Exhibit 10.1
LEASE OF SPACE IN INTERNATIONAL HOME FURNISHINGS CENTER
IHFC: International Home Furnishings Center, Inc. LESSEE: Hooker Furniture Corp.
Post Office Box 828 P0 Box 4708
High Point, North Carolina 27261 440 East Commonwealth Blvd.
Martinsville, VA 24115
DESCRIPTION OF PREMISES: Space No.W1047 including bays C1003, H1042, H1043,
H1045 and W1041 in the International Home Furnishings Center, High Point, North
Carolina
TERM: 5 Years
COMMENCEMENT DATE: May 1, 2000.
EXPIRATION DATE: April 30, 2005.
ANNUAL RENTAL: 31,865 sq. ft. @ $10.50 per sq. ft. per year $334,582.50
ADDITIONAL OR SUPPLEMENTAL TERMS AND PROVISIONS:
Addendum A for Hamilton Wing Leases is attached hereto and made a part of this
lease.
IHFC, by this Agreement, leases to Lessee and Lessee leases from IHFC, the
Premises described above, at the rental, for the term and upon the other terms
and conditions contained on this page and in IHFC's Standard Terms and
Conditions of Lease (IHFC Form No.900103) which are incorporated by reference in
and made a part of this Lease.
IHFC and Lessee have caused this Lease to be executed by their duly authorized
officers, this the 11th day of August, 1999.
IHFC: EXHIBITOR:
International Home Furnishings Center, Inc. Hooker Furniture Corporation
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Complete Formal Business Name
By: Signature appears here Corporation
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Vice President LEGAL FORM OF BUSINESS:
CORPORATION, PARTNERSHIP OR
INDIVIDUAL AND STATE OF PRINCIPAL
OFFICE
By: Edwin L. Ryder-Sr. VP Fin.& Admin.
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NAME TITLE
PRESIDENT, VICE PRESIDENT, GENERAL PARTNER, OWNER
Attest: /S/ Jane S. Lain
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SECRETARY Attest: Robert W. Sherwood CORPORATE SEAL
------------------
SECRETARY IF LESSEE IS A CORPORATION
CORPORATE SEAL
Page 1 of 5
STANDARD TERMS AND CONDITIONS OF LEASE
IHFC FORM NO. 900103
1.0 (S)1.1. Description. Lessee acknowledges receipt of a drawing or
PREMISES floor plan showing the exact location of the Premises in the
Intentional Home Furnishings Center showroom complex owned and
operated by IHFC (the "Home Furnishings Center"). The Home
Furnishings Center is more particularly described on a map or
plat prepared by Davis-Martin-Powell and Associates, Inc. and
designated Job No. S-18512, a copy of which is on file at the
office of IHFC and is incorporated in this Lease by reference.
The lease of the Premises includes the right of access to the
Premises through the common areas of the Home Furnishings Center.
(S)1.2. Relocation. Lessee acknowledges and agrees that it is
essential to the orderly and efficient operation of the Home
Furnishings Center by IHFC that IHFC have the right from time to
time to relocate lessees in order to achieve optimum utilization
of all space in the Home Furnishings Center. Consequently, IHFC
shall be entitled to relocate Lessee as provided in this section
if IHFC determines that relocation of Lessee is in the best
interest of the Home Furnishings Center in the conduct of its
business. IHFC shall exercise its right to relocate Lessee in the
following manner: (a) the premises to which Lessee is to be
relocated (the "New Premises") shall be selected by IHFC and
shall be equivalent (as determined by IHFC in its sole
discretion) in size and value to the Premises; (b) IHFC shall
notify Lessee of its intent to relocate Lessee within a time
period prior to the commencement of the next regularly scheduled
Market such that the Lessee has a reasonable period of time (as
determined by IHFC in its sole discretion) to refixture,
redecorate, and prepare to show at that Market and identify the
proposed New Premises; (c) within ten (10) days after notice of
relocation by IHFC, Lessee, at its option, may terminate this
Lease by written notice to IHFC; (d) if Lessee fails to terminate
this Lease as provided in (c) above, the New Premises shall be
substituted for the original Premises, this Lease shall continue
in full force and effect without any other change, and IHFC, at
its expense, shall move Lessees property to the New Premises and
shall pay the costs (less a reasonable allowance for
depreciation) of replacing (as nearly as possible) all
installations and improvements of Lessee which cannot be moved to
the New Premises.
