NORTH CAROLINA
NASH COUNTY
LEASE
(TRIPLE NET)
THIS LEASE, made this 1st day of September, 1999, by and between
▇▇▇▇▇▇▇-▇▇▇▇▇▇ Realty hereinafter "Landlord" and CEC/Opticare, hereinafter,
"Tenant".
WITNESSETH:
Upon the terms and conditions hereinafter set forth, the landlord leases to
Tenant and Tenant leases from Landlord certain property and improvements, which
shall hereinafter be referred to as the "Premises", all as follows:
ARTICLE I
PREMISES
1.01 Premises. Landlord hereby leases to Tenant and Tenant hereby leases
from Landlord that certain office building, or portion thereof, herein
"Premises" located in Rockymount, North Carolina mor particularly described on
Exhibit A attached hereto.
ARTICLE II
TERM/USE
2.01 Term. The initial term of this Lease shall commence on the
Commencement Date and shall terminate at midnight on the last date of the month
of the "Initial Term" following the Commencement Date. Provided that Tenant is
not in default under the provisions hereof and provided further that Tenant
gives Landlord written notice of Tenant's intention to do so at least one
hundred fifty (150) days prior to the expiration of the Initial Term hereof, as
to the "First Renewal Term" (if any) and at least 150 days prior to the
expiration of the First Renewal Term as to the "Second Renewal Term" (if any),
Tenant shall have the right and option to renew this Lease for such periods and
upon such rental rates hereinafter set forth in this Lease. The renewal term(s),
if any, shall be upon the same terms and conditions as provided herein for the
Initial Term, except that the Base Rent and other costs payable by Tenant during
such renewal terms shall be determined as provided herein. If Tenant does not
exercise a renewal option, Tenant shall furnish Landlord written evidence in
recordable form of the fact that Tenant has no further right to occupy the
Premises.
2.02 Use. Tenant may use and occupy the Premises solely for the designated
"Permitted Uses" as set forth on Exhibit A, but for no other purpose without
Landlord's prior written consent, which consent shall not be unreasonably
withheld. In no event shall Tenant make any use of the Premises which is in
violation of any lawful governmental laws, rules or regulations insofar as they
might relate to Tenant's use and occupancy of the Premises; nor may Tenant make
any use of the Premises not permitted by any restrictive covenants, which apply
to the Premises, or in a manner which constitutes a nuisance, or which results
in the cancellation of any fire insurance policy on the Premises.
ARTICLE III
RENT
3.01 Minimum Rent.
(a) The fixed minimum annual rent ("Base Rent") during the term of
this lease, or any renewal, shall be payable by Tenant in equal monthly
installments, on or before the first day of each month in advance, at the office
of Landlord or at such other place designated by Landlord, without any prior
demand therefore and without any deduction or set-off whatsoever, and shall be
as set forth in the Adoption Agreement.
A prorated monthly installment of Base Rent shall be paid for any fraction
of a month if the lease term shall begin on any day except the first day of a
month.
The term "lease year" as used herein shall mean a period of twelve (12)
consecutive full calendar months. The initial lease year ("initial lease year")
shall begin on the Commencement Date if the Commencement Date shall occur on the
first day of a calendar month; if not, then the initial lease year shall
commence upon the first day of the calendar month next following the
Commencement Date. Each succeeding lease year shall commence upon the
anniversary date of the initial lease year.
(b) During the term of each and any renewal term, the Base Rent for each
lease year of the renewal term shall be the Base Rent for the Initial Term,
increased to the extent, if any, required in order to reflect any increase in
the cost of living between the beginning of the respective renewal term and the
beginning of the initial lease year.
The change in the cost of living shall be measured by the change in the
Consumer Price Index, All Urban Consumers, All Items, South (1982-84=100),
published by the Bureau of Labor Statistics, U.S. Department of Labor, [unless
said Index is not published for the date to be used, in which case the most
recent index dates in uniform manner preceding the respective initial lease year
and renewal terms shall be used]. Said rental adjustment will be in addition to
any additional payments or reimbursement for expenses to Landlord, as provided
in this Lease. If the manner in which such Consumer Price Index as determined by
the Bureau of Labor Statistics shall be substantially revised, an adjustment
shall be made in such revised Index which would provide results equivalent, as
nearly as possible, to those which would have been obtained if the Consumer
Price Index had not been so revised. If the Consumer Price Index shall become
unavailable to the public because publication is discontinued or otherwise,
Landlord will substitute therefor a comparable
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Index based upon changes in the cost of living or purchasing power of the
consumer dollar published by any other governmental agency, or if no such Index
shall be available, then comparable Index based upon changes in the cost of
living or purchasing power of the consumer dollar published by any other
governmental agency, or if no such Index shall be available, then a comparable
Index published by a major bank or by a university or recognized financial
publication.
3.02 Percentage Rent.
(a) In addition to the payment of the "Base Rent" as hereinbefore
provided, Tenant shall pay to the Landlord in the manner and upon the conditions
and at the times hereinafter set forth, during each lease year of the Initial
Term hereof, and each lease year of any renewal, a Percentage Rent equal to the
amount, if any, by which the Rental Percentage (as set forth on Exhibit A) of
the gross receipts as hereinafter defined, from all business done on and from
the Premises, exceeds the sum of the Base Rent, actually paid, if any. the
Percentage Rent shall be payable at such place as Landlord may designate without
any prior demand therefor, and without any set-off or deduction whatsoever.
(b) The said Percentage Rent shall become due and payable within
thirty (30) days after the last day of each lease year during the term of the
lease, or any renewal term, with respect to gross receipts during said period.
