U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period ended to
Commission File Number: 33-30123-A
GENERAL PARCEL SERVICE, INC.
(Exact name of small business issuer in its charter)
State of Florida 59-2576629
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8923 Western Way, Suite 22,
Jacksonville, FL 32256
(Address of principal executive offices)
(904) 363-0089
(Issuer's telephone number)
Check whether issuer (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities and 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
There were 3,758,671 shares of the Company's common stock
outstanding as of August 9, 1996.
<PAGE>
GENERAL PARCEL SERVICE, INC. AND SUBSIDIARY
FORM 10-QSB
INDEX
PART I. FINANCIAL INFORMATION Page Number
Item 1
- ------
Consolidated Balance Sheets as of
June 30, 1996 and December 31, 1995 . . . . 2
Consolidated Statements of Earnings
for the three months ended June 30, 1996
and 1995 and for the six months ended
June 30, 1996 and 1995 . . . . . . . . . . 3
Consolidated Statements of Cash Flows
for the three months ended June 30,
1996 and 1995 . . . . . . . . . . . . . . . 4
Notes to Consolidated Financial
Statements . . . . . . . . . . . . . . . . 5
Item 2
- ------
Management's Discussion and Analysis
of Financial Condition and Results
of Operations . . . . . . . . . . . . . . . 6
PART II. OTHER INFORMATION. . . . . . . . .12
Item 4
- ------
Submission of Matters to a
Vote of Security Holders
Item 6
- ------
Exhibits and Reports on Form 8-K
(A) Reports on Form 8-K
(B) Exhibits:
Exhibit 10, Material Contracts
Exhibit 27, Financial Data Schedule
<PAGE>
<TABLE>
GENERAL PARCEL SERVICE, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<CAPTION>
June 30, December 31,
1996 1995
-------------- --------------
(Unaudited)
ASSETS
Current assets:
<S> <C> <C>
Cash $ 8,589 $ 6,739
Accounts receivable
(net of allowance for doubtful
accounts of $7,546 and $7,846 at
June 30, 1996 and December 31,
1995 respectively) 2,077,848 2,068,975
Other current assets 406,606 380,090
------------- -------------
Total current assets 2,493,043 2,455,804
------------- -------------
Long term assets:
Equipment, at net book value 6,991,095 7,593,626
Goodwill 980,444 1,015,784
Other assets 187,251 187,251
------------- -------------
Total long term assets 8,158,790 8,796,661
------------- -------------
Total assets $ 10,651,833 $ 11,252,465
============= =============
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
<S> <C> <C>
Short term borrowings $ 1,562,689 $ 1,599,000
Current obligations under
capital leases 886,135 860,309
Current maturities of
long-term debt 333,540 518,842
Accounts payable 1,926,726 1,953,468
Accrued expenses and other
current liabilities 815,986 738,404
------------- -------------
Total current liabilities 5,525,076 5,670,023
------------- -------------
Long term liabilities:
Long-term obligations under
capital leases 1,296,853 1,605,802
Long-term debt 755,646 3,910,808
Convertible debentures 300,000 300,000
------------ ------------
Total long term liabilities 2,352,499 5,816,610
------------ ------------
Total liabilities 7,877,575 11,486,633
------------ ------------
Commitments and contingencies
Stockholders' equity (deficit):
Preferred stock, $.01 par value,
500,000 shares authorized,
280,000 issued and outstanding
at June 30, 1996, 100,000 issued
and outstanding at December 31,
1995, liquidation preference
$7,000,000. 2,800 1,000
Common stock, $.01 par value,
10,000,000 shares authorized,
3,758,671 shares issued and
outstanding at June 30, 1996
and December 31, 1995. 37,586 37,586
Additional paid-in capital 17,887,855 13,389,655
Deficit (15,153,983) (13,662,409)
------------- -------------
Total stockholders'
equity (deficit) 2,774,258 (234,168)
------------- -------------
Total liabilities and
stockholders' equity
(deficit) $ 10,651,833 $ 11,252,465
============= =============
</TABLE>
Read accompanying notes.
<PAGE>
<TABLE>
GENERAL PARCEL SERVICE, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
<CAPTION>
Three months ended June 30, Six months ended June 30,
1996 1995 1996 1995
------------- ------------- ------------ -------------
<S> <C> <C> <C> <C>
Revenue $ 5,600,322 $ 4,853,489 $ 11,383,993 $ 9,916,819
Operating expenses
Operations salaries
& benefits 2,990,557 2,800,797 6,048,689 5,337,489
Fuel 408,388 302,760 763,888 590,319
Equipment rental 20,359 15,800 49,449 24,499
Insurance 348,681 524,980 712,846 973,980
Tires & maintenance 221,061 182,803 421,075 356,988
Depreciation & amortization 418,833 438,065 833,112 848,698
Facilities expense 374,128 306,574 726,773 638,162
Terminal expense 51,684 79,308 105,594 135,362
Purchased transportation 95,835 66,556 193,993 120,282
Other operating costs 71,836 56,515 133,619 95,765
Selling and administrative
expense 1,306,064 940,458 2,369,594 1,652,306
----------- ----------- ----------- -----------
Total operating expense 6,307,426 5,714,616 12,358,632 10,773,850
----------- ----------- ----------- -----------
Operating income (loss) (707,104) (861,127) (974,639) (857,031)
Interest expense (135,155) (203,180) (341,935) (355,253)
----------- ----------- ----------- -----------
Net income (loss) (842,259) (1,064,307) (1,316,574) (1,212,284)
Preferred stock
dividend requirement (65,624) (43,750) (159,029) (87,500)
----------- ----------- ----------- -----------
Earnings available to
common shareholders $ (907,883) $ (1,108,057) $ (1,475,603) $ (1,299,784)
=========== =========== =========== ===========
Net Income (loss) per
common share (primary
and fully diluted) $ (0.24) $ (0.29) $ (0.39) $ (0.35)
=========== =========== =========== ===========
Weighted average
number of common
shares outstanding 3,758,671 3,758,671 3,758,671 3,758,671
=========== =========== =========== ==========
</TABLE>
Read accompanying notes.
<PAGE>
<TABLE>
GENERAL PARCEL SERVICE, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Increase (Decrease) in Cash
(Unaudited)
<CAPTION>
Six Months Ended June 30,
1996 1995
------------- -------------
<S> <C> <C>
Cash flows (used in) provided
by operating activities:
Net loss $ (1,316,574) $ (1,212,284)
------------ ------------
Adjustments to reconcile net loss to cash
(used in) provided by operating activities:
Loss on disposal of fixed assets 1,307 2,718
Depreciation and amortization 926,434 878,695
Changes in assets and liabilities:
Increase in accounts receivable (8,873) (238,760)
Decrease (increase) in other current assets (26,516) 48,008
Increase in other assets -- (5,326)
Increase in accounts payable 347,302 280,402
Increase (decrease) in accrued expenses 77,582 (28,764)
------------ ------------
Total adjustments 1,317,236 936,973
------------ ------------
Net cash (used in) provided
by operating activities 662 (275,311)
------------ ------------
Cash flows for investing activities:
Business combination -- (151,674)
Proceeds from disposal of equipment 4,500 --
Purchase of equipment (226,337) (473,573)
------------ ------------
Net cash used in
investing activities (221,837) (625,247)
------------ ------------
Cash flows from financing activities:
Proceeds from issuance of preferred stock 4,500,000 --
Dividends paid on preferred stock (175,000) (175,000)
Repayment of long-term debt (3,340,464) (346,801)
Increase in long-term debt -- 3,000,000
Principal payments under capital
lease obligations (351,156) (525,789)
Repayment of short-term debt (2,058,689) (2,500,000)
Increase in short-term borrowings 2,022,378 1,400,000
Increase (decrease) in bank overdraft (374,044) 48,333
------------ ------------
Net cash provided by
financing activities 223,025 900,743
------------ ------------
Increase (decrease) in cash and cash
equivalents 1,850 185
Cash and cash equivalents, beginning of period 6,739 5,575
------------ ------------
Cash and cash equivalents, end of period $ 8,589 $ 5,760
============ ============
Supplemental cash flow data
Cash paid during the period for interest $ 354,699 $ 319,825
============ ============
Supplemental schedule of noncash investing and
financing activities
Capital lease and notes payable obligations
incurred for new vehicles and equipment $ 68,033 $ 461,874
============ ============
Business combination
Fair value of assets acquired $ -- $ 1,408,670
Fair value of liabilities assumed -- (1,256,996)
------------ ------------
Net cash payments $ -- $ 151,674
============ ============
</TABLE>
Read accompanying notes
<PAGE>
GENERAL PARCEL SERVICE, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements
The information presented herein as of June 30, 1996, and for
the three months and six months ended June 30, 1996 and 1995, is
unaudited. The December 31, 1995, balance sheet data was
derived from audited financial statements, but does not include
all disclosures required by generally accepted accounting
principles.
1. Summary of Significant Accounting Policies
Management's Representation
- ---------------------------
In the opinion of management, all adjustments necessary for a
fair presentation of such consolidated financial statements are
reflected in the interim periods presented. Such adjustments
consisted of normal recurring items. Interim results are not
necessarily indicative of results for a full year.
The consolidated financial statements and notes are presented as
permitted by Form 10-QSB and do not contain certain information
included in the annual consolidated financial statements and
notes of General Parcel Service, Inc. (the "Company").
Net Loss per Common Share
- -------------------------
Net loss applicable to common share is based on the weighted
average number of shares outstanding during the periods
reported. Any assumption of conversion of common stock
equivalents, such as options and warrants, is anti-dilutive and
has not been considered in determining net loss per share or the
weighted average number of shares outstanding.
Preferred Stock
- ---------------
On February 28, 1996, the Board of Directors amended the
Articles of Incorporation to provide for 300,000 shares of Class
A, Series 2 Cumulative Preferred Stock ("Series 2 Preferred").
On March 4, 1996, 120,000 shares were sold for a total price of
$3,000,000 to an Affiliate of the Company's Chairman. Proceeds
from the sale were used to retire $3,000,000 of bank debt. On
June 25, 1996, 60,000 shares were sold at a total price of
$1,500,000 to the same Affiliate of the Company's Chairman.
Proceeds from the June 25, 1966 sale were used to retire
$500,000 of short term debt and to fund working capital
requirements. The Series 2 Preferred shares are non-voting and
generally provide for a conversion into common stock at a rate
of $2.50 per share, and provide for a cumulative dividend of
$1.75 per annum, paid quarterly. At June 30, 1996, the Company
had preferred stock dividends in arrears of $155,807.
<PAGE>
GENERAL PARCEL SERVICE, INC. AND SUBSIDIARY
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
The following discussion should be read in conjunction with the
Consolidated Financial Statements including the footnotes and is
qualified in its entirety by the foregoing and other more
detailed financial information appearing elsewhere herein.
Historical results of operations and the percentage
relationships among any amounts included in the Consolidated
Statements of Earnings, and any trends which may appear to be
inferable therefrom, should not be taken as being necessarily
indicative of trends in operations or results of operations for
any future periods.
Liquidity and Capital Resources
- -------------------------------
Except for the year ending December 31, 1993, the Company has
experienced negative annual operating cash flows since its
inception. Expansion of operations and operating losses since
inception have been funded from six major sources: 1) private
placements of restricted shares of common and preferred stock to
its principal shareholders, 2) proceeds from its initial public
offering of common stock in November, 1989, 3) installment loans
and leases from third party lenders collateralized by equipment
acquired to support business growth, 4) a bank line of credit
collateralized by accounts receivable and stock owned by a major
shareholder and his affiliates, 5) short term borrowings from
banks and shareholders, 6) debt issued and liabilities assumed
in connection with the acquisition of the assets of Transit
Express of Charlotte, Inc. ("TE").
As of June 30, 1996, the Company had raised net equity capital
of $8,145,052 from private placements of restricted common
shares, $6,917,489 from private placements of preferred stock,
$2,715,700 from its initial public offering of November 2, 1989,
and $150,000 from the sale of unrestricted common shares. When
combined with cumulative operating losses since inception of
$14,803,984 and $350,000 of dividends paid on preferred stock,
the Company's net stockholders' equity as of June 30, 1996, was
$2,774,258. The Company issued $4,500,000 of preferred stock on
March 5, 1996, but has issued no restricted common stock in 1996.
As of June 30, 1996, the Company was contractually obligated to
repay $4,834,863 of indebtedness to equipment lessors, banks and
other secured lenders and $300,000 to holders of its convertible
debentures. In addition, the Company owed $1,926,726 to
suppliers of goods and services necessary for the conduct of
ongoing business including amounts represented by issued and
outstanding checks, and had accrued salaries and other expenses
of $815,986 which were unpaid at June 30, 1996.
Cash provided by operations during the six months ended June 30,
1996 was $662 as compared to cash used in operations for the
first six months of 1995 of $275,311. The net cash provided by
operations resulted primarily from the non-cash expense of
depreciation and amortization, and an increase in accounts
payable and accrued expenses. These were partially offset by
the net loss, an increase in accounts receivable and a decrease
in other current assets. The Company's cash balance increased
by $1,850 during the first six months of 1996.
The Company decreased its borrowings under its bank lines of
credit by $3,036,311 during the first six months of 1996. The
Company repaid its $3,000,000 bank term loan and reduced amounts
borrowed under its revolving line of credit agreement by a net
amount of $36.311.
The revolving line of credit agreement provides for interest
payable monthly for advances of $1,000,000 or greater at the
lower interest of the thirty day LIBOR rate plus .75% or the
Bank's prime interest rate less .75% and for all other advances
at the Bank's prime interest rate less .75%. The revolving
credit agreement is collateralized by the Company's accounts
receivable and certain stock certificates pledged by the
Company's Chairman. As of December 31, 1995, the Company had
borrowed $1,599,000 against the line of credit and had
$1,101,000 of credit available. As of June 30, 1996, the
Company has borrowed $1,562,689 against the $2,750,000 line of
credit.
Management's estimates of cash requirements to fund operating
losses and debt service are substantial. All of these factors
raise the question as to whether the Company will continue to
operate as a going concern. While revenues continue to increase
and expense containment measures have been instituted,
management is nonetheless pursuing several strategies for
raising additional resources through debt or equity transactions.
