Document:

exv10w1

Exhibit 10.1

SUBLEASE

     This Agreement of Sublease is made as of April 1, 2003, between A.L. BAZZINI CO., INC., a New
York Corporation having its principal office at 200 Food Center Drive, Bronx, New York 10474
(“Sublessor”) and DAIRYLAND USA CORP., having its principal office at 1300 Viele Avenue, Bronx, New
York 10474 (“Sublessee”).

WITNESSETH:

     A. Pursuant to a lease dated as of March 1, 2003 (the “Master Lease”) between THE CITY OF NEW
YORK (“Landlord”), as landlord, and Sublessor, as tenant, Sublessor is the tenant of a portion of
the premises constituting of the Hunts Point Food Distribution Center, 240 Food Center Drive,
Bronx, New York, identified as Block 2770, part of Lot 1, more particularly described on Exhibit A
of the Master Lease (the “Demised Premises”).

     B. Sublessee desires to sublease a Fifty-Five Thousand square foot (55,000 sq. ft.) portion of
the Demised Premises from Sublessor, which portion of the Demised Premises (the “Subleased
Premises”) is identified by cross-hatching on Exhibit A hereto.

     NOW, THEREFORE, in consideration of the mutual covenants contained herein, and other good and
valuable consideration, Sublessor and Sublessee hereby agree as follows:

ARTICLE I.

Subleased Premises, Sublease Term

     1.01 Subject to the provisions of Section 1.02 hereof, Sublessor hereby subleases the
Subleased Premises to Sublessee, and Sublessee hereby hires and takes the Subleased Premises from
Sublessor, subject to the terms, provisions, covenants and conditions of the Master Lease and this
Sublease. This Sublease includes the right of Sublessee to use the parking, loading and staging
areas in and around the Demised Premises, and a grant of access and right of passage to Sublessee,
its employees, agents and invitees, including trucks, automobiles and other vehicles,

 

 

to and on to the Subleased Premises over the driveways, alleys, walking paths and other
vehicle and pedestrian access routes and areas.

     1.02 The term of this Sublease (the “Sublease Term”) shall commence on April 1, 2003 (the
“Commencement Date”) and shall end at 11:59 p.m. on March 31, 2013 (the “Expiration Date”), unless
the Sublease Term shall sooner end pursuant to any of the terms, provisions or conditions of this
Sublease, the Master Lease or pursuant to law. Subtenant’s obligation to pay rent hereunder shall
begin on the Commencement Date.

     1.03 (a) Sublessee acknowledges that it has inspected the Subleased Premises and, except as
provided in this Section 1.03, hereby accepts the same in its “as is” condition on the date hereof.
Sublessor shall have no obligation whatsoever to make any alterations, improvements, or repairs to
the Subleased Premises. Except as provided in Sections 1.03(b) and 2.06(a), Sublessor shall have no
obligation whatsoever to make any alterations, improvements, or repairs to the Subleased Premises
in order for the Subleased Premises to comply with any applicable environmental laws, rules,
regulations, requirements or ordinances. Sublessee may, in accordance with the terms and conditions
of this Sublease and the Master Lease, make leasehold improvements (the “Improvements”) to the
Subleased Premises in accordance with plans and specifications which shall be submitted to
Sublessor and Landlord and are subject to their respective consents. Sublessor shall submit the
Plans to Landlord for its consent in accordance with Article 13 of the Master Lease within three
business days following Sublessor’s receipt thereof from Sublessee. Sublessee shall bear all of its
own costs and expenses incurred in the preparation and revision of the Plans. Sublessee shall also
bear the actual reasonable costs and expenses incurred by Sublessor and Landlord to third party
architects and engineers necessarily engaged by Sublessor and Landlord to review the Plans and
revisions thereto.

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          (b) Sublessor shall, at Sublessor’s sole cost and expense, construct and erect demising walls
to separate physically the Subleased Premises from the remainder of the Demised Premises. Such
construction shall be conducted in accordance with all Requirements, and Sublessor shall be solely
responsible at its sole cost to obtain Landlord’s consent thereto.

     1.04 Sublessee shall, no later than the Expiration Date or sooner termination of this
Sublease, and in accordance with all of the terms of this Sublease and the Master Lease, vacate and
surrender to Sublessor the Subleased Premises, together with all alterations, in good order,
condition and repair, reasonable wear and tear excepted and loss by fire or other casualty
excepted. Sublessee acknowledges that, with respect to the Subleased Premises, Sublessee shall be
solely responsible for any and all Restoration obligations imposed upon the Sublessor pursuant to
Article 8 of the Master Lease. Sublessee’s obligation to observe or perform this covenant shall
survive the expiration or earlier termination of this Sublease. Sublessee expressly waives, for
itself and for any person claiming through or under Sublessee, any rights which Sublessee or any
such person may have under the provisions of Section 2201 of the New York Civil Practice Law and
Rules and any successor law of like import then in force in connection with any holdover summary
proceedings which Sublessor may institute to enforce the foregoing provisions of this Article.

     1.05 If Sublessee shall fail to duly and timely surrender the Subleased Premises in accordance
with the terms and conditions of this Sublease and the Master Lease, either on the Expiration Date,
upon the occurrence of a default which continues beyond the expiration of applicable grace or cure
periods, or upon the occurrence of any other event causing the termination of this Sublease (a
“Holdover”), in addition to all of the rights and remedies available to Sublessor under this
Sublease and the Master Lease, in equity or in law, it is

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understood that Sublessor may elect, by notice to Sublessee, to treat Sublessee as a holdover
upon a month-to-month basis at a rent equal to the greater of (i) the then current fair market
rental value of the Subleased Premises or (ii) one and one-half times the fixed rent and additional
rent per month which Sublessee was required to pay during (or in the case of additional rent, on
account of or attributable to) the calendar month immediately prior to termination. If the
Subleased Premises are not surrendered upon termination, the terms of this Sublease (other than
those modified by this paragraph) shall continue in full force and effect and Sublessee shall
indemnify and hold harmless Sublessor against Sublessor’s actual loss, costs, liability or expenses
(including attorneys’ fees) resulting from Sublessee’s failure to surrender, including any and all
claims made by Landlord or any succeeding lessee or sublessee founded upon such delay or failure to
vacate the Subleased Premises. Nothing contained in this Section shall be deemed to give to
Sublessee any right to fail to surrender possession or hold over, and the provisions of this
Section shall not constitute an offer to rent on a month-to-month bases or at the rent set forth
above.

ARTICLE II.

Rent, Additional Rent and Utilities

     2.01 Sublessee covenants and agrees to pay to Sublessor, at the address of Sublessor set forth
above, or at such other address as Sublessor shall supply to Sublessee in writing, an annual fixed
rental as follows:

          (a) From the Commencement Date to and including the day immediately prior to the first
anniversary of the Commencement Date (“Sublease Year”; each sequential twelve (12) month period
being hereinafter referred to as the sequential “Sublease Year”): Three Hundred Forty-Three
Thousand Seven Hundred Fifty and 00/100 ($343,750.00) Dollars, payable

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in equal monthly installments of Twenty-Eight Thousand Six Hundred Forty-Five and 84/100
($28,645.84) Dollars.

          (b) Sublease Year 2: Three Hundred Sixty Thousand Nine Hundred Thirty-Seven and 50/100
($360,937.50) Dollars, payable in equal monthly installments of Thirty Thousand Seventy-Eight and
13/100 ($30,078.13) Dollars.

          (c) Sublease Year 3: Three Hundred Seventy-Eight Thousand Nine Hundred Eighty-Four and 38/100
($378,984.38) Dollars, payable in equal monthly installments of Thirty-One Thousand Five Hundred
Eighty-Two and 04/100 ($31,582.04) Dollars.

          (d) Sublease Year 4: Three Hundred Ninety-Seven Thousand Nine Hundred Thirty-Three and 60/100
($397,933.60) Dollars, payable in equal monthly installments of Thirty-Three Thousand One Hundred
Sixty-One and 14/100 ($33,161.14) Dollars.

          (e) Sublease Year 5: Four Hundred Seventeen Thousand Eight Hundred Thirty and 28/100
($417,830.28) Dollars, payable in equal monthly installments of Thirty-Four Thousand Eight Hundred
Nineteen and 19/100 ($34,819.19) Dollars.

          (f) Sublease Year 6: Four Hundred Thirty-Eight Thousand Seven Hundred Twenty-One and 80/100
($438,721.80) Dollars, payable in equal monthly installments of Thirty-Six Thousand Five Hundred
Sixty and 15/100 ($36,560.15) Dollars.

          (g) Sublease Year 7: Four Hundred Sixty Thousand Six Hundred Fifty-Seven and 89/100
($460,657.89) Dollars, payable in equal monthly installments of Thirty-Eight Thousand Three Hundred
Eighty-Eight and 16/100 ($38,388.16) Dollars.

          (h) Sublease Year 8: Four Hundred Eighty-Three Thousand Six Hundred Ninety and 79/100
($483,690.79) Dollars, payable in equal monthly installments of Forty Thousand Three Hundred Seven
and 57/100 ($40,307.57) Dollars.

