Exhibit
10.15


 


 


LEASE
AGREEMENT


BY
AND BETWEEN RONALD C. WORNICK, AS LANDLORD,


AND
THE WORNICK COMPANY, AS TENANT


 


TABLE OF CONTENTS


 


	
  Section 1.

  	
  Certain Definitions.

  	
  1

  
	
   

  	
   

  	
   

  
	
  Section 2.

  	
  Leased Premises.

  	
  3

  
	
   

  	
   

  	
   

  
	
  Section 3.

  	
  Term of Lease.

  	
  3

  
	
   

  	
   

  	
   

  
	
  Section 4.

  	
  Rental.

  	
  4

  
	
   

  	
   

  	
   

  
	
  Section 5.

  	
  Use of Premises.

  	
  4

  
	
   

  	
   

  	
   

  
	
  Section 6.

  	
  Operation of Business.

  	
  4

  
	
   

  	
   

  	
   

  
	
  Section 7.

  	
  Care of Leased Premises.

  	
  4

  
	
   

  	
   

  	
   

  
	
  Section 8.

  	
  Fixtures.

  	
  5

  
	
   

  	
   

  	
   

  
	
  Section 9.

  	
  Insurance.

  	
  5

  
	
   

  	
   

  	
   

  
	
  Section 10.

  	
  Indemnification.

  	
  6

  
	
   

  	
   

  	
   

  
	
  Section 11.

  	
  Mutual Waiver of Subrogation.

  	
  6

  
	
   

  	
   

  	
   

  
	
  Section 12.

  	
  Assignment, Mortgage and Subleasing.

  	
  6

  
	
   

  	
   

  	
   

  
	
  Section 13.

  	
  Net Lease.

  	
  7

  
	
   

  	
   

  	
   

  
	
  Section 14.

  	
  Casualty Damage.

  	
  7

  
	
   

  	
   

  	
   

  
	
  Section 15.

  	
  Risk of Loss.

  	
  9

  
	
   

  	
   

  	
   

  
	
  Section 16.

  	
  Default of Tenant.

  	
  10

  
	
   

  	
   

  	
   

  
	
  Section 17.

  	
  Condemnation.

  	
  12

  
	
   

  	
   

  	
   

  
	
  Section 18.

  	
  Taxes and Assessments.

  	
  14

  
	
   

  	
   

  	
   

  
	
  Section 19.

  	
  Tenant’s Compliance with Laws and
  Indemnifications.

  	
  15

  
	
   

  	
   

  	
   

  
	
  Section 20.

  	
  CPI Rent Adjustments.

  	
  16

  
	
   

  	
   

  	
   

  
	
  Section 21.

  	
  Waiver.

  	
  17

  
	
   

  	
   

  	
   

  
	
  Section 22.

  	
  Construction of Lease.

  	
  17

  



 





















 


	
  Section 23.

  	
  Prohibition Against Liens.

  	
  18

  
	
   

  	
   

  	
   

  
	
  Section 24.

  	
  Holding Over and Successors.

  	
  18

  
	
   

  	
   

  	
   

  
	
  Section 25.

  	
  Miscellaneous.

  	
  19

  
	
   

  	
   

  	
   

  
	
  Section 26.

  	
  Right of First Refusal.

  	
  21

  
	
   

  	
   

  	
   

  
	
  Section 27.

  	
  Purchase of the Property in the Event of
  Damage or Condemnation.

  	
  22

  
	
   

  	
   

  	
   

  
	
  Section 28.

  	
  Composite Lease.

  	
  23

  



 


ii





















 


LEASE
AGREEMENT


 


	
  THE STATE OF TEXAS

  	
  §

  	
   

  
	
   

  	
  §

  	
  KNOW ALL MEN BY THESE
  PRESENTS:

  
	
  COUNTY OF HIDALGO

  	
  §

  	
   

  



 


This Lease Agreement
(this “Lease”) is made and entered into by and between RONALD C. WORNICK, as
“LANDLORD”, and THE WORNICK COMPANY, a Texas corporation, as “TENANT”.


 


W
I T N E S S E T H:


 


Section 1.  Certain Definitions.


 


Each of the terms set
forth below shall have the meaning set forth opposite such term:


 


a.                                      
Property
One:  The real property located in Hidalgo County, Texas, described
on Exhibit A attached hereto and incorporated herein, including any
improvements located therein.


 


b.                                     
Property
Two:  The real property located in Hidalgo County, Texas, described
on Exhibit B attached hereto and incorporated herein, including any
improvements located therein.


 


c.                                      
“Property”
or “Properties”: Singularly, either Property One or Property Two, and in
the plural form, both Property One and Property Two.


 


d.                                     
Improvements:  The
improvements located on the Properties.


 


e.                                      
Leased
Premises:  The Properties, including the Improvements.


 


f.                                        
CPI:  The Consumer
Price Index for All Urban Consumers, All Items (Base year 1982-1984 = 100)
published by the United States Department of Labor, Bureau of Labor
Statistics.  If the Bureau of Labor Statistics substantially revises the
manner in which the CPI is determined, an adjustment shall be made in the
revised index which would produce results equivalent, as nearly as possible, to
those which would be obtained hereunder if the CPI were not so revised.  If
the 1982-1984 average shall no longer be used as an Index of 100, such change
shall constitute substantial revision.  If the CPI becomes unavailable to
the public because publication is discontinued, or otherwise, LANDLORD shall
substitute therefor a comparable index based upon changes in the cost of living
or purchasing power of the consumer dollar published by a governmental agency,
major bank, other financial institution, university or recognized financial


 


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publisher. 
Under no circumstances shall a decrease in the CPI ever reduce the monthly rent
or give rise to a credit in favor of TENANT.


 


g.                                     
CPI
Rent Adjustment and CPI Rent Adjustment Dates:  The CPI Rent Adjustment
shall take place on the following dates:


(1)                                 
January 1,
1998—”First Rent Adjustment Date”


(2)                                 
January 1, 200l
—”Second Rent Adjustment Date”


(3)                                 
January 1, 2004
—”Third Rent Adjustment Date”


(4)                                 
January 1, 2007
—”Fourth Rent Adjustment Date”


 


h.                                     
Fair
Market Value or Fair Market Value Purchase Price:  “Fair Market Value” and
“Fair Market Purchase Price” shall be determined by appraisal as set forth in
this paragraph.  In the event that it becomes necessary to determine the
Fair Market Value or Fair Market Value Purchase Price of either Property or
both Properties for any purpose of this Lease, the party required or permitted
to give notice of such required determination shall include in the notice the
name of a person selected to act as an appraiser on its behalf.  Within
ten (10) days after receipt of any such notice, LANDLORD (or TENANT, as the
case may be) shall by notice to TENANT (or LANDLORD, as the case may be)
appoint a second person as an appraiser on its behalf.  The appraisers
thus appointed (each of whom must be a member of the American Institute of Real
Estate Appraisers or any successor organization thereto), within forty-five
(45) days after the date of the notice appointing the first appraiser, shall
proceed to appraise the Property or Properties, as the case may be, to
determine the Fair Market Value or Fair Market Value Purchase Price thereof as
of the relevant date (giving effect to the impact, if any, of inflation or
deflation from the date of their decision to the relevant date); provided,
however, that if only one appraiser shall have been so appointed, or if two
appraisers shall have been so appointed but only one such appraiser shall have
made such determination within fifty (50) days after the making of TENANT’s or
LANDLORD’s request, then the determination of such appraiser shall be final and
binding upon the parties.  If two appraisers shall have been appointed and
shall have made their determinations within the respective requisite periods
set forth above and if the difference between the amounts so determined shall
not exceed ten percent (10%) of the lesser of such amounts, then the Fair
Market Value or Fair Market Value Purchase Price shall be an amount equal to
fifty percent (50%) of the sum of the amounts so determined.  If the
difference between the amounts so determined shall exceed ten percent (10%) of
the lesser of such amounts, then such two appraisers shall have twenty (20)
days to appoint a third appraiser, but if such appraisers fail to do so, then
either party may request the American Arbitration Association or any successor
organization thereto to appoint an appraiser within twenty (20) days of such request,
and


 


2





















 


both
parties shall be bound by any appointment so made within such 20-day
period.  If no such appraiser shall have been appointed within such twenty
(20) days or within ninety (90) days of the original request for a
determination of Fair Market Value or Fair Market Value Purchase Price,
whichever is earlier, either LANDLORD or TENANT may apply to any court having
jurisdiction to have appointment made by such court.  Any appraiser
appointed by the American Arbitration Association or by such court shall be
instructed to determine the Fair Market Value or Fair Market Value Purchase
Price within thirty (30) days after appointment of such appraiser.  The
determination of the appraiser which differs most in terms of dollar amount
from the determinations of the other two appraisers shall be excluded, and
fifty percent (50%) of the sum of the remaining two determinations shall be
final and binding upon LANDLORD and TENANT as the Fair Market Value or Fair
Market Value Purchase Price for such interest.  This provision for
determination by appraisal shall be specifically enforceable to the extent such
remedy is available under applicable law, and any determination hereunder shall
be final and binding upon the parties except as otherwise provided by applicable
law.  LANDLORD and TENANT shall each pay the fees and expenses of the
appraiser appointed by it and each shall pay one-half of the fees and expenses
of the third appraiser and one-half of all other costs and expenses incurred in
connection with each appraisal.  Notwithstanding any determination
otherwise by such appraisal, the Fair Market Value and Fair Market Value
Purchase Price shall not be less than the amount of the outstanding principal
and accrued unpaid interest on all indebtedness of LANDLORD for which the
Leased Premises is pledged as collateral to secure payment and performance.


