LEASE
WELLS FUND XI-FUND XII-REIT JOINT VENTURE
(LANDLORD)
AND
CATERPILLAR INC.
(TENANT)
GREENVILLE, SC FACILITY
LEASE
THIS LEASE (“Lease”) is made and entered into effective as of January 1, 2007 (“Effective Date”), between
The Wells Fund XI-Fund XII-REIT Joint Venture (“Landlord”), and Caterpillar Inc., a Delaware corporation
(“Tenant”).
RECITALS:
A. Landlord is the owner of certain real property as described herein and which is located at 111
Southchase Boulevard, Fountain Inn, South Carolina.
B. Tenant desires to lease from Landlord and Landlord desires to lease to Tenant the Premises (as
defined below), on the terms and subject to the conditions set forth below.
NOW, THEREFORE, in consideration of the mutual covenants contained herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant
agree as follows:
AGREEMENT:
1.
PREMISES.
Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, subject to
the terms and conditions of this Lease, for the term and at the rent stated herein, the approximately 168,087
square foot building (the “Building”) located on the parcel of land described in Exhibit A hereto (the “Land”),
improvements located thereon, including parking, and certain additional improvements or upfits to be
constructed thereon to meet Tenant’s needs, and all easements, rights and appurtenances thereto including non-
exclusive common areas (the Land, Building and improvements are collectively called the “Premises”). The
improvements are to be constructed by Landlord pursuant to the terms of the attached Exhibit B (“Landlord’s
Work”) according to the Plans (as defined in Exhibit B) which are based on the Specifications described in the
attached Exhibit C.
All references in this Lease to square footage are in terms of gross square feet unless otherwise stated. All
measurements shall be in accordance with the Building Owners and Management Association (“BOMA”)
standards. Tenant has the right to independently verify the square footage calculation.
2.
TERM.
The initial term of this Lease shall commence on the Effective Date and shall extend for
sixty (60) months (“Initial Term”). The Initial Term, as it may be extended by any Renewal Terms described in
Section 25 below is referred to as the “Term”.
3.
RENT.
Subject to any exceptions described in Exhibit B, during the Initial Term of the Lease,
beginning on the first day of the Initial Term, Tenant shall pay rent to Landlord on an annual basis in the amount
of $3.85 per gross square foot, payable in monthly installments of Fifty-Three Thousand Nine Hundred Twenty-
Seven and 91/100 Dollars ($53,927.91) (“Base Rent”). Each installment of Base Rent shall be paid on the first
day of each month of the Term without demand. If the Initial Term commences on a day other than the first day
of a month, then Tenant shall pay a pro-rata Base Rent payment for the partial month upon the commencement
of the Initial Term. Base Rent during any Renewal Terms is described in Section 25 below.
During the Term, the Base Rent shall automatically increase effective on the anniversary of the first day
of the Initial Term at a rate equal to two and one-half percent (2.5%).
4.
TAXES.
a.
Tenant shall pay when due all real property taxes and assessments assessed, imposed, or levied against
the Premises (or its proportionate share on a square footage basis if not separately assessed) during the
Term, subject to a proportionate adjustment in the first and last years for the portion of such years not
included in the Term of this Lease and subject to subsection (b) below. At Landlord’s election and
upon Landlord’s notice to Tenant, Tenant shall either pay such taxes directly to the taxing authority, or
to Landlord within thirty (30) days of receiving from Landlord a copy of Landlord’s receipt evidencing
payment to the taxing authority. Tenant shall pay all taxes charged against trade fixtures, furnishings,
equipment or any other personal property belonging to Tenant. Tenant shall endeavor to have all
personal property taxed separately from the Premises.
b.
Tenant reserves the right to contest said real property taxes and assessments at its own cost and expense
(including any reasonable costs or fees incurred by Landlord), and any refunds resulting therefrom
shall be the property of Tenant. Upon the final determination of any proceeding or contest, Tenant shall
pay the taxes due, together with all costs, charges, interest and penalties incidental to the proceedings.
If, for whatever reason, Tenant elects not to contest said real property taxes, Landlord may do so, and
refunds resulting therefrom (less deductions for Landlord’s out-of-pocket expenses incurred in the
contest) shall be the property of Tenant.
c.
Any special assessments that can be paid over time rather than in a lump sum shall be paid over a
reasonable duration as permitted by law, and Tenant shall only be liable for the payments made by
Landlord during the Term. If the Premises are not separately assessed, Landlord shall reasonably
determine Tenant’s proportionate share of the real property taxes payable by Tenant under this Lease.
5.
UTILITIES.
Tenant shall pay, directly to the provider, all charges for heat, electricity, and other
public utilities incurred by the Tenant in the use of the Premises, including sewer user fees and sanitary charges.
6.
TENANT INSURANCE.
a.
Tenant Insurance – Throughout the Term, Tenant shall obtain and maintain the following insurance
coverages written with companies with an A.M. Best A VII or better rating and S&P rating of at least
A-:
1.
