EXHIBIT 10.21
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GEORGIA, FLOYD COUNTY:
THIS AGREEMENT, made this the 17 day of July, 1988 between Milford Morgan Trust
Properties, herein referred to as Landlord, and Image Industries, Inc. having an
address of P.O. Box 5555, Armuchee, GA 30105, herein referred to as Tenant.
WITNESSETH: That Tenant has this day rented and leased from Landlord the
following described premises to wit:
PREMISES: That certain warehouse located on Highway 114, Lyerly,
Chattooga County, Georgia.
TERM: For the term of five (5) years commencing on the date the new
addition is approved for occupancy. The existing building will
be leased on an interim basis until the new building is
approved for occupancy and at that time the existing building
will be leased along with the new building according to the
conditions listed under the SPECIAL STIPULATIONS SECTION.
The dates will be filled in with a mutually agreed time when
the new building is approved for occupancy.
Commencing date _____________ and ending on ________________
Initialed ____________________ ____________________________
RENTAL: in advance to Landlord a monthly rental of (see Special
Stipulation A)
DEFAULT: (1) It is mutually agreed that in the event the Tenant shall
default in the payment of rent herein reserved, when due, and
fails to cure said default within ten (10) days after written
notice thereof from Landlord; or if Tenant shall be in default
in performing any of the terms or provisions of the lease
other than the provision requiring the payment of rent, and
fails to cure such default within thirty (30) days after the
written notice of default from Landlord; or if Tenant is
adjudicated bankrupt or if a permanent receiver is appointed
for Tenant's property and such receiver is not removed within
sixty (60) days after written notice from Landlord to Tenant
to obtain such removal: or if, whether voluntarily or
involuntarily, Tenant takes advantage of debtor relief
proceedings under any present of future law, whereby the rent
or any part thereof is, or is proposed to be, reduced or
payment thereof deferred; or if Tenant makes an assignment for
benefit of creditors; or if Tenant's property or any part
thereof should be levied upon or attached under process
against Tenant and not satisfied or dissolved within thirty
(30) days after written notice from Landlord to Tenant to
obtain satisfaction thereof; then, and in any said events,
Landlord, at his option, may at once, or within six (6)
months thereafter (but only during continuance of such default
or condition), terminate this lease by written notice to
Tenant: whereupon this lease shall end. After an authorized
assignment or subletting of the entire premises covered by
this lease, the occurring of any of the foregoing defaults or
events shall affect this lease only if caused by , or
happening to the assignee or subtenant. Any notice provided in
this paragraph may be given by Landlord, or Agent herein
named. Upon such termination by Landlord, Tenant will at once
surrender possession of the premises to Landlord and remove
all of Tenant's property therefrom; and Landlord may forthwith
re-enter the premises and repossess himself hereof, and remove
all persons and property therefrom, using such force as may be
necessary without being guilty of trespass, forcible entry to
detainer or other tort, or the violation of any of the terms
of this lease.
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RELETTING BY
LANDLORD: (2) Landlord as Tenant's agent, without termination of this
lease, upon Tenant's breaching any of the terms of this
contract, may at Landlord's option, enter upon and rent said
premises at the best price obtainable by reasonable effort
without advertisement and by private negotiations and for any
term Landlord deems proper. Tenant shall be liable to Landlord
for the deficiency, if any, between Tenant's rent hereunder
and the price obtained by Landlord in re-letting.
COLLECTION
BY ATTORNEY: (3) If any rent owing under this lease is collected by or
through an attorney at law, Tenant agrees to pay ten (10%)
percent thereof as attorney's fees. Tenant waives all right to
homestead and exemptions which he or any member of his family
or other person may have under any law as against any
obligating arising under this lease, and Tenant hereby assigns
to Landlord his homestead and exemption.
