EXHIBIT 10.1

 

LEASE

 

THIS AGREEMENT OF LEASE, made on the 2nd day of September, 2003 by and between
Commonwealth Blvd Associates, LLC, a Virginia Limited Liability Company
(hereinafter “Lessor”), party of the first part, and Hooker Furniture
Incorporated, a Virginia Corporation (hereinafter “Lessee”), party of the second
part:

 

WITNESSETH:

 

That for and in consideration of the covenants and agreements hereinafter
contained, Lessor does hereby let and demise unto Lessee the hereinafter
described Premises:

 

1. DESCRIPTION OF PREMISES: That certain portion of property (as described
below) which is the bottom floor of the main building, and consists of
approximately 165,360 square feet of that certain real property and
approximately 43,280 square feet of the 4th floor of the main building,
including all improvements therein or to be provided by Lessor under the terms
of this Lease, and located at 101 Commonwealth Boulevard, Martinsville,
Virginia, and generally described as the warehouse buildings of masonry and bar
joist construction containing up to approximately 845,990 square feet
(“Premises”).

 

2. TERM: The term of this lease shall commence on or before the 1st day of
September, 2003 and shall terminate February 29, 2004. Lessee shall have the
option to extend the lease to August 31, 2004, upon 30 days notice prior to the
termination, unless Lessor has notified Lessee of the withdrawal of this option
with 45 days prior notice. Notwithstanding the foregoing, Lessee shall have the
right to return the 4th floor space to Lessor at any time during the term of the
Lease upon two (2) weeks notice and shall thereafter have no further rental
obligation for the 4th floor space. Moreover, should Lessee reduce its space as
contemplated above, contemporaneous with the Base Rent reduction, Lessee’s share
of the utilities covered in paragraph 4 shall be reduced to 19%.

 

3. RENTAL: Lessee covenants and agrees to pay to Lessor as rental for the bottom
floor $0.15 per square foot per month and $0.10 per square foot per month for
the 4th floor which represents Base Rent. The fixed monthly rentals shall be
payable in advance on the first day of each month during the term of this lease.

 

4. UTILITIES: Lessor shall provide and pay for all water, sewage, gas, fuel for
temporary heaters and electrical charges used upon the Premises. Lessee agrees
to pay 25% of all such bills for the term of the Lease and any extension, based
on the proration of the premises being leased versus the entire premises.

 

5. TAXES: Any type of inventory tax which may be levied by governmental bodies
is to be paid by Lessee.

 

6. RIGHT OF ENTRY: Lessor, its agents, employees, and contractors shall have the
right to enter into the Premises at any time, in the case of an emergency, and
otherwise at reasonable times, subject to a twenty-four hour prior notice to
Lessee with the consent of Lessee which shall not unreasonably be withheld.

 

7. LIABILITY: (a) Lessee shall defend, pay, indemnify and save harmless Lessor
from and against any and all claims, demands, suits, actions, proceedings,
orders, decrees and judgments of any kind or nature by or in favor of anyone
whomsoever and from and against any and all costs and expenses, including
reasonable attorneys’ fees, resulting from or in connection with loss of life,
bodily or personal injury or property damage arising, directly or indirectly,
out of or from or on account of any occurrence in, upon, at or from the Premises
and occasioned wholly or in part through the use and occupancy of the Premises
and solely by any act, omission or negligence of Lessee or any subtenant,
concessionaire or licensee of Lessee or their respective employees, agents,
contractors, servants,

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licensees or invitees in, upon, at or from the Premises or any part of the
warehouse buildings.

