LEASE AGREEMENT
THIS LEASE AGREEMENT (the “Agreement”) is made and entered into between
UTAH VALLEY UNIVERSITY, a public institution of higher education located at 800 West
University Parkway in Orem, Utah, hereinafter called “Landlord” and SUBWAY REAL
ESTATE LLC., a Delaware Limited Liability Company, with its main offices located at 325 Bic
Dr., Milford, CT 06461, hereinafter called “Tenant”.
WITNESSETH:
In consideration of the mutual covenants and agreements of the parties hereinafter set
forth, it is agreed as follows:
1.
Leased Premises. Landlord herby leases approximately 590 square feet of
business space to Tenant in the Sorensen Student Center building in the Food Court Area,
located on the Utah Valley University Campus (the “Premises”) for the term and upon the rental,
conditions and covenants as herein set forth. The space is more particularly described in Exhibit
“A” attached hereto (hereinafter referred to as the “Premises”).
2.
Term. The term of Lease of the Premises of this Agreement shall commence on
August 15, 2011, (the “Effective Date”), and shall terminate at midnight on August 15, 2021
with automatic renewable terms thereafter of 60 months each, unless either party provides
written notice, at least 90 days prior to the end of the existing term of the lease, that it will not
renew the lease and that the lease will be cancelled at the end of the then existing term.
3.
Utilities to Premises. The Landlord shall deliver the premises to the Tenant as is
with 200 amp electrical capacity and water and plumbing stubbed to the space. Tenant agrees
that any remaining costs will be paid by Tenant. Landlord will pay for all utilities except for
telecommunication lines -- telephone, fax line, cash register lines, etc. that will be paid by
Tenant.
4.1
Rent. Tenant agrees to pay to Landlord, at the address herein specified or at such
other place as Landlord may designate in writing, One Thousand Thirty Five Dollars ($1,035) a
month (equal to $20.00 per square feet rent, plus $1.05 per square feet common area fee, per
year) plus 2% of the monthly Gross Sales, (hereinafter referred to as “Rent”). Tenant agrees to
an increase of 10% in monthly rent, excluding % of monthly Gross Sales, at the beginning of the
sixth year and at each (five year) option period thereafter.
Each calendar year or fraction thereof shall be considered as an independent accounting
period for the purpose of computing the amount of Rent, if any. Said Rent shall be payable
monthly, on or before the 10th day of the following month. The term “Gross Sales” as used in
this lease shall include all sales made by, and all cash and credit card revenue of Tenant in, upon
or from the Premises, less customer returns, discounts, refunds, and coupons.
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4.2
Audit Rights. Tenant shall maintain complete and accurate accounting records,
books, documents and other evidence pertaining to the services performed and obligations
required under this Agreement for at least five years from the date such record is made or
recreated. As allowed by applicable law and upon reasonable notice of at least two business
days, UVU will have access to and the right to audit, at its own expense, any such records,
books, documents, or other evident of the Tenant pertaining to this Agreement. In the event an
audit results in more than a ten (10%) increase of any one payment, as set forth in this Section to
UVU, the cost of the audit shall be paid by the Tenant.
5.1
Authorized Uses. Tenant shall use the Premises for the purpose of the sale of
Subway Sandwiches and other Subway products and for no other purpose without having first
obtained the written consent of Landlord. Such use shall be subject to restrictions of applicable
law. Provided Tenant is open and operating and is not in default under the terms and conditions
of this Lease, Landlord agrees that the Landlord will not lease space to another tenant on
Landlord’s campus whose primary business is to sell “Sub Sandwiches”.
5.2
Licenses and Permits. – Tenant will be responsible to obtain all business licenses,
health permits, and employee food handlers’ permits.
5.3
Restrictions. – Tenant shall conduct his business in compliance with the
Landlord’s Beverage Agreement with Pepsi, a copy of which is available upon request to the
Tenant. The Landlord will provide common area Pepsi drink machines. Tenant will sell a cup
for beverage purchase to be used at the common area Pepsi drink machines. Subway will keep
track of cup size usage to report to University Dining Services and reimburse Dining Services for
the cost of poured Pepsi syrup. In the event Tenant desires to sell bottle, can, or other fountain
beverage products, Tenant shall purchase from Pepsi all of their requirements for such products.
Tenant agrees that during the Term and any Extensions, they will hire UVU students, with the
exception of management, to work in the facility.
6.
Prohibited Uses. Tenant will not keep, use or sell, or allow to be kept, used or sold
in or about the Premises, any article or material which is prohibited by law, UVU policies, or
which would render the fire insurance policies in force with respect to the premises void or
voidable.
7.
Repair and Care of Premises by Tenant. Tenant will not commit any waste of the
Premises, nor shall Tenant use or permit the use of the Premises in violation of any present or
future law of the United States or of the State of Utah, or in violation of any municipal ordinance
or regulation applicable thereto. Tenant holds sole responsibility for repair, cleaning, and
maintenance of their leased space. UVU shall repair, clean, and maintain the remainder of the
Premises, except for the Tenant’s provided furniture and fixtures.