 


Section 2.  Leased Premises.


 


a.                                      
In
consideration of the conditions, covenants and agreements hereinafter set forth
to be kept and performed by TENANT, LANDLORD does hereby lease the Leased
Premises to TENANT, and TENANT does hereby lease the Leased Premises from
LANDLORD.


 


b.                                     
This
Lease and the Leased Premises are subject to all covenants, easements,
restrictions, encumbrances, outstanding mineral interests and governmental
regulatory ordinances to the extent they are valid and in force and effect.


 


Section 3.  Term of Lease.


 


a.                                      
This
Lease shall be for a term commencing on the effective date specified below and
terminating at midnight on December 31, 2010.


 


b.                                     
TENANT
shall remain bound by this Lease in accordance with its terms and nothing shall
entitle TENANT to any abatement,


 


3





















 


reduction,
suspension or deferment of the monthly rental or other sums payable by TENANT
hereunder, except as otherwise specifically provided in this Lease.


 


Section 4.  Rental.


 


TENANT agrees to pay
LANDLORD a rental of Thirty Three Thousand One Hundred Fifteen Dollars
($33,115.00) per calendar month subject to increase as provided herein. 
All rentals shall be due and payable monthly in advance on the first day of
each month without the right of setoff or deduction except as expressly
provided herein.  If this Lease commences on other than the first day of a
month, then the rental for such month shall be prorated based on the number of
days in such month that the Lease was in force.


 


Section 5.  Use of Premises.


 


Subject to the terms and
provisions of this, TENANT may use the Leased Premises for any lawful purposes.


 


Section 6.  Operation of Business.


 


TENANT covenants and
agrees as follows:


 


a.                                      
Not
to permit any illegal or immoral practice to be carried on or committed on the
Leased Premises; or use or allow the Leased Premises to be used for any purpose
that might invalidate or increase the rate of insurance on the Leased Premises.


 


b.                                     
Not
perform any act or carry on any practice on the Leased Premises which may
damage the Leased Premises or which would constitute a nuisance.


 


Section 7.  Care of Leased Premises.


 


a.                                      
TENANT
shall not make any alterations or additions to the Leased Premises without the
prior written consent of LANDLORD, and any such additions and alterations made
by TENANT shall become and remain the property of LANDLORD at the termination
of this Lease, except to the extent that LANDLORD agrees otherwise in the above
required written consent.  All authorized alterations, additions and
improvements which are erected, constructed or installed by TENANT shall comply
with all applicable governmental laws, ordinances, regulations and other requirements.


 


b.                                     
TENANT
shall keep the Leased Premises in good working order, repair and condition
(which repairs shall include necessary replacements and all expenditures
required to comply


 


4





















 


with
all laws now or hereafter enacted, whether the work is structural, involves a
capital expenditure or results in a benefit extending beyond the term of this
Lease).  TENANT is presently occupying the Leased Premises, and agrees to
accept the same “AS IS” without any agreements, representations, understandings
or obligations on the part of LANDLORD to perform any alterations, repairs or
replacement.


 


Section 8.  Fixtures.


 


a.                                      
TENANT
shall be permitted to install and maintain its trade fixtures and equipment on
the Leased Premises, and all such trade fixtures and equipment may be removed
by TENANT, provided, however, that any damage to the Leased Premises caused by
such removal shall be promptly repaired by TENANT.


 


Section 9.  Insurance.


 


a.                                      
At
all times during the term of this Lease, TENANT, as additional rent, shall
purchase and maintain a policy or policies of comprehensive general liability
insurance providing personal injury and property damage liability coverages
with respect to the Leased Premises and the business conducted thereon, with
limits approved by LANDLORD.  Such insurance policy or policies shall name
both TENANT, LANDLORD and LANDLORD’s mortgagee of the Leased Premises as named
insureds.


 


b.                                     
TENANT,
as additional rent, shall purchase and maintain during the term of this Lease
“all risk” casualty insurance policies covering the Improvements, together with
such endorsements as may reasonably be required by LANDLORD from time to time
to fully insure the Improvements on a replacement cost basis.  Such
insurance policy(s) shall name LANDLORD as the insured, and shall provide a
loss payable clause in favor of LANDLORD and any mortgagee of the LANDLORD.


 


c.                                      
If
LANDLORD so requests, TENANT, as additional rent, shall purchase and maintain a
rental value insurance policy covering risk of loss during the first twelve
(12) months of reconstruction necessitated by the occurrence of any of the
hazards described in Section 14, Casualty Damage, in an amount covering at
least twelve months rental.  Such insurance policy shall name LANDLORD as
the insured.  Any loss proceeds collected by LANDLORD pursuant to such
policy shall be used to defray TENANT’s rental obligation to the extent of such
amounts actually received by LANDLORD.


 


d.                                     
Each
of the foregoing policies of insurance shall be in form and written by insurers
approved by LANDLORD, which approval shall not be unreasonably withheld, and
shall provide that the insurers will not cancel or change such insurance
without first


 


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giving
LANDLORD, TENANT and LANDLORD’s mortgagee not less than ten (10) days prior
written notice.  LANDLORD and LANDLORD’s mortgagee shall be furnished a
duplicate original of all such insurance policies.


 


e.                                      
If
TENANT fails to timely provide the liability, casualty or the rental value
insurance specified in this Section 9, then LANDLORD may elect to provide
such insurance and, in such event, TENANT shall pay to LANDLORD, as additional
rent, the cost of such insurance within ten (10) days after receipt of a
statement of such costs from LANDLORD.


 


Section 10.  Indemnification.


 


TENANT covenants and
agrees to protect, indemnify and save LANDLORD and LANDLORD’s heirs, legal
representatives and assigns harmless from all claims for damages and/or
injuries to persons or property arising from injury to persons or property on
or adjacent to the Leased Premises, including all costs, attorney’s fees,
expenses and liabilities incurred in connection with any such claim or action,
without limit and without regard to the cause or causes thereof or the
negligence of LANDLORD, its agents, employees or any other person or entity,
whether such negligence be sole, joint or concurrent, active or passive, or
because of any defect in, on or upon the Leased Premises.


 


Section 11.  Mutual Waiver of Subrogation.


 


LANDLORD hereby waives
any right of recovery that LANDLORD may have against TENANT for the loss of or
damage to any of LANDLORD’S property resulting from any cause whatsoever to the
extent that collection for such loss or damage is made by LANDLORD under any
insurance policy or policies in effect at the time such loss or damage occurs;
and TENANT hereby waives any right of recovery that TENANT may have against
LANDLORD for the loss of or damage to any of TENANT’S property resulting from
any cause whatsoever to the extent that collection for such loss or damage is
made by TENANT under any insurance policy or policies in effect at the time of
such loss or damage.  The mutual waivers set forth in this paragraph apply
only to the extent they are permitted by law, the loss or damage is covered by
insurance proceeds, and such waivers do not adversely affect any insurance
coverage.


 


Section 12.  Assignment, Mortgage and
Subleasing.


 


a.                                      
Assignment
by Tenant.  TENANT shall not, whether by operation of law or
otherwise, assign this Lease, or any part thereof, without the prior written
approval of LANDLORD in each instance.


 


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b.                                     
Subleases.  TENANT shall
not sublease all or any part of the Leased Premises without prior written approval
of LANDLORD.


 


c.                                      
Mortgages.  TENANT shall
not mortgage all or any part of TENANT’S leasehold estate without prior written
approval of LANDLORD.


 


d.                                     
Approvals
by Landlord.  LANDLORD agrees not to unreasonably withhold its
consent to a proposed assignment, sublease or mortgage of the Leased
Premises.  The approval by LANDLORD of any of the acts specified in this
Section shall not relieve TENANT, or TENANT’s authorized assignee,
transferee or subtenant from liability under this Lease.


 


Section 13.  Net Lease.


 


TENANT agrees that this
Lease is to be a “net lease” and that LANDLORD is to receive all rentals and
other sums required to be paid by TENANT absolutely free from any charges,
assessments, taxes, expenses or deductions of any kind.


