SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
----------------------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission file number 0-23048
LINCOLN SNACKS COMPANY
(exact name of registrant as specified in its charter)
Delaware 47-0758569
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
4 High Ridge Park, Stamford, Connecticut 06905
(Address of principal executive offices) (zip code)
(Registrant's telephone number, including area code) (203) 329-4545
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
The number of shares of the issuer's Common Stock, $.01 par value, outstanding
on February 5, 1997 was 6,331,790 shares.
<PAGE>
LINCOLN SNACKS COMPANY
INDEX TO FORM 10-Q
PAGE
Part I. FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
Balance Sheets as of December 31, 1996
and June 30, 1996 3-4
Statements of Operations for the
three months ended December 31, 1996
and December 31, 1995 5
Statements of Operations for the
six months ended December 31, 1996
and December 31, 1995 6
Statements of Changes in Stockholders'
Equity for the six months ended
December 31, 1996 and December 31, 1995 7
Statements of Cash Flows for the
six months ended December 31, 1996
and December 31, 1995 8
Notes to Financial Statements 9-10
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS 11-13
Part II. OTHER INFORMATION
Item 1-4. OTHER INFORMATION 14-15
Item 5. OTHER INFORMATION 14-15
Item 6. EXHIBITS AND REPORTS ON FORM 8-K 14-15
Signatures 16
<PAGE>
LINCOLN SNACKS COMPANY
BALANCE SHEETS
ASSETS
AS OF DECEMBER 31, 1996 AND JUNE 30, 1996
<TABLE>
<CAPTION>
December 31, June 30,
1996 1996
------------ -----------
ASSETS (Unaudited)
CURRENT ASSETS:
<S> <C> <C>
Cash $ 116,217 $ 58,538
Accounts receivable (net of allowance
for doubtful accounts and cash discounts
of $216,675 and $173,524 respectively) 2,626,669 2,693,875
Inventories 1,867,727 2,083,528
Prepaid and other current assets 64,279 90,336
------------- ------------
Total current assets 4,674,892 4,926,277
PROPERTY, PLANT AND EQUIPMENT:
Land 370,000 610,000
Building and leasehold improvements 1,559,805 1,555,985
Machinery and equipment 5,169,076 5,147,886
Furniture and fixtures 62,291 62,291
Construction in process 76,160 8,161
------------- ------------
7,237,332 7,384,323
Less: accumulated depreciation
and amortization (2,299,938) (1,975,357)
------------- ------------
4,937,394 5,408,966
INTANGIBLE AND OTHER ASSETS,
net of accumulated amortization of
$644,792 and $780,337 3,545,568 3,643,487
TOTAL ASSETS $ 13,157,854 $ 13,978,730
============ ============
The accompanying notes to financial statements
are an integral part of these balance sheets.
</TABLE>
<PAGE>
LINCOLN SNACKS COMPANY
BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
AS OF DECEMBER 31, 1996 AND JUNE 30, 1996
<TABLE>
<CAPTION>
December 31, June 30,
1996 1996
------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY (Unaudited)
CURRENT LIABILITIES:
<S> <C> <C>
Current portion of term loan $ 449,624 $ 800,004
Borrowings under revolving
line of credit 0 556,115
Accounts payable 966,065 1,830,054
Accrued trade promotions 908,216 860,180
Accrued expenses 1,006,709 1,116,664
------------ ------------
Total current liabilities 3,330,614 5,163,017
Term Loan Payable 0 309,322
Deferred gain (note 6) 115,784 0
------------ ------------
TOTAL LIABILITIES 3,446,398 5,472,339
------------ ------------
COMMITMENTS
STOCKHOLDERS' EQUITY:
Common stock, $0.01 par value,
20,000,000 shares authorized,
6,450,090 shares issued at
December 31, 1996 and June 30, 1996 64,501 64,501
Special stock, $0.01 par value, 300,000
shares authorized, none outstanding 0 0
Additional paid-in capital 18,010,637 18,010,637
Accumulated deficit (8,337,656) ( 9,542,721)
Less: cost of common stock in
treasury 118,300 shares (26,026) (26,026)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 9,711,456 8,506,391
------------ ------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 13,157,854 $ 13,978,730
============ ============
The accompanying notes to financial statements
are an integral part of these balance sheets.
</TABLE>
<PAGE>
LINCOLN SNACKS COMPANY
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED DECEMBER 31, 1996 AND DECEMBER 31, 1995
<TABLE>
<CAPTION>
1996 1995
------------ ------------
(Unaudited) (Unaudited)
<S> <C> <C>
NET SALES $ 7,247,136 $ 7,858,268
COST OF SALES 4,578,677 5,501,609
------------ ------------
Gross profit 2,668,459 2,356,659
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 1,956,938 1,921,551
------------ ------------
Income from operations 711,521 435,108
INTEREST EXPENSE 42,151 105,807
------------ ------------
Income before provision
for income taxes 669,370 329,301
PROVISION FOR INCOME TAXES 10,000 13,000
------------ ------------
Net income $ 659,370 $ 316,301
============ ============
NET INCOME PER SHARE $ 0.10 $ 0.05
============ ============
Weighted Average Number of
Shares Outstanding 6,331,790 6,334,590
============ ============
The accompanying notes to financial statements
are an integral part of these statements.
</TABLE>
<PAGE>
LINCOLN SNACKS COMPANY
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1996 AND DECEMBER 31, 1995
<TABLE>
<CAPTION>
1996 1995
------------ ------------
(Unaudited) (Unaudited)
<S> <C> <C>
NET SALES $14,115,176 $14,312,880
COST OF SALES 9,261,961 9,945,327
------------ ------------
Gross profit 4,853,215 4,367,553
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 3,519,657 3,607,793
------------ ------------
Income from operations 1,333,558 759,760
INTEREST EXPENSE 108,493 212,577
------------ ------------
Income before provision
for income taxes 1,225,065 547,183
PROVISION FOR INCOME TAXES 20,000 25,000
------------ ------------
Net income $ 1,205,065 $ 522,183
============ ============
NET INCOME PER SHARE $ 0.19 $ 0.08
============ ============
Weighted Average Number of
Shares Outstanding 6,331,790 6,337,740
============ ============
The accompanying notes to financial statements
are an integral part of these statements.
</TABLE>
<PAGE>
LINCOLN SNACKS COMPANY
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED DECEMBER 31, 1996 AND DECEMBER 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
Common Special Paid In Accumulated Treasury
Stock Stock Capital Deficit Stock
------- -------- ----------- ------------ --------
<S> <C> <C> <C> <C> <C>
June 30, 1995 $64,501 $0 $17,997,746 $(10,053,530) $(24,024)
Net income 522,183
Noel payment
under tax
agreement 12,891
Purchase of
9,100 shares
of Treasury (2,002)
------- -------- ----------- ------------ --------
December 31,
1995 $64,501 $0 $18,010,637 $( 9,531,347) $(26,026)
June 30, 1996 $64,501 $0 $18,010,637 $( 9,542,721) $(26,026)
Net income 1,205,065
------- -------- ----------- ------------ --------
December 31,
1996 $64,501 $0 $18,010,637 $( 8,337,656) $(26,026)
======= ======== =========== ============ ========
The accompanying notes to financial statements
are an integral part of these statements.
</TABLE>
<PAGE>
LINCOLN SNACKS COMPANY
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1996 AND DECEMBER 31, 1995
<TABLE>
<CAPTION> 1996 1995
------------ -------------
(Unaudited) (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income $ 1,205,065 $ 522,183
Adjustments to reconcile net income
to cash provided by (used in)
operating activities:
Depreciation and amortization 429,379 420,109
Allowance for doubtful accounts and
cash discounts, net 43,151 (1,112)
Changes in Assets and Liabilities:
Decrease in accounts receivable 24,055 524,112
Decrease in inventories 215,801 63,869
Increase (decrease) in prepaid and
other current assets 19,178 (22,228)
Increase (decrease) in accounts
payable and accrued expenses (939,342) 1,293,455
------------ ------------
Net cash provided by (used in)
operating activities 997,287 2,800,388
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (93,009) (48,842)
Proceeds from sale of land 369,218 0
------------ ------------
Net cash provided by (used in)
investing activities 276,209 (48,842)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings (repayments) under
revolver, net (556,115) (941,591)
Repayments under term loan (659,702) (400,002)
Noel payment under tax agreement 0 12,891
Repurchase of treasury shares 0 (2,002)
------------ ------------
Net cash provided by (used in)
financing activities (1,215,817) (1,330,704)
------------ ------------
Net increase in cash 57,679 1,420,842
CASH, beginning of period 58,538 80,212
------------ ------------
CASH, end of period $ 116,217 $ 1,501,054
============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid $ 95,898 $ 202,077
============ ============
Income taxes paid $ 11,767 $ 3,760
============ ============
</TABLE>
<PAGE>
LINCOLN SNACKS COMPANY
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
(Unaudited)
(1) The Company:
Lincoln Snacks Company ("Lincoln" or the "Company"), formerly Lincoln
Foods Inc., is a Delaware corporation and is a majority-owned subsidiary
of Noel Group, Inc. (the "Parent"). Lincoln is engaged in the
manufacture and marketing of caramelized pre-popped popcorn and glazed
popcorn/nut mixes. Sales of the Company's products are subject to
seasonal trends with a significant portion of sales occurring in the
last four months of the calendar year.
(2) Basis of Presentation:
The balance sheet as of December 31, 1996, and the related statements of
operations for the three and six months ended December 31, 1996 and
December 31, 1995, changes in stockholders' equity and cash flows for
the three and six months ended December 31, 1996 and December 31, 1995,
have been prepared by the Company without audit. In the opinion of
management, all adjustments necessary to present fairly the financial
position, results of operations and cash flows at December 31, 1996 and
December 31, 1995 have been made. During the interim periods reported
on, the accounting policies followed are in conformity with generally
accepted accounting principles and are consistent with those applied for
annual periods and described in the Company's Annual Report on Form 10-K
for the twelve months ended June 30, 1996 filed with the Securities and
Exchange Commission on September 24, 1996 (the "Annual Report").
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been omitted. It is suggested that these
financial statements be read in conjunction with the financial
statements included in the Annual Report. The results of operations for
the three and six months ending December 31, 1996 and December 31, 1995
are not necessarily indicative of the operating results for the full
year.
