EXHIBIT 10.46
LEASE
by and between
BAM CORPORATION
and
KPR HOLDINGS, L.P.
TABLE OF CONTENTS
1. DEMISE AND DESCRIPTION. . . . . . . . . . . . . . . . . . 1
2. CONDITION OF PREMISES . . . . . . . . . . . . . . . . . . 1
3. TERM. . . . . . . . . . . . . . . . . . . . . . . . . . . 2
4. RENTAL. . . . . . . . . . . . . . . . . . . . . . . . . . 2
5. IMPOSITIONS . . . . . . . . . . . . . . . . . . . . . . . 3
6. SURRENDER OF LEASED PREMISES. . . . . . . . . . . . . . . 5
7. INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . 6
8. LANDLORD'S RIGHT TO PERFORM TENANT'S COVENANTS. . . . . . 9
9. USE OF LEASED PREMISES. . . . . . . . . . . . . . . . . . 10
10. MECHANICS' LIENS. . . . . . . . . . . . . . . . . . . . . 11
11. REPAIRS, MAINTENANCE. . . . . . . . . . . . . . . . . . . 11
12. RIGHT OF LANDLORD TO INSPECT AND REPAIR . . . . . . . . . 12
13. INDEMNIFICATION BY TENANT . . . . . . . . . . . . . . . . 12
14. LIGHT, HEAT AND POWER . . . . . . . . . . . . . . . . . . 13
15. ALTERATIONS . . . . . . . . . . . . . . . . . . . . . . . 13
16. DESTRUCTION AND RESTORATION . . . . . . . . . . . . . . . 15
17. SALE OR ASSIGNMENT OF LANDLORD'S INTEREST . . . . . . . . 17
18. CONDEMNATION. . . . . . . . . . . . . . . . . . . . . . . 17
19. DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . 18
20. ASSIGNMENTS . . . . . . . . . . . . . . . . . . . . . . . 21
21. RIGHTS OF MORTGAGEE . . . . . . . . . . . . . . . . . . . 26
22. ESTOPPEL CERTIFICATES . . . . . . . . . . . . . . . . . . 26
23. INVALIDITY OF PARTICULAR PROVISIONS . . . . . . . . . . . 26
24. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . 26
25. QUIET ENJOYMENT . . . . . . . . . . . . . . . . . . . . . 27
26. HAZARDOUS MATERIAL. . . . . . . . . . . . . . . . . . . . 27
27. OPTION TO PURCHASE. . . . . . . . . . . . . . . . . . . . 29
28. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . 29
LEASE
THIS LEASE ("Lease") is made by and between BAM CORPORATION
("Landlord") and KPR HOLDINGS, L.P., a Delaware limited
partnership ("Tenant"), as of December 11, 1995, with reference
to the following circumstances:
RECITALS
A. Landlord is the owner of that certain real property
located in the City of Fort Worth, County of Tarrant, State of
Texas, commonly known as 0000 Xxxx Xxxxxx Xxxxxxxxx, Xxxx
Xxxxx, Xxxxx and described on Exhibit "A" attached hereto and
incorporated herein by reference ("Land").
B. The Land is improved with a certain building and
related improvements (collectively the "Building").
C. Landlord is willing to lease the Land and the Building
to Tenant and Tenant is willing to lease the Land and Building
from Landlord on the terms and conditions contained herein.
Concurrently herewith, FOODBRANDS AMERICA, INC. has delivered to
Landlord a Continuing Guaranty, identical to Exhibit "B" attached
hereto and incorporated herein by reference, guaranteeing all of
Tenant's obligations hereunder.
OPERATIVE PROVISIONS
NOW, THEREFORE, in consideration of the foregoing Recitals,
which Recitals are incorporated herein by reference, and of the
covenants herein contained, Landlord and Tenant hereby agree as
follows:
1. DEMISE AND DESCRIPTION.
1.01 Landlord, for and in consideration of the rents
and covenants herein specified to be paid and performed by
Tenant, hereby leases to Tenant, and Tenant hereby hires from
Landlord, on the terms and conditions and for the purposes herein
set forth the Land and the Building, together with all easements,
rights and appurtenances in connection therewith or thereunto
belonging, but subject to all easements, licenses, rights-of-way,
encumbrances and all other matters of record in Tarrant County,
Texas.
1.02 The above-described Land, the Building and
appurtenances will be hereinafter referred to as the "Leased
Premises" or the "Premises".
2. CONDITION OF PREMISES. By entry hereunder, Tenant
accepts the Premises in its present condition and without any
representation or warranty by Landlord as to the condition
of the Premises or as to the use or occupancy which may be made
thereof, and, further, Landlord shall not be responsible for any
latent or other defect or change of condition in the Premises
caused by Tenant, and the rent hereunder shall in no event be
withheld or diminished on account of any such defect in the
Premises nor any such change in its condition, nor, except as
provided herein, for any damage occurring thereto. Landlord
hereby represents and warrants that Landlord is the owner of the
Premises, and has full authority to enter into this Lease, but
makes no other representation or warranty, express or implied, as
to any matter whatsoever.
3. TERM.
3.01 This Lease shall be for a basic term of ten (10)
years, which shall be deemed to have commenced as of the date of
mutual execution and delivery hereof ("Commencement Date"), and
shall terminate on the tenth (10th) anniversary of the
Commencement Date, unless terminated earlier or extended in
accordance with the provisions hereinafter set forth.
3.02 Tenant is given the option to extend the term of
this Lease on all the provisions contained in this Lease, except
for the rental, for two (2) additional five year terms
(individually a "renewal term" and collectively the "renewal
terms") following expiration of the basic term or prior renewal
term, as the case may be, by giving notice of exercise of the
option ("option notice") to Landlord at least six (6) months but
not more than one (l) year before the expiration of the basic
term or first renewal term, respectively. Provided that, if
Tenant is in default, and the applicable cure period for such
default has expired, on the date of giving any option notice,
such option notice shall be totally ineffective, or if Tenant is
in default, and the applicable cure period for such default has
expired, on the date a renewal term is to commence, such renewal
term shall not commence and this Lease shall expire at the end of
the basic term or prior renewal term. Unless the context clearly
indicates otherwise when used herein, the phrase "term of this
Lease" shall mean the basic ten (10) year term and each renewal
term.
4. RENTAL.
4.01 Subject to the adjustments hereinafter provided,
Tenant agrees to pay base rent of Seventy Thousand Five Hundred
Ninety-one Dollars ($70,591) per month lawful money of the United
States of America, for the Leased Premises, which base rent shall
be payable in advance on the first day of each calendar month for
the basic term of this Lease, to Landlord at 0000 Xxxxxxx Xxxxx,
Xxxx Xxxxx, Xxxxx 00000, or at such other address as Landlord may
hereafter designate. Tenant further agrees that it will deposit
with Landlord upon execution hereof an initial rent payment equal
to the sum of one (1) month's base rent. Such initial rent
payment shall be applied by Landlord toward the initial base rent
due under this Lease. In addition, Tenant agrees to pay, as
additional rent, such other amounts as required by the terms
and conditions specified in this Lease. Tenant's rent obligation
for any fractional portion of a calendar month at the beginning
or end of the term of this Lease shall be a similar fraction of
the rental due for an entire month.
4.02 As of each Adjustment Date (as hereinafter
defined), base rent hereunder shall be adjusted as hereafter
provided.
4.03 The base rent shall be subject to adjustment as of
third (3rd) anniversary of the Commencement Date, and, provided
that Tenant exercises its option to renew the term of this
Lease as set forth in Section 3.02 above, as of the commencement
date of each renewal term (individually an "Adjustment Date" and
collectively the "Adjustment Dates") as follows:
(a) On the first Adjustment Date, the base rent
shall be adjusted as follows: the base rent shall be adjusted to
reflect the increase, if any, in Landlord's cost of funds as of
May, 1993 [which was six and 7/10 percent (6.7%)] and Landlord's
cost of funds as of the first Adjustment Date. The base rent
shall be adjusted upward to reflect the cost of servicing a
debt of $7,500,000 given the cost of funds on and as of the dates
set forth above. As used in this Section, "Landlord's cost of
funds" as of the first Adjustment Date shall mean Landlord's
actual cost of funds as of the first Adjustment Date, provided
that Landlord shall use best efforts to obtain a favorable
interest rate for a loan secured by, or otherwise acquired to
service the debt arising from the acquisition by Landlord of, the
Building.
(b) Base rent shall be adjusted as of each
subsequent Adjustment Date by multiplying the base rent as
adjusted on the last previous Adjustment Date by 1.1, such that
the adjusted base rent shall be 110% of the base rent as adjusted
on the last previous Adjustment Date. On or prior to each
Adjustment Date, Landlord shall give Tenant written notice
indicating the amount of the adjusted base rent and the method of
computation thereof.
4.04 This Lease is what is commonly called a "triple
net lease", it being the purpose and intent of Landlord and
Tenant that the rent payable hereunder shall be net to Landlord,
so that this Lease shall yield net to Landlord the base rent
specified in this Section 4 in each month during the term of this
Lease free and clear of any and all other Impositions (as
hereinafter defined), taxes, liens, charges or expenses of any
nature whatsoever in connection with the ownership and operation
of the Premises. The parties hereto agree that all costs,
expenses and charges of every kind and nature relating to the
Leased Premises which may be attributed to, or become due during
the initial or any renewal term of this Lease, shall constitute
additional rent to be paid by Tenant and, upon failure of Tenant
to pay any such costs, expenses or charges, Landlord shall have
the same rights and remedies as otherwise provided in this Lease
for the failure of Tenant to pay rent. It is the intention of
the parties hereto that the Lease shall not be terminable for any
reason by Tenant and that Tenant shall in no event be entitled to
any abatement or reduction in rent payable hereunder, except as
expressly provided herein. Any present or future law to the
contrary shall not alter the agreement of the parties.
5. IMPOSITIONS.
5.01 During the term of this Lease, Tenant covenants
and agrees to pay, as rent in addition to all other rent payable
hereunder, before any fine, penalty, interest or cost may be
added thereto for the nonpayment thereof and ten (10) days prior
to delinquency, all taxes, sewer taxes, excises, license and
permit fees, assessments, water rates and charges and other
governmental charges, general and special, ordinary and
extraordinary, unforeseen, as well as foreseen, of any kind and
nature whatsoever, including but not limited to any tax based
upon a reassessment of the Premises and assessments for public
improvements or benefits, which prior to or during the term of
this Lease are assessed or imposed upon or become due and payable
and a lien upon: (i) the Leased Premises or any part thereof or
any personal property, equipment or other facility used in the
operation thereof; or (ii) the rent or income received from
subtenants or licensees; or (iii) any use or occupancy of the
Leased Premises; or (iv) this transaction or any document to
which Tenant is a party creating or transferring an estate or
interest in the Leased Premises (all of which taxes, assessments
and other governmental charges are hereinafter referred to as
"Impositions"); provided, however, that if, by law, any such
Imposition is payable, or may at the option of the taxpayer be
paid, in installments, Tenant may pay the same together with any
accrued interest on the unpaid balance of such Imposition in
installments as the same respectively become due and before any
fine, penalty, interest or cost may be added thereto for the
nonpayment of any such installment and interest; and provided,
further, that any Imposition relating to a fiscal period of the
taxing authority a part of which period is included within the
term of this Lease, shall be prorated as between Landlord and
Tenant so that Landlord shall pay the portion of Impositions
attributable to any period subsequent to the termination of the
term of this Lease, and Tenant shall pay the portion thereof
attributable to any period during the term of this Lease.
