Exhibit 10.1

 

LEASE AGREEMENT

 

THIS LEASE AGREEMENT is made as of this 11th day of June, 2004, between C.
Presley Properties, LLC, a North Carolina limited liability company (“Landlord”)
and Bradington-Young, LLC, a Virginia limited liability company (“Tenant”).

 

Premises:

  That portion of the Building, containing approximately 33,500 rentable square
feet, as shown outlined in bold lines on Exhibit A

Building:

  900 West Academy, Cherryville, NC and the interior and exterior common areas

Lease Term:

  Beginning on the Commencement Date and ending on the last day of the 12th full
calendar month thereafter.

Commencement Date:

  July 1, 2004

Monthly Base Rent:

   

Months

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   Monthly Base Rent

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1 – 12

   $ 4,800.00

 

Broker:                          

  Fraley Brothers & Co. (John L. Fraley, Jr.)

Addenda:

  Exhibit A (Floor Plan of Building)

 

1. Granting Clause. In consideration of the obligation of Tenant to pay rent as
herein provided and in consideration of the other terms, covenants, and
conditions hereof, Landlord leases to Tenant, and Tenant leases from Landlord,
the Premises and the right to use the common areas, to have and to hold for the
Lease Term, subject to the terms, covenants and conditions of this Lease.

 

2. Acceptance of Premises. Prior to Tenant’s acceptance of the Premises, the
following Tenant Improvements shall be completed by the Landlord, at Landlord’s
expense, in compliance with all applicable laws, ordinances and regulations:

 

  (a) Security System. Landlord shall separate the existing security system for
the Building so that Tenant shall have a separate operating security system with
its own control panel for the Premises.

 

In addition to Landlord’s work to be performed by Landlord as described above,
Tenant shall perform the work necessary to secure the Premises from access by
other parts of the Building and the common areas. Landlord shall reimburse
Tenant for the costs of all materials associated therewith by rent credit and
Tenant shall provide copies of receipts to Landlord. The estimated cost of the
material will be mutually agreed upon.

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3. Use. The Premises shall be used as a general supply warehouse, or for any
other purpose consistent with the business of Tenant and/or for general and
administrative office purposes. Tenant will use the Premises in a safe manner
and will not commit material waste, overload the floor or structure of the
Premises or subject the Premises to use that would reasonably be expected to
damage the Premises.

 

4. Base Rent. Tenant shall pay Base Rent from the Commencement Date in the
amount set forth above. The first month’s Base Rent shall be due and payable on
the Commencement Date, and Tenant promises to pay to Landlord in advance,
monthly installments of Base Rent on or before the first day of each calendar
month succeeding the Commencement Date. Payments of Base Rent for any fractional
calendar month shall be prorated.

 

5. Option to Lease Additional Space. Tenant shall have the option to lease one
or both of the following spaces:

 

  (a) that certain space designated “automatic equipment” and “central sewing”
which is shown hatched on Exhibit A; and

 

  (b) that certain space designated “central sewing” which is shown cross
hatched on Exhibit A.

 

Tenant’s option to lease each such space shall be exercised by giving thirty
(30) days prior written notice to Landlord, and the rental rate for such space
shall be $1.50 per square foot per year.

 

6. Utilities. Landlord shall pay for all water, gas, electricity, heat, light,
power, telephone, sewer, sprinkler services, refuse and trash collection, and
other utilities and services used on the Premises, all maintenance charges for
utilities, and any storm sewer charges or other similar charges for utilities
imposed by any governmental entity or utility provider, together with any taxes,
penalties, surcharges or the like pertaining to Tenant’s use of the Premises. In
the event that Tenant elects to heat the Premises, Tenant shall reimburse
Landlord for an equitable portion of Landlord’s natural gas expenses, to be
determined by considering the size of the Premises relative to the size of the
Building, on an equitable basis.

 

7. Taxes. Landlord shall pay all taxes, assessments and governmental charges
(collectively referred to as “Taxes”) that accrue against the Building during
the Lease Term. Tenant shall be liable for all taxes levied or assessed against
any personal property or fixtures placed in the Premises and belonging to
Tenant, whether levied or assessed against Landlord or Tenant.

