Document/Exhibit Description Pages Size
1: 10-K/A Amendment to Annual Report 56± 243K
2: EX-3.1 Articles of Incorporation/Organization or By-Laws 8± 33K
3: EX-3.2 Articles of Incorporation/Organization or By-Laws 8± 34K
4: EX-4.8 Instrument Defining the Rights of Security Holders 53± 222K
5: EX-4.9 Instrument Defining the Rights of Security Holders 20± 88K
6: EX-10.18 Material Contract 8± 41K
7: EX-10.20 Material Contract 6± 29K
8: EX-10.35 Material Contract 16± 65K
9: EX-10.36 Material Contract 62± 291K
10: EX-11.1 Statement re: Computation of Earnings Per Share 2± 14K
11: EX-21.1 Subsidiaries of the Registrant 1 7K
12: EX-23.1 Consent of Experts or Counsel 1 7K
Exhibit 10.35
MASTER EQUIPMENT LEASE
Lease No.025l6
LESSOR: CARGILL LEASING CORPORATION (herein called the
"Lessor")
6000 CLEARWATER DRIVE
MINNETONKA, MINNESOTA 55343-9497
CO-LESSEES: DOSKOCIL COMPANIES, INC.
321 NORTH MAIN
SOUTH HUTCHINSON, KANSAS 67505
DIXIE FOODS COMPANY
3133 COMMERCE ROAD
FORREST CITY, ARKANSAS 72335
(herein collectively called the "Lessee")
1. LEASE
Lessor hereby leases to Lessee, and Lessee hereby leases from
Lessor, the personal property described in Schedule(s) A, attached
hereto and incorporated herein, and all attachments, additions,
accessories, replacement parts, substitutions and repairs
incorporated therein and/or affixed thereto, (herein called the
"Equipment") and proceeds, thereto made pursuant to the terms of
this Master Equipment Lease (herein called the "Lease"). The
parties may from time to time, by mutual agreement, add other items
of equipment to this Lease for such terms and at such rates as may
be agreed by execution of additional Schedule(s) A, and this Lease
shall control and be effective as to such additional items of
equipment as though the same were set forth herein. For purposes of
construing this Lease, all Schedule(s) A attached hereto shall be
incorporated herein and form a part hereof. No respective Schedule
A shall be construed as an independent separate lease.
2. TERM
This Lease shall be in force for a period beginning with the
Commencement Date as set forth in Schedule(s) A and ending at the
expiration of the period ("Expiration Date") set forth in
Schedule(s) A ("Lease Term").
3. RENT
Lessee shall pay to Lessor the payment amounts set forth in
Schedule(s) A ("Rent") for use of the Equipment for the Lease Term.
Rent shall be payable to Lessor at the office of Lessor in
Minnetonka, Minnesota 55343 or at such other location as Lessor may
from time to time instruct Lessee in writing. In the event Lessee
should fail to pay Lessor any Rent within five (5) days of the due
date thereof, or any other sum required to be paid to the Lessor
within five (5) days of demand, Lessee shall pay unto Lessor a
delinquent payment charge from the due date of payment until paid
at an annual rate of 18% unless otherwise prohibited by law, in
which case interest will be charged at the highest lawful rate
allowed. All payments hereunder shall be applied to unpaid
obligations then due hereunder.
4. WARRANTIES
LESSOR, NOT BEING THE MANUFACTURER OF THE EQUIPMENT NOR THE
MANUFACTURER'S AGENT, MAKES NO EXPRESS OR IMPLIED WARRANTY OF
ANY KIND WHATSOEVER WITH RESPECT TO THE EQUIPMENT, INCLUDING BUT
NOT LIMITED TO: THE MERCHANTABILITY OF THE EQUIPMENT OR ITS
FITNESS FOR A PARTICULAR PURPOSE; THE DESIGN OR CONDITION OF THE
EQUIPMENT; THE QUALITY OR CAPACITY OF THE EQUIPMENT; THE
WORKMANSHIP IN THE EQUIPMENT; COMPLIANCE OF THE EQUIPMENT WITH
THE REQUIREMENTS OF ANY LAW, RULE, OR SPECIFICATION; PATENT
INFRINGEMENTS OR LATENT INFRINGEMENTS, IT BEING AGREED THAT THE
EQUIPMENT IS LEASED "AS IS" AND THAT ALL RISKS AS BETWEEN LESSOR
AND LESSEE ARE TO BE BORNE BY LESSEE. LESSOR IS NOT RESPONSIBLE FOR
INSTALLATION OF, OR FOR ANY REPAIRS OR SERVICE TO, THE EQUIPMENT.
