EXHIBIT
10DD
LEASE
AGREEMENT
THIS
LEASE ( "
Lease " ) is made this 7th day of May, 2009, by and
between DECORATOR INDUSTRIES, INC., a Pennsylvania corporation ("
Tenant ") with an address at 10011 Pines Boulevard, Suite
201, Pembroke Pines, Florida 33024 and VIKING PROPERTIES,
L.L.C., a Louisiana limited liability company (" Landlord ")
with an address at 348 Aero Drive, Shreveport, LA
71107.
WHEREAS,
pursuant
to that certain Agreement of Purchase and Sale for Property
executed in March, 2009 (" Purchase Agreement ") by and
between Tenant, as seller, and Landlord, as buyer, Landlord
purchased from Tenant that certain real property located in the
City of Bossier, Parish of Bossier, having an address of 4300
Viking Drive, Bossier City, Louisiana 71111; and
WHEREAS,
pursuant
to the Purchase Agreement, Landlord and Tenant have agreed that
Landlord will lease to Tenant, and Tenant will lease from Landlord,
the Premises upon the terms and conditions set forth
herein.
NOW,
THEREFORE ,
in consideration of the mutual covenants and premises contained
herein, the parties hereto, intending to be legally bound, covenant
and agree as follows:
1.
Recitals
.
The parties acknowledge the accuracy of the foregoing
recitals which are incorporated by reference herein and are made a
part of this Lease.
2.
Leased
Property .
Landlord leases to Tenant, and Tenant rents from Landlord,
the real property described on Exhibit "A" attached hereto and made
a part hereof (hereinafter the "Land"), warehouse/ manufacturing
and office building (the "Building"), all related parking areas,
access drives and landscaped areas which is located at 4300 Viking
Drive, Bossier City, Louisiana 71111 (collectively the "
Premises ").
3.
Lease
Term .
The Lease shall have a term of fifteen (15) years (the
"Term") commencing on the date of this Lease Agreement (the
"Commencement Date") and expiring on May 5, 2024 (the "Expiration
Date"). For purposes of this Lease, a Lease year shall
consist of twelve (12) consecutive calendar months commencing on
the Commencement Date.
4.
Use
and Occupancy .
Tenant shall use the Premises for warehouse, manufacturing
and office uses, and for no other purpose(s) without the prior
written consent of Landlord which shall not be unreasonably
withheld, conditioned or delayed. Tenant shall not use the
Building or the Premises for any purpose which is in contravention
of any law, municipal ordinance or regulation. Tenant has
been in possession of the Premises prior to the commencement date,
pursuant to its ownership of the Premises and Tenant hereby accepts
possession of the Premises in its present "AS-IS"
condition.
5.
Rent
.
Tenant
hereby agrees to pay to Landlord, at the address of Landlord
provided herein, or at such other place as Landlord may hereafter
from time to time designate in writing, annual "Base Rent", payable
in monthly installments beginning on the Commencement Date and
continuing for the remainder of the Term, in an amount equal to
Fifty Five Thousand Dollars ($55,000.00) per year [Four Thousand
Five Hundred Eighty Three and 33/100 Dollars ($4,583.33) per
month], increasing by two percent (2.0%) each annum on the
anniversary of the date hereof.
Monthly
installments of Base Rent shall be paid in advance on the first day
of each month during the Term without setoff, deduction or
abatement, except as may be expressly set forth in this Lease.
It is the purpose and intent of Landlord and Tenant that this
Lease shall be absolutely net to Landlord and that Tenant shall
pay, without notice or demand, and without abatement, deduction or
set off, and hold harmless Landlord from and against, all costs,
taxes, insurance premiums and expenses and obligations of every
kind and nature whatsoever relating to the Building or Premises
which may arise or become due during the Term, except as otherwise
expressly set forth in this Lease. In the event any monthly
payment of Base Rent is not received by Landlord within five (5)
days of the due date, Tenant shall pay to Landlord a late fee of
Fifty and 00/100 ($50.00) Dollars per day for each day that such
Base Rent installment remains unpaid, to help defray the additional
costs to Landlord resulting from such late payment. In the
event Tenant delivers any check to Landlord which is not
collectable for any reason, then Tenant agrees to pay to Landlord a
service charge of One Hundred and 00/100 ($100.00) Dollars upon
Landlord's request, in addition to any late charge assessed against
Tenant. Late charges and charges for insufficient funds shall
be in addition to Landlord's other rights and remedies under this
Lease, or at law and shall not be construed as liquidated damages
or limiting Landlord's remedies in any manner.
