EXHIBIT 10.36
COMMERCIAL LEASE AGREEMENT
(adapted from Cherlotte Region Commercial
Board of Realtors Standard form)
THIS LEASE, made this 1st day of July, 2002, by and between NCSC Properties LLO,
a North Carolina Limited Liability Company ("Landlord"); and Huck Store Fixture
Company of North Carolina, a North Carolina corporation and wholly owned
subsidiary of Source-Huck Store Fixture Company which is a wholly owned
subsidiary of Source interlink Companies, Inc. (formerly The Source Information
Management Company) ("Tenant"):
WITNESSETH:
PREMISES
1. Landlord, for and in consideration of the rents, covenants, agreements,
and stipulations hereinafter mentioned provided for and covenanted to be paid,
kept and performed by Tenant, lesses and rents unto Tenant, and Tenant hereby
lesses and takes upon the terms and conditions which hereinafter appear, the
following described real property, together with all improvements located or to
be located thereon and any and all fixtures rights, privileges, easements and
appurtenances belonging to or in any way pertaining to the aforesaid real
property (hereinafter collectively called the "Premises"), to wit.
Approximately 19 acres of land legally described on Exhibit LA ("Land")
together with a 120,000 square-foot building ("Building") and commonly known as
00 Xxx Xxxxxxxxx Xxxx, Xxxxxxxxxx XX 00000.
TERM
2. The Tenant shall have, hold and quietly possess the Premises for a term
(the "Term") commencing on the date on which the last signature is affixed to
this Lease ("Lease Commencement") and ending at midnight of the day prior to the
fourth anniversary of the Lease Commencement, Unless sooner terminated or
extended as hereinafter provided (such period, the "Initial Lease Term" and such
ending date, as the same may be so extended or terminated, the "Expiration
Date").
The term of this Lease shall be automatically extended without further action by
either party to this Lease on the fourth anniversary of the Lease Commencement
for an additional period of five years unless Tenant shall have delivered to
Landlord at least sixty (60) days prior to the Exploration Date of the Initial
Lease Term a written notice of its intention not to so extend the term of this
Lease (the "Initial Term Notice"). If the Initial Term Notice is given as
herein provided, this Lease shall terminate on the then scheduled Expiration
Date and shall be of no further force and effect.
If the Initial Term Notice is not delivered, the term of this Lease also shall
be automatically extended without further action by either party to this Lease
on this ninth anniversary of the Lease Commencement for an additional period of
five years unless Tenant shall have delivered to Landlord at least sixty (60)
days prior to the Expiration Date of the Initial Lease Term a written notice of
its Intention not to so extend the term of this Lease (the "Second Term
Notice"). If the Second Term Notice is given as herein provided, this Lease
shall terminate on the then scheduled Expiration Date and shall be of no further
force and effect.
RENTAL
3. Tenant agrees to pay Landlord or its Agent, without demand, deduction
or set off, an annual sum of One Hundred Eighty Thousand Dollar ($180,000) as
rent (the "Rent") for the possession of the Premises during the period beginning
on the Commencement Date and ending on the first scheduled Expiration Date.
Such Rent shall be payable in advance in equal monthly installments of Fifteen
Thousand Dollars ($15,000) commencing on Lease Commencement and the same day of
each month thereafter during the Term. For example, If the Lease Commencement is
July 12, 2002. Subsequent monthly payments are due the 12th of each month.
Commencing on the fourth anniversary of the Lease Commencement and thereafter on
each successive anniversary of the Lease Commencement, the Rent shall be
adjusted and shall thereafter be equal to an annual sum equal to $180,000 times
a fraction the numerator of which is the Consumer Price Index, Urban Wage
Earners and Clerical Works, All Cities (CPI-W, 1982-1984=100) ("Index") as
determined for March of the year in which the adjustment is to be made and the
denominator is the Index as determined for June of 2002. The Landlord shall send
to the Tenant a statement computing the amount of the adjusted Rent. Thereupon,
Tenant shall pay the adjusted amount of Rent in twelve (12) equal monthly
installments commencing on the anniversary of the Lease Commencement following
such adjustment and on the same day of the succeeding eleven (11) months in the
same manner as during the Term. In the event the Index ceases to be published, a
comparable regularly published statistics of the purchasing power of the
consumer dollar selected by the Landlord shall be used. All Rents under this
paragraph are exclusive of changes for utilities, Insurance, property taxes, and
other expenses as described in other parts of this agreement. Tenant shall make
Rent payments and shall pay all other sums due from Tenant to Landlord herein
electronically to the following account:
ABA Routing Number 000000000(Mercantile Bank-Quincy)
Account Number 136948 (NCSC Properties LLC)
Landlord may change this account from time-to-time with a 10 day advance written
notice prior to Tenant making effective.
LATE CHARGES
4. If Landlord fails to receive any Rent payment within ten (10) business
days after it becomes due and payable, Tenant shall pay Landlord, as additional
rental, a late charge equal to Five Hundred Dollars ($500). The parties agree
that
such a late charge represents a fair and reasonable estimate of the cost
Landlord will incur by reason of such late payment. Additionally, Tenant shall
pay one and one-half percent (1.5%) per month (18% annually) for the period of
time amounts due after the aforesaid grace period, including unpaid late charges
and interest, remain unpaid.
SECURITY DEPOSIT
6. Tenant shall deposit with Landlord or its Agent upon execution of the
Lease $10,000 as a security deposit which shall be held as security for the full
and faithful performance by Tenant of each and every term, convenient and
condition of this Lease. If any of the Rents or other charges or sums payable by
Tenant shall be overdue and unpaid or should Landlord make payments on behalf of
Tenant, or should Tenant fall to perform any of the terms of this Lease (In each
case after exploration of the applicable cure period), then Landlord or its
Agent may, at its option, appropriate and apply the security deposal, or so
much thereof as may be necessary, to compensate toward the payment of the Rents,
changes of other sums due from Tenant, or towards any loss, damage or expires
sustained by Landlord resulting form such default on the part of the Tenant, and
in such event Tenant shall upon demand restore the security deposit to the
original sum deposited. In the event Tenant furnishes Landlord with proof that
all utility bills have been paid through the Exploration Date, and performs all
of Tenant's other obligations under this Lease, the security deposit shall be
returned in full to Tenant within thirty (30) days after the date of the
expiration or sooner termination of the term of this Lease and the surrender of
the Premises by Tenant in compliance with the provisions of this Lease.
UTILITY BILLS
7. Tenant shall pay all utilities on the Building. Responsibility to pay
for a utility service shall include all metering, hook-up fees or other
miscellaneous charges associated with the installation and maintenance of such
utility in said party's name.
USE OF PREMISES
8. The Premises shall be used for manufacture of wood or metal store
futures only and for no other purposes. The Premises shall not be used for any
illegal purposes, nor in any manner to create any nuisance or trespass, nor in
any manner to vitiate the insurance or increase the rate of insurance on the
Premises, nor in any way in violation of the Deed of Trust of Promissory Note
which are attached as Exhibits LB and LC, respectively.
PROPERTY TAX
9. Landlord will Invoice Tenant and Tenant shall pay within 10 days of
receipt thereof, property taxes (including but not limited to, ad valorem
taxes, special assessments and any other governmental charges) for the Building
attributable to the duration of Term of this Commercial Lease Agreement. Tenant
shall be responsible for one-half of the property taxes relative to the real
property and all property taxes relative to personal property, including, but
not limited to, Inventory, machinery and vehicles. Landlord shall pay for
one-half of the property taxes relative to only real estate. If the final year
of the Lease term talks to concide with the tax year, then any excess for the
tax year during which the term ends shall be reduced by the pro rate part of
such tax year beyond the Lease term. If such taxes for the year in which the
Lease terminates are not ascertainable before payment of the last month's
rental, then the amount of such taxes assessed against the property for the
previous tax year shall be used as a basis for determining the pro rate share,
if any, to be paid by Tenant for that portion of the last Lease year. Tenant is
responsible for all taxes, including personal property taxes, on the Premises.
INDEMNITY; INSURANCE
10. Tenant agrees to and hereby does indemnity and save Landlord harmless
against all claims for damages to persons or property by reason of Tenant's use
or occupancy of the Premises, and all expenses incurred by Landlord because
thereof, including attorney's fees and court costs. Supplementing the foregoing
and in addition thereto, Tenant shall during the term of this Lease and any
extension or renewal thereof, and at Tenant's expense, maintain in full force
and effect comprehensive general liability insurance with limits of $1,000,000
per person and $2,000,000 per accident, and property damage limits of
$2,500,000, which insurance shall contain a special endorsement recognizing and
insuring any liability accruing to Tenant under the first sentence of this
paragraph, and naming Landlord as additional insured. Tenant shall provide
evidence of such insurance to Landlord prior to the commencement of the term of
this Lease Landlord and Tenant each hereby release and relieve the other, and
waive any right of recovery, for loss or damage arising out of or incident to
the parties insured against, which parties occur in, on or about the Premises,
whether due to the negligence of Landlord or Tenant or their agents, employees,
contractors and/or invitees, to the extent that such loss or damage is within
the policy limits of said comprehensive general liability insurance. Landlord
and Tenant shall, upon obtaining the policies of insurance required, give notice
to the insurance carrier or carriers that the forgoing mutual waiver of
subrogation is contained in this lease.