Commercial General Liability (“CGL”) insurance (written on an occurrence basis) with limits not
less than One Million Dollars ($1,000,000) combined single limit per occurrence, Two Million
Dollar ($2,000,000) annual general aggregate (on a per location basis), Two Million Dollars
($2,000,000) products/completed operations aggregate, One Million Dollars ($1,000,000) personal
and advertising injury liability, Fifty Thousand Dollars ($50,000) fire damage legal liability, and
Five Thousand Dollars ($5,000) medical payments. CGL insurance shall be written on ISO
occurrence form CG 2010 (or a substitute form providing equivalent or broader coverage) and shall
cover liability arising from Premises, operations, independent
contractors, products-completed operations, personal injury, advertising injury and liability assumed
under an insured contract.
2.
Workers Compensation insurance as required by the applicable state law, and Employers Liability
insurance with limits not less than One Million Dollars ($1,000,000) for each accident, One Million
Dollars ($1,000,000) disease-policy limit, and One Million Dollars ($1,000,000) disease-each
employee.
3.
Commercial Auto Liability insurance (if applicable) covering automobiles owned, hired or used by
Tenant in carrying on its business with limits not less than One Million Dollars ($1,000,000)
combined single limit for each accident.
4.
Umbrella/Excess Insurance coverage on a follow form basis in excess of the CGL, Employers
Liability and Commercial Auto Policy with limits not less than Five Million Dollars ($5,000,000) per
occurrence and Five Million Dollars ($5,000,000) annual aggregate.
5.
Property Insurance. Throughout the Term, Tenant shall obtain and maintain Commercial all risk
property insurance covering the Building, its foundations when the loss is part of a covered peril,
Tenant’s leasehold improvements, heating, ventilating and air conditioning equipment, machinery
and personal property in an amount not less not less than one hundred percent (100%) of their full
replacement value as mutually determined by Landlord and Tenant. Coverage shall also include cost
of removal of the Building and construction of a new building of like size, kind and quality in
accordance with applicable zoning ordinances and building codes and shall insure against the risk
included in all risk policy including coverage for terrorism, earth movement, mold when the loss is
part of a covered peril and flood. Coverage shall be in an amount sufficient to prevent Tenant or
Landlord from becoming a co-insurer of any loss under the applicable policies, but in any event in an
amount not less than one hundred percent (100%) of the full insurable value. Coverage shall be
written with companies with an A.M. Best A VII or better rating and S&P rating of at least A-.
Landlord shall be named as a loss payee. Any applicable mortgagee shall be included a mortgage
under standard mortgagee policy provision.
Landlord shall be a loss payee on the Property Insurance policy and any lender shall be a named
mortgagee. Property insurance shall (1) contain an endorsement that such policy shall remain in
full force and effect notwithstanding that the insured may have waived its right of action against
any party prior to the occurrence of a loss (Tenant hereby waiving its right of action and recovery
against and releasing Landlord and Landlord’s Representatives from any and all Property
liabilities, claims and losses for which they may otherwise be liable to the extent Tenant is
covered by Property insurance carried or required to be carried under this Lease); (2) provide that
the insurer thereunder waives all right of recovery by way of subrogation against Landlord and
Landlord’s Representatives in connection with any Property loss or damage covered by such
policy; (3) be reasonably acceptable in form and content to Landlord; and (4) contain an
endorsement prohibiting cancellation, failure to renew, reduction of amount of insurance or
change in coverage without the insurer first giving Landlord thirty (30) days’ prior written notice
of such proposed action. Tenant shall deliver its standard generic liability form for all liability
and property insurance and a FM Global certificate with respect to all commercial property
insurance to Landlord on or before the Effective Date and upon
policy expiration. If Tenant fails to provide evidence of insurance required to be provided by
Tenant hereunder, prior to commencement of the Term and thereafter within thirty (30) days
following Landlord’s request during the Term (and in any event within thirty (30) days prior to
the expiration date of any such coverage, any other cure or grace period provided in this Lease
not being applicable hereto), Landlord shall be authorized (but not required) after ten (10) days’
prior notice to procure such coverage in the amount stated with all costs thereof to be chargeable
to Tenant and payable as additional rent upon written invoice therefore.
b.
In lieu of maintaining insurance policies, Tenant may self-insure against any risks related to this
Lease, provided Tenant maintains a net worth (as shown by its financial statements audited in
accordance with generally accepted accounting principles) of not less than One Hundred Million
Dollars ($100,000,000.00) and maintains a credit rating according to Standard & Poor’s of BBB+ or
better. Tenant’s waiver of subrogation and release of Landlord for liabilities covered by insurance as
set forth in Article 10 shall not extend to liabilities otherwise required under this Lease to be insured
against but with respect to which tenant has elected to self-insure in whole or in part, as well
liabilities encompassed by the insurance maintained by Tenant.
c.
Tenant shall also cause its contractors and subcontractors to carry workers compensation insurance
in the statutorily required amounts, and a commercial general liability policy of at least
$1,000,000.00, with such policy naming Landlord and Tenant as additional insureds in such policy.
7.
LANDLORD’S LIABILITY INSURANCE.
