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EXHIBIT 10.1
AFTER RECORDING RETURN TO:
Xxxxxxxxxxx X. Xxxxxx, Esq.
Xxxxx, Day, Xxxxxx & Xxxxx
0000 XxxXxxxx Xxxxx
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
LEASE AGREEMENT
Dated as of April 26, 2001
Between
Wachovia Capital Investments, Inc.,
as the Lessor,
and
Krispy Kreme Doughnut Corporation
as the Lessee
This Lease Agreement is also a mortgage and security agreement between the
Lessee, Krispy Kreme Doughnuts, Inc., as mortgagor and debtor, and the Lessor,
Wachovia Capital Investments, Inc., as mortgagee and secured party, securing
indebtedness in the amount of thirty-five million and no/100 dollars
($35,000,000). The collateral subject to the security interest includes personal
property that is, or may become, fixtures attached to the real property
described in this Lease Agreement. This Lease Agreement should be filed and
recorded in the real estate records as a lease, mortgage and fixture filing.
Wachovia Capital Investments, Inc. should be indexed as the grantor of the lease
and the mortgagee of the mortgage and the grantee of the security interest.
Krispy Kreme Doughnut Corporation should be indexed as the grantee of the Lease
and the grantor of the mortgage and security interest.
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Addresses of Parties:
The addresses of the Lessee and Lessor are set forth on the signature pages
hereof.
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TABLE OF CONTENTS
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SECTION 1. DEFINED TERMS AND ACCOUNTING MATTERS......................................1
(a) Terms Defined Above.......................................................1
(b) Certain Defined Terms.....................................................1
(c) Accounting Terms and Determinations.......................................1
SECTION 2. LEASE OF FACILITY.........................................................2
SECTION 3. COMMITMENTS...............................................................3
(a) Advances..................................................................3
(b) Fundings of Advances......................................................3
(c) Changes of Commitments....................................................4
(d) Advances, Fees and Certain Other Amounts..................................4
(e) Funding Offices...........................................................4
SECTION 4. PAYMENTS..................................................................4
(a) Basic Rent................................................................4
(b) Supplemental Rent.........................................................5
(c) Computations..............................................................5
(d) No Offsets................................................................6
(e) Taxes.....................................................................6
(f) Payments to the Lessor....................................................8
SECTION 5. AGENCY AGREEMENT..........................................................8
SECTION 6. TITLE TO REMAIN IN THE LESSOR.............................................9
SECTION 7. MAINTENANCE OF THE FACILITY; OPERATIONS...................................9
SECTION 8. MODIFICATIONS............................................................10
SECTION 9. FURTHER ASSURANCES.......................................................11
SECTION 10. COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS AND INSURANCE REQUIREMENTS;
RELATED CONTRACTS........................................................11
SECTION 11. CONDITION AND USE OF FACILITY; QUIET ENJOYMENT...........................12
SECTION 12. LIENS....................................................................13
SECTION 13. PERMITTED CONTESTS.......................................................14
SECTION 14. INSURANCE, ETC...........................................................14
SECTION 15. TERMINATION; CANCELLATION; PURCHASE OPTION; APPLICATION OF PAYMENTS......16
SECTION 16. TRANSFER OF TITLE ON REMOVAL OF FACILITY; EXPENSES OF TRANSFER...........20
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TABLE OF CONTENTS
(continued)
PAGE
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SECTION 17. EVENTS OF DEFAULT AND REMEDIES...........................................22
SECTION 18. CHANGE IN THE LESSEE'S NAME OR STRUCTURE.................................26
SECTION 19. INSPECTION; RIGHT TO ENTER PREMISES OF THE LESSEE........................26
SECTION 20. RIGHT TO PERFORM THE LESSEE'S COVENANTS..................................26
SECTION 21. PARTICIPATION BY CO-LESSEES OR SUBLESSEES; PARTICIPATIONS BY LESSOR......26
SECTION 22. NOTICES..................................................................29
SECTION 23. AMENDMENTS AND WAIVERS...................................................29
SECTION 24. SEVERABILITY.............................................................29
SECTION 25. FEDERAL INCOME TAX CONSIDERATIONS........................................29
SECTION 26. OTHER PROVISIONS.........................................................30
(a) Change in Location of Collateral or the Lessee...........................31
(b) Documents; Collateral in Possession of Third Parties.....................31
(c) Sale, Disposition or Encumbrance of Collateral...........................31
(d) Proceeds of Collateral...................................................31
(e) Further Assurances.......................................................32
(f) Collateral Attached to Other Property....................................32
(g) Secured Amount...........................................................32
(h) Mortgage Remedies........................................................32
SECTION 27. YIELD PROTECTION AND ILLEGALITY..........................................32
(a) Basis for Determining Interest Rate Inadequate or Unfair.................32
(b) Illegality...............................................................33
(c) Increased Cost and Reduced Return........................................33
(d) Base Rate Substituted for Adjusted LIBO Rate.............................35
(e) Compensation.............................................................35
(f) Payments and Computations................................................36
(g) Limitation on Liability..................................................36
SECTION 28. CONDITIONS PRECEDENT.....................................................36
(a) Closing; Conditions Precedent to Effectiveness of this Lease.............36
(b) Conditions to Initial and Subsequent Advances............................37
(c) Conditions Precedent for the Benefit of Lessor...........................39
(d) Closing..................................................................39
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TABLE OF CONTENTS
(continued)
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SECTION 29. THE LESSEE'S REPRESENTATIONS AND WARRANTIES..............................39
(a) Corporate Existence and Power............................................39
(b) Corporate and Governmental Authorization.................................39
(c) Binding Effect...........................................................39
(d) Financial Information....................................................40
(e) No Litigation............................................................40
(f) Compliance with ERISA....................................................40
(g) Compliance with Laws; Payment of Taxes...................................40
(h) Investment Company Act...................................................41
(i) Public Utility Holding Company Act.......................................41
(j) Ownership of Property; Liens.............................................41
(k) No Default...............................................................41
(l) Full Disclosure..........................................................41
(m) Environmental Matters....................................................41
(n) Capital Stock............................................................44
(o) Use of Proceeds; Margin Stock............................................44
(p) Insolvency...............................................................44
(q) Facility Plan............................................................44
(r) Subsidiaries.............................................................44
SECTION 30. COVENANTS................................................................44
(a) Information..............................................................45
(b) Maintenance and Inspection of Property, Books and Records................46
(c) Maintenance of Existence.................................................47
(d) Consolidations, Mergers and Sales of Assets..............................47
(e) Dissolution..............................................................47
(f) Use of Proceeds..........................................................47
(g) Compliance with Laws; Payment of Taxes...................................47
(h) Insurance................................................................48
(i) Change in Fiscal Year....................................................48
(j) Maintenance of Property..................................................48
(k) Environmental Notices....................................................48
(l) Environmental Matters....................................................49
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TABLE OF CONTENTS
(continued)
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(m) Environmental Release....................................................49
(n) Transactions with Affiliates.............................................49
(o) Further Assurances.......................................................49
(p) Encroachments............................................................49
(q) Liens, Etc. on the Facility..............................................50
(r) Xxxx Xxxxx Xxxxxx Act Compliance.........................................50
(t) Investments..............................................................50
(u) Limitation on Liens......................................................51
(v) Fixed Charge Coverage Ratio..............................................52
(w) Leverage Ratio...........................................................52
(x) Minimum Consolidated Tangible Net Worth..................................52
(y) Consolidated Total Liabilities to Consolidated Tangible Net Worth........52
(z) Restricted Payments......................................................53
(aa) Additional Guarantors....................................................53
SECTION 31. MISCELLANEOUS............................................................53
(a) Entire Agreement.........................................................53
(b) Interpretation...........................................................53
(c) Governing Law; Submission to Jurisdiction................................53
(d) No Third Party Beneficiaries.............................................55
(e) Counterparts.............................................................55
(f) Waiver of Jury Trial.....................................................55
(g) Invalidity...............................................................55
(h) Usury....................................................................55
(i) Time of the Essence......................................................56
(j) Indemnification..........................................................56
(k) Confidentiality..........................................................60
(l) No Waiver; Remedies......................................................60
(m) Right of Set-Off.........................................................60
(n) References...............................................................61
(o) Successors; Survival.....................................................61
(p) Characterization.........................................................61
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SCHEDULES AND EXHIBITS
SCHEDULE 1(a) Facility Plan
SCHEDULE 1(b) Defined Terms
SCHEDULE 1(c) List of Process Equipment
SCHEDULE 4(a) Pricing Schedule
SCHEDULE 14 Insurance Requirements
SCHEDULE 28(b) Applicable Permits
SCHEDULE 29(m) Environmental Matters
SCHEDULE 29(r) Subsidiaries
SCHEDULE 30(t) Investment Policy
EXHIBIT A Description of Site
EXHIBIT B Form of Opinion of Lessee's and Guarantors' Counsel
EXHIBIT C Compliance Certificate
EXHIBIT D Form of Subsidiary Guaranty
EXHIBIT E Form of Contribution Agreement
EXHIBIT F Form of Parent Guaranty
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This Lease Agreement dated as of April 26, 2001, (as the same may be
amended, restated, modified or supplemented from time to time, this "Lease") is
between WACHOVIA CAPITAL INVESTMENTS, INC., a Georgia corporation (together with
its successors and permitted assigns, "WCI" or the "Lessor") and KRISPY KREME
DOUGHNUT CORPORATION, a North Carolina corporation (together with its successors
and permitted assigns, the "Lessee").
RECITALS
WHEREAS, the Lessor has acquired a leasehold interest in certain real
property in Effingham County, Illinois, described in greater detail on Exhibit A
(the "Site"), pursuant to the Ground Lease, and the Lessor and Lessee have
agreed pursuant to the Agency Agreement to construct certain Improvements on the
Site and acquire Process Equipment in accordance with the Facility Plan in order
to create a mix and distribution facility together with related enhancements and
improvements in accordance with the Facility Plan; and
WHEREAS, subject to the terms and conditions of this Lease, the Lessee
desires to lease from the Lessor the Facility beginning on the Lease
Commencement Date for the purpose of occupying and using the Facility in
accordance with the terms and conditions set forth in this Lease.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Lessor and the Lessee agree as follows:
Section 1. Defined Terms and Accounting Matters.
(a) Terms Defined Above. In this lease, the terms "Lease,"
"Lessee," and "Lessor," shall have the meanings indicated above.
(b) Certain Defined Terms. As used in this Lease, all other
capitalized terms shall have the meanings assigned such terms in Schedule 1(b)
attached hereto and by reference made a part hereof.
(c) Accounting Terms and Determinations. Unless otherwise
specified herein, all terms of an accounting character used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared, in
accordance with GAAP, applied on a basis consistent (except for changes
concurred in by the Lessee's independent public accountants or otherwise
required by a change in GAAP) with the most recent audited consolidated
financial statements of the Lessee and its Consolidated Subsidiaries delivered
to the Lessor unless with respect to any such change concurred in by the
Lessee's independent public accountants or required by GAAP, in determining
compliance with any of the provisions of this Lease or any of the other
Operative Documents: (a) the Lessee shall have objected to determining such
compliance on such basis at the time of delivery of such financial statements,
or (b) the Lessor shall so object in writing within 30 days after the delivery
of such financial statements, in either of which events such calculations shall
be made on a basis consistent with those used in the preparation of the latest
financial statements as to which such objection shall not have been made (which,
if objection is made in respect of the first financial
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statements delivered under Section 30(a) of the Lease, shall mean the financial
statements referred to in Section 29(d)).
Section 2. Lease of Facility.
(a) During the term of and subject to the terms and conditions
of this Lease, the Lessor hereby leases to the Lessee, and the Lessee hereby
leases from the Lessor, the Facility for the Lease Term to be occupied and used
(i) to cause Completion of the Facility during the portion of the Lease Term
comprising the Construction Term in accordance with the Agency Agreement and
(ii) for and only for the Permitted Use with respect to the Basic Term. The
entire Facility shall become subject to this Lease as of the effective date
hereof; provided that the Lessor will deliver possession of the Facility to
Lessee for occupancy and operation in accordance with the Permitted Use in
conjunction with and to the extent permitted by certificates of occupancy issued
by the applicable Governmental Authority.
(b) Unless earlier terminated in accordance with the other
provisions hereof, including without limitation, Sections 15 and 17, this Lease
shall terminate on the Scheduled Lease Termination Date. On any day that is not
less than 12 months and not more than 18 months prior to the then current
Scheduled Lease Termination Date, the Lessee, may request in writing to the
Lessor that the then current Scheduled Lease Termination Date be extended for a
period up to 5 years. Any such extension shall require the written consent of
the Lessor acting in its sole and absolute discretion. In the event such an
extension is requested and the requirements set forth in the immediately
preceding sentence are met, such extension shall be effective upon the execution
of documentation evidencing the same and containing such additional terms as the
Lessee and the Lessor (each acting in its sole discretion) may agree. If the
Lessor shall fail to respond to the Lessee's written request for extension
within 60 days of receipt, such failure to respond shall be deemed a denial of
such request for extension. The Lessee may request only two extensions of the
Scheduled Lease Termination Date.
(c) Not less than 12 months prior to the Scheduled Lease
Termination Date, the Lessee shall notify the Lessor in writing which of the
options under Section 15(a)(ii) of this Lease the Lessee intends to exercise. In
the event the Lessee fails to give timely written notice to the Lessor on or
before the date herein provided, the Lessee shall be deemed to have elected to
purchase the Facility on the Lease Termination Date for the Termination Value.
Such election will be consummated upon the Scheduled Lease Termination Date
unless the Lessee elects the Sale Option following the occurrence of a
Cancellation Event or Termination Event.
(d) If it is determined at any time that the term of this
Lease will not be extended beyond the original Scheduled Lease Termination Date,
or if a Cancellation Event or Termination Event occurs, the Lessee shall give to
the Lessor written notice as provided below specifying which of the options
under Section 15(a)(ii) or 15(b)(ii), as applicable, of this Lease the Lessee
intends to exercise upon the applicable Lease Termination Date:
(i) if the Scheduled Lease Termination Date is not
to be extended because the Lessor has refused or is deemed to have
refused the Lessee's request for extension, then the Lessee shall give
the Lessor notice of such election within 30 days of
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the earlier to occur of (A) the date the Lessee receives written notice
of said refusal or (B) the date of such deemed refusal pursuant to
Section 2(b) above;
(ii) if the Scheduled Lease Termination Date is not
to be extended because the Lessee chooses not to request such
extension, the Lessee shall give the Lessor notice of such election on
any date that is not less than 12 months and no more than 18 months
prior to the then current Scheduled Lease Termination Date; and
(iii) if the Lessor declares a Cancellation Event or
Termination Event, the Lessee shall give the Lessor notice of such
election within 5 Business Days of the date the Lessee receives written
notice of the Lessor's declaration of such Cancellation Event or
Termination Event.
In the event the Lessee fails to give timely written notice to the
Lessor on or before the date herein provided, the Lessee shall be deemed to have
elected to purchase the Facility on the Lease Termination Date for the
Termination Value.
Section 3. Commitments.
(a) Advances. The Lessor agrees, on the terms and conditions
of this Lease, to make Advances to the Lessee during the period from and
including the later of (y) the Initial Funding Date or (z) the date that the
Lessor becomes a party to this Lease as provided in Section 21(d), up to and
including the Completion Date, in an aggregate principal amount at any one time
outstanding up to but not exceeding the amount of the Lessor's Commitment;
provided, however, that the aggregate principal amount of all Advances by the
Lessor under this Section 3(a) at any one time outstanding shall not exceed the
lesser of (y) one hundred percent (100%) of the Facility Cost as incurred or
invoiced or (z) the Commitment. All Advances shall be utilized only for items of
Facility Cost, which utilization shall be evidenced to the Lessor's satisfaction
simultaneously with and as a condition to each Advance.
(b) Fundings of Advances.
(i) The Lessee, as Acquisition/Construction Agent
for the Lessor, from time to time as the Lessee may determine in
accordance with this Lease and the Agency Agreement, shall give the
Lessor notice of a requested funding of Advances by the Lessor (an
"Advance Notice"), which shall be given by telecopy or telephone (and
if by telephone, confirmed promptly by telecopy), to be received by the
Lessor not later than 12:00 noon, Atlanta, Georgia time, on the third
(3rd) Business Day before the requested date of such Advances, which
Advance Notice shall be irrevocable and effective only upon receipt by
the Lessor and shall specify the aggregate amount and the date of the
Advances to be funded and specify in reasonable detail the purpose for
which such Advance is requested. Once given, an Advance Notice may be
revoked only upon payment of any amounts due to the Lessor under
Section 27(e). The amounts so requested shall be made available to the
Acquisition/Construction Agent by depositing the same, in immediately
available funds, in an account of the Acquisition/Construction Agent
designated by it and maintained with the Lessor at its Funding Office,
not later
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than 4:30 p.m. on the date of requested Advance. There shall be no more
than one Advance per calendar month.
(ii) All Advances under Section 3(b)(i) shall be in
amounts of at least $500,000 or in integral multiples of $100,000 in
excess thereof, or the remaining balance of the Commitment, if less.
(c) Changes of Commitments. The Lessee shall have the right to
terminate or to reduce the amount of, or, prior to utilization thereof,
terminate, the Commitment at any time or from time to time upon not less than 3
Business Days' prior written notice to the Lessor of each such termination or
reduction, which notice shall specify the effective date thereof and the amount
of any such reduction (which shall not be less than $5,000,000 or any multiple
of $1,000,000 in excess thereof) and shall be irrevocable and effective only
upon receipt by the Lessor. The Commitment once terminated or reduced may not be
reinstated. In no event shall the Commitment be reduced below the outstanding
principal amount of the Advances.
(d) Advances, Fees and Certain Other Amounts.
(i) The Lessee shall pay, or cause to be paid, to
the Lessor, from the proceeds of Advances, as soon as adequate GAAP
Facility Costs have been incurred such that the maximum guarantee test
under EITF 97-10 would not be violated by such payment, the fees
specified in the Engagement Letter.
(ii) Notwithstanding anything to the contrary
contained in the Operative Documents (including any reference to the
"Lessee's sole cost and expense," the "Lessee's expense", or any
similar phrase), during the Construction Term Advances (to the extent
available under the Commitment) and condemnation and insurance proceeds
shall be used to pay any amounts required to be paid by the Lessee
under the Operative Documents and such amounts do not reflect direct
obligations of the Lessee (including, without limitation, all amounts
payable by the Lessee pursuant to Sections 4(b), 4(e), 7, 8, 9, 10,
11(b), 12, 13, 14(a), 14(d), 20, 26(e), 27, 30(o), and 31(j) of this
Lease); provided, however, that the Lessor shall have full recourse
against the Lessee pursuant to Section 31(j) for environmental claims
and Fully Indemnifiable Events.
(e) Funding Offices. The Advances made by the Lessor shall be
made and maintained at the Lessor's Funding Office therefor.
Section 4. Payments.
(a) Basic Rent. Basic Rent shall accrue on the outstanding
principal balance of Facility Cost outstanding from time to time during each
Rental Period at a rate per annum equal to the sum of (i) the Adjusted LIBO Rate
prevailing on the first day of such Rental Period plus the Applicable Margin,
plus (ii) during the Construction Term, a fee (the "Commitment Fee") at a rate
equal to the Commitment Fee Rate times the averaged daily unused amount of the
Commitment; provided, that if there is less than 1 month remaining after the end
of any Rental Period until the Scheduled Lease Termination Date, Basic Rent for
such final Rental Period shall
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instead be determined on the basis of the Base Rate. The Lessee may, on at least
one Business Days' notice to the Lessor, prepay any outstanding principal of
Facility Cost in whole at any time, or from time to time in part in amounts
aggregating at least $500,000, together with accrued Basic Rent thereon to the
date of prepayment, provided, that in the event any outstanding principal of
Facility Cost on which Basic Rent accrued based on the Adjusted LIBO Rate is
prepaid other than on the last day of the Rental Period with respect thereto
(including by reason of the occurrence of the Lease Termination Date), the
Lessee shall compensate the Lessor for any funding losses incurred by them as a
result of such prepayment pursuant to Section 27(e). Each such optional
prepayment shall be applied to the outstanding principal balance of the Facility
Cost funded by the Lessor. On each Rent Payment Date occurring on or before the
Completion Date, all Basic Rent accrued during the Rental Period then ended
shall be capitalized and added to Facility Cost. After the Completion Date, the
Lessee's Basic Rent shall be payable to the Lessor in arrears on each Rent
Payment Date.
(b) Supplemental Rent. In addition to Basic Rent, the Lessee
will pay to the Lessor from time to time, upon demand by the Lessor, as
additional rent ("Supplemental Rent"), the following (but without duplication of
any amounts included in the calculation of Rent):
(i) all out-of-pocket costs and expenses reasonably
incurred by the Lessor in connection with the preparation, negotiation,
execution, delivery, performance and administration of this Lease and
the other Operative Documents, including, but not limited to, the
following: (A) fees and expenses of the Lessor, including, without
limitation, reasonable attorneys' fees and expenses and the fees and
expenses for the Approved Appraisal, the Related Contracts and the
Surveys, the Environmental Assessment, the Soil Test Reports, the title
policy referred to in Section 28(a)(xi), (B) all other amounts owing to
the Lessor pursuant hereto or any other Operative Document, including,
without limitation, fees, indemnities, expenses, compensation in
respect of increased costs of any kind or description payable under
this Lease or any other Operative Document; (C) all yield maintenance,
capital adequacy and other costs contemplated under Section 27 and (D)
all out-of-pocket costs and expenses incurred by the Lessor (including,
without limitation, reasonable attorneys' fees and expenses and other
expenses and disbursements reasonably incurred) associated with (1)
negotiating and entering into, or the giving or withholding of, any
future amendments, supplements, waivers or consents with respect to
this Lease; (2) any Loss Event, Casualty Occurrence or termination of
this Lease; and (3) any Default or Event of Default and the enforcement
and preservation of the rights or remedies of the Lessor under this
Lease and the other Operative Documents; and
(ii) all other amounts that the Lessee agrees herein
to pay other than Basic Rent and amounts described in clause (i) above.
(c) Computations. All computations of Basic Rent shall be made
by the Lessor on the basis of a year of 360 days (or, in the case of
computations based on the Prime Rate, 365/366 days), in each case for the actual
number of days (including the first day but excluding the last day) occurring in
the Rental Period for which such Basic Rent payments are payable.
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(d) No Offsets. This Lease is an absolute net lease, and Rent
and all other sums payable by the Lessee hereunder shall be paid without notice
except as otherwise expressly provided herein, and the Lessee shall not be
entitled to any abatement, reduction, setoff, counterclaim, defense or deduction
with respect to any Rent or other sums payable hereunder. The obligations of the
Lessee to pay Rent and all other sums payable hereunder shall not be affected by
reason of: (i) except as provided in Section 14 hereof, any damage to, or
destruction of, the Facility or any part thereof by any cause whatsoever
(including, without limitation, fire, casualty or act of God or enemy or any
other Force Majeure Event); (ii) except as provided in Section 14 hereof, any
condemnation, including, without limitation, a temporary condemnation of the
Facility or any part thereof; (iii) any prohibition, limitation, restriction or
prevention of the Lessee's use, occupancy or enjoyment of the Facility or any
part thereof by any Person (other than by the Lessor in violation of this
Lease); (iv) any matter affecting title to the Facility or any part thereof; (v)
any eviction of the Lessee from, or loss of possession by the Lessee of, the
Facility or any part thereof, by reason of title paramount or otherwise (other
than by the Lessor in violation of this Lease); (vi) any default by the Lessor
hereunder or under any other of the Operative Documents; (vii) the invalidity or
unenforceability of any provision hereof or the impossibility or illegality of
performance by the Lessor or the Lessee or any of them; (viii) except as
provided in Section 14 hereof, any action of any Governmental Authority; or (ix)
except as provided in Section 14 hereof, any other Loss Event, Casualty
Occurrence or other cause or occurrence whatsoever, whether similar or
dissimilar to the foregoing. The Lessee shall remain obligated under this Lease
in accordance with its terms and shall not take any action to terminate, rescind
or avoid this Lease, except as expressly provided in Sections 14 and 15
notwithstanding any bankruptcy, insolvency, reorganization, liquidation,
dissolution or other proceeding affecting the Lessor or any action with respect
to this Lease which may be taken by any trustee, receiver or liquidator or by
any court. The Lessee waives all rights to terminate or surrender this Lease,
except as expressly provided in Section 15, or to any abatement or deferment of
Rent or other sums payable hereunder. The Lessee hereby waives any and all
rights now or hereafter conferred by law or otherwise to modify or to avoid
strict compliance with its obligations under this Lease. All payments made to
the Lessor hereunder as required hereby shall be final and irrevocable, and the
Lessee shall not seek to recover any such payment or any part thereof for any
reason whatsoever, absent manifest error.
(e) Taxes. Subject to the Lessee's contest rights under
Section 13, all payments of Rent, fees and all other amounts to be paid by the
Lessee hereunder to the Lessor shall be made without deduction for, and free
from, any taxes, imposts, levies, duties, deductions or withholdings of any
nature now or at any time hereafter imposed by any Governmental Authority or by
any taxing authority thereof or therein imposed or levied upon, assessed against
or measured by any Rent, fees or other sums payable hereunder excluding taxes
imposed on or measured by the gross or net receipts or gross or net income,
capital or net worth of the Lessor, and franchise taxes imposed on the Lessor by
the jurisdiction under the laws of which the Lessor is organized or any
political subdivision thereof, and taxes imposed on or measured by its income,
and franchise taxes imposed on it, by the jurisdiction of the Lessor's Funding
Office or any political subdivision thereof and other than any tax arising by
reason of a connection between the Lessor or the Lessor's Funding Office and the
jurisdiction imposing such tax other than the making and performance by the
Lessor of this Lease (all such non-excluded taxes, imposts, levies, duties,
deductions or withholdings of any nature being "Taxes"). In the event that the
Lessee is required by applicable law to make any such withholding or deduction
of
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Taxes with respect to any Rent, fees or other amount, the Lessee shall pay such
deduction or withholding to the applicable taxing authority, shall promptly
furnish to the Lessor in respect of which such deduction or withholding is made
all receipts and other documents evidencing such payment and shall pay to the
Lessor additional amounts as may be necessary in order that the amount received
by the Lessor after the required deduction or withholding shall equal the amount
the Lessor would have received had no such deduction or withholding been made.
In addition, the Lessee agrees that it will promptly pay all other Impositions
imposed upon or levied or assessed against the Facility or any part thereof, or
against the Lessor in connection with the transactions contemplated by this
Lease and the other Operative Documents, or any sums levied in connection with
the execution, delivery or recording of the Operative Documents, and will
furnish to the Lessor upon request copies of official receipts or other proof
evidencing such payment; provided, however, that the Lessee shall not be
obligated to pay (i) any Impositions that are excluded from the definition of
Taxes; (ii) any Impositions attributable to the gross negligence or willful
misconduct of the Lessor or breach of any of the representations, warranties and
covenants of the Lessor under this Lease Agreement and the Operative Documents;
(iii) Taxes imposed on or against or with respect to the Lessor as a result of
any voluntary or involuntary sale, assignment, transfer or other disposition (a
"Transfer") by the Lessor of all or any portion of the Facility, the Lease or
any other interest created under the Operative Documents, other than any
Transfer (I) in pursuance of remedies while an Event of Default has occurred and
is continuing, (II) pursuant to the Lessee's exercise of any rights or
obligations under the Operative Documents (including the Sale Option), or (III)
in connection with the closing on the Closing Date; or (iv) Taxes imposed on or
against or with respect to the Lessor that would not have been imposed but for
any failure of the Lessor or any of its Affiliates to comply with any
certification, information, documentation, reporting or other similar
requirements if such compliance is so timely requested by the Lessee in writing,
Lessee provides any information in its possession which is necessary for the
requested action, and such compliance is required by statute or by the
regulation of the jurisdiction imposing such Taxes as a precondition to relief
or exemption from such Taxes. The Lessee further agrees that, subject to its
contest rights under Section 13, it will, at its expense, do all things required
to be done by the Lessor in connection with the levy, assessment, billing or
payment of any Impositions that it is required to pay pursuant to the preceding
sentence, and is hereby authorized by the Lessor to act for and on its behalf in
any and all such respects and to prepare and file, on behalf of the Lessor all
tax returns and reports required to be filed by the Lessor (other than federal
income tax returns and documents related thereto, subject to Section 25)
concerning the Facility. The Lessee's payment obligations under this Section
4(e) shall survive the termination of this Lease. In the event that any
withholding or deduction from any payment to be made by the Lessee hereunder is
required in respect of any Imposition which the Lessee is required to pay
pursuant to this Section 4(e), then the Lessee will:
(A) pay directly to the relevant Governmental
Authority the full amount required to be so withheld or
deducted;
(B) promptly forward to the Lessor, if available, an
official receipt or other documentation satisfactory to the
Lessor evidencing such payment to such Governmental Authority;
and
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(C) pay to the Lessor such additional amount or
amounts as is necessary to ensure that the net amount actually
received by the Lessor will equal the full amount the Lessor
would have received had no such withholding or deduction been
required.
In the event the Lessor receives a refund from the authority to which
such Taxes were paid of any Taxes paid by the Lessee pursuant to this Section
4(e), it will pay to the Lessee the amount of such refund promptly upon receipt
thereof; provided, however, if at any time thereafter the Lessor is required to
return such refund, the Lessee shall promptly repay to it the amount of such
refund.
Nothing in this Section 4(e) shall require the Lessor to disclose any
information about its tax affairs or interfere with, limit or abridge the right
of the Lessor to arrange its tax affairs in any manner in which it desires.
Without prejudice to the survival of any other agreement of the Lessor
and the Lessee hereunder, the agreements and obligations of the Lessor and the
Lessee contained in this Section 4(e) shall be applicable with respect to the
Lessor and any assignee or participant of the Lessor, and any calculations
required by such provisions (i) shall be made based upon the circumstances of
the Lessor, assignee or participant (subject to Section 21) and (ii) shall
constitute a continuing agreement and shall survive for a period of 3 years
after the termination of this Lease and the payment in full of all Rent, fees
and other payments hereunder and under the other Operative Documents.
(f) Payments to the Lessor.
(i) All payments by the Lessee pursuant to this
Lease shall be made to the Lessor and shall be made not later than
12:00 noon, Atlanta, Georgia time, on the date due, in immediately
available funds, to such account with the Lessor as it shall specify
from time to time by notice to the Lessee. Whenever any payment to be
made shall otherwise be due on a day which is not a Business Day,
except as otherwise expressly provided herein, such payment shall be
made on the next succeeding Business Day and such extension shall be
included in computing Rent, fees and other amounts, if any, in
connection with such payment; provided, however, that if such extension
would cause any payment of Basic Rent to be made in the next following
calendar month, such payment shall be made on the next preceding
Business Day.
(ii) The Lessee shall pay on demand to the Lessor
interest at the Default Rate on all amounts payable by the Lessee to
the Lessor hereunder or any of the other Operative Documents, from the
due date thereof until paid in full.
Section 5. Agency Agreement. The Lessee is entering into the Agency
Agreement with the Lessor pursuant to which the Lessee will act as the
Acquisition/Construction Agent for the Lessor in causing the completion of
certain enhancements and improvements to, and the purchase, manufacture,
construction, improvement, renovation, assembly and installation of the
Facility, including negotiation and performance of all Related Contracts,
obtaining all Applicable Permits and complying with all Governmental
Requirements (including all Environmental
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Requirements) relating to the Facility. Upon funding pursuant to the Agency
Agreement, title to all components of the Facility purchased with such funding
shall be and remain in the Lessor and such components shall be subject to the
terms and conditions of this Lease. The Facility and all components thereof
shall be purchased, manufactured, constructed, improved, renovated, assembled or
installed, as applicable, in accordance with Related Contracts entered into by
the Lessee pursuant to the Agency Agreement.
Section 6. Title to Remain in the Lessor. The Lessor shall own 100% of
the legal and beneficial interest in the Facility. All accessories, equipment,
parts, fixtures and devices affixed or placed on the Facility from time to time
by the Lessee, and all modifications, alterations, renovations or improvements
to the Facility made by the Lessee shall be and become part of the Facility for
all purposes of this Lease and shall be Property of the Lessor and subject to
the terms of this Lease (except for Excluded Equipment not financed pursuant to
this Lease); provided that the Lessor's interest in any part of the Facility
that is replaced by the Lessee pursuant to and as permitted by the terms of this
Lease shall be deemed released from this Lease and thereupon become the Property
of the Lessee automatically, without further action by the Lessor, and the
Lessor shall perform all acts and execute all documents that the Lessee
reasonably requests to give effect to the foregoing at the expense of the
Lessee, including the execution and delivery of bills of sale and other
documents of transfer. This Lease shall not give or grant to the Lessee any
right, title or interest in or to the Facility, except the rights expressly
conferred by this Lease.
Section 7. Maintenance of the Facility; Operations.
(a) The Lessee shall, and it shall require and cause any and
all employees, contractors, subcontractors, agents, representatives, affiliates,
consultants and occupants at the Lessee's own cost and expense to: (i) cause the
Facility to be maintained in all material respects in good operating order,
repair and condition, in accordance with prudent industry practice and any
applicable manufacturer's or supplier's manuals or warranties, subject to normal
wear and tear, and take all action, and make all changes and repairs, structural
and non-structural, foreseen and unforeseen, ordinary and extraordinary, which
are required pursuant to any Governmental Requirement or Insurance Requirement
at any time in effect to assure full compliance therewith in all material
respects; and (ii) do all things necessary to prevent the incurrence of any
Environmental Damages or Environmental Liabilities relating to the Facility or
any business conducted in or relating to the Facility or the Site, and cause the
Facility to continue to have at all times, in all material respects, and in
compliance with all applicable Governmental Requirements and Insurance
Requirements, the capacity and functional ability to perform, on a continuing
basis (subject to normal interruption in the ordinary course of business for
maintenance, inspection, service, repair and testing) and in commercial
operation, the functions for which it was designed as specified in the Facility
Plan and to be utilized commercially for the Permitted Use.
(b) The Lessee shall, and it shall require and cause any and
all employees, contractors, subcontractors, agents, representatives, affiliates,
consultants and occupants at the Lessee's own cost and expense to, promptly
replace, or cause to be replaced, any part of the Facility which may from time
to time be incorporated or installed in or attached to the Facility, and which
may from time to time become worn out, lost, stolen, destroyed, seized,
confiscated, damaged beyond repair, obsolete or permanently rendered unfit for
use for any reason whatsoever. All accessions and replacement parts shall be
free and clear of all Liens other than
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Permitted Liens, and, except for temporary replacement parts utilized pending
installation of permanent replacement parts, shall be of a type customarily used
in the industry at such time for such purpose, shall be in as good operating
condition as, and shall have a utility and useful life at least equal to, the
parts replaced (assuming such replaced parts were in the condition and repair
required to be maintained by the terms hereof) and shall have a value at least
equal to the parts replaced (assuming such replaced parts were in the condition
and repair required to be maintained by the terms hereof).
(c) Notwithstanding the provisions of Section 8 and the
foregoing provisions of this Section 7, the Lessee shall not (except as may be
required by any Governmental Requirement) remove, replace or alter any part of
the Facility or affix or place any accessory, equipment, part or device on any
part of the Facility if such removal, replacement, alteration or addition would
impair the originally intended function or use of the Facility so as to
materially reduce the value of the Facility taken as a whole, or materially
decrease the estimated useful life of the Facility.
(d) The Lessor shall not be required in any way to maintain,
repair or rebuild the Facility or any part thereof and the Lessee waives any
right it may now or hereafter have to make any repairs at the expense of the
Lessor pursuant to any Governmental Requirement at any time in effect or
otherwise.
(e) The Lessee shall, and it shall require and cause any and
all employees, contractors, subcontractors, agents, representatives, affiliates,
consultants and occupants at the Lessee's own cost and expense to: (i) comply
with all applicable Environmental Requirements with regard to the Facility and
all parts thereof; and (ii) use, employ, process, emit, generate, store, handle,
transport, dispose of and/or arrange for the disposal of, any and all Hazardous
Materials in, on or, directly or indirectly, related to or in connection with
the Facility or any part thereof in a manner consistent with prudent industry
practice and in compliance with any applicable Environmental Requirement. The
Lessor and the Lessee hereby acknowledge and agree that the Lessee's obligations
hereunder with respect to Environmental Requirements are intended to bind the
Lessee with respect to matters and conditions involving the Facility or any part
thereof.
Section 8. Modifications.
(a) The Lessee shall make no modifications, alterations,
renovations or improvements to the Facility without the prior written consent of
the Lessor, provided however, that subject to the terms of Section 8(b), the
Lessee shall have the right to make modifications, alterations, renovations or
improvements to the Facility so long as such modifications, alterations,
renovations or improvements do not (except as may be required by any
Governmental Requirement) (i) materially reduce the value of the Facility as a
whole; (ii) materially and adversely affect the capacity and performance of the
Facility on a continuing basis in commercial operation of the function for which
the Facility was designed as specified in the Facility Plan; (iii) materially
deviate from the Facility Plan; or (iv) materially and adversely affect the
estimated useful life of the Facility. Within 10 Business Days of the end of
each calendar quarter, an Authorized Officer of the Lessee shall deliver to the
Lessor a schedule certifying to the Lessor's satisfaction: (x) the nature of the
repairs, replacements, modifications,
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alterations, renovations or improvements to the Facility made during such
quarter having a cost of at least $250,000 at the time made, and (y) that the
Facility continues to have, in all material respects, the capacity and
functional ability to perform on a continuing basis (subject to normal
interruption in the ordinary course of business for maintenance, inspection,
service, repair and testing) and in commercial operation, the functions for
which it was designed as specified in the Facility Plan or, if not, specifying
the reason for any such deficiency, including, without limitation, the
occurrence and nature of any Loss Event or Casualty Occurrence with respect to
the Facility.
(b) If the Lessee determines that any part of the Facility is
no longer necessary for the performance of the Facility on a continuing basis in
commercial operation of the function for which the Facility was designed as
specified in the Facility Plan, then the Lessee (except when such action or
removal may be required by any applicable Governmental Requirement, in which
event, the Lessee shall promptly give the Lessor notice of such action or
removal) shall give the Lessor at least 30 days' notice prior to taking any
action as the result of such determination and shall not remove any such part
unless and until the Lessor has determined that (i) such part is no longer
necessary for the performance of the Facility on a continuing basis in
commercial operation of the function for which the Facility was designed in all
material respects as specified in the Facility Plan; (ii) removal of such part
does not materially reduce the value of the Facility as a whole; and (iii)
removal of such part does not materially decrease the estimated useful life of
the Facility. This Section 8(b) shall not apply to worn out or obsolete Property
or damaged Property (to the extent such damage does not constitute a Casualty
Occurrence or Loss Event) removed and replaced by the Lessee in accordance with
Section 7(b).
Section 9. Further Assurances. The Lessee, at its expense, shall
execute, acknowledge and deliver from time to time such further counterparts of
this Lease or such affidavits, certificates, certificates of title, bills of
sale, financing and continuation statements, consents and other instruments as
may be required by applicable law or reasonably requested by the Lessor in order
to evidence the Lessor's title to the Facility and the Lessor's interests in
this Lease, and shall, at the Lessee's expense, cause such documents to be
recorded, filed or registered in such places as the Lessor may request and to be
re-recorded, re-filed or re-registered in such places as may be required by
applicable law or at such times as may be required by applicable law in order to
maintain and continue in effect the recordation, filing or registration thereof.
Section 10. Compliance with Governmental Requirements and Insurance
Requirements; Related Contracts. The Lessee, at its expense, will comply in all
material respects with all Governmental Requirements applicable to the Facility
or any part thereof or the ownership, construction, operation, mortgaging,
possession, use, non-use or condition of the Facility or any part thereof, all
Insurance Requirements, and all instruments, contracts or agreements affecting
title to or ownership of the Facility or any part thereof. In addition, the
Lessee, so long as no Event of Default has occurred and is continuing, is hereby
authorized by the Lessor to, and shall, fully and promptly keep, observe,
perform and satisfy in all material respects on behalf of the Lessor any and all
obligations, conditions, covenants and restrictions of or on the Lessor or the
Lessee under any and all Related Contracts so that there will be no default
thereunder and so that the other parties thereunder shall be, and remain at all
times, obliged to perform their obligations thereunder, and the Lessee, to the
extent within its control, shall not permit to exist any
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condition, event or fact that could allow or serve as a basis or justification
for any such Person to avoid such performance.
Section 11. Condition and Use of Facility; Quiet Enjoyment.
(a) THE FACILITY IS LEASED AND THE LESSEE ACCEPTS AND TAKES
POSSESSION OF THE FACILITY AS IS, WHERE IS, AND WITH ALL FAULTS AND IN THE
CONDITION THEREOF AND SUBJECT TO RIGHTS OF ANY PARTIES IN POSSESSION THEREOF,
THE STATE OF THE TITLE THERETO, THE RIGHTS OF OWNERSHIP THEREIN, AND SUBJECT TO
ALL GOVERNMENTAL REQUIREMENTS NOW IN EFFECT OR HEREAFTER ADOPTED, IN EACH CASE
AS IN EXISTENCE WHEN THE SAME FIRST BECOMES SUBJECT TO THIS LEASE, WITHOUT
REPRESENTATIONS AND WARRANTIES OF ANY KIND AS TO TITLE BY THE LESSOR OR ANY
PERSON ACTING ON BEHALF OF IT. THE LESSEE ACKNOWLEDGES AND AGREES THAT THE
FACILITY HAS NOT BEEN SELECTED BY THE LESSOR, THAT THE LESSOR HAS NOT SUPPLIED
ANY SPECIFICATIONS WITH RESPECT TO THE FACILITY AND THAT THE LESSOR (I) IS NOT A
VENDOR OF, OR MERCHANT OR SUPPLIER WITH RESPECT TO, ANY OF THE PROPERTY
COMPRISING THE FACILITY OR ANY PROPERTY OF SUCH KIND, (II) HAS NOT MADE ANY
RECOMMENDATION, GIVEN ANY ADVICE OR TAKEN ANY OTHER ACTION WITH RESPECT TO THE
CHOICE OF ANY MANUFACTURER, SUPPLIER OR TRANSPORTER OF, OR ANY VENDOR OF OR
OTHER CONTRACTOR, INCLUDING, WITHOUT LIMITATION, WITH RESPECT TO ANY OF THE
PROPERTY COMPRISING THE FACILITY, (III) HAS NOT AT ANY TIME HAD PHYSICAL
POSSESSION OF ANY SUCH PROPERTY, (IV) HAS NOT MADE OR IS NOT MAKING ANY
WARRANTY, EXPRESS OR IMPLIED, RELATING TO THE FACILITY, INCLUDING WITHOUT
LIMITATION, WITH RESPECT TO TITLE, MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE OR OTHERWISE, THE DESIGN, CONDITION, QUALITY OF MATERIAL OR WORKMANSHIP,
CONFORMITY TO SPECIFICATIONS, FREEDOM FROM PATENT OR TRADEMARK INFRINGEMENT,
ABSENCE OF ANY LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, WHETHER
ARISING PURSUANT TO THE UCC OR ANY OTHER PRESENT OR FUTURE LAW OR OTHERWISE, OR
COMPLIANCE WITH APPLICABLE PERMITS OR OTHER GOVERNMENTAL REQUIREMENTS, OR (V)
SHALL NOT BE LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING LIABILITY
IN TORT, STRICT OR OTHERWISE). IN THE EVENT OF ANY DEFECT OR DEFICIENCY OF ANY
NATURE IN THE FACILITY OR ANY PROPERTY OR OTHER ITEM CONSTITUTING A PART
THEREOF, WHETHER PATENT OR LATENT, THE LESSOR SHALL NOT HAVE ANY RESPONSIBILITY
OR LIABILITY WITH RESPECT THERETO. THE PROVISIONS OF THIS SECTION 11 HAVE BEEN
NEGOTIATED AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY AND
ALL WARRANTIES, EXPRESS OR IMPLIED, BY THE LESSOR WITH RESPECT TO THE FACILITY
OR ANY PROPERTY OR OTHER ITEM CONSTITUTING A PART THEREOF, WHETHER ARISING
PURSUANT TO THE UCC OR ANY OTHER LAW NOW OR HEREAFTER IN EFFECT.
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(b) The Lessor hereby assigns to the Lessee, until the
occurrence of an Event of Default, any other Cancellation Event or a Termination
Event hereunder, the benefits in respect of any Vendor's warranties or
undertakings, express or implied, relating to the Facility (including any labor,
equipment or parts supplied therewith), and, to the extent assignment of the
same is prohibited or precludes enforcement of any such warranty or undertaking,
the Lessor hereby subrogates the Lessee to its rights in respect thereof. The
Lessor hereby authorizes the Lessee, at the Lessee's expense, to assert any and
all claims and to prosecute any and all suits, actions and proceedings, in its
own name or in the name of the Lessor, in respect of any such warranty or
undertaking and, except during the continuance of an Event of Default, or after
the occurrence of any other Cancellation Event or a Termination Event hereunder,
to retain the proceeds received, and after the termination of this Lease or
after the occurrence and during the continuation of an Event of Default, or
after the occurrence of any other Cancellation Event or a Termination Event, to
pay the same in the form received (with any necessary endorsement) to the
Lessor.
(c) The Lessee may use the Facility for the Permitted Use
provided that the value of the Facility is not diminished by any such use other
than as a result of normal wear and tear in the ordinary course of business.
During the term of this Lease, the Lessor covenants that unless an Event of
Default, any other Cancellation Event or a Termination Event has occurred and is
continuing and except as may arise under a Permitted Lien or as may otherwise be
contemplated under the Operative Documents, the Lessor will not, and will not
permit any party claiming by, through or under the Lessor to, interfere with the
peaceful and quiet possession and enjoyment of the Facility by the Lessee;
provided, however, that the Lessor and its successors, assigns, representatives
and agents may, upon reasonable notice to the Lessee, enter upon and examine the
Facility or any part thereof at reasonable times, subject to the provisions of
Section 19; and provided, further, that the Lessor is not hereby warranting the
state or quality of the title to any part of the Facility. Any failure by the
Lessor to comply with the foregoing provisions of this Section 11(c) shall not
give the Lessee any right to cancel or terminate this Lease, or to xxxxx, reduce
or make reduction from or offset against any Rent or other sum payable under
this Lease or any other Operative Document, or to fail to perform or observe any
other covenant, agreement or obligation hereunder or thereunder. The Lessee will
not do, or fail to do, or permit or suffer to exist any act or thing, which
action or thing or failure might impair the value, use or usefulness of the
Facility for the Permitted Use in accordance with the design of the Facility,
ordinary wear and tear excepted.
Section 12. Liens.
(a) The Lessee will not directly or indirectly create, or
permit to be created or to remain, and at the Lessee's expense will discharge
within 10 days of notice of the filing or assertion thereof, by bond, deposit or
otherwise, any Lien upon the Lease or any of the Facility except (i) any Lien
being contested as permitted by and in accordance with Section 13, or (ii)
Permitted Liens. The Lessor agrees that the Lessee shall have during the term of
this Lease the exclusive right (so long as no Default has occurred and is
continuing) to grant, create or suffer to exist Permitted Liens in the ordinary
course of business and in accordance with prudent industry practices, provided
that the fair market value or use of the Facility or the applicable part thereof
for the Permitted Use is not materially lessened thereby. The Lessor agrees to
execute such documents and take all other actions as shall be reasonably
necessary, and otherwise to cooperate with the Lessee in connection with the
matters described above, provided that all
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reasonable out-of-pocket costs and expenses (including, without limitation,
reasonable attorneys' fees and expenses) incurred by the Lessor in connection
therewith shall be borne by the Lessee, and the Lessor shall not be required to
execute any document that would, in its opinion, materially and adversely affect
the value or use of the Facility or any part thereof for the Permitted Use or
otherwise materially and adversely affect the transactions contemplated by the
Operative Documents or the interests of the Lessor in the Facility or under the
Operative Documents or otherwise.
(b) The Lessee will not directly or indirectly create, or
permit to be created or to remain, and will discharge, any Lien of any nature
whatsoever on, in or with respect to, its interest in the Facility arising by or
through it or its actions, except Permitted Liens.
(c) The Lessee will not directly or indirectly sell, transfer,
or otherwise dispose of its interest in the Facility.
