EXHIBIT (10p)
LEASE AGREEMENT
BETWEEN
NATIONSBANC LEASING & R.E. CORPORATION
AND
UNIFI MANUFACTURING, INC.
May 20, 1997
TABLE OF CONTENTS
Page
1. Definitions. 1
2. Agreement for Sale of Properties; Agreement for Lease of
Properties; Covenant of Quiet Enjoyment. 11
3. Conditions Precedent. 12
(a) Principal Conditions. 12
(b) Additional Conditions. 13
4. Acceptance of the Properties. 14
5. Term; Early Termination. 15
(a) Term. 15
(b) Early Termination. 15
(c) Early Purchase Option. 16
6. Termination Date Delivery of the Properties. 16
7. Payments. 17
(a) Basic Payments. 17
(b) Supplemental Payments. 17
(c) Method of Payment. 17
8. Net Lease. 18
9. Lessor's Title; True Lease. 18
(a) Lessor's Title. 18
(b) True Lease. 19
10. Use of the Properties; Compliance with Laws. 19
11. Maintenance and Repair. 19
(a) General Maintenance Standard. 19
(b) Replacement. 20
(c) Additional Appraisals. 20
(d) No Lessor Maintenance Obligation. 20
12. Required Alterations; Voluntary Enhancements. 21
13. Inspection; Reports; Change of Chief Executive Office and/or
Name. 21
(a) Inspection. 21
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(b) Change of Chief Executive Office and/or Name. 22
14. Sublease; Assignment; Consolidation and Merger. 22
(a) By Lessee. 22
(b) By Lessor. 23
(c) Consolidation and Merger by Lessee. 24
15. Liens. 25
16. Loss, Damage or Destruction. 26
(a) Risk of Loss, Damage or Destruction. 26
(b) Casualty and Condemnation with Respect to the Properties. 26
(c) Environmental Matters. 29
(d) Application of Payments Not Relating to a Casualty,
Condemnation or Environmental Violation. 30
17. Insurance. 30
(a) Public Liability and Workers' Compensation Insurance. 30
(b) Permanent Hazard and Other Insurance. 31
(c) Additional Provisions Regarding Insurance Coverage. 31
18A. General Tax Indemnity. 33
18B. Special Tax Indemnity. 33
(a) Assumptions. 33
(b) Representations, Warranties and Covenants. 34
(c) Indemnity Payment Conditions. 35
(d) Survival of Indemnities. 36
(e) Consolidated Group. 36
19. General Indemnity. 36
20. NO LESSOR WARRANTIES. 37
21. Lessee's Representations and Warranties. 38
(a) Due Organization and Existence. 38
(b) Power and Authority. 38
(c) Due Authorization. 38
(d) Enforceability. 38
(e) No Consents. 39
(f) No Liens. 39
(g) Perfection of Security Interest. 39
(h) (intentionally omitted). 39
(i) No Litigation. 39
(j) Income Tax Return. 40
(k) ERISA. 40
(l) Investment Company. 40
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(m) Taxes. 40
(n) No Offer to Sell or Assign. 40
(o) Chief Executive Office. 41
(p) No Material Adverse Change. 41
(q) Trade Names. 41
(r) Title. 41
(s) Flood Hazard. 41
(t) Insurance Coverage. 41
(u) Compliance with Law. 41
(v) Governmental Actions 42
(w) Encroachments; Permitting. 42
22. Events of Default. 43
(a) Payment. 43
(b) Certain Covenants. 43
(c) Other Covenants. 43
(d) Default under Other Documents - Lessee. 43
(f) Bankruptcy; Insolvency - Lessee. 44
(g) Bankruptcy; Insolvency - Guarantor. 44
(h) Misrepresentation - Lessee. 45
(i) Misrepresentation - Xxxxxxxxx. 00
00. Remedies Upon Default. 45
(a) Surrender of Possession. 45
(b) Sell, Use or Otherwise Employ Properties. 46
(c) Excess of Casualty Loss Value over Fair Market Sales Value. 46
(d) Excess of Casualty Loss Value over Sales Proceeds. 46
(f) Reletting. 47
(g) Termination or Rescission. 47
24. Lessor's Right to Perform for Lessee. 48
25. Late Charges. 48
26. Further Assurances. 49
27. Transaction Costs, Fees and Expenses. 49
28. Notices. 49
29. End of Term Options. 50
(a) Election Procedure. 50
(b) Lessee's Purchase. 50
(c) Environmental Inspection. 51
30. Federal and State Tax Consequences. 51
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31. Miscellaneous. 51
32. Interest Rate Calculations. 52
33. Taxes. 52
34. Utility Charges. 52
35. Article 2A. 53
Schedules
A - Basic Payment Factor
A-1 Basic Payments
B - Casualty Loss Value
Exhibits
A - Description of Properties
B - Form of Lease Supplement and Acceptance Certificate
C - Form of Memorandum of Lease Agreement and Acceptance
Certificate
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LEASE AGREEMENT
THIS LEASE AGREEMENT dated as of May 20, 1997 (as amended,
modified, supplemented, restated and/or replaced from time to
time, the "Agreement") is between NATIONSBANC LEASING & R.E.
CORPORATION, a Delaware corporation (together with its successors
and assigns permitted hereunder, the "Lessor") having its
principal place of business at XxxxxxxXxxx Xxxxx, XX0-000-00-00,
000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000 and UNIFI
MANUFACTURING, INC., a North Carolina corporation (together with
its successors and assigns permitted hereunder, the "Lessee"),
having its principal place of business at 0000 Xxxx Xxxxxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000.
WITNESSETH:
WHEREAS, Lessee has requested Lessor to purchase the
Properties (as defined hereinafter) and, simultaneously with such
acquisition, to lease the Properties to Lessee for use in its
operations; and
WHEREAS, Lessor is willing to purchase and lease the
Properties subject to the terms and conditions hereinafter set
forth, and Lessee has agreed to lease the Properties from Lessor
on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth, the parties hereto agree as
follows:
1. Definitions.
Unless the context otherwise requires, (a) the following
terms shall have the following meanings for all purposes of this
Agreement and shall be equally applicable to both the singular
and the plural forms of the terms herein defined and (b) all
agreements, instruments and other documents referenced in this
Section 1 shall refer to such as amended, modified, supplemented,
restated and/or replaced from time to time. The words "this
Agreement", "herein", "hereunder", "hereof", or other like words
mean and include this Agreement and the Lease Supplement and any
amendment, modification, supplement, restatement and/or
replacement with respect to this Agreement and/or the Lease
Supplement.
"Acceptance Date" means the date on which Lessor entered
into the Overall Transaction and Lessee unconditionally accepted
the Properties for lease hereunder, as evidenced by the execution
and delivery of the Lease Supplement and dated such date.
"Acquisition Cost" means an amount equal to the sum of (a)
the total cost paid by Lessor for or in connection with the
Properties referenced in the Lease Supplement, less (b) the total
cost paid by Lessor for or in connection with each particular
Property which has been the subject of a Casualty or Condemnation
and for which an amount equal to the Casualty Loss Value for such
Property has been paid in full to Lessor.
"Acquisition Expiration Date" means May 20, 1997.
"Affiliate" means a Person (other than a Subsidiary) which
directly or indirectly through one or more intermediaries
controls or is controlled by, or is under common control with,
another Person. The term "control" means the possession,
directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether
through ownership of voting stock, by contract or otherwise.
"After Tax Basis" shall mean, with respect to any payment to
be received, the amount of such payment increased so that, after
deduction of the amount of all Taxes required to be paid by the
recipient calculated at the then maximum marginal rates generally
applicable to Persons of the same type as the recipients (less
any Tax savings realized as a result of the payment of the
indemnified amount) with respect to the receipt by the recipient
of such amounts, such increased payment (as so reduced) is equal
to the payment otherwise required to be made.
"Appraisal Procedure" means the following procedure for
determining the Fair Market Sales Value of any Property. If
either party to this Agreement shall have given written notice to
the other party requesting determination of such value by the
Appraisal Procedure, the parties shall consult for the purpose of
appointing a qualified independent appraiser by mutual agreement.
If no such appraiser is so appointed within 15 days after such
notice is given, each party shall appoint a qualified independent
appraiser within 20 days. If one party, but not the other,
appoints an appraiser pursuant to the preceding sentence, then
the appropriately appointed appraiser shall conduct the
appraisal. Any appraiser or appraisers appointed pursuant to the
foregoing procedure shall be instructed to determine the Fair
Market Sales Value of such Property within 30 days after his or
their appointment. If the parties shall have appointed a single
appraiser, his determination of values shall be final. If two
appraisers shall be appointed, the values determined shall be
averaged. The parties shall share equally the costs and expenses
of the appraiser or the appraisers, as the case may be.
"Appurtenant Rights" shall mean (a) all agreements,
easements, rights of way or use, rights of ingress or egress,
privileges, appurtenances, tenements, hereditaments and other
rights and benefits at any time belonging or pertaining to any of
the Land underlying any Improvements or otherwise benefiting any
Property, including without limitation the use of any streets,
ways, alleys, vaults or strips of land adjoining, abutting,
adjacent or contiguous to any Land and (b) all permits, licenses
and rights, whether or not of record, appurtenant to any Land or
any Improvements.
"Assignee" means any Person to whom Lessor or any assignee
(whether pursuant to an actual assignment or a collateral
assignment) has made any assignment (whether as an actual
assignment or as a collateral assignment), sale or transfer
referred to in Section 14(b) hereof.
"Basic Payment" means the amounts payable as rent for the
Properties during the Term pursuant to Section 7(a) hereof.
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"Basic Payment Date" means each date on which a semi-annual
Basic Payment is due and payable as provided in Section 7(a)
hereof.
"Basic Payment Factor" means each of the Basic Payment
Factors set forth on Schedule A hereto.
"Basic Payment Period" means each of the successive periods
occurring from the Acceptance Date to the Expiration Date, each
such period beginning on and including a Basic Payment Date and
ending on but excluding the next succeeding Basic Payment Date.
"Business Day" means any day other than a day on which
banking institutions in the States of North Carolina and Georgia
are authorized or required by Law to close.
"Casualty" with respect to any Property means each of the
following occurrences whether existing at the expiration or
earlier termination of this Agreement: (a) destruction, damage
beyond repair, or rendition of any Property or Part thereof
permanently unfit for normal use for any reason whatsoever, (b)
loss of any Property or Part thereof or of the use thereof due to
theft or disappearance during the Term or the non-existence
thereof or (c) any damage to any Property or Part thereof which
results in an insurance settlement with respect to such Property
or Part thereof on the basis of a total loss.
"Casualty Loss Value" means as of any Casualty Loss Value
Date during the Term an amount determined by multiplying (a) the
Acquisition Cost for all Properties subject to a Casualty or
Condemnation within the then current Basic Payment Period by (b)
the percentage set forth opposite such Casualty Loss Value Date
on Schedule B hereto.
"Casualty Loss Value Date" means the last day of each Basic
Payment Period.
"CERCLA" means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, 42 U.S.C. Section 9601 et
seq., as amended by the Superfund Amendments and Reauthorization
Act of 1986.
"Claims" means any and all obligations, liabilities, losses,
actions, suits, penalties, claims, demands, costs and expenses
(including without limitation reasonable attorney's fees and
expenses) of any nature whatsoever.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Condemnation" means any taking, condemnation, confiscation,
seizure, requisition or sale of the use, access, occupancy,
easement rights or title to any Property or any Part thereof,
wholly or partially (temporarily or permanently), by or on
account of any actual or threatened eminent domain proceeding or
other taking of action by any Person having the power of eminent
domain, including without limitation an action by a Governmental
Authority to change the grade of, or widen the streets adjacent
to, any Property or alter the pedestrian or vehicular traffic
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flow to any Property so as to result in a change in access to
such Property, or by or on account of an eviction by paramount
title or any transfer made in lieu of any such proceeding or
action.
"Consolidated Subsidiary" means at any date any Subsidiary
of any Person or other entity the accounts of which would be
consolidated with those of such Person in the consolidated
financial statements of such Person if such statements were
prepared as of such date.
"Consolidated Tangible Net Worth" means at any date the
consolidated stockholders' equity of Lessee and its Consolidated
Subsidiaries, less their consolidated Intangible Assets, all
determined as of such date. For purposes of this definition,
"Intangible Assets" means the amount (to the extent reflected in
determining such consolidated stockholders' equity) of (a) all
write-ups (other than write-ups resulting from foreign currency
translations and write-ups of assets of a going concern business
made within 12 months after the acquisition of such business) in
the book value of any assets owned by Lessee or a Consolidated
Subsidiary of Lessee and (b) all goodwill, patents, trademarks,
service marks, trade names, copyrights, organization or
developmental expenses and other intangible assets.
"Deed" means each warranty deed specifically referring to
the applicable parcel of Land and the related Improvements,
executed by the appropriate Seller in favor of Lessor and dated
the Acceptance Date.
"Default" means any event which with the giving of notice or
the passage of time or both would result in an Event of Default.
"Environmental Claims" means any investigation, notice,
violation, demand, allegation, action, suit, injunction,
judgment, order, consent decree, penalty, fine, Lien, proceeding,
or Claim (whether administrative, judicial, or private in nature)
arising (a) pursuant to, or in connection with, an actual or
alleged violation of, any Environmental Law, (b) in connection
with any Hazardous Substance, (c) from any abatement, removal,
remedial, corrective, or other response action in connection with
a Hazardous Substance, Environmental Law, or other order of a
Tribunal or (d) from any actual or alleged damage, injury, threat
or harm to health, safety, natural resources or the environment.
"Environmental Laws" means any Law, permit, consent,
approval, license, award or other authorization or requirement of
any Tribunal relating to emissions, discharges, releases,
threatened releases of any Hazardous Substance into ambient air,
surface water, ground water, publicly owned treatment works,
septic system or land or otherwise relating to the handling,
storage, treatment, generation, use, or disposal of Hazardous
Substances, pollution or to the protection of health or the
environment, including without limitation CERCLA, the Resource
Conservation and Recovery Act, 42 U.S.C. 6901, et seq., and state
statutes analogous thereto.
"Environmental Violation" means any activity, occurrence or
condition that violates or threatens (if the threat requires
remediation under any Environmental Law and is not remediated
during any grace period allowed under such Environmental Law) to
violate or results in or threatens (if the threat requires
remediation under any Environmental Law and is not remediated
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during any grace period allowed under such Environmental Law) to
result in noncompliance with any Environmental Law.
"Equipment" means the equipment described in Annexes 1B, 2B,
3B, 4B, 5B and 6B to Exhibit A hereto delivered on the Acceptance
Date, together with any Parts (including without limitation
replacement Parts) which may from time to time be incorporated in
such equipment or other property and title to which shall have
vested in Lessor.
"ERISA" shall have the meaning given to such term in Section
21(k) hereof.
"Event of Default" shall have the meaning given to such term
in Section 22 hereof.
"Expiration Date" means January 1, 2013.
"Fair Market Sales Value" means the value which would be
obtained in an arm's length transaction regarding the Properties
between an informed and willing buyer and an informed and willing
seller under no compulsion to sell. If the parties are unable to
agree on the Fair Market Sales Value within 30 days of Lessor's
giving of notice as specified in Section 23(c) hereof or by the
date 120 days prior to the Expiration Date, as the case may be,
such Fair Market Sales Value shall be determined by the Appraisal
Procedure.
"Fixtures" means all fixtures relating to the Improvements,
including without limitation all components thereof, located in
or on the Improvements, together with all replacements,
modifications, alterations and additions thereto.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the accounting
principles board of the American Institute of Certified Public
Accountants, and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the
accounting profession, that are applicable to the circumstances
as of the date of determination.
"Governmental Action" means all permits, authorizations,
registrations, consents, approvals, waivers, exceptions,
variances, orders, judgments, written interpretations, decrees,
licenses, exemptions, publications, filings, notices to and
declarations of or with, or required by, any Governmental
Authority, or required by any Legal Requirement, and shall
include without limitation all environmental and operating
permits and licenses that are required for the full use,
occupancy, zoning and operating of the Properties.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Guarantor" means Unifi, Inc., a New York corporation, in
its capacity as and to the extent set forth in the Guaranty.
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"Guaranty" means that certain Guaranty Agreement dated as of
the date hereof executed by the Guarantor to the Lessor.
"Hazardous Substance" means any of the following: (a) any
petroleum or petroleum product, explosives, radioactive
materials, asbestos, formaldehyde, polychlorinated biphenyls,
lead or radon gas; (b) any substance, material, product,
derivative, compound or mixture, mineral, chemical, waste, gas,
medical waste, or pollutant, in each case whether naturally
occurring, man-made or the by-product of any process, that is
toxic, harmful or hazardous to the environment or human health or
safety as determined in accordance with any Environmental Law; or
(c) any substance, material, product, derivative, compound or
mixture, mineral, chemical, waste, gas, medical waste or
pollutant that would support the assertion of any Claim under any
Environmental Law, whether or not defined as hazardous as such
under any Environmental Law.
"Impositions" means any and all liabilities, losses,
expenses, costs, charges and Liens of any kind whatsoever for
Taxes including but not limited to (a) real property Taxes,
personal property Taxes and ad valorem Taxes in the nature of
property Taxes on any Property or any Part thereof, (b) sales
Taxes, use Taxes, value added and other similar Taxes (including
without limitation rent Taxes and intangibles Taxes); (c) any
excise Taxes, (d) real estate transfer Taxes, conveyance Taxes,
stamp Taxes and documentary recording Taxes and fees, (e) Taxes
that are or are in the nature of franchise, income, privilege and
doing business Taxes, license and registration fees. (f)
assessments on any Property, including all assessments for public
Improvements or benefits, whether or not such improvements are
commenced or completed within the Term and (g) any Tax, Lien,
assessment or charge asserted, imposed or assessed by the Pension
Benefit Guaranty Corporation established pursuant to Subtitle A
of Title IV of ERISA and any successor thereto or any
governmental authority performing functions similar thereto, and
in each case all interest, additions to Tax and penalties
thereon, which at any time prior to, during or with respect to
the Term or in respect of any period for which Lessee shall be
obligated to pay Supplemental Payments, may be levied, assessed
or imposed by any Governmental Authority upon or with respect to
(t) any Property or any Part thereof or interest therein, (u) the
leasing, financing, refinancing, demolition, construction,
substitution, subleasing, assignment, control, condition,
occupancy, servicing, maintenance, repair, ownership, possession,
activity conducted on, delivery, insuring, use, operation,
improvement, transfer of title, return or other disposition of
such Property or any Part thereof or interest therein, (v) the
rentals, receipts or earnings arising from any Property or any
Part thereof or interest therein, (w) the Transaction Documents,
the performance thereof, or any payment made or accrued pursuant
thereto, (x) the income or other proceeds received with respect
to any Property or any Part thereof or interest therein upon the
sale or disposition thereof, (y) any contract relating to the
construction, acquisition or delivery of or regarding any
Property or any Part thereof or interest therein or (z) otherwise
in connection with the transactions contemplated by the
Transaction Documents.
"Improvements" means, with respect to each parcel of Land,
all buildings, structures, fixtures, and other improvements of
every kind existing at any time and from time to time on or under
the Land purchased, leased or otherwise acquired by Lessor,
together with any and all Appurtenant Rights and other
appurtenances to such buildings, structures or improvements,
including without limitation sidewalks, utility pipes, conduits
and lines, parking areas and roadways, and including without
limitation all Modifications and other additions to or changes in
6
the Improvements at any time, including without limitation (a)
any Improvements existing as of the Acceptance Date and (b) any
Improvements made subsequent to the Acceptance Date.
"Indemnified Person" means Lessor, each Assignee, each
collateral assignee of Lessor and mortgagee of Lessor pursuant to
Section 14(b) hereof and each of their respective successors and
assigns and the officers, directors, stockholders, equity
holders, agents and servants of any of the foregoing.
"Land" means each parcel of real property described in
Annexes 1A, 2A, 3A, 4A, 5A and 6A to Exhibit A hereto.
"Law" means any statute, law, ordinance, regulation, rule,
directive, order, writ, injunction or decree of any Tribunal.
"Lease Supplement" means a Lease Supplement and Acceptance
Certificate substantially in the form of Exhibit B hereto, to be
executed by Lessor and Lessee for the Properties, in accordance
with the provisions of Section 4 hereof.
"Legal Requirements" means all foreign, federal, state,
county, municipal and other governmental statutes, Laws, rules,
orders, regulations, ordinances, judgments, decrees and
injunctions affecting Lessor, any Indemnified Person or any
Property, Land, Improvement, Fixture, Equipment or the taxation,
demolition, construction, use or alteration thereof, whether now
or hereafter enacted and in force, including without limitation
any that require repairs, modifications or alterations in or to
any Property or in any way limit the use and enjoyment thereof
(including without limitation all building, zoning and fire codes
and the Americans with Disabilities Act of 1990, 42 U.S.C. 12101
et. seq., and any other similar federal, state or local Laws or
ordinances and the regulations promulgated thereunder) and any
that may relate to environmental requirements (including without
limitation all Environmental Laws), and all permits, certificates
of occupancy, licenses, authorizations and regulations relating
thereto and all covenants, agreements, restrictions and
encumbrances contained in any instruments which are either of
record or known to Lessee affecting any Property or the
Appurtenant Rights.
"Lessee Entity" means Lessee, each Affiliate of Lessee and
each Subsidiary of Lessee.
"Lessor Entity" means Lessor, each Affiliate of Lessor and
each Subsidiary of Lessor.
"Lessor's Liens" means any Lien affecting, on or in respect
of any Property or this Agreement arising as a result of (i)
claims against Lessor not related to the transactions
contemplated by the Transaction Documents, (ii) acts or omissions
of Lessor not permitted under the terms of the Transaction
Documents and in breach of any covenant or agreement of Lessor
set forth in any of the Transaction Documents, (iii) Taxes
imposed against Lessor which are not indemnified against by the
Lessee pursuant to this Agreement or any other Transaction
Document, except to the extent not due and payable or the amount
or validity of which is being contested in good faith by
appropriate proceedings so long as there is no material risk of
the impairment of the Lien of this Agreement or the loss of the
benefit of any part of any Property to Lessee under this
7
Agreement or (iv) claims against Lessor arising out of the
transfer (whether voluntary or involuntary) by Lessor (without
the consent of Lessee as provided in this Agreement) of all or
any portion of its interests in all or part of any Property or
the Transaction Documents.
"Lien" means any lien, encumbrance, exception, restriction,
easement, right of way, servitude, encroachment, pledge, security
interest or irregularity in title of any kind.
"Maximum Cost" means the sum of $27,500,000.
"Memorandum of Lease" means the Memorandum of Lease
Agreement and Lease Supplement and Acceptance Certificate in the
form of Exhibit C hereto to be executed by Lessor and Lessee as
of the Acceptance Date.
"Modifications" means, with respect to each Property, any
modifications, alterations, renovations, improvements and
additions to any such Property or any Part thereof and
substitutions and replacements therefor.
"Option Election Notice Date" means September 1, 2012.
"Overall Transaction" means all of those transactions
referred to in, provided for in or contemplated by this Agreement
and/or the other Transaction Documents, including without
limitation the financing, operation and management of the
Properties.