 

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8. Insurance. Landlord shall maintain the following insurance policies in full
force and effect for the term of this Lease:

 

(a) A Commercial General Liability policy endorsed to include Tenant as
additional insured, (a) providing that in the event of any cancellation or
material change in coverage, notice will be given at least 30 days in advance to
Tenant, and (b) the amount of the policy will be $1,000,000 General Liability
and $2,000,000 Umbrella.

 

(b) An All-Risk property policy including fire and extended coverage to protect
the Building and all Common Areas contained therein, insured in the amount of
$900,000.

 

Landlord shall, at its sole expense, keep in force policies or insurance in the
amounts as specified and as required by statute with reputable carriers
authorized to do business in North Carolina. Landlord shall provide Tenant with
required certificates of insurance prior to the commencement of said Lease and
renewal certificates within ten days of expiration or non-renewal of the
policies required herein, as long as this Lease is in effect; in the
“Cancellation Clause” the certificate should provide that: in the event of
non-renewal of policies, cancellation or material change in the coverage
provided, thirty (30) days prior written notice will be furnished to Tenant
prior to the date of non-renewal, cancellation or change.

 

Tenant, at its expense, shall maintain during the Lease Term: all risk property
insurance covering the full replacement cost of all property and improvements
installed or placed in the Premises by Tenant at Tenant’s expense; worker’s
compensation insurance with no less than the minimum limits required by law;
employer’s liability insurance with such limits as required by law; and
commercial liability insurance, with a minimum limit of $3,000,000 per
occurrence for property damage, personal injuries, or deaths of persons
occurring in or about the Premises. The commercial liability policies shall
include Landlord as an additional insured. In the event of cancellation or
non-renewal of a policy or policies, Landlord shall be notified within 30 days.
Certificates shall be delivered to Landlord by Tenant upon commencement of the
Lease Term and upon each renewal of said insurance.

 

9. Landlord’s Responsibilities. Landlord shall maintain and repair the roof, at
its expense and the structural elements of the Building.

 

Landlord shall furnish the following services to the Premises: men’s and women’s
restrooms in the area designated “Office” on Exhibit A, in common with other
tenants of the Building. Landlord shall provide sufficient electricity to the
Premises to allow for the normal business operations of Tenant at all times.

 

In the event of (i) any interruption of essential service (i.e. water,
electricity, heating, lighting or plumbing service) for a period greater than
three (3) days, (ii) the cause of such interruption is not the result of any
negligent act or willful misconduct on the part of Tenant and (iii) such
interruption renders the Premises

 

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functionally unusable, effective as of the fourth (4th) consecutive day, one
hundred percent (100%) of the rent of the Premises then currently payable
hereunder shall abate until such time as the Premises are again functionally
usable. Prorated.

 

10. Tenant’s Maintenance. Tenant, at its expense, shall maintain in good
condition all doors, door closures, and glass of the Premises and shall keep
reasonably clean all areas exclusively serving the Premises including, without
limitation, dock and loading areas, windows, interior walls, and the interior
side of demising walls located in the Premises.

 

11. Tenant-Made Alterations and Trade Fixtures. Any alterations, additions, or
improvements made by or on behalf of Tenant to the Premises, except for those
made by Landlord for Tenant and except for Minor Alterations, (“Tenant-Made
Alterations”) shall be subject to Landlord’s prior written consent, which
consent shall not be unreasonably withheld, conditioned or delayed. The term
“Minor Alterations” herein shall mean any alteration, addition or improvements
to the Premises that do not (i) affect the mechanical, electrical, HVAC or other
Building operating systems, (ii) affect the structural components of the
Building or require penetration of the floor or ceiling of the Premises or (iii)
cost more than $10,000 in any one instance. All Tenant-Made Alterations shall be
constructed in a good and workmanlike manner by contractors reasonably
acceptable to Landlord and only good grades of materials shall be used. Upon
surrender of the Premises, all Tenant-Made Alterations and any leasehold
improvements constructed by Landlord or Tenant shall remain on the Premises as
Landlord’s property, except to the extent Landlord requires removal at Tenant’s
expense of any such items or Landlord and Tenant have otherwise agreed in
writing in connection with Landlord’s consent to any Tenant-Made Alterations.
Tenant shall repair any damage caused by such removal.