3.03 Gross Receipts Defined. The term "Gross Receipts"as used herein is
hereby defined to mean sales of Tenant and of all licensees, concessionaires and
sub-tenants of Tenant, from all business conducted upon or from the Premises or
elsewhere and whether such business be conducted by Tenant or by any licensees,
concessionaires or sub-tenants and whether such sales be evidenced by check,
credit, charge account, exchange or otherwise , and shall include, but not be
limited to, the amounts received from the sale of goods, wares, and merchandise
and for services performed on or at the Premises, together with the amount of
all orders taken or received at the Premises or elsewhere, and whether such
sales be made by means of merchandise or other vending devices in the Premises,
without reserve or deduction for inability or failure to collect the same. Each
charge or sale for the full price in the month during which such charge or sale
shall be made, irrespective of the time when the Tenant shall receive payment
therefor. If any one or more departments or other divisions of Tenant's business
shall be sublet by Tenant or conducted by any person, firm or corporation other
than Tenant, then there shall be included in gross receipts for the purposes of
fixing the Percentage Rent payable hereunder all the gross sales of such
departments or divisions, whether such sales be made at the Premises or
elsewhere, in the same manner and with the same effect as if the business or
sales of such departments and divisions of tenant's business had been conducted
by Tenant itself. Gross sales shall not include sales of merchandise for which
cash has been refunded, or allowances made on merchandise claimed to be
defective or unsatisfactory provided they shall have been included in gross
sales; and there shall be deducted from gross sales the sales price of
merchandise returned by customers for exchange, provided that the sales price of
merchandise delivered to the customer in exchange shall be included in gross
sales. Gross receipts shall not include tax imposed by any federal, state,
municipal or governmental authority directly on sales and
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collected from customers, provided that the amount thereof is added to the
selling price or absorbed therein, and paid by the Tenant to such governmental
authority. No franchise or capital stock tax and no income or similar tax based
upon income or profits as such shall be deducted from gross receipts in any
event whatever.
3.04 Past Due Rent or Prorata Expenses. In the event the Base Rent,
Percentage Rent or Tenant's share of "additional rent" (including taxes,
insurance, or other charges due hereunder) are not paid to Landlord by Tenant
within ten (10) days of the date on which they are due, Tenant agrees to pay to
Landlord a late charge of Four Percent (4%) of the amount due. Tenant further
agrees to pay Landlord any costs incurred by Landlord in effecting the
collection of any past due amounts and late charge including but not limited to
fees of any attorney or collection agency. Nothing herein contained shall limit
any other remedy of Landlord.
ARTICLE IV
TAXES
4.01 Taxes. Tenant agrees to pay, as additional rent, all real property
taxes and assessments which may be levied or assessed by any lawful authority
against the Premises.
Landlord will ▇▇▇▇ the Tenant annually for said real estate taxes,
accompanied by copies of the appropriate tax bills. The Tenant will remit to the
Landlord within 30 days the taxes due.
For any portion of the aggregate lease term computed from the date hereof
covered herein which is less than a full calendar year, the allocation of taxes
shall be reduced to limit such charge to a corresponding pro rata portion of
such year. This provision shall apply both at the beginning and the end of the
lease term.
"Real Estate Taxes" shall mean any property taxes and assessments imposed
upon the land and improvements upon said land. If due to a change in the method
of taxation, any franchise, income or profit tax shall be levied against
landlord in substitution for or in lieu of any tax which would otherwise
constitute a real estate tax , such franchise, income or profit tax shall be
deemed to be a real estate tax for the purpose hereof.
Tenant further covenants that if its lease is terminated by reason of
default on its part, or if it fails to take possession of its Premises or leaves
the Premises prior to the expiration of this lease, that it shall remain liable
to pay such taxes. Tenant agrees that this is not to be construed as a penalty
and that it shall be liable therefore only for such period or periods of time as
during the term of this lease during which the Premises are unrented.
ARTICLE V
RECORDS/AUDIT
5.01 Records and Books of Account. Tenant agrees to prepare and keep on the
Premises
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for a period of not less than two (2) years following the end of such lease year
adequate records which shall show inventories and receipts of merchandise at the
Premises, and daily receipts from all sales, and other transactions on the
Premises by Tenant and any other persons conducting any business upon said
Premises. Tenant shall record at the time of sale, in the presence of the
customer, all receipts from sales or other transactions whether for cash or
credit in a cash register or in cash registers having a cumulative total which
shall be sealed in a manner approved by Landlord and having such other features
as shall be approved by Landlord. Tenant further agrees to keep on Premises for
at least two (2) years following the end of each lease year all pertinent
original sales records. Pertinent original sales records shall include: (a) if
cash register tapes are used by Tenant, cash register tapes, including tapes
from temporary registers; (b) serially numbered sales slips; (c) the originals
of all mail orders at and to the Premises; (d) the original records of all
telephone orders at and to Premises; (e) settlement report sheets of
transactions with sub-tenants, concessionaires and licensees; (f) the original
records showing that merchandise returned by customers was purchased at the
Premises by such customers; (g) memorandum receipts or other records of
merchandise taken out on approval or consignment; (h) all income and sales tax
returns filed by Tenant; (i) such other sales records, if any, which would
normally be examined by an independent accountant pursuant to accepted auditing
standards in performing any audit of Tenant's sales; and (j) the records
specified in (a) to (i) above of sub-tenants, assignees, concessionaires, or
licensees.
Tenants shall submit to Landlord on or before the 15th day following each
monthly period during each lease year during the term or renewal term hereof
(including the 15th day of the month following the end of the term) at the place
then fixed for the payment of rent, together with the remittance of monthly
Percentage Rent, a written statement signed by Tenant, and certified by it to be
true and correct, showing in reasonably accurate detail, the amount of gross
receipts for each preceding month. No Percentage Rent shall be due for any
partial month between the Commencement Date and the first day of the lease year.
Tenant shall submit to the Landlord on or before the 30th day following the end
of each lease year at the place then fixed for the payment of rent a written
statement signed by the Tenant, and certified to be true and correct, showing in
reasonably accurate detail satisfactory in scope to Landlord the amount of gross
receipts during the preceding lease year, and duly certified to be correct by
Tenant, which certification shall be one which is satisfactory to Landlord in
scope and substance. The statements referred to herein shall be in such form and
style and contain such details and breakdown as the Landlord may reasonably
determine.
Tenant shall furnish to Landlord a copy of Tenant's "Sales and Use Tax
Report" prepared for the North Carolina Department of Revenue, by the 15th day
of each following month, and shall furnish upon request any annual "Sales and
Use Tax Report" provided to said department.