SUBLETTING
BY TENANT: (4) Tenant may sublease portions of the leased premises to
others provided such operation is a part of the general
operation of Tenant and under the supervision and control of
Tenant, and provided such operation is within the purposes for
which said premises shall be used. Except as provided in
preceding sentence, Tenant shall not without the prior written
consent of Landlord, assign this lease or any interest
hereunder, or sublet premises or any part thereof, or permit
the use of premises by any party other than Tenant, any
assignee of Tenant, at option of Landlord, shall become
directly liable to Landlord for all obligations of Tenant
hereunder, but no sublease or assignment by Tenant shall
relieve Tenant of any liability hereunder.
SIGNS: (5) Tenant shall paint no signs upon the outside walls or
place any signs on the roof of the leased premises except with
the written consent of the Landlord. Any and all signs placed
on the within leased premises by Tenant shall be maintained in
compliance with the rules and regulations governing such signs
and the Tenant shall be responsible to Landlord for any damage
caused by installation, use or maintenance of said signs, and
Tenant agrees, upon removal of said signs, to repair all
damage incident to such removal.
CONTROL &
RESPONSIBILITY: (6) Landlord gives to Tenant exclusive control of the
premises, and shall be under no obligation to inspect said
premises, Tenant shall at once report in writing to Landlord
any defective condition known to him which Landlord is
required to repair, and failure to so report such defect shall
make Tenant responsible to Landlord for any liability incurred
by Landlord by reason of such defect. If such defect shall
result in a leak or other condition needing attention in the
roof, Landlord upon receipt of written notice from Tenant
shall with reasonable promptness have made the necessary
repairs. Should Landlord fail to make such repairs with
reasonable promptness, Tenant is authorized to have the
necessary repairs made and deduct the cost from the next
rental payment due hereunder. Landlord shall nor be liable,
under any circumstances, for damage by water, or otherwise, by
reason of the failure of the building to protect persons or
property, nor shall Landlord be liable for damages by reason
of flood water in the basement, or otherwise.
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DELIVERY AT
EXPIRATION: (7) Tenant shall deliver said premises at the expiration of
this lease in as good order and repair as when first received,
natural wear and tear and fire and other casualty loss
excepted. Tenant shall have the right, within the term of this
lease, if not in default thereunder, to remove all furniture
or trade fixtures that have been installed by Tenant, but
Tenant will repair, at or before the end of the term, all
injury done by the installation or removal of furniture and
property.
CHANGES IN
PREMISES: (8) Tenant is to make no change of any substantial or
permanent nature in the above named premises, including
painting of outside walls without first obtaining written
consent from said Landlord.
IMPROVEMENTS
BY TENANT: (9) Any improvements, repairs, betterments, or additions
placed on the premises by Tenant shall be paid for by Tenant,
and shall not be a charge against Landlord or the property.
VACANCY &
UTILITIES: (10) Tenant agrees not to leave the premised herein leased
unoccupied, nor to do or permit any act which would vitiate
the insurance upon this property, or increase the insurance
rates. Tenant agrees to pay all electric light, water, heat,
gas, and power bills accruing against said property during the
term of this contract. If by reason of any act or failure on
the part of Tenant there shall be an increase in the insurance
rates on the leased premises, or the building of which same is
a part, the Tenant agrees to pay such increase to the Landlord
upon demand, and on failure of Tenant to pay such increased
insurance cost, or bills for electric lights, water, heat, gas
or power, the Landlord may pay the same, but is not required
to do so, and the amount so paid shall become a part of the
rental of said premises and may be collected as such.
ORDINANCES: (11) Tenant agrees to comply with all rules, orders,
ordinances and regulations of the City, County and State in
which the property is located, in any and all of their
departments.
CARDING: (12) Landlord has the privilege of carding the premised for
rent or for sale at any time within ninety (90) days previous
to the expiration of this lease, and may at any time exhibit
said premises during reasonable hours.
USE OF
PREMISES: (13) The within premises shall not be used for any purpose
except the purpose herein designated, without the written
consent of Landlord. No wines, beer, whiskeys, liquors or
intoxicating beverages of any kind shall be kept on, sold or
delivered from said premises.
