retained earnings and changes in consolidated financial
position for such Fiscal Year, setting forth in each
case in comparative form corresponding figures from the
preceding annual statements, all in reasonable detail
and satisfactory in scope to the Bank, and audited by
and containing (as to the consolidated financial
statements) an unqualified opinion of independent
certified public accountants of national standing as
shall be satisfactory to the Bank and (B) the
computations required by SECTION 12(a)(i)(B) hereof;
(iii) Deliver to the Bank a copy of each report
filed by the Borrower with the Securities and Exchange
Commission pursuant to SECTION 13(a) or 14 of the
Securities Exchange Act of 1934, including each Annual
Report on Form 10-K, Quarterly Report on Form 10-Q,
Current Report on Form 8-K, and definitive proxy
statement, in each case within 15 days of the filing
thereof; and
(iv) With reasonable promptness, deliver such
additional financial or other data as the Bank may
reasonably request. The Bank is hereby authorized to
deliver a copy of any financial statements or other
information relating to the business operations or
financial condition of the Borrower and its
subsidiaries which may be furnished to it or come to
its attention pursuant to this Agreement or otherwise,
to any regulatory body or agency having jurisdiction
over the Bank.
(B) TAXES AND LIENS. Promptly pay, or cause to be
paid, all taxes, assessments or other governmental charges
which may lawfully be levied or assessed upon the income or
profits of the Borrower, or any subsidiary, or upon any
property, real, personal or mixed, belonging to the Borrower
or any subsidiary, or upon any part thereof, and also any
lawful claims for labor, material and supplies which, if
unpaid, might become a lien or charge against any such
property; provided, however, neither the Borrower nor any
subsidiary shall be required to pay any such tax,
assessment, charge, levy or claim so long as the validity
thereof shall be actively contested in good faith by proper
proceedings and provided the Borrower shall, if requested by
the Bank, set up reserves therefor consistent with Financial
Accounting Standards Board Statement No. 5 and Accounting
Principles Board Statement No. 11 (such reserves not
required to be separately funded); but provided further that
any such tax, assessment, charge, levy or claim shall be
paid forthwith upon the commencement of proceedings to
foreclose any lien securing the same unless such proceeding
has been properly stayed.
(c) BUSINESS AND EXISTENCE. Do or cause to be done
all things necessary to preserve and to keep in full force
and effect its corporate existence, rights and franchises,
trade names, patents, trademarks and permits.
(d) INSURANCE ON PROPERTIES. Keep its business and
properties insured at all times with responsible insurance
companies and carry such types and amounts of insurance as
are usually carried by corporations engaged in the same or a
similar business similarly situated.
(e) MAINTAIN PROPERTY. Maintain its properties in
good order and repair and, from time to time, make all
needful and proper repairs, renewals, replacements,
additions and improvements thereto.
(f) RIGHT OF INSPECTION. Permit the Bank, at its
expense, to visit and inspect any of the properties,
corporate books and financial reports of the Borrower and
its subsidiaries in the presence of a corporate officer of
the Borrower or persons designated by them and to discuss
their affairs, finances and accounts with the principal
officers of the Borrower and their independent public
accountants, all at such reasonable times and as often as
the Bank may reasonably request.
(g) OBSERVE ALL LAWS. Conform to and duly observe all
laws, regulations and other valid requirements of any
regulatory authority with respect to the conduct of its
business, violation of which would materially adversely
affect the operations or business of the Borrower or any of
its subsidiaries.
(h) COVENANTS EXTENDED TO RESTRICTED SUBSIDIARIES.
Cause each Restricted Subsidiary to do with respect to
itself, its business and its assets, each of the things
required of the Borrower in SECTIONS 12(b) through 12(g)
hereof.
(i) BORROWER'S KNOWLEDGE OF DEFAULT. Immediately give
notice to the Bank of the occurrence of any Default or Event
of Default hereunder or under any other obligation
representing Indebtedness of the Borrower or any Restricted
Subsidiary, of which the Borrower or such subsidiary has
knowledge, specifying the nature thereof, the period of
existence thereof and what action the Borrower proposes to
take with respect thereto.
