HomeMy WebLinkAbout2015-612 AMS - Hillsborough Commons, LLLP Lease modification LEASE MQDMCATION
THIS MOD!!IFJCATION OF LEASE made and entered into this day of
00 L9 , 20 y by and between HILLSBOROUGH COMMONS, LLLP as (hereinafter
"Landlord" and/or "Seller"), and ORANGE COUNTY, NORTH CAROLINA, (hereinafter
"Buyer" and/or"County" and/or"Tenant";
WITNESSETH:
Whereas Landlord and Tenant entered into that certain Lease Agreement dated July 25,
2008 and modified January 12, 2015 in connection with certain premises situated and being in
Orange County and the State of North Carolina being more particularly described in said Lease
Agreement; and
Whereas, Tenant has leased Unit 01 and Unit 03 containing 66,444 square feet which
agreement has an expiration date of January 21, 2019, subject to four (4) renewal option of five
(5) years each, with rent escalations at the beginning of each such renewal option; and
Whereas, Tenant and Landlord wish to amend the Lease Agreement to restate and modify
Tenant's Option to Purchase; and
Whereas, Tenant desires to modify the Expansion Space expiration date and add renewal
options and rent escalations to be concurrent with the terms of the Original Space Lease
Agreement; and
Whereas, Tenant and Landlord have agreed upon the terms of the modification and wish
to so modify the Lease.
Now, therefore, for and in consideration of the sum of$1.00 and other good and valuable
consideration each to the other paid the receipt and sufficiency of which consideration is hereby
acknowledged, the parties hereto hereby agree as follows:
1. The Original Space and the Expansion Space shall be combined to create a single
set of Lease terms ("Combined Space").
2. The expiration date of the Combined Space shall be January 21, 2019.
Base Rent for the Combined Space shall continue at the current rate, as follows:
Monthly: $ 74,480 Annual: $893,768
3. The Lease Modification Dated January 12, 2015 for the Expansion Space is hereby
null and void and of no further consequence.
4. The Combined Space shall be subject to all the Terms and Conditions of the
Original Space Lease Agreement, unmodified except for as modified by the terms
herein.
5. Tenant shall have four (4) renewal options of five (5) years each for the Combined
Space.
6. The Base Rent for the Combined Space for each renewal option shall be as follows:
Renewal option one (1) January 22, 2019—January 21, 2024
Monthly: $71,705 Annual: $860,460
Renewal option two (2) January 22, 2024—January 21, 2029
Monthly: $77,740 Annual: $932,880
Renewal option three (3) January 22, 2029—January 21, 2034
Monthly: $84,385 Annual: $1,012,620
Renewal option four(4) January 22, 2034—January 21, 2039
Monthly: $91,694 Annual: $1,100,328
LEASE MODIFICATION-HILLSBOROUGH COMMONS
ORANGE COUNTY
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7. Section 43. OPTION TO PURCHASE, of the Lease Agreement is hereby deleted in
its entirety.
8. Section 43. OPTION TO PURCHASE, of the Lease Agreement shall be replaced
with the following:
43. OPTION TO PURCHASE
Landlord does hereby grant to County the option (the "Option") to purchase all or a
portion of that certain parcel of real estate upon which the building containing the
Leased Premises is located, and being all of Orange County PIN Number 9864-80-
7829, and TMBL # 4.40.A.IA, less an approximately one acre parcel to be retained by
Landlord, as more fully described by metes and bounds description on Exhibit A
attached hereto and incorporated herein by this reference (the "Shopping Center")
upon the terms and provisions set forth herein. All references to Shopping Center in
this Section 43 shall mean that portion exercised.
1. Option Period. The Option commences on the date of this Lease and continues until
the termination of this Lease. Such period of time is hereinafter referred to as the
"Option Period." If the Option is exercised on or before February 1, 2012 it is for the
purpose herein the "First Option Period," and there after"Option Period."
2. Exercise of Option. At any time during the Option Period, County may exercise
the Option to purchase the Shopping Center by giving written notice to Landlord in
accordance with the terms of this Lease stating that County is exercising the Option by
giving such notice. Such notice of exercise shall be effective on the date notice is
deemed to be given under the terms of this Lease.
