Wild Oats Markets Inc. Contracts
Sample Business Contracts
New Mexico-Santa Fe-St. Francis Drive and Cordova Road Lease Agreement - Marianna Partners Ltd. and Wild Oats Market of Santa Fe Inc.
Lease Forms
- Start a state-specific lease for the rental of commercial property. Specify the term and rent due, as well as whether the landlord or tenant is responsible for property taxes, insurance, and maintenance and repairs.
- When a tenant vacates commercial property before the lease term has expired, it may be able to rent the premises to a third party. The tenant would be the sublessor and the third party would be the sublessee. Besides preparing a sublease, both parties will want to review the provisions for assignment or subletting in the original lease agreement between the landlord and the sublessor.
- Tenants of residential property should prepare a sublease agreement if they are seeking to sublease a room or the entire apartment or house to a third party. All parties should review the original lease agreement to see if there are any restrictions on subletting or assigning the premises.
- Triple net leases are a type of commercial leases where the tenant has to pay for property taxes, insurance, utilities, and maintenance, in addition to the monthly rent.
- When renting an office space, tenants should understand the amount of the rent and duration of the lease. Other important terms include whether the space can be subleased, which parties are responsible for maintenance, and whether any furniture and furnishings will be provided.
LEASE AGREEMENT
by and between
MARIANNA PARTNERS LIMITED, LANDLORD
and
WILD OATS MARKET OF SANTA FE, INC., TENANT
<PAGE> 2
TABLE OF CONTENTS
PAGE
ARTICLE I. DEMISE OF PREMISES; QUIET ENJOYMENT . . . . . . . . . . . . . . 1
Section 1.01. Demise of Premises . . . . . . . . . . . . . . . . . 1
Section 1.02. Definitions and Use of Terms . . . . . . . . . . . . 1
Section 1.03. Quiet Enjoyment . . . . . . . . . . . . . . . . . . 1
ARTICLE II. USE; TERM; RENEWAL OPTION;
AND HOLDING OVER . . . . . . . . . . . . . . . . . . . . . 2
Section 2.01. Use . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.02. Term . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.03. Renewal Option . . . . . . . . . . . . . . . . . . . 2
Section 2.04. Holding Over . . . . . . . . . . . . . . . . . . . . 2
ARTICLE III. RENT; SECURITY DEPOSIT . . . . . . . . . . . . . . . . . . . . 3
Section 3.01. Minimum Rent . . . . . . . . . . . . . . . . . . . . 3
Section 3.02. Lease Year . . . . . . . . . . . . . . . . . . . . . 3
Section 3.03. Cost of Living Increase;
CPI Adjustment . . . . . . . . . . . . . . . . . . 3
Section 3.04. Changes in Index . . . . . . . . . . . . . . . . . . 4
Section 3.05. Percentage Rent . . . . . . . . . . . . . . . . . . 4
Section 3.06. Payment . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.07. Security Deposit . . . . . . . . . . . . . . . . . . 7
ARTICLE IV. CONSTRUCTION OF ADDITIONAL IMPROVEMENTS
TO THE EXISTING BUILDING; ACCEPTANCE
OF PREMISES; AND COMMENCEMENT DATE . . . . . . . . . . . . 7
Section 4.01. Landlord's Initial Work . . . . . . . . . . . . . . 7
Section 4.02. Tenant's Work . . . . . . . . . . . . . . . . . . . 8
Section 4.03. Landlord's Additional Work . . . . . . . . . . . . . 8
Section 4.04. Commencement Date . . . . . . . . . . . . . . . . . 9
Section 4.05. Unavoidable Delays . . . . . . . . . . . . . . . . . 9
Section 4.06. Asbestos . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE V. TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE VI. JANITORIAL SERVICES AND UTILITIES . . . . . . . . . . . . . . . 10
Section 6.01. Janitorial Services . . . . . . . . . . . . . . . . 10
Section 6.02. Utilities . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE VII. MAINTENANCE . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE VIII. CASUALTY INSURANCE; LIABILITY INSURANCE;
WAIVER OF CLAIMS AND INDEMNITY; WAIVER OF
SUBROGATION; POLICY REQUIREMENTS; AND
LIFE INSURANCE . . . . . . . . . . . . . . . . . . . . . . 11
Section 8.01. Fire and Extended Casualty . . . . . . . . . . . . . 11
Section 8.02. Liability Insurance . . . . . . . . . . . . . . . . 12
Section 8.03. Waiver of Claims . . . . . . . . . . . . . . . . . . 12
Section 8.04. Indemnity . . . . . . . . . . . . . . . . . . . . . 12
Section 8.05. Waiver of Subrogation . . . . . . . . . . . . . . . 13
Section 8.06. Policy Requirements . . . . . . . . . . . . . . . . 13
Section 8.07. Life Insurance . . . . . . . . . . . . . . . . . . . 13
ARTICLE IX. DESTRUCTION OF IMPROVEMENTS BY FIRE OR
OTHER CASUALTY . . . . . . . . . . . . . . . . . . . . . . 14
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TABLE OF CONTENTS
PAGE
ARTICLE X. ACCEPTANCE OF PREMISES; PROHIBITED USE;
COMPLIANCE WITH LAWS, RULES AND
REGULATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 10.01. Acceptance of Premises . . . . . . . . . . . . . . 14
Section 10.02. Prohibited Use . . . . . . . . . . . . . . . . . . 14
Section 10.03. Compliance with Law . . . . . . . . . . . . . . . . 15
ARTICLE XI. ALTERATIONS; SIGNS . . . . . . . . . . . . . . . . . . . . . . 15
Section 11.01. Alterations and Surrender
of Premises . . . . . . . . . . . . . . . . . . . 15
Section 11.02. Sign . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE XII. ASSIGNMENT AND SUBLETTING . . . . . . . . . . . . . . . . . . 16
ARTICLE XIII. DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 13.01. Events of Default . . . . . . . . . . . . . . . . 16
Section 13.02. Landlord's Remedy . . . . . . . . . . . . . . . . 17
Section 13.03. Landlord's Right to Cure Default . . . . . . . . . 18
Section 13.04. Waiver . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE XIV. EMINENT DOMAIN. . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE XV. RESTRICTIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE XVI. MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . 19
Section 16.01. Time of the Essence . . . . . . . . . . . . . . . . 19
Section 16.02. Binding Effect; Successors and
Assigns . . . . . . . . . . . . . . . . . . . 20
Section 16.03. Notices . . . . . . . . . . . . . . . . . . . . . . 20
Section 16.04. Subordination or Superiority . . . . . . . . . . . 20
Section 16.05. Estoppel Certificates . . . . . . . . . . . . . . . 20
Section 16.06. Landlord Means Owner . . . . . . . . . . . . . . . 21
Section 16.07. Sale of Premises by Landlord . . . . . . . . . . . 21
Section 16.08. Law Governing . . . . . . . . . . . . . . . . . . . 21
Section 16.09. Gender and Number . . . . . . . . . . . . . . . . . 21
Section 16.10. Entire Agreement . . . . . . . . . . . . . . . . . 21
Section 16.11. Captions; Table of-Contents . . . . . . . . . . . . 21
Section 16.12. Severability . . . . . . . . . . . . . . . . . . . 21
Section 16.13. Attorney's Fees . . . . . . . . . . . . . . . . . . 21
Section 16.14. Counterpart Signatures . . . . . . . . . . . . . . 22
Section 16.15. Equipment Presently Located
in the Building . . . . . . . . . . . . . . . . 22
Section 16.16. Financial Statements . . . . . . . . . . . . . . . 22
Section 16.17. Inclusion of Premises in
Additional Development. . . . . . . . . . . . . . 22
Section 16.18. Restrictions Applicable
to Landlord . . . . . . . . . . . . . . . . . . 22
GUARANTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SCHEDULE OF EXHIBITS . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
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LEASE AGREEMENT
This Lease Agreement (hereinafter referred to as the "Lease"), is
executed this 27th day of August, 1990, by and between MARIANNA PARTNERS
LIMITED, a New Mexico limited partnership (hereinafter referred to as the
"Landlord") and WILD OATS MARKET OF SANTA FE, INC., a New Mexico
corporation, (hereinafter referred to as the "Tenant").
W I T N E S S E T H:
In consideration of the mutual covenants and agreements hereinafter
set forth, Landlord and Tenant covenant and agree as follows:
ARTICLE I
DEMISE OF PREMISES; QUIET ENJOYMENT
SECTION 1.01. DEMISE OF PREMISES. Subject to the terms,
conditions, covenants, and undertakings hereinafter set forth, Landlord does
hereby lease to Tenant those certain Premises described as follows (including
the existing Building thereon):
An approximately 14,850 square foot free-standing building located on
that certain parcel of land containing approximately 68,000 square
feet located on the northwest corner of St. Francis Drive and Cordova
Road in the City of Santa Fe, New Mexico, more particularly described
on Exhibit "A" attached hereto and incorporated herein by reference.
The parties acknowledge that 14,850 square feet is an approximation of
the area of the existing building and that Landlord does not guarantee
the area thereof.
SECTION 1.02. DEFINITIONS AND USE OF TERMS.
When used in this Lease:
(a) "Land" means the real property described in section
1.01 above.
(b) "Building" means any and all buildings, structures
and other improvements located on said Land.
(c) "Premises" means collectively the Land and Building
leased herein.
SECTION 1.03. QUIET ENJOYMENT. Landlord covenants and agrees that,
upon Tenant's paying rent and performing all of the covenants and conditions
set forth in the Lease, Tenant's quiet and peaceable enjoyment of the Premises
shall not be disturbed by Landlord or any person claiming by, through or under
Landlord, subject, however, to the terms, conditions and exceptions contained
herein and to all reservations and restrictions of record in the Real Property
Records of the county where the Land is located and all zoning and land-use
regulations of governmental authorities having jurisdiction over the Land.
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ARTICLE II
USE; TERM; RENEWAL OPTION AND HOLDING OVER
SECTION 2.01. USE. Tenant shall use the Premises for the retail
sale and distribution of food, liquor and general merchandise. Tenant shall
keep the Premises reasonably stocked with merchandise, and reasonably staffed
to serve the patrons thereof, comparable to stores doing a similar business.
Tenant is not required to operate its business on Sundays or legal holidays,
nor during any time when such operations must be suspended because of casualty
loss to the Building, strikes, insurrection, or other similar cause.
SECTION 2.02. TERM. The term of this Lease shall be ten and
one-half (10 1/2) years, commencing on the "Commencement Date," as defined in
Section 4.04 hereof. In the event that the Commencement Date is any date other
than the first day of the month, then the term hereof shall extend for ten and
one-half years plus the number of days remaining in the month in which the term
hereof commences.
SECTION 2.03. RENEWAL OPTION. Provided that Tenant is not in
default in respect to any provision of this Lease, Tenant shall have the right
to extend the term of this Lease for one (1) additional period of ten (10)
years from the expiration of the prior term, provided, however, that written
notice is given to Landlord of such intention to extend the Lease six (6)
months prior to the applicable expiration date. Such extension term shall be
upon the same terms, conditions, and rentals except that (i) Tenant shall have
no further right of renewal after exercise of said extension term and (ii) the
Minimum Rent will be equal to whatever Minimum Rent (plus CPI adjustments) is
then applicable under this Lease. It is further understood and agreed by the
parties that Landlord may attempt to acquire additional land adjacent to the
Premises, for the purpose of constructing thereon a shopping center and/or
other commercial buildings. If Landlord has acquired such additional land
adjacent to the Premises at the time that Tenant exercises its option
hereunder, then Landlord shall have the right to require that Tenant rent, on
the same terms, conditions, and rentals contained in this Lease, as adjusted
above, comparable space in the adjacent property in lieu of the Premises.
Provided, however, that Tenant shall have no obligation to accept such
comparable space unless such substitution will have no adverse economic
consequences to Tenant.
SECTION 2.04. HOLDING OVER. Should Tenant hold over after the
termination of this Lease, by lapse of time or otherwise, Tenant shall become a
tenant from month-to-month only upon each and all of the terms herein provided
as may be applicable to such month-to-month tenancy and any such holding over
shall not constitute an extension of this Lease; provided, however, during such
holding over, Tenant shall pay Minimum Rent and Percentage Rent at double the
rate payable per Article III below for the month immediately preceding said
holding over and in addition, Tenant shall pay Landlord all damages,
consequential as well as direct, sustained by reason of Tenant's holding over.
The provisions of this paragraph do not exclude the Landlord's rights of
reentry or any other right contained in this Lease.
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ARTICLE III
RENT; SECURITY DEPOSIT
SECTION 3.01. MINIMUM RENT. During the term hereof, Tenant shall
pay Landlord minimum rent (hereinafter referred to as "Minimum Rent") on or
before the first day of each month during the term hereof as follows:
(a) From the Commencement Date through and including the
18th month (the first "Lease Year") ($111,375 per annum, $9.281.25 per month).
(b) 19th through 30th month (the second "Lease Year")
($118,800 per annum, $9,900 per month).
(c) 31st through 42nd month (3rd "Lease Year") ($126,225
per annum, $10,518.75 per month)
(d) 43rd through 66th month (4th and 5th "Lease Years")
($133,650 per annum, $ll,137.50 per month).
(e) 67th through 126th month (6th "Lease Year" through
10th "Lease Year") ($141,075 per annum, $11,756.25 per month), increased,
however, after the 6th Lease Year for increases in the Consumer Price Index as
specified in Section 3.03 below.
Notwithstanding anything herein to the contrary, Landlord and Tenant
agree in consideration of Tenant's making the leasehold improvements specified
herein, that the Minimum Rent for the first full six (6) months of the term
hereof shall abate completely. In the event that the Commencement Date of this
Lease falls on a day other than the first day of the month, then the Minimum
Rent shall be prorated for the said partial month in which the Commencement
Date occurs, and thereafter Tenant shall be entitled to a complete abatement of
Minimum Rent for the first full six (6) months of the term hereof, provided,
however, that the prorated Minimum Rent for the partial month in which the
Commencement Date falls shall be due and payable at the end of the rent
abatement period.
SECTION 3.02. LEASE YEAR. As used herein the term "Lease Year"
shall mean the eighteen (18) month period beginning on the first day of the
month during which the Commencement Date occurs, and each consecutive twelve
(12) calendar month period thereafter.
SECTION 3.03. COST OF LIVING INCREASE; CPI ADJUSTMENT. At the end
of the 6th Lease Year and every Lease Year thereafter (including any renewal
periods) the Minimum Rent provided for in Section 3.01(e) above shall be
adjusted to reflect any increase in the consumer price index as hereinafter
provided. Each Lease Year following the 6th Lease Year is hereinafter referred
to as the "Adjustment Period". The adjusted Minimum Rent shall be obtained by
multiplying the Minimum Rent provided in Section 3.01(e) above by a fraction,
the numerator of which is the index number for the first month of each
Adjustment Period hereunder in the column for "All Items" (unadjusted) in the
table entitled "Consumer Price Index for All Urban Consumers," (index base:
1982 - 84 = 100) "U.S. City Average" published monthly by the Bureau of Labor
Statistics of the U.S. Department of Labor in the Monthly Labor Review (said
table herein referred to as the "CPI-U"), and the denominator of which is the
CPI-U for the first month of the 6th Lease Year of
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this Lease. The adjusted rental thus obtained shall be the Minimum Rent.
Notwithstanding the foregoing calculation, the yearly percentage adjustment
pursuant to this Section 3.03 shall in no event be more than five percent (5%)
in any year. Tenant shall continue to pay the Minimum Rent in effect for the
expiring Adjustment Period until notified by Landlord of any increase in such
Minimum Rent. On the first day of the calendar month immediately following
receipt of such notification, Tenant shall commence payment of the new Minimum
Rent specified in the notice, and shall also pay to Landlord, with respect to
the month(s) already expired, the excess of the required monthly rentals
specified in the notice over the monthly amounts theretofore actually paid by
Tenant.
SECTION 3.04. CHANGES IN INDEX. If the "CPI-U" is discontinued, the
"Consumer Price Index for Urban Wage Earners and Clerical Workers" ("CPI-W")
for "All Items," unadjusted, (index base: 1982 - 84 = 100), "U.S. City
Average," published monthly in the Monthly Labor Review by the Bureau of Labor
Statistics of the United States Department of Labor shall be used for making
the computation in Section 3.03. If the "CPI-W" is discontinued, comparable
statistics on the purchasing power of the consumer dollar published by the
Bureau of Labor Statistics of the United States Department of Labor shall be
used for making the computation in Section 3.03. If the Bureau of Labor
Statistics shall no longer maintain statistics on the purchasing power of the
consumer dollar, comparable statistics published by a responsible financial
periodical or recognized authority selected by the Landlord and reasonably
acceptable to Tenant shall be used for making the computation in Section 3.03.
If the base year "(1982 - 84 = 100)" or other base year used in computing the
CPI-U (or CPI-W if applicable) is changed, the figures used in making the
adjustment in Section 3.03 shall be changed accordingly, so that all increases
in the "CPI-U" (or CPI-W if applicable) are taken into account notwithstanding
any such change in the base year.
SECTION 3.05. PERCENTAGE RENT.
(a) In addition to the Minimum Rent, Tenant shall pay to
Landlord for each calendar year during the term of this Lease, as percentage
rent ("Percentage Rent"), a sum equivalent to the amount, if any, by which two
percent (2%) of Tenant's Gross Sales (as hereinafter defined), exceeds the
annual Minimum Rent set forth in Section 3.01 hereof, for such calendar year.
In the event that the Minimum Rent is adjusted during the calendar year in
question, then the annual Minimum Rent shall mean the average annual Minimum
Rent payable during such calendar year. On or before the 10th day of each
calendar month during the term of this Lease, Tenant shall pay to Landlord,
after deducting therefrom the Minimum Rent paid for the preceding calendar
month, an amount of money equal to the product of 2% multiplied by the Tenant's
Gross Sales made in or from the Premises during such preceding month. In the
event that the total of the monthly payments for Percentage Rent for any
calendar year is not equal to the annual Percentage Rent computed on the
Tenant's Gross Sales for such entire calendar year, then (a) Tenant shall pay
to Landlord any deficiency promptly upon demand, or (b) Landlord shall credit
Tenant's next payment of Minimum Rent with any excess. If an overpayment
occurs during the last year of the term hereof, Landlord shall refund such
excess to Tenant within 30 days after the termination hereof. In no event shall
the rent to be paid by Tenant and retained by Landlord for any calendar year be
less than the annual Minimum Rent herein specified.
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<PAGE> 8
(b) If this Lease (or operation by Tenant of its business
on the Premises) should commence on a date other than the first day of a
calendar year or terminate on a date other than the last day of a calendar
year, Percentage Rent for such fractional part of the calendar year following
the Commencement Date (or commencement by Tenant of its business on the
Premises) or preceding the termination date, as the case may be, shall be paid
at the specified rate or rates for all sales made during such fractional part
of a calendar year, after deducting from such Percentage Rent all payments of
Minimum Rent for such fractional period, such Percentage Rent to be paid in
monthly installments as provided above with respect to full calendar years.
(c) As used herein, the term "Tenant's Gross Sales" shall
mean the gross proceeds from all sales of merchandise, services and other
receipts whatsoever of all business conducted in or from the Premises, whether
sold for cash or on credit, including, without limitation, redemption of gift
and merchandise certificates, deposits not refunded to purchasers, orders taken
at the Premises although such orders may be filled elsewhere, sales through
vending machines or other devices, and sales by any subtenant, concessionaire
or licensee in the Premises. Tenant's Gross Sales shall not include (i) any
sums collected from customers and paid out for a sales or excise or similar tax
imposed by any duly constituted governmental authority if the amount of such
tax is separately charged to the customer and paid by Tenant directly to or for
the benefit of the governmental authority, (ii) the exchange of merchandise
with other stores of Tenant, if such exchange is made solely for the convenient
operation of the business of Tenant and not for the purpose of consummating a
sale which was made in or from the Premises or if such exchange of merchandise
is not for the purpose of depriving Landlord of the benefit of a sale which
otherwise would be made in or from the Premises, (iii) the amount of returns to
suppliers or manufacturers, (iv) sales of Tenant's furniture, fixtures and
equipment not in the ordinary course of Tenant's business, (v) amounts charged
customers for mailing, delivery, alterations or such other services, (vi)
amounts received from sales of distressed, damaged or obsolescent merchandise
sold in bulk to persons other than retail customers, (vii) amounts charged to
Tenant by credit card companies for processing of credit card charges from the
Premises, (viii) sales of gift certificates unless and until such gift
certificates are actually redeemed on the Premises, (ix) revenue earned by
outside contractors such as health care specialists or cooking instructors that
are invited by Tenant to present instructional courses on the Premises. Tenant
shall be entitled to a credit against Tenant's Gross Sales for any cash or
credit refund made for any returned merchandise accepted by Tenant and
previously included in Tenant's Gross Sales.
