Sublease Agreement - March 26, 2020

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A commercial, B2B sublease of a property located in Georgia. Includes expansion option. The Bill of Sale attached is available separately at: Bill of Sale Source: http://www.sec.gov/Archives/edgar/data/1045150/...

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 SUBLEASE AGREEMENT

BETWEEN The Wellness Way - Boise AND ThinCore, Inc.

           THIS SUBLEASE AGREEMENT (this “Sublease”) is made and entered into as of the 25th day of March, 2020, by and between The Wellness Way - Boise, an Idaho business (“Sublandlord”) and ThinCore, Inc., an Idaho corporation (“Subtenant”).

RECITALS

A.           The Wellness Way - Boise, successor in interest to Eagle Creek Realty Group (“Prime Landlord”), as landlord, and Sublandlord, as tenant and successor in interest to Orchard Plaza, are parties to the “Prime  Lease” attached hereto as Exhibit A, covering certain leased premises located on the second floor of the Building) as more particularly described in the Prime Lease (the “Prime Lease Premises”) in the building located at 1111 S Orchard, Boise ID 83705 (the “Building”).

B.           Sublandlord desires to sublease a portion of the Prime Lease Premises to Subtenant, and Subtenant desires to sublease the same from Sublandlord, on the terms and conditions of this Sublease.

C.           Capitalized terms not otherwise defined in this Sublease shall have the meanings set forth in the Prime Lease.

           NOW, THEREFORE, Sublandlord and Subtenant agree as follows:

1.           Sublease.  Sublandlord hereby leases to Subtenant and Subtenant hereby leases from Sublandlord, the Sublease Premises (as defined in Section 2 below), for the term and for the rent and on all other terms and conditions set forth herein.

 2.           Sublease Premises.  The “Sublease Premises” shall be deemed to consist of the northeast room within Sublandlord's office space located on the 2nd floor of the Building with shared use of the office "business/reception workspace".

 3.            Term.  The term of this Sublease (the “Sublease Term”) shall commence on  April 1, 2020 (the “Sublease Commencement Date”) and shall continue on a month-to-month basis.  If the Sublease Commencement Date fails to occur by March 26, 2020, Subtenant shall have the right to terminate this Sublease by giving written notice to Sublandlord. Subtenant shall have no right to exercise any rights under the Prime Lease to extend the term of the Prime Lease.
 
4.           Furniture. Subject to the terms herein, Subtenant shall have the right to use the Furniture (as such term is defined herein) located in the Sublease Premises in its existing AS-IS condition.  Subtenant agrees to maintain the Furniture in the same order and condition as received, reasonable wear and tear excepted.

5.           Parking. Subtenant’s use of any parking spaces shall be subject to the provisions of the Prime Lease and to such rules and regulations as may be promulgated by Prime Landlord and/or the parking facility operator.  To the extent that Prime Landlord agrees in writing, Subtenant shall have the non-exclusive use of up to four (4) parking spaces which shall be free of charge to Subtenant.
 
6.           Use.  Subtenant shall use the Sublease Premises only for general office purposes, and for no other purposes.  Subtenant’s use of the Sublease Premises shall at all times conform to all applicable governmental laws, statutes, ordinances, rules and regulations (collectively, Laws ”). Subtenant shall have access to the Sublease Premises, 24 hours per day, 7 days per week, 52 weeks per year.
 
7.           Rent; Security.
 
7.1           Sublease Rent. Commencing on the Sublease Commencement Date, Subtenant shall pay to rent to Sublandlord (the “Sublease Rent”) at a rate of $200 per month. Sublease Rent shall be paid in advance and without notice, demand, deduction or offset on the first day of each month during the Sublease Term.  Sublease Rent for any partial months shall be prorated on a per diem basis.  

7.2           Security.  Contemporaneously with the execution of this Sublease, Subtenant shall deliver to Sublandlord a security deposit equal to ($0).

