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EXHIBIT 10.3
OPERATING AGREEMENT OF NEWCORNCO, LLC, DATED JULY 19, 1996,
BETWEEN EPL TECHNOLOGIES, INC. AND AGRICULTURAL INNOVATION & TRADE, INC.
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OPERATING AGREEMENT
OF
NewCornCo LLC
Dated as of July 19, 1996
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OPERATING AGREEMENT
OF
NewCornCo LLC
Dated as of July 19, 1996
TABLE OF CONTENTS
Page
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ARTICLE I - DEFINITIONS......................................................................................... 2
1.1. Act.................................................................................. 2
1.2. Additional Capital Balance........................................................... 2
1.3. Additional Capital Contributions..................................................... 2
1.4. Adjusted Basis....................................................................... 2
1.5. Affiliate............................................................................ 2
1.6. AIT Contributed Property............................................................. 3
1.7. Annual Budget and Work Plan.......................................................... 3
1.8. Annual Period........................................................................ 3
1.9. Capital Accounts..................................................................... 3
1.10. Capital Balance...................................................................... 3
1.11. Capital Contributions................................................................ 3
1.12. Carrying Value....................................................................... 3
1.13. Certificate of Formation............................................................. 4
1.14. Closing Price........................................................................ 4
1.15. Code................................................................................. 4
1.16. EPL Shares........................................................................... 4
1.17. Contributed Property................................................................. 4
1.18. Contribution Agreement............................................................... 4
1.19. Covered Transaction.................................................................. 4
1.20. Economic Risk of Loss................................................................ 5
1.21. Entity............................................................................... 5
1.22. Management Committee................................................................. 5
1.23. Majority Members..................................................................... 5
1.24. Members' Loans....................................................................... 5
1.25. Minimum Gain......................................................................... 5
1.26. Net Agreed Value..................................................................... 5
1.27. Net Cash Flow........................................................................ 5
1.28. Net Income........................................................................... 5
1.29. Net Refinancing Proceeds............................................................. 6
1.30. Net Sale Proceeds.................................................................... 6
1.31. Participation Percentage............................................................. 6
1.32. Partner Minimum Gain................................................................. 6
1.33. Partner Nonrecourse Debt............................................................. 6
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1.34. Partner Nonrecourse Deductions....................................................... 6
1.35. Person............................................................................... 6
1.36. Profit and Loss...................................................................... 6
1.37. Treasury Regulations................................................................. 7
ARTICLE II - GENERAL PROVISIONS................................................................................. 7
2.1. Formation............................................................................ 7
2.2. Name................................................................................. 7
2.3. Purpose.............................................................................. 7
2.4. Principal Office and Resident Agent.................................................. 7
2.5. Nature of Partners' Interests; Non-Partition.
.................................................................................... 7
2.6. Duration of Company.................................................................. 8
2.7. Further Assurances................................................................... 8
2.8. Classification for Tax Purposes...................................................... 8
ARTICLE III - CAPITAL CONTRIBUTIONS; LOANS...................................................................... 8
3.1. Membership and Participation Percentages............................................. 8
3.2. Initial Contributions................................................................ 8
3.3. [INTENTIONALLY LEFT BLANK.].......................................................... 9
3.4. Capital Accounts..................................................................... 9
3.5. Use of Capital Contributions and Loans............................................... 11
3.6. Additional Capital Contributions; Members'
Loans................................................................................ 11
3.7. Operating Deficits................................................................... 12
ARTICLE IV - MANAGEMENT OF THE COMPANY.......................................................................... 12
4.1. Management........................................................................... 12
4.2. Management Committee................................................................. 12
4.3. Executive Committee.................................................................. 15
4.4. Liability; Indemnification of the Members. ......................................... 18
ARTICLE V - DISTRIBUTIONS AND ALLOCATIONS....................................................................... 19
5.1. Distribution of Net Cash Flow. Net Refinancing
Proceeds and Net Sale Proceeds....................................................... 19
5.2. Allocation of Profits and Losses..................................................... 19
5.3. Upholding of Tax Benefits............................................................ 20
5.4. Gain on Sale......................................................................... 22
ARTICLE VI - BOOKS AND RECORDS; TAX MATTERS..................................................................... 23
6.1. Accounting........................................................................... 23
6.2. Statements........................................................................... 23
6.3. Inspection........................................................................... 24
6.4. Tax Matters.......................................................................... 24
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ARTICLE VII - TRANSFER OF COMPANY INTERESTS; WITHDRAWAL OF
MEMBERS; BUY/SELL PROVISIONS......................................................... 25
7.1. Transfer of Participation Percentage................................................. 25
7.2. Expenses............................................................................. 27
7.3. Withdrawal of Members................................................................ 27
7.4. Death, Legal Incapacity, Dissolution or
Bankruptcy of a Member............................................................... 28
7.5. Status of Interests Transferred...................................................... 28
7.6. Purchase Option...................................................................... 28
7.7. Take-Along........................................................................... 30
ARTICLE VIII - DISSOLUTION AND TERMINATION...................................................................... 32
8.1. Dissolution.......................................................................... 32
8.2. Appointment of Liquidating Member.................................................... 33
8.3. Distributions and Other Matters...................................................... 33
8.4. Distributions of Property............................................................ 33
8.5. Action During Liquidation; Statements of
Account.............................................................................. 34
ARTICLE IX - REPRESENTATIONS, WARRANTIES AND COVENANTS.......................................................... 35
9.1. Representations and Warranties....................................................... 35
ARTICLE X - NOTICES AND COMMUNICATIONS.......................................................................... 38
10.1. Notices.............................................................................. 38
10.2. Change of Address.................................................................... 38
10.3. Time of Communications............................................................... 39
ARTICLE XI - MISCELLANEOUS...................................................................................... 39
11.1. Default.............................................................................. 39
11.2. Confidentiality...................................................................... 39
11.3. Arbitration.......................................................................... 40
11.4. Filings.............................................................................. 41
11.5. Inspections.......................................................................... 41
11.6. Members as Creditors................................................................. 41
11.7. Independent Ventures................................................................. 41
11.8. Partial Invalidity................................................................... 42
11.9. Governing Law; Parties in Interest................................................... 42
11.10. Amendment............................................................................ 42
11.11. Execution in Counterparts............................................................ 42
11.12. Computation of Time.................................................................. 42
11.13. Table of Contents; Titles and Captions............................................... 42
11.14. Pronouns and Plurals................................................................. 42
11.15. Exhibits............................................................................. 42
11.16. Entire Agreement..................................................................... 42
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Schedule of Exhibits
Annual Budget and
Work Plan Exhibit A
Certificate of Formation Exhibit B
Contribution Agreement Exhibit C
Price and Terms Exhibit D
Premises Leases/Description of Premises Exhibit E
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OPERATING AGREEMENT OF NEWCORNCO LLC,
A Delaware Limited Liability Company
The OPERATING AGREEMENT of NewCornCo LLC (the "Agreement") is
made as of this 19th day of July, 1996, by and between EPL TECHNOLOGIES,
INC., a Colorado corporation with offices at 200 Four Falls Xxxxxxxxx Xxxxxx,
Xxxxx 000, Xxxx Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000 ("EPL"), and Agricultural
Innovation & Trade, Inc., a California corporation with offices at 0000 Xxxxx
Xxxx, Xxxxx, Xxxxxxxxxx 00000 ("AIT"). EPL and AIT are sometimes referred to
herein individually as a "Member" and together as the "Members"). Capitalized
terms used herein and not otherwise defined shall have the meanings ascribed
thereto in Article I hereof.
Explanatory Statement
A. EPL possesses certain confidential and proprietary know-how
and technology relating to the development, manufacture and marketing of
fresh-cut produce processing technology that facilitates the maintenance of the
integrity of fresh-cut corn and corn products, and which inhibits degradation of
such products. AIT is engaged in the business of growing, producing, purchasing
and otherwise acquiring, and of manufacturing, processing and marketing, fresh
corn and corn products, and is the owner of various tangible and intangible
business assets related thereto and to the operation of facilities therefor.
B. EPL and AIT desire to form and operate NewCornCo LLC
pursuant to this Agreement and other related documents and instruments, as a
limited liability company under Delaware law (the "Company"), to engage in the
business of purchasing or otherwise acquiring, and of processing and marketing,
fresh corn (i.e. corn which is not frozen or canned), employing, when
appropriate and available, proprietary fresh-cut produce processing know-how and
technologies that facilitate the maintenance of the integrity of such products.
C. Specifically, it is contemplated that AIT will contribute
certain tangible and intangible assets, as further described or referred to
herein, to the Company as an initial capital contribution; and EPL will
contribute cash or cash equivalents to the Company as an initial capital
contribution; and the Company will enter into various agreements and
arrangements with AIT and/or EPL, or their respective Affiliates, or unrelated
third parties, for various goods, products and services as are from time to time
required by the Company in connection with its business.
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D. In furtherance of the foregoing, the Members, to provide
for foregoing, have set forth their agreements and understandings as are stated
herein.
AGREEMENTS
In consideration of the foregoing and of the covenants and
conditions herein contained, and intending to be legally bound hereby, the
Members agree:
ARTICLE I
DEFINITIONS
Certain terms when used in this Agreement shall have the
meanings set forth in the context hereof. The following terms when used in this
Agreement shall have the respective meanings set forth below:
1.1. Act. Title 6, Chapter 18 of the Delaware Code (the Delaware Limited
Liability Company Act), as from time to time in effect in the State of Delaware,
or any corresponding provision or provisions of any succeeding or successor law
of such State; provided however, that in the event any amendment to the Act, or
any succeeding or successor law, is applicable to the Company only if the
Company has elected to be governed by the Act as so amended or by such
succeeding or successor law, as the case may be, the term "Act" shall refer to
the Act as so amended, or to such succeeding or successor law, only after the
appropriate election by the Company, if made, has become effective.
1.2. Additional Capital Balance. The Additional Capital
Contributions of a Member; in each case as reduced from time to time by all
distributions to such Member which are in reduction of a Member's Additional
Capital Balance; and in each case as increased from time to time by any
contributions by such Member which are Additional Capital Contributions.
1.3. Additional Capital Contributions. Any additional
contributions of a Member to the capital of the Company made pursuant to Section
3.6. hereof.
1.4. Adjusted Basis. The Company's adjusted basis in any
Company asset, as determined for Federal income tax purposes pursuant to Section
1011 of the Code.
1.5. Affiliate. When used with respect to a specified Person,
(i) any Person that, directly or indirectly, through one or more intermediaries,
controls, or is controlled by, or is under common control with, the specified
Person or any of its members, partners, shareholders, officers, directors or
trustees, (ii) any
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Person who is a member, shareholder, officer, director, partner, or trustee of,
or serves in a similar capacity with respect to, the specified Person, or which
the specified Person or any of its members, partners, shareholders, officers,
directors, or trustees is a member, shareholder, officer, director or trustee,
or serves in a similar capacity, and (iii) any Person that, directly or
indirectly, is the beneficial owner of five percent (5%) or more of any class of
equity securities of, or otherwise has a substantial beneficial interest in, the
specified Person, or of which the specified Person or any of its members,
partners, shareholders, officers, directors, or trustees is directly or
indirectly the owner of five percent (5%) or more of any class of its equity
securities.
1.6. AIT Contributed Property. The property and assets
referred to and defined thereas in, and to be contributed by AIT to the Company
as AIT's initial Capital Contribution pursuant to, the Contribution Agreement.
1.7. Annual Budget and Work Plan. The budget and plan of work
and operation of the Company, to be prepared on an annual basis, as approved
from time to time by the Management Committee of the Company pursuant to Section
4.2 hereof. The Annual Budget and Work Plan for the short period ending December
31, 1996 is attached hereto as Exhibit A, which shall serve as a format for the
Annual Budget and Work Plan for future Annual Periods.
1.8. Annual Period. Any full calendar year commencing on
January 1 and ending on the next succeeding December 31.
1.9. Capital Accounts. The capital accounts of the Members, as
described in Section 3.4. hereof.
1.10. Capital Balance. The Capital Contributions of a Member
made in cash or in property; in each case as reduced from time to time by all
distributions to such Member which are in reduction of a Member's Capital
Balance; and in each case as increased from time to time by any contributions by
such Member which are Capital Contributions.
1.11. Capital Contributions. Any contributions of a Member to
the capital of the Company made pursuant to Article III hereof.
1.12. Carrying Value. An amount that is equal to: (i) with
respect to Contributed Property, the fair market value of such property at the
time of contribution, and thereafter reduced (but not below zero) by all
depreciation, amortization and similar expenses charged to Capital Accounts
pursuant to Section 3.4. hereof with respect to such property, and (ii) with
respect to any other property, the Adjusted Basis of such property.
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1.13. Certificate of Formation. The Certificate of Formation
of the Company, in the form attached hereto as Exhibit B, filed or to be filed
with the Secretary of State of Delaware in order to form the Company.
1.14. Closing Price. As respects the EPL Shares on any day,
the last sale price, regular way, or, in the case no such sale takes place on
such day, the average of the high bid and low asked prices, in either case as
reported by the NASDAQ on the Bulletin Board, Small Cap Market or otherwise, (as
the case may be) or, if the EPL Shares are not then listed or admitted to
trading on the NASDAQ, the last sale price, regular way, or, in case no such
sale takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal
national securities exchange on which the EPL Shares are listed or admitted to
trading, or if the EPL Shares are not listed or admitted to trading on any
national securities exchange or NASDAQ, the last quoted price, or if not so
quoted, the average of the high bid and low asked prices in the over-the-counter
market, as reported by NASDAQ or, if such system is no longer in use, the
principal other automated quotation system that may then be in use.
1.15. Code. The Internal Revenue Code of 1986, as amended from
time to time, and all successors thereto.
1.16. EPL Shares. Duly authorized and validly issued shares of
Common Stock, $.001 par value, of EPL, or of any entity which acquires
substantially all of the assets of EPL or which is a successor by merger or
other similar type transaction to EPL; but not including any subsidiary of EPL.
1.17. Contributed Property. Property (other than cash)
contributed to the Company by a Member as a contribution to capital (or deemed
contributed as a result of a termination of the Company for Federal income tax
purposes).
1.18. Contribution Agreement. That certain Contribution
Agreement, by and between AIT and the Company, pursuant to which AIT is to
contribute the AIT Contributed Property to the Company as its initial Capital
Contribution. The form of Contribution Agreement is attached hereto as Exhibit
C.
1.19. Covered Transaction. The sale, transfer (by lease,
license, or conveyance of the beneficial interest), conveyance or other
disposition in one transaction or a related series of transactions, of all or
substantially all of the assets of any Member, other than to an Affiliate; or
any transaction or series of transactions in which at least fifty percent (50%)
of the equity interest in any Member (including voting interests) is acquired by
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any Person or Persons who together constitute a "group" for purposes of Section
13(d) of the Securities Exchange Act of 1934, other than any Person or Persons
who, as of the date hereof, individually or as a "group" hold greater than a ten
percent (10%) equity interest in that Member.
1.20. Economic Risk of Loss. The "economic risk of loss" that
any Member is treated as bearing under Treasury Regulation Section 1.752-2.
1.21. Entity. Any general partnership, limited partnership,
limited liability company, corporation, joint venture, trust, business trust,
cooperative, association or other form of organization.
1.22. Management Committee. The Management Committee is the
committee formed and acting pursuant to Article IV hereof.
1.23. Majority Members. Those Members owning collectively
greater than a fifty percent (50%) Participation Percentage in the Company.
1.24. Members' Loans. All amounts loaned by Members to the
Company pursuant to Section 3.6. hereof.
1.25. Minimum Gain. Minimum Gain shall have the meaning set
forth in Section 5.3. hereof.
1.26. Net Agreed Value. (i) In the case of cash, the amount
thereof, (ii) in the case of Contributed Property, the fair market value of such
property at the time of the contribution, reduced by any indebtedness either
assumed by the Company upon such contribution or to which such property is
subject at the time of the contribution, and (iii) in the case of property
distributed to a Member, the fair market value of such property at the time of
the distribution, reduced by any indebtedness either assumed by the Member upon
such distribution or to which such property is subject at the time of
distribution.
1.27. Net Cash Flow. Net Cash Flow of the Company, with
respect to any calendar period, shall mean the net cash flow as shown on the
accounts of the Company (i.e., net cash flow from operations less capital
expenditures, less net movements in working capital), less reserves established
for future requirements.
1.28. Net Income. Net Income of the Company with respect to
any fiscal period shall mean the net income or loss of the Company as shown or
reported on the Company's U.S. Partnership Return of Income, determined on an
accrual basis.
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1.29. Net Refinancing Proceeds. The proceeds realized by the
Company upon any refinancing of a Company indebtedness, net of expenses incident
to such refinancing and the satisfaction of any indebtedness being refinanced
and any right of any other creditor of the Company.
1.30. Net Sale Proceeds. The proceeds realized by the Company
upon the sale of all or any part of any Company asset, net of expenses incident
to such sale, the payment of any Company indebtedness secured by or related to
such asset and satisfaction of any right of any creditor of the Company to
receive such proceeds.
1.31. Participation Percentage. The Participation Percentage
of each of the Members, as of the date hereof, as set forth in Section 3.1
hereof.
1.32. Partner Minimum Gain. Partner Minimum gain shall have
the meaning set forth in Section 5.3 hereof.
1.33. Partner Nonrecourse Debt. Partner Nonrecourse Debt shall
have the meaning set forth in Treasury Regulation Section 1.704-2(b)(4).
1.34. Partner Nonrecourse Deductions. Partner Nonrecourse
Deductions shall have the meaning set forth in Treasury Regulation Sections
1.704-2(i)(1) and (2).
1.35. Person. Any individual or Entity.
1.36. Profit and Loss. Profit and Loss shall mean for each
taxable year of the Company or other period, an amount equal to the Company's
taxable income or loss for the year or period, determined in accordance with
Code Section 703(a), with the following adjustments:
a. All items of income, gain, loss, deduction, or
credit required to be stated separately pursuant to Code Section 703(a)(1) shall
be included in computing the Company's taxable income or loss; and
b. Any tax-exempt income of the Company, not
otherwise taken into account in computing Profit or Loss, shall be included in
computing the Company's taxable income or loss; and
c. Any expenditures of the Company described in
Code Section 705(a)(2)(B) (or treated as such pursuant to Regulation Section
1.704-1(b)(2)(iv)(h)(i) and not otherwise taken into account in computing Profit
or Loss, shall be subtracted from taxable income or loss.
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1.37. Treasury Regulations. The Income Tax Regulations,
including Temporary Regulations, promulgated under the Code, as such regulations
may be amended from time to time (including corresponding provisions of
succeeding regulations).
ARTICLE II
GENERAL PROVISIONS
2.1. Formation. EPL and AIT hereby intend to form and operate a limited
liability company under the Act and in accordance with the terms of this
Agreement and the Company's Articles of Organization. The Company shall exist
under and be governed by, and this Agreement shall be construed in accordance
with, the laws of the State of Delaware. Upon the effectiveness of this
Agreement, EPL shall be authorized to execute, and cause to be filed with the
Secretary of State of Delaware, the Certificate of Formation.
2.2. Name. The business of the Company shall be carried on
under the name "NewCornCo LLC", or under such other name as the Members may from
time to time designate.
2.3. Purpose. The purpose and character of the business of the
Company shall be to (i) purchase or otherwise acquire, and to manufacture,
process and market, fresh corn (i.e. other than frozen or canned) and corn
products, employing, when appropriate and available, proprietary food processing
know-how and technologies that facilitate the maintenance and integrity of such
fresh-cut corn and corn products; and (ii) to do all things necessary or
appropriate to effect any part or all of the foregoing.
2.4. Principal Office and Resident Agent. The Company's
registered office in the State of Delaware shall be as follows: The Corporation
Trust Company, Corporation Trust Center, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxx 00000. The Company may have such other or additional places of business
within or without the State of Delaware as the Management Committee may from
time to time designate. The name and address of the Company's resident agent in
the State of Delaware shall be as follows: The Corporation Trust Company,
Corporation Trust Center, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000.
2.5. Nature of Partners' Interests; Non-Partition. The
interests of the Members in the Company shall be personal property for all
purposes. All property owned by the Company, whether real or personal, tangible
or intangible, shall be owned by the Company as an entity, and no Member
individually shall have any ownership of such property. No Member shall be
entitled to seek partition of any Company property.
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2.6. Duration of Company. The term of the Company shall begin
upon the acceptance of the Articles of Organization with the Department and
shall continue in existence until May 30, 2026, unless sooner terminated
pursuant to any provisions of this Agreement or as otherwise provided by law,
and unless extended by the unanimous vote of the Members.
2.7. Further Assurances. The parties hereto will execute
whatever certificates and documents, and will file, record and publish such
certificates and documents, which are required to form and operate a limited
liability company under the Act.
2.8. Classification for Tax Purposes. The Members hereby
acknowledge their intention that the Company be classified, for federal and
state income tax purposes, as a partnership and not as an association taxable as
a corporation, pursuant to Section 7701(a)(2) of the Code, and agree that the
provisions of this Agreement shall be construed in a manner to give full effect
to such intent. Upon the promulgation of final Treasury Regulations pertaining
to the classification of business entities in accordance with Notice 95-14,
1995-1 C.B. 297, the Management Committee shall, on behalf of the Company and
with the advice of tax counsel, elect to treat the Company as a "partnership"
for federal income tax purposes.