5.02 Audit. The acceptance by the Landlord of payments of Percentage Rent
shall be without prejudice to the Landlord's right to an examination of the
Tenant's books and records of its gross receipts and inventories of merchandise
on the Premises in order to verify the amount of annual gross receipts received
by the Tenant in and from the Premises.
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At its option, Landlord may cause, at any reasonable time upon five (5)
days prior written notice to Tenant, a complete audit to be made of Tenant's
entire business affairs and records relating to the Premises for the period
covered by any statement issued by the Tenant as above set forth. If such audit
shall disclose liability for rent to the extent of two percent (2%) or more in
excess of the rentals theretofore computed and paid by Tenant for such period,
Tenant shall promptly pay to Landlord the cost of said audit (as "additional
rent") in addition to the deficiency, which deficiency shall be payable in any
event. In addition, if the audit discloses that the sales reported was
understated by five percent (5%) or more, Landlord, at Landlord's option, may
terminate this Lease upon five (5) days notice to Tenant of Landlord's election
to do so. Any information obtained by the Landlord as a result of such audit
shall be held in strict confidence by Landlord. A report of findings by the
Landlord's accountant shall be binding and conclusive upon the Landlord and the
Tenant. Any information by the Landlord as a result of such audit shall be held
in strict confidence by the Landlord except in any proceedings or actions with
respect to that audit, the cost thereof, or with respect to a prospective sale,
mortgage or lease of the Premises.
ARTICLE VI
CONDUCT OF BUSINESS OF TENANT
6.01 Operation of Business. Tenant shall operate one hundred percent (100%)
of the Premises during the entire term of this lease with due diligence and
efficiency so as to produce all of the gross sales which may be produced by such
manner of operation , unless prevented from doing so by causes beyond Tenant's
control. Tenant will conduct its business in the Premises during the regular
customary days and hours for such type of business in the trade area in which
the Premises is located. Provided, said Premises shall be open a minimum of the
"Customary Hours" unless otherwise consented in writing by the Landlord.
Landlord and Tenant acknowledge that if Tenant abandons or closes its
store, Landlord may deem such closing as a default by Tenant and have such
remedies as set forth in Article XVIII. In the alternative, Tenant agrees that
in the event this clause is violated, Tenant will pay the Landlord as additional
rent $5.00 per square foot per year payable in monthly installments as
liquidated damages together with Tenant's other rents and payments as outlined
in this lease. Provided, however, the acceptance of said additional rent by
Landlord shall not constitute a penalty or a waiver of Landlord's right to treat
the violation hereunder as a breach and default of this Lease at anytime
thereafter or affect any remedy of Landlord for said default.
Tenant shall not perform any acts or carry on any practices which may
injure the Premises or be of nuisance or menace to others.
6.02 Competition. During the term of this lease, Tenant shall not directly
or indirectly engage in any similar or competing business (and if Tenant is a
corporation, its officers, directors, stockholders and any other affiliates
shall not so compete or own, operate,
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manage or have any interest in the profits of any similar or competitive store
or business within a radius of five (5) miles of the Premises. Landlord, for
breach of this covenant and in addition to any other remedy otherwise available,
may require that such store be deemed part of the Premises for the purpose of
determining gross receipts in accordance with Section 3.03 hereof, for which
percentage rent shall be paid..
6.03 Storage, Office Space. Tenant shall warehouse, store, and/or stock in
the Premises, only such goods, wares ad merchandise as Tenant intends to offer
for sale at retail at, in, from or upon the Premises. Tenant shall use for
office, clerical or other non-selling purposes only such space in the Premises
as is from time to time reasonably required for Tenant's business in the from
time to time reasonably required for Tenant's business in the Premises. No
auction, fire, going out of business, or bankruptcy sales may be conducted in
the Premises without the previous written consent of Landlord.
6.04 Security Deposit. Tenant, contemporaneously with the execution of this
lease, will deposit with Landlord forthwith the designated "Security Deposit".
Said deposit shall be held by Landlord, without liability for interest, as
security for the faithful performance by Tenant of all of the terms, covenants,
and conditions of this lease by said Tenant to be kept and performed during the
term hereof. It is expressly understood that this sum does not apply toward
rent, except that if at any time during the term of this lease any of the rent
(or additional rent) herein reserved shall be overdue and unpaid, or any other
sum (or additional rent) payable to Tenant to Landlord hereunder shall be
overdue and unpaid then Landlord may, at the option of Landlord (but Landlord
shall not be required to), appropriate and apply any portion of said deposit to
the payment of such overdue rent or other sum.
In the event of the failure to keep and perform any of the terms, covenants
and conditions of this lease to be kept and performed by Tenant, then the
Landlord at its option may, after terminating this lease, appropriate and apply
said entire deposit or so much thereof as sustained or suffered by Landlord due
to such breach on the part of the Tenant. Should the entire deposit, or any
portion thereof, be appropriated and applied by Landlord for the payment of
overdue rent or other sums due and payable to Landlord by Tenant hereunder, then
Tenant shall, upon the written demand of Landlord forthwith remit to Landlord a
sufficient amount in cash to restore said security to the original sum
deposited, and Tenant's failure to do so within five (5) days after receipt of
such demand shall constitute a breach of this lease. Should Tenant comply with
all of said terms, covenants and conditions and promptly pay all of the rental
herein provided for as it falls due, and all other sums payable by Tenant to
Landlord hereunder, the said deposit shall be returned in full to Tenant at the
end of the term of this lease, or upon the earlier termination of this lease.
Landlord shall deliver the funds deposited hereunder by Tenant to the
purchaser of Landlord's interest in the Premises in the event that such interest
be sold, and thereupon Landlord shall be discharged from any further liability
with respect to such audit.
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Landlord shall be entitled to intermingle such deposit with its own funds.
The security deposit shall not preclude the Landlord from recovering any
additional rent or damage which may be due or sustained as a result of this
lease.
