FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended January 26, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ________________to_________________
Commission File No. 001-08772
HUGHES SUPPLY, INC.
(Exact name of registrant as specified in its charter)
Incorporated in the State I.R.S. Employer I.D.
of Florida Number 59-0559446
Post Office Box 2273
20 North Orange Avenue, Suite 200
Orlando, Florida 32802
(Address of principal executive office)
Registrant's Telephone Number, including area code: 407/841-4755
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Common Stock ($1.00 Par Value) New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
Common Stock ($1.00 Par Value)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
YES [X] NO [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
State the aggregate market value of the voting stock held by non-affiliates
of the Registrant: $159,695,000 as of March 5, 1996.
Indicate the number of shares outstanding of each of the Registrant's
classes of common stock, as of the latest practicable date: 6,807,534
shares of common stock ($1.00 par value) as of March 5, 1996.
DOCUMENTS INCORPORATED BY REFERENCE
List hereunder the following documents if incorporated by reference and the
Part of the Form 10-K into which the document is incorporated:
Part I - Annual Report to shareholders for fiscal
year ended January 26, 1996 (designated portions).
Part II - Annual Report to shareholders for fiscal
year ended January 26, 1996 (designated portions).
Part III- Proxy Statement for the 1996 Annual
Meeting of Shareholders (designated
portions).
Part IV - Annual Report to shareholders for fiscal
year ended January 26, 1996 (designated portions).
PART I
ITEM 1. BUSINESS
(a) General Development of Business
Hughes Supply, Inc. (the "Registrant") was founded as a general
partnership in Orlando, Florida in 1928. The Registrant was incorporated
as a Florida corporation in 1947. As used throughout this Report, the term
"Registrant" shall be deemed to mean the Registrant and its subsidiaries,
except where the context otherwise indicates.
The Registrant is primarily engaged in the wholesale distribution of
a broad range of materials, equipment and supplies to the construction
industry. Major product lines distributed by the Registrant include
electrical, plumbing and electric utility equipment; building materials;
pool equipment and supplies; water and sewer products; air conditioning and
heating equipment and supplies; water systems and industrial pipe, valves
and fittings.
The Registrant distributes its product lines through 213 wholesale
outlets located in Florida, 13 other states and Puerto Rico. The following
table presents the distribution of the Registrant's wholesale outlets.
State, Territory Number of Locations
Florida 72
Georgia 31
North Carolina 25
South Carolina 17
Ohio 14
Alabama 12
Mississippi 11
Tennessee 11
Virginia 5
Indiana 4
Kentucky 4
Pennsylvania 3
Maryland 2
New Jersey 1
Puerto Rico 1
A current listing of the locations of the wholesale outlets and distribution
centers of the Registrant is set forth as Exhibit 99.1 to this Report.
The principal executive offices of the Registrant are located at 20
North Orange Avenue, Suite 200, Orlando, Florida 32801 (telephone 407-841-4755).
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(b) Financial Information About Industry Segments
The Registrant does not engage in significant operations in more than
one industry segment as defined in Statement of Financial Standards No. 14.
(c) Narrative Description of Business
Products Distributed
The products sold by the Registrant may be classified into the
following major product lines:
Electrical - electrical supplies, including wire, cable, cords, boxes,
covers, wiring devices, conduit, raceway duct, safety switches, motor
controls, breakers, panels, fuses and related supplies and accessories,
residential, commercial and industrial electrical fixtures and other special
use fixtures.
Plumbing - plumbing fixtures and related fittings, residential,
commercial and industrial water heaters, and plumbing accessories and
supplies.
Electric utility - transformers, conductor cable, insulators,
prestressed concrete transmission and distribution poles, and other electric
utility supplies and related hardware, accessories and tools.
Building materials - reinforcing wire, reinforcing steel, plyform,
lumber, concrete chemicals, concrete forming accessories, road and bridge
products, masonry accessories and other building materials, hand tools,
power tools and equipment for all mechanical and building trades.
Pool equipment and supplies - above ground and in ground pool packages,
pumps, filters, heaters, lights, slides, diving boards, skimmers, drains,
chemicals, solar equipment, pool liners and in ground pool walls, above
ground pools and equipment, deck products and cleaning equipment.
Water and sewer - water works and industrial supplies, including large
diameter plastic (PVC) and ductile iron pipe, fire hydrants, water meters,
backflow prevention devices, valves and related hardware and accessories.
Air conditioning and heating - air conditioning and heating equipment,
furnaces, heaters, heat pumps, condensing units, duct, pipe, fittings,
registers, grills, freon, insulation and other refrigeration equipment,
supplies and service parts.
Water systems - jet and submersible pumps and tanks, residential and
commercial water treatment, well liner, wire, poly pipe, accessories and
environmental products.
Industrial pipe, valves and fittings - mechanical and weld pipe, valves
and related fittings, fire protection systems and supplies, high performance
valves and specialty pipe.
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Marketing
In recent years the Registrant's marketing plan has led to the
expansion of the geographic markets served by the Registrant. The following
table illustrates the expansion achieved through acquisitions over the last
five fiscal years.
<TABLE>
<CAPTION> State(s)/
Method of Date of Number of Territory of Company's Major
Acquired Company Acquisition Acquisition Locations Operation Product Lines
<S> <C> <C> <C> <C> <C>
Virginia branch (1) Purchase June, 1993 1 VA Plumbing
Georgia and Florida Purchase June, 1993 3 GA Electrical and electric
branches (2) 1 FL utility
Electrical Pooling June, 1993 1 GA Electrical
Distributors, Inc.
Alabama Water Works Purchase July, 1993 2 AL Water and sewer
Supply, Inc.
Florida branches (3) Purchase December, 1993 2 FL Building materials
Swaim Supply Pooling January, 1994 6 NC Plumbing, air conditioning
Company, Inc. 2 VA and heating
Florida and Georgia Purchases February- 2 FL Water and sewer, plumbing and
branches (4) September, 1994 2 GA electrical
Treaty Distribution Purchase January, 1995 12 OH Plumbing, water and sewer and
Group branches (5) 4 IN heating and air conditioning
Olander & Brophy, Inc. Purchase March, 1995 3 PA Pool equipment and water
1 OH systems
Port City Electrical Purchase March, 1995 2 GA Electrical
Supply, Inc. 1 SC
Elec-Tel Supply Purchase April, 1995 1 GA Electric utility
Company
Various branches (6) Purchase July, 1995- 10 FL,AL,NJ,KY, Electrical, pool equipment
February, 1996 TN,SC,VA,MD and plumbing
Moore Electric Pooling August, 1995 5 NC, SC Electrical
Supply, Inc.
Atlantic Pump & Purchase September, 1995 3 FL, PR Pool equipment
Equip. Companies
Florida Pipe & Pooling December, 1995 1 FL Industrial pipe, valves
Supply Company and fittings
(1) Facility in Falls Church, Virginia acquired in purchase of assets from
Capitol Hydronic Supply Company, Inc. Sales outlet relocated to
Arlington, Virginia.
(2) Facilities acquired in Macon, Georgia and Tallahassee, Florida in
purchase of assets from Causey Electrical Supply Company, Causey
Utility Supply Co. and Macon Lighting Center, Inc.
(3) Facilities acquired in purchase of assets from Hausman Corporation.
(4) Facilities acquired in purchases of assets from four entities.
(5) Facilities acquired in purchase from The Treaty Company of the
assets of its operating division, The Treaty Distribution Group.
(6) Facilities acquired in purchases of assets from four entities.
</TABLE>
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In addition to expansion through acquisition, the Registrant has
increased its geographic market area by opening new sales outlets in
Jacksonville, Daytona Beach, Kissimmee, Lady Lake, Ft. Myers, West Palm
Beach, Naples, Auburndale, Tampa and Perry, Florida, in Augusta, Austell,
Tifton, Hartsfield, Alpharetta, LaGrange and McDonough, Georgia, in Troy,
Elizabeth City and Greensboro, North Carolina, in Birmingham, Dothan and
Mobile, Alabama, in Nashville, Tennessee, in Fairfield, Ohio, in Louisville,
Kentucky and in Anderson and Bluffton, South Carolina during the past five
years.
Each of the Registrant's sales outlets handles one or more of the
Registrant's product lines. Sales are made primarily to contractors,
subcontractors, electric utilities, municipalities and industrial accounts.
The Registrant employs approximately 400 outside sales representatives who
call on customers and who also work with architects, engineers and
manufacturers' representatives when major construction projects are
involved. Approximately 550 inside account executives expedite orders,
deliveries, quotations, and requests for pricing. Most orders are taken by
telephone, and materials are delivered by Registrant-owned trucks to the
customer's office or job site.
The Registrant's wholesale outlets are sales and distribution points
for the products sold by the Registrant. Each sales outlet operates as a
separate profit center with its own sales force. Each is managed by its own
manager, who is directly responsible for customer relations, the hiring and
promotion of personnel, purchasing, sales, the maintenance of adequate
inventory levels and cost control for the particular sales outlet.
Day to day operations of the sales outlets are the responsibility of
the respective managers, but major decisions affecting Registrant policy,
facilities or capital outlay are reviewed by the Registrant's executive
officers. Purchasing agents generally make use of a computerized perpetual
inventory system to monitor stock levels, while central distribution centers
in Orlando, Florida, College Park, Georgia, Monroe, North Carolina,
Henderson, North Carolina , Greenville, Ohio and Nashville, Tennessee
provide purchasing and distribution assistance. The Registrant's general
accounting, customer billing, inventory, and accounts payable systems are
for the most part processed at the Registrant's central computer facility
in Orlando, Florida.
More than 50,000 wholesale customers are presently served by the
Registrant, and no single customer accounts for more than 1% of total sales
annually. Orders for larger construction projects normally require long-term
delivery schedules throughout the period of construction, which in some
cases may continue for several years. The substantial majority of customer
orders are shipped out of inventory on hand. Some items are manufactured
to customer specifications and require special ordering. Additionally, some
large volume orders are shipped directly to the customer from the
manufacturer.
Sources of Supply
All products sold by the Registrant are purchased from other
manufacturers and suppliers. The Registrant regularly purchases from over
5,500 manufacturers and suppliers, no single one of which accounted for more
than 6% of the Registrant's total purchases during the fiscal year ended
January 26, 1996.
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Inventories
The Registrant is a wholesale distributor of construction materials and
maintains significant inventories to meet rapid delivery requirements and
to assure itself of a continuous allotment of goods from suppliers. As of
January 26, 1996, inventories constituted approximately 35% of the
Registrant's total assets.
Competition
There is strong competition throughout the marketing areas served by
the Registrant in each product line the Registrant distributes. The main
sources of competition are other wholesalers, manufacturers who sell certain
lines directly to contractors and, to a limited extent, retailers in the
markets for plumbing, electrical fixtures and supplies, building materials,
pool supplies and contractor's tools. Management believes that the
Registrant, on the basis of its total sales, is the largest wholesale
distributor of its range of products in the southeastern and midwestern
sections of the United States. The principal competitive factors in the
Registrant's business are availability of material, technical product
knowledge as to application and usage, advisory and other service
capabilities and pricing of products.
Employees
The Registrant had a total of approximately 3,350 employees as of
January 26, 1996, consisting of approximately 15 executives, 550 managers,
950 sales personnel and 1,835 other employees, including truck drivers,
warehouse personnel, office and clerical workers. The Registrant's work
force has increased by approximately 20% compared to the prior year in
response to increased sales volume as well as the result of business
acquisitions during the current year.
(d) Financial Information about Foreign and Domestic Operations and
Export Sales
The Registrant does not engage in material operations or derive a
material portion of its sales or revenues from customers in foreign
countries.
ITEM 2. PROPERTIES
The Registrant leases approximately 31,000 square feet of an office
building in Orlando, Florida for its headquarters. In addition, the
Registrant owns or leases 213 sales outlets in 14 states and Puerto Rico.
The typical sales outlet consists of a combined office and warehouse
facility ranging in size from 3,000 to 40,000 square feet, with a paved
parking and storage area. The Registrant also operates a computer center,
six central distribution warehouses, and a garage and trucking terminal.
Additional information regarding owned and leased properties of the
Registrant is set forth as Exhibit 99.1 to this Report and in Note 7 of the
Notes to Consolidated Financial Statements of the Annual Report to
shareholders for the fiscal year ended January 26, 1996, a copy of which is
filed as an exhibit to this Report and the cited portion of which is
incorporated herein by reference.
I-5
ITEM 3. LEGAL PROCEEDINGS
There are no material pending legal proceedings to which the Registrant
or its subsidiaries is a party or of which the property of either the
Registrant or its subsidiaries is the subject which are required to be
reported in response to this item.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of the Registrant's security holders
during the fourth quarter of the fiscal year ended January 26, 1996.
I-6
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
Information with respect to the principal market for the Registrant's
common stock, stock prices and dividend information is set forth under the
captions "Corporate and Shareholder Information" and "Market Price and
Dividend Data" of the Annual Report to shareholders for the fiscal year
ended January 26, 1996, a copy of which is filed as an exhibit to this
Report and the cited portion of which is incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
Information with respect to selected financial data of the Registrant
is set forth under the caption "Selected Financial Data" of the Registrant's
Annual Report to shareholders for the fiscal year ended January 26, 1996,
a copy of which is filed as an exhibit to this Report and the cited portion
of which is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Information with respect to the Registrant's financial condition,
changes in financial condition and results of operations is set forth under
the caption "Management's Discussion and Analysis of Financial Condition and
Results of Operations" of the Registrant's Annual Report to shareholders for
the fiscal year ended January 26, 1996, a copy of which is filed as an
exhibit to this Report and the cited portion of which is incorporated herein
by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
(a) Financial Statements
The financial statements filed with this Report are set forth in the
"Index to Consolidated Financial Statements and Schedules" following Part
IV hereof.
(b) Selected Quarterly Financial Data
Information with respect to selected quarterly financial data of the
Registrant is set forth under the caption "Selected Quarterly Financial
Data" of the Registrant's Annual Report to shareholders for the fiscal year
ended January 26, 1996, a copy of which is filed as an exhibit to this
Report and the cited portion of which is incorporated herein by reference.
II-1
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
On May 24, 1994, the Board of Directors of the Registrant appointed
Price Waterhouse LLP as auditors for the three fiscal year period
commencing with the Registrant's fiscal year ending January 27, 1995.
The term of engagement of the Registrant's previous auditors, the firm
of Coopers & Lybrand, expired at the conclusion of the fiscal year
ended January 28, 1994. Price Waterhouse LLP was selected by the
Board upon the recommendation of the Audit Committee following
consideration of proposals submitted at the Committee's request by a
number of independent accounting firms including, among others,
Coopers & Lybrand and Price Waterhouse LLP.
(a) Previous independent accountants.
(i) The former accountants, Coopers & Lybrand, were not
reappointed by the Registrant following the expiration of
their term of engagement.
(ii) The report of Coopers & Lybrand on the financial statements
for the fiscal year ended January 28, 1994 contained no
adverse opinion or disclaimer of opinion and was not
qualified or modified as to uncertainty, audit scope or
accounting principle.
(iii) The Registrant's Board of Directors approved the
change of independent accountants upon the
recommendation of the Audit Committee.
(iv) In connection with its audit for the fiscal year ended
January 28, 1994 and through May 24, 1994, there were no
disagreements with Coopers & Lybrand on any matter of
accounting principles or practices, financial statement
disclosure, or auditing scope or procedure, which
disagreements if not resolved to the satisfaction of Coopers
& Lybrand would have caused them to make reference thereto
in their report on the financial statements for such year.
(v) During fiscal year ended January 28, 1994 and through May
24, 1994, there were no reportable events as defined in
Regulation S-K Item 304(a)(1)(v).
(vi) The Registrant requested and received a letter from Coopers
& Lybrand addressed to the Securities and Exchange
Commission stating that it agreed with the above statements.
A copy of such letter, dated May 31, 1994, is filed as
Exhibit 16.1 to Form 8-K dated May 24, 1994.
II-2
(b) New independent accountants.
(i) The Registrant engaged Price Waterhouse LLP as its new
independent accountants as of May 24, 1994. During the
fiscal year ended January 28, 1994 and through May 24, 1994,
the Registrant has not consulted with Price Waterhouse LLP
on items which (1) were or should have been subject to SAS
50 or (2) concerned the subject matter of a disagreement or
reportable event with the former auditor (as described in
Regulation S-K Item 304(a)(2)).
II-3
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
(a) Identification of Directors
Information with respect to directors of the Registrant will be set
forth under the captions "Directors and Nominees for Election as Directors
of the Company" and "Family Relationships Between Certain Directors" in the
Registrant's Proxy Statement for the 1996 Annual Meeting of Shareholders
to be filed with the Commission under Regulation 14A (the "1996 Proxy
Statement"). The cited portions of the 1996 Proxy Statement are
incorporated herein by reference.
(b) Identification of Executive Officers
Information with respect to executive officers of the Registrant will
be set forth under the caption "Executive Officers" and, with respect to
executive officers who are also directors will also be set forth under the
captions referred to in paragraph (a) above of this Item 10, in the 1996
Proxy Statement. The cited portions of the 1996 Proxy Statement are
incorporated herein by reference.
(c) Compliance with Section 16(a) of the Securities
Exchange Act of 1934
The information required by Item 405 of Regulation S-K will be set
forth under the caption "Compliance with Section 16(a) of the Securities
Exchange Act of 1934" in the 1996 Proxy Statement. The cited portion of the
1996 Proxy Statement is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
Information with respect to executive compensation will be set forth
under the caption "Executive Compensation and Other Information" in the 1996
Proxy Statement. Except as hereinafter set forth, such information will be
deemed to have been filed with the Commission as a part of the 1996 Proxy
Statement and is incorporated herein by reference. Notwithstanding anything
to the contrary set forth in the Registrant's previous filings under the
Securities Act of 1933, as amended (the "33 Act"), or the Securities
Exchange Act of 1934, as amended (the "34 Act"), that might incorporate
future filings, including the 1996 Proxy Statement or this Report on Form
10-K, the "Compensation Committee Report on Executive Compensation" and the
section captioned "Shareholder Return" in the 1996 Proxy Statement are
specifically excluded from the portions of the 1996 Proxy Statement
incorporated by reference herein or into any other filing under the 33 Act
or the 34 Act.
III-1
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information as of March 15, 1996 with respect to persons known to
management of the Registrant to be the beneficial owners of more than 5% of
the outstanding common stock of the Registrant and information with respect
to the security ownership of management of the Registrant will be set forth
under the captions "Ownership of Securities by Certain Beneficial Owners"
and "Ownership of Securities by Officers and Directors" in the 1996 Proxy
Statement. The cited portions of the 1996 Proxy Statement are incorporated
herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information with respect to certain relationships and related
transactions will be set forth under the caption "Certain Transactions with
Management" in the 1996 Proxy Statement. The cited portion of the 1996
Proxy Statement is incorporated herein by reference.
III-2
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 8-K
(a) Financial Statements and Financial Statement Schedules
Financial statements and financial statement schedules required to be
filed by item 8 of this Report are listed in a separately designated section
submitted below, except for the report of predecessor independent
accountants which is included here. Exhibits are listed in subparagraph (c)
below.
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the quarter ended
January 26, 1996.
(c) Exhibits Filed
A substantial number of the exhibits referred to below are indicated
as having been previously filed as exhibits to other reports under the
Securities and Exchange Act of 1934 or as exhibits to registration
statements under the Securities Act of 1933. Such previously filed exhibits
are incorporated by reference in this Form 10-K. Exhibits not incorporated
by reference herein are filed with this report.
(2) Plan of acquisition, reorganization, arrangement, liquidation or
succession. Not applicable.
(3) Articles of incorporation and by-laws.
3.1 Articles of incorporation, as amended, filed as Exhibit 3.1
to Form 10-Q for the quarter ended July 31, 1994.
3.2 Composite By-Laws, as amended, filed as Exhibit 3.2 to Form
10-Q for the quarter ended July 31, 1994.
(4) Instruments defining the rights of security holders, including
indentures.
4.1 Specimen Stock Certificate representing shares of the
Registrant's common stock, $1.00 par value, filed as Exhibit
4.2 to Form 10-Q for the quarter ended October 31, 1984.
4.2 Trust Indenture dated May 1, 1986 between the Registrant and
J. Henry Schroder Bank & Trust Company, as Trustee for the
holders of the 7% Convertible Subordinated Debentures, filed
as Exhibit 4(b) to Registration No. 33-4714.
4.3 Specimen Copy of Certificate representing 7% Convertible
Subordinated Debenture, filed as Exhibit 4(c) to
Registration No. 33-4714.
IV-1
4.4 Resolution Approving and Implementing Shareholder Rights
Plan filed as Exhibit 4.4 to Form 8-K dated May 17, 1988.
(9) Voting trust agreement. Not applicable.
(10) Material contracts.
10.1 Lease Agreements with Hughes, Inc.
(a) Orlando Trucking, Garage and Maintenance Operations
dated December 1, 1971, filed as Exhibit 13(n) to
Registration No. 2-43900. Letter dated April 15, 1992
extending lease from month to month, filed as Exhibit
10.1(a) to Form 10-K for the fiscal year ended January
31, 1992.
(b) Leases effective March 31, 1988, filed as Exhibit
10.1(c) to Form 10-K for the fiscal year ended January
27, 1989.
Sub-Item Property
(1) Clearwater
(2) Daytona Beach
(3) Fort Pierce
(4) Lakeland
(5) Leesburg
(6) Orlando Electrical Operation
(7) Orlando Plumbing Operation
(8) Orlando Utility Warehouse
(9) St. Petersburg
(10) Sarasota
(11) Venice
(12) Winter Haven
(c) Lease amendment letter between Hughes, Inc. and the
Registrant, dated December 1, 1986, amending Orlando
Truck Operations Center and Maintenance Garage lease,
filed as Exhibit 10.1(i) to Form 10-K for the fiscal
year ended January 30, 1987.
(d) Lease agreement dated June 1, 1987, between Hughes,
Inc. and the Registrant, for additional Sarasota
property, filed as Exhibit 10.1(j) to Form 10-K for the
fiscal year ended January 29, 1988.
IV-2
(e) Leases dated March 11, 1992, filed as Exhibit 10.1(e)
to Form 10-K for the fiscal year ended January 31,
1992.
Sub-Item Property
(1) Gainesville Electrical Operation
(2) Valdosta Electrical Operation
10.2 Hughes Supply, Inc. 1988 Stock Option Plan as amended March
12, 1996.
10.3 Form of Supplemental Executive Retirement Plan Agreement
entered into between the Registrant and eight of its
executive officers, filed as Exhibit 10.6 to Form 10-K for
fiscal year ended January 30, 1987.
10.4 Directors' Stock Option Plan, as amended, filed as Exhibit
10.4 to Form 10-Q for the quarter ended July 31, 1994.
10.5 Asset Purchase Agreement with Accord Industries Company,
dated October 9, 1990, for sale of Registrant's
manufacturing operations, filed as Exhibit 10.7 to Form 10-K
for fiscal year ended January 25, 1991.
10.6 Lease Agreement dated June 30, 1993 between Donald C. Martin
and Electrical Distributors, Inc., filed as Exhibit 10.6 to
Form 10-K for fiscal year ended January 28, 1994.
10.7 Consulting Agreement dated June 30, 1993 between Hughes
Supply, Inc. and Donald C. Martin, filed as Exhibit 10.7 to
Form 10-K for fiscal year ended January 28, 1994.
10.8 Written description of senior executives' long-term
incentive bonus plan for fiscal year 1996 incorporated by
reference to the description of the bonus plan set forth
under the caption "Approval of the Stock Award Provisions of
the Senior Executives' Long-Term Incentive Bonus Plan for
Fiscal Year 1996" on pages 26 and 27 of the Registrant's
Proxy Statement Annual Meeting of Shareholders To Be Held
May 24, 1994.
10.9 Hughes Supply, Inc. Amended Senior Executives' Long-Term
Incentive Bonus Plan, adopted January 25, 1996.
IV-3
10.10 Lease Agreement dated June 30, 1994 between Donald C.
Martin and Electrical Distributors, Inc., filed as
Exhibit 10.10 to Form 10-K for fiscal year ended
January 27, 1995.
10.11 Lease Agreements between Union Warehouse & Trucking
Company (d/b/a Union Warehouse & Realty Company) or
Monoco Realty and USCO Incorporated.
(a) Leases dated March 1, 1985 and amended December 23,
1986.
Sub-Item Property
(1) 610 East Windsor St., Monroe, NC
(2) 113-115 Henderson St., Monroe, NC
(3) Statesville, NC
(4) Charlotte, NC
(5) Durham, NC
(6) Pinehurst, NC
(7) West Columbia, SC
(b) Lease dated July 1, 1986 and amended December 23, 1986
for Aiken, South Carolina property.
(c) Lease dated March 1, 1990 for Greenville, South Carolina
property.
(d) Lease dated November 1, 1993 for Cheraw, South Carolina
property.
(e) Lease dated March 1, 1985 and amended October 1, 1992
for 1515 Morgan Mill Road, Monroe, North Carolina
property.
(f) Lease amendment letter between Union Warehouse & Realty
Company, Monoco Realty Company and Hughes Supply, Inc.,
dated October 18, 1994, amending the leases for the
eleven properties listed in Exhibit 10.11(a) through
(e).
(g) Lease effective February 1, 1996 for Pineville, North
Carolina property.
10.12 Lease Agreement effective February 1, 1993 between
Union Warehouse & Realty Company and Moore Electric
Supply, Inc.
(11) Statement re computation of per share earnings.
11.1 Summary schedule of earnings per share calculations.
(12) Statement re computation of ratios. Not applicable.
IV-4
(13) Annual report to security holders, Form 10-Q or quarterly report
to security holders.
13.1 Information incorporated by reference into Form 10-K from
the Annual Report to shareholders for the fiscal year ended
January 26, 1996.
(16) Letter re change in certifying accountant.
16.1 Letter from Coopers & Lybrand, filed as Exhibit 16.1 to Form
8-K dated May 24, 1994.
(18) Letter re change in accounting principles. Not applicable.
(21) Subsidiaries of the Registrant.
21.1 Subsidiaries of the Registrant.
(22) Published report regarding matters submitted to vote of security
holders. Not applicable.
(23) Consents of experts and counsel.
23.1 Consent of Price Waterhouse LLP.
23.2 Consent of Coopers & Lybrand L.L.P.
(24) Power of attorney. Not applicable.
(27) Financial data schedule.
27.1 Financial Data Schedule (filed electronically only).
27.2 Restated Financial Data Schedule (filed electronically
only).
27.3 Restated Financial Data Schedule (filed electronically
only).
(28) Information from reports furnished to state insurance regulatory
authorities. Not applicable.
(99) Additional exhibits.
99.1 Location of facilities.
(d) Financial Statement Schedules
Financial statements and financial statement schedules required by
Regulation S-X which are excluded from the annual report to shareholders by
Rule 14a-3(b). Not applicable.
IV-5
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be
signed on its behalf by the undersigned, thereunto duly authorized.
HUGHES SUPPLY, INC.
By: /s/ David H. Hughes
David H. Hughes, Chairman of
the Board and Chief Executive
Officer
/s/ J. Stephen Zepf
J. Stephen Zepf, Treasurer,
Chief Financial Officer,
Chief Accounting Officer
Date: March 12, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
/s/ David H. Hughes /s/ Clifford M. Hames
David H. Hughes Clifford M. Hames
March 12, 1996 March 12, 1996
(Director) (Director)
/s/ John D. Baker, II /s/ Russell V. Hughes
John D. Baker, II Russell V. Hughes
March 12, 1996 March 12, 1996
(Director) (Director)
/s/ Robert N. Blackford /s/ Vincent S. Hughes
Robert N. Blackford Vincent S. Hughes
March 12, 1996 March 12, 1996
(Director) (Director)
/s/ John B. Ellis /s/ Herman B. McManaway
John B. Ellis Herman B. McManaway
March 12, 1996 March 12, 1996
(Director) (Director)
/s/ A. Stewart Hall, Jr. /s/ Donald C. Martin
A. Stewart Hall, Jr. Donald C. Martin
March 12, 1996 March 12, 1996
(Director) (Director)
IV-6
REPORT OF INDEPENDENT ACCOUNTANTS
Shareholders and Board of Directors
Hughes Supply, Inc.
We have audited the consolidated statements of income, shareholders' equity,
and cash flows of Hughes Supply, Inc. and subsidiaries for the fiscal year
ended January 28, 1994 (not presented herein). These financial statements
are the responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated results of operations and cash
flows of Hughes Supply, Inc. and subsidiaries for the fiscal year ended
January 28, 1994 (prior to the retroactive restatement to account for the
poolings of interests), in conformity with generally accepted accounting
principles.
/s/ Coopers & Lybrand
Coopers & Lybrand
Orlando, Florida
March 17, 1994
HUGHES SUPPLY, INC.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES
The following consolidated financial statements of the Registrant and its
subsidiaries included in the Annual Report of the Registrant to its
shareholders for the year ended January 26, 1996, are incorporated by
reference:
Annual
Report
Page
Consolidated Statements of Income
for the years ended January 26, 1996,
January 27, 1995 and January 28, 1994 12
Consolidated Balance Sheets as of
January 26, 1996 and January 27, 1995 13
Consolidated Statements of Shareholders'
Equity for the years ended January 26,
1996, January 27, 1995 and January 28, 1994 14
Consolidated Statements of Cash Flows for
the years ended January 26, 1996,
January 27, 1995 and January 28, 1994 15
Notes to Consolidated Financial Statements 16
Report of Independent Certified
Public Accountants 22
Except for the report of predecessor independent accountants which is
included in Part IV above, all other financial statements and schedules have
been omitted as they are either not applicable, not required or the
information is given in the financial statements or related notes.
INDEX OF EXHIBITS FILED WITH THIS REPORT
10.2 Hughes Supply, Inc. 1988 Stock Option Plan as amended March 12,
1996.
10.9 Hughes Supply, Inc. Amended Senior Executives' Long-Term Incentive
Bonus Plan, adopted January 25, 1996.
10.11 Lease Agreements between Union Warehouse & Trucking Company
(d/b/a Union Warehouse & Realty Company) or Monoco Realty
and USCO Incorporated.
(a) Leases dated March 1, 1985 and amended December 23, 1986.
(b) Lease dated July 1, 1986 and amended December 23, 1986 for
Aiken, South Carolina property.
(c) Lease dated March 1, 1990 for Greenville, South Carolina
property.
(d) Lease dated November 1, 1993 for Cheraw, South Carolina
property.
(e) Lease dated March 1, 1985 and amended October 1, 1992 for
1515 Morgan Mill Road, Monroe, North Carolina property.
(f) Lease amendment letter between Union Warehouse & Realty
Company, Monoco Realty Company and Hughes Supply, Inc.,
dated October 18, 1994, amending the leases for the eleven
properties listed in Exhibit 10.11(a) through (e).
(g) Lease effective February 1, 1996 for Pineville, North
Carolina property.
10.12 Lease Agreement effective February 1, 1993 between Union
Warehouse & Realty Company and Moore Electric Supply, Inc.
11.1 Summary schedule of earnings per share calculations.
13.1 Information incorporated by reference into Form 10-K from the
Annual Report to shareholders for fiscal year ended January 26,
1996.
21.1 Subsidiaries of the Registrant.
23.1 Consent of Price Waterhouse LLP.
23.2 Consent of Coopers & Lybrand L.L.P.
27.1 Financial data schedule (filed electronically only).
27.2 Restated financial data schedule (filed electronically only).
27.3 Restated financial data schedule (filed electronically only).
99.1 Location of facilities.
HUGHES SUPPLY, INC.
1988 Stock Option Plan
As Amended March 12, 1996
1. PURPOSE
This 1988 Option Plan (the "Plan") is intended as an
incentive and to encourage stock ownership by certain key execu-
tive, management and sales employees of Hughes Supply, Inc. (the
"Corporation") or its subsidiary corporations as that term is
defined in Article 3 below (the "Subsidiaries"), so that they may
acquire or increase their proprietary interest in the success of
the Corporation and Subsidiaries, to encourage them to remain in
the employ of the Corporation or of the Subsidiaries and as an
incentive to work to increase the value of the stock of the
Corporation. It is further intended that options issued pursuant to
this Plan shall, within the discretion of the Board of Directors of
the Corporation, either constitute incentive stock options
("ISO's") within the meaning of Section 422 of the 1986 Internal Revenue
Code, as amended (the "Code") or stock options that do not
constitute ISO's ("Non ISO's").
2. ADMINISTRATION
The Plan shall be administered by a committee appointed
by the Board of Directors of the Corporation (the "Committee"). The
Committee shall consist of not less than three (3) members of the
Corporation's Board of Directors. The Board of Directors may from
time to time remove members from, or add members to, the Committee.
Vacancies on the Committee, howsoever caused, shall be filled by
the Board of Directors. The Committee shall elect one of its
members as Chairman, and shall hold meetings at such times and
places as it may determine. Acts of the Committee taken by a
majority of the Committee at a meeting at which a quorum is
present, or acts reduced to or approved in writing by a majority of
the members of the Committee, shall be the valid acts of the
Committee. No Director while a member of the Committee shall be
eligible to receive an option under the Plan, and each member of
the Committee shall be a "disinterested person" within the meaning
of Rule 16b-3 of the Securities and Exchange Commission. The
Committee shall have the authority, within its sole discretion, to
select the employees who shall be granted options, determine the
amount of stock to be subject to such options and the terms
thereof, and to make the grant of options under the Plan.
The Committee may, from time to time, but shall not be
required to, issue a statement of policy setting forth the general
policies to be followed by the Committee with respect to granting
of options to employees under the Plan. Such statement of policy
may, but shall not be required to, set forth the specific criteria
such as supervisory capacity, earnings, length of service and job
performance standards to be considered by the Committee in granting
options under the Plan.
The interpretation and construction by the Committee of
any provisions of the Plan or of any option granted under it shall
be final. No member of the Committee shall be liable for any
action or determination made in good faith with respect to the Plan
or any option granted under it.
3. ELIGIBILITY
The persons who shall be eligible to receive options
shall be such key executive, management and sales employees
(including officers, whether or not they are Directors) of the
Corporation or its Subsidiaries (as such term is defined in Section 424 of
the Code) existing from time to time as the Committee shall select
from time to time. An optionee may hold more than one option, but
only on the terms and subject to the restrictions hereafter set
forth.
An individual who, at the time the option is granted,
owns or is considered to own more than ten percent (10%) of the
total combined voting power of all classes of stock of the
Corporation or any of its Subsidiaries shall be eligible to receive
an ISO if, and only if, at the time the ISO is granted the option
price is at least one hundred ten percent (110%) of the fair market
value of the shares of stock subject to the option and such option,
by its terms, is not exercisable after the expiration of five (5)
years from the date it is granted. Except for an option meeting the
foregoing requirements, no person shall be eligible to receive an
ISO, if, at the time the option is granted, such person owns, or is
considered to own, more than ten percent (10%) of the total
combined voting power of all classes of capital stock of the
Corporation or any of its Subsidiaries.
For purposes of the preceding paragraph of this Article
3, shares covered by options under this Plan are considered to be
owned by the optionee upon the granting of the option and the
attribution of ownership rules set forth in Section 424 of the Code shall
also apply.
4. STOCK
The stock subject to the options shall be 1,500,000
shares of the Corporation's authorized but unissued or reacquired
$1.00 par value common stock hereafter sometimes called capital
stock.
In the event that any outstanding option under the Plan
for any reason expires or is terminated, the shares of capital
stock allocable to the unexercised portion of such option may again
be subjected to an option under the Plan, but any surrendered
shares which remain after the surrender of an option under
paragraph (o) of Article 5 shall not again become available to be
subjected to an option under this Plan.
5. TERMS AND CONDITIONS OF OPTIONS: STOCK OPTION AGREEMENTS
Stock options granted pursuant to the Plan shall be
authorized by the Committee as either ISO's or Non ISO's, and shall
be evidenced by stock option agreements in such form as the
Committee shall from time to time approve, which agreements shall
comply with and be subject to the following terms and conditions:
(a) Optionee's Agreement
Each optionee shall agree to remain in the employ of
and to render to the Corporation or Subsidiaries his services, but
such agreement shall not impose upon the Corporation or
Subsidiaries any obligation to retain the optionee in their employ
for any period.
(b) Number of Shares
Each option shall state the number of shares to
which it pertains.
(c) Option Price
Each option shall state the option price, which
shall be not less than one hundred percent (1008) of the fair
market value of the shares of capital stock of the Corporation on
the date of the granting of the option or such greater amount as
may be required by Article 3 hereof. During such time as such stock
is not listed upon an established stock exchange the fair market
value per share shall be the mean between dealer "bid" and "ask"
prices of the capital stock in over-the-counter market applicable
to transactions effected in Orlando, Florida on the day the option
is granted, as reported by the National Association of Securities
Dealers, Inc. If the stock is listed upon an established stock
exchange or exchanges such fair market value shall be deemed to be
the highest closing price of the capital stock on such stock
exchange or exchanges on the day the option is granted or if no
sale of the Corporation's capital stock shall have been made on any
stock exchange on that day, on the next preceding day on which
there was a sale of such stock. Subject to the foregoing, the
Committee in fixing the option price shall have full authority and
discretion and be fully protected in doing so.
(d) Medium and Time of Payment
The option price shall be payable in United States
dollars upon the exercise of the option and may be paid in cash,
check or with shares of capital stock of the Corporation valued at
their fair market value, as that term is defined in the preceding
paragraph.
(e) Term and Exercise of Options
An option shall be exercisable either in whole or in
part at any time after the date on which it is granted and prior to
its expiration date as provided in the grant of the option, which
shall be not more than ten (10) years from the date on which it is
granted or such shorter period as may be required by Article 3
hereof. The procedure for exercise of an option shall be as set
forth in the Plan and in the stock option agreement evidencing the
grant of the option. In the event of any conflict between the
language of the stock option agreement and the language of the
Plan, the language of the Plan shall govern. No option shall be
exercisable after its expiration date. If an ISO and a Non-ISO are
granted to an optionee on the same date, the right of the optionee
to exercise or surrender either such option shall not be
conditioned upon the optionee's failure to exercise or surrender
the other such option. Not less than ten (10) shares may be
purchased at any one time unless the number purchased is the total
number at the time purchasable under the option. During the
lifetime of the optionee, the option shall be exercisable only by
him and shall not be assignable or transferable by him and no other
person shall acquire any rights therein.
(f) Annual Dollar Limitation
The aggregate fair market value (as that term is
defined in Article 5(c) above) determined as of the time the option
is granted of the stock with respect to which options are
exercisable for the first time by the optionee during any calendar
year under all stock option plans of the Corporation and its parent
and subsidiary corporations shall not exceed $100,000.
(g) Legend Requiring Notification of Transfer of Shares
The Corporation in its discretion may require any
certificate representing shares purchased under the Plan to be
issued with a legend instructing the transfer agent to notify the
Corporation of any disposition of such shares by the optionee to
permit the Corporation to determine the tax consequences, if any,
to the Corporation of such disposition.
(h) Prior Outstanding Option
The provisions of this Article 5(h) apply only to
options granted prior to January 1, 1987 and do not apply to
options granted on or after January 1, 1987.
No option (for purposes of this Article 5(h) called
New Option) shall be exercisable while there is outstanding any
incentive stock option (as defined in Section 422 of the Code) which
incentive option was granted, before granting of the New Option, to
the person to whom the New Option is granted, to purchase stock in
the Corporation or in a corporation which, at the time the New
Option is granted, is a parent or subsidiary corporation of the
Corporation, or is a predecessor corporation of the Corporation or
such parent or subsidiary corporation. For purposes of determining
whether or not there is a prior outstanding option, options are
considered to be outstanding until they are exercised in full or
expire by lapse of time.
(i) Termination of Employment Except Death
In the event that an optionee shall cease to be
employed by the Corporation or Subsidiaries for any reason other
than his death and shall be no longer in the employ of any of them,
subject to the condition that no option shall be exercisable after
its expiration date, such optionee shall have the right to exercise
the option at any time within three (3) months after such
termination of employment to the extent his right to exercise such
option has not previously been exercised at the date of such
termination. Whether authorized leave of absence or absence for
military or governmental service shall constitute termination of
employment, for the purposes of the Plan, shall be determined by
the Committee, which determination shall be final and conclusive.
