EXHIBIT 10.xx
AGREEMENT OF LEASE
THIS AGREEMENT OF LEASE (the "Lease") made this ____ day of
__________, 1990, by and between HYMAN MEYERS, S. SIDNEY MEYERS and AMY M.
KRUMBEIN, having an address c/o Hyman Meyers, Agent, 2235 Staples Mill Road,
Richmond, Virginia 23230, (collectively the "Landlord"), and HEILIG-MEYERS
FURNITURE COMPANY, a North Carolina corporation having an address at 2235
Staples Mill Road, Richmond, Virginia 23230 (the "Tenant'),
WHEREAS, Landlord is the owner of property with improvements
thereon consisting of 1.87 acres located on the southern line of Highway 264
Bypass (Greenville Road), Greenville (Pitt County), North Carolina, shown as Lot
3 on a Map for Record by Rivers and Associates, Inc. entitled "Three Lots at
Eastern Corner Intersection 264 Bypass and Red Banks Road, Greenville TWP, Pitt
County, North Carolina" dated March 12, 1985, a copy of which is attached hereto
and made a part hereof as Exhibit A (the "Property").
WHEREAS, Tenant desires to lease the Property and Landlord is
willing to rent Tenant the Property, upon the terms, conditions, covenants and
agreements set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants
herein contained the parties hereto agree as follows:
1. DEMISED PREMISES
Subject to all easements, restrictions, covenants, encumbrances and
conditions of record and upon the terms, covenants and conditions set forth
herein, Landlord hereby leases the Property to Tenant and Tenant hereby releases
the Property from Landlord.
2. TERM
2.1. Length. The Term shall commence on November 1, 1990 (the "Commencement
Date") and expire at midnight local time on October 31, 2008 (the "Expiration
Date").
2.2. Surrender. Tenant shall, at its expense, at the expiration of the Term or
any earlier termination of this Lease, (a) promptly surrender to Landlord
possession of the Property (including any fixtures or other improvements which,
under the provisions of Section 7, are owned by Landlord) in good order and
repair (ordinary wear and tear excepted) and broom clean, (b) remove therefrom
Tenant's signs, goods and effects and any machinery, trade fixtures and
equipment used in conducting Tenant's trade or business and not owned by
Landlord, and (c) repair any damage to the Property caused by such removal.
2.3. Holding Over. If Tenant continues to occupy the Property after the
expiration of the Term or any earlier termination of this Lease:
2.3.1. Such occupancy shall be deemed to be under a month-to-month tenancy,
which shall continue until either party hereto notifies the other in writing at
least thirty (30) days before the end of any calendar month that the notifying
party elects to terminate such tenancy at the end of such calendar month, in
which event such tenancy shall so terminate;
2.3.2. Anything contained in this Lease to the contrary notwithstanding, the
rent payable for each such monthly period shall equal one hundred and fifty
percent (150%) of the monthly installment of Base Rent (as hereinafter defined)
payable immediately prior to such expiration or earlier termination, together
with such Additional Rent (as hereinafter defined) as is otherwise required by
the terms of this Lease; and 2.3.3. Otherwise such month-to-month tenancy shall
be upon the same terms and subject to the same conditions as those set forth in
the provisions of this Lease except there will be no options to extend the term
of this Lease.
109
2.4. Option to Extend. Provided Tenant is not in default under the terms and
conditions of this Lease, Tenant shall have the right and option to extend the
Term of this Lease for three (3) successive periods of six (6) years each by
giving notice to Landlord as hereinafter provided at least six (6) months prior
to the expiration date of the Term (or any extended Term, as the case may be,)
that Tenant is exercising its right to extend the Term of the Lease. During the
extended Term or Terms, all terms and provisions of this Lease shall continue in
full force and effect except that no additional options to extend the Term shall
belong to Tenant. Notwithstanding the above, no option to extend the term of
this Lease may be exercised by Tenant unless prior to, or simultaneously with,
such exercise Tenant has exercised a similar six (6) year extension option for
the property contiguous to the Property, namely that certain parcel of property
consisting of 1.24 acres located on the southern line of Highway 264 Bypass
(Greenville Road) Greenville, (Pitt County), North Carolina, shown as Lot 2 on a
Map for Record by Rivers and Associates, Inc. entitled "Three Lots at Eastern
Corner Intersection 264 Bypass and Red Banks Road, Greenville TBW, Pitt County,
North Carolina" dated March 12, 1985 all in accordance with a lease of even date
herewith between Landlord and Tenant for such property.
3. RENT.
3.1. Amount. As rent for the Property (all of which is hereinafter referred to
collectively as "Rent"), Tenant hereby agrees and promises to pay to Landlord
all of the following:
3.1.1. Base Rent during the Term shall be EIGHTY-SIX THOUSAND TWO HUNDRED TWENTY
DOLLARS ($86,220.00) per annum, payable in advance in equal monthly installments
of SEVEN THOUSAND ONE HUNDRED EIGHTY-FIVE 00/100 DOLLARS ($7,185.00). The first
monthly installment of Base Rent shall be payable beginning November 1, 1990 and
the remaining installments shall be payable in advance on the first day of each
and every month thereafter during the Term hereof at the office of Landlord
herein designated (or at such other place as Landlord may designate in a notice
to Tenant). If the Term of this Lease begins on a date other than the first day
of a month, Base Rent from such other date to the first day of the following
month shall be prorated at the rate of one-thirtieth (1/30) of the monthly
installment of Base Rent for each day and shall be payable in advance. The base
rent shall, at all times, including extension terms of the Lease, be the minimum
amount of rent, not including any additional rent, to be paid to Landlord by
Tenant.
Base Rent during the option periods, if the same are exercised by Tenant shall
be increased as follows:
(a) After the third (3rd) year of the Term of this Lease and
after each successive three (3) year period of the Term of this Lease
thereafter, the Base Rent per annum for the following three (3) years of the
Term of this Lease will be an amount equal to the sum of (i) the Base Rent for
the last year of the immediately preceding three (3) year period and (ii) four
percent (4%) of (a) the Gross Sales at the Property for the latest fiscal year
of Tenant ending during the last year of said immediately preceding three (3)
year period minus (b) the Gross Sales at the Property during the fiscal year of
Tenant ending February 28, 1990. If (ii) in the immediately preceding sentence
is zero or less than zero, then the new Base Rent shall be the amount set forth
in (i) of the same sentence.
(b) For purposes of this calculation, "Gross Sales" shall be
defined as the dollar aggregate of: (i) the entire amount of the price charged
for all goods, wares and merchandise sold, leased, licensed or delivered, and
all charges for all services sold or performed by Tenant from all business
conducted at, upon or from the Property by Tenant, whether made for cash, by
check, on credit, charge accounts or otherwise, without reserve or deduction for
inability or failure to collect the same, including, but not limited to,
transactions (a) where the orders therefor originated at or are accepted by
Tenant in the Property, but delivery or performance thereof is made from or at
any other place; all sales made and orders received in or at the Property shall
be deemed as made and completed therein, even though the payment of account may
be transferred to another office for collection, and all orders which result
from solicitation off the Property but which are conducted by personnel
operating from or reporting to or under the control or supervision of any
employee of Tenant at the Property shall be deemed part of Gross Sales; (b)
pursuant to mail, telephone, telegraph or other similar orders received or
billed at or from the Property; (c) by means of mechanical or other vending
devices; (d) originating from whatever source, and which Tenant in the normal
and customary course of Tenant's operations would credit or attribute to
Tenant's business conduced in the Property; and (ii) all monies or other things
of value received by Tenant from Tenant's operations at, upon or from the
Property which are neither included in nor excluded from Gross Sales by other
provisions of this definition, but without any duplications, including, without
limitation, finance charges, cost of gift or merchandise certificates and all
deposits not refunded to customers.
