STATE OF NORTH CAROLINA
COUNTY OF MECKLENBURG LEASE
THIS LEASE, made and entered into this the 5th day of January,1999, by
and between BEACON INVESTMENT CORPORATION, a North Carolina corporation,
hereinafter called "LANDLORD," and COCA-COLA BOTTLING CO. CONSOLIDATED, a
Delaware corporation, hereinafter called "TENANT";
WITNESSETH:
THAT for and in consideration of the mutual agreements of the parties,
including the rental agreed to be paid by Tenant to Landlord, Landlord hereby
leases to Tenant, and Tenant leases and rents from Landlord the following
described premises on the terms and conditions hereinafter set forth, to wit:
ARTICLE I
BASIC LEASE TERMS
Section 1. Commencement, Termination and Base Rent.
Buildings: 1900 Rexford Road (the "REXFORD BUILDING")
6301 Morrison Boulevard (the "MORRISON BUILDING")
Location of Premises: See Exhibit B attached hereto.
Rentable Area of Building: Rexford Building: 108,668 square feet
Morrison Building: 65,000 square feet
Rentable Area of Premises: See Exhibit B attached hereto.
Lease Term:
Commencement Date: January 5, 1999
Termination Date: December 31, 2008
Base Rent:
Initial Annual Base Rent: $2,794,620.00
Initial Quarterly Base Rent: $698,655.00
Section 2. Address of Landlord and Tenant; Notices.
Rental and Other Payments To: Beacon Investment Corporation
Attn: Ms. Karen D'Eredita
1900 Rexford Rd.
Charlotte, NC 28211
Correspondence To: Beacon Investment Corp.
Attn: J. Frank Harrison, III
P.O. Box 31487
Charlotte, NC 28231
Address of Tenant: Coca-Cola Bottling Co. Consolidated
Attn: Mr. Mike Perkis
1900 Rexford Rd.
Charlotte, NC 28211
All sums of money to be paid to Tenant by Landlord and all written
notices by Landlord to Tenant shall be delivered to the address for the Premises
(as hereinafter defined) as set forth above unless a different address for
Tenant is set forth above.
All sums of money to be paid to Landlord by Tenant and all written
notices by Tenant to Landlord shall be delivered to the respective addresses of
Landlord as set forth above.
All notices required or permitted under this Lease shall be in writing,
signed by the party giving such notice and transmitted by certified mail,
postage prepaid, and shall be deemed given when deposited in an official
depository of the United States Mails. Either party may change the address to
which money due or notices shall be sent by giving the other party written
notice of such change of address.
Tenant hereby appoints as its agent for service of process in all
dispossessory, distraint and summary ejectment proceedings which may be brought
against it by Landlord, any person occupying the Premises, provided that if no
person is occupying the Premises, then Tenant agrees that such service may be
made by attachment thereof to the main entrance to the Premises; provided,
Landlord additionally delivers a copy of such service of process to the Tenant
at the address set forth above.
2
ARTICLE II
LEASED PREMISES
Section 1. Description of Premises. The Premises this day leased and
demised (hereinafter called the "PREMISES") are to be located within the
Buildings identified in Article I (hereinafter called the "BUILDINGS"; each a
"BUILDING") which are located on the real property described in Exhibit A
attached hereto and incorporated herein by reference (said land and the
buildings and improvements thereon being herein called the "PROPERTY"). The
Premises are shown as outlined on the floor plans of the Buildings attached
hereto as Exhibit B and incorporated herein by reference. In addition, the
Landlord shall make available to Tenant an area of space located on the first
floor entrance area of each Building suitable for placement of a receptionist
for Tenant, and Tenant shall be entitled to place a sign identifying the
Tenant's corporate name and products in each such receptionist's area.
Section 2. Tenant's Acceptance of Property. Except as specifically
provided to the contrary in Exhibit C attached to this Lease, Tenant shall
accept the Premises in "as is" condition and Landlord shall have no obligation
to upfit the same. Except as expressly set forth herein, neither Landlord nor
its agents have made any representations with respect to the Premises, the
Buildings or the Property and no rights, easements or licenses are acquired by
the Tenant by implication or otherwise. The taking of possession of the Premises
by Tenant shall be conclusive that the Premises and the Buildings were in
satisfactory condition at the time possession was taken. In the event that
someone other than Landlord constructs any improvements to the Premises, then
those improvements must be constructed using, at least, finishes which are
standard to the Buildings and according to plans and specifications approved by
Landlord in advance, and Tenant will furnish Landlord with a complete set of
as-built plans and specifications within sixty (60) days of the completion of
these improvements. In all cases, Tenant's mechanical and electrical work, and
any penetration of floors, must be performed by Landlord's contractors and
subcontractors.
Section 3. Common Areas. Tenant and its employees, agents, invitees and
licensees are granted the right, in common with others and subject to the
exclusive control and management thereof at all times by Landlord, to the
non-exclusive use of such of the areas as are from time to time designated as
common areas by Landlord (the "COMMON AREAS"). These areas shall include the
facilities in the Buildings which are designated for the general use, in common,
of the occupants of the Buildings, and, to the extent the same are provided, the
parking areas, sidewalks, roadways, loading platforms, restrooms, ramps,
maintenance and mechanical areas, lobbies, corridors, elevators, stairwells and
landscaped areas.
Section 4. Quiet Enjoyment. The Landlord agrees that the Tenant, on
paying the stipulated rental and keeping and performing the agreements and
covenants herein contained, shall hold and enjoy the Premises for the term
aforesaid, subject, however, to the terms of this Lease.
3
ARTICLE III
LEASE TERM
Section 1. Term. The term of this Lease shall commence and end on the
Commencement Date and Termination Date, respectively, set forth in Article I,
subject to any termination right granted herein. However, if due to causes
beyond Landlord's reasonable control, including without limitation, the
inability of Landlord, despite due diligence, to complete any work that it is
obligated to perform in the Premises or to obtain possession of the Premises
because of a holdover tenant therein, Landlord is unable to deliver the Premises
to Tenant by the Commencement Date, then in such case the Commencement Date and
Termination Date shall be deferred by the number of days of such delays.
At any time prior to said Commencement Date, Tenant shall have the
right, at its own risk, to enter upon the Premises for any reasonable purpose
expressly permitted by Landlord; provided, however, that such entry shall not
interfere with any work being done by or on behalf of Landlord therein, and
Tenant shall indemnify Landlord against any loss or liability arising from such
entry.
Section 2. Holding Over. If Tenant continues to occupy the Premises
after the last day of the term hereof or after the last day of any renewal or
extension of the term hereof and if Landlord elects to accept rent, a monthly
tenancy terminable at will by either party be created which shall be on the same
conditions as those herein specified, except Tenant shall pay double the monthly
rent paid for the last full month of the lease term for each month or partial
month during which Tenant retains possession of the Premises and after such
expiration of termination date. Tenant shall indemnify Landlord against all
liabilities and damages sustained by Landlord by reason of such retention of
possession. The provisions of this section shall not constitute a waiver by
Landlord of any reentry rights available under this lease or by law.
ARTICLE IV
RENTAL
Section 1. Base Rental. The Tenant covenants and agrees to pay to
Landlord as rental for the Premises the Initial Quarterly Base Rent set forth in
Article I, adjusted as hereinafter provided, on or before the first day of each
quarter, in advance, without demand during the term of this Lease at the address
set forth in Article I, Section 2; provided, however, that if the term of this
Lease does not begin on the first day or end on the last day of a month, the
Rental for that partial quarter shall be prorated by multiplying the Quarterly
Base Rent by a fraction, the numerator of which is the number of days of the
partial quarter included in the term and the denominator of which is the total
number of days in the full calendar quarter that is being prorated.
