Amended and Restated Lease, dated August 3, 2020, between Chalet Properties of Pueblo, LLC and Vitamin Cottage Natural Food Markets, Inc
Exhibit 10.1
AMENDED AND RESTATED LEASE
THIS AMENDED AND RESTATED LEASE (“Lease”) is made effective as of August 3, 2020 (the “Effective Date”) by and between Chalet Properties of Pueblo, LLC, a Colorado limited liability company (“Landlord”) and Vitamin Cottage Natural Food Markets, Inc., a Colorado corporation (“Tenant”).
RECITALS
A. Landlord is the fee owner of that certain real property in Pueblo County in the State of Colorado legally described on Exhibit A attached hereto and incorporated herein by this reference (“Land”);
B. Landlord or its affiliate and Tenant are parties to that certain Lease dated September 1, 2011 (the “Existing Lease”), pursuant to which Tenant leases the Land, together with an existing building (the “Existing Store”) and other improvements thereon; and
C. Landlord and Tenant desire to amend and restate the Existing Lease in its entirety.
NOW, THEREFORE, in consideration of the mutual covenants and promises of the parties, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree that the foregoing recitals are true and correct and incorporated herein by this reference, and further agree as follows:
ARTICLE 1 – DEMISE OF PREMISES
1.1. Premises. Landlord, for and in consideration of the rents, covenants, and conditions herein set forth, does hereby lease to Tenant, and Tenant does hereby lease from Landlord, the Premises (as hereinafter defined). All improvements, structures, fixtures and appurtenances presently located on the Land, or which may be located on the Land from time to time, including any and all new improvements that Tenant shall construct or cause to have constructed thereon including, without limitation, the New Store (as hereinafter defined), together with the Land, shall constitute the “Premises.”
1.2. Quiet Enjoyment. Landlord covenants and agrees that Tenant, upon paying the rent and other charges herein provided and observing and keeping the covenants, conditions, and terms of this Lease on Tenant's part to be kept or performed, shall lawfully and quietly hold, occupy and enjoy the Premises during Term (as hereinafter defined) of this Lease without hindrance of Landlord or any person claiming by or under Landlord.
1.3. Easements. Tenant shall have the right to enter into agreements with utility and telecommunications companies creating easements in favor of such companies as are required in order to service the Premises as it exists from time to time; provided any such easements shall be in commercially reasonable form and may only be granted as non-exclusive easements. Landlord agrees, at Tenant’s cost, to join in the grant of any such utilities easements and to execute any and all documents, agreements, and instruments in order to effectuate the same.
1.4. Covenant Documents. This Lease is subject to, and Tenant agrees to comply with, the covenant documents and other matters set forth in Exhibit C hereof (collectively, the “Covenant Documents”), to the extent that the same apply to the Premises. Tenant further agrees to perform the terms and conditions of the Covenant Documents and pay such operating costs and other charges and expenses under said Covenant Documents as though Tenant were the fee simple owner of the Property, to the full extent that the same apply to the Premises. Landlord shall adopt no rules or regulations concerning the operation or use of the Premises.
ARTICLE 2 - TERM
2.1. Initial Term. The initial term of this Lease (the “Initial Term”) shall commence on the Effective Date and shall terminate at 11:59 p.m. Mountain Time on the last day of the twentieth (20th) Lease Year (as hereinafter defined).
2.2. Options to Extend. Tenant may at its option extend the term of this Lease beyond the Initial Term for four (4) additional periods of five (5) years each on the terms and conditions set forth in this Lease. Each additional five (5) period that is exercised (if at all) by Tenant shall be referred to as an “Extended Term”. The Initial Term, together with each Extended Term, shall be referred to herein as the “Term” and each as so referenced is subject to, and shall be construed to include, early termination as provided herein. The “Expiration Date," as used herein, shall be the last day of the Term. Tenant's right to exercise each such option (“Option to Extend”) is subject to the following conditions precedent:
2.2.1. The Lease shall be in effect at the time notice of exercise of the Option to Extend is provided and on the last day of the then-current Term.
2.2.2. Without limiting Tenant's curing rights hereunder, to the extent applicable, no uncured Tenant Default exists at the time notice of the Option to Extend is provided or during the period from such time notice is given through and including the last day of the then-current Term.
2.3.3. Tenant shall provide written notice to Landlord exercising the Option to Extend not less than six (6) months prior to expiration of the then-current Term.
2.3. Exceptions. Notwithstanding anything in this Article to the contrary:
2.3.1. Should Tenant fail to timely provide written notice of its election to exercise an Extended Term (“Extension Term Election Notice”), Landlord shall notify Tenant in writing that it has missed the deadline for the Extension Term Election Notice and Tenant shall have ten (10) days after receipt of such notice from Landlord to provide Landlord with the Extension Term Election Notice and, if Tenant fails to provide the Extension Term Election Notice to Landlord within such 10-day period, Tenant’s Option to Extend (and any future Options to Extend) will be terminated and Tenant will be deemed to have waived its Option to Extend.
2.3.2. If the Term shall expire during the month of October, November or December of any year, then Tenant may, at its option by notice to Landlord not later than three (3) months prior to the end of the Term, elect to extend the Term until the immediately following January 31st.
2.4. Reversion. At the expiration or termination of this Lease, Tenant shall surrender immediate possession of the Premises in good condition subject to reasonable wear and tear, changes and alterations, damage by fire, casualty and the elements, and other repairs which are Landlord’s obligation, and subject further to Tenant’s right to demolish the Existing Store as more particularly described in this Lease. Any holding over by Tenant shall not operate, except by written agreement, to extend or renew this Lease or to imply or create a new lease, but in case of any such holdover, Tenant’s occupancy shall be treated as a month to month tenancy, any custom or law allowing other remedies or damages or which may be to the contrary notwithstanding. All Trade Fixtures (as defined in Section 10.1), movable furniture and personal effects of Tenant not removed from the Premises upon the vacation or abandonment thereof or upon the termination of this Lease for any cause whatsoever shall conclusively be deemed to have been abandoned and may be appropriated, sold, stored, destroyed or otherwise disposed of by Landlord without notice to Tenant and without obligation to account therefor, and Tenant shall reimburse Landlord for all expenses incurred in connection with the disposition of such property to the extent such proceeds exceed the net proceeds from such disposition.
ARTICLE 3 - RENT
3.1. Fixed Rent. Commencing on the Effective Date, Tenant agrees to pay Landlord fixed rent for the use and occupancy of the Premises as it exists from time to time in the following amounts payable in advance in monthly installments on the first day of each and every month during the Term (“Fixed Rent”):
| Period | Fixed Rent |
| Effective Date – Lease Year 5 | $171,000.00 ($14,250 per month) |
| Lease Year 6 – Lease Year 10 | $177,600.00 ($14,800.00/month) |
| Lease Year 11 – Lease Year 15 | $184,200.00 ($15,350.00 per month) |
| Lease Year 16 – Lease Year 20 | $190,800.00 ($15,900.00 per month) |
| First Extension Term* Lease Year 21 – Lease Year 25 | $197,400.00 ($16,450.00 per month) |
| Second Extension Term* Lease Year 26 – Lease Year 30 | $204,000.00 ($17,000.00 per month) |
| Third Extension Term* Lease Year 31 – Lease Year 35 | $210,600.00 ($17,550.00 per month) |
| Fourth Extension Term* Lease Year 36 – Lease Year 40 | $217,200.00 ($18,100.00 per month) |
| * If exercised by Tenant |
As used herein, the term “Lease Year” shall mean that 12-month period during the Term commencing on the Grand Opening Date or the annual anniversary thereof, as may be applicable; provided, however, that the first Lease Year shall include that period of time from the Grand Opening Date up to the first day of the next full calendar month following the Grand Opening Date and the following 12 months, and any subsequent Lease Year shall be each 12-month period beginning on the anniversary of the first day of the next calendar month following the Grand Opening Date.
