COMMERCIAL PROPERTY LEASE
BETWEEN
PILGRIM POULTRY G.P.
LESSOR
AND
PILGRIM'S PRIDE CORPORATION
LESSEE
i
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TABLE OF CONTENTS
COMMERCIAL PROPERTY LEASE
The "Lessor" under this agreement is:
Pilgrim Poultry G.P.
110 South Texas Street
Pittsburg, Texas 75686
The "Lessee" under this agreement is:
Pilgrim's Pride Corporation
P.O. Box 93
Pittsburg, Texas 75686
The Lessor hereby leases to the Lessee the commercial real and
personal property described in this Lease and its attachments and schedules
on the terms and conditions set forth in this Lease.
ARTICLE 1
DESCRIPTION OF LEASED PROPERTY
The real and personal property leased by the Lease is described in
Schedule A, which is attached hereto and incorporated into this Lease.
ARTICLE 2
TERM OF LEASE
2.0.1. Initial Term. The initial term of this Lease is for a period
of ten (10) years as stated in Schedule B.
2.02. Option to Renew. If an option to renew is set forth in Schedule
B, Lessee may, at its option, renew the Lease by giving Lessor written
notice not less than ninety (90) days prior to the expiration of the
initial term stated in Schedule B. After proper notification of renewal,
and after payment of the renewal rental, this Lease will be renewed for a
period of five (5) years at the renewal rental stated in Schedule B, but
the other provisions and conditions of this Lease will continue unchanged.
2.03. Effect of Holding Over. If Lessee retains possession of the
property leased by this agreement after the expiration of the Lease term
and does not renew the term of the lease as provided in Paragraph 2.02
above, this retention of the property will be deemed to constitute a
further lease of the property for a period of one (1) year at the rental of
$65,000.00 per month. In the event of such a holdover, all the other
provisions and conditions of this Lease continue unchanged.
ARTICLE 3
PAYMENTS BY LESSEE
3.01. Rental Payments. The amount of monthly rental payments are
stated in Schedule B. Rental payments shall be made to Lessor's address,
as set forth above, or to any other place that may be designated by Lessor
or its assignees. All rental payments are due and payable in advance on
the first day of each month during the term of this Lease. Any rental
payments not made by Lessee within ten (10) days of its due date are
subject to a late charge of ten percent (10%) of the amount not paid when
due.
ARTICLE 4
USE OF PROPERTY
4.01. Rights of Lessee. Lessee is entitled to the use, operation,
possession, and control of the leased property during the Lease term,
provided Lessee is not in default of any provision of the Lease, and
subject to any security interest Lessor may have given or may give to any
third party during the Lease term. Lessee shall employ and have absolute
control, supervision, and responsibility over any operators or users of the
property, including its own employees, agents and independent contractors.
4.02. Duties of Lessee.
(a) Lessee shall use the leased property in a careful and
proper manner. Lessee agrees that the leased property will be
used in accordance with all customary industry standards, by
competent and fully qualified personnel only. Lessee agrees to
reimburse Lessor in full for all damage to the property arising
from any misuse or negligent act by Lessee, its employees, its
agents or any independent contractors.
(b) Lessee shall not permit any of the leased property to be
operated or used in violation of any applicable federal, state,
or local statute, law, ordinance, rule, or regulation relating to
the possession, use, or maintenance of the property. Lessee will
indemnify and hold Lessor harmless from all liabilities, fines,
forfeitures, or penalties for violations of any statute, law,
ordinance, rule, or regulation of any duly constituted public
authority.
4.03. Commercial Use Limitation. Lessee represents and warrants that
the leased property equipment will be used for commercial or business
purposes only.
ARTICLE 5
MAINTENANCE, REPAIRS, AND ALTERATIONS PERFORMED BY LESSEE
5.01. Maintenance and Repairs. Lessee assumes all obligation and liability
concerning possession of the property, and for its use, operation and
condition, real and personal during the lease term. Lessee shall, at
Lessee's expense, maintain the property in good condition and proper order,
excepting reasonable wear and tear resulting from the ordinary use of the
property. Lessee shall, at Lessee's expense, provide all upkeep, parts,
mechanisms, and devices required to keep the leased property in good
repair, condition, and running order. Lessor has no liability or
obligation of any kind to provide service, maintenance, repairs, or parts
for the leased property.