(j) JUDGMENTS, ETC. Immediately give the Bank written
notice of any judgment, attachment, levy, or execution
against the Borrower or any assets of the Borrower or any
subsidiary which involves (i) an amount of $250,000 or more
in excess of the amount covered by insurance, or (ii) an
amount in excess of $1,000,000, and establish or cause to be
established appropriate and adequate reserves to cover any
such claim, levy, attachment, or execution in any amount
satisfactory to its independent certified public
accountants.
(k) ERISA. Comply with all requirements of ERISA
applicable to it and its Restricted Subsidiaries and furnish
to the Bank as soon as possible and in any event within 30
days after the Borrower or its Restricted Subsidiaries or
duly appointed administrator of a Plan knows or has reason
to know that any Reportable Event with respect to any Plan
has occurred, a statement of an Authorized Officer setting
forth details as to such Reportable Event and any action
which the Borrower or its Restricted Subsidiaries proposes
to take with respect thereto, together with a copy of the
notice of such Reportable Event given to the PBGC or a
statement that said notice will be filed with the annual
report to the United States Department of Labor with respect
to such Plan if such filing has been authorized.
(l) CONSOLIDATED FIXED CHARGE RATIO. Maintain at the
end of each of the Borrower's fiscal quarters, a
Consolidated Fixed Charge Ratio of at least 1.50 to 1.00.
For purposes of this SECTION 12(l), the term "Consolidated
Fixed Charge Ratio" means for the four consecutive fiscal
quarters immediately preceding the time of any such
calculation (a) the sum of (i) Consolidated Net Income, (ii)
Consolidated Fixed Charges and (iii) income taxes, divided
by (b) Consolidated Fixed Charges.
(m) CONSOLIDATED TANGIBLE NET WORTH. Maintain
Consolidated Tangible Net Worth of not less than the
Required Amount computed in accordance with the remainder of
this paragraph. The Required Amount shall be $238,589,000
during Fiscal Year 1995. As of the last day of each Fiscal
Year, beginning with Fiscal Year 1995, the Required Amount,
including any prior increases, shall be increased by 40% of
the Consolidated Net Income for such Fiscal Year. In the
event Consolidated Net Income is a negative amount for any
Fiscal Year, the Required Amount shall not be adjusted as of
the end of such Fiscal Year, and the amount of any such
negative amount shall be carried forward and offset against
Consolidated Net Income for the next Fiscal Year for which
Consolidated Net Income is positive until such negative
amount is fully used.
13. NEGATIVE COVENANTS. The Borrower covenants and agrees
that from the date hereof until payment in full of the principal
and interest on the Note, unless the Bank shall otherwise consent
in writing, it will not, nor will it permit any Restricted
Subsidiary to, either directly or indirectly:
(a) CONSOLIDATED FUNDED DEBT. Incur, create, assume or
guarantee, or otherwise become or be liable in respect of
any Indebtedness which would be included in Consolidated
Funded Debt except:
(i) the Note;
(ii) the respective revolving credit promissory
notes of the Borrower payable to First Union National
Bank of North Carolina and NationsBank, National
Association, in the principal amounts of $33,333,333.00
and $33,333,334.00, respectively, and each dated as of
the date hereof;
(iii) Indebtedness existing as of the date hereof;
and
(iv) Additional Indebtedness which in the
aggregate when added to the Indebtedness evidenced by
the Note or existing as of the date hereof, does not
exceed 60% of Consolidated Total Capitalization.
(b) RESTRICTED SUBSIDARY INDEBTEDNESS. Incur,
create, assume or guarantee or otherwise become liable in
respect of any Indebtedness of a Restricted Subsidiary
except:
(i) borrowings among the Borrower and the
Restricted Subsidiaries;
(ii) extensions, renewals, or replacements of
Indebtedness existing as of the date hereof (without
increasing the principal amount thereof);
(iii) Indebtedness directly related to the
acquisition or construction of Property or Equipment,
but only to the extent of the purchase price or cost
thereof, or any Indebtedness assumed by imposition of
law in connection with the acquisition of an existing
business; or
(iv) Other Indebtedness in an amount not exceeding
15% of Consolidated Tangible Net Worth.
