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EXHIBIT 10.34
LEASE AGREEMENT
STATE OF TEXAS )
)
COUNTY OF BEXAR )
This LEASE AGREEMENT (hereinafter called the "Agreement"), made and
entered into by and between X.X. XXXX, INC. and J. XXXXXXX XXXX (hereinafter
called "Lessor") and MISSION PARTY ICE, INC. (hereinafter called "Lessee"):
W I T N E S S E T H:
1. Lessor agrees to lease to Lessee and Lessee hereby agrees to
lease from Lessor, for use and occupancy as an ice plant facility and any other
use to which the properties are currently utilized, together with all rights,
privileges and appurtenances thereunto belonging, the real property and
improvements consisting of nine (9) tracts located in Bexar, Gonzales,
Caldwell, Xxxx and Xxx Xxxxx Counties in the State of Texas, each being more
particularly described on Exhibit "A" attached hereto and herein incorporated
by reference, with all of the real property and improvements wherever located
hereinafter called the "leased premises". The term of this Lease shall be for
a period of ten (10) years commencing on the 1st day of March, 1988 and
terminating on the 28th day of February, 1998.
2. Lessee covenants and agrees to pay promptly to Lessor at the
address hereinafter specified for notice, as monthly rental for the leased
premises during the term above described under paragraph 1 of this Agreement,
the sum of THREE MILLION AND NO/100 DOLLARS ($3,000,000.00), payable monthly in
advance during each month during the term hereof at the rate of $25,000.00 per
month.
3. It is the intent of the parties that the rent payable
hereunder shall be paid to Lessor net of all costs and expenses of ownership of
the leased premises and Lessee covenants and agrees, in addition to rental, to
pay:
a. All ad valorem or real estate taxes assessed against the
leased premises and becoming due and payable during the term
hereof. City, county, school and all other ad valorem taxes
for the first and last years of the term of this Agreement
shall be apportioned between Lessor and Lessee.
b. Any assessment for local improvements which become a lien upon
the leased premises after the commencement of the term hereof.
c. The premiums on policies of fire and extended coverage
insurance upon the leased premises which are to be obtained
and maintained in force by Lessee during the term hereof in
amounts at least equaling the fair
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replacement value of the improvements upon the leased
premises, which Lessor and Lessee agree are the sum of present
coverage for any of the buildings on the leased premises and
other permanent improvements thereon.
d. The costs and expense of all gas, water, electricity and other
utilities used by Lessee, and Lessor and Lessee agree that the
connections for the gas, electric and water utilities shall
remain in the name of Lessor and Lessee shall promptly pay all
bills rendered to Lessor for the services furnished to the
leased premises.
e. Lessee shall, at all times during the term of this Lease, and
at its own cost and expense, keep and maintain or cause to be
kept and maintained in repair and good condition (ordinary
wear and tear excepted), all improvements on the leased
premises, and shall use all reasonable precaution to prevent
waste, damage or injury. Lessor shall not be required to
furnish any services or facilities or to make any
improvements, repairs or alterations in or to the leased
premises during the term of this Lease.
Nothing contained in this paragraph 3 shall be construed as precluding
either party from the right, individually or jointly, to contest the amount or
legality of any taxes or local improvement assessments levied upon the leased
premises, or the right to make application, for reduction thereof or reduction
of the assessment upon which the same may be based. In the event of such
contest or application, the time within which Lessee shall be required to pay
the same shall be extended until final determination of the proper amount due
and within thirty (30) days after such final determination Lessee shall pay the
amount so determined, including all interest, penalties, costs and charges
incident thereto.
If Lessor shall make any expenditure for which Lessee is responsible,
or which Lessor should make hereunder, the amount thereof, together with
interest at the rate of eighteen percent (18%) per annum may, at Lessor's
election, be added to and deemed a part of the installment of rental next
falling due and shall be subject to collection or enforcement in accordance
with the law applicable to collection of rentals. Lessor agrees to give Lessee
fifteen (15) days written notice before making any such expenditures.