5.02. Alterations. Lessee shall not make any alterations, additions,
or improvements to the property or equipment (other than those required to
keep the property in good condition and proper order as described in
Paragraph 5.01) without the prior written consent of Lessor.
5.03. Accessions. All installations, additions, replacements, and
substitutions of parts or accessories with respect to any of the property
or equipment under this Lease shall constitute accessions. All accessions
become part of the leased property, are thus owned by Lessor and are
subject to the terms of this Lease.
5.04 Operating Lease Agreements. Lessee assumes and agrees to timely
pay any and all monthly and quarterly payments required under current and
future operating lease agreements as they occur, including the timely
exercise and payment of any residual amounts on leased property as they
come due.
5.05 Purchases of New and Additional Property. Upon agreement with
the Lessor, Lessee agrees to purchase or replace depreciated and/or
obsolete property in a timely fashion. Lessor agrees to finance the
purchase of such property or properties utilizing operating leases, the
payment for which shall be made by Lessee as in Section 5.04. A
description of all such purchases shall be added to Schedule B in a
contemporaneously manner, not less than annually.
ARTICLE 6
OPERATING EXPENSES
THIS IS A TRIPLE NET LEASE. Lessee agrees to pay for all expenses of
operating the leased property, including but not limited to utilities,
licenses, registration, and all other charges in connection with the
operation of the real and personal property.
ARTICLE 7
TAXES AND OTHER CHARGES
7.01. Lessee's Obligation To Pay Taxes. Lessee is liable for and required
to pay, on or before their due dates, all sales and use taxes, real and
personal property taxes, and any other direct or indirect taxes or
governmental charges imposed on the leased property or based on the amount
of rent paid under this Lease or assessed in connection with this Lease.
The term "direct taxes" includes all taxes, except income taxes and
franchise taxes of Lessor, imposed by any federal, state, county,
municipal, or other governmental authority. Lessee shall promptly notify
Lessor and send Lessor copies of any notices, reports, and inquiries
received by Lessee from taxing authorities concerning taxes, fees, charges,
or other assessments received by Lessee.
7.02. Lessee's Obligation for Other Charges. Lessee shall be liable
for any fees for licenses, registrations, permits, certificates of title,
and other certificates as may be required for the lawful operation of the
leased property. All certificates of title shall initially be applied for
in the State of Texas in the name of Lessor, as owner, and Lessee shall
deliver them to Lessor.
7.03. Taxes Required To Be Paid by Lessor. If any taxing authority
requires that a tax or charge, as set forth in Paragraphs 7.01 and 7.02, be
paid to the taxing authority directly by Lessor, Lessee shall, on notice
from Lessor, pay to Lessor the amount of the tax or charge, together with
the next rent installment.
7.04. Contested Taxes. Lessee shall have the right, at Lessee's own
expense, to contest the validity or amount of any tax or charge referred to
in Paragraphs 7.01 and 7.02, if Lessee does so by legal proceedings
promptly instituted and diligently conducted. Lessee shall pay the tax or
charge in question before initiating any proceedings. If taxes or charges
are reduced or canceled, Lessee will be entitled to the refund of any
amount previously paid by Lessee, unless Lessee is in default under the
Lease.
ARTICLE 8
LESSOR'S RIGHT OF INSPECTION AND REPAIR
8.01. Inspections. Lessor shall have the right to enter the premises
for the purpose of inspecting the real and personal property in order to
ascertain its condition and manner of use. Such inspection may be made by
Lessor at its discretion, at all times during Lessee's regular business
hours and otherwise upon one (1) day's prior notice to Lessee.