For purposes of this paragraph, in the case of an optionee who
becomes disabled within the meaning of Section 22(3)(e) of the Code, the
words "three months" shall be replaced by the words "one year".
(j) Death of Optionee and Transfer of Option
If the optionee shall die while in the employ of the
Corporation or a Subsidiary or within a period of three (3) months
after the termination of his employment with the Corporation and
all Subsidiaries and shall not have fully exercised the option, an
option may be exercised, subject to the condition that no option
shall be exercisable after its expiration date, to the extent that
the optionee's right to exercise such option at the time of his
death had not been previously exercised by the executors or
administrators of the optionee or by any person or persons who
shall have acquired the option directly from the optionee by
bequest or inheritance or by reason of the death of the decedent.
No option shall be transferable by the optionee
otherwise than by Will or the laws of descent and distribution.
(k) Recapitalization
Subject to any required action by the stockholders,
the number of shares of capital stock covered by each outstanding
option, and the price per share thereof in each such option, shall
be proportionately adjusted for any increase or decrease in the
number of issued shares of capital stock of the Corporation
resulting from a subdivision or consolidation of shares or the
payment of a stock dividend (but only on the capital stock) or any
other increase or decrease in the number of such shares effected
without receipt of consideration by the Corporation.
Subject to any required action by the stockholders
if the Corporation shall be the surviving corporation in any merger
or consolidation, each outstanding option shall pertain to and
apply to the securities to which a holder of the number of shares
of capital stock subject to the option would have been entitled. A
dissolution or liquidation of the Corporation or a merger or
consolidation in which the Corporation is not the surviving
corporation, shall cause each outstanding option to terminate
provided that each optionee shall, in such event, have the right
immediately prior to such dissolution or liquidation, or merger or
consolidation in which the Corporation is not the surviving
corporation, to exercise his option in whole or in part.
In the event of a change in the capital stock of the
Corporation as presently constituted, which is limited to a change
of all of its authorized shares with par value into the same number
of shares with a different par value or without par value, the
shares resulting from any such change shall be deemed to be the
capital stock within the meaning of the Plan.
To the extent that the foregoing adjustments relate
to stock or securities of the Corporation, such adjustments shall
be made by the Committee, whose determination in that respect shall
be final, binding and conclusive, provided that no ISO granted
pursuant to this Plan shall be adjusted in a manner that causes
that option to fail to continue to qualify as an ISO within the
meaning of Section 422 of the Code.
Except as hereinbefore expressly provided in this
Article 5(k), the optionee shall have no rights by reason of any
subdivision or consolidation of shares of stock of any class or the
payment of any stock dividend or any other increase or decrease in
the number of shares of stock of any class or by reason of any
dissolution, liquidation, merger, or consolidation or spin-off of
assets or stock of another corporation, and any issue by the
Corporation of shares of stock of any class, or securities
convertible into shares of stock of any class, shall not affect,
and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of capital stock subject to the
option.
The grant of an option pursuant to the Plan shall
not affect in any way the right or power of the Corporation to make
adjustments, reclassifications, reorganizations or changes of its
capital or business structure or to merge or to consolidate or to
dissolve, liquidate or sell, or transfer all or any part of its
business or assets.
(l) Rights as a Stockholder
An optionee or a transferee of an option shall have
no rights as a stockholder with respect to any shares covered by
his option until the date of the issuance of a stock certificate to
him for such shares. No adjustments shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or other
property) or distributions or other rights for which the record
date is prior to the date such stock certificate is issued, except
as provided in Article 5(k) hereof.
(m) Modification, Extension and Renewal of Options
Subject to the terms and conditions and within the
limitations of the Plan, the Committee may modify, extend or renew
outstanding options granted under the Plan, or accept the surrender
of outstanding options (to the extent not theretofore exercised)
and authorize the granting of new options in substitution therefor
(to the extent not theretofore exercised). Notwithstanding the
foregoing, however, no modification of an option shall, without
consent of the optionee, alter or impair any rights of obligations
under any option theretofore granted under the Plan.
(n) Investment Purpose
Each option under the Plan shall be granted on the
condition that the purchases of stock thereunder shall be for
investment purposes, and not with a view to resale or distribution
except that in the event the stock subject to such option is
registered under the Securities Act of 1933, as amended, or in the
event a resale of such stock without such registration would
otherwise be permissible, such condition shall be inoperative if in
the opinion of counsel for the Corporation such condition is not
required under the Securities Act of 1933, or any other applicable
law, regulation, or rule of any governmental agency.
(o) Surrender Rights
(i) General Rule. The Committee in its discretion
may incorporate into either an ISO or a Non-ISO and set forth in
the option agreement a provision to allow an optionee to surrender
the option in whole or in part in lieu of the exercise in whole or
in part of that option on any date that
(1) the fair market value of the shares subject
to such option exceeds the option price for such shares and
(2) the option to purchase such shares is
otherwise exercisable.
(ii) Procedure. The surrender of an option in whole
or in part shall be effected by the delivery of the option
agreement to the Committee together with a statement signed by the
optionee which specifies the number of shares as to which the
optionee surrenders such option (the "Surrendered Shares") and how
the optionee desires payment be made for such Surrendered Shares.
(iii) Payment. An optionee in exchange for the
Surrendered Shares shall receive a payment in cash or in shares, or
in a combination of cash and shares, equal in amount on the date
such surrender is effected to the excess of the fair market value
of the Surrendered Shares on such date over the option price for
the Surrendered Shares. The Committee acting in its absolute
discretion can approve or disapprove an optionee's request for
payment in whole or in part in cash and can make that payment in
cash or such combination of cash and shares as the Committee deems
appropriate. A request for payment only in shares shall be approved
and made in shares to the extent payment can be made in whole
shares and (at the discretion of the Committee) in cash in lieu of
any fractional share.
(iv) Restrictions. Any option agreement which
incorporates a provision to allow an optionee to surrender an
option in whole or in part also shall incorporate such additional
restrictions on the exercise or surrender of such option as the
Committee deems necessary to satisfy the conditions to the
exemption under Rule 16b-3 (or any successor exemption) to Section
16(b) of the Securities Exchange Act of 1934, as amended.
(p) Other Provisions
The option agreements authorized under the Plan
shall contain such other provisions, including, without limitation,
restrictions upon the exercise of the option, as the Committee
shall deem advisable. Any such option agreement with respect to an
ISO shall contain such limitations and restrictions upon the
exercise of the option as shall be necessary in order that such
option will continue to be an "incentive stock option" as defined
in Section 422 of the Code or to conform to any change in applicable law.
6. EFFECTIVE DATE AND TERM OF PLAN
This Plan, which was initially adopted as the Hughes
Supply, Inc. Employee Incentive Stock Option Plan became effective
upon its adoption by the Board of Directors on November 19, 1981
and shall remain in effect and options may be granted hereunder
from time to time until ten (10) years from May 17, 1988, the date
of stockholder approval of the most recent amendment to the Plan
increasing the number of shares as to which options ("Amendment
Options") may be granted hereunder or until terminated by the Board
of Directors in accordance with Article 8 hereof, whichever is
earlier. Notwithstanding the foregoing part of this Article 6, with
respect to any amendment to this Plan adopted for the purpose of
increasing the number of shares as to which Amendment Options may
be granted hereunder, the Plan shall remain in effect as to
Amendment Options and Amendment Options may be granted hereunder
from time to time until ten (10) years from the date such amendment
is adopted, or the date such amendment is approved by the
stockholders, or until the Plan, as amended, is terminated by the
Board of Directors in accordance with Article 8 hereof, whichever
is earlier. For purposes of options outstanding under the Plan the
Plan shall continue in effect until all outstanding options have
been exercised in full or surrendered in full or are no longer
exercisable.
7. INDEMNIFICATION OF COMMITTEE
In addition to such other rights of indemnification as
they may have as Directors or as members of the Committee, the
members of the Committee shall be indemnified by the Corporation
against the reasonable expenses, including attorneys' fees,
actually and necessarily incurred in connection with the defense of
any action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of
any action taken or failure to act under or in connection with the
Plan or any option granted thereunder, and against all amounts paid
by them in settlement thereof, not to exceed, in the judgment of
the Board of Directors, the estimated expense of litigating the
proceeding to conclusion (provided such settlement is approved by
independent legal counsel selected by the Corporation) or paid by
them in satisfaction of a judgment in any such action, suit or
proceeding, except in relation to matters as to which it shall be
adjudged in such action, suit or proceeding that the member of the
Committee is liable. A Committee member shall in writing offer the
Corporation the opportunity, at its own expense, to handle and
defend the same.
8. AMENDMENT OF THE PLAN
The Board of Directors of the Corporation may, insofar as
permitted by law, from time to time, with respect to any shares at
the time not subject to options, suspend or discontinue the Plan or
revise or amend it in any respect whatsoever except that, without
approval of the stockholders, no such revision or amendment shall
change the number of shares subject to the Plan, extend the term of
the Plan or the term of any option which may be granted under the
Plan, materially change the designation of the class of employees
eligible to receive options, or materially increase the benefits
accruing under the Plan (materially, in each case, within the
meaning of Rule 16b-3 implementing the Securities Exchange Act of
1934), decrease the price at which options may be granted, remove
the administration of the Plan from the Committee, or render any
member of the Committee eligible to receive an option under the
Plan while serving thereon. Furthermore, the Plan may not, without
the approval of the stockholders, be amended in any manner that
will cause any ISO's issued under it to fail to meet the
requirements of qualified stock options as defined in Section 422 of the
Code.
9. APPLICATION OF FUNDS
The proceeds received by the Corporation from the sale of
capital stock pursuant to options will be used for general
corporate purposes.
10. NO OBLIGATION TO EXERCISE OPTION
The granting of an option shall impose no obligation upon
the optionee to exercise such option.
11. WITHHOLDING
The exercise or surrender of any option granted under the
Plan shall constitute an optionee's full and complete consent to
whatever action the Committee directs to satisfy the federal and
state withholding requirements, if any, which the Committee in its
discretion deems applicable to such exercise or surrender.
12. CONSTRUCTION
The Plan shall be construed under the laws of the State
of Florida.
f:\corp\032\hughes\88plan.amd
HUGHES SUPPLY, INC.
AMENDED SENIOR EXECUTIVES' LONG-TERM INCENTIVE BONUS PLAN
Adopted by the Board of Directors
January 25, 1996
1. History and Purpose. The Hughes Supply, Inc. Senior
Executives' Long-Term Incentive Bonus Plan (the "Long-Term Plan")
was adopted by the Board of Directors of Hughes Supply, Inc. (the
"Company") on March 15, 1995 as an on-going performance based
incentive bonus plan to permit the Board of Directors (the "Board")
to provide for incentive compensation to reward key senior
executives for achieving specified Company performance goals. The
Long-Term Plan was approved by the shareholders of the Company at
the Annual Meeting of Shareholders held on May 23, 1995. The
Long-Term Plan was amended by the Board on January 25, 1996 to provide
for administration of the Long-Term Plan by the Senior Executives
Long-Term Incentive Bonus Plan Committee and to otherwise amend the
Long-Term Plan to permit payments under the Long-Term Plan to
qualify for exemption under Securities and Exchange Commission Rule
16b-3 ("Rule 16b-3").
2. Plan Administration. The Long-Term Plan shall be
administered by the Senior Executives Long-Term Incentive Bonus
Plan Committee (the "Plan Committee") appointed by the Board. The
Plan Committee shall consist of not less than two (2) members of
the Board. The Board may from time to time remove members from, or
add members to, the Plan Committee. Vacancies on the Plan
Committee, howsoever caused, shall be filled by the Board. The
Plan Committee shall elect one of its members as Chairman, and
shall hold meetings at such times and places as it may determine.
Acts of the Plan Committee taken by a majority of the Plan
Committee at a meeting at which a quorum is present, or acts
reduced to or approved in writing by a majority of the members of
the Plan Committee, shall be the valid acts of the Plan Committee.
Each member of the Plan Committee shall be a "disinterested person"
within the meaning of Rule 16b-3.
The interpretation and construction by the Plan Committee of
any provisions of the Long-Term Plan or of performance plan adopted
thereunder or incorporated therein shall be final. No member of
the Plan Committee shall be liable for any action or determination
made in good faith with respect to the Long-Term Plan or any
performance plan adopted thereunder or incorporated therein.
3. Operation of the Plan. Under the Long-Term Plan, the
Plan Committee, in its sole discretion, may establish separate
performance plans for separate performance periods, establish
performance goals for such performance periods, designate the
participants to participate in such performance plans, and
establish the performance plan bonus payments to be made to such
participants if the required performance goals are achieved.
4. Performance Periods. The Plan Committee may establish
individual performance plans under the Long-Term Plan for any
performance period consisting of one or more fiscal years of the
Company. Any such performance plan shall be designated by
reference to the final Company fiscal year included in the
applicable performance period so that, for example, the performance
plan for the performance period including the Company's three
fiscal years up to and including the 1997 fiscal year is designated
under the Long-Term Plan as the "1997 Performance Plan."
5. Performance Goals. With respect to any performance plan
adopted under the Long-Term Plan, the Plan Committee shall
determine Company performance goals which must be met during the
performance period of that performance plan to entitle a
participant in that performance plan to the payment of a
performance plan bonus payment. Such performance goals may be
defined with respect to earnings criteria, return on investment, or
any other measure of Company performance deemed by the Plan
Committee to be relevant to the Board's long-term goals for the
overall operation of the Company.
6. Plan Participants. The Plan Committee shall be solely
responsible for designating the participants under each performance
plan from among the Company's senior executive management employees
which the it considers most instrumental in achieving the required
performance goals.
7. Bonus Payments. In establishing a performance plan the
Plan Committee shall also establish the amount of, or method for
determining the amount of, and form of payment of, any performance
plan bonus payment which would become payable to each participant
under that performance plan if the required performance goals are
met.
8. Form of Bonus Payments. Under the Long-Term Plan, the
Plan Committee may specify that all or any portion of a performance
plan bonus payment may be in shares of common stock of the Company.
9. Maximum Number of Shares Awarded under the Long Term
Plan; Value of Shares Awarded. The maximum aggregate number of
shares of common stock which may be paid to participants as
performance plan bonus payments under performance plans adopted
under the Long-Term Plan shall be 100,000 shares. For any payment
of a performance plan bonus payment in shares of common stock, such
common stock shall be valued at its fair market value, determined
as the closing price of the common stock on the New York Stock
Exchange on the last trading day of the performance period for the
subject performance plan (the "Fair Market Value").
10. Term of Plan; Termination. The term of the Long-Term
Plan shall be deemed to have commenced with its adoption by the
Board on March 15, 1995 and shall end on the final day of the
Company's 2003 fiscal year unless terminated earlier by action of
the Board. No performance plan may be adopted under the Long-Term
Plan which shall extend beyond the stated term of the Long-Term
Plan. The Board may terminate the Long-Term Plan at any time
provided that any performance plan adopted prior to such
termination shall continue in effect until the end of the
applicable performance period and the payment of any performance
plan bonus payment required thereunder.
11. Comparable Prior Plans; Incorporation. The Long-Term
Plan has been adopted based, in large measure, upon Company's
favorable experience with similar ad hoc plans adopted in prior
years. Because it is anticipated but not required, that additional
performance plans adopted under the Long-Term Plan will be
comparable to these prior plans, the Existing Plans (as hereafter
defined in Section 12) are expressly incorporated into the Long-Term
Plan. By incorporating the Existing Plans into the Long-Term
Plan, the Existing Plans shall be subject to the aggregate
limitation of 100,000 shares of common stock for bonus payments
under the Long-Term Plan.
12. The Existing Plans Incorporated into the Long-Term Plan.
(a) On May 24, 1994 and March 15, 1995, respectively,
the Board established senior executives' long-term incentive bonus
plans for the three fiscal year performance periods ending on
January 24, 1997 (the "1997 Performance Plan") and for the three
fiscal year performance period ending on the last day of the fiscal
year to be ended January 30, 1998 (the "1998 Performance Plan")
(collectively, the "Existing Plans"). Each of the Existing Plans
is incorporated into the Long-Term Plan. The Long-Term Plan
approved by the shareholders at the 1995 Annual Meeting included
the Existing Plans incorporated therein.
(b) Each of the Existing Plans has been established with
performance goals which require continuing growth in the Company's
earnings per share during the applicable performance period. The
Chief Executive Officer, the President, and the Chief Financial
Officer are designated as participants under each of the Existing
Plans. The Plan Committee shall have the sole discretion to
interpret and apply the performance goals and to approve any
payment to the participants under the Existing Plans.
(c) Under each of the Existing Plans the plan
participants would receive a performance plan bonus payment,
depending upon the Company's earnings for the applicable
performance period, of from 25% to 100% of base salary for the
final year of such performance period. Such performance plan bonus
payment, if any, would be paid 50% in cash and 50% in common stock
following the end of the final year of the performance period. The
number of shares of common stock applicable to such possible
aggregate performance plan bonus payments would be the number of
shares, at the Fair Market Value, represented by 50% of the maximum
estimated aggregate amount of such performance plan bonus payments.
The Plan Committee shall have the sole discretion to determine the
amount of any performance plan bonus payment and the amount of any
such performance plan bonus payment payable in stock and the amount
of any such bonus plan payment payable in cash under the Existing
Plans.
13. Registration of Plan Bonus Shares. Shares of the
Company's common capital stock to be issued pursuant to the Long-Term
Plan will be registered under the Securities Act of 1933 if
such registration is determined, in the opinion of management of
the Company and its legal counsel, to be required or advisable. It
is also the intention of the Company to register the shares on the
New York Stock Exchange.
14. Six Month Holding Period Applicable to Rule 16b-3
Exemption. In connection with any performance plan bonus payment
under the Long-Term Plan payable in stock the Plan Committee shall
advise each participant receiving such payment in stock of the
provisions of subparagraph (1) of paragraph (c) of Rule 16b-3 which
require the participant to hold such shares of stock for a period
of six after the last day of the performance period for which such
payment is made as a condition to the availability of the exemption
under Rule 16b-3.
(f:\corp\032\hughes\ltip.amd)
EXHIBIT 10.11(a)
AMENDMENT TO LEASE AGREEMENT
STATE OF NORTH CAROLINA )
)SS:
COUNTY OF UNION )
THIS Amendment to Lease Agreement ("Amendment") is made this
23rd day of December, 1986 by and between Union Warehouse &
Trucking Company, Monroe, North Carolina, d/b/a Union Warehouse &
Realty Company, hereinafter referred to as "Lessor" and USCO, Inc.,
hereinafter referred to as "Lessee."
W I T N E S S E T H:
WHEREAS, Lessor and Lessee entered into that certain Lease
Agreement (the "Lease Agreement") dated March 1, 1985, with regard
to property described as follows:
Showroom & Warehouse - 610 E. Windsor St., Monroe, N.C.
and;
WHEREAS, Lessor and Lessee desire to further clarify and amend
the terms thereof as set forth more fully herein.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein and the payment by Lessee to Lessor of Ten Dollars
($10.00), the receipt and sufficiency of which is hereby
acknowledged, the parties agree to amend the Lease Agreement as
follows:
1. The foregoing recitals are true and correct and
incorporated herein by reference.
2. The term "Lessor" shall refer to Union Warehouse &
Trucking Company, d/b/a Union Warehouse & Realty Company and its
successors and assigns. The term "Lessee" shall refer to USCO,
Inc. and its successors and assigns.
3. Lessee shall renew the Lease Agreement for one (1)
additional five (5) year period ("Period") commencing upon the
expiration of the initial term referenced therein and ending on
February 28, 1990. Base Rent for the period shall be Six Hundred
Dollars ($600.00) per month. Commencing on the 1st day of March,
1990 (the "Adjustment Date"), and continuing on the same day of
each year thereafter during the Period, the Base Rent set forth
shall be adjusted in accordance with the following:
(a) The Consumer Price Index - U.S. City Average - All
Urban Consumer ("Index") in effect and published during the
calendar month in which the term of the Lease Agreement commenced
shall be the Base Period Index."
(b) The Base Period Index shall be compared with the
Index for the same calendar month for the Adjustment Date. If the
Index for the Adjustment Date is higher than the Base Period Index,
then the monthly rent for the next calendar year of the lease shall
be increased by one hundred percent (100%) of the percentage
increase of the Index for the Adjustment Date over the Base Period
Index.
Every year thereafter, the Index for the same calendar month
shall be compared with the Index for the immediately preceding
Adjustment Date. If the Index for the same calendar month is
higher than the Index for the immediately preceding Adjustment
Date, then the rent for the next ensuing one (1) year period shall
be increased by one hundred percent (100%) of the percentage
increase of the Index for the same calendar month over the Index
for the immediately preceding Adjustment Date. If the Index for
the same calendar month has not been published, it is agreed that
the Index as issued and published for the latest preceding month
shall be used in determining the Adjustment Rent.
(c) If the Bureau of Labor Statistics discontinues
publication of the Index, publishes the Index less frequently, or
alters the Index in a material manner, then the Lessor and Lessee
may adopt a substitute index or procedure which reasonably reflects
and monitors consumer prices as nearly as possible in the same
manner as the Index.
During the Period, Lessee also shall pay the amount of any
annual taxes and insurance costs in excess of the respective
amounts applicable on March 1, 1985.
4. The following provision of the Lease Agreement is deleted
in its entirety:
It is further agreed by and between the
parties hereto that should the Lessor choose
to use the premises herein leased for some
other purpose, he shall notify the Lessee in
writing of his intention to do so at least six
months prior to the expiration of this lease.
5. In consideration of the benefits accruing to Lessor under
this Lease Agreement and Lessee's renewal thereof, and other good
and valuable consideration the receipt and sufficiency of which is
acknowledged by Lessor, Lessor does hereby grant to Lessee an
irrevocable option to purchase the property described in the Lease
Agreement ("Leased Premises") and all fixtures, equipment and
personalty owned by Lessor and located on the Leased Premises
(collectively called the "Leased Premises" in this Paragraph 5).
Lessee may exercise this option by delivering a signed written
notice thereof to Lessor not less than sixty (60) days prior to the
end of the renewal period of this Lease Agreement. If the option
is duly exercised, then this Lease Agreement shall continue in
effect pending closing. Unless extended pursuant to subparagraph
(c) below, for cure of title objections, closing shall occur on or
before February 28, 1995. If the option is exercised, the purchase
and sale shall be governed and closed pursuant to the following
terms:
(a) Purchase Price. The purchase price of the Leased
Premises shall be equal to the fair market value of the Leased
Premises as established by the average of two MAI appraisals, one
of which shall be completed by an appraiser selected by the Lessee
at Lessee's expense and one of which shall be completed by an
appraiser selected by the Lessor at Lessor's expense. Such
appraisals shall be completed at least fifteen (15) days prior to
closing.
(b) Payment. The purchase price, subject to prorations
as hereinafter provided, shall be payable by cashier's check or
wire transfer at closing.
(c) Title Insurance. On or before thirty (30) days
prior to closing Lessee shall obtain, at Lessor's expense, a Title
Insurance Commitment ("Commitment) as to the Leased Premises issued
by an insurance company acceptable to Lessee agreeing to issue to
Lessee a marketability owner's policy in the amount of the purchase
price, insuring Lessee's title to the Leased Premises with all
standard exceptions deleted except then-current ad valorem taxes
and subject only to those encumbrances and other title matters
acceptable to Lessee ("Permitted Exceptions"). Within five (5)
days after receipt of the Commitment, Lessee shall provide Lessor
with written notice of any encumbrance or title matter which is
unsatisfactory to Lessee with respect to the Leased Premises.
Thereupon, Lessor shall use its best efforts to cure said
objection(s) on or before one hundred twenty (120) days after
Lessor's receipt of Lessee's notice of objection(s), and closing
shall be delayed accordingly. If Lessor is unable to cure an
objection to title, Lessee shall have the option to proceed with
the purchase, with a corresponding reduction in price, or to
terminate the purchase transaction without liability to Lessor, and
without loss or waiver of Lessee's rights as tenant under the Lease
Agreement.
(d) Survey. The property may be surveyed prior to
closing at Lessee's expense by a surveyor selected by Lessee. In
the event the survey reflects any survey matter or defect
unacceptable to Lessee, other than Permitted Exceptions, same shall
be treated as an objection to title and shall be governed by sub-
paragraph (c), above.
(e) Documents. At closing, Lessor shall deliver to
Lessee: (1) good, sufficient, marketable fee simple title to the
Leased Premises by General Warranty Deed subject only to the terms
of this Lease Agreement and the Permitted Exceptions; (2) an
Affidavit attesting to the absence of any claim or suit,
outstanding judgment, rights of possession adverse to Lessee's
possession, bankruptcy, assessments, mortgage, financing statement,
or claim of lien pending against Lessor or the Leased Premises, and
as to other matters and in form as reasonably required by Lessee;
(3) a Nonforeign Affidavit attesting that Lessor is not a "foreign
person" within the meaning of Section 1445 of the Internal Revenue Code
of 1954, as amended, in the form as required by Lessee; (4) bill of
sale as to fixtures and personalty; (5) an Assignment of Lessor's
rights as landlord under this Lease; and (6) such other documents
as may be reasonably requested by Lessee.
(f) Expenses. Lessor shall pay for all recording and
transfer taxes levied on the deed or otherwise payable by virtue of
the purchase and sale transaction, title search fees, and the title
insurance premium. Lessee shall pay for the cost of the survey, if
obtained, and for the MAI appraisal.
(g) Prorations. Real estate taxes, public assessments
not yet due and payable, rents, security deposits, maintenance,
utility and fuel charges, and all other items normally adjusted at
closing, shall be prorated at closing.
(h) Assignment. This option to purchase may be assigned
freely by Lessee together with, or separately from, Lessee's rights
as tenant under this Lease Agreement.
(i) Memorandum of Option. Lessor agrees to execute a
recordable Memorandum of this option to purchase upon request by
Lessee.
(j) Risk of Loss. Except as otherwise provided in this
Lease Agreement, risk of loss shall pass to Lessee at closing.
(k) Possession. Free and unencumbered possession of the
Leased Premises shall be delivered to Lessee by Lessor at closing,
subject, however, to the previously existing rights of Lessee, as
tenant, under this Lease Agreement.
6. In the event either party to the Lease Agreement shall be
required to retain an attorney to enforce its rights under any
provision of the Lease Agreement against the other party to the
Lease Agreement, the party who prevails in any dispute with, or
enforcement effort against the other party, shall be entitled to
recover from the other party such prevailing party's reasonable
attorneys' fees and costs incurred in negotiation, at trial and
upon any appeal as the result of such dispute or enforcement
effort.
7. During the term of the Lease Agreement and the renewal
thereof, Lessor shall be responsible for structural maintenance of
the property and Lessee shall be responsible for all other
maintenance items.
8. The parties by execution of this Amendment to Lease
Agreement hereby amend the Lease Agreement as set forth herein, and
in so doing, reaffirm in all respects the term of the Lease
Agreement as so amended.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment to Lease Agreement to be signed in its corporate name by
its officers thereunto duly authorized as of the day and year first
above written.
WITNESSES: LESSOR:
UNION WAREHOUSE & TRUCKING
COMPANY
___________________________ By:________________________
___________________________ (Corporate Seal)
LESSEE:
USCO, INCORPORATED
___________________________ By:___________________
Its: President
___________________________ (Corporate Seal)
STATE OF )
)SS :
COUNTY OF )
I HEREBY CERTIFY that on this day, before me, an officer duly
authorized in the State and County aforesaid to take
acknowledgements, personally appeared __________________________,
well known to me and known to be the President of the corporation
named in the foregoing instrument, and that he acknowledged
executing the same on behalf of the corporation in the presence of
two subscribing witnesses, freely and voluntarily under authority
duly vested in him by said corporation and that the seal affixed
thereto is the true corporate seal of said corporation.
WITNESS my hand and official seal in the County and State last
aforesaid this ___ day of ______________, 199__.
___________________________
NOTARY PUBLIC
My Commission Expires:
STATE OF )
)SS:
COUNTY OF )
I HEREBY CERTIFY that on this day, before me, an officer duly
authorized in the State and County aforesaid to take
acknowledgements, personally appeared __________________________,
well known to me and known to be the President of the corporation
named in the foregoing instrument, and that he acknowledged
executing the same on behalf of the corporation in the presence of
two subscribing witnesses, freely and voluntarily under authority
duly vested in him by said corporation and that the seal affixed
thereto is the true corporate seal of said corporation.
WITNESS my hand and official seal in the County and State last
aforesaid this ___ day of ______________, 199__.
___________________________
NOTARY PUBLIC
My Commission Expires:
f:\Corp\032\Hughes\Used\Leaseamd.2
LEASE AGREEMENT
STATE OF NORTH CAROLINA
COUNTY OF UNION
THIS LEASE made this 1st day of March, 1985 between UNION
WAREHOUSE & TRUCKING CO., MONROE, NORTH CAROLINA hereinafter called
the LESSORS, and USCO, INC., hereinafter called the LESSEE.
WITNESSETH:
That the said Lessors have granted and leased, and by these
presents so grant and lease unto said Lessee all that property
described as follows:
Showroom & Warehouse - 610 E. Windsor St.,
Monroe, N.C.
TO HAVE AND TO HOLD the said premises unto the said Lessee,
for the term of Five (5) years beginning on 1st day of March, 1985
and ending on the 28th day of February, 1990, yielding and paying
therefore during the said term the monthly rental of Six Hundred
Dollars ($600.00) payable in advance on or before the 10th day of
each month.
It is agreed that the Lessee shall have the right and first
option of a renewal of this lease, provided terms thereof can be
satisfactorily negotiated between the parties, upon the Lessee
giving Sixty (60) days notice prior to the expiration of such five
(5) Year term.
It is further agreed by the Lessee to pay any increase in
property taxes and insurance over the base year of this lease, upon
presentation of the documents by the Lessor.
It is further agreed the Lessee may sublease the premises but
in such case it will remain liable for the rent. The Lessee, with
the written consent of the Lessors, may assign this lease, and
thereafter shall be exonerated from all liability under the terms
of this lease or renewal thereof.
It is further agreed the Lessors shall carry fire insurance on
the premises. The destruction of the premises by fire or other
casualty shall suspend the running of the term of this lease, and
shall terminate it if the parties so agree. At the option of the
Lessee the insurance on the main building shall be applied to the
reconstruction of said building. If the principal building is
damaged, but not destroyed, the rent payable under the terms of
this lease shall cease until the building is repaired by the
Lessors so as to be suitable for use.
It is further agreed the Lessee may make improvements on the
existing building and may erect buildings on the vacant lot
included in this lease, provided that such improvements or
buildings comply with all existing zoning laws, ordinances and
regulations, and so that the existing building shall not be
defaced. All such improvements shall be at the expense of the
Lessee, and such fixtures shall become a part of the realty.
It is further agreed by and between the parties hereto that
should the Lessor choose to use the premises herein leased for some
other purpose, he shall notify the Lessee in writing of his
intention to do so at least six months prior to the expiration of
this lease.
Its further agreed by and between the parties hereto at the
expiration of this Lease all rents due must be paid in full before
any goods and chattels are removed from the premises herein leased.
IN WITNESS WHEREOF, the said parties have hereunto set their
hand and seals in duplicate this 1st day of March, 1985.
Witnessed by:
_____________________________ UNION WAREHOUSE & TRUCKING COMPANY
"Lessor"
_____________________________ By:_______________________________
SECRETARY President (Seal)
_____________________________ USCO, INCORPORATED
"Lessee"
_____________________________ By:_______________________________
ASSISTANT SECRETARY President (Seal)
STATE OF NORTH CAROLINA )
)
COUNTY OF UNION )
This 1st day of March, 1985, personally came before me
_______________________________ who, being by me duly sworn, says that
he is the President of UNION WAREHOUSE & TRUCKING CO., and that the
seal affixed to the foregoing instrument in writing is the corporate
seal of the company and that its authority duly given. And the said
_____________________________________________ acknowledged the said
writing to be the act and deed of said corporation.
_______________________________
Notary Public
My Commission expires: ______________________
STATE OF NORTH CAROLINA )
)
COUNTY OF _____________ )
This ____ day of _______________, 199__, personally came before
me _______________________________ who, being by me duly sworn, says
that he is the President of USCO, INCORPORATED, MONROE, N.C., and that
the seal affixed to the foregoing instrument in writing is the
corporate seal of the company, and that its authority duly given, and
the said _____________________________________________ acknowledged
the said writing to be the act and deed of said corporation.
_______________________________
Notary Public
My Commission expires: ______________________
f:\Corp\032\Hughes\Used\Leaseamd.2
AMENDMENT TO LEASE AGREEMENT
STATE OF NORTH CAROLINA )
)SS:
COUNTY OF UNION )
THIS Amendment to Lease Agreement ("Amendment") is made this 23rd
day of December, 1986 by and between Union Warehouse & Trucking
Company, Monroe, North Carolina, d/b/a Union Warehouse & Realty
Company, hereinafter referred to as "Lessor" and USCO, Inc.,
hereinafter referred to as "Lessee."
W I T N E S S E T H:
WHEREAS, Lessor and Lessee entered into that certain Lease
Agreement (the "Lease Agreement") dated March 1, 1985, with regard to
property described as follows:
113-115 Henderson Street, Monroe, North Carolina
and;
WHEREAS, Lessor and Lessee desire to further clarify and amend
the terms thereof as set forth more fully herein.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein and the payment by Lessee to Lessor of Ten Dollars
($10.00), the receipt and sufficiency of which is hereby acknowledged,
the parties agree to amend the Lease Agreement as follows:
9. The foregoing recitals are true and correct and incorporated
herein by reference.
10. The term "Lessor" shall refer to Union Warehouse & Trucking
Company, d/b/a Union Warehouse & Realty Company and its successors and
assigns. The term "Lessee" shall refer to USCO, Inc. and its
successors and assigns.
11. Lessee shall renew the Lease Agreement for one (1)
additional five (5) year period ("Period") commencing upon the
expiration of the initial term referenced therein and ending on
February 28, 1990. Base Rent for the period shall be One Thousand
Four Hundred Fifty Dollars ($1,450.00) per month. Commencing on the
1st day of March, 1990 (the "Adjustment Date"), and continuing on the
same day of each year thereafter during the Period, the Base Rent set
forth shall be adjusted in accordance with the following:
(a) The Consumer Price Index - U.S. City Average - All
Urban Consumer ("Index") in effect and published during the calendar
month in which the term of the Lease Agreement commenced shall be the
Base Period Index."
(b) The Base Period Index shall be compared with the Index
for the same calendar month for the Adjustment Date. If the Index for
the Adjustment Date is higher than the Base Period Index, then the
monthly rent for the next calendar year of the lease shall be
increased by one hundred percent (100%) of the percentage increase of
the Index for the Adjustment Date over the Base Period Index.
Every year thereafter, the Index for the same calendar month
shall be compared with the Index for the immediately preceding
Adjustment Date. If the Index for the same calendar month is higher
than the Index for the immediately preceding Adjustment Date, then the
rent for the next ensuing one (1) year period shall be increased by
one hundred percent (1008) of the percentage increase of the Index for
the same calendar month over the Index for the immediately preceding
Adjustment Date. If the Index for the same calendar month has not
been published, it is agreed that the Index as issued and published
for the latest preceding month shall be used in determining the
Adjustment Rent.
(c) If the Bureau of Labor Statistics discontinues
publication of the Index, publishes the Index less frequently, or
alters the Index in a material manner, then the Lessor and Lessee may
adopt a substitute index or procedure which reasonably reflects and
monitors consumer prices as nearly as possible in the same manner as
the Index.
During the Period, Lessee also shall pay the amount of any annual
taxes and insurance costs in excess of the respective amounts
applicable on March 1, 1985.
12. The following provision of the Lease Agreement is deleted in
its entirety:
It is further agreed by and between the parties
hereto that should the Lessor choose to use the
premises herein leased for some other purpose, he
shall notify the Lessee in writing of his
intention to do so at least six months prior to
the expiration of this lease.
13. In consideration of the benefits accruing to Lessor under
this Lease Agreement and Lessee's renewal thereof, and other good and
valuable consideration the receipt and sufficiency of which is
acknowledged by Lessor, Lessor does hereby grant to Lessee an
irrevocable option to purchase the property described in the Lease
Agreement ("Leased Premises") and all fixtures, equipment and
personalty owned by Lessor and located on the Leased Premises
(collectively called the "Leased Premises" in this Paragraph 5).
Lessee may exercise this option by delivering a signed written notice
thereof to Lessor not less than sixty (60) days prior to the end of
the renewal period of this Lease Agreement. If the option is duly
exercised, then this Lease Agreement shall continue in effect pending
closing. Unless extended pursuant to subparagraph (c) below, for cure
of title objections, closing shall occur on or before February 28,
1995. If the option is exercised, the purchase and sale shall be
governed and closed pursuant to the following terms:
(a) Purchase Price. The purchase price of the Leased
Premises shall be equal to the fair market value of the Leased
Premises as established by the average of two MAI appraisals, one of
which shall be completed by an appraiser selected by the Lessee at
Lessee's expense and one of which shall be completed by an appraiser
selected by the Lessor at Lessor's expense. Such appraisals shall be
completed at least fifteen (15) days prior to closing.
(b) Payment. The purchase price, subject to prorations as
hereinafter provided, shall be payable by cashier's check or wire
transfer at closing.
(c) Title Insurance. On or before thirty (30) days prior
to closing Lessee shall obtain, at Lessor's expense, a Title Insurance
Commitment ("Commitment) as to the Leased Premises issued by an
insurance company acceptable to Lessee agreeing to issue to Lessee a
marketability owner's policy in the amount of the purchase price,
insuring Lessee's title to the Leased Premises with all standard
exceptions deleted except then-current ad valorem taxes and subject
only to those encumbrances and other title matters acceptable to
Lessee ("Permitted Exceptions"). Within five (5) days after receipt
of the Commitment, Lessee shall provide Lessor with written notice of
any encumbrance or title matter which is unsatisfactory to Lessee with
respect to the Leased Premises. Thereupon, Lessor shall use its best
efforts to cure said objection(s) on or before one hundred twenty
(120) days after Lessor's receipt of Lessee's notice of objection(s),
and closing shall be delayed accordingly. If Lessor is unable to cure
an objection to title, Lessee shall have the option to proceed with
the purchase, with a corresponding reduction in price, or to terminate
the purchase transaction without liability to Lessor, and without loss
or waiver of Lessee's rights as tenant under the Lease Agreement.
(d) Survey. The property may be surveyed prior to closing
at Lessee's expense by a surveyor selected by Lessee. In the event
the survey reflects any survey matter or defect unacceptable to
Lessee, other than Permitted Exceptions, same shall be treated as an
objection to title and shall be governed by subparagraph (c), above.
(e) Documents. At closing, Lessor shall deliver to Lessee:
(1) good, sufficient, marketable fee simple title to the Leased
Premises by General Warranty Deed subject only to the terms of this
Lease Agreement and the Permitted Exceptions; (2) an Affidavit
attesting to the absence of any claim or suit, outstanding judgment,
rights of possession adverse to Lessee's possession, bankruptcy,
assessments, mortgage, financing statement, or claim of lien pending
against Lessor or the Leased Premises, and as to other matters and in
form as reasonably required by Lessee; (3) a Nonforeign Affidavit
attesting that Lessor is not a "foreign person" within the meaning of
Section 1445 of the Internal Revenue Code of 1954, as amended, in the form
as required by Lessee; (4) bill of sale as to fixtures and personalty;
(5) an Assignment of Lessor's rights as landlord under this Lease; and
(6) such other documents as may be reasonably requested by Lessee.
(f) Expenses. Lessor shall pay for all recording and
transfer taxes levied on the deed or otherwise payable by virtue of
the purchase and sale transaction, title search fees, and the title
insurance premium. Lessee shall pay for the cost of the survey, if
obtained, and for the MAI appraisal.
(g) Prorations. Real estate taxes, public assessments not
yet due and payable, rents, security deposits, maintenance, utility
and fuel charges, and all other items normally adjusted at closing,
shall be prorated at closing.