3. Failure to Exercise Option. If County fails to exercise the Option within the
Option Period, this Agreement shall automatically terminate; the parties shall have
no further obligations or liabilities to one another hereunder; and County shall have no
right whatsoever to purchase the Shopping Center or any portion thereof or interest
therein. Time is of the essence with respect to exercise of the Option and with
respect to each and every term of this Lease regarding the Option and purchase and
sale of the Shopping Center.
4. Purchase Price. During the First Option Period, the purchase price (the
"Purchase Price") for the Shopping Center shall be Fifteen Million Four Hundred
Eighty-Nine Thousand and No/100 Dollars ($15,489,000.00) payable at Closing,
less a credit calculated as follows: If, and only if, "Closing" (as defined below) occurs
on or before the last day of the F i r s t Option Period (i.e., F ebruary 1, 2012), County
shall receive a credit of Fifteen Thousand and no/100's Dollars ($15,000.00), multiplied
by the number of monthly installments of rent paid by County to Landlord under the
terms of the Lease during the Option Period, beginning on the Effective Date and
ending on the date of Closing. Such credit shall be prorated for the month in which
Closing occurs. If the Closing occurs after the First Option Period, County shall not be
entitled to any such credit. If the County exercises the Option after the expiration of the
First Option Period, the Purchase Price shall be as agreed between County and Landlord.
If the parties cannot reach agreement on the Purchase Price, the Option shall not be
considered exercised but the Counties right to again exercise the Option during the
remaining term of this Lease shall remain.
5. Closing. If County exercises the Option, a n d t h e p a r t i e s a g r e e o n t h e
P u r c h a s e P r i c e, County and Landlord shall close on the Shopping Center within
thirty (30) days after the date County exercises the Option (the "Closing"), but no later
than the end of the Term of the Lease, at the offices of County's counsel or closing
agent in Orange County, North Carolina, or at such other place as the parties may
agree upon in writing. At Closing, County shall pay to Landlord the Purchase
Price less any adjustments as provided herein in the form of cash or wire transfer to
one or more bank accounts designated by Landlord, and contemporaneously
Landlord shall deliver to County (a) the Deed (as defined in Paragraph 7 of this
Exhibit); (b) an affidavit for the benefit of County and its title insurer (the
"Affidavit"), stating that (i) no right to a mechanic's or materialman's lien has accrued
with respect to the Shopping Center as a result of any act by Landlord and (ii)
there are no outstanding leases or agreements with regard to, or other parties in or
entitled to possession of, the Shopping Center, except those leases (the "Shopping
Center Leases") listed on a current rent roll furnished by Landlord; (c) a Certificate
of Non-Foreign Status as required by Section 1445 of the Internal Revenue Code; and
(d) a settlement or closing statement. At Closing, Landlord and County shall execute
an assignment and assumption agreement whereby Landlord will assign the Shopping
Center Leases to County, and County shall agree to assume all obligations of
Landlord under the Shopping Center Leases effective as of the date of Closing.
LEASE MODIFICATION-HILLSBOROUGH COMMONS
ORANGE COUNTY
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As a condition precedent to the County's obligation in this Subsection 43(5),
Landlord shall furnish certificates to County no less than fifteen days prior to the
Closing from each Tenant under each Shopping Center Lease stating the following
information: (i) that this Lease constitutes the entire agreement between Landlord and
the tenant and is unmodified and in full force and effect (or if there have been
modifications, that the same is in full force and effect as modified and stating the
modifications); (ii) the dates to which the Minimum Rent, and other charges there
under have been paid, and the amount of any security deposited with Landlord;
(iii) that the leased premises have been completed on or before the date of such
letter and that all conditions precedent to this Lease taking effect have been carried
out; (iv) that tenant has accepted possession, that the Lease Term has commenced,
that tenant is occupying the leased premises, that tenant knows of no default under the
Lease by Landlord and that there are no defaults or offsets which tenant has against
enforcement of the Lease by Landlord; (v) the Rent Commencement Date of this Lease
and the expiration date of this Lease; and (vi) that tenant's office is open for business,
provided such facts are true and ascertainable.