Additionally, Tenant is responsible for securing and maintaining
insurance coverage on the Building for perils such as fire, flood, earthquake,
tornado and other storm damage at replacement cost and furnish evidence of said
insurance to Landlord. The insurance must name Landlord as Landlord and/or
additional insured, as appropriate, on its policy for its property, causality,
automobile, general liability and umbrella policies.
REPAIRS BY LANDLORD
11. Landlord agrees to keep in good repair the foundation, exterior walls
and roof (but the roof only to the extent set forth in the need sentence) of
the Building (exclusive of all glass and exclusive of all exterior doors).
Tenant shall promptly report in writing to Landlord any defective condition
known to it which Landlord is required to repair, and failure so to report such
conditions shall make Tenant responsible to Landlord for any liability incurred
by Landlord by reason of
such conditions, Landlord agrees to make immediate repairs to the roof up to a
[ILLEGIBLE] cost of $100,000 with commencement of such repairs within ninety
(90) days of Lease Commencement.
REPAIRS BY TENANT
12. Tenant accepts the Premises in their present condition and as
suited for the uses Intended by Tenant. Tenant shall, at its expense, throughout
the Term of this Lease, and any extension or renewal thereof, maintain in good
order and repair the Premises, including the roof (except to the extent of
Landlord's obligation with respect thereto as set forth in Section 11 above),
Building, plumbing, fire protection devices, heating and air conditioning
equipment (including but not limited to replacement of parts, compressors, air
handling units and heating units) and other improvements located thereon, except
those repairs expressly required to be made by Landlord hereunder, Tenant
further agrees to care for the grounds around the Building, including paving,
the mowing of grass, care of shrubs and general landscaping. Tenant agrees to
return the Premises to Landlord at the expiration or prior termination of this
Lease, in as good condition and repair as when first received, natural wear and
tear, damage by storm, fire, lighting, earthquake or other casualty alone
excepted. Tenant, Tenant's employees, agents, contractors or subcontractors
shall take no action which may void any manufacturer's or installer's warranty
with relation to the Premises. Tenant shall indemnity and hold Landlord harmless
from any liability, claim demand or cause of action arising on account of
Tenant's breach of the provision of this paragraph.
ALTERATIONS
13. Tenant shall not make any alterations, additions, or improvements to
the Premises at a cost of Ten Thousand and No/100 Dollars ($10,000) or more
without Landlord's prior written consent. Tenant shall promptly remove any
alterations, additions, or improvements constructed in violation of this
Paragraph upon Landlord's written request. All approved alterations, additions,
and improvements will be accomplished in a good and xxxxxxx like manner, in
conformity with all applicable laws and regulations, and by a contractor
approved by Landlord, free of any liens or encumbrances. Tenant shall secure
lien waivers Landlord may require Tenant to remove any alterations, additions or
improvements (whether or not made with Landlord's consent) at the termination of
the Lease and to restore the Premises to its prior condition, all at Tenants
expense. All alterations, additions and improvements which Landlord has not
required Tenant to remove shall become Landlord's property and shall be
surrendered to Landlord upon the termination of this Lease, except that Tenant
may remove any of Tenant's machinery or equipment which can be removed without
material damage to the Premises. Tenant shall repair, at Tenant's expense, any
damage to the Premises caused by the removal of any such machinery or equipment.
REMOVAL OF FIXTURES
14. Tenant may (if not in default hereunder) prior to the expiration of
this Lease, of any extension or renewed thereof, remove all fortunes and
equipment which it has placed in the Premises, provided Tenant repairs all
damage to the Premises caused by such removal. Tenant acknowledges Exhibit LE
(hereinafter referred to as "Landlord Personal Property") and agrees that such
property shall be maintained and returned to Landlord in substantially the same
condition as it was as of Commencement Date, except for normal wear and usage.
DESTRUCTION OF OR DAMAGE TO PREMISES
15. If the Premises are more than seventy-five percent (75%) destroyed by
storm, fire, Lightning, earthquake or other casualty, this lease shall terminate
as of the date of such destruction and rental shall be accounted for as between
Landlord and Tenant as of that date. The basis for the percentage of damage
shall be the estimated cost of repairs divided by the replacement value of the
Building. If the Premises are less than seventy-five percent (75%) damaged but
not wholly destroyed by any such casualties, rental shall xxxxx in such
proportion as effective use of the Premises has been affected, and Landlord
shall restore Premises to substantially the same condition as before damage as
speedily as is practicable, whereupon full rental shall recommence.
GOVERNMENTAL ORDERS
16. Tenant agrees, at its own expense, to comply promptly with all
requirements of any legally constituted public authority made necessary by
reason of Tenant's occupancy of the Premises. Landlord agrees to comply promptly
with any such requirements if not made necessary by reason of Tenant's
occupancy. The termination shall become effective sixty (60) days after receipt
of such notice (giving notice shall eliminate the necessity of compliance with
such requirements) unless the party receiving such notice of termination shall,
before termination becomes effective, pay to the party giving notice all cost of
compliance in excess of one year's Rent or secure payment of said sum in manner
satisfactory to the party giving notice.
CONDEMNATION
17. If the whole of the Premises, or such portion thereof as will make the
Premises unusable for the purpose herein leased, is condemned by any legally
constituted authority for any public use or purpose, then in either of said
events the term hereby granted shall cases from the date when possession thereof
is taken by public authorities, and rental shall be accounted for as between
Landlord and Tenant as of said date. Such termination, however, shall be without
prejudice to the rights of either Landlord or Tenant to recover compensation and
damage caused by condemnation from the condemnor. It is further understood and
agreed that Tenant shall not have any rights in any award made to Landlord by
any condemnation authority.
ASSIGNMENT AND SUBLETTING
18. Tenant shall not, without the prior written consent of Landlord, which
shall not be unreasonably withheld, assign this Lease or any interest hereunder,
or sublet the Premises or any part thereof, or permit the use of the Premises by
any party other than the Tenant. Consent to any assignment or sublease shall not
impair this provision, and all later
assignments or subleases shall be made likewise only on the prior written
consent of Landlord. The Assignee of Tenant, at option of Landlord, shall become
directly liable to Landlord for all obligations of Tenant hereunder, but no
sublease or assignment by Tenant shall relieve Tenant of any liability
hereunder.
EVENTS OF DEFAULT
19. The happening of any one or more of the following events (hereinafter
any one of which may be referred to as an "Event of Default") during the term of
this Lease, or any renewal or extension thereof, shall constitute a breach of
this Lease on the part of the Tenant (1) Tenant fails to pay the rental as
provided for herein; (2) Tenant abandons or vacates the Premises; (3) Tenant
fails to comply with or abide by and perform any other obligation imposed upon
Tenant under this Lease; (4) Tenant is adjudicated bankrupt; (5) A permanent
receiver is appointed for Tenant's property and such receiver in not removed
within sixty (60) days after written notice from Landlord to Tenant to obtain
such removal; (6) Tenant, either voluntarily or involuntarily, takes advantage
of any debt or relief proceedings under any present or future law, whereby the
Rent or any part thereof is, or is proposed to be, reduced or payment thereof
deferred; (7) Tenant makes an assignment for benefit of creditors; or (8)
Tenant's effects are levied upon or attached under process against Tenant, which
attachment is not satisfied or dissolved within thirty (30) days after written
notice from Landlord to Tenant to obtain satisfaction thereof.
REMEDIES UPON DEFAULT
20. Upon the occurrence of any Event of Default, Landlord may pursue any
one or more of the following remedies separately or concurrently, without
prejudice to any other remedy herein provided or provided by law: (a) If the
Event of Default involves nonpayment of rental and Tenant fails to cure such
default with ten (10) business days after receipt of written notice thereof from
Landlord, or if the Event of Default involves a default in performing any of the
terms or provisions of this Lease other than the payment of rental and Tenant
fails to cure such default within fifteen (15) business days after receipt of
written notice of default from Landlord (unless the default complained of in
said notice is of a nature that can be cured, but cannot with reasonable
diligence be completed within said 15 business day period in which case such
default shall be deemed to be cured if Tenant shall within said 15 business day
period commence to cure the same and shall thereafter complete such cure with
all due diligence). Landlord may terminate this Lease by giving written notice
to Tenant and, upon such termination, shall be entitled to recover from Tenant
damages as may be permitted under applicable law; or (b) if the Event of Default
involves any matter other than those set forth in Item (a) of this paragraph.
Landlord may terminate this Lease by giving written notice to Tenant and, upon
such termination, shall be entitled to recover from the Tenant damages in an
amount equal to all rental which is due and all rental which would otherwise
have become due throughout the remaining term of this Lease, or any renewal or
extension thereof (as if this Lease had not been terminated); or (c)upon any
Event of Default, Landlord, as Tenant's agent, without terminating this Lease,
may enter upon and Rent the Premises, in whole or in part, at the best price
obtainable by reasonable effort, without advertisement and by private
negotiations and for any term Landlord deems proper, with Tenant being liable to
Landlord for the deficiency, if any, between Tenant's Rent hereunder and the
price obtained by Landlord on reletting, provided however, that Landlord shall
not be considered to be under any duty by reason of this provision, to take any
action to mitigate damages by reason of Tenant's default. In the event Landlord
hires an attorney to enforce its rights upon default, Tenant shall in addition
be liable for reasonable attorney's fees and all costs of collection.