ARTICLE III
CAPITAL CONTRIBUTIONS; LOANS
3.1. Membership and Participation Percentages. The names, addresses and
Participation Percentage of each of the Members are as follows:
Names and Addresses Participation Percentage
EPL Technologies, Inc. 51%
000 Xxxx Xxxxx Xxxxxxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxxxxxxxxxx, XX 00000
Agricultural Innovation & Trade, Inc. 49%
0000 Xxxxx Xxxx
Xxxxx, Xxxxxxxxxx 00000
3.2. Initial Contributions. Simultaneously with the execution
of this Agreement, each of the Members shall make their respective initial
Capital Contribution to the Company in the manner and as contemplated by this
Section 3.2.
A. EPL Capital Contribution. Simultaneously with the execution
and delivery hereof, or at or as of such later date as shall be agreed to by the
Members concurrent with the execution and
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delivery of this Agreement, EPL is making a contribution to the capital of the
Company, in cash, or by check, in the amount of ________ Dollars ($220,476).
Payment of said amount by EPL to the Company will constitute payment in full of
EPL's initial Capital Contribution as required under the terms of this
Agreement.
B. AIT Capital Contribution. Simultaneously the execution and
delivery hereof, or at or as of such later date as shall be agreed to by the
Members concurrent with the execution and delivery of this Agreement, AIT shall
execute and deliver to the Company the Contribution Agreement, together with
such instruments of conveyance, documents and other agreements as may be
contemplated thereby or otherwise required in connection therewith or in order
to fully effect the purposes and intent thereof, pursuant to which AIT will
contribute to the Company the AIT Contributed Property (as defined in the
Contribution Agreement) as its initial Capital Contribution. It is expressly
acknowledged and agreed that, assuming full performance by AIT of its
obligations under the Contribution Agreement, the Net Agreed Value of the AIT
Contributed Property equals _____________ Dollars ($211,830).
3.3. [INTENTIONALLY LEFT BLANK.]
3.4. Capital Accounts.
A. The Company shall establish and maintain a Capital Account
for each Member. The Capital Account of each Member shall be increased by (i)
the amount of the money contributed by the Member to the Company, (ii) the Net
Agreed Value of any property that is contributed by the Member to the Company,
(iii) allocations of income or gain to the Member by the Company pursuant to
Article 5 of this Agreement (but without regard to Section 5.2.C.), and shall be
reduced by (i) the amount of money distributed to the Member by the Company,
(ii) the Net Agreed Value of any property distributed to the Member by the
Company, and (iii) allocations of deduction or loss to the Member by the Company
pursuant to Article 5 of this Agreement (but without regard to Section 5.2.C.).
B. Upon a distribution in kind of Company property, the
Capital Account of each Member will be debited or credited with such Member's
allocable share of gain or loss which would have been recognized by the Company
had the property been sold for an amount equal to its fair market value
immediately prior to such distribution (to the extent that the gain or loss
inherent in such distributed property has not been previously reflected in the
Capital Accounts).
C. For purposes of computing the amount of any item of income,
gain, loss or deduction to be reflected in the Capital Accounts, the
determination, recognition and classification of each
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such item shall be the same as its determination, recognition and classification
for Federal income tax purposes, provided that:
(1) Any deductions for depreciation, amortization
or similar expense attributable to Contributed Property shall be determined as
if the Adjusted Basis of such Company asset on the date it became Contributed
Property was equal to the Carrying Value of such Company asset as of such date;
(2) Any income, gain or loss attributable to the
taxable disposition of a Contributed Property shall be determined by the Company
as if the Adjusted Basis of such property on the date of disposition was equal
to the Carrying Value of such property on such date;
(3) If the Company's Adjusted Basis in any
"investment credit property" is reduced pursuant to Section 50(c) of the Code,
then the amount of such reduction shall be treated as an expense for the year in
which such reduction occurs and shall be allocated to the Members in the ratio
in which the Adjusted Basis of such property is allocated to the Members
pursuant to Treasury Regulation Section 1.46-3(f)(2)(i) (provided that
principles similar to Section 704(c) of the Code shall be taken into account in
the allocation of such basis); and any restoration of any such reduction in
Adjusted Basis shall be allocated to the Members in the same proportion as the
investment tax credit recapture with respect to such "investment credit
property" is shared among the Members; and
(4) The computation of all items of income, gain,
loss and deduction shall be made without regard to any election that may be made
by the Company under section 754 of the Code (except to the extent required by
Treasury Regulation Section 1.704-1(b)(2)(iv) (m)) and, as to those items
described in Section 705(a)(1)(B) or Section 705(a)(2)(B) of the Code (including
items treated as Section 705(a)(2)(B) expenditures under Treasury Regulation
Section 1.704-1(b)(2)(iv)(i)), shall be made by treating such items as though
they were, respectively, includible in income or currently deductible.
D. It is the intent of the Company to maintain Capital
Accounts and allocations in accordance with Treasury Regulation Section
1.704-1(b). Accordingly, adjustments to conform to those Regulations (or to
successor or amended provisions) or to take into account unexpected events shall
be made by the Members if such adjustments would not materially alter the
economic substance of this Agreement as it applies to any Member.
E. Except as otherwise required to satisfy Treasury Regulation
Section 1.704-1(b) in connection with a Code Section 708(b)(1)(B) termination,
in the event any interest in the Company is transferred in accordance with the
terms of this Agreement, the
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transferee shall succeed to the Capital Account of the transferror to the extent
it relates to such transferred interest.
3.5. Use of Capital Contributions and Loans. The Capital
Contributions of the Members, all proceeds of Company borrowings, and any
Additional Capital Contributions and Members' Loans made pursuant to this
Agreement shall be used and applied for any Company purpose as determined by the
Management Committee or as expressly provided for elsewhere herein.
3.6. Additional Capital Contributions; Members' Loans.
A. Other than as expressly set forth in this Article III, no
Member shall be required to make any Additional Capital Contributions or
Members' Loans to the Company.
B. At any time and from time to time after the date hereof,
any Member may (but shall not be obligated to) make Additional Capital
Contributions or Members' Loans to the Company, if (1) in the opinion of the
Management Committee such contributions or loans are needed by the Company in
furtherance of any Company purpose, and (2) the Management Committee approves
any such contribution or loan in writing.
C. If a Member makes any Additional Capital Contributions in
accordance with the foregoing provisions, such contributions will not increase
such Member's Participation Percentage, will be entitled to the priorities
described in Article V hereof, and unless otherwise agreed at the time of the
making thereof, will be entitled to a compounded preferred return thereon equal
to the fluctuating prime rate of interest announced from time to time by The
Wall Street Journal (or, if The Wall Street Journal is no longer published, the
prime rate published in a publication of national circulation selected by the
Management Committee) plus two percent (2%), or as otherwise set and approved by
the Management Committee.
D. If any Member advances any funds to the Company after the
date of this Agreement (except as provided for in Sections 3.7. hereof, and
except in the case of Additional Capital Contributions), such advances will be
treated as Members' Loans, will not increase such Member's Participation
Percentage, and the amount thereof will be a debt due from the Company to such
Member, entitled to the priorities described in Article V hereof, to be repaid
with interest thereon accruing at the fluctuating prime rate of interest
announced from time to time by The Wall Street Journal (or, if The Wall Street
Journal is no longer published, the prime rate published in a publication of
national circulation selected by the Management Committee) plus two percent
(2%), or as otherwise set and approved by the Management Committee.
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3.7. Operating Deficits. In the event that the Management
Committee determines that the Company requires additional funds to meet
operating expenses or required capital improvements, or for any other proper
Company purpose (in any such case, an "Operating Deficit"), the Management
Committee, in its sole discretion, may either (1) request that the Members, pro
rata in accordance with their then respective Participation Percentages, advance
funds in the amount so required, but in no event will the Members be obligated
to make such an advance or (2) obtain loans on such terms as the Management
Committee deems reasonably satisfactory taking into consideration the
circumstances of the Company and market conditions then prevailing, (3) if loans
are not available on terms satisfactory to the Management Committee, and with
the unanimous consent of the Members, obtain additional equity participation in
the Company by the admission of additional Members and the pro rata reduction of
the existing Members' Participation Percentages or (4) take such other actions,
and explore and pursue such other financing options as the Management Committee
may deem appropriate under the circumstances.
ARTICLE IV
MANAGEMENT OF THE COMPANY
4.1. Management. The Company shall be managed by its Members and, except as
otherwise herein provided, any decision of Majority Member(s) shall be
controlling for all purposes. Each Member shall have the power and authority to
act for and bind the Company to third parties; provided, however, that each such
Member shall severally indemnify, defend and hold harmless the Company from any
damage, loss or expense incurred in so doing in a manner that has not been
approved or ratified in the manner herein provided for the taking of such
action.
4.2. Management Committee.
A. In order to facilitate the management of the Company, the
Members shall select a committee of six individuals (the "Management Committee")
to represent their respective interests and to determine and control the
business of the Company. Subject to the rights of the Members (and any decision
to the contrary by the Majority Members), as herein provided, and without
limiting the generality of the foregoing, it is hereby expressly declared that
the Management Committee shall have the following powers:
1. To conduct, manage and control the business and
affairs of the Company, and to make such rules and regulations therefor not
inconsistent with law or the Certificate of Formation or this Agreement, as the
Management Committee shall deem to be in the best interests of the Company;
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2. To determine whether any services benefiting
the Company should be performed by one of the Members, with the expense of
providing such service to be covered by the Company;
3. To review and approve the Annual Work Plan and
Budget of the Company, and to determine any necessary changes thereto, as the
same shall be prepared and submitted to the Management Committee by the
Executive Committee.
4. To approve the borrowing of money, whether on a
secured or unsecured basis, by the Company, and the refinancing, recasting,
extension, compromise and matters otherwise relating to any loan to the Company
and, in connection therewith, to cause to be executed and delivered therefor, in
the Company's name, promissory notes, bonds, debentures, deeds of trusts,
mortgages, pledges, hypothecations, or other evidences of debt and securities
therefor;
5. To designate in the manner herein described the
individuals who are to serve on the Executive Committee and/or other committees,
and to prescribe the manner in which proceedings of such committee shall be
conducted;
6. To approve the acquisition by the Company of
real and personal property, and to approve the entering into by the Company of
contracts and all other arrangements needed to effectuate the business and
affairs of the Company; and
7. To establish a presence or other business
operations of the Company in one or more jurisdictions.
B. The Management Committee shall be comprised of
six (6) individuals, each of whom shall be referred to as a "Manager", and three
(3) of whom shall be designated as "EPL Managers" and three (3) of whom shall be
designated as "AIT Managers". The three (3) EPL Managers shall at all times be
appointed by EPL; and the three (3) AIT Managers shall at all times be appointed
by AIT. The initial members of the Management Committee shall be Xxxx X. Xxxxxx,
Xxxxxxx X. Xxxx, and Xxxxx Xxxxxxxxx, each an EPL Manager appointed by EPL; and
Xxxxx Xxxxxxxxx, Minos Athanassiadis, and Xxx Xxxxxxx, each an AIT Manager
appointed by AIT. Each Manager shall continue to serve until his or her death,
resignation or removal; provided, however, that each Manager shall be subject to
removal only by the Member responsible for his or her appointment to the
Management Committee, that is, each EPL Manager may be removed only by EPL and
each AIT Manager may be removed only by AIT. During the course of any disability
of any Manager, any other individual serving on the Management Committee and
representing or appointed by the same Member or Members as the disabled Manager,
shall have the authority to cast the disabled Member's vote on all matters of
business.
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C. A quorum of the Management Committee shall be four (4)
Managers (in person or by proxy) provided that, in any event, there shall at all
times be present at least one (1) EPL Manager and at least one (1) AIT Manager.
For each Management Committee decision, each Manager shall have the number of
votes (to include fractional votes) equal to the Participation Percentage of the
Member who appointed such Manager, divided by the number of Managers serving on
the Management Committee and appointed by that Member. Every act or decision
done or made and approved by those Managers who in the aggregate represent the
Majority Members, shall be regarded as an act or decision approved by the
Management Committee. The Management Committee shall meet no less than
semi-annually on or at such other date as shall be agreed from time to time, the
first Tuesday of June and December of the calendar year, but also as often as
necessary or desirable to carry out its functions. Meetings of the Management
Committee shall be held at any place within or without the State of Delaware
that has been designated from time to time by the Management Committee or the
Chairman. Any Manager not in attendance may give his proxy to the Chairman or
another Manager to cast his vote on all matters of business coming before the
meeting. Continuing proxies may be filed with the Chairman. Any Manager may
convene a meeting of the Management Committee upon at least fourteen (14) days'
prior notice to the other Managers, and in emergencies, any Member of the
Management Committee may convene a telephone meeting on twenty-four (24) hour
notice. Notice of the time and place of meetings shall be delivered personally
or by telephone to each Manager or sent by first-class mail or by telex,
telegram or facsimile transmission, charges prepaid, addressed to each Manager
at his address or appropriate telex, telegram, or facsimile address or number as
it appears on the records of the Company, or, if it is not so shown on the
records and is not readily ascertainable, to the Member whom such Manager
represents. The Management Committee may also hold meetings by telephone and may
make decisions by the written consent of all Managers. A written record of all
formal meetings, (whether by telephone or in person) of the Management Committee
and all material decisions made by it shall be made and kept in the records of
the Company.
D. At the meeting of the Management Committee held in December
of each year, or at such other times as shall be determined by the affirmative
vote of the Management Committee, the Management Committee shall elect from
among the Managers a chairman of the Management Committee (the "Chairman") who
shall preside as chairman of all meetings of the Management Committee during the
succeeding calendar year. In addition, the Chairman shall prepare or cause to be
prepared the Minutes of the meetings of the Management Committee and shall be
entitled to designate the time and place for meetings of the Management
Committee in the manner described hereinabove. At the first meeting of the
Management Committee, the Management Committee shall appoint the initial
Chairman who is to serve as
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Chairman of the Management Committee until his resignation or until his
successor as Chairman shall be duly appointed by the Managers.
E. Each Manager shall be free to represent the views and
positions of the Member or Members whom he or she represents and shall at all
times keep the Member whom he or she represents fully apprised of the
proceedings of the Management Committee. Each Member shall severally indemnify,
defend and hold harmless the Company from any damage, loss or expense incurred
in the taking by any Manager or Executive Officer of the Company appointed by or
designated as the representative of such Member in taking any action which is
contrary to or in excess of the authority of such Manager or Executive Officer.
F. Except as otherwise decided by the Management Committee, no
Manager shall be entitled to receive any salary or other remuneration from the
Company for his or her services as a Manager, or any reimbursement for his or
her expenses relating to such services.
G. Anything herein to the contrary notwithstanding, the
following major decisions (individually, a "Major Decision") of the Company
shall require the unanimous consent of the Members, rather than the affirmative
vote of the Majority Members:
(1) any sale, transfer or other disposal of all or
substantially all of the assets of the Company;
(2) any material change in the business of the
Company from that which is contemplated by the purpose set forth in Section 2.3
hereof;
(3) any amendment to the Articles of Organization
of the Company;
(4) the approval of a voluntary dissolution of the
Company;
(5) approval of a merger, consolidation or other
substantial reorganization of the Company, other than any matter or transaction
in connection with which any Member desires to and does exercise its rights
under Section 7.7 hereof.
H. If either Member (the "Initiating Member") request in
writing that the Other Member (the "Responding Member") consent to a Major
Decision under G(2) above and gives a notice (the "First Notice") of such
request to the Responding Member, consent thereto shall be presumed unless the
Initiating Member receives notice (the "Second Notice") from the Responding
Member denying such request within ten (10) days after the First Notice is
given. If the Second Notice denying such request is given within such period, a
potential
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deadlock shall be deemed to exist, in which event the Initiating Member shall be
deemed to have withdrawn the request unless the Initiating Member delivers
another notice (the "Third Notice") to the Responding Member within ten (10)
days after receipt of the Second Notice, reiterating its request for consent to
the Major Decision. Upon the delivery of the Third Notice reiterating the
request, an actual deadlock shall be deemed to exist and EPL shall have the
right, exercisable at any time within sixty (60) days after the occurrence of
the actual deadlock upon delivery of the Third Notice, to purchase all of the
Participation Percentage of AIT in the Company. The purchase price and terms
applicable to any such purchase by EPL of the Participation Percentage upon the
occurrence of an actual deadlock shall be determined in accordance with Section
7(d) and Section 7(e) hereof, including Exhibit D attached hereto.
4.3. Executive Committee.
A. The day to day business and operations of the Company shall
be overseen and implemented by a committee (the "Executive Committee"), subject
to the limitations imposed by the Management Committee and the Majority Members.
The responsibility of the Executive Committee shall include, but not be limited
to, the carrying out of the Company's business and affairs on a day-to-day basis
in accordance with the Annual Budget and Work Plan approved by the Management
Committee.
B. The authorized number of individuals, who shall be referred
to as "Executive Officers", which shall constitute the Executive Committee shall
be four (4), comprised of two (2) Executive Officers appointed by the EPL
Managers, and two (2) Executive Officers appointed by the AIT Managers. Any
Manager may also serve as an Executive Officer, and any individual may hold the
position of both Manager and an Executive Officer. The Executive Officers shall,
at the expense of the Company, but, as to each item, within the budget and plan
established by the then applicable Annual Budget and Work Plan approved by the
Management Committee, individually or collectively, as the context so dictates:
(1) use their best efforts to cause the Company at
all times to perform and comply with the provisions of any loan commitment,
agreement, guarantee, mortgage, or other contract, instrument or agreement to
which the Company is a party, or which affects the business or the operation
thereof, including, without limitation, the payment on behalf of the Company of
any debt service on loans to the Company;
(2) deliver to the Management Committee promptly
upon the receipt or sending thereof copies of all notices, reports and
communications between the Company and any holder of a mortgage, deed of trust
or other document or instrument affecting all or any portion of the assets of
the Company which relate to any
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existing or pending default thereunder or to any financial or operational
information required by such holder;
(3) prepare and submit to the Management Committee
the Annual Budget and Work Plan, for review and approval by the Management
Committee;
(4) purchase and maintain (or cause to be
purchased and maintained) fire and extended coverage, liability, worker's
compensation, rental loss and other insurance with respect to the assets of the
Company and other property of the Company;
(5) pay (or cause to be paid) all taxes and
assessments levied against the assets of the Company;
(6) employ and dismiss from employment, and
retain, any and all employees, consultants, agents and representatives, and
obtain all legal, accounting and other services necessary in connection with the
operation and management of the business and assets of the Company, for such
compensation and on such terms and conditions as the Management Committee may
determine; and
(7) furnish the statements and reports required to
be prepared and distributed by Article VI hereof at the request of, and in the
form required by, the Management Committee.
C. Each Executive Officer shall devote so much of its time and
effort to the management and other affairs of the Company as may be reasonably
required to promote the purposes of the Company in an efficient, effective and
diligent manner.
D. Any Executive Officer, but only upon the terms and
conditions approved by the Management Committee or the Majority Members, shall
have the right to obtain goods and services from any Member of the Company, and
to obtain goods and services from any individual or entity which is an
Affiliate, or otherwise directly or indirectly interested in a Member or any
shareholder, officer or director thereof.
E. In the event of a life threatening emergency or any
requirement of law or governmental order requiring immediate action, and so long
as the expenditure per occurrence is not in excess of $10,000 any Executive
Officer may, in its discretion, act immediately without regard to the
limitations set forth herein and without staying within budget limitations, to
eliminate such emergency and/or to comply with such law or order, provided that
the Executive Officer immediately reports its actions and the reasons therefor
to the Management Committee.
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F. No Executive Officer shall be empowered to, and shall not,
without first obtaining the consent and approval of the Management Committee or
the Majority Members:
(1) sell, assign, transfer, exchange, grant
leasehold estates or otherwise dispose of any Company assets;
(2) apply for, execute or modify any mortgage,
pledge, deed of trust, encumbrance or other hypothecation or security agreement
affecting the property or assets of the Company or any interest therein, or
execute any financing statement in connection therewith;
(3) incur any indebtedness on behalf of the
Company other than trade debt for meeting current obligations incurred in the
ordinary course of business and due within 30 days;
(4) undertake any capital expenditures of in
excess of $5,000;
(5) change or permit to be changed in any
substantial way the accounting process and procedures employed in keeping the
books of account or preparing financial statements with respect to operation or
management of the Company;
(6) make, execute or deliver on behalf of the
Company any assignment for the benefit of creditors or any guarantee, indemnity
bond or surety bond, or any equivalent thereof;
(7) obligate the Company as a surety, guarantor or
accommodation party to any obligation in excess of $5,000;
(8) lend funds belonging to the Company to any
Member or any third party or extend to any person, firm or corporation, credit
on behalf of the Company, except for the extension of credit in the ordinary
course of the Company's business to trade debtors up to $40,000 each, but in
any event not in excess of $200,000 in the aggregate;
(9) enter into any contracts affecting the
Company, other than as approved by the Management Committee or in connection and
in accordance with the Annual Budget and Work Plan of the Company; or
(10) take legal action on behalf of the Company.
4.4. Liability; Indemnification of the Members. The Company
shall indemnify, defend and hold harmless each Member, each of their officers
and directors, each Manager and Executive Officer, and any other Person acting
as an agent of the Company to whom the Management Committee shall specifically
and in writing have
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conferred rights hereunder, against any loss, expense, damage, claim, liability,
obligation, judgment or injury suffered or sustained by him, it, them or any of
them by reason of any act, omission or alleged act or omission by him, it, them
or any of them arising out of his, its or their activities on behalf of the
Company or in furtherance of the interests of the Company, including, without
limitation, any judgment, award, settlement, reasonable attorneys' fees and
other costs or expenses incurred in connection with the defense of any actual or
threatened actions, proceedings or claims, all costs of which shall be charged
to and paid by the Company as incurred; provided, however, that the acts,
omissions or alleged acts or omissions upon which such actual or threatened
actions, proceedings or claims are based were performed or omitted in good faith
and within the scope of such Person's authority hereunder, and were not
fraudulent, in bad faith or a result of wanton and willful misconduct or gross
negligence by the party to be indemnified, defended and held harmless under this
Section 4.4.
