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EXHIBIT 10.15
MASTER LEASE AGREEMENT
Dated as of October 20, 1995
Between
WACHOVIA LEASING CORPORATION,
as the Lessor,
and
FLOWERS INDUSTRIES, INC.,
as the Lessee
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ADDRESSES OF PARTIES:
Wachovia Leasing Corporation Flowers Industries, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ 200 U.S. ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇ P. O. Box 1338
Winston-Salem, NC 27150 ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ATTENTION: ▇▇▇▇▇▇▇▇ ▇. Head ATTENTION: C. ▇▇▇▇▇▇ ▇▇▇▇, III
THIS LEASE HAS BEEN MANUALLY EXECUTED IN COUNTERPARTS NUMBERED
CONSECUTIVELY FROM 1 TO 2. TO THE EXTENT, IF ANY, THAT THIS LEASE
CONSTITUTES CHATTEL PAPER (AS SUCH TERM IS DEFINED IN THE UNIFORM
COMMERCIAL CODE AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO
SECURITY INTEREST IN THIS LEASE MAY BE CREATED THROUGH THE TRANSFER OR
POSSESSION OF ANY COUNTERPART OF THIS LEASE OTHER THAN COUNTERPART
NUMBER 1.
This is Counterpart Number__________
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TABLE OF CONTENTS
PAGE
Section 1. Certain Defined Terms................................................. 1
Section 2. Lease of Equipment.................................................... 1
Section 3. Payments.............................................................. 2
(a) Interim Rent.................................................. 2
(b) Basic Rent.................................................... 3
(c) Final Rent Payment............................................ 4
(d) Supplemental Rent............................................. 4
(e) Computations.................................................. 5
(f) Absolute Net Lease............................................ 5
Section 4. [ RESERVED ].......................................................... 6
Section 5. Agency Agreement...................................................... 6
Section 6. Title to Remain in the Lessor......................................... 7
Section 7. Maintenance of the Equipment; Operations.............................. 7
Section 8. Modifications......................................................... 9
Section 9. Further Assurances.................................................... 10
Section 10. Compliance with Governmental Requirements and
Insurance Requirements: Related Contracts..................... 10
Section 11. Condition and Use of Equipment; Quiet
Enjoyment............................................................. 10
Section 12. Liens................................................................. 12
Section 13. Permitted Contests.................................................... 13
Section 14. Insurance, etc........................................................ 13
Section 15. Termination; Cancellation; Purchase Option............................ 16
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Section 16. Transfer of Title on Removal of Equipment;
Expenses of Transfer.......................................... 19
Section 17. Events of Default and Remedies........................................ 21
Section 18. Change in the Lessee's Name or Structure.............................. 25
Section 19. Inspection; Right to Enter Premises of the
Lessee........................................................ 25
Section 20. Right to Perform the Lessee's Covenants............................... 25
Section 21. Participation by Co-Lessees or Sublessees;
Participations by Lessor...................................... 26
Section 22. Notices............................................................... 27
Section 23. Amendments and Waivers................................................ 28
Section 24. Severability.......................................................... 28
Section 25. Federal Income Tax Considerations..................................... 28
Section 26. Other Provisions...................................................... 28
Section 27. Yield Protection and Illegality....................................... 30
(a) Basis for Determining Interest Rate
Inadequate or Unfair.......................................... 30
(b) Illegality.................................................... 32
(c) Increased Cost and Reduced Return............................. 32
(d) Payments and Computations..................................... 34
(e) Compensation.................................................. 34
Section 28. Conditions Precedent.................................................. 35
(a) Closing; Conditions Precedent to
Effectiveness of this Lease................................... 35
(b) Conditions to Commencement of Lease for each
Phase......................................................... 36
(c) Conditions to addition of any Equipment in
each Phase.................................................... 36
Section 29. The Lessee's Representations and Warranties........................... 38
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(a) Corporate Existence and Power.................................... 38
(b) Corporate and Governmental Authorization......................... 38
(c) Binding Effect................................................... 39
(d) No Litigation.................................................... 39
(e) Compliance with Laws............................................. 39
(f) Ownership of Property; Liens..................................... 39
(g) No Default....................................................... 39
(h) Full Disclosure.................................................. 39
(i) Capital Stock.................................................... 40
(j) Margin Stock..................................................... 40
(k) Annual Financial Statements...................................... 40
Section 30. Covenants............................................................. 40
(a) Information................................................... 40
(b) Maintenance and Inspection of Property,
Books and Records............................................. 42
(c) Maintenance of Existence...................................... 42
(d) Consolidations, Mergers and Sales of Assets................... 42
(e) Dissolution................................................... 43
(f) Use of Proceeds............................................... 43
(g) Compliance with Laws.......................................... 43
(h) Insurance..................................................... 43
(i) Change in Fiscal Year......................................... 44
(j) Maintenance of Property....................................... 44
(k) Environmental Notices......................................... 44
(l) Environmental Matters......................................... 44
(m) Environmental Release......................................... 44
(n) Transactions with Affiliates.................................. 45
(o) Further Assurances............................................ 45
(p) Liens, Etc.................................................... 45
(q) Negative Pledge............................................... 45
(r) Guarantees.................................................... 47
(s) ERISA......................................................... 47
Section 31. Miscellaneous......................................................... 47
(a) Entire Agreement.............................................. 47
(b) No Personal Liability......................................... 48
(c) Interpretation................................................ 48
(d) Governing Law................................................. 48
(e) No Third Party Beneficiaries.................................. 48
(f) Counterparts.................................................. 48
(g) Waiver of Jury Trial.......................................... 48
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(h) Invalidity.................................................. 48
(i) Usury....................................................... 49
(j) Time of the Essence......................................... 50
(k) Indemnification............................................. 50
SCHEDULE 1(b) Defined Terms............................. 56
SCHEDULE 3(b) Scheduled Amounts......................... 76
SCHEDULE 14 Insurance Requirements.................... 77
EXHIBIT A ACQUISITION, AGENCY, INDEMNITY
AND SUPPORT AGREEMENT..................... 80
EXHIBIT B Certificate of Acceptance................. 102
EXHIBIT C Lease Supplement.......................... 106
EXHIBIT D FORM OF LEGAL OPINION OF
ASSISTANT GENERAL COUNSEL
OF LESSEE................................. 111
EXHIBIT E PROGRESS PAYMENT AGREEMENT................ 115
EXHIBIT F FORM OF APPROVED SUBLEASE................. 118
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This Master Lease Agreement dated as of October 20, 1995, (as the same
may be amended, modified or supplemented from time to time, this "Lease") is
between WACHOVIA LEASING CORPORATION, a North Carolina corporation (together
with its successors and permitted assigns, the "Lessor"), and FLOWERS
INDUSTRIES, INC., a Georgia corporation (together with its successors and
permitted assigns, the "Lessee").
RECITALS
WHEREAS, pursuant to the Agency Agreement, Lessor has agreed
to acquire Equipment for each Phase and
WHEREAS, subject to the terms and conditions of this Lease, the Lessee
desires to lease from the Lessor the Equipment for each Phase, to be located at
the Applicable Site therefor, as described in the Lease Supplements for such
Phase, beginning on the Phase Commencement Date therefor, for the purpose of
occupying and using the Equipment for each Phase at the Applicable Site
therefor in accordance with the terms and conditions set forth in this Lease.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Lessor and the Lessee agree as follows:
Section 1. Certain Defined Terms.
(a) In this lease, the terms "Lease," "Lessee," and
"Lessor," shall have the meanings indicated above.
(b) As used in this Lease, all other capitalized terms
shall have the meanings assigned such terms in Schedule 1(b) attached hereto
and by reference made a part hereof.
Section 2. Lease of Equipment.
(a) During the term of and subject to the terms and
conditions of this Lease, the Lessor hereby leases to the Lessee, and the
Lessee hereby leases from the Lessor, the Equipment for each Phase for the
Lease Term for such Phase to be used (i) as provided in the Agency Agreement
until the Phase Completion Date
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for such Phase and (ii) for and only for a Permitted Use with respect to the
portion of the Lease Term surviving the Phase Completion Date for such Phase.
(b) Unless earlier terminated in accordance with the other
provisions hereof, including without limitation, Sections 15 and 17, this Lease
shall terminate as to each Phase (i) on the Scheduled Lease Termination Date
for such Phase or (ii) on the occurrence of a Non-Completion Event as to such
Phase.
(c) Not less than twelve (12) months prior to the Scheduled
Lease Termination Date for each Phase, the Lessee shall notify the Lessor in
writing which of the options under Section 15(a)(ii) of this Lease the Lessee
intends to exercise for such Phase. In the event the Lessee fails to give
timely written notice to the Lessor on or before the date herein provided for
any Phase, the Lessee shall be deemed to have elected to purchase the Equipment
for such Phase on the Lease Termination Date for such Phase, for the
Termination Value for such Phase. Such election will be consummated upon the
Scheduled Lease Termination Date for such Phase unless the Lessee thereafter
elects to exercise its option under Section 15(c) of this Lease or a
Cancellation Event occurs.
(d) If the Lessor declares a Non-Designated Event of
Default, the Lessee shall give to the Lessor written notice within 2 Business
Days which of the options under Section 15(a)(ii) of this Lease the Lessee
intends to exercise for all Phases upon the Lease Termination Date. In the
event the Lessee fails to give timely written notice to the Lessor on or before
the date herein provided, the Lessee shall be deemed to have elected to
purchase the Equipment for all Phases on the Lease Termination Date for the
Termination Value for all Phases.
Section 3. Payments.
(a) Interim Rent. For each Phase, during the period
commencing on the Phase Commencement Date and ending on the Phase Completion
Date for such Phase, Interim Rent with respect to such Phase shall accrue on
Equipment Cost during each Interim Rental Period at a rate per annum equal to
the LIBO Rate prevailing on the first day of such Interim Rental Period plus 45
basis points; provided, that if there is less than one month remaining after
the end of any Interim Rental Period until the Phase Completion Date for such
Phase, Interim Rent for the final Interim Rental Period
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shall instead be determined on the basis of 80% of the Base Rate. Interim Rent
shall be paid in arrears on the last day of the Interim Rental Period with
respect thereto. In the event any Equipment Cost on which interest accrued
based on the LIBO Rate is prepaid other than on the last day of the Interim
Rental Period with respect thereto (including by reason of the occurrence of a
Lease Termination Date for any reason), the Lessee shall compensate the Lessor
for any funding losses incurred by it as a result of such prepayment. On the
Phase Completion Date for each Phase, all Soft Costs incurred during the period
from the Phase Commencement Date through the Phase Completion Date for such
Phase shall be capitalized and added to Equipment Cost for such Phase;
provided, that in no event shall the aggregate Equipment Cost for all Phases
exceed $50,000,000, and to the extent any such capitalization of Soft Costs
would cause the aggregate Equipment Cost for all Phases to exceed $50,000,000,
the amount of the excess shall be payable to the Lessor on the Phase Completion
Date on which such excess occurs. In the event any Vendor requires any advance
payments, progress payments or full payments prior to the Lease Addition Date
of the Equipment proposed to be added to the Lease for any Phase, the Lessee
shall execute and deliver to the Lessor a Progress Payment Agreement for such
Phase, and the Lessor will make available amounts pursuant thereto for such
purpose. For any Equipment which is the subject of any payments made by the
Lessor under a Progress Payment Agreement for any Phase, unpaid Additional Rent
under such Progress Payment Agreement with respect to such Equipment shall be
capitalized and, together with the amount of such payments made by the Lessor
with respect to such Equipment, shall be added to and constitute part of the
Equipment Cost for such Phase.
(b) Basic Rent.
(i) Floating Rate Payment Without Election; Election
and Election Period. For each Phase, if the Lessee has not made an
Election within the Election Period pursuant to the provisions and
requirements of this Section 3(b)(i), after the Phase Completion Date
for each Phase, the Lessee's Basic Rent during the Lease Term for such
Phase shall be payable for each Rental Period in arrears on the Rent
Payment Date for such Rental Period in an amount equal to the sum of
(A) the amount equal to the percentage set forth in Schedule 3(b) for
such Rental Period (as it may be modified pursuant hereto as a result
of an Approved Appraisal), times the Equipment Cost (the "Scheduled
Amount") as to such Phase (the "Scheduled Payment") plus (B) an amount
accruing on the
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Unrecovered Equipment Cost as to such Phase at the Floating Rate for
such Rental Period (the "Floating Rate Payment"). In the event any
Scheduled Amount or other amount of Equipment Cost based on the LIBO
Rate is prepaid other than on the last day of the Rental Period with
respect thereto (including by reason of the occurrence of a Lease
Termination Date for any reason) the Lessee shall compensate the
Lessor for any funding losses incurred by it as a result of such
prepayment. Schedule 3(b) also sets forth the Estimated Residual as to
each Phase as of the end of each Rental Period. The Lessee agrees that
the Lessor reserves the right to modify the Estimated Residual or the
percentage of Equipment Cost for determining the Scheduled Amount, or
both, as to any Rental Period for the Equipment for any Phase as a
result of the receipt of an Approved Appraisal pursuant to the Agency
Agreement. With respect to any Phase, the Lessee shall have the option
to convert the Basic Rent for such Phase within the Election Period
from a Floating Rate Payment basis to a Fixed Rate Payment basis (any
exercise of such option pursuant to the provisions and requirements of
this Section 3(b)(i) for any Phase being an "Election" for such
Phase). The "Election Period" with respect to each Phase shall
commence on the Phase Completion Date for such Phase and terminate on
the last day of the Acquisition Period. Each Election shall be made by
written notice received not less than 7 days prior to the effective
date of such Election (and not less than 7 days prior to the end of
the relevant Election Period).
(ii) Fixed Rate Payment With Election. For each
Phase, if the Lessee has made an Election within the Election Period
pursuant to the provisions and requirements of Section 3(b)(i), after
the Phase Completion Date for each Phase, the Lessee's Basic Rent
during the Lease Term for such Phase shall be payable for each Rental
Period in arrears on the Rent Payment Date for such Rental Period in
an amount equal to the sum of (A) the Scheduled Payment as to such
Phase for such Rental Period plus (B) an amount accruing on the
Unrecovered Equipment Cost as to such Phase at the Fixed Rate for such
Rental Period (the "Fixed Rate Payment"). On the first Rent Payment
Date after the Lessee makes an Election for a qualifying Phase, the
Lessee shall make, if applicable, a Basic Rent payment consisting of
the Scheduled Payment for such Phase plus a proportionate Floating
Rate Payment and Fixed Rate Payment for such Phase, and the Lessee
shall compensate the Lessor for any funding losses incurred by it as
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a result of such change from a Floating Rate Payment to a Fixed Rate
Payment prior to the end of the Rental Period.
(c) Final Rent Payment. In addition to Interim Rent Basic
Rent and Supplemental Rent, on the Lease Termination Date for each Phase
(whether on the Scheduled Lease Termination Date or due to the occurrence of a
Cancellation Event or a Termination Event or otherwise), the Lessee shall pay
to Lessor the Final Rent Payment for such Phase.
(d) Supplemental Rent. In addition to Interim Rent, Basic
Rent and the Final Rent Payment, the Lessee will also pay to the Lessor, from
time to time, upon demand by the Lessor, as additional rent ("Supplemental
Rent"), the following (but without duplication of any amounts included in the
calculation of Rent):
(i) all out-of-pocket costs and expenses reasonably
incurred by the Lessor in connection with the preparation,
negotiation, execution, delivery, performance and administration of
this Lease and the other Operative Documents, including, but not
limited to, the following: (A) fees and expenses of the Lessor,
including, without limitation, reasonable attorneys' fees and expenses
and the fees and expenses for the Approved Appraisal and the Related
Contracts for each Phase; (B) all other amounts, including, without
limitation, fees, indemnities, expenses, compensation in respect of
increased costs of any kind or description payable under this Lease or
any other Operative Document; (C) all yield maintenance, capital
adequacy and other costs contemplated under Section 27 of this Lease
and (D) all out-of-pocket costs and expenses incurred by the Lessor
after the date of this Lease (including, without limitation,
reasonable attorneys' fees and expenses and other expenses and
disbursements reasonably incurred) associated with (1) negotiating and
entering into, or the giving or withholding of, any future amendments,
supplements, waivers or consents with respect to this Lease; (2) any
Loss Event, Casualty Occurrence or termination of this Lease; and (3)
any Default or Event of Default and the enforcement and preservation
of the rights or remedies of the Lessor under this Lease and the other
Operative Documents and (4) all reasonable costs and expenses incurred
by the Lessor or any of its Affiliates in initially selling
participations in this Lease, including, without limitation, the
related reasonable fees and out-of-pocket expenses of counsel for the
Lessor or its Affiliates, travel expenses, duplication and printing
costs
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and courier and postage fees, and excluding any fees paid to
Participants purchasing such a participation; and
(ii) all other amounts that the Lessee agrees herein
to pay other than Interim Rent, Basic Rent, the Final Rent Payment and
amounts described in clause (i) above.
(e) Computations. All computations of Interim Rent and Basic
Rent shall be made by the Lessor on the basis of a year of 360 days (or, in the
case of computations based on the Prime Rate, 365/366 days), in each case for
the actual number of days (including the first day but excluding the last day)
occurring in the Interim Rental Period or Rental Period for which such Interim
Rent or Basic Rent payments are payable. Whenever any payment hereunder shall
be stated to be due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of payment of interest or yield;
provided, however, that if such extension would cause payment of Interim Rent
or Basic Rent to be made in the next following calendar month, such payment
shall be made on the next preceding Business Day.
(f) Absolute Net Lease. This Lease is an absolute net lease,
and Rent and all other sums payable by the Lessee hereunder shall be paid
without notice except as otherwise expressly provided herein, and the Lessee
shall not be entitled to any abatement, reduction, setoff, counterclaim,
defense or deduction with respect to any Rent or other sums payable hereunder.
The obligations of the Lessee to pay Rent and all other sums payable hereunder
shall not be affected by reason of: (i) any damage to, or destruction of, the
Equipment or any part thereof by any cause whatsoever (including, without
limitation, fire, casualty or act of God or enemy or any other force majeure
event); (ii) any condemnation, including, without limitation, a temporary
condemnation of the Equipment or any portion thereof; (iii) any prohibition,
limitation, restriction or prevention of the Lessee's use, occupancy or
enjoyment of the Equipment or any part thereof by any Person (other than by the
Lessor in violation of this Lease); (iv) any matter affecting title to the
Equipment or any portion thereof (other than a defect in title caused by or
through the Lessor, other than by the Lessee as the agent of the Lessor); (v)
any loss of possession by the Lessee of the Equipment or any portion thereof,
by reason of title paramount or otherwise (other than by the Lessor in
violation of this Lease); (vi) any default by the Lessor hereunder or under any
other Operative Document; (vii) the invalidity or unenforceability of any
provision hereof or the
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impossibility or illegality of performance by the Lessor or the Lessee or both;
(viii) any action of any Governmental Authority; or (ix) any other Loss Event,
Casualty Occurrence or other cause or occurrence whatsoever, whether similar or
dissimilar to the foregoing. The Lessee shall remain obliged under this Lease
in accordance with its terms and shall not take any action to terminate,
rescind or avoid this Lease, except as expressly provided in Section 15
notwithstanding any bankruptcy, insolvency, reorganization, liquidation,
dissolution or other proceeding affecting the Lessor or any action with respect
to this Lease which may be taken by any trustee, receiver or liquidator or by
any court. The Lessee waives all rights to terminate or surrender this Lease,
except as expressly provided in Section 15, or to any abatement or deferment of
Rent or other sums payable hereunder. The Lessee hereby waives any and all
rights now or hereafter conferred by law or otherwise to modify or to avoid
strict compliance with its obligations under this Lease. All payments made to
the Lessor hereunder as required hereby shall be final and irrevocable, and the
Lessee shall not seek to recover any such payment or any part thereof for any
reason whatsoever, absent manifest error.
(g) All payments by the Lessee pursuant to this Lease shall
be made by the Lessee to the Lessor. All such payments required to be made to
the Lessor shall be made not later than 12:00 noon, Atlanta, Georgia time, on
the date due, in immediately available funds, to such account with the Lessor
as it shall specify from time to time by notice to the Lessee. Whenever any
payment to be made shall otherwise be due on a day which is not a Business Day,
except as otherwise expressly provided herein, such payment shall be made on
the next succeeding Business Day and such extension shall be included in
computing Rent, interest, yield and fees, if any, in connection with such
payment.
(h) The Lessee shall pay on demand to the Lessor interest at
the Default Rate on all amounts payable by the Lessee to the Lessor hereunder
or any of the other Operative Documents, from the due date thereof until paid
in full.
Section 4. [ RESERVED ].
Section 5. Agency Agreement. The Lessee is entering into the
Agency Agreement with the Lessor pursuant to which the Lessee will act as the
Acquisition Agent for the Lessor in causing the acquisition and installation of
the Equipment and the performance of all of the Lessor's obligations to acquire
the Equipment,
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including negotiation and performance of all Related Contracts, obtaining all
Applicable Permits and complying with all Governmental Requirements (including
all Environmental Requirements) relating to the Equipment. Upon funding
pursuant to the Agency Agreement, title to all Equipment purchased with such
funding shall be and remain in the Lessor and, commencing with the Phase
Commencement Date for the Phase to which such Equipment relates, such Equipment
shall be subject to the terms and conditions of this Lease. The Equipment and
all components thereof shall be purchased, manufactured, constructed, improved,
renovated, assembled or installed, as applicable, in accordance with Related
Contracts entered into by the Lessee pursuant to the Agency Agreement.
Section 6. Title to Remain in the Lessor. The Lessor shall own
100% of the legal interest in the Equipment, including all accessions to and
replacements of the Equipment added or effected from time to time by the
Lessee, which shall be and become part of the Equipment, Property of the Lessor
and subject to the terms of this Lease; provided that the Lessor's interest in
any portion of the Equipment that is replaced by the Lessee pursuant to and as
permitted by the terms of this Lease shall be deemed released from this Lease
and thereupon become the Property of the Lessee automatically, without further
action by the Lessor, and the Lessor shall perform all acts and execute all
documents that the Lessee reasonably requests to give effect to the foregoing
at the expense of the Lessee, including the execution and delivery of bills of
sale and other documents of transfer. This Lease shall not give or grant to the
Lessee any right, title or interest in or to the Equipment, except the rights
expressly conferred by this Lease. The Equipment will remain personal property
and will not be installed in any manner that will prevent it from being readily
removed in a manner consistent with normal industry practices, it being the
intent of the parties that the Equipment is not to constitute or be deemed to
be fixtures or real property under applicable law or any lease governing the
Applicable Site. The Equipment for each Phase will be marked to disclose the
interest of the Lessor to the extent relevant under applicable law or to the
extent deemed appropriate by the Lessor.
Section 7. Maintenance of the Equipment; Operations.
(a) The Lessee shall, and it shall require and cause any and
all employees, contractors, subcontractors, agents, representatives,
affiliates, consultants and occupants at the
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Lessee's own cost and expense to: (i) cause the Equipment for each Phase to be
maintained in all material respects in good operating order, repair and
condition, in accordance with prudent industry practice and any applicable
manufacturer's or supplier's manuals or warranties, subject to normal wear and
tear, and take all action, and make all changes and repairs, structural and
non-structural, foreseen and unforeseen, ordinary and extraordinary, which are
required pursuant to any Governmental Requirement or Insurance Requirement at
any time in effect to assure full compliance therewith in all material
respects; and (ii) cause the Equipment for each Phase to continue to have at
all times, in all material respects, and in material compliance with all
applicable Governmental Requirements and Insurance Requirements, the capacity
and functional ability to perform, on a continuing basis (subject to normal
interruption in the ordinary course of business for maintenance, inspection,
service, repair and testing) and in commercial operation, the functions for
which it was designed and to be utilized commercially for the Permitted Use.
(b) The Lessee shall, and it shall require and cause any and
all employees, contractors, subcontractors, agents, representatives,
affiliates, consultants and occupants at the Lessee's own cost and expense to,
promptly replace, or cause to be replaced, the Equipment for each Phase or
parts thereof which may from time to time be added to or substituted as
replacements for parts of the Equipment for such Phase and which may from time
to time become worn out, lost, stolen, destroyed, seized, confiscated, damaged
beyond repair, obsolete or permanently rendered unfit for use for any reason
whatsoever. All accessions and replacement parts shall be free and clear of all
Liens other than Permitted Liens, and, except for temporary replacement parts
utilized pending installation of permanent replacement parts, shall be of a
type customarily used in the industry at such time for such purpose, shall be
in as good operating condition as, and shall have a utility and useful life at
least equal to, the parts replaced (assuming such replaced parts were in the
condition and repair required to be maintained by the terms hereof) and shall
have a value at least equal to the parts replaced (assuming such replaced parts
were in the condition and repair required to be maintained by the terms
hereof).
(c) Notwithstanding the provisions of Section 8 and the
foregoing provisions of this Section 7, the Lessee shall not (except as may be
required by any Governmental Requirement) remove, replace or alter any portion
of the Equipment for any
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Phase or affix or place any accessory, equipment, part or device on any portion
of the Equipment if such removal, replacement, alteration or addition would
impair the originally intended function or use of the Equipment for such Phase
so as to materially reduce the value of the Equipment taken as a whole, or
materially decrease the estimated useful life of the Equipment for such Phase.
(d) The Lessor shall not be required in any way to maintain,
repair or rebuild the Equipment for any Phase or any portion thereof and the
Lessee waives any right it may now or hereafter have to make any repairs at the
expense of the Lessor pursuant to any Governmental Requirement at any time in
effect or otherwise.
(e) The Lessee shall, and it shall require and cause any and
all employees, contractors, subcontractors, agents, representatives,
affiliates, consultants and occupants at the Lessee's own cost and expense to:
(i) comply with all applicable Environmental Requirements with regard to the
Equipment for each Phase and all parts thereof, except where the failure to so
comply would not have or cause a Material Adverse Effect; and (ii) use, employ,
process, emit, generate, store, handle, transport, dispose of and/or arrange
for the disposal of, any and all Hazardous Materials in, on or, directly or
indirectly, related to or in connection with the Equipment for each Phase or
any part thereof in a manner consistent with prudent industry practice and in
compliance with any applicable Environmental Requirement, except where the
failure to so comply would not have or cause a Material Adverse Effect. The
Lessor and the Lessee hereby acknowledge and agree that the Lessee's
obligations hereunder with respect to Environmental Requirements are intended
to bind the Lessee with respect to matters and conditions involving the
Equipment for each Phase or any part thereof.
Section 8. Modifications.
(a) Subject to the terms of Section 8(b), the Lessee shall
have the right to make modifications, alterations, renovations or improvements
to the Equipment for any Phase so long as such modifications, alterations,
renovations or improvements do not (except as may be required by any
Governmental Requirement) (i) materially reduce the value of the Equipment for
such Phase as a whole; (ii) materially and adversely affect the capacity and
performance of the Equipment for such Phase on a continuing basis in commercial
operation of
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the function for which the Equipment for such Phase was designed; or (iii)
materially and adversely affect the estimated useful life of the Equipment for
such Phase. Within ten (10) Business Days of the end of each calendar quarter,
an Authorized Officer of the Lessee shall deliver to the Lessor a schedule
certifying to the Lessor's satisfaction: (x) the nature of the repairs,
replacements, modifications, alterations, renovations or improvements to the
Equipment for each Phase made during such quarter having a cost of at least
$25,000 at the time made, and (y) that the Equipment for each Phase continues
to have, in all material respects, the capacity and functional ability to
perform on a continuing basis (subject to normal interruption in the ordinary
course of business for maintenance, inspection, service, repair and testing)
and in commercial operation, the functions for which it was designed or, if
not, specifying the reason for any such deficiency, including, without
limitation, the existence and nature of any Loss Event or Casualty Occurrence
with respect to the such Equipment.
(b) If the Lessee determines that any part of the Equipment
for any Phase is no longer necessary for the performance of the Equipment for
such Phase on a continuing basis in commercial operation of the function for
which the Equipment was designed, then the Lessee (except when such action or
removal may be required by any applicable Governmental Requirement, in which
event, the Lessee shall promptly give the Lessor notice of such action or
removal) shall give the Lessor at least thirty (30) days' notice prior to
taking any action as the result of such determination and shall not remove any
such portion unless and until the Lessor has determined that (i) such portion
is no longer necessary for the performance of the Equipment for such Phase on a
continuing basis in commercial operation of the function for which such
Equipment was designed in all material respects, (ii) removal of such portion
does not materially reduce the value of the Equipment for such Phase as a
whole, and (iii) removal of such portion does not materially decrease the
estimated useful life of the Equipment for such Phase. This Section 8(b) shall
not apply to worn out or obsolete Equipment or damaged Equipment (to the extent
such damage does not constitute a Casualty Occurrence or Loss Event) removed
and replaced by the Lessee in accordance with Section 7(b).
Section 9. Further Assurances. The Lessee, at its expense,
shall execute, acknowledge and deliver from time to time such further
counterparts of this Lease or such affidavits, certificates, certificates of
title, bills of sale, financing and
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continuation statements, consents and other instruments as may be required by
applicable law or reasonably requested by the Lessor in order to evidence the
Lessor's title to the Equipment and the Lessor's interests in this Lease, and
shall, at the Lessee's expense, cause such documents to be recorded, filed or
registered in such places as the Lessor may request and to be re-recorded,
refiled or re-registered in such places as may be required by applicable law or
at such times as may be required by applicable law in order to maintain and
continue in effect the recordation, filing or registration thereof. The Lessor
shall not grant or create any Lien on the Equipment to any Person except
Permitted Liens, Liens in favor of the Lessor and Liens pursuant to this Lease
and the other Operative Documents.
Section 10. Compliance with Governmental Requirements and Insurance
Requirements: Related Contracts. The Lessee, at its expense, will comply with
all Governmental Requirements applicable to the Equipment any portion thereof
or the ownership, installation, operation, mortgaging, possession, use, non-use
or condition of the Equipment or any portion thereof, all Insurance
Requirements, and all instruments, contracts or agreements affecting title to
ownership of the Equipment or any portion thereof, except, in each case, where
the failure to so comply would not have or cause a Material Adverse Effect. In
addition, the Lessee, so long as no Event of Default has occurred and is
continuing, is hereby authorized by the Lessor to, and shall, fully and
promptly keep, observe, perform and satisfy on behalf of the Lessor any and all
obligations, conditions, covenants and restrictions of or on the Lessor or the
Lessee under any and all Related Contracts so that there will be no default
thereunder and so that the other parties thereunder shall be, and remain at all
times, obliged to perform their obligations thereunder, and the Lessee, to the
extent within its control, shall not permit to exist any condition, event or
fact that could allow or serve as a basis or justification for any such Person
to avoid such performance.
Section 11. Condition and Use of Equipment; Quiet Enjoyment.
(a) THE EQUIPMENT IS LEASED AS IS, WHERE IS, AND WITH ALL
FAULTS AND IN THE CONDITION THEREOF AND SUBJECT TO THE STATE OF THE TITLE
THERETO, AND THE RIGHTS OF OWNERSHIP THEREIN, IN EACH CASE AS IN EXISTENCE WHEN
THE SAME FIRST BECOMES SUBJECT TO THIS LEASE, WITHOUT REPRESENTATIONS AND
WARRANTIES OF ANY KIND AS TO TITLE BY THE LESSOR OR ANY PERSON ACTING ON ITS
BEHALF. THE LESSEE ACKNOWLEDGES AND AGREES THAT THE EQUIPMENT HAS NOT BEEN
SELECTED BY THE LESSOR,
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THAT THE LESSOR HAS NOT SUPPLIED ANY SPECIFICATIONS WITH RESPECT TO THE
EQUIPMENT AND THAT THE LESSOR (i) IS NOT A VENDOR OF, OR MERCHANT OR SUPPLIER
WITH RESPECT TO, ANY OF THE EQUIPMENT OR ANY PROPERTY OF SUCH KIND, (ii) HAS
NOT MADE ANY RECOMMENDATION, GIVEN ANY ADVICE OR TAKEN ANY OTHER ACTION WITH
RESPECT TO THE CHOICE OF ANY MANUFACTURER, SUPPLIER OR TRANSPORTER OF, OR ANY
VENDOR OF OR OTHER CONTRACTOR, INCLUDING, WITHOUT LIMITATION, WITH RESPECT TO
ANY OF THE EQUIPMENT, (iii) HAS NOT AT ANY TIME HAD PHYSICAL POSSESSION OF ANY
SUCH EQUIPMENT, (iv) HAS NOT MADE OR IS NOT MAKING ANY WARRANTY, EXPRESS OR
IMPLIED, RELATING TO THE EQUIPMENT, INCLUDING WITHOUT LIMITATION, WITH RESPECT
TO TITLE, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR OTHERWISE, THE
DESIGN, CONDITION, QUALITY OF MATERIAL OR WORKMANSHIP, CONFORMITY TO
SPECIFICATIONS, FREEDOM FROM PATENT OR TRADEMARK INFRINGEMENT, ABSENCE OF ANY
LATENT OR OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE, WHETHER ARISING PURSUANT
TO THE UCC OR ANY OTHER PRESENT OR FUTURE LAW OR OTHERWISE, OR COMPLIANCE WITH
APPLICABLE PERMITS OR OTHER GOVERNMENTAL REQUIREMENTS, OR (v) SHALL NOT BE
LIABLE FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING LIABILITY IN TORT,
STRICT OR OTHERWISE). IN THE EVENT OF ANY DEFECT OR DEFICIENCY OF ANY NATURE IN
THE EQUIPMENT OR ANY PROPERTY OR OTHER ITEM CONSTITUTING A PORTION THEREOF,
WHETHER PATENT OR LATENT, OF THE LESSOR SHALL NOT HAVE ANY RESPONSIBILITY OR
LIABILITY WITH RESPECT THERETO. THE PROVISIONS OF THIS SECTION 11 HAVE BEEN
NEGOTIATED AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY AND
ALL WARRANTIES, EXPRESS OR IMPLIED, BY THE LESSOR WITH RESPECT TO THE EQUIPMENT
OR ANY PROPERTY OR OTHER ITEM CONSTITUTING A PORTION THEREOF, WHETHER ARISING
PURSUANT TO THE UCC OR ANY OTHER LAW NOW OR HEREAFTER IN EFFECT.
(b) The Lessor hereby assigns to the Lessee, until the
Equipment is purchased or sold in accordance with the terms hereof, the
benefits in respect of any Vendor's warranties or undertakings, express or
implied, relating to the Equipment (including any labor, equipment or parts
supplied therewith), and, to the extent assignment of the same is prohibited or
precludes enforcement of any such warranty or undertaking, the Lessor hereby
subrogates the Lessee to its rights in respect thereof. The Lessor hereby
authorizes the Lessee, at the Lessee's expense, to assert any and all claims
and to prosecute any and all suits, actions and proceedings, in its own name or
in the name of the Lessor, in respect of any such warranty or undertaking and,
except during the continuance of an Event of Default, or after the occurrence
of a Cancellation Event or Termination Event hereunder, to retain the proceeds
received, and after the termination of this Lease or after the occurrence and
during the continuation of an Event of Default, or after the occurrence of a
Cancellation Event or Termination Event, to pay the same in the form received
(with any necessary endorsement) to the Lessor.
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(c) The Lessee may use the Equipment for any Phase for the
Permitted Use provided that the value of such Equipment is not materially
diminished by any such use other than as a result of normal wear and tear in
the ordinary course of business. During the term of this Lease, the Lessor
covenants that unless an Event of Default, a Cancellation Event or a
Termination Event has occurred and is continuing, the Lessor will not, and will
not permit any party claiming by, through or under the Lessor to, interfere
with the peaceful and quiet possession and enjoyment of the Equipment by the
Lessee; provided, however, that the Lessor and its successors, assigns,
representatives and agents may, upon reasonable notice to the Lessee, enter
upon and examine the Equipment or any part thereof at reasonable times, subject
to the provisions of Section 19. Any failure by the Lessor to comply with the
foregoing provisions of this Section 11(c) shall not give the Lessee any right
to cancel or terminate this Lease, or to ▇▇▇▇▇, reduce or make reduction from
or offset against any Rent or other sum payable under this Lease or any other
Operative Document, or to fail to perform or observe any other covenant,
agreement or obligation hereunder or thereunder. The Lessee will not do, or
fail to do, or permit or suffer to exist any act or thing, which action or
thing or failure might impair the value, use or usefulness of the Equipment for
any Phase for the Permitted Use in accordance with the design of the Equipment
for such Phase, ordinary wear and tear excepted.
Section 12. Liens.
(a) The Lessor's interest in the Equipment is not subject to
any construction, materialman's or mechanics' lien (other than Permitted Liens)
for any improvements to the Equipment for any Phase or the Applicable Site
thereof undertaken by the Lessee or by agents of the Lessee, whether or not
such improvements are made with the consent of the Lessor.
(b) The Lessee will not directly or indirectly create, or
permit to be created or to remain, and at the Lessee's expense will discharge
within ten (10) days of notice of the filing or assertion thereof, by bond,
deposit or otherwise, any Lien upon the Lease or any of the Equipment except
(i) any Lien being contested as permitted by and in accordance with Section 13,
or (ii) Permitted Liens. The Lessor agrees that the Lessee shall have during
the term of this Lease the exclusive right (so long as no Default has occurred
and is continuing) to grant, create or suffer to exist Permitted Liens in the
ordinary course of business and in accordance with prudent industry practices,
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provided that the fair market value or use of the Equipment for any Phase or
the applicable portion thereof for the Permitted Use is not materially lessened
thereby. The Lessor agrees to execute such documents and take all other actions
as shall be reasonably necessary, and otherwise to cooperate with the Lessee in
connection with the matters described above, provided that all reasonable
out-of-pocket costs and expenses (including, without limitation, reasonable
attorneys' fees and expenses) incurred by the Lessor in connection therewith
shall be borne by the Lessee, and the Lessor shall not be required to execute
any document that would, in the opinion of the Lessor, materially and adversely
affect the value or use of the Equipment for any Phase or any portion thereof
for the Permitted Use or otherwise materially and adversely affect the
transactions contemplated by the Operative Documents or the interests of the
Lessor in the Equipment for any Phase or under the Operative Documents or
otherwise.
(c) The Lessor will not directly or indirectly sell,
transfer or otherwise dispose of, or create, or permit to be created or to
remain, and will discharge, any Lien of any nature whatsoever on, in or with
respect to, its interest in the Equipment arising by or through it or its
actions, except Permitted Liens.
(d) The Lessee will not directly or indirectly sell,
transfer, or otherwise dispose of, or create, or permit to be created or to
remain, and will discharge within ten (10) days of notice of the filing or
assertion thereof, by bond, deposit or otherwise, any Lien of any nature
whatsoever on, in or with respect to, its interest in any of the Equipment
except Permitted Liens.
Section 13. Permitted Contests. Notwithstanding any other provision
of this Lease to the contrary, after prior written notice to the Lessor and
provided there is no material risk of sale, forfeiture or loss of the Equipment
for any Phase or any material part thereof, the Lessee may at its expense
contest any Imposition which it is required to pay hereunder, by appropriate
proceedings conducted in good faith and with due diligence, so long as such
proceedings are effective to prevent the collection of such Imposition from the
Lessor or against the Equipment for any Phase or any portion thereof; provided,
however, that the actions of the Lessee, as authorized by this Section 13,
shall be subject to the express written consent of the Lessor if such actions
would subject the Lessor or the Equipment for any Phase or any portion thereof
to any liability
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or loss not indemnified in full by the Lessee hereunder or any sanction,
criminal or otherwise, for failure to pay any such Imposition. The Lessee will
pay, and save the Lessor harmless against, all losses, Judgments and reasonable
costs, including attorneys' fees and expenses, in connection with any such
contest and will, promptly after the final determination of such contest, pay
and discharge the amounts which shall be imposed or determined to be payable
therein, together with all penalties, costs and expenses incurred in connection
therewith. The Lessee shall prevent any foreclosure, judicial sale, taking,
loss or forfeiture of the Equipment for any Phase or any portion thereof, or
any interference with or deductions from any Rent or any other sum required to
be paid by the Lessee hereunder by reason of such nonpayment or nondischarge of
an Imposition. The Lessor shall cooperate with the Lessee in any contest and
shall allow the Lessee to conduct such contest (in the name of the Lessor, if
necessary) at the Lessee's sole cost and expense. The Lessee shall notify the
Lessor of each such proceeding within ten (10) days after the commencement
thereof, which notice shall describe such proceeding in reasonable detail.