2.0 (S)2.1. Commencement and Expiration Date. The Commencement Date
TERM and Expiration Date of the Lease term are the dates set forth on
the first page of this Lease.
(S)2.2. Holding Over. If Lessee remains in possession of the
Premises after the expiration or termination of this Lease,
Lessee shall be only a tenant at will but its occupancy shall
otherwise be subject to all of the terms and provisions of this
Lease, except that Lessee shall pay per diem rent for each day
Lessee occupies the premises, in an amount equal to one hundred
fifty percent (150%) of the then prevailing annual rates for
comparable space charged by IHFC to new tenants, prorated on a
daily basis.
3.0 (S)3.1. Annual Rental. Lessee shall pay to IHFC without offset or
RENT deduction the Annual Rental for the Premises set forth on the
first page of this Lease, in semiannual installments, each such
semiannual installment being due and payable in advance on or
before the first day of November and on or before the first day
of May (the "Rental Payment Dates") of each calendar year during
the Lease term, except as provided in (S)3.2.
(S)3.2. No Reduction. If the Commencement Date is a day other
than a Rental Payment Date, Lessee acknowledges and agrees that
by receiving possession of the Premises on the Commencement Date,
Lessee will be able to show its merchandise at the next ensuing
Market and will receive the same benefits as would have been the
case had the Lease term commenced on the Rental Payment Date next
preceding the actual Commencement Date. Lessee therefore agrees
to pay a full semiannual rental payment for the period of time
beginning with the Commencement Date and ending on the day before
the next Rental Payment Date.
(S)3.3. Rent Adjustment. In addition to the Annual Rental
provided for in (S)3.1, Lessee agrees to pay IHFC, for each Lease
Year, an amount determined by multiplying the Annual Rental by a
percentage equal to the cumulative percentage increase, if any,
in the CPI, determined as follows:
(a) "CPI" means the Consumer Price Index, All Urban
Consumers -U.S. City Average - All items (1982-4=100) as
published by the Bureau of Labor Statistics of the United
States Department of Labor;
(b) If the Commencement Date is a Rental Payment Date, A
Lease Year is the annual period commencing on the
Commencement Date and on each anniversary thereof. If the
Lease Term commences on any other date, a Lease Year is the
annual period commencing on the Rental Payment Date next
preceding the Commencement Date, and on each anniversary
thereof;
(c) The cumulative percentage increase in the CPI shall be
the percentage increase, if any, in the CPI for the sixth
month prior to the Lease Year in question over the CPI for
the same month next preceding the Commencement Date;
(d) If the CPI ceases to use the 1982-4 average equaling 100
as the basis of calculation, or if a change is made in the
term or number of items contained in the CPI, or if the CPI
is altered, modified, converted or revised in any other way,
then the foregoing computations shall be made with the use
of such conversion factor, formula or table for converting
the CPI as may be published by the Bureau of Labor
Statistics or, if the Bureau shall not publish the same,
then with the use of a conversion factor which adjusts the
modified CPI to the figure that would have been arrived at
had the change in the manner of computing the CPI in effect
on the date of this lease not been altered. If the Bureau
shall cease publication of the CPI, then any substitute or
successor index published by the Bureau or other
governmental agency of the United States shall be used,
similarly adjusted. If neither the CPI or a successor or
substitute index similarly adjusted is available, then a
reliable governmental or other reputable publication
selected by IHFC and evaluating the information theretofore
used in determining the CPI shall be used;
(e) IHFC shall bill the Lessee for the cumulative increase
in the Annual Rental at the same time as its normal invoices
for Annual Rental are sent prior to each Lease Year, and,
upon request by Lessee, shall furnish Lessee with a
statement explaining the method of computation of the CPI
increase; and
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(f) IHFC shall not be obliged to make any adjustments or
recomputations, retroactive or otherwise, by reason of any
revision which may later be made in the amount of the CPI
first published for any month.
4.0 (S)4.1. Use. Lessee shall use the Premises for the display,
USE AND exhibition, and sale of home furnishings, furniture, accessories,
OCCUPANCY carpeting and wall coverings, and for office or clerical purposes
OF PREMISES to the extent reasonably required for the conduct of such
BY LESSEE activities at the Premises, and for no other purpose.