6. Possession. Exclusive possession of the Shopping Center shall be delivered to
County at Closing, subject to the Shopping Center Leases.
7. Deed. At Closing, Landlord shall deliver to County a special warranty deed (the
"Deed") conveying to County fee simple title to the Shopping Center, subject to (i)
the lien for real estate taxes not yet due and payable; (il) all easements, covenants,
conditions, restrictions and other matters as appear of record; (iii) the Shopping
Center Leases; and (iv) the reserved easements described in Paragraph 17 below.
8. Closing Adjustments._ Ad valorem taxes on the Shopping Center, if any, for the
calendar year in which the closing occurs shall be paid by Landlord. The credit
for pro-rated ad valorem taxes on the Property that would be due Seller if Buyer
were not a North Carolina local government shall be added to the purchase price for
the fee simple interest in the Property. Landlord shall pay any Orange County ad
valorem taxes on personal property of Landlord for the entire year of the closing.
Seller shall pay all ad valorem taxes on the Shopping Center for calendar years prior
to the calendar year in which the closing occurs and all deferred taxes and any
tax penalties including late listing penalties. All rents under the Shopping Center
Leases and all utilities shall be prorated at Closing. Landlord shall pay the costs of
preparing the Deed. Tenant shall pay all and any excise tax on the Deed and all costs
and expenses incurred in connection with its examination of title to the Shopping
Center, including all premiums charged by County's title insurance company.
Each party shall pay its own legal, accounting, and other expenses incurred In
connection with the Option or Closing hereunder.
9. Condemnation. If, after exercise of the Option and prior to Closing, any taking
pursuant to the power of eminent domain is proposed or occurs, as to all or any
portion of the Shopping Center, or a sale occurs in lieu thereof, County shall be
entitled to elect either to (i) terminate its agreement to purchase the Shopping
Center by giving Landlord notice of such termination within fifteen (15) days
after County receives written notice of such occurrence, or (ii) proceed with
Closing, in which event all proceeds, awards and other payments arising from any
such taking or sale shall be paid to County, with no adjustment of the Purchase
Price.
10..Default. If County fails to close on that date required in Paragraph 5 above after
exercise of the Option, then Landlord shall be entitled to exercise any and all
remedies available to it at law or in equity for breach of a contract to purchase real
estate. In the event of default by Landlord, Buyer shall be entitled, as Buyer's sole
and exclusive remedy, either to: (a) terminate its agreement to purchase the
Shopping Center upon written notice to Landlord, or (b) demand and compel by
an action for specific performance or similar legal proceedings, if necessary, the
immediate conveyance of the Shopping Center by Landlord in compliance with the
terms and conditions set forth on this Exhibit.
I I.Costs of Litigation. In the event of litigation between Tenant and Landlord arising
out of the Option, each party shall pay its own costs and attorneys' fees.
12. Agents and Brokers. Each party hereunder represents and warrants that it did
not consult or deal with any broker or agent, real estate or otherwise, with
regard to the purchase and sale of the Shopping Center, and each party hereto agrees
to indemnify and hold harmless the other party from all liability, expense, loss, cost
or damage, including reasonable attorneys' fees, that may arise by reason of any
clalm, demand or suit of any agent or broker arising out of facts constituting a
breach of the foregoing representations and warranties.
13. Entire Agreement, Modification. This Exhibit contains the entire agreement
between the parties hereto relating to the Option and the purchase and sale of the
LEASE MODIFICATION-HILLSBOROUGH COMMONS
ORANGE COUNTY
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Shopping Center, and supersedes all prior and contemporaneous negotiations,
understandings and agreements, written or oral, between the partles hereto.
14. Assignment. County shall have no right to assign the Option without the prior
express written approval of Landlord, which approval may be grantee or denied by
Landlord in its sole and absolute discretion.
15.Time of the Essence. The parties agree that time is of the essence with respect to
the performance of all obligations, the exercise of the Option and all other time or
deadline related matters herein.
