STATE OF NORTH CAROLINA
LEASE AGREEMENT
COUNTY OF GUILFORD
THIS LEASE AGREEMENT made and entered into this 2nd day of March, 1987,
by and between NCNB NATIONAL BANK OF NORTH CAROLINA, Trustee under the Unifi,
Inc. Profit Sharing Plan and Trust, hereinafter called "Lessor"; WACHOVIA
BANK & TRUST COMPANY, N.A., hereinafter called "Independent Fiduciary"; and
UNIFI, INC., a New York corporation, hereinafter called "Lessee";
WITNESSETH:
THAT FOR and in consideration of the covenants and agreements
hereinafter set out, to be kept and performed by Lessee, Lessor has demised
and leased, and does hereby demise and lease, to Lessee for the term and upon
the conditions hereinafter set out, the following described real property
situated in Guilford County, North Carolina, to wit:
BEGINNING at a tack located in the center line of Friendly
Road, said tack being situate North 79 degrees 00 minutes 50
seconds East 278.75 feet along said centerline from a tack
marking the northwest corner of Lot No. 2 as shown on the
survey and recorded plat to which reference is hereinafter
made; runs thence from said beginning point along the center
line of Friendly Road North 79 degrees 00 minutes 50 seconds
East 658.72 feet to a tack located in the center line of
Friendly Road, said tack being situate North 79 degrees 00
minutes 50 seconds West 62.48 feet from the northwest corner
of property now or formerly belonging to W. A. Stern; runs
thence South 05 degrees 13 minutes 30 seconds West 775.88 feet
to an iron pipe, said iron pipe marking a control corner with
Lot No. 3; runs thence South 79 degrees 00 minutes 50 seconds
West 445.22 feet to an iron pipe, said iron pipe marking a
control corner with Lot No. 3; runs thence North 10 degrees 44
minutes 50 seconds West 745.00 feet to the point and place of
BEGINNING. The same being all of Lot No. 1 according to that
survey entitled "Survey for Hiltin Company", dated August 4,
1972 and prepared by Marvin L. Borum and Associates,
Registered Engineers, of Greensboro, North Carolina. For
reference see plat of property of Tri-City Terminals Inc.
recorded in the Office of the Register of Deeds of Guilford
County, North Carolina in Plat Book 43 at Page 53.
The above-described property is hereinafter referred to as "premises."
TO HAVE AND TO HOLD said described property and the privileges and
appurtenances thereto belonging to Lessee, its successors and assigns, upon
the following terms and conditions:
1. TERM. The original term of this Lease shall be for a period of
five (5) years, beginning on the 13th day of March, 1987 and, unless sooner
terminated as herein provided, shall continue until midnight on the
expiration of five (5) full years.
2. RENTAL: The rental consideration to be paid by the Lessee to
Independent Fiduciary in monthly installments in advance without notice or
demand, for the original term of this Lease shall be paid as follows:
(a) The sum of $18,171.00 shall be due and payable on the 13th day
of March, 1987, and a like amount of $18,171.00 shall be due and payable on
the 13th day of each calendar month thereafter, to and including the 13th day
of February, 1990; and
(b) The sum of $21,131.58 shall be due and payable on the 13th day
of March, 1990, and a like amount of $21,131.58 shall be due and payable on
the 13th day of each calendar month thereafter, to and including the 13th day
of February, 1992.
3. OPTIONS FOR TWO EXTENSIONS WITH RENT ADJUSTMENTS:
(a) Initial Extension Option. Provided this Lease is in full force
and effect, Lessee shall have the right to extend the term of this Lease for
the demised premises at the end of the original five (5) year term, for a
first renewal term of five (5) years, provided Lessee shall notify Lessor in
writing no later than 180 days prior to the expiration of the original term
of this Lease (to wit: the 13th day of September, 1991) that Lessee is
exercising its right to extend the Lease. Notwithstanding the foregoing, any
such extension shall be subject to the approval of the Independent Fiduciary.
(b) Second Extension Option. If (i) Lessee shall have exercised its
option for the initial renewal term pursuant to the provisions of Section
(a), and (ii) if this Lease shall be in full force and effect, Lessee shall
have the right to extend the term of this Lease for a second renewal term of
five (5) years, commencing on the day following the expiration of the initial
renewal term, provided Lessee shall notify Lessor in writing no later than
180 days prior to the expiration of the initial renewal term (to wit: the
13th day of September, 1996) that Lessee is exercising its right to extend
the Lease. Notwithstanding the foregoing, any such extension shall be
subject to the approval of the Independent Fiduciary.