4
Section 2. Adjustment of Annual and Quarterly Base Rent. On each
anniversary of the Commencement Date, the Annual Base Rent shall be adjusted to
an increased amount that may result from multiplying the Annual Base Rent, as
set forth in Article I, Section 1, by a fraction whose numerator shall be the
Consumer Price Index for the month during which such anniversary of the
Commencement Date occurs and whose denominator shall be the Consumer Price Index
for the month during which the Commencement Date occurs (the annual base rent as
increased shall be referred to as the "CPI RENT"). Notwithstanding any term or
provision in this Lease to the contrary, in no event shall the Annual or
Quarterly Base Rent be less than the Annual or Quarterly Base Rent stated in
Article I, Section 1. The Landlord shall notify the Tenant in writing of any
adjusted Annual and Quarterly Base Rent and such notice shall include a detailed
computation of the new Annual and Quarterly Base Rent.
For the purpose of this paragraph, "CPI" shall mean Consumer Price Index
published monthly for All Urban Consumers, U.S. City Average, Base Year 1982-84
= 100 issued by the Bureau of Labor Statistics of the United States Department
of Labor, or in the event such index is no longer published, then such other
index as shall be generally acceptable as being comparable thereto.
Section 3. Additional Rent. The additional annual rent to be paid by
Tenant during the Term shall be based upon changes in the Adjusted Eurodollar
Rate (as defined hereinafter) (the "ADDITIONAL RENT") and shall be calculated as
provided in this section. For the duration of the Term, for each basis point
change in the Adjusted Eurodollar Rate from 5.3125, the Additional Rent shall
increase or decrease in the direction corresponding to the Adjusted Eurodollar
Rate change, by the amount of $1,900.00 per annum.
"ADJUSTED EURODOLLAR RATE" as used herein shall mean the Adjusted
Eurodollar Rate as defined in Exhibit H for any of the normal time periods (30,
60, 90, or 180 days) for which such rates are made available to qualified
borrowers and which shall be mutually agreed to by Landlord and Tenant. If as a
result of any government regulations eurodollar loans are unavailable, then the
additional annual rent shall be based on a floating rate offered by NationsBank,
N.A., in Charlotte, North Carolina, which is acceptable to both parties.
Exhibit I illustrates computations of the combined annual CPI Rent and
Additional Rent at various Adjusted Eurodollar Rates based upon CPI increases of
2% and 1.5% annually. Exhibit I is intended for illustration purposes only; the
CPI Rent and Additional Rent payable by Tenant shall be calculated in the manner
described in this Lease by applying actual changes in the CPI and the Adjusted
Eurodollar Rate.
Section 4. Adjustment to Rent for Increases in Landlord's Operating
Cost. Landlord and Tenant agree that $456,052.00 of the Annual Base Rent
represents Landlord's projection of its expenses to operate the Premises during
the first year of the Term. Landlord and Tenant further agree that the rent
payable hereunder has been calculated in part upon agreed-to service levels and
Landlord's current and projected costs to operate the Buildings and the
Premises. In the event Landlord's Operating Cost (as defined hereinafter)
increase at a rate in excess of the CPI,
5
Landlord will provide written notice to Tenant together with documentation of
such increases, and Tenant agrees to increase its rent payments in amounts
sufficient to cover such increases in Operating Cost.
The term "Operating Cost" shall mean and include all costs, expenses,
and disbursements of every kind and nature which Landlord shall pay or become
obligated to pay in connection with the management, operation, maintenance,
replacement and repair of all building systems, components and appurtenances
according to first class management principles for a building located in
Charlotte, North Carolina and according to what is best for the Buildings in the
Landlord's judgment. Such costs will include, but will not be limited to,
maintenance, operation, and repair of personal property, fixtures, machinery,
equipment systems and apparatus used in connection with the Buildings; cleaning;
insurance; security; any assessments that may be payable to any Owners' or
Merchants' Association on the same basis as other buildings in the area in which
the Buildings are located; management fees; utilities; seasonal decorations,
redecoration of public areas; contract services; amortization of non-permanent
equipment (example: trash containers) which otherwise might be leased; and those
items listed on Exhibit D which are not identified in this paragraph.
Operating Cost shall not include costs for tenant improvements, interest
and principal payments on loans for the Building, salaries and other
compensation for executive officers of the Landlord or Manager; expenditures for
which the Landlord has been reimbursed (other than pursuant to Additional Rent
provisions in tenant leases); expenses incurred in enforcing obligations of
other tenants; ad valorem personal and real property taxes associated with the
ownership and operation of the Building; and capital expenditures or capital
leases (except as otherwise provided herein and except for costs associated with
capital expenditures or capital leases by Landlord which are the purpose of
reducing Operating Cost).
Section 5. Payment of Annual Base Rent and CPI Rent. Tenant shall pay
the Annual Base Rent and CPI Rent in quarterly installments in advance without
demand on the first day of each and every quarter during the Term. Due to the
delay in the publication of the CPI after its calculation, the amount of the
quarterly installments of CPI Rent payable prior to the publication of the CPI
during each 12-month period of the Term beginning on the first 12-month
anniversary of the Commencement Date shall be based upon the annualized change
determined from the CPI most recently published prior to the beginning of the
applicable 12-month period. After the CPI for each 12-month period of the Term
is published, Landlord shall calculate any adjustment to the CPI Rent needed as
a result of such publication, and any amount due Landlord shall be paid by
Tenant with the next quarterly installment of CPI Rent. Any amount due Tenant as
a result of such an adjustment shall be paid by Landlord within 30 days of the
adjustment.
Section 6. Payment of Additional Rent. Tenant shall pay the Additional
Rent in quarterly installments in advance without demand on the first day of
each and every quarter during the Term. Each installment of the Additional Rent
payable on the first day of each quarter of the Term as provided herein shall be
adjusted retroactively at the expiration of each quarter to reflect changes in
the Adjusted Eurodollar Rate, as determined pursuant to Section 3
6
hereof, during such quarter. Upon such adjustment, Landlord shall refund to
Tenant or Tenant shall pay to Landlord, as appropriate, within ten days of
demand therefor, such sums as are necessary for Tenant to have paid the
installment of the Additional Rent, as adjusted, which was owed by it for the
preceding quarter.
Section 7. Adjustments to Rent for Lease of Additional Areas of the
Building. Should Tenant desire to lease any areas of the Buildings which are not
part of the Premises and should such additional areas be available for lease or
when such areas become so available, Landlord, upon written notice from Tenant,
agrees to lease such areas to Tenant on the same terms and conditions provided
in this lease, and such additional areas shall become part of the Premises
leased and demised hereunder. The Base Rent then in effect shall be increased by
an amount equal to the product of the then existing Base Rent per square foot of
the Premises multiplied by the square footage of the additional areas of the
Building which Tenant is to lease.