Section 14. Insurance, etc.
(a) The Lessee will, at its own expense, purchase and
maintain, or cause to be purchased and maintained, throughout the term of this
Lease insurance with respect to its business and the Equipment in accordance
with the requirements of Schedule 14.
(b) The Lessee shall bear all risk of loss (including any
Loss Event or Casualty Occurrence) with respect to the Equipment for each
Phase, whether by casualty, theft, taking, confiscation or otherwise, with
respect to the Equipment for each Phase or any portion thereof, at all times
during the term of this Lease until possession of the Equipment has been
accepted by the Lessor pursuant to Section 17.
(c) So long as no Termination Event or Cancellation Event
shall have occurred and no Event of Default shall have occurred and be
continuing, any payments, whether constituting insurance proceeds, amounts paid
by any Governmental Authority or otherwise, received by the Lessee or the
Lessor upon the occurrence of any loss with respect to the Equipment for each
Phase or portion thereof (other than a Casualty Occurrence), whether as a
result of casualty, theft, taking or other confiscation, shall be applied in
payment for necessary repairs and replacement to the Equipment for such Phase
in accordance
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with Section 7 or, to the extent the costs of such repairs and replacement
shall have been paid by the Lessee, to reimburse the Lessee. The Lessee shall
be entitled to retain any excess funds remaining after necessary repairs and
replacements have been completed and all costs therefor paid in full. Upon the
occurrence of any Termination Event or Cancellation Event or upon the
occurrence and during the continuance of any Event of Default, the Lessor shall
be entitled to receive and retain any such payments for application to the
obligations of the Lessee hereunder.
(d) Upon a Casualty Occurrence with respect to any Phase,
the Lessee shall give prompt notice thereof to the Lessor and shall within
thirty (30) days of the date of such Casualty Occurrence either (i) offer to
purchase the whole of the Equipment for such Phase for the Termination Value
for such Phase as provided in Section 15(c) or (ii) provide the Lessor with a
replacement plan acceptable to the Lessor setting forth how the Lessee shall
replace, or cause to be replaced, at the Lessee's own cost and expense, within
six (6) months (but in no event later than the Scheduled Lease Termination Date
for such Phase) after the date of such Casualty Occurrence, such portion of the
Equipment for such Phase that is the subject of a Casualty Occurrence in
accordance with this Section 14(d) and Section 7. If the Lessee chooses the
option set forth in clause (ii) of the preceding sentence, within the later to
occur of (x) sixty (60) days after the date of the Casualty Occurrence and (y)
satisfaction of all applicable Governmental Requirements, and obtaining all
authorizations of Governmental Authorities, required therefor (but in no event
later than ninety (90) days after the date of the Casualty Occurrence), the
Lessee shall have commenced repairs or replacements as specified in the
replacement plan. After completion of the repairs and replacements, the Lessee
shall demonstrate to the satisfaction of the Lessor that operations, capacity
and production of the Equipment for such Phase have been restored to the
standards required for Completion.
(e) All replacement Equipment (other than temporary
replacement parts and equipment installed pending installation of permanent
replacement Equipment) installed pursuant to Section 14(d) shall be free and
clear of all Liens except Permitted Liens, and shall be in as good operating
condition as, and shall have a value and utility at least equal to, the
Equipment replaced immediately prior to the Casualty Occurrence to which such
Equipment was subject. For purposes of this Lease
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(including without limitation Section 14(d) and Section 7), the Funded Amount
and Book Value of the replacement Equipment shall be deemed to equal the Funded
Amount and Book Value of the part(s) replaced thereby. All Equipment for any
Phase at any time removed from this Lease pursuant to Section 14(d) and Section
7 shall remain the property of the Lessor, no matter where located, until such
time as insurance proceeds have been received by the Lessor at least equal to
the Book Value of such portion of the Equipment for such Phase or such portion
shall be replaced by suitable items that have been incorporated or installed on
or attached to the Equipment and that meet the requirements specified above.
Immediately upon any permanent replacement Equipment becoming incorporated or
installed on or attached to the Equipment for any Phase as provided above,
without further act, such permanent replacements shall become subject to this
Lease and be deemed part of the Equipment for such Phase for all purposes
hereof to the same extent as any other parts of the Equipment for such Phase.
All amounts of insurance proceeds for Equipment losses and all other proceeds
(whether resulting from damage or destruction or from condemnation,
confiscation or seizure) relating to the Equipment for any Phase shall be
deposited into the Restoration Account for such Phase and held and released,
together with accrued interest thereon, as hereinafter provided. So long as a
Cancellation Event or Termination Event shall not have occurred and an Event of
Default shall not have occurred and be continuing, and provided that the Lessor
shall have received a written application of the Lessee accompanied by a
certificate of an Authorized Officer of the Lessee showing in reasonable detail
the nature of any necessary repair, rebuilding and restoration, the actual cash
expenditures necessary for such repair, rebuilding and restoration, the
expected total expenditures required to complete such work and evidence that
sufficient funds are or will be available to complete such work on a timely
basis (such certificate to be acceptable to the Lessor in all respects), then
the amounts available in such Restoration Account, together with accrued
interest thereon, shall be released by the Lessor immediately upon receipt of
such certification or, if applicable, from time to time on the last Business
Day of each month during the period of repair, rebuilding and restoration in
payment therefor against presentation to the Lessor of a certificate executed
by an Authorized Officer of the Lessee to the effect that expenditures have
been made, or costs incurred, by or for the account of the Lessee or are
reasonably anticipated to be made during the immediately following one month
period in a specified amount for the purposes of making repairs, rebuilding
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and restoration in the amounts specified, that no Event of Default,
Cancellation Event or Termination Event exists and all conditions precedent
herein provided relating to such withdrawal and payment have been satisfied.
Upon the occurrence of any Event of Default, Termination Event or Cancellation
Event, the Lessor shall be entitled to retain all amounts in the Restoration
Account for each Phase for application to the obligations of the Lessee
hereunder.
(f) If any Loss Event or Casualty Occurrence shall occur,
the Lessee shall promptly notify the Lessor of such event in writing.
Section 15. Termination; Cancellation; Purchase Option.
(a) (i) The termination of this Lease (A) in accordance
with Section 2(b) as to a particular Phase or (B) as a result of the
declaration by the Lessor of a Non- Designated Event of Default, shall
be a "Termination Event," the effect of which shall be to cause this
Lease to terminate (x) if in accordance with Section 2(b), as to the
relevant Phase, and (y) if as a result of the declaration by the
Lessor of a Non-Designated Event of Default, as to all Phases, in each
case on the applicable Lease Termination Date.
(ii) If a Termination Event occurs, the Lessee, on
the Lease Termination Date, shall, in accordance with the terms of
Section 2(c) or (d), as applicable, without further notice or demand
to the Lessee, either
(A) purchase the Equipment for the relevant
Phase or for all Phases, as applicable, from the Lessor for
the Termination Value thereof; or
(B) so long as no Designated Event of Default has
occurred:
(1) pay to the Lessor the Final Rent Payment
for the relevant Phase or for all Phases, as applicable;
and
(2) attempt to sell (until such time as the
Lessor shall have terminated, in accordance with the
Agency Agreement, the Lessee's obligation to so attempt
to sell the Equipment) subject to
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the Lessor's prior written approval, the Equipment
for the relevant Phase or all Phases, as applicable,
as agent for the Lessor, without recourse or
warranty by the Lessor, and upon any such sale, pay
the net cash proceeds of such sale to the Lessor;
provided, that so long as Lessee has paid the Final
Rent Payment pursuant to Section 15(a)(ii)(B)(1),
then if the net cash proceeds of such sale for the
relevant Equipment are (x) less than the
Non-Recourse Amount for such Equipment, the Lessee
shall not be liable for any deficiency, or (y)
greater than the Non-Recourse Amount for such
Equipment, the Lessor shall remit the excess to the
Lessee. The Lessor shall also have the right (but
not the obligation) to sell the Equipment and/or
solicit bids, each in its sole and absolute
discretion.
(b) (i) Each of the following events shall be a
"Cancellation Event", the effect of which shall be to cause this Lease
to be terminated as to the relevant Phase or as to all Phases, as
specified below, in accordance with the following provisions on the
"Cancellation Date" specified:
(A) the existence of a Designated Event of
Default and the delivery by the Lessor to the Lessee of a
notice stating that the Lessor elects to terminate this Lease
by reason of the existence of such Designated Event of
Default, in which case the Cancellation Date will be the
fifth (5th) Business Day after the date of delivery of said
notice to the Lessee; or
(B) the occurrence of a Loss Event with respect
to any Phase, in which case the Cancellation Date for such
Phase shall be the fifth (5th) Business Day after such event
occurs; or
(C) the occurrence of a Casualty Occurrence in
respect of the Equipment for any Phase and the failure of the
Lessee to purchase the Equipment for such Phase or to replace
or repair the Equipment for such Phase or such portion
thereof in accordance with, and within the time required by,
Section 14 and the delivery by the Lessor to the Lessee of a
notice after the expiration of such time stating that the
Lessor
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elects to terminate this Lease for all Phases by reason of
the existence of such Casualty Occurrence, in which case the
Cancellation Date for all Phases shall be the fifth (5th)
Business Day after the date of delivery of said notice; or
(ii) If a Cancellation Event occurs, the Lessee, on
the Cancellation Date, shall, without further notice or demand to the
Lessee purchase the Equipment for the relevant Phase or for all
Phases, as the case may be, from the Lessor for the Termination Value
for the relevant Phase or for all Phases, as the case may be.
(c) The Lessee may, from time to time and at any time
following the third (3rd) anniversary of the Phase Commencement Date for any
Phase, deliver to the Lessor notice of its intent to terminate this Lease as to
such Phase, in which case the Lessee shall purchase the Equipment for such
Phase from the Lessor for the Termination Value for such Phase on any Business
Day that is not less than thirty (30) nor more than sixty (60) days after such
notice (the "Option Date"). Upon payment in full of the Termination Value for
such Phase, this Lease shall terminate as to such Phase.
(d) This Lease as to any Phase shall cease and terminate on
the Lease Termination Date for such Phase (or for all Phases, as applicable)
except with respect to (i) obligations and liabilities of the Lessee, actual or
contingent, which arose under this Lease, or by reason of events or
circumstances occurring or existing, on or prior to its termination, and which
have not been satisfied (which obligations shall continue until satisfied and
which include, but are not limited to, obligations for Rent accruing prior to
the Lease Termination Date, the Final Rent Payment, and the Termination Value
and amounts owing pursuant to Section 16 for all Phases), and (ii) obligations
of the Lessee which by the terms of this Lease expressly survive termination.
Promptly after either the Lessee or the Lessor shall learn of the happening of
any Termination Event or Cancellation Event as to any Phase, such party shall
give notice thereof to the other party hereto.
(e) In the event the Lessee elects to purchase the
Equipment for any Phase (or for all Phases, as applicable) upon the occurrence
of a Termination Event (other than the expiration of this Lease on a Scheduled
Lease Termination Date for such Phase) or a Cancellation Event therefor, the
Lessee in its sole
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discretion in order to ensure the orderly conveyance of the relevant Equipment
may postpone the closing date for such conveyance (whether or not extended, the
"Purchase Closing Date") to a reasonable date within sixty (60) days following
the Lease Termination Date; provided however, that notwithstanding any such
postponement the Lessee shall nonetheless be required to deposit on or before
the Lease Termination Date, the Termination Value for such Phase (or for all
Phases, as applicable) (estimated at the time of the deposit) with the Lessor
to be held in escrow pending consummation of the closing on or before the
extended Purchase Closing Date. The Lessee shall notify the Lessor of any such
postponement and the proposed extended Purchase Closing Date in writing on or
before the Lease Termination Date. Provided that the Lessee deposits the
estimated Termination Value on or before the applicable Lease Termination Date,
the Lessee shall be deemed to have been granted a temporary license by Lessor
entitling the Lessee to retain possession of the relevant Equipment through the
Purchase Closing Date, at no additional charge, provided that the Lessee
complies with all obligations of the Lessee under this Lease with respect
thereto as though this Lease were still in full force and effect (including
without limitation, compliance with permitted use, maintenance and insurance
coverage requirements, but excluding Basic Rent). In the event of an extension
of the Purchase Closing Date as herein contemplated, the Termination Value
(including the Final Rent Payment component thereof) will be calculated as of
such extended Purchase Closing Date. This Section 15(e) shall survive the
termination of this Lease as to any such Phase.
Section 16. Transfer of Title on Removal of Equipment;
Expenses of Transfer.
(a) Upon any sale or purchase of the Equipment for any Phase
permitted by Section 15, the Lessor will transfer to the Lessee or the
appropriate Third Party all of its title to and legal and beneficial ownership
interest in such Equipment to be transferred (i) free and clear of any Lien
created by, through or under the Lessor other than Permitted Liens (except any
created solely by or through the Lessor, other than by the Lessee as agent of
the Lessor) or Liens created at the request of or as a result of the actions of
the Lessee or anyone acting by, through or under the Lessee, or a result of the
failure of the Lessee to carry out any of its obligations under this Lease or
the other Operative Documents, and (ii) without recourse, representation or
warranty of any nature whatsoever (except as to the absence of such Liens as
aforesaid).
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(b) Whenever the Lessee has the right to purchase or
transfer to itself any of the Equipment pursuant to any provision of this
Lease, the Lessee may cause such purchase to be effected by, or such transfer
to be effected to, any other Person specified by the Lessee, but in no event
shall the Lessee be relieved from any of its obligations hereunder as a result
thereof.
(c) Upon any sale or transfer of any of the Equipment
pursuant to any provision of this Lease, the Lessee shall pay the expenses of
the Lessor, including, without limitation, reasonable attorneys' fees and
expenses, in connection with such sale or transfer.
(d) If, with respect to any Phase (or all Phases, if
applicable) on the Lease Termination Date, the Lessee or any of its Affiliates
has not elected to acquire the relevant Equipment, the Lessee shall surrender
the relevant Equipment to the Lessor free from all Liens except Permitted Liens
(other than those described in clause (ii)(b) of the definition of Permitted
Liens), in the same operating condition (except for ordinary wear and tear)
with the remaining original estimated useful life intact and having in all
material respects the same capacity and efficiency as such Equipment had on the
Lease Commencement Date with respect thereto, and in compliance in all material
respects with all Governmental Requirements and Insurance Requirements. To
evidence the foregoing and accomplish the surrender of such Equipment for any
Phase, the Lessee shall provide the following items (x) in the event of a
Termination Event under Section 15(a)(i)(A) within nine (9) months prior to the
then current Lease Termination Date for such Phase, with final confirmation of
the same at least thirty (30) days but not more than sixty (60) days prior
thereto and (y) in the event of a Termination Event under Section 15(a)(i)(B),
as soon as practicable but in any event at least three (3) Business Days prior
to the Lease Termination Date or Cancellation Date for such Phase, applicable:
(i) evidence satisfactory to the Lessor that all Applicable
Permits, Related Contracts, patents, trademarks and copyrights, and
all other rights and services and Property reasonably required to
operate the Equipment for such Phase from and after the Lease
Termination Date have been, or on or prior to the Lease Termination
Date therefor shall be, transferred to the Lessor (or the Lessor has
been, or on or prior to the Lease Termination Date or Cancellation
Date therefor, as applicable, shall be, given the right to
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use each such item) and can be transferred to (or used by) any
successor or assignee of the Lessor without further consent or
approval by any Person (subject only to normal Governmental
Requirements);
(ii) conveyancing, assignment, transfer, termination and
other documents that, in the sole discretion of the Lessor, are
sufficient to (A) vest in the Lessor good and marketable title to the
Equipment for such Phase, free and clear of all Liens except Permitted
Liens (other than those described in clause (ii)(b) of the definition
of Permitted Liens) and (B) terminate the rights of the Lessee and all
other Persons claiming through the Lessee in and to the Equipment;
(iii) evidence satisfactory to the Lessor that the Equipment
for such Phase has been operated and maintained in all material
respects in accordance with the requirements of the Operative
Documents, all Governmental Requirements, all Applicable Permits and
prudent industry practices;
(iv) evidence satisfactory to the Lessor that the Equipment
for such Phase is being used solely for the Permitted Use, meets or
exceeds the original design specifications and is capable of operating
and being used for the Permitted Use, and has the remaining original
estimated useful life contemplated by the Lessee;
(v) evidence satisfactory to the Lessor, in its sole
discretion, that (A) no default exists under the Agency Agreement, (B)
all agreements and arrangements to provide the services and rights
contemplated by the Agency Agreement are in place, executed by the
parties thereto, and are valid, enforceable and in full force and
effect on or before the Lease Termination Date or Cancellation Date
for such Phase, as applicable and (C) such agreements and arrangements
adequately provide for the services and other rights contemplated by
the Agency Agreement; and
(vi) such other documents, instruments and other items as the
Lessor may reasonably request to evidence to the satisfaction of the
Lessor, in its sole discretion) that no Designated Event of Default,
Loss Event or Casualty Occurrence then exists.
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To the extent the Equipment for any Phase is not in the condition
required by this Section 16(d), the Lessee will pay to the Lessor such
additional amounts as are reasonably required to place it in
compliance. The Lessee shall also pay all costs and expenses relating
to the surrender and clean-up in connection with the surrender of the
Equipment for such Phase as may be required by Governmental
Requirements or Insurance Requirements or which are otherwise
necessary to consummate the delivery of possession of the Equipment
for such Phase to the Lessor hereunder.
Section 17. Events of Default and Remedies.
(a) Each of the following acts or occurrences shall
constitute an "Event of Default" hereunder:
(i) default in the payment of the Termination Value for any
Phase on the relevant Option Date, or in the payment of the
Termination Value for any Phase on the relevant Cancellation Date or
Purchase Closing Date, as applicable, or in the payment of the
Termination Value or the Final Rent Payment for any Phase on the
relevant Lease Termination Date or Purchase Closing Date, as
applicable or in the payment when due of the Scheduled Payment
component of Basic Rent for any Phase; or in the payment when due of
any Interim Rent or the Floating Rate Payment or Fixed Rate Payment
component of Basic Rent for any Phase, and the continuance of such
default for 10 days thereafter; or the default in the payment when due
of any Supplemental Rent for any Phase, or the amount of any
Indemnified Risk or of any other amount due hereunder or under any
other Operative Document and the continuance of such default for
thirty (30) days thereafter; or
(ii) the Lessee shall fail to observe or perform any covenant
contained in Sections 30(a)(vi) or (vii), 30(b)(ii), 30(c) through
30(f), inclusive, and 30(o) through 30(u), inclusive; or
(iii) the Lessee shall fail to observe or perform any
covenant or agreement contained or incorporated by reference in this
Lease (other than those covered by any other paragraph of this Section
17(a)) and such failure shall not have been cured within thirty (30)
days after the earlier to occur of (i) written notice thereof has been
given to the
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Lessee by the Lessor or (ii) any officer of the Lessee otherwise
becomes aware of any such failure; or
(iv) any representation or warranty made or deemed made by
the Lessee herein, in any other Operative Document by the Lessee or
otherwise in writing in connection with or pursuant to this Lease or
any other Operative Document, shall be false or misleading in any
material respect on the date made or deemed made; or
(v) an event of default under the Agency Agreement, and
such failure shall not have been cured within thirty (30) days after
the earlier to occur of (i) written notice thereof has been given to
the Lessee by the Lessor or (ii) any officer of the Lessee otherwise
becomes aware of any such failure; or
(vi) (A) the Lessee shall (1) generally not pay its debts as
such debts become due; or (2) make a general assignment for the
benefit of creditors; or (B) any case or proceeding shall be
instituted or consented to by the Lessee seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or
composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver,
trustee, or other similar official for it or for any substantial part
of its property; or (C) any such case or proceeding shall have been
instituted against the Lessee and either such case or proceeding shall
not be stayed or dismissed for 60 consecutive days or any of the
actions sought in such case or proceeding (including, without
limitation, the entry of an order for relief against it or the
appointment of a receiver, trustee, custodian or other similar
official for it or any substantial part of its property) shall occur;
or
(vii) the Lessee permits a judgment in the amount of
$1,000,000 or more to be obtained against it which is not promptly
paid or promptly appealed and stayed pending appeal; or
(viii) the Lessee breaches or defaults under the Existing
Term Loan Agreement or any Qualified Replacement Term Loan Agreement
or any other agreement involving the
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borrowing of money or the extension of credit (other than trade credit
incurred in the ordinary course of business) under which the Lessee
may be obligated as a borrower or guarantor, if such default consists
of the failure to pay any indebtedness in the aggregate principal
amount of $5,000,000 or more when due or if such default permits or
causes (or upon lapse of time or notice or both would permit or cause)
the acceleration of any indebtedness, or the termination of any
commitment to lend, in either case in the aggregate principal amount
of $5,000,000 or more; provided, however, that if the Existing Term
Loan Agreement is terminated and there is no Qualified Replacement
Term Loan Agreement, the occurrence of any event which would have been
a breach or default under the Existing Term Loan Agreement as in
effect immediately prior to its termination which, but for such
termination, would have permitted or caused (or upon lapse of time or
notice or both would have permitted or caused) the acceleration of any
indebtedness thereunder, shall constitute an Event of Default; or
(ix) in any 12 month period or less, (i) 50% or more of the
members of the full Board of Directors of the Lessee shall have
resigned or been removed or replaced, or (ii) any Person or "Group"
(as defined in Section 2(d)(3) of the Securities Exchange Act of 1934,
as amended) (other than an employee benefit or stock ownership plan of
the Borrower) shall have acquired, directly or indirectly, more than
50% of the capital stock (whether common or preferred or a combination
thereof) of the Lessee, provided that the Lessee's purchase of
treasury shares of shares of its capital stock outstanding on the date
hereof which results in one or more of the Lessee's shareholders of
record as of the date of this Lease owning 50% or more of the Lessee's
capital stock shall not constitute an acquisition for purposes of this
Section 17(a)(xi).
(b) Upon the occurrence and during the continuance of any
Event of Default, the Lessor may do any one or more of the following (without
prejudice to the obligations of the Lessee under Section 15(b)(ii)):
(i) proceed by appropriate judicial proceedings, either at
law, in equity or in bankruptcy, to enforce performance or observance
by the Lessee of the applicable provisions of this Lease, or to
recover damages for the breach of any such provisions, or any other
equitable or
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legal remedy, all as the Lessor shall deem necessary or advisable;
and/or
(ii) by notice to the Lessee, terminate this Lease for all
Phases in accordance with Section 15, whereupon the Lessee's interest
and all rights of the Lessee to the use of the Equipment for any Phase
shall forthwith terminate subject to the Lessee's rights under such
Section 15 to acquire such Equipment on the Purchase Closing Date as
provided herein, but the Lessee shall remain liable with respect to
its obligations and liabilities hereunder; and/or
(iii) exercise any and all other remedies available under
applicable law or at equity.
(c) After the occurrence and during the continuance of a
Cancellation Event or Termination Event, in the event the Lessor elects not to
terminate this Lease and the Lessee has not exercised its option under Section
15(c), this Lease shall continue in effect and the Lessor may enforce all of
the Lessor's rights and remedies under this Lease, including, without
limitation, the right to recover the Interim Rent, the Basic Rent and the
Supplemental Rent for each Phase, and all other yield protection payments and
other amounts with respect thereto, as it becomes due under this Lease. For the
purposes hereof, the following do not constitute a cancellation or termination
of this Lease as to any Phase: (i) acts of maintenance or preservation of the
Equipment for such Phase or any portion thereof, (ii) efforts by the Lessor to
relet the Equipment for such Phase or any portion thereof, including, without
limitation, termination of any sublease of the Equipment for such Phase and
removal of any tenant from the Applicable Site thereof, (iii) or the
appointment of a receiver upon the initiative of the Lessor to protect the
Lessor's interest under this Lease.
(d) If (i) on the Lease Termination Date or the Purchase
Closing Date, as the case may be, for any Phase, the Equipment for such Phase
is not acquired by the Lessee or its designee by payment of the Termination
Value thereof or (ii) on the Cancellation Date or Option Date for any Phase,
the Lessee or its designee has defaulted in its obligation to acquire the
Equipment for such Phase and pay the Termination Value for such Phase in
accordance with the Lessee's election under Section 15(b)(ii), then the Lessor
shall have the immediate right of possession of the Equipment for all Phases
and the right to enter onto any Applicable Sites, and remove the relevant
Equipment
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therefrom if it so elects, and the Lessor may thenceforth hold, possess and
enjoy such Equipment, free from any rights of the Lessee and any Person
claiming by, through or under the Lessee, except as required by applicable law.
The Lessor shall be under no liability by reason of any such repossession or
entry onto the premises of the Lessee.
(e) Should the Lessor elect to repossess the Equipment for
any Phase or any portion thereof upon cancellation or termination of this Lease
as to such Equipment or otherwise in the exercise of the Lessor's remedies, the
Lessee shall peaceably quit and surrender the Equipment for such Phase or any
such portion thereof to the Lessor and either (i) deliver possession of such
Equipment to the Lessor or (ii) allow Lessor or its agents or assigns to enter
onto the Applicable Site thereof to remove any and all of such Equipment at the
expense of the Lessee, and neither the Lessee nor any Person claiming through
or under the Lessee shall thereafter be entitled to possession or to remain in
possession of such Equipment or any portion thereof but shall forthwith
peaceably quit and surrender such Equipment to the Lessor.
(f) At any time after the repossession of the Equipment for
any Phase or any portion thereof, whether or not this Lease shall have been
cancelled or terminated as to such Equipment, the Lessor may (but shall be
under no obligation to) relet such Equipment or the applicable portion thereof
on not less than 10 days notice to the Lessee, for such term or terms and on
such conditions and for such usage as the Lessor in its sole and absolute
discretion may determine. The Lessor may collect and receive any rents payable
by reason of such reletting (subject to the provisions of Section 26(d)), and
the Lessor shall not be liable for any failure to relet the Equipment or for
any failure to collect any rent due upon any such reletting.
(g) The remedies herein provided in case of an Event of
Default are in addition to, and without prejudice to, the Lessee's continuing
obligations under Section 15(b)(ii), and shall not be deemed to be exclusive,
but shall be cumulative and shall be in addition to all other remedies existing
at law, in equity or in bankruptcy. Lessor may exercise any remedy without
waiving its right to exercise any other remedy hereunder or existing at law, in
equity or in bankruptcy.
(h) No waiver by the Lessor hereunder of any Default or
Event of Default shall constitute a waiver of any other or
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subsequent Default or Event of Default. To the extent permitted by applicable
law, the Lessee waives any right it may have at any time to require the Lessor
to mitigate the Lessor's damages upon the occurrence of a Default or Event of
Default by taking any action or exercising any remedy that may be available to
the Lessor, the exercise of remedies hereunder being at the discretion of the
Lessor.
Section 18. Change in the Lessee's Name or Structure. The Lessee
will not change its name, identity or corporate structure (including, without
limitation, by any merger, consolidation or sale of substantially all of its
assets) without notifying Lessor of such change in writing at least thirty (30)
days prior to the effective date of such change.
Section 19. Inspection; Right to Enter Premises of the Lessee. The
Lessor or its authorized representatives may (but without any obligation to do
so) (i) enter upon any Applicable Site or any premises of the Lessee at
reasonable times upon reasonable advance notice in order to inspect the
Equipment located thereon (subject to compliance with applicable safety
requirements of the Lessee and applicable Governmental Requirements) and to
inspect, audit and make copies of all documents and instruments in the
possession of the Lessee (including without limitation records relating to
Equipment Cost and Book Value of any of the Equipment) relating to any of the
Equipment that are reasonably necessary or appropriate for the Lessor or such
authorized representatives to determine the truth and accuracy of any schedule,
annex, exhibit or representation delivered or made hereunder or under any other
Operative Document, or compliance by the Lessee with any of the agreements
contained herein or in any other Operative Document, and (ii) discuss the
condition, compliance with Governmental Requirements, and performance of the
Equipment and the business of the Lessee with the Authorized Officers of the
Lessee.
Section 20. Right to Perform the Lessee's Covenants. Subject to
Section 13, if the Lessee shall fail to make any payment or perform any act
required to be made or performed by it hereunder, the Lessor, upon notice to or
demand upon the Lessee but without waiving or releasing any obligation or
Default or Event of Default, may (but shall be under no obligation to) at any
time thereafter make such payment or perform such act for the account and at
the expense of the Lessee as, at the Lessor's sole discretion, may be necessary
or appropriate therefor and, upon the occurrence and during the continuance of
a Cancellation Event
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or Termination Event with respect to any Phase, may enter upon the Applicable
Site thereof for such purpose and take all such action thereon as, at the
Lessor's sole discretion, may be necessary or appropriate therefor. No such
entry shall be deemed a repossession by the Lessor. All sums so paid by the
Lessor and all costs and expenses (including, without limitation, reasonable
attorneys' fees and expenses so incurred) shall be paid by the Lessee to the
Lessor on demand as Supplemental Rent.
Section 21. Participation by Co-Lessees or Sublessees;
Participations by Lessor.
(a) Except as otherwise permitted in this Section 21, the
Lessee may not assign its rights or obligations under this Lease without the
prior consent of the Lessor.
(b) The Lessee may, so long as no Default, Event of Default,
Cancellation Event or Termination Event shall have occurred and be continuing,
enter into documentation assigning all or any part of this Lease and, as
necessary, the other Operative Documents, to another Person, so long as (i)
such documentation evidences the undertaking of such Person (a "Co-Lessee") to
be responsible for all or certain obligations of the Lessee and, if approval of
the Lessor is granted as contemplated in clause (iii) below, the attendant
reduction in the obligations of the Lessee hereunder, (ii) such documentation
expressly states that such assignment is subject and subordinate to the terms
of this Lease and the Liens created hereby and (iii) unless the Lessor has
granted its prior written approval, acting in its sole discretion, of such
assignment to said Co-Lessee and such documentation (it being understood that
the Lessor may for any reason whatsoever elect not to grant such approval), the
Lessee shall remain primarily liable for all obligations of the tenant of all
of the Equipment under this Lease. The Lessee will furnish promptly to the
Lessor copies of all such documentation entered into by the Lessee from time to
time. Any assignment made otherwise than as expressly permitted by this Section
21(b) shall be null and void and of no force and effect.
(c) The Lessee may, from time to time, (i) pursuant to a
sublease in substantially the form of Exhibit F, which hereby is approved by
the Lessee, and subject to the terms and conditions contained therein, or (ii)
otherwise so long as no Default, Event of Default, Cancellation Event or
Termination Event shall have occurred and be continuing, enter into a sublease
as to any Phase and such other documentation as may be
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necessary with one or more Persons (each a "Sublessee"). In any event, any
documentation executed by the Lessee in connection with the subletting of any
of the Equipment (A) shall expressly state that such sublease is subject and
subordinate to the terms of this Lease and the Liens created hereby and (B)
shall not provide for a sublease term ending after the then current Scheduled
Lease Termination Date for such Phase. The Lessee will furnish promptly to the
Lessor copies of all subleases and related documentation entered into by the
Lessee from time to time. No sublease permitted by the terms hereof will reduce
in any respect the obligations of the Lessee hereunder, it being the intent of
the Lessee and the Lessor that the Lessee be and remain directly and primarily
liable as a principal for its obligations hereunder. Any sublease not complying
with clauses (A) and (B) above shall be null and void and of no force or
effect.
(d) The Lessor may from time to time, without consent of or
notice to the Lessee, sell participations in the interests of the Lessor in
this Lease and the other Operative Documents to one or more Participants upon
such terms and conditions as it shall determine; provided, that: (i) no
Participant shall be entitled to receive any greater payment under Section
27(c) than the Lessor would have been entitled to receive with respect to the
rights transferred, unless such transfer is made with the Lessee's prior
written consent or by reason of the provisions of Section 27(b) or (c)
requiring the Lessor to designate a different Lending Office under certain
circumstances or at a time when the circumstances giving rise to such greater
payment did not exist; (ii) the Lessor shall include in the participation
agreement with each Participant the covenant of each Participant to take no
position in conflict with the statements of the intent of the Lessor and the
Lessee in Section 25 of this Lease or otherwise in conflict with the provisions
thereof; and (iii) in no event shall the Lessor be obligated to the Participant
under the participation agreement to take or refrain from taking any action
hereunder except that the Lessor may agree in the participation agreement that
it will not, without the consent of the Participant, agree to (A) the increase
or extension of the term of the Lease as to any Phase, (B) the extension of any
date fixed for the payment of Rent, (C) the reduction of any payment of Rent or
(D) the release of any Equipment, except as specifically provided by this
Lease.
Section 22. Notices. Except as otherwise provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telecopier and other
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readable communication) and mailed by certified mail, return receipt requested,
telecopied or otherwise transmitted or delivered, if to the Lessee, Flowers
Industries, Inc., ▇▇▇ ▇.▇. ▇▇▇▇▇▇▇ 10 South, P. O. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, Attention: C. ▇▇▇▇▇▇ ▇▇▇▇, III, Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇; if to the
Lessor, at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇-▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇▇ ▇. Head, Vice President/Operations Manager, Telecopier:
(▇▇▇) ▇▇▇-▇▇▇▇; or, as to either party, at such other address as shall be
designated by such party in a written notice to the other party. All such
notices and communications shall, if so mailed, telecopied or otherwise
transmitted, be effective when received, if mailed, or when the appropriate
answer back or other evidence of receipt is given, if telecopied or otherwise
transmitted, respectively. A notice received by the Lessor by telephone shall
be effective if the Lessor believes in good faith that it was given by an
authorized representative of the Lessee and acts pursuant thereto,
notwithstanding the absence of written confirmation or any contradictory
provision thereof.
Section 23. Amendments and Waivers. The provisions of this Lease
may from time to time be amended, modified or waived only if such amendment,
modification or waiver is in writing and consented to by the Lessee and the
Lessor and, if applicable, in accordance with Section 22.
Section 24. Severability. Any provision of this Lease which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 25. Federal Income Tax Considerations. It is the
understanding of the parties that for income tax purposes this transaction will
be treated as a financing and the Lessee will be treated as the owner of all of
the Equipment and the Lessee and the Lessor agree not to take any action
inconsistent with such treatment, subject to the following sentence.
Notwithstanding anything in this Section to the contrary, the Lessor retains
the right to assert that it is the owner of the Equipment subject to this Lease
for income tax purposes in the event that there is a determination (within the
meaning of Section 1313 of the Internal Revenue Code of 1986, as amended, or
with respect to state or local income tax, a comparable determination under
state or local
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law) that the Lessee is not to be treated as the owner of the Equipment.
Section 26. Other Provisions. In order to protect the rights and
remedies of the Lessor and the Lessee both during the term of this Lease and
following a Default, an Event of Default, a Termination Event or a Cancellation
Event, and for the purposes of Federal, state and local income and ad valorem
taxes, state and local sales taxes, documentary stamp and intangibles taxes and
other taxes relating to or assessable as a result of the execution, delivery or
recording of any of the Operational Documents and for purposes of Title 11 of
the United States Code (or any other applicable Federal, state or local
insolvency, reorganization, moratorium, fraudulent conveyance or similar law
now or hereafter in effect for the relief of debtors), the parties hereto
intend that (i) this Lease be treated as the repayment and security provisions
of a loan by the Lessor to the Lessee in the face amount of the Equipment Cost
for all Phases, (ii) all payments of Rent and the Termination Value for any
Phase be treated as payments of principal, interest and other amounts owing
with respect to such loan, respectively, (iii) the Lessee should be treated as
entitled to all benefits of ownership of the Equipment or any part thereof,
(iv) this Lease be treated as a security agreement or other similar instrument
(the "Security Agreement") from the Lessee, as debtor to the Lessor, as secured
party, encumbering the Equipment and all personal property comprising the
Equipment and that the Lessee, as debtor, hereby grants to the Lessor, as
secured party (the "Secured Party") a first and prior Lien on and security
interest in the Equipment and all proceeds therefrom, in each case being
effective as of the date of this Lease. In such event, the Lessor shall have
all of the rights, powers and remedies of a secured party available under
applicable law, including, without limitation, judicial or nonjudicial
foreclosure or power of sale, as and to the extent available under applicable
law, and the amounts secured by the Liens and security interests shall be the
Basic Rent, Supplemental Rent, Termination Value and Final Rent Payment, and
all indemnification and other amounts payable under this Lease or any of the
other Operative Documents. The filing of any financing statement in connection
with this Lease shall be deemed to constitute the filing of a financing
statement to perfect the security interests in the Equipment as aforesaid to
secure the payment of all amounts due from time to time from the Lessee to the
Lessor under this Lease and the other Operative Documents. To the fullest
extent permitted by applicable law, the Lessor and the Lessee intend that the
Equipment be and remain at all times
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personal property regardless of the manner or extent to which any of the
Equipment may be attached or affixed to any real property.
This Security Agreement secures and shall be security for any and all
future advances made by Secured Party to the Lessee with respect to this Lease
or any of the other Operative Documents or the Equipment. Nothing contained
herein shall be deemed an obligation on the part of the Lessor to make any
further advances.
In order to preserve the security interest provided for herein, each
of the Lessor and the Lessee agrees to abide by the following provisions with
regard to the Equipment (for purposes of this Section, hereinafter referred to
as "Collateral"):
(a) Change in Location of Collateral or the Lessee. The
Lessee will notify the Secured Party on or before the date of any change in
location of the Collateral and will, on or before the date of any change in
location of the Collateral, prepare and file new or amended financing
statements as necessary so that the Secured Party shall continue to have a
first and prior perfected Lien (subject only to Permitted Liens) in such
Collateral after such change in location. The Lessee will give the Secured
Party thirty (30) days' prior written notice of any change in the location of
the Lessee's chief executive office or address.
(b) Documents; Collateral in Possession of Third Parties. If
certificates of title or other documents evidencing ownership or possession of
the Collateral are issued or outstanding, the Lessee will cause the interest of
the Secured Party to be properly noted thereon and will, forthwith upon
receipt, deliver same to the Secured Party. If any Collateral is at any time in
the possession or control of any warehouseman, bailee, agent or independent
contractor, the Lessee shall notify such Person of the Secured Party's security
interest in such Collateral. Upon the Secured Party's request, the Lessee shall
instruct any such Person to hold all such Collateral for the Secured Party's
account subject to the Lessee's instructions, or, if an Event of Default shall
have occurred and be continuing, subject to the Secured Party's instructions.
(c) Sale, Disposition or Encumbrance of Collateral. Except
for Permitted Liens, as permitted by any of the Operative Documents or with the
Secured Party's prior written consent, the Lessee will not in any way encumber
any of the Collateral (or permit or suffer any of the Collateral to be
encumbered) except
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for Permitted Liens or sell, assign, lend, rent, lease or otherwise dispose of
or transfer any of the Collateral to or in favor of any Person other than the
Secured Party.
(d) Proceeds of Collateral. Except as permitted by any of
the Operative Documents, the Lessee will deliver to the Secured Party promptly
upon receipt all proceeds delivered to the Lessee from the sale or disposition
of any Collateral. Upon any such sale or disposition, the Lessee shall be
entitled to (i) in the circumstances described in Section 15 (a)(ii)(B)(2)(y),
the amount determined pursuant thereto or (ii) in any other circumstances, any
surplus remaining after the payment of the Termination Value and the payment of
all expenses pursuant to Section 16. This Section shall not be construed to
permit sales or dispositions of the Collateral except as may be elsewhere
expressly permitted by this Lease or the other Operative Documents.
(e) Further Assurances. Upon the request of the Secured
Party, the Lessee shall (at the Lessee's expense) execute and deliver all such
assignments, certificates, financing statements or other documents and give
further assurances and do all other acts and things as the Secured Party may
reasonably request to perfect the Secured Party's interest in the Collateral or
to protect, enforce or otherwise effect the Secured Party's rights and remedies
hereunder, all in form and substance satisfactory to the Secured Party.
(f) Lease. The Lease will not be amended, supplemented or
modified without the written consent of the Secured Party. All payments under
the Lease shall be made only to such account as specified by the Secured Party.
Section 27. Yield Protection and Illegality
(a) Basis for Determining Interest Rate Inadequate or
Unfair.
