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Exhibit 10.23
FOURTH AMENDMENT TO LEASE
INVOLVING
THE MANUFACTURERS LIFE INSURANCE
COMPANY (USA)
AS "LANDLORD"
AND
THE WILLIAM CARTER COMPANY
AS
"TENANT"
DATED: DECEMBER 21, 2004
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TABLE OF CONTENTS
<Table>
Defined Terms................................................................
Premises and Expansion of Premises...........................................
Lease Commencement Date......................................................
Term and Extension of Term...................................................
Rental Rate for the 6th Floor Space..........................................
Rental Rate for the Remaining Premises; Extended Term........................
Rental Abatement for the 6th Floor Space.....................................
Operating Costs..............................................................
Tenant Improvement and Space Planning Allowance..............................
Performance of Tenant's Work.................................................
Parking......................................................................
Building Operating Hours.....................................................
Signage......................................................................
Brokerage Commission; Indemnity..............................................
Landlord Representation......................................................
Tenant Improvements..........................................................
No Other Modifications.......................................................
Georgia Law..................................................................
Transfers, Successors and Assigns............................................
Board Approval...............................................................
</Table>
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FOURTH AMENDMENT TO LEASE
THIS FOURTH AMENDMENT TO LEASE (the "Fourth Amendment"), is made this 21st
day of December, 2004, by and between THE MANUFACTURERS LIFE INSURANCE COMPANY
(USA) (as "Landlord") and THE WILLIAM CARTER COMPANY (as "Tenant").
WITNESSETH:
WHEREAS, Proscenium, LLC and Tenant did enter into that certain Lease
Agreement (the "Original Lease"), dated as of February ____, 2001, for space in
that certain building in Atlanta, Georgia known as "The Proscenium" (the
"Building").
WHEREAS, Proscenium, LLC and Tenant did enter into that certain First
Amendment to Lease (the "First Amendment"), dated May __, 2001.
WHEREAS, Proscenium, LLC and Tenant did enter into that certain Second
Amendment to Lease (the "Second Amendment"), dated as of June ____, 2001.
WHEREAS, Proscenium, LLC and Tenant did enter into that certain Third
Amendment to Lease (the "Third Amendment"), dated as of October ____, 2001.
WHEREAS, the Original Lease, as modified by the First Amendment, Second
Amendment, and Third Amendment, is sometimes referred to collectively herein as
the "Lease".
WHEREAS, Proscenium, LLC did convey its interest in the Building and Lease
to Landlord.
WHEREAS, Landlord and Tenant desire to and hereby shall, by this Fourth
Amendment, modify and amend the terms of the Lease, in the manner and for the
purposes herein set forth.
NOW, THEREFORE, for and in consideration of the mutual covenants contained
herein, and for Ten and No/100 Dollars ($10.00) and other good and valuable
consideration, paid by the parties hereto one another, the receipt and
sufficiency of which are acknowledged by the parties hereto, the parties hereto
hereby covenant and agree as follows:
1. DEFINED TERMS. All capitalized terms not defined herein shall have the
same meaning as set forth in the Lease.
2. PREMISES AND EXPANSION OF PREMISES. As a part of this Fourth
Amendment, Landlord hereby leases to Tenant, and Tenant hereby leases
from Landlord, all of the 6th floor of the Building, consisting of
25,393 rentable square feet (the "6th Floor Space"), on the terms and
conditions herein set forth. From and after the "6th Floor Lease
Commencement Date" (as herein defined), Tenant shall lease 101,572
square feet in the Building, and Tenant's Share shall be adjusted, in
accordance with the terms of the Original Lease.
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3. LEASE COMMENCEMENT DATE. The 6th Floor Lease Commencement Date for the 6th
Floor Space shall be July 3, 2005.
4. TERM AND EXTENSION OF TERM. The Lease Term for the 6th Floor Space shall
end on June 30, 2015, unless sooner terminated in accordance with the terms
of the Lease. The Lease Term for the entire Premises shall be extended by
three (3) years and nine (9) months, to June 30, 2015, on the terms and
conditions set forth herein. The Tenant may extend the Lease Term in
accordance with Section 16 herein.