LESSOR IS NOT RESPONSIBLE FOR LOSS OF PROFIT OR FINANCIAL LOSS OR
INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING, BUT NOT LIMITED
TO, LOSS OR INTERRUPTION OF BUSINESS, WHICH MAY BE DIRECTLY OR
INDIRECTLY CAUSED BY OR ATTRIBUTABLE TO THE INADEQUACY OF THE
EQUIPMENT. Lessee will be subrogated to Lessor's claims, if any,
against the manufacturer or supplier of the Equipment for breach of
any warranty or representation and, Lessor shall enforce any such
warranty, express or implied, issued on or applicable to any of the
Equipment, provided, that Lessee is not in default under the Lease
pursuant to Section 13, hereof, and Lessor shall not be obligated
to enforce any such warranty unless Lessee agrees in writing to pay
all expenses in connection therewith. All proceeds of any such
warranty recovery from the manufacturer or supplier of the
Equipment shall be used at the discretion of Lessor to either
repair or replace the affected Equipment. NOTWITHSTANDING THE
FOREGOING, LESSEE'S OBLIGATION TO PAY RENT OR ANY OTHER SUM
REQUIRED UNDER THIS LEASE SHALL BE AND IS ABSOLUTE AND
UNCONDITIONAL.
5. TITLE AND IDENTIFICATION
This Lease is intended to constitute a true lease and not a sale of
the related Equipment. However, to the extent, at any time or from
time to time, this Lease is construed to be a transaction intended
as security, Lessor retains and Lessee hereby grants to Lessor a
security interest in and to the Equipment, the proceeds of any sale
thereof, the assignment, lease, or sublease thereof, any insurance
proceeds with respect thereto, and any other rights of Lessee,
tangible or intangible, and to the Equipment, the Lease, and their
proceeds; provided, further, that Lessee may not, to the extent
this Lease is construed to be a transaction intended as security,
sell or otherwise encumber the Equipment without Lessor's prior
written consent. No right, title or interest in the Equipment
shall pass to Lessee other than, conditioned upon Lessee's
compliance with and fulfillment of the terms and conditions of this
Lease, the right to maintain possession and use the Equipment for
the Lease Term as provided in Schedule(s) A. Lessee, at its
expense, will protect and defend Lessor's title to the Equipment
from and against all claims, liens, and legal process of creditors
of Lessee and take such action as is necessary to discharge any
such claim, lien, or legal process. Lessor may require plates or
markings to be affixed to or placed on the Equipment indicating
Lessor is the owner and Lessee will not alter, deface, cover or
remove such ownership identification.
6. TAXES, REGISTRATION, AND LICENSING
Lessee agrees to comply with all laws, regulations and orders
relating to the Lease and to pay when due as additional rent, all
assessments, license fees, taxes (including but not limited to
sales, use, excise, personal property, value added, consumption,
franchise, state income, gross receipts, ad valorem, stamp,
documentary and federal highway use tax) and all other governmental
charges, fees, fines or penalties whatsoever, whether payable by
Lessor or Lessee, on or relating to the Equipment or the use,
registration, rental, shipment, transportation, delivery, ownership
or operation thereof and on or relating to the Lease and the
schedules executed in connection therewith except taxes of Lessor
on net income imposed by the United States or the State of
Minnesota; provided, however, that if under local law or custom
such payments may he made only by Lessor, Lessee shall promptly
notify Lessor, and shall reimburse Lessor, upon demand, for all
payments made by Lessor. Lessor shall include the Equipment, if
applicable, on Lessor's personal property tax return and Lessee
shall reimburse Lessor, upon demand, for all taxes paid by Lessor
with respect thereto. Lessee shall file all other returns required
therefor and furnish copies to Lessor; provided, however, that the
foregoing shall not include any federal and state taxes of Lessor.
Lessee shall obtain such licensing and registration of the
Equipment as is required by federal, state and local law or
regulation. Lessee agrees to notify Lessor promptly in writing not
more than five (5) days after any attachment, tax lien or other
judicial process shall attach to the Equipment and the full
particulars thereof.
7. GENERAL INDEMNIFICATION
Provided that the following is not due to Lessor's fault or
negligence, Lessee assumes liability for, and hereby agrees to
indemnify, protect and hold harmless Lessor, its agents, employees,
officers, directors, successors and assigns from and against any
and all liabilities, obligations, liens, losses, damages, injuries,
claims, demands, penalties, actions, costs and expenses, including
reasonable attorney fees (hereinafter collectively called "Losses")
of whatsoever kind and nature (including any of the foregoing
arising in connection with latent or other defects, or any claim
for patent, trademark or copyright infringement or under the
doctrine of strict liability), arising out of the manufacture,
possession, use, condition, operation, installation, alteration
(with or without Lessor's consent), repair, maintenance, ownership,
selection, delivery, leasing, removal or return of the Equipment,
by Lessee, its agents, its employees or any permitted sublessees,
or arising out of any failure on the part of Lessee to perform or
comply with conditions of this Lease or by operation of law. The
indemnities and assumptions of liabilities and obligations provided
in Sections 6 and 8 hereof and in this Section shall continue in
full force and effect notwithstanding expiration or other
termination of the Lease.
