EXHIBIT 10.2
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FIRST SUPPLEMENTAL LEASE AGREEMENT
BETWEEN
THE INDUSTRIAL DEVELOPMENT BOARD OF THE
CITY OF MONTGOMERY
AND
KINPAK INC.
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RELATING TO
THE INDUSTRIAL DEVELOPMENT BOARD OF THE
CITY OF MONTGOMERY
$4,000,000 INDUSTRIAL REFUNDING REVENUE BONDS
(KINPAK INC. PROJECT) SERIES 1997
$990,000 INDUSTRIAL REFUNDING REVENUE BONDS
(KINPAK INC. PROJECT) SERIES 1996B
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DATED
AS OF
MARCH 1, 1997
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ROY S. GOLDFINGER, P.C.
MONTGOMERY, ALABAMA
BOND COUNSEL
THIS INSTRUMENT AMENDS AND SUPPLEMENTS THAT
CERTAIN RESTATED LEASE AGREEMENT,
DATED AS OF DECEMBER 1, 1996 AND RECORDED
IN THE OFFICE OF THE JUDGE OF PROBATE
OF MONTGOMERY COUNTY, ALABAMA, IN RLPY BOOK
1718, PAGE 621, BETWEEN THE
INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF
MONTGOMERY AS LESSOR AND KINPAK INC.
AS LESSEE. CERTAIN RIGHTS OF THE BOARD
UNDER SAID LEASE AGREEMENT, AS AMENDED
AND SUPPLEMENTED HEREBY, HAVE BEEN ASSIGNED
TO REGIONS BANK, AS TRUSTEE,
PURSUANT TO A TRUST INDENTURE DATED AS OF
DECEMBER 1, 1996 AND RECORDED IN SAID
PROBATE OFFICE IN RLPY BOOK 1718, PAGE 679,
AS AMENDED AND SUPPLEMENTED BY A
FIRT SUPPLEMENTAL TRUST INDENTURE OF EVEN
DATE HEREWITH.
<PAGE>
FIRST SUPPLEMENTAL LEASE AGREEMENT
BETWEEN
THE INDUSTRIAL DEVELOPMENT BOARD
OF THE CITY OF MONTGOMERY
AND
KINPAK INC.
INDEX
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Page
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PARTIES.......................................................................1
RECITALS......................................................................1
Section 1.
Definitions.......................................................2
Section 2.
Interpretation....................................................3
Section 3. Captions and
Headings.............................................4
Section 4. Representations by the
Issuer.....................................4
Section 5. Representations and Covenants by
the Company - General............4
Section 6. Representations and Covenants by
the Company - Tax-Related........4
Section 7. Actions Under Section 144(a)(4) of
the Code.......................7
Section 8. Agreement to Issue Series 1997
Bonds; Application of Proceeds.....8
Section 9. Exclusion from Gross
Income.......................................8
Section 10. Rebate Fund Calculations &
Payments...............................9
Section 11. Investment of Fund
Moneys.........................................9
Section 12. Depreciation
Method..............................................10
Section 13. Effect on Original
Lease.........................................10
Section 14. Execution
Counterparts...........................................10
SIGNATURES...................................................................11
ACKNOWLEDGMENTS..............................................................12
CONSENT OF
TRUSTEE...........................................................13
CONSENT OF
BANK..............................................................14
EXHIBIT A - Description of Leased
Realty
i
<PAGE>
STATE OF ALABAMA )
MONTGOMERY COUNTY )
FIRST SUPPLEMENTAL LEASE AGREEMENT
This FIRST SUPPLEMENTAL LEASE AGREEMENT made and entered into as
of
March 1, 1997 (this "First Supplemental
Lease") , between THE INDUSTRIAL
DEVELOPMENT BOARD OF THE CITY OF
MONTGOMERY, its successors and assigns (the
"Issuer"), a public corporation organized
under the laws of the State of Alabama
(the "State"), and KINPAK INC. (formerly
known as Kinbright, Inc.), an Alabama
corporation, its successors and assigns
(the "Company"), under the circumstances
summarized in the following recitals (the
capitalized terms not defined in the
recitals being used therein as defined in
Article I hereof or, if not otherwise
defined herein, in the Original Lease
hereinafter mentioned, which definitions
are hereby incorporated by reference
herein):
A. The Issuer has been heretofore organized under and is authorized
by
the Act to acquire, enlarge, improve,
expand, own, lease, and dispose of
properties to the end that the Issuer may
be able to promote industry and
develop trade by inducing manufacturing,
industrial, commercial and research
enterprises to locate in the State, or to
enlarge and expand existing
enterprises, or both, and further the use
of the agricultural products and
natural resources of the State.
