Document:

Exhibit
10.11

 

Amendment
No. 1 to Assets Purchase and Sale Contract

 

This Amendment No. 1 to
Assets Purchase and Sale Contract (this “Amendment”) is made as of May 4, 2004
by and among The Wornick Company, a Nevada corporation (“Wornick”), The Wornick
Company Right Away Division, a Nevada corporation (“TWCRAD”), The Wornick
Company Right Away Division, L.P., a Texas limited partnership (“TWCRADLP”),
Right Away Management Corporation, a Texas corporation (“RAMCO” and
collectively with Wornick, TWCRAD and TWCRADLP, the “Sellers” and individually,
a “Seller”), The Wornick Company, a Delaware corporation (“Buyer”), and Veritas
Capital Management II, LLC (“Veritas”).  Sellers, Buyer and Veritas are
sometimes individually referred to herein as a “Party” and collectively as the
“Parties”.

 

WHEREAS, the Parties have
previously entered into that certain Assets Purchase and Sale Contract dated
December 3, 2003 (the “Purchase Contract”); and

 

WHEREAS, the Parties
desire to amend the Purchase Contract upon the terms and conditions set forth
in this Amendment;

 

NOW, THEREFORE, for and
in consideration of the mutual covenants and agreements herein set forth, the
Parties agree as follows:

 

A.                                  
Unless otherwise
defined, all capitalized terms in this Amendment shall have the meanings
ascribed to such terms in the Purchase Contract.

 

B.                                    
Section 2.3 of
the Purchase Contract is hereby deleted in its entirety and the following
Section 2.3 is adopted by this Amendment in its place:

 

2.3.                             
CONSIDERATION

 

(a)                                 
The consideration for
the Assets (the “Purchase Price”) will be (a) One Hundred Fifty Five Million
Dollars  ($155,000,000) plus or minus the Adjustment Amount and (b) the
assumption of the Assumed Liabilities.

 

(b)                                
In accordance with
Section 2.7(b), at the Closing, the Purchase Price, prior to adjustment on
account of the Adjustment Amount, shall be delivered by Buyer as follows: (i)
One Hundred Fifty Million Dollars ($150,000,000) by wire transfer to Sellers;
and (ii) Five Million Dollars ($5,000,000) by wire transfer to an Escrow Agent
mutually satisfactory to Sellers and Buyer (the “Escrow Agent”) to hold in accordance
with the terms and conditions of an escrow agreement in form and substance
mutually satisfactory to Sellers and Buyer (the “Escrow Agreement”), providing
for, among other things, termination of the Escrow Agreement on
September 30, 2005.

 

 

(c)                                 
Within ten (10)
Business Days after the execution of this Amendment, Veritas shall cause Buyer
to deposit the sum of Five Million Dollars ($5,000,000) (the “Deposit”) in
escrow in accordance with the terms and conditions of the Deposit Escrow
Agreement in the form of Exhibit A attached hereto.  Unless this
Contract shall be terminated pursuant to Section 9.1, on the Closing Date
the Deposit (together with all interest and other distributions or gains,
hereinafter referred to as “Earnings”) shall be released to Sellers as partial
payment  of the Purchase Price and the amount payable by Buyer to Sellers
at the Closing pursuant to Section 2.3(b) shall be reduced by the amount
of the Deposit and Earnings.  In the event the Closing does not occur as a
result of the Breach by Buyer of its obligations under this Contract, Sellers
shall be entitled to receive the Deposit and Earnings as liquidated
damages.  Buyer and Sellers hereby acknowledge that the amount of damages
which would be incurred by Sellers as a result of Buyer’s Breach of this
Contract for not Closing are difficult to ascertain and that the amount of
liquidated damages provided for by this Section 2.3(c) are
reasonable.  Notwithstanding anything to the contrary contained in this
Contract (including, without limitation, Sections 9.2 and 13.5), Buyer shall
have no other liability to Sellers in the event the Closing does not
occur.  In the event the Closing does not occur other than as a result of
the Breach by Buyer of its obligations under this Contract, the Deposit and
Earnings shall be returned to Buyer.