 

  (b) To the extent Lessee is not insured or required to be insured pursuant to
Paragraph 16.1 of this Lease, and except as otherwise provided in this lease,
Lessor shall defend, pay, indemnify and save harmless Lessee from and against
any and all claims, demands, suits, actions, proceedings, orders, decrees and
judgments of any kind or nature by or in favor of anyone whomsoever and from and
against any and all costs and expenses, including reasonable attorneys’ fees,
resulting from or in connection with loss of life, or bodily or personal injury
arising directly out of or from or account of any occurrence in, upon, at or
from the Premises and occasioned solely by any gross negligence or willful
misconduct of Lessor or its employees, agents, contractors, servants, licensees
or invitees (expressly excluding other tenants of the warehouse buildings and
their respective licensees or invitees) in, upon, at or from the Premises.

 

  (c) The provisions of this paragraph 7 shall survive the expiration or sooner
termination of this lease.

 

8. ADDITIONS AND IMPROVEMENTS: Lessee accepts Premises in an “as is” condition.
Notwithstanding any provision in this lease to the contrary, Lessee acknowledges
and agrees that Lessor shall not be responsible or liable at any time for damage
to any property or business of Lessee or those claiming by, under or through
Lessee caused by or resulting from the bursting, breaking, leaking, running,
seeping, overflowing or backing up of water, steam, gas, sewage, snow or ice in
any part of the Premises or caused by or resulting from acts of God or the
elements or any defect or negligence in the occupancy, construction, operation,
renovation or use of the Premises or any improvements adjoining or in the
vicinity of the Premises and/or any equipment, fixtures, machinery, appliances
or apparatus therein. Lessor specifically retains responsibility and liability
for its own acts or omissions that are determined to be an intentional or wanton
act or gross negligence.

 

9. SURRENDER OF PREMISES: Upon the last day of the term of this lease or any
renewal thereof, Lessee shall deliver up and surrender the Premises to Lessor in
good order and repair, reasonable wear and tear and damage to leased Premises
resulting from fire, explosion, the elements, or other casualty, including Act
of God, excepted.

 

10. EMINENT DOMAIN: In the event the Premises or any portion thereof are taken
under the power of eminent domain or the threat of the exercise thereof for any
public or quasi-public use, then Lessee or Lessor may terminate and cancel this
lease by giving of notice, in writing, to the other party by registered or
certified mail, and thereupon both parties shall be released of any further
obligations under this Lease, except as otherwise provided in this lease and
except that the parties shall fulfill all obligations hereunder to be performed
to the date of such termination. In the event this lease is not terminated upon
the condemnation or taking of any portion of the Premises, the rent, following
such taking, shall be reduced by the reasonable sum directly proportionate to
the total rent in such ratio as the value of the part of the Premises condemned
plus damage to the residue shall bear to the value of the entire Premises. It is
understood and agreed that any recovery or award made in connection with such
condemnation shall belong to the Lessor.

 

11. CASUALTY OR DAMAGE TO PREMISES: In the event the improvements of the
Premises or any portion thereof shall, during the term of this lease or any
renewal hereof, be destroyed or damaged by fire, explosion, the elements or
other casualty, including act of God, the Lessee shall give immediate notice
thereof to Lessor, which, except as hereinafter set forth, shall thereupon cause
the damage to be repaired forthwith unless this lease is terminated as
hereinafter provided. If the Premises or any part thereof shall have been
rendered untenantable from the time of damage until the completion of said
repair and restoration, an equitable reduction of the rental during such period
of repair and restoration shall be made until such Premises are so repaired and
again ready for occupancy. However, in the event the improvements upon the
Premises are damaged to the extent of more than fifty percent (50%) of the
replacement cost thereof (as determined by Lessor) either Lessee or Lessor may
elect to terminate this lease within sixty (60) days of the date of such damage
by giving written notice thereof by registered or certified mail to the other
and thereupon this lease shall immediately terminate and Lessor and Lessee shall
have no further obligation hereunder except as otherwise provided in this

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Lease and except that Lessee shall pay rental accrued to the date of damage.

 

12. REMOVAL: It is agreed that upon the termination of this lease, the Lessee
may remove from the Premises equipment which has been installed by it and shall
return Premises to Lessor as provided herein, so long as they are in compliance
with all terms, conditions and covenants of this lease.