110
(c) Each charge or sale upon installment or credit shall be
treated as a sale for the full price in the month during which such charge or
sale is made, irrespective of the time when Tenant shall receive payment
(whether full or partial) therefor. No deduction shall be allowed for
uncollectible credit accounts. Each lease or rental of merchandise shall be
treated as a sale in the month during which such lease or rental is made, for a
price equal to the total rent payable.
(d) For the purpose of ascertaining the amount of Gross Sales
hereunder, the following may be deducted from Gross Sales: (i) the exchange of
merchandise between stores of Tenant where such exchanges are made solely for
the convenient operation of Tenant's business and not for the purpose of
consummating a sale which has been made at, upon or from the Property; (ii)
returns to shippers or manufacturers; (iii) sales of fixtures after use thereof,
which are not part of Tenant's stock in trade and not sold in the regular course
of Tenant's business; (iv) cash or credit refunds made upon transactions
included within Gross Sales but not exceeding the selling price of the
merchandise returned by the purchaser and accepted by Tenant; or (v) the amount
of any city, county, state or federal sales, luxury or excise tax on such sales
provided such tax is both added to the selling price (or absorbed therein) and
paid to the taxiing authority by Tenant (but not by any vendor of Tenant);
however, no franchise or capital stock tax and no income or similar tax based
upon income, profits or Gross Sales as such, shall be deducted from Gross Sales
in any event whatsoever.
(e) For the purposes of this Paragraph the term "Tenant" shall
include any of Tenant's subtenants, concessionaires or licensees.
3.1.2. Additional rent (the "Additional Rent") in the amount of any payment
referred to as such in any provision of this Lease which accrues while this
Lease is in effect. Except as is otherwise set forth herein, any Additional Rent
shall be due and payable with the installment of Base Rent next falling due
after such Additional Rent accrues.
3.2. Payment. Except as otherwise specifically provided for herein, all Rent
shall be payable without demand therefor and without any setoff or deductions
whatsoever. Any payment made by Tenant to Landlord on account of Rent may be
credited by Landlord to the payment of any Rent then past due before being
credited to Rent currently falling due. Any such payment which is less than the
amount of Rent then due shall constitute a payment made on account thereof, the
parties hereto hereby agreeing that Landlord's acceptance of such payment shall
not alter or impair Landlord's rights hereunder to be paid all of such amount
then due, or in any other respect.
3.3. Late Penalties and Interest. Tenant hereby recognizes and acknowledges that
if payments of Rent are not received when due, Landlord will suffer damages and
additional expenses and Tenant therefore agrees to pay as Additional Rent a late
penalty equal to five (5%) of the Rent then due and payable under this Lease if
such Rent is not received by Landlord within seven (7) days after such amount is
due and payable. In addition, all Rent not paid within seven (7) days shall bear
interest at the rate of eighteen percent (18%) per annum.
3.4. Lease Year. As used in the provisions of this Lease, the term "Lease Year"
means (a) the period commencing on the Commencement Date and terminating on the
first (1st) anniversary of the Commencement Date, and (b) each successive period
of twelve (12) calendar months thereafter during the Term.
3.5. Taxes.
3.5.1. (i) As used herein, the term "Taxes" shall mean all real estate taxes,
assessments and other governmental levies and charges, general and special,
ordinary and extraordinary, unforeseen as well as foreseen, of any kind and
nature (including any interest on such assessments whenever the same are
permitted to be paid in installments) which may be imposed, levied, assessed or
confirmed by any lawful taxing authorities or which may become due and payable
out of or for, or which may become a lien or charge upon or against the whole,
or any part, of the Property, or any taxes in lieu thereof, which are measured
by the value of the Property, including any substitution in whole or in part
therefor due to a future change in the method of taxation, and also all
reasonable costs and fees (including attorney's fees and any fees of Lessor's
tax consultants) incurred by Lessor in contesting any such taxes, levies,
charges or assessments and/or in negotiating with the public authorities as to
the same. Nothing contained in this Lease, however, shall require Tenant to pay
any share of any estate, inheritance, succession, gift, capital levy, excess
profits, revenue, corporation, franchise, occupancy, gross receipts, income,
payroll or stamp tax imposed upon Landlord or any tax upon the sale, transfer
and/or assignment of the title or estate of Landlord, nor shall any of the same
be deemed Real Estate Taxes. If by law any general assessment or like charge may
be paid in installments, such assessment shall be so paid, and Tenant shall only
be liable for Tenant's Pro Rata Share of the portion thereof that is payable
within the then-current term of this Lease.
111
3.5.1. (ii) If Landlord shall fail or refuse, upon the request of Tenant, to
take any necessary steps to contest the validity or amount of the assessed
valuation or of the Taxes for any real estate fiscal tax year, Tenant may
undertake, by appropriate proceedings in the name of Landlord or Tenant, to
contest the same. Within a reasonable time after demand therefor, Landlord shall
execute, acknowledge and deliver any documents reasonably required to enable
Tenant to prosecute any such proceeding all of which shall be at no expense to
Landlord. Landlord shall inform Tenant, in time to permit Tenant to undertake
such contest, of all pertinent data required to undertake such contest. The
rights of contest afforded Tenant according to this subsection 3.5.1 (ii) are
subject to Tenant providing Landlord with adequate security for the payment of
any and all Taxes that are involved while any such contest by Tenant is ongoing
which security must be acceptable to Landlord in the reasonable exercise of its
discretion and in all events such security must be acceptable to all mortgagees
of Landlord.
3.5.1. (iii) If Landlord or Tenant shall obtain a remission or a refund of all
or any part of the Taxes for any real estate fiscal tax year, Landlord shall
promptly refund to Tenant (or credit Tenant with) Tenant's Pro Rata Share of
such remission or refund.
3.5.2. As used herein, the term "fiscal tax year" shall mean the twelve (12)
month period used by the county and/or city having jurisdiction over the
Property or any other lawful taxing authority, from time to time to assess Taxes
on the Property, or any part thereof.
3.5.3. Tenant shall pay as Additional Rent the amount of the Taxes for every
fiscal tax year or part thereof falling within the Term. Landlord agrees to
promptly furnish to Tenant all bills received by Landlord for Taxes and Tenant
shall pay the same before such payments are due and shall promptly thereafter
deliver to Landlord receipts evidencing full payment.
3.5.4. If only part of any fiscal tax year falls within the Term, the amount
computed as Additional Rent for such fiscal tax year under the foregoing
provisions of this subsection shall be prorated in proportion to the portion of
such fiscal tax year falling within the Term. The expiration of the Term before
the end of a fiscal tax year shall not impair Tenant's obligation hereunder to
pay such prorated portion of such Additional Rent with respect to that portion
of such fiscal tax year falling within the Term.
3.5.5. Anything contained in the foregoing provisions of this subsection
regarding Taxes to the contrary notwithstanding, Landlord may, at its discretion
(but only if Landlord is required to escrow Taxes by its first mortgagee), (a)
make from time to time during the Term a reasonable estimate of the Additional
Rent which may become due under such provisions with respect to any fiscal tax
year, (b) require Tenant to pay to Landlord each calendar month during such year
one-twelfth (1/12) of such estimate, at the time and in the manner that Tenant
is required hereunder to pay the monthly installment of the Base Rent for such
month, and (c) increase or decrease from time to time during such fiscal year
the amount initially so estimated for Taxes, based upon the most recently
available actual assessment and tax rate. In such event, Landlord shall deliver
to Tenant within sixty (60) days after the end of such fiscal tax year, a
statement showing a determination of the Taxes for such fiscal tax year. Tenant
shall within thirty (30) days after delivery of Landlord's statement, pay to
Landlord the amount of any deficiency. If such statement shows that Tenant's
monthly aggregate payments pursuant to this Section exceeded the actual Taxes
for the preceding fiscal tax year, such overpayment shall be applied to the next
ensuing monthly installment(s) of Base Rent.