8.
Assignment and Subletting. The Tenant shall not transfer, assign or sublet this
Lease, or the Tenant’s interest in and to the Premises, without first procuring the written consent
of the Landlord. Any attempted transfer, assignment, or subletting without the Landlord’s written
consent shall be void and confer no rights upon any third person. Notwithstanding any other
provision herein to the contrary, Tenant may, without Landlord’s consent (but subject to
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providing Landlord with written notice thereof), at any time, assign this Lease or sublease the
whole or any part of the Premises to, (the “Franchisor”), or any successor, subsidiary or affiliate
of the Franchisor, so long as the Franchisor (or any successor, subsidiary or affiliate of
Franchisor) has equal or greater financial ability to perform Tenant’s obligation under the Lease
as Tenant, provided that they continue Subway signage and products.
9.
Damage or Destruction. If the Premises or any part thereof shall be damaged or
destroyed by fire or other casualty, Landlord shall promptly repair all such damage and restore
the Building without expense to Tenant, subject to delays due to adjustment of insurance claims,
strikes and other causes beyond Landlord’s control. If such damage or destruction shall render
the Premises untenantable in whole or in part, the Rent shall be abated wholly or proportionately
as the case may be until the damage shall be repaired and the Premises restored. If the damage or
destruction shall be so extensive as to require the substantial rebuilding (i.e., expenditure of
thirty percent (30%) or more of replacement cost) of the Premises, Landlord may elect to
terminate this lease by written notice to Tenant given within 60 days after the occurrence of such
damage or destruction. If such damage or destruction cannot be repaired and restored within 150
days from date of destruction, Tenant shall have the right to terminate this lease upon written
notice given within 60 days following such date of destruction.
10.
Insurance. Tenant shall procure and keep in force:
(a)
Workers’ Compensation. --Workers’ Compensation Insurance covering all
employees meeting statutory limits and in compliance with all applicable State of Utah and
federal laws. Tenant shall require any contractor of Tenant performing work within the Premises
to maintain worker’s compensation or similar insurance required by law.
(b)
Tenant’s Property. --Fire and extended coverage insurance insuring
against loss of, or damage to Tenant’s leased space, trade fixtures, equipment, inventory and
contents, responsible insurance company or companies qualified to do business in the State of
Utah and such insurance shall be in an amount equal to the value of the Tenant’s property.
(c)
Commercial General Liability. Commercial general liability insurance
covering Tenant against death, bodily or personal injury or property damage in the combined
single limit amount of at least One Million Dollars ($1,000,000) per occurrence, Two Million
aggregate ($2,000,000), with Five Thousand Dollars ($5,000) medical expense for any one
person. Landlord shall be listed as an additional insured on the policy. Such insurance coverage
shall include a contractual liability endorsement covering the indemnity for death, bodily injury
to persons and damage to property and a personal injury endorsement covering such wrongful
acts as false arrest, false imprisonment, malicious prosecution and libel and slander. Tenant shall
require any contactor of Tenant to maintain comprehensive general liability insurance including
contractor’s liability covering with broad form property damage endorsement. Certificates of
insurance with original endorsement evidencing the coverage required by this section and the
form specified shall be provided to UVU prior to occupancy.
11.
Signage. – The location, design, and content of any signage used in the Premises
shall be subject to the approval of UVU, which approval shall not be unreasonably withheld or
delayed. The signage as set for on Exhibit B is hereby approved.
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12.
Quiet Enjoyment. If and so long as the Tenant pays the Rent reserved by this
Lease and performs and observes all the covenants and provisions hereof, the Tenant shall
quietly enjoy the Premises, subject however, to the terms of this Lease and the Landlord will
warrant and defend the Tenant in the enjoyment and peaceful possession of the Premises
throughout the term of this Lease.
13.
Default. If Tenant shall default in the fulfillment of any of the covenants and
conditions hereof, except default in payment of Rent, Landlord may, at its option, after 30 days
prior written notice to Tenant, make performance for Tenant and for that purpose advance such
amounts as may be necessary. Any amounts so advanced or any expense incurred or sum of
money paid by Landlord by reason of the failure of Tenant to comply with any covenant,
agreement, obligation or provisions of this Lease or in defending any action to which Landlord
may be subject by reason of any such failure or any reason of this Lease shall be deemed to be
additional rent for the Premises and shall be due and payable to Landlord on demand.
If Tenant shall default in fulfillment of any of the covenants or conditions of this
Lease (other than the covenants for the payment of Rent or other amounts) and any such default
shall continue for a period of 30 days after notice, then Landlord may, at its option, terminate this
Lease by giving Tenant notice of such termination and, thereupon, this Lease shall expire as fully
and completely as if that day were the date definitely fixed for the expiration of the term of this
Lease and Tenant shall then quit and surrender the Premises. If such additional time shall be
granted as may be necessary, provided Tenant takes immediate action on receipt of the notice
and proceeds diligently to remedy the default.
