North Carolina-Statesville-Newtowne Plaza Shopping Center Lease - Interstate Development Co. and JR Tobacco of America Inc.
LEASE AGREEMENT
THIS LEASE AGREEMENT is made as of the 2nd day of May, 1993, by and between
INTERSTATE DEVELOPMENT COMPANY, a North Carolina corporation with its principal
offices in Statesville, North Carolina, hereinafter called "Landlord", and JR TOBACCO
OF AMERICA, INC., a New Jersey corporation with its principal offices in Selma,
North Carolina, hereinafter called "Tenant";
W I T N E S S E T H:
The parties hereto agree for themselves, their successors and assigns, as
follows:
1. Basic Lease Provisions. The following terms, whenever used in this Lease
with the first letter of each word capitalized, shall have only the meanings set
forth in this Paragraph, unless those meanings are expressly modified, limited or
expanded elsewhere in this Lease:
(a) Demised Premises: Space outlined in red on Exhibit A, containing a total
floor area of approximately fifty-three thousand eight hundred sixteen (53,816)
square feet, as may be adjusted pursuant to Paragraph 2.
(b) Shopping Center: That land owned by Landlord on which the Demised Premises
are located, which is outlined in green on Exhibit A and described on Exhibit B.
(c) Lease Term: Eleven (11) full Lease Years, plus the period from delivery
of possession of the Demised Premises until the Rent Commencement Date, together
with one (1) option to extend the Lease Term for a period of ten (10) years.
(d) Lease Year: The first Lease Year shall be the period commencing on the
Rent Commencement Date and terminating on the first December 31 that is at least
twelve (12) full calendar months thereafter. Each subsequent Lease Year shall be
a calendar year.
(e) Guaranteed Minimum Rent:
i. Eight Thousand Nine Hundred Sixty-Nine and 35/100 Dollars
($8,969.35) per month, during each of the first (1st) through
thirteenth (13th) months of the first (1st) Lease Year.
ii. Seventeen Thousand Nine Hundred Thirty-Eight and 70/100 Dollars
($17,938.70) per month, during each month of the remainder of the
first (1st) Lease Year.
iii. Two Hundred Fifteen Thousand Two Hundred Sixty-Four and NO/100
Dollars ($215,264.00) per annum, payable in equal monthly
installments of Seventeen Thousand Nine Hundred Thirty-Eight and
70/100 Dollars ($17,938.70), during each of the second (2nd)
through the eleventh (11th) Lease Years.
iv. Two Hundred Forty-Two Thousand One Hundred Seventy-Two and NO/100
Dollars ($242,172.00) per annum, payable in equal monthly
installments of Twenty Thousand One Hundred Eighty-One and NO/100
Dollars ($20,181.00), during each of the twelfth (12th) through
the twenty-first (21st) Lease Years (the Renewal Period).
(f) Use Permitted: For the operation of a discount variety store and for any
other lawful purpose or purposes; provided, however, that Tenant shall not use the
Demised Premises for any prohibited use as set forth in Exhibit D attached hereto.
(g) Trade Name: J.R. TOBACCO.
(h) Real Estate Taxes: Tenant's shares as set forth in Paragraph 4. The initial
estimated cost per square foot of Floor Area of the Demised Premises for the first
Lease Year is Thirty-Four Cents ($0.34).
(i) Insurance: During the initial Term of this Lease and the Renewal Period,
Tenant's share shall be Fifteen Cents ($.15) per square foot of Floor Area of the
Demised Premises.
(j) Common Area Maintenance and Security: During the initial Term of this
Lease (the 1st through 11th Lease Years), Tenant's share shall be Fifty Cents ($.50)
per square foot of Floor Area of the Demised Premises, and during the Renewal Period
(the 12th through 21st Lease Years), Tenant's share shall be Sixty Cents ($.60)
per square foot of Floor Area of the Demised Premises.
(k) Landlord's Mailing Address: Post Office Box 366, Statesville, North Carolina
28677-0366.
(l) Tenant's Mailing Address: Post Office Box 656, Selma, North Carolina 27576-
0656.
(m) Place to Pay Rent: Post Office Box 366, Statesville, North Carolina 28677-0366.
(n) Floor Area: The number of square feet of floor space within the Demised
Premises or other areas of the Shopping Center, as the case may be. All Floor Areas
shall be calculated by using dimension from the centerlines of interior or party
walls, and from the exterior faces of exterior walls.
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(o) Gross Leasable Area: Landlord warrants that, as of the date of this Lease,
the Gross Leasable Area of the Shopping Center is 154,867 square feet. The Gross
Leasable Area of the Shopping Center shall be defined as and shall mean all leasable
areas within the Shopping Center intended for the exclusive use and occupancy by
tenants of the Shopping Center. In the event the Gross Leasable Area of the Shopping
Center and/or the Floor Area of the Demised Premises changes during the Lease Term,
Tenant's pro rata share of any costs and expenses shall be adjusted accordingly;
provided, however, that in the event that the Gross Leasable Area of the Shopping
Center is reduced, Tenant's pro rata share of Common Area Maintenance and Security
expenses shall not be increased above the amount set forth in Paragraph 1(j).
(p) Rent Commencement Date: The earlier to occur of: (i) the date Tenant opens
for business in the Demised Premises; (ii) one hundred-eighty (180) days after Tenant
has received its temporary or permanent Certificate of Occupancy for the Demises
Premises; or (iii) September 1, 1993.
(q) Exhibits: The following exhibits are attached to this Lease and are hereby
incorporated in and made a part of this Lease:
i. Exhibit A - Site Plan Identifying Demised Premises and the
Shopping Center
ii. Exhibit B - Legal Description of the Shopping Center Land
iii. Exhibit C - Memorandum of Lease
iv. Exhibit D - Prohibited Uses
v. Exhibit E - Punch List
vi. Exhibit F - Subordination, Nondisturbance and Attornment
Agreement
vii. Exhibit G - Site Plan of Shopping Center and Pylon Sign
viii. Exhibit H - Permitted Encumbrances
ix. Exhibit I - Approved Signage
Each reference in this Lease to any of the Basic Lease Provisions contained
in this Paragraph 1 shall be construed to incorporate all of the terms provided
by such Basic Lease Provisions. In the events of any conflict between the Basic
Lease Provisions and the balance of this Lease, including any exhibits, riders,
addenda or amendments, then the balance of this Lease shall control.
2. Premises. Landlord hereby leases to Tenant, and Tenant hereby accepts and
rents from Landlord at the rental, and upon the terms and conditions hereinafter
set forth, the interior of
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the Demised Premises as described in Paragraph 1(a), together with the nonexclusive
right to use the Common Areas (as defined in Paragraph 9) and the nonexclusive right
to enjoy the beneficial use of easements or rights-of-way, if any, that benefit
the Shopping Center. Within sixty (60) days after Tenant takes possession of the
Demised Premises, Tenant may, at Tenant option and expense, have its architect recalculate
the Floor Area of the Demised Premises. Tenant shall submit such recalculation to
Landlord for Landlord's approval, which shall not be unreasonably withheld or delayed,
and the Guaranteed Minimum Rent and all additional charges based on the Floor Area
of the Demised Premises shall be proportionately adjusted to reflect the actual
Floor Area of the Demised Premises. The Floor Area of the Demised Premises shall
be determined by measuring from the exterior surface of exterior walls (and extensions
thereof, in the case of openings) and from the center line of demising walls, all
of which form the perimeter of the Demised Premises. Nothing contained in this Lease
shall be construed as a grant, rental or conveyance of: (i) any rights in the roof
or exterior of the building of which the Demised Premises constitute a part; (ii)
the air space (occupied or not) above a horizontal plane coterminous with the bottom
edge of the structural steel framework supporting the roof of the Demised Premises;
(iii) the Common Areas (except as expressly provided in this Lease); (iv) the air
space (occupied or not) below a horizontal plane coterminous with the finished floor
level of the Demised Premises; or (v) the land upon which the Demised Premises are
located.
3. Term. The Lease Term shall begin on the date of delivery of the Demised
Premises, as provided in Paragraph 5, and shall end at midnight on December 31,
2003, the date of expiration of the tenth (10th) Lease Year after the Rent Commencement
Date.
At the end of the Lease Term provided Tenant is not in default beyond the
expiration of any applicable cure period, Tenant shall have the option to renew
and extend the Lease Term for one (1) period of ten (10) years ("Renewal Period"),
upon the same terms and conditions set forth in this Lease, including Guaranteed
Minimum Rent as set forth in Paragraph 1(e). Tenant shall exercise each renewal
option by written notice to Landlord given on or before twelve (12) months before
the expiration of the original Lease Term. All references to the "Lease Term" or
the "Term of this Lease" shall, unless the context clearly indicates a different
meaning, be deemed to include any properly exercised Renewal Period.
4. Rent. Tenant shall pay to Landlord for the use and occupancy of the Demised
Premises the following amounts:
(a) Guaranteed Minimum Rent. Commencing on the Rent Commencement Date, Tenant
shall pay to Landlord Guaranteed Minimum Rent at the rate per annum specified in
Paragraph 1(e), payable in equal monthly installments as specified in Paragraph
1(e), in advance on or before the first day of each and every calendar month, without
demand, setoff or deduction, except as otherwise provided herein. If the Rent Commencement
Date falls on a day other than the first day of the month, then the rent for the
first fractional month shall be computed on a daily basis (based on a 30-day month)
and paid on the Rent Commencement Date.
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Landlord makes no representations as to the period or periods that any department
stores or any other tenant in the Shopping Center will be open for business, and
this Lease will not be affected by any closing of such business.
(b) Real Estate Taxes. Commencing on the Rent Commencement Date, Tenant shall
pay to Landlord, as additional rent for each Lease Year, a pro rata share of each
of the following real estate taxes, based upon the fraction having as its numerator
the Floor Area of the Demised Premises, and as its denominator the Gross Leasable
Area:
i. All real estate taxes and assessments of every kind or nature
which are now or may hereafter be imposed or assessed upon the
Demised Premises or the Shopping Center; provided, however, that
such real estate taxes and assessments shall not include any
penalties or late fees or any of Landlord's franchise, income,
sales, transfer, gift, estate or inheritance tax.
ii. All taxes or excises on rent or any other tax, levy or charge
however described levied against the Landlord by the federal
government, the State of North Carolina or any political
subdivision of the State of North Carolina on account of rent or
other charges payable to Landlord under this Lease or based upon
the parking facilities and/or the number of parking spaces
provided by the Landlord in the Shopping Center to the extent
that any such taxes are levied in substitution for real estate
taxes; provided, however, that such taxes or excises shall not
include any penalties or late fees or any of Landlord's
franchise, income, sales, transfer, gift, estate or inheritance
tax.
To the extent that there is an increase in the taxes as a result of the construction
of new leasable floor area within the Shopping Center, Tenant's pro rata share shall
be recomputed based upon the change in the total leasable space in the Shopping
Center.
Payment shall be made by Tenant within fifteen (15) days after receipt of
a written statement from Landlord setting forth the amount of such expense, showing
in reasonable detail the manner in which it has been computed, together with a copy
of the tax or assessment bill. A copy of the tax or assessment bill submitted by
Landlord to Tenant shall at all times be sufficient evidence of the amount of such
taxes.
Landlord shall pay, as and when they become due, all real estate taxes and
special and general assessments levied or imposed on the Shopping Center (including
the Demised Premises). If Landlord fails to pay any such tax or assessment upon
the Shopping Center when due, Tenant may pay any or all of such taxes. Landlord
shall promptly after demand therefor, reimburse Tenant for any such payment or expense.
If Landlord fails to reimburse Tenant within fifteen (15) days after such demand,
Tenant may offset the amount of such payment against the Guaranteed Minimum Rent.
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Landlord shall notify Tenant of any increases in the taxes and assessments
imposed or assessed upon the Demised Premises or the Shopping Center. Tenant may,
at its option and at its cost and expense, protest or appeal any such increase provided
that: (i) Tenant has given Landlord written notice of Tenant's intention to file
such protest and appeal and Landlord has not, within fifteen (15) days after Landlord's
receipt of such notice, notified Tenant that Landlord has filed a protest or appeal
or intends to file such protest and appeal within the time permitted by law, and
(ii) Tenant cooperates with other tenants in the Shopping Center interested or involved
in pursuing such a protest or appeal. If required by law, Tenant may take any action
in the name of Landlord who shall cooperate with Tenant to such an extent as Tenant
may reasonably require; provided, however, that Tenant shall fully indemnify and
save Landlord harmless from all loss, cost, damage and expense incurred by or to
be incurred by Landlord as a result thereof. In the event Landlord desires to protest
or appeal any such increase, Tenant agrees, at no cost to Tenant, to cooperate with
Landlord and execute any documents which may be reasonably necessary and proper
for any proceeding related to such protest or appeal.