Landlord at its expense shall maintain commercial
general public liability insurance and an umbrella liability policy arising out of Landlord’s ownership and its
duties, with a combined single amount of not less than Three Million Dollars ($3,000,000). Further, Landlord
shall require all contractors performing work on the Premises by, through or under Landlord to procure and
maintain workers’ compensation insurance in at least the statutorily required amounts, and a commercial general
liability policy of at least One Million and No/100 Dollars ($1,000,000.00).
8.
MAINTENANCE.
During the Term, subject to ordinary wear and tear, Tenant shall maintain and
repair the interior of the Premises, including entrance doors and door jams (both inside and outside), ceiling tile,
plate glass, exterior lighting, paved areas, snow removal, landscaping and common building systems (heating,
ventilating, air-conditioning, plumbing and electrical).
A single repair, or the replacement of a single item which needs replacement, including the common
building systems (heating, ventilating, air-conditioning, plumbing and electrical), in excess of Five Thousand
Dollars ($5,000.00), shall be Landlord’s cost (with Tenant paying the first $5,000.00 of any such single repair or
replacement); provided, however, that single item repairs and replacements of items repaired or replaced as part
of one project shall be aggregated before determining the proper cost allocation hereunder.
Landlord shall maintain, repair, and replace as necessary, at its sole cost, all other portions of the
Premises, including the exterior of the Building and all structural components and members, including exterior
and load-bearing walls, the roof, roof trusses, sprinkler system, slab and foundation, gutters and downspouts.
If Tenant or Landlord refuses or neglects to make repairs and/or refuses to maintain the Premises or any
part thereof in a manner reasonably satisfactory to the other, then Landlord or Tenant, as the case
may be, shall have the right upon giving the other fifteen (15) days advance written notice of election to do so,
to make such repairs or perform such maintenance on behalf of and for the account of the other. In such event,
such work shall be paid for by the other within ten (10) days upon receipt of the itemized bill therefore.
Notwithstanding any of the foregoing provisions of this Section 8, any latent defect, regardless of its nature,
which becomes apparent during the first year of the Term shall be repaired by Landlord at Landlord’s expense
and shall not be considered an operating cost. Notwithstanding anything contained herein to the contrary,
Landlord shall make available to Tenant, and Tenant shall receive full benefit of, any manufacturers’
warranties/guarantees associated with any component(s) of the Premises, structural or non-structural, including
mechanical systems.
9.
ALTERATIONS.
Tenant shall not make any alterations in or additions to the Premises, or make any
contract therefor without first procuring Landlord’s written consent, which consent will not be unreasonably
withheld or delayed, provided that Tenant may make non-structural alterations not exceeding Twenty-Five
Thousand Dollars ($25,000) without Landlord’s consent. All alterations, additions, improvements and fixtures,
(except Tenant’s trade fixtures, partitions, furniture, office equipment, warehouse machinery and equipment and
other movable items paid for by Tenant, all of which shall remain the property of and may be removed by
Tenant) shall become the property of Landlord, and shall remain upon and be surrendered with the Premises on
the expiration or earlier termination of the Lease without compensation or credit to Tenant; provided, that if on
said expiration or termination, or within fifteen (15) days thereafter, Landlord so directs by written notice to
Tenant, Tenant shall promptly remove the additions, improvements, fixtures, and installations which were
placed in the Premises by Tenant and which are designated in said notice, and repair any damage occasioned by
such removal, and in default thereof, Landlord may effect said removals and repairs at Tenant’s expense. All
trade fixtures not removed by Tenant within fifteen (15) days of the receipt of a written request from Landlord
shall become the property of Landlord.
10.
WAIVER OF SUBROGATION.
Landlord and Tenant each hereby waives on behalf of itself and
its property insurers (none of which shall ever be assigned any such claim or be entitled thereto due to
subrogation or otherwise) any and all rights of recovery, claim, action, or cause of action, against the other, its
agents, officers, servants, partners, shareholders, or employees for any loss or damage that may occur to the
Premises, or any improvements thereto, or any personal property of such party therein, by reason of fire, the
elements, or any other cause of origin, which is insured against under any property insurance policy actually
being maintained from time to time, even if not required hereunder, or which would be insured against under the
terms of any insurance policy required to be carried or maintained hereunder, whether or not such insurance
coverage is actually being maintained by Tenant and regardless of the cause or origin, including in every
instance negligence by the other party hereto, its agents, officers, or employees. Landlord and Tenant each agree
to cause appropriate clauses to be included in their property insurance policies necessary to implement the
foregoing provisions.
11.
INDEMNIFICATION.
Tenant indemnifies and holds harmless Landlord for damages to persons or
property, resulting from performance or non-performance by Tenant of its Lease obligations, or Tenant’s
operations at or around the Premises, including claims regarding negligence, whether caused in whole or in part
by Tenant, or Tenant’s agents; provided, that Tenant shall not be liable to the extent such claims result from
(a) negligence or willful misconduct of Landlord, or (b) failure of Landlord to perform its Lease obligations.