If on or prior to the first day of any Rental Period or Interim Rental Period
with respect to any Basic Rent or Interim Rent which is determined on the basis
of the LIBO Rate:
(i) the Lessor determines that deposits in Dollars
(in the applicable amounts), are not being offered in the relevant
market for such Rental Period or Interim Rental Period, or
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(ii) the Lessor determines and give notice to the
Lessee that, as a result of conditions in or generally affecting the
London interbank eurodollar market, the rates for Basic Rent or
Interim Rent, as applicable, determined on the basis of the LIBO Rate
for any Rental Period or Interim Rental Period will not adequately and
fairly reflect the cost to the Lessor of making, funding or
maintaining the Equipment Cost giving rise to such Basic Rent or
Interim Rent for any Equipment for such Rental Period or Interim
Rental Period, the Lessor shall forthwith so notify the Lessee,
whereupon,
(A) the Basic Rent or Interim Rent, as
applicable, for such Equipment for such Rental Period or
Interim Rental Period shall be determined on the basis of the
Base Rate,
(B) the obligation of the Lessor to fund any
Equipment Cost having Basic Rent or Interim Rent, as
applicable, or to continue to accrue Basic Rent or Interim
Rent, as applicable, based on the LIBO Rate shall be
suspended until the Lessor shall notify the Lessee that the
circumstances causing such suspension no longer exist, and
(C) unless the Lessee notifies the Lessor at least
two (2) Business Days before the date of funding of any
Equipment Cost for which notice has previously been given
that it elects not to cause the related Equipment to be
purchased on such date, Basic Rent or Interim Rent, as
applicable, relating to such Equipment Cost shall be
determined at a rate of interest equal to the Base Rate. Upon
the written request of the Lessee, the Lessor shall negotiate
with the Lessee for a reasonable period of time, as
determined in the Lessor's discretion, to develop a
substitute interest rate basis hereunder; provided, however,
(x) the Lessor and the Lessee make no representation,
warranty or covenant that any such agreement will be made,
and (y) any relevant Basic Rent or Interim Rent shall
continue to be determined based on the Base Rate during the
continuance of any such negotiations and thereafter should no
alternate interest rate be agreed to by the necessary
parties.
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(b) Illegality. If, after the date hereof, the adoption of
any applicable law, rule or regulation, or any change therein, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof (any such agency being referred to as a "Banking
Authority" and any such event being referred to as a "Change of Law"), or
compliance by the Lessor (or its Applicable Funding Office) with any request or
directive (whether or not having the force of law) of any Banking Authority
shall make it unlawful or impossible for the Lessor (or its Applicable Funding
Office) to determine Basic Rent or Interim Rent for the making, maintaining or
funding of the Equipment Cost for any Equipment based on the LIBO Rate, the
Lessor shall forthwith give notice thereof to the Lessee, whereupon until the
Lessor notifies the Lessee that the circumstances giving rise to such
suspension no longer exist, the obligation of the Lessor determine Basic Rent
or Interim Rent for the making, maintaining or funding of the Equipment Cost
for any Equipment based on LIBO Rate shall be suspended. Before giving any
notice to the Lessee pursuant to this Section, the Lessor shall designate a
different Applicable Funding Office if such designation will avoid the need for
giving such notice and will not, in the judgment of the Lessor, be otherwise
disadvantageous to the Lessor. If the Lessor shall determine that it may not
lawfully continue to determine Basic Rent or Interim Rent for the making,
maintaining or funding of any Equipment Cost for any Equipment based on the
LIBO Rate to the end of the Rental Period or Interim Rental Period and shall so
specify in such notice, the Basic Rent or Interim Rent for such Rental Period
or Interim Rental Period shall immediately be converted to and be determined
based on the Base Rate, and the Lessee shall immediately pay to the Lessor any
amounts payable pursuant to Section 27(c).
(c) Increased Cost and Reduced Return.
(i) If after the date hereof, a Change of Law or
compliance by the Lessor (or its Applicable Funding Office) with any
request or directive (whether or not having the force of law) of any
Banking Authority:
(A) shall impose, modify or deem applicable
any reserve, special deposit or similar requirement
(including, without limitation, any such requirement imposed
by the Board of Governors of the Federal Reserve System
(including any Euro-Dollar Reserve Requirement) against
assets of, deposits with or for
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the account of, or credit extended by, the Lessor (or
its Applicable Funding Office); or
(B) shall impose on the Lessor (or its
Applicable Funding Office) or on the relevant interbank
market any other condition affecting the Basic Rent or
Interim Rent, to the extent it is determined based on the
LIBO Rate;
and the result of any of the foregoing is to increase the cost to the
Lessor (or its Applicable Funding Office) of determining Basic Rent or
Interim Rent based on the LIBO Rate, or to reduce the amount of any
sum received or receivable by the Lessor (or its Applicable Funding
Office) under this Lease or under any other Operative Document with
respect thereto, by an amount deemed by the Lessor to be material,
then, within 15 days after demand by the Lessor, the Lessee shall pay
to the Lessor such additional amount or amounts as will compensate the
Lessor for such increased cost or reduction; provided, however, that
the Lessee shall not be responsible to the Lessor for any increased
cost or reduced return under this Section 27(c)(i) which accrued at
any time before that date which is 90 calendar days prior to the date
upon which the Lessee is notified of same.
(ii) If the Lessor shall have determined that after
the date hereof the adoption of any applicable law, rule or regulation
regarding capital adequacy, or any change therein, or any change in
the interpretation or administration thereof, or compliance by the
Lessor (or its Applicable Funding Office) with any request or
directive regarding capital adequacy (whether or not having the force
of law) of any Banking Authority, has or would have the effect of
reducing the rate of return on the Lessor's capital as a consequence
of its obligations hereunder to a level below that which the Lessor
could have achieved but for such adoption, change or compliance
(taking into consideration the Lessor's policies with respect to
capital adequacy) by an amount deemed by the Lessor to be material,
then from time to time, within 15 days after demand by the Lessor, the
Lessee shall pay to the Lessor such additional amount or amounts as
will compensate the Lessor for such reduction, subject to the proviso
at the end of Section 27(c)(i); provided, however, that the Lessee
shall not be responsible to the Lessor for any additional amount under
this Section 27(c)(ii) which accrued at any time before that
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date which is 90 calendar days prior to the date upon which the Lessee
is notified of same.
(iii) The Lessor will promptly notify the Lessee of
any event of which it has knowledge, occurring after the date hereof,
which will entitle the Lessor to compensation pursuant to and subject
to the limitations contained in this Section 27(c) and will designate
a different Applicable Funding Office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not,
in the judgment of the Lessor be otherwise disadvantageous to the
Lessor. A certificate of the Lessor claiming compensation under this
Section 27(c) and setting forth the additional amount or amounts to be
paid to it hereunder shall be conclusive in the absence of manifest
error. In determining such amount, the Lessor may use any reasonable
averaging and attribution methods. Nothing in this Section 27(c) shall
require the Lessor to disclose any information about its tax affairs
or interfere with, limit or abridge the right of the Lessor to arrange
its tax affairs in any manner in which it desires.
(iv) The Lessor, in claiming increased costs or
other amounts under this Section 27(c), shall, at the time of making
any claim for such increased cost or other amount and as a condition
precedent to the obligation of the Lessee to reimburse the same,
certify to the Lessee in writing that the Lessor, as a matter of
policy, is seeking reimbursement of similar increased costs and other
amounts from its credit obligors generally for similar types of
credits.
(v) The provisions of this Section 27(c) shall (i)
subject to the provisions of Section 21(d)(i), be applicable with
respect to any Participant, assignee or other transferee, and any
calculations required by such provisions shall be made based upon the
circumstances of such Participant, assignee or other transferee and
(ii) constitute a continuing agreement and shall survive for a period
of one year after the termination of this Agreement and the payment in
full all Rent.
(d) Payments and Computations. Each determination by the
Lessor of an interest rate or yield with respect to Basic Rent or Interim Rent,
or an increased cost or increased capital or of illegality hereunder shall be
conclusive and binding for
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all purposes (absent manifest error) if made reasonably and in good faith.
(e) Compensation. Upon the request of the Lessor, delivered
to the Lessee, the Lessee shall pay to the Lessor such amount or amounts as
shall compensate the Lessor for any loss, cost or expense (but not loss of
margin or profit) incurred by the Lessor as a result of:
(i) any payment or prepayment (including by reason
of the occurrence of a Lease Termination Date) of a Scheduled Amount
or other Equipment Cost or Termination Value on a date other than the
last day of a Rental Period or Interim Rental Period, or any failure
to prepay a Scheduled Amount or other Equipment Cost on the date
specified for such prepayment by the Lessee in a notice to the Lessor;
or
(ii) any failure by the Lessee to cause the funding
of the purchase of Equipment pursuant to the Agency Agreement to occur
on the date for such funding as specified in the applicable notice
delivered pursuant to the Agency Agreement (other than by reason of a
default by the Lessor);
such compensation to include, without limitation, as applicable: an amount
equal to the excess, if any, of (x) the amount of Basic Rent or Interim Rent
which would have accrued on the amount so paid or prepaid or not prepaid or
with respect to which such funding did not occur for the period from the date
of such payment, prepayment or failure to prepay or fund to the last day of the
then current Rental Period or Interim Rental Period for such payment of Basic
Rent or Interim Rent, in the case of a failure to prepay or cause such funding,
the Rental Period or Interim Rental Period for such Basic Rent or Interim Rent
which would have commenced on the date of such failure to prepay or cause such
funding) determined based on the applicable rate for Basic Rent or Interim Rent
provided for herein over (y) the rate relating to such Basic Rent or Interim
Rent (as reasonably determined by the Lessor), the Lessor would have paid on
deposits in Dollars of comparable amounts having terms comparable to such
period placed with it by leading banks in the London interbank market;
provided, that (i) the Lessee shall be responsible to the Lessor only for its
actual costs incurred in connection with same (i.e. not for any lost profits
which were expected over the course of such Rental Period or Interim Rental
Period), (ii) the Lessor shall take reasonable efforts to mitigate its damages
in
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connection with same, and (iii) the Lessee shall not be responsible to the
Lessor for such losses in excess of those amounts as the Lessor would have
incurred had it funded or maintained the related Equipment Cost in the London
interbank market.
Section 28. Conditions Precedent
(a) Closing; Conditions Precedent to Effectiveness of this
Lease. On the Closing Date, at such place as the parties hereto shall agree,
this Lease and each of the Operative Documents shall be duly executed and
delivered by the parties to such documents. This Lease shall become effective
when (i) it shall have been executed by the Lessor and the Lessee, and (ii) the
Lessor shall, on or before October 20, 1995, have received the following, each
being in form and substance satisfactory to the Lessor; provided, that the
Lessee may deliver the insurance certification referred to in clause (iv) below
by October 27, 1995 (which must be reasonably satisfactory in form and
substance to the Lessor), and failure to deliver such certification on or
before October 20, 1995 shall not prevent this Lease from becoming effective:
(i) Certificates of the Lessee. A Certificate of the
Secretary or Assistant Secretary of the Lessee setting forth (i)
resolutions of its board of directors authorizing the execution,
delivery and performance of the obligations contained in this Lease
and the other Operative Documents to which it is a party, (ii) the
officers of the Lessee specified in such Secretary's Certificates that
are authorized to sign this Lease and the other Operative Documents to
which the Lessee is a party and, until replaced by another officer or
officers duly authorized for that purpose, to act as its respective
representative for the purposes of signing documents and giving
notices and other communications in connection with this Lease and the
Operative Documents to which it is a party and (iii) true and correct
copies of the articles or certificate of incorporation and the bylaws
of the Lessee. The Lessor may conclusively rely on such certificate
until the Lessor receives notice in writing from the Lessee to the
contrary.
(ii) Opinion of the Lessee's Counsel. A favorable
opinion or opinions of Assistant General Counsel to the Lessee, in
substantially the form of Exhibit D, and
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as to such other matters as the Lessor may reasonably request.
(iii) Execution and Delivery of Operative Documents.
Each of the other Operative Documents.
(iv) Insurance Certification. The Lessor shall have
received a certificate by a firm of independent insurance brokers or
consultants chosen by the Lessee setting forth the insurance obtained,
and to be obtained pursuant to this Lease, with respect to the
Equipment and the Lessee's operations with respect thereto.
(v) Annual Financial Statements. The Lessor shall
have received the financial statements described in Section
29(k).
(vi) Other. Such other documents as the Lessor or
special counsel to the Lessor may reasonably request.
(b) Conditions to Commencement of Lease for each Phase. The
commencement of this Lease as to each Phase is subject to (i) the occurrence of
the Acquisition Date as to the first item of Equipment in such Phase, (ii)
there being no more than 8 Phases under this Lease, (iii) the anticipated
actual Equipment Cost (not including Soft Costs) for any Phase not being less
than $2,000,000, and (iv) the satisfaction of the other conditions set forth in
Section 28(c) as to such first item of Equipment (such date being the "Phase
Commencement Date" as to such Phase.
(c) Conditions to addition of any Equipment in each Phase.
The addition of any Equipment to this Lease is subject to the satisfaction of
each of the following conditions as to such Equipment:
(i) Acquisition Date. The Acquisition Date shall
have occurred as to such Equipment. The term "Acquisition Date" with
respect to any item of Equipment shall mean the date on which each of
such conditions has been satisfied (A) the Lessor shall have paid the
Equipment Cost therefor and shall have received bills of sale or other
evidence of ownership thereof, taking good and marketable title
thereto, free and clear of all liens and encumbrances of third
parties, pursuant to the Agency Agreement, (B) the Lessor shall have
received copies of all Related Contracts, and all
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other contracts entered into in connection with the acquisition,
development and installation of the Equipment, pursuant to the Agency
Agreement (C) all Permits that are or will become Applicable Permits
with respect to such Phase and the Applicable Site shall have been
obtained, except Applicable Permits customarily obtained or which are
permitted by Governmental Requirements to be obtained after the
acquisition of the Equipment (in which case the Lessee, having
completed all appropriate due diligence in connection therewith
pursuant to the Agency Agreement, shall have no reason to believe that
such Permits will not be granted in the usual course of business prior
to the date that such Permits are required by Governmental
Requirements), and such obtained Permits shall be in proper form, in
full force and effect and not subject to any appeal or other
unsatisfied contest that may allow modification or revocation thereof,
(D) the Lessor shall have received evidence of perfection under local
law of its ownership of the Equipment subject to a Lease intended as
security and of filing of protective financing statements under
applicable local law, properly executed by the Lessee, evidencing a
first priority, perfected interest in the Equipment in favor of the
Lessor as security for payment by the Lessee of all amounts, and the
performance of all obligations, of the Lessee under the Lease, (E) the
Lessor shall have received a Certificate of Acceptance in
substantially the form of Exhibit B attached hereto and by reference
made a part hereof from the Lessee with respect to such Equipment and
(F) the Lessor shall have received a Lease Supplement in substantially
the form of Exhibit C attached hereto and by reference made a part
hereof from the Lessee with respect to such Equipment.
(ii) No Default. The fact that immediately before
and after the Acquisition Date for such Equipment, no Default or Event
of Default shall have occurred and be continuing.
(iii) Accuracy of Representations, etc. The
representations and warranties of the Lessee contained in this Lease
and the other Operative Documents to which it is a party, are true and
correct in all material respects on and as of the Acquisition Date for
such Equipment (except for any representations which were correct on
the date of this Lease but are not correct on such Acquisition Date
because of a change permitted by the terms of this Lease or the
Operative Documents).
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(iv) Casualties. Neither the Equipment in such Phase
nor the Applicable Site thereof shall have suffered (A) a Loss Event
or (B) a Casualty Occurrence other than a Casualty Occurrence for
which a plan acceptable to the Lessor for replacing, or causing to be
replaced, the portions of Equipment that are the subject of such
Casualty Occurrence has been provided to the Lessor.
(v) No Material Adverse Change or Effect. No
material adverse change shall have occurred in the financial condition
of the Lessee and its Subsidiaries on a consolidated basis since the
date of the most recent Fiscal Quarter for which a financial statement
of the Lessee was delivered to the Lessor and no event, act, condition
or occurrence shall exist or have occurred that has had, or would
reasonably be expected to have, a Material Adverse Effect.
(vi) Taxes, Filings, Recordings. All filings or
recordings reasonably considered necessary or desirable by the Lessor
have been completed and all taxes and fees in connection therewith,
and all Impositions with respect to the Equipment that are then due
and payable, shall have been paid by the Lessee.
Each presentation of a Lease Supplement hereunder shall be deemed to be a
representation and warranty by the Lessee on the Acquisition Date relating
thereto as to the facts specified in paragraphs (ii), (iii), (iv), (v), and
(vi) of this Section 28(b).
Section 29. The Lessee's Representations and Warranties
The Lessee represents and warrants to the Lessor that:
(a) Corporate Existence and Power. The Lessee is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Georgia. The Lessee is duly qualified to transact business
in every jurisdiction where, by the nature of its business, such qualification
is necessary, except for any failure to comply with the foregoing which does
not have a Material Adverse Effect, and has all corporate powers and all
government authorizations, licenses, consents and approvals required to engage
in its business and operations as now conducted, except for any failure to
comply with the foregoing which does not have a Material Adverse Effect.
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(b) Corporate and Governmental Authorization. The execution,
delivery and performance by the Lessee of this Lease and the other Operative
Documents to which it is a party (i) are within its corporate powers, (ii) have
been duly authorized by all necessary corporate action, (iii) require no action
by or respect of or filing with, any governmental body, agency or official,
(iv) do not contravene or constitute a default under, any material provision of
applicable law or regulation or of the certificate of incorporation or by-laws
of the Lessee or, to the best of the Lessee's knowledge, any material agreement
relating to Debt, judgment, injunction, order, decree or other instrument
relating to Debt binding upon the Lessee or any Subsidiary of the Lessee and
(v) do not result in the creation or imposition of any Lien on any asset of the
Lessee or any Subsidiary of the Lessee or on any of the Equipment, except in
favor of the Lessor.
(c) Binding Effect. This Lease and the Operative Documents
to which it is a party constitutes a valid and binding agreement of the Lessee,
enforceable in accordance with their respective terms, provided that the
enforceability hereof and thereof is subject in each case to general principles
of equity and to bankruptcy, insolvency and similar laws affecting the
enforcement of creditor's rights generally.
(d) No Litigation. Except as may be disclosed in any annual,
quarterly or monthly reports which the Lessee has filed with the Securities and
Exchange Commission, there is no action, suit or proceeding pending, or to the
knowledge of the Lessee, threatened, against or affecting the Lessee or any
Subsidiary of the Lessee before any court or arbitrator or any governmental
body, agency or official which could have a Material Adverse Effect or which in
any manner draws into question the validity of or could impair in any material
respect the ability of the Lessee to perform its obligations under this
Agreement or any of the Operative Documents executed by the Lessee.
(e) Compliance with Laws. The Lessee and, to the best of the
Lessee's knowledge, each Material Subsidiary, is in compliance with all
applicable laws, regulations and similar requirements of governmental
authorities, including, without limitation, ERISA, Environmental Requirements
and payments of taxes, except where such compliance is being contested in good
faith through appropriate proceedings or does not have a Material Adverse
Effect.
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(f) Ownership of Property; Liens. The Lessee has title to
or leasehold or other interests in its material properties sufficient for the
conduct of its business, and none of such property is subject to any Lien
except Permitted Liens.
(g) No Default. Neither the Lessee nor any of the Lessee's
Subsidiaries is in default under or with respect to any agreement, instrument
or undertaking to which it is a party or by which it or any of its property is
bound which could have or cause a Material Adverse Effect. No Default or Event
of Default has occurred and is continuing.
(h) Full Disclosure. The Lessee's annual report on Form 10-K
for the fiscal year ended at June 30, 1995, a copy of which has been furnished
by the Lessee to the Lessor, did not, as of the date such Form 10-K was filed
with the Securities and Exchange Commission, contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading and (b) from the date of filing of the Lessee's annual report on
Form 10-K for the fiscal year ended on June 30, 1995 through the date hereof,
the Lessee has not filed a current report on Form 8-K with the Securities and
Exchange Commission and, as of the date hereof, no event or condition exists
which would require such filing by the Lessee pursuant to the Securities
Exchange Act of 1934, as amended, except for any such event or condition which
has heretofore been disclosed in writing to the Lessor by delivery to the
Lessor of a Form 8-K.
(i) Capital Stock. All Capital Stock, debentures, bonds,
notes and all other securities of the Lessee presently issued and outstanding
are validly and properly issued in accordance with all applicable laws in all
material respects, including but not limited to, the "Blue Sky" laws of all
applicable states and the federal securities laws, except to the extent any
failure with respect thereto would not have or cause a Material Adverse Effect.
(j) Margin Stock. The Lessee is not engaged principally, or
as one of its important activities, in the business of purchasing or carrying
any Margin Stock.
(k) Annual Financial Statements. The audited consolidated
financial statements of the Lessee for its Fiscal Year ended July 1, 1995
fairly present, as of the date thereof,
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in conformity with GAAP, the consolidated financial position of the Lessee and
its Consolidated Subsidiaries as of such dates and their consolidated results
of operations and cash flows for such period stated.
Section 30. Covenants
The Lessee covenants and agrees with the Lessor to comply with the
following covenants until either (i) the Equipment for all Phases has been
purchased by the Lessee (or one of its Affiliates) for the Termination Value
therefor, (ii) this Lease has been terminated, the Equipment for all Phases has
been returned to the Lessor and the Termination Value or the Final Rent
Payment, as the case may be, and all other amounts payable under this Lease and
the other Operative Documents upon such occurrence have been paid in full:
(a) Information. The Lessee will deliver to the Lessor:
(i) as soon as available and in any event within 120 days
after the end of each Fiscal Year, a consolidated balance sheet of the
Lessee and its Consolidated Subsidiaries as of the end of such Fiscal
Year and the related consolidated statements of income, shareholders'
equity and cash flows for such Fiscal Year, setting forth in each case
in comparative form the figures for the previous fiscal year, all
certified by Price Waterhouse LLP or other independent public
accountants of nationally recognized standing, with such certification
to be free of exceptions and qualifications not acceptable to the
Lessor;
(ii) as soon as available and in any event within 60 days
after the end of each of the first 3 Fiscal Quarters of each Fiscal
Year, a consolidated balance sheet of the Lessee and its Consolidated
Subsidiaries as of the end of such Fiscal Quarter and the related
statement of income and statement of cash flows for such Fiscal
Quarter and for the portion of the Fiscal Year ended at the end of
such Fiscal Quarter, setting forth in each case in comparative form
the figures for the corresponding Fiscal Quarter and the corresponding
portion of the previous Fiscal Year, all certified (subject to normal
year-end adjustments) as to fairness of presentation, GAAP and
consistency by the chief financial officer or the chief accounting
officer of the Lessee;
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(iii) promptly upon the mailing thereof to the shareholders
of the Lessee generally, copies of all financial statements, reports
and proxy statements so mailed;
(iv) promptly after request by the Lessor therefor, copies
of all registration statements (other than the exhibits thereto and
any registration statements on Form S-8 or its equivalent) filed with
the Securities and Exchange Commissions, and promptly upon the filing
thereof, annual or quarterly reports which the Lessee shall have filed
with the Securities and Exchange Commission;
(v) if and when any member of the Controlled Group (x)
gives or is required to give notice to the PBGC of any "reportable
event" (as defined in Section 4043 of ERISA) with respect to any Plan
which might constitute grounds for a termination of such Plan under
Title IV of ERISA, or knows that the plan administrator of any Plan
has given or is required to give notice of any such reportable event,
a copy of the notice of such reportable event given or required to be
given to the PBGC; (y) receives notice of complete or partial
withdrawal liability under Title IV of ERISA, a copy of such notice;
or (z) receives notice from the PBGC under Title IV of ERISA of an
intent to terminate or appoint a trustee to administer any Plan, a
copy of such notice;
(vi) promptly, and, in any event, within 15 Business Days
after any officer of the Lessee becomes aware of any Default or Event
of Default, a certificate of a senior financial or accounting officer
or the chief financial officer or the chief accounting officer or the
Treasurer of the Lessee setting forth the details thereof and the
action which the Lessee is taking or proposes to take with respect
thereto;
(vii) promptly upon becoming aware of the occurrence of
either a Loss Event or a Casualty Occurrence, or any other event or
condition requiring notice under either Section 7 or Section 8 of this
Lease, the Lessee shall give the Lessor written notice thereof, which
notice shall specify the damage or loss to the Equipment in reasonable
detail; and
(viii) from time to time such additional information
regarding the financial position or business of Lessor and
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the Subsidiaries of Lessor as the Lessor may reasonably request.
(b) Maintenance and Inspection of Property, Books and
Records. The Lessee will keep books of record and account regarding this Lease
and shall maintain, on a current basis, books of proper record and account in
conformity with GAAP, consistently applied (to the extent applicable, and the
rules of the Security and Exchange Commission and the Financial Accounting
Standards Board), and keep copies of all Related Contracts and any amendments
thereto and the Equipment Cost of the Equipment for each Phase and of each
material item of Property comprising or included in the Equipment for each
Phase, and shall provide copies of the foregoing to the Lessor from time to
time on request at the Lessee's expense. The Lessee will permit representatives
of the Lessor (x) at the Lessor's expense and upon reasonable notice and at a
time reasonably convenient to the Lessee (but in any event within 10 days of
such notice) prior to the occurrence of a Default and (y) at the Lessee's
expense after the occurrence of a Default, to visit and inspect the Equipment
for any Phase and any Applicable Site and any of its properties, to examine and
make abstracts from any of its books and records and to discuss its affairs,
finances and accounts with its officers, employees and independent public
accountants. The Lessee agrees to cooperate and assist in such visits and
inspections, in each case at such reasonable times and as often as may
reasonably be desired.
(c) Maintenance of Existence. The Lessee shall maintain its
existence and carry on the major part of its business in substantially the same
fields as such business is now carried on and maintained.
(d) Consolidations, Mergers and Sales of Assets. The
Lessee will not consolidate or merge with or into, or sell, lease or otherwise
transfer all or any substantial part of its Consolidated Total Assets to, any
other Person; provided that (a) the Lessee may merge with another Person if (i)
such Person was organized under the laws of the United States of America or one
of its states, (ii) the Lessee is the corporation surviving such merger and
(iii) immediately after giving effect to such merger, no Default shall have
occurred and be continuing, and (b) without limiting any other transfer of
assets which may not constitute a "substantial part" of the Consolidated Total
Assets of the Lessee, during any Fiscal Quarter, no transfer of assets of the
Lessee shall constitute a "substantial part" of the assets of the
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Lessee if, on the date of such transfer either (A) (1) the aggregate assets to
be so transferred, when combined with all other assets transferred during such
Fiscal Quarter and the immediately preceding 7 Fiscal Quarters (the "Sold
Assets"), less the aggregate assets of the Lessee acquired during the same
period (the "Purchased Assets") constituted more than 25% of Consolidated Total
Assets at the end of the eighth Fiscal Quarter immediately preceding such
Fiscal Quarter; or (2) the Consolidated operating Profits during the 8 Fiscal
Quarters immediately preceding such Fiscal Quarter (the "Calculation Period")
contributed by the Sold Assets less the Consolidated Operating Profits
contributed by the Purchased Assets during the Calculation Period (calculated
as if the Purchased Assets had been acquired on the first day of the
Calculation Period) did not represent more than 25% of the Consolidated
Operating Profits during the Calculation Period; or (B) giving effect to the
disposition of such assets, (1) the book value of the Consolidated Total Assets
of the Lessee is not less than seventy-five percent (75%) of the book value of
the Consolidated Total Assets of the Lessee on July 1, 1995 and (2) the
Consolidated Operating Profits of the Lessee for the four Fiscal Quarter period
most recently ended prior to the date of such transfer are not less than
seventy-five percent (75%) of the Consolidated Operating Profits of the Lessee
for its Fiscal Year ending July 1, 1995.
(e) Dissolution. The Lessee shall not be permitted to be
dissolved or liquidated, except through corporate reorganization to the extent
permitted by Section 30(d).
(f) Use of Proceeds. The proceeds of fundings of the
Equipment Cost by the Lessor will be used solely to finance the acquisition of
the Equipment by the Lessor pursuant to the Agency Agreement, including the
enhancements and improvements to be made thereto and the design, renovation,
construction and installation thereof.
(g) Compliance with Laws. The Lessee will comply in all
material respects with applicable laws (including but not limited to ERISA,
Environmental Requirements and payments of taxes), regulations and similar
requirements of governmental authorities (including but not limited to PBGC),
except where the necessity of such compliance is being contested in good faith
through appropriate proceedings or if failure to comply does not have a
Material Adverse Effect.
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(h) Insurance. The Lessee will maintain (either in the name
of the Lessor or the Lessee, as applicable), with financially sound and
reputable insurance companies, insurance on such of its property in at least
such amounts, and with such deductibles, and against at least such risks as are
usually insured against in the same general area by companies of established
repute engaged in the same or similar businesses. The Lessee will deliver or
cause to be delivered to the Lessor promptly upon request the Lessor, and in
any event on January 1st of each calendar year, commencing with July 1, 1996, a
certificate by a firm of independent insurance brokers or consultants chosen by
the Lessee and acceptable to the Lessor setting forth the insurance or
self-insurance obtained pursuant to Section 14, including, without limitation,
the amounts thereof, the names of the insurers and the property, hazards and
risks covered thereby, and certifying that all premiums then due and payable
thereon have been paid and that the same are in full force and effect, that the
Lessor has been named as additional insureds and loss payees, as their
interests may appear, under each such policy, and are not liable for payment of
premiums thereunder, that such policies may not be cancelled without at least
thirty (30) days prior notice to the Lessor with an opportunity to cure any
default thereunder.
(i) Change in Fiscal Year. The Lessee will not change its
Fiscal Year without the consent of the Lessor, which shall not be unreasonably
withheld.
(j) Maintenance of Property. The Lessee shall maintain and
preserve the Equipment in accordance with the requirements of this Lease. The
Lessee shall maintain and preserve all of its properties and assets, in good
operating condition, ordinary wear and tear excepted, except where any failure
would not have or cause a Material Adverse Effect.
(k) Environmental Notices. The Lessee shall furnish to the
Lessor prompt written notice of all Environmental Liabilities, pending or
overtly threatened Environmental Proceedings, Environmental Notices,
Environmental Judgments and Orders, and Environmental Releases of which the
Lessee shall have received actual notice or have actual knowledge at, on, in,
under or in any way affecting any of the Equipment or Applicable Sites, if the
amount of liability or of remediation cost to the Lessor or the Lessee is or
could reasonably be expected to have a Material Adverse Effect.
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(l) Environmental Matters. The Lessee shall, and shall not
knowingly permit any Third Party to, use, produce, manufacture, process, treat,
recycle, generate, store, dispose of, manage at, or otherwise handle, or ship
or transport to or from any of the Equipment or Applicable Sites any Hazardous
Materials except for Hazardous Materials used, produced, manufactured,
processed, treated, recycled, generated, stored, disposed of, managed, or
otherwise handled amounts in the ordinary course of business or of management
or maintenance of the Equipment or the Applicable Sites in compliance with all
applicable Environmental Requirements, except to the extent that failure to
comply would not have a Material Adverse Effect.
(m) Environmental Release. The Lessee agree that upon its
becoming aware of the occurrence of an Environmental Release, except for any
Environmental Release which occurred in substantial compliance with all
Environmental Requirements, at or on the Equipment for any Phase or any
Applicable Site, it will act promptly to determine the extent of, and to take
such remedial action to eliminate, any such Environmental Release, whether or
not ordered or otherwise directed to do so by any Environmental Authority,
except to the extent that failure to take remedial action would not have a
Material Adverse Effect.
(n) Transactions with Affiliates. The Lessee shall not enter
into, or be a party to, any transaction with any Affiliate of the Lessee (which
Affiliate is not a Subsidiary, other than a Person in which the Lessee or such
Subsidiary owns less than a majority interest and which, if it were a
Subsidiary, would not be a Material Subsidiary), except as permitted by law and
in the ordinary course of business and pursuant to reasonable terms which
either (x) are no less favorable to the Lessee than would be obtained in a
comparable arm's length transaction with a Person which is not an Affiliate or
(y) have been approved by a majority of the disinterested members of the Board
of Directors of the Lessee; provided, that the foregoing shall not affect the
ability of the Lessee to determine, in its sole discretion, the amount or form
of executive or directors compensation from time to time.
(o) Further Assurances. The Lessee will, upon request of the
Lessor, cure promptly any defects in the due execution and delivery by it of
the Operative Documents, including this Lease. The Lessee at its expense will
promptly execute and deliver to the Lessor upon request all such other and
further documents, agreements and instruments in compliance with or
accomplishment
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of the covenants and agreements of the Lessee in the Operative Documents,
including this Lease, or to further evidence and more fully describe the
Equipment, or to correct any item that the Lessee and the Lessor agree
constitutes an omission or error in the Operative Documents, or more fully to
state the existing security obligations set out herein or in any of the
Operative Documents, or to perfect, protect or preserve any Liens created
pursuant to any of the Operative Documents, or to make any recordings, to file
any notices, or obtain any consents, required by the terms of the Operative
Documents, all as may be reasonably necessary or appropriate in connection
therewith.
(p) Liens, Etc. The Lessee covenants and agrees that it
shall not create, assume or suffer to exist, any Liens upon the Equipment for
any Phase, other than Permitted Liens.
(q) Negative Pledge. Neither the Lessee nor any Consolidated
Subsidiary will create, assume or suffer to exist any Lien on any asset now
owned or hereafter acquired by it, except:
(i) Liens existing on the date of this Lease securing
Debt outstanding on the date of this Lease;
(ii) any Lien existing on any asset of any corporation at the
time such corporation becomes a Consolidated Subsidiary and not
created in contemplation of such event;
(iii) any Lien on any asset securing Debt incurred or assumed
for the purpose of financing all or any part of the cost of acquiring
or constructing such asset, provided that such Lien attaches to such
asset concurrently with or within 18 months after the acquisition or
completion of construction thereof;
(iv) any Lien on any specific fixed asset of any corporation
existing at the time such corporation is merged or consolidated with
or into the Lessee or a Consolidated Subsidiary and not created in
contemplation of such event;
(v) any Lien existing on any specific fixed asset prior to
the acquisition thereof by the Lessee or a Consolidated Subsidiary and
not created in contemplation of such acquisition;
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(vi) Liens securing Debt owing by any Subsidiary to the
Lessee;
(vii) any Lien arising out of the refinancing, extension,
renewal or refunding of any Debt secured by any Lien permitted by any
of the foregoing paragraphs of this Section 30(q), provided that (x)
such Debt is not secured by any additional assets, and (y) the amount
of such Debt secured by any such Lien is not increased;
(viii) Liens imposed by any governmental authority for
taxes, assessments or charges not yet delinquent or which are being
contested in good faith and by appropriate proceedings if adequate
reserves with respect thereto are maintained on the books of the
Lessee or any of its Subsidiaries, as the case may be, in accordance
with GAAP;
(ix) carriers', warehousemen's, mechanics', materialmen's
repairmen's or other like Liens arising in the ordinary course of
business (whether or not statutory) which are not overdue for a period
of more than 30 days or which are being contested in good faith and by
appropriate proceedings, for which a reserve or other appropriate
provisions, if any, as shall be require by GAAP shall have been made;
(x) pledges or deposits to secure non-delinquent
obligations under worker's compensation, unemployment insurance and
other social security legislation;
(xi) Liens on capital stock of or other ownership
interests in any Person not a Subsidiary of the Lessee securing
Indebtedness of such Person;
(xii) Liens resulting from progress payments or partial
payments under United States government contracts or subcontracts;
(xiii) Liens arising from legal proceedings, so long as
such proceedings are being contested in good faith by appropriate
proceedings diligently conducted and so long as execution is stayed on
all judgments resulting from any such proceedings;
(xiv) Liens on real Property;
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(xv) Liens incidental to the conduct of its business or
the ownership of its assets which (i) do not secure Debt and (ii) do
not in the aggregate materially detract from the value of its assets
or materially impair the use thereof in the operation of its business;
and
(xvi) Liens not otherwise permitted by the foregoing
paragraphs of this Section 30(q) securing Debt (other than
indebtedness under this Lease or the other Operative Documents) in an
aggregate principal amount at any time outstanding not to exceed 5% of
Tangible Net Worth.
Provided Liens permitted by the foregoing paragraphs (i) through (xvi) shall at
no time secure Debt in an aggregate amount greater than 25% of Tangible Net
Worth.
(r) Guarantees. The Lessee shall not, except for
Guarantees related to Debt Liens expressly permitted by Section 30(q), after
the Closing Date incur or become liable on (whether by Guarantee or otherwise)
any Debt of another Person in excess of $20,000,000 except for (i) any
Guarantee of any of its Subsidiaries' obligations, (ii) endorsement of
negotiable instruments payable at sight for deposit or collection or similar
banking transactions in the usual course of business, (iii) Guarantees,
endorsements or other similar arrangements made by the Lessee to facilitate the
sale of loans made by the Lessee or any of its Subsidiaries to independent
contractors for the sale of distribution rights to distribute the Lessee's or
any of its Subsidiaries' products.
(s) ERISA. The Lessee will comply with the requirements
of ERISA with respect to each Plan and promptly notify the Lessor (i) of the
occurrence of any event which could cause the termination, in whole or in part,
of any Plan; (ii) of any violation of ERISA with respect to any Plan; and (iii)
of the occurrence of any reportable event as defined by ERISA.
Section 31. Miscellaneous.
(a) Entire Agreement. THIS LEASE AND THE OTHER OPERATIVE
DOCUMENTS EMBODY THE ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN THE LESSEE AND
THE LESSOR AND SUPERSEDE ALL OTHER AGREEMENTS AND UNDERSTANDINGS BETWEEN SUCH
PARTIES RELATING TO THE SUBJECT MATTER HEREOF. THIS WRITTEN LEASE AND THE OTHER
OPERATIVE DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
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AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
(b) No Personal Liability. Notwithstanding anything to the
contrary contained in this Lease, the execution of this Lease and any other
instrument or document executed in connection herewith shall not impose upon
any director, officer or employee of the Lessee or the Lessor personal
liability for the Lessee's and the Lessor's respective obligations under this
Lease or any other instrument or document executed in connection herewith;
provided the foregoing shall not relieve any such director, officer or employee
of personal liability for his or her fraud or intentional misconduct.
(c) Interpretation. Captions and section headings appearing
herein are included solely for convenience of reference and are not intended to
affect the interpretation of any provision of this Agreement.
(d) Governing Law. THIS LEASE AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HERETO RELATING TO THE EQUIPMENT SHALL BE GOVERNED BY AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA, BUT EXCLUDING
ALL CONFLICT-OF-LAWS RULES; EXCEPT THAT, AS TO ANY PHASE, TO THE EXTENT
REQUIRED BY THE LAWS OF THE STATE IN WHICH THE APPLICABLE SITE FOR SUCH PHASE
IS LOCATED, THE LAWS OF THE STATE OF IN WHICH SUCH APPLICABLE SITE IS LOCATED
SHALL GOVERN (I) THE CREATION AND EXISTENCE OF THIS LEASE, (II) SECTION 26 OF
THIS LEASE, AND (III) THE ENFORCEMENT OF THE RIGHTS OF LESSOR TO REPOSSESS THE
EQUIPMENT FOR SUCH PHASE FROM THE LESSEE AFTER THE EARLIER OF THE TERMINATION
OF THIS LEASE OR THE TERMINATION OF THE LESSEE'S RIGHT TO POSSESSION OF THE
EQUIPMENT FOR SUCH PHASE.
(e) No Third Party Beneficiaries. Nothing in this Lease,
express or implied, shall give to any Person, other than the parties hereto and
the Participants and their respective successors and permitted assigns, any
benefit or any legal or equitable right, remedy or claim under this Lease
including, without limitation, under any provision of this Lease regarding the
priority or application of any amounts payable hereunder.
(f) Counterparts. This Lease may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
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(g) Waiver of Jury Trial. EACH OF THE PARTIES HERETO WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO A TRIAL BY JURY
IN ANY ACTION OR PROCEEDING TO ENFORCE OR TO DEFEND ANY RIGHTS UNDER THIS LEASE
OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH
MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING
FROM ANY RELATIONSHIP EXISTING IN CONNECTION WITH THIS LEASE, AND AGREES THAT
ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A
JURY.
(h) Invalidity. In the event that any one or more of the
provisions contained in this Lease shall, for any reason, be held invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of the Lease.