ARTICLE V
DISTRIBUTIONS AND ALLOCATIONS
5.1. Distribution of Net Cash Flow. Net Refinancing Proceeds and Net Sale
Proceeds. All Net Cash Flow, if any, Net Refinancing Proceeds, if any, and Net
Sale Proceeds, if any, realized by or available to the Company shall first be
applied or added to a reasonable reserve or escrow account retained for working
capital needs or to provide funds for contingencies and expenses of the Company
(all as the Management Committee deems advisable, or as required by any loan,
escrow or other agreement or instrument of the Company). The balance, if any, of
Net Cash Flow, Net Refinancing Proceeds or Net Sale Proceeds shall be
distributed from time to time as the Management Committee shall direct, all in
the following order of priority to the extent available:
A. To the Members pro rata in repayment of the entire
principal amounts of any outstanding Members' Loans, together with all accrued
but unpaid interest thereon, first on account of interest accrued thereon (in
proportion to the interest so accrued) and then on account of outstanding
principal amounts thereof (in proportion to the respective amounts of
outstanding principal);
B. To the Members pro rata in reduction of their then
outstanding Additional Capital Balances, together with all accrued but unpaid
preferred return thereon, first on account of any preferred return accrued
thereon (in proportion to the preferred return so accrued) and then on account
of outstanding Additional Capital Balances (in proportion to the respective
amounts of Additional Capital Balances);
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C. To the Members in reduction of their then outstanding
Capital Accounts, in proportion, to the respective amounts of any such Capital
Accounts; and, thereafter,
D. Any remaining amounts to all Members in proportion to their
respective Participation Percentages.
The Members acknowledge that it is not the intent of the
Members that distributions be made to the Members during the first 24 months of
operation of the Company, although any final decisions in that regard shall be
made solely by the Management Committee.
5.2. Allocation of Profits and Losses.
A. Except as otherwise provided in this Section 5.2., Profit,
Loss and all gain, deduction or credit (the "Tax Incidents") for each fiscal
year shall be allocated to the Members in accordance with their respective
Participation Percentages.
B. Upon the assignment or transfer of a Company interest
pursuant to Article VII hereof, the books and records of the Company shall be
closed, and Tax Incidents shall be allocated to each Member who held such
Company interest in accordance with the portion of the year during which such
Member held such Company interest determined as though such portion of the year
was a separate taxable period. Notwithstanding the foregoing, the Member who
held such Company interest and the Member receiving such Company interest may
agree to make the allocation of Tax Incidents in accordance with any other
method permitted by applicable rules and Treasury Regulations.
C. In accordance with Code Section 704(c) and the Treasury
Regulations thereunder, income, gain, loss and deduction with respect to any
property contributed (or deemed contributed pursuant to the provisions of Code
Section 708) to the capital of the Company shall, solely for tax purposes, be
allocated among the Members so as to take account of any variation between the
adjusted basis of such property to the Company for Federal income tax purposes
and its fair market value at the time of contribution. Such allocations shall be
made in accordance with the "traditional method" described in Treasury
Regulation Section 1.704-3(b) (or any successor provision) as shall be
reasonably determined by the Management Committee after consultation with the
Company's tax advisers; provided, however, that curative allocations consisting
of the special allocation of gain or loss upon the sale or other disposition of
the contributed property shall be made in accordance with the "traditional
method with curative allocations" described in Treasury Regulation Section
1.704-3(c) (or any successor provision) to the extent necessary to eliminate any
disparity, to the extent possible, between the Members' book and tax Capital
Accounts attributable to such property; and further provided,
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however, that any other method allowable under applicable Treasury Regulations
may be used in connection with any contribution of property or following any
revaluation as may reasonably be determined by the Management Committee to
reflect the purpose and intention of this Agreement.
D. Any elections or other decisions relating to allocations
shall be made by the Members in any manner that reasonably reflects the purpose
and intention of this Agreement. Allocations pursuant to Sections 5.2.C. are
solely for purposes of federal, state and local income taxes and shall not
affect, or in any way be taken into account in computing, any Member's Capital
Account or share of profits, losses, other items or distributions pursuant to
any provision of this Agreement.
5.3. Upholding of Tax Benefits.
A. Notwithstanding any other provisions of this Article V,
Partner Nonrecourse Deductions attributable to a Partner Nonrecourse Debt for
the taxable year shall be allocated to the Member bearing the Economic Risk of
Loss for such Partner Nonrecourse Debt; provided, however, that if more than one
(1) Member bears the Economic Risk of Loss for such Partner Nonrecourse Debt,
the Partner Nonrecourse Deductions attributable to such Partner Nonrecourse Debt
shall be allocated to and among the Members, pro rata in the same proportions
that their Economic Risks of Loss bear to one another.
B. Notwithstanding any other provisions of this Article V, no
allocation of deduction or loss shall be made to a Member if it would result in
such Member having a negative balance in its Capital Account in excess of the
amount that it is required to restore on a liquidation of the Company (or of the
Member's interest in the Company). For purposes of determining a Member's
Capital Account (and the deficit amount that the Member is required to restore)
in applying the provisions of this Section 5.3., the anticipated adjustments,
allocations and distributions described in Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(4)-(6) shall be taken into account; and each Member shall
be deemed obligated to restore its deficit Capital Account balance to the extent
of its share of "partnership minimum gain", as defined in Treasury Regulation
Section 1.704-2(d)(1) and (k) ("Minimum Gain") and its share of "partner
nonrecourse debt minimum gain", as defined in Treasury Regulation Section
1.704-2(i)(3) and (k)(5) ("Partner Minimum Gain"). Any amount which cannot be
allocated to a Member pursuant to the provisions of this Section 5.3.B. shall
instead be allocated to the remaining Members. To the extent permitted by
Treasury Regulations Sections 1.704-2(h)(3) and (i)(6), the Management Committee
shall cause the Company to treat distributions of Available Cash as not
allocable to an increase in Minimum Gain or to an increase in Partner Minimum
Gain to the extent that such
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distributions do not cause or increase a deficit in the Capital Account of any
Member.
C. Notwithstanding any other provisions of this Article V and
in accordance with and pursuant to Treasury Regulation Section 1.704-2(f), if
there is a net decrease in the Company's Minimum Gain during any taxable year,
the Members shall be allocated, before any other allocation is made of Company
items for such taxable year, items of income and gain for such year (and, if
necessary, subsequent years) in an amount equal to each such Member's share of
the net decrease in Minimum Gain, if any, as determined pursuant to Treasury
Regulation Section 1.704-2(g)(2).
D. Notwithstanding any other provisions of this Article V and
in accordance with and pursuant to Treasury Regulation Section 1.704-2(i)(4), if
there is a net decrease in the Company's Partner Minimum Gain during any taxable
year, the Members shall be allocated, before any other allocation is made of
Company items for such taxable year under any other provision of this Article V
(other than under Section 5.3.C.), items of income and gain for such year (and,
if necessary, subsequent years) in an amount equal to each such Member's share
of the net decrease in Partner Minimum Gain, if any, as determined pursuant to
Treasury Regulations Section 1.704-2(i)(4).
E. Notwithstanding any other provisions of this Article V, in
the event that any Member unexpectedly receives an adjustment, allocation or
distribution described in clause (4), (5) or (6) of Treasury Regulation Section
1.704-1(b)(2)(ii)(d) that results in such Member having a negative balance in
its Capital Account in excess of the amount it is required to restore on a
liquidation of the Company (or of the Member's interest in the Company), or for
any other reason has a deficit Capital Account balance in excess of such amount,
such Member shall be allocated income and gain, before any other allocation is
made of Company items for such taxable year under any other provision of this
Article V (other than under Sections 5.3.C. and 5.3.D.), in an amount and manner
sufficient to eliminate such excess as promptly as possible.
F. It is the intent of the parties to this Agreement that the
chargeback provisions and the limitation on loss allocation provisions provided
herein satisfy the allocation of nonrecourse deduction rules provided in
Treasury Regulation Sections 1.704-2(b)(1) and (e), the allocation of partner
nonrecourse deduction rules of Treasury Regulation Section 1.704-2(i) and the
requirements of Treasury Regulation Section 1.704-1(b)(2)(ii)(d) (relating to
the alternate test for economic effect and "qualified income offset"). It is
further intended that the allocations under this Article V shall effect an
allocation for Federal income tax purposes in a manner consistent with section
704(b) of the Code and
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the regulations promulgated thereunder. If for any reason the allocations
contained in this Agreement shall conflict with the Treasury Regulations
promulgated under section 704 of the Code, the Members acknowledge that such
Regulations shall control.
5.4. Gain on Sale. Gains allocable to the Company from the
sale, exchange, abandonment, foreclosure or other disposition of Company
Property shall be allocated between the Members as follows:
(a) First, in accordance with Code Section 704(c)
and the Treasury Regulations thereunder, income, gain, loss and deduction with
respect to any property contributed (or deemed contributed pursuant to the
provisions of Code Section 708) to the capital of the Company shall, solely for
tax purposes, be allocated among the Members so as to take account of any
variation between the adjusted basis of such property to the Company for Federal
income tax purposes and its fair market value at the time of contribution;
(b) Second, gain shall be allocated to each of the
Members having a negative balance in its Capital Account to the extent and in
the ratios that such Members have negative balances in their Capital Accounts to
date until the balances in such Members' Capital Accounts equal zero;
(c) Third, to the Members as necessary to cause
the balances in their respective Capital Accounts to be in the same proportion
as the Members' Participation Percentage; and
(d) Fourth, to the Members in accordance with
their Participation Percentages.
ARTICLE VI
BOOKS AND RECORDS; TAX MATTERS
6.1. Accounting. Except as may be otherwise directed by the Management
Committee, the Company shall maintain its books and records on an accrual basis
and shall prepare (1) financial statements on the accrual method of accounting
and on a calendar year basis, in accordance with generally accepted accounting
principles, (2) an annual budget and monthly operating statement on forms and in
a format approved by the Management Committee, and (3) income tax returns on the
accrual method of accounting and on a calendar basis. Appropriate records will
be kept so that upon each closing of the Company books it is possible to
determine, among other items defined in this Agreement: (i) the amount of
capital actually contributed by each Member; (ii) the amount of cash or other
property distributed to each Member; (iii) the effect, if any, of all Company
items of income, gain, loss, deduction or credit on
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each Member's Capital Account; and (iv) the amount of the Members' Loans,
Capital Balances, Additional Capital Balances, Net Cash Flow, Net Refinancing
Proceeds, Net Sale Proceeds and Net Income. The depreciation method shall in
each case be the most accelerated method permissible under the Code for the
asset in question.
6.2. Statements.
A. Within sixty (60) days after the close of each Annual
Period, the Management Committee shall furnish or cause to be furnished to each
Member, with respect to such Annual Period, (1) a profit and loss statement, (2)
a statement of source and application of funds, (3) a Company balance sheet as
of the close of such Annual Period, and (4) such other statements showing in
detail each Member's interest in each of the items described in Section 6.1.
hereof. Unless otherwise agreed by the Management Committee, the foregoing
statements shall be audited by Deloitte & Touche or by another independent,
nationally recognized accounting firm selected by the Management Committee, and
shall be at the expense of the Company.
B. By the fifteenth business day of every month, the
Management Committee shall furnish or cause to be furnished to each Member an
unaudited statement showing the results of operations of the Company for the
preceding calendar month and the financial position at the close of such month,
the balance in each Member's Capital Account, the unpaid balance under the
obligations of the Company, a statement of Net Cash Flow for such month and the
use of operating funds for capital expenditures, and all other information
reasonably requested by a Member. Each such monthly statement shall reflect the
operations of the Company in accordance with accrual basis accounting principles
and practices, and show variances between the actual and budgeted amount on both
a monthly and a year-to-date basis for the current and previous calendar years.
A brief commentary on the results for the period will also be prepared and
included.
6.3. Inspection. All books of account and all other records to
the Company (including an executed counterpart of this Agreement and all
amendments hereto) shall at all times be kept for a period of seven (7) years at
the Company's place of business and may be inspected, audited, examined or
copied at any reasonable time by any Member.
6.4. Tax Matters.
A. The Management Committee shall cause, at Company expense,
to be prepared and filed all income tax returns for the Company on an accrual
basis and shall furnish copies thereof to all Members.
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B. In connection with the assignment of a Member's interest in
the Company permitted by Article VII hereof, the Management Committee shall at
the request of any Member, on behalf of the Company and at the time and in the
manner provided by Section 754 of the Code (or any successor section thereto)
and the Regulations thereunder, make an election to adjust the basis of Company
property in the manner provided in Sections 734(b) and 743(b) of the Code (or
any successor sections thereto) (a "Section 754 Election").
C. The Management Committee shall, on behalf of the Company,
elect to group all rental real estate as one rental real estate activity for
purposes of Sections 1.469-4(d)(5) and 1.469-9(h) of the Treasury Regulations
and shall, to the extent permitted by Section 1.469-4(d)(1) of the Treasury
Regulations group such rental real estate activity with all other trade or
business activities conducted by the Company.
D. For purposes of Section 1.752-3(a)(3) and all related and
ancillary provisions of the Treasury Regulations, "excess nonrecourse
liabilities" shall be allocated among the Members in accordance with their
respective Participation Percentages at the time any such determination is made,
and the Management Committee shall make all allocations and distributions under
this Agreement in a manner consistent with such allocations.
E. EPL shall be the "Tax Matters Partner" for Code purposes
and shall notify the Members of any audit or other matter which it is notified
of, or becomes aware of, provided, however, that the Tax Matters Partner, unless
approved by the Management Committee, shall not have the right (1) to extend the
statute of limitations or any period of limitations with respect to the Company
in any matter; (2) to agree to any settlement of any tax matter affecting the
Company; (3) to file any petition for judicial review, or any other judicial
proceeding with respect to the Company in any matter; or (4) to file any
requests for administrative review or adjustment, or other administrative
relief, on behalf of the Company, in any matter. The provisions of this Section
6.5.E. shall survive the termination of the Company or the termination of any
Member's interest in the Company and shall remain binding on the Members for the
period of time necessary to resolve any and all income tax controversies
relating to the Company.
F. If the Code or any provision of state or local law requires
the Company to withhold any tax with respect to a distributive share of Company
income, gain, loss, deduction or credit, or a distribution of cash or property,
the Company shall withhold and pay the tax. If at any time the amount required
to be withheld exceeds the amount that would otherwise be distributed to the
Member to whom the withholding requirement applies, that Member shall make a
contribution to the Company equal to the excess of the
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amount required to be withheld over the amount, if any, that would otherwise be
distributed to that Member and which is available to be withheld. Any amount
withheld with respect to a Member shall be deducted from the amount that would
otherwise be distributed to that Member but shall be treated as though it had
been distributed to that Member.
ARTICLE VII
TRANSFER OF COMPANY INTERESTS; WITHDRAWAL OF MEMBERS;
BUY/SELL PROVISIONS.
7.1. Transfer of Participation Percentage.
A. No Participation Percentage or other interest of a Member
in the Company may be transferred or assigned (including any collateral
assignment or pledge of any interest in the Company), in whole or in part, by
such Member, and no transferee or assignee thereof may be admitted as a
substituted Member of the Company, unless and until, in each instance:
(1) A duly executed and acknowledged instrument of
assignment, setting forth the intention of the assignor that the assignee become
a substituted Member in its place, is delivered to the remaining Member(s);
(2) The assignor and assignee execute and
acknowledge such other instruments (if any) as the remaining Member(s)
reasonably may deem necessary or desirable to effect such admission, which may
include the written acceptance and adoption by the assignee of the provisions of
this Agreement and the assumption of any unperformed obligation of the assignor
(provided that such assignor shall not thereby be released from any of its
unperformed obligations that arose on or prior to the date of the assignment,
specifically including, without limitation, its obligations hereunder to make
Capital Contributions required prior to the date of the Assignment on the terms
herein provided);
(3) The written consent of the Majority Member(s)
of the Company (which may include the assigning or transferring Member), which
consent may be given or withheld as the Member(s) may determine in their sole
discretion, shall have been obtained;
(4) Such interest shall first be offered to the
remaining Member(s), pro rata in accordance with their Participation Percentages
(provided that by agreement among such remaining Members, such offer may be
accepted in varying proportions), for a period of thirty (30) days at a price
(the "Offer Purchase Price") equal to that intended to be offered by the selling
Member to third parties. If the remaining Member(s) elects to exercise the right
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of first offer granted hereby, it or they, as the case may be, must make an
offer on the entire interest intended to be offered by the selling Member. If
the selling Member has not received a written offer from the remaining Member(s)
on terms satisfactory to it within such thirty (30) day period, it shall then be
free, subject to the provisions of this Article VII, to market for sale the
interest offered to the remaining Member(s) on the terms of the offer. If the
selling Member fails to so dispose of its interest within one hundred eighty
(180) days from its right to do so, the first offer procedure established by
this Section 7.1.A.(4) shall be reinstated. The Offer Purchase Price payable
hereunder, in the event one or more Members elects to exercise the right of
first offer granted hereby, shall be payable in the manner and on the terms of
the third party offer; provided, however, that in the event that the Member
exercising the right of first offer is EPL, notwithstanding the terms or
agreements proposed by and between the other Member and a third party, the Offer
Purchase Price to be paid by EPL may, at the option of EPL, be paid in whole or
in part by the delivery by EPL to the selling Member of EPL Shares. Each EPL
Share shall, for purposes of determining the value thereof for payment upon
exercise by EPL of any right of first refusal, be valued at the Closing Price on
the date of delivery thereof in payment of the Offer Purchase Price, in whole or
in part.
B. Notwithstanding anything to the contrary contained in this
Article VII, EPL may from time to time transfer its interest in the Company, or
any part thereof, to an Affiliate or from such Affiliate back to EPL without the
consent of any other Member that might otherwise be required; provided, however,
that no such transferee shall be admitted as substitute Member in the Company
unless and until EPL complies with the notice and documentation requirements of
subsections 7.1.(A)(1) and (2) above, and the consent required under Subsection
7.1.(A)(3) above is obtained. Notwithstanding any such transfer, EPL shall
remain obligated for all of its obligations hereunder arising both before and
after such transfer, and shall, as a condition of the transfer, expressly
confirm its obligations to the remaining Members at the time of the transfer.
Following any such transfer by EPL of its interest in the Company as provided in
this Section 7.1(B), the rights of EPL under this Article VII to deliver EPL
Shares in payment upon certain events shall remain in effect, but only EPL
Shares, and not the shares of the transferee, shall be so deliverable, without
the consent of the recipient thereof.
C. Notwithstanding anything to the contrary contained in this
Article VII, AIT may from time to time transfer its interest in the Company, or
any part thereof, to any entity which is owned or controlled by the three
individuals who, as of the date hereof, own and control AIT, namely Xxxxx
Xxxxxxxxx, Xxx Xxxxxxx and Xxxxx Xxxxxxxxxxxxx or from such entity back to
AIT without the consent of any other Member that might otherwise be required;
provided, however, that no such transferee shall be admitted as substitute
Member in the Company
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unless and until AIT complies with the notice and documentation requirements of
Subsections 7.1.(A)(1) and (2) above, and the consent required under Subsection
7.1.(A)(3) above is obtained. Notwithstanding any such transfer, AIT shall
remain obligated for all of its obligations hereunder arising both before and
after such transfer, and shall, as a condition of the transfer, expressly
confirm its obligations to the remaining Members at the time of the transfer.
7.2. Expenses. Expenses of the Company or of any Member
occasioned by transfers of interests held by Members shall be reimbursed to the
Company or Member, as the case may be, by the transferring Member. Expenses of
the transferring Member and taxes incurred by any non-transferring Member are
not included within the foregoing reimbursement.
7.3. Withdrawal of Members. No Member may voluntarily withdraw
or retire from the Company except upon the assignment of its entire interest in
the Company (if and as permitted by this Article VII) or upon the surrender,
abandonment or other voiding of its interest pursuant to the next succeeding
sentence hereof. Any Member may at any time, by at least thirty (30) days prior
written notice delivered to all Members, renounce its interest in all current
and future profits, losses and distributions of the Company, and abandon to the
Company its capital contributions; provided, however, that any such surrender,
abandonment or other voiding shall not in any case affect the withdrawing
Member's obligations hereunder, including specifically, but without limitation,
each Member's respective obligations under Article III hereof to continue to
make Additional Capital Contributions or Members' Loans as and to the extent
called for or otherwise required thereunder.
7.4. Death, Legal Incapacity, Dissolution or Bankruptcy of a
Member. Upon the death, legal incapacity, dissolution or bankruptcy of a Member,
subject to the terms, conditions and rights provided for under Section 7.6
hereof, its successor or assign will have all the rights of the Member for the
purpose of settling or managing its estate, and such power as the deceased,
incapacitated, dissolved or bankrupt Member possessed to constitute a successor
as an assignee of its interest in the Company and to join with such assignee in
making application to substitute such assignee as a substituted member.
7.5. Status of Interests Transferred. In any transfer,
assignment or conveyance (or retransfer, reassignment or reconveyance) of any
Participation Percentage herein by a Member to any other Member or other Person,
permitted by the express terms of this Agreement or by operation of law, the
transferee or assignee shall succeed to the same share of profits and losses of
the Company and the same Participation Percentages, distribution priorities and
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ownership rights as were incident to the interest so transferred, assigned or
conveyed.