5.02 If at any time during the term of this Lease there
shall be assessed or imposed (i) a tax or assessment on the rents
received by Landlord or by Tenant in connection with the Leased
Premises, or (ii) a tax or assessment (including but not limited
to any municipal, state or federal levy) measured by or based in
whole or in part upon the value of the Leased Premises and
imposed upon Landlord, or (iii) a license fee, tax or assessment
measured by the rent payable under this Lease, then all such
taxes, assessments or fees shall be deemed to be included within
the term "Impositions" as defined in Section 5.01 hereof, and
Tenant shall pay and discharge the same as herein provided in
respect of the payment of Impositions, it being the intention of
the parties hereto that the rent to be paid hereunder shall be
paid to Landlord absolutely net without deduction of any nature
whatsoever, foreseeable or unforeseeable. The payment to be made
by Tenant pursuant to this Section shall be made before any fine,
penalty, interest or cost may be added thereto for the nonpayment
thereof, and ten days prior to delinquency. Each such tax,
assessment, levy, imposition or charge shall be deemed to be an
item of additional rent hereunder. Federal or state income tax
payable by Landlord by reason of the receipt of rents as in this
Lease provided shall not be deemed to be included within the term
"Impositions" as defined in Section 5.01 hereof.
5.03 Subject to the provisions of Section 5.04 hereof,
Tenant covenants to furnish to Landlord within thirty (30) days
after the date upon which any such Imposition is payable by
Tenant as in this Section provided, all official receipts of the
appropriate taxing authority, or other proof satisfactory to
Landlord, evidencing the payment thereof.
5.04 Tenant shall have the right before any delinquency
occurs to contest or object to the amount or validity of any such
Imposition by appropriate legal proceedings but this shall not be
deemed or construed in any way as relieving, modifying or
extending Tenant's covenant to pay any such Imposition at the
time and in the manner in this Section provided, unless
(a)(i) the legal proceedings shall operate to prevent the sale of
the Leased Premises or any part thereof to satisfy such
Imposition prior to final determination of such proceedings; or
(ii) Tenant shall have provided a good and sufficient bond or
undertaking as may be required or permitted by law to accomplish
a stay of such proceedings; and (b) no penalty or interest shall
be charged to Landlord as a result of Tenant's failure to timely
pay such Imposition. Landlord shall not be required to join in
any such proceedings unless it shall be necessary for it to do so
in order to properly prosecute such proceedings and Landlord
shall have been fully indemnified to its satisfaction against all
costs and expenses in connection therewith; provided, however
that Landlord shall not be subjected to any liability for the
payment of any costs or expenses in connection with any such
proceedings brought by Tenant, and Tenant covenants to indemnify
and save Landlord harmless from any such costs or expenses.
5.05 Landlord shall forward to Tenant any notice of
increase in the amount of any Imposition. As between the parties
hereto, Tenant alone shall have the duty of attending to,
making or filing any declaration, statement or report which may
be provided or required by law as the basis of or in connection
with the determination, equalization, reduction or payment of any
and every Imposition which is to be borne or paid or which may
become payable by Tenant under the provisions of this Section,
and Landlord shall not be or become responsible to Tenant
therefor, nor for the contents of any such declaration, statement
or report.
5.06 If any Mortgagee of the Leased Premises requires
Landlord to impound Impositions on a periodic basis during the
term of this Lease, Tenant, on notice from Landlord indicating
this requirement, shall pay a sum of money towards its liability
under this Section 5 to Landlord on a periodic basis in
accordance with such Mortgagee's requirements, provided that
such Mortgagee's requirements shall be commercially reasonable
and provided that such Mortgagee shall agree that all such sums
impounded shall be used only for the purpose of paying such
Impositions. Landlord shall impound the Impositions received
from Tenant in accordance with the requirements of the Mortgagee.
To the extent that tenant pays any money toward its liability
under this Section 5, Tenant shall be relieved of its obligation
to pay any Imposition directly to the taxing agency or other
party to whom such Imposition is owed.
6. SURRENDER OF LEASED PREMISES.
6.01 On the last day of the term hereof, or upon any
earlier termination of this Lease pursuant to the terms hereof,
or upon any reentry by Landlord upon the Leased Premises
pursuant to the provisions hereof, Tenant shall surrender to
Landlord the Leased Premises in good order, condition and repair,
reasonable wear and tear excepted, free and clear of all liens
and encumbrances, other than those, if any, permitted hereby or
otherwise created or consented to by Landlord or arising solely
out of any action of Landlord, and, if requested to do so, shall
execute, acknowledge and deliver to Landlord such instruments of
further assurance as in the opinion of Landlord are necessary or
desirable to confirm or perfect Landlord's right, title and
interest in and to the Leased Premises. All fixtures,
alterations or other improvements constructed or installed
on the Premises by Tenant, including, without limitation,
additions to the Building, shall, at no cost and expense to
Landlord, be deemed to be affixed to the Land and shall be the
property of Landlord. Tenant shall not, at the expiration or
sooner termination of the Lease, remove from the Premises any
fixtures, alterations or other improvements except with the
express written consent of Landlord, which consent may be
withheld in Landlord's sole discretion. Notwithstanding the
forgoing, Tenant shall have the right, at the expiration or
sooner termination of the Lease, to remove from the Premises
Tenant's trade fixtures, provided, however, that Landlord and
Tenant agree that the central refrigeration system for building
refrigeration, including any and all associated components, shall
be deemed to be affixed to the Land and shall not be deemed to be
trade fixtures.
6.02 If Tenant fails to surrender the Leased Premises
at the expiration or earlier termination of this Lease, Tenant
shall defend and indemnify Landlord from all liability and
expense resulting from the delay or failure to surrender,
including, without limitation, claims made by any succeeding
lessee founded on or resulting from Tenant's failure to surrender
the Leased Premises.
7. INSURANCE.
7.01 Tenant, at Tenant's sole cost and expense, shall
keep the Building, Tenant's leasehold improvements, alterations
additions or improvements permitted under Section 15, trade
fixtures, and personal property insured during the term of this
Lease for the mutual benefit of Landlord and Tenant as named
insureds as their interest appears, against all perils included
within the classifications of "all risk" or "special form and
flood (if required by any lender(s) having lien(s) on the
Premises), and against such other risks or hazards as Landlord
from time to time reasonably may designate, in amounts sufficient
to prevent Landlord or Tenant from becoming a co-insurer under
the terms of the applicable policies, but in any event in an
amount not less than one hundred percent (100%) of the then full
replacement costs of the Building (exclusive of the cost of
excavations, foundations, and footing below the lowest basement
floor), such leasehold improvements, alterations, additions or
improvements, trade fixtures, and personal property without
deduction for physical depreciation; and with not more than Fifty
Thousand Dollars ($50,000) deductible, or such other amount as
Landlord, in its sole discretion, consents to in writing, from
the loss payable for any casualty. The policies of insurance
carried in accordance with this Section shall contain a
"Replacement Cost Endorsement". Such full replacement cost
shall be determined from time to time, but not more frequently
than once in any twelve (12) consecutive calendar months (except
in the event of substantial changes or alterations to the
Building undertaken by Tenant as permitted under the provisions
hereof) upon the written request of Landlord, by written
agreement of Landlord and Tenant, or if they cannot agree within
thirty (30) days of such request, by one of the insurers, or at
the option of Landlord, by an appraiser, architect or contractor
who shall be mutually and reasonably acceptable to Landlord and
Tenant. A copy of any such determination shall promptly be sent
to Tenant upon receipt thereof by Landlord and subject to
approval by Landlord, which approval shall not be unreasonably
withheld, and the insurance maintained in this Section shall be
adjusted to one hundred percent (100%) of the new full
replacement cost. Tenant shall provide to Landlord written
evidence, satisfactory to Landlord, of the insurance required
under this Section.
7.02 In addition to the insurance specified in Section
7.01 hereof, Tenant, at its sole cost and expense, but for the
mutual benefit of Landlord and Tenant as named insureds as
their interest appears, shall maintain:
(a) Comprehensive general liability insurance and
products liability insurance on an occurrence basis" against
claims for "personal injury", including without limitation,
bodily injury, death or property damage, occurring upon, in or
about the Leased Premises and on, in or about the adjoining
sidewalks, streets, and passageways, such insurance to afford
immediate minimum protection, at the time of the inception of
this Lease, and at all times during the term hereof, to a limit
of not less than Two Million Dollars ($2,000,000) with respect to
damage to property and Five Million Dollars ($5,000,000) with
respect to personal injury or death to any one or more persons.
Such insurance shall also include coverage against liability for
bodily injury or property damage arising out of the use, by or on
behalf of Tenant, or any other person or organization, or any
owned, non-owned, leased or hired automotive equipment in the
conduct of any and all operations called for under this Lease.
(b) Such insurance as shall be required pursuant
to the terms hereof in the event of changes to, or alteration of,
the Building.
(c) Such other insurance (such as earthquake
insurance) and in such amounts, as may from time to time be
reasonably required by Landlord against the same or other
insurable hazards which at the time are commonly insured against
in the case of premises similarly situated, due regard being
given to the height and type of improvements thereon and their
construction, use and occupancy, including without limitation any
insurance which may be required by law.
(d) All policies of insurance provided for in
this Section shall be effected under valid and enforceable
policies, in such forms and amounts as may, from time to time, be
as hereinbefore specified, issued by insurers of recognized
responsibility, with a financial rating of at least an A-V status
as rated in the most recent edition of Best's Insurance Reports,
which are authorized to transact fire and casualty insurance and
liability insurance in the State of Texas, and which have been
approved in writing by Landlord. All such policies shall be
primary over any coverage carried by Landlord. Upon the
execution of this Lease and thereafter not less than fifteen (15)
days prior to the expiration date of each policy furnished
pursuant to this Section the original of each policy required to
be furnished pursuant to this Section (or, with the consent of
Landlord, which consent shall not be unreasonably withheld, in
the case of comprehensive general liability insurance and
products liability insurance, a certificate of the insurer
reasonably satisfactory to Landlord) accompanied by evidence
reasonably satisfactory to Landlord of such payment, shall be
delivered by Tenant to Landlord, except that upon demand of any
Mortgagee of the Leased Premises, such policies of insurance
shall be delivered to the Mortgagee and certified copies of such
policies shall be delivered to Landlord.
7.03 Each policy of insurance procured pursuant to
Section 7.01 and paragraphs b and c of Section 7.02 shall
contain, if obtainable, either (i) a waiver by the insurer of the
right of subrogation against any subtenant for negligence of such
subtenant, or (ii) a statement that the insurance shall not be
invalidated should any insured waive in writing prior to a loss
any or all right of recovery against any party for loss accruing
to the property described in the insurance policy.
7.04 All policies of insurance provided for in Section
7.01 and paragraphs b. and c. of Section 7.02 shall provide for
loss thereunder (i) to be adjusted by and payable to Tenant
with respect to any particular casualty resulting in damage or
destruction not exceeding Twenty-Five Thousand Dollars ($25,000)
in the aggregate, or (ii) with respect to any particular casualty
resulting in damage or destruction exceeding Twenty-Five Thousand
Dollars ($25,000) in the aggregate, to be adjusted by Landlord,
Tenant and any Mortgagee and payable to Landlord or, upon demand
of any Mortgagee to said Mortgagee, to be disbursed by any such
payee as provided in Section 16.02 hereof. Each such policy of
insurance shall include the interest of the Mortgagee, if any, as
provided in Section 7.06.