 

C.                                    
Section 2.6 of
the Purchase Contract is hereby amended to read in its entirety as follows:

 

2.6.                             
CLOSING

 

The purchase and sale provided for in this Contract
(the “Closing”) will take place at the offices of Winston & Strawn LLP, 200
Park Avenue, New York, New York 10166, commencing at 10:00 a.m. (local time) on
a date on or before June 30, 2004, agreed upon by Buyer and Sellers. 
Subject to the provisions of Article 9, failure to consummate the purchase
and sale provided for in this Contract on the date and time and at the place
determined pursuant to this Section 2.6 will not result in the termination
of this Contract and will not relieve any Party of its obligation under this
Contract.  In such a situation, the Closing will occur as soon as
practicable, subject to Article 9.

 

D.                                   
Section 2.7(b)(i)
of the Purchase Contract is hereby amended to read in its entirety as follows:

 

2

 

(i)                                    
One Hundred Fifty
Million Dollars ($150,000,000) (less the amount of the Deposit and Earnings) by
wire transfer to an account specified by Sellers in a writing delivered to
Buyer at least three (3) Business Days prior to the Closing Date, and Five
Million Dollars ($5,000,000) by wire transfer to the account of the Escrow
Agent pursuant to the Escrow Agreement;

 

E.                                     
Section 9.1(f)
of the Purchase Contract is hereby amended by deleting the reference to
“March 31, 2004” in such section and substituting the date “
June 30, 2004” in lieu thereof.

 

F.                                     
Section 9.1(g)
of the Purchase Contract is hereby amended by deleting the reference to
“March 31, 2004” in such section and substituting the date
“June 30, 2004” in lieu thereof.

 

G.                                    
For the avoidance of
doubt, all references in the Purchase Contract to the approval of the Purchase
Contract by the ESOT Trustee (including, without limitation, those references
contained in Sections 7.8 and 8.6) shall mean the approval of the Purchase
Contract, as amended by this Amendment, by the ESOT Trustee.  Additionally,
all references in the Purchase Contract to the ESOT Trustee (including, without
limitation, paragraph 4 under “PREMISES” and Schedule 1) shall mean Susan
M. Ledingham, who replaced First Bankers Trust Company as the ESOT Trustee
effective December 23, 2003.

 

H.                                   
Except as herein and
hereby amended, modified or changed, all terms and provisions of the Purchase
Contract shall remain in full force and effect.

 

I.                                        
This Amendment may be
executed in one or more counterparts, each of which will be deemed to be an
original copy of this Amendment and all of which, when taken together, will be
deemed to constitute one and the same agreement.  The exchange of copies
of this Amendment and of signature pages by facsimile transmission shall
constitute effective execution and delivery of this Amendment as to the Parties
and may be used in lieu of the original Amendment for all purposes. 
Signatures of the Parties transmitted by facsimile shall be deemed to be the
original signatures for all purposes.

 

J.                                       
Attached hereto are
supplements to Schedules 3.6(a), 3.6(b), 3.13(a), 3.15 and 3.16(a) to update
the information and representations previously stated therein. 
Additionally, to supplement Schedule 3.19(a), Don Leifer, Vice President
of Sales and Marketing for Wornick, has become an Active Employee. 
Additionally, to supplement Schedule 3.3, Sellers have delivered to Buyer
the audited financial statements of Sellers as of December 31, 2003, which
include certain restatements related to prior periods and certain changes in
accounting materials, all as set forth therein.

 

K.                                   
Buyer hereby waives
the right to assert a claim for damages for Breach of any representation or
warranty as to any matter disclosed in the Schedules attached to the Purchase
Contract or supplemented hereby.  In addition, in the event that prior to
the Closing Sellers notify Buyer in writing of any other supplements to the
Schedules, Buyer waives its right

 

3

 

to assert a claim against Sellers for damages in
connection with any representation or warranty relating to such notification; provided,
however, that Buyer shall be entitled to exercise its rights under
Section 9.1 of the Purchase Contract in connection with any such
notification.