Landlord indemnifies and holds harmless Tenant for damages to persons or property, resulting from
performance or non-performance by Landlord of its Lease obligations, or its ownership, maintenance or
operation of the Premises, including claims regarding negligence, whether caused in whole or in part by
Landlord, or Landlord’s agents; provided, that Landlord shall not be liable to the
extent such claims result from (a) negligence or willful misconduct of Tenant, or (b) failure of Tenant to
perform its Lease obligations.
12.
SUBORDINATION.
This Lease and all the right’s of Tenant hereunder are and shall be subject and
subordinate at all times only to a properly filed and recorded first priority deed of trust, or mortgage placed on
the Premises by an institutional lender any advances made on the security thereof and any renewals,
modifications, consolidations, replacements or extensions thereof, whenever made or recorded, either prior or
subsequent to the date hereof, (and Tenant agrees to attorn to such holder), provided that the holder of any such
mortgage agrees to recognize Tenant’s rights under this Lease so long as Tenant is not in default under any of
the terms hereof (beyond any applicable notice and cure period). If requested by Landlord’s lender, Tenant shall
execute and deliver a non-disturbance and attornment agreement in the form attached as Exhibit D to this Lease
within thirty (30) days of receipt thereof pursuant to the notice provisions contained herein. If any beneficiary or
mortgagee elects to have this Lease prior to the lien of its deed of trust or mortgage and gives written notice
thereof to Tenant, this Lease shall be deemed prior to such deed of trust, or mortgage whether this Lease is dated
prior or subsequent to the date of such other instrument or its recording date. Tenant shall execute and deliver
within thirty (30) days of receipt thereof pursuant to the notice provisions contained herein, as often as
reasonably requested, estoppel certificates substantially in the form attached as Exhibit E to this Lease, so long
as Landlord attaches to such estoppel certificate copies of all modifications or amendments prior to requesting
execution thereof.
13.
ABANDONMENT.
Tenant shall not permit the accumulation of waste or refuse matter on the
Premises. Tenant shall not abandon the Premises.
14.
CONDEMNATION.
If the whole of the Premises hereby demised shall be taken or condemned by
any competent authority for any public use or purpose, then the Term hereby granted shall cease on the day
prior to the vesting of title in such authority, or taking of possession, (whichever occurs first) and Base Rent
hereunder shall be paid and adjusted as of that day.
If a portion of said Premises, including the parking lot, shall be taken and, as a result thereof, there shall
be such a major change in the character of the Premises as to prevent Tenant from using the same in
substantially the same manner as theretofore used, then, and in that event, Tenant may either cancel or terminate
this Lease as of the date when the part of the Premises so taken shall be required for such public purpose, or
Tenant may continue to occupy the remaining portion, provided, however, Tenant shall give written notice to
Landlord, within thirty (30) days after the date of such vesting of title, of its election. In the event Tenant shall
remain in possession and occupation of the remaining portion, all the terms and conditions of this Lease shall
remain in full force and effect with respect to such remaining portion, except that the Rent reserved to be paid
hereunder shall be equitably reduced according to the amount and value of such remaining space; and provided
further that Landlord shall, at Landlord’s own expense, promptly and with all reasonable diligence (subject to
strikes, lockouts, inability to procure material and labor in the free market, governmental restrictions, fire, the
elements and other extraordinary conditions beyond Landlord’s reasonable control) do such work as to make a
complete architectural unit of the remainder of the Premises, and this Lease shall continue for the balance of its
Term, subject to the terms and conditions herein stated.
The entire award for damages or compensation for the Premises taken, or the amount paid pursuant to
private purchase in lieu thereof, whether such condemnation or sale be total or partial, shall belong to and be the
property of Landlord, and Tenant hereby assigns to Landlord any and all such award or purchase price. Nothing
herein contained shall be deemed or construed to prevent Tenant from interposing and prosecuting in any
condemnation proceeding a claim for the value of any trade fixtures or personal property installed in the
Premises by Tenant, moving expenses, and in the case of a partial
condemnation of the Premises, the cost or damage sustained by Tenant as a result of the interruption of or
damage to Tenant’s business.
15.
ASSIGNMENT; SUBLETTING.
Tenant agrees not to assign, or in any manner transfer this Lease
or any interest hereunder, and further agrees not to sublet the Premises or any portion thereof without the
previous written consent of Landlord in each instance, which consent shall not be unreasonably withheld or
delayed. Notwithstanding the above, Tenant shall have the right to sublease the Premises or assign this Lease to
an affiliate or wholly-owned subsidiary of Tenant without Landlord’s consent, provided Landlord is given
written notice within fifteen (15) days following said sublease or assignment.
16.
ACCESS BY LANDLORD.
Landlord may enter upon the Premises at all reasonable hours upon
prior notice to Tenant for the purpose of inspecting the same, or making repairs, or to exhibit the Premises to
prospective purchasers, or to prospective tenants during the last ninety (90) days of the Term, provided it does
not interfere with Tenant’s use of the Premises.
17.
DAMAGE OR DESTRUCTION.