EXTERIOR SIGNS
21. Tenant shall place no signs on the Land or upon the outside walls or
roof of the Premises, except with the express written consent of the Landlord.
Any and all signs placed on the Premises by Tenant shall be maintained in
compliance with governmental rules and regulations governing such signs, and
Tenant shall remove and be responsible to Landlord for any costs or damage
caused by installation, use or maintenance of signs attributable to Tenant, and
all damage incident to removal thereof.
LANDLORD'S ENTRY OF PREMISES
22. Landlord may advertise the Premises "For Rent" following written
notification of Tenant to Landlord of termination or within 60 days of the end
of the Term, whichever is earlier. Landlord may advertise the Premises "For
Sale" at anytime during this Lease. Landlord may enter the Premises at
reasonable hours to exhibit same to prospective purchasers or tenants and to
make repairs required of Landlord under the terms hereof or to make repairs to
Landlord's adjoining property, if any.
EFFECT OF TERMINATION OF LEASE
23. No termination of this Lease prior to the normal ending thereof, by
lapse of time or otherwise, shall affect Landlord's right to collect Rent for
the period prior to termination thereof.
MORTGAGEE'S RIGHTS
24. Tenant's rights shall be subject to any bona fide mortgage, deed of
trust or other security interest which is now or may hereafter be placed upon
the Premises by Landlord. Tenant shall, if requested by Landlord, execute a
separate agreement reflecting such subordination, and shall be obligated to
execute such documentation as may facilitate Landlord's sale or refinancing of
the Premises including, but not limited to, estopped certificates, subordination
or attornment agreements.
QUIET ENJOYMENT
25. So long as Tenant observes and performs the covenants and agreements
contained herein, it shall at all times during the Lease term peacefully and
quietly have and enjoy possession of the Premises, but always subject to the
terms hereof. Provided, however, that in the event Landlord shall sell or
otherwise transfer its interest in the Premises. Tenant agrees to attorn to any
new owner or interest holder and shall, if requested by Landlord, execute a
separate agreement
reflecting such attornment, provided that said agreement requires the new owner
or interest holder to recognize its obligations and Tenant's rights hereunder.
HOLDING OVER
26. If Tenant remains in possession of the Premises after expiration of the
term hereof, with Landlord's acquiescence and without any express agreement of
the parties, Tenant shall be a Tenant at will at the rental rate which is one
hundred and twenty percent (120%) of the rental rate in affect at end of the
Lease, and there shall be no renewal of this Lease by operation of law. If
Tenant remains in possession of the Premises after expiration of the term hereof
without Landlord's acquiescence, Tenant shall be a Tenant at sufferance, and
commencing on the date following the date of such expiration, the monthly rental
payable under paragraph 3 above shall, for each month or fraction thereof during
which Tenant so remains in possession of the Premises, be twice the monthly
rental otherwise payable under Paragraph 3 above.
ATTORNEY'S FEES
27. In the event that any action or proceeding is brought to enforce any
term, covenant or condition of this Lease on the part of Landlord or Tenant, the
prevailing party in such litigation shall be entitled to recover reasonable
attorney's fees and costs.
RIGHTS CUMULATIVE
28. All rights, powers and privileges conferred hereunder upon parties
hereto shall be cumulative and not restrictive of those given by law.
WAIVER OF RIGHTS
29. No failure of Landlord to exercise any power given Landlord hereunder
or to insist upon strict compliance by Tenant of its obligations hereunder and
no custom or practice of the parties at variance with the terms hereof shall
constitute a waiver of Landlord's right to demand exact compliance with the
terms hereof.
ENVIRONMENTAL LAWS
30.(a) Tenant shall not bring onto the Premises any Hazardous Materials (as
defined below) without the prior written approval by Landlord. Any approval must
be preceded by submission to Landlord of appropriate Material Safety Data Sheets
(MSD Sheets). In the event of approval by Landlord, Tenant covenants that it
will (1) comply with all requirements of any constituted public authority and
all federal, state, and local codes, statutes, ordinances, rules, regulations
and laws, whether now in force or hereafter adopted relating to Tenant's use of
the Premises, or relating to the storage, use, disposal, processing,
distribution, shipping or sales of any hazardous, flammable, toxic, or dangerous
materials, waste or substance, the presence of which is regulated by a federal,
state, or local law, ruling, rule or regulation (hereafter collectively referred
to as "Hazardous Materials"); (2) comply with any reasonable recommendations by
the insurance carrier of either Landlord or Tenant relating to the use by Tenant
on the Premises of such Hazardous Materials; (3) refrain from unlawfully
disposing of or allowing the disposal of any Hazardous Materials upon, within,
about or under the Premises; and (4) remove all Hazardous Materials from the
Premises, either after their use by Tenant or upon the expiration or earlier
termination of this lease, in compliance with all applicable laws.
(b) Tenant shall be responsible for obtaining all necessary permits in
connection with its use, storage and disposal of Hazardous Materials, and shall
develop and maintain and, where necessary, file with the appropriate
authorities, all reports, receipts, manifest, filings, lists and invoices
covering those Hazardous Materials, and Tenant shall provide Landlord with
copies of all such items upon request. Tenant shall provide within five (5) days
after receipt thereof, copies of all notices, orders, claims or other
correspondence from any federal, state or local government or agency alleging
any violation of any environmental law or regulation by Tenant, or related in
any manner to Hazardous Materials. In addition, Tenant shall provide Landlord
with copies of all response to such correspondence at the time of the response.
(c) Tenant hereby indemnifies and hold harmless Landlord, its successors
and assigns from and against any and all losses, liabilities, damages, injuries,
penalties, fines, costs, expenses and claims of any and every kind whatsoever
(including attorney's fees and costs, expenses or claims asserted or arising
under the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended, from time to time, and regulations promulgated there under,
any so-called state or local lien or lien law, or any other federal, state or
local statute, law or ordinance, code, rule, regulation, order or decree
regulating, relating to, or imposing liability or standards of conduct
concerning any Hazardous Materials) paid, incurred, suffered by, or asserted
against Landlord as a result of any claim, demand or judicial or administrative
action by any person or entity (including governmental or private entities) for,
with respect to, or as a direct or indirect result of the presence on or under
or the escape, seepage, leakage, spillage, discharge, emission or release from
the Premises of any Hazardous Materials caused by Tenant or Tenant's agents,
employees, invitees or successors in interest. This indemnity shall also apply
to any release of Hazardous Materials caused by a fire or other casualty to the
Premises if such Hazardous Materials were stored on the Premises by Tenant, its
agents, employees, invitees or successors in interest.
(d) If Tenant fails to comply with the Covenants to be performed hereunder
with respect to Hazardous materials, or if an environmental protection lien is
filed against the Premises as a results of the actions of Tenant, its agents,
employees or invitees, then the occurrence of any such event shall be considered
a default hereunder.
(e) Tenant will give Landlord prompt notice of any release of Hazardous
Materials, reportable or non-reportable to federal, state or local authorities,
any fire or any damage occurring on or to the Premises.
(f) Tenant will use and occupy the Premises and conduct its business in
such a manner that the Premises are neat, clean and orderly at all times, with
all chemicals or Hazardous Materials marked for easy identification and stored
according to all codes as outlined above.
(g) Landlord and Tenant agree to comply with requirements as described in
the Deed of Trust (attached as Exhibit LE). Further, Landlord agrees to
pursue its rights under said Deed of Trust.
(h) The warranties and indemnities contained in this Paragraph 30 shall
survive the termination of this Lease.
TIME OF ESSENCE
31. Time is of the essence in this Lease.
ABANDONMENT
32. Tenant shall not abandon the Premises at any time during the Lease
term. If Tenant shall abandon the Premises or be dispossessed by process of law,
any Personal Property belonging to Tenant and left on the Premises shall, at the
option of Landlord, be deemed abandoned and available to Landlord to use or sell
to offset any Rent due or any expenses incurred by removing same and restoring
the Premises.
DEFINITIONS
33. "Landlord" as used in this Lease shall include the undersigned, its
heirs, representatives, assigns and successors in title to the Premises. "Agent"
as used in this Lease shall mean the party designated as same in Paragraph 34,
its heirs, representatives, assigns and successors. "Tenant" shall include the
undersigned and its heirs, heirs representatives, assigns and successors, and if
this lease shall be validly assigned or sublet, shall include also Tenant's
assignees or subleases as to the Premises covered by such assignment or
sublease. "Landlord", "Tenant", and "Agent" include male and female, singular
and plural, corporation, partnership, limited liability company, or individual,
as may fit the particular parties.
NOTICES
34. All notices required or permitted under this Lease shall be in writing
and shall be personally delivered or sent by U.S. certified mail, return receipt
requested, postage prepaid. Notices to Tenant shall be delivered or sent to the
address shown below, except that upon Tenant taking possession of the Premises,
then the Premises shall be Tenant's address for such purposes. Notices to
Landlord and Agent shall be delivered or sent to the addresses hereinafter
stated, to wit:
Landlord: Xxxxxx X. Xxxxx
NCSC Properties LLC
00000 Xxxxxxx Xxxx Xxxx
Xxxxx, XX 00000
Tenant: W. Xxxxx Xxxxxxx
Huck Store Fixture Company of North Carolina
Xxx Xxxx Xxxxx Xxxxx, Xxxxx 000
Xx. Xxxxx, XX 00000
All notices shall be effective upon delivery. Any party may change its notice
address upon written notice to the other parties, given as provided herein.