(h) Assignment. This option to purchase may be assigned
freely by Lessee together with, or separately from, Lessee's rights as
tenant under this Lease Agreement.
(i) Memorandum of Option. Lessor agrees to execute a
recordable Memorandum of this option to purchase upon request by
Lessee.
(j) Risk of Loss. Except as otherwise provided in this
Lease Agreement, risk of loss shall pass to Lessee at closing.
(k) Possession. Free and unencumbered possession of the
Leased Premises shall be delivered to Lessee by Lessor at closing,
subject, however, to the previously existing rights of Lessee, as
tenant, under this Lease Agreement.
14. In the event either party to the Lease Agreement shall be
required to retain an attorney to enforce its rights under any
provision of the Lease Agreement against the other party to the Lease
Agreement, the party who prevails in any dispute with, or enforcement
effort against the other party, shall be entitled to recover from the
other party such prevailing party's reasonable attorneys' fees and
costs incurred in negotiation, at trial and upon any appeal as the
result of such dispute or enforcement effort.
15. During the term of the Lease Agreement and the renewal
thereof, Lessor shall be responsible for structural maintenance of the
property and Lessee shall be responsible for all other maintenance
items.
16. The parties by execution of this Amendment to Lease
Agreement hereby amend the Lease Agreement as set forth herein, and in
so doing, reaffirm in all respects the term of the Lease Agreement as
so amended.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment to Lease Agreement to be signed in its corporate name by its
officers thereunto duly authorized as of the day and year first above
written.
WITNESSES: LESSOR:
UNION WAREHOUSE & TRUCKING
COMPANY
___________________________ By:________________________
___________________________ (Corporate Seal)
LESSEE:
USCO, INCORPORATED
___________________________ By:
Its: President
___________________________ (Corporate Seal)
STATE OF )
)SS :
COUNTY OF )
I HEREBY CERTIFY that on this day, before me, an officer duly
authorized in the State and County aforesaid to take acknowledgements,
personally appeared __________________________, well known to me and
known to be the President of the corporation named in the foregoing
instrument, and that he acknowledged executing the same on behalf of
the corporation in the presence of two subscribing witnesses, freely
and voluntarily under authority duly vested in him by said corporation
and that the seal affixed thereto is the true corporate seal of said
corporation.
WITNESS my hand and official seal in the County and State last
aforesaid this ___ day of ______________, 199__.
___________________________
NOTARY PUBLIC
My Commission Expires:
STATE OF )
)SS:
COUNTY OF )
I HEREBY CERTIFY that on this day, before me, an officer duly
authorized in the State and County aforesaid to take acknowledgements,
personally appeared __________________________, well known to me and
known to be the President of the corporation named in the foregoing
instrument, and that he acknowledged executing the same on behalf of
the corporation in the presence of two subscribing witnesses, freely
and voluntarily under authority duly vested in him by said corporation
and that the seal affixed thereto is the true corporate seal of said
corporation.
WITNESS my hand and official seal in the County and State last
aforesaid this ___ day of ______________, 199__.
___________________________
NOTARY PUBLIC
My Commission Expires:
f:\Corp\032\Hughes\Used\Leaseamd.3
LEASE AGREEMENT
STATE OF NORTH CAROLINA
COUNTY OF UNION
THIS LEASE made this 1st day of March, 1985 between UNION
WAREHOUSE & TRUCKING CO., MONROE, NORTH CAROLINA hereinafter called
the LESSORS, and USCO, INC., hereinafter called the LESSEE.
WITNESSETH:
That the said Lessors have granted and leased, and by these
presents so grant and lease unto said Lessee all that property
described as follows:
113-115 Henderson Street, Monroe, North Carolina
TO HAVE AND TO HOLD the said premises unto the said Lessee, for
the term of Five (5) years beginning on 1st day of March, 19__ and
ending on the 28th day of February, 1990, yielding and paying
therefore during the said term the monthly rental of One Thousand Four
Hundred Fifty Dollars ($1,450.00) Dollars payable in advance on or
before the 10th day of each month.
It is agreed that the Lessee shall have the right and first
option of a renewal of this lease, provided terms thereof can be
satisfactorily negotiated between the parties, upon the Lessee giving
Sixty (60) days notice prior to the expiration of such five (5) Year
term.
It is further agreed by the Lessee to pay any increase in
property taxes and insurance over the base year of this lease, upon
presentation of the documents by the Lessor.
It is further agreed the Lessee may sublease the premises but in
such case it will remain liable for the rent. The Lessee, with the
written consent of the Lessors, may assign this lease, and thereafter
shall be exonerated from all liability under the terms of this lease
or renewal thereof.
It is further agreed the Lessors shall carry fire insurance on
the premises. The destruction of the premises by fire or other
casualty shall suspend the running of the term of this lease, and
shall terminate it if the parties so agree. At the option of the
Lessee the insurance on the main building shall be applied to the
reconstruction of said building. If the principal building is
damaged, but not destroyed, the rent payable under the terms of this
lease shall cease until the building is repaired by the Lessors so as
to be suitable for use.
It is further agreed the Lessee may make improvements on the
existing building and may erect buildings on the vacant lot included
in this lease, provided that such improvements or buildings comply
with all existing zoning laws, ordinances and regulations, and so that
the existing building shall not be defaced. All such improvements
shall be at the expense of the Lessee, and such fixtures shall become
a part of the realty.
It is further agreed by and between the parties hereto that
should the Lessor choose to use the premises herein leased for some
other purpose, he shall notify the Lessee in writing of his intention
to do so at least six months prior to the expiration of this lease.
Its further agreed by and between the parties hereto at the
expiration of this Lease all rents due must be paid in full before any
goods and chattels are removed from the premises herein leased.
IN WITNESS WHEREOF, the said parties have hereunto set their hand
and seals in duplicate this 1st day of March, 1985.
Witnessed by:
_____________________________ UNION WAREHOUSE & TRUCKING COMPANY
"Lessor"
_____________________________ By:_______________________________
SECRETARY President (Seal)
_____________________________ USCO, INCORPORATED
"Lessee"
_____________________________ By:_______________________________
ASSISTANT SECRETARY President (Seal)
STATE OF NORTH CAROLINA )
)
COUNTY OF UNION )
This 1st day of March, 1985, personally came before me
_______________________________ who, being by me duly sworn, says that
he is the President of UNION WAREHOUSE & TRUCKING CO., and that the
seal affixed to the foregoing instrument in writing is the corporate
seal of the company and that its authority duly given. And the said
_____________________________________________ acknowledged the said
writing to be the act and deed of said corporation.
_______________________________
Notary Public
My Commission expires: ______________________
STATE OF NORTH CAROLINA )
)
COUNTY OF UNION )
This 1st day of March, 1985, personally came before me
_______________________________ who, being by me duly sworn, says that
he is the President of USCO, INCORPORATED, MONROE, N.C., and that the
seal affixed to the foregoing instrument in writing is the corporate
seal of the company, and that its authority duly given, and the said
_____________________________________________ acknowledged the said
writing to be the act and deed of said corporation.
_______________________________
Notary Public
My Commission expires: ______________________
f:\Corp\032\Hughes\Used\Leaseamd.3
AMENDMENT TO LEASE AGREEMENT
STATE OF NORTH CAROLINA )
)SS:
COUNTY OF UNION )
THIS Amendment to Lease Agreement ("Amendment") is made this 23rd
day of December, 1986 by and between Union Warehouse & Trucking
Company, Monroe, North Carolina, d/b/a Union Warehouse & Realty
Company, hereinafter referred to as "Lessor" and USCO, Inc.,
hereinafter referred to as "Lessee."
W I T N E S S E T H:
WHEREAS, Lessor and Lessee entered into that certain Lease
Agreement (the "Lease Agreement") dated March 1, 1985, with regard to
property described as follows:
1840 Shelton Avenue, Statesville, N.C.
and;
WHEREAS, Lessor and Lessee desire to further clarify and amend
the terms thereof as set forth more fully herein.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein and the payment by Lessee to Lessor of Ten Dollars
($10.00), the receipt and sufficiency of which is hereby acknowledged,
the parties agree to amend the Lease Agreement as follows:
17. The foregoing recitals are true and correct and incorporated
herein by reference.
18. The term "Lessor" shall refer to Union Warehouse & Trucking
Company, d/b/a Union Warehouse & Realty Company and its successors and
assigns. The term "Lessee" shall refer to USCO, Inc. and its
successors and assigns.
19. Lessee shall renew the Lease Agreement for one (1)
additional five (5) year period ("Period") commencing upon the
expiration of the initial term referenced therein and ending on
February 28, 1990. Base Rent for the period shall be Three Thousand
Two Hundred ($3,200.00) per month. Commencing on the 1st day of
March, 1990 (the "Adjustment Date"), and continuing on the same day of
each year thereafter during the Period, the Base Rent set forth shall
be adjusted in accordance with the following:
(a) The Consumer Price Index - U.S. City Average - All
Urban Consumer ("Index") in effect and published during the calendar
month in which the term of the Lease Agreement commenced shall be the
Base Period Index."
(b) The Base Period Index shall be compared with the Index
for the same calendar month for the Adjustment Date. If the Index for
the Adjustment Date is higher than the Base Period Index, then the
monthly rent for the next calendar year of the lease shall be
increased by one hundred percent (100%) of the percentage increase of
the Index for the Adjustment Date over the Base Period Index.
Every year thereafter, the Index for the same calendar month
shall be compared with the Index for the immediately preceding
Adjustment Date. If the Index for the same calendar month is higher
than the Index for the immediately preceding Adjustment Date, then the
rent for the next ensuing one (1) year period shall be increased by
one hundred percent (1008) of the percentage increase of the Index for
the same calendar month over the Index for the immediately preceding
Adjustment Date. If the Index for the same calendar month has not
been published, it is agreed that the Index as issued and published
for the latest preceding month shall be used in determining the
Adjustment Rent.
(c) If the Bureau of Labor Statistics discontinues
publication of the Index, publishes the Index less frequently, or
alters the Index in a material manner, then the Lessor and Lessee may
adopt a substitute index or procedure which reasonably reflects and
monitors consumer prices as nearly as possible in the same manner as
the Index.
During the Period, Lessee also shall pay the amount of any annual
taxes and insurance costs in excess of the respective amounts
applicable on March 1, 1985.
20. The following provision of the Lease Agreement is deleted in
its entirety:
It is further agreed by and between the parties
hereto that should the Lessor choose to use the
premises herein leased for some other purpose, he
shall notify the Lessee in writing of his
intention to do so at least six months prior to
the expiration of this lease.
21. In consideration of the benefits accruing to Lessor under
this Lease Agreement and Lessee's renewal thereof, and other good and
valuable consideration the receipt and sufficiency of which is
acknowledged by Lessor, Lessor does hereby grant to Lessee an
irrevocable option to purchase the property described in the Lease
Agreement ("Leased Premises") and all fixtures, equipment and
personalty owned by Lessor and located on the Leased Premises
(collectively called the "Leased Premises" in this Paragraph 5).
Lessee may exercise this option by delivering a signed written notice
thereof to Lessor not less than sixty (60) days prior to the end of
the renewal period of this Lease Agreement. If the option is duly
exercised, then this Lease Agreement shall continue in effect pending
closing. Unless extended pursuant to subparagraph (c) below, for cure
of title objections, closing shall occur on or before February 28,
1995. If the option is exercised, the purchase and sale shall be
governed and closed pursuant to the following terms:
(a) Purchase Price. The purchase price of the Leased
Premises shall be equal to the fair market value of the Leased
Premises as established by the average of two MAI appraisals, one of
which shall be completed by an appraiser selected by the Lessee at
Lessee's expense and one of which shall be completed by an appraiser
selected by the Lessor at Lessor's expense. Such appraisals shall be
completed at least fifteen (15) days prior to closing.
(b) Payment. The purchase price, subject to prorations as
hereinafter provided, shall be payable by cashier's check or wire
transfer at closing.
(c) Title Insurance. On or before thirty (30) days prior
to closing Lessee shall obtain, at Lessor's expense, a Title Insurance
Commitment ("Commitment) as to the Leased Premises issued by an
insurance company acceptable to Lessee agreeing to issue to Lessee a
marketability owner's policy in the amount of the purchase price,
insuring Lessee's title to the Leased Premises with all standard
exceptions deleted except then-current ad valorem taxes and subject
only to those encumbrances and other title matters acceptable to
Lessee ("Permitted Exceptions"). Within five (5) days after receipt
of the Commitment, Lessee shall provide Lessor with written notice of
any encumbrance or title matter which is unsatisfactory to Lessee with
respect to the Leased Premises. Thereupon, Lessor shall use its best
efforts to cure said objection(s) on or before one hundred twenty
(120) days after Lessor's receipt of Lessee's notice of objection(s),
and closing shall be delayed accordingly. If Lessor is unable to cure
an objection to title, Lessee shall have the option to proceed with
the purchase, with a corresponding reduction in price, or to terminate
the purchase transaction without liability to Lessor, and without loss
or waiver of Lessee's rights as tenant under the Lease Agreement.
(d) Survey. The property may be surveyed prior to closing
at Lessee's expense by a surveyor selected by Lessee. In the event
the survey reflects any survey matter or defect unacceptable to
Lessee, other than Permitted Exceptions, same shall be treated as an
objection to title and shall be governed by subparagraph (c), above.
(e) Documents. At closing, Lessor shall deliver to Lessee:
(1) good, sufficient, marketable fee simple title to the Leased
Premises by General Warranty Deed subject only to the terms of this
Lease Agreement and the Permitted Exceptions; (2) an Affidavit
attesting to the absence of any claim or suit, outstanding judgment,
rights of possession adverse to Lessee's possession, bankruptcy,
assessments, mortgage, financing statement, or claim of lien pending
against Lessor or the Leased Premises, and as to other matters and in
form as reasonably required by Lessee; (3) a Nonforeign Affidavit
attesting that Lessor is not a "foreign person" within the meaning of
Section 1445 of the Internal Revenue Code of 1954, as amended, in the form
as required by Lessee; (4) bill of sale as to fixtures and personalty;
(5) an Assignment of Lessor's rights as landlord under this Lease; and
(6) such other documents as may be reasonably requested by Lessee.
(f) Expenses. Lessor shall pay for all recording and
transfer taxes levied on the deed or otherwise payable by virtue of
the purchase and sale transaction, title search fees, and the title
insurance premium. Lessee shall pay for the cost of the survey, if
obtained, and for the MAI appraisal.
(g) Prorations. Real estate taxes, public assessments not
yet due and payable, rents, security deposits, maintenance, utility
and fuel charges, and all other items normally adjusted at closing,
shall be prorated at closing.
(h) Assignment. This option to purchase may be assigned
freely by Lessee together with, or separately from, Lessee's rights as
tenant under this Lease Agreement.
(i) Memorandum of Option. Lessor agrees to execute a
recordable Memorandum of this option to purchase upon request by
Lessee.
(j) Risk of Loss. Except as otherwise provided in this
Lease Agreement, risk of loss shall pass to Lessee at closing.
(k) Possession. Free and unencumbered possession of the
Leased Premises shall be delivered to Lessee by Lessor at closing,
subject, however, to the previously existing rights of Lessee, as
tenant, under this Lease Agreement.
22. In the event either party to the Lease Agreement shall be
required to retain an attorney to enforce its rights under any
provision of the Lease Agreement against the other party to the Lease
Agreement, the party who prevails in any dispute with, or enforcement
effort against the other party, shall be entitled to recover from the
other party such prevailing party's reasonable attorneys' fees and
costs incurred in negotiation, at trial and upon any appeal as the
result of such dispute or enforcement effort.
23. During the term of the Lease Agreement and the renewal
thereof, Lessor shall be responsible for structural maintenance of the
property and Lessee shall be responsible for all other maintenance
items.
24. The parties by execution of this Amendment to Lease
Agreement hereby amend the Lease Agreement as set forth herein, and in
so doing, reaffirm in all respects the term of the Lease Agreement as
so amended.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment to Lease Agreement to be signed in its corporate name by its
officers thereunto duly authorized as of the day and year first above
written.
WITNESSES: LESSOR:
UNION WAREHOUSE & TRUCKING
COMPANY
___________________________ By:________________________
___________________________ (Corporate Seal)
LESSEE:
USCO, INCORPORATED
___________________________ By:
Its: President
___________________________ (Corporate Seal)
STATE OF )
)SS :
COUNTY OF )
I HEREBY CERTIFY that on this day, before me, an officer duly
authorized in the State and County aforesaid to take acknowledgements,
personally appeared __________________________, well known to me and
known to be the President of the corporation named in the foregoing
instrument, and that he acknowledged executing the same on behalf of
the corporation in the presence of two subscribing witnesses, freely
and voluntarily under authority duly vested in him by said corporation
and that the seal affixed thereto is the true corporate seal of said
corporation.
WITNESS my hand and official seal in the County and State last
aforesaid this ___ day of ______________, 199__.
___________________________
NOTARY PUBLIC
My Commission Expires:
STATE OF )
)SS:
COUNTY OF )
I HEREBY CERTIFY that on this day, before me, an officer duly
authorized in the State and County aforesaid to take acknowledgements,
personally appeared __________________________, well known to me and
known to be the President of the corporation named in the foregoing
instrument, and that he acknowledged executing the same on behalf of
the corporation in the presence of two subscribing witnesses, freely
and voluntarily under authority duly vested in him by said corporation
and that the seal affixed thereto is the true corporate seal of said
corporation.
WITNESS my hand and official seal in the County and State last
aforesaid this ___ day of ______________, 199__.
___________________________
NOTARY PUBLIC
My Commission Expires:
f:\Corp\032\Hughes\Used\Leaseamd.4
LEASE AGREEMENT
STATE OF NORTH CAROLINA
COUNTY OF UNION
THIS LEASE made this 1st day of March, 1985 between UNION
WAREHOUSE & TRUCKING CO., MONROE, NORTH CAROLINA hereinafter called
the LESSORS, and USCO, INC., hereinafter called the LESSEE.
WITNESSETH:
That the said Lessors have granted and leased, and by these
presents so grant and lease unto said Lessee all that property
described as follows:
1840 Shelton Avenue, Statesville, N.C.
TO HAVE AND TO HOLD the said premises unto the said Lessee, for
the term of Five (5) years beginning on 1st day of March, 1985 and
ending on the 28th day of February, 1990, yielding and paying
therefore during the said term the monthly rental of Three Thousand
Two Hundred Dollars ($3,200.00) payable in advance on or before the
10th day of each month.
It is agreed that the Lessee shall have the right and first
option of a renewal of this lease, provided terms thereof can be
satisfactorily negotiated between the parties, upon the Lessee giving
Sixty (60) days notice prior to the expiration of such Five (5) Year
term.
It is further agreed by the Lessee to pay any increase in
property taxes and insurance over the base year of this lease, upon
presentation of the documents by the Lessor.
It is further agreed the Lessee may sublease the premises but in
such case it will remain liable for the rent. The Lessee, with the
written consent of the Lessors, may assign this lease, and thereafter
shall be exonerated from all liability under the terms of this lease
or renewal thereof.
It is further agreed the Lessors shall carry fire insurance on
the premises. The destruction of the premises by fire or other
casualty shall suspend the running of the term of this lease, and
shall terminate it if the parties so agree. At the option of the
Lessee the insurance on the main building shall be applied to the
reconstruction of said building. If the principal building is
damaged, but not destroyed, the rent payable under the terms of this
lease shall cease until the building is repaired by the Lessors so as
to be suitable for use.
It is further agreed the Lessee may make improvements on the
existing building and may erect buildings on the vacant lot included
in this lease, provided that such improvements or buildings comply
with all existing zoning laws, ordinances and regulations, and so that
the existing building shall not be defaced. All such improvements
shall be at the expense of the Lessee, and such fixtures shall become
a part of the realty.
It is further agreed by and between the parties hereto that
should the Lessor choose to use the premises herein leased for some
other purpose, he shall notify the Lessee in writing of his intention
to do so at least six months prior to the expiration of this lease.
Its further agreed by and between the parties hereto at the
expiration of this Lease all rents due must be paid in full before any
goods and chattels are removed from the premises herein leased.
IN WITNESS WHEREOF, the said parties have hereunto set their hand
and seals in duplicate this 1st day of March, 1985.
Witnessed by:
_____________________________ UNION WAREHOUSE & TRUCKING COMPANY
"Lessor"
_____________________________ By:_______________________________
SECRETARY President (Seal)
_____________________________ USCO, INCORPORATED
"Lessee"
_____________________________ By:_______________________________
ASSISTANT SECRETARY President (Seal)
STATE OF NORTH CAROLINA )
)
COUNTY OF UNION )
This 1st day of March, 1985, personally came before me
_______________________________ who, being by me duly sworn, says that
he is the President of UNION WAREHOUSE & TRUCKING CO., and that the
seal affixed to the foregoing instrument in writing is the corporate
seal of the company and that its authority duly given. And the said
_____________________________________________ acknowledged the said
writing to be the act and deed of said corporation.
_______________________________
Notary Public
My Commission expires: ______________________
STATE OF NORTH CAROLINA )
)
COUNTY OF UNION )
This 1st day of March, 1985, personally came before me
_______________________________ who, being by me duly sworn, says that
he is the President of USCO, INCORPORATED, MONROE, N.C., and that the
seal affixed to the foregoing instrument in writing is the corporate
seal of the company, and that its authority duly given, and the said
_____________________________________________ acknowledged the said
writing to be the act and deed of said corporation.
_______________________________
Notary Public
My Commission expires: ______________________
f:\Corp\032\Hughes\Used\Leaseamd.4
AMENDMENT TO LEASE AGREEMENT
STATE OF NORTH CAROLINA )
)SS:
COUNTY OF UNION )
THIS Amendment to Lease Agreement ("Amendment") is made this 23rd
day of December, 1986 by and between Union Warehouse & Trucking
Company, Monroe, North Carolina, d/b/a Union Warehouse & Realty
Company, hereinafter referred to as "Lessor" and USCO, Inc.,
hereinafter referred to as "Lessee."
W I T N E S S E T H:
WHEREAS, Lessor and Lessee entered into that certain Lease
Agreement (the "Lease Agreement") dated March 1, 1985, with regard to
property described as follows:
1927 S. Tyron Street, Charlotte, N.C.
and;
WHEREAS, Lessor and Lessee desire to further clarify and amend
the terms thereof as set forth more fully herein.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein and the payment by Lessee to Lessor of Ten Dollars
($10.00), the receipt and sufficiency of which is hereby acknowledged,
the parties agree to amend the Lease Agreement as follows:
25. The foregoing recitals are true and correct and incorporated
herein by reference.
26. The term "Lessor" shall refer to Union Warehouse & Trucking
Company, d/b/a Union Warehouse & Realty Company and its successors and
assigns. The term "Lessee" shall refer to USCO, Inc. and its
successors and assigns.
27. Lessee shall renew the Lease Agreement for one (1)
additional five (5) year period ("Period") commencing upon the
expiration of the initial term referenced therein and ending on
February 28, 1990. Base Rent for the period shall be Three Thousand
Five Hundred ($3,500.00) per month. Commencing on the 1st day of
March, 1990 (the "Adjustment Date"), and continuing on the same day of
each year thereafter during the Period, the Base Rent set forth shall
be adjusted in accordance with the following:
(a) The Consumer Price Index - U.S. City Average - All
Urban Consumer ("Index") in effect and published during the calendar
month in which the term of the Lease Agreement commenced shall be the
Base Period Index."
(b) The Base Period Index shall be compared with the Index
for the same calendar month for the Adjustment Date. If the Index for
the Adjustment Date is higher than the Base Period Index, then the
monthly rent for the next calendar year of the lease shall be
increased by one hundred percent (100%) of the percentage increase of
the Index for the Adjustment Date over the Base Period Index.
Every year thereafter, the Index for the same calendar month
shall be compared with the Index for the immediately preceding
Adjustment Date. If the Index for the same calendar month is higher
than the Index for the immediately preceding Adjustment Date, then the
rent for the next ensuing one (1) year period shall be increased by
one hundred percent (100%) of the percentage increase of the Index for
the same calendar month over the Index for the immediately preceding
Adjustment Date. If the Index for the same calendar month has not
been published, it is agreed that the Index as issued and published
for the latest preceding month shall be used in determining the
Adjustment Rent.
(c) If the Bureau of Labor Statistics discontinues
publication of the Index, publishes the Index less frequently, or
alters the Index in a material manner, then the Lessor and Lessee may
adopt a substitute index or procedure which reasonably reflects and
monitors consumer prices as nearly as possible in the same manner as
the Index.
During the Period, Lessee also shall pay the amount of any annual
taxes and insurance costs in excess of the respective amounts
applicable on March 1, 1985.
28. The following provision of the Lease Agreement is deleted in
its entirety:
It is further agreed by and between the parties
hereto that should the Lessor choose to use the
premises herein leased for some other purpose, he
shall notify the Lessee in writing of his
intention to do so at least six months prior to
the expiration of this lease.
29. In consideration of the benefits accruing to Lessor under
this Lease Agreement and Lessee's renewal thereof, and other good and
valuable consideration the receipt and sufficiency of which is
acknowledged by Lessor, Lessor does hereby grant to Lessee an
irrevocable option to purchase the property described in the Lease
Agreement ("Leased Premises") and all fixtures, equipment and
personalty owned by Lessor and located on the Leased Premises
(collectively called the "Leased Premises" in this Paragraph 5).
Lessee may exercise this option by delivering a signed written notice
thereof to Lessor not less than sixty (60) days prior to the end of
the renewal period of this Lease Agreement. If the option is duly
exercised, then this Lease Agreement shall continue in effect pending
closing. Unless extended pursuant to subparagraph (c) below, for cure
of title objections, closing shall occur on or before February 28,
1995. If the option is exercised, the purchase and sale shall be
governed and closed pursuant to the following terms:
(a) Purchase Price. The purchase price of the Leased
Premises shall be equal to the fair market value of the Leased
Premises as established by the average of two MAI appraisals, one of
which shall be completed by an appraiser selected by the Lessee at
Lessee's expense and one of which shall be completed by an appraiser
selected by the Lessor at Lessor's expense. Such appraisals shall be
completed at least fifteen (15) days prior to closing.
(b) Payment. The purchase price, subject to prorations as
hereinafter provided, shall be payable by cashier's check or wire
transfer at closing.
(c) Title Insurance. On or before thirty (30) days prior
to closing Lessee shall obtain, at Lessor's expense, a Title Insurance
Commitment ("Commitment) as to the Leased Premises issued by an
insurance company acceptable to Lessee agreeing to issue to Lessee a
marketability owner's policy in the amount of the purchase price,
insuring Lessee's title to the Leased Premises with all standard
exceptions deleted except then-current ad valorem taxes and subject
only to those encumbrances and other title matters acceptable to
Lessee ("Permitted Exceptions"). Within five (5) days after receipt
of the Commitment, Lessee shall provide Lessor with written notice of
any encumbrance or title matter which is unsatisfactory to Lessee with
respect to the Leased Premises. Thereupon, Lessor shall use its best
efforts to cure said objection(s) on or before one hundred twenty
(120) days after Lessor's receipt of Lessee's notice of objection(s),
and closing shall be delayed accordingly. If Lessor is unable to cure
an objection to title, Lessee shall have the option to proceed with
the purchase, with a corresponding reduction in price, or to terminate
the purchase transaction without liability to Lessor, and without loss
or waiver of Lessee's rights as tenant under the Lease Agreement.
(d) Survey. The property may be surveyed prior to closing
at Lessee's expense by a surveyor selected by Lessee. In the event
the survey reflects any survey matter or defect unacceptable to
Lessee, other than Permitted Exceptions, same shall be treated as an
objection to title and shall be governed by subparagraph (c), above.
(e) Documents. At closing, Lessor shall deliver to Lessee:
(1) good, sufficient, marketable fee simple title to the Leased
Premises by General Warranty Deed subject only to the terms of this
Lease Agreement and the Permitted Exceptions; (2) an Affidavit
attesting to the absence of any claim or suit, outstanding judgment,
rights of possession adverse to Lessee's possession, bankruptcy,
assessments, mortgage, financing statement, or claim of lien pending
against Lessor or the Leased Premises, and as to other matters and in
form as reasonably required by Lessee; (3) a Nonforeign Affidavit
attesting that Lessor is not a "foreign person" within the meaning of
Section 1445 of the Internal Revenue Code of 1954, as amended, in the form
as required by Lessee; (4) bill of sale as to fixtures and personalty;
(5) an Assignment of Lessor's rights as landlord under this Lease; and
(6) such other documents as may be reasonably requested by Lessee.
(f) Expenses. Lessor shall pay for all recording and
transfer taxes levied on the deed or otherwise payable by virtue of
the purchase and sale transaction, title search fees, and the title
insurance premium. Lessee shall pay for the cost of the survey, if
obtained, and for the MAI appraisal.
(g) Prorations. Real estate taxes, public assessments not
yet due and payable, rents, security deposits, maintenance, utility
and fuel charges, and all other items normally adjusted at closing,
shall be prorated at closing.
(h) Assignment. This option to purchase may be assigned
freely by Lessee together with, or separately from, Lessee's rights as
tenant under this Lease Agreement.
(i) Memorandum of Option. Lessor agrees to execute a
recordable Memorandum of this option to purchase upon request by
Lessee.
(j) Risk of Loss. Except as otherwise provided in this
Lease Agreement, risk of loss shall pass to Lessee at closing.
(k) Possession. Free and unencumbered possession of the
Leased Premises shall be delivered to Lessee by Lessor at closing,
subject, however, to the previously existing rights of Lessee, as
tenant, under this Lease Agreement.
30. In the event either party to the Lease Agreement shall be
required to retain an attorney to enforce its rights under any
provision of the Lease Agreement against the other party to the Lease
Agreement, the party who prevails in any dispute with, or enforcement
effort against the other party, shall be entitled to recover from the
other party such prevailing party's reasonable attorneys' fees and
costs incurred in negotiation, at trial and upon any appeal as the
result of such dispute or enforcement effort.
31. During the term of the Lease Agreement and the renewal
thereof, Lessor shall be responsible for structural maintenance of the
property and Lessee shall be responsible for all other maintenance
items.
32. The parties by execution of this Amendment to Lease
Agreement hereby amend the Lease Agreement as set forth herein, and in
so doing, reaffirm in all respects the term of the Lease Agreement as
so amended.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment to Lease Agreement to be signed in its corporate name by its
officers thereunto duly authorized as of the day and year first above
written.
WITNESSES: LESSOR:
UNION WAREHOUSE & TRUCKING
COMPANY
___________________________ By:________________________
___________________________ (Corporate Seal)
LESSEE:
USCO, INCORPORATED
___________________________ By:
Its: President
___________________________ (Corporate Seal)
STATE OF )
)SS :
COUNTY OF )
I HEREBY CERTIFY that on this day, before me, an officer duly
authorized in the State and County aforesaid to take acknowledgements,
personally appeared __________________________, well known to me and
known to be the President of the corporation named in the foregoing
instrument, and that he acknowledged executing the same on behalf of
the corporation in the presence of two subscribing witnesses, freely
and voluntarily under authority duly vested in him by said corporation
and that the seal affixed thereto is the true corporate seal of said
corporation.
WITNESS my hand and official seal in the County and State last
aforesaid this ___ day of ______________, 199__.
___________________________
NOTARY PUBLIC
My Commission Expires:
STATE OF )
)SS:
COUNTY OF )
I HEREBY CERTIFY that on this day, before me, an officer duly
authorized in the State and County aforesaid to take acknowledgements,
personally appeared __________________________, well known to me and
known to be the President of the corporation named in the foregoing
instrument, and that he acknowledged executing the same on behalf of
the corporation in the presence of two subscribing witnesses, freely
and voluntarily under authority duly vested in him by said corporation
and that the seal affixed thereto is the true corporate seal of said
corporation.
WITNESS my hand and official seal in the County and State last
aforesaid this ___ day of ______________, 199__.
___________________________
NOTARY PUBLIC
My Commission Expires:
f:\Corp\032\Hughes\Used\Leaseamd.5
LEASE AGREEMENT
STATE OF NORTH CAROLINA
COUNTY OF UNION
THIS LEASE made this 1st day of March, 1985 between UNION
WAREHOUSE & TRUCKING CO., MONROE, NORTH CAROLINA hereinafter called
the LESSORS, and USCO, INC., hereinafter called the LESSEE.
WITNESSETH:
That the said Lessors have granted and leased, and by these
presents so grant and lease unto said Lessee all that property
described as follows:
1927 S. Tyron Street, Charlotte, N.C.
TO HAVE AND TO HOLD the said premises unto the said Lessee, for
the term of Five (5) years beginning on 1st day of March, 1985 and
ending on the 28th day of February, 1990, yielding and paying
therefore during the said term the monthly rental of Three Thousand
Five Hundred Dollars ($3,500.00) payable in advance on or before the
10th day of each month.
It is agreed that the Lessee shall have the right and first
option of a renewal of this lease, provided terms thereof can be
satisfactorily negotiated between the parties, upon the Lessee giving
Sixty (60) days notice prior to the expiration of such Five (5) Year
term.
It is further agreed by the Lessee to pay any increase in
property taxes and insurance over the base year of this lease, upon
presentation of the documents by the Lessor.
It is further agreed the Lessee may sublease the premises but in
such case it will remain liable for the rent. The Lessee, with the
written consent of the Lessors, may assign this lease, and thereafter
shall be exonerated from all liability under the terms of this lease
or renewal thereof.
It is further agreed the Lessors shall carry fire insurance on
the premises. The destruction of the premises by fire or other
casualty shall suspend the running of the term of this lease, and
shall terminate it if the parties so agree. At the option of the
Lessee the insurance on the main building shall be applied to the
reconstruction of said building. If the principal building is
damaged, but not destroyed, the rent payable under the terms of this
lease shall cease until the building is repaired by the Lessors so as
to be suitable for use.
It is further agreed the Lessee may make improvements on the
existing building and may erect buildings on the vacant lot included
in this lease, provided that such improvements or buildings comply
with all existing zoning laws, ordinances and regulations, and so that
the existing building shall not be defaced. All such improvements
shall be at the expense of the Lessee, and such fixtures shall become
a part of the realty.
It is further agreed by and between the parties hereto that
should the Lessor choose to use the premises herein leased for some
other purpose, he shall notify the Lessee in writing of his intention
to do so at least six months prior to the expiration of this lease.
Its further agreed by and between the parties hereto at the
expiration of this Lease all rents due must be paid in full before any
goods and chattels are removed from the premises herein leased.
IN WITNESS WHEREOF, the said parties have hereunto set their hand
and seals in duplicate this 1st day of March, 1985.
Witnessed by:
_____________________________ UNION WAREHOUSE & TRUCKING COMPANY
"Lessor"
_____________________________ By:_______________________________
SECRETARY President (Seal)
_____________________________ USCO, INCORPORATED
"Lessee"
_____________________________ By:_______________________________
ASSISTANT SECRETARY President (Seal)
STATE OF NORTH CAROLINA )
)
COUNTY OF UNION )
This 1st day of March, 1985, personally came before me
_______________________________ who, being by me duly sworn, says that
he is the President of UNION WAREHOUSE & TRUCKING CO., and that the
seal affixed to the foregoing instrument in writing is the corporate
seal of the company and that its authority duly given. And the said
_____________________________________________ acknowledged the said
writing to be the act and deed of said corporation.
_______________________________
Notary Public
My Commission expires: ______________________
STATE OF NORTH CAROLINA )
)
COUNTY OF UNION )
This 1st day of March, 1985, personally came before me
_______________________________ who, being by me duly sworn, says that
he is the President of USCO, INCORPORATED, MONROE, N.C., and that the
seal affixed to the foregoing instrument in writing is the corporate
seal of the company, and that its authority duly given, and the said
_____________________________________________ acknowledged the said
writing to be the act and deed of said corporation.
_______________________________
Notary Public
My Commission expires: ______________________
f:\Corp\032\Hughes\Used\Leaseamd.5
AMENDMENT TO LEASE AGREEMENT
STATE OF NORTH CAROLINA )
) SS :
COUNTY OF UNION )
THIS Amendment to Lease Agreement ("Amendment") is made this ___
day of December, 1986 by and between Union Warehouse & Trucking
Company, Monroe, North Carolina, d/b/a Union Warehouse & Realty
Company, hereinafter referred to as "Lessor" and USCO, Inc.,
hereinafter referred to as "Lessee."
W I T N E S S E T H:
WHEREAS, Lessor and Lessee entered into that certain Lease
Agreement (the "Lease Agreement") dated March 1 , 1985, with regard to
property described as follows:
602 Rigsbee Ave., Durham, N.C.
and;
WHEREAS, Lessor and Lessee desire to further clarify and amend
the terms thereof as set forth more fully herein.
NOW, THEREFORE, in consideration of the mutual covenants con-
tained herein and the payment by Lessee to Lessor of Ten Dollars
($10.00), the receipt and sufficiency of which is hereby acknowledged,
the parties agree to amend the Lease Agreement as follows:
1. The foregoing recitals are true and correct and incorporated
herein by reference.
2. The term "Lessor" shall refer to Union Warehouse & Trucking
Company, d/b/a Union Warehouse & Realty Company and its successors and
assigns. The term "Lessee" shall refer to USCO, Inc. and its
successors and assigns.
3. Lessee shall renew the Lease Agreement for one (1) additional
five (5) year period ("Period") commencing upon the expiration of the
initial term referenced therein and ending on expiration of the
initial term referenced therein and ending on February 28, 1990. Base
Rent for the period shall be Two Thousand Three Hundred Dollars
($2,300.00) per month. Commencing on the 1st day of March, 1990 (the
"Adjustment Date"), and continuing on the same day of each year
thereafter during the Period, the Base Rent set forth shall be
adjusted in accordance with the following:
(a) The Consumer Price Index - U.S. City Average - All Urban
Consumer ("Index") in effect and published during the calendar month
in which the term of the Lease Agreement commenced shall be the "Base
Period Index."
(b) The Base Period Index shall be compared with the Index for
the same calendar month for the AdJustment Date. If the Index for the
Adjustment Date is higher than the Base Period Index, then the monthly
rent for the next calendar year of the lease shall be increased by one
hundred percent (100%) of the percentage increase of the Index for the
Adjustment Date over the Base Period Index.
Every year thereafter, the Index for the same calendar month
shall be compared with the Index for the immediately preceding
Adjustment Date. If the Index for the same calendar month is higher
than the Index for the immediately preceding Adjustment Date, then the
rent for the next ensuing one (1) year period shall be increased by
one hundred percent (100%) of the percentage increase of the Index for
the same calendar month over the Index for the immediately preceding
Adjustment Date. If the Index for the same calendar month has not been
published, it is agreed that the Index as issued and published for the
latest preceding month shall be used in determining the Adjustment
Rent.
(c) If the Bureau of Labor Statistics discontinues publication of
the Index, publishes the Index less frequently, or alters the Index in
a material manner, then the Lessor and Lessee may adopt a substitute
index or procedure which reasonably reflects and monitors consumer
prices as nearly as possible in the same manner as the Index.
During the Period, Lessee also shall pay the amount of any annual
taxes and insurance costs in excess of the respective amounts
applicable on March 1, 1985.
4. The following provision of the Lease Agreement is deleted in
its entirety:
It is further agreed by and between the parties
hereto that should the Lessor choose to use the
premises herein leased for some other purpose, he
shall notify the Lessee in writing of his
intention to do so at least six months prior to
the expiration of this lease.
5. In consideration of the benefits accruing to Lessor under this
Lease Agreement and Lessee's renewal thereof, and other good and
valuable consideration the receipt and sufficiency of which is
acknowledged by Lessor, Lessor does hereby grant to Lessee an
irrevocable option to purchase the property described in the Lease
Agreement ("Leased Premises") and all fixtures, equipment and
personalty owned by Lessor and located on the Leased Premises
(collectively called the "Leased Premises" in this Paragraph 5).