In the event the Premises shall be destroyed or so damaged by
fire, explosion, windstorm, or other casualty as to be untenantable, Landlord shall promptly restore the Premises
in consultation with FM Global, but only if and to the extent that the insurance proceeds are paid over to
Landlord, or if Tenant elects to self-insure, Tenant pays over the proceeds to permit a full restoration of the
Building.
In the event the Premises shall be damaged as aforesaid but are not thereby rendered untenantable,
Landlord shall promptly restore the Premises, and while such damage is being repaired, there shall be no
abatement of Base Rent or other charges otherwise due from Tenant hereunder, during any restoration. Landlord
shall not be liable for any delays in rebuilding or repairing due to labor controversies, riots, Acts of God,
governmental laws or regulations, or inability to procure materials or labor or both, or any other causes beyond
Landlord’s control. Notwithstanding anything contained herein to the contrary and subject only to delays caused
by Tenant, or its agents, in the event that the Premises are not restored within one hundred eighty (180) days
when rendered untenantable or within one hundred fifty (150) days when not rendered untenantable, Tenant
shall have the right to terminate this Lease and all obligations hereunder by providing Landlord with written
notice within thirty (30) days after the expiration of such one hundred eighty (180) or one hundred fifty
(150) day periods, as applicable; provided, however, that such termination shall become effective upon the date
which is the later to occur of: (i) thirty (30) days after the expiration of the one hundred eighty (180) or one
hundred fifty (150) day period, as set forth above, and (ii) payment by Tenant and FM Global, if applicable, of
all insurance proceeds necessary to permit full restoration of the Building.
18.
DEFAULT.
The occurrence of any of the following shall constitute a default by Tenant under this Lease:
a.
If Tenant shall fail to pay any payment of Base Rent when due or shall fail to make when due any other
payment required by this Lease.
b.
If Tenant shall violate or fail to perform any term, condition, covenant or agreement to be performed or
observed by Tenant under this Lease other than as otherwise set forth in this Section 18.
c.
The taking of any action for voluntary dissolution of Tenant.
d.
The making by Tenant of a general assignment for the benefit of creditors.
e.
Liquidation of substantially all of Tenant’s assets occurs.
f.
If proceedings are instituted in a court of competent jurisdiction for the adjudication as a bankrupt or
insolvent or for the appointment of a receiver of the property of Tenant.
The occurrence of any default described in Sub-section (a) above shall be a “Tenant Event of Default”
following the passage of fifteen (15) business days following Tenant’s receipt of written notice from Landlord
of the occurrence of said default, provided such default is not cured during such cure period. The occurrence of
any other default described in this Section 18 shall be a Tenant Event of Default following the passage of thirty
(30) days following Tenant’s receipt of written notice from Landlord of the occurrence of said default, provided
such default is not cured during such cure period (provided that in the case of any default that cannot be cured
by the payment of money and cannot with diligence be cured within such thirty (30) day period, if Tenant shall
proceed promptly to cure the same and thereafter shall prosecute the curing of such default with diligence and
continuity, then the time within which such default may be cured shall be extended so long as Tenant’s
diligently prosecutes the same to completion). Upon a Tenant Event of Default, Landlord shall have all rights
and remedies at law and in equity, including the right to cure or attempt to cure such Tenant Event of Default,
and the right to evict Tenant and retake possession with or without court order and collect the balance of Base
Rent or any other sums which may be due under this Lease, provided that Landlord shall have an obligation to
mitigate damages.
If Landlord breaches or fails to observe, keep, or perform any term, covenant or condition of this Lease on
its part to be observed, kept or performed, Landlord shall be in default. The occurrence of any monetary default
shall be a “Landlord Event of Default” following the passage of fifteen (15) business days following Landlord’s
receipt of written notice from Tenant of the occurrence of such default, provided such default is not cured during
such cure period. The occurrence of any non-monetary default shall be a Landlord Event of Default following
the passage of thirty (30) days (or any shorter period of time specifically described in this Lease) following
Landlord’s receipt of written notice from Tenant of the occurrence of such default, or if such breach cannot be
cured with the payment of money and cannot, with due diligence, be cured within such period, if Landlord shall
commence promptly to cure the same and thereafter shall prosecute the curing of such default with diligence and
continuity, then the time shall be extended so long as Landlord diligently prosecutes the same to completion.
Upon the occurrence and during the continuation of a Landlord Event of Default, in addition to any other legal
or equitable rights or remedies to which Tenant may be entitled, all of which shall be cumulative, Tenant shall
have the right to cure or attempt to cure such Landlord Event of Default. Landlord shall, within thirty (30) days
following receipt of a written statement from Tenant, accompanied by valid copies of paid invoices, reimburse
Tenant for all reasonable costs and expenses incurred by Tenant in affecting such cure. If Landlord fails to
reimburse Tenant within thirty (30) days, Tenant shall have the right to offset such costs against Base Rent until
such costs are recovered by Tenant.
19.
HOLDOVER.
