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LEASE AGREEMENT

Lease Agreement

LEASE AGREEMENT | Document Parties: BOB O?LEARY HEALTH FOOD DISTRIBUTOR CO., INC., You are currently viewing:
This Lease Agreement involves

BOB O?LEARY HEALTH FOOD DISTRIBUTOR CO., INC.,

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Title: LEASE AGREEMENT
Governing Law: Pennsylvania     Date: 7/14/2005

LEASE AGREEMENT, Parties: bob o?leary health food distributor co.  inc.
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Exhibit 10.20

 

LEASE AGREEMENT

 

THIS LEASE AGREEMENT (this “Lease”) is made and entered into as of this 1st day of October, 2004, at Scranton, Pennsylvania, by and between ROBERT O’LEARY and LINDA O’LEARY, of P.O. Box 132, Scranton, Pennsylvania 18504, hereinafter called “Lessor” and BOB O’LEARY HEALTH FOOD DISTRIBUTOR CO., INC., a Pennsylvania corporation with its principal place of business at 701 North Keyser Avenue, Scranton, Pennsylvania 18504, hereinafter called “Lessee”.

 

ARTICLE 1

 

DEMISE, DESCRIPTION, USE, TERM AND RENT

 

Lessor hereby exclusively leases to Lessee and Lessee hereby leases from Lessor that certain property hereinafter called the “Leased Premises” situated in Scranton, Lackawanna County, Pennsylvania and more fully described in the legal description and plot plan attached hereto, made part hereof, and identified as Exhibit “A”, including all of the improvements now or hereafter erected thereon (the “Leased Premises”) for a term commencing on the date hereof and extending for a period of ten (10) years hereafter (the “Initial Term”) with the Lessee having the Lessee’s option to renew or extend as herein set forth. The said Leased Premises will be used by the Lessee for its nutritional supplements business and uses related thereto and/or any other lawful use. Lessor represents and warrants that the Leased Premises constitute all of the property and improvements as used by Lessee in the operation of its business prior to the date of this Lease Agreement.

 


ARTICLE 2

 

RENT

 

Rent. Lessee agrees to and shall pay Lessor at Scranton, Pennsylvania, or at such other place as the Lessor shall designate from time to time in writing provided by Lessor to Lessee in the manner set forth herein for the providing of notices, as rent for the Leased Premises (the “Rent”), the following:

 

For the first twelve (12) months of the Initial Term, the minimum annual sum of $90,000 payable without setoff or deduction in equal monthly installments of $7,500 each, in advance, on the first day of each calendar month. For each subsequent twelve-month period during the Term (as hereinafter defined) the rent shall be increased by a sum equal to the percentage increase in the Consumer Price Index from the first day of the preceding term of the Lease to the first day of the next year of the Lease so that there will be an annual increase (but no decrease) in the rent to be paid by Lessee hereunder. The Consumer Price Index shall, whenever used in this Lease, mean the Consumer Price Index for all Urban Consumers - All Cities Average (1982-84 = 100) published by the Bureau of Labor Statistics of the U.S. Department of Labor. Lessor shall provide written notice, including a detail of such calculation, to Lessee of any change in rent pursuant to this Article 2 as soon as Lessor can calculate the increase in rent according to the formula.

 

Effect of Default in Rent and Other Payments. If Lessee fails to make a payment of any installment of Rent hereunder within ten (10) days of the due date, such installment

 

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thereafter shall bear interest at the rate of eight (8%) percent per annum from the date it is due until actually paid. In like manner, all other obligations, benefits and reasonable monies which are actually due to Lessor from Lessee under the terms hereof, or which are actually and reasonably paid by Lessor because of Lessee’s Default (as hereinafter defined), shall bear interest at the rate of eight (8%) percent per annum from the due date until paid or, in the case of sums paid by Lessor because of Lessee’s Default, from the date such payments are actually (i.e. not on the date an obligation is incurred) made by Lessor until the date Lessor is reimbursed by Lessee therefor.