(c) Insurance Expenses. Commencing on the Rent Commencement Date, Tenant shall
pay to Landlord, as additional rent for each Lease Year, a share of the cost to
Landlord of insurance obtained by Landlord pursuant to Paragraphs 12 and 13. Tenant's
share of such cost for each Lease Year during the Lease Term, including the Renewal
Period, shall be equal to Fifteen Cents ($.15) per square foot of Floor Area of
the Demised Premises. The annual charge shall be paid to Landlord in twelve (12)
equal monthly installments in advance on the first day of each calendar month.
(d) Additional Rent. In addition to all other rent required to be paid pursuant
to the terms of this Paragraph 4, Tenant shall pay, as additional rent, the sums
required to be paid pursuant to other provisions of this Lease, whether or not those
sums are designated "additional rent." If the time for payment of any such amounts
or charges is not specified in this Lease, they shall be deemed payable within ten
(10) days after written demand from Landlord.
(e) Interest and Late Charges. If Tenant fails to pay, when due and payable,
any rent or any additional rent, or amounts or charges of any kind or character
provided in this Lease, such unpaid amounts shall bear interest at Citicorp's prime
rate per annum from the date that is ten (10) days after the date due until the
date of payment; provided, however, if two (2) times in any calendar year Tenant
fails to pay when due and payable any rent or additional rent or amounts or charges
of any kind or character provided in this Lease, any subsequent amounts that Tenant
fails to pay when due and payable during such calendar year shall bear interest
from the date due until the date of payment. In addition to such interest, if Tenant
fails to pay any installment of Guaranteed Minimum Rent by the fifth (5th) day for
the month in which such installment is due, a late charge equal to two percent (2%)
of the monthly installment of Guaranteed Minimum Rent shall be assessed. In no event
may any late charge and/or interest provided in this Paragraph 4(e) exceed the maximum
permitted by law.
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(f) Payment of Rent. All rent and additional rent payments provided herein
shall be made payable to Interstate Development Company, Post Office Box 366, Statesville,
North Carolina 28677-0366, until notice to the contrary is given by Landlord.
5. Improvements and Delivery of Demised Premises.
(a) Landlord warrants that it is the owner of the Shopping Center. Landlord
has previously developed the Shopping Center with commercial retail buildings and
other improvements as shown on Exhibit A.
(b) Landlord shall deliver possession of the Demised Premises to Tenant upon
the full execution of this Lease. Tenant expressly recognizes and agrees that it
has inspected the Demised Premises, that Landlord makes no warranty whatsoever with
respect to the condition thereof, that Tenant accepts the Demised Premises in "AS
IS" condition, and that there is no obligatioin whatsoever on the part of Landlord
to make any improvement to or other modification of the Demised Premises. Notwithstanding
the terms of the preceding sentence, Landlord represents that the heating, air conditioning,
electrical and plumbing systems serving the Demised Premises are in working order,
and Landlord, at its expense, shall complete all of the repairs identified on the
punch list attached hereto as Exhibit E on or before the date that is forty-five
(45) days from the date hereof. In the event that Landlord does not complete the
repairs within such forty-five (45) day period, the Rent Commencement Date shall
be extended by one day for each day after the forty-five (45) day period that Landlord
does not complete such repairs.
(c) Upon delivery of the Demised Premises to Tenant, Tenant shall proceed
to install such stock, fixtures and equipment and to perform such other work as
shall be necessary or appropriate in order to prepare the Demised Premises for the
opening of business ("Tenant's Work"). Tenant's Work shall be performed by a licensed
contractor in a good and workman like manner with the use of good grades of materials,
in accordance with applicable laws and building codes and in a manner so as not
to structurally impair the Demised Premises or the Shopping Center. Tenant shall
be liable for any damage caused to the Demised Premises or the Shopping Center arising
as a result of or during Tenant's Work. Notwithstanding the foregoing, Tenant shall
not make any structural or exterior changes to the Demised Premises without Landlord's
prior written approval, which approval shall not be unreasonably withheld. Landlord
hereby agrees that Tenant shall have the right to install an additional truck loading
dock in the Demised Premises in accordance with plans that have been approved in
advance by Landlord, which approval shall not be unreasonably withheld.
(d) By occupying the Demised Premises after the delivery of possession, to
install fixtures, facilities or equipment, or to perform finishing work, or for
any other purpose, Tenant shall be deemed to have accepted the same and to have
acknowledged that the Demised Premises are in the condition required by this Lease,
except as otherwise provided on Exhibit E.
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6. Use of the Premises.
(a) The Demised Premises shall, during the Lease Term, be used and occupied
only for the Use Permitted, and operated under the Trade Name, specifically set
forth in Paragraphs 1(f) and 1(g), and for no other purpose and under no other name,
without the written consent of Landlord, which consent shall not be unreasonably
withheld. Tenant shall install and maintain in the Demised Premises store fixtures
of high quality and shall, during the first Lease Year, operate its business in
the whole of the Demised Premises in a high-grade reputable manner throughout the
Lease Term, keeping the Demised Premises in a clean and sanitary condition, and
in general employing its best business judgment, efforts and abilities to operate
said business in an efficient and businesslike manner, to the end that the maximum
volume of sales which can be reasonably produced in the Demised Premises shall be
realized under Tenant's Trade Name.
(b) If at any time during the Lease Term, the Demised Premises shall be closed
for business for a period of sixty (60) consecutive days or more, other than as
a result of fire or other casualty, eminent domain or force majeure, Landlord shall
have the right to terminate this Lease upon thirty (30) days written notice to Tenant.
In the event that Landlord terminates this Lease in accordance with the provisions
of this paragraph, the Lease shall terminate effective as of the date specified
in Landlord's notice (but not earlier than the date that is thirty (30) days after
such notice) and neither party shall have any further obligations hereunder, except
that both parties shall remain liable for any accrued obligations existing as of
the date of termination. Tenant shall execute a recordable cancellation agreement
acceptable to Landlord evidencing any early termination, and shall surrender the
Demised Premises on the termination date in accordance with Paragraphs 8 and 14.
(c) Tenant shall not use or suffer or permit to be used the Demised Premises
or any part thereof in violation of any law or ordinance or any regulation of any
governmental authority or in any manner that will constitute a nuisance, or that
will injure the reputation of the Shopping Center or any part thereof, or for any
hazardous purpose, or that will violate, suspend, void or serve to increase the
premium rate of or make inoperative any policy or policies of insurance of any kind
whatsoever at any time carried on any property, buildings or improvements in the
Shopping Center or any part thereof.
(d) During the Lease Term, Tenant agrees:
i. To keep the Demised Premises, including all vestibules, entrances
and returns located therein, all improvements thereon, and all
windows, doors and glass or plate glass fixtures, in a safe,
clean, orderly and sanitary condition at all times.
ii. To store or stock in the Demised Premises only such goods, wares,
merchandise, or other property as shall be reasonably required in
connection with Tenant's business in the Demised Premises.
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iii. To use for offices, clerical or other nonselling purposes only
such space in the Demised Premises as is from time to time
reasonably required for Tenant's business therein.
iv. To store all trash and garbage in adequate containers, maintained
in a neat and clean condition and located so as not to be visible
to the public in or outside the Shopping Center and so as not to
create or permit any health, safety or fire hazard, and not to
permit undue accumulation of garbage, trash, rubbish and other
refuse in the Demised Premises.
v. Not to burn any papers, trash or garbage of any kind in or about
the Demised Premises or the Shopping Center.
vi. Not to use or operate any equipment, fixtures or machinery which
in Landlord's reasonable opinion is harmful to it or disturbs
other tenants or customers in the Shopping Center.
vii. Not to use the plumbing facilities for any purpose other than
that for which they were constructed and not to dispose of any
damaging or injurious substance therein.
viii. Not to distribute any handbills or other advertising matter in
an unreasonable manner on or about any part of the Shopping
Center outside the Demised Premises, and in the event that Tenant
elects to distribute any such handbills or other advertising
matter, to promptly reimburse Landlord for any additional
cleaning expenses incurred by Landlord in connection therewith.
ix. Not to advertise any going out of business, removal, fire,
bankruptcy, auction or other distress sale on the Demised
Premises unless and until satisfactory proof has been supplied
that the person intending to conduct such sales has complied
meticulously with all legal requirements, including without
limitation any applicable rules and regulations of the Federal
Trade Commission.
x. Not to use any sidewalks, walkways or other common areas of the
Shopping Center for the keeping, displaying, advertising and/or
sale of any merchandise or other object; provided, however,
Tenant shall have the right to use, in a businesslike fashion,
the sidewalks immediately outside of and adjacent to the Demised
Premises for the exhibit and sale of its merchandise so long as
Tenant does not unreasonably interfere with pedestrian traffic in
the Shopping Center or unreasonably restrict pedestrian access by
sidewalk to other tenants in the Shopping Center.
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xi. Not to install on or about the Demised Premises any amplifiers or
similar devices and/or not to use in, on or about the Demised
Premises any advertising medium which may be heard or experienced
outside the Demised Premises, such as flashing lights,
searchlights, loudspeakers, phonographs, television or radio
broadcasts, and which unreasonably disturb and interfere with the
business conducted by other tenants in the Shopping Center.
xii. Not to install a television antenna outside the Demised Premises
without first notifying Landlord in writing; and, if Tenant is
permitted to connect with any master antenna provided by
Landlord, to furnish and install any and all wiring and booster
systems related to such connection and the operation within the
Demised Premises of television receivers, and to reimburse
Landlord for all connection charges incurred by Landlord.
xiii. To keep the Demised Premises clean, orderly, sanitary and free
from objectionable odors and from termites, insects, vermin and
other pests, and not to keep any live animals of any kind in,
upon or about the Demised Premises. Tenant agrees to establish at
its own cost and expense, a pest, vermin or other extermination
program for the Demised Premises. Any program of extermination
and the company or person performing the same shall be subject to
Landlord's approval, not to be unreasonably withheld.
xiv. To comply with any and all requirements of any of the constituted
public authorities, and with the terms of any State or federal
statute or local ordinance or regulation applicable to Tenant or
its use of the Demised Premises, and to save Landlord harmless
from penalties, fines, costs, expense or damages resulting from
failure to do so.
xv. To give to Landlord immediate verbal notice followed by prompt
written notice of any accident, fire or damage occurring on or to
the Demised Premises; provided, however, that Tenant shall not be
required to notify Landlord of any minor accidents or injuries
occurring on the Demised Premises.
xvi. To use its best efforts to perform all loading and unloading of
goods only in the areas and through such entrances as may be
designated for such purposes on Exhibit G. Trailers and/or trucks
servicing the Demised Premises shall follow such routes in the
Shopping Center as designated on Exhibit G and shall remain
parked in areas of the Shopping Center designated on Exhibit G.
xvii. To use its best efforts to require Tenant's employees to park
their cars only in those portions of the parking area or at such
other places as designated on Exhibit G.
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xviii. To comply with all reasonable rules and regulations of Landlord
in effect at the time of the execution of this Lease, or at any
time or times, and from time to time promulgated by Landlord,
which Landlord in its reasonable discretion shall deem necessary
for the proper operation of the Shopping Center, or the Demised
Premises, all in accordance with good standards for the operation
of a shopping center, including but not limited to the
installation of such fire extinguishers and other safety
equipment as Landlord may require; it being understood that
Landlord may except certain tenants leasing more than ten
thousand (10,000) square feet from compliance with all or part of
said rules and regulations. In the event that Landlord excepts
any such tenant from compliance with all or part of any rule or
regulation, Tenant shall also be excepted from compliance with
all or part of such rule or regulation.
(e) Subsequent to Tenant's occupancy and initial build out of the Demised
Premises as provided in Paragraph 5(c), Tenant shall have the right to make any
non-structural alterations and improvements costing less than $500,000.00 to the
interior of the Demised Premises without obtaining the prior written consent of
Landlord, provided that such alterations and improvements are constructed: (i) in
a good and workman like manner with the use of good grades of materials equivalent
to those used in Tenant's initial build out of the Demised Premises, (ii) in accordance
with applicable laws and building codes and (iii) in a manner so as not to structurally
impair the Demised Premises or the Shopping Center. Tenant shall be liable for any
damage caused to the Demised Premises or the Shopping Center arising as a result
of or during the construction of such alterations and improvements.