7.05 Each such policy or certificate therefor issued by
the insurer shall to the extent obtainable contain (i) a
provision that no act or omission of Tenant which would otherwise
result in forfeiture or reduction of the insurance therein
provided shall affect or limit the obligation of the insurance
company so to pay, in accordance with Section 7.04 of this Lease,
the amount of any loss sustained and (ii) an agreement by the
insurer that such policy shall not be cancelled without at least
thirty (30) days prior written notice by registered mail to
Landlord and to any Mortgagee.
7.06 All policies of insurance required to be furnished
by Tenant pursuant to Section 7.01 and paragraphs b and c of
Section 7.02 shall have attached thereto the Lender's Loss
Payable Endorsement, or its equivalent, or a loss payable clause
acceptable to Landlord, for the benefit of any Mortgagee, but the
right of any Mortgagee to the payment of insurance proceeds
shall at all times be subject to the provisions of this Lease
with respect to the application of the proceeds of such
insurance.
7.07 Tenant shall observe and comply with the
requirements of all policies of public liability, products
liability, fire and other policies of insurance at any time in
force with respect to the Building and the Leased Premises and
Tenant shall also perform and satisfy the requirements of the
companies writing such policies so that at all times companies of
good standing satisfactory to Landlord shall be willing to write
or to continue such insurance. Tenant shall, in the event of any
violations or attempted violations of the provisions of this
Section 7.07 by a subtenant (provided that such subtenant has
been approved pursuant to Section 20 hereof), take steps,
immediately upon knowledge of such violation or attempted
violation, to remedy or prevent the same as the case may be.
7.08 Any insurance provided for in this Lease may be
effected by a policy or policies of blanket insurance or may be
continued in such form until otherwise required by Landlord,
provided, however, that the amount of the total insurance
allocated to the Leased Premises shall be such as to furnish in
protection the equivalent of separate policies in the amounts
herein required, and provided further that in all other respects,
any such policy or policies shall comply with the other
provisions of this Lease. In any such case it shall not be
necessary to deliver the original of any such blanket policy to
Landlord, but Tenant shall deliver to Landlord and to any
Mortgagee a certificate or duplicate of such policy in form and
content acceptable to Landlord.
7.09 Tenant shall furnish Landlord annually, or more
often if Landlord shall so request, a certificate signed by an
authorized officer of Tenant containing a detailed list of the
insurance policies then outstanding and in force on the Leased
Premises and stating that such insurance complies with the
requirements of this Lease.
7.10 If any Mortgagee of the Leased Premises requires
Landlord to impound insurance premiums on policies of insurance
provided for in this Section on a periodic basis during the term
of this Lease, Tenant, on notice from Landlord indicating this
requirement, shall pay a sum of money toward its liability under
this Section to Landlord on a periodic basis in accordance with
such Mortgagee's requirements. Landlord shall impound the
insurance premiums received from Tenant in accordance with the
requirements of the Mortgagee.
7.11 The parties release each other, and their
respective authorized representatives, from any claims for damage
to any person or to the Premises and to the fixtures, personal
property, tenant's improvements, and alterations of either
Landlord or Tenant in or on the Premises that are caused by or
result from risks insured against under any insurance policies
carried by the parties and in force at the time of any such
damage. Each party shall cause each insurance policy obtained by
it as provided for in this Section to provide that the insurance
company waives all right of recovery by way of subrogation
against either party in connection with any damage covered by any
policy. Neither party shall be liable to the other for any
damage caused by fire or any of the risks insured against under
any insurance policy required by this lease. If any insurance
policy cannot be obtained with a waiver of subrogation, or is
obtainable only by the payment of an additional premium charge
above that charged by insurance companies issuing policies
without waiver of subrogation, the party undertaking to obtain
the insurance shall notify the other party of this fact. The
other party shall have a period of 10 days after receiving
the notice either to place the insurance with a company that is
reasonably satisfactory to the other party and that will carry
the insurance with a waiver of subrogation, or to agree to pay
the additional premium if such a policy is obtainable at
additional cost. If the insurance cannot be obtained or the
party in whose favor a waiver of subrogation is desired refuses
to pay the additional premium charged, the other party is
relieved of the obligation to obtain a waiver of subrogation
rights with respect to the particular insurance involved.
8. LANDLORD'S RIGHT TO PERFORM TENANT'S COVENANTS.
8.01 If Tenant shall at any time fail to pay any
Imposition or other charge in accordance with Section 5 hereof,
within the time therein permitted or to pay for or maintain any
of the insurance policies provided for in Section 7 hereof,
within the time therein permitted, or to make any other payment
or perform any other act on Tenant's part by this Lease, then
Landlord, after ten (10) days' written notice to Tenant (or, in
case of any emergency, such notice, or without notice, as may be
reasonable under the circumstances) and without waiving or
releasing Tenant from any obligation of Tenant hereunder, may
(but shall not be required to):
(a) pay such Imposition or other charge payable
by Tenant pursuant to the provisions of Section 5 hereof, or
(b) pay for and maintain such insurance policies
provided for in Section 7 hereof, or
(c) make such other payment or perform such other
act on Tenant's part to be made or performed as provided in this
Lease, and may enter upon the Leased Premises for such purpose
and take all such action thereon as may be necessary therefor.
8.02 All sums so paid by Landlord and all costs and
expenses incurred by Landlord in connection with the performance
of any such act (together with interest thereon at the rate of
10% per annum from the respective dates of Landlord's making of
each such payment or incurring of each cost or expenses) shall
constitute additional rent payable by Tenant under this Lease and
shall be paid by Tenant to Landlord on demand. Landlord shall
not be limited in the proof of any damages which Landlord may
claim against Tenant arising out of or by reason of Tenant's
failure to provide and keep in force insurance as aforesaid to
the amount of the insurance premium or premiums not paid or
incurred by Tenant and which would have been payable upon such
insurance, but Landlord shall also be entitled to recover as
damages for such breach, the uninsured amount of any loss (to the
extent of any deficiency in the insurance required by the
provisions of this Lease), damages, costs and expenses of suit,
including attorneys' fees, suffered or incurred by reason of
damage to, or destruction of, the Leased Premises, occurring
during any period which Tenant shall have failed or neglected to
provide insurance as aforesaid.
9. USE OF LEASED PREMISES.
9.01 Tenant may use the Leased Premises for the
operation of a food processing facility and/or warehouse and
those activities reasonably related thereto and for no other uses
without Landlord's consent. Notwithstanding the foregoing,
Landlord agrees that Tenant may, with Landlord's written consent,
which shall not be unreasonably withheld, cause the Leased
Premises to be used for any lawful purpose ("Alternative
Permitted Use"), provided that as a condition precedent to
permitting such change in use, Landlord may require the execution
by Tenant of any reasonable amendments to this Lease which
amendments relate to the use of the Leased Premises for the
Alternative Permitted Use.
9.02 Tenant covenants and agrees that it will keep the
Premises in a neat, clean and orderly condition. Tenant agrees
that all trash and rubbish of Tenant shall only be deposited
within city-approved receptacles and that there shall be no other
trash receptacles permitted to remain outside of the Building.
Tenant shall cause such receptacles to be emptied and trash
removed at Tenant's sole cost and expense.
9.03 In the use and occupation of the Leased Premises
and the conduct of such business thereon, Tenant, at its sole
cost and expense, shall promptly comply with all present and
future laws, ordinances, orders, rules, regulations and
requirements of all federal, state and municipal governments,
courts, departments, commissions, boards, and officers, any
national or local Board of Fire Underwriters, or any other body
exercising functions similar to those of any of the foregoing,
foreseen or unforeseen, ordinary as well as extraordinary, which
may be applicable to the Leased Premises and the sidewalks and
curbs and vaults adjoining the Leased Premises as a direct result
of the use or manner of use to which the same is put by Tenant or
other occupants thereof, whether or not such law, ordinance,
order, rule, regulation or requirement shall necessitate
structural changes or improvements, or the removal of any
encroachments or projections, ornamental, structural or
otherwise, onto or over the streets adjacent to the Leased
Premises, or onto or over other property contiguous or adjacent
thereto. Tenant shall not cause or maintain any nuisance on the
Leased Premises.
9.04 Tenant shall have the right to contest by
appropriate proceedings diligently conducted in good faith, in
the name of Tenant or Landlord or both, without cost or expense
to Landlord, the validity or application of any law, ordinance,
order, rule, regulation or requirement of the nature referred to
in this Section. If compliance with any such law, ordinance,
order, rule, regulation or requirement may legally be delayed
pending the prosecution of any such proceeding without the
incurrence of any lien, charge or liability of any kind against
the Leased Premises or Tenant's interest therein and without
subjecting Tenant or Landlord to any liability, civil or
criminal, for failure so to comply therewith, Tenant may delay
compliance therewith until the final determination of such
proceeding. Even if such lien, charge or civil liability would
be incurred by reason of any such delay, Tenant may, with the
prior written consent of Landlord, contest as aforesaid and delay
as aforesaid, provided that such contest or delay does not
subject Landlord to criminal liability, damages or expense and
provided that Tenant (i) furnishes to Landlord security,
reasonably satisfactory to Landlord, against any loss or injury
by reason of such contest or delay, and (ii) prosecutes the
contest with due diligence.
Landlord shall not be required to join in any proceedings
referred to in this Section unless the provisions of any
applicable law, rule or regulations at the time in effect shall
require that such proceedings be brought by and/or in the name of
Landlord, in which event Landlord shall join in the proceedings
or permit the same to be brought in its name if Tenant shall pay
all expenses in connection therewith.
10. MECHANICS' LIENS.
10.01 During the term of this Lease, Tenant shall
not permit to remain, and shall promptly discharge, at its cost
and expense, all liens, encumbrances and charges (other than
liens, encumbrances and charges created by Landlord, or arising
solely out of any action of Landlord) upon the Building or the
Leased Premises or any part thereof; provided, that the existence
of any mechanics', laborers', materialmens', suppliers' or
vendors' liens or rights thereto shall not constitute a violation
of this Section if payment is not yet due under the contract
which is the foundation thereof and if such contract does not
postpone payment for more than ninety (90) days after the
performance thereof. Tenant shall, however, have the right to
contest with due diligence the validity or amount of any lien or
claimed lien, if Tenant shall give to Landlord such security
as Landlord may reasonably require to insure payment thereof and
prevent any sale, foreclosure or forfeiture of the Leased
Premises or any portion thereof by reason of such nonpayment. On
final determination of the lien or claim for lien, Tenant shall
immediately pay any judgment rendered with all proper costs and
charges and shall have the lien released or judgment satisfied
at Tenant's own expense, and if Tenant shall fail to do so,
Landlord may at its option pay any such final judgment and clear
the Leased Premises therefrom. If Tenant shall fail to contest
with due diligence the validity or amount of any such lien or
claimed lien, or to give Landlord security as hereinabove
provided, Landlord may, but shall not be required to, contest the
validity or amount of any such lien or claimed lien or settle or
compromise the same without inquiring into the validity of the
claim or the reasonableness of the amount thereof.
10.02 Should any lien be filed against the Leased
Premises or should any action of any character affecting the
title hereto be commenced, Tenant shall give to Landlord written
notice thereof as soon as notice of such lien or action comes to
the knowledge of Tenant.