(d) On or before the 10th day of each calendar month
during the term of this Lease, Tenant shall send to Landlord at the place
designated by Landlord a statement of Tenant's Gross Sales made during the
preceding calendar month. In addition, within sixty (60) days after the
expiration of each calendar year, Tenant shall prepare and deliver to Landlord
at the place designated by Landlord a statement of Tenant's Gross Sales during
the preceding calendar year (or partial year), certified to be correct by an
independent certified public accountant or by an officer of Tenant. Landlord
agrees to keep such statements strictly confidential and agrees to use such
statements solely for the purpose of verifying Tenant's Gross Sales, and
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<PAGE> 9
will not divulge the same to any other person or entity except (i) in
connection with any sale or financing of the Premises or (ii) if required by
any governmental authority. Tenant shall furnish similar statements for its
licensees, concessionaires and subtenants, if any. All such statements shall be
in such form as Landlord may require. If any such statement discloses an error
in the calculation of the Percentage Rent for any period, appropriate
adjustment of the Percentage Rent shall be made, subject, however, to
Landlord's rights under Section 3.05 (f). Notwithstanding anything herein to
the contrary in the event that, at any time during the term hereof, Tenant
submits to Landlord more than one (1) incorrect statement of Tenant's Gross
Sales, that understates Tenant's Gross Sales for the period in question by more
than two percent (2%), then Landlord shall have the right to require that all
statements of Tenant's Gross Sales submitted thereafter be certified to be
correct by an independent certified public accountant.
(e) Tenant shall keep on the Premises or at some other
location in the city in which the Premises are located, approved in writing by
Landlord, a permanent, accurate set of books and records of all sales of
merchandise and revenue derived from business conducted in or from the
Premises, and all supporting records such as tax reports, banking records, cash
register tapes, sales slips and other sales records. All such books and
records shall be retained and preserved for at least 36 months after the end of
the calendar year to which they relate, and shall be subject to inspection and
audit by Landlord and its agents at all reasonable times.
(f) In the event Landlord is not satisfied with any
monthly statement or certified annual statement of gross sales submitted by
Tenant, Landlord shall have the right to have its auditors make a special
audit of all books and records, wherever located, pertaining to sales made in
or from the Premises during the period in question. If such statements are
found to understate Tenant's Gross Sales by more than two percent (2%) from the
figures submitted by Tenant, Tenant shall pay for the entire cost of such
audit. Tenant shall promptly pay to Landlord any deficiency.
SECTION 3.06. PAYMENT. All rental provided herein shall be paid to
Landlord in monthly installments as specified herein at the address specified
in Article XVI hereof, or such other place. as Landlord shall designate in
writing pursuant to the notice provisions contained in Article XVI hereof,
without deduction or offset, in lawful money of the United States of America.
Tenant shall pay Landlord a late charge of $250 if any payment of rent due
hereunder is not received by Landlord within ten (10) days of the due date. Any
rental or other amount due from Tenant under this Lease not paid within fifteen
(15) days of the date when due shall bear interest from the date due until the
date paid at the lower of (i) the highest lawful rate of interest per annum or
(ii) the prime rate of interest charged by Chemical Bank, plus six percent (6%)
per annum, but the payment of such interest shall not excuse or cure any
default by Tenant under this Lease. The covenants herein to pay rent shall be
independent of any other covenants set forth in this Lease. In the event that
Tenant should default in the payment of all or any portion of any payment of
rent provided for herein and should remain in default for a period of 10 days
after receipt of written notice thereof, all installments of Minimum Rent for
the entire term of this Lease then unpaid shall, at the option of the Landlord,
be accelerated and become immediately due and payable.
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SECTION 3.07. SECURITY DEPOSIT. Concurrently with Tenant's
execution of this Lease, Tenant shall deposit with Landlord the sum of $25,000.
On or before the Commencement Date (as defined in Section 4.04 hereof), Tenant
shall deposit with Landlord the additional sum of $25,000, all of which (the
balance of said amounts being hereinafter referred to as the "Security
Deposit") shall be held by Landlord, as security for performance of Tenant's
covenants and obligations under this Lease, it being expressly understood and
agreed that such deposit is not an advance rental deposit or a measure of
Landlord's damages in case of Tenant's default. Tenant may elect to direct that
such sums be placed in an interest bearing account, or to substitute for such
funds at any time a letter of credit, in form acceptable to Landlord. If
Tenant provides a letter of credit meeting the requirements hereof, then
Landlord shall return the Security Deposit funds, with interest, within three
(3) days of delivery of such letter of credit. Any interest accruing on such
account shall be held by Landlord but shall accrue for the benefit of Tenant.
At Tenant's option, following the calculation of annual Percentage Rent for any
calendar year during the term hereof, any Percentage Rent owing from Tenant to
Landlord under Section 3.05 hereof may be paid as a reduction against the
Security Deposit, or, if already paid, shall entitle Tenant to a reduction of
the Security Deposit equal to the amount of Percentage Rent actually paid
during such calendar year. If Tenant has elected to substitute a letter of
credit, following the annual calculation of Percentage Rent, the stated amount
of the letter of credit may be reduced by the amount of Percentage Rent
actually paid to Landlord during such calendar year. Upon the occurrence of
any default by Tenant, Landlord may, without prejudice to any other available
remedy, use the Security Deposit to make good any rent arrearage or any other
damage, injury, expense or liability caused by such event of default. If Tenant
has not defaulted hereunder, any remaining balance of such Security Deposit
shall be returned by Landlord to Tenant on July 30, 1993.
ARTICLE IV
CONSTRUCTION OF ADDITIONAL IMPROVEMENTS
TO THE EXISTING BUILDING; ACCEPTANCE OF PREMISES;
COMMENCEMENT DATE
Section 4.01. LANDLORD'S INITIAL WORK. Landlord shall proceed to
repair and/or construct the additional improvements upon the Building presently
situated on the Land (the "Landlord's Initial Work") in compliance with the
requirements set forth on Exhibit "B" attached hereto and incorporated herein
by reference, with such minor variations as Landlord may deem advisable and
which are not objected to by Tenant, and tender the Premises to the Tenant.
Landlord shall be responsible for any permits necessary for Landlord's Initial
Work. Landlord shall complete Landlord's Initial Work on or before November 1,
1990. The Premises shall be deemed "ready for occupancy" when Landlord has
substantially completed Landlord's Initial Work and certifies in writing to
Tenant that Landlord has substantially completed Landlord's Initial Work, as
specified in Exhibit If "B". Landlord shall have substantially completed
Landlord's construction obligations under this Lease when such construction
has been completed such that the Premises can be occupied and used for the
purposes stated herein, subject only to minor "punch-list" items that do not
impair Tenant's ability to conduct its business on the Premises. If the
Premises are not ready for occupancy prior to November 1, 1990, Landlord
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shall neither be deemed in default hereunder or otherwise liable in damages to
Tenant, nor shall the term of this Lease be affected, except that if for any
reason the Premises are not ready for occupancy prior to November 1, 1990, then
Landlord shall be liable to Tenant for damages in the amount of $1,000 per day
for each day following November 1, 1990 that the Premises are not ready for
occupancy. Landlord and Tenant acknowledge and agree that it will be difficult
to ascertain the damages incurred by Tenant if the Premises are not ready for
occupancy by November 1, 1990 and that such liquidated damages will fully
compensate Tenant for the injuries suffered. Furthermore, if for any reason the
Premises are not ready for occupancy within 30 days following November 1,
1990, Tenant may at its option cancel and terminate this Lease by written
notice to Landlord delivered within 5 days following the expiration of such
30-day period, in which event neither party shall have any further liabilities
or obligations hereunder, except that Landlord shall return to Tenant any
prepaid rent or Security Deposit.
SECTION 4.02. TENANT'S WORK. When the Premises are deemed ready
for occupancy, Tenant agrees to accept possession thereof and to proceed with
due diligence to perform Tenant's construction obligations (hereinafter
"Tenant's Work") as specified in Exhibit "C" attached hereto and incorporated
herein by reference, all of such work to be performed in compliance with
Exhibit "C", and to install its fixtures, furniture and equipment necessary for
Tenant to conduct on the Premises its business. Notwithstanding any other
provisions of this Lease to the contrary, Landlord agrees to allow Tenant
access to the Premises for the purpose of beginning Tenant's Work prior to the
date the Premises are deemed ready for occupancy, provided that Tenant does not
interfere with Landlord's ability to complete Landlord's construction
obligations hereunder. Tenant shall be responsible for any permits necessary
for Tenant's Work. Tenant agrees that, if requested by Landlord, Tenant will
furnish Landlord with a written statement that Tenant has accepted the Premises
and that Landlord has fully complied with Landlord's covenants and obligations
hereunder. Tenant agrees to furnish Landlord a certificate of occupancy from
applicable local authorities upon commencement of its business at the Premises.
Tenant shall have until the later of February 1, 1991 or 90 days after the
Premises are deemed ready for occupancy in which to complete the Tenant's Work.
In the event that the Tenant fails to complete the Tenant's Work within such
time period, then the Security Deposit shall be forfeited to Landlord, Tenant
shall be in default hereunder, and Landlord may pursue any and all remedies.
Landlord shall pay Tenant $20,000.00 as an allowance for the completion of
Tenant's Work, such amount to be paid by Landlord to Tenant within thirty (30)
days of receipt by Landlord of appropriate invoices showing that Tenant has
paid for such portion of Tenant's Work represented by such invoices.
SECTION 4.03. LANDLORD'S ADDITIONAL WORK. Landlord shall have
until August 1, 1991 to complete the additional improvements consisting of the
exterior facade and roof work ("Landlord's Additional Work") in accordance with
the specifications set forth on Exhibit "D" attached hereto and incorporated
herein by reference; provided, however, that Landlord shall have no obligation
to commence or continue Landlord's Additional Work if Tenant has defaulted
hereunder. In performing Landlord's Additional Work Landlord shall take
reasonable measures to minimize disruption of Tenant's normal
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business operations. In the event that Landlord has not substantially
completed Landlord's Additional Work on or before August 1, 1991, then subject
to Section 4.05 hereof and provided that Tenant has not substantially
interfered with Landlord's ability to complete Landlord's Additional Work,
Landlord shall be liable to Tenant for $300 per day for each day following
August 1, 1991 that Landlord has not substantially completed Landlord's
Additional Work.
SECTION 4.04. COMMENCEMENT DATE. The "Commencement Date" of this
Lease shall be the later of (i) November 1, 1990 or (ii) the date that the
Landlord substantially completes Landlord's Initial Work and the Premises are
deemed ready for occupancy as specified in Section 4.01 above.
SECTION 4.05. UNAVOIDABLE DELAYS. With respect to the construction
obligations of either Landlord or Tenant under this Article IV, any prevention,
delay, nonperformance or stoppage due to any of the following causes shall
excuse nonperformance for a period equal to any such prevention, delay,
nonperformance or stoppage. The causes referred to above are strikes,
lockouts, labor disputes, failure of power, acts of God, acts of public enemies
of the State of New Mexico or of the United States, riots, insurrections, civil
commotions, inability to obtain labor or materials or reasonable substitutes
for either, governmental restrictions or regulations or control, casualties, or
other causes beyond the reasonable control of the party obligated to perform.
SECTION 4.06. ASBESTOS. Tenant acknowledges receipt of that
certain Final Report -- Survey For Asbestos Containing Materials dated October
2, 1989 pertaining to the Premises and prepared by CERL, Inc. Environmental
Consultants (the "Environmental Report"). Landlord agrees to complete
Landlord's initial work so as not to disturb the floor tiles, floor tile
mastics, sheet rock joint compounds and/or pipes located beneath the compressor
room in the central west area of the stockroom, which materials have been
identified as asbestos containing materials in the Environmental Report. The
listed materials are hereinafter referred to as "ACM's." Additionally, Landlord
will paint the stockroom area to prevent inadvertent fiber release should the
sheet rock joint compound therein be subjected to scrapes or collisions.
Tenant agrees to perform Tenant's work in such a manner as not to disturb the
ACM's and agrees to indemnify and hold harmless Landlord from and against any
and all claims, judgments, damages, penalties, fines, costs, liabilities or
losses which arise during or after the term hereof as a result of any breach by
Tenant of its covenants under this Section 4.04 or as a result of any
disturbance to the ACM's during Tenant's occupancy of the Premises caused by
Tenant, its agents, employees, contractors and invitees.
ARTICLE V
TAXES
Tenant shall pay, prior to delinquency, all personal property taxes
and assessments on the furniture, fixtures, equipment and other property of
Tenant at any time situated on or installed in the Premises. Landlord has the
sole right to render the Premises to any appropriate taxing authorities.
Tenant, as additional rent, agrees to pay to Landlord as hereinafter set forth
all valorem taxes (both general and special),
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assessments, or governmental charges (hereinafter "taxes") lawfully levied or
assessed against the Premises including, without limitation, taxes assessed by
the City, County, School Districts, and/or Water Districts in which the Land is
located.
Tenant's obligation hereunder shall be payable as additional rent, as
determined by the following method:
As soon as practicable after the beginning of each calendar
year during the term hereof, Landlord shall furnish Tenant a
written statement estimating the total taxes due for said
calendar year (the "Estimate"). Beginning with the first
month following receipt of said statement, Tenant shall pay
Landlord monthly, as additional rent, one-twelfth (1/12) of
the Estimate. In addition, Tenant shall pay with the rental
payment for the first month following receipt of the Estimate
an amount equal to the number of months elapsed in the
calendar year prior to receipt of the Estimate times
one-twelfth (1/12) of the Estimate, so as to bring said
monthly payments current for the year. As soon as practicable
after the end of each calendar year during the term hereof,
Landlord shall furnish Tenant a written statement showing the
total taxes actually due for the calendar year ended (the
"Actual Taxes"). If the Actual Taxes exceed the Estimate, then
Tenant agrees to pay within ten (10) days of receipt of said
statement, as additional rent, the difference between the
Actual Taxes and the Estimate. If the Estimate exceeds the
Actual Taxes, then Landlord agrees to refund the difference at
the time that such statement is furnished.
Tenant shall have the right to inspect, at Landlord's business office
during regular business hours and upon reasonable notice to Landlord, the tax
bills which Landlord receives from the applicable taxing authorities. Landlord
shall furnish Tenant a copy of such tax bills upon request. The provisions of
this Article V shall apply for any partial calendar year during which this
Lease is effective, subject to a pro rata adjustment based upon the number of
calendar months or portions thereof that Tenant occupied the Premises. Tenant
shall not, however, be obligated to pay ad valorem taxes on the Premises during
the rent abatement period.
ARTICLE VI
JANITORIAL SERVICES AND UTILITIES
SECTION 6.01. JANITORIAL SERVICES. Landlord shall not furnish any
janitorial or cleaning services. Tenant shall at Tenant's expense be responsible
for any such janitorial services.
SECTION 6.02. UTILITIES. Tenant shall: (i) pay all charges
incurred for any utility services used on or from the Premises, including,
without limitation, electricity, water, gas, telephone and any other services;
(ii) pay any maintenance charges for utilities; and (iii) furnish, at Tenant's
expense, all electric light bulbs and tubes. Landlord shall not be liable for
any interruption or failure of utility services to the Premises, and this Lease
shall continue in full force and effect despite such interruptions, unless
caused by Landlord's actionable conduct.
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ARTICLE VII
MAINTENANCE
Landlord shall keep the foundation, the exterior walls (except store
fronts, plate glass windows, doors, door closure devices, window and door
frames, moulding, locks and hardware and painting or other treatment of
interior and exterior walls) and roof (excepting any leaks caused by Tenant,
its contractors, employees, or agents) of the Premises in good repair, except
that Landlord shall not be required to make any repairs occasioned by any act
of negligence of Tenant, its agents, employees, subtenants, licensees and
concessionaires, which repairs shall be made by Tenant. In the event that the
Premises should become in need of repairs required to be made by Landlord
hereunder, Tenant shall give immediate written notice thereof to Landlord and
Landlord shall not be responsible in any way for failure to make any such
repairs until a reasonable time shall have elapsed after delivery of such
written notice. Landlord's obligation hereunder is limited to repairs specified
in this Article VII only, and Landlord shall have no liability for any damages
or injury arising out of any condition or occurrence causing a need for such
repairs. Tenant shall keep the Premises in good, clean condition and shall, at
its sole cost and expense, make all needed repairs and replacements to the
Premises, except for repairs and replacements required to be made by Landlord
under the provisions of Article VII hereof and Article IX including, without
limitation, replacement of cracked or broken glass and any necessary
maintenance and repair of the driveways, sidewalks, surface areas and parking
areas, and shall keep all plumbing units, pipes and connections free from
obstruction and protected against ice and freezing. If any repairs required to
be made by Tenant hereunder are not made within 20 days after written notice
delivered to Tenant by Landlord, Landlord may, at its option, make such repairs
without liability to Tenant for any loss or damage which may result in Tenant's
stock or business by reason of such repairs, and Tenant shall pay to Landlord
immediately upon demand as additional rental hereunder the cost of such repairs
plus 10% of the amount thereof and failure to do so shall constitute a default
hereunder. At the expiration of this Lease, Tenant shall surrender Premises in
good condition, reasonable wear and tear excepted. Notwithstanding anything
herein to the contrary, Landlord warrants that the heating and air conditioning
equipment will be in proper working order as of the Commencement Date. Landlord
shall be responsible for the replacement of all heating and air conditioning
equipment which becomes out of repair during the term hereof provided that the
Tenant has maintained a preventative maintenance contract with a qualified
company covering such equipment throughout the term of this Lease. In the event
Tenant fails to maintain in force the said preventative maintenance contract,
Tenant shall be fully responsible for all replacements of said equipment that
becomes out of repair during the term hereof.
ARTICLE VIII
CASUALTY INSURANCE; LIABILITY INSURANCE;
WAIVER OF CLAIMS AND INDEMNITY; WAIVER OF SUBROGATION;
POLICY REQUIREMENTS; LIFE INSURANCE
SECTION 8.01. FIRE AND EXTENDED CASUALTY. Tenant shall at its
expense insure the Building under all risk property insurance in such amounts
as may be required by Landlord's
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mortgagee, or in such greater amounts as Landlord, in its reasonable
discretion, may deem appropriate. Such insurance shall be for the sole benefit
of Landlord and, if required, Landlord's mortgagee.
SECTION 8.02. LIABILITY INSURANCE. Tenant shall maintain public
liability insurance on the Premises during the term hereof, covering the Tenant
and naming the Landlord as an additional "named" insured with terms and
companies satisfactory to Landlord for limits of not less than $1,000,000 for
bodily injury, including death, and personal injury for any one occurrence,
$500,000 property damage insurance or a combined single limit of $1,000,000.
Tenant's insurance will include contractual liability coverage recognizing this
Lease, products and/or completed operations liability and will provide that
Landlord shall be given a minimum of thirty (30) days written notice by the
insurance company prior to cancellation, termination or change in such
insurance. The required limits of the general liability policy of insurance
required to be provided by Tenant hereunder shall be subject to increase at any
time, and from time to time, after the commencement of this Lease if Landlord
in the exercise of its reasonable judgment shall deem same necessary for its
adequate protection. Within thirty (30) days after demand therefor by Landlord,
Tenant shall furnish Landlord with evidence that such demand for increased
limits has been complied with. In no event, however, shall such excess amounts
exceed those limits carried by prudent operators of similar businesses.
SECTION 8.03. WAIVER OF CLAIMS. Tenant, as a material part of the
consideration to be rendered to Landlord under this Lease, to the extent
permitted by law, hereby waives all claims Tenant or Tenant's successor or
assigns may have against Landlord, its agents, servants or employees for loss,
theft or damage to property and for injuries to persons in, upon or about the
Premises, from any cause whatsoever (except for Landlord's gross negligence),
including, but not limited to, claims for damage resulting from: (a) any damage
done or caused by wind, water or other natural element; (b) injury to persons
or property resulting from fire, explosion, gas, or electricity; (c) any defect
in or failure of plumbing, heating or air conditioning equipment, electric
wiring or installation thereof, gas, water, steam pipes, stairs, porches,
railings or walks; (d) broken glass; (e) the backing up of any sewer pipe or
downspout; (f) the bursting, leaking or running of any tank, tub, washstand,
water closet, wastepipe, drain or any other pipe or tank in, upon, or about
such Premises; (g) the escape of steam or hot water; (h) water, snow or ice
upon the Premises; (i) the falling of any fixture, plaster or stucco; (j)
damage to or loss by theft or otherwise of property of Tenant or others; (k)
acts or omission of persons in the Premises, occupants of nearby properties, or
any other persons; and (l) any act or omission of owners of adjacent or
contiguous property. All property of Tenant kept in the Premises shall be so
kept at Tenant's risk only and Tenant shall save Landlord harmless from claims
arising out of damage to the same, including subrogation claims by Tenant's
insurance carrier.