 

L.                                     
For purposes of
satisfying the requirements of Section 2.3(b) of the Purchase Contract
concerning the Escrow Agreement, the parties agree that the Escrow Agreement
shall be in substantially the form of Exhibit B hereto, subject to any
changes required by the Escrow Agent.

 

4

 

IN WITNESS
WHEREOF, the Parties have executed this Amendment as of the date first above
written.

 

 

	
  Buyer:

  	
   

  	
  Sellers:

  
	
   

  	
   

  	
   

  
	
  The Wornick Company, a
  Delaware corporation

  	
   

  	
  The Wornick Company, a
  Nevada corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
    /s/ Robert
  B. McKeon

  	
   

  	
  By:

  	
     /s/
  Larry L. Rose

  
	
   

  	
  Robert B. McKeon

  	
   

  	
   

  	
  Larry L. Rose

  
	
   

  	
  Authorized Signatory

  	
   

  	
   

  	
  President and Chief
  Executive

  Officer

  

 

 

Solely for purposes of Section 2.3(c) and
Section 13.16:

 

	
  Veritas Capital
  Management II, L.L.C.

  	
   

  	
  The Wornick Company
  Right

  Away Division, a Nevada

  corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Robert B. McKeon

  	
   

  	
  By:

  	
     /s/
  Larry L. Rose

  
	
   

  	
  Robert B. McKeon

  	
   

  	
   

  	
  Larry L. Rose

  
	
   

  	
  Authorized Signatory

  	
   

  	
   

  	
  President and Chief
  Executive

  
	
   

  	
   

  	
   

  	
  Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The Wornick Company
  Right Away

  
	
   

  	
   

  	
  Division, L.P., a Texas
  limited partnership

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Right Away Management
  Corporation,

  
	
   

  	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
    /s/ Keith
  Frase

  
	
   

  	
   

  	
   

  	
  Keith Frase, President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Right Away Management
  Corporation,

  
	
   

  	
   

  	
  a Texas corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
    /s/ Keith
  Frase

  
	
   

  	
   

  	
   

  	
  Keith Frase, President

  

 

5Exhibit
10.12

 

 

 

AMENDED
AND RESTATED LEASE AGREEMENT

BY
AND BETWEEN RONALD C. WORNICK, AS LANDLORD,

AND
SHELF STABLE FOODS, INC., 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 Indemnification

  	
  14

  
	
   

  	
   

  	
   

  
	
  Section 20.

  	
  CPI Rent Adjustments

  	
  16

  
	
   

  	
   

  	
   

  
	
  Section 21.

  	
  Waiver

  	
  17

  
	
   

  	
   

  	
   

  
	
  Section 22.

  	
  Construction of Lease

  	
  17

  

 

i

 

	
  Section 23.

  	
  Prohibition Against Liens

  	
  17

  
	
   

  	
   

  	
   

  
	
  Section 24.

  	
  Holding Over and Successors

  	
  18

  
	
   

  	
   

  	
   

  
	
  Section 25.

  	
  Miscellaneous

  	
  18

  
	
   

  	
   

  	
   

  
	
  Section 26.

  	
  Right of First Refusal

  	
  21

  
	
   

  	
   

  	
   

  
	
  Section 27.

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

  	
  22

  

 

ii

 

 

AMENDED
AND RESTATED LEASE AGREEMENT

 

	
  THE STATE OF OHIO

  	
  )

  	
   

  
	
   

  	
  :

  	
  KNOW ALL MEN BY THESE
  PRESENTS:

  
	
  COUNTY OF HAMILTON

  	
  )

  	
   

  

 

The Lease Agreement
effective December 30, 1994, between RONALD C. WORNICK, as “LANDLORD”, and
SHELF STABLE FOODS, INC., an Ohio corporation, as “TENANT” is amended and
restated in its entirety by this Amended and Restated Lease Agreement (this
“Lease”) as follows:

 

WITNESSETH:

 

Section 1.                                         
Certain Definitions.

 

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

 

a.                                      
Land:  The real
property located in Blue Ash, Hamilton County, Ohio, described on the attached
Exhibit “A”.

 

b.                                     
Improvements:  The
improvements located on the Land.