4. In the event that the leased premises are damaged or destroyed
by fire or other casualty, Lessee shall give immediate notice in writing to
Lessor who shall promptly notify the appropriate insurance carrier. In the
event the damage to the premises or contents is 25% or less, the leased
premises shall then be repaired promptly by Lessee at Lessee's exclusive
expense, however, Lessor agrees that any proceeds paid to Lessor under the
policy of fire and extended coverage insurance shall be held by Lessor in trust
for the benefit of Lessee and shall be paid directly to Lessee's contractor in
the form of monthly payments
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equal to the value of the work completed on the job or reconstruction or
repair, such values to be certified by the contractor in writing and approved
in writing by Lessee prerequisite to the payment from Lessor. In the event the
damage to the premises or contents exceeds 25% of the leased premises, Lessor
then shall have the option to repair or reconstruct the premises to its
condition prior to the casualty insofar as this is practical. During any
period of repairs or reconstruction, if the leased premises shall be unfit to
be used by Lessee for the manufacture and distribution of ice or other use
which the property is currently utilized, the rental payable by Lessee shall be
abated until such time as Lessee can continue its operations. In the event
Lessor does not exercise its option to repair or reconstruct the premises,
Lessor shall notify Lessee of such intention within 30 days from the date of
the damage and this lease only as to the particular tract and improvements
thereon shall be deemed cancelled, terminated and of no further force or effect
but shall not effect the remainder of the tracts. The amount of rental
attributable to the cancelled tract shall be determined and the monthly rental
payment shall be reduced by such amount.
The percentage of damage shall be determined by an adjuster for the
insurance carrier, and if either Lessor or Lessee disagrees as to this figure,
each party shall appoint a disinterested adjuster or appraiser, which two
adjusters or appraisers shall select a third adjuster or appraiser. The
average percentage figure of the three adjusters or appraisers shall be binding
on the parties.
5. Lessee shall make no alterations or additional improvements to
the leased premises without prior written consent of Lessor, which shall not be
unreasonably withheld. Lessee shall not permit the filing of any liens against
the leased premises and Lessee shall save Lessor harmless from any claims,
liens, or causes of action by mechanics, materialmen, or other parties entitled
to a lien by reason of services performed or materials furnished in connection
with any such alterations, additions or improvements or in connection with any
reconstruction under paragraph 4 above. At the expiration of the term of this
Agreement all alterations, additions and improvements made by Lessee shall
remain upon the leased premises and become the property of Lessor. Any trade
fixture installed by Lessee may be removed by it at the expiration of the term
hereof at Lessee's sole cost and expense provided that all damage caused to the
leased premises by such removal is repaired by Lessee and the premises restored
to a serviceable and useable condition at Lessee's sole cost and expense.
6. In the event of default of any of the covenants contained
under this Agreement, or in the event of bankruptcy, receivership or assignment
for the benefit of creditors on the part of Lessee, Lessor may enforce the
performance hereof in any manner provided by law and/or may declare the lease
forfeited at its discretion, and Lessor, its agents or attorneys, shall have
the right to re-enter and remove all persons and/or property from the leased
premises without being guilty of any manner of trespass, without prejudice
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to its claims for arrears of rent or breach of covenants, or Lessor may take
possession of the premises and re-rent the same for the remainder of the term
or for any other term at the best rent Lessor may obtain for the account of
Lessee, and Lessee shall remain liable to Lessor for any deficiency of said
rentals received by Lessor that are attributable to the remainder of Lessee's
term; provided that prior to the time that Lessor shall take any action herein
because of any alleged default on the part of Lessee, Lessor shall give to
Lessee at least thirty (30) days prior written notice of such claimed default;
if during such thirty (30) day period such claimed default is remedied by
Lessee, then Lessor shall not be permitted to declare the rights of Lessee
forfeited because of any such default. If Lessee should default in the
performance of any of the covenants, conditions or obligations contained
herein, Lessee agrees to pay Lessor's reasonable attorney's fees.
