Document:

Exhibit
10.36

 

C
O M M E R C I A L  L E A S E  A G R E E M E N T

(Triple Net)

 

THIS LEASE, made
this            day of
                  ,
2003, by and between WESTLAND PARK LLC, an Indiana limited
liability company, of 3112 East SR 124, Bluffton, Indiana 46714 (hereinafter
“Landlord”), and POORE BROTHERS, INC., a
                          
corporation, with principal offices located at 3500 S. La Cometa Drive,
Goodyear, AZ  85338 (hereinafter
“Tenant”).

 

The parties
hereto, in consideration of the leasing by Landlord to Tenant and the taking by
Tenant from Landlord of the premises hereinafter described and in further
consideration of the obligations of each party to the other hereby undertaken,
covenant and agree as follows:

 

1.                                       Leased
Premises/Use.  Landlord
leases to Tenant, and Tenant leases from Landlord, 100,000 square-feet (subject
to remeasure upon completion from inside wall to inside wall) of warehouse and
distribution space (“Demised Premises”) located at the northeast corner of the
intersection of SR 124 and West Lancaster Street, commonly known as 1955
West Lancaster Street, Suite 1, Bluffton, Indiana 46714, and more particularly
described on the attached Exhibit “A” . Landlord shall construct
approximately 3,310 sq. ft. of office space as part of the Demised Premises in
accordance with Exhibit “A” and subject to Tenant’s reasonable approval
of same.  Any additional office space
required by Tenant shall be constructed by Landlord at Tenant’s expense.  It is understood that the Demised Premises
are to be a part of a larger 200,000 square feet building (“Building”), such
building to be one of two or more buildings to be constructed by Landlord. The
total buildings constructed on the premises will form the “Project”. It
is understood that the Tenant will share certain common area elements with
future tenants of the Project. These elements include, but are not limited to,
the parking area and drives for ingress and egress.  Tenant shall have the non-exclusive right to all existing and
future easements, parking areas and facilities, and all appurtenances and
fixtures belonging to or appurtenant to the Building or Project.  Tenant’s use of the Demised Premises, the
Building or the Project is limited to the operation of a warehouse/distribution
center, with office administrative use to support such aforementioned
operation.  No other use shall be
permitted without the prior written consent of the Landlord, which consent
shall not be unreasonably withheld.  The
withholding of consent by Landlord for a use which is inconsistent with the
industrial character of the Project shall be deemed reasonable.

 

As Landlord
constructs additional warehouses in the warehouse complex and obtains
additional tenants, Tenant’s pro-rata share of Common Area Maintenance (paragraph
5) will be adjusted by an addendum to this Lease to reflect the percentage
of the square footage of the Demised Premises as compared to the total square
feet in the Project.

 

2.                                       Term;
Renewal.  The initial
term of this Lease shall commence December 1, 2003, the “Lease
Commencement Date”, and shall continue for a period of three (3) years, or as
extended pursuant to paragraph 26 of this Lease.  If the Demised Premises are not
substantially completed in accordance with Exhibit “A” by
December 1, 2003, the Lease Commencement Date shall be changed to the
first date following December 1, 2003, that the Demised Premises have been
substantially completed in accordance with Exhibit “A”.  A lease year shall be twelve calendar
months, beginning with the Lease Commencement Date.  Landlord or Tenant shall

 

 

submit to the other a
letter confirming the Lease Commencement Date at such time as the date becomes
final so that Tenant may establish its account for the payment of Rent
(hereinafter defined) as required in paragraph 4.

 

3.                                       Peaceful
Possession.  Landlord
covenants that Tenant, upon paying the rental and performing its covenants
herein contained, shall and may peacefully and quietly have, hold, and enjoy
the Demised Premises for the term of this Lease.  Tenant shall have access to the Demised Premises during
Landlord’s construction of the Building prior to the Lease Commencement Date
for the sole purpose of Tenant’s installation of wiring and cabling for
Tenant’s use of the Demised Premises. 
During the twenty (20) days prior to the Lease Commencement Date, Tenant
shall have access to the Demised Premises for the sole purpose of Tenant’s
installation of floor striping as needed by Tenant for Tenant’s use of the
Demised Premises.  During any period of
possession of the Demised Premises prior to the Lease Commencement Date, Tenant
shall have in force the liability insurance required in paragraph 8 of
this Lease and agrees to indemnify Landlord from such use of the Demised
Premises in accordance with paragraph 15 of this Lease.

 

4.                                       Rental.  Tenant, in consideration of the Demised
Premises and of the covenants and obligations of the Landlord contained in this
Lease, shall pay rental for the Demised Premises (subject to the remeasure of
the completed Demised Premises) during the initial term of this Lease as
follows (“Rent”):

 

	
  Lease Term

  	
   

  	
  Annual

  	
   

  	
  Monthly

  	
   

  	
  $/Sq. Ft.

  	
   

  
	
  Years
  1, 2 & 3

  	
   

  	
  $

  	
  358,100.00

  	
   

  	
  $

  	
  29,841.67

  	
   

  	
  $

  	
  3.581

  	
   

  
											

 

Beginning on the
Lease Commencement Date, and on the first day of each month thereafter, Tenant
shall pay Rent in monthly installments as indicated in the above table.  Each monthly payment shall be due and
payable in advance on the first day of each month during the term of this
Lease.  Any Rent due for partial months
at the commencement or termination of this Lease, or the beginning or end of
any term hereof, shall be appropriately prorated.  The total annual rent shall not be adjusted, up or down, by the
remeasure of the completed Demised Premises unless such remeasure indicates a
variance from 100,000 sq. ft. of more than 1,000 sq. ft.

 

Tenant shall
deliver the monthly installments of Rent to Landlord by check, money order, at
3112 East SR 124, Bluffton, Indiana 46714, or electronic fund transfer as
directed by Landlord.

 

5.                                       Common
Area Maintenance (CAM). 
Landlord shall operate and maintain the common areas and common
facilities of the Project at its sole expense, it being acknowledged by the
parties that Tenant’s pro rata share of the common area maintenance charges are
to be reimbursed by Tenant as additional rent. 
Common area maintenance (“CAM”) charges shall be the actual amount
(without profit or “mark up” by Landlord or any affiliate of Landlord) of all
necessary, competitive and reasonable costs and expenses actually incurred by
Landlord in operating and maintaining the common areas of the Project in an
appropriate manner commensurate with good business practice; including, but not
limited to the following items:

 

The costs of maintenance
and repair of:

 

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(a)                                  driveways,
sidewalks, parking areas and any other paved areas (including patching,
sealing, and line painting);

 

(b)                                 building
maintenance including repair to roofs, gutters, downspouts, canopies,
storefronts, electrical and plumbing system, and exterior painting and sealing;

 

(c)                                  water
and septic system repairs and maintenance;

 

(d)                                 landscaping
(including replacement of plant materials);

 

(e)                                  parking lot;

 

(f)                                    Project signage;

 

(g)                                 pest
and weed control;

 

(h)                                 security,
if provided;

 

(i)                                     fire
protection (sprinkler system), if provided;

 

(j)                                     utilities
for the common areas and the water and septic systems;

 

(k)                                  snow
removal;

 

(l)                                     trash,
garbage, and refuse removal, if provided;

 

(m)                               powerwashing;

 

(n)                                 window
cleaning; and

 

(o)                                 surface
water drainage and detention areas.

 

Notwithstanding anything
to the contrary herein, the following items and costs shall be excluded from
Tenant’s pro-rata share of CAM:

 

(a)                                  Costs
attributable to improvements or work which were part of original plans and
specifications for which building permits were issued, i.e., planting, parking
lot lighting, striping, roads, and other such items of capital improvement.

 

(b)                                 Leasing
costs of any type, be it procuring tenants or re-leasing; as well as retaining
existing tenants.

 

(c)                                  Costs
incurred due to Landlord violations of any of the terms and conditions of any
leases with any tenant(s) in the Project.

 

(d)                                 Costs
attributable to enforcing leases against any tenants in the Project, such as
attorney’s fees, court costs, adverse judgments and similar expenses.

 

3

 

(e)                                  Depreciation
and amortization of debt, but excluding depreciation and amortization of
capital improvements.  If the costs of
any repairs, alterations, additions, changes, replacements or other items which
would otherwise be included in CAM are required and/or are of the type which
should be capitalized under the Internal Revenue Code (further examples given
below), then such costs shall not be included in full as CAM costs, but rather
the Landlord shall only include in CAM for each fiscal year the annual portion
of such costs yielded by amortizing the same over the useful life thereof.

 

(f)                                    Interest
on any mortgages of the Landlord and rental under any ground or underlying
lease.

 

(g)                                 Advertising
and promotional expenditures which should be a part of a specific marketing
plan agreed upon by the tenants.

 

(h)                                 Repairs
and other work occasioned by fire, or other casualty that the Landlord is
reimbursed by insurance that was required to be carried under the Lease.

 

(i)                                     Any
costs, fines or penalties, incurred due to violations by Landlord of any
governmental rule or authority and the defense of same.

 

(j)                                     Repairs
and maintenance performed in a tenant exclusive space and not in the common
area.

 

(k)                                  Any
expense for which Landlord receives reimbursement by insurance proceeds or
condemnation awards.

 

(l)                                     Any
and all payroll or other benefits, perks, or expenses for employees of
Landlord; provided, however, that Landlord shall be permitted to pass through
reasonable charges relating to third party contractors performing routine
maintenance for the Project, such as mowing the grass, etc.