5. RENTAL RATE FOR THE 6TH FLOOR SPACE. The Base Rental due from Tenant for
the Lease Term for the 6th Floor Space shall be as follows:
<Table>
<Caption>
BASE RENTAL (PER
RENTABLE SQUARE ANNUAL BASE MONTHLY
PERIOD FOOT PER ANNUM) RENTAL BASE RENTAL
--------------------------------------------------------------------------------------
July 3, 2005 - June 30, 2006 $ 26.00 $ 660,218.00 $ 55,018.17
July 1, 2006 - June 30, 2007 $ 26.52 $ 673,422.36 $ 56,118.53
July 1, 2007 - June 30, 2008 $ 27.05 $ 686,880.65 $ 57,240.05
July 1, 2008 - June 30, 2009 $ 27.59 $ 700,592.87 $ 58,382.74
July 1, 2009 - June 30, 2010 $ 28.14 $ 714,559.02 $ 59,546.59
July 1, 2010 - June 30, 2011 $ 28.71 $ 729,033.03 $ 60,752.75
July 1, 2011 - June 30, 2012 $ 29.28 $ 743,507.04 $ 61,958.92
July 1, 2012 - June 30, 2013 $ 29.87 $ 758,488.91 $ 63,207.41
July 1, 2013 - June 30, 2014 $ 30.46 $ 773,470.78 $ 64,455.90
July 1, 2014 - June 30, 2015 $ 31.07 $ 788,960.51 $ 65,746.71
</Table>
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6. RENTAL RATE FOR THE REMAINING PREMISES; EXTENDED TERM. The Base Rental due
from Tenant for the Extended Term for the Premises (excluding the 6th Floor
Space which has its Base Rental Schedule set forth in Article 5, above)
shall be as follows:
<Table>
<Caption>
BASE RENTAL
(PER RENTABLE
SQUARE FOOT ANNUAL BASE MONTHLY
PERIOD PER ANNUM RENTAL BASE RENT
--------------------------------------------------------------------------------------------
OCTOBER 1, 2011 - JUNE 30, 2015 $ 32.881 $ 2,504,841.72 $ 208,736.81
</Table>
7. RENTAL ABATEMENT FOR THE 6TH FLOOR SPACE. Notwithstanding the terms of the
Lease and the Fourth Amendment, there shall be no Base Rental due for the
6th Floor Space (but there shall still be Base Rental due for the remainder
of the Premises) for the first nineteen (19) months of the Term of Lease
for such space, so that Base Rental shall commence and be due and payable
on the 6th Floor Space on February 1, 2007.
8. OPERATING COSTS. Operating Costs shall be due and payable for the 6th Floor
Space on the same basis, and shall be calculated in the same manner, as
Operating Costs are calculated for the Premises, under the Lease, except
that the Initial Operating Costs for the 6th Floor Space only (and not for
the remainder of the Premises) shall be the Operating Costs increases, on a
per rentable square foot per annum basis, over the base year (calendar year
2005). Tenant shall, and hereby covenants and agrees to, pay to Landlord
Operating Costs for the 6th Floor Space in excess of the Initial Operating
Costs for the 6th Floor Space, with such amounts to be determined in the
manner as set forth in the Lease. Such amounts shall be paid by Tenant at
the time and in the manner that Operating Costs are payable by Tenant under
the Lease. Notwithstanding anything to the contrary, pertaining to the 6th
floor space, there shall be no increased Operating Cost payments during the
free rent period until February 2007. In addition, the rental increases
shall be prorated accordingly based upon the estimate for the increases
over the 2005 base year and prorated on a partial year basis for the eleven
(11) months in calendar year 2007.