(3) Credit Facility:
The Company has a revolving credit and term loan facility, as amended,
which provides for up to $5.9 million in revolver borrowings and a $1.9
million term loan (no amount was outstanding under the revolver and $.4
million was outstanding under the term loan, as of December 31, 1996).
This facility is collateralized by substantially all of the Company's
assets.
(4) Inventory:
Inventory consists of the following:
<TABLE>
<CAPTION>
December 31, June 30,
1996 1996
------------ ------------
<S> <C> <C>
Raw materials and supplies $ 980,274 $ 1,616,673
Finished goods 887,453 466,855
------------ ------------
$ 1,867,727 $ 2,083,528
============ ============
</TABLE>
(5) Significant Customer:
On June 6, 1995, the Company entered into an exclusive distribution
agreement (the "Distribution Agreement") with Planters Company, a
division of Nabisco, Inc. ("Planters"), commencing on July 17, 1995, for
the sale and distribution of Fiddle Faddle and Screaming Yellow Zonkers
(the "Products"). The Distribution Agreement requires Planters to
purchase a minimum number of equivalent cases during each year of the
initial term.
The initial term of the Distribution Agreement expires on June 30, 1997
but is automatically renewable for additional one year periods unless
terminated by either party upon prior written notice during January,
1997. The Company and Planters have agreed by letter dated January 22,
1997 that pursuant to on-going discussions between Planters and the
Company relating to the Distribution Agreement, Planters and the Company
have agreed to extend the period within which notice of non-renewal can
be given by either party to February 28, 1997. If Planters or the
Company does not renew the Distribution Agreement, the termination
thereof could have a material adverse effect on the Company's financial
condition and results of operations.
The Company's sales to Planters for the six month period ended December
31, 1996 increased over the same period in 1995 due to the increase in
the minimum number of equivalent cases required to be purchased as part
of the Distribution Agreement in fiscal 1997. Sales to Planters
represented 32% and 36% of net sales for the three months ended December
31, 1996 and 1995, respectively; 41% and 32% of net sales for the six
months period ended December 31, 1996 and 1995, respectively.
(6) Sale of Land:
In October 1996 the Company sold land adjacent to its manufacturing
facility in Lincoln, Nebraska. At the same time, the Company entered
into a ten year lease agreement for 50,000 square feet of a new
warehouse to be constructed on the land. The proceeds from the sale, of
$369,218, were used to pay down the Company's term loan. The sale
resulted in a net gain of $129,218 which has been deferred, and will be
recognized as income over the ten year lease term.
<PAGE>
LINCOLN SNACKS COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(Unaudited)
Results of Operations:
Introduction
The Company's net sales are subject to significant seasonal variation,
consequently, results from operations will fluctuate due to these trends. The
Company's business is seasonal due to customers' buying patterns of Poppycock
during the traditional holiday season. As a result, third and fourth calendar
quarter sales account for a significant portion of the Company's annual sales.
On June 6, 1995, the Company entered into an exclusive distribution
agreement ("the Distribution Agreement") with Planters Company, a division of
Nabisco, Inc. ("Planters"), commencing on July 17, 1995, for the sale and
distribution of Fiddle Faddle and Screaming Yellow Zonkers (the "Products").
The Distribution Agreement requires Planters to purchase a minimum number of
equivalent cases during each year of the initial term.
The initial term of the Distribution Agreement expires on June 30, 1997
but is automatically renewable for additional one year periods unless
terminated by either party upon prior written notice during January, 1997. The
Company and Planters have agreed by letter dated January 22, 1997 that pursuant
to on-going discussions between Planters and the Company relating to the
Distribution Agreement, Planters and the Company agreed to extend the period
within which notice of non-renewal can be given by either party to February 28,
1997. If Planters or the Company does not renew the Distribution Agreement,
the termination thereof could have a material adverse effect on the Company's
financial condition and results of operations.
The Company's sales to Planters for the six month period ended December
31, 1996 increased over the same period in 1995 due to the increase in the
minimum number of equivalent cases required to be purchased as part of the
Distribution Agreement in fiscal 1997. Sales to Planters for the six months
period ended December 31, 1996 and 1995 represented 46% and 48%, respectively,
of the minimum number of equivalent cases required to be purchased annually as
part of the Distribution Agreement.
Three months ended December 31, 1996 versus December 31, 1995
Net sales decreased 8% or $.61 million to $7.25 million for the quarter
ended December 31, 1996 versus $7.86 million in the corresponding period of
1995. The decrease in net sales is primarily due to decreased Nut Division
sales. Sales to Planters decreased and were offset by increases in Lincoln's
other branded product and other sales. Sales to Planters represented 32% and
36% of net sales for the quarter ended December 31, 1996 and 1995,
respectively.
Gross profit increased $.31 million to $2.67 million for the quarter
ended December 31, 1996 versus $2.36 million in the corresponding period of
1995. The increase in gross profit is the result of decreased raw material
costs and increased manufacturing efficiencies.
Selling, general and administrative expenses of $1.96 million for the
quarter ended December 31, 1996 remained essentially equal to the same period
in 1995 of $1.92 million.
The increase in gross profit and the decrease in interest expense,
resulted in an increase in the net income of $.34 million to $.66 million for
the quarter ended December 31, 1996 versus $.32 million in the corresponding
period in 1995.
Six months ended December 31, 1996 versus December 31, 1995
Net sales remained essentially equal to a year ago of $14.12 million for
the six months ended December 31, 1996 versus $14.31 million in the
corresponding period of 1995. Sales to Planters and of Lincoln's other branded
product increased for the six months period ended December 31, 1996 versus the
same period in 1995. Such increases were offset by declines in Nut Division
sales. Sales to Planters represented 41% and 32% of net sales for the six
months ended December 31, 1996 and 1995, respectively.
Gross profit increased $.48 million to $4.85 million for the six months
ended December 31, 1996 versus $4.37 million in the corresponding period of
1995. The gross profit increase is the result of increased sales to Planters
and of Lincoln's other branded product, increased manufacturing efficiencies
and lower raw material costs.
Selling, general and administrative expenses of $3.52 million for the six
months ended December 31, 1996 remained essentially equal to the same period
in 1995 of $3.61 million.
The increase in gross profit and the decrease in interest expense,
resulted in an increase in the net income of $.68 million to $1.21 million for
the six months ended December 31, 1996 versus $.52 million in the corresponding
period in 1995.
Liquidity and Capital Resources
As of December 31, 1996, the Company had working capital of $1.34 million
compared to a working capital deficit of $.24 million at June 30, 1996 (the
Company's fiscal year end), an increase in working capital of $1.58 million.
The increase in working capital is primarily attributable to the Company's net
profit of $1.21 million for the six months ended December 31, 1996.
The Company currently meets its short-term liquidity needs from its
revolving credit facility which facility is secured by a first priority,
perfected security interest in substantially all of the Company's existing and
after-acquired assets. The Company presently believes that this facility is
adequate to meet its needs for the next twelve months.
Management continues to focus on increasing product distribution and
continues to review all operating costs with the objective of increasing
profitability and ensuring future liquidity. However, there can be no
assurance that any of these objectives will be achieved. The execution of the
Distribution Agreement is intended to be consistent with management's
objectives.
The Company's short term liquidity is affected by seasonal increases in
inventory and accounts receivable levels, payment terms in excess of 60 days
granted in some situations during certain months of the year, and seasonality
of sales. Inventory and accounts receivable levels increase substantially
during the latter part of the third calendar quarter and during the remainder
of the calendar year.
The following chart represents the net funds provided by or used in
operating, financing and investment activities for each period as indicated.
<TABLE>
<CAPTION>
Six Months Ended
----------------------------
December 31, December 31,
1996 1995
------------ ------------
(in thousands)
<S> <C> <C>
Net cash provided by operating
activities $ 997 $2,800
Net cash provided by (used in)
investing activities 276 (49)
Net cash used in financing activities (1,216) (1,331)
</TABLE>
Net cash provided by operating activities decreased to $1.0 million
during the six months ended December 31, 1996 compared to $2.8 million in 1995.
The decrease is primarily due to a lower accounts payable balance at December
31, 1996 versus 1995 resulting from lower inventory balances and the timing of
expenditures. The decrease is partially offset by the increase in net income
of $.66 million for the six months ended December 31, 1996 versus 1995.
Net cash provided by investing activities of $.28 million during the six
months ended December 31, 1996 compared to use in cash of $.05 million for the
six months ended December 31, 1995, represents proceeds from the sale of land
and is offset by capital expenditures. Net cash used by investing activities
of $.05 represents capital expenditures.
Net cash used in financing activities was $1.2 million for the six months
ended December 31, 1996, which consisted of repayments of revolver borrowings
under the Company's credit agreement of $.56 million and term loan repayments
of $.66 million. The proceeds of $.36 million from the sale of land were used
to pay down the term loan and revolver. Net cash used by financing activities
for the period ended December 31, 1995 was $1.33 million, which primarily
consisted of revolver borrowings under the Company's credit agreement of $.94
million and by term loan repayments of $.40 million.
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings Not Applicable
Item 2. Changes in Securities Not Applicable
Item 3. Defaults Upon Senior Securities Not Applicable
Item 4. Submission of Matters
to a Vote of Security Holders
The Annual Meeting of the Shareholders of the Registrant was held
on November 12, 1996, pursuant to notice, at which meeting the
following persons were elected directors of the Registrant to
serve for a term of one year, expiring in 1997, and who received
the number of votes indicated opposite their names:
<TABLE>
<CAPTION>
NAME: NUMBER OF VOTES FOR: NUMBER OF VOTES WITHHELD:
----------------- -------------------- -------------------------
<S> <C> <C>
Karen Brenner 5,858,891 550
C. Larry Davis 5,858,891 550
Alexander P. Lynch 5,858,891 550
James G. Niven 5,858,891 550
</TABLE>
Item 5. Other Information Not Applicable
Item 6. Exhibits and Reports on Form 8-K
a Exhibits
(2) Not Applicable
(3) Articles of Incorporation and By-Laws
(a) Certificate of Incorporation, as amended and as
currently in effect (Incorporated by reference
to Exhibit 3(A), filed by the Company with the
Registration Statement on Form S-1 (33-71432)).
(b) By-Laws as currently in effect (Incorporated by
reference to Exhibit 3(B) filed by the Company
with the Registration Statement on Form S-1 (33-71432)).
(4) Not Applicable
(10) (a) Letter dated January 22, 1997 between Lincoln
Snacks Company and Planters relating to
extension of period for notification of non-renewal.