 


Section 14.  Casualty Damage.


 


a.                                      
All
proceeds payable by reason of any loss or damage to the Leased Premises, or any
portion thereof, and insured under any policy of insurance required by this
Lease shall be paid to LANDLORD and held by LANDLORD in trust and shall be made
available for reconstruction or repair, as the case may be, of any damage to or
destruction of the Leased Premises, or any portion thereof, and shall be paid
out by LANDLORD from time to time for the reasonable cost of such
reconstruction or repair.  Any excess proceeds of insurance remaining
after the completion of the restoration or reconstruction of the Leased
Premises shall be retained by LANDLORD free and clear upon completion of any
such repair and restoration except as otherwise specifically provided below in
this Section.  In the event neither LANDLORD nor TENANT is required or
elects to repair and restore, all such insurance proceeds shall be retained by
LANDLORD.  All salvage resulting from any risk covered by insurance shall
belong to LANDLORD except that any salvage relating to additions paid for by
TENANT or to TENANT’s personal property shall belong to TENANT.


 


b.


 


(1)                                 
If
during the term of this Lease, Property One and/or Property Two is totally or
partially destroyed from a risk covered by the insurance described in
Section 9 and if such damaged Property is rendered unsuitable for TENANT’s
use, TENANT shall have the option, by giving notice to LANDLORD within sixty
(60) days following the date of such


 


7





















 


destruction, to (i) restore such
damaged Property to substantially the same condition as existed immediately
before the damage or destruction, or (ii) offer to acquire such damaged
Property from LANDLORD for a purchase price equal to the Fair Market Value
Purchase Price of such Property immediately prior to such damage or
destruction.  Such damage or destruction shall not terminate this Lease.


 


(2)                                 
If
during the term of this Lease, Property One and/or Property Two is partially
destroyed from a risk covered by the insurance described in Section 9, but
such damaged Property is not thereby rendered unsuitable for TENANT’s use,
TENANT shall restore such damaged Property to substantially the same condition
as existed immediately before the damage or destruction.  Such damage or
destruction shall not terminate this Lease; provided, however, if TENANT cannot
within a reasonable time obtain all necessary governmental approvals, including
building permits, licenses, conditional use permits and any certificates of
need, after diligent efforts to do so, in order to be able to perform all
required repair and restoration work and to operate such damaged Property for
TENANT’s use in substantially the same manner as immediately prior to such
damage or destruction, TENANT may offer to acquire such damaged Property for a
purchase price equal to the Fair Market Value Purchase Price of such damaged
Property immediately prior to such damage or destruction.


 


(3)                                 
If
the cost of the repair or restoration to a damaged Property exceeds the amount
of insurance proceeds received by LANDLORD, TENANT shall be obligated to
contribute any excess amount needed to restore the such damaged Property. 
Such amount shall be paid by TENANT to LANDLORD to be held in trust together
with any other insurance proceeds for application to the cost of repair and restoration.


 


(4)                                 
In
the event LANDLORD does not accept TENANT’s offer to so purchase such damaged
Property within thirty (30) days after the date of such offer, TENANT may
either (a) withdraw its offer to purchase such damaged Property and proceed to
restore such damaged Property to substantially the same condition as existed
immediately before the damage or destruction, or (b) terminate this Lease as to
such damaged Property and LANDLORD shall retain the insurance proceeds, and TENANT
shall pay to LANDLORD, on demand, the amount of any deductible or uninsured
loss arising in connection therewith.


 


(5)                                 
In
the event LANDLORD accepts TENANT’s offer to purchase such damaged Property,
this Lease shall terminate


 


8





















 


as to such damaged Property upon
payment of the purchase price and LANDLORD shall remit to TENANT all insurance
proceeds for such damaged Property being held in trust by LANDLORD or assign to
TENANT all rights to receive the insurance proceeds if not already paid to
LANDLORD.


 


c.                                      
If
during the term of this Lease, either Property One and/or Property Two is
totally or materially destroyed from a risk not covered by the insurance
described in Section 9, whether or not such damage or destruction renders
such damaged Property unsuitable for TENANT’S use, TENANT shall either (i)
restore such damaged Property to substantially the same condition it was in
immediately before such damage or destruction and such damage or destruction
shall not terminate this Lease or (ii) offer to acquire the damaged Property at
its Fair Market Value Purchase Price immediately prior to such damage or
destruction.


 


d.                                     
All
insurance proceeds payable by reason of any loss of or damage to TENANT’s
personal property shall be paid to TENANT and TENANT shall use such insurance
proceeds in trust to pay the cost of repairing or replacing TENANT’s personal
property.


 


e.                                      
If
TENANT is required or elects to restore the Property or Properties as provided
in this section, TENANT shall also restore all alterations and improvements
made by TENANT, as well as TENANT’s personal property.


 


f.                                        
This
Lease shall remain in full force and effect and TENANT’s obligation to make
rental payments and to pay all other charges required by this Lease shall
remain unabated during any period required for repair and restoration, except
that the proceeds of rental insurance, if any, paid to LANDLORD shall
constitute payment of such amounts by TENANT.


 


g.                                     
Any
termination of this Lease to a damaged Property pursuant to this
Section shall cause any right of first refusal granted to LANDLORD under
this Lease to be terminated and to be without further force or effect as to the
damaged Property.


 


h.                                     
LANDLORD
hereby waives any statutory or common law rights of termination which may arise
by reason of any damage or destruction of the Properties or any part thereof.


 


i.                                         
If
LANDLORD’S mortgagees do not allow the insurance proceeds to be used for
restoration, then TENANT’s sole remedy shall be to terminate this Lease as to
such damaged Property.


 


Section 15.  Risk of Loss.


 


During the term of this
Lease, the risk of loss or of decrease in the enjoyment and beneficial use of
the Leased


 


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Premises in consequence of the damage or destruction
thereof by fire, the elements, casualties, thefts, riots, wars or otherwise, is
assumed by TENANT and, LANDLORD shall in no event be answerable or accountable
therefor nor shall any of the events mentioned in this Section entitle
TENANT to any abatement of monthly rental except as specified provided in this
Lease.


 


Section 16.  Default of Tenant.


 


1.                                      
Events
of Default.  The following events shall be deemed to be events
of default by TENANT under this Lease:


 


a.                                      
If TENANT shall fail to pay any
installment of rent, additional rent or other sum of money payable hereunder
when due and the continuance of such failure for ten (10) days following
written notice hereof from LANDLORD to TENANT.


 


b.                                     
If TENANT shall fail to comply
with any term, provision, or covenant of this Lease, other than the payment of
rent, additional rent or other sum of money to LANDLORD, and shall not cure or
correct such failure within a reasonable time but, in no event, more than
thirty (30) days following notice; provided, however, if the nature of the
TENANT’s failure is such that more time is reasonably required in order to
cure, TENANT shall not be in default if TENANT commences to cure within such
time period and thereafter with reasonable diligence seeks to cure such failure
to completion.


 


c.                                      
If a petition in bankruptcy or
insolvency or for reorganization or for the appointment of a receiver or
trustee of all or a portion of the property of TENANT shall be filed against
TENANT in any court, pursuant to any statute either of the United States or of
any state, and if, within thirty (30) days thereafter, TENANT fails to secure a
discharge thereof, or if TENANT shall voluntarily file any such petition, or
make an assignment for the benefit of creditors.


 


d.                                     
If TENANT’s leasehold estate
shall be taken under writ of execution or other process of law in any action
against TENANT.


 


e.                                      
If TENANT shall abandon or
vacate the Leased Premises.


 


2.                                      
Remedies.  If an event of
default shall have occurred, LANDLORD shall have the right, without further
notice or demand of any kind to TENANT or any other party, then or at any time
thereafter, to the extent permitted by law, to pursue any one or


 


10





















 


more
of the following remedies in addition to all other rights or remedies provided
herein or at law or in equity.


 


a.                                      
LANDLORD may terminate this
Lease and forthwith repossess the Leased Premises and be entitled to recover
forthwith as damages a sum of money equal to the total of (i) the reasonable
cost of recovering the Leased Premises, (ii) the unpaid rent and additional
rent earned at the time of termination, the cost of curing TENANT’s other
defaults plus interest thereon from the due date at the rate herein provided,
and (iii) an amount equal to the then present value of the balance of the rent
and additional rent for the remainder of the term, less the then present value
of the fair rental value of the Leased Premises for the remainder of the
term.  The amounts computed in accordance with the foregoing subclause
(iii) shall both be discounted in accordance with accepted financial practice
at the rate of four percent (4%) per annum to determine present value.