7.6. Purchase Option.
A. For purposes of this Section 7.6., the term "Triggering
Event" shall mean, as respects any Member, the occurrence of any one or more of
the following:
(1) the voluntary filing of a notice or petition
with, or the voluntary commencement of an action or proceeding in, the
applicable court or other governmental authority to liquidate or dissolve that
Member, or the institution against that Member of an action to liquidate or
dissolve which is not dismissed within sixty (60) days;
(2) the bankruptcy of that Member within the
meaning thereof set forth in Section 8.1(b) hereof; and
(3) any Covered Transaction.
B. Upon the occurrence of a Triggering Event as respects any
Member, each other Member of the Company shall thereupon have the right and
option to purchase all or a portion of, as herein provided, the Participation
Percentage then held in the Company by the Member as respects whom the
Triggering Event occurred. Such right and option shall be exercisable at any
time by delivery of written notice of election (the "Notice of Election") to the
Member with respect to whom the Triggering Event occurred at any time prior to
the expiration of sixty (60) days after the date of the occurrence of the
Triggering Event, provided, however, that in the event that the occurrence of
the Triggering Event is concealed or not otherwise readily apparent, such period
shall be extended for a time co-extensive with the time of concealment or until
a date sixty (60) days after the time upon which the occurrence of the
Triggering Event became readily apparent.
C. As among the Members who exercise their right and option to
purchase all or any portion of the Participation Percentages, each Member shall
be entitled to purchase a pro rata portion thereof, based upon that Member's
Participation Percentage as a percentage of all Participation Percentages owned
by the remaining Members who exercise their respective rights and options to
purchase under this Section 7.6. (or in such other proportion as the remaining
Members may agree). The purchase and sale of the Participation Percentages as
contemplated by this Section 7.6. shall be consummated at a closing (the
"Closing") which will occur at the date, time and place designated in the Notice
of Election, which shall in any event be a day which is a business day not less
than thirty (30) nor more than forty (40) days after delivery of the Notice of
Election.
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D. If under the provisions of this Section 7.6., any Member
desires to exercise its right and option to purchase the Participation
Percentage of any other Member with respect to whom a Triggering Event has
occurred, the purchase price payable shall be determined as follows:
[See Exhibit D attached]
The purchase price, as so adjusted, shall be determined ten (10) business days
prior to closing and shall be subject to such post-closing adjustments as the
circumstances may require. The purchase price, as so adjusted, shall be paid at
the selling Member's option in cash, by certified check to the order of the
selling Member, or by wire transfer of immediately available funds to the
selling Member's account at the time of Closing; provided, however, that in the
event that the purchasing Member is EPL, the purchase price may be paid by EPL
through the delivery by EPL of cash or EPL Shares, or any combination thereof,
and any EPL Shares delivered in payment of the purchase price, or any portion
thereof, shall be valued at the Closing Price on the date of delivery. In the
event that there shall be at the time of the purchase one or more outstanding
Member's Loans by the selling Member to the Company, such Member's Loans,
including interest thereon accrued and unpaid, shall be purchased at par by the
purchasing Member for the principal amount thereof and accrued and unpaid
interest thereon as a condition precedent to such sale. The purchase price for
such Member's Loans shall be paid, at the selling Member's option, in cash, by
certified check drawn to the order of the selling Member, or by wire transfer of
immediately available funds to the selling Member's account; provided, however,
that in the event that the purchasing Member is EPL, the purchase price for the
Member's Loan may be paid by EPL through the delivery by EPL of cash or EPL
Shares, or any combination thereof, and any EPL Shares delivered in payment of
the purchase price for, or any portion thereof, shall be valued at the Closing
Price thereof on the date of delivery. At the Closing, the selling Member shall
deliver to the purchasing Member each note and bond evidencing such Member's
Loans and all documents securing the same and an assignment or satisfaction, at
the purchasing Member's option, in form acceptable to the purchasing Member.
E. On payment of the purchase price for the Participation
Percentage, the purchasing Member shall, at its option, either (i) obtain a
release of the selling Member from all liability, direct or contingent, by all
holders of Company debt, obligations or claims against the Company for which
such Member is or may be personally liable, except for any debts, obligations or
claims which are fully insured by the public liability insurers, or (ii) cause
all such debts, obligations or claims to be paid in full at Closing, or (iii)
deliver to the selling Member an agreement in
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form and substance satisfactory to the selling Member to defend, indemnify and
save the selling Member harmless from actions, claims or loss arising from any
debt, obligation or claim of the Company arising prior to the date of sale.
7.7. Take-Along. Notwithstanding anything to the contrary
contained in this Article VII, if the Majority Members (for purposes of this
Section, the "Transferor Member(s)") decide to sell all or any portion of their
Participation Percentages in a single transaction, or in a series of related
transactions, to a third party (including an affiliated group of persons or
entities), the Transferor Member(s) shall have the right to require each other
Member (the "Other Member(s)") to sell all or any portion of the Participation
Percentage held by such Other Member(s) on the same terms and conditions as
those on which the Transferor Member(s) are selling their Participation
Percentages to such third party, including but not limited to, the purchase
price and payment terms provided that the amount to be paid (whether directly by
the third party or inclusive of supplemental amounts paid or contributed to the
Other Member by the Transferor Member) equals or exceeds the amount which the
Other Member would receive on the basis of a valuation of the Company made in
accordance with Exhibit D hereto. At least ten (10) days prior to the proposed
transfer, the Transferor Member(s) shall give notice to each Other Member of the
intention to transfer and the intention of the Transferor Member to exercise its
rights under this Section 7.7 to require that the Other Member transfer its
Participation Percentages, together with a statement as to the portion of the
Participation Percentage of such Other Member to be transferred, and the
principal terms of the transfer, including the price and payment terms. Each
Transferor Member agrees to endeavor to discuss with the Other Members in
reasonable detail the proposed transaction, including but not limited to the
commercial reasonableness of the terms and conditions thereof, prior to
consummation thereof, but shall under no circumstances be required to delay the
consummation of the transaction in order to pursue such discussion. Each Member
hereby covenants and agrees that, upon receipt of the aforesaid notice, it will
take such actions and execute such documents and instruments as shall be
necessary or appropriate to consummate any transfer contemplated by this Section
7.7, and does hereby appoint each Transferor Member as his or its true and
lawful attorney in fact to execute and deliver on its behalf such documents and
instruments should it fail to do so in a timely or appropriate manner.
7.8. Terms Generally Applicable.
A. In connection with and pending any transfer contemplated by
Sections 7.6 or 7.7 hereof, each Member shall be entitled to any distributions
of Net Cash Flow from the Company until full and final consummation of the
transfer.
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B. At the closing on the sale of the Participation Percentage
of a Member as contemplated by Sections 7.6 or 7.7 hereof, unless otherwise
agreed, each selling Member shall execute an assignment of its interest in the
Company, free and clear of all liens, encumbrances and adverse claims, which
assignment shall be in form and substance reasonably satisfactory to the
Purchasing Member or third party purchaser, and such other instruments as the
Purchasing Member or third party purchaser shall reasonably require to assign
the Participation Percentage of the selling Member to such person or entity. For
any sale or transfer under Section 7.6 hereof, the purchasing Member may
designate the assignee of the Participation Percentage, which assignee may be,
but need not be, an affiliate of the purchasing Member.
C. It is the intent of the parties to this Agreement that the
requirements or obligations arising hereunder of one Member to sell its
Participation Percentage to or as directed by the other Member(s) shall be
enforceable by an action for a specific performance and shall be enforceable by
an action for specific performance of a contract, and each of the Members does
hereby acknowledge their respective Participation Percentages to be unique and
an appropriate subject of an action for specific performance. In the event that
any Member shall create or has suffered any unauthorized lien, encumbrance or
other adverse interest against the selling Member's interest in the Company, the
purchasing Member or the Member exercising its rights under Section 7.7 hereof
shall be entitled either to an action for specific performance to compel the
Member to have such defects removed, in which case the closing may be adjourned
for such purpose, or, at the enforcing Member's option, to an appropriate offset
against the purchase price, which offset shall include all reasonable costs
associated with enforcement under this Section 7.8(C).
D. At the election of Member purchasing the Participation
Percentage or exercising its rights under Section 7.7 hereof, the purchase and
sale of the Participation Percentage will be structured to avoid, if possible, a
termination of the Company for federal tax purposes and/or under the Act.
ARTICLE VIII
DISSOLUTION AND TERMINATION
8.1. Dissolution.
A. The Company will be dissolved:
(1) upon the withdrawal, removal, bankruptcy or
dissolution of a Member, unless the remaining Members unanimously agree to
continue the business of the Company (if more than one
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Member remains) within ninety (90) days after the occurrence of such event; or
(2) at 12:00 midnight on May 30, 2036;
provided, however, that the Company shall not terminate until its affairs have
been wound up and its assets distributed as provided herein.
B. As used in Sections 8.1.A. and 8.1.B. hereof, the term
"bankruptcy" shall mean (i) the commencement by a Member of a voluntary case
under any Chapter of the Bankruptcy Code (Title 11 of the United States Code),
as now or hereafter in effect, or the taking by a Member of any equivalent or
similar action by the filing of a petition or otherwise under any other federal
or state law in effect at the time relating to bankruptcy or insolvency, (ii)
the filing of a petition against a Member under any Chapter of the Bankruptcy
Code (Title 11 of the United States Code), as now or hereafter in effect, or the
filing of a petition seeking any equivalent or similar relief against a Member
under any other federal or state law in effect at the time relating to
bankruptcy or insolvency, and in either case the failure by such Member to
secure the discharge of any such petition within sixty (60) consecutive days
from the date of filing, (iii) the making by a Member of a general assignment
for the benefit of his, its or any of their creditors, (iv) the appointment of a
receiver, trustee, custodian or similar officer for a Member or for the property
of a Member and the failure by such Member to secure the discharge of such
receiver, trustee, custodian or similar officer within sixty (60) consecutive
days from the date of appointment, or (v) the admission in writing by a Member
of any inability to pay debts generally as they become due.
8.2. Appointment of Liquidating Member. Upon the dissolution
of the Company, if the Company's business is not continued pursuant to Section
8.1. hereof, subject in any event to the rights of any Member under Section 7.6.
hereof, the Management Committee or its designee shall liquidate the assets and
wind up the affairs of the Company on the terms hereinafter set forth.
8.3. Distributions and Other Matters. Promptly upon the
dissolution of the Company, if the Company's business is not continued pursuant
to Section 8.1. hereof, and in any event subject to the rights of any Member
under Section 7.6. hereof, the Management Committee will cause the assets of the
Company to be liquidated. After proper adjustment to the Capital Accounts
pursuant to Section 3.1. (giving effect to all contributions, distributions, and
allocations for all taxable years, including the taxable year during which such
liquidation occurs), the proceeds of the liquidation of the Company shall be
applied and distributed in the following order: (i) to the discharge of all of
the Company's
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debts and liabilities (whether by payment or the making of reasonable provision
for payment thereof), other than those to any of the Members, including expenses
of liquidation, (ii) to the setting up of any reserves which the liquidator may
deem reasonably necessary for any contingent liabilities or obligations of the
Company, (iii) to the payment and discharge of any debts and liabilities of the
Company to any of the Members, and (iv) to the Members to the extent of their
positive Capital Accounts.
8.4. Distributions of Property.
A. Upon liquidation, the Members may demand or receive
property other than cash in return for their respective contributions, loans or
advances or upon dissolution as provided herein, but only upon the written
approval of the Management Committee.
B. In the event that property is distributed (or deemed
distributed pursuant to the provisions of Code Section 708) by the Company to a
Member, the following special rules shall apply:
(1) the Capital Accounts of the Members shall be
adjusted as provided in Treasury Regulations Section 1.704-1(b)(2)(iv)(e) to
reflect the manner in which the unrealized income, gain, loss and deduction
inherent in such property (that has not already been reflected in the Members'
Capital Accounts) would be allocated to such Member if there were a taxable
disposition of such property for its fair market value on the date of
distribution; and
(2) the Capital Account of the Member who is
receiving the distribution of property from the Company shall be charged with
the fair market value of the property at the time of distribution (net of
liabilities secured by such distributed property that such Member is considered
to assume or take subject to under Code section 752).
8.5. Action During Liquidation; Statements of Account.
A. A reasonable time shall be allowed for the winding up of
the affairs of the Company in order to minimize any losses otherwise attendant
upon such a winding up. The Management Committee shall make final distributions
in liquidation of the Company in the manner set forth above before the later of
(1) the end of the taxable year in which the date of the liquidation of the
Company occurs, or (ii) 90 days after the date of the liquidation of the
Company. For this purpose, the date of the liquidation of the company shall be
the date on which the Company has ceased to be a going concern (within the
meaning of Treasury Regulation Section 1.704-1(b)(2)(ii)(g)).
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B. During the period of liquidation, the Management Committee,
as trustee for the benefit of all Members as tenants in common, will take any
and all action necessary or appropriate to complete such liquidation and
distribution as provided in this Article, having for such purpose all of the
powers enumerated in Article IV of this Agreement necessary or appropriate to
accomplish the same.
C. The Management Committee will prepare or cause to be
prepared a final statement of the accounts of the Company as of the date of
termination, and, as promptly as possible thereafter, a copy thereof will be
furnished to each Member. Such statement will set forth the actual or
contemplated application and distribution of the assets of the Company. Upon
completion of distribution as required hereby, a further statement for the
period of liquidation will be so prepared by the Management Committee and
furnished to each Member.
ARTICLE IX
REPRESENTATIONS, WARRANTIES AND COVENANTS
9.1. Representations and Warranties.
A. AIT represents and warrants to EPL and any and all other
Members as follows:
(1) AIT is a corporation, duly organized, validity
existing and in good standing under the laws of the State of California.
(2) The sole shareholders of AIT, and their
respective percentage interests in AIT, are: Xxxxx Xxxxxxxxx (60%); Minos
Athanassiadis (20%); and Xxx Xxxxxxx (20%), and no other person or entity holds
any beneficial interest of any kind or nature whatsoever in AIT, or any option,
warrant or right with respect to, or convertible into, any equity security or
equity interest therein.
(3) This Agreement has been duly and validly
executed and delivered by AIT and constitutes its legal, valid and binding
obligation, enforceable in accordance with the terms hereof, and no
authorization, consent, approval, license, exemption or other action by, and no
registration, qualification, designation, declaration or filing with, any
governmental body or agency is or will be necessary or advisable in connection
with the execution and delivery by AIT of this Agreement.
(4) Neither the execution and delivery of this
Agreement, nor the consummation of the transactions herein contemplated, nor the
performance of or compliance with the terms
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and conditions hereof, will conflict with or result in a breach of or default
under any agreement or instrument to which AIT, is a party or by which it or its
properties (now owned or hereafter acquired) may be subject or bound.
(5) There is no pending or (to their knowledge
after due inquiry) threatened proceeding by or before any court or governmental
agency against or affecting either AIT which, if adversely decided, would have
an adverse affect on the business, operations or conditions, financial or
otherwise, of AIT, or on the ability of AIT to perform its obligations hereunder
or otherwise contemplated hereby, and no proceeding is pending or threatened
against AIT under any Federal or State bankruptcy or insolvency law.
(6) AIT and each stockholder thereof has a net
worth sufficient to bear the economic risks of transactions contemplated hereby,
has sufficient knowledge and experience in financial matters to be capable of
evaluating the merits and risks of its participation in the transactions
contemplated hereby.
(7) The representations and warranties of AIT set
forth in the Contribution Agreement are incorporated fully herein by this
reference as though restated herein in full, and the same are hereby ratified
and confirmed.
(8) AIT has filed all federal, state, local and
foreign income, franchise, real and personal property, and other tax returns,
estimates and statements which were required to be filed, has paid all taxes
(whether income, sales, use, property, unemployment, social security, import
duties, export duties and/or other) as shown on said returns, estimates and
statements, and has made appropriate provision for the payment of all such taxes
where returns, estimates and statements are not yet required to be filed. All
said tax returns and statements correctly set forth and report the entire
liability of AIT for such taxes.
(9) AIT has no knowledge of any intention of any
of its key employees to sever employment arrangements with AIT, and has no
knowledge of any plan or intention of any of its principal customers to cancel
presently existing contracts or other material business arrangements or
relationship with AIT, or to take any other action which would adversely affect
the business, operation or anticipated earnings of AIT.
(10) There are no controversies pending or
threatened between AIT and any of its employees and AIT has not taken or failed
to take any action which would provide a reasonable basis for any such
controversy. AIT has complied with all laws relating to the employment of labor,
including any provisions thereof relating to wages, hours, collective bargaining
and the payment of social security and similar taxes, and AIT is not liable
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for any arrears of wages or any taxes or penalties for failure to comply with
any of the foregoing. AIT has no knowledge of any organizational efforts
presently being made or threatened by or on behalf of any labor union in respect
of AIT or its employees.
(11) The assets to be contributed by AIT pursuant
to the Contribution Agreement include and constitute all of the assets,
properties, licenses and other agreements which are presently being used or are
related to the operation by AIT of its existing business relating to the
processing of fresh corn, other than the agreements of lease by and between AIT
and its landlord for the premises in Somis, California occupied by AIT. AIT
further represents and warrants that attached hereto as Exhibit E, collectively,
is a complete description of its leasehold premises (the "Leasehold Premises")
in Somis, California, together with copies of all leases with respect thereto
(the "Leases"); that AIT is the named tenant under each of the Leases by
assignment from the prior tenants named therein, which assignment has been
expressly consented to and accepted by the landlord named therein; that AIT has
received affirmative assurances from each landlord named in the Leases that AIT
will be permitted to remain fully possessed of the Leasehold Premises for at
least two (2) years from the date hereof, as a tenant holding over in accordance
with the terms of the Leases; and that AIT has received no notice to vacate or
quit the Leasehold Premises or any portion thereof and has no knowledge of any
intention of any landlord under any of the Leases to deliver any such notice;
and that no demand has been made upon AIT to demolish or destroy any of the
structures located on the Leasehold Premises and AIT has no knowledge of any
intention on the part of any person or entity entitled to require the demolition
thereof, to enforce any rights in that regard.
(12) AIT has and expects to continue to have the
authority and resources (including without limitation the necessary capital) to
fully consummate in a timely fashion the transactions contemplated by this
Agreement and the other documents, instruments and agreements to be executed by
and between AIT and the Company concurrent with the execution and delivery of
this Agreement (including, without limitation, that certain Fresh Cut Corn
Processing Agreement, by and between the Company and AIT).
(13) None of the information and documents
furnished by AIT or its representatives to the Company or any other Member of
the Company in connection with the execution and delivery of this Agreement is
false or misleading in any material respect or contains any material
misstatement of fact or omits to state a material fact required to be stated to
make the statements therein not misleading. AIT has disclosed to the Company and
each of the other Members of the Company all information known to AIT which is
material and relevant to the execution and delivery of this Agreement and the
formation of the Company as contemplated hereby.
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B. EPL represents and warrants to AIT and any and all other
Members as follows:
(1) EPL is a corporation duly organized, validity
existing and in good standing under the laws of the State of Colorado.
(2) This Agreement has been duly and validly
executed and delivered by EPL and constitutes the legal, valid and binding
obligation of EPL, enforceable in accordance with the terms hereof, and no
authorization, consent, approval, license, exemption or other action by, and no
registration, qualification, designation, declaration or filing with, any
governmental body or agency is or will be necessary or advisable in connection
with the execution and delivery by EPL of this Agreement.
(3) Neither the execution and delivery of this
Agreement, nor the consummation of the transactions herein contemplated, nor the
performance of or compliance with the terms and conditions hereof, will conflict
with or result in a breach of or default under any agreement or instrument to
which EPL is a party or by which its properties (now owned or hereafter
acquired) may be subject or bound.
(4) There is no pending or (to its knowledge after
due inquiry) threatened proceeding by or before any court or governmental agency
against or affecting EPL which, if adversely decided, would have a material
adverse affect on the business, operations or conditions, financial or
otherwise, of EPL, or on the ability of EPL to perform its obligations
hereunder.
(5) EPL has a net worth sufficient to bear the
economic risks of the transactions contemplated hereby, has sufficient knowledge
and experience in financial matters to be capable of evaluating the merits and
risks of participation in the transactions contemplated hereby.
ARTICLE X
NOTICES AND COMMUNICATIONS
10.1. Notices. All notices, demands, requests, calls and other communications
required by or permitted under this Agreement shall be in writing (whether or
not a writing is expressly required hereby) and shall be directed as follows:
A. If to EPL: EPL Technologies, Inc.
200 Four Falls Xxxxxxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxxxxxxxxxx, XX 00000
38
45
ATTN: President
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
With a copy to: Xxxxxxx X. Xxxxx, Esquire
Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
B. If to AIT: Agricultural Innovation & Trade, Inc.
0000 Xxxxx Xxxx
Xxxxx, Xxxxxxxxxx 00000
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
10.2. Change of Address. Any Member may specify a different
address by sending to the Company and to each other Member a notice by
registered or certified mail of such different address. If the address of the
Company is changed, a written notice of such change of address shall be sent by
registered or certified mail to each other Member.
10.3. Time of Communications. Any notice, demand, request,
call or other communication required or permitted to be given or made to a
Member, any Manager or to the Company under this Agreement will be deemed given
or made on the earlier of: (1) when delivered to or received by such Member,
Manager or the Company, as the case may be, at its address, by hand delivery, by
overnight delivery service or by facsimile transmission (provided, if by
facsimile transmission, such transmission has been followed by an additional
delivery sent by registered or certified mail to such Member, Manager or the
Company on the same day as the facsimile transmission), or (2) when mailed to
such Member, Manager or to the Company, as the case may be, at its address by
registered or certified mail, postage prepaid, return receipt requested.