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          (i) Sublease Year 9: Five Hundred Seven Thousand Eight Hundred Seventy-Five and 33/100
($507,875.33) Dollars, payable in equal monthly installments of Forty-Two Thousand Three Hundred
Twenty-Two and 95/100 ($42,322.95) Dollars.

          (j) Sublease Year 10 through the Expiration Date: Five Hundred Thirty-Three Thousand Two
Hundred Sixty-Nine and 10/100 ($533,269.10) Dollars, payable in equal monthly installments of
Forty-Four Thousand Four Hundred Thirty-Nine and 10/100 ($44,439.10) Dollars.

          The monthly fixed rental shall be paid in advance on the first day of each calendar month
without notice or demand and without abatement, deduction or set-off of any amount whatsoever
except as may be expressly provided for herein. An amount equal to one full month’s rent shall be
payable on the signing of this Sublease and shall be applied by Sublessor to the fixed rental
payment for the first full month of the Sublease Term. If the Commencement Date shall occur on a
day other than the first day of a calendar month, fixed rent for such calendar month shall be
prorated for the period from the Commencement Date to the last day of the said calendar month. The
fixed rent for the calendar month in which the termination date of this Sublease occurs shall be
similarly prorated and paid on the first day of the month in which said termination falls.

     2.02 Rent shall be absolutely net to Sublessor without any abatement, diminution, reduction,
deduction, counterclaim, credit, setoff or offset whatsoever (except as may be required in any
proceeding where the right to assert any claim against Sublessor would be extinguished unless a
counterclaim, set off, or deduction is asserted in such proceeding) so that each Sublease Year of
the Sublease Term shall yield, net to Sublessor, all fixed rent. Sublessee shall pay all costs,
expenses and charges of every kind relating to the Subleased Premises that may arise or

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become due or payable during or after (but attributable to a period falling within) the
Sublease Term.

     2.03 Sublessee covenants and agrees to pay to Sublessor one-third (1/3) of the costs of the
security guard(s) on the Subleased Premises as additional rent, on a monthly basis.

     2.04 (a) “Proportionate Share” means Sixty-Six and 52/100 percent (66.52%). Sublessee
covenants and agrees to pay to Sublessor a Proportionate Share of the Building Insurance as
additional rent, as provided in Article X hereof, and the expenses, costs and charges described
below in Section 2.04(b).

          (b) Except as otherwise stated herein, Sublessee hereby agrees to reimburse Sublessor for
Sublessee’s Proportionate Share of the costs and expenses under the Master Lease actually paid by
Sublessor to Landlord, consisting of Operating Expenses pursuant to Section 4.09(a), maintenance
under Section 12.05, and Impositions actually charged and paid in Article 5 of the Master Lease (it
being understood that neither Sublessor nor Sublessee shall be obligated to pay Taxes). Sublessee
shall be responsible for Rail Car Fees incurred by Sublessee’s use of rail cars pursuant to Section
4.05 of the Master Lease

     2.05 It is expressly understood that Sublessee is responsible for a proportionate Share of all
utilities furnished to the Demised Premises, except that Sublessee’s share of and obligation to pay
for electricity consumed at the Subleased Premises shall be computed as follows:

          (a) The amount of electric consumption consumed (as measured in KW or Kwha) that Sublessee
shall pay Sublessor for shall be determined by calculating (i) the difference between the total
electric consumed for the entire Demised Premises, (ii) less the sum of electric consumed as
indicated on and for (A) Sublessor’s submeter, (B) the submeter of any other tenant in the Demised
Premises and (C) the existing submeter for measuring electricity consumed by

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Sublessee’s refrigeration, and then (iii) multiplying the result by (A) so long as the office
area in the Demised Premises (“Office Area”) remains unoccupied, 100% and (B) at any time the
Office Area becomes occupied, 77.47% and (iv) adding back the consumption shown on the meter
referred to in (ii)(C); or

          (b) If Sublessor installs a submeter pursuant to Section 2.06(b) in the now unmetered areas of
Subleased Premises, the electric consumption shown on such submeter and the refrigeration submeter
described in (a)(ii)(C) above.

     2.06 (a) Sublessor represents that there are electric utility systems and appliances supplying
electricity to the Subleased Premises, If Sublessee requires additional electric power or any
electrical upgrades for its particular needs and consumption, Sublessee shall make at its sole cost
all necessary arrangements with the public utility companies supplying services to the Subleased
Premises for the installation of such additional utility systems and/or appliances necessary to
furnish sufficient electricity and other utilities to the Subleased Premises for Sublessee’s
purposes. Sublessor is under no obligation and shall not supply to the Subleased Premises any
utilities. Sublessee agrees to make its own arrangements with the public utility company servicing
the Subleased Premises for billing and payment of all charges for electricity, gas, water, and all
other utilities consumed by Sublessee in the Subleased Premises, and shall furnish its own air
conditioning to the Subleased Premises, all at its own cost and expense. Sublessee covenants and
agrees to reimburse Sublessor for 77.47% of any and all deposits required to provide initial
electricity to the Subleased Premises. In no event shall Sublessor be responsible for charges for
electricity or any other utilities consumed in the Subleased Premises by Sublessee.

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          (b) In connection with making arrangements to supply electricity for Sublessee’s use,
Sublessor shall have the right in Sublessor’s sole discretion to install a submeter to measure
Sublessee’s usage of electricity in the Subleased Premises. If Sublessor shall install such a
submeter, the amount to be paid by Sublessee for electricity consumed in the Subleased Premises
shall be determined by meter or meters and related equipment installed by Sublessor, at Sublessor’s
expense and billed in the aggregate shown on such meters. Bills for electricity consumed by
Sublessee, which Sublessee hereby agrees to pay, shall be rendered by Sublessor to Sublessee at
such time as Sublessor may elect and shall be payable as additional rent within 15 days after
rendition of any such bill. The amount to be charged to Sublessee by Sublessor per “KW” and “KWHR”
pursuant to this Article for electricity supplied to the Subleased Premises on a submetered basis
and consumed within the Subleased Premises, as shown on the meter(s) measuring Sublessor’s
consumption of electricity, shall be at the same cost which Sublessor from time to time purchases
each KW and KWHR of electricity for the same period from the utility company. It is the intent and
purpose of the parties hereto that the additional rent payable by Sublessee pursuant to this
Article for submetered electric shall be equal to Sublessor’s cost to furnish electric energy to
the Subleased Premises.

          (c) Unless caused by the actions, omissions or neglect of the Sublessor, its other tenants,
agents, servants and/or employees, interruption or curtailment of electric services shall not
constitute a constructive or partial eviction nor entitle Sublessee to any compensation or
abatement of rent. Sublessee covenants and agrees that at all times its use of electric current
shall never exceed the capacity of the existing feeders to the building or of the risers or wiring
installation. Sublessee shall make no alteration or addition to the electrical equipment without
the prior written consent required in Article I of this Sublease.

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ARTICLE III.

Subordination; Assumption of

Certain Master Lease Terms by Sublessee

     3.01 Sublessor has delivered to Sublessee a complete and accurate copy of the Master Lease,
except for the rent and certain other financial provisions contained in Sections 4.01 and 4.02,
which have been redacted. This Sublease shall be subject and subordinate to (i) the Master Lease (a
true copy of which, with Sections 4.02 and 4.03 redacted, is attached hereto as Exhibit B)
and to all of the terms, provisions, covenants and conditions thereof and (ii) any and all
amendments of the Master Lease or supplemental agreements relating thereto hereafter made between
Landlord and Sublessor provided, however, that Sublessor shall not enter into any such amendments
or supplemental agreements that shall (I) adversely affect Sublessee’s rights hereunder, (2)
increase Sublessee’s obligations hereunder beyond a de minimus extent, (3) decrease
the size of the Subleased Premises, or (4) shorten the Sublease Term to a date that is earlier than
the Expiration Date. Sublessee shall in no case have any rights under this Sublease greater than
Sublessor’s rights as Tenant under the Master Lease. The foregoing provisions shall be
self-operative, and no further instrument of subordination shall be necessary to effectuate such
provisions unless required by Landlord or Sublessor, in which event Sublessee shall, upon demand by
Landlord or Sublessor at any time and from time to time, execute, acknowledge and deliver to
Sublessor and Landlord any and all instruments that Sublessor or Landlord deem reasonably necessary
or proper to confirm such subordination of this Sublease and the rights of Sublessee hereunder.
Sublessee hereby appoints Sublessor its attorney in fact, coupled with an interest, for the purpose
of executing an instrument confirming this subordination if Sublessee shall fail to execute,
acknowledge and/or deliver any such instrument of subordination within ten (10) business days after
Landlord’s or Sublessor’s demand therefor.

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     3.02 To the extent not inconsistent with the agreements or understandings expressed or implied
in this Sublease or applicable only to the original parties to the Master Lease (e.g., the rent and
additional rent reserved under the Master Lease), the terms, provisions, covenants and conditions
of the Master Lease are hereby incorporated herein by reference on the following understandings:

          (a) The term “Landlord” as used therein shall refer to Sublessor hereunder, its successors and
assigns and the term “Tenant” as used therein shall refer to Sublessee hereunder, its permitted
successors and assigns. Whenever the Master Lease refers to an obligation of Landlord or Tenant
with respect to the “Demised Premises”, the same shall mean an obligation of Sublessor or Sublessee
hereunder with respect to the Subleased Premises.