11. REPAIRS, MAINTENANCE. Tenant covenants and agrees,
throughout the term of this Lease, without cost to Landlord, to
take good care of the Building and the Leased Premises and the
adjacent sidewalks, curbs, roadways, parking areas and fences,
and to keep the same in good order and condition, and shall
promptly at Tenant's own costs and expense, make all necessary
repairs, interior and exterior, structural and nonstructural,
ordinary as well as extraordinary, foreseen as well as
unforeseen, to keep the Building and the Leased Premises in
first-class, safe, clean and sanitary condition. When used in
this Section, the terms "repairs" shall include replacements or
renewals when necessary, and all such repairs made by Tenant
shall be at least equal in quality and class to the original
work. Notwithstanding the forgoing, in the event that Tenant
makes any structural repairs or replacements (but not any other
repairs or replacements or the construction of new improvements)
which will have a useful life extending past the termination date
of this Lease (including any renewal term, without regard to
whether the option to renew the Lease has been or is exercised),
the cost and expense of such structural repairs shall be prorated
between Landlord and Tenant based upon the useful life of such
repair and the period remaining on the term of this Lease
(including any renewal term); provided, however, that Landlord
shall approve the cost and expense of any such structural repair
prior to the performance thereof, and provided further that
Landlord shall determine, in its reasonable discretion, the
proration of such cost and expense between Landlord and Tenant.
Tenant shall keep and maintain all portions of the Building and
the Leased Premises and the sidewalks adjoining same in a clean
and orderly condition, free of accumulation of dirt and rubbish.
Landlord shall have no obligation or responsibility whatsoever to
make any repairs or replacements to the Leased Premises.
12. RIGHT OF LANDLORD TO INSPECT AND REPAIR. Tenant will
permit Landlord and its authorized agents and representatives to
enter the Leased Premises at all reasonable times for the purpose
of (i) inspecting the same and (ii) making any necessary repairs
thereto and performing any other work therein or thereon that may
be necessary by reason of Tenant's failure to make any such
repairs or perform any such other work therein or thereon or
to commence the same within ten (10) days after written notice
from Landlord. Nothing herein shall imply any duty upon the part
of Landlord to perform any such inspections or to do any such
work, and performance of any such work by Landlord shall not
constitute a waiver of Tenant's default in failing to perform the
same. Landlord may, during the progress of such work in or on
the Leased Premises, keep and store therein all necessary
materials, tools, supplies and equipment. Landlord shall not be
liable for inconvenience, annoyance, disturbance, loss of
business or other damage of Tenant by reason of making such
repairs or the performance of any such work, on or account of
bringing materials, tools, supplies or equipment into or through
the Leased Premises during the course thereof and the obligations
of Tenant under this Lease shall not be affected thereby;
provided, however, that Landlord shall make reasonable efforts
not to interfere with the operations of Tenant's business in the
making of such repairs or the performance of any such work.
Nothing herein shall limit the provisions of Section 8 hereof.
13. INDEMNIFICATION BY TENANT.
13.01 Tenant agrees to indemnify and save harmless
Landlord and its affiliated companies and their agents, servants,
directors, officers, and employees (collectively "Indemnitees")
from and against any and all liabilities, damages, claims, suits,
costs (including court costs, attorneys' fees, and costs of
investigation), and actions of any kind arising or alleged to
arise by reason of injury to or death of any person or damage to
or loss of property occurring on, in, or about the Leased
Premises or by reason of any other claim whatsoever of any person
or party occasioned or alleged to be occasioned in whole or in
part by any act or omission on the part of Tenant or any invitee,
licensee, employee, director, officer, servant, contractor,
subcontractor or tenant of Tenant, or by any breach, violation,
or nonperformance of any covenant of Tenant under this Lease,
even if such liability, claims, suits, costs, injuries, deaths or
damages arise from or are attributed to the concurrent negligence
of any Indemnitee. Tenant further agrees to indemnify and save
Landlord harmless against and from any and all claims by or on
behalf of any person or persons, firm or firms, corporation or
corporations, arising during the term of this Lease from any
condition of the Building, or any other structure or improvement
on the Leased Premises or any street, curb or sidewalk adjoining
the Leased Premises, or of any passageways or spaces therein or
appurtenant thereto, or arising from any breach or default on the
part of Tenant in the performance of any covenant or agreement on
the part of Tenant to be performed pursuant to the terms of this
Lease. If any action or proceeding shall be brought by or
against any Indemnitee in connection with any such liability or
claim, Tenant, on notice from Landlord, shall defend such action
or proceeding, at Tenant's expense, by or through attorneys
reasonably satisfactory to Landlord. The provisions of this
Section shall apply to all activities of Tenant with respect to
the Leased Premises or Building, whether occurring before or
after the termination of this Lease (but not occurring prior to
the Commencement Date). Tenant's obligations under this
Paragraph shall not be limited to the limits or coverage of
insurance maintained or required to be maintained by Tenant under
this Lease.
13.02 No Indemnitee shall be liable in any manner to
Tenant or any other party for any injury to or death of persons
unless caused solely by the willful misconduct or gross
negligence of an Indemnitee. In no event shall any indemnitee be
liable in any manner to Tenant or any other party as the result
of the acts or omissions of Tenant, its agents, employees,
contractors or any other tenant of the Building. All personal
property upon the Leased Premises shall be at the risk
of the Tenant only and no Indemnitees shall be liable for any
loss of or damage to property of Tenant, its employees, agents,
customers, invitees, or to others, regardless of whether such
property is entrusted to employees of the Building, or such loss
or damage is occasioned by casualty, theft, or any other cause of
whatsoever nature, whether or not due in whole or in part to the
negligence of any Indemnitee.
14. LIGHT, HEAT AND POWER. Tenant agrees to pay, or cause
to be paid, all charges which are incurred by Tenant or which
might be a charge or lien against the Leased Premises, for gas,
water, electricity, light, heat or power, telephone or other
communication service used, rendered or supplied upon or in
connection with the Leased Premises, throughout the term of this
Lease, and to indemnify and save Landlord harmless from and
against any liability or damages on such account. Tenant shall
also procure, or cause to be procured, without cost to Landlord,
any and all necessary permits, licenses or other authorizations
required for the lawful and proper installation and maintenance
upon the Leased Premises of wires, pipes, conduits, tubes and
other equipment and appliances for use in supplying any such
service to and upon the Leased Premises.
15. ALTERATIONS. Tenant shall have the right at any time
and from time to time during the term of this Lease to make, at
its sole cost and expense, changes and alterations in, to or of
the Building, subject, however, in all cases to the following
which Tenant covenants to observe and perform:
(a) No change or alteration involving in the aggregate
a cost of more than Twenty-Five Thousand Dollars ($25,000) shall
be undertaken without the prior written consent of Landlord, and
until plans and specifications have first been submitted to and
approved in writing by Landlord and Landlord shall have been
given the opportunity to go into the Leased Premises to post
notice of non-responsibility and record verified copies thereof
in connection with such changes and alterations.
(b) No change or alteration involving removal of any
part of any load-bearing wall, column, girder or other support of
the Building (herein referred to as a "structural change or
alteration") or any change or alteration in connection with any
restoration required by Section 16 hereof shall be made without
the prior written consent of Landlord. Every structural change
or alteration shall be constructed under the supervision of a
licensed architect or a trained professional engineer selected by
Tenant and approved in writing by Landlord, and no such
structural change or alteration shall be made except in
accordance with plans and specifications and cost estimates
prepared and approved in writing by such architect or engineer
and approved in writing by Landlord.
(c) No change or alteration of any type shall be
undertaken until Tenant shall have procured and paid for, so far
as the same may be required from time to time, all permits and
authorizations of any federal, state or municipal government or
departments or subdivisions of any of them, having jurisdiction.
Landlord shall join in the application for such permits or
authorizations whenever such action is necessary, provided,
however, that Landlord shall incur no liability or expense in
connection therewith. Any change or alteration shall be made
promptly and in a good and workmanlike manner and in accordance
with all applicable permits and authorizations and building and
zoning laws and with all other laws, ordinances, orders, rules,
regulations and requirements of all federal, state and municipal
governments, any national or local Board of Fire Underwriters, or
any other body hereafter exercising functions similar to those of
any of the foregoing.
(d) Any change or alteration shall, when completed, be
of such a character as not to materially reduce the value and
usefulness of the Building below its value and usefulness
immediately before such change or alteration.
(e) During the period of construction of any change or
alteration to or of the Building, Tenant shall maintain or cause
to be maintained the following insurance:
(i) The comprehensive general liability and
property damage insurance provided for in subparagraph a of
Section 7.02 shall be maintained for the limits specified
thereunder and shall provide coverage for the mutual benefit of
Landlord and Tenant as named insureds in connection with any
change or alteration permitted pursuant to this Section 15.
(ii) Fire and any other applicable insurance
provided for in Section 7 which policy or policies by endorsement
thereto, if not then covered under the provisions thereof,
shall also insure any change or alteration, including all
materials and equipment therefor incorporated in, on or about the
Leased Premises (including excavations, foundations, and
footings) under a broad form all risks builder's risk completed
value form or equivalent thereof; and
(iii) Worker's compensation insurance covering
all persons employed in connection with the work and with respect
to whom death or bodily injury claims could be asserted against
Landlord, Tenant or the Leased Premises, with statutory limits as
then required under the laws of the State of Texas.
The provisions of all applicable sections of Section 7 of
this Lease shall apply to all insurance provided for in this
section.
(f) Landlord hereby approves, subject to the approval
of the Agent (as defined in that certain Purchase Agreement by
and among KPR Holdings, Inc., and the Shareholders of RKR-GP,
Inc., and Foodbrands America, Inc., dated as of November 14, 1995
["Purchase Agreement"]) the performance of the work required to
be performed to make the capital improvements required to be made
by Section 2.07(d) of the Purchase Agreement.
16. DESTRUCTION AND RESTORATION.
16.01 Subject to the provisions of Section 16.04
hereof, in case of damage to or destruction of the Building or
any part thereof by fire or other cause, Tenant, at Tenant's sole
cost and expense, whether or not the insurance proceeds, if any,
shall be sufficient for the purpose, and irrespective of the
amount of any loss, shall restore the same as nearly as possible
to their value, condition and character immediately prior to such
damage or destruction, if the restoration can be made under
existing laws and can be completed within two (2) years after the
date of destruction. Such restoration shall be commenced with
due diligence and in good faith, and prosecuted with due
diligence and in good faith, unavoidable delays excepted.
In case of damage to or destruction of the Building by fire
or other cause resulting in a loss exceeding in the aggregate of
Ten Thousand Dollars ($10,000), Tenant shall promptly give
written notice thereof to Landlord.