 

c.                                      
Leased
Premises:  The Land and Improvements.

 

d.                                     
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 a
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
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.

 

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

 

 

(1)                                 
January 1,
l998 — “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”

 

f.                                        
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 the Leased Premises 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 Leased Premises
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 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

 

2

 

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 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 December 30, 1994, 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, reduction, suspension or deferment of the
monthly rental or other sums payable by TENANT hereunder, except as otherwise
specifically provided in this Lease.

 

3

 

Section 4.                                         
Rental.

 

TENANT agrees to pay
LANDLORD a rental of $47,666.66 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 Lease Agreement, 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 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,

 

4

 

understandings or obligations on
the part of LANDLORD to perform any alterations, repairs or replacement.

 

Section 8.                                         
Fixtures.

 

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 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.

 

5

 

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.

 

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

 

6

 

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, the Leased Premises is totally or partially
destroyed from a risk covered by the insurance described in Section 9 and
the Leased Premises thereby 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 destruction, to (i) restore the Leased Premises to
substantially the same condition as existed immediately before the damage or
destruction, or (ii) offer to acquire the Leased Premises from LANDLORD for a
purchase price equal

 

7

 

to the Fair Market Value Purchase Price of the Leased
Premises immediately prior to such damage or destruction.

 

(2)                                 
If
during the term of this Lease, the Leased Premises is partially destroyed from
a risk covered by the insurance described in Section 9, but the Leased
Premises is not thereby rendered unsuitable for TENANT’s use, TENANT shall
restore the Leased Premises 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 the Leased Premises for TENANT’s use in
substantially the same manner as immediately prior to such damage or
destruction, TENANT may offer to purchase the Leased Premises for a purchase
price equal to the Fair Market Value Purchase Price of the Leased Premises
immediately prior to such damage or destruction.

 

(3)                                 
If
the cost of the repair or restoration exceeds the amount of insurance proceeds
received by LANDLORD, TENANT shall be obligated to contribute any excess amount
needed to restore the Leased Premises. 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 the Leased
Premises within thirty (30) days after the date of such offer, TENANT may
either (a) withdraw its offer to purchase the Leased Premises and proceed to
restore the Leased Premises to substantially the same condition as existed
immediately before the damage or destruction, or (b) terminate this Lease 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 the Leased Premises, this
Lease shall terminate upon payment of the purchase price and LANDLORD shall
remit to TENANT all insurance proceeds being held in trust by LANDLORD.

 

c.                                      
If
during the term of this Lease, the Leased Premises is totally or materially
destroyed from a risk not covered by the

 

8

 

insurance described in
Section 9, whether or not such damage or destruction renders the Leased
Premises unsuitable for TENANT’s use, TENANT at its option shall restore the
Leased Premises to substantially the same condition it was in immediately
before such damage or destruction and such damage or destruction shall not
terminate this Lease.

 

d.                                     
All
insurance proceeds payable by reason of any loss of or damage to and of
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 the
damage to TENANT’s personal property.

 

e.                                      
If
TENANT is required or elects to restore the Leased Premises as provided in this
section, TENANT shall also restore all alterations and improvements made by
TENANT, and 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 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.

 

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

 

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 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.

 

9

 

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 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,

 

10

 

(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
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

 

11

 

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 otherwise, by a Condemnor or (ii) a voluntary sale or transfer by LANDLORD
to any Condemnor, either under threat of Condemnation or while legal
proceedings for Condemnation are pending.

 

(2)                                 
“Date
of Taking” means the date the Condemnor has the right to possession of the
property being condemned.

 

12

 

(3)                                 
“Award”
means all compensation, sums or anything of value awarded, paid or received on
a total or partial Condemnation.

 

(4)                                 
“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 the Leased Premises by Condemnation or if a
portion of the Leased Premises is taken so that the Leased Premises is rendered
unfit for TENANT’s use, then this Lease shall terminate on the Date of Taking.