(i) Usury. Notwithstanding anything to the contrary
contained in this Lease or any of the Operative Documents, the amounts which
the Lessee is obliged to pay pursuant to this Lease and the other Operative
Documents, and the amounts which the Lessor is entitled to receive pursuant to
this Lease and the other Operative Documents, are subject to the following
limitations. It is the intention of the parties hereto that the Lessor shall
conform strictly to usury laws applicable to it. Accordingly, if the
transactions contemplated hereby would be usurious as to the Lessor under laws
applicable to it (including the laws of the United States of America and the
State of Georgia or any other jurisdiction whose laws may be mandatorily
applicable to the Lessor notwithstanding the other provisions of this
Agreement), then, in that event, notwithstanding anything to the contrary in
this Lease or in any other Operative Document, it is agreed as follows: (i) the
aggregate of all consideration which constitutes interest under law applicable
to the Lessor that is contracted for, taken, reserved, charged or received by
the Lessor under this Lease or under any of the other aforesaid Operative
Documents or other agreements or otherwise in connec tion with this Lease shall
under no circumstances exceed the maximum amount allowed by such applicable
law, and any excess shall be cancelled automatically and if theretofore paid
shall be credited by the Lessor on the amounts paid by the Lessee, to the
extent that the obligations with respect thereto shall have been or would
thereby be paid in full, refunded by the Lessor to the Lessee and (ii) in the
event that any amounts hereunder become due and payable prior to the regularly
scheduled maturity (whether by reason of the occurrence of a Cancellation Event
or a Termination Event or otherwise, or in the event of any required
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or permitted prepayment, then such consideration that constitutes interest
under law applicable to the Lessor may never include more than the maximum
amount allowed by such applicable law, and excess interest, if any, provided
for in this Lease or otherwise shall be cancelled automatically by the Lessor
as of the date of such prepayment and, if theretofore paid, shall be credited
by the Lessor on the amounts payable hereunder (or, to the extent that the
amounts payable hereunder shall have been or would thereby be paid in full,
refunded by the Lessor to the Lessee). All sums paid or agreed to be paid to
the Lessor for the use, forbearance or detention of sums due hereunder shall,
to the extent permitted by law applicable to the Lessor, be amortized,
prorated, allocated and spread in equal parts throughout the full term of this
Lease until payment in full so that the rate or amount of interest on account
of any amounts payable hereunder does not exceed the maximum amount allowed by
such applicable law. If at any time and from time to time (i) the amount of
interest or yield payable to the Lessor on any date shall be computed at the
Highest Lawful Rate applicable to the Lessor pursuant to this Section 31(i) and
(ii) in respect of any subse quent interest or yield computation period the
amount of interest or yield otherwise payable to the Lessor would be less than
the amount of interest or yield payable to the Lessor computed at the Highest
Lawful Rate applicable to the Lessor, then the amount of interest or yield
payable to the Lessor in respect of such subsequent interest or yield
computation period shall continue to be computed at the Highest Lawful Rate
applicable to the Lessor until the total amount of interest or yield payable to
Lessor shall equal the total amount of interest or yield which would have been
payable to the Lessor if the total amount of interest or yield had been
computed without giving effect to this Section.
(j) Time of the Essence. Time is of the essence in
connection with the payment of Rent and all other amounts payable hereunder and
the performance of the Lessee's other obligations hereunder.
(k) Indemnification. The Lessee agrees:
(i) in addition to any other indemnity obligations
set forth in any Operative Document, to indemnify and save harmless,
the Lessor and any of its successors and assigns, and their respective
officers, directors, incorporators, shareholders, employees, agents,
partners, attorneys, affiliates and servants (individually an
"Indemnified Party" and collectively the "Indemnified
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Parties") from and against all liabilities, Liens, losses,
obligations, claims, damages (including, without limitation,
penalties, fines, court costs and administrative service fees),
penalties, demands, causes of action, suits, proceedings (including
any investigations, litigation or inquiries), judgments, orders, sums
paid in settlement of claims, and costs and expenses of any kind or
nature whatsoever, including, without limitation, reasonable
attorneys' fees and expenses and all other expenses incurred in
connection with investigating, defending or preparing to defend any
cause of action, suit or proceeding (including any investigations,
litigation or inquiries) or claim which may be incurred by or asserted
against or involve any of them (whether or not any of them is named as
a party thereto) as a result of, arising directly or indirectly out of
or in any way related to (A) any actual or proposed use by the Lessee
of the amounts funded as Equipment Cost, (B) any other aspect of this
Lease and the other Operative Documents, (C) the operations of the
business of the Lessee, (D) the failure of the Lessee to comply with
any Governmental Requirement in connection with the purchase, design,
construction, manufacture, engineering, assembly, installation, use,
operation or ownership of the Equipment or any portion thereof, (E)
the breach of any representation or warranty set forth herein
regarding Environmental Laws, (F) the failure of the Lessee as agent
for the Lessor under the Agency Agreement to pay any amount required
to be paid hereunder, (G) the failure of the Lessee to perform any
obligation herein required to be performed pursuant to Environmental
Laws, or any act or omission which occurred or will occur at any prior
or subsequent time, or any condition or state of facts in existence at
any prior or subsequent time relating in any way to any of the
Equipment or any Applicable Site the failure of which gives rise to
any liability or obligation under any Environmental Requirement or
gives rise to any Environmental Damages, (H) the Lessee's ownership
and leasing of the Equipment pursuant to this Lease, (I) the sale of
any portion of the Equipment either to the Lessee or any other Person
pursuant to the provisions of this Lease, (J) all acts or omissions of
the Lessee or any Sublessee, (K) any Imposition, Lien, judgment,
order, tax, or other payment owing in respect of any of the Equipment
or which the Lessee is obligated to discharge or pay to any Person,
(L) any action or omission of the Lessee pursuant to the Agency
Agreement, (M) any injury to, or death of, any Person, or damage to or
loss of Property to
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the extent not reimbursed by insurance prior to the Indemnified Party
having to make any payment in respect thereof, or any other thing
occurring on or resulting from activities involving any of the
Equipment or on any Applicable Site or any portion thereof, (N) the
renovation, construction, leasing, subleasing, operation, occupancy,
possession, use or non-use by the Lessee (whether in its individual
capacity or as agent for the Lessor) of any of the Equipment or any
Applicable Site or any portion thereof, or the condition of the
Equipment or any portion thereof, (O) any Default or Event of Default
under this Lease, (P) any act or omission of the Lessee or its agents,
contractors, licensees, Sublessees, invitees, representatives or any
other Person on or relating to, or in connection with, the ownership,
renovation, construction, leasing, subleasing, operation, management,
maintenance, occupancy, possession, use, non-use or condition of any
of the Equipment or any Applicable Site or any portion thereof, (Q)
performance of any labor or services or furnishing of any materials or
other Property in respect of any of the Equipment or any Applicable
Site or any portion thereof, (R) any permitted contest referred to in
Section 13 hereof, (S) any claims for patent, trademark, trade name or
copyright infringement or (T) any violation by the Lessee of any
Operative Document or any Related Contracts or any other contract or
agreement to which the Lessee is a party, or of any Insurance
Requirement, in each case affecting any Indemnified Party, any of the
Equipment or any Applicable Site or any portion thereof or the
ownership, operation, occupancy, possession, use, non-use or condition
thereof, in each case regardless of the acts, omissions or negligence
of any Indemnified Party, it being the intent of the Lessee to
indemnify the Indemnified Parties for their own negligent acts or
omissions (other than gross negligence or wilful misconduct) in
connection with any of the foregoing (collectively, the "Indemnified
Risks"); provided, however, that no Indemnified Party shall be
entitled to indemnity (or any other payment or reimbursement) for any
Indemnified Risks to the extent such Indemnified Risks result from or
arise out of one or more of the following: (1) any representation or
warranty by such Indemnified Party in the Operative Documents being
incorrect; (2) the willful misconduct or gross negligence of such
Indemnified Party; and (3) any claim for economic losses based upon
the rate of return under this Lease.
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(ii) If any cause of action, suit, proceeding or
claim arising from any of the foregoing is brought against any
Indemnified Party, whether such action, proceeding, suit or claim
shall be actual or threatened, or in preparation therefor, the Lessee
will have the right, at its expense, to assume the resistance and
defense of such cause of action, suit, proceeding or claim or cause
the same to be resisted and defended; provided that such Indemnified
Party shall be entitled (but not obligated) to participate jointly in
such defense, in which case such Indemnified Party will be responsible
for its own legal fees or other expenses, if any, related to such
defense incurred subsequent to the joint participation by such party
in such defense. Notwithstanding the foregoing, if any Indemnified
Party shall have been advised by counsel chosen by it that there may
be one or more legal defenses available to such Indemnified Party that
are different from or additional to those available to the Lessee, the
Indemnified Party may assume the defense of such action and the Lessee
agrees to reimburse such Indemnified Party for the reasonable fees and
expenses of any counsel retained by the Indemnified Party. the Lessee
may settle any action which it defends hereunder on such terms as it
may deem advisable in its sole discretion, subject to its ability
promptly to perform in full the terms of such settlement. No
Indemnified Party may seek indemnification or other reimbursement or
payment, including attorneys' fees or expenses, from the Lessee for
any cause of action, suit, proceeding or claim settled, compromised or
in any way disposed of by the Indemnified Party without the Lessor's
prior written consent, which will not be unreasonably withheld.
(iii) The obligations of the Lessee under this
Section 31(k) shall survive the expiration or any termination of this
Lease (whether by operation of law or otherwise) and the payment of
amounts owed by the Lessee under this Lease and the other Operative
Documents.
(iv) Upon demand for payment by any Indemnified
Party of any Indemnified Risks incurred by it for which
indemnification is sought, the Lessee shall pay when due and payable
the full amount of such Indemnified Risks to the appropriate party,
unless and only so long as: (A) the Lessee shall have assumed the
defense of such action and is diligently prosecuting the same; (B) the
Lessee is financially able to pay all its obligations outstanding and
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asserted against the Lessee at that time, including the full amount of
the Indemnified Risks; and (C) the Lessee has taken all action as may
be reasonably necessary to prevent (1) the collection of such
Indemnified Risks from the Indemnified Party; (2) the sale, forfeiture
or loss of the Equipment or any portion thereof during such defense of
such action; and (3) the imposition of any civil or criminal liability
for failure to pay such Indemnified Risks when due and payable.
(v) The Lessee acknowledges and agrees that its
obligations under this Section 31(k) are intended to include and
extend to any and all liabilities, Liens, losses, obligations, claims,
damages (including, without limitation, penalties, fines, court costs
and administrative service fees), penalties, demands, causes of
action, suits, proceedings (including any investigations, litigation
or inquiries), judgments, orders, sums paid in settlement of claims,
costs and expenses (including, without limitation, response and
remediation costs, stabilization costs, encapsulation costs, and
treatment, storage or disposal costs), imposed upon or incurred by or
asserted at any time against any Indemnified Party (whether or not
indemnified against by any other party) as a result of, arising
directly or indirectly out of or in any way related to (1) the
treatment, storage, disposal, generation, use, transport, movement,
presence, release, threatened release, spill, installation, sale,
emission, injection, leaching, dumping, escaping or seeping of any
hazardous substance or material containing or alleged to contain
hazardous substance at or from any of the Equipment or any Applicable
Site or any part thereof; (2) the violation or alleged violation of
any Environmental Laws relating to or in connection with any of the
Equipment or any Applicable Site or any part thereof or any acts or
omissions thereon or relating thereto; (3) all other federal, state
and local laws designed to protect the environment or persons or
property therein, whether now existing or hereinafter enacted,
promulgated or issued by any governmental authority relating to or in
connection with any of the Equipment or any Applicable Site or any
part thereof or any acts or omissions thereon or relating thereto; (4)
the Lessee's failure to comply with its obligations under Section 7
hereof; and (5) any abandonment of any of the Equipment or any
Applicable Sites by the Lessee; provided, however that no Indemnified
Party shall be entitled to indemnity or any other payment or
reimbursement
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for any of the types of claims enumerated in this Section 31(k) to the
extent such claims result from or arise out of the willful misconduct
or gross negligence of such Indemnified Party; and (ii) the
indemnification provided for under this Section 31(k)(v) shall be
governed by the procedures set forth in Sections 31(k)(ii)-(iv) above.
(vi) Without limiting the generality of the
foregoing provisions of this Section 31(k), the Lessee agrees to pay
or reimburse, promptly upon demand, and protect, indemnify and save
harmless, the Lessor, following the occurrence of a Termination Event,
from any action by any Sublessee or other owner of an interest in the
Equipment (other than a Co-Lessee) which causes the Lessor any delay
in exercising its remedies, or results in the reduction of the
Lessor's remedies hereunder.
(vii) In case any action shall be brought against
any Indemnified Party in respect of which indemnity may be sought
against the Lessee, such Indemnified Party shall promptly notify the
Lessee in writing, but the failure to give such prompt notice shall
not relieve the Lessee from liability hereunder.
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IN WITNESS WHEREOF, the parties have caused this Lease to be
executed by their respective officers thereunto duly authorized as of the date
first above written.
LESSOR:
WACHOVIA LEASING CORPORATION
By:
----------------------------
Title:
LESSEE:
FLOWERS INDUSTRIES, INC.
By:
----------------------------
Title:
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SCHEDULE 1(b)
Defined Terms
The following terms shall have the following meanings (all terms defined in the
singular to have the same meanings when used in the plural and vice versa):
"Acquisition Agent": Lessee, in its capacity as Acquisition
Agent for the Lessor under the Agency Agreement.
"Acquisition Date": as to each Phase, as defined in Section
28(c)(i) of the Lease.
"Acquisition Period": a period commencing on the Closing
Date and ending 12 months after the Closing Date.
"Additional Rent": as to any Phase as to which a Progress
Payment Agreement has been executed, as defined in such Progress Payment
Agreement.
"Affiliate": with respect to the Lessor, (i) any Person that,
directly or indirectly, through one or more intermediaries, controls the Lessor
(a "Controlling Person"), (ii) any Person (other than the Lessor or a
Subsidiary) which is controlled by or is under common control with a
Controlling Person, or (iii) any Person (other than a Subsidiary) of which the
Lessor owns, directly or indirectly, 20% of more of the common stock or
equivalent equity interests. As used herein, the term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
"Agency Agreement": the Acquisition, Agency, Indemnity
and Support Agreement, of even date with the Lease, between the Lessor and the
Lessee, as Acquisition Agent, substantially in the form of Exhibit A to the
Lease, as amended, supplemented or otherwise modified from time to time.
"Applicable Funding Office": for each Participant, the
funding office of such Participant (or an affiliate of such Participant)
designated for any interest of such Participant in Interim Rent or Basic Rent
in the participation agreement with the Lessor or such other offices of such
Participant (or of an
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affiliate of such Participant) as such Participant may from time to time
specify to the Lessor as the office by which its interest in Interim Rent and
Basic Rent, as applicable, are to be made and maintained.
"Applicable Permit": for each Phase, any Permit that is or
may be necessary to own, renovate, install, start-up, test, maintain, operate,
lease or use all or any part of the Equipment for such Phase or any portion
thereof in accordance with the Operative Documents, and the failure to obtain
or maintain which would have a Material Adverse Effect.
"Applicable Site": with respect to any Phase, the
manufacturing site or facility on which the Equipment subject to this Lease for
such Phase is to be located, as identified in the Lease Supplements pertaining
to such Phase.
"Approved Appraisal": any appraisal, obtained on behalf of
the Lessor by the Acquisition Agent pursuant to the Agency Agreement, but at
the Lessee's cost, from an appraiser or appraisers reasonably acceptable to the
Lessor and the Lessee, which: (i) is performed by an equipment appraiser
experienced in the appraisal of manufacturing equipment similar in type to the
Equipment, (ii) reflects the fair market value of the Equipment for each Phase
as of the end of the Acquisition Period on an "as installed" basis, (iii)
forecasts the Estimated Residual of the Equipment for each Phase as of the end
of each Rental Period for such Phase and (iv) has been approved in all respects
by the Lessor.
"Authorized Officers": relative to the Lessee, the officers
whose signatures and incumbency shall have been certified to the Lessor in a
certificate certified by its Secretary in form and substance satisfactory to
the Lessor.
"Banking Authority": as defined in Section 27(b) of the
Lease.
"Base Rate": for any day, the rate per annum equal to the
higher as of such day of (i) the Prime Rate, and (ii) one-half of one percent
above the Federal Funds Rate. For purposes of determining the Base Rate for any
day, changes in the Prime Rate shall be effective on the date of each such
change.
"Basic Rent": for each Phase, with respect to any Rental
Period, the amounts payable for such Phase as Basic Rent
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for such Rental Period pursuant to Section 3(b) of the Lease, consisting of the
sum of the Scheduled Payment and either the Floating Rate Payment or, if the
Election has been made, the Fixed Rate Payment.
"Book Net Worth": the book value of the Lessee's and its
Subsidiaries' total assets (exclusive of any indebtedness owned to the Lessee
or its Consolidated Subsidiaries by any affiliates of the Lessee), plus
Convertible Subordinated Debt, minus the Lessee's and its Consolidated
Subsidiaries' total liabilities.
"Book Value": for each Phase, as at any date of determination
with respect to the Equipment for such Phase or any Property comprising or
included in the Equipment for such Phase, the aggregate Funded Amount through
such date of determination to purchase, manufacture, construct, assemble or
install the Equipment for such Phase or any portion thereof.
"Business Day": (a) for all purposes other than as covered by
clause (b) below, any day except Saturday, Sunday or other day on which
commercial banks in Atlanta, Georgia are authorized or required by law or other
government action to close, and (b) with respect to all notices and
determinations in connection with Interim Rental Periods and Rental Periods,
and payments of Interim Rent or Basic Rent, any day that is a Business Day
described in clause (a) above and that is also a day for trading by and between
banks in the London interbank eurodollar market.
"Cancellation Date": as defined in Section 15(b) of the
Lease.
"Cancellation Event": as defined in Section 15(b) of the
Lease, and shall include a Loss Event.
"Capital Stock": any nonredeemable capital stock of the
Lessee or any Consolidated Subsidiary (to the extent issued to a Person other
than the Lessee) whether common or preferred.
"Casualty Occurrence": for each Phase, any of the following
events in respect of the Equipment for such Phase (i) any material loss of the
Equipment for such Phase or material loss of use thereof which does not
constitute a Loss Event, or (ii) the condemnation, confiscation, condemnation
or seizure of, or requisition of title to or use of, any material part of the
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Equipment for such Phase which action does not constitute a Loss Event.
"CERCLIS": the Comprehensive Environmental Response
Compensation and Liability Inventory System established pursuant to CERCLA.
"Change of Law": as defined in Section 27(b) of the Lease.
"Closing Date": October 20, 1995.
"Code": the Internal Revenue Code of 1986, as amended, and
any successor Federal tax code.
"Collateral": as defined in Section 26 of the Lease.
"Co-Lessee": as defined in Section 21(b) of the Lease.
"Completion": for each Phase, the occurrence and satisfaction
of all of the events and conditions described on Schedule 1.3(b) to the Agency
Agreement on a single date to the reasonable satisfaction of the Lessor.
"Completion Certificate": for each Phase, a certificate of
the Acquisition Agent in substantially the form of Exhibit A to the Agency
Agreement, certifying that Completion of the Equipment for such Phase has
occurred.
"Consolidated Operating Profits": for any period, the
Operating Profits of the Lessee and its Consolidated Subsidiaries.
"Consolidated Subsidiary": a Subsidiary, the accounts of
which are customarily consolidated with those of the Lessee for the purpose of
reporting to stockholders of the Lessee or, in the case of a recently acquired
Subsidiary, the accounts of which would, in accordance with the Lessee's
regular practice, be so consolidated for that purpose.
"Consolidated Total Assets": at any time, the total assets
of the Lessee and its Consolidated Subsidiaries, determined on a consolidated
basis, as set forth or reflected on the most recent consolidated balance sheet
of the Lessee and its Consolidated Subsidiaries, prepared in accordance with
GAAP and
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delivered to the Lessor pursuant to Section 30(a)(i) or (ii) of the Lease.
"Controlled Group": all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Lessee, are treated as a single
employer under Section 414 of the Code.
"Debt": at any date, without duplication, (i) all obligations
of such Person for borrowed money, (ii) all obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments, (iii) all
obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business, (iv) all obligations of such Person as lessee under capital leases,
(v) all obligations of such Person to reimburse any bank or other Person in
respect of amounts payable under a banker's acceptance, (vi) all Redeemable
Preferred Stock of such Person (in the event such Person is a corporation),
(vii) all obligations of such Person to reimburse any bank or other Person in
respect of amounts paid under a letter of credit or similar instrument, (viii)
all Debt of others secured by a Lien on any asset of such Person, even though
such Debt is not assumed by such Person, (ix) all Debt of others Guaranteed by
such Person, and (x) amounts of any reserves for doubtful accounts recorded on
the books of such Person for leases, receivables and other accounts sold,
factored or otherwise disposed of by such Person; provided, that in no event
shall "Debt" include any Factored Receivables Obligations.
"Default": any condition or event that constitutes an Event
of Default or that with the giving of notice or the lapse of time or both
would, unless cured or waived, become an Event of Default.
"Default Rate": with respect to any amount payable under the
Lease or under any of the other Operative Documents on any day, the sum of 2%
plus the greater of (i) the then highest rate (for determining Interim Rent, or
the Floating Rate or the Fixed Rate, as applicable) that may be applicable to
the amount payable or (ii) if no such rate exists, the Prime Rate in effect
from time to time.
"Designated Event of Default": any of the Events of Default
specified in Section 17(a) of the Lease, other than an
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Event of Default described in (x) clause (ii) thereof, insofar as it relates to
Section 30(d) of the Lease, and (y) clause (viii) thereof.
"Dollars" and "$": dollars in lawful currency of the United
States of America.
"Election": for each Phase, as defined in Section 3(b)(i)
of the Lease.
"Election Period": for each Phase, as defined in Section
3(b)(i) of the Lease.
"Environmental Authority": any foreign, federal, state,
local or regional government that exercises any form of jurisdiction or
authority under any Environmental Requirement.
"Environmental Damages": any and all losses, costs, damages,
penalties and expenses which are incurred at any prior or subsequent time as a
result of the existence of Hazardous Materials upon, about or beneath the
Equipment for any Phase or any Applicable Site or migrating or threatening to
migrate to or from the Equipment for any Phase or any Applicable Site or the
existence of a violation of Environmental Requirements pertaining to the
Equipment for any Phase or any Applicable Site, regardless of whether the
existence of such Hazardous Materials or the violation of Environmental
Requirements arose prior to the present ownership or operation of the Equipment
for any Phase or any Applicable Site.
"Environmental Judgments and Orders": all judgments, decrees
or orders arising from or in any way associated with any Environmental
Requirements, whether or not entered upon consent or written agreements with an
Environmental Authority or other entity arising from or in any way associated
with any Environmental Requirement, whether or not incorporated in a judgment,
decree or order.
"Environmental Liabilities": any liabilities, whether
accrued, contingent or otherwise, arising from and in any way associated with
any Environmental Requirements.
"Environmental Notices": notice from any Environmental
Authority of possible or alleged noncompliance with or liability under any
Environmental Requirement, including without limitation any complaints,
citations, demands or requests from any
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Environmental Authority for correction of any violation of any Environmental
Requirement or any investigations concerning any violation of any Environmental
Requirement.
"Environmental Proceedings": any judicial or administrative
proceedings arising from or in any way associated with any Environmental
Requirement.
"Environmental Releases": any actual or threatened spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, dumping or disposing of a Hazardous Material into the
environment, including, but not limited to any releases defined in CERCLA or
under any state or local environmental law or regulation.
"Environmental Requirements": any and all federal, state,
local, and foreign laws, statutes, ordinances, orders, codes, rules,
regulations, policies, guidance documents, judgments, decrees, injunctions,
decisions, determinations, or agreements by any judicial, legislative or
executive body of any governmental or quasi-governmental entity, whether in the
past, the present or the future, with respect to: (1) the protection of the
environment; (2) the existence, handling, use, generation, treatment, storage,
packaging, labelling, removal or Environmental Release of Hazardous Materials
on, under, about and/or from the Equipment or Applicable Site for any Phase;
and (3) the effects on the environment of the Equipment or Applicable Site for
any Phase or of any activity now, previously, or hereinafter conducted on the
Equipment or Applicable Site for any Phase. The Environmental Requirements
shall include, but not be limited to, the following: the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C. ▇▇.▇▇. 9601,
et seq.)("CERCLA"); the Superfund Amendments and Reauthorization Act, Public
Law 99-499, 100 Stat. 1613; the Resource Conservation and Recovery Act, 42
U.S.C. ▇▇.▇▇. 6901, et seq.; the Toxic Substances Control Act, 15 U.S.C. ▇▇.▇▇.
2601, et seq.; the Federal Water Pollution Control Act, 33 U.S.C. ▇▇.▇▇. 1251,
et seq.; the Clean Air Act, 42 U.S.C. ▇▇.▇▇. 7401, et seq.; the state and local
analogies thereto, all as amended or superseded from time to time; and any
common-law doctrine, including but not limited to, negligence, nuisance,
trespass, personal injury, or property damage related to or arising out of the
presence, Environmental Release or exposure to a Hazardous Material.
"Equipment": individually, as to each Phase, the Equipment
described in each Lease Supplement pertaining to such
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Phase, together with all plans, specifications, warranties and related rights
and operating, maintenance and repair manuals related thereto and all
replacements of any of the foregoing, and collectively, all such Equipment.
"Equipment Cost": with respect to each Phase, an aggregate
amount equal to the sum of (i) all costs associated with the Lessor's
acquisition of title to the Equipment for such Phase, (ii) all of the Soft
Costs incurred in connection with such Phase and (iii) all Interim Rent accrued
prior to the Phase Completion Date for such Phase.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time, or any successor law and the regulations
promulgated and rulings issued from time to time thereunder. Any reference to
any provision of ERISA shall also be deemed to be a reference to any successor
provision or provisions thereof.
"Estimated Residual": the estimated fair market value of the
Equipment for each Phase as of the end of each Rental Period for such Phase, as
set forth on Schedule 3(b) to the Lease, as it may be modified pursuant to
Section 3(b) of the Lease as a result of an Approved Appraisal.
"Eurocurrency Liabilities": as defined in Regulation D of the
Board of Governors of the Federal Reserve System, as in effect from time to
time.
"Eurodollar Reserve Requirement": any reserve requirement
prescribed by the Board of Governors of the Federal Reserve System (or any
successor) for a member bank of the Federal Reserve System in respect of
"Eurocurrency liabilities" (or in respect of any other category of liabilities
which includes deposits by reference to which the interest rate on loans made
at the LIBO Rate) is determined or any category of extensions of credit or
other assets.
"Event of Default": as defined in Section 17 of the Lease.
"Existing Term Loan Agreement" means the Term Loan Agreement
between Wachovia and the Lessee dated July 1, 1995.
"Factored Receivables Obligations": any recourse or
non-recourse obligation, guarantee or other contractual
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undertaking of the Lessee or any Subsidiary arising in connection with the
sale, factoring or other disposition of leases, receivables or other accounts,
if such sale, factoring or disposition, whether with or without recourse, is
for a fair price (on the basis of the face amount of the respective item, on
the basis of the present value or its income stream or on the basis of another
arms' length determination) together with the interests of the seller of such
lease, receivable or other account in the equipment or other property related
to such lease, receivable or other account, and not at a distress sale or other
"deep" discount.
"Federal Funds Rate": for any day, the rate per annum
(rounded upward, if necessary, to the next higher 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day, provided that (i) if the day for which such rate is
to be determined is not a Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Business Day, and
(ii) if such rate is not so published for any day, the Federal Funds Rate for
such day shall be the average rate charged to the Lessor on such day on such
transactions, as determined by the Lessor.
"Final Rent Payment": for each Phase, an amount determined as
of the date payment thereof is required equal to the sum of (i) the Recourse
Amount for such Phase, plus (ii) all other amounts owing by the Lessee under
the Operative Documents (including in any event all unpaid Impositions accrued,
arising or payable in connection with the Equipment for such Phase or otherwise
pursuant to the Lease through or as at the end of the Lease Term, and all
unpaid Supplemental Rent, but excluding in any event the Non-Recourse Amount).
"Fiscal Quarter": any fiscal quarter of the Lessee.
"Fiscal Year": any fiscal year of the Lessee.
"Fixed Rate": with respect to Basic Rent for each Phase, if
the Election has been made for such Phase, for each Rental Period, a rate per
annum equal to the sum of (i) the prevailing 5 year U.S. Treasury Rate as
defined on page 500 of the Telerate Screen at 11:00 A.M., Atlanta time, on the
date of the Election for such Phase, plus (ii) the lesser of (A) the
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corresponding ask side of the 5 year swap rate as defined on page 19901 of the
Telerate Screen at 11:00 A.M., Atlanta time, on such date, and (B) 0.55%, plus
(ii) 0.45%.
"Fixed Rate Payment": for each Phase, as defined in Section
3(b)(ii) of the Lease.
"Floating Rate": with respect to Basic Rent for each Phase,
if the Election has not been made or become effective for such Phase, for each
Rental Period, a rate per annum equal to the sum of (i) the LIBO Rate
prevailing on the first day of such Rental Period, plus (ii) 0.45%.
"Floating Rate Payment": for each Phase, as defined in
Section 3(b)(i) of the Lease.
"Funded Amount": for each Phase, the aggregate amount of
Equipment Cost for such Phase, accrued and unpaid Rent for such Phase and all
other amounts owed by the Lessee to the Lessor with respect to such Phase
pursuant to this Lease or any other Operative Document.
"GAAP": generally accepted accounting principles in the
United States of America as in effect from time to time; provided that for
purposes of determining compliance with the terms of the Lease, the Lessee and
the Lessor agree that in the event of any change in GAAP from that in effect on
the date of the financial statements referred to in Section 30(a) of the Lease
which has the effect of weakening the protection afforded the Lessor by the
Lessee's covenants in the Lease, the Lessee and the Lessor shall amend the
Lease and such covenants in order to provide the Lessor an equivalent level of
protection, in a manner satisfactory to the Lessor.
"Governmental Authority": to include the country, state,
county, city and political subdivisions in which any Person or any such
Person's property is located or that exercises valid jurisdiction over any such
Person or any such Person's property, and any court, agency, department,
commission, board, bureau or instrumentality of any of them including monetary
authorities that exercise valid jurisdiction over any such Person or any such
Person's property. Unless otherwise specified, all references to Governmental
Authority herein shall mean a Governmental Authority having jurisdiction over,
where applicable, the Lessee, any Applicable Site, the Equipment for
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any Phase, the Lessee, any Participant, any Applicable Funding Office or any
Operative Document.
"Governmental Requirement": any law, statute, code, ordinance,
order, determination, rule, regulation, judgment, decree, injunction,
franchise, permit, certificate, license, authorization or other direction or
requirement (whether or not having the force of law), including, without
limitation, Environmental Requirements, and occupational, safety and health
standards or controls, of any Governmental Authority.
"Guarantee": with respect to any Person, any obligation,
contingent or otherwise, of such Person directly or indirectly guaranteeing any
Debt or other obligation of any other Person and, without limiting the
generality of the foregoing, any obligation, direct or indirect, contingent or
otherwise, of such Person (i) to secure, purchase or pay (or advance or supply
funds for the purchase or payment of) such Debt or other obligation (whether
arising by virtue of partnership arrangements, by agreement to keep-well, to
purchase assets, goods, securities or services, to provide collateral security,
to take-or-pay, or to maintain financial statement conditions or otherwise) or
(ii) entered into for the purpose of assuring in any other manner the obligee
of such Debt or other obligation of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part), provided that
the term Guarantee shall not include endorsements for collection or deposit in
the ordinary course of business. The term "Guarantee" used as a verb has a
corresponding meaning.
"Hazardous Materials": to include, without limitation, (a)
solid or hazardous waste, as defined in the Resource Conservation and Recovery
Act of 1980, 42 U.S.C. ss. 6901 et seq. and its implementing regulations and
amendments, or in any applicable state or local law or regulation, (b)
"hazardous substance", "pollutant", or "contaminant" as defined in CERCLA, or
in any applicable state or local law or regulation, (c) gasoline, or any other
petroleum product or by-product, including, crude oil or any fraction thereof,
(d) toxic substances, as defined in the Toxic Substances Control Act of 1976,
or in any applicable state or local law or regulation, (e) insecticides,
fungicides, or rodenticides, as defined in the Federal Insecticide, Fungicide,
and Rodenticide Act of 1975, or in any applicable state or local law or
regulation, as each such Act, statute or regulation may be amended from time to
time, or (f) any toxic or hazardous materials, wastes, polychlorinated
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biphenyls ("PCBs"), lead-containing materials, urea formaldehyde, radioactive
materials, pesticides, the discharge of sewage or effluent, or any other
materials or substances defined as or included in the definition of "hazardous
materials," "hazardous waste," "contaminants" or similar terms under any
Environmental Requirement.
"Highest Lawful Rate": with respect to the Lessor, the
maximum non-usurious interest rate or yield, as applicable, if any, that at any
time or from time to time may be contracted for, taken, reserved, charged or
received with respect to any amounts owing hereunder under laws applicable to
the Lessor which are presently in effect or, to the extent allowed by law,
under such applicable laws which may hereafter be in effect and which allow a
higher maximum non-usurious interest rate than applicable laws now allow.
"Impositions": without duplication, as to any Person, (i) all
taxes, assessments, levies, fees, inspection fees and other authorization fees
and all other governmental charges, general and special, ordinary and
extraordinary, foreseen and unforeseen, of every character (including all
penalties and interest thereon) that, at any time prior or subsequent to the
Closing Date, are imposed or levied upon or assessed against or may be or
constitute a Lien upon such Person or such Person's Property, or that arise in
respect of the ownership, operation, possession, use, non-use, condition,
leasing or subleasing of such Person's Property; (ii) all charges, levies,
fees, rents or assessments for or in respect of utilities, communications and
other services rendered or used on or about such Person's Property; (iii)
payments required in lieu of any of the foregoing; but excluding any penalties
or fines imposed on the Lessor for violation by it of any banking laws or
securities law; and (iv) any and all taxes, recording fees and other charges
(including penalties and interest) relating to or arising out of the execution,
delivery or recording of any of the Operative Documents for the amounts
evidenced, secured or referred to be paid thereby, including without
limitation, documentary stamp taxes, intangible taxes, recording fees and
sales, rent and other Taxes.
"Indemnified Party": as defined in Section 31(k)(i) of the
Lease.
"Indemnified Risks": as defined in Section 31(k)(i) of the
Lease.
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"Insurance Requirements": all terms of any insurance policy
(including, without limitation, casualty and general liability) covering or
applicable to the Equipment for any Phase or any portion thereof maintained in
accordance with Section 14 of the Lease, and all requirements of the issuer of
any such policy.
"Interim Rent": for each Phase, with respect to any Interim
Rental Period, the amounts payable for such Phase as Interim Rent for such
Interim Rental Period pursuant to Section 3(a) of the Lease.
"Interim Rental Period": with respect to Interim Rent
pertaining to any Phase, the period beginning on the Phase Commencement Date
for such Phase and ending on the numerically corresponding date (or, if
applicable, last calendar date) which is either one, two or three months
thereafter, as selected by the Lessee upon at least 3 Business Days notice and,
thereafter, each subsequent period commencing on the last day of the
immediately preceding Interim Rental Period and ending on the numerically
corresponding date (or, if applicable, last calendar date) which is either one,
two or three months thereafter, as selected by the Lessee upon at least 3
Business Days notice; provided, however, that:
(i) no Interim Rental Period may be selected which commences
before the Phase Completion Date and would otherwise end after the
Phase Completion Date;
(ii) if the last day of such Interim Rental Period would
otherwise occur on a day which is not a Business Day, such last day
shall be extended to the next succeeding Business Day, except if such
extension would cause such last day to occur in a new calendar month,
then such last day shall occur on the next preceding Business Day.
"Judgment": any judgement, decree, writ, order, rule or other
requirement of any arbitrator or any court, tribunal or other Governmental
Authority.
"Lease": the Master Lease Agreement to which this Schedule
1(b) is attached (as the same may be amended, modified or supplemented from
time to time, between the Lessee and the Lessor.
"Lease Commencement Date": the Closing Date.
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"Lease Addition Date": with respect to the Equipment for any
Phase, the date of satisfaction of the conditions set forth in Section 28(c) of
the Lease with respect thereto.
"Lease Supplement" with respect to each Phase, a Lease
Supplement in substantially the form of Exhibit C to the Lease, and containing
the information required thereby.
"Lease Term": for each Phase, the period of time commencing
on the Phase Commencement Date for such Phase and ending on the Lease
Termination Date for such Phase.
"Lease Termination Date": for each Phase, the earlier
to occur of (i) the Option Date for such Phase, (ii) the Cancellation Date
(iii) the date of termination for such Phase as a result of a Termination Event
and (iv) the Scheduled Lease Termination Date for such Phase.
"Lessee": Flowers Industries, Inc., a Georgia corporation,
together with its successors and permitted assigns.
"Lessor": Wachovia Leasing Corporation, a North Carolina
corporation, together with its successors and permitted assigns.
"LIBO Rate": with respect to any Interim Rent or Basic Rent
for the applicable Interim Rental Period or Rental Period therefor, the rate
per annum determined on the basis of the offered rate for deposits in Dollars
of amounts equal or comparable to the amount of such Interim Rent or Basic Rent
offered for a term comparable to such Interim Rental Period or Rental Period,
which rates appear on the Reuters Screen LIBO Page as of 11:00 A.M., London
time, two Business Days prior to the first day of such Interim Rental Period or
Rental Period, provided that (i) if more than one such offered rate appears on
the Reuters Screen LIBO Page, the "LIBO Rate" will be the arithmetic average of
such offered rates; (ii) if no such offered rates appear on such page, the
"LIBO Rate" for such Interim Rental Period or Rental Period will be the
arithmetic average (rounded upward, if necessary, to the next higher 1/100th of
1%) of rates quoted by not less than two major banks in New York City, selected
by the Lessee, at approximately 10:00 A.M., New York City time, two Business
Days prior to the first day of such Interim Rental Period or Rental Period, for
deposits in Dollars offered to leading European banks for a period comparable
to such
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Interim Rental Period or Rental Period in an amount comparable to the amount of
such Interim Rent or Basic Rent.
"Lien": with respect to any asset, any mortgage, deed to
secure debt, deed of trust, lien, pledge, charge, security interest, security
title, preferential arrangement which has the practical effect of constituting
a security interest or encumbrance, or encumbrance or servitude of any kind in
respect of such asset to secure or assure payment of a Debt or a Guarantee,
whether by consensual agreement or by operation of statute or other law, or by
any agreement, contingent or otherwise, to provide any of the foregoing. For
the purposes of this definition, the Lessee or any Subsidiary shall be deemed
to own subject to a Lien any asset which it has acquired or holds subject to
the interest of a vendor or lessor under any conditional sale agreement,
capital lease or other title retention agreement relating to such asset.
Notwithstanding the foregoing, in no event shall any of the following be deemed
to be a "Lien" on any assets or other properties of any Person: (1) filings of
financing statements in respect of operating leases of such Person, sales of
(and not merely security interests in) leases, receivables and other accounts
and of the equipment or other property related to such accounts, and other
similar filings of a precautionary nature, (2) the interest of a lessee in the
property subject to a lease under which such Person is the lessor, or (3) the
interest of the purchaser or factor of leases, receivables or other accounts of
such Person in the leases, receivables or accounts sold, factored or otherwise
disposed of, or in the related equipment or other property that is the subject
of such lease, receivable or account, even if described as a Lien in the
instrument pursuant to which such sale, factoring or other disposition is
effected.