 

ARTICLE 3

 

TAXES AND ASSESSMENTS

 

The Lessor shall pay all real estate taxes assessed against the said Leased Premises upon receipt of the said tax bill prior to the expiration of any discount period. The Lessor should be responsible for that portion of the assessed real estate taxes which is equivalent to the real estate taxes assessed against the Leased Premises for the year 2004 (the “Base Year”), and the Lessee shall reimburse Lessor for such real estate taxes assessed each year in excess of the Base Year amount and attributable to Lessee’s activities of the Leased Premises and/or any improvements thereon made by or at the direction of Lessee within thirty (30) days following receipt of the tax bill and notice letter from the Lessor showing the amount due from the Lessee. The Lessee shall have the right to appeal the real estate tax assessment applicable to the Leased Premises at Lessee’s sole expense and Lessor shall

 

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cooperate with the Lessee to the extent required or desired by Lessee to perfect and pursue a real estate tax assessment appeal. Any reduction or refund in the assessment as a result of such appeal shall be promptly remitted to the Lessee in proportion to the percentage of the tax bill that is the responsibility of the Lessee.

 

ARTICLE 4

 

INSURANCE

 

The parties agree to and shall secure from a good and responsible company or companies of their own choosing doing insurance business in the Commonwealth of Pennsylvania with an A or best rating of at least AA and maintain during the Term the following coverage:

 

 

(a)

Lessor shall maintain at their expense fire and extended coverage insurance in an amount not less than 100% of the full replacement value of the building and other improvements on the Leased Premises, provided that insurance in that percentage can be obtained and, if not, to the highest percentage that can be obtained less than the said 100%.

 

 

(b)

Lessee shall maintain public liability insurance in the minimum amount of $1,000,000 for the loss from an accident resulting in bodily

 

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injury to or death of persons, and $500,000 for loss from an accident resulting in damage to or destruction of property.

 

 

(c)

Lessee shall maintain at its expense fire and extended coverage insurance on Lessee’s fixtures, machinery, equipment, goods, wares and merchandise in or on the Leased Premises.

 

Each of the parties to this Lease shall list the other and the other’s employees, contractors and agents as additional insureds on all such insurance policies.

 

There shall be an equitable abatement of rent during the period of repair and rebuilding unless the Lessee maintains business interruption insurance in which case the Rent shall be paid in full.

 

Subrogation Waiver . Lessor and Lessee agree that, in the event of loss due to any of the perils for which they have agreed to provide insurance, each party shall look solely to its insurance for recovery. Lessor and Lessee hereby grant to each other, on behalf of any insurer providing insurance to either of them with respect to the demised premises, a waiver of any right of subrogation which any insurer of one party may acquire against the other by virtue of payment of any loss under such insurance unless the waiver cannot be obtained at regular rates.

 

Proof of Coverage . Each party shall give the other written notices that it has obtained the necessary coverage, together with a copy of the declaration page of the

 

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appropriate policies. All such policies shall be written so as to name the other party as additional insured.

 

Failure to Secure . If the required party at any time during the Term should fail to secure or maintain the foregoing insurance, the other party may, but shall not be required to, obtain such insurance in the defaulting party’s name or as agent of the defaulting party and shall be reimbursed by the defaulting party for the actual cost of the insurance premiums. The defaulting party shall pay the other party interest on paid insurance premiums at the rate of eight (8%) percent per annum computed from the date written notice is received that the premiums have been paid.

 

Fire and Casualty Damage . If the building or other improvements on the Leased Premises should be damaged or destroyed by fire, flood or other casualty, Lessee shall give written notice thereof to Lessor as soon as is reasonably practicable. The building insurance proceeds received by Lessor under its insurance policies shall be used by Lessor to repair and reconstruct the Leased Premises as soon as possible. If the repair and reconstruction of the Leased Premises are, in Lessee’s reasonable judgment, likely to take more than ninety (90) days, then Lessee may terminate the Lease upon written notice to Lessor within thirty (30) days of the casualty. If Lessee does not terminate this Lease, the Lessor shall promptly repair and reconstruct the Leased Premises.

 

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ARTICLE 5

 

UTILITIES

 

Lessee shall during the Term pay all charges for telephone, gas, electricity, sewage, and water used in or on the Leased Premises and for the removal of rubbish therefrom and shall hold Lessor harmless from any liability resulting from the interruption of such services, except to the extent caused by the negligence or misconduct of Lessor, its employees, contractors and/or agents. Such payments shall be made as they become due.