(c) LIMITATIONS ON LIENS. Incur, create, assume or
permit to exist any Lien of any kind upon any of its
property now owned or hereafter acquired or assets of any
character in an amount in excess of 15% of Consolidated
Tangible Net Worth, unless the Note is equally and ratably
secured with the Indebtedness secured by such Lien except
that the following Liens shall not be included in making a
determination of the amount of Liens:
(i) Liens for taxes or assessments or other
governmental charges or levies, either not yet due and
payable or being contested in good faith or to the
extent that nonpayment thereof shall be permitted;
(ii) Liens created by or resulting from any
litigation or legal proceeding which is currently being
contested in good faith by appropriate proceedings;
(iii) Other Liens incidental to the normal
conduct of the business of the Borrower or any
Restricted Subsidiary or the ownership of its property
which are not incurred in connection with the
incurrence of Indebtedness and which do not in the
aggregate materially impair the use of such property in
the operation of the business of the Borrower, and the
Borrower and its Restricted Subsidiaries taken as a
whole or the value of such property for the purposes of
such business;
(iv) Liens existing at the time of the issuance of
the Note;
(v) the extension, renewal or replacement of any
Lien permitted by the foregoing subparagraph (iv) in
respect of the same property theretofore subject
thereto or the extension, renewal or replacement
thereof (without increase of principal amount of the
Indebtedness secured);
(vi) Liens granted by the Restricted Subsidiaries
in favor of the Borrower; and
(vii) (A) any Lien on Property or Equipment
granted with respect to such Property or Equipment in
connection with the provision of all or a part of the
purchase price or cost of the construction of such
Property or Equipment (but not in excess of the amount
of such purchase price or cost) created
contemporaneously with, or within 120 days after, such
acquisition or the completion of such construction, or
(B) any Lien on Property or Equipment existing in such
Property or Equipment at the time of acquisition
thereof, whether or not the debt secured thereby is
assumed by the Borrower or such Restricted Subsidiary,
or (C) any Lien existing on the Property or Equipment
of a corporation at the time such corporation is merged
into or consolidated with the Borrower or a Restricted
Subsidiary, or at the time of a sale, lease or other
disposition of the Properties or Equipment of a
corporation or firm as an entirety or substantially as
an entirety to the Borrower or a Restricted Subsidiary;
provided however that the amount of any Lien permitted
under this subparagraph (vii) shall not exceed the fair
market value of the Property or Equipment covered by
such Lien.
(d) CONSOLIDATION, MERGER OR REORGANIZATION. Enter
into any transaction of merger or consolidation except that
(i) a Restricted Subsidiary may merge into the Borrower or
another Restricted Subsidiary, and (ii) the Borrower may
merge or consolidate with any corporation organized under
the laws of any state in the United States so long as (A)
the resulting or surviving entity expressly assumes the
obligations of the Borrower under this Agreement and the
Note and (B) no Event of Default exists hereunder after
giving effect to such merger.
(e) SALE OF ASSETS, DISSOLUTION, ETC. Sell, assign,
lease or otherwise dispose of all or substantially all of
its properties or assets (other than inventory), or any of
its notes, accounts or contract rights, or any assets or
properties necessary or desirable for the proper conduct of
its business, or wind up, liquidate or dissolve, or agree to
any of the foregoing, or permit any Restricted Subsidiary to
do so, except, as to any such transaction, to the extent the
total assets involved do not exceed either
(i) together with any other assets involved in
such transactions during the same Fiscal Year, 10% of
Consolidated Total Assets determined as of the end of
the last fiscal quarter prior to such transaction,
or,
(ii) together with any other assets involved in
such transactions since the date of this Agreement on a
cumulative basis, 25% of Consolidated Total Assets
determined as of the end of the last fiscal quarter
prior to such transaction.