(c) Renewal Rent Determination. If the Lessee exercises the initial
extension option, the rental consideration for each month of the first three
(3) years of such extension will be the Fair Market Rental Value (which for
the purposes of this Lease Agreement is the net operating income increased by
the deduction, if any, taken for vacancy, hereinafter referred to as "FMRV")
as determined by an MAI appraisal for the first year of such extension
divided by twelve (12), and the rental consideration for each month of the
remaining two (2) years of such extension shall be the FMRV as determined by
an MAI appraisal for the fourth year of said extended term divided by twelve
(12).
If the Lessee exercises the second extension option, the rental
consideration for each month of the first three (3) years of such extension
will be the FMRV as determined by an MAI appraisal for the first year of such
extension divided by twelve (12), and the rental consideration for each month
of the remaining two (2) years of such extension shall be the FMRV as
determined by an MAI appraisal for the fourth year of said extended term
divided by twelve (12).
The Lessee shall, at its cost, deliver to the Lessor no later than
August 13, 1991, or prior to August 2, 1991, an MAI appraisal made within
twenty (20) days prior to the date of delivery determining the FMRV for the
first three (3) years of the first renewal term and for the last two years of
the first renewal term. The Lessee shall, at its cost, deliver to the Lessor
no later than August 13, 1996, or prior to August 2, 1996, an MAI appraisal
made within twenty (20) days prior to the date of delivery determining the
FMRV for the first three (3) years of the second renewal term and for the
last two (2) years of the second renewal term. The FMRV shall be computed
under the same formula used in arriving at the net operating income,
increased by the amount of deduction taken for vacancy, set forth in the
appraisal report (date of value estimate, May 28, 1995, and updated on June
24, 1986) prepared by John McCracken and Associates, Inc. In the event the
Lessee does not agree with the FMRV for the initial or second extension
options as determined by the MAI appraisal, the parties agree that the actual
FMRV for such extensions shall be determined by arbitration under the
provisions of Paragraph 21 of this Lease.
The rental consideration to be paid for both the initial extended term
and the second extended term shall be paid in monthly installments (rounded
off to the nearest dollar) in advance in the same manner as provided in
Paragraph 2 with reference to the payment of the rental consideration for the
original term of this Lease.
4. Use. Lessee shall use the said property in a careful manner in
connection with the normal operation of its business. No unlawful or
offensive use shall be made of the property. Lessee agrees to comply with
all laws, ordinances and governmental regulations relating to the use of said
property.
5. Maintenance and Repairs. Lessee shall, at its own expense,
maintain the building and demised premises in good condition and repair,
including, but not limited to, the foundation, exterior walls, plate glass,
roof, heating equipment, air conditioning equipment, plumbing, interior of
building, electrical system, and pavement and landscaping around said
building, subject to ordinary wear and tear. Repairs, as used in this
paragraph, do not mean replacement of such capital improvements as the roof,
heating and air conditioning equipment or other major items which might wear
out in their ordinary use during the term of this Lease. The Lessee shall
indemnify the Lessor against any mechanic lien or other liens rising out of
the making of any alterations, repairs, additions or improvements to the
premises by the Lessee.
The Lessor shall, at its expense, make all capital improvements, as
opposed to repairs, to the roof, heating and air-conditioning system, and
other major items in order to keep the same in good repair and operating
condition during the original term and any extended term of this Lease. The
parties agree that the cost of each capital improvement will be amortized
over the life of said improvement, hereinafter sometimes referred to as
"annual amortized cost", and the Lessee shall, while it is in possession of
the premises, during the life of such improvement pay to the Lessor annually
on the anniversary date of the completion of such capital improvement an
amount equal to the annual amortized cost. By way of illustration: If a
capital improvement which has a life expectancy of twenty (20) years and
costs $20,000.00, the annual amortized cost would be $1,000.00, and if the
improvement was completed on March 1, 1989, the Lessee would pay to the
Lessor on March 1, 1990 and on the 1st day of March each calendar year
thereafter while the Lessee is in possession of the premises, to and
including the 1st day of March, 1990, the sum of $1,000.00. Lessee has no
obligation to reimburse Lessor for any sums expended in making said capital
improvements that have not been paid prior to the termination of this Lease.