Tenant shall not install or affix any sign, device, fixture or attachment
on or to the exterior of the Demised Premises, or the building containing the Demised
Premises, including the roof or the canopy, nor place any improvement, sign or advertising
device, or obstruction of any type or kind, upon the Common Areas, or upon the exterior
Demised Premises, without first obtaining Landlord's written consent, which shall
not be unreasonably withheld. All storefront signs shall be individually illuminated
channel letters (exposed raceways not permitted), and shall be in compliance with
municipal sign ordinances and plans approved in advance by Landlord, which approval
shall not be unreasonably withheld. Landlord hereby approves Tenant's signage plans
attached hereto as Exhibit I. Tenant shall have the right to erect a highway pylon
sign at a location in the Shopping Center shown on Exhibit G provided that such
sign shall be in compliance with municipal sign ordinances and plans approved in
advance by Landlord, and Landlord agrees to cooperate with Tenant in connection
with Tenant's application for any permits necessary in connection with the erection
of such sign. Tenant shall use its best efforts to erect such sign outside of the
parking field of the Shopping Center. Notwithstanding the foregoing, in the event
that Tenant cannot locate its pylon sign outside of the parking field of the Shopping
Center due to any applicable right-of-way restrictions, Landlord agrees that Tenant
shall have the right to erect its pylon sign in the parking field at a location
to be agreed upon by Landlord and Tenant. In addition, Tenant shall have the right
to install, at its expense, a sign panel on the Shopping Center pylon in the location
previously occupied by the Roses sign panel provided that such sign panel shall
be in compliance with all
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municipal sign ordinances and plans approved in advance by Landlord. Tenant also
shall have the right, at its expense, to increase the height of the Shopping Center
pylon provided that (i) any adjustments that Tenant makes to the height of such
pylon shall be in compliance with municipal sign ordinances, any restrictions affecting
the Shopping Center and plans approved in advance by Landlord, (ii) the tenants
of the Major Stores (as hereinafter defined) do not object to any such adjustments,
and (iii) Tenant makes any such adjustments at a time and in a manner that is reasonably
satisfactory to Landlord. If Tenant shall do any of the foregoing acts in contravention
of this provision, without limiting any other remedy Landlord may have therefor
under this Lease, in law or in equity, Landlord shall have the right to remove any
sign, device, fixture or attachment, and restore the Demised Premises and/or the
Common Areas to the condition thereof prior to such act; and the cost of such removal
and restoration shall be paid by Tenant to Landlord within ten (10) days after demand
therefor. If requested by Landlord, Tenant agrees to remove any and all signs, awnings,
canopies, fixtures, alterations, installations, additions and/or improvements from
the Demised Premises upon the expiration of the Lease Term.
7. Landlord's Covenant to Maintain. Landlord will, keep and maintain in good
order and repair during the Lease Term the foundations, plumbing, electrical and
sprinkler systems to the extent that such systems are outside of the Demised Premises,
the utility lines and connections to the Demised Premises, the heating and air conditioning
system serving the Demised Premises, the exterior and principal structural portions
of the buildings and other improvements constituting the Shopping Center including,
without limitation, the roof, roof membrane, roof covering, load bearing walls,
floor slabs and masonry walls; provided, however, that Landlord will not be responsible
for or required to make, and Tenant will make, any repairs which may have been occasioned
or necessitated by the negligence of Tenant, its agents, employees or invitees.
Landlord shall not be liable for any damages resulting from its failure to make
repairs unless such failure continues beyond a reasonable time after receipt of
notice of the necessity for such repairs.
Notwithstanding the foregoing, if any repairs required to be made by Landlord
under this Lease are not completed within thirty (30) days after written notice
from Tenant, Tenant may at its option make such repairs and offset the cost of such
repairs against the Guaranteed Minimum Rent; provided, however, Tenant shall not
have the right to offset any amount exceeding $25,000 in each Lease Year unless
the amounts to be offset were paid by Tenant in connection with the replacement
of the roof on the Demised Premises in which event Tenant shall have the right to
offset an amount not to exceed $100,000 in such Lease Year. Tenant may exercise
its right to offset for roof placement only one time during the Lease Term, including
the Renewal Period. If any repairs required to be made by Landlord are commenced
when necessary, but cannot be completed within thirty (30) days, then Landlord shall
have an additional reasonable period to time to complete those repairs, so long
as it continues to prosecute the completion of such repairs with due diligence,
and provided it keeps Tenant fully informed on the progress of the repair work.
8. Tenant's Covenant to Maintain. Tenant will, at its own expense, keep and
maintain in good order and repair during the Lease Term the remainder of the Demised
Premises, including without limitation the entire interior and all plumbing, wiring
and electrical systems.
12
All parts of the interior of the Demised Premises shall be painted or otherwise
decorated by the Tenant when reasonably necessary. Tenant will surrender the Demised
Premises at the expiration or earlier termination of this Lease in as good condition
as when initially delivered, excepting only deterioration caused by ordinary wear
and tear, and except as the contrary is provided in this Lease. All replacements
and modifications shall become the property of Landlord at the end of the Lease
Term, subject to the other provisions of this Lease. Notwithstanding the foregoing,
all of Tenant's trade fixtures, equipment, pylon sign, other signs and other personal
property shall be and remain the sole property of Tenant.
If any repairs required to be made by Tenant under this Lease are not completed
within thirty (30) days, or in case of emergency if those repairs are not made immediately,
Landlord, without limiting any other right or remedy it may have therefor, may at
its option make such repairs without liability to Tenant for any loss or damage
which may result to its stock or business by reason of such repairs; and, Tenant
shall pay to Landlord, upon demand, as additional rental hereunder, the cost of
such repairs. If any repairs required to be made by Tenant are commenced when necessary,
but cannot be completed within thirty (30) days, then Tenant shall have an additional
reasonable period of time to complete those repairs, so long as it continues to
prosecute the completion of such repairs with due diligence, and provided it keeps
Landlord fully informed on the progress of the repair work.
Except as expressly provided in Paragraph 5, Paragraph 7, Paragraph 8 and
Paragraph 13, Landlord shall have no obligation to repair, maintain, alter, replace
or modify the Demised Premises or any part thereof, or any plumbing, electrical
or mechanical installation located in or serving the Demised Premises. Under no
circumstances shall Landlord be obligated to repair, replace or maintain any windows,
doors, except when and to the extent that proceeds are received from Landlord's
fire, extended coverage or other hazard insurance.
9. Common Areas.
(a) All facilities furnished in the Shopping Center and designated for the
general use, in common, of occupants of the Shopping Center, including Tenant, its
officers, agents, assigns, employees and customers, including but not limited to
parking areas, streets, sidewalks, tunnels, bridges, canopies, roadways, loading
platforms, washrooms, shelters, ramps, landscaped areas and other similar facilities
("Common Areas"), shall at all times be subject to the exclusive control and management
of Landlord; and Landlord shall have the right from time to time to change, enlarge,
diminish or rearrange the area, level, location and arrangement of the Common Areas,
to restrict parking by tenants and their employees to employee parking areas, and
to make all rules and regulations and do such things from time to time as in Landlord's
reasonable discretion may be necessary regarding the Common Areas. Notwithstanding
the foregoing, during the Lease Term, Landlord, in the exercise of its rights hereunder,
shall not materially interfere with Tenant's use and occupancy of the Demised Premises
and shall not, without Tenant's prior written consent: (i) erect any building, fence,
wall, sign or other obstruction in the "no build area" shown cross hatched on Exhibit
G, (ii) build any expansion or addition to the Shopping Center located over or under
the Demised Premises, (iii) reduce the parking ratio below a ratio of 5.5 parking
spaces for each 1,000
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square feet of Gross Leasable Area of the Shopping Center, (iv) turn off the lights
in the parking area of the Shopping Center before 11:00 p.m., or (v) allow any pay
or commuter parking in the parking areas of the Shopping Center. Landlord agrees
to maintain that portion of the Shopping Center that is adjacent to the right-of-way
of I-77 so that the underbrush on that portion of the Shopping Center does not reduce
the visibility of the Demised Premises.
(b) Commencing on the Rent Commencement Date, Tenant will pay to Landlord,
as additional rent, without deduction or set-off, its share of Landlord's costs
for operating, maintaining and securing the Common Areas. During each Lease Year
of the initial Term of this Lease (the 1st through 11th Lease Years), Tenant's share
of such costs shall be equal to Fifty Cents ($.50) per square foot of Floor Area
of the Demised Premises, and during each Lease Year of the Renewal Period (the 12th
through 21st Lease Years), Tenant's share of such costs shall be equal to Sixty
Cents ($.60) per square foot of Floor Area of the Demised Premises. This annual
charge shall be paid to Landlord in twelve (12) equal monthly installments in advance
on the first day of each calendar month. Landlord agrees that it shall require each
tenant in the Shopping Center to contribute to the cost of Common Area maintenance
which contribution shall either be: (i) taken into account by Landlord in determining
the amount of the tenant's rent, or (ii) set out as an additional charge.
(c) Notwithstanding any provisions of this Lease, if any governmental law,
statute, ordinance, regulation, executive order or proclamation or other governmental
requirement or any governmental regulation approved by Landlord requires or recommends
that Landlord not perform any obligation as contained herein in connection with
any energy generation and any energy conservation or use program, Landlord may comply
therewith without being deemed in violation of this Lease.
10. Utilities. During the Lease Term, Tenant shall pay for all electricity,
heat, air conditioning, water, sewage, janitor service, garbage disposal and other
utilities or services required by it in the use of the Demised Premises. Tenant's
use of electricity, gas and water shall be separately metered.
Landlord shall not be liable to Tenant for any damages should any utilities
be interrupted or required to be terminated because of necessary repairs or improvements
or any cause beyond the reasonable control of Landlord. Nor shall any such interruption
or cessation relieve Tenant from the performance of any of Tenant's covenants, conditions
and agreements under this Lease. Notwithstanding the foregoing, Landlord shall notify
Tenant should Landlord become aware that any such utilities will be interrupted
or terminated and shall cooperate with Tenant in its efforts to obtain: (i) the
resumption of any such utility services as soon as reasonably possible, and (ii)
alternate utility sources during the period of such interruption or termination.
11. Laws and Insurance Standards. Landlord shall, during the Lease Term, at
Landlord's sole cost and expense, promptly comply with all laws, ordinances, rules,
regulations, directives and standards of all federal, state, county and municipal
governments and all departments
14
and agencies thereof having jurisdiction over the Common Areas of the Shopping
Center now or hereafter in effect. Tenant shall, during the Lease Term, at Tenant's
sole cost and expense, promptly comply with all laws, ordinances, rules, regulations,
directives and standards of all federal, state, county and municipal governments
and all departments and agencies thereof having jurisdiction over the Demised Premises
now or hereafter in effect. Tenant shall, at Tenant's sole cost and expense, make
all changes to the Demised Premises which are or hereafter may be required in order
to comply with the foregoing; provided, however, that Tenant shall not be required
to make any structural changes to the Demised Premises unless such changes are necessitated
by Tenant's use of the Demised Premises. Tenant expressly covenants and agrees to
indemnify and save Landlord harmless from any penalties, damages or charges imposed
for any violation of any of the covenants herein expressed, whether occasioned by
Tenant or any person upon the Demised Premises by license or invitation of Tenant
or holding or occupying the same or any part thereof under or by right of Tenant.
If Tenant fails to comply with any of the foregoing, and as the result thereof the
premiums for any insurance which the Landlord may then or thereafter have covering
the Shopping Center or any part thereof be increased, then, without limiting Landlord's
other remedies or rights in regard to such failure, Tenant shall pay to Landlord
on demand all increases in any such insurance premiums on the Shopping Center, or
such part of any such increase as Landlord may require on a reasonable basis.
Tenant shall have no claim against Landlord for any damages should Tenant's
use and occupancy of the Demised Premises for the purposes set forth in this Lease
be prohibited or substantially impaired by reason of any law, ordinance or regulation
of federal, state, county or municipal governments or by reason of any part of any
legal or governmental or other public authority.
12. Indemnification of Landlord and Tenant and Liability Insurance.
(a) Tenant shall indemnify, defend and hold Landlord harmless from suits,
actions, damages, liability and expense in connection with loss of life, bodily
or personal injury or property damage arising from or out of any occurrence in,
upon, at or from the Demised Premises, or the occupancy or use by Tenant of the
Demised Premises or any part thereof, or occasioned wholly or in part by any act
or omission by Tenant, its agents, contractors, employees, servants, invitees, licensees
or concessionaires; provided that Tenant's obligations under this paragraph shall
not apply to injury or damage resulting from the gross negligence or intentional
misconduct of Landlord. Tenant shall store its property in, and shall occupy, the
Demised Premises at its own risk, and Tenant hereby releases Landlord, to the full
extent permitted by law, from all claims of every kind resulting in loss of life,
personal or bodily injury or property damage, no matter when or where same occurs.
Landlord shall not be responsible or liable at any time for any loss or damage to
Tenant's merchandise, equipment, fixtures or other personal property of Tenant or
to Tenant's business unless such loss or damage is caused by the gross negligence
or intentional misconduct of Landlord. Landlord shall not be responsible or liable
to Tenant or to those claiming by, through or under Tenant for any loss or damage
to either the person or property of Tenant that may be occasioned by or through
the acts or omissions of persons occupying adjacent, connecting or adjoining premises.
15
Landlord shall not be responsible for any injury, loss or damage to any person
or to any property of Tenant or other person caused by or resulting from bursting,
breakage or from leakage, steam or snow or ice, running, backing up, seepage, or
the overflow of water or sewage in any part of the Demised Premises or the Shopping
Center or for any injury or damage caused by or resulting from Acts of God or the
elements. For the purposes of this Paragraph 12(a), the term "Landlord" shall be
deemed to include any person or entity with which Landlord contracts to manage the
Shopping Center.