Lessee may exercise this option by delivering a signed written notice
thereof to Lessor not less than sixty (60) days prior to the end of
the renewal period of this Lease Agreement. If the option is duly
exercised, then this Lease Agreement shall continue in effect pending
closing. Unless extended pursuant to subparagraph (c) below, for cure
of title objections, closing shall occur on or before February 28,
1995. If the option is exercised, the purchase and sale shall be
governed and closed pursuant to the following terms:
(a) Purchase Price. The purchase price of the Leased Premises
shall be equal to the fair market value of the Leased Premises as
established by the average of two MAI appraisals, one of which shall
be completed by an appraiser selected by the Lessee at Lessee's
expense and one of which shall be completed by an appraiser selected
by the Lessor at Lessor's expense. Such appraisals shall be completed
at least fifteen (15) days prior to closing.
(b) Payment. The purchase price, subject to prorations as
hereinafter provided, shall be payable by cashier's check or wire
transfer at closing.
(c) Title Insurance. On or before thirty (30) days prior to
closing Lessee shall obtain, at Lessor's expense, a Title Insurance
Commitment ("Commitment") as to the Leased Premises issued by an
insurance company acceptable to Lessee agreeing to issue to Lessee a
marketability owner's policy in the amount of the purchase price,
insuring Lessee's title to the Leased Premises with all standard
exceptions deleted except then current ad valorem taxes and subject
only to those encumbrances and other title matters acceptable to
Lessee ("Permitted Exceptions"). Within five (5) days after receipt of
the Commitment, Lessee shall provide Lessor with written notice of any
encumbrance or title matter which is unsatisfactory to Lessee with
respect to the Leased Premises. Thereupon, Lessor shall use its best
efforts to cure said objection(s) on or before one hundred twenty
(120) days after Lessor's receipt of Lessee's notice of objection(s),
and closing shall be delayed accordingly. If Lessor is unable to cure
an objection to title, Lessee shall have the option to proceed with
the purchase, with a corresponding reduction in price, or to terminate
the purchase transaction without liability to Lessor, and without loss
or waiver of Lessee's rights as tenant under the Lease Agreement.
(d) Survey. The property may be surveyed prior to closing at
Lessee's expense by a surveyor selected by Lessee. In the event the
survey reflects any survey matter or defect unacceptable to Lessee,
other than Permitted Exceptions, same shall be treated as an objection
to title and shall be governed by subparagraph (c), above.
(e) Documents. At closing, Lessor shall deliver to Lessee: (1)
good, sufficient, marketable fee simple title to the Leased Premises
by General Warranty Deed subject only to the terms of this Lease
Agreement and the Permitted Exceptions; (2) an Affidavit attesting to
the absence of any claim or suit, outstanding judgment, rights of
possession adverse to Lessee's possession, bankruptcy, assessments,
mortgage, financing statement, or claim of lien pending against Lessor
or the Leased Premises, and as to other matters and in form as
reasonably required by Lessee; (3) a Nonforeign Affidavit attesting
that Lessor is not a "foreign person" within the meaning of Section 1445 of
the Internal Revenue Code of 1954, as amended, in the form as required
by Lessee; (4) bill of sale as to fixtures and personalty; (5) an
Assignment of Lessor's rights as landlord under this Lease; and (6)
such other documents as may be reasonably requested by Lessee.
(f) Expenses. Lessor shall pay for all recording and transfer
taxes levied on the deed or otherwise payable by virtue of the
purchase and sale transaction, title search fees, and the title
insurance premium. Lessee shall pay for the cost of the survey, if
obtained, and for the MAI appraisal.
(g) Prorations. Real estate taxes, public assessments not yet due
and payable, rents, security deposits, maintenance, utility and fuel
charges, and all other items normally adjusted at closing, shall be
prorated at closing.
(h) Assignment. This option to purchase may be assigned freely by
Lessee together with, or separately from, Lessee's rights as tenant
under this Lease Agreement.
(i) Memorandum of Option. Lessor agrees to execute a recordable
Memorandum of this option to purchase upon request by Lessee.
(j) Risk of Loss. Except as otherwise provided in this Lease
Agreement, risk of loss shall pass to Lessee at closing.
(k) Possession. Free and unencumbered possession of the Leased
Premises shall be delivered to Lessee by Lessor at
closing, subject, however, to the previously existing rights of
Lessee, as tenant, under this Lease Agreement.
6. In the event either party to the Lease Agreement shall be
required to retain an attorney to enforce its rights under any
provision of the Lease Agreement against the other party to the Lease
Agreement, the party who prevails in any dispute with, or enforcement
effort against the other party, shall be entitled to recover from the
other party such prevailing party's reasonable attorneys' fees and
costs incurred in negotiation, at trial and upon any appeal as the
result of such dispute or enforcement effort.
7. During the term of the Lease Agreement and the renewal
thereof, Lessor shall be responsible for structural maintenance of the
property and Lessee shall be responsible for all other maintenance
items.
8. The parties by execution of this Amendment to Lease Agreement
hereby amend the Lease Agreement as set forth herein, and in so doing,
reaffirm in all respects the term of the Lease Agreement as so
amended.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment to Lease Agreement to be signed in its corporate name by its
officers thereunto duly authorized as of the day and year first above
written.
WITNESSES: LESSOR:
UNION WAREHOUSE & TRUCKING
COMPANY
By:
Its: President
(Corporate Seal)
LESSEE:
USCO, INCORPORATED
By:
Its: President
(Corporate Seal)
STATE OF )
) SS :
COUNTY OF )
I HEREBY CERTIFY that on this day, before me, an officer duly
authorized in the State and County aforesaid to take acknowledgments,
personally appeared , well known to
me and known to be the President of the corporation named in the
foregoing instrument, and that he acknowledged executing the same on
behalf of the corporation in the presence of two subscribing
witnesses, freely and voluntarily under authority duly vested in him
by said corporation and that the seal affixed thereto is the true
corporate seal of said corporation.
WITNESS my hand and official seal in the County and State last
aforesaid this day of year, 1986.
NOTARY PUBLIC
My Commission Expires:
STATE OF )
) SS :
COUNTY OF )
I HEREBY CERTIFY that on this day, before me, an officer duly
authorized in the State and County aforesaid to take acknowledgments,
personally appeared well known to
me and known to be the President of the corporation named in the
foregoing instrument, and that he acknowledged executing the same on
behalf of the corporation in the presence of two subscribing
witnesses, freely and voluntarily under authority duly vested in him
by said corporation and that the seal affixed thereto is the true
corporate seal of said corporation.
WITNESS my hand and official seal in the County and State last
aforesaid this day of year, 1986.
NOTARY PUBLIC
My Commission Expires:
LEASE AGREEMENT
STATE OF North Carolina
COUNTY OF Union
THIS LEASE made this 1st day of March, 1985 between UNION
WAREHOUSE & TRUCKING CO., MONROE, NORTH CAROLINA hereinafter called
the LESSORS, and USCO INC., hereinafter called the LESSEE.
WITNESSETH:
That the said Lessors have granted and leased, and by these
presents so grant and lease unto said Lessee all that property
described as follows:
602 Rigsbee Ave., Durham, N.C.
TO HAVE AND TO HOLD the said premises unto the said Lessee, for
the term of FIVE (5) years beginning on 1st day of March, 1985 and
ending on 28th day of February 1990, yielding and paying therefore
during the said term the monthly rental of Two Thousand Three Hundred
Dollars ($2,300.00) Dollars payable in advance on or before the 10th
day of each month.
It is agreed that the Lessee shall have the right and first
option of a renewal of this lease, provided terms thereof can be
satisfactorily negotiated between the parties, upon the Lessee giving
Sixty (60) days notice prior to the expiration of such FIVE (5) Year
term.
It is further agreed by the Lessee to pay any increase in
property care and insurance over the base year of this lease, upon
presentation of the documents by the Lessor.
It is further agreed the Lessee may sublease the premises but in
such case it will remain liable for the rent. The Lessee, with the
written consent of the Lessors, may assign this lease, and thereafter
shall be exonerated from all liability under the terms of this lease
or renewal thereof.
It is further agreed the Lessors shall carry fire insurance on
the premises. The destruction of the premises by fire or other
casualty shall suspend the running of the term of this lease, and
shall terminate it if the parties so agree. At the option of the
Lessee the insurance on the main building shall be applied to the
reconstruction of said building. If the principal building is damaged,
but not destroyed, the rent payable under the terms of this lease
shall cease until the building is repaired by the Lessors so as to be
suitable for use.
It is further agreed the Lessee may make improvements on the
existing building and may erect buildings on the vacant lot included
in this lease, provided that such improvements or buildings comply
with all existing zoning laws, ordinances and regulations, and so that
the existing building shall not be defaced. All such improvements
shall be at the expense of the Lessee, and such fixtures shall become
a part of the realty.
It is further agreed by and between the parties hereto that
should the Lessor choose to use the premises herein leased for some
other purpose, he shall notify the Lessee in writing of his intention
to do so at least six months prior to the expiration of this lease.
Its further agreed by and between the parties hereto at the
expiration of this Lease all rents due must be paid in full before any
goods and chattels are removed from the premises herein leased.
IN WITNESS WHEREOF, the said parties have hereunto set their hand
and seals in duplicate this 1st day of March, 1985.
Witnessed by:
LESSOR
UNION WAREHOUSE & TRUCKING CO.
By:
Its: President
(Seal)
Secretary
LESSEE
USCO, INCORPORATED
By:
Its: President
(Seal)
Secretary
STATE OF NORTH CAROLINA )
)
COUNTY OF UNION )
This 1st day of March, 1985, personally came before me
_________________________, who, being by me duly sworn, says that he
is the President of UNION WAREHOUSE & TRUCKING CO., and that the seal
affixes to the foregoing instrument in writing is the corporate seal
of the company, and that its authority duly given. And the said -
___________________________, acknowledged the said writing to be the
act and deed of said corporation.
Notary Public
My commission expires:
STATE OF NORTH CAROLINA )
)
COUNTY OF UNION )
This 1st day of March, 1995, personally came before me -
______________________________, who, being by me duly sworn, says that
he is the President of USCO, INCORPORATED, MONROE, N. C., and that the
seal affixed to the foregoing instrument in writing is the corporate
seal of the company, and that its authority duly given, and the said
______________________________, acknowledged the said writing to be
the act and deed of said corporation.
Notary Public
My commission expires:
F:\CORP\032\HUGHES\USED\LEASEAMD.6
AMENDMENT TO LEASE AGREEMENT
STATE OF NORTH CAROLINA )
) SS :
COUNTY OF UNION )
THIS Amendment to Lease Agreement ("Amendment") is made this 23rd
day of December, 1986 by and between Union Warehouse & Trucking
Company, Monroe, North Carolina, d/b/a Union Warehouse & Realty
Company, hereinafter referred to as "Lessor" and USCO, Inc.,
hereinafter referred to as "Lessee."
W I T N E S S E T H:
WHEREAS, Lessor and Lessee entered into that certain Lease
Agreement (the "Lease Agreement") dated March 1 , 1985, with regard to
property described as follows:
Greenhouse Road, Pinehurst, N.C.
and;
WHEREAS, Lessor and Lessee desire to further clarify and amend
the terms thereof as set forth more fully herein.
NOW, THEREFORE, in consideration of the mutual covenants con-
tained herein and the payment by Lessee to Lessor of Ten Dollars
($10.00), the receipt and sufficiency of which is hereby acknowledged,
the parties agree to amend the Lease Agreement as follows:
1. The foregoing recitals are true and correct and incorporated
herein by reference.
2. The term "Lessor" shall refer to Union Warehouse & Trucking
Company, d/b/a Union Warehouse & Realty Company and its successors and
assigns. The term "Lessee" shall refer to USCO, Inc. and its
successors and assigns.
3. Lessee shall renew the Lease Agreement for one (1) additional
five (5) year period ("Period") commencing upon the expiration of the
initial term referenced therein and ending on expiration of the
initial term referenced therein and ending on February 28, 1990. Base
Rent for the period shall be One Thousand Two Hundred Dollars
($1,200.00) per month. Commencing on the 1st day of March, 1990 (the
"Adjustment Date"), and continuing on the same day of each year
thereafter during the Period, the Base Rent set forth shall be
adjusted in accordance with the following:
(a) The Consumer Price Index - U.S. City Average - All Urban
Consumer ("Index") in effect and published during the calendar month
in which the term of the Lease Agreement commenced shall be the "Base
Period Index."
(b) The Base Period Index shall be compared with the Index for
the same calendar month for the AdJustment Date. If the Index for the
Adjustment Date is higher than the Base Period Index, then the monthly
rent for the next calendar year of the lease shall be increased by one
hundred percent (100%) of the percentage increase of the Index for the
Adjustment Date over the Base Period Index.
Every year thereafter, the Index for the same calendar month
shall be compared with the Index for the immediately preceding
Adjustment Date. If the Index for the same calendar month is higher
than the Index for the immediately preceding Adjustment Date, then the
rent for the next ensuing one (1) year period shall be increased by
one hundred percent (100%) of the percentage increase of the Index for
the same calendar month over the Index for the immediately preceding
Adjustment Date. If the Index for the same calendar month has not been
published, it is agreed that the Index as issued and published for the
latest preceding month shall be used in determining the Adjustment
Rent.
(c) If the Bureau of Labor Statistics discontinues publication of
the Index, publishes the Index less frequently, or alters the Index in
a material manner, then the Lessor and Lessee may adopt a substitute
index or procedure which reasonably reflects and monitors consumer
prices as nearly as possible in the same manner as the Index.
During the Period, Lessee also shall pay the amount of any annual
taxes and insurance costs in excess of the respective amounts
applicable on March 1, 1985.
4. The following provision of the Lease Agreement is deleted in
its entirety:
It is further agreed by and between the parties
hereto that should the Lessor choose to use the
premises herein leased for some other purpose, he
shall notify the Lessee in writing of his
intention to do so at least six months prior to
the expiration of this lease.
5. In consideration of the benefits accruing to Lessor under this
Lease Agreement and Lessee's renewal thereof, and other good and
valuable consideration the receipt and sufficiency of which is
acknowledged by Lessor, Lessor does hereby grant to Lessee an
irrevocable option to purchase the property described in the Lease
Agreement ("Leased Premises") and all fixtures, equipment and
personalty owned by Lessor and located on the Leased Premises
(collectively called the "Leased Premises" in this Paragraph 5).
Lessee may exercise this option by delivering a signed written notice
thereof to Lessor not less than sixty (60) days prior to the end of
the renewal period of this Lease Agreement. If the option is duly
exercised, then this Lease Agreement shall continue in effect pending
closing. Unless extended pursuant to subparagraph (c) below, for cure
of title objections, closing shall occur on or before February 28,
1995. If the option is exercised, the purchase and sale shall be
governed and closed pursuant to the following terms:
(a) Purchase Price. The purchase price of the Leased Premises
shall be equal to the fair market value of the Leased Premises as
established by the average of two MAI appraisals, one of which shall
be completed by an appraiser selected by the Lessee at Lessee's
expense and one of which shall be completed by an appraiser selected
by the Lessor at Lessor's expense. Such appraisals shall be completed
at least fifteen (15) days prior to closing.
(b) Payment. The purchase price, subject to prorations as
hereinafter provided, shall be payable by cashier's check or wire
transfer at closing.
(c) Title Insurance. On or before thirty (30) days prior to
closing Lessee shall obtain, at Lessor's expense, a Title Insurance
Commitment ("Commitment") as to the Leased Premises issued by an
insurance company acceptable to Lessee agreeing to issue to Lessee a
marketability owner's policy in the amount of the purchase price,
insuring Lessee's title to the Leased Premises with all standard
exceptions deleted except then current ad valorem taxes and subject
only to those encumbrances and other title matters acceptable to
Lessee ("Permitted Exceptions"). Within five (5) days after receipt of
the Commitment, Lessee shall provide Lessor with written notice of any
encumbrance or title matter which is unsatisfactory to Lessee with
respect to the Leased Premises. Thereupon, Lessor shall use its best
efforts to cure said objection(s) on or before one hundred twenty
(120) days after Lessor's receipt of Lessee's notice of objection(s),
and closing shall be delayed accordingly. If Lessor is unable to cure
an objection to title, Lessee shall have the option to proceed with
the purchase, with a corresponding reduction in price, or to terminate
the purchase transaction without liability to Lessor, and without loss
or waiver of Lessee's rights as tenant under the Lease Agreement.
(d) Survey. The property may be surveyed prior to closing at
Lessee's expense by a surveyor selected by Lessee. In the event the
survey reflects any survey matter or defect unacceptable to Lessee,
other than Permitted Exceptions, same shall be treated as an objection
to title and shall be governed by subparagraph (c), above.
(e) Documents. At closing, Lessor shall deliver to Lessee: (1)
good, sufficient, marketable fee simple title to the Leased Premises
by General Warranty Deed subject only to the terms of this Lease
Agreement and the Permitted Exceptions; (2) an Affidavit attesting to
the absence of any claim or suit, outstanding judgment, rights of
possession adverse to Lessee's possession, bankruptcy, assessments,
mortgage, financing statement, or claim of lien pending against Lessor
or the Leased Premises, and as to other matters and in form as
reasonably required by Lessee; (3) a Nonforeign Affidavit attesting
that Lessor is not a "foreign person" within the meaning of Section 1445 of
the Internal Revenue Code of 1954, as amended, in the form as required
by Lessee; (4) bill of sale as to fixtures and personalty; (5) an
Assignment of Lessor's rights as landlord under this Lease; and (6)
such other documents as may be reasonably requested by Lessee.
(f) Expenses. Lessor shall pay for all recording and transfer
taxes levied on the deed or otherwise payable by virtue of the
purchase and sale transaction, title search fees, and the title
insurance premium. Lessee shall pay for the cost of the survey, if
obtained, and for the MAI appraisal.
(g) Prorations. Real estate taxes, public assessments not yet due
and payable, rents, security deposits, maintenance, utility and fuel
charges, and all other items normally adjusted at closing, shall be
prorated at closing.
(h) Assignment. This option to purchase may be assigned freely by
Lessee together with, or separately from, Lessee's rights as tenant
under this Lease Agreement.
(i) Memorandum of Option. Lessor agrees to execute a recordable
Memorandum of this option to purchase upon request by Lessee.
(j) Risk of Loss. Except as otherwise provided in this Lease
Agreement, risk of loss shall pass to Lessee at closing.
(k) Possession. Free and unencumbered possession of the Leased
Premises shall be delivered to Lessee by Lessor at
closing, subject, however, to the previously existing rights of
Lessee, as tenant, under this Lease Agreement.
6. In the event either party to the Lease Agreement shall be
required to retain an attorney to enforce its rights under any
provision of the Lease Agreement against the other party to the Lease
Agreement, the party who prevails in any dispute with, or enforcement
effort against the other party, shall be entitled to recover from the
other party such prevailing party's reasonable attorneys' fees and
costs incurred in negotiation, at trial and upon any appeal as the
result of such dispute or enforcement effort.
7. During the term of the Lease Agreement and the renewal
thereof, Lessor shall be responsible for structural maintenance of the
property and Lessee shall be responsible for all other maintenance
items.
8. The parties by execution of this Amendment to Lease Agreement
hereby amend the Lease Agreement as set forth herein, and in so doing,
reaffirm in all respects the term of the Lease Agreement as so
amended.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment to Lease Agreement to be signed in its corporate name by its
officers thereunto duly authorized as of the day and year first above
written.
WITNESSES: LESSOR:
UNION WAREHOUSE & TRUCKING
COMPANY
By:
Its: President
(Corporate Seal)
LESSEE:
USCO, INCORPORATED
By:
Its: President
(Corporate Seal)
STATE OF )
) SS :
COUNTY OF )
I HEREBY CERTIFY that on this day, before me, an officer duly
authorized in the State and County aforesaid to take acknowledgments,
personally appeared , well known to
me and known to be the President of the corporation named in the
foregoing instrument, and that he acknowledged executing the same on
behalf of the corporation in the presence of two subscribing
witnesses, freely and voluntarily under authority duly vested in him
by said corporation and that the seal affixed thereto is the true
corporate seal of said corporation.
WITNESS my hand and official seal in the County and State last
aforesaid this day of year, 1986.
NOTARY PUBLIC
My Commission Expires:
STATE OF )
) SS :
COUNTY OF )
I HEREBY CERTIFY that on this day, before me, an officer duly
authorized in the State and County aforesaid to take acknowledgments,
personally appeared well known to
me and known to be the President of the corporation named in the
foregoing instrument, and that he acknowledged executing the same on
behalf of the corporation in the presence of two subscribing
witnesses, freely and voluntarily under authority duly vested in him
by said corporation and that the seal affixed thereto is the true
corporate seal of said corporation.
WITNESS my hand and official seal in the County and State last
aforesaid this day of year, 1986.
NOTARY PUBLIC
My Commission Expires:
LEASE AGREEMENT
STATE OF North Carolina
COUNTY OF Union
THIS LEASE made this 1st day of March, 1985 between UNION
WAREHOUSE & TRUCKING CO., MONROE, NORTH CAROLINA hereinafter called
the LESSORS, and USCO INC., hereinafter called the LESSEE.
WITNESSETH:
That the said Lessors have granted and leased, and by these
presents so grant and lease unto said Lessee all that property
described as follows:
Greenhouse Road, Pinehurst, N.C.
TO HAVE AND TO HOLD the said premises unto the said Lessee, for
the term of FIVE (5) years beginning on 1st day of March, 1985 and
ending on 28th day of February 1990, yielding and paying therefore
during the said term the monthly rental of One Thousand Two Hundred
Dollars ($1,200.00) Dollars payable in advance on or before the 10th
day of each month.
It is agreed that the Lessee shall have the right and first
option of a renewal of this lease, provided terms thereof can be
satisfactorily negotiated between the parties, upon the Lessee giving
Sixty (60) days notice prior to the expiration of such FIVE (5) Year
term.
It is further agreed by the Lessee to pay any increase in
property care and insurance over the base year of this lease, upon
presentation of the documents by the Lessor.
It is further agreed the Lessee may sublease the premises but in
such case it will remain liable for the rent. The Lessee, with the
written consent of the Lessors, may assign this lease, and thereafter
shall be exonerated from all liability under the terms of this lease
or renewal thereof.
It is further agreed the Lessors shall carry fire insurance on
the premises. The destruction of the premises by fire or other
casualty shall suspend the running of the term of this lease, and
shall terminate it if the parties so agree. At the option of the
Lessee the insurance on the main building shall be applied to the
reconstruction of said building. If the principal building is damaged,
but not destroyed, the rent payable under the terms of this lease
shall cease until the building is repaired by the Lessors so as to be
suitable for use.
It is further agreed the Lessee may make improvements on the
existing building and may erect buildings on the vacant lot included
in this lease, provided that such improvements or buildings comply
with all existing zoning laws, ordinances and regulations, and so that
the existing building shall not be defaced. All such improvements
shall be at the expense of the Lessee, and such fixtures shall become
a part of the realty.
It is further agreed by and between the parties hereto that
should the Lessor choose to use the premises herein leased for some
other purpose, he shall notify the Lessee in writing of his intention
to do so at least six months prior to the expiration of this lease.
Its further agreed by and between the parties hereto at the
expiration of this Lease all rents due must be paid in full before any
goods and chattels are removed from the premises herein leased.
IN WITNESS WHEREOF, the said parties have hereunto set their hand
and seals in duplicate this 1st day of March, 1985.
Witnessed by:
LESSOR
UNION WAREHOUSE & TRUCKING CO.
By:
Secretary Its: President
(Seal)
LESSEE
USCO, INCORPORATED
By:
Its: President
Secretary (Seal)
STATE OF NORTH CAROLINA )
)
COUNTY OF UNION )
This 1st day of March, 1985, personally came before me
_________________________, who, being by me duly sworn, says that he
is the President of UNION WAREHOUSE & TRUCKING CO., and that the seal
affixes to the foregoing instrument in writing is the corporate seal
of the company, and that its authority duly given. And the said -
___________________________, acknowledged the said writing to be the
act and deed of said corporation.
Notary Public
My commission expires:
STATE OF NORTH CAROLINA )
)
COUNTY OF UNION )
This 1st day of March, 1995, personally came before me -
______________________________, who, being by me duly sworn, says that
he is the President of USCO, INCORPORATED, MONROE, N.C., and that the
seal affixed to the foregoing instrument in writing is the corporate
seal of the company, and that its authority duly given, and the said
______________________________, acknowledged the said writing to be
the act and deed of said corporation.
Notary Public
My commission expires:
F:\CORP\032\HUGHES\USED\LEASEAMD.8
AMENDMENT TO LEASE AGREEMENT
STATE OF NORTH CAROLINA )
) SS :
COUNTY OF UNION )
THIS Amendment to Lease Agreement ("Amendment") is made this 23rd
day of December, 1986 by and between Union Warehouse & Trucking
Company, Monroe, North Carolina, d/b/a Union Warehouse & Realty
Company, hereinafter referred to as "Lessor" and USCO, Inc.,
hereinafter referred to as "Lessee."
W I T N E S S E T H:
WHEREAS, Lessor and Lessee entered into that certain Lease
Agreement (the "Lease Agreement") dated March 1 , 1985, with regard to
property described as follows:
1065 Sunset Blvd., West Columbia, S.C.
and;
WHEREAS, Lessor and Lessee desire to further clarify and amend
the terms thereof as set forth more fully herein.
NOW, THEREFORE, in consideration of the mutual covenants con-
tained herein and the payment by Lessee to Lessor of Ten Dollars
($10.00), the receipt and sufficiency of which is hereby acknowledged,
the parties agree to amend the Lease Agreement as follows:
1. The foregoing recitals are true and correct and incorporated
herein by reference.
2. The term "Lessor" shall refer to Union Warehouse & Trucking
Company, d/b/a Union Warehouse & Realty Company and its successors and
assigns. The term "Lessee" shall refer to USCO, Inc. and its
successors and assigns.
3. Lessee shall renew the Lease Agreement for one (1) additional
five (5) year period ("Period") commencing upon the expiration of the
initial term referenced therein and ending on expiration of the
initial term referenced therein and ending on February 28, 1990. Base
Rent for the period shall be Three Thousand Four Hundred Dollars
($3,400.00) per month. Commencing on the 1st day of March, 1990 (the
"Adjustment Date"), and continuing on the same day of each year
thereafter during the Period, the Base Rent set forth shall be
adjusted in accordance with the following:
(a) The Consumer Price Index - U.S. City Average - All Urban
Consumer ("Index") in effect and published during the calendar month
in which the term of the Lease Agreement commenced shall be the "Base
Period Index."
(b) The Base Period Index shall be compared with the Index for
the same calendar month for the AdJustment Date. If the Index for the
Adjustment Date is higher than the Base Period Index, then the monthly
rent for the next calendar year of the lease shall be increased by one
hundred percent (100%) of the percentage increase of the Index for the
Adjustment Date over the Base Period Index.
Every year thereafter, the Index for the same calendar month
shall be compared with the Index for the immediately preceding
Adjustment Date. If the Index for the same calendar month is higher
than the Index for the immediately preceding Adjustment Date, then the
rent for the next ensuing one (1) year period shall be increased by
one hundred percent (100%) of the percentage increase of the Index for
the same calendar month over the Index for the immediately preceding
Adjustment Date. If the Index for the same calendar month has not been
published, it is agreed that the Index as issued and published for the
latest preceding month shall be used in determining the Adjustment
Rent.
(c) If the Bureau of Labor Statistics discontinues publication of
the Index, publishes the Index less frequently, or alters the Index in
a material manner, then the Lessor and Lessee may adopt a substitute
index or procedure which reasonably reflects and monitors consumer
prices as nearly as possible in the same manner as the Index.
During the Period, Lessee also shall pay the amount of any annual
taxes and insurance costs in excess of the respective amounts
applicable on March 1, 1985.
4. The following provision of the Lease Agreement is deleted in
its entirety:
It is further agreed by and between the parties
hereto that should the Lessor choose to use the
premises herein leased for some other purpose, he
shall notify the Lessee in writing of his
intention to do so at least six months prior to
the expiration of this lease.
5. In consideration of the benefits accruing to Lessor under this
Lease Agreement and Lessee's renewal thereof, and other good and
valuable consideration the receipt and sufficiency of which is
acknowledged by Lessor, Lessor does hereby grant to Lessee an
irrevocable option to purchase the property described in the Lease
Agreement ("Leased Premises") and all fixtures, equipment and
personalty owned by Lessor and located on the Leased Premises
(collectively called the "Leased Premises" in this Paragraph 5).
Lessee may exercise this option by delivering a signed written notice
thereof to Lessor not less than sixty (60) days prior to the end of
the renewal period of this Lease Agreement. If the option is duly
exercised, then this Lease Agreement shall continue in effect pending
closing. Unless extended pursuant to subparagraph (c) below, for cure
of title objections, closing shall occur on or before February 28,
1995. If the option is exercised, the purchase and sale shall be
governed and closed pursuant to the following terms:
(a) Purchase Price. The purchase price of the Leased Premises
shall be equal to the fair market value of the Leased Premises as
established by the average of two MAI appraisals, one of which shall
be completed by an appraiser selected by the Lessee at Lessee's
expense and one of which shall be completed by an appraiser selected
by the Lessor at Lessor's expense. Such appraisals shall be completed
at least fifteen (15) days prior to closing.
(b) Payment. The purchase price, subject to prorations as
hereinafter provided, shall be payable by cashier's check or wire
transfer at closing.
(c) Title Insurance. On or before thirty (30) days prior to
closing Lessee shall obtain, at Lessor's expense, a Title Insurance
Commitment ("Commitment") as to the Leased Premises issued by an
insurance company acceptable to Lessee agreeing to issue to Lessee a
marketability owner's policy in the amount of the purchase price,
insuring Lessee's title to the Leased Premises with all standard
exceptions deleted except then current ad valorem taxes and subject
only to those encumbrances and other title matters acceptable to
Lessee ("Permitted Exceptions"). Within five (5) days after receipt of
the Commitment, Lessee shall provide Lessor with written notice of any
encumbrance or title matter which is unsatisfactory to Lessee with
respect to the Leased Premises. Thereupon, Lessor shall use its best
efforts to cure said objection(s) on or before one hundred twenty
(120) days after Lessor's receipt of Lessee's notice of objection(s),
and closing shall be delayed accordingly. If Lessor is unable to cure
an objection to title, Lessee shall have the option to proceed with
the purchase, with a corresponding reduction in price, or to terminate
the purchase transaction without liability to Lessor, and without loss
or waiver of Lessee's rights as tenant under the Lease Agreement.
(d) Survey. The property may be surveyed prior to closing at
Lessee's expense by a surveyor selected by Lessee. In the event the
survey reflects any survey matter or defect unacceptable to Lessee,
other than Permitted Exceptions, same shall be treated as an objection
to title and shall be governed by subparagraph (c), above.
(e) Documents. At closing, Lessor shall deliver to Lessee: (1)
good, sufficient, marketable fee simple title to the Leased Premises
by General Warranty Deed subject only to the terms of this Lease
Agreement and the Permitted Exceptions; (2) an Affidavit attesting to
the absence of any claim or suit, outstanding judgment, rights of
possession adverse to Lessee's possession, bankruptcy, assessments,
mortgage, financing statement, or claim of lien pending against Lessor
or the Leased Premises, and as to other matters and in form as
reasonably required by Lessee; (3) a Nonforeign Affidavit attesting
that Lessor is not a "foreign person" within the meaning of Section 1445 of
the Internal Revenue Code of 1954, as amended, in the form as required
by Lessee; (4) bill of sale as to fixtures and personalty; (5) an
Assignment of Lessor's rights as landlord under this Lease; and (6)
such other documents as may be reasonably requested by Lessee.
(f) Expenses. Lessor shall pay for all recording and transfer
taxes levied on the deed or otherwise payable by virtue of the
purchase and sale transaction, title search fees, and the title
insurance premium. Lessee shall pay for the cost of the survey, if
obtained, and for the MAI appraisal.
(g) Prorations. Real estate taxes, public assessments not yet due
and payable, rents, security deposits, maintenance, utility and fuel
charges, and all other items normally adjusted at closing, shall be
prorated at closing.
(h) Assignment. This option to purchase may be assigned freely by
Lessee together with, or separately from, Lessee's rights as tenant
under this Lease Agreement.
(i) Memorandum of Option. Lessor agrees to execute a recordable
Memorandum of this option to purchase upon request by Lessee.
(j) Risk of Loss. Except as otherwise provided in this Lease
Agreement, risk of loss shall pass to Lessee at closing.
(k) Possession. Free and unencumbered possession of the Leased
Premises shall be delivered to Lessee by Lessor at
closing, subject, however, to the previously existing rights of
Lessee, as tenant, under this Lease Agreement.
6. In the event either party to the Lease Agreement shall be
required to retain an attorney to enforce its rights under any
provision of the Lease Agreement against the other party to the Lease
Agreement, the party who prevails in any dispute with, or enforcement
effort against the other party, shall be entitled to recover from the
other party such prevailing party's reasonable attorneys' fees and
costs incurred in negotiation, at trial and upon any appeal as the
result of such dispute or enforcement effort.
7. During the term of the Lease Agreement and the renewal
thereof, Lessor shall be responsible for structural maintenance of the
property and Lessee shall be responsible for all other maintenance
items.
8. The parties by execution of this Amendment to Lease Agreement
hereby amend the Lease Agreement as set forth herein, and in so doing,
reaffirm in all respects the term of the Lease Agreement as so
amended.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment to Lease Agreement to be signed in its corporate name by its
officers thereunto duly authorized as of the day and year first above
written.
WITNESSES: LESSOR:
UNION WAREHOUSE & TRUCKING
COMPANY
By:
Its: President
(Corporate Seal)
LESSEE:
USCO, INCORPORATED
By:
Its: President
(Corporate Seal)
STATE OF )
) SS :
COUNTY OF )
I HEREBY CERTIFY that on this day, before me, an officer duly
authorized in the State and County aforesaid to take acknowledgments,
personally appeared , well known to
me and known to be the President of the corporation named in the
foregoing instrument, and that he acknowledged executing the same on
behalf of the corporation in the presence of two subscribing
witnesses, freely and voluntarily under authority duly vested in him
by said corporation and that the seal affixed thereto is the true
corporate seal of said corporation.
WITNESS my hand and official seal in the County and State last
aforesaid this day of year, 1986.
NOTARY PUBLIC
My Commission Expires:
STATE OF )
) SS :
COUNTY OF )
I HEREBY CERTIFY that on this day, before me, an officer duly
authorized in the State and County aforesaid to take acknowledgments,
personally appeared well known to
me and known to be the President of the corporation named in the
foregoing instrument, and that he acknowledged executing the same on
behalf of the corporation in the presence of two subscribing
witnesses, freely and voluntarily under authority duly vested in him
by said corporation and that the seal affixed thereto is the true
corporate seal of said corporation.
WITNESS my hand and official seal in the County and State last
aforesaid this day of year, 1986.
NOTARY PUBLIC
My Commission Expires:
LEASE AGREEMENT
STATE OF North Carolina
COUNTY OF Union
THIS LEASE made this 1st day of March, 1985 between UNION
WAREHOUSE & TRUCKING CO., MONROE, NORTH CAROLINA hereinafter called
the LESSORS, and USCO INC., hereinafter called the LESSEE.
WITNESSETH:
That the said Lessors have granted and leased, and by these
presents so grant and lease unto said Lessee all that property
described as follows:
1065 Sunset Blvd., West Columbia, S.C.
TO HAVE AND TO HOLD the said premises unto the said Lessee, for
the term of FIVE (5) years beginning on 1st day of March, 1985 and
ending on 28th day of February 1990, yielding and paying therefore
during the said term the monthly rental of Three Thousand Four Hundred
Dollars ($3,400.00) Dollars payable in advance on or before the 10th
day of each month.
It is agreed that the Lessee shall have the right and first
option of a renewal of this lease, provided terms thereof can be
satisfactorily negotiated between the parties, upon the Lessee giving
Sixty (60) days notice prior to the expiration of such FIVE (5) Year
term.
It is further agreed by the Lessee to pay any increase in
property care and insurance over the base year of this lease, upon
presentation of the documents by the Lessor.
It is further agreed the Lessee may sublease the premises but in
such case it will remain liable for the rent. The Lessee, with the
written consent of the Lessors, may assign this lease, and thereafter
shall be exonerated from all liability under the terms of this lease
or renewal thereof.
It is further agreed the Lessors shall carry fire insurance on
the premises. The destruction of the premises by fire or other
casualty shall suspend the running of the term of this lease, and
shall terminate it if the parties so agree. At the option of the
Lessee the insurance on the main building shall be applied to the
reconstruction of said building. If the principal building is damaged,
but not destroyed, the rent payable under the terms of this lease
shall cease until the building is repaired by the Lessors so as to be
suitable for use.
It is further agreed the Lessee may make improvements on the
existing building and may erect buildings on the vacant lot included
in this lease, provided that such improvements or buildings comply
with all existing zoning laws, ordinances and regulations, and so that
the existing building shall not be defaced. All such improvements
shall be at the expense of the Lessee, and such fixtures shall become
a part of the realty.
It is further agreed by and between the parties hereto that
should the Lessor choose to use the premises herein leased for some
other purpose, he shall notify the Lessee in writing of his intention
to do so at least six months prior to the expiration of this lease.
Its further agreed by and between the parties hereto at the
expiration of this Lease all rents due must be paid in full before any
goods and chattels are removed from the premises herein leased.
IN WITNESS WHEREOF, the said parties have hereunto set their hand
and seals in duplicate this 1st day of March, 1985.
Witnessed by:
LESSOR
UNION WAREHOUSE & TRUCKING CO.
By:
Its: President
(Seal)
LESSEE
USCO, INCORPORATED
By:
Its: President
(Seal)
STATE OF NORTH CAROLINA )
)
COUNTY OF UNION )
This 1st day of March, 1985, personally came before me
_________________________, who, being by me duly sworn, says that he
is the President of UNION WAREHOUSE & TRUCKING CO., and that the seal
affixes to the foregoing instrument in writing is the corporate seal
of the company, and that its authority duly given. And the said -
___________________________, acknowledged the said writing to be the
act and deed of said corporation.
Notary Public
My commission expires:
STATE OF NORTH CAROLINA )
)
COUNTY OF UNION )
This 1st day of March, 1995, personally came before me -
______________________________, who, being by me duly sworn, says that
he is the President of USCO, INCORPORATED, MONROE, N.C., and that the
seal affixed to the foregoing instrument in writing is the corporate
seal of the company, and that its authority duly given, and the said
______________________________, acknowledged the said writing to be
the act and deed of said corporation.
Notary Public
My commission expires:
F:\CORP\032\HUGHES\USED\LEASEAMD.9
EXHIBIT 10.11(b)
AMENDMENT TO LEASE AGREEMENT
STATE OF NORTH CAROLINA )
) SS :
COUNTY OF UNION )
THIS Amendment to Lease Agreement ("Amendment") is made this
23rd day of December, 1986 by and between Monoca Realty Company,
Monroe, North Carolina, hereinafter referred to as "Lessor" and
USCO, Inc., hereinafter referred to as "Lessee."
W I T N E S S E T H:
WHEREAS, Lessor and Lessee entered into that certain Lease
Agreement (the "Lease Agreement") dated July 1 , 1986, with regard
to property described as follows:
Warehouse & Office
151 Pine Log Road
Aiken, S.C.
and;
WHEREAS, Lessor and Lessee desire to further clarify and amend
the terms thereof as set forth more fully herein.
NOW, THEREFORE, in consideration of the mutual covenants con-
tained herein and the payment by Lessee to Lessor of Ten Dollars
($10.00), the receipt and sufficiency of which is hereby
acknowledged, the parties agree to amend the Lease Agreement as
follows:
1. The foregoing recitals are true and correct and incor-
porated herein by reference.
2. The term "Lessor" shall refer to Union Warehouse & Trucking
Company, d/b/a Union Warehouse & Realty Company and its successors
and assigns. The term "Lessee" shall refer to USCO, Inc. and its
successors and assigns.
3. Lessee shall renew the Lease Agreement for one (1) addi-
tional five (5) year period ("Period") commencing upon the
expiration of the initial term referenced therein and ending on
February 28, 1990. Base Rent for the period shall be Eighteen
Hundred Dollars ($1,800.00) per month. Commencing on the 1st day of
March, 1990 (the "Adjustment Date"), and continuing on the same day
of each year thereafter during the Period, the Base Rent set forth
shall be adjusted in accordance with the following:
(a) The Consumer Price Index - U.S. City Average - All Urban
Consumer ("Index") in effect and published during the calendar
month in which the term of the Lease Agreement commenced shall be
the "Base Period Index."
