LEASE AGREEMENT
EXHIBIT
10.3
This
Lease Agreement ("Lease
Agreement") is dated for reference as of September 26, 2008, between SBKF
Investments, Ltd., a corporation formed pursuant to the laws of England, having
an office at Xxxx 000 Xxxxxxxx Xxxxx Xxxxxxxx Xxxxxx Xxxx, X0 0XX Xxxxxxxxx, XX
("Lessor") and B&D
FOOD CORP., a corporation formed pursuant to the laws of the State of Delaware
and having an office for business located at 000 Xxxxxxx Xxxxxx, Xxxxx 0000, Xxx
Xxxx, XX 00000-0000 Xxxxxx Xxxxxx ("Lessee")
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1.
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Factory Lease and
Term.
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1.1
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Lessor
hereby leases to Lessee and Lessee hereby hires and takes from Lessor,
upon and subject to the covenants and conditions hereinafter contained,
the factory owned by BDFC BRASIL ALIMENTOS LTDA., a subsidiary
company wholly owned by the Lessor and formed pursuant to the laws of
Brazil ("BDFC"),
including all real property, industrial equipment, manufacturing
facilities for the production of spray-dried instant coffee, roasted
coffees and cappuccino mixes ("Factory Equipment"), and
BDFC's commercial brands/trade names, as more fully described in Annex A, and hereinafter
collectively referred to as the "Leased
Property".
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1.2
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The
Lessee will take possession of the Leased Property, on or before July 1,
2008, being hereinafter called "Commencement
Date". The term of this Lease with respect to the Leased
Property shall be for a period of eighteen (18) years from the
Commencement Date (hereinafter the "Term").
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1.3
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During
the Term of the Lease, Lessee agrees, at it's own cost and
expense:
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(a)
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To
pay all charges and expenses in connection with the operation of each item
of the Leased Property;
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(b)
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To
comply with all governmental laws, ordinances, regulations, requirements
and rules with respect to the use, maintenance and operation of the
Factory Equipment; and
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(c)
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To
make all repairs and replacements required to be made to maintain the
Factory Equipment in good condition reasonable wear and tear
excepted.
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2.
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Rent.
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2.1
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The
aggregate rent payable with respect to the Leased Property shall be in the
amount shown in Annex
A.
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2.2
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Lessee
shall pay to Lessor the aggregate rental for the Lease for the full period
and term for which the Leased Property is leased, such rental to be
payable at such times and in such amounts as shown in Annex
A.
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2.3
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All
rent shall be paid at Lessor's place of business shown above, or such
other place as Lessor may designate by written notice to the
Lessee.
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2.4
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The
Lessee retains the right to set off or deduct the rents payable from any
amount due from Lessor to the Lessee, by any other agreement or
transaction between the Lessor and
Lessee.
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3.
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Loss and Damage to Factory
Equipment.
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3.1
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Lessor
will assume and bear the risk of any partial or complete loss with respect
to the Leased Property from any theft, loss, damage or destruction,
including normal wear and tear or governmental taking, whether or not such
loss is covered by insurance or caused by any default or neglect of
Lessee.
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3.2
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The
liability of the Lessee will be limited to loss, damage or destruction,
caused by gross neglect or misuse by
Lessee.
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3.3
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Lessee
will give Lessor prompt notice of any damage to or loss of
any Factory Equipment and Lessor shall
be responsible for and pay the cost of all necessary repairs, maintenance
and replacement of parts, to the Factory Equipment occurring during the
Lease Term.
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4.
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Destruction
of Factory Equipment.
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4.1
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If
any Factory Equipment is lost, totally destroyed, damaged beyond repair or
taken by governmental and/or court action, the liability of the Lessee to
pay rent therefore may be discharged and Lessor shall, at its own expense,
cause such Factory Equipment to be restored to usable condition or make
available to Lessee substitute equipment with similar (but no less)
manufacturing capabilities.
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4.2
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In
the event Lessor has not caused the Factory Equipment to be restored to
usable condition or has not made available appropriate substitute
equipment, within 15 business days from Lessee's notice, Lessee may assume
such actions in order to restore the Factory into working order and the
liability of the Lessee to pay rent therefore may be
discharged.
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4.3
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In
the event any of the Leased Property is being subject to any liquidation
proceeding or other similar proceeding initiated by creditors
of BDFC, Lessor will be obliged to make available to the
Lessee, substitute facility with similar (but no less) manufacturing
capabilities as the Leased
Property.
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4.4
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No
oral agreement, guaranty, promise, condition, representation or warranty
shall be binding; all prior conversations, agreements or representations
related hereto and/or to the Leased Property are integrated
herein.