3.6. Tax on Lease. If federal, state or local law now or hereafter imposes any
tax, assessment, levy or other charge (other than any income, inheritance or
estate tax) directly or indirectly upon (a) Landlord with respect to this Lease
or the value thereof, (b) Tenant's use or occupancy of the Property, (c) the
Base Rent, Additional Rent or any other sum payable under this Lease, or (d)
this transaction, then Tenant shall pay the amount thereof as Additional Rent to
Landlord upon demand, unless Tenant is prohibited by law from doing so, in which
event Landlord may, at its election, terminate this Lease by giving written
notice thereof to Tenant.
3.7. Net Lease. It is the propose and intent of the parties hereto that the Rent
payable hereunder shall be absolutely net to Landlord, so that this Lease shall
yield, net to Landlord, the Base Rent and the Additional Rent described herein
in each Lease Year during the Term of this Lease. All costs, fees, interest,
charges, expenses, reimbursements and obligations of every kind and nature
whatsoever relating to the Property (excepting only any taxes, costs or other
obligations arising prior to the Commencement Date of this Lease), which may
arise or become due during the Term, shall be paid and discharged by Tenant as
Additional Rent. Landlord shall be indemnified and saved harmless by Tenant from
and against all such costs, fees, interest, charges, expenses, reimbursements
and obligations relating to the Property or this Lease. However, Tenant shall be
under no obligation to pay interest or principal on any Mortgage (as hereinafter
defined) encumbering the Property or any income, franchise, gift, inheritance or
capital levy tax hereafter payable by or imposed upon Landlord.
112
4. SECURITY DEPOSIT
Landlord has not received a Security Deposit from Tenant and none is
due and owing.
5. USE OF PROPERTY
5.1. Use. Tenant shall occupy and use the Property for and only for parking for
a furniture sales facility and warehouse. The Property shall not be used for any
illegal purposes or in any manner to create any nuisance or trespass.
5.2. Compliance with Laws.
5.2.1. In its use of the Property, Tenant shall not violate the certificates of
occupancy issued therefor, any applicable law, ordinance or regulation or any
regulation of the National Board of Fire Underwriters. Tenant shall not create
or allow to exist on the Property any nuisance or trespass, nor do any act in or
about the Property or bring anything on or in the Property which will in any way
materially deface or injure the Property or any part thereof or overload the
floor of the building.
5.2.2. Tenant hereby agrees that Tenant, its employees, agents, contractors or
invitees shall not, at any time, cause or permit asbestos, asbestos related
products or any petroleum products or hazardous, toxic or dangerous wastes,
substances or material defined as such in (or for the purposes of) the
Comprehensive Environmental Response, Compensation and Liability Act, as amended
(any of the same being hereinafter defined as "Hazardous Material"), to be
brought installed or used in, about or from the Property. If Tenant breaches any
of the provisions of this subsection or if the presence of Hazardous Material is
found in the Property, the Tenant agrees to indemnify, defend and hold Landlord,
and/or any fee owner or ground or underlying landlords of the Property, harmless
from and against any and all claims, judgments, damages, penalties, fines,
costs, liability or losses in connection therewith, including, without
limitation, (i) diminution in value of the Property, (ii) damages for the loss
or restriction of use of the Property, (iii) damages arising from any adverse
impact on marketing of space, and (iv) sums paid in settlement of claims,
attorneys' fees, consulting fees and expert fees which arise during or after the
lease term as a result of the same. This indemnification of Landlord by Tenant
shall include, without limitation, all costs incurred in connection with any
investigation of conditions or any clean up, remedial, removal or restoration
work required by any court or by any federal, state or local governmental
authority because of Hazardous Material present in, on or under the Property.
Further, Tenant shall promptly and at its sole cost and expense, take all action
necessary to remove said Hazardous Material from the Property; provided,
however, that Landlord's approval of such actions shall first be obtained.
6. INSURANCE AND INDEMNIFICATION
6.1. Increase in Risk.
6.1.1. Tenant shall not do or permit to be done any act or thing as a result of
which either (a) any policy of insurance of any kind covering (i) any or all of
the Property or (ii) any liability of Landlord in connection therewith, may
become void or suspended, or (b) the insurance risk under any such policy would
(in the opinion of the insurer thereunder) be made greater unless Tenant shall
pay as Additional Rent the amount of any increase in any premium for such
insurance resulting from any such increased risk.
6.2. Insurance to be Maintained by Tenant.
6.2.1. Tenant shall maintain at its expense, throughout the Term, insurance
covering the building and other improvements now or hereafter existing upon the
Property against loss or damage by fire or such other risk now or hereafter
embraced by the term "extended coverage" and by vandalism and malicious
mischief, in an amount not less than the full insurable value as determined by
Tenant's insurer. As used in this subsection, the term "full insurable value"
shall mean the actual replacement cost, excluding foundation and excavation
costs, without deduction for physical depreciation as such replacement cost
shall be adjusted by Tenant's insurer every year due to changes in the cost of
construction and other relevant factors.
113
6.2.2. Tenant shall maintain at its expense, through the Term, insurance against
loss or liability in connection bodily injury, death, property damage or
destruction, occurring on or about the Property or arising out of the use
thereof by Tenant or its agents, employees, officers or invitees, visitors and
guests, under one or more policies of comprehensive public liability insurance,
including insurance against assumed or contractual liability under this Lease,
having such limits as to each as are reasonably required by Landlord from time
to time, but in any event of not less than Two Million Five Hundred Thousand
Dollars ($2,500,000.00) for bodily injury to or death of all persons and for
property damage or destruction in any one occurrence.
6.2.3. Each policy referenced above shall (a) name as the insureds thereunder
Landlord and Tenant (and, at Landlord's request, any mortgagee of Landlord
holding a note secured by a deed of trust or other security instrument
encumbering the Property), except that for the policies described in subsection
6.2.2 Landlord shall be named as an additional insured (b) by its terms, not be
cancellable without at least thirty (30) days prior written notice to Landlord
(and, at Landlord's request, any mortgagee), and (c) be issued by an insurer of
recognized responsibility licensed to issue such policy in the state where the
Property is located. At least five (5) days before the Commencement Date, Tenant
shall deliver to Landlord each such policy for each such policy, and at least
thirty (30) days before any such policy expires, Tenant shall deliver to
Landlord a replacement policy.
6.3. Indemnification. Except as otherwise provided for in this Lease.
6.3.1. Tenant will indemnify Landlord and save Landlord harmless from and
against any and all claims, actions, damages, liability and expenses in
connection with loss of life, personal injury and damage to property arising in,
at, upon, or involving the occupancy or use of any part of the Property by
Tenant, or occasioned wholly or in part by any act or omission of Tenant or its
agents, contractors, employees, servants, lessees, invitees or concessionaires.
In case Landlord shall, without fault on its part, be made party to any
litigation commenced by or against Tenant relating to the Tenant's
indemnification as set forth in the immediately preceding sentence of this
subsection 6.3.2, then Tenant shall protect and hold Landlord harmless and shall
pay all reasonable costs, expenses and attorney's fees incurred or paid by
Landlord in connection with such litigation.
6.4. Compliance with Authority. Tenant agrees, at its own expense, to promptly
comply with all requirements of any legally constituted public authority.
6.4.1. Waiver of Subrogation. To the extent that they are insured and reimbursed
by their respective insurance companies, Landlord and Tenant hereby waive any
and all rights of recovery against the other for or arising out of the damage to
or destruction of their property, whether or not such damage or destruction
shall have been caused by the negligence of the other, its agents, servants or
employees.
7. CONDITION OF IMPROVEMENTS
7.1. As Is. Tenant acknowledges and agrees to accept delivery and possession of
the Property on November 1, 1990 in the "AS IS" condition of the Property on the
date of this Agreement of Lease, it being understood that Landlord has no other
obligation to perform any work in connection with the preparation of the
Property for Tenant's occupancy, except to so deliver such possession to Tenant.
