EXHIBIT 10.24
SECOND AMENDED AND RESTATED TAX MATTERS AGREEMENT
THIS SECOND AMENDED AND RESTATED TAX MATTERS AGREEMENT, dated as of June
29, 2004 (as supplemented, amended, modified, restated or replaced from time to
time this "AGREEMENT"), is made between ARABICA FUNDING, INC., a Delaware
corporation ("ARABICA") and CARIBOU COFFEE COMPANY, INC. a Minnesota corporation
(the "COMPANY").
PRELIMINARY STATEMENTS
A. On December 27, 2000, the Company sold certain assets to Arabica
pursuant to that certain Asset Purchase Agreement dated as of such date between
the Company and Arabica, as amended and restated by that certain Amended and
Restated Asset Purchase Agreement, dated as of April 25, 2001 (the "ORIGINAL
ASSET PURCHASE AGREEMENT").
B. Upon the completion of such purchase, Arabica and the Company entered
into (i) a Lease and License Financing and Purchase Option Agreement, dated as
of December 27, 2000, as amended and restated by that certain Amended and
Restated Lease and License Financing and Purchase Option Agreement, dated as of
April 25, 2001, pursuant to which Arabica leased such assets to the Company,
(the "ORIGINAL LEASE") (ii) a Supplemental Agreement, dated as of December 27,
2000, as amended and restated by that certain Amended and Restated Supplemental
Agreement, dated as of April 25, 2001, pursuant to which the Company has agreed
to execute certain tasks related to the Equipment (the "ORIGINAL SUPPLEMENTAL
AGREEMENT"), and (iii) a Tax Matters Agreement, dated as of December 27, 2000,
as amended and restated by that certain Amended and Restated Tax Matters
Agreement dated April 25, 2001 (the "ORIGINAL AGREEMENT"), to address certain
tax issues. In connection therewith, the Company issued to Arabica a Put Option
Letter, dated December 27, 2000, as amended and restated by that certain Amended
and Restated Put Option Letter (the "ORIGINAL PUT OPTION LETTER") and Arabica
issued to the Company a Call Option Letter (the "ORIGINAL CALL OPTION LETTER"),
dated December 27, 2000, as amended and restated by that certain Amended and
Restated Call Option Letter.
C. Arabica and the Company have entered into that certain Second Amended
and Restated Asset Purchase Agreement, dated the date hereof (the "AMENDED ASSET
PURCHASE AGREEMENT"), pursuant to which the Company may from time to time sell
certain assets to Arabica.
D. Arabica and the Company have entered into that certain Second Amended
and Restated Lease and License Financing and Purchase Option Agreement, dated
the date hereof (the "AMENDED LEASE"), which Amended Lease amends and restates
the Original Lease. In connection therewith, Arabica and the Company have (i)
entered into a Second Amended and Restated Supplemental Agreement, dated the
date hereof (the "AMENDED SUPPLEMENTAL AGREEMENT"), which Amended Supplemental
Agreement amends and restates the Original Supplemental Agreement, (ii) entered
into a Second Amended and Restated Put Option Letter, dated the date hereof (the
"AMENDED PUT OPTION LETTER"), which Second Amended Put Option Letter amends and
restates the Original Put Option Letter, and (iii) entered into a Amended and
Restated Call Option Letter, dated the date hereof (the "AMENDED CALL OPTION
LETTER"), which Amended Call Option Letter amends and restates the Original Call
Option Letter.