8.02. Repair Remedy. If Lessor's inspection of the leased property,
as described in Paragraph 8.01, reveals that any property covered by this
Lease is not being properly maintained or utilized according to the
provisions of this Lease, Lessor shall have the right, but not the
obligation, to have the property repaired or maintained at the expense of
Lessee.
ARTICLE 9
OWNERSHIP
9.01. No Sale or Security Interest Intended. This Agreement
constitutes a lease of the property described in Schedule A, and is not a
sale or the creation of a security interest in the leased property. Lessor
at all times retains sole ownership and title to the leased property, and
Lessee does not have and will not, at any time, acquire any right, title,
equity, or other interest in the property, except the right to possession
and use as provided for in this Agreement.
9.02. Identification Markings. Lessor has the right to place and maintain,
on the exterior or interior of each piece of leased property, the following
inscription:
This is the sole and exclusive property of Pilgrim Poultry G.P.,
whose address is 110 South Texas Street, Pittsburg, Texas 75686.
If this Lease is assigned by Lessor, the assignee will have the same right
to place and maintain an inscription as does Lessor. Lessee shall not
remove, obscure, deface, or obliterate the inscription or permit any other
person to do so.
9.03. Right of First Refusal. Lessee shall have the right of
first refusal during the term of this Lease, and any extension or renewal
thereof, in the event Lessor receives an offer to purchase the leased
property. Such right of first refusal shall exist for a thirty (30) day
period following written notification by Lessor of the third party offer
and Lessor's intention to accept such offer.
ARTICLE 10
INVESTMENT TAX CREDIT RETAINED BY LESSOR
Any right to any future investment tax credit permitted under the
Internal Revenue Code is reserved to Lessor and shall not pass through or
be transferred to Lessee in any manner.
ARTICLE 11
INDEMNIFICATION AND LIABILITY
11.01. Risk of Loss and Liability Assumed by Lessee. Lessee
assumes all risk and liability for the loss of or damage to the leased
property, for the death of or injury to any person or property of another,
and for all other risks and liabilities arising from the use, operation,
condition, and possession of the leased real and personal property. Nothing
in this Lease authorizes Lessee or any other person to inhabit, maintain or
operate any of the leased property so as to impose any liability or other
obligation on Lessor.
11.02. Lessee's Duty to Indemnify. Lessee agrees to indemnify,
defend, and hold harmless Lessor, its agents, employees and contractors
from all claims, loss, or damage Lessor may sustain for any of the
following reasons:
(a) Loss of, or damage to, any of the leased property by any
cause.
(b) Injury to, or death of, any person, including but not
limited to agents, employees or contractors of Lessee.
(c) Damage to any property arising from the use, possession,
selection, delivery, return, condition, or operation of any of
the leased property.
11.03. Liability for Fines and Penalties. Lessee has sole liability
for, and must reimburse Lessor for, all expenses, losses, liabilities,
fines, penalties, and claims of every type due to Lessee's sole negligence,
including reasonable attorney's fees, occasioned or imposed by any
governmental or regulatory agency or entity by virtue of Lessee's use or
operation of any of the leased property, or because of the failure by
Lessee to perform any of the Lease terms. Lessee will also pay interest at
the legal rate or ten percent (10%) from the day any such payment is made
by Lessor until the date Lessor is reimbursed by Lessee.
11.04. Obligations Survive Lease Term. The indemnities,
assumptions of risk, liabilities, and obligations of Lessee arising under
this Lease will continue in effect after the termination of the Lease,
regardless of the reason for termination to the extent such indemnities,
assumption of risk, liabilities and obligations arose during the lease
term.
11.05. Obligations Satisfied by Insurance. The indemnities,
assumptions of risk, liabilities, and obligations of Lessee arising under
this Lease may be excused only to the extent that they are covered by the
insurance policies described in Article 13 of this Lease. Any payment
received by Lessor from an insurance carrier shall be set off against the
obligations described in this Article 11.