 

Tenant shall
reimburse Landlord for it’s pro rata share of the CAM expense commencing with
such expenses incurred on and after the Lease Commencement Date.  Tenant’s payments of its share of the CAM
expense shall be in accordance with paragraph 31 of this Lease.

 

The trailer
parking area designated on Exhibit “A” solely for Tenant’s use shall be maintained
by Landlord at Tenant’s sole expense, and shall not be a part of CAM to be
shared by other tenants.

 

6.                                       Taxes and
Assessments.  Landlord
shall pay all general real estate taxes and all special assessments levied or
assessed against the Project, including the Demised Premises.  Tenant shall reimburse Landlord for Tenant’s
pro rata share of such general real estate taxes and special assessments paid
by Landlord during the term of the Lease, excluding any penalties or interest
for late payment, in accordance with paragraph 31 of this Lease.

 

Tenant shall have
the right to contest any real estate tax assessments at its own expense and, if
necessary, in the name of the Landlord. 
Any recovery of taxes attributable to Tenant’s

 

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period of occupancy and
the Demised Premises shall belong to and shall become the property of Tenant to
the extent of Tenant’s pro-rata share. 
Any contest of amounts due by Tenant shall not constitute a default hereunder.  Tenant shall have the right of contribution
from other tenants for their pro-rata share of Tenant’s costs of any successful
real estate tax assessment challenge. 
Tenant may seek contribution from other tenants or request Landlord to
collect such contribution as part of Landlord’s recovery of taxes paid in
accordance with paragraph 31 of this Lease and the similar provisions of other
tenants’ leases.

 

Tenant shall pay
all personal property taxes assessed against personal property and leasehold
improvements owned or leased by Tenant and located on the Demised Premises.

 

Landlord will make
an application to the County Council of Wells County, Indiana, for a
determination that the Building to be constructed on the Demised Premises
qualifies for a deduction from assessed valuation (Tax Abatement).  Landlord cannot guaranty that such
determination will be approved.  Tenant
agrees to cooperate with Landlord’s application to the extent necessary or
required under the applicable state law or regulations.  If such application is approved, Tenant
agrees to cooperate with any annual filing requirements in order to maintain
any such deduction approved.

 

7.                                       Utilities.  The Demised Premises will be separately
metered for all utilities. Meters will be installed at Landlord’s expense.   Tenant shall contract for utility service in its name and pay from
the date of occupancy and during the term, all charges for utilities separately
metered to the Demised Premises, such as, but not limited to, gas, electricity,
lights, heat, fire protection system, power, telephone and other communication
and utility services used, rendered, or supplied upon or in connection with the
Demised Premises, and shall indemnify and hold Landlord harmless against any
liability or damages on such accounts.

 

8.                                       Insurance.

 

a.                                       Fire
and Extended Coverage Insurance. 
Landlord shall obtain and keep in effect at all times fire and extended
coverage insurance on the Building and improvements comprising the Demised
Premises from the date of occupancy and during the term and any renewal term
exercised by Tenant in an amount equal to the full replacement value of such
buildings and improvements.  Neither
Tenant nor its agents, employees, or guests shall be liable for any loss or
damage to the Demised Premises by fire or any cause within the scope of
coverage actually provided by and paid for by such fire and extended coverage
insurance, it being understood that the Landlord shall be looked at solely for
reimbursement for such covered loss or damage. Tenant shall have the right to
request and receive evidence of Landlord’s proof of insurance.

 

b.                                      Liability
Insurance.  Prior to Tenant assuming
possession, complete or partial, of the Demised premises and during the term of
this Lease, Tenant shall obtain and maintain comprehensive general public
liability insurance against claims for personal injury, death, or property
damage occurring on, in, or about the Demised Premises, such insurance to
afford minimum protection of not less than

 

5

 

$1,000,000.00 in
respect of personal injury or death to any one person, and not less than
$1,000,000.00 in respect of any one occurrence, and of not less than
$1,000,000.00 for property damage. 
Neither Tenant, its agents, employees, nor guests shall be liable for
any claims for personal injury, death, or property damage within the scope of
coverage actually provided by and paid for by such liability insurance, it
being understood that the Tenant shall be looked at solely for reimbursement
for such covered claims.  Landlord shall
have the right to request and receive evidence of Tenant’s proof of insurance.

 

Landlord shall at all
times maintain in effect comprehensive public liability insurance with respect
to the Demised Premises and the common areas of the Project for personal
injury, bodily injury, and property damage, in amounts of not less than those
required of Tenant herein.   Neither
Landlord, its agents, nor employees, shall be liable for any claims for personal
injury, death, or property damage within the scope of coverage actually
provided by such liability insurance, it being understood that the Landlord
shall be looked at solely for reimbursement for such covered claims.

 

c.                                       Loss
of Rents Insurance.  Landlord may
maintain loss of rents insurance to cover any loss of rents required to be paid
by this Lease.

 

All insurance
required by this paragraph shall be placed with responsible companies.  All such policies shall be non-assessable
and shall require thirty (30) days’ notice by registered mail to Landlord and
Tenant of any cancellation thereof or change affecting the coverage thereunder.

 

All insurance
required by this paragraph shall name both Landlord and Tenant as an insured as
their respective interests may appear.

 

Neither party
shall violate nor permit to be violated any of the conditions or provisions of
any such insurance policy.

 

Landlord and
Tenant and all parties claiming, by, through or under them mutually release and
discharge each other from all claims and liabilities arising from or caused by
any casualty or hazard covered or required hereunder to be covered in whole or
in part by insurance on the Demised Premises, or in connection with activities
conducted on the Demised Premises, or in or on the Project, and waive any right
of subrogation which might otherwise exist in or accrue to any person on
account thereof and further agree to evidence such waiver by endorsement to the
required insurance policies, provided that such release shall not operate in
any case where the effect is to invalidate or increase the cost of such
insurance coverage. In the case of increased cost, the other party shall have
the right, within thirty (30) days following written notice, to pay such
increased cost, thereby keeping such release and waiver in full force and
effect.

 

Tenant shall
reimburse Landlord for Tenant’s pro rata portion of Landlord’s insurance
expense in accordance with paragraph 31 of this Lease. Landlord shall
reasonably estimate Tenant’s Proportionate Share of the Landlord’s insurance
costs and Tenant shall pay one twelfth (1/12) together with the payment of
Rent.

 

6

 

9.                                       Repair
and Maintenance.  During
the term of this Lease, Tenant shall, at its expense, maintain and repair the
Demised Premises and every part thereof, excluding Landlord’s responsibilities
as set forth below, and shall use all reasonable precaution to prevent waste,
damage, or injury thereto, ordinary wear, tear, use and acts of God
excepted.  Specifically, but not
intended to be limited hereby, Tenant shall be responsible for maintaining the
interior of the Demised Premises, the HVAC systems, the lighting (including
bulb and ballasts replacements), interior plumbing and plumbing fixtures,
doors, windows, glass, electrical, and communication wiring located on or
within the Demised Premises. Warranties in existence during the Lease will be
used by Tenant.

 

Landlord shall be
responsible for maintenance and repair of the structure, roof and exterior
foundation of the Demised Premises, the sprinkler system, plumbing for common
areas and all aspects of the remainder of the Project.

 

10.                                 Alterations.  All alterations or remodeling of the Demised
Premises shall be done at Tenant’s own cost. 
No alterations or remodeling projects exceeding $2,500 shall occur
without Landlord’s prior approval of the plans and specifications for such
alteration, which shall not be unreasonably withheld.

 

All such
alterations, changes, and improvements to the Demised Premises shall be deemed
to be the sole property of the Landlord and a part of the Demised Premises,
except that all movable trade fixtures purchased by and installed by Tenant
shall be and remain the property of Tenant and shall be removed by Tenant at
the expiration of the term hereof. 
Tenant shall repair any damage to the Demised Premises resulting from
Tenant’s removal of such movable trade fixtures.

 

11.                                 Compliance
With Laws.  Except as may
be otherwise provided paragraph 9, during the term, Tenant shall, at its own
expense, promptly observe and comply with all present and future laws,
ordinances and other regulations of all governmental authorities having
jurisdiction over the Demised Premises, Tenant shall not, however, be
responsible for any condition of whatever nature that existed prior to Tenant’s
date of occupancy of the Demised Premises and Landlord hereby agrees to
indemnify and hold Tenant harmless on account of same.

 

12.                                 Signs.  Landlord shall erect a sign at the entrance
to the Project as specified in the construction specifications document.  The Landlord shall install an electrical box
in the front of the Building for Tenant’s use on or prior to the Commencement
Date.  Tenant may erect, at its own
expense, a sign or signs to identify and advertise Tenant’s business, on and
about the Demised Premises.

 

All signs
installed by Tenant will remain the property of Tenant, removable by Tenant
from the Demised Premises within thirty (30) days after the expiration or
termination of this Lease. Tenant shall repair any damage to the Demised Premises
resulting from Tenant’s removal of such signs.

 

7

 

13.                                 Title
Warranty.  Landlord
represents and covenants that Landlord is fee simple owner of the real estate
encompassing the Demised Premises, subject, however, only to existing mortgages
and other encumbrances covering the Demised Premises and leases affecting the
common areas of the Project.