Notwithstanding the foregoing, (x) any Restricted Subsidiary
may sell, lease, transfer, or otherwise dispose of its
assets to the Borrower or any other Restricted Subsidiary
and such assets shall not be included in the foregoing
calculations, and (y) upon the Borrower's giving notice to
the Bank of the intention of the Borrower or any Restricted
Subsidiary to sell, lease, transfer or otherwise dispose of
assets, for value, in an amount up to 25% of Consolidated
Total Assets as of the last fiscal quarter end prior to such
notice, and to reinvest the proceeds within one year
following such transaction, the Borrower or any Restricted
Subsidiary may effect such transactions and the assets
involved shall not be included in any calculation under (i)
or (ii) above, unless (A) the Bank fails to consent to the
proposed transactions within 10 days following the giving of
said notice, provided that such consent may not be
unreasonably withheld, or (B) proceeds are not reinvested
within the one year period, in which case the assets
involved in the transaction shall be deemed transferred as
of the expiration of such one year period and included the
calculations set forth in (i) and (ii) above. Any breach of
the covenant expressed in this SECTION 13(e) may be cured by
the prepayment, without penalty, of an amount of the
outstanding amount of the Note as bears the same proportion
to the total outstanding amount of such Note as the net book
value of the assets conveyed in violation of this section
shall be to the Consolidated Total Assets of the Borrower as
of the last fiscal quarter end prior to such transaction.
(f) FISCAL YEAR. Change its Fiscal Year End.
14. OPINIONS AND NOTICE OF OTHER DEFAULT. The Borrower
shall furnish at the reasonable request of the Bank opinions of
legal counsel and certificates of its officers, satisfactory to
the Bank, regarding matters incident to this Agreement. In
addition, the Borrower shall give the Bank prompt written notice
of the occurrence of any Event of Default under the terms of this
Agreement and of a default or failure of performance under any
other material agreement or contract to which it is a party or by
which it is bound.
15. DOCUMENTARY STAMPS. If any documentary or recording
tax should be assessed or the affixing of any stamps be required
in connection with the borrowing hereunder or the security
therefor, by state or federal governments, the Borrower will pay
the tax and the cost of the stamps.
16. DEFAULT. The occurrence of any one or more of the
following Events of Default will constitute a default by the
Borrower under this Agreement, whereupon the Note and all
indebtedness of the Borrower to the Bank will, at the option of
the Bank, immediately become due and payable without
presentation, demand, protest, or notice of any kind, all of
which are hereby expressly waived, and the Borrower will pay the
reasonable attorney's fees incurred by the Bank in connection
with such default or recourse against any collateral held by the
Bank as security for the indebtedness owed by the Borrower:
(a) Non-payment when due, whether by acceleration or
otherwise, of any principal payment on the Note;
(b) Non-payment, within ten days after the due date,
of interest on the Note, or of any premium, fee or other
charge under this Agreement;
(c) A breach or failure of performance by the Borrower
or any subsidiary of any provision of this Agreement which
is not remedied within 30 days after written notice from the
Bank;
(d) A representation or warranty by the Borrower is
false or erroneous in any material respect on the date as of
which made;
(e) Borrower or a Restricted Subsidiary: (i) files a
petition or has a petition filed against it under the
Bankruptcy Code or any proceeding for the relief of
insolvent debtors; (ii) generally fails to pay its debts as
such debts become due; (iii) has a custodian appointed for
it or its assets; (iv) benefits from or is subject to the
entry of an order for relief by any court of insolvency; (v)
makes an admission of insolvency seeking the relief provided
in the Bankruptcy Code or any other insolvency law; (vi)
makes an assignment for the benefit of creditors; (vii) has
a receiver appointed, voluntarily or otherwise, for its
property; (viii) suspends business; (ix) permits a judgment
in the amount of $250,000 or more to be obtained against it
which is not subject to payment by applicable insurance
coverage or is not promptly paid or promptly appealed and
secured pending appeal; or (x) becomes insolvent, however
otherwise evidenced;
(f) Failure by Borrower or a Restricted Subsidiary to
pay when due, or within any applicable grace period, any
amount owing on account of indebtedness for money borrowed
or the failure by Borrower or a Restricted Subsidiary to
observe or perform any covenant or undertaking on its part
to be observed or performed in any agreement evidencing,
securing or relating to such indebtedness, resulting in any
such case in an event of default or acceleration by the
holder of such indebtedness of the date on which such
indebtedness would otherwise be due and payable; or
(g) If the Borrower or a Restricted Subsidiary shall
become a party to merger, consolidation or other
reorganization with any other Person (including a de facto
merger by which all or substantially all of the property or
assets of another Person are acquired) which results in a
change of control of the Borrower except:
(i) a merger with a Restricted Subsidiary or
other domestic Subsidiary in which the Borrower is the
surviving or continuing corporation,
(ii) a merger between or among Restricted
Subsidiaries, and
(iii) a merger, consolidation or other
reorganization through which the Borrower acquires a
business which becomes a Subsidiary of the Borrower,
provided that no Event of Default exists hereunder
after giving effect to such merger, consolidation or
other reorganization.