9. TENANT IMPROVEMENT AND SPACE PLANNING ALLOWANCE. (a) The 6th Floor Space is
delivered to Tenant in an "as is" condition in accordance to the conditions
provided under the original lease dated February 16, 2001. Landlord will
provide a build-out allowance of up to Thirty-Five and No/100 Dollars
($35.00) per rentable square foot below a semi-finished ceiling, for the
6th Floor Space (the "6th Floor Allowance"). In addition to the 6th Floor
Allowance, Landlord shall provide ceiling grid cross T's, low-pressure
duct, Building standard lights, and 2x2 ceiling tiles to be installed at
Tenant's expense and standard base building blinds. Notwithstanding
anything to the contrary, the base building condition shall be in
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accordance to the terms in the Original Lease. The architect for the 6th
Floor Space shall be Thompson Ventulett, Stainback & Associates and the
contractor shall be Raven & Associates unless Tenant considers bids from
other reputable contractors subject to the reasonable approval of the
Landlord. Work in the 6th Floor Space shall otherwise generally be governed
by and prosecuted under Article 10. below.
(b) Landlord shall provide an additional tenant fit-up and finish
work allowance of Eight and No/100 Dollars ($8.00) per rentable
square foot in the Premises (excluding the 6th Floor Space), or
$609,432.00 in the aggregate. Such amount may be utilized by
Tenant at Tenant's discretion, subject to Landlord's prior
reasonable consent as to the nature and installation of the
improvements, in accordance with Article 7(a) of the Lease, and
which amount shall be due and payable to Tenant on or before
October lst, 2011 or on October 1, 2011 without Construction
Expense verification.
10. PERFORMANCE OF TENANT'S WORK.
(a) Tenant shall perform or cause to be performed all of the work
contemplated in the Premises to prepare for such Tenant's occupancy and use
(the "Tenant's Work"), using a tenant general contractor, which must be
reasonably consented to by Landlord, on a schedule reasonably consented to
by Landlord, and in accordance with plans and specifications reasonably
consented to by Landlord. The construction contract shall be in the name of
Tenant, and not Landlord.
(b) Landlord will require a high grade, first-class operation to be
conducted in the Premises similar to the quality of Tenant's existing
premises. Tenant's Work shall be performed in a first-class manner, using
new and first-class, quality materials. Tenant's Work shall be constructed
and installed in accordance with all applicable laws, ordinances, codes and
rules and regulations of governmental authorities. Tenant shall promptly
correct any of Tenant's Work which is not in conformance therewith.
c) Tenant's contract parties and subcontractors shall be subject to
reasonable administrative supervisions by Landlord in their use of the
Building and their relationship with Contractor, or contractors of other
tenants in the Building. In any event, Landlord shall have the right to
limit any Tenant's Work which might disrupt or interfere with the
operations of other tenants in the Building (such as, by way of
illustration but not limitation, drilling the slab) to during the ordinary
business hours of the Building. The entry by Tenant and/or its contract
parties into the Premises for the performance of Tenant's Work shall be
subject to all of the terms and conditions of the Lease, except the payment
of Base Rental.
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(d) Tenant's Work shall be coordinated and conducted to maintain
harmonious labor relations and not (a) to interfere unreasonably with or to
delay the completion of any work being performed by any other tenant in the
Building; or (b) to interfere with or disrupt the use and peaceful
enjoyment of other retail or office tenants in the Building.
(e) Tenant and Tenant's contract parties shall perform their work,
including any storage for construction purposes, within the Premises only.
Tenant shall be responsible for removal, as needed, from the Premises and
the Building of all trash, rubbish, and surplus materials resulting from
any work being performed in the Premises. Tenant shall exercise extreme
care and diligence in removing such trash, rubbish, or surplus materials
from the Premises to avoid littering, marring, or damaging any portion of
the Building. If any such trash, rubbish, or surplus materials are not
removed from the Building as soon as reasonably practicable in accordance
with the provisions hereof or if any portion of the Building is littered,
marred, or damaged, Landlord may cause same to be removed or repaired, as
the case may be, at Tenant's cost and expense. If Landlord incurs any costs
or expenses in performing the above, Tenant shall pay Landlord the amount
of any such cost and expenses promptly upon demand therefor.
(f) Tenant hereby appoints Kathleen Klug and Clyde Stutts, or any
other party designated by Tenant by notice to Landlord, as the authorized
representative of Tenant for purposes of dealing with Landlord with respect
to all matters involving, directly or indirectly, Tenant's Plans and
Tenant's Work including without limitation, change orders to Tenant's Plans
(the "Designated Representative"). Tenant hereby warrants and represents to
Landlord that the Designated Representative has the requisite power and
authority to deal with Landlord in the manner contemplated herein and that
Tenant shall be bound by the acts and omissions of the Designated
Representative.