3.2. Triple Net Lease; Operating Expenses. This is a triple net lease. It is the agreement of Landlord and Tenant that the Fixed Rent payable hereunder shall be fully net to Landlord and that Tenant shall be responsible for the payment of all expenses of every kind and nature related to the occupancy, operation, maintenance and repair of the Premises during the Term, except any and all expenses incurred in connection with Landlord’s obligations as provided for herein, and excepting those specifically covered by third-party warranties. All such third-party warranties shall be assigned to, delivered to, and inure to the benefit of Tenant. During the Term, Tenant shall pay all Operating Expenses (as hereafter defined) directly to the vendor, provider or supplier thereof and shall pay all Real Estate Taxes (as hereafter defined) directly to the appropriate taxing authority on or before the due date of all such charges. “Operating Expenses” shall mean all operating expenses of any kind or nature which are incurred with respect to the occupancy, operation, maintenance and repair of the Premises, except those repairs specifically covered by third party warranties. Notwithstanding the foregoing, Operating Expenses shall exclude (i) any costs related to Landlord’s overhead, administrative and management costs and expenses including, without limitation, employee salaries, commissions, travel expenses, legal fees, management fees, depreciation and interest, and (ii) any expense which would be considered a “capital expense” under generally accepted accounting principles, except that a capital expense may be included in Operating Expenses, but only if amortized over its useful life using straight-line amortization and only such amortized portion shall be included in Operating Expenses for any given Lease Year). As used in this Lease, “Additional Rent” shall mean any sums due from Tenant under this Lease other than Fixed Rent. “Rent” shall mean collectively Fixed Rent and Additional Rent.
3.3 Real Estate Taxes. Prior to the Effective Date, Landlord shall make a mailing address change on the property tax records so that the tax bill and tax notices for the Premises will be mailed to Tenant at the address provided at Article 24. During the Term, Tenant shall pay directly to the taxing authority on or before the due date, the “Real Estate Taxes affecting the Premises and the improvements thereon as they exist from time to time. Landlord shall promptly, upon receipt, provide the tax bills for the Premises and Premises Improvements to Tenant. “Real Estate Taxes” shall mean, to the extent due and payable during the Term, all real estate taxes and/or assessments, ad valorem taxes, general and special assessments and special benefit taxes. In the case of general or special assessments or special benefit taxes, Tenant may pay the same in installments over the longest period allowed by applicable law, and only those installments (or partial installments) attributable to installment periods (or partial periods) falling within the Term of this Lease shall be included in Real Estate Taxes. Real Estate Taxes shall not include any increases in Real Estate Taxes arising out of the transfer of title to the Premises, income, transfer, sales or excise taxes. Tenant shall have the right to institute tax reduction or other proceedings to challenge Real Estate Taxes or reduce the assessed value of the Premises and improvements thereon, and Landlord shall cooperate with any such contest, appeal or proceeding. Should any Real Estate Taxes relate to or be payable over a period of time which encompasses all or a portion of the Term and either precedes or succeeds the Term, Tenant shall pay a pro rata share thereof based upon the portion of such Taxes due and payable during the Term. Landlord covenants and agrees that if there shall be any refunds or rebates on account of any tax, governmental imposition or levy paid by Tenant under the provisions of this Lease, such refund or rebate shall belong to Tenant. Any such refunds or rebates received by Landlord shall be held in trust for the benefit of Tenant and shall be forthwith paid to Tenant. Landlord shall, on request of Tenant, sign any receipt which may be necessary to secure the payment of any such refund or rebate, and shall pay over to Tenant such refund or rebate as received by Landlord.
3.4. Utility Charges, Service. Tenant shall pay all charges for water, electricity, gas, sewage, waste, trash and garbage disposal, telephone, and all other utility services furnished to the Premises commencing on the Effective Date. Tenant shall promptly pay and discharge, as and when the same become due, all utility and other charges including, without limitation, water, gas, electrical, telephone, and sewer charges, incurred during the Term of this Lease and the operation maintenance, use, occupancy, and upkeep of the Premises.
3.5. Rent Payments. Until further notice by Landlord to Tenant, Fixed Rent checks or any items of Additional Rent due to Landlord shall mailed to the address provided for Landlord at Article 24. Landlord shall, prior to the Effective Date, provide Tenant with a completed IRS Form W-9. Any successor to Landlord shall likewise provide Tenant with such completed IRS Form W-9 as a condition precedent to any rent or other payment from Tenant.
3.6. Security Deposit. No security deposit is required in connection with this Lease.
ARTICLE 4 –USE
Tenant may use or cause the use of the Premises for any legal purpose not in violation of the Covenant Documents including, without limitation, the operation of a natural food grocery store which including: (i) the sale of foods, vitamins and supplements, including the wholesale and retail sale of natural whole and prepared foods, canned goods and groceries, frozen and fresh vegetables, meats and sandwiches, dairy products, products of massage therapists, books and other reading materials, (ii) the operation of a juice bar, delicatessen, coffee bar and/or bakery and kiosks carrying the products of third party vendors, (iii) the sale of products customarily carried by large wholesale and retail natural food stores such as Whole Foods and Vitamin Shoppe, (iv) the offering of therapeutic or “chair” massages, (v) the operation of kiosks in the Premises carrying products typical of those contained in an natural food grocery store by third-party vendors; except that any such kiosk will not violate any restrictions in place at the time that this Lease is executed by all parties, (vi) lectures on various subjects, (vii) the sale of packaged alcohol and alcoholic beverages for off-site consumption and conducting tastings, samplings or similar events incidental to the sale of such alcohol and alcoholic beverages, and/or (viii) a demonstration kitchen, and/or (ix) incidental and related purposes (collectively, the “Permitted Use”). In addition to the foregoing, and subject to Tenant obtaining all necessary governmental and third-party approvals, Tenant shall be permitted to install and operate upon the Premises a horticultural container facility for agricultural, horticultural, educational and retail purposes. All costs associated with the horticultural container facility shall be borne by Tenant. Nothing contained in this Lease shall be construed to obligate Tenant to open for business or to obligate Tenant (or its successors or assigns) to continue to operate its business in the Premises. Subject to the Covenant Documents, Tenant’s hours of operation, if any, shall be determined by Tenant in its sole and absolute discretion.
ARTICLE 5 – EXCLUSIVITY
5.1. Covenant and Agreement. Landlord covenants and agrees that during the Term and any extensions or renewals thereof, no additional property which Landlord, directly or indirectly, may now or hereafter own or control, and which is contiguous to, or which is within five hundred (500) feet of any boundary of, the Premises, will be used by a grocery, nutritional supplements or produce store excluding incidental sales (the “Exclusive Use”). For purposes hereof “contiguous” shall mean property that is either adjoining the Premises or separated from the Premises only by a public or private street, alley or right-of-way.
5.2. Violation. In the event Landlord violates the Exclusive Use as described above and is unable to cure the same and if such failure continues for thirty (30) days after receipt of notice from Tenant (unless such breach cannot be cured in thirty (30) days and Landlord has commenced action to cure the breach and is diligently attempting to cure the breach), then as Tenant’s exclusive remedy for said Exclusive Use violation by Landlord, Fixed Rent shall abate and, in lieu thereof, Tenant will pay one-half (1/2) of Fixed Rent (“Alternative Minimum Rent”) for the period of time during which such violation continues. If any such violation continues for more than eighteen (18) full calendar months after the payment of Alternative Minimum Rent commences (“Correction Deadline”), then Tenant, at its sole discretion, shall have the one-time right to terminate this Lease by giving at least thirty (30) days prior written notice of termination delivered to Landlord within thirty (30) days after the Correction Deadline. If Tenant does not timely exercise the aforesaid right to terminate the Lease, then the Fixed Rent shall automatically revert to full Fixed Rent effective as of the expiration of the Correction Deadline. This notwithstanding, in the event another occupant or tenant leasing space violates the Exclusive Use without Landlord’s permission or consent (a “Rogue Tenant”), Tenant shall deliver written notice of such violation to Landlord and Landlord shall use commercially reasonable efforts to cause such tenant to cease violation of the Exclusive Use, which may include seeking injunctive relief to enjoin or restrain the Rogue Tenant from violating the Exclusive Use and provided Landlord has exercised such efforts to cause such Rogue Tenant to cease violation of the Exclusive Use, Landlord shall not be deemed to be in violation of its obligations under this Lease. In the event that Tenant files suit against any party to enforce the foregoing restrictions, Landlord agrees to cooperate fully with Tenant in the prosecution of any such suit, and reimburse Tenant for all of attorneys’ fees and court costs incurred by Tenant in connection with such suit, notwithstanding its resolution.