Section 8. Tenant Services; Adjustments to Rent. Landlord acknowledges
that Tenant desires to assume direct responsibility for maintaining, cleaning
and insuring certain portions of the Property. In this regard, provided Landlord
has approved in writing all contracts for the providing of such services and
insurance, Tenant shall be entitled to receive a credit against Annual Base Rent
for the providing of such services and insurance in an amount equal to
$199,612.87 (the "Rental Credit"). Provided, however, on each anniversary of the
Commencement Date, the Rental Credit shall be adjusted to an increased amount
that may result from multiplying the Rental Credit, as set forth in the
immediately preceding sentence, by a fraction whose numerator shall be the
Consumer Price Index for the month during which such anniversary of the
Commencement Date occurs and whose denominator shall be the Consumer Price Index
for the month during which the Commencement Date occurs. If, at any time during
the Lease Term, Tenant desires to assume direct responsibility for providing any
additional services for or to the Property, Tenant shall notify Landlord in
writing. Provided Landlord agrees to allow Tenant to assume direct
responsibility for providing such additional services and provided Landlord
approves in writing all contracts for the providing of such services, as
reimbursement to Tenant for providing such services, the Rental Credit shall be
increased at such time by an amount determined by Landlord. Notwithstanding the
foregoing, Landlord may, at any time during the Lease Term, revoke Tenant's
right to provide certain services and/or insurance for or to the Property
pursuant to this Section 8, whereupon the Rental Credit shall be decreased by an
amount determined by Landlord.
Section 9. Late Payment. If rent or any other payment due hereunder from
Tenant to Landlord remains unpaid ten (10) days after said payment is due, the
amount of such unpaid rent or other payment shall be increased by a late charge
to be paid to Landlord by Tenant in an amount equal to five percent (5%) of the
amount of the delinquent rent or other payment. The amount of the late charge to
be paid for such month shall be computed on the aggregate amount of delinquent
rent and other payment then outstanding for such month. Landlord and Tenant
agree that such late charge shall not be deemed to be a penalty, it being
understood between the parties that late payments by Tenant shall result in
additional administrative expense to Landlord
7
which is difficult and impractical to ascertain and that such late charge is a
reasonable estimate of the loss and expense to be suffered by Landlord as a
result of such late payment by Tenant.
If rent or any other sums due Landlord by Tenant hereunder shall not be
paid within thirty (30) days of its due date, then in such case in addition to
the late charge provided for herein above, such rent or other sum shall bear
interest beginning on the thirty-first (31st) day after its due date at the rate
of eighteen percent (18%) per annum (or, if less, the highest rate allowed by
law).
If rent or any other sums due Landlord by Tenant hereunder is collected
by or through an attorney at law, Tenant agrees to pay Landlord's actual and
reasonable attorneys' fees incurred with respect thereto not in excess of
fifteen percent (15%) of the total sums due, or if the laws of the State of
North Carolina in effect at the time of such collection limit the amount so
payable as attorneys' fees, then the maximum percentage not in excess of fifteen
percent (15%) allowed by such laws, of the amount so collected.
Nothing herein shall relieve Tenant of the obligation to pay rent or any
other payment on or before the date on which any such payment is due, nor in any
way limit Landlord's remedies under this Lease or at law in the event said rent
or other payment is unpaid after it is due. Amounts due hereunder shall be
deemed to be additional rent and the failure to pay the same within ten (10)
days after they are due shall constitute a default of this Lease.
Section 10. Application of Payments Received from Tenant. Landlord,
acting in its sole discretion, shall have the right to apply any payments made
by Tenant to the satisfaction of any debt or obligation of Tenant to Landlord
regardless of the instructions of Tenant as to application of any sum whether
such instructions be endorsed upon Tenant's check or otherwise, unless otherwise
agreed upon by both parties in writing. The acceptance by Landlord of a check or
checks drawn by anyone other than Tenant shall in no way effect Tenant's
liability hereunder nor shall it be deemed an approval of any assignment of this
Lease by Tenant.
ARTICLE V
UTILITIES, SERVICES AND MAINTENANCE
Section 1. Landlord's Services and Maintenance. Unless otherwise
provided by Tenant pursuant to Article IV, Section 8 hereof, Landlord shall
provide the following services: (1) maintain a heating and air conditioning unit
or units in good condition and repair in the Premises; (2) city water from the
Buildings' fixtures for drinking, lavatory and toilet purposes; (3) customary
cleaning and janitorial services in the Premises Monday through Friday,
excluding Federal holidays in accordance with the janitorial specifications
attached hereto as Exhibit G; (4) customary cleaning, mowing, grounds keeping,
snow removal and trash removal in the areas of the Buildings; (5) window washing
in the Premises, inside and outside, at reasonable intervals; (6) adequate
passenger elevator service in common with other tenants of the Buildings; (7)
customary security services consistent with first-class office buildings in
Charlotte, North
8
Carolina comparable to the Buildings; (8) heating, air conditioning, customary
cleaning and janitorial services, and electricity for the Common Areas in the
Buildings; (9) replacement of lamps (both fluorescent and incandescent) only in
the Buildings with standard lighting fixtures as specified by Landlord for the
Premises and Common Areas of the Buildings (any lamps for non-Building standard
lighting fixtures shall be Tenant's responsibility); and (10) keep the Buildings
open to guests, invitees, employees and customers of Tenant Monday through
Friday from 8:00 a.m. until 6:00 p.m., excluding federal holidays.
Landlord shall not be obligated to furnish any services or utilities,
other than those stated above. If Landlord elects to furnish services or
utilities requested by Tenant, in addition to those listed above or at times
other than those stated above, Tenant shall pay to Landlord the prevailing
charges for such services and utilities within thirty (30) days after billing.
If Tenant fails to make any such payment, Landlord may, without notice to Tenant
and in addition to Landlord's other remedies under this Lease, discontinue any
or all of such additional or after-hours services. No such discontinuance of any
service shall result in any liability of Landlord to Tenant or be considered an
eviction or a disturbance of Tenant's use of the Premises.
Landlord shall have no liability or responsibility to Tenant for loss or
damage should the furnishing of any of the utilities and services as herein
provided be prohibited or stopped for repairs, alterations or improvements or by
reason of causes beyond Landlord's control including, without limitation,
accidents, strikes, storms, Acts of God, labor trouble or disturbances, lockouts
or orders or regulations of the federal, state or municipal government.
The cost of Landlord's performing any maintenance, repair or replacement
caused by the negligence of Tenant, its employees, agents, servants, licensees,
subtenants, contractors or invitees, or the failure of Tenant to perform its
obligations under this Lease shall be paid by Tenant, except to the extent of
insurance proceeds, if any, actually collected by Landlord with regard to the
damage necessitating such repairs.
Section 2. Tenant's Services and Maintenance. Tenant shall make
arrangements directly with the public utility electric company serving the
Buildings for all electric power or current required by Tenant in the Premises,
including the provision of electric power for heat and air conditioning, and
directly with the telephone company or companies for all telephone service
required by Tenant. Tenant shall pay for all electric and telephone service used
or consumed in the Premises, including the cost of installation of any separate
meters.
Landlord shall not be responsible for the maintenance, repair or
replacement of any systems which are located within the Premises and are
supplemental or special to the standard systems of either Building, whether
installed pursuant to a work letter or otherwise, for any lamps (whether
fluorescent or incandescent) for any special or non-Building standard lighting
fixtures, or for any floor or wall coverings in the Premises. Tenant shall be
responsible for all services; maintenance and repairs not specifically delegated
to Landlord hereunder which are required to keep the interior of the Premises in
good condition and repair.