(g) Tenant shall provide or cause to be provided to Landlord, with
respect to all such work to be performed by or on behalf of Tenant upon or
in the Premises, the following types of insurance:
(i) At all times during the period between the commencement of
such work and the date such work is completed and Tenant
commences occupancy of the Premises, Tenant shall maintain
or cause to be maintained, casualty insurance in "Builders
Risk" form, covering Landlord, Landlord's agents,
architects, and Tenant and Tenant's contractors and
subcontractors, as their interest may appear, against loss
or damage by fire, vandalism, and malicious mischief and
other such risks as are customarily covered by the
so-called "broad form extended coverage endorsement" upon
all the work in place and all materials stored at the
Premises and
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all materials, equipment and supplies of all kinds
incident to the work and builder's machinery, tools and
equipment while on the Premises, or when adjacent thereto,
all on a completed value basis to the full insurable value
at all times. Said Builder's Risk insurance shall contain
an express waiver of any right of subrogation by the
insurer against Landlord, its agents, employees and
contractors;
(ii) Liability insurance as required by the Lease; and
(iii) Statutory Workers' Compensation as required by the State
of Georgia or the local municipality having jurisdiction.
All insurance policies procured and maintained pursuant to this Paragraph
shall name Landlord as additional insured, shall be carried with companies
licensed to do business in the State of Georgia reasonably satisfactory to
Landlord. Tenant agrees that these policies will not be canceled without
first giving twenty (20) days written notice to the Landlord. Such policies
or duly executed certificates of insurance with respect thereto shall be
delivered to Landlord before the commencement of the work, and renewals
thereof as required shall be delivered to Landlord at least thirty (30)
days prior to the expiration of each respective policy term.
(h) Tenant shall cause all work to be performed on a lien-free basis.
Tenant shall indemnify and hold harmless Landlord, and any of Landlord's
contractors, agents and employees from and against any and all losses,
damages, costs (including costs of suits and attorneys' fees), liabilities,
or causes of action arising out of or relating to the performance of the
Tenant's Work, including but not limited to mechanics', materialmen's or
other liens or claims (and all costs or expenses associated therewith)
asserted, filed or arising out of any such work. All materialmen,
contractors, artisans, mechanics, laborers and other parties hereafter
contracting with Tenant or Tenant's contractor for the furnishing of any
labor, services, materials, suppliers or equipment with respect to the work
are hereby charged with notice that they must look solely to Tenant for
payment of same. Without limiting the generality of the foregoing, Tenant
shall repair or cause to be repaired at its expense all damage caused by
Tenant's contractor, its subcontractors or their employees acting within
the scope of their employment or agency. Tenant shall promptly pay to
Landlord, upon notice thereof from Landlord, any reasonable costs incurred
by Landlord to repair any such damage caused by Tenant's contractor or any
costs incurred by Landlord in requiring the Tenant's contractor's
compliance with any Building rules. In connection with any and all claims
against Landlord or any of its agents, contractors or employees by any
employee of Tenant's contractor, any subcontractor, anyone directly or
indirectly employed by any of them, or anyone for whose acts Tenant's
contractor or any subcontractor may be liable, the indemnification
obligations of Tenant's contractor and any subcontractor under the
agreements hereinabove referred to in
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this subparagraph shall not he limited in any way by any limitation on the
amount or type of damages, compensation or benefits payable by or for
Tenant's contractor or subcontractor under worker's compensation acts,
disability benefit acts, or other employee benefit acts.
(i) As a part of any draw request for payment of my portion of the
Allowance, Landlord may request Tenant to provide at Tenant's sole cost and
expense, information confirming:
(a) Construction progress
(b) That there are no liens outstanding against the Premises arising
out of or in connection with the work
(c) That all construction prior to the date thereof has been done
substantially in accordance with the plans and specifications
approved by Landlord ("Architect's Certificate of Completion").