"Loss Event": for each Phase, any of the following events in
respect of the Equipment for such Phase: (i) the total loss of the Equipment
for such Phase or the total loss of use thereof due to theft, disappearance,
destruction, damage beyond repair or rendition of the Equipment for such Phase
permanently unfit for normal use for any reason whatsoever; (ii) any damage to
the Equipment for such Phase which results in an insurance settlement with
respect to the Equipment for such Phase on the basis of a total loss; (iii) the
permanent condemnation, confiscation or seizure of, or requisition of title to
or use of, all or substantially all of the Equipment for such Phase including,
but not limited to, a permanent taking by eminent domain of such scope that the
untaken portion of the Equipment
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for such Phase is insufficient to permit the restoration of the Equipment for
such Phase for such Phase for continued use in the Lessee's business or that
causes the remaining portion of the Equipment for such Phase to be incapable of
being restored to a condition that would permit the remaining portion of the
Equipment for such Phase (without the portion of the Equipment for such Phase
taken by eminent domain) to continue to have the capacity and functional
ability to perform on a continuing basis (subject to normal interruptions in
the ordinary course of business for maintenance, inspection, service, repair
and testing) and in commercial operation, the function for which the Equipment
for such Phase (as a whole) was designed or a temporary taking of such nature
for a period exceeding 180 consecutive days; or (iv) the occurrence of any
event or the discovery of any condition in, on, beneath or involving the
Equipment for such Phase or any portion thereof (including, but not limited to
the presence of hazardous substances or the violation of any applicable
Environmental Requirement) that would have a material adverse effect on the
use, occupancy, possession, condition, value or operation of the Equipment for
such Phase or any portion thereof, which event or condition requires
remediation (A) the cost of which is anticipated, in the opinion of the Lessor,
in consultation with an independent environmental engineering firm, to exceed
16% of the Termination Value, and (B) that could not reasonably be expected to
be completed substantially in its entirety prior to the date that is 30 days
prior to the Scheduled Lease Termination Date for such Phase or is not actually
completed substantially in its entirety on or before the date that is 30 days
prior to the Scheduled Lease Termination Date for such Phase.
"Margin Stock": "margin stock" as defined in Regulations
U or G of the Board of Governors of the Federal Reserve System, as in effect
from time to time.
"Material Adverse Effect": with respect to any event, act,
condition or occurrence of whatever nature (including any adverse determination
in any litigation, arbitration, or governmental investigation or proceeding),
whether singly or in conjunction with any other event or events, act or acts,
condition or conditions, occurrence or occurrences, whether or not related, a
material adverse change in, or a material adverse effect upon, any of (a) the
financial condition, operations, business, or properties which are central to
the business at such time, of the Lessee and its Consolidated Subsidiaries
taken as a whole, (b) the ability of the Lessee (in its capacity as such or
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in its capacity as Acquisition Agent) to perform its respective obligations
under the Operative Documents to which it is a party, as applicable, (c) the
legality, validity or enforceability of any Operative Document, or (d) the use,
possession, condition, value or operation of the Equipment for any Phase.
"Material Subsidiary": as of each date of determination, any
Consolidated Subsidiary (i) whose consolidated total assets exceed 5% of
Consolidated Total Assets or (ii) whose consolidated total revenues exceed 5%
of the consolidated revenues of the Lessee and its Consolidated Subsidiaries
determined in accordance with GAAP as of the last day of the Fiscal Quarter of
the Lessee most recently ended as of such date of determination and for which
financial statements have been delivered to the Lessor pursuant to Section
30(a)(i) and (ii) of the Lease.
"Non-Completion Event": as to any Phase, the failure of
Completion to occur on or before the earlier of (i) the date which is six
months after the Phase Commencement Date for such Phase and (ii) the last day
of the Acquisition Period.
"Non-Designated Event of Default": any Event of Default
other than a Designated Event of Default.
"Non-Recourse Amount": for each Phase, means at any time an
amount equal to 16.0% of the aggregate original Equipment Cost for such Phase,
as such amount may be modified pursuant to Section 3(b) of the Lease as a
result of an Approved Appraisal.
"Operative Documents": collectively, the Lease, the Agency
Agreement, each Progress Payment Agreement and any and all other agreements or
instruments now or hereafter executed and delivered, or required to be executed
and delivered, by the Lessor or the Lessee in connection with the Lease or the
Agency Agreement, as such agreements or instruments may be amended,
supplemented, renewed, extended, increased or otherwise modified from time to
time.
"Operating Profits": as applied to any Person for any period,
the operating income of such Person for such period, as determined in
accordance with GAAP.
"Option Date": as defined in Section 15(c) of the Lease.
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"Participant": as defined in Section 21(d) of the Lease,
collectively, as the context shall require, "Participants".
"PBGC": the Pension Benefit Guaranty Corporation or any
successor thereto.
"Permit": any approval, consent, waiver, exemption, variance,
franchise, order, permit, authorization, right or license of or from any
Governmental Authority or other Person.
"Permitted Insurers": insurers with ratings of A or better
and Class VIII or better according to Best's Insurance Reports, or other
insurers acceptable to the Lessor.
"Permitted Liens": (i) with respect to any Property other
than the Equipment, any of the Liens permitted by the terms of Section 30(q),
and (ii) with respect to the Equipment or any Property included in or
comprising the Equipment or any portion thereof, any of the following:
(a) rights reserved to or vested in any Governmental
Authority by the terms of any right, power, franchise, grant, license,
permit or provision of law affecting the Equipment to (1) terminate,
or take any other action which has the effect of modifying, such
right, power, franchise, grant, license, permit or provision of law,
provided that such termination or other action, when taken, shall not
have resulted in a Loss Event and shall not have had a Material
Adverse Effect, or (2) purchase, condemn, appropriate or recapture, or
designate a purchaser of, the Equipment;
(b) any Liens thereon for Impositions and any Liens of
mechanics, materialmen and laborers for work or services performed or
materials furnished which (1) are not overdue, or (2) are being
contested in good faith in the manner described in Section 13 of the
Lease;
(c) rights reserved to or vested in any Governmental
Authority to control or regulate the use of such Property or
to use the Equipment in any manner;
(d) in the case of real property, encumbrances, easements,
and other similar rights existing on the Closing
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Date the exercise of which shall not have had a Material Adverse
Effect;
(e) any Liens created under the Operative Documents and any
financing statements filed in connection therewith
(f) pledges or deposits to secure non-delinquent obligations
under worker's compensation, unemployment insurance and other social
security legislation; and
(g) Liens arising from legal proceedings, so long as such
proceedings are being contested in good faith by appropriate
proceedings diligently conducted and so long as execution is stayed on
all judgments resulting from any such proceedings.
"Permitted Use": with respect to the Equipment as to any
Phase, the use of the Equipment in connection with its manufacturing operations
on the Applicable Site for such Phase in compliance with all applicable
Governmental Requirements and Insurance Requirements, the failure of which to
comply would have or cause a Material Adverse Effect.
"Person": an individual, a corporation, a partnership,an
unincorporated association, a trust or any other entity or organization,
including, but not limited to, a government or political subdivision or other
Governmental Authority.
"Phase": the acquisition and installation of any and all
Equipment that is to be subject to this Lease and located at a single Applicable
Site.
"Phase Commencement Date": as defined in Section 28(b)of the
Lease.
"Phase Completion Date": with respect to each Phase, the
earlier to occur of (i) Completion of such Phase, (ii) the date which is six
months after the Phase Commencement Date for such Phase, and (iii) the last day
of the Acquisition Period.
"Plan": at any time an employee pension benefit plan which is
covered by Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code and is either (i) maintained by a member of the
Controlled Group for employees of any member of the Controlled Group or (ii)
maintained pursuant to
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a collective bargaining agreement or any other arrangement under which more
than one employer makes contributions and to which a member of the Controlled
Group is then making or accruing an obligation to make contributions or has
within the preceding 5 plan years made contributions but shall not include any
plan which is maintained under the laws of Puerto Rico, is covered by Section
4(b)(4) of ERISA, or is unfunded and maintained primarily for the purpose of
providing deferred compensation for a select group of management, key
executives or highly compensated employees.
"Prime Rate": that rate of interest so denominated and set by
Wachovia from time to time as an interest rate basis for borrowings. The Prime
Rate is but one of several interest rate bases used by Wachovia, and is set by
Wachovia as a general reference rate of interest, taking into account such
factors as Wachovia may deem appropriate, it being understood that many of
Wachovia's commercial or other loans are priced in relation to such rate, that
it is not necessarily the lowest or best rate actually charged to any customer
and that Wachovia may make various commercial or other loans at rates of
interest having no relationship to such rate.
"Progress Payment Agreement": an agreement substantially in
the form of Exhibit E, as amended, supplemented or otherwise modified from time
to time, which may be executed as to any one, more or all Phases pursuant to
Section 3(a) of the Lease.
"Property": any kind of property or asset, whether real,
personal or mixed, or tangible or intangible, and any interest therein.
"Purchase Closing Date": as defined in Section 15(e) of the
Lease.
"Qualified Replacement Term Loan Agreement" means: (i)
either (x) any amendment, renewal or extension of the Existing Term Loan
Agreement or (y) any other term loan agreement between Wachovia and the Lessee,
the proceeds of which are used to refinance the Existing Term Loan Agreement;
and (ii) in either case, which has a final maturity no earlier than the latest
Scheduled Lease Termination Date for any Phase, as it may be amended, renewed
or extended from time to time (so long as the foregoing clause (ii) is
satisfied).
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"Recourse Amount": for each Phase, means at any time the
excess of (i) the Unrecovered Equipment Cost for such Phase over (ii) the
Non-Recourse Amount for such Phase.
"Redeemable Preferred Stock": of any Person means any
preferred stock issued by such Person which is at any time prior to the
Scheduled Lease Termination Date for the Phase having the latest Acquisition
Date during the Acquisition Period either (i) mandatorily redeemable (by
sinking fund or similar payments or otherwise) or (ii) redeemable at the option
of the holder thereof.
"Related Contract": for each Phase, any agreement for the
purchase, manufacture, assembly, or installation of the Equipment for such
Phase or any portion thereof or the provision of enhancements and improvements
to the Equipment for such Phase or any portion thereof or otherwise in
connection with the acquisition, ownership, use, operation or sale or other
disposition of the Equipment for such Phase or any portion thereof made
pursuant to the Agency Agreement by the Lessee as Acquisition Agent on behalf
of the Lessor, with one or more Vendors, including, without limitation, all
contracts, bills of sale, receipts and Vendor's warranties.
"Rent": Basic Rent, Interim Special Rent, Supplemental Rent
and the Final Rent Payment, collectively.
"Rental Period": with respect to Basic Rent pertaining to any
Phase, the period beginning on the Phase Completion Date for such Phase and
ending on the first Rent Payment Date occurring after the Phase Completion Date
and, thereafter, each subsequent period commencing on each Rent Payment Date
and ending on the next Rent Payment Date or on the Lease Termination Date for
such Phase.
"Rent Payment Date": with respect to Basic Rent pertaining to
any Phase, each March 31st, June 30th, September 30th and December 31st of each
year, commencing on the first such date occurring after the Phase Commencement
Date for such Phase, and the Lease Termination Date for such Phase.
"Restoration Account": for any Phase, the interest bearing
account maintained with the Lessor pursuant to Section 14(e) of the Lease and
styled the "Restoration Account" for such Phase.
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"Scheduled Amount": with respect to each Phase, as defined
in Section 3(b)(i) of the Lease.
"Scheduled Lease Termination Date": with respect to each
Phase, the date that is seven (7) years after the Phase Completion Date for
such Phase.
"Scheduled Payment": with respect to each Phase, as defined
in Section 3(b)(i) of the Lease.
"Secured Party": as defined in Section 26 of the Lease.
"Soft Costs": with respect to each Phase, all of the
capitalized costs and expenses of any kind or character incurred to design,
install, complete and implement the Equipment for such Phase, including,
without limitation, all professional fees and expenses, and other "soft costs"
of a nature ordinarily and reasonably incurred in connection with the
installation, completion and implementation of the Equipment for such Phase.
"Sublessee": as defined in Section 21(c) of the Lease.
"Subsidiary": any corporation or other entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar
functions are at the time directly or indirectly owned by the Lessee.
"Supplemental Rent": as defined in Section 3(d) of the
Lease.
"Tangible Net Worth": Book Net Worth minus (i) the amount, if
any, of the Lessee's and its Subsidiaries' assets which would be treated as
intangible under GAAP, (ii) any write up in the book value of any fixed asset
resulting from re-evaluation thereof, and (iii) the amount, if any, at which
share of the Lessee appears on the asset side of the Lessee's balance sheet.
"Taxes": any taxes, imposts, levies, duties, deductions or
withholdings of any nature now or at any time hereafter imposed by any
Governmental Authority or by any taxing authority thereof or therein imposed or
levied upon, assessed against or measured by any Rent or other sums payable
hereunder.
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"Termination Event": as defined in Section 15(a) of the
Lease.
"Termination Value": as to any Phase, at any time of
determination, the sum of (i) the excess of (a) the aggregate Equipment Cost
for all Equipment allocable to such Phase over (b) the sum of all Scheduled
Payments for such Phase theretofore made to the Lessor, if any, plus (ii) all
accrued, unpaid Interim Rent Payments, Floating Rate Payments and, if
applicable, Fixed Rate Payments for such Phase, all accrued and unpaid
Supplemental Rent through the date of payment of the Termination Value, plus
(iii) all unpaid Impositions through the date of payment of the Termination
Value, plus, (iv) any amounts payable pursuant to Section 27(e)(i) hereof in
connection with the payment of Termination Value, plus (v) as to any Phase as
to which Completion has not occurred, the sum of (a) the aggregate amount of
costs (including acquisition costs and Soft Costs) which it will be necessary
to expend in order to achieve Completion for such Phase plus (b) all
Impositions thereon.
"Third Party": any Person other than (i) the Lessor, (ii)
the Lessee or (iii) any Affiliate of either of them.
"Unrecovered Equipment Cost": for each Phase, means at any
time the sum of (i) the aggregate original Equipment Cost for such Phase, less
(ii) the aggregate amount of Scheduled Payments for such Phase received by the
Lessor.
"UCC": the Uniform Commercial Code as enacted in the State
of Georgia and any other jurisdiction whose laws may be mandatorily applicable.
"Vendor": any designer, supplier, manufacturer or installer
of, or provider of Property or services with respect to, the Equipment or any
Property included therein or any part thereof.
"Wachovia": Wachovia Bank of Georgia, N.A., a national
banking association, in its individual capacity, and its successors.
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SCHEDULE 3(b)
Scheduled Amounts
Rental Estimated Scheduled
Period Residual Amount as a
percentage
of Equipment
Cost
1 100.00% 0.00%
2 97.22% 2.28%
3 95.50% 2.22%
4 93.28% 2.22%
5 91.06% 2.22%
6 88.84% 2.22%
7 86.62% 2.22%
8 84.40% 2.22%
9 82.18% 2.22%
10 79.96% 2.22%
11 77.74% 2.22%
12 75.52% 2.22%
13 73.30% 2.22%
14 71.08% 2.22%
15 68.86% 2.22%
16 66.64% 2.22%
17 64.42% 2.22%
18 62.20% 2.22%
19 59.98% 2.22%
20 57.76% 2.22%
21 55.54% 2.22%
22 53.32% 2.22%
23 51.10% 2.22%
24 48.88% 2.22%
25 46.66% 2.22%
26 44.44% 2.22%
27 42.22% 2.22%
28 40.00% 2.22%
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SCHEDULE 14
Insurance Requirements
The Lessee will provide, or cause to be provided, insurance in
accordance with the terms of this Schedule as to each Phase, which insurance
shall be placed and maintained with Permitted Insurers.
(a) Insurance Coverages and Limits
At all times subsequent to the Phase Commencement Date for such Phase,
the Lessee shall provide, or cause to be provided, the following property and
liability coverages with respect to the Equipment:
(i) all-risk property coverage, with limits of coverage at
least equal to the replacement cost (which limits shall be not less
than $_____________ for the Equipment, which insurance coverage may,
at the Lessee's option, be included under any "blanket" policy
maintained by Guarantor so long as such "blanket" policy provides for
all-risk property coverage with respect to the Equipment and any other
Property covered thereby, with limits of coverage at least equal to
the aggregate replacement cost of the Equipment (provided, however,
that such insurance, in either case, shall provide for replacement
cost coverage, provided that the insured property is replaced, and,
provided further, that the insurance shall not have the effect of
causing the Lessee or any of its Affiliates to be deemed a
co-insurer), with respect to the Lessee and any Affiliate of the
Lessee providing services with respect to the Equipment, or if the
Lessee elects to effect the coverage required by this Paragraph under
a "blanket" policy, the Lessee, Guarantor and its Affiliates insured
thereby, such insurance to include, coverage for (x) floods,
windstorms, hurricanes, tornados, earthquakes, collapse and other
perils (including debris removal and cleanup) and such insurance to
cover equipment separated from the Equipment, transit of equipment and
consumables to and from the Applicable Site, labor claims, in each
case with respect to the Equipment, and such insurance to include
coverage for all other risks and occurrences customarily included
under all-risk policies available with respect to Property similar in
installation, location and operation to the Equipment (or the
Equipment
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and all other Property insured thereby if all are covered under a
"blanket" policy), and (y) "boiler and machinery" property damage
insurance on a comprehensive basis with respect to damage to the
machinery, plants, equipment or similar apparatus (including
production machinery) included in the Equipment (or the Equipment and
all other Property insured thereby if all are covered under a
"blanket" policy), from risks and in amounts normally insured against
under machinery policies.
(ii)
(1) statutory workers' compensation and occupational
disease insurance in accordance with applicable state and
federal law, and employer's liability insurance with primary
and excess coverage limits of not less than $____________;
(2) commercial general liability insurance covering
operations of the Lessee, contractual liability coverage,
contingent liability coverage arising out of the operations
of the Equipment, cross-liabilities coverage, sudden and
accidental seepage and pollution coverage, and other coverage
for hazards customarily insured with respect to Property
similar in construction, location, occupancy and operation to
the Equipment, with limits complying with the underlying
requirements of the excess liability policy described in
Paragraph (a)(ii)(3);
(3) excess commercial liability insurance in excess
of the liability policies described in Paragraphs (a)(ii)(1)
and (2) to bring to limits of not less than $______________
for each occurrence and in the aggregate per year with
respect to the Lessee, Guarantor and its Affiliates.
(iii) The policy or policies providing the coverage required
by paragraphs (a)(i) and (a)(ii)(2) and (a)(ii)(3) may include
deductible amounts for the account of the Lessee or its Affiliates, as
the case may be, not to exceed $_____________ in the aggregate for all
such coverages.
(b) Insurance Endorsements - Any insurance carried in accordance
herewith shall, except as hereinafter permitted, provide or be endorsed to
provide that:
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(i) the Lessor, as its interests may appear, shall be
included as additional insureds or named as loss payees but only with
respects coverages required by Paragraphs (a)(i), with the
understanding that any obligation imposed upon the insured (including,
without limitation, the liability to pay premiums) under any policy
required by this Schedule shall be the obligation of the Lessee and
its Affiliates) and not that of the Lessor;
(ii) except with respect to the coverage required by
Paragraphs (a)(i) and (a)(ii), there shall be a cross-liability and
severability of interest endorsement providing that to the extent the
policy is written to cover more than one insured, all terms,
conditions, insuring agreements and endorsements, with the exception
of limits of liability and deductibles shall operate in the same
manner as if there were a separate policy covering each insured;
(iii) the insurer thereunder waives all rights of subrogation
against the Lessor;
(iv) such insurance shall be primary without right of
contribution of any other insurance carried by or on behalf of the
Lessor with respect to its interests in the Equipment; and
(v) if such insurance is cancelled for any reason whatsoever
(including, without limitation, nonpayment of premium) or any material
change is made in the coverage that affects the interests of the
Lessor, such cancellation or change shall not be effective as to the
Lessor for 10 days for nonpayment of premiums and otherwise for 45
days, in both cases after receipt by the Lessor (at the address
provided pursuant to Section 22 of the Lease) of written notice sent
by certified mail from such insurer of such cancellation or change.
(c) Adjustment of Property Losses - After the occurrence and during
the continuation of an Event of Default or after the occurrence of a
Cancellation Event or Termination Event, the loss, if any, under any property
insurance covering the Equipment required to be carried by this Schedule shall
be adjusted with the insurance companies or otherwise collected, including,
without limitation, the filing of appropriate proceedings, by the Lessee in
consultation with the Lessor.
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(d) Reinstatement of Limits - The Lessee shall, or shall cause its
insurance broker to, notify promptly the Lessor at any time when the limits of
the excess commercial liability insurance required by Paragraph (a)(ii)(3)
shall have been reduced, either by reason of payments of, or the establishment
of reserves for the ultimate payment of, claims which have been asserted during
the term of such insurance, by an aggregate amount in excess of $____________.
At such time, the Lessee shall, if so requested by the Lessor, use its best
efforts to reinstate such insurance so as to comply with the requisite limits
prescribed herein.
(e) Upon request, the Lessee will furnish the Lessor evidence of such
insurance relating to the Equipment.
(f) Additional Insurance by the Lessor or the Lessee Nothing in this
Schedule shall prohibit the Lessor or the Lessee, as their respective interests
may appear, from maintaining for its own account, at the expense of the Person
purchasing such insurance, additional insurance on or with respect to the
Equipment, or any part thereof, with coverage exceeding that otherwise required
under this Schedule, unless such insurance would conflict with or limit the
insurance otherwise required under this Schedule.
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EXHIBIT A
ACQUISITION, AGENCY, INDEMNITY AND
SUPPORT AGREEMENT
Between
FLOWERS INDUSTRIES, INC.
and
WACHOVIA LEASING CORPORATION
Dated as of October 20, 1995
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ACQUISITION, AGENCY, INDEMNITY AND SUPPORT AGREEMENT dated as of
October 20, 1995 (as it may be amended or supplemented from time to time, this
"Agreement"), by and between FLOWERS INDUSTRIES, INC., a Georgia corporation
(the "Company"), and WACHOVIA LEASING CORPORATION, a North Carolina corporation
(the "Lessor"). All capitalized terms used in this Agreement and not otherwise
defined herein shall have the meanings assigned to them in Schedule 1(b) to
that certain Master Lease Agreement dated of even date herewith (as amended,
supplemented or otherwise modified, the "Lease") by and between the Company, in
its capacity as the Lessee, and the Lessor, in its capacity as the Lessor.
RECITALS
A. Pursuant to the Lease, the Company, in its capacity as the
Lessee, has agreed to lease the Equipment for all Phases for the Permitted Use
in accordance with the terms and conditions set forth in the Lease.
B. To induce the Lessor to enter into the Lease and the other
Operative Documents, the Company has agreed to provide, or cause to be
provided, to the Lessor all the rights, services, and other matters as may be
necessary from time to time for the design, acquisition, installation,
assembly, maintenance and operation of the Equipment, and has agreed to
indemnify the Lessor for certain environmental and other risks relating to the
Equipment, all as hereinafter provided.
NOW, THEREFORE, in consideration of the premises and intending to be
legally bound by this Agreement, the Company and the Lessor hereby agree as
follows:
ARTICLE I.
Agency Appointment
Section A. Appointment of Acquisition Agent. The Lessor hereby
appoints the Acquisition Agent as its agent and attorney-in-fact with respect
to each Phase (the Company in such capacity is herein called the "Acquisition
Agent"), and the Acquisition Agent hereby agrees to act as the Lessor's agent
and attorney-in-fact, to perform certain of the obligations and
responsibilities of the Lessor under the Lease, to cause, and to be solely
responsible for causing, the Equipment for each Phase to be
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purchased and designed and to be installed and assembled substantially in
accordance with all Governmental Requirements and Insurance Requirements and to
undertake such other powers, duties and obligations as are set forth herein.
Section B. Term of Agency Relationship. The agency relationship
created herein between the Acquisition Agent and the Lessor shall commence as
of the date hereof and shall end on the sooner to occur of: (a) with respect to
any particular Phase, the date that the Lessor no longer owns any of the
Equipment for such Phase, (b) with respect to all Phases, the occurrence of a
default by the Lessee in the payment of the Final Rent Payment or the
Termination Value for all Phases in accordance with the terms of Section 15 of
the Lease, and (c) with respect to any particular Phase, the date the Lessee
gives the Lessor notice that it will not exercise the option to purchase any of
the Equipment for such Phase pursuant to the terms of the Lease, and on the
date any such event occurs the Lessor revokes the Company's right to act as
Acquisition Agent hereunder for such Phase or for all Phases, as applicable.
The Lessor may, but is not obligated to, revoke the Company's right and
obligation to act as Acquisition Agent hereunder (x) with respect to any Phase,
any time after a Lease Termination Date or Option Date for such Phase, and (y)
with respect to all Phases, any time after a Cancellation Event.
Section ▇. ▇▇▇▇▇▇, Duties and Obligations. The Acquisition Agent
shall have the following powers, duties and obligations with respect to each
Phase:
1. To take the following actions to cause the Acquisition
Date to occur with respect to each item of Equipment in each Phase:
(i) To furnish to the Lessor, as soon as available, a
detailed list of the Equipment to be acquired for and included in each
Phase, and to acquire the Equipment for such Phase in the name of the
Lessor, and obtain and furnish to the Lessor bills of sale or other
evidence of ownership thereof in the Lessor's name, taking good and
marketable title thereto, free and clear of all liens and encumbrances
of third parties, and to obtain and furnish to the Lessor full
releases of all seller's mechanic's and other similar liens (a) as of
each payment date for an item of the Equipment or service in respect
thereof, to the extent of
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such item or service and (b) as of the Acquisition Date therefor;
(ii) In the name and for the benefit of the Lessor, to
negotiate, enter into and perform, and furnish to the Lessor the
originals of, all Related Contracts and all other contracts which are
necessary or desirable in connection with the acquisition, development
and installation of the Equipment for such Phase, including contracts
with all Vendors and contractors for supplies, equipment, materials
and services, including, without limitation, necessary design work
affecting the Equipment and to cause all such Related Contracts and
other contracts to be assignable;
(iii) To obtain and furnish to the Lessor all Permits that
are or will become Applicable Permits with respect to such Phase and
the Applicable Site by the Acquisition Date for such Phase, except
Applicable Permits customarily obtained or which are permitted by
Governmental Requirements to be obtained after the acquisition of the
Equipment for such Phase (in which case the Acquisition Agent, having
completed all appropriate due diligence in connection therewith
pursuant hereto, shall certify to the Lessor that it has no reason to
believe that such Permits will not be granted in the usual course of
business prior to the date that such Permits are required by
Governmental Requirements), which such obtained Permits shall be in
proper form, in full force and effect and not subject to any appeal or
other unsatisfied contest that may allow modification or revocation
thereof;
(iv) To obtain and furnish to the Lessor evidence of
perfection under local law of the Lessor's ownership of the Equipment
for each Phase subject to a lease intended as security and file
protective financing statements under applicable local law, in each
case properly executed by the Lessee, evidencing a first priority,
perfected interest in the Equipment for such Phase in favor of the
Lessor as security for payment by the Lessee of all amounts, and the
performance of all obligations, of the Lessee under the Lease;
(v) To obtain and furnish to the Lessor a Certificate of
Acceptance in substantially the form of Exhibit B attached to the
Lease from the Lessee with respect to the Equipment for each Phase;
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(vi) To obtain and furnish to the Lessor a Lease Supplement
in substantially the form of Exhibit C attached to the Lease from the
Lessee with respect to such Equipment for each Phase; and
(vii) Upon completion of each of the foregoing with respect
to any item of Equipment, to notify the Lessor thereof and that the
Acquisition Date has occurred with respect to such item of Equipment;
(b) To perform all acts which the Acquisition Agent may deem
necessary on behalf of the Lessor, but only in the name of the Acquisition
Agent, in connection with Completion, including, without limitation,
(i) performing or arranging the purchasing, designing,
construction, engineering, assembling, installing and testing of the
Equipment for such Phase in accordance with the requirements for
Completion set forth on Schedule 1(3)(b) attached hereto and by
reference made a part hereof;
(ii) completing the installation and testing of all Equipment
in a manner necessary to meet Completion for such Phase on or before
the Phase Completion Date for such Phase;
(iii) performing or causing to be performed all work in
connection with Completion to be done in a good and workmanlike manner
and in compliance with all Governmental Requirements and Insurance
Requirements; and
(iv) paying, or causing to be paid, in accordance with
prudent industry practices in substantial compliance with applicable
Governmental Requirements all costs and expenses of Completion for
such Phase and performing all obligations of such Completion, and
performing or causing to be performed all contracts and other
agreements, including without limitation all Related Contracts,
entered into by or on behalf of the Lessor with respect to such Phase,
and for any Phase, advancing to any Vendor any advance payments,
progress payments and full payments required thereby, using funds
obtained from the Lessor pursuant to the Progress Payment Agreement
for such Phase;
(v) if and to the extent that the aggregate Equipment Costs
for all Phases exceeds $50,000,000, use the Acquisition Agent's own
funds to obtain Completion for all
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Phases, and assign all Property necessary for Completion of the
Equipment and purchased with the funds of the Acquisition Agent or its
Affiliates to the Lessor to be owned as part of the Equipment
provided, however, only such Property as is necessary to fulfill the
requirements of Completion shall be assigned to the Lessor; and
(vi) executing and delivering to the Lessor a Completion
Certificate for such Phase in the form of Exhibit A attached hereto
and by reference made a part hereof upon Completion of such Phase;
(c) To take all actions in operating and managing the
Equipment for each Phase as it would take as a reasonably prudent operator in
the management and operation of its own Properties consistent with applicable
Governmental Requirements, including, without limitation:
(i) marking the Equipment for each Phase to disclose the
interest of the Lessor to the extent relevant under applicable law or
to the extent deemed appropriate by the Lessor; and
(ii) preserving the Lessor's rights in the Equipment for such
Phase and under all Related Contracts pertaining to such Equipment;
(d) To keep the Equipment for each Phase free of all Liens
except Permitted Liens, provided that the Lessee shall have the right to
contest Impositions in accordance with Section 13 of the Lease;
(e) To transfer and hold all of the evidence of ownership
of the Equipment for each Phase in the name of the Lessor;
(f) To avoid purchasing Property from or entering into any
agreement with Affiliates of the Acquisition Agent in connection with the
Equipment (except as expressly permitted by the Lease) for any Phase unless
upon fair and reasonable terms that are not less favorable to the Lessor than
those which might be obtained in an arm's-length transaction between
unaffiliated Persons in the same business at the time such terms are agreed
upon;
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(g) Prior to the end of the Acquisition Period, to obtain
and submit to the Lessor for its approval an appraisal as to each Phase (which
may be a global appraisal as to all Phases) which, upon approval by the Lessor,
satisfies the requirements for and will constitute an Approved Appraisal.
(h) To attempt to sell the Equipment for each Phase for cash
on the Lease Termination Date for such Phase (unless such date also constitutes
the Option Date for such Phase), subject to the Lessor's prior written approval
of the terms of the sale, and to grant, bargain, sell, convey or contract for
the sale or conveyance of the Equipment for such Phase in connection with the
duties in this paragraph;
(i) To keep and maintain proper books and records relating
to the accounts of the Equipment for each Phase and the Book Value of the
Equipment for each Phase and the Property comprising the Equipment for each
Phase;
(j) To pay for, exchange or otherwise settle accounts for
the acquisition of supplies, equipment, materials or services affecting the
Equipment for each Phase;
(k) To ask for, demand, collect, recover, and receive all
moneys which may become due and owing by reason of conveyances, whether by
contract, ▇▇▇▇ of sale or other instruments or to pay for, exchange or
otherwise settle accounts for the acquisition of supplies, equipment, materials
or services affecting the Equipment for each Phase; provided however, the
Acquisition Agent shall have the right in its reasonable discretion to settle
or waive claims in an aggregate amounts less than $100,000.00 for any Phase.
(l) To ask for, demand, collect, and recover, each in the
name of the Lessee, any and all sums that may be due on account of any damage
to any of the Equipment for an Phase; and
(m) To manage correspondence and conduct communications with
all Governmental Authorities with regard to matters affecting the Equipment for
each Phase, including, but not limited to, the acquisition of all Permits and
satisfaction of all Governmental Requirements and Insurance Requirements and
with regard to rights of way and easements, if any, affecting the Equipment for
each Phase.
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Section D. Disclosure. The Acquisition Agent shall act in its sole
discretion in choosing materials for the Equipment for each Phase and hiring
any contractors and subcontractors to work on the Equipment for each Phase. The
Lessor has no liability for or in respect of the Equipment for any Phase as
provided in Section 11 of the Lease and shall be indemnified and held harmless
by the Acquisition Agent as provided herein, in the Lease and the other
Operative Documents.
ARTICLE II.
Basic Services, Contracts and Rights, Etc.
Section A. Plans and Design Specifications. As soon as available, the
Company, at no cost to the Lessor, shall deliver, or cause to be delivered, to
the Lessor a complete set of all "as-built" plans, drawings and specifications
for the Equipment for each Phase, including all design information, safety
systems, and associated improvements which comprise a portion of the Equipment,
which items and information to the best of the Company's knowledge shall be
true, correct and complete.
Section B. [RESERVED]
Section C. Utilities, Services and Contracts. Within 120 days prior to
the Scheduled Lease Termination Date for each Phase (or immediately if the
Lease terminates as to any Phase on any Cancellation Date or Lease Termination
Date which is not a Scheduled Lease Termination Date for such Phase), and
provided that the Company shall not have elected to purchase, or purchased, the
Equipment for such Phase pursuant to the terms of the Lease, at all times
thereafter until such Equipment is purchased by a Third Party, the Company, at
no cost to the Lessor (with the Company's costs to be reimbursed out of any
excess of the net proceeds of such sale over the Non-Recourse Amount for such
Equipment, pursuant to Section 15(a)(ii)(B)(2) of the Lease, provided that the
Final Rent Payment has been made, pursuant to Section 15(a)(ii)(B)(1) of the
Lease), shall provide, either directly or indirectly, to the Lessor, in
substantial compliance with all Governmental Requirements (including, without
limitation, all Environmental Requirements, Environmental Authorizations and
Environment Judgments and Orders and Insurance Requirements), as confirmed by
the Lessor, (a) access to Equipment for such Phase and the Applicable Site
therefor, and to storage, transportation and maintenance facilities (including
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maintenance equipment and supplies for the Equipment), storage, security,
licenses, rights, permits, reports and other general items that are identified
in due diligence, in each case necessary or appropriate for the continued
preservation and maintenance of the Equipment for such Phase pending such sale
and delivery of the Equipment to the purchaser thereof (or as directed by the
Lessor), (b) an inventory of supplies necessary for the full and efficient
operation of the Equipment for such Phase and (c) services (whether on or off
the Applicable Site, including any shared off-site facilities), including,
without limitation, water, electricity, heating, ventilation, air conditioning,
lighting, security, steam, waste water treatment and sanitation, receiving and
shipping facilities as such rights, licenses, easements, services and utilities
are or may be necessary for the full and efficient operation of the Equipment
for such Phase.
Section D. Equipment and Other Rights. Within 120 days prior to the
Scheduled Lease Termination Date for each Phase (or immediately if the Lease
terminates on any Cancellation Date or Lease Termination Date which is not a
Scheduled Lease Termination Date for such Phase), and provided that the Company
shall not have elected to purchase, or purchased, the Equipment for such Phase
pursuant to the Lease, at all times thereafter for the Term of this Agreement,
the Company shall provide to the Lessor, by rent-free lease or other similar
arrangement, any and all equipment and maintenance tools, and, for a price
equal to the Company's cost therefor if not included in Equipment Cost, all
spare parts (including, without limitation, rebuilt parts and major components)
and maintenance equipment not covered by the services provided, or caused to be
provided, pursuant to Section 3.2(a), as are or may be customarily maintained
on the Applicable Site for such Phase by the Company for the operation of the
Equipment for such Phase in the manner described in Article III. Within the
period set forth above (or immediately in the circumstance contemplated above)
the Company, in compliance with all Governmental Requirements, shall also
transfer, or cause to be transferred, to the Lessor any and all equipment
inspection reports and maintenance records and all licenses and Applicable
Permits required to operate the Equipment for such Phase and all such equipment
located on the Applicable Site as confirmed by the Lessor. Within the period
set forth above (or immediately in the circumstance contemplated above), the
Company shall provide, or cause to be provided, to the Lessor, by
non-exclusive, royalty free license or other similar arrangement, rights to all
patents, patent applications, proprietary computer software, operating and
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other manuals, "know-how," copyrights or other intellectual property (excluding
trade names and trademarks) as are or may be necessary for the operation of the
Equipment for such Phase in the manner described in Article III. The Company
represents and warrants to the Lessor that as of the Closing Date, and the
Phase Completion Date for such Phase, and at all times thereafter during the
term of this Agreement, the construction, assembly, installation, ownership,
use, maintenance and operation of the Equipment for each Phase and Property
included therein in accordance with the uses permitted by any necessary
licenses and Applicable Permits held by the Company does not and will not cause
a violation of any Governmental Requirements or Insurance Requirements.
Section E. Cost of Services and Rights.
1. Any and all services described in Section 2.3(c) and all
other rights existing or necessary for the full and efficient operation of the
Equipment for each Phase during the term of this Agreement shall be provided to
the Lessor at the cost specified in Section 3.2.
2. Unless otherwise provided herein, any and all supplies
provided by the Company pursuant to this Article II after the Lease Termination
Date for each Phase (or any earlier date on which the Lease terminates as
provided therein) and for so long as this Agreement remains in effect (i) which
are generally commercially available shall be priced at fair market value, and
on arms-length terms and conditions subject to applicable provisions of
agreements with producers, shippers and suppliers and Governmental
Requirements, or (ii) which are not generally commercially available shall be
priced at an amount equal to the Company's cost (excluding any profit margin).
3. At the Company's expense, after any Lease Termination
Date or Cancellation Date, as applicable, for any Phase, so long as this
Agreement then remains in effect, the Company and the Lessor shall select a
third party to review, on an annual basis, the books and records of the
Company's operation of the Equipment and the Company hereby agrees to permit
access to such books and records, in order to verify that the charges paid by
the Lessor for such supplies during the immediately preceding twelve (12) month
period reflect the costs incurred by the Company in supplying the same
(exclusive of any profit margin).
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ARTICLE III.
Operation and Management of the Equipment Following Lease
Termination.
Section A. Engagement. From the Lease Termination Date for each Phase
(or any earlier date on which the Lease terminates as provided therein) through
the date this Agreement terminates with respect to such Phase in accordance
with Section 8.4, the Company hereby agrees to (a) provide and perform, or
cause to be provided or performed, all services, labor, supervision,
management, maintenance, repairs, common facilities and consumables necessary
for the operation of the Equipment for such Phase for the Permitted Use, in
accordance with all Governmental Requirements and Insurance Requirements, and
(b) to perform the additional duties as set forth in this Agreement.
Section B. Duties and Responsibilities of the Company as Operator
of the Equipment.
During the period specified in Section 3.1:
1. Services. The Company shall (i) perform, or cause to be
performed on behalf of the Lessor, all operation and maintenance whatsoever of
the Equipment for each Phase, (ii) supply, or cause to be supplied, all
services, goods and materials required to operate and maintain the Equipment
for each Phase, including without limitation, those services, goods and
materials referenced in Article II, and (iii) provide such additional services
as may be reasonably requested by the Lessor for the full and efficient
operation of the Equipment for each Phase, all of the foregoing to be done or
performed in accordance with the terms and conditions set forth herein.
2. Standard of Care. The Company shall perform all of its
duties and obligations under Article II and this Article III in accordance with
the standards mandated under Section 7 of the Lease as if fully set forth
herein (which standards are hereby incorporated, mutatis mutandis, herein by
reference) and in a good, workmanlike and commercially reasonable manner. The
Company shall exercise such care and shall in the same manner as a prudent
Person engaged in the business of managing and operating Property similar to
the Equipment for each Phase and used in a similar location for the Permitted
Use would in the advancement and protection of such Person's own economic
interests and the maximization of such Person's profits
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therefrom. Maintenance shall be scheduled so as to minimize interference with
the use operation of the Equipment for each Phase and cost consistent with good
industry operating and safety standards and all Governmental Requirements and
Insurance Requirements.
3. Compliance with Governmental Requirements and Insurance
Requirements. The Company shall comply with, and cause the Equipment for each
Phase (including the maintenance, use and operation thereof) and all personnel
of the Company to comply with, the Insurance Requirements (which Insurance
Requirements are hereby incorporated, mutatis mutandis, herein by reference as
if fully set forth herein) and all Governmental Requirements in effect from
time to time.
4. Personnel. The Company shall at all times employ, or
cause to be employed, qualified and properly trained personnel to perform the
Company's obligations under this Agreement, and shall pay all wages and
benefits required by law or contract. The Company shall be responsible for all
matters relating to labor relations, working conditions, training, employee
benefits, safety programs and related matters pertaining to such employees. The
Lessor shall have the right to request the removal from the operation or
maintenance of the Equipment for any Phase of any personnel deemed unqualified
by the Lessor.
