EXHIBIT 10.45
MASTER EQUIPMENT LEASE AGREEMENT
THIS MASTER EQUIPMENT LEASE AGREEMENT (this "Lease") dated
as of January 31, 1996 is by and between NATIONSBANC LEASING
CORPORATION OF NORTH CAROLINA ("Lessor"), a corporation organized
under the laws of the State of North Carolina and having its
principal place of business at XxxxxxxXxxx Xxxxx, XX0-000-00-00,
000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, and
FOODBRANDS AMERICA, INC. ("Lessee"), a corporation organized
under the laws of the State of Delaware and having its principal
place of business at 0000 X.X. Xxxxxxxxxx, Xxxxx 0000, Xxxxxxxx
Xxxx, XX 00000-0000.
R E C I T A L S
WHEREAS, the Lessee desires to lease from Lessor certain
Equipment (as hereinafter defined) from time to time as more
specifically set forth hereinafter.
WHEREAS, so long as the terms and conditions set forth in
this Lease and any Schedule(s) (as hereinafter defined) are
complied with by the Lessee, the Lessor is willing to enter
into this Lease for the purposes stated herein.
NOW, THEREFORE, in consideration of the mutual promises set
forth herein and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, each of
the parties hereto agrees as follows:
SECTION 1
LEASE AGREEMENT
Subject to the terms and conditions hereinafter set forth,
Lessor may lease to Lessee, and Lessee may lease from Lessor, the
units of personal property (collectively, with all attached
parts, replacements, additions, accessions and accessories
attached thereto, the "Equipment") described in one or more
Equipment Lease Schedules, an example of which is attached hereto
as Exhibit A (each, as amended from time to time, is referred to
herein as a "Schedule"). Each Schedule shall constitute a
separate and independent lease and contractual obligation of
Lessee. Until a Schedule is duly signed and delivered by Lessor,
a Schedule signed and delivered by Lessee constitutes an
irrevocable offer by Lessee to lease the Equipment described in
such Schedule from Lessor.
SECTION 2
TERM OF LEASE; RENTALS
The lease term (the "Term") with respect to any Equipment may
consist of an "Interim Term" and/or a "Base Term" as specified in
the Schedule covering such Equipment. Lessee shall pay rent for
the Interim Term ("Interim Rent") in such amounts and at such
times as set forth in the applicable Schedule, and shall pay rent
for the Base Term ("Base Rent") in such amounts and at such times
as set forth in the applicable Schedule. If the date that any
rent payment is due is other than a business day, the rent
payment otherwise payable on such date shall be payable on
the next succeeding business day. All payments required to be
made by Lessee to Lessor hereunder shall be made in immediately
available funds and in United States dollars at Lessor's
place of business at XxxxxxxXxxx Xxxxx, XX0-000-00-00, 000 Xxxxx
Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000 or to such other
place as Lessor shall designate to Lessee in writing.
SECTION 3
LOCATION; USE OF EQUIPMENT; QUIET ENJOYMENT
(a) Each item of Equipment shall at all times be and
remain in the possession and control of Lessee at the location
stated in the Schedule covering such Equipment.
(b) Lessee shall use, operate, protect, and maintain
the Equipment in compliance with all applicable insurance
policies, laws, ordinances, rules, regulations and manufacturer's
instructions. Lessee, at its sole expense, may make alterations
and modifications in and additions and improvements to the
Equipment provided no such alteration, modification, addition or
improvement reduces the value or utility, or impairs the
warranty, certification, safety or performance of the Equipment.
Lessee shall promptly notify Lessor in writing upon the
completion of any material alteration, modification, addition or
improvement to the Equipment. Title to any part or item
incorporated in the Equipment as a result of such alteration,
modification, addition or improvement (an Addition ) shall vest
in Lessor without cost or payment, provided, that so long as such
Addition (I) does not adversely alter or impair the value or the
originally intended function or use of the Equipment and (ii) can
be readily removed without causing material damage to the
Equipment, title to such Addition shall remain in Lessee. Lessee
shall make, at its sole expense, any alterations or modifications
that are required during the term of this Lease to comply with
any applicable law or governmental rule or regulation. If
requested by Lessor, Lessee shall cause each item of Equipment to
be and remain marked by insignia, plaques, tags, decals or other
forms of notice to disclose Lessor's ownership of the Equipment.
Lessee shall keep the Equipment free and clear of any and all
liens, encumbrances, claims and charges (except for those created
expressly by or for the benefit of Lessor) and shall not in any
way encumber Lessor's rights hereunder or under any Schedule.
(c) Provided that no event of default has occurred and
is continuing hereunder, Lessor agrees that it shall not
interfere with Lessee's quiet enjoyment and use of the Equipment
during the Term and that it shall keep Lessee's quiet enjoyment
and use of the equipment free from interference from persons
claiming liens, encumbrances, claims and charges created
expressly by or for the benefit of Lessor.
SECTION 4
TAXES
Lessee shall reimburse Lessor on demand for all taxes,
assessments and other governmental charges paid by Lessor in
connection with the Equipment or its use, ownership, leasing or
operation while in Lessee's possession or the payment or receipt
of rent or other charges under any Schedule, including but not
limited to foreign, federal, state, county and municipal fees and
taxes, ad valorem, sales, use, value added, leasing, excise,
stamp and documentary taxes (other than federal, state or local
taxes based on Lessor's net income), and all related penalties,
fines and interest charges (other than penalties, fines and
interest charges incurred as a result of Lessor's gross
negligence or willful misconduct). Upon Lessor's request,
Lessee will immediately furnish to Lessor such information as
Lessor shall require in connection with the preparation and
filing of all returns relating to such taxes, assessments, or
charges.
SECTION 5
NET LEASE; LOSS AND DAMAGE
(a) Each Schedule is a net lease. All costs, expenses
and other liabilities associated with the Equipment shall be
borne by Lessee until the Equipment is returned to Lessor in
accordance with the terms of this Lease. Lessee's obligations
under any and all Schedules are absolute and unconditional, and
are not subject to any abatement, deferment, reduction, setoff,
defense, counterclaim or recoupment for any reason whatsoever.
Except as otherwise expressly provided herein, no Schedule shall
terminate nor shall the obligations of Lessee be affected, by
reason of any defect or damage to, or any destruction, loss,
theft, forfeiture, governmental requisition or obsolescence of
the Equipment, regardless of cause.
(b) As between Lessor and Lessee, Lessee assumes all
risk of damage to or loss, theft or destruction of the Equipment
from any cause whatsoever from the date the Equipment is shipped
by the seller or manufacturer. In the event of loss or
destruction of the Equipment from any cause whatsoever, other
than the failure of Lessor to receive whatever title to the
Equipment in conveyed to it by the seller or manufacture, from
the date the Equipment is shipped by the seller or
manufacturer, but prior to its acceptance by the Lessee, Lessee
shall promptly pay to Lessor all sums heretofore paid by Lessor
to such seller or manufacturer, and Lessor shall assign to Lessee
all of its rights or causes of action, if any, against such
seller or manufacturer. In the event of damage of any kind
whatsoever to any item of the Equipment on or after its
acceptance by Lessee, Lessee shall, at Lessor's option, either
place the same in good repair, condition or working order, or, if
in the reasonable judgment of Lessor the Equipment is determined
by Lessor to be lost, stolen, destroyed, damaged beyond repair,
or rendered permanently unfit for its intended use, Lessee shall
pay Lessor the Casualty Loss Value thereof (as provided in the
Schedule covering such Equipment). Upon such payment, the lease
of such Equipment shall terminate and Lessee thereupon shall
become entitled to such item of the Equipment "AS-IS, WHERE-IS"
without warranty by Lessor, express or implied, with respect to
any matter whatsoever.