"Overdue Rate" means the lesser of the maximum rate
permitted by applicable Law and a per annum interest rate equal
to the Prime Rate plus two percent (2%).
"Parts" means all appliances, parts, components, units,
instruments, appurtenances, accessories and miscellaneous
property of whatever nature that may from time to time be
incorporated or installed in or attached to or otherwise part of
any Property.
"Payments" means Basic Payments and Supplemental Payments.
"Permitted Contest" means any contest by Lessee regarding
any Permitted Lien or any Taxes incurred with respect to which
Lessee has provided a legal opinion from outside counsel stating
in substance that the position adopted by Lessee in its contest
has merit and has a reasonable likelihood of success; so long as
Lessee shall contest, in good faith and at its expense, the
existence, the amount or the validity thereof, the amount of the
damages caused thereby, or the extent of its liability therefor,
by appropriate proceedings which do not result in (a) the
collection of, or other realization upon, the Lien or the Taxes
so contested, (b) the sale, forfeiture or loss of any Property or
any portion thereof, (c) any interference with the use of any or
any Property or any portion thereof or (d) any interference with
the payment of the Payments or any portion thereof.
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"Permitted Exception" means for each Property, the Liens set
forth on Schedule B of the title policy commitment issued to
Lessor for such Property.
"Permitted Facility" means each manufacturing facility used
to produce textured filament or spun yarns.
"Permitted Lien" means:
(a) the respective rights and interests of the parties to
the Transaction Documents as provided in the Transactions
Documents;
(b) the rights of any sublessee or assignee under a
sublease or an assignment expressly permitted by the terms of
this Agreement for no longer than the duration of this Agreement;
(c) Liens for Taxes that either are not yet due or are
being contested pursuant to a Permitted Contest;
(d) Liens arising by operation of Law, materialmen's,
mechanics', workmen's, repairmen's, employees', carriers',
warehousemen's and other like Liens relating to any Modification
or arising in the ordinary course of business for amounts that
either are not more than 30 days past due or are being contested
pursuant to a Permitted Contest;
(e) Liens of any of the types referred to in clause (d)
above that have been bonded for not less than the full amount in
dispute (or as to which other security arrangements satisfactory
to Lessor have been made), which bonding (or arrangements) shall
comply with applicable Legal Requirements and shall have
effectively stayed any execution or enforcement of such Liens;
(f) Liens arising out of judgments or awards with respect
to which appeals or other proceedings for review are being
prosecuted in good faith and for the payment of which adequate
reserves have been provided as required by GAAP or other
appropriate provisions have been made, so long as such
proceedings have the effect of staying the execution of such
judgments or awards and satisfy the conditions for a Permitted
Contest;
(g) Liens in favor of municipalities to the extent agreed
to by the Lessor;
(h) Liens for Taxes not yet due; and
(i) all Liens other than Liens which, in the reasonable
assessment of Lessor, impair the value of any Property or the use
of any Property for its intended purpose.
"Permitted Sublease" means a sublease (a) to which Lessor
has given its prior written consent (to be given or withheld in
its sole discretion), (b) the sublessee with respect to which
shall be organized under the Laws of the United States or any
9
state thereof and shall have its principal place of business in
the United States, (c) the term of which shall in no event exceed
the then remaining portion of the Term, (d) immediately prior to
the commencement of the term of which, and after giving effect to
which, there shall exist no Default or Event of Default, (e)
which shall be collaterally assigned to Lessor pursuant to an
assignment which in form and substance is satisfactory to Lessor,
and (f) which shall contain unconditional payment provisions and
provisions relating to insurance, maintenance, operation in
accordance with applicable Laws and insurance requirements,
possession, delivery and return conditions (insofar as general
condition of the applicable Property is concerned), events of
default, remedies and permitted Liens on such Property which
provide for benefits and protections to Lessee, as lessor, which
are substantially similar to the benefits and protections
provided to Lessor by such provisions of this Agreement.
"Person" means any individual, corporation, partnership,
joint venture, association, joint stock company, trust,
trustee(s) of a trust, unincorporated organization, or government
or governmental authority, agency or political subdivision
thereof.
"Prime Rate" means the per annum interest rate announced by
NationsBank, N.A. from time to time as its prime lending rate as
in effect from time to time. Such prime rate is a reference rate
and does not necessarily represent the lowest or best rate
actually charged to any customer. NationsBank, N.A. may make
commercial loans or other loans at rates of interest at, above or
below such prime rate. Such prime rate shall change
automatically and without notice from time to time as and when
such prime rate of NationsBank, N.A. changes.
"Properties" means each parcel of Land and all Improvements,
all Fixtures and all Equipment on each such parcel of Land or
otherwise associated therewith, as more particularly described in
Exhibit A hereto.
"Purchase Agreement" means that certain Contract of Purchase
and Sale dated as of the date hereof between the Lessor and the
Seller pursuant to which the Seller has sold to the Lessor all of
Seller's right, title and interest in and to each of the
Properties.
"Replacement" shall have the meaning given to such term in
Section 11(b) hereof.
"Required Alteration" shall have the meaning given to such
term in Section 12 hereof.
"Sales Expenses" means (a) all property, excise, sales and
use Taxes and other Taxes (as such may be applicable to the sale
or transfer of any Property), (b) all fees, costs and expenses of
such sale or transfer of any Property (including without
limitation fees, costs and expenses of attorneys or those
associated with transportation, storage, security or insurance)
incurred by Lessor and (c) any and all other amounts incurred in
connection with such sale or transfer of any Property for which,
if not paid, Lessor would be liable or which, if not paid, would
constitute a Lien on any Property or any Part thereof.
"Seller" means Unifi, Inc., a New York corporation.
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"Subsidiary" of any Person means any corporation of which
more than 50% of the voting rights of the outstanding capital
stock at the time of determination is owned directly or
indirectly by such Person or one of the Subsidiaries of such
Person.
"Supplemental Payments" means all amounts, liabilities and
obligations which Lessee assumes or agrees to pay hereunder to
Lessor or others, including without limitation payments of
Casualty Loss Value and indemnities, but excluding Basic
Payments.
"Tax" means any and all United States federal, state and
local taxes, levies, fees, imposts, duties, charges, assessments,
excises or withholdings, howsoever denominated.
"Tax Assumptions" shall have the meaning given to such term
in Section 18B(a) hereof.
"Term" means the period of 15 years and 11 months commencing
on the Acceptance Date and ending on the Expiration Date.
"Termination Date" means the last day of the Term.
"Third Party Purchaser" means a purchaser of one or more of
the Properties which purchaser is financially capable of
purchasing such Property or Properties, is selected by Lessee, is
approved by Lessor and is not an Affiliate or a Subsidiary of
Lessee.
"Transaction Costs" means all the costs, fees and expenses
referenced in Section 27 hereof.
"Transaction Documents" means this Agreement, the Lease
Supplement, the Memorandum of Lease, each Deed, each Warranty
Xxxx of Sale, the Guaranty, the Purchase Agreement, and each
Uniform Commercial Code financing statement as deemed appropriate
by Lessor or its counsel, whether heretofore, now or hereafter
executed.
"Tribunal" means any state, commonwealth, federal, foreign,
territorial, or other court or government body, subdivision,
agency, department, commission, board, bureau or instrumentality
of a governmental body.
"Voluntary Enhancement" shall have the meaning given to such
term in Section 12 hereof.
"Warranty Xxxx of Sale" means each warranty xxxx of sale
relating to the item of Equipment or other property specifically
referenced therein, duly executed by the appropriate Seller in
favor of Lessor and dated the Acceptance Date.
2. Agreement for Sale of Properties; Agreement for Lease
of Properties; Covenant of Quiet Enjoyment.
Pursuant to the Purchase Agreement, and subject to, and upon
all of the terms and conditions of this Agreement, Lessor hereby
agrees to purchase the Properties from the Seller and to lease
11
the Properties to Lessee (and Lessee hereby agrees to lease the
Properties from Lessor) for the Term. Provided that no Event of
Default has occurred and is continuing, Lessor agrees that it
shall not interfere with Lessee's quiet enjoyment and use of the
Properties during the Term.
3. Conditions Precedent.
The obligations of Lessor to purchase the Properties and to
lease the same to Lessee and enter into the Overall Transaction
are subject to:
(a) Principal Conditions.
The delivery to Lessor on or prior to the Acceptance
Date of the following documents each in form and substance
satisfactory to Lessor and the satisfaction of such other
conditions specified in the following provisions:
(i) each of the Transaction Documents (A) shall have
been duly authorized and executed by the parties thereto and
delivered, (B) shall be in full force and effect and (C) to the
extent deemed necessary by Lessor, shall have been filed with the
appropriate filing offices; provided, this subsection (i) shall
not apply to the authorization, execution and delivery of
Transaction Documents by Lessor;
(ii) an officer's certificate from Lessee (A)
certifying Lessee's articles of incorporation, by-laws and
resolutions, with such resolutions authorizing the Overall
Transaction and Lessee's execution, delivery and performance of
this Agreement and the other Transaction Documents to which
Lessee is a party, (B) containing an incumbency certification of
Lessee with the name(s), title(s) and specimen signature(s) of
the person or persons authorized on behalf of Lessee to execute
this Agreement and the other Transaction Documents to which
Lessee is a party, (C) stating that no material adverse change
has occurred in the condition of Lessee (financial or otherwise)
since June 30, 1996 which would impair the ability of Lessee to
pay and perform its obligations under any Transaction Document
and (D) stating that no Default or Event of Default shall have
occurred and be continuing as of the date hereof;
(iii) an officer's certificate from Guarantor (A)
certifying Guarantor's articles of incorporation, by-laws and
resolutions, with such resolutions authorizing the Overall
Transaction and Guarantor's execution, delivery and performance
of this Agreement and the other Transaction Documents to which
Guarantor is a party, (B) containing an incumbency certification
of Guarantor with the name(s), title(s) and specimen signature(s)
of the person or persons authorized on behalf of Guarantor to
execute this Agreement and the other Transaction Documents to
which Guarantor is a party, (C) stating that no material adverse
change has occurred in the condition of Guarantor (financial or
otherwise) since June 30, 1996 which would impair the ability of
Guarantor to pay and perform its obligations under any
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Transaction Document and (D) stating that no Default or Event of
Default shall have occurred and be continuing as of the date
hereof;
(iv) a written opinion of counsel for Lessee and
Guarantor;
(v) certificates of insurance and an insurance
broker's letter evidencing the coverages required under Section
17 hereof;
(vi) Uniform Commercial Code Lien searches, Tax Lien
searches and judgment Lien searches as deemed necessary or
appropriate by Lessor shall be conducted by a nationally
recognized search company and the Liens referenced in such
searches which are objectionable to Lessor shall either be
removed or otherwise handled in a manner satisfactory to Lessor;
(vii) good standing certificates from the Secretary
of State of Lessee's state of incorporation, the state of
Lessee's principal place of business and each state where a
Property is located;
(viii) good standing certificates from the Secretary
of State of Guarantor's state of incorporation and the state of
Guarantor's principal place of business;
(ix) an appraisal of each Property conducted by an
appraiser mutually acceptable to the Lessor and the Lessee;
(x) title insurance commitments to issue policies
respecting each Property in favor of Lessor from a title
insurance company acceptable to Lessor, with such title
exceptions thereto as are acceptable to Lessor;
(xi) a FIRPTA affidavit from the Seller in compliance
with the Code;
(xii) an environmental site assessment respecting
each Property prepared by GZA GeoEnvironmental, Inc.
(xiii) a survey (with a flood hazard certification)
respecting each Property prepared by an independent recognized
professional acceptable to Lessor; and
(xiv) invoices for the various Transaction Costs
which constitute a component of Acquisition Cost.
(b) Additional Conditions.
The fulfillment to the satisfaction of Lessor as of the
Acceptance Date of the conditions specified in the following
provisions:
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(i) the absence on the Acceptance Date of (A) any Lien
on any Property, other than any Permitted Lien and (B) any
Default or Event of Default (both before and after giving effect
to the transactions contemplated by the Transaction Documents);
(ii) the aggregate Acquisition Cost will not exceed the
Maximum Cost;
(iii) the Acceptance Date shall be a date between
and inclusive of the date hereof and the Acquisition Expiration
Date;
(iv) Lessee shall have paid all fees and expenses due
and owing with respect to the Overall Transaction on or prior to
the Acceptance Date, including without limitation all necessary
recording fees, documentary stamp Taxes and similar amounts with
respect to the acquisition of the Properties by Lessor;
(v) title to each Property shall conform to the
representations and warranties set forth in Section 21(s) hereof;
(vi) all necessary Governmental Actions, in each case
required by any Law or regulation enacted, imposed or adopted on
or prior to each such date or by any change in facts or
circumstances on or prior to each such date, shall have been
obtained or made and be in full force and effect;
(vii) all consents, licenses, permits,
authorizations and assignments required as of the Acceptance Date
by all Legal Requirements or pursuant to the terms of any
contract, indenture, instrument or agreement respecting any
Property (including without limitation for the acquisition,
ownership, occupancy, operation, leasing or subleasing of any
Property) shall have been obtained and shall be in full force and
effect;
(viii) no action or proceeding shall have been
instituted, nor shall any action or proceeding be overtly
threatened, before any Governmental Authority, nor shall any
order, judgment or decree have been issued or proposed to be
issued by any Governmental Authority or to set aside, restrain,
enjoin or prevent the full performance of this Agreement, any
other Transaction Document or any transaction contemplated hereby
or thereby; and
(ix) Lessor shall have received such other documents,
appraisals, certificates, financing statements and other items,
in form and substance satisfactory to Lessor, as Lessor may
require.
4. Acceptance of the Properties.
Lessor shall not be liable to Lessee for any failure or
delay in obtaining either the Properties or access thereto.
Lessor hereby appoints Lessee as Lessor's agent for the sole and
14
limited purpose of accepting the Properties. On the Acceptance
Date Lessee shall promptly inspect each Property, and unless
Lessee gives Lessor prompt written notice of any defect in or
other proper objection to any Property, Lessee shall promptly
upon completion of such inspection execute and deliver to Lessor
the Lease Supplement, dated the Acceptance Date. Lessor shall
also pay to each Seller the Acquisition Cost of such Seller's
Property or Properties to the extent all of the conditions
precedent specified in Section 3 hereof have been fulfilled to
Lessor's reasonable satisfaction. The execution of the Lease
Supplement by Lessee shall evidence that (a) each Property has
been irrevocably accepted under this Agreement for all purposes,
upon and subject to all of the terms, conditions and provisions
hereof and (b) as between Lessor and Lessee, (i) each Property
has been inspected to Lessee's satisfaction and is in suitable
form for its purpose, is in good operating order, repair and
condition, (iii) is of a size, design, capacity, manufacture and
construction acceptable to Lessee and (iv) is duly certified or
licensed by any Governmental Authority which is charged with
issuing such certificates or licenses.
5. Term; Early Termination.
(a) Term.
The Term for the Properties shall commence on the
Acceptance Date, and unless sooner terminated in accordance with
the provisions of this Agreement, shall end on the Expiration
Date.
(b) Early Termination.
On any Basic Payment Date on or after the fifth annual
anniversary of the Acceptance Date, Lessee may terminate this
Agreement as to all but not less than all of the Properties upon
satisfaction of the following conditions: (i) on such designated
early termination date, no Default or Event of Default shall have
occurred and be continuing, (ii) the President, any Vice
President, the Treasurer, the Chief Financial Officer or any
other officer reasonably suitable to Lessor shall have delivered
to Lessor a certificate (in form and substance reasonably
satisfactory to Lessor) certifying that the Properties are
obsolete or surplus to the needs of Lessee, (iii) Lessee shall
arrange for the purchase of the Properties by one or more Third
Party Purchasers, (iv) on such designated early termination date,
Lessor shall receive: from (A) each appropriate Third Party
Purchaser, the previously agreed upon purchase price, (B) Lessee,
an amount by which the greater of Casualty Loss Value or Fair
Market Sales Value for each individual Property exceeds the
purchase price for such individual Property and (C) Lessee, all
Basic Payments and Supplemental Payments then due and owing or
accrued, (v) Lessee shall pay all Sales Expenses in connection
with such sale of the Properties and (vi) Lessee shall surrender
each Property to the appropriate Third Party Purchaser and
deliver to such Third Party Purchaser the various permits,
certificates, licenses, documents and other items, all in
accordance with the provisions of Section 6 hereof as if such
Third Party Purchaser were Lessor. To the extent the purchase
price specified in Section (b)(iv)(A) hereof for any Property
exceeds the Casualty Loss Value for such Property on such date,
Lessor shall retain the excess. Upon Lessor's receipt and
verification of payment of the above-referenced amounts, Lessor
15
shall, at Lessee's cost and expense, execute and deliver special
warranty deeds and special warranty bills of sale, as
appropriate, in order to convey to the applicable Third Party
Purchaser the Property or Properties purchased by such entity on
an as-is, where-is and with all faults basis, without recourse or
representation or warranty of any kind except as to the absence
of Liens created by or through Lessor.
(c) Early Purchase Option.
On July 1, 2006, Lessee may purchase all but not less
than all of the Properties and terminate this Agreement upon
satisfaction of the following conditions: (i) on such designated
early purchase date, no Default or Event of Default shall have
occurred and be continuing, (ii) Lessee shall purchase all but
not less than all of the Properties for an amount equal to
70.35483142% of the aggregate Acquisition Cost, (iii) on such
designated early purchase date, Lessor shall receive from Lessee
the purchase price referenced in Section 5(c)(ii) and all Basic
Payments and Supplemental Payments then due and owing or accrued
and (iv) Lessee shall pay all Sales Expenses in connection with
the sale of the Properties by Lessor to Lessee. Upon Lessor's
receipt and verification of payment of the above-referenced
amounts, Lessor shall, at Lessee's cost and expense (provided,
however, Lessor shall pay the costs and expenses of Lessor's
legal counsel), execute and deliver special warranty deeds and
special warranty bills of sale, as appropriate, in order to
convey to Lessee the Properties on an as-is, where-is and with
all faults basis, without recourse or representation or warranty
of any kind except as to the absence of Liens created by or
through Lessor.
6. Termination Date Delivery of the Properties.
If Lessee shall not have purchased the Properties in
accordance with Sections 5(c) or 29 hereof or caused the
Properties to be sold pursuant to Section 5(b) hereof then in any
such case on the Termination Date Lessee shall surrender the
Properties to Lessor. The terms of this Section 6 shall apply to
Lessee's surrender of the Properties to Lessor or a Third Party
Purchaser in accordance with the terms of this Agreement,
including without limitation at the end of the Term, pursuant to
Section 5(b) hereof, in connection with the exercise of remedies
with respect to an Event of Default or otherwise. At the time of
such surrender to Lessor or a Third Party Purchaser, each
Property (and each Part) shall (a) be in good operating order,
and in the repair and condition as when originally accepted by
Lessee for purposes of this Agreement, ordinary wear and tear
from proper use thereof excepted, and refurbished where
necessary, (b) be capable of being immediately operated by
Lessor, a Third Party Purchaser or third party lessee without
further inspection, repair, replacement, alteration or
improvement, (c) be in accordance and compliance with any and all
Legal Requirements, (d) be free and clear of all Liens, other
than those granted or placed thereon by Lessor, and (e) be in
compliance with the requirements of Sections 10, 11 and 12
hereof. Until all the Properties are delivered to Lessor or a
Third Party Purchaser, as appropriate, as provided in this
Section 6, Lessee shall pay Lessor an amount equal to 110% of the
daily average of the Basic Payments during the Term as determined
by Lessor, on the dates requested by Lessor and shall pay Lessor
the pro rata portion of such amount which is accrued but unpaid
16
on the date all the Properties are surrendered to Lessor or a
Third Party Purchaser; as appropriate; provided, however, this
provision is not intended to grant Lessee a right to continued
possession of any Property after the specified delivery date
therefor.
In the event that Lessee is obligated under this Agreement
to surrender the Properties to Lessor or a Third Party Purchaser,
then in either case on the applicable date Lessee shall provide
Lessor or such Third Party Purchaser with (x) all permits,
certificates of occupancy, governmental licenses and
authorizations legally transferable and assignable and necessary
to use, operate, repair, access and maintain each such Property
for its intended purpose and (y) such manuals, permits,
easements, licenses, rights-of-way and other rights and
privileges in the nature of an easement as are reasonably
necessary or desirable in connection with the use, operation,
repair, access to or maintenance of each such Property for its
intended purpose or otherwise as Lessor or such Third Party
Purchaser shall reasonably request. All assignments, licenses,
easements, agreements and other deliveries required by clauses
(x) and (y) of this paragraph shall be in form reasonably
satisfactory to Lessor or such Third Party Purchaser, as
appropriate, and shall be assignable (including without
limitation both primary assignments and assignments given in the
nature of security) without payment of any fee, cost or other
charge.
7. Payments.
(a) Basic Payments.
Lessee hereby agrees to pay Lessor Basic Payments for
the Properties throughout the Term, in consecutive s
installments, with each installment during the Term in an amount
equal to the Basic Payment Factor set forth on Schedule A hereto
multiplied by the Acquisition Cost (or, as of the date of this
Agreement, in such dollar amounts as are set forth on Schedule
A-1 hereto). Each Basic Payment shall be payable in advance, on
the first day of the Basic Payment Period to which such Basic
Payment corresponds.
(b) Supplemental Payments.
Lessee agrees to pay Lessor, or to whomsoever shall be
entitled thereto as expressly provided herein, all Supplemental
Payments promptly as the same shall become due and owing, and in
the event of any failure on the part of Lessee to pay any such
Supplemental Payment hereunder Lessor shall have all rights,
powers and remedies provided for herein or by Law or equity or
otherwise in the case of nonpayment of Basic Payments.
(c) Method of Payment.
If the date that any Payment is due is other than a
Business Day the Payment otherwise payable on such date shall be
payable on the next succeeding Business Day. All Basic Payments
and Supplemental Payments required to be made by Lessee to Lessor
hereunder shall be made in good funds and in United States
dollars. In the event of any assignment to an Assignee or
collateral assignment pursuant to Section 14(b) hereof (if
17
requested at such time by Lessor), all payments which are
assigned to such Assignee or which Lessor certifies are otherwise
matched with an obligation of Lessor to such collateral assignee
(whether Basic Payments, Supplemental Payments or otherwise)
shall be paid in the same manner specified herein for payments to
Lessor at such address as shall be designated by such Assignee or
collateral assignee. Time is of the essence in connection with
the payment of Basic Payments and Supplemental Payments.