ENTIRE AGREEMENT
35. This Lease contains the entire agreement of the parties hereto, and no
representations, inducements, premises or agreements, oral or otherwise, between
the parties and not embodied herein shall be of any force or effect. This Lease
may not be modified except by in writing signed by all the parties hereto.
AUTHORIZED LEASE EXECUTION
36. Each individual executing this Lease as director, officer, partner,
member, or agent of a corporation, limited liability company, or partnership
represents and warrants that he is duly authorized to execute and deliver this
Lease on behalf of such corporation, limited liability company, or partnership.
TRANSFER OF LANDLORD'S INTEREST
37. In the event of the sale, assignment or transfer by Landlord of its
interest in the Premises or in this Lease (other than a collateral assignment to
secure a debt of Landlord) to a successor in interest who expressly assumes the
obligations of Landlord under this Lease, Landlord shall thereupon be released
and discharged from all its covenants and obligations under this Lease, except
those obligations that have accrued prior to such sale, assignment or transfer.
Tenant agrees to look solely to the successor in interest of Landlord for the
performance of those covenants accruing after such sale, assignment or transfer.
Landlord's assignment of this Lease, or of any or all of its rights in this
Lease, shall not affect Tenant's obligations hereunder, and Tenant shall attorn
and look to the assignee as Landlord, provided Tenant has first received written
notice of the assignment of Landlord's interest.
SPECIAL STIPULATIONS
38. Any special stipulations are set forth in the attached Exhibit LD, in
so far as said Special Stipulations conflict with any of the foregoing
provisions, said Special Stipulations shall control.
MEMORANDUM OF LEASE
39. Upon request by either Landlord or Tenant, the parties hereto shall
execute a short form lease (Memorandum of Lease) in recordable form, setting
forth such provisions hereof (other than the amount of Base Monthly Rent and
other sums due) as either party may wish to incorporate.
PURCHASE OPTION
40. For Ten Dollars ($10) and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged. Landlord grants to
Tenant the exclusive right and option to purchase all and only all of the
Premises under and subject to the terms and conditions of this section
("Purchase Option").
a) Provided that Tenant is not in default under this Lease, Tenant may
exercise this option to purchase all (and only all) of the Premises
anytime during the period from July 1, 2004 through June 30, 2008 (the
"Option Period"). Tenant shall exercise this option, if at all, by
giving Landlord written notice thereof at any time during the Option
Period. If not timely exercised, this option shall expire and shall
thereafter be of no further force and effect.
b) Upon closing of the purchase of the Premises, if at all, this Lease
will terminate.
c) If Tenant elects to exercise its purchase option, the purchase price
shall be Seven Hundred Eighty Nine Thousand One Hundred Fifty-Eight
and No. 100 Dollars ($789,158) less Fifty-Five Thousand Three Hundred
Eighteen and No/100 Dollars ($55,318) paid by Tenant for due
[ILLEGIBLE] fees prior to this Lease commencement plus any
out-of-pocket costs incurred by Landlord hereunder. Said purchase
price shall be paid by Tenant to Landlord in cash at closing less
amount assumed as debt by Tenant under Promissory Note (attached as
Exhibit L.B) if such Promissory Note is still outstanding.
d) This option to purchase is contingent on Tenant agreeing to assume, if
not at the time of closing paid and discharged in full, Landlord's
responsibility under the Deed of Trust (attached as Exhibit LB) and
Promissory Note (attached as Exhibit LC) which are hereby made part of
this agreement, and American Marketing Industries, Inc. written
consent to this assignment.
e) Tenant pays all expenses at closing, including Landlord's reasonable
attorney fees, all title insurance premiums and search fees, to affect
such sale under Purchase Option.
f) If Tenant elects to exercise its purchase option, the closing of such
purchase shall be within thirty (30) days thereof.
g) During term of this option, Tenant shall pay professional fees and
other costs incurred related to monitoring the environmental
activities on Premises.
h) Conveyance of the Premises hereunder shall be free and clear of all
liens, charges and encumbrances other than the deed of trust referred
to in subsection (d) above, the liens and encumbrances listed on
Exhibit "B" to said deed of trust and those resulting from or created
by Tenant or Tenant's acts during the Lease Term.
IN WITNESS WHEREOF.
the parties hereto have hereunto set their hands and seals, the date and year
first above written.
LANDLORD:
NCSC Properties LLC
By: /s/ Xxxxxx X. Xxxxx
-------------------
Xxxxxx X. Xxxxx
Title: Member
TENANT:
Huck Store Fixture Company of North Carolina
By: /s/ Xxxxx Xxxxxx, EVP
----------------------
Xxxxx Xxxxxx
Title: Executive Vice President
GUARANTY
For value received, Huck Store Fixture Company of North Carolina, a
North Carolina corporation and Source interlink Companies (formerly The Source
Information Management Company), a Missouri corporation, jointly and severally,
unconditionally and irrevocably guarantees the prompt and full payment and
performance by Tenant of all of Tenant's liabilities, duties and obligations
under the foregoing Lease by and between NCSC Properties, LLC and Huck Store
Fixture Company of North Carolina and, in connection therewith, the undersigned
knowingly and voluntarily waives for itself, its successors and assigns, all
defenses given to sureties or guarantors at law or in equity other than the
payment or performance of said Tenant's liabilities and obligations.
Dated this 18 day of July, 2002.
Huck Store Fixture Company of
North Carolina Source Interlink Companies, Inc.
By:________________________ By: /s/ Xxxxx Xxxxxx, EVP
---------------------
Its______________ Its___________
EXHIBIT LA
Legal Description 000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxxx, XX
Beginning at a PK nail located at the intersection of the West right of way of
Carolina Ave.-Hwy, 52 bypass and the original South right of way line of the Old
Charlotte Road; thence from said beginning point S.14-18-18E., passing a right
of way monument at 58.40 feet, a total distance of 253.58 feet to a right of way
monument located in the West right of way of Carolina Ave.-Hwy 52 by-pass;
thence with the West right of way of said by-pass S. 21-34-44 E. 236.57 feet to
a new iron pipe in West right of way of by-pass; thence S. 49-51-22 W. passing
an existing iron pipe at 162,19 feet, a total distance of 370.97 feet to an
existing iron pipe at ditch line; thence with said ditch S. 52-03-22 W. 283.93
feet to a point, thence S. 53-42-22 W. passing an existing iron pipe at 32.14
feet, a total distance of 95.13 feet to a point; thence S. 30-54-22 W. 27.22
feet to a point in centerline of Poplin Branch; thence down the centerline of
Poplin Branch the next ten calls as follows: [1] S. 80-42-22 W. 135.04 feet, [2]
S. 40-05-22 W. 74.87 feet, [3] S. 22-58-22 W. 97.25 feet, [4] N. 86-69-38 W.
81.47 feet, [5] S. 80-01-22 W. 83.26 feet, [8] S. 31-52-22 W. 53.70 feet, [7] S.
51-40-22 W. 70-33 feet, [8] S. 29-44-22 W. 83.13 feet, [9] S. 65-59-22 W. 153.19
feet, and [10] S. 30-55-22 W. 124.74 feet to a point where centerline of Poplin
Branch Intersects centerline of Little Long Creek; thence with the centerline of
Little Long Creek in its original location the following eight calls: [1] N.
31-00-38 W. 89.83 feet, [2] N. 14-42-38 W. 150.15 feet, [3] N. 05-16-22 E 302.79
feet, [4] N. 73-54-22 E. 224.99 feet, [5] S. 79-52-38 E. 79.38 feet, [6] N.
48-34-22 E. 105.85 feet, [7] N. 00-03-38 W. 412.50 feet, [8] N. 34-31-46 E.
113.71 feet to a common corner in the centerline of the old creek bed of Little
Long Creek between X. X. Xxxxxxxx, Xxxxxxx Mfg. Co. and X. X. Xxxx; thence with
the line of X. X. Xxxxxxxx N. 78-04-01 E. passing a new iron pipe at 60 feet, a
total distance of 268.12 feet to a new iron pipe; thence with another line of X.
X. Xxxxxxxx N. 11-55-59 W., passing an iron pipe at 159.55 feet, a total
distance of 175.00 feet to a PK nail located in the original South right of way
line of the Old Charlotte Road; thence with the original South right of way line
of the Old Charlotte Road N. 78-04-01 E. 560.00 feet to the point and place of
beginning and containing 18.93 acres as computed by D.M.D. method subject to
right of ways imposed.
EXHIBIT LB
DEED OF TRUST
THIS DEED OF TRUST effective as of the 27th day of June, 2002, ("DEED
OF TRUST") among NCSC PROPERTIES LLC, a North Carolina limited liability
company, ("GRANTOR") whose address is 0000 Xxxx Xxxx Xxxx, Xxxxxx XX 00000;
Xxxxx Xxxxx, as Trustee ("TRUSTEE"), whose address is 000 Xxxx Xxxxx Xxxxxx,
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, and American Marketing Industries, Inc.
("LENDER") whose address is 00000 Xxxxxx Xxxx, Xxxxx 000, Xxxxxx Xxxx, Xxxxxxxx
00000.
