RETAIL LEASE AGREEMENT (TRIPLE NET)
Date of Agreement: June 30, 2011
1. PARTIES. This Agreement is between Retail Store 1001 a/an California Limited Liability
Company (“Tenant”) and 123 Paperless Shops, a/an California Corporation (“Landlord”). The
undersigned are authorized representatives of Tenant and Landlord.
2. PREMISES. Subject to the terms and conditions in this Agreement, Landlord leases to Tenant,
and Tenant leases from Landlord, 123 Palm Tree, 101, Los Angeles, CA 90017 (“Premises”),
consisting of approximately 10000 square feet. The Premises are located in the shopping center
commonly known as Retail Shops (“Center”).
3. AGREEMENT TERM. The term of the Agreement begins on 07-01-2011, and ends at 11:59 p.m.
on 06-30-2015 (“Agreement Term”). If Tenant vacates before the Agreement Term ends, Tenant
shall be liable for the balance of the rent for the remainder of the Agreement Term.
4. RENEWAL TERM. If Tenant is not in default under this Agreement, Tenant shall have the option
to renew this Agreement for 1 extended term(s) of 3 year(s) (“Renewal Term”). If Tenant
chooses to exercise this renewal option, Tenant shall give Landlord written notice of Tenant’s
intention to renew at least 90 days prior to the expiration of the initial Agreement Term. The
Renewal Term shall continue upon the same terms and conditions in this Agreement, except the
annual Base Rent for the first year of the Renewal Term shall be $165000.
5. BASE RENT.
A. For the first year of this Agreement Term, Tenant shall pay to Landlord an annual base
rent of $150000, payable in 12 equal installments of $12500 per month (“Base Rent”),
due to Landlord in full on the first business day of each month. After the first year of the
Agreement Term, the annual Base Rent shall increase by 3% each year. The 3%
increase shall be calculated using the previous year’s base rent. Tenant shall continue to
pay the annual base rent in 12 equal installments on the first business day of each month
throughout the term of this Agreement.
B. Tenant shall pay rent through the LeaseRunner Tenant Payment Center, with all ACH
fees paid by 123 Paperless Shops, a/an California Corporation.
6. PRORATION OF FIRST MONTH’S BASE RENT. If applicable, for the period from 07-01-2011
through the end of that month, Tenant shall pay to Landlord the pro-rated monthly Base Rent of
$n/a.
7. PERCENTAGE RENT. In addition to Base Rent, Tenant also shall pay to Landlord a rent
amount of 2% of all gross sales in excess of annual sales above $500000 (“Percentage Rent”).
Once Tenant’s gross sales exceed $500000, Tenant shall include the Percentage Rent along
with Tenant’s next monthly payment of Base Rent. Tenant shall provide Landlord with a
statement of Tenant’s gross sales year-to-date within 10 days after the end of each calendar
month. Within 30 days following the end of a calendar year, Tenant shall provide Landlord with
financial statements prepared by a certified public accountant showing Tenant’s month-by-month
gross sales from the previous calendar year.
8. FINANCIAL RECORDS. Tenant shall allow Landlord reasonable access to Tenant’s financial
records for Landlord to verify Percentage Rent. Landlord’s verification of Tenant’s Percentage
Rent shall be done at Landlord’s expense.
9. RADIUS RESTRICTION. Under Paragraph 7, Tenant shall be responsible for paying Percentage
Rent to Landlord, based on Tenant’s gross sales. Accordingly, so as not to dilute Tenant’s gross
sales at the Premises, Tenant shall not open another store of a similar kind within 5 miles of the
Center without the prior written consent of Landlord.
10. RENT CHANGES. Landlord may change the rental amount or other Agreement terms
subsequent to the Agreement Term by providing written notice to Tenant 30 days prior to the
end of the Agreement Term. If Tenant becomes a holdover tenant or a month-to-month tenant,
Landlord may change the rental amount or contract terms by providing written notice to Tenant
at least 30 days prior to the end of such month-to-month tenancy.
11. SECURITY DEPOSIT. Tenant has deposited with Landlord the amount of $10000 as security
deposit against any breach of this Agreement by Tenant including but not limited to: damage to
the Premises or Center, except for ordinary wear and tear; abandonment of the Premises;
nonpayment of rent; late charges; and attorney’s fees. Tenant may not apply the security deposit
to the last month’s rent or any other charges. Within the maximum time allowed under applicable
state law, Landlord shall return Tenant’s security deposit with an itemized security deposit
settlement statement listing any deductions.