ARTICLE VII
FIXTURES/ALTERATIONS
7.01 Fixtures, Alterations. With Landlord's prior written consent, Tenant,
at its expense, may, in good workmanlike manner, make structural or interior
alterations to the Premises as it deems necessary in the conduct of its business
provided said alterations do not reduce the value of such Premises.
Tenant shall present to the Landlord plans and specifications for such work
at the time approval is sought.
All alterations, additions and improvements (excluding personal property
and movable business fixtures of Tenant, no part of the cost of which shall have
been paid by Landlord) made by, for or at direction of the Tenant, shall become
the property of the Landlord and shall remain upon Premises and shall be the
surrender with the Premises as part thereof at the expiration or termination of
this lease whether pursuant to the terms hereof or re-entry and possession
without termination; provided, however, the Landlord shall have the right to
require Tenant to remove any of such alterations, additions, or improvements and
to restore Premises to the condition in which they were at the commencement of
Tenant's occupancy thereof and such right shall be exercised by Landlord by
giving notice to Tenant at any time prior to or not later than thirty (30) days
after the expiration or earlier termination or repossession. Upon receipt of
such notice, Tenant at Tenant's sole cost and expense shall comply with the
requirements therein on or before the expiration or earlier termination of this
Lease or within five (5) days of receipt of said notice by Tenant, whichever
shall be later.
Tenant shall promptly pay all contractors and materialmen, so as to
minimize the possibility of a lien attaching to the Premises, and should any
such lien be made or filed, Tenant shall within ten (10) days of receipt thereof
give notice to Landlord of same and Tenant shall bond against or discharge the
same within ten (10) days after written request by Landlord.
ARTICLE VIII
MAINTENANCE
8.01 Tenant Maintenance. Tenant shall at all times keep the interior and
exterior of the Premises in good order, condition and repair. Tenant shall
perform all necessary and normal maintenance and repair to doors, fixtures,
equipment, and appurtenances thereof (including lighting, heating and plumbing
fixtures, and any air conditioning system serving the Premises. Tenant shall
further be responsible for all exterior and interior painting, repair of the
roof of the Premises, and all structural repairs to the exterior walls and
foundations. Tenant shall further be
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responsible for maintaining the upkeep of the landscaped areas of the Premises,
and shall keep in good repair and condition all parking areas located upon the
Premises.
Tenant shall further be responsible for implementing and maintaining a pest
control contract with regard to the Premises.
It is expressly understood and agreed that the obligation of the Tenant
shall be solely at its expense for the total upkeep and maintenance of the
Premises. It is further acknowledged that the Landlord shall not have any
obligation for the repair and maintenance of the Premises with the exception of
the application of any insurance proceeds insuring the Landlord as provided
herein.
Tenant agrees to sweep and clean, and remove snow and ice from entrances of
Premises.
8.02 Failure of Tenant. If Tenant refuses or neglects to repair or maintain
the Premises as required hereunder after reasonable time and after written
demand from the Landlord, Landlord may make such repairs without liability to
the Tenant, and upon completion thereof, Tenant will pay Landlord's cost for
making such repairs plus fifteen percent (15%) for overhead, upon presentation
of the ▇▇▇▇ therefore, as additional rent.
ARTICLE IX
SURRENDER
9.01 Surrender of Premises. At the expiration of the tenancy hereby
created, Tenant shall surrender the Premises in the same condition as the
Premises were upon delivery of possession hereto under this Lease, reasonable
wear and tear excepted, and shall surrender all keys for the Premises to
Landlord at the place then fixed for the payment of rent. Tenant shall remove
all of its trade fixtures, and any alterations or improvements (if required
hereunder) before surrendering the Premises and shall repair any damage to the
Premises caused thereby. Tenant's obligations to observe or perform this
covenant shall survive the expiration or other termination of the term of this
lease.
ARTICLE X
INSURANCE AND INDEMNITY
10.01 Liability Insurance. Tenant shall, during the entire term hereof,
keep in full force and effect policies of:
(a) comprehensive public liability insurance with a contractual
liability endorsement covering property damage, death and personal injury with
respect to the Premises, the entrance and walk area in front of the Premises,
and the business operated by Tenant and any subtenants of Tenant in the Premises
in which the limits of public liability shall not be less than $1,000,000 per
occurrence and $2,000,000 aggregate and in which the property damage liability
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shall be not less than $1,000,000.
(b) all risks, property insurance (in an adequate amount) to cover the
full replacement value of all personal property, inventory, trade fixtures,
furnishings, equipment, alterations, leasehold improvements and betterments and
all other items located or placed in the Premises by the Tenant.
(c) ▇▇▇▇▇▇▇'▇ compensation insurance covering all persons employed,
directly or indirectly, by the Tenant as required by the laws of the State of
North Carolina.
Landlord reserves the right to increase the foregoing insurance limits as
it deems reasonably necessary to protect itself, the Tenant and the property.
The aforesaid policies, excepting the ▇▇▇▇▇▇▇'▇ compensation, shall name
Landlord, any person, firms or corporations designated by Landlord, and Tenant
as insured, and shall contain a clause that the insurer will not cancel or
change the insurance without first giving the Landlord sixty (60) days prior
written notice. The insurance shall be written by an insurance company approved
by Landlord and a copy of the policy or a certificate of insurance shall be
delivered to Landlord. Thereafter, at least fifteen (15) days prior to the
expiration of any such policy, Tenant shall deliver either a duplicate original
or a certificate of insurance for the policy together with satisfactory evidence
of the payment of the premiums therefore. If Tenant fails to obtain or provide
any or all of the insurance required by this section, then Landlord may, but
shall not be required to, purchase such insurance on behalf of the Tenant and
add the costs of such insurance as additional rent payable on demand.
10.02 Fire and Extended Coverage Insurance. In addition to the insurance
which Tenant is required to maintain pursuant to this Lease, Tenant agrees to
pay to Landlord promptly upon receipt of invoices from Landlord the total
premium paid by Landlord for fire, extended coverage and rental insurance
(including so-called "extended coverage and/or all risk endorsement") upon
Landlord's buildings and improvements consisting of the Premises. The amount of
fire insurance to be maintained by Landlord shall not be less than ninety
percent (90%) and not more than one hundred percent (100%) of the replacement
value of Landlord's buildings and improvements on the Premises as such value may
exist from time to time. Landlord will ▇▇▇▇ the Tenant periodically accompanied
by copies of the appropriate bills. Tenant will remit within ten (10) days any
premiums due to the Landlord for such insurance.