Management believes, but can offer no assurances, that it can
improve operating performance and cash flows through the
following measures:
* A large portion of the Company's expenses since
inception have been related to efforts to develop
its marketing, distribution and service network. The
Company has developed extensive distribution networks in
Florida, Atlanta, Georgia, and Charlotte, North
Carolina. In January, 1996. the Company opened a terminal in
Greensboro, North Carolina to service existing customers in
the Greensboro, Winston Salem, Durham and Raleigh areas.
In June, 1996, the Company began an aggressive expansion into
South Carolina and areas no previously served in North
Carolina to fill the void created when another carrier ceased
operations. This carrier had serviced in the Carolinas many
of the customers that the Company serves in Florida and Georgia.
Management believes that the revenues which will be generated
by extending the Company's service area for present customers and
those additional customers it will attract will exceed the cost
of providing such service and will contribute to the absorption
of overhead. To service these new areas the Company has opened
new terminals in the North Carolina cities of Asheville,
Fayetteville, Raleigh and Wilmington, relocated to a larger
Charlotte, North Carolina terminal and opened new
terminals in the South Carolina cities of Charleston,
Columbia, Greenville and Florence.
* Management has reassessed the operating practices at
each of its terminals and has instituted a number of changes
directed towards cost containment including elimination of
unprofitable delivery routes. Route planning computer hardware
and software has been purchased to analyze and redesign the
routing structure of each city. The equipment went
operational in July and the city by city analysis has begun.
Management expects to be able to reduce costs through eliminating
routes.
Strict accountability over all costs is being implemented at all
locations through budgetary controls and improved reporting of
actual operating results to operations managers.
*The Board of Directors has engaged KPMG BayMark Capital
LLC ("BayMark") to render certain financial advisory and
investment banking services to the Company. Under the
terms of the engagement, BayMark will familiarize itself to the
extent it deems appropriate and feasible with the business,
operations, properties, financial condition and prospects
of the Company and will advise and assist the Company in
identifying and/or evaluating various strategic or financial
alternatives that may be available to the Company to
enhance shareholder value. Among the alternatives which may be
available to the Company are an acquisition of all or a
significant portion of the assets or equity securities
of another corporation or business entity; a sale of the
Company or significant portion of its equity securities,
assets or businesses to one or more third parties;
a recapitalization or restructuring of the Company;
repurchases by the Company of its common stock
or other securities; a public or private sale of additional
equity or debt securities of the Company; or such other
form of transaction that BayMark believes may be of possible
interest to the Company.
*Should the Company not obtain additional funding through
the efforts of BayMark and not be able to provide cash for
its operations to fund operations losses or debt service,
it will rely on the commitment of one of its major shareholders
to fund losses of the Company through December 31, 1996.
Financial Condition
- -------------------
As of June 30, 1996, the Company's working capital deficit
(current liabilities less current assets) was $3,032,033, which
was a decrease of $182,186 from the $3,214,219 working capital
deficit at December 31, 1995. Total current assets of
$2,493,043 included cash of $8,589, accounts receivable of
$2,077,848, prepaid insurance premiums and deposits of $54,229,
inventories of tires, parts, uniforms and supplies of $218,405,
other prepaid expenses of $52,010 and other assets of $81,963.
Current liabilities of $5,525,075 included current obligations
under leases and other lending agreements of $2,482,364, amounts
owed to trade creditors of $1,926,726, including amounts
represented by issued and outstanding checks, and other accrued
expenses of $815,986.
Total assets as of June 30, 1996, decreased by $600,632 (or
5.3%) during the six months ended June 30, 1996 to $10,651,833.
Accounts receivable increased by $8,873 (or 0.4%) during the six
months ended June 30, 1996 to $2,077,848. The number of weeks
sales in outstanding receivables was 4.7 at June 30, 1996,
compared to 5.2 at December 31, 1995. Other current assets of
$406,606 increased by $26,516 (or 7.0%).
The net book value of equipment decreased by $602,531 (or 7.9%)
to $6,991,095 during the six months ended June 30, 1996 as a
result of depreciation of $833,112 and disposals of $5,805
exceeding additions of $236,386. The additions included $68,033
for four new delivery vans, $37,056 for life-extending
equipment repairs, $32,428 for terminal equipment and $98,869
for computers and other office equipment.
Total liabilities of $7,877,575 decreased by $3,609,058 (or
31.4%) during the six months ended June 30, 1996. This resulted
primarily from a decrease in total bank and other debt by
$3,376,775 (or 56.0%) to $2,651,875, a decrease in accounts
payable by $26,742 (or 1.4%) to $1,926,726, an increase in
accrued expenses of $77,582 (or 10.5%) to $815,986 and a
decrease in obligations under capital leases of $283,123 (or
11.5%).
Capital lease obligations of $2,189,988 decreased during the six
months ended June 30, 1996 as a result of $351,156 of scheduled
principal payments in excess of $68,033 of new additions. The
additions to capitalized leases were for four new delivery vans.
Long term debt of $1,089,186 decreased $3,340,464 (or 75.4%) as
a result of repayment of the $3,000,000 term loan and $127,172
of scheduled principal payments. Short-term borrowings
decreased by $36,311 to $1,562,689 (or 2.3%) as a result of a
repayment of $1,500,000 of short term borrowings with proceeds
from the sale of preferred stock and net increases of
$1,463,689 to fund operations, service debt and pay lease
payments.
The Company's stockholders' equity increased during six months
ended June 30, 1996 by $3,008,426 to $2,774,258 at June 30,
1996, as a result of the sale of $4,500,000 of preferred stock
and was reduced by the net loss for the period and the payment
of a $175,000 dividend on the Company's preferred stock.
Results of Operations
- ---------------------
The Company's net loss for the six months ended June 30, 1995
was $1,316,574 compared to a net loss of $1,212,284 for the same
period of 1995. For the quarter ended June 30, 1996 the loss
was $842,259 compared to a net loss of $1,064,307 for the same
period of 1995. Revenue for the six months ended June 30, 1996, was
$11,383,993 representing an increase of $1,467,174 (or 14.8%)
over revenue for the same period of 1995. Revenue for the three
months ended June 30, 1996, was $5,600,322 representing an
increase of $746,833 (or 15.4%) from revenue for the same period
of 1995.
Total operating expenses (excluding interest expense) were
$12,358,632 for the first six months of 1996 and $6,307,426 for
the second quarter of 1996. For the first six months of 1996,
total operating expenses increased $1,584,782 (or 14.7%)
compared to those expenses for the first six months of 1995. For
the second quarter of 1996, total operating expenses were
$6,307,426, an increase of $592,810 (or 10.4%) over the second
quarter of 1995. The operating ratio (total operating expenses
as a percentage of revenue), was 108.6% for the six months
ended June 30, 1996 and for the six months ended June 30, 1995,
and 112.6% for the quarter ended June 30, 1996, compared to
117.7% for the quarter ended June 30, 1995.
Operating salaries and benefits at $6,048,689 increased by
$711,200 (or 13.3%) for the first six months of 1996, and were
53.1% of revenue compared to 53.8% for the first six months of
1995. For the second quarter of 1996, operating salaries and
benefits were $2,990,557, an increase of $189,760 (or 6.8%)
over those for the second quarter of 1995. Operating salaries
and benefits were 53.4% of revenue for the second quarter of 1996
compared to 57.7% for the second quarter of 1995.
Fuel costs at $763,888 increased by $173,569 from the first six
months of 1995 level of $590,319 and were 6.7% of revenue for
the six months ended June 30, 1996, compared to 6.0% for the
first six months of 1995. For the second quarter of 1995, fuel
costs were $302,760. They increased in the quarter ended June
30, 1996, $105,628 from the second quarter 1995 level of 6.2% of
revenue to reach 7.3% of revenue. These increases resulted
primarily from increases in the price of fuel.
Insurance costs decreased by $261,134 to $712,846 (or 6.3%) of
revenue in the first six months of 1996 as compared to $973,980 (or
9.8%) of the first six months of 1995 revenue. Insurance costs
decreased by $176,299 to $348,681 or (6.3%) of revenue in the second
quarter of 1996 as compared to $524,980 (or 10.8%) of second
quarter 1995 revenue.
Tires and maintenance expense at $421,075 increased by $64,087
from the first six months 1995 level and represented 3.7% of
revenue compared to 3.6% in the first six months of 1995. Tires
and maintenance expense at $221,061 increased by $38,258 from
the second quarter 1995 level and represented 3.9% of revenue in
the second quarter of 1996, up from 3.8% for the same 1995
quarter.
The fixed components of operating cost (depreciation and
amortization, facilities and terminal expense) decreased in the
first six months of 1996 over the first six months of 1995.
Depreciation and amortization was $833,112, a decrease of
$15,586 (or 1.8%) from the first six months of 1995, and was
7.3% of revenue in the first six months of 1996 as compared to
8.6% in the same period of 1995. Depreciation and amortization
was $418,833, a decrease of $19,232 (or 4.4%) from the second
quarter of 1995, and was 7.5% of revenue in the second quarter
of 1996 as compared to 9.0% in the same period of 1995.
Facilities expense (rent plus utilities) at $726,773 increased
by $88,611 (or 13.9%) and was 6.4% of revenue in the first six
months of both 1996 and 1995. Facilities expense (rent plus
utilities) at $374,128 increased by $67,554 (or 22.0%) and was
6.7% of second quarter 1996 revenue versus 6.3% in the second
quarter of 1995. Terminal expense decreased by $28,678 and
$27,624 to $105,574 and $51,684 for the six months and quarter
ended June 30, 1995.
Purchased transportation, which includes amounts paid to
trucking companies to bring packages from customers' distribution
points outside the Company's geographical operating area to the
Company's terminals for delivery has increased to $193,993 and
$95,835 for the six months and quarter ended June 30, 1996, from
$120,282 for the six months ended June 30, 1995 and $66,556 for
the quarter ended June 30, 1995.
Selling and administrative expense at $2,369,574 was 43.4%
higher than the first six months 1995 level and increased as a
percentage of revenue from 16.7% in the 1995 first six months to
20.8% in the 1996 first six months. For the second quarter of
1996, selling and administrative expense were $1,306,064, an
increase of $385,606 (or 38.9%) over those for the second
quarter 1995 and increased as a percentage of revenue from 19.4%
in the 1995 second quarter to 23.3% in the 1996 second quarter.
The increases relate primarily to additional personnel costs,
legal expenses associated with the UPS litigation and additional
taxes and licenses.
The Company's operating loss for the six months ended June 30,
1996 was $974,639 compared to an operating loss of $857,031 for
the six months ended June 30, 1995. Its operating loss for the
quarter ended June 30, 1996 was $707,104 compared to an
operating loss of $861,127 for the quarter ended June 30, 1995.
Interest expense for the first six months of 1996 was $341,935,
which was a decrease of $13,318 from the interest expense for
the first six months of 1995. Interest expense for the second
quarter of 1996 was $135,155. This amount was $68,025 below the
interest expense for the quarter ended June 30, 1995.
<PAGE>
GENERAL PARCEL SERVICE, INC. AND SUBSIDIARY
Part II - Other Information
Item 4. Submission of Matters to a Vote of Security Holders
At its Annual Meeting on June 6, 1996, the Company's
Shareholders:
a) ratified the appointment by the Board of Directors of
Grenadier, Collins, Mencke & Howard, LLP as independent
public accountants for the fiscal year ending
December 31, 1996, and
b) elected seven directors as follows:
T. Wayne Davis
Chairman of the Board of Directors
E. Hoke Smith
Director, President and Chief Executive Officer
J. Ray Gatlin
Director
Drue B. Linton
Director
Steven C. Koegler
Director, Legal Counsel
Terry Coleman
Director
Gayle Smith
Director, Executive Vice President and
Chief Operating Officer
Item 6. Exhibits and Reports on Form 8-K
Reports on Form 8-k:
The Company filed a Form 8-K dated June 25, 1996,
reporting that on June 25, 1996 an affiliate of the
Chairman of the Board of the Company purchased
$1,500,000 of the Class A, Series 2 Cumulative Convertible
Preferred Stock of the corporation.
Exhibits:
Exhibit 10.1 - Lease Agreement governing GPS's terminal in
Columbia, South Carolina dated May 31, 1996 between GPS and
Angor.a Columbia Enterprises. .
Exhibit 10.2 - Assignment of Lease Agreement governing GPS's
terminal in Greensboro, North Carolina dated June 13, 1996
between GPS, ABF Freight System, Inc., Bob G. Gibson and Defco Company.
Exhibit 10.3 - Lease Agreement governing GPS's terminal in
Greenville, South Carolina dated June 20, 1996 between GPS
and Real Estate Partners.
Exhibit 10.4 - Lease Agreement governing GPS's terminal in
Ashville, North Carolina dated July 8, 1996 between GPS and
J. C. Swicegood, Jr.
.
Exhibit 10.5 - Lease Agreement governing GPS's terminal in
Fayetteville, North Carolina dated July 1, 1996 between GPS
and Eugene and Jean G. Hair.
Exhibit 10.6 - Termination of Lease Agreement governing GPS's
terminal in Charlotte, North Carolina dated June 24, 1996
between GPS and Lincoln National Life Insurance Company.
Exhibit 10.7 - Lease Agreement governing GPS's terminal in
Charlotte, North Carolina dated July 30, 1996 between GPS
and Lincoln National Life Insurance Company.
Exhibit 10.8 - Lease Agreement governing GPS's terminal in
Charleston, South Carolina dated July 9, 1996 between GPS
and J. P. Gaillard, ET AL.
Exhibit 10.9 - Lease Agreement governing GPS's terminal in
Raleigh, North Carolina dated July 9, 1996 between GPS and
Parker-Raleigh Development I, Limited Partnership.
Exhibit 27 - Financial Data Schedule
Signatures
Pursuant to the requirements 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.
General Parcel Service, Inc.
