EXHIBIT 10.K3
SUBLEASE AGREEMENT
THIS SUBLEASE AGREEMENT is entered into this 27th day of October, 1991,
by and between UNITED GROCERS, INC., an Oregon corporation (Sublessor) and
XXXXXX'X FOODLINER, INC., an Oregon corporation (Sublessee).
RECITALS:
A. Sublessor has entered into a Lease for a 20-year term commencing 7-
15, 1987, with KIVCO, an Oregon partnership, for a supermarket located in the
Delta Oaks Shopping Center, City of Xxxxxx, County of Lane, State of Oregon, a
copy of which is marked Exhibit A attached hereto and by this reference
incorporated herein, as fully as if its terms and conditions were herein set
forth.
B. On July 17, 1987, KIVCO assigned its interest in the lease referred
to in Recital A to X.X. Xxxxxxxxx Ranch, a Washington limited partnership.
C. Sublessee desires to sublet the premises commencing on October 28,
1991, 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 term remaining as described
therein.
1.1 So long as it is not in default hereunder, the Sublessee may
exercise the renewal options contained in Exhibit A as set forth in paragraphs
3 and 7 of said Exhibit.
2. Rental. Sublessee covenants and agrees to pay the same rental for
the whole of the term, together with all affirmative covenants including,
without limitation, those pertaining to basic rent, percentage of gross sales,
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.
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 October 28, 1991.
4. Indemnity and Hold Harmless. Except as provided in paragraph 5,
Sublessee shall be bound by the same responsibilities, rights, privileges and
duties as Sublessor, as enumerated in Exhibit A, 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, 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. Roof Repair and Replacement. In consideration for the payment by
the prime Lessor of $26,400, Sublessor agreed to accept the responsibility for
all repairs and replacement of the roofing for the premises during the lease
term and any extensions thereof.
5.1 If Sublessor pays the sum of $26,400 plus interest to
Sublessee within forty-five (45) days after this Sublease Agreement is
executed, Sublessee will be fully responsible for and pay for any and all
repairs and replacement to the roofing of the demised premises during the term
of the sublease or any extensions thereof. Interest will be calculated at the
average 6-month certificate of deposit rate at the U.S. National Bank on
$26,400 for the period commencing on the date Sublessor received the $26,400
until the money is transferred to Sublessee.
5.2 If Sublessor does not pay the sum of $26,400 plus interest to
Sublessee within 45 days after this Sublease Agreement is executed, Sublessor
shall remain fully responsible for any and all roof repairs and replacements
for the premises during the sublease term and any extensions thereof.
6. Default. The following shall constitute a default under this
Sublease.
6.1 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;
6.2 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;
6.3 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.
7. Remedies. In the event of any default under this Sublease:
7.1 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 the laws of the State
of Oregon.
7.2 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.
7.3 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.
7.4 Following re-entry or abandonment, Sublessor may:
(a) make any suitable alterations or refurbish 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.
7.5 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 12 per-cent (12%) per annum from the time of such payment until
repaid.
7.6 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.
8. Damages. Whether or not an election is made to terminate 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.
9. 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.
10. 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 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.
11. Covenants, Representations and Warranties.
11.1 Sublessee agrees that as long as this Sublease remains in
effect, should Sublessee ever desire to sell the store operated on the
premises, 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
sixty (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.
11.2 Sublessee agrees that throughout the term of this Sublease
and any extensions or renewals thereof, except as hereinafter provided, to
purchase from Sublessor not less than 25% of its retail sales of all goods and
merchandise required by it for resale on the premises to the extent that
Sublessor shall now or hereafter be able to supply such goods and merchandise
to Sublessee, and Sublessor will supply all of Sublessee's requirements at
such prices and on such terms as are reasonably comparable to those offered by
Sublessor to other purchasers from Sublessor, carrying on businesses similar
to that of the Sublessee in Lane County, Oregon. If, at any time, Sublessee
contends that Sublessor is not able to supply particular goods or merchandise
customarily stocked by retail supermarkets in Lane County, Oregon, or that
terms offered by Sublessor are not reasonably comparable to those offered by
Sublessor to other such purchasers, the Sublessee shall so advise Sublessor in
writing, specifying such contention with particularity. If, within 30 days
after the receipt of such notice, Sublessor 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 Sublessor 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.
11.3 Sublessee represents and warrants that there are no brokers,
finders or other persons entitled to any fee, commission or other compensation
in connection with this Sublease, and agrees to hold Sublessor harmless from
any claims for such fees, commissions and/or compensation.
11.4 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.
11.5 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
respects. 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.
12. 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.
13. 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
Agreement the day and year first above written.
SUBLESSOR: SUBLESSEE:
United Grocers, Inc., Xxxxxx'x Foodliner, Inc.
an Oregon corporation an Oregon corporation
By /s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxx
Asst. Secretary
Xxxxxx Xxxxxxx Xxxxxxx X. Xxxxxx, President
0000 X.X. Xxxx Xxxx 0000 Xxx 00 Xxxxx
P. O. Xxx 00000 Xxxxxx, Xxxxxx 00000
Xxxxxxxx, Xxxxxx 00000