ARTICLE 12
INCIDENTAL DUTIES IN CASE OF ACCIDENT,
LOSS OF, OR DAMAGE TO PROPERTY
12.01. Notification to Lessor. If any property under this Lease is
damaged, lost, stolen, or destroyed as a result of its operation, use,
maintenance, or possession, Lessee shall promptly notify Lessor of the
occurrence and shall file all necessary accident reports, including those
required by law and those required by interested insurance companies.
12.02. Cooperation in Defense of Claims. Lessee and its employees,
agents and contractors must cooperate fully with Lessor and all insurers
providing insurance under this Lease in the investigation and defense of
all claims or suits. Lessee must promptly deliver to Lessor all papers,
notices, and documents served on, or delivered to Lessee or its employees
and agents in connection with any claim, suit, action, or proceeding at law
or in equity commenced or threatened against Lessee or Lessor concerning
the leased property.
ARTICLE 13
INSURANCE
13.01. Lessee's Obligation to Maintain Casualty Insurance. Subject
to customary self-insurance policies, Lessee agrees to maintain in full
force and effect against loss, theft, damage, or destruction of the leased
property. This insurance shall be at Lessee's sole cost and expense, and
shall name Lessee as an insured, additional insured, or loss payee. The
insurance must be in an amount not less than the total rent payable under
this Lease or the replacement cost of the leased property.
13.02. Lessee's Obligation to Maintain Liability Insurance.
Subject to customary self-insurance policies, Lessee agrees to carry public
liability and property damage insurance, issued by companies satisfactory
to Lessor, insuring the interests of Lessor, Lessee, and their authorized
agents, employees and independent contractors against all claims that may
arise during the term of this Lease that are in any way connected with the
ownership, possession, operation, or use of the leased property. This
insurance shall be at Lessee's sole cost and expense, and shall name Lessor
as an insured or additional insured, in reasonable amounts agreeable to
both parties.
13.03. Insurance Certificate. Lessee agrees to have insurers
furnish to Lessor, no later than five (5) days prior to the date on which
the property is delivered to Lessee, and no later than five (5) days prior
to the expiration date of any existing insurance, a certificate evidencing
the insurance coverage required under Paragraphs 13.01 and 13.02. The
insurance policies must provide that the insurer will not cancel or
materially modify the insurance except on thirty (30) days' advance written
notice to Lessor.
13.04. Consequences of Failure to Insure. Any failure on the part
of the Lessee to procure, maintain, or renew the required insurance shall
constitute a default. In the event of such default, Lessor may, but is not
obligated to, obtain insurance for Lessee and at the expense of Lessee,
without prejudice to any other rights Lessor may have under this Lease.
Lessee further agrees to indemnify and hold harmless Lessor, its
agents, employees and contractors from and against any loss, liability, and
expense, including reasonable attorney's fees, because of Lessee's failure
to comply with any terms, provisions, and conditions of any insurance
policy insuring Lessor and Lessee, or because of Lessee's failure to comply
with the terms and provisions of this Article.
ARTICLE 14
ASSIGNMENT
14.01. Assignment by Lessor. Lessor may assign this Lease or any
rights under it at any time without Lessee's consent. If Lessor does make
an assignment, Lessor's assignee shall have all of the rights, powers,
privileges, and remedies of Lessor set forth in this Lease. Lessee shall be
obligated to any assignee of Lessor only after written notice of the
assignment is delivered or mailed to Lessee, either by Lessor or Lessor's
assignee, by first class mail at Lessee's address listed in this Lease.
14.02. Assignment or Subletting by Lessee. Lessee may assign all
of the rights and benefits of this Lease, but Lessor shall not be obligated
to any assignee of Lessee unless Lessor has given its prior written consent
to such assignment. Lessor's consent to an assignment will not be withheld
unreasonably.
14.03. Waiver of Defenses. Any assignment of rights under this Lease by
Lessee constitutes a waiver by Lessee of any and all claims or defenses of
any kind arising out of this Lease that Lessee may have against Lessor at
the time of assignment. Any assignee of Lessee is bound by the waiver of
Lessee and is barred from asserting any claim or defense so waived by
Lessee.