(b) Agreement for Sale and Purchase of Real Estate
dated October 10, 1996 between Lincoln Snacks
Company and Donald W. Linscott.
(11) Statement regarding computation of per share earnings
is not required because the relevant computation can
be determined from the material contained in the
Financial Statements included herein.
(15) Not Applicable
(18) Not Applicable
(19) Not Applicable
(22) Not Applicable
(23) Not Applicable
(24) Not Applicable
(27) Financial Data Schedule
(99) Not Applicable
b Reports on Form 8-K Not Applicable
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
February 6, 1997 Lincoln Snacks Company
(Registrant)
By: /s/Karen Brenner
Name: Karen Brenner
Title: Chairman of the Board and
Chief Executive Officer; Director
(Principal Executive Officer)
By: /s/Kristine A. Crabs
Name: Kristine A. Crabs
Title: Vice President and Chief Financial
Officer, Secretary and Treasurer
(Principal Financial Officer and
Principal Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> DEC-31-1996
<CASH> 116,217
<SECURITIES> 0
<RECEIVABLES> 2,843,344
<ALLOWANCES> 216,675
<INVENTORY> 1,867,727
<CURRENT-ASSETS> 4,674,892
<PP&E> 7,237,332
<DEPRECIATION> 2,299,938
<TOTAL-ASSETS> 13,157,854
<CURRENT-LIABILITIES> 3,330,614
<BONDS> 0
0
0
<COMMON> 64,501
<OTHER-SE> 9,646,955
<TOTAL-LIABILITY-AND-EQUITY> 13,157,854
<SALES> 14,115,176
<TOTAL-REVENUES> 14,115,176
<CGS> 9,261,961
<TOTAL-COSTS> 9,261,961
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 37,000
<INTEREST-EXPENSE> 108,493
<INCOME-PRETAX> 1,225,065
<INCOME-TAX> 20,000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,205,065
<EPS-PRIMARY> .19
<EPS-DILUTED> 0
</TABLE>
EXHIBIT 10(a)
LINCOLN SNACKS COMPANY
4 HIGH RIDGE PARK
STAMFORD, CT 06905
January 22, 1997
Planters Company,
a Unit of Nabisco, Inc.
1100 Reynolds Boulevard
Winston-Salem, NC 27107
Re: Exclusive Distribution Agreement
between Lincoln Snacks Company and
Planters Company, a Unit of Nabisco, Inc.
Ladies and Gentlemen:
Reference is made to the Exclusive Distribution Agreement dated June
6, 1995 (the "Distribution Agreement") between Lincoln Snacks Company
("Lincoln") and Planters Company, a unit of Nabisco, Inc. ("Planters"), as
amended.
Section 2.1 of the Distribution Agreement provides, among other
things, that, unless either party gives written notice to the other during
January of 1997, that it does not desire to renew the Distribution Agreement
for the following year, the Distribution Agreement shall be automatically
renewed for an additional year beginning on July 1, 1997.
Pursuant to on-going discussions between Planters and Lincoln
concerning the renewal of the initial term of the Distribution Agreement,
Planters and Lincoln hereby agree to extend the period within which notice
of non-renewal can be given by either party to February 28, 1997.
Sincerely,
LINCOLN SNACKS COMPANY
/s/ Karen Brenner
By: Karen Brenner
Chairman and
Chief Executive Officer
Accepted and Agreed to:
PLANTERS COMPANY
(a unit of Nabisco, Inc.)
/s/ Joseph A. Bybel
By: Joseph A. Bybel
Senior Product Manager
EXHIBIT 10(b)
AGREEMENT FOR SALE AND
PURCHASE OF REAL ESTATE
This Agreement is made and entered into this 10th day of October, 1996
by and between LINCOLN SNACKS COMPANY, a Delaware corporation, ("Seller")
and DONALD W. LINSCOTT ("Buyer").
In consideration of the mutual covenants contained herein, the parties
agree as follows:
1. Property. Seller hereby agree to sell and convey to Buyer and
Buyer hereby agrees to purchase from Seller upon the terms and conditions
set forth in this Agreement, the following described real estate in
Lancaster County, Nebraska:
Lots 1 and 2, Block 3, Lincoln Industrial Park South, Lincoln,
Lancaster County, Nebraska ("Property").
2. Purchase Price. Buyer agrees to pay Seller the total sum of
Three Hundred Seventy Five Thousand Dollars ($375,000), payable in full in
collected funds at Closing, as defined below.
3. Conditions Precedent for Buyer. Buyer's obligation to purchase
the Property and to pay the Purchase Price are subject to the following
conditions precedent having been satisfied at or prior to the Closing:
(a) Buyer's receipt of commitments for an owners and lenders
A.L.T.A. policy of title insurance issued by State Title Services,
Inc., Lincoln, Nebraska ("Title Company") as agent, pursuant to which
Title Company agrees to insure good and marketable fee simple title to
the Property, free and clear of all liens and encumbrances but subject
to easements and restrictions of record which will not materially
adversely effect Buyer's intended use of the Property to lease to
Seller, in Buyer's sole judgment, and subject to the general
exceptions to the title policy. The title policy shall be in the name
of Buyer for the full amount of the Purchase Price (or of the loan, as
appropriate) upon delivery of a special warranty deed to Buyer from
Seller (with the warranty limited to claims of persons holding by,
through, or under Seller). The cost of the owner's title insurance
premium shall be divided equally between the parties. The cost for
the lender's title insurance premium and any endorsements shall be
paid by Buyer.
(b) Buyer and Seller shall have entered into a Lease for the
Property substantially in the form attached hereto as Exhibit 1.
(c) Buyer shall have exercised its option to purchase, and
shall have closed on the purchase of, Lot 3, Block 3, Lincoln
Industrial Park South, Lincoln, Nebraska.
(d) Buyer shall have obtained a financing commitment for 80% of
the Purchase Price on commercially reasonable terms.
4. Taxes. Seller shall pay 1995 and all prior years taxes and all
special assessments levied against the Property to the date of Closing.
Taxes for 1996 shall be prorated to date of Closing.
5. Closing. Closing shall be held on October 10, 1996, at the
offices of Title Company, 1023 Lincoln Mall, Lincoln, Nebraska 68508, or at
such other time and place as the parties may mutually agree in writing
("Closing"). At closing, adjustments shall be made as necessary for unpaid
taxes, balances due upon any special assessments, title insurance premiums,
the closing agent's fee as described in this Agreement, filing fees (payable
by Buyer), documentary stamps (payable by Seller), and other appropriate
adjustments. The parties agree to close the transaction through Title
Company, and the parties shall each pay 1/2 of the closing agent's fee.
6. Possession and Risk of Loss. Possession of the Property shall
be delivered at Closing. Until Closing, Seller shall bear all risk of loss
to the Property.
7. Seller Warranties. In addition to the representations and
warranties contained elsewhere in this Agreement, Seller hereby represents
and warrants to Buyer, as of the date of this Agreement and as of the
Closing:
(a) The Seller has not granted any right of first refusal or
option to acquire fee title or any title interest to the Property or any
portion thereof or interest therein.
(b) Seller has the lawful right, power, authority and capacity
to consummate the transaction contemplated by this Agreement. The execution
and delivery of this Agreement and Closing does not violate any contract,
agreement, or any instrument to which Seller is a party, any judicial order
or judgement of any nature by which Seller is bound.
(c) The Property is not the subject of a listing agreement and
there are no brokerage or other real estate commissions due and owing as a
result of this Agreement.
The representations and warranties contained in this section shall
survive the Closing and remain in full force and effect.
8. Removal of Rail Trackage. Seller, at Seller's expense, shall
remove all rail trackage presently located at the far east side of the
Property. This shall be accomplished on or before October 30, 1996.
9. Assignment. Buyer may assign this Agreement to an entity in
which Buyer is a principal, partner, member, shareholder or otherwise the
holder of an ownership interest; provided that such assignment shall not
relieve Buyer from his liabilities and obligations hereunder.
10. Disclosure. Seller is hereby notified that the Buyer herein
holds a Nebraska Real Estate license.
11. Environmental Matters. Seller has no actual knowledge that the
Property is not in compliance with applicable environmental laws. Seller
hereby agrees to indemnify and hold Buyer harmless from and against all
claims, damages, liabilities, actions, causes of action and the like to
which Buyer may be subjected to as a result of any environmental condition
existing at the Property as of the Closing. Likewise, Buyer hereby agrees
to indemnify and hold Seller harmless from and against all claims, damages,
liabilities, actions, causes of action and the like to which Seller may be
subjected to as a result of any environmental condition which is created or
exacerbated at the Property after the Closing by any person other than
Seller. These indemnification and hold harmless agreements shall survive
the Closing.
12. Binding Effect. This Agreement shall bind and inure to the
benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns.
13. Nebraska Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Nebraska.
14. Personal Inspection. This Agreement is based upon Buyer's
personal inspection of the Property, and Seller makes no representations or
warranties whatsoever with respect to the Property other than as set forth
in paragraph 7 above and in the Special Warranty Deed to be delivered at
Closing. Except for said representations and warranties, Buyer is taking
the Property "as is."
15. Default. In the event of a default or breach hereunder by
either party, the other party may pursue such legal and equitable remedies
as may be available to the non-breaching party, including but not limited to
actions for specific performance and/or money damages.
In witness whereof, the parties have executed this Agreement as of the
dates set forth below.
SELLER:
LINCOLN SNACKS COMPANY, a Delaware corporation
By: /s/ Richard S. Kirk, Jr.
Its Executive Vice President and
Chief Operating Officer
and By: /s/ Kristine A. Crabs
Its Chief Financial Officer
BUYER:
DONALD W. LINSCOTT
/s/ Donald W. Linscott
Donald W. Linscott
<PAGE>
STATE OF NEBRASKA )
) ss
COUNTY OF LANCASTER )
The foregoing instrument was acknowledged before me this 10th day of
October, 1996 by Richard S. Kirk, Jr., the Executive Vice President and
Chief Operating Officer of LINCOLN SNACKS COMPANY, a Delaware corporation,
on behalf of the corporation.
/s/ Jolanda J. Junge
Notary Public
My Commission Expires: 8/11/98
STATE OF NEBRASKA )
) ss
COUNTY OF LANCASTER )
The foregoing instrument was acknowledged before me this 10th day of
October, 1996 by Kristine A. Crabs, the Chief Financial Officer of LINCOLN
SNACKS COMPANY, a Delaware corporation, on behalf of the corporation.