9
If heat generating machines or equipment are used in the Premises by
Tenant which affect the temperature otherwise maintained by the heating and air
conditioning systems of either Building, Landlord shall have the right to
install supplemental air conditioning units in the Premises and the cost of the
units, and the cost of installation, operation and maintenance thereof, shall be
paid by Tenant to Landlord within thirty (30) days of demand by Landlord.
Section 3. Extra Services. Whenever Landlord knows that any tenant
(including Tenant) is using extra services because of either non-business hour's
use or high consumption, Landlord may directly charge that tenant for the extra
use and exclude those charges from Operating Cost. Extra services include:
(i) Non-Business Use. Landlord provided utilities and services required
by Tenant during non business hours shall be supplied upon reasonable advance
verbal notice. If more than one tenant directly benefits from these services
then the cost shall be allocated proportionately between or among the benefiting
tenants based upon the amount of time each tenant benefits and the square
footage of each leases.
(ii) Excess Utility Use. Tenant shall not place or operate in the
Premises any electrically operated equipment or other machinery, other than
typewriters, personal computers, adding machines, reproduction machines, and
other machinery and equipment normally used in offices, which will overload the
electrical systems of either Building. If Tenant uses any Landlord provided
service or utility in excess of that reasonably required for normal office use,
Landlord may require payment for such extra use.
(iii) Payment. Tenant's charges for the utilities and services provided
under (i) and (ii) above shall be one hundred and ten percent (110%) of
Landlord's actual cost of labor and utilities.
Tenant's failure to pay the charges in (i) and (ii) above within thirty
(30) days of receiving a proper and correct invoice shall entitle Landlord to
the same remedies it has upon Tenant's failure to pay Base Rent, Additional
Rent, or any other charges due under this Lease.
ARTICLE VI
ALTERATIONS, REPAIRS AND MAINTENANCE
Section 1. Alterations. Tenant agrees that it will make no alterations,
additions or improvements to the Premises without the prior written consent of
the Landlord and that all alterations, additions or improvements made by or for
the Tenant, including, without limitation, any and all subdividing partitions,
walls or railings of whatever type, material or height, excepting movable office
furniture installed at the expense of Tenant, shall, when made, become the
property of the Landlord and shall remain upon and be surrendered with the
Premises as a part thereof at the end of the Lease term, unless Landlord shall
notify Tenant to remove same, in which latter event Tenant shall comply to the
end that the Premises shall be restored to the same
10
condition in which they were found prior to the Commencement Date, normal wear
and tear excepted. Tenant shall not core drill or in any other manner attempt to
penetrate or penetrate the floors of the Buildings without obtaining permission
of Landlord.
In the event that Tenant constructs any improvements to the Premises,
then those improvements must be constructed (a) using, at least, finishes which
are standard to the Buildings and according to plans and specifications and
using only contractors and subcontractors approved by Landlord in advance, and
(b) in compliance with all applicable laws, ordinances, rules, building codes,
and regulations of Federal, State, municipal and county authorities, including
without limitation, the procurement of a building permit, and (c) in a diligent,
good and workmanlike manner. Tenant shall obtain a Builders' Risk Insurance
Policy in such amount as is reasonably requested by Landlord, naming Landlord as
an additional insured and providing that it will not be canceled without giving
Landlord at least 15 days prior written notice thereof. Any mechanical or
electrical work and any penetration of floors must be performed by Landlord's
contractors and subcontractors. Upon completion of any such construction by
Tenant, Tenant must furnish Landlord with a complete set of as-built plans and
specifications for the same. Tenant will not permit and will indemnify Landlord
and hold it harmless from any mechanic's or materialmen's liens against the
Premises, in connection with any such improvements.
Section 2. Right of Entry. The Tenant agrees that Landlord shall have
the right to enter and to grant licenses to enter the Premises at any time (a)
to examine the Premises, (b) to make alterations and repairs to the Premises or
to the Buildings (including the right, during the progress of such alterations
or repairs, to keep and store within the Premises all necessary materials, tools
and equipment) or (c) to exhibit the Premises to prospective purchasers or
tenants and that no such entry shall render the Landlord liable to any claim or
cause of action for loss of or damage to property of the Tenant by reason
thereof, nor in any manner affect the obligations and covenants of this Lease.
Section 3. Tenant's Care of Premises. Tenant shall:
(i) keep the Premises and fixtures in good order, including, without
limitation, maintenance and repair, including replacement if necessary, of all
doors (exterior and interior), all interior plate glass and window glass, and
all wall and floor coverings, effecting all such maintenance and repairs at its
own expense and employing materials and labor of a kind and quality equal to the
original installations;
(ii) make repairs and replacements to the Premises or Buildings needed
because of Tenant's misuse or primary negligence, or as provided in any other
provision of this Lease including, without limitation, Section 5 of this Article
VI;
(iii) repair and replace special equipment or decorative treatments
above Building standard installed by or at Tenant's request and that serve the
Premises only, or any trade fixtures of Tenant, except to the extent the repairs
or replacements are needed because of Landlord's
11
misuse or primary negligence, and are not covered by Tenant's insurance or the
insurance Tenant is required to carry under Article VIII, Section 2, whichever
is greater.
(iv) if Tenant fails to replace or repair equipment or other
installations in or about the Premises as above provided, then immediately after
advising Tenant in writing as to the necessity therefore, Landlord may
accomplish the required work and add the cost thereof to the next due Quarterly
Base Rent, but Tenant shall not be liable to Landlord for any failure to fulfill
the obligations of this Section until such time as the Tenant shall be notified,
as aforesaid, in writing of the requirements therefor.
Section 4. Landlord's Repairs. Landlord shall make the repairs and
replacements to the Buildings, other than the repair obligations of Tenant
outlined in Section 3 and in Article IV, Section 8 hereof, including to the
roof, foundation, exterior walls, interior structural walls, all structural
components, and all systems, such as mechanical, electrical, HVAC, and plumbing.
Section 5. Time for Repairs. Repairs or replacements required hereunder
shall be made within a reasonable time (depending on the nature of the repair or
replacement needed) after receiving notice or having actual knowledge of the
need for a repair or replacement.
Section 6. Surrendering the Premises. Upon the Termination Date or the
date the last extension term, if any, ends, whichever is later, Tenant shall
surrender the Premises to Landlord in the same broom clean condition that the
Premises were in on the Commencement Date except for:
(i) ordinary wear and tear;
(ii) damage by the elements, fire, and other casualty unless Tenant
would be required to repair under Section 3;
(iii) condemnation;
(iv) damage arising from any cause not required to be repaired or
replaced by Tenant; and
(v) alterations as permitted by this Lease unless consent was
conditioned on their removal.
On surrender, Tenant shall remove from the Premises its personal
property, trade fixtures, and any alterations required to be removed under
Section 1 and repair any damage to the Premises caused by the removal. Any items
not removed by Tenant as required above shall be considered abandoned. Landlord
may dispose of abandoned items as Landlord chooses and bill Tenant for the cost
of their disposal, minus any revenues received by Landlord for their disposal.
12
ARTICLE VII
USE AND COVENANTS
Section 1. Use and Occupancy. Tenant agrees that the Premises will be
used only for general office purposes, that no unlawful use of the Premises will
be made, that no sign, name, legend, notice or advertisement of any kind will be
fixed, printed, painted or displayed on any part of the Buildings without the
prior written approval of Landlord, except that the name and suite number of the
Tenant may be displayed in a manner prescribed by Landlord and except as may be
provided in Article II, Section 1 hereof.