Date: August 15, 1996
By (Signed)
- ------------------
E. Hoke Smith, Jr.
President and Chief Executive Officer
By: (Signed)
- ------------------
Wayne N. Nellums
Vice President, Chief Financial Officer
Exhibit 10.1
COMMERCIAL LEASE
(Net Lease 11)
PARTIES A-PARTIES:
THIS LEASE made and entered into this 31 st of May, 1996, by and
between Angora Columbia Enterprises, a corporation, having an
office at c/o Wilson/Kibler, Inc., P. 0, Box 11312, Columbia,
South Carolina 29211, hereinafter called "Landlord", and General
Parcel Service, having an office at 2155 W. Landstreet Road,
Orlando, Florida 32824, hereinafter called "Tenant".
WITNESSETH
In consideration of the covenants and agreements of the
respective parties herein contained, the parties
hereto, for themselves, their heirs, successors, distributees,
executors, administrators, legal representatives and permitted
assigns, do hereby agree as follows:
PREMISES B- DEMISED PREMISES:
Landlord by these presents does hereby demise and let unto
Tenant, and Tenant hereby leases and bites from Landlord, all
those certain premises, together with the buildings and other
improvements thereon, for the term and upon the rental and the
covenants and agreements of the respective parties herein set
forth. Said premises are situate, lying and being in the State
of South Carolina, County of Richland, City of Columbia,
(hereinafter the "Demised Premises"), and more fully described
as follows:
The rear left hand portion of the building located at 500
Rivermont Drive, Columbia, South Carolina, containing
approximately 6,600 square feet of warehouse
TERM C- TERM AND DELIVERY OF PREMISES:
The initial term of this lease shall commence on the lst of
July, 1996, (the commencement date) and shall end at noon on the
30th of June, 1999.
The lease term shall automatically renew on a month-to-month
basis under the ten-ns and conditions hereof except rent which
shall be one and one half times the prior month's rent, unless
notice is given by either party thirty (30) days prior to the
expiration of this term.
RENT D- RENT:
1. Rent: Tenant covenants and agrees to pay as rental to
Landlord the annual sum of Twenty Six Thousand Four Hundred and
00/100 ($26,400.00) Dollars, said sum to be in lawful money of
the United States, payable in equal monthly installments of Two
Thousand Two Hundred and 00/100 ($2,200.00) Dollars. Said
rental shall be payable monthly in advance to the office of
Wilson/Kibler, Inc., Agents for Landlord. Rent is due on the
first day of each month and shall not be withheld for any reason
whatsoever. In the event Tenant shall fail to pay each rental
on the due date, a late charge of two (21%) percent of the
monthly rental, compounded monthly with a minimum of Twenty Five
and No/100 ($25.00) Dollars per month, shall be added to the
rental and paid to Landlord for each such late payment, and the
same shall be treated as additional rent.
2. Rental Adjustment: The annual rent shall be increased during
the original and any extension or renewal term hereof in direct
proportion to the percentage increase in the level of the
Consumer Price Index, All Urban Consumer, U.S. City Average, All
Items (1982-84 = 100) published monthly by the United States
Department of Labor Statistics (hereinafter "index"), or the
successor or substitute index therefor, as published during the
month preceding the month just prior to the commencement of the
term hereof (hereinafter "base month"). The level of the index
as published during the next to last month of the first year (or
subsequent year, if appropriate) of the term hereof shall be
compared with the level of the index as published during the
base month, and if such comparison evidences an increase in the
index the annual rental for the subject lease year shall be
increased by the percentage increase in the index and shall be
paid in a lump sum at the same time as the monthly rental for
the first month of the succeeding lease year of the term hereof.
The monthly rental for the succeeding lease year of the term
hereof shall be increased by an amount equal to one-twelfth
(1/12) of the lump sum increase in the annual rental for the
subject lease year over the above written annual rent. If there
shall be no subsequent lease year, the lump sum increase for the
subject lease year shall be paid at the same time as the final
month's rental. In no event shall the rental be reduced below
the above written annual rental.
Example: If the lease term commences on May 1, 1988, the base
month is March, 1988. To calculate any increase for the first
year, the level of the index as published during February, 1989
(say 260) is compared with the level of the index as published
during March, 1988 (say 240). The increase of 20 (260 - 240 =
20) equals an increase of 8 1/3% (20 240 = .0833), thus the
annual rental (say $2,000.00) for the subject year (the first
year) would be increased by $166.60 [(.0833) x ($2,000.00) =
$166.60)]. This lump sum increase would be payable with the
monthly rental for May, 1989, if the term is for more than one
year, or with the monthly rental for April, 1989, if the term is
only one year. The monthly rental for the lease year commencing
May, 1989, if applicable, would be increased by $13.88 ($166.60
@ 12 = $13.88).
CONDITIONS E- COVENANTS AND CONDITIONS OF LEASE:
This Lease is made on the following covenants and conditions
which are expressly agreed to by Landlord and Tenant:
1. Late Delivery Clause: It is further agreed and understood
that if Landlord is unable to deliver possession of the demised
premises to the Tenant at the commencement of the term of this
Lease because of the retention of possession thereof by other
parties than Landlord, or because Landlord is unable to get the
demised premises ready for occupancy by Tenant, if such is
required of Landlord hereunder, then Landlord shall not be
liable to Tenant for damages and this Lease shall not terminate,
provided however, that Tenant shall have no obligation to pay
hereunder until possession of the Demised Premises is delivered
to Tenant. Landlord shall use all reasonable diligence to
deliver possession of the Demised Premises to Tenant at the
commencement of the within term.
It is anticipated that possession may be had on July 1, 1996,
however, if for any reason Landlord fails to give possession of
the Demised Premises on that date, then this Lease and payment
of rent will commence as of the day possession is given with the
further understanding that possession must be had by July 31,
1996, or Tenant may terminate this Lease by written notice prior
to the Landlord tendering possession of the Demised Premises to
the Tenant. If the term of this Lease shall commence on a day
other than the first day of a calendar month, rental shall be
paid for the portion of the month in proportion to the monthly
rental rates as herein provided and the term provided for in
this Lease shall be extended so as to cause the expiration of
the term to be on the last day of the last month of the term.
2. Authorized Use: Tenant agrees not to abandon or vacate the
Demised Premises and shall use the Demised Premises for the
following purpose, and for no other purpose whatsoever, without
the written consent of Landlord at Landlord's sole discretion
first had and obtained:
Parcel and letter handling and distribution
Tenant shall use and occupy the Demised Premises in a careful,
safe, and proper manner and shall keep the Demised Premises in a
clean and safe condition in accordance with this lease and
State, Federal, and local laws, ordinances, and regulations.
Tenant will not permit or suffer anything to be done nor keep
anything in or about the Demised Premises which would render the
insurance thereon void or voidable or cause cancellation.
Tenant will not keep, use or sell, or allow to be kept, used or
sold in or about the Demised Premises, any article or material
which is prohibited by law or by standard fire insurance
policies of the kind customarily in force with respect to
premises of the same general type as those covered by this
Lease, nor will Tenant allow anything to be stored that will
create any problem or controversy by SCDHEC Agency. If Tenant
does store goods that are or become controversial, Tenant will
clean Demised Premises to the satisfaction of an environmental
engineer so that a clean letter can be issued by said engineer.
3. Insurance:
a. Landlord agrees to keep the premises fully insured (appraised
value) against all perils covered under a normal fire and
extended coverage insurance policy including loss of rents;
however, Tenant shall, upon demand, reimburse Landlord for the
cost of the premium for such insurance policy. Such payment
shall be made by Tenant to Landlord not later than thirty (30)
days following the date which Landlord notifies Tenant in
writing.
b. If the Demised Premises or any part thereof shall be damaged
or destroyed by fire or other casualty, Landlord shall promptly
repair all such damage and restore the demised premises without
expense to Tenant, subject to delays due to adjustment of
insurance claims, strikes and other causes
2
beyond Landlord's control. If such damage or destruction shall
render the premises untenantable in whole or in part, the rent
shall be abated wholly or proportionately as the case may be
until the damage shall be repaired and the premises restored.
If the damage or destruction shall be so extensive as to require
the substantial rebuilding (i.e.: expenditure of fifty (50%)
percent or more of the replacement cost) of the building or
buildings on the Demised Premises, Landlord or Tenant may elect
to terminate this Lease by written notice to the other given
within thirty (30) days after the occurrence of such damage or
destruction.
c. Landlord and Tenant hereby release each other from liability
for loss or damage occurring on or to the leased premises or the
premises of which they are a part or to the contents of either
thereof, caused by fire or other hazards ordinarily covered by
fire and extended coverage insurance policies and each waives
all rights of recovery against the other for such loss or
damage. Willful misconduct lawfully attributable to either
party, whether in whole or in part a contributing cause of the
casualty giving rise to the loss or damage, shall not be excused
under the foregoing release and waiver.
d. Tenant agrees to indemnify and hold Landlord harmless of and
from any and all claims of any kind or nature arising from
Tenant's use of the Demised Premises during the term hereof, and
Tenant hereby waives all claims against Landlord for damage to
goods, wares, or merchandise or for injury to persons in and
upon the premises from any cause whatsoever, except such as
might result from the negligence of Landlord or Landlord's
representatives or from failure of Landlord to perform its
obligation hereunder within a reasonable time after notice in
writing by Tenant requiring such performance by Landlord.
Tenant shall at all times during the term hereof keep in effect
responsible companies liability insurance in the names of and
for the benefit of Tenant and Landlord with limits as follows:
Bodily Injury: $1,000,000.00 Single Limit
Property Damage: $100,000.00
e. Tenant will not permit said Demised Premises to be used for
any purpose which would render the insurance thereon void or
cause cancellation thereof Tenant will not keep, use or sell, or
allow to be kept, used or sold in or about the leased premises,
any article or material which is prohibited by law or by
standard fire insurance policies of the kind customarily in
force with respect to premises of the same general type as those
covered by this Lease.
Such insurance may, at Tenant's election, be carried under any
general blanket coverage of Tenant. A renewal policy shall be
procured not less than ten (10) days prior to the expiration of
any policy. Each original policy or a certified copy thereof or
a satisfactory certificate of the insurer evidencing insurance
carried with proof of payment of the premium shall be deposited
with Landlord. Tenant shall have the right to settle and adjust
all liability claims and all claims against the insuring
companies, but without subjecting Landlord to any liability or
obligation.
4. Condition of the Demised Premises: Tenant has inspected and
accepts the Demised Premises in the same condition they are in
at the time of commencement of the term of this Lease. Tenant
will at its cost and expense make any alterations and
improvements in or to the Demised Premises which may be required
by reason of any Federal, State, or local law, ordinance, or
regulation.
5. Repair and Care of Building by Tenant: Tenant shall,
throughout the initial term of this lease and any renewals
thereof at its own expense maintain in good order and repair the
leased premises, including the building and other improvements
located thereon, except those repairs expressly required to be
made by Landlord. Such repairs by Tenant shall include as
applicable but not limited to, repairs to electrical and
plumbing systems and fixtures, air-conditioning, heating and
ventilation equipment systems (as outlined herein) loading
doors, paved parking areas and drives, mowing of grass and care
of shrubs. In the event the property is occupied by more than
one Tenant, costs for all care of common areas will be pro-rated
among Tenants based on square footage leased and/or occupied.
Tenant shall at its expense contract with a reputable firm for
periodic servicing of the heating, air-conditioning and
ventilation systems as recommended by the manufacturer of such
equipment and shall keep on file with Landlord or its agent a
copy of said contract or other substantial proof of such
servicing. Tenant shall be responsible for all repairs to
heating, air-conditioning, and ventilating equipment including
parts and labor, including repair to major components and
replacement of major components. Tenant shall also maintain
pest control (including termite) inspection and treatment of the
premises as required. Tenant agrees to return said premises to
Landlord at the expiration or prior termination of this lease in
as good condition and repair as when received, natural wear and
tear, damage by storm, fire, lightning, or other natural
casualty excepted.
6. Repair and Care of Building by Landlord: Landlord shall keep
and maintain the foundations, roof and
3
structural portions of the exterior walls of the premises
(exclusive of all glass and exterior doors) in good condition
and repair, except for any repairs required thereto by reason of
the acts of the Tenant, its employees, agents, invitees,
licensees, or contractors. Tenant shall promptly report in
writing to Landlord any defective condition which Landlord is
required to repair or replace, and failure to report such
defects makes Tenant responsible to Landlord for any liability,
costs or attorney's fees incurred by Landlord by reason of such
defect. Landlord shall not be obligated to make any repair or
replacement required of it until notice in writing from Tenant
of need for same. Landlord shall have reasonable time in which
to make such repair or replacement, but reserves the right to
inspect the premises during reasonable business hours and may
subsequently require Tenant, by written notice, to make any such
repairs necessary, and in a good workmanship like manner, for
proper and reasonable upkeep of the premises as agreed in
Paragraph 4 of this Lease. If said required work is not
completed within thirty (30) days of said notice, Landlord may
contract with any firm of his choice and have said work
completed, the cost of which will be considered as additional
rent and will be billed to Tenant and payable immediately.
7. Alteration of Demised Premises and Installation of Fixtures
and Other Appurtenances: Tenant may, with consent of Landlord,
at Landlord's sole discretion, but at Tenant's own cost and
expense in a good, workmanlike manner and in accordance with
applicable laws and building codes, make such alterations and
repairs in the Demised Premises as Tenant may require for the
conduct of its business without, however, materially altering
the basic character of the Demised premises, or weakening any
structure on the Demised Premises. Tenant shall have the right,
without the permission of Landlord, to erect, at Tenant's sole
cost and expense, such temporary partitions, including office
partitions, as may be necessary to facilitate the handling of
Tenant's business and to install electrical fixtures, additional
lights and wiring and other trade appliances. Any alterations
or improvements to the Demised Premises, including but not
limited to partitions, all electrical fixtures, lights and
wiring, shall at the option of Landlord, become the property of
Landlord, at the expiration or sooner termination of this Lease.
Should Landlord request Tenant to remove all or any part of the
above-mentioned items, Tenant shall do so prior to the
expiration of this Lease and repair the premises as described
below. Temporary shelves, bins and machinery installed by
Tenant shall remain the property of Tenant and may be removed by
Tenant at any time; provided, however, that all covenants,
including rent, due hereunder to Landlord shall have been
complied with and paid. At the expiration or sooner termination
of this Lease, or any renewals or extensions thereof, Tenant
shall remove said shelves, bins and machinery, and repair, in
good and workmanlike manner, all damage done to the Demised
Premises by such removal. Tenant shall not exercise the right
and privilege granted by this Paragraph 7 in such a manner as to
damage or affect the structural qualities of the Demised
Premises or the buildings, of which it is a part, if applicable.