(S)4.2. Operation During Markets. Lessee shall open the Premises,
exhibit its products and staff the Premises with employees for
the entire period of each regularly scheduled Market.
(S)4.3. Rules and Regulations. IHFC has established rules,
regulations, guidelines and policies (the "Guidelines") regarding
the operation of the Home Furnishings Center, and shall be
entitled to establish Guidelines from time to time after the
execution of this Lease. Lessee acknowledges receipt of a copy of
the current Guidelines and agrees to comply, and to cause its
employees, contractors, agents and others occupying the Premises
to comply, with all current and future Guidelines, provided that
(a) IHFC notifies Lessee of any Guidelines established after the
date of this Lease and (b) the Guidelines established by IHFC do
not unreasonably interfere with Lessee's use of the Premises for
the purposes set forth in (S)4.1.
(S)4.4. Restriction on Other Operations of Lessee. Lessee agrees
(insofar as and to the extent Lessee may lawfully do so) that
during all regularly scheduled Markets or other times at which
the Home Furnishings Center is officially open to buyers during
the term of this Lease, Lessee will not, within a five (5) mile
radius of the Home Furnishings Center (a) operate any other
showroom under the same trade name or names under which Lessee
does business from the Premises or (b) exhibit in any other
location the same merchandise which Lessee exhibits in the
Premises. Lessee acknowledges and agrees that it is in the best
interest of Lessee and other tenants in the Home Furnishings
Center as exhibitors, and in the best interest of the successful
operation of the Home Furnishings Center as a national market for
home furnishings, to maximize buyer traffic in, and the duration
of buyer visits to, the Home Furnishings Center. Lessee agrees
that the foregoing provisions are reasonably necessary to
accomplish these purposes, and that a breach of these provisions
by Lessee will constitute a material breach of the Lease.
(S)4.5. Property of Others. Lessee will not place or permit to be
placed in the Premises property of any other person or entity,
unless it has first secured the written consent of IHFC.
(S)4.6. Market Dates; Admission. IHFC shall have the sole right
to prescribe the dates of regularly scheduled Markets applicable
to Lessee's lines of merchandise, and qualifications, conditions
and times of admission to the Home Furnishings Center. IHFC may
restrict admission to accredited buyers and condition admission
upon the presentation of credentials prescribed or provided by
IHFC. Without limiting the generality of the foregoing, Lessee
agrees not to admit any buyers to the Premises during the seven
day period prior to each Market.
(S)4.7. Compliance. Lessee agrees not to use or occupy the
Premises, or permit them to be used or occupied, in any manner
which violates applicable laws or regulations affecting the
Premises or the Home Furnishings Center established by any
governmental or public authority having jurisdiction to
promulgate such laws or regulations, or by any insurance carrier
insuring the Premises, property located therein, or the Home
Furnishings Center.
(S)4.8. Inspection by IHFC. IHFC and its representatives shall be
entitled to enter the Premises at any reasonable time for the
purpose of inspecting the Premises, performing any work required
or permitted to be performed by IHFC under this Lease, and
exhibiting the Premises to prospective mortgagees and tenants.
IHFC agrees that to the extent practical, it will not
unreasonably interfere with the operation of Lessee's business in
the exercise of its rights under this Section.
5.0 (S)5.1. Transfers by Lessee. Lessee agrees not to assign this
ASSIGNMENT Lease or sublet all or any part of the Premises without Lessor's
AND prior written consent in each instance. In the event of an
SUBLETTING assignment or sublease, Lessee shall remain primarily liable for
payment and performance of all obligations under this Lease upon
default by the assignee or subtenant, notwithstanding the
acceptance of rent or performance directly from the assignee or
subtenant by IHFC.
(S)5.2. Subleasing Policy. All proposed subleases which IHFC is
requested to approve pursuant to (S)5.1 must conform to
subleasing policies established by IHFC from time to time, and
Lessee acknowledges and agrees that IHFC's subleasing policies,
among other things, may provide for selection of sublessees from
a priority waiting list, the use of standard forms, direct
billing by IHFC, the imposition of subleasing fees by IHFC, and
the retention by IHFC of the excess of any amounts payable under
the sublease over the rent and other charges payable under this
Lease. Nothing in this section may be construed to create any
inference that IHFC is obligated to approve any sublease which
complies with the provisions of this section.