6.
HVAC;
Tenant's Responsibilities .
Tenant is aware of the condition of the HVAC system serving the
Premises. Tenant represents and warrants that, within sixty
(60) days of the date hereof, the HVAC system serving the Premises
will be serviced by a reputable HVAC contractor and throughout the
Term, Tenant shall, at its sole cost and expense, maintain the HVAC
system in good working order and repair and Tenant further
represents and warrants that the HVAC system shall be in good
working order and repair on the Expiration Date. Tenant
shall, at its sole cost and expense and subject to ordinary wear
and tear, keep and maintain in operating condition and repair in
the manner they have been previously maintained by Tenant, in all
cases to ordinary wear and tear, including replacements if
necessary, all portions of the Building and Premises including the
exterior, structural and interior portions of the Building or the
Premises, including without limitation the roof and windows and
improvements located in the Building, all electrical, mechanical
and plumbing systems for the Building, and any and all systems, and
telecommunication equipment for the Building (including, by way of
example, air conditioners, transformers and plumbing); provided,
however, that Tenant shall not be required to maintain in operating
condition and repair any systems or equipment which it has
installed for its own use and enjoyment upon its election to
discontinue the use thereof, including, but not limited to,
communication and security systems. Upon Landlord's request
Tenant shall remove any such discontinued system or equipment at
the termination of this Lease; provided that Tenant shall not be
required to remove wiring installed within walls. In addition
and subject to the preceding sentence, Tenant shall, at its sole
cost and expense, be responsible for the HVAC system for the
Building, and Tenant agrees, at its own cost and expense, to keep
in effect throughout the entire Term a service contract for the
HVAC system with a reputable HVAC contractor, which HVAC system
shall be inspected and have routine preventative maintenance
performed at least once per year. Tenant also agrees to
maintain the exterior areas of the Premises, including paved and
landscaped areas in a neat and orderly condition and to maintain
the paved areas in operating condition and repair in the manner
that they have been maintained by Tenant subject, in all cases, to
ordinary wear and tear. Landlord has no responsibility for
any cost, repair, maintenance or replacement of any portion of the
Building, Premises, systems or equipment. Tenant acknowledges
and agrees that Tenant is accepting the Building and Premises in
"AS-IS" "WHERE-IS" condition without any representation or warranty
of any kind by Landlord. All repairs and replacements made by
or on behalf of Tenant shall be made in a good and workmanlike
manner, and in accordance with all applicable laws and regulations
of all governmental authorities having jurisdiction over the
Building and Premises. All replacement materials utilized by
Tenant hereunder shall be of an equal quality to the existing
materials currently utilized at the Premises.
7.
Utilities
.
During the Term, Tenant shall pay for all gas, heat, light,
power, water, sewer, telephone or other communication service,
security services, janitorial services, garbage disposal and all
other utilities and services supplied to Tenant at the Premises.
Upon Landlord's request, Tenant agrees to provide Landlord,
on an annual basis, evidence that all municipal water and/or sewer
bills have been paid. Landlord shall not be liable to Tenant
for any loss or damage to Tenant or its property resulting from
burst, stopped or leaking utility lines that are within the
Premises or service the Building, and Landlord shall not be liable
to Tenant for damages or otherwise for any failure or interruption
of any such utility service furnished to the Premises, unless
caused by Landlord's or its employees' or agents' gross negligence
or willful misconduct.
8.
Real
Estate Taxes and Assessments .
Tenant
shall pay all real estate taxes, special assessment installments
and other ad valorem governmental charges of any kind which are
attributable to the Building and Premises during the Term (or
any renewal term)(collectively, the "Taxes"). Landlord shall
forward to Tenant all bills and notices regarding the Taxes upon
receipt. Landlord agrees that Tenant may request the taxing
authorities to send all statements for Taxes directly to Tenant and
further agrees to execute any requests or consents required by the
taxing authorities in connection therewith. Tenant shall pay
all such Taxes prior to the penalty date and shall forward to
Landlord documentation evidencing the payment of all Taxes. In the
event Tenant fails to pay any Taxes by the penalty date, Landlord
shall have the option, but not the obligation, without limiting
Landlord's remedies hereunder, to pay such Taxes and demand Tenant
immediately reimburse Landlord the amount of said Taxes, any
applicable interest or penalties applied by the taxing body, and
additional interest at the rate of ten (10) percent per annum until
reimbursement. In addition, Tenant shall be responsible for
paying any personal property taxes levied against Tenant's personal
property, equipment and trade fixtures located within the Premises.