 

13. DEFAULT; BREACH; REMEDIES

  13.1. DEFAULT/BREACH: A “Default” is defined as a failure by the Lessee or
Lessor to comply with or perform any of the terms, covenants, conditions or
rules under this lease. A “Breach” is defined as the occurrence of one or more
of the following Defaults, and the failure of Lessee or Lessor to cure such
Default within any applicable grace period. Each of the following events shall
constitute a Breach:

 

  13.1.1. The abandonment of the Premises by Lessee; or the vacating of the
Premises by Lessee without providing a commercially reasonable level of security
or without providing reasonable assurances to minimize potential vandalism.

 

  13.1.2. The failure of Lessee to make any payment of rent or any other
payments required to be made by Lessee hereunder, where such failure continues
for a period of more than five days from the date when the rent or other payment
is due.

 

  13.1.3. The failure of the Lessee to:

  •   Provide reasonable evidence of insurance, or

 

  •   Provide the rescission of an unauthorized assignment or subletting

Where any such failure continues for a period of five (5) days following written
notice to Lessee.

 

  13.1.4. The failure of the Lessee to comply with paragraph 15, where any such
failure continues for a period of fifteen (15) days following written notice to
Lessee; however, such period may be extended from 15 to 30 days in the event:

 

  •   the Lessee officially commences remediation required with regard to
Hazardous Substances within 15 days following written notice to Lessee and
diligently pursues such remediation to completion as quickly as possible; and

 

  •   Lessee notifies and files a plan of remediation with the Lessor and any
necessary 3rd party within 15 days following written notice to Lessee of the
necessity therefor. Notwithstanding any provision in this paragraph 13 to the
contrary, a Breach shall be deemed to have occurred and no notice of Default or
Breach and/or opportunity to cure shall be necessary where immediate action must
be taken in order to prevent damage to property or injury (including death) to
persons, and Lessee shall fail to take such immediate action.

 

  13.1.5. The failure of the Lessee to comply with any other covenant,
condition, term, or provision, where such failure continues for a period of
thirty (30) days following written notice thereof to the Lessee.

 

  13.1.6. The failure of the Lessor to comply with any covenant, condition,
term, or provision, where such failure continues for a period of thirty (30)
days following written notice thereof to the Lessor; provided, however, that
Lessor shall not be in Breach if it shall commence to cure the Default within
the 30-day period and diligently pursues such remediation to completion as
quickly as possible.

 

13.2. REMEDIES:

  13.2.1. Lessor: Upon the occurrence of any Breach, Lessor shall have the
immediate right to re-enter the Premises, either by summary proceedings, by
force or otherwise and to dispossess Lessee and all other occupants therefrom
and remove all property therein and, at Lessor’s

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election, to store such property at the cost and for the account of Lessee, all
without notice of intention to re-enter with or without resort to legal process
(which Lessee hereby expressly waives) and without Lessor being deemed guilty of
trespass or becoming liable for any loss or damage which may be occasioned
thereby. Lessor shall also have the right, at its option, in addition to and not
in limitation of any other right or remedy, to terminate this lease by giving
Lessee three (3) days notice of cancellation. Lessor shall also have the right
to exercise any and all other remedies available to it at law or in equity.
Lessor may recover from Lessee all damages it may sustain by reason of any
Default or Breach, including the cost of recovering the Premises and all fees of
attorneys, experts and consultants. In the event this lease is terminated
pursuant to this paragraph, Lessor shall be entitled to recover from Lessee, as
and for liquidated damages and not as a penalty, an amount equal to the
difference between the rent for the period which otherwise would have
constituted the balance of the term of this lease and the rental value of the
Premises at the time of such election, for such period, both discounted at the
rate of 4% per annum to present worth, all of which shall immediately be due and
payable by Lessee to Lessor. The rights and remedies herein reserved by or
granted to Lessor are distinct, separate and cumulative, and the exercise of any
one of them shall not be deemed to preclude, waive or prejudice Lessor’s right
to exercise any or all others.