6. Insurance. Fire insurance and extended coverage on the leased
premises shall be the responsibility of the Lessee and the amount of coverage
shall be the full insurable value of the leased premises. The policy
proceeds shall be payable to the Lessor to the extent of the full insurable
value of the leased premises. Lessee will at all times during the term of
this Lease, at its own expense, maintain and keep in force a policy of
general public liability insurance against claims for personal injury, death
or property damage occurring in, on, or about the lease premises, or on or
about the streets, sidewalks or premises adjacent to the leased premises,
with the Lessor as named insured as its interests may appear. The minimum
limits of such general public liability insurance shall be Five Hundred
Thousand and No/100 ($500,000.00) Dollars for injury (or death) to any one
person, and One Million and No/100 ($1,000,000.00) for injury (or death) to
more than one person in any one accident or occurrence, and One Hundred
Thousand and No/100 ($100,000.00) Dollars in respect to property damage.
7. Damage by Casualty. If the building located on the demised
premises shall be damaged by fire or other casualty covered by the extended
coverage provision of a standard fire insurance policy,
(a) Lessor shall repair such damage as soon as it is
reasonably possible to do so unless either Lessor or
Lessee shall elect to terminate this Lease under the
provisions of subparagraph (b) or (c) of this
Paragraph 7 in the event the provisions thereof are
applicable to such damage;
(b) If the cost of such repairs shall exceed fifty percent
(50%) of the reasonable replacement cost of said
building immediately prior to the occurrence of such
damage, Lessor and Lessee shall each have an option to
terminate this Lease by giving to the other written
notice of its election to do so within thirty (30)
days after the date such damage occurs, such
termination to be effective as of the date such damage
occurred;
(c) If the extent of the damage is such that the same
cannot, with reasonable diligence, be repaired within
ninety (90) days or within the number of days equal to
one-fourth the unexpired portion of the term,
whichever shall be less, after the date such damage
occurs, Lessor and Lessee shall each have an option to
terminate this Lease by giving to the other written
notice of its election to do so within thirty (30)
days after the date such damage occurs, such
termination to be effective as of the date such damage
occurred; and
(d) If this Lease is not terminated under the provisions
of subparagraph (b) or (c) of this Paragraph 7, the
rent provided for in Paragraph 2 and 3 hereof shall be
reduced proportionately with the diminution of the
usefulness of the demised premises for the period
between the date such damage occurs and the date such
damage is repaired.
8. Taxes. During the term of this Lease, Lessee shall be
responsible for all property taxes and similar assessments which may be
assessed or levied upon or in respect of the real estate subject to this
Lease. Lessee shall furnish to Lessor within thirty (30) days following the
end of each calendar year a statement that such taxes have been paid. Lessee
shall be responsible for all property taxes which may be assessed or levied
upon in respect of all personal property located upon the leased premises,
which belong to Lessee. The property taxes in respect of the real estate
subject to this Lease for the last calendar year of the term of this Lease
will be prorated on a per diem basis.
9. Utilities. Lessee will pay all utility bills connected with the
leased premises during the term of this Lease, including, but not limited to,
utility bills for heating, air conditioning and lighting of the demised
premises, electricity, telephone, water, sewage, and garbage disposal.
10. Janitorial Service. Lessee shall furnish, or cause to be
furnished, at Lessee's expense, janitorial services that will keep the leased
premises in a reasonable state of cleanliness for the business being operated
therein.
11. Default. The happening of any one or more of the following
listed events (hereinafter referred to singularly as "Event of Default")
shall constitute a breach of this Lease Agreement on the part of Lessee,
namely:
(a) The filing by, on behalf of, or against Lessee of
any petition of pleading to declare Lessee a
bankrupt, voluntary or involuntary, under any
bankruptcy law or act.
(b) The appointment by any court or under any law of
a receiver, trustee, or other custodian of the
property, assets, or business of Lessee.
(c) The assignment by Lessee of all or any part of
its property or assets for the benefit of
creditors.
(d) The failure of Lessee to pay any rent payable
under this Lease Agreement.
(e) The failure of Lessee to perform fully and
promptly any act required of it in the
performance of this Lease or otherwise to comply
with any term or provision thereof.
Upon the happening of any event of default and the failure of Lessee to
cure or remove the same within thirty (30) days, except in default in the
payment of rent which shall be ten (10) days, after written notice from
Lessor to do so, Lessor, at its election, may terminate this Lease or may
terminate Lessee's right to possession or occupancy only without terminating
this Lease by written notice to Lessee.
Upon termination of this Lease, whether by lapse of time or otherwise,
or upon any termination of Lessee's right to possession or occupancy of the
premises without terminating this Lease, Lessee shall promptly surrender
possession of and vacate the premises and deliver possession thereof to
Lessor, and Lessee hereby grants to Lessor full and free license to enter
into and upon the premises in such event and with or without process of law
to repossess the premises and to expel or remove Lessee and any others who
may be occupying the premises and to remove therefrom any and all property,
using for such purpose such force as may be necessary without being guilty of
or liable for trespass, eviction, or forcible entry or detainer and without
relinquishing Lessor's right to rent or any other right given to Lessor
hereunder or by operation of law.