HOLD OVER: (14) This lease, under no circumstances, shall extend beyond
the time herein provided; and in the event Tenant remains in
the property after the expiration date of the term herein,
with or without payment of rent, this shall not automatically
extend the lease but he shall be as a tenant at will, and
subject to the terms of the original lease.
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LIGHT &
AIR EASEMENT: (15) Nothing herein contained shall be construed to confer
upon Tenant any easement to light or air.
RIGHT OF
USE ONLY: (16) This contract shall create the relationship of Landlord
and Tenant between the parties hereto. No estate shall pass
out of Landlord. Tenant has only a usufruct, not subject to
levy and sale, and not assignable by Tenant except by
Landlord's consent.
(17) All rights, powers and privileges conferred hereunder
upon parties hereto shall be cumulative but not restrictive to
those given by law.
NON-WAIVER
OF RIGHTS: (18) No failure of Landlord to exercise any power given
Landlord hereunder, or to insist upon strict compliance by
Tenant with his obligations hereunder, and no custom or
practice of the parties at variance with the terms hereof
shall constitute a waiver of Landlord's right to demand exact
compliance with the terms hereof.
(19) Time is of the essence of this agreement.
DEFINITION
OF PARTIES: (20) "Landlord," as used in this lease, shall include also his
heirs, representatives, assigns and successors in title to
premises. "Tenant" includes also his heirs and
representatives, and if this lease shall be validly assigned
or said premises sub-let shall include also Tenant's assignees
or sub-tenants as to premises covered by such assignment or
sub-lease. "Agent" shall include its successors, assigns, and
representatives. "Landlord" and "Tenant" include male and
female, singular and plural, corporation, partnership or
individual, as may fit the particular parties.
NOTICES: (21) The depositing in the United States Post Office, directed
to Tenant at Tenant's address shown above of any notice
required or permitted under this lease to be given by the
Landlord to the Tenant, shall be conclusive of delivery
thereof to the Tenant.
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SPECIAL STIPULATIONS:
Insofar as the following stipulations conflict with any of the foregoing
provisions, the following shall control.
A. The Tenant agrees to pay Landlord a rental fee for a newly constructed
building attached to the existing building according to the following
rates and terms:
o The lease on the current facility, known as the Lyerly building,
will remain in place until the Tenant has been granted occupancy of
the building. The existing lease will be terminated upon occupancy
of the new building.
o The acceptance date of occupancy in the new building will be the
effective date of this lease. The term as specified on page one of
the lease is 5 years.
o The rental rate schedule shall be as follows:
Monthly Monthly Monthly
Year New Bldg. Old Buld. Total Annual
---- --------- --------- ----- ------
1 $ 8,910.00 $ 5,039.00 $ 13,949.00 $167,388.00
2 $ 9,281.00 $ 5,165.00 $ 14,446.00 $173,352.00
3 $ 9,653.00 $ 5,294.00 $ 14,947.00 $179,364.00
4 $ 10,024.00 $ 5,294.00 $ 15,318.00 $183,816.00
5 $ 10,395.00 $ 5,294.00 $ 15,689.00 $188,268.00
The rate for the new building is based upon 74,250 square feet
The rate schedule above will be amended to reflect the actual
size of the facility. The per square foot rates are: Year 1 --
$0.12/sq. ft., Year 2 -- $0.125/sq. ft., Year 3 -- $0.13/sq.
ft., Year 4 -- $0.135/sq. ft., Year 5 -- $0.14/sq. ft.
5. Payment will be paid in advance by the 10th, day of each month, c/o
Charles Milford Morgan, JR. d/b/a Morgan Trust Properties, 107 N Commerce
St [ILLEGIBLE], Summerville, Georgia 30747.
B. As a condition to the effectiveness of this lease Landlord herein shall
perform the following work on the demised premises:
1. Replace or cover the roof with a membrane type roof.
C. At the end of the primary lease term, Tenant shall have 1 one-year option
to renew this lease under the same terms and conditions of the original
lease provided Tenant gives Landlord notice of his intent to exercise said
option ninety (90) days prior to the end of the then present lease term.