5.3. Indemnification. If after the Effective Date of the Lease, the Landlord enters into any agreement the effect of which is to declare as illegal the Exclusive Use, Landlord shall defend (by counsel reasonably satisfactory to Tenant), indemnify and hold Tenant harmless from any damages, loss, or cost (including, without limitation, attorneys’ fees and costs) suffered by Tenant thereby, or from the enforcement of said agreement against Tenant.
ARTICLE 6 – CONSTRUCTION OF NEW STORE; GRAND OPENING DATE;
DEMOLITION OF EXISTING STORE; HAZARDOUS MATERIALS
6.1. Construction of the New Store. Immediately upon the Effective Date, a construction period shall commence and continue for a period of up to two (2) years (the “Construction Period”) during which Tenant, at its sole cost and expense, shall have the right to construct the New Store substantially as depicted on the preliminary site plan attached hereto as Exhibit B (the “Site Plan”), and such landscaping, parking, drives and other improvements as Tenant shall desire, in each case conforming in all respects with local building code requirements, zoning requirements and this Lease. As used herein, the “New Store” means the new building consisting of approximately 13,400 feet to be constructed by Tenant upon the Land during the Construction Period in the area depicted on the Site Plan. Upon completion of the New Store and receipt by Tenant of all necessary governmental permits and approvals, Tenant shall have the right to operate the New Store for the Permitted Use for the remainder of the Term. Tenant shall maintain all portions of the Premises, as it exists from time to time, in a clean and safe manner during the Construction Period, consistent with sound construction practices. Tenant shall, upon Landlord’s request, deliver “As-Built” plans to Landlord for the New Store following completion of same.
6.2. Grand Opening Date. As used in this Lease, the “Grand Opening Date” means the earlier of (i) date upon which Tenant shall open the New Store, fully constructed and fully permitted, for business to the general public, or (ii) the second anniversary of the Effective Date.
6.3 Demolition of the Existing Store. No later than the date which is six (6) months after the Grand Opening Date, Tenant shall demolish or cause to be demolished the Existing Store in a manner consistent sound demolition practices. Promptly following such demolition Tenant shall remove or cause to be removed from the Premises all demolished materials and debris, and shall place the demolished area in a safe and usable condition which may include, without limitation, paving, surfacing, or landscaping of the demolished area and/or other improvements as Tenant may desire, subject to applicable laws, codes and restrictions.
6.4 Hazardous Materials. The parties acknowledge that Tenant is currently in possession of the Premises pursuant to the Existing Lease. Unless otherwise set forth herein, it is the agreement of the parties that Landlord shall be responsible for costs and necessary remediation, if any, resulting from Hazardous Materials (as hereinafter defined) that were present on the Premises prior to the date Tenant first took possession of the Premises, if any, and Tenant shall be responsible for costs and necessary remediation of Hazardous Materials, if any, that first became present on the Premises on or after the date Tenant first took possession of the Premises, if any. In furtherance of the foregoing:
6.4.1. Tenant represents and warrants to Landlord that, to Tenant’s actual knowledge, no leak, spill, release, discharge, emission or disposal of Hazardous Materials has occurred on the Premises on or subsequent to the date Tenant first took possession of the Premises. During the Term, Tenant shall not cause or permit the Premises to become contaminated by any Hazardous Materials being brought upon, kept or used in or about the Premises by Tenant, its agents, employees, or contractors. Notwithstanding the foregoing, Tenant may bring ordinary amounts of Hazardous Materials used in connection with Tenant’s business (such as cleaning solutions) so long as the same is used, stored and disposed of in accordance with applicable law. If the presence of Hazardous Materials on the Premises caused or permitted by Tenant results in contamination of the Premises, or if contamination of the Premises by Hazardous Materials otherwise occurs for which, under applicable law, Tenant is liable to Landlord for damage resulting therefrom, then Tenant shall indemnify, defend and hold Landlord harmless from Environmental Damages (as hereinafter defined) caused by Tenant.
6.4.2. Landlord represents and warrants to Tenant that, to Landlord’s actual knowledge, no leak, spill, release, discharge, emission or disposal of Hazardous Materials occurred on the Premises or shopping center of which the premises is a part prior to the date Tenant first took possession of the Premises. Landlord agrees to indemnify, defend and hold Tenant and its officers, directors, employees, and agents harmless from any Environmental Damages that are attributable to Hazardous Materials that existed at or under the Premises or shopping center of which the Premises is a part prior to the date Tenant first took possession of the Premises.
6.4.3 If conditions suggesting the presence of Hazardous Materials are discovered during construction of the New Store or related improvements, Tenant shall promptly notify Landlord. If the presence of Hazardous Materials is attributable to Tenant, Tenant shall cause the same to be remediated or cleared to the extent required by law and this Lease. If the presence of Hazardous Materials is attributable to Landlord or is determined to have existed at the Premises prior to the date Tenant first took possession of the Premises (whether under the Existing Lease or otherwise), Landlord shall cause the same to be remediated or cleared to the extent required by law and this Lease. If Landlord is required to remediate as hereinabove provided but fails to complete necessary remediation within 180 days after receipt of Tenant’s notice, Tenant shall have the right to terminate this Lease by delivering notice to Landlord.
6.4.4. As used herein, “Hazardous Materials” shall mean any hazardous or toxic chemical, waste, byproduct, pollutant, contaminant, compound, product or substance, including, without limitation, asbestos, polychlorinated biphenyls, petroleum (including crude oil or any fraction or by-product thereof), underground storage tanks, and any material the exposure to, or manufacture, possession, presence, use, generation, storage, transportation, treatment, release, disposal, abatement, cleanup, removal, remediation or handling of which is prohibited, controlled or regulated by any Environmental Law.
6.4.5 As used herein the term “Environmental Damages” means (i) all claims, judgments, damages, penalties, fines, costs, liabilities and losses; and (ii) all sums paid for settlement of claims, and reasonable attorneys,’ consultant’s and experts’ fees.
6.4.6 As used herein, “Environmental Law” shall mean any federal, state, regional, county or local governmental statute, law, regulation, ordinance, order or code or any consent decree, judgment, permit, license, code, covenant, deed restriction, common law, or other requirement presently in effect or hereafter created, issued or adopted, pertaining to protection of the environment, health or safety of persons, natural resources, conservation, wildlife, waste management, and pollution (including, without limitation, regulation of releases and disposals to air, land, water and ground water), including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986,42 U.S.C. 9601 et seq., Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976 and Solid and Hazardous Waste Amendments of 1984,42 U.S.C. 6901 et seq., Federal Water Pollution Control Act, as amended by the Clean Water Act of 1977,33 U.S.C. 1251 et seq., Clean Air Act of 1966, as amended, 42 U.S.C. 7401 et seq., Toxic Substances Control Act of 1976,15 U.S.C. 2601 et seq., Occupational Safety and Health Act of 1970, as amended, 29 U.S.C. 651 et seq., Emergency Planning and Community Right-to-Know Act of 1986,42 U.S.C. 11001 et seq., National Environmental Policy Act of 1975, 42 U.S.C. 300(f) et seq., and all amendments as well as any similar state or local statute or code and replacements of any of the same and rules, regulations, guidance documents and publications promulgated thereunder.