Tenant agrees that it will not keep, use sell or offer for sale in or upon
the Premises any article which may be prohibited by the standard form of fire
insurance policy.
10.03 Glass. Tenant shall replace, at the expense of Tenant, any and all
glass damaged or broken from any cause whatsoever in and about the Premises.
10.04 Indemnification of Landlord. Tenant will indemnify Landlord and save
it harmless from and against any and all claims, actions, damages, liability and
expense in
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connection with loss of life, personal injury and/or damage to property arising
from or out of any occurrence in, upon, or at the Premises, or the occupancy or
use by Tenant of the Premises or any omissions of Tenant, its agents,
contractors, employees, invitees, servants, lessees or concessionaires. In the
case Landlord shall, without fault on its part, be made party to any litigation
commenced by or against Tenant, then Tenant shall protect and hold Landlord
harmless and shall pay all costs, expenses and reasonable attorney's fees that
may be incurred or paid by Landlord in enforcing any covenants and agreements in
this lease.
10.05 Waiver of Subrogation. Landlord and Tenant shall to the extent
possible obtain from any insurer providing insurance to either the Landlord or
Tenant as required by this Lease, covering the Demised Premises, the
improvements therein or the contents thereof, a waiver of any right of
subrogation which such insurer of one party may acquire against the other party
by virtue of payment of any loss under such insurance. The extra cost of any
such waiver, shall be treated as an additional cost of the insurance payable
under the terms hereof.
ARTICLE XI
UTILITIES
11.01 Utility Services. Tenant shall be solely responsible for and promptly
pay all deposits and charges for heat, water, gas, electricity or any other
utility used or consumed in the Premises. In no event shall Landlord be liable
for any interruption or failure in the supply of any such utilities to the
Premises.
ARTICLE XII
ESTOPPEL, ATTORNMENT, SUBORDINATION
12.01 Estoppel Certificate. If within ten (10) days after request therefor
by Landlord, or in the event that upon any sale, assignment or hypothecation of
the Premises by Landlord, an estoppel certificate shall be required from Tenant,
Tenant agrees to deliver in recordable form a certificate to any proposed
mortgagee or purchaser, or to Landlord, certifying that Tenant is in possession
of the Premises, has unconditionally accepted the same and is currently, paying
the rents reserved herein; that this lease is unmodified and in full force and
effect (or if there have been modifications, that the lease is in full force and
effect as modified and stating the modifications) and that there are no defaults
by Landlord therein and no defenses or offsets thereto, or stating those claimed
by Tenant. Tenant shall agree to give Landlord's mortgagee notice of and a
reasonable opportunity to cure any Landlord default, and to accept such cure if
affected by Landlord's mortgagee, and further shall agree to permit such
mortgagee (or the purchaser at any foreclosure sale) on acquiring title to
become substitute Landlord with liability only for such Landlord obligations as
accrue after title is so acquired. Such statements or certificate shall also
state the date to which the rent and other charges hereunder have been paid by
Tenant.
12.02 Attornment / Subordination. Tenant, shall, in the event any
proceedings are
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brought for the foreclosure of, or in the event of exercise of the power of sale
under any mortgage made or other sale by the Landlord covering the Premises,
attorn to the purchaser upon any such foreclosure or sale and recognize such
purchaser as the Landlord under this lease and purchaser shall not disturb
Tenant's possession so long as Tenant is not in default under the terms of this
lease. The lease will be subordinate to the lien resulting from any method of
financing or refinancing, including by mortgage or deed of trust, now or
hereafter in force against the land of which the Premises are a part or upon any
buildings hereafter placed upon the land of which the Premises are a part, and
to all advances made or hereafter to be made upon the security thereof. This
section shall be self-operative and no further instrument of subordination shall
be required by any mortgagee; provided, however, at the request of any
mortgagee, the Tenant shall execute in recordable form such subordination
agreements required.
The Tenant, upon request of any party in interest, shall execute promptly
such instruments or certificates to carry out the intent of Attornment and
Subordination above as shall be requested by the Landlord. The Tenant hereby
irrevocable appoints the Landlord as attorney-in-fact for the Tenant with full
power and authority to execute and deliver in the name of the Tenant any such
instruments or certificates. If fifteen (15) days after the date of a written
request by Landlord to execute the same, the Landlord may, at its option, cancel
this lease without incurring any liability on account thereof, and the term
hereby granted is expressly limited accordingly.
ARTICLE XIII
SIGNS
13.01 Signs. The Tenant shall have the exclusive right to place Tenant's
signs in and on about the facia of the Premises, provided the same are: in
compliance with the law and any restrictive covenants affecting the Premises;
approved by Landlord (which approval will not unreasonably be withheld);
purchased and installed at the sole cost and expense of Tenant; and are removed
from the Premises at the expiration or earlier termination of the term hereof
and such damages as caused by the removal shall be repaired by Tenant. The
Tenant shall be responsible for all applications, fees and permits required in
conjunction with such signage.
All signs used in or about the Premises shall be professionally executed
and in good taste.
ARTICLE XIV
ASSIGNMENT/SUBLETTING
14.01 Assignment or Subletting. Without the prior written consent of the
Landlord, which consent may be arbitrarily denied, Tenant will not by operation
of law or otherwise, assign, transfer, mortgage, or encumber this lease, or
sublet or permit the Premises or any part thereof to be used by others. Neither
this lease nor any interest therein, nor any estate thereby
12
created, shall pass by operation of law or otherwise to any trustee or receiver
in bankruptcy of Tenant or any assignee for the benefit of the creditors of
Tenant. In the event that Tenant by operation of law or otherwise, assigns,
mortgages, or encumbers this lease or sublets the Premises or any part thereof
in violation of this provision, then Landlord shall have the option to cancel
and terminate this lease in which event Tenant shall immediately surrender the
Premises to Landlord and Tenant shall hold Landlord harmless for any loss or
damage, including attorney's fees, which Landlord may suffer by reason of such
termination. If this Lease shall be assigned with consent, or if the Leased
Premises or any part thereof, shall be sublet or occupied by anyone other than
Tenant, the Landlord may collect rent from the assignee, other tenant or
occupant, and apply the net amount collected to the rent herein reserved.