(S)5.3. Change of Ownership. For purposes of this Paragraph, an
assignment includes: (1) one or more sales or transfers by
operation of law or otherwise by which an aggregate of more than
fifty percent (50%) of Lessee's shares or ownership shall be
vested in a party or parties who are not shareholders or owners
of Lessee as of the date of this Lease; (2) any transfer by
operation of law; (3) any assignment among co-tenants; and (4)
any assignment of a part interest in this lease.
6.0 (S)6.1. Acceptance. Lessee has examined the Premises and accepts
REPAIRS them in their present conditions, without any representation on
AND the part of IHFC as to the present or future condition of the
MAINTENANCE Premises except as otherwise specifically provided in this Lease.
(S)6.2. IHFC's Repair Obligations. IHFC shall at IHFC's expense
maintain the exterior walls, roof, structural supports and common
areas of the Home Furnishings Center in good order and repair;
provided, however, that (a) IHFC is not an insuror and its
responsibility to do so shall be confined to making the proper
repairs within a reasonable time after it has received notice of
the necessity, nature and location of the repairs and (b) Lessee
shall repair any damage to the Home Furnishings Center caused by
Lessee or its agents.
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(S)6.3. Lessee's Repair Obligations. Lessee agrees to maintain
the Premises in a neat and clean condition, in good order and
repair, and in full compliance with applicable laws, ordinances,
regulations, and codes.
(S)6.4. Surrender. At the expiration or termination of this
Lease, Lessee agrees to quit and surrender the Premises to IHFC
in as good a condition as when received, reasonable wear and tear
and damage by fire or other casualty excepted.
7.0 (S)7.1. Lessee's Property. Subject to the security interest
LESSEE'S granted in (S)12.4 of this Lease, all merchandise, office
PROPERTY; furniture and equipment, samples, inventory and other unattached
ALTERATIONS movable property placed in the Premises by Lessee shall remain
AND the property of Lessee, and Lessee, if it is not in default under
IMPROVEMENTS this Lease, shall be entitled to remove such items from the
Premises, provided Lessee repairs any damage to the Premises or
the Home Furnishings Center caused by such removal.
(S)7.2. Placing Property in or Removing Property From Premises.
Except as otherwise specifically permitted by IHFC's Guidelines,
all property of Lessee shall be moved to or from the Premises by
the employees or designated contractors of IHFC, at the expense
and risk of Lessee, and Lessee agrees to pay IHFC upon receipt of
IHFC's invoice, IHFC's standard charges for moving such items to
and from the Premises. IHFC shall not be liable for any loss or
damage to property of Lessee, unless caused by the negligence of
IHFC or its employees.
(S)7.3. Alterations and Improvements. Lessee shall be entitled to
make alterations, additions, and improvements to the Premises,
provided Lessee first obtains IHFC's written consent, which IHFC
will not unreasonably withhold. Any alteration, addition,
improvement or other property attached to the Premises by Lessee
(including, without limitation, electrical wiring, lighting
fixtures, carpeting and track lighting) shall become the property
of IHFC upon the expiration or termination of this Lease, unless
IHFC elects to require Lessee to remove the same, repair any
damages occasioned by such installation or removal, and restore
the Premises to their original condition.
(S)7.4. Performance of Work. All work in connection with
alterations, additions, or improvements to the Premises (a) shall
be performed in a first class, workmanlike manner with all
required governmental and utility permits obtained in advance by
Lessee; (b) shall not weaken or impair the structural integrity
of the Home Furnishings Center; and (c) shall be in accordance
with plans and specifications, and performed by contractors,
approved by IHFC. All contractors performing such work shall
carry insurance satisfactory to IHFC and shall execute lien
waivers, and indemnity agreements satisfactory to IHFC. IHFC
shall have no duty to Lessee or anyone else to enforce these
requirements or inspect the work of Lessee's contractors.
8.0 IHFC agrees to pay all ad valorem taxes and assessments levied,
TAXES assessed or charged against the Home Furnishings Center. Lessee
agrees to list and pay all license, privilege, ad valorem or
other taxes levied, assessed or charged against Lessee or IHFC on
account of the operation of Lessee's business in the Premises or
on account of property owned by Lessee.