(b) Tenant shall at all times during the term of this Lease Term maintain
in full force and effect the following insurance in standard form generally in use
in the State of North Carolina, with solvent insurance companies licensed to do
business in North Carolina on an admitted basis, which are satisfactory to Landlord:
Comprehensive public liability insurance covering liability for bodily
injury, death and damage to property in the amount of at least One
Million and No/100 Dollars ($1,000,000.00) per occurrence, with an
aggregate limit of at least One Million and No/100 Dollars
($1,000,000.00).
The insurance required by this Paragraph 12(b) shall name Landlord and any person
or entity with which Landlord contracts to manage the Shopping Center as additional
insureds, and shall contain a contractual liability and a non-imputation endorsement.
In addition, the policy shall require at least thirty (30) days' written notice
from the insurance company to Landlord prior to the cancellation or non-renewal
of the policy, or any material change in the scope or amount of coverage. Prior
to the commencement of the Lease Term, and thereafter at least thirty (30) days
prior to the expiration of the policy, Tenant shall deliver to Landlord a copy of
the policy or a certificate evidencing the required insurance coverage.
(c) Tenant shall, at all times during the Lease Term, maintain workmen's compensation
insurance to comply with the applicable laws of the State of North Carolina.
(d) Landlord shall at all times during the Lease Term indemnify, defend and
hold Tenant harmless from suits, actions, damages, liability and expense in connection
with loss of life, bodily or personal injury or property damage arising from or
out of any occurrence in, upon, or at or from the Common Areas of the Shopping Center
(including the parking areas), when not a result of any act or omission of Tenant,
its agents, servants or employees; and, Landlord shall maintain in full force and
effect the following insurance on standard form generally used in the State of North
Carolina, with solvent insurance companies licensed to do business in North Carolina
on an admitted basis, covering the Common Areas:
Comprehensive public liability insurance covering bodily injury, death
and damage to property in the amount of at least One Million and
No/100 Dollars ($1,000,000.00) per occurrence with an aggregate limit
of at least Two Million and No/100 Dollars ($2,000,000.00); provided,
however, that at no
16
time will the aggregate amount of such insurance, less claims
incurred, be impaired below a limit of One Million and No/100 Dollars
($1,000,000.00).
The insurance required by this Paragraph 12(d) shall contain a non-imputation endorsement.
(e) The insurance required by this Paragraph 12 may be included in policies
of insurance covering multiple locations, provided that: (i) in all other respects,
each such policy shall comply with the requirements of this Paragraph 12; (ii) the
policy shall specify, or the insuring party shall furnish the other party with a
written certificate from the insurer specifying, (A) the maximum amount of the total
insurance afforded by the blanket policy to the Demised Premises or the Shopping
Center, as the case may be, and (B) any sublimits in the blanket policy applicable
to the Demised Premises or the Shopping Center, as the case may be, which amounts
shall not be less than the amounts required by this Paragraph 12; and (iii) the
protection afforded the insuring party under the blanket policy shall be no less
than that which would have been afforded under a separate policy or policies relating
only to the Demised Premises or the Shopping Center, as the case may be.
13. Fire Insurance Damage and Destruction.
(a) Subject to the provisions of Paragraph 4, at all times during the Lease
Term, Landlord shall pay all premiums for and maintain in effect, with a responsible
insurance company licensed to do business in the State of North Carolina on an admitted
basis, policies of insurance covering the building of which the Demised Premises
constitute a party, providing protection to the extent of not less than eighty percent
(80%) of the insurable value of said building against all casualties included under
standard insurance industry practices within the classification "Fire and Extended
Coverage, Vandalism and Malicious Mischief," including sprinkler leakage coverage.
Landlord also shall be responsible for carrying the rental interruption insurance,
if any, covering the Shopping Center. Nothing in this Paragraph 13(a) shall prevent
the taking out of policies of blanket insurance, which may cover real and/or personal
property and improvements in addition to the building of which the Demised Premises
constitute a part; provided, however, that in all other respects each such policy
shall comply with the other provisions of this Paragraph 13(a). Nothing herein shall
be construed to require Landlord to insure those items that Tenant is obligated
to insure pursuant to Paragraph 13(b).
(b) At all times during the Lease Term, Tenant shall pay all premiums for
and maintain in effect, with a responsible insurance company licensed to do business
in the State of North Carolina on an admitted basis, the following policies of insurance:
Insurance covering Tenant's inventory, improvements, trade fixtures,
furniture and equipment used in the Demised Premises, providing
protection to the extent of eighty percent (80%) of the insurable
value of the same against all casualties included under standard
insurance industry practices within the classification "Fire and
Extended Coverage, Vandalism and Malicious Mischief," including
sprinkler leakage coverage.
17
Tenant will furnish to Landlord, within thirty (30) days before Tenant opens
for business, and thereafter not less than thirty (30) days prior to the expiration
of any such policy, copies of policies or certificates of insurance evidencing the
coverages required by this Paragraph 13(b). All policies required of Tenant shall
contain endorsements requiring at least thirty (30) days' prior written notice from
the insurance company to Landlord prior to the cancellation or non-renewal of the
policy, or any material change in the scope or amount of coverage.
(c) The policies of hazard insurance required by Paragraphs 13(a) and 13(b)
shall contain a waiver of any right of subrogation which Landlord's or Tenant's
insurer may acquire against the other party by virtue of payment of any claim under
such insurance policy, so long as such a waiver of subrogation is available without
the payment of additional premium. It is the intent of Landlord and Tenant that
there be a mutual waiver of subrogation. If the waiver of subrogation is available
only upon payment of any additional premium, the party that would be benefitted
by the waiver may require the insuring party to obtain the waiver, provided that
the benefitted party agrees to pay the additional premium therefor.
(d) Unless this Lease is terminated as provided in Paragraph 13(f) after any
damage or destruction to the Demised Premises, Landlord shall, as soon as reasonably
possible, repair and restore those parts of the Demised Premises constructed by
it to substantially the same condition as existed immediately prior to the damage.
Tenant shall likewise, as soon as reasonably possible, repair and restore all other
parts of the Demised Premises (not required to be repaired or restored by Landlord)
substantially to the condition as existed immediately prior to the damage, including
all exterior signs, trade fixtures, equipment, display cases, furniture, furnishings
and other installations of Tenant.
(e) All insurance proceeds payable with respect to the Demised Premises, excluding
the proceeds payable to Tenant pursuant to Paragraph 13(b), shall belong to and
shall be payable to Landlord. If this Lease is not terminated as provided in Paragraph
13(f), Landlord shall disburse and apply any insurance recovery as follows: first,
to be applied against the cost to Landlord of Landlord's restoration obligations;
second, to be paid to Tenant to the extent of the cost of Tenant's restoration obligations,
not including furniture, furnishings and movable trade fixtures and not including
repairs covered by insurance maintained by Tenant; and third, the balance of any
insurance recovery shall belong to and be the exclusive property of Landlord. Landlord
shall retain an independent insurance adjuster for the purpose of apportioning the
balance of Landlord's insurance recovery among affected tenants in the event that
premises other than the Demised Premises are damaged or destroyed as a result of
the insured casualty. The findings of the adjuster shall be binding and conclusive
upon all affected tenants. The cost of such adjuster's services shall be charged
and payable out of the balance of the insurance recovery.
(f) If the Demised Premises or any or all of the buildings of the Shopping
Center are damaged or destroyed by any casualty not covered by the insurance maintained
by Landlord pursuant to Paragraph 13(a), or if the Demised Premises or any or all
of the buildings of the Shopping Center are damaged or destroyed by any casualty
covered by the insurance maintained by
18
Landlord pursuant to Paragraph 13(a) and either the proceeds therefrom are insufficient
to cover Landlord's restoration obligations or Landlord's architect certifies that
the extent of such damage or destruction is one-fifth (1/5th) or more of the replacement
value thereof immediately prior to the occurrence of such damage or destruction,
then Landlord shall have the option to terminate this Lease by giving Tenant notice
in writing any time within ninety (90) days after the occurrence of such casualty;
provided, however, that if the Demised Premises are not damaged by such casualty
or if the restoration thereof because of any such casualty would be fully covered
by the insurance maintained by Landlord pursuant to Paragraph 13(a), and if Landlord
continues to operate that portion of the Shopping Center containing the Demised
Premises and Tenant agrees to continue its operation in accordance with the terms
of this Lease, then Landlord shall have no right under this Paragraph 13(f) to terminate
Tenant because of such destruction. If the Demised Premises are damaged or destroyed
during the last two Lease Years and Landlord's architect certifies that the extent
of such damage or destruction is one-fifth (1/5th) or more of the replacement value
thereof immediately prior to the occurrence of such damage or destruction, Tenant
shall have the option to terminate the Lease by giving Landlord notice in writing
any time within ninety (90) days after the occurrence of such casualty.
(g) If the Demised Premises are damaged or destroyed, but this Lease is not
terminated pursuant to Paragraph 13(f), then upon the expiration of the applicable
ninety (90) day period provided for in Paragraph 13(f), or upon notice by Landlord
to Tenant prior thereto (but subsequent to the end of the thirty (30) day period,
if applicable) that Landlord has elected not to terminate this Lease, Landlord and
Tenant shall commence their respective obligations under Paragraph 13(d) as soon
as is reasonably possible and prosecute the same to completion with all due diligence.
(h) In the event of any termination of this Lease under the provisions of
Paragraph 13(f), this Lease shall terminate on the date of the damage or casualty,
and Landlord shall return to Tenant any rent paid for the period after such date.
If the Demised Premises are damaged or destroyed by any casualty covered by the
insurance maintained by Landlord pursuant to Paragraph 13(a) but this Lease is terminated
pursuant to Paragraph 13(f), then, subject to the rights of the first mortgagee,
that portion of the insurance proceeds attributable to Tenant's permanent leasehold
improvements shall be allocated between Landlord and Tenant, with Landlord reserving
a percentage of such proceeds equal to the percentage of the Lease Term completed
on the date of such termination.
(i) If the Demised Premises are damaged, Guaranteed Minimum Rent and other
charges payable under this Lease shall be abated in proportion to the degree in
which Tenant's use of the Demised Premises is impaired during the period of any
damage, repair or restoration provided for in this Paragraph 13. Tenant shall continue
to operate its business in the Demised Premises during any such period, to the extent
reasonably practicable from the standpoint of reasonable business management. Except
for the abatement of Guaranteed Minimum Rent and other charges provided in this
Paragraph 13, Tenant shall not be entitled to any compensation or damage from Landlord
for loss in the use of the whole or any part of the Demised Premises and/or any
inconvenience or annoyance occasioned by any damage, destruction, repair or restoration.
19
14. Ownership of Certain Property and Surrender of Premises. Upon the termination
of this Lease, Tenant shall surrender to Landlord the Demised Premises, including,
without limitation, all buildings, apparatus and fixtures (except pylon signs, other
signs, movable trade fixtures, equipment and furniture installed by Tenant) then
upon the Demised Premises, in good condition and repair, and all alterations, improvements,
additions, machinery and equipment which may be made or installed from time to time
by either part hereto to, in, upon or about the Demised Premises; and, upon such
termination, the same shall be surrendered to Landlord by Tenant without any injury,
damage or disturbance thereto or payment therefor. The property to be surrendered
to Landlord shall include but not be limited to all components of the heating, air
conditioning (including the portion thereof outside the Demised Premises, if any),
plumbing and electrical systems, lighting fixtures and fluorescent tubes and bulbs,
all conveyors and partitions (whether removable or otherwise). Tenant shall promptly
repair any damage to the Demised Premises resulting from the installation or removal
of any of the foregoing items.
15. Landlord's Entry. Upon no less than twenty-four (24) hours prior notice
to Tenant (except in the case of an emergency in which event Landlord shall have
no obligation to notify Tenant), Landlord shall have the right to enter upon the
Demised Premises at all reasonable times during the Lease Term for the purposes
of inspection, maintenance, repair and alteration and, during the period commencing
sixty (60) days prior to the expiration of this Lease, to show the same to prospective
tenants.