7.2. Landlord's Property. Any and all improvements, repairs, additions,
fixtures, alterations and all other property attached to, used in connection
with or otherwise installed within the Property by Landlord or Tenant shall,
immediately on the completion of its installation and without compensation or
payment to Tenant by Landlord, become Landlord's property, except that any
machinery, equipment, or trade fixtures installed by Tenant and used in the
conduct of Tenant's trade or business (rather than to service the Property
generally) shall remain Tenant's property.
114
8. MAINTENANCE AND SERVICES
8.1. Maintenance and Alteration by Tenant.
8.1.1. Tenant at its expense shall maintain (including all replacements when
necessary) the Property, including, without limitation, the roof, the foundation
and all other structural elements, all plumbing, heating, air conditioning,
ventilating, electrical and mechanical equipment, the parking areas and all
non-structural parts of the Property in good repair and condition, ordinary wear
and tear excepted. In addition, Tenant, at its expense, shall keep the Property
free of termites and other wood boring insects and shall keep the Property in a
clean and orderly condition, free of dirt, rubbish, snow, ice and unlawful
obstructions. If Tenant refuses or neglects to repair or maintain the Property
as required hereunder as soon as reasonably possible after written demand,
Landlord may make such repairs, without liability to Tenant for any loss or
damage that may accrue to Tenant's equipment, merchandise, trade fixtures, or
other property or to Tenant's business by reason thereof, and upon completion
thereof and presentation of the bill therefor, Tenant shall pay Landlord's cost
for making such repairs as Additional Rent payable with the next installment of
Base Rent due under this Lease. Such bill shall include interest at the rate of
eighteen percent (18%) per annum on such cost beginning on the fifth (5th) day
after presentation of the bill for such repairs is made by Landlord.
8.1.2. Tenant may make non-structural alterations or improvements to the
Property aggregating not more than Twenty-five Thousand Dollars ($25,000) in any
Lease Year without Landlord's consent thereto. Tenant shall not make any
non-structural alterations or improvements to the Property in excess of
Twenty-five Thousand Dollars ($25,000) in any Lease Year or any structural
alteration, addition or improvement to the Property without first obtaining
Landlord's consent thereto, which consent shall not be unreasonably withheld or
delayed, so long as the value of the Property is not materially decreased
thereby. If Landlord so consents to any such proposed alteration, addition or
improvements in excess of Twenty-five Thousand Dollars ($25,000), Landlord
covenants and agrees they will consider participating in the payment of costs
for same but will not be obligated to participate; if they agree to so
participate, it shall be on terms and conditions which in all events must be
satisfactory to Landlord. All such alterations, additions, and improvements will
be done in a good and workmanlike manner in keeping with all building codes and
regulations and will in no way materially harm the structure of the Property.
8.1.3. Tenant shall (a) within thirty (30) days after notice, bond or have
released any mechanic's, materialman's or other lien filed or claimed against
any or all of the Property by reason of labor or materials provided for Tenant
or any of its contractors or subcontractors, or otherwise arising out of
Tenant's use or occupancy of the Property, and (b)defend, indemnify and hold
harmless Landlord against and from any and all liability, claim of liability or
expense (including, by way of example rather than of limitation, that of
reasonable attorney's fees) incurred by Landlord on account of any such lien or
claim.
8.1.4. Landlord shall not be required to make any repairs or improvements to the
Property or to furnish any services under this Lease. Notwithstanding any
provision in this Lease to the contrary, Landlord shall not be responsible or
liable to Tenant for any injury or damage resulting to Tenant, or its property,
from bursting, stoppage, or leaking of water, gas, sewer, or steam pipes, or
from any structural defect in the roof, exterior walls or the like.
8.1.5. Tenant shall pay promptly when due all charges, costs and expenses for
gas, water, electricity, heat, cooling, sewage and all other utilities furnished
to or used in connection with the Property during the Term.
9. SIGNS
Tenant agrees that any sign, advertisement or notice that shall be
inscribed, painted or affixed on any part of the Property shall be in compliance
with all governmental laws, ordinances, rules and regulations, including,
without limitation, all zoning ordinances.
10. LANDLORD'S RIGHT OF ENTRY
Landlord and its agents shall be entitled to enter the Property at any
reasonable time (a) to inspect the Property, (b) to exhibit the Property to any
existing or prospective purchaser or mortgagee, or during the last six (6)
months of the term to any prospective Tenant, or (c) to make any alteration,
improvement or repair to the Property which Landlord is authorized to make
pursuant to this Agreement of Lease; provided, that Landlord shall (i) (unless
doing so is impractical or unreasonable because of emergency) give Tenant at
least twenty-four (24) hours prior notice of its intention to enter the
Property, and (ii) use reasonable efforts to avoid interfering more than is
reasonably necessary with Tenant's use and enjoyment thereof.
115
11. FIRE AND OTHER CASUALTIES
11.1. General. In the event that, at any time during the term of this Agreement
of Lease, the buildings and improvements portion of the Property (i) are
destroyed or (ii) are damaged to the extent of seventy-five percent (75%) or
more of their Gross Leaseable Area, then within sixty (60) days after such
damage or destruction, Tenant shall notify Landlord of its exercise of or its
desire not to exercise the hereby granted option to terminate this Agreement of
Lease not later than and effective on the end of such sixty (60) day period.
Failure to so exercise such option will obligate Tenant to repair and restore
the Property as hereinafter provided. In all other events, Tenant shall repair
and restore the Property as hereinafter provided.
11.2. Repair and Rebuilding. In the event that Tenant does not terminate this
Agreement of Lease as provided for in Section 11.1 above and in all other
events, then Tenant, at its own cost and expense, shall, subject to the other
provisions of this Section 11, cause the same to be repaired, replaced or
rebuilt as nearly as possible to its condition immediately prior to the damage
or destruction subject to such alterations or changes as Tenant may elect to
make in conformity with Section 8 hereof within a period of time which, under
all prevailing circumstances, shall be reasonable. If Tenant shall exercise its
option to terminate this Lease, this Lease shall expire automatically as
provided in subsection 11.1 in which event Tenant shall be under no obligation
to repair, replace or rebuild the buildings and improvements on the Property but
shall clear away the ruins and leave the Demised Premises in a clean, orderly
and sightly condition. In the event that (i) Tenant shall fail to give notice of
its exercise of its option to terminate within such period or (ii) if the
buildings and improvements on the Demised Premises shall not be damaged to the
extent of more than seventy-five percent (75%) of this Gross Leaseable Area,
then, Tenant shall, subject to the other provisions of this Section 11, cause
the same to be repaired, replaced or rebuilt at its own cost and expense as
herein provided. If Tenant does not repair, replace or rebuild any damaged or
destroyed buildings or improvements, all insurance proceeds that are payable as
a result of the destruction or damage to such buildings or improvements plus the
deductible (to be paid by Tenant), if any, shall be paid to Landlord and this
Agreement of Lease shall terminate on the date of such payment.
11.3. Insurance Trustee. Except as otherwise provided in this Lease, all
insurance policy proceeds provided for in subsection 6.2.1 shall be paid and
delivered to an Insurance Trustee designated by Landlord and shall be held and
used for the following purposes with the Insurance Trustee having the powers and
duties contained herein:
11.3.1. All proceeds received by the Insurance Trustee from any such insurance
policy shall first be used, by such Insurance Trustee as a fund (which fund
shall be deposited in a federally insured interest-bearing account, with any
interest accruing thereon becoming a part of the fund) for the restoration and
repair of any and all buildings, improvements and equipment located on the
Property which have become destroyed or damaged. Such proceeds in said trust
fund shall be used and applied by the Insurance Trustee in satisfaction and
discharge of the cost of the restoration of the destroyed or damaged buildings,
improvements and equipment.
11.3.2. Said funds shall be paid out by the Insurance Trustee from time to time
to persons furnishing labor or materials, or both, including architects' fees
and contractors' compensation in the construction work, on vouchers approved by
a licensed architect or engineer (the "Project Architect or Engineer") selected
by Tenant and approved by Landlord's first mortgagee, and if none, then by
Landlord, and employed by Tenant to superintend the work. The reasonable
expenses or charges of such architect or engineer shall be paid by such
Insurance Trustee out of the trust fund.