8. TAX INDEMNITY
Lessee agrees that if Lessor shall not be entitled to accelerated
cost recovery deductions (the "MACRS deductions") as allowed under
Section 168 of the Internal Revenue Code of 1986, as amended, ("the
Code") based on 100% of the Original Cost of the Equipment to
Lessor and for the depreciable life referred to in the attached
Schedule(s) A, or if Lessor loses any other intended tax benefit as
a result of any subsequent change in the Code, (including a change
in the maximum federal corporate income tax rates from the rates in
effect under the Tax Reform Act of 1986 hereinafter referred to as
a "Tax Rate Change") or rules and regulations promulgated pursuant
thereto, whether or not retroactive, which impacts Lessor's
intended return and economics from this transaction, or if Lessor
is required to recognize: income other than as contemplated under
the Lease, or if any item of income, gain, loss or deduction is
treated as having been derived from or allocable to sources outside
the U.S. (herein individually and collectively called the "Loss"),
then Lessee shall pay to Lessor, within thirty (30) days alter the
date of such Loss a lump sum amount which, after deduction of all
taxes required to be paid by Lessor in respect of the receipt of
such sum under the laws of any federal, state or local government
or taxing authority, shall preserve Lessor's after-tax discounted
cash flow rate of return on equity, cash flows and book income
based on FASB 13, assumed by Lessor in entering into this Lease
(hereinafter the "Lessor's Economic Return") plus the amount
required to reimburse Lessor on an after tax basis for interest and
penalties (including additions to tax because of underpayment of
estimated tax) which may be payable to any federal, state or local
government or taxing authority in connection with such Loss.
Notwithstanding the foregoing, any payment with respect to a Loss
(except for the amount of Loss, if any, which has occurred to date)
caused by a Tax Rate Change and due during the Lease Term shall be
made through an increase to the Rent sufficient to maintain the
Lessor's Economic Return on an on-going, current basis. Any such
Loss discovered after the expiration of the Lease Term which
occurred during the Lease Term shall be paid in a lump sum as
provided herein.
The amount of such Loss shall be determined by mutual agreement of
Lessor and Lessee or, failing such agreement, by Peat Marwick Main
& Co. or another independent firm of certified public accountants
acceptable to Lessor, at shared expense.
In the event there is a change in tax law which affects the
Stipulated Loss Value schedule as originally completed, then as
soon as reasonably possible after the change in tax law the
Stipulated Loss Value schedule shall be adjusted accordingly. In
making the adjustment Lessor shall use the same assumptions as used
in computing the original Stipulated Loss Value schedule except
that the change in tax law shall he substituted for the old tax
law.
For the purpose of this Lease, the date of any such Loss shall be
the earliest of (i) the occurrence of any event (such as
disposition or change in use of the Equipment) which may cause such
Loss, or (ii) the payment by Lessor (or the consolidated federal
taxpayer group of which Lessor is a part) to the Internal Revenue
Service of the tax increase resulting from such Loss, or (iii)
receipt by Lessor from the appropriate taxing authority of any
notice of proposed deficiency, statutory notice of deficiency or
assessment relating to the Loss or (iv) a determination by Peat
Marwick Main & Co. or another independent firm of certified public
accountants or an independent tax counsel of a nationally
recognized law firm to the effect that Lessor (or the consolidated
federal taxpayer group of which Lessor is a part) is not entitled
to such deduction, or (v) the adjustment of the tax return of
Lessor (or the consolidated federal taxpayer group of which Lessor
is a part) to reflect such Loss. If Lessee is not in default as
defined in Section 13 hereof, Lessee shall not be required to pay
the foregoing amounts if the Loss results solely from the
occurrence of any of the following events: (i) a disqualifying
disposition due to sale by Lessor of the Equipment or the lease
thereof by Lessor, or (ii) a failure of Lessor to timely claim
depreciation for the Equipment in the appropriate tax return of
Lessor (or the consolidated federal taxpayer group of which Lessor
is a part) unless there is no reasonable basis to claim such
deductions, or claiming such deductions is inconsistent with
previous Internal Revenue Service adjustments.
9. LESSOR'S PERFORMANCE OF LESSEE'S OBLIGATIONS
If Lessee shall fail to duly and promptly perform any of its
obligations under this Lease with respect to the Equipment, Lessor
may, at its option, perform any act or make any payment which
Lessor deems necessary for the maintenance and preservation of the
Equipment and Lessor's title thereto, including payments for
satisfaction of liens, repairs, taxes, levies and insurance, and
all sums so paid or incurred by Lessor, together with any
delinquent payment charges pursuant to Section 3 hereof, and any
reasonable legal fees incurred by Lessor in connection therewith,
shall be paid by Lessee to Lessor upon demand. The performance of
any act or payment by Lessor as provided herein shall not be deemed
a waiver or release of any obligation or default on the part of
Lessee.
10. SELECTION, DELIVERY, AND INSTALLATION
Lessee has selected the Equipment, including the type, quantity,
and the supplier thereof, based solely on its own judgment and
expressly disclaims any reliance upon i) any statements or
representations, if any, made by Lessor, its agents or employees
and ii) Lessor's, its agents or employees, skill of judgement, If
any, to select or furnish suitable equipment. Lessee acknowledges
that Lessor is not a dealer, manufacturer, merchant or supplier of
equipment of any kind and that the Equipment subject to this Lease
is of a type, size, design and capacity selected by Lessee and that
Lessor is acquiring the Equipment or the right to possession and
use of the Equipment in connection with this Lease. Lessor shall
have no liability for any delivery or installation of the Equipment
or for any failure by supplier to fill the purchase order or meet
the conditions thereof.