14.04. Assumption and Retention of Liabilities. Any assignee of
Lessee shall assume any and all obligations under this Lease of Lessee to
Lessor, regardless of whether any obligation arose before or after the
assignment. The assumption of liability by Lessee's assignee under this
provision shall not excuse Lessee from any obligation under this Lease,
regardless of whether the obligation in question arose before or after the
assignment.
ARTICLE 15
CIRCUMSTANCES CONSTITUTING DEFAULT BY LESSEE
Lessor may, at its option, declare Lessee in default by giving Lessee
written notice of default on the occurrence of any of the following events:
(a) Failure by Lessee to make rental payments or perform any
other of its obligations as set forth in this Lease.
(b) Expiration or cancellation of any insurance policy to be
paid for by Lessee as provided for in Article 13 of this Lease.
(c) Involuntary transfer of Lessee's interest in this Lease
by operation of law.
(d) Lessee's assignment of any interest in this Lease that
is not authorized by Article 14.
(e) Institution by or against Lessee of any proceedings in
bankruptcy or insolvency, or the reorganization of Lessee under
any law, or the appointment of a receiver or trustee for the
property and/or goods and chattels of Lessee, or any assignment
by Lessee for the benefit of creditors.
ARTICLE 16
RIGHTS, REMEDIES, AND OBLIGATIONS ON DEFAULT
16.01. Lessor's Rights and Remedies. If the Lessee defaults, and
if a notice of default is given as specified in Article 15 and the default
remains uncorrected for ten (10) business days, Lessor may exercise any one
or more of the following remedies:
(a) Termination of the Lease and Lessee's rights under this
Lease as to any or all items of leased property.
(b) A declaration that all due but unpaid rent and all other
charges due under the Lease are due and payable immediately, and
that Lessor is entitled to this balance together with interest at
the rate of one and one-half percent (1 1/2 %) per month from the
date of notification of default to the date of payment.
(c) Repossession of the property without legal process, free
of all rights of Lessee in and to the property. By this
provision, Lessee expressly authorizes Lessor or Lessor's agent
to enter any premises owned or controlled by Lessee, or Lessee's
agents and assigns, for the purpose of repossessing the leased
property. Lessee specifically waives any right of action Lessee
might otherwise have arising out of the entry and repossession,
and releases Lessor from any claim for trespass or damage caused
by reason of the entry or repossession.
16.02. Lessee's Obligation for Lessor's Costs and Attorney's Fees.
If Lessee defaults,
Lessee shall reimburse Lessor for all reasonable expenses of repossession
and enforcement of Lessor's rights and remedies, together with interest at
the rate of one-half percent (1 1/2 %) per month until the date of payment.
Notwithstanding any other provisions of this Lease, if Lessor places all or
any part of Lessor's claim against Lessee in the hands of an attorney for
collection, Lessee shall pay Lessor's reasonable attorney's fees.
16.03. Remedies Cumulative. The remedies of Lessor set forth in
this Article are cumulative to the extent permitted by law and may be
exercised partially, concurrently, or separately. The exercise of one
remedy does not preclude the exercise of any other remedy.
16.04. Failure to Enforce Not Waiver. Any failure or delay on the
part of Lessor to exercise any remedy or right under this Lease is not a
waiver. The failure of Lessor to require performance of any of the terms,
covenants, or provisions of this Lease by Lessee shall not constitute a
waiver of any of the rights under the Lease. No single or partial exercise
by Lessor of any remedy or right shall preclude any other or further
exercise of that remedy or right or the exercise of any other rights or
remedies. No forbearance by Lessor to exercise any rights or privileges
under this Lease shall constitute a waiver, but all rights and privileges
shall continue in effect as if no forbearance occurred. Acceptance by
Lessor of rent or other payments made by Lessee after default shall not
constitute a waiver of Lessor's rights and remedies arising from Lessee's
default.