16.02 All insurance money paid as provided in
Section 7.04 hereof, on account of any damage or destruction,
less the actual cost, fees and expenses, if any, incurred by
Landlord or any Mortgagee in connection with the adjustment of
the loss, which costs, fees and expenses shall be paid to
Landlord or any Mortgagee shall be applied, subject to the terms
of any mortgage, to the payment of the cost of the aforesaid
restoration, repairs, replacement, rebuilding or alterations,
including the cost or demolition and temporary repairs and for
the protection of property pending the completion of permanent
restoration, repairs, replacements, rebuilding or alterations
(all of which temporary repairs, protection of property and
permanent restoration, repairs, replacement, rebuilding or
alterations are hereinafter collectively referred to as the
"restoration"); and shall be paid out from time to time to Tenant
or in accordance with its directions, as such restoration
progresses upon the written approval of Landlord and the written
request of Tenant which shall be accompanied by the following:
(a) A certificate signed by Tenant, dated no more than
thirty days prior to such request, setting forth the following:
(i) That the sum then requested either has been
paid by Tenant, or is justly due to contractors, subcontractors,
materialmen, engineers, architects or other persons who
have rendered services or furnished materials for the restoration
therein specified, the names and addresses of such persons, a
brief description of such services and materials, the several
amounts so paid or due to each of said persons in respect
thereof, that no part of such expenditures has been or is being
made the basis in any previous or then pending request for the
withdrawal of insurance money or has been made out of the
proceeds of insurance received by Tenant, and that the sum then
requested does not exceed the value of the services and materials
described in the certificate.
(ii) That, except for the amount, if any, stated
in such certificate to be due for services or materials and
except for any amount to be withheld pursuant to a directly
related construction contract, there is no outstanding
indebtedness known to Tenant, after due inquiry, which is due and
payable for labor, wages, materials, supplies or services in
connection with such restoration which, if unpaid, might become
the basis of a vendor's, mechanic's, laborer's or materialman's
statutory or similar lien upon such restoration or upon the
Leased Premises or any part thereof.
(iii) That the cost, as estimated by Tenant,
of the restoration required to be done subsequent to the date of
such certificate in order to complete the same, does not exceed
the insurance money, plus any amount deposited by Tenant to
defray such cost and remaining in the hands of the recipient
designated in Section 7.04 hereof after payment of the sum
requested in such certificates.
(b) Evidence reasonably satisfactory to Landlord, to
the effect that there has not been filed with respect to the
Leased Premises or any part thereof any vendor's, mechanic's,
laborer's, materialman's or other similar lien, which has not
been discharged of record, except such as will be discharged by
payment of the amount then requested, and to the effect that
there has not been filed with respect to the Leased Premises any
federal tax or revenue lien, provided, however, that no such
evidence shall be required with respect to any such lien which
Tenant is disputing in accordance with the provisions of Section
10.01 hereof.
(c) Whenever such restoration shall involve the
construction of any foundation wall or any building wall,
evidence, during the course of such construction by survey and a
survey reading thereon, made by a duly licensed surveyor, that,
other than as approved by Landlord, there are, as a result of
such construction, no encroachments on adjoining property, no
encroachments on any street, alley or avenue or easement for
light and air, and no physical conditions that would render title
to the Leased Premises unmarketable.
Upon compliance with the foregoing provisions of this
Section 16.02 out of such insurance money there shall be paid to
Tenant or the persons named in such certificate the respective
amounts stated therein to have been paid by Tenant or to be due
to them, as the case may be.
If the insurance money at the time held by the recipient
designated by Section 7.04 hereof, less the actual cost, fees and
expenses, if any, incurred by Landlord in connection with the
adjustment of the loss, shall be insufficient in the judgment of
Landlord to pay the entire cost of such restoration, Tenant shall
pay the deficiency to said recipient, prior to commencement or
continuation of construction.
Upon the receipt by said recipient of satisfactory evidence,
of the character required by the foregoing provisions of this
Section 16.02, that the restoration has fully been completed and
paid for in full and that there are no liens of the character
referred to therein, and there is no default under the terms,
conditions, covenants and agreements of this Lease which can be
cured by the payment of money nor any default hereunder which has
become an event of default, any balance of the insurance money at
the time held by said recipient shall be paid to Tenant, unless
such balance shall be due any Mortgagee under any mortgage or
deed of trust.
16.03 Except as otherwise expressly provided in
Section 16.04 hereof and subject to the limitations of applicable
law, no destruction of, or damage to the Building or the Leased
Premises or any part thereof by fire or any other cause shall
permit Tenant to surrender this Lease or shall relieve Tenant
from its obligations to pay the full base rent and additional
rent payable under this Lease or from any of its other
obligations under this Lease, and Tenant waives any rights now or
hereafter conferred upon it by statute or otherwise to quit or
surrender this Lease or the Leased Premises or any suspension,
diminution, abatement or reduction of rent on account of any such
destruction or damage.
16.04 Anything contained in this Section to the
contrary notwithstanding, if at any time during the last year of
the initial term or any renewal term of this Lease any part of
the Building shall be damaged or destroyed by fire or other
casualty, act of god or other causes beyond the reasonable
control of Tenant to such an extent that said damage or
destruction cannot be repaired within one hundred twenty (120)
days, and provided Tenant is not in default under its obligations
set forth in Section 7 hereof, Tenant may, at its option,
terminate this Lease within thirty (30) days after a
determination of the existence of said right of termination.
Tenant may exercise its option to terminate this Lease under this
Section by serving upon Landlord at any time within said thirty
(30) day period a thirty (30) day written notice of Tenant's
election to so terminate, without any liability on the part of
Tenant to Landlord, except for the payment of base rent and all
additional sums required to be paid by Tenant under the terms of
this Lease up to the date of such termination and if requested in
writing by Landlord, full performance by Tenant, at its sole cost
and expense, of the work of demolition and removal of the
remaining portions of the Building so damaged or destroyed and
removal of all debris from the Land, provided, however, that
insurance money paid as provided in Sections 7.04 and 16.02
hereof shall be applied, to the extent such funds are available
for demolition and removal, to payment of the cost of such
demolition and removal.
In the event this Lease shall be terminated pursuant to the
provisions of this Section, any insurance proceeds payable in
connection with demolition and removal as set forth in the
previous paragraph of this Section shall be payable solely to
Landlord or to any Mortgagee.
17. SALE OR ASSIGNMENT OF LANDLORD'S INTEREST. Landlord
shall have the right at any time and from time to time during the
term hereof, to sell or assign to any person all or any portion
of its fee interest in the Leased Premises or any portion
thereof, subject, however, to the leasehold estate of Tenant
created hereby.
18. CONDEMNATION. If, at any time during the term of this
Lease, or any extension thereof, the whole of the Leased
Premises, or a substantial portion thereof, shall be taken by
exercise of the power of eminent domain, or by sale in lieu
thereof, for any public or quasi-public use, this Lease shall
terminate and expire on the date of transfer of possession to the
taking authority and all rights of Tenant hereunder shall
immediately cease and terminate. All rent, taxes and other
charges payable hereunder shall be apportioned and paid at the
time of such termination. For the purposes of this Section 18, a
"substantial portion" of the Leased Premises shall be deemed to
have been taken if the untaken portion cannot be reasonably
economically used or converted for Tenant's use as permitted by
this Lease. In the event of such taking and the termination of
this Lease, Tenant shall receive compensation only for the taking
and damages of Tenant's personal property and trade fixtures in,
on or about the Leased Premises, if any there are, and the costs
of removing and/or moving the same and/or such other compensation
as is allowable by law to a tenant; provided, however, that
notwithstanding anything herein contained, Landlord's
compensation for the full fair market value of any and all land
and improvements taken and/or damaged by reason of the severance
thereof shall not be reduced or diminished in any event by reason
of any compensation or damages which otherwise might be paid to
Tenant. In the event that a portion of the Leased Premises less
than a "substantial portion" as defined above be taken by the
exercise of the power of eminent domain, or by sale in lieu
thereof, this Lease shall not be terminated but shall continue in
force and effect with no reduction in rental.
19. DEFAULT.
19.01 The occurrence of any of the following events
shall constitute a default and breach of this Lease by Tenant:
(a) Any failure by Tenant timely to pay the
rental or to make any other payment required to be made by Tenant
hereunder, where such failure continues for ten (10) days after
written notice thereof by Landlord to Tenant.
(b) [RESERVED]
(c) A failure by Tenant to observe and perform
any other provision of this Lease to be observed or performed by
Tenant, where such failure continues for thirty (30) days after
written notice thereof by Landlord to Tenant; provided, further,
that if the nature of such default is such that the same cannot
reasonably be cured within such thirty-day period, Tenant shall
not be deemed to be in default if Tenant shall within such period
commence such cure and thereafter diligently prosecute the same
to completion.
(d) The making by Tenant of any general
assignment for the benefit of creditors; the filing by or against
a Tenant of a petition to have Tenant adjudged a bankrupt or of
a petition for reorganization or arrangement under any law
relating to bankruptcy where possession is not restored to Tenant
within thirty (30) days; or the attachment, execution or other
judicial seizure of substantially all of Tenant's assets located
at the Leased Premises or of Tenant's interest in this Lease,
where such seizure is not discharged within thirty (30) days.
19.02 In the event of any such default by Tenant,
Landlord shall have the immediate option to terminate this Lease
and all rights of Tenant hereunder by giving written notice of
such intention to terminate in the manner specified herein. In
the event that Landlord shall elect to so terminate this Lease
then Landlord may recover from Tenant:
(a) The worth at the time of award of any unpaid
rent which had been earned at the time of such termination; plus
(b) The worth at the time of award of the amount
by which the unpaid rent which would have been earned after
termination until the time of award exceeds the amount of such
rental loss Tenant proves could have been reasonably avoided;
plus
(c) The worth at the time of award of the amount
by which the unpaid rent for the balance of the term after the
time of award exceeds the amount of such rental loss that
Tenant proves could be reasonably avoided; plus
(d) Any other amount necessary to compensate
Landlord for all the detriment proximately caused by Tenant's
failure to perform his obligations under this Lease or which in
the ordinary course of events would be likely to result
therefrom; plus
(e) Such other amounts in addition to or in lieu
of the foregoing in as may be permitted from time to time by
applicable Texas law.
As used above, the "worth at the time of award" is computed
by allowing interest at the rate of 10% per annum.
19.03 In the event of any such default by Tenant,
Landlord shall also have the right, with or without terminating
this Lease, to reenter the Leased Premises and remove all
persons and property, or any portion thereof, from the Leased
Premises; such property may be removed and stored in a public
warehouse or elsewhere at the cost of and for the account of
Tenant. Under no circumstances shall Landlord be held liable in
damages or otherwise by reason of any such re-entry or eviction
or by reason of the exercise by Landlord of any other remedy
provided in this Section. All property of Tenant which is stored
by Landlord pursuant hereto may be redeemed by Tenant within
thirty (30) days after Landlord takes possession thereof upon
payment to Landlord in full of all obligations then due from
Tenant to Landlord hereunder and of all costs incurred by
Landlord in providing such storage. If Tenant fails so to redeem
such property within said thirty (30) day period, Landlord may
sell such property in any reasonable manner, and shall apply the
proceeds of such sale actually collected first against the costs
of storage and sale and then against any other obligation due
from Tenant hereunder.
19.04 In the event of the vacation or abandonment
of the Leased Premises by Tenant or in the event that Landlord
shall elect to reenter as provided in Section 19.03 above or
shall take possession of the Leased Premises pursuant to legal
proceeding or pursuant to any notice provided by law, then if
Landlord does not elect to terminate this Lease as provided in
Section 19.02 above, then Landlord may from time to time, without
terminating this Lease, either recover all rental as it becomes
due or relet the Leased Premises or any part thereof for such
terms and conditions as Landlord in its sole discretion may deem
advisable with the right to make alterations and repairs to the
Leased Premises. Notwithstanding anything to the contrary
contained herein, it is expressly understood and agreed that
Landlord shall have no obligation to relet the Premises.