16. Default. If Tenant fails to pay any rent or other sum of money payable
under this Lease within ten (10) days after notice of such default has been given
to Tenant, or if Tenant fails to perform any other of the terms, conditions or covenants
contained in this Lease to be observed or performed by it and does not remedy such
default within thirty (30) days after written notice thereof or, if such default
cannot be remedied in such period, does not within such thirty (30) days commence
such act or acts as shall be necessary to remedy the default or does not complete
such act or acts promptly, or if Tenant becomes bankrupt or insolvent, or files
any debtor proceedings, or files in any court pursuant to any statute, either of
the United States or of any State a petition in bankruptcy or insolvency or for
reorganization, or files or has filed against it a petition for the appointment
of a receiver or trustee for all or substantially all of the assets of Tenant and
such petition is not vacated or set aside within thirty (30) days from the date
of such appointment, or if Tenant makes an assignment for the benefit of creditors,
or petitions for or enters into an arrangement, or suffers this Lease to be taken
under any writ of execution and such writ is not vacated or set aside within thirty
(30) days, then in any such event Landlord shall have the right to terminate and
cancel this Lease. In addition, Landlord, without excluding other rights or remedies
that it may have, shall have the immediate right of reentry and may remove all persons
and property from the Demised Premises and dispose of such property as it sees fit,
all without resort to legal process and without being deemed guilty of trespass,
or becoming liable for any loss or damage which may be occasioned thereby. If Landlord
elects to reenter as herein provided, or if it takes possession pursuant to legal
proceedings, it may either terminate this Lease or it may from time to time without
terminating this Lease, make such repairs as may be necessary in order to relet
the Demised Premises, and relet the Demised Premises for such term and at such rentals
and upon such
20
other terms and conditions as Landlord may deem advisable. No such reentry or taking
possession of the Demised Premises by Landlord shall be construed as an election
to terminate this Lease unless a written notice of such intention is given by Landlord
to Tenant at the time of such reentry; but, notwithstanding any such reentry and
reletting without termination, Landlord may at any time thereafter elect to terminate
this Lease for such previous breach. In the event of any termination by Landlord,
whether before or after reentry, Landlord may immediately recover from Tenant damages
incurred by reason of such breach, including, but not limited to, the cost of recovering
the Demised Premises, its costs and expenses (including attorney's fees) incurred
in connection with Tenant's default, the cost or preparing the Demised Premises
for occupancy by a new tenant or tenants, and the difference in value between the
rent which would be payable by Tenant for the remainder of the Lease Term and the
reasonable rental value of the Demised Premises for the remainder of the Lease Term.
In determining amounts other than Guaranteed Minimum Rent that would be payable
by Tenant under this Lease, subsequent to default, the annual amount payable for
each year of the unexpired Lease Term shall be equal to the average annual amount
(including additional rent) paid or payable by Tenant from the commencement of the
Lease Term to the date of default. Notwithstanding anything to the contrary set
forth in this paragraph 16, Landlord agrees to make reasonable efforts to mitigate
its damages.
17. Remedies Cumulative - Nonwaiver. No remedy herein or otherwise conferred
upon or reserved to Landlord or Tenant shall be considered exclusive of any other
remedy, but the same shall be distinct, separate and cumulative and shall be in
addition to every other remedy given hereunder, or now or hereafter existing at
law or in equity or by statute; and every power and remedy given by this Lease to
Landlord or Tenant may be exercised from time to time as often as occasion may arise,
or as may be deemed expedient. No delay or omission of Landlord or Tenant to exercise
any right or power arising from any default on the part of the other shall impair
any such right or power, or shall be construed to be a waiver of any such default
or an acquiescence thereto. In particular, the receipt by Landlord of rent with
the knowledge of the breach of any covenant of this Lease by Tenant shall not be
deemed a waiver of such breach. No provision of this Lease shall be deemed to have
been waived by Landlord or Tenant unless the waiver is in writing and signed by
the benefiting party.
18. Eminent Domain. If any substantial part of the Demised Premises or more
than fifteen percent (15%) of the total Shopping Center is taken under the power
of eminent domain (including any conveyance made in lieu thereof), and such taking
makes the operation of Tenant's business on the Demised Premises impractical, then
Tenant shall have the right to terminate this Lease by giving Landlord written notice
of such termination within thirty (30) days after such taking. Notwithstanding the
foregoing, any parking areas taken under the power of eminent domain shall be excluded
from that portion of the Shopping Center taken for the purposes of determining Tenant's
rights under this Paragraph 18 provided that Landlord notifies Tenant, within thirty
(30) days of the date of such taking, of Landlord's intention to replace such parking
areas. If Tenant does not so elect to terminate this Lease, Landlord, at its option,
may either terminate this Lease or apply the proceeds of such condemnation to repair
and restore the Demised Premises to tenantable condition; provided, however, that
if Landlord continues to operate or rebuilds that portion of the Shopping Center
21
containing the Demised Premises and Tenant agrees to continue its operation in
accordance with the terms of this Lease, then Landlord shall have no right under
this Paragraph 18 to terminate Tenant because of such taking. In the event that
neither Tenant nor Landlord elect to terminate this Lease, the Guaranteed Minimum
Rent shall be reduced as of the date of the actual transfer of the property so taken
to any amount equal to the product obtained by multiplying the Guaranteed Minimum
Rent immediately preceding the taking by a fraction, the numerator of which shall
be the Floor Area of the Demised Premises remaining after such taking and the denominator
of which shall be the Floor Area of the Demised Premises immediately prior to such
taking. Guaranteed Minimum Rent also shall be justly and equitably reduced to reflect
a taking of or denial or diminishing of adequate access to all or any part of the
Common Area. During the period of any restoration, Guaranteed Minimum Rent shall
be abated in proportion to that portion of the Demised Premises which is not used
or occupied by Tenant during such period.
All compensation awarded for any taking (or the proceeds of private sale in
lieu thereof), whether for the whole or a part of the Demised Premises, shall be
the property of Landlord, whether such award is compensation for damages to Landlord's
or Tenant's interest in the Demised Premises, and Tenant hereby assigns all of its
interest in any such award to Landlord; provided, however, Landlord shall have no
interest in any award made to Tenant for loss of business, moving expenses or for
the taking of Tenant's fixtures and other property within the Demised Premises if
a separate award of such items is made to Tenant, but any such award to Tenant shall
be subject to the prior rights of the first mortgagee.
19. Financial Information. Tenant shall provide to Landlord, within thirty
(30) days after written request by Landlord, such financial information concerning
Tenant (and the guarantor of this Lease, if this Lease is guaranteed) and Tenant's
business operations as may be reasonably requested by any prospective mortgagee
or purchaser of the Shopping Center. Any financial information delivered pursuant
to this Paragraph 19 may be relied upon by any prospective mortgagee or purchaser
of the Shopping Center; provided, however, that any such financial information shall
be remain confidential and utilized only for bona fide business reasons related
to such mortgage, purchase and/or the obtaining thereof, except where the contrary
is required by law.
20. Assignment, Subletting and Hypothecation of Lease.
(a) Except as provided in Paragraph 20(b), not voluntarily or by operation
of law, assign, transfer, mortgage or otherwise encumber all or any part of Tenant's
interest in this Lease or in the Demised Premises or sublet the whole or any part
of the Demised Premises without first obtaining in each and every instance the prior
written consent of Landlord, which consent shall not be unreasonably withheld. The
consent by Landlord to any assignment or subletting shall not constitute a waiver
of the necessity for such consent to any subsequent assignment or subletting. Receipt
by Landlord of rent from any party other than Tenant shall not be deemed to act
as a consent to any such assignment or subletting, nor relieve Tenant of its obligation
to pay the rent provided herein for the full term of this Lease.
22
(b) Tenant shall have the right to assign the Lease to any corporation that
controls Tenant, is controlled by Tenant, or is under the control of a common parent
company with Tenant ("control" meaning the ownership of more than fifty percent
of the stock of a corporation), any corporation resulting from a merger or consolidation
with Tenant so long as the net worth of such successor equals or exceeds Tenant's
net worth, or any other entity experienced in the operation of a retail establishment
of the size and type contemplated by this Lease or, subject to the restrictions
set forth below, sublet all or any portion of the Demised Premises without the consent
of Landlord. Notwithstanding the foregoing, it is understood that Landlord has agreed
to lease the Demised Premises to Tenant for the operation of an anchor store and
that Tenant may not sublet portions of the Demised Premises in contravention of
this intent or so as to create multiple stores or spaces within the Demised Premises
with different uses, names or purposes.
(c) If Landlord consents to any transfer of Tenant's interest in this Lease,
or if Landlord's consent is not required, then the term "Tenant" shall thereafter
be deemed to include, without further reference, the party to whom such interest
is transferred, which is, for example, but without limiting the generality thereof,
any subtenant, assignee, concessionaire or licensee. Notwithstanding any assignment
or sublease permitted hereby or consented to by Landlord, Tenant, and any guarantor
of this Lease, shall remain fully liable and shall not be released from performing
any of the terms of this Lease; but, in case of amendment without Tenant's written
consent, after assignment, Tenant's obligations shall be limited to those existing
at the time of the assignment. So long as Tenant remains fully liable under the
terms of this Lease, Tenant shall be entitled to receive the excess of all rent
and other consideration due from any subtenant for any month over that portion of
the Guaranteed Minimum Rent due under this Lease for said month which is allocable
on a square footage basis to the space sublet.
21. Notices. All notices provided for in this Lease shall be in writing and
shall be deemed to be given when sent by prepaid registered or certified mail, return
receipt requested, addressed to the parties as follows:
to Landlord: Interstate Development Company
Post Office Box 366
Statesville, North Carolina 28677-0366
Attention: Robert A. Collier, Jr.
to Tenant: JR Tobacco of America, Inc.
Post Office Box 656
Selma, North Carolina 27576-0656
Attention: Robert Broglia
Either party may, from time to time, by notice as herein provided, designate a
different address to which notices to it shall be sent.
23
22. Holding Over. If Tenant remains in possession of the Demised Premises
or any part thereof after the expiration of the Lease Term with Landlord's acquiescence
and without any written agreement of the parties, Tenant shall be only a tenant
from month to month, and there shall be no renewal of this Lease or exercise of
an option by operation of law.
23. Subordination. This Lease is subject and subordinate to any and all mortgages
or deeds of trust now or hereafter placed on the Demised Premises; provided, however,
that in each such case the holder of said mortgage or the trustee of such deed of
trust shall agree that this Lease shall not be divested or in any way affected by
a foreclosure or other default proceedings under the mortgage, deed of trust or
the obligations secured thereby, so long as Tenant shall not be in default under
the terms of this Lease; and Tenant agrees that this Lease shall remain in full
force and effect notwithstanding any such default proceeding. Tenant further agrees
that it will attorn to the mortgagee, trustee or beneficiary of such mortgage or
deed of trust, their successors or assigns or to the purchaser or assignee under
any such foreclosure. Tenant will, upon request by Landlord, execute, deliver to
Landlord, or to any other person designated by Landlord, any instrument or instruments
required to give effect to the provisions of this Paragraph 23. Landlord shall obtain
a subordination, nondisturbance and attornment agreement from the holders and the
trustees of any existing deeds of trust in substantially the form attached hereto
as Exhibit F, provided that Tenant delivers to Landlord a copy of such agreement
that has been executed by Tenant.
24. Transfer of Landlord's Interest. In the event of the sale, assignment
or transfer by Landlord of its interest in the Shopping Center or in this Lease
(other than a collateral assignment to secure a debt of Landlord) to a successor
in interest that expressly assumes the obligations of Landlord under this Lease,
Landlord shall, upon notice to Tenant of such sale, assignment or transfer, be released
or discharged from all of its covenants and obligations hereunder, except such obligations
as shall have accrued prior to any such sale, assignment or transfer; and Tenant
agrees to look solely to such successor in interest of Landlord for performance
of such obligations. Landlord's assignment of this Lease or of any or all of its
rights herein shall in no manner affect Tenant's benefits or obligations hereunder.
Tenant shall thereafter attorn and look to such assignee, as Landlord, provided
Tenant has first received written notice of such assignment of Landlord's interest.
25. Landlord's Warranties and Representations. Landlord warrants and represents
that:
(a) it shall not use the Shopping Center or any part thereof in violation
of any law or ordinance or any regulation of any governmental authority or in any
manner that will constitute a nuisance, or that will injure the reputation of the
Shopping Center or any part thereof, or for any hazardous purpose, or that will
violate, suspend, void or serve to increase the premium rate of or make inoperative
any policy or policies of insurance of any kind whatsoever at any time carried on
any property, buildings or improvements in the Shopping Center or any part thereof.
24
(b) it has full right and authority to lease the Demised Premises upon the
terms and conditions set forth in this Lease free and clear of all liens and encumbrances
except for the Permitted Encumbrances identified on Exhibit H;
(c) Tenant shall peacefully and quietly hold and enjoy the Demised Premises
for the full Lease Term so long as it does not default in the performance of any
of its covenants hereunder;
(d) it shall not, from and after the date hereof, lease any premises in the
Shopping Center for any noxious or offensive use or for the operation of a auditorium,
meeting hall, school or other place of public assembly, gymnasium, health club,
dance hall, night club, off-track betting business, billiard or pool hall, bingo
parlor, massage parlor, video game arcade, bowling alley, skating rink, car wash,
car repair or car rental agency or adult book or video tape store, manufacturing
facility, warehouse or office use (except as incidental to a permitted use) or lease
any premises in the Shopping Center within two hundred fifty (250) feet of the Demised
Premises for the operation of a restaurant containing greater than 2,000 square
feet of Floor Area or seating for more than forty (40) people unless such restaurant
is located in the space now or formerly occupied by Glutton's restaurant or in the
space now or formerly occupied by the Sun Glass Hut; provided, however, that all
of such restrictions shall not apply to existing leases or tenants in the Shopping
Center;
(e) it shall operate the Shopping Center in a manner consistent with the operation
of other first-class shopping centers in the Statesville, North Carolina area;
(f) to the best of its knowledge, there are no pending or threatened condemnation
or eminent domain proceedings which would affect the Shopping Center or the Demised
Premises; and
(g) it shall, to the extent applicable, comply with the rules and regulations
of the Shopping Center as set forth in Paragraph 6(d) with respect to the Common
Areas of the Shopping Center.