Section 2. Parking. Tenant agrees for itself, its employees, agents and
invitees to comply with the parking rules contained in the Parking Rules and
Regulations attached hereto as Exhibit E together with all reasonable
modifications and additions thereto which Landlord may from time to time make.
Tenant shall use parking spaces only in a manner which is compatible with the
day-to-day general use of the Buildings by its employees, visitors, customers,
invitees, guests and other tenants in the Buildings. Tenant agrees that Landlord
shall have the right to tow vehicles of Tenant and its employees, agents, guests
and visitors that are parked in such a way as to be in violation of the Parking
Rules and Regulations.
Landlord reserves the right from time to time without notice to Tenant
to (a) change the location or configuration of the parking areas of the
Buildings (the "Parking Areas"), or any portion thereof; (b) change the number
of parking spaces located within the Parking Areas, or any portion thereof; (c)
install systems to control and monitor parking in the Parking Areas, or any
portions thereof, including without limitation, a parking gate and
identification card system; (d) utilize parking guards or attendants to
supervise and control parking within the Parking Areas and to enforce the
parking rules; (e) have full access to the Parking Areas (including the right to
close or alter the means of access to the Parking Areas, or portions thereof) to
make repairs and alterations thereto, to prevent a taking by adverse possession
or prescription or to comply with applicable legal and governmental
requirements; (f) modify the parking rules; (g) tow motor vehicles parked in
violation of the parking rules; and (h) enforce the parking rules by appropriate
legal action.
Section 3. Rules and Regulations of the Buildings. The Tenant has read
the rules and regulations attached hereto as Exhibit F and made a part hereof
and hereby agrees to abide by and conform to the same and to such further
reasonable rules and regulations as the Landlord may from time to time make or
adopt for the care, protection and benefit of the Buildings or the general
comfort and welfare of the Buildings' occupants. The Tenant further agrees that
the Landlord shall have the right to waive any and all of such rules in the case
of any one or more tenants without affecting the Tenant's obligations under this
Lease and that the Landlord shall not be responsible to the Tenant for the
nonconformance by any other tenant to any rules or regulations.
13
ARTICLE VIII
INSURANCE AND INDEMNITY
Section 1. Landlord's Insurance. Landlord shall keep the Buildings
insured against damage and destruction by fire, earthquake, vandalism, and other
perils in the amount of at least 80% of the collective replacement value of the
Buildings, as said collective value may exist from time to time. In addition,
Landlord shall maintain a policy of commercial general public liability
insurance with respect to the Common Areas, covering bodily injury, death and
property damage, with a contractual liability endorsement, in the amount of at
least ($1,000,000.00) per occurrence and with an aggregate limit of at least One
Million Dollars ($1,000,000.00). Landlord's responsibility to insure its
Buildings shall not obligate Landlord to insure fixtures or other property of
Tenant.
Section 2. Tenant's Insurance. Tenant shall keep in force, during the
full term of this Lease or any renewal or extension thereof, workmen's
compensation insurance and public liability insurance issued by a nationally
recognized insurance company, with such limits as may be reasonably requested by
Landlord from time to time, but with minimum limits not less than $1,000,000.00
in the aggregate on account of bodily injury, including death, or property
damage, or both, in any one occurrence. Said policy shall name Landlord as an
additional insured and provide that it shall not be canceled for any reason
unless and until Landlord is given fifteen (15) days' notice in writing by the
insurance company. The insurance policy or other evidence of coverage
satisfactory to Landlord shall be deposited with Landlord upon occupancy of
Premises by Tenant.
Section 3. Insurance Criteria. Insurance policies required by this Lease
shall:
(i) be issued by insurance companies licensed to do business in the
state of North Carolina with general policyholder's ratings of at least A and
the financial rating of at least XI in the most current Best's Insurance Reports
available on the Commencement Date. If the Best's ratings are changed or
discontinued, the parties shall agree to an equivalent method of rating
insurance companies.
(ii) be primary policies - not as contributing with, or in excess of,
the coverage that the other party may carry;
(iii) be permitted to be carried through a "blanket policy" or
"umbrella" coverage; and
(iv) be maintained during the entire Term and any extension Terms.
Section 4. Increase in Insurance Premium. If, because of anything done,
caused to be done, permitted or omitted by the Tenant, the premium rate for any
kind of insurance affecting the Buildings shall be raised, the Tenant agrees
that the amount of the increase in premium which the Landlord shall thereby be
obligated to pay for such insurance shall be paid by the
14
Tenant to the Landlord, on demand, and that if the Landlord shall demand that
the Tenant remedy the condition which caused the increase in the insurance
premium rate, the Tenant will remedy such condition within thirty (30) days
after such demand. The Tenant agrees that it shall not do or cause to be done or
permit on the Premises, anything deemed more hazardous than use as a normal
business office.
Section 5. Tenant's Indemnity. The Tenant agrees to defend the Landlord
and the officers directors, agents, servants and employees of the Landlord
against and from any and all claims asserted by or on behalf of any person, firm
or corporation arising by reason of injury to any person or property occurring
in or about the Premises or the Buildings, occasioned in whole or in part by any
act or omission on the part of the Tenant or any employee (whether or not acting
within the scope of employment), agent, visitor, licensee, invitees, contractor,
subcontractor, assignee or tenant of the Tenant, or by reason or nonperformance
of any covenant in this Lease on the part of the Tenant and also for any matter
or thing growing out of the occupancy or use of the Premises by the Tenant or
anyone holding or claiming to hold through or under the Tenant and to indemnify
and hold Landlord harmless from any costs, damages or expenses, including
reasonable attorney's fees, resulting from such claims. Tenant agrees to pay for
all damage to the Buildings, as well as all damage to tenants or occupants
thereof, caused by the misuse or neglect of said Premises, its apparatus or
appurtenances by Tenant or any employee (whether or not acting within the scope
of employment), agent, visitor, licensee, invitees, contractor, subcontractor,
assignee or tenant of the Tenant. Landlord shall not be liable to Tenant for any
damage by or from any act or negligence of any co-tenant or other occupant of
the Buildings or by any owner or occupant of adjoining or contiguous property or
by any employee, agent, visitor, licensee, invitees, contractor, subcontractor,
assignee or tenant of any such co-tenant or other occupant.
Section 6. Landlord's Indemnity. Subject to Section 7 below and to any
other exclusions from liability contained herein or incorporated herein by
reference, the Landlord agrees to indemnify and save harmless the Tenant and the
agents, servants and employees of the Tenant from any and all claims for
personal injury or death or property damage resulting from incidents occurring
in or about the Premises or the Buildings and caused by the negligence or
willful misconduct of Landlord, its agents, employees (whether or not acting
within the scope of employment).
Section 7. Tenant's Personal Property. Tenant shall keep its personal
property and trade fixtures in the Premises and the Buildings insured with "all
risks" insurance in an amount to cover one hundred percent (100%) of the
replacement cost of the said property and fixtures. Tenant shall also keep any
non-Building standard improvements made to the Premises at Tenant's request
insured to the same degree as Tenant's personal property. Notwithstanding any
other provision of this Agreement, Tenant agrees that all personal property in
the Premises shall be and remain at Tenant's sole risk, and Landlord shall not
be liable for any damage to, theft of, or loss of such personal property arising
from any acts of negligence of any persons or from fire or from the leaking of
the roof or from the bursting, leaking, or overflowing of water, sewer or
15
steam pipes or from any other cause whatsoever; Tenant expressly agrees to
indemnify and save Landlord harmless in all such cases.