11. USE AND ASSIGNMENT
Lessee will cause the Equipment to be operated in accordance with
any applicable manufacturer's manuals or instructions, applicable
laws, any insurance policies and any warranties of the manufacturer
with respect to the Equipment, by competent and duly qualified
personnel only, in accordance with applicable governmental
regulations, if any, and for its originally intended business
purpose only. Lessee shall not sell, pledge, hypothecate, or
otherwise encumber or suffer a lien upon or against any interest in
this Lease or the Equipment nor shall Lessee move the Equipment
from its place of installation or delivery, as set forth in
Schedule(s) A, without Lessor's prior written consent. LESSEE
SHALL NOT ASSIGN THE LEASE OR ASSIGN OR SUBLET ANY ITEM OF
EQUIPMENT TO ANY ENTITY NOT CONTROLLED BY LESSEE WITHOUT LESSOR'S
PRIOR WRITTEN CONSENT. ANY ASSIGNMENT OR SUBLEASE ENTERED INTO BY
LESSEE WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR, EXCEPT AS
PROVIDED FOR HEREIN, SHALL BE NULL AND VOID. IN THE EVENT LESSEE
ASSIGNS OR SUBLETS THE EQUIPMENT TO AN ENTITY CONTROLLED BY LESSEE,
AS PROVIDED HEREIN, LESSEE AGREES TO PROVIDE LESSOR PRIOR WRITTEN
NOTICE OF SUCH ASSIGNMENT OR SUBLEASE AND FURTHER AGREES TO PROVIDE
LESSOR WITH ANY AND ALL DOCUMENTATION LESSOR DEEMS NECESSARY TO
PROTECT ITS INTEREST IN THE EQUIPMENT. ANY ASSIGNMENT OR SUBLEASE
SHALL NOT RELIEVE LESSEE OF PRIMARY LIABILITY FOR DUTIES AND
OBLIGATIONS UNDER THE LEASE.
Lessee agrees that Lessor may assign, sell or encumber all or any
part of this Lease, the Equipment and the Rent hereunder,
notwithstanding the fact that any such assignment, sale, or
encumbrance may materially change the duty of or materially
increase the burden or risk imposed on Lessee; and upon written
notice Lessee will unconditionally pay to such assignee all Rent
and other sums due on or to become due under this Lease. Lessee
shall not assert against assignee and/or mortgagee any defense,
counterclaim or offset that Lessee may have against Lessor.
Subject to the other terms and conditions herein, this Lease inures
to the benefit of and is binding upon the heirs, legatees, personal
representatives, successors and permitted assigns of the parties
hereto.
12. ALTERATIONS
Without the prior written consent of Lessor, Lessee shall not make
any alterations, additions or improvements to the Equipment. All
permitted alterations, additions and improvements of whatsoever
kind or nature made to the Equipment shall become the property of
Lessor upon expiration or earlier termination of this Lease except
that any of the foregoing which are removed without damage to the
Equipment, without adversely affecting the Equipment's commercial
value or originally intended use shall remain the property of
Lessee. In the event that (i) technological advances in one or
more pieces of the Equipment during the term of this Lease make it
economically advantageous for Lessee to replace such one or more
pieces of Equipment, or (ii) one or more pieces of the Equipment
become obsolete, then Lessee shall have the right, subject to the
consent of Lessor, which consent shall not be unreasonably
withheld, to replace such one or more pieces of Equipment with new
equipment or equipment incorporating such technological advances
and Lessee shall have the right to move such replaced equipment to
any of its other facilities, including facilities of affiliated
companies. Unless otherwise agreed at the time, Lessee shall pay
the cost of purchasing the new equipment, and shall own such new
equipment. No advertising or insignia shall be placed on the
Equipment without the prior consent of Lessor, unless the Equipment
is rolling stock, whereas Lessor hereby consents to the placement
of Lessee's insignia.