 

14.                                 Damage
and Destruction.  It is
mutually agreed that in the event the Demised Premises, or the means of ingress
and egress therefrom and thereto are injured by fire or other damage or
destruction during the term of the Lease, the rent provided for herein shall
abate entirely in case the entire Demised Premises or any substantial portion
thereof is untenantable and, in the case a non-substantial portion of the
Demised Premises is untenantable, shall partially abate and shall be prorated
for the portion rendered untenantable, until the Demised Premises are restored
by Landlord to a good, tenantable condition (which Landlord shall undertake to
do with due diligence), the Tenant paying during such time the proportion of
rent that the part of the Demised Premises remaining tenantable shall bear to
the entire Demised Premises during such period; provided, however, that there
shall be no abatement of rent on account of the condition of said Demised
Premises by reason of any loss or damage by fire or other damage or destruction
if such damage or destruction was caused by the negligent or willful act of
Tenant. In the event that the Demised Premises is destroyed or damaged so that
it can not be repaired or reconstructed with reasonable diligence being
exercised within one hundred twenty (120) days from the date of such
destruction or damage by reason of fire or other casualty, either party may
terminate this Lease by giving written notice to the other party within
forty-five (45) days after the date of such destruction or damage; provided,
however, that Tenant may require Landlord to rebuild and restore the Demised
Premises to its previous condition by giving Landlord written notice within
such forty-five (45) day period; provided further, however, if there is less
than one (1) year remaining on the term of this Lease, Landlord shall have the
right to terminate this Lease unless Tenant is agreeable to renewing this Lease
for a minimum term of three (3) years, in which event Landlord shall not have
the right to terminate.

 

For purposes of
this paragraph, the term “tenantable condition” shall mean a condition of the
Demised Premises for use by Tenant for its active operation of its food
warehouse as operated immediately prior to the damage or destruction
contemplated hereunder, in Tenant’s reasonable judgment.

 

15.                                 Indemnification.  Except as caused by the willful or gross
negligent act or omission of Landlord, Tenant agrees, to the extent permitted
by law, to protect, defend, indemnify, and hold harmless Landlord, its
shareholders, officers, directors, employees, agents, and servants from and
against any and all liabilities, losses, damages, claims, actions, suits,
decrees, orders, expenses, demands, or judgments of any nature whatsoever
arising from any injury to or the death of any person, or damage to property,
in any manner growing out of or in the connection with the use, nonuse,
condition, or occupation of the Demised Premises or any part thereof or the
ownership, occupancy, or use thereof by Tenant from and after the Commencement
Date until the Demised Premises are re-delivered to Landlord upon the
termination of this Lease, or any extension thereof; provided, however, Tenant
shall be relieved from and shall have no further obligation to defend and
indemnify Landlord, its shareholders, officers, directors, employees, agents,
or servants as specified herein to the extent of any coverage limits of any
insurance required of and actually maintained by Tenant.

 

8

 

Landlord will, to
the extent permitted by law, indemnify, save harmless, and defend Tenant, its
shareholders, officers, directors, employees, agents, and servants, from and
against any and all liabilities, losses, damages, claims, actions, suits,
decrees, orders, expenses, demands, or judgments of any nature whatsoever
arising from any injury to or the death of any person, or damage to property
arising from or out of any occurrence (i) in, at, or upon the Demised Premises
which is occasioned by any willful or gross negligent act or omission of
Landlord, its agents, employees, or servants; (ii) in or upon any of the common
areas or any part thereof; unless, as to items (i) and (ii),the same be caused
by the willful or gross negligent act or omission of Tenant, its agents,
employees, or servants provided, however, that Landlord shall be relieved from
and shall have no further obligation to defend and indemnify Tenant, its
shareholders, officers, directors, employees, agents, or servants as specified
herein to the extent of any coverage limits of any insurance required of and
actually maintained by Landlord.

 

16.                                 Condemnation.  In the event that the Demised Premises or
the common area, or any part thereof, shall be taken in condemnation
proceedings or by exercise of any right of eminent domain or by agreement
between Landlord, Tenant, and those authorized to exercise such right, Landlord
shall be entitled to collect the entire award made in any such proceeding
without deduction therefrom for any estate hereby vested in or owned by
Tenant.  Tenant agrees to execute any
and all documents that may be required in order to facilitate collection by
Landlord of any and all such awards. 
Provided, however, if any part of such award is exclusively identified
for Tenant’s relocation expense, Tenant shall be entitled to receive such part
of the award.

 

If at any time
during the term of this Lease the whole or substantially all of the Demised
Premises shall be so taken or condemned, this Lease shall terminate and expire
on the date upon which title shall vest in the condemning authority and the
rent provided to be paid by Tenant shall be apportioned and paid to such
date.  For the purposes of this section,
“substantially all of the Demised Premises” shall be deemed to have been taken
if, in the judgement of Tenant, the portion of the Demised Premises not so
taken, and taking into consideration the amount of the net award available for
such purpose, cannot be so repaired or reconstructed as to constitute a
complete, rentable structure capable of producing a proportionately fair and
reasonable net annual income after payment of all operating expenses thereof
when being used by Tenant in the same manner as Tenant was conducting its
business prior to any such taking.

 

In the event of a
taking which shall result in the termination of this Lease, the rights of
Landlord and Tenant in any award shall be as follows and in the following order
of priority:

 

a.                                       There
shall first be paid to the holder of any mortgage to which the Demised Premises
is subject, the amount necessary to release the Demised Premises from any such
mortgage.

 

b.                                      Landlord
shall retain the balance of said award.

 

In the event of a
partial taking, which shall not result in termination of this Lease, Landlord
shall promptly proceed to rebuild, repair, and restore the remainder of any
building of the Demised Premises affected thereby to a complete, independent,
and self-contained

 

9

 

architectural unit, for
the purposes in use before the taking - to the extent the award for such taking
is sufficient to pay for such work.  If
the award for such taking is insufficient to pay for such work, Landlord may
terminate this Lease.  The balance of
such separate award or allocated amount not so used and the award for the
portion of the Demised Premises taken shall be distributed to Landlord.

 

In the event that
such repairing, rebuilding, and restoration is such that the Demised Premises,
in the judgment of Tenant, may not be restored to a tenantable condition (as
defined in the Damage and Destruction paragraph hereof) within ninety (90) days
from the date of taking, then, at the election of Tenant and with notice
thereof to Landlord within thirty (30) days from such taking, this Lease may be
terminated effective as of the date of such taking, and any rental paid by
Tenant in advance shall be refunded.

 

If this Lease does
not terminate as provided in this paragraph, the rent after the date of taking
shall be fixed by agreement of the parties or, in the absence of such
agreement, by arbitration pursuant to the provisions of this Lease, provided,
however, that the Demised Premises are restored within ninety (90) days to a
tenantable condition which is the use by Tenant for the purposes in use before
the taking.  If the Demised Premises
cannot be restored within ninety (90) days, rent shall abate absolutely regardless
of the degree or extent of the taking.

 

17.                                 Subordination
to Mortgages.  This Lease
and all rights of Tenant hereunder are and shall be subject and subordinate to
the lien of any and all mortgage or mortgages, or consolidated mortgage or
mortgages, which may now or hereafter affect the Demised Premises, or any part
thereof, and to any and all renewals, modifications, consolidations,
replacements, and extensions of any such mortgage or mortgages, provided,
however, that any and all mortgagees shall provide to Tenant non-disturbance
and attornment agreements satisfactory to Tenant as provided below.

 

Tenant shall, upon
demand at any time or times, execute, acknowledge, and deliver to Landlord,
without expense to Landlord, such reasonable instruments that may be necessary
or proper to reasonably subordinate this Lease and all rights hereunder to the
lien of any such mortgage or mortgages and each such renewal, modification,
consolidation, replacement, and extension.

 

Landlord agrees to
have included in any existing mortgage or in any renewal, modification,
consolidation, replacement, or extension of any such mortgage hereafter made,
or in a written instrument in recordable form executed by the mortgagee in
connection therewith, provisions to the effect that so long as there shall be
outstanding no default in any of the terms, conditions, covenants, or
agreements of this Lease on the part of Tenant to be performed, said mortgagee
shall provide to Tenant written notice of any default by Landlord under the
terms of any such mortgage and the leasehold estate of Tenant created hereby,
and Tenant’s peaceable and quiet possession of the Demised Premises, shall
remain undisturbed by any foreclosure of such mortgage. Tenant’s agreement to
subordinate this Lease to any such mortgage is expressly contingent upon the
mortgagee agreeing to the above provisions.

 

10

 

18.                                 Access By
Landlord.  Upon 24 hours
prior notice to Tenant, except in the case of an emergency no prior notice
shall be required, Tenant shall permit Landlord or its agents to enter the
Demised Premises during normal business hours for the purpose of inspection, or
of making repairs that Tenant may neglect or refuse to make in accordance with
the agreements, terms, conditions, and covenants hereof, and also for the
purpose of showing the Demised Premises to persons wishing to purchase the same
or to make a mortgage loan on the same and, at any time within three (3) months
prior to the expiration of the term, to persons wishing to rent the same.  Landlord shall take all reasonable
precautions to minimize any interference with Tenant’s business.

 

19.                                 Default.  Each of the following events shall be a
default hereunder by Tenant and a breach of this Lease:

 

a.                                       If
Tenant shall file a petition in bankruptcy or insolvency or for reorganization
or arrangement under the bankruptcy laws of the United States or any insolvency
act of any state or shall voluntarily take advantage of any such law or act by
answer or otherwise or shall be dissolved or shall make an assignment for the
benefit of creditors.

 

b.                                      If
involuntary proceedings under any such bankruptcy law or insolvency act or for
the dissolution of a corporation shall be instituted against Tenant or if a
receiver or trustee shall be appointed for all or substantially all of the
property of Tenant and such proceedings shall not be dismissed or such
receivership or trusteeship vacated within thirty (30) days after such
institution or appointment.