Before any work is begun, Tenant agrees to furnish Landlord
with holdharmless agreements from all contractors protecting
against mechanics liens.
8. Payment of Taxes and Other Assessments: Landlord shall pay
annually all real estate taxes on the described premises.
However, Tenant shall upon demand, reimburse Landlord for all
taxes and other assessments assessed or levied against the
premises. Such payment shall be made by Tenant to Landlord not
later than thirty (30) days following the date on which Landlord
provides Tenant with written evidence of such taxes or
assessments. If the final year of the Lease Term fails to
coincide with the tax year, then any tax during which term ends
shall be reduced by the pro-rata part of such tax beyond the
Lease Term. For the purpose of this covenant, it is agreed that
the Premises hereunder contains 6,600 square feet and the total
area contains 59,560 square feet. Tenant's Pro-Rata Share is
eleven (11%) percent.
In the event that any documentary stamp tax, or tax levied on
the rental, leasing or letting of the premises whether local,
state, or federal, is required to be paid due to the execution
hereof, the cost thereof shall be home by the Tenant.
9. Subordination of Lease: Tenant's rights under this Lease
shall remain subordinate to any bona fide mortgage or deed to
secure debt which is now, or may hereafter be placed, upon the
Demised Premises by Landlord. Tenant shall, if requested,
execute and deliver a subordination agreement.
10. Condemnation. If the whole of the Demised Premises shall be
taken by any public authority under the power of eminent domain,
this Lease shall terminate as of the day possession shall be
taken by such public authority, and Tenant shall pay all rental
and other sums due hereunder up to that date with an appropriate
refund by Landlord of such amounts thereof as shall have been
paid in advance for a period subsequent to the date of the
taking. If twenty-five (25%) percent or less of the gross
leasable area of the Demised Premises shall be taken, this Lease
shall terminate only with respect to the part so taken as of the
day possession shall be taken by such public authority, and
Tenant shall pay all rental and other sums due hereunder up to
that day within appropriate refund by Landlord of such rents as
may have been paid in advance for a period subsequent to the
date of the taking, and thereafter, the rent shall be equitably
adjusted, and Landlord shall at its expense make all necessary
repairs or alterations to the basic building and exterior work
so as to constitute the remainder of the Demised Premises a
complete architectural unit. If more than twenty-five (25%)
percent of the gross leasable area of the demised premises shall
be so taken, then this Lease shall terminate with respect to the
part so taken from the date possession shall be so taken by such
public authority, and Tenant shall pay all rental and other sums
due hereunder up to that date with an
4
appropriate refund by Landlord of such amounts thereof as may
have been paid in advance for a period subsequent to the date of
taking, and either party shall have the right to terminate this
Lease upon notice in writing within sixty (60) days after taking
of possession. In the event that Tenant remains in possession,
and if Landlord does not so terminate, all of the terms herein
provided shall continue in effect except that the rent shall be
equitably abated, and Landlord shall make all necessary repairs
or alterations to the basic building and exterior work so as to
constitute the remaining demised premises a complete
architectural unit. In the event Landlord is obligated to
restore the demised premises to a complete architectural unit,
as above provided, such work shall not exceed the scope of work
to be done by Landlord in constructing the demised premises, nor
shall Landlord be required to spend for such work an amount in
excess of the amount received by Landlord as damages for the
part of the demised premises so taken, less any amount paid to
Landlord's mortgagee from such award. The entire compensation
award, including but not limited to, all damages or compensation
for diminution in value of the leasehold, reversion, and fee,
shall belong to the Landlord. Tenant shall have the right to
claim and recover from the condemning authority, but not from
the Landlord, such compensation as may be separately awarded or
recoverable by the Tenant in Tenant's own right on account of
damage to Tenant's business by reason of the taking and for or
on account of any cost or loss to which Tenant might be put in
removing Tenant's merchandise, furniture, fixtures, improvements
and equipment.
11. Erection and Removal of Signs: Tenant may place suitable
signs on demised premises for the purpose of indicating the
nature of the business carried on by Tenant in said demised
premises; provided, however, that such signs shall be in keeping
with other signs in the district where the demised premises are
located. Tenant agrees to exonerate, save harmless, protect and
indemnify Landlord from and against any and all losses, damages,
claims, suits, or actions and all costs and expenses including
attorney's fees, in connection therewith, arising from any
damage or injury to persons or property caused by an erection
and maintenance of such signs or parts thereof, and insurance
coverage for such signs shall be included in the public
liability policy which Tenant is required to furnish. The
location, design, size and construction of such signs shall be
approved by Landlord at Landlord's sole discretion, prior to the
erection, and shall not damage the demised premises in any
manner. At the termination of this Lease, Landlord may require
that Tenant remove its signs, and any damage to the demised
premises caused by removal shall be promptly repaired by Tenant
at Tenant's own cost and expense.
12. Glass Breakage and Vandalism: Tenant agree to immediately
replace broken or damaged glass with glass of comparable quality
and characteristics which meet appropriate agency building code
requirements, excepting breakage covered under Landlord's normal
fire and extended coverage insurance policy. Tenant shall make
any repairs or replacements caused by vandalism to the demised
premises or any part thereof, if said damage is not covered by
Landlord's insurance.
13. Right of Entry by Landlord: Tenant at any time during this
Lease term shall permit inspection of the demised premises
during reasonable business hours by Landlord or Landlord's
agents or representatives for the purpose of ascertaining the
condition of the demised premises, to exhibit the same to
prospective purchasers, mortgagees, and tenants, and in order
that Landlord may make such repairs as may be required to be
made by Landlord under the terms of this Lease and/or to
adjacent areas. Sixty (60) days prior to the expiration of this
Lease, Landlord may post suitable notice on the demised premises
that the same are "For Rent", which notice shall not be removed,
obliterated, or hidden by Tenant. Landlord may not, however,
thereby unnecessarily interfere with the use of demised premises
by Tenant. The exercise of such right of entry shall not be
deemed an eviction or disturbance of Tenant nor will Tenant be
allowed any abatement of rent for inconvenience caused thereby.
14. Payment of Utilities: Tenant shall contract for and pay all
charges for sewerage, water, gas, electricity and other public
utilities used on the demised premises, including all
replacement of light bulbs, tubes, ballasts, and starters.
Landlord may pay any delinquent bills incurred by Tenant during
the lease term which bills may create a lien on the demised
premises and shall upon demand be immediately reimbursed by
Tenant. Said payments shall be treated as additional rental
even though the lease term may have expired.
15. Assignment and Subletting: Neither this Lease nor any
interest herein may be assigned by Tenant voluntarily or
involuntarily, by operation of law, or otherwise, and neither
all nor any part of the demised premises shall be sublet by
Tenant without the written consent of Landlord, at Landlord's
sole discretion, first had and obtained. In the event this
Lease or any interest herein is assigned or the demised premises
or any part thereof is sublet, whether with or without
Landlord's consent, Tenant shall remain fully liable under all
terms, covenants, and conditions of this Lease. In no event
will any provision herein stated to renew, extend, or purchase
be available to any assignee or sub-tenant. Any consent by
Landlord to any assignment or subletting shall not constitute a
waiver of the necessity for such consent to any subsequent
assignment or subletting.
Tenant hereby agrees to employ Wilson/Kibler, Inc. to do any and
all assignments of this Lease and all subletting of the demised
premises and will pay Wilson/Kibler, Inc. based on their then
published commission schedule.
16. Damage or Destruction: If the building on the demised
premises, or any part thereof, shall be damaged or destroyed by
fire or other casualty, Landlord shall promptly repair all such
damage and restore the said demised premises without expense to
Tenant, subject to delays due to adjustment of insurance claims,
strikes, and other causes beyond Landlord's control. If such
damage or destruction shall render the said building untenable
in whole or in part, the rent shall be abated wholly or
proportionately as the case may be until the damage shall be
repaired and the demised premises restored. If the damage or
destruction shall be so extensive as to require the substantial
rebuilding (i.e., expenditure of fifty percent (50%) or more of
the replacement cost) of the said demised premises, or the
damage is due to a peril not covered by Landlord's insurance, or
the damage occurs within the last three (3) years of the term of
this Lease, Landlord or Tenant may elect to terminate this Lease
by written notice to the other given within thirty (30) days
after the occurrence of such damage or destruction. In no event
shall Landlord be required to repair or replace Tenant's
stock-in-trade, trade fixtures, furniture, furnishings, special
equipment, or other items of construction and personal property,
nor to expend a sum to restore the demised premises in excess of
that received by the Landlord from insurance proceeds, less any
amount paid to Landlord's mortgagee from such insurance proceeds.
Landlord and Tenant hereby release each other from liability for
loss or damage occurring on or to the demised premises or the
premises of which they are a part or to the contents of either
thereof, caused by fire or other hazards ordinarily covered by
fire or other hazards ordinarily covered by fire and extended
coverage insurance policies and each waives all rights of
recovery against the other for such loss or damage. Willful
misconduct lawfully attributable to either party, whether in
whole or in part a contributing cause of the casualty giving
rise to the loss or damage, shall not be excused under the
foregoing release and waiver.
17. Surrender of Demised Premises: Tenant agrees to deliver all
keys and to surrender the demised premises at the expiration, or
sooner termination, of this Lease, or any extension or renewal
thereof, broom-clean in the same condition as when said demised
premises were delivered to Tenant, or as altered, pursuant to
the provisions of this Lease, ordinary wear, tear and damage by
the elements excepted, and Tenant shall remove all of its
property. Tenant agrees to pay a reasonable cleaning charge
should it be necessary for Landlord to restore or cause to be
restored the demised premises to the same condition as when said
demised premises were delivered to Tenant.
18. Holdover: Should Tenant or any party claiming under Tenant
remain in possession of the demised premises or any part thereof
after the expiration of the term of this Lease, such holding
over shall, unless otherwise agreed in writing, constitute a
month-to-month tenancy only, subject to all of the terms and
conditions hereof, and Tenant shall pay as monthly rental an
amount equal to one and one half times the rent to be paid for
the last month of the term hereof. Tenant agrees to give
Landlord thirty (30) days prior written notice of intent to
vacate premises.
19. Quiet Enjoyment: If and so long as Tenant pays the rents
reserved by this Lease and performs and observes all the
covenants and provisions hereof, Tenant shall enjoy the demised
premises, subject, however, to the terms of this Lease, without
any manner of let or hindrance from Landlord or any person or
persons lawfully claiming the demised premises.
20. Waiver of Covenants: No waiver of any condition or legal
right or remedy shall be implied by the failure of the Landlord
to declare a forfeiture, or for any other reason and no waiver
of any conditions or covenants shall be valid unless it be in
writing signed by Landlord. No waiver of any condition shall be
claimed or pleaded to excuse a future breach of the same
condition or covenant.
21. Default by Tenant: This Lease is made upon the condition
that the Tenant shall punctually and faithfully perform all of
the covenants and agreements by it to be performed as herein set
forth, and if any of the following events or default shall
occur, to wit:
(a) Any installments of rent, additional rent, taxes, or any
other sums required to be paid by Tenant hereunder, or any part
thereof, shall at any time be in arrears and unpaid for five (5)
days after written demand therefor, or
(b) There be any default on the part of Tenant in the observance
or performance of any of the other covenants, agreements, or
conditions of this Lease on the part of Tenant to be kept and
performed, and said default shall continue for a period of
fifteen (15) days after written notice thereof from Landlord to
Tenant (unless such default cannot reasonably be cured within
fifteen (15) days and Tenant shall have commenced to cure said
default within said fifteen (15) days and continues diligently
to pursue the curing of same), or
(c) Tenant shall file a petition in bankruptcy or be adjudicated
a bankrupt, or file any petition or answer seeking any
reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief for itself under any
present or future federal, state or other statute, law or
regulation, or make an assignment for the benefit of creditors,
or
6
(d) Any trustee, receiver or liquidator of Tenant or of all or
any substantial part of its properties or of the demised
premises shall be appointed in any action, suit or proceeding by
or against Tenant and such proceeding or action shall not have
been dismissed within thirty (30) days after such appointment, or
(e) The Leasehold estate hereby created shall be taken on
execution or by other process of law, or
(f) Tenant shall admit in writing its inability to pay its
obligations generally as they become due, or Tenant shall
vacate or abandon the demised premises, then and in
any of said cases, Landlord at its option may terminate this
Lease and re-enter upon the demised premises and take
possession thereof with full right to sue for and collect all
sums or amounts with respect to which Tenant may then be in
default and accrued up to the time of such entry, including
damages to Landlord by reason of any breach or default on the
part of Tenant, or Landlord may, if it elects to do so, bring
suit for the collection of such rents and damages without
entering into possession of the demised premises or voiding this
Lease.
In addition to, but not in limitation of, any of the remedies
set forth in this Lease or given to Landlord by law or in
equity, Landlord shall also have the right and option, in the
event of any default by Tenant under this Lease and the
continuance of such default after the period of notice above
provided, to retake possession of the demised premises from
Tenant without process of law, by summary proceedings or
otherwise, and it is agreed that the commencement and
prosecution of any action by Landlord in forcible entry and
detainer, ejectment or otherwise, or any execution of any
judgment or decree obtained in any action to recover possession
of the demised premises, shall not be construed as an election
to terminate this Lease unless Landlord expressly exercises its
option hereinabove provided to declare the term hereof ended,
whether or not such entry or reentry be had or taken under
summary proceedings or otherwise, and shall not be deemed to
have absolved or discharged Tenant from any of its obligations
and liabilities for the remainder of the term of this Lease, and
Tenant shall, notwithstanding such entry or re-entry, continue
to be liable for the payment of the rents and the performance of
the other covenants and conditions hereof and shall pay to
Landlord all monthly deficits after such re-entry in monthly
installments as the amounts of such deficits from time to time
are ascertained and, in the event of any such ouster, Landlord
rents or leases the demised premises to some other person, firm
or corporation (whether for a term greater, less than or equal
to the unexpired portion of the term created hereunder) for an
aggregate rent during the portion of such new lease coextensive
with the term created hereunder which is less than the rent and
other charges which Tenant would pay hereunder for such period.