8.           Subtenant Improvements.  Sublandlord shall deliver the Sublease Premises to Subtenant in broom clean condition.  Subject to the foregoing obligation on the part of Sublandlord, Subtenant acknowledges that it has inspected the Sublease Premises and agrees to accept the Sublease Premises in their “AS IS” condition on the date of the last walk-through by Subtenant and Sublandlord.  Subtenant acknowledges that Sublandlord has made no representations or warranties concerning the condition of the Sublease Premises or their fitness for any particular use and Subtenant shall rely solely on its own investigations and inspections to determine the suitability of the Sublease Premises for its intended use.  Any work necessary to prepare the Sublease Premises for Subtenant’s occupancy shall be performed at Subtenant’s sole cost and expense.  All such work shall be done in a good and workmanlike manner, free of mechanics liens and in accordance with all other provisions of the Prime Lease, including, without limitation, those provisions of the Prime Lease requiring consent of Prime Landlord, and with all Laws. Notwithstanding the foregoing, Subtenant may, at its sole cost, install a building standard sign at the entrance to the Sublease Premises, subject to Sublandlord’s and Prime Landlord’s approval of Subtenant’s signage plans and specifications, such approval by Sublandlord not to be unreasonably withheld, conditioned or delayed.  Additionally, to the extent that Prime Landlord agrees in writing, Subtenant shall have its name shown upon the directory board for the Building.
 
9.           Alterations.
 
9.1           Consent. Subtenant shall not make or permit anyone to make any alterations, decorations, additions or improvements, structural or otherwise, in or to the Sublease Premises without the prior written consent of Sublandlord, which consent will not be unreasonably withheld as long as Prime Landlord consents in writing to the same. Any such alterations shall be made at Subtenant’s sole expense and subject to the Prime Lease.  As a condition precedent to consent of Sublandlord hereunder, Sublandlord may, upon providing Subtenant notice at the time Sublandlord approves such alterations, require such alterations to be removed at the end of the Sublease Term and that the Sublease Premises be restored to the condition existing on the Sublease Commencement Date.   Subtenant agrees to obtain and deliver to Sublandlord such security against mechanic’s liens as Sublandlord shall reasonably request.  If any mechanic’s lien is filed against any part of the Sublease Premises for work claimed to have been done for, or materials claimed to have been furnished to, Subtenant, such mechanic’s lien shall be discharged by Subtenant in accordance with all of the provisions of the Prime Lease but in no event later than fifteen (15) days thereafter, at Subtenant’s sole cost and expense, by the payment thereof or by making any deposit required by law.

9.2           Removal.   All alterations, decorations, additions or improvements in or to the Sublease Premises made by Subtenant shall become the property of Sublandlord upon expiration of the Sublease Term and shall remain upon and be surrendered with the Sublease Premises as a part thereof without disturbance or injury, unless such alterations, decorations, additions or improvements have been designated for removal.  Subject to the foregoing, Subtenant shall surrender the Sublease Premises to Sublandlord in the same condition as the Sublease Premises were delivered to Subtenant, loss by fire or other casualty not the result of any act or omission of Subtenant, or ordinary wear and tear excepted.  Subtenant agrees to indemnify and hold Sublandlord harmless from any and all claims, damages, and expenses (including without limitation attorneys’ fees) arising out of or relating to any claim that the Sublease Premises were not surrendered in the condition required by this Sublease.  For purposes of clarification, Subtenant’s surrender obligations shall not include, and Subtenant shall not be obligated to remove, any alterations, decorations, additions or improvements existing in the Sublease Premises on the Sublease Commencement Date (as long as the same were not constructed or installed by or on behalf of Subtenant).
 
10.           Prime Lease.
 
10.1           Subordinate to Prime Lease. This Sublease is subject and subordinate to the Prime Lease.  It is the intent of Subtenant and Sublandlord to incorporate the Prime Lease into this Sublease by reference except as otherwise specifically provided herein.  Notwithstanding the foregoing sentence and without limiting Subtenant’s obligations under Section 7 of this Sublease, Subtenant shall not be obligated to pay Base Rent or Operating Expenses to Prime Landlord pursuant to the Prime Lease (as such terms are defined therein).

10.2           Provisions of Prime Lease. Except as otherwise expressly provided by the terms of this Sublease, Subtenant agrees to be bound by and perform all the terms, provisions and conditions to be performed by or applicable to Sublandlord under the Prime Lease to the extent the same are applicable to the Sublease Premises or Subtenant’s use of any portion of the Building, and for purposes of said limited incorporation by reference of the Prime Lease, any references therein to “Tenant” shall be deemed references to Subtenant.  Sublandlord shall have the benefit of all rights and remedies available to Prime Landlord under the Prime Lease, including, but not limited to the right of re-entry.  Subtenant shall indemnify, defend and hold Sublandlord harmless from and against any loss or damage occurring by reason of breach by Subtenant of the Prime Lease as incorporated herein, including the cost of cure, loss of Prime Lease and any attorneys’ fees incurred in connection with the foregoing.  All references to “Landlord” in the Prime Lease shall be deemed to continue to be references to Prime Landlord.  Sublandlord shall have no liability to Subtenant for Prime Landlord’s defaults, provided that at Subtenant’s request Sublandlord shall request that Prime Landlord cure any default by Prime Landlord or if Subtenant requests, Sublandlord shall, at Subtenant’s sole cost, take reasonable, appropriate action against Prime Landlord, as permitted by law or by the terms of the Prime Lease.  Subtenant shall promptly reimburse Sublandlord for any such costs within five (5) business days following receipt of Sublandlord’s written demand therefor. Sublandlord shall indemnify, defend and hold Subtenant harmless from and against any loss or damage occurring by reason of breach by Sublandlord of the Prime Lease as incorporated herein, including the cost of cure, loss of Prime Lease and any reasonable attorneys’ fees incurred in connection with the foregoing, but only to the extent such breach by Sublandlord did not occur in whole or in part by any breach by Subtenant under this Sublease.