26. Short Form Lease. Upon the Rent Commencement Date, the parties shall execute
a memorandum or short form lease agreement, in the form attached hereto as Exhibit
C, specifying the commencement and termination dates of the Lease Term and including
such other provisions of this Lease (exclusive of provisions dealing with monetary
terms) as either party may desire to incorporate therein.
27. Estoppel Certificate. Within ten (10) days after request therefor by Landlord
or any mortgagee or trustee under a mortgage or deed of trust covering the Demised
Premises, or if, upon any sale, assignment or other transfer of the Demised Premises
by Landlord, an estoppel certificate shall be required from Tenant, Tenant shall
deliver in recordable form a statement to any proposed mortgagee or other transferee,
or to Landlord, certifying any facts that are then true with respect to this Lease,
including without limitation (if such is the case) that this Lease is in full force
and effect, that Tenant is in possession of the Demised Premises, that Tenant has
commenced the payment of rent, and that there are no defenses or offsets to this
Lease claimed by Tenant.
25
Within ten (10) days after request therefor by Tenant, Landlord shall deliver
in recordable form a statement to Tenant certifying any facts that are then true
with respect to this Lease, including without limitation (if such is the case) that
this Lease is in full force and effect, that Tenant is in possession of the Demised
Premises, that Tenant has commenced the payment of rent, and that to the best of
Landlord's knowledge there are no defenses or offsets to this Lease claimed by Tenant.
28. Mechanics' Liens. Tenant covenants and agrees to do all things necessary
to prevent the filing of any mechanics' or other liens against the Demised Premises
or any part thereof by reason of work, labor, services or materials supplied or
claimed to have been supplied to Tenant, or anyone holding the Demised Premises
or any part thereof, through or under Tenant. If any such lien shall at any time
be filed against Tenant's interest in the Demised Premises, Tenant shall cause the
same to be discharged of record within twenty (20) days after the date of filing
of the same. Notwithstanding the foregoing, Tenant shall have the right to contest
the validity or amount of any such lien, provided that the payment of such amount
is bonded during the pendency of such contest, but upon the final determination
of such contest Tenant shall immediately pay any judgment rendered with all proper
costs and charges (including reasonable attorneys' fees) and shall have the lien
released at its own expense. In lieu of bonding Tenant may obtain other security
acceptable to Landlord. If Tenant shall fail to discharge such lien within such
period, then, in addition to any other right or remedy of Landlord resulting from
Tenant's default, Landlord may, but shall not be obligated to, discharge the same
either by paying the amount claimed to be due or by procuring the discharge of such
lien by giving security or in such other manner as is, or may be, prescribed by
law. Nothing contained in this Paragraph 28 shall imply any consent or agreement
on the part of Landlord to subject Landlord's estate to liability under any mechanics'
or other lien law.
29. Force Majeure. If Landlord or Tenant is delayed, hindered or prevented
from the performance of any act required hereunder, by reason of governmental restrictions,
scarcity of labor or materials, strikes, fire, or any other reasons beyond its control,
the performance of such act shall be excused for the period of delay, and the period
for the performance of any such act shall be extended for the period necessary to
complete performance after the end of the period of such delay. Notwithstanding
the terms of the preceding sentence, except as otherwise provided in this Lease,
the provisions of this Paragraph 29 shall not be applicable to Tenant's obligations
to pay rent or any other sums, monies, costs, charges or expenses required to be
paid by Tenant subsequent to the Rent Commencement Date.
30. Limitation of Liability. Notwithstanding any provision in this Lease to
the contrary, Tenant agrees that it shall look solely to the estate and property
of Landlord in the land and buildings comprising the Shopping Center for the collection
of any judgment (or other judicial process) requiring the payment of money by Landlord
for any default or breach by Landlord of any of its obligations under this Lease,
subject, however, to the prior rights of any ground or underlying landlord or the
holder of any mortgage covering the Shopping Center or Landlord's interest therein.
No other assets of Landlord shall be subject to levy, execution or other judicial
process for the satisfaction of Tenant's claim. This provision shall not be deemed,
construed or interpreted to be or constitute an agreement, express or implied, between
Landlord and Tenant that Landlord's interest
26
in this Lease or in the Shopping Center shall be subject to impressment of an equitable
lien or otherwise.
31. Real Estate Brokers. Landlord and Tenant represent and warrant to each
other that no brokers' or real estate commissions will be due as a result of this
Lease, except for that commission to be paid by Landlord to Faison & Associates,
Inc. ("Faison") in accordance its agreement with Landlords and that commission to
be paid by Faison and Tenant to Holland Realty and Mortgage Corporation in accordance
with its agreement with Faison and Tenant. Landlord and Tenant each agree to indemnify,
defend and hold the other party harmless from and against any and all claims, damages
or liability (including reasonable attorneys' fees) resulting from or relating to
the untruth of the foregoing representation by the indemnifying party.
32. Accord and Satisfaction. No payment by Tenant or receipt by Landlord of
a lesser amount than any installment or payment of rent or other charges due under
this Lease shall be deemed to be other than on account of the amount due, and no
endorsement or statement on any check or any letter accompanying any check or payment
of rent or other charges shall be deemed an accord and satisfaction, and Landlord
may accept such check or payment without prejudice to Landlord's right to recover
the balance of such installment or payment of rent or other charge or pursue any
other remedies available to Landlord. No receipt of money by Landlord from Tenant
after the termination of this Lease or Tenant's right of possession of the Demised
Premises shall reinstate, continue or extend the Lease Term.
33. Nature and Extent of Agreement. This Lease, including all of the Exhibits
attached hereto, contains the complete agreement of the parties regarding the terms
and conditions of the lease of the Demised Premises and Tenant's right to use the
Common Areas, and there are no oral or written conditions, terms, understandings
or other agreements pertaining thereto which have not been incorporated herein.
This instrument creates only the relationship of Landlord and Tenant between the
parties hereto as to the Demised Premises; and nothing herein shall in any way be
construed to impose upon either party hereto any obligations or restrictions not
herein expressly set forth. The laws of the State of North Carolina shall govern
the validity, interpretation, performance and enforcement of this Lease.
34. Binding Effect. This Lease shall be binding upon and shall inure to the
benefit of the parties hereto and their respective permitted successors and assigns.
35. Restrictive Covenant. Landlord hereby covenants, provided this restriction
does not violate any law, regulation, or other legal requirement, that until the
earlier of (i) the date of expiration or earlier termination of this Lease, or (ii)
the date Tenant ceases to operate a discount variety store in the Demised Premises,
it shall not lease any portion of the Shopping Center, not including the space occupied
by the Major Stores (as defined in Paragraph 37), to any entity primarily for the
purpose of the retail sale of books, perfumes or other fragrances, bed and bath
bedding, linens and towels, cigars or cigarettes. Notwithstanding the foregoing,
this restriction shall not apply to existing tenants in the Shopping Center and
Landlord shall have the right to lease a
27
portion of the Shopping Center to any entity engaged in the "incidental" sale of
books, perfume or other fragrances, bed and bath bedding, linens and towels, cigars
or cigarettes. For the purposes of this Paragraph 35, the "incidental" sale of perfumes
or other fragrances, bed and bath bedding, linens and towels, cigars or cigarettes
shall mean a use that occupies less than twenty-five (25) square feet of Floor Area
and the "incidental" sale of books shall mean a use that occupies less than one
hundred (100) square feet of Floor Area (including aisles). Tenant shall indemnify,
hold harmless and defend Landlord from any demands, claims, losses, costs and liabilities
arising out of this Paragraph 35.
36. Right of First-Refusal. If Tenant is not and has not been in default under
this Lease and Landlord intends to make an offer to lease space outlined in yellow
on Exhibit A to a third party, Landlord shall first give Tenant written notice of
the square footage, availability date and terms of the offer Landlord intends to
make. Tenant shall have ten (10) business days after receipt of any such notice
to elect to lease all such space on the terms offered. If Tenant rejects any such
offer, or fails to respond to any such offer within said period, Landlord shall
be free to lease the offered space to a third party and Landlord shall have no er
obligations under this Paragraph 36. If Tenant accepts any such offer, the space
offered shall be added to the Demised Premises at the rental set forth in Landlord's
offer on the same terms and conditions set forth in Landlord's offer. In the event
Tenant leases such space, Tenant's obligation to pay Guaranteed Minimum Rent on
such space shall commence upon delivery of said space to Tenant. If Tenant rejects
or fails to respond to any such offer within the required period, this Paragraph
36 shall be of no further effect and Landlord shall have no further obligations
hereunder.
37. Operating Cotenancy. If both of the Major Stores (as hereinafter defined)
remain vacant for a period in excess of eighteen (18) months (exclusive of periods
when the occupants are unable to operate as a result of a casualty or condemnation)
(the "Vacancy Period") and Tenant's Gross Sales (as hereinafter defined) from the
Demised Premises during such Vacancy Period are at least ten percent (10%) less
than Tenant's Gross Sales during the eighteen (18) month period immediately prior
to such Vacancy Period, Tenant may terminate this Lease by delivery of written notice
to Landlord within sixty (60) days following the expiration of the Vacancy Period.
Tenant's notice shall specify an effective date of termination, not less than thirty
(30) nor more than ninety (90) days from the date of the notice, and on the specified
date, this Lease shall terminate automatically, except as to defaults arising prior
to the date of termination. As used herein, the term "Major Stores" means those
two store premises in the Shopping Center currently occupied by Harris Teeter and
Eckerd.
As used herein, the term "Gross Sales" means all sales, both cash and charge,
of merchandise and services made in, upon or from the Demised Premises, including
telephone sales and orders taken in or from the Demised Premises although such orders
may be filled elsewhere. "Gross Sales" shall not include any sales, use or excise
tax upon such merchandise or services if such tax is separately stated and separately
charged to the customer. A sale upon installment or credit shall be treated as a
sale for the amount of the purchase price paid in any month during which such payment
is made. Tenant shall keep at the Demised Premises or at its general office complete
and accurate books of account and records in accordance with generally accepted
accounting practices with
28
respect to all business conducted in, upon or from the Demised Premises; and in
the event Tenant exercises its right to terminate this Lease pursuant to this Paragraph
37, Landlord shall have the right upon ten (10) days' notice to Tenant to examine
such books and records (but excluding all income tax returns and bank records) or
have them audited at Landlord's expense.
38. Hazardous Materials.
(a) Landlord hereby represents and warrants that except as provided in the
Phase I Environmental Site Assessment dated July 1, 1993, to the best of Landlord's
knowledge no material amounts of any Hazardous Materials (as hereinafter defined)
are located in the Shopping Center in violation of applicable Environmental Laws
(as hereinafter defined). Landlord hereby represents and warrants that it shall
not use, generate, treat, store, release, discharge or dispose of on, in, or under
the Shopping Center, or transport to or from the Shopping Center, any Hazardous
Material. Notwithstanding the foregoing, Landlord may use and store Hazardous Materials
on the Shopping Center to the extent necessary in the operation of its Shopping
Center, but only in strict accordance with all applicable Environmental Laws and
in accordance with all safety and environmental protection procedures. Landlord
agrees to defend, indemnify and hold harmless Tenant, its successors and assigns
from and against any and all liabilities, losses, damages, costs, expenses (including,
without limitation, reasonable attorneys' fees and expenses) causes of action, suits,
claims, demands or judgements of any nature arising out of or in connection with
(i) the presence, generation, treatment, storage, disposal, transport, use or release
of any Hazardous Material on or from the Shopping Center, except to the extent that
such Hazardous Materials are present as the result of the negligence, wilful misconduct
or any act or omission of Tenant, its officers, employees or agents, (ii) any failure
by Landlord to comply with the terms of any Environmental Law or (iii) any breach
by Landlord of the provisions of this Paragraph 38. Landlord's indemnification obligation
under this Paragraph 38 shall survive the expiration or earlier termination of this
Lease.