ARTICLE XI
MISCELLANEOUS
11.1. Default. If a Member materially defaults in the
performance of its obligations under this Agreement, and if such default is not
cured within ten (10) days after notice of default is given by any Manager,
Executive Officer or other Member to the defaulting Member for a default that
can be cured by the payment of money, or within thirty (30) days after notice of
such default is given to the defaulting Member for any other default, then the
non-defaulting Member shall be entitled to pursue any and all rights and
39
46
remedies available to them in respect of that default provided, however, that
any such claim, demand or exercise of rights or remedies (other than a claim for
specific performance which may be brought in a court of competent jurisdiction)
shall be pursued in an arbitration proceeding pursuant to Section 11.3. hereof.
11.2. Confidentiality. Any proprietary or confidential
technical or business information or know how of the Company, or of any Member,
which is disclosed to the Company, to any other Member, or to any Manager or
Executive Officer in connection with the business and operations of the Company,
whether directly or indirectly or pursuant to a contractual arrangement by and
between any Member and the Company, including customer lists, contractor lists,
marketing methods and plans, data and know-how (including proprietary and
confidential information, data and know-how relating to the development,
manufacturing and marketing of food processing technology that facilitates the
maintenance of integrity of fresh cut corn and corn products, owned by EPL)
shall be treated by the Company and by each other Member as the proprietary and
confidential information of the disclosing Member or, if the Company is the
disclosing party, the proprietary and confidential information of the Company,
and will not be disclosed, communicated, divulged, or used, by the Company or
the recipient thereof for any purpose or purposes other than in furtherance of
the business and affairs of the Company and, in any event, any confidentiality
agreement entered into by the Company shall be similarly binding and enforceable
as against each Member and their respective officers, agents and employees;
provided, however that any such proprietary information may be disclosed to any
officer, employee or agent of any Member if and so long as each such individual
recipient is bound to the Member by confidentiality obligations no less
restrictive than the terms hereof. Each Member does hereby covenant and agree to
be fully responsible for the maintenance by its employees, representatives and
agents (including the Managers and Executive Officers appointed by it or on its
behalf hereunder) of confidentiality as required of each Member hereunder.
Notwithstanding the foregoing, no obligation of confidentiality shall relate to
any information which is received from a third party who has the right to
disclose such information, which is or becomes published or otherwise publicly
available without the fault of any Person or Entity bound hereby, or in respect
of any Person or Entity who or which is already in the possession thereof as of
the date hereof. In addition, any Member may disclose any such confidential
information to any governmental or other regulatory authorities to the extent
that such a disclosure is required by applicable law, regulation or court order;
provided that the disclosing party shall provide written notice to the other
parties and sufficient opportunity to object to such disclosure or to request
confidential treatment thereof. The obligations of confidentiality hereunder
shall be in addition to and shall not preclude, diminish or affect any separate
agreement or obligations of confidentiality now or hereafter arising between or
among any
40
47
Member(s) and the Company, and their respective agents and employees.
11.3. Arbitration. Except as otherwise provided under Section
11.6 hereof in respect of any creditor Member, any claim, controversy or dispute
arising out of or relating to this Agreement or any interpretation or breach
thereof or performance thereunder, including without limitation any dispute
concerning the scope of this arbitration provision, shall be settled by
submission to final, binding and non-appealable arbitration ("Arbitration") for
determination, without any right by any party to a trial de novo in a court of
competent jurisdiction, after a twenty-five (25) calendar day waiting period
(the "Waiting Period"). During the Waiting Period, the parties shall work
reasonably and in good faith and shall use their best efforts to amicably
resolve the claim, controversy or dispute. The Arbitration and all pre-hearing,
hearing, post-hearing arbitration procedures, including those for Disclosure and
Challenge, shall be conducted in accordance with the Commercial Arbitration
Rules of the American Arbitration Association in Wilmington, Delaware. The party
which does not prevail in the Arbitration shall be responsible for all fees and
expenses incurred in connection with the Arbitration, including, without
limitation, reasonable attorney's fees. Notwithstanding the foregoing, the
parties specifically reserve the right to seek a temporary judicial restraining
order, preliminary injunction, or other similar short term equitable relief from
a court of law having competent jurisdiction, and grant the arbitration tribunal
the right to make a final determination of the parties' rights, including
whether to make permanent or dissolve such court order. No party shall bring a
civil action seeking enforcement or any other remedy founded on this Agreement.
11.4. Filings. The Members agree that they shall from time to
time sign, acknowledge and file any certificates, instruments and documents, as
well as amendments thereto, required under the laws of the State of Delaware or
any state or other jurisdiction in which the Company is doing or intends to do
business in connection with the use of the name of the Company by the Company,
including, without limitation, filing of amendments to the Articles of
Organization of the Company.
11.5. Inspections. Any Member shall have the full right and
privilege at any time, at its own cost and expense, to inspect all or any part
of Company property.
11.6. Members as Creditors. Any Member who is a bona fide
creditor of the Company as a lender thereto or by reason of any other
debtor/creditor relationship therewith (in each case with the approval of the
Management Committee as and to the extent required hereby; and specifically
including, without limitation, creditor status arising by reason of the making
of any Members' Loan) shall
41
48
be permitted, in the event of any breach thereof or default thereunder, to take
such action and to exercise and pursue such other rights, powers or remedies
against the Company and/or against any other obligor, which rights, powers or
remedies are available to such Member by law, in equity or by contract; and the
taking of any such action, the exercise and pursuit of any such right, power or
remedy, and the execution or foreclosure on any Company property in connection
therewith, shall each be understood to be for the benefit of the creditor-Member
only and shall not be deemed or understood to cause or permit a reconstitution
of the Company for the benefit of any other Member.
11.7. Independent Ventures. Any Member or any Affiliate of any
Member may engage in, or possess interests in, business ventures of any or every
nature and description, independently or with others, and whether such ventures
are identical in style or purpose with, or directly compete with, the Company or
not; and neither the Company nor any Member will have any rights by virtue of
this Agreement or the existence of this Company in or to such ventures or to the
income or profits derived therefrom or the right to restrict any Member from
initiating or pursuing to the fullest extent any such ventures; provided,
however, that the foregoing shall not relieve AIT of the obligations of AIT not
to compete with the Company contained in that certain Fresh-Cut Corn Processing
Agreement, dated on or about hereof, by and between AIT and the Company, nor
shall it limit the completion of the contribution by AIT of its existing corn
business to the Company pursuant to the Contribution Agreement.
11.8. Partial Invalidity. The invalidity or unenforceability
of a portion of this Agreement will not affect the validity or enforceability of
the remainder hereof.
11.9. Governing Law; Parties in Interest. This Agreement will
be governed by and construed according to the laws of the State of Delaware, and
will bind and inure to the benefit of the Members and each of their respective
successors and assigns.
11.10. Amendment. This Agreement may be amended only by the
unanimous written consent of all Members.
11.11. Execution in Counterparts. This Agreement may be
executed in counterparts, all of which taken together shall be deemed one
original.
11.12. Computation of Time. In computing any period of time
pursuant to this Agreement, the date of the act, notice, event or default from
which the designated period of time begins to run will not be included. The last
day of the period so computed will be included, unless it is a Saturday, Sunday
or a legal holiday in the State of Maryland, in which event the period runs
until the end
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49
of the next day which is not a Saturday, Sunday or such legal holiday.
11.13. Table of Contents; Titles and Captions. The Table of
Contents preceding this Agreement and all article, section or subsection titles
or captions contained herein are for convenience only and are not deemed part of
the context hereof.
11.14. Pronouns and Plurals. All pronouns and any variations
thereof are deemed to refer to the masculine, feminine, neuter, singular or
plural as the identity of the Person or Persons may require.
11.15. Exhibits. The Exhibits attached hereto form a part of
this Agreement and each is hereby incorporated herein by reference.
11.16. Entire Agreement. This Agreement and the Exhibits
hereto contain the entire understanding and agreement between the Members, and
supersede any prior understandings and agreements between them respecting the
subject matter hereof.
IN WITNESS WHEREOF, the Members have executed this Agreement,
under seal, effective as of the date first above written.
Witness/Attest: EPL TECHNOLOGIES, INC., a Colorado
corporation
/s/ Minos Athanassiadis By:/s/ Xxxx X. Xxxxxx (SEAL)
----------------------- ------------------------
Name: Name: Xxxx X. Xxxxxx
Title: Title: President
Agricultural Innovation & Trade,
Inc., a California corporation
/s/ Xxx Xxxxxxx By:/s/ Xxxxx Xxxxxxxxx (SEAL)
----------------------- ------------------------
Name: Xxxxx Xxxxxxxxx
Title: Treasurer/Secretary
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50
EXHIBIT A - 1
SCR LLC - WORK PLAN TO DECEMBER 1996
ACTIVITY START DATE RESPONSIBILITY
-------- ---------- --------------
Management team Monthly MA,JR,KP,VF
Medium Term Plan July-September ALL
Hire sales manager August 1 MA/KP
New account/region development August on New Manager/MA
Corn Fresh Process
Confirmation of initial trial July 12 JR/HK/BS
Fabrication of tank July 12 JR/HK/BS
Installation of tank August 1 JR
New Package Development
Overwrap August 1 RW/JL/MA
Bag Concept August 1 RW/JL/MA
Recyclable tray (Trader Joe's) October 1 RW/JL/MA
New Product Development
Cobettes July 12 JR/HK
Fresh kernels-initial review August 1 WR/JR
51
EXHIBIT A-2
NEW CORN CO
4 YEAR FORECAST 1995-1996
INCOME STATEMENT YEAR 2 - 1995
LAST UPDATE 10-Jul-96
US $ MONTH
JAN FEB MAR APR MAY JUN JUL
1996 1996 1996 1996 1996 1996 1996
SALES $ $ $ $ $ $ $
CASE % 20.00% 20.00% 20.00% 20.00% 20.00% 20.00% 20.00%
PROCESS % 35.00% 35.00% 35.00% 35.00% 35.00% 35.00% 35.00%
REV % 16.00% 16.00% 16.00% 16.00% 16.00% 16.00% 16.00%
VOLUME(CASES-48CT EQUIV) 0 0 0 0 20,000 27,000 25,000
AVERAGE PRICE/CASE $0.00 $10.00 $0.00 $0.00 $7.50 $9.75 $10.00
% Incr on ply -34.8% -37.3% -21.8%
---------------------------------------------------------------
VALUE 0 0 0 0 150,000 263,250 250,000
---------------------------------------------------------------
COST OF SALES Allon %
CORN COST 0 0 0 0 81,400 109,890 101,750
HARVEST/TRUCK COST/labor ($0.75/CASE) 0 0 0 0 15,000 20,250 18,750
FACILITY COST
DEPRECIATION EXPENSE (Per analysis) 0 0 0 0 4,407 4,407 4,407
RENTAL COST OF EQUIPMENT 0 0 0 0 2,111 2,111 2,111
INFRASTRUCTURE RENT 0 0 0 0 3,104 3,104 3,104
UTILITIES Process 0 0 0 0 4,076 5,502 6,095
REPAIRS & MAINTENANCE Process 0 0 0 0 2,144 2,894 2,680
WASTE DISPOSAL 0 0 0 0 7,686 10,376 9,607
LAB TESTING Process 0 0 0 0 543 734 679
FACILITY RENT Case 0 0 0 0 456 629 582
FACILITY MANAGER Process 0 0 0 0 1,189 1,605 1,486
SHIP/RECEIVE CLERKS Process 0 0 0 0 1,359 1,834 1,696
LOADING Process 0 0 0 0 1,970 2,659 2,482
SANITATION Process 0 0 0 0 3,569 4,819 4,462
ADMIN ON SITE Process 0 0 0 0 798 1,078 998
CORN FRESH 0 0 0 0 0 0 0
PACKING LABOR ($1.55/CASE) 0 0 0 0 31,000 41,850 38,750
TRAY ($0.59/CASE) 0 0 0 0 11,800 15,930 14,750
FILM ($0.50/CASE) 0 0 0 0 10,000 13,500 12,500
BOX/MISC ($0.91/CASE) 0 0 0 0 18,200 24,570 22,750
---------------------------------------------------------------
TOTAL COST OF SALES 0 0 0 0 200,820 267,740 248,520
---------------------------------------------------------------
GROSS MARGIN 0 0 0 0 (50,820) (4,490) 1,360
GM% ERR ERR ERR ERR -33.9% -1.7% 0.6%
OVERHEAD EXPENSES
ADMINISTRATION COSTS
Office labor Rev 787 787 787 787 787 787 787
Insurance Rev 853 853 853 853 853 853 853
Accounting/legal Rev 253 253 253 253 253 253 253
Branch Admin salaries Rev 1,827 1,827 1,827 1,827 1,827 1,827 1,827
Office equipment Rev 353 353 353 353 353 353 353
Office rent Rev 180 180 180 180 180 180 180
Postage/bank chgs/misc Rev 167 167 167 167 000 000 000
Telephone Rev 437 437 437 437 437 437 437
---------------------------------------------------------------
4,857 4,857 4,857 4,857 4,857 4,857 4,897
SELLING COSTS
Sales/Mktg salaries Rev 2,720 2,720 2,720 2,720 2,720 2,720 2,720
Payroll burden 1,034 1,034 1,034 1,034 1,034 1,034 1,034
Promotional expense/travel 0 0 0 0 0 0 0
Broker fees (2%) 0 0 0 0 3,000 5,265 5,000
Corn salesmanager - salary/benefits
($100k total cost) 0 0 0 0 0 0 0
Packaging/design 0 0 0 0 500 500 500
---------------------------------------------------------------
TOTAL OVERHEADS 8,611 8,611 8,611 8,611 12,111 14,376 14,111
---------------------------------------------------------------
NET P BIT (8,611) (8,611) (8,611) (8,611) (62,931) (18,856)(12,731)
US $ MONTH
AUG SEP OCT NOV DEC TOTAL
1996 1996 1996 1996 1996 1996
SALES $ $ $ $ $ $
CASE % 20.00% 20.00% 20.00% 20.00% 20.00%
PROCESS % 35.00% 35.00% 35.00% 35.00% 35.00%
REV % 16.00% 16.00% 16.00% 16.00% 16.00% 12,500,000
VOLUME(CASES-48CT EQUIV) 27,000 30,000 32,500 34,600 10,000 206,100
AVERAGE PRICE/CASE $11.00 $13.00 $13.00 $13.50 $14.00 $11.55
% Incr on ply -5.4% 22.2% 5.7% -2.0% 6.1% -7.0%
---------------------------------------------------------------
VALUE 297,000 390,000 422,500 467,100 140,000 2,379,650
---------------------------------------------------------------
COST OF SALES Allon %
CORN COST 109,890 122,100 132,275 140,622 40,700 838,827
HARVEST/TRUCK COST/LABOR ($0.75/CASE) 20,250 22,500 24,375 25,950 7,500 154,576
FACILITY COST
DEPRECIATION EXPENSE (Per analysis) 4,407 4,407 4,407 4,407 4,407 35,253
RENTAL COST OF EQUIPMENT 2,111 2,111 2,111 2,111 2,111 16,884
INFRASTRUCTURE RENT 3,104 3,104 3,104 3,104 3,104 24,831
UTILITIES Process 5,502 6,114 6,623 7,051 2,038 42,000 120,000
REPAIRS/MAINTENANCE Process 2,894 3,216 3,484 3,709 1,072 22,094 63,125
WASTE DISPOSAL 10,376 11,528 12,489 13,296 3,843 79,200 79,200
LAB TESTING Process 734 815 883 940 272 5,600 16,000
FACILITY RENT Case 629 699 757 806 233 4,800 24,000
FACILITY MANAGER Process 1,605 1,783 1,932 2,057 594 12,250 35,000
SHIP/RECEIVE CLERKS Process 1,834 2,038 2,208 2,350 679 14,000 40,000
LOADING Process 2,658 2,955 3,201 3,408 985 20,300 58,000
SANITATION Process 4,819 5,354 5,600 6,175 1,785 36,782 105,092
ADMIN ON SITE Process 1,078 1,197 1,297 1,381 399 8,225 23,500
CORN FRESH 0 0 0 0 0 0
PACKING LABOR ($1.55/CASE) 41,850 46,500 50,375 53,630 15,500 319,455
TRAY ($0.59/CASE) 15,930 17,700 19,175 20,414 5,900 121,599
FILM ($0.50/CASE) 13,500 15,000 16,250 17,300 5,000 103,050
BOX/MISC ($0.91/CASE) 24,570 27,300 29,575 31,485 9,100 187,551
-----------------------------------------------------------
TOTAL COST OF SALES 267,740 296,420 320,320 340,396 105,221 2,047,276
-----------------------------------------------------------
GROSS MARGIN 29,260 93,580 102,180 126,704 34,779 332,574 332,574
GM % 9.9% 24.0% 24.2% 27.1% 24.8% 14.0%
OVERHEAD EXPENSES
ADMINISTRATION COSTS
Office labor Rev 787 787 787 787 787 9,440 59,000
Insurance Rev 853 853 853 853 853 10,240 64,000
Accounting/legal Rev 253 253 253 253 253 3,040 19,000
Branch Admin salaries Rev 1,827 1,827 1,827 1,827 1,827 21,920 137,000
Office expenses Rev 353 353 353 353 353 4,240 26,500
Office rent Rev 180 180 180 180 180 2,160 13,500
Postage/bank chgs/misc Rev 167 167 167 167 167 2,000 12,500
Telephone Rev 437 437 437 437 437 5,248 32,800
-----------------------------------------------------------
4,857 4,857 4,857 4,857 4,857 58,288
SELLING COSTS
Sales/Mktg salaries Rev 2,720 2,720 2,720 2,720 2,720 32,640 204,000
Payroll burden 1,034 1,034 1,034 1,034 1,034 12,403 77,520
Promotional expense/travel 0 0 0 0 0 0 24,000
Broker fees (2%) 5,940 7,800 8,450 9,342 2,800 47,597 24,000
Corn salesmanager - salary/benefits
($100k total cost) 0 0 0 0 0 0 100,000
Packaging/design 500 500 500 500 500 4,000
-----------------------------------------------------------
TOTAL OVERHEADS 15,051 16,911 17,561 18,453 11,911 154,928 154,928
-----------------------------------------------------------
NET P BIT 14,209 76,699 84,618 108,251 22,868 177,645 177,640
00
XXXXXXX X
XXXXX XX XXXXXXXX
CERTIFICATE OF FORMATION
OF
NEWCORNCO LLC
FIRST: The name of the limited liability company is NewCornCo LLC (the
"Company").
SECOND: The address of the registered office of the Company in the State of
Delaware is c/o The Corporation Trust Company, Corporation Trust Center, 0000
Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000. The name of the Company's registered
agent at such address is The Corporation Trust Company.
THIRD: The latest date on which the Company is to dissolve is May 30, 2026.
IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Formation this 18th day of July, 1996.
EPL TECHNOLOGIES, INC.
By: /s/ Xxxx X. Xxxxxx
---------------------------
Name: Xxxx X. Xxxxxx
Title: President
Authorized Person
53
EXHIBIT C
CONTRIBUTION AND EXCHANGE AGREEMENT
THIS CONTRIBUTION AND EXCHANGE AGREEMENT (this "Agreement") dated as of
______________ ___, 199__ is made by and between AGRICULTURAL INNOVATION &
TRADE, INC., a California corporation ("Contributor"), and NEWCORNCO LLC, a
Delaware limited liability company ("Transferee"). Contributor and Transferee
may be referred to herein individually as a "Party" and collectively as the
"Parties".
RECITALS
A. Contributor and EPL Technologies, Inc., a Colorado corporation
("EPL"), are parties to a certain Operating Agreement of NewCornCo LLC, dated as
of even date herewith (the "Operating Agreement"), pursuant to which the
Contributor and EPL have agreed to form, and become members of, the Transferee.
B. Pursuant to Section 3.2 of the Operating Agreement,
Contributor has agreed to make a certain initial Capital Contribution to the
Transferee in exchange for a forty-nine percent (49%) Participation Percentage
in the Transferee (the "AIT Interest").
C. Transferee and Contributor now desire to set forth the terms
and conditions of the contribution transaction.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and promises
hereinafter set forth, the parties to this Agreement do hereby mutually covenant
and agree as follows:
1. Contribution and Exchange.
1.1 Conveyance. Contributor hereby irrevocably contributes,
conveys, transfers and assigns to Transferee in exchange for the Consideration
(as defined in Section 1.2) all of Contributor's right, title, and interest in
and to the property, tangible and intangible, of Contributor described on
Exhibit A hereto (collectively, the "Contributed Property"). It is expressly
understood and agreed that the contributed Property includes, not only tangible
property and equipment, but also all intangibles and other property, including
books, records, customer lists, goodwill, know-how and the like, relating to
Contributor's heretofore ongoing business of producing, purchasing or otherwise
acquiring, and manufacturing, processing and marketing, fresh (i.e. other than
canned or frozen) corn.
54
1.2 Evidence of Transfer. The conveyance of the Contributed
Property as set forth herein shall be evidenced by this Agreement and by a Xxxx
of Sale, the form of which is attached hereto as Exhibit B, to be simultaneously
executed herewith and delivered to Transferee. Contributor's conveyance of the
Contributed Property is absolute and irrevocable, and Contributor hereby
relinquishes all rights with respect to the Contributed Property, and expressly
acknowledges that it has no further right to sell, pledge, or otherwise dispose
of the Contributed Property.
1.3 Consideration. In exchange for Contributor's contribution
of the Contributed Property to Transferee, Transferee hereby issues to
Contributor the AIT Interest (the "Consideration").