11.3.3. In the event that the amount of the insurance proceeds is insufficient
to pay the actual cost of repair or reconstruction, such deficiency will be
borne and provided for by Tenant by depositing the same with the Insurance
Trustee within twenty (20) days following the request by the Insurance Trustee
to Tenant requesting a sum equal to the amount of such deficiency. The initial
sum to be deposited with the Insurance Trustee according to this Section 11.3.3
shall be all insurance proceeds that are payable and are then actually available
as a result of the destruction or damage to such building. Additionally the
Insurance Trustee shall have the right to require Tenant from time to time to
deposit such additional amounts as the Insurance Trustee in consultations with
the Project Architect or Engineer shall deem necessary for such repair or
reconstruction. Any surplus of funds deposited according to this Section 11.3.3
shall be returned to Tenant after repair or reconstruction is completed.
116
11.3.4. All reasonable fees, costs and charges of the Insurance Trustee shall be
paid out of the insurance proceeds to the extent that there are such proceeds
over and beyond the amounts required for repair and restoration as aforesaid;
otherwise Landlord and Tenant agree that each will bear one-half (1/2) of the
fees, costs and charges of the Insurance Trustee.
11.3.5. In the event that the Insurance Trustee shall resign or for nay reason
be unwilling to act or continue to act, then Landlord shall substitute a new
trustee in the place and stead of the former pre-existing Insurance Trustee.
11.3.6. Should a dispute arise between Landlord and Tenant as to any provision
of this Section 11.3, such dispute shall be submitted to the Circuit Court of
the City of Richmond, Virginia for resolution, and the non-prevailing party
shall pay the reasonable attorney's fees and court costs of the prevailing
party.
11.3.7. Notwithstanding the above, Landlord and Tenant may mutually agree not to
use an Insurance Trustee but may mutually agree to use some other method to
effect the repair of such damage and destruction.
11.4. Abatement of Rent. During the term of this Lease, unless Tenant terminates
this lease according to the option described in Section 11.1 hereof, destruction
or damage in whole or in part to the buildings and improvements on the Demised
Premises shall, during the period when the same are being repaired and rebuilt,
serve to abate the base rent to be paid to Landlord by Tenant hereunder and the
payment of any other sums, monies, costs, charges or expenses required to be
paid by Tenant hereunder with such abatements to be calculated by multiplying
such amounts by a fraction, the numerator of which is the square footage of the
Demised Premises that is being repaired or rebuilt and the denominator of which
is the total square footage of the Demised Premises.
11.5. Termination During Last Year of Lease Term. If during the last year of the
Term the Property is totally destroyed by fire or other casualty, or
substantially damaged thereby to the extent that it is unfeasible for Tenant, in
Tenant's reasonable business judgment, to conduct its business on the Property,
Tenant shall have the option, upon written notice to Landlord within thirty (30)
days from the date of such casualty, to elect to terminate this Lease as of the
date of such casualty, and the insurance proceeds plus the deductible (to be
paid by Tenant to Landlord), if any, shall be paid to Landlord. If Tenant does
not exercise such option, this Lease shall continue, and Tenant shall promptly
upon receipt of the proceeds of insurance commence to restore and shall
diligently proceed to restore said Property to as nearly as possible the
condition and character it was in immediately prior to the damage or destruction
with such variations and alterations as may be permitted under this Lease, all
as hereinabove provided.
11.6. Tenant's Losses. In the event of any such damage or destruction to the
Property, Landlord shall not be liable to Tenant for loss of profits, expenses,
or any other type of injury or damage resulting from the repair of any such
damage to the Property or any part thereof, or for the termination of the Lease
as provided herein. Tenant assumes the risk of any and all damage to its
personal property in or on the Property from any casualty whatsoever.
12. CONDEMNATION.
12.1. Full Condemnation.
12.1.1. If all or substantially all of the Property or such portion of the
improvements located on the Property as to render the balance of such
improvements unsuitable in Landlord's reasonable judgment for the purposes of
Tenant is taken by the exercise of any power of eminent domain or is conveyed to
or at the direction of any governmental entity under a threat of any such
taking, Landlord shall be entitled to collect from such condemning authority the
entire amount of any award made in any such proceeding or as consideration for
such conveyance, without deduction therefrom for any leasehold or other estate
held by Tenant under this Lease, this lease shall terminate on the date that
possession of the Property is taken by such condemning authority and all Rent,
Taxes and other charges payable hereunder will be apportioned and paid to such
date.
12.1.2. Tenant hereby (a) assigns to Landlord all of Tenant's right, title and
interest, if any, in and to any such award (b) waives any right that it may
otherwise have in connection with such condemnation, against Landlord or such
condemning authority, to any payment for (i) the value of the then-unexpired
portion of the Term, (ii) leasehold damages, and (iii) any damage to or
diminution of the value of Tenant's leasehold interest hereunder or any portion
of the Property not covered by such Condemnation, and (c) agrees to execute any
and all further documents which may be required to facilitate Landlord's
collection of any and all such awards.
117
12.1.3. Subject in all events to the operation and effect of the foregoing
provisions of this Section, Tenant may seek a separate award on account of any
damages or costs incurred by Tenant as a result of such condemnation, so long as
such separate award in no way diminishes any award or payment which Landlord
would otherwise receive as a result of such Condemnation.
12.2. Partial Condemnation. If a (i) portion of the Property that is not
improved by buildings or structures as of the date of this Lease or (ii) a
portion of the improvements portion of the Property is so taken so that no
termination of this lease occurs according to subsection 12.1.1, then Landlord
is entitled to collect from such condemning authority the entire amount of any
award in any such proceeding or as consideration for any such conveyance, this
lease shall not terminate and Landlord shall, upon its receipt of such award in
condemnation, restore said building improvements to as complete a building as is
reasonably and practically possible in design, character and quality of the
conditions of the building immediately prior to the condemnation; provided
however, in any event, Landlord shall not be required to spend for any such
repair, restoration or alteration work an amount in excess of the amounts
received by Landlord as damage for the taking of such building improvements part
of the Property and Tenant, at its own cost and expense shall make all necessary
repairs and alterations to its trade fixtures, decoration, signs, machinery and
contents. During the term of this Lease, unless Tenant terminates this Lease
according to subsection 12.1.1, partial condemnation of the Property shall,
during the period when the same are being repaired, restored and altered, serve
to abate the base rent to be paid to Landlord by Tenant hereunder and the
payment of any other sums, monies, costs, charges or expenses required to be
paid by Tenant hereunder with such abatements to be calculated by multiplying
such amount by a fraction, the numerator of which is the square footage of the
Demised Property that is being repaired, restored and altered and the
denominator of which is the total square footage of the Demised Premises. Base
Rent payable after any such taking and after all such repairs and restoration
are effected by Landlord will thereafter be reduced in the same proportion as
the gross leaseable area of the improvements is reduced and not repaired and
restored as provided for above by or as a consequence of such condemnation.
12.3. Liability upon Condemnation. If there is a condemnation, Landlord shall
have no liability to Tenant on account of any (a) interruption of Tenant's
business upon the Property, (b) diminution in Tenant's ability to use the
Property, or (c) other injury or damage sustained by Tenant as a result of such
Condemnation.
12.4. Condemnation Proceedings. Except for any proceeding brought by Tenant
under the provisions of subsection 12.1.3, Landlord shall be entitled to conduct
any such condemnation proceeding and any settlement thereof free of interference
from Tenant, and Tenant hereby waives any right which it otherwise has to
participate therein.