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5.
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Taxes.
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5.1
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Lessee
agrees that, during the term of this Lease, in addition to the rent and
all other amounts provided herein to be paid, it will promptly pay all
taxes, assessments and other governmental charges (including penalties and
interest, if any, and fees for titling or registration, if required)
levied or assessed upon the interest of Lessee in the Leased Property or
upon the use or operation thereof or on the earnings arising therefrom;
and
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6.
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Lessor's Title, Right of
Inspection and Identification of
Factory.
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6.1
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Title
to the Leased Property shall at all times remain in BDFC and Lessor.
Lessor will indemnify and hold Lessee harmless from any claims, losses,
penalties, liens and processes which Lessee may suffer or may be required
to pay in connection with the Leased
Property.
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(i)
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Upon
the expiration or termination of this Lease with respect any item of the
Leased Property, Lessee at Lessee's sole expense shall return the Leased
Property in the same operating condition, repair and appearance as
delivered to Lessee on the Commencement Date, reasonable wear and tear
excepted.
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6.2
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Lessor
shall have the right from time to time during reasonable business hours to
enter upon the leased premises or elsewhere for the purpose of confirming
the existence, condition and proper maintenance of the Leased Property.
Lessor shall also have the right to demonstrate and show the Leased
Property to others.
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7.
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Possession,
Use and Changes in Location of
Factory.
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7.1
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So
long as Lessee shall not be in default under the Lease it shall be
entitled to the possession and use of the Leased Property in accordance
with the terms of this Lease. The Leased Property shall be used
in the conduct of the lawful business of Lessee, and no item of the Leased
Property shall be removed from its current location, without the prior
written consent of Lessor. Lessee shall not, without Lessor's
prior written consent, part with possession or control of the Leased
Property or attempt or purport to sell, pledge, mortgage or otherwise
encumber any of the Leased Property or otherwise dispose of or encumber
any interest under this Lease.
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8.
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Default.
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8.1
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An
Event of Default shall occur if:
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(a)
Lessee fails to pay when due any installment of rent and such failure continues
for a period of 30 days;
(b)
Lessee shall fail to perform or observe any covenant, condition or agreement to
be performed or observed by it hereunder and such failure continues uncured for
15 days after written notice thereof to Lessee by Lessor;
(c)
Lessee ceases doing business as a going concern, makes an assignment for the
benefit of creditors, admits in writing its inability to pay its debts as they
become due, files a voluntary petition in bankruptcy, is adjudicated a bankrupt
or an insolvent, files a petition seeking for itself any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
arrangement under any present or future law or regulation or files an answer
admitting the material allegations of a petition filed against it in any such
proceeding, consents to or acquiesces in the appointment of a trustee, receiver,
or liquidator of it or of all or any substantial part of its assets or
properties, or if it or its shareholder shall take any action looking to
its assets or properties, or if it or its shareholders
shall take any action looking to its dissolution or liquidation;
(d)
Within 60 days after the commencement of any proceedings against Lessee seeking
reorganization, arrangement, readjustment, liquidation, dissolution or similar
relief under any present or future statue, law or regulation, such proceedings
shall not have been dismissed, or if within 60 days after the appointment
without Lessee's consent or acquiescence of any trustee, receiver or liquidator
of it or of all or any substantial part of its assets and properties, such
appointment shall not be vacated;
(e)
Lessee attempts to remove, sell, transfer, encumber, part with possession or
sublet the Leased Property or any item thereof.
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9.
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Remedies.
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9.1
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Upon
the occurrence of an Event of Default, Lessor, at its option, may exercise
any one or more of the following
remedies:
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(a) xxx
for and recover all rent and other payments, then accrued or as thereafter
accruing, with respect to any or all items of the Leased Property;
(b) take
possession of and render unusable any or all items of the Leased Property,
without demand or notice, wherever same may be located, without any court order
or other process of law and without liability for any damages occasioned by such
taking of possession.
(c) sell
or otherwise dispose of any or all items of Leased Property, whether or not in
Lessor's possession, in a commercially reasonable manner at public or private
sale and without notice to Lessee and apply the net proceeds of such sale, after
deducting all costs of such sale including but not limited to, costs of
transportation, repossession, storage, refurbishing, advertising and brokers'
fees to the obligations of Lessee hereunder with Lessee remaining liable for any
deficiency and with any excess being retained by Lessor;
(d)
terminate this Lease as to any or all items of Leased Property or,
(e)
utilize any other remedy available to Lessor at law or in equity.