 

c.                                       If
Tenant shall fail to pay Landlord any rent as and when the same shall become
due and payable or fails to pay any other sum required to be paid by Tenant
hereunder after thirty (30) days’ written notice from Landlord.  Any such payment not received by Landlord
within or prior to the end of such notice period, if applicable, shall accrue
interest of twelve percent (12%) per annum, commencing with the original due
date, until paid in full.

 

d.                                      If
Tenant shall fail to perform any of the agreements, terms, covenants, or
conditions hereof on Tenant’s part to be performed and such non-performance
shall continue for a period within which performance is required to be made by
specific provision of this Lease or if no such period is so provided for a
period of thirty (30) days after written notice thereof by Landlord to Tenant,
or if such performance cannot be reasonably had within such thirty (30) day
period, Tenant shall not in good faith have commenced such performance within
such thirty (30) day period and shall not diligently proceed therewith to
completion.

 

e.                                       If
Tenant shall vacate or abandon the Demised Premises, coupled with the
non-payment of rent.

 

11

 

f.                                         If
this Lease or the estate of Tenant hereunder shall be transferred to or shall
pass to or devolve upon any other person or party, except in a manner permitted
under the Assignment and Subletting paragraph hereof.

 

g.                                      If
Tenant shall use the Demised Premises in any way which constitutes a nuisance
as defined in IC 32-30-6-6.

 

If this Lease
shall be held by a permitted assignee or successor of Tenant, the provisions of
subparagraphs a. and b. above shall apply only to such assignee or successor
while in possession of the Demised Premises.

 

If any such event
of default shall occur and be continuing, Landlord may elect to terminate this
Lease, as well as all of the right, title, and interest of Tenant hereunder by
giving to Tenant not less than thirty (30) days’ notice of such termination,
and upon the expiration of the time fixed in such notice, this Lease and the
term hereof, as well as all of the right, title, and interest of Tenant
hereunder, shall expire in the same manner and with the same force and effect,
as if the expiration of the time fixed in such notice of termination were the
end of the term.

 

After expiration
of the applicable period of notice specified in subparagraphs c. and d. of this
paragraph, or without notice in the event of any emergency, Landlord, at its
option, may, but shall not be obligated to, make any payment required of Tenant
herein or comply with any agreement, term, covenant, or condition, required
hereby to be performed by Tenant, and the amount so paid, together with
interest of twelve percent (12%) thereon from the date of such payment by
Landlord, shall be deemed to be additional rent hereunder payable by Tenant and
collectible as such by Landlord with the next succeeding monthly installment of
rent.  All payments received shall first
be applied against such additional rent, then against rent past due, if
applicable, and last against current rent. 
Landlord shall have the right to enter the Demised Premises for the
purpose of correcting or remedying any such default and to remain therein until
the same shall have been corrected or remedied, but neither any such
expenditure nor any such performance by Landlord shall be deemed to waive or
release Tenant’s default or the right of Landlord to take such action as may be
otherwise permissible hereunder in the case of such default.

 

The subsequent
acceptance of rent by Landlord shall not be deemed a waiver of any preceding
breach of any obligation of this Lease by Tenant other than the failure to pay
the particular rental so accepted, and waiver of any breach of a covenant or
condition by either party shall not constitute a waiver of any other breach or
default regardless of knowledge thereof.

 

20.                                 Right to
Re-Enter.  In the event
of termination of this Lease, either by operation of law, by issuance of a
dispossessory warrant, by service of notice, or termination as herein provided,
or otherwise, or in the event of a default referred to in subparagraph c. and
e. of the Default paragraph hereof, Landlord shall immediately re-enter and
repossess the Demised Premises in an effort to mitigate, to the fullest extent possible,
Landlord’s damages.  Landlord’s duty to
re-enter the Demised Premises for the purpose of mitigating Landlord’s damages
is contingent upon Tenant’s vacating and surrendering possession of the Demised
Premises to Landlord.  In the event of
such a re-enter by Landlord, Tenant shall be allowed access to the

 

12

 

Demised Premises for a
reasonable period of time not to exceed sixty (60) days from such re-enter and
upon reasonable prior notice to Landlord for the sole purpose of removing
Tenant’s trade fixtures, personal property and inventory from the Demised
Premises.  Landlord shall not have a
landlord’s lien on Tenant’s trade fixtures, personal property, or inventory and
Landlord shall not have the right of seizure or to sell Tenant’s trade
fixtures, personal property, or inventory.

 

Landlord shall
repair and alter the Demised Premises in a reasonable manner and to the
condition of the Premises at lease commencement, and use its best efforts to
let or relet the Demised Premises or any parts thereof for the whole or any
part of the remainder of the then current term or for a longer period, in
Landlord’s name or as the agent of Tenant, and out of any rent collected or
received from subtenants or as a result of such letting or reletting, Landlord
shall, first, pay to itself the cost and expense of retaking, repossessing,
repairing, and/or altering the Demised Premises, and the cost and expense of
removing Tenant and property therefrom; second, pay to itself the cost and
expense sustained in securing any new tenant; and, if Landlord shall maintain
and operate the Demised Premises, the cost and expense of operating and
maintaining the Demised Premises; and, third, pay to itself any balance
remaining on account of the liability of Tenant to Landlord for the sum equal
to all rent and other charges payable hereunder and unpaid by Tenant for the
remainder of the term.

 

Should any rent
collected by Landlord as provided in this paragraph after the payments therein
mentioned be insufficient to fully pay to Landlord a sum equal to all rent and
other charges payable hereunder for the remainder of the term, the balance or
deficiency shall be paid by Tenant on the rent days herein specified; that is,
upon each of such rent days Tenant shall pay to Landlord the amount of the
deficiency then existing; and Tenant shall be and remain liable for any such
deficiency, and the right of Landlord to recover from Tenant the amount
thereof, or a sum equal to all such rent, additional rent, and other charges
payable hereunder, if there shall be no reletting, shall survive the issuance
of any dispossessory warrant or other termination hereof, and Landlord shall be
entitled to retain any excess.

 

21.                                 Assignment
and Subletting.  Tenant
may not assign or sublet all or any portion of the Demised Premises without the
prior written consent of Landlord, which consent shall not be unreasonably
withheld.  The parties agree that
Landlord’s refusal to give consent to an assignment or subletting to an entity
for an intended use which is inconsistent with an industrial warehouse facility
or the then current zoning of the Demised Premises shall be deemed reasonable.
Tenant shall, however, have the right to assign this Lease to any subsidiary or
organization affiliated with or owned and/or controlled by Tenant without the
consent of Landlord.  The Tenant shall
remain primarily liable for the payment of rent herein reserved and for the
performance of all other terms of the Lease required to be performed by the Tenant,
notwithstanding any assignment or subletting.

 

Landlord may
assign its interest in this Lease or convey its interest in the Demised
Premises without Tenant’s consent.  Such
assignment or conveyance shall be effective as to Tenant upon written notice by
Landlord to Tenant of such assignment or conveyance and upon such assignment or
conveyance Landlord shall have no further liability or obligation to Tenant
under this Lease.  Landlord may assign,
from time to time, the whole or part of the rent at any

 

13

 

time payable hereunder
without Tenant’s consent.  Such
assignment shall be effective as to Tenant upon written notice by Landlord to
Tenant of such assignment.

 

22.                                 End of
Term.  Tenant shall, on
the last day of the term, or upon the sooner termination of the term, peaceably
and quietly surrender and deliver possession of the Demised Premises to
Landlord free of subtenancies (unless Landlord shall consent to the continuance
thereof), in broom-clean condition, including all buildings, replacements,
changes, additions, and improvements constructed, erected, added, or placed by
Tenant thereon, with all equipment in or appurtenant thereto, except for
Tenant’s trade fixtures as provided in paragraph 10 (but not including
equipment installed by any subtenant), in good condition, proper working order
and repair, reasonable wear and tear excepted.

 

23.                                 Arbitration.  In such cases where this Lease provides for
the settlement of a dispute or question by arbitration, the same shall be
settled by arbitration in accordance with the rules, then obtaining, of the
American Arbitration Association, and judgment upon the award rendered may be
entered in any court having jurisdiction thereof.  The venue for any such arbitration shall be Fort Wayne, Indiana.

 

24.                                 Estoppel
Certificate.  Tenant
shall, without charge, at any time and from time to time hereafter, within
fifteen (15) days after request by Landlord, certify by a reasonably written
instrument duly executed and acknowledged to any mortgagee or purchaser, or any
other person, firm, or corporation specified by Landlord, as to the validity
and force and effect of this Lease, in accordance with its tenor, as then
constituted, as to the existence of any default on the part of any party
thereunder, as to the existence of any offsets, counterclaims, or defenses
thereto on the part of Tenant, and as to any other matters which may be
reasonably requested by Landlord.

 

25.                                 Notices.  Whenever it is provided herein that notice,
demand, request, or other communication shall or may be given to or served upon
either of the parties by the other, and whenever either of the parties shall
desire to give or serve upon the other any notice, demand, request, or other
communication with respect hereto or with respect to the Demised Premises, each
such notice, demand, request, or other communication shall be in writing and,
any law or statute to the contrary notwithstanding, shall be effective for any
purpose if given or served as follows:

 

a.                                       If
by Landlord, by mailing the same to Tenant by certified or registered mail,
postage prepaid, return receipt requested, addressed to Tom Freeze, Poore  Brothers,
Inc.  3500 S. La Cometa Drive, Goodyear,
AZ, 85338 or at such other address as Tenant may from time to time
designate by notice given to Landlord by certified or registered mail with a
copy to Lisa Schommer at the same address.