 

d.                                     
If
there is a taking of a portion of the Leased Premises by Condemnation, this
Lease shall remain in effect if the Leased Premises is not thereby rendered
unsuitable for TENANT’s use. If, however, the Leased Premises is thereby
rendered unsuitable for TENANT’s use, TENANT shall have the right (a) to
restore the Leased Premises, 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 the Leased
Premises from LANDLORD for a purchase price equal to the Fair Market Value
Purchase Price of the Leased Premises immediately prior to such partial taking,
in which event this Lease shall terminate 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 purchase the Leased Premises within thirty (30)
days after receipt of the notice described in the preceding sentence, TENANT
may either (a) withdraw its offer to purchase the Leased Premises and proceed
to restore the Leased Premises to the extent possible, to substantially the
same condition as existed immediately before the partial taking, or (b)
terminate this Lease by written notice.

 

e.                                      
If
there is a partial taking of the Leased Premises and this Lease remains in full
force and effect, TENANT shall accomplish all necessary restoration and,
subject to the rights of LANDLORD’s mortgagee, LANDLORD shall make the
condemnation award available to TENANT for such restoration.

 

13

 

f.                                        
In
the event LANDLORD accepts TENANT’s offer to purchase the Leased Premises, 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, 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 the Leased Premises, 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.

 

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.

 

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

 

14

 

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, judgments, 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 knowingly 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
knowingly 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, 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
knowingly 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

 

15

 

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, 1995. 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) $47,666, or (ii) the amount of rent determined by
the percentage increase in the CPI for the period from January 1, 1995 to
December 31, 1997 multiplied by $47,666 (“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: (i) 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”).

 

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

 

16

 

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.

 

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

 

17

 

whatsoever, any relationship between the parties
hereto other than that of LANDLORD and TENANT being 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
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

 

18

 

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:

  
	
   

  	
   

  	
   

  
	
  Shelf Stable Foods,
  Inc.

  Attn: Brian Dwyer

  10825 Kenwood Road

  Cincinnati, Ohio 45242

  	
   

  	
  Ronald C. Wornick

  345 Lorton Avenue

  Burlingame, California 94010

  

 

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 Ohio.

 

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 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.

 

19

 

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, the renewal options, 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 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.

 

20

 

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 therein.

 

Section 26.                                  
Right of First Refusal.

 

If at any time during the
term of this Lease, LANDLORD shall desire to sell the Leased Premises, TENANT
shall have the right of first refusal to purchase the Leased Premises, 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 the Leased Premises 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 shall have the right to sell the Leased Premises to any
other party upon terms substantially equal to or better than set forth in the
Contract. If LANDLORD shall sell the Leased Premises 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 at a foreclosure of any Deed
of Trust or Mortgage

 

21

 

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 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 Leased Property in the Event of Damage or Condemnation.

 

In the event LANDLORD
accepts an offer from TENANT to purchase the Leased Premises at the Fair Market
Value or Fair Market Value Purchase Price under the conditions and terms of
section 14b or Section l7d 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 LANDLORD accepts
TENANT’s offer to purchase. At Closing, LANDLORD shall deliver to TENANT a deed
with limited warranty covenants, 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, to the extent permitted
by law, shall be paid by TENANT.

 

IN WITNESS WHEREOF,
LANDLORD and TENANT have executed this Amended and Restated Lease Agreement to
be effective as of October 28, 1995.

 

 

	
   

  	
  LANDLORD:

  
	
   

  	
   

  
	
   

  	
  /s/ Ronald C. Wornick

  	
   

  
	
   

  	
  Ronald C. Wornick

  
	
   

  	
   

  
	
  Signed in the presence
  of:

  	
   

  
	
   

  	
   

  
	
  /s/ Nina Sorensen

  	
   

  	
   

  
	
  (Witness No. 1)

  	
   

  
	
  Print Name: Nina
  Sorensen

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  /s/ S. Baldinger

  	
   

  	
   

  
	
  (Witness No. 2)

  	
   

  
	
  Print Name: Sue
  Baldinger

  	
   

  
	
   

  	
   

  	
   

  

 

22

 

	
  Print Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
  SHELF
  STABLE FOODS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ronald C. Wornick

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
  Signed in the presence
  of:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Nina Sorensen

  	
   

