EXHIBIT (10h)
STATE OF NORTH CAROLINA
LEASE AGREEMENT
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COUNTY OF GUILFORD
THIS LEASE AGREEMENT made and entered into this 2/nd/ 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:
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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 situated 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 situated
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
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(5) years, beginning on the 13/th/ 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
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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 13/th/ day
of March, 1987, and a like amount of $18,171.00 shall be due and payable on the
13/th/ day of each calendar month thereafter, to and including the 13/th/ day of
February, 1990; and
(b) The sum of $21,131,58 shall be due and payable on the 13/th/ day
of March, 1990, and a like amount of $21,131.58 shall be due and payable on the
13/th/ day of each calendar month thereafter, to and including the 13/th/ day of
February, 1992 .
3. OPTIONS FOR TWO EXTENSIONS WITH RENT ADJUSTMENTS:
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(a) Initial Extension Option. Provided this Lease is in full force
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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 13/th/ 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
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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 13/th/ 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
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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 for 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,
1985, 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
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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
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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 to 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 1/st/ day of March
each calendar year thereafter while the Lessee is in possession of the premises,
to and including the 1/st/ 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
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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 leased
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
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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 damages 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
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all property taxes and similar assessments that 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 that 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
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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
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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
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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
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its authorized representatives may inspect the leased property.
13. Sublease. It is understood and agreed that if the Lessee sublets all
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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
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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
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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
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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) day 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 it has full power
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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
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been duly served if the same shall be in writing and mailed, postage prepaid,
until another address is furnished, addressed as follows:
Lessor Lessee
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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
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premises after the expiration of the original term without exercising the rights
granted in the 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
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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
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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
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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
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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 3/rd/ 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
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Vice President
ATTEST:
ADA M. GASTON
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Assistant Secretary
INDEPENDENT FIDUCIARY UNDER THE
UNIFI, INC. PROFIT SHARING PLAN AND TRUST
WACHOVIA BANK & TRUST COMPANY, N.A.
BY: JOE O. LOVEL
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Vice President
ATTEST:
NANCY P. BLEDSOE
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Asst. Secretary
UNIFI, INC.
BY: ROBERT A. WARD
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Executive Vice President
ATTEST:
C. CLIFFORD FRAZIER, JR.
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Secretary
STATE OF NORTH CAROLINA
COUNTY OF MECKLENBURG
I, MARTHA L. 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 ASST. 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 attest by her as its ASST. Secretary.
Witness my hand and notarial seal this the 4TH day of MARCH, 1987.
MARTHA L. LEE
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Notary Public
My Commission Expires:
2-27-1991
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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 attest by her as its ASSISTANT
Secretary.
Witness my hand and notarial seal this the 2ND day of MARCH, 1987.
BONNIE D. BINDER
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Notary Public
My Commission Expires:
12-10-90
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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 attest by him as its Secretary.
Witness my hand and notarial seal this the 6TH day of MARCH, 1987.
GRETCHEN WEST (THOMPSON)
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Notary Public
My Commission Expires:
10-12-87
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