EX-10.H3
SUBLEASE AGREEMENT
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THIS SUBLEASE AGREEMENT is entered into this 1st day of February, 1994,
by and between UNITED RESOURCES, INC., an Oregon corporation ("Sublessor") and
R.A.F. LIMITED LIABILITY COMPANY, an Oregon limited liability company
("Sublessee").
RECITALS:
A. Sublessor has entered into a Sublease for a term commencing October
15, 1991, and expiring August 1, 2011, with United Grocers, Inc. ("Lessor"), for
a supermarket located in the Heritage Plaza, Albany, Oregon, a copy of which is
attached hereto, marked as Exhibit "A," and by this reference incorporated
herein, as fully as if its terms and conditions were herein set forth.
B. Sublessee desires to sublet the premises commencing on February 2,
1994, and expiring August 1, 2011, and Sublessor is willing to sublease the
premises in accordance with the terms and conditions contained herein.
NOW, THEREFORE, IT IS HEREBY AGREED as follows:
1. SUBLEASE TERMS AND OPTIONS. Sublessor hereby sublets unto Sublessee
those premises described in Exhibit "A," for the whole term remaining as
described therein.
1.1 Provided the Sublessee has performed all of its obligations to
be performed under this Sublease and is not in default thereunder and further
provided the Sublessee (R.A.F.)
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has extended its duration by amending its operating agreement to extend its
duration beyond August 1, 2011, to a date through the renewal term, and provided
the Sublessor has exercised its option to extend its Sublease, then in that
event, the Sublessee may exercise the renewal option contained in Exhibit A. The
rental rate during such renewal term shall be in an amount equal to that
determined under the master lease.
In the event Sublessor exercises it option to renew, it shall give
Sublessee written notice of said exercise, within five days from the date of
exercise.
2. RENTAL. Sublessee covenants and agrees to pay the rental for the
whole of the term, and to perform all affirmative covenants including, without
limitation, those pertaining to taxes, assessments, insurance, and all of the
covenants and obligations to be performed by Sublessor as Lessee, as set forth
in Exhibit "A," and to make such payments and provide such performance when due
by the terms of the Lease and any amendments thereto. Basic rental will be paid
in accordance with the Schedule attached hereto, marked as Schedule "A-1," and
by this reference incorporated herein. To the extent the basic rent in Schedule
"A-1" is less than the basic rental in the prime Lease, Sublessor agrees to
indemnify and hold Sublessee harmless from the obligation to pay the same.
3. DEPOSITS. Sublessee shall, upon execution hereof, pay any and all
rentals, or security deposits, as required pursuant to the terms and conditions
of Exhibit "A," prorated as of
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February 2, 1994.
4. INDEMNITY AND HOLD HARMLESS. Sublessee shall be bound by the same
responsibilities, rights, privileges and duties as Sublessor, as enumerated in
Exhibit "A" except as otherwise provided herein, and covenants and agrees to
fully indemnify and hold Sublessor harmless from any and all responsibility
and/or liability which Sublessor may incur by virtue of Exhibit "A," and/or
Sublessee's occupancy of the premises. Furthermore, Sublessee shall be bound by
any subsequent amendment, revision, supplement, or addition to the prime Lease
between Sublessor and the prime Lessor with Sublessee's prior written consent,
and to keep the Sublessor indemnified against all actions, claims and demands
whatsoever in respect to said Exhibit "A," and Sublessee's use of the demised
premises.
5. DEFAULT. The following shall constitute a default under this
Sublease:
5.1 Any failure by Sublessee to pay the rent when due, or any
failure by Sublessee to perform any other obligation contained in this Sublease,
or to pay any other amount due under the Lease or to perform any other
obligation of Sublessor under the Lease when due which would constitute a
default under the Lease and which continues for the cure period provided with
respect thereto in the Lease;
5.2 If any warranty, representation or statement made or furnished
to Sublessor by or on behalf of the Sublessee is false in any material respect
when made or furnished;
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5.3 If Sublessee makes an assignment for the benefit of its
creditors, or Sublessee is adjudicated a bankrupt or insolvent, or a trustee,
receiver or liquidator is appointed for all or part of Sublessee's assets, or a
petition or answer is filed by or against Sublessee seeking or acquiescing in
any reorganization, liquidation or similar relief under any federal, state or
local law relating to bankruptcy, insolvency or other relief for debtors.
6. REMEDIES. In the event of any default under this Sublease:
6.1 Sublessor may exercise any and all rights and remedies afforded
to the prime Lessor upon default under the Lease, and any and all other rights
and remedies Sublessor may have pursuant to this Sublease and the laws of the
state of Oregon.