  	
   

  
	
  (Witness No. 1)

  	
   

  
	
  Print Name: Nina
  Sorensen

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Witness No. 2)

  	
   

  
	
  Print Name:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  This Instrument
  Prepared By:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Harry L. Marks

  Gary, Thomasson, Hall & Marks

  Professional Corporation

  P.O. Box 2888

  Corpus Christi, Texas 78403

  (512) 884-19761

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

23

 

EXHIBIT
“A”

 

All that tract of land situated in Section 17,
Township 4, Entire Range 1, Miami Purchase, Sycamore Township, Hamilton County,
Ohio in the City of Blue Ash and being more particularly described as follows:

 

Beginning at a point in the easterly line of said
Section 17, also the center line of Kenwood Road, located South 03° 41’
00” West, 1,543.38 feet from the northeasterly corner of said Section 17;

 

thence South 03° 41’ 00” West, along said easterly
line of Section 17 and center line of Kenwood Road, 400.00 feet to a
point;

 

thence North 81° 15’ 40” West, passing a found
Concrete Monument at 30.12 feet, a total distance of 602.34 feet to a found
Concrete Monument;

 

thence North 03° 41’ 00” East, parallel with the
easterly line of said Section 17, a distance of 35.13 feet to a set iron
pin with cap;

 

thence North 81° 15’ 40” West, 401.56 feet to a set
iron pin with cap;

 

thence North 03° 41’ 00” East, parallel with the
easterly line of said Section 17, a distance of 276.39 feet to a set iron
pin with cap;

 

thence South 86° 19’ 00” East, passing a found
Concrete Monument at 400.00 feet, and also passing a set iron pin with cap at
970.00 feet, a total distance of 1000.00 feet to the Place of Beginning.

 

 

ASSIGNMENT
OF AMENDED AND RESTATED LEASE AGREEMENT

 

Date:                                                                  
October 28, 1995

 

Assignor:                                        
SHELF STABLE FOODS,
INC., an Ohio corporation

 

Assignee:                                        
THE WORNICK COMPANY,
a Texas business corporation

 

Lease:                                                           
Amended and Restated
Lease Agreement (the “Lease”)

 

Date:                                                                  
Effective
December 30, 1994

 

Landlord:                                          
RONALD C. WORNICK

 

Tenant:                                                     
SHELF STABLE
FOODS, INC., an Ohio corporation

 

Leased Premises:

 

The real property located in Blue Ash, Hamilton
County, Ohio, and more fully described on Exhibit A attached hereto and
incorporated herein, together with any improvements located thereon.

 

Assignor assigns to
Assignee Tenant’s interest in the Lease.

 

A.                                  
Assignee agrees to –

 

1.                                      
Assume and fully
perform all of Tenant’s obligations under the Lease.

 

2.                                      
Accept the Leased
Premises in its present “AS IS”
condition.

 

B.                                    
Landlord consents to
this assignment.

 

C.                                    
Assignee is also a
party to that certain Lease Agreement dated October 28, 1995, by and
between THE WORNICK COMPANY, a Texas business corporation, as TENANT, and
RONALD C. WORNICK, as LANDLORD, pertaining to the properties located in Hidalgo
County, Texas, and more fully described therein (the “Hidalgo County Lease”).
Assignee agrees that a default in the timely performance of any of the
obligations and covenants of TENANT under this Lease (or the Hidalgo County
Lease, as the case may be), at the option of the LANDLORD, shall constitute a
default under the terms of Hidalgo County Lease (or this Lease, as the case may
be).

 

 

	
  ASSIGNOR:

  	
  ASSIGNEE:

  
	
   

  	
   

  
	
   

  	
   

  
	
  SHELF
  STABLE FOODS, INC.

  	
  THE
  WORNICK COMPANY

  
	
   

  	
   

  
	
  By:

  	
  /s/ Brian Dwyer

  	
   

  	
  By:

  	
  /s/ Ronald C. Wornick 

  	
   

  
	
   

  	
  Brian Dwyer,

  	
   

  	
   

  	
  Ronald C. Wornick,
  Chairman

  	
   

  
	
   

  	
  President

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  LANDLORD:

  	
   

  
	
   

  	
   

  
	
  /s/ Ronald C. Wornick 

  	
   

  	
   

  
	
  RONALD C. WORNICK

  	
   

  

 

2

 

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 10, 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 Leased Premises as provided for in Section 7
herein.”