Section 13. Permitted Contests. Notwithstanding any other provision of
this Lease to the contrary, after prior written notice to the Lessor and
provided there is no material risk of sale, forfeiture or loss of the Facility
or any material part thereof, the Lessee may at its expense contest any
Imposition which it is required to pay hereunder, by appropriate proceedings
conducted in good faith and with due diligence, so long as such proceedings are
effective to prevent the collection of such Imposition from the Lessor or
against the Facility or any part thereof; provided, however, that the actions of
the Lessee, as authorized by this Section 13, shall be subject to the express
written consent of the Lessor if such actions would subject the Lessor or the
Facility or any part thereof to any liability or loss not indemnified in full by
the Lessee hereunder or any sanction, criminal or otherwise, for failure to pay
any such Imposition. The Lessee will pay, and save the Lessor harmless against,
all losses, Judgments and reasonable costs, including attorneys' fees and
expenses, in connection with any such contest and will, promptly after the final
determination of such contest, pay and discharge the amounts which shall be
imposed or determined to be payable therein, together with all penalties, costs
and expenses incurred in connection therewith. The Lessee shall prevent any
foreclosure, judicial sale, taking, loss or forfeiture of the Facility or any
part thereof, or any interference with or deductions from any Rent or any other
sum required to be paid by the Lessee hereunder by reason of such nonpayment or
nondischarge of an Imposition. The Lessor shall cooperate with the Lessee in any
contest and shall allow the Lessee to conduct such contest (in the name of the
Lessor, if necessary) at the Lessee's sole cost and expense and the Lessee shall
indemnify and hold the Lessor harmless from and against all liabilities, costs
and expenses in connection with such contest. The Lessee shall notify the Lessor
of each such proceeding within 10 days after the commencement thereof, which
notice shall describe such proceeding in reasonable detail.
Section 14. Insurance, etc.
(a) The Lessee will, at its own expense, purchase and
maintain, or cause to be purchased and maintained, throughout the term of this
Lease, insurance with respect to its business and the Facility in accordance
with the requirements of Schedule 14.
(b) Except as otherwise expressly provided herein, during the
Basic Term, the Lessee shall bear all risk of loss (including any Loss Event or
Casualty Occurrence), whether by
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casualty, theft, taking, confiscation or otherwise, with respect to the Facility
or any part thereof, at all times during the term of this Lease until possession
of the Facility has been accepted by the Lessor pursuant to Section 17.
Notwithstanding anything to the contrary contained in any Operative Document,
during the Construction Term, if a Loss Event, Casualty Occurrence or any other
Force Majeure Event occurs and is not a result of a Fully Indemnifiable Event,
the Lessee shall have the option to: (1) repair, rebuild, restore or replace the
Facility pursuant to the provisions of this Section 14 using proceeds of
casualty insurance, a condemnation award or Advances (but with no obligation to
use its own funds for such repair, rebuilding, restoration or replacement) (the
"Repair Option"), (2) elect the Sale Option, or (3) elect the Purchase Option.
(c) So long as no Event of Default shall have occurred and be
continuing and no other Cancellation Event and no Termination Event shall have
occurred, any payments, whether constituting insurance proceeds, amounts paid by
any Governmental Authority or otherwise, received by the Lessee or the Lessor
upon the occurrence of any loss with respect to the Facility or part thereof
(other than a Casualty Occurrence), whether as a result of casualty, theft,
taking or other confiscation, shall be applied in payment for necessary repairs
and replacement to the Facility in accordance with Section 7 or, to the extent
the costs of such repairs and replacement shall have been paid by the Lessee, to
reimburse the Lessee. The Lessee shall be entitled to retain any excess funds
remaining after necessary repairs and replacements have been completed and all
costs therefor are paid in full.
(d) If the Lessee elects the Repair Option, upon a Casualty
Occurrence, the Lessee shall give prompt notice thereof to the Lessor and shall
within 30 days of the date of such Casualty Occurrence provide the Lessor with a
replacement plan acceptable to the Lessor setting forth how the Lessee shall
replace, or cause to be replaced, at the Lessee's own cost and expense
(including insurance proceeds and any condemnation awards), within 12 months
after the date of such Casualty Occurrence (but (x) in no event later than the
Scheduled Lease Termination Date and (y) if the Casualty Occurrence occurs
during the Construction Term, in no event later than the last day of the
Construction Term), such part of the Facility that is the subject of a Casualty
Occurrence in accordance with this Section 14(d) and Section 7. If the Lessee
chooses to replace the portion of the Facility that is the subject of a Casualty
Occurrence, within the later to occur of (x) 60 days after the date of the
Casualty Occurrence and (y) the satisfaction of all applicable Governmental
Requirements, including obtaining all authorizations of Governmental
Authorities, required therefor (but in no event later than 90 days after the
date of the Casualty Occurrence), the Lessee shall have commenced repairs or
replacements as specified in the replacement plan and shall thereafter proceed
diligently with such repairs and replacements to completion. After completion of
the repairs and replacements, the Lessee shall demonstrate to the satisfaction
of the Lessor that operations, capacity and production of the Facility have been
restored to the standards required for Completion.
(e) All replacement Property of the Facility (other than
temporary replacement parts and equipment installed pending installation of
permanent replacement Property) installed pursuant to Section 14(d) shall be
free and clear of all Liens except Permitted Liens, and shall be in as good
operating condition as, and shall have a value and utility at least equal to,
the Property replaced immediately prior to the Casualty Occurrence to which such
Property was subject. For purposes of this Lease (including without limitation
Section 14(d) and Section 7), the Funded Amount and book value of the
replacement Property shall be deemed to equal the Funded
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Amount and book value of the part(s) replaced thereby. All Property of the
Facility at any time removed from this Lease pursuant to Section 14(d) and
Section 7 shall remain the property of the Lessor, no matter where located,
until such time as insurance proceeds have been received by the Lessor at least
equal to the book value of such part of the Facility or such part shall be
replaced by suitable items that have been incorporated or installed on or
attached to the Facility and that meet the requirements specified above.
Immediately upon any permanent replacement Property becoming incorporated or
installed on or attached to the Facility as provided above, without further act,
such permanent replacements shall become subject to this Lease and be deemed
part of the Facility for all purposes hereof to the same extent as any other
parts of the Facility. All amounts of insurance proceeds for Property losses and
all other proceeds (whether resulting from damage or destruction or from
condemnation, confiscation or seizure) relating to the Facility shall be
deposited into the Restoration Account and held and released, together with
accrued interest thereon, as hereinafter provided. So long as an Event of
Default shall not have occurred and be continuing and no other Cancellation
Event or Termination Event shall have occurred and, and provided that the Lessor
shall have received a written application of the Lessee accompanied by a
certificate of an Authorized Officer of the Lessee showing in reasonable detail
the nature of any necessary repair, rebuilding and restoration, the actual cash
expenditures necessary for such repair, rebuilding and restoration, the expected
total expenditures required to complete such work and evidence that sufficient
funds are or will be available to complete such work on a timely basis (such
certificate to be acceptable to the Lessor in all respects), then the amounts
available in such Restoration Account, together with accrued interest thereon,
shall be released by the Lessor immediately upon receipt of such certification
or, if applicable, from time to time on the last Business Day of each month
during the period of repair, rebuilding and restoration in payment therefor
against presentation to the Lessor of a certificate executed by an Authorized
Officer of the Lessee to the effect that expenditures have been made, or costs
incurred, by or for the account of the Lessee or are reasonably anticipated to
be made during the immediately following one month period in a specified amount
for the purposes of making repairs, rebuilding and restoration in the amounts
specified, that no Event of Default, other Cancellation Event or Termination
Event exists and all conditions precedent herein provided relating to such
withdrawal and payment have been satisfied. Upon the occurrence of any Event of
Default, other Cancellation Event or Termination Event, the Lessor shall be
entitled to retain all amounts in the Restoration Account for application to the
obligations of the Lessee hereunder.
Section 15. Termination; Cancellation; Purchase Option; Application of
Payments.
(a) (i) The termination of this Lease (A) in accordance with
Section 2(b) (whether upon the scheduled expiration hereof or by the refusal of
the Lessor to agree to extend the then current Scheduled Lease Termination
Date), or (B) as a result of a Non-Completion Event, or (C) at any time due
solely to the occurrence of a Limited Recourse Default, shall be a "Termination
Event," the effect of which shall be to cause this Lease to terminate on the
Lease Termination Date.
(ii) If a Termination Event occurs, the Lessee, on the
Lease Termination Date, shall, in accordance with the terms of Section 2(c) or
(d), as applicable, without further notice or demand to the Lessee, either:
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(A) purchase the Facility from the Lessor for the
Termination Value; or
(B) so long as no Cancellation Event has occurred,
(1) pay to the Lessor (A) if the Termination
Event has occurred during the Construction Term, the
Construction Term Recourse Amount (or, in the case of
a Fully Indemnifiable Event during the Construction
Term, the Permitted Lease Investment Balance), (B) if
the Termination Event has occurred during the Basic
Term and is a Fully Indemnifiable Event or any Event
of Default (other than a Limited Recourse Default),
the Permitted Lease Investment Balance, or (C) if the
Termination Event is the termination of the Lease on
the then current Scheduled Lease Termination Date or
a Limited Recourse Default during the Basic Term, the
Residual Value Amount; and
(2) sell the Facility in accordance with
Section 15(c).
(b) (i) Each of the following events shall be a "Cancellation
Event", the effect of which shall be to cause this Lease to be terminated in
accordance with the following provisions on the "Cancellation Date" specified:
(A) the occurrence of (1) an Event of Default (other
than a Limited Recourse Default or an Event of Default under Section
17(a)(vi)) and the delivery by the Lessor to the Lessee of a notice
stating that the Lessor elects to terminate this Lease by reason of the
existence of such Event of Default, in which case the Cancellation Date
will be the fifth (5th) Business Day after the date of delivery of said
notice to the Lessee, or (2) an Event of Default under Section
17(a)(vi), in which case the Cancellation Date shall occur immediately
upon the occurrence of such Event of Default; or
(B) the occurrence of a Loss Event, in which case the
Cancellation Date shall be the fifth (5th) Business Day after such
event occurs; or
(C) the occurrence of a Casualty Occurrence (other
than a Casualty Occurrence resulting in a Non-Completion Event) in
respect of the Facility and the failure of the Lessee, for any reason,
to replace or repair the Facility or such part thereof in accordance
with, and within the time required by, Section 14 and the delivery by
the Lessor to the Lessee of a notice after the expiration of such time
stating that the Lessor elects to terminate this Lease by reason of the
existence of such Casualty Occurrence, in which case the Cancellation
Date shall be the fifth (5th) Business Day after the date of delivery
of said notice; or
(D) the occurrence of Change of Control and the
delivery by the Lessor to the Lessee of a notice stating that the
Lessor elects to terminate this Lease by reason of the occurrence of
such Change of Control, in which case the
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Cancellation Date will be the fifth (5th) Business Day after the date
of delivery of said notice to the Lessee.
(ii) If a Cancellation Event occurs during the Lease
Term, the Lessee, on the Cancellation Date, shall either (A) purchase
the Facility from the Lessor for the Termination Value, or (B) pay to
the Lessor an amount equal to (1) if the Cancellation Event occurs
during the Construction Term, the Construction Term Recourse Amount
(or, in the case of a Fully Indemnifiable Event during the Construction
Term, the Permitted Lease Investment Balance) or (2) if the
Cancellation Event has occurred during the Basic Term and is a Fully
Indemnifiable Event or any Event of Default (other than a Limited
Recourse Default), the Permitted Lease Investment Balance. Payments by
the Lessee pursuant to this clause (ii) shall not be considered
"walk-away" payments and the Lessee shall have the right to sell the
Facility in accordance with Section 15(c).
(c) If the Lessee has elected the Sale Option pursuant to
Section 15(a) or 15(b), the Lessee, as the Lessor's agent, will furnish to the
Lessor a satisfactory update of the Environmental Assessment, attempt to sell
the Facility, or if the Facility cannot be sold within 12 months, obtain an
appraisal from an appraiser reasonably acceptable to the Lessor and the Lessee
to determine the Fair Market Sales Value and arrange for the sale of the
Facility at the end of the Lease Term (including a termination of the Lease Term
by reason of the occurrence of a Cancellation Event or Termination Event) to a
purchaser that is not an Affiliate of Lessee, for a cash purchase price payable
to the Lessor on such date to be applied, to the extent of such proceeds, as
provided under clause (f), (g) or (h) of this Section 15, as the case may be.
(d) [Intentionally Omitted]
(e) This Lease shall cease and terminate on the Lease
Termination Date or Cancellation Date, as applicable, except with respect to (i)
obligations and liabilities of the Lessee, actual or contingent, which arose
under this Lease, or by reason of events or circumstances occurring or existing,
on or prior to its termination, and which have not been satisfied (which
obligations shall continue until satisfied and which include, but are not
limited to, obligations for Rent and amounts owing pursuant to this Section 15
and Section 16), and (ii) obligations of the Lessee which by the terms of this
Lease expressly survive termination. Promptly after the Lessee shall learn of
the happening of any Termination Event or Cancellation Event, the Lessee shall
give notice thereof to the Lessor.
(f) Upon a Cancellation Event or Termination Event for which
the Lessee elects to exercise the Purchase Option, or the Lessee otherwise
elects to acquire the Facility for the Termination Value, all monies received by
the Lessor in connection with this Lease or any other Operative Document will be
applied in the following order:
(1) first, to the Lessor to pay or reimburse all
costs, expenses and liabilities, including, without
limitation, those in connection with Indemnified Risks,
increased costs, Supplemental Rent, Taxes and Impositions,
then due and owing to the Lessor under the Operative Documents
(collectively, the "Other Transaction Expenses");
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(2) second, to the Lessor to pay all accrued, unpaid
Basic Rent; and
(3) third, to the Lessor to pay the outstanding
principal balance of Facility Cost and Completion Costs, if
applicable.
Any monies remaining after payment in full of the foregoing
amounts and all other amounts owing by the Lessee under the
Operative Documents will be distributed to the Lessee.
(g) If the Lessee has not elected the Purchase Option and has
paid the Construction Term Recourse Amount, Residual Value Amount or Permitted
Lease Investment Balance, as applicable, and the Lessor has been furnished a
satisfactory update of the Environmental Assessment initially furnished with
respect to the Facility, then:
(i) the Construction Term Recourse Amount, Residual
Value Amount or Permitted Lease Investment Balance, as applicable, will
be applied as follows:
(1) first, to the Lessor to pay or reimburse
Other Transaction Expenses and Support Expenses;
(2) second, to the Lessor to pay all accrued,
unpaid Basic Rent;
(3) third, to the Lessor to pay the outstanding
principal balance of Facility Cost and all Completion Costs,
if applicable;
(4) fourth, the balance, if any, and all other
monies received by the Lessor in connection with the Lease or
any other Operative Document or as proceeds of disposition of
the Facility, will be applied as provided in clause (h) below;
and
(ii) any monies remaining after payment in full of the
foregoing amounts and all other amounts owing by the Lessee under the
Operative Documents will be distributed to the Lessee.
(h) Any proceeds derived from the sale of the Facility
pursuant to Section 15(c) (or in the event that the Facility has not been sold
for a period of 12 months after the Lessee's election of the Sale Option, the
Facility will be deemed to have been sold for the Fair Market Sales Value and
the deemed proceeds therefrom shall be treated as proceeds derived from sale for
purposes of this Section 15(h)), or reletting of the Facility pursuant to
Section 17(f) shall be distributed:
(1) first, to the Lessor to the extent of amounts
owing under Section 16(c) or costs of selling and/or reletting
the Facility that are incurred by Lessor pursuant to Section
17(f) or Section 26;
(2) second, to the Lessor in the amount of the
difference between the Permitted Lease Investment Balance and
the amount, if any, of the
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Construction Term Recourse Amount, Permitted Lease Investment
Balance or Residual Value Amount, as applicable, paid to the
Lessor by the Lessee pursuant to Section 15(a) or 15(b);
(3) third, to extent the Lessee has made any payment
to the Lessor of the Construction Term Recourse Amount,
Permitted Lease Investment Balance or Residual Value Amount
pursuant to Section 15(a) or 15(b), to the Lessee to reimburse
it for such payment;
(4) fourth, to the Lessor in the amount, if any, by
which the Termination Value exceeds the Permitted Lease
Investment Balance; and
(5) fifth, to the Lessee to the extent remaining
proceeds received are in excess of the unpaid Termination
Value.
Section 16. Transfer of Title on Removal of Facility; Expenses of
Transfer.
(a) Upon any sale or purchase of the Facility permitted by
Section 15, the Lessor will transfer to the Lessee or the appropriate Third
Party all of its title to and legal and beneficial ownership interest in the
Facility (i) free and clear of any Lien created by, through or under the Lessor
other than Permitted Liens or Liens created at the request of or as a result of
the actions of the Lessee or anyone acting by, through or under the Lessee, or a
result of the failure of the Lessee to carry out any of its obligations under
this Lease or the other Operative Documents, and (ii) without recourse,
representation or warranty of any nature whatsoever (except as to the absence of
such Liens as aforesaid).
(b) Whenever the Lessee has the right to purchase or transfer
to itself the Facility pursuant to any provision of this Lease, the Lessee may
cause such purchase to be effected by, or such transfer to be effected to, any
other Person specified by the Lessee, but in no event shall the Lessee be
relieved from any of its obligations hereunder as a result thereof.
(c) Upon any sale or transfer of the Facility pursuant to any
provision of this Lease, the expenses of the Lessor, including, without
limitation, reasonable attorneys' fees and expenses, in connection with such
sale or transfer, shall be paid pursuant to Section 15(h)(1).
(d) If during the Basic Term, on the Lease Termination Date or
on the Cancellation Date therefor, as applicable, the Lessee or any of its
Affiliates has not elected the Purchase Option or Sale Option, the Lessee shall
surrender the Facility to the Lessor free from all Liens except Permitted Liens
(other than those described in clause (ii)(b) of the definition of Permitted
Liens), in the same operating condition (except for ordinary wear and tear) with
the remaining original estimated useful life contemplated by the Facility Plan
intact and having the same capacity and efficiency as the Facility had on the
Completion Date with respect thereto, and in compliance in all material respects
with all Governmental Requirements and Insurance Requirements and free of all
Environmental Damages and Environmental Liabilities. To evidence the foregoing
and accomplish the surrender of the Facility, the Lessee shall provide the
following items (x) in the event of a Termination Event under Section
15(a)(i)(A) within 9 months prior to the then current Scheduled Lease
Termination Date, with final confirmation of the same at least 30 days but not
more than 60 days prior thereto and (y) in the event of a
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Termination Event under Section 15(a)(i)(B) or 15(a)(i)(C) or a Cancellation
Event, as soon as practicable prior to the Lease Termination Date or
Cancellation Date, as applicable:
(i) evidence satisfactory to the Lessor that all
Applicable Permits, Related Contracts, patents, trademarks and
copyrights, and all other rights and services reasonably required to
operate the Facility have been, or on or prior to the Lease Termination
Date therefor shall be, transferred (or in the case of patents,
trademarks, or copyrights, licensed on a non-exclusive basis) to the
Lessor (or the Lessor has been, or on or prior to the Lease Termination
Date or Cancellation Date, as applicable, shall be, given the right to
use each such item) and can be so transferred or licensed to (or used
by) any successor or assignee of the Lessor without further consent or
approval by any Person (subject only to normal Governmental
Requirements);
(ii) conveyancing, assignment, transfer, termination
and other documents that, in the reasonable discretion of the Lessor,
are sufficient to (A) vest in the Lessor good and marketable title to
the Facility, free and clear of all Liens except Permitted Liens (other
than those described in clause (ii)(b) of the definition of Permitted
Liens) and (B) terminate the rights of the Lessee and all other Persons
in and to the Facility.
(iii) evidence reasonably satisfactory to the Lessor
that the Facility has been operated and maintained in accordance with
the requirements of the Operative Documents, all Governmental
Requirements, all Applicable Permits and prudent industry practices;
(iv) evidence reasonably satisfactory to the Lessor
that the Facility is being used solely for the Permitted Use, meets or
exceeds the original design specifications, as modified by
modifications approved by the Lessor, and is capable of operating and
being used for the Permitted Use, and has the remaining original
estimated useful life contemplated by the Lessee;
(v) evidence reasonably satisfactory to the Lessor,
in its sole discretion, that (A) no default exists under the Agency
Agreement, (B) all agreements and arrangements to provide the services
and rights contemplated by the Agency Agreement are in place, executed
by the parties thereto, and are valid, enforceable and in full force
and effect on or before the Lease Termination Date or Cancellation
Date, as applicable and (C) such agreements and arrangements adequately
provide for the services and other rights contemplated by the Agency
Agreement;
(vi) a reasonably current update of the
Environmental Assessment delivered to the Lessor pursuant to Section
28(a)(viii); and
(vii) such other documents, instruments,
assessments, investigations, legal opinions, surveys and other items as
the Lessor may reasonably request to evidence to the reasonable
satisfaction of the Lessor) that (A) the Lessor has all Property,
services, Permits, assets and rights necessary to own, operate and
maintain the Facility from and after the Lease Termination Date or
Cancellation Date therefor, as applicable, and (B) no
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Default, Loss Event or Casualty Occurrence then exists other than the
event or condition that gave rise to the Termination Event or
Cancellation Event.
To the extent the Facility is not in the condition required by this
Section 16(d), the Lessee will pay to the Lessor such additional
amounts as are reasonably required to place it in compliance. The
Lessee shall also pay all costs and expenses relating to the surrender
and clean-up in connection with the surrender of the Facility as may be
required by Governmental Requirements or Insurance Requirements or
which are otherwise necessary to prevent or remedy any Environmental
Damages or Environmental Liabilities or to consummate the delivery of
possession of the Facility to the Lessor hereunder.
Section 17. Events of Default and Remedies.
(a) Each of the following acts or occurrences shall constitute
an "Event of Default" hereunder:
(i) default in the payment when due of any
Construction Term Recourse Amount, Residual Value Amount, Permitted
Lease Investment Balance, or Termination Value; or default in the
payment when due of any Basic Rent, and the continuance of such default
for 3 Business Days; or the default in the payment when due of any
Supplemental Rent or any other amount due hereunder or under any other
Operative Document and the continuance of such default for 3 Business
Days thereafter; or
(ii) the Lessee shall fail to observe or perform any
covenant contained in Sections 30(a)(viii) or (ix), 30(b)(ii), 30(c)
through (f), inclusive, 30(i) and 30(s) through (z), inclusive; or
(iii) the Lessee shall fail to observe or perform
any covenant or agreement contained or incorporated by reference in
this Lease (other than those covered by any other paragraph of this
Section 17(a)) or any other Operative Document and such failure shall
not have been cured within 30 days after the earlier to occur of (i)
written notice thereof having been given to the Lessee by the Lessor or
(ii) the Lessee otherwise becomes aware of any such failure; or
(iv) any representation or warranty made or deemed
made by the Lessee or any Guarantor herein, in any other Operative
Document or otherwise in writing in connection with or pursuant to this
Lease or any other Operative Document, shall be false or misleading in
any material respect on the date made or deemed made; or
(v) the Acquisition/Construction Agent shall fail to
observe or perform any covenant or agreement contained in the Agency
Agreement; or
(vi) (A) the Lessee, any Guarantor or a Material
Subsidiary shall (1) generally not pay its debts as such debts become
due; or (2) admit in writing its inability to pay its debts generally;
or (3) make a general assignment for the benefit of creditors; or (B)
any case or proceeding shall be instituted or consented to by the
Lessee, any Guarantor or a Material Subsidiary seeking to adjudicate it
bankrupt or insolvent, or
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seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under
any law relating to bankruptcy, insolvency or reorganization or relief
of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee, or other similar official for it or
for any substantial part of its property; or (C) any such case or
proceeding shall have been instituted against the Lessee, any Guarantor
or a Material Subsidiary and either such case or proceeding shall not
be stayed or dismissed for 60 consecutive days or any of the actions
sought in such case or proceeding (including, without limitation, the
entry of an order for relief against it or the appointment of a
receiver, trustee, custodian or other similar official for it or any
substantial part of its property) shall occur; or (D) the Lessee, any
Guarantor or a Material Subsidiary shall take any corporate action to
authorize any of the actions set forth above in this Section 17(a)(vi);
or
(vii) the Lessee, any Guarantor or a Material
Subsidiary permits a Judgment in the amount of $500,000 or more (not
covered by insurance as to which the relevant insurance company has
acknowledged coverage) to be obtained against it which continues
unsatisfied and unstayed for a period of 30 days; or
(viii) the Lessee shall abandon the Facility;
provided however that for purposes of this Section 17(a)(ix), the term
"abandon" shall not include the mere failure of the Lessee to occupy
the Facility so long as the Lessee continues to perform its obligations
hereunder and other Operative Documents, including, without limitation,
maintenance of the Facility, maintenance of required insurance,
compliance with Governmental Requirements and Insurance Requirements
and payment of all Rent; or
(ix) the occurrence of any default with respect to
any Debt of the Lessee, any Guarantor or any Material Subsidiary
incurred pursuant to a credit agreement, loan agreement, note purchase
agreement, indenture or other document or agreement pertaining to such
Debt (collectively, a "Debt Document") in existence on the Closing Date
in an aggregate amount equal to or exceeding $500,000, if such default
is a payment default or if the holder of such Debt has accelerated the
maturity of its Debt as a result thereof or (2) the occurrence of any
payment default with respect to any Debt incurred pursuant to a Debt
Document which was not in existence on the Closing Date in an aggregate
amount equal to or exceeding $500,000; or
(x) the Lessee or any member of the Controlled Group
shall fail to pay when due any material amount which it shall have
become liable to pay to the PBGC or to a Plan under Title IV of ERISA;
or notice of intent to terminate a Plan or Plans shall be filed under
Title IV of ERISA by the Lessee or any member of the Controlled Group,
any plan administrator or any combination of the foregoing; or the PBGC
shall institute proceedings under Title IV of ERISA to terminate or to
cause a trustee to be appointed to administer any such Plan or Plans or
a proceeding shall be instituted by a fiduciary of any such Plan or
Plans to enforce Section 515 or 4219(c)(5) of ERISA and such proceeding
shall not have been dismissed within 30 days thereafter; or a condition
shall exist by reason of which the PBGC would be entitled to obtain a
decree adjudicating that any such Plan or Plans must be terminated; or
the Lessee or any other member of the Controlled
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Group shall enter into, contribute or be obligated to contribute to,
terminate or incur any withdrawal liability with respect to, a
Multiemployer Plan; or
(xi) a federal tax lien shall be filed against the
Lessee, any Guarantor or any Material Subsidiary under Section 6323 of
the Code or a lien of the PBGC shall be filed against the Lessee, any
Guarantor or any Material Subsidiary under Section 4068 of ERISA and in
either case such lien shall remain undischarged for a period of 25 days
after the date of filing; or
(xii) any termination or repudiation of the Ground
Lease by the Lessee; or
(xiii) the failure of Completion to occur within 15
months after the Lease Commencement Date; or
(xiv) any Guarantor shall fail to observe or perform
any covenant or agreement contained in any Operative Document to which
it is a party; or
(xv) the Parent Guaranty or the Subsidiary Guaranty
shall cease, for any reason to be in full force and effect or any
Guarantor or Affiliate of any Guarantor shall so assert.
If any Event of Default occurs under clause (ii), (iii), (iv) or (v)
above, and (a) the existence of such Event of Default is specifically premised
on a subjective standard (including, but not limited to, the use of the term
"material", "Material Adverse Effect" or "in all material respects") and (b) the
Lessor enforcing such Event of Default did not or could not apply commercially
reasonable standards in determining that such Event of Default occurred, then
such Event of Default shall be a "Limited Recourse Default" for all purposes
under this Lease.
(b) Upon the occurrence and during the continuance of any
Event of Default, the Lessor may do any one or more of the following (subject to
the rights and obligations of the Lessee under Section 15(a)(ii) or 15(b)(ii),
as applicable, including the right of the Lessee to elect the Sale Option or the
Purchase Option):
(i) proceed by appropriate judicial proceedings,
either at law, in equity or in bankruptcy, to enforce performance or
observance by the Lessee of the applicable provisions of this Lease, or
to recover damages (subject to Section 3(d)(ii) and Section 15 during
the Construction Term) for the breach of any such provisions, or any
other equitable or legal remedy, all as the Lessor shall deem necessary
or advisable; and/or
(ii) by notice to the Lessee, either (x) terminate
this Lease in accordance with Section 15, whereupon the Lessee's
interest and all rights of the Lessee to the use of the Facility shall
forthwith terminate, but the Lessee shall remain liable with respect to
its obligations and liabilities hereunder to the extent specified
herein; or (y) terminate the Lessee's right to possession of the
Facility or any part thereof; and/or
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(iii) exercise any and all other remedies available
under applicable law or at equity.
(c) After the occurrence and during the continuance of a
Cancellation Event or Termination Event, in the event the Lessor elects not to
terminate this Lease, this Lease shall continue in effect and the Lessor may
enforce all of the Lessor's rights and remedies under this Lease, including,
without limitation, the right to recover Basic Rent, Supplemental Rent, and all
other yield protection payments and other amounts with respect thereto, as it
becomes due under this Lease. For the purposes hereof, the following do not
constitute a cancellation or termination of this Lease: (i) acts of maintenance
or preservation of the Facility or any part thereof, (ii) efforts by the Lessor
to relet the Facility or any part thereof, including, without limitation,
termination of any sublease of the Facility and removal of any tenant from the
Site thereof, (iii) or the appointment of a receiver upon the initiative of the
Lessor to protect the Lessor's interest under this Lease.
(d) If (i) on the Lease Termination Date, the Facility is not
acquired by the Lessee or its designee pursuant to Section 15(a)(ii)(A) by
payment of the Termination Value or (ii) on the Cancellation Date, the Lessee or
its designee has defaulted in its obligation to acquire the Facility in
accordance with Section 15(b)(ii), then the Lessor shall have the immediate
right of possession of the Facility and the right to enter onto the Site, and to
remove any and all of the Property comprising the Facility, and the Lessor may
thenceforth hold, possess and enjoy such Facility, free from any rights of the
Lessee and any Person claiming by, through or under the Lessee. The Lessor shall
be under no liability by reason of any such repossession or entry onto the
premises of the Lessee.
(e) Should the Lessor elect to repossess the Facility or any
part thereof upon cancellation or termination of this Lease or otherwise in the
exercise of the Lessor's remedies, the Lessee shall peaceably quit and surrender
the Facility to the Lessor and either (i) deliver possession of the Facility to
the Lessor or (ii) allow the Lessor or its agents or assigns to enter onto the
Site to remove any and all of the Property comprising the Facility at the
expense of the Lessee, and neither the Lessee nor any Person claiming through or
under the Lessee shall thereafter be entitled to possession or to remain in
possession of the Facility or any part thereof but shall forthwith peaceably
quit and surrender the Facility to the Lessor.
(f) At any time after the repossession of the Facility or any
part thereof, whether or not this Lease shall have been cancelled or terminated,
the Lessor may (but shall be under no obligation to) relet the Facility or the
applicable part thereof without notice to the Lessee, for such term or terms and
on such conditions and for such usage as the Lessor in its sole and absolute
discretion may determine. The Lessor may collect and receive any rents payable
by reason of such reletting, and the Lessor shall not be liable for any failure
to relet the Facility or for any failure to collect any rent due upon any such
reletting. Rents so received by the Lessor shall be applied in accordance with
Section 15(h).
(g) The remedies herein provided in case of an Event of
Default are in addition to, and without prejudice to, the Lessee's continuing
obligations under Sections 15(a) and 15(b), as applicable, and shall not be
deemed to be exclusive, but shall be cumulative and shall be in addition to all
other remedies existing at law, in equity or in bankruptcy (but the exercise of
such
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other remedies shall not increase the maximum obligations of the Lessee as set
forth in Sections 15(a) and 15(b), as applicable). The Lessor may exercise any
remedy without waiving its right to exercise any other remedy hereunder or
existing at law, in equity or in bankruptcy.
(h) No waiver by the Lessor hereunder of any Default or Event
of Default shall constitute a waiver of any other or subsequent Default or Event
of Default. To the extent permitted by applicable law, the Lessee waives any
right it may have at any time to require the Lessor to mitigate the Lessor's
damages upon the occurrence of a Default or Event of Default by taking any
action or exercising any remedy that may be available to the Lessor, the
exercise of remedies hereunder being at the discretion of the Lessor.
Section 18. Change in the Lessee's Name or Structure. The Lessee will
not change its name, identity or corporate structure (including, without
limitation, by any merger, consolidation or sale of substantially all of its
assets, which in any event is subject to Section 30(d)) except pursuant to and
in accordance with Section 26(a).
Section 19. Inspection; Right to Enter Premises of the Lessee. The
Lessee shall permit, and cause each of its Subsidiaries to permit, the Lessor or
its authorized representatives to (but without any obligation to do so) enter
upon the Site or any premises of the Lessee at reasonable times upon reasonable
advance notice in order to inspect the Facility (but not more than twice per
calendar year) (subject to compliance with applicable safety requirements of the
Lessee and applicable Governmental Requirements) and to examine, audit and make
abstracts from any of their respective books and records and to discuss the
condition, compliance with Governmental Requirements, performance of the
Facility and the respective affairs, finances and accounts of the Lessee and its
Subsidiaries with their respective officers, employees and independent
accountants. The Lessee agrees to coordinate and assist in such visits and
inspections, in each case at such reasonable times and as often as may
reasonably be desired.
Section 20. Right to Perform the Lessee's Covenants. Subject to Section
13, if the Lessee shall fail to make any payment or perform any act required to
be made or performed by it hereunder, the Lessor, upon notice to or demand upon
the Lessee but without waiving or releasing any obligation or Default or Event
of Default, may (but shall be under no obligation to) at any time thereafter
make such payment or perform such act for the account and at the expense of the
Lessee as, in the Lessor's reasonable judgment, may be necessary or appropriate
therefor and, upon the occurrence and during the continuance of a Cancellation
Event or Termination Event, may enter upon the Site for such purpose and take
all such action thereon as, in the Lessor's reasonable judgment, may be
necessary or appropriate therefor. No such entry shall be deemed an eviction of
the Lessee. All sums so paid by the Lessor and all costs and expenses
(including, without limitation, reasonable attorneys' fees and expenses so
incurred) shall be paid by the Lessee to the Lessor on demand as Supplemental
Rent.
Section 21. Participation by Co-Lessees or Sublessees; Participations
by Lessor.
(a) Except as otherwise permitted in this Section 21, the
Lessee may not assign its rights or obligations under this Lease without the
prior consent of the Lessor.
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(b) The Lessee may, so long as no Default, Event of Default,
other Cancellation Event or Termination Event shall have occurred and be
continuing, enter into documentation assigning all or any part of this Lease
and, as necessary, the other Operative Documents, to another Person, so long as
(i) such documentation evidences the undertaking of such Person (a "Co-Lessee")
to be responsible for all or certain obligations of the Lessee and, if approval
of the Lessor is granted as contemplated in clause (iii) below, the attendant
reduction in the obligations of the Lessee hereunder, (ii) such documentation
expressly states that such assignment is subject and subordinate to the terms of
this Lease and the Liens created hereby and (iii) unless the Lessor has granted
its prior written approval, acting in its sole discretion, of such assignment to
said Co-Lessee and such documentation (it being understood that the Lessor may
for any reason whatsoever elect not to grant such approval), the Lessee shall
remain primarily liable for all obligations of the tenant of all of the Facility
under this Lease. The Lessee will furnish promptly to the Lessor copies of all
such documentation entered into by the Lessee from time to time. Any assignment
made otherwise than as expressly permitted by this Section 21(b) shall be null
and void and of no force and effect.
(c) The Lessee may, from time to time, so long as no Default,
Event of Default, other Cancellation Event or Termination Event shall have
occurred and be continuing, enter into a sublease as to the Facility and such
other documentation as may be necessary with one or more Persons (each a
"Sublessee"). In any event, any documentation executed by the Lessee in
connection with the subletting of the Facility (i) shall expressly state that
such sublease is subject and subordinate to the terms of this Lease and the
Liens created hereby and (ii) shall not provide for a sublease term ending after
the then current Scheduled Lease Termination Date. The Lessee will furnish
promptly to the Lessor copies of all subleases and related documentation entered
into by the Lessee from time to time. No sublease permitted by the terms hereof
will reduce in any respect the obligations of the Lessee hereunder, it being the
intent of the Lessee and the Lessor that the Lessee be and remain directly and
primarily liable as a principal for its obligations hereunder. Any sublease made
otherwise than as expressly permitted by this Section 21(c) shall be null and
void and of no force or effect.
(d) Subject to the consent of the Lessee (which shall not be
unreasonably withheld or delayed), unless a Default is in existence, in which
case no such consent shall be required, the Lessor may at any time assign to one
or more banks or other financial institutions or an affiliate thereof all or a
portion of its rights and obligations in and to the Facility and under this
Lease (including, without limitation, all or a portion of its Commitment and its
rights to receive Rent pursuant hereto) and the assignee thereof shall assume
all such rights and obligations. Upon such execution, delivery, acceptance and
recording, from and after the effective date of such assignment, (A) the
assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such assignment, have
the rights and obligations of a Lessor hereunder and (B) the assigning Lessor
thereunder shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such assignment, relinquish its rights and be
released from its obligations under this Lease (and, in the case of an
assignment covering all or the remaining portion of an assigning Lessor's rights
and obligations under this Lease, such assigning Lessor shall cease to be a
party hereto).
(e) By executing and delivering an assignment, each assignor
thereunder and the assignee thereunder by accepting such assignment confirm to
and agree with each other and the
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other parties hereto as follows: (i) other than as provided in such assignment,
such assigning Lessor makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Lease or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Lease or any other
instrument or document furnished pursuant hereto; (ii) such assigning Lessor
makes no representation or warranty and assumes no responsibility with respect
to the financial condition of the Lessee or any Guarantor or the performance or
observance by the Lessee or any Guarantor of any of its obligations under this
Lease or any other Operative Document; (iii) such assignee confirms that it has
received a copy of this Lease, together with copies of the financial statements
referred to in Sections 29(d) and 30(a) and such other documents and information
as it has deemed appropriate to make its own credit analysis and decision to
accept such assignment; (iv) such assignee will, independently and without
reliance upon the Lessor, such assigning Lessor or any other Lessor and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Lease; (v) such assignee appoints and authorizes the Lessor to take such
action as agent on its behalf and to exercise such powers under this Lease as
are delegated to the Lessor by the terms hereof, together with such powers as
are reasonably incidental thereto; and (vi) such assignee agrees that it will
perform in accordance with their terms all of the obligations which by the terms
of this Lease are required to be performed by it as a Lessor.
(f) The Lessor may sell participations to one or more banks or
other entities in or to all or a portion of its rights and obligations under
this Lease (including, without limitation, all or a portion of its Commitment
and its right to receive Rent pursuant hereto); provided, however, that (i) the
Lessor's obligations under this Lease (including, without limitation, its
Commitment) shall remain unchanged, (ii) the Lessor shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) the Lessor shall remain a Lessor for all purposes of this Lease, (iv) the
Lessee and each Guarantor shall continue to deal solely and directly with the
Lessor in connection with its rights and obligations under this Lease and the
other Operative Documents, (v) the Lessor shall continue to be able to agree to
any modification or amendment of this Lease or any waiver hereunder without the
consent, approval or vote of any such participant or group of participants,
other than modifications, amendments and waivers which (A) postpone any date
fixed for any payment of, or reduce any payment of, Rent payable to the Lessor,
(B) increase the amount of the Lessor's Commitment in a manner which would have
the effect of increasing the amount of a participant's participation, (C) reduce
the Applicable Margin, or (D) consent to the assignment or the transfer by the
Lessee of any of its rights and obligations under this Lease and (vi) except as
contemplated by the immediately preceding clause (v), no participant shall be
deemed to be or to have any of the rights or obligations of the "Lessor"
hereunder.
(g) The Lessor may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
21, disclose to the assignee or participant or proposed assignee or participant
any information relating to the Lessee or any Guarantor furnished to the Lessor
by or on behalf of the Lessee or any Guarantor; provided that, prior to any such
disclosure, the assignee or participant or proposed assignee or participant
shall agree in writing for the benefit of the Lessee and each Guarantor to
preserve the confidentiality of any confidential information relating to the
Lessee and such Guarantor received by it from the Lessor in a manner consistent
with Section 31(k).
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(h) Anything in this Lease to the contrary notwithstanding,
the Lessor may at any time create a security interest in all or any portion of
its rights under this Lease (including, without limitation, the Advances made by
and Rent owing to it) in favor of any Federal Reserve Bank in accordance with
Regulation A and the applicable operating circular of such Federal Reserve Bank.
(i) Notwithstanding any other provision of this Lease to the
contrary, no assignee or participant shall be entitled to receive any greater
payment under Section 4(b) or 27(c) than the transferor Lessor would have been
entitled to receive with respect to the rights transferred, unless such transfer
is made with the Lessee's prior written consent or by reason of the provisions
of Section 27(b) or 27(c) requiring the Lessor to designate a different Funding
Office under certain circumstances or at a time when the circumstances giving
rise to such a greater payment did not exist.
Section 22. Notices. Except as otherwise provided herein, all notices,
requests and other communications to any party provided for hereunder shall be
in writing (including telecopier and other readable communication) and shall be
given to such party at its address or telecopier number set forth on the
signature pages hereof (or in an assignment executed by the Lessor pursuant to
Section 21(d) of the Lease); or, as to any party, at such other address as shall
be designated by such party in a written notice to the other parties. Each such
notice, request or other communication shall be effective (i) if given by
telecopier, when such telecopy is transmitted to the telecopier number specified
in this Section and the confirmation is received, (ii) if given by mail, 72
hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid or (iii) if given by any other means,
when delivered at the address specified in this Section; provided that notices
to the Lessor under Sections 3 and 28 shall not be effective until received. A
notice received by the Lessor by telephone, as permitted hereby, shall be
effective if the Lessor believes in good faith that it was given by an
Authorized Officer of the Lessee (as Lessee or as the Acquisition/Construction
Agent) and acts pursuant thereto, notwithstanding the absence of written
confirmation or any contradictory provision thereof.
Section 23. Amendments and Waivers. The provisions of this Lease may
from time to time be amended, modified or waived only if such amendment,
modification or waiver is in writing and consented to by the Lessee, the Lessor
and, if applicable, any participants of the Lessor in accordance with Section
21(f).
Section 24. Severability. Any provision of this Lease which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 25. Federal Income Tax Considerations. It is the understanding
of the parties that for income tax purposes this transaction will be treated as
a financing and the Lessee will be treated as the owner of the Facility and the
Lessee and the Lessor agree not to take any action inconsistent with such
treatment, subject to the following sentence. Notwithstanding anything in this
Section 25 to the contrary, the Lessor retains the right to assert that it is
the owner of the
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Facility subject to this Lease for income tax purposes in the event that there
is a determination (within the meaning of Section 1313 of the Internal Revenue
Code of 1986, as amended, or with respect to state or local income tax, a
comparable determination under state or local law) that the Lessee is not to be
treated as the owner of the Facility.
Section 26. Other Provisions. In order to protect the rights and
remedies of the Lessor and the Lessee both during the term of this Lease and
following a Default, an Event of Default, any other Cancellation Event or a
Termination Event, and for the purposes of Federal, state and local income and
ad valorem taxes, state and local sales taxes, documentary stamp and intangibles
taxes and other taxes relating to or assessable as a result of the execution,
delivery or recording of any of the Operative Documents and for purposes of
Title 11 of the United States Code (or any other applicable Federal, state or
local insolvency, reorganization, moratorium, fraudulent conveyance or similar
law now or hereafter in effect for the relief of debtors), the parties hereto
intend that (A) this Lease be treated as the repayment and security provisions
of loans by the Lessor to the Lessee in the face amount of the aggregate
Advances of Facility Cost made by them, (B) all payments of Rent, Construction
Term Recourse Amount, Residual Value Amount, Permitted Lease Investment Balance,
and Termination Value be treated as payments of principal, interest and other
amounts owing with respect to such loans, respectively, (C) the Lessee should be
treated as entitled to all benefits of ownership of the Facility or any part
thereof, and (D) this Lease be treated (i) as a mortgage and security agreement
or other similar instrument (this Lease, as so treated, is the "Mortgage") from
the Lessee, as mortgagor, for the benefit of the Lessee, on that part of the
Facility constituting real property and as a security agreement from the Lessee,
as debtor, to the Lessor, as secured party, encumbering the Facility and all
personal property comprising the Facility, and that the Lessee, as debtor,
hereby grants to the Lessor, as secured party (the "Secured Party") a first and
prior Lien on and security interest in the equipment, fixtures, and any and all
other Property of any kind or character now or hereafter comprising or
constituting the Facility and all proceeds therefrom, in each case being
effective as of the date of this Lease. In such event, the Lessor shall have all
of the rights, powers and remedies of a mortgagee under a mortgage and secured
party available under applicable law, including, without limitation, judicial or
nonjudicial foreclosure or power of sale, as and to the extent available under
applicable law, and the amounts secured by the Liens and security interests
shall be the collective amount of the aggregate unpaid Advances, together with
unpaid interest thereon, plus any other amounts owing to the Lessor under the
Operative Documents (including, without limitation, Supplemental Rent)
(collectively, the "Secured Amount"). The filing of this Lease (or a memorandum
hereof) shall be deemed to constitute the filing of a mortgage and the filing of
any financing statement in connection with this Lease shall be deemed to
constitute the filing of a financing statement to perfect the mortgage and
security interests in the Facility as aforesaid to secure the payment of all
amounts due from time to time from the Lessee to the Lessor under this Lease and
the other Operative Documents. If this transaction is treated as a financing,
the obligation arising hereunder shall be with full recourse to the Lessee and
shall not be treated as recourse only to the Facility. To the fullest extent
permitted by applicable law, the Lessor and the Lessee intend that the Facility
(other than the real property constituting the Site) be and remain at all times
personal property regardless of the manner or extent to which any of the
Facility (other than the real property constituting the Site) may be attached or
affixed to any real property. Except as required by applicable law, the Lessee
shall not under any circumstances take any action or make any filing or
recording which would cause the Facility (other than the real property
constituting the Site) to be deemed to be real property or
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permit any Person to obtain any interest in the Facility (other than the real
property constituting the Site) as a result of the Facility (other than the real
property constituting the Site) being deemed to be in whole or in part real
property.
This Mortgage secures and shall be security for any and all future
advances made by Secured Party to the Lessee. Nothing contained herein shall be
deemed an obligation on the part of the Secured Party to make any further
advances.
In order to preserve the security interest and Lien provided for
herein, the Lessor and the Lessee agree to abide by the following provisions
with regard to the Facility (for purposes of this Section 26, hereinafter
referred to as "Collateral"):
(a) Change in Location of Collateral or the Lessee. The Lessee
(i) will notify the Lessor on or before the date of any change in (A) the
location of the Collateral (B) the location of the Lessee's chief executive
office or address or its jurisdiction of organization, (C) the exact legal name
of the Lessee and (D) the corporate structure of the Lessee, and (ii) will, on
or before the date of any such change, prepare and file new or amended financing
statements as necessary so that the Secured Party shall continue to have a first
and prior perfected Lien (subject only to Permitted Liens) in the Collateral
after any such change.
(b) Documents; Collateral in Possession of Third Parties. If
certificates of title or other documents evidencing ownership or possession of
the Collateral are issued or outstanding, the Lessee will cause the interest of
the Secured Party to be properly noted thereon and will, forthwith upon receipt,
deliver same to the Lessor. If any Collateral is at any time in the possession
or control of any warehouseman, bailee, agent or independent contractor, the
Lessee shall notify such Person of the Secured Party's security interest in such
Collateral. Upon the Secured Party's request, the Lessee shall instruct any such
Person to hold all such Collateral for the Secured Party's account subject to
the Lessee's instructions, or, if an Event of Default shall have occurred and be
continuing, subject to the Secured Party's instructions.
(c) Sale, Disposition or Encumbrance of Collateral. Except for
Permitted Liens, as permitted by any of the Operative Documents or with the
Secured Party's prior written consent, the Lessee will not in any way encumber
any of the Collateral (or permit or suffer any of the Collateral to be
encumbered) or sell, assign, lend, rent, lease or otherwise dispose of or
transfer any of the Collateral to or in favor of any Person other than the
Secured Party.
(d) Proceeds of Collateral. Except as otherwise expressly
permitted by any of the Operative Documents, Lessee will deliver to the Lessor
promptly upon receipt all proceeds delivered to the Lessee from the sale or
disposition of any Collateral. After the occurrence and during the continuance
of a Cancellation Event or Termination Event, in the event the Lessee has not
purchased the Facility pursuant to Section 15(a)(ii)(A) or complied with Section
15(a)(ii)(B)(1) and made available to the Lessor a satisfactory update of the
Environmental Assessment pursuant to Section 15(c), all such proceeds and all
proceeds received by the Lessor from the sale or disposition of any Collateral
pursuant to this Section 26 shall be applied in accordance with Section 15(h).
This Section 26 shall not be construed to permit sales or dispositions of the
Collateral except as may be elsewhere expressly permitted by this Lease or the
other Operative Documents.
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(e) Further Assurances. Upon the request of the Lessor, the
Lessee shall (at the Lessee's expense) execute and deliver all such assignments,
certificates, financing statements or other documents and give further
assurances and do all other acts and things as the Lessor may reasonably request
to perfect the Secured Party's interest in the Collateral or to protect, enforce
or otherwise effect the Secured Party's rights and remedies hereunder, all in
form and substance satisfactory to the Secured Party.
