Exhibit 10.1
LEASE OF CAFFEY WAREHOUSE
HIGHWAY 58 EAST, HENRY COUNTY, VIRGINIA
THIS LEASE made this 14th day of March, 1994, by and between FRED B.
CAFFEY, of Martinsville, Virginia, hereinafter referred to as "Lessor," and
HOOKER FURNITURE CORPORATION, of Martinsville, Virginia, hereinafter referred to
as "Lessee."
RECITALS
1. Lessor is the sole owner of the premises hereinafter described and
desires to lease the same Lessee for storage and/or its manufacturing business.
2. The parties hereto desire to set forth the agreement between them
concerning the lease of said property.
3. It is the purpose of this agreement to set forth the terms and
conditions of this lease.
IN CONSIDERATION of the mutual covenants and promises contained herein, the
parties agree as follows:
ARTICLE ONE
SUBJECT AND PURPOSE
Lessor leases to Lessee the building known as Caffey Warehouse situated on
Highway #58 in Henry County, Virginia.
All that said warehouse containing 125,000 square feet, which is the entire
square footage of said warehouse, and the right of ingress and egress thereto.
It is understood and agreed that Lessee shall have the right to use the
parking lot situated on the premises, and Lessee has the responsibility of
maintaining the parking lot and grounds surrounding said building. In addition,
Lessee shall have use of all toilets situated in the warehouse and must maintain
the same in a clean and sanitary condition throughout the term hereof. Map of
said property attached. Described as Tract "B", 12,467 acres.
ARTICLE TWO
TERM, RENT AND OPTION TO PURCHASE
Lessor demises the above premises for a term of three years, commencing May
1, 1994, and terminating April 30, 1997, at a monthly
[MAP APPEARS HERE]
rental of $22,500.00 ($.18 per square foot), due and payable on the first of
each month. The total rental amount for this term will be $810,000.00. Should
any installment of rent not be paid by the 10th day of any month, Lessee shall
pay a late charge of 5% of the delinquent installment. All rental payments shall
be made to Lessor at 407 Starling Avenue, Martinsville, VA 24112.
Lessee has option to purchase said property for $2,050,000.00 if Lessor is
notified at least six months before expiration of said lease. If option is
exercised a $.02 per square foot per month will be credited ($90,000.00) toward
the purchase price of $2,050,000.00. The net purchase price will be
$1,960,000.00. It is agreed that Lessor has the option of making an IRS 1031
Starker Tax deferred exchange with Lessor bearing the expense of said exchange.
Closing will occur within thirty (30) days of expiration of lease with taxes and
rent being pro-rated. The Lessor shall convey the property by General Warranty
Deed with English Covenants of title.
ARTICLE THREE
ALTERATIONS, ADDITIONS AND IMPROVEMENTS
Lessee shall not alter, add ot, or make improvements upon the demised
premises without first obtaining the express written consent of Lessor. Further,
should Lessor grant his consent to any such alterations, additions, or
improvements placed on the premises by Lessee, it shall be at the sole expense
of Lessee.
ARTICLE FOUR
REPAIRS
Lessee covenants and agrees to make all necessary repairs to the premises
of all descriptions as needed, including, but not limited to, all docks and
overhead doors. Lessor agrees to the contract dated 4/4/94 with National Roof
Coaters of St. Albans, West Virginia, for $ 93,352.00 Any subsequent repairs to
the roof will be the responsibility of Lessee. Further, Lessee agrees at the
termination of this lease to return the demised premises to Lessor in the same
condition which they were at the commencement of this lease, less any reasonable
wear and tear. Lessee further agrees to maintain the premises in a good state of
cleanliness and good order. In addition, should
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Lessee during the term of this lease damage the premises for whatever reason,
then it shall be liable for such damages and shall make all necessary repairs to
restore the premises to their undamaged condition, with the full written
approval of Lessor as to such damage repairs. Lessee agrees to maintain and make
necessary repairs to the sprinkler system.