6.2 If a default occurs, this Sublease may be terminated at the
option of the Sublessor by written notice to the Sublessee. The notice may be
given before, after or within the grace period for a default.
6.3 If the Sublease is terminated for any reason, Sublessee's
liability to Sublessor for damages shall survive such termination and Sublessor
may re-enter, take possession of the premises, and remove any persons or
property by legal action or by self-help with the use of reasonable force.
6.4 Following re-entry or abandonment, Sublessor may:
(a) make any suitable alterations or refurbish
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the premises, or both, or change the character or use of the premises, but
Sublessor shall not be required to relet for any use or purpose (other than that
specified in the prime Lease) which the Sublessor may reasonably consider
injurious to the premises, or to any tenant which Sublessor may reasonably
consider objectionable;
(b) relet all or part of the premises, alone or in conjunction
with other properties, for a term longer or shorter than the term of this
Sublease, upon any reasonable terms and conditions, including the granting of
some rent-free occupancy or other rent concession.
6.5 Sublessor may (but shall be under no obligation to) procure any
insurance, pay any rentals, taxes or liens, make any repairs, pay any sums
required to be paid, and to do and perform such other acts as may be required of
Sublessee hereunder, and any payments so made shall bear interest at the rate of
ten percent (10%) per annum from the time of such payment until repaid.
6.6 No expiration or termination of this Sublease, repossession of
the premises or any part thereof, or resubletting of the premises or any part
thereof, whether pursuant to the terms of this Sublease or any operation of law
or otherwise, shall relieve Sublessee of its liabilities and obligations under
this Sublease, all of which shall survive such expiration, termination,
repossession or subletting.
7. DAMAGES. Whether or not an election is made to termin-
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ate the Sublease, Sublessor shall be entitled to recover immediately without
waiting until the due date of any future rent, or until the date is fixed for
expiration of the Sublease term, the same amount of damages as set forth in the
prime Lease as though the Sublessor were the prime Lessor and the Sublessee were
the prime Lessee.
8. RIGHTS CUMULATIVE; NONWAIVER. No right or remedy herein conferred
upon or reserved to Sublessor is intended to be exclusive of any other right or
remedy, and each and every right and remedy shall be cumulative and in addition
to any other right or remedy given hereunder or now or hereafter existing at law
or in equity or by statute. The failure of Sublessor to insist at any time upon
the strict performance of any covenant or agreement or to exercise any option,
right, power or remedy contained in this Sublease shall not be construed as a
waiver or relinquishment thereof for the future. No waiver by Sublessor of any
provision of this Sublease shall be deemed to have been made whether due to the
receipt of rent or otherwise, unless expressed in writing and signed by
Sublessor.
9. ASSIGNMENT AND SUBLETTING. Sublessee acknowledges that except as
provided herein, the provisions for extension, options and assignment and
subletting in the prime Lease are applicable to the prime Lessor and Sublessor
only. Sublessee will not assign this Sublease or sublet the premises without the
prior written consent of Sublessor which will not be unreasonably withheld. A
direct or indirect transfer of ownership and control of
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a majority of the voting stock of Sublessee, by whatever means, shall be deemed
an assignment of this Sublease for the purpose of this paragraph.
10. COVENANTS, REPRESENTATIONS AND WARRANTIES.
10.1 Sublessee agrees that as long as this Sublease remains in
effect, should Sublessee ever desire to sell the store operated on the premises,
except for a sale unto Xxxxxx'x Foodliner, Inc., it shall give Sublessor the
first opportunity to purchase the same at its fair market value; provided,
however, if Sublessor does not elect to purchase the store for its fair market
value as agreeable to Sublessee within 60 days after receipt of written notice
of Sublessee's intent to sell, Sublessee may thereafter sell the store to anyone
upon such terms and conditions as are acceptable to Sublessee. The foregoing
provisions do not apply to transfers of assets or interests by sale, gift or as
a result of death to the lawful issue of the owners of Sublessee, or transfers
of assets to a corporation or partnership, or transfers of a controlling
interest to a trust, as long as such corporation, partnership or trust is
controlled by the transferor and such transferee agrees that it holds such
assets or controlling interest subject to the restrictions named in this
section.