ARTICLE 7 - TITLE AND POSSESSION
7.1. Representation, Warranty and Covenant. Landlord covenants, represents and warrants to Tenant as follows: (i) that Landlord owns, or no later than Delivery shall acquire, fee simple title to the Premises; (ii) that Landlord has the full right, power and authority, without the consent or approval of any other party, to enter into this Lease and perform the obligations on the part of the Landlord to be kept and performed; (iii) that said entire property comprising the Premises is now and shall be as of the date of the recording of a Memorandum of Lease as defined in Section 19.3, free and clear of all liens, encumbrances and restrictions, except for those items set forth on Exhibit C attached hereto and made a part hereof; and (iv) that upon Tenant paying the rents and keeping the agreements of this Lease on its part to be kept and performed, Tenant shall have peaceful uninterrupted possession of the entire Premises during the Term; it being understood, however, that Landlord shall not be responsible for the acts or omissions of any third party which may interfere with Tenant’s use and enjoyment of the Premises unless caused by the negligence or willful misconduct of Landlord or in the event that the Landlord has failed to enforce the Tenant’s rights under Article 5. Prior to the Effective Date, Landlord has delivered to Tenant evidence of Landlord’s title to the Premises. Landlord warrants and represents to Tenant that no encumbrance or restriction imposed upon the Premises, whether or not described in this Section 7.1, shall impair or restrict any right granted to Tenant or derived by Tenant under this Lease.
7.2. Subordination. This Lease is and shall be subject and subordinate to: (i) the Covenant Documents, and to all renewals, additions, modifications, consolidations, replacements and extensions of any of the foregoing; provided, that Landlord shall not agree to any amendment, modification, alteration or cancellation of such documents if the same would materially adversely alter any term, covenant or condition of this Lease which is to the Tenant’s benefit without Tenant’s prior written approval, which will not be unreasonably withheld, conditioned, or delayed; (ii) all mortgages which now or in the future may affect the Premises or any portion thereof; provided, that Tenant’s obligation to subordinate this Lease to any future mortgage is conditioned upon the execution and delivery to Tenant of an agreement, in form and substance reasonably acceptable to Tenant, executed by such mortgagee or trustee, either: (y) making such mortgage, deed of trust or other encumbrance in the nature of a mortgage subject and subordinate to this Lease and to the leasehold estate created hereby and to all of Tenant’s rights hereunder, or (z) obligating such mortgagee or trustee and any successor thereto to be bound by this Lease and by all of Tenant’s rights hereunder (such an agreement, and the agreement referenced in Section 19.2 of this Lease, being an “SNDA”). For each SNDA, Landlord shall pay Tenant an amount equal to Two Hundred Fifty Dollars ($250.00) (the “SNDA Fee”) within thirty (30) days after the SNDA is provided (the “SNDA Fee Deadline”) and, if Landlord fails to pay the SNDA Fee by the SNDA Fee Deadline, then Tenant may offset the SNDA Fee against the next payment becoming due from Tenant to Landlord hereunder or otherwise.
ARTICLE 8 - ENCUMBRANCE OF LEASEHOLD ESTATE
8.1. Tenant's Right to Encumber. Tenant may, at any time, encumber all or any portion of its interest in this Lease and the leasehold estate by deed of trust, mortgage, or other security instrument upon obtaining the prior written consent of Landlord, which consent shall not be unreasonably withheld, and shall be further conditioned upon the agreement of the leasehold mortgagee to simultaneously deliver default notices to Landlord and Tenant. Each such mortgage, deed of trust, or other security instrument acquired by the holder of any leasehold mortgage shall be subject and subordinate to all rights and interests of Landlord herein and shall be a lien only on Tenant's interests in and to this Lease and the leasehold estate created hereby and shall not be a lien on Landlord's fee interest in the Premises or reversionary interest in the improvements. Each leasehold mortgage shall be subject to the terms and provisions of this Lease; and the holder of any leasehold mortgage, or anyone claiming by, through, or under the same, shall not, by virtue thereof, acquire any greater rights hereunder than Tenant has under this Lease. Tenant shall deliver to Landlord copies of all documents recorded to evidence any and all leasehold mortgages and all notices of default received by Tenant from the holder of any leasehold mortgage.
8.2. Tenant's Obligations. Tenant covenants and agrees to pay the indebtedness secured by any leasehold mortgage entered into in compliance with the provisions hereof when the same shall become due and payable and to perform, when such performance is required, all obligations of the mortgagor thereunder. Tenant further agrees not to suffer or permit any default to occur and continue under any leasehold mortgage. Tenant shall cause a true, complete, and correct copy of the original of each leasehold mortgage, together with written notice containing the name and post office address of the holder thereunder, to be delivered to Landlord. Tenant shall, from time to time, when and as requested by Landlord, deliver to Landlord a certificate from the holders of the leasehold mortgages certifying as to the amount of the unpaid principal balance under the leasehold mortgage held by such person, together with accrued interest thereon, and as to the existence or absence of defaults thereunder.
8.3. Rights of Leasehold Mortgagee. A leasehold mortgagee approved hereunder may enforce its rights under its mortgage and acquire title to the Tenant's leasehold estate in any lawful way, and upon foreclosure of such leasehold mortgage and issuance of a certificate of title, take possession of the Premises; subject, however, to the Lease, including, without limitation, the "Use" provisions hereof, all other terms, provisions, and conditions of the Lease, and any leasehold mortgage that is senior in lien to the leasehold mortgage in question. During such time as the leasehold mortgagee or any successor in interest is the owner and holder of the leasehold estate and Tenant's interest hereunder, whether by foreclosure or otherwise, such interests acquired hereunder shall be subject to all of the terms, conditions, and provisions of this Lease.
ARTICLE 9 - MAINTENANCE
Tenant, at Tenant’s sole cost and expense, shall maintain all elements of the Premises as it exists from time to time and make all necessary repairs and replacements, whether interior or exterior, to all parts of the same including but not limited to interior and exterior structural and non-structural components, all signs, and all utility lines including but not limited to sewers, sewer connections, pipes, conduits, ducts and wires leading to and from the Premises, all parking fields and facilities, and all landscaping and snow removal. Further, Tenant shall make all changes and installations, and pay the cost, if any, of all inspections required to comply with the valid requirements of public authorities as they apply to the Premises.
ARTICLE 10 – EQUIPMENT; TRADE FIXTURES; SIGNS
10.1. Installation and Operation. Tenant shall have the right to install mechanical equipment, including satellite dishes or other antennae for telecommunications (the “Equipment”) affixed to the roof or other portions of the Premises. Tenant will ensure that the Equipment will be maintained and operated in accordance with all local and building rules of construction and occupancy codes and shall be responsible for the repair of all damage to the Premises (including but not limited to the roof of the Premises) caused as a result of the installation of the Equipment, and Tenant’s maintenance, use, operation, and removal thereof. The Equipment is and shall remain the property of Tenant or Tenant’s assignee, transferee or sublessee, and Landlord and Tenant agree that the installation thereof at the Premises shall not cause the satellite dishes or other antennae for telecommunications to become a fixture pursuant to this Lease or by operation of law. Tenant shall be responsible for the repair and maintenance of the Equipment during the Term and its removal at the Expiration Date. Tenant may also install pay telephones, automatic teller machines and other electronic consumer service apparatus on the Premises.
10.2. Trade Fixtures; Removal. Tenant shall at all times have the right to remove all fixtures, machinery, equipment, appurtenances and other property furnished or installed by Tenant or by Landlord at Tenant’s expense, including but not limited to any walk-in coolers or freezers, gondolas, wiring used to service any checkout counters, and any similar personal property that may be affixed to the Premises (“Trade Fixtures”), it being expressly understood and agreed that said property shall not become part of the Premises but shall at all times be and remain the personal property of Tenant and shall not be subject to any statutory, equitable, or common law Landlord’s lien. Trade Fixtures will exclude those items which constitute essential building systems (including, but not limited to, as base lighting, electrical, plumbing, mechanical, ceiling, bathroom fixtures or heating, ventilation and air conditioning) and all fire-safety items, flooring, water heaters, interior walls, partitions, and doors, additional utility work (if applicable), grease trap (if applicable), and parapet/facade renovation (if applicable), which such items are or shall become part of the real property.
10.3 Signs. Tenant may install and operate interior and exterior electric and other signs, and in so doing shall comply with all lawful requirements. Landlord shall grant Tenant full use of both sides of any existing monument and pylon signs for the Premises; will assist and cooperate with Tenant in obtaining maximum signage on the New Store, including signage on all four sides of the New Store; and will allow Tenant the ability to construct and use any additional or future monument or pylon signs at Tenant's expense, and cooperate with Tenant to obtain such signage. Subject to compliance with the Covenant Documents and governmental requirements, Tenant shall also have the right to place temporary signs on and about the Premises from time to time, including without limitation banner signs.