/s/ Jolanda J. Junge
Notary Public
My Commission Expires: 8/11/98
STATE OF NEBRASKA )
) ss
COUNTY OF LANCASTER )
The foregoing instrument was acknowledged before me this 10th day
of October, 1996 by Donald W. Linscott.
/s/ Jolanda J. Junge
Notary Public
My Commission Expires: 8/11/98
<PAGE>
LEASE
THIS LEASE made and entered into this 10th day of October, 1996, by and
between DONALD W. LINSCOTT, hereinafter called "Lessor", and LINCOLN SNACKS
COMPANY, a Delaware corporation, hereinafter called "Lessee".
TERMS
1. PREMISES LEASED: Subject to the terms and conditions herein
contained, the Lessor hereby leases to the Lessee and Lessee hereby leases
from Lessor the following described property:
50,000 square feet of space in the to-be-constructed commercial
building comprising an estimated 87,040 square feet ("Building"), plus
the surrounding area as all shown on the site plan attached hereto as
Exhibit A (said 50,000 square feet and said surrounding area are
hereinafter sometimes collectively referred to as, the "Premises") to
be located upon Lots 1 and 2, Block 3, Lincoln Industrial Park South,
Lincoln, Lancaster County, Nebraska ("Property"). A map of Lincoln
Industrial Park South is attached hereto as Exhibit B.
2. CONSTRUCTION OF COMMERCIAL BUILDING: Lessor agrees to cause to be
constructed on the Property certain improvements including a commercial
building to be used as a warehousing and distribution facility
("Improvements"). The Improvements shall include: (i) an above ground
tunnel connecting the Building to the adjacent building to the north located
on Lot 8, Block 5, Lincoln Industrial Park, which is owned by Lessee
("Lessee's Adjacent Property"); (ii) 24' clear structure height; (iii) three
dock doors; and (iv) heating and air conditioning. The Improvements shall
be constructed pursuant to certain plans ("Plans"), copies of which are
attached hereto as Exhibit C, and general specifications ("Specs") attached
hereto as Exhibit D, which Plans and Specs have been agreed to by both
parties. No modifications shall be made to the Plans and Specs except by
written change order pursuant to paragraph 28 of this Lease. Lessor agrees to
complete the Building in full compliance with the Plans and Specs so that it
is ready for occupancy by Lessee on or before June 1, 1997.
3. TERM: The term of this lease shall be ten (10) years from the
later of June 1, 1997, or the first day of the month when the Building is
completed in full compliance with the Plans and Specs and ready for
occupancy by Lessee (the "Commencement Date"), unless sooner terminated as
hereinafter provided, and subject to extension per the renewal options
herein below. As used herein, the word "term" means the original ten (10)
year term and all extended term(s) per exercise of the renewal options.
Both the term and rent payments under this Lease shall start on the
Commencement Date. In the event Lessee shall take possession of the
Premises on a day other than the first day of the month, then rent shall be
immediately paid for such fractional month prorated on the basis of a thirty
(30) day month. The ten-year term of the Lease shall be computed from the
Commencement Date.
4. RENTAL:
4.1 Base Rental: For the term of this Lease, Lessee shall pay to
Lessor basic rent in the aggregate amount of $2,525,000, payable in
monthly installments as set forth below, in advance on the first day
of each month throughout the term of this Lease.
<TABLE>
<CAPTION>
Building Portion Building Portion Monthly Rent
Lease Years Total Sq.Ft. Rent/Sq.Ft. for entire Premises
------------- ---------------- ---------------- -------------------
<S> <C> <C> <C>
1 through 5 50,000 $4.80 $20,000.00
6 through 10 50,000 $5.30 $22,083.33
</TABLE>
If the monthly rental as established herein is not received by Lessor
on or before the 15th day of each calendar month, Lessee agrees to pay
the Lessor a late charge of five percent (5%), or such amount as
applicable law may allow, on each monthly rental received after the
15th day of the month.
4.2 Adjustments to Rent: In the event the Building is not completed
in full compliance with the Plans and Specs or is not ready for
occupancy by June 1, 1997, then Lessor shall provide Lessee with a
rental credit of $20,000.00 for each full or partial month from and
including June, 1997, during which such situation exists.
Additionally, irrespective of the Commencement Date, Lessor agrees
that Lessee shall receive a further rental credit in the amount of 50%
of the payments Lessee makes to Campbell Properties with respect to
its lease of property at 1901 Pioneers Boulevard, Lincoln, Nebraska,
from and including July, 1997, until the termination of such lease
with Campbell Properties.
5. REPAIR AND MAINTENANCE:
5.1 Maintenance and Repairs by Lessor: Lessor, at its sole cost and
expense and subject to the provisions of Section 5.2, shall perform
during the term of this Lease all necessary replacements, maintenance,
and repairs with respect to all of the following portions of the
Premises:
(A) The structure and exterior of Lessor's building including,
without limitation, the roof and roof membrane, walls, floors,
foundations, supports, roof vents, drains and downspouts;
(B) The substructure, all periodic repaving and any patching
and pothole maintenance of the yard, parking, drive and other
hard-surfaced areas of the Premises, together with curbs and
walkways; and
(C) The mechanical and utility systems serving the Premises,
including without limitation, heating, ventilating, air
conditioning, lighting, electrical, plumbing, gas, water supply,
sanitary sewers and septic systems, storm sewers and storm water
drainage systems, and sprinkler systems (sometimes collectively
referred to herein as the "Mechanical and Utility Systems"),
windows, doors, and overhead doors. To the extent that the
costs of replacing, maintaining, and/or repairing the same shall
exceed One Thousand Dollars ($1,000) for any item or event or
the aggregate costs of replacing, repairing and/or maintaining
said items shall exceed Five Thousand Dollars ($5,000) for any
twelve (12) month period of the term of this Lease, the Lessee
shall be responsible for all such costs up to and including such
threshold amounts and shall undertake such repairs when such
costs are estimated to not exceed such threshold limits and
Lessor shall undertake such maintenance and repairs in all other
situations, and the parties shall bill and reimburse each other
on the basis of such thresholds and undertakings and actual
costs. If Lessor fails to perform its maintenance, replacement,
and/or repair obligations within fifteen (15) days after
Lessor's receipt from Lessee of notice of the need therefor,
then Lessee shall have the right upon three (3) business days
notice to Lessor to perform all or part of such maintenance and
repairs at the sole cost and expense of Lessor, and Lessor shall
reimburse Lessee for such reasonable cost and expenses within
thirty (30) days after Lessee's delivery to Lessor of an invoice
therefor.
5.2 Maintenance and Repairs by Lessee: Lessee, at its sole costs
and expense, during the term of this Lease shall keep the Premises in
a clean and orderly condition, shall mow the landscaped areas of the
Premises and remove snow, as necessary, from the parking, yard and
drive areas of the Premises, shall perform all maintenance and repair
to the Premises occasioned by Lessee's negligence or misconduct, and
shall perform those maintenance and repairs and bear those threshold
costs with respect to those items set forth in Section 5.1(C). If
Lessee fails to perform its maintenance and repair obligations within
fifteen (15) days after Lessor's delivery to Lessee of notice of the
need therefor, then Lessor shall have the right upon three (3)
business days notice to Lessee to perform all or part of such
maintenance and repairs at the sole cost and expense of Lessee, and
Lessee shall reimburse Lessor for such cost and expenses within thirty
(30) days after Lessor's delivery to Lessee of an invoice therefor.
6. ADDITIONAL RENT: Lessee hereby covenants and agrees to pay the
basic rent hereby reserved as and when due, and also all sums of money,
charges and other amounts required to be paid by Lessee, either to Lessor or
to another person, under this lease which charges or amounts shall be
considered "rent" in addition to the rent provided for herein.
7. UTILITIES: Except as shown on the Plans and Specs, Lessor shall
not be required to furnish to the Lessee any utility connections or services
of any kind. The Lessee shall pay all charges for all utilities, including
gas, electricity, light, heat, power, water, sewer, cable and telephone,
used or supplied upon or in connection with the Premises and shall indemnify
the Lessor against any liability on account thereof.
8. EASEMENTS: The parties acknowledge and agree that the Premises
will be subject to the attached easements and all existing easements of
record, and no other easements.
9. CONDITION OF PREMISES: Provided Lessor and Lessee then agree on
the condition of the Premises and effect of acceptance, Lessee and Lessor
shall enter into an Addendum to this Lease, in the form attached hereto,
concerning condition of and Lessee's acceptance of the Premises upon
Lessee's taking possession of the Premises upon completion of construction
and at the Commencement Date.
10. RESTRICTIONS ON ASSIGNMENT, SUBLETTING:
10.1 By Lessee. Lessee agrees not to assign or in any manner
transfer this Lease or any estate or interest therein without the
previous written consent of Lessor which consent shall not be
unreasonably withheld or delayed; and, not to sublet the Premises or
any part or parts thereof or allow anyone to come in with, through or
under Lessee without like consent. Consent by the Lessor to one
assignment of this Lease or to one subletting or to any other
occupancy of said Premises shall not operate to exhaust the Lessor's
right hereunder.
10.2 By Lessor. Lessor intends to assign this Lease to South
Industrial Park LLC, a Nebraska limited liability company having as
members Pine Lake Partners, L.L.C., Lin-Keo Investment Co., L.L.C.,
Sam Sampson, and Boyd Batterman. Notwithstanding such assignment,
Donald W. Linscott as the original Lessor shall remain responsible for
his liabilities and obligations which arise hereunder during the
period of one year after the Commencement Date. Thereafter, this
Lease shall be freely assignable by Lessor to the purchaser in a sale
of the Property in an arms length transaction where the purchaser
assumes in writing the Landlord's obligations hereunder for the
benefit of Tenant, and the effect of any such assignment shall be to
release the assignor from liabilities and obligations arising
hereunder from and after the date of such assignment.