17. TERMINATION OF EXISTING CREDIT AGREEMENT. Upon the
initial Advance hereunder and the use thereof to pay all
indebtedness of the Borrower to the Bank under the Existing Note,
as set forth in SECTION 7 hereof, the Existing Note shall
immediately be marked "cancelled," and shall be of no further
force and effect, and shall promptly be returned by the Bank to
the Borrower, and the Existing Credit Agreement shall be deemed
terminated and be of no further force and effect.
18. GENERAL.
(a) All notices with respect to this Agreement shall
be deemed to be completed upon mailing first class,
certified or registered mail, postage prepaid, addressed as
follows or to such other address as the parties hereto shall
have been notified:
The Borrower: Ruddick Corporation
2000 Two First Union Center
Charlotte, North Carolina 28282
Attention: Vice President-Finance
The Bank: Wachovia Bank of North Carolina,
N.A.
400 S. Tryon Street
Corporate Banking, 6th Floor
Charlotte, North Carolina 28202
Attn: Kenneth R. Smith, Jr.
(b) No failure or delay by the Bank to exercise any
right, power or privilege hereunder shall operate as a
waiver of any such right, power or privilege, nor shall any
single or partial exercise of any right, power or privilege
preclude any other or future exercise thereof. The rights
and remedies herein provided are cumulative and not
exclusive of any rights or remedies provided by law.
(c) The provisions of this Agreement shall extend to
and be available to any subsequent holder of the Note, as
well as to the Bank.
(d) The Agreement and the Note shall be deemed to be
contracts made under, and for all purposes shall be
construed in accordance with, the laws of the State of North
Carolina.
[Signatures appear on following page]<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the year and day first above
written.
ATTEST: RUDDICK CORPORATION
\s\ DONALD B. WILLIFORD By:\S\ RICHARD N. BRIGDEN
Secretary Richard N. Brigden
Vice President-Finance
(Corporate Seal)
ATTEST: WACHOVIA BANK OF NORTH
CAROLINA, N.A.
/s/ E. THOMAS HARTSELL By:\S\ KENNETH R. SMITH, JR.
Assistant Secretary Senior Vice President
(Corporate Seal)
<PAGE>
EXHIBIT A
PROMISSORY NOTE
$33,333,333.00 February 15, 1995
Charlotte, North Carolina
FOR VALUE RECEIVED, RUDDICK CORPORATION (the "Borrower")
promises to pay to the order of WACHOVIA BANK OF NORTH CAROLINA,
N.A. (the "Bank"), at its main office in Charlotte, North
Carolina, the amount of the unpaid principal balance, not
exceeding $33,333,333.00, specified on the reverse hereof in
accordance with Section 2 of the Revolving Credit Agreement dated
of even date herewith among the Borrower and the Bank (as amended
and supplemented and in effect from time to time, the "Credit
Agreement") on the Termination Date or such earlier date as may
be required pursuant to the terms of the Credit Agreement, and to
pay interest at said office, from the date hereof, on the unpaid
principal balance owing hereunder, on the dates and at the rates
provided in the Credit Agreement. Interest on the Note after
default shall be determined based on the Base Rate plus 1%, but
not to exceed the highest rate permitted by applicable law. All
or any portion of the principal amount of such Loans may be
prepaid as provided in the Credit Agreement.