Landlord may immediately upon the making of such new lease or
the creation of such new tenancy sue for and recover the
differences between the aggregate rental provided for in said
new lease for the portion of the term co-extensive with the term
created hereunder and the rent which Tenant would pay hereunder
for such period, together with any expense to which Landlord may
be put for brokerage commission, placing the demised premises in
tenantable condition or otherwise. If such new lease or tenancy
is made for shorter term than the balance of the term of this
Lease, any such action brought by Landlord to collect the
deficit for that period shall not bar Landlord from thereafter
suing for any loss accruing during the balance of the unexpired
term of this Lease.
If Tenant at any time shall fail to pay any taxes, assessments,
or liens, or to make any payment or perform any act required by
this Lease to be made or performed by it, Landlord, without
waiving or releasing Tenant from any obligation or default under
this Lease, may (but shall be under no obligation to) at any
time thereafter make such payment or perform such act for the
account and at the expense of Tenant. All sums so paid by
Landlord and all costs and expenses so incurred shall accrue
interest at the rate of eighteen percent (18%) per annum from
the date of payment or incurring thereof by Landlord and shall
constitute additional rent payable by Tenant under this Lease
and shall be paid by Tenant to Landlord upon demand. All other
sums payable by Tenant to Landlord under this Lease, if not paid
when due, shall accrue interest at the rate of eighteen percent
(18%) per annum from their due date until paid, said interest to
be so much additional rent under this Lease and shall be paid to
Landlord by Tenant upon demand.
22. Costs and Attorney Fees: The Tenant agrees and covenants to
pay all costs and expenses, including reasonable attorney fees,
incurred by the Landlord in the enforcement of any covenant or
agreement contained in this Lease.
23. Failure to Perform Covenant: Any failure on the part of
either party to this Lease to perform any obligation hereunder,
and any delay in doing any act required hereby shall be excused
if such failure or delay is caused by any strike, lockout,
governmental restriction or any other similar cause beyond the
control of the party so failing to perform, to the extent and
for the period that such continues, save and except that the
provisions of this paragraph shall not excuse a non-payment of
rent or other sums due hereunder on its due date.
7
24. Rights of Successors and Assigns: The covenants and
agreements contained in the within Lease shall apply to, inure
to the benefit of, and be binding upon the parties hereto, their
heirs, successors, distributees, executors, administrators,
legal representatives, assigns and upon their respective
successors, in interest, except as expressly otherwise
hereinbefore provided. No assignment or subletting by, from,
through, or under Tenant, not in strict compliance with the
provisions of this Lease shall vest in the assignee or subtenant
any right, title, or interest whatever in the Lease or in the
demised premises.
25. Liens: Tenant will not permit to be created nor to remain
undischarged any lien, encumbrance, or charge (arising out of
any work of any contractor, mechanic, laborer, or materialman or
any mortgage, conditional sale, security agreement or otherwise)
which might be or become a lien or encumbrance or charge upon
the demised premises or any part thereof or the income
therefrom, and Tenant will not suffer any other matter or thing
whereby the estate, right and interest of Landlord in the
demised premises or any part thereof might be impaired. If any
lien or notice of lien on account of an alleged debt of Tenant
or any notice of contract by a party engaged by Tenant or
Tenant's contractor to work on the demised premises shall be
filed against the demised premises or any part thereof, Tenant,
within ten (10) days after notice of the filing thereof, will
cause the same to be discharged of record by payment, deposit,
bond, order of a court of competent jurisdiction or otherwise.
If Tenant shall fail to cause such lien or notice of Lien to be
discharged within the period aforesaid, then, in addition to any
other right or remedy, Landlord may, but shall not be obligated
to, discharge the same either by paying the amounts claimed to
be due or by procuring the discharge of such lien by deposit or
by bonding proceedings, and in any such event Landlord shall be
entitled, if Landlord so elects, to compel the prosecution of an
action for the foreclosure of such lien by the lienor and to pay
the amount of the judgment in favor of the lienor with interest,
costs, attorney's fees and allowances. Any amount so paid by
Landlord and all costs and expenses, including attorney's fees,
incurred by Landlord in connection therewith, together with
interest thereon at the maximum legal rate from the respective
dates of Landlord's making of the payment or incurring of the
cost and expense shall constitute additional rent payable by
Tenant under this Lease and shall be paid by Tenant to Landlord
on demand.
26. Construction of Lease: The word "Landlord" as used herein
shall refer to the individual, individuals, partnership or
corporation called "Landlord" at the commencement of this Lease,
and the word "Tenant" shall likewise refer to the individual,
individuals, partnership, or corporation called "Tenant". Words
of any gender used in this Lease shall be held to include any
other gender, and words in the singular number shall be held to
include the plural when the sense requires.
27. Paragraph Headings: The paragraph headings as to the
contents of particular paragraphs herein, are inserted only for
convenience and are in no way to be construed as part of such
paragraph or as a limitation on the scope of the particular
paragraph to which they refer.
28. Commissions: Landlord acknowledges the service of
Wilson/Kibler, Inc. as Real Estate Broker in procurement of this
Lease and all extensions and renewals and expansions, and in
consideration of thereof, does hereby agree to pay said broker
for services rendered, commissions on the rental of the demised
premises in accordance with their separate agreement. Landlord
acknowledges that such agreement shall be binding on its heirs,
representatives, successors, and assigns and will follow the
land.
29. Notices: It is agreed that the legal address of the parties
for all notices required or permitted to be given hereunder, or
for all purposes of billing, process, correspondence, and any
other legal purposes whatsoever, shall be deemed sufficient, if
given by a communication in writing by United States mail,
postage prepaid and certified, return receipt requested, and
addressed as follows: To the Landlord at the following address:
Angora Columbia Enterprises
c/o Wilson/Kibler, Inc.
P. 0. Box 11312
Columbia, South Carolina 29211
Angora Columbia Enterprises
c/o American Asset Corporation Management
5950 Fairview Road, Suite 714
Charlotte, North Carolina 28210
To the Tenant at the following address:
General Parcel Service
2155 W. Landstreet Road
Orlando, Florida 32824
8
Such notice shall be deemed given upon being so mailed. The
notice address may be changed from time to time by notice given
pursuant hereto.
30. Security Deposit: As security for the faithful performance
by Tenant of all the terms and conditions of this Lease on
Tenant's part to be performed, Tenant has deposited with
Landlord the sum of Two Thousand Two Hundred and 00/100 Dollars
($2 200.00). Such amount shall be returned to Tenant, without
interest, within thirty (30) days after the day set forth for
the expiration or sooner termination of the term herein if
Tenant has fully and faithfully carried out all of the terms,
covenants, and conditions of this Lease on its part to be
performed. Landlord shall have the right to apply any part of
said deposit to cure any defaults of Tenant, including, but not
limited to, damages and payment of rent. The application of
said deposit shall be at the sole discretion of Landlord. It is
expressly understood that this remedy is in addition to all
other remedies vested in Landlord.
In the event of sale of the demised premises or lease of the
land on which it stands subject to this Lease, Landlord shall
have the right to transfer the security to the purchaser and
Landlord and his agent shall be released by Tenant from all
liability for the return of such security and Tenant shall look
to new Landlord solely for the return of the said security. It
is agreed that this provision shall apply to every transfer or
assignment made of the security to a new Landlord. The security
deposited under this Lease shall not be mortgaged, assigned, or
encumbered by Tenant without the written consent of Landlord.
In the event of any authorized assignment of this Lease by
Tenant the said security deposit shall be deemed to he held by
Landlord as deposit made by the assignee and Landlord shall have
no further liability with respect to the return of said security
deposit to Tenant.
31. Entire Agreement: This Lease, and the exhibits attached
hereto and any addendums attached hereto and forming a part
hereof, if any, set forth all the covenants, promises,
agreements, conditions, and understandings between Landlord and
Tenant concerning the demised premises, and there are no
covenants, promises, agreements, conditions, or understandings,
either oral or written, between them other than as are herein
set forth. Except as herein otherwise provided, no subsequent
alteration, amendment, change, or addition to this Lease shall
be binding upon Landlord or Tenant unless reduced to writing and
signed by them. Tenant agrees that Landlord and its agents have
made no representations or promises with respect to the demised
premises, or the building or property of which the same are a
part, if applicable, except as herein expressly set forth.
32. No Option: The submission of this Lease for examination does
not constitute a reservation of or option for the demised
premises or any other space of Landlord and shall vest no right
in either party. This Lease will become effective as a Lease
only upon execution and delivery thereof by the parties hereto.
33. Liability of Landlord: In the event of the sale or other
transfer of Landlord's right, title, and interest in the demised
premises, Landlord will be released thereby from all liability
and obligations hereunder to Tenant.
34. Accord and Satisfaction: No payment by Tenant or receipt by
Landlord of a lesser amount than the rent herein stipulated or
other sums due hereunder will be deemed to be other than on
account of the earliest stipulated rent or other sum nor shall
any endorsement or statement on any check or any letter
accompanying any check or payment of rent or other sum be deemed
an accord and satisfaction, and Landlord may accept such check
or payment without prejudice to Landlord's right to recover the
balance of such rent or sum or pursue any other remedy provided
for in this Lease or available at law or in equity.
35. Relationship of Parties: Nothing herein contained shall be
deemed or construed by Landlord or Tenant as creating the
relationship of principal and agent or of a partnership or joint
venture or as establishing a fiduciary relationship
responsibility between the Landlord and Tenant, it being
understood and agreed that none of the provisions herein, nor
any acts of Landlord or Tenant, will be deemed to create any
relationship other than that of Landlord and Tenant.
36. No Third Party Rights: The rights and obligations arising
under this Lease are personal between Landlord and Tenant and
such rights and obligations shall not be enforceable by any
third party. Furthermore, Tenant recognizes that it has no
third party rights arising out of any agreement between Landlord
and any party other than Tenant regardless of any benefits
accruing to Tenant by virtue of such agreement.
37. Authority: If Tenant is a corporation, Tenant warrants and
represents to Landlord that the execution of this Lease by the
person or persons so signing has been authorized by a resolution
of
9
Tenant's Board of Directors or other appropriate corporate
action. If Tenant is a partnership, Tenant warrants and
represents to Landlord that Tenant's execution of this Lease by
the partner or partners so signing is in accordance with its
partnership documents.
38. Environmental Activities: All operations and activities of
the Tenant on the property shall be within the authorized uses
of the premises and conducted in full compliance with all
federal, state or local laws and regulations concerning the
protection of the environment and any hazardous or toxic
substances, as those terms are defined within such laws and
regulations. Tenant further covenants and agrees that any such
hazardous or toxic substances introduced or generated on the
premises will be generated, stored, treated, removed, utilized,
and disposed of in accordance with all such laws and regulations.
Tenant shall and does hereby agree to indemnify, defend, and
hold harmless the Landlord, its agents, and Landlord's lender(s)
holding liens on the Demised Premises against any loss, claim,
damage, expense, or liability including, without limitation,
required repairs, clean up, detoxification, removal, or
liability to any third party resulting from Tenant's use,
storage, generation, manufacture, treatment, or handling of
Hazardous Materials or other contaminants.
39. Reciprocal Covenant on Notification of ADA Violations:
Within ten (10) days after receipt, Landlord and Tenant shall
advise the other party in writing, and provide the other with
copies of (as applicable), any notices alleging violation of the
Americans with Disabilities Act of 1990 ("ADA") relating to any
portion of the Property or of the Premises; any claims made or
threatened in writing regarding noncompliance with the ADA and
relating to any portion of the Property or of the Premises; or
any governmental or regulatory actions or investigations
instituted or threatened regarding noncompliance with the ADA
and relating to any portion of the Property or the Premises.
40. Additional Provisions: Insofar as the following provisions
conflict with any other provisions of the Lease, the following
shall control:
I. Landlord agrees to add 400 square feet of office space as
shown on the attached sketch.
In Witness Whereof, the parties hereto have caused these
presents to be executed the day and year first above written.
LANDLORD: ANGORA COLUMBIA ENTERPRISES
By: (Signed)
TENANT: GENERAL PARCEL SERVICE
By: (Signed)
10
Exhibit 10.2
ASSIGNMENT OF LEASE
This Assignment of Lease is made and entered into by and among
Defco Company and Bob G. Gibson (together "Lessor"), ABF Freight
System, Inc., successor in interest to Carolina Freight Carriers
Corporation ("Assignor"), and General Parcel Service
("Assignee").
RECITALS:
A. Lessor and Assignor are parties to a certain Lease Agreement
dated June 19, 1995, a copy of which is attached hereto as
Exhibit A and made a part hereof, for Premises located at 730
Indeneer Drive, Kernersville, Forsyth County, North Carolina
27284 ("Lease").
B. Assignee desires to assume Assignor's rights, interests and
obligations under the Lease, and Assignor desires to assign such
rights, interests and obligations to Assignee.
C. Lessor agrees to consent to Assignor's assignment of all its
rights, interests and obligations under the Lease to Assignee
and Assignee's assumption of such rights, interests and
obligations.
THEREFORE, BASED ON THE ABOVE RECITALS, and subject to the
terms and conditions, Lessor, Assignor, and Assignee agree as
follows:
I Assignment. Assignor, for and in consideration of One Dollar
($1.00), reimbursement of its security deposit in the amount of
Two Thousand One Hundred Twenty-five Dollars ($2,125.00) and
other valuable considerations to it in hand paid by Assignee,
hereby assigns all its rights, title and interest in and to the
subject Lease, and the balance of the term thereby created, to
Assignee, its successors, legal representatives and assigns.