11. RESTRICTIONS ON USE: The Lessee shall use and occupy the Premises
for a warehousing and distribution facility related purposes, and for and no
other purpose. Lessor represents and warrants that upon completion of the
Building in accordance with the Plans and Specs Lessee's use of the Premises
as a warehousing and distribution facility for its business will not violate
or conflict with any existing zoning laws, covenants, parking requirements,
or other governmental restrictions with respect to the Premises, as
completed. The Lessee shall not use the Premises nor permit them to be used
for any unlawful business or purpose whatsoever. Lessee shall not keep or
store in or about the Premises anything which will increase the rate of
insurance on the Building, nor permit any change in occupancy or any
transfer of this Lease by operation of law or otherwise, nor make any
alterations, additions or improvements, without the written consent of the
Lessor first obtained. Lessee will not invalidate any policies of insurance
now or hereafter in force with respect to said Building and will pay all
extra insurance premiums if any, required on account of extra risk caused by
the Lessee's use of the Premises. Lessor is aware of the nature of Lessee's
business and contemplated use of the Premises and the insurance has been
calculated accordingly, and the business and contemplated use will not
result in any extra insurance premiums to be paid by Lessee. Any
construction, remodeling, additions, improvements or fixtures, except
movable office furniture and trade fixtures, shall be made or installed by
the Lessee upon the Premises only after the Lessor has given written consent
hereto which shall not be unreasonably withheld or delayed, and may be
removed by Lessee upon termination of this Lease provided Lessee can remove
the same without damaging the Premises or, if damage results, Lessee repairs
such damage at its sole cost. Lessee agrees to pay promptly for any work
done or material furnished in or about the Premises and not to suffer or
permit any lien to attach to the Premises and Lessee further agrees to cause
any such lien or any claims therefor to be released promptly; provided,
however, that in the event Lessee contests any such claim, Lessee may
withhold payment and allow a lien to attach provided Lessee agrees to
indemnify and secure Lessor to Lessor's satisfaction. Notice is hereby
given that no construction or other liens sought to be taken or attached to
the Premises or the Building of which the Premises is a part shall in any
manner affect the right, title or interest of the Lessor therein, and that
Lessee shall have no authority from Lessor to permit or create any such
lien. No items of any kind shall be stored or left for any period of time
outside of the confines of the Premises without the prior written consent of
Lessor. Lessee shall maintain a constant temperature of no less than 35
degrees Fahrenheit in the Premises.
Hazardous Substances: The term "Hazardous Substances" as used in this
Lease, shall mean pollutants, containments, toxic or hazardous wastes or any
other substances, the removal of which is required or the use of which is
restricted, prohibited or penalized by any "Environmental Law", which term
shall mean any federal, state or local law or ordinance relating to
pollution or the protection of the environment. Lessee hereby agrees that
(i) no activity will be conducted on the Premises that will produce any
Hazardous Substance, except for such activities that are part of the
ordinary course of Lessee's business ( the "Permitted Activities"), provided
said Permitted Activities are conducted in accordance with all Environmental
Laws; (ii) the Premises will not be used in any manner for the storage of
any Hazardous Substances, except for the storage of such materials that are
used in the ordinary course of Lessee's business (the "Permitted
Materials"), provided such Permitted Materials are properly stored in a
manner and location meeting all Environmental Laws and (iii) Lessee will not
permit any Hazardous Substances to be brought onto the Premises, except for
Permitted Materials, and if so brought, the same be immediately removed,
with proper disposal, and all required cleanup procedures shall be
diligently undertaken pursuant to all Environmental Laws. If, at any time
during or after the term of this Lease, the Premises is found to have been
so contaminated by Lessee or subjected to any of said conditions created by
Lessee, then Lessee shall indemnify, defend, and hold Lessor harmless from
all claims, demands, actions, liabilities, costs, expenses, damages and
obligations of any nature, including reasonable attorneys' fees, arising
from or as a result of such conditions or use of the Premises by Lessee. If
at any time during or after the term of this Lease the Premises is found to
have been contaminated by the acts and/or omissions of Lessor, Lessor's
agents, Lessor's other tenants, and/or any third party, or if any existing
environmental condition is worsened through the acts and/or omissions of
Lessor, Lessor's Agents, Lessor's other tenants, and/or any third party,
then and in any such event Lessor shall indemnify, defend, and hold Lessee
harmless from all claims, demands, actions, liabilities, costs, expenses,
damages and obligations of any nature, including reasonable attorneys' fees,
arising from or as a result of such contamination and/or environmental
condition. The foregoing indemnifications and warranties shall survive the
termination or expiration of this Lease.
12. COMPLIANCE WITH LAW: After its initial occupancy of the Premises,
the Lessee shall accomplish any remodeling with respect to the Premises
(including any plans relating thereto), and shall operate its business in a
manner which shall be in compliance with all applicable laws, ordinances,
rules and regulations of the city, county, state and federal government and
any department thereof, will not permit the Premises to be used for any
unlawful purpose, and will protect the Lessor and save Lessor and the
Premises harmless from any and all fines and penalties that may result from
or be due to any breach by Lessee of the foregoing which result in any
infractions of or non-compliance with such laws, ordinances, rules and
regulations. Lessor represents and warrants to Lessee that upon the
Commencement Date the Building and the Premises shall be in compliance with
all applicable laws, ordinances, rules and regulations of the city, county,
state and federal government and any department thereof and the Building and
the Premises may be used by Lessee for the purposes stated in paragraph 11
above, and Lessor hereby agrees to protect the Lessee and save Lessee
harmless from any and all fines and penalties that may result from or be due
to any breach by Lessor of the foregoing which result in any infractions of
or non-compliance with such laws, ordinances, rules and regulations.
13. TERMINATION PRIVILEGES UPON DAMAGE BY FIRE OR OTHER CASUALTY: In
case the Premises, or any part thereof, shall at any time be destroyed or
damaged by fire or other casualty, without the fault of the Lessee, so that
the same shall be unfit for use or occupancy, then the rent hereby reserved,
or a fair and just proportion thereof, according to the nature and extent of
the damage sustained in loss of use or occupancy, shall be suspended, cease
to be payable and so continue until the Premises shall be rebuilt or made
fit for use and occupancy. If such damage to the Premises or to the building
in which the Premises are situated is to the extent of fifty percent (50%)
or more, or, if in the judgment of either the Lessor or Lessee, the Premises
have been damaged to the extent that they can no longer be utilized as an
integrated whole, then this Lease may be terminated at the election of
either the Lessor or the Lessee, notice of which election, if exercised,
shall be given to the other party in writing within forty-five (45) days
from the date of casualty. In the event that the building on the Premises
is totally destroyed or work to put the Premises in tenantable condition is
not commenced within forty-five (45) days from the time of such damage and
continued thereafter, with reasonable diligence, all things being
considered, then this Lease may be terminated at the election of the Lessee,
notice of which election, if exercised, must be given in writing within
ninety (90) days from the date of casualty or at any time thereafter during
the period of repair if the work to put the Premises in tenantable condition
is not being pursued with reasonable diligence.
14. INSURANCE:
14.1 Lessor shall maintain, at Lessee's expense, at all times during
the term of this Lease, fire and extended coverage insurance on the
Building and improvements on the Premises in an amount adequate to
cover the cost of replacement, as determined from time to time by
Lessor and Lessee, in the event of loss. Lessee shall pay such
insurance premium within ten (10) days after demand therefor by
Lessor. A copy of an invoice from the insurance company shall be
sufficient evidence of the amount of any such premium.
14.2 During the term of this lease, the Lessee shall, at its own
expense and with a company satisfactory to Lessor, provide and
maintain in full force and effect an insurance policy or policies
protecting the Lessor and Lessee and their officers and employees
against any loss, liability or expense from personal injury, death,
property damage or otherwise arising or occurring upon or in
connection with the Premises or by reason of the Lessee's operations
upon or occupancy of the Premises, whether the same occurs or the
cause arises on or off the Premises. The Lessor shall be an
additional insured under such policy or policies. Such insurance
shall be written by responsible insurance companies satisfactory to
the Lessor and shall be in an amount not less than $500,000 for
injuries to any one person, not less than $1,000,000 for injuries to
more than one person arising out of any one accident or occurrence,
and not less than $100,000 for damage to property. Certificates of
insurance showing compliance with the foregoing requirements shall be
furnished by the Lessee to the Lessor upon Lessor's request. Such
certificates shall state that policies will not be canceled nor
altered without at least ten (10) days prior written notice to the
Lessor.
15. DENIAL OF SUBROGATION RIGHTS: Neither the Lessor nor the Lessee
shall be liable to the other for any business interruption or any loss or
damage to property or injury to or death of persons occurring on the
Premises or the adjoining property, or in any manner growing out of or
connected with the Lessee's use and occupancy of the Premises, or the
condition thereof, or of the adjoining property, whether or not caused by
the negligence or other fault of the Lessor or the Lessee or of their
respective agents, employees, subtenants licensees or assignees; provided,
however that this release shall apply only to the extent that such business
interruption, loss or damage to property or injury to or death of persons is
covered by insurance, regardless of whether such insurance is payable to or
protects the Lessor or the Lessee or both. Nothing in this paragraph shall
be construed to impose any other or greater liability upon either the Lessor
or the Lessee than would have existed in the absence of this paragraph.
16. CONDEMNATION OF PREMISES: In the event that the whole of the
Premises shall be condemned or taken in any manner for any public or any
quasi-public use, this lease shall terminate as of the date of vesting of
title. In the event that a portion of the Premises is condemned or taken by
eminent domain proceedings so as to render the Premises substantially
unusable, then in such event, Lessee shall have the right to cancel and
terminate this agreement as of the date of such taking upon giving to Lessor
notice in writing of such election within thirty (30) days after the receipt
by Lessee from Lessor of written notice of such appropriation or taking. In
the event that only a part of the Premises shall be so condemned or taken
and such taking shall not render the Premises substantially unusable, then,
effective as of the date of vesting of title, the rent hereunder for such
part shall be equitably abated and this lease shall continue as to such part
not so taken. In the event that only a part of the Building shall be so
condemned or taken, then if substantial structural alteration or
reconstruction of the Building shall, in the reasonable opinion of Lessor be
necessary or appropriate as a result of such condemnation or taking, Lessor
may, at its option, terminate this lease and the term herein granted as of
the date of such vesting of title by notifying Lessee in writing within
sixty (60) days following the vesting of title. Any termination hereunder
shall be without prejudice to the rights of either the Lessor or the Lessee
to recover compensation from such public authority for any loss or damages
caused by such taking. Neither Lessor nor Lessee shall have any right in or
to any award made to the other by such public authority; provided, however,
to the extent that Lessee is not allowed by local law to make a recovery
against such public authority, Lessor shall receive such condemnation award
and Lessee hereby expressly assigns to Lessor any and all right, title and
interest in and to such award.