9.0 IHFC agrees to furnish heat, electricity, air conditioning, and
UTILITIES elevator service to the Premises for a period beginning thirty
(30) days prior to the commencement of each regularly scheduled
Market, and ending fourteen (14) days following the close of each
such Market; provided, however, that IHFC shall not be liable for
interruptions in service due to breakdowns or other causes beyond
its control. If Lessee uses the Premises at any other times,
Lessee agrees to pay such additional charges as may be imposed by
IHFC for such excess utility use.
10.0 (S)10.1. Insurance. Lessee agrees to keep its property located in
INSURANCE; the Premises, including all alterations, additions and
INDEMNITY improvements made by it, insured against loss or damage by fire
or other casualty, under an "all risks" policy in an amount equal
to full replacement cost value thereof. Lessee agrees to maintain
in force comprehensive general liability insurance coverage on
the Premises, with a minimum combined single limit of $500,000
for death, personal injury or property damage, naming IHFC as an
additional insured. This general liability coverage may be either
on an "occurrence" or a "claims made" basis. If on a "claims
made" basis, Lessee must either:
(a) Agree to provide certificates of insurance evidencing
the above coverages for a period of three years after
expiration of the lease, which certificate shall evidence a
"retroactive date" no later than the Commencement Date; or
(b) Purchase the extended reporting period endorsement for
the policy or policies in force during the term of this
lease and evidence the purchase of this extended reporting
period endorsement by means of a certificate of insurance or
a copy of the endorsement itself.
All policies shall provide that unless IHFC is given ten (10)
days written notice of any cancellation, failure to renew, or
material change, the insurance shall remain in full force and
effect, without change. On or before the Commencement Date,
Lessee agrees to provide IHFC with satisfactory evidence that all
required insurance is in force. Lessee may provide any insurance
required under this Article through its corporate or blanket
policies.
(S)10.2. Waiver of Subrogation. To the extent that any business
interruption or loss or damage to property occurring in the
Premises or in the Home Furnishings Center, or in any manner
growing out of or connected with Lessee's occupation of the
Premises or the condition thereof (whether or not caused by the
negligence of IHFC or Lessee or their respective agents,
employees, contractors, tenants, licensees, or assigns) is
covered by insurance (regardless of whether the insurance is
payable to or protects IHFC or Lessee, or both) neither IHFC nor
Lessee, nor their respective officers, directors, employees,
agents, invitees, assignees, tenants, or subtenants, shall be
liable to the other for such business interruption or loss or
damage to property, it being understood and agreed that each
party will look to its insuror for reimbursement. This release
shall be effective only so long as the applicable insurance
policies contain a clause to the effect that it shall not affect
the right of the insured to recover under the policies. Such
clauses shall be obtained by the parties wherever possible.
Nothing in this Section may be construed to impose any other or
greater liability upon either IHFC or Lessee than would have
existed in its absence.
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(S)10.3. Assumption of Risks, Release, and Indemnity. Lessee (1)
assumes all risks with respect to, (2) releases IHFC from
liability for, and (3) agrees (except to the extent IHFC is
effectively protected by insurance) to protect, indemnify and
save harmless IHFC from and to defend IHFC (through counsel
acceptable to IHFC) against any claim liability, loss, or damage
arising out of or connected with the following, however caused
and wherever originating and regardless of whether the cause or
means of repairing the same is accessible to or under the control
of Lessee:
(a) Damage to property of Lessee, or its agents, employees
or subtenants occurring in or about the Home Furnishings
Center;
(b) Damage to property of anyone occurring in or about the
Premises;
(c) Any injury to or interruption of business or loss of
profits attributable to or connected with any damage to
property referred to in subparagraphs (a) or (b), above.
(d) Death or personal injury occurring in or about the
Premises (unless resulting from the negligence of IHFC or
its employees); or(e) Any other risks with respect to which
Lessee is required to insure by the terms of this Lease
(whether or not such insurance is actually in force).