 

b.                                      If
by Tenant, by mailing the same to Landlord by certified or registered mail,
postage prepaid, return receipt requested, addressed to Robert W. Troxel, 3112 East SR 124,
Bluffton, Indiana 46714, or at such other address as Landlord may
from time to time designate by notice given to Tenant by certified or
registered mail, with a copy to Anthony O. Crowell, Gordon & Associates, P.C., 119
East Oak Forest Drive, Bluffton, Indiana 46714.

 

14

 

Every notice,
demand, request, or other communication hereunder shall be deemed to have been
given or served at the time that the same shall be deposited in the United
States mail, overnight mail, postage prepaid, in the manner aforesaid.  Nothing herein contained, however, shall be
construed to preclude personal service of any notice, demand, request, or other
communication in the same manner that personal service of a summons or other
legal process may be made.

 

26.                                 Option to
Extend.  If this Lease
shall be in full force and effect, and if Tenant shall have fully performed all
of its terms and conditions and not be in default hereof, Tenant shall have the
option to extend this Lease for two (2) additional extended terms of three (3)
years each, upon the same terms and conditions, except rental.  Rental (subject to the remeasure of the
described above) for the extended terms shall be as set forth below:

 

	
  Renewal Term

  	
   

  	
  Annual

  	
   

  	
  Monthly

  	
   

  	
  $/Sq. Ft.

  	
   

  
	
  Years
  4 - 6

  	
   

  	
  $

  	
  362,880.00

  	
   

  	
  $

  	
  30,240.00

  	
   

  	
  $

  	
  3.6288

  	
   

  
	
  Years
  7 - 9

  	
   

  	
  $

  	
  372,960.00

  	
   

  	
  $

  	
  31,080.00

  	
   

  	
  $

  	
  3.7296

  	
   

  

 

The option for
each such extended term must be exercised by Tenant by written notice of Tenant’s
desire to extend the term of this Lease to Landlord not less than six (6)
months prior to the expiration of the then current term.

 

27.                                 Holdover
Tenancy.  In the event
the Tenant remains in possession of the Demised Premises after the term of this
Lease, or any extension hereof, such holding over shall be construed as
creating a tenancy from month to month and rent therefore shall be increased by
6% above the monthly rate in effect as of the month preceding the date of lease
expiration.  Such increase in rent
during a holdover tenancy shall be on an annual basis and shall be adjusted
annually thereafter in the event the holdover tenancy extends beyond a twelve
month period.

 

28.                                 Partial
Invalidity.  If any term,
covenant, or condition of this Lease or the application thereof to any person
or circumstances shall, to any extent, be invalid or unenforceable, the
remainder of this Lease, or the application of such term, covenant, or
condition to persons or circumstances other than those as to which it is held
invalid or unenforceable, shall not be affected thereby and each term,
covenant, or condition of this Lease shall be valid and be enforced to the
fullest extent permitted by law.

 

29.                                 Record of
Notice of Lease. 
Landlord and Tenant agree that Tenant shall have the right, at Tenant’s
option and expense, to record a memorandum hereof, in the office of the
appropriate governmental official so as to give record notice to the public of
the existence of Tenant’s rights pursuant to this Lease.  Landlord agrees to execute such documents as
may be necessary to facilitate the recording of a memorandum thereof.

 

30.                                 Broker’s
Commission.  Landlord and
Tenant each agree to be responsible for brokerage commissions or finder’s fees
in connection with this Lease as a result of acts or agreements by each party,
and each party agrees to indemnify the other and hold it harmless from any and
all liabilities arising from any such claim (including, but without limitation,
the actual costs of attorney fees in connection therewith), such agreement to
survive the termination of this lease.

 

15

 

31.                                 CAM;
Insurance; Taxes Reimbursement. 
Tenant’s obligation under this Lease to reimburse Landlord for Tenant’s
pro-rata share of Common Area Maintenance, Insurance, and real property taxes
shall be paid to Landlord in accordance with this paragraph.  Landlord estimates that Tenant’s annual
pro-rata share of such expenses shall be equal to $0.20/sq. ft. of the Demised
Premises.  Tenant agrees to pay its
pro-rata share thereof in advance in twelve (12) equal monthly installments,
together with the payment of Rent.  In
the event the aggregate of Tenant’s installments during the year shall be less
than the amount of such expenses due from Tenant, such deficiency shall be paid
to Landlord within thirty (30) days after demand thereof. In the alternative,
Landlord shall credit Tenant’s next payment due with any overpayment
adjustment. Landlord shall provide to Tenant annually a copy of the tax bill and
a reasonably detailed breakdown of the pro-ration.  Tenant shall have the right to request detailed substantiation
satisfactory to Tenant in Tenant’s sole discretion of all such expenses.  Any payment not received by Landlord within
such thirty (30) days from the invoice date shall accrue interest of 12% per
annum until paid in full, provided that Tenant shall have the right to contest
such invoice in good faith and to pay only such amount as Tenant shall in good
faith deem reasonable pending resolution of the disputed amount.  Any amount so withheld by Tenant shall
accrue interest only in the event and to the extent that such charges are
determined by an award of arbitrators, or by the judgment of a court of competent
jurisdiction, to be reasonable and proper.

 

Tenant’s pro-rata
share shall be determined using a fraction, the numerator of which is the gross
square feet of the Demised Premises (100,000 sq. ft. – subject to the remeasure
described above) and the denominator of which is the total gross square feet in
the Project.

 

32.                                 Right of
First Refusal.  Tenant
shall have the first right to lease any additional warehouse space contained
within the Building on the same terms as offered by Landlord to a prospective
tenant.  Landlord shall give Tenant
written notice of Landlord’s desire to rent additional space in the building in
which the Demised Premises are located. 
If Tenant does not provide written notice to Landlord of Tenant’s
election to rent all of such warehouse space so offered by Landlord within ten
(10) days from the date Tenant receives Landlord’s notice, or if Landlord and
Tenant are unable to agree on the terms of an addendum to this Lease to add
such additional warehouse space to this Lease within such ten (10) days from
the date Tenant receives Landlord’s notice, Tenant shall be deemed to have
waived its right of first refusal as to such additional warehouse space.  If Tenant fails to provide the required
written notice of its desire to rent such additional space or the parties fail
to agree on the terms for the rental of such additional space as herein
required, Landlord shall be permitted to lease such additional space to any
tenant or new tenant.

 

33.                                 Tenant’s
Environmental Representations & Indemnification:

 

a.                                       Tenant
hereby agrees that its use and alterations of the Demised Premises shall comply
with all applicable laws, rules, ordinances, and regulations, including
permits, during its possession; and Tenant will not store, release, or dispose
(or knowingly permit the storage, release, or disposal of) a Hazardous
Substance (as such is defined in subsection b. below) in the Demised
Premises, except for cleaning supplies kept and used in the normal course of
business and in compliance with all applicable environmental law and regulations.  Tenant does

 

16

 

hereby agree to
indemnify and hold Landlord harmless of, from, and against, all claims,
actions, liens, demands, costs, expenses, fines and judgments (including
reasonable legal fees and costs) resulting from, or arising out of, Tenant’s
violation of this provision.

 

b.                                      Definition
of Hazardous Substance:  The parties
acknowledge and agree that for purposes of this provision and the Lease, (a)
the term “Hazardous Substance(s)” shall mean and include any substance which is
or contains: (i) any “Hazardous Substance” as now or hereafter defined in the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as now or hereafter amended (42 U.S.C. Section 9601 et seq.) (“CERCLA”) or
any regulations now or hereafter promulgated under CERCLA; (ii) any “Hazardous
Waste” as now or hereafter defined in the Resource Conservation and Recovery
Act of 1976, as now or hereafter amended (42 U.S.C. Section 6901 et seq.)
(“RCRA”) or any regulations now or hereafter promulgated under RCRA; (iii) any
substance now or hereafter regulated by the Toxic Substances Control Act, as
now or hereinafter amended (15 U.S.C. Section 2601 et seq.) (“TSCA”), or
any regulations now or hereafter promulgated under TSCA; (iv) gasoline, diesel
fuel, oil or other petroleum products or derivatives or fractions thereof; (v)
asbestos or asbestos-containing materials in any form, whether friable or
non-friable; (vi) polychlorinated biphenyls; (vii) radon gas; or (viii) any
other substances, materials or wastes which are now or hereafter regulated or
classified or considered to be mutagenic, carcinogenic, radioactive, hazardous
or toxic under any existing or future federal, state or local law, statute,
court decision, common law, code, ordinance, order, rule or regulation relating
to hazardous or toxic substances, materials or wastes or the protection of the
environment or human health, including without limitation any substance the
presence of which on, in, under or in the vicinity of the Demised Premises (A)
requires reporting, investigation or remediation, (B) causes or threatens to
cause a nuisance on or to the Demised Premises, the warehouse complex, or to
any other property in the vicinity thereof, or poses or threatens to pose a
hazard to the health or safety of persons on or in the vicinity of the Demised
Premises or the warehouse complex; or (C) which, if released, emanated or
migrated from the non-Demised Premises area of the warehouse complex, could
constitute a trespass; and (b) the term “Environmental Laws” shall mean and
include CERCLA, RCRA, TSCA and all other federal, state and local laws,
statutes, court decisions, common law, codes, ordinances, orders, rules and
regulations relating to Hazardous Substances or the protection of the
environment or human health, as same now exist and as hereafter adopted,
promulgated and amended.