SECTION 6
INSURANCE
Lessee shall, at its sole expense, procure and maintain the
following insurance coverage on the Equipment until the Equipment
is returned to Lessor, or Lessee's obligations with respect
thereto under any applicable Schedule are otherwise terminated:
(1) insurance against theft, fire, casualty, and such other risks
as are customarily insured against in Lessee's trade or industry,
under policies naming Lessor as loss payee; and (2) comprehensive
public liability and property damage insurance, under policies
naming Lessor as additional insured. Each such insurance
policy shall include provisions for the protection of Lessor
notwithstanding any act, neglect, breach of warranty, or default
of or by Lessee, shall provide for payment of insurance proceeds
to Lessor to the extent of its liability or interest, shall
provide that such policy may not be modified, terminated or
cancelled unless Lessor is given at least thirty (30) days prior
written notice thereof, shall provide that the coverage is
"primary coverage" for the protection of Lessee and Lessor
notwithstanding any other coverage carried by Lessee or Lessor
protecting against similar risks or liabilities, and shall be
issued in such amounts (which in the case of casualty
insurance will never be less than the Casualty Loss Value of the
Equipment covered thereby), with such deductibles, by such
insurance company, and otherwise in such form as shall all be
reasonably satisfactory to Lessor. Lessee shall furnish Lessor
with certificates or other satisfactory evidence of such
insurance, and shall furnish Lessor with a renewal certificate
for each policy before the policy renewal date. Lessor shall
have no duty to examine any certificate or other evidence of
insurance, or to advise Lessee in the event that its insurance is
not in compliance with this Section 6. The proceeds of any
public liability or property damage insurance shall be payable
first to Lessor to the extent of its liability, if any, and the
balance to Lessee. The proceeds of fire, theft, or other
casualty insurance shall be payable to Lessor and shall be used
for the repair or replacement of the affected Equipment or for
payment of the Casualty Loss Value in accordance with the
provisions of Section 5; unless an event of default hereunder
shall have occurred and be continuing, in which event such
proceeds may, at Lessor's sole option, be applied toward the
payment of Lessee's obligations under the applicable Schedule.
Lessee hereby appoints Lessor as Lessee's agent and
attorney-in-fact with full power to do all things (including
but not limited to making, adjusting, and settling claims, and
receiving payments and endorsing documents, checks, or drafts)
necessary or advisable to secure payment due under any insurance
policy contemplated hereby.
SECTION 7
LESSEE'S GENERAL INDEMNITIES
Lessee shall indemnify Lessor, its officers, directors,
stockholders, successors, assigns and agents against all claims,
liabilities, losses and expenses whatsoever, including attorneys'
fees and expenses (except those directly and primarily caused by
Lessor's gross negligence or willful misconduct), in any way
relating to or arising out of the use, operation, leasing,
maintenance or ownership of the Equipment or any part thereof, or
the ordering, acquisition, rejection, installation, possession,
condition, destruction, return, or disposition of the Equipment
or any part thereof, including Lessor's own negligence and strict
liability in tort, and including any infringement claim.
Lessee's obligations under this provision shall survive any
partial or total termination, expiration, or cancellation of this
Lease or any Schedule. Lessee's obligations under this Section 7
shall not increase as a result of any transfer or assignment of
this Lease, all or part of any Schedule or Lessor's interest in
any Equipment.
SECTION 8
SPECIAL TAX INDEMNITY
(a) Lessor and Lessee have made the following
assumptions regarding the characterization of this Lease for
federal income tax purposes (the "Tax Assumptions"): (1) Lessor
will be treated as the purchaser, owner, and lessor of the
Equipment; (2) the Equipment will be treated as placed in service
on the "In Service Date" set forth in the Schedule; and Lessor's
basis in the Equipment will be equal to the total actual cost to
Lessor of the Equipment; (3) for federal tax purposes, Lessor
will be entitled to claim depreciation deductions with respect to
one hundred percent (100%) of the total actual cost of the
Equipment computed (i) on the basis that the Equipment has the
classification (the "Property Classification") within the meaning
of Section 168(e)(1) of the Internal Revenue Code of 1986, as
amended (the "Code") as set forth in the Schedule, (ii) by using
the two hundred percent (200%) declining balance method,
switching to a straight line method for the first taxable year of
Lessor for which such method yields a larger allowance, (iii)
assuming salvage value is zero, and (iv) using the half-year
convention under Section 168(d)(1) and (d)(4)(A) of the Code; (4)
the only amounts that Lessor will be required to include in gross
income with respect to this Lease will be (i) rents of all types
as paid under this Lease, (ii) payments as a consequence of a
sale, or other loss, termination disposition of the Equipment and
(iii) any indemnity pursuant to this Section 8; (5) Lessor will
be able to amortize over the Term all of its transaction costs;
and (6) all items of income loss, depreciation and expense will
be treated on an accrual basis and as derived from or allocable
to sources within the United States.
(b) Lessee hereby represents, warrants and covenants to
Lessor as follows: (1) the Equipment will not be used
"predominantly outside the United States" within the meaning of
Sections 168(g)(1)(A) and 168(g)(4) of the Code; (2) if the Tax
Assumptions in subsections 8(a)(1) and (2) are accurate, then the
income tax consequences to Lessor set forth in Section 8(a)(3)
are correct; (3) under current law, neither the Equipment nor any
component thereof constitutes "limited use property" within the
meaning of Revenue Procedure 76-30, 1976-2 C.B. 647; (4) the
Equipment is complete for its intended use as of the In Service
Date set forth on the applicable Schedule; and (5) Lessee
(including any affiliate of Lessee) will not claim any
depreciation or cost recovery deductions with respect to the
Equipment, will not use the Equipment in any manner that will
cause the Equipment to cease to qualify under the Property
Classification, and has not taken and will not take any other
action in connection with filing its or their federal income tax
returns that would cause any of the Tax Assumptions to be
incorrect.
(c) If, by reason of any act or omission of Lessee or
by any other person in possession of the Equipment or by reason
of the inaccuracy or breach by Lessee of any of the
representations, warranties and covenants contained in Section
8(b), tax benefits resulting from the Tax Assumptions are lost,
disallowed, eliminated, reduced, recaptured, compromised, delayed
or otherwise made unavailable to Lessor or Lessor incurs a tax
detriment because it is required to include amounts in income
other than as contemplated in the Tax Assumptions, Lessee shall,
upon notice by Lessor, promptly pay to Lessor on demand in
immediately available funds, an indemnity payment, as determined
by Lessor, equal to the amount of such lost tax benefits and such
tax detriments incurred (computed at the then current maximum
federal tax rate applicable to corporations and including without
limitation, the incurrence of any tax detriments as a result of
the inclusion by Lessor in gross income of the aggregate
indemnity payment pursuant to this Section 8), plus any interest,
penalties and additions to tax thereon and plus any expenses
incurred by Lessor in connection therewith.
(d) All of the indemnities contained in this Section 8
shall apply to the Equipment and each component thereof and shall
continue in full force and effect, notwithstanding the expiration
or other termination of the Term and are expressly made for the
benefit of, and shall be enforceable by, Lessor.
SECTION 9
DELIVERY, ACCEPTANCE AND RETURN OF EQUIPMENT
(a) Upon delivery to and acceptance by Lessee of any
Equipment, Lessee shall execute and deliver the Schedule relating
to such Equipment, identifying same and acknowledging receipt
thereof, with all information required on the Schedule fully
completed. Lessee's execution of such Schedule shall constitute
acceptance of delivery of such Equipment and Lessee's
acknowledgement to Lessor that such Equipment is in good
operating order, repair, condition and appearance, is of the
manufacture, design and capacity selected by Lessee and is
suitable for the purposes for which such Equipment is leased.
(b) Subject to the provisions of any applicable
Schedule, at the expiration of the Term with respect to any
Equipment, upon demand Lessee shall, at its sole expense, return
such Equipment to Lessor, at a place designated by Lessor, in the
same operating order, repair, condition and appearance as when
originally received, ordinary wear and tear from proper use
thereof excepted. Such Equipment shall (1) be capable of being
immediately operated by a third party purchaser or third party
lessee without further inspection, repair, replacement,
alteration or improvement; (2) be in compliance with the
requirements of Section 10 of this Lease and any and all
statutes, laws, ordinances, rules and regulations of any Federal,
state or local governmental body, agency or authority applicable
to the use and operation of such Equipment; and (3) be free and
clear of any and all liens, encumbrances, claims and charges
(except those created expressly by or for the benefit of Lessor).
If upon such expiration or termination Lessee does not
immediately return an item of Equipment to Lessor, such item
shall continue to be held subject to all the terms and conditions
hereof, and Base Rent and other charges shall continue to accrue
and be payable hereunder with respect to such item until it is
returned to Lessor. Payment or acceptance of any such rent or
other charge shall not be deemed a waiver of any default and
shall not suspend or otherwise affect any right or remedy
hereunder, including without limitation Lessee's obligation to
return immediately (and Lessor's right to take immediate
possession of) any such item.