12. CHARGES AND FEES. If Tenant fails to pay the rent in full by the first business day of the
month, Tenant shall pay Landlord a late charge of $200. If any payment offered by Tenant to
Landlord for rent or any other amount due under this Agreement is returned for lack of sufficient
funds, a stop-payment, or any other reason, Tenant shall pay Landlord an insufficient funds fee
of $50 plus late charges until Landlord receives acceptable payment. Landlord and Tenant agree
that the charges and fees are a reasonable estimate of the administrative costs incurred by
Landlord. Landlord does not waive the right to insist on payment of the rent in full on the date it is
due.
13. OPERATING EXPENSES.
A. Landlord and Tenant intend for this Agreement to be a true triple net lease. All costs and
expenses associated with operating, servicing, managing, maintaining and repairing the
Center (“Operating Expenses”) shall be estimated in advance for each calendar year by
Landlord. The estimated annual Operating Expenses then shall be divided proportionally
amongst all of the tenants of the Center, based on square footage. For purposes of this
paragraph, Tenant’s proportionate share is 9.52% (“Proportionate Share”). Except where
otherwise indicated, Tenant shall pay its Proportionate Share of the estimated annual
Operating Expenses in 12 equal monthly installments, payable at the same time as Base
Rent, under the same terms and conditions of Paragraph 5. Tenant’s monthly payments
for Operating Expenses shall be pro-rated accordingly for the period between 07-01-2011
and December 31 of that year.
B. Within 90 days following the end of the calendar year, Landlord shall give Tenant a
written statement itemizing the actual Operating Expenses of the previous year. If there is
a discrepancy between the estimated Operating Expenses and the actual Operating
Expenses, Tenant either shall (i) be credited for any excess payment, or (ii) pay any
deficiency. Such credit or additional payment shall be reflected in Tenant’s next monthly
rent payment.
C. Operating Expenses include but are not limited to the following:
i. Taxes and Other Assessments. Tenant shall pay its Proportionate Share of all
taxes and other assessments against the Center, including but not limited to real
estate and personal property taxes (excluding the personal property of Landlord).
ii. Utilities and Common Area Maintenance. Tenant shall pay its Proportionate Share
of all shared utilities supplying the Center. Tenant shall be solely responsible for
any utilities exclusively provided to Tenant and the Premises. Tenant shall pay its
Proportionate Share of all maintenance and repair services for common areas of
the Center including but not limited to interior and exterior repair, janitorial service,
security service, elevator maintenance, and grounds maintenance.
iii. Insurance. Tenant shall pay its Proportionate Share of Landlord’s insurance policy
premiums for the Center, including but not limited to fire and hazard insurance.
Landlord’s insurance shall not cover Tenant’s personal property. Tenant’s
obligation under this subsection is in addition to Tenant’s insurance obligation set
forth in Paragraph 20.
14. PROMOTIONAL FUND. Tenant shall pay to Landlord an annual amount of $2400, payable in 12
equal installments of $200 per month for the Center’s marketing, advertising, and promotional
activities (“Promotional Fund Fee”). Such Promotional Fund Fee shall be payable to Landlord at
the same time as Base Rent and Operating Expenses, under the same terms and conditions of
Paragraph 5 .
15. NOTICE TO QUIT AND HOLDOVER. At least 30 days prior to the expiration of the Agreement
Term, Tenant shall provide Landlord with written notice of Tenant’s intention to vacate the
Premises by the end of the Agreement Term. If such notice is not timely given, Tenant shall be
liable for the rent due for the following month if the Premises are not rented to another tenant. If
Tenant continues in possession of the Premises after the expiration of the Agreement Term,
Tenant shall be deemed a holdover tenant and its tenancy shall be a month-to-month tenancy.
During such month-to-month tenancy, the monthly rent shall increase to $15000 and all other
terms and conditions of the Agreement shall remain in effect, and Tenant must provide 30 days’
written notice to Landlord of Tenant’s intention to vacate the Premises. Landlord may elect not to
renew this Agreement by providing written notice to Tenant 30 days prior to the end of the
Agreement Term. Landlord may terminate a month-to-month tenancy by providing written notice
to quit at least 30 days prior to the end of such month-to-month tenancy.