16. Memorandum of Agreement. Landlord agrees that, at the request of County,
Landlord will promptly execute and deliver a memorandum of the Option in recordable
form sufficient to provide record notice of the Option, and County shall be entitled to
record such memorandum in the Orange County Register of Deeds, at County's sole
cost and expense. If County makes such a request to Landlord, County will, at that
time, deliver to Landlord's counsel, to be held in escrow by such counsel, an
executed Release, in form satisfactory for recordation in the Orange County Register
of Deeds, releasing such memorandum from record in the event that County
fails to timely exercise the Option or the Option otherwise terminates. Landlord's
counsel may release the escrowed Release document, or record it in the Orange
County Register of Deeds, in the event of such termination or non-exercise.
17. Easements. At Closing, Landlord may, subject to the review and approval of the
County which approval shall not be unreasonably withheld, reserve easements for
ingress and egress over the Shopping Center . to provide access by pedestrian
and vehicular traffic over all drive aisles, entrances, exits, and curb cuts, and for
installation and operation of utilities over the Shopping Center at locations reasonably
acceptable to the owner of the Shopping Center, for the benefit of Landlord's one acre
retained parcel, as shown on Exhibit A attached hereto.
18. Disclaimer. County acknowledges and agrees that Landlord has not made, does
not make, and will not make, and specifically negates and disclaims, any
representations, warranties (other than the warranty of title as set out in the Deed),
promises, covenants, agreements or guaranties of any kind or character whatsoever,
whether express or implied, oral or written, past, present, or future, of, as to,
concerning or with respect to (a) the value, nature, quality or condition of the
Shopping Center, including, without limitation, the water, soil and geology, (b) the
income to be derived from the Shopping Center, (c) the suitability of the Shopping
Center for any and all activities and uses which County may conduct thereon, (d) the
compliance of or by the Shopping Center or its operation with any laws, rules,
ordinances or regulations of any applicable governmental authority or body,
(e) the habitability, merchantability, marketability, profitability or fitness for a
particular purpose of the Shopping Center, (f) the manner or quality of the
construction or materials, if any, incorporated Into the Shopping Center, (g) the manner,
quality, state of repair or lack of repair of the Shopping Center, or (h) any other
matter with respect to the Shopping Center, and specifically, that Landlord has
not made, does not make and specifically disclaims any representations regarding
compliance with any environmental protection, pollution or •land use laws,
rules, regulations, orders or requirements, Including the existence in or on the
property of hazardous materials (as defined below). County further acknowledges
and agrees that having been given the opportunity to inspect the Shopping Center,
County is and will be relying solely on its own investigation of the Shopping Center
and not on any information provided or to be provided by Landlord and at the Closing
agrees to accept the Shopping Center and waive all objections or claims against
Landlord (including, but not limited to, any right or claim of contribution)
arising from or related to the property or to any hazardous materials on the Shopping
Center. Landlord is not liable or bound in any manner by any verbal or written
statements, representations or information pertaining to the property, or the
operation thereof, furnished by any real estate broker, agent, employee, servant or
other person. County further acknowledges and agrees that to the maximum extent
permitted by law, the sale of the Shopping Center as provided for herein is made on an
"as is" condition and basis with all faults.
19. Landlord represents and warrants, as of the date of this Lease Agreement, that it
has not granted any other entity an option to purchase the Shopping Center other
than County, nor has Landlord entered into a purchase agreement or any other
agreement or arrangement whatsoever that would prohibit Landlord from selling the
Shopping Center to County.
20. If County exercise the Option, then Landlord shall obtain any and all required
regulatory approvals and permits (including but not limited to special use permits,
modifications of existing special use permits, subdivision approval and zoning
approval) from the applicable authority prior to the Closing in order to
effectuate the sale contemplated by the Option and in order to legally subdivide
LEASE MODIFICATION-HILLSBOROUGH COMMONS
ORANGE COUNTY
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Outparcel A from the Shopping Center, The procurement of said approvals and
permits shall be at the sole cost and expense of Landlord and shall be a prerequisite
to County's Closing obligation contained with Subsection 43(5) above of this Lease.