13. ASSIGNMENT AND SUBLETTING
13.1. Landlord's Consent. Tenant hereby acknowledges that Landlord has entered
into this Lease because of Tenant's financial strength, goodwill, ability and
expertise and that, accordingly, this Lease is one which is personal to Tenant,
and Tenant agrees that it will not directly or indirectly (a) assign its rights
under this Lease, or (b) make or permit any total or partial sale, lease, use,
sublease, assignment, conveyance, license, mortgage, pledge, encumbrance or
other transfer of this Lease, any interest of Tenant in this Lease, any or all
of the Property or the occupancy or use thereof (each of which is hereinafter
referred to as a "Transfer"), without first obtaining Landlord's written consent
thereto (which consent shall not be unreasonably withheld by Landlord). Any such
consent shall not constitute a consent to any subsequent Transfer, whether by
the person hereinabove named as "Tenant" or by any such transferee). Landlord
shall be entitled to condition such consent upon the entry by such assignee into
an agreement with Landlord providing for such assignee's assumption of all of
Tenant's obligations hereunder. Any person to whom any Transfer is attempted
without such consent shall have no claim, right or remedy whatsoever hereunder
against Landlord, and Landlord shall have no duty to recognize any person
claiming under or through the same. No such action taken with or without such
Landlord's consent shall in any way relieve or release Tenant and all guarantors
of Tenant's performance under this Lease from liability for the timely
performance of all of Tenant's obligations hereunder. If Tenant fails to obtain
the written consent of Landlord as provided in this Section 13.1 and undertakes
any of the activities described therein, then in addition to the same
constituting an Event of Default hereunder any and all options to extend the
term of this lease as set forth in Section 2.4 of this Lease shall automatically
terminate and thereafter to be null and void and of no further force and effect.
For purposes of the foregoing provisions of this subsection, a transfer by any
person or persons controlling Tenant on the date hereof, of such control to a
person or persons not controlling Tenant on the date hereof shall be deemed a
Transfer of this Lease except that public trading on the New York or American
Stock Exchange or in the NSDAQ over-the-counter market shall not constitute such
a Transfer. Landlord shall be entitled to be paid by Tenant one-half of any
profit derived by Tenant from any Transfer.
118
14. SUBORDINATION; ATTORNMENT AND NON-DISTURBANCE
14.1. Subordination of Lease. This Lease shall be subject and subordinate to the
lien of any and all mortgages, deeds of trust, ground leases and/or other
similar instrument of encumbrance heretofore or hereafter covering the Property
or any part thereof (and each renewal, modification, consolidation, replacement,
increase or extension thereof) (each of which is hereinafter referred to as a
"Mortgage"), all automatically and without the necessity of any action by either
party hereof; provided that such underlying landlord or the holder of such a
Mortgage in writing (in recordable form) will agree that in the event of the
termination of the underlying lease or foreclosure of the Mortgage (i) this
Lease shall not be terminated thereby and (ii) Tenant's right of possession
hereunder shall not be disturbed so long as Tenant is not in default under this
Lease. Documentation required by any such Landlord, the holder of such a
Mortgage or Tenant under this Section 14.1 shall be in a form as may be
reasonably requested by such landlord or the holder of such a Mortgage and shall
be executed by all appropriate parties to the extent required to give effect to
the subordination and other provisions provided for herein. Landlord represents
that as of the date of this Agreement of Lease there are no mortgages or deeds
of trusts encumbering the Property.
14.2. Tenant's Execution of Documents. Subject to the provisions of Section 15.1
Tenant shall, promptly at the request of Landlord or the holder of any such
Mortgage, execute, seal, acknowledge and deliver such further instrument or
instruments,
14.2.1. Evidencing such subordination and non-disturbance as contemplated in
Section 15.1 as Landlord or the holder of such Mortgage deems reasonably
necessary or desirable, and (at the request of the holder of such a Mortgage)
attorning to such holder,
14.2.2. Provided that such holder agrees with Tenant that such holder will, in
the event of foreclosure of any such Mortgage (or termination of any such
underlying lease) take no action to interfere with Tenant's rights hereunder,
except on the occurrence of an Event of Default as defined in Section 15 hereof.
14.3. Lease Made Superior Upon Request. Anything in this Section 14 to the
contrary notwithstanding, in the event any such underlying landlord or any
Mortgagee requests that this Lease be made superior, rather than subordinate, to
any such Mortgage, then Tenant, within ten (10) days following Landlord's
written request therefor, agrees to execute and deliver, without charge, any and
all documents (in form acceptable to Landlord and such underlying landlords or
Mortgagees) effectuating such priority.
15. DEFAULT
15.1. Definition. As used in the provisions of this Lease each of the following
events shall constitute and is hereinafter referred to as an "Event of Default";
15.1.1. If Tenant fails (a) to pay any Rent or any other sum which it is
obligated to pay by any provision of this Lease, when and as due and payable
hereunder and without demand therefor, or (b) to perform any of its other
obligations under the provisions of this Lease; or
15.1.2. If Tenant (a) applies for or consents to the appointment of a receiver,
trustee or liquidator of Tenant or of all or a substantial part of its assets,
(b) files a voluntary petition in bankruptcy or admits in writing its inability
to pay its debts as they come due, (c) makes an assignment for the benefit of
its creditors, (d) files a petition or an answer seeking a reorganization or an
arrangement with creditors, or seeks to take advantage of any insolvency law,
(e) performs any other act of bankruptcy, or (f) files an answer admitting the
material allegation of a petition filed against Tenant in any bankruptcy,
reorganization or insolvency proceeding; or
15.1.3. If (a) an order, judgment or decree is entered by any court of competent
jurisdiction adjudicating Tenant as bankrupt or insolvent, approving a petition
seeking such reorganization, or appointing a receiver, trustee or liquidator of
Tenant or of all or a substantial part of its assets, or (b) there otherwise
commences as to Tenant or any of its assets any proceeding under any bankruptcy,
reorganization, arrangement, insolvency, readjustment, receivership, or similar
law, and if such order, judgment, decree or proceeding continues unstayed for
more than sixty (60) consecutive days after any stay thereof expires.
15.1.4. If Tenant (a) assigns its rights under this Lease or (b) makes or
permits any total or partial sale, lease, use, sublease, assignment, conveyance,
license, mortgage, pledge, encumbrance or other transfer of this Lease, any
interest of Tenant in this Lease, any and all of the Property or the occupancy
or use thereof without first obtaining Landlord's written permission.
119
15.1.5. If Tenant is deemed to have occasioned an Event of Default pursuant to
Paragraph 15.1 of the lease of even date herewith by and between Landlord and
Tenant for land more particularly described in Paragraph 2.4 as a 1.24 acre
parcel of land adjacent to the furniture storage and warehouse described in this
Lease, subject to the cure provisions contained therein, if any.
15.2. Notice to Tenant: Grace Period. Anything contained in the provisions of
this Section to the contrary notwithstanding, on the occurrence of an Event of
Default Landlord shall not exercise any right or remedy which it holds under any
provision of this Lease or applicable law unless and until
15.2.1. Landlord has given written notice thereof to Tenant, and
15.2.2. Tenant has failed within five (5) days after its receipt of such notice
to cure any Event of Default described in Section 15.1.1(a) above and thirty
(30) days after its receipt of such notice to cure any other Event of Default
described in Section 15.1.1(b) above; provided, that
15.2.3. No such notice shall be required, and Tenant shall be entitled to no
such grace period, (a) in any emergency situation in which Landlord acts to cure
an Event of Default or (b) in the case of any Event of Default enumerated in the
provisions of subsections 15.1.2, 15.1.3 or 15.1.4
15.3. Landlord's Rights on Event of Default. On the occurrence of any Event of
Default, Landlord may (subject to the operation and effect of the provisions of
Section 15.2)
15.3.1. Re-enter and repossess the Property and any and all improvements thereon
and additions thereto and remove all persons and property therefrom either by
summary dispossess proceedings or by a suitable action or proceeding at law or
in equity, or by force or otherwise, without being liable for any damage
therefor. No re-entry by Landlord shall be deemed an acceptance of a surrender
of this Lease;
15.3.2. Declare the entire balance of the Rent for the remainder of the Term to
be due and payable for which Tenant will immediately pay Landlord the present
value and worth of future rentals discounted to the date that would otherwise
have been the expiration of the Term at a rate equal to the prime rate announced
by Crestar Bank as its primate rate of lending on the date of such declaration
by Landlord; and, collect such amount in any manner not inconsistent with
applicable law;
15.3.3. Terminate this Lease;
15.3.4. Relet any or all of the Property for Tenant's account for any or all of
the remainder of the Term or for a period exceeding such remainder, in which
event Tenant shall pay to Landlord, at the times and in the manner specified by
the provisions of Section 3, the Base Rent and any Additional Rent accruing
during such remainder, as well as the cost to Landlord of any reasonable
attorney's fees or for any repairs or cost of reletting or other action
(including those taken in exercising Landlord's rights under any provision of
this Lease) taken by Landlord on account of such Event of Default but in no
event shall Landlord be liable in any respect for failure to relet the Property
or in the event of such reletting, for failure to collect the Rent thereunder it
being agreed by Tenant that Landlord has no duty to mitigate Tenant's damages
and any sums received by Landlord on a reletting in excess of the rent reserved
for this Lease shall belong to the Landlord.