(f) Collateral Attached to Other Property. In the event that
any of the Collateral is removed from the Facility and is to be attached or
affixed to any real property, the Lessee hereby agrees that a financing
statement which is a fixture filing may be filed for record in any appropriate
real estate records. If the Lessee is not the record owner of such real
property, it will provide the Lessor with any additional security documents or
financing statements necessary for the perfection of the Secured Party's Lien in
the Collateral, as requested by the Secured Party.
(g) Secured Amount. Should the Secured Amount be paid
according to the tenor and effect thereof when the same becomes due and payable
hereunder, and should the Lessee perform all covenants contained in the
Operative Documents in a timely manner, then the Mortgage shall be cancelled and
surrendered.
(h) Mortgage Remedies. If a Termination Event or Cancellation
Event shall occur and be continuing, the Lessor shall have all of the rights and
remedies of a mortgagee under the laws of the State of Illinois, including,
without limitation, all of the rights and remedies set forth in the Memorandum
of Lease pertaining to this Lease to be recorded in the Public Records of
Effingham County, Illinois, which are incorporated herein (subject, however, to
the rights and obligations of the Lessee under Section 15(a)(ii) or 15(b)(ii),
as applicable, including the right of the Lessee to elect the Sale Option or the
Return Option).
Section 27. Yield Protection and Illegality.
(a) Basis for Determining Interest Rate Inadequate or Unfair.
If on or prior to the first day of any Rental Period with respect to any Basic
Rent which is determined on the basis of the Adjusted LIBO Rate:
(i) the Lessor determines that deposits in Dollars
(in the applicable amounts), are not being offered in the relevant
market for such Rental Period, or
(ii) the Lessor determines and gives notice to the
Lessee that, as a result of conditions in or generally affecting the
London interbank eurodollar market, the rates or yield for Basic Rent,
determined on the basis of the LIBO Rate for any Rental Period will not
adequately and fairly reflect the cost to the Lessor of making, funding
or maintaining the Advances of Facility Cost giving rise to such Basic
Rent for such Rental Period, the Lessor shall forthwith so notify the
Lessee, whereupon,
(1) the Basic Rent for such Rental Period
shall be determined on the basis of the Base Rate
(2) the obligation of the Lessor to make an
Advance of any Facility Cost having Basic Rent or to continue
to accrue Basic Rent based on the
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Adjusted LIBO Rate shall be suspended until the Lessor shall
notify the Lessee that the circumstances causing such
suspension no longer exist, and
(3) unless the Lessee notifies the Lessor at
least 2 Business Days before the date of any requested Advance
for which notice has previously been given that it elects not
to obtain such Advance on such date, Basic Rent relating to
such Advance shall be determined at a rate of interest equal
to the Base Rate. Upon the written request of the Lessee, the
Lessor shall negotiate with the Lessee for a reasonable period
of time, as determined in the Lessor's discretion, to develop
a substitute interest rate basis hereunder; provided, however,
(x) the Lessor and the Lessee make no representation, warranty
or covenant that any such agreement will be made, and (y) any
relevant Basic Rent shall continue to be determined based on
the Base Rate during the continuance of any such negotiations
and thereafter should no alternate interest rate be agreed to
by the parties.
(b) Illegality. If, after the date hereof, the adoption of any
applicable law, rule or regulation, or any change therein, or any change in the
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof (any such agency being referred to as a "Banking Authority" and any such
event being referred to as a "Change of Law"), or compliance by the Lessor (or
its Funding Office) with any request or directive (whether or not having the
force of law) of any Banking Authority shall make it unlawful or impossible for
the Lessor (or its Funding Office) to make an Advance of any Facility Cost
having Basic Rent, or to continue to accrue Basic Rent, based on the Adjusted
LIBO Rate, the Lessor shall notify the Lessee, whereupon until the Lessor
notifies the Lessee that the circumstances giving rise to such suspension no
longer exist, the obligation of the Lessor to make an Advance of any Facility
Cost having Basic Rent or to continue to accrue Basic Rent based on the Adjusted
LIBO Rate shall be suspended. Before giving any notice to the Lessee pursuant to
this Section 27(b), the Lessor shall designate a different Funding Office if
such designation will avoid the need for giving such notice and will not, in the
judgment of the Lessor, be otherwise disadvantageous to the Lessor. If the
Lessor shall determine that it may not lawfully continue to make an Advance of
any Facility Cost having Basic Rent, or to continue to accrue Basic Rent based
on the Adjusted LIBO Rate to the end of the Rental Period and shall so specify
in such notice, the Basic Rent for such Rental Period shall immediately be
converted to and be determined based on the Base Rate, and the Lessee shall
immediately pay to the Lessor any amounts payable pursuant to Section 27(c).
(c) Increased Cost and Reduced Return.
(i) If after the date hereof, a Change of Law or
compliance by the Lessor (or its Funding Office) with any request or
directive (whether or not having the force of law) of any Banking
Authority:
(1) shall impose, modify or deem applicable
any reserve, special deposit or similar requirement
(including, without limitation, any such requirement imposed
by the Board of Governors of the Federal Reserve System (but
excluding any such requirement included in an applicable
Eurodollar Reserve
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Percentage) against assets of, deposits with or for the
account of, or credit extended by, the Lessor (or its Funding
Office); or
(2) shall impose on the Lessor (or its
Funding Office) or on the relevant interbank market any other
condition affecting the Basic Rent, to the extent it is
determined based on the Adjusted LIBO Rate;
and the result of any of the foregoing is to increase the cost to the
Lessor (or its Funding Office) of determining Basic Rent based on the
Adjusted LIBO Rate, or to reduce the amount of any sum received or
receivable by the Lessor (or its Funding Office) under this Lease or
under any other Operative Document with respect thereto, by an amount
deemed by the Lessor to be material, then, within 15 days after demand
by the Lessor, the Lessee shall pay to the Lessor such additional
amount or amounts as will compensate the Lessor for such increased cost
or reduction; provided, however, that no such amount may be claimed by
the Lessor which is attributable to periods prior to the date which is
60 days preceding the date on which the officer of the Lessor having
primary responsibility for asset liability management shall have
obtained actual knowledge of such Change of Law or request or
directive.
(ii) If the Lessor shall have determined that after
the date hereof the adoption of any applicable law, rule or regulation
regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof, or compliance by the Lessor
(or its Funding Office) with any request or directive regarding capital
adequacy (whether or not having the force of law) of any Banking
Authority, has or would have the effect of reducing the rate of return
on the Lessor's capital as a consequence of its obligations hereunder
to a level below that which the Lessor could have achieved but for such
adoption, change or compliance (taking into consideration the Lessor's
policies with respect to capital adequacy) by an amount deemed by the
Lessor to be material, then from time to time, within 15 days after
demand by the Lessor, the Lessee shall pay to the Lessor such
additional amount or amounts as will compensate the Lessor for such
reduction, subject to the proviso at the end of Section 27(c)(i).
(iii) The Lessor will promptly notify the Lessee of
any event of which it has knowledge, occurring after the date hereof,
which will entitle the Lessor to compensation pursuant to and subject
to the limitations contained in this Section 27(c) and will designate a
different Funding Office if such designation will avoid the need for,
or reduce the amount of, such compensation and will not, in the
judgment of the Lessor be otherwise disadvantageous to the Lessor. A
certificate of the Lessor claiming compensation under this Section
27(c) and setting forth the additional amount or amounts to be paid to
it hereunder shall be conclusive in the absence of manifest error. In
determining such amount, the Lessor may use any reasonable averaging
and attribution methods. Nothing in this Section 27(c) shall require
the Lessor to disclose any information about its tax affairs or
interfere with, limit or abridge the right of the Lessor to arrange its
tax affairs in any manner in which it desires.
(iv) The provisions of this Section 27(c) shall (i)
subject to the provisions of Section 21(i), be applicable with respect
to any assignee or participant of
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the Lessor and any calculations required by such provisions shall be
made based upon the circumstances of the Lessor, assignee or
participant and (ii) constitute a continuing agreement and shall
survive for a period of one year after the termination of this Lease
and the payment in full of all Rent.
(d) Base Rate Substituted for Adjusted LIBO Rate. If (i) the
obligation of the Lessor to make an Advance of any Facility Cost, or to continue
to accrue Basic Rent, based on the Adjusted LIBO Rate has been suspended
pursuant to Section 27(b) or (ii) the Lessor has demanded compensation under
Section 27(c), and the Lessee shall, by at least 5 Business Days' prior notice
to the Lessor, have elected that the provisions of this Section 27(d) shall
apply to the Lessor, then, unless and until the Lessor notifies the Lessee that
the circumstances giving rise to such suspension or demand for compensation no
longer apply, after the Basic Rent made or maintained based upon the Adjusted
LIBO Rate has been repaid, all Advances of any Facility Cost, or accrual of
Basic Rent, that would otherwise be made or maintained by the Lessor based upon
the Adjusted LIBO Rate shall be made or, from the beginning of the next Rental
Period be maintained instead based upon the Base Rate, plus the Applicable
Margin.
(e) Compensation. Upon the request of the Lessor, delivered to
the Lessee, the Lessee shall pay to the Lessor such amount or amounts as shall
compensate the Lessor for any loss, cost or expense (but not loss of margin or
profit) incurred by the Lessor as a result of:
(i) any payment or prepayment (whether due to a
voluntary prepayment or the occurrence of the Lease Termination Date
for any reason) of Basic Rent on a date other than the last day of the
Rental Period therefor, or payment of any Facility Cost on which Basic
Rent accrued based on the Adjusted LIBO Rate on any day other than the
last day of the Rental Period therefor, or any failure to prepay any
Facility Cost on the date specified for such prepayment by the Lessee
in a notice to the Lessor; or
(ii) any failure by the Lessee to cause the funding
of the purchase of any part of the Facility pursuant to the Agency
Agreement to occur on the date for such funding as specified in the
applicable notice delivered pursuant to the Agency Agreement (other
than by reason of a default by the Lessor);
such compensation to include, without limitation, as applicable, an amount equal
to the excess, if any, of (x) the rate at which Basic Rent which would have
accrued on the amount so paid or prepaid or not prepaid or with respect to which
such funding did not occur for the period from the date of such payment,
prepayment or failure to prepay or fund to the last day of the then current
Rental Period for such payment of Basic Rent (in the case of a failure to prepay
or cause such funding, the Rental Period for such Basic Rent which would have
commenced on the date of such failure to prepay or cause such funding determined
on the basis of the applicable rate for Basic Rent provided for herein) over (y)
the rate of interest the Lessor would have paid (as determined by the Lessor) on
deposits in Dollars in an amount comparable to the then outstanding Facility
Cost and having terms comparable to such period placed with it by leading banks
in the London interbank market.
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(f) Payments and Computations. Each determination by the
Lessor of Basic Rent or an increased cost or increased capital or of illegality
hereunder shall be conclusive and binding for all purposes (absent manifest
error) if made reasonably and in good faith.
(g) Limitation on Liability. The Lessee's liability for any
indemnification arising under this Section 27 during the Construction Term,
other than from a Fully Indemnifiable Event, shall be limited to such amount as
will not cause the liability of the Lessee under this Lease to exceed the
Construction Term Recourse Amount.
Section 28. Conditions Precedent.
(a) Closing; Conditions Precedent to Effectiveness of this
Lease. On the Closing Date, at such place as the parties hereto shall agree,
this Lease and each of the Operative Documents shall be duly executed and
delivered by the parties to such documents. This Lease shall become effective
when (i) it shall have been executed by the Lessor and the Lessee, and (ii) the
Lessor shall have received the following, each being in form and substance
satisfactory to the Lessor:
(i) Certificates of the Lessee and Guarantors. A
Certificate of the Secretary or Assistant Secretary of the Lessee and
each Guarantor setting forth (i) resolutions of its board of directors
authorizing its execution, delivery and performance of the Operative
Documents to which it is a party, (ii) the identities and incumbency,
and containing the specimen signatures, of its Authorized Officers and
(iii) true and correct copies of its articles or certificate of
incorporation and the bylaws (or other organizational documents). The
Lessor may conclusively rely on such certificate until the Lessor
receives notice in writing from the Lessee or the relevant Guarantor to
the contrary.
(ii) Opinion of the Lessee's and Guarantors'
Counsel. A favorable opinion or opinions of general or special counsel
to the Lessee and Guarantors', in substantially the form of Exhibit B,
and as to such other matters as the Lessor may reasonably request.
(iii) Execution and Delivery of Operative Documents.
Each of the other Operative Documents, duly completed and executed in
sufficient number of counterparts for recording, where appropriate.
(iv) Recordation of Lease and Financing Statements.
This Lease (or a memorandum thereof, as determined by the Lessor) and
all related financing statements and other requisite filing documents
shall have been duly filed in the appropriate offices and, to the
fullest extent allowed by applicable law, all costs and taxes
associated with such filing shall have been paid or provided for by the
Lessee.
(v) Insurance Certification. The Lessor shall have
received a report by a firm of independent insurance brokers or
consultants chosen by the Lessee (i) setting forth the insurance
obtained, and to be obtained pursuant to this Lease, with respect to
the Facility and the Lessee's operations with respect thereto, and (ii)
certifying that in the opinion of such firm, such insurance complies
with the requirements of this Lease and, as
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to amounts, coverage and provisions, constitutes reasonable and
customary coverage against risks customarily insured against affecting
the Facility.
(vi) Financial Statements. The Lessor shall have
received the financial statements described in Section 29(d).
(vii) Receipt of Facility Plan. The Lessor shall
have received a copy of the Facility Plan.
(viii) Environmental Matters. The Lessor shall have
received the Environmental Assessment.
(ix) Soil Tests. The Lessor shall have received the
Soil Test Reports.
(x) Survey. The Lessor shall have received the
Survey of the Site.
(xi) Appraisal. The Lessor shall have received an
Approved Appraisal of the Facility, which Approved Appraisal shall be
in form and substance satisfactory to the Lessor, and shall indicate
(i) the estimated fair market value of the Facility as of the Lease
Commencement Date, and (ii) that the projected fair market value of the
Facility as of the expiration of (A) the Construction Term and (B) the
Basic Term (in each case after giving effect to the proposed
Improvements to be renovated or constructed on the Site in accordance
with the Plan), is not less than the Facility Cost.
(xii) Title Insurance. A title insurance company
acceptable to the Lessor in its reasonable discretion shall have
issued, or provided the Lessor with evidence satisfactory to the Lessor
that such title insurance company is irrevocably obligated to issue
immediately after closing of the acquisition of the Site by the Lessor,
an owner's title policy issued to the Lessor insuring the Lessor as
holder of a leasehold interest in the Site pursuant to the Ground Lease
and, in the event that the Lease is ever deemed to be a mortgage, as
mortgagee of the Facility under this Lease.
(xiii) Subsidiary Guaranty. The Lessor shall have
received the Subsidiary Guaranty executed by each Subsidiary Guarantor.
(xiv) Parent Guaranty. The Lessor shall have
received the Parent Guaranty executed by the Parent.
(xv) Contribution Agreement. The Lessor shall have
received the Contribution Agreement executed by the Lessee and each
Guarantor.
(xvi) Other. Such other documents as the Lessor or
special counsel to the Lessor may reasonably request.
(b) Conditions to Initial and Subsequent Advances. The
obligation of the Lessor to make the initial Advances and each subsequent
Advance pursuant to this Lease is subject to the following further conditions
precedent:
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(i) Receipt of Advance Notice. The Lessor shall have
received an Advance Notice with regard to each Advance, containing the
information required by Section 3(b)(i), which shall be true and
correct and shall be duly and properly executed and completed by the
Lessee as Acquisition/Construction Agent for the Lessor.
(ii) No Default. Immediately before and after such
Advance is made and after the application of the proceeds thereof, no
Default or Event of Default shall have occurred and be continuing.
(iii) Accuracy of Representations, etc. During the
Basic Term, each of the representations and warranties of the Lessee
and each Guarantor contained in the Operative Documents shall be true
and correct in all material respects on and as of the date of such
Advance (except for any representations which were correct on the date
of this Lease but are not correct on the date of any Advance because of
a change permitted by the terms of this Lease or any other Operative
Document).
(iv) Title. During the Basic Term, the Lessor shall
have good and marketable title to the Facility; and the Lessor shall
have received executed copies of all Related Contracts requested by it.
(v) Receipt of Applicable Permits. During the Basic
Term, all Permits that are or will become Applicable Permits shall have
been obtained, except Applicable Permits customarily obtained or which
are permitted by Governmental Requirements to be obtained after the
date of the requested Advance (in which case the Lessee, having
completed all appropriate due diligence in connection therewith, shall
have no reason to believe that such Permits will not be granted in the
usual course of business prior to the date that such Permits are
required by Governmental Requirements). All such obtained Permits shall
be in proper form, in full force and effect and not subject to any
appeal or other unsatisfied contest that may allow modification or
revocation thereof.
(vi) Casualties. The Facility shall not have
suffered (i) a Loss Event or (ii) a Casualty Occurrence other than a
Casualty Occurrence for which a plan acceptable to the Lessor for
replacing, or causing to be replaced, the parts of the Facility that
are the subject of such Casualty Occurrence has been provided to the
Lessor.
(vii) Taxes, Filings, Recordings. All filings or
recordings reasonably considered necessary or desirable by the Lessor
shall have been completed and all taxes and fees in connection
therewith, and all Impositions with respect to the Facility that are
then due and payable, shall have been paid by the Lessee.
Each acceptance of an Advance hereunder shall be deemed to be a representation
and warranty by the Lessee on the date of such funding as to the facts specified
in each subsections of this Section 28(b).
Notwithstanding anything to the contrary contained in this Lease or in any other
Operative Document, the Lessor shall remain obligated during the Construction
Term pursuant to and in accordance with this Lease and the other Operative
Documents to fund, or reimburse the Acquisition/Construction Agent (in such
capacity or in its capacity as the Lessee) for, any
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46
Facility Costs incurred by the Acquisition/Construction Agent (in such capacity
or in its capacity as the Lessee) pursuant to and in accordance with the
Operative Documents (and not in violation of Section 1.1 of the Agency
Agreement).
(c) Conditions Precedent for the Benefit of Lessor. All
conditions precedent to the obligations of the Lessor to make any Advance are
imposed hereby solely for the benefit of the Lessor, and no other Person may
require satisfaction of any such condition precedent or be entitled to assume
that the Lessor will refuse to make any Advance in the absence of strict
compliance with such conditions precedent.
(d) Closing. On the Closing Date (or in the case of clause
(b), as soon thereafter as the applicable closing conditions shall have been
satisfied), at such place as the parties hereto shall agree:
(i) this Lease and each of the Operative Documents
shall be duly executed and delivered by the parties to such documents;
and
(ii) subject to the satisfaction of the conditions
precedent specified in Section 28(a) and 28(b), the Lessor shall make
the initial Advances in the amounts set forth in the Advance Notice
given by the Lessee, up to an aggregate amount not in excess of the
Commitment, in immediately available funds to the account of the
Lessee, as Acquisition/Construction Agent for the Lessor, may direct.
Section 29. The Lessee's Representations and Warranties. The Lessee
represents and warrants to the Lessor that:
(a) Corporate Existence and Power. The Lessee is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of North Carolina. The Lessee is duly qualified to transact business in
every jurisdiction where, by the nature of its business, such qualification is
necessary, except for any failure to comply with the foregoing which does not
have a Material Adverse Effect, and has all corporate powers and all government
authorizations, licenses, consents and approvals required to engage in its
business and operations as now conducted, except for any failure to comply with
the foregoing which does not have a Material Adverse Effect.
(b) Corporate and Governmental Authorization. The execution,
delivery and performance by the Lessee of the Operative Documents to which it is
a party (i) are within its corporate powers, (ii) have been duly authorized by
all necessary corporate action, (iii) require no action by or respect of or
filing with, any governmental body, agency or official, (iv) do not contravene
or constitute a default under, any material provision of applicable law or
regulation or of the certificate of incorporation or by-laws of the Lessee or,
to the best of the Lessee's knowledge, any material agreement relating to Debt,
Judgment, injunction or other instrument relating to Debt binding upon the
Lessee or any Subsidiary and (v) do not result in the creation or imposition of
any Lien on any asset of the Lessee or any Subsidiary or on the Facility.
(c) Binding Effect. The Operative Documents to which the
Lessee is a party constitute valid and binding agreements of the Lessee
enforceable in accordance with their respective terms, provided that the
enforceability hereof and thereof is subject in each case to
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47
general principles of equity and to bankruptcy, insolvency and similar laws
affecting the enforcement of creditor's rights generally.
(d) Financial Information. The consolidated balance sheet of
the Parent and its Consolidated Subsidiaries as of January 28, 2001, and the
related consolidated statements of income, stockholders' equity and cash flows
for the Fiscal Year then ended, reported on by PriceWaterhouseCoopers, copies of
which have been delivered to the Lessor fairly present, in conformity with GAAP,
the consolidated financial position of the Parent and its Consolidated
Subsidiaries as of such date and the consolidated results of operations and cash
flows for such Fiscal Year.
(e) No Litigation. There is no action, suit or proceeding
pending, or to the knowledge of the Lessee, threatened, against or affecting the
Lessee or any Subsidiary before any court or arbitrator or any governmental
body, agency or official which could have a Material Adverse Effect or which in
any manner draws into question the validity of or could impair in any material
respect the ability of the Lessee or any Subsidiary to perform its obligations
under any of the Operative Documents to which it is a party.
(f) Compliance with ERISA.
(i) To the best of the Lessee's knowledge, the
Lessee and each member of the Controlled Group has fulfilled its
obligations under the minimum funding standards of ERISA and the Code
with respect to each Plan and is in compliance in all material respects
with the presently applicable provisions of ERISA and the Code, and has
not incurred any liability to the PBGC or a Plan under Title IV of
ERISA, provided, that the Lessee makes no representation or warranty
under this Section 29(f)(i) as to any Subsidiary for matters pertaining
to periods prior to the date on which such Subsidiary became a
Subsidiary except to the extent that the Lessee received any such
representations and/or warranties from the seller (or any of its
affiliates) of any relevant Subsidiary in connection with the
acquisition of any relevant Subsidiary.
(ii) To the best of the Lessee's knowledge, neither
the Lessee nor any member of the Controlled Group is or ever has been
obligated to contribute to any Multiemployer Plan provided, that the
Lessee makes no representation or warranty under this Section 29(f)(ii)
as to any Subsidiary for matters pertaining to periods prior to the
date on which such Subsidiary became a Subsidiary except to the extent
that the Lessee received any such representations and/or warranties
from the seller (or any of its affiliates) of any relevant Subsidiary
in connection with the acquisition of any relevant Subsidiary.
(g) Compliance with Laws; Payment of Taxes. The Lessee and, to
the best of the Lessee's knowledge, each Material Subsidiary, is in compliance
with all applicable laws, regulations and similar requirements of governmental
authorities, except where such compliance is being contested in good faith
through appropriate proceedings or does not have a Material Adverse Effect.
There have been filed on behalf of Lessee and, to the best of the Lessee's
knowledge, each Material Subsidiary, all Federal, state and material local
income, excise, property and other tax returns which are required to be filed by
them and all taxes due pursuant
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to such returns or pursuant to any assessment received by or on behalf of the
Lessee, or to the best of the Lessee's knowledge, any Material Subsidiary, have
been paid or are being contested in good faith or, if unpaid and uncontested,
are in immaterial amounts. The charges, accruals and reserves on the books of
the Lessee and, to the best of the Lessee's knowledge, each Material Subsidiary,
in respect of taxes or other governmental charges are, in the opinion of the
Lessee, adequate. To the best of the Lessee's knowledge, United States income
tax returns of the Lessee and each Subsidiary which is a U.S. Person have been
examined and closed through the Fiscal Year ended January, 1993.
(h) Investment Company Act. Neither the Lessee nor any of
Lessee's Subsidiaries is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(i) Public Utility Holding Company Act. Neither the Lessee nor
any of the Lessee's Subsidiaries is a "holding company", or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company", as such terms are defined in the
Public Utility Holding Company Act of 1935, as amended.
(j) Ownership of Property; Liens. The Lessee has title to or
leasehold or other interests in its material properties sufficient for the
conduct of its business, and none of such property is subject to any Lien except
Permitted Liens.
(k) No Default. Neither the Lessee nor any of the Lessee's
Subsidiaries is in default under or with respect to any agreement, instrument or
undertaking to which it is a party or by which it or any of its property is
bound which could have or cause a Material Adverse Effect. No Default or Event
of Default has occurred and is continuing.
(l) Full Disclosure. To the best of the Lessee's knowledge,
all written information heretofore furnished by the Lessee, for itself and as
agent for the Lessor, to the Lessor for purposes of or in connection with this
Lease, any of the Operative Documents, or any transaction contemplated hereby or
thereby is, and all such information hereafter furnished by the Lessee, for
itself and as Acquisition/Construction Agent for the Lessor, to the Lessor will
be, true, accurate and complete in every material respect or based on reasonable
estimates on the date as of which such information is stated or certified.
(m) Environmental Matters.
(i) To the best of the Lessee's actual knowledge
(without, as to Properties not located in the United States of America,
having performed any further independent inquiry therefor solely in
connection with this Lease), neither the Lessee nor any Subsidiary of
the Lessee is aware that it is subject to any Environmental Liability
which could have or cause a Material Adverse Effect, neither the Lessee
nor any Subsidiary of the Lessee (except in respect of immaterial
Environmental Liabilities in de minimis amounts) has received notice
that it has been designated as a potentially responsible party under
CERCLA or under any state statute similar to CERCLA, and neither the
Site nor any of the Properties located in the United States and owned
by the
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Lessee or any Subsidiary of the Lessee, has been identified on any
current or proposed (1) National Priorities List under 40 C.F.R.ss.300,
(2) CERCLIS list or (3) any list arising from a state statute similar
to CERCLA.
(ii) To the best of the Lessee's actual knowledge
(without having performed any further independent inquiry therefor
solely in connection with this Lease), no Hazardous Materials have been
or are being used, produced, manufactured, processed, treated,
recycled, generated, stored, disposed of, managed or otherwise handled
at, or shipped or transported to or from the Site or from any of the
Properties owned by the Lessee or any Subsidiary of the Lessee or are
otherwise present at, on, in or under the Site or any of the Properties
owned by the Lessee or any Subsidiary of the Lessee, or, to the best of
the actual knowledge of the Lessee, at or from any adjacent site or
facility, except for Hazardous Materials, such as cleaning solvents,
pesticides and other materials used, produced, manufactured, processed,
treated, recycled, generated, stored, disposed of, managed, or
otherwise handled in minimal amounts in the ordinary course of business
in compliance with all applicable Environmental Requirements.
(iii) The Lessee represents, for itself and each
Subsidiary of the Lessee, that to the best of their actual knowledge
(without having performed any further independent inquiry therefor
solely in connection with this Lease), the Lessee and each of the
Lessee's Subsidiaries is in compliance in all material respects with
all Environmental Requirements in connection with the operation of the
Facility and the Properties and the respective businesses of the Lessee
and each Subsidiary of the Lessee.
(iv) Except to the extent specified on Schedule
29(m), (1) there are no Hazardous Materials on the Site, other than
minimal amounts of cleaning solvents, pesticides and other similar
materials used, produced, manufactured, processed, treated, recycled,
generated, stored, disposed, managed, or otherwise handled in the
ordinary course of business or in management or maintenance of the
Facility, (2) no Hazardous Material has migrated from the Site to,
upon, about or beneath other properties, (3) no Hazardous Material has
migrated or threatened to migrate from other properties to, upon, about
or beneath the Site and (4) all Hazardous Materials or solid wastes
generated by the Facility have at all times been transported, treated
and disposed of in compliance with Environmental Requirements.
(v) Except to the extent specified on Schedule
29(m), (1) there is not, nor has there been, constructed, placed,
deposited, stored, disposed of or located on the Site any asbestos in
any form, (2) no underground improvements, including treatment or
storage tanks, pumps, or water xxxxx, are or have been located on the
Site, (3) there are no polychlorinated biphenyls ("PCBs") or
transformers, capacitors, ballasts, machinery, fixtures or other
equipment which contain PCBs constructed, placed, deposited, stored,
disposed of or located on the Site, (4) the uses and activities of, on
or relating to the Facility have at all times complied in all material
respects with all Environmental Requirements, and the use which the
Lessee and its Affiliates, Subsidiaries and/or Sublessees make of the
Facility will not result in the disposal or other Environmental Release
of any Hazardous Material, (5) the Lessee has obtained all permits
necessary under applicable Environmental Requirements, and (6) the Site
has not been, and is not
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now, listed on CERCLIS, the Environmental Protection Agency's list of
violating facilities established pursuant to the Clean Water Act or the
National Priorities List established pursuant to CERCLA.
(vi) Except to the extent specified on Schedule
29(m), (1) there exists no Judgment or injunction outstanding, or
litigation, action, suit, claim (including citation or directive) or
proceeding pending or, to the knowledge of the Lessee or of its
Affiliates, Subsidiaries and/or Sublessees, threatened, relating to the
ownership, use, maintenance or operation of the Facility by any person
or entity, or arising from any alleged violation of Environmental
Requirements, or any alleged liability for Environmental Damages, (2)
there are no existing facts or conditions that could give rise to any
such violation or liabilities, (3) there have been no written or, to
the knowledge of the Lessee or any of its Affiliates, Subsidiaries
and/or Sublessees, oral reports of environmental investigations,
audits, studies, tests, reviews or other analyses conducted by or which
have been presented to or are in the possession of the Lessee or any of
its Affiliates, Subsidiaries and/or Sublessees, relating to the
Facility which have not been delivered to the Lessor and (4) neither
the Lessee nor, to the knowledge of the Lessee, any of its Affiliates,
Subsidiaries and/or Sublessees, any other person or entity has received
any notice or other communication concerning any alleged violation of
Environmental Requirements, whether or not corrected to the
satisfaction of the appropriate authority, or any notice or other
communication concerning alleged liability for Environmental Damages in
connection with the Facility.
(vii) From the date hereof, there shall be no actual
or threatened Environmental Release of a Hazardous Material on or from
the Facility caused by the Lessee or any of its Affiliates,
Subsidiaries and/or Sublessees.
(viii) Except to the extent specified on Schedule
29(m), the Lessee (a) has obtained all permits, licenses, and other
authorizations which are required under Environmental Requirements in
association with the Facility; and (b) will be in full compliance with
all terms and conditions of such required permits, licenses, and other
authorizations associated with the Facility.
(ix) No permits or licenses are required to be
obtained or maintained in connection with the use, operation, or
ownership of the Facility arising from any part thereof which
constitute (i) "wetlands" under any Environmental Requirement, or (ii)
a habitat for a species which is deemed to be endangered under any
Environmental Requirement, nor are there any ongoing or continuing
obligations regarding any part of the Facility which constitutes
wetlands. There are no species of plants or animals located on any part
of the Facility which are classified as threatened or endangered under
any Environmental Requirement. There have been no written or, to the
knowledge of the Lessee or any of its Affiliates, Subsidiaries and/or
Sublessees, oral wetlands delineations conducted by or which have been
presented to or are in the possession of the Lessee or any of its
Affiliates, Subsidiaries and/or Sublessees relating to the Facility
which have not been delivered to the Lessor.
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(n) Capital Stock. All Capital Stock, debentures, bonds, notes
and all other securities of the Lessee presently issued and outstanding are
validly and properly issued in accordance with all applicable laws in all
material respects, including but not limited to, the "Blue Sky" laws of all
applicable states and the federal securities laws.
(o) Use of Proceeds; Margin Stock. The proceeds of fundings of
Advances by the Lessor are being used to finance the acquisition of the Facility
by the Lessor pursuant to the Agency Agreement, including the Improvements to be
made thereto and the design, renovation, construction and installation thereof.
The Lessee is not engaged principally, or as one of its important activities, in
the business of purchasing or carrying any Margin Stock, and no part of the
proceeds of fundings of the Facility Cost will be used to purchase or carry any
Margin Stock or to extend credit to others for the purpose of purchasing or
carrying any Margin Stock, or be used for any purpose which violates, or which
is inconsistent with, the provisions of Regulations T, U or X.
(p) Insolvency. After giving effect to the execution and
delivery of the Operative Documents to which it is a party, the Lessee will not
be "insolvent," within the meaning of such term as defined in ss. 101 of Title
11 of the United States Code, as amended from time to time, or be unable to pay
its debts generally as such debts become due, or have an unreasonably small
capital to engage in any business or transaction, whether current or
contemplated.
(q) Facility Plan. The Facility Plan has been prepared in good
faith on the basis of assumptions deemed reasonable by the Lessee and accurately
reflects in all respects all material costs currently anticipated to be incurred
in connection with achieving Completion. The Facility Plan sets forth the
Lessee's good faith estimation of the schedule for achieving Completion. All
material agreements and instruments comprising the Facility Plan are in full
force and effect and the Lessee is not in default of its obligations thereunder
in any respect that would reasonably be expected to have a Material Adverse
Effect. To the best knowledge of the Lessee, there are no agreements,
instruments, licenses or other rights necessary to own, operate, lease or use
the Facility the failure to obtain which would reasonably be expected to result
in a Material Adverse Effect, other than the Applicable Permits, the documents
and instruments comprising the Facility Plan, and the Operative Documents; and
renovation, construction, ownership, operation, leasing or use of the Facility
by the Lessee (and after the expiration or termination of the Lease, the
renovation, construction, ownership, operation, leasing or use of the Facility
by the Lessor or its successors or assigns) does not and will not infringe on,
or otherwise violate, any patents, patent applications, trademarks (whether
registered or not), trademark applications, trade names, proprietary computer
software, or copyrights of any Person in any manner that would reasonably be
expected to have a Material Adverse Effect.
(r) Subsidiaries. As of the Closing Date, all Subsidiaries of
the Parent are listed on Schedule 29(r).
Section 30. Covenants. The Lessee covenants and agrees with the Lessor
to comply or cause compliance with the following covenants until the Commitment
shall have terminated and all amounts payable to the Lessor under this Lease and
the other Operative Documents have been paid in full:
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(a) Information. The Lessee will deliver to the Lessor:
(i) as soon as available and in any event within 90
days after the end of each Fiscal Year, a consolidated balance sheet of
the Parent and its Consolidated Subsidiaries as of the end of such
Fiscal Year and the related consolidated statements of income,
shareholders' equity and cash flows for such Fiscal Year, setting forth
in each case in comparative form the figures for the previous fiscal
year, all certified by PriceWaterhouseCoopers LLP or other independent
public accountants of nationally recognized standing, with such
certification to be free of exceptions and qualifications not
acceptable to the Lessor;
(ii) as soon as available and in any event within 45
days after the end of each of the first 3 Fiscal Quarters of each
Fiscal Year, a consolidated balance sheet of the Parent and its
Consolidated Subsidiaries as of the end of such Fiscal Quarter and the
related statement of income and statement of cash flows for such Fiscal
Quarter and for the part of the Fiscal Year ended at the end of such
Fiscal Quarter, setting forth in each case in comparative form the
figures for the corresponding Fiscal Quarter and the corresponding
portion of the previous Fiscal Year, all certified (subject to normal
year-end adjustments) as to fairness of presentation, GAAP and
consistency by the chief financial officer or the chief accounting
officer of the Lessee;
(iii) simultaneously with the delivery of each set
of financial statements referred to in paragraphs (i) and (ii) above, a
certificate, substantially in the form of Exhibit C (a "Compliance
Certificate"), of the chief financial officer of the Parent (x) setting
forth in reasonable detail the calculations required to establish
whether the Lessee was in compliance with the requirements of Section
30(d) and Sections 30(s) through 30(z), inclusive, and Section 30(aa)
on the date of such financial statements and (y) stating whether any
Default exists on the date of such certificate and, if any Default then
exists, setting forth the details thereof and the action which the
Lessee is taking or proposes to take with respect thereto;
(iv) simultaneously with the delivery of each set of
annual financial statements referred to in paragraph (i) above, a
statement of the firm of independent public accountants which reported
on such statements to the effect that nothing has come to their
attention to cause them to believe that any Default existed on the date
of such financial statements;
(v) promptly upon the mailing thereof to the
shareholders of the Parent generally, copies of all financial
statements, reports and proxy statements so mailed;
(vi) promptly upon the filing thereof, copies of all
registration statements (other than the exhibits thereto and any
registration statements on Form S-8 or its equivalent) and annual,
quarterly or monthly reports which the Parent or any of its
Subsidiaries shall have filed with the U.S. Securities and Exchange
Commission;
(vii) if and when any member of the Controlled Group
(x) gives or is required to give notice to the PBGC of any "reportable
event" (as defined in Section 4043
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of ERISA) with respect to any Plan which might constitute grounds for a
termination of such Plan under Title IV of ERISA, or knows that the
plan administrator of any Plan has given or is required to give notice
of any such reportable event, a copy of the notice of such reportable
event given or required to be given to the PBGC; (y) receives notice of
complete or partial withdrawal liability under Title IV of ERISA, a
copy of such notice; or (z) receives notice from the PBGC under Title
IV of ERISA of an intent to terminate or appoint a trustee to
administer any Plan, a copy of such notice;
(viii) promptly, and, in any event, within 5
Business Days after the Lessee becomes aware of any Default or Event of
Default, a certificate of the chief financial officer or the chief
accounting officer of the Lessee setting forth the details thereof and
the action which the Lessee is taking or proposes to take with respect
thereto;
(ix) promptly upon becoming aware of the occurrence
of either a Loss Event or a Casualty Occurrence, or any other event or
condition requiring notice under either Section 7 or Section 8 of this
Lease, the Lessee shall give the Lessor written notice thereof, which
notice shall specify the damage or loss to the Facility in reasonable
detail; and
(x) from time to time such additional information
regarding the financial position or business of the Lessee and the
Subsidiaries of the Lessee as the Lessor may reasonably request.
Information required to be delivered pursuant to Sections 30(a)(i), 30(a)(ii) or
30(a)(vi) above shall be deemed to have been delivered on the date on which the
Lessee provides notice to the Lessor that such information has been posted on
the Parent's website on the Internet at the website address listed on the
signature pages hereof, at xxx.xxx/xxxxx/xxxxxxxx.xxx or at another website
identified in such notice and accessible by the Lessor without charge; provided
that (i) such notice may be included in a Compliance Certificate delivered
pursuant to Section 30(a)(iii) and (ii) the Lessee shall deliver paper copies of
the information referred to in Sections 30(a)(i), 30(a)(ii) or 30(a)(vi) to the
Lessor upon any request for such delivery.
(b) Maintenance and Inspection of Property, Books and Records.
The Lessee will keep books of record and account regarding this Lease and shall
maintain, on a current basis, books of proper record and account in conformity
with GAAP, consistently applied (to the extent applicable), which books shall
include copies of all Related Contracts and any amendments thereto and the
Facility Cost and of each material item of Property comprising or included in
the Facility, and shall provide copies of the foregoing to the Lessor from time
to time on request at the Lessee's expense. The Lessee will (i) keep proper
books of record and account in which full, true and correct entries in
conformity with GAAP shall be made of all dealings and transactions in relation
to its business and activities; and (ii) permit, and cause each Subsidiary to
permit, representatives of the Lessor (x) at the Lessor's expense prior to the
occurrence of a Default and (y) at the Lessee's expense after the occurrence of
a Default, to visit and inspect the Facility and the Site and any of the
Lessee's other properties, to examine and make abstracts from any of its books
and records and to discuss its affairs, finances and accounts with its officers,
employees and independent public accountants. The Lessor shall use commercially
reasonable efforts to give advance notice to the chief executive officer or the
chief financial officer of the Lessee of
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any intent to have any such discussions with the Lessee's officers, the
employees and independent public accountants (as applicable). The Lessee agrees
to cooperate and assist, in such visits and inspections, in each case at such
reasonable times and as often as may reasonably be desired.
(c) Maintenance of Existence. The Lessee shall maintain its
existence and carry on the major part of its business in substantially the same
fields as such business is now carried on and maintained.
(d) Consolidations, Mergers and Sales of Assets. The Lessee
will not, and will not permit any Subsidiary to, consolidate or merge with or
into, or sell, lease or otherwise transfer all or any substantial part of its
assets to, any other Person, or discontinue or eliminate any business line or
segment, provided that (i) the Lessee may merge with another Person if (A) such
Person is organized under the laws of the United States of America or one of its
states, (B) the Lessee is the Person surviving such merger and (C) immediately
after giving effect to such merger, no Default shall have occurred and be
continuing, (ii) Subsidiaries of the Lessee may merge with one another, provided
that if either party to the merger is a Subsidiary Guarantor, the surviving
entity must be a Subsidiary Guarantor, (iii) any Subsidiary may merge with
another Person if such merger is a Permitted Acquisition and the Subsidiary is
the Person surviving such merger, and (iv) the foregoing limitation on the sale,
lease or other transfer of assets and on the discontinuation or elimination of a
business line or segment shall not prohibit, during any Fiscal Quarter, a
transfer of assets or the discontinuance or elimination of a business line or
segment (in a single transaction or in a series of related transactions) unless
the aggregate assets to be so transferred or utilized in a business line or
segment to be so discontinued, when combined with all other assets transferred,
and all other assets utilized in all other business lines or segments
discontinued, during such Fiscal Quarter and the immediately preceding 3 Fiscal
Quarters, either (x) constituted more than 10% of Consolidated Total Assets at
the end of the most recent Fiscal Year immediately preceding such Fiscal
Quarter, or (y) contributed more than 10% of Consolidated Operating Profits
during such Fiscal Quarter and the 3 Fiscal Quarters immediately preceding such
Fiscal Quarter.
(e) Dissolution. The Lessee shall not, and shall not permit
any Subsidiary Guarantor to, wind-up, dissolve or liquidate, except through
corporate reorganization to the extent permitted by Section 30(d).
(f) Use of Proceeds. The proceeds of Advances by the Lessor
will be used to fund the Facility Cost and other obligations expressly provided
for herein. Without limiting the generality of the foregoing, no portion of the
proceeds of Advances will be used by the Lessee (i) in connection with, whether
directly or indirectly, any tender offer for, or other acquisition of, stock of
any corporation with a view towards obtaining control of such other corporation,
except in a negotiated, consensual transaction (ii) directly or indirectly, for
the purpose, whether immediate, incidental or ultimate, of purchasing or
carrying any Margin Stock or (iii) for any purpose in violation of any
applicable Governmental Requirement.
(g) Compliance with Laws; Payment of Taxes. The Lessee will,
and will cause each of its Subsidiaries to, comply in all material respects with
applicable laws (including but not limited to ERISA), regulations and similar
requirements of governmental authorities (including
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but not limited to PBGC), except where the necessity of such compliance is being
contested in good faith through appropriate proceedings or if failure to comply
does not have a Material Adverse Effect. The Lessee will pay, and will cause
each of its Subsidiaries to pay, prior to the date on which penalties attach
thereto, all taxes, assessments, governmental charges, claims for labor,
supplies, rent and other obligations which, if unpaid, might become a lien
against any part of the Facility or against Property of the Lessee or any
Subsidiary, except liabilities being contested in good faith and against which,
if requested by the Lessor, the Lessee will or will cause the relevant
Subsidiary, as applicable, to set up reserves in accordance with GAAP.
(h) Insurance. The Lessee will maintain, and will cause each
of its Subsidiaries to maintain (either in the name of the Lessor or the Lessee,
as applicable), with financially sound and reputable insurance companies,
insurance on such of its property in at least such amounts, and with such
deductibles, and against at least such risks as are usually insured against in
the same general area by companies of established repute engaged in the same or
similar businesses. The Lessee will deliver or cause to be delivered to the
Lessor, promptly upon request of the Lessor, and in any event on January 1st of
each calendar year, commencing with the first calendar year commencing after the
Closing Date, a report by a firm of independent insurance brokers or consultants
chosen by the Lessee and acceptable to the Lessor (a) setting forth the
insurance obtained pursuant to Section 14, including, without limitation, the
amounts thereof, the names of the insurers and the property, hazards and risks
covered thereby, and certifying that the same comply with the requirements of
Section 14, that all premiums then due and payable thereon have been paid and
that the same are in full force and effect, that the Lessor has been named as
additional insured and loss payee, as its interests may appear, under each such
policy, and is not liable for payment of premiums thereunder, that such policies
may not be cancelled without at least 30 days prior notice to the Lessor with an
opportunity to cure any default thereunder, and (b) certifying that in the
opinion of such firm, such insurance complies with the requirements of the Lease
and, as to amounts, coverage and provisions, constitutes reasonable and
customary coverage against risks customarily insured against which would affect
the Facility, or setting forth any recommendations of such independent insurance
brokers or consultants as to additional insurance, if any, reasonably required
for the protection of the interests of the Lessee and the Lessor in light of
available insurance coverage and practice in the business engaged in by the
Lessee at the Site. The Lessor shall be entitled to rely on such reports without
further investigation of the facts and circumstances set forth therein.
(i) Change in Fiscal Year. The Lessee will not permit the
Parent to change the Parent's Fiscal Year without the consent of the Lessor.
(j) Maintenance of Property. The Lessee shall maintain and
preserve the Facility in accordance with the requirements of this Lease. The
Lessee shall, and cause each Subsidiary to, maintain and preserve all of their
respective properties and assets, in good condition, repair and working order,
ordinary wear and tear excepted.
(k) Environmental Notices. The Lessee shall furnish to the
Lessor prompt written notice of all Environmental Liabilities, pending or
threatened Environmental Proceedings, Environmental Notices, Environmental
Judgments and Orders, and Environmental Releases at, on, in, under or in any way
affecting the Facility, the Site, any of the Lessee's Properties, any
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Properties of any Subsidiary, or any adjacent property, and all facts, events,
or conditions actually known to the Lessee that could reasonably be expected to
lead to any of the foregoing.
(l) Environmental Matters. The Lessee and its Subsidiaries
shall not, and shall not permit any Third Party to, use, produce, manufacture,
process, treat, recycle, generate, store, dispose of, manage, or otherwise
handle, or ship or transport to or from any of the Facility or Site or the
Properties any Hazardous Materials except for Hazardous Materials such as
cleaning solvents, pesticides and other similar materials used, produced,
manufactured, processed, treated, recycled, generated, stored, disposed of,
managed, or otherwise handled in minimal amounts in the ordinary course of
business or of management or maintenance of the Facility or the Site or the
Properties in material compliance with all applicable Environmental
Requirements.
(m) Environmental Release. The Lessee agrees that upon the
occurrence of an Environmental Release, except for any Environmental Release
which occurred in substantial compliance with all Environmental Requirements, at
or on the Facility or the Site or any of the Properties owned or operated by it
or any Material Subsidiary, it will act promptly to determine the extent of, and
to take appropriate remedial action to eliminate, any such Environmental
Release, whether or not ordered or otherwise directed to do so by any
Environmental Authority.
(n) Transactions with Affiliates. Neither the Lessee nor any
of its Subsidiaries shall enter into, or be a party to, any transaction with any
Affiliate or any Subsidiary (which Affiliate is not the Lessee or a Wholly Owned
Subsidiary), except as permitted by law and in the ordinary course of business
and pursuant to reasonable terms which are no less favorable to the Lessee than
would be obtained in a comparable arm's length transaction with a Person which
is not an Affiliate.
(o) Further Assurances. The Lessee will, and will cause each
of the Guarantors to, cure promptly any defects in the due execution and
delivery by it of the Operative Documents. The Lessee at its expense will
promptly execute and deliver to the Lessor upon request all such other and
further documents, agreements and instruments in compliance with or
accomplishment of the covenants and agreements of the Lessee in the Operative
Documents, including this Lease, or to further evidence and more fully describe
the Facility or any part thereof or to correct any item that the Lessee and the
Lessor agree constitutes an omission or error in the Operative Documents, or
more fully to state the existing security obligations set out herein or in any
of the Operative Documents, or to perfect, protect or preserve any Liens created
pursuant to any of the Operative Documents, or to make any recordings, to file
any notices, or obtain any consents, required by the terms of the Operative
Documents, all as may be necessary or appropriate in connection therewith.
(p) Encroachments. The Facility, when completed, shall be
situated wholly within the boundary lines of the Site and shall not encroach
upon any contiguous or adjoining Property (other than those parts of the Site
for which the Lessee has the right to locate and operate such parts pursuant to
use or operating agreements) and the Facility shall not violate any other
easements, rights-of-way, licenses or other agreements affecting the Site
therefor.
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(q) Liens, Etc. on the Facility. The Lessee covenants and
agrees that it shall not grant, create, assume or suffer to exist, any Liens
upon the Facility or any part thereof, other than Permitted Liens.
(r) Xxxx Xxxxx Xxxxxx Act Compliance. The Lessee shall make
all necessary filings and notifications under the Xxxx Xxxxx Xxxxxx Antitrust
Improvements Act of 1976, as amended, if any, and fully comply with the terms of
such Act (including any applicable interpretations thereunder) in connection
with any purchase or sale of any part of the Facility.