E. Arabica and the Company are entering into this Agreement to address
certain U.S. federal and state tax issues arising from the transactions
contemplated by the Amended Asset Purchase Agreement, the Amended Lease, the
Amended Supplemental Agreement, the Amended Put Option Letter and the Amended
Call Option Letter (said transactions being herein referred to as the "OVERALL
TRANSACTION" and said instruments, agreements and letters being herein referred
to as the "TRANSACTION DOCUMENTS"), and to confirm the manner in which they will
treat and report, for U.S. federal and state tax purposes, the Overall
Transaction and the Transaction Documents.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements hereinafter set forth and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
SECTION 1. FEDERAL AND STATE TAX CONSEQUENCES(a) . (a) It is expressly
agreed that the parties have entered into the Overall Transaction and the
Transaction Documents intending such agreements to accomplish a single
transaction, and intending such transaction to be characterized as a mere
financing for all income tax purposes and intending for the Company to be
considered the owner of the Assets for such tax purposes. Arabica and the
Company agree that, for all income tax purposes only, the Acquisition Cost to be
paid by the Company (whether under Section 1 of Schedule 6(a) to the Amended
Lease, pursuant to the Amended Put Option Letter, pursuant to the Amended Call
Option Letter, or otherwise) constitutes a payment of principal and the Rental
Rate to be paid by the Company (whether under Section 1 of Schedule 6(a) to the
Amended Lease, Section 6 of the Amended Lease, or otherwise) constitutes a
payment of interest.
(b) The Company and Arabica agree that the amounts to be paid by the
Company to Arabica pursuant to Section 1(a)(iv) of Schedule 6(a) to the Amended
Lease shall be adjusted pursuant to Section 1(e) of Schedule 6(a) to the Amended
Lease as necessary so that Arabica is reimbursed for the actual costs it incurs
in obtaining or causing to be obtained property insurance for the Equipment and
performing or causing to be performed Major Maintenance and Required Alterations
for the Equipment. The parties acknowledge and agree that payment of this amount
by the Company to Arabica and the payment by Arabica to the Company under the
Amended Supplemental Agreement of the same amount fully offset each other and
are to be disregarded for all income tax purposes.
(c) Arabica (and any assignee and or any person who holds a participation
interest in the Assets, the Amended Lease or any other Transaction Document) and
the Company agree to report the tax consequences of the Overall Transaction
accomplished pursuant to the Transaction Documents on their respective tax
returns (to the extent same are required to be filed) consistently and in
accordance with the intended tax treatment described in this Section 1.
SECTION 2. PERSONAL PROPERTY TAXES. Arabica and the Company hereby agree
that to the extent permitted by law (i) the Company will file all returns and
other appropriate documentation in regard to personal property taxes on the
Assets, (ii) pay all such personal
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property taxes and (iii) reimburse Arabica for any and all such personal
property taxes previously paid by Arabica.
SECTION 3. ASSIGNMENT; EVENT OF DEFAULT. The parties to this Agreement
agree that an assignment of either party's interest (i) in the Assets may not be
effected without also assigning such party's interest in each Transaction
Document to the same assignee and (ii) in any Transaction Document may not be
effected without also assigning such party's interest in the Assets and each
other Transaction Document to the same assignee. Any assignee of Arabica's
interest must be a Registered Holder; each assignee and any Person to which
Arabica grants a participation interest shall comply with each of Arabica's
agreements and covenants under the Transaction Documents, including without
limitation the agreements and covenants in Sections 1 and 2 of this Agreement. A
failure by the Company to comply with the terms of this Agreement shall
constitute an event for which Arabica may declare an Event of Default under, and
subject to the conditions of, Section 23(d) of the Amended Lease.
SECTION 4. MISCELLANEOUS. This Agreement shall be binding upon, and inure
to and for the benefit of, the parties hereto and their respective successors
and assigns. The parties hereto agree that this Agreement may not be assigned in
whole or in part without the prior written consent of the other party hereto.
The parties hereto agree that any assignment of the Amended Lease by any party
thereto must include an assignment and assumption of this Agreement. Each
communication to be made under this Agreement shall be made in writing in
accordance with the notice provisions of the Amended Lease. This Agreement shall
be governed by, and construed in accordance with, the law of the State of New
York. The parties agree that the last sentence of Section 32 of the Amended
Lease (relating to submission to jurisdiction) and the provisions of Section 34
of the Amended Lease (relating to waiver of jury trial) are incorporated by
reference into this Agreement with the same force and effect as if such
provisions were set forth herein in full.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the date first above
written.
ARABICA FUNDING, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: Vice President
CARIBOU COFFEE COMPANY, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxx
Title: Chief Financial Officer
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