 


b.                                     
LANDLORD may elect to terminate
TENANT’s right of possession without terminating this Lease, in which event
TENANT agrees to surrender possession and vacate the Leased Premises
immediately and deliver possession to LANDLORD, and TENANT hereby grants
LANDLORD full and free license to enter in and upon the Leased Premises or any
part thereof and to expel or remove TENANT or any other person or party who may
be occupying or within the Leased Premises or any part thereof and remove any
and all property therefrom.  Such property may be removed by LANDLORD and
stored in a public warehouse or elsewhere at the cost of and for the account of
TENANT without terminating this Lease or releasing TENANT in whole or in part
from TENANT’s obligations to pay rent, additional rent and other charges and
perform any of the covenants, conditions and agreements to be performed by
TENANT as provided in this Lease, and without LANDLORD being deemed in any
manner guilty of trespass, eviction, forcible entry or detainer, and without
relinquishing LANDLORD’S rights as herein provided.


 


c.                                      
If LANDLORD re-enters the Leased
Premises without terminating this Lease, then LANDLORD may relet the Leased
Premises or any part or parts thereof, either in the name of LANDLORD or
otherwise, for a term which may at LANDLORD’S option be less than or exceed the
period which would otherwise have constituted the balance of the term and upon
such other terms and conditions as LANDLORD may deem advisable.  TENANT
shall pay LANDLORD for each month of the period which would otherwise have
constituted the balance of the term, any deficiency between (i) the sum of one
monthly installment of rent and other costs that would have been payable for
the month in question but for such re-entry or


 


11





















 


termination, and (ii) the net
amount, if any, of the rents collected on account of the lease or leases of the
Leased Premises for each month of the period which would otherwise have
constituted the balance of the term.  The failure of LANDLORD to relet the
Leased Premises or any part or parts thereof shall not release or affect
TENANT’s liability for damages; provided, however, that LANDLORD shall use
reasonable efforts to relet the Leased Premises.  There shall be added to
the said deficiency such expenses as LANDLORD may reasonably incur in
connection with any reletting (such as court costs, attorney’s fees, brokerage
costs and expenses for putting and keeping the Leased Premises in good order or
for preparing the same for reletting).  Any deficiency shall be paid in
monthly installments by TENANT on the rent day specified in this Lease, and any
suit brought to collect the amount of the deficiency for any month shall not
prejudice in any way the rights of LANDLORD to collect the deficiency for any
subsequent month by a similar proceeding.  No such re-entry or taking
possession of the Leased Premises by LANDLORD shall be construed as an election
on its part to terminate this Lease unless a written notice of such termination
is given to TENANT or unless the termination thereof is decreed by a court of
competent jurisdiction.


 


Any amount collected by
LANDLORD from subsequent Tenants for any rental period in excess of that
provided for in this Lease for such period shall be credited to TENANT in
reduction of TENANT’s liability for any rental period in which the amount
collected by LANDLORD shall be less than that provided for by this Lease; but
TENANT shall only be entitled to receive any such excess rentals at the end of
the term and without interest.  An election to re-enter the Leased Premises
(without terminating this Lease) and the reletting or not reletting of the
Leased Premises shall not thereafter prevent LANDLORD from electing to
terminate this Lease for such previous breach.


 


In the event it is
necessary for LANDLORD to bring suit for such rental payments or other charges
as they accrue or in order to collect any damages, LANDLORD shall have the
right to allow such rental or deficiencies to accumulate and to bring an action
on several or all of the deficiencies at one time.  Any such suit shall
not prejudice in any way the right of LANDLORD to bring a similar action for
subsequent rental or damage deficiencies.


 


Section 17.  Condemnation.


 


a.


 


(1)                                 
“Condemnation”
means (i) the exercise of any governmental power, whether by legal proceedings
or


 


12





















 


(2)                                 
otherwise,
by a Condemnor or (ii) a voluntary [  ] transfer by LANDLORD to any
Condemner, either [  ] of Condemnation or while legal proceedings for
[  ] are pending.


 


(3)                                 
“Date
of Taking” means the date the Condemnor has the right to possession of the
property being condemned.


 


(4)                                 
“Award”
means all compensation, sums or anything of value awarded, paid or received on
a total or partial Condemnation.


 


(5)                                 
“Condemnor”
means any public or quasi-public authority, or private corporation or
individual, having the power of Condemnation.


 


b.                                     
If
during the term of this Lease there is any taking of all or any part of the
Leased Premises or any interest in this Lease by Condemnation, the rights and
obligations of the parties shall be determined by this Section.


 


c.                                      
If
there is any taking of all of Property One and/or Property Two by Condemnation
or if a portion of such condemned Property is taken so that such condemned
Property is rendered unfit for TENANT’s use, then this Lease shall terminate as
to such condemned Property on the Date of Taking.


 


d.                                     
If
there is a taking of a portion of Property One or Property Two by Condemnation,
this Lease shall remain in effect if such condemned Property is not thereby
rendered unsuitable for TENANT’s use.  If, however, such condemned
Property is thereby rendered unsuitable for TENANT’s use, TENANT shall have the
right (a) to restore such condemned Property, to the extent possible, to
substantially the same condition as existed immediately before the partial
taking and, subject to the rights of LANDLORD’s mortgagee, LANDLORD shall make
the condemnation award available to TENANT for such restoration, or (b) to
offer to acquire such condemned Property from LANDLORD for a purchase price
equal to the Fair Market Value Purchase Price of such condemned Property
immediately prior to such partial taking, in which event this Lease shall
terminate as to such condemned Property upon payment of the purchase
price.  TENANT shall exercise its option by giving LANDLORD notice thereof
within (60) days after TENANT receives notice of the taking.  In the event
LANDLORD does not accept TENANT’s offer to so acquire such condemned Property
within thirty (30) days after receipt of the notice described in the preceding
sentence, TENANT may either (a) withdraw its offer to acquire such condemned
Property and proceed to restore such condemned Property to the extent possible,
to substantially the same condition as existed immediately before the partial
taking,


 


13





















 


or (b)
terminate this Lease as to the condemned Property by written notice.


 


e.                                      
If
there is a partial taking of Property One and/or Property Two and this Lease
remains in full force and effect as to such condemned Property or Properties,
TENANT shall accomplish all necessary restoration and, subject to the rights of
LANDLORD’s mortgagee, LANDLORD shall make the condemnation award for the
condemned Property available to TENANT for such restoration.


 


f.                                        
In
the event LANDLORD accepts TENANT’S offer to purchase such condemned Property,
the entire Award shall belong to TENANT and LANDLORD agrees to assign to TENANT
all of its rights thereto at closing of the purchase.  In any other event,
the entire Award shall belong to and be paid to LANDLORD, except that, if this
Lease is terminated as to such condemned Property, and subject to the rights of
the LANDLORD’s mortgagee and as otherwise provided herein, TENANT shall be entitled
to receive from the Award a sum attributable to TENANT’s personal property and
any reasonable removal and relocation costs if specifically included in the
Award.


 


If TENANT is required or
elects to restore such condemned Property, LANDLORD agrees that, subject to the
rights of the LANDLORD’S mortgagees, its portion of the Award shall be used for
such restoration and it shall hold such portion of the Award in trust, for
application to the cost of the restoration.  If the LANDLORD’S mortgagees
do not allow the Award to be used for restoration, then TENANT’s sole remedy
shall be to terminate this Lease as to such condemned Property.


 


Section 18.  Taxes and Assessments.


 


a.                                      
TENANT
shall pay to LANDLORD, as additional rent, within ten (10) days after receipt
of a statement, the amount of all taxes and assessments levied and assessed by
any lawful authority against the Leased Premises during the term of this Lease,
including, but not limited to, taxes and assessments levied and assessed for
1995.  The amount of additional rent to be paid to LANDLORD by TENANT
because of such taxes and assessment shall be prorated between LANDLORD and
TENANT for the last year of the term of this Lease based upon the number of
days in such year that this Lease was in force.


 


b.                                     
TENANT
shall pay all taxes and assessments levied and assessed on the value of its
personal property prior to their becoming delinquent.


 


14





















 


Section 19.  Tenant’s Compliance with Laws and
Indemnifications.


 


a.                                      
TENANT
shall, at its expense, comply with all laws, rules, orders, ordinances,
directions, regulations and requirements of federal, state, county and
municipal authorities pertaining to TENANT’s use of the Leased Premises
regardless of when they become effective, including, without limitation, the
Americans with Disabilities Act, all applicable federal, state and local laws,
regulations or ordinances pertaining to air and water quality, hazardous
materials (as hereinafter defined), waste, disposal, air emissions and other
environmental, zoning and land use matters, and with any directive or order of
any public officer or officers, pursuant to law, which shall impose any duty
upon TENANT with respect to the use or occupation of the Leased Premises.


 


b.                                     
TENANT
shall not cause or knowingly permit any Hazardous Material to be brought upon,
kept or used in or about the Leased Premises by TENANT, its employees, invitees
or guests without the prior written consent of LANDLORD.