SPECIAL STIPULATIONS continue on pages 6 through 10 and are incorporated
herein by this reference.
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This lease contains the entire agreement of the parties hereto, and no
representations, inducements or promises by, or agreements, oral or otherwise,
between the parties, not embodied herein, shall be of any force or effect.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and seals
and executed this instrument in triplicate the day and year above written.
Signed, sealed and delivered as to
Landlord, in the presence of:
/s/ Lisa L. Keen
- ------------------------------- [ILLEGIBLE] Morgan Trust Properties
Witness
/s/ Kay Bishop By: /s/ [ILLEGIBLE] (SEAL)
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Notary Public
Signed, sealed and delivered as to
Tenant, in the presence of:
/s/ Lisa L. Keen
- ------------------------------- Image Industries. Inc.
Witness
/s/ Kay Bishop By: /s/ [ILLEGIBLE] (SEAL)
- ------------------------------- ---------------------------------------
Notary Public
SPECIAL STIPULATIONS
(Continued)
D. Maintenance and Repairs:
1. Landlord's Repairs: Landlord shall maintain in good repair all
items for which Tenant is not responsible pursuant to the following paragraph,
including the walls, foundations, roof, gutters, downspouts, exterior and all
structural portions of the premises. In addition, Landlord shall be obligated to
make those repairs which are occasioned by its negligence or the negligence of
its employees, agents, servants or contractors.
2. Tenant shall be responsible for all interior, non-structural
repairs to the building, including sash and frames, window glass and plate
glass, doors, closures and frames which are not structural parts of the wall,
and shall maintain in good repair all plumbing, electrical, sewage and heating,
ventilation and air conditioning systems. In addition, unless required to be
insured by Landlord hereunder, Tenant shall be responsible for any damage to the
demised premises resulting
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from its negligence or the negligence of its employees, agents, servants, or
contractors.
E. Insurance: Landlord shall, at its cost and expense, provide and keep in
force the following insurance coverage without lapse at any time and for any
reason during the term of this Lease:
(i) Insurance covering the premises against loss or damage by fire and
lightning and such risks as are included in "Special Form" or All
Risk coverage endorsements to policies covering property similar to
the premises in an amount equal to 100% of the full replacement
value thereof (excluding foundations and excavation costs), which
names Tenant as an additional insured and which includes an
endorsement waiving the right of subrogation. Notwithstanding
anything contained in this lease to the contrary, regardless of
whether or not Landlord provides and keeps in force the required
insurance covering losses of such causes and regardless of whether
or not Tenant, its agents, employees, contractors or others under
the control of Tenant cause such damages, Landlord shall be
responsible for repairing all damages to the premises caused by fire
and lightning and such risks as are customarily included in "Special
Form" or All Risk coverage endorsements to policies covering
property similar to the premises.
(ii) Commercial General Liability coverage on an "Occurrence Form" basis
with limits of at least $1,000,000 Each Occurrence. and $2,000,000
General Aggregate for all claims arising out of Bodily Injury,
Personal Injury, and Property Damage Liability, including
Contractual Liability.
(iii) Business Auto Liability coverage for all vehicles owned by Landlord
including Non-Owned and Hired Autos, with limits of at least
$1,000,000 Each Occurrence for Bodily Injury and Property Damage
Liability.
(iv) Workers Compensation coverage covering all employees, contractors
and subcontractors of Landlord, as applicable, working in the State
of Georgia under the statutory provisions of the Georgia Workers
Compensation Act.
Landlord and Tenant expressly agree that either Landlord's failure to provide
Tenant a certificate of insurance as temporary evidence of the insurance
coverage required by this lease within ten (10) days from the effective date of
this lease, or Landlord's failure to provide Tenant a final policy or policies
of insurance evidencing the insurance coverage required by this lease within
sixty (60) days from the effective date of this lease, shall render Landlord in
default under the lease and shall entitle Tenant to exercise any applicable
remedies upon default provided in the Lease or allowed by law. The policies
required under this section shall not be cancelled without thirty (30) days
prior written notice
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to Tenant.