ARTICLE 11 – ALTERATIONS
11.1. Tenant’s Right. At any time and from time to time, Tenant, at Tenant’s cost and expense, may make such structural and non-structural alterations and additions to the Premises as Tenant desires, provided that, once the New Store is constructed, any such alteration or addition when completed shall be of such character as not to diminish the structural integrity of the New Store. Any alterations or additions to the Premises shall comply with all state and local building codes, laws and ordinances. No alterations or additions shall unreasonably diminish the utilities and building components that service the Premises and the New Store, once constructed. Landlord shall cooperate at no out of pocket cost to Landlord in securing necessary permits and approvals. Tenant shall not permit any mechanics’ or other liens to stand against the Premises for work or material furnished Tenant.
11.2 Landlord’s Prohibition. Landlord covenants and agrees that Landlord shall not make any alterations or additions to the Premises without Tenant’s written consent including, but not limited to, erecting, constructing, or installing or allowing to be erected, constructed, or installed any subsequent signage, buildings or other improvements (either permanent or temporary in nature) or making any changes to the Premises which would materially obstruct or diminish the general proximity of the parking field to Tenant’s front door, materially diminish signage, visibility of, or the access to the Premises or otherwise materially interfere with the traversing of vehicular and/or pedestrian traffic from nearby public roadways. Landlord shall not permit any mechanics’ or other liens to stand against the Premises for work or material furnished to Landlord.
11.3. Leases for Equipment. Landlord acknowledges and agrees that Tenant’s Trade Fixtures may be leased from an equipment lessor and that Tenant may execute and enter into an equipment lease with respect to such Trade Fixtures. Landlord shall execute and deliver a document commercially reasonably acceptable to Landlord in which Landlord: (i) acknowledges and agrees that the Trade Fixtures constitute the personal property of Tenant, and shall not be considered to be part of the Premises, regardless of whether or by what means they become attached thereto; (ii) agrees that it will not claim any interest in such Trade Fixtures; (iii) agrees that any equipment lessor may enter the Premises for the purpose of exercising any right it may have under the provisions of any equipment lease, including the right to remove such Trade Fixtures, provided that such equipment lessor agrees to repair any damage resulting from such removal; and (iv) any such other provisions as may be common and reasonable. Landlord waives any statutory landlord’s lien and any attachment for Rent on the Trade Fixtures that Landlord may have or may hereafter acquire.
ARTICLE 12 – CASUALTY AND CONDEMNATION
12.1 Casualty. If after the Effective Date, the New Store (once constructed) or Premises shall be damaged or destroyed by fire or other casualty, then Tenant shall repair and restore the same to (i) its condition immediately prior to such damage or destruction (taking into consideration normal wear and tear) or (ii) subject to Landlord’s consent which will not be unreasonably withheld, conditioned, or delayed, to a condition similar in nature to those buildings and premises then being constructed by or on behalf of Tenant at the time of the damage or destruction (so long as such new buildings and premises are of comparable construction, size and standards as the Premises or portion thereof being repaired or replaced), without abatement of rent. Tenant shall not be obligated to restore the Existing Store in the event it is destroyed by casualty prior to its demolition. Subject to the payment of proceeds by Tenant as expressly set forth in Section 12.1.2 below, under no circumstances shall Tenant be liable for any loss or damage including, but not limited to, damage to the Premises resulting from fire or other casualty. Notwithstanding the foregoing, in the event the Premises, or the New Store (once constructed) are damaged to the extent of twenty-five percent (25%) or more thereof, or is destroyed by fire or other casualty, and such casualty occurs after the first day of the final year of the Initial Term or the final year of any Extended Term:
12.1.1. Tenant may cancel this Lease by notice to Landlord.
12.1.2. If Tenant has so canceled this Lease and the fire or other casualty is an insurable casualty under Tenant’s special form coverage insurance, Tenant shall provide Landlord with the proceeds of such insurance in an amount required by Article 13 of this Lease.
12.1.3. Any proceeds payable by Tenant to Landlord under subsection 12.1.2. shall be exclusive of the unamortized cost of improvements made by or on behalf of Tenant to the Premises or Store.
12.2. Condemnation. If all or a portion of the Premises or so much thereof as to materially, adversely impact Tenant’s ability to utilize the Premises for the Permitted Use (as reasonably determined by Tenant in its sole and absolute discretion) shall be taken under power of eminent domain or transferred under threat thereof (“Entire Taking”), then this Lease, at the option of Tenant exercised by giving notice of such election within thirty (30) days after such taking or transfer, whichever is earlier, shall forthwith cease and terminate and the Fixed Rent shall be duly apportioned as of the date of such taking or transfer. No award for the Entire Taking shall be apportioned and Tenant hereby assigns to Landlord any award which may be made as a result of the Entire Taking, together with any and all rights of Tenant now or hereafter arising in or to the same or any part thereof. Notwithstanding the foregoing, Tenant shall be entitled to obtain, directly from the condemning authority, an award for its Trade Fixtures, equipment and personal property, moving or relocation expenses, business dislocation damages and the unamortized cost of leasehold improvements, if any, to the extent Landlord’s award as a result of the Entire Taking is not diminished. In the event of a partial taking under power of eminent domain or partial transfer under threat thereof (“Partial Taking”) which does not result in a termination of this Lease, Fixed Rent shall be reduced in proportion to the reduction in the size of the Premises so taken and this Lease shall be modified accordingly. Promptly after obtaining knowledge thereof, Landlord or Tenant, as the case may be, shall notify the other of any pending or threatened condemnation or taking or transfer affecting the Premises or the Store. Each party shall have the right to seek from the condemning authority so much of an award as may be available so long as the award otherwise payable hereunder to one is not diminished by an award to the other as a result of such taking or transfer.
ARTICLE 13 – INSURANCE
13.1. Construction Period Insurance. Beginning on the Construction Period Commencement Date, and continuing through the Construction Period, Tenant shall carry commercial general liability insurance covering public liability as provided in Section 13.2 and builder’s risk insurance coverage (the “Builder’s Risk Insurance”) as provided in this Section 13.1 naming Landlord as additional insured (the “Construction Period Insurance”). The Builder’s Risk Insurance shall cover the work required to construct the New Store (the “Work”) to the full insurable value thereof. In the event of any change order resulting in the performance of additional Work in connection with the construction of the New Store, the amount of such insurance shall be increased if and to the extent necessary to cover the cost of such additional Work. Builder’s Risk Insurance shall be on an “all-risk” or equivalent policy form and shall include, without limitation, insurance against the perils of fire with extended coverage and physical loss or damage including, without duplication of coverage, theft, vandalism, malicious mischief, collapse, earthquake, flood, windstorm, falsework, testing and start-up, temporary buildings and debris removal including demolition occasioned by enforcement of any applicable legal requirements.
13.2. Insurance During Term. Commencing with the Effective Date and continuing until the Expiration Date, Tenant shall carry special form coverage insurance (embraced by “Causes of Loss-Special Form”) utilizing a form of policy providing coverage at least as broad as ISO policy form CP 10 30), including flood and earthquake coverage, covering the Premises as it exists from time to time and the other improvements on the Premises to the extent of not less than 100% of replacement value, (less foundations), with companies which are authorized to do business in the State in which the Premises is located and are governed by the regulatory authority which establishes maximum rates in the vicinity. Tenant shall also procure commencing with the commencement of construction of the New Store and continuing in effect during the entire Construction Period and Term commercial general liability insurance for personal injury, bodily injury (including wrongful death) and damage to property with a combined single limit of not less than Three Million and No/100 Dollars ($3,000,000.00), per occurrence and annual aggregate, insuring against any and all liability of the insured with respect to the Premises, or arising out of the maintenance, use or occupancy thereof, including premises operations, products and completed operations providing coverage at least as broad as ISO policy form CG 0001. Such amounts shall be increased, not more frequently than once every five (5) years, to levels customary in other comparable natural food stores in the vicinity of the Premises upon the reasonable request of Landlord. Tenant shall also carry a policy or policies of business income/business interruption insurance and extra expense coverage (collectively, “Business Income Insurance”) during the Term with coverage that will reimburse Tenant for all direct and indirect loss of income and changes and costs incurred arising out of all named perils insured against by Tenant's policies of property insurance, including prevention of, or denial of use of or access to, all or part of the Premises as a result of those named perils. The Business Income Insurance coverage must provide coverage for no less than twelve (12) months of the loss of income, charges and costs contemplated under this Lease. The proceeds from Tenant's casualty insurance hereunder shall be paid and applied only as set forth in Article 11 hereof.