16.05. Forfeiture of Lessee's Interest on Default. If Lessee
defaults for any reason and this Lease is terminated and the leased
property repossessed, Lessee and Lessee's successors in interest shall have
no right, title, or interest in the leased property, its possession, or its
use. Lessor shall retain all rents and other payments of any kind made by
Lessee under this Lease.
ARTICLE 17
SALE OR ENCUMBRANCE
17.01. Sale or Disposal Prohibited. Lessee may not part with possession
or control of any of the leased property. Nor may Lessee sell, mortgage, or
attempt to sell or mortgage any of the leased property. Lessee may not
otherwise dispose or attempt to dispose of any leased property or any of
the interest under this Lease except as permitted by Article 14 of this
Lease. On the occurrence of any of these events, Lessee will be in default.
17.02. Encumbrance Prohibited. Lessee may not pledge, encumber,
create a security interest in, or permit any lien to become effective on
any of the leased property. On the occurrence of any of these events,
Lessee will be in default.
Lessee shall promptly notify Lessor of any liens, charges, or other
encumbrances of which Lessee has knowledge. Lessee shall promptly pay or
satisfy any obligation from which any lien or encumbrance arises. Lessee
shall deliver to Lessor appropriate satisfactions, waivers, or evidence of
payment of any lien or encumbrance.
ARTICLE 18
RETURN OF PROPERTY ON EXPIRATION OF LEASE
18.01. Lessee's Duty to Return. On the expiration of the lease
term, or on any earlier termination of this Lease, Lessee shall return all
of the leased property to Lessor in good repair and condition, less normal
wear, tear, and depreciation.
18.02. Right of Lessor to Repossess. If Lessee fails or refuses to
return the property to Lessor at the expiration of the lease term or at
some earlier termination of this Lease, Lessor shall have the right to take
possession of the property without legal process, free of all rights of
Lessee in and to the property. By this provision, Lessee expressly
authorizes Lessor or Lessor's agent to enter any of the premises owned or
controlled by Lessee, or Lessee's agents and assigns, for the purpose of
repossessing the leased property. Lessee specifically waives any right of
action Lessee might otherwise have arising out of the entry and
repossession, and releases Lessor from any claim for trespass or damage
caused by reason of the entry, repossession, or removal.
ARTICLE 19
PURCHASE OPTION
At any time after one month from the date the lease term commences,
but not later than the date fixed in Schedule B for the expiration of the
term of this Lease, if Lessee has duly made all payments required under
this Lease, Lessee will have the right, at its option, to purchase the
Property at its market price at the time of the exercise of the option. For
purposes of this purchase option, the market price shall be determined by
an independent appraiser appointed by Lessor and Lessee.
If Lessee exercises this option, Lessor shall, upon payment of the
purchase price, execute and deliver to Lessee all documents necessary and
proper to effect transfer of ownership of the property to Lessee, free and
clear of all encumbrances, security interests, and liens. If lessee pays
the full agreed purchase price, this Lease shall be terminated as to any
property so purchased by Lessee, and no further rents will be due for the
property.
ARTICLE 20
GENERAL PROVISIONS
20.01. Notices. All notices required to be given under this Lease
shall be in writing. Notices under this Lease will be deemed duly served
and given when either (a) personally delivered to the party or the
designated agent of the party to whom they are directed; or (b) deposited
in the United States mail, certified or registered mail with postage
prepaid, addressed to the party at the address given for the party in this
Lease.
20.02. Change of Address. Either party may change its address for
the purpose of this Lease by giving written notice of the changed address
in the manner specified in Paragraph 20.01.
20.03. Amendment, Modification, and Waiver. This Lease may not be
amended, modified,
or altered in any manner except in a writing signed by the parties. No
covenant or condition of this Lease may be waived except by the written
consent of Lessor. Any such written waiver of any term of this Lease is
effective only in the specific instance and for the specific purpose given.