 


c.                                      
In addition to, and
without limitation on any general indemnity obligations of TENANT under this
Lease, TENANT specifically agrees that it shall indemnify, defend and hold
LANDLORD harmless from any and all claims, judgements, damages, penalties,
fines, costs, liabilities or losses (including, without limitation, diminution
in value of the Leased Premises, damages for the loss or restriction on use of
rentable or usable space or of any amenity of the Leased Premises, and sums
paid in settlement of claims, attorney’s fees, consultant fees and expert fees)
which arise during or after the term as a result of any breach by TENANT of its
obligations under this Section or any contamination of the Leased Premises
resulting from the presence of Hazardous Materials on or about the Leased
Premises caused or permitted by TENANT.  This indemnification of LANDLORD
by TENANT includes, without limitation, costs incurred in connection with any
investigation of site conditions, and any cleanup, remedial, removal or
restoration work required by any federal, state, or local governmental agency
or political subdivision.  Without limiting the foregoing, if the presence
of any Hazardous Material on the Leased Premises caused or permitted by TENANT
results in any contamination of the Leased Premises or surrounding area, TENANT
shall promptly take all actions at its sole expense as are necessary to return
such property to the condition existing prior to the introduction of any such
Hazardous Material; provided, however, that LANDLORD’s approval of such actions
shall first be obtained.  TENANT further agrees to defend LANDLORD, its
agents, employees, and assigns in any administrative or judicial proceeding
brought by private individuals or governmental entities seeking recovery of
damages for personal injury or property damage, or recovery of civil penalties
or fines out of,


 


15





















 


connected
with, or relating to any breach by TENANT of its obligations under this
Section or any contamination of the Leased Premises resulting from the
presence of Hazardous Materials on or about the Leased Premises caused or
permitted by TENANT.  The foregoing indemnity shall survive the expiration
or earlier termination of this Lease.


 


As used herein, the term
“Hazardous Material” or “Hazardous Materials” means any pollutant, toxic
substance, hazardous waste, hazardous material, hazardous substance, or oil as
defined in or pursuant to the Resource Conservation and Recovery Act, as
amended, the Comprehensive Environmental Response, Compensation, and Liability
Act, as amended, or all other federal, state or local environmental law,
regulation, ordinance, rule, or bylaw, whether existing as of the date hereof,
previously enforced or subsequently enacted.


 


Section 20.  CPI Rent Adjustments.


 


Commencing with the First
Rent Adjustment Date, the monthly rent shall be adjusted by the percentage
increase, if any, in the CPI from January 1, 1996.  Each subsequent
CPI rental adjustment shall be by reference to the CPI in effect at the time of
the prior CPI Rent Adjustment Date.  Pending determination of the actual
adjustment, TENANT shall pay an estimated adjusted rental, as reasonably
determined by LANDLORD by reference to the then available CPI
information.  Upon notification of the actual adjustment after the
publication of the required information, any overpayment shall be credited
against the next installment of rent due, and any underpayment shall be
immediately due and payable by TENANT.  LANDLORD’s failure to request
payment of an estimated or actual rent adjustment shall not constitute a waiver
of the right to any adjustment provided for in this Lease or in this
Section.  The CPI Rent Adjustments are:


 


a.                                      
First
CPI Rent Adjustment.  The monthly rental payable for January 1, 1998
to December 31, 2000 (the “First Rent Adjustment Date”) shall be the
greater of the following: (i) $33,115, or (ii) the sum of $33,115 plus the
amount of rent determined by the percentage increase in the CPI for the period
from January 1, 1996 to December 31, 1997 multiplied by $33,115
(“First Adjusted Rental Period”).


 


b.                                     
Second
CPI Rent Adjustment.  The monthly rental payable for January 1, 2001
to December 31, 2003, shall be the greater of the following: (1) the
monthly rent payable during the First Adjusted Rental Period or (ii) the amount
of rent determined by the percentage increase in the CPI from January 1,
1998 to December 30, 2000 multiplied by the monthly rent paid during the
First Adjusted Rental Period (“Second Adjusted Rental Period”).


 


16





















 


c.                                      
The
monthly rental payable for January 1, 2004 to December 31, 2006,
shall be the greater of the following: (i) the monthly rent payable during the
Second Adjusted Rental Period, or (ii) the amount of rent determined by the
percentage increase in the CPI from January 1, 2001 to December 30,
2003 multiplied by the monthly rent paid during the Second Adjusted Rental
Period (“Third Adjusted Rental Period”).


 


d.                                     
The
monthly rental payable for January 1, 2007 to December 31, 2010,
shall be the greater of the following: (i) the monthly rent payable during the
Third Adjusted Rental Period, or (ii) the amount of rent determined by the
percentage increase in the CPI from January 1, 2004 to January 1,
2006 multiplied by the monthly rent paid during the Third Adjusted Rental Period
(“Fourth Adjusted Rental Period”).


 


Section 21.  Waiver.


 


For the purposes of
determining the rights of LANDLORD and TENANT hereunder, it is agreed that no
act or omission of LANDLORD shall be construed or held to be a waiver of its
rights hereunder, except insofar as LANDLORD may specifically waive a
particular right in writing.  Such a written waiver by LANDLORD shall
apply only to the default existing at the time of its execution and described
therein and shall not be deemed or held to be a waiver of a subsequent default
of the same or any other nature.  A written consent given by LANDLORD
pursuant to the terms and provisions of this Lease shall never be deemed or
held to be consent to a subsequent performance of the same or any other act. 
LANDLORD’s receipt of monies from TENANT under the terms of this Lease shall
never be deemed or held to be a waiver of the rights of LANDLORD hereunder.


 


Section 22.  Construction of Lease.


 


a.                                      
In
the event any provision of this Lease shall be held to be invalid or
unenforceable, such holding shall not be deemed to affect the validity and
enforceability of the remainder of the Lease, nor of the same provision as
applied to other persons or circumstances.  This Lease shall be construed
with the express intention of the parties to it that it shall be valid and
enforceable in every respect to the extent permitted by law.


 


b.                                     
This
Lease sets forth all the covenants, promises, agreements, conditions and
understandings between LANDLORD and TENANT concerning the Leased Premises and
there are no covenants, promises, agreements, conditions or understandings,
either oral or written, between them other than are herein set forth. 
Except as herein otherwise provided, no subsequent alteration, amendment,
change or addition to this Lease shall be binding upon LANDLORD or TENANT
unless reduced to writing and signed by them.


 


17





















 


c.                                      
Time
is of the essence.


 


Section 23.  Prohibition Against Liens.


 


TENANT shall have no
power or authority, expressed or implied, to do, and TENANT is hereby
prohibited from doing, any act or to make any contract that may create a Lien
upon, or in any manner to bind, the interest or estate of LANDLORD in the
Leased Premises.  Any approval by LANDLORD to TENANT to do any work upon
the Leased Premises, or any part thereof, shall never be construed to
constitute an express or implied agency in TENANT to bind or encumber the
interest or estate of LANDLORD in any way whatsoever.  Any relationship
between the parties hereto other than that of landlord and tenant is hereby
expressly negated.  TENANT covenants and agrees that TENANT will pay or
cause to be paid all costs, charges, and expenses that become due and payable
on account of work on, at, to, from, or about the Leased Premises authorized by
TENANT, and will not permit any valid and enforceable lien to be established
against LANDLORD’s interest in the Leased Premises on account of such work. 
TENANT shall protect, indemnify and hold LANDLORD harmless from any costs,
claims, causes of action or expenses including, without limitation, attorney’s
fees and court costs, arising from or in any manner pertaining to the approved
construction or installation of any alterations, additions or improvements to
the Leased Premises and/or any claim for unpaid bills, or any claim of or
creation of a Lien upon, or in any manner pertaining to the interest or estate
of LANDLORD in the Leased Premises.


 


Section 24.  Holding Over and Successors.


 


a.                                      
Holding
Over by Tenant.  TENANT shall pay LANDLORD the monthly rental,
additional rent and other charges prorated on a per diem basis for each day
TENANT shall retain possession of the Leased Premises or any part thereof after
expiration or earlier termination of this Lease, together with all damages
sustained by LANDLORD on account thereof.  This provision shall not serve
as permission for TENANT to hold over nor serve to extend the term (although
tenant shall remain a tenant at sufferance bound to comply with all provisions
of the Lease until TENANT vacates the Leased Premises.) LANDLORD shall have the
right, at any time after expiration or earlier termination of this Lease or TENANT’s
right to possession, to reenter and possess the Leased Premises and remove all
property and persons therefrom, and LANDLORD shall have such other remedies for
holdover as may be available to LANDLORD under other provisions of this Lease
or applicable laws.


 


b.                                     
Successors.  All rights and
liabilities herein given, or imposed upon, the respective parties shall extend
and bind the several respective heirs, legal representatives, successors and


 


18





















 


assigns
of the said parties subject to the limitations on assignment and subleasing
contained herein.