(b) The making and continued effectiveness of Tenant's obligations under this
Lease are expressly conditioned upon the fact that the Shopping Center is free of
contamination by material amounts of Hazardous Materials in violation of applicable
Environmental Law and Landlord hereby so warrants and represents to Tenant. The
discovery of contamination by Hazardous Materials in violation of applicable Environmental
Law, however caused, unless caused by Tenant in violation of its obligations under
this Paragraph 38, shall constitute the failure of this condition. In the event
of such discovery, Tenant may, but shall not be required to, conduct reasonable
investigation of the extent and nature of the contamination, its physical effects,
its effects on Tenant's business or any other aspects of the response to contamination,
before notifying the Landlord of Tenant's intent to terminate this Lease for failure
of the above stated condition. Such investigation and the resultant delay in notification
to Landlord shall not be considered a waiver of this condition.
(c) Landlord agrees that if because of any change in the law the floor tile
in the Demised Premises must be removed due to the asbestos content in the mastic,
Landlord, at its cost and expense, shall cause all such floor tile to be removed;
provided, however, that Landlord shall not be
29
responsible for the removal of any such floor tile that must be removed due to
the actions or omissions of Tenant.
(d) Tenant hereby represents and warrants that it shall not use, generate,
treat, store, release, discharge or dispose of on, in, or under the Demised Premises,
or transport to or from the Demised Premises, any Hazardous Material, or allow any
other person or entity to do so. Notwithstanding the foregoing, Tenant may use and
store Hazardous Materials on the Demised Premises to the extent necessary in the
operation of its variety store, but only in strict accordance with all applicable
Environmental Laws and in accordance with all safety and environmental protection
procedures. Tenant agrees to defend, indemnify and hold harmless Landlord, its successors
and assigns from and against any and all liabilities, losses, damages, costs, expenses
(including, without limitation, reasonable attorneys' fees and expenses) causes
of action, suits, claims, demands or judgements of any nature arising out of or
in connection with (i) the presence, generation, treatment, storage, disposal, transport,
use or release of any Hazardous Material on or from the Demised Premises or from
any property of Tenant located on or in the Shopping Center, except to the extent
that such Hazardous Materials are present as the result of the negligence, wilful
misconduct or any act or omission of Landlord, its officers, employees or agents,
(ii) any failure by Tenant to comply with the terms of any Environmental Law or
(iii) any breach by Tenant of the provisions of this Paragraph 38. Tenant's indemnification
obligation under this Paragraph 38 shall survive the expiration or earlier termination
of this Lease.
(e) Landlord and Tenant each agree to provide the other with copies of any
notice pertaining to any violation or alleged violation of any Environmental Law
with respect to the Shopping Center or the Demised Premises, any release or suspected
release of any Hazardous Material in, on, under or about the Demised Premises or
the Shopping Center or any governmental proceedings or actions under any Environmental
Law (including request or demand for entry onto the Demised Premises and/or Shopping
Center for purposes of inspection regarding the handling, disposal or clean-up of
Hazardous Materials) within ten (10) business days after receipt thereof. Landlord
and Tenant shall fully comply with all applicable Environmental Laws, shall timely
file all reports required to be filed, shall acquire all necessary certificates,
approvals and permits and will generate and maintain all required data and records
under all applicable Environmental Laws. Landlord and Tenant agree to cooperate
with each other and provide such documents, affidavits and information as may be
reasonably necessary for each of the parties to comply with all Environmental Laws.
(f) As used herein, "Environmental Law" shall mean any federal, state or local
law, statute, ordinance, rule, regulation, permit, directive, license, approval,
guidance, interpretation, order, or other legal requirement relating to the protection
of human health or the environment, including, but not limited to, any requirement
pertaining to the manufacture, processing, distribution, use, treatment, storage,
disposal, transportation, handling, reporting, licensing, permitting, investigation
or remediation of materials that are or may constitute a threat to the environment.
Without limiting the foregoing, each of the following is an Environmental Law: the
Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C.
ss. 9601 et seq.) ("CERCLA"),
30
the Hazardous Material Transportation Act (49 U.S.C. ss. 1801 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. ss. 6901 et seq.) ("RCRA"), the Federal
Water Pollution Control Act (33 U.S.C. ss. 1251 et seq.), the Clean Air Act (42
U.S.C. ss. 7401 et seq.), the Toxic Substances Control Act (15 U.S.C. ss. 2601 et
seq.), the Safe Drinking Water Act (42 U.S.C. ss. 300, et seq.), the Environmental
Protection Agency's regulations relating to underground storage tanks (40 C.F.R.
Parts 280 and 281), and the Occupational Safety and Health Act (29 U.S.C. ss. 651
et seq.) ("OSHA"), as such laws and regulations have been amended or supplemented,
and each similar state or local statute, and each rule and regulation promulgated
under such federal, state and local laws. As used herein, "Hazardous Material" means
any substance or material that is (i) a petroleum product, (ii) is defined as a
hazardous waste, hazardous substance, pollutant, contaminant or toxic substance
under any Environmental Law, or (iii) is otherwise toxic, explosive, corrosive,
flammable, mutagenic, carcinogenic, dangerous or otherwise hazardous.
39. Consent. Where the consent of Landlord or Tenant is required under the
Lease, such consent shall not be unreasonably withheld. In the event either party
fails to respond to a written request for consent within thirty (30) days of receipt
of such request, such party shall be deemed to have consented to such request.
40. Attorneys' Fees. In the event of any dispute between the parties hereto
arising out of or in connection with this Lease, the prevailing party shall be entitled
to recover from the other its reasonable attorneys' fees incurred in connection
therewith.
41. Waiver of Distraint. Landlord hereby expressly subordinates in favor of
Tenant's equipment lessor or owner/secured party any and all rights granted by or
under any present or future laws to levy to distrain for rent, in arrears, in advance
or both, upon any pylon signs, other signs, movable trade fixtures, equipment, furniture
or other personal property installed by Tenant, leased or financed by Tenant from
the equipment lessor or owner/secured party and delivered or to be delivered to
the Demised Premises.
31
IN WITNESS WHEREOF, the parties hereto have executed this Lease Agreement
under seal as of the day and year first above written.
LANDLORD:
INTERSTATE DEVELOPMENT COMPANY
[CORPORATE SEAL]
Attest: By: /s/ Robert A. Collier, Jr.
-------------------------------------
President
/s/ James B. Collier
--------------------------------
Secretary
TENANT:
JR TOBACCO OF AMERICA, INC.
[CORPORATE SEAL]
Atest: By: /s/ Lewis Rothman
-------------------------------------
President
/s/ LaVonda Rothman
--------------------------------
Secretary
32
EXHIBIT A
SITE PLAN
EXHIBIT B
LEGAL DESCRIPTION
Lying and being in Statesville (Inside) Township, Iredell County, North Carolina,
and more particularly described as follows:
BEGINNING at an iron stake in the north margin of the right
of way of East Broad Street where it intersects with the
west margin of the entrance-exit to Newtowne Plaza Shopping
Center, and said iron stake being in the line of Corco
Realty Corp. (See Deed Book 618, page 48), and running
thence North 07 deg. 21 min. East 205.95 feet to an iron
stake, corner of C. H. Kutteh, II, et al. (See Deed Book
684, page 782); thence North 79 deg. 30 min. West 350.66
feet to an iron stake in the east margin of the right of way
of I-77; thence with the east margin of the right of way of
I-77, North 07 deg. 21 min. 50 sec. East 1,206.70 feet to an
iron stake in the east margin of the right of way of I-77;
thence South 87 deg. 32 min. 32 sec. East 860.57 feet to a
concrete monument; thence South 09 deg. 49 min. 34 sec. West
657.58 feet to a concrete monument; thence South 04 deg. 11
min. 25 sec. West 869.37 feet to a concrete monument in the
north margin of the right of way of East Broad Street;
thence South 04 deg. 11 min. 25 sec. West 10.04 feet to a
nail in East Broad Street; thence with East Broad Street,
North 80 deg. 56 min. 53 sec. West 527.90 feet to a nail in
East Broad Street; thence North 07 deg. 21 min. East 14.05
feet to the point of BEGINNING, containing 27.1341 acres,
more or less, and being described according to a plat and
survey prepared by Wesley E. Sprinkle, Registered Surveyor,
dated November 7, 1984.
EXHIBIT C
STATE OF NORTH CAROLINA
MEMORANDUM OF LEASE
COUNTY OF IREDELL
INTERSTATE DEVELOPMENT COMPANY, a North Carolina corporation with an address
at Post Office Box 366, Statesville, North Carolina 28677-0366 (hereinafter called
"Landlord"), hereby leases to JR TOBACCO OF AMERICA, INC., a New Jersey corporation
with an address at Post Office Box 656, Selma, North Carolina 27576-0656, (hereinafter
called "Tenant") and Tenant hereby rents from Landlord for a period of eleven (11)
lease years beginning July 19, 1993, and ending December 31, 2004, with a ten (10)
year renewal period, store premises in Newtowne Plaza Shopping Center, located on
property situated in the City of Statesville, County of Iredell, State of North
Carolina, and more particularly described on Exhibit A attached hereto and made
a part hereof by reference.
All of the provisions set forth in that certain Lease Agreement dated July
19, 1993, by and between Landlord and Tenant are hereby incorporated into and made
a part of this Memorandum.
IN WITNESS WHEREOF, the parties hereto have executed this Memorandum of Lease
under seal this 19th day of July, 1993.
LANDLORD:
INTERSTATE DEVELOPMENT COMPANY
[CORPORATE SEAL]
Attest: By: /s/ Robert A. Collier, Jr.
------------------------------------
President
/s/ James B. Collier
----------------------------------
Secretary
TENANT:
JR TOBACCO OF AMERICA, INC.
[CORPORATE SEAL]
Attest: By: /s/ Lewis Rothman
------------------------------------
President
/s/ LaVonda Rothman
----------------------------------
Secretary
STATE OF NORTH CAROLINA
COUNTY OF IREDELL
This 19th day of July, 1993, personally came before me Robert H. Collier, who,
being by me duly sworn, says that he is the President of INTERSTATE DEVELOPMENT
COMPANY and that the seal affixed to the foregoing instrument in writing is the
corporate seal of the company, and that the said writing was signed and sealed by
him, in behalf of said corporation, by its authority duly given. And the said Robert
H. Collier, Jr., President, acknowledged the said writing to be the act and deed
of said corporation.
/s/ Joanna W. Sears
------------------------------------
Notary Public
My commission expires:
5-18-98
---------------------
[NOTARIAL SEAL]
STATE OF NEW JERSEY
COUNTY OF ESSEX
This 16th day of July, 1993, personally came before me Lewis Rothman, who,
being by me duly sworn, says that he is the President of JR TOBACCO OF AMERICA,
INC. and that the seal affixed to the foregoing instrument in writing is the corporate
seal of the company, and that the said writing was signed and sealed by him, in
behalf of said corporation, by its authority duly given. And the said Secretary
acknowledged the said writing to be the act and deed of said corporation.
/s/ Patricia L. Smith
------------------------------------
Notary Public
My commission expires:
May 22, 1994
--------------------
[NOTARIAL SEAL]
STATE OF NORTH CAROLINA
COUNTY OF IREDELL
This 19th day of July, 1993, personally came before me Robert H. Collier, who,
being by me duly sworn, says that he is the President of INTERSTATE DEVELOPMENT
COMPANY and that the seal affixed to the foregoing instrument in writing is the
corporate seal of the company, and that the said writing was signed and sealed by
him, in behalf of said corporation, by its authority duly given. And the said Robert
H. Collier, Jr., President, acknowledged the said writing to be the act and deed
of said corporation.
/s/ Joanna W. Sears
------------------------------------
Notary Public
My commission expires:
May 18, 1998
---------------------
[NOTARIAL SEAL]
STATE OF NEW JERSEY
COUNTY OF ESSEX
This 16th day of July, 1993, personally came before me Lewis Rothman, who,
being by me duly sworn, says that he is the President of JR TOBACCO OF AMERICA,
INC. and that the seal affixed to the foregoing instrument in writing is the corporate
seal of the company, and that the said writing was signed and sealed by him, in
behalf of said corporation, by its authority duly given. And the said Secretary
acknowledged the said writing to be the act and deed of said corporation.
/s/ Patricia L. Smith
------------------------------------
Notary Public
My commission expires:
May 22, 1994
---------------------
[NOTARIAL SEAL]
EXHIBIT D
PROHIBITED USES
1. Bowling alley; 2. Skating rink; 3. Massage parlor; 4. Amusement park;
5. Carnival; 6. Billiard parlor or pool hall; 7. Video or other game parlor;
8. Health spa; 9. Funeral parlor; 10. Off-track betting facility; 11. Flea
market; 12. Car wash; 13. Any establishment for the sale and/or repair of new
or used automobiles,
boats, trailers or mobile homes; 14. Any establishment selling or displaying
pornographic materials; 15. Cafeteria or restaurant; 16. Movie theater; 17. Toy
store; 18. Office supply and equipment store; 19. Hotel or motel; 20. Supermarket
or grocery store; 21. Prescription drug store; or 22. Discount health and beauty
aid store.