14.
Termination. If Tenant shall: (i) default in the payment of the Rent reserved
hereunder, or any part thereof, or in making any other payment therein provided for, and any
such default shall continue for a period of 15 days after the date when payable; (ii) abandon or
vacate the Premises or any part thereof; (iii) be dispossessed there from by or under any authority
other than Landlord; (iv) file a voluntary petition in bankruptcy; (v) be subjected to any petition
to institute any involuntary proceeding under any insolvency or bankruptcy act, which condition
is not abated or discharged by Tenant within 60 days; (vi) admit in writing its inability to pay its
obligations generally as they become due; (vii) if the leasehold estate created hereby shall be
taken on execution or by any process of law and not charged or redeemed by Tenant within 60
days; (viii) have legitimate, yet serious, major irreconcilable disputes with Landlord that remains
unresolved for more than 60 days, (ix) or have any serious misconduct by Tenant, its employees,
or vendors that, in the sole discretion of the Landlord, is detrimental to the UVU community and
has not been effectively addressed by the Tenant; then Landlord may terminate this Lease by
written notice to Tenant. In the event of such termination, Tenant agrees to immediately
surrender possession of the Premises. Such termination shall not relieve Tenant of any obligation
hereunder which has accrued prior to the date of such termination.
15.
Failure to Perform Covenant. Any failure on the part of either party to this lease to
perform any obligation hereunder, and any delay in doing any act required hereby shall be
excused if such failure or delay is caused by any strike, lockout, governmental restriction or any
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other similar cause beyond the control of the party so failing to perform, to the extent and for the
period that such cause continues, save and except that provisions of this paragraph shall not
excuse a nonpayment of Rent or other sums on due date.
16.
Liens. Tenant agrees not to permit any lien for moneys owing by Tenant to be
placed against the Premises.
17.
Counterparts. This Lease may be executed in any number of counterparts, each of
which when executed and delivered shall be deemed an original and all of which together shall
constitute one and the same instrument.
18.
Notices. Any notice required or permitted to be given hereunder shall be deemed
sufficient, if given by a communication in writing, by United States mail, postage prepaid, and
addressed as follows:
If to the Landlord at the following address:
Utah Valley University
Val L. Peterson
Vice President for Administration
BA 218d, Mail Stop 196
Utah Valley University
800 West University Parkway
Orem, UT 84058-5999
If to Tenant at the following address:
Subway Real Estate, LLC.
c/o
325 Bic Drive
Milford, CT 06461
19.
Rights of Successors and Assigns. The covenants and agreements contained in
the within Lease shall apply to, inure to the benefit of, and be binding upon the parties hereto and
upon their respective successors in interest and legal representatives, except as expressly
otherwise provided hereinbefore.
20.
Surrender of Premises. At the expiration of this Lease, Tenant shall surrender the
Premises in the same condition as existed on the commencement date of this Lease, reasonable
wear and tear excepted. Before surrendering the Premises, Tenant shall remove all of Tenant’s
personal property, kiosk, equipment and trade, and shall repair any damage caused by such
property of the removal thereof and shall leave the leased space in a clean and orderly condition.
If Tenant fails to remove its property within 30 days after the expiration date of this Lease,
Landlord may either (i) deem such to be abandoned in which case it shall become the property of
Landlord or (ii) remove and dispose of such at Tenant’s expense.
21.
Indemnification and Hold Harmless. The Tenant shall defend, indemnify, and
hold harmless UVU, its trustees, officers, employees, agents, students, faculty members, and
contractors from and against any and all claims, demands, and causes of action and expense
associate with same, including attorney fees, asserted against UVU and by any third party which
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arises out of any negligent act, activity, omission, or violation of any applicable law by the
Tenants, its assigns, subleases, agents, officers, employees, and/or contactors. The forgoing
notwithstanding, Tenant shall not be liable for any damages due to negligent or unintended acts
of UVU, its agents, contractors, employees or officers which are committed in the performance
by UVU of any work or activity at the Premises.
22.
Attorneys’ Fees. In the event of default by either party under this Lease, then the
party at fault shall pay all of the costs and expenses incurred by the other party in enforcing its
rights under this Agreement, including reasonable attorney’s fees, whether before or after suit
and including all such costs and expenses on any appeal.
23.
Relationship. It is agreed that nothing contained in this Lease shall be deemed or
construed as creating a partnership or joint venture between Landlord and Tenant or between
Landlord and any other party, or cause Landlord to be responsible in any way for the debts or
obligations of Tenant, or any other party.
24.
Governing Law. This Lease shall be deemed to have been executed in Utah, and
the laws of the State of Utah shall govern the validity, performance and enforcement of any
obligation contained.
IN WITNESS WHEREOF, the parties hereto caused there presents to be executed as of
the day and year first above written.
LANDLORD:
TENANT:
UTAH VALLEY UNIVERSITY
SUBWAY REAL ESTATE LLC.
By _________________________
Its ________________________
By _________________________
Its ________________________
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