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9.2
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A
termination hereunder will occur only upon notice by Lessor to Lessee and
only with respect to such Leased Property item as to which Lessor
specifically elects to terminate in such notice. Except as to
such Leased Property with respect to which there is a termination, this
Lease will remain in full force and effect and Lessee will be and remain
liable for the full performance of all its obligations
hereunder.
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9.3
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No
right or remedy conferred herein is exclusive of any other right or
remedy conferred herein or by law, but all such rights
and remedies are cumulative of every other right or remedy conferred
hereunder or at law or in equity, by statute or otherwise, and may be
exercised concurrently or separately from time to
time.
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10.
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Assignment, Notices and
Waivers.
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10.1
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This
Lease and all rights of Lessor hereunder may be assignable by Lessor to
any of its subsidiary companies, without Lessee's prior
consent.
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10.2
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Lessee
may assign this Lease or its interests or enter into any sub-lease with
respect to the Leased Property covered hereby, with Lessor's prior
consent, which will not unreasonably
withheld.
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10.3
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All
notices to Lessor shall be delivered in person to an officer of the
Lessor, or shall be sent certified mail return receipt requested to Lessor
at its address shown herein or at any later address last known to the
sender. All notices to Lessee shall be in writing and shall be delivered
by mail at its address shown herein or at any later address last known to
the sender. A waiver of a default shall not be a waiver of any other or a
subsequent default.
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11.
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Lease Irrevocability and
Charges.
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11.1
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This
Lease is irrevocable for the full Term thereof and for the aggregate
rentals therein reserved and the rent shall not xxxxx by reason of
termination of Lessee's right of possession and/or the taking of
possession by the Lessor or for any other
reason.
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12.
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Miscellaneous.
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12.1
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If
any provision of this Lease is contrary to, prohibited by or deemed
invalid under applicable laws or regulations of any
jurisdiction, such provision shall be inapplicable and deemed
omitted but shall not invalidate the
remaining provisions
hereof.
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12.2
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In
the event this Lease or any part hereof is deemed to be a lease intended
as security, Lessee grants a security interest in the Leased Property as
security for all of Lessee's indebtedness and obligations owing under the
Lease.
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13.
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Governing Law; Venue,
Invalidity.
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13.1
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This
Agreement and the rights of the parties hereunder shall be governed by and
construed in accordance with the laws of the State of New York including
all matters of construction, validity, performance, and enforcement and
without giving effect to the principles of conflict of
laws.
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13.2
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The
parties hereto shall attempt to resolve any dispute, controversy,
difference or claim arising out of or relating to this Agreement by
negotiation in good faith. If such good negotiation fails to resolve such
dispute, controversy, difference or claim within fifteen (15) days after
any party delivers to any other party a notice of its intent to submit
such matter to arbitration, then any party to such dispute, controversy,
difference or claim may submit such matter to arbitration in the City of
New York, New York.
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IN WITNESS WHEREOF, the
parties hereto have executed this Agreement, as of the date first written
hereinabove.
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Lessee
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Lessor
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B&D
FOOD CORP.,
a
Delaware corporation
By:
Its:
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SBKF
Investments, Ltd.,
a
UK company
By:
Its:
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Annex
A
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Note
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Payment schedule
is based on an 18 year Payable with first payment due a year from
execution of the lease
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Payment
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Date
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Remaining
Balance
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Lease
Price
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14,452,363.62
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1
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802,909.09
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9/28/2009
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13,649,454.53
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2
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802,909.09
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9/28/2010
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12,846,545.44
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3
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802,909.09
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9/28/2011
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12,043,636.35
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4
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802,909.09
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9/28/2012
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11,240,727.26
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5
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802,909.09
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9/28/2013
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10,437,818.17
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6
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802,909.09
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9/28/2014
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9,634,909.08
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7
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802,909.09
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9/28/2015
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8,831,999.99
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8
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802,909.09
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9/28/2016
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8,029,090.90
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9
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802,909.09
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9/28/2017
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7,226,181.81
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10
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802,909.09
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9/28/2018
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6,423,272.72
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11
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802,909.09
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9/28/2019
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5,620,363.63
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12
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802,909.09
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9/28/2020
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4,817,454.54
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13
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802,909.09
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9/28/2021
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4,014,545.45
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14
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802,909.09
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9/28/2022
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3,211,636.36
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15
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802,909.09
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9/28/2023
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2,408,727.27
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16
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802,909.09
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9/28/2024
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1,605,818.18
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17
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802,909.09
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9/28/2025
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802,909.09
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18
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802,909.09
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9/28/2026
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0.00
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