In addition to and without limiting the generality of the
foregoing. Lessee's assumption of risk, release, and indemnity
obligations as set forth above shall apply to any claim,
liability, loss or damage arising out of or in connection with
(1) Lessee's occupancy of or conduct of business in the Premises;
(2) the condition of the Premises; (3) any default of Lessee
under this Lease; and (4) mechanic's or materialmen's liens
asserted by persons claiming to have dealt with Lessee or
Lessee's contractors.
11.0 (S)11.1. Option to Terminate. If the Premises are damaged or
DAMAGE OR destroyed by fire or other casualty to such extent that they are
DESTRUCTION completely untenantable, or if the area of the Home Furnishings
Center in which the Premises are located is so severely damaged
that IHFC elects to demolish, or completely rebuild it, IHFC may
terminate this Lease by notifying Lessee within thirty (30) days
following the damage or destruction, and rent and other charges
payable by Lessee under this lease shall be apportioned to the
date of the damage or destruction.
(S)11.2. Obligation to Repair or Restore. If the Premises are
damaged by fire or other casualty, unless IHFC has exercised its
right to terminate, if any, under (S)11.1, IHFC shall with
reasonable dispatch, and in any event within one hundred eighty
(180) days, repair and restore the Premises to their condition
existing at the date of the damage or destruction (except for
alterations and improvements installed by Lessee and other
property of Lessee, which Lessee shall repair and restore within
that time) and this Lease shall remain in full force and effect
except that rent shall abate as provided in (S).11.3.
(S)11.3. Rent Abatement. If the Premises are damaged or destroyed
by fire or other casualty and this Lease is not terminated, rent
and other charges under this Lease shall abate in the same
percentage as the rentable area of the Premises available for use
bears to the entire rentable area of the Premises; provided,
however, that if the Premises are damaged or destroyed to such
extent that it is unreasonable to expect Lessee to continue to
operate the Premises as a showroom, all rent shall abate from the
date of the damage or destruction until the earlier of the date
the Premises are repaired and restored, or the date Lessee
reopens the Premises as a showroom. Notwithstanding the
foregoing, if IHFC is able to repair and restore the Premises
within such time as to permit Lessee (in the exercise of
reasonable dispatch and considering the time required for Lessee
to complete Lessee's restorations to the Premises and redecorate
them) to use the Premises for a showroom at the next ensuing
Market after the damage or destruction, there shall be no
abatement of rent.
12.0 (S)12.1. Events of Default. Lessee shall be in default under this
DEFAULT Lease if any one of the following Events of Default occurs:
(a) Lessee fails to pay when due any installment of rent or
other amount due under the terms of this Lease;
(b) Lessee fails to pay when due any other amount owed to
IHFC; or
(c) Lessee repudiates or fails to perform any obligation
under (S).1.2 (Relocation), (S).4.0 (Use), (S).5.0
(Assignment and Subletting), (S).7.3 (Alterations), (S).13.0
(Subordination) or (S).14.0 (Estoppel Certificates).
(d) Lessee vacates or abandons the Premises;
(e) Lessee becomes insolvent, executes an assignment for the
benefit of creditors, is adjudicated a bankrupt, files for
relief under the reorganization provisions of any Federal
bankruptcy law or state insolvency law, or a permanent
receiver of the property of Lessee is appointed by any court
of competent jurisdiction.
(f) Lessee repudiates or, within ten (10) days after notice
of nonperformance by IHFC, fails to perform any other
obligation which it is required to perform under the terms
of this Lease or, if performance cannot reasonably be had
within ten (10) days after notice from IHFC, Lessee fails to
commence performance within that period and diligently
proceed to completion of performance.