 

  13.2.2. Lessee: Upon the occurrence of a Breach, Lessee shall have the
immediate right to exercise its rights and remedies at law or in equity.

 

14. COVENANT TO COMPLY WITH GOVERNMENTAL REQUIREMENTS: The Lessee shall observe
and comply with all laws, rules and regulations applicable to the Premises
and/or operations therein and will exercise reasonable care to keep the Premises
safe for the public. The Lessee shall save the Lessor harmless for any liability
incurred or any penalty, claim, or damage imposed, made or recovered by reason
of the neglect of the Lessee to observe said laws, rules and regulation of the
City of Martinsville, State of Virginia, or the U. S. Government. The provisions
of this paragraph shall survive the expiration or sooner termination of this
lease.

 

15. HAZARDOUS SUBSTANCES:

  15.1. DEFINED: The term “Hazardous Substances” shall include, without
limitation, flammable explosives, radioactive materials, asbestos,
polychlorinated biphenyl (PCBs), chemicals known to cause cancer or reproductive
toxicity, pollutants, contaminants, hazardous wastes, toxic substances or
related materials, petroleum products, and substances declared to be hazardous
or toxic under any law or regulation now or hereafter enacted or promulgated by
any governmental authority.

 

  15.2. LESSEE’S RESTRICTIONS: Lessee shall not cause or permit to occur:

  15.2.1. Any violation of any federal, state, or local law, ordinance, or
regulation now or hereafter enacted, related to environmental conditions on,
under, or about the Premises or the warehouse buildings or arising from Lessee’s
use or occupancy of the Premises, including, but not limited to, soil and ground
water conditions; or

 

  15.2.2. The use, generation, release, manufacturer, refining, production,
processing, storage, or disposal of any “Hazardous Substances” on, under, or
about the Premises or the warehouse buildings, or the transportation to or from
the Premises of any “Hazardous Substances” except that Lessee may use Hazardous
Substances as part of Lessee’s ongoing business, which Lessee agrees it may use
only in compliance with all applicable laws and regulations so long as such use
does not cause or result in a nuisance or in a health or safety hazard to
property or to any occupants of the warehouse buildings or any other properties.
A list of materials used will be provided to Lessor prior to any such use or
storage on the Premises.

 

  15.3. ENVIRONMENTAL CLEAN-UP:

  15.3.1. Lessee shall, at Lessee’s own expense, comply with all laws regulating
the use, generation, storage, transportation, or disposal of “Hazardous
Substances” (“Laws”).

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  15.3.2. Lessee shall, at Lessee’s own expense, make all submissions to,
provide all information required by, and comply with all requirements of all
governmental authorities (the “Authorities”) under the Laws.

 

  15.3.3. Should any Authority or any third party, with lawful authority or
legal right, demand that a cleanup plan be prepared and that a cleanup be
undertaken because of any deposit, spill, discharge, or other release of
“Hazardous Substances” that occurs during the term of this lease, at or from the
Premises, and which arises directly or indirectly, wholly or in part, at any
time from the use or occupancy of the Premises by Lessee or any subtenant,
concessionaire or licensee of Lessee or their respective employees, agents,
contractors, servants, licensees or invitees, then Lessee shall, at Lessee’s own
expense, prepare and submit the required plans and all related bonds and other
financial assurances; and Lessee shall promptly carry out all such cleanup
plans. Lessee is not required to pay for or arrange remediation plans for
incidents that occur as the result of actions or omissions of the Lessor or
Lessor’s employees, agents, contractors or invitees.