Section 8. Waiver of Subrogation. Each party waives claims arising in
any manner in its (injured party's) favor and against the other party for loss
or damage to injured party's property located within or constituting a part or
all of the Buildings. This waiver applies to the extent the loss or damage is
covered by the injured party's insurance or the insurance the injured party is
required to carry under this Article VIII, whichever is greater. The waiver also
applies to each party's directors, officers, employees, shareholders, and
agents. The waiver does not apply to claims caused by a party's willful
misconduct.
If despite a party's best efforts it cannot find an insurance company
meeting the criteria in Section 3 that will give the waiver at reasonable
commercial rates, then it shall give notice to the other party within thirty
(30) days after the Lease's Commencement Date. The other party shall then have
thirty (30) days to find an insurance company that will issue the waiver. If the
other party also cannot find such an insurance company, then both parties shall
be released from their obligation to obtain the waiver.
If an insurance company is found but it will give the waiver only at
rates greater than reasonable commercial rates, then the parties can agree to
pay for the waiver under any agreement they can negotiate. If the parties cannot
in good faith negotiate an agreement, then both parties shall be released from
their obligation to obtain the waiver.
ARTICLE IX
DAMAGE TO PREMISES
Section 1. Definition. "Relevant Space" means:
(i) the Premises as defined in Article II, excluding Tenant's
non-Building standard fixtures;
(ii) access to the Premises; and
(iii) any part of the Buildings that provide essential services to the
Premises.
Section 2. Repair of Damage. Subject to Section 5 of this Article IX, if
the Relevant Space is damaged in part or whole from any cause and the Relevant
Space can be substantially repaired and restored within one hundred and eighty
(180) days from the date of the damage using standard working methods and
procedures, Landlord shall at its expense promptly and diligently repair and
restore the Relevant Space to substantially the same condition as existed before
the damage. This repair and restoration shall be made within one hundred and
eighty (180) days from the date of the damage unless the delay is due to causes
beyond Landlord's reasonable control.
16
If the Relevant Space cannot be repaired and restored within the one
hundred and eighty (180) day period, then either party may, within ten (10) days
after determining that the repairs and restoration cannot be made within one
hundred and eighty (180) days, cancel the Lease by giving notice to the other
party. Nevertheless, if the Relevant Space is not repaired and restored within
one hundred and eighty (180) days from the date of the damage, then Tenant may
cancel the Lease at any time after the one hundred and eightieth (180th) day and
before the two hundred and tenth (210th) day following the date of damage.
Tenant shall not be able to cancel this Lease if its willful misconduct caused
the damage unless Landlord is not promptly and diligently repairing and
restoring the Relevant Space.
Section 3. Abatement. Unless the damage is caused by Tenant's willful
misconduct, the Base Rent and Additional Rent shall abate in proportion to that
part of the Premises that is unfit for use in Tenant's business. The abatement
shall consider the nature and extent of interference to Tenant's ability to
conduct business in the Premises and the need for access and essential services.
The abatement shall continue from the date the damage occurred until ten (10)
business days after Landlord completes the repairs and restoration to the
Relevant Space or the part rendered unusable and notice to Tenant that the
repairs and restoration are completed, or until Tenant again uses the Premises
or the part rendered unusable, whichever is first. In the event of a full
abatement of rent as aforesaid, the term of this Lease shall be extended
automatically for a period equal to the period of such abatement.
Section 4. Tenant's Property. Notwithstanding anything contained in
Section 1, Landlord is not obligated to repair or restore damage to Tenant's
trade fixtures, furniture, equipment, or other personal property, or any Tenant
improvements.
Section 5. Damage to Building. If:
(i) more than forty percent (40%) of either Building is damaged and the
Landlord decides not to repair and restore such Building;
(ii) any mortgagee of either Building shall not allow adequate insurance
proceeds for repair and restoration;
(iii) the damage is not covered by Landlord's insurance required by
Article VIII, Section 1; or
(iv) the Lease is in the last twelve (12) months of its term;
then Landlord may cancel this Lease. To cancel, Landlord must give notice to
Tenant within thirty (30) days after the Landlord knows of the damage. The
notice must specify the cancellation date, which shall be at least thirty (30)
but not more than sixty (60) days after the date notice is given.
17
Section 6. Cancellation. If either party cancels this Lease as permitted
by this Article, then this Lease shall end on the day specified in the
cancellation notice. The Base Rent, Additional Rent, and other charges shall be
payable up to the cancellation date and shall account for any abatement.
Landlord shall promptly refund to Tenant any prepaid, unaccrued Rent and
Additional Rent, accounting for any abatement, plus security deposit, if any,
less any sum then owing by Tenant to Landlord.
ARTICLE X
EMINENT DOMAIN
If more than twenty percent (20%) of the floor area of the Premises is
taken for any public or quasi-public use under any governmental law, ordinance
or regulation or by right of eminent domain or by private purchase in lieu
thereof, then either party hereto shall have the right to terminate this lease
effective on the date physical possession is taken by the condemning authority
or private purchaser.
If less than twenty percent (20%) of the floor area of the Premises is
taken for any public or quasi-public use in said manner, this Lease shall not
terminate. However, in the event any portion of the Premises is taken and the
Lease not terminated, the rental specified herein shall be reduced during the
unexpired term of this Lease in proportion to the area of the area of the
Premises so taken and the reduction shall be effective on the date physical
possession is taken by the condemning authority or private purchaser.
Any election to terminate this Lease following condemnation shall be
evidenced only by written notice of termination delivered to the other party not
later than fifteen (15) days after the date on which physical possession is
taken by the condemning authority or private purchaser and shall be deemed
effective as of the date of said taking. If, however, the Lease is not
terminated following a partial condemnation, Landlord shall promptly make all
necessary repairs or alterations to the Building(s) and Premises which are
required to make the Building(s) usable by Tenant subsequent to such taking.
All compensation awarded for any taking (or the proceeds of private sale
in lieu thereof), whether for the whole or a part of the Premises, shall be the
property of the Landlord whether such award is compensation for damages to
Landlord's or Tenant's interest, provided Landlord shall have no interest in any
award made to Tenant for loss of business or for the taking of Tenant's fixtures
and other property within the Premises if a separate award for such items is
made to Tenant.
18
ARTICLE XI
DEFAULT AND WAIVER
Section 1. Tenant's Default. Each of the following constitutes a
default:
(i) Tenant's failure to pay Base Rent, Additional Rent or any other sum
due hereunder, or to procure or maintain insurance as required under Article
VIII within five (5) days after Tenant receives notice from Landlord of Tenant's
failure to pay Base Rent, Additional Rent, or such other sum or to procure or
maintain insurance;
(ii) Tenant's failure to pay Base Rent or Additional Rent by the due
date, at any time during a calendar year in which Tenant has already received
two notices of its failure to pay Base Rent or Additional Rent by the due date;
(iii) Tenant's failure to perform or observe any other Tenant
obligation, except the obligation to procure and maintain insurance pursuant to
Article VIII, after a period of thirty (30) days or the additional time, if any,
that is reasonably necessary to promptly and diligently cure the failure, after
it receives notice from Landlord setting forth in reasonable detail the nature
and extent of the failure and identifying the applicable Lease provision;
(iv) Tenant's abandoning or vacating the Premises if Tenant fails to
timely pay the Base Rent, Additional Rent, and other charges due under the Lease
by the due date;
(v) Tenant's failure to vacate or stay any of the following within
thirty (30) days after they occur:
A. a petition in bankruptcy is filed by or against Tenant;
B. Tenant is adjudicated as bankrupt or insolvent;
C. a receiver, trustee, or liquidator is appointed for all or a
substantial part of Tenant's property; or
D. Tenant makes an assignment for the benefit of creditors.
Section 2. Landlord's Remedies.