(s) [Intentionally Omitted]
(t) Investments. Neither the Parent nor any of its
Subsidiaries shall make Investments in any Person except:
(i) loans or advances to employees not exceeding
$500,000 in the aggregate principal amount outstanding at any time, in
each case made in the ordinary course of business and consistent with
practices existing on the Closing Date;
(ii) deposits required by government agencies or
public utilities in the ordinary course of business;
(iii) Investments made in accordance with the
Investment Policy attached hereto as Schedule 30(t) as in effect on the
date hereof without giving effect to any modifications thereto and
without giving effect to any Investments not expressly permitted by
Schedule 30(t) that are authorized by the Lessee's Investment Committee
or any other Person;
(iv) Joint Venture Investments, provided that
Non-Guarantor Joint Venture Investments shall not at any time exceed in
the aggregate the following percentages of Consolidated Tangible Net
Worth during the following periods:
Maximum Percentage
of Consolidated
Period Tangible Net Worth
------ ------------------
From and including the Closing Date 17.5%
through and including February 3, 2002
From and including February 4, 2002, 20%
through and including February 2, 2003
From and including February 3, 2003, 22.5%
through and including February 2, 2004
At all times on and after February 3, 2004 25%
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(v) loans and advances to employees and members of
the Board of Directors of the Parent in connection with the conversion
of the Long Term Incentive Plan of the Parent in an aggregate amount
not to exceed $3,000,000; and
(vi) Permitted Acquisitions (exclusive of Joint
Venture Investments);
provided, however, that immediately after giving effect to the making of any
Investment, no Default shall have occurred and be continuing.
(u) Limitation on Liens. Neither the Lessee nor any
Consolidated Subsidiary will create, assume or suffer to exist any Lien on any
asset not constituting part of the Facility (Liens on the Facility being
restricted by Section 30(q)) now owned or hereafter acquired by it, the Lessee
shall not permit any Subsidiary to incur any Debt, except:
(i) Liens existing on the date of this Lease
securing Debt outstanding on the date of this Lease in an aggregate
principal amount not exceeding $1,000,000;
(ii) any Lien existing on any specific fixed asset
of any Person at the time such Person becomes a Consolidated Subsidiary
and not created in contemplation of such event;
(iii) any Lien on any specific fixed asset securing
Debt incurred or assumed for the purpose of financing all or any part
of the cost of acquiring or constructing such asset, provided that (A)
such Lien attaches to such asset concurrently with or within 18 months
after the acquisition or completion of construction thereof, (B) such
Lien does not at any time encumber any other Property, and (C) the
amount of the Debt secured by such asset is not increased;
(iv) any Lien on any specific fixed asset of any
Person existing at the time such Person is merged or consolidated with
or into the Lessee or a Consolidated Subsidiary and not created in
contemplation of such event;
(v) any Lien existing on any specific fixed asset
prior to the acquisition thereof by the Lessee or a Consolidated
Subsidiary and not created in contemplation of such acquisition;
(vi) Liens securing Debt owing by any Subsidiary to
the Lessee;
(vii) any Lien arising out of the refinancing,
extension, renewal or refunding of any Debt secured by any Lien
permitted by any of the foregoing paragraphs of this Section 30(u),
provided that (x) such Debt is not secured by any additional assets,
and (y) the amount of such Debt secured by any such Lien is not
increased;
(viii) Liens incidental to the conduct of the
Lessee's business or the ownership of its assets which (i) do not
secure Debt and (ii) do not in the aggregate
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materially detract from the value of its assets or materially impair
the use thereof in the operation of its business;
(ix) any Lien on Margin Stock; and
(x) Liens not otherwise permitted by the foregoing
paragraphs of this Section 30(u) securing Debt (other than indebtedness
under this Lease or the other Operative Documents), in an aggregate
principal amount at any time outstanding not to exceed 2.5% of
Consolidated Tangible Net Worth;
Provided the aggregate amount of Debt secured by Liens permitted by the
foregoing paragraphs (i) through (ix) shall at no time exceed an aggregate
amount greater than 5% of Consolidated Tangible Net Worth.
(v) Fixed Charge Coverage Ratio. At the end of each Fiscal
Quarter, commencing with the Fiscal Quarter ending April 30, 2001, the Fixed
Charge Coverage Ratio for the Fiscal Quarter just ended and the immediately
preceding 3 Fiscal Quarters shall be greater than 1.85 to 1.0.
(w) Leverage Ratio. As at the end of each Fiscal Quarter,
commencing with the Fiscal Quarter ending April 30, 2001, the Consolidated
Leverage Ratio shall be less than 2.25 to 1.0.
(x) Minimum Consolidated Tangible Net Worth. Consolidated
Tangible Net Worth will at no time be less than $135,000,000 (the "Minimum
Level") plus the sum of 33% of the cumulative Reported Net Income of the Parent
and its Consolidated Subsidiaries during any period after April 30, 2001 (taken
as one accounting period), calculated quarterly at the end of each Fiscal
Quarter but excluding from such calculations of Reported Net Income for purposes
of this clause (x), any Fiscal Quarter in which the Reported Net Income of the
Parent and its Consolidated Subsidiaries is negative; provided that:
(i) the Minimum Level shall be reduced by the amount
of all goodwill (less goodwill attributable to minority interests) from
Permitted Acquisitions that close on or before July 31, 2002, that
should appear as such on a consolidated balance sheet of the Parent and
its Subsidiaries in accordance with GAAP; provided that the aggregate
amount of all such reductions shall not exceed $25,000,000; and
(ii) the Minimum Level shall be increased by the
amount of each increase in stockholders' equity of the Parent and its
Consolidated Subsidiaries as a result of each issuance of Capital Stock
or other equity securities by the Parent and its Subsidiaries to the
seller(s) pursuant to (and as consideration for) each Permitted
Acquisition that closes on or before July 31, 2002 (including, without
limitation, each conversion by each such seller of Debt for Capital
Stock or other equity securities of the Parent or any Subsidiary).
(y) Consolidated Total Liabilities to Consolidated Tangible
Net Worth. As at the end of each Fiscal Quarter, commencing with the Fiscal
Quarter ending on April 30, 2001, the
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ratio of Consolidated Total Liabilities to Consolidated Tangible Net Worth shall
not be greater than 0.75 to 1.0.
(z) Restricted Payments. The Lessee will not permit the Parent
to declare or make any Restricted Payments; provided, however, that the Parent
may:
(i) repurchase, redeem or otherwise retire for value
common stock of the Parent pursuant to a stock repurchase plan duly
approved by the Board of Directors of the Parent; and
(ii) during any Fiscal Year, the Parent may declare
and pay dividends on its common stock in an amount not to exceed 50% of
Consolidated Net Income for the immediately preceding Fiscal Year;
provided, further, that after giving effect to the payment of any such
Restricted Payment, no Default shall be in existence or be created thereby.
(aa) Additional Guarantors. With respect to any new Subsidiary
(other than a Consolidated Joint Venture) created or acquired after the Closing
Date, the Lessee shall, within 10 Business Days after such creation or
acquisition, cause such new Subsidiary (a) to become a party to the Guaranty and
the Contribution Agreement by executing and delivering to the Lessor
counterparts thereof or joinder agreements with respect thereto, (b) to deliver
to the Lessor the certificate specified in Section 28(a)(i) for such Subsidiary
with appropriate insertions and attachments, and (c) if requested by the Lessor,
to deliver to the Lessor a legal opinion in substantially the form of Exhibit B
with respect to such Subsidiary and the Subsidiary Guaranty and Contribution
Agreement, from counsel to such Subsidiary reasonably satisfactory to the
Lessor.
Section 31. Miscellaneous
(a) Entire Agreement. THIS LEASE AND THE OTHER OPERATIVE
DOCUMENTS EMBODY THE ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN THE LESSEE AND
THE LESSOR AND SUPERSEDE ALL OTHER AGREEMENTS AND UNDERSTANDINGS BETWEEN SUCH
PARTIES RELATING TO THE SUBJECT MATTER HEREOF. THIS WRITTEN LEASE AND THE OTHER
OPERATIVE DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
(b) Interpretation. Captions and section headings appearing
herein are included solely for convenience of reference and are not intended to
affect the interpretation of any provision of this Lease.
(c) Governing Law; Submission to Jurisdiction. (I) THIS LEASE
AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO RELATING TO THE FACILITY
SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE
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WITH THE LAWS OF THE STATE OF NEW YORK, BUT EXCLUDING ALL CONFLICT-OF-LAWS
RULES, EXCEPT TO THE EXTENT THAT THE LAWS OF THE STATE OF ILLINOIS MANDATORILY
APPLY.
(II) THE LESSOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION
OF ANY NEW YORK STATE OR FEDERAL COURT SITTING IN NEW YORK CITY AND ANY
APPELLATE COURT FROM ANY THEREOF IN ANY ACTION OR PROCEEDING BY THE LESSOR IN
RESPECT OF, BUT ONLY IN RESPECT OF, ANY CLAIMS OR CAUSES OF ACTION ARISING OUT
OF OR RELATING TO THIS LEASE OR ANY OTHER OPERATIVE DOCUMENT (SUCH CLAIMS AND
CAUSES OF ACTION, COLLECTIVELY, BEING "PERMITTED CLAIMS"), AND THE LESSEE HEREBY
IRREVOCABLY AGREES THAT ALL PERMITTED CLAIMS MAY BE HEARD AND DETERMINED IN SUCH
NEW YORK STATE COURT OR IN SUCH FEDERAL COURT. THE LESSEE HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY
AFOREMENTIONED COURT IN RESPECT OF PERMITTED CLAIMS. THE LESSEE HEREBY
IRREVOCABLY APPOINTS CT CORPORATION SYSTEM (THE "PROCESS AGENT"), WITH AN OFFICE
ON THE DATE HEREOF AT 0000 XXXXXXXX, XXX XXXX, XXX XXXX 00000, AS ITS AGENT TO
RECEIVE ON BEHALF OF THE LESSEE AND ITS PROPERTY SERVICE OF COPIES OF THE
SUMMONS AND COMPLAINT AND ANY OTHER PROCESS WHICH MAY BE SERVED BY THE LESSOR IN
ANY SUCH ACTION OR PROCEEDING IN ANY AFOREMENTIONED COURT IN RESPECT OF
PERMITTED CLAIMS. SUCH SERVICE MAY BE MADE BY DELIVERING A COPY OF SUCH PROCESS
TO THE LESSEE BY COURIER AND BY CERTIFIED MAIL (RETURN RECEIPT REQUESTED), FEES
AND POSTAGE PREPAID, BOTH (1) IN CARE OF THE PROCESS AGENT AT THE PROCESS
AGENT'S ABOVE ADDRESS AND (2) AT THE LESSEE'S ADDRESS SPECIFIED PURSUANT TO
SECTION 22, AND THE LESSEE HEREBY IRREVOCABLY AUTHORIZES AND DIRECTS THE PROCESS
AGENT TO ACCEPT SUCH SERVICE ON ITS BEHALF. THE LESSEE AGREES THAT A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW.
(III) NOTHING IN THIS SECTION 31(C): (1) SHALL AFFECT THE
RIGHT OF THE LESSOR TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW
OR AFFECT ANY RIGHT OTHERWISE EXISTING OF THE LESSOR TO BRING ANY ACTION OR
PROCEEDING AGAINST THE LESSEE OR ITS PROPERTY IN THE COURTS OF OTHER
JURISDICTIONS OR (2) SHALL BE DEEMED TO BE A GENERAL CONSENT TO JURISDICTION IN
ANY PARTICULAR COURT OR A GENERAL WAIVER OF ANY DEFENSE OR A CONSENT TO
JURISDICTION OF THE COURTS EXPRESSLY REFERRED TO IN SUBSECTION (A) ABOVE IN ANY
ACTION OR PROCEEDING IN RESPECT OF ANY CLAIM OR CAUSE OF ACTION OTHER THAN
PERMITTED CLAIMS.
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(d) No Third Party Beneficiaries. Nothing in this Lease,
express or implied, shall give to any Person, other than the parties hereto and
their respective successors and permitted assigns, any benefit or any legal or
equitable right, remedy or claim under this Lease including, without limitation,
under any provision of this Lease regarding the priority or application of any
amounts payable hereunder.
(e) Counterparts. This Lease may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Lease by signing any
such counterpart.
(f) Waiver of Jury Trial. EACH OF THE PARTIES HERETO WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO A TRIAL BY JURY
IN ANY ACTION OR PROCEEDING TO ENFORCE OR TO DEFEND ANY RIGHTS UNDER THIS LEASE
OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY
IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM
ANY RELATIONSHIP EXISTING IN CONNECTION WITH THIS LEASE, AND AGREES THAT ANY
SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
(g) Invalidity. In the event that any one or more of the
provisions contained in this Lease shall, for any reason, be held invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of the Lease.
(h) Usury. Notwithstanding anything to the contrary contained
in this Lease or any of the Operative Documents, the amounts which the Lessee is
obliged to pay pursuant to this Lease and the other Operative Documents, and the
amounts which the Lessor is entitled to receive pursuant to this Lease and the
other Operative Documents, are subject to the following limitations. It is the
intention of the parties hereto that the Lessor shall conform strictly to usury
laws applicable to it. Accordingly, if the transactions contemplated hereby
would be usurious as to the Lessor under laws applicable to the Lessor
(including the laws of the United States of America and the state where their
respective main offices are located or any other jurisdiction whose laws may be
mandatorily applicable to the Lessor notwithstanding the other provisions of
this Lease), then, in that event, notwithstanding anything to the contrary in
this Lease or in any other Operative Document, it is agreed as follows: (i) the
aggregate of all consideration which constitutes interest under law applicable
to the Lessor that is contracted for, taken, reserved, charged or received by
the Lessor under this Lease or under any of the other aforesaid Operative
Documents or other agreements or otherwise in connection with this Lease shall
under no circumstances exceed the maximum amount allowed by such applicable law,
and any excess shall be cancelled automatically and if theretofore paid shall be
credited by the Lessor on the amounts paid by the Lessee, to the extent that the
obligations with respect thereto shall have been or would thereby be paid in
full, refunded by the Lessor to the Lessee and (ii) in the event that any
amounts hereunder become due and payable prior to the regularly scheduled
maturity (whether by reason of the occurrence of a Cancellation Event or a
Termination Event or otherwise, or in the event of any required or permitted
prepayment, then such consideration that constitutes interest under law
applicable to the Lessor may never include more than the maximum amount allowed
by such applicable law, and excess interest, if any, provided for in
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this Lease or otherwise shall be cancelled automatically by the Lessor as of the
date of such prepayment and, if theretofore paid, shall be credited by the
Lessor on the amounts payable hereunder (or, to the extent that the amounts
payable hereunder shall have been or would thereby be paid in full, refunded by
the Lessor to the Lessee). All sums paid or agreed to be paid to the Lessor for
the use, forbearance or detention of sums due hereunder shall, to the extent
permitted by law applicable to the Lessor, be amortized, prorated, allocated and
spread in equal parts throughout the full term of this Lease until payment in
full so that the rate or amount of interest on account of any amounts payable
hereunder does not exceed the maximum amount allowed by such applicable law. If
at any time and from time to time (i) the amount of Rent or yield payable to the
Lessor on any date shall be computed at the Highest Lawful Rate applicable to
the Lessor pursuant to this Section 31(h) and (ii) in respect of any subsequent
Rent computation period the amount of Rent otherwise payable to the Lessor would
be less than the amount of Rent payable to the Lessor computed at the Highest
Lawful Rate applicable to the Lessor, then the amount of Rent payable to the
Lessor in respect of such subsequent Rent computation period shall continue to
be computed at the Highest Lawful Rate applicable to the Lessor until the total
amount of Rent payable to Lessor shall equal the total amount of Rent which
would have been payable to the Lessor if the total amount of Rent had been
computed without giving effect to this Section 31(h).
(i) Time of the Essence. Time is of the essence in connection
with the payment of Rent and all other amounts payable hereunder and the
performance of the Lessee's other obligations hereunder.
(j) Indemnification.
(i) The Lessee agrees, in addition to any other
indemnity obligations set forth in any Operative Document, to indemnify
and save harmless, the Lessor and, on and after the Completion Date,
any of its successors and assigns, and its officers, directors,
incorporators, shareholders, employees, agents, partners, attorneys,
Affiliates and servants (individually an "Indemnified Party" and
collectively the "Indemnified Parties", provided that during the
Construction Term only the Lessor shall be an Indemnified Party) from
and against all liabilities, Liens, Taxes, losses, obligations, claims,
damages (including, without limitation, penalties, fines, court costs
and administrative service fees), penalties, demands, causes of action,
suits, proceedings (including any investigations, litigation or
inquiries), Judgments, sums paid in settlement of claims, and costs and
expenses of any kind or nature whatsoever, including, without
limitation, reasonable attorneys' fees and expenses and all other
expenses incurred in connection with investigating, defending or
preparing to defend any cause of action, suit or proceeding (including
any investigations, litigation or inquiries) or claim which may be
incurred by or asserted against or involve any of them (whether or not
any of them is named as a party thereto) as a result of, arising
directly or indirectly out of or in any way related to (A) any actual
or proposed use by the Lessee of the amounts funded as Facility Cost,
(B) any other aspect of this Lease and the other Operative Documents,
(C) the operations of the business of the Lessee, (D) the failure of
the Lessee or any of its contractors, employees, agents, licensees,
representatives or any other Person for whose conduct the Lessee is
responsible in connection with this Lease, any Related Contract or
under any Operative Document (individually a "Lessee Agent" and
collectively, the
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"Lessee Agents") to comply with any Governmental Requirement in
connection with the purchase, design, construction, manufacture,
engineering, assembly, installation, use, operation or ownership of the
Facility or any part thereof, (E) the breach of any representation or
warranty set forth herein regarding Environmental Requirements, (F) the
failure of the Lessee as agent for the Lessor under the Agency
Agreement to pay any amount required to be paid hereunder or to
acquire, in the name of and on behalf of the Lessor, good and
marketable title to the leasehold interest in the Site pursuant to the
Ground Lease and good title to the Improvements and Process Equipment,
(G) the failure of the Lessee (directly or by any of the Lessee Agents)
to perform any obligation herein required to be performed pursuant to
Environmental Requirements, or any act or omission which occurred or
will occur at any prior or subsequent time, or any condition or state
of facts in existence at any prior or subsequent time relating in any
way to the Facility the failure of which gives rise to any liability or
obligation under any Environmental Requirement or gives rise to any
Environmental Damages, (H) the Lessee's ownership and leasing of the
Facility or any part hereof pursuant to this Lease, (I) the sale of the
Facility either to the Lessee or any other Person pursuant to the
provisions of this Lease, (J) all acts or omissions of the Lessee, any
Lessee Agent or any Sublessee, (K) any Imposition, Lien, Judgment, tax,
or other payment owing in respect of any part of the Facility or which
the Lessee is obligated to discharge or pay to any Person, (L) any
action or omission of the Lessee or any Lessee Agent pursuant to, or
breach of or failure to perform under, the Agency Agreement, (M) any
injury to, or death of, any Person, or damage to or loss of Property to
the extent not reimbursed by insurance prior to the Indemnified Party
having to make any payment in respect thereof, or any other thing
occurring on or resulting from activities involving the Facility or any
part thereof, (N) the renovation, construction, leasing, subleasing,
operation, occupancy, possession, use or non-use by the Lessee (whether
in its individual capacity or as Acquisition/Construction Agent for the
Lessor) of the Facility or any part thereof, or the condition of the
Facility or any part thereof, (O) any Default or Event of Default under
this Lease, (P) any act or omission of the Lessee or its agents,
contractors, licensees, Sublessees, invitees, representatives, other
Lessee Agents or any other Person on or relating to, or in connection
with, the ownership, renovation, construction, leasing, subleasing,
operation, management, maintenance, occupancy, possession, use, non-use
or condition of the Facility or any part thereof, (Q) performance of
any labor or services or furnishing of any materials or other Property
in respect of the Facility or any part thereof, (R) any permitted
contest referred to in Section 13, (S) any claims for patent,
trademark, trade name or copyright infringement or (T) any violation by
the Lessee of any Operative Document or any Related Contracts or any
other contract or agreement to which the Lessee is a party, or of any
Insurance Requirement, in each case affecting any Indemnified Party, of
the Facility or any part thereof or the ownership, operation,
occupancy, possession, use, non-use or condition thereof, in each case
regardless of the acts, omissions or negligence of any Indemnified
Party, it being the intent of the Lessee to indemnify the Indemnified
Parties for their own negligent acts or omissions (other than gross
negligence or willful misconduct) in connection with any of the
foregoing (collectively, the "Indemnified Risks"); provided, however,
that no Indemnified Party shall be entitled to indemnity (or any other
payment or reimbursement) for any Indemnified Risks to the extent such
Indemnified Risks result from or arise out of one or
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more of the following: (1) any representation or warranty by such
Indemnified Party in the Operative Documents being incorrect; (2) the
willful misconduct or gross negligence of such Indemnified Party; (3)
the failure on the part of the Lessor to distribute in accordance with
this Lease any amounts received and distributable by it hereunder; (4)
any claim for economic losses based upon the rate of return under this
Lease; (5) for any risks arising from any third-party damage claims
unrelated to construction arising from acts or omissions occurring
during the Construction Term, other than third-party damage claims
caused by or resulting from the Lessee's (or any of the Lessee Agents')
own actions or failures to act while in possession or control of the
Facility; and (6) for any risks beyond the control of the Lessee during
the Construction Term (directly or through the Lessee Agents),
including acts of God, casualty losses and condemnations; provided
further, that as to any such indemnification arising during the
Construction Term (other than from (A) an environmental claim or (B) a
Fully Indemnifiable Event), the Lessee's liability therefore shall be
limited to such amount as will not cause the liability of the Lessee
under this Lease to exceed the Construction Term Recourse Amount.
(ii) If any cause of action, suit, proceeding or
claim arising from any of the foregoing is brought against any
Indemnified Party, whether such action, proceeding, suit or claim shall
be actual or threatened, or in preparation therefor, the Lessee will
have the right, at its expense, to assume the resistance and defense of
such cause of action, suit, proceeding or claim or cause the same to be
resisted and defended; provided that such Indemnified Party shall be
entitled (but not obligated) to participate jointly in such defense, in
which case such Indemnified Party will be responsible for its own legal
fees or other expenses, if any, related to such defense incurred
subsequent to the joint participation by such party in such defense.
Notwithstanding the foregoing, if any Indemnified Party shall have been
advised by counsel chosen by it that there may be one or more legal
defenses available to such Indemnified Party that are different from or
additional to those available to the Lessee, the Indemnified Party may
assume the defense of such action and the Lessee agrees to reimburse
such Indemnified Party for the reasonable fees and expenses of any
counsel retained by the Indemnified Party. The Lessee may settle any
action which it defends hereunder on such terms as it may deem
advisable in its sole discretion, subject to its ability promptly to
perform in full the terms of such settlement; provided, however, that
it may not in connection therewith admit liability or wrongdoing on the
part of any Indemnified Party with the prior written consent of such
Indemnified Party. No Indemnified Party may seek indemnification or
other reimbursement or payment, including attorneys' fees or expenses,
from the Lessee for any cause of action, suit, proceeding or claim
settled, compromised or in any way disposed of by the Indemnified Party
without the Lessee's prior written consent, which will not be
unreasonably withheld.
(iii) The obligations of the Lessee under this
Section 31(j) shall survive the expiration or any termination of this
Lease (whether by operation of law or otherwise) and the payment of
amounts owed by the Lessee under this Lease and the other Operative
Documents.
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(iv) Upon demand for payment by any Indemnified
Party of any Indemnified Risks incurred by it for which indemnification
is sought, the Lessee shall pay when due and payable the full amount of
such Indemnified Risks to the appropriate party, unless and only so
long as: (A) the Lessee shall have assumed the defense of such action
and is diligently prosecuting the same; (B) the Lessee is financially
able to pay all its obligations outstanding and asserted against the
Indemnified Party at that time, including the full amount of the
Indemnified Risks; and (C) the Lessee has taken all action as may be
reasonably necessary to prevent (1) the collection of such Indemnified
Risks from, or the assertion of any Lien in respect thereof against,
the Indemnified Party; (2) the sale, forfeiture or loss of the Facility
or any part thereof during such defense of such action; and (3) the
imposition of any civil or criminal liability for failure to pay such
Indemnified Risks when due and payable.
(v) The Lessee acknowledges and agrees that, subject
to the limitations contained in clause (i), its obligations under this
Section 31(j) are intended to include and extend to any and all
liabilities, Liens, Taxes, losses, obligations, claims, damages
(including, without limitation, penalties, fines, court costs and
administrative service fees), penalties, demands, causes of action,
suits, proceedings (including any investigations, litigation or
inquiries), Judgments, sums paid in settlement of claims, costs and
expenses (including, without limitation, response and remediation
costs, stabilization costs, encapsulation costs, and treatment, storage
or disposal costs), imposed upon or incurred by or asserted at any time
against any Indemnified Party (whether or not indemnified against by
any other party) as a result of, arising directly or indirectly out of
or in any way related to (1) the treatment, storage, disposal,
generation, use, transport, movement, presence, release, threatened
release, spill, installation, sale, emission, injection, leaching,
dumping, escaping or seeping of any alleged hazardous substance or
material containing or alleged to contain hazardous substance at,
under, onto, above, within or from the Facility or any part thereof;
(2) the violation or alleged violation of any Environmental
Requirements relating to or in connection with Facility or any part
thereof or any acts or omissions thereon or relating thereto; (3) all
other federal, state and local laws designed to protect the environment
or persons or property therein, whether now existing or hereinafter
enacted, promulgated or issued by any Governmental Authority relating
to or in connection with the Facility or any part thereof or any acts
or omissions thereon or relating thereto; (4) the Lessee's failure to
comply with its obligations under Section 7; and (5) any abandonment of
any of the Facility or any part thereof by the Lessee.
(vi) Without limiting the generality of the
foregoing provisions of this Section 31(j), the Lessee agrees to pay or
reimburse, promptly upon demand, and protect, indemnify and save
harmless, the Lessor, following the occurrence of a Termination Event,
from any action by any Sublessee or other owner of an interest in the
Facility or any part thereof (other than a Co-Lessee) which causes the
Lessor any delay in exercising its remedies, or results in the
reduction of the Lessor's remedies hereunder.
(vii) In case any action shall be brought against
any Indemnified Party in respect of which indemnity may be sought
against the Lessee, such Indemnified Party
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shall promptly notify the Lessee in writing, but the failure to give
such prompt notice shall not relieve the Lessee from liability
hereunder.
(k) Confidentiality. The Lessor agrees to exercise
commercially reasonable efforts to keep any information delivered or made
available by the Lessee to it which is clearly indicated or stated to be
confidential information (or when the circumstances under which such information
is delivered or when the content thereof would cause a reasonable person to
believe that such information is confidential), confidential from anyone other
than Persons employed or retained by such party who are or are expected to
become engaged in evaluating, approving, structuring or administering the
Advances or the Operative Documents (such Persons to likewise be under similar
obligations of confidentiality with respect to such information); provided,
however, that nothing herein shall prevent the Lessor from disclosing such
information (i) upon the order of any court or administrative agency, (ii) upon
the request or demand of any regulatory agency or authority having jurisdiction
over the Lessor, (iii) which has been publicly disclosed, (iv) to the extent
reasonably required in connection with any litigation to which the Lessor or its
affiliates may be a party, (v) to the extent reasonably required in connection
with the exercise of any remedy hereunder, (vi) to the Lessor's legal counsel
and independent auditors, (vii) to any actual or proposed assignee or
participant in all or part of its rights hereunder which has agreed in writing
to be bound by the provisions of this Section 31(k); provided that should
disclosure of any such confidential information be required by virtue of clause
(ii), (iii) or (v) of the immediately preceding sentence, the Lessor shall, to
the extent permitted by law, promptly notify the Lessee of same so as to allow
the Lessee to seek a protective order or to take any other appropriate action;
provided, further, that the Lessor shall not be required to delay compliance
with any directive to disclose beyond the last date such delay is legally
permissible any such information so as to allow the Lessee to effect any such
action.
(l) No Waiver; Remedies. No failure on the part of the Lessor
to exercise, and no delay in exercising, any right hereunder or under any other
Operative Document shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder or under any other Operative Document
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
(m) Right of Set-Off. After the occurrence and during the
continuance of a Cancellation Event or Termination Event, the Lessor is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set-off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by the Lessor to or for the credit or the account of the Lessee
against any and all of the obligations of the Lessee now or hereafter existing
under this Lease or any other Operative Document, irrespective of whether or not
the Lessor shall have made any demand under this Lease or any other Operative
Document and although such obligations may be unmatured. The Lessor agrees
promptly to notify the Lessee after any such set-off and application made by the
Lessor; provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of the Lessor under this
Section 31(m) are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which the Lessor may have.
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(n) References. The words "herein," "hereof," "hereunder" and
other words of similar import when used in this Lease refer to this Lease as a
whole, and not to any particular article, section or subsection. Any reference
herein to an Article or Section shall be deemed to refer to the applicable
Article or Section of this Lease unless otherwise stated herein. Any reference
herein to an exhibit or schedule shall be deemed to refer to the applicable
exhibit or schedule attached hereto unless otherwise stated herein.
(o) Successors; Survival. This Lease shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. The obligations of the Lessee under Section 4(b), Section
4(e), Section 27, and Section 31(j) shall survive the repayment of the Rent and
all other obligations of the Lessee to the Lessor under this Lease and the other
Operative Documents and the termination of the Commitments.
(p) Characterization.
(i) In order to protect the rights and remedies of
the Lessor following a Default, an Event of Default, any other
Cancellation Event or a Termination Event, and for the purposes of
Federal, state and local income and ad valorem taxes, Title 00, Xxxxxxx
00X xx xxx Xxxxxx Xxxxxx Code (Xxxx-Xxxxx-Xxxxxx Act), commercial law
and Title 11 of the United States Code (or any other applicable
Federal, state or local insolvency, reorganization, moratorium,
fraudulent conveyance or similar law now or hereafter in effect for the
relief of debtors), the parties hereto intend that (i) this Lease be
treated as the repayment and security provisions of a loan by the
Lessor to the Lessee in the amount of the Facility Cost, (ii) all
payments of Basic Rent, Supplemental Rent, Construction Term Recourse
Amount, Permitted Lease Investment Balance, Residual Value Amount and
Termination Value be treated as payments of principal, interest and
other amounts owing with respect to such loan and (iii) the Lessee be
treated as entitled to all benefits of ownership of the Facility or any
part thereof. In addition, the parties acknowledge that after payment
in full of the Rent and all other obligations of the Lessee to the
Lessor under this Lease and the Operative Documents, any remaining
proceeds of the Facility shall be distributed to the Lessee.
(ii) The Lessee agrees that neither it nor any of
its Affiliates (whether or not consolidated or combined returns are
filed for any such Affiliate and the Lessee for federal, state or local
income tax purposes) will at any time take any action, directly or
indirectly, or file any return or other document inconsistent with the
intended income tax treatment set forth in Section 31(p)(i) above, and
the Lessee agrees that the Lessee and any such Affiliates will file
such returns, maintain such records, take such action and execute such
documents (as reasonably requested by the Lessor from time to time) as
may be appropriate to facilitate the realization of such intended
income tax treatment. The Lessor agrees that neither it nor any
affiliate (whether or not consolidated or combined returns are filed
for such affiliate and the Lessor for federal, state or local income
tax purposes) will at any time take any action, directly or indirectly,
or file any return or other document claiming, or asserting that it is
entitled to, the income tax benefits, deductions and/or credits which,
pursuant to the intended income tax treatment set forth herein, would
otherwise be claimed or claimable by the Lessee, and that it and any
such affiliates will file such returns, maintain such records, take
such actions, and
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execute such documents (as reasonably requested by the Lessee from time
to time) as may be appropriate to facilitate the realization of, and as
shall be consistent with, such intended income tax treatment, and if
any such filing, maintenance, action or execution requested by the
Lessee would result in any additional income tax liability payable by
it or any affiliate, or could reasonably be expected to result in
liability payable by it or any affiliate, unrelated to the intended
income tax treatment set forth herein, then the Lessee will provide an
indemnity against such unrelated income tax liability satisfactory to
the Lessor, in its sole opinion.
(iii) The Lessee acknowledges that neither the
Lessor, nor any affiliate of Lessor is making any representation, nor
is it required to make any disclosure, now or in the future, with
respect to the parties' tax or accounting treatment of the Facility or
the financing thereof, nor is the Lessor or any affiliate thereof
responsible, nor will it be responsible in the future, for tax and
accounting advice with respect to the Facility or the financing
thereof, and the Lessee has had or will have the benefit of the advice
of its own independent tax and accounting advisors with respect to such
matters.
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IN WITNESS WHEREOF, the parties have caused this Lease to be
executed by their respective officers thereunto duly authorized as of the date
first above written.
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LESSEE:
KRISPY KREME DOUGHNUT CORPORATION
By:
----------------------------------------
Name:
Title:
Krispy Kreme Doughnut Corporation
000 Xxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx-Xxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxxxxxxx
Secretary and Senior Vice
President
Telecopier: (000) 000-0000
Confirmation: (000) 000-0000
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LESSOR:
WACHOVIA CAPITAL INVESTMENTS, INC.
Commitment:
$35,000,000
By:
----------------------------------------
Name:
Title:
Funding Office
Wachovia Capital Investments, Inc.
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxx-Xxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxxx Xxxx
Telecopier: 000-000-0000
Confirmation: 000-000-0000
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SCHEDULE 1(a)
Facility Plan
The Design-Build Agreement to be executed by the Acquisition/
Construction Agent and The Xxxxxxx Company for the construction of the
Improvements and all contracts, plans and specifications attached thereto or
referred to therein.
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SCHEDULE 1(b)
Defined Terms
The following terms shall have the following meanings (all terms defined in the
singular to have the same meanings when used in the plural and vice versa):
"Acquisition": as to any Person, the acquisition (in a single
transaction or a series of related transactions) by such Person of (a) at least
50% of the outstanding Capital Stock of any other Person, (b) all or
substantially all of the assets of any other Person or (c) assets constituting
one or more business units or divisions of any other Person.
"Acquisition/Construction Agent": Lessee, in its capacity as
Acquisition/Construction Agent for the Lessor under the Agency Agreement.
"Adjusted LIBO Rate": with respect to any Rental Period, a
rate per annum equal to the quotient obtained (rounded upwards, if necessary, to
the next higher 1/100th of 1%) by dividing (i) the applicable LIBO Rate for such
Rental Period by (ii) 1.00 minus the Eurodollar Reserve Percentage.
"Advance Notice": as defined in Section 3(b) of the Lease.
"Advances": collectively, all Advances of Facility Cost made
by the Lessor pursuant to Section 3(a) of the Lease in an aggregate principal
amount not to exceed the Commitment; and individually, any such Advance made by
any of them, as the context shall require.
"Affiliate": with respect to the Lessee, (i) any Person that,
directly or indirectly, through one or more intermediaries, controls the Lessee
(a "Controlling Person"), (ii) any Person (other than the Lessee or a
Subsidiary) which is controlled by or is under common control with a Controlling
Person, or (iii) any Person (other than a Subsidiary) of which the Lessee owns,
directly or indirectly, 20% of more of the common stock or equivalent equity
interests. As used herein, the term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
"Agency Agreement": the Acquisition, Agency, Indemnity and
Support Agreement, of even date with the Lease, between the Lessor and the
Lessee, as the Acquisition/Construction Agent, as amended, restated,
supplemented or otherwise modified from time to time.
"Applicable Margin": .90%, provided that on and after the
first Performance Pricing Determination Date (as defined in the Pricing
Schedule) following the Fiscal Quarter ending on July 29, 2001, the Applicable
Margin will be determined pursuant to the Pricing Schedule.
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"Applicable Permit": any Permit that is or may be necessary to
own, renovate, construct, install, start-up, test, maintain, modify, expand,
remove, operate, lease or use all or any part of the Facility (including,
without limitation, the Site or any business conducted on or related to the
Facility or the Site) in accordance with the Operative Documents, including,
without limitation, those Permits listed in Schedule 28(b), and the failure to
obtain or maintain which would have a Material Adverse Effect.
"Approved Appraisal": any appraisal, ordered by the Lessor,
but at the Lessee's cost, from an appraiser or appraisers reasonably acceptable
to the Lessor (it being agreed that Deloitte & Touche is acceptable to the
Lessor), which: (i) is satisfactory in form and substance to the Lessor, (ii)
reflects the fair market value of the Facility on the Lease Commencement Date,
(iii) reflects the fair market value of the Facility on an "as completed" basis,
and (iv) estimates the fair market value of the Facility as of the expiration of
the Basic Term.
"Authorized Officers": relative to the Lessee or any
Guarantor, the officers whose signatures and incumbency shall have been
certified to the Lessor in a certificate certified by its Secretary in form and
substance satisfactory to the Lessor that are authorized to sign the Operative
Documents to which the Lessee or such Guarantor, as applicable, is a party and,
until replaced by another Authorized Officer duly authorized for that purpose,
to act as its respective representative for the purposes of signing documents
and giving notices and other communications in connection with the Operative
Documents to which it is a party.
"Banking Authority": as defined in Section 27(b) of the Lease.
"Bankruptcy Event": the commencement of a case under Title 11
of the United States Code involving the Lessee as the debtor.
"Base Rate": for any day, the rate per annum equal to the
higher as of such day of (i) the Prime Rate, and (ii) one-half of one percent
above the Federal Funds Rate. For purposes of determining the Base Rate for any
day, changes in the Prime Rate shall be effective on the date of each such
change.
"Basic Rent": with respect to any Rental Period, the amounts
payable as Basic Rent for such Rental Period pursuant to Section 4(a) of the
Lease.
"Basic Term": with respect to the Lease, and subject to the
terms and conditions set forth therein and in the other Operative Documents, the
period commencing on the Completion Date and ending on the Lease Termination
Date.
"Business Day": (a) for all purposes other than as covered by
clause (b) below, any day except Saturday, Sunday or other day on which
commercial banks in Atlanta, Georgia are authorized or required by law or other
government action to close, and (b) with respect to all notices and
determinations in connection with Rental Periods, and payments of Basic Rent,
any day that is a Business Day described in clause (a) above and that is also a
day for trading by and between banks in the London interbank eurodollar market.
"Cancellation Date": as defined in Section 15(b) of the Lease.
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"Cancellation Event": as defined in Section 15(b) of the
Lease.
"Capitalized Expenses": all acquisition, design and
construction costs and all legal, architectural, engineering and other
professional fees and expenses, brokerage fees, appraisal fees, environmental
assessment fees, title insurance, survey expenses, mortgage recording fees and
taxes, intangibles taxes, and other "soft costs" of a nature ordinarily and
reasonably incurred in connection with the acquisition, design, engineering,
construction, assembly, installation, testing, improvement and completion of
property substantially similar to the Facility, (including soft costs previously
incurred not to exceed 10% of all Facility Cost), and all of the following
accrued prior to the Completion Date: (a) Basic Rent (as defined below), (b)
Commitment Fee, Upfront Fee and Administrative Fee (as such terms are defined in
the Engagement Letter), (c) Commitment Fees and other fees, and (d) obligations
incurred pursuant to Section 27. "Capitalized Expenses" shall not include
fixtures, furniture or equipment included in, attached to or otherwise relating
to the Site or the Facility, but shall include, without duplication, Advances
pursuant to Section 3(d)(ii).
"Capital Stock": means any nonredeemable capital stock,
membership interests or partnership interests of the Lessee or any Consolidated
Subsidiary (to the extent issued to a Person other than the Lessee), whether
common or preferred.
"Casualty Occurrence": any of the following events with
respect to the Facility, which do not constitute a Loss Event: (a) any material
loss of the Facility or material loss of use thereof (including a Force Majeure
Event), or (ii) the condemnation, confiscation or seizure of, or requisition of
title to or use of, any material part of the Facility.
"CERCLA": the Comprehensive Environmental Response
Compensation and Liability Act, 42 U.S.C. ss. 9601 et seq. and its implementing
regulations and amendments.
"CERCLIS": the Comprehensive Environmental Response
Compensation and Liability Inventory System established pursuant to CERCLA.
"Change of Control": (i) any Person or two or more Persons
acting in concert shall have acquired beneficial ownership (within the meaning
of Rule 13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934) of 25% or more of the outstanding shares of the voting
stock of the Parent; or (ii) as of any date a majority of the Board of Directors
of the Parent consists of individuals who were not either (a) directors of the
Parent as of the corresponding date of the previous year, (b) selected or
nominated to become directors by the Board of Directors of the Parent of which a
majority consisted of individuals described in clause (a), or (c) selected or
nominated to become directors by the Board of Directors of the Parent of which a
majority consisted of individuals described in clause (a) and individuals
described in clause (b).
"Change of Law": as defined in Section 27(b) of the Lease.
"Closing Date": April 26, 2001.
"Code": the Internal Revenue Code of 1986, as amended, and any
successor Federal tax code.
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"Collateral": as defined in Section 26 of the Lease.
"Co-Lessee": as defined in Section 21(b) of the Lease.
"Commitment": an amount equal to the Lessor's Commitment set
forth on the signature page hereof (or in an assignment executed by the Lessor
pursuant to Section 21(d) of the Lease), as it may be increased with the prior
written consent of the Lessor or reduced at the request of the Lessee in
accordance with Section 3(c) of the Lease.
"Commitment Fee": as defined in Section 4(a).
"Commitment Fee Rate": .25% per annum.
"Completion": the occurrence and satisfaction of all of the
events and conditions described on Schedule 1.3 to the Agency Agreement on a
single date to the reasonable satisfaction of the Lessor.
"Completion Certificate": a certificate of the
Acquisition/Construction Agent in substantially the form of Exhibit A to the
Agency Agreement, certifying that Completion has occurred.
"Completion Costs": at any time the sum of (x) the aggregate
amount of Facility Costs (including acquisition costs, except with respect to
the Site, and soft costs) expended or incurred as of the time of a
Non-Completion Event and which it will be necessary thereafter to expend in
order to achieve Completion, plus (y) all Impositions thereon.
"Completion Date": the date on which the Lessee, as
Acquisition/Construction Agent for the Lessor, delivers the Completion
Certificate.
"Compliance Certificate": as defined in Section 30(a)(iii) of
the Lease.
"Consolidated Adjusted EBITDA": the sum of the following,
calculated on a consolidated basis in accordance with GAAP for the Parent and
its Consolidated Subsidiaries, for the relevant fiscal period: (i) Consolidated
EBITDA, plus (ii) all payments made by the Parent and its Consolidated
Subsidiaries under Synthetic Leases.
"Consolidated EBITDA": the sum of the following, calculated on
a consolidated basis in accordance with GAAP for the Parent and its Consolidated
Subsidiaries, for the relevant fiscal period: Consolidated Net Income plus, to
the extent deducted in determining Consolidated Net Income, (a) depreciation and
amortization expense; plus (b) Consolidated Interest Expense; plus (c) income
tax expense.
"Consolidated Fixed Charges": for any fiscal period, the sum
of (a) Consolidated Interest Expense for such period, and (b) all payment
obligations of the Parent and its Consolidated Subsidiaries for such period
under all operating leases and rental agreements (including Synthetic Leases).
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"Consolidated Interest Expense": for any fiscal period,
interest (including the interest component of Synthetic Leases), whether
expensed or capitalized, in respect of Debt of the Parent or any of its
Consolidated Subsidiaries outstanding during such period.
"Consolidated Joint Venture": any Consolidated Subsidiary that
is (a) not a Wholly-Owned Subsidiary, and (b) is engaged in Krispy Kreme
franchisee or doughnut and bakery store operations.
"Consolidated Leverage Ratio": as of the last day of any
Fiscal Quarter, the ratio of (a) Consolidated Total Debt on such day, to (b)
Consolidated Adjusted EBITDA for the period of four Fiscal Quarters ending on
such day.
"Consolidated Net Income": for any period, the Net Income of
the Parent and its Consolidated Subsidiaries determined on a consolidated basis
in accordance with GAAP, but excluding (a) extraordinary items, (b) the income
(or deficit) of any Person accrued prior to the date it becomes a Subsidiary of
the Parent or is merged into or consolidated with the Parent or any of its
Subsidiaries, (c) the income (or deficit) of any Person (other than the Lessor
or a Guarantor) in which the Parent or any of its Subsidiaries has an ownership
interest, except to the extent that any such income is actually received by the
Lessor or a Guarantor in the form of cash dividends or cash distributions, and
(d) the undistributed positive earnings of any Subsidiary of the Parent to the
extent that the declaration or payment of dividends or similar distributions by
such Subsidiary is not at the time permitted by the terms of any contract or
agreement binding on such Subsidiary (other than under any Operative Document),
any constitutive document of such Subsidiary or any Governmental Requirement
applicable to such Subsidiary.
"Consolidated Operating Profits": for any period, the
Operating Profits of the Parent and its Consolidated Subsidiaries.
"Consolidated Subsidiary": a Subsidiary, the accounts of which
are customarily consolidated with those of the Parent for the purpose of
reporting to stockholders of the Parent or, in the case of a recently acquired
Subsidiary, the accounts of which would, in accordance with the Parent's regular
practice, be so consolidated for that purpose.
"Consolidated Tangible Net Worth": at any time, Stockholders'
Equity, less the sum of the value, as set forth or reflected on the most recent
consolidated balance sheet of the Parent and its Consolidated Subsidiaries,
prepared in accordance with GAAP, of:
(a) Any surplus resulting from any write-up of
assets subsequent to January 28, 2001;
(b) All assets which would be treated as
intangible assets for balance sheet presentation purposes under GAAP,
including without limitation goodwill (whether representing the excess
of cost over book value of assets acquired, or otherwise), trademarks,
tradenames, copyrights, patents and technologies, and unamortized debt
discount and expense;
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(c) To the extent not included in (b) of this
definition, any amount at which shares of Capital Stock of the Parent
appear as an asset on the balance sheet of the Parent and its
Consolidated Subsidiaries;
(d) Loans or advances to stockholders,
directors, officers or employees;
(e) To the extent not included in (b) of this
definition, deferred expenses; and
(f) All minority interests (except minority
interests in Unconsolidated Joint Ventures).
"Consolidated Total Assets": at any time, the total assets of
the Parent and its Consolidated Subsidiaries, determined on a consolidated
basis, as set forth or reflected on the most recent consolidated balance sheet
of the Parent and its Consolidated Subsidiaries, prepared in accordance with
GAAP and delivered to the Lessor pursuant to Section 30(a)(i) or (ii) of the
Lease.
"Consolidated Total Debt": at any date the aggregate principal
amount of all Debt (including the principal component of Synthetic Leases) of
the Parent and its Consolidated Subsidiaries, determined on a consolidated basis
as of such date.
"Consolidated Total Liabilities": at any time, the total
liabilities of the Parent and its Consolidated Subsidiaries, determined on a
consolidated basis, as set forth or reflected on the most recent consolidated
balance sheet of the Parent and its Consolidated Subsidiaries, prepared in
accordance with GAAP and delivered to the Lessor pursuant to Section 30(a)(i) or
(ii) of the Lease.
"Construction Term": the period commencing on the Lease
Commencement Date and ending on the Completion Date.
"Construction Term Recourse Amount": as of any date with
respect to the Facility (other than the Site), 89.99% of the GAAP Facility Cost
as of such date (after having adjusted GAAP Facility Costs for any Force Majeure
Loss as provided in the definition of "Force Majeure Loss" and for the
remediation of any Force Majeure Event) minus the sum of (a) any payments
previously paid by the Acquisition/Construction Agent which have been future
valued to such point in time and (b) the present value of any future payments
that the Acquisition/Construction Agent or the Lessee is obligated to make under
the Operative Documents but in each case excluding payments that are not
required to be included in the calculation of the Lessee's maximum guaranty
amount under EITF 97-10.
"Contribution Agreement" means that Contribution Agreement of
even date herewith in substantially the form of Exhibit E to be executed by each
Guarantor, in connection with the Guaranty.
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"Controlled Group": all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Lessee, are treated as a single employer
under Section 414 of the Code.
"Debt": at any date, without duplication, (a) all obligations
of such Person for borrowed money, (b) all obligations of such Person evidenced
by bonds, debentures, notes or other similar instruments, (c) all obligations of
such Person to pay the deferred purchase price of property or services, except
trade accounts payable arising in the ordinary course of business, (d) all
obligations of such Person as lessee under capital leases, (e) all obligations
of such Person to reimburse any bank or other Person in respect of amounts
payable under a banker's acceptance, (f) all Redeemable Preferred Stock of such
Person (in the event such Person is a corporation), (g) all obligations of such
Person to reimburse any bank or other Person in respect of amounts paid under a
letter of credit or similar instrument, (h) all Debt of others secured by a Lien
on any asset of such Person, even though such Debt is not assumed by such
Person, (i) all Debt of others Guaranteed by such Person, (j) the principal
portion of all obligations of such Person under Synthetic Leases, and (k)
amounts of any reserves for doubtful accounts recorded on the books of such
Person for leases, receivables and other accounts sold, factored or otherwise
disposed of by such Person; provided, that in no event shall "Debt" include any
Factored Receivables Obligations.