          (b) Wherever it is provided in the Master Lease that Landlord has the right to elect to
perform any covenant of the Tenant thereunder upon default of the Tenant in observing or complying
with such covenant, Sublessor shall have corresponding rights with respect to any default of
Sublessee.

          (c) Sublessor shall not be obligated to perform and shall not be liable for the performance by
Landlord of any of the obligations of Landlord under the Master Lease, but shall perform such
obligations hereunder to the extent the word “Landlord” means “Sublessor” as provided in Section
3.02(a) above. Sublessee shall have no claim against Sublessor by reason of any default on the part
of Landlord under the Master Lease. Sublessor shall fully perform all of its payment and other
obligations under the Master Lease as and when such obligations are required to be performed.
Sublessor shall not accept any cancellation or surrender of the Master Lease, or take any action
which would cause a voluntary or involuntary termination of the Master Lease, prior to the
Expiration Date or sooner termination of this Sublease. Sublessor shall

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take whatever action shall be reasonably required to enforce for the benefit of Sublessee the
obligations of Landlord to Sublessor under the Master Lease insofar as they relate to the Subleased
Premises. Subject to the foregoing provisions of this Section, Sublessor shall not be responsible
for Landlord’s failure to furnish any service, maintenance or repairs to the Subleased Premises,
and Sublessee shall in no event be entitled to any allowance, reduction, or adjustment of the rent
or additional rent payable under this Sublease by reason of the failure of Landlord to comply with
Landlord’s obligations under the Master Lease, if any, to supply or render the same.

          (d) Except as expressly modified or superseded by the terms of this Sublease, with respect to
the Subleased Premises, Sublessee shall observe and perform the terms, provisions, covenants and
conditions of the Master Lease on the part of the Tenant thereunder to be observed and performed,
and shall not do or suffer or permit anything to be done which would result in a default under the
Master Lease or cause the same to be terminated or forfeited.

          (e) For the purposes of incorporating the terms of the Master Lease into this Sublease, the
Master Lease is modified as follows: (i) Sections 2.02, 2.04, 4.01, 4.02, 4.07(a), 4.09(b)(i),
4.10, 10.01, 10.02, 23.01 are deleted in their entirety, and (ii) Article 8 and 9 are subject to
the rights of Sublessor.

          (f) Sublessor shall give Sublessee any notice of default that it receives from Landlord under
the Master Lease. Sublessee shall have the right to use “self help” to cure any monetary or
nonmonetary breach of Sublessor’s obligations hereunder or under the Master Lease which has caused
the Landlord to notify Sublessor that it has committed a Default or Event of Default under the
Master Lease. If the Master Lease terminates as a result of an action or omission within
Sublessor’s control that causes a default or breach by Sublessor under this Sublease and/or the
Master Lease, then Sublessor shall be liable to Sublessee for the actual

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damage suffered as a result of such termination, but in no event shall Sublessor be
responsible for any consequential damages.

          (g) Sublessee acknowledges that in the event of Landlord’s (i) termination of the Master Lease
for any reason, or (ii) re-entry or dispossess by Landlord under the Master Lease, Landlord may, at
its option, take over all of the right, title and interest of Sublessor hereunder and Sublessee
agrees that it shall, at Landlord’s option, attorn to Landlord pursuant to the then executory
provisions of this Sublease, except that Landlord shall not (i) be liable for any previous act or
omission of Sublessor under this Sublease, other than continuing defaults, (ii) be subject to any
offset not expressly provided in this Sublease which previously accrued to the Sublessee against
Sublessor, or (iii) be bound by any previous modification of this Sublease which is made without
Landlord’s consent or by any previous prepayment of more than one month’s rent unless previously
expressly approved by Landlord.

ARTICLE IV.

Notices and Service

     4.01 Whenever it is provided herein that notice, demand, request, consent, approval or other
communication shall or may be given to, or served upon, either of the parties by the other, or
whenever either of the parties desires to give or serve upon the other any notice, demand, request,
consent, approval or other communication with respect hereto or to the Subleased Premises, each
such notice, demand, request, consent, approval or other communication shall be in writing and
shall be effective for any purpose only if given (a) by hand to an officer of the entity with proof
of delivery, (b) by any recognized overnight courier, or (c) by mailing the same by express or
certified mail, postage prepaid, return receipt requested, and addressed in the case of (b) or (c)
to:

     If to Sublessor:

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A.L. Bazzini Co., Inc.

200 Food Center Drive

Bronx, New York 10474

Attention: Rocco Damato, President

with a copy to:

Law Offices of Harvey I. Krasner

641 Lexington Avenue

Twentieth Floor

New York, New York 10022

Attention: Harvey I. Krasner, Esq.

(a) If to Sublessee:

Dairyland USA Corp.

1300 Viele Avenue

Bronx, New York 10474

Attention: Dean Facatselis

with a copy to:

Rivkin Radler LLP

EAB Plaza

Uniondale, NY 11556-0111

Attention: William Cornachio

or to such other address as Sublessee may from time to time designate by notice given to Sublessor
by express or certified mail, return receipt requested.

     4.02 Every notice, demand, request, consent, approval or other communication hereunder shall
be deemed to have been given or served three (3) business days after the time that the same shall
have been actually deposited in the United States mails, postage prepaid, as aforesaid, except that
notice by overnight courier or express mail shall be deemed effective on the business day following
the date delivered to the express mail or overnight courier and notice by hand shall be effective
upon delivery, as evidenced by a signed receipt, as the case may be.

     4.03 Except as otherwise set forth herein, whenever in the Master Lease a time is specified
for Tenant’s giving of any notice to or making any demand upon Landlord, such time is

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hereby changed by subtracting one day therefrom for the purpose of Sublessee’s notice to or
demands upon Sublessor, and whenever in the Master Lease a time is specified for Landlord’s giving
of any notice to or making any demand upon Tenant, such time is hereby changed by adding one day
for the purposes of Sublessor’s notices to or demands upon Sublessee. Whenever in the Master Lease
a time is specified within which the Tenant thereunder must give notice to or make a demand upon
Landlord following an event, or within which Tenant must respond to any notice, request, or demand
previously given or made by Landlord thereunder, or comply with any obligation on Tenant’s part
thereunder, such time is hereby changed by subtracting one day therefrom for purposes of
Sublessee’s notices to or demands upon Sublessor, or for the purpose of a response to a notice
request or demand by Sublessor. Whenever in the Master Lease a time is specified within which the
Landlord thereunder must give notice to or make a demand upon Tenant following an event, or within
which Landlord must respond to any notice, request, or demand previously given or made by Tenant
thereunder, such time is hereby changed by adding one day thereto for purposes of Sublessor’s
notices to or demands upon Sublessee, or the purpose of a response to a notice, request or demand
by sublessee. It is the purpose and intent of the foregoing provisions to provide Sublessor with
time within which to transmit to Landlord any notices or demands received from Sublessee, and to
transmit to Sublessee any notices or demands received from Landlord.

ARTICLE V.

Right of Sublessor to Cure Sublessee’s Defaults

     5.01 (a) If Sublessee shall fail to perform any of the terms, provisions, covenants or
conditions of this Sublease on its part to be performed, and if such failure shall constitute a
default under the Master Lease, then Sublessor may, after written notice, at its option, perform
any such term, provision, covenant or condition, and the full cost and expense of such

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performance shall immediately be due and owing by Sublessee to Sublessor, together with
interest thereon at the Late Charge Rate plus one percent from the date of payment thereof by
Sublessor.

          (b) If Sublessor shall fail to perform any of the terms, provisions, covenants or conditions
of this Sublease or the Master Lease on its part to be performed, and if such failure shall
constitute a default under this Sublease or the Master Lease, then Sublessee may, after written
notice, at its option, perform any such term, provision, covenant or condition, and the full cost
and expense of such performance shall immediately be due and owing by Sublessor to Sublessee,
together with interest thereon at the Late Charge Rate plus one percent from the date of payment
thereof by Sublessee.

     5.02 (a) If Sublessee shall default in the performance or observance of any term, covenant, or
agreement contained herein or in the Master Lease as herein incorporated, and if such default shall
not have been remedied after notice given by Sublessor to Sublessee within any grace period and
period of time providing an opportunity to cure (as modified by Article 4 of this Sublease)
provided for under the Master Lease, then Sublessor shall be entitled to exercise any and all
rights and remedies to which Sublessor is entitled by law or which are specifically granted to
Landlord under the Master Lease, which rights and remedies are hereby incorporated herein and made
a part hereof with the same force and effect as though herein specifically set forth, except in no
case shall there be a recovery of any consequential damages by Sublessor against Sublessee.

          (b) If Sublessor shall default in the performance or observance of any term, covenant, or
agreement contained herein or in the Master Lease as herein incorporated, and if such default shall
not have been remedied after notice given by Sublessee to Sublessor within

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any grace period and period of time providing an opportunity to cure (as modified by Article 4
of this Sublease) provided for under the Master Lease, then Sublessee shall be entitled to exercise
any and all rights and remedies to which Sublessee is entitled by law or which are specifically
granted to Tenant under the Master Lease, which rights and remedies are hereby incorporated herein
and made a part hereof with the same force and effect as though herein specifically set forth,
except in no case shall there be a recovery of any consequential damages by Sublessee against
Sublessor.