7. Lessee shall and does hereby agree to indemnify Lessor and to
hold Lessor harmless of and from any and all claims, demands, costs and
expenses (including but not limited to Lessor's reasonable attorney's fees),
damages, and causes of action of every nature whatsoever arising from or
related to Lessee's use or occupancy of the leased premises; or arising from
any act, omission or negligence of Lessee, its agents, servants, employees,
licensees or invitees; or arising from any accident, injury or damage
whatsoever caused to any person or persons or property occurring in, on or
about the leased premises; or arising from any act, omission, or negligence of
Lessee, its agents, servants, employees, licensees or invitees; or arising from
any accident, injury or damage whatsoever caused to any person or persons or
property occurring in, on or about the leased premises or any part thereof
during the entire term of this Agreement; or arising from any violation of
Sections 112 and 301(a) of the Clean Air Act, as amended (42 U.S.C. 7412,
7601(a)). Without limitation to the foregoing indemnification and hold
harmless agreement but in addition to the same, Lessee agrees that any and all
of its property located in the leased premises shall be kept at Lessee's sole
risk and Lessee shall during the entire term hereof at Lessee's expense
maintain public liability insurance covering and protecting Lessee, said
policies to be issued with reasonable substantial amounts of coverage of not
less than $5,000,000.00 per injury and $5,000,000.00 per occurrence. In
addition Lessee shall at its expense purchase and maintain public liability
insurance covering and protecting Lessor as a Landlord or owner in the name of
Lessor as the insured for $1,000,000.00.
8. Lessor agrees that upon compliance with the terms, covenants
and conditions of this Agreement, Lessee shall and may peaceably and quietly
have, hold and enjoy the leased premises for the term of this Agreement.
Lessee covenants and agrees that at the expiration of the term hereof or any
extension thereof, it will quit and surrender the improvements located on the
leased premises in as good of state and condition as delivered to Lessee,
subject only to reasonable use and wear thereof. Any holding over by Lessee
shall not operate, except by written agreement, to extend or
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renew this Agreement and no tenancy of any duration shall be created thereby.
9. Lessee accepts the leased premises in its current condition.
At all times during the entire term covered under this Agreement, Lessee agrees
at its exclusive expense to keep the entire leased premises, including the
buildings and their roofs, exterior walls, structural supports and foundations
thereof, and all windows, doors, plate glass, air conditioning, heating and
plumbing and other mechanical and electrical equipment, and the adjoining
sidewalks, curbs, driveways, parking areas, and landscaping in good order,
repair and condition (reasonable wear and tear excepted) and shall make all
repairs, replacements and renewals, whether ordinary or extraordinary,
necessary to maintain the leased premises in good order, repair and condition.
10. Lessee agrees to permit authorized representatives of Lessor
to inspect or examine the leased premises at any reasonable time.
11. At the request of either party, a memorandum form of this
Agreement shall be executed to facilitate recordation in appropriate records of
Bexar, Caldwell, Gonzales, Xxxx and Xxx Xxxxx Counties, Texas, to give notice
of the pertinent provisions hereof.
12. All notices or demands given or required to be given hereunder
shall be in writing and sent by United States certified mail, return receipt
requested, postage prepaid, addressed to the party to be affected thereby, at
the address indicated below; provided that either party, by like written
notice, may designate a different address to which such subsequent notices
shall be sent. Said addresses are:
LESSOR: X.X. XXXX, INC.
J. XXXXXXX XXXX
000 Xxxxxxxx
Xxx Xxxxxxx, Xxxxx 00000
LESSEE: MISSION PARTY ICE, INC.