15.3.5. Cure such Event of Default in any other reasonable manner (after giving
Tenant written notice of Landlord's intention to do so except in the case of
emergency), in which event Tenant shall reimburse Landlord for all reasonable
expenses incurred by Landlord in doing so, plus interest thereon at a lesser of
the rate of twelve percent (12%) per annum or the highest rate then permitted on
account thereof by applicable law, which expenses and interest shall be
Additional Rent and shall be payable by Tenant immediately on demand therefor by
Landlord; and/or
15.3.6. Pursue any combination of such remedies and/or any other remedy
available to Landlord on account of such Event of Default at law or in equity.
120
15.4. Landlord's Right to Perform Tenant's Covenants. If Tenant shall default in
the performance of any covenant or condition in this Lease required to be
performed by Tenant, Landlord may, after thirty (30) days' notice for
non-monetary defaults, or after five (5) days' notice in the event of a monetary
default or if, in Landlord's opinion, an emergency exists, perform such covenant
or condition for the account and at the expense of Tenant. If Landlord shall
incur any expense, including reasonable attorney's fees, in instituting,
prosecuting, or defending any action or proceeding instituted by reason of any
default of Tenant, Tenant shall reimburse Landlord for the amount of such
expense. In the event Tenant, pursuant to this Lease, becomes obligated to
reimburse or otherwise pay Landlord any sum of money in addition to the specific
Rent, the amount thereof shall be deemed Additional Rent and may, at the option
of Landlord, be added to any subsequent installment of the Rent due and payable
under this Lease, in which event, Landlord shall have the remedies for default
in the payment thereof provided by this Lease. The provisions of this Section
shall survive the termination of this Lease.
15.5. No Waiver. No action taken by Landlord under the provisions of this
Section shall operate as a waiver of any right which Landlord would otherwise
have against Tenant for the Rent hereby reserved or otherwise, and Tenant shall
remain responsible to Landlord for any loss and/or damage suffered by Landlord
by reason of any Event of Default.
16. ESTOPPEL CERTIFICATE
Tenant shall from time to time, within five (5) days after
being requested to do so by Landlord or any mortgagee, execute, seal,
acknowledge and deliver to Landlord (or, at Landlord's request, to any existing
or prospective purchaser, transferee, assignee or mortgagee of any or all of the
Property, any interest therein or Landlord's rights under this Lease) an
estoppel certificate in recordable form which shall include the status of this
Lease: (a) certifying (i) that his Lease is unmodified and in full force and
effect (or, if there had been any modification hereof, that it is in full force
and effect as so modified, stating therein the nature of such modification);
(ii) the amount of the Base Rent; (iii) as to the dates to which the Base Rent
and any Additional Rent and other charges arising hereunder have been paid; (iv)
as to the amount of any security deposit or prepaid Rent or any credit due to
Tenant hereunder; (v) that Tenant has accepted possession of the Property, and
the date on which the Term commenced; (vi) as to whether, to the best knowledge,
information and belief of the signer of such certificate, Landlord or Tenant is
then in default in performing any of its obligations hereunder (and, if so,
specifying the nature of each such default); and (vii) as to any other factor
condition requested by Landlord or such other addressee; and (b) acknowledging
and agreeing that any statement contained in such certificate may be relied upon
by Landlord and any other addressee.
17. QUITE ENJOYMENT
So long as Tenant is in compliance with the terms of this
Lease, Tenant shall lawfully, peaceably and quietly have, hold, occupy and enjoy
the Demised Premises during the term of this Lease without hindrance or ejection
by Landlord.
18. NOTICES
Any notice, demand, consent, approval, request or other
communication or document to be provided hereunder to a party hereto shall be
(a) given in writing, and (b) deemed to have been given (i) upon placement as
certified or registered mail in the United States mails, postage prepaid, return
receipt requested, or sent by Federal Express (or other express delivery
services which promise delivery the following business day) to the address of
such party set forth hereinabove or to such other address in the United States
of America as such party may designate from time to time by notice to the other
or (ii) (if such party's receipt thereof is acknowledged in writing) upon its
hand or other delivery to such party, but if directed to Tenant, to the
attention of its Corporate Secretary.
19. GENERAL
19.1. Effectiveness. This lease shall become effective upon and only upon its
execution and delivery by each party hereto.
19.2. Entire Agreement. This Lease represents the complete understanding between
the parties hereto as to the subject matter hereof, and supersedes all prior
written or oral negotiations, representations, warranties, statements or
agreements between the parties hereto as to the same.
19.3. Amendment. This Lease may be amended by and only by a written instrument
executed and delivered by each party hereto.
121
19.4. Applicable Law. This Lease shall given effect and construed by application
of the laws of the Commonwealth of Virginia, and any action or proceeding
arising hereunder shall be brought in the courts of said state; provided, that
if such action or proceeding arises under the Constitution, laws or treaties of
the United States of America, or there is a diversity of citizenship between the
parties thereto, so that it is to be brought in a United States District Court,
it shall be brought in the United States District Court for the Eastern District
of Virginia.
19.5. Waiver. Landlord shall not be deemed to have waived the exercise of any
right which it holds hereunder unless such waiver is made expressly and in
writing (and o delay or omissions by Landlord in exercising any such right shall
be deemed to be a waiver of its future exercise). No such waiver as to any
instance involving the exercise of any such right shall be deemed a waiver as to
any other such instance, or any other such right.
19.6. Time of Essence. Except as provided in Section 19.20 hereof, time shall be
of the essence of this Lease.
19.7. Headings. The headings of the Sections, subsections, paragraphs and
subparagraphs hereof are provided herein for and only for convenience of
reference, and shall not be considered in construing their contents.
19.8. Construction. As used herein,
19.8.1. The term "person" means a natural person, a trustee, a corporation, a
partnership and any other form of legal entity; and
19.8.2. All references made (a) in the neuter, masculine or feminine gender
shall be deemed to have been made in all such genders, (b) in the singular or
plural number shall be deemed to have been made, respectively, in the plural or
singular number as well, and (c) to any Section, subsection, paragraph or
subparagraph shall, unless therein expressly indicated to the contrary, be
deemed to have been made to such Section, subsection, paragraph or subparagraph
of this Lease.
19.9. Exhibits. Each writing or plat referred to herein as being attached hereto
as an exhibit or otherwise designated herein as an exhibit hereto is hereby made
a part hereof.
19.10. Severability. No determination by any court, governmental body or
otherwise that any provision of this Lease or any amendment hereof is invalid or
unenforceable in any instance shall affect the validity or enforceability of (a)
any other such provision, or by such provision in any circumstance not
controlled by such determination. Each such provision shall be valid and
enforceable to the fullest extent allowed by, and shall be construed wherever
possible as being consistent with, applicable law.