SECTION 8.04. INDEMNITY. Tenant shall indemnify and save harmless
Landlord from and against any and all liability, liens, claims, demands,
damages, expenses, fees, costs, fines, penalties, suits, proceedings, actions
and causes of action of any and every kind and nature arising or growing out of
or in any way connected with Tenant's use, occupancy, management or control of
the Premises or Tenant's operations, conduct or activities on the Premises.
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SECTION 8.05. WAIVER OF SUBROGATION. Each party hereto waives any
and every claim which arises or may arise in its favor and against the other
party hereto during the term of this Lease or any renewal or extension thereof
for any and all loss of, or damage to, any of its property located within or
upon, or constituting a part of, the Premises leased to Tenant hereunder, which
loss or damage is covered by valid and collectible fire and extended coverage
insurance policies, to the extent that such loss or damage is recoverable under
said insurance policies. Said mutual waivers shall be in addition to, and not
in limitation or derogation of, any other waiver or release contained in this
Lease with respect to any loss of, or damage to, property of the parties
hereto. Inasmuch as the above mutual waivers will preclude the assignment of
any aforesaid claim by way of subrogation (or otherwise) to an insurance
company (or any other person), each party hereto hereby agrees immediately to
give to each insurance company which has issued to it policies of fire and
extended coverage insurance, written notice of the terms of said mutual
waivers, and to have said insurance policies properly endorsed, if necessary,
to prevent the invalidation of said insurance coverages by reason of said
waivers.
SECTION 8.06. POLICY REQUIREMENTS. All policies of insurance
required hereunder shall be written by insurance companies authorized to do
business in the State of New Mexico and shall be written by companies approved
by Landlord, such approval not to be unreasonably withheld. Certificates of
insurance shall be delivered to Landlord upon request by Landlord. Each such
certificate shall contain a statement of the coverage provided by the policy, a
statement of the period during which the policy is in effect, a statement that
the annual premium or the annual deposit premium for such policy has been paid
in advance, and an agreement by the insurance company issuing such policy that
the policy will not be canceled or reduced in any amount for any reason
whatsoever without at least thirty (30) days prior written notice to Landlord.
In the event that Tenant fails or refuses to promptly provide Landlord with a
certificate of insurance evidencing any coverage required to be maintained by
Tenant hereunder, then Landlord may obtain any such coverage on behalf of
Tenant, and Tenant shall be liable to Landlord for any costs incurred by
Landlord in obtaining such coverage.
SECTION 8.07. LIFE INSURANCE. Tenant agrees that it will deliver
on or before the date that Tenant takes possession of the Premises a life
insurance policy on the lives of the Guarantors, such life insurance policy to
be in a total face amount equal to or greater than the aggregate Minimum Rent
obligations of the Tenant under this Lease during the unexpired term of the
Lease. Such life insurance policy (the "Life Insurance Policy") shall be a
"second to die" policy, providing for the payment of the death benefits
thereunder upon the death of the second of the two insureds named thereunder.
The Life Insurance Policy shall be collaterally assigned by the Guarantors to
secure the performance of all obligations of the Tenant under the Lease and the
Guarantors under their guaranty. Tenant and Guarantors shall have the right to
reduce the face amount of the Life Insurance Policy periodically, provided that
the total face amount thereof at all times equals or exceeds the total Minimum
Rent obligation of the Tenant hereunder during the unexpired term of the Lease.
The Life Insurance Policy shall be collaterally assigned to Landlord by way of
an assignment in the form of Exhibit "F" attached hereto and incorporated
herein by reference.
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ARTICLE IX
DESTRUCTION OF IMPROVEMENTS BY FIRE OR OTHER CASUALTY
If the Premises should be damaged or destroyed by fire, tornado or
other casualty, Tenant shall give immediate written notice thereof to Landlord.
Following the receipt of such notice, Landlord shall, at Landlord's expense,
proceed with reasonable diligence to rebuild and repair the Premises to
substantially the condition in which they existed prior to such damage, except
that Landlord shall not be required to rebuild, repair or replace any leasehold
improvements which may have been placed on the Premises by Tenant. If the
Premises are untenantable in whole or in part following such damage, the rent
payable hereunder during the period in which they are untenantable shall be
reduced to such extent as shall be fair and reasonable under all of the
circumstances. If Landlord's rebuilding and repair cannot or will not be
completed within one hundred eighty (180) days of the occurrence giving rise to
such damage, then either Landlord or Tenant may elect to terminate the Lease
effective upon the date of such occurrence by giving written notice of such
election to the other party within thirty (30) days of the date of such
occurrence, in which event neither party shall have any further rights or
obligations hereunder following such termination, except, however, with respect
to any claims accruing or arising hereunder prior to the effective date of such
termination.
ARTICLE X
ACCEPTANCE OF PREMISES; PROHIBITED USE;
COMPLIANCE WITH LAWS, RULES AND REGULATIONS
SECTION 10.01. ACCEPTANCE OF PREMISES. Tenant acknowledges, by
taking possession of the Premises and opening its business to the public, that
it has fully inspected the Premises and Tenant accepts the Premises as suitable
for the purposes for which same are leased in their present condition, subject
only to completion by Landlord of Landlord's Additional Work. Except as
specifically provided in Article IV hereof, no promise of Landlord to alter,
remodel, decorate, clean or improve the Premises and no representation or
warranty, expressed or implied, respecting the condition of the Premises has
been made by Landlord to Tenant, unless same is contained herein, or made a
part hereof.
SECTION 10.02. PROHIBITED USE. Tenant shall not use, or permit the
Premises or any part thereof to be used, for any purpose or purposes other than
as specified in Section 2.01 of this Lease. No use shall be made or permitted to
be made of the Premises, nor acts done, which will increase the existing rate of
insurance upon the Premises, or cause a cancellation of any insurance policy
covering the Premises, or any part thereof, nor shall Tenant sell, or permit to
be kept, used, or sold in or about the Premises, any article which may be
prohibited by any insurance policies. Tenant shall not commit, or suffer to be
committed, any waste upon the Premises, or any public or private nuisance, nor,
without limiting the generality of the foregoing, shall Tenant allow the
Premises to be used for any improper, immoral, unlawful or objectionable
purpose. Tenant warrants that at all times during the term hereof Tenant will
conduct its operations on the Premises in compliance with all applicable
environmental laws, rules, regulations and ordinances and that at the time that
Tenant relinquishes possession, the Premises will be in compliance with all
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applicable environmental laws, rules, regulations and ordinances. Tenant's
operations on the Premises shall hot involve the unlawful generation, disposal
or storage of hazardous waste or hazardous substances, and the Premises shall
not be used for any such purposes. Immediately upon receipt, Tenant agrees to
send Landlord copies of any notice(s) received by Tenant of any pending or
threatened environmental regulatory action, and to notify Landlord in writing
immediately upon becoming aware of the release or discharge of any hazardous
waste or hazardous substance on the Premises. Tenant agrees to take, at its
sole cost and expense, any and all necessary action to rectify the condition
caused by such release or discharge to the satisfaction of all applicable
environmental regulatory agencies.
SECTION 10.03. COMPLIANCE WITH LAW. Tenant shall not use the
Premises or permit anything to be done in or about the Premises which will in
any way conflict with any law, statute, ordinance or governmental rule or
regulation now in force or which may hereafter be enacted or promulgated.
Tenant shall at its sole cost and expense promptly comply with all laws,
statutes, ordinances and governmental rules, regulations or requirements now in
force or which may hereafter be in force and with the requirements of any board
of fire underwriters or other similar body now or hereafter constituted
relating to or affecting the condition, use or occupancy of the Premises,
excluding structural changes or other capital improvements not related to or
affected by Tenant's improvements or acts.
ARTICLE XI
ALTERATIONS; SIGNS
SECTION 11.01. ALTERATIONS AND SURRENDER OF PREMISES. Tenant shall
not make any major alterations in or additions, (including construction of
additional Buildings on the Land) changes or repairs to the Premises without
Landlord's prior written consent, which consent shall not be unreasonably
withheld. Landlord has approved Tenant's Work, as reflected on Exhibit "C".
Additionally, Tenant may make nonstructural alterations to the interior of the
Premises not exceeding $5,000 in cost without Landlord's prior written consent.
Tenant may, at its expense, when surrendering the Premises, remove from the
Premises all alterations, improvements and changes installed after the date of
execution hereof in the Premises by Tenant on the condition that no structural
components shall be removed, and all damage resulting from removal of any
additions shall be repaired by Tenant. If Tenant does not remove said
additions, decorations, fixtures, hardware, nontrade fixtures and improvements
after request to do so by Landlord, Landlord may remove the same and Tenant
shall pay the cost of such removal to Landlord upon demand. Tenant hereby
agrees to hold Landlord, its agents and employees harmless from any and all
liabilities of every kind and description which may arise out of or be
connected in any way with said alterations or additions. Any mechanic's lien
filed against the Premises for work claimed to have been furnished to Tenant
shall be discharged of record by Tenant within ten (10) days after the filing
thereof, at Tenant's expense or, alternatively, Tenant may elect to provide
Landlord with an acceptable bond from a surety company reasonably acceptable
to Landlord in the amount of one and one-half times the amount of the lien. All
alterations and additions shall comply with all insurance requirements and with
all applicable laws, statutes, ordinances and regulations. All alterations and
additions shall be constructed in a good and workmanlike manner and only good
grades
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of materials shall be used. Tenant shall, at the termination of the Lease,
surrender the Premises to Landlord in as good condition and repair as
reasonable and proper use thereof will permit, loss by ordinary wear and tear
excepted.
SECTION 11.02. SIGN. No exterior sign, symbol or identifying mark
other than as reflected on Exhibit "C" shall be put upon the Premises, without
prior written approval of Landlord which approval shall not be unreasonably
withheld. All signs or lettering shall be tastefully and professionally done.
Landlord shall pay to Tenant $5,000 to reimburse Tenant for the cost of
Tenant's signage, such sum to be credited against the broker's commission
payable by Landlord to Phase One Realty, Inc.
ARTICLE XII
ASSIGNMENT AND SUBLETTING
Tenant shall not assign this Lease, or any interest therein, and shall
not sublet the Premises or any part thereof, or any right or privilege
appurtenant thereto, or suffer any other person to occupy or use the Premises,
or any portion thereof, without the written consent of Landlord first had and
obtained, such consent not to be unreasonably withheld. Landlord agrees to
promptly consider any requests from Tenant to assign this Lease or sublet the
Premises. Landlord may, as conditions to the giving of such consent, require
that: (i) at the time thereof Tenant is not in default under this Lease, (ii)
Landlord, in its sole discretion reasonably exercised, determines that the
reputation, business, proposed use of the Premises and financial responsibility
of and by the proposed assignee, subtenant or occupant, as the case may be, of
the Premises are satisfactory to Landlord, (iii) any assignee shall expressly
assume all the obligations of this Lease on Tenant's part to be performed, (iv)
such consent if given shall not, unless agreed to in writing by Landlord,
release Tenant or any Guarantor of any of its obligations (including, without
limitation, its obligation to pay rent) under this Lease, (v) Tenant agrees
specifically to pay over to Landlord, as additional rent, all sums received by
Tenant under the terms and conditions of such assignment or sublease, which are
in excess of the amounts otherwise required to be paid pursuant to this Lease
and (vi) a consent to one assignment, subletting, occupation or use by any
other person shall not be deemed to be a consent to any subsequent assignment,
subletting, occupation or use by another person. Any such assignment or
subletting without such consent shall be void and shall, at the option of
Landlord, constitute a default under this Lease. Neither this Lease nor any
interest therein shall be assignable as to the interest of Tenant by operation
of law without the written consent of Landlord. Any transfer of stock in Tenant
or the corporate Guarantors (Wild Oats Market, Inc. or Wild Oats Market of
Denver, Inc.) which results in Elizabeth Cook or Michael Gilliland not owning
in the aggregate at least fifty-one percent (51%) of the voting stock of either
Tenant or the corporate Guarantor shall be considered an assignment of this
Lease.
ARTICLE XIII
DEFAULT
SECTION 13.01. EVENTS OF DEFAULT. The following shall be considered
for all purposes to be events of default under and a breach of this Lease: (a)
any failure of Tenant to pay any
- 16 -
<PAGE> 20
rent or other amount within ten (10) days of the date when due hereunder
(provided, however, that Landlord agrees to give Tenant notice of any rent
default and ten (10) days from the giving of such notice to cure such rent
default no more than once during any eighteen (18) month period during the term
hereof); (b) any failure by Tenant to perform or observe any other of the
terms, provisions, conditions and covenants of this Lease for more than twenty
(20) days after written notice of such failure; (c) Landlord determining that
Tenant has knowingly or intentionally submitted any false report required to be
furnished under Section 3.05 hereunder; (d) Tenant or any Guarantor shall
become bankrupt or insolvent, or file or have filed against it a petition in
bankruptcy or for reorganization or arrangement or for the appointment of a
receiver or trustee of all or a portion of Tenant's property, or Tenant or any
Guarantor makes an assignment for the benefit of creditors; (e) if Tenant
abandons, vacates or does not do business in the Premises for ten (10) days
(excluding, however, any remodeling done with Landlord's approval); (f) this
Lease, Tenant's interest herein or in the Premises, any improvements thereon,
or any property of Tenant is executed upon or attached; (g) the Premises come
into the hands of any person other than expressly permitted under this Lease;
or (h) Tenant shall do or permit to be done anything which creates a lien upon
the Premises which is not released within sixty (60) days.
SECTION 13.02. LANDLORD'S REMEDIES. Upon the occurrence of any
event of default specified in this Lease, Landlord, without grace period,
demand or notice (except as specified in Section 13.01 above), and in addition
to all other rights or remedies Landlord may have for such default, shall have
the right to pursue any one or more of the following remedies:
(a) Terminate this Lease in which event Tenant shall
immediately surrender the Premises to Landlord, and if Tenant fails to do so,
Landlord may, without prejudice to any other remedy which it may have for
possession or arrearages in rent, enter upon and take possession of the
Premises and expel or remove Tenant and any other person who may be occupying
said Premises or any part thereof; and Tenant agrees to pay to Landlord on
demand the amount of all loss and damage which Landlord may suffer by reason of
such termination, whether through inability to relet the Premises on
satisfactory terms or otherwise, including the loss of rental for the remainder
of the Lease term;
(b) Without terminating this Lease, enter upon and take
possession of the Premises, and expel or remove Tenant and any other person who
may be occupying said Premises, or any part thereof. Landlord may make such
alterations and repairs as it deems advisable to relet the Premises, and relet
the Premises or any part thereof for such term or terms (which may extend
beyond the term of this Lease) and at such rentals and upon such other terms
and conditions as Landlord in its sole discretion deems advisable; upon each
such reletting all rentals received by Landlord therefrom shall be applied
first, to any indebtedness other than rent due hereunder from Tenant to
Landlord; second, to pay any and all reasonable costs and expenses of
reletting, including brokers, and attorneys' fees and costs of alterations and
repairs; third, to rent due hereunder; and fourth, the residue, if any, shall
be held by Landlord and applied in payment of future rent as it becomes due
hereunder. If rentals received from such reletting during any month are less
than that to be paid during that month by Tenant hereunder, Tenant shall
immediately pay any such deficiency to Landlord.
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<PAGE> 21
No re-entry or taking possession of the Premises by Landlord shall be
construed as an election to terminate this Lease unless a written notice of
such termination is given by Landlord to Tenant. Notwithstanding any such
reletting or re-entry or taking possession, without termination, Landlord may
at any time thereafter terminate this Lease for any prior breach or default.
Pursuit of any of the foregoing remedies shall not preclude pursuit of any of
the other remedies herein provided or any other remedies provided by law, nor
shall pursuit of any remedy herein provided constitute a forfeiture or waiver
of any rent due to Landlord hereunder or of any damages accruing to Landlord.
If Landlord terminates this Lease for any breach or default by Tenant, in
addition to all other remedies provided by law to which Landlord may be
entitled, Landlord may recover from Tenant all damages incurred by reason of
such breach or default, including, without limitation, all costs of retaking
the Premises and the total rent and charges reserved in this Lease for the
remainder of the term of this Lease all of which shall be immediately due and
payable by Tenant to Landlord. It is agreed by the parties that the actual
damages which will be sustained by Landlord by reason of Tenant's failure to
pay when due monthly payments are uncertain and difficult to ascertain, and it
is further agreed that the sum of all accelerated and unpaid monthly payments,
less the then reasonable reletting value of the Premises, would be reasonable
and just compensation for such failure and tenant hereby promises to pay and
Landlord hereby agrees to accept such sums as liquidated damages and not as a
penalty in the event of such breach.
SECTION 13.03. LANDLORD'S RIGHT TO CURE DEFAULT. If Tenant shall be in
default hereunder, Landlord shall have the right to make any payment or perform
any act required of Tenant under any provision of this Lease, and in exercising
such right, to incur necessary or incidental costs and expenses, including
reasonable attorney's fees. All payments made and all costs and expenses
incurred by Landlord in connection with any exercise of such right, together
with interest thereon at the lower of (i) the highest lawful rate per annum or
(ii) the prime rate of interest charged by Chemical Bank, plus six percent (6%)
per annum from the respective dates of making such payments or the incurring of
such costs and expenses, shall be reimbursed by Tenant immediately upon demand.
Notwithstanding the foregoing, nothing herein shall imply any obligation on the
part of Landlord to make any payment or perform any act required of Tenant.
SECTION 13.04. WAIVER. No waiver of any default shall constitute a
waiver of any other breach or default, whether of the same or any other
covenant or condition. No waiver, benefit, privilege or service voluntarily
given or performed by either party shall give the other any contractual right
by custom, estoppel or otherwise. The subsequent acceptance of rent pursuant to
this Lease shall not constitute a waiver of any preceding default by Tenant,
regardless of Landlord's knowledge of the preceding breach at the time of
accepting the rent, nor shall acceptance of rent or other payment after
termination constitute a reinstatement, extension or renewal of the Lease or
revocation of any notice or other act by Landlord.
ARTICLE XIV
EMINENT DOMAIN
If the entire Premises shall be lawfully taken or condemned (or
conveyed under threat of such taking or condemnation) for any public or
quasi-public use or purpose, the term of this
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<PAGE> 22
Lease shall end upon, and not before, the date of the taking of possession by
the condemning authority. Current rent shall be apportioned as of the date of
such termination. If any part of the Premises not constituting the entire
Premises shall be taken or condemned or conveyed under threat of such taking or
condemnation and such taking substantially impairs the use of the Premises for
the purpose and in the manner as existed immediately prior to such taking, then
either Landlord or Tenant shall have the right to cancel this Lease, such
cancellation to take place not later than the date of the taking of possession
by the condemning authority. No money or other consideration shall be payable
by either party to the other for the right of cancellation but rent shall be
apportioned through the date of such taking. Landlord and Tenant shall each be
entitled to receive and retain such separate awards and portions of lump sum
awards as may be allocated to their respective interests in any condemnation
proceeding. Termination of this Lease shall not affect the rights of the
respective parties to such awards.
ARTICLE XV
RESTRICTIVE COVENANTS
During the term of this Lease, neither Tenant nor any "affiliate" of
Tenant, as such term is hereinafter defined, shall directly or indirectly
engage in any business which is similar or which competes with the business of
Tenant authorized under Section 2.01 of this Lease, within a radius of ten (10)
miles from the outside boundary of the Premises. As used herein, the term
"affiliate" shall mean (i) any person or entity which, either alone or acting in
concert with one or more other persons or entities, has the power to vote ten
(10) percent or more of the voting shares of the Tenant and (ii) any entity of
which the Tenant owns more than ten (10) percent of the voting stock or holds
more than a ten (10) percent ownership interest.
Notwithstanding the foregoing, Landlord's sole remedy in the event of
a violation by Tenant of its covenants in this Article XV shall be to collect
from Tenant additional rent, which additional rent Tenant hereby agrees to pay
to Landlord as follows:
(a) In the event that such competing business is a "new
store", i.e., a store which has not been previously operated as a natural
grocery store within ten miles of the Premises, then Tenant shall pay to
Landlord two percent (2%) of all gross sales over $3,000,000 from all such new
stores located within said ten mile radius of the Premises.