13.3. Master Insurance Policy; Deductibles; Claims-Made Insurance. Any insurance carried or required to be carried by Tenant pursuant to this Lease, at Tenant’s option, may be carried pursuant to a master policy of insurance or so-called blanket policy of insurance covering other locations of Tenant or its corporate affiliates, or any combination thereof. Any policies required herein shall not have a deductible in excess of $25,000.00 (provided, however, the deductible with respect to flood and earthquake coverage may be increased to an amount not in excess of $50,000.00). Notwithstanding the foregoing, upon written notice to Landlord, Tenant may request that it increase the deductible to commercially reasonable amounts and Landlord agrees not to unreasonably refuse such request, but, in any case, the deductible shall not exceed the requirements of Landlord’s lender. If Tenant obtains any general liability insurance policy on a claims-made basis, Tenant shall provide continuous liability coverage for claims arising during the entire Term, regardless of when such claims are made, either by obtaining an endorsement providing for an unlimited extended reporting period in the event such policy is canceled or not renewed for any reason whatsoever or by obtaining new coverage with a retroactive date the same as or earlier than the expiration date of the canceled or expired policy.
13.4. Insurer. Except as otherwise approved in writing by the Landlord, all such insurance shall be procured from an insurance company or companies authorized to do business in Colorado, with general policyholder’s ratings of not less than “A-” and a financial rating of not less than “XI” in the most current available Best’s Insurance Reports. All such policies shall name Landlord and Landlord’s lender (if so requested) as an additional insured. All insurance maintained by Tenant shall be primary to any insurance provided by Landlord.
13.5. Certificates; Waiver of Subrogation; Cancellation. Tenant shall provide a certificate or certificates of such insurance to Landlord upon commencement of the Term and at least thirty (30) days prior to any annual renewal date thereof and upon reasonable request from time to time and such certificate or certificates shall disclose that such insurance names Landlord as an additional insured, in addition to the other requirements set forth herein. Landlord and Tenant each agrees to use its commercially reasonable efforts to include in each of its policies insuring against loss, damage or destruction by fire or other casualty a waiver of the insurer’s right of subrogation against the other party, or if such waiver should be unobtainable or unenforceable: (i) an express agreement that such policy shall not be invalidated if the insured waives the right of recovery against any party responsible for a casualty covered by the policy before the casualty; or (ii) any other form of permission for the release of such party. Each such policy which shall so name a party hereto as an additional insured shall contain, if obtainable, agreements by the insurer that the policy will not be canceled without at least thirty (30) days prior notice to both insured and that the act or omission of one insured will not invalidate the policy as to the other insured.
ARTICLE 14 – INDEMNIFICATION
Except for loss, cost and expense caused by fire or other casualty, Landlord and Tenant shall each indemnify, defend and hold harmless the other against and from any and all claims, damages, actions, loss, cost and expense (including but not limited to attorneys fees) resulting directly or indirectly from their own respective acts or omissions or the acts or omissions of their respective employees or agents acting within the scope of their employment or agency (“Related Parties”). Except as set forth above, Landlord shall not be liable for, and Tenant waives all claims for loss or damage to Tenant’s business or loss, theft or damage to Tenant’s property or the property of any person claiming by, through or under Tenant resulting from: (i) wind or weather; or (ii) any act or omission of any party other than Landlord or Landlord Related Parties. Tenant is hereby placed on notice that it should take necessary measures to insure itself against any such losses.
ARTICLE 15 - EXCULPATION
In the event of any transfer, assignment or conveyance of Landlord’s interest in the Lease, Landlord shall be relieved of all covenants and obligations of Landlord hereunder; provided, that such purchaser or successor has assumed all such covenants and obligations of the Landlord hereunder. Tenant acknowledges and agrees that the liability of Landlord under this Lease shall be limited to Landlord’s interest in the Premises and the rents, income and profits thereunder. Each party acknowledges and agrees that the other party shall not be liable for any special, indirect, incidental, consequential, punitive, or exemplary damages (including loss of profits, loss of revenue, or loss of good will) for any claim, whether based on warranty, contract, tort (including negligence), strict liability, or otherwise, even if Landlord or Tenant as the case may be, has been advised of the possibility of such damage. Nothing contained herein shall limit either party’s right to injunctive or other equitable relief.
ARTICLE 16 - DEFAULTS AND REMEDIES
16.1. Default by Tenant. If any Fixed Rent is due and payable and remains unpaid for ten (10) days after receipt of notice from Landlord of such nonpayment, or if Tenant breaches any of the other covenants of this Lease and if such other breach continues for thirty (30) days after receipt of notice from Landlord of such other breach (either of the foregoing, subject to the immediately succeeding sentence, being a “Tenant Default”), Landlord shall then, as its sole legal remedy, but in addition to its remedies in equity, if available, have the right to sue for due and payable Rent, or to terminate this Lease and re-enter the Premises. Notwithstanding the foregoing, (i) a Tenant Default shall not be deemed to have occurred if (x) Tenant shall pay said Rent within said ten (10) days or (y) if the Tenant Default is non-monetary, Tenant in good faith within said thirty (30) days commences to correct such non-monetary breach, and diligently proceeds therewith to correct such breach and (ii) Landlord shall not have the right to terminate this Lease if such nonmonetary breach is not material.
16.2. Default by Landlord. If Landlord shall from time to time fail to pay any sum or sums due to Tenant and if such failure continues for thirty (30) days after receipt of notice from Tenant of such default, then such failure, subject to the immediately succeeding sentence, shall be a “Landlord Payment Default”. Upon the occurrence and continuation of a Landlord Payment Default, Tenant shall have the right and is hereby irrevocably authorized and directed to deduct such sum or sums from Fixed Rent and other sums due Landlord, together with interest thereon at the so-called prime rate charged from time to time by JP Morgan Chase Bank (or its successors and assigns), plus two percent (2%) until fully reimbursed (the “Default Rate”). If Landlord shall from time to time fail to perform any act or acts required of Landlord by this Lease and if such failure continues for thirty (30) days after receipt of notice from Tenant of such failure (such failure, subject to the immediately succeeding sentence, a “Landlord Performance Default”), Tenant shall then have the right, in addition to such remedies as may be available under law or in equity, at Tenant’s option, to perform such act or acts, in such manner as Tenant deems reasonably necessary, and the full amount of the cost and expense so incurred shall immediately be owing by Landlord to Tenant, and Tenant shall have the right and is hereby irrevocably authorized and directed to deduct such amount from Fixed Rent and other sums due Landlord, together with interest thereon at the Default Rate until fully reimbursed by Landlord. Notwithstanding the foregoing, if such failure, despite commercially reasonable efforts to cure it, cannot be cured in thirty (30) days and Landlord shall in good faith within said thirty (30) days commence to correct such failure, and diligently proceed therewith to completion of such correction, then a Landlord Performance Default shall not be deemed to have occurred. If a condition that would constitute a Landlord Performance Default constitutes an imminent threat of harm to Tenant, the Premises or persons upon the Premises, Tenant shall be permitted to take immediate curative action and Landlord shall reimburse Tenant the costs thereof, plus interest at the Default Rate (or if Landlord fails to reimburse Tenant, Tenant shall have a right of setoff for same); provided, Tenant shall notify Landlord of the condition and Tenant’s curative action as promptly as reasonably possible.