(b) The Base Period Index shall be compared with the Index for
the same calendar month for the AdJustment Date. If the Index for
the Adjustment Date is higher than the Base Period Index, then the
monthly rent for the next calendar year of the lease shall be
increased by one hundred percent (100%) of the percentage increase
of the Index for the Adjustment Date over the Base Period Index.
Every year thereafter, the Index for the same calendar month
shall be compared with the Index for the immediately preceding
Adjustment Date. If the Index for the same calendar month is higher
than the Index for the immediately preceding Adjustment Date, then
the rent for the next ensuing one (1) year period shall be
increased by one hundred percent (100%) of the percentage increase
of the Index for the same calendar month over the Index for the
immediately preceding Adjustment Date. If the Index for the same
calendar month has not been published, it is agreed that the Index
as issued and published for the latest preceding month shall be
used in determining the Adjustment Rent.
(c) If the Bureau of Labor Statistics discontinues publication
of the Index, publishes the Index less frequently, or alters the
Index in a material manner, then the Lessor and Lessee may adopt a
substitute index or procedure which reasonably reflects and
monitors consumer prices as nearly as possible in the same manner
as the Index.
During the Period, Lessee also shall pay the amount of any
annual taxes and insurance costs in excess of the respective
amounts applicable on July 1, 1986.
4. The following provision of the Lease Agreement is deleted
in its entirety:
It is further agreed by and between the par-
ties hereto that should the Lessor choose to
use the premises herein leased for some other
purpose, he shall notify the Lessee in writing
of his intention to do so at least six months
prior to the expiration of this lease.
5. In consideration of the benefits accruing to Lessor under
this Lease Agreement and Lessee's renewal thereof, and other good
and valuable consideration the receipt and sufficiency of which is
acknowledged by Lessor, Lessor does hereby grant to Lessee an
irrevocable option to purchase the property described in the Lease
Agreement ("Leased Premises") and all fixtures, equipment and
personalty owned by Lessor and located on the Leased Premises
(collectively called the "Leased Premises" in this Paragraph 5).
Lessee may exercise this option by delivering a signed written
notice thereof to Lessor not less than sixty (60) days prior to the
end of the renewal period of this Lease Agreement. If the option is
duly exercised, then this Lease Agreement shall continue in effect
pending closing. Unless extended pursuant to subparagraph (c)
below, for cure of title objections, closing shall occur on or
before February 28, 1995. If the option is exercised, the purchase
and sale shall be governed and closed pursuant to the following
terms:
(a) Purchase Price. The purchase price of the Leased Premises
shall be equal to the fair market value of the Leased Premises as
established by the average of two MAI appraisals, one of which
shall be completed by an appraiser selected by the Lessee at
Lessee's expense and one of which shall be completed by an
appraiser selected by the Lessor at Lessor's expense. Such
appraisals shall be completed at least fifteen (15) days prior to
closing.
(b) Payment. The purchase price, subject to prorations as
hereinafter provided, shall be payable by cashier's check or wire
transfer at closing.
(c) Title Insurance. On or before thirty (30) days prior to
closing Lessee shall obtain, at Lessor's expense, a Title Insurance
Commitment ("Commitment") as to the Leased Premises issued by an
insurance company acceptable to Lessee agreeing to issue to Lessee
a marketability owner's policy in the amount of the purchase price,
insuring Lessee's title to the Leased Premises with all standard
exceptions deleted except then current ad valorem taxes and subject
only to those encumbrances and other title matters acceptable to
Lessee ("Permitted Exceptions"). Within five (5) days after receipt
of the Commitment, Lessee shall provide Lessor with written notice
of any encumbrance or title matter which is unsatisfactory to
Lessee with respect to the Leased Premises. Thereupon, Lessor shall
use its best efforts to cure said objection(s) on or before one
hundred twenty (120) days after Lessor's receipt of Lessee's notice
of objection(s), and closing shall be delayed accordingly. If
Lessor is unable to cure an objection to title, Lessee shall have
the option to proceed with the purchase, with a corresponding
reduction in price, or to terminate the purchase transaction
without liability to Lessor, and without loss or waiver of Lessee's
rights as tenant under the Lease Agreement.
(d) Survey. The property may be surveyed prior to closing at
Lessee's expense by a surveyor selected by Lessee. In the event the
survey reflects any survey matter or defect unacceptable to Lessee,
other than Permitted Exceptions, same shall be treated as an
objection to title and shall be governed by subparagraph (c),
above.
(e) Documents. At closing, Lessor shall deliver to Lessee: (1)
good, sufficient, marketable fee simple title to the Leased
Premises by General Warranty Deed subject only to the terms of this
Lease Agreement and the Permitted Exceptions; (2) an Affidavit
attesting to the absence of any claim or suit, outstanding
judgment, rights of possession adverse to Lessee's possession,
bankruptcy, assessments, mortgage, financing statement, or claim of
lien pending against Lessor or the Leased Premises, and as to other
matters and in form as reasonably required by Lessee; (3) a
Nonforeign Affidavit attesting that Lessor is not a "foreign
person" within the meaning of Section 1445 of the Internal Revenue Code
of 1954, as amended, in the form as required by Lessee; (4) bill of
sale as to fixtures and personalty; (5) an Assignment of Lessor's
rights as landlord under this Lease; and (6) such other documents
as may be reasonably requested by Lessee.
(f) Expenses. Lessor shall pay for all recording and transfer
taxes levied on the deed or otherwise payable by virtue of the
purchase and sale transaction, title search fees, and the title
insurance premium. Lessee shall pay for the cost of the survey, if
obtained, and for the MAI appraisal.
(g) Prorations. Real estate taxes, public assessments not yet
due and payable, rents, security deposits, maintenance, utility and
fuel charges, and all other items normally adjusted at closing,
shall be prorated at closing.
(h) Assignment. This option to purchase may be assigned freely
by Lessee together with, or separately from, Lessee's rights as
tenant under this Lease Agreement.
(i) Memorandum of Option. Lessor agrees to execute a
recordable Memorandum of this option to purchase upon request by
Lessee.
(j) Risk of Loss. Except as otherwise provided in this Lease
Agreement, risk of loss shall pass to Lessee at closing.
(k) Possession. Free and unencumbered possession of the Leased
Premises shall be delivered to Lessee by Lessor at
closing, subject, however, to the previously existing rights of
Lessee, as tenant, under this Lease Agreement.
6. In the event either party to the Lease Agreement shall be
required to retain an attorney to enforce its rights under any
provision of the Lease Agreement against the other party to the
Lease Agreement, the party who prevails in any dispute with, or
enforcement effort against the other party, shall be entitled to
recover from the other party such prevailing party's reasonable
attorneys' fees and costs incurred in negotiation, at trial and
upon any appeal as the result of such dispute or enforcement
effort.
7. During the term of the Lease Agreement and the renewal
thereof, Lessor shall be responsible for structural maintenance of
the property and Lessee shall be responsible for all other
maintenance items.
8. The parties by execution of this Amendment to Lease
Agreement hereby amend the Lease Agreement as set forth herein, and
in so doing, reaffirm in all respects the term of the Lease
Agreement as so amended.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment to Lease Agreement to be signed in its corporate name by
its officers thereunto duly authorized as of the day and year first
above written.
WITNESSES: LESSOR:
MONOCA REALTY COMPANY
By:
Its: Agent
(Corporate Seal)
LESSEE:
USCO, INCORPORATED
By:
Its: President
(Corporate Seal)
STATE OF )
) SS :
COUNTY OF )
I HEREBY CERTIFY that on this day, before me, an officer duly
authorized in the State and County aforesaid to take
acknowledgments, personally appeared ,
well known to me and known to be the President of the
corporation named in the foregoing instrument, and that he
acknowledged executing the same on behalf of the corporation in the
presence of two subscribing witnesses, freely and voluntarily under
authority duly vested in him by said corporation and that the seal
affixed thereto is the true corporate seal of said corporation.
WITNESS my hand and official seal in the County and State last
aforesaid this day of year, 1986.
NOTARY PUBLIC
My Commission Expires:
STATE OF )
) SS :
COUNTY OF )
I HEREBY CERTIFY that on this day, before me, an officer duly
authorized in the State and County aforesaid to take
acknowledgments, personally appeared
well known to me and known to be the President of the
corporation named in the foregoing instrument, and that he
acknowledged executing the same on behalf of the corporation in the
presence of two subscribing witnesses, freely and voluntarily under
authority duly vested in him by said corporation and that the seal
affixed thereto is the true corporate seal of said corporation.
WITNESS my hand and official seal in the County and State last
aforesaid this day of year, 1986.
NOTARY PUBLIC
My Commission Expires:
LEASE AGREEMENT
STATE OF North Carolina
COUNTY OF Union
THIS LEASE made this 1st day of July, 1986, between
MONOCA REALTY COMPANY, MONROE, NORTH CAROLINA hereinafter called
the LESSORS,
and USCO INCORPORATED, hereinafter called the LESSEE.
WITNESSETH:
That the said Lessors have granted and leased, and by these
presents so grant and lease unto said Lessee all that property
described as follows:
WAREHOUSE & OFFICE
151 Pine Log Road
Aiken, S.C.
TO HAVE AND TO HOLD the said premises unto the said Lessee,
for the term of Forty-four (44) months beginning on 1st day of
July, 1986, and ending on 28th day of February 1990, yielding and
paying therefore during the said term the monthly rental of
Eighteen Hundred Dollars ($1,800.00) Dollars payable in advance on
or before the 10th day of each month.
It is agreed that the Lessee shall have the right and first
option of a renewal of this lease, provided terms thereof can be
satisfactorily negotiated between the parties, upon the Lessee
giving Sixty (60) days notice prior to the expiration of such
Forty-Four (44) term.
It is further agreed by the Lessee to pay any increase in
property care and insurance over the base year of this lease, upon
presentation of the documents by the Lessor.
It is further agreed the Lessee may sublease the premises but
in such case it will remain liable for the rent. The Lessee, with
the written consent of the Lessors, may assign this lease, and
thereafter shall be exonerated from all liability under the terms
of this lease or renewal thereof.
It is further agreed the Lessors shall carry fire insurance on
the premises. The destruction of the premises by fire or other
casualty shall suspend the running of the term of this lease, and
shall terminate it if the parties so agree. At the option of the
Lessee the insurance on the main building shall be applied to the
reconstruction of said building. If the principal building is
damaged, but not destroyed, the rent payable under the terms of
this lease shall cease until the building is repaired by the
Lessors so as to be suitable for use.
It is further agreed the Lessee may make improvements on the
existing building and may erect buildings on the vacant lot
included in this lease, provided that such improvements or
buildings comply with all existing zoning laws, ordinances and
regulations, and so that the existing building shall not be
defaced. All such improvements shall be at the expense of the
Lessee, and such fixtures shall become a part of the realty.
It is further agreed by and between the parties hereto that
should the Lessor choose to use the premises herein leased for some
other purpose, he shall notify the Lessee in writing of his
intention to do so at least six months prior to the expiration of
this lease.
Its further agreed by and between the parties hereto at the
expiration of this Lease all rents due must be paid in full before
any goods and chattels are removed from the premises herein leased.
IN WITNESS WHEREOF, the said parties have hereunto set their
hand and seals in duplicate this 1st day of July, 1986.
Witnessed by:
LESSOR
MONOCA REALTY COMPANY
By:
Its: Agent
(Seal)
Secretary
LESSEE
USCO, INCORPORATED
By:
Its: President
(Seal)
Secretary
STATE OF NORTH CAROLINA )
)
COUNTY OF UNION )
This 1st day of March, 1985, personally came before me
_________________________, who, being by me duly sworn, says that
he is the Agent of MONOCA REALTY COMPANY, and that the seal affixes
to the foregoing instrument in writing is the corporate seal of the
company, and that its authority duly given. And the said
___________________________, acknowledged the said -
writing to be the act and deed of said corporation.
Notary Public
My commission expires:
STATE OF NORTH CAROLINA )
)
COUNTY OF UNION )
This 1st day of March, 1995, personally came before me -
______________________________, who, being by me duly sworn, says
that he is the President of USCO, INCORPORATED, MONROE, N.C., and
that the seal affixed to the foregoing instrument in writing is the
corporate seal of the company, and that its authority duly given,
and the said ______________________________, acknowledged the said
writing to be the act and deed of said corporation.
Notary Public
My commission expires:
F:\CORP\032\HUGHES\USED\LEASEAMD.10
EXHIBIT 10.11(c)
LEASE AGREEMENT
STATE OF NORTH CAROLINA
COUNTY OF UNION
THIS LEASE made this 1st day of March, 1990 between UNION
WAREHOUSE & REALTY COMPANY, MONROE, NORTH CAROLINA hereinafter called the
LESSORS and USCO, INCORPORATED, hereinafter called the LESSEE.
WITNESSETH:
That the said Lessors have granted and leased, and by these
presents so grant and lease unto said Lessee all that property described as
follows:
1234 S. Pleasantburg Drive
Greenville, SC 29605
TO HAVE AND TO HOLD the said premises unto the said Lessee,
for the term of five (5) years beginning on the lst day of March,
1990 and ending on the 28th day of February, 1995, yielding and
paying therefore during the said term the monthly rental of Five
Thousand Two Hundred Nineteen ($5,219.00) Dollars payable in advance
on or before the 10th day of each month.
It is agreed that the Lessee shall have the right and first
option of a renewal of this lease, provided terms thereof can be
satisfactorily negotiated between the parties, upon the Lessee
giving Sixty (60) days notice prior to the expiration of such
five (5) year term.
It is further agreed by the Lessee to pay any increase in
property taxes and insurance over the base year of this lease,
upon presentation of the documents by the Lessor
It is further agreed the Lessors shall carry fire insurance
on the premises. The destruction of the premises by fire or
other casualty shall suspend the running of the term of this
lease, and shall terminate it if the parties so agree. At the
option of the Lessee the insurance on the main building shall be
applied to the reconstruction of said building. If the principal
building is damaged, but not destroyed, the rent payable under
the terms of this lease shall cease until the building is
repaired by the Lessors so as to be suitable for use.
It is further agreed the Lessee may make improvements on the
existing building and may erect buildings on the vacant lot
included in this lease, provided that such improvements or
buildings comply with all existing zoning laws, ordinances and
regulations, and so that the existing building shall not be
defaced. All such improvements shall be at the expense of the
Lessee, and such fixtures shall become a part of the realty.
It is further agreed by and between the parties hereto that
should the Lessor choose to use the premises herein leased for
some other purpose, he shall notify the Lessee in writing of his
intention to do so at least six months prior to the expiration of
this lease.
It is further agreed by and between the parties hereto at
the expiration of this lease all rents due must be paid in full
before any goods and chattels are removed from the premises
herein leased.
IN WITNESS WHEREOF, the said parties have hereunto set their
hand and seals in duplicate this ______ day of
____________________ 19_____.
Witnessed by:
__________________________________ UNION WAREHOUSE & REALTY CO.
Lessor
__________________________________ By
Secretary President (Seal)
__________________________________ USCO, INCORPORATED.
By
President (Seal)
STATE OF NORTH CAROLINA
COUNTY OF UNION
This 1st day of March, 1990, personally came before me
_________________________who, being by me duly sworn, says that
he is the President of UNION WAREHOUSE & REALTY CO., and that
the seal affixed to the foregoing instrument in writing is the
corporate seal of the company, and that it's authority duly
given. And the said __________________________________________
acknowledged the said writing to be the act and deed of said
corporation.
_____________________________
Notary Public
My Commission expires:_____________________
STATE OF NORTH CAROLINA
COUNTY OF UNION
This 1st day of March, 1990, personally came before me
_____________________, who, being by me duly sworn, says that
he is the President of_______________________________________,
and that the seal affixed to the foregoing instrument in writing
is the corporate seal of the company, and that its authority duly
given, and the said __________________________, acknowledged that
the said writing to be the act and deed of said corporation.
_____________________________
Notary Public
My Commission expires: _____________________
AMENDMENT TO LEASE AGREEMENT
STATE OF NORTH CAROLINA
COUNTY OF UNION
THIS Amendment to Lease Agreement ("Amendment") is made this
1st day of March, 1990 by and between Union Warehouse & Realty
Company, Monroe, North Carolina, hereinafter referred to as
"Lessor" and USCO, Inc., hereinafter referred to as "Lessee."
W I T N E S S E T H:
WHEREAS, Lessor and Lessee entered into that certain Lease
Agreement (the "Lease Agreement") dated March 1, 1990, with
regard to property described as follows:
1234 S. Pleasantburg Drive
Greenville, SC 29605
and;
WHEREAS, Lessor and Lessee desire to further clarify and
amend the terms thereof as set forth more fully herein.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein and the payment by Lessee to Lessor of Ten
Dollars ($10.00), the receipt and sufficiency of which is hereby
acknowledged, the parties agree to amend the Lease Agreement as
follows:
1. The foregoing recitals are true and correct and
incorporated herein by reference.
2. The term "Lessor" shall refer to Union Warehouse &
Realty Company and it's successors and assigns. The term
"Lessee" shall refer to USCO, INCORPORATED and it's successors
and assigns.
3. Base rent for the period shall be Five Thousand Two
Hundred Nineteen Dollars ($5,219) per month. Commencing on the
1st day of March, 1990 (the "Adjustment Date"), and continuing on
the same day of each year thereafter during the Period, the Base
Rent set forth shall be adjusted in accordance with the
following:
(a) The Consumer Price Index - U. S. City Average -
All Urban Consumer ("Index") in effect and published during the
calendar month in which the term of the Lease Agreement commenced
shall be the "Base Period Index."
(b) The Base Period Index shall be compared with the
Index for the same calendar month for the Adjustment Date. If
the Index for the Adjustment Date is higher than the Base Period
Index, then the monthly rent for the next calendar year of the
lease shall be increased by one hundred percent (100%) of the
percentage increase of the Index for the Adjustment Date over the
Base Period Index.
Every year thereafter, the index for the same calendar month
shall be compared with the Index for the immediately preceding
Adjustment Date. If the Index for the same calendar month is
higher than the Index for the immediately preceding Adjustment
Date, then the rent for the next ensuing one (1) year period
shall be increased by one hundred percent (100%) of the
percentage increase of the Index for the same calendar month over
the Index for the immediately preceding Adjustment Date. If the
Index for the same calendar month has not been published, it is
agreed that the Index as issued and published for the latest
preceding month shall be used in determining the Adjustment Rent.
(c) If the Bureau of Labor Statistics discontinues
publication of the Index, publishes the Index less frequently, or
alters the index in a material manner, then the Lessor and Lessee
may adopt a substitute index or procedure which reasonably
reflects and monitors consumer prices as nearly as possible in
the same manner as the Index.
During the Period, Lessee also shall pay the amount of any
annual taxes and insurance costs in excess of the respective
amounts applicable on March 1, 1990.
4. The following provision of the Lease Agreement is
deleted in its entirety:
It is further agreed by and between the parties
hereto that should the Lessor choose to use the
premises herein leased for some other purpose, he
shall notify the Lessee in writing of his
intention to do so at least six months prior to
the expiration of this lease.
5. In consideration of the benefits accruing to Lessor
under this Lease Agreement and Lessee's renewal thereof, and
other good and valuable consideration the receipt and sufficiency
of which is acknowledged by Lessor, Lessor does hereby grant to
Lessee an irrevocable option to purchase the property described
in the Lease Agreement ("Leased Premises") and all fixtures,
equipment and personalty owned by Lessor and located on the
Leased Premises (collectively called the "Leased Premises" in
this Paragraph 5). Lessee may exercise this option by delivering
a signed written notice thereof to Lessor not less than sixty
(60) days prior to the end of the renewal period of this Lease
Agreement. If the option is duly exercised, then this Lease
Agreement shall continue in effect pending closing. Unless
extended pursuant to subparagraph (c) below, for cure of title
objections, closing shall occur on or before February 28, 1995.
If the option is exercised, the purchase and sale shall be
governed and closed pursuant to the following terms:
(a) Purchase Price. The purchase price of the Leased
Premises shall be equal to the fair market value of the Leased
Premises as established by the average of two MAI appraisals, one
of which shall be completed by an appraiser selected by the
Lessee at Lessee's expense and one of which shall be completed by
an appraiser selected by the Lessor at Lessor's expense. Such
appraisals shall be completed at least fifteen (15) days prior to
closing.
(b) Payment. The purchase price, subject to
prorations as hereafter provided, shall be payable by cashier's
check or wire transfer at closing.
(c) Title Insurance. On or before thirty (30) days
prior to closing Lessee shall obtain, at Lessor's expense, a
Title Insurance Commitment ("Commitment") as to the Leased
Premises issued by an insurance company acceptable to Lessee
agreeing to issue to Lessee a marketability owner's policy in the
amount of the purchase price, insuring Lessee's title to the
Leased Premises with all standard exceptions deleted except then
current ad valorem taxes and subject only to those encumbrances
and other title matters acceptable to Lessee ("Permitted
Exceptions"). Within five (5) days after receipt of the
Commitment, Lessee shall provide Lessor with written notice of
any encumbrance or title matter which is unsatisfactory to Lessee
with respect to the Leased Premises. Thereupon, Lessor shall use
its best efforts to cure said objection(s) on or before one
hundred twenty (120) days after Lessor's receipt of Lessee's
notice of objections(s), and closing shall be delayed
accordingly. If Lessor is unable to cure an objection to title,
Lessee shall have the option to proceed with the purchase, with a
corresponding reduction in price, or to terminate the purchase
transaction without liability to Lessor, and without loss or
waiver of Lessee's rights as tenant under the Lease Agreement.
(d) Survey. the property may be surveyed prior to
closing at Lessee's expense by a surveyor selected by Lessee. In
the event the survey reflects any survey matter or defect
unacceptable to Lessee, other than Permitted Exceptions, same
shall be treated as an objection to title and shall be governed
by subparagraph (c), above.
(e) Documents. At closing, Lessor shall deliver to
Lessee: (1) good, sufficient, marketable fee simple title to the
Leased Premises by General Warranty Deed subject only to the
terms of this Lease Agreement and the permitted exceptions; (2)
an Affidavit attesting to the absence of any claim or suit,
outstanding judgement, rights of possession adverse to Lessee's
possession, bankruptcy, assessments, mortgage, financing
statement, or claim of lien pending against Lessor or the Leased
Premises, and as to other matters and in form as reasonably
required by Lessee; (3) a Nonforeign Affidavit attesting that
Lessor is not a "foreign person" within the meaning of Section 1445 of
the Internal Revenue Code of 1954, as amended, in the form as
required by Lessee; (4) bill of sale as to fixtures and
personalty; (5) an Assignment of Lessor's rights as landlord
under this Lease; and (6) such other documents as may be
reasonably requested by Lessee.
(f) Expenses. Lessor shall pay for all recording and
transfer taxes levied on the deed or otherwise payable by virtue
of the purchase and sale transaction, title search fees, and the
title insurance premium. Lessee shall pay for the cost of the
survey, if obtained, and for the MAI appraisal.
(g) Prorations. Real Estate taxes, public assessments
not yet due and payable, rents, security deposits, maintenance,
utility and fuel charges, and all other items normally adjusted
at closing, shall be prorated at closing.
(h) Assignment. This option to purchase may be
assigned freely by Lessee together with, or separately from,
Lessee's rights as tenant under this Lease Agreement.
(i) Memorandum of Option. Lessor agrees to execute a
recordable Memorandum of this option to purchase upon request by
Lessee.
(j) Risk of Loss. Except as otherwise provided in
this Lease Agreement, risk of loss shall pass to Lessee at
closing.
(k) Possession. Free and unencumbered possession of
the Leased Premises shall be delivered to Lessee by Lessor at
closing, subject, however, to the previously existing rights of
Lessee, as tenant, under this Lease Agreement.
6. In the event either party to the Lease Agreement shall
be required to retain an attorney to enforce its rights under any
provision of the Lease Agreement against the other party to the
Lease Agreement, the party who prevails in any dispute with, or
enforcement effort against the other party, shall be entitled to
recover from the other party such prevailing party's reasonable
attorneys' fees and costs incurred in negotiation, at trail and
upon any appeal as the result of such dispute or enforcement
effort.
7. During the term of the Lease Agreement and the renewal
thereof, Lessor shall be responsible for structural maintenance
of the property and Lessee shall be responsible for all other
maintenance items.
8. The parties by execution of this Amendment to Lease
Agreement hereby amend the Lease Agreement as set forth herein,
and in so doing, reaffirm in all respects the term of the Lease
Agreement as so amended.
IN WITNESS WHEREOF, each of the parties hereto has caused
this Amendment to Lease Agreement to be signed in its corporate
name by its officers thereunto duly authorized as of the day and
year first above written.
WITNESSES: LESSOR:
UNION WAREHOUSE & REALTY CO.
_______________________________ By:
It's: President
_______________________________
(Corporate Seal)
LESSEE:
USCO, INCORPORATED
_______________________________ By:
It's: President
_______________________________
(Corporate Seal)
EXHIBIT 10.11(d)
LEASE AGREEMENT
STATE OF NORTH CAROLINA
COUNTY OF UNION
THIS LEASE made this 1st day of November, 1993 between
UNION WAREHOUSE & REALTY COMPANY, MONROE, NORTH CAROLINA hereinafter
called the LESSORS and USCO, INCORPORATED, hereinafter called the
LESSEE.
WITNESSETH:
That the said Lessors have granted and leased, and by these
presents so grant and lease unto said Lessee all that property
described as follows:
320 Second Street
Cheraw, SC 29520
TO HAVE AND TO HOLD the said premises unto the said Lessee,
for the term of two years four months (2.4) beginning on the 1st
day of November, 1993 and ending on the 28th day of February 1995,
yielding and paying therefore during the said term the monthly
rental of One Thousand Seven Hundred Fifty Dollars ($1,750) payable
in advance on or before the 10th day of each month.
It is agreed that the Lessee shall have the right and first
option of a renewal of this lease, provided terms thereof can be
satisfactorily negotiated between the parties, upon the Lessee
giving Sixty (60) days notice prior to the expiration of such
five (5) year term.
It is further agreed by the Lessee to pay any increase in
property taxes and insurance over the base year of this lease,
upon presentation of the documents by the Lessor
It is further agreed the Lessors shall carry fire insurance
on the premises. The destruction of the premises by fire or
other casualty shall suspend the running of the term of this
lease, and shall terminate it if the parties so agree. At the
option of the Lessee the insurance on the main building shall be
applied to the reconstruction of said building. If the principal
building is damaged, but not destroyed, the rent payable under
the terms of this lease shall cease until the building is
repaired by the Lessors so as to be suitable for use.
It is further agreed the Lessee may make improvements on the
existing building and may erect buildings on the vacant lot
included in this lease, provided that such improvements or
buildings comply with all existing zoning laws, ordinances and
regulations, and so that the existing building shall not be
defaced. All such improvements shall be at the expense of the
Lessee, and such fixtures shall become a part of the realty.
It is further agreed by and between the parties hereto that
should the Lessor choose to use the premises herein leased for
some other purpose, he shall notify the Lessee in writing of his
intention to do so at least six months prior to the expiration of
this lease.
It is further agreed by and between the parties hereto at
the expiration of this lease all rents due must be paid in full
before any goods and chattels are removed from the premises
herein leased.
IN WITNESS WHEREOF, the said parties have hereunto set their
hand and seals in duplicate this ______ day of
____________________ 19_____.
Witnessed by:
________________________________ UNION WAREHOUSE & REALTY CO.
Lessor
________________________________ By
Secretary President (Seal)
________________________________ USCO, INCORPORATED
By
President (Seal)
STATE OF NORTH CAROLINA
COUNTY OF UNION
This 1st day of November, 1993, personally came before me
_______________________who, being by me duly sworn, says that he
is the President of UNION WAREHOUSE & REALTY CO., and that the seal
affixed to the foregoing instrument in writing is the corporate seal
of the company, and that it's authority duly given. And the said
____________________________, acknowledged the said writing to be
the act and deed of said corporation.
____________________________________
Notary Public
My Commission expires:_____________________
STATE OF NORTH CAROLINA
COUNTY OF UNION
This 1st day of November, 1993, personally came before me
______________________,who, being by me duly sworn, says that he
is the President of USCO, INCORPORATED, and that the seal affixed
to the foregoing instrument in writing is the corporate seal of the
company, and that its authority duly given, and the said
_______________________________, writing to be the act and deed of
said corporation.
____________________________________
Notary Public
My Commission expires: _____________________
AMENDMENT TO LEASE AGREEMENT
STATE OF NORTH CAROLINA
COUNTY OF UNION
THIS Amendment to Lease Agreement ("Amendment") is made this
1st day of November, 1993 by and between Union Warehouse & Realty
Company, Monroe, North Carolina, hereinafter referred to as
"Lessor" and USCO, Inc., hereinafter referred to as "Lessee."
W I T N E S S E T H:
WHEREAS, Lessor and Lessee entered into that certain Lease
Agreement (the "Lease Agreement") dated November 1, 1993, with
regard to property described as follows:
320 Second Street
Cheraw, SC 29520
and;
WHEREAS, Lessor and Lessee desire to further clarify and
amend the terms thereof as set forth more fully herein.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein and the payment by Lessee to Lessor of Ten
Dollars ($10.00), the receipt and sufficiency of which is hereby
acknowledged, the parties agree to amend the Lease Agreement as
follows:
1. The foregoing recitals are true and correct and
incorporated herein by reference.
2. The term "Lessor" shall refer to Union Warehouse &
Realty Company and it's successors and assigns. The term
"Lessee" shall refer to USCO, INC. and it's successors and
assigns.
3. Base rent for the period shall be One Thousand Seven
Hundred Fifty Dollars ($1,750) per month. Commencing on the 1st
day of November, 1993 (the "Adjustment Date"), and continuing on
the same day of each year thereafter during the Period, the Base
Rent set forth shall be adjusted in accordance with the
following:
(a) The Consumer Price Index - U. S. City Average -
All Urban Consumer ("Index") in effect and published during the
calendar month in which the term of the Lease Agreement commenced
shall be the "Base Period Index."
(b) The Base Period Index shall be compared with the
Index for the same calendar month for the Adjustment Date. If
the Index for the Adjustment Date is higher than the Base Period
Index, then the monthly rent for the next calendar year of the
lease shall be increased by one hundred percent (100%) of the
percentage increase of the Index for the Adjustment Date over the
Base Period Index.
Every year thereafter, the index for the same calendar month
shall be compared with the Index for the immediately preceding
Adjustment Date. If the Index for the same calendar month is
higher than the Index for the immediately preceding Adjustment
Date, then the rent for the next ensuing one (1) year period
shall be increased by one hundred percent (100%) of the
percentage increase of the Index for the same calendar month over
the Index for the immediately preceding Adjustment Date. If the
Index for the same calendar month has not been published, it is
agreed that the Index as issued and published for the latest
preceding month shall be used in determining the Adjustment Rent.
(c) If the Bureau of Labor Statistics discontinues
publication of the Index, publishes the Index less frequently, or
alters the index in a material manner, then the Lessor and Lessee
may adopt a substitute index or procedure which reasonably
reflects and monitors consumer prices as nearly as possible in
the same manner as the Index.
During the Period, Lessee also shall pay the amount of any
annual taxes and insurance costs in excess of the respective
amounts applicable on November 1, 1993.
4. The following provision of the Lease Agreement is
deleted in its entirety:
It is further agreed by and between the parties
hereto that should the Lessor choose to use the
premises herein leased for some other purpose,
he shall notify the Lessee in writing of his
intention to do so at least six months prior to
the expiration of this lease.
5. In consideration of the benefits accruing to Lessor
under this Lease Agreement and Lessee's renewal thereof, and
other good and valuable consideration the receipt and sufficiency
of which is acknowledged by Lessor, Lessor does hereby grant to
Lessee an irrevocable option to purchase the property described
in the Lease Agreement ("Leased Premises") and all fixtures,
equipment and personalty owned by Lessor and located on the
Leased Premises (collectively called the "Leased Premises" in
this Paragraph 5). Lessee may exercise this option by delivering
a signed written notice thereof to Lessor not less than sixty
(60) days prior to the end of the renewal period of this Lease
Agreement. If the option is duly exercised, then this Lease
Agreement shall continue in effect pending closing. Unless
extended pursuant to subparagraph (c) below, for cure of title
objections, closing shall occur on or before February 28, 1995.
If the option is exercised, the purchase and sale shall be
governed and closed pursuant to the following terms:
(a) Purchase Price. The purchase price of the Leased
Premises shall be equal to the fair market value of the Leased
Premises as established by the average of two MAI appraisals, one
of which shall be completed by an appraiser selected by the
Lessee at Lessee's expense and one of which shall be completed by
an appraiser selected by the Lessor at Lessor's expense. Such
appraisals shall be completed at least fifteen (15) days prior to
closing.
(b) Payment. The purchase price, subject to
prorations as hereafter provided, shall be payable by cashier's
check or wire transfer at closing.
(c) Title Insurance. On or before thirty (30) days
prior to closing Lessee shall obtain, at Lessor's expense, a
Title Insurance Commitment ("Commitment") as to the Leased
Premises issued by an insurance company acceptable to Lessee
agreeing to issue to Lessee a marketability owner's policy in the
amount of the purchase price, insuring Lessee's title to the
Leased Premises with all standard exceptions deleted except then
current ad valorem taxes and subject only to those encumbrances
and other title matters acceptable to Lessee ("Permitted
Exceptions"). Within five (5) days after receipt of the
Commitment, Lessee shall provide Lessor with written notice of
any encumbrance or title matter which is unsatisfactory to Lessee
with respect to the Leased Premises. Thereupon, Lessor shall use
its best efforts to cure said objection(s) on or before one
hundred twenty (120) days after Lessor's receipt of Lessee's
notice of objections(s), and closing shall be delayed
accordingly. If Lessor is unable to cure an objection to title,
Lessee shall have the option to proceed with the purchase, with a
corresponding reduction in price, or to terminate the purchase
transaction without liability to Lessor, and without loss or
waiver of Lessee's rights as tenant under the Lease Agreement.
(d) Survey. the property may be surveyed prior to
closing at Lessee's expense by a surveyor selected by Lessee. In
the event the survey reflects any survey matter or defect
unacceptable to Lessee, other than Permitted Exceptions, same
shall be treated as an objection to title and shall be governed
by subparagraph (c), above.
(e) Documents. At closing, Lessor shall deliver to
Lessee: (1) good, sufficient, marketable fee simple title to the
Leased Premises by General Warranty Deed subject only to the
terms of this Lease Agreement and the permitted exceptions; (2)
an Affidavit attesting to the absence of any claim or suit,
outstanding judgement, rights of possession adverse to Lessee's
possession, bankruptcy, assessments, mortgage, financing
statement, or claim of lien pending against Lessor or the Leased
Premises, and as to other matters and in form as reasonably
required by Lessee; (3) a Nonforeign Affidavit attesting that
Lessor is not a "foreign person" within the meaning of Section 1445 of
the Internal Revenue Code of 1954, as amended, in the form as
required by Lessee; (4) bill of sale as to fixtures and
personalty; (5) an Assignment of Lessor's rights as landlord
under this Lease; and (6) such other documents as may be
reasonably requested by Lessee.
(f) Expenses. Lessor shall pay for all recording and
transfer taxes levied on the deed or otherwise payable by virtue
of the purchase and sale transaction, title search fees, and the
title insurance premium. Lessee shall pay for the cost of the
survey, if obtained, and for the MAI appraisal.
(g) Prorations. Real Estate taxes, public assessments
not yet due and payable, rents, security deposits, maintenance,
utility and fuel charges, and all other items normally adjusted
at closing, shall be prorated at closing.
(h) Assignment. This option to purchase may be
assigned freely by Lessee together with, or separately from,
Lessee's rights as tenant under this Lease Agreement.
(i) Memorandum of Option. Lessor agrees to execute a
recordable Memorandum of this option to purchase upon request by
Lessee.
(j) Risk of Loss. Except as otherwise provided in
this Lease Agreement, risk of loss shall pass to Lessee at
closing.
(k) Possession. Free and unencumbered possession of
the Leased Premises shall be delivered to Lessee by Lessor at
closing, subject, however, to the previously existing rights of
Lessee, as tenant, under this Lease Agreement.
6. In the event either party to the Lease Agreement shall
be required to retain an attorney to enforce its rights under any
provision of the Lease Agreement against the other party to the
Lease Agreement, the party who prevails in any dispute with, or
enforcement effort against the other party, shall be entitled to
recover from the other party such prevailing party's reasonable
attorneys' fees and costs incurred in negotiation, at trail and
upon any appeal as the result of such dispute or enforcement
effort.
7. During the term of the Lease Agreement and the renewal
thereof, Lessor shall be responsible for structural maintenance
of the property and Lessee shall be responsible for all other
maintenance items.
8. The parties by execution of this Amendment to Lease
Agreement hereby amend the Lease Agreement as set forth herein,
and in so doing, reaffirm in all respects the term of the Lease
Agreement as so amended.
IN WITNESS WHEREOF, each of the parties hereto has caused
this Amendment to Lease Agreement to be signed in its corporate
name by its officers thereunto duly authorized as of the day and
year first above written.
WITNESSES: LESSOR:
UNION WAREHOUSE & REALTY CO.
_______________________________ By:
It's: President
_______________________________
(Corporate Seal)
LESSEE:
USCO, INCORPORATED
_______________________________ By:
It's: President
_______________________________
(Corporate Seal)
EXHIBIT 10.11(e)
LEASE AGREEMENT
STATE OF North Carolina
COUNTY OF Union
THIS LEASE made this 1st day of March, 1985 between UNION
WAREHOUSE & TRUCKING CO., MONROE, NORTH CAROLINA hereinafter called
the LESSORS, and USCO, INC., hereinafter called the LESSEE.
WITNESSETH:
That the said Lessors have granted and leased, and by these
presents so grant and lease unto said Lessee all that property
described as follows:
1515 MORGAN MILL ROAD
TO HAVE AND TO HOLD the said premises unto the said Lessee,
for the term of twenty-nine (29) months beginning on the 1st day of
OCTOBER 1992 and ending on the 28th day of February 1995, yielding
and paying therefore during the said term the monthly rental of
FOUR THOUSAND FIVE HUNDRED DOLLARS (4,500) Dollars payable in advance
on or before the 10th day of each month.
It is agreed that the Lessee shall have the right and first
option of a renewal of this lease, provided terms thereof can be
satisfactorily negotiated between the parties, upon the Lessee
giving Sixty (60) days notice prior to the expiration of such
INITIAL (_____) year term.
It is further agreed by the Lessee to pay any increase in
property taxes and insurance over the base year of this lease,
upon presentation of the documents by the Lessor
It is further agreed the Lessors shall carry fire insurance
on the premises. The destruction of the premises by fire or
other casualty shall suspend the running of the term of this
lease, and shall terminate it if the parties so agree. At the
option of the Lessee the insurance on the main building shall be
applied to the reconstruction of said building. If the principal
building is damaged, but not destroyed, the rent payable under
the terms of this lease shall cease until the building is
repaired by the Lessors so as to be suitable for use.
It is further agreed the Lessee may make improvements on the
existing building and may erect buildings on the vacant lot
included in this lease, provided that such improvements or
buildings comply with all existing zoning laws, ordinances and
regulations, and so that the existing building shall not be
defaced. All such improvements shall be at the expense of the
Lessee, and such fixtures shall become a part of the realty.
It is further agreed by and between the parties hereto that
should the Lessor choose to use the premises herein leased for
some other purpose, he shall notify the Lessee in writing of his
intention to do so at least six months prior to the expiration of
this lease.
It is further agreed by and between the parties hereto at
the expiration of this lease all rents due must be paid in full
before any goods and chattels are removed from the premises
herein leased.
IN WITNESS WHEREOF, the said parties have hereunto set their
hand and seals in duplicate this 1st day of OCTOBER 1992.