13. EVENTS OF DEFAULT
The occurrence of any of the following events shall constitute a
default by Lessee (herein called "Event of Default") in the
performance of Lessee's obligations hereunder:
(i) failure of Lessee to pay Rent within five (5) business
days after receipt of written notice it is due, or failure of
Lessee upon demand to pay any other amount required to be paid
herein or under any other agreement with Lessor; or
(ii) failure of Lessee to timely perform any covenant,
condition or obligation, other than the payment of Rent, required
to be performed by Lessee under this Lease (and such failure shall
continue for ten (10) business days after written notice by Lessor)
or under any material contract, loan or lease agreement; or
(iii) failure by Lessee or any of its guarantors ("Guarantor")
to generally pay its debts as such debts become due, and Lessee or
Guarantor continues generally not paying Lessee's or Guarantor's
debts as such debts become due for a period of three (3) days after
written notice given by Lessor; or
(iv) Lessee or Guarantor becomes insolvent or bankrupt or
makes an assignment for the benefit of creditors or consents to the
appointment of a trustee or receiver, or a trustee or a receiver
shall be appointed for Lessee or Guarantor for a substantial part
of their respective property without its consent and shall not be
dismissed for a period of thirty (30) days, or bankruptcy,
reorganization or insolvency proceedings shall be instituted by or
against Lessee or Guarantor and, if instituted against Lessee or
Guarantor, shall not be dismissed within thirty (30) days of
institution; or
(v) Lessee's or Guarantor's business is dissolved, terminated
or is discontinued; or Lessee or Guarantor dies; or
(vi)Lessee or Guarantor sells, transfers or disposes of all or
substantially all of its assets or property or a material portion
thereof, or merges with any other unaffiliated entity or engages in
any form of corporate reorganization or recapitalization without
the prior written consent of Lessor; or
(vii) a transfer of ownership of the Lessee's or Guarantor's
outstanding voting stock or other action (issuance of new shares,
sale of Treasury shares, purchase of outstanding shares, dividends,
etc.) which results in a controlling interest, or change in the
controlling interest, of 50% or more of Lessee or Guarantor without
the prior written consent of Lessor; or
(viii) Lessee attempts to move, sell, or transfer the
Equipment from its place of installation or domicile as described
in Schedule(s) A attached hereto, or encumber the Equipment or part
with possession, sublet or assign this Lease without Lessor's prior
written consent.
14. REMEDIES
Upon occurrence of any Event of Default and at any time thereafter
so long as the same shall be continuing, Lessor may, at its option,
declare this Lease to be in default and may do one or more of the
following with respect to any or all Equipment as Lessor in its
sole discretion shall elect, all of which are hereby authorized by
Lessee, to the extent permitted by and subject to compliance with
any mandatory requirements of applicable law then in effect:
(i) terminate this Lease effective immediately; or
(ii) cause Lessee, upon written demand and at Lessee's
expense, to promptly return any or all Equipment under all
Schedules to Lessor pursuant to Section 18 hereof; or
(iii) upon forty-eight (48) hours prior written notice or
confirmed facsimile to Lessee, take possession of any or all
Equipment and remove the same without liability for injuries
suffered through or loss caused by such repossession. LESSEE
WAIVES ANY AND ALL RIGHTS TO NOTICE, EXCEPT AS OTHERWISE PROVIDED
HEREIN, AND JUDICIAL HEARING WITH RESPECT TO THE REPOSSESSION OR
ATTACHMENT OF THE EQUIPMENT BY LESSOR IN THE EVENT OF DEFAULT
HEREUNDER BY LESSEE. In the event Lessor proceeds pursuant to this
subsection (iii), Lessor shall use its best efforts to sell any or
all Equipment at public or private sale as is commercially
reasonable given the existing conditions on an "AS IS, WHERE IS"
basis without recourse or warranties of any kind, or otherwise
hold, use, operate, or keep idle such Equipment, as Lessor in its
sole discretion determines is commercially reasonable; or
(iv) by written notice to Lessee, cause Lessee to pay Lessor
(as liquidated damages for loss of a bargain and not as a penalty)
on the date specified in such notice an amount equal to the Rent
due and payable on the first of the month following the date of the
notice of Lease termination plus a sum equal to the appropriate
Stipulated Loss Value determined as of the first of the month
following the date of the notice of Lease termination in accordance
with the Stipulated Loss Value Schedule set out in Schedule(s) A.
(v) Lessor may exercise any other right or remedy which may be
available to it under the Uniform Commercial Code or any other
applicable law or proceed by appropriate court action to enforce
the terms hereof or to recover damages for the breach hereof.
In addition, Lessee shall pay Lessor all costs and expenses
incurred by Lessor as a result of Lessee's default hereunder or the
termination hereof including without limitation, reasonable
attorney's fees, and costs arising out of repossession and disposal
of the Equipment.
Provided Lessee has previously paid to Lessor the sum of the
Stipulated Loss Value, Rent due and owing, and other costs and
expenses incurred pursuant hereto, Lessee shall be entitled to the
proceeds of any such sale, disposition, or re-lease of the
Equipment to the extent they do not exceed the Stipulated Loss
Value. Any excess shall be retained by Lessor. To the extent the
Equipment is released by Lessor, Lessee shall be credited the
present value of the lease rental stream at the discount rate of
Chase Manhattan Prime as of the date the re-lease is agreed to
between the parties. Furthermore, to the extent the parties to this
Lease need to determine the present value of any monies due under
the Lease, the parties agree that the discount rate shall be Chase
Manhattan Prime.
In addition, Lessee shall continue to be liable for all indemnities
under this Lease and for all reasonable attorney fees and other
costs and expenses resulting from the termination hereof and/or the
exercise of Lessor's remedies, including placing any Equipment in
the condition required by Section 18 hereof. No remedy referred to
in this Section is intended to be exclusive, but each shall be
cumulative and in addition to any other remedy referred to above or
otherwise available to Lessor at law or in equity. Any
repossession or subsequent sale or lease by Lessor of the Equipment
shall not bar an action for a deficiency as herein provided and the
bringing of any action or the entry of judgment against the Lessee
shall not bar the Lessor's right to repossess any or all Equipment.