19.11. Definition of "Landlord".
19.11.1. As used herein, the term "Landlord" means the person hereinabove named
as such, and its heirs, personal representatives, successors and assigns (each
of whom shall have the same rights, remedies, powers, authorities and privileges
as it would have had, had it originally signed this Lease as Landlord).
19.11.2. No person holding Landlord's interest hereunder (whether or not such
person is named as "Landlord" herein) shall have any liability hereunder after
such person ceases to hold such interest, except for any such liability accruing
while such person holds such interest.
19.11.3. Anything contained in this Lease to the contrary notwithstanding Tenant
agrees that it shall look solely to the estate and property of Landlord in the
Property for the collection of any judgment (or other judicial process)
requiring the payment of money by Landlord in the event of any default or breach
by Landlord with respect to any of the terms and provisions of this Lease to be
observed and/or performed by Landlord, subject, however, to the prior rights of
the holder of any Mortgage covering the Property, and no other assets of
Landlord shall be subject to levy, execution or other judicial process for the
satisfaction of Tenant's claim. This provision shall not be deemed, construed or
interpreted to be or constitute an agreement, express or implied, between
Landlord and Tenant that Landlord's interest hereunder and in the Property, or
any part thereof, shall be subject to impressment of an equitable lien.
122
19.11.4. In the event of the sale, assignment or transfer by Landlord of the
Property (other than a collateral assignment to secure a debt of Landlord) to a
successor in interest who expressly assumes the obligations of Landlord under
this Lease, Landlord shall thereupon be released or discharged from all of its
covenants and obligations under this Lease, except such obligations as shall
have accrued prior to any such sale, assignment or transfer; and Tenant agrees
to look solely to such successor in interest of Landlord for performance of such
obligations. Any securities given by Tenant to Landlord to secure the
performance of Tenant's obligations under this Lease may be assigned by Landlord
to such successor in interest of Landlord; and, upon acknowledgment by such
successor of receipt of such security and its express assumption of its
obligation to account to Tenant for such security in accordance with the terms
of this Lease, Landlord shall thereby be discharged of any further obligation
relating thereto. Landlord's assignment of the Lease or of any or all of its
rights herein shall in no manner affect Tenant's obligations hereunder. Tenant
shall thereafter attorn and look to such assignee as Landlord, provided Tenant
has first received written notice of such assignment of Landlord's interest.
19.12. Definition of "Tenant". As used herein, the term "Tenant" means each
person hereinabove named as such and such person's heirs, personal
representatives, successors and assigns, each of whom shall have the same
obligations, liabilities, rights and privileges as it would have possessed had
it originally executed this Lease as Tenant; provided, that no such right or
privilege shall inure to the benefit of any assignee of Tenant or other party
referenced in Section 13 hereof, immediate or remote, unless the assignment to
such assignee or transferee is made in accordance with the provisions of Section
13. Whenever two or more persons constitute Tenant, all such persons hall be
jointly and severally liable for performing Tenant's obligations hereunder.
19.13. Memorandum of Lease. Tenant will at any time, at the request of Landlord,
promptly execute duplicate originals of an instrument, in recordable form, which
will constitute a memorandum of lease, setting forth a description of the
Property, the term of this Lease, the addresses for the parties, all other
provisions or information required by applicable law, and, excepting the rental
provisions, any other information as Landlord may reasonably request. This Lease
or memorandum of this Lease may be recorded, at Landlord's or Tenant's option,
and the party so recording agrees to pay all recordation costs and taxes levied
thereon.
19.14. Attorneys' Fees. If any Rent or other debt owning by Tenant to Landlord
under this Lease is attempted to be collected by or through an attorney at law,
the losing party in any dispute regarding such Rent or debt agrees to pay the
reasonable attorneys' fees of the prevailing party in connection therewith.
19.15. Rights Cumulative. All rights, powers and privileges conferred hereunder
upon parties hereto shall be cumulative but not restricted to those given by
law.
19.16. Brokers' Commission. Each party represents and warrants to the other that
there are no claims for brokerage commissions or finder's fees in connection
with the execution of this Lease, and each party agrees to indemnify the other
against, and hold it harmless from, all liabilities arising from any such claim
(including, without limitation, the cost of counsel fees) in connection with or
relating to brokers or finders.
19.17. Corporate Tenant. If Tenant is or will be a corporation, the persons
executing this Lease on behalf of Tenant hereby covenant, represent and warrant
that Tenant is a duly incorporated or a duly qualified (if a foreign
corporation) corporation and authorized to do business in the state in which the
Property is located; and that the person or persons executing this Lease on
behalf of Tenant is an officer or are officers of such Tenant, and the he or
they as such officers were duly authorized to sign and execute this Lease. Upon
request of Landlord to Tenant, Tenant shall deliver to Landlord documentation
satisfactory to Landlord evidencing Tenant's compliance with the provisions of
this Section 19.17.
19.18. Dower and Curtesy. Florence T. Meyers, Anne H. Meyers and Nathaniel
Krumbein join in this Lease for the sole purpose of subordinating their
respective dower and curtesy interest in the Property to the terms and
conditions of this Agreement of Lease.
19.19. Waiver of Jury Trial. Landlord and Tenant each waive trial by jury of any
or all issues arising in any action or proceeding between the parties hereto or
their successors in connection with its Lease or any of its provisions.
123
19.20. Force Majeur. Anything contained in this Lease to the contrary
notwithstanding, Landlord shall not be deemed in default with respect to the
performance of any of the terms, covenants and conditions of this Lease
incumbent on it to perform or be liable to the Tenant in damages if same shall
be due to any strike, lockout, civil commotion, labor controversy, war-like
operation, invasion, rebellion, hostilities, military or usurped power,
sabotage, governmental regulation or control, inability to obtain any material,
service, fuel, supply or financing, accidents, bombing threat, violence, threat
of violence, breach of peace, Act of God or other cause beyond the control of
Landlord.
IN WITNESS WHEREOF, each party hereto has executed this Lease or caused
it to be executed on its behalf by its duly authorized representatives, as of
the day and year first above written.
LANDLORD:
/s/ Hyman Meyers
-------------------------------
HYMAN MEYERS
/s/ S. Sidney Meyers
-------------------------------
S. SIDNEY MEYERS
/s/ Amy M. Krumbein
-------------------------------
AMY M. KRUMBEIN
124
TENANT:
HEILIG-MEYERS FURNITURE COMPANY,
a North Carolina corporation
By: /s/ Troy A. Peery, Jr.
Name:
Title:
THIRD PARTY SIGNATORS:
/s/ Florence T. Meyers
------------------------------
FLORENCE T. MEYERS
/s/ Anne H. Meyers
------------------------------
ANNE H. MEYERS
/s/ Nathaniel Krumbein
------------------------------
NATHANIEL KRUMBEIN
125
EXHIBIT A
TRACT ONE: Beginning at a concrete monument in the southeastern right-of-way
line of U.S. Highway No. 264, the same being located North 62-07 East 200.44
feet from a concrete monument, the corner of the David A. Evans and Lyndale
property, and runs thence with the highway right-of-way North 62-07 East 200.44
feet to the corner of the First Christian Church lot; runs thence with the line
of said Church lot South 31-45 East 400 feet to a stake in said line; runs
thence South 58-15 West 200 feet to a concrete monument, David A. Evans corner;
runs thence North 31-45 West 412.87 feet to a concrete monument in the highway
right-of-way, the point of BEGINNING, containing 1.86 acres, more or less,
reference being made to that certain map prepared by William H. Utley, R.L.S.,
entitled "Hyman Meyers et al", of record in Map Book 20, page 5, Pitt County
Registry, and being the same property leased by Heilig-Meyers Company from Hyman
Meyers, Agent according to the Lease dated November 1, 1970, and; TRACT TWO:
Tracts "B" and "C" as shown on the Site Plan prepared June 3, 1985 attached and
made a part of this lease as Exhibit "B".
126