10.3           Sublandlord Representations and Covenants. Sublandlord represents that as of the date of this Sublease: 
(a)           the Prime Lease is in full force and effect and the copy attached hereto as Exhibit A is a complete and accurate copy of the Prime Lease,
(b)           Except as described in Section A of the Recitals, the Prime Lease has not been amended (other than certain estoppels certificates, SNDA’s and other subleases (for other portions of the Prime Lease Premises) executed by Sublandlord in connection with the Prime Lease), and
(c)           to Sublandlord’s actual knowledge there is no default by Prime Landlord or Sublandlord under the Prime Lease.

10.4           Assignment of Sublandlord’s Interest in Sublease and Prime Lease.  In the event of any assignment or transfer of Sublandlord’s interest in this Sublease and the Prime Lease and acceptance thereof by the assignee and the assumption in writing by such assignee of Sublandlord’s obligations under this Sublease and the Prime Lease, Subtenant hereby entirely frees and relieves Sublandlord of all liability under any and all of its covenants and obligations contained in or derived from this Sublease or the Prime Lease arising out of any act, occurrence or omission occurring after the consummation of such assignment or transfer.

11.           Assignment and Subletting by Subtenant.  Subtenant shall not assign this Sublease in whole or in part, or sublet all or any part of the Sublease Premises, or permit occupancy of all or any part of the Sublease Premises under any arrangement by a party other than Subtenant, without the prior written consent of Sublandlord, which consent shall not be unreasonably withheld as long as Prime Landlord consents to such transfer.  Subtenant acknowledges that any right to further sublease the Sublease Premises or assign this Sublease are subordinate and subject to the terms of the Prime Lease, including without limitation those provisions requiring the consent of Prime Landlord.  Notwithstanding the foregoing and without Sublandlord’s consent, but upon written notice to Sublandlord and written consent from Prime Landlord (which may be given or withheld in Prime Landlord’s sole discretion), Subtenant may assign or sublease all or a portion of the Premises to (a) a subsidiary, affiliate, parent or other entity to Subtenant which controls, is controlled by, or is under common control with, Subtenant; (b) a successor entity to Subtenant resulting from merger, consolidation, non bankruptcy reorganization, or government action; or (c) a purchaser of all or any significant portion of Subtenant's stock or assets.  Any assignment or subletting pursuant to the foregoing sentence shall be subject to the conditions described in Section 11.2 of the Prime Lease.
 
12.           Default; Performance by Sublandlord
 
12.1.           Default.  The occurrence of any one or more of the following shall constitute an “Event of Default” under this Sublease:
 
a.
Subtenant shall fail to pay any rent or other sum due hereunder within five (5) business days after written notice by Sublandlord to Subtenant;
 
b.
Subtenant shall create or suffer a default under the Prime Lease under any provision of the Prime Lease applicable to Subtenant or

 
 
the Sublease Premises, except as expressly excluded herein, and Subtenant shall not cure such default within thirty (30) days after written notice from Sublandlord to Subtenant;
 
 
c.
Subtenant shall default in the due keeping, observing or performance of any covenant, term, provision or condition of this Sublease not described above on the part of Subtenant to be kept, observed or performed, and if such default shall continue and shall not be remedied by Subtenant within thirty (30) days after Sublandlord shall have given to Subtenant a written notice specifying the same;
 
d.
any event shall occur or any contingency shall arise whereby this Sublease or the estate hereby granted or the unexpired balance of the term hereof would, by operation of law or otherwise, devolve or pass to any person, firm, association or corporation other than Subtenant except as expressly permitted hereunder;
 