Witnessed by:
__________________________________ UNION WAREHOUSE & REALTY CO.
Lessor
__________________________________ By
Secretary President (Seal)
__________________________________ HUGHES SUPPLY, INC.
__________________________________ By
President (Seal)
STATE OF NORTH CAROLINA
COUNTY OF UNION
This 12 day of November, 1992, personally came before me
J. C. Plyler who, being by me duly sworn, says that he is the
President of UNION WAREHOUSE & TRUCKING CO., and that the seal
affixed to the foregoing instrument in writing is the corporate
seal of the company, and that its authority duly given. And the
said ________________________, acknowledged the said writing to
be the act and deed of said corporation.
____________________________________
Notary Public
My Commission expires:_____________________
STATE OF NORTH CAROLINA
COUNTY OF UNION
This 12 day of November, 1992, personally came before me -
JAMES C. PLYLER, JN, who, being by me duly sworn, says that he
is the President of USCO, INCORPORATED, MONROE, N.C., and that the
seal affixed to the foregoing instrument in writing is the corporate
seal of the company, and that its authority duly given, and the said
________________________, acknowledged that the said writing to be
the act and deed of said corporation.
____________________________________
Notary Public
My Commission expires: _____________________
AMENDMENT TO LEASE AGREEMENT
STATE OF NORTH CAROLINA
COUNTY OF UNION
THIS Amendment to Lease Agreement ("Amendment") is made this
1st day of October, 1992 by and between Union Warehouse & Realty
Company, Monroe, North Carolina, hereinafter referred to as
"Lessor" and USCO, Inc., hereinafter referred to as "Lessee."
W I T N E S S E T H:
WHEREAS, Lessor and Lessee entered into that certain Lease
Agreement (the "Lease Agreement") dated October 1,1992, with
regard to property described as follows:
1515 Morgan Mill Road
Monroe, NC 28110
and;
WHEREAS, Lessor and Lessee desire to further clarify and
amend the terms thereof as set forth more fully herein.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein and the payment by Lessee to Lessor of Ten
Dollars ($10.00), the receipt and sufficiency of which is hereby
acknowledged, the parties agree to amend the Lease Agreement as
follows:
1. The foregoing recitals are true and correct and
incorporated herein by reference.
2. The term "Lessor" shall refer to Union Warehouse &
Realty Company and it's successors and assigns. The term
"Lessee" shall refer to USCO, INC. and it's successors and
assigns.
3. Base rent for the period shall be Four Thousand Five
Hundred Dollars ($4,500) per month. Commencing on the 1st day of
October, 1992 (the "Adjustment Date"), and continuing on the same
day of each year thereafter during the Period, the Base Rent set
forth shall be adjusted in accordance with the following:
(a) The Consumer Price Index - U. S. City Average -
All Urban Consumer ("Index") in effect and published during the
calendar month in which the term of the Lease Agreement commenced
shall be the "Base Period Index."
(b) The Base Period Index shall be compared with the
Index for the same calendar month for the Adjustment Date. If
the Index for the Adjustment Date is higher than the Base Period
Index, then the monthly rent for the next calendar year of the
lease shall be increased by one hundred percent (100%) of the
percentage increase of the Index for the Adjustment Date over the
Base Period Index.
Every year thereafter, the index for the same calendar month
shall be compared with the Index for the immediately preceding
Adjustment Date. If the Index for the same calendar month is
higher than the Index for the immediately preceding Adjustment
Date, then the rent for the next ensuing one (1) year period
shall be increased by one hundred percent (100%) of the
percentage increase of the Index for the same calendar month over
the Index for the immediately preceding Adjustment Date. If the
Index for the same calendar month has not been published, it is
agreed that the Index as issued and published for the latest
preceding month shall be used in determining the Adjustment Rent.
(c) If the Bureau of Labor Statistics discontinues
publication of the Index, publishes the Index less frequently, or
alters the index in a material manner, then the Lessor and Lessee
may adopt a substitute index or procedure which reasonably
reflects and monitors consumer prices as nearly as possible in
the same manner as the Index.
During the Period, Lessee also shall pay the amount of any
annual taxes and insurance costs in excess of the respective
amounts applicable on October 1, 1992.
4. The following provision of the Lease Agreement is
deleted in its entirety:
It is further agreed by and between the parties
hereto that should the Lessor choose to use the
premises herein leased for some other purpose, he
shall notify the Lessee in writing of his intention
to do so at least six months prior to the expiration
of this lease.
5. In consideration of the benefits accruing to Lessor
under this Lease Agreement and Lessee's renewal thereof, and
other good and valuable consideration the receipt and sufficiency
of which is acknowledged by Lessor, Lessor does hereby grant to
Lessee an irrevocable option to purchase the property described
in the Lease Agreement ("Leased Premises") and all fixtures,
equipment and personalty owned by Lessor and located on the
Leased Premises (collectively called the "Leased Premises" in
this Paragraph 5). Lessee may exercise this option by delivering
a signed written notice thereof to Lessor not less than sixty
(60) days prior to the end of the renewal period of this Lease
Agreement. If the option is duly exercised, then this Lease
Agreement shall continue in effect pending closing. Unless
extended pursuant to subparagraph (c) below, for cure of title
objections, closing shall occur on or before February 28, 1995.
If the option is exercised, the purchase and sale shall be
governed and closed pursuant to the following terms:
(a) Purchase Price. The purchase price of the Leased
Premises shall be equal to the fair market value of the Leased
Premises as established by the average of two MAI appraisals, one
of which shall be completed by an appraiser selected by the
Lessee at Lessee's expense and one of which shall be completed by
an appraiser selected by the Lessor at Lessor's expense. Such
appraisals shall be completed at least fifteen (15) days prior to
closing.
(b) Payment. The purchase price, subject to
prorations as hereafter provided, shall be payable by cashier's
check or wire transfer at closing.
(c) Title Insurance. On or before thirty (30) days
prior to closing Lessee shall obtain, at Lessor's expense, a
Title Insurance Commitment ("Commitment") as to the Leased
Premises issued by an insurance company acceptable to Lessee
agreeing to issue to Lessee a marketability owner's policy in the
amount of the purchase price, insuring Lessee's title to the
Leased Premises with all standard exceptions deleted except then
current ad valorem taxes and subject only to those encumbrances
and other title matters acceptable to Lessee ("Permitted
Exceptions"). Within five (5) days after receipt of the
Commitment, Lessee shall provide Lessor with written notice of
any encumbrance or title matter which is unsatisfactory to Lessee
with respect to the Leased Premises. Thereupon, Lessor shall use
its best efforts to cure said objection(s) on or before one
hundred twenty (120) days after Lessor's receipt of Lessee's
notice of objections(s), and closing shall be delayed
accordingly. If Lessor is unable to cure an objection to title,
Lessee shall have the option to proceed with the purchase, with a
corresponding reduction in price, or to terminate the purchase
transaction without liability to Lessor, and without loss or
waiver of Lessee's rights as tenant under the Lease Agreement.
(d) Survey. the property may be surveyed prior to
closing at Lessee's expense by a surveyor selected by Lessee. In
the event the survey reflects any survey matter or defect
unacceptable to Lessee, other than Permitted Exceptions, same
shall be treated as an objection to title and shall be governed
by subparagraph (c), above.
(e) Documents. At closing, Lessor shall deliver to
Lessee: (1) good, sufficient, marketable fee simple title to the
Leased Premises by General Warranty Deed subject only to the
terms of this Lease Agreement and the permitted exceptions; (2)
an Affidavit attesting to the absence of any claim or suit,
outstanding judgement, rights of possession adverse to Lessee's
possession, bankruptcy, assessments, mortgage, financing
statement, or claim of lien pending against Lessor or the Leased
Premises, and as to other matters and in form as reasonably
required by Lessee; (3) a Nonforeign Affidavit attesting that
Lessor is not a "foreign person" within the meaning of Section 1445 of
the Internal Revenue Code of 1954, as amended, in the form as
required by Lessee; (4) bill of sale as to fixtures and
personalty; (5) an Assignment of Lessor's rights as landlord
under this Lease; and (6) such other documents as may be
reasonably requested by Lessee.
(f) Expenses. Lessor shall pay for all recording and
transfer taxes levied on the deed or otherwise payable by virtue
of the purchase and sale transaction, title search fees, and the
title insurance premium. Lessee shall pay for the cost of the
survey, if obtained, and for the MAI appraisal.
(g) Prorations. Real Estate taxes, public assessments
not yet due and payable, rents, security deposits, maintenance,
utility and fuel charges, and all other items normally adjusted
at closing, shall be prorated at closing.
(h) Assignment. This option to purchase may be
assigned freely by Lessee together with, or separately from,
Lessee's rights as tenant under this Lease Agreement.
(i) Memorandum of Option. Lessor agrees to execute a
recordable Memorandum of this option to purchase upon request by
Lessee.
(j) Risk of Loss. Except as otherwise provided in
this Lease Agreement, risk of loss shall pass to Lessee at
closing.
(k) Possession. Free and unencumbered possession of
the Leased Premises shall be delivered to Lessee by Lessor at
closing, subject, however, to the previously existing rights of
Lessee, as tenant, under this Lease Agreement.
6. In the event either party to the Lease Agreement shall
be required to retain an attorney to enforce its rights under any
provision of the Lease Agreement against the other party to the
Lease Agreement, the party who prevails in any dispute with, or
enforcement effort against the other party, shall be entitled to
recover from the other party such prevailing party's reasonable
attorneys' fees and costs incurred in negotiation, at trail and
upon any appeal as the result of such dispute or enforcement
effort.
7. During the term of the Lease Agreement and the renewal
thereof, Lessor shall be responsible for structural maintenance
of the property and Lessee shall be responsible for all other
maintenance items.
8. The parties by execution of this Amendment to Lease
Agreement hereby amend the Lease Agreement as set forth herein,
and in so doing, reaffirm in all respects the term of the Lease
Agreement as so amended.
IN WITNESS WHEREOF, each of the parties hereto has caused
this Amendment to Lease Agreement to be signed in its corporate
name by its officers thereunto duly authorized as of the day and
year first above written.
WITNESSES: LESSOR:
UNION WAREHOUSE & REALTY CO.
_______________________________ By:
It's: President
_______________________________
(Corporate Seal)
LESSEE:
USCO, INCORPORATED
_______________________________ By:
It's: President
_______________________________
(Corporate Seal)
EXHIBIT 10.11(f)
October 18, 1994
Mr. Stewart Hall
President
Hughes Supply, Inc.
P. O. Box 2273
Orlando, Florida 32802
Dear Stewart:
This letter is to confirm our agreement to extend the leases for
all locations currently leased by USCO, Incorporated from either
Union Warehouse & Realty Company or Monoco Realty Company. Below
is a listing of the locations involved and the current monthly
rental.
610 E. Windsor Street Monroe $5,287
1927 S. Tryon Street Charlotte $4,966
602 Rigsbee Avenue Durham $3,279
1234 S. Pleasantburg Drive Greenville $5,219
320 Second Street Cheraw $1,750
300 McCaskill Road Pinehurst $3,004
1515 Morgan Mill Road Monroe $4,500
1840 Shelton Avenue Statesville $4,386
1065 Sunset Boulevard Columbia $4,877
850 East Pine Log Road Aiken $2,582
113-117 Henderson Street Monroe $2,340
It is further understood that even though some of these properties
were not currently under lease at the time that USCO was acquired
by Hughes Supply, Inc., that by means of this agreement all
properties listed above are now covered by the same provisions of
the lease agreement consummated as a part of said purchase
agreement with the following exceptions:
1) Lease term is extended until February 1, 1998;
2) Lease amount will remain constant per the schedule above;
3) Relative to item (a) on page 3 of the lease agreement be
it further refined that the purchase price be established
by taking an average of the two appraisals referenced or
by other means mutually acceptable;
4) Relative to the item (b) on page 3 of the lease agreement
the following should be added, or by other means mutually
agreed upon to include stock of Hughes Supply, Inc.;
5) As a point of clarification, the lessor is responsible
for the maintenance of roofs and exterior walls whereas
the lessee is responsible for interior walls and
mechanical systems. This represents no change from
historical responsibilities.
A sample copy of the original lease and the amendment are attached
for your convenience. Please signify your agreement by signing
below. Thank you for your assistance in resolving this matter.
Sincerely,
UNION WAREHOUSE & REALTY COMPANY MONOCO REALTY COMPANY
J. C. Plyler J. C. Plyler
President Managing Partner
Accepted by:
______________________________
A. S. Hall, Jr.
President
Hughes Supply, Inc.
EXHIBIT 10.11(g)
TABLE OF CONTENTS
ARTICLE
I Parties
II Leased Premises
III Term
IV Rental
V Quiet Possession
VI Taxes and Insurance
VII Utilities
VIII Maintenance
IX Liability Insurance
X Liens
XI Lessee's Default
XII Inspections
XIII Personal Property and Fixtures
XIV Destruction
XV Condemnation
XVI Signs
XVII Assignment and Subletting
XVIII Changes by Lessee
XIX Subordination of Lease
XX Attorneys Fees
XXI Hazardous Waste
XXII Brokers
XXIII Complete Agreement
XXIV Notices
XXV Dispute Resolution
STATE OF NORTH CAROLINA
COUNTY OF UNION
ARTICLE I
PARTIES:
THIS LEASE, made and entered into this the __________ day of
_______________, _______, by and between Union Warehouse & Realty
Company, hereinafter called The Lessor, and Hughes Supply,
Incorporated, hereinafter called The Lessee, whether one or more:
ARTICLE II
LEASED PREMISES:
That subject to the terms and conditions hereinafter set
forth, the Lessor does hereby let and lease unto the Lessee those
certain premises located in the County of Mecklenburg, State of
North Carolina, and more particularly described as follows:
10301 Industrial Drive
Pineville, NC 28134
ARTICLE III
TERM:
TO HAVE AND TO HOLD the above described premises to the Lessee
for a term of ten years, beginning on the first day of February,
1996. At the end of this period the Lessee shall have the option
to renew this lease for an additional five (5) years at the same
base rate plus an inflation increase as calculated by multiplying
the Base Rate by the percentage increase in the Consumer Price
Index ("CPI") during the initial term of this lease.
ARTICLE IV
RENTAL:
The rental to be paid during the term of this lease is Twelve
Thousand Six Hundred Dollars ($12,600.00) Dollars per month "Base
Rate" beginning the first day of February, 1996 and ending January
31, 1999. Rental after this date, and until the expiration date of
the lease on January 31, 2006, shall be increased annually as
calculated by multiplying the base rate by the percentage increase
in the Consumer Price Index (CPI) for the applicable year.
During the term of this lease the Lessee shall make all
payments due under the lease payable to Union Warehouse & Realty
Company at the following address:
P. O. Box 903
Monroe, NC 28111
ARTICLE V
QUIET POSSESSION
The Lessor covenants that it is the lawful owner of the
demised premises and has lawful authority to enter into this
Agreement with Lessee. The Lessor agrees that the Lessee shall
enjoy said premises during said term free from the adverse claims
of any person and enjoy peaceful and quiet possession so long as
Lessee pays the said rent and performs the other terms and
conditions as herein agreed.
The Lessee, at its own expense, shall comply with all rules,
regulations and requirements of the State and City Governments or
of the Government of the United States or of any of the Departments
or Bureaus thereof applicable to the leased or demised premises for
the prevention or abatement of nuisances or other grievances
arising out of the manner of the occupancy of said premises during
said term. Lessee, at its sole expense, will hold Lessor harmless
from all expenses, judgements, damages and assessments, including
legal expenses and attorney's fees, arising out of any claim, suit,
charge, fine or penalty, arising out of Lessee's use or occupancy
of the property let under this Lease.
Lessor represents and warrants to Lessee that as of the date
of this lease the demised premises is not in violation of any law,
regulation or code, including but not limited to building code
violations. Lessee assumes sole responsibility for compliance with
all work-place safety laws, rules, and regulations, including, but
not limited to State and Federal OSHA requirements.
TAXES AND INSURANCE
The Lessor will pay all ad valorem taxes assessed against the
demised premises, and will at its own expense cause the building
and improvements located upon said property to be adequately
insured against fire or other casualty.
The Lessee shall provide for all hazard insurance on its own
contents, furniture, fixtures and equipment located in the leased
premises.
The Lessee shall pay all personal property taxes on property
owned by it and located in the leased premises.
The Lessee shall pay all increases in taxes or insurance
during the term of the lease over the base period.
ARTICLE VII
UTILITIES
During the terms of this lease, the Lessee will pay for all
electricity, heat, water and sewer charges to the extent that such
charges are metered to the demised premises.
ARTICLE VIII
MAINTENANCE
The Lessor agrees, at its expense, to maintain and keep in
good repair the roof, principal structure members and exterior
masonry walls of the building upon the demised premises, and make
any repairs necessitated by defects in the original construction of
the building located upon the demised premises. The Lessee agrees
to make all other repairs, except repairs to the roof and exterior
masonry walls of the building, including repairs to the air
conditioning, plumbing, heating, electrical wiring and appliances,
painting, glass and all equipment located in the building, and to
keep the same in good condition and state of repair. Provided,
however, that the Lessee shall make all repairs which are to be
made by the Lessor under this Article if such repairs are
occasioned by or through the negligence of the Lessee. The Lessee
will keep the grounds of the demised premises in a neat and
presentable condition.
The Lessee further agrees that upon termination of the lease
it will surrender the said premises in as good order and condition
as they were at the beginning of the lease, ordinary wear and tear
excepted; and the Lessee further covenants and agrees that it will
make no unlawful or offensive use of the premises.
ARTICLE IX
LIABILITY INSURANCE
The Lessee further agrees to hold the Lessor harmless from any
loss, cost, damage or expenses arising out of any accident or other
occurrence causing injury to any person or property and due
directly or indirectly to the use or occupancy of said premises by
the Lessee, and the Lessee shall, at its own expense, carry
liability insurance in the amount of One Hundred Thousand Dollars
($100,000.00) for injury to one person, three Hundred Thousand
Dollars ($300,000.00) for injury to more than one person, arising
out of one accident or occurrence and Fifty Thousand Dollars
($50,000.00) for property damage, in a good and responsible
insurance company authorized to do business in the State of North
Carolina which will insure and indemnify the Lessor and Lessee
against such loss or liability for loss, damage, or expenses, and
deliver such policies of insurance, or certificates, therefor to
Lessor. Said policies shall name the Lessor as an insured, as its
interest may appear.
ARTICLE X
LIENS
Lessee shall commit no act which would create a lien on the
Lessor's property. Any lien filed as a result of action by the
Lessee will be promptly discharged and cancelled at the sole
expense of the Lessee.
ARTICLE XI
LESSEE'S DEFAULT
It is expressly agreed that if any monthly installment or rent
is not paid on the due date as herein called for, or within 30 days
after written notice from Lessor, then the Lessor may, after giving
the Lessee thirty (30) days' written notice of such default,
declare this lease terminated and cancelled and may take possession
of said premises without prejudice to any other remedies it may
have.
If there be any other default by the Lessee in the stipulations,
agreements and covenants herein contained, and if the Lessee fails
to comply with any of the provisions of this Agreement and Lease,
the Lessor shall give the Lessee notice of such default, and if the
Lessee shall fail to comply with such stipulations, agreements and
covenants within thirty (30) days after such notice, then it shall
be lawful for the Lessor to re-enter the premises hereby leased,
and all requirements of notice are waived by Lessee, and Lessor
reserves all other legal remedies.
It is expressly agreed that if, at any time during the term of the
lease, the Lessee shall be adjudged bankrupt or insolvent by any
federal or state court of competent jurisdiction, the Lessor may,
at its option, declare this lease terminated and cancelled and take
possession of said premises.
ARTICLE XII
INSPECTIONS
The Lessee agrees that the Lessor, its agents or other
representatives, shall have the right without abatement of rent, to
enter into and upon such premises, or any part thereof, at all
reasonable times for the purpose of examining the same so long as
such inspections do not unreasonably interfere with the conduct of
Lessee's business on the demised premises.
ARTICLE XIII
PERSONAL PROPERTY AND FIXTURES
All personal property placed on the demised premises, or any
part thereof, shall be at the risk of the Lessee or owners of such
personal property, and Lessor shall not be liable for any loss or
damage to said personal property or to the Lessee for any cause
whatsoever not attributable to or caused by defects in the original
construction of the building.
The Lessee shall have the right and privilege upon the
termination of this lease to remove from the demised premises all
trade fixtures installed by it, provided it be not in default
hereunder and in so doing the Lessee shall repair all damage to
said building that may have been caused by the installation or
removal thereof; and it will surrender the demised premises in as
good order and condition as they were at the beginning of the term
hereof, ordinary wear and tear and damage by fire or other casualty
beyond the control of the Lessee excepted; provided, however, that
any partitions or other additions or improvements in said building
at Lessors option shall be and remain the property of the Lessor.
ARTICLE XIV
DESTRUCTION
It is agreed between the parties hereto that if the premises
hereby let shall be destroyed or damaged by fire or other casualty
so as to become substantially untenantable, then if the Lessor
shall by writing, to be delivered to the Lessee within ten days
after such damage or destruction, elect to rebuild or repair said
premises, commencing within fifteen days after such election to
putting the premises in as good condition as they were at the time
of destruction or damage, and, for that purpose may enter said
premises and the rent shall abate during time said premises are
untenantable, but if the Lessor does not elect as aforesaid to
rebuild or repair, and in any event such building or repairs are
not completed within One Hundred Twenty days after the date of such
fire or casualty, then the Lessor shall have possession of said
premises hereby let, and Lessee shall surrender and deliver to the
Lessor such possession and this Lease shall become void, and the
term hereby ended, and upon delivery and surrender being made or
upon recovery of said premises by the Lessor, the obligation to pay
rental shall cease.
It is agreed between the parties hereto that if the premises
hereby let shall be damaged by fire, but not to the extent of
becoming untenantable, then in that case the Lessor shall rebuild
or repair the premises within ninety days time, and the rental
during such time shall be proportionately abated; provided,
however, that the Lessor is able at that time to obtain the
necessary materials, and in the event such materials are not
available within a reasonable time, the Lessee may terminate this
Lease.
ARTICLE XV
CONDEMNATION
If the whole or substantial portion of the demised premises is
taken by any governmental agency or corporation vested with the
right of exercise of eminent domain, whether such taking be
effected by Court action or by settlement with the agency
exercising or threatening to exercise such power and if the
property so taken renders the remainder of said property unfit for
the use thereof by Lessee, then the Lessee shall have the option to
terminate this lease, which option must be exercised within sixty
(60) days of such taking. If the Lessee shall not so elect to
terminate, or if the taking does not interfere with Lessee's use of
the premises to the extent that Lessee does not have an option to
terminate, there shall be a permanent reduction of the annual
rental based upon the nature and extent of the taking.
ARTICLE XVI
SIGNS
The Lessee shall have the right to erect signs relating to its
business activities. The care and maintenance of such signs shall
be the responsibility of the Lessee and shall remain the property
of the Lessee. Signs must comply with all applicable Federal,
State and local codes, ordinances and restrictions.
It is further agreed that the Lessee shall not paint on the
outside walls of the building any signs and that if the Lessee
erects any sign or signs on the building, that it will repair any
damage to the building occasioned by the removal of such signs.
The Lessor or its designated agent shall have the privilege of
installing a "for lease" and/or "for sale" sign on the leased
premises during the last 90 days of the lease term or any extension
thereof and shall have the privilege of showing the leased premises
to prospective lessees or purchasers during such 90 day period.
ARTICLE XVII
ASSIGNMENT AND SUBLETTING
The Lessee shall not assign this lease, or sublet any portion
of the demised premises without the written consent of Lessor,
which consent shall not be unreasonably withheld; and in the event
of such subletting or assignment, the Lessee shall remain bound
under all obligations hereunder.
In the event the Lessor at any time in writing consents to the
assignment of this lease or to the subletting of the whole or any
part of the demised premises, such assignment or sublease shall be
in writing and shall be subject to the following conditions:
(a) That the said assignee or sub-lessee by an instrument in
writing in recordable form shall assume and agree to keep, observe
and perform all of the agreements, conditions, covenants and term
of this lease on the part of the Lessee to be kept, observed and
performed, and shall be, and become jointly and severally liable
with the Lessee for non-performance thereof;
(b) That a duplicate-original of such instrument of assignment or
sublease and assumption shall be delivered to the Lessor as soon as
such assignment or sublease and assumption shall have been executed
and delivered; and
(c) That no further or additional assignment of this lease or
sublease shall be made except upon compliance with the provisions
of this Article.
ARTICLE XVIII
CHANGES BY LESSEE
It is agreed that the Lessee shall make no changes in the
building without the written permission of the Lessor, except as
herein specified.
ARTICLE XIX
SUBORDINATION OF LEASE
This lease, its terms and conditions, and all leasehold
interest and rights hereunder, are expressly made, given and
granted subject and subordinate to the lien of any lending
institution mortgage or deed of trust now or hereinafter imposed
upon all or any part of the demised premises, and Lessee agrees to
execute and deliver to the Lessor, its successors, or assigns or to
any other person or corporation designated by the Lessor, any
instrument or instruments requested by the Lessor consenting to any
such mortgage or trust deed placed upon the premises and
subordinating this lease thereto.
In the event of subordination, all rights of Lessee under this
lease shall be fully preserved and protected as long as Lessee
complies with all the covenants or conditions herein assumed by it.
ARTICLE XX
ATTORNEYS FEES
In case suite be brought for the recovery of any rent due
under the provisions of this Lease, or because of the breach of any
other covenant herein contained, the prevailing party shall be
entitled to recover from the non-prevailing party its reasonable
attorneys fees and costs through all trial levels, appeals and in
bankruptcy.
ARTICLE XXI
HAZARDOUS WASTE
Lessor represents to Lessee that the demised premises is not
contaminated with any hazardous waste or hazardous material as of
the date of this Lease. Lessee agrees not to use the demised
premises to generate, manufacture treat, store or dispose of any
hazardous waste or hazardous substances and not to release any
hazardous materials or hazardous substances onto the demised
premises.
ARTICLE XXII
BROKERS
Lessor and Lessee represent each to the other that neither
Lessee nor Lessor has entered into any agreement or economic
relationship, or incurred any obligation which might result in the
obligation or the other party to pay a brokerage commission,
finders fee or similar fee. Lessor or Lessee, as the case may be,
shall indemnify, defend and hold harmless the other from any
claims, demands or judgements arising by reason of any breach of
the foregoing representation.
ARTICLE XXIII
COMPLETE AGREEMENT
This written lease contains the entire agreement between the
parties, and it shall not be altered or modified except in writing
signed by the parties hereto.
ARTICLE XXIV
NOTICES
All notices required to be given under this lease shall be
forwarded by registered or certified mail as follows:
TO THE LESSOR:
J. C. PLYLER
% UNION WAREHOUSE & REALTY
P. O. BOX 903
MONROE, NC 28111
TO THE LESSEE:
M. K. LEE
10301 INDUSTRIAL DRIVE
PINEVILLE, NC 28134
Such address may be changed from time to time by either party
by serving notice as above provided.
ARTICLE XXV
DISPUTE RESOLUTION
Any dispute arising under this Lease Agreement must be
submitted to mediation before the filing of any suit by either
party. The mediator must be one qualified under the standards
established by the North Carolina Supreme Court or, by agreement of
the parties, a person qualified under any national or state
mediation/arbitration service, who is unbiased and has no present
or past business, professional, or personal association with the
parties or potential witnesses, their agents or employees. Cost of
mediation shall be borne equally by the parties.
After mediation, if the dispute is unresolved, suit must be
filed in the county in which the leased premises are located and
the laws of North Carolina shall apply on all issues.
EXECUTION
IN WITNESS WHEREOF, the parties hereto have caused the due
execution of this instrument by their officers thereunto duly
authorized and their corporate seals hereto affixed, as of the day
and year first above written.
Two Witnesses
_____________________________ USCO, INC. dba HUGHES SUPPLY, INC.
_____________________________ By:_______________________________
Regional Vice President
(CORPORATE SEAL) LESSEE
Attest:____________________________
Secretary
Two Witnesses
_____________________________ UNION WAREHOUSE & REALTY
_____________________________ By:________________________________
President
(CORPORATE SEAL) LESSOR
Attest:____________________________
Secretary
STATE OF __________________________
COUNTY __________________________
This _______ day of ____________________, 19_____, personally
came before me ____________________________________ who, being by
me duly sworn, says that he is the President of
____________________________________________, and that the seal
affixed to the foregoing instrument in writing is the corporate
seal of the company, and that said writing was signed and sealed by
him in behalf of said corporation, by its authority duly given.
And the said ____________________________________ acknowledged the
said writing to be the act and deed of said corporation.
_______________________________________
Notary Public
My Commission Expires:
_________________________________
STATE OF _________________________
COUNTY OF _________________________
I, _______________________________________________, Notary
Public, certify that _____________________________________
personally came before me this day and acknowledged that he is
Secretary of __________________________________, a corporation, and
that by authority duly given and as the act of the corporation, the
foregoing instrument was signed in its name by its President,
sealed with its corporate seal, and attested by himself as its
Secretary.
Witness my hand and official seal, this ____ day of
__________________, 19______.
My Commission Expires:
_______________________ ____________________________________
Notary Public
EXHIBIT 10.12
STATE OF SOUTH CAROLINA
COUNTY OF GREENVILLE
LEASE AGREEMENT
THIS LEASE, made and entered into this ____ day of July, 1994,
to be effective from February 1, 1993, by and between UNION
WAREHOUSE & REALTY COMPANY, a North Carolina corporation (Lessor),
and JOHN V. MOORE, a citizen and resident of Mecklenburg County,
North Carolina (Lessee).
1. Leased Premises. Subject to the terms and conditions
hereinafter set forth, the Lessor does hereby let and lease unto
the Lessee those certain premises located in the County of
Greenville, State of South Carolina, and more particularly
described as 213 N. Pleasantburg Drive, Greenville, South Carolina.
2. Term. The term of this LEASE shall be for a period of
five (5) years, commencing on the first (1st) day of February,
1993.
2.1 No holding over after the regular termination of
this LEASE shall be termed a renewal thereof, but
shall be a tenancy at will, and such occupancy
shall be subject to the same conditions and
covenants (except for term) as herein set forth.
3. Rental. Effective February 1, 1993, the base rental to be
paid is the sum of THREE THOUSAND FIVE HUNDRED AND NO/100 DOLLARS
per month for the period beginning February 1, 1993, and ending
January 31, 1998.
3.1 In the event that the period of this LEASE shall
begin on a day other than the first of the month,
then a pro-rata portion of the monthly rental shall
be paid upon occupancy and the first year period of
this LEASE shall begin on the first of the month
following such occupancy.
3.2 During the term of this LEASE the Lessee shall make
all payments due hereunder payable to Lessor at
115 Henderson Street
P. O. Box 1160
Monroe, North Carolina 28110
or at such other address as Lessor may designate
from time in writing to Lessee.
4. Renewal Option. The Lessor hereby grants to the Lessee
the option to renew or extend this LEASE for three (3) additional
terms of five (5) years, beginning at the expiration of each
successive term. Provided, however, that if the Lessee desires to
exercise this option, it shall give to the Lessor written notice of
such intention on or before ninety (90) days before the expiration
of the term of this LEASE, or any renewal thereof. All of the
terms and provisions of this LEASE shall apply to the renewal
terms, except that at the beginning of each renewal period the
rental shall be increased by the same percentage as the Cost of
Living Index has increased from the Index as of the date of the
beginning of occupancy by the Lessee. The Cost of Living Index
shall be measured by the Consumer Price Index--U. S. City Average
(1967=100) of the Bureau of Labor Statistics of the U. S.
Department of Labor, if such index shall be in use, and if not,
then by the index generally acceptable as being comparable thereto.
Provided, however, the rental for the first five year renewal term
shall not exceed $4,000.00 per month.
5. Quiet Possession. The Lessor covenants that he is the
lawful owner of the demised premises and has lawful authority to
enter into this AGREEMENT with Lessee. The Lessor agrees that the
Lessee shall enjoy said premises during said term free from the
adverse claims of any person and enjoy peaceful and quiet posses-
sion so long as Lessee pays the said rent and performs the other
terms and conditions as herein agreed.
5.1 The Lessee, at its own expense, shall comply with
all rules, regulations and requirements of the
State and City Governments or of the Government of
the United States or of any of the Departments or
Bureaus thereof applicable to the leased or demised
premises for the prevention or abatement of nuisan-
ces or other grievances arising out of the manner
of the occupancy of said premises during said term.
6. Taxes and Insurance. The Lessor shall pay all ad valorem
taxes assessed against the demised premises, and will, at its own
expense, cause the building and improvements located upon said
property to be adequately insured against fire or other casualty.
The Lessee will pay all extended coverage insurance premiums.
6.1 If the building becomes uninsurable because of
Lessee's occupancy and use of the premises, the
Lessee shall immediately deposit with Lessor cash
or other suitable security in an amount sufficient
to protect Lessor's interests; otherwise, Lessor
shall have the right to immediately terminate this
LEASE and take possession of the premises, giving
three days' written notice to Lessee of his
intention to do so.
6.2 The Lessee shall provide for all hazard insurance
on its own contents, furniture, fixtures and
equipment located in the leased premises.
6.3 The Lessee shall pay all personal property taxes on
property owned by it and located in the leased
premises.
7. Utilities. During the term of this LEASE, the Lessee will
pay for all electricity, heat, water and sewer charges, to the
extent that such charges are metered to the demised premises.
8. Maintenance. The Lessor agrees, at his expense, to main-
tain and keep in good repair the roof, principal structural mem-
bers, and exterior walls of the building upon the demised premises,
and to make any repairs necessitated by defects in the original
construction of the building located upon the demised premises. The
Lessee agrees to make all other repairs, except repairs to the roof
and exterior walls of the building, including repairs to the air
conditioning, plumbing, heating, electrical wiring systems, and
appliances, painting, glass and all equipment located in the build-
ing, and to keep the same in good condition and state of repair.
Provided, however, that the Lessee shall make all repairs which are
to be made by the Lessor under this Paragraph if such repairs are
occasioned by or through the negligence of the Lessee. The Lessee
will keep the grounds of the demised premises in a neat and
presentable condition.
8.1 The Lessee further agrees that, upon termination of
the LEASE, it will surrender the said premises in
as good order and condition as they were at the
beginning of the LEASE, ordinary wear and tear
excepted; and the Lessee further covenants and
agrees that it will make no unlawful or offensive
use of the premises.
9. Liability Insurance. The Lessee further agrees to hold
the Lessor harmless from any loss, cost, damage or expense arising
out of any accident or other occurrence causing injury to any
person or property and due directly or indirectly to the use or
occupancy of said premises by the Lessee, and the Lessee shall, at
its own expense, carry liability insurance in the minimum amount of
ONE HUNDRED THOUSAND ($100,000.00) DOLLARS for injury to one
person, THREE HUNDRED THOUSAND ($300,000.00) DOLLARS for injury to
more than one person arising out of one accident or occurrence, and
FIFTY THOUSAND ($50,000.00) DOLLARS for property damage, with a
good and responsible insurance company authorized to do business in
the State of North Carolina, which will insure and indemnify the
Lessor and Lessee against such loss or liability for loss, damage,
or expense, and shall deliver such policy(ies) of insurance, or
certificates therefor, to Lessor. Said policy(ies) shall name the
Lessor as an insured, as his interest may appear.
10. Liens. The Lessee agrees to pay and save harmless the
Lessor from any and all liens which might be placed against the
premises by persons making repairs or improvements not expressly
contracted for by Lessor.
11. Lessee's Default. It is expressly agreed that if any
monthly installment of rent is not paid on the due date as herein
called for, then the Lessor may, after giving the Lessee ten (10)
days' written notice of such default, declare this LEASE terminated
and cancelled and may take possession of said premises without
prejudice to any other remedies he may have.
11.1 If there be any other default by the Lessee in the
stipulations, agreements and covenants herein con-
tained, and if the Lessee fails to comply with any
of the provisions of this LEASE AGREEMENT, the
Lessor shall give the Lessee notice of such
default, and if the Lessee shall fail to comply
with such stipulations, agreements and covenants
within twenty (20) days after such notice, then it
shall be lawful for the Lessor to re-enter the
premises hereby leased, and all requirements of
notice are waived by Lessee, and Lessor reserves
all other legal remedies.
11.2 It is expressly agreed that if, at any time during
the term of this LEASE, the Lessee shall be
adjudged bankrupt or insolvent by any federal or
state court of competent jurisdiction, the Lessor
may, at his option, declare this LEASE terminated
and cancelled and take possession of said premises.
12. Inspections. The Lessee agrees that the Lessor, his
agents or other representatives, shall have the right, without
abatement of rent, to enter into and upon such premises, or any
part thereof, at all reasonable times for the purpose of examining
the same.
13. Personal Property and Fixtures. All personal property
placed on the demised premises, or any part thereof, shall be at
the risk of the Lessee or owners of such personal property, and
Lessor shall not be liable for any loss or damage to said personal
property or to the Lessee for any cause whatsoever not attributable
to or caused by defects in the original construction of the build-
ing.
13.1 The Lessee shall have the right and privilege upon
the termination of this LEASE to remove from the
demised premises all trade fixtures installed by
it, provided it be not in default hereunder; and in
so doing, the Lessee shall repair all damage to
said building that may have been caused by the
installation or removal thereof; and it will
surrender the demised premises in as good order and
condition as they were at the beginning of the term
hereof, ordinary wear and tear, and damage by fire
or other casualty beyond the control of the Lessee,
excepted. Provided, that any partitions or other
additions or improvements in said building, at
Lessor's option, shall be and remain the property
of Lessor.
14. Destruction. It is agreed between the parties hereto that
if the premises hereby let shall be destroyed or damaged by fire or
other casualty so as to become substantially untenantable, and if
the Lessor shall, by writing to be delivered to the Lessee within
ten (10) days after such damage or destruction, elect to rebuild or
repair said premises, commencing within fifteen (15) days after
such election to put the premises in as good condition as they were
at the time of destruction or damage, Lessor, for that purpose, may
enter said premises, and the rent shall abate during the time said
premises are untenantable; but if the Lessor does not elect, as
aforesaid, to rebuild or repair and, in any event, such rebuilding
or repairs are not completed within 120 days after the date of such
fire or casualty, then the Lessor shall have possession of said
premises hereby let, and Lessee shall surrender and deliver to the
Lessor such possession, and this LEASE shall become void, and the
term hereby ended, and upon delivery and surrender being made or
upon recovery of said premises by the Lessor, the obligation to pay
rental shall cease.
14.1 It is agreed between the parties hereto that
if the premises hereby let shall be damaged by
fire, but not to the extent of becoming
untenantable then, in that case, the Lessor
shall rebuild or repair the premises within
ninety days' time, and the rental during such
time shall be proportionately abated;
provided, however, that the Lessor is able at
that time to obtain the necessary materials,
and in the event such materials are not
available within a reasonable time, the Lessee
may terminate this LEASE.
15. Condemnation. If the whole or a substantial portion of
the demised premises is taken by any governmental agency or cor-
poration vested with the right of exercise of eminent domain,
whether such taking be effected by Court action or by settlement
with the agency exercising or threatening to exercise such power,
and if the property so taken renders the remainder of said property
unfit for the use thereof by Lessee, then the Lessee shall have the
option to terminate this LEASE, which option must be exercised
within sixty (60) days of such taking. If the Lessee shall not so
elect to terminate, or if the taking does not interfere with
Lessee's use of the premises to the extent that Lessee does not
have an option to terminate, there shall be a permanent reduction
of the annual rental based upon the nature and extent of the
taking.
16. Signs. The Lessee shall have the right to erect reason-
able and normal signs relating to its business activities. The
care and maintenance of such signs shall be the responsibility of
the Lessee and shall remain the property of the Lessee.
16.1 It is further agreed that the Lessee shall not
paint on the outside walls of the building any
signs and that if the Lessee erects any sign or
signs on the building, that it will repair any
damage to the building occasioned by the removal of
such signs.
16.2 The Lessor or its designated agent shall have the
privilege of installing a "for lease" and/or "for
sale" sign on the leased premises during the last
90 days of the LEASE term or any extension thereof
and shall have the privilege of showing the leased
premises to prospective lessees or purchasers
during such 90-day period.