(b) In the event that such competing store is not a "new
store" and Tenant purchases an existing business which has been previously
operated as a natural grocery store, then Tenant shall pay to Landlord as
additional rent two percent (2%) of gross sales over $6,000,000 from all such
other store it owns and operates within said ten mile radius of the Premises.
ARTICLE XVI
MISCELLANEOUS PROVISIONS
SECTION 16.01. TIME OF THE ESSENCE. Time is and shall be deemed of the
essence in respect to the performance of each provision of this Lease.
- 19 -
<PAGE> 23
SECTION 16.02. BINDING EFFECT; SUCCESSORS AND ASSIGNS. All of the
terms, provisions, covenants and conditions of this Lease shall inure to the
benefit of and be binding upon the undersigned parties, their successors,
assigns, legal representatives, heirs, executors and administrators.
SECTION 16.03. NOTICES. All notices provided to be given under this
Lease shall be given by certified or registered mail, return receipt requested,
postage fully prepaid, addressed to the proper party, at the following
address:
LANDLORD: Marianna Partners Limited
600 Sunland Park Drive, Suite 5-600
El Paso, Texas 79912
ATTN: Barry Kobren
TENANT: Wild Oats Market of Santa Fe, Inc.
942 Ninth Street
Boulder, Colorado 80302
ATTN: Elizabeth Cook
The address of either party hereinabove set forth may be changed from
time to time by giving written notice to that effect.
Any notice deposited as above provided shall be conclusively deemed to
have been given for purposes of this Lease on the date reflected on the return
receipt.
SECTION 16.04. SUBORDINATION OR SUPERIORITY. Tenant accepts this
Lease subject and subordinate to any mortgage, deed of trust, or other lien
presently existing on the Premises and to any renewals and extensions thereof
and to any other liens, encumbrances, restrictions, covenants or conditions of
record in the real property records of the county in which the Land is located;
but Tenant agrees that any such mortgagee shall have the right at any time to
subordinate such mortgage, deed of trust, or other lien to this Lease. Landlord
is hereby irrevocably vested with full power and authority to subordinate this
Lease to any mortgage, deed of trust, or other lien hereafter placed on the
Premises and Tenant agrees on demand to execute such further instruments
subordinating this Lease as Landlord may request, provided such subordination
shall be on the express condition that this Lease shall be recognized by the
mortgagee, and that the rights of Tenant shall remain in full force and effect
during the term of this Lease so long as Tenant shall continue to perform all of
the covenants and conditions of this Lease. Tenant agrees to attorn to any
mortgagee or other party who acquires the Landlord's interest in the Premises
and this Lease. Landlord agrees to execute any instruments subordinating any
Landlord's lien on the personal property of Tenant located on the Premises if
required by any financial institution(s) providing financing to Tenant.
SECTION 16.05. ESTOPPEL CERTIFICATES. Tenant shall at any time and
from time to time upon not less than fifteen (15) days prior written request
from Landlord execute, acknowledge, and deliver to Landlord, a written
statement certifying (if true) that Tenant has accepted the Premises, that this
Lease is unmodified and in full force and effect (or if there have been
modifications, that the same is in full force and effect as modified and
stating the modifications), that the Landlord is not in default hereunder, the
date to which the rental and other charges have been paid in advance, if any,
and such other
- 20 -
<PAGE> 24
accurate certification as may reasonably be required by Landlord or Landlord's
mortgagee. It is intended that any such statement delivered pursuant to
this subsection may be relied upon by any prospective purchaser or mortgagee of
the Premises and their respective successors and assigns.
SECTION 16.06. LANDLORD MEANS OWNER. The term "Landlord" as used in
this Lease, so far as covenants or obligations on the part of Landlord are
concerned, shall be limited to mean and include only the owner or owners at the
time in question of the fee of the Premises.
SECTION 16.07. SALES OF PREMISES BY LANDLORD. In the event of any
sale of the Premises by Landlord, Landlord shall be and is hereby entirely
freed and relieved of all liability under any and all of its covenants and
obligations contained in or derived from this Lease arising out of any act,
occurrence or omission occurring after the consummation of such sale; and the
purchaser, at such sale or any subsequent sale of the Premises shall be deemed,
without any further agreement between the parties of their successors in
interest or between the parties and any such purchaser, to have assumed and
agreed to carry out any and all of the covenants and obligations of the
Landlord under this Lease. Furthermore, in the event of a sale or conveyance
by Landlord of the Premises, or the property of which the Premises are a part,
this Lease shall not be affected by any such sale, and Tenant agrees to attorn
to the purchaser thereof.
SECTION 16.08. LAW GOVERNING. The law of the State of New Mexico
shall govern the validity, performance and enforcement of this Lease.
SECTION 16.09. GENDER AND NUMBER. Words of any gender used in this
Lease shall be held and construed to include any other gender, and words in the
singular number shall be held to include the plural, and vice versa, unless the
context otherwise requires.
SECTION 16.10. ENTIRE AGREEMENT. This Lease contains all of the
agreements and conditions made between the parties hereto and supersedes any
and all prior agreements between the parties with respect to the subject matter
hereof including, without limitation, that certain Proposal for Lease dated
July 20, 1990 and may not be modified orally or in any manner other than by
agreement in writing signed by the parties hereto or their respective
successors in interest.
SECTION 16.11. CAPTIONS: TABLE OF CONTENTS. The Table of Contents
of this Lease and the captions of the various articles and the sections of this
Lease are for convenience and ease of reference only and do not define, limit,
augment or describe the scope, context or intent of this Lease or any part or
parts of this Lease.
SECTION 16.12. SEVERABILITY. The invalidity or illegality of any
provision shall not affect the remainder of this Lease.
SECTION 16.13. ATTORNEY'S FEES. If either party brings any action
or proceeding to enforce, protect or establish any right or remedy arising
under this Lease, the prevailing party shall be entitled to recover reasonable
attorney's fees. Moreover, if either party without fault is made a party to any
litigation instituted by or against the other, the other party
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<PAGE> 25
shall indemnify the innocent party against and save it harmless from all costs
and expenses, including reasonable attorney's fees, incurred by it in
connection therewith.
SECTION 16.14. COUNTERPART SIGNATURES. This Lease Agreement may be
printed in multiple originals, and the parties hereto may sign counterpart
originals of the identical document. When all parties have so signed, this
Lease Agreement shall be a binding contract, notwithstanding that there is no
one original document containing all the parties' signatures.
SECTION 16.15. EQUIPMENT PRESENTLY LOCATED IN THE BUILDING.
Landlord agrees to give to Tenant possession of certain existing equipment
located in the Building, which equipment Tenant will use in its business
conducted on the Premises. Tenant agrees to act as Landlord's agent and to use
its best efforts (provided that Landlord will bear any expenses) to sell the
other equipment located on the Premises, the proceeds of which shall be divided
equally between Landlord and Tenant. The equipment to be used by Tenant or sold
as provided above is described on Exhibit "E" attached hereto and incorporated
herein. If Landlord determines in good faith that Tenant has not used its best
efforts to sell the equipment, then Landlord shall be entitled to remove all of
such equipment from the Premises, including any equipment on Exhibit "E" then
being used by Tenant. Landlord agrees to remove all unusable and unsellable
equipment at Landlord's expense or, at Landlord's option, Landlord may credit
Tenant for the cost of such removal.
SECTION 16.16. FINANCIAL STATEMENTS. Tenant and each Guarantor
shall deliver to Landlord, within ninety (90) days after the end of each of
Tenant's or such Guarantor's fiscal years, financial statements of Tenant and
Guarantor, in reasonable detail and certified as complete and correct by an
authorized officer or principal of Tenant or Guarantor or, certified by an
independent certified public accountant if Tenant or Guarantor ordinarily has
such statements prepared by an independent accountant or accounting firm.
Landlord agrees to keep such statements strictly confidential and agrees to use
such statements solely for the purpose of verifying Tenant's and Guarantors'
financial condition, and will not divulge the same to any other person or
entity except (i) in connection with any sale or financing of the Premises or
(ii) if required by any governmental authority.
SECTION 16.17. INCLUSION OF PREMISES IN ADDITIONAL DEVELOPMENT.
Tenant acknowledges that Landlord may acquire additional land immediately
adjacent to the Premises for the construction of a shopping center and/or
additional commercial buildings (the "Expansion Space"). In the event that at
any time during the term hereof, the Landlord constructs the Expansion Space
for lease to tenants, Landlord shall have the option to procure (if applicable)
and pay the taxes, insurance, maintenance and other common area charges
applicable to the total land and buildings constituting the Premises and the
Expansion Space (the "Total Development"). In such event, Tenant agrees to pay
its proportionate share of such taxes, insurance, maintenance and other common
area charges applicable to the Total Development determined by dividing the
total square footage of the Building (herein agreed to be 14,850 square feet)
by the aggregate rentable space in the Total Development, provided, however,
that Tenant's share of such costs' for the year in which such election is made
by Landlord shall not exceed Tenant's total costs for such items for the year
preceding such
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<PAGE> 26
election, wherein Tenant paid all such costs. Following the acquisition and
development of the Expansion Space, Landlord shall designate at least 72
parking spaces for Tenant's exclusive use.
SECTION 16.18. RESTRICTIONS APPLICABLE TO LANDLORD. Landlord agrees
that Landlord will not during the term hereof or any extension lease space in
the area bordered by St. Francis Drive, Cordova Road and Cerrillos Road to
another grocery store or health food store or to any business that derives more
than fifty percent (50%) of its gross revenues from the sale of produce, meat,
or vitamins.
EXECUTED the 27TH day of August, 1990.
----
LANDLORD:
---------
MARIANNA PARTNERS LIMITED
By: Sanders Partners
Incorporated,
General Partner
By: /s/ BARRY KOBREN
------------------------
Title: Vice President
-----------------------
TENANT:
WILD OATS MARKET OF SANTA FE,
INC.
By: /s/ MICHAEL GILLILAND
---------------------------
Title: President
------------------------
The provisions of Section 11.02
are hereby approved.
PHASE ONE REALTY, INC.
By: /s/ OFFICER OF PHASE
ONE REALTY, INC.
--------------------------
Title: President
-----------------------
23
<PAGE> 27
GUARANTY. The undersigned guarantors (individually "Guarantor" and
collectively "Guarantors") hereby, jointly and severally, primarily and
unconditionally guarantee the timely performance of the Tenant of all the
Tenant's obligations pursuant to the above Lease by and between Marianna
Partners Limited and Wild Oats of Santa Fe, Inc., including but not limited to,
the obligations for payment of money to the Landlord and/or third parties. The
undersigned guarantors agree that their guarantees shall remain in full force
and effect as to any and all renewals, extensions, amendments, additions,
assignments, subleases, transfers or other modifications of the Lease. All
obligations and liabilities of the Guarantors hereunder shall be binding on
their respective heirs, personal representatives, successors, and assigns.
INDIVIDUAL GUARANTORS:
----------------------
/s/ MICHAEL GILLILAND
---------------------------
MICHAEL GILLILAND
8/27/90
---------------------------
(Date)
/s/ ELIZABETH COOK
---------------------------
ELIZABETH COOK
8/27/90
---------------------------
(Date)
CORPORATE GUARANTORS:
---------------------
WILD OATS MARKET OF DENVER,
INC., a Colorado corporation
By: /s/ MICHAEL GILLILAND
------------------------
Its: President
-----------------------
Date: 8/27/90
----------------------
WILD OATS MARKET INC., a
Colorado corporation
By: /s/ MICHAEL GILLILAND
------------------------
Its: President
-----------------------
Date: 8/27/90
----------------------
SCHEDULE OF EXHIBITS:
Exhibit A - Legal Description of the Land
Exhibit B - Landlord's Initial Work
Exhibit C - Tenant's Work
Exhibit D - Landlord's Additional Work
Exhibit E - Schedule of Equipment
Exhibit F - Form of Collateral Assignment
of Life Insurance
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<PAGE> 28
EXHIBIT "A"
A portion of land lying and being situated within the city and County of Santa
Fe, State of New Mexico, more particularly described as follows, to wit:
Beginning at a point from whence Sanitary Sewer Manhole No. A9-12 at the
intersection of Pen Road and Cordova Road bears N. 78 degrees 45' W., 331.5 feet
and thence S. 85 degrees 29' W., 45.5 feet distant; thence said point and place
of beginning N. 16 degrees 04' E., 293.05 feet; thence S. 78 degrees 45' E.,
211.16 feet; thence along the westerly right-of-way of St. Francis Drive, along
a curve to the right, (Radius = 2242 feet; Chord = S. 5 degrees 48' W. 241.3
feet) a distance of 241.42 feet; thence along a curve to the right (Radius =
50.0 feet, Chord = S. 5 degrees 14' W., 71.99 feet) a distance of 80.36 feet;
thence along the northerly right-of-way line for Cordova Road N. 78 degrees 45'
W., 208.66 feet to the point and place of beginning. All as shown on plat of
survey "SAFEWAY #923-SURVEY ST FRANCIS DR. & CORDOVA RD. SANTA FE, NEW MEXICO",
by Jack G. Horne, P.E. L.S. No.889, dated September 22, 1989.
FIRST AMENDMENT TO LEASE AGREEMENT
DATED JULY 31, 1990 BY AND BETWEEN
MARIANNA PARTNERS LIMITED AND
WILD OATS MARKET OF SANTA FE, INC.
This First Amendment to Lease Agreement (this "Amendment") is made
effective as of August 1, 1992.
WHEREAS, Marianna Partners Limited, a New Mexico limited partnership,
and Wild Oats Market of Santa Fe, Inc., a Colorado corporation, executed that
certain Lease Agreement dated July 31, 1990 (the "Lease") pertaining to certain
real property and improvements located within the City of Santa Fe, Santa Fe
County, New Mexico; and
WHEREAS, CAMPR Partners, Ltd. (hereinafter referred to as "CAMPR" or
"Landlord") is the successor by merger to Marianna Partners Limited, the
original landlord named in the Lease, and Wild Oats Markets, Inc., a Colorado
corporation (hereinafter referred to as "Wild Oats" or "Tenant"), is the
successor by merger to Wild Oats Market of Santa Fe, Inc., the original tenant
named in the Lease; and
WHEREAS, the parties desire to amend the Lease to include under the
Lease certain additional land owned by CAMPR and located immediately adjacent
to the land that is presently the subject of the Lease and further desire to
modify certain other terms of the Lease as hereinafter set forth.
NOW, THEREFORE, it is agreed as follows:
1. Except as otherwise defined in this Amendment, all capitalized
terms used in this Amendment shall have the same meaning as such terms are
given in the Lease.
2. Section 1.02 of the Lease is deleted in its entirety and the
following provision is substituted therefor:
"SECTION 1.02. DEFINITIONS AND USE OF TERMS.
When used in this Lease:
(a) "Land" means collectively the real property described
in Section 1.01 above and the Additional Land
described in Section 1.02(c) below.
<PAGE> 2
(b) "Building" means any and all buildings, structures
and other improvements located or hereafter
constructed on the Land or the Additional Land.
(c) "Additional Land" means the real property located to
the north of and immediately adjacent to the real
property described in Section 1.01 and being more
particularly described on Exhibit "A-1" attached
hereto and incorporated herein.
(d) "Original Premises" means the real property described
in Section 1.01 and the approximately 14,850 square
foot free-standing building located thereon, which
real property and free-standing building were the
original subject of this Lease.
(e) "Premises" means collectively the Land and Building
leased herein.
3. The following sentence is added to the end of Section 2.01 of
the Lease:
"Notwithstanding anything in this Lease to the contrary, in
the event that Tenant has elected to construct the Expansion
Space as provided in Section 16.17 hereof, but has elected to
sublet all or a portion thereof in lieu of operating its
business in such space, then the Expansion Space or portion
thereof in which Tenant is not operating its business may be
used for the operation of any retail or service establishment
permitted by the zoning classification applicable to the
Premises, other than any of the Prohibited Uses or a Drug
Store Operation (as such terms are defined in Section 10.02
hereof)."
4. Section 2.02 of the Lease is deleted in its entirety and the
following provision is substituted therefor:
"Section 2.02. Term. The term of this Lease as it pertains to
the Original Premises shall run for thirteen (13) years from
and after the first day of the month following the Site
Improvement Completion Date (as defined in Section 16.17
hereof). The term of this Lease as it applies to the
Additional Land (and any Building thereon) shall be eight (8)
years from and after the first day of the month following the
Site Improvement Completion Date."
5. Section 2.03 of the Lease is deleted in its entirety and the
following provision is substituted therefor:
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<PAGE> 3
"Section 2.03. Renewal Option. Provided that Tenant is not in
default in respect to any provision of this Lease, Tenant
shall have the right to extend the term of this Lease for (i)
twelve (12) additional periods of five (5) years each, with
respect to the Original Premises and (ii) thirteen (13)
additional periods of five (5) years each with respect to the
Additional Land, provided, however, that written notice is
given to Landlord of such intention to extend the Lease six
(6) months prior to the applicable expiration date. Such
extension terms shall be upon the same terms, conditions and
rentals as contained herein except that the rental applicable
during such extended term(s) shall be as provided in Section
3.01 hereof. Notwithstanding anything herein to the contrary,
following the exercise of the first five (5) year option by
Tenant with respect to the Additional Land, Tenant shall not
thereafter have the right to exercise its renewal option with
respect to the Additional Land unless Tenant simultaneously
exercises its renewal option with respect to the original
Premises."
6. The following provision is added to the end of Section 3.01 of
the Lease:
"Notwithstanding anything in this Section 3.01 to the
contrary, from and after the Site Improvement Completion Date,
Tenant shall pay rent as provided in Subsections (f) and (g)
below.
(f) Initial Minimum Rent. During the initial term hereof,
as set forth in Section 2.02, Tenant shall pay
Landlord Minimum Rent on or before the first day of
each month as follows:
(i) Minimum Rent for the Original Premises -
$172,500.00 per annum ($14,375.00 per month).
(ii) Minimum Rent for the Additional Land -
$35,000.00 per annum ($2,916.67 per month).
(g) Adjustments to Minimum Rent During Renewal Periods.
The Minimum Rent payable with respect to the original
Premises and the Additional Land shall be increased
as follows:
(i) Original Premises. The Minimum Rent payable
during any renewal term with respect to the
Original Premises will be the lesser of (i)
the Minimum Rent specified in Subsection (f)
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<PAGE> 4
(i) immediately above increased to reflect
increases in the Consumer Price Index (as
defined in Section 3.03) for the period from
the effective date of this Amendment through
the last day of the immediately preceding
expired term or extension or (ii) sixty-five
percent (65%) of the annualized average total
rent (i.e. Minimum Rent plus Percentage Rent)
for the five (5) Lease Years immediately
preceding such renewal term, provided,
however, that in no event shall the Minimum
Rent for any renewal term be less than the
Minimum Rent for the immediately preceding
expired term. The yearly percentage
adjustment for increases in the Consumer
Price Index shall not exceed five percent
(5%) in any Lease Year, provided that such
ceiling shall not apply if Wild Oats has
sublet the Premises or assigned the Lease
pursuant to Article XII hereof.
(ii) Additional Land. In the event that Tenant has
not constructed the Expansion Space or is not
then operating its business therein, and is
thus not paying Percentage Rent with respect
to sales made by Tenant on the Additional
Land, then the Minimum Rent applicable to the
Additional Land during any renewal term shall
be the Minimum Rent specified in Subsection
(f)(ii) immediately above, increased to
reflect increases in the Consumer Price Index
for the period from the effective date of
this Amendment through the last day of the
immediately preceding expired term or
extension. The yearly percentage adjustment
for increases in the Consumer Price Index
shall not exceed five percent (5%) in any
Lease Year."
7. Section 3.02 of the Lease is deleted in its entirety and the
following provision is substituted therefor:
"Section 3.02. Lease Year. As used herein, the term "Lease
Year" shall mean the twelve (12) month period beginning on the
effective date hereof, and each consecutive twelve (12)
calendar month period thereafter."
8. Section 3.03 of the Lease is hereby deleted in its entirety
and the following provision is substituted therefor:
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<PAGE> 5
"Section 3.03. Cost of Living Increases; CPI Adjustment.