ARTICLE FIVE
UTILITIES
All applications and connections for necessary utility services used by
Lessee on the demised premises shall be made in the name of Lessee only, and
Lessee shall be solely liable for utility charges as they become due, including
those for sewer, water, gas, electricity and telephone services, if any.
ARTICLE SIX
TAXES
Lessor shall pay all real estate taxes levied against the demised property,
except Lessee shall be liable for any increase in real estate taxes as a result
of a higher assessment for improvements or alterations placed on the demised
premises by Lessee with Lessor's written permission. All other taxes and levies
for personal property and fixtures of whatever description shall be the sole
responsibility of Lessee.
ARTICLE SEVEN
INSURANCE
During the term of this lease, Lessor shall maintain at his sole expense
fire and extended coverage insurance covering the demised premises. Such
insurance shall only cover the improvements upon the demised premises, and such
other fire insurance to cover the tangible personal property, including
equipment and fixtures placed on the premises by Lessee, shall be carried by
Lessee at its sole expense. Further, Lessee shall maintain adequate insurance
coverage to protect the demised premises as a result of any damages caused by
its activities and its occupancy and use of the premises. In addition, should
Lessor be required to pay higher rates for fire and extended coverage insurance
covering the demised premises as a result of the activities or use and occupancy
of the premises by Lessee, then Lessee shall be liable to reimburse Lessor for
any such increase in insurance costs.
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Lessor and Lessee hereby mutually release and discharge each other from any
liabilities arising from leased premises.
Lessee shall at its sole expense maintain liability insurance coverage,
which shall be so drawn so as to provide insurance protection to Lessee as well
as Lessor as a result of injuries to third persons, including other tenants, or
property damages to such third persons and other tenants resulting from the
negligent acts of Lessee, its employees, agents or invitees.
ARTICLE EIGHT
UNLAWFUL OR DANGEROUS ACTIVITY
Lessee shall neither use nor occupy the demised premises or any part
thereof for any unlawful, disreputable, or ultra-hazardous business purpose nor
operate or conduct its business in a manner constituting a nuisance of any kind.
Lessee shall immediately, on discovery of any unlawful, disreputable, or
ultra-hazardous use, take action to halt such activity.
ARTICLE NINE
INDEMNITY
Lessee shall indemnify Lessor against all expenses, liabilities and claims
of every kind, including reasonable counsel fees, by or on behalf of any person
or entity, arising out of either (1) a failure by Lessee to perform any of the
terms or conditions of this lease, (2) any injury or damage happening on or
about the demised premises due solely to the negligence of the Lessee, (3)
failure to comply with any law of any governmental authority, or (4) any
mechanic's lien or security interest filed against the demised premises or
equipment, materials for alterations of buildings, or improvements thereon.
ARTICLE TEN
DEFAULT OR BREACH
Each of the following events shall constitute a default or breach of this
lease by Lessee:
1. If Lessee, or any successor or assignee of Lessee, while in possession,
shall file a petition in bankruptcy or insolvency or for reorganization under
any bankruptcy act, or shall voluntarily take advantage of any such act by
answer or otherwise, or shall make an assignment for the benefit of creditors.
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2. If involuntary proceedings under any bankruptcy law or insolvency act
shall be instituted against Lessee, or if a receiver or trustee shall be
appointed of all or substantially all of the property of Lessee, and such
proceedings shall not be dismissed or the receivership or trusteeship vacated
within thirty (30) days after the institution or appointment.
3. If Lessee shall fail to pay Lessor any rent or additional rent when the
rent shall become due and shall not make the payment within thirty (30) days
after notice thereof by Lessor to Lessee.
4. If Lessee shall fail to perform or comply with any of the conditions of
this lease and if the nonperformance shall continue for a period of thirty (30)
days after notice thereof by Lessor to Lessee or, if the performance cannot be
reasonably had within the 30-day period, Lessee shall not in good faith have
commenced performance within the 30-day period and shall not diligently proceed
to completion of performance.
5. If Lessee shall vacate or abandon the demised premises.
6. If this lease or the estate of Lessee hereunder shall be transferred to
or shall pass to or devolve on any other person or party, except in the manner
herein permitted.