This Note is the Note referred to in the Credit Agreement,
and the terms and conditions set forth in the Credit Agreement
are incorporated herein by reference and shall be considered a
part hereof to the same extent as if written herein. All
capitalized terms used herein and not otherwise defined herein
shall have the meanings set forth in the Credit Agreement.
In addition to the provisions relating to occurrences of
other Events of Default set forth in the Credit Agreement, upon
(i) non-payment when due, whether by acceleration or otherwise,
of the outstanding principal amount hereof or (ii) non-payment,
within ten days after the due date thereof, of interest or of any
premium, fee or other charge under the Credit Agreement, the
entire principal amount and any accrued interest outstanding
under this Note shall, at the option of the holder thereof,
become immediately due and payable, without presentation, demand,
protest or notice of any kind, all of which are hereby expressly
waived by the Borrower, and the Borrower shall pay to the Bank
reasonable attorneys' fees in connection with such default or
recourse against any collateral held by the Bank as security for
the Borrower's indebtedness.
Interest hereunder shall be computed on the basis of a 360-
day year for the actual number of days in the interest period.
This Note shall be governed by, and construed in accordance
with, the law of the State of North Carolina.
All parties to this Note, including endorsers, sureties and
guarantors, if any, hereby waive presentment for payment, demand,
protest, notice of nonpayment or dishonor, and of protest, and
any and all other notices and demands whatsoever, and agree to
remain bound until the interest and principal are paid in full
notwithstanding any extension or extensions of time for payment
which may be granted even though the period of extension may be
indefinite, and notwithstanding any inaction by, or failure to
assert any legal right available to, the holder of this Note.
IN WITNESS WHEREOF, the Borrower has caused this Note to be
executed in its corporate name and its seal affixed hereto by its
duly authorized officers pursuant to a resolution of its Board of
Directors, or appropriate committee thereof, duly adopted, all as
of the date and year first above written.
RUDDICK CORPORATION
ATTEST:
______________________ By: _______________________
___________ Secretary Name: Richard N. Brigden
Title: Vice President - Finance
[SEAL]<PAGE>
EXHIBIT B
Opinion of Smith Helms Mulliss & Moore, L.L.P.
1. Each of the Borrower and American & Efird, Inc., Harris
Teeter, Inc., Jordan Graphics, Inc. and R. S. Dickson & Company
(each, a "Major Subsidiary") is a corporation duly organized,
existing and validly existing under the laws of the State of
North Carolina and has the corporate power to own its properties
and to carry on its business as now being conducted. To the best
of our knowledge after due inquiry, the Borrower is not engaged
in any activity that would require it to qualify to do business
in any jurisdiction other than North Carolina. While we have not
made any inquiry of governmental officials in any jurisdiction
other than North Carolina, we have no reason to believe that any
of the Major Subsidiaries as of the date hereof has failed to
qualify to do business in any foreign jurisdiction where the
failure to so qualify would have a materially adverse effect on
the consolidated financial condition of the Borrower and its
subsidiaries, taken as a whole.
2. The Borrower is duly authorized under all applicable
provisions of law to execute and deliver the Agreement and the
Note and all corporate action on its part required for the lawful
execution, delivery and performance thereof has been duly taken;
and the Note has been duly executed and delivered by the proper
officers of the Borrower and upon receipt by the Borrower of the
loan evidenced thereby will be entitled to the benefits of the
Agreement; and the Agreement and the Note are the legal, valid
and binding obligations of the Borrower, enforceable in
accordance with their terms, subject as to enforcement of
remedies to applicable bankruptcy, reorganization, insolvency,
moratorium, fraudulent conveyance or other similar laws affecting
the rights of creditors now or hereafter in effect, and to
equitable principles that may limit the right to specific
enforcement of remedies, and further subject to the application
of principles of public policy.