e.
Subtenant shall make an assignment of its property for the benefit of creditors or shall file a voluntary petition under any bankruptcy or insolvency law, or an involuntary petition under any bankruptcy or insolvency law shall be filed against Subtenant and such involuntary petition is not dismissed within sixty (60) days after the filing thereof;
 
f.
a petition is filed by or against Subtenant under the reorganization provisions of the United States Bankruptcy Code or under the provisions of any law of like import, unless such petition under said reorganization provisions be one filed against Subtenant which is dismissed within sixty (60) days after its filing;
 
g.
Subtenant shall file a petition under the arrangement provisions of the United States Bankruptcy Code or under the provisions of any law of like import; or
 
h.
a permanent receiver, trustee or liquidator shall be appointed for Subtenant or of or for the property of Subtenant, and such receiver, trustee or liquidator shall not have been discharged within sixty (60) days from the date of his or her appointment.
If an Event of Default occurs under this Sublease, Subtenant does hereby authorize and fully empower Sublandlord to use all lawful means available to cancel and annul this Sublease, and to re-enter and take possession of the Sublease Premises, and remove all persons and their property therefrom so as to recover at once full and exclusive possession of all the Sublease Premises, whether in possession of Subtenant or of third persons, or vacant; or Sublandlord may at its option at any time after such default or violation of condition or covenant, re-enter and take possession of the Sublease Premises without such re-entering working a forfeiture of the rents to be paid and the covenants to be kept by Subtenant for the full term of this Sublease.   The foregoing shall in no way limit the remedies or rights of Sublandlord and the parties hereby agree that all of the rights and remedies in favor of Prime Landlord under the Prime Lease shall inure to the benefit of Sublandlord if an Event of Default occurs under this Sublease.

12.2.           Sublandlord’s Right to Cure. If Subtenant shall fail to perform any act on its part to be performed hereunder, Sublandlord may (but shall not be obligated so to do) after giving written notice to Subtenant perform such act without waiving or releasing Subtenant from any of its obligations relative thereto.  All sums paid or costs incurred by Sublandlord in so performing such acts under this Section 12.2, together with reasonable attorneys’ fees and interest at the rate set forth in the Prime Lease, from the date each such payment was made or such cost incurred by Sublandlord, shall be payable by Subtenant to Sublandlord on demand.

12.3           Subtenant’s Right to Cure Monetary Defaults. In the event that Sublandlord defaults under its monetary obligations under the Prime Lease, Subtenant may (but shall not be obligated so to do) after giving written notice to Sublandlord, pay any outstanding amount that is payable by Sublandlord under the Prime Lease, to the extent that Prime Landlord is willing to accept such payment. In such event Sublandlord shall reimburse Subtenant on demand for the amount paid by Subtenant to cure Sublandlord’s monetary default.  If Sublandlord fails to reimburse Subtenant within ten (10) business days following written notice from Subtenant, Subtenant may offset the amount paid by Subtenant herein against the Sublease Rent.

12.4.           Remedies. No reference to nor exercise of any specific right or remedy by Sublandlord, at Subtenant’s expenses, against (a) any default by Subtenant or permitted assignee or subtenant thereunder, (b) any shall prejudice or preclude Sublandlord from exercising or invoking any other remedy in respect thereof, whether allowed at law or in equity or expressly provided for herein.  No such remedy shall be exclusive or dependent upon any other such remedy, but Sublandlord may from time to time exercise any one or more of such remedies independently or in combination.

13.           Indemnification.  Subtenant agrees to indemnify and hold harmless Sublandlord from any and all claims, liabilities, causes of action or costs (including reasonable attorneys’ fees and costs of suit), however caused, to the extent they arise out of Subtenant’s default, negligence or acts or omissions in connection with the Sublease Premises or any portion of the Building.  Sublandlord agrees to indemnify and hold harmless Subtenant from any and all claims, liabilities, caused of action or costs (including reasonable attorneys' fees and costs of suit), however caused, to the extent they arise out of Sublandlord's default of this Sublease, including termination or forfeiture of the Prime Lease.  All indemnity obligations of Sublandlord and Subtenant arising under this Sublease shall exclude all special, consequential, or indirect damages.
 
14.           Release.  Subtenant hereby waives and releases any and all claims against Sublandlord for the interruption or interference in the use of the Sublease Premises from any cause whatsoever other than the negligence of Sublandlord or its officers, employees or agents; provided that if any such interference or interruption results in an abatement of any Base Rent payable by Sublandlord under the Prime Lease, Subtenant shall be entitled to a proportionate abatement of Sublease Rent to the extent and for the duration that Sublandlord’s Base Rent abates under the Prime Lease.