5. Warranties and Guarantees. The Company shall use its
best reasonable efforts consistent with good industry practices to obtain
warranties for the Lessor for parts, equipment, materials or services provided
by third-party suppliers in fulfilling the Company's obligations under this
Agreement. The Company shall comply with all applicable warranties and
guarantees presented by Vendors or contractors, and shall take no action that
in any way impairs any rights or claims of the Lessor under this Agreement or
any Vendor's or other Person's warranty. Without limiting the foregoing, the
Company shall use spare parts that will not adversely affect the Lessor's
protection or rights under such warranties or guarantees.
6. Consultations. Notwithstanding any other provision of
this Agreement, the Company will consult with the Lessor and any other
independent experts appointed by or on behalf of the Lessor to review any
matter pertaining directly or indirectly to the performance of the Company's
obligations under this Agreement and the Company shall provide them with
access,
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during normal business hours and upon no less than two (2) days' prior written
notice, to the Equipment for any Phase and the Applicable Site therefor and
shall make available to such experts, at the Company's expense, all
information, reports, logs and other documents, and shall make the Company's
personnel available for consultation with such experts, all as requested by the
Lessor.
7. Permits. The Company shall apply for and maintain in
full force and effect, at the cost and expense of the Company, any and all
Applicable Permits required to be obtained, maintained or held by either the
Company or the Lessor as and when required by law to be obtained and in proper
form therefor and maintain all such Applicable Permits in full force and
effect.
8. Compliance with Law; Certain Agreements.
a. The Company shall also comply with, and cause
the Equipment for each Phase (and its operation) to comply with, the various
requirements imposed on the Lessee set forth in Sections 7, 9, 10, 12, 13, 14,
16 and 20 of the Lease (which sections are hereby incorporated mutatis mutandis
herein by reference as if fully set forth herein).
b. The Company shall also not take or fail to take
any action which would result in the failure of the Equipment for any Phase to
be operated on a continuing basis for the Permitted Use in accordance with in
the design therefor.
9. Removal. The Lessor may at any time, upon five (5) days
written notice, terminate its engagement of the Company under this Agreement
without terminating this Agreement pursuant to Section 8.4; provided, however,
that the Lessor shall, upon two week's written notice to the Company, be
entitled to request the Company to resume its duties under this Agreement for
the duration of the term of this Agreement and the Company shall comply with
such request.
10. Independent Contractor Status. The Lessor acknowledges
that the Company, in performing its duties under this Article III to maintain
and operate the Equipment for each Phase, is acting as an independent
contractor and except as otherwise expressly provided by this Agreement, the
Lessor shall have no right to control the conduct of the Company or its
personnel in the proper performance of the obligations of the
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Company under this Agreement. The Company acknowledges that the Lessor is the
owner of the Equipment for each Phase and, as such, is entitled to control such
Equipment and its use, subject to the provisions of this Agreement and of the
Lease.
11. Payment of Costs. All reasonable and necessary costs
associated with the continued normal operation, preservation and maintenance of
the Equipment for each Phase during the period and in the manner specified by
this Article III ("Support Expenses") shall be timely advanced by the Company
on behalf of the Lessor subject to reimbursement as hereafter set forth. All
such Support Expenses advanced by the Company shall be accounted for by the
Company and reported to the Lessor pursuant to monthly written operating
reports certified by an authorized officer of the Company. The Lessor shall
reimburse the Company for support expenses actually advanced by the Company
with respect to any Phase, together with simple interest thereon at a rate per
annum equal to 80% of the Base Rate, on the earlier to occur of the date
following (i) the termination of this Agreement as to such Phase in accordance
with Section 8.4 hereof, or (ii) the date which is three (3) years following
the Lease Termination Date or Cancellation Date for such Phase giving rise to
the engagement established under Section 3.1. Reimbursement under subsection
(i) of this Section 3.2(l) with respect to any Phase shall be made by the
Lessor out of any excess of the net proceeds of the sale of the Equipment for
such Phase to a Third Party over the Non-Recourse Amount for such Equipment,
pursuant to Section 15(a)(ii)(B)(2) of the Lease, provided that the Final Rent
Payment has been made, pursuant to Section 15(a)(ii)(B)(1) of the Lease);
provided that should such proceeds be insufficient to cover the Lessor's
obligation hereunder to reimburse the Company for Support Expenses (plus
interest) in full, the balance of such Support Expenses (and interest) shall be
payable on the date set forth in subsection (ii) above. The Company's right to
reimbursement pursuant to (i) above shall at all times and in all respects be
subject and subordinate to the rights of the Lessor to receive full repayment
of the Final Rent Payment and all other amounts payable to the Lessor under the
Lease. Notwithstanding anything to the contrary contained herein, the Lessor
shall not be entitled to reimbursement for any costs expended or incurred from
the Lease Termination Date or Cancellation Date, as applicable, for any Phase
through the Purchase Closing Date for such Phase, if extended by the Lessor
under Section 15(e) of the Lease, in the event that the Company elects to
purchase the Equipment for such Phase and elects to remain in possession of
such Equipment pursuant to the license referenced in Section
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15(e) of the Lease. All such costs shall be the responsibility of the Company
and shall represent the license fee payable in consideration of the rights
afforded under such license.
ARTICLE IV.
Indemnification
Section A. Indemnities. The Company agrees, in addition to any other
indemnity obligations set forth in the Lease and any other Operative Document,
to indemnify and save harmless, the Lessor and any of its successors and
assigns, and its officers, directors, incorporators, shareholders, employees,
agents, partners, attorneys, affiliates and servants (individually an
"Indemnified Party" and collectively the "Indemnified Parties") from and
against all liabilities, Liens, Impositions, losses, obligations, claims,
damages (including, without limitation, penalties, fines, court costs and
administrative service fees), penalties, demands, causes of action, suits,
proceedings (including any investigations, litigation or inquiries), judgments,
orders, sums paid in settlement of claims, and costs and expenses of any kind
or nature whatsoever, including, without limitation, reasonable attorneys' fees
and expenses and all other expenses incurred in connection with investigating,
defending or preparing to defend any cause of action, suit or proceeding
(including any investigations, litigation or inquiries) or claim which may be
incurred by or asserted against or involve any of them (whether or not any of
them is named as a party thereto) as a result of, arising directly or
indirectly out of or in any way related to (a) the failure of the Company to
perform or caused to be performed, or the inadequacy of, the environmental due
diligence required under Article IV above, (b) the breach of any representation
or warranty set forth under the Lease or any of the other Operative Documents
regarding Environmental Requirements, (c) the failure of the Company to perform
any obligation required to be performed under the Lease or any other Operative
Documents pursuant to Environmental Requirements, and (d) all acts or omissions
by or on behalf of the Company (both in its individual capacity and in its
capacity as Acquisition Agent), its contractors, employees, agents, licensees,
representatives or any other Person for whose conduct the Company is
responsible in connection herewith under this Agreement (collectively, the
"Indemnified Risks"); provided, however, that no Indemnified Party shall be
entitled to indemnity (or any other payment or reimbursement) for any
Indemnified Risks to the extent
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such Indemnified Risks result from or arise out of the willful misconduct or
gross negligence of such Indemnified Party.
Section B. Defending Claims. If any cause of action, suit, proceeding
or claim arising from any of the foregoing is brought against any Indemnified
Party, whether such action, proceeding, suit or claim shall be actual or
threatened, or in preparation therefor, the Company will have the right, at its
expense, to assume the resistance and defense of such cause of action, suit,
proceeding or claim or cause the same to be resisted and defended; provided
that such Indemnified Party shall be entitled (but not obligated) to
participate jointly in such defense, in which case such Indemnified Party will
be responsible for its own legal fees or other expenses, if any, related to
such defense incurred subsequent to the joint participation by such party in
such defense. Notwithstanding the foregoing, if any Indemnified Party shall
have been advised by counsel chosen by it that there may be one or more legal
defenses available to such Indemnified Party that are different from or
additional to those available to the Company, the Indemnified Party may assume
the defense of such action and the Company agrees to reimburse such Indemnified
Party for the reasonable fees and expenses of any counsel retained by the
Indemnified Party. The Company may settle any action which it defends hereunder
on such terms as it may deem advisable in its sole discretion, subject to its
ability promptly to perform in full the terms of such settlement. No
Indemnified Party may seek indemnification or other reimbursement or payment,
including attorneys' fees or expenses, from the Company for any cause of
action, suit, proceeding or claim settled, compromised or in any way disposed
of by the Indemnified Party without the Company's prior written consent, which
will not be unreasonably withheld.
Section C. Survival. The obligations of the Company under this
Article V shall survive the expiration or any termination of this Agreement
(whether by operation of law or otherwise) and the payment of amounts owed by
the Lessor and the Company under this Agreement, the Lease and the other
Operative Documents.
Section D. Payment upon Demand. Upon demand for payment by any
Indemnified Party of any Indemnified Risks incurred by it for which
indemnification is sought, the Company shall pay when due and payable the full
amount of such Indemnified Risks to the
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appropriate party, unless and only so long as: (a) the Company shall have
assumed the defense of such action and is diligently prosecuting the same; (b)
the Company is financially able to pay all its obligations outstanding and
asserted against the Company at that time, including the full amount of the
Indemnified Risks; and (c) the Company has taken all action as may be necessary
to prevent (i) the collection of such Indemnified Risks from the Indemnified
Party; (ii) the sale, forfeiture or loss of the Equipment for any Phase to
which such Indemnified Risk relates or any portion thereof during such defense
of such action; and (iii) the imposition of any civil or criminal liability for
failure to pay such Indemnified Risks when due and payable.
Section E. Acknowledgement of Scope of Indemnity. The Company
acknowledges and agrees that (a) its obligations under this Article V are
intended to include and extend to any and all liabilities, Liens, Taxes,
losses, obligations, claims, damages (including, without limitation, penalties,
fines, court costs and administrative service fees), penalties, demands, causes
of action, suits, proceedings (including any investigations, litigation or
inquiries), judgments, orders, sums paid in settlement of claims, costs and
expenses (including, without limitation, response and mediation costs,
stabilization costs, encapsulation costs, and treatment, storage or disposal
costs), imposed upon or incurred by or asserted at any time against any
Indemnified Party (whether or not indemnified against by any other party) as a
result of, arising directly or indirectly out of or in any way related to (i)
the treatment, storage, disposal, generation, use, transport, movement,
presence, release, threatened release, spill, installation, sale, emission,
injection, leaching, dumping, escaping or seeping of any hazardous substance or
material containing or alleged to contain hazardous substance at or from the
Equipment for any Phase or the Applicable Site therefor or any part thereof;
(ii) the violation or alleged violation of any Environmental Requirements
relating to or in connection with the Equipment for any Phase or the Applicable
Site therefor or any part thereof or any acts or omissions thereon or relating
thereto; (iii) all other federal, state and local laws designed to protect the
environment or persons or property therein, whether now existing or hereinafter
enacted, promulgated or issued by any governmental authority relating to or in
connection with the Equipment for any Phase or the Applicable Site therefor or
any part thereof or any acts or omissions thereon or relating thereto; (iv) the
Company's failure
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to comply with its obligations under Section 7 of the Lease; and (v) any
abandonment of the Equipment for any Phase by the Company.
Section F. Best Efforts Notice. In case any action shall be brought
against any Indemnified Party in respect of which indemnity may be sought
against the Company, such Indemnified Party shall use best efforts to promptly
notify the Company in writing, but the failure to give such prompt notice shall
not relieve the Company from liability hereunder.
ARTICLE V.
Reversion of Rights and Contracts.
Upon payment of the Termination Value for any Phase (or for all
Phases, as applicable) on the Purchase Closing Date therefor as provided in
Section 15 of the Lease: (a) the various agreements, licenses, Applicable
Permits and contracts, including without limitation Related Contracts, to be
provided hereunder by Company to the Lessor shall revert to the Company (or be
transferred to the Company), (b) service contracts with the Company, property
rights and licenses granted by the Company to the Lessor shall terminate or be
transferred to the Company, and (c) Third Party service contracts shall be
assigned by the Lessor to the Company, without recourse and without any
representation or warranty whatsoever. Upon the termination of the Lease as to
any Phase and the failure of the Company or one of its Affiliates to purchase
the Equipment for such Phase as provided in Section 15 of the Lease, all such
agreements, Applicable Permits, contracts, property rights and licenses and
Third Party service contracts pertaining to such Phase, including without
limitation Related Contracts, shall remain in place unless terminated by the
Lessor.
ARTICLE VI.
Additional Support.
In the event that neither the Company nor any of its Affiliates
purchases the Equipment for any Phase from the Lessor pursuant to the Lease,
the parties hereto agree to negotiate in
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good faith to provide to the Lessor such support in addition to that provided
for in this Agreement as the Lessor may deem necessary to maintain, use and
operate the Equipment for such Phase for the Permitted Use or any other purpose
requested by the Lessor.
ARTICLE VII.
Miscellaneous.
Section A. Governing Law; Assignability, etc. THIS AGREEMENT
(INCLUDING, BUT NOT LIMITED TO, THE VALIDITY AND ENFORCEABILITY HEREOF) SHALL
BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA, OTHER THAN
THE CONFLICT OF LAWS RULES THEREOF. This Agreement supersedes all prior
agreements among or between the parties with respect to the matters addressed
herein and shall be binding upon and inure to the benefit of and be enforceable
by the respective successors and assigns of the parties hereto. After the
expiration or the termination of the Lease as to any Phase, and provided that
the Company (or an Affiliate thereof) shall not have purchased the Equipment
for such Phase in accordance with the terms of the Lease, the Lessor may, at
any time, assign its rights hereunder to any permitted assignee of the Lessor
under the Lease, without the prior written consent of the Company. The Company
may not delegate all or any part of its obligations or assign any of its rights
hereunder without the prior written consent of the Lessor.
Section B. [Reserved]
Section C. Amendments. No change, waiver, amendment or modification
of any of the provisions of this Agreement shall be valid unless set forth in a
written instrument signed by the parties hereto, in compliance with the
requirements set forth in the Lease.
Section D. Term; Option. Except as otherwise expressly provided
herein, this Agreement and the parties' obligations hereunder shall commence on
the date hereof and shall terminate as to each Phase upon the expiration or
other termination of the Lease as to such Phase and consummation of the
purchase by the Company (or an Affiliate thereof) of the Equipment for such
Phase for the Termination Value therefor in accordance with the Lease;
provided, however, that upon the termination of the Lease for any
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Phase, and provided that the Company (or an Affiliate thereof) shall not have
purchased the Equipment for such Phase and paid the Termination Value therefor
in accordance with the terms of the Lease, this Agreement shall continue in
full force and effect as to such Phase until the date the Equipment for such
Phase is sold to a Third Party or any earlier written notice from the Lessor of
its election to terminate this Agreement as to such Phase.
Section E. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be an original, and all of which
together shall constitute but one and the same instrument. This Agreement may
be delivered by facsimile transmission of the relevant signature pages hereof.
Section F. Further Assurances. The Company shall take all appropriate
actions and shall execute any documents, instruments or conveyances of any kind
which may be necessary or advisable to carry out the provisions hereof,
including, without limitation, all documents required by Governmental
Authorities, and respond to all inquiries of Governmental Authorities
concerning the Equipment for any Phase.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
hereto to be entered into by one of its officers thereunto duly authorized.
LESSOR:
WACHOVIA LEASING CORPORATION
By:
----------------------------------
Title:
COMPANY:
FLOWERS INDUSTRIES, INC.
By:
----------------------------------
Title:
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Schedule 1.3(b)
Requirements for Completion for each Phase
Completion shall occur as to any Phase when each of the following requirements
has been satisfied:
1. The Acquisition Date shall have occurred for each item of Equipment in
such Phase, with all of the actions set forth in Section 1.3(a)(i) through
(vii), inclusive, of the Agency Agreement having been taken for all such items.
2. All installation and testing of all Equipment for such Phase shall have
been completed satisfactorily, and all of such Equipment shall be subject to
the Lease.
3. No Loss Event or Casualty Event shall have occurred with respect to such
Phase.
4. No Default or Event of Default shall have occurred.
5. The Acquisition Agent shall have furnished to the Lessor a Completion
Certificate with respect to such Phase.
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EXHIBIT A
Form of Completion Certificate
COMPLETION CERTIFICATE
[LOCATION OF APPLICABLE SITE]
The undersigned, the ___________________ of FLOWERS INDUSTRIES, INC.,
a Georgia corporation, in its capacity as Acquisition Agent (the "Acquisition
Agent") for WACHOVIA LEASING CORPORATION, a North Carolina corporation
("Lessor") under that certain Acquisition, Agency, Indemnity and Support
Agreement dated as of October 20, 1995 (the "Agency Agreement"), hereby
certifies to Lessor as follows:
1. Reference is hereby made to the Master Lease Agreement, dated as
of October 20, 1995 (the "Lease") by and among Flowers Industries, Inc. in its
individual capacity (the "Company"), as Lessee, and Lessor. Unless otherwise
defined herein, capitalized terms used herein have the respective meanings set
forth in the Lease.
2. The Acquisition Agent has acted as agent and attorney-in-fact
for the Lessor with respect to the purchase, design, installation and assembly
of the Equipment more particularly described on Schedule I attached hereto (the
"Added Equipment") for and on the manufacturing facility located at
__________________________ (the "Applicable Site"), and with respect to certain
other powers, duties and obligations as are more particularly set forth in the
Agency Agreement.
3. An acceptance of the Added Equipment by the Lessee has occurred,
and Lessee has issued its Certificate of Acceptance with respect to the Added
Equipment.
4. Upon delivery of this Certificate to Lessor, all of the events
and conditions precedent for Completion listed in Schedule 1.3(b) to the Agency
Agreement will have been satisfied as to the Applicable Site and the Phase
relating thereto.
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IN WITNESS WHEREOF, the undersigned has executed and delivered this
certificate the _____ day of ________, 19___.
-----------------------------------------
Name:
Title:
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SCHEDULE I
[LIST OF ADDED EQUIPMENT]
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EXHIBIT B
Certificate of Acceptance
[LOCATION OF APPLICABLE SITE]
FLOWERS INDUSTRIES, INC., a Georgia corporation ("Lessee") hereby
represents, acknowledges, warrants and agrees as follows (all terms used herein
without definition have the meanings ascribed thereto in the Master Lease
Agreement between WACHOVIA LEASING CORPORATION, a North Carolina corporation
("Lessor") and Lessee, dated as of October 20, 1995 (the "Lease")):
1. Lessee has received from Lessor as of the ____ day of__________, 199_,
at ________________ (the "Applicable Site") possession of that certain equipment
more particularly described on Schedule 1 hereto, together with all Vendor's
warranties and service contracts with respect thereto (the foregoing equipment
and other items being hereinafter collectively referred to as the "Equipment").
2. The Equipment was delivered to, and fully examined and accepted by,
Lessee at the Applicable Site pursuant to the terms and provisions of the
Lease. The Equipment was received in a condition fully satisfactory to the
Lessee and in full conformity with the Lease in every respect [except as set
forth in Schedule 2 hereto, and was accepted by Lessee subject to such
non-conformity].
4. The Lease is in full force and effect, Lessor has fully, duly and
timely performed all of its obligations of every kind or nature thereunder, and
Lessee has no claims, deductions, set-offs or defenses of any kind or nature in
connection with the Lease.
5. Lessee has obtained all Permits that are or will become Applicable
Permits with respect to the Equipment and the Applicable Site, except for such
Applicable Permits customarily obtained or which are permitted by Governmental
Requirements to be obtained after the acquisition of the Equipment and which
Lessee, having completed all appropriate due diligence in connection therewith
pursuant to the Agency Agreement, has no reason to believe will not be granted
in the usual course of business prior to the date that such Permits are
required by Governmental Requirements. All Applicable Permits heretofore
obtained are in proper form, in full
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force and effect and not subject to any appeal or other unsatisfied contest
that may allow modification or revocation thereof.
Dated as of the_____day of __________________, 199_.
FLOWERS INDUSTRIES, INC. (Lessee)
By:
------------------------------------
Name:
Title:
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SCHEDULE 1 TO CERTIFICATE OF ACCEPTANCE
[DESCRIPTION OF EQUIPMENT]
121
128
SCHEDULE 2 TO CERTIFICATE OF ACCEPTANCE
[DISCREPANCIES]
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EXHIBIT C
Lease Supplement
[LOCATION OF APPLICABLE SITE]
THIS SUPPLEMENT is hereby added, as of the ___ day of ________, 199_,
to that certain Master Lease Agreement (the "Lease") dated as of October 20,
1995 by and between WACHOVIA LEASING CORPORATION, a North Carolina corporation,
as lessor ("Lessor") and FLOWERS INDUSTRIES, INC., as lessee ("Lessee") with
respect to the manufacturing site or facility located at __________________
(the "Applicable Site"). Upon execution hereof by Lessor and Lessee, this
Supplement shall be included in and shall be a part of the Lease for all
purposes. Terms used but not otherwise defined herein shall have the meanings
given to such terms in the Lease.
The parties hereto acknowledge and agree as follows:
1. The equipment (the "Added Equipment") more particularly
described on Schedule "A" attached hereto and located at the Applicable Site is
hereby added by this Supplement to the Lease and shall hereafter constitute a
part of the "Equipment" (as defined in the Lease) leased by Lessee pursuant to
the Lease.
2. The Equipment Cost for the Added Equipment is as reflected on
Schedule "B" attached hereto, and has been paid in full by Lessor. Lessor has
received bills of sale or other evidence of ownership of the Added Equipment,
free and clear of all liens and encumbrances of third parties. Such amounts
shall be used in the computation of Interim Rent, Basic Rent, the Final Rent
Payment or the Termination Value with respect to the Added Equipment.
3. By the addition of the Equipment Cost for the Added Equipment
hereby, the aggregate Equipment Cost for the Phase relating to the Applicable
Site under the Lease has been increased to $______ .
4. Lessee certifies that:
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(a) copies of all Related Contracts, and all other contracts
entered into in connection with the acquisition, development
and installation of the Added Equipment pursuant to the
Agency Agreement have been delivered to Lessor;
(b) all Permits that are or will become Applicable Permits
with respect to the Added Equipment and the Applicable Site
have been obtained, except Applicable Permits customarily
obtained or which are permitted by Governmental Requirements
to be obtained after the acquisition of the Added Equipment
(and Lessee, having completed all appropriate due diligence
in connection therewith pursuant to the Agency Agreement, has
no reason to believe that such Permits will not be granted in
the usual course of business prior to the date that such
Permits are required by Governmental Requirements), and such
obtained Permits are in proper form, in full force and effect
and not subject to any appeal or other unsatisfied contest
that may allow modification or revocation thereof; and
(c) Lessor's ownership interest in the Added Equipment,
subject to a Lease intended as security, has been perfected
under local law, and protective financing statements
evidencing a first priority, perfected interest in the Added
Equipment in favor of the Lessor as security for payment by
Lessee of all amounts and the performance of all obligations
of Lessee under the Lease have been duly filed.
4. The parties hereto represent and warrant as to the facts
specified in subparagraphs (ii), (iii), (iv), (v), and (vi) of Section 28(b) of
the Lease.
5. The parties hereto confirm, as of the date hereof, that all
representations and warranties made in the Lease with respect to the Equipment
heretofore covered by the Lease remain true and correct in all material
respects; that all representations and warranties made in the Lease with
respect to the Equipment are, as of the date hereof, true and correct as to the
Added Equipment as if such Added Equipment originally had been included within
the term "Equipment"; and that no Event of Default or even which
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with notice and/or the passage of time might ripen into an Event of Default
exists under the Lease.
6. Lessee acknowledges and confirms that as of the date hereof,
it has no defenses to the payment or performance of the parties' obligations
under the Lease and that no claims, counterclaims, affirmative defenses or
other such affirmation rights exist against Lessor with respect to the Lease
including, without limitation, any claims relating to the amounts charged as
Interim Rent, Basic Rent, the Final Rent Payment or Termination Value or
otherwise. Lessee has examined the Added Equipment and accepts and approves the
Added Equipment as suitable and satisfactory for inclusion in the Lease, and
has executed a Certificate of Acceptance dated as of even date herewith with
respect to the Added Equipment.
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EXECUTED as of the _____day of ____________, 199__.
LESSOR:
WACHOVIA LEASING CORPORATION
By:
-----------------------------------
Name:
Title:
LESSEE:
[CORPORATE SEAL] FLOWERS INDUSTRIES, INC.
By:
-----------------------------------
Name:
Title:
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133
SCHEDULE A TO LEASE SUPPLEMENT
[LIST OF ADDED EQUIPMENT]
127
134
SCHEDULE B TO LEASE SUPPLEMENT
[EQUIPMENT COST FOR ADDED EQUIPMENT]
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EXHIBIT D
FORM OF LEGAL OPINION OF
ASSISTANT GENERAL COUNSEL OF LESSEE
[LESSEE LETTERHEAD]
October 20, 1995
Wachovia Leasing Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Dear Sirs:
I am the Assistant General Counsel for Flowers Industries,
Inc., a Georgia corporation ("Lessee"). This opinion is being delivered
pursuant to Section 28(a)(ii) of that certain Master Lease Agreement (the
"Lease") dated as of even date herewith between Lessee and Wachovia Leasing
Corporation, a North Carolina corporation ("Lessor"), and in connection with
the execution and delivery of the other "Operative Documents," as defined in
the Lease. Terms defined in the Lease or in Schedule 1(b) to the Lease are used
herein as therein defined, unless otherwise indicated.
I have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as I have deemed necessary or advisable
for purposes of this opinion.
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Upon the basis of the foregoing, I am of the opinion that:
1. Lessee is a corporation duly incorporated, and, based solely
on the Good Standing Certificate (as hereinafter defined), validly existing
under the laws of the State of Georgia and has all corporate powers required to
carry on its business as it is now conducted. The "Good Standing Certificate" is
the certificate of valid existence dated October 18, 1995 issued by the
Secretary of State of the State of Georgia with respect to Lessee.
2. The execution, delivery and performance by Lessee of the
Lease, the Agency Agreement, the Progress Payment Agreement and the other
Operative Documents to which Lessee is a party, (a) are within Lessee's
corporate powers, (b) have been duly authorized by all necessary corporate
action, (c) require no action by or in respect of, or filing with, any
governmental body, agency or official, except for filings as contemplated by
the Lease, (d) do not contravene, or constitute a default under, any provision
of applicable law or regulation or of the certificate of incorporation or
by-laws of Lessee or of any material agreement, judgment, injunction, order,
decree or other instrument relating to Debt which is binding upon Lessee, and
(e) do not result in the creation or imposition of any Lien on any asset of
Lessee (other than the security interest in the Equipment created by the Lease
in the event that the Lease is recharacterized as a financing transaction).
3. The Lease, the Agency Agreement, the Progress Payment
Agreement and the other Operative Documents to which Lessee is a party and the
obligations of Lessee with respect to the payment of Basic Rent, Interim Rent,
the Final Rent Payment and the Supplemental Rent and all other payment
obligations of Lessee under the Lease including without limitation the payment
of the Termination Value by Lessee or its designee pursuant to the exercise or
deemed exercise of Lessee's option under Section 15 of the Lease or pursuant to
any other provisions of the Lease, constitute the valid and binding obligations
of Lessee enforceable against Lessee in accordance with their respective terms,
except as such enforceability may be limited by (a) applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors'
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rights generally and (b) general principles of equity (including, without
limitation, the availability or non-availability of equitable remedies),
whether considered in a proceeding at law or in equity; provided that the
foregoing shall not, in my opinion, substantially interfere with the practical
realization of the benefits expressed in the Lease and the other Operative
Documents, except for the economic consequences of any procedural delay which
may result therefrom.
4. There is no action, suit or proceeding pending for which
process has been served, or, to the best of my knowledge, threatened, against
or affecting Lessee or any of its Subsidiaries before any court or arbitrator
or any governmental body, agency or official in which there is a reasonable
possibility of an adverse decision which could materially adversely affect the
business, consolidated financial position or consolidated results of operations
of Lessee and its Consolidated Subsidiaries, considered as a whole, or which in
any manner questions the validity or enforceability of any of the Operative
Documents.
5. Neither Lessee nor any of its Subsidiaries is an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
6. Neither Lessee nor any of its respective Subsidiaries is a
"holding company," or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company," as such terms are defined in the Public Utility Company Act of 1935,
as amended.
7. If a Georgia court held the Lease to be a financing
transaction instead of a true lease, (a) the Lease, and the obligations of
Lessee under the Lease with respect to the payment of Base Rent, Interim Rent,
the Final Rent Payment and Supplemental Rent and all other payment obligations
of Lessee under the Lease including without limitation the payment of the
Termination Value by Lessee or its designee pursuant to the exercise of
Lessee's option under Section 15 of the Lease or pursuant to any other
provision of the Lease, would constitute the valid and binding obligations of
Lessee and would be enforceable against Lessee in accordance with its terms,
except as may be limited by applicable bankruptcy, insolvency,
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reorganization or other similar laws affecting creditors' rights and general
principles of equity, (b) the "loan" to Lessee evidenced by the Lease would not
be contractually usurious under the laws of the State of Georgia provided that
any effective rate of interest (including, without limitation, any charge, fee,
premium or minimum balance requirement) deemed earned by Lessor under the Lease
and the other Operative Documents does not exceed 5.0% per month at any time,
and (c) the Lease would be enforceable as a security agreement under the laws
of the State of Georgia and Lessor would be entitled to foreclose the Liens
granted under the Lease following an Event of Default in accordance with the
power of sale therein granted.
8. The execution, delivery and performance by Lessee of the
Operative Documents do not conflict with or result in a violation of any law,
statute, rule or regulation of the State of Georgia (or any subdivision
thereof), or, except for the filing of appropriate financing statements,
require any consent of or filing or registration with an Governmental Authority
of the State of Georgia (or any subdivision thereof) or pursuant to the UCC
which has not been obtained or completed and which is necessary for the
validity and enforceability thereof.
I am qualified to practice in the State of Georgia and do not purport
to be expert on any laws other than the laws of the State of Georgia, the
federal laws of the United States, and the UCC, and this opinion is rendered
only with respect to such laws. I have made no independent investigation of the
laws of any other jurisdiction (except with respect to the UCC).
In rendering the opinions above, I have assumed, with your permission,
that each of the Operative Documents has been duly authorized, executed and
delivered by Lessor and, to the extent provided therein, constitutes the legal,
valid and binding obligation of Lessor enforceable in accordance with its
terms, except as such enforceability may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and (ii) general
principles of equity (including, without limitation, the availability or
non-availability of equitable remedies), whether considered in a proceeding at
law or in equity.
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This opinion is delivered to you at the request of Lessee in
connection with the transaction referenced above and may not, without my prior
written consent, be communicated to or relied upon by anyone other than you,
your successors and assigns, except that it may be communicated to ▇▇▇▇▇, Day,
▇▇▇▇▇▇ & ▇▇▇▇▇, your special counsel.
This opinion speaks only as of the date hereof, and I do not undertake
any duty to advise you of any change herein.
Very truly yours,
-----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Assistant General Counsel
Flowers Industries, Inc.
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EXHIBIT E
PROGRESS PAYMENT AGREEMENT
This Progress Payment Agreement ("Agreement") is made this ____ day of
_______________, 1995 in conjunction with the Master Lease Agreement dated
October 20, 1995 (the "Lease"), between Wachovia Leasing Corporation (the
"Lessor") and Flowers Industries, Inc. (the "Lessee"). All capitalized terms
used in this Agreement and not otherwise defined herein shall have the meanings
assigned to them in Schedule 1(b) to the Lease.
Pursuant to the Master Lease Agreement, the Lessee intends to request
from time to time that the Lessor acquire and lease to the Lessee items of
Equipment for a Phase to be located at the following Applicable Site:
_______________ (the "Proposed Equipment"), and that the Lessor purchase the
Proposed Equipment from Vendors designated by the Lessee. The Vendors may
require advance payments, progress payments, or full payment for the Proposed
Equipment prior to delivery and acceptance of the Proposed Equipment by the
Lessee. To induce the Lessor to make such payments for the Proposed Equipment,
the Lessee agrees as follows:
1. All Proposed Equipment purchased by Lessor pursuant to this
Agreement will be the Lessor's property and on the Lease Addition Date will be
Equipment leased under the Lease.
2. The term of the Lease with respect to the Proposed Equipment
will not commence until the Lease Addition Date with respect thereto. Until the
Lease Addition Date as to the Proposed Equipment, a charge shall accrue on all
such advances, progress or other payments made by the Lessor equal to an amount
per annum which is the product of (i) advances or payment outstanding from the
date any such advances are outstanding, (ii) 80% of the Base Rate and (iii) the
actual number days in the period/360 (such amount being so determined being
"Additional Rent"). Such Additional Rent shall accrue until the Lease Addition
Date, whereupon it shall be capitalized and added to Equipment Cost for such
Phase pursuant to Section 3(a) of the Lease.
3. Lessee shall obtain and maintain insurance in form and
substance satisfactory Lessor insuring Lessor's interest in the
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Equipment to the extent of the advance or progress payments made by Lessor.
4. Upon delivery and acceptance of the Equipment by the Lessee,
the Lessee will execute and deliver to the Lessor the Lease Supplement, and
satisfy the other conditions set forth in Section 28(c), with respect to the
Proposed Equipment, commencing the Lease with respect thereto.
5. If for any reason whatsoever the Lessee fails to comply with
any of the terms hereof or of the Lease or if the Lease Addition Date has not
occurred as to any unit of Proposed Equipment by _________________, the Lessee
will reimburse the Lessor, on demand, and at the Lessor's option, for all
amounts advanced or paid by the Lessor with respect to such unit of Proposed
Equipment, plus the unpaid Additional Rent in accordance with Paragraph 2, and
the Lessor will assign to the Lessee all of the Lessor's right, title and
interest in and to the Proposed Equipment.
6. In the event a Vendor of Proposed Equipment covered hereunder
fails to perform all of the covenants, conditions, stipulations, and agreements
to manufacture, ship, or deliver (collectively referred to as the "Terms"), or
for any reason whatsoever does not perform the Terms, after advance payments,
progress payments, or full payments have been made by the Lessor with respect
to the Proposed Equipment, the Lessee will reimburse the Lessor on demand, for
all amounts advanced or paid by the Lessor with respect to the Proposed
Equipment, plus the unpaid Additional Rent in accordance with Paragraph 2, and
the Lessor will assign to the Lessee every right, title and interest the Lessor
may have in and to the Proposed Equipment.
7. A waiver of a specific default shall not be a waiver of
subsequent or any other default. No waiver of any provision of the Lease or
this Agreement shall be a waiver of any other provision or matter. No delay or
failure of the Lessor in exercising any right hereunder shall affect such
right, nor shall any single or partial exercise preclude any further exercise
thereof or the exercise of any other rights hereunder.
8. Except as herein and heretofore modified, the Lease shall
continue in full force and effect in accordance with its terms.
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9. No modifications to this Agreement shall be binding upon the
parties unless agreed to by each and every party in writing.
10. This Agreement may be executed in any number of counterparts,
all of which taken together shall constitute one
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and the same instrument and any of the parties hereto may execute this
Agreement by signing any such counterpart.
LESSOR:
WACHOVIA LEASING CORPORATION
By:
-----------------------------------
Title:
LESSEE:
[CORPORATE SEAL] FLOWERS INDUSTRIES, INC.
By:
-----------------------------------
Title:
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EXHIBIT F
FORM OF APPROVED SUBLEASE
SUBLEASE
THIS SUBLEASE AGREEMENT is made as of the_____, day of
______________________, ______, by and between FLOWERS INDUSTRIES,
INC. a Georgia corporation ("Sublessor"), and ______________________
("Sublessee").
WITNESSETH:
WHEREAS, the Sublessor is a party to that certain Master
Lease Agreement, dated as October 20, 1995 (as from time to time amended,
modified or supplemented, the "Primary Lease") between Sublessor, as lessee,
and Wachovia Leasing Corporation ("Wachovia"), as lessor, pursuant to which
Sublessor leased from Wachovia certain equipment (the "Equipment"), including,
but not limited to, the Equipment described on Schedule 1 attached hereto and
incorporated herein by reference the "Subleased Equipment");
WHEREAS, the Sublessee wishes to lease the Subleased
Equipment from the Sublessor, subject to the terms and conditions of the Lease;
NOW THEREFORE, in consideration of the foregoing, and in
consideration of the mutual covenants and agreements set forth herein, the
parties hereto hereby agree as follows:
1. Terms. The Sublessor hereby agrees to lease to the
Sublessee the Subleased Equipment for a lease term of this Sublease commencing
on ________________ and ending on the earlier to occur of (a) ________________
and (b) the Scheduled Lease Termination Date (as such term in defined in the
Primary Lease) application to the Subleased Equipment.
2. Rent. The Sublessee hereby agrees to pay rental for the
Equipment in the amounts and on the date set forth on Schedule 2 hereto.
3. Compliance with the Primary Lease. During the term of
this Sublease, the Sublessee shall comply with and perform all
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requirements, duties and obligations of the lessee under the Primary Lease in
respect of the Subleased Equipment.
4. Subordinate to the Primary Lease. This sublease subject
and subordinate to the terms of the Primary Lease and the liens created
thereby.
5. Events of Default. Any "Event of Default," as such term
is defined int he Primary Lease, in respect of the Subleased Equipment shall be
an Event of Default hereunder. Upon the occurrence of any such Event of
Default, the Sublessor shall have, in respect of the Sublessee and the
Subleased Equipment, all the rights and remedies which would be available to
Wachovia int he event of the occurrence of an Designated Event of Default
under, and as such term is defined in, the Primary Lease, which rights and
remedies are hereby incorporated herein by reference.
6. Governing Law. This Sublease shall be governed by the
laws of the State of Georgia, without regard to conflicts of law principles.
IN WITNESS THEREOF, the parties hereto have executed this
Sublease as of the date and year first above written.
"Sublessor"
FLOWERS INDUSTRIES
By:
--------------------------------------
Name:
Title:
"Sublessee"
[NAME OF SUBLESSEE]
By:
--------------------------------------
Name:
Title:
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FIRST AMENDMENT TO MASTER LEASE AGREEMENT
THIS FIRST AMENDMENT TO MASTER LEASE AGREEMENT (this "First
Amendment") is dated as of the 20th day of October, 1996 between FLOWERS
INDUSTRIES, INC. (the "Lessee"), and WACHOVIA LEASING CORPORATION (the
"Lessor").
WITNESSETH:
WHEREAS, the Lessee and the Lessor executed and delivered that certain
Master Lease Agreement, dated as of the 20th day of October, 1995 (the
"Lease");
WHEREAS, contemporaneously herewith, the Lessee has furnished the
Lessor a Completion Certificate with respect to the Phase for the Applicable
Site located in Jamestown, North Carolina, but has acknowledged that it was
unable to achieve Completion with respect to the Phases for the Applicable
Sites located in Miami, Florida (the "Miami Phase") and in San Antonio, Texas
(the "San Antonio Phase") by the date which is six months from the respective
Phase Commencement Dates for such Phases, and has requested that the Lessor
grant an appropriate extension of time and other amendments to the Lease and
the Lessor has agreed to such amendments to the Lease, subject to the terms and
conditions hereof;
NOW, THEREFORE, for and in consideration of the above premises and
other good and valuable consideration, the receipt and sufficiency of which
hereby is acknowledged by the parties hereto, the Lessee and the Lessor hereby
covenant and agree as follows:
1. Definitions. Unless otherwise specifically defined herein,
each term used herein which is defined in the Lease shall have the meaning
assigned to such term in the Lease. Each
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reference to "hereof", "hereunder", "herein" and "hereby" and each other
similar reference and each reference to "this Agreement" and each other similar
reference contained in the Lease shall from and after the date hereof refer to
the Lease as amended hereby.
2. Amendments to the Lease. The Lease hereby is amended by (A)
deleting the words "Scheduled Amount" in the second line of of Section
3(b)(i)(B) of the Lease and in the second line of Section 3(b)(ii)(B) of the
Lease, and substituting therefor the words "Unrecovered Equipment Cost"), and
(B) amending certain defined terms contained in Schedule 1(b) thereto:
(i) the term "Acquisition Period" hereby is amended by
deleting it in its entirety and substituting therefor the following:
"Acquisition Period": a period commencing on the
Closing Date and ending (x) as to the Phases for the
Applicable Sites located in Miami, Florida and San
Antonio, Texas, April 21, 1997, and (y) as to all
other Phases, 12 months after the Closing Date.