8. Net Lease.
This Agreement is a net lease and Lessee acknowledges and
agrees that Lessee's obligations hereunder, including without
limitation its obligations to pay all Payments payable hereunder,
shall be absolute and unconditional under any and all
circumstances and shall be paid without notice or demand and
without any abatement, reduction, diminution, setoff, defense,
counterclaim or recoupment whatsoever, including without
limitation any abatement, reduction, diminution, setoff, defense,
counterclaim or recoupment due or alleged to be due to, or by
reason of, any past, present or future Claims which Lessee may
have against Lessor, any Assignee, any collateral assignee of
Lessor pursuant to Section 14(b) hereof the manufacturer of or
contractor with respect to any item of any Property, any Part of
any Property, or any other Person for any reason whatsoever; nor,
except as otherwise expressly provided herein, shall this
Agreement terminate, or the obligations of Lessee be otherwise
affected, by reason of any defect in any item of any Property,
any Part of any Property, the condition, design, operation or
fitness for use thereof, any damage to, or any loss or
destruction of, any item of any Property, any Part of any
Property, or any Liens or rights of others with respect to any
item of any Property, any Part of any Property, any prohibition
or interruption of or other restriction against Lessee's use,
operation or possession of any item of any Property, any Part of
any Property, for any reason whatsoever, or any interference with
such use, operation or possession by any Person or entity, or by
reason of any failure by Lessor to perform any of its obligations
herein contained, or by reason of any other indebtedness or
liability, howsoever and whenever arising, or Lessor or of any
Assignee or collateral assignee of Lessor's interests pursuant to
Section 14(b) hereof or of Lessee to any other Person, or by
reason of any insolvency, bankruptcy or similar proceedings by or
against any Person or for any other reason whatsoever, whether
similar or dissimilar to any of the foregoing, any present or
future Law to the contrary notwithstanding; it being the
intention of the parties hereto that the Basic Payments and
Supplemental Payments payable by Lessee hereunder shall continue
to be payable in all events and in the manner and at the times
herein provided, without notice or demand, unless the obligation
to pay the same shall be terminated pursuant to the express
provisions of this Agreement.
9. Lessor's Title; True Lease.
(a) Lessor's Title.
Title to the Properties shall at all times remain in
Lessor and at no time during the Term shall title become vested
in Lessee.
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(b) True Lease.
This Agreement is a lease intended as a true lease and
not as a lease intended as security. The parties hereto intend
Lessor to be treated as the owner of the Properties for all
purposes, including without limitation for federal and state
income Tax purposes, bankruptcy purposes, commercial Law purposes
and real estate Law purposes. Lessee will make no Claim nor
assert any right to the Properties or any component thereof
inconsistent with Lessor's ownership thereof and will make
appropriate entries upon its books and records reflecting
Lessor's ownership of the Properties and each component thereof.
10. Use of the Properties; Compliance with Laws.
Lessee agrees that each Property will be used, maintained,
occupied and operated only (a) for purposes or operations in the
ordinary course of its business as a Permitted Facility, (b) in
accordance with all Legal Requirements, (c) in the manner set
forth in, and in accordance with, the terms, conditions and
provisions of the insurance policy or policies providing the
coverages specified in Section 17 hereof and (d) otherwise in a
manner sufficient to preserve any warranty Claim with respect to
such Property. To the extent that any Legal Requirement mandates
the licensing or certification of an operator of any operation or
procedure at any Property, each such operator shall be duly
licensed and currently certified and qualified. The Properties
will at all times be and remain in the control of Lessee except
as Lessee's relinquishment of control is required for
maintenance. Without Lessor's consent, which consent shall not be
unreasonably withheld, no component of any Property shall be
relocated from the location of such Property identified in the
legal description of the Land applicable thereto in the Lease
Supplement. Lessee will not attach or incorporate any Part of
any Property to or in any other item of equipment or personal
property or to or in any real property (except the Land and/or
Improvements identified in the Lease Supplement in which the
associated Land is also described) in a manner that could give
rise to the assertion of any Lien on such Part of the Property by
reason of such attachment or the assertion of a Claim that such
Part of the Property has become a fixture and is subject to a
Lien in favor of a third party.
In no event shall Lessee use or operate any Property, or
knowingly permit any Property to be used or operated, for any
purpose for which such Property is not designed or reasonably
suitable, or in any fashion that may reasonably subject such
Property to any Liens, other than Permitted Liens.
11. Maintenance and Repair.
(a) General Maintenance Standard.
Lessee, at its sole cost and expense, shall maintain
each Property in good condition, repair and working order
(ordinary wear and tear excepted) and in the repair and condition
as when originally delivered to Lessor and make all necessary
repairs thereto and replacements thereof, of every kind and
nature whatsoever, whether interior or exterior, ordinary or
19
extraordinary, structural or nonstructural or foreseen or
unforeseen, in each case as required by all Legal Requirements,
the terms, conditions and provisions of the insurance policy or
policies providing the coverages specified in Section 17 hereof
and manufacturer's specifications and standards and on a basis
consistent with the operation and maintenance of properties or
equipment comparable in type and function to the applicable
Property, such that such Property is capable of being immediately
utilized by a third party and in compliance with standard
industry practice.
(b) Replacement.
If any component of any Property becomes worn out,
lost, destroyed, damaged beyond repair or otherwise permanently
rendered unfit for use, Lessee, at its own expense, will within a
reasonable time replace such component with a replacement
component which is free and clear of all Liens (other than
Permitted Liens) and has a value, utility and useful life at
least equal to the component replaced (assuming the component
replaced had been maintained and repaired in accordance with the
requirements of this Lease) (each of the foregoing, a
"Replacement"). All Replacements shall immediately become the
property of (and title thereto shall vest in) Lessor and shall be
deemed incorporated in such Property and subject to the terms of
this Lease as if originally leased hereunder.
(c) Additional Appraisals.
Lessee shall cause to be delivered to Lessor one or
more Appraisals (or reappraisals of Properties) subsequent to the
date hereof from time to time as Lessor may request to the extent
(i) Lessor is required pursuant to any applicable Legal
Requirement to obtain such Appraisals (or reappraisals), (ii)
upon the occurrence of any Event of Default or (iii) Lessor, in
its reasonable discretion, deems (A) that there has been a
material adverse change in the condition of Guarantor (financial
or otherwise) as reflected in the financial statements of
Guarantor delivered pursuant to Section 6(a) of the Guaranty or
(B) that the Properties have not been maintained in compliance
with Section 11(a) hereof; provided, however, that Lessor shall
bear the expense of any appraisal or reappraisal delivered
pursuant to subsection (i) of this paragraph (c) and Lessee shall
bear the expense of any appraisal or reappraisal delivered
pursuant to subsection (ii) or (iii) of this paragraph (c).
(d) No Lessor Maintenance Obligation.
Lessor shall under no circumstances be required to
build any improvements or install any equipment on any Property,
make any repairs, replacements, alterations or renewals of any
nature or description to any Property, make any expenditure
whatsoever in connection with this Agreement or maintain any
Property in any way. Lessor shall not be required to maintain,
repair or rebuild all or any Part of any Property, and Lessee
waives the right to (i) require Lessor to maintain, repair, or
rebuild all or any Part of any Property, or (ii) make repairs at
20
the expense of Lessor pursuant to any Legal Requirement, the
terms, conditions and provisions of the insurance policy or
policies providing the coverages specified in Section 17 hereof,
any contract, agreement, covenant, condition or restriction at
any time in effect.
12. Required Alterations; Voluntary Enhancements.
In case any Part of any Property is required to be altered
or modified, or any addition is required with respect to any
Property in order to comply with any Legal Requirement (each of
the foregoing may be referred to as a "Required Alteration"),
Lessee agrees to make such Required Alteration at its own
expense. Such Required Alteration shall immediately be and
become the property of Lessor and subject to the terms of this
Agreement. Lessee agrees that, within 30 days after the close of
any calendar quarter in which Lessee has made any material
Required Alteration, Lessee will give written notice thereof to
Lessor describing, in reasonable detail, the Required Alteration
and specifying the cost thereof and the date or dates when made.
All Replacements shall be considered accessions to the applicable
Property and shall immediately, without further act, be and
become the property of Lessor and Part of such Property. At the
time title to any Replacement has become vested in Lessor
pursuant to the provisions of this Section 12, title to such Part
replaced thereby shall thereupon vest in Lessee; provided,
however, that in no event shall any Part which cannot be removed
without causing damage to any Property vest in Lessee. Lessee
may, without the prior written consent of Lessor, affix, install
or make any improvement or addition thereto other than a Required
Alteration or Replacement (each of the foregoing may be referred
to as a "Voluntary Enhancement"); provided, that a Voluntary
Enhancement may only be made to a Property if such Voluntary
Enhancement does not reduce the value, utility or useful life of
such Property. Voluntary Enhancements shall be considered
accessions to the applicable Property and shall immediately
without further act, be and become the property of Lessor and
Part of the applicable Property.
13. Inspection; Reports; Change of Chief Executive Office
and/or Name.
(a) Inspection.
Lessor and any agent, designee or other Person acting
at Lessor's direction (and after receiving the consent of Lessee
as to such agent, designee or other Person, such consent not to
be unreasonably withheld) shall have the right on any Business
Day during normal business hours and upon reasonable notice to
Lessee to inspect (i) the Properties and (ii) Lessee's records
with respect thereto; provided, however, unless a Default or
Event of Default shall have occurred and be continuing, neither
Lessor nor any other such Person acting on Lessor's behalf will
conduct any such inspection which is reasonably likely to disrupt
Lessee's business operations. Unless a Default or Event of
Default shall have occurred and be continuing, Lessor and any
other such Person acting on Lessor's behalf shall only conduct
such inspections, or cause such inspections to be conducted, as
Lessor or any other such Person acting on Lessor's behalf
reasonably deems necessary or appropriate to confirm the
existence and proper maintenance of the Properties and to
otherwise protect the interests of Lessor regarding the
Properties. Upon receipt of notice from Lessor or any other such
21
Person acting on Lessor's behalf requesting to inspect one or
more Properties, Lessee shall make (with reasonable promptness)
all necessary arrangements to facilitate the inspection.
(b) Change of Chief Executive Office and/or Name.
Lessee shall give Lessor no less than thirty (30) days
prior written notice of any change by Lessee of (i) its chief
executive office from the address referenced therefor in this
Agreement and/or (ii) its name. Lessee shall stipulate the new
address and/or its new name in such notice.
14. Sublease; Assignment; Consolidation and Merger.
(a) By Lessee.
SUBJECT TO THE PROVISO TO THIS SECTION 14(a) AND
SECTION 14(c) HEREOF, LESSEE WILL NOT, WITHOUT THE PRIOR WRITTEN
CONSENT OF LESSOR (WHICH CONSENT SHALL NOT BE UNREASONABLY
WITHHELD), SUBLEASE, ASSIGN, TRANSFER OR ENCUMBER ITS RIGHTS OR
OBLIGATIONS HEREUNDER AND ANY ATTEMPTED SUBLEASE, ASSIGNMENT,
TRANSFER OR ENCUMBRANCE BY LESSEE WITHOUT SUCH LESSOR CONSENT
SHALL BE NULL AND VOID; PROVIDED, HOWEVER, THAT LESSEE MAY,
WITHOUT LESSOR'S PRIOR WRITTEN CONSENT, SUBLEASE TO ANY AFFILIATE
OF LESSEE ALL OR ANY OF THE PROPERTIES THEN SUBJECT TO THIS
AGREEMENT SO LONG AS SUCH SUBLEASE SHALL BE A PERMITTED SUBLEASE.
In the event Lessor provides its written consent to a
sublease to any Person that is not an Affiliate of Lessee, such
sublease must be a Permitted Sublease, no such sublease by Lessee
will reduce any of the obligations of Lessee hereunder or the
rights of Lessor hereunder, and all of the obligations of Lessee
hereunder shall be and remain primary and shall continue in full
force and effect as the obligations of a principal and not of a
guarantor or surety. Lessee shall furnish to Lessor not later
than the effective date of such sublease (i) new insurance
certificates from Lessee's insurance broker in form and substance
satisfactory to Lessor, indicating compliance with the provisions
of this Section 14(a) and (ii) an officer's certificate of Lessee
with the name and principal place of business of such sublessee.
Lessee shall, and shall cause such sublessee to, execute and
deliver such instruments to the appropriate Person for filing and
to deliver copies of the same to Lessor (including without
limitation sublease agreements and Uniform Commercial Code
financing statements) as may be requested by Lessor in connection
with any such sublease.
22
(b) By Lessor.
Without Lessee's prior consent, Lessor may at any time
(i) assign, sell or transfer, in whole or in part, Lessor's
right, title and interest in, to and under this Agreement, the
other Transaction Documents and the other related documents,
instruments and agreements, including without limitation the
right to receive any or all Payments payable under this
Agreement, the other Transaction Documents and the other related
documents, instruments and agreements with respect to the
Properties, to any Affiliate of Lessor and (ii) sell or transfer
all of Lessor's right, title and interest in and to the
Properties to any Affiliate of Lessor. Except as otherwise
provided in the preceding sentence, with Lessee's prior written
consent (which consent shall not be unreasonably withheld),
Lessor may at any time (i) assign, sell or transfer, in whole or
in part, Lessor's right, title and interest in, to and under this
Agreement, the other Transaction Documents and the other related
documents, instruments and agreements, including without
limitation the right to receive any or all Payments payable under
this Agreement, the other Transaction Documents and the other
related documents, instruments and agreements with respect to the
Properties, to any Person, and (ii) sell or transfer all of
Lessor's right, title and interest in and to the Properties to
any Person. Each such Assignee shall have all of Lessor's right,
title and interest hereunder to the extent that the same relate
to the interest of the Assignee covered by the assignment,
including without limitation: the right to receive such
Assignee's portion of the Basic Payments payable for the
Properties for all Basic Payment Periods commencing on or after
the date of such assignment; the right to receive such Assignee's
portion of the Supplemental Payments which are payable as a
result of acts or events which occur on or after the date of such
assignment; and the right to enforce, either in such Assignee's
name or in Lessor's name, but without cost or expense to Lessor,
all of Lessor's rights hereunder assigned to such Assignee. Such
Assignee may re-assign all or a portion of such right, title and
interest, provided that any such re-assignment shall be subject
to the same terms and conditions set forth in this Section. Any
assignment or re-assignment shall be subject to Lessee's rights
hereunder so long as no Event of Default has occurred and is
continuing hereunder. Lessee shall be under no obligation to any
Assignee except upon written notice of such assignment from
Lessor. Upon written notice from Lessor to Lessee of such
assignment, Lessee agrees to pay the Basic Payments and
Supplemental Payments to the Assignee, as the case may be, in
accordance with the terms of this Agreement supplemented by the
instructions specified in such notice, to give all notices which
are required or permitted to be given by Lessee to Lessor
hereunder to the Person(s) specified to receive the same in such
written notice of assignment and to otherwise comply with all
reasonable notices, directions and demands which may be given by
such Assignee in accordance with the provisions of this
Agreement. Lessee agrees to deliver to any Assignee an
acknowledgment of the assignment [together with an opinion of
counsel to Lessee regarding the validity and enforceability of
this Agreement against Lessee, incumbency certificate of Lessee
and such authorizing resolutions as such Assignee may reasonably
request; provided, however, all out of pocket fees and expenses
incurred by Lessee in connection with the production or delivery
of the foregoing documents referenced previously in this sentence
shall be for the account of Lessor or such Assignee, as agreed to
by such parties.
23
In addition to the foregoing, with respect to any
subsequent leveraging of the transaction evidenced by the
Transaction Documents, Lessor at any time and from time to time
may (A) without Lessee's consent, collaterally assign, grant a
security interest in and/or mortgage to any Affiliate of Lessor
in whole or in part Lessor's right, title and interest in, to and
under the documents, rights, Properties and other items
referenced above in Section 14(b)(i) and (b)(ii) and (B) with
Lessee's prior written consent (which consents shall not be
unreasonably withheld), collaterally assign, grant a security
interest in and/or mortgage to any other Person in whole or in
part Lessor's right, title and interest in, to and under the
documents, rights, Properties and other items referenced above in
Section 14(b)(i) and (b)(ii). Lessee agrees to observe the terms
and conditions of the documentation regarding any such collateral
assignment, grant of a security interest and/or mortgage (to the
extent the right, title and interest of Lessee under the
Transaction Documents and with respect to the Properties are not
materially and adversely affected), including without limitation
the provision of notices to any collateral assignee or secured
party and (regarding the insurance coverages required pursuant to
Section 17 hereof) the addition of such collateral assignee or
secured party as a loss payee and additional insured as
reasonably requested by Lessor and such collateral assignee.
(c) Consolidation and Merger by Lessee.
Lessee shall not consolidate with or merge into any
other corporation or convey, transfer or lease substantially all
of its assets as an entirety to any Person unless:
(i) Lessee is the surviving entity of any such
consolidation or merger and the requirements of Sections
14(c)(ii)(B)-(D) are satisfied; or
(ii) (A) the corporation formed by such
consolidation or into which Lessee is merged, or the Person which
acquires by conveyance, transfer or lease substantially all of
the assets of Lessee as an entirety, shall be a solvent
corporation organized and existing under the Laws of the United
States of America or any state or the District of Columbia and
shall execute and deliver to Lessor an agreement containing an
effective assumption by such successor, transferee or lessee
corporation of the due and punctual performance and observance of
each covenant and condition of this Agreement; provided any such
consolidation, merger, acquisition by conveyance, transfer or
lease of substantially all of its assets shall not release Lessee
from its obligations under this Agreement, which obligations
shall at all times remain primary and direct;
(B) immediately prior to and after giving
effect to such transaction, no Default or Event of Default shall
have occurred and be continuing;
(C) immediately after giving effect to such
transaction, the consolidated tangible net worth (calculated on
the same basis as the Consolidated Tangible Net Worth of Lessee)
of the corporation formed by such consolidation or into which
24
Lessee is merged or the Person which acquired by conveyance,
transfer or lease substantially all the assets of Lessee as an
entirety, as the case may be, shall not be less than 100% of the
Consolidated Tangible Net Worth of Lessee as reflected in
Lessee's then most recent audited financial statements furnished
by Lessee pursuant hereto prior to such consolidation, merger,
conveyance, transfer or lease; and
(D) Lessee shall have delivered to Lessor a
certificate signed by the President, any Vice President, its
Chief Financial Officer, its Treasurer or any other officer
reasonably suitable to Lessor, satisfactory in form and substance
to Lessor, stating that such consolidation, merger, conveyance,
transfer or lease and the assumption agreement mentioned in
clause 14(c)(ii)(A) above comply with this Section 14(c) and that
all conditions precedent herein provided for relating to such
transaction have been complied with.
Upon any consolidation or merger in which Lessee is not
the surviving corporation, or any conveyance, transfer or lease
of substantially all the assets of Lessee as an entirety in
accordance with this Section 14(c), the successor corporation
formed by such consolidation or into which Lessee is merged or to
which such conveyance, transfer or lease is made shall succeed
to, and be substituted for (but without release of Lessee to the
extent the provisions to clause 14(c)(ii)(A) above is
applicable), and may exercise every right and power of, Lessee
under this Agreement with the same effect as if such successor
corporation had been named as a Lessee herein.
15. Liens.
Lessee will not directly or indirectly create, incur, assume
or suffer to exist any Lien on or with respect to any Property or
Lessor's title thereof, except for Permitted Liens. Lessee, at
its own expense, will promptly pay, satisfy and otherwise take
such actions as may be necessary to keep each Property free and
clear of, and to duly discharge or eliminate or bond in a manner
satisfactory to Lessor, any such Lien not excepted above if the
same shall arise at any time. Lessee will notify Lessor in
writing promptly upon becoming aware of any Tax or Lien (other
than any Permitted Lien) that shall attach to any Property and of
the full particulars thereof. Lessee shall pay, and save Lessor
harmless against, any and all losses, judgments, decrees and
costs (including without limitation all reasonable attorneys'
fees and expenses) in connection with any Permitted Contest and
shall promptly after the final settlement, compromise or
determination (including without limitation any appeals) of such
contest, fully pay and discharge the amounts which shall be
levied, assessed, charged or imposed or be determined to be
payable therein or in connection therewith, together with all
penalties, fines, interests, costs and expenses thereof or in
connection therewith, and perform all acts, the performance of
which shall be ordered or decreed as a result thereof.
Lessor will not directly or indirectly create, incur, assume
or suffer to exist any Lessor's Liens on or with respect to any
Property attributable to it, and Lessor agrees that it will, at
25
its own cost and expense, take such action as may be necessary to
duly discharge and satisfy in full any such Lessor's Liens (by
bonding or otherwise, so long as the Lessee's operation and use
of such Property are not impaired); provided, that Lessor may
contest any such Lessor's Lien in good faith by appropriate
proceedings so long as such proceedings do not involve any
material danger of the sale, forfeiture or loss of any Property
or any interest therein and do not interfere with the use,
operation, or possession of any Property by the Lessee under this
Agreement; provided, further, that the following Liens shall be
permitted pursuant to this Agreement and the Lessor shall have no
duty to discharge and/or satisfy in full such Liens: (a) any
assignment, conveyance or other transfer by Lessor to any
Affiliate of Lessor of any right, title or interest of Lessor in
and to any Property or any Transaction Document; (b) any
collateral assignment, security interest or other similar Lien
granted by Lessor or an Affiliate of Lessor to an additional
Affiliate of Lessor respecting any right, title or interest of
such grantor in and to any Property or any Transaction Document;
and/or (c) any assignment conveyance or other transfer by Lessor
in accordance with the terms of Section 14(b) of this Agreement.
16. Loss, Damage or Destruction.
(a) Risk of Loss, Damage or Destruction.
Lessee hereby assumes all risk of loss, damage, theft,
taking, destruction, confiscation, requisition or commandeering,
partial or complete, of or to the Properties, however caused or
occasioned, such risk to be borne by Lessee with respect to the
Properties from the Acceptance Date, and continuing until the
Properties have been surrendered to Lessor or one ore more Third
Party Purchasers, as the case may be, in accordance with the
provisions of Section 6 hereof or have been purchased by Lessee
in accordance with the provisions of Sections 5(c) or 29 hereof.
Lessee agrees that no occurrence specified in the preceding
sentence shall impair, in whole or in part, any obligation of
Lessee under this Agreement, including without limitation the
obligation to make Payments.
(b) Casualty and Condemnation with Respect to the
Properties.
(i) Upon the occurrence of any Casualty or
Condemnation with respect to any Property during the Term, Lessee
shall forthwith (and in any event within 10 days after such
occurrence) give Lessor written notice of such Casualty or
Condemnation and of its election either to restore such Property
pursuant to Section 16(b)(ii) hereof and otherwise consistent
with the provisions of this Section 16(b) hereof or to pay the
Casualty Loss Value for such Property and terminate this
Agreement with respect to such Property pursuant to Section
16(b)(iii) hereof and otherwise consistent with the provisions of
this Section 16(b), provided, that Lessee shall not have the
right to elect restoration of such Property if a Default or Event
of Default shall have occurred and be continuing and in such
circumstance, Lessee shall be deemed to have elected the option
set forth in Section 16(b)(iii) hereof.
26
(ii) If pursuant to this Section 16(b) this Agreement
shall continue in full force and effect following a Casualty or
Condemnation with respect to the affected Property, Lessee shall,
at its sole cost and expense and using, if available, the
proceeds of any award, compensation or insurance with respect to
such Casualty or Condemnation (including without limitation any
such award, compensation or insurance which has been received by
Lessor and which should be turned over to Lessee pursuant to the
terms of the Transaction Documents, and if not available or
sufficient, using its own funds), promptly and diligently repair
any damage to the applicable Property caused by such Casualty or
Condemnation in conformity with the requirements of Sections 11
and 12 hereof, using the as-built plans and specifications or
manufacturer's specifications for the applicable Property (as
modified to give effect to any subsequent Modifications, any
Condemnation affecting the applicable Property and all applicable
Legal Requirements), so as to restore the applicable Property to
the same remaining economic value, useful life, utility,
condition, operation and function as existed immediately prior to
such Casualty or Condemnation (assuming all maintenance and
repair standards have been satisfied). In such event, title to
the applicable Property shall remain with Lessor.