0000 X. Xxxxxxx
Xxx Xxxxxxx, Xxxxx 00000
13. Lessee shall not be responsible to Lessor and Lessor shall not
be responsible to Lessee for any damages caused by fire or other casualty
covered by the Texas Standard Form of Fire and Extended Coverage Insurance,
even though such damages are caused by the negligence of some person for whom
Lessee or Lessor would, except for this provision, be responsible; and Lessee
and Lessor likewise waive any rights against the other which would, except for
this waiver, inure to the benefit of their respective fire and extended
coverage insurance carriers (if any) by way of subrogation or otherwise. Each
party agrees that it will arrange for any policy or policies of fire and
extended coverage insurance to
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contain, if obtainable, a clause whereby the insurer waives its rights of
subrogation.
14. Lessee shall not assign this Agreement or sublet the whole or
any part of the leased premises without obtaining the prior written consent of
Lessor, however, such consent shall not be unreasonably withheld.
Lessor shall have the right freely to assign, mortgage and sell the
fee interest in the leased premises subject to this Lease Agreement, and shall
also have the right, without selling the fee interest, freely to transfer,
assign, mortgage or pledge this Agreement. Lessee hereby expressly covenants
and agrees that this Agreement shall be subject to and subordinate to any
mortgage or mortgages now on the leased premises or hereafter placed thereon.
15. Should the leased premises at 0000 Xxxxxxx Xxxx. in San
Antonio, Texas be taken or condemned for public purposes during the term
hereof, in whole or in such amount to effectively prevent Lessee from operating
the ice manufacturing business, Lessor agrees that from the funds received in
the taking or condemnation, it will build equal facilities for Lessee and this
Lease shall continue unabated. Should any of the balance of the leased
premises be taken or condemned in whole or in part for public purposes during
the term hereof, Lessor agrees to build equal facilities for Lessee or at
Lessor's option may elect to terminate this Agreement as to the portion or
tract so taken or condemned or to continue the same in effect; provided,
however, if that portion or tract of the leased premises are so affected by any
such taking so that the same become unfit for use by Lessee in the ordinary
conduct of its business and Lessor has not constructed or agreed to construct
equal facilities, Lessee shall have the option of terminating this Agreement as
to the portion or tract within 30 days after taking or condemnation. If after
a partial condemnation the Agreement be continued, the rental shall be reduced
in accordance and proportion to the area and use by Lessee of the leased tract
and premises so taken, and Lessor shall repair any damage to the improvements
or buildings resulting from any such taking. All sums awarded as a result of
such taking shall be the exclusive property of Lessor, except for amounts
specifically awarded to Lessee for its trade fixtures, if any. Lessor and
Lessee specifically contract and agree that in the event the ice manufacturing
facilities in any of the leased premises shall, for any reason not attributable
to Lessee's operations, be condemned for health purposes by any governmental
agency, including the City of San Antonio, Texas, Bexar County, State of Texas
or any federal agency, Lessee shall have the option to terminate this lease as
to that portion or tract on giving 30 days' written notice to Lessor, whereupon
the Lease shall be cancelled as to that portion or tract and of no further
force and effect with respect to either Lessor Lessee, but shall not effect
this lease as to the remaining tracts of land and improvements. In the event
such option is exercised by Lessee, it shall have 30 days in which to vacate
the particular tract or premises.
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16. To secure payment of all rent due and to become due hereunder,
and the faithful performance of all of the other covenants of this Lease
required by Lessee to be performed, Lessee hereby gives to Lessor an express
contract lien on and security interests in and to all proceeds of any insurance
which may accrue to Lessee by reason of damage to or destruction of any such
property. This lien and security interest are given in addition to the
Lessor's statutory lien(s) and shall be cumulative thereto. This lien and
security interest may be foreclosed with or without court proceedings, by
public or private sale, with or without notice and Lessor shall have the right
to become purchaser, upon being the highest bidder at such sale. Upon request
of Lessor, Lessee agrees to execute Uniform Commercial Code financing
statements relating to the aforesaid security interest.