17. PAYMENT OF TAXES: During the term of this Lease and any
extension or renewal thereof, the Lessee shall pay, prior to delinquency,
directly to the taxing authority, as additional rent hereunder, all real
estate taxes and special assessments becoming due and payable during each
year with respect to the Premises. Upon receipt of a tax statement from the
taxing authority, Lessor shall forward such payment to Lessee for payment.
Lessee shall provide Lessor proof of payment of all such taxes and
assessments, prior to dates on which such payments would otherwise become
delinquent. If this Lease or any extension or renewal thereof shall
terminate on a date other than the last day of the calendar year, then such
tax payment shall be prorated for that portion of the calendar year which
shall have elapsed up to and including such termination date.
18. DEFAULT, BANKRUPTCY, ETC: Should a petition in bankruptcy be
filed by the Lessee, whether for reorganization, rehabilitation or
otherwise, or should the Lessee be adjudged bankrupt or insolvent by any
court, or should a trustee or receiver in bankruptcy or a receiver of any
property of the Lessee be appointed in any suit or proceeding by or against
the Lessee, this Lease shall automatically terminate unless the Lessor shall
waive such termination provision in writing delivered to the Lessee within
thirty days after the date when Lessor has received notice of such
occurrence. Should default be made by the Lessee in the payment of rental
herein reserved, or any part thereof or any other payments provided herein
to be made, when and as herein provided, or should Lessee make default in
performing, fulfilling, keeping or observing any of the Lessee's other
covenants, conditions, provisions or agreements herein contained, or should
the Premises become vacant or abandoned, or should this Lease by operation
of law pass to any person other than the Lessee, or should the leasehold
interest be levied upon under execution, and should any of such
conditions/defaults continue for fifteen (15) days after Lessor gives Lessee
written notice of such conditions/defaults and request that the same be
cured, then and in such event, the Lessor may, if the Lessor so desires,
after such demand and notice to the Lessee declare this Lease terminated and
reenter the Premises without further notice or demand and hold and enjoy the
same thenceforth as if this Lease had not been made, without prejudice,
however, to any right of action or remedy of the Lessor in respect to any
breach by the Lessee of any of the covenants herein contained, including,
but not limited to, all of those remedies set forth hereinafter. Also in
such event, whether or not Lessor has elected to terminate this Lease as
provided herein, the Lessor shall nevertheless have and is hereby given the
right to reenter the Premises, with or without legal process, and to remove
the Lessee's signs and all property and effects of the Lessee or others, and
if the Lessor so desires, to relet the Premises or any part thereof upon
such terms, to such person or persons and for such period or periods as may
seem proper to the Lessor. In case of such reletting, the Lessee shall be
liable to the Lessor for the difference between the rents and payments
herein reserved and agreed upon for the residue of the entire stipulated
term of this Lease and the net rent for such residue of the term realized by
the Lessor by such reletting, such net rent to be determined by deducting
from the entire rent received by Lessor from such reletting the expenses of
recovering possession, reletting, altering and repairing the Premises and
collecting rent therefrom; and the Lessee hereby agrees to pay such
deficiency each month as the same may accrue, the Lessee to pay to the
Lessor, within five (5) days after the expiration of each month during such
residue of the term, the difference between the rent and payment for said
month as fixed by this Lease and the net amount realized by the Lessor from
the Premises during said month. At Lessor's option, and at any time after
the occurrence of an event of default as hereinbefore specified and a
failure to timely cure, whether or not the Lessor has collected any
additional rentals or monthly deficiencies after the occurrence of such
event of default, and whether or not the Lessor has elected to terminate
this Lease, the Lessor shall be entitled to recover from the Lessee, and the
Lessee shall pay to the Lessor, on demand, as and for liquidated and agreed
to final damages for the Lessee's default, an amount equal to the difference
between the rent and additional rent reserved hereunder for the unexpired
portion of the Lease term and the then fair and reasonable rental value of
the leased property for the same period. In the computation of such damages,
the difference between any installment of rent becoming due hereunder after
the date of termination and the fair and reasonable rental value of the
leased property for the period for which such installment was payable shall
be discounted to the date of termination at the rate of four percent (4%)
per annum. If the Premises or any part thereof is relet by the Lessor for
the unexpired term of this Lease, or any part thereof, in an arms length
transaction, before presentation of proof of such liquidated damages to any
court, commission, or tribunal, the amount of rent reserved upon such
reletting shall be deemed prima facie to be the fair and reasonable rental
value for the part of the whole of the leased Premises so relet during the
term of the reletting period.
In the event Lessor makes default in performing, fulfilling, keeping
or observing any of Lessor's covenants, conditions, provisions or agreements
herein contained and such default continues for fifteen (15) days after
Lessee gives Lessor written notice of such default and requests that the
same be cured, then Lessee may resort to any and all legal remedies or
combination of remedies which Lessee may desire to assert including but not
limited to one or more of the following: (a) contract to have a third party
perform such covenant, condition, provision or agreement that is in need of
performance and charge to Lessor any cost that Lessee incurs with respect
thereto (such charge may be in the form of a deduction from rental
payments), and/or (b) terminate this Lease, whereupon any advance rent
payments shall be immediately refunded (subject to reduction by Lessor for
any physical damages caused by Lessee to the Premises) and Lessee shall be
relieved of all further obligations and responsibilities with respect hereto
(including without limitation Lessee's obligations to pay any additional
rent), and/or (c) require Lessor to correct any failure by specific
performance, and/or (d) bring an action against Lessor for damages, and/or
(e) obtain an abatement in Lessee's rent (commensurate with the value of
loss occasioned by the default) from the first date of such failure or
default by Lessor.
19. REMEDIES REGARDING ADDITIONAL PAYMENTS: All taxes, insurance
premiums, costs and expenses which the Lessee assumes or agrees to pay
hereunder shall constitute contractual obligations of Lessee hereunder, and
in the event of nonpayment the Lessor shall have all of the rights and
remedies herein provided for in the case of nonpayment of rent or breach of
condition, and may consolidate such obligations or pursue remedies
individually.
20. SIGNS AND OTHER IDENTIFICATION: Lessee shall not place or erect
any signs or identifying marks, insignia or advertising on or about the
Premises or the Building except in conformity with local sign ordinances,
and upon the prior written consent of Lessor, which consent shall not be
unreasonably withheld or delayed. Any sign or identification shall be at
Lessee's expense. In the event Lessee shall place or caused to be placed
any sign, identifying marks, trade mark, insignia or advertising on or about
the Premises or the Building and if the same do not comply with the terms
and provisions of this Paragraph, Lessor shall have the right and power to
remove the same at Lessee's expense. Any damage caused to the Premises or
the Building as a result of the installation of such non-conforming item, or
the subsequent removal thereof by Lessor, shall be the responsibility and
obligation of Lessee and Lessee shall immediately reimburse Lessor in an
amount sufficient to repair such damage.
21. SUBORDINATION AND CONSENT: Upon Lessor's request, Lessee shall
make a limited subordination of Lessee's rights hereunder to the lien of any
mortgage, deed of trust, or other security document which is a lien against
the Premises; provided, however, that Lessee's obligation to provide such
limited subordination shall be conditioned upon and subject to Lessee
receiving an agreement in proper form for recording from such security
interest holder (hereafter the "holder"), for said holder and its successors
and assigns, whereby said holder agrees that in the event of a default under
such mortgage, deed of trust, or other security document, for so long as
Lessee shall not have failed to timely cure a default hereunder as would
permit Lessor to terminate this Lease: (a) such holder (and its successors
and assigns) shall not cut off or terminate this Lease (including without
limitation any of the extended terms herein provided), and (b) the holder
(and its successors and assigns) shall not disturb Lessee in its possession
or use of the Premises, and (c) despite such mortgage, deed of trust, or
other security document, and any default by Lessor and/or liquidation or
foreclosure thereunder, this Lease and Lessee's rights and occupancy
hereunder shall continue in full force and effect and shall be unimpaired
and unaffected, and therefore not terminated, modified, diminished, or
disturbed in any way whatsoever by any reason thereof. Lessee agrees that
upon Lessor's request the said limited subordination shall also provide that
for so long as Lessor shall not have failed to timely cure a default
hereunder, then upon the holder obtaining the rights of Lessor hereunder the
Lessee shall attorn to the holder and the holder shall be obligated to
Lessee hereunder.
22. SURRENDER INVALID UNLESS WRITTEN: No surrender of the Premises
for the remainder of the term hereunder shall be binding upon the Lessor
unless accepted by the Lessor in writing. Without limiting the generality of
the foregoing, it is agreed that the receipt or acceptance of the keys to
the Premises by the Lessor shall not constitute an acceptance of a surrender
of the Premises.
23. HOLDING OVER: If the Lessee shall remain in possession of the
Premises after the expiration of the term of this lease, such possession
shall be as a month-to-month tenant only. During such month-to-month
tenancy, unless otherwise agreed in writing by Lessor, rent shall be payable
at one and one-half times the rate as that in effect during the last month
of the preceding term, and the provisions of this Lease shall otherwise be
applicable.
24. WAIVER: One or more waivers of any provision of this lease by
either party shall not be construed as a waiver of a subsequent breach of
the same provision, and either party's consent or approval to or of any act
by the other requiring such consent or approval shall not be deemed to waive
or render unnecessary consent or approval to or of any subsequent similar
act by the other.
25. NOTICES: Any and all notices or demands required or permitted to
be given hereunder shall be deemed to be property served if hand delivered,
or if sent by registered or certified mail, postage prepaid, or by facsimile
with transmission confirmed, addressed or sent to the Lessor at
DONALD W. LINSCOTT
5101 Central Park Drive
Lincoln, Nebraska 68504
FAX 402-467-5101
or addressed to the Lessee at
LINCOLN SNACKS COMPANY, a Delaware corporation
Attention: Kristine Crabs, VP and C.F.O.
4 High Ridge Park
Stamford, CT 06905
FAX 203-329-4555
or at such other address or addresses as either party may hereafter
designate in writing to the other. Any notice or demand so mailed shall be
effective for all purposes at the time of deposit thereof in the United
State mail, or at the time of facsimile confirmation.
26. DISCLOSURE: Lessee is hereby notified that the Lessor herein
holds a Nebraska Real Estate license.
27. NO OTHER AGREEMENTS: This lease and the Real Estate Purchase
Agreement for the Property executed in connection herewith contain the
entire understanding and agreement of the parties, and supersede all prior
understandings and agreements.