SECTION 10
MAINTENANCE
Lessee shall use the Equipment in a prudent and careful
manner, and with respect to the maintenance, use and operation of
the Equipment, Lessee shall comply with normal and safe
operating procedures for such Equipment, as set forth in
applicable operation manuals or instructions. Lessee shall also
comply with all maintenance requirements set forth in any
applicable Schedule. Lessee shall at its sole expense, maintain,
inspect, service, repair, overhaul and test the Equipment in
accordance with the manufacturer's specifications, instructions
and prudent industry practice (but in any event to the same
extent that Lessee would maintain similar property owned or
leased by Lessee) so as to keep the Equipment in good, safe and
satisfactory repair and order and in the same operating condition
and appearance as when received, ordinary wear and tear from
proper use thereof excepted. Lessee shall, at its sole expense,
promptly replace all parts and components of the Equipment which
may from time to time become worn out, lost, stolen, destroyed,
damaged beyond repair or otherwise rendered unfit for use. All
replacement parts and components shall be deemed a part of the
Equipment and shall be subject to the terms hereof and title to
such replacement parts and components shall vest in Lessor
without cost or payment.
SECTION 11
RENEWAL, EARLY TERMINATION AND
END OF LEASE TERM OPTIONS
Lessee's renewal, early termination and end of lease term
options, if any, with respect to any Equipment are set forth in
the applicable Schedule.
SECTION 12
ASSIGNMENT OF WARRANTIES AND LIMITATION OF RESPONSIBILITY
Lessor hereby transfers and assigns to Lessee, to the extent
allowable by law, for and during the Term of each Schedule with
respect to any Equipment covered by such Schedule, the
warranties, if any, of the manufacturer issued on such Equipment,
and hereby authorizes Lessee to obtain at Lessee's sole expense
the customary service furnished by the manufacturer in connection
therewith. LESSEE ACKNOWLEDGES THAT LESSOR IS NOT A
MANUFACTURER, THE AGENT OF A MANUFACTURER OR ENGAGED IN THE SALE
OR DISTRIBUTION OF THE EQUIPMENT AND HAS NOT MADE, AND DOES NOT
HEREBY MAKE, ANY REPRESENTATIONS AS TO MERCHANTABILITY,
PERFORMANCE, CONDITION, FITNESS OR SUITABILITY OF ANY OF THE
EQUIPMENT FOR THE PURPOSES OF LESSEE OR MAKE ANY OTHER
REPRESENTATION WITH RESPECT THERETO. LESSOR SHALL NOT BE LIABLE
TO LESSEE FOR ANY LOSS, CLAIM, LIABILITY, COST, DAMAGE OR EXPENSE
OF ANY KIND CAUSED, OR ALLEGED TO BE CAUSED, DIRECTLY OR
INDIRECTLY, BY ANY EQUIPMENT, OR BY AN INADEQUACY THEREOF FOR ANY
PURPOSE, OR BY ANY DEFECT THEREIN, OR THE USE OR MAINTENANCE
THEREOF, OR ANY REPAIRS, SERVICING OR ADJUSTMENTS THEREOF, OR ANY
DELAY IN PROVIDING OR FAILURE TO PROVIDE SAME, OR ANY
INTERRUPTION OR LOSS OF SERVICE OR USE THEREOF, OR ANY LOSS OF
BUSINESS, PROFITS, CONSEQUENTIAL OR OTHER DAMAGE OF ANY NATURE.
LESSEE AGREES THAT ITS OBLIGATIONS HEREUNDER SHALL NOT IN ANY WAY
BE AFFECTED BY ANY DEFECT OR FAILURE OF PERFORMANCE OF ANY
EQUIPMENT.
SECTION 13
TRUE LEASE; LESSOR'S TITLE; PERSONAL PROPERTY
(a) This Lease is intended as a true lease. Lessee
will make no claim nor assert any right to the Equipment
inconsistent with Lessor's ownership and will make appropriate
entries upon its books and records reflecting Lessor's ownership
of the Equipment.
(b) Title to the Equipment shall at all times remain
vested in Lessor and at no time during the Lease shall title
become vested in Lessee.
(c) The Equipment shall remain personal property at all
times, notwithstanding the manner in which it may be attached or
affixed to realty. Lessee warrants that at any time any
Equipment is leased hereunder, or is removed to a new location,
either (1) the premises in which such Equipment will be installed
will be owned by Lessee free of any liens or encumbrances, or (2)
if not owned by Lessee free of liens or encumbrances, the owner
of such premises and/or the holder of any such liens or
encumbrances on such premises shall have consented and
acknowledged that such Equipment is and shall remain personal
property subject to all the provisions of this Lease. Lessee
will obtain and record such instruments and take such steps as
may be necessary to prevent any person from acquiring any
right in any Equipment paramount to the rights of Lessor by
reason of such Equipment being deemed to be real property. If
any third party should attempt to establish any legal right in
any Equipment, then Lessee shall immediately after learning
thereof, notify Lessor in writing, and within thirty (30) days
after such notice, either (1) cause such right to be waived or
eliminated to the satisfaction of Lessor or (2) otherwise stay
such action or indemnify Lessor to Lessor's satisfaction.
SECTION 14
DEFAULT AND REMEDIES
(a) Each of the following shall constitute an event of
default hereunder and under any and all Schedules then in effect:
(1) nonpayment when due of any installment of rent or other sum
owing by Lessee hereunder, under any and all Schedules or under
any other agreement between Lessor and Lessee if such nonpayment
continues for five (5) days; (2) Lessee's failure to perform and
comply with any provision of Section 6, Section 9, Section 16 or
Section 20(b) hereof or with any provision of any Schedule; (3)
Lessee's failure to perform and comply with any other provision
or condition hereunder or under any Schedule if such failure
continues for fifteen (15) days after written notice thereof by
Lessor to Lessee; (4) Lessee's attempt to sell or encumber any
item of the Equipment without Lessor's prior written consent, or
the attachment of any lien to any such item in favor of anyone
other than Lessor, or any attempted levy, seizure of, or
attachment on such item; (5) any representation or warranty made
by Lessee to Lessor hereunder or under any Schedule, certificate,
agreement, instrument or other statement, including income and
financial statements, proves to have been incorrect in any
material respect when made; (6) the suspension of Lessee's
present business; (7) Lessee's general assignment for the benefit
of creditors or commencement of any voluntary case or proceeding
for relief under the United States Bankruptcy Code, or any other
present or future law for the relief of debtors, or the taking of
any action to authorize or implement any of the foregoing; (8)
the filing of any petition or application against Lessee under
any present or future law for the relief of debtors, including
proceedings under the United States Bankruptcy Code, or for
the subjection of property of debtors to the control of any
court, receiver or agency for the benefit of creditors if such
petition or application is consented to by Lessee or not
dismissed within sixty (60) days from the date of filing; (9) a
default exists under any agreement or instrument of Lessee's with
or in favor of Lessor or any direct or indirect affiliate of
Lessor; or (10) the attempted repudiation of this Lease or any
Schedule or any obligation hereunder or thereunder by Lessee.
(b) Upon the occurrence of an event of default, Lessor
may at its option: (1) proceed by appropriate court action or
actions, either at law or in equity, to enforce performance by
Lessee of the applicable covenants hereunder and under any or all
Schedules or to recover damages for the breach thereof; or (2)
cancel Lessee's right of possession of any or all of the
Equipment, whereupon all rights of Lessee to use the Equipment
shall absolutely cease and terminate, but Lessee shall remain
liable as herein provided. Upon such cancellation, Lessee shall,
at its own expense, immediately deliver such Equipment to Lessor
at a place within the continental United States designated by
Lessor. If Lessee shall fail to do so, Lessor may retake
possession of such Equipment by entering upon any premises at any
reasonable time, and thereafter Lessor may hold, possess, sell,
upgrade, lease to others or enjoy the same, free from any right
of Lessee, its successors of assigns. If Lessor elects to cancel
Lessee's right of possession of any Equipment, Lessor may recover
from Lessee any and all amounts that, under the terms of the
applicable Schedule, are then due or that have accrued to the
date of such termination, and may also recover forthwith from
Lessee, as damages for loss of its bargain and not as a penalty,
an amount equal to the Casualty Loss Value of such Equipment (as
provided in the Schedule covering such Equipment) as of the
rental payment date on or next preceding the date of the
occurrence of such event of default. However, if Lessor recovers
possession of such Equipment, Lessee's obligation under the
preceding sentence shall be reduced by (1) the net amount
Lessor in fact receives from the sale of any of such Equipment,
or (2) at Lessor's election, the present value (determined on the
basis of the "Discount Rate" as hereinafter defined) of the
noncancelable regularly scheduled rentals receivable under a
subsequent lease of any of the Equipment, taking into account
only the rentals receivable from the commencement date of such
subsequent lease until the end of the lease term for such
Equipment under the applicable Schedule. For purposes of this
Section 14, the Discount Rate shall be a rate of interest equal
to two percent (2%) plus the prime rate of NationsBank, N.A. (or
any successor to all or substantially all the assets thereof),
which rate is not necessarily the best or lowest rate offered,
(the "Prime Rate") as in effect on the day on which the
commencement date of such subsequent lease occurs.