(i) Landlord, in addition to the remedies given in this Lease or under
the law, may do one or more of the following if Tenant commits a default under
Section 1:
A. end this Lease, and Tenant shall then surrender the Premises to
Landlord;
19
B. enter and take possession of the Premises either with or without
process of law and remove Tenant, with or without having ended the Lease; and
C. alter locks and other security devices at the Premises.
Tenant waives claims for damages by reason of Landlord's reentry,
repossession, or alteration of locks or other security devices and for damages
by reason of any legal process.
(ii) Landlord's exercise of any of its remedies or its receipt of
Tenant's keys shall not be considered an acceptance of surrender or a surrender
of the Premises by Tenant. A surrender must be agreed to in writing by Landlord.
(iii) If Landlord ends this Lease or ends Tenant's right to possess the
Premises because of a default, Landlord may hold Tenant liable for Base Rent,
Additional Rent, and other indebtedness accrued to the date the Lease ends.
Tenant shall also be liable for the Base Rent, Additional Rent and other
indebtedness that otherwise would have been payable by Tenant during the
remainder of the term had there been no default, reduced by any sums Landlord
receives by reletting the Premises during the term. If Landlord is able to relet
the Premises during any part of the remainder of the term, at a rental in excess
of that provided for under this Lease, Tenant shall not be entitled to any such
excess rental and Tenant waives any claim thereto.
(iv) Tenant shall also be liable for that part of the following sums
paid by Landlord and attributable to that part of the term ended due to Tenant's
default:
A. reasonable broker's fees incurred by Landlord for reletting part or
all of the Premises prorated for the part of the reletting term ending
concurrently with the then current term of this Lease;
B. the cost of removing and storing Tenant's property;
C. the cost of minor repairs, alterations, and remodeling necessary to
put the Premises in a condition reasonably acceptable to a new tenant; and
D. other necessary and reasonable expenses incurred by Landlord in
enforcing its remedies.
(v) Landlord may sue and take any other action provided by law to
collect the amounts due hereunder at any time and from time to time without
waiving its rights to sue for and collect further amounts due from Tenant
hereunder.
Section 3. Waiver. The waiver by Landlord of any breach of any covenant
or agreement herein contained shall not be deemed to be waiver of such covenant
or agreement or any subsequent breach of the same or any other covenant or
agreement herein contained. The
20
subsequent acceptance of rent or of any other payment or charge hereunder by
Landlord shall not be deemed to be a waiver of any breach by Tenant of any
covenant or agreement of this Lease, other than the failure of Tenant to pay the
particular rental so accepted, regardless of Landlord's knowledge of such breach
at the time of acceptance of such rent.
Section 4. Landlord's Default. Landlord's failure to perform or observe
any of its Lease obligations after a period of thirty (30) days or the
additional time, if any, that is reasonably necessary promptly and diligently to
cure or to commence the cure such failure after receiving notice from Tenant, is
a default. The notice shall be in writing and give in reasonable detail the
nature and extent of the failure and identify the Lease provisions(s) containing
the obligations(s). If Landlord commits a default, Tenant may pursue any
remedies given to Tenant in this Lease or under the law.
Section 5. Survival. The remedies provided in this Article XI and the
indemnities provided in Article VIII, Sections 5 and 6 shall survive the ending
of this Lease. Any other provision of this Lease which by its nature would
require the survival of the ending of this Lease, shall also survive the ending
of this Lease.
ARTICLE XII
ASSIGNMENT AND SUBLETTING
Section 1. Consent Required. Tenant shall not transfer, mortgage,
encumber, assign, or sublease all or part of the Premises without Landlord's
advance written consent. Landlord's consent to any assignment or sublease shall
not be unreasonably withheld or unduly delayed.
Section 2. Reasonableness. Landlord's consent shall not be considered
unreasonably withheld if:
(i) the proposed subtenant's or assignee's financial responsibility does
not meet the same criteria Landlord uses to select comparable tenants for the
Buildings;
(ii) the proposed subtenant's or assignee's business is not suitable for
the Buildings considering the business of the other tenants and the prestige of
the Buildings; or
(iii) the proposed use is inconsistent with the use permitted by Article
VII, Section 1.
Section 3. Procedure. Tenant must provide Landlord in writing:
(i) the name and address of the proposed subtenant or assignee;
(ii) the nature of the proposed subtenant's or assignee's business it
will operate in the Premises;
21
(iii) the terms of the proposed sublease or assignment; and
(iv) reasonable financial information so that Landlord can evaluate the
proposed subtenant or assignee under this paragraph.
Landlord shall, within thirty (30) days after receiving the information
required under this Article, give notice to Tenant to permit or deny the
proposed sublease or assignment. If Landlord denies consent, it must explain the
reasons for the denial. If Landlord does not give notice within the thirty (30)
day period, then Tenant may sublease or assign part or all of the Premises upon
the terms Tenant gave in the information under this Article.
Section 4. Conditions. Subleases and assignments by Tenant are also
subject to:
(i) The terms of this Lease;
(ii) The term shall not extend beyond the Lease term;
(iii) Tenant shall remain liable for all Lease obligations;
(iv) Consent to one sublease or assignment does not waive the consent
requirements for future assignments or subleases; and
(v) Fifty (50%) percent of the consideration ("Excess Consideration")
received by Tenant from an assignment or sublease that exceeds the amount Tenant
must pay Landlord, which amount is to be prorated where a part of the Premises
is subleased or assigned, shall also be paid to Landlord. Excess Consideration
shall exclude reasonable leasing commissions paid by Tenant, payments
attributable to the amortization of the cost of Tenant improvements made to the
Premises at Tenant's cost for the assignee or sublessee, and other reasonable,
out-of-pocket costs paid by Tenant, such as attorney's fees directly related to
Tenant's obtaining an assignee or sublessee. Tenant shall pay this Excess
Consideration to Landlord at the end of each calendar year during which tenant
collects any Excess Consideration. Each payment shall be sent with a detailed
statement showing:
A. The total consideration paid by the subtenant or assignee and
B. Any exclusions from the consideration permitted by this paragraph.
Landlord shall have the right to audit Tenant's books and records to
verify the accuracy of the detailed statement.
22
ARTICLE XIII
SUBORDINATION
Tenant shall, upon request by Landlord, subject and subordinate all or
any of its rights under this Lease to any and all mortgages and deeds of trust
now existing or hereafter placed on either Building; provided, however, that
Tenant will not be disturbed in the use or enjoyment of the Premises so long as
it is not in default hereunder. Tenant agrees that this Lease shall remain in
full force and effect notwithstanding any default or foreclosure under any such
mortgage or deed of trust and that it will attorn to the mortgagee, trustee or
beneficiary of such mortgage or deed of trust, and the successor or assign of
any of them, and to the purchaser or assignee under any foreclosure. Tenant
will, upon request by Landlord, execute and deliver to Landlord, or to any other
person designated by Landlord, any instrument or instruments, including, but not
limited to, such subordination, attornment and nondisturbance agreement as may
be required by the beneficiary in any deed of trust on the property required to
given effect to the provisions of this paragraph and shall execute and deliver
to Landlord such amendments to this Lease as may be required by a proposed
beneficiary in a deed of trust on the Property; provided, however, that such
amendments do not materially increase the obligations and duties of Tenant
hereunder.