Should Tenant hold over and remain in possession of the Premises after the
expiration of the Term without Landlord’s consent, it shall not be deemed or construed to be renewal of this
Lease, but shall only operate to create a month-to-month tenancy which may be terminated by either party at the
end of any month upon thirty (30) days’ written notice to the other party. During any holding over period, the
Lease shall otherwise remain in full force and effect, except that Base Rent shall be one hundred and twenty-five
percent (125%) of the Base Rent then in effect.
20.
NOTICES.
Any notice or other communication provided for in this Lease shall be in writing and
delivered by registered or certified mail, facsimile or personal or courier delivery to the other party at the
address specified below unless a party has changed its address by notice given pursuant to this Section 20 in
which case it shall be sent to the changed address.
Landlord:
c/o Wells Real Estate
6200 The Corners Parkway
Suite 250
Norcross, GA 30092
Attn: Asset Manager – Southern Region
Phone: (770) 449-7800
Facsimile: (770) 243-4684
Tenant:
Caterpillar Inc.
111 Southchase Blvd.
Fountain Inn, SC 29644
Attention: Facility Manager
With a copy to:
Caterpillar Inc.
100 N.E. Adams Street
Peoria, IL 61629-9320
Attn: Corporate Real Estate Manager
Phone: (309) 675-5142
Facsimile: (309) 494-4577
Any notice, demand or other communication sent by either party shall be deemed to have been received
by the other party upon the earliest of: actual receipt or refusal of delivery; if personally delivered, at the time of
delivery; if sent by certified or registered mail, seven (7) days after the date of posting; and if sent by facsimile,
at the time of transmission, provided that the confirmation copy is sent by certified or registered mail.
21.
SEVERABILITY.
If any term or provision of this Lease shall be invalid or unenforceable, the
remainder of this Lease shall not be affected thereby, and each term and provision of this Lease shall be valid
and be enforced to the full extent permitted by law.
22.
ENVIRONMENTAL.
Landlord hereby warrants and represents to the best of its knowledge that,
except as set forth below, the Premises does not contain asbestos, PCB transformers, or other hazardous, toxic or
contaminated materials or substances, or underground fuel storage tanks or any other material or substance
which is defined or classified as hazardous or toxic under federal, state or local law (the aforementioned all of
which collectively shall hereinafter be referred to as “Hazardous Materials”).
Landlord hereby covenants and agrees to indemnify and hold harmless Tenant and its directors, officers,
employees, successors, legal representatives and assigns from and against all claims, damages, liabilities, losses,
judgments, settlements and costs (including, without limitation, reasonable attorney’s fees and disbursements) in
connection with Hazardous Materials arising out of, resulting from or in any way connected with or alleged or
claimed to arise out of, result from or be in any way connected with (a) the use or occupancy of the Premises by
the Landlord or any previous owner/occupant/user of the Premises, or any portion thereof, prior to Tenant’s
occupancy of the Premises; (b) the use or occupancy of the Premises by any subsequent owner/occupant/user of
the Premises, or any portion thereof, after Tenant’s occupancy of the Premises terminates; (c) violations by any
prior or subsequent owner/occupant/user of the Premises of local, state and/or federal laws and regulations,
including all
applicable environmental laws and regulations as well as any liabilities, resulting from the practices of the prior
or subsequent owner/occupant/user whether or not such practices were or could be deemed a violation of such
laws and regulations; and (d) contamination of the Premises by Landlord or by its agents or employees during
the Term hereof. Landlord’s obligations under Section 23 of this Lease shall survive the expiration or earlier
termination of this Lease.
Landlord has had a standard Phase I environmental audit (“First Audit”) performed on the Premises.
Tenant has approved the nature and extent of the First Audit. Tenant has accepted the nature and extent of the
testing done by the consultant and any testing requested by Tenant over and above a standard Phase I audit shall
be paid for by Tenant.
Tenant hereby covenants and agrees to indemnify and hold harmless Landlord and its directors, officers,
employees, successors, legal representatives and assigns from and against all claims, damages, liabilities, losses,
judgments, settlements and costs (including, without limitation, reasonable attorney’s fees and disbursements) in
connection with Hazardous Materials arising out of, resulting from or in any way connected with or alleged or
claimed to arise out of, result from or be in any way connected with (a) the use or occupancy of the Premises by
the Tenant or any occupant/user of the Premises, or any portion thereof, during the Term of this Lease; and
(b) violations by Tenant or any occupant/user of the Premises during the Term of this Lease of local, state
and/or federal laws and regulations, including all applicable environmental laws and regulations as well as any
liabilities resulting from the practices of Tenant or any occupant/user of the Premises during the Term of this
Lease whether or not such practices were or could be deemed a violation of such laws and regulations. The
indemnification provided by Tenant in the preceding sentence shall not be applicable if it can be demonstrated
that the Hazardous Materials found on the Premises were present on the Premises prior to the Commencement
Date, nor shall it be applicable in the event that the source of any contamination is from adjacent properties or
otherwise as a result of the actions of the Landlord, its agent or employees.
Landlord understands that Tenant is relying solely on the Landlord’s warranties and representations made
hereunder and the results of the First Audit, regarding the existence of any Hazardous Materials on or about the
Premises.