 

34.                                 Miscellaneous.

 

a.                                       Entire
Agreement.  This Lease contains the
entire agreement between the parties and cannot be changed or terminated orally
but only by an instrument in writing executed by the parties.

 

17

 

b.                                      Attorneys’
Fees.  In the event of any
litigation or arbitration between the parties arising out of this Lease, or in
connection with the Demised Premises, the prevailing party shall be allowed all
reasonable attorneys’ fees, and all court costs and incidental expenses
incurred or expended in such litigation or arbitration, to be recovered as part
of the costs assessed in such action.

 

c.                                       Governing
Law/Jurisdiction/Venue.  This Lease
shall be governed by and construed in accordance with the laws of the State of
Indiana.  The parties consent to the
jurisdiction and preferred venue of Wells County, Indiana for any legal action
commenced under this Lease.

 

d.                                      Binding
Agreement.  The agreements, terms,
covenants, and conditions herein shall bind and inure to the benefit of
Landlord and Tenant and their respective parent companies, legal
representatives, successors, and, except as otherwise provided herein, their
assigns.

 

e.                                       Force Majeure.  In
the event that either party hereto shall be delayed or hindered in or prevented
from the performance of any act required under this Lease by reason of
materially adverse weather conditions (defined as a catastrophic event and/or
such severe adverse weather as not reasonably foreseeable to the performing
party), strikes, lockouts, labor troubles, failure of power, restrictive
governmental laws or regulations, riots, insurrections, acts of war, or other
reasons of a like nature not the fault of the party delayed in performing works
or doing acts required under the terms of this Lease, then performance of such
act shall be extended for a period equivalent to the period of such delay,
except as otherwise specifically provided herein to the contrary.  The provisions of this Section shall
not (a) be applicable to delays resulting from the inability of a party to
obtain financing or to proceed with its obligations under this Lease because of
a lack of funds; (b) delay or postpone any of the rights specifically granted
to Tenant to terminate this Lease; or (c) be applicable to either party’s
performance of its respective financial obligation pursuant to the terms of the
Lease.

 

IN WITNESS WHEREOF,
Landlord and Tenant have duly executed this Lease on the day and year first
above set forth.

 

	
  WESTLAND PARK, LLC

  	
   

  	
  POORE BROTHERS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
  Robert
  W. Troxel

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
  Title: Manager

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  “Landlord”

  	
   

  	
  “Tenant”

  
						

 

18

 

EXHIBIT A

 

Depiction of
Demised Premises 

 

(See site plan and
Architect’s drawings dated May 12, 2003, as prepared by WKM & Associates

and the attached building specifications)Exhibit 10.37

 

WAREHOUSE
SERVICES AGREEMENT

 

THIS WAREHOUSE AGREEMENT (this “Agreement”), is entered into as of
June 30, 2003, by and between Poore Brothers, Inc., a Delaware corporation
(“Poore Brothers”), and Customized Distribution Services, Inc., a Pennsylvania
corporation (“Warehouseman”).

 

I.                INITIAL TERM

 

The initial term of this Agreement shall commence the earlier of
December 1, 2003 or the first of the month after the building is completed
and shall terminate on December 31, 2008 (the “Term”).

 

II.            WAREHOUSING AND SERVICES; PAYMENT

 

A.           During the Term, Warehouseman shall perform
certain services for Poore Brothers, including, without limitation, receipt,
put away, storage, order selection, shipment, related customer service and
administrative functions and other services described in Schedule A to
this Agreement (collectively, the “Services”). Warehouseman shall furnish all
personnel, materials, equipment’, supplies and other accessories necessary to
perform safely and efficiently the Services and the Services shall be performed
by Warehouseman in a good and workmanlike manner.

 

B.             Rates and charges for the Services are as
set forth in Schedule B to this Agreement. Poore Brothers and Warehouseman
shall review such rates annually. Poore Brothers guarantees minimum annual
receipt will be one hundred twenty (120) thousand pallets through the Term of
this Agreement. For any services not specified in this Agreement or in
Schedule A, Poore Brothers shall pay to the Warehouseman such
consideration as may be mutually agreed upon in advance in writing. Charges
shall be paid by Poore Brothers within twenty (20) days after receipt of
Warehouseman’s statement or invoice for such services with terms of 1% 10 net
20.

If
Poore Brothers, in its reasonable judgment, determines following the end of the
first twelve (12) months of the term hereof that Poore Brothers Gross Sales of
its “Crunch Toons” product line for the preceding twelve (12) months have not
equaled or exceeded an amount necessary to sustain the 120,000 pallet annual
volume guarantee in years 2-5 hereof and provided Poore Brothers is not in
default in the performance of any of the covenants or terms and conditions of
this Agreement either at the time of giving the required Termination Notice
defined herein or on the Termination Date defined herein, Poore Brothers shall
have a one-time option to terminate this Agreement subject to the terms and
conditions of this paragraph (the “Gross Sales Termination Option”). If Poore
Brothers desires to exercise the Gross Sales Termination Option, Poore Brothers
shall give written notice to CDS of Poore Brothers desire to exercise the Gross
Sales Termination Option (the “Termination Notice”) within thirty (30) days
following the Thirteenth (13th) month of the Agreement. Within
fifteen (15) days of its receipt of Poore Brothers Termination Notice, CDS
shall notify Poore Brothers whether the Gross Sales Termination Option may be
exercised and, if so, the date on which the Agreement will be terminated (the
“Termination Date”). The Termination Date shall be no later than thirty (30)
days following CDS’s notice to Poore Brothers that the Gross Sales Termination
Option may be exercised.

If
Poore Brothers exercises the Gross Sales Termination Option and as conditions
precedent to the effectiveness thereof: (a) Poore Brothers shall be fully
liable for all accrued payments under this Agreement which shall become due,
and for the prompt and complete performance of all terms and conditions of this
Agreement, through and including the Termination Date; (b) Poore Brothers shall
pay CDS, on or prior to the Termination Date, $844,500 less the corresponding
amounts for any contracts listed on the attached Exhibit    ,
which are then assumed by Poore Brothers, provided CDS executes all documents
necessary to accomplish such assignment and assumption on or prior to the
Termination Date, free and clear of any liens of any nature; and (c) all
personal property of CDS on the Premises, including, but not limited to, the
office furniture, computers and related hardware along with other office
equipment shall become the property of Poore Brothers upon the Termination Date
and CDS shall execute a bill of sale accordingly transferring title of same
free and clear of any liens of any nature.

 

1

 

If
Poore Brothers does not validly and timely exercise the Gross Sales Termination
Option set forth herein, or if all the terms and conditions set forth above for
exercise of the Gross Sales Termination Option are not entirely satisfied,
then; (a) this Agreement shall continue beyond the Termination Date, and Poore
Brothers shall continue to be bound by the terms of this Agreement as if no
Gross Sales Termination Option had ever existed or been exercised; (b) the Term
hereof shall expire as originally set forth, unless sooner terminated by CDS in
accordance with the terms of this Agreement; and, (c) Poore Brothers shall have
no further right thereafter to terminate this Agreement except as otherwise
specifically provided herein.

The
Gross Sales Termination Option set forth herein is not transferable. The
parties hereto acknowledge and agree that they intend that the Gross Sales
Termination Option shall be “personal” to Poore Brothers, and that in no event
shall any assignee or sub lessee of Poore Brothers have any right to exercise
the Gross Sales Termination Option set forth herein, notwithstanding any prior
approval by CDS of the assignment of this Agreement or the subletting of the
Premises.

 

C.             Commencing on April 7, 2003,
Warehouseman will provide consulting service for Poore Brothers. Poore Brothers
will reimburse Warehouseman for salary and benefits of $7,812.50 on a monthly
basis. Relocation and monthly management fee will be added to first (1)  year pallet fee listed in Schedule B.If
warehouse contract does not commence by December 1, 2003 or a mutually
agreed upon date, Poore Brothers will pay Warehouseman $25,000 for relocation
and $6,500 for the monthly management fee.

 

D.            Warehouse Services Agreement needs to be
executed no later than August 1. Warehouseman needs 90 days prior to move
in date to effectively start-up the operation.

 

III.        PROGRAM SCOPE; SERVICE LEVEL AGREEMENTS

 

The Poore Brothers/CDS Service Level
Agreements 1 through 7 (collectively, the “SLAs”), all of which are attached as
Schedule C to this Agreement, constitute an integral part of this
Agreement as though fully set forth herein and describe the parties performance
obligations under this Agreement. The terms of the SLAs are material terms for
purposes of Section XVIII(B) of this Agreement.

 

IV.       WAREHOUSE

 

A.           Unless otherwise agreed
by Poore Brothers in writing, the warehouse comprising approximately 100,000
square feet and located at 1955 W. Lancaster Street, Suite 1, Bluffton, IN
46714 (the “Warehouse”) shall be operated by Warehouseman for the exclusive use
and benefit of Poore Brothers. Warehouseman shall promptly notify Poore
Brothers of any condition respecting the Warehouse which would prevent or
otherwise inhibit its performance of the Services.

 

B.             Poore Brothers shall
have full access to the Warehouse at all times and shall have the right to
examine, inspect, inventory and count all or any of its goods. If Poore
Brothers desires access outside of normal business hours, Poore Brothers will
coordinate access with Warehouseman.

 

C.             Warehouseman shall be
responsible for all operating expenses and handling fees in connection with the
operation of the Warehouse, except for rent, utilities, dock doors, seals,
levelers, restraints , HVAC system and common area charges and real estate
taxes unless expenses are due to Warehouseman’s neglect.