(iii) On the Casualty Loss Value Date next
following the occurrence of such Casualty or Condemnation (unless
such Casualty or Condemnation occurs within 20 days of the next
occurring Casualty Loss Value Date, in which case the payments
referenced below shall be made on the second following Casualty
Loss Value Date after the Casualty or Condemnation), Lessee shall
pay Lessor the sum of (A) the Casualty Loss Value (computed as of
the Casualty Loss Value Date next following or second following
the Casualty or Condemnation, as the case may be), plus (B) all
accrued and unpaid Basic Payments owing for all Basic Payment
Periods prior to the Casualty Loss Value Date as of which the
Casualty Loss Value is to be paid pursuant to the foregoing
subsection(A), plus (C) all Supplemental Payments then due and
owing. Upon payment in full of amounts specified in clauses (A)
through (C) of the preceding sentence, (X) the obligation of
Lessee to pay Basic Payments hereunder, with respect to such
Property for all Basic Payment Periods commencing after the
occurrence of such Casualty or Condemnation shall terminate, (Y)
the Term shall end with respect to such Property, and (Z) on
Lessor's receipt and verification of payment of the
above-referenced amounts, Lessor shall, at Lessee's cost and
expense, execute and deliver special warranty deeds and special
warranty bills of sale, as appropriate, in order to convey to
Lessee the Property with respect to which the Casualty or
Condemnation occurred on an as-is, where-is and with all faults
basis, without recourse or representation or warranty of any kind
except as to the absence of Liens created by or through Lessor.
(iv) Subject to the provisions of Sections 16(a) and
(b) hereof and prior to the occurrence and continuation of a
Default or an Event of Default, Lessee shall be entitled to
27
receive (and Lessor hereby irrevocably assigns to Lessee all of
Lessor's right, title and interest in) any award, compensation or
insurance proceeds under Section 17(b) hereof to which Lessee or
Lessor may become entitled by reason of their respective
interests in any Property to the extent (A) all or a portion of
such Property is damaged or destroyed in whole or in part by a
Casualty or (B) the use, access, occupancy, easement rights or
title to such Property or any Part thereof is the subject of a
Condemnation; provided, however, if a Default or an Event of
Default shall have occurred and be continuing (regardless of
whether Lessee elects to pay the amounts referenced in Section
16(b)(iii) hereof), then such award, compensation or insurance
proceeds shall be paid directly to Lessor or, if received by
Lessee, shall be held in trust for Lessor, and shall be paid over
by Lessee to Lessor and held in accordance with the terms of this
Section 16(b)(iv). All amounts held by Lessor hereunder on
account of any award, compensation or insurance proceeds either
paid directly to Lessor or turned over to Lessor shall be held as
security for the performance of Lessee's obligations hereunder
and under the other Transaction Documents. To the extent Lessor
commences the exercise of remedies upon the occurrence of an
Event of Default, such award, compensation or insurance proceeds
may be applied, in Lessor's discretion, to any amounts
outstanding with respect to such Event of Default; provided, to
the extent Lessee shall have paid all amounts due and owing
pursuant to this Agreement or any other Transaction Document, and
any amounts received as an award, compensation or insurance
proceeds shall remain, such amounts shall be paid to or returned
to the Lessee.
(v) Lessee may appear in any proceeding or action to
negotiate, prosecute, adjust or appeal any Claim for any award,
compensation or insurance payment on account of any such Casualty
or Condemnation and shall pay all expenses thereof. At Lessee's
reasonable request, and at Lessee's sole cost and expense, Lessor
shall participate in any such proceeding, action, negotiation,
prosecution or adjustment. Lessor and Lessee agree that this
Agreement shall control the rights of Lessor and Lessee in and to
any such award, compensation or insurance payment.
(vi) In the event a Casualty or a Condemnation of a
Property or any interest therein occurs where damage to the
affected Property is estimated to equal or exceed $500,000,
Lessee shall give notice thereof promptly to Lessor after Lessee
learns of such Casualty or Condemnation.
(vii) Except as referenced in Section 16(b)(iii)
and (vi) hereof, in no event shall a Casualty or Condemnation
affect Lessee's obligations to make Payments pursuant to this
Agreement.
(viii) Notwithstanding anything to the contrary set
forth in this Agreement, if during the Term with respect to a
Property a Casualty occurs with respect to such Property or
Lessee receives notice of a Condemnation with respect to such
28
Property, and (A) following such Casualty or Condemnation, there
is no reasonable expectation that the applicable Property can be
restored, repaired or replaced on or before the day 180 days
prior to the Expiration Date or the date nine months after the
occurrence of such Casualty or Condemnation to the same remaining
economic value, useful life, utility, condition, operation and
function as existed immediately prior to such Casualty or
Condemnation (assuming all maintenance and repair standards have
been satisfied), then this Agreement shall terminate with respect
to the applicable Property in accordance with Section 16(b)(iii)
hereof on the next occurring Casualty Loss Value Date or (B) such
Property is not in fact restored, repaired or replaced as
referenced in the foregoing subsection (A) on or before the day
180 days prior to the Expiration Date or the date nine months
after the occurrence of such Casualty or Condemnation, then this
Agreement shall terminate with respect to the applicable Property
in accordance with Section 16(b)(iii) hereof on the next
occurring Casualty Loss Value Date.
(c) Environmental Matters.
Within 10 days of Lessee gaining actual knowledge of
the presence of Hazardous Substances in any portion of any
Property or Properties in concentrations and conditions that
constitute an Environmental Violation, Lessee shall notify Lessor
in writing of such condition. Not later than 60 days after Lessee
gains actual knowledge of such Environmental Violation, Lessee
shall deliver to Lessor a termination notice or a remediation
notice with respect to the applicable Property or Properties;
provided, that Lessee shall not have the right to give a
remediation notice if a Default or Event of Default shall have
occurred and be continuing and in such circumstance, Lessee shall
be deemed to have given a termination notice.
If Lessee delivers a termination notice, Lessee shall
(on the Casualty Loss Value Date next occurring after the giving
of such notice) pay Lessor the sum of (A) the Casualty Loss Value
for such affected Property or Properties, plus (B) all accrued
and unpaid Basic Payments, plus (C) all Supplemental Payments
then due and owing.
If Lessee delivers a remediation notice, Lessee shall
(at Lessee's sole cost and expense) promptly and diligently
undertake and complete any response, clean up, remedial or other
action (including without limitation the pursuit by Lessee of
appropriate action against any off-site or third party source for
contamination) necessary to remove, cleanup or remediate the
Environmental Violation in accordance with all Environmental
Laws. Any such undertaking shall be timely completed in
accordance with prudent industry standards. If Lessee delivers a
remediation notice as referenced above, Lessee shall, upon
completion of remedial action by Lessee, cause to be prepared by
a reputable environmental consultant acceptable to Lessor a
report describing the Environmental Violation and the actions
taken by Lessee (or its agents) in response to such Environmental
Violation, and a statement by the consultant that the
Environmental Violation has been remedied in full compliance with
applicable Environmental Law.
29
(d) Application of Payments Not Relating to a
Casualty, Condemnation or Environmental Violation.
Any payments (including without limitation any award,
compensation or insurance proceeds) received at any time by
Lessor or Lessee from any insurer, governmental authority or
other party with respect to any condemnation, confiscation, theft
or seizure of, or requisition of title to or use of, or loss or
damage to, any Property not constituting a Casualty, Condemnation
or Environmental Violation, will be applied directly in payment
of repairs or for replacement of property in accordance with the
provisions of Sections 11 and 12 hereof, if not already paid by
Lessee, or if already paid by Lessee and if no Default or Event
of Default shall have occurred and be continuing, shall be
applied to reimburse Lessee for such payment, and any balance
remaining after compliance with said Sections 11 and 12 with
respect to such loss or damage shall be paid to or retained by
Lessor. If a Default or Event of Default shall have occurred and
be continuing, all amounts referenced in this Section 16(d) shall
be paid to or retained by Lessor in accordance with the
provisions of Section 16(b)(iv).
17. Insurance.
(a) Public Liability and Workers' Compensation
Insurance.
During the Term for each Property, Lessee shall procure
and carry, at Lessee's sole cost and expense, commercial general
liability and umbrella liability insurance for Claims for
injuries or death sustained by persons or damage to property
while on such Property or the premises where the Equipment is
located and such other public liability coverages as are then
customarily carried by similarly situated companies conducting
business similar to that conducted by Lessee. Such insurance
shall be on terms and in amounts that are no less favorable than
insurance maintained by Lessee with respect to similar properties
and equipment that it owns and are then carried by similarly
situated companies conducting business similar to that conducted
by Lessee, and in no event shall have a minimum combined single
limit per occurrence coverage (i) for commercial general
aggregate liability of less than $2,000,000 and (ii) for umbrella
liability of less than $25,000,000. The policies shall name
Lessee as the insured and shall be endorsed to name Lessor as an
additional insured. The policies shall also specifically provide
that such policies shall be considered primary insurance which
shall apply to any loss or Claim before any contribution by any
insurance which Lessor may have in force. During the Term, Lessee
shall, in the operation and use of each Property, maintain
workers' compensation insurance consistent with that carried by
similarly situated companies conducting business similar to that
conducted by Lessee and containing minimum liability limits of no
less than $1,000,000. In the operation of each Property, Lessee
shall comply with workers' compensation Laws applicable to
Lessee, and protect Lessor against any liability under such Laws.
30
(b) Permanent Hazard and Other Insurance.
(i) During the Term for each Property, Lessee shall
keep such Property insured against all risk of physical loss or
damage by fire and other risks and shall maintain builders' risk
insurance during construction of any Improvements or
Modifications in each case in amounts no less than the greater of
the Casualty Loss Value or replacement value of such applicable
Property from time to time and on terms that are no less
favorable than insurance covering other similar properties owned
by Lessee and are then carried by similarly situated companies
conducting business similar to that conducted by Lessee. The
policies shall name Lessee as the insured and shall be endorsed
to name Lessor as a named additional insured and loss payee to
the extent of its interest; provided, so long as no Default or
Event of Default exists, any loss payable under the insurance
policies required by this Section will be paid to Lessee. If a
Default or an Event of Default shall have occurred and be
continuing all amounts referenced in this Section 17(b) shall be
paid to or retained by Lessor in accordance with the provisions
of Section 16(b)(iv).
(ii) If, during the Term with respect to a
Property the area in which such Property is located is designated
a "flood-prone" area pursuant to the Flood Disaster Protection
Act of 1973, or any amendments or supplements thereto or is in a
zone designated A or V, then Lessee shall comply with the
National Flood Insurance Program as set forth in the Flood
Disaster Protection Act of 1973. In addition, Lessee will fully
comply with the requirements of the National Flood Insurance Act
of 1968 and the Flood Disaster Protection Act of 1973, as each
may be amended from time to time, and with any other Legal
Requirement, concerning flood insurance to the extent that it
applies to any such Property.
(iii) In addition to the insurance coverages
referenced above, Lessee shall maintain such other insurance with
respect to the Properties in such amounts and against such
insurable hazards as is usually carried by Persons in the same
industry as Lessee in the same general region, but any loss of
the type customarily covered by the policies described in
Sections 17(a) and (b)(i and ii), whether actually covered in
whole or in part by such policies, shall be the responsibility of
Lessee and the absence of such coverage shall not relieve Lessee
from any of its obligations under any of the documents or
agreements related to the Overall Transaction.
(c) Additional Provisions Regarding Insurance Coverage.
(i) As of the date of this Lease and annually
thereafter during the Term, Lessee shall furnish Lessor with
certificates prepared by the insurers or insurance broker of
Lessee showing the insurance required under this Section 17 to be
in effect, naming (to the extent of its interests) Lessor as an
additional insured and loss payee and evidencing the other
requirements of this Section 17. In addition, Lessee shall cause
31
a letter (in form and substance reasonably satisfactory to
Lessor) prepared by the insurers or the insurance broker of
Lessee to be delivered at each time an insurance certificate is
required hereunder stating that the insurance coverages which
Lessee has in effect regarding the Properties satisfy the
requirements of this Agreement. Any insurance policies carried
in accordance with this Section 17 shall be subject only to (A)
exclusions of the sort existing in the insurance policies in
effect on the Acceptance Date and (B) deductible amounts and/or
retentions not in excess of $1,000,000. All such insurance shall
be at the cost and expense of Lessee and provided by nationally
recognized, financially sound insurance companies. Lessee shall
cause such certificates to include a provision for 30 days'
advance written notice by the insurer to Lessor in the event of
cancellation or material alteration of such insurance. If an
Event of Default has occurred and is continuing and Lessor so
requests, Lessee shall deliver to Lessor copies of all insurance
policies required by this Section 17.
(ii) Lessee agrees that the insurance policy or
policies required by this Section 17 shall include an appropriate
clause pursuant to which each such policy shall (A) provide that
it will not be invalidated (I) should Lessee or any contractor,
as the case may be, waive, at any time, any or all rights of
recovery against any party for losses covered by any such policy,
(II) due to any breach of warranty, fraud, action, inaction or
misrepresentation by Lessee or any Person acting on behalf of
Lessee, (III) due to any foreclosure or other proceeding or
notice of sale relating to the Properties or (IV) due to the use
of any Property for purposes more hazardous than permitted by the
terms of any such policy, (B) include effective waivers by the
insurer of all Claims for insurance premiums or commissions or
(if any such policy provides for the payment thereof) additional
premiums or assessments against Lessor, (C) waive any right of
subrogation of the insurers against Lessor and waive any right of
the insurers to any setoff or counterclaim or any other
deduction, whether by attachment or otherwise, in respect of any
liability of Lessor, (D) provide that the whole or any part of
the right, title and interest of Lessor or Lessee therein may be
assigned and (E) be reasonably satisfactory to Lessor in all
other material respects. Lessee hereby waives any and all such
rights against Lessor to the extent of payments made to any such
Person under any such policy.
(iii) Neither Lessor nor Lessee shall carry
separate insurance concurrent in kind or form or contributing in
the event of loss with any insurance required under this Section
17, except that Lessor may carry separate liability insurance at
Lessor's sole cost so long as (A) Lessee's insurance is
designated as primary and in no event excess or contributory to
any insurance Lessor may have in force which would apply to a
loss covered under Lessee's policy and (B) each such insurance
policy will not cause Lessee's insurance required under this
Section 17 to be subject to a coinsurance exception of any kind.
32
(iv) Lessee shall pay as they become due all
premiums for the insurance required by this Section 17, shall
renew or replace each policy prior to the expiration date thereof
or otherwise maintain the coverage required by such Sections
without any lapse in coverage.
18A. General Tax Indemnity.
Lessee agrees to pay, and shall indemnify and hold
harmless each Indemnified Person on demand on an After Tax Basis
for all Taxes and other governmental charges or withholdings paid
or payable by, or assessed against, such Indemnified Person,
including but not limited to federal, state, county and municipal
fees and Taxes, ad valorem, sales, use, value added, leasing,
excise, stamp and documentary Taxes (other than federal and state
Taxes based on Lessor's net income and corporate franchise
taxes), and all related penalties, fines and interest charges in
connection with (a) the Properties, the financing, refinancing,
purchase, ordering, acquisition, acceptance, rejection,
ownership, possession, design, construction, installation,
refurbishment, development, delivery, acceptance, nondelivery,
leasing, subleasing, possession, use, operation, maintenance
repair, modification, condition, sale, return, repossession
(whether by summary proceedings or otherwise), destruction,
return or any other disposition of any Property or any Part
thereof, including without limitation the acquisition, holding or
disposition of any interest in any Property, lease or agreement
comprising a portion thereof until the return pursuant to the
terms of the Transaction Documents or other termination of such
Transaction Documents, (b) the payment or receipt of Rent or
other charges under any Lease Supplement or (c) such Taxes or
other liabilities otherwise arising in connection with the
transactions contemplated by the Transaction Documents. Lessee
shall timely pay or cause to be paid all Taxes directly to the
applicable taxing authorities and shall timely file all reports,
returns and filings required in connection therewith; provided,
however, Lessee shall deliver to the appropriate Indemnified
Person any properly completed report, return or other filing
required in connection with any Taxes for which the signature of
such Indemnified Person is required, such delivery to be made
within a reasonable period prior to the due date of the
applicable report, return or filing. Upon an Indemnified
Person's request, Lessee will promptly furnish to such
Indemnified Person information as the Indemnified Person shall
require in connection with the preparation, filing and payment of
all returns relating to such Taxes.
All of the indemnities contained in this Section 18A
shall continue in full force and effect notwithstanding the
expiration or other termination of the Term and are expressly
made for the benefit of, and shall be enforceable by, each
Indemnified Person.
18B. Special Tax Indemnity.
As of the time of the execution of this Agreement:
(a) Assumptions.
Lessor has made the following assumptions regarding the
characterization of this Agreement for federal and state income
Tax purposes (the "Tax Assumptions"): (i) Lessor will be treated
33
as the purchaser, owner and lessor of the Properties; (ii) the
Properties will be treated as placed in service on the date the
Lease Supplement therefor is delivered, (iii) Lessor's basis in
the Properties will be equal to the total cost to Lessor of the
Properties as reflected in the applicable Lease Supplement
(including without limitation, Impositions and Taxes paid in
connection therewith, freight and delivery charges, if any, and
installation charges), and such cost shall be allocated among the
Land, Improvements, Fixtures and Equipment as set forth on the
applicable Lease Supplement; (iv) for federal and state Tax
purposes, Lessor will be entitled to claim depreciation
deductions with respect to 100% of the total actual cost
allocated among the categories of the Properties (excluding any
cost allocated to Land) computed on the basis set forth in the
applicable Lease Supplement; (v) the only amounts that Lessor
will be required to include in gross income with respect to this
Agreement will be (A) Basic Payments when and as due under this
Agreement, (B) payments as a consequence of a sale or other
disposition of the Properties or a portion thereof, and (C) any
indemnity pursuant to this Section 18B; (vi) all items of income
and expense will be treated on an accrual basis and as derived
from or allocable to sources within the United States; (vii)
Lessor will be subject to federal income tax at the rate of 35%
and state income tax at the rate of 0% (collectively, the
"Effective Tax Rate"); (viii) Lessor is an accrual method
taxpayer, has a taxable year ending December 31 and will have a
full first taxable year; (ix) Lessor will be able to fully use
the depreciation deductions described in clause (iv) above to
offset income that would otherwise have been subject to income
tax at the Effective Rate; (x) Lessor will not be subject to a
minimum tax or tax measured by items of tax preference; (xi) no
portion of the depreciation deductions will be recaptured
pursuant to Section 1245 or Section 1250 of the Code or otherwise
recaptured thereunder; and (xii) the Lease will not be treated as
a "disqualified leaseback or long-term agreement" as such term is
defined for purposes of Section 467 of the Code.
(b) Representations, Warranties and Covenants.
Lessee hereby represents, warrants and covenants to
Lessor as follows: (i) the Properties will not be used
"predominantly outside the United States" within the meaning of
Sections 168(g)(1)(A) and 168(g)(4) of the Code; (ii) assuming
Lessor is treated as the owner of the Properties for federal
income tax purposes, the Tax Assumptions set forth in Section
18B(a)(iii) -(v) are correct; (iii) neither the Properties nor
any component thereof constitutes "limited use property" within
the meaning of Revenue Procedure 76-30, 1976-2 C.B. 647; (iv)
Lessee (including without limitation any Affiliate of Lessee)
will not claim any depreciation or cost recovery deductions with
respect to the Properties, will not use the Properties in any
manner that will cause the Properties to cease to qualify for
depreciation deductions as set forth in the applicable Lease
Supplement, and has not taken and will not take any other action
in connection with filing its or their federal and state income
tax returns that would cause any of the Tax Assumptions to be
incorrect; (v) at no time during the Term will the Properties or
any portion thereof be deemed to be tax exempt use property as
defined in Section 168(h) of the Code or public utility property
within the meaning of Section 168(i)(10) of the Code; (vi) all
written information of a factual nature with respect to the
Properties or any portion thereof provided by the Lessee or any
Affiliate or agent thereof to any appraiser employed in
connection with the transactions contemplated hereby, was
accurate at the time given and, unless amended by information
given in writing to such appraiser and Lessor by the Lessee or an
34
Affiliate of the Lessee on or prior to the date that any
applicable Property becomes subject to a Lease Supplement will be
accurate in all material respects on the date of delivery of the
Lease Supplement therefor; (vii) on the date that any Property
becomes subject to a Lease Supplement, no improvements,
modifications or additions will be required in order to render
such Property complete for its intended use by Lessee, and such
Property will be deemed to have been placed in service no later
than the date that the Lease Supplement is delivered; (viii) no
member of the "Lessee Group" (as defined in Revenue Procedure
75-21, 1975-1 C.B. 715) of which the Lessee is a member will
following the closing of the Lease and the transactions
contemplated thereby have any investment in the Properties or any
portion thereof not permitted by Section 4 of Revenue Procedure
75-21, as amended by Revenue Procedure 79-48, 1979-2 C.B. 529;
and (ix) during the Term, no loss, damage, destruction,
abandonment, condemnation, seizure, confiscation, theft,
forfeiture, requisition of title or requisition of use with
respect to the Properties or any portion thereof that does not
constitute a Casualty or Condemnation resulting in the payment of
Casualty Loss Value with respect thereto will result in the
disallowance, loss, recapture or deferral of all or part of the
depreciation deductions and amortization deductions referred to
in Section 18 B(a) above.
(c) Indemnity Payment Conditions.
(i) If, by reason of any act or omission of Lessee or
by any other Person in possession of the Properties, or by reason
of the inaccuracy or breach by Lessee of any of the
representations, warranties and covenants contained in Section
18B(b), tax benefits resulting from the Tax Assumptions are lost,
disallowed, eliminated, reduced, recaptured, compromised, delayed
or otherwise made unavailable to Lessor or (ii) Lessor incurs a
tax detriment because it is required to include amounts in income
other than as contemplated in the Tax Assumptions, Lessee shall,
upon notice by Lessor, promptly pay to Lessor on demand in
immediately available funds, an indemnity payment determined on
an After Tax Basis, as reasonably computed by Lessor, equal to
the amount of such lost tax benefits and such tax detriments
incurred (computed at the Lessor's applicable federal and state
tax rate and including without limitation the incurrence of any
tax detriments as a result of the inclusion by Lessor in gross
income of the aggregate indemnity payment pursuant to this
Section 18B), plus any interest, penalties and additions to tax
thereon and plus any expenses incurred by Lessor in connection
therewith. Notwithstanding anything herein to the contrary,
Lessee shall not be liable for any indemnity payment arising from
a tax detriment as a result of any taxing authority's
reallocation of the cost paid by Lessor for the Properties in a
manner different from the allocation reflected in the applicable
Lease Supplement unless arising from a direct act or omission of
Lessee; provided, however, Lessee specifically acknowledges and
agrees that the allocation reflected in the Lease Supplement is
reasonable and reflects an appropriate allocation based on the
respective fair market values of the classes of the Properties as
set forth on such Lease Supplement. Lessee accordingly agrees
that it will not take a reporting position for income tax
purposes, ad valorem tax purposes or otherwise inconsistent with
the allocation set forth on such Lease Supplement.