(c) In addition to any amount recoverable under
subsection (b) above, Lessor may recover from Lessee all of
Lessor's costs and expenses incurred by reason of Lessee's breach
or default, including without limitation costs and expenses of
repossession, storing, holding, transporting, insuring,
servicing, repairing, maintaining, renting, and selling any
Equipment and collecting rents and other proceeds of its
disposition, and fees and expenses of attorneys and other
professionals employed by Lessor in connection with the
protection and enforcement of its title and interest in any and
all Equipment and its rights under this Lease and any and all
Schedules. From and after the occurrence of an event of default
hereunder, any installment of rent or other sum owing under any
Schedule that is not paid when due shall accrue interest from the
date of such event of default or, if later, the date such amount
becomes due, to the date it is paid, at a per annum rate equal to
the lesser of (1) two percent (2%) plus the Prime Rate and (2)
the highest rate, if any, permitted by applicable law.
(d) Except as otherwise expressly provided herein, all
rights and remedies of Lessor are concurrent and cumulative. The
exercise or partial exercise of any remedy shall not restrict
Lessor from further exercise of that remedy or any other remedy
provided for herein or otherwise available under applicable law.
To the extent permitted by applicable law, Lessee waives any
rights now or hereafter conferred by statute or otherwise that
may require Lessor to sell, re-lease or otherwise use or dispose
of any Equipment in mitigation of Lessor's damages or that may
otherwise limit or modify any of Lessor's rights or remedies.
SECTION 15
ASSIGNMENT BY LESSOR
LESSOR MAY ASSIGN OR TRANSFER, AND LESSEE HEREBY CONSENTS TO
THE ASSIGNMENT OR TRANSFER, OF THIS LEASE, ALL OR ANY PART OF ANY
SCHEDULE OR LESSOR'S INTEREST IN ANY EQUIPMENT WITHOUT NOTICE TO
LESSEE. Lessee agrees that the liability of Lessee to any
assignee of Lessor and any subsequent assignee of such assignee
shall be absolute and unconditional and shall not be affected by
any default hereunder of Lessor whatsoever or by the breach of
any warranty, express or implied, with respect to any Equipment
or Schedule.
SECTION 16
PROHIBITION OF ASSIGNMENT OF LESSEE
LESSEE SHALL NOT ASSIGN OR IN ANY WAY DISPOSE OF ALL OR ANY
PART OF ITS RIGHTS OR OBLIGATIONS UNDER THIS LEASE OR ANY
SCHEDULE OR ENTER INTO ANY SUBLEASE OF ALL OR ANY PART OF ANY
EQUIPMENT WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR, except
that Lessee may sublease the Equipment under a Permitted
Sublease. Lessee hereby grants to Lessor a security interest in
all of Lessee's rights and interests in, to and arising under any
Permitted Sublease.
"Permitted Sublease" means a sublease (1) to a corporation,
limited liability company, partnership or other business entity
that is and continues to be a wholly owned subsidiary of Lessee,
(2) the sublessee with respect to which shall be organized under
the laws of the United States or any state thereof and shall have
its principal place of business in the United States, (3) the
term of which shall in no event exceed the then remaining portion
of the Term, (d) immediately prior to the commencement of the
term of which, and after giving effect to which, there shall
exist no default or event of default, (5) which, if requested by
Lessor, shall be collaterally assigned to Lessor pursuant to an
assignment which in form and substance is satisfactory to Lessor,
(6) which shall contain unconditional payment provisions and
provisions relating to insurance, maintenance, operation in
accordance with applicable laws and insurance requirements,
possession, delivery and return conditions (insofar as general
condition of the Equipment is concerned), events of default,
remedies and permitted liens on the Equipment which provide for
benefits and protections to Lessee, as lessor, which are
substantially similar to the benefits and protections provided to
Lessor by such provisions of this Lease and (7) which shall
be expressly subject and subordinate to the terms of this Lease.
With respect to a Permitted Sublease, no such sublease by Lessee
will reduce any of the obligations of Lessee hereunder or
the rights of Lessor hereunder, and all of the obligations of
Lessee hereunder shall be and remain primary and shall continue
in full force and effect as the obligations of a principal and
not of a guarantor or surety. Lessee shall furnish to Lessor
not later than ten (10) days prior to the effective date of such
sublease (i) new insurance certificates from Lessee's insurance
broker, in form and substance satisfactory to Lessor, indicating
compliance with the insurance provisions of this Lease and (ii)
an officer's certificate from Lessee naming the sublessee and
specifying the address for the sublessee's principal place of
business. Lessee shall, and shall cause such sublessee to,
execute and deliver such instruments to the appropriate person
for filing and to deliver copies of the same to Lessor (including
sublease agreements and Uniform Commercial Code financing
statements) as may be requested by Lessor in connection with any
such sublease.
SECTION 17
INFORMATION
(a) Lessee shall deliver or cause to be delivered to
Lessor (1) within sixty (60) days after the last day of each
fiscal quarter except the fourth quarter, unaudited quarterly
financial reports including the consolidated balance sheets of
Lessee and its subsidiaries, each as of the end of such quarterly
period and consolidated statements of income, retained earnings
and cash flows for the quarter then ended and for the year to
date of Lessee and its subsidiaries, each setting forth in each
case comparative consolidated financial statements for the
corresponding quarterly period in the preceding year and the year
to date, all prepared in accordance with generally accepted
accounting principles applied on a consistent basis, and (2)
within one hundred twenty (120) days after the end of each fiscal
year, audited year end financial reports including consolidated
balance sheets of Lessee and its subsidiaries, each as of the end
of such fiscal year, and the notes thereto, and consolidated
statements of income, retained earnings and cash flows for the
year then ended of Lessee and its subsidiaries and the notes
thereto, and setting forth in each case comparative consolidated
financial statements for the corresponding period in the
preceding year, all prepared in accordance with generally
accepted accounting principles consistently applied and
containing opinions regarding Lessee and its subsidiaries
satisfactory to Lessor of a firm of independent certified public
accountants of national prominence selected by Lessee.
(b) Lessee shall furnish such information as Lessor may
reasonably request at any time concerning Lessee and its affairs,
including without limitation information concerning any Equipment
covered by a Schedule.
SECTION 18
TRANSACTION COSTS
Lessee further agrees, whether or not the transactions
contemplated hereby are consummated, to pay the out-of-pocket
transaction costs, fees and expenses of Lessor and Lessee
incurred in connection with the negotiation, preparation,
execution, delivery, filing, amendment, modification and/or
enforcement of the documents related thereto and all other costs,
fees and expenses of Lessor and Lessee in connection with the
transactions contemplated hereby, including but not limited to
reasonable legal fees of Lessor in connection with the
negotiation, execution and delivery of this Lease.
SECTION 19
NOTICES
All notices provided for or required under the terms and
provisions hereof shall be in writing, and any such notice shall
be deemed given when personally delivered or when deposited
with a nationally recognized overnight delivery service, with the
cost therefor prepaid, by facsimile with telephonic confirmation
during normal business hours, or in the United States mails, with
proper postage prepaid, for first class certified mail, return
receipt requested, addressed (1) if to Lessor or Lessee, at their
respective addresses as set forth herein or at such other address
as either of them shall, from time to time, designate in writing
to the other, and (2) if to any Assignee, to the address of such
Assignee as such Assignee shall designate, from time to time, in
writing to Lessor and Lessee.
If to Lessor: NationsBanc Leasing Corporation of North Carolina
NationsBank Plaza
000 Xxxxx Xxxxx Xxxxxx, XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Manager, Corporate Lease
Administration
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Lessee: Foodbrands America, Inc.