Except as otherwise provided in Section 3.01 hereof, and
subject to the yearly limitation stated therein, at the
beginning of every five (5) year renewal term applicable to
the Original Premises and/or the Additional Land, the Minimum
Rent provided in Section 3.01(f) shall be adjusted to reflect
any increase in the consumer price index ("Consumer Price
Index") as hereinafter provided. Each renewal period following
the initial terms specified in Section 2.02 is hereinafter
referred to as an "Adjustment Period". The adjusted Minimum
Rent shall be obtained by multiplying the Minimum Rent
provided for in Section 3.01(f) by a fraction, the numerator
of which is the index number for the first month of each
Adjustment Period hereunder in the column for "All Items"
(unadjusted) in the table entitled "Consumer Price Index For
All Urban Consumers," (Index Base: 1982-1984 = 100) "U.S. City
Average" published monthly by the Bureau of Labor Statistics
of the U.S. Department of Labor in the Monthly Labor Review
(said table herein referred to as the "CPI-U") and the
denominator of which is the CPI-U for the effective date of
this Amendment. The adjusted rental thus obtained shall be the
Minimum Rent applicable during such renewal term.
Tenant shall continue to pay the Minimum Rent in effect for
the expiring term or Adjustment Period until notified by
Landlord of any increase in such Minimum Rent. On the
first day of the calendar month immediately following receipt
of such notification, Tenant shall commence payment of the new
Minimum Rent specified in the notice, and shall also pay the
Landlord, with respect to the months already expired during
such renewal term, the excess of the required monthly rental
specified in the notice over the monthly amounts theretofore
actually paid by Tenant."
9. The first sentence of Section 3.05(a) of the Lease is deleted
in its entirety and the following sentence is substituted therefor:
"In addition to the Minimum Rent, Tenant shall pay to Landlord
for each calendar year during the term of this Lease, as
percentage rent ("Percentage Rent"), a sum equivalent to the
amount, if any, by which the sum of two percent (2%) of
Tenant's Gross Sales (as hereinafter defined) up to
$15,000,000.00 plus one percent (1%) of Tenant's Gross Sales
in excess of $15,000,000.00 for such calendar year exceeds the
annual Minimum Rent for the Original Premises set forth in
Section 3.01 hereof for such calendar year."
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<PAGE> 6
10. The first sentence of Section 3.05(c) is deleted and the
following sentence is substituted therefor:
"As used herein, the term "Tenant's Gross Sales" shall mean
the gross proceeds from all sales of merchandise, services and
other receipts whatsoever of all business conducted by Tenant
in or from the Premises, whether sold for cash or on credit,
including, without limitation, redemption of gift and
merchandise certificates, deposits not refunded to purchasers,
orders taken at the Premises, although such orders may be
filled elsewhere, sales through vending machines or other
devices, and sales by any subtenant, concessionaire or
licensee in the Premises, but not including sales by any
subtenant occupying the Expansion Space or any portion thereof
in the event that Tenant has elected to construct the
Expansion Space as provided in Section 16.17 hereof, but has
elected to sublet all or a portion thereof in lieu of
operating its business in such space."
11. The following paragraph is added to the end of Section 4.03 of
the Lease:
"Notwithstanding anything in this Lease to the contrary,
including, without limitation, this Section 4.03, CAMPR shall
have no obligation to complete the Landlord's Additional Work
or any portion thereof unless and until required by applicable
governmental authorities. Landlord and Tenant agree that
Landlord shall have no liability whatsoever for failing to
complete Landlord's Additional Work prior to the date required
by applicable governmental authorities and Tenant specifically
waives and releases Landlord from any and all liability for
the per diem penalty specified in this Section 4.03. At such
time that applicable governmental authorities require
completion of the Landlord's Additional Work, Landlord agrees
to complete such Landlord's Additional Work at Landlord's sole
expense and in a good and workmanlike manner."
12. Article IX of the Lease is deleted in its entirety and the
following provision is substituted therefor:
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<PAGE> 7
"ARTICLE IX
DESTRUCTION OF IMPROVEMENTS BY FIRE
OR OTHER CASUALTY
If the Premises should be damaged or destroyed by
fire, tornado or other casualty, Tenant shall give immediate
written notice thereof to Landlord. Following the receipt of
such notice, Landlord shall, at Landlord's expense, proceed
with reasonable diligence to rebuild and repair the Premises
to substantially the condition in which they existed prior to
such casualty, (excluding stock in trade, furniture, fixtures,
furnishings, carpeting, floor covering, wall coverings, drapes
and equipment and other personal property of Tenant) provided,
however, that Landlord shall not be obligated to expend for
such repair or restoration an amount in excess of the
insurance proceeds recovered by Landlord as a result of such
damage, except if due to Landlord's negligence or intentional
acts, and provided, further, that if the Premises are damaged,
destroyed or rendered untenable for their accustomed use by
fire or other casualty to the extent of more than fifty
percent (50%) of the cost to replace the Premises during the
last two (2) years of the term of this Lease or any extension
thereof, then Landlord shall not have the obligation to
rebuild the Premises unless Tenant first exercises its option
to renew the term for at least another five (5) years. If the
Premises are untenable in whole or in part following such
damage, the rent payable hereunder during the period in which
they are untenable shall be reduced to such extent as shall be
fair and reasonable under all of the circumstances. If
Landlord's rebuilding and repair cannot or will not be
completed within one hundred eighty (180) days of the
occurrence giving rise to such damage, then Tenant may elect
to terminate the Lease effective upon the date of such
occurrence by giving written notice of such election to
Landlord within thirty (30) days of the date of such
occurrence, in which event neither party shall have any
further rights or obligations hereunder following such
termination, except, however, with respect to any claims
accruing or arising hereunder prior to the effective date of
such termination. If said notice is not given and Landlord is
required to repair or restore the Premises as herein provided,
then Tenant shall promptly repair or replace its trade
fixtures, furnishings, furniture, carpeting, wall covering,
floor covering, drapes and equipment and other personal
property necessary for Tenant to conduct
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<PAGE> 8
its business and Tenant shall thereafter promptly reopen for
business.
13. The following paragraph is added to the end of Section 10.02
of the Lease:
"In addition to the foregoing restrictions, Tenant agrees that
neither the Premises nor any portion thereof shall be used for
(i) purposes of a cocktail lounge (provided, however, that
this shall not preclude a cocktail lounge operated in
conjunction and as a part of a restaurant), bar, disco,
bowling alley, pool hall, billiard parlor, skating rink,
roller rink, amusement arcade, adult book store, adult
theater, adult amusement facility, or any facility selling or
displaying pornographic materials or having such displays,
secondhand store, auction house, flea market or any use which
creates a nuisance (hereinafter the "Prohibited Uses") or (ii)
the operation of a drug store or a so called prescription
pharmacy or for any purpose requiring a qualified pharmacist
or other person authorized by law to dispense medicinal drugs,
directly or indirectly, for a fee or a remuneration of any
kind (hereinafter a "Drug Store Operation") provided, however,
that this restriction shall not prohibit or restrict in any
way the sale of medicinal herbs or vitamins from the Premises.
The restrictions against the Prohibited Uses and the
restrictions against a Drug Store Operation on the Premises
shall continue throughout the term of this Lease, provided,
however, that the restrictions against a Drug Store Operation
on the Premises shall terminate sooner if at any time
following three (3) years from the effective date of this
Amendment a Drug Store operation is not conducted on the North
Site (as defined in Section 16.17 hereof) for a period of
twelve (12) consecutive months."
14. Section 11.01 of the Lease is deleted in its entirety and the
following provision is substituted therefor:
"Section 11.01. Alterations and Surrender of Premises. Tenant
shall not make any major alterations in or additions,
including construction of additional buildings on the Land and
the Additional Land, changes or repairs to the Premises except
in accordance with the provisions of Section 16.17 hereof.
Additionally, Tenant may make nonstructural alterations to the
interior of the Premises not exceeding $5,000.00 in cost
without Landlord's prior written consent provided that such
nonstructural, interior alterations are made in accordance
with the remainder of this Section 11.01. Tenant may, at its
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expense, when surrendering the Premises, remove from the
Premises all personal property and trade fixtures installed by
Tenant but no structural components shall be removed and all
damage resulting from removal of any such additions shall be
repaired by Tenant. If Tenant does not remove its trade
fixtures and personal property after request to do so by
Landlord, Landlord may remove the same and Tenant shall pay
the cost of such removal to Landlord upon demand. Tenant
hereby agrees to hold Landlord, its agents and employees
harmless from any and all liabilities of every kind and
description which may arise out of or be connected in any way
with said alterations or additions. Any mechanic's lien filed
against the Premises for work claimed to have been furnished
to Tenant shall be discharged of record by Tenant within ten
(10) days after the filing thereof, at Tenant's expense or,
alternatively, Tenant may elect to provide Landlord with an
acceptable bond from a surety company reasonably acceptable to
Landlord in the amount of one and one-half times the amount of
the lien. All alterations and additions shall comply with all
insurance requirements and with all applicable laws, statutes,
ordinances and regulations. All alterations and additions
shall be constructed in a good and workmanlike manner and only
good grades of material shall be used. Tenant shall, at the
termination of the Lease, surrender the Premises to Landlord
in as good condition and repair as reasonable and proper use
thereof will permit, loss by ordinary wear and tear excepted."
15. The following sentences are added to the end of Article XII of
the Lease:
"Notwithstanding anything in this Article XII to the contrary,
in the event that Tenant has elected to construct the
Expansion Space as provided in Section 16.17 hereof, but has
elected to sublet all or a portion thereof in lieu of
operating its business in such space, then Tenant shall have
the right to sublet all or any portion of the Expansion Space
not being used by Tenant for the operation of its business to
other third parties for the purposes specified in Section 2.01
hereof."
"Notwithstanding anything in this Article XII to the contrary,
Tenant may assign this Lease (i) to Agora Properties, a
Colorado general partnership, provided that the present
ownership of Agora Properties or its constituent entities is
not changed, except by devise or descent and (ii) in
connection with an offering of stock, either public or
private, in Tenant or any proposed Assignee of this Lease,
provided that Michael Gilliland and Elizabeth Cook retain,
directly or indirectly, an aggregate thirty percent ownership
interest in Tenant or Assignee.
16. The second paragraph of Article XV of the Lease is deleted in
its entirety and the following provision is substituted therefor:
"Notwithstanding the foregoing, Landlord's sole remedy in the
event of a violation by Tenant of its covenants in this
Article XV shall be to collect from Tenant
<PAGE> 10
additional rent, which additional rent Tenant hereby agrees to
pay to Landlord as follows:
(a) In the event that such competing business is a "new
store", i.e., a store which has not been previously operated
as a natural grocery store within ten miles of the Premises,
then Tenant shall pay to Landlord one percent (1%) of all
gross sales over $3,000,000 from all such new stores located
within said ten mile radius of the Premises.
(b) In the event that such competing store is not a "new
store" and Tenant purchases an existing business which has
been previously operated as a natural grocery store, then
Tenant shall pay to Landlord as additional rent two percent
(2%) of gross sales over $6,000,000 from all such other stores
it owns and operates within said ten mile radius of the
Premises.
Notwithstanding anything in this Article XV to the contrary,
Landlord agrees to waive its right to collect such additional
rent from the business presently conducted by Tenant or its
affiliates in St. Michael's Village, Santa Fe, New Mexico
(the "St. Michael's Store") provided that neither Tenant nor
its affiliates expand the size of the St. Michael's Store
(i.e. increase in any way the sales area of the St. Michael's
Store). In the event of such expansion, then Landlord's
conditional waiver of its right to receive a percentage of the
sales of such competing business shall immediately terminate,
and Tenant shall pay thereafter to Landlord one percent (1%)
of all gross sales over $3,000,000 from the St. Michael's
Store."
17. Section 16.17 of the Lease is deleted in its entirety and the
following provision is substituted therefor:
"Section 16.17. Approval of Site Plans; Construction of Site
Improvements; Expansion Space.
(a) Approval of Site Plans. Tenant acknowledges that
Landlord owns and plans to develop certain property
which is immediately north of the Premises, said
Property being more particularly described on Exhibit
"B-1" attached hereto and incorporated herein (the
"North Site"). Landlord and Tenant further
acknowledge that Tenant is leasing the Additional
Land from Landlord for the purposes of acquiring
additional parking adjacent to the existing Building
and for the purpose of allowing
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Tenant to construct additional retail space abutting the
existing Building, should Tenant elect in the future to
construct such additional space (the "Expansion Space").
Attached to this Lease as Exhibit C-1 is a site plan (the
"Preliminary Site Plan") which illustrates the proposed
configuration and site improvements to the North Site and the
Premises (collectively the "Entire Tract") prior to
construction of the Expansion Space. Attached to this Lease
as Exhibit D-1 is a site plan (the "Expansion Plan") which
illustrates the modifications to the Preliminary Site Plan
reflecting construction of the Expansion Space. Landlord and
Tenant hereby approve the Preliminary Site Plan and the
Expansion Plan (approval of the Expansion Plan to control in
the event that either Tenant or Landlord construct the
Expansion Space, as hereafter set forth) and both Landlord and
Tenant agree to cooperate fully with each other and applicable
governmental authorities in effecting the development shown on
the Preliminary Site Plan and the Expansion Plan and agree
that the Entire Tract will be developed in accordance with the
same.
(b) Landlord's Construction of Site Improvements Shown on
Preliminary Site Plan.
(i) Authority to Proceed; Construction Deadlines.
Landlord is hereby authorized to begin construction
of the parking, ingress and egress and other
construction reflected on the Preliminary Site Plan
(hereinafter the "Site Improvements") as such
construction pertains to the Premises (and so much of
the North Site as is necessary for ingress to and
egress from the Premises). It is expressly
understood, however, that Landlord shall have no
obligation to construct any of the Site Improvements
on the North Site (except so much thereof as is
necessary for ingress to and egress from the
Premises) until buildings are constructed on the
North Site. Landlord agrees to submit an application
for building permit and/or any other necessary
submittals for the construction of the Site
Improvements on the Premises to the City of Santa Fe
and/or any other applicable governmental authorities
on or before October 15, 1992, and agrees to commence
construction of the Site Improvements
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<PAGE> 12
within thirty (30) days of receipt of all necessary
governmental approvals and Tenant's alternative
quotes or bids referred to in Section 16.17 (b)(ii)
(or notice from Tenant that it is waiving such
right). Following commencement of construction,
Landlord agrees to diligently pursue such
construction to completion. Notwithstanding anything
herein to the contrary, in the event that Landlord
has not commenced construction of the Site
Improvements on the Premises on or before July 31,
1993 (the "Outside Completion Date"), then Tenant may
terminate this Amendment by giving written notice of
such termination to Landlord within fifteen (15) days
of the Outside Completion Date, in which event the
Lease as in effect prior to the execution of this
Amendment shall control and none of the provisions of
this Amendment shall be effective, except for
Paragraphs 11 and 16 of this Amendment, which shall
survive such termination. The Site Improvements on
the Premises shall be deemed completed on the date
(the "Site Improvement Completion Date") upon which
Landlord has completed construction of the Site
Improvements on the Premises (and so much of the
North Site as is necessary for ingress to and egress
from the Premises) in accordance with the plans
submitted to and approved by the City of Santa Fe. The
parties agree to execute a certificate memorializing
the Site Improvement Completion Date. Additionally,
in the event that Landlord (i) has not commenced
construction of the Site Improvements on the Premises
on or before the outside Completion Date, or (ii)
fails to commence construction of the Site
Improvements within sixty (60) days of receipt of all
necessary governmental approvals and Tenant's
alternative quotes or bids referred to in Section
16.17(b)(ii) (or notice from Tenant that it is
waiving such right), then Tenant may proceed to
obtain any necessary approvals and complete
construction of the Site Improvements. Following
completion thereof, Landlord agrees to promptly
reimburse Tenant upon demand for the actual costs in
excess of $50,000 incurred by Tenant (one hundred
fifteen percent (115%) thereof, in the case of
Landlord's failure to commence
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<PAGE> 13
construction under clause (ii) above) in constructing
the Site Improvements.
(ii) Conduct of Construction. Landlord agrees to use all
reasonable efforts to minimize disruption of Tenant's
business as a result of such construction, and agrees
that the existing entrance from St. Francis Drive
shall not be closed until the new entrance from St.
Francis Drive, as reflected on the Preliminary Site
Plan, is completed and open. Prior to commencing
construction of the Site Improvements, Landlord
agrees to provide Tenant with a copy of any bids or
quotes received by Landlord with respect to such
construction. Tenant shall have twenty-one (21) days
following receipt of such information to obtain
alternative quotes or bids from reputable
contractors/suppliers and the parties agree that such
work shall be performed by the lowest responsive,
responsible bidder(s). Landlord shall provide
reasonable proof to Tenant to substantiate actual
costs for the Site Improvements on the Premises.
(c) Tenant's Agreement to Reimburse Landlord for Cost of Site
Improvements on Premises. Following completion of construction
of the Site Improvements on the Premises, Tenant agrees to
reimburse Landlord for the actual costs incurred by Landlord
in constructing the Site Improvements (consisting of design,
topo, survey, dirt work, landscaping, asphalt, concrete,
retaining walls, curb-cuts and deceleration lanes) in an
amount not to exceed $100,000.00. Tenant shall reimburse
Landlord $50,000.00 in cash upon substantial completion of the
Site Improvements. Notwithstanding anything in Section 3.05 of
this Lease to the contrary, and in addition to the Percentage
Rent specified in Section 3.05, Tenant agrees to pay
additional Percentage Rent in the amount of one percent (1%)
of all of Tenant's Gross Sales in excess of $15,000,000.00
(the "Additional Percentage Rent") until such time as Landlord
has been completely reimbursed for the total cost of the Site
Improvements on the Premises in excess of such $50,000.00 cash
payment, up to such $100,000.00 maximum. Additionally, in the
event that Tenant completes construction of the Site
Improvements
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because of Landlord's failure to commence construction and
Landlord has reimbursed Tenant for costs in excess of $50,000,
as specified in Section 16.17 (b) (i) above, then Tenant shall
pay Additional Percentage Rent to Landlord until such time as
Landlord has been completely reimbursed for the total cost of
the Site Improvements on the Premises in excess of $50,000, up
to such $100,000 maximum.
(d) Use of Roadways, Parking Areas, Sidewalks and Entrances Shown
on Preliminary Site Plan and Expansion Plan. Landlord and
Tenant agree that, following completion of construction of the
Site Improvements reflected on the Preliminary Site Plan (and
the Expansion Plan, in the event that Tenant or Landlord
constructs the Expansion Space, as hereinafter set forth) the
roadways, parking areas, sidewalks and entrances shown on the
Preliminary Site Plan (or the Expansion Plan, as applicable)
shall be used in common by Tenant, on the one hand, and
Landlord and any tenants on the North Site, on the other hand,
and their respective customers, employees, agents and
invitees.
(e) Tenant's Construction of Expansion Space. Provided that and
for so long as Tenant is leasing the Additional Land, Tenant
shall have the right to construct the Expansion Space in
accordance with the provisions hereof.
(i) Approvals. Should Tenant elect to construct the
Expansion Space, Tenant shall prepare and submit the
construction plans, drawings and related documents to
Landlord for written approval. Landlord shall either
approve or disapprove in writing any of the items
submitted for approval to Landlord by Tenant within
seven (7) days of Landlord's receipt thereof. Any
disapproval shall be accompanied by a written
explanation setting forth in detail the reasons for
disapproval. Landlord shall not unreasonably withhold
approval of such plans and specifications and the
criteria used by Landlord in approving or
disapproving any such item shall be compliance with
applicable land use regulations, quality of general
design and aesthetic compatibility with the remainder
of the Building and the other improvements on the
Entire Tract. Landlord and Tenant agree to cooperate
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reasonably with each other in resolving any
objections of the other to such item and/or requested
modifications by the other. Following approval of the
plans and specifications, Tenant will not make any
material modification or alteration without the prior
written consent of Landlord. Landlord and Tenant
agree to communicate and consult informally as
frequently as is necessary to ensure that the formal
submittal of any item pursuant to this Section
16.17(e) can receive prompt and speedy consideration.