1.4 Treatment as Contribution. The conveyance to Transferee
set forth in this Agreement shall constitute a "Capital Contribution" pursuant
to Article III of the Operating Agreement of NewCornCo LLC and is intended to be
governed by Section 721(a) of the Internal Revenue Code of 1986, as amended.
2. Representation and Warranties of Contributor.
Contributor hereby represents and warrants to Transferee as follows:
2.1 Organization, Power, Authority and Qualification.
Contributor is a corporation duly organized, validly existing and in good
standing under the laws of California and has the requisite power and authority
to carry on its business as it is now being conducted and to consummate the
transactions contemplated by this Agreement. Contributor is qualified to do
business and is in good standing in each state in which the Contributed Property
is located, if such qualification is required by applicable law. Contributor has
delivered to Transferee true and correct copies of its organizational documents
and a complete and accurate list of its stockholders and directors.
2.2 Authority Relative to This Agreement. All actions of
Contributor necessary to authorize the execution, delivery and performance of
this Agreement by Contributor have been taken, and no other proceedings are
necessary to authorize the execution and delivery by Contributor of this
Agreement and the consummation by Contributor of the transactions contemplated
hereby.
2.3 Compliance With Other Instruments; No Breach or Default.
Except for the waivers, consents and permissions provided by Contributor to
Transferee (collectively, the "Consents"), neither the execution and delivery of
this Agreement by Contributor nor the consummation by Contributor of the
transactions contemplated hereby, nor compliance by Contributor with any of the
- 2 -
55
provisions hereof will (i) conflict with or result in any breach of any
provisions of the charter or bylaws of Contributor or applicable corporate law,
(ii) result in a violation or breach of, or constitute (with or without due
notice or lapse of time or both) a default (or give rise to any right of
termination, cancellation or acceleration) under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, lease, license, contract,
agreement, easement, restriction or other instrument or obligation to which
Contributor is a party or by which Contributor or the Contributed Property may
be bound or (iii) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to Contributor or the Contributed Property.
2.4 Binding Obligation. This Agreement has been duly and
validly executed and delivered by Contributor to Transferee and constitutes a
valid and binding agreement of Contributor, enforceable against Contributor in
accordance with its terms, except that such enforcement may be subject to
bankruptcy, conservatorship, receivership, insolvency, moratorium or similar
laws affecting creditors' rights generally and to general principles of equity.
2.5 Title. Contributor has good and marketable title to the
Contributed Property, and neither the Contributed Property, nor any part,
portion or item thereof, is subject to any imperfections in title, lien,
mortgage, encumbrance, pledge, claim, charge, option, defect, preferential
purchase rights or other encumbrances (collectively referred to herein as
"Liens").
2.6 Insurance. Contributor currently has in place fire,
casualty, hazard and other reasonably required insurance coverage with respect
to the Contributed Property. Each of its insurance policies with respect to the
Contributed Property is in full force and effect and all premiums due and
payable thereunder have been fully paid when due.
2.7 Litigation. There are no claims, actions, suits,
proceedings or investigations pending or, to Contributor's knowledge, threatened
against Contributor, or any properties or rights of Contributor, or against the
Contributed Property, before any court or administrative, governmental or
regulatory authority or body, domestic or foreign. Neither Contributor nor the
Contributed Property is subject to any order, judgment, injunction or decree of
any court, tribunal or other governmental authority (other than generally
applicable laws, rules and regulations).
2.8 Taxes. All tax or information returns required to be
filed on or before the date hereof by or on behalf of Contributor have been
filed through the date hereof in accordance with all applicable laws, and there
is no action, suit or proceeding pending against, or with respect to,
Contributor or the
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56
Contributed Property in respect of any tax, nor is any claim for additional tax
asserted by any such authority; and all taxes required to be paid by Contributor
as of the date hereof have been paid.
2.9 Condition of Contributed Property. There is no material
defect in the physical condition of the Contributed Property and all items of
equipment and machinery comprising the Contributed Property is in good working
order, ordinary wear and tear expected, and fit for the purpose or purposes for
which designated.
2.10 Disclosure. No representation or warranty by the
Contributor in this Agreement or any Exhibit hereto, or in any list, statement,
document or information set forth in or attached to any schedule delivered
pursuant hereto, contains any untrue statement of material fact or omits or will
omit any material fact necessary in order to make the statements contained
herein or therein not misleading.
3. Transfer Taxes and Recording Fees. Transferor shall pay for
the cost of and any all sales taxes, real property transfer taxes, documentary
stamps and any and all recording or other taxes and fees of any kind or nature
whatsoever associated with the consummation of the transactions contemplated
hereby.
4. Indemnification.
Contributor hereby covenants and agrees to indemnify and hold harmless
the Transferee for any breach by Contributor of any representations or
warranties made hereunder. The representations and warranties set forth herein
shall survive for one year following the Closing, and the amount of
Participation Percentages received in exchange for the Contributed Property
shall be subject to acquisition by the Transferee as payment for breaches of
such representations and warranties, or the enforcement of such indemnity.
5. Notices.
5.1 Whenever any Party hereto shall desire to give or serve
any notice, demand, request, approval or other communication, each such
communication shall be in writing and shall be personally, by telecopy, by
messenger or by mail, postage prepaid, addressed as set forth below:
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57
If to Transferee:
NewCornCo LLC
c/o EPL Technologies, Inc.
200 Four Falls Xxxxxxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Telephone No: 000-000-0000
Facsimile No: 000-000-0000
Attn: President
If to Contributor:
Agricultural Innovation & Trade, Inc.
0000 Xxxxx Xxxx
Xxxxx, Xxxxxxxxxx 00000
Telephone No: 000-000-0000
Facsimile No: 000-000-0000
Attn: President
5.2 Service of any such communication shall be deemed made on
the date of actual receipt at such address (on the date that receipt is
refused). Any Party hereto may from time to time, by notice in writing served
upon the other Party as aforesaid, designate a different address to which, or a
different person or additional persons to whom, all communications are
thereafter to be made.
6. Miscellaneous.
6.1 Governing Law. This Agreement shall be governed by the
laws of the State of Delaware, without regard to principles of choice of law or
conflict of law.
6.2 Attorneys' Fees. In the event of any litigation between
Transferee and Contributor concerning the transactions contemplated hereby, the
prevailing party shall be entitled to reasonable attorneys' fees and costs. The
attorneys' fee award shall not be computed in accordance with any court fee
schedule, but shall be such as to fully reimburse all reasonable attorneys' fees
incurred in good faith.
6.3 Counterparts. This Agreement may be executed by Transferee
and Contributor in counterparts, each of which shall be deemed an original, and
all of which together shall constitute but one and the same instrument.
6.4 Assignment. This Agreement may not be assigned by either
Party, in whole or part, whether by operation of law or otherwise, without the
prior written consent of the Contributor (if
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58
the assignor is the Transferee) or the Transferee (if the assignor is the
Contributor), which consent shall not be unreasonably withheld (provided that
Transferee shall be permitted to assign its rights hereunder to any affiliate).
6.5 Benefit of Agreement. This Agreement shall be binding upon
and shall inure to the benefit of the Parties hereto and their permitted
successors and assigns. No person other than the parties hereto is or shall be
entitled to bring any action to enforce any provision of this Agreement against
any of the Parties hereto or their permitted successors and assigns. The
covenants and agreements set forth in this Agreement shall be solely for the
benefit of the Parties hereto and their permitted successors and assigns.
6.6 Severability. If any part of any provision of this
Agreement or any other agreement, document or writing given pursuant to or in
connection with this Agreement shall be invalid or unenforceable under
applicable law, such part shall be ineffective to the extent of such invalidity
or unenforceability only, without in any way affecting the remaining parts of
such provisions or the remaining provisions of said agreement so long as the
economic and legal substance of the transaction contemplated hereby is not
affected in any manner materially adverse to any Party.
6.7 Headings. The table of contents and the section headings
used in this Agreement are included herein for convenience of reference only and
shall not constitute a part of this Agreement for any other purpose.
IN WITNESS WHEREOF, this Agreement has ban executed as of the day and
year first written above.
CONTRIBUTOR:
AIT, INC.
By: /s/ Xxxxx Xxxxxxxxx (SEAL)
Name:
Title:
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59
TRANSFEREE:
NewCornCo LLC, a Delaware limited
liability company
By: (SEAL)
Name: Xxxx X. Xxxxxx
Title: Manager
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60
EXHIBIT A
ASSETS
NEW CORN CO. 7/8/96
EXPANDED ASSET LIST PAGE 1
HOPPERS
Two infeed hoppers are built of mild steel with a galvanized product
contact area. The hoppers were fabricated by Nick and Son welding of Oxnard
California. Both hoppers are constructed to allow a bin of corn to be lifted
with a forklift and rotated over the receiver. A twenty four inch conveyor then
elevates the corn to the individual corn husker which it serves.
S/N: N/A ID: F033 VALUE: $21,500
HUSKERS
Two four lane corn huskers originally built by Xxxxxx Manufacturing of
Columbus, Wisconsin for the canning industry were purchased used by Xxxxxxxxx
Ranches. Both machines have been reconditioned to factory specification or
modified to allow the husking of fresh market sweet corn. The huskers are
fitted with a distribution conveyor which receives product from the in feed
hoppers and an oscillating feed pan which distributes product to the husking
bed.
S/N: 00-0000-00, 00-0000-00 ID: QUOTE 5138-96.5 F030, F032
VALUE: $32000
TRANSITION CONVEYOR
The transition conveyor is of all stainless steel construction with food
grade belting for product transfer. The conveyor was originally built by Dave's
Welding Service of Ventura, California. The conveyor is used for the initial
grading of corn and to transfer product from the corn huskers to the rotary
grading table which services the butt cutters.
S/N: N/A ID: QUOTE 12-8-95 #3 VALUE: $8500
ROTARY GRADING TABLE
Constructed of stainless steel the rotary table is four feet in diameter.
Turning at five revolutions per minute the table serves as a surge between
the corn huskers and the butt cutters and as a secondary inspection point for
product. The table was fabricated by Nick and Son welding.
S/N: N/A ID: INVOICE 2197 VALUE: $2976
BUTT CUTTERS
Butt cutter number one was originally built by Sunshine Systems of
Boulder, Colorado. This saw became the design vehicle for saw number two. Saw
number one in it's current form is a single lane saw setup to cut larger ears
of corn for three ear packs. The saw is of all stainless steel construction
with food grade interlock belting used to transfer the product.
S/N: N/A ID: F010 VALUE: $10900
61
NEW CORN CO.
EXPANDED ASSET LIST PAGE 2
BUTT CUTTERS (CONTINUED)
Machine number two is a two lane saw built using all stainless steel
construction and food grade interlock belting. Saw number two was fabricated at
Xxxxxxxxx Ranches shop in Somis, California. The primary function of saw number
two is to cut ears for the four pack corn, however this machine is built to
make quick configuration changes to allow for variations in daily sales.
S/N: N/A ID: N/A VALUE: $30100
PACKING LINE
Final grading and packing are performed on the packing line. The all
stainless steel conveyor is built to enable four people to pack corn at any one
time. Corn is carried on the two foot wide belt and placed into the appropriate
tray by the packers. Trays of corn are then accumulated on a roller conveyor
which acts as a product surge between packing and the overwrap machines. This
machine was built by Dave's welding service.
S/N: N/A ID: QUOTE 12-08-95 #1 VALUE: $6000
WRAPPING MACHINES
Overwrapping is accomplished by two Exact 815 automatic overwrap machines.
The overwrap machines were built by Exact Equipment of Levittown, Pennsylvania.
The machines have the ability to wrap trays as large as a 10x14 with
registered or continuous print film. Mechanically these machines meter film off
rolls, pull it over a package which is then pushed through the film at which
time the remainder is folded and sealed underneath the package.
S/N: D93F1044, D95D1929 ID: F011, F027, F029 VALUE: $57000
TRASH SYSTEM
The trash system begins in the packing house with a one foot by twenty
five foot conveyor which accumulates trash from both butt cutters and the
packing table. This conveyor delivers mostly ears or pieces of ears to a
grinder for reduction. Conveyor number one was built by Nick and Son welding.
The reduction grinder is a modified Bearcat built by Bearcat Manufacturing
modifications were done at Xxxxxxxxx ranches shop. Functionally this machine
reduces the volume of material which needs to be hauled away from the facility.
Directly after the grinder a combination of two three foot wide conveyors and
a two by seventy foot conveyor built by Nick and Son welding deliver waste
from the corn huskers to a waiting truck for disposal.
S/N: N/A ID: QUOTE 12-8-95 #2. QUOTE 2-15-96 #2 TWO QUANTITY, #5 & E032
VALUE: $30000
62
NEW CORN CO.
EXPANDED ASSET LIST PAGE 3
MECHANICAL SYSTEMS & ENGINEERING
The corn line which is made up of the above listed components is served
both by electricity and water. Plumbing has been done with schedule forty
galvanized steel pipe. Water is needed by the corn huskers and the but cutters
as well as for general sanitation.
Wiring has been done using rigid conduit and water tight seals in
combination with Nema-4 control panels and switches. All motors are TEFC or
TENV with wash down capability. Control switching uses IEC contactors and
overload relays safety interlocks have been incorporated at potential
pinch points. An emergency shut off system is accessible from all parts of the
line.
VALUE: $84000
NISSAN FORKLIFT
The transfer of bulk product to the corn processing line is accomplished
with a propane powered forklift. The Nissan Enduro 35 forklift is rated at 3500
lbs lifting capacity. The forklift is equipped with a rotator which allows
bins of bulk corn to be turned upside down into the infeed hoppers. Finished
corn is transferred to the holding cooler or truck in the same manner.
S/N: P35KLP ID: E020 VALUE: $24500
63
EXHIBIT A (Continued)
[PROVIDED, HOWEVER, that certain of the items described above (as further
indicated on the Schedule of Leases attached hereto as Exhibit 1) are leased to
Agricultural Innovation and Trade, Inc. ("Contributor") and, to the extent so
leased, a leasehold interest is being conveyed therein.]
TOGETHER WITH, each and every of the following, to the extent heretofore used or
otherwise relating to or beneficial to Contributor's business of growing,
causing to be grown, purchasing or otherwise acquiring, and processing,
marketing and selling, fresh corn or corn products (the "Business"):
(i) all procedure manuals, customer lists, advertising or promotional
literature or brochures, databases, know-how, computer software and any
confidential information which has been reduced to writing or any other media
relating to or arising out of the Business or the operation thereof;
(ii) contact lists and other lists relating to customers or potential
customers;
(iii) all rights (but none of the obligations) under all material
agreements of the Contributor in any way arising out of or relating to the
Business or the operation thereof.
(iv) all know-how and good will, tangible or intangible, arising from or
relating to the Business or the operation thereof;
(v) for so long as the Contributor remains a member of the Transferee,
the exclusive royalty-free right and license to the use of the trademark "Somis
Creek Ranches", together with design, and any other trademarks or trade names of
Contributor, for use by the Transferee in connection with the Transferee's
business, now or hereafter existing, relating to the purchasing or otherwise
acquiring, and processing, marketing and selling, fresh corn and corn products.
64
SCHEDULE OF LEASES
------------------
EXHIBIT 1 TO EXHIBIT A
----------------------
Prepared by XXXXXXXXX RANCHES 8/1/96
New Corn Co. LLC - Leases to be transferred from AIT, Inc.
----------------------------------------------------------------------------------------------------------------------
Contract Est Due Est Total
Number Description Date Cost Pmts Residual Liability Calculation
----------------------------------------------------------------------------------------------------------------------
528693 Husking Line, conveyors 7/26/95 15,000 14,042 1,500 15,542 9'390.86'4 years
529350 Two Conveyors 8/14/95 10,555 7,849 1 7,850 9'436.06'2 Years
----------------------------------------------------------------------------------------------------------------------
510412 Combo Cutters 4/29/93 10,888 4,730 1,039 5,819 60 months, 36 pd @ 214.99
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
6007023 Stretch Wrap 1 5/7/93 27,780 12,582 2,778 15,640 60 months, 36 pd @ 534.64
----------------------------------------------------------------------------------------------------------------------
527914 Stretch Wrap 2 5/27/93 27,465 25,457 2,746 28,203 60 months, 14 pd @ 553.41
----------------------------------------------------------------------------------------------------------------------
518950 Nissan Forklift 6/10/94 21,486 7,843 2,149 9,992 36 months, 24 pd @ 653.62
----------------------------------------------------------------------------------------------------------------------
$113,172 $72,783 $10,283 $83,046
============================================
65
EXHIBIT D
PRICES AND TERMS
The total Company valuation in relation to the calculation of the
purchase price payable under Section 7.6D shall be calculated as six (6) times
the earnings before tax ("EBT") of the Company. EBT shall be the average of the
EBT from the audited financial statements of the Company for the three
complete calendar years (or if financial statements for three complete calendar
years are not available, as many calendar years as are available) prior to the
date the price is calculated. The purchase price payable will then be the
respective share of the total Company valuation.
For these purposes, the term "EBT" shall be determined in accordance
with generally accepted accounting principles (with revenues being recognized
as services are performed or products delivered), and shall be taken from the
audited financial statements of the Company. Interest shall include any
interest charged on any outstanding loans made to, or other indebtedness
incurred by, the Company.
In the event that the above calculation cannot be made for any reason,
or in the event that the above calculation produces a purchase price less than
the share of net assets indicated by the percentage share of the Company to be
so purchased, then the purchase price payable will be equal to the value of the
percentage share of the net assets of the Company.
66
EXHIBIT E
DESCRIPTION
That portion of Rancho Calleguas, in the City of Camarillo, County of Ventura,
State of California, according to the United States Patent thereof, described
as follows:
Beginning at a point in line No. 7 of Rancho Calleguas, distant South 40 degree
30 feet West 42.54 chains from Corner No. 7 as located in the Final Survey of
said Rancho, said point of beginning being the most Westerly corner of the land
conveyed to Xxxxxxx Xxxxx, by deed recorded November 8, 1911, in Book 131, Page
387 of Deeds; thence,
1st: South 40 degrees 30 feet West 33.40 chains along said Line No. 7 to the
most Westerly corner of the land conveyed to Xxxxxxx Xxxxx by deed recorded
February 2, 1893, in book 38, Page 208 of Deeds; thence,
2nd: South 49 degree 30 feet East 46.30 chains to the most Southerly corner
of the land to conveyed to Xxxxxxx Xxxxx; thence,
3rd: North 58 degree 30 feet East 23.10 chains to the most Easterly corner of
the land conveyed to X. X. Palin by deed recorded February 2, 1893, in Book 38,
Page 207 of Deeds; thence,
4th: North 17 degree West 21.24 chains to the most Southerly corner of the land
so conveyed to Xxxxxxx Xxxxx; thence,
5th: North 79 degree 30 feet West 35.54 chains to the Point of Beginning.
EXCEPT that portion thereof conveyed to Southern Pacific Railroad Company, a
corporation,by deed recorded September 1, 1899, in Book 59, Page 348 of Deeds.
ALSO EXCEPT an undivided one-half (1/2) interest in all oil, gas, other
hydrocarbon substances and minerals in and under said real property below a
depth of five hundred (500) feet, without the right of surface entry, as
reserved by Xxxxxx X. Xxxxx and Xxxxxx Xxx Xxxxx in deed recorded December 31,
1979 as Instrument No. 144767, in Book 5570, Page 490 of Official Records.
ALSO excepting and reserving unto the Grantor, as a mineral interest and not as
a royalty interest, an undivided one-quarter (1/4) interest in all gas,
hydrocarbons and associated substances, in, under, or produced and saved from
the aforedescribed property, but without the right of entry to the surface of
said property or the top 500 feet of the subsurface of said property for the
purpose of exploring for, developing, and removing such oil, gas, hydrocarbons
and associates substances.
00
XXXXXXXXX XXX XXXX XXXXX
XX XXXXXXXXX XXXX RANCH PROPERTY
THIS XXXXXXXXX ROW CROP LEASE OF CAMARILLO CITY RANCH PROPERTY
("Xxxxxxxxx Lease") is entered into, effective as of October 1, 1991, on the one
hand, by Security Trust Company, a California corporation, as Trustee under
that certain Promissory Trust No. 1699 dated August 20, 1987 ("Landlord") and,
on the other hand, by Los Xxxxx Valley Ranches, Inc., a California
corporation, dba Xxxxxxxxx Ranches ("Tenant"), with reference to the
following facts:
Facts:
A. The Farm Property - This Xxxxxxxxx Lease covers certain portions of
the Camarillo City Ranch. The Camarillo City Ranch is located in Camarillo,
California at the north side of the termination of Xxxxx Road. The first portion
of the Camarillo City Ranch covered by this Xxxxxxxxx Lease, consists of 56
acres, more or less, of farmable row crop land located on the Camarillo City
Ranch. Said row crop land is hereinafter called "the Farm Property."
B. The Xxxxxx Building - The second portion of the Camarillo City
Ranch covered by this Xxxxxxxxx Lease is that certain building located on
Camarillo City Ranch commonly known as and hereinafter called the
"Xxxxxx Building."
C. Prior Lease - The Farm Property and the Xxxxxx Building were leased
to Tenant pursuant to the terms and conditions of that certain Lease, dated as
of April 4, 1990, between Landlord and Tenant (the "Prior Lease"). The Prior
Lease expired on April 4, 1991, and since that time, Tenant has been renting
the Farm Property and the Xxxxxx Building from Landlord on a month-to-month
basis.
D. Purpose - On the terms, and subject to the conditions of this
Xxxxxxxxx Lease, Landlord and Tenant are entering into a new lease for the Farm
Property and the Xxxxxx Building.