2. Assumption. Assignee, in consideration of Assignors
assignment of the Lease and consent to such assignment by
Lessor, hereby agrees for itself, its successors, legal
representatives and assigns, that Assignee will faithfully
perform, discharge and fulfill all of the Assignors obligations
and undertakings under the Lease and will pay to Lessor, its
successors, legal representatives or assigns, all rent and other
sums reserved under the Lease, as such may become due and
payable. Assignee shall pay any real estate or broker fees in
conjunction with this Assignment of Lease. Assignee hereby
agrees to indemnify, save and hold harmless Assignor from and
against any and all losses, liabilities, claims or causes of
action (including attorney's fees incurred in the enforcement of
this indemnification and otherwise) arising out of or related to
Assignee's failure to perform any of the obligations of the
Assignor under the lease subsequent to the date hereof.
3. Consent. Lessor, in consideration of Assignors assignment
and the agreement of Assignee to perform, discharge and fulfill
all Assignors obligations and undertakings under the Lease,
hereby consents to such assignment and to the substitution of
Assignee in place of Assignor. Lessor's consent shall not
relieve Assignor of its obligations under the Lease.
4. Commencement. This Assignment of Lease. shall commence,
and Assignee shall accept all duties, obligations, rights and
privileges of the Lease on July 1, 1996.
IN WITNESS WHEREOF, the parties have set their hands as of the
13 day of June, 1996.
DEFCO COMPANY AND BOB G. GIBSON ATTEST:
By: (Signed)
Title: Partner
Attest: (Signed)
ABF FREIGHT SYSTEM, INC.
By: (Signed)
Title: Vice President
ATTEST: (Signed)
GENERAL PARCEL SERVICE
By: (Signed)
Title: President
ATTEST: (Signed)
LEASE AGREEMENT
THIS LEASE AGREEMENT is made this 19th day of June, 1995 by and
between Defco Company, a North Carolina General Partnership, and
Bob G. Gibson individually (hereinafter collectively called the
"Lessor') and Carolina Freight Carriers Corporation (hereinafter
called the "Lessee").
WITNESSETH:
That in consideration of the rents, covenants and conditions
hereinafter set forth to be kept and performed by the Lessee the
Lessor hereby leases, lets and demises unto the Lessee the
Leased Premises. The terms and conditions of this Lease
Agreement are as follows:
1. Description. When used in this Lease Agreement the term
"Leased Premises" shall describe the maintenance facility at 730
lndeneer Drive. Kernersville, Forsyth County, North
Carolina 27284. A site plan of the Leased Premises is included
as Exhibit "A".
2. Term, Lessee shall have and hold the Leased Premises for the
term of five (5) years beginning on July 16, 1995. Should
Lessee occupy the premises prior to said date, rent shall be
prorated.
3. Rent. Lessee shall pay to Lessor a monthly rental of
$2,125.00 due on the first day of each month during the lease
term. If the first or last month of this lease begins or ends
on any day other than the first day of the month, the rent shall
be prorated in accordance with the number of days that rent is
due during that monthly rental period. Rent shall be considered
past due after the tenth day of any month during the lease term,
and if rent has not been paid on or before the tenth day of the
month, Lessee shall pay a late fee of $100.00.
3.1 Security Deposit. Lessee shall pay to Lessor a Security
Deposit of $2,125.00 with the first month's rent. The Lessor
shall return said Security Deposit to the Lessee at the
conclusion of this lease unless the Lessee is in default or has
damaged the Leased Premises, in which case the Lessor shall
retain only that portion of the deposit necessary to cure the
default or repair the damage.
4. Utilities, Taxes and Other Expenses. Lessee shall be
responsible for 100% of all utilities for the Leased Premises.
Lessee shall be responsible for payment of all taxes due on the
Leased Premises.
5. Repairs and Maintenance. Lessor shall maintain in good
condition the following:
5.1 The structural components of the Leased Premises. For
purposes of this subparagraph 5.1 "structural components" shall
include the foundations, bearing and exterior walls,
subflooring, and concrete flooring of the Leased Premises; and
5.2 The utility pipes and lines located outside of the interior
walls of the building, provided that such duty to repair shall
not include damages caused by the negligence or misuse of the
plumbing facilities by the Lessee.
5.3 The air conditioning components to the extent annual cost of
repairs exceed $ 2,000.00 except when damaged by Lessee's
negligence or intentional conduct.
Subject to the provisions of Section 8 herein, Lessee shall keep
in good repair all remaining components of the building located
on the Leased Premises (except that the Lessee shall have no
obligation to replace the roof) and shall be responsible for any
repairs due to negligence or misuse by Lessee, its employees or
agents.
5.5 At the expiration of the Lease Agreement, or prior to
termination, the Lessee shall surrender the Leased Premises to
the Lessor in at (east as good a condition as received, normal
wear and tear, damage from the elements or Acts of God, or
damage resulting from the negligence or willful misconduct of
Lessor, its agents or employees, excepted. Lessee shall be
liable to Lessor for any damage to the Leased Premises resulting
from the negligent or willful acts or omissions of Lessee, its
agents or employees.
6. Insurance and Indemnity. Lessee shall insure the leases
premises for fire and extended coverage in the amount of
$250,000.00. In case all or any portion of the leased premises
shall be destroyed by fire or any other covered casualty or
occurrence, Lessor shall be entitled to receive all insurance
proceeds which are payable for damage to the leased premises,
and lessee shall be entitled to receive those insurance proceeds
payable for damage to Lessee's personal property. Lessee shall
provide at its cost, liability insurance on the leased premises
for the full term of this Lease Agreement, with bodily injury
limits of not less than $1,000,000.00 per person and
$1,000,000.00 per occurrence and with property damage limits of
not less than $200,000.00 per occurrence. Lessor shall be named
as an additional insured of such policy or policies and a
certificate of insurance shall be furnished to Lessor prior to
the effective date of this Lease Agreement. Lessee will be
required to insure its own contents and equipment.
7. Waiver of Subrogation. Each party hereto waives any and
every claim which arises or may arise in such party's favor
against the other party hereto during the term of this Lease
Agreement for any and all loss of, or damage to, any of such
party's property located within or upon, or constituting a part
of, the Leased Premises, which loss or damage is covered by
valid and collectible fire and extended coverage insurance
policies, to the extent that such loss or damage is recoverable
under such insurance policies. Such mutual waivers shall be in
addition to, and not in limitation or derogation of, any other
waiver or release contained in this Lease Agreement with respect
to any loss of, or damage to, property of the parties hereto.
Inasmuch as such mutual waivers will preclude the assignment of
any aforesaid company (or any other party), each party hereby
agrees immediately to give to each insurance company which has
issued such party policies of fire and extended coverage
insurance, written notice of the terms of such mutual waivers,
and to cause such insurance policies to be property endorsed, if
necessary, to prevent the invalidation of such insurance
coverage by reason of such waivers.
8. Destruction of the Premises, If during the term of this Lease
Agreement or any renewal hereof, the Leased Premises or part
thereof is destroyed or damaged through no substantial fault of
Lessee by fire, explosion, acts of God, or any other cause, the
Lessee shall give immediate notice thereof to Lessor who shall
thereupon cause the damage to be repaired forthwith unless this
Lease Agreement is terminated as hereinafter provided. If the
Leased Premises or any part thereof shall have been rendered
untenable from the time of damage until the completion of repair
and restoration, an equitable reduction in the rent during such
period shall be made until the Leased Premises are repaired and
again ready for occupancy. However, if the Leases Premises are
damaged to the extent that continued use would be, in the
opinion of Lessee, impracticable, this Lease Agreement may be
terminated immediately by written notice to the Lessor within
thirty (30) days of the damage. In the case of such
termination, Lessor and Lessee shall have no further obligation
under this Lease Agreement except that Lessee shall pay rent
accrued through the date of the destruction or damage.
9. Condemnation, If the Leased Premises, or a substantial
portion of the Leased Premises, is taken under the power of
eminent domain for any public or quasi-public use such that, in
the opinion of the Lessee continued use of occupancy would be
impracticable, then this Lease Agreement may be terminated by
written notice to the Lessor within thirty (30) days of the
taking. In case of such termination, Lessor and Lessee shall
have not further obligations under this Lease Agreement except
Lessee shall pay rent accrued through the date of termination.
10. Default of Lessee, The occurrence of any of the following
shall constitute a material default by Lessee of this Lease
Agreement:
10.1 Any failure by Lessee to pay rent or any other monetary
sums required to be paid hereunder where such failure continues
for ten (1 0) days after written notice thereof from Lessor to
Lessee.
10.2 The abandonment of vacation of the Leased Premises by
Lessee other than as provided for herein.
10.3 A failure by Lessee to observe and perform any other
provision of this Lease Agreement to be observed or performed by
Lessee when such failure continues for ten (10) days after
written notice thereof from Lessor to Lessee; provided, however,
that if the nature of such default is such that it cannot
reasonably be cured with ten (10) days, Lessee shall not be
deemed to be in default if Lessee shall within the ten-day
period commence such cure and thereafter diligently prosecute
the same to completion.
11. Default of Lessor, Lessor shall be in default of this Lease
Agreement if it fails or refuses to perform any provision of
this Lease Agreement that it is obligated to perform if the
failure to perform is not cured within ten (1 0) days after
written notice of the default has been given by Lessee to
Lessor. If the default cannot reasonably be cured within ten
(10) days, Lessor shall not be in default of this Lease Agreement
if Lessor shall within the ten-day period commence such cure and
thereafter diligently prosecute the same to completion.
12. Successive Parties. This Lease Agreement, and all provisions
hereof, shall be binding upon the heirs, administrators,
executors, successors and assigns of the parties hereof.
13. Notices. All notices required by any of the terms and
conditions of this Lease Agreement shall be deemed given when
the notice is prepared, adequately addressed, and deposited in
the United States Mail, postage prepaid, certified or registered
mail, return receipt requested. Notices to Lessor and Lessee
are adequately addressed as follows:
If to Lessor:
Defco Company
612 Downing Rd.
Winston-Salem, NC 27106
w/cc to:
Michael G. Gibson
Suite 402, Cameron Brown Bldg.
301 South McDowell St.
Charlotte, NC 28204
If to Lessee:
Carolina Freight Carriers Corporation
P. 0 Box 31308
Charlotte, NC 28231-1308
Attn: Real Estate Department
w/cc to:
Legal Department
14. Warranties of Lessor. Lessor warrants that it is the owner
of the premises and has the right to lease same to Lessee free
and clear of any claim from third parties to possession of the
premises, or a part thereof. Lessor warrants the condition of
the premises to be fully functional and operational. Lessor
further warrants the good working condition of the heating and
air conditioning, electrical, plumbing and yard lighting
systems. Lessor warrants that roof is free of leaks and that
all shop roll up doors are in good working condition on the
first day of the lease term.
15. Fuel Tanks. Lessor warrants there are not underground fuel
tanks located on the leased premises; any underground fuel tanks
are excluded from the leased premises.
16. EnvironmentaL Lessor agrees with and represents and warrants
to Lessee as follows:
(a). Lessor has at all times complied with and shall at all
time during this Lease comply with all applicable federal, state
and local environmental laws and regulations applicable to the
Property and any activities conducted thereon.
(b). There is no pending or threatened private or governmental
claim, order or litigation, nor is there any pending or
threatened judicial or administrative action or order,
pertaining to or affecting the Property.
(c). To the best of their knowledge, Lessor has not caused or
permitted and shall not cause or permit any Hazardous Substances
or other dangerous toxic substances or any Solid Waste to be,
and to the best of their knowledge such substances or waste have
not been generated, manufactured, refined, transported, treated,
stored, disposed, handled, processed, produced or released on
the Property except in compliance with all applicable federal,
state and local laws and regulation. For the purposes of this
paragraph, the term "Hazardous Substance" shall have the meaning
set forth in 40 C.F.R. Section 261.2; and the term "Release"
shall have the meaning set forth in 42 U.S.C. Section 9601.
(d). Lessor warrants that existing underground trench drains
present on the canopy covered bay adjacent to the shop building
have been and are currently properly permitted, constructed,
designed and discharged according to all local state and federal
regulations. The Lessor further accepts full liability and
responsibility for any non-compliance in this regard.
(e). Lessor agrees to indemnify and hold harmless Lessee from
and against any and all loss, cost or damage, including
reasonable attorney's fees, resulting from any environmental
conditions on the [eased premises that existed prior to the
Lessee's first day of possession of the Leased Premises.
17. Lessee's Representations and Warranties- The Lessee hereby
represents and warrants as follows:
(a). The execution, delivery and performance of this Lease by
the Lessee will not conflict with or constitute a default by the
Lessee under any agreement to which it is a party, or under any
judgment, order or other ruling against the Lessee.
(b). The execution, delivery of this Lease by the Lessee, and
the performance of all acts contemplated to be performed by it
hereunder have been duty authorized by all necessary corporate
action by the Lessee. The Lessee has duly executed and
delivered this Lease, and this Lease constitutes a legal, valid
and binding obligation of the Lessee.
(c). Lessee shall not cause or permit any hazardous substances
or other dangerous toxic substance or any solid or liquid waste
to be generated, manufactured, refined, transported, treated,
stored, disposed, handled, processed, produced or released on
the (eased premises except in compliance with all applicable
Federal, State, and Local laws and regulations. For the purpose
of this section, the term hazardous substance shall have the
meaning set forth in 40 CFR Section 261.2; and the term release
shall have the meaning set forth in 42 USC Section 9601.
(d). At all times during this lease, Lessee shall be in full
and timely compliance with all laws and regulations of the
state, county or municipality in which the [eased premises is
located relating to the environmental condition of the leased
premises if such compliance results from the particular use of
Lessee. If any operation of the Lessee shall be subject to any
federal, state or municipal environmental regulation, then
Lessee shall receive any approval or authorization that may be
required pursuant to any law, regulation or ordinance of the
state, county or municipality which required approval or
authorization prior to the commencement of any operation which
is subject to said laws or regulations.
(e). Lessee agrees to indemnify, defend and hold harmless
Lessor against and with respect to any and all damages, claims,
losses, liabilities and expenses of any kind, including without
limit, legal and consulting expenses incurred by Lessor or which
are asserted against or imposed against Lessor by any other
party (including any governmental entity) arising out of or
connected with (i) an environmental condition of the leased
premises that results from Lessee's use of the leased premises,
including without limit the exposure of any person to such
environmental condition; (ii) Lessee's breach of or
misrepresentation of any provision of this paragraph of the
Lease. The representations and warranties made and the
indemnity obligations provided for in this paragraph shall
survive the termination of this lease, notwithstanding any
provision of this Lease to the contrary.