10.2 Sublessee agrees that throughout the term of this Sublease and
any extensions or renewals thereof, except as hereinafter provided, to purchase
from United Grocers, Inc., not less than 45 percent of its retail sales of all
goods and merchandise
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required by it for resale on the premises to the extent that United Grocers,
Inc., shall now or hereafter be able to supply such goods and merchandise to
Sublessee, and United Grocers, Inc., will supply all of Sublessee's requirements
at such prices and on such terms as are reasonably comparable to those offered
by United Grocers, Inc., to other purchasers from United Grocers, Inc., carrying
on businesses similar to that of the Sublessee in Linn County, Oregon. If, at
any time, Sublessee contends that United Grocers, Inc., is not able to supply
particular goods or merchandise customarily stocked by retail supermarkets in
Linn County, Oregon, or that terms offered by United Grocers, Inc., are not
reasonably comparable to those offered by United Grocers, Inc., to other such
purchasers, the Sublessee shall so advise United Grocers, Inc., in writing,
specifying such contention with particularity. If, within 30 days after the
receipt of such notice, United Grocers, Inc., does not offer to supply goods or
merchandise so specified or does not advise Sublessee that the terms and
conditions offered are reasonably comparable to those offered to such other
purchasers, Sublessee shall be free to secure such specified goods and
merchandise from any other source it desires. If United Grocers, Inc., asserts
that it is offering reasonably comparable terms and prices and Sublessee
nonetheless purchases from another source, such purchase shall be a default
under this section.
10.3 Sublessee represents and warrants that there are no brokers,
finders or other persons entitled to any fee, commis-
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sion or other compensation in connection with this Sublease, and agrees to hold
Sublessor harmless from any claims for such fees, commissions and/or
compensation.
10.4 Sublessee hereby represents and warrants to Sublessor that the
financial statements, appraisals and other documents submitted to Sublessor in
connection herewith or pursuant hereto are and shall be true, correct, complete
and accurate in every respect and said financial statements fairly and
accurately present the assets, liabilities, financial condition and results of
operations reflected herein.
10.5 Sublessor represents and warrants that it has performed all of
the obligations which the Lessee is required to perform under the terms of the
Lease to which this Sublease pertains, as of the date of this Sublease, and that
the Lease is in full force and effect and not in default in any respect.
Further, Sublessor represents that there is nothing as a result of which the
passage of time or the giving of notice would constitute a default for actions
which have already occurred prior to the date of this Sublease.
11. ATTORNEY'S FEES. In the event of the institution of any suit or
action to terminate this Sublease, or to enforce the terms or provisions hereto,
the prevailing party shall recover and the losing party hereby agrees to pay, in
addition to the costs and disbursements provided by statute, reasonable
attorney's fees in such proceedings or on any appeal from any judgment or decree
entered herein.
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12. NOTICES. Any notice or demand required or permitted to be given
under this Sublease shall be deemed to have been properly given when, and only
when, the same is in writing and either personally delivered or by mail if it
has been deposited in the United States mail, with postage prepaid, to be
forwarded by registered or certified mail and addressed to the party to be
notified at the address appearing below its signature. Such addresses may be
changed from time to time by notice as above provided.
IN WITNESS WHEREOF, the parties have executed the foregoing Sublease
the day and year first herein written.
Sublessor: United Resources, Inc.
By [illegible]
Title: President
Sublessee: R.A.F. Limited Liability Company
By [illegible]
Title: Controller
UNITED GROCERS, INC. (LESSEE)
CONSENTS TO THE ASSIGNMENT AND
CONSENT TO MODIFICATION IN THE
PERCENTAGE OF PURCHASE REQUIRE--
MENTS FROM 58% TO 45%.
United Grocers, Inc.
By [illegible]
Title: President
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SCHEDULE "A-l"
Sublessee, notwithstanding the terms and conditions of the prime Lease
(paragraph ), shall, for the balance of the initial term be:
----
At such time as Sublessee's average weekly gross sales are below
$200,000, the basic rent shall be zero. Once the average weekly gross sales
reach $200,000, the annual basic rent will be $12,000, subject to annual
adjustment each year of the term. The rent will increase or decrease by $1,000
per month whenever the average weekly gross sales increase or decrease by
$10,000, as shown on the following schedule:
Average Weekly Gross
Sales Basic Annual Rent
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up to $200,000 - 0 -
$200,000 $ 12,000
$210,000 $ 24,000
$220,000 $ 36,000
$230,000 $ 48,000
$240,000 $ 60,000
$250,000 $ 72,000
$260,000 $ 84,000
$270,000 $ 96,000
$280,000 $108,000
$290,000 $120,000
$300,000 $132,000
etc. etc.
Average weekly gross sales shall be determined on a 12-month basis, commencing
on the date the market opens, calculated retroactively within 60 days after the
end of each 12-month period. Basic rent for the following 12-month period will
be based on the amount finally determined for the prior 12-month period, subject
to adjustment at year end. Real property taxes, maintenance and repair of
premises, insurance, and common area maintenance expenses will be paid by
Sublessee.
SCHEDULE "A-1"