 

3.                                      
The last sentence of
Section 1.f. of the Ohio Lease and 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 are 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 that 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 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 (i) such proceeds are used to service
Landlord’s mortgage secured by the Leased Premises or otherwise are 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 that
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 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

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

 

LEASE
ASSIGNMENT

 

	
  Date:

  	
  July 8th, 1998

  
	
   

  	
   

  
	
  Assignor:

  	
  Ronald C. Wornick

  
	
   

  	
   

  
	
  Assignee:

  	
  Ronald C. Wornick and
  Anita L. Wornick, Trustees of the Ronald C. Wornick and Anita L. Wornick
  Revocable Trust U/D/T dated October 24, 1997

  
	
   

  	
   

  
	
  Leases:

  	
   

  
	
   

  	
   

  
	
   

  	
  (1)

  	
  Amended and Restated
  Lease Agreement, as amended by Amendment to Lease Agreements dated
  November 29, 1995

  
	
   

  	
   

  
	
   

  	
  Date:

  	
  Effective
  December 30, 1994

  
	
   

  	
   

  	
   

  
	
   

  	
  Landlord:

  	
  Ronald C. Wornick

  
	
   

  	
   

  	
   

  
	
   

  	
  Tenant:

  	
  The Wornick Company, a
  Texas business corporation, pursuant to Assignment of Amended and Restated
  Lease Agreement dated October 28, 1995

  
	
   

  	
   

  	
   

  
	
   

  	
  Premises:

  	
  All that tract of land
  situated in Section 17, Township 4, Entire Range 1, Miami Purchase,
  Sycamore Township, Hamilton County, Ohio in the City of Blue Ash and being
  more particularly described on the Exhibit “A” attached hereto.

  
	
   

  	
   

  	
   

  	
   

  

 

(2)                                 
Lease
Agreement, dated November 27, 1995, as amended by Amendment to Lease
Agreements dated November 29, 1995

 

Landlord:             
Ronald C. Wornick

 

Tenant:                                                     
The Wornick Company,
a Texas corporation

 

Premises:                                       
All of the real
property located in Hidalgo County, Texas, described as Tract I, Tract II, Tract
III and Tract IV on the Exhibit “B” attached hereto.

 

Assignor assigns to Assignee Landlord’s interest in
the Leases.

 

A.                                   
Assignee agrees to —

 

1.                                      
Assume Landlord’s
obligations under the Leases.

 

2.                                      
Accept the premises
in their present “as is” condition.

 

 

B.                                   
Tenant consents to this assignment.

 

C.                                   
Assignor agrees that Assignor remains liable on the Leases.

 

	
  ASSIGNOR:

  	
  ASSIGNEE:

  
	
   

  	
  RONALD C. WORNICK AND
  ANITA L. WORNICK, TRUSTEES OF THE RONALD C. WORNICK AND ANITA L. WORNICK
  REVOCABLE TRUST U/D/T dated October 24, 1997

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Ronald C. Wornick 

  	
   

  	
  By:  

  	
  /s/ Ronald C. Wornick

  	
   

  
	
  Ronald C. Wornick

  	
   

  	
  Ronald C. Wornick,
  Trustee

  
	
   

  	
   

  
	
   

  	
  By:  

  	
  /s/ Anita L. Wornick

  	
   

  
	
   

  	
   

  	
  Anita L. Wornick,
  Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
  TENANT:

  	
   

  
	
   

  	
   

  
	
  The Wornick Company, a
  Texas corporation  

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Ronald C. Wornick

  	
   

  	
   

  
	
   

  	
  Name:

  	
  President & CEO

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Ronald C. Wornick

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

2

 

EXHIBIT
“A”

 

All that tract of land situated in Section 17,
Township 4, Entire Range 1, Miami Purchase, Sycamore Township, Hamilton County,
Ohio in the City of Blue Ash and being more particularly described as follows:

 

Beginning at a point in the easterly line of said
Section 17, also the center line of Kenwood Road, located South 03’ 41’
00” West, 1,543.38 feet from the northeasterly corner of said Section 17;

 

thence South 03° 41’ 00” West, along said easterly
line of Section 17 and center line of Kenwood Road, 400.00 feet to a
point;

 

thence North 81° 15’ 40” West, passing a Found
Concrete Monument at 30.12 feet, a total distance of 602.34 feet to a found
Concrete Monument;

 

thence North 03° 41’ 00” East, parallel with the
easterly line of said Section 17, a distance of 35.13 feet to a set iron
pin with cap;

 

thence North 81° 15’ 40” West, 401.56 feet to a set
iron pin with cap;

 

thence North 03° 41’ 00” East, parallel with the
easterly line of said Section 17, a distance of 276.39 feet to a set iron
pin with cap;

 

thence South 86° 19’ 00” East, passing a found
Concrete Monument at 400.00 feet, and also passing a set iron pin with cap at
970.00 feet, a total distance of 1000.00 feet to the Place of Beginning.

 

 

EXHIBIT
“B”

 

	
  TRACT
  I:

  	
   

  	
  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
  II:

  	
   

  	
  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
  III:

  	
   

  	
  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.

  

 

 

	
  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 rain. 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 mm. 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.

  

 

 

 

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, a Delaware corporation (“Assignee”). Assignor and Assignee are
referred to collectively herein as the “Parties.”

 

W I  T  N  E  S
S  E  T  H:

 

WHEREAS, Assignor’s
predecessor-in-interest, Shelf Stable Foods, Inc., as “Tenant,” and Ronald C.
and Anita A. Wornick Revocable Trust, successor-in-interest to Ronald C.
Wornick, as “Landlord,” are parties to the Amended and Restated Lease Agreement
dated December 30, 1994, as assigned to Tenant by Assignment of Amended
and Restated Lease Agreement dated October 28, 1995, as amended by
Amendment to Lease Agreements dated November 29, 1995 and as assigned to Landlord
by Lease Assignment dated July 8, 1998 (collectively, the “Lease”),
presently covering certain premises (the “Premises”) located at 10825 Kenwood
Road, Cincinnati, Ohio, 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 due date thereof
immediately preceding the Effective Date.

 

(d)                                
The
current amount of tenant’s expense and tax payments are $36,615.36 per six
months.

 

(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 Ohio.

 

(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

  corporation

  	
  The Wornick Company, a
  Delaware

  corporation

  
	
   

  	
   

  
	
  By:

  	
  /s/ Larry L. Rose

  	
   

  	
  By:

  	
  /s/ Robert B. McKeon

  	
   

  
	
   

  	
  Larry L. Rose,
  President and

  Chief Executive Officer

  	
   

  	
  Robert B. McKeon,
  President

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

3

 

	
  STATE OF NEW YORK

  	
   

  	
  §

  
	
   

  	
   

  	
  §

  
	
  COUNTY OF NEW YORK

  	
   

  	
  §

  

 

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

 

 

	
  /s/ Janna Gabriel

  	
   

  	
   

  
	
  Notary Public

  	
   

  
	
  Printed Name:

  	
  Janna Gabriel

  	
   

  	
   

  
	
  My Commission Expires:

  	
   

  
	
  9/24/05

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

	
  STATE OF NEW YORK

  	
   

  	
  §

  
	
   

  	
   

  	
  §

  
	
  COUNTY OF NEW YORK

  	
   

  	
  §

  

 

The foregoing instrument
was acknowledged before me this June 30, 2004 by Robert B. McKeon,
President of The Wornick Company, a Delaware corporation, on behalf of the
corporation.

 

 

	
  /s/ Elaine Gerace

  	
   

  	
   

  
	
  Notary Public

  	
   

  
	
  Printed Name:

  	
  Elaine Gerace

  	
   

  	
   

  
	
  My Commission Expires:

  	
   

  
	
  5/18/06

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

4

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