WITNESSETH: That Grantor does hereby irrevocably (i) mortgage, grant,
bargain, sell, pledge, assign, warrant, transfer and convey to Trustee and to
its successors and assigns in trust with power of sale in accordance with the
terms and conditions hereof, for the use and benefit of Lender, and (ii) grant a
security interest to Trustee and to its successors and assigns in trust with
power of sale, in accordance with the terms and conditions hereof, for the use
and benefit of Lender, in the property, rights, interests and estates now owned,
or hereafter acquired by Grantor in the land situated in the County of Stanly,
State of North Carolina, being more particularly described on Exhibit A attached
hereto and incorporated herein by reference ("MORTGAGED PROPERTY").
TO HAVE AND TO HOLD THE SAME, with the appurtenances, to Trustee, and
to his successors hereinafter designated, and to assigns of him and his
successors forever.
IN TRUST, HOWEVER, for the following purposes:
WHEREAS, This Deed of Trust secures to Lender: (a) the repayment of all
obligations evidenced by that certain Promissory Note ("NOTE") date of even date
herewith in the original principal amount of Four Hundred Sixty-four Thousand
and No/100 Dollars ($464,000.00) plus an interest component equaling Eighty-Six
Thousand Two Hundred Sixty-Three and 45/100 Dollars ($86,263.45), for a total
indebtedness evidenced thereby equaling Five Hundred Fifty Thousand Two Hundred
Sixty-Three and 45/100 Dollars ($550,263.45); (b) the payment of all other sums
now or in the future advanced by Lender under the Note or this Deed of Trust
(collectively, the "LOAN DOCUMENTS"), and the performance of all future
obligations of Grantor to Lender under the Note or this Deed of Trust, provided
that at no time will the total principal amount secured by this Deed of Trust,
not including sums advanced to protect the security of this Deed of Trust,
exceed the principal sum stated on the face of this Deed of Trust; and (c) the
payment and performance of Grantor's other covenants, agreements and obligations
under the Loan Documents (all referred to as the "SECURED OBLIGATIONS").
WHEREAS, Grantor covenants that (a) Grantor is lawfully seized of the
estate hereby conveyed, (b) Grantor has the right to grant and convey the
Mortgaged Property and the Mortgaged Property is unencumbered, and (c) Grantor
warrants and will defend generally the title to the Mortgaged Property against
all claims and demands, subject in each case to the permitted encumbrances (the
"PERMITTED ENCUMBRANCES") set forth on Exhibit B or, if not set forth as an
exhibit, such exceptions as are described on a lender's loan policy of title
insurance acceptable to Lender.
NOW, THEREFORE, if Grantor pays and performs its obligations under the
Loan Documents and complies with each and every agreement, condition and
covenant contained and set forth in the Loan Documents, then this Deed of Trust
will be released, without warranty, at the request and cost of Grantor. In case
of the inability or refusal to act, or temporary or permanent
Page 9 of 24
absence from said State of North Carolina of the Trustee, or of any successor
trustee, when any advertisement and sale area to be made hereunder, then the
holder of the Note may, by written instrument duly executed, acknowledged and
recorded, appoint a successor trustee who shall, for the purposes of that
advertisement and sale, succeed to the title and powers of the Trustee
hereunder.
GRANTOR AND LENDER FURTHER COVENANT AND AGREE AS FOLLOWS:
1. PAYMENT AND PERFORMANCE OF OBLIGATIONS. Grantor must promptly pay and
perform when due all of the Secured Obligations.
2. CLAIMS AGAINST MORTGAGED PROPERTY. Grantor and Lender will pay,
severally, from time to time when the same become due, all claims and
demands of mechanics, materialmen, laborers, and others hired or
retained by each of them respectively which, if unpaid, might result
in, or permit the creation of, a lien on all or any part of the
Mortgaged Property, whether prior or subordinate to this Deed of Trust,
or on the revenues, rents, issues, income, and profits arising from the
Mortgaged Property, and in general will do or cause to be done
everything necessary so that the priority of this Deed of Trust will be
fully preserved, at the cost of Grantor, without expense to Lender.
Each party shall be liable and responsible for discharging the claims,
demands and liens of only those contractors, agents or other third
parties retained by them to provide labor services or work on the
Mortgaged Property. Notwithstanding the foregoing, Grantor and Lender
shall have the right to contest in good faith the validity and
enforceability of any such lien, claim or demand.
3. TRANSFER OF THE MORTGAGED PROPERTY OR A BENEFICIAL INTEREST IN GRANTOR.
Grantor covenants and agrees to and with Lender that, if all or any
part of the Mortgaged Property or any interest therein (including,
without limitation, any equity, beneficial or ownership interest in
Grantor) is sold, assigned, transferred, conveyed, encumbered,
mortgaged, or otherwise alienated, whether voluntarily, involuntarily,
or by operation of law, or if Grantor (or anyone having an interest in
Grantor) enters into any contract or agreement to do any of the
foregoing, in any such case (a "TRANSFER") without the prior written
consent of Lender which consent shall not be unreasonably withheld,
Lender may, without notice to Grantor, declare all of the Secured
Obligations to be immediately due and payable to the extent provided in
the Note, and Lender may invoke any remedies as are permitted by this
Deed of Trust in an Event of Default. If a Transfer occurs, Grantor
must immediately deliver notice of such Transfer to Lender.
4. PRESERVATION AND MAINTENANCE OF MORTGAGED PROPERTY. Grantor covenants
and agrees not to permit or commit any waste on or of the Mortgaged
Property and to maintain the Mortgaged Property at all times in a state
of good repair and condition; to comply with, or cause to be compiled
with, all statutes, ordinances, and requirements of any governmental or
other authority relating to the Mortgaged Property; and to do or permit
to be done to the Mortgaged Property nothing that will after or change
the use and character of the Mortgaged Property or in any way impair or
weaken the security of this Deed of Trust or otherwise diminish the
value of the Mortgaged Property. In case of the refusal, neglect, or
inability of Grantor to repair and maintain the Mortgaged Property,
Lender may, at its option, make such repairs or cause repairs to be
made, and advance money to do so.
5. TAXES AND PUBLIC CHARGES. Grantor and Lender agree that Grantor is
responsible for all taxes (including real and personal property taxes
and income, franchise, withholding, profits, and gross receipts taxes);
all general and special assessments, levies, permits, inspection, and
license fees; all water and sewer rents and charges; and all other
public charges, whether of a like or different nature, imposed upon or
assessed against Grantor
Page 10 of 24
or all or any part of the Mortgaged Property or upon the revenues,
rents, issues, income, and profits of the Mortgaged Property or arising
in respect of the occupancy, use, or possession of the Mortgaged
Property after January 1, 2002. Grantor will, upon the request of
Lender, deliver to Lender receipts evidencing the payment of all such
taxes, assessments, and other public charges.
6. INSURANCE.
i) Grantor agrees to maintain in force at all times (i)
comprehensive, general liability insurance; and (ii)
property insurance, including, windstorm, explosion,
such other risks usually insured against by owners of
like properties, and such other coverages as Lender
may from time to time require on the Mortgaged
Property, in an amount equal to or greater than the
Purchase Price of the Mortgaged Property.
ii) All such insurance must be written by companies, on
forms and with endorsements all satisfactory to
Lender, all with satisfactory loss-payable and
standard non-contribution mortgagee clauses attached
in favor of Lender (or, in case of a foreclosure
sale, in favor of the owner of the certificate of
sale). Grantor must promptly deliver to Lender
certified copies of all policies and endorsements,
and all renewals. All such policies must provide for,
among other things, thirty (30) days' prior written
notice to Lender of their expiration or any
cancellation or modification. Not less than ten (10)
days prior to the expiration of any such policy, a
certified copy of an appropriate renewal policy must
be delivered to Lender.
iii) Grantor must promptly notify Lender, in writing, of
any notice received under any insurance policy or of
any loss to the Mortgaged Property that will require
more than Fifty Thousand Dollars ($50,000) to repair
("SUBSTANTIAL DAMAGE"). Grantor hereby directs each
insurance company to make Substantial Damage payment
for such loss directly and solely to Lender; and
Grantor agrees that any payment which is delivered,
for any reason, to Grantor will be held in trust for
Lender and promptly delivered in the form received
(except for any necessary endorsements) to Lender. So
long as no default or Event of Default has occurred
and is continuing hereunder, the proceeds of the
Mortgaged Property arising from the damage or
destruction thereof shall be paid to Grantor and used
by Grantor to repair, restore or replace such
Mortgaged Property, as the case may be. Otherwise, at
Lender's election such funds shall be paid over to
Lender to satisfy and discharge the Secured
Obligations to the extent thereof.
7. CONDEMNATION. If all or any part of the Mortgaged Property is taken or
damaged by the exercise of the power of eminent domain, Grantor may
contest the same in good faith and so long as Grantor is not in default
under any of the Loan Documents, the award for any property so taken
shall be paid to Grantor to restore or rebuild the portion of the
Mortgage Premises remaining following such taking, but otherwise such
award is hereby assigned to Lender, and Lender, upon such award
becoming final, is authorized, in the name of Grantor or Lender, as
appropriate, to execute and deliver acquittances for, and release of,
any such award and to collect and apply the proceeds, after the payment
of all of Lender's expenses in connection with such proceedings
(including attorneys' fees), to the payment of the Secured Obligations
(such application to be in such order as Lender may elect), and the
remainder, if any, will be paid to Grantor.