 

ARTICLE 6

 

WASTE AND NUISANCE

 

Lessee shall not commit, or suffer to be committed, any waste on the Leased Premises, nor shall it maintain, commit, or permit the maintenance or commission of any nuisance on the Leased Premises or use the Leased Premises for any unlawful purpose.

 

ARTICLE 7

 

REPAIRS

 

Lessee’s Duty to Repair and Maintain . Lessee agrees to keep the Leased Premises in as good order and condition as the same shall exist on the date hereof, reasonable wear and tear and damage by accident, fire, or other casualty. Lessee further agrees to keep the Leased Premises clean, and except as specifically set forth herein for “major replacements” that are the responsibility of the Lessor, to repair or replace all broken or damaged doors, windows, plumbing fixtures and pipes, floors, stairways, railings, or other portions of the Leased Premises. Lessee also agrees to maintain the curbs and pavements of the Leased Premises, together with facilities appurtenant thereto, including entryways and awnings.

 

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Lessee shall keep the said pavements and appurtenances free of ice and snow and trash and expressly agrees to assume sole liability for accidents alleged to have been caused by their defective condition.

 

Lessor’s Duty . The Lessor shall be responsible only for major replacements to the building and with all other maintenance and repairs to be the sole responsibility of the Lessee. For purposes of this Lease, major replacements shall be defined as (i) repairs to the roof (including any necessary patching of the roof), floors or walls of the building, and (ii) the replacement of any system such as plumbing, HVAC, mechanical, light or electrical that will cost in excess of $5,000 per expense based on the receipt of three estimates from the Lessee which shall be reviewed by the Lessor and with the Lessor to have the right to obtain additional estimates at its sole cost and expense for the replacement but in any event, Lessor shall commence such major replacements within fifteen (15) days of written demand by Lessee, if possible, or as soon thereafter as reasonably possible after the costs are agreed upon.

 

Lessor hereby represents and warrants to Lessee that as of the commencement of the Lease term the roof is water-tight, the floors and walls are structurally sound and the HVAC, electrical, mechanical, plumbing and lighting systems are in working order and condition.

 

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Lessee’s Duties . In addition to the other provisions hereof, the Lessee represents and agrees that it will do the following:

 

 

(a)

keep the Leased Premises as clean and sanitary as the condition of the Leased Premises permits;

 

 

(b)

dispose from the Leased Premises all rubbish, garbage and other waste, in a clean and sanitary manner;

 

 

(c)

properly use and operate all electrical, gas and plumbing fixtures, and keep them clean and sanitary;

 

 

(d)

except as permitted under Article 8, not permit any person on the premises, with its permission, to willfully or wantonly destroy, deface, damage, impair or remove any part of the Leased Premises or the facilities, equipment or appurtenances thereto;

 

 

(e)

reasonably maintain the landscaping and grounds surrounding the building as well as the parking areas as has been done in the past.

 

ARTICLE 8

 

ALTERATIONS, IMPROVEMENTS AND FIXTURES

 

Lessee shall have the right to improve, add to, or alter the Leased Premises and to install fixtures thereon at its sole and absolute discretion; provided, however, that it shall not remove any such improvements, additions, alterations or fixtures (except removable trade fixtures) without the prior written consent of Lessor, and provided further, that on expiration or sooner termination of this Lease, all improvements, including fixtures and any addition, alteration, or repair to the Leased Premises placed on or made to the Leased

 

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Premises by Lessee during the Term, hereof, shall revert to or become the absolute property of Lessor, free and clear of any and all claims against them by Lessee or any third person, and Lessee hereby agrees to hold Lessor harmless from any claims that may be made against such improvements by any third person and which may arise during the Term.

 

ARTICLE 9

 

QUIET POSSESSION

 

Covenant of Quiet Possession . Lessor shall, on the date hereof place Lessee in quiet possession of the Leased Premises and shall secure Lessee in the quiet possession thereof against all persons claiming the same during the entire Term and any extensions thereof. Lessor warrants that the Leased Premises may be used for a nutritional supplements business and related uses under all applicable zoning or land use laws and any private restrictions affecting the Leased Premises.

 

Subordination . This Lease and any extensions of the term hereof shall be subordinate, at the option of the Lessor, to any and all mortgages and/or other liquidated liens given by Lessor, provided the holder thereof agrees in a prior writing reasonably satisfactory to Lessee and Lessee’s counsel not to disturb Lessee’s pos


 
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