In the event that Landlord shall elect to so relet,
then rentals received by Landlord from such reletting shall be
applied: first, to the payment of any indebtedness other than
rent due hereunder from Tenant to Landlord; second, to the
payment of any cost of such reletting; third, to the payment of
the cost of any alterations and repairs to the Leased Premises;
fourth, to the payment of rent due and unpaid hereunder; and the
residue, if any, shall be held by Landlord and applied in payment
of future rent as the same may become due and payable hereunder.
Should the amount of rental received from such reletting during
any month which is applied to the payment of rent hereunder be
less than that agreed to be paid during that month by Tenant
hereunder, then Tenant shall pay such deficiency to Landlord
immediately upon demand therefor by Landlord. Such deficiency
shall be calculated and paid monthly. Tenant shall also pay to
Landlord, as soon as ascertained, any costs and expenses incurred
by Landlord in such reletting or in making such alterations and
repairs not covered by the rentals received from such reletting.
19.05 No reentry or taking possession of the Leased
Premises by Landlord pursuant to Sections 19.03 or 19.04 of this
Section shall be construed as an election to terminate this Lease
unless a written notice of such intention be given to Tenant or
unless the termination thereof be decreed by a court of competent
jurisdiction. Notwithstanding any reletting without termination
by Landlord because of any default by Tenant, Landlord may at any
time after such reletting elect to terminate this Lease for any
such default.
19.06 In the event of default by Tenant, Landlord
shall have the right to change the locks to the Premises and to
prevent Tenant's entry to the Premises in accordance with the
provisions of Section 92.003 of the Texas Property Code as the
same may be amended from time to time.
19.07 Landlord shall be under no obligation to
observe or perform any covenant of this Lease on its part to be
observed or performed which accrues after the date of any default
by Tenant hereunder.
19.08 Any legal action by Landlord to enforce any
obligation of Tenant or in pursuance of any remedy hereunder
shall be deemed timely filed if commenced at any time prior
to one (1) year after the expiration of the term of this Lease or
prior to four (4) years after the cause of action accrues,
whichever period expires later.
19.09 In any action of unlawful detainer commenced
by Landlord against Tenant by reason of any default hereunder,
the reasonable rental value of the Leased Premises for the
period of the unlawful detainer shall be deemed to be the greater
of the amount of rent and additional charges reserved in this
Lease for such period or the comparable period of the preceding
year, unless Landlord or Tenant shall prove to the contrary by
competent evidence.
19.10 Tenant hereby waives any right of redemption
or relief from forfeiture under any present or future law, in the
event Tenant is evicted or Landlord takes possession of the
Premises by reason of any default by Tenant hereunder.
19.11 The various rights and remedies reserved to
Landlord herein, including those not specifically described
herein, shall be cumulative, and, except as otherwise provided by
Texas statutory law in force and effect at the time of the
execution hereof, Landlord may pursue any or all of such rights
and remedies, whether at the same time or otherwise.
19.12 No delay or omission of Landlord to exercise
any right or remedy shall be construed as a waiver of any such
right or remedy or of any default by Tenant hereunder.
19.13 A failure by Landlord to observe and perform
any provision of this Lease to be observed or performed by
Landlord, if such failure continues for thirty (30) days after
written notice thereof by the Tenant to Landlord, shall
constitute a default by Landlord; provided, however, that if the
nature of such default is such that the same cannot be reasonably
be cured within such thirty (30) day period, Landlord shall not
be deemed to be in default if Landlord shall within such time
period commence such a cure and thereafter diligently prosecute
the same to completion.
20. ASSIGNMENTS.
20.01 Tenant shall not, either voluntarily or by
operation of law, assign, sell, encumber, pledge or otherwise
transfer all or any part of Tenant's leasehold estate hereunder,
or permit the Leased Premises to be occupied as work space,
storage space, concession or otherwise by anyone other than
Tenant or Tenant's employees, or sublet the Leased Premises or
any portion thereof, without Landlord's prior written consent in
each instance, which consent shall not be unreasonably withheld.
Any such sale, assignment, hypothecation or other transfer or
subletting shall be subject in each instance to the provisions
contained in Section 20.04. Landlord shall have the right to
withhold consent, if reasonable, or to grant consent, based on
the following factors: (i) the business of the proposed assignee
or subtenant and the proposed use of the Lease Premises;
(ii) the net worth and reputation of the proposed assignee or
subtenant; (iii) Tenant's compliance with all of his obligations
under this Lease; (iv) such other factors as Landlord may
reasonably deem relevant. The consent by Landlord to an
assignment or subletting shall not be construed as relieving
Tenant or any assignee of this Lease or subtenant of the Leased
Premises from obtaining the express written consent of Landlord
to any further assignment or subletting or as releasing
Tenant or any assignee or subtenant of Tenant from any liability
or obligation hereunder whether or not accrued. This Section 20
shall be fully applicable to all further sales, hypothecation,
transfers, assignments and subleases of the Leased Premises, or
any portion thereof, by any successor or assignee of Tenant, or
any subtenant of the Leased Premises. If Tenant is a corporation
which, under the then current guidelines published by the
Commissioner of Corporations of the State of Texas, is not deemed
a public corporation, or is an unincorporated association,
partnership or trust, the transfer, assignment or hypothecation
of any stock or interest in such corporation, association,
partnership or trust in the aggregate in excess of twenty-five
percent (25%) shall be deemed an assignment within the meaning
and provisions of this Section 20. Tenant agrees to reimburse
Landlord for Landlord's reasonable costs and attorneys' fees
incurred in connection with the processing and documentation of
any such requested assignment, subletting, transfer, change of
ownership or hypothecation of this Lease or Tenant's interest in
and to the Leased Premises. Tenant shall not transfer, assign,
mortgage or hypothecate this Lease, or any interest therein, or
permit the use of the Leased Premises by any person or persons
other than Tenant, or sublet the Leased Premises, or any part
thereof, without the prior written consent of Landlord, which
consent will not be unreasonably withheld.
20.02 This prohibition against assigning or
subletting shall be construed to include a prohibition against
any assignment or subletting by operation of law, which term as
used herein shall include, without limiting the generality of the
foregoing, each of the following acts:
(a) The transfer of this Lease, or any interest
of Tenant therein by testacy or intestacy, excepting Tenant's
children or spouse.
(b) If Tenant is or becomes bankrupt or
insolvent, makes an assignment for the benefit of creditors, or
institutes a proceeding under the Bankruptcy Act in which Tenant
is the bankrupt, or if Tenant is a partnership or consists of
more than one person or entity, if any partner of the partnership
or other person or entity is or becomes bankrupt or insolvent, or
makes an assignment for the benefit of creditors.
(c) If a writ of attachment or execution is
levied on this Lease.
(d) If, in any proceeding or action to which
Tenant is a party, a receiver is appointed with authority to take
possession of the Leased Premises.
An assignment or subletting by operation of law shall
constitute a default by Tenant and Landlord shall have the right
to elect to terminate this Lease, in which case this Lease shall
not be treated as an asset of Tenant.
If a writ of attachment or execution is levied on this
Lease, Tenant shall have fifteen (15) days in which to cause the
attachment or execution to be removed. If any involuntary
proceeding in bankruptcy is brought against Tenant, or if a
receiver is appointed, Tenant shall have sixty (60) days in which
to have the involuntary proceeding dismissed or the receiver
removed.
20.03 If Tenant desires at any time to assign,
hypothecate or otherwise transfer this Lease or to sublet the
Leased Premises or any portion thereof, then at least forty-five
(45) days, but not more than ninety (90) days, prior to the date
when Tenant desires the assignment or sublease to be effective
(the "Assignment Date"), Tenant shall give Landlord a notice (the
"Assignment Notice") which shall set forth (i) the name, address
and business of the proposed subtenant or assignee; (ii)
information (including references) concerning the character of
the proposed subtenant or assignee, the Assignment Date, any
ownership or commercial relationship between Tenant and the
proposed subtenant or assignee; (iii) the consideration and all
other material terms and provisions of the proposed sublease or
assignment; and (iv) such reasonable information as Landlord may
request concerning the financial condition, business background
and qualifications of the proposed subtenant or assignee, all in
such detail as Landlord shall reasonably require. If Landlord
reasonably requests additional detail, the Assignment Notice
shall not be deemed to have been received until Landlord receives
such additional detail and Landlord may reasonably withhold
consent to any assignment or sublease until such information is
provided to Landlord.
20.04 If Tenant assigns or subleases, the following
shall apply:
(a) Tenant shall pay to Landlord as additional
rent under the Lease the Landlord's Share (as defined below) of
the Profit (as defined below) on such transaction as and when
received by Tenant, unless Landlord gives written notice to
Tenant and the assignee or subtenant that Landlord's Share shall
be paid by the assignee or subtenant to Landlord directly.
As used herein, the term "Profit" means (A) all amounts paid to
Tenant for such assignment or sublease, including, without
limitation, monthly rent in excess of the monthly rent payable
under the Lease, and all fees and other consideration paid for
the assignment or sublease, including fees under any collateral
agreements, but excluding any amounts paid to Tenant for
goodwill, fixtures or sale of the business, less (B) reasonable
costs and expenses directly incurred by Tenant in connection with
the execution and performance of such assignment or sublease,
real estate broker's commissions and costs of renovation or
construction of tenant improvements required under such
assignment or sublease. All such costs and expenses shall be
confirmed in writing, and no payments made by Tenant to any
person or entity related to Tenant shall be allowed as a cost and
expense in determining the "Profit" on such transaction. Tenant
is entitled to recover such costs and expenses before Tenant is
obligated to pay the Landlord's Share to Landlord. The
Profit in the case of a sublease of less than all the Leased
Premises is the rent allocable to the subleased space as a
percentage on a square footage basis. The "Landlord's Share"
shall equal fifty percent (50%).
(b) Tenant shall provide Landlord a written
statement certifying all amounts to be paid from any assignment
or sublease of the Property within thirty (30) days after
the transaction documentation is signed, and Landlord may inspect
Tenant's books and records to verify the accuracy of such
statement. On written request, Tenant shall promptly furnish to
Landlord copies of all the transaction documentation, all of
which shall be certified by Tenant to be complete, true and
correct. Landlord's receipt of Landlord's Share shall not be
consent to any further assignment or subletting. The breach of
Tenant's obligation under this Section 20.04 shall be a material
default of the Lease.
20.05 No assignment or sublease of all or any
portion of the Leased Premises shall affect or reduce any
obligations of Tenant or rights of Landlord hereunder, and all
obligations of Tenant hereunder shall continue in full force and
effect as the obligations of a principal and not of a guarantor
or surety, to the same extent as though no assignment or
subletting had been made.
20.06 Neither this Lease nor the Leased Premises
hereby demised shall be mortgaged by Tenant, nor shall Tenant
mortgage or pledge the interest of Tenant in and to any
sublease of the Leased Premises or the rent payable thereunder.
20.07 Any transfer of this Lease from the Tenant by
merger, consolidation, transfer of assets, dissolution, or
liquidation shall constitute an assignment for purposes of this
Lease.
20.08 Any sale, assignment, hypothecation or
transfer of this Lease or subletting of the Leased Premises that
is not in substantial compliance with the provisions of this
Section 20 shall be void and shall, at the option of Landlord,
terminate this Lease.