Page 11 of 24
8. CASUALTY LOSS. Subject to the provisions herein, if any of the
Mortgaged Property is destroyed or damaged by fire or any other cause,
whether insured or uninsured, and if such damage is Substantial Damage,
Grantor will, as long as no default or Event of Default has occurred
and is continuing, restore or rebuild the damaged Mortgaged Property,
but if any such default or Event of Default has occurred apply any
insurance or other proceeds to the payment of the Secured Obligations.
If any damage occurs that is not Substantial Damage, Grantor must
promptly restore or rebuild the damaged Mortgaged Property so that it
is at least of equal value and substantially the same character as
prior to the damage or destruction. If Grantor rebuilds the damaged
Mortgaged Property or if such damage is not Substantial Damage, then
Lender will make any insurance or other proceeds that have been paid to
Lender available to Grantor in accordance with such reasonable
disbursement procedures as Lender may impose. Any surplus that remains
out of the insurance proceeds after payment of such cost of rebuilding
or restoration may, at the option of Lender, (i) be applied on account
of the Secured Obligations or such portion as Lender will determine, in
such order of maturity as Lender may determine, but without any change
in the amount of the monthly payments due under the Note, or (ii) be
paid to Grantor. If the Mortgaged Property is acquired by Lender or, as
the result of a foreclosure, by anyone else, Grantor's right to any
insurance policies and proceeds resulting from damage to the Mortgaged
Property prior to the acquisition will pass to Lender or the other
party, as the case may be.
9. PROTECTION OF LENDER'S SECURITY. Lender may, at its option, and without
waiving its right to accelerate the Secured Obligations to the extent
provided in the Note and to foreclose this Deed of Trust, pay either
before or after default any or all of those certain obligations
required by the terms of this Deed of Trust to be paid by Grantor for
the protection of the Deed of Trust security or for the collection of
any of the Secured Obligations or may bring or intervene in any legal
proceeding for the protection of the Deed of Trust security. All sums
so advanced, paid or expended by Lender (including, to the extent
permitted by law, attorneys' fees and expenses) will become part of the
Secured Obligations, and will bear interest from the date thereof at
the interest rates set forth in the Note, and become an integral part
of the Secured Obligations, subject in all respects to the terms,
conditions, and covenants of the Loan Documents, as fully and to the
same extent as though a part of the original indebtedness evidenced by
the Note and secured by this Deed of Trust, except that such sums will
be repaid to Lender upon demand.
10. INSPECTION. Lender or its agent may enter upon and inspect the
Mortgaged Property at reasonable times upon reasonable notice.
11. GRANTOR NOT RELEASED; FORBEARANCE BY LENDER NOT A WAIVER. Extension of
the time for payment of the sums secured by this Deed of Trust granted
by Lender to Grantor or any successor in interest will not operate to
release Grantor or Grantor's successors in interest from liability
under this Deed of Trust. Lender will not be required to commence
proceedings against any successor in interest or refuse to extend time
for payment of the sums secured by this Deed of Trust by reason of any
demand made by the original Grantor or Grantor's successors in
interest. Any forbearance by Lender in exercising any right or remedy
will not be a waiver of or preclude the exercise of any right or
remedy.
12. NOTICES. All notices or other communications required or permitted to
be given pursuant to the provisions of this Deed of Trust will be
deemed to have been duly given or made: if by hand, immediately upon
delivery; if by telex, immediately upon confirmation of receipt; if by
express mail or any other public, semi-public, or private overnight
delivery service, one (1) day after dispatch; and if mailed by
certified mail, postage prepaid and return receipt requested, three (3)
days after deposit in the mail. All such notices and communications
will be given to the parties at their respective addresses set forth in
this Deed of Trust, or to such other addresses as either party may
designate by notice in accordance with the terms of this section.
Page 12 of 24
13. GOVERNING LAW; SEVERABILITY; CONFORMITY. This Deed of Trust will be
governed by the law of North Carolina (the "STATE"). In the event that
any provision or clause of the Loan Documents conflicts with applicable
law, such conflict will not affect other provisions of the Loan
Documents which can be given effect without the conflicting provision.
To this end, the provisions of the Loan Documents are declared to be
severable. To the extent North Carolina law may now or hereafter impose
requirements or set limitations on Lender's rights under the Loan
Documents, the Loan Documents will be conformed to comply in all
respects to the law as it may from time to time be amended.
14. EVENTS OF DEFAULT. Each of the following will constitute an "EVENT OF
DEFAULT" under this Deed of Trust: (a) failure of Grantor to make any
payment of principal or interest or any other amount due under the Loan
Documents, when the same become due and payable, whether at maturity,
or by acceleration as provided in the Loan Documents; (b) failure of
Grantor to make any payment when due (including any applicable notice
or grace periods) in accordance with the terms of any prior or
subordinate mortgage or deed of trust or the notes secured thereby, or
failure to perform any of the other terms, covenants and conditions of
any prior or subordinate mortgage or deed of trust, or the notes
secured thereby, on or before the date for such performance (including
any applicable cure or grace periods); (c) failure of Grantor to
observe or perform any nonmonetary covenant or agreement contained in
the Loan Documents; (d) failure of Grantor to observe or perform any
other obligation to, or covenant or agreement with Lender on or before
the date for such performance (including any applicable cure or grace
periods); (e) appointment of a receiver, trustee or liquidator (or
other similar official) of Grantor or of the Mortgaged Property or any
portion thereof in any proceeding or by any federal or state officer or
agency and such appointee is not discharged within sixty (60) days
after such appointment or Grantor's consent to such appointment; (f)
Grantor files a petition in bankruptcy or for reorganization or for an
arrangement under state law, now or hereafter in effect, or Grantor
makes an assignment for the benefit of its creditors, or admits in
writing its inability to pay its debts generally as they become due, or
suspends payment of obligations or takes any action in furtherance of
any of the foregoing; (g) a petition or claim of involuntary bankruptcy
is filed against Grantor under the Bankruptcy Code or any similar
federal or state law, now or hereafter in effect, and (1) Grantor
consents to such filing, or (2) fails to obtain a final order
dismissing such petition or claim within sixty (60) days after the such
filing; or (h) Grantor gives any notice by which Grantor elects to
terminate the operation of this Deed of Trust as security for future
advances or future obligations made or incurred after the date Lender
receives such notice, or Grantor takes any other action for the purpose
of limiting or attempting to limit the operation of this Deed of Trust
as such security. Grantor acknowledges, represents and warrants that
this Deed of Trust is collateral for a loan given in a business
transaction.
15. REMEDIES. At any time after an Event of Default has occurred, the whole
of the Secured Obligations (other than the Balloon Payment as provided
in the Note) will become due at Lender's option immediately or at any
time thereafter at the continuing option of Lender, and this Deed of
Trust will remain in force, and Lender may exercise any right, power or
remedy permitted to it by law or by contract, and in particular,
without limiting the generality of the foregoing, Lender will have the
absolute right, at its option, to pursue one or more of the following
remedies:
i) Lender will be entitled, immediately or thereafter,
without notice or demand, to the extent permitted by
the laws of the State, (i) to institute suit to
enforce the rights of Lender and (ii) to enforce, at
Lender's continuing option, payment of all Secured
Obligations (other than the Balloon Payment as
provided in the Note) by action to foreclose this
Deed of Trust, either or both, concurrently or
otherwise; and one action or suit will not xxxxx or
be a bar to or waiver of the Lender's right to
Page 13 of 24
institute or maintain the other, provided that Lender
will have only one payment and satisfaction of the
Secured Obligations.
ii) Lender will have the right from time to time to take
action to recover any sums, whether interest,
principal or any installment of either, or any other
sums required to be paid under the Loan Documents, as
the same become due, without regard to whether or not
the principal sum secured or any other Secured
Obligations will be due, and without prejudice to the
right of Lender thereafter to bring an action of
foreclosure, or any other action, or commence
foreclosure proceedings under the power of sale, for
a default or Event of Default by Grantor existing at
the time such earlier action was commenced.
iii) The Trustee may proceed to sell all or any part of
the Mortgaged Property, at public vendue, to the
highest bidder, at the customary place in the county
in which the Mortgaged Property is located, for cash,
first giving the public notice required by law of the
time, terms and place of sale, and of the property to
be sold; and upon such sale will execute and deliver
a deed of conveyance of the property sold to the
purchaser or purchasers of the property, and any
statement or recital of fact in such deed in relation
to the nonpayment of indebtedness hereby secured,
existence of the indebtedness so secured, notice of
advertisement, sale, receipt of money, and the
happening of any of the events by which any successor
trustee became successor as herein provided, will be
prima facie evidence of the truth of such statement
or recital; and the Trustee will receive the proceeds
of such sale, and the Trustee covenants faithfully to
perform the trust herein created. Until a sale is
held hereunder, the Trustee hereby lets the
Mortgaged Property to Grantor upon the following
terms and conditions: Grantor, and any and all
persons claiming or possessing the Mortgaged
Property, and any part thereof, by, through, or under
it will pay rent therefor at the rate of one cent per
month, payable monthly upon demand and will surrender
peaceable possession of the Mortgaged Property and
any and every part thereof to the Trustee, any of its
successors or assigns, or purchasers thereof, without
notice or demand therefor, upon the occurrence of any
Event of Default.
iv) Lender may exercise any and all other remedies
available at law or in equity.