Tenant, at any time and from time to time during the Term of the Lease, shall have the right to conduct
inspections, tests, surveys and other studies for the purpose of identifying the existence in, on or about the
Premises of Hazardous Materials. It is understood, however, that Tenant shall have no obligation to make such
inspection, tests, surveys and studies and the fact that Tenant does not make them shall in no way reduce the
Tenant’s rights nor the Landlord’s obligations under this Lease.
All exceptions to the foregoing representations and warranties are listed below: None, except any matters
revealed by the First Audit.
23.
SUCCESSORS AND ASSIGNS.
The terms hereof shall be binding upon and inure to the benefit of
the respective successors and permitted assigns of Landlord and Tenant. The reference contained to successors
and assigns is not intended to constitute a general consent to assignment by Tenant, but as reference only to
those instances in which Landlord may later give written consent to a particular assignment as required
hereunder.
24.
USE; COMPLIANCE WITH LAWS.
a.
Tenant shall use the Premises only for the provision of logistics and distribution services, including but
not be limited to (i) receipt, storage, shipment, subassembly, kitting, light manufacturing and storage
and processing of industrial and/or automotive products,
including diesel engines and component parts, (ii) the receipt, storage, movement and shipping of truck
trailers and sea vans containing industrial and/or automotive products, including diesel engines and
component parts, (iii) the storage and processing of hazardous materials in connection with (i) and
(ii) above, and (iv) all lawful purposes in furtherance of (i) through (iii) above (collectively, the
“Permitted Use”). Any change in the Permitted Use may be made only with the consent of Landlord,
which consent shall not be unreasonably withheld, delayed or conditioned. Tenant shall comply in all
material respects with all laws and regulations applicable to its use of the Premises.
b.
Landlord hereby warrants and represents that on or before the Commencement Date, Landlord shall
cause the Premises to be in compliance with all applicable laws, regulations and ordinances, or codes in
effect on the Commencement Date, including without limitation, the Americans with Disabilities Act
and other Federal laws, and Landlord shall be fully responsible for causing the Premises to be in
compliance with all applicable laws, regulations, codes and ordinances applicable during the Term,
except to the extent such laws, regulations, codes or ordinances apply to the Premises solely due to
Tenant’s unique use of the Premises for the purposes described in this Section 24.
25.
RENEWAL OPTIONS.
Provided that Tenant is not in default in any of the terms of this Lease,
Tenant may extend the Term of this Lease and the provisions hereof for two (2) two (2) year renewal terms
(each a “Renewal Term”). Tenant may exercise the renewal options hereunder by notifying Landlord in writing
at least six (6) months prior to the expiration of the then current Term. The Renewal Terms shall be on the same
terms and conditions as herein, except that Base Rent shall be at ninety-five percent (95%) of the fair market
rental rate.
The fair market rental rate, with respect to a Renewal Term, shall be determined as follows. Within thirty
(30) days after Tenant’s exercise of its option to extend, Landlord will propose to Tenant the fair market rental
rate. Within thirty (30) days thereafter, Tenant will either accept such determination (with no response on
Tenant’s part during such period being deemed disagreement) or, if Tenant disagrees with such determination,
Tenant will provide, in writing to Landlord, Tenant’s determination of the fair market rental rate. If, within
thirty (30) days thereafter, the parties are not able to agree on the fair market rental rate, within twenty (20) days
after such failure to agree, Landlord and Tenant shall together appoint a real property MAI appraiser to
determine the fair market rental rate. If Landlord and Tenant are not able to agree upon the designation of the
appraiser, then the appraiser will be appointed by the American Arbitration Association (or its successor) from
its qualified panel of arbitrators. Within forty-five (45) days after his appointment, the appraiser will determine
the fair market rental value of the Premises applicable to the Renewal Term and shall choose whichever of the
fair market rental values set forth in Landlord’s initial proposal or Tenant’s response is closer to such
determination, which shall, for all purposes hereunder, be deemed the fair market rental rate. The determination
of the appraiser shall be binding, final and conclusive on the parties. The fees and expenses of the appraiser and
all costs incurred in connection with the appointment of the appraiser will be shared equally by Landlord and
Tenant.
26.
SIGNAGE.
Landlord shall install for Tenant one (1) sign on the Building (the “Building Sign”).
Landlord and Tenant shall approve the sign specifications for the Building Sign, which approval shall not be
unreasonably withheld or delayed. No sign, advertisement or notice referring to Tenant shall be inscribed,
painted, affixed or otherwise displayed on any part of the exterior of the Building (including Tenant’s windows
and doors) that violates any applicable law or applicable restriction, including but not limited to the park’s sign
criteria and the covenants, conditions and restrictions for the park. In addition to the Building Sign, Tenant shall
have the right to install at its own expense any sign at the Building, provided that such sign and its size and
location (i) otherwise comply with the terms of this Section 26 and (ii) have been approved by Landlord, such
approval to not be unreasonably delayed or withheld. If
any exterior sign, advertisement or notice that does not conform to the requirements set forth in this Section 26
is exhibited or installed by Tenant, Landlord shall have the right to remove the same at Tenant’s expense. All of
the Tenant’s signs shall be: (i) installed after the Tenant has obtained, at Tenant’s sole cost and expense, all
permits, approvals and licenses required thereof and delivered copies thereof to Landlord, and (ii) at Tenant’s
sole cost and expense, installed, maintained, repaired and replaced in a first-class manner. Landlord reserves the
right to affix, install and display signs, advertisements and notices on any part of the exterior of the Building to
sell the Building at any time during the Term (or lease during the last one hundred twenty (120) days of the
Term) so long as they are first-class and reasonable in quantity and size; any other type of sign proposed by
Landlord shall require Tenant’s prior consent, which shall not be unreasonably withheld.