28. MODIFICATIONS:
28.1 Modifications to Lease. This Lease cannot be revised, adjusted
or modified unless in writing signed by both parties. If the
completion of construction is delayed by general strikes, then, and in
such event, the time of completion of construction and the
Commencement Date of the Lease shall be extended for an additional
period equal to the amount of time lost due to such delay. Lessor
shall at the time of such delay, if any, notify Lessee in writing the
amount of additional time necessary in which to complete construction.
All other causes for delay are at Lessor's risk.
28.2 Modifications or Alterations to Premises. After the
Commencement Date, Lessee may, at Lessee's own cost and expense, make
reasonable modifications or alterations to the interior or exterior of
the Premises, after having first obtained the consent of Lessor, which
consent shall not be unreasonably withheld.
29. INDEMNIFICATION: Lessee shall indemnify, defend, and hold
harmless, Lessor at Lessee's expense, against all claims, expenses and
liabilities, including but not limited to reasonable attorneys' fees
incurred in successfully pursuing any of Lessor's legal remedies hereunder
or in defending himself in legal proceedings of any kind, arising from (a)
failure of Lessee to perform any covenant required to be performed by Lessee
hereunder; (b) any accident, injury or damage which shall happen in or about
the Premises on or after the Commencement Date and is caused by Lessee; and
(c) any negligent act or omission or willful misconduct by Lessee, or its
agents, contractors, employees or licensees.
Lessor shall indemnify, defend, and hold harmless, Lessee at Lessor's
expense, against all claims, expenses and liabilities, including but not
limited to reasonable attorneys' fees incurred in successfully pursuing any
of Lessee's legal remedies hereunder or in defending itself in legal
proceedings of any kind, arising from (a) failure of Lessor to perform any
covenant required to be performed by Lessor hereunder; (b) any accident,
injury or damage which shall happen in or about the Premises on or after the
Commencement Date and is caused by Lessor; and (c) any negligent act or
omission or willful misconduct by Lessor, or his agents, contractors,
employees or licensees.
30. EXPLANATORY PROVISIONS: The provisions of this lease shall be
binding upon, inure to the benefit of and apply to the respective heirs,
executors, administrators, successors and assigns of the parties hereto. The
masculine pronoun, wherever used, shall include the feminine and neuter, and
the singular shall include the plural. Headings are given to the paragraphs
of this lease solely as a convenience to facilitate reference and shall not
be deemed material or relevant to the construction of the lease or any
provision thereof.
31. EXHIBITS: All Exhibits attached to this Lease are incorporated
in this Lease by reference.
32. CONTINGENCY: This Lease is expressly contingent upon the Lessor
closing on or before October 10, 1996: (i) on the purchase of Lot 3, Block
3, Lincoln Industrial Park South, Lincoln, Nebraska, and (ii) on the
purchase of Lots 1 and 2, Block 3, Lincoln Industrial Park South, Lincoln,
Nebraska.
33. QUIET ENJOYMENT: Except as otherwise provided herein, for so
long as Lessee has not failed to timely cure a default hereunder as would
permit Lessor to terminate this Lease, then during the term hereof Lessee
may peaceably and quietly enjoy the leased property without any disturbance
from the Lessor, or any other person claiming through or under the Lessor.
34. MEMORANDUM OF LEASE. Lessor and Lessee agree that a Memorandum
of Lease may be filed by either of them with the Lancaster County Register
of Deeds. Lessor and Lessee each agree to sign a Memorandum of Lease if
requested to do so by the other.
35. RENEWAL OPTIONS.
35.1 Years 11-15. Provided that there is no uncured default then
existing under the terms and conditions of this Lease, Lessee shall
have the option to extend the original term of this Lease for an
additional five (5) years from the expiration of the original term,
with such extended term (the "11-15 Year Term") to be subject to the
same conditions and provisions as set forth herein, except as to rent.
If Lessee desires to exercise this option it shall give Lessor written
notice of such intention at least one hundred eighty (180) days prior
to the termination of the original ten (10)-year term. If no such
notice is given, then this Lease shall expire upon the expiration of
the original ten (10)-Year Term, unless sooner terminated in
accordance with the provisions herein. The monthly rent for each of
the months during the 11-15 Year Term shall be in an amount equal to
Twenty Thousand and 00/100 Dollars ($20,000.00) times a fraction, the
numerator of which is the Cost of Living Index for the last month of
the original ten (10)-year term, and the denominator of which is the
Cost of Living Index for the first month of the original ten (10)-Year
Term. For purposes of this Lease, the term "Cost of Living Index"
shall mean that index shown in the Consumer Price Index as the U.S.
City Average for all Urban Consumers published by the Bureau of Labor
Statistics, United States Department of Labor.
35.2 Years 16-20. Provided the option described in Section 35.1 was
exercised and that there is no uncured default then existing under the
terms and conditions of this Lease, Lessee shall have the option to
further extend the term of this Lease for an additional five (5) years
from the expiration of the 11-15 Year Term, with such extended term
(the "16-20 Year Term") to be subject to the same conditions and
provisions as set forth herein, except as to rent. If Lessee desires
to exercise this option it shall give Lessor written notice of such
intention at least one hundred eighty (180) days prior to the
termination of the 11-15 Year Term. If no such notice is given, then
this Lease shall expire upon the expiration of the 11-15 Year Term,
unless sooner terminated in accordance with the provisions herein.
The monthly rent for each of the months during the 16-20 Year Term
shall be in an amount equal to Twenty Thousand and 00/100 Dollars
($20,000.00) times a fraction, the numerator of which is the Cost of
Living Index for the last month of the 11-15 Year Term, and the
denominator of which is the Cost of Living Index for the first month
of the original ten (10) Year Term.
36. DISCLOSURE. Lessee is hereby notified that Lessor holds a
Nebraska Real Estate License. Lessor also conducts real estate business in
the name of Lin-Keo Investment Co., L.L.C. ("Lin-Keo"), a Nebraska limited
liability company having the following two members: Lessor and Michelle E.
Keogh, who also holds a Nebraska Real Estate License. Subject to the terms
herein, Lin-Keo may acquire an interest in the property that is the subject
of this Lease, or in this Lease.
37. PRORATIONS. To the extent Lessee is responsible to make payment
hereunder with respect to any expense which is typically billed with respect
to the entire Property (i.e., real estate taxes, insurance, non-separately
metered utilities, mowing, snow removal, etc.), then Lessee's share of such
expense shall be 57.4% (50,000/87,040) of the total cost and the balance at
42.6% shall be paid by Lessor or Lessor's other tenant at the Property.
IN WITNESS WHEREOF, the parties hereto have executed this lease on the dates
set forth below.
LESSOR
/s/ Donald W. Linscott Date: 10/10/96
DONALD W. LINSCOTT
Witness:/s/ Christie Schwartzhopf Schroff Date: 10/10/96
LESSEE
LINCOLN SNACKS COMPANY, a Delaware corporation
By: /s/ Richard S. Kirk, Jr. Date: 10/10/96
Its Executive Vice President and Chief Operating Officer
and By:/s/ Kristine A. Crabs Date: 10/10/96
Its Chief Financial Officer
<PAGE>
ADDENDUM TO LEASE
THIS ADDENDUM, made and entered into this ________ day of
____________________,1997, is to that certain Lease dated , 1996 by
and between DONALD W. LINSCOTT, hereinafter called "Lessor", and LINCOLN
SNACKS COMPANY, a Delaware corporation, hereinafter called "Lessee".
Capitalized terms in the Lease shall have the same meanings herein. When
fully executed, this Addendum shall form a part of the Lease.
The parties agree as follows.
1. CONDITION OF PREMISES; ACCEPTANCE BY LESSEE: The Lessee has
examined the Premises and is satisfied with the physical condition thereof,
including its fitness for Lessee's intended purpose, except as noted on the
attached Exhibit 1. Lessee's taking possession of the Premises upon
completion of construction and at the Commencement Date shall be conclusive
evidence, together with this Addendum, of its receipt thereof in good and
satisfactory order and repair, except as noted on the attached Exhibit 1.
Lessee acknowledges that no representation as to the condition or repair of
the Premises has been made by or on behalf of the Lessor, except as noted on
the attached Exhibit 1, and likewise acknowledges that no agreement or
promise to decorate, alter, repair or improve the Premises including all
equipment and appurtenances, either before or after the execution hereof,
has been made by or on behalf of the Lessor, except as noted on the attached
Exhibit 1. The occupancy by Lessee of the leased Premises shall constitute
an acknowledgment by Lessee that the leased Premises are in the condition
called for by the Lease and that Lessor has performed all of the Lessor's
work with respect thereto and that all construction and/or remodeling
required in accordance with the terms of the Lease have been fully and
satisfactorily completed in accordance with the terms thereof except as
noted on the attached Exhibit 1.
2. CONTRACTOR'S ONE-YEAR WARRANTY FOR WORKMANSHIP: Lessor's
general contractor, Sampson Construction Co., Inc. makes a one-year warranty
for workmanship on its work in connection with construction of the
Improvements. Lessor agrees to pass through to Lessee the benefits of such
warranty to the extent and for the duration of the warranty.
IN WITNESS WHEREOF, the parties hereto have executed this Addendum on the
dates set forth below.
LESSOR
Date:
DONALD W. LINSCOTT
Witness: Date:
LESSEE
LINCOLN SNACKS COMPANY, a Delaware corporation
By: Date:
,
Attest: Date:
<PAGE>
LIST OF EXHIBITS
Exhibit A Site Plan showing Premises
Description: Site Plan of premises showing 50,000
square feet of space in the to-be-constructed
commercial building comprising an estimated 87,040
square feet, plus the surrounding area as all shown
to be located upon Lots 1 and 2, Block 3, Lincoln
Industrial Park South, Lincoln, Lancaster County,
Nebraska.
Exhibit B Map of Lincoln Industrial Park South
Description: Map of Lincoln Industrial Park South.
Exhibit C Plans
Special conditions as listed on next page.
Exhibit D Specifications
Description: General specifications of floor plan.
<PAGE>
LINCOLN SNACK WAREHOUSE
October 4, 1996
EXHIBIT C
SPECIAL CONDITIONS INCLUDED:
1. Building sets at elevation 1216.5 FFE.
2. Dock high south wall.
3. Pre-engineered metal building structure.
4. Paving at south for truck access.
5. Landscaping and lawn irrigation.
6. Six inch (6") concrete slab-on-grade with rebar.
7. Exit doors per code.
8. Four (4) entry doors.
9. Drywall demising wall at 50,000 S.F. mark.
10. Restroom and office in 50,000 S.F. area.
11. Six (6) dock levelors.
12. Semi-rigid epoxy floor joints.
13. Water and fire services to building, sewer and storm water service to
building.