 

Tenant, at its own cost and expense and without Landlord’s prior approval, may
erect such shelves, bins, machinery, and trade fixtures (collectively “Trade
Fixtures”) in the ordinary course of its business provided that such items do
not alter the basic structural character of the Premises, do not overload or
damage the Premises, and may be removed without material injury to the Premises,
and the construction, erection, and installation thereof complies with all Legal
Requirements. When Tenant vacates the Premises, Tenant shall remove its Trade
Fixtures and shall repair any damage caused by such removal.

 

12. Signs. Upon approval of the landlord, tenant shall have the right to install
such signs as may be reasonably necessary for proper identification of its
Premises on the exterior of the Building and within the common areas. Upon
surrender or vacation of the Premises, Tenant shall remove all of Tenant’s signs
and repair all damage caused by such removal.

 

13. Parking. Tenant shall be entitled to park in common with other tenants of
the Building in those areas designated for parking of automobiles. Landlord will
not allow any parking in front of the loading dock serving the Premises.

 

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14. Restoration. If at any time during the Lease Term the Premises are damaged
by a fire or other casualty, Landlord shall notify Tenant within thirty (30)
days after the date of such damage as to the amount of time Landlord reasonably
estimates it will take to restore the Premises. If the Building is substantially
destroyed or if the restoration time is estimated to exceed three (3) months,
either Landlord or Tenant may elect to terminate this Lease upon notice to the
other party given no later than thirty (30) days after Landlord’s notice. If
neither party elects to terminate this Lease or if Landlord estimates that
restoration will take three (3) months or less, then, Landlord, at Landlord’s
expense, shall promptly restore the Premises to substantially the same condition
as the Premises existed prior to such fire or other casualty, including the
improvements installed by Tenant or by Landlord and paid by Tenant. Base Rent
shall be abated for the period of repair and restoration in the proportion which
the area of the Premises, if any, which is not usable by Tenant bears to the
total area of the Premises; provided, however, if the Premises are substantially
destroyed, then Base Rent shall be abated completely for the period of repair
and restoration.

 

In the event Landlord undertakes reconstruction or restoration of the Premises
pursuant to the paragraph above, Landlord shall use reasonable diligence on
completing such reconstruction repairs, but in the event Landlord fails to
substantially complete the repairs within one hundred eighty (180) days after
the date of the fire or other casualty, then Tenant may, at its option,
terminate this Lease as of a date ten (10) days after receipt of its notice by
Landlord upon giving Landlord notice to that effect, and Base Rent shall be
apportioned as of said date and Landlord shall promptly return any money owed to
Tenant.

 

15. Condemnation. If any part of the Premises or the Building should be taken
for any public or quasi-public use under governmental law, ordinance, or
regulation, or by right of eminent domain, or by private purchase in lieu
thereof (a “Taking” or “Taken”), and the Taking would, in Tenant’s judgment,
prevent or materially interfere with Tenant’s use of the Premises or in
Landlord’s judgment would materially interfere with or impair its ownership or
operation of the Building, then upon written notice by Landlord or Tenant this
Lease shall terminate. Base Rent shall be apportioned as of the date of Taking,
and Landlord shall promptly return any money owed to Tenant. If part of the
Premises shall be Taken, and this Lease is not terminated as provided above, the
Base Rent and the Operating Expenses payable hereunder during the unexpired
Lease Term shall be reduced to such extent as may be fair and reasonable under
the circumstances. This Lease shall automatically terminate as to the portion of
the Premises Taken as of the date of such Taking. Tenant shall have the right to
make a separate claim against the condemning authority for such compensation as
may be separately awarded or recoverable by Tenant for moving expenses and
damage to Tenant’s Trade Fixtures, if a separate award for such items is made to
Tenant.

 

16. Assignment and Subletting. Without Landlord’s prior written consent, which
consent shall not be unreasonably withheld, conditioned or delayed,

 

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Tenant shall not assign this Lease or sublease the Premises or any part thereof.
Notwithstanding the above, Tenant may assign or sublet the Premises, or any part
thereof, to any entity controlling Tenant, controlled by Tenant, under common
control with Tenant or any chapter or regional office of Tenant (a “Tenant
Affiliate”), without the prior written consent of Landlord.