If, due to a change in the method of taxation, any franchise,
income, profit or other tax shall be levied against Landlord in
substitution for or in lieu of any tax which would constitute a
real estate tax, such franchise, income, profit or other tax shall
be deemed to be Taxes for the foregoing purposes to the extent, and
only to the extent, that such altered or new Taxes replace or are
in lieu of an increase in the ad valorem governmental charges which
Tenant has agreed to pay under the first sentence of this
Paragraph 8. Notwithstanding anything contained in this Lease
to the contrary, Tenant shall not be required to pay any estate,
inheritance, succession or transfer tax which may be payable on
account of the Landlord's ownership of the Premises, and Tenant
shall not be required to pay any income or similar tax on account
of the transfer of Landlord's interest in the Premises or on
account of the receipt by Landlord of the Base Rent hereunder
unless such tax is in partial or complete substitution for the ad
valorem taxes against the Premises which Tenant has agreed to pay
under the first sentence of this
2
Section
8. Landlord shall not be responsible for any late fees or
penalties due to Tenant's failure to make timely
payments.
Landlord
agrees that Tenant shall have the right, but not the duty, at its
sole cost and expense, to contest the amount or legality of the
Taxes which may be assessed against the Premises or Landlord which
Tenant has agreed to pay hereunder and to make application for the
reduction thereof or of any assessment upon the Premises, and
Landlord agrees to execute or join in the execution of any
instrument or document necessary in connection with such contest or
application should Landlord be requested to do so by Tenant.
Tenant agrees to prosecute any such contest or application
with due diligence and to provide Landlord with any necessary
undertakings or agreements to the end that the title to the
Premises shall not be prejudiced by any such contest or
application. Landlord and Tenant agree that any assessments
against the Premises during the Term shall, wherever permitted by
the taxing authority, be paid in installments over the longest
period permitted by such taxing authority.
9.
Insurance
and Indemnification .
A.
Tenant's
Insurance Requirements .
Tenant
shall at all times during the Term, keep in full force and
effect, at its sole cost and expense, with respect to the Building
and Premises, the following types of insurance in the amounts
specified:
(i)
A
commercial general public liability policy of insurance with limits
of liability not less than One Million Dollars ($1,000,000.00) per
occurrence for bodily injury, personal injury or death, or property
damage.
(ii)
Fire
and extended coverage insurance covering the structure of the
Building and all other structural improvements (excluding Tenant's
trade fixtures, furnishings and equipment) against loss or damage
by fire, windstorm, hail, smoke damage and vandalism and malicious
mischief and such other risks as are from time to time covered
under an "extended coverage" endorsement in an amount equal to the
full replacement cost of the Building, as reasonably determined by
Landlord and Tenant. The proceeds from any such policy shall
be paid to the Landlord or Tenant pursuant to the terms and
conditions set forth in Paragraph 13 of this Lease. In the
event Tenant elects not to reconstruct the Building, the proceeds
from any such policy shall be paid to Landlord in accordance with
the terms and conditions of Paragraph 13 below.
All
policies of insurance required to be maintained by Tenant under
Paragraph 9(A)(i) and 9(A)(ii) shall be issued by an insurance
company licensed to do business in Louisiana and shall name
Landlord and any other parties in interest designated by Landlord
as additional insured and loss payee as their respective interests
may appear, and shall contain a provision that the insurer will not
cancel, change or fail to renew the insurance without giving
Landlord thirty (30) days prior written notice. Tenant's
obligation to provide the insurance required under this subsection
may be satisfied by a blanket policy or policies of insurance
carried and maintained by Tenant provided that the coverage
afforded Tenant will not be reduced or diminished or otherwise be
different from that which would exist under a separate policy
meeting the requirements of this Lease. Tenant shall furnish
to Landlord such evidence, including copies of such policies, as
Landlord may require to ensure that the insurance referred to in
this Paragraph 9 is in full force and effect and that the premiums
therefor have been paid. In the event of overlapping coverage
between Tenant's insurance and insurance carried by Landlord,
Tenant's insurance coverage will be deemed to be the primary
coverage.
B.
Indemnification
.