     5.03 (a) Sublessee covenants and agrees to indemnify Sublessor and hold it safe and harmless
against any and all claims, losses, damages and liabilities (including reasonable attorneys’ fees)
resulting from or arising out of (i) any breach or default hereunder on the part of Sublessee, (ii)
any work done in or to the Subleased Premises by Sublessee or its agents, servants, employees or
contractors, or by any person claiming through or under Sublessee, (iii) any act, omission,
negligence or other fault on the part of Sublessee or its agents, servants, employees, contractors,
undertenants, or licensees, or (iv) any accident, injury or damage whatsoever to any person or
entity occurring during the Sublease Term in or about the Subleased Premises, unless the same shall
have been caused by the negligence of Landlord or Sublessor, a breach or default by Landlord or
Sublessor under this Sublease or the Master Lease, or resulting from or arising out of Sublessor’s
use and occupancy of the Demised Premises.

          (b) Sublessor covenants and agrees to indemnify Sublessee and hold it safe and harmless
against any and all claims, losses, damages and liabilities (including reasonable attorneys’ fees)
resulting from or arising out of (i) any breach or default hereunder or under the Master Lease on
the part of Sublessor, (ii) any work done in or to the Subleased Premises or the Demised Premises
by Sublessor or its agents, servants, employees or contractors, or by any

17

 

person claiming through or under Sublessor, (iii) any act, omission, negligence or other fault
on the part of Sublessor or its agents, servants, employees, contractors, undertenants, or
licensees, or (iv) any accident, injury or damage whatsoever to any person or entity occurring
during the Sublease Term hereof in or about the Subleased Premises or the Demised Premises, unless
the same shall have been caused by the negligence of Sublessee, a breach or default by Sublessee
under this Sublease or the Master Lease, or resulting from or arising out of Sublessee’s use and
occupancy of the Subleased Premises.

ARTICLE VI.

Covenants and Approvals of Sublessor

     6.01 If this Sublease requires the consent or approval of Sublessor prior to the taking of any
action, then it shall be a condition precedent to the taking of such action that the prior consent
or approval of Landlord shall have been obtained if the same must be obtained under the Master
Lease. Except as set forth below, Sublessor shall have no duty or responsibility with respect to
obtaining the consent or approval of Landlord when the same is required under the terms of the
Master Lease other than the mere transmission by Sublessor to Landlord of Sublessee’s request for
such consent or approval.

     6.02 Sublessor shall obtain the consent of Landlord to this Sublease in accordance with the
provisions of Section 10.02 of the Master Lease, and shall use its best reasonable efforts to
obtain an estoppel certificate from Landlord in the form of Exhibit C. Sublessee represents that
neither it nor any of its officers, directors or shareholders is a Prohibited Person.

ARTICLE VII.

Broker

     7.01 Sublessee and Sublessor each covenants, warrants and represents that it did not consult
with or negotiate with any broker or finder in connection with the rental of the Subleased Premises
or in procuring this Sublease. Sublessor and Sublessee hereby indemnify and agree to

18

 

hold each other harmless from and against any and all claims, actions, losses, costs and
expenses (including reasonable attorneys’ fees) which may arise in connection with or be suffered
by Sublessor or Sublessee by reason of any breach of the foregoing covenants, warranties and
representations.

ARTICLE VIII.

Termination of Master Lease

     8.01 If the Master Lease shall be terminated by Landlord for any reason other than default by
Sublessor, as Tenant thereunder, pursuant to any right given to Landlord under the Master Lease,
then this Sublease shall terminate automatically without notice to Sublessee and without any
liability on the part of Sublessor to Sublessee as a result of such termination. Sublessor agrees
that Sublessor will not voluntarily terminate the Master Lease, other than due to circumstances of
fire, casualty, condemnation or Landlord’s default.

ARTICLE IX.

Security

     9.01 Sublessee shall, and hereby does covenant to, deposit with Sublessor, immediately prior
to and also as a condition of the commencement of this Sublease, an amount equal to one sixth of
the rent for the first Sublease Year (i.e. $57,291.68), and thereafter, on or before the first day
of each subsequent Sublease Year, an amount sufficient to increase the amount of deposit with
Sublessor so that such amount on deposit is equal to one sixth of the rent of such Sublease Year,
as a security deposit for the faithful performance by Sublessee of its obligations under the terms
hereof. If Sublessee defaults in the performance of any of the terms of this Sublease, including
the payment of rent or any additional rent, Sublessor may use, apply or retain the whole or any
part of the security so deposited to the extent required for the payment of any rent or for any sum
which Sublessor may expend or may be required to expend by reason of Sublessee’s default in respect
of any of the terms of this Sublease, including any damages or

19

 

deficiency in the re-letting of the Subleased Premises, whether accruing before or after
summary proceedings or other re-entry by Sublessor. In the case of every such use, application or
retention, Sublessee shall, on demand, pay to Sublessor the sum so used, applied or retained which
shall be added to the security deposit so that the same shall be replenished to its former amount.
If Sublessee shall fully and punctually comply with all of the terms of this Sublease, the security
shall be returned to Sublessee within ten (10) days after the termination of this Sublease and
delivery of exclusive possession of the Subleased Premises to the Sublessor.

ARTICLE X.

Insurance

     10.01 (a) Sublessee shall not violate, or permit the violation of, any order, rule or
regulation of the New York Board of Fire Underwriters, and shall not do, or permit anything to be
done, or keep or permit anything to be kept in the Subleased Premises which would increase the fire
or other casualty insurance rate on the Building or the property therein over the rate which would
otherwise then be in effect (unless Sublessee pays the resulting increased amount of premium as
provided in Section (b) of this Article) or which would result in insurance companies of good
standing refusing to insure the Building or any equipment or property contained therein in amounts
and at normal rates reasonably satisfactory to Sublessor and Landlord.

          (b) If, by reason of any act or omission on the part of Sublessee, the rate of fire insurance
with extended coverage on the Building or equipment or other property of Sublessor or Landlord
shall be higher than it otherwise would be, Sublessee shall reimburse Sublessor or Landlord, as the
case may be, on demand, for that part of the premiums for fire insurance and extended coverage paid
by Sublessor or Landlord, as the case may be, because of such act or omission on the part of
Sublessee, which sum shall be deemed to be additional rent and collectible as such.

20

 

          (c) In the event that any dispute should arise between Sublessor or Landlord and Sublessee
concerning rates, a schedule or make up of rates for the Building or the Subleased Premises, as the
case may be, issued by the New York Fire Insurance Rating Organization or other similar body making
rates for fire insurance and extended coverage for the premises concerned, shall be presumptive
evidence of the facts therein stated and of the several items and charges in the fire insurance
rates with extended coverage then applicable to such premises.

          (d) Sublessee shall obtain and keep in full force and effect during the Sublease Term at its
own cost and expense comprehensive general liability insurance including contractual liability,
such insurance to afford protection in an amount of not less than $1,000,000 primary coverage with
$3,000,000 umbrella coverage combined single limit per occurrence for bodily injury (or death), and
for damage to property, protecting the Sublessor, the Landlord and the Administrator as additional
insureds, against any and all claims for personal injury, death or property damage occurring in,
upon, adjacent, or connected with the Subleased Premises and any part thereof. Said insurance is to
be written on a form satisfactory to Sublessor by good and solvent insurance companies of
recognized standing, admitted to do business in the State of New York which shall be satisfactory
to the Sublessor and Landlord. Sublessee shall pay all premiums and charges therefor and upon
failure to do so Sublessor or Landlord may, but shall not be obligated, to make such payments, and
in such latter event the Sublessee agrees to pay the amount thereof to Sublessor or Landlord, as
the case may be, on demand and said sum shall be deemed to be additional rent and in each instance
collectible on the first day of any month following the date of notice to Sublessee in the same
manner as though it were rent originally reserved hereunder. Sublessee will use its best efforts to
include in such Public Liability Insurance policy a provision to the effect that same will be
non-cancelable except upon thirty

21

 

days’ advance written notice to Sublessor, Landlord and the Administrator. Sublessee shall
furnish Sublessor with certificates evidencing such insurance, together with any renewals,
replacements or endorsements, to the end that said insurance shall be in full force and effect for
the benefit of the Sublessor, Landlord and Administrator throughout the Sublease Term. In the event
Sublessee shall fail to procure and place such insurance, Sublessor or Landlord may, but shall not
be obligated to, procure and place same, in which event the amount of the premium paid shall be
refunded by Sublessee to Sublessor or Landlord, as the case may be, upon demand and shall in each
instance be collectible on the first day of the month or any subsequent month following the date of
payment by Sublessor or Landlord, in the same manner as though said sums were additional rent
reserved hereunder.