 

D.            Warehouseman shall
maintain the Warehouse in a good and orderly condition and shall comply with
the storage conditions and sanitation and housekeeping standards established by
the American Institute of Baking from time to time. Warehouseman shall be
responsible for any such related costs to comply. AIB audit cost will be paid
by Poore Brothers.

 

2

 

E.              Notwithstanding
anything to the contrary contained herein, in the event the Federal Food &
Drug Administration or any other governmental authority or entity (hereinafter
“other agency”) determines that the Warehouse is not a fit space for the
storage of Poore Brothers products or food products in general and such
condition resulted from some action or omission of Warehouseman, Warehouseman
shall either (1) bring the Warehouse into compliance within sixty (60) days of
written notice of such determination, or (2) store the Poore Brothers products,
which are the subject of this Agreement, at a substitute facility during that
portion of the Term in which either the Federal Food &Drug Administration
or other agency’s determination of lack of fitness remains in effect. Any
charges over and above the charges herein which may be incurred by Warehouseman
by virtue of providing substitute storage space shall be the responsibility of
Warehouseman. Furthermore, when notice of unsuitable conditions is delivered to
the Warehouseman by any governmental authority or entity, the Warehouseman must
immediately notify Poore Brothers and provide Poore Brothers with a copy of any
letter, report or order which the Warehouseman may have received from such
governmental authority or entity.

 

V.           RELATIONSHIP; SHIPPING

 

Warehouseman shall operate at all times as a
warehouseman under the Uniform Commercial Code as adopted in the State of
Indiana. Poore Brothers shall not ship goods to Warehouseman as a named
consignee. Shipments will be consigned to Poore Brothers c/o Warehouseman.

 

VI.       TENDER FOR STORAGE

 

All goods tendered for storage shall be
delivered at the Warehouse in a segregated manner, properly marked and packaged
for handling. Poore Brothers shall furnish or cause to be furnished to Warehouseman,
at or prior to such delivery, a manifest showing goods to be kept and accounted
for separately.

 

VII. TRANSFER; REMOVAL OF GOODS

 

A.           Instructions to
transfer goods on the books of Warehouseman shall not be effective until
delivered to and received by Warehouseman, and all charges up to the time
transfer is made shall be chargeable to Poore Brothers.

 

B.             Warehouseman may,
without notice, move goods within the Warehouse. Warehouseman shall not, except
as provided in Section VII(C), move goods to another location without the
prior written consent of Poore Brothers.

 

C.             If, as a result of
the quality or conditions of goods of which Warehouseman had no notice at the
time of deposit, goods are a hazard to other property, the Warehouse or
persons, Warehouseman shall immediately notify Poore Brothers and Poore
Brothers shall thereupon claim its interest in such goods and remove them from
the Warehouse at Poore Brothers expense.

 

VIII. 
HANDLING

 

A.           Handling rates and
charges set forth in Schedule B shall cover ordinary labor and
administration involved in receiving goods at the Warehouse door or dock,
placing goods in storage and returning goods to the Warehouse door or dock.

 

B.             Receiving of inbound
shipments will be on a mutually agreed upon schedule utilizing drop
trailers. Outbound shipments will be coordinated between Poore Brothers,
Warehouseman and Transportation Services Provider.

 

3

 

IX.       DELIVERY REQUIREMENTS

 

No goods shall be delivered or transferred except upon receipt by
Warehouseman of complete instructions properly authorized and executed by Poore
Brothers.

 

X.           INBOUND SHIPMENTS

 

A.           Warehouseman shall
promptly notify Poore Brothers of any known discrepancy on inbound shipments
and shall protect Poore Brothers interest by placing an appropriate notation on
the delivering carrier’s shipping documents. Returned goods shall be governed
by Poore Brothers returned goods policy, a copy of which is attached as
Schedule D to this Agreement.

 

B.             Warehouseman
shall immediately notify Poore Brothers if any goods are tendered that, because
of infestation, contamination or damage, might cause infestation, contamination
or damage to the Warehouse or other goods stored therein. Warehouseman and
Poore Brothers shall determine whether any such goods should be refused.
Warehouseman shall have no liability for any demurrage, detention,
transportation and other charges by virtue of any such refusal by Poore
Brothers, unless the infestation, contamination, or damage is the result of a
negligent action or omission of the Warehouseman or a violation of the
procedures set forth in this Agreement.

 

XI.       LIABILITY

 

A.           Warehouseman shall be
liable for damages or the loss of or injury to goods stored or handled and
caused by Warehouseman’s failure to exercise such care in regard to the goods
as a reasonably careful warehouseman would exercise under like circumstances.

 

B.             Warehouseman shall
not be liable for damages for any delay or failure in the performance of this
Agreement resulting from any cause, except financial, beyond its control, such
as acts of God, fires, explosions, floods, wars, sabotage, riots or
governmental action.

 

XII. 
LEGAL LIABILITY INSURANCE

 

During the Term, Warehouseman shall maintain at its expense a warehouseman’s
legal liability insurance policy acceptable to Poore Brothers, including,
without limitation, coverage for mysterious disappearance and employee
infidelity. Such policy shall include general liability coverage of at least
$2,000,000, employer’ liability coverage of at least $1,000,000 and statutory
workers’ compensation coverage. The cancellation or termination of this
Agreement by either party hereto shall not affect the insurance coverage for
losses occurring during the Term. Attached to this Agreement as Schedule E
is a certificate of insurance from an insurance carrier with a minimum rating
by A.M. Best of A.VII., evidencing such insurance coverage and naming Poore
Brothers as an additional insured, which certificate shall provide that such insurance
shall not be canceled or altered without thirty (30) days advance written
notice to Poore Brothers.

 

XllI. 
NOTICE OF LOSS; DAMAGE CLAIM

 

A.           The Warehouseman shall
promptly notify Poore Brothers of any loss or damage, howsoever caused, to
goods stored or handled.

 

B.             All claims by Poore
Brothers relating to the losses or damages disclosed as a result of a Poore
Brothers physical inventory reconciliation, as described in Schedule A,
shall be presented in writing to the Warehouseman.

 

Warehouseman shall reimburse
Poore Brothers for any losses or damages to goods in an amount equal to
manufactured price for such goods. Warehouseman will receive a loss allowance
of .125% of  quarterly cases received.
This will be reviewed on an annual basis.

 

4

 

XIV. 
RECORDS

 

A.           Warehouseman shall
maintain an accurate count of all shipments of goods into and out of the
Warehouse. Warehouseman shall report to Poore Brothers the count taken on each
inbound and outbound shipment and, once reported to Poore Brothers, such count
shall establish the number of cases and/or pallets received or shipped unless
other documentation can prove to the contrary.

 

B.             Warehouseman shall
maintain complete and accurate books and records, recording all inbound and
outbound shipments, so as to produce a continuous balance that shows the number
of cases or pallets of each Poore Brothers product that should be in the
Warehouse, based on the Warehouseman’s count, at any given time.

 

C.             Books and records
maintained by Warehouseman shall be reconciled by Warehouseman with parallel
books and records to be maintained by Poore Brothers as outlined in
Schedule A, which reconciliation shall occur at least once every four (4)
or five (5) weeks depending on the period used for Poore Brothers monthly
financial reporting purposes. The results of this reconciliation shall be
provided to Poore Brothers within 5 working days of period-end.

 

D.            Upon request, Poore
Brothers shall have the right to examine all of the books and records
maintained by  Warehouseman in
connection with this Agreement.

 

XV.  
INDEPENDENT CONTRACTOR

 

A.           Warehouseman is
performing the Services as an independent contractor of Poore Brothers. Nothing
contained in this Agreement shall be construed to place Poore Brothers and
Warehouseman in a relationship as partners, joint venturers, employer/employee
or principal/agent, nor shall Warehouseman be considered in any sense an
affiliate or subsidiary of Poore Brothers. Warehouseman shall not have any
authority to create or assume in Poore Brothers name or on its behalf any
obligation, express or implied, or to act or purport to act as Poore Brothers
agent or legally empowered representative for any purpose whatsoever.

 

B.             All of Warehouseman’s
personnel shall be considered employees of Warehouseman and under no
circumstances shall they be construed or considered to be employees or agents
of Poore Brothers.

 

C.             Warehouseman shall
pay and discharge, at its expense, any and all expenses, charges, fees and
taxes arising out of or incidental to the carrying on of its business
including, without limitation, workmen’s compensation, unemployment insurance
and social security taxes levied or assessed with respect to employees of
Warehouseman.

 

XVI.           COMPLIANCE WITH LAWS, ORDINANCES, RULES AND
REGULATIONS

 

Warehouseman shall comply with all applicable laws, ordinances, rules
and regulations of federal, state, local and other governmental authorities and
entities governing the performance of the Services.

 

5

 

XVII.           REPRESENTATIONS AND WARRANTIES

 

A.           Poore Brothers
represents and warrants that neither the execution and delivery of this
Agreement, nor any other document, agreement, certificate and instrument to
which it is a party or by which it is bound in connection herewith or
therewith, nor the consummation of the transactions contemplated hereunder or
thereunder, or the compliance with or performance of the terms and conditions
herein or therein will result in the creation or imposition of any material
lien, charge or encumbrance of any nature whatsoever upon any of the property
or assets of Poore Brothers except as permitted in or anticipated by this
Agreement, or is prevented by, limited by, conflicts with or will result in the
breach or violation of or a default under the terms, conditions, or provisions
of (1) its certificate or articles of incorporation or by-laws and other
organic documents, (2) any material indenture, evidence of indebtedness, loan
or financing agreement, or other agreement or instrument of whatever nature to
which it is a party or by which it is bounds, or (3) any provision of any
existing law, rule regulation, order, writ, injunction or decree of any court
or governmental authority to which Poore Brothers is subject.