17. The mention in this Lease of any specific right or remedy
shall not preclude Lessor from exercising or having any other right or remedy
or from maintaining any action to which Lessor may otherwise be entitled either
at law or in equity. No waiver or indulgence by Lessor of any default or
breach of covenant, condition or stipulation herein contained shall be treated
as a waiver of any subsequent default, or breach of the same or any other
covenant, condition or stipulation hereof. The acceptance by Lessor of any
payment, partial or otherwise, made hereunder after the time when it becomes
due as herein set forth, will not establish a custom or constitute a waiver by
Lessor of any right to enforce prompt payment hereof. To the extent permitted
by applicable law, Lessee hereby waives the application of and all of its
rights and powers under all statutes of limitation and similar powers under all
statutes of limitation and similar statutes and laws as to this Lease and all
portions hereof. Demand, presentment for payment, protest and notice of
non-payment and protest hereby are waived by Lessee. No act or thing done by
Lessor or its agents shall be deemed to be an acceptance of surrender of the
Leased Premises and no agreement to accept a surrender of the Leased Premises
shall be valid unless it is in writing and signed by a duly authorized officer
or agent of Lessor.
18. Subject to the provisions of paragraph 14 above regrading the
restriction on sub-letting and assignments on the part of Lessee, the covenants
and agreements herein contained shall inure to the benefit of and be binding
upon the parties hereto, their successor and assigns.
19. Lessee shall at its own expense, promptly execute and fulfill
all ordinances of Bexar, Caldwell, Gonzales, Xxxx and Xxx Xxxxx Counties and
all laws of the State of Texas, including but not limited to all orders or
requirements of any public authority for the correction, prevention and
abatement of nuisances in or connection with the leased premises.
20. Notwithstanding anything contained herein to the contrary, if
at any time during the term of this Lease, Lessor shall receive from a third
party a bona fide offer to purchase any of the properties described in Exhibit
"A", or any part thereof
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which includes any of the leased premises, and Lessor shall desire to sell same
pursuant to such terms and provisions, the Lessor shall first offer the
property for sale to Lessee upon identical terms, except time for closing if
different than stated below.
After receipt of notice of the terms on which the property is being
considered for sale, Lessee shall then have fifteen (15) days in which to
respond in writing to Lessor. If Lessee elects to purchase, then Lessee shall
close on the basis offered within sixty (60) days of such election to purchase,
or if Lessee elects not to purchase or fails to respond in writing within said
fifteen (15) day period, then Lessor shall be free to close the sale to the
third party on the basis indicated. In the event that Lessor receives an
offer, notifies Lessee and Lessee fails or elects not to close on that basis,
but later Lessor's proposed sale to a third party shall not close, then in such
event Lessee's first right of refusal shall be revitalized and effective under
its original terms through the full term of this Lease.
21. Lessee has deposited with Lessor, the receipt of which is
hereby acknowledged, the sum of $25,000.00 as rental paid in advance for the
first month's rental.
22. Lessor grants to Lessee reasonable ingress to and egress from
the leased premises.
23. At the expiration of the term of this Lease, if Lessee is not
at that time in any manner in default under the Lease, Lessee shall have the
option to extend the term of the Lease for an additional period of five (5)
years on the same terms and conditions contained in this Lease, except however,
the rental to be paid by Lessee shall be the fair lease market value of the
real properties and premises as shall be determined by the agreement of the
parties. If the parties are unable to agree, they shall each name an appraiser
who jointly shall name a third appraiser and they shall together agree upon
such fair rental value. The option shall be exercised by Lessee delivering to
Lessor, at least 120 days prior to the termination date, written notice of
Lessee's intention to so exercise the option.
24. This Lease Agreement contains the entire agreement between the
parties, and no agreement shall be effective to change, modify or terminate
this Agreement, in whole or in part, unless such agreement is in writing and
duly signed by the parties against whom enforcement of such change,
modification or termination is sought, and both parties agree that this
contract cannot be altered or varied by any prior contemporaneous or subsequent
oral agreement, stipulation, representation or understanding.
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SIGNED, EXECUTED AND EFFECTIVE March 1, 1988.