No expressed or implied waiver by Lessor of any default shall
constitute a waiver of any other default by Lessee or a waiver of
any of Lessor's rights.
15. NOTICES
Any notices or demands required to be given herein shall be given
to the parties in writing and shall be deemed given when mailed by
certified mail, postage prepaid, or by confirmed facsimile to the
address herein set forth or to such other address as the parties
may hereafter substitute by written notice.
16. REPAIRS: LOSS AND DAMAGE
Lessee, at its own costs and expense, shall keep the Equipment in
good repair, condition and working order including but not limited
to compliance with all applicable recall orders and shall furnish
all parts, mechanisms and devices and servicing required therefor.
All such parts, mechanisms and devices shall immediately become the
property of Lessor and part of the Equipment for all purposes
hereof.
Lessee agrees to immediately inform Lessor of any damage to the
Equipment or caused by the Equipment or the existence of any
Casualty Occurrence as hereinafter defined. All risk of loss with
respect to the Equipment shall be borne by Lessee.
If Lessor determines that any Equipment is lost, stolen, destroyed,
or damaged for any reason, or in the event of any condemnation,
confiscation, theft or seizure or requisition of title to or the
use of such Equipment (herein called "Casualty Occurrence"), Lessee
will, at the option of Lessor, either (a) replace the same with
like Equipment in good repair or (b) promptly pay to Lessor an
amount equal to the Rent in respect of the Equipment suffering a
Casualty Occurrence due and payable on the first of the month
following the date of the Casualty Occurrence plus a sum equal to
the Stipulated Loss Value of such Equipment determined as of the
first of the month following the date of the Casualty Occurrence in
accordance with the Stipulated Loss Value Schedule set out in the
appropriate Schedule A(s) less any physical damage insurance
proceeds paid to Lessor as a result of said Casualty Occurrence. As
of the date on which the Stipulated Loss Value is due, the Rent for
such Equipment shall cease to accrue and the term of this Lease as
to such Equipment shall terminate and (except in case of the loss,
theft or complete destruction), Lessor shall be entitled to recover
possession of the Equipment. Lessor hereby appoints Lessee its
agent to dispose of any Equipment suffering a Casualty Occurrence
at the best price obtainable on an "AS IS, WHERE IS" basis without
recourse or warranties of any kind. Provided that Lessor has been
paid the Stipulated Loss Value and all Rent or other sums due and
owing as to such Equipment, Lessee shall be entitled to the
proceeds of such sale to the extent they do not exceed the
Stipulated Loss Value of such Equipment. Any excess shall be paid
to Lessor.
17. INSPECTION
Lessor, or its employees or agents, may inspect the Equipment at a
reasonable time or place, and for such purpose enter any building
or place where said Equipment is located.
18. RETURN OF EQUIPMENT
Upon the Expiration Date, or earlier termination as provided
herein, unless Lessee shall have duly exercised a renewal or
purchase option with respect thereto, Lessee, at its own risk and
expense, will immediately return the Equipment as described in such
Schedule(s) A to Lessor in the condition as described in the
Equipment Condition Addendum attached hereto, at such location(s)
as Lessor shall designate, freight and insurance prepaid.
In the event that the Equipment is not returned within three (3)
days after the Expiration Date or such date as earlier terminated,
Lessee shall pay as additional rent an amount equal to the greater
of the fair market daily rental as determined by Lessor or the
daily equivalent of Rent as described in the applicable Schedule(s)
A for each day from, and including the Expiration Date or such date
as earlier terminated until and including the day on which the
Equipment is returned. Payment of additional rent hereunder does
not relieve Lessee of its obligation to return the Equipment
immediately at such time as set forth herein.
19. FINANCIAL REPORTS
Lessee and Guarantor shall furnish Lessor during the Lease Term
hereof with annual audited financial statements within one hundred
twenty (120) days after the end of its fiscal year and such other
financial information as Lessor may from time to time request
including, without limitation, reports filed with federal or state
regulatory agencies. Lessee and Guarantor hereby warrant and
represent that all financial statements heretofore and hereafter
delivered to Lessor by or upon behalf of Lessee and Guarantor will
be prepared in accordance with generally accepted accounting
principles, and any statements and data submitted in writing to
Lessor in connection with this Lease, are true and correct and
present fairly the financial condition of Lessee and Guarantor for
the period involved.
20. NO OFFSET
LESSEE HEREBY WAIVES ANY AND ALL EXISTING AND FUTURE CLAIMS AND
OFFSETS, AGAINST ANY RENT OR OTHER PAYMENTS DUE HEREUNDER; AND
AGREES TO PAY THE RENT AND OTHER AMOUNTS HEREUNDER REGARDLESS OF
ANY OFFSET OR CLAIM WHICH MAY BE ASSERTED BY LESSEE OR ON ITS
BEHALF. LESSEE HEREBY FURTHER ACKNOWLEDGES THAT THE MANUFACTURER
AND/OR SUPPLIER OF THE EQUIPMENT, INCLUDING THEIR RESPECTIVE AGENTS
AND EMPLOYEES, WERE AT NO TIME AND ARE NOT NOW THE AGENT OR UNDER
THE SUPERVISION OF LESSOR, NOR WAS OR IS LESSOR IN ANY MANNER, THE
AGENT OF THE MANUFACTURER AND/OR SUPPLIER.