 

  15.3.4. Lessee shall promptly provide all information regarding the use,
generation, storage, transportation, or disposal of “Hazardous Substances” that
is requested by Lessor. If Lessee fails to fulfill any duty imposed under this
paragraph 15.3.4 within a reasonable time, Lessor may do so at Lessee’s cost and
expense; and in such case, Lessee shall cooperate with Lessor in order to
prepare all documents Lessor deems necessary or appropriate to determine the
applicability of the laws to the Premises and Lessee’s use thereof, and for
compliance therewith, and Lessee shall execute all documents promptly upon
Lessor’s request. No such action by Lessor and no attempt made by Lessor to
mitigate damages under any law shall constitute a waiver of any of Lessee’s
obligations under this paragraph 15.3.4.

 

  15.3.5. Lessee’s obligations and liabilities under this paragraph 15 shall
survive the expiration of this lease.

 

15.4. INDEMNITY:

  15.4.1. LESSEE’S INDEMNITY: Lessee shall indemnify, defend, hold harmless
Lessor, the manager of the property, and their respective officers, directors,
beneficiaries, shareholders, partners, agents, and employees from all fines,
suits, proceedings, claims, and actions of every kind, and all costs associated
therewith (including attorneys’ and consultants’ fees) arising out of or in any
way connected with any deposit, spill, discharge, or other release of “Hazardous
Substances” that occurs during the term of this Lease, at or from the Premises,
which arises at any time solely from Lessee’s use or occupancy of the Premises,
or from Lessee’s failure to provide all information, make all submissions, and
take all steps required by all authorities under the laws and all other
environmental laws.

 

  15.4.2. LESSOR’S INDEMNITY: Lessor shall indemnify, defend, or hold harmless
Lessee, their respective officers, directors, beneficiaries, shareholders,
partners, agents, and employees from all fines, suits, proceedings, claims, and
actions of every kind, and all costs associated therewith (including attorneys’
and consultants’ fees) arising out of or in any way connected with any deposit,
spill, discharge, or other release of “Hazardous Substances” that occurs during
the term of this Lease, at or from the Premises, which directly arises at any
time solely as the result of the negligence or omissions of the Lessor or
Lessor’s employees, agents, contractors or invitees.

 

  15.4.3. All obligations and liabilities under this paragraph 15.4 shall
survive the expiration of this lease.

 

  15.4.4. Lessee covenants and warrants that it is a duly organized and existing
corporation under the laws of its state of incorporation and is authorized to
enter into this lease.

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  15.4.5. It is the intent of this paragraph 15 that the Lessee will not be
responsible for “Hazardous Substances” or “Incidents” that may have occurred
prior to the Lessee taking occupancy of the Premises under this lease. Lessor
shall indemnify, defend and hold harmless Lessee, and its officers, directors,
beneficiaries, shareholders, partners, agents, and employees from all fines,
suits, procedures, claims, and actions of every kind, and all costs associated
therewith (including attorneys’ and consultants’ fees) arising out of or in any
way connected with any deposit, spill, discharge, or other release of “Hazardous
Substances” that occurred prior to the term of this Lease, at or from the
Premises

 

  15.4.6. To the best of its knowledge, Lessor is not aware of the existence on
the Premises of any reportable levels of Hazardous Substances.

 

16. INSURANCE AND LIABILITIES: Lessee shall indemnify the Lessor against any
expenses, loss or liability paid, suffered or incurred as a result of any breach
by the Lessee, Lessee’s agents, servants or employees, of any covenant or
condition of this lease as a result of Lessee’s use or occupancy of the Premises
or solely by any act, omission, negligence, willful misconduct or criminal act
of the Lessee or Lessee’s agents, servants, employees, contractors, licensees,
invitees, subtenants, successors or assigns.