IN VIEW OF THE FOREGOING FACTS, Landlord and Tenant agree:
Agreement
1. Lease of the Farm Property - On the terms and subject to the
conditions of this Xxxxxxxxx Lease, Landlord hereby leases the Farm Property to
Tenant and Tenant hereby hires the Farm Property from Landlord.
2. Lease of the Xxxxxx Building - On the terms and subject to the
conditions of this Xxxxxxxxx Lease, Landlord hereby leases
1
EXHIBIT E
68
the Xxxxxx Building to Tenant and Tenant hereby hires the Xxxxxx Building from
Landlord.
3. Term of Farm Property Lease - The term of Landlord's lease and
Tenant's hiring of the Farm Property commences October 1, 1991 and terminates on
the earlier of: (a) September 30, 1994 or (b) on such earlier date as may be
required by the terms of this Xxxxxxxxx Lease.
4. Term of Xxxxxx Building Lease - The term of Landlord's rental and
Tenant's hiring of the Xxxxxx Building commences October 1, 1991 and terminates
on the earlier of: (a) September 30, 1994 or (b) on such earlier date as may
be required by the terms of this Xxxxxxxxx Lease.
5. Rent for Farm Property - The rent for the Farm Property is
$39,200.00 per year, payable, in advance, in equal quarterly installments of
$9,800.00. The first quarterly installment shall be paid on October 1, 1991; the
remaining quarterly installments shall be paid in advance on the first day of
each January, April, July and October during the term of this Xxxxxxxxx Lease.
6. Rent for Xxxxxx Building - The rent for the Xxxxxx Building is
$1,054.08 per month, payable, in advance, on the 1st day of each month
commencing October 1, 1991. Commencing October 1, 1992, the rent for the Xxxxxx
Building shall be $1,106.78 per month, payable in the aforesaid fashion.
Commencing October 1, 1993, the rent for the Xxxxxx Building shall be $1,162.12
per month, payable in the aforesaid fashion.
7. Payment - Tenant shall pay the rent for the Farm Property and the
Xxxxxx Building and all other amounts due from Tenant by the terms of this
Xxxxxxxxx Lease, without deduction or offset, to Landlord at such place or
places as Landlord may select from time to time. Until otherwise directed by
Landlord, Tenant's payments shall be made to Ag Land Services, Xxxx Xxxxxx
Xxx 0, Xxxxx, Xxxxxxxxxx 00000.
8. Use - Tenant shall only use the Farm Property for the purpose of
raising and harvesting row crops. No other use of the Farm Property shall be
made without Landlord's prior written consent. Tenant shall only use the
Xxxxxx Building for the purpose of processing lettuce and/or other row crops.
No other use of the Xxxxxx Building shall be made without Landlord's prior
written consent.
9. Farming Practices - Tenant shall, at Tenant's sole expense, plant,
cultivate, and harvest the Farm Property in accordance with the best
agricultural practices employed for similar properties located in Ventura
County, California. Without limiting the generality of the foregoing, Tenant
shall supply all farming equipment required for the Farm Property,
2
69
including surface irrigation pipelines; Tenant shall maintain and repair all
irrigation pipelines; Tenant shall use ample fertilizer and pest controls to
avoid depletion of the soil or losses caused by vermin, insects, and
pestilences; Tenant shall carry State Compensation Insurance on all Tenant's
hired help and, except as herein provided, Tenant shall pay all costs and
expenses arising from or connected with Tenant's activities on or about the
Farm Property.
10. Maintenance of Xxxxxx Building - During the term of Tenant's rental
of the Xxxxxx Building, Tenant shall at all times repair and maintain the Xxxxxx
Building and all parts thereof in a first class condition at Tenant's sole
cost and expense.
11. Governmental Requirements and Waste - At all times during the
applicable term of Tenant's lease of the Farm Property and/or the Xxxxxx
Building, Tenant shall, at Tenant's sole expense, comply with all governmental
laws and regulations relating to the appropriate property and the activities
thereon conducted by Tenant and Tenant's employees, contractors, and invitees.
Tenant shall not commit, or permit others to commit, any waste or nuisance or
other act which disturbs the quiet enjoyment of any other person.
12. Hazardous Materials - At all times during the applicable term of
Tenant's lease of the Farm Property and/or the Xxxxxx Building, Tenant shall
prevent all persons and entities from using, generating, manufacturing, storing
or disposing of, on, under, or about the appropriate property or transporting to
or from the appropriate property any flammable explosives, radioactive
materials, hazardous wastes, toxic substances or related materials ("Hazardous
Materials"). For the purpose of this Xxxxxxxxx Lease, Hazardous Materials
includes, but is not limited to, substances defined as "hazardous substances,"
"hazardous materials," or "toxic substances" in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section
1801, et seq.; the Resource Conservation and Recovery Acts, 42 U.S.C. Section
6901 et seq.; and those substances defined as "hazardous substances" in Section
25316 of the California Health & Safety Code, and in the regulations adopted
and publications promulgated pursuant to said laws.
13. Surrender of Farm Property - On expiration or sooner termination
of the Farm Property portion of this Xxxxxxxxx Lease, Tenant shall peaceably
yield possession of the Farm Property to Landlord in a twice diced and clean
condition, free of all debris, trash, weeds, hazardous materials, and all other
foreign materials and substances.
14. Surrender of Xxxxxx Building - On expiration or sooner termination
of the Xxxxxx Building portion of this Xxxxxxxxx
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70
Lease, Tenant shall peaceably yield possession of the Xxxxxx Building to
Landlord in the condition in which it was received or in such improved condition
as may have resulted from Tenant's use thereof.
15. Removal of Xxxxxx Building -- At Landlord's sole written election,
Landlord may force Tenant to remove the Xxxxxx Building from the Camarillo City
Ranch Property. Landlord may make said election at any time after giving the
Xxxxxx Building Termination Notice pursuant to Paragraph 28B below, or within
one year following expiration or earlier termination of the term of the Xxxxxx
Building portion of this Xxxxxxxxx Lease by written notice to Tenant ("Removal
Notice"). If Landlord does so elect, Tenant shall cause the Xxxxxx Building to
be removed from the Camarillo City Ranch Property. Said removal shall occur on
or before the date specified in Landlord's Removal Notice, which date may not
be prior to the termination date for the Xxxxxx Building portion of this
Xxxxxxxxx Lease specified in the Xxxxxx Building Termination Notice delivered
pursuant to Paragraph 28B below. Said removal shall occur at Tenant's sole cost
and expense in accordance with all applicable governmental rules and
regulations complied with by Tenant at Tenant's sole cost and expense. As a
part of said removal, Tenant shall cause the property on which the Xxxxxx
Building is now located and the immediately adjoining property to be cleared of
all foundations, structures, debris and hazardous materials of every kind or
nature at Tenant's sole cost and expense in compliance with all applicable
governmental rules and regulations adhered to by Tenant at Tenant's sole cost
and expense. If Landlord elects to force Tenant to remove the Xxxxxx Building,
the Xxxxxx Building and all other items Tenant removes (in accordance with the
terms of this paragraph) from the Camarillo City Ranch, shall only be Tenant's
property from and after the removal date.
16. Abandoned Property -- At expiration or sooner termination of the
Xxxxxx Building portion of this Xxxxxxxxx Lease, Landlord may remove any of
Tenant's machinery, equipment, trade fixtures, or personal property thereon
located at Landlord's sole option and at Tenant's sole expense and/or Landlord
may sell or otherwise dispose of all or any part of said property in any manner
Landlord deems appropriate without liability to Tenant or others. At expiration
or sooner termination of the Farm Property portion of this Xxxxxxxxx Lease,
Landlord may remove any of Tenant's machinery, equipment, trade fixtures, or
personal property thereon located at Landlord's sole option and at Tenant's
sole expense and/or Landlord may sell or otherwise dispose of all or any part
of said property in any manner Landlord deems appropriate without liability to
Tenant or others.
17. Holding Over -- If Tenant remains in possession of the Farm Property
and/or the Xxxxxx Building following expiration or
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sooner termination of this Xxxxxxxxx Lease (or any portion thereof), Tenant's
continued possession of the Farm Property and/or the Xxxxxx Building shall
constitute a tenancy at sufferance which shall not act as a renewal of this
Xxxxxxxxx Lease for any additional period pursuant to California Civil Code
Section 1161(2). During Tenant's continued possession of the Farm Property, the
applicable terms and conditions of this Xxxxxxxxx Lease shall apply except
Tenant's rent for said continued possession shall be computed and paid monthly,
in advance, on the first day of each month during said continued possession at
the rate of $4,900.00 per month without adjustment for partial months, if any.
During Tenant's continued possession of the Xxxxxx Building, the applicable
terms and conditions of this Xxxxxxxxx Lease shall apply except Tenant's rent
for said continued possession shall be $2,324.24 per month without adjustment
for partial months, if any. This paragraph shall not be interpreted to prevent
Landlord from causing Tenant to immediately vacate the Farm Property and/or the
Xxxxxx Building on expiration or sooner termination of their respective terms.
18. Irrigation Water and Flooding - Landlord does not warrant the
quality or quantity of the water available from any source will be suitable or
sufficient for Tenant's use and Landlord does not warrant or represent that the
Farm Property and/or the Xxxxxx Building will not flood. Tenant hereby waives
all rights Tenant may otherwise have to recover from Landlord for any damages to
Tenant's crops, machinery, equipment and other property caused by flooding, or
leaks, or lack of water or contaminated water or otherwise.
19. Tenant's Use of Irrigation Water from Well - Tenant is familiar
with the water well located on property Landlord has leased to others. Tenant is
satisfied that said well is in good working order and has sufficient capacity to
irrigate both the Farm Property and the adjacent lemon orchards. Tenant may use
the water well to irrigate the Farm Property. In connection with Tenant's use of
the water well, Tenant shall keep a log of the hours Tenant uses the water well
and Tenant shall reimburse Landlord for Tenant's use of the water well by paying
Landlord a portion of all costs of maintaining and operating the water well,
including electricity costs and standby fees, equal to a fraction, the numerator
of which is Tenant's hours of use of the water well during the applicable period
and the denominator of which is the total hours of use of the water well during
the applicable period. If the Farm Property and the adjacent lemon orchards both
need water at the same time, the orchard's water needs shall be served first.
Consistent with good farming practices, Landlord will attempt to cause the
orchards to be irrigated at a time and in a manner compatible with Tenant's
water needs. If the water well consistently fails to produce water sufficient
for Tenant's reasonable needs, Tenant may, by written notice to Landlord,
terminate the Farm Property and/or
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Xxxxxx Building portion of this Xxxxxxxxx Lease effective as of the date
Landlord receives said notice, or at Tenant's option, effective as of any later
date specified in the notice. If Tenant elects to so terminate all or any
portion of this Xxxxxxxxx Lease, Landlord shall forthwith refund the unearned
rent for the property which is covered by Tenant's termination notice. Landlord
is not obligated to repair or replace the water well; Landlord is not liable
for (and Tenant shall not be entitled to any rent abatement with respect to)
any crop or other damages suffered by Tenant by reason of any use or abuse of
the water well and/or by reason of any water shortage and/or by reason of
contaminated water or otherwise.
20. Waiver -- As a material part of this Xxxxxxxxx Lease, Tenant hereby
waives all claims and causes of action against Landlord and/or Landlord's other
tenants for personal injuries to Tenant and Tenant's employees, contractors,
guests and invitees and/or for damages to any equipment, crops, and/or property
arising from or in any way connected with the Farm Property and/or the Xxxxxx
Building and/or by reason of Landlord's and/or any other tenant's use of the
water well or any activities conducted by Landlord and/or Landlord's other
tenants on the Farm Property and/or the Xxxxxx Building and/or the Camarillo
City Ranch Property. This waiver covers all causes of action arising at any
time, including, but not limited to, claims for damages arising out of the acts
or omissions of Landlord and/or its tenants, agents, employees, and
contractors.
21. Indemnification -- As a material part of this Xxxxxxxxx Lease, Tenant
hereby indemnifies and holds Landlord and Landlord's other tenants harmless
from any and all claims, causes of action, suits, proceedings, losses,
expenses, damages, and liability, including attorney's fees and costs, arising
out of or in any way connected with the Farm Property and/or the Xxxxxx
Building and/or resulting from Tenant's use, possession, or operation of the
Farm Property and/or the Xxxxxx Building.
22. Insurance -- Tenant shall, at Tenant's sole cost and expense, either
naming Landlord as an additional insured or as a co-insured, maintain public
liability insurance in the minimum amount of $500,000.00 for loss from an
accident resulting in bodily injury to or death of one person with an aggregate
amount of $1,000,000.00 per accident and $100,000.00 for loss from an accident
resulting from damage to or destruction of property. Tenant shall furnish
Landlord with a Certificate of Insurance issued by an insurance company
licensed to do business in the State of California showing Tenant is insured
for the foregoing amounts and Landlord is covered by said insurance. Each such
policy of insurance shall provide for at least ten days prior written notice to
Landlord given by the insurance company before the insurance company alters,
amends, cancels, or allows the
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policy to expire. Said insurance does not limit Tenant's liability under this
Xxxxxxxxx Lease.
23. Property Taxes -- All property taxes assessed on the Farm Property
and/or the Xxxxxx Building and all personal property taxes attributable to
Landlord's personal property, if any, situated on the Farm Property and/or the
Xxxxxx Building shall be paid by Landlord. All other property taxes assessed
during the term of this Xxxxxxxxx Lease shall be paid by Tenant including, but
not limited to, personal property taxes attributable to Tenant's equipment
and/or personal property used on the Farm Property and/or personal property
used in the Xxxxxx Building and/or Tenant's crops.
24. Alterations and Mechanic's Liens -- Tenant shall not make any
alterations to the Farm Property and/or the Xxxxxx Building without Landlord's
prior written consent. All additions to or alterations of the Farm Property
and/or the Xxxxxx Building, except trade fixtures, shall at once become a part
of the Farm Property and/or the Xxxxxx Building and shall belong solely to
Landlord. Tenant shall keep the Farm Property and/or the Xxxxxx Building and
every part thereof free from all liens arising out of work performed, materials
furnished, or obligations incurred by Tenant and/or at Tenant's request.
25. Oil, Gas, and Mineral Rights -- All rights to all minerals, oil, gas,
and other hydrocarbon substances located on or under the Farm Property and/or
the Xxxxxx Building are reserved to Landlord. In exercising Landlord's right to
said minerals, oil, and gas and hydrocarbon substances, Landlord may cause
Tenant to surrender a portion of the surface rights covered by this Xxxxxxxxx
Lease without terminating this Xxxxxxxxx Lease. If Landlord does exercise said
right, Landlord shall xxxxx Tenant's rent based solely on the farmable acreage
so lost by Tenant.
26. Landlord's Entry and Signs -- Landlord and Landlord's agents,
contractors, and any other person or entity authorized by Landlord may enter
upon the Farm Property and/or the Xxxxxx Building for the purpose of
conducting any test or study deemed appropriate by Landlord including, but not
limited to, tests and studies connected with Landlord's planned development of
all or any portion of the Camarillo City Ranch, and/or for the purpose of
inspecting the Farm Property and/or the Xxxxxx Building or any portion thereof
and/or for any other purpose, including, but not limited to, the removal of any
or all buildings and improvements located on the Camarillo City Ranch. Landlord
may show the Farm Property and/or the Xxxxxx Building to prospective brokers,
agents, tenants, and purchasers. Landlord may place and maintain (or allow
others to place and maintain) any "for rent" signs or "for lease" signs or
"for sale" signs or future development signs or any other signs in one or more
conspicuous places on the Farm
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Property and/or the Xxxxxx Building. Landlord may also post notices of
non-responsibility on the Farm Property and/or the Xxxxxx Building. Tenant
shall not have any right to receive compensation from Landlord and/or any other
person by reason of Landlord's exercise of any of the rights herein reserved to
Landlord.
27. Condemnation Proceeds--Landlord is solely entitled to all
compensation payable by any governmental agency or authority by reason of any
temporary or permanent taking of the Farm Property and/or the Xxxxxx Building
or any portion thereof. Tenant hereby waives all rights to said compensation
and hereby irrevocably assigns Tenant's share of same, if any, to Landlord.
28. Premature Termination of Lease
A. Farm Property Portion of Lease--By written notice delivered to
Tenant at any time during the term of this Xxxxxxxxx Lease, Landlord may, for
any reason, cause the Farm Property portion of this Xxxxxxxxx Lease to
prematurely terminate on the date specified in Landlord's written notice ("Farm
Property Termination Notice"). If the date specified in Landlord's Farm
Property Termination Notice is less than 90 days from the date Tenant receives
Landlord's Farm Property Termination Notice and Tenant is not allowed to
harvest the crop which was planted on the Farm Property before Tenant received
Landlord's Farm Property Termination Notice, in addition to refunding all
prepaid and unearned rent, if any, determined as of the date Tenant surrenders
the Farm Property to Landlord, Landlord shall reimburse Tenant for all out of
pocket costs incurred by Tenant in planting said crop on the Farm Property
plus an additional 20% of said costs to reimburse Tenant for Tenant's overhead.
If Tenant is allowed to harvest the crop which was planted before Tenant
received Landlord's Farm Property Termination Notice or if the termination date
specified in Landlord's Farm Property Termination Notice is more than 90 days
from the date Landlord delivers Landlord's Farm Property Termination Notice to
Tenant, Landlord's sole and only liability to Tenant for exercise of the
premature termination rights herein provided Landlord shall be to return all
prepaid and unearned rent, if any (determined as of the date Tenant surrenders
the Farm Property to Landlord). All payments required by this Paragraph 28A
shall be made to Tenant within 15 days following Tenant's surrender of the Farm
Property to Landlord. Under no circumstances shall Landlord be required to pay
Tenant for any loss of expected profits on any crop nor shall Landlord be
required to pay Tenant for any loss or damage Tenant incurs for any crop which
was planted on the Farm Property after Tenant receives Landlord's Farm Property
Termination Notice. Also, under no circumstances shall Landlord be required to
pay Tenant any compensation for any crop Tenant is allowed to harvest.
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X. Xxxxxx Building Portion of Lease - By written notice delivered to
Tenant at any time during the term of this Xxxxxxxxx Lease, Landlord may cause
the Xxxxxx Building portion of this Xxxxxxxxx Lease to prematurely terminate on
the date specified on Landlord's written notice, which may not be earlier than
30 days from Tenant's receipt of such notice (the "Xxxxxx Building Termination
Notice"). Landlord may only give said Xxxxxx Building Termination Notice if
Tenant's occupancy rights to the Xxxxxx Building interfere with Landlord's
testing, predevelopment work and/or physical development of Camarillo City
Ranch or any other property owned by Landlord in the vicinity (determined
solely in Landlord's good faith judgment). Landlord's sole and only liability
to Tenant for exercise of the premature termination rights provided in this
Paragraph 28B shall be (i) to return all prepaid and unearned rent, if any, as
of the date Tenant surrenders the Xxxxxx Building to Landlord, and (ii) to pay
to Tenant an amount equal to the rental which Tenant would have paid during the
remainder of the term of the Xxxxxx Building portion of this Xxxxxxxxx Lease
pursuant to Paragraph 6 above from and after the date Tenant surrenders the
Xxxxxx Building to Landlord. All payments required by this Paragraph 28B shall
be made to Tenant within 15 days following Tenant's surrender of the Xxxxxx
Building to Landlord. Except for the aforesaid payments, under no circumstances
shall Landlord be required to compensate Tenant for any loss of expected profits
on any crop being processed or stored at the Xxxxxx Building or pay any cost or
expense incurred by Tenant in moving or relocating its operations from the
Xxxxxx Building.
29. Hunting and Trespassing - Tenant shall not permit any employee or
person (including Tenant) to xxxx or trespass on the Farm Property or to build
fires thereon or to discharge firearms thereon for any purpose other than
preventing damages to crops. Landlord and Landlord's guests and invitees may
xxxx on the Farm Property.
30. Assignment and Subletting - Tenant may not assign this Xxxxxxxxx
Lease or sublet all or any portion of the Farm Property and/or the Xxxxxx
Building without Landlord's prior written consent.
31. Crop Mortgages - Tenant shall not mortgage or otherwise encumber
any crop grown on the Farm Property.
32. Remedies on Default - Landlord, in addition to all other rights
and remedies provided by law, shall have the following options on Tenant's
default:
A. Possession - Landlord may take possession of the Farm Property
and/or the Xxxxxx Building with or without terminating this Xxxxxxxxx
Lease and with or without process of law.
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B. Reletting -- If Landlord takes possession of the Farm Property
and/or the Xxxxxx Building without terminating the applicable portion(s) of
this Xxxxxxxxx Lease, Landlord may relet the Farm Property or the Xxxxxx
Building or any part thereof as the agent of and for the benefit of Tenant,
either in Landlord's name or otherwise, and under such terms and conditions
and for such period and at such rent as Landlord deems advisable. In such
event, the rents received on any such reletting during the term of this
Xxxxxxxxx Lease or any part thereof shall be first credited to the
reasonable expense of reletting and to reasonable attorney's fees and
thereafter to the payment of all sums due or to become due from Tenant to
Landlord.
C. Harvesting Crops -- If Landlord takes possession of the Farm
Property with or without terminating the Farm Property portion of this
Xxxxxxxxx Lease, Landlord may complete the harvest of any crop then on the
Farm Property in any manner Landlord deems appropriate and/or Landlord may
cause said crop to go to seed. The proceeds Landlord receives from the sale
of said crop shall be disbursed first to pay all expenses incurred by
Landlord in retaking possession of the Farm Property, including legal fees
and costs; second, to pay Landlord for all of its expenses in completing
the farming and harvesting of the crop; and, third, to pay Landlord all
rent and other charges due Landlord under this Xxxxxxxxx Lease, plus a
commission of 20% of said rent for overseeing the farming and harvesting of
the crops and, last, the balance of said crop proceeds, if any shall be
paid to Tenant.