14. Direct-fixed, rooftop units with air conditioning for 50,000 S.F.
area.
15. Infra-red heater at docks.
16. Three-phase electric service.
17. High-pressure sodium warehouse lighting.
18. Exit lights per code.
19. Convenience outlets.
20. Fire sprinkler system for Product Mfg. By Lincoln Snack.
21. Connector Link to existing building.
<PAGE>
FIRE LANE AND ACCESS EASEMENT
THIS AGREEMENT is made effective the 10th day of October, 1996 by and
between LINCOLN SNACKS COMPANY, a Delaware corporation ("Grantor"), and
DONALD W. LINSCOTT ("Grantee").
RECITALS
WHEREAS, Grantor is the owner of the following described property
("Subject Property"):
Lot 8, Block 5, Lincoln Industrial Park, Lincoln,
Lancaster County, Nebraska
WHEREAS, Grantee is the owner of adjoining property, having purchased
such property from Grantor on the effective date hereof, described as:
Lots 1 and 2, Block 3, Lincoln Industrial Park
South, Lincoln, Lancaster County, Nebraska
("Warehouse Property")
WHEREAS, Grantee intends to construct on Grantee's property a
warehouse ("Building"), a portion of which will be leased back to
Grantor, that will be set back 20' from the north property line of the
Warehouse Property;
WHEREAS, a 60' wide lane is required by City of Lincoln building codes
for emergency/fire access on the north side of the Building; and
Grantor has agreed to grant an easement for that purpose;
NOW, THEREFORE, in consideration of and incorporating the foregoing
Recitals, and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties agree:
TERMS
1. Grant of Easement. Grantor hereby grants to Grantee a perpetual
access easement over the south 40' of the Subject Property, as shown on
Exhibit "A", attached hereto and incorporated herein by this reference. No
above-ground structure shall be constructed on the property reserved for
such easement. In addition to providing access to the Warehouse Property,
such property may be used by emergency personnel and vehicles in the event
of a fire or other emergency.
2. Maintenance. The property that is the subject of the easement
granted herein shall be maintained at the expense of Grantor.
3. Binding Effect. This Easement shall run with the land and shall
be binding upon the parties' heirs, successors and assigns.
GRANTEE: GRANTOR:
DONALD W. LINSCOTT LINCOLN SNACKS COMPANY,
a Delaware corporation
/s/ Donald W. Linscott By: /s/ Richard S. Kirk, Jr.
Donald W. Linscott Richard S. Kirk, Jr.
STATE OF NEBRASKA )
) ss
COUNTY OF LANCASTER )
The foregoing instrument was acknowledged before me this 10th day
of October, 1996 by Donald W. Linscott.
/s/ Jolanda J. Junge
Notary Public
My Commission Expires: 8/11/98
STATE OF NEBRASKA )
) ss
COUNTY OF LANCASTER )
The foregoing instrument was acknowledged before me this 10th day
of October, 1996 by Richard S. Kirk, Jr., the Executive Vice President and
Chief Operating Officer of LINCOLN SNACKS COMPANY, a Delaware corporation,
on behalf of the corporation.
/s/ Jolanda J. Junge
Notary Public
My Commission Expires: 8/11/98
<PAGE>
FIRE LANE AND ACCESS EASEMENT EXHIBITS:
Description Exhibit A: Emergency Fire Access Easement over the South
Forty and No Tenths (40.0) feet of Lot 8, Block
5, Lincoln Industrial Park.
<PAGE>
ACCESS EASEMENT
THIS AGREEMENT is made effective the 10th day of October, 1996 by and
between LINCOLN SNACKS COMPANY, a Delaware corporation ("Grantor"), and
DONALD W. LINSCOTT ("Grantee").
RECITALS
WHEREAS, Grantor is the owner of the following described property
("Subject Property"):
Lot 8, Block 5, Lincoln Industrial Park, Lincoln,
Lancaster County, Nebraska
WHEREAS, Grantee is the owner of adjoining property, having purchased
such property from Grantor on the effective date hereof, described as:
Lots 1 and 2, Block 3, Lincoln Industrial Park
South, Lincoln, Lancaster County, Nebraska
("Warehouse Property")
WHEREAS, Grantee intends to construct on Grantee's property a
warehouse ("Building"), a portion of which will be leased back to
Grantor, that will be set back 20' from the north property line of the
Warehouse Property;
WHEREAS, depending upon the future uses of the Building, additional
parking may be needed on the north side of the Building, to which
access will be necessary over and across the Subject Property and
Grantor has agreed to grant an easement for that purpose;
NOW, THEREFORE, in consideration of and incorporating the foregoing
Recitals, and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties agree:
TERMS
1. Grant of Easement. Grantor hereby grants to Grantee a perpetual
common access easement, for the benefit of the Warehouse Property, over and
across the cross-hatched area on the Subject Property, as shown on Exhibit
"A", attached hereto and incorporated herein by this reference. It is the
intent and purpose of this easement to provide access to any future parking
areas along the north side of the Building on the Warehouse Property. Such
parking shall be for the use of all motor vehicles, but shall not be used
for parking semi-trailers.
2. Maintenance. The property that is the subject of the easement
granted herein shall be maintained at the expense of Grantor.
3. Binding Effect. This Easement shall run with the land and shall
be binding upon the parties' heirs, successors and assigns.
GRANTEE: GRANTOR:
DONALD W. LINSCOTT LINCOLN SNACKS COMPANY,
a Delaware corporation
/s/ Donald W. Linscott By: /s/ Richard S. Kirk, Jr.
Donald W. Linscott Richard S. Kirk, Jr.
STATE OF NEBRASKA )
) ss
COUNTY OF LANCASTER )
The foregoing instrument was acknowledged before me this 10th day
of October, 1996 by Donald W. Linscott.
/s/ Jolanda J. Junge
Notary Public
My Commission Expires: 8/11/98
STATE OF NEBRASKA )
) ss
COUNTY OF LANCASTER )
The foregoing instrument was acknowledged before me this 10th day
of October, 1996 by Richard S. Kirk, Jr., the Executive Vice President and
Chief Operating Officer of LINCOLN SNACKS COMPANY, a Delaware corporation,
on behalf of the corporation.
/s/ Jolanda J. Junge
Notary Public
My Commission Expires: 8/11/98
<PAGE>
ACCESS EASEMENT EXHIBITS:
Description Exhibit A: DESCRIPTION of a Common Access Easement for
Ingress and Egress on a part of Lot 8, Block 5,
Lincoln Industrial Park, more particularly
described as follows:
Referring to the Southwest corner of said Lot 8,
thence in a Northerly direction along the West
line of said Lot 8, a distance of Eighty-Nine and
No Tenths (89.0) feet. Thence in an Easterly
direction parallel to the South line of said Lot
8, a distance of One Hundred and No Tenths
(100.0) feet. Thence in a Southerly direction,
parallel to the West line of said Lot 8, a
distance of Forty-Nine and No Tenths (49.0) feet.
Thence in an Easterly direction, parallel to the
South line of said Lot 8, a distance of Three
Hundred Thirty and No Tenths (330.0) feet.
Thence in a Southerly direction, parallel to the
West line of said Lot 8, a distance of Forty and
No Tenths (40.0) feet to a point on the South
line of said Lot 8. Thence in a Westerly
direction along the South line of said Lot 8, a
distance of Four Hundred Thirty and No Tenths
(430.0) feet to the Point of Beginning.
<PAGE>
DECLARATION OF RECIPROCAL EASEMENTS
THIS DECLARATION OF RECIPROCAL EASEMENTS is made effective the 10th
day of October, 1996 by DONALD W. LINSCOTT ("Declarant").
RECITALS
WHEREAS, Declarant has on the effective date hereof, purchased the
following described property ("Subject Property"):
Lots 1, 2, and 3, Block 3, Lincoln Industrial Park
South, Lincoln, Lancaster County, Nebraska
WHEREAS, Declarant intends to begin construction immediately of a
warehouse ("First Building") on Lots 1 and 2, and Declarant intends to
construct a commercial building on Lot 3 in the future ("Second Building"),
all as shown on Exhibit "A" attached hereto and incorporated herein by this
reference;
WHEREAS, Declarant desires by this Declaration to assure access to
both the First Building and the Second Building, and to assure sufficient
space for large trucks to dock and turn in the area located between the
First Building and the Second Building;
NOW, THEREFORE, in consideration of and incorporating the foregoing
Recitals, Declarant hereby grants the easements described herein.
TERMS
1. Grant of Easement. Declarant hereby grants and creates a
perpetual and reciprocal common access easement to and from South 19th
Street, for the benefit of the owners and occupants of the Subject Property
from time to time, located on the N. 35' of the South 62.5' of Lot 2 of the
Subject Property, as shown on Exhibit "B" attached hereto and incorporated
herein by this reference ("Easement Area"). It is the intent and purpose of
this easement to provide for vehicular access both to and from South 19th
Street, and over and across the Easement Area for commercial purposes
associated with the First Building and the Second Building.
2. Maintenance. The property that is the subject of the easement
granted herein shall be maintained at the expense of the owner of Lot 2 of
the Subject Property, who may, at such owner's option, allocate and assess
such maintenance costs to the respective owners of the Lots comprising the
Subject Property.
3. Binding Effect. This Easement shall run with the land and shall
be binding upon the parties' heirs, successors and assigns.
DECLARANT:
DONALD W. LINSCOTT
/s/ Donald W. Linscott
Donald W. Linscott
STATE OF NEBRASKA )
) ss
COUNTY OF LANCASTER )
The foregoing instrument was acknowledged before me this 10th day
of October, 1996 by Donald W. Linscott.
/s/ Jolanda J. Junge
Notary Public
My Commission Expires: 8/11/98
<PAGE>
DECLARATION OF RECIPROCAL EASEMENTS EXHIBITS:
Description Exhibit A: To-be-constructed warehouse ("First Building") on
Lots 1 and 2, and to-be-constructed commercial
building on Lot 3 ("Second Building") as shown.
Description Exhibit B: Common Access Easement over the North Thirty-Five
and No Tenths (35.0) feet of the South Sixty-Two
and Five Tenths (62.5) feet of Lot 2, Block 3,
Lincoln Industrial Park South.