 

At all times during the lease term:

 

  16.1. Lessee shall carry commercial general liability insurance in the amount
of at least Five Million Dollars ($5,000,000.00) for any occurrence resulting in
injury to or death of one person and consequential damages arising therefrom,
and in the amount of at least Five Million Dollars ($5,000,000.00) for any
occurrence resulting in bodily injury and personal injury to or death of more
than one person and consequential damages arising therefrom and property damage
of One Million Dollars ($1,000,000.00), and coverage endorsements insuring
Lessee’s stock-in-trade, trade fixtures, furniture, furnishings, special
equipment, floor and wall coverings and all other items of personal property of
Lessee located on or within the Premises, such coverage to be in an amount of at
least Ten Million Dollars ($10,000,000.00) for any occurrence. Lessee will be
responsible for carrying insurance to cover the entire value of the property of
the Lessee warehoused in the Premises. Lessee shall also carry workers’
compensation insurance in the amount and limits required by State law. Lessee
shall insure its personal property and fixtures located in the Premises and
Lessor shall have no interest in the proceeds from such insurance. Lessee shall
name the Lessor as an additional insured on the above liability and property
policies. Prior to occupying the Premises, Lessee must furnish Lessor with
Certificates of Insurance evidencing such coverage.

 

  16.2 It is acknowledged that Lessor covers the Premises under a blanket
insurance policy for fire and extended coverage. Lessor agrees to furnish Lessee
with a Certificate of Insurance evidencing such coverage. Lessee shall not do
anything or permit anything to occur or exist which would increase any premiums
for insurance maintained by Lessor.

 

17. EXTERIOR MAINTENANCE: Lessor will maintain the structure and exterior of the
Premises in a safe and tenantable condition and will keep the roof of the
Premises in repair, provided that Lessee shall give Lessor written notice of the
necessity for such maintenance and repairs, and provided that the necessity for
such maintenance or repairs shall not have been caused by any negligence, act,
omission or willful misconduct of Lessee or its employees, agents, contractors,
licensees, invitees, subtenants, successors or assigns, in which event, Lessee
shall be responsible therefor. Lessor is expressly exculpated from any damage,
caused to Lessee’s fixtures, inventory, and/or decor caused by leakage of pipes
or leakage from roof, except for damaged caused by Lessor’s intentional act or
gross negligence. For the Premises hereunder being leased to Lessee, Lessee
agrees to keep same neat and orderly, to maintain the landscaping and parking
areas, to keep snow removed, and provide security.

 

18. INTERIOR MAINTENANCE: Lessee will keep the interior of the Premises,
together with all electrical, plumbing, sprinkler and other mechanical
installations, therein in good order and repair at its own expense, provided,
however, Lessor shall be responsible to pay for elevator repairs if the need for

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such repair(s) is a result of the age of the equipment and not the negligent
act, omission or wilful misconduct of Lessee or its employees, agents,
contractors, servants, licensees, invitees, subtenants, successors or assigns
With respect to any maintenance or repairs for which Lessor is responsible under
this lease, Lessor shall promptly commence and/or continue necessary maintenance
and repairs to the facility upon receipt of written notice of the necessity for
such maintenance or repairs. Lessee will surrender the Premises at the
expiration of the term or at such other time as it may vacate in as good
condition as when received, excepting depreciation caused by ordinary wear and
tear and damage by unavoidable accident or act of God. Lessee will not overload
the electrical wiring serving the Premises or within the Premises, and will
install at its own expense, but only after obtaining Lessor’s written approval,
any additional electrical wiring which may be required in connection with
Lessee’s apparatus.

 

19. COMMON AREAS:

 

  19.1. Lessor grants to Lessee and Lessee’s customers and invitees the right to
use, in common with all others to whom Lessor has or may hereafter grant rights
to use the same, the Common Areas. The term “Common Areas” as used in this
Lease, shall mean the parking areas, roadways, pedestrian sidewalks, driveways,
sidewalks, delivery areas, trash removal areas, landscaped areas, security
areas, public washrooms and all other common areas or improvements which may be
provided by Lessor for the common use. Lessor hereby reserves the following
rights with respect to the Common Areas:

 

  19.1.1. To establish reasonable rules and regulations for the use thereof;

 