If within fourteen (14) days from the date that
Tenant first submits the construction plans, drawings
and related documents to the Landlord for written
approval, Landlord and Tenant have not finally
approved the plans and specifications, then either
Landlord or Tenant may demand that any disputed
matter involving the plans and specifications be
decided by arbitration in accordance with the rules
of the American Arbitration Association then
obtaining. The parties to this Lease acknowledge and
agree that the performance of this Lease will
substantially involve interstate commerce and that,
accordingly, this agreement to arbitrate shall be
specifically enforceable under the Federal
Arbitration Act. Notice of the demand for arbitration
shall be delivered in writing to the other party to
this Lease and filed in writing with the American
Arbitration Association. The parties hereby agree
that Ernest A. Romero shall act as the single
arbitrator. In the event that Ernie Romero is unable
or unwilling to so serve, then one arbitrator shall
be chosen by each of the parties within fifteen (15)
days after the demand for arbitration, and the
remaining arbitrator shall be chosen as a mutual
arbitrator in accordance with the then applicable
rules of the American Arbitration Association. Each
arbitrator chosen hereunder shall be a disinterested
person. The arbitrator(s) shall have no power to
change any of the provisions of this Lease in any
respect, nor shall the arbitrator(s) have the power to
make an award or reformation, and the jurisdiction of
the arbitrator(s) is hereby
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expressly limited accordingly. The arbitration shall
be conducted in Santa Fe, New Mexico in accordance
with the then prevailing rules of the American
Arbitration Association or its successor. Without
limitation on the foregoing, the arbitrators shall
have the right to retain and consult experts and
competent authorities skilled in the matters under
arbitration, but all consultation shall be made at a
hearing with all parties having full right to cross
examine the experts and authorities. All hearings
regarding arbitration shall be held within a period
of time not to exceed sixty (60) days after the
appointment of the arbitrators hereunder. The
arbitrators shall render an award not later than
thirty (30) days after the conclusion of the last
hearing in connection therewith. The decision and
award of the arbitrators shall be in writing, and
counterpart copies shall be delivered to each of the
parties. The award rendered by the arbitrators shall
be final, and judgment may be entered upon it in any
court of competent jurisdiction in accordance with
the Federal Arbitration Act. Unless then otherwise
agreed in writing by the parties to this Lease, no
party shall interrupt its performance under this
Lease, including, but not limited to, the payment of
any monies hereunder, pending the determination and
rendering of any award under the arbitration
proceedings herein provided.
(ii) Reports and Information. Copies of all soils reports,
surveys, hazardous wastes or toxic reports,
feasibility studies and other similar written
materials prepared or obtained by Tenant with respect
to the construction of the Expansion Space shall be
delivered to Landlord within ten (10) days after
receipt by Tenant.
(iii) Plans and Contracts. The contract between Tenant and
any architect or other design professionals or any
general contractor for the design or construction of
the Expansion Space shall provide, in form and
substance reasonably satisfactory to Landlord, for
the assignment thereof to Landlord as security to
Landlord for Tenant's performance of its obligations
under this Lease and Landlord
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<PAGE> 17
shall be furnished with any such contract, together
with the further agreement of the parties thereto,
that if this Lease is terminated due to the Tenant's
default of a type which allows Landlord to terminate
this Lease, Landlord may, at its election, use any
plans and specifications to which Tenant is then
entitled and/or complete performance called for by
Tenant and assert the right of Tenant pursuant to any
such contract, upon the payment of any sums due to
any party thereto. Upon completion of the Expansion
Space, Tenant shall provide Landlord with a complete
and legible full-size set of all as-built plans and
specifications.
(iv) Construction.
(A) Conditions to Commencement of Construction.
Tenant shall satisfy the following conditions
and in no event shall Tenant commence any
construction of the Expansion Space until the
following conditions have been satisfied or
waived by Landlord:
[1] Landlord shall have approved the
plans and specifications in
sufficient detail to permit Landlord
to approve the size, configuration,
and external appearance of the
Expansion Space;
[2] Tenant shall have provided
reasonable evidence (e.g. letter
from bank or other financing source
committing funds) to Landlord of
Tenant's ability to complete
construction of the Expansion Space
prior to commencement thereof;
[3] Tenant shall have obtained all
permits and other governmental
approvals necessary to commence such
construction; and
[4] If Tenant intends to employ a
general contractor for the
construction of the Expansion space,
Tenant shall have entered into
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complete and binding contracts in
form and substance commonly used in
the industry with such contractor for
the construction of the Expansion
Space.
(B) Restrictions; Governmental Permits. The
Expansion Space shall not be constructed or
maintained unless the same conforms to and is
consistent with all applicable zoning
applicable to the Premises, all other
applicable governmental requirements
(including without limitation any conditional
use permit or other license, permit, or
certificate required to be issued by any
governmental authorities in connection with
the construction of the Expansion Space) and
the plans and specifications approved by
Landlord. Additionally, the construction of
the Expansion Space shall be completely
within the building areas reflected on the
Expansion Plan and shall in all other manners
comply with the Expansion Plan. Before
commencement of construction of the Expansion
Space, Tenant shall, at Tenant's sole cost
and expense, secure any and all applicable
permits, licenses and other approvals which
may be required by any governmental
authorities having jurisdiction over such
construction, development or work. Landlord
shall have no implied obligation to cause
such permits to be issued other than in the
ordinary course of governmental business.
Tenant shall provide a copy of any such
permits, licenses or other approvals to
Landlord prior to commencing work.
(C) Construction Standards. All construction,
alteration or repair work permitted herein
shall be accomplished expeditiously,
diligently and in accordance with good
engineering practices. Tenant shall take all
reasonably necessary measures to minimize any
damage, disruption or inconvenience caused by
such work and make adequate provision for the
safety and convenience of all persons
affected thereby. Tenant shall pay (or cause
to
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be paid) all costs and expenses associated
with such work and shall indemnify and hold
Landlord harmless from all damages, lawsuits
and claims attributable to the performance of
such work. Dust, noise and other effects of
such work shall be controlled using
commercially accepted methods customarily
utilized in order to control deleterious
effects associated with construction projects
in a populated or developed area.
(D) Costs of Construction. The entire cost and
expense of constructing the Expansion Space
and any site improvements reflected on the
Expansion Plan which have to be reconstructed
or rebuilt as a result of Tenant's
construction of the Expansion Space shall be
borne and paid by Tenant.
(E) Responsibilities of Landlord.
[1] Governmental Approvals. Landlord
will assist and cooperate with
Tenant in connection with the
reasonable request by Tenant for
tentative or final parcel, tract or
subdivision map approvals, variances
and any other permit, license or
other approval from any governmental
authority which may be reasonably
necessary for or which will
facilitate the development,
operation and use of the Expansion
Space.
[2] Easements. Landlord agrees to join
in granting, dedicating or
relocating such public or private
utility company easements as may be
reasonably required for the
construction of the Expansion Space.
[3] No Impediments. Landlord agrees that
it will not construct any
improvements on or take any action
with respect to the North Site or
otherwise that would impede or
prevent Tenant from exercising its
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<PAGE> 20
rights under the Lease to construct the
Expansion Space.
[4] Parking. Landlord warrants and
represents that the Expansion Plan
complies with current City of Santa
Fe minimum parking requirements for
retail space.
(F) Reports. During the construction of the
Expansion Space, Tenant shall furnish
Landlord with monthly progress reports in a
form reasonably satisfactory to Landlord
demonstrating compliance with the
construction requirements of this Lease.
(v) Compliance With Parking Requirements. Tenant may take
all reasonable measures to insure that the parking
ratio for the Premises does not fall below a ratio of
one (1) parking space per two hundred (200) ft.2 of
building area and that none of the tenants or
occupants of the Entire Tract use more than one (1)
parking space per two hundred (200) ft.2 of building
area leased or occupied by such user.
(vi) Ownership of Improvements. All permanent improvements
constructed by Tenant pursuant to this Section
16.17(e) shall be and remain Landlord's property,
shall become part of the Premises and shall not be
removed by Tenant upon termination of this Lease for
any reason.
(f) Landlord's Construction of Expansion Space. In the event that
Tenant does not construct the Expansion Space and at any time
while this Lease is in effect with respect to the Original
Premises fails to exercise its option to extend the term of
this Lease as it applies to the Additional Land, then Landlord
shall have the right to construct the Expansion Space at
Landlord's sole cost and expense. In such event, Landlord
agrees to use all reasonable efforts to minimize disruption of
Tenant's business as a result of Landlord's construction of
the Expansion Space. Construction of the Expansion Space by
Landlord shall be in strict accordance with and within the
building areas reflected on the Expansion Plan. Following
completion of construction of the Expansion Space by Landlord,
Tenant acknowledges that the Expansion
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<PAGE> 21
Space shall be under the exclusive control of Landlord and
that the definition of Premises hereunder shall be reduced to
include only the original Building that was the subject of
this Lease and the roadways, parking areas, sidewalks and
entrances located on the Original Premises, as reflected on
the Expansion Plan, subject to the rights of Landlord and any
tenants on the North Site to use such roadways, parking areas,
sidewalks and entrances. In leasing the Expansion Space,
Landlord shall notify Tenant of Landlord's lease rates, lease
terms and the expected tenant credit rating, which rate, terms
and credit shall be reasonable in the Santa Fe market. If
Tenant desires to lease the Expansion Space, is not in default
under this Lease and Tenant is willing to meet the rate and
terms and can provide the satisfactory credit rating required
by Landlord, Landlord agrees to negotiate with the Tenant for
the lease of the Expansion Space.
(g) Operation of Entire Tract. Should Landlord construct the
Expansion Space, or should Landlord otherwise elect at any
time, Landlord and Tenant acknowledge and agree that Landlord
shall have the right to treat the Entire Tract as an
integrated shopping center and that Landlord shall have the
option to procure (if applicable) and pay the taxes,
insurance, maintenance and other common area charges
applicable to the Entire Tract. In such event, Tenant agrees
to pay its proportionate share of such taxes, insurance,
maintenance and other common area charges applicable to the
Entire Tract, determined by dividing the total square footage
of the Building located on the Original Premises (herein
agreed to be 14,850 square feet) by the aggregate rentable
space in the Entire Tract, provided, however, that Tenant's
share of such costs for the year in which such election is
made by Landlord shall not exceed Tenant's total costs for
such items for the year preceding such election, wherein
Tenant paid all such costs. Following completion of
construction of the Expansion Space by Landlord, Landlord
shall designate at least 72 parking spaces for Tenant's
exclusive use.
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<PAGE> 22
18. The following sentence is added to the end of Section 16.18 of
the Lease:
"Additionally, Landlord agrees that no portion of the North
Site shall be used for any of the Prohibited Uses, as defined in Section 10.02
hereof."
19. A new Section 16.19 is hereby added to the Lease as follows:
"Section 16.19. Tenant's Option to Purchase the Premises.
(a) Grant of option. For and in consideration of the
mutual and reciprocal covenants contained herein,
Landlord grants to Tenant the exclusive right and
option to purchase the Premises at a total purchase
price equal to $3,500,000.00 cash, plus any Site
Improvement costs incurred by Landlord as specified
in Section 16.17 hereof for which Landlord has not
been reimbursed by Tenant as of the closing of such
option purchase, and otherwise on the terms and
conditions set forth in the real estate contract
attached hereto as Exhibit "E-1" and incorporated
herein (the "Real Estate Contract"). In the event
that Tenant exercises its option to purchase after
Landlord has commenced construction of but before
completion of the Site Improvements as specified in
Section 16.17 hereof, then Landlord shall have the
right to complete construction of the Site
Improvements and the entire reimbursable portion
thereof shall be added to the purchase price.
(b) Option Period. Tenant may exercise its option at any
time on or before 5:00 o'clock p.m. on April 1, 1993
provided, however, that if Landlord has not sooner
placed a mortgage to secure third party financing on
the Entire Premises, Tenant shall have until 5:00
o'clock p.m. on September 1, 1993 or until the
Walgreen's Store on the North Site is constructed and
Walgreen's is in possession and paying rent,
whichever is sooner, to exercise such option.
Notwithstanding anything herein to the contrary, the
April 1, 1993 date and the September 1, 1993 date
specified above shall be extended one (1) day for
each day after December 31, 1992 that Landlord has
not completed the Site Improvements as required in
Section 16.17(b) hereof.
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<PAGE> 23
(c) Exercise of Option. Tenant may exercise its option
hereunder only by execution and tender to Landlord of
an executed original of the Real Estate Contract,
together with an earnest money check for $100,000.00
payable to Landlord. As specified in Section 3.02 of
the Real Estate Contract, it shall be a condition to
closing under the Real Estate Contract that Landlord
and Tenant execute and record a Reciprocal Operating
Agreement (With Easements, Covenants and
Restrictions) in the form attached as Schedule 2 to
the Real Estate Contract."
20. A new Section 16.20 is hereby added to the Lease as
follows:
"Section 16.20. Tenant's Right of First Refusal to Purchase
the Premises. Landlord hereby grants to Tenant a right of
first refusal to purchase the Premises. If during the term of
this Lease Landlord receives a bona fide offer (the "Offer")
for the purchase of its interest in the Premises (or the
Entire Tract), Landlord shall give Tenant written notice (the
"Notice") of such Offer. The Notice shall set forth the name
of the third party offeror, the price and all other terms and
conditions of the Offer. Tenant shall have the option for
thirty (30) days following the giving of the Notice to elect
to purchase the Premises (or the Entire Tract, if the offer
pertains to the Entire Tract) for the purchase price presented
in the offer and on the same terms and conditions as contained
in the Offer. If Tenant does not exercise such right of first
refusal within said thirty (30) day period, then Landlord
shall be permitted to sell the Premises (or the Entire Tract,
if applicable) to such third party offeror in accordance with
the terms of the Offer. If Tenant does not exercise such right
of first refusal, and the terms of the offer are subsequently
revised, then Landlord shall give Tenant written notice of
such revised terms, and Tenant shall have three (3) days
following receipt of such notice to elect to purchase the
Premises (or the Entire Tract, if applicable) on the revised
terms."
21. The parties hereby ratify and confirm that the Lease is in
full force and effect and is unmodified except as specifically set forth in
this Amendment.
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<PAGE> 24
CAMPR PARTNERS, LTD.
By: Sanders Partners Incorporated,
Its: General Partner
By: /s/ OFFICER OF SANDERS
PARTNERS INCORPORATED
--------------------------
Title: Vice President
-----------------------
Date: 9/14/92
------------------------
WILD OATS MARKETS, INC., successor
by merger to Wild Oats Market of
Santa Fe, Inc.
By: /s/ MICHAEL GILLILAND
--------------------------
Title: President
-----------------------
Date: 9/22/92
-----------------------
List of Exhibits:
Exhibit A-1 - Legal Description of Additional Land
Exhibit B-1 - Legal Description of the North Site
Exhibit C-1 - Preliminary Site Plan
Exhibit D-1 - Expansion Plan
Exhibit E-1 - Real Estate Contract
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<PAGE> 25
CONSENT OF GUARANTORS
The undersigned guarantors hereby acknowledge and consent to this
Amendment and agree that their guarantees of the Lease as amended by the First
Amendment, shall remain in full force and effect and are hereby ratified and
confirmed.
/s/ MICHAEL GILLILAND
------------------------
MICHAEL GILLILAND
/s/ ELIZABETH C. COOK
------------------------
ELIZABETH COOK
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<PAGE> 26
Exhibit A-1
Tract B of the Slade-Shubert Subdivision, as shown on plat filed in the
Office on plat filed in the Office of the County Clerk, Santa Fe County,
New Mexico on August 29, 1988, in Plat Book 190, page 13, as Document
No. 658,077, SAVE AND EXCEPT THE FOLLOWING:
That certain parcel of land situate within the Santa Fe Grant, Township 17
North, Range 9 East, New Mexico Principal Meridian, City of Santa Fe, Santa Fe
County, New Mexico, comprising the Northerly portion of Tract B of the
Slade-Shubert Subdivision, as shown on plat filed in the office of the County
Clerk of Santa Fe County, New Mexico on August 29, 1988, in Plat Book 190, page
13, as Document No. 658,077, more particularly described as follows:
Beginning at the Northwest corner of said Tract B, Slade-Shubert Subdivision
and the Northwest corner of the parcel herein described; Thence Easterly along
the Northerly line of said Tract B on the following three (3) courses,
S 65 degrees 28' 00" E, 104.14 feet to a point; Thence,
S 65 degrees 28' 00" E, 77.70 feet to a point; Thence,
N 89 degrees 40' 00" E, 62.30 feet to the Northeast corner of said Tract B and
the Northeast corner of the parcel herein described, a
point on the Westerly right of way line of St. Francis
Drive; Thence,
Southeasterly , 20.62 feet along said Westerly right of way line of St.
Francis Drive on the arc of a curve to the right (said
curve having a radius of 2242.00 feet and a chord which
bears SE, 20.62 feet) to a point on curve and the
Southeast corner of the parcel herein described;
Thence,
N 89 degrees 33' 02" W, 58.33 feet to a point; Thence,
S 25 degrees 07' 59" W, 27.17 feet to a point; Thence,
N 66 degrees 14' 38" W, 173.58 feet to a point; Thence,
N 60 degrees 04' 00" W, 24.00 feet to the Southwest corner of the parcel
herein described, a point on the Westerly line of said
Tract B; Thence,
N 29 degrees 56' 00" E, 43.85 feet along said Westerly line of Tract B to the
Northwest corner and point of beginning of the parcel
herein described.
Said parcel contains 0.227 acre, more or less.
<PAGE> 27
Exhibit B-1
North Site
All of Tract A1 as shown in Plat of Survey entitled "Lot Split-Tract A Slade
and Shubert Subdivision, St. Francis Drive, Santa Fe, New Mexico", prepared by
Jack G. Horne, P.E. & L.S. #889, dated November 4, 1988 and filed for record on
November 30, 1989 as Document Number 693,812, appearing in Plat Book 204 at
page 030, records of Santa Fe County, New Mexico.
AND
A certain tract of land, being Tract A-2 of the Slade Shubert Subdivision,
lying and being situate at 1096 S. St. Francis Drive, within the Santa Fe
Grant, T.17N., R.9E., N.M.P.M., City of Santa Fe, County of Santa Fe, State of
New Mexico, being more particularly described as follows, to wit:
Beginning at a point for Santa Fe Control Monument No. 58, marked by a Brass
Disk in concrete, thence N. 16 deg. 59' 07" W., a distance of 287.76 feet, to
the true point and place of beginning, the southeast corner of Tract A-2
described hereon, a capped rebar; thence S. 89 deg. 39' 00" W., a distance of
60.70 feet; thence, N. 65 deg. 28' 00" W., a distance of 181.76 feet; thence N.
29 deg. 46' 00" E., a distance of 16.86 feet; thence N. 65 deg. 57' 00" W., a
distance of 55.66 feet, the southwest corner of Tract A-2; thence N. 24 deg.
59' 00" E., a distance of 116.62 feet, the northwest corner of Tract A-2;
thence S. 65 deg. 20' 40" E., a distance of 237.39 feet, the northeast corner
of Tract A-2, a point on the west Right-of-Way of St. Francis Drive; thence
along a curve to the right through a central angle of 3 deg. 02' 47" (R=2242.00
feet; Chord S. 1 deg. 42' 10" E. - 119.19 feet) a Length of 119.20 feet, to the
true point and place of beginning.
All as shown on plat of survey entitled "PLAT OF A RE-SURVEY OF TRACT A-2 OF
THE SLADE & SHUBERT SUBD'N FOR LINDA GEIL", dated May 1991, prepared by
Richard A. Morris, Registered Professional Surveyor New Mexico No. 10277,
bearing Project No. 91-LS-33.
AND
That certain parcel of land situate within the Santa Fe Grant, Township 17
North, Range 9 East, New Mexico Principal Meridian, City of Santa Fe, Santa Fe
County, New Mexico, comprising the Northerly portion of Tract B of the
Slade-Shubert Subdivision, as shown on plat filed in the office of the County
Clerk of Santa Fe County, New Mexico on August 29, 1988, in Plat Book 190, page
13, as Document No. 658,077, more particularly described as follows:
Beginning at the Northwest corner of said Tract B, Slade-Shubert Subdivision
and the Northwest corner of the parcel herein described; Thence Easterly along
the Northerly line of said Tract B on the following three (3) courses,
S 65 degrees 28' 00" E, 104.14 feet to a point; Thence,
S 65 degrees 28' 00" E, 77.70 feet to a point; Thence,
N 89 degrees 40' 00" E, 62.30 feet to the Northeast corner of said Tract
B and the Northeast corner of the parcel herein
described, a point on the Westerly right of way
line of St. Francis Drive; Thence,
Southeasterly, 20.62 feet along said Westerly right of way line
of St. Francis Drive on the arc of a curve to
the right (said curve having a radius of 2242.00
feet and a chord which bears SE, 20.62 feet) to
a point on curve and the Southeast corner of the
parcel herein described; Thence,
N 89 degrees 33' 02" W, 58.33 feet to a point; Thence,
S 25 degrees 07' 59" W, 27.17 feet to a point; Thence,
N 66 degrees 14' 38" W, 173.58 feet to a point; Thence,
N 60 degrees 04' 00" W, 24.00 feet to the Southwest corner of the parcel
herein described, a point on the Westerly line
of said Tract B; Thence,
N 29 degrees 56' 00" E, 43.85 feet along said Westerly line of Tract B
to the Northwest corner and point of beginning
of the parcel herein described.