B. On October 17, 1979, the Issuer issued the Prior Bonds pursuant
to
the Act and applied the proceeds thereof to
acquire, construct and equip the
Existing Facilities. On December 20, 1996,
the Issuer issued inter alia the
Series 1996A Bonds pursuant to the Act and
the Original Indenture, the proceeds
of which were to be applied (1) to renovate
and upgrade the Existing Facilities
and (2) to acquire, construct and equip the
New Facilities. The Old Facilities
and the New Facilities (collectively, and
as more fully described in the
Original Lease, the "Project") are situated
on the Leased Realty as described in
Exhibit A hereto.
C. In the Original Lease and the Original Indenture, the Issuer
agreed
to issue the Refunding Obligations in order
to refund the Series 1996A Bonds,
such issuance and refunding to occur as
soon as all of the requirements of the
Code to assure the non-Taxable status of
the Refunding Obligations could be
satisfied, including without limitation the
requirement of obtaining an
allocation of the State ceiling for private
activity bonds (an "Allocation").
D. The Issuer has on January 8, 1997 received an Allocation in
the
amount of $4,000,000, allowing the issuance
on a non-Taxable basis of Refunding
Obligations in such amount, being equal to
the outstanding amount of the Series
1996A Bonds.
E. The Issuer has adopted the Bond Resolution providing for the
issuance of the Series 1997 Bonds and for
the amending and supplementing of the
Original Lease, to be accomplished hereby,
and of the Original Indenture, to be
accomplished by the First Supplemental
Indenture to be entered into
simultaneously herewith.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements
hereinafter contained, the parties to this
First Supplemental Lease hereby
formally covenant, agree and bind
themselves as follows:
<PAGE>
Section 1. Definitions. In addition to the words and terms
elsewhere
defined in this First Supplemental Lease or
the Original Lease, or by reference
to the Indenture or other document, unless
the context or use clearly indicates
another or different meaning or intent:
"Bond" or "Bonds" means, collectively, the Series 1996B Bonds and
the
Series 1997 Bonds.
"Bond Fund" means, individually or collectively, as the context
may
require, the Bond Fund in respect of the
Series 1996B Bonds created in the
Original Indenture and/or the Bond Fund in
respect of the Series 1997 Bonds
created in the First Supplemental
Indenture.
"Bond Purchase Fund" means, individually or collectively, as
the
context may require, the Bond Purchase Fund
in respect of the Series 1996B Bonds
created in the Original Indenture and/or
the Bond Purchase Fund in respect of
the Series 1997 Bonds created in the First
Supplemental Indenture.
"Bond Resolution" means the resolution adopted by the Board of
Directors of the Issuer on January 22, 1997
authorizing the issuance of the
Series 1997 Bonds and the execution and
delivery of the Issuer Documents and
related documents.
"Company Documents" means, individually or collectively, as the
context
may require, each or all of this First
Supplemental Lease, the Company's consent
to the First Supplemental Indenture, such
amendments and/or supplements to the
Reimbursement Agreement, the Placement
Agency Agreement, the Remarketing
Agreement, the Mortgage, the Assignment and
the Pledge Agreement as the Bank may
deem necessary or desirable in connection
with the issuance of the Series 1997
Bonds, and such other documents or
instruments as the Company may enter into in
order to consummate the transactions
contemplated hereby and thereby.
"Construction Fund" means the Construction Fund created in the
First
Supplemental Indenture.
"First Supplemental Indenture" means the First Supplemental
Trust
Indenture, dated as of the first day of the
month in which the Issue Date
occurs, between the Issuer and the Trustee,
amending and supplementing the
Original Indenture in connection with the
issuance of the Series 1997 Bonds.
"Indenture" means the Original Indenture, as amended and
supplemented
by the First Supplemental Indenture and as
the same may hereafter be further
amended and supplemented.
"Initial Letter of Credit" means the Letter of Credit issued by
the
Bank and delivered to the Trustee on
December 20, 1996, as the same has been
modified in connection with the issuance of
the Series 1997 Bonds.
"Issue Date" means the date of the initial authentication and
delivery
of the Series 1997 Bonds.
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<PAGE>
"Issuer Documents" means, individually or collectively, as the
context
may require, each or all of this First
Supplemental Lease, the First
Supplemental Indenture, such amendments
and/or supplements to the Placement
Agency Agreement, the Mortgage and the
Assignment as the Bank may deem necessary
or desirable in connection with the
issuance of the Series 1997 Bonds, and such
other documents as the Issuer may enter
into in order to consummate the
transactions contemplated hereby and
thereby.