  19.1.2. To use or permit the use of such Common Areas by others to whom Lessor
may grant or may have granted such rights in such manner as Lessor may from time
to time designate;

 

  19.1.3. To close all or any portion thereof as may be deemed necessary by
Lessor to make repairs or changes, to prevent a dedication thereof or the
accrual of any rights to any person or the public therein, or to discourage
non-customer use or parking;

 

  19.1.4. To change the layout of such Common Areas, including the right to
reasonably add to or subtract from their shape and size, whether by the addition
of building improvements or otherwise; and

 

  19.1.5. To do such other acts in and to the Common Areas as in Lessor’s
judgement may be desirable.

 

20. ALTERATIONS BY LESSEE: Lessee will not alter or improve the Premises and
will not make any structural or nonstructural alterations to the Premises or any
part thereof without first obtaining Lessor’s written approval of such
alterations, in Lessor’s sole discretion. Lessee further will not, except for
the installation of trade fixtures, cut or drill into or secure any fixtures,
apparatus or equipment of any kind to any part of the Premises without first
obtaining Lessor’s written consent, in Lessor’s sole discretion.

 

21. USE OF PREMISES: The Premises shall be used by Lessee solely for the purpose
of conducting therein the business of general warehouse and repair operations
and for no other purpose. Lessee shall not use the Premises for any other
purpose without the written consent of the Lessor, in Lessor’s sole discretion.

 

22. SIGNS AND ADVERTISING: Lessee will not place or suffer to be placed or
maintained on the exterior of the Premises any sign, advertising matter or other
thing of any kind, and will not place or maintain any decoration, lettering or
advertising matter on the glass of any window or door of the leased Premises
without first obtaining Lessor’s written approval thereof; and Lessee further
agrees to maintain such sign, decoration, lettering, advertising matter or other
thing as may be approved in good condition and repair at all times.

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23. NO ASSIGNMENTS OR SUB-LETTING:

 

  23.1. GENERALLY: Lessee will not assign this lease in whole or in part, nor
sublet all or any part of the Premises, nor license concessions or leased
departments therein, without the written consent of Lessor first obtained. Such
written consent of Lessor shall not be unreasonably withheld. Consent by Lessor
to any assignment or subletting shall not constitute a waiver of the necessity
for such consent to any subsequent assignment or subletting. This prohibition
against assigning or subletting shall be construed to include a prohibition
against any assignment or subletting by operation of law.

 

  23.2. TRANSFER OF PREMIUMS: One hundred percent (100%) of any sums or other
economic consideration received by Lessee as a result of any assignment or
subletting entered into pursuant to this Paragraph, however denominated under
the assignment or lease, which exceed, in the aggregate (a) the total sums which
Lessee is obligated to pay Lessor under this Lease, plus (b) (i) reasonable real
estate brokerage commissions or fees payable by Lessee in connection with such
assignment or subletting, and (ii) the reasonable fees of attorneys, shall be
paid by the Lessee to the Lessor as additional rent under this Lease without
affecting or reducing any other obligations of the Lessee hereunder.

 

24. LEGAL NOTICES: Whenever such notice shall or may be given to either of the
parties by the other, each such notice shall be sent by registered or certified
mail addressed as follows:

 

Lessor: George W. Lester, II, Manager,

Commonwealth Blvd Associates, LLC, 14 E. Liberty

Street, Martinsville, VA 24112

 

Lessee: Hooker Furniture Incorporated

Attn: E. Larry Ryder

HOOKER FURNITURE CORPORATION

Post Office Box 4708

Martinsville, Virginia 24115

With a Copy to: Monroe H. Ridenhour, III, Vice

President, Lester Development Corp., 14 E. Liberty

Street, Martinsville, VA 24112

 

With a Copy to: John L. Gregory, III

Young, Haskins, Mann, Gregory & Smith, P.C.