(ii) the term "Non-Completion Event" hereby is amended by
deleting clause (i) thereof and substituting therefor the following:
(i) (x) as to the Phases for the Applicable Sites
located in Miami, Florida and San Antonio, Texas, April
21, 1997, and (y) as to all other Phases, the date
which is six months after the Phase Commencement Date
for such Phase, and
(iii) the term "Phase Completion Date" hereby is amended by
deleting clause (ii) thereof and substituting therefor the following:
(ii) (x) as to the Phases for the Applicable Sites
located in Miami, Florida and San Antonio, Texas, April
21, 1997, and (y) as to all other Phases,
148
the date which is six months after the Phase
Commencement Date for such Phase, and
3. Waiver by the Lessor. The Lessor hereby waives the right to
terminate the Lease as to the Miami Phase and the San Antonio Phase as a result
of the failure to achieve Completion by the date which is six months after the
respective Phase Commencement Date for such Phases (but does not waive such
right if Completion has not occurred by April 21, 1997).
4. Restatement of Representations and Warranties. The Lessor
hereby restates and renews each and every representation and warranty
heretofore made by it in the Lease and the other Operative Documents as fully
as if made on the date hereof (except for any representations which were
correct on the date of the Lease but are not correct on the date hereof because
of a change permitted by the Lease or the Operative Documents) and with
specific reference to this First Amendment and all other documents executed
and/or delivered in connection herewith.
5. Effect of Amendment. Except as set forth expressly
hereinabove, all terms of the Lease and the other Operative Documents shall be
and remain in full force and effect, and shall constitute the legal, valid,
binding and enforceable obligations of the Lessee.
6, Ratification. The Lessee hereby restates, ratifies and
reaffirms each and every term, covenant and condition set forth in the Lease
and the other Operative Documents effective as of the date hereof.
7. Counterparts. This First Amendment may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to
be an original and all of which counterparts, taken together, shall constitute
but one and the same instrument.
8. Section References. Section titles and references used in
this First Amendment shall be without substantive meaning or content of any
kind whatsoever and are not a part of the agreements among the parties hereto
evidenced hereby.
3
149
9. No Default. To induce the Lessor to enter into this First
Amendment and to continue to make advances of Facility Cost for the Miami Phase
and the San Antonio Phase pursuant to the Lease, the Lessee hereby acknowledges
and agrees that, as of the date hereof, and after giving effect to the terms
hereof, there exists (i) no Default or Event of Default and (ii) no right of
offset, defense, counterclaim, claim or objection in favor of the Lessee
arising out of or with respect to the Lease or other Operative Documents.
10. Further Assurances. The Lessee agrees to take such further
actions as the Lessor shall reasonably request in connection herewith to
evidence the amendments herein contained to the Lessee.
11. Governing Law. This First Amendment shall be governed by and
construed and interpreted in accordance with, the laws of the State of Georgia.
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150
IN WITNESS WHEREOF, the Lessee and the Lessor have caused this First
Amendment to be duly executed, under seal, by its duly authorized officer as of
the day and year first above written.
LESSEE:
FLOWERS INDUSTRIES, INC. (SEAL)
By:
-------------------------------------
Title:
LESSOR:
WACHOVIA LEASING CORPORATION (SEAL)
By:
-------------------------------------
Title:
5
151
SECOND AMENDMENT TO MASTER LEASE AGREEMENT
THIS SECOND AMENDMENT TO MASTER LEASE AGREEMENT (this "Second
Amendment") is dated as of the 20th day of April, 1997 between FLOWERS
INDUSTRIES, INC. (the "Lessee"), and WACHOVIA LEASING CORPORATION (the
"Lessor").
WITNESSETH:
WHEREAS, the Lessee and the Lessor executed and delivered that certain
Master Lease Agreement, dated as of the 20th day of October, 1995, as amended
by First Amendment to Master Lease Agreement dated as of October 20, 1996 (as
so amended, the "Lease");
WHEREAS, the Lessee has furnished the Lessor a Completion Certificate
with respect to the Phase for the Applicable Site located in Jamestown, North
Carolina, but has acknowledged that it was unable to achieve Completion with
respect to the Phases for the Applicable Sites located in Miami, Florida (the
"Miami Phase") and in San Antonio, Texas (the "San Antonio Phase") by the date
required for such Phases, and has requested that the Lessor grant an
appropriate extension of time and other amendments to the Lease and the Lessor
has agreed to such amendments to the Lease, subject to the terms and conditions
hereof;
NOW, THEREFORE, for and in consideration of the above premises and
other good and valuable consideration, the receipt and sufficiency of which
hereby is acknowledged by the parties hereto, the Lessee and the Lessor hereby
covenant and agree as follows:
1. Definitions. Unless otherwise specifically defined herein,
each term used herein which is defined in the Lease shall
152
have the meaning assigned to such term in the Lease. Each reference to
"hereof", "hereunder", "herein" and "hereby" and each other similar reference
and each reference to "this Agreement" and each other similar reference
contained in the Lease shall from and after the date hereof refer to the Lease
as amended hereby.
2. Amendments to the Lease. The Lease hereby is amended by
amending certain defined terms contained in Schedule 1(b) thereto:
(i) the term "Acquisition Period" hereby is amended by
deleting it in its entirety and substituting therefor the following:
"Acquisition Period": a period commencing on
the Closing Date and ending (x) as to the Phases for the
Applicable Sites located in Miami, Florida and San
Antonio, Texas, October 21, 1997, and (y) as to all
other Phases, 12 months after the Closing Date.
(ii) the term "Non-Completion Event" hereby is amended by
deleting clause (i) thereof and substituting therefor the following:
(i) (x) as to the Phases for the Applicable Sites
located in Miami, Florida and San Antonio, Texas,
October 21, 1997, and (y) as to all other Phases, the
date which is six months after the Phase Commencement
Date for such Phase, and
(iii) the term "Phase Completion Date" hereby is amended by
deleting clause (ii) thereof and substituting therefor the following:
(ii) (x) as to the Phases for the Applicable Sites
located in Miami, Florida and San Antonio, Texas,
October 21, 1997, and (y) as to all other Phases, the
date which is six months after the Phase Commencement
Date for such Phase, and
153
3. Waiver by the Lessor. The Lessor hereby waives the right to
terminate the Lease as to the Miami Phase and the San Antonio Phase as a result
of the failure to achieve Completion by the date originally required by the
Lease (but does not waive such right if Completion has not occurred by October
21, 1997).
4. Restatement of Representations and Warranties. The Lessor
hereby restates and renews each and every representation and warranty
heretofore made by it in the Lease and the other Operative Documents as fully
as if made on the date hereof (except for any representations which were
correct on the date of the Lease but are not correct on the date hereof because
of a change permitted by the Lease or the Operative Documents) and with
specific reference to this Second Amendment and all other documents executed
and/or delivered in connection herewith.
5. Effect of Amendment. Except as set forth expressly
hereinabove, all terms of the Lease and the other Operative Documents shall be
and remain in full force and effect, and shall constitute the legal, valid,
binding and enforceable obligations of the Lessee.
6, Ratification. The Lessee hereby restates, ratifies and
reaffirms each and every term, covenant and condition set forth in the Lease
and the other Operative Documents effective as of the date hereof.
7. Counterparts. This Second Amendment may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to
be an original and all of which counterparts, taken together, shall constitute
but one and the same instrument.
8. Section References. Section titles and references used in
this Second Amendment shall be without substantive meaning or content of any
kind whatsoever and are not a part of the agreements among the parties hereto
evidenced hereby.
9. No Default. To induce the Lessor to enter into this Second
Amendment and to continue to make advances of Facility Cost for the Miami Phase
and the San Antonio Phase pursuant to
3
154
the Lease, the Lessee hereby acknowledges and agrees that, as of the date
hereof, and after giving effect to the terms hereof, there exists (i) no
Default or Event of Default and (ii) no right of offset, defense, counterclaim,
claim or objection in favor of the Lessee arising out of or with respect to the
Lease or other Operative Documents.
10. Further Assurances. The Lessee agrees to take such further
actions as the Lessor shall reasonably request in connection herewith to
evidence the amendments herein contained to the Lessee.
11. Governing Law. This Second Amendment shall be governed by
and construed and interpreted in accordance with, the laws of the State of
Georgia.
4
155
IN WITNESS WHEREOF, the Lessee and the Lessor have caused this Second
Amendment to be duly executed, under seal, by its duly authorized officer as of
the day and year first above written.
LESSEE:
FLOWERS INDUSTRIES, INC. (SEAL)
By:
-------------------------------------
Title:
LESSOR:
WACHOVIA LEASING CORPORATION (SEAL)
By:
-------------------------------------
Title:
5
156
THIRD AMENDMENT TO MASTER LEASE AGREEMENT AND AMENDMENT TO
ACQUISITION, AGENCY, INDEMNITY AND SUPPORT AGREEMENT
THIS THIRD AMENDMENT TO MASTER LEASE AGREEMENT AND AMENDMENT TO
ACQUISITION, AGENCY, INDEMNITY AND SUPPORT AGREEMENT(this "Amendment") is dated
as of June 10, 1998 between FLOWERS INDUSTRIES, INC. (the "Lessee"), and
WACHOVIA LEASING CORPORATION (the "Lessor").
WITNESSETH:
WHEREAS, the Lessee and the Lessor executed and delivered that certain
Master Lease Agreement, dated as of the 20th day of October, 1995, as amended
by First Amendment to Master Lease Agreement dated as of October 20, 1996 and
by Second Amendment to Master Lease Agreement dated as of April 20, 1997 (as so
amended, the "Lease");
WHEREAS, Completion has been achieved, and the Phase Commencement Date
has occurred, with respect to the Applicable Sites located in Miami, Florida,
Jamestown, North Carolina and San Antonio, Texas, and the Lease provides for up
to 5 additional Phases, but the Acquisition Period has terminated under the
Lease; and
WHEREAS, The Lessee has requested that the Lease be amended to (i)
provide for a new Acquisition Period for 5 additional Phases (the "Subsequent
Phases"), including Phases in Spartanburg, South Carolina, Stilwell, Oklahoma
and Suwanee, Georgia, and 2 other Phases not yet identified, and (ii) increase
the maximum aggregate Equipment Cost from $50,000,000 to $80,000,000, and the
Lessor has agreed to such amendments to the Lease, as well as an amendment to
the Agency Agreement to reflect the increase described in clause (ii), subject
to the terms and conditions hereof;
NOW, THEREFORE, for and in consideration of the above premises and
other good and valuable consideration, the receipt and sufficiency of which
hereby is acknowledged by the parties hereto, the Lessee and the Lessor hereby
covenant and agree as follows:
157
1. Definitions. Unless otherwise specifically defined herein,
each term used herein which is defined in the Lease shall have the meaning
assigned to such term in the Lease. Each reference to "hereof", "hereunder",
"herein" and "hereby" and each other similar reference and each reference to
"this Agreement" and each other similar reference contained in the Lease shall
from and after the date hereof refer to the Lease as amended hereby.
2. Amendments to Section 3(a) of the Lease. Section 3(a) of the
Lease hereby is amended by deleting the figure "$50,000,000" in the 23rd and
25th lines thereof, and substituting therefor the figure "$80,000,000".
3. Amendment to Section 29 of the Lease. Section 29 of the Lease
hereby is amended by adding a new paragraph (l) thereto, as follows:
(l) Year 2000 Compliance. All computer systems used
by the Lessee and the Lessee's Subsidiaries will be, on or prior to
December 31, 1999, capable of the following:
(i) handling date information involving all
and any dates before, during and/or after January 1, 2000,
including accepting input, providing output and performing
date calculations in whole or in part;
(ii) operating, accurately without
interruption on and in respect of any and all dates before,
during and/or after January 1, 2000 and without any change in
performance;
(iii) responding to and processing two
digit year input without creating any ambiguity as to the
century; and
(iv) storing and providing date input information
without creating any ambiguity as to the century;
except where the failure to be so capable would not reasonably be
expected to have a Material Adverse Effect.
4. Amendments to Schedule 1(b) to the Lease. The Schedule 1(b)
of the Lease hereby is amended as follows:
(i) the term "Acquisition Period" hereby is amended by
deleting it in its entirety and substituting therefor the following:
"Acquisition Period": (i) as to the Initial
Phases, a period commencing on the Closing Date
2
158
and ending (x) as to the Phases for the Applicable Sites
located in Miami, Florida and San Antonio, Texas,
October 21, 1997, and (y) as to the Phase for the
Applicable Site located in Jamestown, North Carolina,
12 months after the Closing Date; and (ii) as to each
of the Subsequent Phases, 15 months after the Third
Amendment Date.
(ii) the following new definitions hereby are added in
appropriate alphabetical sequence:
"Initial Phases" means the Phases for the
Applicable Sites located in Miami, Florida, Jamestown,
North Carolina and San Antonio, Texas, as to which
Completion and the Phase Commencement Date occurred
prior to the Third Amendment Date.
"Subsequent Phases" means the following
Phases, as to which Completion and the Phase
Commencement Date has not occurred prior to the Third
Amendment Date: (i) Phases for Applicable Sites to be
located in Spartanburg, South Carolina, Stilwell,
Oklahoma and Suwanee, Georgia; and (ii) 2 other Phases
for Applicable Sites not identified at the time of the
Third Amendment.
"Third Amendment Date" means June 10, 1998.
5. Amendment to Agency Agreement. Section C.1.(b)(v) of Article 1
of the Agency Agreement hereby is amended by deleting the figure "$50,000,000"
in the 2nd line thereof, and substituting therefor the figure "$80,000,000".
6. Restatement of Representations and Warranties. The Lessor
hereby restates and renews each and every representation and warranty
heretofore made by it in the Lease and the other Operative Documents as fully
as if made on the date hereof (except for any representations which were
correct on the date of the Lease but are not correct on the date hereof because
of a change permitted by the Lease or the Operative Documents) and with
specific reference to this Amendment and all other documents executed and/or
delivered in connection herewith.
7. Effect of Amendments. Except as set forth expressly
hereinabove, all terms of the Lease, the Agency Agreement and the other
Operative Documents shall be and remain in full force and effect, and shall
constitute the legal, valid, binding and enforceable obligations of the Lessee.
8. Ratification. The Lessee hereby restates, ratifies and
reaffirms each and every term, covenant and condition set forth
3
159
in the Lease, the Agency Agreement and the other Operative Documents effective
as of the date hereof.
9. Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which counterparts, taken together, shall constitute but one and the same
instrument.
10. Section References. Section titles and references used in this
Amendment shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreements among the parties hereto
evidenced hereby.
11. No Default. To induce the Lessor to enter into this Amendment
and to continue to make advances of Facility Cost for the Subsequent Phases
pursuant to the Lease, the Lessee hereby acknowledges and agrees that, as of
the date hereof, and after giving effect to the terms hereof, there exists (i)
no Default or Event of Default and (ii) no right of offset, defense,
counterclaim, claim or objection in favor of the Lessee arising out of or with
respect to the Lease or other Operative Documents.
12. Further Assurances. The Lessee agrees to take such further
actions as the Lessor shall reasonably request in connection herewith to
evidence the amendments herein contained to the Lessee.
13. Governing Law. This Amendment shall be governed by and
construed and interpreted in accordance with, the laws of the State of Georgia.
14. Conditions Precedent. This Amendment shall become effective
only upon:
(i) execution and delivery of this Amendment by each of the
parties hereto;
(ii) receipt by the Lessor of a favorable opinion or opinions of
Assistant General Counsel to the Lessee, dated as of the date hereof,
substantially in the form of Exhibit A hereto;
(iii) receipt by the Lessor of a certificate substantially in the form
of Exhibit B hereto, dated as of the date hereof, signed by an authorized
officer of the Lessee to the effect that (i) no Default has occurred and is
continuing on the date hereof and (ii) the representations and warranties of
Lessee contained in the Lease and the other Operative Documents are true and
correct on the date hereof (except for any representations which were correct on
the date of the Lease but are not correct on the
4
160
date hereof because of a change permitted by the Lease or the Operative
Documents);
(iv) receipt by the Lessor of a certificate of the Secretary or
Assistant Secretary of the Lessee substantially in the form of Exhibit C
hereto, dated as of the date hereof, setting forth (i) resolutions of its board
of directors authorizing the execution,delivery and performance of the
obligations contained in this Amendment, (ii) the officers of the Lessee
specified in such Secretary's Certificates that are authorized to sign this
Amendment and (iii) a statement that there have been no amendments to the
articles or certificate of incorporation and the bylaws of the Lessee since the
Closing Date or, if there have been any such amendments attaching such
amendments; and
(v) receipt by the Lessor of a structuring fee in the amount of
$40,000.
5
161
IN WITNESS WHEREOF, the Lessee and the Lessor have caused this
Amendment to be duly executed, under seal, by its duly authorized officer as of
the day and year first above written.
LESSEE:
FLOWERS INDUSTRIES, INC. (SEAL)
By:
--------------------------------------
Title:
LESSOR:
WACHOVIA LEASING CORPORATION (SEAL)
By:
--------------------------------------
Title:
6
162
EXHIBIT A
[NOTE: THE ENFORCEABILITY PORTION OF THIS OPINION MAY BE GIVEN BY
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP]
FORM OF LEGAL OPINION OF
GENERAL COUNSEL OF LESSEE
[LESSEE LETTERHEAD]
June 10, 1998
Wachovia Leasing Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Dear Sirs:
I am the Assistant General Counsel for Flowers Industries,
Inc., a Georgia corporation ("Lessee"). This opinion is being delivered
pursuant to Section 12(ii) of that certain Third Amendment to Master Lease
Agreement and Amendment to Acquisition, Agency, Indemnity and Support Agreement
dated as of even date herewith between Lessee and Wachovia Leasing Corporation
(the "Amendment"). Capitalized terms used but not defined herein have the
meanings set forth in the Amendment or in the Lease referred to therein or in
Schedule 1(b) to the Lease.
I have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as I have deemed necessary or advisable
for purposes of this opinion.
Upon the basis of the foregoing, I am of the opinion that:
1. The execution, delivery and performance by Lessee of the
Amendment is within the Lessee's corporate powers, has been duly authorized by
all necessary corporate action, requires no action by or in respect of, or
filing with, any governmental body, agency or official, does not contravene, or
constitute a default under, any provision of applicable law or regulation or of
the certificate of incorporation or by-laws of Lessee or of any material
agreement, judgment, injunction, order, decree or other instrument relating to
Debt which is binding upon Lessee, and does not result in the creation or
imposition of any Lien on any asset of Lessee (other than the
7
163
security interest in the Equipment created by the Lease in the event that the
Lease is recharacterized as a financing transaction).
2. The Amendment constitutes the valid and binding obligations of
Lessee enforceable against Lessee in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and general principles of equity (including,
without limitation, the availability or non-availability of equitable
remedies), whether considered in a proceeding at law or in equity; provided
that the foregoing shall not, in my opinion, substantially interfere with the
practical realization of the benefits expressed in the Amendment, except for
the economic consequences of any procedural delay which may result therefrom.
3. There is no action, suit or proceeding pending for which
process has been served, or, to the best of my knowledge, threatened, against
or affecting Lessee or any of its Subsidiaries before any court or arbitrator
or any governmental body, agency or official in which there is a reasonable
possibility of an adverse decision which could materially adversely affect the
business, consolidated financial position or consolidated results of operations
of Lessee and its Consolidated Subsidiaries, considered as a whole, or which in
any manner questions the validity or enforceability of the Amendment.
4. The execution, delivery and performance by Lessee of the
Amendment does not conflict with or result in a violation of any law, statute,
rule or regulation of the State of Georgia (or any subdivision thereof), or
require any consent of or filing or registration with an Governmental Authority
of the State of Georgia (or any subdivision thereof) or pursuant to the UCC
which has not been obtained or completed and which is necessary for the
validity and enforceability thereof.
I am qualified to practice in the State of Georgia and do not
purport to be expert on any laws other than the laws of the State of Georgia,
the federal laws of the United States, and the UCC, and this opinion is
rendered only with respect to such laws. I have made no independent
investigation of the laws of any other jurisdiction (except with respect to the
UCC).
In rendering the opinions above, I have assumed, with your
permission, that Amendment has been duly authorized, executed and delivered by
Lessor and, to the extent provided therein, constitutes the legal, valid and
binding obligation of Lessor enforceable in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and general principles of equity (including,
without limitation, the availability or non-availability of equitable
remedies), whether considered in a proceeding at law or in equity.
8
164
This opinion is delivered to you at the request of Lessee in
connection with the transaction referenced above and may not, without my prior
written consent, be communicated to or relied upon by anyone other than you,
your successors and assigns, except that it may be communicated to ▇▇▇▇▇, Day,
▇▇▇▇▇▇ & ▇▇▇▇▇, your special counsel.
This opinion speaks only as of the date hereof, and I do not
undertake any duty to advise you of any change herein.
Very truly yours,
------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Assistant General Counsel
Flowers Industries, Inc.
9
165
EXHIBIT B
CLOSING CERTIFICATE
Reference is made to the Third Amendment to Master Lease Agreement and
Amendment to Acquisition, Agency, Indemnity and Support Agreement as of even
date herewith between Lessee and Wachovia Leasing Corporation (the
"Amendment"). Capitalized terms used but not defined herein have the meanings
set forth in the Amendment or in the Lease referred to therein or in Schedule
1(b) to the Lease.
Pursuant to Section 12(iii) of the Amendment, ____________________,
the duly authorized ____________________ of the Lessee, hereby certifies to the
Lessor that (i) no Default has occurred and is continuing as of the date
hereof, and (ii) the representations and warranties of Lessee contained in the
Lease and the other Operative Documents are true and correct on the date hereof
(except for any representations which were correct on the date of the Lease but
are not correct on the date hereof because of a change permitted by the Lease
or the Operative Documents).
Certified as of June 10, 1998.
FLOWERS INDUSTRIES, INC. (SEAL)
By:
------------------------------------
Title:
10
166
EXHIBIT C
SECRETARY'S CERTIFICATE
The undersigned, ______________________, [Secretary/Assistant Secretary] of
Flowers Industries, Inc. (the "Lessee"), hereby certifies that he has been duly
elected, qualified and is acting in such capacity and that, as such, he is
familiar with the facts herein certified and is duly authorized to certify the
same, and hereby further certifies, in connection with the Third Amendment to
Master Lease Agreement and Amendment to Acquisition, Agency, Indemnity and
Support Agreement dated as of even date herewith between Lessee and Wachovia
Leasing Corporation (the "Amendment") that:
1. Attached hereto as Annex 1 is a complete and correct copy of
the resolutions duly adopted by the Board of Directors of the Lessee on
_________________, 1998 approving, and authorizing the execution and delivery
of, the Amendment. Such resolutions have not been repealed or amended and are
in full force and effect, and no other resolutions or consents have been
adopted by the Board of Directors of the Lessee in connection therewith.
2. _____________________, who is _________________ of the Lessee,
signed the Amendment, was duly elected, qualified and acting as such at the
time he signed the Amendment, and his signature appearing on the Amendment is
his genuine signature.
3. Since October 20, 1995, there have been no amendments to the
articles or certificate of incorporation and the bylaws of the Lessee [EXCEPT ,
COPIES OF WHICH ARE ATTACHED HERETO AS ANNEX[ES] ].
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the day of
June, 1998.
--------------------------------------
Name:
Title: [Secretary/Assistant Secretary]
11
167
FOURTH AMENDMENT TO MASTER LEASE AGREEMENT
THIS FOURTH AMENDMENT TO MASTER LEASE AGREEMENT(this "Amendment") is
dated as of January 15, 1999 between FLOWERS INDUSTRIES, INC. (the "Lessee"),
and WACHOVIA LEASING CORPORATION (the "Lessor").
W I T N E S S E T H:
WHEREAS, the Lessee and the Lessor executed and delivered that certain
Master Lease Agreement, dated as of the 20th day of October, 1995, as amended
by that certain First Amendment to Master Lease Agreement dated as of October
20, 1996, by that certain Second Amendment to Master Lease Agreement dated as
of April 20, 1997, and by that certain Third Amendment to Master Lease
Agreement dated as of June 10, 1998 (as so amended, the "Lease"); and
WHEREAS, the Lessee and the Lessor have agreed to amend certain
provisions of the Lease as set forth below;
NOW, THEREFORE, for and in consideration of the above premises and
other good and valuable consideration, the receipt and sufficiency of which
hereby is acknowledged by the parties hereto, the Lessee and the Lessor hereby
covenant and agree as follows:
1. Definitions. Unless otherwise specifically defined herein,
each term used herein which is defined in the Lease shall have the meaning
assigned to such term in the Lease. Each reference to "hereof", "hereunder",
"herein" and "hereby" and each other similar reference and each reference to
"this Agreement" and each other similar reference contained in the Lease shall
from and after the date hereof refer to the Lease as amended hereby.
168
2. Amendments to Lease. (a) A new definition, "Designated
Sites," is hereby added to Schedule 1(b) of the Lease in proper alphabetical
order as follows:
"Designated Sites": Jamestown, North Carolina; Miami,
Florida; and San Antonio, Texas.
(b) The definition of "Basic Rent" set forth in Schedule 1(b) to
the Lease is amended and restated in its entirety as set forth below:
"Basic Rent": (a) after January 15, 1999, for each Phase at
the Designated Sites, with respect to any Rental Period, the amounts
payable for such Phase as Basic Rent for such Rental Period pursuant
to Section 3(b) of the Lease, consisting of the sum of the Scheduled
Payment therefor and 5.77% per annum.
(b) for each Phase at all Applicable Sites other than the
Designated Sites, with respect to any Rental Period, the amounts
payable for such Phase as Basic Rent for such Rental Period pursuant
to Section 3(b) of the Lease, consisting of the sum of the Scheduled
Payment therefor and either the Floating Rate Payment or, if the
Election has been made, the Fixed Rate Payment.
(c) Section 3(b) of the Lease is amended and restated in its
entirety as follows:
(b) Basic Rent
(i) Floating Rate Payment Without Election; Election
and Election Period.
Subject to clause (iii) below), for each Phase, if
the Lessee has not made an Election within the Election
Period pursuant to the provisions and requirements of this
Section 3(b)(i), after the Phase Completion Date for each
Phase, the Lessee's Basic Rent during the Lease Term for such
Phase shall be payable for each Rental Period in arrears on
the Rent Payment Date for such Rental Period in an amount
equal to the sum of (A) the amount equal to the percentage
set forth in
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Schedule 3(b) for such Rental Period (as it may be modified
pursuant hereto as a result of an Approval Appraisal), times
the Equipment Cost (the "Scheduled Amount") as to such Phase
(the "Scheduled Payment") plus (B) an amount accruing on the
Scheduled Amount as to such Phase at the Floating Rate for
such Rental Period (the "Floating Rate Payment"). In the
event any Scheduled Amount or other amount of Equipment Cost
based on the LIBO Rate is prepaid other than on the last day
of the Rental Period with respect thereto (including by
reason of the occurrence of a Lease Termination Date for any
reason) the Lessee shall compensate the Lessor for any
funding losses incurred by it as a result of such prepayment.
Schedule 3(b) also sets forth the Estimated Residual as to
each Phase as of the end of each Rental Period. The Lessee
agrees that the Lessor reserves the right to modify the
Estimated Residual or the percentage of Equipment Cost for
determining the Scheduled Amount, or both, as to any Rental
Period for the Equipment for any Phase as a result of the
receipt of an Approval Appraisal pursuant to the Agency
Agreement. With respect to any Phase, the Lessee shall have
the option to convert the Basic Rent for such Phase within
the Election Period from a Floating Rate Payment basis to a
Fixed Rate Payment basis (any exercise of such option
pursuant to the provisions and requirements of this Section
3(b)(i) for any Phase being an "Election" for such Phase).
The "Election Period" with respect to each Phase shall
commence on the Phase Completion Date for such Phase and
terminate on the last day of the Acquisition Period. Each
Election shall be made by written notice received not less
than 7 days prior to the effective date of such Election (and
not less than 7 days prior to the end of the relevant
Election Period).
(ii) Fixed Rate Payment With Election.
Subject to clause (iii) below, for each Phase, if the
Lessee has made an Election within the Election Period
pursuant to the provision and requirements of Section 3(b)(i),
after the Phase Completion Date for each Phase, the Lessee's
Basic Rent during the Lease
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Term for such Phase shall be payable for each Rental Period
in arrears on the Rent Payment Date for such Rental Period in
an amount equal to the sum of (A) the Scheduled Payment as to
such Phase for such Rental Period plus (B) an amount accruing
on the Scheduled Amount as to such Phase at the Fixed Rate
for such Rental Period (the "Fixed Rate Payment"). On the
first Rent Payment Date after the Lessee makes an Election
for a qualifying Phase, the Lessee shall make, if applicable,
a Basic Rent payment consisting of the Schedule Payment for
such Phase plus a proportionate Floating Rate Payment and
Fixed Rate Payment for such Phase, and the Lessee shall
compensate the Lessor for any funding losses incurred by it
as a result of such change from a Floating Rate Payment to a
Fixed Rate Payment prior to the end of the Rental Period.
(iii) Designated Sites.
For each Phase at a Designated Site, after January 15,
1999, for each Phase, the Lessee's Basic Rent during the
Lease Term for such Phase shall be payable for each Rental
Period in arrears on the Rent Payment Date for such Rental
Period in an amount equal to the sum of (A) the Scheduled
Payment as to such Phase for such Rental Period plus (B) an
amount accruing on the Scheduled Amount as to such Phase at
the rate of 5.77% per annum for such Rental Period. No
Election may be made with respect to a Designated Phase.
(d) Section 3(d) of the Lease is amended and restated in its
entirety as follows:
(d) Supplemental Rent. In addition to Interim Rent, Basic
Rent and the Final Rent Payment, the Lessee will also pay to the
Lessor, from time to time, upon demand by the Lessor, as additional
rent ("Supplemental Rent"), the following (but without duplication of
any amounts included in the calculation of Rent):
(i) all out-of-pocket costs and expenses reasonably
incurred by the Lessor in connection with the preparation,
negotiation, execution, delivery,
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performance and administration of this Lease and the other
Operative Documents, including, but not limited to, the
following: (A) fees and expenses of the Lessor, including,
without limitation, reasonable attorneys' fees and expenses
and the fees and expenses for the Approved Appraisal and the
Related Contracts for each Phase; (B) all other amounts,
including, without limitation, fees, indemnities, expenses,
compensation in respect of increased costs of any kind or
description payable under this Lease or any other Operative
Document; (C) all yield maintenance, capital adequacy and
other costs contemplated under Section 27 of this Lease and
(D) all out-of-pocket costs and expenses incurred by the
Lessor after the date of this Lease (including, without
limitation, reasonable attorneys' fees and expenses and other
expenses and disbursements reasonably incurred) associated
with (1) negotiating and entering into, or the giving or
withholding of, any future amendments, supplements, waivers
or consents with respect to this Lease; (2) any Loss Event,
Casualty Occurrence or termination of this Lease; and (3) any
Default or Event of Default and the enforcement and
preservation of the rights or remedies of the Lessor under
this Lease and the other Operative Documents and (4) all
reasonable costs and expenses incurred by the Lessor or any
of its Affiliates in initially selling participations in this
Lease, including, without limitation, the related reasonable
fees and out-of-pocket expenses of counsel for the Lessor or
its Affiliates, travel expenses, duplication and printing
costs and courier and postage fees, and excluding any fees
paid to Participants purchasing such a participation;
(ii) the amount that the Lessor determines, in the
exercise of its sole good faith discretion, to be its total
losses and costs incurred in connection with Basic Rent under
clause (a) of the definition of "Basic Rent" as a result of
the termination of this Lease prior to the end of the Basic
Term, such losses and costs to include, without limitation,
cost of funding, or, at the election of the Lessor (but
without duplication), losses or costs incurred as a result of
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the Lessor's terminating, liquidating, obtaining or
re-establishing any hedge, interest rate swap, or similar or
related trade position obtained by the Lessor with respect to
its costs to fund and refund Equipment Costs with respect to
the Designated Sites but excluding any loss of margin or
profit; and
(iii) all other amounts that the Lessee agrees
herein to pay other than Interim Rent, Basic Rent, the Final
Rent Payment and amounts described in clause (i) above.
6. Restatement of Representations and Warranties. The Lessor
hereby restates and renews each and every representation and warranty
heretofore made by it in the Lease and the other Operative Documents as fully
as if made on the date hereof (except for any representations which were
correct on the date of the Lease but are not correct on the date hereof because
of a change permitted by the Lease or the Operative Documents) and with
specific reference to this Amendment and all other documents executed and/or
delivered in connection herewith.
7. Effect of Amendments. Except as set forth expressly
hereinabove, all terms of the Lease and the other Operative Documents shall be
and remain in full force and effect, and shall constitute the legal, valid,
binding and enforceable obligations of the Lessee.
8. Ratification. The Lessee hereby restates, ratifies and
reaffirms each and every term, covenant and condition set forth in the Lease,
the Agency Agreement and the other Operative Documents effective as of the date
hereof.
9. Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which counterparts, taken together, shall constitute but one and the same
instrument.
10. Section References. Section titles and references used in this
Amendment shall be without substantive meaning or content
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of any kind whatsoever and are not a part of the agreements among the parties
hereto evidenced hereby.
11. No Default. To induce the Lessor to enter into this Amendment
and to continue to make advances of Facility Cost for the Subsequent Phases
pursuant to the Lease, the Lessee hereby acknowledges and agrees that, as of
the date hereof, and after giving effect to the terms hereof, there exists (i)
no Default or Event of Default and (ii) no right of offset, defense,
counterclaim, claim or objection in favor of the Lessee arising out of or with
respect to the Lease or other Operative Documents.
12. Further Assurances. The Lessee agrees to take such further
actions as the Lessor shall reasonably request in connection herewith to
evidence the amendments herein contained to the Lessee.
13. Governing Law. This Amendment shall be governed by and
construed and interpreted in accordance with, the laws of the
State of Georgia.
14. Conditions Precedent. This Amendment shall become effective
only upon:
(i) execution and delivery of this Amendment by each of the
parties hereto;
(ii) receipt by the Lessor of a certificate substantially in the
form of Exhibit A hereto, dated as of the date hereof, signed by an authorized
officer of the Lessee to the effect that (i) no Default has occurred and is
continuing on the date hereof and (ii) the representations and warranties of
Lessee contained in the Lease and the other Operative Documents are true and
correct on the date hereof (except for any representations which were correct
on the date of the Lease but are not correct on the date hereof because of a
change permitted by the Lease or the Operative Documents); and
(iii) receipt by the Lessor of a certificate of the Secretary or
Assistant Secretary of the Lessee substantially in the form of Exhibit B
hereto, dated as of the date hereof, setting forth (i) resolutions of its board
of directors authorizing the execution, delivery and performance of the
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obligations contained in this Amendment, (ii) the officers of the Lessee
specified in such Secretary's Certificates that are authorized to sign this
Amendment and (iii) a statement that there have been no amendments to the
articles or certificate of incorporation and the bylaws of the Lessee since the
Closing Date or, if there have been any such amendments attaching such
amendments.
IN WITNESS WHEREOF, the Lessee and the Lessor have caused this
Amendment to be duly executed, under seal, by its duly authorized officer as of
the day and year first above written.
LESSEE:
FLOWERS INDUSTRIES, INC. (SEAL)
By:
----------------------------------
Title:
LESSOR:
WACHOVIA LEASING CORPORATION (SEAL)
By:
----------------------------------
Title:
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EXHIBIT A
CLOSING CERTIFICATE
Reference is made to the Fourth Amendment to Master Lease Agreement
and Amendment to Acquisition, Agency, Indemnity and Support Agreement as of
even date herewith between Lessee and Wachovia Leasing Corporation (the
"Amendment"). Capitalized terms used but not defined herein have the meanings
set forth in the Amendment or in the Lease referred to therein or in Schedule
1(b) to the Lease.
Pursuant to Section 12(iii) of the Amendment, _____________________
_______________, the duly authorized _________________________ of the Lessee,
hereby certifies to the Lessor that (i) no Default has occurred and is
continuing as of the date hereof, and (ii) the representations and warranties
of Lessee contained in the Lease and the other Operative Documents are true and
correct on the date hereof (except for any representations which were correct
on the date of the Lease but are not correct on the date hereof because of a
change permitted by the Lease or the Operative Documents).
Certified as of January 15, 1999.
FLOWERS INDUSTRIES, INC. (SEAL)
By:
----------------------------------
Title:
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EXHIBIT B
SECRETARY'S CERTIFICATE
The undersigned, _________________, [Secretary/Assistant Secretary] of Flowers
Industries, Inc. (the "Lessee"), hereby certifies that he has been duly
elected, qualified and is acting in such capacity and that, as such, he is
familiar with the facts herein certified and is duly authorized to certify the
same, and hereby further certifies, in connection with the Fourth Amendment to
Master Lease Agreement and Amendment to Acquisition, Agency, Indemnity and
Support Agreement dated as of even date herewith between Lessee and Wachovia
Leasing Corporation (the "Amendment") that:
1. Attached hereto as Annex 1 is a complete and correct copy of
the resolutions duly adopted by the Board of Directors of the Lessee on
______________ ____, 199__ approving, and authorizing the execution and
delivery of, the Amendment. Such resolutions have not been repealed or amended
and are in full force and effect, and no other resolutions or consents have
been adopted by the Board of Directors of the Lessee in connection therewith.
2. ___________________, who is ____________ of the Lessee,
signed the Amendment, was duly elected, qualified and acting as such at the
time he signed the Amendment, and his signature appearing on the Amendment is
his genuine signature.
3. Since October 20, 1995, there have been no amendments to the
articles or certificate of incorporation and the bylaws of the Lessee [EXCEPT
___________________, COPIES OF WHICH ARE ATTACHED HERETO AS ANNEX[ES]______].
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of
the 15th day of January, 1999.
------------------------------------------
Name:
Title: [Secretary/Assistant Secretary]
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FIFTH AMENDMENT TO MASTER LEASE AGREEMENT AND SECOND
AMENDMENT TO ACQUISITION, AGENCY, INDEMNITY
AND SUPPORT AGREEMENT
THIS FIFTH AMENDMENT TO MASTER LEASE AGREEMENT AND SECOND AMENDMENT TO
ACQUISITION, AGENCY, INDEMNITY AND SUPPORT AGREEMENT(this "Amendment") is dated
as of May 20, 1999 between FLOWERS INDUSTRIES, INC. (the "Lessee"), and
WACHOVIA LEASING CORPORATION (the "Lessor").
WITNESSETH:
WHEREAS, the Lessee and the Lessor executed and delivered that certain
Master Lease Agreement, dated as of the 20th day of October, 1995, as amended
by First Amendment to Master Lease Agreement dated as of October 20, 1996, by
Second Amendment to Master Lease Agreement dated as of April 20, 1997, by Third
Amendment to Master Lease Agreement dated as of June 10, 1998, and by Fourth
Amendment to Master Lease Agreement dated as of January 15, 1999 (as so
amended, the "Lease");
WHEREAS, the Lessee and the Lessor have agreed that the Lease and
Agency Agreement be amended, subject to the terms and conditions hereof;
NOW, THEREFORE, for and in consideration of the above premises and
other good and valuable consideration, the receipt and sufficiency of which
hereby is acknowledged by the parties hereto, the Lessee and the Lessor hereby
covenant and agree as follows:
1. Definitions. Unless otherwise specifically defined herein,
each term used herein which is defined in the Lease shall have the meaning
assigned to such term in the Lease. Each reference to "hereof", "hereunder",
"herein" and "hereby" and each other similar reference and each reference to
"this
178
Agreement" and each other similar reference contained in the Lease shall from
and after the date hereof refer to the Lease as amended hereby.
2. Amendments to the Lease.
(a) The following definitions set forth in Schedule 1(b) are
amended and restated in their entirety as follows in proper alphabetical order:
"Acquisition Period": (i) as to the Initial Phases, a period
commencing on the Closing Date and ending (x) as to the Phases for the
Applicable Sites located in Miami, Florida and San Antonio, Texas,
October 21, 1997, and (y) as to the Phase for the Applicable Site
located in Jamestown, North Carolina, 12 months after the Closing
Date; and (ii) as to each of the Subsequent Phases, January 31, 2000.