(j) Landlord shall pay the 6th Floor Allowance owed to Tenant, or so much
thereof as is then due (which may or may not be all of the 6th Floor
Allowance available under this Fourth Amendment) within thirty (30)
days after receipt by Landlord of the of the information requested in
Section 10(i) above, which information may include; 1) lien waivers,
2) Architect's Certificate of Completion, 3) affidavits and other
related items from the Tenant's contractor, sufficient to waive and
release any lien claims of any party whatsoever, with respect to the
Premises, Building and Land, including, but not limited to, the claims
of any subcontractors and material suppliers engaged by, through or
under the Tenant's contractor, and 4) a Certificate of Occupancy
(unless as a result of Landlord's action or condition of the Building
or Shell Condition such Certificate of Completion or Certificate of
Occupancy is not obtainable, in which case payment shall be made
without such Certificates).
(k) Any portion of the improvement allowance not expended by the Tenant
for improvements shall be credited to Tenant either in the form of free
rent or cash upon occupancy of the expansion space.
11. PARKING. With respect to the 6th Floor Space, Landlord shall provide
parking at a ratio of two and one-half (2.5) parking spaces per 1,000
square feet of rentable space in the 6th Floor Space. The rates for such
parking spaces, which Tenant does hereby covenant and agree to pay, are
currently $90.00 per parking space, per month, for unreserved parking
spaces; $135.00 per parking space, per month, for reserved parking spaces
in the Building's parking deck; and $180.00 per parking space, per month,
for reserved parking spaces under the Building, as all such rates may be
increased by Landlord as of January 1, 2005, in connection with changes to
the parking rates for the Building, as established by Landlord and in
accordance to limitations under original lease dated February 16, 2001. As
a part of and
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within the total number of parking spaces to which Tenant has rights under
the Lease for all of the Premises, Landlord shall allocate for Tenant's use
with respect to all of the Premises, and Tenant shall accept, a total of
six (6) reserved parking spots in either the parking area underneath the
Building or in the Building's parking deck, at Tenant's option.
12. BUILDING OPERATING HOURS. The Building operating hours with respect to the
Premises shall be changed so that they commence at 7:00 A.M (and not 8:00
A.M. as set forth in the Lease), Monday through Friday.
13. SIGNAGE. Subject to and as limited by all applicable laws and City of
Atlanta zoning ordinances (and Landlord makes no warranty or representation
hereunder as to the effect or limitations of such laws and ordinances on
the obligations of Landlord under this paragraph), Landlord shall provide,
at its expense, signage for Tenant in a quality manner either on the
fascia of the Building or as a free-standing sign to be built at an
location reasonably selected by Landlord. This signage will be in a
prominent location and of a reasonable size, and will be subject to the
reasonable approval of Landlord and Tenant. Signage plans and
specifications will be provided by Landlord to Tenant for review with a
signage completion date to be as soon as reasonably practical, given the
approval requirements of the City of Atlanta. Tenant acknowledges that the
name of the Building or other tenants' names, logotypes, or both, may be
placed upon or be a part of any such signage. The signage provided to
Tenant will be more prominent than the signage provided to any other
Building tenant, unless another Building tenant occupies more square
footage than Tenant, in which case such other Building tenant can be
provided more prominent signage.
14. BROKERAGE COMMISSION; INDEMNITY. RICHARD BOWERS & COMPANY ("BOWERS") HAS
ACTED AS AGENT FOR TENANT IN THIS TRANSACTION. BOWERS SHALL BE PAID A
COMMISSION BY LANDLORD. Tenant warrants that there are no other claims for
broker's commissions or finder's fees in connection with its execution of
this Lease. Tenant hereby indemnifies Landlord and holds Landlord harmless
from and against all loss, cost, damage or expense, including, but not
limited to, attorney's fees and court costs, incurred by Landlord as a
result of or in conjunction with a claim of any real estate agent or
broker, if made by, through or under Tenant. Landlord hereby indemnifies
Tenant and holds Tenant harmless from and against all loss, cost, damage or
expense, including, but not limited to, attorney's fees and court costs,
incurred by Tenant as a result of or in conjunction with a claim of any
real estate agent or broker, if made by, through or under Landlord.