0000 X.X. Xxxxxxxxxx
Xxxxx 0000
Xxxxxxxx Xxxx, XX 00000-0000
Attention: Assistant Treasurer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
SECTION 20
REPRESENTATIONS, WARRANTIES AND COVENANTS
(a) Lessee represents, warrants and covenants to and
with Lessor the following: (1) Lessee, is a corporation duly
organized, validly existing and in good standing under the laws
of the state in which it is incorporated, and is duly qualified
and authorized to do business wherever the nature of its
activities or the ownership of its properties requires such
qualification and authorization; (2) Lessee has the full power,
authority and legal right to execute, deliver and perform the
terms of this Lease; and this Lease has been duly authorized by
all necessary corporate action of Lessee and constitutes a valid
and binding obligation of Lessee, enforceable in accordance with
its terms; (3) neither the execution and delivery of, nor the
performance by Lessee under, this Lease will contravene any law
or government regulation or any charter, by-law of Lessee, or any
provision in any existing mortgage, indenture, contract or
agreement binding upon Lessee; (4) no consent of the
shareholders, or of any trustee or holder of any indebtedness of
Lessee, is or will be required as a condition to the validity of
this Lease, or if required, all such consents have been obtained
and duly certified copies thereof have been delivered to Lessor;
and (5) all information furnished by Lessee to Lessor is accurate
and all financial statements Lessee has furnished to Lessor,
including balance sheets and statements of income, retained
earnings and cash flows, have been prepared in accordance with
generally accepted accounting principles, consistently applied,
and reasonably reflect, as of their respective dates, results of
the operations and the financial condition of Lessee and its
subsidiaries, if any.
(b) Lessee shall not consolidate with or merge into or
with any person or sell, transfer, assign, lease or otherwise
convey all or substantially all of its assets to any person
unless:
(i) the successor entity formed by such a
consolidation or merger or the successor entity that acquires by
sale, transfer, assignment, lease or other conveyance all or
substantially all its assets (a) shall have a net worth of at
least the net worth of the Lessee immediately prior to the
transaction, (b) shall be solvent, (c) shall be organized under
the laws of the United States of America, a state thereof or the
District of Columbia, and (d) shall execute and deliver to the
Lessor an agreement in form and substance satisfactory to the
Lessor containing an assumption by such successor of the due and
punctual payment and performance of each obligation of Lessee
under this Lease and the Supplements;
(ii) immediately before and immediately after
giving effect to such transaction, no default or event of default
shall have occurred and be continuing, and no default or event of
default will result from such transaction; and
(iii) Lessee shall have delivered to the Lessor
an officer's certificate and an opinion of counsel satisfactory
to the Lessor stating that such consolidation, merger, sale,
transfer, assignment, lease or other conveyance, and the
assumption agreement required by clause (i) above, complies with
this Section 29(b) and that all conditions precedent relating
to such action have been complied with. Such opinion of counsel
shall also state that such assumption agreement has been duly
authorized, executed and delivered by such successor entity and
is enforceable against such successor corporation in accordance
with its terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the rights of creditors generally and by general
principles of equity.
Upon any such consolidation, or merger, or any sale,
transfer, assignment, lease or other conveyance of all or of
substantially all the assets of Lessee in accordance with this
Section 29(b), then any successor entity formed by consolidation
or merger or to which such sale, conveyance, transfer,
assignment, lease or other conveyance shall be made shall succeed
to, and be substituted for, and may exercise every right and
power of, Lessee under this Lease and the Supplements with the
same effect as if successor had been named as Lessee therein. No
such transaction shall have the effect of releasing Lessee or any
successor entity that shall theretofore have become such in the
manner prescribed in this Section 29(b) from its liability under
the Lease or the Supplements.
SECTION 21
CONDITIONS PRECEDENT
(a) The obligation of Lessor to enter into this Lease
is subject to the delivery on the date hereof of the following
documents each in form and substance satisfactory to Lessor:
(1) this Lease duly executed by Lessee;
(2) Secretary's Certificate of Lessee
(substantially in the form of Exhibit B attached hereto)
certifying as to the corporate resolutions, articles of
incorporation and bylaws of Lessee, together with an incumbency
certificate of Lessee containing the name(s), title(s) and
specimen signature(s) of the person(s) authorized on behalf of
Lessee to execute the Lease and any related documents;
(3) articles of incorporation of Lessee certified
by the Secretary of State of Delaware and certificates of good
standing from the States where the Equipment will be located; and
(4) such other documents, appraisals,
certificates, financing statements and other items as Lessor may
reasonably require.
(b) The obligations of Lessor to purchase the Equipment
specified on any Schedule and to lease such Equipment to the
Lessee are subject to the delivery to Lessor on or prior to the
closing date specified in such Schedule of the following
documents each in form and substance satisfactory to Lessor:
(1) the Schedule (substantially in the form of
Exhibit A attached hereto) duly executed by the Lessee and dated
such closing date;
(2) Uniform Commercial Code financing statements
and other documents as Lessor shall deem necessary or advisable
to protect Lessor's interest in the Equipment and to effectuate
the purposes of this Lease.
(3) certificates of insurance for the Lessee
evidencing the coverages required under Section 6 hereof with
respect to the Equipment referenced in the Schedule;
(4) Assignments of Purchase Orders (substantially
in the form of Exhibit C attached hereto);
(5) officer's certificate of Lessee (substantially
in the form of Exhibit D attached hereto) certifying that no
default or event of default has occurred and is continuing, there
has been no adverse changes in the financial or other condition
of the Lessee and that the representations and warranties made in
the Lease are true and correct as of the date of the
certificates;
(6) UCC search results satisfactory to the Lessor;
and
(7) such other documents, appraisals,
certificates, financing statements and other items as Lessor may
reasonably require.
SECTION 22
MISCELLANEOUS
(a) Each Schedule is and is intended to be a lease, and
Lessee does not acquire hereby or under any Schedule any right,
title, equity or other interest in or to any Equipment, except
the right to use the same under the conditions hereof and under
the additional conditions set forth in the applicable Schedule.
Lessee waives any right to assert any lien or security interest
on any Equipment in Lessee's possession or control for any
reason.
(b) The relationship between Lessor and Lessee shall
always and only be that of lessor and lessee. Lessee shall never
at any time for any purpose whatsoever be or become the agent of
Lessor, and Lessor shall not be responsible for the acts or
omissions of Lessee or its agents.
(c) Lessor, its agents and employees shall have the
right to enter any property where any Equipment is located to
inspect such Equipment at any reasonable time. Lessor's right to
inspect the Equipment is solely for the benefit of Lessor and
shall not impose any obligation of any kind whatsoever on Lessor.
(d) Lessee agrees to pay Lessor overdue interest at a
per annum rate equal to the lesser of (1) two percent (2%) plus
the Prime Rate and (2) the highest rate, if any, permitted by
applicable law on all payments or other sums not paid by Lessee
to Lessor when the same are due and owing under the provisions of
this Lease and any Schedule.
(e) Lessor's rights and remedies with respect to any of
the terms and conditions of this Lease and each Schedule shall be
cumulative and not exclusive and shall be in addition to all
other rights and remedies in its favor. Lessor's failure to
enforce strictly any of the provisions of this Lease or any
Schedule shall not be construed as a waiver thereof or as
excusing Lessee from future performance.
(f) The invalidity of any portion of this Lease or any
Schedule shall not affect the force and effect of the remaining
valid portions hereof and thereof.
(g) Lessor and Lessee hereby agree that to the extent
permitted by law (1) Lessee will file all returns and other
appropriate documentation in regard to personal property taxes on
the Equipment, (2) pay all such personal property taxes and (3)
reimburse Lessor for any and all such personal property taxes
previously paid by Lessor.
(h) To the extent permitted by applicable law, Lessee
hereby waives any and all rights and remedies conferred upon a
lessee by Sections 2A-508 through 2A-522 of the UCC, including
but not limited to Lessee's rights to: (1) cancel this Lease; (2)
repudiate this Lease; (3) reject the Equipment; (4) revoke
acceptance of the Equipment; (5) recover damages from Lessor for
any breaches of warranty or for any other reason; (6) a security
interest in the Equipment in Lessee's control or possession for
any reason; (7) deduct all or any part of any claimed damages
resulting from Lessor's default, if any, under this Lease; (8)
accept partial delivery of the Equipment; (9) "cover" by making
any purchase or lease of or contract to purchase or lease
Equipment in substitution for those due from Lessor; and (10)
specific performance, replevin, detinue, sequestration, claim and
delivery or the like for any Equipment identified to this Lease.