16. PERMITTED USE OF PREMISES. Tenant shall use the Premises for the following retail
purpose only: Any retail business.. Tenant shall not use the Premises for any other purpose –
retail or otherwise – without the prior written consent of Landlord. Tenant shall not use the
Premises or Center in such a manner that: (A) violates any law or ordinance, including laws
prohibiting the use, possession, or sale of illegal drugs; (B) damages the Premises or Center; (C)
involves storing, manufacturing or selling any explosives, flammables or other inherently
dangerous substance, chemical, thing or device; (D) creates waste; or (E) disturbs the peace
and quiet of any other tenant. Tenant is responsible for the behavior of its agents, employees,
guests and invitees.
17. CONTINUOUS OPERATIONS. Tenant shall remain open for business as follows: 9:00 AM to
7:00 PM, except for any holidays or other days on which the Center is closed. At the sole
discretion and written approval of Landlord, Tenant temporarily may close for remodeling or
inventory; otherwise, Tenant’s failure to keep the Premises open for business as required above
shall be deemed a breach of this Agreement, and Landlord may proceed accordingly under the
termination provisions of Paragraph 41.
18. POSSESSION OF THE PREMISES. Tenant shall be responsible for paying rent and complying
with all terms of this Agreement after signing this Agreement, even if Tenant fails to take
possession of the Premises. If Tenant fails to possess the Premises within seven days of the
beginning of the Agreement Term, Landlord shall have the right to terminate this Agreement.
19. DELAY OF OCCUPANCY. In the event Tenant’s occupancy of the Premises is delayed for
construction, repairs, cleaning, a holdover tenant, or any circumstances beyond the control of
Landlord, this Agreement shall remain in effect, subject to the abatement of rent on a daily basis
during the delay for the first seven days of the Agreement Term. If the delay of occupancy is
longer than seven days, Tenant may terminate this Agreement by delivering written notice to
Landlord. After such termination, Landlord’s liability to Tenant is limited to the return of all sums
previously paid by Tenant to Landlord under this Agreement.
20. TENANT INSURANCE. Tenant shall maintain at its own cost and expense at all times its own
comprehensive commercial general liability insurance policy with a limit of no less than
$1,000,000 per occurrence. Such policy shall name Landlord as an additional insured and shall
protect both Landlord and Tenant from any claim, loss or liability arising from Tenant’s
occupancy of the Premises. Tenant’s insurance company shall be subject to Landlord’s
approval, which approval shall not be unreasonably withheld. Upon Landlord’s written request,
Tenant shall provide Landlord with a copy of Tenant’s current comprehensive commercial
general liability insurance policy.
21. SMOKING. There shall be no smoking in the Premises by Tenant or Tenant’s guests.
22. ANIMAL RESTRICTIONS. Except for service animals for the disabled, no animal is allowed in
the Premises at any time.
23. SIGNAGE. Prior to installing any signage on or about the Premises or Center, Tenant shall
obtain Landlord’s written approval and consent. Tenant shall install all signage at Tenant’s sole
expense. Tenant shall maintain its signage in good condition, and shall remove all of its signage
at the termination of this Agreement. Landlord shall not be responsible for maintenance or repair
of any of Tenant’s signage.
24. REIMBURSEMENT. Tenant shall immediately reimburse Landlord for any loss, damage, cost, or
repair caused by Tenant or Tenant’s guest. Tenant’s unpaid balances will incur interest at the
highest lawful rate.
25. MAINTENANCE AND REPAIRS. Tenant shall maintain the Premises in good, safe and sanitary
condition. Tenant shall make all necessary repairs to the Premises, at Tenant’s expense.
Repairs must conform to a professional standard of quality. Repairs include but are not limited to
routine repairs of floors, walls, ceilings, and other parts of the Premises.
26. SURRENDER. Upon termination of the tenancy, Tenant shall return the Premises to Landlord in
a condition identical to that which existed when Tenant took occupancy, except for ordinary wear
and tear. Tenant has examined the Premises, including appliances, fixtures, carpets, and paint,
and has found them to be in good, safe, and clean condition and repair, except as noted in the
inspection checklist, if any.
27. ALTERATIONS. Tenant shall not make any alterations to the Premises without the prior written
consent of Landlord. Any alterations that Tenant performs with Landlord’s consent must conform
to a professional standard of quality. Any alteration performed by Tenant shall become the
property of Landlord, and Tenant shall not be entitled to any compensation for such alteration.
28. COMPLIANCE WITH LAWS. Tenant shall, at Tenant's sole expense, comply promptly with all
applicable statutes, ordinances, rules, regulations, orders and requirements regulating Tenant’s
use of the Premises, including but not limited to Landlord’s rules governing the Center. Landlord
shall be responsible for compliance with any statute, ordinance, rule, regulation, order or
requirement that is not related specifically to Tenant’s use of the Premises.