          (e) Each party agrees to use its best efforts to include in each of its insurance policies
(insuring the Building and Landlord’s and Sublessor’s property therein and rental value thereof in
the case of Landlord, and insuring Sublessee’s Property and business interest in the Subleased
Premises (business interruption insurance) in the case of Sublessee, against loss, damage, or
destruction by fire or other casualty) a waiver of the insurer’s right of subrogation against the
other party, or if such waiver should be unobtainable or unenforceable (a) an express agreement
that such policy shall not be invalidated if the insured waives the right of recovery against any
party responsible for a casualty covered by the policy before the casualty or (b) any other form of
permission for the release of the other party. If such waiver, agreement or permission shall not
be, or shall cease to be, obtainable without additional charge or at all, the insured party shall
so notify the other party promptly after learning thereof. In such case, if the other party shall
so elect and shall pay the insurer’s additional charge therefor, such waiver, agreement or
permission shall be included in the policy, or the other party shall be named as an

22

 

additional insured in the policy. Each such policy which shall so name a party hereto as an
additional insured shall contain, if obtainable, agreements by the insurer that the policy will not
be canceled without at least ten (10) days prior notice to both insureds and that the act or
omission of one insured will not invalidate the policy as to the other insured. Any failure by
Sublessee, if named as an additional insured, promptly to endorse to the order of Sublessor or
Landlord, without recourse, any instrument for the payment of money under or with respect to the
policy of which Sublessor is the owner or original or primary insured, shall be deemed a default
under this Sublease.

          (f) Each party hereby releases the other party with respect to any claim (including a claim
for negligence) which it might otherwise have against the other party for loss, damage or
destruction with respect to its property (including rental value or business interruption)
occurring during the Sublease Term and with respect and to the extent to which it is insured under
a policy or policies containing a waiver of subrogation or permission to release liability or
naming the other party as an additional insured, as provided in Sections (d) and (e) of this
Article. If notwithstanding the recovery of insurance proceeds by either party for loss, damage or
destruction of its property (or rental value or business interruption) the other party is liable to
the first party with respect thereto or is obligated under this Sublease to make replacement,
repair or restoration or payment, then provided the first party’s right of full recovery under its
insurance policies is not thereby prejudiced or otherwise adversely affected, the amount of the net
proceeds of the first party’s insurance against such loss, damage or destruction shall be offset
against the second party’s liability to the first party therefor, or shall be made available to the
second party to pay for replacement, repair or restoration, as the case may be.

23

 

          (g) The waiver of subrogation or permission for release referred to in Section (e) of this
Article shall extend to the agents of each party and its and their employees and, in the case of
Sublessee, shall also extend to all other persons and entities occupying or using the Subleased
Premises in accordance with the terms of the Master Lease, but only if and to the extent that such
waiver or permission can be obtained without additional charge (unless such party shall pay such
charge). The releases provided for in Section (f) of this Article shall likewise extend to such
agents, employees and other persons and entities, if and to the extent that such waiver or
permission is effective as to them. Nothing contained in this Article shall be deemed to relieve
either party of any duty imposed elsewhere in this Sublease or the Master Lease to repair, restore
or rebuild or to nullify any abatement of Rents provided for elsewhere in this Sublease or the
Master Lease. Except as otherwise provided in Section (d) of this Article, nothing contained in
Sections (e) and (f) of this Article shall be deemed to impose upon either party any duty to
procure or maintain any of the kinds of insurance referred to therein or any particular amounts or
limits of any such kinds of insurance. However, each party shall advise the other, upon request,
from time to time (but not more often than once a year) of all of the policies of insurance it is
carrying of any of the kinds referred to in Section (d) of this Article, and if it shall
discontinue any such policy or allow it to lapse, shall notify the other party thereof with
reasonable promptness. The insurance policies referred to in Section (d) of this Article shall be
deemed to include policies procured and maintained by a party for the benefit of its lessor,
mortgagee or pledgee.

          (h) Sublessee agrees and acknowledges that Sublessee is responsible for and shall pay to
Sublessor as additional rent a Proportionate Share of the cost of obtaining and

24

 

maintaining all risk property damage insurance meeting all of the standards, limits, minimums
and requirements described in Section 7.08 of the Master Lease.

ARTICLE XI.

Miscellaneous

     11.01 If Sublessee fails to pay any rent or additional rent within ten days after the same is
due and payable, Sublessee shall pay a late charge on such unpaid amount at the rate of 1% in
excess of the Late Charge Rate.

     11.02 This Sublease and the Master Lease incorporated herein contain the entire agreement
between the parties with respect to the subject matter of this Sublease, and all prior negotiations
and agreements with respect thereto are merged in this Sublease.

     11.03 This Sublease may not be changed, modified or discharged, in whole or in part, and no
oral or executory agreement shall be effective to change, modify or discharge this Sublease, in
whole or in part, or any obligations hereunder, unless such agreement is set forth in a written
instrument executed by the party against whom enforcement is sought.

     11.04 No consent or approval of Sublessor shall be deemed to have been given or to be
effective for any purpose unless such consent or approval is set forth in a written instrument
executed by Sublessor.

     11.05 The terms, covenants, and conditions contained in this Sublease shall bind and inure to
the benefit of Sublessor and Sublessee and their successors and assigns, except as other-wise
expressly provided in this Sublease.

     11.06 Sublessee and Sublessor each represents and warrants that it has the right and authority
to enter into this Sublease. Sublessor warrants and represents to Sublessee that (i) the Master
Lease is in full force and effect, without default, and has not been amended or modified, (ii) all
rent and additional rent and all other charges required to be paid under the Master Lease

25

 

have been paid through the date hereof, (iii) neither Landlord nor Sublessor is in default
under the terms of the Master Lease and (iv) no event has occurred which, with notice or lapse of
time, would constitute a default under the Master Lease by Sublessor or Landlord.

     11.07 (a) This Sublease is subject to approval of Landlord in accordance with the terms of the
Master Lease. If Landlord does not consent to this Sublease for any reason whatsoever within 20
business days after full execution of this Sublease, then at Sublessee’s option, this Sublease
shall be terminated and of no force or effect. If Landlord does not consent to this Sublease for
any reason whatsoever within 60 business days after full execution of this Sublease, then at either
party’s option, this Sublease shall be terminated. In either such case, all rent and other charges,
if any, paid to cover periods in advance of the termination date shall be refunded, without
interest, to Sublessee.

          (b) Sublessor agrees to promptly submit this Sublease to Landlord, but shall be under no
obligation or requirement to take any further action to obtain such consent, except as provided
below. Sublessee and Sublessor each agree to submit to Landlord, upon request, any information or
documentation required by Landlord in processing Sublessor’s application for consent to this
Sublease. Sublessee agrees to pay any and all fees and expenses charged by Landlord to Sublessor
and/or Sublessee in connection with the issuance of its consent to this Sublease and/or the review
of the documentation and information submitted in connection therewith.

     11.08 Sublessee shall promptly furnish Sublessor with copies of all notices which Sublessee
shall receive from Landlord, and Sublessor shall promptly furnish Sublessee with copies of all
notices from Landlord relating to the Subleased Premises, the Demised Premises or the Master Lease
which Sublessor receives from Landlord.

26

 

     11.09 If Sublessor is unable to give possession of the Subleased Premises on the Commencement
Date for any reason, Sublessor shall not be subject to any liability for failure to give possession
on said date and the validity of this Sublease shall not be impaired under such circumstances, nor
shall the same be construed in any wise to extend the Sublease Term, but the fixed rent and
additional rent payable hereunder shall be abated (provided Sublessee is not responsible for the
inability to obtain possession) for the period of time after the Commencement Date that Sublessor
is delayed in delivering possession of Subleased Premises to Sublessee. The provisions of this
Article are intended to constitute “an express provision to the contrary” within the meaning of
Section 223-a of the New York Real Property Law.

     11.10 This Sublease and the Exhibits attached hereto contain the entire agreement between the
parties, and any agreement hereafter made shall be ineffective to change, modify or discharge it in
whole or in part unless such agreement is in writing and signed by the party against whom
enforcement of the change, modification or discharge is sought. Sublessee shall not record this
Sublease without prior written consent of Sublessor. This Sublease shall bind and inure to the
benefit of the parties hereto and their respective successors and, subject to this Sublease,
assigns.

     11.11 This Sublease is submitted to Sublessee for signature with the understanding that it
shall not bind Sublessor or Sublessee unless and until it is duly executed by both Sublessee and
Sublessor and an executed copy delivered to Sublessee.

     11.12 At any time and from time to time within ten (10) days after a written request from
Sublessor, Sublessee shall execute, acknowledge and deliver to the Sublessor a written statement
certifying (i) that this Sublease has not been modified and is in full force and effect or, if
there has been modifications of this Sublease, that this Sublease is in full force and effect as

27

 

modified, and stating such modifications, (ii) the dates to which the fixed rent, additional
rent and other charges hereunder have been paid, (iii) that to the best of Sublessee’s knowledge,
no defaults exist under this Sublease or, if any defaults do exit, specifying the nature of each
such default and (iv) as to such other matters as Sublessor may reasonably request.

     11.13 (a) Sublessee acknowledges that an assignment and/or sublet of the Subleased Premises,
either in whole or in part, is not permitted, except as provided in the following provisions of
this Section.

          (b) Sublessor hereby consents to and Sublessee shall have the right to assign this Sublease,
or permit use and occupancy of all or any part of the Subleased Premises to or by its wholly owned
subsidiary, Bel Canto Foods, LLC.