18. Subletting and Assignment. Lessee shall have the right
pursuant to prior written approval by Lessor, which approval
shall not be unreasonably withheld, to sublet or assign all or
part of its interest in the Leased Premises during the term of
this lease.
IN WITNESS WHEREOF, the respective parties have executed this
instrument as of the day and year first written above.
LESSOR:
By: (Signed)
Its: Individually
By: (Signed)
Its Partner Defco Company
LESSEE:
By:
Its:
Exhibit 10.3
STATE OF SOUTH CAROLINA
LEASE
COUNTY OF GREENVILLE
THIS INDENTURE OF Lease, made at Greenville, South Carolina, the
20th day of June, 1996, by and between Real Estate Partners who
together with their heirs, executors, administrators,
successors, and assigns, is hereinafter referred to as the
"Lessor" and General Parcel Service, Inc. who together with
their heirs, executors, administrators and assigns, is
hereinafter referred to as "Lessee",
WITNESSETH:
1. Property to be Leased. For the terms and conditions as
hereinafter set forth, the Lessor does hereby Lease to the
Lessee the real property located at 20 Concourse Way together
with the structures and improvements thereon consisting of
10,000 sq. ft. office/warehouse and approximately 800 sq. ft. of
office space, all of which are hereinafter referred to
collectively as the "Leased Premises".
2. Term. To have and to hold for a term commencing on July 1,
1996, and ending on June 30, 2001. In the event the premises
are ready for occupancy on any day other than the first day of
the month, the rent shall be apportioned from such day until the
beginning of the next calendar month.
3. Authorized Use. Lessee shall use the Leased Premises for
purposes of office/warehousing and distribution of packages and
all other lawful purposes incidental thereto.
4. Rent. Lessee hereby covenants to pay to Lessor for the
Leased Premises for the term of this Lease the sum of Forty
Thousand Two Hundred and no/100 ($40,200.00) Dollars per annum,
payable in equal installments in advance in the amount of Three
Thousand Three Hundred Fifty and no/100 ($3,350.00) Dollars
each, upon the first day of each month in advance. A late
payment charge of 5% will be added to the rent if payment is ten
days past due.
5. Taxes. (a) Lessee shall pay, during the term of this Lease,
to the public officers charged with the collection thereof,
promptly as the same shall become due, all current real estate
taxes and assessments, both general and special, beginning with
such taxes and assessments which shall become due and payable
upon and after the date of the commencement of this Lease and
that may be hereafter, during the term of this Lease, be levied,
assessed, charged, or imposed upon the Leased Premises described
herein and/or the improvements which now or hereafter may be
located thereon. In the event rent taxes are ever imposed,
Lessee shall pay such taxes.
b) Lessee, shall during the term of this Lease and all
extensions or renewals thereof, pay as the same become due, all
sales tax, personal property tax or use tax, if any, imposed by
state law or by city or county ordinance upon any property or
improvement actually purchased and installed by Lessee to be
used in the course of its business, or inventory stores on the
premises by Lessee.
6. Insurance. (a) Lessee shall maintain replacement value
insurance during the term of this Lease, and shall pay the cost
of initial and renewal premiums therefor insuring the Leased
Premises against loss or damage by fire, lightening, and such
perils as are from time to time comprehended within the term
"Extended Coverage". Said policy shall also contain a loss of
rent provision on behalf of Lessor. Replacement value insurance
on the contents and trade fixtures installed by Lessee shall be
the responsibility of Lessee.
(b) Lessee shall maintain public liability insurance against
claims for bodily injury, including death, and property damage
occurring in or about, or arising from the Leased Premises.
Such insurance to afford protection to a limit of not less than
Five Hundred Thousand ($500,000.00) dollars for any occurrence
with aggregate limits of not less than One Million
($1,000,000.00) dollars. Said policy of insurance shall name
both Lessee and Lessor as insureds as their interest may appear.
(c) All insurance provided for in this section 6 shall be
effected by Lessee through insurers satisfactory to Lessor and
Lessee under valid and enforceable policies, and certificates of
such policies shall be delivered to Lessor, including thirty
days written notice to Lessor of any material changes or
cancellation.
(d) Lessor hereby waives all causes and rights of recovery
against Lessee, Lessee's agents, officers, and employees for any
loss occurring to the buildings and improvements located on the
Leased Premises resulting from any of the perils insured against
under the aforesaid insurance policies, regardless of cause or
origin, including the negligence of Lessee, Lessee's agents,
officers and employees, to the extent of any recovery upon such
policies of insurance, provided, however, that in the event said
waiver of all causes and rights of recovery against Lessee,
Lessee's agents, officers, and employees, shall, during any
portion of the term of this Lease, invalidate such policies of
insurance in whole or in part, said waiver shall be void and of
no force or effect during such portion of the term hereof.
(e) Lessee hereby waives all causes and rights of recovery
against Lessor, Lessor's agents, officers, and employees for any
loss occurring to the buildings and improvements located on the
Leased Premises resulting from any of the perils insured against
under the aforesaid insurance policies, regardless of cause or
origin, including the negligence of Lessor, Lessor's agent,
officers and employees, to the extent of any recovery upon such
policies of insurance, provided, however, that in the event said
waiver of all causes and rights of recovery against Lessor,
Lessor's agents, officers, and employees, shall, during any
portion of the term of this Lease, invalidate such policies of
insurance in whole or in part, said waiver shall be void and of
no force or effect during such portion of the term hereof.
7. Condition of the Premises. The property contains 10,000
square feet of floor space. Lessee agrees not to make any
changes, alterations, or additions about the Leased property
without first obtaining the written consent of the Lessor except
as permitted in Paragraph 8 below.
8. Repair and Care of Leased Premises. Lessee will not commit
any waste of the Leased Premises and will pay for all damages to
building or equipment promptly. Lessee shall not use or permit
the use of the Leased Premises in violation of any present or
future applicable law of the United States or of the State of
South Carolina, or in violation of any present or future
applicable municipal ordinance or regulation. Lessee may, but
at Lessee's own cost and expense and in a good and workmanlike
manner, make such alterations and improvements on the Leased
Premises as Lessee may require for the conduct of Lessee's
business and without, however, materially altering the basic
character of the Leased Premises and the building or
improvements thereon or weakening any structure on the Leased
Premises. Lessor shall be responsible for the maintenance of
the roof of the Leased Premises and all exterior repairs except
for damages caused by Lessee. Lessee shall be responsible for
all interior items, including plumbing, electrical, carpets,
walls and repairs on the heating system and air conditioning.
Lessee shall keep the entranceways and parking area reasonably
free from ice and snow and at all times keep the Leased Premises
in clean and orderly condition, including the cutting of the
grass and maintenance of the shrubs and trees.
9. Utilities. Lessee shall pay all charges for heat, gas,
electricity, water, and other public utilities used on the
Leased Premises. There will be no outside storage.
10. Removal of Improvements: If requested by the Lessor at the
termination of this Lease, Lessee shall, at Lessee's sole
expense, remove all installations, alterations, or improvements
made by Lessee in or on the Leased Premises or make such other
disposition thereof as Lessor shall approve. All alterations,
improvements, furnishings, trade fixtures, equipments, and other
personal property installed in or on the Leased Premises by
Lessee and paid for by Lessee shall remain the property of
Lessee and may be removed by Lessee upon the termination of this
Lease, provided that (a) any of such items as are affixed to the
Leased Premises and require severance may be removed only if
Lessee shall repair any damage caused by such removal and (b)
Lessee shall have fully performed all of the covenants and
agreements to be performed by Lessee under the provisions of
this Lease. If the Lessee falls to remove any items referred to
hereinabove from the Leased Premises within the (10) days
following the termination of this Lease, all such alterations,
additions, and improvements shall become the property of the
Lessor unless Lessor elects to require their removal.
11. Damage or Destruction. (a) Except as expressly herein
provided, no destruction of or damage to the Leased Premises
shall entitle Lessee to surrender possession of the Leased
Premises or to terminate this Lease. Lessor agrees that in the
event of any damage to or destruction of any buildings and
improvements, or either of them situated on the Leased Premises
occasioned by fire or other hazards insured against under the
policies of insurance hereinbefore referred to, then Lessor
shall commence restoration or repair of the Leased Premises as
promptly as possible after occurrence of such damage or
destruction, and shall substantially complete such restoration
or repair with reasonable diligence.
(b) In the event Lessee is deprived of any of the occupancy of
any part of the Leased Premises by reason of or in consequence
of any such damage or destruction, whether or not insured
against, provided the same is not occasioned by the act or acts
of Lessee, Lessee's officers, employees, or agents, then
Lessee's obligation to pay rent shall be reduced in proportion
to the time during which and to the area of the building of
which the Lessee shall be so deprived because of such damage or
destruction or the repair and restoration thereof.
(c) It is, however, expressly understood and agreed, anything
hereinbefore contained which may appear to the contrary
notwithstanding, that if any damage or destruction of the
building and improvements at the time located on said Leased
Premises shall occur during the last six (6) months of the term
of this Lease, both Lessor and Lessee shall have the option,
upon giving written notice of the exercise thereof to the other
party, within thirty (30) days after the happening of such
damage or destruction, to terminate this Lease, in which case
any and all obligations of Lessor to restore said building and
improvements shall likewise terminate. In the case of the
termination of this Lease, Lessee shall be required to pay rent
only up to the time of such termination, and the portion of any
rent paid in advance, apportioned as aforesaid, covering the
period of time subsequent to such termination, shall be refunded
by Lessor to Lessee.
12. Liability for Damage: Indemnification. Lessee agrees to
indemnify Lessor against, and to defend and hold Lessor free and
harmless from, any and all claims due to injury of persons
(unless caused by the sole negligence of Lessor) arising out of
Lessee's occupancy and/or use of the Leased Premises, during the
term of this Lease or extension hereof, or any other holdover
occupancy.
Lessee further agrees to indemnify Lessor against, and to defend
and hold Lessor free and harmless from, any and all claims of
any kind or nature arising from Lessee's use of the Leased
Premises during the term of this Lease or any extension hereof,
or any other holdover occupancy, and Lessee hereby waives all
claims against Lessor for damage to goods, wares, and
merchandise and any and all other property, due to any cause
whatsoever, except the sole negligence of Lessor during the term
of this Lease or extension hereof, or any other holdover
occupancy.
13. Assigning and Subletting. Lessee shall not sublet the Leased
Premises or any part thereof nor assign this Lease, without in
each case the prior written consent of Lessor, which consent
shall not be unreasonably withheld or delayed. Any transfer of
this Lease from Lessee, by merger, consolidation, liquidation,
or otherwise by operation of law shall constitute an assignment
for the purpose of this Lease and shall require the written
consent of Lessor. Any consent by Lessor to any assignment or
subletting shall not constitute a waiver of the necessity for
such consent to any subsequent assignment or subletting. In the
event that Lessee shall at any time, during the term of this
Lease or any renewal or extension hereof or any other holdover
occupancy, sublet all or any part of the Leased Premises or
assign this Lease, either with the consent of Lessor, then, and
in such event, it is hereby mutually agreed that Lessee shall
nevertheless remain primarily liable under all of the terms,
covenants, and conditions of this Lease. If this Lease be
assigned, or if the Leased Premises or any part thereof be
subleased or occupied by anybody other than Lessee, Lessor may
collect from the assignee, sublessee, or occupant all rental or
other charges herein reserved, but such collection by Lessor
shall not be deemed an acceptance of the assignee, sublessee, or
occupant as a Lessee nor a release of Lessee from the
performance by Lessee of Lessee's obligations under this Lease.
14. Surrender of Leased Premises. Lessee agrees to surrender
the Leased Premises at the expiration or earlier termination of
this Lease, or extension hereof or any other holdover occupancy,
in as good condition as when the Leased Premises were delivered
to Lessee, ordinary wear, tear and damage or loss by the
elements, fire, casualty, or any of the perils comprehended by
the standard extended coverage insurance clause excepted. All
other damages must be paid for.
15. Holdover. Should Lessee holdover the Leased Premises or
any part thereof after the expiration of the term of this Lease,
unless otherwise agreed in writing, such holding over shall
constitute a tenancy from month to month only, and Lessee shall
pay one hundred twenty five (125%) percent of the monthly rental
in effect immediately proceeding the expiration of the preceding
term hereof equal to the monthly rental in effect immediately
preceding the expiration of the preceding term hereof, payable
in advance, but otherwise on the same terms and conditions as
herein provided.
16. Waiver of Covenants. It is agreed that the waiving of the
covenants of this Lease by either party shall be limited to the
particular instance and shall not be deemed to waive any other
breaches of such covenant or any provision contained herein.
17. Default Except Rent. If Lessee shall default in fulfillment
of any of the covenants and conditions hereof, except default in
the payment of rent, Lessor may, at Lessor's option, after
fifteen (15) days prior written notice to Lessee, make
performance for Lessee and, for that purpose, advance such
amounts as may be necessary. Any amounts so advanced, or any
expense incurred or sum of money paid by Lessor by reason of the
failure of Lessee to comply with any covenant, agreement,
obligation, or provisions of this Lease or in defending any
action to which Lessor may be subjected by reason of any such
failure shall be deemed to be additional rental for the Leased
Premises and shall be due and payable to Lessor on demand. The
acceptance by Lessor of any monthly installment of rental
hereunder shall not be a waiver of any other rental hereunder
then due.
If Lessee shall default in fulfillment of any of the covenants
or conditions of this Lease (other than the covenants for the
payment of rental or other amounts) and any such default shall
continue for a period of fifteen (15) days after written notice
from Lessor to Lessee, the Lessor may, at Lessor's option,
terminate this Lease by giving Lessee notice of such termination
and, thereupon, this Lease shall expire as fully and completely
as if that day were the date definitely fixed for the expiration
of the term or this Lease, and Lessee shall then quit and
surrender the Leased Premises, provided, however, if any such
default requires more than fifteen (15) days to remedy and
Lessee is proceeding to cure such default, Lessor shall not be
entitled to terminate this Lease on account of such default
unless Lessee fails to commence curing such default promptly and
or fails to prosecute the curing of such default to completion
diligently.