35
(d) Survival of Indemnities.
All of the indemnities contained in this Section 18B
shall apply to the Properties and each component thereof and
shall continue in full force and effect, notwithstanding the
expiration or other termination of the Term and are expressly
made for the benefit of, and shall be enforceable by, Lessor and
each Assignee.
(e) Consolidated Group.
For purposes of this Section 18B, the term Lessor shall
include any group or any member of an affiliated group of
corporations of which Lessor is, or may become, a member if
consolidated or combined returns are filed for such affiliated
group for federal, state or local income tax purposes, and their
respective successors and assigns.
19. General Indemnity.
Whether or not any of the transactions contemplated
hereby shall be consummated, Lessee hereby assumes liability for
and agrees to defend, indemnify and hold harmless each
Indemnified Person on an After Tax Basis from and against any
Claims, which may be imposed on, incurred by or asserted against
such Indemnified Person by any third party (but not to the extent
such Claims arise from the gross negligence, willful misconduct
or willful breach of such Indemnified Person or are otherwise
solely attributable to acts or events occurring after the
expiration of this Agreement or after the transfer of any
Property to Lessee or a third party) in any way relating to or
arising or alleged to arise out of the execution, delivery,
performance or enforcement of this Agreement or any other
Transaction Document or on or with respect to any Property or any
component thereof, including without limitation Claims in any way
relating to or arising or alleged to arise out of (a) the
financing, refinancing, purchase, ordering, acquisition,
acceptance, rejection, ownership, possession, design,
construction, installation, refurbishment, development, delivery,
acceptance, nondelivery, leasing, subleasing, possession, use,
operation, maintenance repair, modification, condition, sale,
return, repossession (whether by summary proceedings or
otherwise), destruction, return or any other disposition of any
Property or any Part thereof, including without limitation the
acquisition, holding or disposition of any interest in any
Property, lease or agreement comprising a portion of any thereof;
(b) any latent or other defects in any Property or any portion
thereof whether or not discoverable by such Indemnified Person or
Lessee; (c) a violation of Environmental Laws, Environmental
Claims or other loss of or damage to any property or the
environment relating to any Property, this Agreement or Lessee;
(d) the Transaction Documents, or any transaction contemplated
thereby; (e) any breach by Lessee of any of its representations
or warranties under the Transaction Documents to which Lessee is
a party or failure by Lessee to perform or observe any covenant
or agreement to be performed by it under any Transaction
Document; (f) the transactions contemplated hereby or by any
other Transaction Document, in respect of the application of
Parts 4 and 5 of Subtitle B of Title I of ERISA; (g) personal
injury, death or property damage, including without limitation
Claims based on strict or absolute liability in tort; and (h) any
infringement Claims.
36
All of the indemnities contained in this Section 19
shall continue in full force and effect notwithstanding the
expiration or other termination of the Term and are expressly
made for the benefit of, and shall be enforceable by, each
Indemnified Person.
20. NO LESSOR WARRANTIES.
LESSEE ACKNOWLEDGES AND AGREES THAT IT IS LEASING EACH
PROPERTY "AS-IS, WHERE-IS AND WITH ALL FAULTS" WITHOUT
REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR IMPLIED) BY
LESSOR WHATSOEVER AND IN EACH CASE SUBJECT TO (I) THE EXISTING
STATE OF TITLE,(II)THE RIGHTS OF ANY PARTIES IN POSSESSION
THEREOF (IF ANY), (III) ANY STATE OF FACTS REGARDING ITS PHYSICAL
CONDITION OR WHICH AN ACCURATE SURVEY MIGHT SHOW, (IV) ALL
APPLICABLE LEGAL REQUIREMENTS AND (V) VIOLATIONS OF LEGAL
REQUIREMENTS WHICH MAY EXIST ON THE DATE HEREOF AND/OR THE DATE
OF THE LEASE SUPPLEMENT. LESSOR HAS NOT MADE AND SHALL NOT BE
DEEMED TO HAVE MADE ANY REPRESENTATION, WARRANTY OR COVENANT
(EXPRESS OR IMPLIED) WHATSOEVER AND SHALL NOT BE DEEMED TO HAVE
ANY LIABILITY WHATSOEVER AS TO ANY PROPERTY, THE TITLE, VALUE,
USEFUL LIFE, HABITABILITY, USE, CONDITION, DESIGN, OPERATION,
MERCHANTABILITY, DURABILITY, SUITABILITY OR FITNESS FOR USE OF
ANY PROPERTY (OR ANY PART THEREOF), THE QUALITY OF THE MATERIALS
IN OR WORKMANSHIP OF ANY PROPERTY, THE CONFORMITY OF ANY PROPERTY
TO ANY PURCHASE ORDER OR PLANS AND SPECIFICATIONS, OR ANY OTHER
REPRESENTATION, WARRANTY OR COVENANT WHATSOEVER, EXPRESS OR
IMPLIED, WITH RESPECT TO ANY PROPERTY (OR ANY PART THEREOF), AND
LESSOR SHALL NOT BE DEEMED TO HAVE ANY LIABILITY FOR ANY LATENT,
HIDDEN OR PATENT DEFECT THEREON, THE FAILURE OF ANY PROPERTY, OR
ANY PART THEREOF, TO COMPLY WITH ANY LEGAL REQUIREMENT OR FOR ANY
DAMAGES OF ANY KIND OR TYPE TO PERSONS OR PROPERTY RESULTING
THEREFROM, OR FOR LESSEE'S LOSS OF USE OF ANY PROPERTY OR FOR ANY
INTERRUPTION IN LESSEE'S BUSINESS CAUSED BY LESSEE'S INABILITY TO
USE ANY PROPERTY FOR ANY REASON. PRIOR TO THE DATE HEREOF,
LESSEE HAS BEEN AFFORDED FULL OPPORTUNITY TO INSPECT EACH
PROPERTY AND THE IMPROVEMENTS THEREON, IS (INSOFAR AS LESSOR IS
CONCERNED) SATISFIED WITH THE RESULTS OF ITS INSPECTIONS AND IS
ENTERING INTO THIS AGREEMENT SOLELY ON THE BASIS OF THE RESULTS
OF ITS OWN INSPECTIONS, AND ALL RISKS INCIDENT TO THE MATTERS
DESCRIBED IN THE PRECEDING SENTENCE, AS BETWEEN LESSOR AND
LESSEE, ARE TO BE BORNE BY LESSEE.
So long and only so long as an Event of Default shall not
have occurred and be continuing, and so long and only so long as
all of the Properties shall be subject to this Agreement and
Lessee shall be entitled to possession of the Properties
hereunder, Lessor authorizes Lessee, at Lessee's sole expense, to
assert for Lessor's account, all rights and powers of Lessor
under any manufacturer's vendor's or dealer's warranty on any
item of Properties; provided, however, that Lessee shall
indemnify, protect, save, defend and hold harmless Lessor from
37
and against any and all Claims, and all costs, expenses, damages,
losses and liabilities incurred or suffered by Lessor in
connection therewith, as a result of, or incident to, any action
by Lessee pursuant to the foregoing authorization.
21. Lessee's Representations and Warranties.
Lessee hereby represents and warrants as of the date hereof
to Lessor and each Assignee of Lessor that:
(a) Due Organization and Existence.
Lessee is a corporation duly organized, validly
existing and in good standing under the Laws of the state of its
incorporation, and is qualified to do business in each
jurisdiction in which such qualification is necessary in order
for Lessee to carry on its business and to perform its
obligations hereunder, and is in good standing under the Laws of
each jurisdiction in which the failure to be in good standing
would have a material adverse effect on the condition (financial
or otherwise) of Lessee.
(b) Power and Authority.
Lessee has the corporate power and authority to execute
and perform this Agreement and to lease the Properties hereunder,
and has duly authorized the execution, delivery and performance
of this Agreement and the other Transaction Documents to which
Lessee is a party.
(c) Due Authorization.
The leasing of the Properties from Lessor by Lessee,
the execution and delivery of this Agreement and the other
Transaction Documents to which Lessee is a party, the compliance
by Lessee with the terms hereof and thereof and the payment and
performance by Lessee of all of its obligations hereunder and
thereunder (i) have been duly and legally authorized by
appropriate corporate action taken by Lessee, (ii) are not in
contravention of, and will not result in a violation or breach
of, any of the terms of Lessee's articles of incorporation,
by-laws or of any provisions of any agreements relating to shares
of the capital stock of Lessee, and (iii) will not violate or
constitute a breach of any provisions of applicable Law, or any
indenture, agreement or other instrument to which Lessee is a
party, or by or under which Lessee or any of Lessee's property is
bound, or be in conflict with, result in a breach of, or
constitute (with due notice and/or lapse of time) a default under
any such indenture, agreement or any instrument, or result in the
creation or imposition of any Lien upon any of Lessee's property
or assets.
(d) Enforceability.
This Agreement and the other Transaction Documents to
which Lessee is a party have been executed by the duly authorized
officer or officers of Lessee and delivered to Lessor and
38
constitute, the legal, valid and binding obligations of Lessee,
enforceable in accordance with their terms.
(e) No Consents.
The execution and delivery by Lessee of this Agreement
and the other Transaction Documents to which Lessee is a party,
the payment and performance by Lessee of all of its obligations
hereunder and thereunder and the sale of the Properties by any
Seller to Lessor for the purpose of leasing the same to Lessee
under this Agreement and the other applicable Transaction
Documents, in no such case requires any consent or approval of,
the giving of notice to, the registration, filing or recording
with or the taking of any other action in respect of, any
federal, state, local or foreign government or governmental
authority or agency.
(f) No Liens.
No mortgage, deed of trust, or other Lien (other than
the Lien granted to Lessor hereunder) which now covers or
affects, or which may hereafter cover or affect, any property or
interest therein of Lessee, now attaches or hereafter will attach
to any Property, or in any manner affects or will affect
adversely Lessor's rights and interests therein;
(g) Perfection of Security Interest.
To the extent this Agreement is hereafter deemed to be
a lease intended as security and not a true lease then except for
the filing of Uniform Commercial Code financing statements with
the North Carolina Secretary of State, Guilford County, North
Carolina, Xxx County, North Carolina, Xxxxxx County, North
Carolina and Rockingham County, North Carolina, no further
action, including without limitation any filing or recording of
any document, mortgage, or Uniform Commercial Code financing
statement is necessary or advisable in order to establish and
perfect, the Properties as against Lessee and/or any third
parties in any applicable jurisdiction.
(h) (intentionally omitted).
(i) No Litigation.
There is no litigation or any other proceedings now
pending or, to the knowledge of Lessee threatened, against or
affecting Lessee, in any court or before any regulatory
commission, board or other administrative governmental agency
which would directly or indirectly, adversely affect or impair
the right, title and interest of Lessor in and to the Properties,
the ability of Lessee to perform its obligations under the
Transaction Documents which it is a party or which, in the
reasonable opinion of Lessee's management, is likely to affect,
materially and adversely, the business, operations or condition
39
of Lessee (financial or otherwise), other than as disclosed in
Lessee's financial statements.
(j) Income Tax Return.
Lessee has filed all United States income Tax returns
which are required to be filed and has paid, or made provisions
for the payment of, all Taxes which have or may become due
pursuant to said returns or pursuant to any assessment received
by Lessee, except such Taxes, if any, as are being contested by
means of a Permitted Contest.
(k) ERISA.
Lessee has not entered into the Overall Transaction,
directly or indirectly, in connection with any arrangement in any
way involving any employee benefit plan or related trust to which
it is a party in interest, all within the meaning of the
Employment Retirement Income Security Act of 1974, as amended
("ERISA"), and the Internal Revenue Code of 1986, as amended.
(l) Investment Company.
Lessee is not an "investment company", or a company
"controlled" by an "investment company", within the meaning of
the Investment Company Act of 1940, as amended.
(m) Taxes.
All property, ad valorem, sales, use, documentation or
similar Taxes, fees or other charges due and payable prior to or
as of the date hereof have been paid to the extent such are in
connection with the sale to and purchase by Lessor of the
Properties or are otherwise in connection with the Overall
Transaction.
(n) No Offer to Sell or Assign.
Lessee has not offered any interest in this Agreement,
any other Transaction Documents to which Lessee is a party, the
Payments, the Properties or any similar security for sale to, or
solicited offers to buy any thereof from, or otherwise approached
or negotiated with respect thereto with, any prospective
purchaser, other than Lessor and as to Lessor, after reasonable
inquiry, Lessee believes that Lessor has such knowledge and
experience in financial and business matters that it is capable
of evaluating the merits and risks of such an investment;
provided, however, that Lessee has previously negotiated a
financing arrangement similar to this Agreement with Transcapital
Corporation.
40
(o) Chief Executive Office.
The chief executive office of Lessee is located at 7201
West Friendly Avenue, Guilford County, Xxxxxxxxxx, Xxxxx Xxxxxxxx
00000 and has been located at such address for no less than the
four (4) months prior to the date hereof.
(p) No Material Adverse Change.
No material adverse change has occurred in the
condition of Lessee (financial or otherwise) since June 30, 1996
which would impair the ability of Lessee to pay and perform its
obligations under this Agreement and the other Transaction
Documents to which Lessee is a party.
(q) Trade Names.
Lessee has not, and does not, use any trade name or any
other names in the conduct of its business except for its name
set forth on the signature page hereof.
(r) Title.
Lessor has good and marketable fee simple title to each
Property, subject only to Permitted Exceptions.
(s) Flood Hazard.
No portion of any Property is located in an area
identified as a special flood hazard area by the Federal
Emergency Management Agency or other applicable agency.
(t) Insurance Coverage.
Lessee has obtained insurance coverage for each
Property which meets the requirements of this Agreement and all
of such coverage is in full force and effect as the date hereof.
(u) Compliance with Law.
Each Property and Lessee's use thereof, complies with
all Legal Requirements as of the date hereof (including without
limitation all zoning and land use laws and Environmental Laws)
and all other Governmental Actions have been taken in respect
thereto, except to the extent that failure to comply therewith
would not, individually or in the aggregate, have a material
adverse effect on (i) the business, condition (financial or
otherwise), assets, liabilities or operations of Lessee and its
Subsidiaries taken as a whole, (ii) the ability of Lessee or any
Subsidiary of Lessee to perform its respective obligations under
any Transaction Document to which it is a party, (iii) the
validity or enforceability of any Transaction Document or the
rights and remedies of the Lessor thereunder, (iv) the validity,
priority or enforceability of any Lien on any Property created by
any Transaction Document or (v) the value, utility or useful life
41
of any Property or the use, or ability of Lessee to use, any
Property for the purpose for which it was intended.
(v) Governmental Actions
All necessary Governmental Action, in each case
required by any Law enacted, imposed or adopted on or prior to
the date hereof or by any change in facts or circumstances on or
prior to the date hereof, shall have been obtained or made and be
in full force and effect.
(w) Encroachments; Permitting.
No Property encroaches in any manner onto any adjoining
land (except as permitted by express written easements). There
are no material defects to any Property including without
limitation the plumbing, heating, air conditioning and electrical
systems thereof. All water, sewer, electric, gas, telephone and
drainage facilities and all other utilities required to
adequately service each Property for its intended use are
available pursuant to permits effective on or prior to the date
hereof (including without limitation any that may be required
under applicable Environmental Laws). There is no action, suit
or proceeding (including without limitation any proceeding in
condemnation or eminent domain or under any Environmental Law)
pending or, to the best knowledge of the Lessee, overtly
threatened which adversely affects the title to, or the use,
operation, utility, value or useful life of any Property. No
fire or other casualty with respect to any Property has occurred
which fire or other casualty has had, individually or in the
aggregate, a material adverse effect on (i) the business,
condition (financial or otherwise), assets, liabilities or
operations of Lessee and its Subsidiaries taken as a whole, (ii)
the ability of Lessee or any Subsidiary to perform its respective
obligations under any Transaction Document to which it is a
party, (iii) the validity or enforceability of any Transaction
Document or the rights and remedies of the Lessor thereunder,
(iv) the validity, priority or enforceability of any Lien on any
Property created by any Transaction Document or (v) the value,
utility or useful life of any Property or the use, or ability of
Lessee to use, any Property for the purpose for which it was
intended. All utilities serving the related Properties are
located in (and in the future will be located in) and vehicular
access to each Property is provided by, either public
rights-of-way abutting such Property or Appurtenant Rights. All
licenses, approvals, authorizations, consents, permits (including
without limitation building, demolition and environmental
permits, licenses, approvals, authorizations and consents),
easements and rights-of-way, including without limitation proof
of dedication, required for (i) the use, treatment, storage,
transport, disposal or disposition of any Hazardous Substance on,
at, under or from the real property underlying any Improvements
during the use and operation of such Improvements and the use and
operation of such Improvements with the applicable Equipment
which such Improvements support for the purposes for which they
were intended have either been obtained from the appropriate
Governmental Authorities having jurisdiction or from private
parties, as the case may be.
42
22. Events of Default.
Any of the following events shall constitute an "Event of
Default" (whether any such event shall be voluntary or
involuntary, or come about or be effected by operation of Law or
pursuant to or in compliance with any judgment, decree or order
of any court or any order, rule or regulation of any
administrative or governmental body):
(a) Payment.
Lessee shall fail to make (i) any Basic Payment within
five days after the same is due and payable or (ii) any
Supplemental Payment within 10 days after receipt of written
notice to Lessee that the same is due and payable.
(b) Certain Covenants.
Lessee shall fail to observe or perform any of the
covenants or agreements of Lessee set forth in Sections 5(b),
5(c), 6, 8, 14(a), 14(c), 15, 17 or 29 hereof.
(c) Other Covenants.
Lessee shall fail to perform or observe any covenant,
condition, or agreement (other than those identified in Sections
22(a) or (b) hereof) to be performed or observed by it under this
Agreement, any other Transaction Document to which Lessee is a
party or in any document or certificate furnished to Lessor in
connection herewith or therewith, and such failure shall continue
unremedied for 30 days after written notice to Lessee specifying
such failure and demanding the same to be remedied; provided,
however, that if Lessee shall have undertaken to cure any such
failure and, notwithstanding the reasonable diligence of Lessee
in attempting to cure such failure, such failure is not cured
within said 30 day period but is curable with future due
diligence, there shall exist no Event of Default under this
Section 22(c) for such further time, not to exceed an additional
30 days, as may reasonably be required to effect such cure, so
long as Lessee is proceeding with due diligence to cure such
failure.
(d) Default under Other Documents - Lessee.
(i) Any Lessee Entity shall be in default
respecting any obligation owed to any Lessor Entity under any
lease, loan agreement, promissory note or other agreement,
instrument or document, (ii) any Lessee Entity shall be in
default in the payment of any single amount due by such Lessee
Entity to any Person (other than a Lessor Entity) regarding an
aggregate payment obligation of $100,000 or more (excluding any
such obligation which is being contested in good faith by such
Lessee Entity by appropriate proceedings, and the liability for
which has not been reduced to judgment) relating to the payment
of borrowed money or the payment of rent or hire under any lease
agreement, and such obligation shall be declared to be due and
payable prior to the maturity thereof; or (iii) an attachment or
other Lien shall be filed or levied against a substantial part of
43
the property of any Lessee Entity and such judgment shall
continue unstayed and in effect, or such attachment or Lien shall
continue undischarged or unbonded, for a period of 30 days or
more.
(e) Default under Other Documents - Guarantor.
(i) Guarantor shall be in default respecting any
obligation owed to any Lessor Entity pursuant to the Guaranty or
any lease, loan agreement, promissory note or other argument,
instrument or document, (ii) Guarantor shall be in default in the
payment of any single amount due by Guarantor to any Person
(other than a Lessor Entity) regarding an aggregate payment
obligation of $100,000 or more (excluding any such obligation
which is being contested in good faith by Guarantor by
appropriate proceedings, and the liability for which has not been
reduced to judgment) relating to the payment of borrowed money or
the payment of rent or hire under any lease agreement, and such
obligation shall be declared to be due and payable prior to the
maturity thereof; or (iii) an attachment or other Lien shall be
filed or levied against a substantial part of the property of
Guarantor and such judgment shall continue unstayed and in
effect, or such attachment or Lien shall continue undischarged or
unbonded, for a period of 30 days or more.
(f) Bankruptcy; Insolvency - Lessee.
Lessee shall become insolvent or bankrupt or make an
assignment for the benefit of creditors or consent to the
appointment of a trustee or receiver; or a trustee or a receiver
shall be appointed for Lessee or for a substantial part of its
property without its consent and shall not be dismissed for a
period of 60 days; or any petition for the relief, reorganization
or arrangement of Lessee or any other petition in bankruptcy or
for the liquidation, insolvency or dissolution of Lessee shall be
filed by or against Lessee and, if filed against Lessee shall be
consented to or be pending and not dismissed for a period of 60
days; or an order for relief under any bankruptcy or insolvency
Law shall be entered by any court or governmental authority of
competent jurisdiction with respect to Lessee; or any execution
or writ of process shall be issued under any action or proceeding
against Lessee whereby any item of Properties may be taken or
restrained; or Lessee's corporate existence shall cease; or
Lessee shall, without Lessor's prior written consent, sell,
transfer or dispose of, or pledge or otherwise encumber, all or
substantially all of its assets or property, or except in
accordance with Section 14(c) hereof, Lessee shall consolidate or
merge with any other entity, or engage in any form of corporate
reorganization.
(g) Bankruptcy; Insolvency - Guarantor.
Guarantor shall become insolvent or bankrupt or make an
assignment for the benefit of creditors or consent to the
appointment of a trustee or receiver; or a trustee or a receiver
shall be appointed for Guarantor or for a substantial part of its
property without its consent and shall not be dismissed for a
period of 60 days; or any petition for the relief, reorganization
or arrangement of Guarantor or any other petition in bankruptcy
44
or for the liquidation, insolvency or dissolution of Guarantor
shall be filed by or against Guarantor and, if filed against
Guarantor shall be consented to or be pending and not dismissed
for a period of 60 days; or an order for relief under any
bankruptcy or insolvency Law shall be entered by any court or
governmental authority of competent jurisdiction with respect to
Guarantor; or any execution or writ of process shall be issued
under any action or proceeding against Guarantor whereby any item
of Properties may be taken or restrained; or Guarantor's
corporate existence shall cease; or Guarantor shall, without
Lessor's prior written consent, sell, transfer or dispose of, or
pledge or otherwise encumber, all or substantially all of its
assets or property, or except in accordance with the provisions
of the Guaranty, Guarantor shall consolidate or merge with any
other entity, or engage in any form of corporate reorganization.
(h) Misrepresentation - Lessee.