ARTICLE ELEVEN
EFFECT OF DEFAULT
In the event of any default hereunder, as set forth in Article Ten, the
rights of Lessor shall be as follows:
1. Lessor shall have the right to cancel and terminate this lease, as well
as all of the right, title and interest of Lessee hereunder, by giving the
Lessee not less than ten (10) days' notice of the cancellation and termination.
On expiration of the time fixed in the notice, this lease and the right, title
and interest of Lessee hereunder shall terminate in the same manner and with the
same force and effect, except as to Lessee's liability, as if the date fixed in
the notice of cancellation and termination were the end of the term herein
originally determined.
2. Lessor may elect, but shall not be obligated, to make any payment
required of Lessee herein or comply with any agreement, term or condition
required hereby to be performed by Lessee, and Lessor shall
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have the right to enter the demised premises for the purpose of correcting or
remedying any such default and to remain until the default has been corrected or
remedied, but any expenditure for the correction by Lessor shall not be deemed
to waive or release the default of Lessee or the right of Lessor to take any
action as may be otherwise permissible hereunder in the case of any default.
3. Lessor may re-enter the premises immediately and remove the property and
personnel of Lessee, and store the property in a public warehouse or at a place
selected by Lessor, at the expense of Lessee. After re-entry, Lessor may
terminate the lease on giving ten (10) days' written notice of termination to
Lessee. With the notice, re-entry will not terminate the lease. On termination,
Lessor may recover from Lessee all damages approximately resulting from the
breach, including the cost of recovering the premises, and the worth of the
balance of this lease over the reasonable rental value of the premises for the
remainder of the lease term, which sum shall be immediately due Lessor from
Lessee. Notwithstanding the rights of Lessor hereunder relative to re-entry and
termination, he may elect not to re-enter and not to terminate this lease, but
to hold Lessee liable for the payment of the full rental for the remainder of
the term of this lease.
4. After re-entry, Lessor may relet the premises or any part thereof for
any term without terminating the lease, at the rent and on the terms as Lessor
may choose. Lessor may make alterations and repairs to the premises. The duties
and liabilities of the parties if the premises are relet as provided herein
shall be as follows:
(a) In addition to Lessee's liability to Lessor for breach of the
lease, Lessee shall be liable for all expenses of the reletting, for the
alterations and repairs made, and for the difference between the rent
received by Lessor under the new lease agreement and the rent installments
that are due for the same period under this lease.
(b) Lessor shall have the right, but shall not be required, to apply
the rent received from reletting the premises (1) to reduce the
indebtedness of Lessee to Lessor under the lease, not including
indebtedness for rent, (2) to expenses of the reletting and altera-
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tions and repairs made, (3) to rent due under this lease, or
(4) to payment of future rent under this lease as it becomes due.
If the new Lessee does not pay a rent installment promptly to Lessor, and
the rent installment has been credited in advance of payment to the indebtedness
of Lessee other than rent, or if rentals from the new Lessee have been otherwise
applied by Lessor as provided for herein and during any rent installment period
are less than the rent payable for the corresponding installment period under
this lease, Lessee shall pay Lessor the deficiency, separately for each rent
installment deficiency period, and before the end of that period. Lessor may at
any time after a reletting terminate the lease for the breach on which Lessor
had based the re-entry and subsequently relet the premises.
ARTICLE TWELVE
ACCESS TO PREMISES: SIGNS POSTED BY LESSOR
Lessee shall permit Lessor or his agents to enter the demised premises at
all reasonable hours to inspect the premises or make repairs that Lessee may
neglect or refuse to make in accordance with the provisions of this lease, and
also to show the premises to prospective purchasers or tenants. Lessee shall,
within two months prior to expiration of the term, permit the usual notice of
"For Rent" and "For Sale" to be placed on the demised premises and to remain
thereon without hindrance and molestation.