16.3. Delay and Consent. No delay on the part of either party in enforcing any of the provisions of this Lease shall be considered as a waiver thereof. Any consent or approval granted by either party under this Lease must be in writing and shall not be deemed to waive or render unnecessary the obtaining of consent or approval with respect to any subsequent act or omission for which consent is required or sought.
16.4. Interest; Late Charges. If Tenant shall fail to pay, when the same is due and payable, any Fixed Rent, or any other charges or amounts due and payable hereunder to Landlord, such amounts shall bear interest at the rate of six percent (6%) per annum from the date after the due date until paid. If Tenant shall fail to pay, when the same is due and payable, any Fixed Rent, or any other charges or amounts hereunder, Tenant shall pay to Landlord a late payment charge in the amount of one hundred twenty-five dollars ($125) to cover Landlord's additional administrative expenses necessitated by Tenant's failure to make timely payment; provided, that the aforesaid late payment charge shall be subject to a six percent (6%) increase at the beginning of the sixth (6th) year of the Term and at the beginning of each Extended Term, if exercised. Landlord need not accept any payments past the due date therefor unless accompanied by the late payment charge. This provision for a late payment charge shall be in addition to all of Landlord's other rights and remedies under this Lease or at law or in equity, and shall not be construed as liquidated damages or as limiting Landlord's remedies in any manner.
16.5. Performance by Landlord. If Tenant shall at any time fail to pay, when the same is due and payable, any Fixed Rent, or any other charges or amounts hereunder, or shall fail to perform or observe any covenant or condition contained in this Lease, the performance of which involves something more than merely the payment of money, then Landlord, after thirty (30) days written notice to Tenant (or upon such shorter notice as may be reasonable in case of an emergency), and without waiving or releasing Tenant from any obligation and without being considered an election of remedies, may perform the same for the account of Tenant and charge Tenant the actual cost of any such performance, as well as interest thereon at the rate of twelve percent (12%) per annum from the date of Landlord’s making of such payment.
ARTICLE 17 - RESERVED
ARTICLE 18 - ASSIGNMENT AND SUBLEASE
18.1. Discontinuance of Operations. At any time and from time to time, Tenant may discontinue the operation of its business (if any) in the Premises, Existing Store, New Store, or any or all of the foregoing without the same being deemed to be a violation of this Lease so long as the Tenant continues to pay its Fixed Rent and any Additional Rent due and continues to comply with all other obligations (monetary or otherwise) hereunder.
18.2. Right to Assign and Sublease. Tenant shall have the right to assign this Lease and to sublet all or any portion of the Premises or New Store (once constructed) or both without Landlord’s consent, but in no event shall Tenant be released from liability hereunder upon any such assignment or subletting; provided, that, in the event Landlord and any assignee modify or amend this Lease without Tenant’s consent so as to increase the obligations of Tenant hereunder, Tenant’s liability hereunder shall not be increased, but instead shall continue as it existed prior to such modification or amendment. Tenant shall be entitled to any and all Rent and other consideration relating to any such subleasing or assignment.
18.3. Agreement by Landlord. In the event of a subletting of all or a portion of the Premises or New Store (once constructed) or both, and upon Tenant's request, Landlord shall promptly furnish and deliver to Tenant, in form and substance reasonably acceptable to Tenant, an agreement executed by Landlord, obligating Landlord to be bound as Landlord by any such sublease and by all of the subtenant's rights thereunder in the event that this Lease is terminated for any reason (“Lease Termination”); provided, that: (i) Landlord's obligations under such sublease shall be no greater than Landlord's obligations under this Lease; (ii) in the event of a Lease termination, such sublease shall automatically terminate if subtenant's obligations under such sublease are less than Tenant's obligations under this Lease (including the payment of the Rent due hereunder); and (iii) in the event of a Lease termination, such sublease shall automatically terminate if the subtenant does not cure any breach of this Lease in accordance with the terms hereof.
18.4. Transfer of Title. In the event that Landlord conveys its interest in the Premises to any other person or entity, Tenant shall have no obligation to pay Fixed Rents under this Lease to any such transferee until Tenant has been so notified and has received satisfactory evidence of such conveyance together with a written direction from such transferee as to the name and address of the new payee of Fixed Rents. It is understood and agreed that Tenant’s withholding of Fixed Rent until its receipt of such satisfactory evidence shall not be deemed a default under this Lease.
18.5. Restrictions on Use. Notwithstanding anything herein to the contrary, in no event may Tenant use or sublease the Premises or assign this Lease, nor may Landlord assign this Lease or lease or sell any premises located within 1,000 feet of the Ground Leased Premises, to any entity or for use as (i) a so-called “head shop” or facility for the sale, rental, distribution or display of drug paraphernalia such as roach clips, bongs, water pipes, coke spoons, cigarette wrapping papers, pipes and/or syringes; (ii) a marijuana dispensary or marijuana club; (iii) a facility for the sale, rental, display or distribution of pornographic, lewd, sexually explicit or so-called adult material or for live performances of so-called adult entertainment; (iv) a dry cleaner; (v) any non-zoned use; or (vi) any illegal use or any use prohibited by any recorded document affecting the Premises then existing.
ARTICLE 19 – ESTOPPEL CERTIFICATES, NON-DISTURBANCE AGEEMENTS
AND MEMORANDUM OF LEASE
19.1. Estoppel Certificate. Each party agrees to execute and deliver to the other party from time to time an estoppel certificate within twenty (20) days after receipt of the other party’s request for such certificate in a form reasonably acceptable to the other party, which certificate may include information as to any prior modification of this Lease, the date of commencement of the Term and the termination date of this Lease, and to the best of Tenant’s or Landlord’s knowledge, whether or not the other party is in default of this Lease (an “Estoppel Certificate”). For each Estoppel Certificate, the party requesting it (the “Estoppel Requestor”) shall pay the party providing it (the “Estoppel Provider”) an amount equal to Fifty Dollars ($50.00) (the “Estoppel Fee”) within thirty (30) days after the Estoppel Certificate is provided (the “Estoppel Fee Deadline”) and, if the Estoppel Requestor fails to pay the Estoppel Fee by the Estoppel Fee Deadline, then the Estoppel Provider may offset the Estoppel Fee against the next payment becoming due from the Estoppel Provider to the Estoppel Requestor hereunder or otherwise.
19.2. Nondisturbance Agreements. Landlord shall obtain standard recognition and non-disturbance agreements from its current and future mortgage holders recognizing this Lease, and agreeing not to terminate it or Tenant's possession of the Premises for so long as Tenant is not in default of the Lease.
19.3 Memorandum of Lease. A Memorandum of Lease suitable for recording describing the Premises and setting forth the names and addresses of Landlord and Tenant, the length of the Initial Term, the length and number of any Extended Terms, Tenant’s Exclusive Use and Tenant’s right first refusal (hereinafter described) (the “Memorandum of Lease”) shall be executed and delivered by Landlord to Tenant upon the request of either party promptly at any time after Delivery. Upon the expiration or earlier termination of this Lease, Tenant if and when requested by Landlord, shall execute a termination agreement or similar instrument nullifying the Memorandum of Lease, which Landlord may record. Tenant shall not record any mortgage or other lien or encumbrance against Landlord's fee simple interest in the Premises, other than the Memorandum of Lease, without Landlord’s written permission.
ARTICLE 20 - RIGHT OF FIRST REFUSAL
In the event Landlord shall receive a bona fide offer to purchase all or any interest in Premises, Landlord agrees to permit Tenant to purchase such interest at the price and pursuant to each and every term contained in the offer so made. Landlord shall provide Tenant prompt written notice of such offer so that Tenant may review such offer for the purposes of electing whether or not to purchase such interest under the terms of such offer. If Tenant agrees to accept such offer, Tenant agrees to send Landlord written notice of such acceptance by certified mail within thirty (30) days of receipt of Landlord’s written notice to Tenant regarding such offer. During such 30-day period, Tenant may, in the alternative, notify Landlord whether such offer has been rejected, in the event Tenant elects not to exercise its option to purchase. If Tenant fails to accept any offer within the applicable time period, then Landlord shall be free to sell such interest to the third party offeror at the price and pursuant to the terms and conditions offered. If the party or terms of the offer change in any manner whatsoever, Landlord shall be required to re-offer such interest to Tenant for reevaluation in accordance with the above. In addition to the foregoing, if Tenant fails to accept an offer on or before thirty (30) days after receipt of notice, and a sale to the third party offeror pursuant to the price and terms of the offer submitted to Tenant does not occur within one hundred eighty (180) days thereafter, the offer must be re-offered to Tenant in accordance with the above. For purposes of this Article 20, a “bona fide offer to purchase” shall also include any and all voluntary or involuntary transfers of such interest.