Notwithstanding any assignment or sublease, Tenant shall remain fully liable on
this Lease and shall not be released from performing any terms, covenants and
conditions of this Lease.
ARTICLE XV
WASTE, GOVERNMENTAL REGULATION
15.01 Waste or Nuisance. Tenant shall not commit or suffer to be committed
any waste upon the Premises or any nuisance.
15.02 Governmental Regulations. Tenant shall, at Tenant's sole cost and
expense, comply with all of the requirements of the city, county, municipal,
state, federal and other applicable governmental authorities, now in force, or
which may hereafter be in force, pertaining to the Premises, and shall
faithfully observe in the use of the Premises all municipal and county
ordinances and state and federal statutes now in force or which may hereafter be
in force.
15.03 Hazardous Substance. during the lease term, Tenant shall not, and
shall not allow any other party to, bring upon, store, dispose of or install in
or upon the Premises: (i) any hazardous waste, hazardous substances, hazardous
materials, toxic substances, hazardous air pollutants or toxic pollutants, as
those terms are used in the Resources Conservation and Recovery Act, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
the Hazardous Materials Transportation Act, the Toxic Substances Control Act,
the Clean Air Act and the Clean Water Act or any amendments thereto, or any
regulations promulgated thereunder; (ii) any "PCBs" or "PCB Items" (as defined
in 40 C.F.R. S761.3); or (iii) any "asbestos" (as defined in 40 C.F.R. S763.63).
Tenant shall indemnify, defend and hold Landlord harmless from and against any
liability, cost, damage, or expense incurred or sustained by landlord
(including, without limitation, reasonable attorneys fees and expenses,
remediation costs, engineering fees, court costs and costs incurred in the
investigation, settlement and defense of claims) as a result of or in connection
with any violation of the preceding prohibition. It is specifically understood
and agreed to by Tenant that the indemnity contained in this paragraph shall
survive the expiration or earlier termination of the Lease Term.
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ARTICLE XVI
DESTRUCTION OF PREMISES
16.01 Total or Partial Destruction. In the event the Premises are partially
damaged by fire or other perils covered by extended coverage insurance, Landlord
agrees to forthwith repair same, and this lease shall remain in full force and
effect, except that Tenant shall be entitled to a proportionate reduction of the
Base Rent from the date of damage and while such repairs are being made, such
proportionate reduction to be based upon the portion of the Premises rendered
untenantable during repairs. If the damage is due to the fault or neglect of
Tenant or its employees, there shall be no abatement of rent.
In the event the Premises are damaged as a result of fire or other cause
thereby rendering the Premises wholly untenantable, then Landlord shall have the
option: (a) to repair or restore such damage, this lease continuing in full
force and effect, but the Base Rent to be proportionately reduced as hereinabove
provided or (b) to give notice to Tenant at any time within thirty (30) days
after such damage, terminating this lease as of the date specified in such
notice, which date shall be no more than thirty (30) days after the giving of
such notice. Provided, however, the landlord may not elect to terminate this
Lease unless the necessary repairs cannot reasonably be made within a period of
ninety (90) days or less, or unless the cost of repairing such damage shall
equal or exceed sixty percent (60%) of fair replacement value of the Premises
immediately prior to such damage (provided this sentence shall not apply if two
years or less remain in the lease term, or if then in a renewal term, the
renewal term). In the event of giving such notice, this lease shall expire and
all interest of the Tenant in the Premises shall terminate on the date which the
Premises were rendered untenantable.
Notwithstanding anything to the contrary, landlord's obligation to rebuild
shall be limited to the proceeds actually received by the Landlord under any
casualty insurance policy or policies, if any, which have not been required to
be applied towards the reduction of any indebtedness secured by a mortgage
covering the Premises.
Landlord shall not be required to make any repairs or replacements of any
leasehold improvements, fixtures, or other personal property of Tenant.
ARTICLE XVII
CONDEMNATION
17.01 Condemnation. If the whole or any part of the Premises, parking area,
or means of access thereto shall be condemned or sold under threat of
condemnation, and such condemnation shall render the Premises unsuitable for the
business of the Tenant, this lease shall terminate. Tenant shall have no claim
against Landlord or to any portion of the award in condemnation for the value of
any unexpired term of this Lease, but this shall not limit Tenant's right to
compensation from the condemning authority for the value of any Tenant's
property taken (other than Tenant's leasehold interest in the Premises).
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ARTICLE XIIII
DEFAULT OF TENANT
18.01 Right to Re-enter. In the event of any failure of Tenant to pay any
rental due hereunder within ten (10) days after the same shall be due, or any
failure to perform any other terms, conditions or covenants of this Lease to be
observed or performed by Tenant for more than thirty (30) days (or such earlier
time as may be specified herein) after written notice of such default shall have
been mailed to Tenant, or if Tenant shall become bankrupt or insolvent or file
any debtor proceedings, or take or have taken against Tenant in any court
pursuant to any statute either of the United States or of any State a petition
in bankruptcy or insolvency or for reorganization or for the appointment of a
receiver or trustee of all or a portion of Tenant's property, or if Tenant makes
an assignment for the benefit of creditors or petitions for or enters into such
an arrangement, or if Tenant shall abandon said Premises, or suffer this lease
to be taken under any writ of execution, then Landlord, besides and in addition
to other rights or remedies it may have, shall have the immediate right to
re-entry and may remove all persons and property from the Premises and such
property may be removed and stored in a public warehouse or elsewhere at the
cost of, and for the account of Tenant, all without service of notice or resort
to legal process and without being deemed guilty of trespass or becoming liable
for any loss or damage which may be occasioned thereby.