17. Assignment and Subletting. The Lessee shall not assign
this LEASE, or sublet any portion of the demised premises without
the written consent of Lessor, which consent shall not be
unreasonably withheld; and in the event of such subletting or
assignment, the Lessee shall remain bound under all obligations
hereunder.
17.1 In the event the Lessor at any time in writing
consents to the assignment of this LEASE or to the
subletting of the whole or any part of the demised
premises, such assignment or sublease shall be in
writing and shall be subject to the following
conditions:
17.1(a) That the said assignee or sub-lessee by
an instrument in writing in recordable
form shall assume and agree to keep,
observe, and perform all of the
agreements, conditions, covenants, and
term of this LEASE on the part of the
Lessee to be kept, observed, and
performed, and shall be and become
jointly and severally liable with the
Lessee for non-performance thereof;
17.1(b) That a duplicate-original of such instru-
ment of assignment or sublease and
assumption shall be delivered to the
Lessor as; soon as such assignment or
subleases and assumption shall have been
executed and delivered; and
17.1(c) That no further or additional assignment
of this Lease or sub-lease shall be made
except upon compliance with the
provisions of this Section 17.
18. Changes by Lessee. It is agreed that the Lessee shall
make no changes in the building without the written permission of
the Lessor, except as herein specified.
19. Subordination of LEASE. This LEASE, its terms and
conditions, and all leasehold interests and rights hereunder, are
expressly made, given and granted subject and subordinate to the
lien of any lending institution mortgage or deed of trust now or
hereafter imposed upon all or any part of the demised premises, and
Lessee agrees to execute and deliver to the Lessor, his successors,
or assigns or to any other person or corporation designated by the
Lessor, any instrument or instruments requested by the Lessor con-
senting to any such mortgage or trust deed placed upon the premises
and subordinating this LEASE thereto.
19.1 In the event of subordination, all rights of Lessee
under this LEASE shall be fully preserved and
protected as long as Lessee complies with all the
covenants or conditions herein assumed by it.
20. Late Charges. Any rental due Lessor under this LEASE
shall be considered past due for purposes hereof on the tenth
(1Oth) day of any month, and shall incur a penalty of four percent
(4%) of the monthly rental per month for that and each subsequent
month past due. Any other amounts payable to Lessor under this
LEASE, with the exception of rent, shall be considered past due
thirty (30) days from Lessor's billing date and shall incur a
monthly late charge of one and one-half percent (1.5%) for that and
each subsequent month past due.
21. Notices. All notices required to be given under this
LEASE shall be forwarded by registered or certified mail as
follows:
TO THE LESSOR: TO THE LESSEE:
UNION WAREHOUSE & REALTY CO. MOORE ELECTRIC SUPPLY, INC.
115 Henderson Street 118 Winona Street
Monroe, NC 28110 Charlotte, NC 28203
21.1 Such address may be changed from time to time by
either party by serving notice as above provided.
22. Waiver of Subrogation of Insurance. To the extent of the
Lessee's insurance coverage, Lessee hereby releases Lessor, and all
agents, servants, employees, and licensees of Lessor from any and
all liability for any loss or damage caused by fire or any of the
extended coverage casualties, even if such fire or other casualty
shall be brought about by the fault or negligence of Lessor or
other person or persons claiming the benefit of such release;
provided, however, this release shall be in force and effect only
with respect to loss or damage occurring during such time as
Lessee's policies of fire and extended coverage insurance shall
contain a clause to the effect that this release shall not
invalidate said policies or the right of Lessor to recover there-
under. Lessee agrees that its fire and extended coverage insurance
policies will include such a clause so long as the same is
obtainable. If extra cost is chargeable therefor, Lessee shall pay
the same. Lessee shall give Lessor prompt written notice of the
unobtainability of such clause.
22.1 To the extent of Lessee's insurance coverage on
Lessee's tangible personal property on the demised
premises, Lessee hereby releases Lessor and all his
agents, servants, and employees, from any and all
liability for any loss or damage caused to said
tangible personal property by fire, or any of the
extended coverage casualties, even if such fire or
other casualty shall be brought about by the fault
or negligence of Lessor or his agents, servants and
employees; provided, however, this release shall be
in force and effect only with respect to loss or
damage occurring during such times as Lessee's
policies of fire and extended coverage insurance
shall contain a clause to the effect that this
release shall not invalidate said policies or the
right of Lessee to recover thereunder. Lessee
agrees that its fire and extended coverage
insurance policies will include such a clause so
long as the same is obtainable. If extra cost is
chargeable therefor, Lessee shall pay the same.
Lessee shall give Lessor prompt written notice of
the unobtainability of such clause.
23. Rights of Payment Upon Default. The Lessee agrees that if
it shall, at any time, fail to pay any taxes and to provide and pay
for any insurance required of it under the terms of this LEASE,
then Lessor may, at his option, without liability, pay such taxes
or provide and pay for such insurance and charge the actual cost
thereof to Lessee as additional rental to be due on the next rental
due date.
23.1 Lessor further agrees that Lessee shall also have
the right, at its option, without liability of
forfeiture, to pay, when due or within the grace
period permitted, any installment of mortgage
indebtedness upon the demised premises when the
payment thereof shall be necessary to preserve
Lessee's leasehold interest hereunder, and to
deduct the payment thereof from the rent thereafter
falling due hereunder.
23.2 Lessee agrees to pay as rent, in addition to the
rental herein provided, any and all sums which may
become due by reason of the failure of Lessee to
comply with all the covenants of this LEASE and any
and all damages, costs and expenses which the
Lessor may suffer or incur by reason of any default
of the Lessee, or failure on its part to comply
with the covenants of this LEASE, and any and all
damages, costs, and expenses which the Lessor may
suffer or incur by reason of any default of the
Lessee, or failure on its part to comply with the
covenants of this LEASE and each of them, and also
any and all damages to the demised premises caused
by any act or neglect of the Lessee. Upon
notification from any first Mortgagee on the
aforementioned demised property, the Lessee hereby
agrees to give said Mortgagee thirty (30) days'
notice in writing of any defaults under this LEASE
in order that said Mortgagee may have the right to
cure said defaults at its sole option.
24. Complete Agreement. This written LEASE contains the
entire agreement between the parties, and it shall not be altered
or modified except in writing signed by the parties hereto.
LESSOR:
UNION WAREHOUSE & REALTY CO.
Attest By:
President
Secretary
(Corporate Seal) LESSEE:
JOHN V. MOORE
STATE OF NORTH CAROLINA
COUNTY OF MECKLENBURG
I, the undersigned Notary Public in and for the County and
State aforesaid, certify that __________________________ personally
came before me this day and acknowledged that he is Secretary of
UNION WAREHOUSE & REALTY CO., a Corporation, and that, by authority
of its Board of Directors duly given and as the act of the
corporation, the foregoing LEASE was signed in its name by its
President and sealed with its corporate seal and attested by him as
its Secretary.
Witness my hand and notarial seal, this ___ day of
_____________, 1994.
Notary Public
My Commission Expires:
STATE OF NORTH CAROLINA
COUNTY OF MECKLENBURG
I, the undersigned, a Notary Public in and for said County and
State, do hereby certify that JOHN V. MOORE personally appeared
before me this day and acknowledged the due execution of the
foregoing instrument for the purposes therein expressed.
WITNESS, my hand and notarial seal, this ___ day of
_________________, 1994.
Notary Public
My Commission Expires:
F:\CORP\032\HUGHES\USED\LEASE.11
Exhibit 11.1
HUGHES SUPPLY, INC.
SUMMARY SCHEDULE OF EARNINGS PER SHARE CALCULATIONS
(in thousands, except per share amounts)
Potentially dilutive securities:
a) Options for common stock, issued under stock option plan.
b) 7% Convertible subordinated debentures, due May 1, 2011.
<TABLE>
<CAPTION>
Fiscal Year Ended
<S> <C> <C> <C>
1/26/96 1/27/95 1/28/94
Line
- ----
SHARES
------
1 Average shares outstanding 6,725 6,117 5,047
2 Incremental shares (options) -
Assuming options outstanding at end of period
were exercised at beginning of period (or time
of issuance, if later) and proceeds were used
to purchase shares at average market price
during the period 130 142 96
------- ------- -------
3 Shares used in calculating Earnings Per
Common and Common Equivalent Share 6,855 6,259 5,143
4 Incremental shares (options) -
Assuming options outstanding at end of period
were exercised at beginning of period (or time
of issuance, if later) and proceeds were used
to purchase shares at the higher of the
average market price during the period or the
market price at the end of the period; and
that options exercised during the period were
exercised at the beginning of the period (or
time of issuance, if later) and the proceeds
were used to purchase shares at the market
price at the date of exercise 80 4 85
5 Incremental shares (debentures) -
Assuming debentures were converted at
beginning of period (or time of issuance, if
later) at most advantageous (for security
holder) conversion rate that becomes
effective within 10 years 0 180 1,085
------- ------- -------
6 Shares used in calculating Earnings Per
Common Share - Assuming Full Dilution 6,935 6,443 6,313
======= ======= =======
</TABLE>
HUGHES SUPPLY, INC.
<TABLE>
Fiscal Year Ended
<S> <C> <C> <C>
1/26/96 1/27/95 1/28/94
Line
- ----
EARNINGS
--------
7 Net income per financial statements, used in
calculating Earnings Per Common Share and
Earnings Per Common and Common Equivalent
Share $ 16,050 $ 11,485 $ 6,524
8 Incremental earnings (debentures) -
Assuming interest charges applicable to
convertible debentures (and nondiscretionary
adjustments that would have been made based
on net income) are taken into account in
determining balance of income applicable to
common stock 0 166 996
----------- ----------- -----------
9 Earnings used in calculating Earnings Per
Common Share - Assuming Full Dilution $ 16,050 $ 11,651 $ 7,520
=========== =========== ===========
RESULTING PER SHARE DATA
------------------------
10 Earnings per common share (Line 7/Line 1) $ 2.39 $ 1.88 $ 1.29
=========== ========== ===========
11 Earnings per common share and common
equivalent share (Line 7/Line 3) $ 2.34 $ 1.83 $ 1.27
=========== ========== ===========
12 Dilution 2.1% 2.7% 1.6%
=========== ========== ===========
13 Earnings per common share - assuming full
dilution (Line 9/Line 6) $ 2.31 $ 1.81 $ 1.19
=========== ========== ===========
14 Dilution 3.3% 3.7% 9.8%
=========== ========== ===========
15 Used in statements of income:
[ ] Line 10, if dilution less than 3%, or antidilution, exists for all
periods.
[ X ] Lines 11 and 13, if dilution >= 3% for any period.
</TABLE>
HUGHES SUPPLY, INC. ANNUAL REPORT
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Fiscal Years Ended
-----------------------------------------
JANUARY 26, January 27, January 28,
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Net Sales ......................................... $ 1,082,179 $ 875,459 $ 734,958
Cost of Sales ..................................... 858,573 699,132 590,466
----------- ----------- -----------
Gross Profit ...................................... 223,606 176,327 144,492
----------- ----------- -----------
Operating Expenses:
Selling, general and administrative ............. 181,284 144,256 121,645
Depreciation and amortization ................... 10,585 9,056 7,800
Provision for doubtful accounts ................. 1,849 1,381 1,938
----------- ----------- -----------
Total operating expenses ...................... 193,718 154,693 131,383
----------- ----------- -----------
Operating Income .................................. 29,888 21,634 13,109
----------- ----------- -----------
Non-Operating Income and (Expenses):
Interest and other income ....................... 4,605 2,848 2,981
Interest expense ................................ (7,484) (5,284) (5,055)
----------- ----------- -----------
(2,879) (2,436) (2,074)
----------- ----------- -----------
Income Before Income Taxes ........................ 27,009 19,198 11,035
Income Taxes ...................................... 10,959 7,713 4,511
----------- ----------- -----------
Net Income ........................................ $ 16,050 $ 11,485 $ 6,524
=========== =========== ===========
Earnings Per Share:
Primary ......................................... $ 2.34 $ 1.83 $ 1.27
=========== =========== ===========
Fully diluted ................................... $ 2.31 $ 1.81 $ 1.19
=========== =========== ===========
Average Shares Outstanding:
Primary ......................................... 6,856 6,259 5,143
=========== =========== ===========
Fully diluted ................................... 6,935 6,443 6,313
=========== =========== ===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.
12
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
JANUARY 26, January 27,
1996 1995
----------- -----------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents ................................................... $ 3,432 $ 3,485
Accounts receivable, less allowance for
losses of $4,671 and $5,042 ............................................... 143,354 131,907
Inventories ................................................................. 132,524 125,159
Deferred income taxes ....................................................... 10,397 8,921
Other current assets ........................................................ 7,778 6,551
--------- ---------
Total current assets ...................................................... 297,485 276,023
Property and Equipment, Net ................................................. 57,697 54,618
Deferred Income Taxes ....................................................... 2,430 2,095
Other Assets ................................................................ 21,484 13,380
--------- ---------
$ 379,096 $ 346,116
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt ........................................... $ 2,551 $ 1,393
Accounts payable ............................................................ 84,875 78,275
Accrued compensation and benefits ........................................... 12,622 9,823
Other current liabilities ................................................... 16,925 13,738
--------- ---------
Total current liabilities ................................................. 116,973 103,229
Long-Term Debt ................................................................ 106,215 105,243
Other Noncurrent Liabilities .................................................. 1,765 1,540
--------- ---------
Total liabilities ......................................................... 224,953 210,012
--------- ---------
Commitments and Contingencies (Note 7)
Shareholders' Equity:
Preferred stock, no par value; 10,000,000
shares authorized; none issued; preferences,
limitations and relative rights to be
established by the Board of Directors ..................................... - -
Common stock, par value $1 per share; 20,000,000 shares
authorized; 6,798,462 and 6,613,757 shares issued ......................... 6,798 6,614
Capital in excess of par value .............................................. 40,553 37,653
Retained earnings ........................................................... 106,792 93,525
--------- ---------
154,143 137,792
Less treasury stock, no shares and 108,988 shares, at cost .................. - (1,688)
--------- ---------
Total shareholders' equity ................................................ 154,143 136,104
--------- ---------
$ 379,096 $ 346,116
========= =========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.
13
<PAGE>
HUGHES SUPPLY, INC. ANNUAL REPORT
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
Common Stock Capital in Treasury Stock
------------------- Excess of Retained -------------------
Shares Amount Par Value Earnings Shares Amount
--------- ------ ---------- -------- -------- ------
<S> <C> <C> <C> <C> <C> <C>
Balance, January 29, 1993,
as previously reported ...................... 5,453,249 $5,453 $22,410 $ 72,761 901,055 $(13,958)
Adjustment for poolings of interests ....... 439,057 439 (276) 3,251 - -
--------- ------ ------- -------- -------- --------
Balance, January 29, 1993, as restated ....... 5,892,306 5,892 22,134 76,012 901,055 (13,958)
Net income ................................. - - - 6,524 - -
Cash dividends -
$.16 per share ............................ - - - (724) - -
Pooled company ............................ - - - (13) - -
Issuance of treasury shares
for EDI merger ............................ (374,998) (375) (5,434) - (374,998) 5,809
Other acquisition .......................... - - (1,557) 2,158 (101,368) 1,570
Treasury shares issued
under stock option plans .................. - - - (18) (6,123) 95
Purchase and retirement
of common shares .......................... (2,581) (2) (9) (38) - -
--------- ------ ------- -------- -------- --------
Balance, January 28, 1994 .................... 5,514,727 5,515 15,134 83,901 418,566 (6,484)
Net income ................................. - - - 11,485 - -
Cash dividends -
$.22 per share ............................ - - - (1,290) - -
Pooled company ............................ - - - (27) - -
Treasury shares contributed
to employee benefit plan .................. - - 243 - (16,597) 257
Conversion of subordinated
convertible debentures into
common stock .............................. 1,081,146 1,081 21,670 - - -
Stock dividend by pooled company ........... 26,101 26 207 (233) - -
Treasury shares issued
under stock option plans .................. - - - (141) (44,341) 687
Purchase and retirement
of common shares .......................... (8,217) (8) (35) (170) - -
Other acquisitions ......................... - - 434 - (248,640) 3,852
--------- ------ ------- -------- -------- --------
Balance, January 27, 1995 .................... 6,613,757 6,614 37,653 93,525 108,988 (1,688)
Net income ................................. - - - 16,050 - -
Cash dividends -
$.30 per share ............................ - - - (1,971) - -
Pooled company ............................ - - - (15) - -
Stock dividend by pooled company ........... 28,710 29 260 (289) - -
Shares issued under stock option plans ..... 6,657 6 74 (154) (86,984) 1,347
Purchase and retirement of
common shares ............................. (19,642) (20) (146) (354) - -
Other acquisitions ......................... 168,980 169 2,712 - (22,004) 341
--------- ------ ------- -------- -------- --------
BALANCE, JANUARY 26, 1996 .................... 6,798,462 $6,798 $40,553 $106,792 - $ -
========= ====== ======= ======== ======== ========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.
14
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
Fiscal Years Ended
-----------------------------------------
JANUARY 26, January 27, January 28,
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Increase (Decrease) in Cash and Cash Equivalents:
Cash flows from operating activities:
Cash received from customers ................................ $ 1,073,951 $ 861,732 $ 718,603
Cash paid to suppliers and employees ........................ (1,034,589) (846,357) (712,125)
Interest received ........................................... 3,454 2,323 2,001
Interest paid ............................................... (7,273) (4,825) (5,134)
Income taxes paid ........................................... (15,230) (9,181) (5,544)
----------- ----------- -----------
Net cash provided by (used in) operating activities ....... 20,313 3,692 (2,199)
----------- ----------- -----------
Cash flows from investing activities:
Capital expenditures ........................................ (11,853) (11,915) (8,885)
Proceeds from sale of property and equipment ................ 1,228 743 709
Business acquisitions, net of cash .......................... (10,009) (11,099) (3,934)
----------- ----------- -----------
Net cash used in investing activities ..................... (20,634) (22,271) (12,110)
----------- ----------- -----------
Cash flows from financing activities:
Net borrowings under short-term
debt arrangements ......................................... 6,245 23,832 16,733
Proceeds from issuance of long-term debt .................... _ _ 580
Principal payments on:
Long-term notes ........................................... (4,150) (1,266) (2,918)
Capital lease obligations ................................. (844) (725) (660)
Proceeds from issuance of common shares
under stock option plans .................................. 1,273 546 77
Purchase of common shares ................................... (520) (213) (49)
Dividends paid .............................................. (1,736) (1,188) (629)
----------- ----------- -----------
Net cash provided by financing activities ................. 268 20,986 13,134
----------- ----------- -----------
Net Increase (Decrease) in Cash and Cash Equivalents ............ (53) 2,407 (1,175)
Cash and Cash Equivalents, beginning of year .................... 3,485 1,078 2,253
----------- ----------- -----------
Cash and Cash Equivalents, end of year .......................... $ 3,432 $ 3,485 $ 1,078
=========== =========== ===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED FINANCIAL
STATEMENTS.
15
<PAGE>
HUGHES SUPPLY, INC. ANNUAL REPORT
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
NOTE 1 - DESCRIPTION OF BUSINESS AND SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
INDUSTRY
Hughes Supply, Inc. and its subsidiaries (the "Company") are engaged in the
wholesale distribution of a broad range of materials, equipment and supplies
primarily to the construction industry. Major product lines distributed by the
Company include electrical, plumbing and electric utility equipment, building
materials, pool equipment and supplies, water and sewer products, heating and
air conditioning equipment and supplies, water systems and industrial pipe,
valves and fittings. The Company's principal customers are electrical, plumbing
and mechanical contractors, electric utility companies, municipal and industrial
accounts.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the Company and its wholly-owned
subsidiaries. All significant intercompany transactions and accounts have been
eliminated. Prior period financial statements have been restated to include the
accounts of companies acquired and accounted for as poolings of interests.
Results of operations of companies purchased and immaterial poolings are
included from dates of acquisition. The Company's minority investment in
affiliate is accounted for by the equity method.
FISCAL YEAR
The Company's fiscal year ends on the last Friday in January. Fiscal years 1996,
1995 and 1994 each contained 52 weeks.
CASH EQUIVALENTS
The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents.
INVENTORIES
Inventories are carried at the lower of cost or market. The cost of
substantially all inventories is determined by the average cost method.
PROPERTY AND EQUIPMENT
Buildings and equipment are depreciated using both straight-line and
declining-balance methods based on the following estimated useful lives:
Buildings and improvements 5-40 years
Transportation equipment 2-7 years
Furniture, fixtures and equipment 3-10 years
Property under capital leases 20-40 years
Maintenance and repairs are charged to expense as incurred and major renewals
and betterments are capitalized. Gains or losses are credited or charged to
earnings upon disposition.
OTHER ASSETS
The excess of cost over the fair value of net assets of purchased companies
($16,637 and $8,806 at January 26, 1996 and January 27, 1995, respectively, net
of accumulated amortization) is being amortized by the straight-line method over
15 to 25 years.
IMPAIRMENT OF LONG-LIVED ASSETS
In the event that facts and circumstances indicate that the excess of cost over
the fair value of net assets of purchased companies or other assets may be
impaired, an evaluation of recoverability would be performed. If an evaluation
is required, the estimated future undiscounted cash flows associated with the
asset would be compared to the asset's carrying amount to determine if a
write-down to market value or discounted cash flow is required.
REVENUE RECOGNITION
The Company recognizes revenue from product sales when goods are received by
customers.
INCOME TAXES
Income taxes are provided for the tax effects of transactions reported in the
financial statements and consist of taxes currently due plus deferred taxes
resulting from temporary differences. Such temporary differences result from
differences in the carrying value of assets and liabilities for tax and
financial reporting purposes. The deferred tax assets and liabilities represent
the future tax consequences of those differences, which will either be taxable
or deductible when the assets and liabilities are recovered or settled. Deferred
taxes are also recognized for operating losses that are available to offset
future taxable income.
EARNINGS PER COMMON SHARE
Primary earnings per share are based on the weighted average number of shares
outstanding during each year plus the common stock equivalents issuable upon the
exercise of stock options. Fully diluted earnings per share assumes the
conversion of 7% convertible subordinated debentures (after elimination of
related interest expense, net of income tax effect) and exercise of stock
options.
DEFERRED EMPLOYEE BENEFITS
The present value of amounts estimated to be payable under unfunded supplemental
retirement agreements with certain officers is being accrued over the remaining
years of active employment of the officers and is included in other noncurrent
liabilities.
16
<PAGE>
ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles necessarily requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
NOTE 2 - BUSINESS COMBINATIONS
On August 1, 1995, the Company acquired all the common stock of Moore Electric
Supply, Inc. ("Moore") in exchange for 316,000 shares of the Company's common
stock. Moore is a wholesale distributor of electrical products with five outlets
in North Carolina and South Carolina.
On December 18, 1995, the Company acquired all the common stock of Florida Pipe
& Supply Company ("FPS") in exchange for 178,000 shares of the Company's common
stock. FPS is a wholesale distributor of industrial pipe, valves and fittings
with one outlet in Florida.
The above transactions have been accounted for as poolings of interests and,
accordingly, the consolidated financial statements for the periods presented
have been restated to include the accounts of Moore and FPS. Moore's and FPS's
fiscal year ends have been changed to the last Friday in January to conform to
the Company's fiscal year end.
Net sales and net income of the separate companies for the periods preceding the
acquisitions were as follows:
Net Net
Sales Income
-------------------
Six months ended July 31, 1995
(unaudited):
Hughes, as previously reported ............. $494,239 $ 6,681
Moore ...................................... 32,297 1,023
-------- --------
Combined ................................... $526,536 $ 7,704
======== ========
Nine months ended October 31, 1995
(unaudited):
Hughes, as previously reported ............. $805,575 $ 11,732
FPS ........................................ 14,762 520
-------- --------
Combined ................................... $820,337 $ 12,252
======== ========
Fiscal year ended January 27, 1995:
Hughes, as previously reported ............. $802,445 $ 10,328
Moore ...................................... 54,115 423
FPS ........................................ 18,899 734
-------- --------
Combined ................................... $875,459 $ 11,485
======== ========
Fiscal year ended January 28, 1994:
Hughes, as previously reported ............. $660,938 $ 6,286
Moore ...................................... 54,854 358
FPS ........................................ 19,166 (120)
-------- --------
Combined ................................... $734,958 $ 6,524
======== ========
During fiscal years 1996, 1995 and 1994, the Company acquired several wholesale
distributors of materials to the construction industry that were accounted for
as purchases. These acquisitions, individually or in the aggregate, did not have
a material effect on the consolidated financial statements. Results of
operations of these companies from their respective dates of acquisition have
been included in the consolidated financial statements.
NOTE 3 - PROPERTY AND EQUIPMENT
Property and equipment consist of the following:
1996 1995
----------------------
Land .................................. $ 14,380 $ 13,415
Buildings and improvements ............ 45,996 42,850
Transportation equipment .............. 20,265 19,930
Furniture, fixtures and equipment ..... 24,129 21,045
Property under capital leases ......... 10,551 10,794
--------- ---------
115,321 108,034
Less accumulated depreciation
and amortization .................... (57,624) (53,416)
--------- ---------
$ 57,697 $ 54,618
========= =========
NOTE 4 - LONG-TERM DEBT
Long-term debt consists of the following:
1996 1995
----------------------
Unsecured revolving bank notes under
$160,000 credit agreement, payable
June 30, 1998, fluctuating interest
(6.3% to 6.4% at January 26, 1996) .. $ 68,300 $ 61,025
Short-term instruments classified as
long-term debt ...................... 35,200 34,803
Other notes payable ................... 2,252 6,950
Capital lease obligations ............. 3,014 3,858
--------- ---------
108,766 106,636
Less current portion .................. (2,551) (1,393)
--------- ---------
$ 106,215 $ 105,243
========= =========
On July 31, 1995, the Company's revolving credit and line of credit agreement
with a group of banks was amended. The agreement, as amended, now permits the
Company to borrow up to $160,000 (subject to borrowing limitations under the
agreement) - $125,000 long-term, expiring June 30, 1998, and $35,000 line of
credit convertible to a term note due two years from conversion date. The
$35,000 line of credit backs commercial paper. Under the credit facility,
interest is payable at market rates plus applicable margins. Commitment fees of
.25% and .125% are paid on the unused portions of the revolving and line of
credit facilities, respectively.
Loan covenants require the Company to maintain consolidated working capital of
not less than $75,000 and a maximum ratio of funded debt to total capital, as
defined, of .55 to 1.0. The covenants also restrict the Company's activities
regarding investments, liens, borrowing and leasing, and payment of dividends
other than stock. Under the dividend covenant, approximately $13,480 is
available at January 26, 1996 for payment of dividends.
17
<PAGE>
HUGHES SUPPLY, INC. ANNUAL REPORT
The Company has a bank line of credit for short-term borrowing aggregating
$6,000 (subject to borrowing limitations under the long-term debt covenants)
under which $200 was outstanding at January 26, 1996. There were no amounts
outstanding at January 27, 1995. The line provides for interest at market rates.
The interest rate on short-term borrowing as of January 26, 1996 was 5.9%. In
addition, the Company has a commercial paper program backed by its revolving
credit facility. The weighted average interest rate on outstanding commercial
paper borrowings of $35,000 and $34,803 as of January 26, 1996 and January 27,
1995 was 5.9% and 6.0%, respectively.
The Company's credit facility enables the Company to refinance short-term
borrowings on a long-term basis to the extent that the credit facility is
unused. Accordingly, $35,200 and $34,803 of short-term borrowings at January 26,
1996 and January 27, 1995, respectively, have been classified as long-term debt.
The carrying value of notes payable is a reasonable estimate of fair value since
interest rates are based on prevailing market rates.
Maturities of long-term debt, excluding capital lease obligations, for each of
the five years subsequent to January 26, 1996 and in the aggregate are as
follows:
Fiscal Years Ending
- ------------------------------------------------------------
1997 ............................................. $ 1,694
1998 ............................................. 408
1999 ............................................. 103,615
2000 ............................................. 31
2001 ............................................. 4
Later years ...................................... -
--------
$105,752
========
NOTE 5 - INCOME TAXES
The components of deferred tax assets and liabilities are as follows:
1996 1995
-----------------
Deferred tax assets:
Allowance for doubtful accounts ........ $ 1,809 $ 1,854
Inventories ............................ 1,757 2,866
Capital leases ......................... 503 590
Property and equipment ................. 1,148 744
Accrued vacation ....................... 911 667
Deferred compensation .................. 681 597
Environmental clean-up costs ........... 268 216
Operating leases ....................... 276 -
Other accrued liabilities .............. 5,106 3,222
Other .................................. 389 310
------- -------
Total deferred tax assets .......... 12,848 11,066
------- -------
Deferred tax liabilities:
Operating leases ....................... - 42
Intangible assets ...................... 21 8
------- -------
Total deferred tax liabilities ..... 21 50
------- -------
Net deferred tax asset ..................... $12,827 $11,016
======= =======
No valuation allowance has been provided for these deferred tax assets at
January 26, 1996 and January 27, 1995 as full realization of these assets is
expected.
The consolidated provision for income taxes consists of the following:
Fiscal Years Ended
--------------------------------
1996 1995 1994
-------- -------- --------
Currently payable:
Federal ................................ $ 11,091 $ 9,927 $ 4,567
State .................................. 1,679 1,635 645
-------- -------- --------
12,770 11,562 5,212
-------- -------- --------
Deferred:
Federal ................................ (1,555) (3,650) (906)
State .................................. (256) (199) 205
-------- -------- --------
(1,811) (3,849) (701)
-------- -------- --------
$ 10,959 $ 7,713 $ 4,511
======== ======== ========
The following is a reconciliation of tax computed at the statutory Federal rate
to the income tax expense in the consolidated statements of income:
Fiscal Years Ended
--------------------------------------------------
1996 1995 1994
-------------- -------------- --------------
AMOUNT % Amount % Amount %
-------------- -------------- --------------
Tax computed
at statutory
Federal rate ........... $ 9,453 35.0 $ 6,719 35.0 $ 3,862 35.0
Effect of:
State income tax,
net of Federal
income tax
benefit ............... 925 3.4 933 4.9 552 5.0
Nondeductible
purchase
adjustments ........... 43 .2 38 .2 24 .2
Nondeductible
expenses .............. 396 1.5 330 1.7 117 1.1
Other, net ............. 142 .5 (307) (1.6) (44) (.4)
------- ---- ------- ---- ------- ----
Income tax
expense ................ $10,959 40.6 $ 7,713 40.2 $ 4,511 40.9
======= ==== ======= ==== ======= ====
NOTE 6 - EMPLOYEE BENEFIT PLANS
PROFIT SHARING AND EMPLOYEE STOCK OWNERSHIP PLANS
The Company has a 401(k) profit sharing plan which provides benefits for
substantially all employees of the Company who meet minimum age and length of
service requirements. Under the plan, employee contributions of not less than 2%
to not more than 3% of each eligible employee's compensation are matched (in
cash or stock) 50% by the Company. Additional annual contributions may be made
at the discretion of the Board of Directors.
The Company has an employee stock ownership plan (ESOP) covering substantially
all employees of the Company who meet minimum age and length of service
requirements. The plan is designed to enable eligible employees to acquire a
proprietary interest in the Company. Company contributions (whether in cash or
stock) are determined annually by the Board of Directors in an amount not to
exceed the maximum allowable as an income tax deduction. At January 26, 1996 and
January 27, 1995, the plan owned approximately 184,000 and 172,000 shares,
respectively, of the Company's common stock, all of which were allocated to
participants.
18
<PAGE>
Amounts charged to expense for these and other similar plans during the fiscal
years ended in 1996, 1995 and 1994 were $1,710, $1,157 and $1,000, respectively.
BONUS PLANS
The Company has bonus plans, based on profitability formulas, which provide
incentive compensation for key employees. Amounts charged to expense for bonuses
to executive officers were $1,354, $935 and $533 for the fiscal years ended in
1996, 1995 and 1994, respectively.
STOCK OPTION PLANS
The Company's stock option plans authorize the granting of both incentive and
non-incentive stock options for an aggregate of 1,635,000 shares of common stock
to key executive, management, and sales employees, and, with respect to 135,000
shares, to directors. Under the plans, options are granted at prices not less
than market value on the date of grant, and the maximum term of an option may
not exceed ten years. Prices for incentive stock options granted to employees
who own 10% or more of the Company's stock are at least 110% of market value at
date of grant. Options may be granted from time to time to May 1998, or May 2003
with regard to directors. An option becomes exercisable at such times and in
such installments as set by the Board of Directors.
The employee plan also permits the granting of stock appreciation rights (SARs)
to holders of options. Such rights permit the optionee to surrender an
exercisable option, in whole or in part, on any date that the fair market value
of the Company's common stock exceeds the option price for the stock and receive
payment in common stock, or, if the Board of Directors approves, in cash or any
combination of cash and common stock. Such payment would be equal to the excess
of the fair market value of the shares under the surrendered option over the
option price for such shares. The change in value of SARs would be reflected in
income based upon the market value of the stock. No SARs have been granted or
issued through January 26, 1996.
A summary of option transactions during each of the three fiscal years in the
period ended January 26, 1996 is shown below:
Number of
Shares Option Price Range
--------- ------------------
Under option, January 29, 1993
(253,442 shares exercisable) ............. 406,442 $12.00 - $17.63
Granted ................................. 12,000 $16.25
Exercised ............................... (6,023) $12.25 - $12.87
Cancelled ............................... (12,835) $12.00 - $12.63
-------
Under option, January 28, 1994
(297,584 shares exercisable) ............. 399,584 $12.25 - $17.63
Granted ................................. 115,000 $18.13 - $25.37
Exercised ............................... (44,241) $12.25 - $12.63
-------
Under option, January 27, 1995
(339,343 shares exercisable) ............. 470,343 $12.25 - $25.37
Granted ................................. 15,000 $19.25
Exercised ............................... (93,541) $12.25 - $20.25
Cancelled ............................... (1,861) $12.25 - $12.63
-------
Under option, January 26, 1996
(329,941 shares exercisable) ............. 389,941 $12.25 - $25.37
=======
There were 627,519 and 640,658 shares available for the granting of options at
January 26, 1996 and January 27, 1995, respectively.
STOCK-BASED COMPENSATION
The Company accounts for compensation cost related to employee stock options and
other forms of employee stock-based compensation plans in accordance with the
requirements of Accounting Principles Board Opinion 25 ("APB 25"). APB 25
requires compensation cost for stock-based compensation plans to be recognized
based on the difference, if any, between the fair market value of the stock on
the date of grant and the option exercise price. In October 1995, the Financial
Accounting Standards Board issued Statement of Financial Accounting Standards
No. 123, ACCOUNTING FOR STOCK-BASED COMPENSATION ("SFAS 123"). SFAS 123
established a fair value-based method of accounting for compensation cost
related to stock options and other forms of stock-based compensation plans.
However, SFAS 123 allows an entity to continue to measure compensation costs
using the principles of APB 25 if certain pro forma disclosures are made. SFAS
123 is effective for fiscal years beginning after December 15, 1995. The Company
intends to adopt the provisions for pro forma disclosure requirements of SFAS
123 in fiscal 1997.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
The Company has entered into agreements with certain key executive officers
providing for supplemental payments, generally for periods up to 15 years, upon
retirement, disability or death. The obligations are not funded apart from the
Company's general assets. Amounts charged to expense under the agreements were
$238, $390 and $166 in fiscal years ended 1996, 1995 and 1994, respectively.
NOTE 7 - COMMITMENTS AND CONTINGENCIES
LEASE COMMITMENTS
A portion of the Company's operations are conducted from locations leased under
capital leases from a corporation which is owned by three of the directors of
Hughes Supply, Inc. The leases generally provide that all expenses related to
the properties are to be paid by the lessee. The leases also generally provide
for rental increases at specified intervals. The leases all expire within ten
years; however, it is expected that they will be renewed. Rents under these
agreements amounted to $1,149 in fiscal year ended 1996 and $1,165 for fiscal
years ended 1995 and 1994. Property under capital leases is included in the
consolidated balance sheets as follows:
1996 1995
--------------------
Property under capital leases
(consisting of land and buildings) ....... $ 10,551 $ 10,794
Accumulated amortization ................... (8,840) (8,458)
-------- --------
$ 1,711 $ 2,336
======== ========
In addition, rents under operating leases paid to this related corporation were
$358, $400 and $396 in 1996, 1995 and 1994, respectively.
19
<PAGE>
HUGHES SUPPLY, INC. ANNUAL REPORT
Future minimum payments, by year and in the aggregate, under the aforementioned
leases and other noncancellable operating leases with initial or remaining terms
in excess of one year as of January 26, 1996, are as follows:
Capital Operating
Fiscal Years Ending Leases Leases
- ------------------------------------------------------------------------------
1997 ............................................. $ 1,141 $ 9,122
1998 ............................................. 1,141 8,238
1999 ............................................. 558 6,540
2000 ............................................. 360 4,755
2001 ............................................. 325 3,201
Later years ...................................... 258 5,221
------- -------
Total minimum lease payments ....................... 3,783 $37,077
=======
Less amount representing interest .................. (769)
-------
Present value of net minimum
lease payments ................................. 3,014
Less current portion ............................... (857)
-------
$ 2,157
=======
Lease-related expenses are as follows:
Fiscal Years Ended
----------------------------
1996 1995 1994
----------------------------
Capital lease amortization .............. $ 584 $ 594 $ 594
Capital lease interest expense .......... 364 440 505
Operating lease rentals
(excluding month-to-month
rents) ................................. 12,090 7,412 6,397
GUARANTEES OF AFFILIATE DEBT
A wholly-owned subsidiary of the Company owns a 20% interest in Accord
Industries Company ("Accord"), a joint venture formed from the Company's sale of
its manufacturing operations in 1990. As partial consideration for the sale, the
Company received $2,750 in notes receivable, part of which is convertible into
an additional partnership interest in Accord of up to 29%.
In connection with the investment in Accord, the Company guaranteed $500 of
Accord's indebtedness to a bank and the Company's subsidiary as a joint venturer
is contingently liable for the remaining bank debt of approximately $1,100 as of
January 26, 1996.
LEGAL MATTERS
The Company is involved in various legal proceedings incident to the conduct of
its business. In the opinion of management, none of the proceedings are material
in relation to the Company's consolidated operations or financial position.
NOTE 8 - CAPITAL STOCK
COMMON STOCK
On May 24, 1994, the shareholders approved an amendment to the articles of
incorporation of the Company increasing the number of authorized shares of
common stock to 20,000,000 shares, $1.00 par value per share.
On March 8, 1994, the Company issued a call for redemption of its outstanding 7%
convertible subordinated debentures to take place on April 7, 1994. Of the
$22,960 debentures outstanding at January 28, 1994, $22,889, or 99.7%, were
converted into the Company's common stock at $21.17 per share or 47.2 common
shares for each $1 face amount of debentures. This conversion resulted in the
issuance of 1,081,146 common shares.
PREFERRED STOCK
The Company's Board of Directors established Series A Junior Participating
Preferred Stock (Series A Stock) consisting of 300,000 shares. Each share of
Series A Stock will be entitled to one vote on all matters submitted to a vote
of shareholders. Series A Stock is not redeemable or convertible into any other
security. Each share of Series A Stock shall have a minimum cumulative
preferential quarterly dividend rate equal to the greater of $1.25 per share or
100 times the aggregate per share amount of the dividend declared on common
stock. In the event of liquidation, shares of Series A Stock will be entitled to
the greater of $100 per share plus any accrued and unpaid dividend or 100 times
the payment to be made per share of common stock. No shares of Series A Stock
are presently outstanding, and no shares are expected to be issued except in
connection with the shareholder rights plan referred to below.
The Company has a shareholder rights plan. Under the plan, the Company
distributed to shareholders a dividend of one right per share of the Company's
common stock. When exercisable, each right will permit the holder to purchase
from the Company a unit consisting of one one-hundredth of a share of Series A
Stock at a purchase price of $65 per unit. The rights generally become
exercisable if a person or group acquires 20% or more of the Company's common
stock or commences a tender offer that could result in such person or group
owning 30% or more of the Company's common stock. If certain subsequent events
occur after the rights first become exercisable, the rights may become
exercisable for the purchase of shares of common stock of the Company, or of an
acquiring company, having a value equal to two times the exercise price of the
right. The rights may be redeemed by the Company at $.01 per right at any time
prior to ten days after 20% or more of the Company's stock is acquired by a
person or group. The rights expire on June 2, 1998 unless sooner terminated in
accordance with the rights plan.