15. LANDLORD REPRESENTATION. Landlord represents and warrants to Tenant that,
as of the date of this Fourth Amendment, there is no underlying land lease,
mortgage, or first priority security interest affecting the Lease or this
Fourth Amendment or encumbering the Property or Building.
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16. TENANT IMPROVEMENTS. Section 7(a)(iii) of the Lease is hereby amended to
increase the improvement cost threshold from $5,000 to $25,000.
17. RENEWAL OF LEASE. (a) Provided this Lease is then in full force and effect
and Tenant is in full compliance with the terms and conditions of this
Lease, and there is no sublease of in excess of fifty percent (50%) of the
rentable square feet within the Premises, Landlord hereby grants to Tenant,
as a replacement of all rights for Tenant to extend the Lease Term under
the Lease, an option to renew the lease for the entire 101,572 square feet
for one period of five (5) years (the "Renewal Term"), at a rental rate
equal to the rental rate set forth in Section l7(b) below. Tenant shall
notify Landlord no less than nine (9) months prior to the end of the Term
if Tenant desires to renew this Lease under the terms of this Section 17(b)
below. If Tenant does give such notice, then the Term shall be extended by
said five (5) year period, upon the same terms and conditions as contained
in the Lease and this Fourth Amendment, except that there shall be no
allowances available except as expressly set forth in this Special
Stipulation 3 to the Lease, and the rent for such period shall be the rent
as set forth in Section 17(b) below, with Tenant's Share of Operating Costs
being due and payable by Tenant, in addition to the amounts set forth
below, on the same basis as they were paid during the initial Term. There
shall be a refurbishment allowance available to Tenant for such Renewal
Term, of Five and No/100 Dollars ($5.00) per rentable square foot therein,
for work in and improvements actually made in the Premises. Such
refurbishment allowance shall be available and shall be funded at the
commencement of the Renewal Term. If Tenant fails to give such notice of
desired renewal within said period set forth above, then Tenant shall have
no further rights to renew or extend the Term.
(b) The Base Rental rate due from Tenant for the Renewal Term shall be as
follows:
<Table>
<Caption>
BASE RENTAL (PER
RENTABLE SQUARE
PERIOD FOOT PER ANNUM)
------ ----------------
July 1, 2015 - June 30, 2016 $ 33.597
July 1, 2016 - June 30, 2017 $ 34.335
July 1, 2017 - June 30, 2018 $ 35.095
July 1, 2018 - June 30, 2019 $ 35.878
July 1, 2019 - June 30, 2020 $ 36.684
</Table>
8. NO OTHER MODIFICATIONS. Except as expressly modified by this Fourth
Amendment, the Lease remains unmodified and in full force and effect.
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GEORGIA LAW. This Fourth Amendment shall be construed and interpreted under the
laws of the State of Georgia.
TRANSFERS, SUCCESSORS AND ASSIGNS. This Fourth Amendment shall inure to the
benefit of and be binding upon Landlord, Tenant, and their respective transfers,
successors and assigns.
BOARD APPROVAL. This Fourth Amendment is being executed with the understanding
that its terms must be approved by Tenant's Board of Directors. If Tenant's
Board of Directors does not approve the terms of this Fourth Amendment, Tenant
shall have the right to void this Fourth Amendment in its entirety by giving
written notice to Landlord on or before January 17, 2005.
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IN WITNESS WHEREOF, the undersigned have caused this Fourth Amendment to be
xecuted under seal and delivered, on the day and year first above written.
TENANT:
THE WILLIAM CARTER COMPANY
By: /s/ Michael D. Casey
----------------------------
Authorized Signature
/s/ Michael D. Casey
----------------------------
Printed name of Signatory
EVP & CFO
----------------------------
Title of Signatory
By: /s/ Clyde D. Stutts
----------------------------
Authorized Signature
/s/ Clyde D. Stutts
----------------------------
Printed name of Signatory
VP Human Resources
----------------------------
Title of Signatory
(CORPORATE SEAL)
LANDLORD:
THE MANUFACTURERS LIFE INSURANCE
COMPANY (USA)
By: /s/ Terry L. Gilliam
-------------------------------------
Terry L. Gilliam, Regional Director
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