16. SUBSTITUTE TRUSTEE. Lender, at its option, may from time to time remove
Trustee and appoint a successor trustee to any Trustee appointed
hereunder by an instrument recorded in the county in which this Deed of
Trust is recorded. Without conveyance of the Mortgaged Property, the
successor trustee will succeed to all the title, power and duties
conferred upon Trustee herein and by applicable law.
17. COSTS AND EXPENSES. Grantor agrees to pay all fees and charges incurred
in the procuring and making of this Deed of Trust or in the perfection
of the lien and security interests created by this Deed of Trust,
including without limitation; fees and expenses relating to the
examination of title to the Mortgaged Property; title insurance
premiums, costs, and expenses; surveys; appraisals; mortgage recording,
documentary, transfer, mortgage registration, or similar fees or taxes;
revenue stamps; architects' and engineers' services; inspection costs
and attorneys' fees. Grantor further agrees to pay each and all of the
costs, charges and expenses, including, to the extent permitted by law,
attorneys' fees and abstract and title insurance costs, reasonably
incurred or paid at any time by Lender because of the failure of
Grantor to perform, comply with, and abide
Page 14 of 24
by each and every of the agreements, conditions, and covenants of any
of the Loan Documents.
18. SUCCESSORS AND ASSIGNS; JOINT AND SEVERAL LIABILITY. The covenants and
agreements of this Deed of Trust will benefit the Lender and Lender's
successors and assigns. Grantor's covenants and agreements are joint
and several.
19. FUTURE ADVANCES. This Deed of Trust is intended to secure
future advances made under the Note, hereunder and/or under any other
Loan Document (as defined in the Note), and all modifications,
extensions, and renewals of any of the foregoing, with the same
priority as if made on the day of execution of this Deed of Trust, up
to a maximum amount of $550,263.45, pursuant to NCGS 45-68, et. seq.
The maximum amount stated in the preceding sentence does not affect or
alter the principal amount which Grantor is entitled to borrow under
the Note and/or any Loan Documents, and may be in excess of permitted
borrowings to cover expenses, accrued interest, costs of collection and
the like.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Page 15 of 24
IN WITNESS WHEREOF, Grantor has executed and delivered this Deed of
Trust as of the day and year first above written.
GRANTOR:
NCSC PROPERTIES LLC
By:__________________________
Name:________________________
Title:_______________________
LENDER:
AMERICAN MARKEING INDUSTRIES,
INC.
By:__________________________
Name:________________________
Title:_______________________
Page 16 of 24
EXHIBIT A
[LEGAL DESCRIPTION]
Beginning at an existing concrete monument at the Northwest corner of that tract
of land described in deed from Jefferies Associates, Inc. to Xxxxxxxx Foods Co.
dated 30 August. 1983, recorded in Deed Book 336, page 804, Stanly County
Registry and runs with the old North line of said tract North 77-46-00 East
513.93 feet to an existing iron pipe in the Western margin of U.S. Xxxxxxx 00
Xxxxxx right-of-way; thence with the Western margin of said right-of-way South
50-07-10 East 123.32 feet to an existing concrete right-of-way monument; thence
again with sad margin of said right-of-way South 37-32-15 East 270.56 feet to an
existing concrete right-of-way monument in the old line; thence with the old
line South 29-14-23 East 95.99 feet to a point on concrete located South
05-12-30 East 0.23 feet from an existing iron pipe.; thence South 67-50-17 West
passing an existing P.K. nail in the center of a paved drive at 38.00 feet, also
passing an existing iron pipe 61,92 feet from the existing P.K. nail and
continuing on 247.47 feet for a total distance of 347,39 feet to an existing
iron pipe; thence South 49-11-33 West for a total distance of 171.45 feet to an
existing concrete monument in an old line; thence with said old line North
76-18-36 West (passing a point on concrete located North 00-51-51 East 0.48 feet
from an existing iron pipe at 93.59 feet) for a total distance of 302,00 feet to
an existing concrete monument; thence with the old line North 08-14-11 West
444,67 feet to an existing concrete monument, the point of beginning, and
containing 7.59 acres by survey of Xxxxxx X. Xxxxxxxxx, Registered Land
Surveyor, dated 3 February, 1988.
Page 17 of 24
EXHIBIT B
[PERMITTED ENCUMBERANCES]
1. The lien of taxes and installments of special assessments (if any)
against the Real Property not yet due and payable as of the
Closing Date;
2. The right of way to Albemarle Telephone Company recorded in Book
103, at page 467;
3. The right of way to Southern Power Company recorded in Book 53, at
page 1;
4. Deed of easement and right of way to City of Albemarle recorded in
Book 103 at page 467;
5. Rights of way to Southern Xxxx Telephone and Telegraph Company
recorded in Book 73, page 495; Book 108, page 357 and Book 73,
page 539;
6. Temporary right of way from Xxxxxxxx Foods, Inc. to Department of
Transportation recorded in Book 328, page 797;
7. Deed of easement from Xxxxxxxx Foods Company to Department of
Transportation recorded in Book 328, page 799;
8. Right of way Agreement from Xxxxxxxx Foods Company to Duke Power
Company recorded in Book 340, page 960;
9. Rights of way of Carolina Avenue-Hwy 52 By-Pass and Old Charlotte
Road;
10. Such easements and rights-of-way as may be granted after the
Initial Closing Date by Seller, with Buyer's consent, to
governmental authorities and to public companies for utility lines
and facilities providing services to the Property;
11. Matters created or caused by Buyer;
12. Such other matters (if any) described or referred to in the "Title
Commitment" (hereinafter defined) and which Buyer may approve or
be deemed to approve; and
13. Any deed restrictions as required by NCDENR.
Page 18 of 24
EXHIBIT LC
PROMISSORY NOTE
$464,000.00 June 27, 2002
FOR VALUE RECEIVED, the undersigned NCSC Properties LLC, a North
Carolina limited liability company, (hereinafter referred to as the "MAKER")
promises to pay to the order of American Marketing Industries, Inc. ("LENDER"),
with offices located at 00000 Xxxxxx Xxxx, Xxxxx 000, Xxxxxx Xxxx, Xxxxxxxx
00000, or at such other place or places as may be hereafter designated in
writing from time to time by the holder of this Note, the principal sum of Four
Hundred Sixty-Four Thousand and No/100 Dollars ($464,000) plus interest thereon
from the date hereof through July 1, 2009 at the rate of five percent (5%) per
annum in the manner hereinafter provided. Unless otherwise defined herein, all
defined terms shall have the same meaning in this Note as such terms have in
that certain Amended and Restated Real Estate Contract by and between Lender and
Maker, dated June 27, 2002 ("REAL ESTATE CONTRACT").
The principal amount of $464,000 (the "Original Principal Amount")
together with interest at the rate of five percent (5%) per annum through July
1, 2009 (such amount of $86,263.45 being the "Interest Component"), making the
total sum due $550,263.45 (the "Total Payment"), shall be payable in 48 payments
as follows:
A. Basic Monthly Payments - Seller will make forty-six (46)
monthly payments of Ten Thousand and No/100 Dollars ($10,000)
each (the "Basic Monthly Payments") commencing on July 1, 2003
and on the 1st day of each month thereafter for the subsequent
45 months with the last such payment due May 1, 2007. The
Basic Monthly Payments Include interest computed monthly at a
rate of five percent (5%) per annum.
B. Final Monthly Payment - On June 1, 2007, Buyer shall pay
Seller a forty-seventh payment in the amount of Five Thousand
Two Hundred Sixty-Three and 45/100 Dollars ($5,263.45) ("Final
Monthly Payment").
C. Balloon Payment - Buyer shall pay Seller the forty-eighth and
last payment of $75,000 (the "Balloon Payment") within 30 days
of Maker's receipt from Holder of a copy of the NFA Letter
(the "NFA Letter Notification"). No interest shall accrue on
the principal balance after July 1, 2009. Notwithstanding
anything to the contrary herein, Maker and Holder agree that
the remaining balance of the Total Payment, inclusive of (i)
the Original Principal Amount and (ii) the Interest Component
shall be immediately due and payable upon NFA Letter
Notification without regard to the actual date thereof and
such
payment shall be paid by Maker to Lender within 10 days of the NFA Letter
Notification.
In the event the due date for any of the foregoing payments is a Saturday,
Sunday or a banking holiday all applicable payments shall be considered timely
paid on the next business day.
Maker shall have the right to prepay the remaining balance of
the Total Payment, inclusive of (i) the Original Principal Amount and (ii) the
Interest Component, at anytime without penalty.
This Note is secured by a Deed of Trust of even date herewith executed
by Maker, which, inter alia, creates a lien on real estate in Albemarle, North
Carolina (the "Deed of
Page 19 of 24
TRUST") as more particularly described in the Real Estate Contract. The Deed of
Trust provides for the acceleration of the maturity of this Note under the
circumstances specified above.