X.X. XXXX, INC.
BY:
----------------------------------
J. Xxxxxxx Xxxx
President
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J. XXXXXXX XXXX
LESSOR
MISSION PARTY ICE, INC.
BY:
-----------------------------------
X.X. Xxxxx, III
President
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EXHIBIT "A"
Bexar County, Texas:
Dixie Ice Plant - 1106 E. Durango:
Xxx 0 - Xxx 00, except the South 66.43 feet of the West 13.4 feet Lots
11 and 12, except the South 66.43 feet and North 10 feet of the East
52.0 of Xxx 0, Xxxxx 0, XXX 000, Xxx Xxxxxxx, Xxxxx Xxxxxx, Texas.
Office Building - East side of Dixie Ice Plant called X.X.Xxxxxx
Property:
Portion of Xxxx 0, 0 xxx 0 - Xxxxx 0, XXX 635, San Antonio, Bexar
County, Texas - Volume 7995, Page 883.
Xxx Property:
5.65 of Lots 11 and 12 - 5.65 of W13.4 of Xxx 00 - X. 0 xx Xxxx 0 xxx
0, X. 9 of W. 13.4 of Xxx 0 - X. 000.0 xx Xxx 0 - X. 140.5 of W. 14 of
Xxx 0, Xxxxx 0, XXX 000, Xxx Xxxxxxx, Xxxxx Xxxxxx, Xxxxx.
Office Building - 1130 Durango:
.0185 acres out of Xxxx 0, 0 xxx 0, Xxxxx 0, XXX 635 and also being
Tracts #2 and #3 as recorded in Vol. 7959, Page 245, Deed Records of
Bexar County, Texas and also 55 1/2 feet on Xxxxxx Xxxxxx, 00 feet on
Iowa Street.
Standard Ice Company - 000 X. Xxxxxxxxxx Xxxxxx:
0.430 acres, being known as Lot B-18, a portion of Lot C-18, and a
portion of Xxx X-00, XXX 0000, Xxx Xxxxxxx, Xxxxx Xxxxxx, Xxxxx.
Merchandise Repair Shop - 000 X. Xxxxxx:
The N. 55.0' of Lots 9, 10 and 11, except the E. 10.0 of Xxx 00, Xxxxx
0, XXX 000, Xxx Xxxxxxx, Xxxxx.
Xxxx County, Texas:
Laredo Mission Ice Plant - 0000 Xxxxxx Xxxxxx, Xxxxxx, Xxxxx:
Lots No. 3 and Xx. 0, Xxxxx Xx. 0000, X.X. Xxxx of Laredo, Texas.
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00
Xxx Xxxxx Xxxxxx, Xxxxx:
San Xxxxxx Mission Ice Plant - 3rd Street, San Angelo, Texas:
A 2.078 acre tract of land out of Block 42, Miles Addition and various
lots in Fair Banks Addition, City of San Xxxxxx, Xxx Xxxxx County,
Texas
Xxxxxxxx County, Texas:
Gonzales Mission Ice Plant - Gonzales, Texas:
A tract being part of Lot No. Four (4) in Block No. Two (2) in the
Original Inner Town of Gonzales, by and being situated in Xxxxxxxx
County, Texas and within the corporate limits of the City of Xxxxxxxx.
Xxxxxxxx County, Texas:
Luling Mission Ice Plant - Xxxxx Street, Luling, Texas:
A tract of land situated in the Xxxxxxx Xxxxxx Survey, X-00, Xxxxxx
Xxxxxxxx Xxxxxx, Xxxxx, being Lots No. Seventeen (17), Eighteen (18),
Nineteen (19), and Twenty (20) in the X.X. Xxxxx, First Addition in
the City of Luling, in Xxxxxxxx County, Texas; and Second Tract: Being
Lot No. Four (4) in Block No. Four (4) of the Xxxxxx Addition in City
of Luling in Xxxxxxxx County, Texas.
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