Said parcel contains 0.227 acre, more or less.
<PAGE> 28
EXHIBIT C-1
[MAP]
<PAGE> 29
EXHIBIT D-1
[MAP]
<PAGE> 30
DRAFT DATED 9-14-92
UNCHANGED FROM
PREVIOUS DRAFT OF
8-4-92
EXHIBIT E-1 TO FIRST AMENDMENT
REAL ESTATE CONTRACT
This Contract of Sale is made by and between CAMPR Partners, Ltd., a
Texas limited partnership (hereinafter referred to as "Seller") and Wild Oats
Markets, Inc. (hereinafter referred to as "Purchaser"), upon the terms and
conditions set forth below.
ARTICLE I
PURCHASE AND SALE
Seller hereby sells and agrees to convey, and Purchaser hereby
purchases and agrees to pay for, the tract of land containing approximately
________ acres (approximately ______________ gross square feet) located in the
City of Santa Fe, Santa Fe County, New Mexico, being more particularly
described on Schedule 1 attached hereto and incorporated herein for all
purposes (hereinafter called the "Property") together with all and singular the
rights and appurtenances pertaining to the Property, for the consideration and
subject to the terms, provisions, and conditions hereinafter set forth.
ARTICLE II
PURCHASE PRICE
AMOUNT OF PURCHASE PRICE
2.01. The purchase price for the Property (the "Purchase Price") is
$3,500,000.00, subject to adjustment as provided in Section 2.02 below, which
purchase price shall be allocated by agreement of Seller and Purchaser as
follows: building -- $2,000,000 and land -- $1,500,000.
PAYMENT OF PURCHASE PRICE
2.02. The purchase price shall be payable in cash at the Closing (as
defined in Article V below). The Property is currently being leased by
Purchaser from Seller pursuant to that certain Lease Agreement dated July 31,
1990 by and between Marianna Partners Limited, predecessor in interest to
Seller, as Landlord, and Wild Oats Market of Santa Fe, Inc., predecessor in
interest to Purchaser, as Tenant, as amended by that certain First Amendment to
Lease effective as of August 1, 1992 between Seller and Purchaser (the Lease
Agreement and First Amendment to Lease are hereinafter
<PAGE> 31
collectively referred to as the "Lease"). The Property is being purchased
pursuant to an option granted from Seller to Purchaser in Section 16.19 of the
Lease. The parties agree that the Purchase Price shall be increased to include
any Site Improvement costs incurred by Seller for which Seller has not been
reimbursed by Purchaser as of the Closing Date, as provided in Section 16.19 of
the Lease.
ARTICLE III
CONDITIONS TO SELLER'S AND PURCHASER'S OBLIGATIONS
CONDITION TO PURCHASER'S OBLIGATIONS
3.01 The obligations of Purchaser hereunder to consummate the
transactions contemplated hereby are subject to the satisfaction of the
following condition which may be waived in whole or in part in writing by
Purchaser at or prior to the Closing):
Within ten (10) days after the date hereof, Seller, at Seller's
sole cost and expense, shall furnish to the Purchaser a Commitment For Title
Insurance (the "Title Commitment"), dated not earlier than the date of this
Contract, issued by Santa Fe Abstract or any other title company in Santa Fe,
New Mexico, reasonably acceptable to Purchaser (the "Title Company") showing
Seller's title to the Property, together with legible copies of the deed which
conveyed the Property to Seller or its predecessor in interest and all items
and documents referenced in the Commitment. The Commitment shall commit the
Title Company to issue to Purchaser at the Closing an Owner's Policy of Title
Insurance (ALTA Owner's Form B, 1984) in the full amount of the Purchase Price.
Purchaser shall give Seller written notice on or before the expiration of
thirty (30) days after the date hereof that the condition of title as set forth
in the Title Commitment is or is not satisfactory, and in the event Purchaser
states that the condition is not satisfactory, Seller shall promptly undertake
to eliminate or modify all such unacceptable matters to the reasonable
satisfaction of Purchaser provided, however, Seller shall be under no
obligation to incur any costs in connection with such title cure except that
Seller shall be obligated to secure the release prior to the Closing of any
liens reflected thereon, and Seller shall be further obligated to remove any
exceptions to title that prevent or impair the development of the Property in
the manner reflected on the Preliminary Site Plan or the Expansion Plan, as
defined in the Lease. In the event that Seller fails to modify or eliminate such
unacceptable matters within sixty (60) days of the date hereof, this Contract
shall thereupon, at Purchaser's option, upon written notice to Seller within
five (5) days following the expiration of Seller's aforesaid cure period, be
null and void for all purposes and the Escrow Deposit shall be forthwith
returned by the Title Company to Purchaser. Purchaser's failure to give Seller
such written notice of such unsatisfactory condition of title and/or election to
terminate shall be deemed to be Purchaser's acceptance of the condition of
title.
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<PAGE> 32
CONDITION TO SELLER'S OBLIGATIONS
3.02. The obligations of Seller hereunder to consummate the
transactions contemplated hereby are subject to the execution by Seller and
Purchaser on or before the Closing Date of a Reciprocal Operating Agreement
(With Easements, Covenants and Restrictions) in the form of Schedule 2 attached
hereto (the "Reciprocal Operating Agreement") and incorporated herein. In the
event that Purchaser fails or refuses to execute the Reciprocal Operating
Agreement in the form attached then Seller shall have no obligation to
consummate the transactions contemplated herein, and Seller may terminate this
Contract upon written notice to Purchaser and thereafter this Contract shall be
null and void for all purposes and the Escrow Deposit shall be forthwith
returned by the Title Company to Purchaser.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS AND WARRANTIES OF SELLER
4.01. Seller makes the following representations and warranties and
agrees that Purchaser's obligations under this Contract are conditioned upon
the truth and accuracy of such representations and warranties, both as of this
date and as of the date of Closing:
(a) Seller is the owner of the Property, and there are no outstanding
loans with respect to the Property or any part thereof other than any
indebtedness which will be released at Closing.
(b) Seller has the authority to convey the Property to Purchaser
without the joinder of any other person or entity. See Attachment.
(c) Purchaser acknowledges that Seller has delivered to Purchaser the
following (hereinafter the "Existing Environmental Reports"):
i) Letter dated June 25, 1990 from Metric Corporation
Environmental Engineering and Science to Marianna Partners, Ltd.
ii) Remedial Action Report dated June 15, 1990 from Cerl,
Inc. Environmental Consultants.
iii) Notice of Remedial Action, Hydrocarbon Contaminated Soil
(Non-Spill Related) dated May 2, 1990 prepared by Cerl, Inc. Environmental
Consultants.
iv) Environmental-Soil Sampling Report dated April 4, 1990
prepared by Cerl, Inc. Environmental Consultants.
To the best knowledge and belief of Seller, the Existing Environmental
Reports provided to Purchaser constitute the complete reports related to the
property in Seller's possession.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
4.02. Purchaser makes the following representations and warranties:
(a) Purchaser has all requisite power and authority to execute and
deliver this Agreement and to carry out its obligations hereunder and the
transactions contemplated hereby.
(b) Except as specifically set forth in Section 4.01, Purchaser is
purchasing the Property, and the Property shall be conveyed and transferred to
Purchaser, "as is, where is, and with all faults" and without any warranties,
representations, or guarantees, either express or implied, of any kind,
nature, or type whatsoever from or on behalf of Seller. Except for the express
representation made in Section 4.01, Purchaser acknowledges that it has not
relied, and is not relying, on any information, document, sales brochures, or
other literature, maps or sketches,
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<PAGE> 33
projections, proforma, statements, representations, guarantees or warranties
(whether express or implied, or oral or written, or material or immaterial),
that may have been given by, or made by, or on behalf of, Seller; (ii) except
as specifically set forth in Section 4.01, Purchaser is not entitled to, and
should not rely on, the Seller or its agents as to (a) the quality, nature,
adequacy or physical condition of the Property, including, without limitation,
the structural elements, foundation, roof, appurtenances, access, landscaping,
parking facilities, or the electrical, mechanical, HVAC, plumbing, sewage or
utility systems, facilities or appliances at the Property, if any; (b) the
quality, nature, adequacy, or physical condition of soils or the existence of
ground water at the Property; (c) the existence, quality, nature, adequacy or
physical condition of any utilities serving the Property; (d) the development
potential of the Property, its habitability, merchantability or fitness,
suitability, or adequacy of the Property for any particular purpose; (e) the
zoning or other legal status of the Property; (f) the Property' or its
operations', compliance with any applicable codes, laws, regulations, statutes,
ordinances, covenants, conditions or restrictions of any governmental or
quasi-governmental entity, or any other person or entity; (g) the quality of
any labor or materials relating in any way to the Property; or (h) the
condition of title to the Property (except for the warranty of title set forth
in the deed to be delivered by Seller as described in Article V), or the
nature, status and extent of any right-of-way, lease, right of redemption,
possession, lien, encumbrance, license, reservations, covenant, condition,
restriction, or any other matter affecting title of the Property; (iii)
Purchaser has had and will have, pursuant to this Agreement, an adequate
opportunity to make such legal, factual and other inquiries and investigations
as it deems desirable or appropriate with respect to the Property. Those
inquiries or investigations of Purchaser may include, but are not limited to,
any leases and contracts pertaining to the Property, the physical components of
all portions of the Property, the condition of the Property, the existence of
any wood-destroying organisms on the Property, the state of facts that an
accurate survey and inspection would show, the present and future zoning
ordinances, resolutions, and regulations of the city, county and state where
the Property are located, and the value and marketability of the Property.
ARTICLE V
CLOSING
The closing shall be held at the offices of the Title Company on the
later of (i) the first business day following the expiration of the title
review period specified in Section 3.01 hereof and any applicable cure period
or (ii) ten (10) days following Seller's completion of construction of the Site
Improvements on the Property, in the event that Purchaser has exercised its
option to purchase the Property after Seller has commenced construction but
before completion of the Site Improvements on the Property, as
-4-
<PAGE> 34
provided in Section 16.19 of the Lease (which date is herein referred to as the
"Closing Date" or the "Closing").
(1) At the Closing Seller shall:
(a) Deliver to Purchaser a duly executed and acknowledged General
Warranty Deed conveying title in fee simple to all of the Property, free and
clear of any and all liens, encumbrances, conditions, easements, assessments,
and restrictions, except for the following:
[1] A vendor's lien to be retained in favor of any lender
providing financing to Purchaser for this transaction;
[2] The lien of any deed of trust or mortgage in favor of any
lender providing financing to Purchaser for this transaction;
[3] General real estate taxes for the year of Closing which
shall be assumed in full by Purchaser, and subsequent years not yet due and
payable;
[4] Any exceptions approved by Purchaser pursuant to Section
3.02 hereof; and
[5] Any exceptions approved by Purchaser in writing.
(b) Deliver to Purchaser an Owner's Policy of Title Insurance
(ALTA Owner's Form B, 1984) at Seller's sole expense, issued by the Title
Company in Purchaser's favor in the full amount of the Purchase Price, insuring
Purchaser's fee simple title to the Property subject only to those title
exceptions listed in Section 3.02 hereof and such other exceptions as may be
approved in writing by Purchaser.
(c) Deliver to Purchaser the duly executed Reciprocal Operating
Agreement, as required by Section 3.02 hereof.
(2) At the Closing, Purchaser shall pay the cash portion of the purchase
price and deliver to Seller the duly executed Reciprocal Operating Agreement,
as required by Section 3.02 hereof.
(3) General real estate taxes for the then current year relating to the
Property and all other operating expenses of the Property shall not be
prorated, but shall be assumed by Purchaser inasmuch as such operating expenses
are the responsibility of Purchaser under the Lease.
-5-
<PAGE> 35
ARTICLE VI
REAL ESTATE COMMISSIONS
The parties acknowledge that no brokers have been involved in this
transaction. It is agreed that if any claims for real estate brokerage fees or
commissions are ever made against Seller or Purchaser by any person, firm or
corporation in connection with this transaction, all such claims will be
handled and paid by the party whose actions or alleged commitments form the
basis of such claim, and the party whose actions or alleged commitments form
the basis of such claim will indemnify and hold harmless the other from and
against any and all such claims or demands with respect to any brokerage fees
or agents, commissions or other compensation asserted by any person, firm or
corporation in connection with this transaction.
ARTICLE VII
ESCROW DEPOSIT
For the purposes of securing the performance of Purchaser under the
terms and provisions of this Contract, Purchaser has delivered to the Title
Company, upon execution hereof, the sum of $ in cash or cash
equivalency (the "Escrow Deposit"), which shall be paid by the Title Company to
Seller in the event Purchaser breaches this Contract as provided in Article IX
hereof. The Escrow Deposit shall be placed in a daily interest-bearing
account with all interest payable to the party entitled to such Escrow Deposit
pursuant hereto. At the Closing, the Escrow Deposit and accrued interest shall
be paid over to Seller and applied to the cash portion of the purchase price,
provided, however, that in the event the Purchaser shall have given timely
written notice to the Title Company that one or more of the conditions to its
obligations set forth in Article III have not been met, or, in the opinion of
Purchaser, cannot be satisfied in the manner and as provided for in Article
III, then the Escrow Deposit together with all interest shall be forthwith
returned by the Title Company to Purchaser.
ARTICLE VIII
BREACH BY SELLER
In the event Seller shall fail to fully and timely perform any of its
obligations hereunder or shall fail to consummate the sale of the Property for
any reason, except Purchaser's default, Purchaser may receive an immediate
return of the Escrow Deposit and then, at its option,: (1) enforce specific
performance of this Contract; and/or (2) bring suit for damages against Seller.
-6-
<PAGE> 36
ARTICLE IX
BREACH BY PURCHASER
In the event Purchaser should fail to consummate the purchase of the
Property, the conditions to Purchaser's obligations set forth in Article III
having been satisfied and Purchaser being in default and Seller not being in
default hereunder, due to the difficulty of assessing Seller's actual damages
as a result of such breach by Purchaser, Seller shall have the right to receive
the Escrow Deposit from the Title Company, such sum being agreed on as
liquidated damages for the failure of Purchaser to perform the duties,
liabilities and obligations imposed upon it by the terms and provisions of this
Contract, and Seller agrees to accept and take said cash payment as its total,
reasonable damages and relief and as Seller's sole remedy hereunder in such
event.
ARTICLE X
CONDEMNATION
In the event that (i) the whole or a material part of the Property is
taken by condemnation or right of eminent domain prior to Closing, and (ii) in
Purchaser's reasonable determination, the Property is rendered unsuitable for
Purchaser's intended use, at Purchaser's option, this Contract shall terminate
and Purchaser will receive a full refund of the Escrow Deposit.
ARTICLE XI
FOREIGN PERSON FEDERAL TAX REQUIREMENT
If Seller is not a "foreign person," as defined in the Federal Foreign
Investment in Real Property Tax Act of 1980 and the 1984 Tax Reform Act as
amended (the "federal tax law"), then at the Closing Seller shall deliver to
Purchaser a certificate so stating in a form complying with the federal tax
law. If Seller is a "foreign person" or if Seller fails to deliver the
required certificate at the Closing, then in either such event the funding to
Seller at the Closing shall be adjusted to the extent required to comply with
the withholding provisions of the federal tax law; and although the amount
withheld shall still be paid at the Closing by Purchaser, it shall be retained
by a mutually acceptable escrow agent (the reasonable fees of which shall be
paid by Seller at the Closing) for delivery to the Internal Revenue Service
together with the appropriate federal tax law forwarding forms, and with copies
being provided both to Seller and Purchaser. The Title Company is hereby
approved as a mutually acceptable escrow agent in the event that withholding is
warranted in accordance with this paragraph.
-7-
<PAGE> 37
ARTICLE XII
MISCELLANEOUS
NOTICE
12.01. Any notice required or permitted to be delivered hereunder
shall be deemed received when sent by United States mail, postage prepaid,
certified mail, return receipt requested, addressed to Seller or Purchaser as
follows:
Seller: CAMPR Partners, Ltd.
c/o Sanders Partners Incorporated
1790 Commerce Park Drive
El Paso, Texas 79912
With Copy to: Scott & Hulse, P.C.
llth Floor,
Texas Commerce Bank Building
El Paso, Texas 79901
Attn: W. David Bernard
Purchaser: Wild Oats Markets, Inc.
1668 Valtec Lane
Boulder, Colorado 80301
Attn: E. Cook
-----------------
With Copy to: Bennett Bentoli
6081 S. Kearney
Englewood, Co. 80111
NEW MEXICO LAW TO APPLY
12.02. This Contract shall be construed under and in accordance with
the laws of the State of New Mexico.
PARTIES BOUND
12.03. This Contract shall be binding upon and inure to the benefit
of the parties hereto and their respective heirs, executors, administrators,
legal representatives, successors and assigns where permitted by this Contract.
LEGAL CONSTRUCTION
12.04. In case any one or more of the provisions contained in this
Contract shall for any reason be held to be invalid, illegal, or unenforceable
in any respect, such invalidity, illegality, or unenforceability shall not
affect any other provision hereof, and this Contract shall be construed as if
such invalid, illegal, or unenforceable provision had never been contained
herein.
-8-
<PAGE> 38
PRIOR AGREEMENTS SUPERSEDED
12.05. This Contract constitutes the sole and only agreement of the
parties hereto and supersedes any prior understandings or written or oral
agreements between the parties respecting the within subject matter.
TIME OF ESSENCE
12.06. Time is of the essence of this Contract. For purposes of
determining the time for performance of various obligations under this
Contract, the "date" of this Contract shall be the date this Contract is
executed by Purchaser. Should the calculation of any of the various time
periods provided for herein result in an obligation becoming due on a Saturday,
Sunday or legal holiday, then the due date of such obligation shall be delayed
until the next succeeding business day.
GENDER
12.07. Words of any gender used in this Contract shall be held and
construed to include any other gender, and words in the singular number shall
be held to include the plural, and vice versa, unless the context requires
otherwise.
ASSIGNMENT
12.08 Purchaser may assign its rights as Purchaser hereunder.
EXECUTED by Seller this day of 1992.
-------- -----------------
SELLER:
CAMPR PARTNERS, LTD.
By: Sanders Partners Incorporated
Its: General Partner
By:
-------------------------------
Title:
----------------------------
-9-
<PAGE> 39
EXECUTED by Purchaser this day of 1992.
--------- -----------------
PURCHASER:
WILD OATS MARKETS, INC.
By:
-------------------------
Title:
----------------------
The Contract, together with the Escrow Deposit described therein, has
been received by the Title Company this the day of , 1992,
and by execution hereof the Title Company hereby covenants and agrees to be
bound by the terms of the Contract.
---------------------------------
Name of Title Company
By:
------------------------------
Title:
---------------------------
SCHEDULE OF EXHIBITS:
Schedule 1 - Legal Description of the Property
Schedule 2 - Form of Reciprocal Operating Agreement
-10-
<PAGE> 40
SCHEDULE 1 TO REAL ESTATE CONTRACT
<PAGE> 41
SCHEDULE 2 TO REAL ESTATE CONTRACT
RECIPROCAL OPERATING AGREEMENT
(With Easements, Covenants and Restrictions)
This Reciprocal Operating Agreement (the "Agreement") is entered into
by and between CAMPR PARTNERS, LTD., a Texas limited partnership (hereinafter
referred to as "North Site Owner"); and WILD OATS MARKETS, INC., a Colorado
corporation (hereinafter referred to as "South Site Owner").
WHEREAS, North Site Owner is the owner of a certain tract of land
located in the City of Santa Fe, Santa Fe County, New Mexico, more fully
described on Exhibit "A" attached hereto (the "North Site");
WHEREAS, South Site Owner is the owner of a certain tract of land
located in the City of Santa Fe, Santa Fe County, New Mexico, more particularly
described on Exhibit "B" attached hereto (the "South Site");
WHEREAS, the North Site and South Site are adjacent to each other and
the North Site and South Site Owners desire to grant to each other reciprocal
and mutual rights of access for ingress, egress and parking on certain portions
of their respective tracts and desire to set out certain terms, conditions and
restrictions controlling the development and use of such tracts;
NOW, THEREFORE, North Site Owner and South Site Owner hereby adopt and
establish the following covenants and easements, which shall be applicable to
the North Site and South Site (the North Site and South Site are collectively
hereinafter referred to as the "Property"), and such parties hereby agree and
declare that the Property shall be held, transferred, improved, sold, conveyed,
used and occupied subject to the easements and restrictions described herein
which shall be (i) covenants running with and binding the Property and (ii)
binding upon and enforceable against the North Site Owner and the South Site
Owner and their respective successors and assigns, including, without
limitation, any and all subsequent owners of the Property or any portions
thereof (all such parties and their respective successors and assigns are
hereinafter collectively referred to as the "Owners" and individually referred
to as "Owner") and each and all individuals and entities by the acceptance of
title to any portion of the Property shall thereby agree and covenant to abide
by and perform the provisions and agreements contained herein.