Subject
to Section 9.C. of this Lease, Tenant shall indemnify and hold
harmless Landlord, its members, employees, successors and assigns,
from and against all claims, causes, causes of action, judgments,
liabilities, obligations, losses, costs and expenses (including
court costs and reasonable attorneys' fees) arising from, related
to or as a result of: (a) any accident, injury, death, loss or
damage whatsoever to any person or to the property of any person,
including the person and property of Landlord and its employees,
agents, clients, licensees, invitees, contractors and subtenants,
that occurs during the Term or any renewal term, on or in the Land,
Building, Premises, and/or (b) any act or omission of Tenant or any
agent, contractor, officer, employee, subtenant, licensee, invitee
or client of Tenant that occurs during the Term, on or in the Land,
Building, Premises, excluding any claims based upon or arising
directly out of the intentional acts, negligence or willful
misconduct of Landlord. It is understood and agreed that all
personal property of any kind, nature or description whatsoever,
kept, stored or maintained upon or in the Premises shall be kept,
stored or maintained at the sole risk and responsibility of Tenant
exclusively. Subject to Paragraph 9.C. of this Lease,
Landlord shall indemnify and hold harmless Tenant, its officers,
shareholders, employees, successors and assigns from and against
all claims, causes, causes of action, judgments, liabilities,
obligations, losses, costs and expenses (including court costs and
reasonable attorneys' fees) arising from, related to or as a result
of any act of Landlord or any agent, contractor,
3
officer,
employee, licensee, invitee or client of Landlord at the Premises
to the extent based upon or arising directly out of the intentional
acts, negligence or willful misconduct of Landlord. The
foregoing indemnity obligations shall survive the cancellation or
termination of this Lease.
C.
Waiver
of Subrogation .
Landlord
and Tenant hereby release each other and their respective agents
and employees from any and all liability to each other or anyone
claiming through or under them by way of subrogation or otherwise
for any loss or damage to property caused by or resulting from
risks insured against under fire or extended coverage casualty
insurance carried by the parties and in force at the time of any
such loss or damage; provided, however, that this release shall be
applicable and in force and effect only with respect to loss or
damage occurring during such time as the releaser's policies
contain a clause or endorsement to the effect that any such release
shall not adversely affect or impair such policies or prejudice the
right of the releaser to recover thereunder. Landlord and
Tenant each agrees that it will request its insurance carriers to
include in its policies such a clause or endorsement, and will
include such a clause only so long as it is includable without
additional cost, or if there is an additional cost, only so long as
the other party pays such additional cost. Each party will
notify the other of any such additional cost, and such other party
may, at its election, pay the applicable amount.
10.
Alterations
.
Except
as to the Additions ( hereinafter defined), Tenant shall not
commence any addition to the Building without Landlord's prior
written consent, which shall not be unreasonably withheld or
delayed, and which shall, in the event not specifically rejected by
Landlord within ten (10) days, be deemed to have been granted to
Tenant. Tenant shall have the right, without Landlord's
consent, to make repair and alterations ("Minor Alterations") to
the Premises that do not (i) involve the expenditure of more than
Fifty Thousand Dollars ($50,000.00) in connection with such
alteration or repair or (ii) materially and adversely affect the
Building systems or structure. Without limiting the rights of
Tenant under Paragraphs 13 and 14, all alterations, additions,
improvements and fixtures (other than Tenant's trade fixtures) made
hereunder shall immediately become Landlord's property and shall be
considered part of the Building. Tenant shall not permit any
mechanics liens to be placed on the Land, Building or Premises
other than inchoate mechanics liens for improvements as to which
payment is not due or is in dispute. If any mechanic's lien
is filed against the Land, Building or Premises for work claimed to
have been done for, or materials claimed to have been furnished to
Tenant, it shall be discharged by Tenant within sixty (60) days
thereafter, at Tenant's expense, by filing the bond required by law
or by payment or otherwise. In addition, Tenant shall defend,
save and hold Landlord harmless from any such mechanic's lien or
claim, including, without limitation, Landlord's reasonable
attorney's fees, costs and expenses actually incurred.
11.
Additions
.