18.02 Right to Relet. Should Landlord elect to re-enter, as herein provided
or should it take possession pursuant to legal proceedings or pursuant to any
notice provided for by law, it may either terminate this lease or it may from
time to time without terminating this Lease, make such alterations and repairs
as may be necessary in order to relet the Premises, and relet said Premises or
any part thereof for such term or terms (which may be for a term extending
beyond the terms of this Lease) and at such rental or rentals and upon such
other terms and conditions as landlord in its sole discretion may deem
advisable. Upon each reletting all rentals received by Landlord from such
reletting shall be applied, first, to the payment of any indebtedness other than
rent due hereunder from Tenant to Landlord; second, to the payment of any costs
and expenses of such reletting, including brokerage fees and attorneys' fees and
of costs of such alteration and repairs, third, to the payment of rent due and
unpaid hereunder, and the residue, if any, shall be held by the Landlord and
applied in payment of future rent as the same may become due and payable
hereunder. If such rentals received from such reletting during any month be less
than that to be paid during that month by Tenant hereunder, Tenant shall pay any
such deficiency to landlord. Such deficiency shall be calculated and paid
monthly. No such re-entry or taking possession of said Premises by Landlord
shall be construed as an election on its part to terminate this Lease unless a
written notice of such intention be given to Tenant or unless the termination
thereof be decreed by a court of competent jurisdiction. Notwithstanding any
such reletting without termination, Landlord may at any time thereafter elect to
terminate this lease for such previous breach. Should Landlord at any time
terminate this Lease for any breach, in addition to any other remedies it may
have, it may recover from Tenant all damages it may incur by reason of such
breach, including the cost of recovering the Premises, and the present worth
(discounted at 6%) at the time of such termination of the excess, if any, of the
amount of rent reserved in this
15
lease for the remainder of the stated term over the then reasonable rental value
of the Premises for the remainder of the stated term, all of which amounts shall
be immediately due and payable from Tenant to Landlord. In determining the rent
which would be payable by Tenant hereunder, subsequent to default, with or
without termination, the annual rent for each year of the unexpired term shall
be equal to the Base Rent applicable under the terms of the lease plus the
annual average of Percentage Rents paid by Tenant from the commencement of the
term to the time of default or during the preceding two full lease years,
whichever period is shorter.
The above stated remedies of Landlord shall be deemed to be in addition to,
and not in lieu of, any other rights and remedies which Landlord may have in law
or in equity.
18.03 Legal Expenses. Should it become necessary for Landlord to employ
legal counsel to enforce any of the provisions herein contained, Tenant agrees
to pay all attorneys' fees and costs or expenses of any kind reasonably incurred
by Landlord, including costs of appeal, if any.
18.04 Waiver of Jury Trial and Counterclaim. The parties hereto shall and
they hereby do waive trial by jury in action, proceeding or counterclaim brought
by either of the parties hereto against the other on any matters whatsoever
arising out of or in any way connected with this lease, the relationship of
Landlord and Tenant, Tenant's use or occupancy of the leased Premises, and/or
any claim of injury or damage.
In the event Landlord commences any proceedings for non-payment of rent,
Base Rent, Percentage Rent or additional rent, Tenant will not interpose any
counterclaim of whatever nature or description in any such proceedings. This
shall not, however, be construed as a waiver of the Tenant's right to assert
such claims in any separate action or actions brought by the Tenant.
ARTICLE XIX
ACCESS BY OWNER
19.01 Right of Entry. Landlord or Landlord's agents shall have the right to
enter the Premises at all reasonable times to examine the same, and to show them
to prospective purchasers or lessees of the Premises, and to make such repairs,
alterations, improvements or additions as Landlord may deem necessary or
desirable, and Landlord shall be allowed to take all material into and upon said
Premises that may be required therefor without the same constituting an eviction
of Tenant in whole or in part and the rent reserved shall not ▇▇▇▇▇ while said
repairs, alterations, improvements, or additions are being made, by reason of
loss or interruption of business of tenant or otherwise. During the six months
prior to the expiration of the term of this Lease or any renewal term, Landlord
may exhibit the premises to prospective tenants or purchasers, and place upon
the Premises the usual notices "to rent" or "for sale" which notices Tenant
shall permit to remain thereon without molestation.
16
ARTICLE XX
HOLDING OVER, SUCCESSORS
20.01 Holding Over. Any holding over after the expiration of the term
hereof, with the consent of the Landlord, shall be construed to be a tenancy
from month to month at the rents herein specified (prorated on a monthly basis)
and shall otherwise be on the terms and conditions herein specified, so far as
applicable.
20.02 Successors. All rights and liabilities herein given to, or imposed
upon, the respective parties hereto shall extend to and bind the several
respective heirs, executors, administrators, successors, and assigns of the said
parties.
ARTICLE XXI
QUIET ENJOYMENT
21.01 Landlord's Covenant. Upon payment by the Tenant of the rents herein
provided, and upon the observance and performance of all the covenants, terms
and conditions on Tenant's part to be observed and performed, Tenant shall
peaceably and quietly hold and enjoy the Premises for the term hereby demised
without hindrance or interruption by Landlord or any other person or persons
lawfully or equitable claiming by, through or under the Landlord, subject,
nevertheless, to the terms and conditions of this Lease.
ARTICLE XXII
MISCELLANEOUS
22.01 Waiver. The waiver of Landlord of any term, covenant or condition
herein contained shall not be deemed to be a waiver of such term, covenant or
condition herein contained. The subsequent acceptance of rent hereunder by
Landlord shall not be deemed to be a waiver of any preceding breach by Tenant of
any term, covenant or condition of this Lease, other than the failure of Tenant
to pay the particular rental so accepted, regardless of Landlord's knowledge of
such preceding breach at the time of acceptance of such rent. No covenant, term
or condition of this lease shall be deemed to have been waived by Landlord,
unless the waiver shall be in writing by Landlord.