"Lease Agreement" means the Original Lease, as amended and
supplemented
by this First Supplemental Lease and as the
same may hereafter be further
amended and supplemented.
"Original Indenture" means the Trust Indenture dated as of December
1,
1996 between the Issuer and the
Trustee.
"Original Lease" means the Restated Lease Agreement dated as of
December 1, 1996 between the Issuer and the
Company.
"Placement Memorandum" means the Private Placement Memorandum to
be
dated on or before the Issue Date
pertaining to the private placement of the
Bonds.
"Rebate Fund" means, individually or collectively, as the context
may
require, the Rebate Fund in respect of the
Series 1996B Bonds created in the
Original Indenture and/or the Rebate Fund
in respect of the Series 1997 Bonds
created in the First Supplemental
Indenture.
"Refunding Fund" means the Refunding Fund created in the First
Supplemental Indenture.
Section 2. Interpretation. The provisions of Section 1.2 of the
Original Lease are hereby ratified and
reaffirmed, except that, unless the
context indicates otherwise, the terms
"hereof", "hereby", "herein", "hereto",
"hereunder" and similar terms refer to this
First Supplemental Lease; and the
term "hereafter" means after, and the term
"heretofore" means before, the
effective date of this First Supplemental
Lease.
All references in the Original Indenture and the Original Lease to
the
Refunding Obligations shall be construed to
refer to the Series 1997 Bonds,
which are and constitute the Refunding
Obligations; and references in the
Original Lease to the Refunding Date shall
be construed to refer to the Issue
Date (as herein defined).
Section 3. Captions and Headings. The captions and headings in
this
First Supplemental Lease are solely for
convenience of reference and in no way
define, limit or describe the scope or
intent of any Articles, Sections,
subsections, paragraphs, subparagraphs or
clauses hereof.
Section 4.
Representations by the Issuer. The Issuer ratifies and
reaffirms the representations on its part
set forth in Section 2.1 of the
Original Lease, which are hereby
incorporated by reference herein, except that
references therein to "Issuer Documents"
shall be construed, for purposes of
this First Supplemental Lease, to mean
"Issuer Documents" as herein defined.
-3-
<PAGE>
Section 5. Representations and Covenants by the Company - General.
The
Company ratifies and reaffirms the
representations on its part set forth in
Section 2.2 of the Original Lease, which
are hereby incorporated by reference
herein, except that references therein to
"Company Documents" shall be
construed, for purposes of this First
Supplemental Lease, to mean "Company
Documents" as herein defined.
Section 6. Representations and Covenants by the Company -
Tax-Related.
The Company ratifies and reaffirms the
representations on its part set forth in
Section 2.3 of the Original Lease regarding
the Series 1996B Bonds, which are
hereby incorporated by reference herein.
The Company acknowledges that the
proceeds of the Series 1997 Bonds, which
are being applied to refund the Series
1996A Bonds, are also treated conceptually
as being applied to the purposes
financed or to be financed by the proceeds
of the Series 1996A Bonds, and
therefore that the non-Taxable status of
the Series 1997 Bonds is in part
dependent on the continuing compliance,
before and after the Issue Date, on the
part of the Series 1996A Bonds with certain
requirements and provisions of the
Code. As such, the Company hereby
incorporates by reference herein the
representations and statements contained in
Section 2.4 of the Original Lease
relating to the Series 1996A Bonds,
reaffirms the accuracy and completeness
thereof, represents that it has complied
and will comply with the
representations and covenants therein, and
further represents or reiterates
that:
(a) The acquisition and renovation of the Existing Facilities
and the acquisition and construction of the New Facilities were
not
commenced (within the meaning of Section 144 of the Code) prior
to
February 20, 1996, being the date of adoption by the Issuer of
the
Inducement Resolution.
(b) Ninety-five percent (95%) or more of the net proceeds
(within the meaning of the Code) of the Series 1996A Bonds were
intended to be, and ninety-five percent (95%) or more of such
net
proceeds of the Series 1997 Bonds will be, used (i) for the
acquisition, construction, reconstruction or improvement of land
or
property of a character subject to the allowance for
depreciation
within the meaning of Section 144(a)(1) of the Code and (ii) to
provide
a "manufacturing facility" and facilities "directly related and
ancillary" thereto, all within the meaning of Section 144(a)(12)(C)
of
the Code; provided that no proceeds expended or to be expended to
pay
Issuance Costs in respect of the Series 1996A Bonds or the Series
1997
Bonds were or will be counted as being within such 95%. The Company
has
not requested or authorized and will not request or authorize
any
disbursement pursuant
to Section 4.1 of the Original Lease, which, if
paid, resulted or would