(i) Lessee hereby irrevocably appoints Lessor as
Lessee's agent and attorney-in-fact for Lessee to execute,
deliver, file or record any Uniform Commercial Code financing
statements as Lessor shall deem necessary or advisable to protect
Lessor's interest in the Equipment and to take such action for
Lessee and in Lessee's name, place and stead.
(j) THIS LEASE AND EACH SCHEDULE INCORPORATING ITS
TERMS AND CONDITIONS SHALL BE GOVERNED BY AND CONSTRUED ACCORDING
TO THE INTERNAL LAWS OF THE STATE OF NORTH CAROLINA AS OF THE
DATE HEREOF, WITHOUT GIVING EFFECT TO ANY PRINCIPLE OF CONFLICTS
OF LAW OR CHOICE OF LAW THAT WOULD OTHERWISE MAKE THE LAW OF
ANY OTHER JURISDICTION THE LAW GOVERNING THIS LEASE OR ANY SUCH
SCHEDULE.
(k) IN THE EVENT THAT ANY ACTION, SUIT OR OTHER
PROCEEDING IS BROUGHT AGAINST LESSEE BY OR ON BEHALF OF LESSOR
TO ENFORCE THE OBSERVANCE OR PERFORMANCE OF ANY OF THE PROVISIONS
OF THIS LEASE OR ANY SCHEDULE, INCLUDING WITHOUT LIMITATION THE
COLLECTION OF ANY AMOUNTS OWING HEREUNDER OR THEREUNDER, LESSEE
HEREBY IRREVOCABLY (1) CONSENTS TO THE EXERCISE OF JURISDICTION
OVER LESSEE AND ITS PROPERTY BY ANY FEDERAL COURT LOCATED IN
NORTH CAROLINA AND ANY XXXXX XXXXX XX XXX XXXXX XX XXXXX XXXXXXXX
AND (2) WAIVES ANY OBJECTION IT MIGHT NOW OR HEREAFTER HAVE OR
ASSERT TO THE VENUE OF ANY SUCH PROCEEDING IN ANY COURT DESCRIBED
IN CLAUSE (1) ABOVE.
(l) EXCEPT AS PROHIBITED BY LAW, EACH PARTY HERETO
HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY
LITIGATION, UNDER OR IN CONNECTION WITH, THIS LEASE OR ANY
SCHEDULE, ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES OR ANY OTHER DAMAGES THAN, OR IN ADDITION TO, ACTUAL
DAMAGES.
(m) This Lease may be executed in counterparts by the
parties hereto when so executed, and each such counterpart shall
be binding on both parties hereto, notwithstanding that both
parties are not signatories to the same counterpart.
IN WITNESS WHEREOF, the parties hereto have caused this Lease
to be executed by their duly authorized representatives as of the
date first above written.
LESSOR:
NATIONSBANC LEASING CORPORATION
OF NORTH CAROLINA
By: (Xxxxxx X. Xxxxxxxx Xx.)
Name: Xxxxxx X. Xxxxxxxx Xx.
Title: Senior Vice President
LESSEE:
FOODBRANDS AMERICA, INC.
By: (Xxxxxxx X. Xxxxx)
Name: Xxxxxxx X. Xxxxx
Title: Vice President
COUNTERPART NO. ___ OF ___ SERIALLY NUMBERED MANUALLY EXECUTED
COUNTERPARTS. TO THE EXTENT IF ANY THAT THIS DOCUMENT
CONSTITUTES CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE, NO
SECURITY INTEREST IN THIS DOCUMENT MAY BE CREATED THROUGH THE
TRANSFER AND POSSESSION OF ANY COUNTERPART OTHER THAN COUNTERPART
NO. 1.
EXHIBIT A
EQUIPMENT LEASE SCHEDULE NO. _____
FOR MASTER EQUIPMENT LEASE AGREEMENT
THIS EQUIPMENT LEASE SCHEDULE NO. _____ FOR MASTER EQUIPMENT
LEASE AGREEMENT (this "Schedule") dated as of __________ ___,
199_ is by and between NATIONSBANC LEASING CORPORATION OF NORTH
CAROLINA, a North Carolina corporation ("Lessor"), and FOODBRANDS
AMERICA, INC., a __________ Corporation ("Lessee"), is executed
pursuant to and is subject to the terms and conditions of the
Master Equipment Lease Agreement (the "Lease") dated January ___,
1996, between Lessor and Lessee. Capitalized terms used in this
Schedule and not defined herein shall have the respective
meanings assigned to such terms in the Lease.
1. Lessor's Total Equipment Cost: $_______________.
2. Description of Equipment: The Equipment is described on
Annex A, attached hereto and made a part hereof.
3. Term of Lease with Respect to Equipment: The term of
lease for the Equipment described herein (the "Term") commences
on _______________ (the "Acceptance Date"), and continues through
and includes _______________ (the "Base Term Expiration Date").
The Term consists of [an Interim Term of _______________
commencing on the Acceptance Date, and continuing through and
including _______________, (the "Base Term Commencement Date")
and] a Base Term of _______________ commencing on
[_______________ (the "Base Term Commencement Date"),] [the Base
Term Commencement Date] and continuing through and including the
Base Term Expiration Date.
4. Rental: Interim Rent, if any, shall be due Lessor for
each day by which the Acceptance Date precedes the Base Term
Commencement Date. Interim Rent for each day in the Interim Term
shall be equal to the first Base Rent installment divided by
_____ (__). Interim Rent shall be payable on the Base Term
Commencement Date. The aggregate Base Rent shall be payable in
the amounts and at the times as set forth in Schedule 1, attached
hereto and made a part hereof. A rental period shall consist of
one month.
5. Casualty Loss Value: Upon the occurrence of any
casualty loss of any Equipment or other event giving Lessor the
right to require immediate payment of such Equipment's
"Casualty Loss Value", Lessor shall calculate such Casualty Loss
Value and give Lessee written notice thereof. The Casualty Loss
Value of any Equipment at any time shall be the amount computed
by multiplying the Lessor's Total Equipment Cost of such
Equipment (as set forth above) by the Casualty Loss Factor
corresponding to the immediately preceding Base Rent Payment
Date, as set forth on Schedule 1. The Casualty Loss Factor for
the first Base Rent Payment Date shall also apply to the Interim
Term, and the Casualty Loss Factor for the last Base Rent Payment
Date shall also apply to all periods thereafter.
6. Termination Value: Upon the occurrence of an optional
termination by Lessee of this Schedule with respect to the
Equipment, Lessor shall calculate the Termination Value and
give Lessee written notice thereof. The Termination Value of any
Equipment at any time shall be the amount computed by multiplying
the Lessor's Total Equipment Cost of such Equipment (as set forth
above) by the Termination Value Factor corresponding to the
immediately preceding Base Rent Payment Date, as set forth on
Schedule 1.
7. Intentionally Omitted
8. Property Classification: seven-year property.
9. In Service Date: The Equipment has been or will be
placed in service on: _______________.
10. Early Termination Date: July 1, 1998.
11. Location of Equipment: The Equipment is and will remain
located at the locations specified in Annex A.
12. Early Termination Option: So long as no event of
default under the Lease shall have occurred and be continuing, on
any Base Rent Payment Date after the Early Termination Date,
Lessee may, if Lessee determines that the Equipment under all the
Schedules has become obsolete or surplus to its needs as
evidenced by a certificate executed by a responsible officer of
Lessee, upon one hundred eighty (180) days prior written notice
to Lessor, terminate this Lease and all Schedules with respect to
all, but not less than all, of the Equipment on all Schedules on
the date specified in such notice. On such termination date,
Lessee shall cause to be purchased by a purchaser (other than
Lessee or person affiliated with Lessee) reasonably acceptable to
Lessor all of Lessor's right, title and interest in and to all,
but not less that all, the Equipment for a purchase price and on
terms acceptable to Lessor, and Lessee shall assemble and deliver
such Equipment to such purchaser in the condition provided for in
Section 9(b) of the Lease. Lessee shall continue to remain
liable for the full and complete payment and performance of all
rents and other obligations payable and performable by Lessee
under the Lease and this Schedule until such Equipment has been
so sold. In addition, Lessee shall pay to Lessor on the date of
such sale the amount, if any, by which the proceeds of such sale
are less than the sum of: (a) all rent for such Equipment due
and unpaid as of, together with rent accrued through, the date of
such sale; (b) the Termination Value of the Equipment, as
provided Schedule 1 to this Schedule, as of the date of
such sale; (c) an amount equal to accrued taxes and other amounts
payable hereunder and under the Lease by Lessee with respect to
such Equipment; (d) all costs, expenses, losses and damages
incurred or sustained by Lessor in connection with such sale
including all amounts Lessee shall be required to pay Lessor
pursuant to any indemnity provision contained in the Lease; and
(e) interest on each of the foregoing and on all sums not paid
when due under any provision of the Lease at a per annum rate
equal to the lesser of (i) two percent (2%) plus the Prime Rate
and (ii) the highest rate, if any, permitted by applicable law.