"Debt Document": as defined in Section 17(a)(ix).
"Default": any condition or event that constitutes an Event of
Default or that with the giving of notice or the lapse of time or both would,
unless cured or waived, become an Event of Default.
"Default Rate": with respect to any amount payable under the
Lease or under any of the other Operative Documents on any day, the sum of 2%
plus the Adjusted LIBO Rate.
"Dollars" and "$": dollars in lawful currency of the United
States of America.
"Engagement Letter": the letter agreement dated March 15,
2001, between the Lessor and the Lessee.
"EITF 97-10": EITF Issue 97-10 (Emerging Issues Task Force,
Financial Accounting Standards Board 1997).
"Environmental Assessment": collectively, a Phase 1
investigation conducted by an independent engineering firm reasonably acceptable
to the Lessor in scope and substance satisfactory to the Lessor and in any event
satisfying the minimum standards set forth in ASTME 1527-94, and, if recommended
in or indicated by the Phase I environmental report, a Phase 2, environmental
soil test or other environmental report or reports, reflecting compliance of the
Facility in all material respects with all applicable Environmental
Requirements.
"Environmental Authority": any foreign, federal, state, local
or regional Governmental Authority that exercises any form of jurisdiction or
authority under any Environmental Requirement.
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"Environmental Authorizations": all licenses, permits, orders,
approvals, notices, registrations or other legal prerequisites for conducting
the business of the Lessor or any Subsidiary, or for the uses and activities of,
on or relating to the Facility, required by any Environmental Requirement.
"Environmental Damages": any and all claims, losses, costs,
damages, penalties and expenses which are incurred at any prior or subsequent
time as a result of the existence or release of Hazardous Materials upon, about
or beneath the Facility or migrating or threatening to migrate to or from the
Facility, or the existence of a violation of Environmental Requirements
pertaining to the Facility, regardless of whether the existence of such
Hazardous Materials or the violation of Environmental Requirements arose prior
to the present ownership or operation of the Facility.
"Environmental Judgments and Orders": all Judgments arising
from or in any way associated with any Environmental Requirements, whether or
not entered upon consent or written agreements with an Environmental Authority
or other entity arising from or in any way associated with any Environmental
Requirement, whether or not incorporated in a Judgment.
"Environmental Liabilities": any liabilities or Liens, whether
accrued, contingent or otherwise, arising from and in any way associated with
any Environmental Requirements.
"Environmental Notices": notice from any Environmental
Authority or by any other Person, of possible or alleged noncompliance with or
liability under any Environmental Requirement, including without limitation any
complaints, citations, demands or requests from any Environmental Authority or
from any other person or entity for correction of any violation of any
Environmental Requirement or any investigations concerning any violation of any
Environmental Requirement.
"Environmental Proceedings": any judicial or administrative
proceedings arising from or in any way associated with any Environmental
Requirement.
"Environmental Release": any actual or threatened release
defined in CERCLA or under any state or local environmental law or regulation.
"Environmental Requirements": any statute, rule, regulation,
ordinance, permit, license administration or judicial decision or order (whether
by consent or otherwise) or other requirement of law with respect to: (a) the
protection of human health and/or the environment; (b) the existence, handling,
use, generation, treatment, storage, packaging, labeling, removal or
Environmental Release of Hazardous Materials on, under, about and/or from any
real property, including the Facility; and (c) the effects on the environment of
any activity now, previously, or hereinafter conducted on any real property,
including the Facility. The Environmental Requirements shall include, but not be
limited to, the following: CERCLA; the Superfund Amendments and Reauthorization
Act, Public Law 99-499, 100 Stat. 1613; the Resource Conservation and Recovery
Act, 42 U.S.C. xx.xx. 6901, et seq.; the Toxic Substances Control Act, 15
U.S.C. xx.xx. 2601, et seq.; the Federal Water Pollution Control Act, 33
U.S.C. xx.xx. 1251, et seq.; the Clean Air Act, 42 U.S.C. xx.xx. 7401, et seq.;
the Occupational Safety and Health Act, 29 U.S.C. xx.xx. 651, et seq.; the
Emergency Planning and Community Right-To-Know Act of 1986, 42
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U.S.C. xx.xx. 11001, et seq.; the state and local analogies thereto, all as
amended or superseded from time to time; and any common-law doctrine, including
but not limited to, negligence, nuisance, strict liability, trespass, personal
injury, or property damage related to or arising out of the presence,
Environmental Release or exposure to a Hazardous Material; and all federal,
state and local ordinances, regulations, orders, writs and decrees.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time, or any successor law and the regulations
promulgated and rulings issued from time to time thereunder. Any reference to
any provision of ERISA shall also be deemed to be a reference to any successor
provision or provisions thereof.
"Eurocurrency Liabilities": as defined in Regulation D.
"Eurodollar Reserve Percentage": for any day the percentage
(expressed as a decimal) that is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in respect of Eurocurrency Liabilities (or in respect of any
other category of liabilities which includes deposits by reference to which the
interest rate on loans made at the LIBO Rate is determined or any category of
extensions of credit or other assets which includes loans by a non-United States
office of the Lessor to United States residents). The Adjusted LIBO Rate shall
be adjusted automatically on and as of the effective date of any change in the
Eurodollar Reserve Percentage.
"Event of Default": as defined in Section 17 of the Lease.
"Excluded Equipment": all items of equipment not purchased or
funded in whole or in part with proceeds of Advances; provided, however, that
the term "Excluded Equipment" shall not include:
(a) any equipment or other Property included in
the definition of "Facility";
(b) any condemnation or insurance proceeds;
(c) any equipment or other Property purchased
with proceeds of condemnation or insurance proceeds;
(d) any equipment or other Property that is a
replacement or substitution for (i) equipment or Property purchased in
whole or in part with proceeds of Advances or (ii) equipment or other
Property described in clause (a) or (c) of this definition.
"Facility": the collective reference to (a) the Lessor's
leasehold interest in the Site pursuant to the Ground Lease, (b) the
Improvements, (c) the Process Equipment, and (d) all plans, specifications,
warranties and related rights and operating, maintenance and repair manuals
related thereto and all replacements of any of the above. The Facility shall not
include Excluded Equipment.
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"Facility Cost": an aggregate amount equal to the sum of (a)
all costs associated with the Lessor's acquisition of title to the Improvements
and the Process Equipment and any refinancing thereof, and (b) all Capitalized
Expenses to be provided by the Lessor.
"Facility Plan": the architectural and engineering plans and
specifications for the Facility and list of Facility Plan documents designated
as Schedule 1(a) to the Lease in the form furnished to the Lessor, as the same
may be amended, supplemented or otherwise modified from time to time with the
consent of the Lessor.
"Factored Receivables Obligations": any recourse or
non-recourse obligation, guarantee or other contractual undertaking of the
Parent or any Subsidiary arising in connection with the sale, factoring or other
disposition of leases, receivables or other accounts, if such sale, factoring or
disposition, whether with or without recourse, is for a fair price (on the basis
of the face amount of the respective item, on the basis of the present value or
its income stream or on the basis of another arms' length determination)
together with the interests of the seller of such lease, receivable or other
account in the equipment or other property related to such lease, receivable or
other account, and not at a distress sale or other "deep" discount.
"Fair Market Sale Value": at any time, with respect to the
Facility, the fair market sale value of the Facility at such time as determined
by an independent appraisal obtained pursuant to Section 15(c). Such Fair Market
Sale Value shall be equal to the sale value of the Facility which would be
obtained in an arm's-length transaction between an informed and willing seller
under no compulsion to sell and an informed and willing buyer-user (other than a
Person currently in possession of the Facility and other than a broker or a
dealer), which determination shall be made (i) without deduction of any costs or
expenses of dismantling of any Process Equipment and moving it to a new
location, and (ii) on the assumption that the Facility Equipment is free and
clear of all Liens and is in the condition and repair in which it is required to
be maintained pursuant to this Lease.
"Federal Funds Rate": for any day, the rate per annum (rounded
upward, if necessary, to the next higher 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day, provided that (a) if the day for which such rate is to be
determined is not a Business Day, the Federal Funds Rate for such day shall be
such rate on such transactions on the next preceding Business Day, and (b) if
such rate is not so published for any day, the Federal Funds Rate for such day
shall be the average rate charged to the Lessor on such day on such
transactions, as determined by the Lessor.
"Fiscal Quarter": any fiscal quarter of the Parent.
"Fiscal Year": any fiscal year of the Parent.
"Fixed Charge Coverage Ratio": for any period, the ratio of
Income Available for Fixed Charges to Consolidated Fixed Charges.
"Force Majeure Event": the occurrence of one or more of the
following events during the Construction Term that (a) causes damage to the
Facility or delay in the construction
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of the Improvements or acquisition and installation of the Process Equipment and
that occur beyond the direct or indirect control of the Lessee, including in its
capacity as the Acquisition/Construction Agent (including any subcontractors or
Persons acting as the Lessee's agents), including, without limitation, fire,
flood, earthquake, hurricane, cyclone, tornado or other acts of God, civil
unrest, insurrection or other acts of the public enemy, and (b) any other events
that are beyond the control of the Lessee.
"Force Majeure Loss": the loss incurred in connection with a
Force Majeure Event measured by the lower of insurance proceeds paid with
respect thereto plus the related deductible amount (if any) or the reduction in
Fair Market Sales Value of the Property as a result of the Force Majeure Event
as set forth in an Approved Appraisal (provided, that insurance proceeds shall
be used in such calculation only to the extent the event giving rise to the loss
can be remediated for an amount equal to the resulting insurance proceeds plus
the deductible), or (b) any other loss or payment obligation arising out of a
Force Majeure Event.
"Fully Indemnifiable Event": (a) any claims of the Lessor for
indemnification losses unrelated to construction arising from any actions or
failures to act on the part of the Lessee, as Acquisition/Construction Agent, or
the Lessee's agents or subcontractors while in possession or control of the
Facility; (b) any act of fraud, misapplication of funds, illegal acts, or
willful misconduct on the part of the Lessee or (c) any Bankruptcy Event.
"Funded Amount": the aggregate amount of Facility Cost,
accrued and unpaid Rent and all other amounts owed by the Lessee to the Lessor
pursuant to this Lease or any other Operative Document.
"Funding Office": the funding office of the Lessor (or an
affiliate of the Lessor) designated for any Advance on the signature pages of
the Lease (or in an assignment executed by the Lessor pursuant to Section 21(d)
of the Lease) or such other offices of the Lessor (or of an affiliate of the
Lessor) as the Lessor may from time to time specify to the Lessee as the office
from which its Advances are to be made and maintained.
"GAAP": generally accepted accounting principles in the United
States of America applied on a basis consistent with those which, in accordance
with Section 1(c) of the Lease, are to be used in making the calculations for
purposes of determining compliance by the Lessee and the Guarantors with the
provisions of the Operative Documents applicable thereto.
"GAAP Facility Cost": that portion of Facility Cost properly
capitalized as "project costs" under GAAP.
"Governmental Authority": to include the country, state,
county, city and political subdivisions in which any Person or any such Person's
property is located or that exercises valid jurisdiction over any such Person or
any such Person's property, and any court, agency, department, commission,
board, bureau or instrumentality of any of them including monetary authorities
that exercise valid jurisdiction over any such Person or any such Person's
property. Unless otherwise specified, all references to Governmental Authority
herein shall mean a Governmental Authority having jurisdiction over, where
applicable, the Lessee, the Site, the Facility, the Lessor, any Funding Office
or any Operative Document.
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"Governmental Requirement": any law, statute, code, ordinance,
order, determination, regulation, Judgment, injunction, franchise, permit,
certificate, license, authorization or other direction or requirement (whether
or not having the force of law), including, without limitation, Environmental
Requirements, and occupational, safety and health standards or controls, of any
Governmental Authority.
"Ground Lease": means that certain Ground Lease of even date
herewith between Lessee and Lessor pertaining to the Site, as the same may be
amended, restated, supplemented or otherwise modified from time to time.
"Guarantee": with respect to any Person, any obligation,
contingent or otherwise, of such Person directly or indirectly guaranteeing any
Debt or other obligation of any other Person and, without limiting the
generality of the foregoing, any obligation, direct or indirect, contingent or
otherwise, of such Person (a) to secure, purchase or pay (or advance or supply
funds for the purchase or payment of) such Debt or other obligation of such
other Person (whether arising by virtue of partnership arrangements, by
agreement to keep-well, to purchase assets, goods, securities or services, to
provide collateral security, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (b) entered into for the purpose of assuring in any
other manner the obligee of such Debt or other obligation of the payment thereof
or to protect such obligee against loss in respect thereof (in whole or in
part), provided that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning. The amount of any Guarantee shall be
deemed to be an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Guarantee is made (or, if less, the maximum
amount of such primary obligation for which such Person may be liable pursuant
to the terms of the instrument evidencing such Guarantee) or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder), as determined by such
Person in good faith.
"Guarantor": the Parent, any Subsidiary Guarantor or any other
Person that guaranties the payment of the obligations of the Lessee under the
Operative Documents upon terms and conditions satisfactory to the Lessor.
"Hazardous Materials": to include, without limitation, (a)
solid or hazardous waste, as defined in the Resource Conservation and Recovery
Act of 1980, 42 U.S.C. ss. 6901 et seq. and its implementing regulations and
amendments, or in any applicable federal, state or local law or regulation, (b)
"hazardous substance", "pollutant", or "contaminant" as defined in CERCLA, or in
any applicable state or local law or regulation, (c) gasoline, or any other
petroleum product or by-product, including, crude oil or any fraction thereof,
(d) insecticides, fungicides, or rodenticides, as defined in the Federal
Insecticide, Fungicide, and Rodenticide Act of 1975, or in any applicable state
or local law or regulation, as each such Act, statute or regulation may be
amended from time to time, or (e) any toxic or hazardous materials, wastes,
polychlorinated biphenyls ("PCBs"), lead-containing materials, asbestos or
asbestos-containing materials, urea formaldehyde, radioactive materials,
pesticides, the discharge of sewage or effluent, or any other materials or
substances defined as or included in the definition of "hazardous materials,"
"hazardous waste," "contaminants" or similar terms under any Environmental
Requirement.
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"Highest Lawful Rate": with respect to the Lessor, the maximum
non-usurious Rent rate that at any time or from time to time may be contracted
for, taken, reserved, charged or received with respect to any amounts owing
hereunder under laws applicable to the Lessor which are presently in effect or,
to the extent allowed by law, under such applicable laws which may hereafter be
in effect and which allow a higher maximum non-usurious Rent rate than
applicable laws now allow.
"Impositions": without duplication, as to any Person, (a) all
Taxes, assessments, levies, fees, water and sewer rents and charges, inspection
fees and other authorization fees and all other governmental charges, general
and special, ordinary and extraordinary, foreseen and unforeseen, of every
character (including all penalties and interest thereon) that, at any time prior
or subsequent to the Closing Date, are imposed or levied upon or assessed
against or may be or constitute a Lien upon such Person or such Person's
Property, or that arise in respect of the ownership, operation, occupancy,
possession, use, non-use, condition, leasing or subleasing of such Person's
Property; (b) all charges, levies, fees, rents or assessments for or in respect
of utilities, communications and other services rendered or used on or about
such Person's Property; (c) payments required in lieu of any of the foregoing;
but excluding any penalties or fines imposed on the Lessor for violation by it
of any banking laws or securities law; and (d) any and all taxes, recording fees
and other charges (including penalties and interest) relating to or arising out
of the execution, delivery or recording of any of the Operative Documents for
the amounts evidenced, secured or referred to be paid thereby, including without
limitation, documentary stamp taxes, intangible taxes, recording fees and sales
and rent taxes.
"Improvements": collectively, the facility to be constructed
on the Site and certain improvements and enhancements to the foregoing in
accordance with the Facility Plan, together with all accessions thereto and
replacements thereof, and together with all accessories, equipment, parts and
devices necessary to achieve Completion, and all fixtures now or hereafter
included in or attached to the Site, the facility and such enhancements and
improvements and modifications, but excluding the Site and Process Equipment.
"Income Available for Fixed Charges": for any period means the
sum of (i) Consolidated Net Income (before tax expense), and (ii) Consolidated
Fixed Charges, all determined with respect to the Parent and its Consolidated
Subsidiaries on a consolidated basis for such period and in accordance with
GAAP.
"Indemnified Party": as defined in Section 31(j)(i) of the
Lease.
"Indemnified Risks": as defined in Section 31(j)(i) of the
Lease.
"Initial Funding Date": the Closing Date, or such later date
on which the conditions precedent set forth in Sections 28(a) and (b) of the
Lease have been satisfied.
"Insurance Requirements": all terms of any insurance policy
(including, without limitation, casualty and general liability) covering or
applicable to the Facility or any part thereof maintained in accordance with
Section 14 of the Lease, and all requirements of the issuer of any such policy.
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"Investment": in any Person means any loan or advance to such
Person, any purchase or other acquisition of any Capital Stock or Debt or the
assets comprising a division or business unit or a substantial part or all of
the business of such Person, any capital contribution to such Person or any
other direct or indirect investment in such Person, including, without
limitation, any acquisition by way of a merger or consolidation, and any
arrangement pursuant to which the investor incurs Debt of the type referred to
in clause (i) of the definition of "Debt" in respect of such Person.
"Joint Venture Investments": at any date, an amount equal to
the sum of (a) all amounts that would be, in conformity with GAAP, set forth
opposite the caption "Investment in unconsolidated joint ventures" (or any like
caption) on a consolidated balance sheet of the Parent and its Consolidated
Subsidiaries, and (b) the aggregate value, determined in accordance with GAAP,
of all Investments by the Parent and its Consolidated Subsidiaries in
Consolidated Joint Ventures.
"Judgment": any judgment, decree, writ, order, determination,
injunction, rule or other requirement of any arbitrator or any court, tribunal
or other direction or requirement of court, tribunal or other Governmental
Authority.
"Lease": the Lease Agreement to which this Schedule 1(b) is
attached (as the same may be amended, modified or supplemented from time to
time, between the Lessee and the Lessor.
"Lease Commencement Date": the Closing Date.
"Lease Term": the period of time commencing on the Lease
Commencement Date and ending on the Lease Termination Date.
"Lease Termination Date": the earlier to occur of (a) the
Cancellation Date, (b) the date of termination of this Lease as a result of a
Termination Event and (c) the Scheduled Lease Termination Date.
"Lessee": as defined in the initial paragraph of the Lease.
"Lessor": as defined in the initial paragraph of the Lease.
"LIBO Rate": with respect to any Basic Rent for the applicable
Rental Period therefor, the rate per annum determined on the basis of the
offered rate for deposits in Dollars of amounts equal or comparable to the
amount of such Basic Rent offered for a term comparable to such Rental Period,
which rates appear on Telerage Page 3750 as of 11:00 A.M., London time, 2
Business Days prior to the first day of such Rental Period, provided that (i) if
more than one such offered rate appears on Dow Xxxxx Markets, Inc. Page 3750,
the "LIBO Rate" will be the arithmetic average of such offered rates; (ii) if no
such offered rates appear on such page, the "LIBO Rate" for such Rental Period
will be the arithmetic average (rounded upward, if necessary, to the next higher
1/100th of 1%) of rates quoted by not less than two major banks in New York
City, selected by the Lessee, at approximately 10:00 A.M., New York City time, 2
Business Days prior to the first day of such Rental Period, for deposits in
Dollars offered to
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leading European banks for a period comparable to such Rental Period in an
amount comparable to the amount of such Basic Rent.
"Lien": with respect to any asset, any mortgage, deed to
secure debt, deed of trust, lien, pledge, charge, security interest, security
title, preferential arrangement which has the practical effect of constituting a
security interest or encumbrance, or encumbrance or servitude of any kind in
respect of such asset to secure or assure payment of a Debt or a Guarantee,
whether by consensual agreement or by operation of statute or other law, or by
any agreement, contingent or otherwise, to provide any of the foregoing. For the
purposes of this definition, the Lessee or any Subsidiary shall be deemed to own
subject to a Lien any asset which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such asset.
"Limited Recourse Default" has the meaning specified in
Section 17(a).
"Loss Event": any of the following events in respect of the
Facility: (a) the total loss of the Facility or the total loss of use thereof
due to theft, disappearance, destruction, damage beyond repair, rendition of the
Facility permanently unfit for normal use for any reason whatsoever or any other
Force Majeure Event; (b) any damage to the Facility which results in an
insurance settlement with respect to the Facility on the basis of a total loss;
(c) the permanent condemnation, confiscation or seizure of, or requisition of
title to or use of, all or substantially all of the Facility including, but not
limited to, a permanent taking by eminent domain of such scope that the untaken
portion of the Facility is insufficient to permit the restoration of the
Facility for continued use in the Lessee's business or that causes the remaining
portion of the Facility to be incapable of being restored to a condition that
would permit the remaining portion of the Facility (without the portion of the
Facility taken by eminent domain) to continue to have the capacity and
functional ability to perform on a continuing basis (subject to normal
interruptions in the ordinary course of business for maintenance, inspection,
service, repair and testing) and in commercial operation, the function for which
the Facility (as a whole) was designed as specified in the Facility Plan or a
temporary taking of such nature for a period exceeding 180 consecutive days; or
(d) the occurrence of any event or the discovery of any condition in, on,
beneath or involving the Facility or any part thereof (including, but not
limited to the presence of hazardous substances or the violation of any
applicable Environmental Requirement) that would have a material adverse effect
on the use, occupancy, possession, condition, value or operation of the Facility
or any part thereof, which event or condition requires remediation (A) the cost
of which is anticipated, in the opinion of the Lessor, in consultation with an
independent environmental engineering firm, to exceed 15% of the Termination
Value, and (B) that could not reasonably be expected to be completed
substantially in its entirety prior to the date that is 30 days prior to the
then-applicable Scheduled Lease Termination Date or is not actually completed
substantially in its entirety on or before the date that is 30 days prior to the
then-applicable Scheduled Lease Termination Date.
"Margin Stock": "margin stock" as defined in Regulations U.
"Material Adverse Effect": with respect to any event, act,
condition or occurrence of whatever nature (including any adverse determination
in any litigation, arbitration, or governmental investigation or proceeding),
whether singly or in conjunction with any other event
15
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or events, act or acts, condition or conditions, occurrence or occurrences,
whether or not related, a material adverse change in, or a material adverse
effect upon, any of (a) the financial condition, operations, business, or
properties of the Lessee and its Consolidated Subsidiaries taken as a whole, (b)
the rights, powers and remedies of the Lessor under the Operative Documents, or
the ability of the Lessee (in its capacity as such or in its capacity as
Acquisition/Construction Agent) to perform its respective obligations under the
Operative Documents to which it is a party, as applicable, (c) the legality,
validity or enforceability of any Operative Document, or (d) the use, occupancy,
possession, condition, value or operation of the Facility.
"Material Subsidiary": as of each date of determination, any
Consolidated Subsidiary (i) whose consolidated total assets exceed 5% of
Consolidated Total Assets or (ii) whose consolidated total revenues exceed 5% of
the consolidated revenues of the Parent and its Consolidated Subsidiaries
determined in accordance with GAAP as of the last day of the Fiscal Quarter of
the Parent most recently ended as of such date of determination and for which
financial statements have been delivered to the Lessor pursuant to Section
30(a)(i) and (ii) of the Lease.
"Maximum Residual Percentage": as of any date of
determination, with respect to the Facility, a percentage to be determined as
being the maximum percentage in order for the Lease to be classified as an
operating lease in accordance with GAAP.
"Mortgage": as defined in Section 26 of the Lease.
"Multiemployer Plan": has the meaning set forth in Section
4001(a)(3) of ERISA.
"Net Income" means, as applied to any Person for any period,
the aggregate amount of net income of such Person, after taxes, for such period,
as determined in accordance with GAAP.
"Non-Completion Event": the occurrence of an Event of Default
under Section 17(a)(xiii).
"Non-Guarantor Joint Venture Investments": Joint Venture
Investments in Persons that are not Guarantors.
"Operating Profits": as applied to any Person for any period,
the operating income of such Person for such period, as determined in accordance
with GAAP.
"Operative Documents": collectively, the Lease, the Ground
Lease, the Agency Agreement, the Parent Guaranty, the Subsidiary Guaranty, the
Contribution Agreement, and any and all other agreements or instruments now or
hereafter executed and delivered, or required to be executed and delivered, by
the Lessor, any Guarantor or the Lessee in connection with the Lease or the
Agency Agreement, as such agreements or instruments may be amended,
supplemented, renewed, extended, increased or otherwise modified from time to
time.
"Other Transaction Expenses": as defined in Section 15(f)(i)
of the Lease.
16
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"Parent Guaranty": the Guaranty Agreement of even date
herewith in substantially the form of Exhibit F to be executed by the Parent.
"PBGC": the Pension Benefit Guaranty Corporation or any
successor thereto.
"Permit": any approval, consent, waiver, exemption, variance,
franchise, order, permit, authorization, right or license of or from any
Governmental Authority or other Person.
"Permitted Acquisition": any Acquisition, provided that (a)
the Person being acquired in such Acquisition is engaged in the same or
substantially the same line or lines of business, or in a business reasonably
related to such line or lines of business, as the Lessee as of the Closing Date,
(b) the Lessee satisfies, and will continue to satisfy, after giving effect (on
a pro forma basis) to such Acquisition and any Debt incurred in connection
therewith, the financial covenants set forth in Sections 30(v), (w), (x) and (y)
through the Scheduled Lease Termination Date as set forth in a certificate of an
Authorized Officer delivered to the Lessor at least five Business Days prior to
the consummation of such Acquisition (provided, that no such certificate shall
be required prior to the consummation of such Acquisition if the Lessee's
aggregate consideration for such Acquisition constitutes less than 10% of
Consolidated Tangible Net Worth), (c) such Acquisition is approved by the Board
of Directors (or a majority of holders of the Capital Stock of such Person) of
the Person whose assets or Capital Stock are being acquired pursuant to such
Acquisition, and (d) no Default has then occurred and is continuing or would
result therefrom.
"Permitted Insurers": insurers with ratings of A or better and
Class VIII or better according to Best's Insurance Reports, or other insurers
acceptable to the Lessor.
"Permitted Lease Investment Balance": the Termination Value
minus any Force Majeure Loss, plus the amount of insurance proceeds applied
towards the remediation of such loss.
"Permitted Liens": (i) with respect to any Property other than
the Lease or the Facility, any of the Liens permitted by the terms of Section
30(u) of the Lease, and (ii) with respect to the Facility or any Property
included in or comprising the Facility or any part thereof, any of the
following:
(a) rights reserved to or vested in any
Governmental Authority by the terms of any right, power, franchise,
grant, license, permit or provision of law affecting the Facility to
(1) terminate, or take any other action which has the effect of
modifying, such right, power, franchise, grant, license, permit or
provision of law, provided that such termination or other action, when
taken, shall not have resulted in a Loss Event and shall not have had a
Material Adverse Effect, or (2) purchase, condemn, appropriate or
recapture, or designate a purchaser of, the Facility;
(b) any Liens thereon for Impositions or Taxes
and any Liens of mechanics, materialmen and laborers for work or
services performed or materials furnished which (1) are not overdue, or
(2) are being contested in good faith in the manner described in
Section 13 of the Lease;
17
91
(c) Liens of mechanics, materialmen and laborers
for work or services performed or materials furnished (1) existing
during the Construction Term and (2) arising pursuant to the Operative
Documents in accordance with the Facility Plan;
(d) rights reserved to or vested in any
Governmental Authority to control or regulate the use of such Property
or to use the Facility in any manner;
(e) in the case of the Site, encumbrances,
easements, and other similar rights existing on the Closing Date the
existence or exercise of which do not have a Material Adverse Effect;
and
(f) any Liens created in favor of the Lessor
under this Lease or any of the other Operative Documents and any
financing statements filed in connection therewith.
"Permitted Use": with respect to the Facility, the occupation
and use of the Site and the Improvements as a mix and distribution facility in
compliance with all applicable Governmental Requirements and Insurance
Requirements.
"Person": an individual, a corporation, a limited liability
company, a partnership, an unincorporated association, a trust or any other
entity or organization, including, but not limited to, a government or political
subdivision or other Governmental Authority.
"Plan": at any time an employee pension benefit plan which is
covered by Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code and is either (i) maintained by a member of the
Controlled Group for employees of any member of the Controlled Group or (ii)
maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to which
a member of the Controlled Group is then making or accruing an obligation to
make contributions or has within the preceding 5 plan years made contributions.
"Pricing Schedule": the Pricing Schedule attached as Schedule
4(a) to the Lease.
"Prime Rate": that rate of interest so denominated and set by
Wachovia Bank from time to time as an interest rate basis for borrowings. The
Prime Rate is but one of several interest rate bases used by Wachovia Bank, and
is set by Wachovia Bank as a general reference rate of interest, taking into
account such factors as Wachovia Bank may deem appropriate, it being understood
that many of Wachovia Bank's commercial or other loans are priced in relation to
such rate, that it is not necessarily the lowest or best rate actually charged
to any customer and that Wachovia Bank may make various commercial or other
loans at rates of interest having no relationship to such rate.
"Process Equipment": equipment used for the blending,
processing and packaging of mix for doughnut and bakery products and for the
grinding and finishing of sugar, and equipment used for the racking and storage
of mix, sugar, shortening and other items necessary for the operation of a
doughnut shop, including without limitation, the equipment described on Schedule
1(c).
18
92
"Property": any kind of property or asset, whether real,
personal or mixed, or tangible or intangible, and any interest therein.
"Purchase Option": the right of the Lessee to purchase the
Facility pursuant to Section 15(a)(ii)(A) or Section 15(b)(ii).
"Redeemable Preferred Stock": of any Person means any
preferred stock issued by such Person which is at any time prior to the
Scheduled Lease Termination Date either (i) mandatorily redeemable (by sinking
fund or similar payments or otherwise) or (ii) redeemable at the option of the
holder thereof.
"Regulation A" Regulation A of the Board of Governors of the
Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
"Regulation D": Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
"Regulation T": Regulation T of the Board of Governors of the
Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
"Regulation U": Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
"Regulation X": Regulation X of the Board of Governors of the
Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
"Related Contract": any agreement, contract, xxxx of sale,
receipt or Vendor's warranty relating to or for the purchase, acquisition,
design, engineering, testing, manufacture, renovation, assembly, construction or
installation of the Facility or any part thereof or the provision of
enhancements and improvements to the Facility, or otherwise in connection with
the acquisition, ownership, use, operation or sale or other disposition of the
Facility, made, entered into or received by the Acquisition/Construction Agent
on behalf of the Lessor pursuant to the Agency Agreement with or from one or
more Vendors or other Persons.
"Rent": Basic Rent and Supplemental Rent, collectively.
"Rental Period": the period beginning on the Lease
Commencement Date and ending on the first Rent Payment Date occurring after the
Lease Commencement Date and, thereafter, each subsequent period commencing on
each Rent Payment Date and ending on the next Rent Payment Date or on the Lease
Termination Date.
"Rent Payment Date": the 18th day of each calendar month,
commencing on the first such date following the Closing Date, and the Lease
Termination Date.
19
93
"Repair Option" has the meaning specified in Section 14(b).
"Reported Net Income": for any period, the Net Income of the
Parent and its Consolidated Subsidiaries determined on a consolidated basis.
"Residual Value Amount": an amount, for the Facility,
calculated as of the Completion Date, equal to (i) the product of (x) GAAP
Facility Cost multiplied by (y) the Maximum Residual Percentage for the Facility
minus (ii) the future value, as of the Scheduled Lease Termination Date, of the
sum of any payments the Acquisition/Construction Agent is obligated to make
during the Construction Term other than for Fully Indemnifiable Events.
"Restoration Account": the interest bearing account maintained
with the Lessor pursuant to Section 14(e) of the Lease and styled the
"Restoration Account".
"Restricted Payment": (i) any dividend or other distribution
on any shares of the Lessee's Capital Stock (except dividends payable solely in
shares of its Capital Stock) or (ii) any payment on account of the purchase,
redemption, retirement or acquisition of (a) any shares of the Lessee's Capital
Stock (except shares acquired upon the conversion thereof into other shares of
its Capital Stock) or (b) any option, warrant or other right to acquire shares
of the Lessee's Capital Stock.
"Sale Option": the right of the Lessee to sell the Facility
pursuant to Section 15(a)(ii)(B)(2) or Section 15(b)(ii), as applicable, and
Section 15(c).
"Secured Amount": as defined in Section 26 of the Lease.
"Scheduled Lease Termination Date": the date that is 5 years
after the Completion Date or such later date to which it may be extended subject
and pursuant to the provisions of Section 2(b) of the Lease.
"Secured Party": as defined in Section 26 of the Lease.
"Site": as defined in the Recitals to the Lease.
"Soil Test Reports": soil test reports as to soil borings on
the Site by a soil testing firm satisfactory to the Lessor and including (a) the
number and location of such borings shall be in accordance with the
recommendations of the soil testing firm and also satisfactory to the Lessor and
(b) the recommendations of the soil testing firm as to the preparation of the
soil needed to adequately support the Facility.
"Stockholders' Equity": at any time, the shareholders' equity
of the Parent and its Consolidated Subsidiaries, as set forth or reflected on
the most recent consolidated balance sheet of the Parent and its Consolidated
Subsidiaries prepared in accordance with GAAP, but excluding any Redeemable
Preferred Stock of the Parent or any of its Consolidated Subsidiaries.
shareholders' equity generally would include, but not be limited to (i) the par
or stated value of all outstanding Capital Stock, (ii) capital surplus, (iii)
retained earnings, and (iv) various deductions such as (A) purchases of treasury
stock, (B) valuation allowances, (C) receivables
20
94
due from an employee stock ownership plan, (D) employee stock ownership plan
debt guarantees, and (E) translation adjustments for foreign currency
transactions.
"Sublessee": as defined in Section 21(c) of the Lease.
"Subsidiary": any corporation or other entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by the Parent. Unless otherwise
qualified, all references to a "Subsidiary" or to "Subsidiaries" in this Lease
shall refer to a Subsidiary or Subsidiaries of the Parent.
"Subsidiary Guarantor": each Subsidiary that is a guarantor
under the Subsidiary Guaranty.
"Subsidiary Guaranty": the Guaranty Agreement of even date
herewith in substantially the form of Exhibit D to be executed by each
Subsidiary Guarantor.
"Supplemental Rent": as defined in Section 4(b) of the Lease.
"Support Expenses": as defined in Section 3.2(k) of the Agency
Agreement.
"Survey": a current ALTA-ACSM survey of the Site and any
existing improvements from a registered surveyor in form and substance
satisfactory to the Lessor, and containing such certifications as the Lessor may
request.
"Synthetic Lease": any synthetic lease, tax retention
operating lease, or off-balance sheet financing product where such transaction
is considered borrowed money indebtedness for tax purposes but which is
classified as an operating lease pursuant to GAAP.
"Taxes": as defined in Section 4(e) of the Lease.
"Termination Event": as defined in Section 15(a) of the Lease.
"Termination Value": at any time of determination, an amount
equal to the sum of: (i) the excess of (a) the aggregate Facility Cost over (b)
the sum of any prepayments of Facility Cost theretofore made to the Lessor; plus
(ii) all accrued, unpaid fees, Basic Rent and Supplemental Rent; plus (iii)
without duplication, all unpaid Impositions payable in connection with the
exercise of the Purchase Option; plus (iv) if Completion has not occurred, all
Completion Costs; plus (v) all other amounts owing by the Lessee under the
Operative Documents.
"Third Party": any Person other than (a) the Lessor, (b) the
Lessee or (c) any Affiliate of either of them.
"UCC": the Uniform Commercial Code as enacted in the State of
New York and any other jurisdiction whose laws may be mandatorily applicable.
21
95
"Unconsolidated Joint Venture": any Person (other than the
Parent or a Consolidated Subsidiary) (a) in which the Parent and/or any of its
Consolidated Subsidiaries has made an Investment, and (b) that develops and owns
Krispy Kreme doughnut and bakery stores.
"Vendor": any designer, supplier, manufacturer or installer
of, or provider of Property or services with respect to, the Facility or any
Property included therein or any part thereof.
"WCI": as defined in the initial paragraph of the Lease.
"Wachovia Bank": Wachovia Bank, N.A., a national banking
association, in its individual capacity, and its successors.
"Wholly Owned Subsidiary": any Subsidiary all of the shares of
Capital Stock or other ownership interests of which (except directors'
qualifying shares) are at the time directly or indirectly owned by the Parent.