Any and every payment of principal, interest or any other sums shall be
made in the lawful money of the United States that is legal tender for payment
of all debts and dues, public and private, at the time of payment, and shall be
credited first to fees, costs and expenses owed to Lender pursuant to the terms
of the Deed of Trust; then to interest then due and the remainder on principal
and after the proper crediting of any principal payments interest shall cease
upon the portion of the principal so credited. If the balance of principal shall
not have been paid when due, on or before the Maturity Date, whether by
acceleration or otherwise, as hereinbefore provided, the same shall thereafter
bear interest at a rate equal to Eighteen percentage points (18%) per annum
(i.e. the "DEFAULT RATE"), until paid, provided, however, that in no event shall
interest be charged at a rate in excess of the highest interest rate allowable
by applicable law. The Default Rate shall accrue and remain payable on any
judgment rendered hereon or in connection with any foreclosure of the Mortgage
and throughout any bankruptcy proceedings involving the Maker.
At the option of the holder hereof, the undersigned Maker agrees to pay
a late charge of $15 plus an additional interest charge of Eighteen percent
(18%) per annum calculated daily on any past due balance until such late payment
is paid to cover the expense involved in handling delinquent payments.
In the event of a default in any promise to pay made in this Note, or
in the event of any other default hereunder or in the terms of the Real Estate
Contract or the Deed of Trust which is not cured within the period provided
therein, if any, at the option of the Lender, the entire indebtedness hereby
evidenced other than the Balloon Payment shall become due, payable and
collectible, then or thereafter as and when the Lender may elect. In no event,
and notwithstanding a default or event of default under this Note, the Real
Estate Contract or the Deed of Trust shall the Balloon Payment be due prior to
the NFA Notification Date. Notice of the exercise of such option is hereby
expressly waived. The right of acceleration provided for in this paragraph shall
not prejudice any right which the Lender may otherwise have to receive payment
of the principal sum and all accrued interest in accordance with the terms
hereof. The failure of the Lender to exercise such option or any other right to
which the Lender may be entitled shall not constitute a waiver of the right to
exercise such option or any other right in the event of any subsequent default.
Maker shall not, directly or indirectly, sell, grant, convey, assign or
otherwise transfer or permit to be the subject of a transfer (collectively,
"TRANSFER"), the Mortgaged Property (as defined in the Deed of Trust) or any
legal or beneficial interest therein provided, however, that the leasing of the
Mortgaged Property by Maker is not prohibited hereby. In the event of any
Transfer described herein without the prior written consent of Lender which
consent shall not be unreasonably withheld. Lender, at its option, may declare
this Note and all other obligations hereunder other than the Balloon Payment or
under the Deed of Trust to be immediately due and payable. The Maker and any
endorsers, guarantors, sureties and all other parties liable for the payment of
any sum or sums due or to become due under the terms of this Note severally
waive demand, presentment, demand for payment, protest, notice of protest,
nonpayment and dishonor except as specifically provided herein, and consent that
the time of payment of this Note may be extended, renewed or modified, from time
to time, without notice to them or their consent, and further agree that the
security for this Note or any portion thereof may from time to time be modified,
adjusted or released in whole or in part without affecting the liability of any
party liable or becoming liable for the payment of this Note.
Notwithstanding anything to the contrary contained in the Deed of Trust
or this Note, Lender hereby consents to Maker leasing or selling Xxxxxxx #2 to
Xxxx Store Fixture Company of North Carolina, a North Carolina corporation or
its affiliated companies ("HUCK"). If Maker transfers ownership of Xxxxxxx #2 to
Xxxx, Lender also consents to allow all obligations
Page 20 of 24
under this note to be assumed by Huck. All of the foregoing in this paragraph is
subject to Huck agreeing to be bound by the terms thereof.
In any litigation to which Lender and Maker shall be adverse parties,
Maker, except as may otherwise be provided in the Real Estate Contract, hereby
waives (to the extent permitted by law) the right to claim any defense based on
any statute of limitations or on any claim of laches and waives any
counterclaim, cross-claim, or set-off of any nature or description. Maker also
(a) acknowledges and agrees that Lender can bring any suit, action, or
proceeding under this Note or any of the documents or instruments mentioned
herein in the courts of the State of North Carolina, or the courts of the United
States District Court for the Central District of North Carolina, but shall not
be restricted to such courts, (b) consents to the jurisdiction of such courts,
and (c) consents to and waives any objection which Maker now has or may
hereafter have to proper venue existing in any of such courts. Furthermore,
Maker consents to the applicability of the laws of the State of North Carolina
with respect to liability under this Note and any action for a deficiency
judgment, whether before or after power of sale or judicial action foreclosure.
If litigation is required to enforce any provision of this Note, the
prevailing party shall have the right to recover from the other party the
prevailing parties costs of such litigation, including reasonable attorney fees.
All agreements in this Note and in the Deed of Trust and related
documents are expressly limited so that in no contingency or event whatsoever,
whether by reason of acceleration of maturity of the indebtedness evidenced
hereby or otherwise, shall the amount agreed to be paid hereunder or thereunder
for the use, forbearance or detention of money exceed the highest lawful rate
permitted under applicable usury laws. If, from any circumstance whatsoever,
fulfillment of any provision of this Note or the Deed of Trust or any related
document at the time performance of such provision shall be due, shall involve
exceeding any usury limit prescribed by law which a court of competent
jurisdiction may deem applicable hereto, then, ipso facto, the obligations to be
fulfilled shall be reduced to allow compliance with such limit, and if, from any
circumstance whatsoever, Lender shall ever receive as interest an amount which
would exceed the highest lawful rate, the receipt of such excess shall be deemed
a mistake and shall be cancelled automatically or, if theretofore paid, such
excess shall be credited against the principal amount of the indebtedness
evidenced hereby to which the same may lawfully be credited, and any portion of
such excess not capable of being so credited shall be refunded immediately to
Maker. Maker acknowledges that the indebtedness evidenced hereby is being
incurred, and that the proceeds thereof shall be used, solely for business
purposes.
This writing is intended by the parties as a final expression of this
Note and also is intended as a complete and exclusive statement of the terms of
this Note. No course of prior dealing between the parties, no usage of trade,
and no parol or extrinsic evidence of any nature shall be used to supplement or
modify any term hereof, nor are there any conditions to the full effectiveness
of this Note. This Note cannot be changed, amended, or modified orally.
[Remainder of this page intentionally left blank]
Page 21 of 24
IN WITNESS WHEREOF, each of the Undersigned, jointly and severally if
more than one, has executed this Note on the date above set forth.
NCSC PROPERTIES LLC, a North Carolina
limited liability company
By:________________________________
Name:______________________________
Title:_____________________________
Page 22 of 24
EXHIBIT LD
Special Stipulations: None
Page 23 of 24
EXHIBIT LE
Landlord Personal Property
TAG NUMBER DESCRIPTION
---------- -----------
1 Hon 4-Drawer Credenza
2 Blue Armed Chair-Dark Wood
3 Blue Armed Chair-Dark Wood
4 Xxxxxx 1460-2 Calculator
5 Blue Armed Chair-Dark Wood
6 Blue Armed Chair-Dark Wood
7 Blue Armed Chair-Dark Wood
8 Blue Armed Chair-Dark Wood
9 Blue Armed Chair-Black Plastic
10 Blue Armed Chair-Black Plastic
11 Blue Armed Chair-Black Plastic
12 Blue Armed Chair-Black Plastic
13 Hon Desk-L W/4 Drawers
14 Hon Desk-L W/4 Drawers
15 Hon Desk-L W/4 Drawers
16 Hon Desk-L W/4 Drawers
17 Hon Desk-L W/4 Drawers
18 Hon Desk-L W/4 Drawers
20 Hon 4 Drawer Credenza
21 Wheeled Arm Chair
23 Hon Desk-L W/4 Drawers
24 Hon Desk-L W/4 Drawers
25 Hon Desk-L W/4 Drawers
26 Hon Desk-L W/4 Drawers
27 Hon Desk-L W/4 Drawers
28 Hon 4 Drawer Credenza
29 Hon 4 Drawer Credenza
30 Blue Armed Chair-Black Plastic
31 Blue Armed Chair-Dark Wood
32 Blue Armed Chair-Dark Wood
33 Blue Armed Chair-Dark Wood
34 Blue Armed Chair-Dark Wood
35 Blue Armed Chair-Dark Wood
36 Blue Armed Chair-Dark Wood
37 Blue Swivel Chair
38 Blue Swivel Chair
39 Blue Armed Chair-Dark Wood
40 Blue Armed Chair-Dark Wood
41 2 Drawer File Cabinet
42 2 Drawer File Cabinet
43 Wheeled Arm Chair
44 Hon Desk - 5 Drawer
45 Wheeled Clerical Chair
46 Wheeled Clerical Chair
47 Wheeled Clerical Chair
48 Wheeled Clerical Chair
49 Wheeled Clerical Chair
50 Wheeled Clerical Chair
51 Wheeled Clerical Chair
52 Partitions
53 Partitions
54 Wheeled Arm Chair
55 Wheeled Clerical Chair
56 Sharp Calculator
57 Xxxxxx 1260-2 Calculator
58 Xxxxxx 1460-2 Calculator
59 Sharp Calculator
60 Table
61 Microvave
62 Janitor Buggy
65 Mail Bins in Vault
66 Check Signer in Vault
67 Check Signer in Vault
68 25 Trash Cans
69 Metal Shelving in Vault
70 Metal Shelving in Vault
71 Hon Desk - 5 Drawer 1997 HON Cubicles with desks - qty
72 12
73 2000 HON cubicles with desks - qty 3
74 Quincy Compressors - qty 2
75 Uninterruptible Power Supply
Page 24 of 24