Any representation, warranty, statement or
certification made by Lessee under this Agreement or any other
Transaction Document to which Lessee is a party in the Lease
Supplement or in any document or certificate furnished to Lessor
in connection herewith or therewith) shall prove to be untrue or
incorrect when made, or shall be breached.
(i) Misrepresentation - Guarantor.
Any representation, warranty, covenant, statement or
certification made by Guarantor under the Guaranty or any other
Transaction Document to which Guarantor is a party (or in any
document or certificate furnished to Lessor in connection
herewith or therewith) shall prove to be materially untrue or
incorrect when made, or shall be breached.
23. Remedies Upon Default.
Upon the occurrence of any Event of Default (subject to
Lessee's rights set forth in the next to last paragraph of this
Section 23), Lessor may exercise one or more of the following
remedies with respect to the Properties or any Part thereof as
Lessor in its sole discretion shall elect:
(a) Surrender of Possession.
Upon the demand of Lessor and at Lessee's expense,
Lessee shall surrender the Properties (or any of them) to Lessor.
Lessor may enter upon and repossess the Properties (or any of
them) without the necessity of first instituting proceedings or
by summary proceedings or by such means as are available at Law
or in equity. Lessor may remove from the Properties (or any of
them) Lessee and any or all other Persons, any and all personal
property, Lessee's equipment and personalty and any and all
severable Modifications. Lessor shall have no liability by
reason of any such entry, repossession or removal performed in
accordance with applicable Law or as otherwise permitted in
equity.
45
(b) Sell, Use or Otherwise Employ Properties.
Lessor may (i) sell or otherwise dispose of the
Properties, at public or private sale and with or without notice
to Lessee or advertisement, as Lessor may determine or (ii) hold,
use, operate, otherwise employ or keep idle all or any Part of
the Properties as Lessor, in its sole discretion, may determine,
in the case of (i) or (ii) of this Section 23(b) free and clear
of any rights of Lessee except as hereinafter set forth in this
Section 23 and without any duty to account to Lessee with respect
to such action or inaction or for any proceeds with respect
thereto except to the extent required by Section 23(d) hereof in
the event Lessor elects to exercise its rights under said Section
23(d) in lieu of its rights under Section 23(b) hereof.
(c) Excess of Casualty Loss Value over Fair Market
Sales Value.
Whether or not Lessor shall have exercised, or shall
thereafter at any time exercise, any of its rights under Sections
23(a) or (b) hereof with respect to the Properties, Lessor, by
notice to Lessee specifying a payment date not earlier than the
next Basic Payment Date, may cause Lessee to pay to Lessor, and
Lessee shall pay to Lessor, on the payment date specified in such
notice, as liquidated damages for loss of a bargain and not as a
penalty (in lieu of the Basic Payments for the Properties due
after the specified payment date), any Payments with respect to
the Properties due on or before or accrued as of such payment
date plus an amount equal to the excess, if any, of (i) the
Casualty Loss Value for all the Properties, determined as of such
payment date over (ii) the Fair Market Sales Value for all the
Properties, computed as of the payment date specified pursuant to
this Section 23(c), together with interest, to the extent
permitted by applicable Law, at the Overdue Rate on such Payments
and the amount of such excess, if any, from the due date therefor
as specified by Lessor to the date of actual payment of all such
Payments and other amounts.
(d) Excess of Casualty Loss Value over Sales Proceeds.
In the event Lessor, pursuant to Section 23(b) hereof,
shall have sold the Properties, Lessor in lieu of exercising its
rights under Section 23(c) hereof with respect to the Properties,
may, if it shall so elect, cause Lessee to pay Lessor, and Lessee
shall pay to Lessor, on the date of such sale, as liquidated
damages for loss of a bargain and not as a penalty (in lieu of
the Basic Payments for the Properties due after the date on which
such sale occurs), any Payments with respect to the Properties
due on or before or accrued as of such date of sale, plus the
amount of any deficiency of the net proceeds of such sale below
the Casualty Loss Value of all the Properties, determined as of
the date of such sale, together with interest, to the extent
permitted by applicable Law, at the Overdue Rate on all such
Payments and the amount of such deficiency from the due date
therefor as specified by Lessor to the date of actual payment of
all such Payments and other amounts.
(e) Payment of Casualty Loss Value.
46
In lieu of exercising its rights under Sections 23(a), (b),
(c) or (d) hereof, Lessor, by notice to Lessee specifying a
payment date, may cause Lessee to pay to Lessor, and Lessee shall
pay to Lessor, on the payment date specified in such notice, as
liquidated damages for loss of a bargain and not as a penalty (in
lieu of the Basic Payments for the Properties due after the
specified payment date), any Payments with respect to the
Properties due on or before or accrued as of such payment date
plus an amount equal to the Casualty Loss Value for all the
Properties, determined as of the Basic Payment Date immediately
preceding such payment date (or, if such payment date is a Basic
Payment Date, determined as of such Basic Payment Date), together
with interest, to the extent permitted by applicable Law, at the
Overdue Rate on such Payments and such Casualty Loss Value, from
the due date therefor as specified by Lessor to the date of
actual payment of all such Payments and Casualty Loss Value.
(f) Reletting.
Lessor may, but shall be under no obligation to, relet
any or all of the Properties, for the account of Lessee or
otherwise, for such term or terms (which may be greater or less
than the period which would otherwise have constituted the
balance of the Term) and on such conditions (which may include
concessions or free rent) and for such purposes as Lessor may
determine, and Lessor may collect, receive and retain the rents
resulting from such reletting. Lessor shall not be liable to
Lessee for any failure to relet any Property or for any failure
to collect any rent due upon such reletting.
(g) Termination or Rescission.
Lessor may terminate or rescind this Agreement as to
the Properties or exercise any other right or remedy which may be
available under Law or in equity or proceed by appropriate court
action to enforce the terms hereof or to recover damages for the
breach hereof.
Notwithstanding the foregoing provisions of this
Section, so long as (a) Lessor has not entered into a commitment
to sell the applicable Properties in the course of exercising
remedies following the occurrence of an Event of Default and (b)
Lessor has received from Lessee the amounts set forth below
within five (5) Business Days after notice from Lessor as to the
occurrence of an Event of Default (provided, however, that
Lessor's notice shall be deemed to occur automatically upon an
Event of Default under Sections 22(f) or 22(g), hereof), Lessee
may purchase all but not less than all of the Properties by
paying to Lessor an aggregate amount equal to (x) the greater of
Fair Market Sales Value at such time or Casualty Loss Value as of
the immediately preceding Basic Payment Date (or if such date is
a Basic Payment Date, as of such date), (y) all Basic Payments
and Supplemental Payments then due and owing or accrued and (z)
all Sales Expenses in connection with the sale of the Properties
by Lessor to Lessee. Upon Lessor's receipt and verification of
payment of the above-referenced amounts, Lessor shall, at
Lessee's cost and expense, execute and deliver special warranty
deeds and special warranty bills of sale, as appropriate, in
order to convey to Lessee the Properties on an as is, where-is
47
and with all faults basis, without recourse or representation or
warranty of any kind except as to the absence of Liens created by
or through Lessor.
In addition, Lessee shall be liable for any and all
Supplemental Payments due hereunder before or after any
termination hereof, including without limitation all costs and
expenses (including without limitation reasonable attorney's fees
and disbursements) incurred by reason of the occurrence of any
Event of Default or the exercise of Lessor's remedies with
respect thereto including without limitation all costs and
expenses incurred in connection with the return of the Properties
in accordance with the terms of Section 6 hereof or any appraisal
of the Properties. At any sale of the Properties, Lessor may bid
for and purchase such property. Except as otherwise expressly
provided above, no remedy referred to in this Section 23 is
intended to be exclusive, but each shall be cumulative and in
addition to any other remedy referred to above or otherwise
available to Lessor at Law or in equity; and the exercise or
beginning of exercise by Lessor of any one or more of such
remedies shall not preclude the simultaneous or later exercise by
Lessor of any or all such other remedies. No express or implied
waiver by Lessor of any Event of Default hereunder shall in any
way be or be construed to be, a waiver of any future or
subsequent Event of Default. To the extent permitted by
applicable Law, Lessee hereby waives any rights now or hereafter
conferred by statute or otherwise which may require Lessor,
otherwise than in accordance with the provisions of this Section
23, to sell, lease or otherwise use the Properties in mitigation
of Lessor's damages or otherwise to limit or modify any of
Lessor's rights or remedies under this Section 23; provided, to
the extent not waived by Lessee hereunder, Lessor shall comply
with all applicable Legal Requirements to mitigate damages in the
exercise of its remedies under this Section.
24. Lessor's Right to Perform for Lessee.
If Lessee fails to make any Supplemental Payment required to
be made by it hereunder or fails to perform or comply with any of
its agreements contained herein, Lessor may itself, make such
payment or perform or comply with such agreement, and the amount
of such payment and the amount of the expenses of Lessor incurred
in connection with such payment or the performance of or
compliance with such agreement, as the case may be, together with
interest thereon at the rate specified in Section 25 hereof,
shall, if not paid by Lessee to Lessor on demand, be deemed a
Supplemental Payment hereunder; provided, however, that no such
payment, performance or compliance by Lessor shall be deemed to
cure any Event of Default hereunder.
25. Late Charges.
Lessee shall pay to Lessor, upon demand, to the extent
permitted by applicable Law, interest on any Basic Payment not
paid when due, and on any Supplemental Payment or other amount
payable under this Agreement which is not paid when due, for any
period for which any of the same is overdue (without regard to
any grace period) at a rate equal to the Overdue Rate.
48
26. Further Assurances.
Lessor and Lessee agree to cooperate in good faith and to
execute and deliver such documents and further assurances
consistent with and in clarification of the characterization and
intent of the parties with respect to the Overall Transaction.
27. Transaction Costs, Fees and Expenses.
Lessee shall pay up to, but not to exceed, $50,000 of (a)
the legal fees of Lessor in connection with the negotiation,
preparation, execution and delivery of the Transaction Documents
and (b) the out-of-pocket expenses in connection with the initial
closing of the Overall Transaction, including but not limited to
the following: (i) expenses associated with any and all UCC
recording costs; (ii) expenses associated with the cost of
recording all memoranda of leases and deeds associated with the
initial closing (provided, that the cost of revenue stamps,
intangibles taxes or similar fees or taxes associated with such
recordation shall be payable by Lessee without limit); (iii)
expenses associated with UCC, tax and judgment lien searches
against Lessee deemed necessary or advisable by the Lessor; (iv)
copying costs, overnight delivery, telephone expenses and
facsimile charges incurred by Lessor or its counsel. To the
extent such legal fees and out-of-pocket expenses set forth above
in (a) and (b) exceed such $50,000 limit, Lessor shall be
responsible for the legal fees and expenses in excess of such
limit.
In addition to the $50,000 in legal fees and out-of-pocket
expenses set forth above, Lessee shall be responsible for the
following: (a) the fees and expenses of counsel employed or
retained by Lessee; (b) costs related to any and all title
insurance premiums associated with the Properties (provided,
Lessee shall not be responsible for any title insurance premiums
that may be charged due to Lessor's subsequent transfer of a
Property to another entity), (c) costs associated with any and
all surveys or updates to surveys necessary or appropriate in
connection with the Overall Transaction; (d) costs associated
with any and all appraisals or reappraisals (except as otherwise
specified in Section 11 (c) of this Agreement; and (e) costs
associated with revenue stamps, intangible taxes or similar fees
or taxes related to the recording of all memoranda of leases and
deeds (and or amendments thereto requested by Lessee).
Lessee shall also pay all out-of-pocket costs, fees and
expenses of Lessor in connection with the enforcement of the
Transaction Documents (and all amendments, modifications and
supplements thereto), including without limitation the fees and
expenses of Lessor's attorneys and any and all costs associated
with filings, searches and/or recordations.
28. Notices.
All notices provided for or required under the terms and
provisions hereof shall be in writing, and any such notice shall
be deemed given when personally delivered or when deposited with
a nationally recognized overnight delivery service, with the cost
therefor prepaid, or in the United States mails, with proper
postage prepaid, for first class certified mail, return receipt
requested, addressed if to Lessor or Lessee, at their respective
addresses as set forth herein or at such other address as either
of them shall, from time to time, designate in writing to the
other.
49
If to Lessor: NationsBanc Leasing & R.E. Corporation
000 Xxxxx Xxxxx Xxxxxx, XX0-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Manager of Corporate Lease
Administration
If to Lessee: Unifi Manufacturing, Inc.
0000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, III
Chief Financial Officer
with a copy to Lessee's counsel:
Xxxxxxx X. XxXxx, Esq.
Xxxxxxx, Xxxxxxx & Xxxxxx, L.L.P.
Xxxxxxxxxxxx Xxxxxxxx, Xxxxx 000
000 Xxxxx Xxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
29. End of Term Options.
(a) Election Procedure.
If this Agreement shall not have been earlier
terminated, Lessee (upon written notice to Lessor delivered not
later than the Option Election Notice Date) shall elect either to
deliver the Properties to Lessor pursuant to the terms of Section
6 hereof or purchase the Properties pursuant to the terms of
Section 29(b) hereof. Lessee shall be deemed to have elected the
option described in Section 29(b) hereof if Lessor has not
received the notice by the Option Election Notice Date. Upon the
making of one of the above-referenced elections, Lessee may not
revoke such election.
(b) Lessee's Purchase.
On the Termination Date, Lessee shall purchase all (but
not less than all) of the Properties for an amount equal to the
Fair Market Sales Value. Lessee shall also pay to (i) Lessor all
other Basic Payments then due and owing or accrued and (ii) to
the appropriate parties all other Supplemental Payments then due
and owing or accrued. Lessor shall also pay all Sales Expenses
in connection with its purchase of the Properties. Lessor's sale
of the Properties shall be on an as-is, where-is and with all
faults basis, without recourse to or representation or warranty
by Lessor except as to the absence of Liens on the Properties
created by or through Lessor. If Lessee has exercised its
purchase option, but has not prior to the Termination Date paid
all amounts for which it is obligated under this Section 29(b),
then Lessor in its sole discretion may elect to refuse to sell
50
the Properties to Lessee. If Lessor does elect to sell the
Properties to Lessee, then Lessee shall pay Lessor an amount
after the Termination Date equal to 110% of the daily average of
the Basic Payments during the term as determined by Lessor, on
the dates requested by Lessor and shall pay Lessor the pro rata
portion of such amount which is accrued but unpaid on the date
all of the amounts referenced in this Section 29(b) have been
paid to Lessor; provided, however, this provision is not intended
to grant Lessee a right to delay its payment obligations
respecting any purchase of the Properties by Lessee.
(c) Environmental Inspection.
If this Agreement has not been earlier terminated and on or
prior to the Option Election Notice Date Lessee has not given
notice of exercise of its option to purchase all, but not less
than all, the Properties on the Termination Date pursuant to
Section 29(b) hereof or for whatever reason if Lessee does not
purchase, all but not less than all, the Properties in accordance
with the terms of this Agreement on the Termination Date, then
not more than 120 days nor less than 60 days prior to the
Termination Date, Lessee at its expense shall cause to be
delivered to Lessor a Phase I environmental site assessment of
each Property recently prepared (no more than 30 days prior to
the date of delivery) by an independent recognized professional
selected by Lessor and in form, scope and content reasonably
satisfactory to Lessor. To the extent any such site assessment
is not timely delivered or is unsatisfactory to Lessor, Lessor
may require Lessee to purchase all of the Properties on the
Termination Date in accordance with the provisions of Section
29(b) hereof, and notwithstanding any prior election by Lessee
under Section 29(a) hereof to surrender the Properties to Lessor,
Lessee shall so purchase the Properties.
30. Federal and State Tax Consequences.
It is expressly agreed that for federal and state income Tax
purposes the parties entered into the transaction contemplated by
this Agreement intending such transaction to be characterized as
a true lease and for Lessor to be considered the owner of the
Properties for such Tax purposes. Consistent with this, Lessor
intends to claim the cost recovery deductions associated with the
Properties, and Lessee agrees not to take an inconsistent
position on its federal or state income Tax returns.
31. Miscellaneous.
Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or
unenforceability without invalidating or diminishing the parties'
rights under the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction. No term or provision of this Agreement may be
amended, altered, waived, discharged or terminated orally, but
only by an instrument in writing signed by a duly authorized
officer of the party against which the enforcement of the
amendment, alteration, waiver, discharge or termination is
sought. A waiver on any one occasion shall not be construed as a
waiver on a future occasion. All of the covenants, conditions
51
and obligations contained in this Agreement shall be binding upon
and shall inure to the benefit of the respective successors and
assigns of Lessor and (subject to the restrictions of Section 14
hereof) Lessee. This Agreement, and the other Transaction
Documents to which Lessor and Lessee are a party and each related
instrument, document, agreement and certificate delivered in
connection herewith or therewith collectively constitute the
entire agreement of Lessor and Lessee with respect to the
Properties, and cancels and supersedes any and all prior oral or
written understandings with respect thereto. This Agreement may
be executed in as many counterparts as shall be determined by the
parties hereto when so executed, each such counterpart shall be
binding on both parties hereto, notwithstanding that both parties
are not signatories to the same counterpart. THIS AGREEMENT
SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NORTH CAROLINA, INCLUDING WITHOUT
LIMITATION ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
LESSEE AND LESSOR HEREBY IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE
JURISDICTION OF A NORTH CAROLINA STATE OR FEDERAL COURT LOCATED
IN GUILFORD COUNTY, NORTH CAROLINA, FOR ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THE OVERALL TRANSACTION OR THIS
AGREEMENT AND LESSEE AND LESSOR HEREBY IRREVOCABLY AGREE THAT ALL
CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD
AND DETERMINED IN SUCH NORTH CAROLINA COURT, OR TO THE EXTENT
PERMITTED BY LAW, SUCH FEDERAL COURT. LESSEE AND LESSOR HEREBY
IRREVOCABLY WAIVE, TO THE FULLEST EXTENT THEY MAY EFFECTIVELY DO
SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF
ANY ACTION OR PROCEEDING. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, LESSEE HEREBY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY
JURY IN ACTIONS OR PROCEEDINGS BROUGHT IN RESPECT OF THE OVERALL
TRANSACTION, THIS AGREEMENT OR THE LEASE SUPPLEMENT.
32. Interest Rate Calculations.
All rate calculations made pursuant to this Agreement
(including without limitation any calculation of the Overdue
Rate) shall be computed on the basis of the actual number of days
elapsed over a year of 360 days.
33. Taxes.
Subject to the provisions of Sections 18A and 18B hereof,
Lessor and Lessee hereby agree that to the extent permitted by
Law (a) Lessee will prepare and file all returns and other
appropriate documentation in regard to Taxes on the Properties
(including without limitation real property, personal property
and ad valorem), (b) pay all such Taxes and (c) reimburse Lessor
for any and all such Taxes previously paid by Lessor.
34. Utility Charges.
52
Lessee shall pay or cause to be paid all charges for
electricity, power, gas, oil, water, telephone, sanitary sewer
service and all other rents, utilities and operating expenses of
any kind or type used in or on any Property and related real
property during the Term. Upon Lessor's request, Lessee shall
provide from time to time Lessor with evidence of all such
payments referenced in the foregoing sentence. Lessee shall be
entitled to receive any credit or refund with respect to any
utility charge paid by Lessee. Unless an Event of Default shall
have occurred and be continuing, the amount of any credit or
refund received by Lessor on account of any utility charge paid
by Lessee, net of the costs and expenses incurred by Lessor in
obtaining such credit or refund, shall be promptly paid over to
Lessee. All charges for utilities imposed with respect to any
Property for a period during which this Lease expires or
terminates shall be adjusted and prorated on a daily basis
between Lessor and Lessee, and each party shall pay or reimburse
the other for such party's pro rata share thereof.
35. Article 2A.
To the extent permitted by applicable Law, this Agreement
shall be deemed a "finance lease" under Section 2A-103(g) of the
Uniform Commercial Code. Lessee waives any and all rights and
remedies conferred upon a lessee by Sections 2A-508 through
2A-522 of the Uniform Commercial Code as enacted in any relevant
jurisdiction, including without limitation any rights of Lessee
(a) to cancel or repudiate this Agreement, the Lease Supplement
or any other supplement or amendment relating to this Agreement,
(b) to reject or evoke acceptance of the Properties or any
component thereof and (c) to recover from Lessor any general or
consequential damages, for any reason whatsoever.
53
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized representatives
as of the date first above written.
NATIONSBANC LEASING & R.E.
CORPORATION
By: M. XXXXXXX XXXX
Name: M. Xxxxxxx Xxxx
Title: Senior Vice President
UNIFI MANUFACTURING, INC.
By:
Name:
Title:
COUNTERPART NO. __3___ OF __4___ SERIALLY NUMBERED MANUALLY
EXECUTED COUNTERPARTS. TO THE EXTENT IF ANY THAT THIS DOCUMENT
CONSTITUTES CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE, NO
SECURITY INTEREST IN THIS DOCUMENT MAY BE CREATED THROUGH THE
TRANSFER AND POSSESSION OF ANY COUNTERPART OTHER THAN COUNTERPART
NO. 1.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized representatives
as of the date first above written.
NATIONSBANC LEASING & R.E.
CORPORATION:
By:
Name:
Title:
UNIFI MANUFACTURING, INC.
By: XXXXXX X. XXXXX, III
Name: Xxxxxx X. Xxxxx, III
Title: Vice Pres. & CFO
COUNTERPART NO. __3___ OF __4___ SERIALLY NUMBERED MANUALLY EXECUTED
COUNTERPARTS. TO THE EXTENT IF ANY THAT THIS DOCUMENT CONSTITUTES
CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE, NO SECURITY
INTEREST IN THIS DOCUMENT MAY BE CREATED THROUGH THE TRANSFER AND
POSSESSION OF ANY COUNTERPART OTHER THAN COUNTERPART NO. 1.
Schedule A
Basic Payment Factors
Basic Payment Basic Payment
Date Factor*
20-May-97 1.86363636%
1-Jul-97 4.21246276%
1-Jan-98 2.87880684%
1-Jul-98 7.01891076%
1-Jan-99 2.84482665%
1-Jul-99 7.05289095%
1-Jan-00 2.80830473%
1-Jul-00 7.08941287%
1-Jan-01 2.75532676%
1-Jul-01 7.14239084%
1-Jan-02 2.59125055%
1-Jul-02 7.30646705%
1-Jan-03 2.41490145%
1-Jul-03 9.18001735%
1-Jan-04 2.16188611%
1-Jul-04 9.90613000%
1-Jan-05 10.51915909%
1-Jul-05 1.54885705%
1-Jan-06 1.54885705%
1-Jul-06 10.51915909%
1-Jan-07 11.22924204%
1-Jul-07 0.83877407%
1-Jan-08 11.63294400%
1-Jul-08 0.43507211%
1-Jan-09 12.06801611%
1-Jul-09 0.00000000%
1-Jan-10 12.06801611%
1-Jul-10 0.00000000%
1-Jan-11 10.17973371%
1-Jul-11 0.00000000%
1-Jan-12 8.86364476%
1-Jul-12 1.03407287%
1-Jan-13 0.00000000%
* Expressed as a percentage of Acquisition Cost.