22
96
SCHEDULE 1(c)
List of Process Equipment
97
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ORDER #
VENDOR/ DEL BUDGET ACTUAL ORDER # ORDER DEL
SUFFIX TAG DESCRIPTION PO# SCH COST COST COST VAR. VEN/PO DATE SCH
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FLOUR UNLOADING & STORAGE
TK Flour silo 14 ft diameter, 215,000
1010 pounds capacity $49,279 INCREMENTAL 2500
TK Flour silo 14 ft diameter, 215,000
1020 pounds capacity $49,279 COST 2500
TK Flour silo 14 ft diameter, 215,000
1030 pounds capacity $49,279 PRESSURE 2500
TK Flour silo 14 ft diameter, 215,000
1040 pounds capacity $49,279 SIFTERS 2500
TK Flour silo 14 ft diameter, 215,000
1050 pounds capacity $49,279 2500
TK Flour silo 14 ft diameter, 215,000
1060 pounds capacity $49,279 2500
TK Flour silo 14 ft diameter, 215,000
1070 pounds capacity $49,279 2500
TK Flour silo 14 ft diameter, 215,000
1080 pounds capacity $49,279 2500
Air Vents Silos - 8 12 inch dia
Pick Up Pans - 8 silos
BV 1017 12" Automatic Butterfly Valve $3,759
BV 1027 12" Automatic Butterfly Valve $3,759
BV 1037 12" Automatic Butterfly Valve $3,759
BV 1047 12" Automatic Butterfly Valve $3,759
BV 1057 12" Automatic Butterfly Valve $3,759
BV 1067 12" Automatic Butterfly Valve $3,759
BV 1077 12" Automatic Butterfly Valve $3,759
BV 1087 12" Automatic Butterfly Valve $3,759
AD 1018 Air Slide for TK 1010 $7,875
AD 1028 Air Slide for TK 1020 $7,875
AD 1038 Air Slide for TK 1030 $7,875
AD 1048 Air Slide for TK 1040 $7,875
AD 1058 Air Slide for TK 1050 $7,875
AD 1068 Air Slide for TK 1060 $7,875
AD 1078 Air Slide for TK 1070 $7,875
AD 1088 Air Slide for TK 1080 $7,875
Vacuum Receiver Stainless with collector
TK 1150 bags $25,221
E 1140 Rail Car Unloader $13,230
DC 1012 Silo Dust Collector $16,950
DC 1022 Silo Dust Collector $16,950
DC 1032 Silo Dust Collector $16,950
DC 1042 Silo Dust Collector $16,950
DC 1052 Silo Dust Collector $16,950
DC 1062 Silo Dust Collector $16,950
DC 1072 Silo Dust Collector $16,950
DC 1082 Silo Dust Collector $16,950
F 1011 Silo Dust Collector Fan $2,000
F 1021 Silo Dust Collector Fan $2,000
F 1031 Silo Dust Collector Fan $2,000
F 1041 Silo Dust Collector Fan $2,000
F 1051 Silo Dust Collector Fan $2,000
F 1061 Silo Dust Collector Fan $2,000
F 1071 Silo Dust Collector Fan $2,000
F 1081 Silo Dust Collector Fan $2,000
RV 1019 Rotary Valve Flour, 12 inch valve $8,896
RV 1029 Rotary Valve Flour, 12 inch valve $8,896
RV 1039 Rotary Valve Flour, 12 inch valve $8,896
RV 1049 Rotary Valve Flour, 12 inch valve $8,896
RV 1059 Rotary Valve Flour, 12 inch valve $8,896
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CASH PAYMENT SCHEDULE
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SUFFIX TAG Feb Mar April May June May June July Aug Sept Oct
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ORDER #
VENDOR/ DEL BUDGET ACTUAL ORDER # ORDER DEL
SUFFIX TAG DESCRIPTION PO# SCH COST COST COST VAR. VEN/PO DATE SCH
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RV 1069 Rotary Valve Flour, 12 inch valve $8,896
RV 1079 Rotary Valve Flour, 12 inch valve $8,896
RV 1089 Rotary Valve Flour, 12 inch valve $8,896
Rotary Valve Flour, 12 inch valve, with
RV 1099 pickup pan $10,733 *
Rotary Valve Flour, 12 inch valve, with pick up
RV 1109 pans and airlock xxxxxx $12,854 *
Rotary Valve Flour, 14 inch valve, with pick-
RV 1159 up pans and airlock xxxxxx $17,123 *
RV 1200 Two position Tunnel Divert - 6" $9,870
RV 1201 Two position Tunnel Divert - 6" $9,870
RV 1202 Two position Tunnel Divert - 6" $9,870
RV 1203 Two position Tunnel Divert - 6" $9,870
RV 1206 Two position Tunnel Divert - 6" $9,870
RV 1207 Two position Tunnel Divert - 6" $9,870
RV 1208 Two position Tunnel Divert - 6" $9,870
RV 1209 Two position Tunnel Divert - 6" $9,870
RV 1219 Two position Tunnel Divert - 6" $9,870
RV 1229 Two position Tunnel Divert - 6" $9,870
M 1160 Bullet Magnets $7,035
M 1161 Bullet Magnets $7,035
GR 1110 Entoleter $16,546
GR 1130 Entoleter $16,546
BL 1001 Air Slide Blower $5,565 *
BL 1002 Vacuum Blower $15,225 *
BL 1003 Transfer Blower Package - Rail Unloading $16,800 *
BL 1007 Transfer Blower Package - Trucking Unloading $13,188
BL 1006 Transfer Blower Package - Material Transfer $12,233
BL 1008 Transfer Blower Package - Material Transfer $12,233
Great Western Sifter, Model 711 with outlet
SI 1100 stubes and guards $30,506 4500
Great Western Sifter, Model 711 with outlet
SI 1120 stubes and guards $30,506 4500
Press element and transmitter, air line, 0 to 25
PE/PT 1003 psig $1,575
Press element and transmitter, air line, 0 to 25
PE/PT 1004 psig $1,575
Press element and transmitter, air line, 0 to 25
PE/PT 1005 psig $1,575
Press element and transmitter, air line, 0 to 25
PE/PT 1006 psig $1,575
Press element and transmitter, air line, 0 to 25
PE/PT 1007 psig $1,575
Press element and transmitter, air line, 0 to 25
PE/PT 1008 psig $1,575
Press/Vac element and transmitter, air line
PE/PT 1002 20" Hg Vac to 5 psi $1,575
LE/LT 1013 Level Probe - Silo $4,034
LE/LT 1023 Level Probe - Silo $4,034
LE/LT 1033 Level Probe - Silo $4,034
LE/LT 1043 Level Probe - Silo $4,034
LE/LT 1053 Level Probe - Silo $4,034
LE/LT 1063 Level Probe - Silo $4,034
LE/LT 1073 Level Probe - Silo $4,034
LE/LT 1083 Level Probe - Silo $4,034
Roto-Bin dicator top mount with 4 vane
LS 1014 paddle $389
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CASH PAYMENT SCHEDULE
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ORDER #
VENDOR/ DEL BUDGET ACTUAL ORDER # ORDER DEL
SUFFIX TAG DESCRIPTION PO# SCH COST COST COST VAR. VEN/PO DATE SCH
------------------------------------------------------------------------------------------------------------------------------------
LS 1015 Auto-Bin Dicator Diaphragm Switch $299
Roto-Bin-Dicator top mount with 4 vane
LS 1024 paddle $389
LS 1025 Auto-Bin-Dicator Diaphragm Switch $299
LS 1035 Auto-Bin Dicator Diaphragm Switch $299
Roto-Bin-Dicator top mount with 4 vane
LS 1034 paddle $389
LS 1045 Auto-Bin Dicator Diaphragm Switch $299
Roto-Bin-Dicator top mount with 4 vane
LS 1044 paddle $389
Roto-Bin-Dicator top mount with 4 vane
LS 1054 paddle $389
LS 1055 Auto-Bin-Dicator Diaphragm Switch $299
Roto-Bin-Dicator top mount with 4 vane
LS 1064 paddle $389
LS 1065 Auto-Bin-Dicator Diaphragm Switch $299
LS 1075 Auto-Bin-Dicator Diaphragm Switch $299
Roto-Bin-Dicator top mount with 4 vane
LS 1074 paddle $389
LS 1085 Auto-Bin-Dicator Diaphragm Switch $299
Roto-Bin-Dicator top mount with 4 vane
LS 1084 paddle $389
LS 2164 Auto-Bin-Dicator Diaphragm Switch $389
Roto-Bin-Dicator top mount with 4 vane
LS 2165 paddle $389
Roto-Bin-Dicator top mount with 4 vane
LS 2175 paddle $389
XS 1012 Broken Bag Detector $2,048
XS 1022 Broken Bag Detector $2,048
XS 1032 Broken Bag Detector $2,048
XS 1042 Broken Bag Detector $2,048
XS 1052 Broken Bag Detector $2,048
XS 1062 Broken Bag Detector $2,048
XS 1072 Broken Bag Detector $2,048
XS 1082 Broken Bag Detector $2,048
SV 1016 Solenoid Air Spargers for silos $588
SV 1026 Solenoid Air Spargers for silos $588
SV 1036 Solenoid Air Spargers for silos $588
SV 1046 Solenoid Air Spargers for silos $588
SV 1056 Solenoid Air Spargers for silos $588
SV 1066 Solenoid Air Spargers for silos $588
SV 1076 Solenoid Air Spargers for silos $588
SV 1086 Solenoid Air Spargers for silos $588
FLOUR UNLOADING & STORAGE
SUBTOTAL $1,142,404 SUBTOTAL $29,000
INGREDIENT UNLOADING & STORAGE
Dextrose Silo 12 ft diameter, 213,000 pounds
TK 2110 capacity 44218 2500
Dextrose Silo 12 ft diameter, 213,000 pounds
TK 2120 capacity 44218 2500
Corn Starch Silo 10 ft diameter, 160,000
TK 2130 pounds capacity 41488
Salt Silo 10 ft diameter, 180,000 pounds
TK 2140 capacity 42394
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CASH PAYMENT SCHEDULE
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ORDER #
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SUFFIX TAG DESCRIPTION PO# SCH COST COST COST VAR. VEN/PO DATE SCH
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Soy Flour Silo 10 ft diameter, 160,000 pounds
TK 2150 capacity 41488
Vents - 4 silos - 10 inch
Vent - 1 silo - 6 inch
Pick up pans - 4 silos - 10" RV to 5"+C254
pipe
Pick up pans - 1 silo - 6" RV to 6" Pipe
LB 2118 Dextrose Silo live bottom 13945
LB 2128 Dextrose Silo live bottom 13945
EQ 2120 Delumpers
EQ 2130 Delumpers
LB 2148 Salt Silo live bottom 13945
LB 2158 Soy Flour Silo live bottom 13945
DC 2112 Silo Dust Collector 16950
DC 2122 Silo Dust Collector 16950
DC 2132 Silo Dust Collector 16950
DC 2142 Silo Dust Collector 16950
DC 2152 Silo Dust Collector 16950
F 2111 Dust Collector Fan 2000
F 2121 Dust Collector Fan 2000
F 2131 Dust Collector Fan 2000
F 2141 Dust Collector Fan 2000
F 2151 Dust Collector Fan 2000
Vacuum Receiver Stainless with collector
TK 2160 bags 25221
E 2200 Rail Car Unloader 13230
Great Western Sifter, Model 711 with outlet
SI 2220 stubs and guards 30506
Great Western Sifter, Model 711 with outlet
SI 2230 stubs and guards 30506 * 4,500
Great Western Sifter, Model 711 with outlet
SI 2240 stubs and guards 30506 *
Great Western Sifter, Model 711 with outlet
SI 2250 stubs and guards 30506 *
YV 2286 Three position Divert - 5" 9870 *
YV 2335 Two position Tunnel Divert - 6" 9870 *
YV 2365 Two position Tunnel Divert - 6" 9870 *
YV 2375 Two position Tunnel Divert - 6" 9870 *
YV 2385 Two position Tunnel Divert - 6" 9870 *
YV 2395 Two position Tunnel Divert - 6" 9870 *
YV 2405 Two position Tunnel Divert - 6" 9870 *
YV 2415 Two position Tunnel Xxxxxx - 0" 0000
X 0000 Xxxxxx Magnets - 6" 5670
M 2211 Bullet Magnets - 6" 5670
M 2212 Bullet Magnets - 5" 5670
M 2213 Bullet Magnets - 5"
M 2214 Bullet Magnets - 5"
AD 2138 Air Slide for TK 2130 - Corn Starch 13230
BL 2010 Air Slide Blower * 7140
BL 2020 Vacuum Blower * 15225
BL 2030 Transfer Blower, Rail Car Unloading * 16800
BL 2060 Transfer Blower Package-Truck Unloading * 13188
BL 2040 Transfer Blower Package-Material Transfer 12233
BL 2050 Transfer Blower Package-Material Transfer SUGAR SYS 12233
HX 2030 Blower Aftercooler - 850 cfm capacity 5670
HX 2040 Blower Aftercooler - 850 cfm capacity 5670
HX 2050 Blower Aftercooler - 850 cfm capacity 5670
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CASH PAYMENT SCHEDULE
------------------------------------------------------------------------------------------------------------
SUFFIX TAG Feb Mar April May June May June July Aug Sept Oct
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DL-1165805V10 4
101
UNLOADING
1/21/01
------------------------------------------------------------------------------------------------------------------------------------
ORDER #
VENDOR/ DEL BUDGET ACTUAL ORDER # ORDER DEL
SUFFIX TAG DESCRIPTION PO# SCH COST COST COST VAR. VEN/PO DATE SCH
------------------------------------------------------------------------------------------------------------------------------------
Blower Aftercooler - 1200 cfm
HX 2060 capacity SUGAR SYS 5670
Rotary Valve, 14 inch valve,
RV 2169 with pickup pan 15286
Rotary Valve, 10 inch valve, with
RV 2119 pick-up pans and airlock xxxxxx 11813 *
Rotary Valve, 10 inch valve, with
RV 2129 pick-up pans and airlock xxxxxx 11813 *
Rotary Valve, 6 inch valve, with
RV 2139 pick-up pans and airlock xxxxxx 11813 *
Rotary Valve, 10 inch valve, with
RV 2149 pick-up pans and airlock xxxxxx 11813
Rotary Valve, 10 inch valve, air
RV 2159 sparged seals 8190
S 2160 Screw Feeder, 10 inch, 10 ft long 7980
S 2176 Screw Feeder, 10 inch, 10 ft long 7980
S 2174 Screw Feeder, 10 inch, 10 ft long 7980
S 2189 Screw Feeder, 10 inch, 10 ft long 7980
HV 2117 10" Automatic Butterfly Valve 3177
HV 2127 10" Automatic Butterfly Valve 3177
HV 2137 6" Automatic Butterfly Valve 3177
HV 2147 10" Automatic Butterfly Valve 3177
HV 2157 10" Automatic Butterfly Valve 3177 *
Press element and transmitter,
PE/PT 2010 air line, 0 to 25 psig 1575 *
Press element and transmitter,
PE/PT 2030 air line, 0 to 25 psig 1575
Press element and transmitter,
PE/PT 2040 air line, 0 to 25 psig 1575
Press element and transmitter,
PE/PT 2050 air line, 0 to 25 psig 1575
Press element and transmitter,
PE/PT 2060 air line, 0 to 25 psig 1575
Press/Vac element and transmitter,
PE/PT 2020 air line, 20" Hg vac to 5 psi 1575
Temp Element/Temp Transmitter, air,
TE/TT 2030 20 F to 200 F 704
Temp Element/Temp Transmitter, air,
TE/TT 2040 20 F to 200 F 704
Temp Element/Temp Transmitter, air,
TE/TT 2050 20 F to 200 F
Temp Element/Temp Transmitter, air,
TE/TT 2060 20 F to 200 F
LE/LT 2113 Level Probe - Silo 4,034
LE/LT 2123 Level Probe - Silo 4,034
LE/LT 2133 Level Probe - Silo 4,034
LE/LT 2143 Level Probe - Silo 4,034
LE/LT 2153 Level Probe - Silo 4,034
LS 2115 Auto-Bin-Dicator Diaphragm Switch $299
Roto-Bin-Dicator top mount with
LS 2114 4 vane paddle $389
LS 2125 Auto-Bin-Dicator Diaphragm Switch $299
Roto-Bin-Dicator top mount with
LS 2124 4 vane paddle $389
Roto-Bin-Dicator top mount with
LS 2134 4 vane paddle $389
LS 2135 Auto-Bin-Dicator Diaphragm Switch $299
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CASH PAYMENT SCHEDULE
------------------------------------------------------------------------------------------------------------
Feb Mar April May June May June July Aug Sept Oct
------------------------------------------------------------------------------------------------------------
DL-1165805v10 5
102
UNLOADING
1/21/01
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ORDER #
VENDOR/ DEL BUDGET ACTUAL ORDER # ORDER DEL
SUFFIX TAG DESCRIPTION PO# SCH COST COST COST VAR. VEN/PO DATE SCH
------------------------------------------------------------------------------------------------------------------------------------
LS 2145 Auto-Bin-Dicator Diaphragm Switch $ 299
LS 2155 Auto-Bin-Dicator Diaphragm Switch $ 299
Roto-Bin-Dicator top mount with 4 vane
LS 2144 paddle $ 389
Roto-Bin-Dicator top mount with 4 vane
LS 2154 paddle $ 389
Roto-Bin-Dicator top mount with 4 vane
LS 2164 paddle $ 389
Roto-Bin-Dicator top mount with 4 vane
LS 2174 paddle $ 389
Roto-Bin-Dicator top mount with 4 vane
LS 2184 paddle $ 389
Roto-Bin-Dicator top mount with 4 vane
LS 2194 paddle $ 389
Roto-Bin-Dicator top mount with 4 vane
LS 2204 paddle $ 389
XS 2112 Broken Bag Detector 2048
XS 2122 Broken Bag Detector 2048
XS 2132 Broken Bag Detector 2048
XS 2142 Broken Bag Detector 2048
XS 2152 Broken Bag Detector 2048
Automatic ball valve 2 inch brass, air
TV 2030 to open 420
Automatic ball valve 2 inch brass, air
TV 2040 to open 420
Automatic ball valve 2 inch brass, air
TV 2050 to open 420
Automatic ball valve 2 inch brass, air
TV 2060 to open 420
SV 2285 Solenoid Air Spargers for TK-2130 798
INGREDIENT UNLOADING & STORAGE
SUBTOTAL 901174 9500
PRESS SIFT $38,500
INGREDIENT MICROSTATION
Wonderware Panel Enclosures - 4 28,000
INGREDIENT MICROSTATION SUB 28,000
UNLOADING - MCC & CONTROL PANEL
Unloading Panel Hardware 106,180
Panel Design Layout & Checkout 28,600
Deduct for Sugar Mcc and Control, Panel
UNLOADING SUBTOTAL 84,780
UNLOADING -MCC & CONTROL PANEL
SUBTOTAL UNLOADING $2,156,358
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CASH PAYMENT SCHEDULE
------------------------------------------------------------------------------------------------------------
SUFFIX TAG Feb Mar April May June May June July Aug Sept Oct
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DL-1165805v10 6
103
PROCESSING
1/21/01
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ORDER #
VENDOR/ DEL BUDGET ACTUAL ORDER # ORDER DEL
SUFFIX TAG DESCRIPTION PO# SCH COST COST COST VAR. VEN/PO DATE SCH
------------------------------------------------------------------------------------------------------------------------------------
BLOWER MCC AND PANEL
Ingredient Storage MCC & Control Panel 228500
Panel Design Layout & Checkout 19500
BLOWER MCC AND PANEL SUBTOTAL SUBTOTAL 248000
MAJOR INGREDIENT SYSTEM
TK 3000 5 ft dia 120 cubic ft 11225
TK 3010 5 ft dia 120 cubic ft 11225
TK 3020 5 ft dia 120 cubic ft 11225
TK 3030 5 ft dia 120 cubic ft 11225
TK 3040 5 ft dia 120 cubic ft 11225
TK 3050 4 ft dia 6 ft sides 10175
TK 3060 4 ft dia 6 ft sides 10175
TK 3070 4 ft dia 6 ft sides 10175
LB 3000 Live Bottom 4000
LB 3010 Live Bottom 4000
LB 3020 Live Bottom 4000
LB 3030 Live Bottom 4000
LB 3040 Live Bottom 4000
LB 3050 Live Bottom 4000
LB 3060 Live Bottom 4000
LB 3070 Live Bottom 4000
TK 3100 Majors Weigh Bin - 120 cu ft 10185
TK 3110 Minors Weigh Bin - 70 9030
TK 3120 Surge Bin 160 cu ft with live bottom 12695
LB 3128 Live Bottom - Surge 4000
TK 3130 Reqork Bin Receiver with Dust Collector 15225
DC 3002 Dust Collector, 200 sq ft 13335
DC 3012 Dust Collector, 200 sq ft 13335
DC 3022 Dust Collector, 200 sq ft 13335
DC 3032 Dust Collector, 200 sq ft 13335
DC 3042 Dust Collector, 200 sq ft 13335 *
DC 3052 Dust Collector, 150 sq ft 12075
DC 3062 Dust Collector, 150 sq ft 12075
DC 3072 Dust Collector, 150 sq ft 12075
RV 3009 Rotary Valve Flour, 12 inch valve 8896 *
RV 3019 Rotary Valve Flour, 12 inch valve 8896 *
RV 3039 Rotary Valve Flour, 12 inch valve 8896 *
Rotary Valve Flour, 12 inch valve, air
RV 3029 sparged seals 9188 *
RV 3049 Rotary Valve, 10 inch valve, air sparged seals 8190 *
RV 3059 Rotary Valve, 10 inch valve, air sparged seals 8190 *
RV 3069 Rotary Valve, 10 inch valve, air sparged seals 8190 *
RV 3079 Rotary Valve, 10 inch valve, air sparged seals 8190 *
RV Rotary Valve Flour, 12 inch valve, air sparged
RV 3129 seals, pickup pan 11025 *
Rotary Valve, 10 inch valve, air sparged seals,
RV 3149 pickup pan 10028
Rotary Valve, 10 inch valve, air sparged seals,
RV 3159 pickup pan 10028
HV 3133 12" Maintenance Hand Valve 1638
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CASH PAYMENT SCHEDULE
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SUFFIX TAG Feb Mar April May June May June July Aug Sept Oct
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DL-1165805v10 7
104
PROCESSING
1/21/01
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ORDER #
VENDOR/ DEL BUDGET ACTUAL ORDER # ORDER DEL
SUFFIX TAG DESCRIPTION PO# SCH COST COST COST VAR. VEN/PO DATE SCH
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BL 3160 Transfer Blower Package-Material Transfer 12233
BL 3170 Transfer Blower Package-Material Transfer 12233
HX 3160 Blower Aftercooler - 850 cfm capacity 5670
HX 3170 Blower Aftercooler - 850 cfm capacity 5670
TV 3164 Automatic ball valve 2 inch brass,
air to open 420
TV 3166 Automatic ball valve 2 inch brass,
air to open 420
EQ 3140 Supersack Unloader, with sitter 37590 Bag only 22600
EQ 3150 Supersack Unloader, with sitter 36750 Bag only 00000
XX 3200 Tunnel Divert Valve 5 inch 8100
DV 3201 Tunnel Divert Valve 5 inch 8100
DV 3202 Tunnel Divert Valve 5 inch 8100
DV 3203 Tunnel Divert Valve 5 inch 8100
DV 3204 Tunnel Divert Valve 5 inch 8100
DV 3135 Tunnel Divert Valve 5 inch 8100
V 3205 Divert Valve 4 inch 8100
3301 Two way swing station 4410
V 3102 12" Butterfly Valve with position switch 3255
V 3103 12" Butterfly Valve with position switch 3255
V 3112 12" Butterfly Valve with position switch 3255
V 3113 12" Butterfly Valve with position switch 3255
SV 3105 Air Sparge Tank TK-209 473
PE/PT 3162 Press element and transmitter, air line,
0 to 25 psig 1575
PE/PT 3164 Press element and transmitter, air line,
0 to 25 psig 1575
TE/TT 3164 Temp Element/Temp Transmitter, air,
20 F to 200 F 704
TE/TT 3166 Temp Element/Temp Transmitter, air,
20 F to 200 F 704
LS 3004 Roto-Bin-Dicator top mount with 4 vane
paddle $389
LS 3005 Auto-Bin-Dicator Diaphragm Switch $299
LS 3015 Auto-Bin-Dicator Diaphragm Switch $299
LS 3014 Roto-Bin-Dicator top mount with 4 vane
paddle $389
LS 3024 Roto-Bin-Dicator top mount with 4 vane
paddle $389
LS 3025 Auto-Bin-Dicator Diaphragm Switch $299
LS 3034 Roto-Bin-Dicator top mount with 4 vane
paddle $389
LS 3035 Auto-Bin-Dicator Diaphragm Switch $299
LS 3044 Roto-Bin-Dicator top mount with 4 vane
paddle $389
LS 3055 Auto-Bin-Dicator Diaphragm Switch $299
LS 3064 Roto-Bin-Dicator top mount with 4 vane
paddle $389
LS 3065 Auto-Bin-Dicator Diaphragm Switch $299
LS 3074 Roto-Bin-Dicator top mount with 4 vane
paddle $389
LS 3075 Auto-Bin-Dicator Diaphragm Switch $299
LS 3144 Auto-Bin-Dicator Diaphragm Switch $389
LS 3154 Auto-Bin-Dicator Diaphragm Switch $389
LS 3134 Roto-Bin-Dicator top mount with 4 vane
paddle $389
LS 3124 Roto-Bin-Dicator top mount with 4 vane
paddle $389
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CASH PAYMENT SCHEDULE
------------------------------------------------------------------------------------------------------------
SUFFIX TAG Feb Mar April May June May June July Aug Sept Oct
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DL-1165805v10 8
105
UNLOADING
1/21/01
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ORDER #
VENDOR/ DEL BUDGET ACTUAL ORDER # ORDER DEL
SUFFIX TAG DESCRIPTION PO# SCH COST COST COST VAR. VEN/PO DATE SCH
------------------------------------------------------------------------------------------------------------------------------------
LS 3125 Auto-Bin-Dicator Diaphragm Switch $299
LS 3135 Roto-Bin-Dicator top mount with 4 vane paddle $389
LS 3136 Root-Bin-Dicator top mount with 4 vane paddle $389
TV 3164 Automatic ball valve 2 inch brass, air to open 420
TV 3166 Automatic ball valve 2 inch brass, air to open 420
WE/WT 3101 Load Cells, American Scale 10185
WE/WT 3111 Load Cells, American Scale 10185
Load Cell Calibration 1050
MAJOR INGREDIENT SYSTEM SUBTOTAL 593,891
MCC AND CONTROL PANEL SECOND FLOOR
Process MCC Hardware 118326
Panel Design Layout & Checkout 28500
Control Panel 2nd Floor Hardware 39375
Panel Design Layout & Checkout 12300
Deduct for Sugar MCC and Control Panel -25500
MCC AND CONTROL PANEL SECOND FLOOR SUB 173001
MINOR INGREDIENT SYSTEM
TK 4000 Ingredient Tank, 20 cubic ft. 10426
TK 4010 Ingredient Tank, 20 cubic ft. 10426
TK 4020 Ingredient Tank, 20 cubic ft. 10426
TK 4030 Ingredient Tank, 20 cubic ft. 10426
TK 4040 Ingredient Tank, 20 cubic ft. 10426
TK 4050 Ingredient Tank, 20 cubic ft. 10426
TK 4060 Ingredient Tank, 20 cubic ft. 10426
TK 4070 Ingredient Tank, 20 cubic ft. 10426
TK 4080 Ingredient Tank, 20 cubic ft. 10426
DC 4002 Dust Collector 3000
DC 4012 Dust Collector 3000
DC 4022 Dust Collector 3000
DC 4032 Dust Collector 3000
DC 4042 Dust Collector 3000
DC 4052 Dust Collector 3000
DC 4062 Dust Collector 3000
DC 4072 Dust Collector 3000
DC 4082 Dust Collector 3000
TK 4090 Ingredient Tank, 10 cubic ft 5974
TK 4100 Ingredient Tank, 10 cubic ft 5974
TK 4110 Ingredient Tank, 10 cubic ft 5974
TK 4120 Ingredient Tank, 10 cubic ft 5974
TK 4130 Ingredient Tank, 10 cubic ft 5974
TK 4140 Ingredient Tank, 10 cubic ft 5974
TK 4150 Ingredient Tank, 10 cubic ft 5974
TK 4160 Ingredient Tank, 10 cubic ft 5974
TK 4170 Ingredient Tank, 10 cubic ft 5974 *
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CASH PAYMENT SCHEDULE
------------------------------------------------------------------------------------------------------------
Feb Mar April May June May June July Aug Sept Oct
------------------------------------------------------------------------------------------------------------
DL-1165805v10 9
106
UNLOADING
1/21/01
------------------------------------------------------------------------------------------------------------------------------------
ORDER #
VENDOR/ DEL BUDGET ACTUAL ORDER # ORDER DEL
SUFFIX TAG DESCRIPTION PO# SCH COST COST COST VAR. VEN/PO DATE SCH
------------------------------------------------------------------------------------------------------------------------------------
TK 4180 Ingredient Tank, 10 cubic ft 5974
TK 4190 Ingredient Tank, 10 cubic ft 5974
TK 4310 Small Bin With Butterfly Valve 4000
TK 4320 Small Bin With Butterfly Valve 4000
TK 4330 Small Bin With Butterfly Valve 4000
TK 4340 Small Bin With Butterfly Valve 4000
TK 4350 Small Bin With Butterfly Valve 4000
TK 4360 Small Bin With Butterfly Valve 4000
TK 4370 Small Bin With Butterfly Valve 4000
TK 4380 Small Bin With Butterfly Valve 4000
TK 4390 Small Bin With Butterfly Valve 4000
TK 4400 Small Bin With Butterfly Valve 4000
TK 4100 Small Bin With Butterfly Valve 4000
TK 4200 Ingredient Weigh Tank 10290 *
TK 4220 Ingredient Weigh Tank 10290 *
TK 4210 Ingredient Charge Tank 10290 *
TK 4230 Ingredient Charge Tank 10290
V 4204 10" Butterfly Valve with position switch 2888
V 4203 10" Butterfly Valve with position switch 2888
V 4220 10" Butterfly Valve with position switch 2888
V 4230 10" Butterfly Valve with position switch 2888
EQ 4250 Bag Dump, with sifter 19635
EQ 4241 Area Dust Collector 19133
EQ 4300 Supersack Unloader, with sifter 37590 BAG ONLY 22500
EQ 4310 Supersack Unloader, with sifter 37590 BAG ONLY 22500
EQ 4320 Supersack Unloader, with sifter 37590 BAG ONLY 22500
EQ 4330 Supersack Unloader, with sifter 37590 BAG ONLY 22500
EQ 4340 Supersack Unloader, with sifter 37590 BAG ONLY 22500
RV 4009 Rotary Valve, 8 inch valve 4914
RV 4019 Rotary Valve, 8 inch valve 4914
RV 4029 Rotary Valve, 8 inch valve 4914
RV 4039 Rotary Valve, 8 inch valve 4914
RV 4049 Rotary Valve, 8 inch valve 4914
RV 4059 Rotary Valve, 8 inch valve 4914
RV 4069 Rotary Valve, 8 inch valve 4914
RV 4079 Rotary Valve, 8 inch valve 4914
RV 4089 Rotary Valve, 8 inch valve 4914
RV 4099 Rotary Valve, 6 inch valve 3675
RV 4109 Rotary Valve, 6 inch valve 3675
RV 4119 Rotary Valve, 6 inch valve 3675
RV 4129 Rotary Valve, 6 inch valve 3675
RV 4139 Rotary Valve, 6 inch valve 3675
RV 4149 Rotary Valve, 6 inch valve 3675 *
RV 4159 Rotary Valve, 6 inch valve 3675 *
RV 4169 Rotary Valve, 6 inch valve 3675 *
RV 4179 Rotary Valve, 6 inch valve 3675
RV 4189 Rotary Valve, 6 inch valve 3675
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CASH PAYMENT SCHEDULE
------------------------------------------------------------------------------------------------------------
SUFFIX TAG Feb Mar April May June May June July Aug Sept Oct
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TK 4180
TK 4190
TK 4310
TK 4320
TK 4330
TK 4340
TK 4350
TK 4360
TK 4370
TK 4380
TK 4390
TK 4400
TK 4100
TK 4200
TK 4220
TK 4210
TK 4230
X 0000
X 0000
X 0000
X 4230
EQ 4250
EQ 4241
EQ 4300
EQ 4310
EQ 4320
EQ 4330
EQ 4340
RV 4009
RV 4019
RV 4029
RV 4039
RV 4049
RV 4059
RV 4069
RV 4079
RV 4089
RV 4099
RV 4109
RV 4119
RV 4129
RV 4139
RV 4149
RV 4159
RV 4169
RV 4179
RV 4189
DL -1165805v10 10
107
PROCESSING
1/21/01
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ORDER #
VENDOR/ DEL BUDGET ACTUAL ORDER # ORDER DEL
SUFFIX TAG DESCRIPTION PO# SCH COST COST COST VAR. VEN/PO DATE SCH
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RV 4199 Rotary Valve, 6 inch valve 3675
Rotary Valve, 8 inch valve,
air sparged seals,
RV 4219 pickup pan 10185
Rotary Valve, 8 inch valve,
RV 4239 air sparged seals 10185
Rotary Valve, 10 inch valve,
RV 4309 air sparged seals 10185
Rotary Valve, 10 inch valve,
RV 4319 air sparged seals 10185
Rotary Valve, 10 inch valve,
RV 4329 air sparged seals 10185
Rotary Valve, 10 inch valve,
RV 4339 air sparged seals 10185
Rotary Valve, 10 inch valve,
RV 4349 air sparged seals 10185
Transfer Blower Package-Material
BL 4260 Transfer 12233
Transfer Blower Package-Material
BL 4270 Transfer 12233
Transfer Blower Package-Material
BL 4280 Transfer 12233
HX 4260 Blower Aftercooler - 450 cfm capacity 5670
HX 4270 Blower Aftercooler - 450 cfm capacity 5670
HX 4280 Blower Aftercooler - 450 cfm capacity 5670
V 4370 Hose Station 5775
V 0000 Xxxxx Xxx Valve 6930
V 4360 Two Way Valve 4410
Automatic ball valve 2 inch brass,
TV 4265 air to open 420
Automatic ball valve 2 inch brass,
TV 4275 air to open 420
Automatic ball valve 2 inch brass,
TV 4285 air to open 420
Press element and transmitter,
PE/PT 4262 air line, 0 to 25 psig 1575
Press element and transmitter,
PE/PT 4272 air line, 0 to 25 psig 1575
Press element and transmitter,
PE/PT 4282 air line, 0 to 25 psig 1575
Temp Element/Temp Transmitter,
TE/TT 4265 air, 20 F to 200 F 704
Temp Element/Temp Transmitter,
TE/TT 4275 air, 20 F to 200 F 704
Temp Element/Temp Transmitter,
TE/TT 4285 air, 20 F to 200 F 704
LS 4005 Auto-Bin-Dicator Diaphragm Switch $299
Roto-Bin-Dicator top mount with 4
LS 4004 vane paddle $389
LS 4015 Auto-Bin-Dicator Diaphragm Switch $299
Roto-Bin-Dicator top mount with
LS 4014 4 vane paddle $389
Roto-Bin-Dicator top mount with
LS 4024 4 vane paddle $389
Roto-Bin-Dicator top mount with
LS 4034 4 vane paddle $389
Roto-Bin-Dicator top mount with
LS 4044 4 vane paddle $389
Roto-Bin-Dicator top mount with
LS 4054 4 vane paddle $389
LS 4025 Auto-Bin-Dicator Diaphragm Switch $299
LS 4035 Auto-Bin-Dicator Diaphragm Switch $299
Roto-Bin-Dicator top mount with
LS 4064 4 vane paddle $389
LS 4045 Auto-Bin-Dicator Diaphragm Switch $299
Roto-Bin-Dicator top mount with
LS 4074 4 vane paddle $389
LS 4055 Auto-Bin-Dicator Diaphragm Switch $299
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CASH PAYMENT SCHEDULE
------------------------------------------------------------------------------------------------------------
SUFFIX TAG Feb Mar April May June May June July Aug Sept Oct
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DL-1165805v10 11
108
PROCESSING
1/21/01
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ORDER #
VENDOR/ DEL BUDGET ACTUAL ORDER # ORDER DEL
SUFFIX TAG DESCRIPTION PO# SCH COST COST COST VAR. VEN/PO DATE SCH
------------------------------------------------------------------------------------------------------------------------------------
LS 4084 Roto-Bin Dicator top mount with 4 vane paddle $389
LS 4065 Auto-Bin-Dicator Diaphragm Switch $299
LS 6066 Roto-Bin-Dicator top mount with 4 vane paddle $389
LS 4075 Auto-Bin-Dicator Diaphragm Switch $299
LS 4276 Roto-Bin-Dicator top mount with 4 vane paddle $389
XS 4085 Auto-Bin-Dicator Diaphragm Switch $299
XS 4086 Roto-Bin-Dicator top mount with 4 vane paddle $389
XS 4095 Auto-Bin-Dicator Diaphragm Switch $299
XS 4105 Auto-Bin Dicator Diaphragm Switch $299
XS 4115 Auto-Bin Dicator Diaphragm Switch $299
XS 4125 Auto-Bin Dicator Diaphragm Switch $299
XS 4126 Roto-Bin-Dicator top mount with 4 vane paddle $389
XS 4135 Auto-Bin-Dicator Diaphragm Switch $299
XS 4136 Roto-Bin-Dicator top mount with 4 vane paddle $389
XS 4145 Auto-Bin Dicator Diaphragm Switch $299
XS 4155 Auto-Bin Dicator Diaphragm Switch $299
XS 4165 Auto-Bin Dicator Diaphragm Switch $299
XS 4175 Auto-Bin Dicator Diaphragm Switch $299
XS 4185 Auto-Bin Dicator Diaphragm Switch $299
XS 4195 Auto-Bin Dicator Diaphragm Switch $299
XS 4214 Auto-Bin Dicator Diaphragm Switch $299
XS 4234 Auto-Bin Dicator Diaphragm Switch $299
XS 4304 Auto-Bin Dicator Diaphragm Switch $299
XS 4314 Auto-Bin Dicator Diaphragm Switch $299
XS 4324 Auto-Bin Dicator Diaphragm Switch
XS 4334 Auto-Bin Dicator Diaphragm Switch
XS 4344 Auto-Bin Dicator Diaphragm Switch
TV 4265 Automatic ball valve 2 inch brass, air to open 420
TV 4275 Automatic ball valve 2 inch brass, air to open 420
TV 4285 Automatic ball valve 2 inch brass, air to open 420
WE/WT 4201 Load Cells, American Scale 10185
WE/WT 4201 Load Cells, American Scale 10185
Load Cell Calibration 1050
MINOR INGREDIENT SUBTOTAL 780149
CONTROL ROOM MICROSTATION/CONTROL
PANEL
4 Wonderware Statins 84000
CONTROL ROOM MICROSTATION/CONTROL
PANEL SUBTOTAL 84000
OIL STORAGE AND HANDLING
P 5230 80 gpm Stainless PD Pump - 15 hp 9975
P 5240 80 gpm Stainless PD Pump - 15 hp 9975
P 5170 5 gpm Stainless PD Pump - 3 hp 4410 4410
P 5120 20 gpm Stainless PD Pump - 3 hp 7140
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CASH PAYMENT SCHEDULE
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SUFFIX TAG Feb Mar April May June May June July Aug Sept Oct
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12
QL -- DL - 1165805v10
109
PROCESSING
1/21/01
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ORDER #
VENDOR/ DEL BUDGET ACTUAL ORDER # ORDER DEL
SUFFIX TAG DESCRIPTION PO# SCH COST COST COST VAR. VEN/PO DATE SCH
------------------------------------------------------------------------------------------------------------------------------------
P 5130 20 gpm Stainless PD Pump - 3 hp 7140
P 5140 20 gpm Stainless PD Pump - 3 hp 7140
P 5150 50 gpm Stainless PD Pump - 10 hp 9240 9240
TK 5000 7500 gal EP EP Processor, 304 SS, Jadcketed 33300
TK 5020 7500 gal EP EP Processor, 304 SS, Jadcketed 33300
TK 5040 7500 gal EP EP Processor, 304 SS, Jadcketed 33300
TK 5060 7500 gal EP EP Processor, 304 SS, Jadcketed 33300
TK 5080 7500 gal EP EP Processor, 304 SS, Jadcketed 33300
TK 5100 7500 gal EP EP Processor, 304 SS, Jadcketed 33300
TK 5160 500 gallon tank with mixer 9600 9600
AG 5000 Agitator 4500
AG 5020 Agitator 4500
AG 5040 Agitator 4500
AG 5060 Agitator 4500
AG 5080 Agitator 4500
AG 5100 Agitator 4500
AG 5160 Agitator 3000 3000
HX 5180 90 sq ft exchanger - Oil Heater 4725 4725
Hot Water Set 12500 DEDUCT 0000
XX 0000 Mag Meter - 1" 2940 2940
FM 5173 Mag Meter - 2" 3570 3570
M 5184 Static Mixer 2363 2363
STR 5131 Strainer, 3" stainless 683
STR 5141 Strainer, 3" stainless 683
CV 5233 Check Valve, 3" Stainless 714
CV 5243 Check Valve, 3" Stainless 714
HV 5234 2" Butterfly valves 231
HV 5244 2" Butterfly valves 231
HV 5011 1" Ball Valves - SS 189
HV 5031 1" Ball Valves - SS 189
HV 5051 1" Ball Valves - SS 189
HV 5071 1" Ball Valves - SS 189
HV 5091 1" Ball Valves - SS 189
HV 5111 1" Ball Valves - SS 189
2" ball valve, brass with stainless ball and TEFE
HV 5014 seat 184
2" ball valve, brass with stainless ball and TEFE
HV 5034 seat 184
2" ball valve, brass with stainless ball and TEFE
HV 5064 seat 184
2" ball valve, brass with stainless ball and TEFE
HV 5075 seat 184
2" ball valve, brass with stainless ball and TEFE
HV 5095 seat 184
2" ball valve, brass with stainless ball and TEFE
HV 5114 seat 184
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CASH PAYMENT SCHEDULE
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P 5130
P 5140
P 5150
TK 5000
TK 5020
TK 5040
TK 5060
TK 5080
TK 5100
TK 5160
AG 5000
AG 5020
AG 5040
AG 5060
AG 5080
AG 5100
AG 5160
HX 0000
XX 0000
XX 5173
X 0000
XXX 0000
XXX 5141
CV 5233
CV 5243
HV 5234
HV 5244
HV 5011
HV 5031
HV 5051
HV 5071
HV 5091
HV 5111
HV 5014
HV 5034
HV 5064
HV 5075
HV 5095
HV 5114
DL-1165805V10 13
110
PROCESSING
1/21/01
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ORDER #
VENDOR/ DEL BUDGET ACTUAL ORDER # ORDER DEL
SUFFIX TAG DESCRIPTION PO# SCH COST COST COST VAR. VEN/PO DATE SCH
------------------------------------------------------------------------------------------------------------------------------------
5181 2" ball valve, brass with stainless ball
HV and TEFE seat 184
5182 2" ball valve, brass with stainless ball
HV and TEFE seat 184
5183 2" ball valve, brass with stainless ball
HV and TEFE seat
5184 2" ball valve, brass with stainless ball
HV and TEFE seat
HV 5172 1/2" Ball Valve - SS 126
HV 5235 1/2" Ball Valve - SS 126
HV 5236 1/2" Ball Valve - SS 126
HV 5142 1/2" Ball Valve - SS 126
HV 5151 1/2" Ball Valve - SS 126
HV 5122 1/2" Ball Valve - SS 126
HV 5131 1/2" Ball Valve - SS 126
PRV 5012 1/2" Press Reducing Valve Brass 231
PRV 5032 1/2" Press Reducing Valve Brass 231
PRV 5052 1/2" Press Reducing Valve Brass 231
PRV 5072 1/2" Press Reducing Valve Brass 231
PRV 5092 1/2" Press Reducing Valve Brass 231
PRV 5112 1/2" Press Reducing Valve Brass 231
PRV 5074 2" Press Reducing Valve Brass
CV 5013 Conservation Vent 473
CV 5033 Conservation Vent 473
CV 5053 Conservation Vent 473
CV 5073 Conservation Vent 473
CV 5093 Conservation Vent 473
CV 5113 Conservation Vent 473 *
PI 5242 Pressure Gauge 0-150 psi, 3 inch dial, stainless 315 *
PI 5242 Pressure Gauge 0-150 psi, 3 inch dial, stainless 315
PI 5141 Pressure Gauge 0-150 psi, 3 inch dial, stainless 315
PI 5152 Pressure Gauge 0-150 psi, 3 inch dial, stainless 315 *
PI 5121 Pressure Gauge 0-150 psi, 3 inch dial, stainless 315
PI 5171 Pressure Gauge 0-150 psi, 3 inch dial, stainless
PI 5132 Pressure Gauge 0-150 psi, 3 inch dial, stainless
LE/LT 5007 Level element and transmitter, 0 to 12 ft H20 3,675
LE/LT 5027 Level element and transmitter, 0 to 12 ft H20 3,675
LE/LT 5047 Level element and transmitter, 0 to 12 ft H20 3,675
LE/LT 5067 Level element and transmitter, 0 to 12 ft H20 3,675
LE/LT 5087 Level element and transmitter, 0 to 12 ft H20 3,675
LE/LT 5117 Level element and transmitter, 0 to 12 ft H20 3,675 3,675
LE/LT 5167 Level element and transmitter, 0 to 12 ft H20 3,675 3,675
5006 Temp Element/Temp Transmitter, liquid with
TE/TT the xxxxxx, 20 F to 200 F 704
5026 Temp Element/Temp Transmitter, liquid with
TE/TT the xxxxxx, 20 F to 200 F 704
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DL - 1165805V10 14
111
PROCESSING
1/21/01
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ORDER #
VENDOR/ DEL BUDGET ACTUAL ORDER # ORDER DEL
SUFFIX TAG DESCRIPTION PO# SCH COST COST COST VAR. VEN/PO DATE SCH
------------------------------------------------------------------------------------------------------------------------------------
TE/TT 5046 Temp Element/Temp Transmitter, liquid with
thermowell, 20 F to 200 F 704
TE/TT 5066 Temp Element/Temp Transmitter, liquid with
thermowell, 20 F to 200 F 704
TE/TT 5085 Temp Element/Temp Transmitter, liquid with
thermowell, 20 F to 200 F 704
TE/TT 5106 Temp Element/Temp Transmitter, liquid with
thermowell, 20 F to 200 F 704
TE/TT 5182 Temp Element/Temp Transmitter, liquid with
thermowell, 20 F to 200 F 704
TE/TT 5166 Temp Element/Temp Transmitter, liquid with
thermowell, 20 F to 200 F 703.5
HV 3" SS Butterfly valve Manual 683 *
HV 3" SS Butterfly valve Manual 683 *
NV/NY 5009 2" SS Ball valve with actuator, air to open
with solenoid 683 *
NV/NY 5029 2" SS Ball valve with actuator, air to open
with solenoid 683
NV/NY 5049 2" SS Ball valve with actuator, air to open
with solenoid 683
NV/NY 5069 2" SS Ball valve with actuator, air to open
with solenoid 683
NV/NY 5089 2" SS Ball valve with actuator, air to open
with solenoid 683
NV/NY 5109 2" SS Ball valve with actuator, air to open
with solenoid 683
NV/NY 5068 2" SS Ball valve with actuator, air to open
with solenoid 683
NV/NY 5088 2" SS Three-way valve with actuator, spring
return 1439
NV/NY 5108 2" SS Ball valve with actuator, air to open
with solenoid 664
NV/NY 5188 2" SS Ball valve with actuator, air to open
with solenoid 664
NV/NY 5001 2" SS Ball valve with actuator, air to open
with solenoid 664
NV/NY 5021 2" SS Ball valve with actuator, air to open
with solenoid 664
NV/NY 5022 2" SS Ball valve with actuator, air to open
with solenoid 664
NV/NY 5002 2" SS Ball valve with actuator, air to open
with solenoid 664
NV/NY 5167 2" SS Ball valve with actuator, air to open
with solenoid 664
TV/TY 5185 2" SS Ball valve with actuator, air to open
with solenoid 664
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DL1165805v10 15
112
PROCESSING
1/21/01
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ORDER #
VENDOR/ DEL BUDGET ACTUAL ORDER # ORDER DEL
SUFFIX TAG DESCRIPTION PO# SCH COST COST COST VAR. VEN/PO DATE SCH
------------------------------------------------------------------------------------------------------------------------------------
2" SS Ball valve with actuator, air to open with
TV/TY 5186 solenoid
1.5" SS Ball valve with actuator, air to open with
NV/NY 5023 solenoid
1.5" SS Ball valve with actuator, air to open with
NV/NY 5023 solenoid
1" SS Ball valve with actuator, air to open with
NV/NY 5169 solenoid
TV 5006 Automatic ball valve 2 inch brass, air to open 420
TV 5026 Automatic ball valve 2 inch brass, air to open 420
TV 5046 Automatic ball valve 2 inch brass, air to open 420
TV 5066 Automatic ball valve 2 inch brass, air to open 420
TV 5086 Automatic ball valve 2 inch brass, air to open 420
TV 5106 Automatic ball valve 2 inch brass, air to open 420
TV 5613 Automatic ball valve 2 inch brass, air to open 420
TV 5182 Automatic ball valve 2 inch brass, air to open 420
Oil Storage and Handling Subtotal 380660
Deduct for Oil ulsification System
OIL STORAGE AND HANDLING SUBTOTAL 329718
BATCH MIXING
Ribbon Blender, 86 cubic ft, with bottom valve,
EQ 6000 xxxxxxx opening 51030
Ribbon Blender, 86 cubic ft, with bottom valve,
EQ 6010 xxxxxxx opening 51030
Ribbon Blender, 86 cubic ft, with bottom valve,
EQ 6020 xxxxxxx opening 00000
XX 6330 CO2 Injection System, xxxxxxxxx 00000
XX 6331 CO2 Injection System, allowance 11025
CO2 for blenders 39375
START UP 8400
DV 6332 Tunnel Divert Valve 4 inch with switches 8100
DV 6333 Tunnel Divert Valve 4 inch with switches 8100
DV 6334 Tunnel Divert Valve 4 inch with switches 8100
DV 6335 Tunnel Divert Valve 4 inch with switches 8100
TK 6010 Majors Charge Tank 9240
TK 6110 Majors Charge Tank 9240
TK 6210 Majors Charge Tank 9240
TK 6030 Majors Charge Tank 9240
TK 6130 Majors Charge Tank 9240
TK 6230 Majors Charge Tank 9240
DC 6022 CO2 Vent Dust Collector, 80 sq ft 7081
DC 6122 CO2 Vent Dust Collector, 80 sq ft 7081
DC 6122 CO2 Vent Dust Collector, 80 sq ft 7081
F 6023 Collector Fan 3000
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CASH PAYMENT SCHEDULE
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DL-1165805v10 16
113
PROCESSING
1/21/01
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ORDER #
VENDOR/ DEL BUDGET ACTUAL ORDER # ORDER DEL
SUFFIX TAG DESCRIPTION PO# SCH COST COST COST VAR. VEN/PO DATE SCH
------------------------------------------------------------------------------------------------------------------------------------
F 6123 Collector Fan 3000
F 6223 Collector Fan 3000
DC 6032 Dust Collector, 120 sq. ft 12075
DC 6012 Dust Collector, 100 sq. ft 11550
DC 6132 Dust Collector, 120 sq. ft 12075
DC 6122 Dust Collector, 100 sq. ft 11550
DC 6232 Dust Collector, 120 sq. ft 12075
DC 6222 Dust Collector, 100 sq. ft 11550
V 6019 Butterfly Valve, 12 inch 3623
V 6119 Butterfly Valve, 12 inch 3623 *
V 6229 Butterfly Valve, 12 inch 3623 *
V 6239 Butterfly Valve, 12 inch 3623 *
V 6249 Butterfly Valve, 12 inch 3623
V 6259 Butterfly Valve, 12 inch 3623
V 6039 Butterfly Valve, 16 inch 4410
V 6139 Butterfly Valve, 16 inch 4410 *
V 6239 Butterfly Valve, 16 inch 4410 *
EQ 6300 Final Blend Vessel 129750 *
0000 Xxxxx Vessel Vent Collector 1500
GR 6310 Entoleter * 29131 *
DC 6320 Filler Dust Collector 15133 *
LB 6328 Live Bottom for EQ 6320 4000
Rotary Valve Flour, 10 inch valve,
RV 6329 air sparged seals 0000
XX 0000 Mag Meter - 1" 2940
Temp Element/Temp Transmitter,
air, 20F to 200
TE/TT 6006 F 704
Temp Element/Temp Transmitter,
air, 20F to 200
TE/TT 6106 F 704
Temp Element/Temp Transmitter,
air, 20F to 200
TE/TT 6206 F 704
Temp Element/Temp Transmitter,
air, 20F to 200
TE/TT 6340 F 704
Temp Element/Temp Transmitter,
air, 20F to 200
TE/TT 6341 F
HV 6356 1/2" Ball Valve - SS 126
RV 6352 12" Relief Valve 210
LS 6324 Roto-Bin-Dicator top mount
with 4 vane paddle $389
LS 6014 Auto-Bin-Dicator Diaphragm Switch $299
LS 6034 Auto-Bin-Dicator Diaphragm Switch $299
LS 6114 Auto-Bin-Dicator Diaphragm Switch $299
LS 6134 Auto-Bin-Dicator Diaphragm Switch $299
LS 6214 Auto-Bin-Dicator Diaphragm Switch $299
LS 6234 Auto-Bin-Dicator Diaphragm Switch $299
LS 6004 Auto-Bin-Dicator Diaphragm Switch $299
LS 6104 Auto-Bin-Dicator Diaphragm Switch $299
LS 6204 Auto-Bin-Dicator Diaphragm Switch $299
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CASH PAYMENT SCHEDULE
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SUFFIX TAG Feb Mar April May June May June July Aug Sept Oct
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DL-1165805v10 17
114
PROCESSING
1/21/01
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ORDER #
VENDOR/ DEL BUDGET ACTUAL ORDER # ORDER DEL
SUFFIX TAG DESCRIPTION PO# SCH COST COST COST VAR. VEN/PO DATE SCH
------------------------------------------------------------------------------------------------------------------------------------
LS 6307 Auto-Bin-Dicator Diaphragm Switch $299
LS 6308 Auto-Bin-Dicator Diaphragm Switch $299
LS 6306 Roto-Bin-Dicator top mount with 4 vane
paddle $299
TV/TY 1672 Temperature valves for cryogenic service 12180
TV/TY 1673 Temperature valves for cryogenic service 12180
TV/TY 1679 Temperature valves for cryogenic service 12180
FV/FY 6340 1" SS Ball valve with actuator, air to open
with solenoid 420 *
FV/FY 6341 1" SS Ball valve with actuator, air to open
with solenoid 420 *
FV/FY 6006 1" SS Ball valve with actuator, air to open
with solenoid 420 *
FV/FY 6106 1" SS Ball valve with actuator, air to open
with solenoid 420
FV/FY 6206 1" SS Ball valve with actuator, air to open
with solenoid 420
HV 6350 1" SS Ball valve 420
PRV 6351 Pressure Reducing Valve 1 inch - Supplied
by BOC
BATCH MIXING SUBTOTAL 682136
PROCESSING SUBTOTAL 2967336
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CASH PAYMENT SCHEDULE
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SUFFIX TAG Feb Mar April May June May June July Aug Sept Oct
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DL-1165805V10 18
115
INGREDIENT PACKAGING
1/21/01
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ORDER #
DESCRIPTION VENDOR/ DEL BUDGET ACTUAL ORDER # ORDER DEL
SUFFIX TAG PRODUCT PACKAGING PO# SCH COST COST COST VAR. VEN/PO DATE SCH
------------------------------------------------------------------------------------------------------------------------------------
BL 7000 Blower Package-Air Supply 12233
BL Blower Package-Air Supply 12233
HX 7000 Blower Aftercooler - 450 cfm capacity 5670
Blower Aftercooler - 450 cfm capacity 5670
Charging Bin - Bulk Bin Filler 20475
TK 7022 Charging Bin - Bag Filler 26800
DC TBD Collector for TK 7022
EQ 7024 Bag Filler with 3 fillers and auto bag
packer 383250
MAG 7030 Metal Detector 17769
MAG 7021 Drawer Magnet 9135
EQ 7029 Bag Alignment 23100
EQ 7031 Check Weigher 20244
EQ 7032 Bag Coder 16485
EQ 7033 Bag Labeller 16275
EQ 7034 Palletizer with Slipsheet Dispenser 177975
CV 7040 Conveyor, 15 ft length average, bag 7980
CV 7041 Conveyor, 15 ft length average, bag 7980
CV 7042 Conveyor, 15 ft length average, bag 7980
CV 7043 Conveyor, 15 ft length average, bag 7980
CV 7044 Conveyor, 15 ft length average, bag 7140
CV 7044 Conveyor, 15 ft length average, bag 7140
TV 7005 Automatic ball valve 2 inch brass,
air to open 420
Automatic ball valve 2 inch brass,
air to open 420
PE/PT 7004 Press element and transmitter, air line,
0 to 25 psig 1575
TE/TT 7005 Temp Element/Temp Transmitter, air, 20 F to
200 F 704
TE/TT Temp Element/Temp Transmitter, air, 20 F to
200 F 704
LS TBD Roto-Bin-Dicator top mount with 4 vane
paddle 546
SI 501 Screw Feeder, 10 inch, 10 ft long 7140
EQ 506 Supersack Filler with weigh system 99225
MAG 517 Metal Detector 15330
LS TBD Auto-Bin-Dicator Diaphragm Switch 546
LS TBD Auto-Bin-Dicator Diaphragm Switch 546
LS TBD Auto-Bin-Dicator Diaphragm Switch 546
LS TBD Auto-Bin-Dicator Diaphragm Switch 546
LS RF8H2G1N Bindicator Radio-Frequency Level
Indicator 546
LS RF8H2G1N Bindicator Radio-Frequency Level
Indicator 546
EQ 511 Check Weigher 20475
EQ 512 Bag Cooler 16485
EQ 513 Bag Labeller 16275
CV 529 Conveyor, 15 ft length average, supersack 12180
CV 530 Conveyor, 15 ft length average, supersack 12180
CV 531 Conveyor, 15 ft length average, supersack 12180
CV 532 Conveyor, 15 ft length average, supersack 12180
CV 533 Conveyor, 15 ft length average, supersack 12180
CV 534 Conveyor, 15 ft length average, supersack 12180
CV 535 Conveyor, 15 ft length average, supersack 12180
CV Startup 9500
PRODUCT PACKAGING SUBTOTAL 759501 DEDUCT 299114 BULK BAG
SUBTOTAL 759501
PACKAGING MICROSTATION & CONTROL PANEL
SUBTOTAL 83000
QUALITY ASSURANCE MICROSTATION 28000
SUBTOTAL PACKAGING 870501
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CASH PAYMENT SCHEDULE
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SUFFIX TAG Feb Mar April May June May June July Aug Sept Oct
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DL-1165805v10 19
116
INGREDIENT PACKAGING
1/21/01
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ORDER #
VENDOR/ DEL BUDGET ACTUAL ORDER DEL
SUFFIX TAG DESCRIPTION PO# SCH COST COST COST VAR. DATE SCH
-----------------------------------------------------------------------------------------------------------------------------
PRODUCT PACKAGING
*
*
*
SUBTOTAL PACKAGING 1170615
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CASH PAYMENT SCHEDULE
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SUFFIX TAG Feb Mar April May June May June July Aug Sept Oct
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DL-1168505V10 20
117
BULK SUGAR
1/21/01
------------------------------------------------------------------------------------------------------------------------------------
ORDER #
VENDOR/ DEL BUDGET ACTUAL ORDER # ORDER DEL
SUFFIX TAG DESCRIPTION PO# SCH COST COST COST VAR. VEN/PO DATE SCH
------------------------------------------------------------------------------------------------------------------------------------
Sugar Slo 14 ft diameter,
TK 8100 215,000 pounds capacity 49279
Sugar Slo 14 ft diameter,
TK 8112 215,000 pounds capacity 49279
TK 8180 6X Sugar Use Bin 19530
6X Sugar Use Bin Dust Collector,
DC 8182 with panel 22830
8181 Dust Collector Fan 3000
EQ 8150 Entoleter Mill Series 30 98175
EQ 8108 Sugar Delumper 5880
EQ 8108 Sugar Delumper 5880
MS 8107 Sugar Silo live bottom 15278
MS 8117 Sugar Silo live bottom 15278
DC 8102 Silo Dust Collector 16450
DC 8112 Silo Dust Collector 16450
F 8101 Dust Collector Fan 2500
F 8112 Dust Collector Fan 2500
XV 8107 12" Butterfly Valve 3759
XV 8117 12" Butterfly Valve 3759
Great Western Sitter, Model 611
SI 8120 with outlet stubs and guards 44000
DC TBD Dust Collector, 300 sq ft 14385
BL 8000 Air Slide Blower 7140
V 8130 6" Product Divert 8400
V 8140 6" Product Divert 8400
V 8150 6" Product Divert 8400
BL 8020 Vacuum Blower 30120
BL 8040 Transfer Blower, Rail Car Unloading 31973
Transfer Blower Package-Truck
BL 8050 Unloading 13188
Transfer Blower Package-Material
BL Transfer 12233
E 8010 Rail Car Unloader * 13230
Blower Aftercooler - 1500 cfm
HX 8040 capacity 8190
Blower Aftercooler - 1500 cfm
HX 8050 capacity 8190
V 8160 Manual Hose Divert 12500
V Manual Hose Divert 12500
Rotary Valve, 12 inch valve, purged
RV 8109 with pick-up pan and airlock xxxxxx 12485
Rotary Valve, 12 inch valve, purged
RV 8119 with pick-up pan and airlock xxxxxx 12485
Rotary Valve, 12 inch valve, purged
RV 8039 with pick-up pan and airlock xxxxxx 15500
Rotary Valve, 12 inch valve, purged
RV 8189 with pick-up pan and airlock xxxxxx
XX TBD Solenoid Air Spargers for silos 588
Press element and transmitter, air
PE/PT 8003 line, 0 to 25 psig 1575
Press element and transmitter, air
PE/PT 8043 line, 0 to 25 psig 1575
Press element and transmitter, air
PE/PT 8053 line, 0 to 25 psig 1575
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DL-116805v10 21
118
BULK SUGAR
1/21/01
------------------------------------------------------------------------------------------------------------------------------------
ORDER #
VENDOR/ DEL BUDGET ACTUAL ORDER # ORDER DEL
SUFFIX TAG DESCRIPTION PO# SCH COST COST COST VAR. VEN/PO DATE SCH
------------------------------------------------------------------------------------------------------------------------------------
PE/PT 8023 Press/Vac element and
transmitter, air line, 0 to
25 psig 1575
TE/TT 8045 Temp Element/Temp Transmitter,
air, 20 F to 200 F 704
TE/TT 8055 Temp Element/Temp Transmitter,
air, 20 F to 200 F 704
TE/TT TBD Temp Element/Temp Transmitter,
air, 20 F to 200 F 704
TE/TT Temp Element/Temp Transmitter,
air, 20 F to 200 F 704
LE/LT 8103 Level Element - Silo 4,034
LE/LT 8113 Level Element - Silo 4,034
LS 8105 Auto - Bin - Dicator Diaphragm Switch $299
LS 8104 Roto - Bin - Dicator top mount with 4 vane
paddle $389
LS 8114 Auto - Bin - Dicator Diaphragm Switch $299
LS 8034 Roto - Bin - Dicator top mount with 4 vane
paddle $389
LS Auto - Bin - Dicator Diaphragm Switch $299
LS Roto - Bin - Dicator top mount with 4 vane
paddle $389
LS Auto - Bin - Dicator Diaphragm Switch $299
LS Roto - Bin - Dicator top mount with 4 vane
paddle $389
FS TBD Flow Switch 1470
FS Flow Switch 1470
XS 8101 Broken Bag Detector 2048
XS 8111 Broken Bag Detector 2048
TV 8045 Automatic ball valve 2 inch brass, air to
open 420
TV 8055 Automatic ball valve 2 inch brass, air to
open 420
Startup 14700
BULK SUGAR SUBTOTAL 637844
SUGAR PACKAGING
BL 701 Blower Package - Air Supply 12233
HX 702 Blower Aftercooler - 850 cfm capacity 5670
TK 704 Charging Bin - Bag Filler 17640
EQ 505 BAG FILLER - HAVER - 3 SPOUT 384825
MAG 516 Metal Detector 17769
MAG 703 Drawer Magnet 9135
EQ 706 Bag Alignment 23100
EQ 707 Check Weigher 20244
EQ 708 Bag Coder 16485
EQ 710 Bag Labeller 16275
EQ 711 Palletizer with Slipsheet Dispenser 177975
CV 712 Conveyor, 15 ft length average, bag 7980
CV 713 Conveyor, 15 ft length average, bag 7980
CV 714 Conveyor, 15 ft length average, bag 7980
CV 715 Conveyor, 15 ft length average, bag 7980
CV 717 Conveyor, 15 ft length average, pallet 14280
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CASH PAYMENT SCHEDULE
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DL-1165805v10 22
119
BULK SUGAR
1/21/01
------------------------------------------------------------------------------------------------------------------------------------
ORDER #
VENDOR/ DEL BUDGET ACTUAL ORDER # ORDER DEL
SUFFIX TAG DESCRIPTION PO# SCH COST COST COST VAR. VEN/PO DATE SCH
------------------------------------------------------------------------------------------------------------------------------------
Automatic ball valve 2 inch brass, air
TV 1905 to open 420
Press element and transmitter, air line,
PE/PT 1902 0 to 25 psig 840
Temp Element/Temp Transmitter, air, 20F
TE/TT 1905 to 200 F 1523
RF8H2G1N Bindicator Radio - Frequency
LS 1930 Xxxxx Xxxxxxxxx 000
Xxxxxxx 00000
SUGAR PACKAGING SUBTOTAL 761380
PROGRAMMING SUGAR SYSTEM SUBTOTAL 24000
SUBTOTAL SUGAR 785380
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CASH PAYMENT SCHEDULE
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SUFFIX TAG Feb Mar April May June May June July Aug Sept Oct
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TV 1905
PE/PT 1902
TE/TT 2905
LS 1930
DL-1165805V10 23
120
SUGAR SYSTEM 1/21/01
KRISPY KREME NEW PLANT -- 3 MM SINGLE LINE 22-Jan-01
Bulk Sugar -- 2 Silo option -- breakout for spout filler
Supersack Unloading of Ingredients
Oil Emulsification systek Included
INGREDIENT MANUFACTURING EQUIPMENT COST
FLOUR UNLOADING AND STORAGE $1,142,404
INGREDIENT UNLOADING AND STORAGE $ 799,499
INGREDIENT MICROSTATION $ 28,000
UNLOADING MCC & CONTROL PANEL $ 84,780
SUBTOTAL UNLOADING $2,054,683
BLOWER MCC AND PANEL $ 248,000
MAJOR INGREDIENT SYSTEM $ 488,261
MCC AND CONTROL, PANEL SECOND FLOOR $ 173,001
MINOR INGREDIENT SYSTEM $ 780,149
CONTROL ROOM MICROSTATION AND CONTROL PANEL $ 84,000
OIL STORAGE AND HANDLING $ 329,717
BATCH MIXING $ 682,135
SUBTOTAL PROCESSING $2,785,263
PRODUCT PACKAGING $ 759,501
PACKAGING MICROSTATION AND CONTROL PANEL $ 83,000
QUALITY ASSURANCE MICROSTATION $ 28,000
SUBTOTAL PACKAGING $ 870,501
PROJECT MANAGEMENT $ 79,500
PROGRAMMING -- INGREDIENT SYSTEM $ 163,600
MECHANICAL DESIGN $ 130,700
EQUIPMENT VENDOR DRAWING REVIEW $ 43,800
VENDOR VISITS $ 8,500
SUBTOTAL ENGINEERING SERVICES $ 426,100
TRAVEL EXPENSES FOR ENGINEERING SERVICES $ 40,000
TOTAL EQUIPMENT COST -- BASE CASE $6,176,547
CONSTRUCTION SUPPORT TO THE PLANT
CONSTRUCTION SUPPORT MECHANICAL AND ELECTRICAL $ 36,250
TRAINING SUPPORT TO THE PLANT $ 16,900
START-UP SUPPORT MECHANICAL AND ELECTRICAL $ 35,695
CONSTRUCTION TRAVEL EXPENSES $ 45,000
Subtotal construction support and startup $ 133,845
TOTAL PROCESS EQUIPMENT COST $6,310,392
OPTION 1 -- BULK SUGAR GRINDING
SUGAR PROCESSING
BULK SUGAR -- 2 silos $ 637,844
SUGAR PACKAGING -- Valve Spout $ 761,380
MCC AND CONTROL PANEL $ 75,500
CORN STARCH OR SUGAR SILO $ 101,675
PROGRAMMING -- SUGAR SYSTEM $ 24,000
SUBTOTAL SUGAR $1,600,399
OPTION 2 -- BAG DUMP ONLY
BULK BAG AND BAG DUMPING SYSTEM $37,590
BAG DUMPING SYSTEM $22,500
SAVINGS $15,090at7
SUBTOTAL DIFFERENCE FOR SEVEN SYSTEMS $ 105,630
OPTION 3 -- OIL STORAGE ONLY
DEDUCT OF EQUIPMENT FOR EMULSIFICATION SYSTEM $ 50,943
OPTION 4 -- TOTE BIN PACKAGING
DEDUCT OF EQUIPMENT FOR TOTE BIN PACKAGING SYSTEM $ 299,114
TOTAL PROCESS EQUIPMENT COST $8,366,478
OPTION 5 -- PRESSURE SIFTERS -- ELIMINATE SILO BUILDING
INCREMENTAL ADDITIONAL COST FOR SILOS AND SIFTERS $ 38,500
INCREMENTAL COST FOR USING XXXXX FILLER 5 SPOUT UNIT $ 258,125
WORST CASE SCENARIO
DL-1165805v10 24
121
SCHEDULE 4(a)
Pricing Schedule
The term "Applicable Margin" means, for any day, the rate per annum set
forth below in the row opposite such term and in the column corresponding to the
Pricing Level that applies on such day:
Pricing Level Level I Level II Level III Level IV Level V
Applicable Margin: .75% 0.90.% 1.05% 1.30% 1.75%
For purposes of this Pricing Schedule, the following terms have the
following meanings:
"Level I Pricing" applies if the Fixed Charge Coverage Ratio at the
most recent Performance Pricing Determination Date was greater than or equal to
4.50 to 1.00.