For purposes of this Section 12, rent shall be prorated daily and
the Termination Values set forth in Schedule 1 are to be prorated
daily by interpolation on a straight line basis to the date of
payment.
13. End of Term Options:
(A) If the lease of Equipment subject to this Schedule shall
not have been earlier terminated, Lessee shall elect, upon
written notice to Lessor delivered not later than one hundred
eighty (180) days prior to the Base Term Expiration Date for such
Equipment, either the option described in Section 13(A)(a) or the
option described in Section 13(A)(b); provided, that Lessee
shall be deemed to have elected the option described in Section
13(A)(b) hereof if Lessor does not receive such notice within the
time period specified in the preceding clause; provided further,
that Lessor shall not bound by Lessee's election if an event of
default under the Lease has occurred and is continuing on the
Base Term Expiration Date; provided further, that such election
by Lessee once made shall be irrevocable.
(a) Fair Market Value Purchase Option. Upon the
expiration of the Base Term and payment by Lessee of all amounts
due and owing under the Lease and this Schedule, Lessee shall
purchase all of Lessor's right, title and interest in and to all,
but not less than all, of the Equipment for a purchase price
equal to the greater of twenty percent (20%) of Lessor's Total
Equipment Cost or the Fair Market Value of the Equipment (the
"Purchase Price"). The sale of the Equipment to Lessee shall be
on an "AS-IS, WHERE-IS" basis, with no representations or
warranties (expressed or implied) as to any matter
whatsoever, except that Lessor shall represent to Lessee that no
security interest, lien or encumbrance against such Equipment has
been created by or through Lessor. Lessee shall pay Lessor on
the Base Term Expiration Date in immediately available funds the
sum of: (i) the Purchase Price; (2) all rent for such Equipment
due and unpaid as of, together with rent accrued through, the
date of such sale; (3) an amount equal to accrued taxes and other
amounts payable hereunder and under the Lease by Lessee with
respect to such Equipment; (4) all costs, expenses, losses and
damages incurred or sustained by Lessor in connection with such
sale including all amounts Lessee shall be required to pay Lessor
pursuant to any indemnity provision contained in the Lease; and
(5) interest on each of the foregoing and on all sums not paid
when due under any provision of this Lease at a per annum rate
equal to the lesser of (i) two percent (2%) plus the Prime Rate
and (ii) the highest rate, if any, permitted by applicable law.
For purposes of this Section 13, rent shall be prorated daily by
interpolation on a straight line basis to the date of payment.
"Fair Market Value" shall mean, with respect to the
Equipment, or any item of Equipment at any time, the fair market
sale value thereof at such time as determined by agreement
between Lessor and Lessee or, if requested by either of such
parties, by the Appraisal Procedure. Such Fair Market Value
shall be equal to the cash sale value of the Equipment which
would be obtained in an arm's-length transaction between an
informed and willing seller (other than the Lessee currently
in possession or a used equipment dealer) under no compulsion to
sell and an informed and willing buyer under no compulsion to
buy, which determination shall be made on the assumption that the
Equipment is free and clear of all liens and is at the location
and in the condition and repair required under the Lease, and
shall be calculated on the basis of its fair market sale value at
its existing location, without deduction for costs and expenses
of dismantling or removing.
"Appraisal Procedure" shall mean the following procedure
for determining Fair Market Value if either Lessor or Lessee
shall request by notice (the "Appraisal Request") to the other
the determination of such value by the Appraisal Procedure.
Lessor and Lessee shall, within 15 days after receipt of the
Appraisal Request, appoint an independent appraiser mutually
satisfactory to them, who shall determine such value. If Lessor
and Lessee are unable to agree on a mutually acceptable appraiser
within such 15-day period, Fair Market Value shall be
determined by a panel of three independent appraisers, one of
whom shall be appointed by Lessor, another by Lessee and the
third of whom shall be appointed by the other two appraisers or,
if such two appraisers are unable to agree on a third appraiser
within 45 days after the date of the Appraisal Request, by the
American Arbitration Association (or its successor); provided
that if either Lessor or Lessee shall not have appointed its
appraiser within 30 days after the Appraisal Request, such value
shall be determined solely by the appraiser selected by the other
party. The appraiser or appraisers appointed pursuant to the
foregoing procedure shall be instructed to determine Fair Market
Value within 45 days after such appointment and such
determination shall be final and binding on Lessor and Lessee.
If three appraisers are appointed and fail to reach agreement,
the determinations of the appraisers shall be averaged and such
average shall constitute the determination of the appraisers.
The fees and expenses of each appraiser shall be divided equally
between Lessee, on the one hand, and Lessor, on the other.
(b) Fair Market Value Renewal Option. Upon expiration
of the Base Term and payment of all amounts due and owing under
this Lease and this Schedule, Lessee shall renew the Lease of the
Equipment subject to this Schedule for an additional one year
term (the "Fair Market Renewal Term"). At the end of the Base
Term, if Lessee has elected to renew this Lease as provided in
this Section 13(B), and provided, that (i) there shall not then
have occurred and be continuing a default or event of default,
(ii) Basic Rent, Stipulated Loss Value and Casualty Value for
such Fair Market Renewal Term, have been determined as herein
provided and (iii) a Lease Supplement evidencing such renewal
shall have been executed, this Lease shall continue in full force
and effect during such Fair Market Renewal Term. During such
Fair Market Renewal Term (1) Lessee shall pay Lessor Basic Rent
in an amount equal to the higher of (x) the Fair Market Rental
Value as determined below for such Fair Market Renewal Term or
(y) ________% as a percent of Equipment Cost per month, which
Basic Rent shall be payable in equal twelve installments in
arrears, each such installment being due and payable on each
monthly anniversary of the first day of the Fair Market Renewal
Term and (2) the amounts that are payable during such Fair Market
Renewal Term in respect of the Stipulated Loss Value and Casualty
Value shall be determined on the basis of the Fair Market Value
of the Equipment as of the commencement of such Fair Market
Renewal Term. "Fair Market Rental Value" shall mean, with
respect to the Equipment, the fair market rental value thereof as
at such time determined by agreement between Lessor and Lessee
or, if requested by either of such parties, by the Appraisal
Procedure.
(B) If the Lease of the Equipment subject to this Schedule
shall have been renewed for the Fair Market Value Renewal Term
pursuant to Section 13(A)(b) and if the Lease of the Equipment
subject to this Schedule shall not have been earlier terminated,
Lessee may elect, upon notice to Lessor delivered not later than
one hundred eighty (180) days prior to the last day of the
Fair Market Value Renewal Term, the following option:
Fair Market Value Purchase Option. Upon the expiration
of the Fair Market Value Renewal Term and payment by Lessee of
all amounts due and owing under the Lease and this Schedule,
Lessee shall purchase all of Lessor's right, title and interest
in and to all, but not less than all, of the Equipment for a
purchase price equal to the Fair Market Value of the Equipment
(the "Purchase Price"). The sale of the Equipment to Lessee
shall be on an "AS-IS, WHERE-IS" basis, with no representations
or warranties (expressed or implied) as to any matter
whatsoever, except that Lessor shall represent to Lessee that no
security interest, lien or encumbrance against such Equipment has
been created by or through Lessor. Lessee shall pay Lessor on
the last day of the Fair Market Value Renewal term in immediately
available funds the sum of: (i) the Purchase Price; (2) all rent
for such Equipment due and unpaid as of, together with rent
accrued through, the date of such sale; (3) an amount equal to
accrued taxes and other amounts payable hereunder and under the
Lease by Lessee with respect to such Equipment; (4) all costs,
expenses, losses and damages incurred or sustained by Lessor in
connection with such sale including all amounts Lessee shall be
required to pay Lessor pursuant to any indemnity provision
contained in the Lease; and (5) interest on each of the foregoing
and on all sums not paid when due under any provision of this
Lease at a per annum rate equal to the lesser of (i) two percent
(2%) plus the Prime Rate and (ii) the highest rate, if any,
permitted by applicable law. For purposes of this Section 13(B),
rent shall be prorated daily by interpolation on a straight line
basis to the date of payment.