 

17. Indemnification. Each party (the “Indemnifying Party”), except for the
negligence of the other party (the “Indemnified Party”), its agents or
employees, and to the extent permitted by law, agrees to indemnify, defend and
hold harmless the Indemnified Party, and the Indemnified Party’s agents and
employees, from and against losses, liabilities, damages, costs and expenses
(including reasonable attorneys’ fees) arising from claims by third parties for
bodily injury and damage or death occurring in or about the Building and arising
from the use and occupancy of the Building or from any activity, work, or thing
done, permitted or suffered by the Indemnifying Party in or about the Building
or due to any other act or omission of the Indemnifying Party, its employees and
agents.

 

18. Inspection and Access. Landlord and its agents, representatives, and
contractors may enter the Premises upon at least twenty four (24) hours prior
written notice to Tenant to inspect the Premises and to make such repairs as may
be required or permitted pursuant to this Lease and for any other business
purpose provided that such repairs or visits do not unreasonably interfere with
or materially disrupt Tenant’s use and occupancy of the Premises or the Building
or the normal operation of Tenant’s business in the Premises. Any such persons
entering the Premises must be accompanied by Tenant.

 

19. Quiet Enjoyment. If Tenant shall perform all of the covenants and agreements
herein required to be performed by Tenant, Tenant shall, subject to the terms of
this Lease, at all times during the Lease Term, have peaceful and quiet
enjoyment of the Premises free from interference and against any person claiming
by, through or under Landlord.

 

20. Surrender. Upon termination of the Lease Term or earlier termination of
Tenant’s right of possession, Tenant shall surrender the Premises to Landlord in
substantially the same condition as received, broom clean, ordinary wear and
tear and casualty loss and condemnation excepted.

 

21. Holding Over. If Tenant retains possession of the Premises after the
termination of the Lease Term, unless otherwise agreed in writing, such
possession shall be a month to month tenancy upon the same terms and conditions
as during the initial term of this Lease, except that such month to month
tenancy may be terminated by either Landlord or Tenant by giving at least sixty
(60) days prior written notice of termination to the other party.

 

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22. Events of Default. Each of the following events shall be an event of default
(“Event of Default”) by Tenant under this Lease:

 

(i) Tenant shall fail to pay any installment of Base Rent or any other payment
required herein when due, and such failure shall continue for a period of
fourteen (14) days from the date of Tenant’s receipt of Landlord’s written
notice that such payment was due.

 

(ii) Tenant shall fail to comply with any other provision of this Lease, and
except as otherwise expressly provided herein, such default shall continue for
more than thirty (30) days after the date of Tenant’s receipt of Landlord’s
written notice of such default; provided, however, that if such default cannot
reasonably be cured within such thirty (30) day period and Tenant has commenced
and is making diligent efforts to cure such default, then Tenant shall have an
additional ninety (90) days to cure such default.

 

23. Landlord’s Remedies. Upon each occurrence of an Event of Default and so long
as such Event of Default shall be continuing, Landlord may at any time
thereafter terminate this Lease or Tenant’s right of possession, and/or pursue
any other remedies at law or in equity. Upon the termination of this Lease or
termination of Tenant’s right of possession, it shall be lawful for Landlord to
re-enter the Premises by summary dispossession proceedings and to remove Tenant
and all persons and property therefrom. If Landlord terminates Tenant’s right of
possession (but not this Lease), Landlord shall use commercially reasonable
efforts to mitigate damages, including efforts to relet the Premises for the
account of Tenant for such rent and upon such terms as shall be reasonably
satisfactory to Landlord.

 

24. Tenant’s Remedies/Limitation of Liability. Except for emergencies, in which
case Landlord must make immediate repairs, Landlord shall not be in default
hereunder unless Landlord fails to perform any of its obligations hereunder
within thirty (30) days after written notice from Tenant specifying such failure
(unless such performance will, due to the nature of the obligation, require a
period of time in excess of 30 days, then after such period of time as is
reasonably necessary not to exceed ninety (90) days as long as Landlord
commences the cure within the thirty (30) day period and thereafter diligently
pursues the cure to completion). Notwithstanding the foregoing, in the event
Landlord has not cured such default, Tenant shall have the right to (i)
terminate this Lease, (ii) withhold any monies payable to Landlord hereunder, or
(iii) commence to cure the default itself and recover the costs thereof by
offset against rent, or (iv) bring an action at law to redress its grievances.
Any and all remedies set forth in this Lease: (i) shall be in addition to any
and all other remedies Tenant may have at law or in equity; (ii) shall be
cumulative; and (iii) may be pursued successively or concurrently as Tenant may
elect. The exercise of any remedy by Tenant shall not be deemed an election of
remedies or preclude Tenant from exercising any other remedies in the future.