"Level II Pricing" applies if the Fixed Charge Coverage Ratio at the
most recent Performance Pricing Determination Date was greater than or equal to
3.75 to 1.00 and less than 4.50 to 1.00.
"Level III Pricing" applies if the Fixed Charge Coverage Ratio at the
most recent Performance Pricing Determination Date was greater than or equal to
3.00 to 1.00 and less than to 3.75 to 1.00.
"Level IV Pricing" applies if the Fixed Charge Coverage Ratio at the
most recent Performance Pricing Determination Date was greater than or equal to
2.25 to 1.00 and less than 3.00 to 1.00.
"Level V Pricing" applies if the Fixed Charge Coverage Ratio at the
most recent Performance Pricing Determination Date was less than 2.25 to 1.00.
"Performance Pricing Determination Date" means each date that occurs 45
days after the end of the first 3 Fiscal Quarters, and 90 days after the end of
the last Fiscal Quarter, of the Lessor.
In determining the Applicable Margin, the Lessor shall refer to the
Parent's most recent financial statements delivered to the Lessor pursuant to
Section 30(a)(i) of the Lease (together with the Compliance Certificate
delivered in connection therewith, the "Audited Statements") and Section
30(a)(ii)) of the Lease (together with the Compliance Certificate delivered in
connection therewith, the "Unaudited Statements"); provided, that, should any
relevant Audited Statements or Unaudited Statements be delivered on a date later
than a Performance Pricing Determination Date, any necessary changes in the
Applicable Margin shall not be effective, except to the extent hereinafter
provided to the contrary, until the next succeeding Performance Pricing
Determination Date; provided, further, that, if the Audited Statements reflect a
Fixed Charge Coverage Ratio different from the Fixed Charge Coverage Ratio
determined by the
122
Unaudited Statements for the third Fiscal Quarter, then (i) if the Audited
Statements reveal that the Lessee should have paid Basic Rent at a higher rate
for the period from the last Performance Pricing Determination Date to the next
Performance Pricing Determination Date, then the Lessee shall immediately pay to
the Lessor such amounts as are necessary to cause the Lessor to have received
the appropriate return, and (ii) if the Audited Statements reveal that the
Lessee should have paid Basic Rent at a lower rate for the period from the last
Performance Pricing Determination Date to the next Performance Pricing
Determination Date, then, so long as no Default shall be in existence, the
Lessor shall promptly pay to the Lessee such amounts as are necessary to cause
the Lessor to have received the appropriate return.
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SCHEDULE 14
Insurance Requirements
The Lessee will provide, or cause to be provided, insurance in
accordance with the terms of this Schedule, which insurance shall be placed and
maintained with Permitted Insurers.
(a) Insurance Coverages and Limits. At all times
subsequent to the Lease Commencement Date, the Lessee shall provide, or cause to
be provided, the following property and liability coverages with respect to the
Facility:
(i) all-risk property coverage, with limits of
coverage at least equal to the replacement cost (which limits shall be
not less than $28,000,000 for the Facility), which insurance coverage
may, at the Lessee's option, be included under any "blanket" policy
maintained by Lessee so long as such "blanket" policy provides for
all-risk property coverage with respect to the Facility and any other
Property covered thereby, with limits of coverage at least equal to the
aggregate replacement cost of the Facility (provided, however, that
such insurance, in either case, shall provide for replacement cost
coverage, provided that the insured property is replaced, and, provided
further, that the insurance shall not have the effect of causing the
Lessee or any of its Affiliates to be deemed a co-insurer), with
respect to the Lessee and any Affiliate of the Lessee providing
services with respect to the Facility, or if the Lessee elects to
effect the coverage required by this Paragraph under a "blanket"
policy, the Lessee and its Affiliates insured thereby, such insurance
to include, coverage for (x) floods, windstorms, hurricanes, tornadoes,
earthquakes, collapse and other perils (including debris removal and
cleanup) and such insurance to cover equipment separated from the
Facility, transit of equipment and consumables to and from the Site, in
each case with respect to the Facility, and such insurance to include
coverage for all other risks and occurrences customarily included under
all-risk policies available with respect to Property similar in
installation, location and operation to the Facility (or the Facility
and all other Property insured thereby if all are covered under a
"blanket" policy), and (y) "boiler and machinery" property damage
insurance on a comprehensive basis with respect to damage to the
machinery, plants, equipment or similar apparatus (including production
machinery) included in the Facility (or the Facility and all other
Property insured thereby if all are covered under a "blanket" policy),
from risks and in amounts normally insured against under machinery
policies.
(ii) (A) statutory workers' compensation and
occupational disease insurance in accordance with applicable
state and federal law, and employer's liability insurance with
primary and excess coverage limits of not less than
$5,000,000;
(B) commercial general liability
insurance covering operations of the Lessee, contractual
liability coverage, contingent liability coverage arising out
of the operations of the Facility, cross-liabilities coverage,
sudden and accidental seepage and pollution coverage for the
release of spent and unspent cooking oil and pollutants
emitted from a hostile fire, and other coverage for
124
hazards customarily insured with respect to Property similar
in construction, location, occupancy and operation to the
Facility, with limits complying with the underlying
requirements of the excess liability policy described in
Paragraph (a)(ii)(C);
(C) excess commercial liability
insurance in excess of the liability policies described in
Paragraphs (a)(ii)(A) and (B) to bring to limits of not less
than $11,000,000 for each occurrence and in the aggregate per
year with respect to the Lessee and its Affiliates.
(iii) The policy or policies providing the
coverage required by paragraphs (a)(i) and (a)(ii)(B) and (a)(ii)(C)
may include deductible amounts for the account of the Lessee or its
Affiliates, as the case may be, not to exceed $360,000 in the aggregate
for all such coverages.
(b) Insurance Endorsements. Any insurance carried in
accordance herewith shall, except as hereinafter permitted, provide or be
endorsed to provide that:
(i) the Lessor, as its interests may appear,
shall be included as additional insured or named as loss payee but only
with respects coverages required by Paragraphs (a)(i), with the
understanding that any obligation imposed upon the insured (including,
without limitation, the liability to pay premiums) under any policy
required by this Schedule shall be the obligation of the Lessee and its
Affiliates) and not that of the Lessor;
(ii) except with respect to the coverage required
by Paragraphs (a)(i) and (a)(ii), there shall be a cross-liability and
severability of interest endorsement providing that to the extent the
policy is written to cover more than one insured, all terms,
conditions, insuring agreements and endorsements, with the exception of
limits of liability and deductibles shall operate in the same manner as
if there were a separate policy covering each insured;
(iii) the insurer thereunder waives all rights of
subrogation against the Lessor;
(iv) such insurance shall be primary without
right of contribution of any other insurance carried by or on behalf of
the Lessor with respect to its interests in the Facility; and
(v) if such insurance is cancelled for any
reason whatsoever (including, without limitation, nonpayment of
premium) or any material change is made in the coverage that affects
the interests of the Lessor, such cancellation or change shall not be
effective as to the Lessor for 10 days for nonpayment of premiums and
otherwise for 45 days, in both cases after receipt by the Lessor (at
the address provided pursuant to Section 22 of the Lease) of written
notice sent by certified mail from such insurer of such cancellation or
change.
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(c) Adjustment of Property Losses. After the occurrence
and during the continuation of an Event of Default or after the occurrence of
any other Cancellation Event or a Termination Event, the loss, if any, under any
property insurance covering the Facility required to be carried by this Schedule
shall be adjusted with the insurance companies or otherwise collected,
including, without limitation, the filing of appropriate proceedings, by the
Lessee in consultation with the Lessor.
(d) Reinstatement of Limits. The Lessee shall, or shall
cause its insurance broker to, notify promptly the Lessor at any time when the
limits of the excess commercial liability insurance required by Paragraph
(a)(ii)(C) shall have been reduced, either by reason of payments of, or the
establishment of reserves for the ultimate payment of, claims which have been
asserted during the term of such insurance, by an aggregate amount in excess of
$500,000. At such time, the Lessee shall, if so requested by the Lessor, use its
best efforts to reinstate such insurance so as to comply with the requisite
limits prescribed herein.
(e) Upon request, the Lessee will furnish the Lessor
evidence of such insurance relating to the Facility.
(f) Additional Insurance by the Lessor or the Lessee.
Nothing in this Schedule shall prohibit the Lessor or the Lessee, as their
respective interests may appear, from maintaining for their own account, at the
expense of the Person purchasing such insurance, additional insurance on or with
respect to the Facility, or any part thereof, with coverage exceeding that
otherwise required under this Schedule, unless such insurance would conflict
with or limit the insurance otherwise required under this Schedule.
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SCHEDULE 28(b)
Applicable Permits
- Site Development Permit through the City of Effingham (comes with the
Building Permit)
- Sewer connection permit through I.E.P.A. (waiting on return of
application from City for submittal to I.E.P.A.). This permit requires
signoff from Illinois Historical Preservation Agency and Illinois
Department of Conservation.
- Notice of Intent - General Permit to Discharge Storm Water for
Construction Site Activities. This has been sent and notice has been
acknowledged.
- Building Permit from the City of Effingham. Permit application and
plans are in building department review.
- EPA "Air Emissions" Permit. THC has currently started application
process to determine if one is required.
- Per conversation with I.E.P.A. no water connection permit is necessary.
- No Storm Water Discharge Permit is required per the Illinois
Environment Protection Agency.
- No required permits from the Illinois Historic Preservation Agency are
required.
- No other agencies or permits are known at this time.
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SCHEDULE 29(m)
Environmental Matters
None, except as expressly stated in the Environmental Assessment.
128
SCHEDULE 29(r)
Subsidiaries
JURISDICTION OF
SUBSIDIARY TYPE OF ENTITY ORGANIZATION PERCENTAGE OWNERSHIP BY PARENT
---------- -------------- --------------- ------------------------------
Krispy Kreme Doughnut Corporation corporation North Carolina 100% by Krispy Kreme Doughnuts, Inc.
KKIM Corp. corporation Delaware 100% by Krispy Kreme Doughnut Corporation
Krispy Kreme Distributing Company, corporation North Carolina 100% by Krispy Kreme Doughnut Corporation
Incorporated
Xxxxxxxx'x Xxxx-X-Xxxx Bakery, corporation North Carolina 100% by Krispy Kreme Doughnut Corporation
Incorporated
HD Capital Corporation corporation Delaware 100% by Xxxxxxxx'x Xxxx-X-Xxxx Bakery, Incorporated
HDN Development Corporation corporation Kentucky 100% by HD Capital Corporation
Krispy Kreme Coffee Company, LLC limited liability North Carolina 100% by Krispy Kreme Doughnut Corporation
company
Golden Gate Doughnuts, LLC limited liability North Carolina 59% by Krispy Kreme Doughnut Corporation
company
Freedom Rings, LLC limited liability Delaware 70% by Krispy Kreme Doughnut Corporation
company
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SCHEDULE 30(t)
KRISPY KREME DOUGHNUTS, INC.
(THE "CORPORATION")
INVESTMENT POLICY
ADOPTED APRIL 10, 2000;
AMENDED APRIL 12, 2001
I. INVESTMENT OBJECTIVES: The Corporation has established the following
objectives regarding its investment policy.
1. SAFETY: The primary objective of the investment activities of
the Corporation is preservation of principal. Each investment
transaction shall seek to first ensure that capital losses are
avoided by effectively making low risk investments.
2. LIQUIDITY: The investment portfolio will be structured to
provide sufficient liquidity to pay all obligations of the
Corporation.
3. RETURN: The Corporation seeks to maximize the return on all
investments within the limits of safety and liquidity.
II. INVESTMENT POLICY AUTHORITY: The Corporation does hereby establish the
responsibility for enforcing and revising the Corporation's investment
policies with the Investment Committee. The Investment Committee shall
consist of the Chief Financial Officer (CFO), Senior Vice President of
Corporate Finance, and Director of Accounting. The Investment Committee
will meet monthly, along with Branch Banking & Trust's (BB&T) Trust
Department Money Managers, to review the investing activities of the
Corporation. The Investment Committee will be charged with the
responsibility of revising, approving, and enforcing the Corporation's
investment policies, as well as, reviewing the previous month's
investment results.
Executing the daily investment decisions, reporting, and safekeeping of
the investments in accordance with the Corporation's Investment
policies are the primary responsibility of the CFO. The CFO has further
delegated these duties to the BB&T Trust Department Money Managers. In
addition, the CFO will provide a monthly investment report to the Chief
Executive Officer.
III. AUTHORIZED INVESTMENTS: The BB&T Trust Department Money Managers may
buy, sell or invest corporate funds into any of the following
securities in accordance with the established standards:
130
Security Description
MATURITIES LIMITATIONS
---------- -----------
U.S. Treasuries (Bills, Notes, Bonds) 1 wk to 3 yrs up to 40% of portfolio
U.S. Government Agency Securities 1 wk to 3 yrs up to 60% of portfolio
Gov. National Mortgage Assoc. (GNMA)
Federal Home Loan Mortgage Assoc. (FNMA)
Federal Home Loan Mortgage Corp. (FHLMC)
Student Loan Marketing Assoc. (SLMA)
Corporate Bonds/Debentures Less than 3 years up to 20% of portfolio
Repurchase Agreements Overnight Collateralized by Gov.
Securities
Eurodollars Overnight up to 10% of portfolio
Master Note Overnight up to 20% of portfolio
Commercial Paper 1 day to 180 days up to 10% of portfolio
A1, P1
Money Market Funds Daily Reviewed w/Corporation
Certificates of Deposit 1 wk to 3 yrs up to 20% of portfolio
Municipals less than 3 years up to 20% of portfolio
Investments into securities outside the authorized investments must be
approved, in writing, by the Investment Committee.
IV. INVESTMENT QUALITY RATINGS: The credit rating on all investment shall
be determined prior to investing in any security. All references to
credit rating will be using the Standard & Poors and Xxxxx'x investment
rating services (single A or better for corporates, municipals and
preferred stock). In the event a credit rating should be downgraded by
one or both services while holding the security, BB&T Trust Department
shall notify the CFO, or anyone else the CFO designates, who will then
make the decision regarding liquidation or continuing to hold until
maturity.
V. INVESTMENT TERM TO MATURITY: Term to maturity shall be governed by the
Corporation's safety and liquidity limitations. Maturities should be
timed to coincide as closely as possible with the known cash needs.
VI. SAFEKEEPING: All investments made by the Corporation will be held with
BB&T in custody or safekeeping. In addition, the financial institution
must provide timely confirmation/safekeeping receipts on all investment
transactions and provide monthly transaction reports.
Any investing activities which are not covered or are a violation of
aforementioned Investment Policy must be approved, in writing, by the
Investment Committee.
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This Investment Policy is hereby adopted by the Investment Committee this
________ day of _________________, 2001.
KRISPY KREME DOUGHNUTS, INC.
-------------------------------------------------
Xxxxx X. Xxxxxxxxx, Chairman of the Board,
President & Chief Executive Officer
-------------------------------------------------
Xxxx X. Xxxx, Chief Financial Officer
-------------------------------------------------
Xxxxx X. Xxxxxxxxxx, Xx. Vice President -
Corporate Finance
BRANCH BANKING &TRUST
-------------------------------------------------
Xxxxxxx X. Xxxxxxxxx, Xx., Vice President -
Institutional Trust
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EXHIBIT A
Description of Site
A part of the Northwest Quarter of Section 32, Township 8 North, Range
6 East of the Third Principal Meridian, Effingham County, Illinois, more
particularly described as follows:
COMMENCING at the Northwest corner of said Section 32, being an iron
pin; thence South 89(degree) 43' 12" East, record bearing, along the North line
of said Section 32, to a point 15.00 feet perpendicular distance Easterly of the
East line of the West Half of the North Half of the Northwest Quarter of the
Northwest Quarter of said Section 32, a distance of 678.21 feet; thence South
01(degree) 23' 10" West, along a line 15.00 feet perpendicular distance Easterly
of the East line of the West Half of the North Half of the Northwest Quarter of
the Northwest Quarter of said Section 32, a distance of 30.01 feet to the POINT
OF BEGINNING, being an iron pin; thence South 89(degree) 43' 12" East a distance
of 704.32 feet; thence South 72(degree) 56' 29" East a distance of 69.28 feet;
thence, along a curve to the left, having a radius of 60.00 feet, an arc length
of 129.39 feet, a chord bearing of North 62(degree) 03' 31" East, a chord
distance of 105.74 feet to the North line of Section 32; thence, continuing
South 89(degree) 43' 12" East, along the North line of said Section 32, to the
West right-of-way line of CSX Railroad, a distance of 324.35 feet, to an iron
pin; thence South 20(degree) 19' 37" East, along the west right-of-way line of
CSX Railroad to the Northeast corner of Xxx 0 xx Xxxxxxxxx Xxxxxxxx Xxxx, Xxxxx
Addition (reference made to the Plat recorded in Book 1468 page 282, Plat #250-B
at the Effingham County Recorder's Office), a distance of 611.69 to an iron pin;
thence South 69(degree) 40' 23" West along the North line of said Lot 4, a
distance of 271.93 feet to an iron pin; thence North 89(degree) 40' 01" West, to
the Northwest corner of said Lot 4, a distance of 216.60 feet to an iron pin;
thence South 01(degree) 20' 10" West to the Southwest corner of said Lot 4,
being the North right-of-way line of Xxxxxxx Avenue, a distance of 657.99 feet
to an iron pin; thence North 89(degree) 36' 50" West, along the North
right-of-way line of Xxxxxxx Avenue, to the Southeast corner of Lot 8 of
Effingham Business Park, First Addition, (reference made to the plat recorded in
Book 1215 page 25, Plat #206-B at the Effingham County Recorder's Office), a
distance of 944.52 feet, to an iron pin; thence North 01(degree) 26' 10" East to
the Northeast corner of said Lot 8, a distance of 662.23 feet to an iron pin;
thence North 89(degree) 40' 01" West along the South line of the North Half of
the Northwest Quarter of the Northwest Quarter of said Section 32, to a point 15
feet perpendicular distance Easterly of the East line of the West Half of the
North Half of the Northwest Quarter of the Northwest Quarter of said Section 32,
a distance of 1.24 feet to an iron pin; thence North 01(degree) 23' 10" East
along a line 15.00 feet perpendicular distance Easterly of the East line of the
West Half of the North Half of the Northwest Quarter of the Northwest Quarter of
said Section 32, a distance of 632.21 feet to an iron pin to the POINT OF
BEGINNING;
said land being also described as:
Lot 1 of KRISPY KREME SUBDIVISION (reference made to Plat #274-A and
Book 1618 page 280 in the Recorder's Office of Effingham County, Illinois);
situated in the City of Effingham, County of Effingham and State of Illinois.
133
EXHIBIT B
Form of Opinion of Lessee's and Guarantors' Counsel
134
ATTORNEYS AT LAW
0000 Xxxx Xxxxxx Xxxxxx
XXXXXXXXXX XXXXXXXX XXX Xxxxxxx-Xxxxx, Xxxxx Xxxxxxxx 00000-0000
Telephone: 000.000.0000
Facsimile: 336.607.7505
Web site: xxx.xxxxxxxxxxxxxxxxxx.xxx
XXXXX X. XXXXXXXXXXX
E-MAIL: XXXXXXXXXXXX@XXXXXXXXXXXXXXXXXX.XXX
April 26, 2001 DIRECT DIAL: 000.000.0000
To Wachovia Capital Investments, Inc.
as Lessor
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Dear Sirs:
We have acted as counsel for Krispy Kreme Doughnut Corporation, a North
Carolina corporation (the "Lessee"), in connection with the Lease Agreement (the
"Lease") dated as of April 26, 2001, between the Lessee and Wachovia Capital
Investments, Inc. ("Wachovia") as the Lessor, and for Lessee's parent, Krispy
Kreme Doughnuts, Inc., a North Carolina corporation (the "Parent") and its
wholly-owned subsidiaries, KKIM Corp., a Delaware corporation, Krispy Kreme
Distributing Company, Incorporated, a North Carolina corporation, Xxxxxxxx'x
Xxxx-X-Xxxx Bakery, Incorporated, a North Carolina corporation, HD Capital
Corporation, a Delaware corporation, HDN Development Corporation, a Kentucky
corporation, and Krispy Kreme Coffee Company, LLC, a North Carolina limited
liability company (together, the "Subsidiaries," and together with Parent, the
"Guarantors") in connection with the Parent Guaranty and Subsidiary Guaranty,
each dated as of April 26, 2001. Lessee and the Guarantors are referred to
herein as the "Credit Parties." All capitalized terms used herein and not
otherwise defined shall have the meanings given such terms in the Lease.
For purposes of rendering the opinions contained in this letter, we
have examined and reviewed the following (collectively, the "Operative
Documents"):
(i) the Lease;
(ii) the Memorandum of Lease, dated as of April 26, 2001, between
Lessee and Wachovia;
(iii) the Acquisition, Agency, and Indemnity and Support Agreement,
dated as of April 26, 2001, between the Lessee and Wachovia;
(iv) the Ground Lease, dated as of April 26, 2001, between the
Lessee and Wachovia;
(v) the Parent Guaranty, dated as of April 26, 2001, between
Parent and Wachovia;
ATLANTA - AUGUSTA - BRUSSELS - CHARLOTTE - LONDON - MIAMI -
RALEIGH - RESTON - STOCKHOLM - XXXXXXXXXX - XXXXXXX-XXXXX
000
XXXXXXXXXX XXXXXXXX XXX
(vi) the Subsidiary Guaranty, dated as of April 26, 2001, between
the Subsidiaries and Wachovia; and
(vii) the Contribution Agreement, dated as of April 26, 2001 between
the Credit Parties.
We have also examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments as we have deemed
necessary or advisable for purposes of this opinion.
In such examination, we have assumed the legal capacity of natural
persons, the genuineness of all signatures (other than signatures on behalf of
the Credit Parties), the authenticity of all documents submitted to us as
originals, the conformity to original documents of all documents submitted to us
as certified, photostatic or facsimile copies, and the authenticity of the
originals of such copies.
As to various questions of fact material to the opinions rendered
herein, we have relied upon information furnished to us by or on behalf of the
Credit Parties. We have assumed the due execution and delivery, pursuant to due
authorization, of the Operative Documents by each party thereto other than the
Credit Parties, that each such other party has the full power, authority and
legal right to enter into and perform its obligations under each Operative
Document to which it is a party, that each Operative Document constitutes the
valid and legally binding obligation of each such other party, enforceable
against such party in accordance with its terms, and that all necessary
consents, approvals, authorizations, registrations, declarations and filings
(governmental or otherwise) and all other conditions precedent with respect to
the legal and valid execution and delivery of, and performance under, the
Operative Documents by each party thereto other than the Credit Parties have
been made or satisfied or have occurred and are in full force and effect.
Whenever any opinion herein with respect to the existence or absence of
facts is qualified by the phrase, "to our knowledge," such phrase indicates only
that during the course of our representation of the Credit Parties, no
information has come to our attention which would give us actual knowledge of
the existence or absence of such facts. Except to the extent otherwise expressly
stated herein, we have not undertaken any independent investigation to determine
the existence or absence of any such facts and no inference as to our knowledge
of the existence of such facts should be drawn from the fact of our
representation of the Credit Parties.
Based upon our examination, as described above, and subject to the
foregoing and to the qualifications, limitations, exceptions, and assumptions
set forth below, we are of the opinion that:
1. Each Credit Party is duly organized, validly existing and in
good standing under the laws of the State of its organization and has all
requisite power and authority required to carry on its respective business as
now conducted. Each Credit Party has the power, authority and legal right to
execute, deliver and perform its obligations under the Operative Documents.
2
000
XXXXXXXXXX XXXXXXXX XXX
To our knowledge, each Credit Party has all material governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted.
2. The execution, delivery and performance by each Credit Party
of the Operative Documents to which it is a party (i) are within each such
Credit Party's corporate or other organizational powers, (ii) have been duly
authorized by all necessary corporate or other action, (iii) require no consent
or approval or other action by or in respect of, or notice to or filing with,
any Governmental Authority (other than the recording of the Memorandum of Lease
and the Ground Lease), (iv) do not violate or contravene or constitute a default
under, any provision of any Governmental Requirement or of the certificate of
incorporation or by-laws of any Credit Party (or of the articles of organization
or operating agreement, as applicable) or of any agreement, judgment,
injunction, order, decree or other instrument which to our knowledge is binding
upon such Credit Party or any of its assets and (v) to our knowledge, except as
provided in the Lease, do not result in the creation or imposition of any Lien
on any asset of any Credit Party.
3. Each Operative Document has been duly executed by each Credit
Party that is a party thereto and constitutes a valid and binding agreement of
each Credit Party that is a party thereto, enforceable against each such Credit
Party in accordance with its terms.
4. To our knowledge, there is no action, suit or proceeding
pending, or threatened, against or affecting any Credit Party or any Subsidiary
before any court or arbitrator or any Governmental Authority in which there is a
reasonable possibility of an adverse decision which could materially adversely
affect the business, consolidated financial position or consolidated results of
operations of the Credit Parties and the Subsidiaries, considered as a whole, or
which in any manner questions the validity or enforceability of the Lease or any
other Operative Document.
5. None of the Credit Parties is an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
6. None of the Credit Parties is a "holding company", or a
"subsidiary company" of a "holding company", or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company", as such terms are
defined in the Public Utility Holding Company Act of 1935, as amended.
7. The choice of New York law to govern the Lease and the other
Operative Documents in which such choice is stipulated is a valid and effective
choice of law under the laws of the State of North Carolina and adherence to
existing judicial precedents generally would require a court sitting in the
State of North Carolina to abide by such choice of law, unless a fundamental
policy of the State of North Carolina would be violated; provided, however, that
North Carolina courts may find that matters relating to real property be decided
according to the law of the situs of the real property. We are not aware of any
provision of the Lease or the other Operative Documents which would violate a
fundamental policy of the State of North Carolina.
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XXXXXXXXXX XXXXXXXX LLP
The opinions expresses in this letter are subject to the following
qualifications:
(a) We are qualified to practice law in the State of North
Carolina, and we express no opinion as to the laws of any other jurisdiction
other than the State of North Carolina, U.S. Federal law, and, with respect to
the due organization, valid existence, good standing, power, authority, and due
authorization of certain Credit Parties incorporated under the laws of the
States of Delaware and Kentucky, Delaware corporate law, and Kentucky corporate
law. To the extent the Operative Documents state that the interpretation and
enforcement thereof are controlled by the laws of a state other than the State
of North Carolina, for purposes of our opinions rendered herein, we have, with
your permission, assumed that the laws of the State of North Carolina control
such interpretation and enforcement. In rendering our opinions herein, we have,
with your permission, limited our examination of laws, rules and regulations to
those types of laws, rules and regulations of general applicability to
transactions of the type contemplated by the Operative Documents.
(b) Our opinion in paragraph 1 as to the good standing of the
Credit Parties is based solely on certificates of the Secretary of State of the
State of organization of each of the Credit Parties.
(c) The opinions contained herein as to the enforceability of the
Operative Documents are subject to the qualification that enforcement of the
Operative Documents is limited by the following: (i) applicable bankruptcy,
reorganization, insolvency, moratorium, fraudulent conveyance and similar laws
which relate to or affect creditors' rights generally; (ii) general principles
of equity, including concepts of materiality, reasonableness, unconscionability,
good faith and fair dealing; (iii) laws rendering unenforceable indemnification
contrary to Federal and state securities laws and public policy; and (iv) the
provisions of North Carolina General Statutes xx.xx. 6-21.1 and 6-21.2 relating
to attorneys fees.
(d) Our opinion as to the enforceability of the Operative
Documents is also subject to the further qualification that certain provisions
contained therein may not be enforceable but, in our opinion (which is based
upon the assumptions and subject to the qualification set forth herein), such
unenforceability will not render the Operative Documents invalid as a whole or
substantively interfere with the practical realization of the principal benefits
to be provided thereby.
(e) We express no opinion as to any provision in the Operative
Documents which provides that acceptance of late payment or other late
performance will not be deemed a waiver of the default generated thereby. The
North Carolina Court of Appeals has held that when a holder of a note regularly
accepts late payments, it is deemed to waive its rights to accelerate the debt
because of late payments until it notifies the maker that prompt payments are
again required. Consequently, this principle may be extended to other late
performances under the Operative Documents.
(f) We express no opinion as to the enforceability of the
Memorandum of Lease as a mortgage or any remedies thereunder.
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XXXXXXXXXX XXXXXXXX LLP
(g) We express no opinion as to the enforceability of the waiver
of notice provisions of the Operative Documents. Notices required under North
Carolina General Statutes ss. 25-9-504 may not be waived. Furthermore, Chapter
45 of the North Carolina General Statutes provides for certain required notices
which cannot be waived in the event of foreclosure against any property covered
thereby.
(h) We express no opinion as to the enforceability of any
provision of the Operative Documents granting any person authority to act as an
agent or attorney-in-fact for any Credit Party or limiting any fiduciary duty of
a person acting in any such capacity.
(i) We express no opinion as to (i) the existence of, or the
right, title or interest of any Credit Party in, to or under, the Collateral or
any other property, (ii) the creation of any security interest or other lien, or
(iii) the priority of any security interest created by the Operative Documents.
(j) Any agreement contained in the Operative Documents that any
action concerning or relating thereto must be venued in a particular county is
unenforceable under North Carolina law.
(k) Any waiver in the Operative Documents to the right to a jury
trial is unenforceable pursuant to North Carolina General Statutes ss. 22B-10.
(l) We have no obligation to update our opinions for events
occurring after the date of this letter.
5
000
XXXXXXXXXX XXXXXXXX XXX
Our opinions are solely for the information and benefit of the
addressee in connection with the transactions contemplated by the Operative
Documents and may not be relied upon by any other party for any purpose, except
for permitted assignees and participants under the Lease. The opinions herein
shall not be quoted or otherwise referred to in any financial statement or other
documents, in whole or in part, or furnished to any other party or agency
without our prior written consent.
Very truly yours,
XXXXXXXXXX XXXXXXXX LLP
By:
----------------------------------------
Xxxxx X. Xxxxxxxxxxx
Partner
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EXHIBIT C
Compliance Certificate
Reference is made to the Lease Agreement dated as of April 26,
2001 (as modified and supplemented and in effect from time to time, the "Lease
Agreement") between Krispy Kreme Doughnut Corporation, as Lessee, and Wachovia
Capital Investments, Inc., as Lessor. Capitalized terms used herein shall have
the meanings ascribed thereto in the Lease Agreement.
Pursuant to Section 30(a)(iii) of the Lease Agreement,
_________, the duly authorized chief financial officer of Krispy Kreme Doughnut
Corporation, and ______, the duly authorized chief financial officer of Krispy
Kreme Doughnuts, Inc., hereby (i) certify to the Lessor that the information
contained in the Compliance Check List attached hereto is true, accurate and
complete as of ___________, ____, and that no Default is in existence on and as
of the date hereof and (ii) restate and reaffirm that the representations and
warranties contained in Article 29 of the Lease Agreement are true on and as of
the date hereof as though restated on and as of this date.
KRISPY KREME DOUGHNUT CORPORATION
(SEAL)
By:
--------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
KRISPY KREME DOUGHNUTS, INC. (SEAL)
By:
--------------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
1. Consolidations, Mergers and Sales of Assets (Section 30(d))
The Lessee will not, and will not permit any Subsidiary to, consolidate
or merge with or into, or sell, lease or otherwise transfer all or any
substantial part of its assets to, any other Person, or discontinue or
eliminate any business line or segment, provided that (i) the Lessee
may merge with another Person if (A) such Person is organized under the
laws of the United States of America or one of its states, (B) the
Lessee is the Person surviving such merger and (C) immediately after
giving effect to such merger, no Default shall have occurred and be
continuing, (ii) Subsidiaries of the Lessee may merge
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with one another, provided that if either party to the merger is a
Subsidiary Guarantor, the surviving entity must be a Subsidiary
Guarantor, (iii) any Subsidiary may merge with another Person if such
merger is a Permitted Acquisition and the Subsidiary is the Person
surviving such merger, and (iv) the foregoing limitation on the sale,
lease or other transfer of assets and on the discontinuation or
elimination of a business line or segment shall not prohibit, during
any Fiscal Quarter, a transfer of assets or the discontinuance or
elimination of a business line or segment (in a single transaction or
in a series of related transactions) unless the aggregate assets to be
so transferred or utilized in a business line or segment to be so
discontinued, when combined with all other assets transferred, and all
other assets utilized in all other business lines or segments
discontinued, during such Fiscal Quarter and the immediately preceding
3 Fiscal Quarters, either (x) constituted more than 10% of Consolidated
Total Assets at the end of the most recent Fiscal Year immediately
preceding such Fiscal Quarter, or (y) contributed more than 10% of
Consolidated Operating Profits during such Fiscal Quarter and the 3
Fiscal Quarters immediately preceding such Fiscal Quarter.
(a) Aggregate amount of assets sold, leased or
otherwise disposed of during Fiscal Quarter $_________________
(b) Aggregate amount of other assets sold, leased or
otherwise disposed of during the 3 immediately
preceding Fiscal Quarters $_________________
(c) Sum of (a) and (b) $_________________
(d) Consolidated Total Assets as of the end of the
most recent Fiscal Year immediately preceding
such Fiscal Quarter $_________________
(e) 10% of (d) $_________________
Limitation: (c) may not exceed (e)
(f) Portion of Consolidated Operating Profits
contributed by assets in (a) $_________________
(g) Portion of Consolidated Operating Profits
contributed by assets in (b) $_________________
(h) Sum of (f) and (g) $_________________
(i) Consolidated Operating Profits during such
Fiscal Quarter, and the 3 Fiscal Quarters
immediately preceding such Fiscal Quarter $_________________
(j) 10% of (i) $_________________
Limitation: (h) may not exceed (j)
(k) Consolidated Total Assets (excluding assets in
(a) and (b)) $_________________
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2. Investments (Section 30(t))
Neither the Parent nor any of its Subsidiaries shall make Investments
in any Person except:
(i) loans or advances to employees not exceeding $500,000
in the aggregate principal amount outstanding at any time, in each case
made in the ordinary course of business and consistent with practices
existing on the Closing Date;
(ii) deposits required by government agencies or public
utilities in the ordinary course of business;
(iii) investments made in accordance with the Investment
Policy attached hereto as Schedule 30(t) as in effect on the date
hereof without giving effect to any modifications thereto and without
giving effect to any Investments not expressly permitted by Schedule
30(t) that are authorized by the Lessee's Investment Committee or any
other Person;
(iv) Joint Venture Investments, provided that
Non-Guarantor Joint Venture Investments shall not at any time exceed in
the aggregate the following percentages of Consolidated Tangible Net
Worth during the following periods:
MAXIMUM PERCENTAGE OF
PERIOD CONSOLIDATED TANGIBLE NET WORTH
------ -------------------------------
From and including the 17.5%
Closing Date through and
including February 3, 2002
From and including February 20%
4, 2002, through and including
February 2, 2003
From and including February 22.5%
3, 2003, through and including
February 2, 2004
At all times on and after 25%
February 3, 2004
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(v) loans and advances to employees and members of the
Board of Directors of the Parent in connection with the conversion of
the Long Term Incentive Plan of the Parent in an aggregate amount not
to exceed $3,000,000; and
(vi) Permitted Acquisitions (exclusive of Joint Venture
Investments);
provided, however, that immediately after giving effect to the making
of any Investment, no Default shall have occurred and be continuing.
(a) Loans or Advances to Employees (aggregate) $_________________
Limitation on (a): cannot exceed $500,000
(b) Investments made in accordance with the Investment Policy $_________________
(c) Non-Guarantor Joint Venture Investments $_________________
Limitation on (c): Non-Guarantor Joint Venture Investments
cannot in the aggregate exceed ____% of Consolidated Tangible
Net Worth (Schedule 2) for the period from and including
[describe applicable period]
____% of Consolidated Tangible Net Worth $_________________
(d) Loans and advances to employees and members of the Board of
Directors of the Parent in connection with the conversion of
the Long-Term Incentive Plan of the Parent $_________________
Limitation on (d): cannot exceed $3,000,000
(e) Permitted Acquisitions $_________________
3. Liens (Section 30(u))
Neither the Lessee nor any Consolidated Subsidiary will create, assume
or suffer to exist any Lien on any asset not constituting part of the
Facility ... except:
(i) Liens existing on the date of this Lease securing
Debt outstanding on the date of this Lease in an aggregate principal
amount not exceeding $1,000,000;
(ii) any Lien existing on any specific fixed asset of any
Person at the time such Person becomes a Consolidated Subsidiary and
not created in contemplation of such event;
(iii) any Lien on any specific fixed asset securing Debt
incurred or assumed for the purpose of financing all or any part of the
cost of acquiring or constructing such asset,
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provided that (A) such Lien attaches to such asset concurrently with or
within 18 months after the acquisition or completion of construction
thereof, (B) such Lien does not at any time encumber any other
Property, and (C) the amount of the Debt secured by such asset is not
increased;
(iv) any Lien on any specific fixed asset of any Person
existing at the time such Person is merged or consolidated with or into
the Lessee or a Consolidated Subsidiary and not created in
contemplation of such event;
(v) any Lien existing on any specific fixed asset prior
to the acquisition thereof by the Lessee or a Consolidated Subsidiary
and not created in contemplation of such acquisition;
(vi) Liens securing Debt owing by any Subsidiary to the
Lessee;
(vii) any Lien arising out of the refinancing, extension,
renewal or refunding of any Debt secured by any Lien permitted by any
of the foregoing paragraphs of this Section 30(u), provided that (x)
such Debt is not secured by any additional assets, and (y) the amount
of such Debt secured by any such Lien is not increased;
(viii) Liens incidental to the conduct of the Lessee's
business or the ownership of its assets which (i) do not secure Debt
and (ii) do not in the aggregate materially detract from the value of
its assets or materially impair the use thereof in the operation of its
business;
(ix) any Lien on Margin Stock; and
(x) Liens not otherwise permitted by the foregoing
paragraphs of this Section 30(u) securing Debt (other than indebtedness
under this Lease or the other Operating Documents) in an aggregate
principal amount at any time outstanding not to exceed 2.5% of
Consolidated Tangible Net Worth;
Provided the aggregate amount of Debt secured by Liens permitted by the
foregoing paragraphs (i) through (ix) shall at no time exceed an
aggregate amount greater than 5% of Consolidated Tangible Net Worth.
None of the Lessee's or any Consolidated Subsidiary's property is
subject to any Lien securing Debt which is not permitted by paragraphs
(i) through (x) of Section 30(u), except for:
Amount of Debt
Description of Lien and Property pursuant to Section 30(u)(i)-(x) Secured
----------------------------------------------------------------- --------------
(i) ____________________________________________ $__________________
(ii) ____________________________________________ $__________________
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(iii) ____________________________________________ $__________________
(iv) ____________________________________________ $__________________
(v) ____________________________________________ $__________________
(vi) ____________________________________________ $__________________
(vii) ____________________________________________ $__________________
(viii) ____________________________________________ $__________________
(ix) ____________________________________________ $__________________
(x) ____________________________________________ $__________________
Limitation on Total Amount of Debt Secured Order (x):
2.5% of Consolidated Tangible Net Worth
$__________________
Total Amount of Debt Secured under Section 30(u) (aggregate)
$__________________
Limitation on Section 30 (u) (in the aggregate): cannot
exceed 5% of Consolidated Tangible Net Worth $__________________
4. Fixed Charge Coverage Ratio (Section 30(v))
At the end of each Fiscal Quarter, commencing with the Fiscal Quarter
ending April 30, 2001, the Fixed Charge Coverage Ratio for the Fiscal
Quarter just ended and the immediately preceding 3 Fiscal Quarters
shall be greater than 1.85 to 1.0.