If Lessee does not elect the foregoing option, it shall
return all, but not less than all, of the Equipment to Lessor
pursuant to the provisions of Section 9(b) of the Lease.
14. Acknowledgement of Receipt of Equipment: Lessee
acknowledges that the Equipment described herein has been
delivered to and received and inspected by Lessee, that such
Equipment is of the manufacture, design and capacity selected by
Lessee and is suitable for the purposes for which such Equipment
is leased. Lessee confirms that the Equipment is in good
operating order, repair, condition and appearance and that the
same has been accepted as Equipment leased by Lessee under this
Schedule.
15. Modification. Except as expressly provided herein or in
the Lease, no representation, warranty, promise, guaranty or
agreement, oral or written, express or implied, has been made by
either party hereto with respect to the Lease, this Schedule or
any Equipment. The Lease and this Schedule constitute the entire
agreement between the parties hereto with respect to the leasing
of the Equipment. Any change or modification to the Lease or
this Schedule must be made in writing and signed by the parties
hereto.
_________________
Lessee's Initials
IN WITNESS WHEREOF, the parties hereunto have caused this
Schedule to be executed by their duly authorized representatives
as of the date first above written.
LESSOR:
NATIONSBANC LEASING CORPORATION
OF NORTH CAROLINA
By: _________________________
Name: _________________________
Title: _________________________
LESSEE:
FOODBRANDS AMERICA, INC.
By: _________________________
Name: _________________________
Title: _________________________
ANNEX A
Description of Equipment
Plant No. Location Vendor Equipment Description
SCHEDULE 1
Base Rent Payment Schedule,
Casualty Loss Value Factors and Termination Value Factors
Base Rent Base Rent Casualty Loss Termination
Payment Date Payment* Value Factor* Value Factor*
* Expressed as a percentage of Lessor's Total Equipment Cost.
EXHIBIT B
SECRETARY'S CERTIFICATE
OF
FOODBRANDS AMERICA, INC.
This Certificate is being delivered in consideration of the
Master Equipment Lease Agreement (the "Lease") by and between
Foodbrands America, Inc. ("Lessee") and NationsBanc Leasing
Corporation of North Carolina ("Lessor"), dated as of January
___, 1996. The undersigned hereby certifies that [he/she] is the
duly elected, qualified and acting __________ Secretary of Lessee
and hereby further certifies as follows:
1. Attached hereto as Exhibit A is a true, correct and
complete copy of resolutions duly adopted by the Board of
Directors of Lessee authorizing the execution, delivery and
performance of the Lease by Lessee, and said resolutions
have not been modified or rescinded since the adoption thereof
and are in full force and effect on and as of the date hereof.
2. Attached hereto as Exhibit B is a true, correct and
complete copy of the articles of incorporation of Lessee,
together with any and all amendments to date, which articles
remain in full force and effect on and as of the date hereof.
3. Attached hereto as Exhibit C is a true, correct and
complete copy of the bylaws of Lessee, together with any and all
amendments to date, which bylaws have not been rescinded and
remain in full force and effect on and as of the date hereof.
4. The following individuals are duly elected officers
of Lessee who are authorized by the above resolutions to act on
behalf of Lessee in connection with the transactions contemplated
by the Lease, and the signatures appearing opposite their
respective names are genuine signatures of such individuals:
Name Position Signature
President ____________________
Vice President ____________________
Secretary ____________________
Assistant Secretary ____________________
IN WITNESS WHEREOF, the undersigned has executed this
Secretary's Certificate as of this ___ day of _________, 199_.
By:____________________________________
Name:_________________________________
Title:__________________________________
EXHIBIT C
ASSIGNMENT OF PURCHASE ORDERS
THIS ASSIGNMENT OF PURCHASE ORDERS (this "Assignment") made
this _____ day of __________, 199_, by and between Foodbrands
America, Inc., a __________ corporation (the "Assignor") and
NationsBanc Leasing Corporation of North Carolina, a North
Carolina corporation (the "Assignee").
WHEREAS, the Assignor has executed and delivered the purchase
orders attached hereto as Exhibit A (the "Purchase Orders") to
the vendors shown in such Purchase Orders, which Purchase Orders
cover the property described therein (the "Equipment"); and
WHEREAS, the Assignor desires to assign to Assignee all of
its rights and obligations under the Purchase Orders so that
Assignee might purchase and take title to the Equipment in the
Assignor's stead in order to lease the Equipment to the Assignor
pursuant to the Equipment Lease Schedule No. ____, dated as of
the date hereof, between Assignor and Assignee;
NOW, THEREFORE, in consideration of the mutual promises set
forth herein and for other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged,
the parties hereto agree as follows:
1. The Assignor (a) represents and warrants that the
Purchase Orders constitute the entire understanding of the
parties thereto with respect to the purchase and sale of the
Equipment covered thereby; (b) hereby assigns to Assignee all of
its rights, if any, under the Purchase Orders; (c) hereby assigns
to Assignee and Assignee hereby assumes and agrees to perform
Assignor's payment obligations under the Purchase Orders; and (d)
represents and warrants that neither notice to nor consent from
the respective vendor is required in connection with the
execution, delivery and performance of this Assignment or for the
validity or enforceability of this Assignment.
2. Pursuant to this Agreement, the vendors referred to
above may look to Assignee for full performance of all the
Assignor's obligations under the Purchase Orders; provided,
however, that the Assignor hereby agrees with Assignee that the
Assignor shall continue to be responsible for the actual
performance of all such obligations (with the exception of the
obligation to pay the purchase price of the Equipment) and the
Assignor agrees to hold harmless and indemnify Assignee from
all liability, loss, damage, and expense arising from or directly
or indirectly attributable to such obligations.
IN WITNESS WHEREOF, the parties have duly executed this
Assignment by their respective authorized representatives as of
the day and year first above written.
FOODBRANDS AMERICA, INC.
By:____________________________________
Name: _________________________________
Title:___________________________________
NATIONSBANC LEASING CORPORATION
OF NORTH CAROLINA
By:____________________________________
Name:_________________________________
Title:__________________________________
EXHIBIT D
OFFICER'S CERTIFICATE
OF
FOODBRANDS AMERICA, INC.
Reference is made to the Master Equipment Lease Agreement,
dated as of January ___, 1996 (the "Lease"), by and between
Foodbrands America, Inc., a __________________ corporation (the
"Lessee") and NationsBanc Leasing Corporation of North Carolina,
a North Carolina corporation (the "Lessor"). Capitalized terms
used but not defined herein shall have the meanings assigned to
them in the Lease.
The undersigned,_______________, in [his/her] capacity as
_______________ of the Lessee hereby certifies on behalf of the
Lessee, pursuant to Section 21 of the Lease that:
1. As of the date hereof, no default or event of
default has occurred and is continuing. The Lessee is in
compliance with all of the terms and provisions of the Lease on
its part to be observed or performed, and the conditions set
forth in Section 21 of the Lease have been satisfied.
2. The corporate resolutions, the articles of
incorporation and the bylaws of Lessee are in full force and
effect on the date hereof and have not been amended or modified
since ________________ __, 199_.
3. The representations and warranties made by or with
respect to the Lessee contained in the Lease are true and correct
as if made herein on the date hereof.
4. Since the date of the most recent audited financial
statements of the Lessee delivered to the Lessor, there has been
no material adverse change in the assets or liabilities or in the
financial or other condition of the Lessee.
5. The following individuals are duly elected officers
of Lessee who are authorized by the above resolutions to act on
behalf of Lessee in connection with the transactions contemplated
by the Lease Agreement, and the signatures appearing opposite
their respective names are genuine signatures of such
individuals:
Name Position Signature
President ____________________
Vice President ____________________
Secretary ____________________
Assistant Secretary ____________________
IN WITNESS WHEREOF, I have hereunto set my hand this _____
day of __________, 199_ on behalf of the Lessee.
By:____________________________
Name:__________________________
Title:___________________________