20
<PAGE>
NOTE 9 - CONCENTRATION OF CREDIT RISK
The Company sells its products in the major areas of construction markets in
certain states of the eastern half of the United States. Approximately 90% of
the Company's sales are credit sales which are primarily to customers whose
ability to pay is dependent upon the construction industry economics prevailing
in these areas; however, concentration of credit risk with respect to trade
accounts receivable is limited due to the large number of customers comprising
the Company's customer base and no one customer comprises more than 1% of annual
sales. The Company performs ongoing credit evaluations of its customers and in
certain situations obtains collateral sufficient to protect its credit position.
The Company maintains reserves for potential credit losses, and such losses have
been within management's expectations.
================================================================================
NOTE 10 - SUPPLEMENTAL CASH FLOWS INFORMATION
The following is a reconciliation of net income to net cash provided by (used
in) operating activities:
<TABLE>
<CAPTION>
Fiscal Years Ended
--------------------------------
1996 1995 1994
--------------------------------
<S> <C> <C> <C>
Net income ...................................................................... $ 16,050 $ 11,485 $ 6,524
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
Depreciation ................................................................ 8,669 8,217 7,038
Amortization ................................................................ 1,916 839 762
Provision for doubtful accounts ............................................. 1,849 1,381 1,938
Gain on sale of property and equipment ...................................... (621) (294) (270)
Undistributed (earnings) losses of affiliate ................................ 115 (139) (171)
Treasury shares contributed to employee benefit plan ........................ - 500 -
Changes in assets and liabilities, net of effects of business acquisitions:
(Increase) decrease in -
Accounts receivable ..................................................... (8,872) (13,819) (16,894)
Inventories ............................................................. 1,129 (16,539) (4,688)
Other current assets .................................................... (1,119) (835) (81)
Other assets ............................................................ (1,063) (262) 178
Increase (decrease) in -
Accounts payable and accrued expenses ................................... 6,095 13,770 4,399
Accrued interest and income taxes ....................................... (2,249) 2,840 (487)
Other noncurrent liabilities ............................................ 225 397 178
Increase in deferred income taxes ......................................... (1,811) (3,849) (625)
-------- -------- --------
Net cash provided by (used in) operating activities ............................. $ 20,313 $ 3,692 $ (2,199)
======== ======== ========
</TABLE>
NONCASH INVESTING AND FINANCING ACTIVITIES
The net assets acquired and consideration for acquisitions accounted for as
purchases are summarized below:
Fiscal Years Ended
--------------------------------
1996 1995 1994
--------------------------------
Fair value of:
Assets acquired ............. $ 22,600 $ 28,396 $ 8,421
Liabilities assumed ......... (9,369) (7,269) (4,487)
-------- -------- --------
Purchase price ................ $ 13,231 $ 21,127 $ 3,934
======== ======== ========
Consideration in fiscal 1996 included 191,000 shares of common stock (fair value
$3,222). Consideration in fiscal 1995 included 249,000 shares of common stock
(fair value $4,286), a note for $1,525 and amounts payable of $4,217.
Additional common stock was issued in fiscal year 1995 upon the conversion of
$22,889 convertible subordinated debentures.
21
<PAGE>
HUGHES SUPPLY, INC. ANNUAL REPORT
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Shareholders and Board of Directors
of Hughes Supply, Inc.
In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of income, shareholders' equity and of cash flows
present fairly, in all material respects, the financial position of Hughes
Supply, Inc. and its subsidiaries at January 26, 1996 and January 27, 1995, and
the results of their operations and their cash flows for the years ended January
26, 1996 and January 27, 1995, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of the Company's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with generally accepted auditing standards which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion expressed
above. The consolidated financial statements of Hughes Supply, Inc. and its
subsidiaries for the year ended January 28, 1994, prior to restatement, were
audited by other independent accountants whose report dated March 17, 1994
expressed an unqualified opinion on those financial statements.
The financial statements for 1994 have been restated to reflect the poolings of
interests described in Note 2. We have audited the restatement adjustments
described in Note 2 that were applied to restate the 1994 financial statements.
In our opinion, such adjustments are appropriate and have been properly applied
to the 1994 financial statements.
/s/ PRICE WATERHOUSE LLP
Orlando, Florida
March 14, 1996
MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL STATEMENTS
The consolidated financial statements and related information included in this
annual report were prepared in conformity with generally accepted accounting
principles. Management is responsible for the integrity of the financial
statements and for the related information. Management has included in the
Company's financial statements amounts that are based on estimates and
judgements which it believes are reasonable under the circumstances.
The responsibility of the Company's independent accountants is to express an
opinion on the fairness of the financial statements. Their opinion is based on
an audit conducted in accordance with generally accepted auditing standards as
further described in their report.
The Audit Committee of the Board of Directors is composed of three
non-management directors. The Committee meets periodically with financial
management, internal auditors, and the independent accountants to review
internal accounting control, auditing, and financial reporting matters.
22
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
As described in Note 2 of the Notes to Consolidated Financial Statements, in
fiscal 1996 the Company entered into business combinations with Moore Electric
Supply, Inc. and Florida Pipe & Supply Company which were accounted for as
poolings of interests. Accordingly, all financial data in this discussion and
analysis is reported as though the companies have always been one.
NET SALES
The Company exceeded the one billion dollar mark with net sales of $1.1 billion
in fiscal 1996. Net sales increased by 24% over fiscal 1995 net sales of $875
million. Fiscal 1994 net sales totaled $735 million. Newly-opened and acquired
wholesale outlets accounted for approximately two-thirds of the increase in
fiscal 1996 and 40% of the increase in fiscal 1995.
The Company's strategy of expanding and diversifying into more construction
markets (commercial and industrial, as well as geographic) has contributed to
these strong sales gains along with same store sales growth. Although fiscal
1996 and 1995 residential construction activity has been slower following a
strong fiscal 1994, commercial and industrial construction activity rebounded in
fiscal 1995 and continued through fiscal 1996.
Construction activity, especially commercial construction activity in the
Southeast, is expected to remain strong during fiscal 1997. The continuing
favorable construction markets coupled with the Company's acquisition program
and same store growth expectations should allow the Company to continue to grow
its sales.
GROSS MARGIN
Gross margins have been improving steadily over the past few years. The
improvement has resulted from several factors, including expansion of product
offerings to lines with better margins, efficiencies created with central
distribution centers, increased volume and concentration of supply sources as
part of the Company's preferred vendor program. Gross margins were as follows:
FISCAL YEAR ENDED 1994 1995 1996
- ----------------- ---- ---- ----
19.7% 20.1% 20.7%
OPERATING EXPENSES
Operating expenses in fiscal 1996 were $193.7 million, a 25% increase over
fiscal 1995. Newly-opened wholesale outlets and recent acquisitions accounted
for approximately 60% of the increase. The remainder of the increase is due
primarily to personnel and transportation costs associated with the growth in
sales. Similarly, the $23.3 million increase in fiscal 1995 compared to fiscal
1994 is attributed primarily to newly-opened wholesale outlets and acquisitions
(approximately 45%) and costs, such as personnel, transportation and insurance,
associated with sales growth.
NON-OPERATING INCOME AND EXPENSES
Interest and other income increased to $4.6 million in fiscal 1996 compared to
$2.8 million in fiscal 1995 and $3.0 million in fiscal 1994. This increase is
primarily the result of improved collection of service charge income on
delinquent accounts receivable. In addition, gain realized on sales of property
and equipment (primarily transportation equipment) was $.3 million higher in
fiscal 1996.
Interest expense increased by $2.2 million in fiscal 1996 over 1995. Higher
interest rates and higher average borrowing levels were equally responsible for
the increase. Fiscal 1995 interest expense was only $.2 million higher than
fiscal 1994, which was attributable to higher interest rates partially offset by
lower borrowing levels due primarily to the conversion of $23 million of
subordinated debentures.
NET INCOME
Net income in fiscal 1996 increased 40% to $16.1 million from $11.5 million in
fiscal 1995 while fully diluted earnings per share increased 28% to $2.31 in
fiscal 1996 compared to $1.81 in fiscal 1995. These results followed fiscal 1995
increases of 76% and 52%, respectively, in net income and fully diluted earnings
per share. Net income and fully diluted earnings per share in fiscal 1994 were
$6.5 million and $1.19, respectively.
These improved results reflect operating leverage that has been achieved through
the Company's acquisition and internal growth program. Operating margins
(operating income as a percentage of net sales) have steadily improved to 2.8%
in fiscal 1996, compared to 2.5% and 1.8% in fiscal 1995 and 1994, respectively.
23
<PAGE>
HUGHES SUPPLY, INC. ANNUAL REPORT
LIQUIDITY AND CAPITAL RESOURCES
Working capital in fiscal 1996 amounted to $181 million compared to $173 million
and $142 million in fiscal 1995 and 1994, respectively. The Company continues to
maintain more than 75% of total assets as current assets. The working capital
ratio was 2.54 to 1, 2.67 to 1 and 2.89 to 1 for fiscal years 1996, 1995 and
1994, respectively.
During expansionary periods when sales volumes are increasing, the Company is
required to carry higher levels of inventories and receivables to support the
growth. The Company strives to maintain inventories at levels that support
current sales activity but are not excessive through increased use of central
distribution facilities and with investments in resources to improve the
efficiency and service capability of these facilities. As a result, inventory
turnover has been more than 6 times for each of the last three fiscal years and
reached 6.7 times in fiscal 1996. During the same period, accounts receivable
turnover has been greater than 7 times reaching 7.6 times in fiscal 1996.
ACCOUNTS RECEIVABLE TURNOVER
FISCAL YEAR ENDED 1994 1995 1996
- ----------------- ---- ---- ----
7.3% 7.1% 7.6%
INVENTORY TURNOVER
FISCAL YEAR ENDED 1994 1995 1996
- ----------------- ---- ---- ----
6.3% 6.2% 6.7%
In fiscal 1996, net cash provided by operations was $20.3 million compared to
$3.7 million in fiscal 1995 and cash used in operations of $2.2 million in
fiscal 1994. These changes are due primarily to fluctuations in accounts
receivable, inventories and accounts payable. Because additional amounts of cash
were generated in fiscal 1996, net borrowing under short-term debt decreased to
$6.2 million compared to $23.8 million and $16.7 million in fiscal 1995 and
1994, respectively.
The Company invested $11.9 million for property and equipment and $10.0 million
for business acquisitions in fiscal 1996. These business acquisitions added 20
wholesale outlets to the Company's operations. Capital expenditures, not
including amounts for business acquisitions, for property and equipment in
fiscal 1997 are expected to be approximately $12 million.
During fiscal 1996, the Company's revolving credit and line of credit agreement
with a group of banks was amended in order to expand the Company's debt capacity
(see Note 4 of Notes to Consolidated Financial Statements). The agreement now
permits the Company to borrow up to $160 million ($130 million previously). With
this facility as well as a short-term line of credit totaling $6 million, the
Company has sufficient borrowing capacity to take advantage of growth and
business acquisition opportunities. The Company's financial condition remains
strong and the Company believes that it has the resources necessary, with
approximately $62 million of unused debt capacity (subject to borrowing
limitations under long-term debt covenants), to fund ongoing operating
requirements. Future expansion will continue to be financed on a
project-by-project basis through additional borrowing, or, as circumstances
allow, through the issuance of common stock.
BUSINESS ACQUISITIONS
In addition to the business combinations accounted for as poolings of interests
as mentioned above, in fiscal 1996 the Company acquired several wholesale
distributors for approximately $13 million ($10 million in cash and $3 million
in stock). Outlays for acquisition of wholesale distributors in fiscal 1995
totaled $21 million ($11 million in cash, $4 million in stock and $6 million in
other consideration), while fiscal 1994 expenditures were $4 million in cash.
These acquisitions were accounted for as purchases and the results of operations
of these businesses from their respective dates of acquisition are included in
the Company's consolidated financial statements. The acquisitions have expanded
the Company's geographic markets to now include 14 states in the eastern half of
the United States.
INFLATION AND CHANGING PRICES
The Company is aware of the potentially unfavorable effects inflationary
pressures may create through higher asset replacement costs and related
depreciation, higher interest rates and higher material costs. The Company seeks
to minimize these effects through economies of purchasing and inventory
management resulting in cost reductions and productivity improvements as well as
price increases to maintain reasonable profit margins. Management believes,
however, that inflation (which has been moderate over the past few years) and
changing prices have not significantly affected the Company's operating results
or markets in the three most recent fiscal years.
24
<PAGE>
<TABLE>
<CAPTION>
MARKET PRICE AND DIVIDEND DATA
Market Price Dividends Per Share(1)
------------------------------------- ----------------------
Fiscal Years(2) Fiscal Years(2)
------------------------------------- ----------------------
1996 1995 1996 1995
----------------- ----------------- ----------------------
HIGH LOW High Low
----------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
First quarter ............ $20 7/8 $17 3/4 $32 1/4 $24 $.07 $.05
Second quarter ........... $22 3/8 $18 7/8 $28 3/4 $17 $.07 $.05
Third quarter ............ $27 1/4 $21 3/8 $21 $17 $.07 $.06
Fourth quarter ........... $30 1/2 $23 5/8 $19 3/8 $15 7/8 $.09 $.06
---- ----
Year's high and low ...... $30 1/2 $17 3/4 $32 1/4 $15 7/8
Total dividends .......... $.30 $.22
==== ====
<FN>
(1) See Note 4 of Notes to Consolidated Financial Statements for dividend
restrictions.
(2) The Company's fiscal year ends on the last Friday in January.
</FN>
</TABLE>
<TABLE>
<CAPTION>
SELECTED QUARTERLY FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Earnings Per Share(1) Average Shares(1)
--------------------- -----------------
Net Gross Net Fully Fully
Sales Profit Income Primary Diluted Primary Diluted
---------- -------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
FISCAL QUARTER
1996
First(2) ........................ $ 253,886 $ 51,666 $ 2,908 $ .43 $ .43 6,711 6,717
Second(2) ....................... 282,367 56,790 5,055 .73 .73 6,879 6,895
Third(2) ........................ 284,084 57,571 4,289 .62 .62 6,935 6,950
Fourth .......................... 261,842 57,579 3,798 .55 .54 6,961 6,981
---------- -------- -------
Year ............................ $1,082,179 $223,606 $16,050 $2.34 $2.31 6,856 6,935
========== ======== =======
Fiscal Quarter
1995(2)
First ........................... $ 201,662 $ 39,991 $ 1,938 $ .34 $ .32 5,739 6,478
Second .......................... 220,949 44,349 3,332 .52 .52 6,437 6,437
Third ........................... 228,208 44,849 3,116 .49 .49 6,392 6,393
Fourth .......................... 224,640 47,138 3,099 .48 .48 6,456 6,459
---------- -------- -------
Year ............................ $ 875,459 $176,327 $11,485 $1.83 $1.81 6,259 6,443
========== ======== =======
<FN>
(1) Calculated independently for each period and, consequently, the sum of the quarters may differ from the annual amount.
(2) Restated for fiscal 1996 poolings of interests.
</FN>
</TABLE>
25
<PAGE>
HUGHES SUPPLY, INC. ANNUAL REPORT
<TABLE>
<CAPTION>
SELECTED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA AND RATIOS)
Fiscal Years Ended (1)(2)
- --------------------------------------------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991
---------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net sales ......................................... $1,082,179 $875,459 $734,958 $600,185 $558,299 $634,960
Cost of sales ..................................... $ 858,573 $699,132 $590,466 $485,074 $451,776 $513,645
Gross margin ...................................... 20.7% 20.1% 19.7% 19.2% 19.1% 19.1%
- --------------------------------------------------------------------------------------------------------------------------------
Selling, general and administrative expenses ...... $ 181,284 $144,256 $121,645 $100,630 $ 97,740 $100,241
% of sales ...................................... 16.8% 16.5% 16.6% 16.8% 17.5% 15.8%
Depreciation and amortization ..................... $ 10,585 $ 9,056 $ 7,800 $ 6,798 $ 7,398 $ 9,478
Provision for doubtful accounts ................... $ 1,849 $ 1,381 $ 1,938 $ 1,924 $ 2,820 $ 2,851
Operating income (loss) ........................... $ 29,888 $ 21,634 $ 13,109 $ 5,759 $ (1,435) $ 8,745
- --------------------------------------------------------------------------------------------------------------------------------
Operating margin .................................. 2.8% 2.5% 1.8% 1.0% (.3%) 1.4%
Interest and other income ......................... $ 4,605 $ 2,848 $ 2,981 $ 3,743 $ 2,058 $ 4,181
Interest expense .................................. $ 7,484 $ 5,284 $ 5,055 $ 5,117 $ 6,439 $ 8,600
Income (loss) before income taxes ................. $ 27,009 $ 19,198 $ 11,035 $ 4,385 $ (5,816) $ 4,326
% of sales ...................................... 2.5% 2.2% 1.5% .7% (1.0%) .7%
Income taxes (benefits) ........................... $ 10,959 $ 7,713 $ 4,511 $ 1,544 $ (1,960) $ 1,776
Net income (loss) ................................. $ 16,050 $ 11,485 $ 6,524 $ 2,841 $ (3,856) $ 2,550
% of sales ...................................... 1.5% 1.3% .9% .5% (.7%) .4%
Net income (loss) per share
Primary ......................................... $ 2.34 $ 1.83 $ 1.27 $ .56 $ (.76) $ .49
Fully diluted ................................... $ 2.31 $ 1.81 $ 1.19 $ .56 $ (.76) $ .49
- --------------------------------------------------------------------------------------------------------------------------------
Average number of shares outstanding
Primary ......................................... 6,856 6,259 5,143 5,058 5,046 5,225
Fully diluted ................................... 6,935 6,443 6,313 5,086 5,046 5,225
Cash dividends per share .......................... $ .30 $ .22 $ .16 $ .12 $ .24 $ .36
- --------------------------------------------------------------------------------------------------------------------------------
Long-term debt, less current portion .............. $ 106,215 $105,243 $104,692 $ 86,258 $ 77,240 $ 86,781
Shareholders' equity .............................. $ 154,143 $136,104 $ 98,066 $ 90,080 $ 86,829 $ 91,643
Total assets ...................................... $ 379,096 $346,116 $279,390 $246,249 $234,723 $237,788
- --------------------------------------------------------------------------------------------------------------------------------
Net working capital ............................... $ 180,512 $172,794 $142,392 $120,522 $112,984 $123,196
Current ratio ..................................... 2.5 TO 1 2.7 to 1 2.9 to 1 2.7 to 1 2.6 to 1 3.1 to 1
Shareholders' equity per share .................... $ 22.67 $ 20.92 $ 19.24 $ 18.05 $ 17.40 $ 18.36
Return on equity(3) ............................... 11.8% 11.7% 7.2% 3.3% (4.2%) 2.6%
- --------------------------------------------------------------------------------------------------------------------------------
Leverage (total assets/shareholders' equity) ...... 2.46 2.54 2.85 2.73 2.70 2.59
Return on assets(3) ............................... 4.6% 4.1% 2.6% 1.2% (1.6%) 1.0%
Ratio of long-term debt to total capital employed . .41 TO 1 .44 to 1 .52 to 1 .49 to 1 .47 to 1 .49 to 1
Capital expenditures(4) ........................... $ 11,853 $ 11,915 $ 8,885 $ 8,857 $ 5,050 $ 7,464
- --------------------------------------------------------------------------------------------------------------------------------
<FN>
(1) The Company's fiscal year ends on the last Friday in January.
(2) All data adjusted for fiscal 1996 and fiscal 1994 poolings of interests and
three-for-two stock split declared May 17, 1988.
(3) Ratios based on balance sheet at beginning of year.
(4) Excludes capital leases.
</FN>
</TABLE>
26
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA AND RATIOS)
Fiscal Years Ended (1)(2)
- -------------------------------------------------------------------------------------------------------------------
1990 1989 1988 1987 1986
---------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net sales ......................................... $606,613 $562,881 $486,004 $389,021 $370,537
Cost of sales ..................................... $486,001 $448,743 $386,424 $314,032 $300,598
Gross margin ...................................... 19.9% 20.3% 20.5% 19.3% 18.9%
- -------------------------------------------------------------------------------------------------------------------
Selling, general and administrative expenses ...... $ 92,153 $ 83,122 $ 72,070 $ 54,102 $ 50,281
% of sales ...................................... 15.2% 14.8% 14.8% 13.9% 13.6%
Depreciation and amortization ..................... $ 9,355 $ 8,910 $ 6,860 $ 5,519 $ 4,910
Provision for doubtful accounts ................... $ 2,616 $ 1,471 $ 1,745 $ 573 $ 1,249
Operating income (loss) ........................... $ 16,488 $ 20,635 $ 18,905 $ 14,795 $ 13,499
- -------------------------------------------------------------------------------------------------------------------
Operating margin .................................. 2.7% 3.7% 3.9% 3.8% 3.6%
Interest and other income ......................... $ 2,903 $ 3,693 $ 2,634 $ 2,629 $ 1,905
Interest expense .................................. $ 7,755 $ 6,871 $ 4,375 $ 3,556 $ 2,765
Income (loss) before income taxes ................. $ 11,636 $ 17,457 $ 17,164 $ 13,868 $ 12,639
% of sales ...................................... 1.9% 3.1% 3.5% 3.6% 3.4%
Income taxes (benefits) ........................... $ 4,539 $ 6,752 $ 7,418 $ 6,808 $ 5,743
Net income (loss) ................................. $ 7,097 $ 10,705 $ 9,746 $ 7,060 $ 6,896
% of sales ...................................... 1.2% 1.9% 2.0% 1.8% 1.9%
Net income (loss) per share
Primary ......................................... $ 1.25 $ 1.86 $ 1.66 $ 1.23 $ 1.18
Fully diluted ................................... $ 1.20 $ 1.70 $ 1.53 $ 1.17 $ 1.18
- -------------------------------------------------------------------------------------------------------------------
Average number of shares outstanding
Primary ......................................... 5,675 5,756 5,870 5,741 5,852
Fully diluted ................................... 6,770 6,866 6,961 6,584 5,852
Cash dividends per share .......................... $ .35 $ .31 $ .27 $ .25 $ .21
- -------------------------------------------------------------------------------------------------------------------
Long-term debt, less current portion .............. $ 84,260 $ 76,172 $ 63,173 $ 36,954 $ 20,908
Shareholders' equity .............................. $ 97,464 $ 95,445 $ 86,996 $ 79,981 $ 74,915
Total assets ...................................... $253,647 $236,597 $213,528 $170,908 $143,602
- -------------------------------------------------------------------------------------------------------------------
Net working capital ............................... $123,106 $114,388 $101,380 $ 79,026 $ 65,143
Current ratio ..................................... 2.8 to 1 2.8 to 1 2.7 to 1 2.5 to 1 2.4 to 1
Shareholders' equity per share .................... $ 17.80 $ 16.89 $ 15.33 $ 13.94 $ 13.00
Return on equity(3) ............................... 7.4% 12.3% 12.2% 9.4% 10.0%
- -------------------------------------------------------------------------------------------------------------------
Leverage (total assets/shareholders' equity) ...... 2.60 2.48 2.45 2.14 1.92
Return on assets(3) ............................... 3.0% 5.0% 5.7% 4.9% 5.2%
Ratio of long-term debt to total capital employed . .46 to 1 .44 to 1 .42 to 1 .32 to 1 .22 to 1
Capital expenditures(4) ........................... $ 11,195 $ 9,957 $ 15,585 $ 11,688 $ 5,661
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
27
<PAGE>
CORPORATE AND SHAREHOLDER INFORMATION
DIRECTORS
David H. Hughes
CHAIRMAN OF THE BOARD
John D. Baker, II
PRESIDENT, FLORIDA ROCK INDUSTRIES, INC.
Robert N. Blackford
ATTORNEY, MAGUIRE, VOORHIS & WELLS, P.A.
John B. Ellis
FORMER SENIOR VICE PRESIDENT-FINANCE AND TREASURER, GENUINE PARTS COMPANY
A. Stewart Hall, Jr.
Clifford M. Hames
FORMER VICE CHAIRMAN OF THE BOARD, SUN BANK, N.A.
Russell V. Hughes
Vincent S. Hughes
Herman B. McManaway
FORMER VICE PRESIDENT, RUDDICK CORPORATION AND PRESIDENT, RUDDICK INVESTMENT CO.
Donald C. Martin
FORMER PRESIDENT, ELECTRICAL DISTRIBUTORS, INC.
EXECUTIVE OFFICERS AND MANAGEMENT
David H. Hughes
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
A. Stewart Hall, Jr.
PRESIDENT AND CHIEF OPERATING OFFICER
Robert N. Blackford
SECRETARY
Jacquel K. Clark
ASSISTANT SECRETARY & ASSISTANT TREASURER
Jasper L. Holland, Jr.
REGIONAL VICE PRESIDENT
Clyde E. Hughes
REGIONAL VICE PRESIDENT
Russell V. Hughes
VICE PRESIDENT
Vincent S. Hughes
VICE PRESIDENT
James C. Plyler, Jr.
REGIONAL VICE PRESIDENT
Kenneth H. Stephens
REGIONAL VICE PRESIDENT
Sidney J. Strickland, Jr.
VICE PRESIDENT, PURCHASING AND ADMINISTRATION
Gradie E. Winstead, Jr.
REGIONAL VICE PRESIDENT
Peter J. Zabaski
REGIONAL VICE PRESIDENT
J. Stephen Zepf
TREASURER & CHIEF FINANCIAL OFFICER
TRANSFER AGENT AND REGISTRAR
American Stock Transfer & Trust Company
40 Wall Street
New York, New York 10005
ANNUAL MEETING
Tuesday, May 21, 1996, at 10:00 AM
Hughes Supply, Inc.
Suite 200
20 North Orange Avenue
Orlando, Florida 32801
GENERAL COUNSEL
Maguire, Voorhis & Wells, P.A.
Orlando, Florida
AUDITORS
Price Waterhouse LLP
Orlando, Florida
CORPORATE HEADQUARTERS
Hughes Supply, Inc.
20 North Orange Avenue
Orlando, Florida 32801
Telephone: 407-841-4755
- --------------------------------------------------------------------------------
The shares of Hughes Supply, Inc. common stock are traded on the New York Stock
Exchange under the symbol "HUG." The approximate number of shareholders of
record as of February 21, 1996 was 1,114. A COPY OF THE HUGHES SUPPLY, INC.
ANNUAL REPORT ON FORM 10-K AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
WILL BE MADE AVAILABLE WITHOUT CHARGE, UPON WRITTEN REQUEST. REQUESTS SHOULD BE
DIRECTED TO:
J. Stephen Zepf
Treasurer and Chief Financial Officer
Hughes Supply, Inc.
Post Office Box 2273
Orlando, Florida 32802
28
Exhibit 21.1
Subsidiaries of the Registrant
Set forth below is a listing, by name and state of
incorporation, of each corporation which is, as of the date of this
Report, or was, at any time since the first day of the fiscal year
ended January 26, 1996, a subsidiary of the Registrant. Unless
otherwise indicated, each such corporation was a 100% owned
subsidiary during such fiscal year and continues in existence as a
100% owned subsidiary of the Registrant as of the date of this
Report.
1) Carolina Pump & Supply Corp., a Rhode Island corporation
2) USCO Incorporated, a North Carolina corporation
3) Paine Supply of Jackson, Inc., a Mississippi corporation
4) Hughes Aviation, Inc., a Florida Corporation
5) One Stop Supply, Inc., a Tennessee corporation
6) Mills & Lupton Supply Company, a Tennessee corporation
7) Twin-T of the Carolinas, Inc., a North Carolina
corporation, merged into Carolina Pump & Supply Corp.
February 20, 1995
8) H Venture Corp., a Florida corporation
9) HHH, Inc., a Delaware corporation
10) HSI Corp., a Delaware corporation
11) Swaim Supply Company, Inc., a North Carolina corporation,
merged into USCO Incorporated February 7, 1995
12) Olander & Brophy, Inc., a Pennsylvania corporation,
acquired by the Registrant March 3, 1995
13) Port City Electrical Supply, Inc., a Georgia corporation,
acquired by the Registrant March 30, 1995
14) Elec-Tel Supply Company, a Georgia corporation, acquired
by the Registrant April 3, 1995
15) Moore Electric Supply, Inc., a North Carolina
corporation, acquired by the Registrant August 1, 1995.
16) Atlantic Pump and Equipment Co. of Puerto Rico, a Florida
corporation, acquired by the Registrant September 1,
1995.
17) Atlantic Pump & Equipment Company of Miami, Inc., a
Florida corporation, acquired by the Registrant September
1, 1995.
18) Atlantic Pump & Equipment Company of West Palm Beach,
Inc., a Florida corporation, acquired by the Registrant
September 1, 1995.
19) Florida Pipe & Supply Company, a Florida corporation,
acquired by the Registrant December 18, 1995.
Exhibit 23.1
Consent of Independent Certified Public Accountants
We hereby consent to the incorporation by reference in the
Prospectus constituting part of the Registration Statements on
Form S-3 (Nos. 33-70112, 33-56489, 33-56837, 33-61391 and 33-64803)
and the Registration Statements on Form S-8 (Nos. 2-78323,
33-9082, 33-26468 and 33-33701) of Hughes Supply, Inc. of our
report dated March 14, 1996 appearing on page 22 of the Annual
Report to Shareholders which is incorporated in this Annual
Report on Form 10-K.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
March 25, 1996
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration
Statements of Hughes Supply, Inc. on Forms S-8 (File Nos. 2-78323,
33-9082, 33-26468 and 33-33701) and on Forms S-3 (File Nos. 33-
70112, 33-56837, 33-56489, 33-61391 and 33-64803), of our report
dated March 17, 1994, on our audit of the consolidated financial
statements of Hughes Supply, Inc. and subsidiaries for the fiscal
year ended January 28, 1994, which report is included in this
Annual Report on Form 10-K.
/s/ Coopers & Lybrand L.L.P.
Orlando, Florida
March 14, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE CONSOLIDATED BALANCE SHEET OF HUGHES SUPPLY, INC. AS OF
JANUARY 26, 1996, AND THE RELATED STATEMENT OF INCOME FOR THE YEAR
THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000049029
<NAME> HUGHES SUPPLY, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JAN-26-1996
<PERIOD-END> JAN-26-1996
<CASH> 3,432
<SECURITIES> 0
<RECEIVABLES> 148,025
<ALLOWANCES> 4,671
<INVENTORY> 132,524
<CURRENT-ASSETS> 297,485
<PP&E> 115,321
<DEPRECIATION> 57,624
<TOTAL-ASSETS> 379,096
<CURRENT-LIABILITIES> 116,973
<BONDS> 106,215
<COMMON> 6,798
0
0
<OTHER-SE> 147,345
<TOTAL-LIABILITY-AND-EQUITY> 379,096
<SALES> 1,082,179
<TOTAL-REVENUES> 1,082,179
<CGS> 858,573
<TOTAL-COSTS> 858,573
<OTHER-EXPENSES> 191,869
<LOSS-PROVISION> 1,849
<INTEREST-EXPENSE> 7,484
<INCOME-PRETAX> 27,009
<INCOME-TAX> 10,959
<INCOME-CONTINUING> 16,050
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16,050
<EPS-PRIMARY> 2.34
<EPS-DILUTED> 2.31
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS OF HUGHES SUPPLY, INC. AND RELATED STATEMENTS OF
INCOME AS OF AND FOR THE PERIODS ENDED OCTOBER 31, 1995, JULY 31, 1995, APRIL
30, 1995, JANUARY 27, 1995, AND OCTOBER 31, 1994. THIS SCHEDULE IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<CIK> 0000049029
<NAME> HUGHES SUPPLY, INC.
<MULTIPLIER> 1,000
<S> <C> <C> <C> <C> <C>
<PERIOD-TYPE> 9-MOS 6-MOS 3-MOS YEAR 9-MOS
<FISCAL-YEAR-END> JAN-26-1996 JAN-26-1996 JAN-26-1996 JAN-27-1995 JAN-27-1995
<PERIOD-END> OCT-31-1995 JUL-31-1995 APR-30-1995 JAN-27-1995 OCT-31-1994
<CASH> 1,346 3,010 1,843 3,485 2,085
<SECURITIES> 0 0 0 0 0
<RECEIVABLES> 159,210 153,830 154,027 136,949 126,937
<ALLOWANCES> 7,739 6,334 5,476 5,042 7,238
<INVENTORY> 121,213 126,595 129,037 122,159 108,204
<CURRENT-ASSETS> 286,684 290,439 293,883 276,023 238,028
<PP&E> 113,487 112,542 110,782 108,034 106,131
<DEPRECIATION> 56,275 55,515 54,732 53,416 51,838
<TOTAL-ASSETS> 369,942 370,706 373,538 346,116 302,890
<CURRENT-LIABILITIES> 110,323 105,438 118,733 103,229 86,329
<BONDS> 106,421 116,137 110,395 105,243 86,295
<COMMON> 6,774 6,812 6,814 6,614 6,614
0 0 0 0 0
0 0 0 0 0
<OTHER-SE> 144,577 140,577 135,956 129,490 122,303
<TOTAL-LIABILITY-AND-EQUITY> 369,942 370,706 373,538 346,116 302,890
<SALES> 820,337 536,253 253,886 875,459 650,819
<TOTAL-REVENUES> 820,337 536,253 253,886 875,459 650,819
<CGS> 654,310 427,797 202,220 699,132 521,630
<TOTAL-COSTS> 654,310 427,797 202,220 699,132 521,630
<OTHER-EXPENSES> 140,684 92,055 45,213 153,312 111,495
<LOSS-PROVISION> 2,434 1,246 587 1,381 2,081
<INTEREST-EXPENSE> 5,735 3,886 1,844 5,284 3,731
<INCOME-PRETAX> 20,728 13,409 4,958 19,198 14,108
<INCOME-TAX> 8,476 5,446 2,050 7,713 5,722
<INCOME-CONTINUING> 12,252 7,963 2,908 11,485 8,386
<DISCONTINUED> 0 0 0 0 0
<EXTRAORDINARY> 0 0 0 0 0
<CHANGES> 0 0 0 0 0
<NET-INCOME> 12,252 7,963 2,908 11,485 8,386
<EPS-PRIMARY> 1.79 1.17 .43 1.83 1.35
<EPS-DILUTED> 1.78 1.17 .43 1.81 1.33
</TABLE>
HUGHES SUPPLY, INC.
LOCATION OF FACILITIES
AS OF MARCH 6, 1996
NUMBER OF
STATE/TERRITORY CITY LOCATIONS
WHOLESALE BRANCHES
ALABAMA Birmingham 3
Dothan 2
Huntsville 3
Mobile 2
Montgomery 2
TOTAL ALABAMA 12
FLORIDA Auburndale 1
Bradenton 1
Cape Coral 1
Clearwater 1
Clermont 1
Daytona 2
Eaton Park 1
Ft. Lauderdale 1
Ft. Myers 3
Ft. Pierce 1
Gainesville 3
Inverness 1
Jacksonville 5
Kissimmee 1
Lady Lake 1
Lakeland 1
Leesburg 1
Longwood 1
Marianna 1
Melbourne 1
Miami 4
Mulberry 1
Naples 1
Ocala 1
Orange City 1
Orlando 6
Palm Beach 1
Panama City 2
Panama City Beach 1
Perry 1
Pompano Beach 3
Port Richey 1
St. Petersburg 2
Sarasota 3
Sebring 1
Tallahassee 3
Tampa 4
Tavares 1
Venice 1
West Palm Beach 4
Winter Haven 1
TOTAL FLORIDA 72
GEORGIA Albany 1
Alpharetta 1
Athens 1
Atlanta 3
Augusta 1
Austell 1
Brunswick 1
Columbus 1
Conyers 1
Dalton 1
Hartsfield 1
LaGrange 1
Macon 4
Marietta 2
McDonough 1
Moultrie 1
Savannah 3
Statesboro 1
Thomasville 1
Tifton 2
Valdosta 2
TOTAL GEORGIA 31
INDIANA Fort Wayne 1
Indianapolis 2
Muncie 1
TOTAL INDIANA 4
KENTUCKY Bowling Green 1
Glasgow 1
Louisville 2
TOTAL KENTUCKY 4
MARYLAND Capitol Heights 1
Waldorf 1
TOTAL MARYLAND 2
MISSISSIPPI Biloxi 1
Greenville 1
Greenwood 1
Gulfport 2
Hattiesburg 1
Jackson 1
Laurel 1
Meridian 1
Pascagoula 1
Tupelo 1
TOTAL MISSISSIPPI 11
NEW JERSEY South Plainfield 1
TOTAL NEW JERSEY 1
NORTH CAROLINA Charlotte 5
Durham 1
Elizabeth City 1
Fayetteville 1
Goldsboro 1
Greensboro 1
Henderson 1
Hickory 1
High Point 1
Kinston 1
Monroe 1
Pinehurst 1
Raleigh 2
Rocky Mount 1
Salisbury 1
Statesville 1
Troy 1
Wilmington 1
Winston Salem 1
Zebulon 1
TOTAL NORTH CAROLINA 25
OHIO Batavia 1
Brimfield 1
Cleveland 1
Columbus 1
Dayton 1
Elyria 1
Fairfield 1
Greenville 1
Hartville 1
Lima 1
Marion 1
Monroe 1
Toledo 1
Van Wert 1
TOTAL OHIO 14
PENNSYLVANIA Bedford 1
Monroeville 1
Shippenville 1
TOTAL PENNSYLVANIA 3
PUERTO RICO Carolina 1
TOTAL PUERTO RICO 1
SOUTH CAROLINA Aiken 1
Anderson 1
Bluffton 1
Charleston 1
Cheraw 1
Columbia 1
Florence 1
Greenville 2
Greer 2
Hilton Head 1
Lancaster 1
Myrtle Beach 1
North Charleston 1
West Columbia 2
TOTAL SOUTH CAROLINA 17
TENNESSEE Chattanooga 1
Clarksville 1
Cleveland 1
Cookeville 1
Jackson 1
Knoxville 2
Memphis 2
Nashville 2
TOTAL TENNESSEE 11
VIRGINA Arlington 1
Chantilly 1
Gainesville 1
La Crosse 1
Lynchburg 1
TOTAL VIRGINIA 5
TOTAL WHOLESALE BRANCHES 213
DISTRIBUTION CENTERS
FLORIDA Orlando 1
GEORGIA College Park 1
NORTH CAROLINA Henderson 1
Monroe 1
OHIO Greenville 1
TENNESSEE Nashville 1
TOTAL DISTRIBUTION CENTERS 6
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET OF HUGHES SUPPLY, INC. AND RELATED STATEMENT OF
INCOME AS OF AND FOR THE PERIOD ENDED JULY 31, 1994. THIS SCHEDULE
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<CIK> 0000049029
<NAME> HUGHES SUPPLY, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JAN-27-1995
<PERIOD-END> JUL-31-1994
<CASH> 2,362
<SECURITIES> 0
<RECEIVABLES> 123,974
<ALLOWANCES> 6,232
<INVENTORY> 114,025
<CURRENT-ASSETS> 242,954
<PP&E> 102,913
<DEPRECIATION> 49,624
<TOTAL-ASSETS> 306,159
<CURRENT-LIABILITIES> 85,323
<BONDS> 93,216
<COMMON> 6,614
0
0
<OTHER-SE> 119,720
<TOTAL-LIABILITY-AND-EQUITY> 306,159
<SALES> 422,611
<TOTAL-REVENUES> 422,611
<CGS> 338,271
<TOTAL-COSTS> 338,271
<OTHER-EXPENSES> 72,969
<LOSS-PROVISION> 1,509
<INTEREST-EXPENSE> 2,449
<INCOME-PRETAX> 8,871
<INCOME-TAX> 3,601
<INCOME-CONTINUING> 5,270
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,270
<EPS-PRIMARY> .87
<EPS-DILUTED> .84
</TABLE>