21. LESSEE'S REPRESENTATIONS
Lessee represents, warrants and agrees that (a) it has the full
power, authority and legal right to enter into and perform this
Lease; the execution, delivery and performance of this Lease have
been duly authorized by all necessary corporate or other legal
action on the part of Lessee, does not require the approval or
consent of any stockholder, trustee or holders of any indebtedness
or obligations of Lessee, and will not contravene any law,
governmental rule, regulation or order binding on Lessee (or the
Certificate of Incorporation or By-Laws of Lessee if it is a
corporation) or contravene the provisions of, or constitute a
default under, or result in the creation of any lien or encumbrance
upon the property of Lessee under any indenture, mortgage, contract
or other agreement to which Lessee is a party, or by which its
subsidiaries may be bound or affected; and (b) all consents and
approvals of, the giving of notice to, registration with, and the
taking of any other action in respect of any federal, state or
foreign governmental authority or agency, necessary, if at all, to
permit the transactions contemplated by this Lease have been taken;
and (c) this Lease constitutes a legal, valid and binding
obligation of Lessee enforceable against Lessee in accordance with
the terms thereof; and (d) there are no pending or threatened
actions or proceedings before any court or administrative agency
which will adversely affect the condition, business or operations
of Lessee or any of its subsidiaries or the ability of Lessee to
perform its obligations under this Lease; and (e) the transactions
contemplated by this Lease will raise no presumption of fraud as
against and will be effective against all creditors of Lessee under
applicable state and federal laws, including, without limitation,
laws relating to fraudulent conveyances or bulk transfers; and (f)
Lessee shall provide Lessor, upon request, with an opinion of
counsel satisfactory to Lessor with respect to the foregoing
matters.
22. FURTHER ASSURANCES
Lessee shall execute and deliver to Lessor, upon Lessor's request,
such further documents, instruments, and assurances as Lessor deems
necessary or advisable for the confirmation or perfection of this
Lease and Lessor's rights hereunder.
23. QUIET ENJOYMENT
Lessor covenants that Lessor will not interfere in Lessee's quiet
enjoyment of the Equipment hereunder during the Lease Term so long
as (i) Lessee is in compliance with each term and condition hereof,
and (ii) no Event of Default has occurred or is continuing.
24. WAIVER
The failure of Lessor to insist, in any one or more instances, upon
strict performance by Lessee of any of the covenants of this Lease,
or to exercise any option herein contained, shall not be construed
as a waiver or relinquishment for the future of such covenant or
option, but the same shall continue and remain in full force and
effect. The receipt by Lessor of Rent, with knowledge of the
breach of any covenant or condition hereof, shall not be deemed a
waiver of such breach and no waiver by Lessor of any provision
hereof shall be deemed to have been made unless expressed in
writing and signed by Lessor.
25. INSURANCE
At its own expense, Lessee shall obtain and maintain for the Lease
Term, physical damage and liability insurance. The physical damage
insurance shall insure against loss or damage to the Equipment
including, without limitation, loss by fire, explosion, wind, hail,
flood, malicious mischief, vandalism, theft, collision, upset,
overturn, glass breakage and any other physical loss to the
Equipment. The amount of insurance against loss or damage to the
Equipment shall not be less than the Stipulated Loss Value of the
Equipment pursuant to Schedule(s) A. Such policy providing
insurance for the damage to the Equipment shall name Lessor as Loss
Payee as Lessor's interest may appear and, shall not have a
deductible amount in excess of $100,000 without the express written
consent of Lessor.
The liability insurance shall provide coverage for the liability of
Lessee and Lessor for damages arising out of the ownership,
maintenance, use, and operation of the Equipment. Such liability
insurance shall also provide a contractual liability provision for
purposes of insuring the performance of Lessee hereunder this
Lease. Liability insurance shall have minimum limits of $1,000,000
per person, $1,000,000 occurrence and $1,000,000 property damage,
or $1,000,000 combined single limit and shall have no deductible
without the express written consent of Lessor. Each insurance
policy shall name Lessee as the named insured and Lessor as an
additional insured and shall contain a clause requiring the insurer
to give Lessor 30 days prior written notice of any material
alteration in the terms of the policy or of the cancellation
thereof. To the extent that Lessee may have liability insurance in
excess of the minimum limits required herein, Lessor shall be named
as an additional insured on any such coverage. Each policy shall
be primary without right of contribution from any other insurance
which is carried by Lessor and shall expressly provide that all of
the provisions thereof except the limits of liability, shall
operate in the same manner as if there were a separate policy
covering each insured.