 


Section 25.  Miscellaneous.


 


1.                                      
Notices.  Any notice,
request, demand, or other communication which, under the terms of this Lease or
under any statute or other law, must or may be given or made by the parties
hereto, shall be in writing, shall be sent by and deemed received when
deposited in the United States mails, registered or certified mail, postage
prepaid, return receipt requested, or if otherwise delivered or sent, shall be
deemed to have been given or made when received at the following addresses or
such other addresses as may hereafter be designated in writing from time to
time by the parties hereto in the manner provided in this paragraph:


 


	
  TENANT:

  	
   

  	
  LANDLORD:

  
	
   

  	
   

  	
   

  
	
  The Wornick Company

  	
   

  	
  Ronald C. Wornick

  
	
  Attn: Corporate
  Secretary

  	
   

  	
  345 Lorton Avenue

  
	
  200 N. First Street

  	
   

  	
  Burlingame, California
  94010

  
	
  McAllen, Texas 78501

  	
   

  	
   

  



 


2.                                      
Amendments.  No subsequent
alteration, amendment, change, deletion, or addition to this Lease shall be
binding upon LANDLORD or TENANT unless in writing and signed by both LANDLORD
and TENANT.


 


3.                                      
Governing
Law.  This Lease and the rights and obligations of the parties hereto
shall be interpreted, construed, and enforced in accordance with the laws of
the State of Texas.


 


4.                                      
Captions
and Section Numbers.  The captions, paragraph numbers, and
article numbers appearing anywhere in this Lease are inserted only as a
matter of convenience and in no way define, limit, construe, or describe the
scope or intent of any such Paragraphs or Articles of this Lease nor in any way
affect this Lease.  All references herein to “Articles,” “Paragraphs,” or
“Sub-Paragraphs” are references to articles, paragraphs, or sub-paragraphs of
this Lease.


 


5.                                      
Attorney’s
Fees.  In the event of any litigation between the parties relating to
this Lease, the prevailing party shall be entitled to recover its reasonable
attorney’s fees and costs as part of the judgment or settlement therein. 
In the event of a breach of this Lease by either party which does not result in
litigation but which causes the non-breaching party to incur attorneys’ fees or
costs, the breaching party shall reimburse such fees and costs to the
non-breaching party upon


 


19





















 


demand. 
If either party or any of its officers, directors, shareholders, partners,
agents, affiliates or employees shall be made a party to any litigation
commenced by or against the other party and is not found to be at fault, the
other party shall pay all costs, expenses and reasonable attorneys’ fees
incurred by any such party in connection with such litigation.


 


6.                                      
Quiet
Enjoyment.  LANDLORD shall defend the TENANT in the quiet
enjoyment and peaceful possession of the Leased Premises during the term so
long as TENANT is not in default under the terms of this Lease.


 


7.                                      
Recordation.  Both LANDLORD
and TENANT agree not to record this Lease, but each party hereto agrees, on
request of the other, to execute a short form memorandum of this Lease in recordable
form specifying the names and addresses of the parties, the date hereof, the
term, and a description of the Leased Premises.  In no event shall such
short form memorandum set forth the rental or other charges payable by TENANT
under this Lease; and any such memorandum shall expressly state that it is
executed pursuant to the provisions contained in this Lease and is not intended
to vary the terms and conditions of this Lease.


 


8.                                      
Unavoidable
Default or Delay.  In the event either party to this Lease shall be
delayed, hindered, or prevented from the performance of any act required
hereunder by reason of acts of God, strikes, lockouts, labor disputes,
inability to produce materials, failure of power, restrictive governmental laws
or regulations, riot, insurrection, war, relocation of electrical generating,
distribution or service facilities or the inability of any company providing
utilities to the Building or other cause not within the reasonable control of
such party (expressly except the financial inability of such party to perform
its obligations hereunder), then the performance of such acts shall be excused
for the period of delay and the period for performance of any such act shall be
extended for a period equivalent to the period of such delay.


 


9.                                      
Landlord’s
Performance for the Account of Tenant.  If, after reasonable notice
TENANT fails to perform any one or more of its obligations hereunder, in
addition to the other rights of LANDLORD hereunder, LANDLORD shall have the
right but not the obligation to perform all or any part of such obligations of
TENANT.  Upon receipt of a demand therefor from LANDLORD, TENANT shall
reimburse LANDLORD for (i) the cost to LANDLORD of performing such obligations
plus (ii) interest thereon as hereinafter provided.


 


10.                                
Landlord’s
Failure to Perform.  If LANDLORD fails to perform any of its obligations
under this Lease, LANDLORD shall


 


20





















 


not be
in default hereunder and TENANT shall not have any rights or remedies growing
out of such failure unless TENANT gives LANDLORD written notice thereof setting
forth in reasonable detail the nature and extent of such failure and such
failure by LANDLORD is not cured within the thirty (30) day period following
delivery of such notice, or if the nature of LANDLORD’s default is such that
more time is reasonably required in order to cure, such period shall be
extended for the period reasonably required therefor if LANDLORD commences
curing such failure within such thirty (30) day period and continues the curing
thereof with reasonable diligence until completion.


 


11.                                
Interest.  All
installments of rent, additional rent and all other payments of any character
required to be paid to LANDLORD by TENANT under the terms of this Lease shall,
following the due date thereof, bear interest at either the rate of Ten percent
(10%) per annum or the maximum non-usurious rate allowed by law, whichever is
the lesser rate.


 


12.                                
Estoppel
Certificate.  TENANT shall from time to time, within ten (10)
days after written request from LANDLORD, execute, acknowledge and deliver a
statement: (i) certifying that this Lease is unmodified and in full force and
effect (or if this Lease is claimed not to be in force and effect, specifying
the ground therefor) and the dates to which the rent and other charges
hereunder have been paid, (ii) acknowledging that there are not, to TENANT’s knowledge,
any uncured defaults on the part of LANDLORD hereunder (or specifying such
defaults if any are claimed), and (iii) certifying such other matters as
LANDLORD may reasonably request, or as may be requested by LANDLORD’s current
or prospective Lenders, insurance carriers, auditors, and prospective
purchasers.  Any such statement may be relied upon by any such
parties.  If TENANT shall fail to execute and return such statement within
the time required herein, TENANT shall be deemed to have agreed with the
matters set forth thereon.


 


Section 26.  Right of First Refusal.


 


If at any time during the
term of this Lease, LANDLORD shall desire to sell Property One and/or Property
Two, TENANT shall have the right of first refusal to purchase such Property or
Properties, as follows:


 


a.                                      
LANDLORD
shall furnish to TENANT three (3) copies of a contract of sale (“Contract”)
between LANDLORD and TENANT signed by LANDLORD specifying the terms and
conditions upon which he will sell such Property or Properties to TENANT. 
If TENANT shall fail to exercise this Right of First Refusal by signing and
returning two (2) copies of the Contract to LANDLORD together with any
down-payment or earnest money deposit therein provided within ten (10) days
after receipt of the Contract, then LANDLORD


 


21





















 


shall
have the right to sell such
Property or Properties to any other party upon terms substantially equal to or
better than set forth in the Contract.  If LANDLORD shall sell such
Property or Properties upon terms equal to or better than those offered to
TENANT, this Right of First Refusal shall terminate; provided, however, if such
a sale is not consummated, then this Right of First Refusal shall remain in
force and effect.


 


b.                                     
The
following transfers shall be excluded from TENANT’s Right of First Refusal:


 


1.                                      
The
sale of LANDLORD’S estate in the Leased Premises, or any portion thereof, at a
foreclosure of any Deed of Trust or Mortgage covering the Leased Premises or by
a Deed in Lieu of Foreclosure;


 


2.                                      
A
transfer of LANDLORD’s estate in the Leased Premises, or any portion thereof,
or any part thereof, to any corporation, partnership, trust or other entity
which is controlled wholly or in part by LANDLORD or members of LANDLORD’s
family;


 


3.                                      
A
transfer by gift, devise or descent;


 


TENANT’s Right of First Refusal shall, however, remain
in effect after any such transfer specified in subparagraphs 2. and 3. of
paragraph b of this Section and be binding on the transferee in any such
transaction.


 


Section 27.  Purchase of the Property in the Event of
Damage or Condemnation.


 


In the event LANDLORD
accepts an offer from TENANT to purchase Property One and/or Property Two at
the Fair Market Value or Fair Market Value Purchase Price under the conditions
and terms of sections 14 or 17 of this Lease, then such sale shall be on the
terms and conditions as set forth in this paragraph.  Closing of such sale
shall be on or before thirty (30) days from the date that the Fair Market Value
Purchase Price is determined.  At Closing, LANDLORD shall deliver to
TENANT a Special Warranty Deed, subject to all matters of record, but free and
clear of any mortgage lien, and TENANT shall deliver to LANDLORD the purchase
price payable in cash.  Any real estate transfer taxes, if any, to the
extent permitted by law, shall be paid by TENANT.