F. Waiver of Subrogation. Landlord and Tenant hereby waive any right each
may have against the other on account of any loss or damage occasioned to
Landlord or to Tenant, as the case may be, their respective property the
premises or its contents, arising from any risk generally covered by "Special
Form" or All Risk insurance coverage, and Landlord and Tenant, each on behalf of
their respective insurance companies insuring the foregoing against any such
loss or damage, waive any right of subrogation that it may have against the
other.
G. Damage or Destruction: In the event that the demised premises are
totally destroyed by fire, casualty or other disaster, Landlord shall have no
obligation to repair or rebuild the demised premises and shall retain all funds
paid by any insurer as a result of such casualty and this lease shall be null
and void as of the date of such destruction. In the event that the building on
the demised premises is partially damaged by fire, casualty or other disaster,
and such damage cannot reasonably be repaired within thirty (30) days of the
date of such damage so as to cause the same to be restored to its prior existing
condition, this lease shall terminate and Landlord shall retain all funds paid
by any insurer as a result of such casualty. In the event that the building on
the demised premises is partially damaged by fire, casualty or other disaster,
and such damage can reasonably be repaired within thirty (30) days of the date
of such damage so as to cause the same to be restored to its prior existing
condition, the Landlord shall proceed to restore said demised premises and
during the period of time of restoration, the rent shall be reduced
proportionately according to the percentage of square feet of usable area
remaining in the portion of the building leased to Tenant. In the event the
demised premises are untenable as a result of such damage, rent shall abate
during the period of time of restoration.
Tenant agrees, upon notice from the Landlord, to remove such fixtures and
other property from the demised premises as shall be required by Landlord for
such restoration work and agrees to permit Landlord, its agents, servants,
employees and contractors to enter upon the demised premises and remain thereon
without molestation for the purpose of restoring the demised premises. Should
Tenant have paid any rent upon the demised premises beyond the date of
termination, as in this item
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provided. Tenant shall be entitled to a proportionate refund.
H. Environmental Compliance. To the best of Landlord's knowledge and
belief, there are not existing violations of any federal, state and local
environmental laws and regulations and any amendments thereto including, but not
limited to, the Comprehensive Environmental Response Compensation and Liability
Act of 1980, the Superfund Amendments and Reauthorization Act of 1986, and the
Resource Conservation Recovery Act of 1976. Landlord shall indemnify and hold
Tenant harmless from and against any and all damages, penalties, fines, claims,
liens, suits, liabilities, cost (including cleaning-up costs), judgments and
expenses (including, but not limited to, attorneys', consultants' and experts'
fees and expenses) of any kind and nature suffered by or asserted against Tenant
as a direct or indirect result of any preexisting condition prior to the
occupancy of said premises by Tenant or as a direct or indirect result of any
condition or violation taking place after the termination of the lease term or
Tenant's occupancy of the property. The foregoing indemnification shall survive
the expiration or termination of the lease term.
I. Increased Insurance Rates. Notwithstanding anything contained herein to
the contrary, Tenant shall not be liable for any increase in insurance rates on
the leased premises due to Tenant's initial occupancy thereof for the uses
specified herein. Additionally, Landlord acknowledges and agrees that the
proposed use does not require the physical presence of employees of Tenant at
the leased premises during normal working hours, since Tenant's use as a
warehouse facility will require the physical presence of Tenant's employees only
during times of deliveries to or from the facility. Landlord represents and
warrants that the demised premises are designed for and adequate for the use by
Tenant as a warehouse for materials used in the production of carpet.
J. Taxes. Landlord agrees to pay ad valorem property taxes assessed.
K. Consents. Each party agrees that to the extent any acquiescence,
consent or agreement herein is permitted or required, such acquiescence, consent
or agreement should not be unreasonably withheld, delayed or denied.
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