A-1
Schedule A-1
Basic Payments
Basic Payment Basic
Date Payment
20-May-97 512,500.00
1-Jul-97 1,158,427.26
1-Jan-98 791,671.88
1-Jul-98 1,930,200.46
1-Jan-99 782,327.33
1-Jul-99 1,939,545.01
1-Jan-00 772,283.80
1-Jul-00 1,949,588.54
1-Jan-01 757,714.86
1-Jul-01 1,964,157.48
1-Jan-02 712,593.90
1-Jul-02 2,009,278.44
1-Jan-03 664,097.90
1-Jul-03 2,524,504.77
1-Jan-04 594,518.68
1-Jul-04 2,724,185.75
1-Jan-05 2,892,768.75
1-Jul-05 425,935.69
1-Jan-06 425,935.69
1-Jul-06 2,892,768.75
1-Jan-07 3,088,041.56
1-Jul-07 230,662.87
1-Jan-08 3,199,059.60
1-Jul-08 119,644.83
1-Jan-09 3,318,704.43
1-Jul-09 0.00
1-Jan-10 3,318,704.43
1-Jul-10 0.00
1-Jan-11 2,799,426.77
1-Jul-11 0.00
1-Jan-12 2,437,502.31
1-Jul-12 284,370.04
1-Jan-13 0.00
Schedule B
Casualty Loss Value
Casualty Loss Casualty Loss
Value Date Value*
20-May-97 101.49000007%
1-Jun-97 99.96144567%
1-Jul-97 100.75913273%
1-Aug-97 97.21811982%
1-Sep-97 97.96504582%
1-Oct-97 98.73525702%
1-Nov-97 99.50707582%
1-Dec-97 100.30894662%
1-Jan-98 101.06016585%
1-Feb-98 98.92181091%
1-Mar-98 99.76450618%
1-Apr-98 100.52985051%
1-May-98 101.28134822%
1-Jun-98 102.10675349%
1-Jul-98 102.88121705%
1-Aug-98 96.60971480%
1-Sep-98 97.39252996%
1-Oct-98 98.13252825%
1-Nov-98 98.94013673%
1-Dec-98 99.75627618%
1-Jan-99 100.36203855%
1-Feb-99 98.12364665%
1-Mar-99 98.73075716%
1-Apr-99 99.33854698%
1-May-99 99.94745182%
1-Jun-99 100.55704513%
1-Jul-99 101.16776273%
1-Aug-99 94.69484549%
1-Sep-99 95.27539087%
1-Oct-99 95.85694331%
1-Nov-99 96.43907549%
1-Dec-99 97.02179040%
1-Jan-00 97.60552349%
1-Feb-00 95.38154276%
1-Mar-00 95.96646062%
1-Apr-00 96.55197549%
1-May-00 97.13885865%
1-Jun-00 97.72634880%
1-Jul-00 98.31521727%
B-1
Schedule B
Casualty Loss Value
Casualty Loss Casualty Loss
Value Date Value*
1-Aug-00 91.78469716%
1-Sep-00 92.34411222%
1-Oct-00 92.90482051%
1-Nov-00 93.46606036%
1-Dec-00 94.02783444%
1-Jan-01 94.59091378%
1-Feb-01 92.39911422%
1-Mar-01 92.96318796%
1-Apr-01 93.54682785%
1-May-01 94.14408302%
1-Jun-01 94.74539058%
1-Jul-01 95.35268295%
1-Aug-01 88.77223244%
1-Sep-01 89.33662778%
1-Oct-01 89.90756985%
1-Nov-01 90.48100618%
1-Dec-01 91.05694775%
1-Jan-02 91.63984644%
1-Feb-02 89.61590338%
1-Mar-02 90.18605087%
1-Apr-02 90.75858916%
1-May-02 91.33791015%
1-Jun-02 91.91966164%
1-Jul-02 92.50803564%
1-Aug-02 85.74340513%
1-Sep-02 86.28760887%
1-Oct-02 86.83827105%
1-Nov-02 87.39133898%
1-Dec-02 87.94682309%
1-Jan-03 88.50881498%
1-Feb-03 86.64212975%
1-Mar-03 87.19274095%
1-Apr-03 87.74575760%
1-May-03 88.30626938%
1-Jun-03 88.86922993%
1-Jul-03 89.43972898%
1-Aug-03 80.77100280%
1-Sep-03 81.28452764%
1-Oct-03 81.80537505%
B-2
Schedule B
Casualty Loss Value
Casualty Loss Casualty Loss
Value Date Value*
1-Nov-03 82.32849793%
1-Dec-03 82.85390622%
1-Jan-04 83.38668891%
1-Feb-04 81.74538280%
1-Mar-04 82.26823709%
1-Apr-04 82.79337560%
1-May-04 83.32535598%
1-Jun-04 83.86168691%
1-Jul-04 84.40490422%
1-Aug-04 74.97778411%
1-Sep-04 75.45888665%
1-Oct-04 75.94764971%
1-Nov-04 76.43854807%
1-Dec-04 76.93678767%
1-Jan-05 77.21910102%
1-Feb-05 66.92793622%
1-Mar-05 67.22976105%
1-Apr-05 67.49451164%
1-May-05 67.79288462%
1-Jun-05 68.12660898%
1-Jul-05 68.36084920%
1-Aug-05 67.11436345%
1-Sep-05 67.45383680%
1-Oct-05 67.68167207%
1-Nov-05 68.12881484%
1-Dec-05 68.61568593%
1-Jan-06 69.11788658%
1-Feb-06 68.01059695%
1-Mar-06 68.45610218%
1-Apr-06 68.94295338%
1-May-06 69.39542287%
1-Jun-06 69.89368785%
1-Jul-06 70.35483142%
1-Aug-06 59.54253982%
1-Sep-06 60.23433687%
1-Oct-06 60.83711422%
1-Nov-06 61.48282931%
1-Dec-06 62.07286444%
1-Jan-07 63.01508335%
B-3
Schedule B
Casualty Loss Value
Casualty Loss Casualty Loss
Value Date Value*
1-Feb-07 52.29894836%
1-Mar-07 52.88475422%
1-Apr-07 53.51026720%
1-May-07 54.17181178%
1-Jun-07 54.79480800%
1-Jul-07 55.35594684%
1-Aug-07 55.12725076%
1-Sep-07 55.75477255%
1-Oct-07 56.39970825%
1-Nov-07 57.00451676%
1-Dec-07 57.67369789%
1-Jan-08 58.50203055%
1-Feb-08 47.36583338%
1-Mar-08 47.87712727%
1-Apr-08 48.46146145%
1-May-08 49.01690873%
1-Jun-08 49.60443520%
1-Jul-08 50.29549687%
1-Aug-08 50.43335982%
1-Sep-08 51.06955298%
1-Oct-08 51.62014818%
1-Nov-08 52.19089189%
1-Dec-08 52.94520509%
1-Jan-09 53.78468153%
1-Feb-09 42.52274055%
1-Mar-09 43.12903607%
1-Apr-09 43.44103716%
1-May-09 43.67187022%
1-Jun-09 44.00299389%
1-Jul-09 44.23783345%
1-Aug-09 44.47816720%
1-Sep-09 44.86956302%
1-Oct-09 45.15165582%
1-Nov-09 45.43672542%
1-Dec-09 45.94093905%
1-Jan-10 46.55739196%
1-Feb-10 34.68835258%
1-Mar-10 34.88939800%
1-Apr-10 35.20923858%
B-4
Schedule B
Casualty Loss Value
Casualty Loss Casualty Loss
Value Date Value*
1-May-10 35.41472964%
1-Jun-10 35.76088844%
1-Jul-10 35.97094273%
1-Aug-10 36.18320029%
1-Sep-10 36.53432833%
1-Oct-10 36.75127240%
1-Nov-10 36.97050582%
1-Dec-10 37.45889622%
1-Jan-11 38.08721625%
1-Feb-11 28.05552265%
1-Mar-11 28.20510182%
1-Apr-11 28.48780375%
1-May-11 28.64103836%
1-Jun-11 28.95267076%
1-Ju1-11 29.10972462%
1-Aug-11 29.26842596%
1-Sep-11 29.58445382%
1-Oct-11 29.74707724%
1-Nov-11 29.91141676%
1-Dec-11 30.38355218%
1-Jan-12 31.01707404%
1-Feb-12 22.25693927%
1-Mar-12 22.36152542%
1-Apr-12 22.61425164%
1-May-12 22.72182178%
1-Jun-12 23.00628305%
1-Jul-12 23.11704571%
1-Aug-12 22.18682575%
1-Sep-12 22.46712880%
1-Oct-12 22.57412273%
1-Nov-12 22.68224575%
1-Dec-12 23.13817840%
1-Jan-13 24.00000000%
* Expressed as a percentage of Acquisition Cost.
B-5
EXHIBIT A
Description of Properties
Property No. 1 (Plant #57):
The Property having a street address of 0000 Xxxxx Xxxxx Xxxx,
Xxxxxxx, Xxxxx Xxxxxxxx, which includes each parcel of Land
referenced in the legal description below (see Annex 1A attached
hereto) and all Improvements, all Fixtures and all Equipment
(regarding such Equipment, see Annex 1B attached hereto) on each
such parcel of Land or otherwise associated therewith.
ANNEX 1A
Tract 1 & 2: 0000 Xxxxx Xxxxx Xxxx, Xxxxxxx, XX
Unifi Plants 57 & 58
BEGINNING at a set iron rod and control corner located on the northern
margin of the right-of-way of U.S. Highway 421, said corner being located
South 56 degrees 38 minutes 03 seconds East 907.93 feet from N.C.G.S.
marker "Animal", said corner also being South 39 degrees 20 minutes 50
seconds East along said northern margin of the right-of-way of U.S. Highway
421 292.40 feet from a found iron rod marking the westernmost corner of the
property of Xxxxxx X. Xxxxxxx, Xx. acquired by Deed recorded in Book 425,
Page 102 of Xxx County Public Registry, said found iron lying and being
South 64 degrees 30 minutes 10 seconds East 634.71 feet from said N.C.G.S.
marker "Animal"; and running thence, along a new division line in Xxxxxx X.
Xxxxxxx, Xx. property from said set iron rod and control corner, North 50
degrees 39 minutes 10 seconds East passing through a set iron rod at 50.0
feet, a total distance of 1115.00 feet to a set iron rod and new corner of
Xxxxxxx; thence along another new division line in Xxxxxxx' property, South 39
degrees 20 minutes 50 seconds East 885.26 feet to a set iron rod; thence along
a third new division line in Xxxxxxx' Property South 50 degrees 39 minutes 10
seconds West passing through a set iron rod at 1,065.00 feet a total distance
of 1,115.00 feet to a set iron rod on the northern margin of the right-of-way
of U.S. Highway 421 said iron rod being North 81 degrees 52 minutes 25
seconds East 158.37 feet from a nail located at the center of the crossover of
U.S. Highway 421; thence with said northern margin of the right-of-way of
U.S. Highway 421, North 39 degrees 20 minutes 50 seconds West passing
through a concrete right-of-way monument at 113.47 feet a total distance of
885.26 feet to the set iron rod and control corner, marking the point and
place of BEGINNING and containing 22.66 acres more or less according to
a survey from Xxxxxx X. Xxxxxxx, Xx. by Xxxxx-Xxxxxx Engineering Associates,
P.A., dated June 17, 1993 to which reference is hereby made.
DESCRIPTION OF EASEMENTS ENCUMBERING THE PROPERTIES
First Easement - Portion of Tract 1 & 2
BEGINNING at a set iron rod and control corner located on the northern
margin of the right-of-way of U.S. Highway 421, said corner being located South
56 degrees 38 minutes 03 seconds East 907.93 feet from N.C.G.S. marker "Animal",
said corner also being South 39 degrees 20 minutes 50 seconds East along said
northern margin of the right-of-way of U.S. Highway 421 292.40 feet from a
found iron rod marking the western most corner of the property by Xxxxxx X.
Xxxxxxx, Xx. acquired by Deed recorded in Book 425, Page 102 of the Xxx County
Public Registry, said found iron lying and being South 64 degrees 30 minutes
10 seconds East 634.71 feet from said N.C.G.S. marker "Animal"; and running
thence, along a new division line in Xxxxxx X. Xxxxxxx, Xx. property from
said set iron and control corner, North 50 degrees 39 minutes 10 seconds
East 50.00 feet to a set iron rod; thence South 39 degrees 20 minutes 50
seconds East 50.00 feet to a point; thence South 50 degrees 39 minutes 10
seconds West 50.00 feet to apoint on the northern margin of the right-of-way
of U.S. Highway 421; thence, with said northern margin of the right-of-way
of U.S. Highway 421, North 39 degrees 20 minute 50 seconds West 50.00 feet to
the point of BEGINNING, said easement being located at the northwestern corner
of that certain parcel containing 22.66 acres, more or less, according to a
survey for Xxxxxx X. Xxxxxxx, Xx. by Xxxxx-Xxxxxx Engineering Associates, P.A.,
dated June 17, 1993, to which reference is hereby made.
Second Easement - Portion of Tract 1 & 2
BEGINNING at a set iron rod located on the northern margin of the right-
of-of way of U.S. Highway 421, said corner being located North 81 degrees 52
minutes 25 seconds East 158.37 feet from a nail located at the center of the
crossover of U.S. Highway 421, North 39 degrees 20 minutes 50 seconds West
100.00 feet to a point; thence, North 50 degrees 39 minutes 10 seconds East
50.00 feet to a point; thence, South 39 degrees 20 minutes 50 seconds East
100 feet to a set iron rod in the southern boundary line of the 22.66 acres
parcel hereinafter referenced; thence, with said boundary line South 50 degrees
39 minutes 10 seconds West 50.00 feet to the point of BEGINNING, said easement
being located at the southwestern corner of that certain parcel containing
22.66 acres, more or less, according to a survey for Xxxxxx X. Xxxxxxx, Xx.
by Xxxxx-Xxxxxx Engineering Associates, P.A. dated June 17, 1993, to which
reference is hereby made.
ANNEX 1B
PERSONAL PROPERTY
PLANT ASSET
SITE NUMBER DESCRIPTION
Plant No. 57 7116 Heat Pump
0000 Xxxxx Xxxxx Xxxx 0000 Air Conditioner
Sanford, NC 7123 Trane Heat Pump
7166 Trane Air Conditioning
7170 Window A/C Unit
9880 Filtration
9881 AC Unit Computer Room
Property No. 2 Plant #58):
The Property having a street address of 0000 Xxxxx Xxxxx Xxxx,
Xxxxxxx, Xxxxx Xxxxxxxx, which includes each parcel of Land
referenced in the legal description below (see Annex 2A attached
hereto) and all Improvements, all Fixtures and all Equipment
(regarding such Equipment, see Annex 2B attached hereto) on each
such parcel of Land or otherwise associated therewith.
ANNEX 2A
Tract 1 & 2: 0000 Xxxxx Xxxxx Xxxx, Xxxxxxx, XX
Unifi Plants 57 & 58
BEGINNING at a set iron rod and control corner located on the northern
margin of the right-of-way of U.S. Highway 421, said corner being located
South 56 degrees 38 minutes 03 seconds East 907.93 feet from N.C.G.S.
marker "Animal", said corner also being South 39 degrees 20 minutes 50
seconds East along said northern margin of the right-of-way of U.S. Highway
421 292.40 feet from a found iron rod marking the westernmost corner of the
property of Xxxxxx X. Xxxxxxx,Xx. acquired by Deed recorded in Book 425,
Page 102 of the Xxx County Public Registry, said found iron lying and being
South 64 degrees 30 minutes 10 seconds East 634.71 feet from said N.C.G.S.
marker "Animal"; and running thence, along a new division line in Xxxxxx X.
Xxxxxxx, Xx. property from said set iron rod and control corner, North 50
degrees 39 minutes 10 seconds East passing through a set iron rod at 50.0
feet, a total distance of 1115.00 feet to a set iron rod and new corner of
Xxxxxxx; thence along another new division line in Xxxxxxx' property, South 39
degrees 20 minutes 50 seconds East 885.26 feet to a set iron rod; thence along
a third new division line in Xxxxxxx' Property South 50 degrees 39 minutes 10
seconds West passing through a set iron rod a 1,065.00 feet a total distance
of 1,115.00 feet to a set iron rod on the northern margin of the right-of-way
of U.S. Highway 421 said iron rod being North 81 degrees 52 minutes 25
seconds East 158.37 feet from a nail located at the center of the crossover of
U.S. Highway 421; thence with said northern margin of the right-of-way of
U.S. Highway 421, North 39 degrees 20 minutes 50 seconds West passing through
a concrete right-of-way monument at 113.47 feet a total distance of 885.26
feet to the set iron rod and control corner, marking the point and place of
BEGINNING and containing 22.66 acres more or less according to a survey for
Xxxxxx X. Xxxxxxx, Xx. by Xxxxx-Xxxxxx Engineering Associates, P.A. dated
June 17, 1993 to which reference is hereby made.
DESCRIPTION OF EASEMENTS ENCUMBERING THE PROPERTIES
First Easement - Portion of Tract 1 & 2:
BEGINNING at a set iron rod and control corner located on the northern
margin of the right-of-way of U.S. Highway 421, said corner being located
South 56 degrees 38 minutes 03 seconds East 907.93 feet from N.C.G.S. marker
"Animal", said corner of the right-of-way of U.S. Highway 421 292.40 feet from
a found iron rod marking the western most corner of the property of Xxxxxx X.
Xxxxxxx, Xx. acquired by Deed recorded in Book 425, Page 102 of the Xxx County
Public Registry, said found iron lying and being South 64 degrees 30 minutes 10
seconds East 634.71 feet from said N.C.G.S. marker "Animal"; and running thence,
along a new division line in Xxxxxx X. Xxxxxxx, Xx. property from said set iron
rod and control corner, North 50 degrees 39 minutes 10 seconds East 50.00 feet
to a set iron rod; thence South 39 degrees 20 minutes 50 seconds East 50.00
feet to a point; thence South 50 degrees 39 minutes 10 seconds West 50.00 feet
to a point on the northern margin of the right-of-way of U.S. Highway 421, North
39 degrees 20 minutes 50 seconds West 50.00 feet to the point of BEGINNING, said
easement being located at the northwestern corner of that certain parcel
containing 22.66 acres, more or less, according to a survey for Xxxxxx X.
Xxxxxxx, Xx. by Xxxxx-Xxxxxx Engineering Associates, P.A. dated June 17, 1993,
to which reference is hereby made.
Second Easement - Portion of Tract 1 & 2
BEGINNING at a set iron rod located on the northern margin of the right-of-
way of U.S. Highway 421, said corner being located North 81 degrees 52 minutes
25 seconds East 158.37 feet from a nail located at the center of the crossover
of U.S. Highway 421; thence, with said northern margin of the right-of-way of
U.S. Highway 421, North 39 degrees 20 minutes 50 seconds West 100.00 feet to a
point; thence, North 50 degrees 39 minutes 10 seconds East 50.00 feet to a
point; thence, South 39 degrees 20 minutes 50 seconds East 100 feet to a set
iron rod in the southern boundary line of the 22.66 acres parcel hereinafter
referenced; thence with said boundary line, South 50 degrees 39 minutes 10
seconds West 50.00 feet to the point of BEGINNING, said easement being located
at the southwestern corner of that certain parcel containing 22.66 acres, more
or less, according to a survey for Xxxxxx X. Xxxxxxx, Xx. by Xxxxx-Xxxxxx
Engineering Associates, P.A. dated June 17, 1993, to which reference is
hereby made.
ANNEX 2B
PLANT ASSET
SITE NUMBER DESCRIPTION
Plant Xx. 00 00000 X/X Xxxxxxxx
2000 Xxxxx Trail Road 11120 Front Office A/C
Sanford, NC 7210 Filtration System
Property No. 3 (Plant #59):
The Property having a street address of 0000 Xxxxx Xxxxx Xxxx,
Xxxxxxx, Xxxxx Xxxxxxxx, which includes each parcel of Land
referenced in the legal description below (see Annex 3A attached
hereto) and all Improvements, all Fixtures and all Equipment
(regarding such Equipment, see Annex 3B attached hereto) on each
such parcel of Land or otherwise associated therewith.
ANNEX 3A
BEGINNING at an existing concrete monument in the southern margin of the
right-of-way of U.S. Highway 421, said monument marking the easternmost
corner of the Xxxxxxxxx property, Deed Book 55, Page 371, Xxx County
Registry and the northernmost corner of the property of Xxxxxx X. Xxxxxxx,
Xx. on said right-of-way, acquired by Deed recorded in Book 499, Page 694,
Xxx County Registry; and running thence with said margin of the right-of-way
South 41 degrees 17 minutes 19 seconds East 910.86 feet to an existing
concrete monument; thence continuing with said right-of-way, South 41
degrees 13 minutes 58 seconds East passing through a second existing
concrete monument at 60.08 feet a total distance of 219.54 feet to a point in
the centerline of a creek; thence with the center line of said creek the
following twenty-one courses and distances: 1) South 68 degrees 17 minutes
46 seconds West 14.24 feet to a point; 2) South 75 degrees 14 minutes 24
seconds West 39.60 feet to a point; 3) North 83 degrees 50 minutes 13
seconds West 36.26 feet to a point; 4) South 52 degrees 39 minutes 59
seconds West 44.68 feet to a point; 5) North 83 degrees 25 minutes 24
seconds West 30.93 feet to a point; 6) South 75 degrees 22 minutes 43
seconds West 77.55 feet to a point; 7) South 66 degrees 04 minutes 40
seconds West 79.56 feet to a point; 8) North 89 degrees 56 minutes 17
seconds West 110.15 feet to a point; 9) South 35 degrees 20 minutes 45
seconds West 43.40 feet to a point; 10) South 81 degrees 29 minutes 01
seconds West 111.45 feet to a point; 11) South 87 degrees 45 minutes 48
seconds West 93.72 feet to a point; 12) South 77 degrees 26 minutes 58
seconds West 109.11 feet to a point; 13) South 56 degrees 33 minutes 06
seconds West 90.00 feet to a point; 14) South 56 degrees 13 minutes 54
seconds West 56.32 feet to a point; 15) South 41 degrees 54 minutes 39
seconds West 100.70 feet to a point; 16) South 40 degrees 25 minutes 33
seconds West 81.54 feet to a point; 17) South 55 degrees 42 minutes 39
seconds West 158.29 feet to a point; 18) South 53 degrees 15 minutes 36
seconds West 124.01 feet to a point; 19) South 52 degrees 14 minutes 42
seconds West 128.50 feet to a point; 20) South 44 degrees 32 minutes 46
seconds West 111.12 feet to a set iron pipe; 21) South 53 degrees 27 minutes
04 seconds West 110.47 feet to a set iron pipe in Xxxxxxxxx'x eastern line
(Deed Book 000, Xxxx 000, Xxx Xxxxxx Xxxxxxxx); thence with Xxxxxxxxx'x east
line North 00 degrees 11 minutes 56 seconds East 316.00 feet to an existing
iron pipe and control corner; thence continuing with Xxxxxxxxx, North 77
degrees 40 minutes 52 seconds West 207.86 feet to an existing iron pipe and
corner with Xxxxxxxxx; thence with the Xxxxxxxxx property acquired by Deeds
recorded in Book 253, Page 746 and Book 55, Page 371, Xxx County Registry,
North 12 degrees 16 minutes 46 seconds East 1336.83 feet to an existing iron
pipe in a gravel drive and a corner with Xxxxxxxxx; thence with the division
line between Xxxxxxxxx and Xxxxxxx, South 86 degrees 00 minutes 02 secondes
East 661.25 feet to the existing concrete monument, marking the point and
place of BEGINNING and containing 33.58 acres more or less according to a
survey for Xxxxxx X. Xxxxxxx, Xx. dated June 17, 1993 by Xxxxx-Xxxxxx
Engineering Associates, P.A. to which reference is hereby made.