 


22





















 


Section 28.  Composite Lease.


 


This Lease, although
executed and delivered as a composite instrument for convenience, constitutes a
separate lease and agreement between LANDLORD and TENANT with respect to
Property One and Property Two, and all provision hereof shall be applicable
separately to each Property, with the same effect as if a separate lease with
respect thereto had been executed and delivered by LANDLORD and TENANT. 
If any such separate lease shall be terminated or extended pursuant to any
provision hereof, such termination or extension shall have no effect upon the
remaining lease.  Upon request of LANDLORD or TENANT, a separate lease of
either Property, in the same form as this Lease except for such mutually
satisfactory modifications as shall be required by the fact that such lease
relates only to one Property, will be executed and delivered by LANDLORD and
TENANT.


 


IN WITNESS WHEREOF,
LANDLORD and TENANT have executed this Lease Agreement to be effective as of
November 27, 1995.


 


	
  TENANT:

  	
  LANDLORD:

  
	
   

  	
   

  
	
  THE WORNICK COMPANY

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By: 

  	
  /s/ Ronald C. Wornick

  	
   

  	
  /s/ Ronald C. Wornick

  	
   

  
	
   

  	
  Ronald C. Wornick,

  	
  Ronald C. Wornick

  
	
   

  	
  President

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  



 


23





















 


EXHIBIT A


 


TO THE LEASE
AGREEMENT


 


(Property One)


 


TRACT A OF PROPERTY ONE:


 


All of Lot “A”, RIGHT-AWAY FOODS INC., an addition to
the City of McAllen, Hidalgo County, Texas, according to the map or plat
thereof recorded in Volume 21, Page 81, Map Records of Hidalgo County, Texas.


 


TRACT B OF PROPERTY ONE:


 


A 5.0 acre tract of land, more or less, out of Lot 5,
Block 12, STEELE AND PERSHING SUBDIVISION, Hidalgo
County, Texas, according to the map or plat thereof recorded in Volume 8, Page
115, Deed Records of Hidalgo County, Texas and being more particularly
described by metes and bounds as follows:


 


BEGINNING at an iron rod set on the West line of Lot
5, South 8 degrees 46 minutes West, 160.0 feet from its Northwest corner for
the Northwest corner of the following described tract of land, said point being
on the South line McAllen Pharr Outfall Drain Ditch right of way;


 


THENCE, with the South line of said drain ditch right
of way, parallel to the North line of Lot 5, South 81 degrees 14 minutes East,
463.4 feet to an iron rod set, for the Northeast corner hereof;


 


THENCE, parallel to the West line of Lot 5, South 8
degrees 46 minutes West, 470.0 feet to an iron rod set on the North line of 60
foot Cedar Avenue, for the Southeast corner hereof; said Cedar Avenue shown on
map of Industrial Distribution Center, recorded in Volume 21, Page 80, Map
Records;


 


THENCE with the North line of Cedar Avenue, North 81
degrees 14 minutes West, 463.4 feet to an iron rod set on the West line of Lot
5, for the Southwest corner hereof; said point also being on the East line of
Lot “A”, Right Away Foods, Inc. Subdivision, recorded in Volume 21, Page 81,
Map Records;


 


THENCE, with the East line of Lot “A” Right Away
Foods, Inc. Subdivision and the West line of Lot 5, Block 12, Steele and
Pershing Subdivision, North 8 degrees 46 minutes East, 470.0 feet to the PLACE
OF BEGINNING, containing 5.0 acres of land, more or less.


 





















 


TRACT C OF PROPERTY ONE:


 


TRACT IV:  A tract of land containing 2.46 acres,
more or less, out of the West 17.51 acres of Lot 4, Block 12, STEELE AND
PERSHING SUBDIVISION, Hidalgo County, Texas, according to the map or plat
thereof recorded in Volume 8, Page 115, Deed Records of Hidalgo County, Texas
and being more particularly described by metes and bounds as follows:


 


BEGINNING at an iron pipe on the South right of way
line of the McAllen Outfall Drain Ditch, in the City of McAllen, Texas, for the
Northeast corner of the following described tract of land; said point located
North 81 deg.  14 min.  West, 789.0 feet, and South 8 deg. 46 min.
West, 160.0 feet from the Northeast corner of said Lot 4;


 


THENCE, with the East line of the West 17.51 acres of
Lot 4, South 8 deg. 46 min. West, 201.78 feet to a point for the most Northerly
Southeast corner hereof; said point being 5.0 feet Northerly from the North
edge of concrete curb;


 


THENCE, parallel to the North line of Lot 4, parallel
to the North edge of concrete curb, North 81 deg.  14 min.  West,
30.0 feet to the point of beginning of a curve to the left, for a point in line
hereof;


 


THENCE, continue parallel to and 5.0 feet Westerly
from the edge of concrete curb, with said curve to the left, on a radius of
55.0 feet through an arc of 156 deg. 25 min. 19 sec., a distance of 150.15 feet
to the point of beginning of curve to right;


 


THENCE, continue parallel to and 5.0 feet Westerly
from the edge of concrete curb, with said curve to the right, on a radius of
45.0 feet, through an arc of 32 deg.  20 min.  41 sec., a distance of
25.40 feet to end of curve, for a point in the East line hereof; said point
being 30.0 feet Westerly from the centerline of North 1st Street;


 


THENCE, parallel to and 30 feet Westerly from the
centerline of North 1st Street; South 8 deg.  46 min.  West 366.88
feet to an iron pipe for the most Southerly Southeast corner hereof;


 


THENCE, North 81 deg.  23 min. 30 sec. West,
144.92 feet to an iron pipe on the approximate East toe of Drain Ditch Spoil
Bank, for the Southwest corner hereof;


 


THENCE, with a line along said Spoil Bank, North 7
deg. 40 min. East, 708.46 feet to an iron pipe on the South right of way line
of McAllen Outfall Drain Ditch, for the Northwest corner hereof;


 


THENCE, with said drain ditch right of way line as
follows; South 73 deg. 30 min. 40 sec. East, 98.42 feet and South 81 deg. 14
min. East, 90.99 feet to the POINT OF BEGINNING.  Containing 2.46 acres of
land, more or less.


 





















 


EXHIBIT B


 


TO THE LEASE
AGREEMENT


 


(Property Two)


 


All of Lot “A”, WORNICK CO.  BUSINESS DEVELOPMENT
CENTER SUB’D, an addition to the City of Pharr, Hidalgo County, Texas,
according to the map or plat thereof recorded in Volume 26, Page 69B, Map
Records of Hidalgo County, Texas.


 


SAVE AND EXCEPT the West 30 feet thereof conveyed to
U.S.  Internex Transportation, Inc., in Warranty Deed dated
October 18, 1994, filed February 6, 1995 in the office of the County
Clerk of Hidalgo County, Texas, under Document No.  434330.


 





















 


 


AMENDMENT
TO LEASE AGREEMENTS


 


RONALD C. WORNICK, as
“Landlord,” and The Wornick Company, a Texas corporation, as “Tenant,” are
parties to the following two lease agreements:


 


A.                                  
Lease Agreement by
and between Landlord and Tenant, dated November 27, 1995, and pertaining
to certain real property located in Hidalgo County, Texas and more fully
described therein (the “Texas Lease”).


 


B.                                    
Amended and Restated
Lease Agreement by and between Landlord and Tenant (Tenant’s interest being
acquired pursuant to the Assignment of Amended and Restated Lease Agreement
dated October 28, 1995), dated to be effective December 30, 1994, and
pertaining to certain real property located in Hamilton County, Ohio and more
fully described therein (the “Ohio Lease”).


 


The parties agree that
the Texas Lease and the Ohio Lease are amended as follows:


 


1.                                      
The discount rate set
forth in the last sentence of Section 16.2.a shall be “six percent (6%)”.


 


2.                                      
Section 16.1.e. 
is amended and restated in its entirety to read as follows:


 


“If Tenant shall abandon or vacate the Leased Premises
and cease to care for the Lease Premises as provided for in Section 7
herein.”


 


3.                                      
The last sentence of
Section 1.f. of the Ohio Lease and Section 1.h. of the Texas Lease
are deleted.


 


4.                                      
Section 26 is
amended to provide that Tenant shall have thirty (30) days within which to
exercise its right of first refusal, rather than ten (10) days.


 


5.                                      
Section 14.i. of
the Texas Lease is amended and restated in its entirety to read as follows:


 


“If Landlord’s mortgagees do not allow the insurance
proceeds to be used for restoration, then Tenant’s exclusive remedies shall be
(a) to terminate this Lease, or (b) if (i) such proceeds are used to service
Landlord’s mortgage secured by the Leased Premises or otherwise made available
to or used for the benefit of Landlord, and (ii) Tenant is not in default under
this Lease to require Landlord to restore the Leased Premises, provided,
however, that Landlord’s obligation to restore the Leased Premises shall be
limited to the amount of


 





















 


such proceeds and, provided further than Landlord
shall not be obligated to restore the Leased Premises pursuant to provisions of
this section if such proceeds are not available prior to the end of the
12th year of term of the Lease.