15.           Insurance and Waiver of Claims.
 
15.1           Insurance.  Sublandlord agrees to purchase and to carry in full force all insurance required by the Prime Lease.

15.2           Waiver of Claims.  Notwithstanding any other provision in this Sublease to the contrary, Sublandlord and Subtenant hereby release one another, and Subtenant releases Prime Landlord, from any and all liability or responsibility (to the other or anyone claiming through or under them by way of subrogation or otherwise) for any loss or damage covered by property insurance or coverable by the insurance required by Section 15.1 hereof with respect to the waiving party, even if such loss or damage shall have been caused by the fault or negligence of the other party, or anyone for whom such party may be responsible.

16.           Notices.  All notices of any kind required under the provisions of this Sublease or the Prime Lease shall be mailed, postage prepaid, by certified or registered mail, return receipt requested or by a nationally recognized overnight delivery service, addressed as follows:
 
Sublandlord:
The Wellness Way - Boise
Attn: Crystal Drzewiecki
Subtenant:
ThinCore, Inc.
PO Box 5181, Boise, ID 83705
Attn: Christopher Hansen
 
Either party may, by such notice, designate a new or other address to which notice may be mailed.  Any notice given hereunder shall be deemed received.  Sublandlord covenants to promptly provide Subtenant with copies of all notices of default that Sublandlord delivers to, or receives from, Prime Landlord under the Prime Lease if related to the Sublease Premises.
17.           Expansion Option. As long as Subtenant is not in default, beyond any applicable  notice and cure period, Subtenant shall have, and Sublandlord hereby grants to Subtenant, an expansion option (the “Expansion Option”), exercisable by written notice to Sublandlord at any time during the Sublease Term, to sublease additional space, if available, in accordance with an addendum to this agreement, executed by both parties. 
 
18.           Moving Allowance.  Sublandlord shall provide a moving allowance of $0 for the Sublease Premises  (the “Moving Allowance”) which may be used by Subtenant in its sole discretion toward any costs incurred by Subtenant in connection with its relocation and occupancy of the Sublease Premises.

19.           Miscellaneous Provisions.
 
19.1.           Governing Laws. This Sublease shall be construed under the laws of Idaho.

19.2.           Separate Provisions.  Each provision herein shall be deemed separate and distinct from all other provisions, and if any one of them shall be declared illegal or unenforceable, the same shall not affect the legality or enforceability of the other terms, conditions, and provisions hereof, which shall remain in full force and effect.

19.3.           Successors. This Sublease shall extend, apply to and firmly bind the heirs, executors, administrators, successors and assigns of the respective parties hereto as fully as the respective parties are themselves bound, but this provision shall not authorize the assignment of this Sublease or sublease of the Sublease Premises contrary to the provisions herein contained.

19.4.           Termination of Prime Lease. The term of this Sublease and Subtenant’s right to possession of the Sublease Premises shall terminate upon the termination of the Prime Lease for any reason unless Prime Landlord elects, in its sole discretion, to recognize Subtenant under the terms of this Sublease and otherwise treat this Sublease as a direct lease between Prime Landlord and Subtenant.  Sublandlord covenants that it will not enter into any agreement, exercise any rights or perform or fail to perform (where Sublandlord has a duty to perform) any act that will modify, terminate or amend the Prime Lease in a manner that would materially affect the Sublease (including the Sublease Term) without the prior written consent of Subtenant.  Notwithstanding the foregoing, Sublandlord may terminate the Prime Lease in accordance with the provisions of the Prime Lease, and without Subtenant’s consent, in the event of any casualty or condemnation.  Additionally, Sublandlord may terminate the Prime Lease in the event that Prime Landlord agrees in writing to recognize the rights of Subtenant under this Sublease and to not disturb Subtenant’s possession of the Sublease Premises.  Subtenant acknowledges that Sublandlord will be exercising its early termination option as granted under Section 12 of the Third Amendment and that Subtenant’s consent thereto is not required.

19.5.           Brokers.  Subtenant and Sublandlord each represents and warrants that it has dealt with no broker, agent or other person in connection with this Sublease. 

19.6.           Counterparts. This Sublease may be executed in counterparts, which upon execution by all parties shall constitute one integrated agreement.

 

 

                      IN WITNESS THEREOF, the parties hereto have hereunto set their hands as of the date hereinbefore first written.


 

EXHIBIT A

PRIME LEASE

[To be attached]

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