20.04. Additional Real Property Added to Lease. Additional real
property may, from time to time, be added as the subject matter of this
Lease as agreed by the parties. The addition of real property to the terms
and conditions of this Lease may be accomplished only by means of a written
amendment to Schedules A and B. An amendment to Schedules A and B must be
prepared, describing the additional real property, the monthly rental for
the additional real property, and the term of the leasing period for the
additional real property. The addition of real property is effective only
when the written amendment to Schedules A and B described in this paragraph
is signed by the parties to this Lease.
20.05. Entire Agreement. This Lease and the attached Schedules A
and B (which are incorporated by reference and made an integral part of
this Lease) constitute the entire agreement between the parties. No
agreements, representations, or warranties other than those specifically
set forth in this Lease or in Schedules A and B are binding on any of the
parties.
20.06. Choice of Law. This Lease has been executed and delivered
in the State of Texas and
shall be interpreted under and construed in accordance with the law of
Texas. It is agreed that Texas law will control the validity of and the
obligations created by this Lease.
20.07. Severability. If one or more of the provisions of this
Lease, or the application of any provision to any party or circumstance, is
held invalid, unenforceable, or illegal in any respect, the remainder of
this Lease and the application of the provision to the other parties or
circumstances shall remain valid and in full force and effect.
20.08. Heirs and Successors. This Lease and each of its provisions
shall be binding on and inure to the benefit of the respective heirs,
assignees, executors, administrators, trustees, and successors of the
parties. Nothing in this paragraph may be construed as a consent by Lessor
to any assignment by Lessee of any interest this Lease except as provided
in Article 14 of this Lease.
20.09. Time of Essence. Time is of the essence in this Lease and
in each provision contained in it. Each provision of this Lease is agreed
by the parties to be a material, necessary, and essential part of this
Lease.
20.10. Mandatory Arbitration. Any controversy or claim, including
any claim of misrepresentation, arising out of or related to this Lease or
breach of this Lease must be settled by arbitration. The arbitration will
be conducted by a single arbitrator under the then current rules of the
American Arbitration Association, provided that the arbitrator shall be
chosen from a panel of persons knowledgeable in the business of egg
production. The decision and award of the arbitrator shall be final and
binding, and the award so rendered may be entered in any court having
jurisdiction. The arbitration will be held and the award deemed to be made
in Pittsburg, Texas.
Dated: December 29, 2000.
LESSOR: LESSEE:
PILGRIM POULTRY G.P. PILGRIM'S PRIDE CORPORATION
By:_________________________________
By:___________________________________
Lonnie Bo Pilgrim Clifford E. Butler, Vice
Chairman
<PAGE>
SCHEDULE A
DESCRIPTION OF PROPERTY
1. The Real Property to which this Schedule and Lease applies is:
Attachment 1
2. The Personal Property to which this Schedule and Lease applies
is:
Attachment 2
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SCHEDULE B
1. Term. The term of this Lease commences on December 31, 2000.
Unless this Lease is terminated earlier for cause or by means of a mutual,
signed amendment to the Lease, the term of this Lease expires on December
30, 2011.
2. Rent. The total rent for the property in this Lease is
$7,500,000. Except as otherwise provided in the Lease or in this Schedule,
the rent shall be payable in 120 monthly installments of $62,500 each,
commencing on the last day of December, 2000, and continuing on the last
day of each succeeding month until the total sum has been paid in full.
3. Renewal Option. Lessee may renew the Lease for the property in
this Lease for a five (5) year term on expiration of the original term
specified in paragraph 1 of this Schedule. The rent for the renewal term
shall be $65,000.00 per month. All other terms and conditions of the Lease
and this Schedule B will apply during any renewal term.
The option to renew set forth herein may be exercised by Lessee's
written notice to Lessor not less than ninety (90) days before the
expiration of the term of the Lease.
Schedules A and B are approved, agreed, attached hereto, and
incorporated herein as an integral part of the Lease between the parties,
dated December 29, 2000.
LESSOR:
PILGRIM POULTRY G.P.
By:_________________________________
Lonnie Bo Pilgrim
LESSEE:
PILGRIM'S PRIDE CORPORATION
By:_________________________________
Clifford E. Butler,
Vice Chairman