 

B.             Poore Brothers
represents and warrants that (l) it is a corporation duly organized and validly
existing under the laws of the State of Delaware, and it is authorized to do
business in each other jurisdiction wherein its ownership of property or
conduct of business legally requires such authorization, licensing or
qualification, and (2) it has all requisite power, authority, franchises,
permits and licenses to (a) execute and deliver this Agreement and other
document, agreement, certificate or instrument necessary to consummate the
transactions and perform its obligations hereunder and (b) to own its
properties and assets and to carry on and conduct its business as presently
conducted. All necessary action to authorize the execution, delivery and
performance of this Agreement and to consummate the transactions contemplated
hereunder has been taken by Poore Brothers.

 

C.             Warehouseman
represents and warrants that neither the execution and delivery of this
Agreement, nor any other document, agreement, certificate and instrument to
which it is a party or by which it is bound in connection herewith or
therewith, nor the consummation of the transactions contemplated hereunder or
there under or the compliance with or performance of the terms and conditions
herein or therein will result in the creation or imposition of any material
lien, charge or encumbrance or any nature whatsoever upon any of the property
or assets of Warehouseman except as permitted in or anticipated by this
Agreement, or is prevented by, limited by, conflicts with or will result in the
breach or violation of or a default under the terms, conditions or provisions
of (1) its certificate or articles of incorporation or by-laws and other
organic documents, (2) any material indenture, evidence of indebtedness, loan
or financing agreement, or other agreement or instrument of whatever nature to
which it is a party of by which it is bound, or (3) any provision of any
existing law, rule, regulation, order, writ, injunction or decree of any court
or governmental authority to which Warehouseman is subject.

 

D.            Warehouseman
represents and warrants that (1) it is a corporation duly organized and validly
existing under the laws of the State of Pennsylvania, and it is authorized to
do business in each other jurisdiction wherein its ownership of property or
conduct of business legally requires such authorization, licensing or
qualification, and (2) it has all requisite power, authority, franchises,
permits and licenses to (a) execute and deliver this Agreement and any other
document, agreement, certificate or instrument necessary to consummate the
transactions and perform its obligations hereunder and (b) to own its
properties and assets and to carry on and conduct its business as presently
conducted or proposed to be conducted. All necessary action to authorize the
execution, delivery, and performance of this Agreement and to consummate the
transactions contemplated hereunder has been taken by Warehouseman.

 

XVIII.               TERMINATION

 

A.           Either party may
terminate this Agreement if the other party has failed to perform any material
term, condition or obligation hereof (including, without limitation, the terms
of the SLAs) to the satisfaction

 

6

 

of the terminating party and
has failed to correct the same within thirty (30) days after receipt of written
notice of such failure given by such terminating party.

 

B.             Either party may
terminate this Agreement if the other party (1) fails to vacate an involuntary
bankruptcy, insolvency, or reorganization petition for an agreement or
composition with creditors filed against such party within sixty (60) days
after the date of such filing, or files such petition on a voluntary basis; (2)
makes an assignment or transfer for the benefit of creditors; (3) fails to
vacate the appointment or a receiver or trustee for such party or for any
interest in such party’s business within sixty (60) days after such
appointment; or (4) permits an attachment to be levied against and remain
outstanding on the Warehouseman for more than sixty (60) days

 

C.             Upon termination of
this Agreement pursuant to this Section XVIII, both parties shall
cooperate fully in the orderly transition of the Services to another
warehouseman.

 

XIX.           ASSIGNMENT

 

Neither party shall, without the prior written consent of the other
party (which consent shall not be unreasonably withheld), assign this Agreement
by operation of law or otherwise. Notwithstanding the foregoing consent
requirement, but without releasing the parties of their obligations under this
Agreement, either party may assign this Agreement to one of its wholly-owned
affiliates.

 

XX. APPLICABLE LAW

 

This Agreement shall be governed by, enforced, interpreted and
construed under the laws of the State of Indiana. Venue for any action to
enforce this Agreement shall be in the County of Wells, State of Indiana for
any such action filed in state court or in the United States District Court for
the District in which the Warehouse is located for any such action filed in
federal court.

 

XXI.           MEDIATION

 

All
disputes, claims and other matters in controversy arising directly or
indirectly out of or related to this Agreement, or the breach thereof, whether
contractual or non-contractual, shall be submitted first to voluntary
mediation, by written notice to the other party or parties. In the mediation
process, the parties will try to resolve their differences voluntarily with the
aid of an impartial mediator, who will attempt to facilitate negotiations. The
mediator will be selected by agreement of the parties. If the parties can not
agree on a mediator, a mediator will be designated by the American Arbitration
Association in the location of Fort Wayne, IN (“AAA”) at the request of a
party. The mediation will be conducted as specified by the mediator and agreed
upon by the parties. The parties agree to discuss their differences in good
faith and to attempt, with the assistance of the mediator, to reach an amicable
resolution of the dispute. The mediation will be treated as a settlement
discussion and, therefore, will be confidential. The mediator may not testify
for either party in any later proceeding relating to the dispute. No recording
or transcript shall be made of the mediation proceedings. Each party will bear
its own costs in the mediation. The fees and expenses of the mediator will be
shared equally by the parties. If a dispute can not be resolved within ninety
days after the written notice beginning the mediation process (or a longer
period, if the parties agree to extend the mediation), the mediation shall
terminate and the parties shall have the right to file a judicial proceeding in
a court with competent jurisdiction seeking equitable or injunctive relief
after the expiration of said ninety day or extended period.

 

7

 

XXII.       NOTICE

 

Any notice or other communication required or permitted to be given
under this Agreement shall be in writing (including facsimile or similar
transmission) and mailed (by U.S. certified mail, return receipt requested,
postage prepaid), sent or delivered (including by way of overnight courier
service):

 

 

If to Poore Brothers, addressed to:

 

Vice, President, Supply Chain Management

Poore Brothers, Inc.

3500 S. LaCometa Drive

Goodyear, AZ 85338

Telephone: 623-932-6230

Fax: 623-925-1312

 

If to Warehouseman, addressed to:

 

President

Customized Distribution Services, Inc.

20 Harry Shupe Boulevard

Wharton, New Jersey 07885

Telephone: 973-366-5090

Fax: 973-366-2769

 

 

or to such other address as Poore Brothers or Warehouseman shall give
notice to the other by like means. All such notices, demands, and
communications, if mailed, shall be effective upon the earlier of (1) actual
receipt by the addressee, (2) the date shown on the return receipt of such
mailing, or (3) three days after deposit in the mail. All such notices,
demands, and communications, if not mailed, shall be effective upon the earlier
of (1) actual receipt by the addressee, (2) with respect to facsimile and
similar electronic transmission, the earlier of (a) the time that electronic
confirmation of a successful transmission is received, or (b) the date of
transmission, if a confirming copy of the transmission is also mailed as
described above on the date of transmission, and (3) with respect to delivery
by overnight courier service, the day after deposit with the courier service,
if delivery on such day by such courier is confirmed with the courier or the
recipient orally or in writing.

 

XXIII. 
MISCELLANEOUS PROVISIONS

 

A.           The headings contained
herein are inserted for convenience only and shall not be deemed to have any
substantive meaning.

 

B.             If any provision of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable in any manner, the remaining provisions of this Agreement
shall nonetheless continue in full fume and effect without being impaired or
invalidated in any way. In addition, if any provision of this Agreement may be
modified by a court of competent jurisdiction such that it may be enforced,
then that provision shall be so modified and as modified shall be fully
enforced.

 

C.             Except as otherwise
stated in this Agreement, this Agreement contains the entire understanding of
the parties respect to its subject matter, and supersedes all prior or
contemporaneous agreements, understandings and negotiations. No modification or
alteration of this Agreement shall be deemed effective unless in writing and
signed by the parties.

 

8

 

D.            The terms used in this
Agreement, regardless of the number and gender in which they are used, shall be
construed to include the other number (singular or plural), and other genders
(masculine, feminine or neuter), as the context or sense of this Agreement or any
paragraph or clause may require.

 

E.              This Agreement may
be executed in multiple counterparts, each of which shall be deemed an original
and all of which shall constitute one Agreement. The signature of any party to
any counterpart shall be deemed to be a signature to, any may be appended to,
any other counterpart. Telecopied signatures shall be deemed effective as
originals.

 

F.              Each party agrees to
sign and deliver all documents, instruments, certificates and applications
reasonably necessary to consummate the transactions contemplated by this
Agreement.

 

G.             Each of the parties
acknowledges that they and their counsel have reviewed this Agreement and
suggested changes to its language. Therefore, any rule of construction that any
ambiguity shall be construed against the drafter of this Agreement shall not
apply in interpreting the provisions of this Agreement.

 

H.            This Agreement is
solely for the benefit of the parties hereto and shall not confer upon third
parties any remedy claims or actions or other right.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

9

 

IN WITNESS WHEREOF, the parties have duly executed this Agreement on
the date first set forth above.

 

 

	
  POORE BROTHERS, INC.

  
	
   

  
	
   

  	
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  CUSTOMIZED DISTRIBUTION SERVICES, 1NC.

  
	
   

  
	
   

  
	
   

  	
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10

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