22.02 Accord and Satisfaction. No payment by Tenant or receipt by Landlord
of a lesser amount than the monthly rent herein stipulated shall be deemed to be
other than on account of the earliest stipulated rent; nor shall any endorsement
of statement on any check or any letter accompanying any check or payment as
rent be deemed an accord and satisfaction, and Landlord may accept such check or
payment without prejudice to Landlord's right to recover the balance of such
rent or pursue any other remedy in this lease provided.
22.03 Entire Agreement. This lease and the Adoption Agreement and the
exhibits, and rider, if any, attached hereto and forming a part hereof, set
forth all the covenants, promises,
17
agreements, conditions or understandings, either oral, or written, between them
other than are herein set forth. Except as herein otherwise provided, no
subsequent alteration, amendment, change or addition to this Lease shall be
binding upon landlord or Tenant unless reduced to writing and signed by them,
and no act by any representative or agent of Landlord other than a written
agreement shall constitute an acceptance thereof.
22.04 No Partnership. Landlord does not, in any way, or for any purpose,
become a partner of Tenant in the conduct of its business, or otherwise, or
joint adventurer or a member of a joint enterprise with Tenant. The provisions
of this Lease relating to the percentage rent payable hereunder are included
solely for the purpose of providing a method whereby the rent is to be measured
and ascertained.
22.05 Notices. Any notice, demand, request or other instruments which may
be or are required to be given under this Lease shall be delivered in person or
sent by United States certified mail postage prepaid and shall be addressed to
the Landlord and Tenant at their respective addresses as set forth on Exhibit A,
or at such other address as they may designate by written notice.
22.06 Recording. Tenant shall not record this lease without the written
consent of Landlord; provided, however, upon the request of and expense of
either party hereto, the other party shall join in the execution of the
statutory memorandum of this lease for purposes of recordation.
22.07 Adoption Agreement. The fundamental lease provisions appearing in the
Adoption Agreement (Exhibit A) for this Lease are an integral ▇▇▇ of this Lease
and are incorporated herein by reference. Each of the fundamental lease
provisions and terms shall be deemed a definition of an essential term of this
Lease and whenever any such term shall appearing this Lease, it shall be deemed
to have the meaning therefor set forth in the Adoption Agreement and shall be
limited by the provisions of this Lease applicable thereto.
22.08 Landlord Liability. Notwithstanding anything in this Lease to the
contrary, Tenant agrees that it will look solely to the estate of the Landlord
in the Premises for the collection of any judgment (or other judicial process)
requiring the payment of money by Landlord in the event of default or breach by
landlord with respect to any of the terms, covenants and conditions of this
lease to be observed and/or performed by the Landlord, and no other property or
assets of the Landlord shall be subject to levy, execution or other procedures
for the satisfaction of Tenant's remedies.
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IN WITNESS WHEREOF, the Landlord and Tenant have signed and sealed this
Agreement as of the date above written.
TENANT:
CEC/OPTICARE
By: /s/ D. ▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------
LANDLORD:
▇▇▇▇▇▇▇-▇▇▇▇▇▇ REALTY
By: /s/ ▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇
---------------------------
19
GUARANTY
--------
The undersigned, as an inducement to the Landlord to enter the aforesaid
lease, do hereby, jointly and severally, guarantee the full payment and
performance of CEC/Opticare under the terms of the foregoing lease, including
without limitation the payment of all rents (including "additional rents") and
charges and assessed costs thereunder.
This 1st day of September, 1999.
/s/ ▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇ (SEAL)
-----------------------------------
/s/ D. ▇▇▇▇▇ ▇▇▇▇▇▇▇ (SEAL)
-----------------------------------
20
EXHIBIT A
ADOPTION AGREEMENT
This Adoption Agreement made this 1st day of September, 1999 by and between
▇▇▇▇▇▇▇- ▇▇▇▇▇▇ Realty (herein "Landlord") and CEC/Opticare (herein "Tenant")
sets forth fundamental terms and definitions of terms referenced in a Lease
between said parties dated September 1, 1999, and the parties do hereby execute
this Adoption Agreement and incorporate all terms set forth herein said lease.
LANDLORD: ▇▇▇▇▇▇▇-▇▇▇▇▇▇ Realty
ADDRESS: ▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
TENANT: CEC/Opticare
ADDRESS: ▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
TENANT'S TRADENAMES: Opticare
COMMENCEMENT DATE: 9/1/99
--------------------------------------------------------------------------------
PREMISES: 4,000 feet of rental space contained in
the Building Complex which contains
approximately 7,000 square feet of gross
lease able space located at ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇., ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
--------------------------------------------------------------------------------
INITIAL TERM: Commencing 9/1/99 and ending midnight on
9/1/04.
--------------------------------------------------------------------------------
FIRST RENEWAL TERM: Commencing on _____________ and
terminating as of midnight on ___________
_____________.
--------------------------------------------------------------------------------
SECOND RENEWAL TERM: Commencing on _____________ and
terminating as of midnight on ___________
_____________.
--------------------------------------------------------------------------------
21
--------------------------------------------------------------------------------
PERMITTED USES: ________________________________
________________________________
________________________________
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
BASE RENT FOR INITIAL PERIOD $40,000 per annum or $3,333 per month
based on $10 per square foot of leased
premises
--------------------------------------------------------------------------------
MINIMUM BASE RENT FOR FIRST $_____________ per annum or
RENEWAL TERM: $_____________ per month based on
$____________ per square foot of leases
Premises.
--------------------------------------------------------------------------------
MINIMUM BASE RENT FOR SECOND $_____________ per annum or
RENEWAL TERM: $_____________ per month based on
$____________ per square foot of leases
Premises.
--------------------------------------------------------------------------------
INITIAL CAM ESTIMATE: N/A
--------------------------------------------------------------------------------
SECURITY DEPOSIT: N/A
--------------------------------------------------------------------------------
IN WITNESS WHEREOF, the parties have executed this Adoption Agreement,
this the day and year first above written.
LANDLORD: ▇▇▇▇▇▇▇-▇▇▇▇▇▇ Realty
By: /s/ ▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇
----------------------------
Title: President
TENANT: CEC/Opticare
By: /s/ D. ▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------
Title: President, NC Optometry