(S)12.2. Remedies. If an Event of Default occurs, IHFC, at its
option and without further notice to Lessee, may pursue any
remedy now or hereafter available to IHFC under the laws of the
State of North Carolina. Without limiting the generality of the
foregoing, IHFC shall be entitled to reenter the Premises by
force, summary proceedings or otherwise, expelling Lessee and
removing all property from the Premises, all without liability to
Lessee or anyone else and either:
(a) attempt to relet the Premises for such term and rental
and upon such other terms and conditions as IHFC in its sole
discretion deems advisable. All rentals received by IHFC
from such reletting shall be applied, first, to payment of
any indebtedness other than rent due from Lessee to IHFC;
second, to payment of any expenses of reletting, including,
without limitation, the costs of recovering the Premises,
such
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alterations or repairs as may be necessary to relet the
Premises, brokerage fees, and reasonable attorney's fees;
third to payment of any rent unpaid under the terms of this
Lease; and the residue, if any, to the payment of rent as
the same becomes due and payable under this Lease. If the
amount received from such reletting and applied to rent
during any semiannual period is less than the rent reserved
under this Lease, Lessee agrees to pay the deficiency to
IHFC. The deficiency shall be calculated and paid
semiannually. No reentry or taking possession of the
Premises by IHFC shall be construed as an election upon its
part to terminate this Lease unless IHFC so notifies Lessee
or this Lease is terminated by order of a court of competent
jurisdiction; or
(b) notwithstanding any reletting without termination, at
any time after an Event of Default occurs, elect to
terminate this Lease, and, in addition to IHFC's other
remedies, recover from Lessee all damages incurred by reason
of Lessee's default, including, without limitation, the
costs of recovering the Premises, reasonable attorney's
fees, and the worth, at the time of the termination, of the
excess, if any, of the amount of rent reserved under this
Lease over the then reasonable rental value of the Premises
for the remainder of the term of the Lease, all of which
amounts shall be immediately due and payable from Lessee to
IHFC.
(S)12.3. Late Charges. If any installment of rent or any other
amount due under this Lease is not received by IHFC within ten
(10) days after the date such payment was due, then Lessee shall
be obligated to pay, in addition to the amount due, a late charge
equal to five percent (5%) of the overdue amount. Lessee agrees
that this late charge represents a fair and reasonable estimate
of the additional processing, accounting and other costs IHFC
will incur by reason of late payment by Lessee, the exact amount
of which would be difficult to ascertain. Notification by IHFC to
Lessee that a late payment charge has been added to the amount of
overdue rent or other charges shall not constitute a waiver of
Lessee's default, nor preclude IHFC from exercising any other
remedy.
(S)12.4. Security Interest. As security for performance and
payment of all present and future rents and other obligations
required to be paid or performed by Lessee under the terms of
this Lease, and for any other amounts owed IHFC by Lessee, Lessee
hereby grants unto IHFC a security interest in all installations,
samples, goods, merchandise, furniture, fixtures, and other
property of Lessee, now owned or hereafter acquired, located in
the Premises or the Home Furnishings Center. If an Event of
Default occurs, IHFC at any time thereafter may exercise, in
addition to its other remedies, the rights of a secured party
under Chapter 25 of the North Carolina General Statutes. The
proceeds from any sale of the collateral pursuant to such
remedies shall be applied in the following order: (a) the expense
of taking, removing, holding for sale, and preparing for sale,
specifically including IHFC's reasonable attorney's fees; (b) the
expense of liquidating any liens, security interests or other
encumbrances superior to this security interest; and (c) amounts
owed by Lessee to IHFC under the terms of this Lease or
otherwise, in the order herein provided for. Lessee agrees to
execute such financing statements and other documents as may be
required to perfect the security interest granted to IHFC under
this Section.
(S)12.5. Partial Payment. IHFC shall not be obligated to accept
partial payments of rent or other charges due under this Lease.
If IHFC accepts any such payment, IHFC shall not be deemed to
have waived the default of Lessee by reason of non-payment of
such charges in full, nor to have waived its right to collect
late charges. IHFC will hold any partial payment so received as a
deposit against full payment of such amounts. At any time prior
to full payment by Lessee of such amounts, IHFC may exercise any
one or more of its remedies on default, and apply the deposit to
any amounts or damages owed IHFC as of the date IHFC elects to
exercise such remedies, including, without limitation, pro rata
rent and other charges payable under this Lease for the current
lease period up through the date of the exercise by IHFC of its
remedies upon default. The acceptance of such deposit by IHFC
shall be entirely without prejudice to IHFC's right thereafter,
at any time prior to payment in full, to assert such default,
apply the deposit as provided in this section, and pursue all
remedies available to IHFC under this Lease or applicable law.
(S)12.6. Default Under Prior Lease. If this Lease is to take
effect at the expiration of an earlier lease between IHFC and
Lessee for space in the Home Furnishings Center (the "Prior
Lease"), then this Lease is subject to Lessee's performing its
obligations under the Prior Lease up through the date of its
expiration. If an Event of Default occurs under the Prior Lease
and IHFC, pursuant to its rights under the Prior Lease, either
(a) terminates Lessee's right to possession of the Premises or
(b) terminates the Prior Lease, then this Lease shall be
automatically terminated, whether or not such termination is
expressly stated in any notice from IHFC to Lessee.