          (c) Sublessor shall not unreasonably withhold or delay its consent to an assignment or
sublease of all or part of the Subleased Premises to or by (i) an entity with which Sublessee may
merge or consolidate, (ii) any corporation, partnership, limited liability company or other entity,
which, directly or indirectly, control, is controlled by or under common control with Sublessee
(“control” meaning ownership of more than fifty (50%) percent of the equity interest in such
entity), or (iii) an acquirer of substantially all of Sublessee’s assets. No such sublease or
assignment of this Sublessee shall be permitted unless, in instance, (A) Sublessee (to the extent
that it continues to exist) and the permitted user or assignee both continue to remain liable to
Sublessor for all terms and obligations on the part of Sublessee to be performed under this
Sublease, (B) no such user, assignee or successor, or any Affiliate of such person or entity, is a
Prohibited Person and (C) Sublessor is given at least ten (10) days prior written notice of such
proposed use or assignment.

28

 

          (d) If Sublessee desires to assign this Sublease or sublet any portion of the Subleased
Premises other than as provided in Sections 11.13(b) or (c) above, Sublessee shall submit to
Sublessor a request to do so. Within 30 days of receipt of such request, Sublessor shall exercise
in writing its option to (i) cancel and terminate this Sublease if the request was to assign the
Sublease or (ii) if the request is to sublet either (A) the entire Subleased Premises or (B) a
portion of the Subleased Premises for the balance of the Sublease Term, to cancel and terminate
this Sublease with respect to such portion. Subject to the foregoing and to the consent of
Sublessor which shall not be unreasonably withheld or delayed, Sublessee may at any time during the
Sublease Term assign this Sublease or sublet the Subleased Premises, provided that (i) Sublessee
shall furnish Sublessor with the names of each proposed subtenant and the individual principals in
such proposed subtenant’s business entity, each of whom shall be a Permitted Person, (ii) such
proposed subtenant or assignee and principals submit to the Landlord’s “Vendex” background
investigation (or successor system serving the same function) at least forty-five (45) days prior
to the proposed commencement date of the assignment or sublease, (iii) the proposed subtenant or
assignee is not a Prohibited Person and (iv) Sublessee shall comply with the applicable provisions
of Article 10 of the Master Lease.

          (e) Sublessee acknowledges that, under the circumstances set forth in the Master Lease, the
consent of Landlord will be required to a sublease or assignment of the kind described in Sections
11.13(c) and (d). Sublessee acknowledges that Sublessor has no control over the consent of Landlord
in those circumstances, and that it may be given or withheld, as provided in the Master Lease.

          (f) During the Sublease Term, Sublessee shall cause any assignee or subtenant to comply with
its obligations under this Sublease as such obligations relate to the obligations of

29

 

Sublessee hereunder and Sublessor under the Master Lease. A violation or breach of any of the
terms, provisions or conditions of this Sublease or the Master Lease that results from, or is
caused by, an act or omission by any assignee or subtenant shall not prevent such violation or
breach from being an Event of Default hereunder nor relieve Sublessee of Sublessee’s obligation to
cure such violation or breach, provided that Sublessor provide Sublessee with a reasonable period
to cause such violation or breach to be cured.

          (g) Sublessee shall not charge or collect from any assignee or subtenant an amount in excess
of the rental under this Sublease. Notwithstanding the foregoing, if, in any Sublease Year, the
total amount of the monies, including, without limitation, the rental, collected by Sublessee with
respect to any assignment or subleases during such Sublease Year exceeds the amount of the fixed
annual rent set forth in Article II, Sublessee shall pay fifty percent (50%) of such excess to
Sublessor. However, any amounts paid to Sublessee to pay or reimburse it for (i) the cost of the
sublease or assignment, such as (without limitation) brokerage fees or commissions or (ii) the
unamortized cost of any of Sublessee’s leasehold improvements, shall not be considered excess rent
for this purpose.

     11.14 Certain capitalized words and phrases used in this Sublease which are not defined herein
shall have the meanings given them in the Master Lease.

     11.15 (a) Sublessee acknowledges that Sublessor is the sole owner of the existing pallet
racks, rack storage units, freezer equipment and refrigeration equipment (collectively the
“Equipment”) now located on the Subleased Premises. Sublessor shall allow Sublessee to use the
Equipment during the Sublease Term. Sublessor shall have no obligation to repair or maintain the
Equipment, and at its sole cost and expense, Sublessee shall maintain the Equipment in reasonably
good condition and repair, consistent with sound business practice, but shall not be

30

 

required to make any repair which would be treated as a capital expenditure, or any repairs
beyond the normal useful life of the Equipment. If Sublessee vacates the Subleased Premises or if
the Sublease is terminated, the Equipment shall not be removed by Sublessee, shall remain on the
Subleased Premises and shall continue to belong to Sublessor.

          (b) The parties acknowledge that there are a number of wooden pallets now located on the
Demised Premises, which Sublessee shall have the ability and right to use during the Sublease Term,
without any obligation to repair or replace any pallets which are damaged or which are no longer
usable. Sublessee shall not dispose of any usable pallets for cash or other consideration, and
shall return all of Sublessor’s pallets, to the extent they then exist, to Sublessor at the end of
the Sublease Term.

ARTICLE XII.

Master Lease Compliance

     12.01 Required Sublease Clauses. The following provisions are in specific compliance with
Section 10.05 of the Master Lease:

          (a) This Sublease is subordinate and subject to the Master Lease, and shall be subject to the
prior approval of the Landlord.

          (b) Attached as Exhibit A is a diagram of the Subleased Premises.

          (c) The Subleased Premises constitutes 66.52% of the Demised Premises.

          (d) Sublessee agrees to defend, indemnify and hold Landlord harmless to the same extent and in
the same manner as does Sublessor pursuant to Article 17 of the Master Lease.

          (e) Except for security deposits, Sublessee shall not pay to Sublessor rent or other sums
payable under this Sublease for more than one (1) month in advance.

31

 

          (f) At Landlord’s option, on the termination of this Lease pursuant to Article 22 of the
Master Lease, Sublessee shall attorn to or shall enter into a direct lease on terms identical to
the Sublease with Landlord, for the balance of the unexpired term of the Sublease.

          (g) Sublessee shall maintain full and accurate books of account and records of its business
operation or enterprise, which books and records shall be so kept and maintained for at least six
(6) years after the end of each Sublease Year, as applicable.

          (h) Landlord or Landlord’s agents or representatives, from time to time during regular
business hours, upon reasonable notice shall be permitted to inspect and audit all books and
records and other papers and files of Sublessee relating to this Sublease and Sublessee shall
produce such books and records for such inspection, audit and for the reproduction, if requested,
by Landlord.

          (i) Sublessee shall comply with all Requirements.

          (j) Sublessee shall comply with the applicable requirements of Article 19 of the Master Lease.

     IN WITNESS WHEREOF, the parties hereto have executed this Sublease as of the day and year
first above written.

	 	 	 	 	 	 	 	 	 	 	 

	SUBLESSOR:	 	 	 	SUBLESSEE:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	A.L. BAZZINI CO., INC.	 	 	 	Dairyland USA Corp.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Rocco Damato, PRES
 

Rocco Damato, President
	 	 	 	By:
	 	/s/ Dean Facatselis
 

Dean Facatselis, Vice President and
	 	 
	 

	 	 	 	 	 	 	 	Chief Financial Officer	 	 

32exv10w2

Exhibit 10.2

LEASE AGREEMENT

     LEASE AGREEMENT (this “Lease”) dated December 29, 2004, between The Chefs’ Warehouse Leasing
Co., LLC, a New York limited liability company with an address at 1300 Viele Avenue, Bronx, New
York 10474 (“Landlord”) and Dairyland USA Corporation, a New York corporation with an address at
1300 Viele Avenue, Bronx, New York 10474 (“Tenant”).

     1. BASIC LEASE PROVISIONS

          1.1. Leased Premises. Landlord owns the real property at 1300 Viele Avenue, Bronx,
New York 10474 (the “Property”). Landlord hereby leases to Tenant, and Tenant leases from
Landlord, the Property and building located thereon (the “Building,” and collectively with the
Property, the “Premises”). The Premises includes the land upon which the Building stands and any
part or parts thereof utilized for parking, landscaped areas or other areas or improvements used in
connection with the Building, and the Building.

          1.2. Term. This Lease shall have a term of ten years beginning on December 29, 2004
(the “Commencement Date”), and ending December 31, 2014 (the “Term”). Each “Lease Year” shall
commence on December 1 and end on December 31, with the exception of the First Lease Year which
shall begin on the date Tenant takes occupancy of the Premises.

          1.3. Condition of Premises. Landlord shall deliver, and Tenant shall accept, the
Premises in “as-is” condition. Tenant acknowledges that, prior to the date hereof, Tenant has
inspected the Premises, is acquainted with its condition and accepts the Premises in its present
condition.

     2. RENT

          2.1. Rent. Rent shall accrue hereunder from the first day of the Term. Tenant shall
pay Landlord base rent at the annual rate of $950,000, subject to cumulative annual
increases effective the first day of each Lease Year of 3.5% (“Base Rent”). The Base Rent plus

 

 

the “Additional Rent” (defined in Section 2.2 below) together shall constitute the “Rent.” Base
Rent is payable by Tenant in advance, in equal monthly installments as indicated above. All
monthly installments of Base Rent shall be due and payable, without demand and without set-off, on
the first day of each calendar month during the Term. Base Rent due for any partial month shall be
prorated based on the actual number of days in the month in question.