29. QUIET ENJOYMENT. Subject to the terms and conditions of this Agreement, including but not
limited to the provisions of Paragraph 30, Tenant shall be entitled to quiet enjoyment of the
Premises so long as Tenant is not in default under this Agreement.
30. LANDLORD’S RIGHT TO ACCESS. Landlord may enter the Premises at reasonable times for
the following purposes: (A) to inspect the Premises; (B) to show the Premises to prospective
purchasers, lenders or tenants; or (C) to make repairs, improvements or additions to the
Premises. Landlord’s access shall not unreasonably interfere with Tenant’s business on the
Premises. Landlord may, at any time during this Agreement, place a "for sale" sign on or about
the Premises. Landlord may, during the last 90 days before the expiration of this Agreement, as
amended or renewed, place a "for lease" sign on or about the Premises.
31. LIEN AND PERSONAL PROPERTY. Tenant hereby grants Landlord a lien on all personal
property in the Premises. If Tenant leaves behind any personal property after move-out,
abandonment, or eviction, Landlord shall have the right to remove and dispose of said personal
property in any manner that Landlord chooses at Tenant’s sole risk and expense, without any
recourse by Tenant. Tenant shall indemnify Landlord for any cost or against any claim for
damages in association with the removal, disposal, or storage of such personal property.
32. INDEMNIFICATION. Tenant shall indemnify and hold harmless Landlord and Landlord’s agents,
employees, partners, officers, directors, managers, members, and shareholders from all liability
and claims for any personal injury or property damage caused by the act, omission or negligence
of Tenant or Tenant’s guest or invitee.
33. SUBORDINATION. This Agreement is subordinate to any existing or future mortgage or deed of
trust.
34. ESTOPPEL CERTIFICATES. Within 20 days of Landlord’s written request to Tenant, Tenant
shall provide Landlord with a complete, accurate written statement certifying the existence and
terms of this Agreement as well as any other requested information related to this Agreement.
Tenant shall provide this information in the form and manner requested by Landlord.
35. RELEASE OF TENANT INFORMATION TO THIRD PARTIES. Tenant authorizes Landlord to
provide normal business information about Tenant, including Tenant’s rental history, to a third
party who requests the information for a legitimate governmental, judicial, law enforcement, or
business purpose.
36. CONDEMNATION. If any part of the Premises or any part of the Center material to Tenant’s use
of the Premises is condemned, this Agreement shall end and all condemnation proceeds shall
belong to Landlord.
37. DAMAGE AND DESTRUCTION. In the case the Premises are destroyed by fire or other
casualty, if the Premises cannot be repaired within 90 days, this Agreement shall terminate as of
the date of the destruction. If the Premises can be repaired, at a cost not to exceed any
insurance proceeds received by Landlord, all rent shall abate until the Premises are restored to
their previous condition, and this Agreement shall continue in full force and effect. If Tenant
causes such destruction, rent shall not abate. If the cost to repair and restore exceeds all
insurance proceeds received by Landlord, Landlord shall have the option to terminate this
Agreement with 60 days’ written notice to Tenant.
38. NO PARTNERSHIP OR JOINT VENTURE. Landlord is not and shall not be a partner or joint
venturer of Tenant.
39. FORCE MAJEURE. If Landlord or Tenant cannot reasonably perform its obligations under this
Agreement because of a natural disaster, war, terrorist activities, strike, lockout, labor trouble,
civil commotion, an act of God, or any other event beyond Landlord's or Tenant's control (except
for non-availability of funds), the party shall not be in breach of this Agreement if the party
diligently performs the obligations after the end of the force majeure event. The non-performing
party shall give written notice to the other party as soon as commercially practicable in the event
of non-performance due to a force majeure event.
40. ASSIGNMENT, SUBLETTING, AND RELEASE. Tenant shall have the right, without Landlord’s
consent, to assign this Agreement to an entity with which Tenant merges or consolidates, any
subsidiary of Tenant, any entity under common control with Tenant, or a purchaser of
substantially all of Tenant's assets. Except as set forth above, Tenant shall not sublease any part
of the Premises or assign this Agreement without the prior written consent of Landlord, which
consent shall not be unreasonably withheld. Landlord agrees to release Tenant from this
Agreement if Tenant finds a replacement tenant, acceptable to Landlord, who will sign a new
lease for the remaining term. The replacement tenant must pass Landlord’s background check
(s), and must be similar in character and quality to other tenants on the Center. Landlord may
charge Tenant a reasonable administrative fee for any assignment, sublet, or release.