ARTICLE 21 - BROKERAGE
Landlord and Tenant each represents that it has dealt with no broker or agent with respect to this Lease and each party hereby indemnifies, defends, saves and holds the other harmless against any claims for brokerage commissions or compensation or other claims of any kind (including reasonable attorney’s fees) arising out of the falsity of this representation.
ARTICLE 22 – FORCE MAJEURE
Neither party shall be liable for delays in performance, or inability to perform, arising out of causes beyond its reasonable control and without its fault or negligence including, but not limited to, acts of God or of the public enemy, acts of the government including, without limitation, governmental orders, pandemic, foreign or domestic terrorists, fires, floods, epidemics, strikes, labor disturbances or freight embargos, but excluding, without limitation, delays caused by subcontractors or suppliers and/or financial related performance or ability of either party. Any such delay or inability to perform shall be of no greater scope and/or no longer duration than is reasonable required, and the non-performing party shall use reasonable efforts to remedy such delay or inability to perform.
ARTICLE 23 - RESERVED
ARTICLE 24 - NOTICES
Unless otherwise specifically provided in this Lease or by law, any and all notices or other communications required or permitted by this Lease or by law to be served on, given to, or delivered to any party to this Lease shall be in writing and shall be deemed duly served, given, delivered, and received when personally delivered (including confirmed overnight delivery service to the party to whom it is directed), or in lieu of such personal delivery, when three (3) business days have elapsed following deposit thereof in the United States mail, first-class postage prepaid, certified, return receipt requested, addressed to:
| Tenant: | Kemper Isely Co-President 12612 W. Alameda Parkway Lakewood, CO 80228 |
| Landlord: | Chalet Properties of Pueblo, LLC PO Box 260169 Lakewood, CO 80228 |
Any party may change its address for the purpose of this paragraph by giving written notice of such change to the other party in the manner provided in its paragraph.
ARTICLE 25 - MISCELLANEOUS
25.1. Recitals. The recitals on the first page of this Lease are true and correct and are hereby incorporated into this Lease by this reference.
25.2 Captions. Captions in this Lease are inserted for convenience of reference only and do not define, describe, or limit the scope or the intent of this Lease or any of its terms.
25.3. Conditions and Covenants; Binding Effect; Survival. All of the provisions of this Lease shall be deemed as running with the land, and constructed to be “conditions” as well as “covenants” as though the words specifically expressing or imparting covenants and conditions were used in each separate provision. Subject to any provision of this Lease that may prohibit or curtail assignment of any rights hereunder, this Lease shall bind and inure to the benefit of the respective heirs, assigns, personal representatives, and successors of the parties hereto. All representations, warranties, and indemnities of each party under this Lease shall survive the Expiration Date. Any other provision of this Lease that extends beyond the Term or that is required to ensure that the parties are able to fully exercise their rights and perform their obligations under this Lease shall survive the expiration or termination of this Lease.
25.4. No Waiver of Breach. No failure by either Landlord or Tenant to insist upon the strict performance by the other of any covenant, agreement, term, or condition of this Lease, or to exercise any right or remedy consequent upon a breach thereof, shall constitute a waiver of any such breach or of such covenant, agreement, term, or condition. No waiver of any breach shall affect or alter this Lease, but each and every covenant, condition, agreement, and term of this Lease shall continue in full force and effect with respect to any other then existing or subsequent breach.
25.5. Entire Agreement; Waiver; Amendment. This Lease contains the entire agreement between the parties regarding the subject matter hereof. Any oral or written representations, agreements, understandings, and statements shall be of no force and effect. No modification, waiver, amendment, discharge, or change of this Lease shall be valid unless the same is in writing and signed by the party against which the enforcement of such modification, waiver, amendment, discharge, or change is or may be sought. Each party agrees that it shall, upon the other's request, take any and all commercially reasonable steps, and execute, acknowledge, and deliver to the other party and all further commercially reasonable instruments necessary or expedient to effectuate the purpose of this Lease.
25.6. Governing Law; Waiver of Trial By Jury; Attorney’s Fees. This Lease shall be construed and enforced in accordance with the laws of the State of Colorado, without giving effect to principles of conflicts of law. Landlord and Tenant mutually, expressly, irrevocably, and unconditionally waive trial by jury for any proceedings arising out of or in connection with this Lease, or any conduct or course of dealing of the parties, statements (whether oral or written) or actions of any persons. This waiver is a material inducement to Landlord to accept delivery of this Lease. If either party retains an attorney to enforce or interpret this Lease, the prevailing party shall be entitled to recover, in addition to all other items of recovery permitted by law, reasonable attorneys' fees and costs incurred through litigation, bankruptcy proceedings, and all appeals.
25.7. Severability. If any term, provision, covenant, or condition of this Lease is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remainder of the provisions shall remain in full force and effect and shall in no way be affected, impaired, or invalidated.
25.8. Counterparts. This Lease may be executed in one or more counterparts, each of which shall be deemed an original and when taken together will constitute one instrument. Delivery of an executed signature page of this Lease by facsimile or electronic photocopy (i.e., a “pdf”) will be as effective as delivery of a manually executed counterpart hereof.
25.9. Arm’s-Length Negotiations. All provisions of this Lease have been negotiated by both parties at arm’s length and neither party shall be deemed the scrivener of this Lease. This Lease shall not be construed for or against either party by reason of the authorship or alleged authorship of any provision hereof.
25.10. Time of the Essence. Time is declared to be of the essence of this Lease and each and every provision of this Lease.
25.11. Keys. Tenant shall not be required to deliver keys to Landlord. Tenant will maintain an emergency lock box, Knox Box, or similar secured facility with keys and which may be used by emergency services such as fire and rescue.
SIGNATURE PAGE FOLLOWS
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease effective as of the day and year first above written.
| VITAMIN COTTAGE NATURAL FOOD MARKETS, INC.
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| By: | /s/ Kemper Isely | ||||||
| Name: | Kemper Isely | ||||||
| Title: | Co-President | ||||||
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CHALET PROPERTIES OF PUEBLO, LLC
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| By: | /s/ Zephyr Isely | ||||||
| Name: | Zephyr Isely | ||||||
| Title: | Manager | ||||||
EXHIBIT A
LEGAL DESCRIPTION OF THE PREMISES
That portion of Parcel No. 5 Dill-Hahn Subdivision No 3, a Resubdivision of Lot 1, Block 1 of a Replat of Lot 11 of the Amended Plat of Dill-Hahn CO., Subdivision, County of Pueblo, State of Colorado, particularly described as Parcel B on Boundary Line Rearrangement between Parcels 3, 4 and4 of Dill-Hahn CO Subdivision NO3 as recorded on December21, 1982 in Book 2139 at Page 995, County of Pueblo.
Together with those beneficial easements as set forth and described in Declaration of Restrictions and Grant of Easements recorded April 11, 1983 in Book 2152 at page 795, Instrument No 716065, as amended by that First Amendment to Declaration of Restrictions and Grant of Easements recorded July 23, 2020 as Document Number ###-###-#### in the records of Pueblo County, Colorado.
EXHIBIT B
PRELIMINARY SITE PLAN
EXHIBIT C
COVENANT DOCUMENTS
| 1. | Those instruments listed on Schedule B, Part II of the ALTA Commitment for Title Insurance issued by Stewart Title Guaranty Company, dated September 10, 2019, a copy of which has been provided to Tenant. |
| 2. | That certain First Amendment to Declaration of Restrictions and Grant of Easements recorded July 23, 2020 as Document Number ###-###-#### in the records of Pueblo County, Colorado.
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