 

25. Environmental Requirements. Landlord states that to the best of its
knowledge the Building and the common areas are free of Hazardous Material
actionable pursuant to any Environmental Requirements. Tenant shall not permit
or

 

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cause any party to bring any Hazardous Material upon the Premises or transport,
store, use, generate, manufacture or release any Hazardous Material in or about
the Premises in violation of any applicable Environmental Requirements. The term
“Environmental Requirements” means all applicable present and future statutes,
regulations, ordinances, rules, codes, judgments, orders or other similar
enactments of any governmental authority or agency regulating or relating to
health, safety, or environmental conditions. The term “Hazardous Materials”
means and includes any substance, material, waste, pollutant, or contaminant
listed or defined as hazardous or toxic, under any Environmental Requirements,
asbestos and petroleum, including crude oil or any fraction thereof, natural
gas, or synthetic gas usable for fuel (or mixtures of natural gas and such
synthetic gas).

 

26. Option to Purchase. ITenant shall have an option to purchase the building
and land for the sum of $800,000. A 60 day notice will be required to exercise
this option.

 

27. Entire Agreement. This Lease constitutes the complete and entire agreement
of Landlord and Tenant with respect to the subject matter hereof. No
representations, inducements, promises or agreements, oral or written, have been
made by Landlord or Tenant, or anyone acting on behalf of Landlord or Tenant,
which are not contained herein, and any prior agreements, promises,
negotiations, or representations are superseded by this Lease. This Lease may
not be amended except by an instrument in writing signed by both parties hereto.

 

28. Severability. If any clause or provision of this Lease is illegal, invalid
or unenforceable under present or future laws, then and in that event, it is the
intention of the parties hereto that the remainder of this Lease shall not be
affected thereby. It is also the intention of the parties to this Lease that in
lieu of each clause or provision of this Lease that is illegal, invalid or
unenforceable, there be added, as a part of this Lease, a clause or provision as
similar in terms to such illegal, invalid or unenforceable clause or provision
as may be possible and be legal, valid and enforceable.

 

29. Brokers. Tenant represents and warrants that it has dealt with no broker,
agent or other person in connection with this transaction and that no broker,
agent or other person brought about this transaction, other than the broker, if
any, set forth on the first page of this Lease, who shall be paid a commission
by Landlord pursuant to a separate agreement.

 

30. Miscellaneous. (a) Any payments or charges due from Tenant to Landlord
hereunder shall be considered rent for all purposes of this Lease.

 

(a) All notices required or permitted to be given under this Lease shall be in
writing and shall be sent by registered or certified mail, return receipt
requested, or by a reputable national overnight courier service, postage
prepaid, or by hand delivery and, if to Tenant, addressed to Tenant at the
following address:

 

Bradington-Young, LLC

920 E. First Street

P. O. Box 487

Cherryville, NC 28021

Attention: Ben S. Causey

 

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and if to Landlord, addressed to Landlord at

C. Presley Properties, LLC

1316 Dilworth Road

Charlotte, NC 28203

 

Either party may by notice given aforesaid change its address for all subsequent
notices. Except where otherwise expressly provided to the contrary, notice shall
be deemed given upon delivery.

 

(b) Words of any gender used in this Lease shall be held and construed to
include any other gender, and words in the singular number shall be held to
include the plural, unless the context otherwise requires. The captions inserted
in this Lease are for convenience only and in no way define, limit or otherwise
describe the scope or intent of this Lease, or any provision hereof, or in any
way affect the interpretation of this Lease.

 

(c) All exhibits and addenda attached hereto are hereby incorporated into this
Lease and made a part hereof. In the event of any conflict between such exhibits
or addenda and the terms of this Lease, such exhibits or addenda shall control.

 

[Signature page follows]

 

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IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the day
and year first above written.

 

TENANT: BRADINGTON-YOUNG, LLC By:  

/s/ Ben S. Causey

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Name:   Ben S. Causey Title:   VP Finance & Administration LANDLORD: C. PRESLEY
PROPERTIES, LLC By:  

/s/ Clay Presley

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Name:   Clay Presley Title:   President

 

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EXHIBIT A

 

Floor Plan of Building

 

/Diagram Inserted Here/

 

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