41. GROUNDS FOR TERMINATION OF TENANCY. The failure of Tenant or Tenant's guests or
invitees to comply with any term of this Agreement, including payment of rent, the
misrepresentation of any material fact on Tenant's rental application, Tenant’s bankruptcy or
abandonment, or any other occurrence provided under law shall be grounds for termination of
the tenancy, with appropriate notice to Tenant and procedures as required by law. Upon default
by Tenant, all remaining rent shall be accelerated and immediately due, if Landlord provides
written notice to Tenant.
42. ATTORNEY’S FEES. Tenant shall pay for Landlord’s legal fees and court costs associated with
any default by Tenant. In any action or legal proceeding to enforce any part of this Agreement,
the prevailing party shall recover reasonable attorney’s fees and court costs.
43. NOTICES. Unless otherwise specified in this Agreement, under law, or as otherwise agreed to in
writing between Landlord and Tenant, all notices provided by this Agreement shall be in writing
and shall be delivered to the other party personally, or sent by first class mail, postage prepaid,
or securely and conspicuously posted, as follows:
A. To Tenant: the Premises, or at Tenant’s last known address
B. To Landlord: 245 Century Los Angeles, CA 90017
44. ADDITIONAL PROVISIONS. Additional provisions are as follows: Tenant shall have the option
to rent the adjacent unit as long as Tenant provides written notice to Landlord by 9-30-2011.
45. BROKERAGE. $0
46. VALIDITY OF EACH PART. If any portion of this Agreement is held to be invalid or
unenforceable, the remaining provisions shall continue to be valid and enforceable.
47. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between Landlord and
Tenant. No promises or representations, other than those contained herein or implied by law,
have been made by Landlord or Tenant. Any addendum or modification to this Agreement must
be in writing and signed by Landlord and Tenant.
Dated as of the date first set forth above.
{{*_es_signer1_signatureblock}}{{*_es_signer2_signatureblock}}
Signature: John Retail
Signature: Bianca Nicole
John Retail (Jun 30, 2011)
Email: [email protected]
Bianca Nicole (Jun 30, 2011)
Email: [email protected]
COMMERCIAL INSPECTION CHECKLIST
To: Retail Store 1001 a/an California Limited Liability Company ("Tenant")
From: 123 Paperless Shops, a/an California Corporation ("Landlord")
Date: June 30, 2011
Re: Inspection Checklist for 123 Palm Tree, 101, Los Angeles, CA 90017 ("Premises")
________________________________________________________
Following please find Landlord's comments on the condition of the Premises:
The Premises contains a new storefront, fixtures, lighting, flooring, and paint
Within 48 hours from 07-01-2011, Tenant shall provide Landlord, in writing, with any additional
comments related to the condition of the Premises. Tenant’s comments, if any, shall then be
incorporated into and become part of this inspection checklist.
{{*_es_signer1_signatureblock}}{{*_es_signer2_signatureblock}}
Signature: John Retail
Signature: Bianca Nicole
John Retail (Jun 30, 2011)
Email: [email protected]
Bianca Nicole (Jun 30, 2011)
Email: [email protected]
LeaseRunner Document Batch
EchoSign Document History
June 30, 2011
Created:
June 30, 2011
By:
LeaseRunner.com Team ([email protected])
Status:
SIGNED
Transaction ID:
IBHB8N3K2E254E
“LeaseRunner Document Batch” History
Document created by LeaseRunner.com Team ([email protected])
June 30, 2011 - 10:25 AM MDT - 184.106.204.88
Document emailed to John Retail ([email protected]) for signature
June 30, 2011 - 10:25 AM MDT
Document viewed by John Retail ([email protected])
June 30, 2011 - 10:37 AM MDT - 75.151.83.233
Document emailed to Bianca Nicole ([email protected]) for signature
June 30, 2011 - 10:38 AM MDT
Document esigned by John Retail ([email protected])
June 30, 2011 - 10:38 AM MDT - 75.151.83.233
Document viewed by Bianca Nicole ([email protected])
June 30, 2011 - 10:38 AM MDT - 75.151.83.233
Document esigned by Bianca Nicole ([email protected])
June 30, 2011 - 10:39 AM MDT - 75.151.83.233
Signed document emailed to LeaseRunner.com Team ([email protected]), John Retail
([email protected]) and Bianca Nicole ([email protected])
June 30, 2011 - 10:39 AM MDT