Lessee or Lessee's insurance agent(s) shall furnish to Lessor a
Certificate of Insurance or other evidence satisfactory to Lessor
that such insurance coverage is in or will be in effect as of the
Commencement Date set forth in Schedule(s) A or the date of
Delivery and Acceptance by Lessee, whichever is earlier; provided,
however, that Lessor shall be under no duty either to ascertain the
existence of or to examine such insurance policy or to advise
Lessee in the event such insurance coverage shall not comply with
the requirements hereof. Lessee further agrees to give to Lessor
prompt written notice not more than five (5) days after any damage
to, or loss of, the Equipment or damage or injury caused by the
Equipment. Lessee shall, at its own expense and cost, have the
duty and responsibility to make all proofs of loss and take all
other steps necessary to effect collections from underwriters for
any loss under any of the above mentioned policies. The proceeds of
such insurance, at the option of Lessor shall he applied (a) toward
the replacement, restoration or repair of the Equipment or (b)
toward payment of the obligations of Lessee hereunder. Lessee
hereby appoints Lessor as Lessee's Attorney-In-Fact to make claim
for, receive payment of, and execute and endorse all documents,
checks or drafts for loss or damage under any such insurance
policy.
Any policies of insurance carried in accordance with this Section
shall provide that in respect of the interests of Lessor in such
policies, the insurance shall not be invalidated by any action or
inaction of Lessee or any other person (other than Lessor)
including, but not limited to, any misrepresentation and shall
insure Lessor's interests, as they appear, regardless of any breach
or violation of any warranties, declarations, or conditions
contained in such policies by or binding upon Lessee or any other
person (other than Lessor).
Lessee shall, to the extent reasonably possible, obtain the
liability insurance required hereunder on an occurrence basis
rather than a claims-made basis. To the extent that the Lessee
must obtain some or all of this coverage on a claims-made basis,
Lessee shall, provide Lessor with satisfactory evidence that the
retroactive date of the claims-made policy is prior to the
Commencement Date or the date of Delivery and Acceptance by Lessee,
whichever is earlier; that the then remaining aggregate amount of
Lessee's coverage is and will be sufficient to meet the minimum
amount of coverage required hereunder, and that the policy will
either remain in force, be renewed, or a satisfactory discovery
period will be purchased to cover any claims which might arise
hereunder in the future.
Lessee's obligation to keep the Equipment insured as provided
herein shall continue until the Equipment is returned to Lessor
pursuant to Section 18 hereof.
26. TERMINATION OPTIONS.
Provided Lessee shall have complied with all terms and conditions
of the Lease and provided Lessee shall not be in default as defined
in Section 13 herein, Lessee shall have the termination options as
set forth in Schedule(s) A.
27. JURISDICTION
Lessee hereby consents to jurisdiction and venue of the federal or
state courts sitting in the State of Minnesota for purposes of
resolving all disputes of any nature whatsoever regarding the
Lease, or any transaction contemplated hereby and Lessee hereby
waives objection which it may now or hereafter have to the laying
of jurisdiction or venue in the federal or state courts of
Minnesota. Lessor and Lessee agree that a summons and complaint
commencing an action or proceeding in any such court shall be
properly served and shall confirm personal jurisdiction if served
personally, by certified mail to it at its address designated
pursuant to the Lease, or as otherwise provided under the
respective rules of the state or federal courts of Minnesota.
28. MISCELLANEOUS
If there should be more than one party executing this Lease as
Lessee, all obligations hereunder to be performed by Lessee shall
be the joint and several liability of all such parties. Any
provision of this Lease which is 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. Time is of
the essence with respect to this Lease. The captions in this Lease
are for convenience only and shall not define or limit any of the
terms hereof.
The parties hereto acknowledge by initialing immediately hereafter
that no waiver, amendment, release or modification of this Lease
shall be established by conduct, custom, or course of dealing but
solely by an instrument in writing duly executed ed by the parties
hereto.
Lessee: (NRJ) Lessor: (DRN)
Lessee agrees that it shall reimburse Lessor all of Lessor's costs
and expenses (including attorneys' fees and court costs, if any) of
any nature whatsoever incurred by Lessor i) to enforce its rights
or remedies as provided in this Lease or as otherwise provided by
law or ii) to resolve any dispute regarding this Lease.
This Lease consists of the foregoing and the Schedules, Exhibits,
Addenda, and Riders referred to herein and correctly sets forth the
entire Lease agreement between Lessor and Lessee. No agreements or
understandings shall be binding on either of the parties hereto
unless specifically set forth in this Lease.
THIS LEASE SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF MINNESOTA, INCLUDING ALL
MATTERS OF CONSTRUCTION, VALIDITY, AND PERFORMANCE, REGARDLESS OF
THE STATE OF MINNESOTA'S CHOICE OF LAW PROVISIONS.
IN WITNESS WHEREOF, the parties hereto through a duly authorized
representative have executed this Lease as of this 1st day of
September, 1993.
LESSEE: DOSKOCIL COMPANIES, INC.
By (Neil R. Johnson)
WITNESS/(Darian Andersen)
ATTEST
Title Vice President
LESSEE: DIXIE FOODS COMPANY
By (Neil R. Johnson)
WITNESS/(Darian Andersen)
ATTEST
Title Vice President
LESSOR: CARGILL LEASING CORPORATION
By (Donald R. Nielsen)
Title Vice President
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