If Lessor shall elect to terminate Lessee's right to possession only as
above provided, without terminating this Lease, Lessee shall nevertheless
remain obligated to pay the rent herein reserved for the full term hereof
except to the extent of any credit against said rent which Lessee is entitled
by law to receive for the reasonable rental value of said premises or for any
rents received by Lessor upon a re-letting of said premises as agent of
Lessee, but in the name of Lessor, or for any other credit to which Lessee is
entitled by law.
12. Inspection. At all reasonable times, the Independent Fiduciary
and its authorized representatives may inspect the leased property.
13. Sublease. It is understood and agreed that if the Lessee
sublets all or any part of the premises or assigns this Lease, it shall, in
either event, remain fully liable to Lessor for full performance of this
Lease Agreement.
14. Alterations. Lessee, at its own expense, may make reasonable
alterations to the improvements located upon the leased premises, with the
prior written consent of Lessor, which will not be unreasonably withheld.
15. Property of Lessee. All of the equipment or other property
installed in or attached to the premises by Lessee shall be and remain the
property of the Lessee and may be removed by the Lessee upon the expiration
of the lease period.
16. Eminent Domain. In the event that any portion of the premises
shall be taken by any public authority under the power of eminent domain or
like power, which taking shall have significant effect on the operation of
the business conducted by the Lessee, this Lease Agreement may be terminated
at the option of the Lessee within sixty days of the earlier of the
following:
(a) Specific written notice from Lessor to Lessee advising
of the proposed taking and giving all pertinent
details with regard thereto; or
(b) Service of process upon Lessee in a suit of
condemnation.
Failure of Lessee to exercise its option of cancellation within such
sixty (60) days period shall constitute a forfeiture by Lessee of its right
to termination. Damages awarded by the condemning authority shall belong
solely to Lessor.
In making the determination as to whether such taking shall have
significant effect on the operation of the business conducted by Lessee,
Lessor and Lessee shall discuss such and both will apply reasonable judgment.
If Lessor and Lessee are unable to agree, then the matter will be determined
by three (3) persons who are qualified to make such determination, one of
which is selected by Lessor, one of which is selected by Lessee, and the
other which is selected by the first two. The determination by these three
(3) people will be binding upon Lessor and Lessee.
17. Warranty of Quiet Enjoyment. Lessor covenants that its has full
power and lawful authority to execute this Lease Agreement and that upon
compliance by Lessee with the terms and provisions hereof, Lessee shall have
enjoyment of the premises during the term hereof.
18. NOTICE: Any notice provided herein shall be deemed sufficient
to have been duly served if the same shall be in writing and mailed, postage
prepaid, until another address is furnished, addressed as follows:
Lessor Lessee
Wachovia Bank & Trust Unifi, Inc.
Company, N.A., Independent P. O. Box 19109
Fiduciary Greensboro, NC 27419-9109
Trust Department
Winston-Salem, NC 27150
AND
NCNB National Bank of
North Carolina, Trustee
Trust Department
Charlotte, NC 28255
19. Holding Over. In the event the Lessee remains in possession of
the premises after the expiration of the original term without exercising the
rights granted in Paragraph 3, the Lessee shall not acquire any right, title
or interest in or to said premises. Lessee, as a result of such holding
over, shall occupy the premises as a tenant from month to month with rental
consideration as provided in Paragraph 2 or 3, and subject to all conditions,
privileges and obligations set forth in this Lease during such holding over
period and the Lessor or Lessee shall have the right of canceling said month
to month tenancy by giving the other thirty (30) days written notice to
vacate.
20. Attorney Fees. Upon the occurrence of any events of default by
the Lessee, the Lessor may employ an attorney to enforce its rights and
remedies and the Lessee hereby agrees to pay to the Lessor the sum of 15% of
the outstanding rental owing on this Lease or 15% of any recovery for said
Breach, whichever amount is the larger as reasonable attorney fees plus all
other reasonable expenses incurred by the Lessor in enforcing any of the
Lessees' rights and remedies hereunder.
21. Arbitration. Any controversy which may arise between the Lessor
and Lessee regarding the rights, duties, liabilities and FMRV for the initial
and second extension options will be settled by arbitration. Such
arbitration shall be before three (3) disinterested arbitrators, one named by
the Lessor, one named by the Lessee, and one named by the two (2) thus
chosen. The arbitrators shall determine the controversy and their
determination shall be binding upon both parties. Each party shall pay one-
half of the costs of such arbitration.