 


6.                                      
The last sentence of
the second paragraph of Section 17.f. is amended and restated in its
entirety to read as follows:


 


“If the Landlord’s mortgagees do not allow the Award
to be used for restoration, then Tenant’s exclusive remedies shall be (a) to
terminate this Lease, or (b) if such Award are used to service Landlord’s
mortgage secured by the Leased Premises or otherwise made available to or used
for thee benefit of Landlord, to require Landlord to restore the Leased
Premises, provided, however, that Landlord’s obligation to restore the Leased
Premises shall be limited to the amount of such Award and, provided further
that Landlord shall not be obligated to restore the Leased Premises pursuant to
provisions of this section if such Award is not available prior to the end
of the twelfth year of term of the Lease.


 


Except as specifically
amended above, the Ohio Lease and the Texas Lease are ratified and confirmed.


 


Effective as of November 29, 1995


 


 


	
  TENANT:

  	
  LANDLORD:

  
	
   

  	
   

  
	
  THE WORNICK COMPANY

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/

  	
  Larry L. Rose

  	
   

  	
  /s/ Ronald C. Wornick

  	
   

  
	
  Name:

  	
  Larry L. Rose

  	
   

  	
  Ronald C. Wornick

  
	
  Title:

  	
  Secretary

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Agreed to by Landlord’s
  Mortgage:

  	
   

  
	
   

  	
   

  
	
  TEXAS STATE BANK

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/

  	
  G. E. Roney

  	
   

  	
   

  	
   

  
	
  Name:

  	
  G. E. Roney

  	
   

  	
   

  
	
  Title:

  	
  Chairman of the Board

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


ii





















 


ASSIGNMENT
AND ASSUMPTION OF LEASE


 


ASSIGNMENT AND ASSUMPTION
OF LEASE (this “Agreement”), entered into as of June 30, 2004, by and
among The Wornick Company, a Nevada corporation (“Assignor”); and The Wornick
Company Right Away Division, L.P., a Delaware limited partnership (“Assignee”).
Assignor and Assignee are referred to collectively herein as the “Parties.”


 


W I  T  N  E  S
S  E  T  H:


 


WHEREAS, Assignor, as
“Tenant,” and Ronald C. and Anita A. Wornick Revocable Trust,
successor-in-interest to Ronald C. Wornick, as “Landlord,” are parties to the
Lease Agreement dated November 27, 1995, as amended by Amendment to Lease
Agreements dated November 29, 1995, as assigned to Landlord by Lease
Assignment dated July 8, 1998 (collectively, the “Lease”), presently
covering certain premises (the “Premises”) located at 200 North First Street
and the 400 Block of East Earling Road, McAllen, Texas, a copy of which Lease
is attached hereto as Exhibit A; and


 


WHEREAS, Assignor, as
“Seller,” and Assignee, as “Buyer,” are parties to an Assets Purchase and Sale
Contract dated December 3, 2003 (the “Purchase Agreement”), pursuant to
which, subject to the terms and conditions set forth therein, Assignee will
purchase substantially all of the assets (and assume certain of the
liabilities) of Assignor, including all of Seller’s right, title and interest
in, under and to the Lease; and


 


WHEREAS, simultaneously
with the closing of the transactions contemplated by the Purchase Agreement,
the Parties mutually desire (a) that Assignor assign all of its right, title
and interest in, under and to the Lease to Assignee, (b) that Assignee accept
such assignment from Assignor and assume all of Assignor’s obligations as
Tenant under the Lease, and (c) that Landlord consent to the assignment
contemplated hereby, all on the terms and conditions hereinafter set forth.


 


NOW, THEREFORE, in
consideration of the mutual covenants contained herein and other valuable
consideration, the receipt and adequacy of which are expressly acknowledged,
the Parties agree as follows:


 


1.                                      
Effective Date. For all purposes under this Agreement,
the term “Effective Date” shall mean that date, if any, on which the closing of
the transactions contemplated by the Purchase Agreement is consummated.


 


2.                                      
Assignment and
Assumption.


 


(a)                                 
Effective as of the
Effective Date, Assignor hereby assigns, transfers and sets over unto Assignee
all of Assignor’s right, title and interest in, under and to (i) the Lease and
(ii) the aggregate security deposit heretofore made by Assignor pursuant to the
Lease. Assignor will deliver possession of the Premises to Assignee on the
Effective Date.


 


(b)                                
Assignee hereby
accepts the foregoing assignment and hereby agrees to perform all of the terms
and conditions of the Lease to be performed on the part of Assignor and


 





















 


assumes all of the liabilities and obligations of
Assignor under the Lease, as amended hereby, arising or accruing on or after
the Effective Date, including, without limitation, liability for the payment of
rent and for the due performance of all the terms, covenants and conditions of
the tenant pursuant to the Lease as amended hereby.


 


3.                                      
Consent to
Assignment.
Effective as of the Effective Date, Landlord has consented to the assignment
effected hereby.


 


4.                                      
Representation of
Assignor. The
Assignor hereby represents to the Assignee and agrees as follows:


 


(a)                                 
The Lease attached
hereto as Exhibit A is a true, correct and complete copy of the Lease, the
Lease has not been amended or modified except as set forth above and the same
is the only agreement between the Landlord and the Assignor with respect to the
subject matter thereof.


 


(b)                                
The Lease is in full
force and effect with no defaults (or events which, with the passage of time,
would become defaults) thereunder on the part of either party in the
performance of its obligations under such Lease.


 


(c)                                 
The minimum or base
rent and all other rentals and other payments due, owing and accruing under the
Lease have been paid through the date thereof immediately preceding the
Effective Date.


 


(d)                                
The current amount of
tenant’s expense and tax contribution is $39,759.75 per month.


 


(e)                                 
Landlord is currently
holding a security deposit with respect to the Lease in the amount of $0.


 


5.                                      
Miscellaneous.


 


(a)                                 
Headings. The section headings used herein
are inserted for convenience only and shall not affect in any way the meaning
or interpretation of this Agreement.


 


(b)                                
Governing law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas.


 


(c)                                 
Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original but all of
which together will constitute one and the same instrument.


 


2





















 


IN WITNESS WHEREOF, the
parties have executed this Agreement as of the day and year first above
written.


 


 


	
  ASSIGNOR

  	
  ASSIGNEE

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  The Wornick Company, a
  Nevada

  	
  The Wornick Company
  Right Away

  
	
  corporation

  	
  Division, L.P., a
  Delaware limited

  
	
   

  	
  partnership

  
	
   

  	
   

  	
   

  
	
   

  	
  By: Right Away
  Management Corporation,

  
	
   

  	
  a Delaware corporation,

  
	
   

  	
  its general partner

  
	
   

  	
   

  
	
  By:

  	
  /s/

  	
  Larry L. Rose

  	
   

  	
  By:

  	
  /s/

  	
  Robert B. McKeon

  	
   

  
	
   

  	
  Larry L. Rose,
  President and

  	
   

  	
   

  	
  Robert B. McKeon,
  President

  	
   

  
	
   

  	
  Chief Executive Officer

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


3





















 


	
  STATE OF NEW YORK

  	
   

  	
  §

  
	
   

  	
   

  	
  §

  
	
  COUNTY OF NEW YORK

  	
   

  	
  §

  



 


This instrument was
acknowledged before me on June 30, 2004, by Larry L. Rose, President and
CEO of The Wornick Company, a Nevada corporation, on behalf of said
corporation.


 


 


	
     /s/
  Janna Gabriel

  	
   

  
	
  Notary Public

  
	
  Printed Name:

  	
  Janna Gabriel

  	
   

  
	
  My Commission Expires:

  
	
  9/24/05

  	
   

  
	
   

  	
   

  	
   

  	
   

  



 


 


	
  STATE OF NEW YORK

  	
   

  	
  §

  
	
   

  	
   

  	
  §

  
	
  COUNTY OF NEW YORK

  	
   

  	
  §

  



 


 


This instrument was
acknowledged before me on June 30, 2004 by Robert B. McKeon, President of
Right Away Management Corporation, a Delaware corporation, the general partner
of The Wornick Company Right Away Division, L.P., a Delaware limited partnership.


 


	
     /s/
  Elaine Gerace

  	
   

  
	
  Notary Public

  
	
  Printed Name:

  	
  Elaine Gerace

  	
   

  
	
  My Commission Expires:

  
	
  5/18/06

  	
   

  
	
   

  	
   

  	
   

  	
   

  



 


4