1. SITE PLAN. Attached to this Agreement as Exhibit "C" is a
site plan (herein the "Site Plan") which illustrates the proposed future
improvements to the North Site and the existing and proposed improvements to
the South Site.
<PAGE> 42
2. NORTH SITE CONSTRUCTION. North Site Owner Agrees that the
North Site will be developed in substantial accordance with the Site Plan.
3. SOUTH SITE CONSTRUCTION. South Site Owner agrees that the
South Site will be developed in substantial accordance with the Site Plan.
4. CONSTRUCTION OF SITE IMPROVEMENTS.
[RESERVED].
5. GRANTS BY NORTH SITE OWNER. To be effective following
completion of the Site Improvements for the North Site, North Site owner hereby
grants, sells and conveys to the South Site Owner the free, continuous,
uninterrupted, nonexclusive use, right, liberty, privilege, license and
easement appurtenant to the South Site for ingress and egress of vehicular and
pedestrian traffic and parking (subject to the limitations of Paragraph 7.3) in
and on the roadways, parking areas, sidewalks, and entrances of the North Site
Shown on the Site Plan (herein the "North Site Easement").
6. GRANT BY SOUTH SITE OWNER. To be effective following
completion of the Site Improvements for the South Site, the South Site Owner
does hereby grant, sell and convey to the North Site owner the free,
continuous, uninterrupted, nonexclusive use, right, liberty, privilege, license
and easement appurtenant to the North Site for ingress and egress of vehicular
and pedestrian traffic and parking (subject to the limitations of Paragraph
7.3) in and on the roadways, parking areas, sidewalks and entrances of the
South Site shown on the Site Plan (herein the "South Site Easement").
7. FURTHER AGREEMENTS WITH RESPECT TO EASEMENTS. Each Owner, on
behalf of itself and its successors and assigns, agrees as follows:
7.1 NO BARRIERS OR INTERFERENCE. No owner shall
construct or place any fences, barriers or other obstacles which would prevent
or obstruct the passage of pedestrian or vehicular travel for the purposes
herein permitted within or across the North Site or South Site Easements
(collectively the "Easements") provided, however, the foregoing provisions
shall not prohibit a barricade erected and reasonably necessary in connection
with the construction, reconstruction, repair or maintenance of the Easements
or any buildings or other improvements (all such work to be conducted in the
most expeditious manner reasonably possible to minimize the interference with
use of the Easements and with all such work to be diligently prosecuted to
completion).
7.2 USE OF EASEMENTS. Subject to the parking limitations
of Paragraph 7.3, any Owner of the Property or any
2
<PAGE> 43
portion thereof may authorize its tenants and invitees (including, without
limitation, employees, customers, agents and invitees of such tenants) to use
the Easements herein granted to such Owner, and neither such Owner nor said
tenants and invitees shall be charged any fee for the use of such Easements.
The Easements and rights herein conveyed are private easements and are not for
the use or benefit of the general public. Nothing herein contained shall be
construed or deemed to be a dedication of any easements to, or for the use of,
the general public.
7.3. Limitations on Parking, Notwithstanding anything
herein to the contrary, no Owner shall be entitled to rely upon the parking
area located upon the other Owner(s) property for the purpose of meeting any
minimum parking requirements of applicable governmental authorities. Owners
mutually agree to use their best efforts to ensure that their respective
employees and employees of their tenants do not park on the Property.
7.4 Maintenance of Easements. All Owners shall maintain
the Easements on their respective tracts in good condition and repair, to
include, without limiting the generality of the foregoing, the following:
(i) Maintaining the surface in a level, smooth,
evenly-covered condition with the type of surfacing material originally
installed or such substitute as shall in all respects be equal in quality, use
and durability, it being agreed that any and all paved area must be constructed
of hard surface material of an asphaltic concrete or concrete-wearing surface
in accordance with good engineering practices and in a good and workmanlike
manner;
(ii) Removing all papers, debris, filth and
refuse and thoroughly sweeping the area to the extent reasonably necessary to
keep the Easements in a clean and orderly condition;
(iii) Placing, keeping in repair, and replacing any
necessary and appropriate directional signs, markers and lines as required by
any governmental entity or agency having jurisdiction over the Easements or any
portion thereof; and,
(iv) Operating, keeping in repair and replacing,
when necessary, such artificial lighting facilities as shall be reasonably
required by any governmental entity or agency having jurisdiction over the
Easements or any portion thereof.
7.5 Condemnation. Nothing contained herein shall be
construed to give any owner any interest in any award or payment made to any
other owner in connection with any exercise of eminent domain or transfer in
lieu thereof affecting said other Owner's portion of an Easement or the
Property or give the public (including any tenants or invitees of any Owner)
or any governmental entity any rights in the Easements or any portion
3
<PAGE> 44
thereof, it being agreed that in the event of any such exercise of eminent
domain or transfer in lieu thereof by any Owner of the Easement with respect to
the portion of the Property owned by such Owner, that the award attributable to
the land and improvements of such affected portion shall be payable only to the
fee owner thereof and no claim thereon shall be made by any other owner of any
other portion of the Property; provided further, however, that all such other
Owners may file collateral claims with the condemning authority over and above
the value of the land area and improvements so taken. It is further agreed that
the fee Owner of each portion of the Property so condemned shall promptly
repair and restore (if such repair and restoration shall be reasonable under
the circumstances) the remaining portion of the Easement so owned by said Owner
as nearly as practicable to the same condition immediately prior to such
condemnation or transfer.
8. LIMITATIONS ON USE. During the term of this Agreement the uses
permitted on the North Site and the South Site shall be limited as follows:
8.1 RESTRICTIONS ON SOUTH SITE. No portion of the South
Site shall be used for (a) purposes of a cocktail lounge (provided, however,
that this shall not preclude a cocktail lounge operated in conjunction and as a
part of a restaurant), bar, disco, bowling alley, pool hall, billiard parlor,
skating rink, roller rink, amusement arcade, adult book store, adult theater,
adult amusement facility, or any facility selling or displaying pornographic
materials or having such displays, secondhand store, auction house, flea
market or any use which creates a nuisance (hereinafter the "Prohibited Uses")
or (b) the operation of a drug store or a socalled prescription pharmacy or for
any purpose requiring a qualified pharmacist or other person authorized by law
to dispense medicinal drugs, directly or indirectly, for a fee or a
remuneration of any kind (hereinafter a "Drug Store Operation") (provided,
however, that this restriction shall not prohibit or restrict in any way the
sale of medicinal herbs or vitamins).
8.2 RESTRICTIONS OF NORTH SITE. No portion of the North
Site shall be used for (a) any of the Prohibited Uses or (b) the operation of a
grocery store or health food store or any other business that derives more than
fifty percent (50%) of its gross revenues from the sale of produce, meat, or
vitamins (hereinafter a "Food Store Operation").
9. ENFORCEMENT. The hereinabove stated covenants and easements
shall inure to the benefit of, be binding upon and be enforceable (specifically
including, but not limited to, the remedy of injunctive relief in the event of
breach of said covenants) by all Owners of the Property or any part thereof and
their respective successors and assigns (including specifically mortgagee's and
purchasers at any foreclosure sale or by deed in lieu thereof), except as
otherwise provided. If during the existence of this
4
<PAGE> 45
Agreement any Owner shall sell or transfer or otherwise terminate its interest
as owner of such Property, then from and after the effective date of such sale,
transfer, or termination of interest, such party shall be released and
discharged from any and all obligations, responsibilities and liabilities under
this Agreement as to the parts sold or transferred, except those obligations,
responsibilities and liabilities (if any) which have already accrued as of such
date, and any such transferee by the acceptance of the transfer of such
interest shall thereupon become subject to the covenants contained herein to
the same extent as if such transferee were originally a party hereto. No breach
of this Agreement shall entitle any Owner to cancel, rescind or otherwise
terminate this Agreement; provided, however, such limitation shall not affect
in any manner any of the rights or remedies which any owner may have hereunder
by reason of such breach.
10. ARBITRATION. Any controversy or claim between or among the
Owners relating to this Agreement, shall be determined by arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association ("AAA"). All statutes of limitations or any waivers contained
herein which would otherwise be applicable shall apply to any arbitration
proceeding. Judgment upon the award rendered may be entered in any court having
jurisdiction. If such controversy or claim is not submitted to arbitration as
provided above, but becomes the subject of a judicial action, any party may
elect to have all decisions of fact and law determined by a referee in
accordance with applicable state law. If such an election is made, the parties
shall designate to the court a referee or referees selected under the auspices
of the AAA in the same manner as arbitrators are selected in AAA-sponsored
proceedings. The referee, or presiding referee of the panel, shall be an active
attorney or retired judge. Judgment upon the award rendered shall be entered in
the court in which such proceeding was commenced. Notwithstanding anything in
this Paragraph 10 to the contrary, no provision of, or the exercise of any
rights hereunder shall limit the right of any Owner to exercise any ancillary
remedies such as injunctive relief before, during or after the pendency of any
arbitration. The institution and maintenance of an action for judicial relief
or pursuit of any ancillary remedies shall not constitute a waiver of the right
of any party, including the plaintiff, to submit the controversy or claim to
arbitration.
11. MODIFICATION. The provisions of this Agreement may be modified
from time to time or terminated at any time by the written agreement of all of
the Owners of the Property. No consent to the modification, from time to time,
or termination of any or all of the provisions of this Agreement shall ever be
required from any persons other than the Owners of said Property, and their
respective mortgagees then holding a mortgage or deed of trust lien on such
Owner's portion of the Property. No consent shall be required of any tenant as
to any portion of the Property, nor from any customer, employee, agent or
invitee of any such tenants nor
5
<PAGE> 46
shall any such tenant, customer, employee, agent or invitee have any right to
enforce any provision of this Agreement or any modification thereof.
12. TERM. The easements, restrictions, rights, terms and
provisions of this Agreement shall run with the land and bind the Owners for a
period of fifty (50) years from the date hereof. Notwithstanding the foregoing,
the restrictions against a Drug Store Operation on South Site as provided in
Paragraph 8.1 hereof shall terminate sooner if at any time following three (3)
years after the date hereof, a Drug Store Operation is not conducted on the
North Site for a period of twelve (12) consecutive months, and provided further
that the restrictions against a Food Store Operation on the North Site shall
terminate sooner if at any time following three (3) years from the date hereof,
a Food Store Operation is not conducted on the South Site for a period of
twelve (12) consecutive months.
13. TAXES. Each of the Owners shall, with regard to their
respective interest in the Property, pay or cause to be paid, prior to
delinquency, all real property taxes and assessments which are levied against
that part of the Property owned by it.
14. ESTOPPEL CERTIFICATE. Each Owner agrees to furnish a written
statement to the other or the other's prospective or existing mortgagee,
purchaser or tenant, within fifteen (15) days of any written request therefor
stating that: (a) this Agreement is then in effect (if true); (b) this
Agreement has not been modified except as specifically stated; (c) the other
Owners are not in default (or specifically state any defaults); and (d) such
other information reasonably requested relating to the status of this
Agreement. Failure to provide such a statement within said period shall be
deemed to establish the items referenced in subparagraphs (a)-(c) above.
15. GENERAL PROVISIONS.
15.1 ENTIRE UNDERSTANDING. This Agreement embodies the
entire understanding and agreement between the parties concerning the subject
matter hereof, and supersedes any and all prior negotiations, understandings,
or agreements in regard thereto. Any amendments, variations, or changes may be
effective only if approved in the manner set forth herein.
15.2 COUNTERPARTS. This Agreement may be executed in
multiple counterpart copies, each of which will be considered an original and
all of which constitute one and the same instrument.
15.3 CAPTIONS. The headings in this Agreement are solely
for convenience and will not be relied upon in construing any
6
<PAGE> 47
provisions hereof, nor are they in any way intended to describe, interpret,
define, or limit the scope, extent, or intent of this Agreement or any
provision hereof.
15.4 GENDER AND INTERPRETATION. Use of any gender in this
Agreement will be deemed to include all genders when appropriate, and use of
the singular will be deemed to include the plural when appropriate, and vice
versa in each instance.
15.5 NO PARTNERSHIP. None of the terms or provisions of
this Agreement shall be deemed to create a partnership between or among the
parties in their respective businesses or otherwise, nor shall it cause them to
be considered as joint venturers or members of joint enterprises. This
Agreement is not intended nor shall it be construed to create any third-party
beneficiary rights to, or in favor of, any person or entity who is not a party
hereto unless otherwise expressly provided herein.
15.6 APPLICABLE LAW. This Agreement has been executed and
delivered in the State of New Mexico and will be construed and interpreted
according to the laws of New Mexico. Venue for all purposes shall be proper in
Santa Fe County, New Mexico.
15.7 NOTICES. Any notice, request, or demand required or
permitted under this Agreement shall be deemed to have been duly given or made
if delivered in person or by registered or certified mail, return receipt
requested, postage prepaid, to the addresses below set forth, or such other
address as the parties may designate to each other in the foregoing manner. All
notices shall be deemed effective upon receipt, provided, any notice given by
registered or certified mail, return receipt requested, shall be deemed
received on the day first presented by the postal authorities for receipt.
15.8 SEVERABILITY. The provisions of this Agreement are
intended to be severable. If any provision hereof shall be invalid, illegal,
or unenforceable, the other provisions hereof shall in no way be impaired
thereby.
15.9 EXHIBITS. The following exhibits are attached hereto
and are incorporated in this Agreement and made a part hereof by reference:
Exhibit A -- Legal Description of North Site
Exhibit B -- Legal Description of South Site
Exhibit C -- Site Plans
15.10 WAIVER. Any past waiver as to any of the terms or
conditions of this Agreement shall not operate as a future waiver
of the same terms and conditions or prevent the future enforcement
of any of the terms and conditions hereof.
7
<PAGE> 48
15.11 ATTORNEY'S FEES. Should any litigation or arbitration
be commenced between the Owners arising out of this Agreement or the
transactions contemplated hereby, the party prevailing in such litigation or
arbitration shall be entitled, in addition to such other relief as may be
granted, to a reasonable sum for its attorney's fees in such litigation or
arbitration.
15.12 TIME OF ESSENCE. Time is of the essence in this
Agreement. In the event the date for performance of any obligation hereunder
shall fall on a weekend or any legal holiday, then that obligation shall be
performable on the next following regular business day.
NORTH SITE OWNER:
CAMPR PARTNERS, LTD.
By: SANDERS PARTNERS INCORPORATED,
Its: General Partner
By:
------------------------------
Its:
-----------------------------
Address: 1790 Commerce Park Drive
El Paso, Texas 79912
Attn: Barry Kobren
SOUTH SITE OWNER:
WILD OATS MARKETS, INC.
By:
------------------------------
Its:
-----------------------------
Address: 1668 Valtec Lane
Boulder, Colorado 80307
Attn: Michael Gilliland
8
<PAGE> 49
STATE OF )
---------------
COUNTY OF )
-------------
)
This instrument was acknowledged before me on this ______ day
of _________________, 1992, by ________________, President of Sanders Partners,
Incorporated, General Partner of CAMPR PARTNERS, LTD., a Texas limited
partnership on behalf of said limited partnership.
Notary's Official Seal:
----------------------------
NOTARY PUBLIC IN AND FOR
THE STATE OF
-----------
STATE OF )
---------------
COUNTY OF )
-------------
)
This instrument was acknowledged before me on this ____ day of
______________, 1992, by _________________, President of Wild Oats Markets,
Inc., a Colorado Corportion, on behalf of said corporation.
Notary's Official Seal:
----------------------------
NOTARY PUBLIC IN AND FOR
THE STATE OF
-----------
9
SECOND AMENDMENT TO LEASE AGREEMENT
DATED JULY 31, 1990, BY AND BETWEEN
MARIANNA PARTNERS LIMITED AND WILD
OATS MARKET OF SANTA FE, INC.
This Second Amendment to Lease Agreement (this "Amendment") is made
effective as of February 2, 1995
WHEREAS, Marianna Partners Limited, a New Mexico limited partnership,
and Wild Oats Market of Santa Fe, Inc., a Colorado corporation, executed that
certain Lease Agreement dated July 31, 1990 (the "Lease" pertaining to certain
real property and improvements located within the City of Santa Fe, Santa Fe
County, New Mexico; and
WHEREAS, CAMPR Partners, Ltd. (hereinafter referred to as "CAMPR" or
"Landlord") the successor by merger to Marianna Partners Limited (hereinafter
referred to as "Landlord") and Wild Oats Markets, Inc., a Colorado corporation
(hereinafter referred to as "Wild Oats" or "Tenant"), is the successor by
merger to Wild Oats Market of Santa Fe, Inc., executed that certain first
Amendment to Lease Agreement dated August 1, 1992; and
WHEREAS, Tenant hereby desires to construct, at Tenant's sole cost and
expense, an addition to the front of the Building in the Original Premises
(hereinafter "Expansion Space"), all as more particularly described on Exhibit
E-1, a copy of which is attached hereto and incorporated herein; and
WHEREAS, in conjunction with said proposed expansion by Tenant and as
consideration for Landlord's approval of such proposed expansion, the parties
agree to amend the Lease as hereinafter set forth.
NOW THEREFORE, it is agreed as follows:
1. The following sentence is added to the end of Section 1.02 of the
Lease:
"(f)"Expansion Space" means that space described on Exhibit E-1
attached hereto and incorporated herein."
2. Section 2.02 of the Lease is deleted in its entirety and the following
provision is substituted therefor:
"Section 2.02. Term. The term of this Lease as it pertains to the
Original Premises, the Additional Land and the Expansion Space shall
run for thirteen (13) years from and after the first day of the month
following the Site Improvement Completion Date (as defined in Section
16.17 hereof)."
<PAGE> 2
3. The parties agree that the Site Improvement Completion Date occured on
April 1, 1993.
4. Section 16.19 of the Lease is deleted in its entirety.
5. Section 16.20 of the Lease is deleted in its entirety.
6. Section 2.03 of the Lease is hereby amended by deleting the first
sentence thereof and substituting the following: "Provided that Tenant
is not in default in respect to any provision of this lease, Tenant
shall have the right to extend the term of this Lease for twelve (12)
additional periods of five (5) years each, provided, however, that
written notice is given to Landlord of such intention to extend the
Lease six (6) months prior to the applicable expiration date."
7. Section 4.03 of the Lease is deleted in its entirety.
8. The parties acknowledge that Subsection 16.17(b) of the Lease has been
fully performed and that both parties have complied with their
obligations thereunder.
9. Pursuant to Subsection 16.17(e)(i), Landlord hereby grants approval of
the plans, drawings and related documents related to the Expansion
Space indentified as pages 1 through 13 of drawings prepared by De la
torre Rainhart P.A. Architects dated November 10, 1994. Pursuant to
Subsection 16.17(e)(ii), Landlord recognizes that Tenant has not
obtained any of the reports listed in the subsection.
10. The parties hereby ratify and confirm that the Lease and First
Amendment are in full force and effect and are modified only as
specifically set forth in this Second Amendment.
CAMPR PARTNERS, LTD,
By: Sanders Partners Incorporated,
Its: General Partner
By: /s/ OFFICER OF SANDERS
PARTNERS INCORPORATED
-------------------------------
Title: Vice President
----------------------------
Date: 02/02/95
-----------------------------
<PAGE> 3
WILD OATS MARKETS, INC,
SUCCESSOR BY MERGER TO WILD OATS
MARKET OF SANTA FE, INC.
By: MICHAEL C. GILLILAND
-------------------------------
Title: VICE PRESIDENT
----------------------------
Date: 02/02/95
-----------------------------
Consent of Guarantors - The undersigned Guarantors hereby acknowledge and
consent to this Amendment and agree that the guarantee of the Lease, as amended
by the First Amendment and this Amendment shall remain in full force and effect
and are hereby ratified and confirmed.
/s/ MICHAEL GILLILAND
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Michael Gilliland
/s/ ELIZABETH COOK
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Elizabeth Cook