"Fixed Rate": with respect to Basic Rent for each Phase, if
the Election has been made for such Phase, for each Rental Period,
a rate per annum equal to either:
(a) with respect to any portion of the Equipment
Cost for any Phase funded before the aggregate funded
Equipment Cost equals $80,000,000, the sum of (i) the
prevailing 5 year U.S. Treasury Rate as defined on page 500
of the Telerate Screen at 11:00 A.M., Atlanta time, on the
date of the Election for such Phase, plus (ii) the lesser of
(A) the corresponding ask side of the 5 year swap rate as
defined on page 19901 of the Telerate Screen at 11:00 A.M.,
Atlanta time, on such date, and (B) 0.55%, plus (iii) 0.45%,
and
(b) with respect to any portion of the Equipment
Cost for any Phase funded after the aggregate funded
Equipment Cost equals or exceeds $80,000,000, the sum of (i)
the prevailing 5 year U.S. Treasury Rate as defined on page
500 of the Telerate Screen at 11:00 A.M., Atlanta time, on
the date of the Election for such Phase, plus (ii) the
corresponding ask side of the 5 year swap rate as defined on
page 19901 of the Telerate Screen at 11:00 A.M., Atlanta
time, on such date, plus (iii) 0.60%.
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"Floating Rate": with respect to Basic Rent for each
Phase, if the Election has not been made or become effective
for such Phase, for each Rental Period, a rate per annum
equal to either:
(a) with respect to any portion of the Equipment
Cost for any Phase funded before the aggregate funded
Equipment Cost equals $80,000,000, the sum of (i) the LIBO
Rate prevailing on the first day of such Rental Period, plus
(ii) 0.45%, and
(b) with respect to any portion of the Equipment
Cost for any Phase funded after the aggregate funded
Equipment Cost equals or exceeds $80,000,000, the sum of (i)
the LIBO Rate prevailing on the first day of such Rental
Period, plus (ii) 0.60%.
"Non-Completion Event": as to any Phase, the failure of
Completion to occur on or before the earlier of (i) (x) as to the
Initial Phases for the Applicable Sites located in Miami, Florida and
San Antonio, Texas, October 21, 1997, (y) as to all other Initial
Phases, the date which is six months after the Phase Commencement Date
for such Phase, and (z) as to all Subsequent Phases, January 21, 2000,
and (ii) the last day of the Acquisition Period.
"Phase Completion Date": with respect to each Phase, the
earlier to occur of (i) Completion of such Phase, (ii) (x) as to the
Initial Phases for the Applicable Sites located in Miami, Florida and
San Antonio, Texas, October 21, 1997, (y) as to all other Initial
Phases, the date which is six months after the Phase Commencement Date
for such Phase, and (z) as to all Subsequent Phases, January 21, 2000,
and (iii) the last day of the Acquisition Period.
(b) Section 3(a) of the Lease is amended and restated in its entirety
as follows:
Section 3. Payments.
(a) Interim Rent. For each Phase, during the period
commencing on the Phase Commencement Date and ending on the Phase
Completion Date for such Phase, Interim Rent with
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respect to such Phase shall accrue on Equipment Cost during each
Interim Rental Period at a rate per annum equal to the LIBO Rate
prevailing on the first day of such Interim Rental Period plus (a)
with respect to any portion of the Equipment Cost for any Phase funded
before the aggregate funded Equipment Cost equals $80,000,000, 45
basis points, and (b) with respect to any portion of the Equipment
Cost for any Phase funded after the aggregate funded Equipment Cost
equals or exceeds $80,000,000, 60 basis points; provided, that if
there is less than one month remaining after the end of any Interim
Rental Period until the Phase Completion Date for such Phase, Interim
Rent for the final Interim Rental Period shall instead be determined
on the basis of 80% of the Base Rate. Interim Rent shall be paid in
arrears on the last day of the Interim Rental Period with respect
thereto. In the event any Equipment Cost on which interest accrued
based on the LIBO Rate is prepaid other than on the last day of the
Interim Rental Period with respect thereto (including by reason of the
occurrence of a Lease Termination Date for any reason), the Lessee
shall compensate the Lessor for any funding losses incurred by it as a
result of such prepayment. On the Phase Completion Date for each
Phase, all Soft Costs incurred during the period from the Phase
Commencement Date through the Phase Completion Date for such Phase
shall be capitalized and added to Equipment Cost for such Phase;
provided, that in no event shall the aggregate Equipment Cost for all
Phases exceed $100,000,000, and to the extent any such capitalization
of Soft Costs would cause the aggregate Equipment Cost for all Phases
to exceed $100,000,000, the amount of the excess shall be payable to
the Lessor on the Phase Completion Date on which such excess occurs.
In the event any Vendor requires any advance payments, progress
payments or full payments prior to the Lease Addition Date of the
Equipment proposed to be added to the Lease for any Phase, the Lessee
shall execute and deliver to the Lessor a Progress Payment Agreement
for such Phase, and the Lessor will make available amounts pursuant
thereto for such purpose. For any Equipment which is the subject of
any payments made by the Lessor under a Progress Payment Agreement for
any Phase, unpaid Additional Rent under such Progress Payment
Agreement with respect to such Equipment shall be capitalized and,
together with the amount of such payments made by the Lessor with
respect to such
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Equipment, shall be added to and constitute part of the Equipment Cost
for such Phase.
3. Amendment to Agency Agreement. Section C.1.(b)(v) of Article
1 of the Agency Agreement hereby is amended by deleting the figure
"$80,000,000" in the 2nd line thereof, and substituting therefor the figure
"$100,000,000".
4. Restatement of Representations and Warranties. The Lessor
hereby restates and renews each and every representation and warranty
heretofore made by it in the Lease and the other Operative Documents as fully
as if made on the date hereof (except for any representations which were
correct on the date of the Lease but are not correct on the date hereof because
of a change permitted by the Lease or the Operative Documents) and with
specific reference to this Amendment and all other documents executed and/or
delivered in connection herewith.
5. Effect of Amendments. Except as set forth expressly
hereinabove, all terms of the Lease, the Agency Agreement and the other
Operative Documents shall be and remain in full force and effect, and shall
constitute the legal, valid, binding and enforceable obligations of the Lessee.
6. Ratification. The Lessee hereby restates, ratifies and
reaffirms each and every term, covenant and condition set forth in the Lease,
the Agency Agreement and the other Operative Documents effective as of the date
hereof.
7. Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which counterparts, taken together, shall constitute but one and the same
instrument.
8. Section References. Section titles and references used in this
Amendment shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreements among the parties hereto
evidenced hereby.
9. No Default. To induce the Lessor to enter into this Amendment
and to continue to make advances of Facility Cost for
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the Subsequent Phases pursuant to the Lease, the Lessee hereby acknowledges and
agrees that, as of the date hereof, and after giving effect to the terms
hereof, there exists (i) no Default or Event of Default and (ii) no right of
offset, defense, counterclaim, claim or objection in favor of the Lessee
arising out of or with respect to the Lease or other Operative Documents.
10. Further Assurances. The Lessee agrees to take such further
actions as the Lessor shall reasonably request in connection herewith to
evidence the amendments herein contained to the Lessee.
11. Governing Law. This Amendment shall be governed by and
construed and interpreted in accordance with, the laws of the State of Georgia.
12. Conditions Precedent. This Amendment shall become effective
only upon:
(i) execution and delivery of this Amendment by each of the
parties hereto;
(ii) receipt by the Lessor of a favorable opinion or opinions
of counsel to the Lessee, dated as of the date hereof, substantially
in the form of Exhibit A hereto;
(iii) receipt by the Lessor of a certificate substantially in
the form of Exhibit B hereto, dated as of the date hereof, signed by
an authorized officer of the Lessee to the effect that (i) no Default
has occurred and is continuing on the date hereof and (ii) the
representations and warranties of Lessee contained in the Lease and
the other Operative Documents are true and correct on the date hereof
(except for any representations which were correct on the date of the
Lease but are not correct on the date hereof because of a change
permitted by the Lease or the Operative Documents);
(iv) receipt by the Lessor of a certificate of the Secretary
or Assistant Secretary of the Lessee substantially in the form of
Exhibit C hereto, dated as of the date hereof, setting forth (i)
resolutions of its board of directors authorizing the execution,
delivery and
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performance of the obligations contained in this Amendment, (ii) the
officers of the Lessee specified in such Secretary's Certificates that
are authorized to sign this Amendment and (iii) a statement that there
have been no amendments to the articles or certificate of
incorporation and the bylaws of the Lessee since the Closing Date or,
if there have been any such amendments attaching such amendments; and
(v) receipt by the Lessor of a structuring fee in the amount
of $20,000.
IN WITNESS WHEREOF, the Lessee and the Lessor have caused this
Amendment to be duly executed, under seal, by its duly authorized officer as of
the day and year first above written.
LESSEE:
FLOWERS INDUSTRIES, INC. (SEAL)
By:
---------------------------------------
Title:
LESSOR:
WACHOVIA LEASING CORPORATION (SEAL)
By:
---------------------------------------
Title:
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EXHIBIT A
[NOTE: THE ENFORCEABILITY PORTION OF THIS OPINION MAY BE GIVEN BY
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP]
FORM OF LEGAL OPINION OF
GENERAL COUNSEL OF LESSEE
[LESSEE LETTERHEAD]
[__________], 1999
Wachovia Leasing Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Dear Sirs:
I am the General Counsel for Flowers Industries, Inc., a
Georgia corporation ("Lessee"). This opinion is being delivered pursuant to
Section 12(ii) of that certain Fifth Amendment to Master Lease Agreement and
Second Amendment to Acquisition, Agency, Indemnity and Support Agreement dated
as of even date herewith between Lessee and Wachovia Leasing Corporation (the
"Amendment"). Capitalized terms used but not defined herein have the meanings
set forth in the Amendment or in the Lease referred to therein or in Schedule
1(b) to the Lease.
I have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as I have deemed necessary or advisable
for purposes of this opinion.
Upon the basis of the foregoing, I am of the opinion that:
1. The execution, delivery and performance by Lessee of the
Amendment is within the Lessee's corporate powers, has been duly
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185
authorized by all necessary corporate action, requires no action by or in
respect of, or filing with, any governmental body, agency or official, does not
contravene, or constitute a default under, any provision of applicable law or
regulation or of the certificate of incorporation or by-laws of Lessee or of
any material agreement, judgment, injunction, order, decree or other instrument
relating to Debt which is binding upon Lessee, and does not result in the
creation or imposition of any Lien on any asset of Lessee (other than the
security interest in the Equipment created by the Lease in the event that the
Lease is recharacterized as a financing transaction).
2. The Amendment constitutes the valid and binding obligations of
Lessee enforceable against Lessee in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and general principles of equity (including,
without limitation, the availability or non-availability of equitable
remedies), whether considered in a proceeding at law or in equity; provided
that the foregoing shall not, in my opinion, substantially interfere with the
practical realization of the benefits expressed in the Amendment, except for
the economic consequences of any procedural delay which may result therefrom.
3. There is no action, suit or proceeding pending for which
process has been served, or, to the best of my knowledge, threatened, against
or affecting Lessee or any of its Subsidiaries before any court or arbitrator
or any governmental body, agency or official in which there is a reasonable
possibility of an adverse decision which could materially adversely affect the
business, consolidated financial position or consolidated results of operations
of Lessee and its Consolidated Subsidiaries, considered as a whole, or which in
any manner questions the validity or enforceability of the Amendment.
4. The execution, delivery and performance by Lessee of the
Amendment does not conflict with or result in a violation of any law, statute,
rule or regulation of the State of Georgia (or any subdivision thereof), or
require any consent of or filing or registration with an Governmental Authority
of the State of Georgia (or any subdivision thereof) or pursuant to the UCC
which has not been obtained or completed and which is necessary for the
validity and enforceability thereof.
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I am qualified to practice in the State of Georgia and do not
purport to be expert on any laws other than the laws of the State of Georgia,
the federal laws of the United States, and the UCC, and this opinion is
rendered only with respect to such laws. I have made no independent
investigation of the laws of any other jurisdiction (except with respect to the
UCC).
In rendering the opinions above, I have assumed, with your
permission, that Amendment has been duly authorized, executed and delivered by
Lessor and, to the extent provided therein, constitutes the legal, valid and
binding obligation of Lessor enforceable in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and general principles of equity (including,
without limitation, the availability or non-availability of equitable
remedies), whether considered in a proceeding at law or in equity.
This opinion is delivered to you at the request of Lessee in
connection with the transaction referenced above and may not, without my prior
written consent, be communicated to or relied upon by anyone other than you,
your successors and assigns, except that it may be communicated to ▇▇▇▇▇, Day,
▇▇▇▇▇▇ & ▇▇▇▇▇, your special counsel.
This opinion speaks only as of the date hereof, and I do not
undertake any duty to advise you of any change herein.
Very truly yours,
-----------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
General Counsel
Flowers Industries, Inc.
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EXHIBIT B
CLOSING CERTIFICATE
Reference is made to the Fifth Amendment to Master Lease Agreement and
Second Amendment to Acquisition, Agency, Indemnity and Support Agreement as of
even date herewith between Lessee and Wachovia Leasing Corporation (the
"Amendment"). Capitalized terms used but not defined herein have the meanings
set forth in the Amendment or in the Lease referred to therein or in Schedule
1(b) to the Lease.
Pursuant to Section 14(iii) of the Amendment, _________________
_________________, the duly authorized __________________ of the Lessee, hereby
certifies to the Lessor that (i) no Default has occurred and is continuing as
of the date hereof, and (ii) the representations and warranties of Lessee
contained in the Lease and the other Operative Documents are true and correct
on the date hereof (except for any representations which were correct on the
date of the Lease but are not correct on the date hereof because of a change
permitted by the Lease or the Operative Documents).
Certified as of [__________], 1999.
FLOWERS INDUSTRIES, INC. (SEAL)
By:
----------------------------------
Title:
11
188
EXHIBIT C
SECRETARY'S CERTIFICATE
The undersigned, ________________, [Secretary/Assistant Secretary] of Flowers
Industries, Inc. (the "Lessee"), hereby certifies that he has been duly
elected, qualified and is acting in such capacity and that, as such, he is
familiar with the facts herein certified and is duly authorized to certify the
same, and hereby further certifies, in connection with the Fifth Amendment to
Master Lease Agreement and Second Amendment to Acquisition, Agency, Indemnity
and Support Agreement dated as of even date herewith between Lessee and
Wachovia Leasing Corporation (the "Amendment") that:
1. Attached hereto as Annex 1 is a complete and correct copy of
the resolutions duly adopted by the Board of Directors of the Lessee on
____________, _____, 1999 approving, and authorizing the execution and delivery
of, the Amendment. Such resolutions have not been repealed or amended and are
in full force and effect, and no other resolutions or consents have been
adopted by the Board of Directors of the Lessee in connection therewith.
2. _____________, who is ______________ of the Lessee, signed
the Amendment, was duly elected, qualified and acting as such at the time he
signed the Amendment, and his signature appearing on the Amendment is his
genuine signature.
3. Since October 20, 1995, there have been no amendments to the
articles or certificate of incorporation and the bylaws of the Lessee [EXCEPT
___________________, COPIES OF WHICH ARE ATTACHED HERETO AS ANNEX[ES] ].
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of
[____________], 1999.
------------------------------------------
Name:
Title: [Secretary/Assistant Secretary]
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189
SIXTH AMENDMENT TO MASTER LEASE AGREEMENT
AND AMENDMENT TO OTHER OPERATIVE DOCUMENTS
THIS SIXTH AMENDMENT TO MASTER LEASE AGREEMENT AND AMENDMENT TO OTHER
OPERATIVE DOCUMENTS (this "Amendment") is dated as of January 21, 2000 between
FLOWERS INDUSTRIES, INC. (the "Lessee"), and WACHOVIA LEASING CORPORATION (the
"Lessor").
WITNESSETH:
WHEREAS, the Lessee and the Lessor executed and delivered that certain
Master Lease Agreement, dated as of the 20th day of October, 1995, as amended
by First Amendment to Master Lease Agreement dated as of October 20, 1996, by
Second Amendment to Master Lease Agreement dated as of April 20, 1997, by Third
Amendment to Master Lease Agreement dated as of June 10, 1998, by Fourth
Amendment to Master Lease Agreement dated as of January 15, 1999, and by Fifth
Amendment to Master Lease Agreement dated as of May 20, 1999 (as so amended,
the "Lease");
WHEREAS, the Lessee and the Lessor have agreed that the Lease and
certain other Operative Documents be amended, subject to the terms and
conditions hereof;
NOW, THEREFORE, for and in consideration of the above premises and
other good and valuable consideration, the receipt and sufficiency of which
hereby is acknowledged by the parties hereto, the Lessee and the Lessor hereby
covenant and agree as follows:
1. Definitions. Unless otherwise specifically defined herein,
each term used herein which is defined in the Lease shall have the meaning
assigned to such term in the Lease. Each reference to "hereof", "hereunder",
"herein" and "hereby" and each other similar reference and each reference to
"this Agreement" and each other similar reference contained in the Lease shall
from and after the date hereof refer to the Lease as amended hereby.
2. Amendments to the Lease.
(a) The following new definitions are hereby added to Schedule
1(b) as follows in proper alphabetical order:
190
"Applicable Margin": (i) for the period commencing on January
21, 2000, to and including the first Performance Pricing Determination
Date following December 30, 2000, 1.75%, unless during such period the
Debt Rating is BB and Ba2 or lower, in which case the Applicable
Margin shall be based upon the table set forth below; and
(ii) from and after the first Performance Pricing
Determination Date after December 30, 2000, the percentage determined
on each Performance Pricing Determination Date by reference to the
table set forth below and the Debt Rating on such Performance Pricing
Determination Date; provided, that if there is no Debt Rating, the
Applicable Margin shall be based upon Level V of the table below.
--------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇ II III IV V
--------------------------------------------------------------------------------
BBB BBB- >BB+ >BB
- - -
and and and
▇▇▇▇ ▇▇▇ ▇▇▇
--------------------------------------------------------------------------------
Applicable Margin 1.00% 1.25% 1.50% 2.00% 2.50%
--------------------------------------------------------------------------------
In determining the Applicable Margin, the Lessor shall refer
to the Lessee's Debt Rating from time to time. For purposes hereof,
"Performance Pricing Determination Date" shall mean each date on which
the Debt Rating changes. Each change in the Applicable Margin as a
result of a change in Debt Rating shall be effective on or after the
relevant Performance Pricing Determination Date. All determinations
hereunder shall be made by Lessor. The Lessee shall promptly notify
the Lessor of any change in the Debt Rating.
"Credit Agreement": that certain $500,000,000 Amended and
Restated Credit Agreement (the "Facility") dated as of January 30,
1998, as amended or otherwise modified from time to time (except as
otherwise set forth in the Lease), with Wachovia Securities, Inc. as
Lead Arranger, Wachovia as Administrative Agent and as a Bank, and
certain other Banks, in favor of the Lessee.
"Debt Rating": at any time whichever is the higher of the
rating of the Lessee's senior unsecured, unenhanced debt (or, if no
such debt exists, its issuer credit rating for debt of such type) by
Moody's and S&P (as such rating may change from time to time)
(provided, that in the event of a double or greater split rating, the
rating immediately above the lowest rating shall apply), or if only
one of them rates the Borrower's senior unsecured, unenhanced debt,
such rating.
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191
"Moody's": ▇▇▇▇▇'▇ Investors Service, Inc.
"S&P" means Standard & Poor's Ratings Group, a division of
▇▇▇▇▇▇-▇▇▇▇, Inc.
(b) The following definitions set forth in Schedule 1(b) are
amended and restated in their entirety as follows in proper alphabetical order:
"Acquisition Period": (i) as to the Initial Phases, a period
commencing on the Closing Date and ending (x) as to the Phases for the
Applicable Sites located in Miami, Florida and San Antonio, Texas,
October 21, 1997, and (y) as to the Phase for the Applicable Site
located in Jamestown, North Carolina, 12 months after the Closing
Date; and (ii) as to each of the Subsequent Phases, June 30, 2000.
"Basic Rent": (a) after January 21, 2000, for each Phase at
the Designated Sites, with respect to any Rental Period, the amounts
payable for such Phase as Basic Rent for such Rental Period pursuant
to Section 3(b) of the Lease, consisting of the sum of the Scheduled
Payment therefor and the sum of (i) 5.77%, plus (ii) the Applicable
Margin minus 0.45%.
(b) for each Phase at all Applicable Sites other than the
Designated Sites, with respect to any Rental Period, the amounts
payable for such Phase as Basic Rent for such Rental Period pursuant
to Section 3(b) of the Lease, consisting of the sum of the Scheduled
Payment therefor and either the Floating Rate Payment or, if the
Election has been made, the Fixed Rate Payment.
"Fixed Rate": with respect to Basic Rent for each Phase, if
the Lessee's Election request has been approved by the Lessor in
writing for such Phase, for each Rental Period, a rate per annum equal
to either:
(a) with respect to each Phase at each Designated
Site, the sum of (i) 5.77%, plus (ii) the Applicable Margin
minus 0.45%, and
(b) with respect to each Phase other than at a
Designated Site, an amount equal to (i) a market rate mutually
agreed to by the Lessee and Lessor in writing, plus (ii)
the Applicable Margin.
"Floating Rate": with respect to Basic Rent for each Phase,
if the Election has not been made or become effective for such Phase,
for each Rental Period, a rate per annum equal to the sum of (i) the
LIBO Rate prevailing on the first day of such Rental Period, plus (ii)
the Applicable Margin.
"Interim Rental Period": with respect to Interim Rent
pertaining to any Phase, the period beginning on the Phase
Commencement Date for such Phase and ending on the numerically
corresponding date (or, if applicable, last calendar date) which is
either one, two or three months thereafter, as selected by the Lessee
upon at least 3 Business Days notice and, thereafter, each subsequent
period commencing on the last day of the immediately preceding Interim
Rental Period and ending on the numerically
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corresponding date (or, if applicable, last calendar date) which is
three months thereafter, as selected by the Lessee upon at least 3
Business Days notice; provided, however, that:
(i) no Interim Rental Period may be selected which
commences before the Phase Completion Date and would otherwise end
after the Phase Completion Date;
(ii) if the last day of such Interim Rental Period would
otherwise occur on a day which is not a Business Day, such last day
shall be extended to the next succeeding Business Day, except if such
extension would cause such last day to occur in a new calendar month,
then such last day shall occur on the next preceding Business Day.
"Non-Completion Event": as to any Phase, the failure of
Completion to occur on or before the earlier of (i) (x) as to the
Initial Phases for the Applicable Sites located in Miami, Florida and
San Antonio, Texas, October 21, 1997, (y) as to all other Initial
Phases, the date which is six months after the Phase Commencement Date
for such Phase, and (z) as to all Subsequent Phases, June 30, 2000,
and (ii) the last day of the Acquisition Period.
"Non-Recourse Amount": as to any Phase, at any time an amount
equal to a percentage of the aggregate original Equipment Cost for
such Phase which shall be not less than 16% nor more than 23%, which
percentage shall be determined by the Lessor in its sole discretion
(after consultation with the Company) and notified to the Company on
or promptly after the relevant Phase Completion Date, after
identification of the aggregate amount of the Equipment Cost for such
Phase as of such time.
"Phase Completion Date": with respect to each Phase, the
earlier to occur of (i) Completion of such Phase, (ii) (x) as to the
Initial Phases for the Applicable Sites located in Miami, Florida and
San Antonio, Texas, October 21, 1997, (y) as to all other Initial
Phases, the date which is six months after the Phase Commencement Date
for such Phase, and (z) as to all Subsequent Phases, June 30, 2000,
and (iii) the last day of the Acquisition Period.
(c) Section 3(a) of the Lease is amended and restated in its
entirety as follows:
Section 3. Payments.
(a) Interim Rent. For each Phase, during the period commencing on
the Phase Commencement Date and ending on the Phase Completion Date
for such Phase, Interim Rent with respect to such Phase shall accrue
on Equipment Cost during each Interim Rental Period at a rate per
annum equal to the LIBO Rate prevailing on the first day of such
Interim Rental Period plus the Applicable Margin; provided, that if
there is less than one month remaining after the end of any Interim
Rental Period until the Phase Completion Date for such Phase, Interim
Rent for the final Interim Rental Period shall instead be the Base
Rate. Interim Rent shall be paid in arrears on the last day of the
Interim Rental Period with respect thereto. In the event any Equipment
Cost on which interest accrued based on the LIBO Rate is prepaid other
than on the last day of the Interim Rental Period with respect thereto
(including by reason of the occurrence of a
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193
Lease Termination Date for any reason), the Lessee shall compensate
the Lessor for any funding losses incurred by it as a result of such
prepayment. On the Phase Completion Date for each Phase, all Soft
Costs incurred during the period from the Phase Commencement Date
through the Phase Completion Date for such Phase shall be capitalized
and added to Equipment Cost for such Phase; provided, that in no event
shall the aggregate Equipment Cost for all Phases exceed $103,000,000,
and to the extent any such capitalization of Soft Costs would cause
the aggregate Equipment Cost for all Phases to exceed $103,000,000,
the amount of the excess shall be payable to the Lessor on the Phase
Completion Date on which such excess occurs. In the event any Vendor
requires any advance payments, progress payments or full payments
prior to the Lease Addition Date of the Equipment proposed to be added
to the Lease for any Phase, the Lessee shall execute and deliver to
the Lessor a Progress Payment Agreement for such Phase, and the Lessor
will make available amounts pursuant thereto for such purpose. For any
Equipment which is the subject of any payments made by the Lessor
under a Progress Payment Agreement for any Phase, unpaid Additional
Rent under such Progress Payment Agreement with respect to such
Equipment shall be capitalized and, together with the amount of such
payments made by the Lessor with respect to such Equipment, shall be
added to and constitute part of the Equipment Cost for such Phase.
(d) Section 3(b) of the Lease is amended and restated in its entirety
as follows:
(b) Basic Rent
(i) Floating Rate Payment Without Election; Election and
Election Period.
Subject to clause (iii) below), for each Phase, if the
Lessee has not been granted an Election by the Lessor within
the Election Period pursuant to the provisions and
requirements of this Section 3(b)(i), after the Phase
Completion Date for each Phase, the Lessee's Basic Rent
during the Lease Term for such Phase shall be payable for
each Rental Period in arrears on the Rent Payment Date for
such Rental Period in an amount equal to the sum of (A) the
amount equal to the percentage set forth in Schedule 3(b) for
such Rental Period (as it may be modified pursuant hereto as
a result of an Approval Appraisal), times the Equipment Cost
(the "Scheduled Amount") as to such Phase (the "Scheduled
Payment") plus (B) an amount accruing on the Scheduled Amount
as to such Phase at the Floating Rate for such Rental Period
(the "Floating Rate Payment"). In the event any Scheduled
Amount or other amount of Equipment Cost based on the LIBO
Rate is prepaid other than on the last day of the Rental
Period with respect thereto (including by reason of the
occurrence of a Lease Termination Date for any reason) the
Lessee shall compensate the Lessor for any funding losses
incurred by it as a result of such prepayment. Schedule 3(b)
also sets forth the Estimated Residual as to each Phase as of
the end of each Rental Period. The Lessee agrees that the
Lessor reserves the right to modify the Estimated Residual or
the percentage of Equipment Cost for determining the
Scheduled Amount, or both, as to any Rental Period for the
Equipment for any Phase as a result of the receipt of an
Approval Appraisal pursuant to the Agency Agreement. With
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194
respect to any Phase, the Lessee shall have the right to
request that the Lessor agree, in the exercise of its sole
discretion, to convert the Basic Rent for such Phase within
the Election Period from a Floating Rate Payment basis to a
Fixed Rate Payment basis (any such request by the Lessee that
is approved by the Lessor in writing pursuant to the
provisions and requirements of this Section 3(b)(i) for any
Phase being an "Election" for such Phase). The "Election
Period" with respect to each Phase shall commence on the
Phase Completion Date for such Phase and terminate on the
last day of the Acquisition Period. Each Election shall be
requested by the Lessee by written notice received not less
than 7 days prior to the effective date of such Election (and
not less than 7 days prior to the end of the relevant
Election Period). Lessor shall be deemed to have disapproved
such Election request unless the Lessee receives a written
approval of such request from the Lessor within 14 days after
such notice requesting such Election has been sent by the
Lessee.
(ii) Fixed Rate Payment With Election.
Subject to clause (iii) below, for each Phase, if the
Lessee has requested an Election within the Election Period
pursuant to the provision and requirements of Section 3(b)(i)
and Lessor shall have approved such Election request in
writing, after the Phase Completion Date for each Phase, the
Lessee's Basic Rent during the Lease Term for such Phase
shall be payable for each Rental Period in arrears on the
Rent Payment Date for such Rental Period in an amount equal
to the sum of (A) the Scheduled Payment as to such Phase for
such Rental Period plus (B) an amount accruing on the
Scheduled Amount as to such Phase at the Fixed Rate for such
Rental Period (the "Fixed Rate Payment"). On the first Rent
Payment Date after the Lessee obtains from the Lessor an
approved Election for a qualifying Phase, the Lessee shall
make, if applicable, a Basic Rent payment consisting of the
Schedule Payment for such Phase plus a proportionate Floating
Rate Payment and Fixed Rate Payment for such Phase, and the
Lessee shall compensate the Lessor for any funding losses
incurred by it as a result of such change from a Floating
Rate Payment to a Fixed Rate Payment prior to the end of the
Rental Period.
(e) Section 4 of the Lease is amended and restated in its
entirety as follows:
Section 4. Incorporation of Credit Agreement Representations,
Warranties and Covenants; Other Restrictive Agreements.
(a) The Lessee's representations, warranties and covenants
contained in the Credit Agreement (excluding therefrom, however,
Section 5.05 of the Credit Agreement), as the same are amended or
otherwise modified from time to time (except as provided in Section
4(b) below), along with all necessary definitions and other provisions
from the Credit Agreement necessary in order to effect the same
(collectively, the "Credit Agreement Provisions"), are incorporated by
reference into this Section 4 as if fully set forth herein and the
Lessee makes, undertakes, and agrees Lessee is obligated hereunder
with respect to, such representations, warranties and covenants in
favor of the Lessor. A
6
195
Default or Event of Default by the Lessee with respect to the Credit
Agreement Provisions (other than under Section 5.04 of the Credit
Agreement Provisions) shall be a Designated Event of Default, and a
Default or Event of Default by the Lessee with respect to Section 5.04
of the Credit Agreement Provisions shall be a Non-Designated Event of
Default. With respect to cure periods set forth in Section 17(a)(iii)
of the Lease and the Credit Agreement Provisions, the Lessee shall
have a 10 day cure period with respect to Sections 5.01(e), 5.02(ii),
5.03 through 5.05, inclusive, Sections 5.17 through 5.19, inclusive,
and Section 5.21 of the Credit Agreement Provisions, and with respect
to all other Credit Agreement Provisions, a 30 day cure period.
References in the Credit Agreement Provisions to (i) the "Agent", the
"Banks" or the "Required Banks" shall mean the Lessor hereunder, (ii)
the "Loans" shall mean Rent hereunder, (iii) this "Agreement" shall
mean this Agreement, and (iv) the "Loan Documents" shall mean the
Operative Documents.
(b) In the event that either (i) Wachovia is no longer a
party to the Credit Agreement, or (ii) the Credit Agreement has
terminated, or (iii) Wachovia is a party to the Credit Agreement and
the Credit Agreement has been amended or modified, or any provision
thereof has been waived and Wachovia has not consented to (ie.,
executed and delivered) such amendment or modification or waiver,
then, in any such event, the Credit Agreement Provisions as
incorporated in Section 4(a) of this Agreement shall be the Credit
Agreement Provisions as in effect on the date prior to and shall at
all times thereafter so remain as in effect on such date prior to
(unless amended in writing as mutually agreed between the Lessor and
the Lessee), respectively, (x) Wachovia no longer being a party to the
Credit Agreement, or (y) the termination of the Credit Agreement, or
(z) the execution and delivery of any such amendment, modification or
waiver to which Wachovia has not so consented, as the case may be.
(c) The Lessee will not permit any amendment or modification
of the Credit Agreement, or become a party to any other credit
facility or other agreement relating to the incurrence of
indebtedness, which provides for representations, warranties,
covenants, events of default or other provisions which are more
restrictive against the Lessee than the representations, warranties,
covenants, events of default and other provisions contained in this
Agreement without (i) the Lessor's prior written consent, or (ii) if
requested by the Lessor, executing and delivering an amendment to this
Agreement and, if necessary, to the other Operative Documents, in
order to provide the same more restrictive representations,
warranties, covenants or events of default and other provisions
against the Lessee in favor of the Lessor, as may be requested.
(f) In the event that any provision of the Lease conflicts with
the Credit Agreement Provisions, then, in such event, the provisions of the
Credit Agreement Provisions shall supercede any such conflicting provision of
the Lease.
(g) Paragraph 2 of the form of Progress Payment Agreement set
forth on Exhibit E to the Lease is amended and restated in its entirety as
follows:
2. The term of the Lease with respect to the Proposed
Equipment will not commence until the Lease Addition
7
196
Date with respect thereto. Until the Lease Addition Date as to the
Proposed Equipment, a charge shall accrue on all such advances,
progress or other payments made by the Lessor equal to an amount per
annum which is the product of (i) advances or payment outstanding from
the date any such advances are outstanding, (ii) the LIBO Rate plus
the Applicable Margin, and (iii) the actual number days in the
period/360 (such amount being so determined being "Additional Rent").
Such Additional Rent shall accrue until the Lease Addition Date,
whereupon it shall be capitalized and added to Equipment Cost for such
Phase pursuant to Section 3(a) of the Lease.
3. Amendment to Agency Agreement. Section C.1.(b)(v) of Article
1 of the Agency Agreement hereby is amended by deleting the figure
"$100,000,000" in the 2nd line thereof, and substituting therefor the figure
"$103,000,000".
4. Amendment to Progress Payment Agreements. Paragraph 2 of each
Progress Payment Agreement is amended and restated in its entirety as follows:
2. The term of the Lease with respect to the Proposed
Equipment will not commence until the Lease Addition Date with respect
thereto. Until the Lease Addition Date as to the Proposed Equipment, a
charge shall accrue on all such advances, progress or other payments
made by the Lessor equal to an amount per annum which is the product
of (i) advances or payment outstanding from the date any such advances
are outstanding, (ii) the LIBO Rate plus the Applicable Margin, and
(iii) the actual number days in the period/360 (such amount being so
determined being "Additional Rent"). Such Additional Rent shall accrue
until the Lease Addition Date, whereupon it shall be capitalized and
added to Equipment Cost for such Phase pursuant to Section 3(a) of the
Lease.
5. Restatement of Representations and Warranties. The Lessor
hereby restates and renews each and every representation and warranty
heretofore made by it in the Lease and the other Operative Documents (as the
same are amended by this Amendment) as fully as if made on the date hereof
(except for any representations which were correct on the date of the Lease but
are not correct on the date hereof because of a change permitted by the Lease
or the Operative Documents) and with specific reference to this Amendment and
all other documents executed and/or delivered in connection herewith.
6. Effect of Amendments; Default Under this Amendment. Except as
set forth expressly hereinabove, all terms of the Lease, the Agency Agreement
and the other Operative Documents shall be and remain in full force and effect,
and shall constitute the legal, valid, binding and enforceable obligations of
the Lessee. A default by the Lessee under this Amendment shall be an Event of
Default under the Lease.
7. Ratification. The Lessee hereby restates, ratifies and
reaffirms each and every term, covenant and condition set forth in the Lease,
the Agency Agreement and the other Operative Documents effective as of the date
hereof.
8. Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and
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197
delivered shall be deemed to be an original and all of which counterparts,
taken together, shall constitute but one and the same instrument.
9. Section References. Section titles and references used in
this Amendment shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreements among the parties hereto
evidenced hereby.
10. No Default. To induce the Lessor to enter into this Amendment
and to continue to make advances of Facility Cost for the Subsequent Phases
pursuant to the Lease, the Lessee hereby acknowledges and agrees that, as of
the date hereof, and after giving effect to the terms hereof, there exists (i)
no Default or Event of Default and (ii) no right of offset, defense,
counterclaim, claim or objection in favor of the Lessee arising out of or with
respect to the Lease or other Operative Documents.
11. Further Assurances. The Lessee agrees to take such further
actions as the Lessor shall reasonably request in connection herewith to
evidence the amendments herein contained to the Lessee.
12. Governing Law. This Amendment shall be governed by and
construed and interpreted in accordance with, the laws of the State of Georgia.
13. Conditions Precedent. This Amendment shall become effective
only upon:
(i) execution and delivery of this Amendment by each of the
parties hereto;
(ii) receipt by the Lessor of a certificate substantially in
the form of Exhibit A hereto, dated as of the date hereof, signed by
an authorized officer of the Lessee to the effect that (i) no Default
has occurred and is continuing on the date hereof and (ii) the
representations and warranties of Lessee contained in the Lease and
the other Operative Documents are true and correct on the date hereof
(except for any representations which were correct on the date of the
Lease but are not correct on the date hereof because of a change
permitted by the Lease or the Operative Documents); and
(iii) receipt by the Lessor of a certificate of the Secretary
or Assistant Secretary of the Lessee substantially in the form of
Exhibit B hereto, dated as of the date hereof, setting forth (i)
resolutions of its board of directors authorizing the execution,
delivery and performance of the obligations contained in this
Amendment, (ii) the officers of the Lessee specified in such
Secretary's Certificates that are authorized to sign this Amendment
and (iii) a statement that there have been no amendments to the
articles or certificate of incorporation and the bylaws of the Lessee
since the Closing Date or, if there have been any such amendments
attaching such amendments.
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198
IN WITNESS WHEREOF, the Lessee and the Lessor have caused this
Amendment to be duly executed, under seal, by its duly authorized officer as of
the day and year first above written.
LESSEE:
FLOWERS INDUSTRIES, INC. (SEAL)
By:
---------------------------------------
Title:
LESSOR:
WACHOVIA LEASING CORPORATION
(SEAL)
By:
---------------------------------------
Title:
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EXHIBIT A
CLOSING CERTIFICATE
Reference is made to the Sixth Amendment to Master Lease Agreement and
Amendment to Other Operative Documents as of even date herewith between Lessee
and Wachovia Leasing Corporation (the "Amendment"). Capitalized terms used but
not defined herein have the meanings set forth in the Amendment or in the Lease
referred to therein or in Schedule 1(b) to the Lease.
Pursuant to Section 13(ii) of the Amendment, _______________ , the
duly authorized of ___________________ the Lessee, hereby certifies to the
Lessor that (i) no Default has occurred and is continuing as of the date
hereof, and (ii) the representations and warranties of Lessee contained in the
Lease and the other Operative Documents are true and correct on the date hereof
(except for any representations which were correct on the date of the Lease but
are not correct on the date hereof because of a change permitted by the Lease
or the Operative Documents).
Certified as of January ___, 2000.
FLOWERS INDUSTRIES, INC. (SEAL)
By:
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Title:
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200
EXHIBIT B
SECRETARY'S CERTIFICATE
The undersigned,_____________ , [Secretary/Assistant Secretary] of Flowers
Industries, Inc. (the "Lessee"), hereby certifies that he has been duly
elected, qualified and is acting in such capacity and that, as such, he is
familiar with the facts herein certified and is duly authorized to certify the
same, and hereby further certifies, in connection with the Sixth Amendment to
Master Lease Agreement and Amendment to Other Operative Documents dated as of
even date herewith between Lessee and Wachovia Leasing Corporation (the
"Amendment") that:
1. Attached hereto as Annex 1 is a complete and correct copy of
the resolutions duly adopted by the Board of Directors of the Lessee on ,
2000, approving, and authorizing the execution and delivery of, the Amendment.
Such resolutions have not been repealed or amended and are in full force and
effect, and no other resolutions or consents have been adopted by the Board of
Directors of the Lessee in connection therewith.
2. ______________, who is ____________ of the Lessee, signed the
Amendment, was duly elected, qualified and acting as such at the time he signed
the Amendment, and his signature appearing on the Amendment is his genuine
signature.
3. Since October 20, 1995, there have been no amendments to the
articles or certificate of incorporation and the bylaws of the Lessee [EXCEPT
__________, COPIES OF WHICH ARE ATTACHED HERETO AS ANNEX[ES]___].
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of
January ___, 2000.
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Name:
Title: [Secretary/Assistant Secretary]
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