Exhibit 10.14


 


 


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,


 


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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


 


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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


 


5

















 


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.


 


6

















 


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