22. Interpretation. The provisions of this Lease Agreement shall
constitute the entire agreement between the parties. All singular nouns,
pronouns shall include plural and all masculine nouns and pronouns shall
include the feminine and neuter. This Lease Agreement shall be construed in
accordance with the laws of the State of North Carolina. If any provision of
this Lease Agreement shall be determined to be void, such determination shall
not affect any other provision hereof, and all other provisions shall remain
in full force and effect. This Lease Agreement shall inure to the benefit of
and be binding upon the parties hereto, their successors, heirs, executors,
administrators and assigns.
23. Memorandum of Lease. A Memorandum of Lease will be executed by
the parties hereto in a form appropriate for recordation upon the public
records. The Memorandum of Lease shall include such provisions of this Lease
Agreement as may reasonably be requested by either party hereto, but shall
not include the amount of rental payments hereunder.
The NCNB National Bank of North Carolina, as Trustee, the Wachovia Bank
& Trust Company, N.A., as Independent Fiduciary, and Unifi, Inc. entered into
an Independent Fiduciary Agreement on the 3rd day of September, 1986, as
amended, under which the legal title to the premises would be in the Trustee,
with the Independent Fiduciary having the exclusive authority and
responsibility for the disposition, management and control of said premises;
that the Independent Fiduciary negotiated this lease Agreement and has
directed the Trustee to enter into this Lease Agreement all in accordance
with the aforesaid Independent Fiduciary Agreement.
IN WITNESS WHEREOF, the parties hereto have caused these presents to be
signed and attested and the corporate seals attached by the proper officials
of the respective parties hereto, the day and year first above written.
TRUSTEE OF THE UNIFI, INC.
PROFIT SHARING PLAN AND TRUST
NCNB NATIONAL BANK OF NORTH CAROLINA
BY: GLENDA G. STEEL
Vice President
ATTEST:
ADA M. GASTON
Assistant Secretary
INDEPENDENT FIDUCIARY UNDER THE
UNIFI, INC. PROFIT SHARING PLAN
AND TRUST
WACHOVIA BANK & TRUST COMPANY, N.A.
BY: JOE O. LONG
Vice President
ATTEST:
NANCY P. BLEDSOE
Assistant Secretary
UNIFI, INC.
BY: ROBERT A. WARD
Executive Vice-President
ATTEST:
C. CLIFFORD FRAZIER, JR.
Secretary
STATE OF NORTH CAROLINA
COUNTY OF MECKLENBURG
I, MARTHA N. LEE, a Notary Public of said County and State, do hereby
certify that ADA M. GASTON, personally came before me this day and
acknowledged that she is the Assistant Secretary of the NCNB NATIONAL BANK OF
NORTH CAROLINA, and that by authority duly given and as the act of the
corporation, the foregoing instrument was signed in its name by its Vice
President, sealed with its corporate seal, and attested by her as its
Assistant Secretary.
Witness my hand and notarial seal this the 4th day of March, 1987.
MARTHA N. LEE
Notary Public
My Commission Expires:
2-27-91
STATE OF NORTH CAROLINA
COUNTY OF FORSYTH
I, BONNIE D. BINDER, a Notary Public of said County and State, do hereby
certify that NANCY P. BLEDSOE, personally came before me this day and
acknowledged that she is the Assistant Secretary of the WACHOVIA BANK & TRUST
COMPANY, N.A., and that by authority duly given and as the act of the
corporation, the foregoing instrument was signed in its name by its Vice
President, sealed with its corporate seal, and attested by her as its
Assistant Secretary.
Witness my hand and notarial seal this the 2nd day of March, 1987.
BONNIE D. BINDER
Notary Public
My Commission Expires:
12-10-90
STATE OF NORTH CAROLINA
COUNTY OF GUILFORD
I, GRETCHEN WEST (THOMPSON), a Notary Public of said County and State,
do hereby certify that C. CLIFFORD FRAZIER, JR., personally came before me
this day and acknowledged that he is the Secretary of UNIFI, INC., and that
by authority duly given and as the act of the corporation, the foregoing
instrument was signed in its name by its Executive Vice President, sealed
with its corporate seal, and attested by him as its Secretary.
Witness my hand and notarial seal this the 6th day of March, 1987.
GRETCHEN WEST (THOMPSON)
Notary Public
My Commission Expires:
10-12-87