Third Easement - Portion of Tract 3:
BEGINNING at a point in the centerline of a creek as same intersects with the
southern margin of the right-of-way of U.S. Highway 421, said beginning point
being the southeastern corner of the 33.58 acres parcel hereinafter referenced;
running thence, from said beginning, with the centerline of said creek, the
following four courses and distances: (1) South 68 degrees 17 minutes 46
seconds West 14.24 feet to a point; (2) South 75 degrees 14 minutes 24 seconds
West 39.60 feet to a point; (3) North 83 degrees 50 minutes 13 seconds West
36.26 feet to a point; (4) South 52 degrees 39 minutes 59 seconds West 21.51
feet to a point; thence, leaving the creek, North 41 degrees 13 minutes 58
seconds West 174.83 feet to a point; thence, North 48 degrees 46 minutes 02
seconds East 100 feet to an existing concrete monument in the southern
margin of the right-of-way of U.S. Highway 421; thence, with the
southern margin of said right-of-way, South 41 degrees 13 minutes 48 seconds
East 219.54 feet to the point of BEGINNING, said easement being located at
the southeastern corner of that certain parcel containing 33.58 acres, more
or less, according to a survey for Xxxxxx X. Xxxxxxx, Xx. by Xxxxx-Xxxxxx
Engineering Associates, P.A. dated June 17, 1993, to which reference is
hereby made.
ANNEX 3B
PLANT ASSET
SITE NUMBER DESCRIPTION
Plant No. 59 7267 Filtration System (80% Complete)
0000 Xxxxx Xxxxx Xxxx 0000 Filtration System (60% Complete)
Sanford, NC 7374 Filtration System (90% Complete)
8961 Tech Serv Off A/C
8973 Filtration System
8994 Filtration Expansion
Property No. 4 (Plant #54):
The Property having a street address of U.S. Highway 311, Walnut
Cove, North Carolina, which includes each parcel of Land
referenced in the legal description below (see Annex 4A attached
hereto) and all Improvements, all Fixtures and all Equipment
(regarding such Equipment, see Annex 4B attached hereto) on each
such parcel of Land or otherwise associated therewith.
ANNEX 4A
Tract 4: XX Xxxxxxx 000, Xxxxxx Xxxx, XX
Unifi Plant #54
BEGINNING at an iron stake located within the right-of-way of US Highway
311 and marking the northeast corner of Xxxxx X. Xxxxxx (Book 263, Page 765),
said point further being South 35 degrees 44 minutes 20 seconds East 33.87 feet
and South 84 degrees 13 minutes 30 seconds West 174.55 feet from a right of way
monument; thence within the right xx xxx xx XX Xxxxxxx 000 to following courses
and distances North 79 degrees 15 minutes 40 seconds East 297.0 feet to an iron,
North 71 degrees 15 minutes 40 seconds East 234.30 feet to an iron, North 60
degrees 45 minutes 40 seconds East 561.0 feet to an iron, and North 74 degrees
45 minutes 40 seconds East 319.28 feet to an iron; thence leaving US Highway
311 South 5 degrees 32 minutes 43 seconds West (passing over an existing iron
stake being a control corner at 26.85 feet) for a total distance 443.51 feet to
an existing iron stake (control corner) and marking the southwest corner of
Xxxxxx X. Xxxxx (Book 188, Page 13); thence along the south line of said Xxxxx
South 85 degrees 45 minutes 56 seconds East 199.88 feet to an existing iron
stake marking the southwest corner of Xxxxx Xxxxxxx (Book 334, Page 293);
thence along the south line of said Xxxxxxx South 85 degrees 44 minutes 18
seconds East 217.68 feet to an existing iron stake in the West line of C.
Xxxxxxx Xxxxx (Book 234, Page 866); thence along the west line of said Merry
South 5 degrees 40 minutes 9 seconds West 1999.50 feet to an iron; thence South
84 degrees 19 minutes 51 seconds East 198.00 feet to an iron; thence South
5 degrees 40 minutes 9 seconds West 938.05 feet to an iron; thence along the
north line of Xxx. Xxxx Xxxx Heirs (Book 291, Page 4) North 84 degrees 19
minutes 51 seconds West 942.52 feet to an iron in the east margin of said
Xxxxxx (Book 263, Page 765); thence along the east line of said Xxxxxx North 5
degrees 40 minutes 9 seconds Eat 1700.0 feet to an iron; thence North 35
degrees 44 minutes 20 seconds West 1372.89 feet to an iron on the south margin
of US Highway 311; thence continuing North 35 degrees 44 minutes 20 seconds
West 33.87 feet to an iron, THE POINT OF BEGINNING. This description as per
as-built survey for Vintage Yarns by X. X. Xxxxxxxxx and Associates, RLS, dated
May 23, 1990, to which reference is made for more specific description. Being
the same property described in Book 32, Page 1892.
Save and except from the above described property that 0.918 acre tract
conveyed to the Town of Walnut Cove by deed recorded March 22, 1993 in
Book 364 at Page 772 of the Xxxxxx County Public Registry (designated
thereon as Tract 1) and subject to the 30 feet easement granted to the
Town by said deed (designated at Tract 2).
ANNEX 4B
PLANT ASSET
SITE NUMBER DESCRIPTION
Plant No. 54 8406 Air Filtration System
US Xxxxxxx 000 0000 Xxxxx Xxxxxxxx - XXXX (Xxx #1466)
Walnute Cove, NC 9212 A/C Duct for Office & Buster Fan
9213 Air Filtration System
9214 Air Filtration System
Property No. 5 (Plants #51-53):
The Property having a street address of NC Highway 87, Eden,
North Carolina, which includes each parcel of Land referenced in
the legal description below (see Annex 5A attached hereto) and
all Improvements, all Fixtures and all Equipment (regarding such
Equipment, see Annex 5B attached hereto) on each such parcel of
Land or otherwise associated therewith.
ANNEX 5A
Tract 5: XX Xxxxxxx 00, Xxxx, XX
Unifi Plants #51 - 53
BEGINNING at an existing iron stake located within the right of way of NC
Highway 87, said beginning point marking the northeast corner of Xxxxxxxx X.
Xxxxxx (Book 596, Page 249); thence leaving NC Xxxxxxx 00 Xxxxx 00 degrees 16
minutes 46 seconds West 199.18 feet to an existing iron stake, South 50 degrees
7 minutes 39 Seconds West 133.34 feet to an existing iron stake, South 50
degrees 14 minutes 49 seconds West 90.14 feet to an existing iron stake, South
50 degrees 13 minutes 58 West 150.16 feet to an existin iron stake, South 50
degrees 21 minute 28 seconds West 199.29 feet to an iron stake in old pine xxxxx
xxxxx (control corner), South 48 degrees 15 minutes West 1411.70 feet to an
iron stake (control corner), and South 47 degrees 54 minutes 17 seciond West
279.24 feet to an existing iron stake on the north right of way margin of SR
1560 and marking the southeast corner of Xxxxxx X. Xxxxxx (Book 781, Page
435); thence leaving SR 1560 and along the east line of Xxxxxx and Xxxxxx X.
Xxxxxx (Book 787, Page 790) North 31 degrees 48 minutes 51 seconds West
1397.10 feet to an existing iron stake; thence North 55 degrees 35 minutes 25
seconds East 323.76 feet to an existing iron stake; thence North 55 degrees
36 minutes 9 seconds East 223.96 feet to an existing iron stake; thence North
54 degrees 59 minutes 20 seconds East 348.35 feet to an existing iron stake;
thence North 55 degrees 32 minutes 12 seconds East 530.77 feet to an existing
iron stake; thence North 55 degrees 20 minutes 38 seconds East 630.59 feet to
an existing iron stake thence North 55 degrees 24 minutes 3 seconds East
218.0 feet to an oak tree; thence North 35 degrees 12 minutes 29 seconds West
95.25 feet to an existing iron stake; thence North 55 degrees 23 minutes 34
seconds East 39.98 feet to an existing iron stake within the right of way of
NC Highway 87; thence within the right xx xxx xx Xxxxxxx 00 Xxxxx 00 degrees
21 minutes 6 seconds East 93.12 feet to an iron; thence South 36 degrees 26
minutes 53 seconds East 607.32 feet to an iron; thence South 39 degrees 17
minutes 59 seconds East 511.0 feet to an existing iron stake, THE POINT OF
BEGINNING. This description as per as-built survey for Vintage Yarns by X.
X. Xxxxxxxxx and Associates, RLS, dated May 28, 1990, to which reference is
made for more specific description. Being the same property described in
Deed Book 787, Page 790.
ANNEX 5B
PLANT ASSET
SITE NUMBER DESRIPTION
Plant No. 51-53 1080 HVAC
NC Highway 87 8549 Duct Work
Eden, NC 8551 Duct Work
8553 Duct Work - Annex
8556 Duct Work - Annex
8560 Duct Work - Annex
8561 Duct Work - Annex
9614 A/C for Conference Room
9620 HVAC Addtns
9621 HVAC Equipment
9622 HVAC Equipment
9623 HVAC & Filtration Addtns
9624 HVAC & Filtration Addtns
9625 HVAC & Filtration Addtns
9626 HVAC & Filtration Addtns
9627 HVAC & Filtration Addtns
9628 HVAC & Filtration
Property No. 6 (Plant #15):
The Property having a street address of 000 Xxxxxxxx Xxxx,
Xxxxxxx, Xxxxx Xxxxxxxx, which includes each parcel of Land
referenced in the legal description below (see Annex 6A attached
hereto) and all Improvements, all Fixtures and all Equipment
(regarding such Equipment, see Annex 6B attached hereto) on each
such parcel of Land or otherwise associated therewith.
ANNEX 6A
Tract 6: 000 Xxxxxxxx Xxxx, Xxxxxxx, XX
Unifi Plant #15
BEGINNING at an existing iron pipe, a control corner that marks the
southeastern corner of the 8.39 acre tract of land now or formerly owned by
the Town of Mayodan, and more particularly described in Deed Book 738, Page 703;
said pipe also lies North 53 degrees 52 minutes 25 seconds East 430.00 feet from
and existing iron pipe, another control corner; thence a line with the Town of
Mayodan, North 32 degrees 17 minutes 31 seconds West 371.00 feet to an existing
iron pipe; and North 11 degrees 24 minutes 31 seconds West 339.99 feet to an
existing iron pipe; thence a line with Xxxxxx Xxxxx Xxxxxxxx, the following
three (3) courses and distances: North 57 degrees 58 minutes 00 seconds East
345.00 feet to an existing iron pipe, North 38 degrees 00 minutes 29 seconds
East 482.52 feet to an existing iron pipe, North 37 degrees 08 minutes 25
seconds East crossing an existin iron pipe that lies in the western right-of-
way margin of a private road at 242.55 feet, a total distance of 348.41 feet to
an existing iron pipe, said iron pipe lies in the approximate center of the
terminus point for N.C. Xxxxx Xxxx #0000 (Xxxxxxxx Xxxx); thence South 60
degrees 26 minutes 31 seconds East crossing an iron pipe at 21.89 feet, a total
distance of 26.14 feet to a pipe that lies in the eastern right-of-way margin of
N.C. Xxxxx Xxxx #0000; thence with the eastern right-of-way margin of said
road, North 28 degrees 28 minutes 20 seconds East crossing a new iron pipe at
221.86 feet, a total distance of 826.37 feet to a new iron pipe; thence leaving
said road a line with Duke Power Company (See Deed Book 649, Page 39), property
now or formerly owned by Xxxx X. Xxxxxx, and property owned by Xxx X. Xxxxxx,
South 64 degrees 00 minutes 00 seconds East crossing a concrete monument at
750.09 feet and an existing iron pipe, a control corner, at 1.378.28 feet, a
total distance of 2,035.54 feet to an existing iron pipe; thence with property
now or formerly owned by Xxxxxx, South 21 degrees 31 minutes 36 seconds West
265.57 feet to an existing iron pipe; thence with X. X. Xxxxx (Seed Deed Book
668, Page 378) South 25 degrees 28 minutes 29 seconds West 295.78 feet to an
existing iron pipe; thence with the Town of Mayodan (See Plant Book 19, Page 4)
North 63 degrees 41 minutes 04 seconds West 974.23 feet to an existing iron
pipe; thence continuing with the Town of Mayodan, South 53 degrees 52 minutes
25 seconds West crossing an existing iron pipe in the eastern margin of a
private road at 1,823.21 feet, a total distance of 2,083.35 feet to the place
and point of beginning, and containing 56.774 acres, not including the 2.13 acre
strip of land that is excluded as set forth hereinafter, as per survey of
Xxxxxx Survey Company, dated May 31, 1988, and entitled "Survey Plant for
Xxxxxxxxx X. Xxxxxxxx".
Save and except from the above described property that 2.214 acre tract
conveyed to the Town of Mayodan by deed recorded December 14, 1994 in Book 912
at Page 778 with reservation of right of use and excepting a 0.06 acre tract
from that conveyance.
ANNEX 6B
PLANT ASSET
SITE NUMBER DESCRIPTION
Plant No. 15 1867 Air Conditioning
000 Xxxxxxxx Xxxx 0000 Air Conditioning Environmental Air Systems
Mayodan, NC 3938 Air Conditioning Environmental Air Systems
EXHIBIT B
Form of Lease Supplement and Acceptance Certificate
Lease Supplement and Acceptance Certificate
This Lease Supplement and Acceptance Certificate is dated
May 20, 1997 and is executed by NATIONSBANC LEASING & R.E.
CORPORATION, a North Carolina corporation ("Lessor") and UNIFI
MANUFACTURING, INC., a NORTH CAROLINA corporation ("Lessee")
pursuant to Section 4 of the Lease Agreement, dated as of May 20,
1997 between Lessee and Lessor (the "Agreement"). All
capitalized terms used herein but not defined herein shall have
the meanings given to such terms in the Agreement.
Lessee hereby acknowledges and agrees that the Properties
specified on Schedule 1 hereto (the "Properties") have been
delivered to Lessee on the date hereof at the delivery place
described below, and that, as between Lessor and Lessee, the
Properties (a) have been inspected to the complete satisfaction
of Lessee, (b) is in good operating order, repair and condition,
(c) is of a size, design, capacity, manufacture and construction
selected by Lessee, (d) is suitable for Lessee's purposes, (e)
has been unconditionally accepted by Lessee on the date hereof,
for all purposes of the Agreement, and (f) is subject to all of
the terms, conditions and provisions of the Agreement. Lessee
further acknowledges, agrees and certifies that Lessor has made
no warranty, express or implied, with respect to the Properties
and that the insurance policies, certificates or other documents
evidencing the coverages required under the Agreement have been
delivered to Lessor.
Lessee hereby leases from Lessor the Properties upon and
subject to all of the terms, conditions and provisions of the
Agreement, and Lessor and Lessee further agree and state as
follows:
1. The aggregate Acquisition Cost is $27,500,000; the
Acquisition Cost for each Property and the allocation of such
costs among Land, Improvements and Equipment is as set forth
below:
(SEE ATTACHED RIDERS)
2. The Term commences on May 20, 1997 and ends on January 1,
2013, both dates inclusive, unless sooner terminated in
accordance with the provisions of the Agreement.
3. The Basic Payment for the Properties for each semi-annual
period of the Term is in an amount equal to the Basic Payment
Factor multiplied by the aggregate Acquisition Cost.
4. Lessor will claim the cost recovery deductions with respect
to the Properties identified above as follows:
Depreciation
Properties Cost Deductions
Land $ 1,005,000 None
Improvements $24,385,000 39 years on the straight
line method
Equipment $ 2,110,000 The following percentages of
the Acquisition Cost
for the Equipment set forth
above: 14.2857% in taxable
year ending 12/31/97 and
24.4898%, 17.4927%, 12.4948%,
8.9249%, 8.9249%, 8.9249% and
4.4624%, respectively,
in the 7 succeeding taxable
years.
TOTAL: $27,500,000
5. This Lease Supplement may be executed in as many
counterparts as shall be determined by the parties hereto when so
executed, and each such counterpart shall be binding on both
parties hereto, notwithstanding that both parties are not
signatories to the same counterpart.
[The remainder of this page has been intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have caused this
Lease Supplement and Acceptance Certificate to be executed by
their duly authorized representatives as of the date first above
written.
NATIONSBANC LEASING & R.E.
CORPORATION
By:_______________________________
Name: ________________________
Title: ________________________
UNIFI MANUFACTURING, INC.
By:_______________________________
Name: ________________________
Title: ________________________
COUNTERPART NO. _____ OF _____ SERIALLY NUMBERED MANUALLY
EXECUTED COUNTERPARTS. TO THE EXTENT IF ANY THAT THIS DOCUMENT
CONSTITUTES CHATTEL PAPER UNDER THE UNIFORM COMMERCIAL CODE, NO
SECURITY INTEREST IN THIS DOCUMENT MAY BE CREATED THROUGH THE
TRANSFER AND POSSESSION OF ANY COUNTERPART OTHER THAN COUNTERPART
NO. 1.
Schedule 1
Description of Properties
Rider
1. Property No. 1 (Plant #57)
Land - $ 80,000
Improvements - $1,370,000
Equipment - $ 150,000
TOTAL $1,600,000
2. Property No. 2 (Plant #58)
Land - $ 80,000
Improvements - $2,350,000
Equipment - $ 270,000
TOTAL $2,700,000
3. Property No. 3 (Plant #59)
Land - $ 225,000
Improvements - $6,495,000
Equipment - $ 780,000
TOTAL $7,500,000
4. Property No. 4 (Plant #54)
Land - $ 210,000
Improvements - $3,250,000
Equipment - $ 240,000
TOTAL $3,700,000
5. Property No.5 (Plants # 51-53)
Land - $ 240,000
Improvements - $7,750,000
Equipment - $ 410,000
TOTAL $8,400,000
6. Property No. 6 (Plant #15)
Land - $ 170,000
Improvements - $3,170,000
Equipment - $ 260,000
TOTAL $3,600,000
EXHIBIT C
Form of Memorandum of Lease and Lease Supplement and Acceptance Certificate
Recordation requested by:
Xxxxx & Xxx Xxxxx, PLLC
After recordation return to:
Xxxxx & Xxx Xxxxx, PLLC (WMA)
NationsBank Corporate Center
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 00
Xxxxxxxxx, XX 00000-0000
Space above this line
for Recorder's use
MEMORANDUM OF LEASE AGREEMENT AND
LEASE SUPPLEMENT AND ACCEPTANCE CERTIFICATE
THIS MEMORANDUM OF LEASE AGREEMENT AND LEASE SUPPLEMENT
ACCEPTANCE CERTIFICATE ("Memorandum"), dated as of May 20, 1997,
is by and between NATIONSBANC LEASING & R.E. CORPORATION, a
Delaware corporation with its principal place of business at
XxxxxxxXxxx Xxxxx, XX0-000-00-00, 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxxx, XX 00000 (hereinafter referred to as "Lessor") and
UNIFI MANUFACTURING, INC., a North Carolina corporation, with its
principal place of business at 0000 Xxxx Xxxxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000 (hereinafter referred to as
"Lessee").
WITNESSETH:
That for value received, Lessor and Lessee do hereby
covenant, promise and agree as follows:
1. Demised Premises and Date of Lease. Lessor has leased
to Lessee, and Lessee has leased from Lessor, for the Term (as
hereinafter defined), certain real properties and other property
located in _______________, which is described in the attached
Schedule 1 (collectively, the "Properties"), pursuant to the
terms of a Lease Agreement between Lessor and Lessee dated as of
May 20, 1997 (as such may be amended, modified, extended,
supplemented, restated and/or replaced from time to time, the
"Lease") and a Lease Supplement and Acceptance Certificate
between Lessor and Lessee dated as of May 20, 1997 (as such may
be amended, modified, extended, supplemented, restated and/or
replaced from time to time, the "Lease Supplement").
2. Term; Termination Option; and Purchase Option. The
term of the Lease for the Properties ("Term") commenced as of May
20, 1997 and shall end as of January 1, 2013, unless the Term is
earlier terminated in accordance with the provisions of the
Lease. The Lease does not contain provisions for renewal or
extension. Under the Lease, the tenant has an early termination
option, an early purchase option and a purchase option at the end
of the Term.
3. Tax Payer Numbers.
Lessor's tax payer number: 00-0000000.
Lessee's tax payer number: ____________________.
4. True Lease. The Lease is a lease intended as a true
lease and not as a lease intended as security. The parties
hereto intend Lessor to be treated as the owner of the Properties
for all purposes, including without limitation for federal and
state income tax purposes, bankruptcy purposes, commercial law
purposes and real estate law purposes. Lessee will make no claim
nor assert any right to the Properties or any component thereof
inconsistent with Lessor's ownership thereof and will make
appropriate entries upon its books and records reflecting
Lessor's ownership of the Properties and each component thereof.
5. Effect of Memorandum. The purpose of this instrument
is to give notice of the Lease and the Lease Supplement and their
respective terms, covenants and conditions to the same extent as
if the Lease and the Lease Supplement were fully set forth
herein. This Memorandum shall not modify in any manner the
terms, conditions or intent of the Lease or the Lease Supplement
and the parties agree that this Memorandum is not intended nor
shall it be used to interpret the Lease or the Lease Supplement
or determine the intent of the parties under the Lease or the
Lease Supplement.
[The remainder of this page has been intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have duly executed
this instrument as of the day and year first written.
LESSOR:
NATIONSBANC LEASING & R.E. CORPORATION
By: ___________________________
Title: ______________________
LESSEE:
UNIFI MANUFACTURING, INC.
By: ___________________________
Title: ______________________
SCHEDULE 1
(Description of Properties)
[CONFORM TO STATE LAW REQUIREMENTS]
STATE OF _______________ )
) ss:
COUNTY OF ______________ )
The foregoing Lease Supplement was acknowledged before me,
the undersigned Notary Public, in the County of _________________
this _____ day of ______________, by ________________, as
__________________ of NATIONSBANC LEASING & R.E. CORPORATION, a
Delaware corporation, on behalf of the corporation.
[Notarial Seal] _____________________________
Notary Public
My commission expires:____________
STATE OF _______________ )
) ss:
COUNTY OF ______________ )
The foregoing Lease Supplement was acknowledged before me,
the undersigned Notary Public, in the County of _________________
this _____ day of ______________, by ________________, as
__________________ of UNIFI MANUFACTURING, INC., a North Carolina
corporation, on behalf of the corporation.
[Notarial Seal] ______________________________
Notary Public
My commission expires:____________