13.0 At the election of IHFC, this Lease shall be subordinate to a
SUBORDINATION first mortgage or deed of trust held by a lending institution and
secured by the Home Furnishings Center; provided, however, that
IHFC agrees to use reasonable efforts to secure from the
mortgagee a nondisturbance agreement providing that in the event
of foreclosure the mortgagee will recognize the validity of this
Lease, and, provided Lessee is not in default, will not disturb
Lessee's possession hereunder.
14.0 Upon ten (10) days prior written notice from IHFC, Lessee agrees
ESTOPPEL to execute, acknowledge and deliver to IHFC, Lessee's
CERTIFICATES certificate: (a) stating whether this Lease is in full force and
effect; (b) stating whether this Lease has been modified, and if
so, the nature of such modification; (c) stating the date through
which rent and other charges are paid in advance; (d) stating
whether, to Lessee's knowledge, there are any uncured defaults of
IHFC under this Lease, specifying the nature of any claimed
default; and (e) providing such other information as IHFC may
reasonably request with respect to the status of the Lease. Any
such certificate may be conclusively relied upon by IHFC or any
prospective purchaser or mortgagee of the Home Furnishings
Center.
15.0 All notices required or permitted by the terms of this Lease
NOTICES shall be deemed given when deposited in the United States
Registered or Certified Mail, Postage Prepaid, or with
verification of delivery by telegram, cable, telex, commercial
courier or any other generally accepted means of business
communication, to either party, at the address set forth for such
party on the first page of this Lease. Either party may change
the address to which notices must be sent by giving notice to the
other party in accordance with this Section.
16.0 (a) This Lease shall be governed, construed, and enforced
MISCELLANEOUS under the laws of North Carolina and the parties submit to
the jurisdiction of the courts of North Carolina and
stipulate that Guilford County, North Carolina, is proper
venue for the purpose of all controversies which may arise
under this Lease;
(b) This Lease contains the entire understanding of the
parties and there are no conditions precedent to its
effectiveness or collateral understandings with respect to
its subject matter;
(c) It may not be modified except by writing signed by both
parties;
(d) it shall not be construed strictly against either party,
but fairly in accordance with their intent as expressed
herein;
(e) Lessor's remedies are cumulative and not exclusive of
other remedies to which Lessor may be legally entitled;
(f) No waiver of any breach of a provision of this Lease may
be construed to be a waiver of any succeeding breach of the
same or any other provision, nor shall any endorsement or
statement on any check or letter accompanying payment be
deemed an accord and satisfaction, and IHFC may accept
payment without prejudice to its rights to pursue any remedy
provided for in this Lease;
(g) Time is of the essence in every particular, especially
where the obligation to pay money is involved;
(h) Amounts not paid IHFC when due will bear interest on the
unpaid balance at the lower of one and one-half percent (1-
1/2%) per month or the maximum lawful rate; and
(i) This Lease binds the parties, their respective heirs,
personal representatives, successors and assigns.
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ADDENDUM A
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This Addendum contains provisions which modify and supplement the provisions
contained in the standard IHFC Lease and in IHFC's Standard Terms and Conditions
of Lease. If there is any conflict between the terms of this Addendum and the
terms of IHFC's standard Lease or Standard Terms and Conditions of Lease, this
Addendum controls.
1. SIGNAGE
. Lessee agrees to pay for and maintain the standard exterior signage in
accordance with signing specification on all fascias. (Signs are
required on all fascias.) Lessee agrees not to place any other signs,
banners, or other material of any kind on the exterior of the premises.
2. DESIGN STATEMENT
. This Lease is contingent upon Lessee making a professionally designed
showroom statement both interiorly and exteriorly.
3. WINDOWS
. Lessee agrees that draperies, blinds, paper, curtains, or any other
device that limits vision in the Premises will not be installed upon or
near any window or door of the Premises.
[GRAPHIC OF FLOOR PLAN APPEARS HERE]
Wrenn, Commerce & Hamilton Wings