Post Office Box 72

Martinsville, Virginia 24114

 

26. QUIET ENJOYMENT: Provided that no Breach exists, Lessor warrants that Lessee
shall have peaceful possession and quiet enjoyment of the Premises during the
term of this lease and, to the best of Lessor’s knowledge, there are no pending
suits, proposed ordinances or other laws or regulations which would prohibit or
in any manner restrict use of the Premises by Lessee for its stated use.

 

27. SEVERABILITY: If any term or provision of this lease or an application
thereof shall be invalid or unenforceable, the remaining terms and provisions of
this lease and any other application of such terms or provisions shall not be
affected thereby. Each term and provision which shall be valid and enforceable
shall be utilized to the highest extent permitted by law.

 

This agreement shall be binding upon and shall inure to the benefit of the
parties, their successors and assigns.

 

IN WITNESS WHEREOF, the said parties hereto have executed this Lease in
duplicate, one of which is retained by each of said parties, as of the day and
year first written above.

 

LESSOR: Commonwealth Blvd Associates, LLC

     

LESSEE: Hooker Furniture Incorporated

By:   /s/    GEORGE W. LESTER II               By:   /s/    EDWIN L.
RYDER          

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Name:

 

George W. Lester II

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Name:

 

Edwin L. Ryder

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Title:

 

President

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Title:

 

Exec Vice Pres – Finance & Admin

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ACKNOWLEDGMENT OF CORPORATE LESSOR

 

STATE OF VIRGINIA

CITY OF MARTINSVILLE, TO WIT:

 

I, /s/ Janet M. Decker, a Notary Public in and for the state aforesaid, do
certify that /s/ George W. Lester, II whose name is signed to the foregoing
instrument, bearing date on the 2nd day of September, 2003 has acknowledged the
same before me in my City and State aforesaid. Given under my hand and seal this
16th day of September, 2003.

 

/s/    JANET M. DECKER                

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        Notary Public       [SEAL APPEARS HERE]

 

My Commission Expires: March 31, 2004

 

ACKNOWLEDGMENT OF CORPORATE LESSEE

 

STATE OF VIRGINIA

 

CITY/COUNTY OF Henry

 

I, /s/ Jill W. Brown, a Notary Public in and for the state aforesaid, do certify
that /s/ Edwin L. Ryder whose name is signed to the foregoing instrument,
bearing date on the 12th day of September, 2003 has acknowledged the same before
me in my City and State aforesaid. Given under my hand and seal this 12th day of
September, 2003.

 

/s/    JILL W. BROWN        

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Notary Public

 

My Commission Expires: July 31, 2005

 

[SEAL APPEARS HERE]

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VERIFICATION OF COMMENCEMENT DATE AND LEASE TERM

 

DATE OF LEASE: September 2, 2003

 

Lessor: Commonwealth Blvd Associates, LLC

14 E. Liberty Street

Martinsville, Va 24112

 

Lessee: Hooker Furniture Incorporated

 

COMMENCEMENT DATE: September 1, 2003

 

TERMINATION DATE: February 29, 2004

 

RENT COMMENCEMENT DATE: September 1, 2003

 

The parties above do hereby verify that the above dates are correct and except
for stipulating the dates as aforesaid, this “Verification of Commencement Date
and Lease Term” shall not in any other way modify or amend or supplement said
Lease or any of its provisions as the same are now in force and effect.

 

WHEREOF, the parties have hereunto subscribed their names this 2nd day of
September, 2003

 

LESSOR: Commonwealth Blvd Associates, LLC

     

LESSEE: Hooker Furniture Incorporated

By:   /s/    GEORGE W. LESTER II               By:   /s/    EDWIN L.
RYDER          

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Name:

 

George W. Lester II

--------------------------------------------------------------------------------

     

Name:

 

Edwin L. Ryder

--------------------------------------------------------------------------------

Title:

 

President

--------------------------------------------------------------------------------

     

Title:

 

Exec Vice Pres – Finance & Admin

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