Exhibit 10.K1
SUBLEASE AGREEMENT
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 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.) 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 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;
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 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 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.
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 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 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, 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.
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.
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 /s/ Xxxxxx X. Xxxxxxx
Title: President
Sublessee: R.A.F. Limited Liability Company
By /s/ [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 /s/ Xxxx X. Xxxxx
Title: President