21. Landlord hereby grants to County a right of entry upon the shopping center for the
purpose of making surveys, engineering studies, tests and such other investigations
and inspections as County may elect to make, or the period of time beginning on
December 1, 2011 and ending on the expiration of the Lease. Notwithstanding,
should County be desirous of exercising their Purchase Option prior to the
expiration of the Lease, then in that event, County shall be entitled to complete all due
diligence during the period beginning ninety (90) days prior to such exercise date
and ending on the date of such exercise. All inspections, tests and examinations shall
be conducted by parties qualified and, where applicable, licensed to conduct such
inspections, tests and/or examinations. County shall pay the costs of all such tests,
inspections, examinations, and investigations. After the performance of any tests,
inspections, examinations, and investigations, county shall promptly restore any
damage to the shopping center to substantially the same condition as existed prior
to the conduct of said tests, inspections, examinations, and investigations. County
shall indemnify, (to the extent of insurance policies owned by the County and to
the extent of applicable law) defend (to the extent of insurance policies owned
by the County and to the extent of applicable law) and hold Landlord harmless
from any and all costs or liens arising or claimed as a result of any such activity on or
with respect to the shopping center and from any claims, loss or damage (including,
without limitation, reasonable attorneys' fees and costs) suffered by Landlord as a
result of the activities of County or of any party employed or engaged by County
to perform any test, inspection, examination, or Investigation on the shopping center.
In conducting its investigation, County and County's agents shall conduct all
operations on the shopping center in a reasonable manner and so as not to
unreasonably interfere with the operation of the shopping center by Landlord nor
with the conduct of business or operations by tenants and occupants. Furthermore,
all such tests and inspections shall be permitted upon reasonable prior notice to
Landlord, affording landlord the opportunity to have a representative present at
any test, inspection or examination conducted on the shopping center. County shall
not conduct any environmental testing of the shopping center beyond a phase I
environmental site assessment without the prior written approval of Landlord.
County shall not perform any subsurface or destructive testing of any kind at the
shopping center, without the prior written consent of Landlord. If such testing
is required, county shall provide reasonable notice thereof. Notwithstanding the
foregoing, or anything to the contrary contained in this Lease, County and/or
County's representatives shall not enter the shopping center for the purposes of
performing any inspections without providing Landlord at least twenty-four (24) hour
notice of such scheduled entry upon the shopping center.
22. On or before February 1, 2012, Landlord agrees not to enter into a Lease for
any portion of the Shopping Center whatsoever during the term of this Lease which
will result in a lease term that extends beyond March 1, 2012 without the prior
approval of the County, which approval shall not be unreasonably withheld.
23. Should Landlord receive an offer, for all or part of the Shopping Center, Landlord
shall present same to Tenant, providing Tenant thirty (30) days right of first refusal to
match the terms and conditions of said offer. If Tenant does not exercise its right of first
refusal within said thirty (30) day period, Landlord shall be free to sell the Shopping
Center to such third party and thereafter Tenants option to purchase the Shopping Center
and any part thereof shall be null and void.
24. At closing Landlord shall provide County estoppel certificates from all tenants
then occupying the Shopping Center.
9. In all other respects said Lease Agreement shall remain in full force and effect
unchanged and shall not be altered in any way by this modification.
[SIGNATURE PAGE TO FOLLOW]
LEASE MODIFICATION-HILLSBOROUGH COMMONS
ORANGE COUNTY A/
5 Ul
IN WITNESS WHEREOF, the parties hereto have executed this Modification of Lease
the day and year first above written.
Signed, sealed and delivered HILLSBOROUGH COMMONS LLLP
in the presence of: BY: HILLSBOROUGH SHOPPING CENTER,
INC., GENE ARTNER
_ — By. 67
Marc L. Hagle, CEO
ORANGE COUNTY,NORTH CAROLINA
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Print Name
LEASE MODIFICATION—HILLSBOROUGH COMMONS
ORANGE COUNTY
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Landlord's
Retained
Parcel
ORIGINAL SPACE
EXPANSION SPACE
COMBINED SPACE
LEASE MODIFICATION-HILLSBOROUGH COMMONS
ORANGE COUNTY
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