          2.2. Additional Rent. In addition to Base Rent, Tenant shall pay, as “Additional
Rent,” (i) all Taxes (defined in Section 5.1 below), (ii) Landlord’s hazard, liability or other
insurance premiums, (iii) maintenance charges and all other costs and expenses associated with the
operation of the Premises, including but not limited to those costs and expenses related to
Tenant’s garbage removal and snow removal for Tenant’s parking and walk areas, and (iv) electric,
gas and water charges. Landlord shall have the same remedies for non-payment of Additional Rent as
Landlord has for non-payment of Base Rent. If not otherwise provided for herein, any Additional
Rent payable to Landlord under applicable provisions of this Lease shall be paid within 20 days of
demand. It is the parties’ intention and expectation that, for all purposes, this shall be a
“triple net” lease.

          2.3. Payment. On signing this Lease, Tenant shall pay Landlord $N/A, representing the
proportionate Base Rent for the two days of the month of December, 2004. Tenant shall pay Landlord
all amounts it is required to pay to Landlord hereunder, whether for Rent or otherwise, at the
place designated for the delivery of notices to Landlord pursuant to Section 17.

     3. USE

          (a) The Premises shall be used as a warehouse and wholesale distribution facility in
connection with Tenant’s specialty food distribution business, with ancillary administrative and
executive offices, and for no other purpose.

 

 

          (b) Tenant shall not use or occupy the Premises in any manner which in the reasonable judgment
of Landlord would (i) violate any laws or regulations of public authorities or other Requirements
(defined below), (ii) make void or voidable any insurance policy then in force with respect to the
Building or (iii) increase the insurance rate for the Building or any property located therein to
an amount great than the rate in effect prior to the commencement of Tenant’s occupancy.

          (c) Tenant shall not at any time use or occupy the Premises in violation of (i) the
certificate of occupancy or (ii) any special permit issued for the Building, Tenant’s portion
thereof or Tenant’s use of the Premises.

     4. REQUIREMENTS

          4.1. Compliance with Requirements of Law. Tenant currently is in compliance with and
shall be responsible for maintaining compliance with requirements of all laws, including
environmental laws, rules, regulations, ordinances, orders and licenses, whether enacted prior to
or after the date hereof (“Requirements”) of all state, federal, municipal and local governments
and any direction of any public officer pursuant to law (each a “Governmental Authority”) with
respect to or arising out of Tenant’s conduct of its business and the use or manner of use of the
Premises. Tenant shall not use the Premises for any illegal purpose or for any purpose for which
all necessary permits, licenses or authorizations have not validly been issued in accordance with
applicable Requirements. Tenant shall obtain and at all times maintain in good standing all
licenses, permits or authorizations in accordance with all Requirements which are necessary to
Tenant’s conduct of its business at the Premises (“Permits”).

          4.2 Abatement of Nuisances. Tenant shall at its expense comply with all Requirements
requiring the correction, prevention and abatement of nuisances connected with Tenant’s use or
occupancy of the Premises.

 

 

     5. TAXES

          5.1. Definitions. As used herein, “Taxes” shall mean the real estate taxes,
assessments (special or otherwise), sewer rents, rates and charges, and any other governmental
charges, general, specific, ordinary or extraordinary, foreseen or unforeseen, levied on a calendar
year or fiscal year basis against the Real Property. If at any time during the Term the method of
taxation prevailing at the date hereof shall be altered so that there shall be levied, assessed or
imposed in lieu of, or as an addition to, or as a substitute for, the whole or any part of the
taxes, levies, impositions or charges now levied, assessed or imposed on all or any part of the
Real Property (i) a tax, assessment, levy, imposition or charge based upon the rents received by
Landlord, whether or not wholly or partially as a capital levy or otherwise, (ii) a tax,
assessment, levy, imposition or charge measured by or based in whole or in part upon all or any
part of the Real Property and imposed on Landlord, (iii) a license fee measured by the rent payable
by Tenant to Landlord or (iv) any other tax, levy, imposition, charge or license fee however
described or imposed, then all such taxes, levies, impositions, charges or license fees or any part
thereof, so measured or based, shall be deemed to be Taxes.

          5.2. Payment of Taxes.

          (a) Tenant shall pay any and all Taxes levied or assessed against the Premises. Landlord
shall provide Tenant copies of the tax bills, and Tenant shall pay to Landlord or directly to the
taxing authority (as instructed by Landlord) the amount shown on such bills within ten days of
receipt. If Landlord requests, on the first day of each month, in addition to and together with
the monthly installment of Base Rent, Tenant shall pay Landlord on account of
Tenant’s Share of future increases in Taxes an amount equal to 1/12 of the amount shown on the
most recent tax bills, subject to adjustment for subsequent increases in Taxes. Landlord’s failure
to furnish the tax bills shall not affect Tenant’s obligation to pay Taxes.

 

 

          (b) Taxes shall be prorated between Landlord and Tenant to the extent that the Lease
commencement and termination dates do not correspond to the particular fiscal year for the
imposition and payment of Taxes. The obligations of Landlord and Tenant under the provisions of
this Article shall survive the expiration or any sooner termination of the Term.

     6. TENANT’S MAINTENANCE AND REPAIRS

          6.1. Tenant’s Maintenance. Tenant shall maintain and keep the entire Premises in good
order and repair, at Tenant’s sole cost and expense, and shall perform all repairs it is required
to make hereunder promptly. Tenant’s responsibility hereunder shall include structural repairs,
including but not limited to roof leaks, roof replacement, and maintenance, repair and replacement
of all doors, windows and garage doors in Tenant’s portion of the Premises. At the end of the
Term, Tenant shall deliver the Premises to Landlord in good order and condition, reasonable wear
and tear excepted, except in the case of fire or other casualty permitting Landlord the right to
terminate this Lease.

          6.2. Landlord’s Right to Repair. If within 30 days after the receipt of notice from
Landlord, Tenant fails to make the repairs it is required herein to make or fails to begin to
complete same with due diligence, Landlord may (but shall not be obliged to) make the necessary
repairs, and the expense incurred by Landlord in that connection shall be payable as Additional
Rent. Landlord also may complete, at Tenant’s expense without notice to Tenant, any and all
repairs which Tenant is herein obligated to make which Landlord believes to be of an emergency
nature requiring immediate attention.

     7. ALTERATIONS

          7.1. No Right to Alter. Tenant shall have no right to make any alteration, addition,
repair or improvement to the Premises without the prior written consent of the Landlord, which
shall not be unreasonably withheld or delayed.

 

 

          7.2. Alteration Permits. All alterations and improvements made by Tenant shall
conform to all Requirements. At Tenant’s request and at its sole cost, Landlord shall apply for or
join with Tenant in applying for all such permits as may be necessary for the completion of any
alteration to the Premises by Tenant and shall execute and deliver to Tenant all such consents as
may be needed to comply with all Requirements. Upon completion of any such alterations and
improvements, Tenant shall obtain all such certificates, permits or other licenses as are necessary
under applicable Requirements in connection with the use and occupancy of the Premises.

     8. LIENS

          Tenant shall not (and shall not cause or permit a third party to) create or place any lien or
encumbrance of any kind upon the Premises.

     9. UTILITIES.

          9.1. Utility Services. Tenant shall make arrangements with each utility company and
public body to provide, in Tenant’s name, electricity, telephone, heat, and water service necessary
for Tenant’s use of the Premises.

          9.2. Payment. Tenant shall pay directly to the companies furnishing utility service
the cost of all service connection fees and the cost of all utilities consumed by Tenant throughout
the Term. Tenant’s obligations for the payment of the costs incurred for utilities that serve the
Premises prior to the termination of this Lease shall survive termination hereof.

     10. INSURANCE

          10.1. Tenant’s Insurance Obligations. Tenant shall carry and maintain, at its sole
cost and expense, a broad form comprehensive general liability or commercial general liability
policy insuring Landlord and Tenant against any liability arising out of the ownership, use,
occupancy or maintenance of the Premises and a property and casualty insurance policy covering the
Premises and improvements thereon. In addition, during any time that Tenant

 

 

conducts any
construction at the Premises, Tenant shall maintain in effect a Builder’s All-Risk policy of
casualty and liability insurance.

          10.2. Insurance Policies. All of the policies required to be obtained by Tenant
pursuant to the provisions of this Article 10 shall be with companies authorized to do business in
New York and otherwise reasonably acceptable to Landlord. Each policy shall permit the release in
Section 10.3 below.

          10.3. Release of Liability. Landlord and Tenant hereby release each other from any
and all liability or responsibility to each other or any one claiming through or under them by way
of subrogation or otherwise, or any loss or damage caused by fire or any of the extended coverage
casualties, even if such fire or other casualty shall have been caused by the fault or negligence
of Landlord or Tenant or of any one for whom they may be responsible, provided that this release
shall be effective only with respect to loss or damage occurring during such time as Landlord’s and
Tenant’s policies of insurance shall contain a clause or endorsement to the effect that such
release shall not adversely affect or impair such policies or breach the right of Tenant or
Landlord (as the case may be) to recover thereunder. Each party shall have such a clause or
endorsement included in its policy and shall pay any cost of same.

