Exhibit 10.1
LEASE OF SPACE IN INTERNATIONAL HOME FURNISHINGS CENTER(R)
IHFC(R): International Home Furnishings Center(R), Inc. LESSEE: Hooker Furniture Corporation
Post Office Box 828 PO Box 4708
High Point, North Carolina 27261 440 E Commonwealth Blvd
Martinsville, Virginia 24115
DESCRIPTION OF PREMISES: Space No W1047 including bays C1003, G1062, G1067,
G1077, H1042, H1043, H1045 and W1041 in the International Home Furnishings
Center(R), High Point, North Carolina.
TERM: 5 Years
COMMENCEMENT DATE: November 1, 2000
EXPIRATION DATE: October 31, 2005
ANNUAL RENTAL: 46,330.00 sq. ft. @ $10.25 per sq. ft. per year $ 474,882.50
ADDITIONAL OR SUPPLEMENTAL TERMS AND PROVISIONS
Addendum A for Hamilton Wing Leases is attached hereto and made a part of this
lease.
This lease supersedes the present lease between the Lessor and Lessee for Space
#W1047, dated August 11, 1999, and such prior lease shall be deemed cancelled.
IHFC(R), by this Agreement, leases to Lessee and Lessee leases from IHFC(R), 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(R) Standard Terms and
Conditions of Lease (IHFC(R) Form No. 900103) which are incorporated by
reference in and made a part of this lease.
IHFC(R) and Lessee have caused this Lease to be executed by their duly
authorized officers, this the 3rd day of August, 2000.
IHFC(R): EXHIBITOR:
International Home Furnishings Center, Inc. Hooker Furniture Corporation
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Complete Formal Business Name
By: /s/ William S. DiPaolo Virginia Corporation
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VICE PRESIDENT LEGAL FORM OF BUSINESS: CORPORATION, PARTNERSHIP
OR INDIVIDUAL AND STATE OF PRINCIPAL OFFICE
By: /s/ Paul B. Toms, Jr.
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NAME TITLE
PRESIDENT, VICE PRESIDENT, GENERAL PARTNER, OWNER
Attest: /s/ Jane S. Lain
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SECRETARY
Attest: /s/ Edwin L. Ryder CORPORATE SEAL
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ASST. SECRETARY IF LESSEE IS A CORPORATION
CORPORATE SEAL
STANDARD TERMS AND CONDITIONS OF LEASE
IHFC(R) FORM NO. 900103
Page 1 of 5
1.0
PREMISES (S)1.1.Description. Lessee acknowledges receipt of a drawing or floor
plan showing the exact location of the Premises in the International
Home Furnishings Center(R) showroom complex owned and operated by
IHFC(R) (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(R) 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(R) that IHFC(R) 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(R) shall
be entitled to relocate Lessee as provided in this section if IHFC(R)
determines that relocation of Lessee is in the best interest of the
Home Furnishings Center in the conduct of its business. IHFC(R) 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(R) and shall be equivalent (as determined by
IHFC(R) in its sole discretion) in size and value to the Premises; (b)
IHFC(R) 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(R) 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(R), Lessee, at its option, may terminate this Lease
by written notice to IHFC(R); (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(R), at its expense,
shall move Lessee's 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
TERM (S)2.1. Commencement and Expiration Date. The Commencement Date 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(R) to new
tenants, prorated on a daily basis.
3.0
RENT (S)3.1. Annual Rental. Lessee shall pay to IHFC(R) without offset or
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(R), 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 commending 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(R) and evaluating the
information theretofore used in determining the CPI shall be used;
(e) IHFC(R) 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
(f) IHFC(R) 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.
Page 2 of 5
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
BY LESSEE purposes to the extent reasonably required for the conduct of such
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(R) has established rules,
regulations guidelines and polices (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(R)
notifies Lessee of any Guidelines established after the date of this
Lease and (b) the Guidelines established by IHFC(R) 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(R).
(S)4.6. Market Dates; Admission. IHFC(R) 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(R) may
restrict admission to accredited buyers and condition admission upon
the presentation of credentials prescribed or provided by IHFC(R).
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(R). IHFC(R) 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(R) under this Lease, and
exhibiting the Premises to prospective mortgagees and tenants.
IHFC(R) 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 Lease
ASSIGNMENT or sublet all or any part of the Premises without Lessor's prior
AND 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(R).
(S)5.2. Subleasing Policy. All proposed subleases which IHFC(R) is
requested to approve pursuant to (S)5.1 must conform to subleasing
policies established by IHFC(R) from time to time, and Lessee
acknowledges and agrees that IHFC's(R) 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(R), the imposition of subleasing fees by IHFC(R), and the
retention by IHFC(R) 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(R) 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 the
AND part of IHFC(R) as to the present or future condition of the
MAINTENANCE Premises except as otherwise specifically provided in this Lease.