D. Terminating Lease -- Landlord may terminate the Farm Property
and/or the Xxxxxx Building portion of this Xxxxxxxxx Lease and recover from
Tenant all of the items described in Civil Code Section 1951.2 including,
but not limited to, worth at the time of the award of the amount of rent
and other charges equivalent to rent reserved in this Xxxxxxxxx Lease for
the balance of the term of this Xxxxxxxxx Lease over the amount of rental
loss Tenant proves could be reasonably avoided.
33. Election of Remedies -- Landlord shall not be deemed to have elected
to terminate the Xxxxxx Building portion of this Xxxxxxxxx Lease unless and
until Landlord provides Tenant with written notice of Landlord's election to so
terminate. Likewise, Landlord shall not be deemed to have elected to terminate
the Farm Property portion of this Xxxxxxxxx Lease unless and until Landlord
provides Tenant with written notice of Landlord's election to so terminate.
34. Cumulative Remedies -- All remedies herein provided Landlord are
cumulative to the end that Landlord may also
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exercise any other right or remedy available to Landlord at law or in equity.
35. Prior Defaults--Landlord's failure to take advantage of any default
or breach of any covenant or condition of this Xxxxxxxxx Lease or to insist
upon Tenant's compliance with any term or condition of this Xxxxxxxxx Lease
shall not constitute a waiver or relinquishment by Landlord of Landlord's right
to future faithful performance of any term or condition of this Xxxxxxxxx
Lease. No custom or practice developed between Landlord or Tenant in the course
of administering this Xxxxxxxxx Lease shall waive or lessen Landlord's right to
insist upon full and complete performance of each and every term, covenant, and
condition of this Xxxxxxxxx Lease.
36. Enforcement Costs--If any controversy, claim, or dispute connected
with or arising out of this Xxxxxxxxx Lease is resolved by Court action,
arbitration, or negotiation, the losing party in said action or proceeding
shall pay all reasonable attorney's fees and costs incurred by the other party
(whether otherwise constituting taxable costs or not) including, but not
limited to, telephone charges, photocopying charges, expert witness fees, and
travel expenses.
37. Governing Law--This Xxxxxxxxx Lease shall be construed and enforced
in accordance with the laws of the State of California. Venue is in Ventura
County, California.
38. Terms--In this Xxxxxxxxx Lease, certain terms have been defined in
the text of this Xxxxxxxxx Lease either by a separate specific definitional
sentence or by the use of a parenthetical reference. If a term has been so
defined by either reference in the text of this Xxxxxxxxx Lease, said term
shall be given the meaning therein assigned to it in all parts of this
Xxxxxxxxx Lease unless the context of this Xxxxxxxxx Lease clearly demonstrates
a contrary intent. Whenever required by the context of this Xxxxxxxxx Lease,
the singular includes the plural and the masculine includes the feminine or the
neuter and vice versa.
39. Construction--This Xxxxxxxxx Lease shall not be interpreted to
presumptively favor either Landlord or Tenant. The captions shall not be
considered in interpreting this Xxxxxxxxx Lease.
40. Binding Effect--This Xxxxxxxxx Lease is binding upon and inures to
the benefit of the parties and their heirs, successors, and assigns.
41. Subordination--All rights created by this Xxxxxxxxx Lease are subject
and subordinate to all liens, mortgages, deeds of trust, and other
encumbrances and restrictions now of record.
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or hereinafter placed upon the Farm Property and/or the Xxxxxx Building or any
part thereof. Such subordination is effective without any further act of Tenant.
Tenant shall from time to time, on Landlord's request, execute and deliver the
documents or instruments that may be required of any lender to effectuate
subordination. If Tenant fails to execute and deliver such documents or
instruments, Tenant irrevocably constitutes and appoints Landlord as Tenant's
special attorney-in-fact to execute and deliver such documents or instruments as
Tenant's agent in Tenant's place and stead.
42. Relationship - Nothing in this Xxxxxxxxx Lease shall be deemed or
construed by the parties or by any third person to create the relationship of
principal and agent or of partnership or of joint venture or of any other
association except Landlord and Tenant.
43. Amendment - This Xxxxxxxxx Lease may be amended or revoked solely
by written instrument executed by Landlord and Tenant.
44. Counterparts - This Xxxxxxxxx Lease may be executed in several
counterparts, each of which shall be deemed a part of an original, but
collectively such counterparts shall constitute only one agreement.
45. Notices - All consents, notices, and demands of any kind must be
made in a writing signed by the party to be charged and served either by
personal delivery or by reputable overnight air carrier or by Fax or by
registered or certified mail, postage prepaid, return receipt requested, on each
intended addressee at the address set forth below. Any such communication shall
be deemed to have been delivered to and received by the intended addressee (a)
in the case of personal delivery, as of the date of receipt, or (b) in the case
of delivery via reputable air carrier, on the earlier of the date of receipt or
first attempted delivery to the addressee's designated address, or (c) in the
case of delivery via Fax, as of the date of receipt, or (d) in the case of
mailing via certified or registered United States mail, as of the earlier of
receipt or first attempted delivery, as evidenced by the return receipt card.
Any notice, approval, or other document given by Landlord only needs to be
signed by Xxxx X. Xxxxx or Xxxxxxx X. Xxxxxxxx. Any notice to Tenant only needs
to be delivered to Xxxxx Xxxxxxxxx or to any partner of Tenant. A copy of all
consents and notices to either Landlord or Tenant shall be served on Xxxxx X.
Xxxxx Law Corporation, 000 Xxxxx Xxxxx, Xxxxx 000, Xxxxxxx, XX 00000, Fax No.
(000) 000-0000 and Xxxxxx X. Xxxx, Esq., Sandler and Xxxxx, 0000 Xxxxxx xx xxx
Xxxxx, Xxxxx 000, Xxx Xxxxxxx, XX 00000, Fax No. (000) 000-0000. Until altered
in accordance with paragraph 46 hereof, the addressee's notice addresses and Fax
numbers are:
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To Landlord: Camarillo City Ranch Properties
Attn: Xxxx X. Xxxxx
Xxxx Xxxxxx Xxx 0
Xxxxx, XX 00000
Fax No. (000) 000-0000
and
Camarillo City Ranch Properties
Attn: Xxxxxxx X. Xxxxxxxx
c/o Pardee Construction Company
00000 Xxxxxxxx Xxxx., Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Fax No. (000) 000-0000
and
Security Trust Company
Trustee -- P.T. No. 1699
Attn: Xxxx X. Xxxxxxx, Xx.
Xxxx Xxxxxx Xxx 0000
Xxx Xxxxx, XX 00000
Fax No. (000) 000-0000
To Tenant: Los Xxxxx Valley Ranches, Inc.
Attn: Xxxxx Xxxxxxxxx
0000 Xxx Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Fax No. (000) 000-0000
46. Notice Changes -- By written notice given in accordance with the
preceding paragraph, any addressee may change said addressee's notice address
or add or change his Fax number.
47. Estoppel Certificate -- At Landlord's written request made at any
time and from time to time, Tenant shall, within ten days of such request,
execute, acknowledge, and deliver to Landlord a statement in writing certifying
that this Xxxxxxxxx Lease is unmodified and in full force and effect (or, if
modified, stating the nature of each modification and certifying that this
Xxxxxxxxx Lease, as so modified, is in full force and effect) and the date to
which the rent or other charges are paid in advance, if any, and acknowledging
that there are not, to Tenant's knowledge, any uncured defaults on the part of
Landlord (or specifying such defaults if any are claimed). Any such statement
may be conclusively relied upon by any prospective purchaser or lender. If
Tenant fails to provide said estoppel statement within the ten day period,
Tenant shall be conclusively bound by any representations made by Landlord to
the prospective purchaser or lender with respect to the status of Tenant's
Lease and/or the prepayment of rent and other charges.
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48. Building Complex - Except for the Xxxxxx Building, this Xxxxxxxxx
Lease does not include any building located at the southwest corner of the Farm
Property.
49. Cooperation - Landlord and Tenant shall cooperate in the consummation
of all transactions contemplated by this Xxxxxxxxx Lease. In connection
therewith, Landlord and Tenant will each execute and deliver such other and
further documents as are reasonably required by this Xxxxxxxxx Lease.
50. Time - Time is of the essence.
51. Recording Lease - As a material inducement to Landlord in entering
into this Xxxxxxxxx Lease, Tenant hereby covenants and agrees that Tenant will
not record or attempt to record or place of record in Ventura County or in any
other county a memorandum or other instrument indicating the existence of this
Xxxxxxxxx Lease and/or Tenant's interest in the Farm Property and/or the Xxxxxx
Building.
52. Further Provisions Re Landlord - Presently Security Trust Company
holds fee title to the Farm Property and the Xxxxxx Building for the sole use
and benefit of Xxxx X. Xxxxxxxx, Xxxx Xxxxxxxx, Xxxx Xxxxxxxx, Xxxx X.
Xxxxxxxx, Xxxx X. Xxxxxxxx, Xx., Xxxxx X. Xxxxx, Xxxxxxxxx Citrus Properties,
The Xxxxxx Company and Xxxxxx Construction Company (hereinafter collectively
called "the True Owners"). Notwithstanding any other provision of this
Xxxxxxxxx Lease apparently to the contrary, whenever the term Landlord is used
in this Xxxxxxxxx Lease, said term shall include the True Owners and each of
them to the end that all rights, duties and indemnifications provided by this
Xxxxxxxxx Lease shall in each case, obligate or benefit, as the case may be,
the True Owners, and each of them.
53. Entire Agreement - This Xxxxxxxxx Lease contains the entire
understanding of the parties. All oral agreements are void. All prior written
agreements are void.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Xxxxxxxxx Lease
in Ventura County, California as of October 1, 1991 with the understanding that
all obligations imposed by this Xxxxxxxxx Lease are to be performed in Ventura
County.
XXXXXXXXX & SON SECURITY TRUST COMPANY
a California corporation
By: /s/ Xxxxx Xxxxxxxxx By: [Illegible]
---------------------------- ----------------------------
Xxxxx Xxxxxxxxx
Its Partner Its President
------------------------ -------------------------
By: /s/ Xxxxxx X. Love
----------------------------
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PERSONAL GUARANTEE
For Value Received, the undersigned (hereinafter called "Guarantor"),
personally guarantees performance by Los Xxxxx Valley Ranches, Inc., dba
Xxxxxxxxx Ranches ("Tenant"), of each and every term and condition of the
foregoing Xxxxxxxxx Lease ("Lease").
Guarantor hereby waives the right to require the Landlord to proceed
against the Tenant or any other party or any other Guarantor or to proceed
against or apply any security the Landlord may hold. Guarantor hereby waives
the right to require the Landlord to pursue any other remedy for the
Guarantor's benefit. Guarantor hereby agrees that the Landlord may proceed
against Guarantor without taking any action against the Tenant or any other
party or any other Guarantor and without proceeding against or applying any
security the Landlord may hold. Guarantor hereby agrees to pay all attorney's
fees Landlord incurs in enforcing this Personal Guarantee.
Notice of this Personal Guarantee as well as all demands, presentments,
notices of protest and notices of every kind or nature, including those of any
action or non-action on the part of the Tenant or the Tenant's assigns, is
waived. Landlord may modify or extend the terms of the Lease without notifying
Guarantor or affecting Guarantor's liability hereunder.
Guarantor waives the right to plead any statute of limitations. Guarantor
agrees that this Personal Guarantee is binding on Guarantor's heirs and that
this Personal Guarantee shall inure to the benefit of Landlord's heirs and
assigns.
IN WITNESS WHEREOF, this Personal Guarantee has been executed effective as
of execution of the Lease.
/s/ Xxxxx Xxxxxxxxx
-----------------
Xxxxx Xxxxxxxxx
TRUE OWNERS CONSENT
The undersigned, as the sole beneficiaries of Security Trust Company's
Promissory Trust No. 1699 dated August 20, 1987 and the true owners of the
property which is subject to the foregoing Xxxxxxxxx Lease hereby consent to
the foregoing Xxxxxxxxx Lease and direct Security Trust Company, acting in its
capacity as Trustee of said Trust, to execute same, and the undersigned
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hereby agree to be bound by the terms and conditions of the foregoing Xxxxxxxxx
Lease to the extent of their respective interests in the property covered by it.
/s/ XXXX X. XXXXXXXX /s/ XXXX X. XXXXXXXX
------------------------- -------------------------
XXXX X. XXXXXXXX XXXX X. XXXXXXXX
/s/ XXXX XXXXXXXX /s/ XXXX X. XXXXXXXX, XX.
------------------------- -------------------------
XXXX XXXXXXXX XXXX X. XXXXXXXX, XX.
/s/ XXXX XXXXXXXX /s/ XXXXX X. XXXXX
------------------------- -------------------------
XXXX XXXXXXXX XXXXX X. XXXXX
CAMARILLO CITRUS PROPERTIES, THE XXXXXX COMPANY,
a general partnership a California corporation
By: /s/ XXXXX X. XXXXX By: /s/ XXXXX XXXXXX
------------------------- -------------------------
Its PARTNER Its PRES.
----------------- -----------------
XXXXXX CONSTRUCTION COMPANY,
a California corporation
By: /s/ XXXXXXX XXXX
-------------------------
Its Asst. Vice Pres.
-----------------
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ADDENDUM TO XXXXXXXXX ROW CROP LEASE
The lease of the "Xxxxxx Building" includes the yard area surrounding it which
comprises about two acres and includes three old farm buildings for which
Xxxxxxxxx assumes all responsibility for upkeep and maintenance.
By /s/ Xxxxx Xxxxxxxxx
----------------------
Xxxxx Xxxxxxxxx
84
AMENDMENT NO. 1 TO
XXXXXXXXX ROW CROP LEASE
OF CAMARILLO CITY RANCH PROPERTY
THIS AMENDMENT NO. 1 TO XXXXXXXXX ROW CROP LEASE OF CAMARILLO CITY RANCH
PROPERTY (the "Amendment") is entered into effective as of October 1, 1994 (the
"Effective Date"), on the one hand, by Security Trust Company, a California
corporation, as Trustee under that certain Promissory Trust No. 1699 dated
August 20, 1987 ("Landlord") and, on the other hand, by Los Xxxxx Valley
Ranches, Inc., a California corporation, dba Xxxxxxxxx Ranches ("Tenant"), with
reference to the following facts:
RECITALS
A. On or about October 1, 1991, Landlord and Tenant entered into that
certain Xxxxxxxxx Row Crop Lease of Camarillo City Ranch Property with respect
to Tenant's lease of certain portions of the Camarillo City Ranch Property
located in Camarillo, California (the "Xxxxxxxxx Lease"). The first portion of
the Camarillo City Ranch Property covered by the Xxxxxxxxx Lease consisted of
approximately 56 acres of farmable row crop land referred to therein as the
"Farm Property". The second portion of the Camarillo City Ranch Property covered
by the Xxxxxxxxx Lease pertained to certain improved property referred to
therein as the "Xxxxxx Building".
B. The Lease expired by its terms on September 30, 1994. Landlord and
Tenant wish to enter into this Amendment to provide for Tenant's rental of the
Farm Property from Landlord on a month-to-month basis and for Tenant's rental of
the Xxxxxx Building from Landlord until Tenant removes the same from the
Camarillo City Ranch Property.
C. Except as specifically provided herein, all capitalized terms shall
have the meanings described in the Xxxxxxxxx Lease.
NOW, THEREFORE, the parties agree to amend the Xxxxxxxxx Lease as
follows:
1. From and after the Effective Date, Tenant shall rent the Farm
Property from Landlord on a month-to-month basis, until Tenant's occupancy is
terminated by either party upon giving at least thirty (30) days written notice
to the other.
2. The rental for the Farm Property shall be $[ ] per month,
payable in advance. Tenant shall pay the first monthly rental installment on
October 1, 1994; the remaining monthly installments shall be paid in advance on
the first day of each month during the continuation of Tenant's occupancy.
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3. Tenant hereby acknowledges that this Amendment shall serve as
Landlord's "Xxxxxx Building Termination Notice" and "Removal Notice" in
accordance with paragraphs 28B and 15, respectively, of the Xxxxxxxxx Lease.
Pursuant to said notices, Tenant hereby agrees to remove the Xxxxxx Building
from the Camarillo City Ranch Property, at Tenant's sole cost and expense, in
accordance with all applicable governmental rules and regulations and in
compliance with the obligations set forth in said paragraph 15 (such building
removal and restoration of the property is referred to herein collectively as
the "Xxxxxx Building Removal"). Tenant hereby agrees to diligently pursue the
Xxxxxx Building Removal and to complete the same as soon as possible, but in no
event later than September 30, 1995. The Xxxxxx Building portion of the
Xxxxxxxxx Lease shall be deemed terminated upon completion of the Xxxxxx
Building Removal.
4. Until the completion of the Xxxxxx Building Removal and termination
of the Xxxxxx Building portion of the Xxxxxxxxx Lease, Tenant shall pay rent
for the Xxxxxx Building in the amount of $1,220.23 per month, payable in
advance, on the 1st day of each month commencing October 1, 1994. If the Xxxxxx
Building Removal is not completed by September 30, 1995, Tenant shall be deemed
to be "holding over", and Tenant's rental for the Xxxxxx Building shall
thereafter be the amount called for in paragraph 17 of the Xxxxxxxxx Lease
until completion of the Xxxxxx Building Removal.
5. Security Trust Company presently holds fee title to the Farm Property
and the Xxxxxx Building for the sole use and benefit of Xxxxxx Construction
Company and certain persons represented by Xxxxx X. Xxxxx and Xxxxx X. Xxxxx
(hereinafter collectively called "the True Owners"). Notwithstanding any
provision of the Xxxxxxxxx Lease (as modified by this Amendment) apparently to
the contrary, whenever the term Landlord is used in the Xxxxxxxxx Lease or this
Amendment, said term shall include the True Owners and each of them to the end
that all rights, duties and indemnifications provided by the Xxxxxxxxx Lease
(as modified by this Amendment) shall in each case obligate or benefit, as the
case may be, the True Owners, and each of them.
6. Except as otherwise specifically provided herein, the Xxxxxxxxx Lease
shall remain in full force and effect in accordance with its terms.
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IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment
as of the Effective Date referred to above.
AIT DBA XXXXXXXXX RANCHES SECURITY TRUST COMPANY
a California corporation a California corporation
By: /s/ Xxxxx Xxxxxxxxx By: /s/ Xxxx X. Xxxxxxx, Xx.
------------------- ------------------------
Xxxxx Xxxxxxxxx Xxxx X. Xxxxxxx, Xx.
Its Sec Treas Its Trust Officer and
--------------- --------------------
Asst. Corporate Secretary
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PERSONAL GUARANTEE
For Value Received, the undersigned (hereinafter called "Guarantor"),
personally guarantees performance by Los Xxxxx Valley Ranches, Inc., dba
Xxxxxxxxx Ranches ("Tenant"), of each and every term and condition of the
foregoing Amendment and the Xxxxxxxxx Lease referred to therein (collectively,
the "Lease").
Guarantor hereby waives the right to require the Landlord to proceed
against the Tenant or any other party or any other Guarantor or to proceed
against or apply any security the Landlord may hold. Guarantor hereby waives
the right to require the Landlord to pursue any other remedy for the
Guarantor's benefit. Guarantor hereby agrees that the Landlord may proceed
against Guarantor without taking any action against the Tenant or any other
party or any other Guarantor and without proceeding against or applying any
security the Landlord may hold. Guarantor hereby agrees to pay all attorney's
fees Landlord incurs in enforcing this Personal Guarantee.
Notice of this Personal Guarantee as well as all demands, presentments,
notices of protest and notices of every kind or nature, including those of any
action or non-action on the part of the Tenant or the Tenant's assigns, is
waived. Landlord may modify or extend the terms of the Lease without notifying
Guarantor or affecting Guarantor's liability hereunder.
Guarantor waives the right to plead any statute of limitations. Guarantor
agrees that this Personal Guarantee is binding on Guarantor's heirs and that
this Personal Guarantee shall inure to the benefit of Landlord's heirs and
assigns.
IN WITNESS WHEREOF, this Personal Guarantee has been executed effective as
of execution of the Lease.
/s/ Xxxxx Xxxxxxxxx
-----------------
Xxxxx Xxxxxxxxx
TRUE OWNERS CONSENT
The undersigned, as the sole beneficiaries of Security Trust Company's
Promissory Trust No. 1699 dated August 20, 1987 and the true owners of the
property which is subject to the foregoing Amendment No. 1 to Xxxxxxxxx Row
Crop Lease of Camarillo City Ranch Property (the "Amendment"), hereby consent
to the foregoing Amendment and direct Security Trust Company, acting in its
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capacity as Trustee of said Trust, to execute same, and the undersigned hereby
agree to be bound by the terms and conditions of the foregoing Amendment and
the Xxxxxxxxx Lease referred to therein to the extent of their respective
interests in the property covered by it.
Buyer: Seller:
XXXXXX CONSTRUCTION COMPANY,
a California corporation
/s/ Xxxxx X. Xxxxx
----------------------------
XXXXX X. XXXXX
By /s/ Xxxxxxx Xxxx Authorized Representative
-------------------------
Its Asst. Vice Pres.
---------------------
/s/ Xxxxx X. Xxxxx
----------------------------
XXXXX X. XXXXX
Authorized Representative
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