EXHIBIT E
PUNCH LIST
1. Replace both roof-top air cooled condensers and air handlers with new
units;
2. Replace administrative area roof-top gas-fired air conditioner with new
unit;
3. Replace toilet exhaust fan and lounge exhaust fan;
4. Check and make repairs necessary to bring electrical system up to code
requirements including checking panels to insure that connections are tight
and circuit breakers are functional, determining what each breaker feeds
and labeling the panels correctly;
5. Check and make repairs necessary to bring plumbing system up to code
requirements including checking each fixture for proper operation and
checking the faucets, flush valves, sanitary waste piping and vent lines;
6. Install two (2) new bathrooms containing one toilet each which bathrooms
shall comply with the requirements of the ADA;
7. Remove the incinerator located behind the Demised Premises; and
8. Replace any ballasts that are not working, provided however that Tenant
agrees to reimburse Landlord for one-half the cost of any such ballasts
within fifteen (15) days of its receipt from Landlord of an invoice
evidencing the cost of such ballasts.
EXHIBIT F
SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT
THIS AGREEMENT is made this ____ day of ____________, 1993 between JR TOBACCO
OF AMERICA, INC., a New Jersey corporation (hereinafter referred to as "Lessee")
and WACHOVIA BANK OF NORTH CAROLINA, N.A. (hereinafter referred to as "Mortgagee").
WHEREAS:
1. Mortgagee is now the owner and holder of a first Deed of Trust, dated August
25, 1986 in the principal amount of Two Million Nine Hundred Fifty Thousand and
No/100 Dollars ($2,950,000.00) (hereinafter referred to as the "Mortgage") on the
real estate more particularly described in the Mortgage. The Mortgage is recorded
in the Office of the Register of Deeds of Iredell County, State of North Carolina.
2. Lessee is the holder of a lease (hereinafter referred to as the "Lease"),
dated ___________ between Interstate Development Company (hereinafter referred to
as "Lessor"), as Lessor, and J.R. Tobacco of America, Inc., as Lessee.
3. Lessee and Mortgagee desire to confirm their understanding with respect
to the Lease and the Mortgage.
NOW, THEREFORE, in consideration of mutual covenants and agreements herein
contained, Mortgagee and Lessee hereby agree and covenant as follows:
FIRST: The Lease shall be subject and subordinate to the Mortgage and to all
renewals, modifications or extensions thereof.
SECOND: So long as Lessee is not in default (beyond any period given Lessee
to cure such default) in the payment of rent or additional rent or in the performance
of any of the terms, covenants or conditions of the Lease on Lessee's part to be
performed, Lessee's possession of the premises described in the Lease and Lessee's
rights and privileges under the Lease, or any extensions or renewals thereof which
may be effected in accordance with any option therefor in the Lease, shall not be
diminished or interfered with by Mortgagee and Lessee's occupancy of said premises
shall not be disturbed by Mortgagee for any reason whatsoever during the term of
the lease or any extensions or renewals thereof.
THIRD: If the interests of Lessor shall be transferred to and owned by Mortgagee
by reason of foreclosure or other proceedings brought by it or by any other manner,
and Mortgagee succeeds to the interest of the Lessor under the Lease, Lessee shall
be bound to Mortgagee under all of the terms, covenants and conditions of the Lease
for the balance of the term thereof remaining and
any extensions or renewals thereof which may be effected in accordance with any
option thereof in the Lease, with the same force and effect as if Mortgagee were
the Lessor under the Lease, and Lessee does hereby attorn to Mortgagee as its Lessor,
said attornment to be effective and self-operative without the execution of any
further instruments on the part of either of the parties hereto immediately upon
Mortgagee succeeding to the interest of the Lessor under the Lease; provided, however,
that Lessee shall be under no obligation to pay rent to Mortgagee, as Lessor, pursuant
to this Agreement until Lessee receives written notice from Mortgagee that it has
succeeded to the interest of Lessor under the Lease. The respective rights and obligations
of Lessee and Mortgagee upon said attornment, to the extent of the then remaining
balance of the term of the Lease and any such extensions and renewals, shall be
and are the same as now set forth therein; it being the intention of the parties
hereto for this purpose to incorporate the Lease in this Agreement by reference
with the same force and effect as if set forth at length herein.
FOURTH: Lessee certifies that the Lease is presently in full force and effect;
that no rent under the Lease has been paid more than thirty (30) days in advance
of its due date, and that Lessee, as of this date, has no charge, lien or claim
of offset under the Lease, or otherwise, against the rents or other amounts due
or to become due thereunder.
FIFTH: If Mortgagee shall succeed to the interest of Lessor under the Lease,
Mortgagee shall be bound to Lessee under all terms, covenants and conditions of
the Lease, and Lessee shall, from and after Mortgagee's succession to the interest
of Lessor under the Lease, have the same remedies against Mortgagee for the breach
of an agreement contained in the Lease that Lessee might have had under the Lease
against Lessor if Mortgagee had not succeeded to the interest of Lessor; provided
further, however, that Mortgagee shall not be:
(a) liable for any act or omission of any prior landlord (including
the Lessor); or
(b) subject to any offsets or defenses which the Lessee might have
against any prior landlord (including the Lessor); or
(c) liable for the return of any security deposits not delivered to
Mortgagee; or
(d) bound by any rent or additional rent which Lessee might have paid
for more than the current month to any prior landlord (including Lessor);
or
(e) bound by any amendment or modification of the Lease made without
Mortgagee's consent; or
(f) obligated to construct or finish the construction of the premises
described in the Lease, unless it expressly assumes such obligation after
it succeeds to the interest of the Lessor under the Lease.
SIXTH: The Lease now is, and shall at all times continue to be, subject and
subordinate, in each and every respect, to the Mortgagee and to any and all renewals,
modifications and extensions thereof, but any and all such renewals, modifications
and extensions shall nevertheless be subject to and entitled to the benefits of
the terms of this Agreement.
SEVENTH: Lessee shall not be named or joined as a party defendant or otherwise
in any suit, action or proceeding for the foreclosure of the Mortgage or to enforce
any rights under the Mortgage or the bond or note or other obligation secured thereby.
EIGHTH: Mortgagee hereby acknowledges and agrees that all fixtures and equipment
whether owned by Lessee or any subtenant or leased by Lessee from a lessor/owner
(hereinafter called the "Equipment Lessor") installed in or on the leased premises,
regardless of the manner or mode of attachment, shall be and remain the property
of Lessee or any such Equipment Lessor and may be removed by Lessee or any such
Equipment Lessor at any time. In no event (including a default under the Lease or
the Mortgage) shall Mortgagee have any liens, right or claims in Lessee's or Equipment
Lessor's fixtures and equipment, whether or not all or any part thereof shall be
deemed fixtures; and Mortgagee expressly waives all rights of levy, distraint, or
execution with respect to said fixtures and equipment. Mortgagee agrees to execute
and deliver to Tenant and Equipment Lessor, within fifteen (15) business days after
request therefor, any document required by Tenant or Equipment Lessor to evidence
the foregoing.
NINTH: Lessee will notify Mortgagee, by registered or certified mail, return
receipt requested, of any default of Lessor which would entitle Lessee to cancel
the Lease or abate the rent payable thereunder, and agrees that notwithstanding
any provision of the Lease, no notice of cancellation thereof, nor any abatement
shall be effective unless Mortgagee has received the notice aforesaid and has failed
within 30 days of the date thereof to cure or if the default cannot be cured within
30 days has failed to commence and to diligently prosecute the cure of Landlord's
default which gave rise to such right of cancellation or abatement.
TENTH: This Agreement may not be modified orally or in any other manner than
by an agreement in writing signed by the parties hereto.
ELEVENTH: This Agreement may be recorded by either party.
IN WITNESS WHEREOF, the parties hereto have hereunto caused this Agreement
to be duly executed as of the day and year first above written.
MORTGAGEE:
WACHOVIA BANK OF NORTH CAROLINA, N.A.
[CORPORATE SEAL]
Attest: By:____________________________________
__________, President
_________________________________ _________ Secretary
TENANT:
JR TOBACCO OF AMERICA, INC.
[CORPORATE SEAL]
By: /s/ Lewis Rothman
------------------------------------ Attest:
__________, President
/s/ LaVonda Rothman
---------------------------------- _________ Secretary
EXHIBIT H
PERMITTED ENCUMBRANCES
1. Easement and right-of-way to Duke Power Company, recorded in Book 296, Page
49, as shown on survey by Sprinkle Surveying, dated November 7, 1984.
2. Easements and rights-of-way to Public Service Company of N.C., recorded in
Book 369, Page 316; Book 395, Page 482 and Book 688, Page 653, and as shown
on the aforesaid survey.
3. Easements and rights-of-way to State Highway Commission, recorded in Book
376, Page 405 and Book 544, Page 102, and as shown on the aforesaid survey.
4. Easements and rights-of-way to Corco Realty Corp., recorded in Book 618,
Page 51 and Book 637, Page 259, and as shown on the aforesaid survey.
5. Sanitary sewer easement and right-of-way to the City of Statesville,
recorded in Book 688, Page 850, amended in Book 719, Page 77, and as shown
on the aforesaid survey.
6. Easement and right-of-way to C.H. Kutteh, II, et al, recorded in Book 706,
Page 544, and as shown on the aforesaid survey.
7. Cross parking and common use easement, recorded in Book 640, Page 107, and
as shown on the aforesaid survey.
8. Rights of tenants in possession, holding under recorded and unrecorded
leases.
9. Rights of upper and lower riparian owners in and to the use of the waters
of the creek crossing premises and the natural flow thereof.
10. Utility lines crossing premises, as shown on the aforesaid survey.
11. Encroachment of barbed wire fence onto premises, as shown on the aforesaid
survey.
12. Deed of Trust to Edward L. Marxen, Trustee for Wachovia Bank & Trust
Company, recorded in Book 602, Page 997, as amended by the Modification and
Extension Agreements recorded in Book 678, Page 777; Book 785, Page 371 and
Book 884, Page 377.
EXHIBIT I
APPROVED SIGNAGE
STATE OF NORTH CAROLINA FIRST AMENDMENT TO LEASE
COUNTY OF IREDELL
THIS FIRST AMENDMENT TO LEASE ("Amendment") is made and entered into as of
the 2nd day of November, 1993, by and between INTERSTATE DEVELOPMENT COMPANY, a
North Carolina corporation (the "Landlord"); and JR TOBACCO OF AMERICA, INC., a
New Jersey corporation (the "Tenant").
RECITALS
A. Landlord and Tenant entered into a Lease Agreement (the "Lease") dated
July 19, 1993, pursuant to which Landlord leased to Tenant certain premises located
in Newtowne Plaza Shopping Center, Statesville, Iredell County, North Carolina on
the terms and conditions therein set forth.
B. Landlord and Tenant desire to amend the Lease, as more fully set forth
below.
STATEMENT OF AGREEMENT
NOW THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord
and Tenant agree that the Lease is hereby amended in the following respects:
1. Defined Terms. Any capitalized term used in this Amendment that is not
defined herein shall have the meaning given that term in the Lease.
2. Term. Paragraph 3 on page 4 of the Lease is hereby deleted in its entirety
and the following is hereby substituted in its place:
3. Term. The Lease Term shall begin on the date of delivery of the Demised
Premises, as provided in Paragraph 5, and shall end at midnight on December 31,
2004, the date of expiration of the eleventh (11th) Lease Year after the Rent Commencement
Date.
At the end of the Lease Term provided Tenant is not in default beyond
the expiration of any applicable cure period, Tenant shall have the option
to renew and extend the Lease Term for one (1) period of ten (10) years
("Renewal Period"), upon the same terms and conditions set forth in this
Lease, including Guaranteed Minimum Rent as set forth in Paragraph 1(e).
Tenant shall exercise each renewal option by written notice to Landlord
given on or before twelve (12) months before the expiration of the original
Lease Term. All references to the "Lease Term" or the "Term of this Lease"
shall, unless the context clearly indicates a different meaning, be deemed
to include any properly exercised Renewal Period.
4. Ratification. Except as expressly amended herein, the Lease is hereby ratified
by the parties and shall continue in full force and effect in accordance with its
terms.
5. Governing Law. This Amendment is entered into under the laws of the State
of North Carolina, and those laws shall govern the construction and enforcement
hereof.
6. Authorization. The persons executing this Amendment on behalf of Landlord
and Tenant are duly authorized to execute this Amendment, and no consent of any
other person to execution of this Amendment is required.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment under
seal as of the day and year first above written.
LANDLORD
INTERSTATE DEVELOPMENT COMPANY
[CORPORATE SEAL]
Attest: By: /s/ Robert A. Collier, Jr.
------------------------------------
President
/s/ James B. Collier
----------------------------------
Secretary
TENANT
JR TOBACCO OF AMERICA, INC.
[CORPORATE SEAL]
Attest: By: /s/ Lewis Rothman
------------------------------------
President
/s/ LaVonda Rothman
-----------------------------------
Secretary
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