20.09 Notwithstanding any provision of this Section
20 to the contrary, Tenant shall have the right, at any time and
from time to time during the term of this Lease, to encumber
its estate in the Leased Premises pursuant to mortgages or deeds
of trust (hereinafter referred to as a "Leasehold Mortgage") in
favor of any life insurance company, bank, or other institutional
lender (hereinafter referred to as a "Leasehold Mortgagee"),
provided that notwithstanding any other form of notice, actual or
constructive, no Leasehold Mortgage shall be binding upon
Landlord in the enforcement of its rights and remedies herein and
by law provided unless and until a copy thereof shall have been
delivered to Landlord. Landlord and Tenant agree that so long as
such Leasehold Mortgage is a lien on Tenant's estate in the
Leased Premises, such Leasehold Mortgagee shall have all of the
rights set forth in this Section.
(a) If Tenant shall have delivered to Landlord
prior written notice of the address of any Leasehold Mortgagee,
Landlord will mail to the Leasehold Mortgagee a copy of any
notice under this Lease at the time of giving such notice to
Tenant, and will give to the Leasehold Mortgagee notice of any
rejection of this Lease by the trustee in bankruptcy of Tenant
or by Tenant as debtor in possession. No termination of this
Lease or termination of Tenant's right of possession of the
Leased Premises or reletting of the Leased Premises by Landlord
predicated on the giving of any notice shall be effective unless
Landlord gives to the Leasehold Mortgagee written notice or a
copy of its notice to Tenant of such default or termination, as
the case may be.
(b) In the event of any default by Tenant under
the provisions of this Lease, the Leasehold Mortgagee will have
the same concurrent grace periods as are given Tenant for
remedying such default or causing it to be remedied, plus, in
each case, an additional period of thirty (30) days after the
expiration thereof or after Landlord has served a notice or a
copy of a notice of default upon the Leasehold Mortgagee,
whichever is later.
(c) In the event that Tenant shall default under
any of the provisions of this Lease, the Leasehold Mortgagee,
without prejudice to its rights against Tenant, shall have the
right to make good such default within the applicable grace
periods provided for in the preceding section of this Section
whether the same consists of the failure to pay rent or the
failure to perform any other matter or thing which Tenant is
hereby required to do or perform, and Landlord shall accept such
performance on the part of the Leasehold Mortgagee as though the
same had been done or performed by Tenant. For such purpose
Landlord and Tenant hereby authorize the Leasehold Mortgagee to
enter upon the Leased Premises and to exercise any of Tenant's
rights and powers under this Lease, and subject to the provisions
of this Lease, under the Leasehold Mortgage.
(d) The term "incurable default" as used herein
means any default which cannot be reasonably cured by a Leasehold
Mortgagee. The term "curable default" means any default under
this Lease which is not an incurable default. In the event of
any curable default under this Lease, and if prior to the
expiration of the applicable grace period specified in Section
20.09(b), the Leasehold Mortgagee shall give Landlord written
notice that it intends to undertake the curing of such default,
or to cause the same to be cured, or to exercise its rights to
acquire the leasehold interest of Tenant by foreclosure or
otherwise, and shall immediately commence and then proceed with
all due diligence to do so, whether by performance on behalf of
Tenant of its obligations under this Lease, or by entry on the
Leased Premises by foreclosure or otherwise, then Landlord will
not terminate or take any action to effect a termination of this
Lease or re-enter, take possession of or relet the Leased
Premises or similarly enforce performance of this Lease so
long as the Leasehold Mortgagee is, with all due diligence and in
good faith, engaged in the curing of such default, or effecting
such foreclosure, provided, however, that the Leasehold
Mortgagee shall not be required to continue such possession or
continue such foreclosure proceedings if such default shall be
cured. Nothing herein shall preclude Landlord from terminating
this Lease with respect to any additional default which shall
occur during the aforesaid period of forbearance and not be
remedied within the period of grace, if any, applicable to any
such additional default.
(e) In the event that this Lease is terminated by
Landlord on account of any incurable default or in the event
Tenant's interest under this Lease shall be sold, assigned or
transferred pursuant to the exercise of any remedy of the
Leasehold Mortgagee, or pursuant to judicial proceedings, and if
(i) no rent or other charges shall then be due and payable by
Tenant under this Lease, and (ii) the Leasehold Mortgagee shall
have arranged to the reasonable satisfaction of Landlord to cure
any curable default of Tenant under this Lease, then Landlord,
within 30 days after receiving a written request therefor, which
shall be given within 60 days after such termination or transfer
and upon payment to it of all expenses, including attorney's
fees, incident thereto, will execute and deliver a new lease of
the Leased Premises to the Leasehold Mortgagee or its nominee or
to the purchaser, assignee or transferee, as the case may be, for
the remainder of the term of this Lease, containing the same
covenants, agreements, terms, provisions and limitations as are
contained herein. Upon the execution and delivery of such new
lease, the new tenant, in its own name or in the name of Landlord
may take all appropriate steps as shall be necessary to remove
Tenant from the Leased Premises, but Landlord shall not be
subject to any liability for the payment of fees, including
reasonable attorney's fees, costs or expenses in connection
therewith; and said new tenant shall pay all such fees, including
attorney's fees, costs and expenses or, on demand, make
reimbursements therefor to Landlord.
(f) In the event a default under the Leasehold
Mortgage shall have occurred, the Leasehold Mortgagee may
exercise, with respect to the Leased Premises, any right,
power or remedy under the Leasehold Mortgage, which is not in
conflict with the provisions of this Lease.
(g) This Lease may be assigned, without the
consent of Landlord, to or by the Leasehold Mortgagee or its
nominee, pursuant to foreclosure or similar proceedings, or
the sale, assignment or other transfer of this Lease in lieu
thereof, or the exercise of any other right, power or remedy of
the Leasehold Mortgagee, and any Leasehold Mortgagee shall be
liable to perform the obligations herein imposed on Tenant only
during the period it is in possession or ownership of the
leasehold estate created hereby.
(h) There shall be no merger of this Lease or any
interest in this Lease nor of the leasehold estate created
hereby, with the fee estate in the Leased Premises, by reason
of the fact that this Lease or such interest therein, or such
leasehold estate may be directly or indirectly held by or for the
account of any person who shall hold the fee estate in the Leased
Premises, or any interest in such fee estate, nor shall there be
such a merger by reason of the fact that all or any part of the
leasehold estate created hereby may be conveyed or mortgaged in a
Leasehold Mortgage to a Leasehold Mortgagee who shall hold the
fee estate in the Leased Premises or any interest of the Landlord
under this Lease.
(i) No surrender (except a surrender upon the
expiration of the term of this Lease or upon termination by
Landlord pursuant and subject to the provisions of this Lease)
by Tenant to Landlord of this Lease, or of the Leased Premises,
or any part thereof, or of any interest therein, and no
termination of this Lease by Tenant shall be valid or effective,
and neither this Lease nor any of the terms hereof may be
amended, modified, changed or cancelled without prior written
consent of the Leasehold Mortgagee.
(j) The provisions of this Section are for the
benefit of, and are to be enforceable by, the Leasehold
Mortgagee.
(k) Notices, demands and requests from Landlord
to the Leasehold Mortgagee shall be mailed to the address given
to Landlord by registered mail and notices, demands and requests
from the Leasehold Mortgagee to Landlord shall be mailed to the
address specified in Section 24 of this Lease. Any such notice,
demand or request shall be given in accordance with such Section.
(l) Landlord hereby agrees that its statutory
landlord's lien, arising under Texas law, shall be subordinate to
any Leasehold Mortgage in favor of any Leasehold Mortgagee, and
to any lien in favor of a vendor supplying equipment or trade
fixtures to Tenant.
21. RIGHTS OF MORTGAGEE. Landlord shall have the right at
all times to mortgage or hypothecate its ownership of the Leased
Premises and its lessor's interest in this Lease. At the option
of the mortgagee of any mortgage or beneficiary of any deed of
trust constituting a lien on all or part of the Leased Premises
(said mortgagee or beneficiary being called herein the
"Mortgagee"), this Lease shall be either (i) subject and
subordinated to or (ii) prior to the lien of any mortgage placed
on or against the Leased Premises on or against Landlord's
interest or estate therein without the necessity of having
further instruments on the part of Tenant to effectuate such
subordination. Notwithstanding the foregoing, in the event of a
foreclosure of any such mortgage, or of any other action or
proceeding for the enforcement thereof, or of any sale
thereunder, this Lease will not be barred, terminated, cut off or
foreclosed, nor will the rights and possession of Tenant
hereunder be disturbed, if Tenant shall not then be in default in
the payment of rent due or the performance of Tenant's other
obligations hereunder. Upon the request of any Mortgagee, Tenant
agrees to execute any amendment to this Lease which
does not, in the reasonable opinion of Tenant's counsel,
materially adversely affect Tenant's rights hereunder. Upon
receipt of written request of Tenant to so do, Landlord shall
obtain a non-disturbance agreement from the Mortgagee.
Concurrently with the mutual execution and delivery of this
Lease, Landlord shall deliver to Tenant a non-disturbance
agreement from any existing Mortgagee or other lienholder.
22. ESTOPPEL CERTIFICATES. At any time and from time to
time, Landlord, on at least twenty (20) days prior written
request by Tenant, and Tenant, on at least twenty (20) days
prior written request by Landlord, will deliver to the party
making such request a statement in writing certifying that this
Lease is unmodified and in full force and effect (or if there
shall have been modifications that the same is in full force and
effect as modified and stating the modifications) and the date to
which the rent and any other deposits or charges have been paid
and stating whether or not, to the best knowledge of the party
executing such certificate, the party requesting such statement
is in default in the performance of any covenant, agreement or
condition contained in this Lease and, if so, specifying each
such default of which the executing party may
have knowledge.
23. INVALIDITY OF PARTICULAR PROVISIONS. If any term or
provision of this Lease, or the application thereof to any person
or circumstance shall, to any extent, be invalid or
unenforceable, the remainder of this Lease, or the application of
such term or provision to persons or circumstances other than
those as to which it is held invalid or unenforceable, shall not
be affected thereby, and each term and provision of this Lease
shall be valid and be enforced to the fullest extent permitted by
law.
24. NOTICES. Whenever Landlord or Tenant shall desire to
give or serve upon the other any notice, demand, request or other
communication with respect to this Lease or with respect to the
Leased Premises each such notice, demand, request or other
communication shall be in writing and shall not be effective for
any purpose unless the same shall be given or served by personal
delivery to the party or parties to whom such notice, demand,
request or other communication is directed or by mailing the
same, in duplicate, to such party or parties by certified mail,
postage prepaid, return receipt requested, addressed as follows:
Landlord: With a Copy to:
BAM Corporation Gresham, Varner, Xxxxxx, Xxxxx &
c/o Xxxxxxx X. Xxxxxxxxx Xxxxxx
0000 Xxxxxxx Xxxxx 0000 Xxxxxxxxxx Xxxxxx,
Xxxx Xxxxx, XX 00000 Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx
And With a Copy to:
Xxxxxxx X. Xxxxxxxx
000 Xxxx Xxxxxx, Xxx. 000
Xxxx Xxxxx, Xxxxx 00000
Tenant:
KPR Holdings, L.P.
c/o Foodbrands America, Inc.
0000 X.X. Xxxxxxxxxx
Xxxxxxxx Xxxx, XX 00000
Attn: R. Xxxxx Xxxxxxxx
Chairman, President and
Chief Executive Officer
or at such other address or addresses as Landlord or Tenant may
from time to time designate by notice given by certified mail.