ARTICLE XIV
GENERAL PROVISIONS
Section 1. Transfer of Landlord's Interest. The term "Landlord" as used
in this Lease means only the owner or the mortgagee in possession for the time
being of the Buildings or Property or the owner of the Lease of the Buildings or
Property so that in the event of any sale of said Buildings or Property or said
Lease, or in the event of a lease of said Buildings, Landlord shall be and
hereby is entirely freed and relieved of all covenants and obligations of
Landlord hereunder, and it shall be deemed and construed without further
agreement between the parties or their successors in interest or between the
parties and the purchaser at any such sale or lease of the Buildings or
Property, that the purchaser or the lessee of the Buildings or Property has
assumed and agreed to carry out any and all covenants and obligations of
Landlord hereunder.
Notwithstanding anything to the contrary contained in this Lease, it is
specifically understood and agreed that the liability of the Landlord hereunder
shall be limited to the equity of the Landlord in the Property in the event of a
breach or the failure of Landlord to perform any of the terms, covenants,
conditions and agreements of this Lease to be performed by Landlord. In
furtherance of the foregoing, the Tenant hereby agrees that any judgment it may
obtain against Landlord as a result of the breach of this Lease as aforesaid
shall be enforceable solely against the Landlord's interest in the Property. It
is further agreed that none of the stockholders, officers, directors or heirs of
stockholders, officers or directors of Tenant shall be personally liable with
respect to any covenants or conditions of this Lease.
23
Any security given by Tenant to Landlord to secure performance of
Tenant's obligations hereunder may be assigned and transferred by Landlord to
the successor in interest to Landlord; and, upon acknowledgement by such
successor of receipt of such security and its express assumption of the
obligation to account to Tenant for such security in accordance with the terms
of this Lease, Landlord shall thereby be discharged of any further obligation
relating thereto.
Landlord's assignment, sale or transfer of the Lease or of any or all of
its rights herein shall in no manner affect Tenant's obligations hereunder.
Tenant shall thereafter attorn and look to such assignee as Landlord; provided,
Tenant first has written notice of such assignment of Landlord's interest.
Section 2. Landlord Not Partner. It is expressly understood and agreed
that the Landlord is a not a partner, joint venturer or associate of Tenant in
the conduct of Tenant's business, that the provisions of this Lease with respect
to the payment by Tenant of rent are not sharing of profits and that the
relationship between the parties hereby is and shall remain at all times that of
landlord and tenant.
No provision of this Lease shall be construed to impose upon the parties
hereto any obligation or restriction not expressly set forth herein.
Section 3. Recording. The recording of this Lease is prohibited except
as allowed in this section. However, at the request of either party, the parties
shall promptly execute and record, at the cost of the requesting party, a short
form memorandum describing the Premises and stating the term of this Lease, its
Commencement and Termination Dates, and any other information the parties agree
to include.
Section 4. Additional Instruments. The parties agree to execute and
deliver any instruments in writing necessary to carry out any agreement, terms,
condition or assurance in this Lease whenever occasion shall arise and
reasonable request for such instrument shall be made.
Section 5. Lease Not an Offer. Landlord has given this Lease to Tenant
for review. It is not an offer to lease. This Lease shall not be binding unless
signed by both parties.
Section 6. Pronouns. All pronouns and any variations thereof shall be
deemed to refer to the masculine, feminine, neuter, singular or plural, as the
identity of the person(s), firm(s), or corporation(s) may require.
Section 7. Counterparts. This Lease may be executed in counterparts, all
of which taken together, shall be deemed one original.
Section 8. Amendment and Modification. This Lease embodies the full
agreement of the parties and supersedes any and all prior understandings or
commitments concerning the subject matter of this Lease. Any modification or
amendment must be in writing and signed by both parties.
24
Section 9. Binding Effect. This Lease shall be binding upon and inure to
the benefit of the parties hereto, their assigns, administrators, successors,
estates, heirs and legatees respectively, except as herein provided to the
contrary.
Section 10. Controlling Law. This Lease and the rights of the Landlord
and Tenant hereunder shall be construed and enforced in accordance with the law
of the State of North Carolina.
Section 11. Partial Invalidity. In the event that any part or provision
of this Lease shall be determined to be invalid or unenforceable, the remaining
parts and provisions of said Lease which can be separate from the invalid,
unenforceable provision shall continue in full force and effect.
Section 12. Captions. The section titles, numbers and captions contained
in this Lease are inserted only as a matter of convenience and for reference,
and in no way define, limit, extend, modify, or describe the scope or intent of
this Lease nor any provision herein.
Section 13. Relocation. In the event Tenant occupies office space
amounting to less than fifty percent (50%) of the total area of any floor of
either Building, the Landlord shall have the right to relocate the Tenant to
another location within such Building. Landlord will pay all actual costs of the
relocation. Such a relocation is to be preceded by the Landlord's giving the
Tenant thirty (30) days written notice of such a move.
Section 14. Right of First Refusal. Landlord agrees that if it receives
a bona fide offer (the "OFFER") to rent any areas of the Buildings, which Offer
Landlord intends to accept, Landlord will offer to lease said area to Tenant on
the same terms and conditions as those specified in the Offer. Tenant shall then
have the right within five (5) days to accept Landlord's Offer and enter into a
lease for the additional area. If Tenant shall not accept Landlord's Offer
within the same period, Landlord may then lease the area on the terms and
conditions set forth in the Offer. Landlord shall be obligated to make Offers to
Tenant during the term or extension of this Lease, unless Tenant has notified
Landlord that it intends to vacate the Premises at the end of the term or
applicable extension.
Section 15. Time of Essence. Time is of the essence in the performance
of the provisions of this Lease.
Section 16. Warranties. Tenant warrants that it has had no dealing with
any broker or agent in connection with the negotiation or execution of this
Lease and Tenant agrees to indemnify and hold Landlord harmless from and against
any claims by any other broker, agent or other person claiming a commission or
other form of compensation by virtue of having dealt with Tenant with regard to
this leasing transaction.
25
Section 17. Authority of Parties. Each party warrants that it is
authorized to enter into this Lease, that the person signing on its behalf is
duly authorized to execute the Lease, and that no other signatures are
necessary.
Section 18. Termination of Existing Lease. Effective as of the
Commencement Date hereunder, Landlord and Tenant acknowledge and agree that the
Lease entered into between Landlord and Tenant dated June 1, 1993, related to
the lease by Tenant from Landlord of a portion of the Premises shall
automatically and immediately terminate and be of no further force and effect.
IN WITNESS WHEREOF, the parties hereto have caused these presents to be
executed under seal the date and year first above written.
ATTEST: LANDLORD:
BEACON INVESTMENT CORPORATION
/s/ Karen D'Eredita /s/ Umesh Kasbekar
___________________________ By_____________________________
Asst. Vice
_____________ Secretary ________________ President
[CORPORATE SEAL]
ATTEST: TENANT:
COCA-COLA BOTTLING CO. CONSOLIDATED
/s/ Patricia Gill /s/ David V. Singer
___________________________ By_____________________________
Asst. Vice
______________ Secretary _________________ President
[CORPORATE SEAL]
26