(S)6.2. IHFC's(R) Repair Obligations. IHFC(R) shall at IHFC's(R)
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(R) 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.
(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(R) in as
good a condition as when received, reasonable wear and tear and
damage by fire or other casualty excepted.
Page 3 of 5
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(R)
Guidelines, all property of Lessee shall be moved to or from the
Premises by the employees or designated contractors of IHFC(R),
at the expense and risk of Lessee, and Lessee agrees to pay
IHFC(R) upon receipt of IHFC's(R) invoice IHFC's(R) standard
charges for moving such items to and from the Premises. IHFC(R)
shall not be liable for any loss or damage to property of Lessee,
unless caused by the negligence of IHFC(R) 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(R) written consent, which
IHFC(R) 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(R) upon the expiration or termination of this Lease,
unless IHFC(R) 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(R). All contractors performing such work shall
carry insurance satisfactory to IHFC(R) and shall execute lien
waivers, and indemnity agreements satisfactory to IHFC(R).
IHFC(R) shall have no duty to Lessee or anyone else to enforce
these requirements or inspect the work of Lessee's contractors.
8.0
TAXES IHFC(R) agrees to pay all ad valorem taxes and assessments
levied, 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(R) on account of the operation of Lessee's business in the
Premises or on account of property owned by Lessee.
9.0
UTILITIES IHFC(R) agrees to furnish heat, electricity, air conditioning,
and 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(R) 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(R) 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(R) 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(R) 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(R) 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(R) 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(R) or Lessee, or both) neither
IHFC(R) 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(R) or Lessee than
would have existed in its absence.
(S)10.3. Assumption of Risks, Release, and Indemnity. Lessee (1)
assumes all risks with respect to, (2) releases IHFC(R) from
liability for, and (3) agrees (except to the extent IHFC(R) is
effectively protected by insurance) to protect indemnify and save
harmless IHFC(R) from and to defend IHFC(R) (through counsel
acceptable to IHFC(R)) 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 subparagra phs (a) or (b),
above.
Page 4 of 5
(d) Death or personal injury occurring in or about the
Premises (unless resulting from the negligence of IHFC(R) 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 by destroyed 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(R) elects to demolish, or completely rebuild it,
IHFC(R) 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(R) has exercised
its right to terminate, if any, under (S)11.1, IHFC(R) 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(R) 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(R); 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(R), 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(R), 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(R), at its
option and without further notice to Lessee, may pursue any
remedy now or hereafter available to IHFC(R) under the laws of
the State of North Carolina. Without limiting the generality of
the foregoing, IHFC(R) 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(R) in its
sole discretion deems advisable. All rentals received by
IHFC(R) from such reletting shall be applied, first, to
payment of any indebtedness other than rent due from Lessee
to IHFC(R); second, to payment of any expenses of reletting,
including, without limitation, the costs of recovering the
Premises, such 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 IH FC(R). The deficiency shall be calculated
and paid semiannually. No reentry or taking possession of
the Premises by IHFC(R) shall be construed as an election
upon its part to terminate this Lease unless IHFC(R) 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(R) 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(R).
(S)12.3. Late Charges. If any installment of rent or any other
amount due under this Lease is not received by IHFC(R) 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(R)
will incur by reason of late payment by Lessee, the exact amount
of which would be difficult to ascertain. Notification by IHFC(R)
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(R) from exercising any other
remedy.
Page 5 of 5
(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(R) by Lessee,
Lessee hereby grants unto IHFC(R) 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(R) 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(R) 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(R) 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(R) under this Section.
(S)12.5. Partial Payment. IHFC(R) shall not be obligated to
accept partial payments of rent or other charges due under this
Lease. If IHFC(R) accepts any such payment, IHFC(R) 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(R) 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(R)
may exercise any one or more of its remedies on default, and
apply the deposit to any amounts or damages owed IHFC(R) as of
the date IHFC(R) 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(R) of its remedies upon default. The
acceptance of such deposit by IHFC(R) shall be entirely without
prejudice to IHFC's(R) 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(R) 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(R) 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(R), 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(R) to Lessee.
13.0 At the election of IHFC(R), 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(R) 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(R), Lessee
ESTOPPEL agrees to execute, acknowledge and deliver to IHFC(R),
CERTIFICATES Lessee's .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(R) under this Lease, specifying the
nature of any claimed default; and (e) providing such other
information as IHFC(R) may reasonably request with respect to the
status of the Lease. Any such certificate may be conclusively
relied upon by IHFC(R) 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 under
MISCELLANEOUS 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(R) 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(R) 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 Tenth Floor Plan - Wrenn, Green, Commerce and Hamilton Wings
Space No. W1047 plus bays W1041, C1003, G1062, G1067, G1077, H1042, H1043,
H1045 - 46,300 Sq. Ft. appears here.]