ARTICLE THIRTEEN
WAIVERS
The failure of Lessor to insist on a strict performance of any of the terms
and conditions hereof shall be deemed a waiver of the rights or remedies that
Lessor may have regarding that specific instance only, and shall not be deemed a
waiver of any subsequent breach or default in any terms and conditions.
ARTICLE FOURTEEN
ASSIGNMENT, MORTGAGE OR SUBLEASE
Neither Lessee nor its successors or assigns shall assign, mortgage, pledge
or encumber this lease or sublet the demised premises
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in whole or in part, or permit the premises to be used or occupied by others,
nor shall this lease be assigned or transferred by operation of law without the
prior consent in writing of Lessor in each instance. Such consent shall not be
unreasonably withheld by the Lessor. If this lease is assigned or transferred,
or if all or any part of the demised premises is sublet or occupied by anybody
other than Lessee, Lessor may, after default by Lessee, collect rent from the
assignee, transferee, subtenant, or occupant, and apply the net amount collected
to the rent reserved herein, but no such assignment, subletting, occupancy, or
collection shall be deemed a waiver of any agreement or condition hereof, or the
acceptance of the assignee, transferee, subtenant, or occupant as Lessee. Lessee
shall continue to be liable hereunder in accordance with the terms and
conditions of this lease and shall not be released from the performance of the
terms and conditions hereof. The consent by Lessor to an assignment, mortgage,
pledge, or transfer shall not be construed to relieve Lessee from obtaining the
express written consent of Lessor to any future transfer of interest.
ARTICLE FIFTEEN
SURRENDER OF POSSESSION
Lessee shall, on the last day of the term, or on earlier termination and
forfeiture of the lease, peaceably and quietly surrender and deliver the demised
premises to Lessor free of subtenancies, including all buildings, additions, and
improvements constructed or placed thereon by Lessee, except movable trade
fixtures, all in good condition and repair. Any trade fixtures or personal
property not used in connection with the operation of the demised premises and
belonging to Lessee, if not removed within thirty (30) days at the termination
or default, and if Lessor shall so elect, shall be deemed abandoned and become
the property of Lessor without any payment or effect therefor. Lessor may remove
such fixtures or property from the demised premises and store them at the risk
and expense of Lessee if Lessor shall not so elect. Lessee shall repair and
restore all damage to the demised premises caused by the removal of equipment,
trade fixtures, and personal property.
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ARTICLE SIXTEEN
CONDEMNATION
In the event of a taking by eminent domain in whole or in part of the
leased premises or the building of which they are a part (or a sale under threat
thereof) or the parking lot appurtenant thereto, resulting in the leased
premises becoming unsuitable for the use then being made of them by Lessee, then
this lease shall automatically cease and terminate on the date title passes to
the condemning authority. If there is a partial taking which does not result in
the leased premises being rendered unsuitable for the use then being made of
them by Lessee, then this lease shall continue, with a proportionate abatement
of rent for that portion of the leased premises, if any, so taken.
ARTICLE SEVENTEEN
TOTAL AGREEMENT: APPLICABLE TO SUCCESSORS
This lease contains the entire agreement between the parties and cannot be
changed or terminated except by a written instrument subsequently executed by
the parties hereto. This lease and the terms and conditions hereto apply to and
are binding upon the heirs, legal representatives, successors, and assigns of
both parties.
ARTICLE EIGHTEEN
APPLICABLE LAW
THIS AGREEMENT shall be governed by and construed in accordance with the
laws of the Commonwealth of Virginia.
ARTICLE NINETEEN
NOTICES
All notices permitted or required to be given hereunder shall be given in
writing and sent by registered or certified mail, return receipt requested; if
to Lessor, to 407 Starling Avenue, Martinsville, VA 24112, and if to Lessee, to
P.O. Box 4708 Martinsville, VA 24115.
IN WITNESS WHEREOF, Lessor has hereunto set his hand and seal, and Lessee
has caused its corporate name to be signed by E. Larry Ryder,
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its Vice President, the day and year first above written.