Every notice, demand, request or communication hereunder
sent by mail shall be deemed to have been given or served as of
the second business day following the date of such mailing.
25. QUIET ENJOYMENT. Landlord covenants and agrees that
Tenant, upon paying the rent and all other charges herein
provided for and observing and keeping all covenants, agreements,
and conditions of this Lease on its part to be observed and kept,
shall quietly have and enjoy the Leased Premises during the term
of this Lease without hindrance or molestation by
anyone claiming by or through Landlord.
26. HAZARDOUS MATERIAL.
26.01 As used herein, the term "Hazardous Material"
means any hazardous or toxic substance, material or waste which
is or becomes regulated by any local governmental authority, the
State of Texas or the United States Government. The term
"Hazardous Material" includes, without limitation, any material
or substance which is (i) petroleum, (ii) asbestos, (iii)
designated as a "hazardous substance" pursuant to Section 311 of
the Federal Water Pollution Control Act (33 U.S.C. Section 1317)
or any Texas statute or regulation, (iv) defined as a "hazardous
waste" pursuant to Section 1004 of the Federal Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq. (42
U.S.C. Section 6903) or any Texas statue or regulation, or (v)
defined as a "hazardous substance" pursuant to Section 101 of the
Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. Section 9601 et seq. (42 U.S.C. Section 9601) or
any Texas statute or regulation, and (vi) so defined in the
regulations adopted and publications promulgated pursuant
to any of such laws, or as such laws or regulations may be
further amended, modified or supplemented.
26.02 Tenant shall not cause or permit any
Hazardous Material to be brought upon, kept, used in or about or
disposed of from the Premises by Tenant, its agents, employees,
contractors or invitees, without the prior written consent of
Landlord (which Landlord shall not unreasonably withhold as long
as Tenant demonstrates to Landlord's reasonable satisfaction that
such Hazardous Material is necessary or useful to Tenant's
business and will be used, kept, stored and if necessary disposed
of in a manner that complies with all laws relating to any such
Hazardous Material so brought upon, used kept, stored in or about
or disposed of from the Premises). Notwithstanding the forgoing,
Landlord acknowledges that Tenant uses ammonia and oil in the
normal course of its business, and agrees that Tenant may use
ammonia and oil on the Premises as long as such substances are
used only in the ordinary course of business, stored only in
quantities required for the conduct of Tenant's business, and are
used, stored and disposed of in accordance with all applicable
laws. If Tenant breaches the obligations stated in the preceding
sentence, or if the presence of Hazardous Material on the
Premises caused or permitted by Tenant results in contamination
of the Premises, then Tenant shall indemnify, defend and hold
Landlord harmless from any and all claims, judgments, damages,
penalties, fines, costs, liabilities or losses (including,
without limitation, diminution in value of the Premises, damages
for the loss or restriction on use of rentable or usable space or
of any amenity of the Premises, and sums paid in settlement of
claims, attorneys' fees, consultant fees and expert fees) which
arise during or after the Lease Term as a result of such
contamination. This indemnification of Landlord by Tenant
includes, without limitation, costs incurred in connection with
any investigation of Premises conditions, or any cleanup,
remedial, removal or restoration work required by any federal,
state or local governmental agency or political subdivision
because of Hazardous Material present in the soil or ground water
on or under the Premises. Without limiting the foregoing, if the
presence of any Hazardous Material on the Premises caused or
permitted by Tenant results in any contamination of the Premises,
Tenant shall promptly take any actions at its sole expense as are
necessary to return the Premises to the condition existing prior
to the introduction of any such Hazardous Material to the
Premises; provided that Landlord's approval of such actions shall
first be obtained, which approval shall not be unreasonably
withheld so long as such actions would not potentially have any
material adverse long-term or short-term effect on the Premises.
26.03 It shall not be unreasonable for Landlord to
withhold its consent to any proposed sublease or assignment if:
(a) the proposed assignee's or sublessee's anticipated use of
the Premises involves the generation, storage, use, treatment or
disposal of Hazardous Material; (b) the proposed assignee or
sublessee has been required by any prior landlord, lender or
governmental authority to take remedial action in connection with
Hazardous Material contaminating a property if the contamination
resulted from such assignee's or sublessee's actions or use of
the property in question; and/or (c) the proposed assignee or
sublessee is subjected to an enforcement order issued by any
governmental authority in connection with the use, disposal
or storage of a Hazardous Material.
27. OPTION TO PURCHASE.
27.01 Landlord grants to Tenant the option to
purchase ("Purchase Option") the Premises on the terms set forth
on Exhibit "C", attached hereto and incorporated herein by
reference, provided that the Purchase Option may not be exercised
at any time when Tenant is in default.
28. MISCELLANEOUS.
28.01 All rent and all other sums which may from
time to time become due and payable by Tenant to Landlord under
any of the provisions of this Lease shall bear interest from
and after the due date thereof at the rate of 10% per annum.
28.02 In all cases the language in all parts of
this Lease shall be construed simply, according to its fair
meaning and not strictly for or against Landlord or Tenant.
28.03 The word titles underlying the article
designations contained herein are inserted solely for convenience
and under no circumstances are they or any of them to be treated
or construed as any part of this instrument.
28.04 In any action or proceeding which either
party may take to enforce such party's rights hereunder, whether
prior to or after breach or termination, or to which such party
may be made a party because of any matters arising or growing out
of this Lease, and due to the act or default of the other, the
party whose act or default caused the other party, without fault
to become involved in such litigation, or who shall be defeated
in such litigation, agrees to pay all costs incurred by the
winning or other party therein, including reasonable attorneys'
fees.
28.05 If Tenant should remain in possession of the
Leased Premises after the expiration of the term of this Lease
and without executing a new lease, then such holding over
shall be construed as a tenancy from month to month, subject to
all the conditions, provisions and obligations of this Lease
insofar as the same are applicable to a month to month tenancy.
28.06 The voluntary or other surrender of this
Lease by Tenant or a mutual cancellation thereof shall not work a
merger of the estate herein demised and Landlord's reversionary
interest and shall, at Landlord's sole option terminate any and
all existing subleases or subtenancies or shall operate as an
assignment to it of any and all such subleases or subtenancies.
28.07 Each individual executing this Lease on
behalf of Tenant represents and warrants that he or she is duly
authorized to execute and deliver this Lease on behalf of said
corporation, and that this Lease is binding upon said corporation
in accordance with its terms.
28.08 Tenant covenants at all times during the term
of this Lease to comply with the requirements of the Occupational
Safety and Health Act of 1970, 29 U.S.C. Section 651 et seq and
any analogous legislation in Texas (collectively, the "Act"), to
the extent that the Act applies to the Leased Premises and any
activities thereon. Without limiting the generality of the
foregoing, Tenant covenants to maintain all working areas, all
machinery, structures, electrical facilities and the like upon
the Leased Premises in a condition that fully complies with the
requirements of the Act, including such requirements as would be
applicable with respect to agents, employees or contractors of
Landlord who may from time to time be present upon the
Premises, and Tenant agrees to indemnify and hold harmless
Landlord from any liability, claims or damages arising as a
result of a breach of the foregoing covenant and from all costs,
expenses and charges arising therefrom including, without
limitation, attorneys' fees and court costs incurred by Landlord
in connection therewith, which indemnity shall survive the
expiration or termination of this Lease.
28.09 This Lease covers in full each and every
agreement of every kind or nature whatsoever between the parties
hereto concerning the Leased Premises and all preliminary
negotiations and agreements of every kind or nature whatsoever
with respect to the Leased Premises; and no other person, firm or
corporation has at any time had any authority from Landlord to
make any representations or promises on behalf of Landlord, and
Tenant expressly agrees that if any such representations or
promises have been made by Landlord or others, Tenant hereby
waives all right to rely thereon. No verbal agreement or implied
covenant shall be held to vary the provisions hereof, any
statute, law, or custom to the contrary notwithstanding. No
provision of this Lease may be amended or added to except by an
agreement in writing signed by the parties hereto or their
respective successors in interest. Tenant acknowledges that it
has read this Section and understands it to be a waiver of any
right to rely on any representations or agreements not expressly
set forth in this Lease.
28.10 Subject to the provisions hereof, this Lease
shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns, and
wherever a reference in this Lease is made to either of the
parties hereto such reference shall be deemed to include,
wherever applicable, also a reference to the successors and
assigns of such party, as if in every case so expressed.
28.11 [RESERVED]
28.12 Nothing contained in this Lease shall be
deemed or construed by the parties hereto or by any third person
to create the relationship of principal and agent or of
partnership or of joint venture or of any association between
Landlord and Tenant, and neither the method of computation of
rent nor any other provision contained in this Lease nor any acts
of the parties hereto shall be deemed to create any relationship
between Landlord and Tenant other than the relationship of
landlord and tenant.
28.13 Tenant hereby acknowledges that late payment
by Tenant to Landlord of rent and other sums due under this Lease
will cause Landlord to incur additional costs not contemplated by
this Lease, the exact amount of which will be extremely difficult
to ascertain. Such additional costs include, without limitation,
processing and accounting charges, and late charges which may be
imposed upon Landlord by the terms of the mortgage or deed of
trust covering the Premises. Therefore, if any installment of
rent or any other sum due from Tenant shall not be received on
the date that such amount shall be due, Tenant agrees to pay, and
shall pay, to Landlord a late charge equal to five percent (5%)
of the overdue amount. The parties hereby agree that such late
charge represents a fair and reasonable estimate of the costs
Landlord will incur by reason of late payment by Tenant.
Acceptance of such late charge by Landlord shall in no event
constitute a waiver of Tenant's default with respect to such
overdue amount or prevent Landlord from exercising any or all of
the other rights and remedies granted under this Lease.
28.14 Tenant warrants that it has no dealings with
any real estate broker or agent in connection with the
negotiation of this Lease. Tenant shall indemnify and hold
harmless Landlord against any claim for brokerage commission
regarding this Lease.
28.15 This Lease shall be construed and enforced in
accordance with the laws of the State of Texas.
28.16 Any actions or proceedings with respect to
any matters arising under or growing out of this Lease shall be
instituted and prosecuted only in courts located in the City of
Fort Worth, County of Tarrant, State of Texas, and each party
hereto expressly waives its right to cause any such actions or
proceedings to be instituted or prosecuted elsewhere.
28.17 This instrument may be executed in two or
more counterparts, each of which shall be deemed an original but
all of which together shall constitute one and the same
instrument.
28.18 Except as expressly set forth herein, any
approval required or permitted to be given by Landlord shall be
deemed given unless written notice of denial of such approval is
delivered to Tenant within thirty (30) days of Tenant's request
for such approval, except that if Landlord reasonably requests
from Tenant additional information regarding such approval prior
to the expiration of such thirty (30) day period, the thirty (30)
day period shall not be deemed to have begun until Landlord
receives from Tenant such additional information as requested by
Landlord.
IN WITNESS WHEREOF, Landlord and Tenant have executed this
Lease effective as of the day first written above.
Tenant
KPR HOLDINGS, L.P., a Delaware limited
partnership
By: RKR-GP, INC.
Its: General Partner
By: (Xxxxxxx X. Xxxxxxxxx)
Its:
And: (Xxxxxx X. Xxxxxxxx)
Its: Treasurer
Landlord
BAM CORPORATION
By: (Xxxxxxx X. Xxxxxxxxx)
Its:
And: (Xxxxxx X. Xxxxxxxx)
Its: Treasurer