     11. ASSIGNMENT AND SUBLETTING

          Tenant shall not assign, mortgage or encumber this Lease, or sublease any portion of the
Premises, without Landlord’s consent, which Landlord shall not unreasonably delay or
withhold. Tenant shall have the unrestricted right to assign or sublease the Premises to any
entity affiliated by common ownership with Tenant.

 

 

     12. SUBORDINATION.

          This Lease and the lien hereof upon the Premises, and all rights of Tenant hereunder, shall at
all times be subject and subordinate to the lien of any mortgage or mortgages which now affects, or
may hereafter, affect the Premises, and to all the renewals, modifications, consolidations,
replacements and extensions thereof. The recording of any such mortgage or mortgages shall
automatically create the priority hereinabove described, but Tenant shall upon request execute,
acknowledge and deliver to Landlord any instruments which are necessary to subordinate this Lease
and all rights hereunder to the lien of any such mortgage.

     13. SURRENDER.

          Upon the expiration or sooner termination of the Term of this Lease, Tenant shall surrender
the Premises in good condition, reasonable wear and tear and casualty excepted. If Tenant elects
to remove its trade fixtures, furniture, equipment and other personal property installed in the
Premises prior to the expiration or earlier termination of this Lease, Tenant shall repair any
damage to the Premises resulting from or caused by such removal.

     14. LANDLORD’S REPRESENTATIONS AND OTHER AGREEMENTS.

          14.1. Quiet Enjoyment. Upon paying the Rent herein set forth and performing its other
covenants and agreements herein set forth, Tenant shall peaceably and quietly have, hold and enjoy
the Premises for the Term without hindrance or molestation from Landlord, subject to the terms and
provisions of this Lease. Upon any sale of the Premises or Landlord’s estate therein, or the
assignment of Landlord’s interest under this Lease, Tenant shall look to each respective succeeding
grantee or assignee for the performance of Landlord’s obligations under
this Lease, provided such succeeding assignee assumes all performance and other obligations of
Landlord under this Lease.

 

 

          14.2. Ownership of Premises. Landlord warrants and represents that it is the sole
owner possessing good and marketable title to the Premises. Landlord has full right and authority
to execute this Lease for the Term, upon the conditions herein contained.

     15. EVENTS OF DEFAULT

          The following events shall be deemed to be events of default by Tenant under this Lease:

          15.1. Failure to Pay Rent. If Tenant shall fail to pay any Rent when due.

          15.2. Bankruptcy. If there shall be commenced by Tenant a voluntary case under the
Federal Bankruptcy Code or under any other applicable federal or state bankruptcy, insolvency or
other similar law, or if there shall be entered a decree or order for relief by a court having
jurisdiction in respect of Tenant under any involuntary case under the Federal Bankruptcy Code or
under any other applicable federal or state bankruptcy, insolvency or similar law which is not
withdrawn or dismissed within 60 days after filing, or if there shall be appointed any arrangement
for a receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator or similar
official of or for Tenant or for any substantial part of Tenant’s property which is not terminated
in 60 days.

          15.3. Assignments for Creditors; Attachments. If Tenant makes an assignment for
benefit of its creditors, or petitions for or submits this Lease under a writ of execution or
attachment.

          15.4. Failure to Comply with Lease Terms. If Tenant fails to comply with any other
term, provision or covenant of this Lease, and does not cure such failure within 15 days after
notice, unless such failure is of a nature that cannot be completely cured or remedied within
15 days, provided that Tenant shall have diligently commenced curing such default within such
15 day period and shall continue thereafter with reasonable diligence and in good faith to

 

 

proceed
to remedy or cure such default, then Tenant shall be permitted a reasonable additional period of
time to remedy or cure such default.

     16. LANDLORD’S REMEDIES

          Upon the occurrence of an event of default, Landlord shall have the right to terminate this
Lease, and at any time thereafter to recover possession of the Premises or any part thereof and
expel and remove therefrom Tenant and any other person occupying the same, by any lawful means, and
repossess the Premises. Landlord shall also be entitled to recover from Tenant any deficiency
between the Rent and the net amount, if any, of the rents collected on account of the leases(s) of
the Premises for each month of the period which would otherwise have constituted the balance of the
Term. The foregoing are without prejudice to any of the remedies that Landlord may have under this
Lease, at law or in equity by reason of Tenant’s default or of such termination.

     17. NOTICES AND CONSENTS

          All notices, consents, approvals and other communications required or permitted to a party
under this Agreement shall be in writing and shall be delivered personally to, sent by any national
overnight courier or mailed first class certified mail, return receipt requested, to the respective
party at the address set forth on the first page of this Lease. Any item delivered in accordance
with the provisions of this Section shall be deemed to have been delivered (i) on the date of
personal delivery, (ii) on the business day following the date sent by overnight courier or (iii)
on the fifth day following the date on which it was so mailed, as the case may be. Addresses for
notices may be changed, as provided herein.

     18. SIGNS

          Tenant may erect and maintain, at its sole cost and expense, one or more signs, subject to the
provisions of this Section. The sign shall comply with all Requirements, and the

 

 

covenants,
restriction and agreements, if any, affecting the Building on the Premises. Tenant shall maintain
such sign in good repair, and upon termination of this Lease, Tenant shall, at its sole cost and
expense, remove the sign or signs and repair any damage caused by erection, maintenance or removal
of same.

     19. MISCELLANEOUS

          19.1. Singular and Plural. Words of gender used in this Lease shall be held and
construed to include the other gender, and words in the singular number shall be held to include
the plural, unless the context otherwise requires.

          19.2. Binding Effect. The terms, provisions, covenants and conditions contained in
this Lease shall be binding upon and inure to the benefit of the parties hereto and their
respective heirs, legal representatives, successors and permitted assigns, except as otherwise
herein expressly provided.

          19.3. Choice of Law. This Lease shall be governed by New York law.

          19.4. Captions. The captions inserted in this Lease are for convenience only and in
no way define, limit or otherwise describe the scope or intent of this Lease, or any provision
hereof, or in any way affect the interpretation of this Lease.

          19.5. Estoppel Certificates. Tenant agrees from time to time, within ten days after
request of Landlord, to deliver to Landlord or to any lender providing financing for the Premises
an estoppel certificate stating that this Lease is in full force and effect, the date to which Rent
has been paid and the unexpired Term, acknowledging that there are no uncured defaults on the part
of Landlord (or specifying such defaults, if any as are claimed by Tenant),
and containing such other information pertaining to this Lease and may be reasonably requested
by Landlord.

 

 

          19.6. Amendments. This Lease may not be altered, modified, changed or amended except
by an instrument in writing signed and dated by both parties hereto.

          19.7. Entire Agreement. This Lease constitutes the entire understanding and agreement
of Landlord and Tenant with respect to the subject matter of this Lease, and contains all of the
covenants and agreements of Landlord and Tenant with respect thereto. Landlord and Tenant each
acknowledge that there are no representations, promises or agreements by Landlord or Tenant, or
anyone acting on behalf of Landlord or Tenant, which are not contained herein.

          19.8. Waivers. The waiver by Landlord or Tenant of any term, agreement or condition
herein contained shall not be deemed to be a waiver of any subsequent breach of the same or any
other term, agreement or condition herein contained. The subsequent acceptance of Rent hereunder
by Landlord shall not be deemed to be a waiver of any preceding breach by Tenant of any term,
agreement or condition of this Lease, other than the failure of Tenant to pay the particular Rent
so accepted, regardless of Landlord’s knowledge of such preceding breach at the time of acceptance
of such Rent.

          19.9. Broker’s Fees. Landlord and Tenant each represent and warrant as to itself that
it has dealt with no broker, agent or other person in connection with this transaction. Landlord
and Tenant each agree to indemnify and hold the other harmless from and against any claims arising
from a breach of the foregoing representations, such indemnity to include the reasonable attorneys’
fees and disbursements of the indemnified party.

     20. DESIGNATION AS LEASE.

          Despite the designation of this document as a Lease, the same shall be deemed to be a sublease
for so long as the lease agreement dated December 29, 2004 between the New York City Industrial
Development Agency and The Chefs’ Warehouse Leasing Co., LLC, as owner

 

 

of the Premises, entered into in connection with Landlord’s acquisition and financing of the
Premises, remains in effect.

          IN WITNESS WHEREOF, the parties hereto have executed this Lease on the date first above
written.

	 	 	 	 	 	 	 	 	 	 	 

	The Chefs’ Warehouse Leasing Co., LLC	 	 	 	Dairyland USA Corporation	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Dean Facatselis
 

	 	 	 	By:
	 	/s/ John D. Pappas
 

	 	 
	 

	 	Name: Dean Facatselis
	 	 	 	 	 	Name: John D. Pappas	 	 
	 

	 	Title: Manager
	 	 	 	 	 	Title: Vice President	 	 

 

 

LEASE

The Chefs’ Warehouse Leasing Co., LLC

as Landlord

and

Dairyland USA Corporation

as Tenant

	 	 	 
	 

	Premises:

	 	1300 Viele Avenue
	 

	 	Bronx, NY 10474
	 
	Dated:

	 	December 29, 2004

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