(a) Consolidated Net Income $_________________
(b) Consolidated Fixed Charges $_________________
(c) Sum of (a) and (b) $_________________
(d) Consolidated Fixed Charges $_________________
(e) Ratio of (c) to (d) __________ to 1.00
Limitation on (e): ratio must be greater than 1.85 to 1.00
5. Leverage Ratio (Section 30(w))
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At the end of each Fiscal Quarter, commencing with the Fiscal Quarter
ending April 30, 2001, the Consolidated Leverage Ratio shall be less than 2.25
to 1.0.
(a) Consolidated Total Debt $_________________
(b) Consolidated Adjusted EBITDA
for the period of 4 Fiscal Quarters
(Schedule 1) $_________________
(c) Ratio of (a) to (b) _____ to 1.00
Limitation on (c): Minimum Ratio must be less than 2.25
to 1.00
6. Minimum Consolidated Tangible Net Worth (Section 30(x))
Consolidated Tangible Net Worth will at no time be less than
$135,000,000 (the "Minimum Level") plus the sum of 33% of the
cumulative Reported Net Income of the Parent and its Consolidated
Subsidiaries during any period after April 30, 2001 (taken as one
accounting period), calculated quarterly at the end of each Fiscal
Quarter but excluding from such calculations of Reported Net Income for
purposes of this clause (x), any Fiscal Quarter in which the Reported
Net Income of the Parent and its Consolidated Subsidiaries is negative;
provided that:
(i) the Minimum Level shall be reduced by the amount of all
goodwill (less goodwill attributable to minority interests) from
Permitted Acquisitions that close on or before July 31, 2002 that
should appear as such on a consolidated balance sheet of the Parent and
its Subsidiaries in accordance with GAAP; provided that the aggregate
amount of all such reductions shall not exceed $25,000,000; and
(ii) the Minimum Level shall be increased by the amount of each
increase in stockholders' equity of the Parent and its Consolidated
Subsidiaries as a result of each issuance of Capital Stock or other
equity securities by the Parent and its Subsidiaries to the seller(s)
pursuant to (and as consideration for) each Permitted Acquisition that
closes on or before July 31, 2002 (including, without limitation, each
conversion by such seller(s) of Debt for Capital Stock or other equity
securities of the Parent or any Subsidiary).
(a) Consolidated Tangible Net Worth (Schedule 2) $_________________
(b) Reported Net Income(1) $_________________
(c) 33% of (b) $_________________
Section 1. _______________________________
(1) Exclude any Fiscal Quarter in which Reported Net Income is negative.
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(d) Minimum Level: $135,000,000 $_________________
(e) Adjustments to (d) for goodwill from Permitted Acquisitions
that close on or before July 31, 2002 $_________________
(f) Adjustments to (d) for issuance of Capital Stock and other
equity securities by Parent and its Subsidiaries for Permitted
Acquisitions closing on or before July 31, 2002 $_________________
(g) (d) less (e) plus (f) $_________________
(h) Sum of (c) and (g) $_________________
Limitation: (a) may not be less than (h)
7. Consolidated Total Liabilities to Consolidated Tangible Worth (Section
30(y))
As at the end of each Fiscal Quarter, commencing with the Fiscal
Quarter ending on April 30, 2001, the ratio of Consolidated Total
Liabilities to Consolidated Tangible Net Worth shall not be greater
than 0.75 to 1.0.
(a) Consolidated Total Liabilities $_________________
(b) Consolidated Tangible Net Worth (Schedule 2) $_________________
(c) Ratio of (a) to (b) $_________________
Limitation on (c): ratio must be less than or equal to 0.75 to
1.0.
8. Restricted Payments (Section 30(z))
The Lessee will not permit the Parent to declare or make any Restricted
Payments; provided, however, that the Parent may:
(i) repurchase, redeem or otherwise retire for value common stock
of the Parent pursuant to a stock repurchase plan duly approved by the
Board of Directors of the Parent; and
(ii) during any Fiscal Year, the Parent may declare and pay
dividends on its common stock in an amount not to exceed 50% of
Consolidated Net Income for the immediately preceding Fiscal Year;
provided, further, that after giving effect to the payment of any such
Restricted Payment, no Default shall be in existence or be created
thereby.
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(a) Amounts paid by Parent to repurchase, redeem or retire common
stock of Parent pursuant to approved stock repurchase plan
during Fiscal Year $_________________
(b) Parent dividends paid on common stock during Fiscal Year $_________________
Limitation on (b): may not exceed 50% of Consolidated Net
Income for the immediately preceding Fiscal Year
50% of Consolidated Net Income $_________________
9. Additional Guarantors (Section 30(aa))
With respect to any new Subsidiary (other than a Consolidated Joint
Venture) created or acquired after the Closing Date, the Lessee shall,
within 10 Business Days after such creation or acquisition cause each
new Subsidiary (a) to become a party to the Guaranty and the
Contribution Agreement by executing and delivering to the Lessor
counterparts thereof or joinder agreements with respect thereto, (b) to
deliver to the Lessor the certificate specified in Section 28(a)(i) for
such Subsidiary with appropriate insertions and attachments, and (c) if
requested by the Lessor, to deliver to the Lessor a legal opinion in
substantially the form of Exhibit B of the Lease Agreement with respect
to such Subsidiary and the Subsidiary Guaranty and Contribution
Agreement, from counsel to such Subsidiary reasonably satisfactory to
the Lessor.
(a) Subsidiary Guarantors
(1) KKIM Corporation
(2) Krispy Kreme Distributing Company, Inc.
(3) Xxxxxxxx'x Xxxx-X-Xxxx Bakery, Inc.
(4) HD Capital Corporation
(5) HDN Development Corporation
(6) Krispy Kreme Coffee Company, LLC
(7) [Additional Subsidiaries]
(b) Consolidated Joint Ventures
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Schedule 1
CONSOLIDATED ADJUSTED EBITDA
(a) Consolidated Net Income for:
____ quarter ____ $_________________
____ quarter ____ $_________________
____ quarter ____ $_________________
____ quarter ____ $_________________
Total $_________________
(b) Depreciation and amortization expense for:
____ quarter ____ $_________________
____ quarter ____ $_________________
____ quarter ____ $_________________
____ quarter ____ $_________________
Total $_________________
(c) Consolidated Interest Expense for:
____ quarter ____ $_________________
____ quarter ____ $_________________
____ quarter ____ $_________________
____ quarter ____ $_________________
Total $_________________
(d) Income tax expense for:
____ quarter ____ $_________________
____ quarter ____ $_________________
____ quarter ____ $_________________
____ quarter ____ $_________________
Total $_________________
(e) All payments made by Parent and its Consolidated Subsidiaries
under Synthetic Leases
____ quarter ____ $_________________
____ quarter ____ $_________________
____ quarter ____ $_________________
____ quarter ____ $_________________
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Total $_________________
CONSOLIDATED ADJUSTED EBITDA $_________________
(sum of (a), plus (b), plus (c), plus (d),
plus (e))
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CONSOLIDATED TANGIBLE NET WORTH
SCHEDULE 2
(a)______ Stockholders' Equity $_________________
(b)______ any surplus resulting from any write-up of assets subsequent
to January 28, 2001 $_________________
(c)______ all assets which would be treated as intangible assets for
balance sheet purposes under GAAP $_________________
(d)______ any amount at which shares of Capital Stock of the Parent
appear as an asset on the balance sheet of the Parent and its
Consolidated Subsidiaries (to the extent not included in (c)
above) $_________________
(e)______ loans or advances to stockholders, directors, officers or
employees $_________________
(f)______ Deferred expenses (to the extent not included in (c) above) $_________________
(g)______ all minority interests (except minority interests in
Unconsolidated Joint Ventures) $_________________
CONSOLIDATED TANGIBLE NET WORTH ((a), less (b), less (c),
less (d), less (e), less (f) less (g)) $_________________
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EXHIBIT D
Form of Subsidiary Guaranty
THIS SUBSIDIARY GUARANTY (this "Guaranty") is made as of April 26,
2001, by each of the undersigned entities respectively organized under the laws
of the states set forth on the signature pages below their names (collectively
the "Guarantors", which term shall include any Subsidiary of Krispy Kreme
Doughnuts, Inc., a North Carolina corporation, which becomes a Guarantor
pursuant to Section 16 hereof and Section 30(aa) of the Lease Agreement referred
to below), in favor of the Lessor, under the Lease Agreement referred to below.
W I T N E S S E T H
WHEREAS, Krispy Kreme Doughnuts Corporation, a North Carolina
corporation (the "Lessee"), and Wachovia Capital Investments, Inc., a Georgia
corporation (the "Lessor"), have entered into a certain Lease Agreement dated as
of April 26, 2001 (as it may be amended, restated, supplemented or modified from
time to time, the "Lease Agreement"), providing, subject to the terms and
conditions thereof, for Advances to be made by the Lessor to the Lessee;
WHEREAS, it is required by Section 28(a)(xiii) of the Lease Agreement
that each of the Guarantors execute and deliver this Guaranty whereby each of
the Guarantors shall guarantee the payment when due of all amounts that shall be
at any time payable by the Lessee under the Lease Agreement, the Agency
Agreement and the other Operative Documents to which the Lessee is a party; and
WHEREAS, in consideration of the financial and other support that the
Lessee has provided, and such financial and other support as the Lessee may in
the future provide, to the Guarantors, whether directly or indirectly, and in
order to induce the Lessor to enter into the Lease Agreement and the other
Operative Documents to which it is a party, each of the Guarantors is willing to
guarantee the obligations of the Lessee under the Lease Agreement, the Agency
Agreement, and the other Operative Documents to which the Lessee is a party;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. DEFINITIONS. Terms defined in the Lease Agreement
and not otherwise defined herein have, as used herein, the respective meanings
provided for therein.
SECTION 2. REPRESENTATIONS AND WARRANTIES. Each Guarantor
hereby represents and warrants to the Lessor that:
(a) it is (i) duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (ii) has the
corporate or other organizational power and authority and the legal right to own
and operate its property, to lease the property it operates and to conduct the
business in which it is currently engaged, and (iii) has all governmental
licenses,
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permits, authorizations, consents and approvals necessary to own and operate its
properties and its business as now conducted;
(b) it has the corporate or other organizational power and
authority and the legal right to execute and deliver, and to perform its
obligations under, this Guaranty, and has taken all necessary corporate or other
action to authorize its execution, delivery and performance of this Guaranty;
(c) this Guaranty has been duly executed and delivered to the
Lessor by such Guarantor and constitutes the legal, valid and binding obligation
of such Guarantor enforceable in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to or affecting the enforcement of
creditors' rights generally and general equitable principles;
(d) the execution, delivery and performance of this Guaranty will
not violate or constitute a default under any provision of any Governmental
Requirement or agreement, instrument or contractual obligation applicable to or
binding on such Guarantor or any of its Property and will not result in or
require the creation or imposition of any Lien on any of the Properties or
revenues of such Guarantor pursuant to any Governmental Requirement or any
agreement, instrument or contractual obligation applicable to or binding on such
Guarantor or any of its Property;
(e) no consent or authorization of, filing with, or other act by
or in respect of, any arbitrator or Governmental Authority and no consent of any
other Person (including, without limitation, any stockholder or creditor of such
Guarantor) is required in connection with the execution, delivery, performance,
validity or enforceability of this Guaranty;
(f) it, in connection with entering into this Guaranty, has
performed its own independent investigation of the Lessee and the risks
involved, is not relying on any information or representation furnished or given
by the Lessee and has reviewed the Operative Documents and acknowledges that the
Operative Documents are satisfactory to it in form and substance;
Each Guarantor agrees that the foregoing representations and warranties
shall be deemed to have been made by such Guarantor on the date of each Advance
under the Lease Agreement on and as of such date of each such Advance as though
made hereunder on and as of such date.
The Guarantors incorporate herein by reference as fully as if set forth
herein all of the representations and warranties pertaining to the Guarantors
(whether stated in their capacity as Guarantors or as Subsidiaries) contained in
Article 29 of the Lease Agreement (which representations and warranties shall be
deemed to have been restated by the Guarantors on the date hereof and upon each
Advance under the Lease Agreement).
SECTION 3. COVENANTS. The Guarantors covenant that, so long as
the Lessor has any Commitment outstanding under the Lease Agreement or any
amount payable by the Lessee under the Lease Agreement or any other Operative
Document shall remain unpaid, the Guarantors will fully comply with those
covenants set forth in Article 30 of the Lease Agreement pertaining to the
Guarantors (whether stated in their capacity as Guarantors or as Subsidiaries),
and the Guarantors incorporate herein by reference as fully as if set forth
herein all of such
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154
covenants. Each Guarantor shall take, or shall refrain from taking, as the case
may be, each action that is necessary to be taken or not taken, as the case may
be, so that no Default or Event of Default is caused by the failure to take such
action or to refrain from taking such action by such Guarantor or any of its
Subsidiaries.
SECTION 4. THE GUARANTY. The Guarantors hereby irrevocably,
unconditionally and jointly and severally guarantee the full and punctual
payment (whether at stated maturity, upon acceleration or otherwise) of all
amounts now or hereafter payable by the Lessee under the Lease Agreement, the
Agency Agreement, and the other Operative Documents (all of the foregoing
obligations being referred to collectively as the "Guaranteed Obligations").
Without limiting the generality of the foregoing, each Guarantor's liability
shall extend to all amounts which constitute part of the Guaranteed Obligations
owed by the Lessee to the Lessor under the Lease Agreement, the Agency
Agreement, and the other Operative Documents but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving the Lessee. Upon failure by the
Lessee to pay punctually any such amount, each of the Guarantors agrees that it
shall forthwith on demand pay the amount not so paid at the place and in the
manner specified in Section 4(f) of the Lease Agreement.
SECTION 5. GUARANTY UNCONDITIONAL. The obligations of the
Guarantors hereunder shall be unconditional and absolute and, without limiting
the generality of the foregoing, shall not be released, discharged or otherwise
affected by:
(i) any extension, renewal, settlement, compromise,
waiver or release in respect of any obligation of the Lessee under any
Operative Document, by operation of law or otherwise or any obligation
of any other guarantor of any of the Guaranteed Obligations;
(ii) any modification or amendment of or supplement to any
Operative Document;
(iii) any release, nonperfection or invalidity of any
direct or indirect security for any obligation of the Lessee under any
Operative Document;
(iv) any change in the corporate structure or ownership of
the Lessee or corporate structure or ownership of any other Guarantor
or any other guarantor of any of the Guaranteed Obligations, or any
insolvency, bankruptcy, reorganization or other similar proceeding
affecting the Lessee, or any other Guarantor or any other guarantor of
the Guaranteed Obligations, or its assets or any resulting release or
discharge of any obligation of the Lessee, or any other Guarantor or
any other guarantor of any of the Guaranteed Obligations;
(v) the existence of any claim, recoupment, setoff or
other rights which the Guarantors may have at any time against the
Lessee, any other Guarantor or any other guarantor of any of the
Guaranteed Obligations, the Lessor or any other Person, whether in
connection herewith or any unrelated transactions, provided that
nothing herein shall prevent the assertion of any such claim by
separate suit or compulsory counterclaim;
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(vi) any law, regulation, order, decree, directive or
accounting standard or requirement, (whether or not having the force of
law) or any interpretation thereof, now or hereafter in effect in any
jurisdiction, that purports to modify any of the terms of or rights of
the Lessor with respect to any Guaranteed Obligation or under any
Operative Document or this Guaranty, including without limitation any
law, regulation, order, decree or directive or interpretation thereof
that purports to require or permit the satisfaction of any Guaranteed
Obligation other than strictly in accordance with the terms of the
Operative Documents;
(vii) any invalidity or unenforceability relating to or
against the Lessee, or any other Guarantor or any other guarantor of
any of the Guaranteed Obligations, for any reason related to any
Operative Document, or any other Guaranty, or any provision of
applicable law or regulation purporting to prohibit the payment by the
Lessee, or any other Guarantor or any other guarantor of the Guaranteed
Obligations, of Basic Rent, Supplemental Rent, or any other amount
payable by the Lessee under any Operative Document; or
(viii) any other act or omission to act or delay of any kind
by the Lessee, any other Guarantor or any other guarantor of the
Guaranteed Obligations, the Lessor or any other Person or any other
circumstance whatsoever which might, but for the provisions of this
paragraph, constitute a legal or equitable discharge of the Guarantors'
obligations hereunder.
SECTION 6. DISCHARGE ONLY UPON PAYMENT IN FULL; REINSTATEMENT
IN CERTAIN CIRCUMSTANCES. The Guarantors' obligations hereunder shall remain in
full force and effect until all Guaranteed Obligations shall have been paid in
full and the Commitment under the Lease Agreement shall have terminated or
expired. If at any time any payment of Basic Rent, Supplemental Rent, or any
other amount payable by the Lessee under any Operative Document is rescinded or
must be otherwise restored or returned upon the insolvency, bankruptcy or
reorganization of the Lessee or otherwise, the Guarantors' obligations hereunder
with respect to such payment shall be reinstated as though such payment had been
due but not made at such time.
SECTION 7. WAIVER OF NOTICE BY THE GUARANTORS. The Guarantors
irrevocably waive acceptance hereof, presentment, demand, protest and, to the
fullest extent permitted by law, any notice not provided for herein, as well as
any requirement that at any time any action be taken by any Person against the
Lessee, any other Guarantor or any other guarantor of the Guaranteed
Obligations, or any other Person.
SECTION 8. STAY OF ACCELERATION. If acceleration of the time for
payment of any amount payable by the Lessee under any Operative Document is
stayed upon the insolvency, bankruptcy or reorganization of the Lessee, all such
amounts otherwise subject to acceleration under the Operative Documents shall
nonetheless be payable by the Guarantors hereunder forthwith on demand by the
Lessor.
SECTION 9. NOTICES. All notices, requests and other
communications to any party hereunder shall be given or made by telecopier or
other writing and telecopied or mailed or
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156
delivered to the intended recipient at its address or telecopier number set
forth on the signature pages hereof or such other address or telecopy number as
such party may hereafter specify for such purpose by notice to the Lessor in
accordance with the provisions of Section 22 of the Lease Agreement. Except as
otherwise provided in this Guaranty, all such communications shall be deemed to
have been duly given when transmitted by telecopier, or personally delivered or,
in the case of a mailed notice, 3 Business Days after such communication is
deposited in the mails with first class postage prepaid, in each case given or
addressed as aforesaid.
SECTION 10. NO WAIVERS. No failure or delay by the Lessor in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies provided in this Guaranty and the other Operative
Documents shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 11. SUCCESSORS AND ASSIGNS. This Guaranty is for the
benefit of the Lessor and its respective successors and assigns and in the event
of an assignment of any amounts payable under the Lease Agreement or the other
Operative Documents, the rights hereunder, to the extent applicable to the
indebtedness so assigned, may be transferred with such indebtedness. This
Guaranty may not be assigned by the Guarantors without the prior written consent
of the Lessor, and shall be binding upon the Guarantors and their respective
successors and permitted assigns.
SECTION 12. CHANGES IN WRITING. Neither this Guaranty nor any
provision hereof may be changed, waived, discharged or terminated orally, but
only in writing signed by the Guarantors and the Lessor.
SECTION 13. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF
JURY TRIAL. THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAW THEREOF. EACH OF THE GUARANTORS AND THE ADMINISTRATIVE AGENT HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 14. CONSENT TO JURISDICTION. (a) EACH GUARANTOR HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE OR FEDERAL COURT
SITTING IN NEW YORK CITY AND ANY APPELLATE COURT FROM ANY THEREOF IN ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY, AND EACH GUARANTOR
HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR IN SUCH
FEDERAL COURT. EACH GUARANTOR HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
IT MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH ACTION OR PROCEEDING. EACH GUARANTOR HEREBY IRREVOCABLY
APPOINTS CT CORPORATION SYSTEM (THE "PROCESS AGENT"), WITH AN OFFICE ON THE
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157
DATE HEREOF AT 0000 XXXXXXXX, XXX XXXX, XXX XXXX, XXXXXX XXXXXX, AS ITS AGENT TO
RECEIVE ON BEHALF OF SUCH GUARANTOR AND ITS PROPERTY SERVICE OF COPIES OF THE
SUMMONS AND COMPLAINT AND ANY OTHER PROCESS WHICH MAY BE SERVED IN ANY SUCH
ACTION OR PROCEEDING. SUCH SERVICE MAY BE MADE BY MAILING OR DELIVERING A COPY
OF SUCH PROCESS TO EACH SUCH GUARANTOR IN CARE OF THE PROCESS AGENT AT THE
PROCESS AGENT'S ABOVE ADDRESS, AND EACH GUARANTOR HEREBY IRREVOCABLY AUTHORIZES
AND DIRECTS THE PROCESS AGENT TO ACCEPT SUCH SERVICE ON ITS BEHALF. AS AN
ALTERNATIVE METHOD OF SERVICE, EACH GUARANTOR ALSO IRREVOCABLY CONSENTS TO THE
SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING
OF COPIES OF SUCH PROCESS TO THE GUARANTOR AT ITS ADDRESS SPECIFIED ON THE
SIGNATURE PAGE HEREOF. EACH GUARANTOR AGREES THAT A FINAL JUDGMENT IN ANY SUCH
ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
(b) NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT OF THE LESSOR
TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT
OF THE LESSOR TO BRING ANY ACTION OR PROCEEDING AGAINST ANY GUARANTOR OR ITS
PROPERTY IN THE COURTS OF ANY OTHER JURISDICTIONS.
SECTION 15. TAXES, ETC. All payments required to be made by the
Guarantors hereunder shall be made without setoff or counterclaim and free and
clear of and without deduction or withholding for or on account of, any present
or future taxes, levies, imposts, duties or other charges of whatsoever nature
imposed by any Governmental Authority pursuant and subject to the provisions of
Section 4(e) of the Lease Agreement, the terms of which are incorporated herein
by reference as to the Guarantors as fully as if set forth herein, and for such
purposes, the rights and obligations of the Lessee under such Section shall
devolve to the Guarantors as to payments required to be made by the Guarantors
hereunder.
SECTION 16. ADDITIONAL GUARANTORS. Section 30(aa) of the Lease
Agreement provides that certain Subsidiaries which are not Guarantors must
become Guarantors, by, among other things, executing and delivering to the
Lessor a counterpart of this Guaranty and the Contribution Agreement. Any
Subsidiary which executes and delivers to the Lessor a counterpart of this
Guaranty and the Contribution Agreement shall be a Guarantor for all purposes
hereunder.
SECTION 17. SUBROGATION. Each Guarantor hereby agrees that it
will not exercise any rights which it may acquire by way of subrogation under
this Guaranty, by any payment made hereunder or otherwise, unless and until all
of the Guaranteed Obligations shall have been paid in full. If any amount shall
be paid to the Guarantor on account of such subrogation rights at any time when
all of the Guaranteed Obligations shall not have been paid in full, such amount
shall be held in trust for the benefit of the Lessor and shall forthwith be paid
to the Lessor to be credited and applied upon the Guaranteed Obligations,
whether matured or unmatured, in accordance with the terms of the Lease
Agreement.
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158
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly
executed, under seal, by its respective authorized officer as of the date first
above written.
XXXXXXXX'X XXXX-X-XXXX BAKERY, INC.,
a North Carolina corporation
(SEAL)
By:
-----------------------------------------
Name:
---------------------------------
Title:
--------------------------------
Address:
0000 Xxx Xxxxxx
Xxxxxxx-Xxxxx, Xxxxx Xxxxxxxx 00000
Attention:
Telecopier number:
Confirmation number:
KRISPY KREME DISTRIBUTING COMPANY,
a North Carolina corporation
(SEAL)
By:
-----------------------------------------
Name:
---------------------------------
Title:
--------------------------------
Address:
0000 Xxx Xxxxxx
Xxxxxxx-Xxxxx, Xxxxx Xxxxxxxx 00000
Attention:
Telecopier number:
Confirmation number:
7
159
KRISPY KREME INVESTMENT MANAGEMENT CORPORATION,
a Delaware corporation
(SEAL)
By:
-----------------------------------------
Name:
---------------------------------
Title:
--------------------------------
Address:
000 Xxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention:
Telecopier number:
Confirmation number:
KRISPY KREME COFFEE COMPANY, LLC,
a North Carolina limited liability company
(SEAL)
By:
-----------------------------------------
Name:
---------------------------------
Title:
--------------------------------
Address:
000 Xxxxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000
Attention:
Telecopier number:
Confirmation number:
8
160
HD CAPITAL CORPORATION,
a Delaware corporation
(SEAL)
By:
-----------------------------------------
Name:
---------------------------------
Title:
--------------------------------
Address:
000 Xxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention:
Telecopier number:
Confirmation number:
HDN DEVELOPMENT CORPORATION,
a Kentucky corporation
(SEAL)
By:
-----------------------------------------
Name:
---------------------------------
Title:
--------------------------------
Address:
000 Xxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention:
Telecopier number:
Confirmation number:
9
161
EXHIBIT E
Form of Contribution Agreement
THIS CONTRIBUTION AGREEMENT (this "Agreement") is entered into as of
April 26, 2001, by and among KRISPY KREME DOUGHNUT CORPORATION, a North Carolina
corporation (the "Lessee"), KRISPY KREME DOUGHNUTS, INC., a North Carolina
corporation (the "Parent Guarantor") and each of the undersigned entities
respectively organized under the laws of the states set forth on the signature
pages below their names (collectively, the "Subsidiary Guarantors", which term
shall include any Subsidiary of the Parent Guarantor which becomes a Guarantor
pursuant to the last paragraph hereof, Section 15 of the Subsidiary Guaranty
referred to below and Section 30(aa) of the Lease Agreement referred to below)
(the Parent Guarantor and the Subsidiary Guarantors being hereinafter referred
to collectively as the "Guarantors"). The Lessee and each of the Guarantors are
sometimes hereinafter referred to individually as a "Contributing Party" and
collectively as the "Contributing Parties".
W I T N E S S E T H:
WHEREAS, pursuant to that certain Lease Agreement, dated as of even
date herewith between the Lessee and Wachovia Capital Investments, Inc. (such
agreement, as the same may from time to time be amended, modified, restated,
extended, or supplemented being hereinafter referred to as the "Lease
Agreement"; capitalized terms used herein shall have the meanings ascribed
thereto in the Lease Agreement), the Lessor has agreed to make Advances to the
Lessee;
WHEREAS, it is required by Section 28(a)(xiii) and Section 28(a)(xiv)
of the Lease Agreement that (i) the Parent Guarantor execute and deliver that
certain Guaranty, dated as of even date herewith (such agreement, as the same
may from time to time be amended, modified, restated, extended or supplemented
being hereinafter referred to as the "Parent Guaranty"), and (ii) each
Subsidiary Guarantor execute and deliver that certain Guaranty, dated as of even
date herewith (such agreement, as the same may from time to time be amended,
modified, restated, extended, or supplemented being hereinafter referred to as
the "Subsidiary Guaranty"), pursuant to which, among other things, the
Guarantors have jointly and severally agreed to guarantee the payment and
performance of all present and future amounts payable by the Lessee under the
Operative Documents (the "Guaranteed Obligations");
WHEREAS, the Parent Guarantor is the parent of the Lessee, and each
Subsidiary Guarantor is a direct or indirect subsidiary of the Parent, and the
Parent Guarantor and each Subsidiary Guarantor are engaged in businesses related
to those of the Lessee and the Parent Guarantor (as applicable), and each of the
Guarantors will derive direct or indirect economic benefit from the
effectiveness and existence of the Lease Agreement and the other Operative
Documents; and
WHEREAS, it is required by Section 28(a)(xv) of the Lease Agreement
that each of the Guarantors execute and deliver this Agreement;
162
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, and to induce the Parent Guarantor to enter into the
Parent Guaranty and each Subsidiary Guarantor to enter into the Subsidiary
Guaranty, the parties hereto agree as follows:
To the extent that any Guarantor shall, under the Parent Guaranty or
the Subsidiary Guaranty, make a payment (a "Guarantor Payment") of a portion of
the Guaranteed Obligations, then, without limiting its rights of subrogation,
against the Lessee, such Guarantor shall be entitled to contribution and
indemnification from, and be reimbursed by, each of the other Contributing
Parties in an amount, for each such Contributing Party other than the Lessee,
equal to a fraction of such Guarantor Payment, the numerator of which fraction
is such Contributing Party's Allocable Amount (as defined below) and the
denominator of which is the sum of the Allocable Amounts of all of the
Contributing Parties.
As of any date of determination, the "Allocable Amount" of each
Contributing Party shall be equal to the maximum amount of liability which could
be asserted against such Contributing Party hereunder with respect to the
applicable Guarantor Payment without (i) rendering such Contributing Party
"insolvent" within the meaning of Section 101(31) of the U.S. Bankruptcy Code
(the "Bankruptcy Code") or Section 2 of either the Uniform Fraudulent Transfer
Act (the "UFTA") or the Uniform Fraudulent Conveyance Act (the "UFCA"), (ii)
leaving such Contributing Party with unreasonably small capital, within the
meaning of Section 548 of the Bankruptcy Code or Section 4 of the UFTA or
Section 5 of the UFCA, or (iii) leaving such Contributing Party unable to pay
its debts as they become due within the meaning of Section 548 of the Bankruptcy
Code or Section 4 of the UFTA or Section 6 of the UFCA.
This Agreement is intended only to define the relative rights of the
Contributing Parties, and nothing set forth in this Agreement is intended to or
shall impair the obligations of any of the Guarantors, jointly and severally, to
pay any amounts, as and when the same shall become due and payable, in
accordance with the terms of the Parent Guaranty or the Subsidiary Guaranty, as
applicable.
The parties hereto acknowledge that the rights of contribution and
indemnification hereunder shall constitute assets in favor of each Guarantor to
which such contribution and indemnification is owing.
This Agreement shall become effective upon its execution by each of the
Contributing Parties and shall continue in full force and effect and may not be
terminated or otherwise revoked by any Contributing Party until all of the
Guaranteed Obligations shall have been indefeasibly paid in full (in lawful
money of the United States of America) and discharged and the Lease Agreement
and financing arrangements evidenced and governed by the Lease Agreement shall
have been terminated. Each Contributing Party agrees that if, notwithstanding
the foregoing, such Contributing Party shall have any right under applicable law
to terminate or revoke this Agreement, and such Contributing Party shall attempt
to exercise such right, then such termination or revocation shall not be
effective until a written notice of such revocation or termination, specifically
referring hereto and signed by such Contributing Party, is actually received by
each of the other Contributing Parties and by the Lessor at its notice address
set forth in the Lease Agreement. Such notice shall not affect the right or
power of any Contributing Party to enforce rights arising prior to receipt of
such written notice by each of the other
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163
Contributing Parties and the Lessor. If the Lessor makes additional Advances to
the Lessee or takes other action giving rise to additional Guaranteed
Obligations after any Contributing Party has exercised any right to terminate or
revoke this Agreement but before the Lessor receives such written notice, the
rights of each other Contributing Party to contribution and indemnification
hereunder in connection with any Guarantor Payments made with respect to such
Advances or Guaranteed Obligations shall be the same as if such termination or
revocation had not occurred.
Section 30(aa) of the Lease Agreement provides that certain
Subsidiaries must become Guarantors, by, among other things, executing and
delivering to the Lessor a counterpart of the Subsidiary Guaranty and of this
Contribution Agreement. Any Subsidiary which executes and delivers to the Lessor
a counterpart of the Subsidiary Guaranty and of this Contribution Agreement
shall be a Subsidiary Guarantor for all purposes hereunder.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without regard to principles of conflicts of
law thereof.
IN WITNESS WHEREOF, each Contributing Party has executed and delivered
this Agreement, under seal, as of the date first above written.
PARENT:
KRISPY KREME DOUGHNUTS, INC.,
a North Carolina corporation
(SEAL)
By:
--------------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
Address:
000 Xxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx-Xxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxxxxxxx
Secretary and Senior Vice President
Telecopier: (000) 000-0000
Confirmation: (000) 000-0000
3
164
LESSEE:
KRISPY KREME DOUGHNUT CORPORATION,
a North Carolina corporation
(SEAL)
By:
--------------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
Address:
000 Xxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx-Xxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxxxxxxx
Secretary and Senior Vice President
Telecopier: (000) 000-0000
Confirmation: (000) 000-0000
SUBSIDIARY GUARANTORS:
XXXXXXXX'X XXXX-X-XXXX BAKERY, INC.,
a North Carolina corporation
(SEAL)
By:
--------------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
Address:
0000 Xxx Xxxxxx
Xxxxxxx-Xxxxx, Xxxxx Xxxxxxxx 00000
Attention:
Telecopier number:
Confirmation number:
4
165
KRISPY KREME DISTRIBUTING COMPANY,
a North Carolina corporation
(SEAL)
By:
--------------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
Address:
0000 Xxx Xxxxxx
Xxxxxxx-Xxxxx, Xxxxx Xxxxxxxx 00000
Attention:
Telecopier number:
Confirmation number:
KRISPY KREME INVESTMENT
MANAGEMENT CORPORATION,
a Delaware corporation
(SEAL)
By:
--------------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
Address:
000 Xxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention:
Telecopier number:
Confirmation number:
5
166
KRISPY KREME COFFEE COMPANY, LLC,
a North Carolina limited liability company
(SEAL)
By:
--------------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
Address:
000 Xxxxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000
Attention:
Telecopier number:
Confirmation number:
HD CAPITAL CORPORATION,
a Delaware corporation
(SEAL)
By:
--------------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
Address:
000 Xxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention:
Telecopier number:
Confirmation number:
6
167
HDN DEVELOPMENT CORPORATION,
a Kentucky corporation
(SEAL)
By:
--------------------------------------------------
Name:
------------------------------------------
Title:
-----------------------------------------
Address:
000 Xxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
Attention:
Telecopier number:
Confirmation number:
7
168
EXHIBIT F
Form of Parent Guaranty
THIS PARENT GUARANTY (this "Guaranty") is made as of April 26, 2001, by
KRISPY KREME DOUGHNUTS, INC., a North Carolina corporation (the "Guarantor"), in
favor of the Lessor under the Lease Agreement (defined below);
W I T N E S S E T H:
WHEREAS, Krispy Kreme Doughnut Corporation, a North Carolina
corporation (the "Lessee"), and Wachovia Capital Investments, Inc., a Georgia
corporation (the "Lessor"), have entered into a certain Lease Agreement dated as
of April 26, 2001 (as it may be amended, restated, supplemented, or modified
from time to time, the "Lease Agreement"), providing, subject to the terms and
conditions thereof, for Advances to be made by the Lessor to the Lessee;
WHEREAS, it is required by Section 28(a)(xiv) of the Lease Agreement
that the Guarantor execute and deliver this Guaranty whereby the Guarantor shall
guarantee the payment when due of all amounts that shall be at any time payable
by the Lessee under the Lease Agreement, the Agency Agreement and the other
Operative Documents to which the Lessee is a party; and
WHEREAS, in consideration of the financial and other support that the
Lessee has provided, and such financial and other support as the Lessee may in
the future provide, to the Guarantor, whether directly or indirectly, and in
order to induce the Lessor to enter into the Lease Agreement and the other
Operative Documents to which it is a party, the Guarantor is willing to
guarantee the obligations of the Lessee under the Lease Agreement, the Agency
Agreement, and the other Operative Documents to which the Lessee is a party;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. DEFINITIONS. Terms defined in the Lease Agreement and
not otherwise defined herein have, as used herein, the respective meanings
provided for therein.
SECTION 2. REPRESENTATIONS AND WARRANTIES. The Guarantor hereby
represents and warrants to the Lessor that:
(a) it is (i) duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (ii) has the
corporate power and authority and the legal right to own and operate its
property, to lease the property it operates and to conduct the business in which
it is currently engaged, and (iii) has all governmental licenses, permits,
authorizations, consents and approvals necessary to own and operate its
properties and its business as now conducted;
169
(b) it has the corporate power and authority and the legal right
to execute and deliver, and to perform its obligations under, this Guaranty, and
has taken all necessary corporate or other action to authorize its execution,
delivery and performance of this Guaranty;
(c) this Guaranty has been duly executed and delivered to the
Lessor by the Guarantor and constitutes the legal, valid and binding obligation
of the Guarantor enforceable in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to or affecting the enforcement of
creditors' rights generally and general equitable principles;
(d) the execution, delivery and performance of this Guaranty will
not violate or constitute a default under any provision of any Governmental
Requirement or agreement, instrument or contractual obligation applicable to or
binding on the Guarantor or any of its Property and will not result in or
require the creation or imposition of any Lien on any of the Properties or
revenues of the Guarantor pursuant to any Governmental Requirement or any
agreement, instrument or contractual obligation applicable to or binding on the
Guarantor or any of its Property;
(e) no consent or authorization of, filing with, or other act by
or in respect of, any arbitrator or Governmental Authority and no consent of any
other Person (including, without limitation, any stockholder or creditor of the
Guarantor) is required in connection with the execution, delivery, performance,
validity or enforceability of this Guaranty;
(f) it, in connection with entering into this Guaranty, has
performed its own independent investigation of the Lessee and the risks
involved, is not relying on any information or representation furnished or given
by the Lessee and has reviewed the Operative Documents and acknowledges that the
Operative Documents are satisfactory to it in form and substance;
The Guarantor agrees that the foregoing representations and warranties
shall be deemed to have been made by the Guarantor on the date of each Advance
under the Lease Agreement on and as of such date of each such Advance as though
made hereunder on and as of such date.
The Guarantor incorporates herein by reference as fully as if set forth
herein all of the representations and warranties contained in Article 29 of the
Lease Agreement (which representations and warranties shall be deemed to have
been restated by the Guarantor on the date hereof and upon each Advance under
the Lease Agreement); provided, however, that each reference in each such
representation and warranty to the Lessee shall be deemed a reference to the
Guarantor and each reference to a Subsidiary shall be deemed a reference to a
Subsidiary of the Guarantor.
SECTION 3. COVENANTS. The Guarantor covenants that, so long as
the Lessor has any Commitment outstanding under the Lease Agreement or any
amount payable by the Lessee under the Lease Agreement or any other Operative
Document shall remain unpaid, the Guarantor will fully comply (and cause full
compliance) with those covenants set forth in Article 30 of the Lease Agreement
pertaining to the Lessee and the Guarantor incorporates herein by reference as
fully as if set forth herein all of such covenants; provided, however, that each
reference in each such covenant to the Lessee shall be deemed a reference to the
Guarantor. The Guarantor shall
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170
take, or refrain from taking, as the case may be, each action that is necessary
to be taken or not taken, as the case may be, so that no Default or Event of
Default is caused by the failure to take such action or to refrain from taking
such action by such Guarantor or any of its Subsidiaries.
SECTION 4. THE GUARANTY. The Guarantor hereby irrevocably and
unconditionally guarantees the full and punctual payment (whether at stated
maturity, upon acceleration or otherwise) of all amounts now or hereafter
payable by the Lessee under the Lease Agreement, the Agency Agreement, and the
other Operative Documents (all of the foregoing obligations being referred to
collectively as the "Guaranteed Obligations"). Without limiting the generality
of the foregoing, the Guarantor's liability shall extend to all amounts which
constitute part of the Guaranteed Obligations owed by the Lessee to the Lessor
under the Lease Agreement, the Agency Agreement, and the other Operative
Documents but for the fact that they are unenforceable or not allowable due to
the existence of a bankruptcy, reorganization or similar proceeding involving
the Lessee. Upon failure by the Lessee to pay punctually any such amount, the
Guarantor agrees that it shall forthwith on demand pay the amount not so paid at
the place and in the manner specified in Section 4(f) of the Lease Agreement.
SECTION 5. GUARANTY UNCONDITIONAL. The obligations of the
Guarantor hereunder shall be unconditional and absolute and, without limiting
the generality of the foregoing, shall not be released, discharged or otherwise
affected by:
(i) any extension, renewal, settlement,
compromise, waiver or release in respect of any obligation of the
Lessee under any Operative Document, by operation of law or otherwise
or any obligation of any other Guarantor of any of the Guaranteed
Obligations;
(ii) any modification or amendment of or
supplement to any Operative Document;
(iii) any release, nonperfection or invalidity of
any direct or indirect security for any obligation of the Lessee under
any Operative Document;
(iv) any change in the corporate existence,
structure or ownership of the Lessee or any other Guarantor of any of
the Guaranteed Obligations, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting the Lessee, or any
other Guarantor of the Guaranteed Obligations, or its assets or any
resulting release or discharge of any obligation of the Lessee, or any
other Guarantor of any of the Guaranteed Obligations;
(v) the existence of any claim, recoupment,
setoff or other rights which the Guarantor may have at any time against
the Lessee, any other Guarantor of any of the Guaranteed Obligations,
the Lessor or any other Person, whether in connection herewith or any
unrelated transactions, provided that nothing herein shall prevent the
assertion of any such claim by separate suit or compulsory
counterclaim;
(vi) any law, regulation, order, decree,
directive or accounting standard or requirement, (whether or not having
the force of law) or any interpretation thereof, now or hereafter in
effect in any jurisdiction, that purports to modify any of the terms of
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171
or rights of the Lessor with respect to any Guaranteed Obligation or
under any Operative Document or this Guaranty, including without
limitation any law, regulation, order, decree or directive or
interpretation thereof that purports to require or permit the
satisfaction of any Guaranteed Obligation other than strictly in
accordance with the terms of the Operative Documents;
(vii) any invalidity or unenforceability relating
to or against the Lessee, or any other Guarantor of any of the
Guaranteed Obligations, for any reason related to any Operative
Document, or any other Guaranty, or any Governmental Requirement
purporting to prohibit the payment by the Lessee, or any other
Guarantor of the Guaranteed Obligations, of Basic Rent, Supplemental
Rent, or any other amount payable by the Lessee under any Operative
Document; or
(viii) any other act or omission to act or delay of
any kind by the Lessee, any other Guarantor of the Guaranteed
Obligations, the Lessor or any other Person or any other circumstance
whatsoever which might, but for the provisions of this paragraph,
constitute a legal or equitable discharge of the Guarantor's
obligations hereunder, including without limitation, any failure,
omission, delay or inability on the part of the Lessor to enforce,
assert or exercise any right, power or remedy conferred on the Lessor
under the Lease Agreement or any other Operative Document.
SECTION 6. DISCHARGE ONLY UPON PAYMENT IN FULL; REINSTATEMENT IN
CERTAIN CIRCUMSTANCES. The Guarantor's obligations hereunder shall remain in
full force and effect until all Guaranteed Obligations shall have been paid in
full and the Commitment under the Lease Agreement shall have terminated or
expired. If at any time any payment of or any other amount payable by the Lessee
under any Operative Document is rescinded or must be otherwise restored or
returned upon the insolvency, bankruptcy or reorganization of the Lessee or
otherwise, the Guarantor's obligations hereunder with respect to such payment
shall be reinstated as though such payment had been due but not made at such
time.
SECTION 7. WAIVER OF NOTICE BY THE GUARANTOR. The Guarantor
irrevocably waives acceptance hereof, presentment, demand, protest and, to the
fullest extent permitted by law, any notice not provided for herein, as well as
any requirement that at any time any action be taken by any Person against the
Lessee, any other Guarantor of the Guaranteed Obligations, or any other Person.
SECTION 8. STAY OF ACCELERATION. If acceleration of the time for
payment of any amount payable by the Lessee under any Operative Document is
stayed upon the insolvency, bankruptcy or reorganization of the Lessee, all such
amounts otherwise subject to acceleration under the Operative Documents shall
nonetheless be payable by the Guarantor hereunder forthwith on demand by the
Lessor.
SECTION 9. NOTICES. All notices, requests and other
communications to any party hereunder shall be given or made by telecopier or
other writing and telecopied or mailed or delivered to the intended recipient at
its address or telecopier number set forth on the signature pages hereof or such
other address or telecopy number as such party may hereafter specify for such
purpose by notice to the Lessor in accordance with the provisions of Section 22
of the
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Lease Agreement. Except as otherwise provided in this Guaranty, all such
communications shall be deemed to have been duly given when transmitted by
telecopier, or personally delivered or, in the case of a mailed notice, 3
Business Days after such communication is deposited in the mails with first
class postage prepaid, in each case given or addressed as aforesaid.
SECTION 10. NO WAIVERS. No failure or delay by the Lessor in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies provided in this Guaranty and the other Operative
Documents shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 11. SUCCESSORS AND ASSIGNS. This Guaranty is for the
benefit of the Lessor and its respective successors and assigns and in the event
of an assignment of any amounts payable under the Lease Agreement or the other
Operative Documents, the rights hereunder, to the extent applicable to the
indebtedness so assigned, may be transferred with such indebtedness. This
Guaranty may not be assigned by the Guarantor without the prior written consent
of the Lessor, and shall be binding upon the Guarantor and its successors and
permitted assigns.
SECTION 12. CHANGES IN WRITING. Neither this Guaranty nor any
provision hereof may be changed, waived, discharged or terminated orally, but
only in writing signed by the Guarantor and the Lessor.
SECTION 13. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF
JURY TRIAL. THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAW THEREOF. THE GUARANTOR HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL
BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY OR
THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 14. CONSENT TO JURISDICTION. (a) THE GUARANTOR HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE OR FEDERAL COURT
SITTING IN NEW YORK CITY AND ANY APPELLATE COURT FROM ANY THEREOF IN ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY, AND THE GUARANTOR
HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR IN SUCH
FEDERAL COURT. THE GUARANTOR HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT
MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE
OF SUCH ACTION OR PROCEEDING. THE GUARANTOR HEREBY IRREVOCABLY APPOINTS CT
CORPORATION SYSTEM (THE "PROCESS AGENT"), WITH AN OFFICE ON THE DATE HEREOF AT
0000 XXXXXXXX, XXX XXXX, XXX XXXX, XXXXXX XXXXXX, AS ITS AGENT TO RECEIVE ON
BEHALF OF SUCH GUARANTOR AND ITS PROPERTY SERVICE OF COPIES OF THE SUMMONS AND
COMPLAINT AND ANY OTHER PROCESS WHICH MAY BE SERVED IN ANY SUCH ACTION OR
PROCEEDING. SUCH SERVICE MAY BE MADE BY MAILING OR DELIVERING A COPY OF SUCH
PROCESS
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TO THE GUARANTOR IN CARE OF THE PROCESS AGENT AT THE PROCESS AGENT'S ABOVE
ADDRESS, AND THE GUARANTOR HEREBY IRREVOCABLY AUTHORIZES AND DIRECTS THE PROCESS
AGENT TO ACCEPT SUCH SERVICE ON ITS BEHALF. AS AN ALTERNATIVE METHOD OF SERVICE,
THE GUARANTOR ALSO IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN
ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO THE
GUARANTOR AT ITS ADDRESS SPECIFIED ON THE SIGNATURE PAGE HEREOF. THE GUARANTOR
AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR
IN ANY OTHER MANNER PROVIDED BY LAW.
(b) NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT OF THE LESSOR
TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT
OF THE LESSOR TO BRING ANY ACTION OR PROCEEDING AGAINST THE GUARANTOR OR ITS
PROPERTY IN THE COURTS OF ANY OTHER JURISDICTIONS.
SECTION 15. TAXES, ETC. All payments required to be made by the
Guarantor hereunder shall be made without setoff or counterclaim and free and
clear of and without deduction or withholding for or on account of, any present
or future taxes, levies, imposts, duties or other charges of whatsoever nature
imposed by any Governmental Authority as required pursuant to Section 4(e) of
the Lease Agreement.
SECTION 16. OTHER WAIVERS BY THE GUARANTOR. The Guarantor hereby
expressly waives, renounces, and agrees not to assert, any right, claim or cause
of action, including, without limitation, a claim for reimbursement,
subrogation, indemnification or otherwise, against the Lessee arising out of or
by reason of this Guaranty or the obligations of any other Guarantor, including,
without limitation, the payment or securing or purchasing of any of the
Guaranteed Obligations by any other Guarantor. The waiver, renunciation and
agreement contained in the immediately preceding sentence is for the benefit of
the Lessor and also for the benefit of the Lessee who may assert the benefits
thereof as a third-party beneficiary, and the Guarantor may be released from
such waiver, renunciation and agreement only by the execution and delivery, by
the Lessor and the Lessee, of an instrument expressly releasing the Guarantor
therefrom.
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IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly
executed, under seal, by its authorized officer as of the date first above
written.
KRISPY KREME DOUGHNUTS, INC.,
a North Carolina corporation
(SEAL)
By:
-----------------------------------------------
Title:
-----------------------------------------
000 Xxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx-Xxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xx. Xxxxx Xxxxxxxxxx
Secretary and Senior Vice President
Telecopier: (000) 000-0000
Confirmation: (000) 000-0000
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