3. Neither the execution, creation or issuance of the
Agreement or the Note, nor the fulfillment of or compliance with
their terms, will conflict with, or result in a breach of the
terms, conditions or provisions of, or constitute a violation of
or default under, any applicable law, regulation, or writ or
decree or the Articles of Incorporation or Bylaws of the Borrower
or any of the Major Subsidiaries as of the date hereof, or, to
our knowledge, any agreement or instrument to which the Borrower
or any Major Subsidiary is a party, or, to our knowledge, create
any lien, charge or encumbrance upon any of the property or
assets of the Borrower or any Major Subsidiary pursuant to the
terms of any agreement or instrument to which the Borrower or any
Major Subsidiary is a party or by which they are bound.
4. No authorization, approval or consent of any regulatory
body is necessary or required in connection with the lawful
execution, delivery and performance of the Agreement or the Note
which has not been obtained.
RUDDICK CORPORATION
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
SIX MONTHS ENDED
----------------------------
APRIL 2, APRIL 3,
1995 1994
----------- -----------
NET INCOME PER SHARE COMPUTED
AS FOLLOWS:
PRIMARY:
1. Net Income $18,568,000 $13,709,000
=========== ===========
2. Weighted Average Common
Shares Outstanding 23,134,357 23,072,742
3. Incremental Shares Relating
to $.56 Convertible
Preference Shares - 366,725
4. Incremental Shares Under
Stock Options Computed
Under the Treasury Stock
Method Using the Average
Market Price of Issuer's
Stock During the Periods 182,069 280,720
----------- -----------
5. Weighted Average Common Shares
and Common Equivalent Shares
Outstanding 23,316,426 23,720,187
=========== ===========
6. Net Income Per Share
(Item 1 Divided by Item 5) $ 0.80 $ 0.58
=========== ===========
FULLY DILUTED:
1. Net Income $18,568,000 $13,709,000
2. Weighted Average Common
Shares Outstanding 23,134,357 23,072,742
3. Incremental Shares Relating
to $.56 Convertible
Preference Shares - 366,725
4. Incremental Shares Under
Stock Options Computed
Under the Treasury Stock
Method Using the Higher
of the Average or Ending
Market Price of Issuer's
Stock at the End of the
Periods 190,965 280,978
----------- -----------
5. Weighted Average Common
Shares and Common
Equivalent Shares 23,325,322 23,720,445
=========== ===========
6. Net Income Per Share
(Item 1 Divided by Item 5) $ 0.80 $ 0.58
=========== ===========
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
Ruddick Corporation
Financial Data Schedule for the three months ended 4/2/95
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> OCT-02-1994
<PERIOD-END> APR-02-1995
<CASH> 7,077,000
<SECURITIES> 0
<RECEIVABLES> 67,645,000
<ALLOWANCES> 1,394,000
<INVENTORY> 184,260,000
<CURRENT-ASSETS> 287,018,000
<PP&E> 574,371,000
<DEPRECIATION> 258,582,000
<TOTAL-ASSETS> 662,459,000
<CURRENT-LIABILITIES> 185,238,000
<BONDS> 120,531,000
<COMMON> 54,276,000
0
0
<OTHER-SE> 248,515,000
<TOTAL-LIABILITY-AND-EQUITY> 662,459,000
<SALES> 509,882,000
<TOTAL-REVENUES> 509,882,000
<CGS> 374,807,000
<TOTAL-COSTS> 114,280,000
<OTHER-EXPENSES> 2,262,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,724,000
<INCOME-PRETAX> 15,809,000
<INCOME-TAX> 5,507,000
<INCOME-CONTINUING> 10,302,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,302,000
<EPS-PRIMARY> 0.45
<EPS-DILUTED> 0.45
</TABLE>