27.
NO OTHER BROKERS.
Tenant and Landlord represent and warrant that each has not dealt with
any real estate broker, finder or other person, with respect to this Lease in any manner, except Colliers Keenan
whose address is 201 E. McBee Avenue, Suite 201 Greenville, SC 29601. Landlord shall pay only any
commissions or fees that are payable to the above-named broker or finder with respect to this Lease pursuant to
Landlord’s separate agreement with such broker or finder. Both parties shall indemnify and hold the other
harmless from any and all damages resulting from claims that may be asserted by any other broker, finder or
other person (including, without limitation, any substitute or replacement broker claiming to have been engaged
by the other party in the future), claiming to have dealt with the other party in connection with this Lease or any
amendment or extension hereto, or which may result from Tenant leasing other or enlarged space from
Landlord.
28.
LEGAL EXPENSES.
If Tenant or Landlord shall be in breach or default under this Lease, such
party (the “Defaulting Party”) shall reimburse the other party (the “Nondefaulting Party”) upon demand for any
costs or expenses that the Nondefaulting Party incurs in connection with any breach or default of the Defaulting
Party under this Lease, whether or not suit is commenced or judgment entered, but only to the extent that such
costs are incurred after the occurrence of a Tenant Event of Default or Landlord Event of Default, as the case
may be (“Permitted Costs”). Permitted Costs shall include reasonable legal fees and costs incurred for the
negotiation of a settlement, enforcement of rights or otherwise, including the reasonably estimated cost of any
in-house counsel on an hourly basis and actual court costs, incurred by Tenant in connection therewith to
enforce the terms, covenants and conditions of this Lease to be observed or performed by Landlord, or to cure
any Landlord Event of Default.
29.
WAIVER OF LANDLORD’S LIEN.
Within thirty (30) days following any written request by
Tenant, Landlord shall execute and return to Tenant a written Waiver and Agreement substantially in the form
of that attached as Exhibit F to this Lease.
30.
LANDLORD IMPROVEMENTS.
On or before the Commencement Date, Landlord shall provide
at its sole cost Landlord’s Work listed on Exhibit C hereto; provided, however, that Landlord shall not be
obligated to spend in excess of Nine Hundred Eleven Thousand Three Hundred Fifty Dollars ($911,350.00) on
Landlord’s Work.
31.
TERMINATION OPTION.
Tenant shall have the one-time right to terminate the Lease in the 37th
month of the Term. Tenant shall have the option to give either six (6) months prior written notice or nine
(9) months prior written notice. If Tenant provides six (6) months prior written notice, the payment due from
Tenant for early termination shall be the unamortized tenant improvements costs and commission fees, each of
which shall have an interest rate charged upon such at eight and one-half percent (8.5%), from the date
advanced until the date repaid to Landlord, plus six (6) months of the then current rate of Base Rent. If Tenant
provides nine (9) months prior written notice, the payment due from Tenant for early termination shall be
unamortized tenant improvement costs, commission fees and a three
(3) months Base Rent payment. The payment for early termination, in either event, shall be due and payable by
Tenant on or before the effective date of such termination.
32.
QUIET ENJOYMENT; NO RELOCATION.
So long as no Event of Default has occurred and is
continuing, Tenant shall have and enjoy peacefully the possession of the Premises during the Term, subject to
the provisions of this Lease. Landlord shall have no lien rights to any of Tenant’s furniture, fixtures, equipment,
vehicles, receivables or the property of third parties in Tenant’s possession, and Landlord hereby waives all
rights of distraint. Landlord may not substitute other space for the Premises.
33.
PURCHASE OPTION.
If, at any time during the Term, Landlord offers the Building for sale,
Landlord will include Tenant in the offering and afford Tenant the opportunity to competitively bid for the
purchase of the Building on the same basis and on the same timing as other third party purchasers.
Caterpillar Inc.
(Tenant)
By: /s/ Bruce E. Schuver
Name: Bruce E. Schuver
Title: General Manager
Wells Fund XI-Fund XII-REIT Joint Venture
(Landlord)
a Georgia Joint Venture Partnership
By:
Wells Operating Partnership, LP, a Delaware
Limited Partnership, its Administrative Joint Venturer
By:
Wells Real Estate Investment Trust, Inc.
A Maryland Corporation, as general partner
By: /s/ Douglas P. Williams
Name: Douglas P. Williams
Title: Executive Vice President