Tenant shall have the right from time to time during the
Term, at Tenant's sole cost and expense, to construct one or more
additions to the Building or appurtenant structures on the Land
(each, an "Addition" collectively the "Additions"). Tenant
shall obtain Landlord's prior written approval of the design and
quality of all Additions, which approvals shall not be unreasonably
withheld, conditioned or delayed if the design and quality of any
Addition is reasonably compatible with the Building. Tenant
shall obtain all permits, approvals, and certificates required by
any governmental body to construct any Addition, file an
appropriate mechanics lien waiver at commencement of construction
and, upon completion, obtain certificates of final approval and
occupancy and shall deliver promptly the originals of all such
permits, approvals and certificates to Landlord. In the event
that any Addition is constructed hereunder, such Addition(s) shall
be included in the definition of Building and Premises and shall be
deemed to be owned by Landlord, provided, however, Tenant shall not
pay annual Base Rent for the Addition(s). Tenant shall be
fully responsible for any Taxes, operating expenses, maintenance
costs or utilities for the Addition(s). All Additions shall
be made in compliance with all applicable governmental laws, rules,
regulations and requirements, including, but not limited to, the
Americans with Disabilities Act of 1990 and its implementing
regulations, as then in effect, and all similar applicable state
and local laws, rules and regulations. Tenant will hold
Landlord harmless and indemnify Landlord for all claims, demands,
judgments, costs expenses (including reasonable attorneys' fees and
disbursements), and losses arising out of or related to Tenant's
failure to comply with the provisions of this Paragraph.
Tenant's obligation to hold Landlord harmless and indemnify
Landlord, as set forth in this Paragraph 11, shall survive the
expiration or earlier termination of this Lease.
12.
Assignment
and Subletting .
Except
for Permitted Transfers (as defined below), Tenant covenants not to
assign or transfer this Lease or sublet all or any part of the
Building or Premises without the prior written consent of Landlord,
which consent may not be unreasonably withheld. In the event
of any consented to assignment or transfer, Tenant shall remain
fully liable to perform Tenant's obligations under this Lease.
No consent by Landlord to any assignment, transfer, or
subletting on any one occasion shall be deemed a consent to any
subsequent assignment, transfer, or subletting by Tenant or by any
successors, assigns, transferees, mortgagees or sublessees of
Tenant. Transfers of beneficial ownership interests among
existing shareholders shall not require Landlord's
consent.
4
Notwithstanding
the foregoing prior provisions of this Paragraph 12, Tenant may,
without Landlord's prior written consent, assign this Lease to
(i) a parent, subsidiary, affiliate, division, or other entity
controlling, controlled by or under common control with Tenant; or
(ii) a successor entity related to Tenant by merger,
consolidation, reorganization or government action or (iii) to a
third party purchaser of Tenant, provided, however, that any
successor entity under subsection (i) (ii) or (iii) herein shall
have a tangible net worth equal to at least 75% of Tenant, as
verified by current (not more than 3 months old) financial
statements provided by Tenant (a "Permitted Transfer").
Tenant shall provide Landlord with at least thirty (30) days
prior written notice of any transfer accompanied by the financial
information required by this paragraph.
In
addition to, and not in limitation of, Landlord's right to approve
any sub-tenant or assignee of Tenant, except upon a Permitted
Transfer, in the event Tenant assigns this Lease or subleases
greater than thirty (30%) percent of the building for the remainder
of the Term, Landlord shall have the option, in its sole
discretion, in connection with any proposed sublease or assignment,
to terminate this Lease as of the date the sublease or assignment
is to become effective, and to enter into a direct lease
relationship with the proposed sub-tenant or assignee. If
Landlord terminates this Lease under the preceding sentence,
Landlord shall be obligated to pay any and all broker's commissions
or finders fees incurred by Tenant which may be due and owing as a
result of any proposed assignment or sublease. If Landlord
does not terminate this Lease under the option given it in this
paragraph, Tenant shall be fully responsible for any such broker's
fees.
13.
Damage
and Destruction .
In
the event the Building is damaged or destroyed in whole or in part
by fire or other insured casualty during the Term and Tenant does
not terminate this Lease under the option given it in this
Paragraph 13, then upon receipt of the insurance proceeds from the
insurance required in Paragraph 9 herein, Tenant shall repair and
restore the Building substantially to the same condition that the
Building was in prior to the fire or casualty with reasonable
dispatch and in the event that the insurance proceeds are
insufficient to restore the Building to its condition prior to the
fire or casualty, Tenant shall pay the amount necessary to complete
the restoration. If the manufacturing area of the Building is
more than 50% destroyed or if the Building cannot be restored
within a period of two hundred seventy (270) days ("Substantial
Casualty"), as reasonably determined by Tenant, Tenant shall have
the right to terminate this Lease upon written notice to Landlord
given within forty-five (45) days from the occurrence of such
casualty, in which event Landl