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
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".
1.2
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").
1.3
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
The
aggregate rent payable with respect to the Leased Property shall be in the
amount shown in Annex
A.
2.2
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.
2.3
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.
2.4
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 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.
3.2
The
liability of the Lessee will be limited to loss, damage or destruction, caused
by gross neglect or misuse by Lessee.
3.3
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
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.
4.2
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.
4.3
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.
4.4
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
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
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.
(i)
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.
6.2
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
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
An
Event
of Default shall occur if:
(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;
(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
Upon
the
occurrence of an Event of Default, Lessor, at its option, may exercise any
one
or more of the following remedies:
(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.
9.2
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.
9.3
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
This
Lease and all rights of Lessor hereunder may be assignable by Lessor to any
of
its subsidiary companies, without Lessee's prior consent.
10.2
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.
10.3
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
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
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.
12.2
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 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.
13.2
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.
13.3 This
lease contains the entire agreement between the parties with respect to the
lease of the Leased Property, and may not be altered, modified, terminated
or
discharged except by a writing signed by the party against whom such alteration,
modification, termination or discharge is sought.
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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|||||||||
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1
|
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802,909.09
|
|
9/28/2009
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13,649,454.53
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|||||
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2
|
802,909.09
|
9/28/2010
|
12,846,545.44
|
|||||||
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3
|
802,909.09
|
|
9/28/2011
|
12,043,636.35
|
||||||
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4
|
802,909.09
|
|
9/28/2012
|
11,240,727.26
|
||||||
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5
|
802,909.09
|
9/28/2013
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10,437,818.17
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|||||||
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6
|
802,909.09
|
9/28/2014
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9,634,909.08
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|||||||
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7
|
802,909.09
|
9/28/2015
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8,831,999.99
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|||||||
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8
|
802,909.09
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9/28/2016
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8,029,090.90
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|||||||
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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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|||||||
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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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|||||||
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11
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802,909.09
|
|
9/28/2019
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5,620,363.63
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||||||
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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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|||||||
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13
|
802,909.09
|
9/28/2021
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4,014,545.45
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|||||||
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14
|
802,909.09
|
9/28/2022
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3,211,636.36
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|||||||
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15
|
802,909.09
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9/28/2023
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2,408,727.27
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|||||||
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16
|
802,909.09
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9/28/2024
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1,605,818.18
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|||||||
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17
|
802,909.09
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9/28/2025
|
802,909.09
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|||||||
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18
|
802,909.09
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9/28/2026
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0.00
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