(SEAL) /s/ Fred B. Caffey
---------------------------------
Fred B. Caffey
Lessor
CORPORATION - Lessee HOOKER FURNITURE
(SEAL)
By /s/ E. Larry Ryder
-------------------------------
E. Larry Ryder
Senior Vice President
Finance and Administration
STATE OF VIRGINIA,
COUNTY/CITY OF MARTINSVILLE, TO WIT
The foregoing instrument was acknowledged before me this 17th day of March,
1994, by Fred B. Caffey as Lessor herein.
My Commission expires: March 31, 1995
/s/ Rebecca V. Hartis
---------------------------------
Notary Public
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STATE OF VIRGINIA,
COUNTY/CITY OF MARTINSVILLE, TO-WIT:
The foregoing instrument was acknowledged before me this 12th day of April,
1994, by E. Larry Ryder, Vice President of Hooker Furniture Corporation, on
behalf of that corporation as Lessee herein.
My Commission expires: 4/30/95
/s/ JoAnne D. Gravely
---------------------------------
Notary Public
Addendum to lease of Caffey Warehouse Highway 58 East Henry county, Virginia
dated March 14, 1994 by and between Fred B. Caffey (Lessor) and Hooker Furniture
Corporation (Lessee) all of Martinsville, Virginia. This addendum only changes
Article Two titled Term, Rent, and Option to Purchase. The remainder of said
lease will remain in effect.
The above lease will be extended from May 1, 1997 to April 30, 1999 at 17(cents)
per Square foot per month ($21,250.) Lessee has an option for an additional two
years or purchase with 6 months notice required in either case before expiration
of this addendum. If lease is renewed for an additional 2 years annualized cost
of living adjustment (COLA) will be added to rent.
LESSOR
/s/ Fred B. Caffey
---------------------------------
Fred B. Caffey
Corporation Lessee Hooker Furniture Corporation
By /s/ Edwin L Ryder
-------------------------------
E. Larry Ryder
Senior Vice President
Finance and Administration
State of Virginia,
county/city of Martinsville, To Wit
The foregoing instrument was acknowledge before me this 20th day of Sept.,
1996 by Fred B. Caffey as Lessor herein,
My commission expires: 1-31-97
[SIGNATURE APPEARS HERE]
---------------------------------
Notary Public
State of Virginia,
county/city of , To Wit:
----------------------
The foregoing instrument was acknowledge before me this ______ day of
_______, 1996 by E. Larry Ryder, Senior Vice President of Hooker Furniture
Corporation, on behalf of that Corporation as Lessee herein.
My commission expires:
-------------------------
---------------------------------
Notary Public
Addendum 2 to lease of Caffey Warehouse located Highway 58 East Henry County,
Virginia dated March 14, 1994 by and between Fred E. Caffey (Lessor) and Hooker
Furniture Corporation (Lessee) all of Martinsville, Virginia. Lessee has
requested installing an enclosed finishing area for furniture in said property
which includes using flammable materials. With proper governmental approval
Lessor has granted permission with the following provisions:
(1) Lessee agrees to bear the cost of insurance formerly provided by Lessor as
describe in the first sentence of Section 7 Titled Insurance.
(2) Lessee agrees if and when lessee vacates the property any environmental
problems created by said addition will be cleaned up to governmental
requirements at lessees expense.
This addendum is in effect starting December 19, 1997
Lessor
/s/ Fred B. Caffey
---------------------------------
Fred B. Caffey
Hooker Furniture Corporation
Lessee
---------------------------------
E. Larry Ryder
Senior Vice President
Finance and Administration
State of Virginia,
county/city of Martinsville, To Wit
The foregoing instrument was acknowledge before me this 22nd day of
December, 1997 by Fred B. Caffey as Lessor herein,
My commission expires: 1-31-2001 [SIGNATURE APPEARS HERE]
------------------------------------
Notary Public
State of Virginia,
county/city of , To Wit
------------------
The foregoing instrument was acknowledge before me this _______ day of
________________,1997 by E. Larry Ryder, Senior Vice President of Hooker
Furniture Corporation, on behalf of that Corporation as Lessee herein.
My commission expires:
------------------------------------
Notary Public