18. Default in Rent; Insolvency of Lessee. If Lessee shall
default in the payment of the rental reserved hereunder, or any
part thereof, or in making any other payment herein provided
for, and any such default shall continue for a period of fifteen
(15) days after written notice from Lessor to Lessee, of if the
Leased Premises or any part thereof shall be abandoned or
vacated, or if Lessee shall be dispossessed by or under
authority other than Lessor, if Lessee shall file a voluntary
petition in bankruptcy, or if Lessee shall file any petition or
institute any proceeding under any insolvency or Bankruptcy Act
(or any amendment thereto hereafter made) seeking to effect a
reorganization or a composition with Lessee's creditors, or if
(in the proceedings based on the insolvency of Lessee or
relating to bankruptcy proceedings) a receiver or trustee shall
be appointed for Lessee or the Leased Premises, or if any
proceedings shall be commenced for the reorganization of Lessee,
or if the Leasehold estate created hereby shall be taken on
execution or by any process of law, or if Lessee shall admit in
writing, Lessee's inability to pay Lessee's obligations
generally as they become due, the Lessor may, at Lessor's
option, terminate this Lease, without further notice, and Lessor
and Lessor's agents and servants may immediately, or at any time
thereafter, re-enter the Leased Premises and remove all persons
and property therefrom (by legal proceedings or by force or
otherwise) without being liable to indictment, prosecution or
damage therefor, or without terminating this Lease to recover
the Leased Premises as aforesaid and in that event Lessor agrees
to use Lessor's best efforts to relet said premises on behalf of
the Lessee at whatever rent, for a term that may be more or less
than the expired portion of the within Lease, and upon such
other terms, provisions and conditions as Lessor deems
advisable, applying any moneys collected first to the payment of
resuming or obtaining possession, and second to the payment of
costs of placing the Leased Premises in rentable condition,
third in the payment of any real estate commission incurred by
Lessor in such reletting and fourth, for the payment of any
rental or other charges due hereunder and any other charges due
to Lessor. Lessee shall remain liable for any deficiency in
rental which shall be paid upon demand therefor to Lessor.
19. Condemnation. If the whole of the Leased Premises shall be
taken or condemned in any eminent domain, condemnation or like
proceeding by competent authority for any public or quasi-public
use or purpose (including, for the purpose of this section, any
voluntary conveyance in lieu of such proceeding), or if such
portion thereof shall be taken or condemned as to make it
unreasonable to use this remaining portion for the conduct of
Lessee's business, then in any of such events, the term of this
Lease shall cease and terminate as of the date of such taking or
condemnation, and any award for such taking or condemnation
shall belong to the Lessor provided, however, that Lessee shall
have the right to claim and recover from the condemning
authority, but not from Lessor, such compensation as may be
separately awarded or recoverable by Lessee in Lessee's own
right on account of any and all damages to Lessee's business by
reason of the condemnation and for or on account of any cost or
loss to which Lessee might be put in removing Lessee's
merchandise, furniture, fixtures, Leasehold improvement, and
equipment. Notwithstanding the earlier termination, the Lessee
shall continue to pay the rent hereunder and to make all other
payments required hereunder until such time the Lessee vacates
the Leased Premises or shall be required to surrender possession
of the Leased Premises as a consequence of such taking or
condemnation, but not thereafter.
If only a part of the Leased Premises shall be taken or
condemned and the taking or condemnation of such part does not
make it unreasonable to use this remainder for the conduct of
Lessee's business, this Lease shall not terminate. In such
event, the entire award shall belong to the Lessor and out of
the award to the Lessor and subject to the prior rights of any
Mortgagee, so much thereof as shall be reasonable necessary to
repair any damage to the building and other improvements on the
Leased Premises or to alter or modify them so as to render them
a complete and satisfactory architectural unit (including
parking facilities) shall be expended by Lessor for that
purpose. During the period of restoration and thereafter the
rent hereunder shall be equitably reduced and abated in
proportion to that portion of the Leased Premises of which the
Lease shall be deprived on account of such taking or
condemnation.
In the event the parties are unable within a period of thirty
(30) days after any controversy arises between them to agree
upon (i) whether it is reasonable for Lessee to use the
remainder of the Leased Premises for the conduct of Lessee's
business, or (ii) the reduction of abatement of rent to be made
hereunder, then such dispute shall be resolved by arbitration in
accordance with the then prevailing rules of the American
Arbitration Association and the costs thereof shall be borne or
apportioned and paid as determined by such arbitration.
20. Failure to Perform Covenant Any failure on the part of
either party to this Lease to perform any obligation hereunder,
and any delay in doing any act required hereby shall be excused
if such failure or delay is caused by any strike, lockout,
governmental restriction or any other similar cause beyond the
control of the party so failing to perform, to the extent and
for the period that such continues, save and except that the
provisions of this section shall not excuse a nonpayment of
rental or other sums due hereunder on the due date thereof.
21. Quiet Enjoyment. If and so long as Lessee pays the rentals
reserved by this Lease and performs and observes all the
covenants and provisions hereof to be performed and observed by
Lessee, Lessee shall quietly enjoy the Leased Premises, subject,
however, to the terms of this Lease, and Lessor will warrant and
defend Lessee in the enjoyment and peaceful possession of the
Leased Premises throughout the term of this Lease, including any
extension hereof, or other holdover occupancy.
22. Access to Leased Premises. Lessor or Lessor's agents shall
have the right to enter the Leased Premises at all reasonable
times for the purpose of inspecting or examining the same and to
make such repairs as Lessor shall deem necessary or as may be
required to be made by Lessor.
23. Option to Extend Lease. The Lessee shall have the option to
extend the Lease for five (5) years. The rental for the renewal
term shall be negotiated at that time based on market rents.
Renewal terms shall be exercised by Lessee by delivery to Lessor
of written notice of its intention to exercise by Lessee by
delivery to Lessor of written notice of its intention to
exercise such option no later than ninety (90) days prior to the
termination of the term of the Lease then in effect.
24. Security Deposit. Lessor hereby acknowledges receipt from
Lessee for the sum of Three Thousand Three Hundred Fifty
($3,350.00) Dollars, to be held as collateral security for the
payment of any rentals and any other sums of money for which
Lessee shall become liable to Lessor under this Lease, and for
the faithful performance by Lessee of all other covenants and
agreements made herein; said deposit to be returned to Lessee
after the termination of this Lease provided Lessee shall have
made all such payments and performed all such covenants and
agreements. Lessor shall not be required to keep said deposit
separate from its general accounts. If Lessee fails to pay rent
or other charges due hereunder, or otherwise defaults with
respect to any provision of this Lease, Lessor may use, apply or
retain all or any portion of said deposit for the payment of any
rent or other charge in default or for the payment of any other
sum to which Lessor may become obligated by reason of Lessee's
default, or to compensate Lessor for any loss or damage which
Lessor may suffer thereby. If Lessor so uses or applies all or
any portion of said deposit, Lessee shall within ten (10) days
after written demand therefore deposit cash with Lessor in any
amount sufficient to restore said deposit to the full amount
hereinabove stated and Lessee's failure to do so shall be a
material breach of this Lease. If the monthly rent shall, from
time to time, increase during the term of this Lease, deposit
shall at all times bear the same proportion to current rent as
the original month rent. If Lessor assigns its interest in the
premises during the Lease term, Lessor may assign the security
deposit to the assignee and thereafter Lessor shall have no
further liability for the return of such security deposit.
25. Rights of Successors and Assigns. The covenants and
agreements contained in the within Lease shall apply to, inure
to the benefit of, and be binding upon the parties hereto and
upon their respective successors in interest, except as
expressly otherwise herein provided.
26. Lease Documentary Stamps. Lessee shall pay documentary
stamps as required by South Carolina Law for the execution of
this Lease.
27. Entire Agreement. This Lease and the exhibit attached hereto
set forth all the covenants, promises, agreements, conditions
and understandings between Lessor and Lessee concerning the
Leased Premises, and there are no covenants, promises,
agreements, conditions, or understanding, either oral or
written, between them other than as herein set forth. Except as
herein otherwise provided, no subsequent alteration, amendment,
change or addition to this Lease shall be binding upon Lessor or
Lessee unless reduced to writing and signed by them. Lessee
agrees that Lessor and Lessor's agents have made no
representations or promises with respect to the Leased Premises
or the building or the property which are a part thereof except
as herein expressly set forth.
28. Section Heading. The section headings as to the contents of
particular sections herein are inserted only for convenience and
are in no way to be construed as part of such section or as a
limitation on the scope of the particular section to which they
refer.
29. Governing Law. This Lease shall be governed by, construed,
and enforced in accordance with the laws of the State of South
Carolina.
30. Grammatical Usage. In construing this Lease, feminine or
neuter pronouns shall be substituted for those masculine in form
and vice versa, and plural terms shall be substituted for
singular and singular for plural in any place in which the
context so required.
31. Hazardous Material or Substance. Lessee shall not bring nor
shall allow to be brought any hazardous chemical, substance, or
waste onto the premises, and if at any time during or subsequent
to this Lease, any such material or substance is found on the
premises, the Lessee shall have the sole obligation for its
removal.
IN WITNESS WHEREOF, the parties hereto have caused these present
to be executed as of the day and year first above written.
IN THE PRESENCE OF:
LESSOR.
By: (Signed)
Its: Partner
(Signed)
Witness
LESSEE:
By: (Signed)
Its: President
(Signed)
Witness
Exhibit 10.4
STATE OF NORTH CAROLINA
COUNTY OF BUNCOMBE
LEASE AGREEMENT
This LEASE AGREEMENT, made and entered into and effective as of
the 8th day of July, 1996, by and between J. C. SWICEGOOD, JR.,
(herein "Lessor") and GENERAL PARCEL SERVICE, INC., (herein
"Lessee").
That Lessor, in consideration of the agreements and covenants
hereinafter mentioned and expressed, to be fulfilled and
performed by the Lessee, does hereby lease unto Lessee for the
term hereinafter specified, certain premises located in the
County of Buncombe, State of North Carolina, and which premises
are more particularly identified as follows:
The certain area commonly known as Suite A-1 and Suite A-2 and
the office appurtenant thereto containing a combined area of
8,455 square feet, more or less, Located on that, property
commonly known as 1262 Airport Road, Arden, NC.
Said Premises hereinafter referred to as the "Leased Premises"
or "Premises".
Furthermore, as an appurtenance to the Premises, the Lessor
expects to enter into a Easement Agreement with R. Dennis Weaver
and wife, Shirley W. Weaver as an additional means of access to
the Premises. At this time, no easement agreement has been
finalized. If and when an easement agreement is finalized, the
Lessee agrees to abide by the reasonable terms thereof in the
use of the potential alternate means of access.
TO HAVE AND TO HOLD said Leased Premises unto Lessee, upon the
following term and conditions:
Term:
(a) The term of this Lease shall be for a period of two (2)
years. and twenty-four (24) days and shall be deemed to have
commenced on the 8th day of July, 1996. The term of this Lease
shall end at midnight on the 31st day of July, 1998.
(b) Provided Lessee is not then in default hereunder and if this
Lease shall be in force and effect on the date for expiration of
the original term and the Lessee shall on that date have fully
complied with all notice provisions and all the other terms and
conditions contained herein, then Lessee shall have the option
to renew this Lease for one (1) additional one (1) year term
(herein "Renewal Term") beginning with the expiration of said
original term or renewal term. If Lessee elects to exercise
such option to renew, then Lessee shall provide to Lessor
written notice of Lessee's intent to renew this Lease at least
120 days prior to the expiration of the original term. The
terms of the Lease during each Renewal Term shall remain
unchanged except as hereinafter provided for rental. The rent
during any Renewal Term shall be determined according to rental
provided in Paragraph 2, Rental Adjustments and Renewal Rent,
subparagraph (b). This language shall not be construed as an
automatic renewal on a year to year basis.
(c) Wherever the designation "Term" appears, it shall include
any renewal term for which the aforesaid option to renewal has
been exercised. As used herein, the term "Lease Year,, shall
mean that twelve months period beginning on the first (1st) day
of August of one year and ending on the thirty-first (31st) day
of July of the following year.
2.
Rent
(a) The aggregate annual rent for said Premises during the first
and original lease term. year shall be Forty Thousand One
Hundred Sixty One and 25/100 Dollars ($40,161.25) . Lessee
covenants and agrees to pay said rent to Lessor in equal monthly
installments 6f Three Thousand Three Hundred Forty Six and
77/100 Dollars ($3,346.77) each payable on or before the first
(1st) day of each month beginning August, 1996 (herein "Basic
Rent"). The rental due from the effective date of this Lease
(July 8, 1996) through the beginning of the Lease Term year
(August 1, 1996) shall be prorated and paid as set forth below.
It is further agreed that during the original term and the
renewal term, it-shall not be necessary for Lessor to demand
payment of rent, but Lessee shall pay Lessor each and every
installment of rent as the same shall become due, and payment
shall be made at such place or places as Lessor may, from time
to time, designate. Each monthly rental installment shall be due
on the first (1st) day of each month, and the Lessee shall be in
default as herein provided if said monthly rental is not
received by the tenth (10th) day of each month, which default
shall empower Lessor to utilize all powers and remedies provided
in Paragraph 17 without further notice, written or otherwise.
If any rental payment is received after the tenth (10th) day of
any month during the Lease Term, then Lessor shall not be
obligated to accept said rental payment unless it is accompanied
by a late payment penalty of five percent (5%) of the rental
payment due.
Rental Adjustments and Renewal Rent
(b) The annual rent payable monthly commencing with the rentals
due as of the commencement of the lease year of any Renewal
Term, if elected, shall be the Basic Rent plus an additional
rental increase; which rental increase shall be equal to the
Basic Rent plus the sum of i) three percent (3%) of the Basic
Rent and ii) any additional pro rata increase in Buncombe County
Ad Valorem taxes and insurance. The result of this calculation
shall be the rent for the next ensuing Lease term year. The
rentals shall be calculated on an annualized basis with rental
being paid monthly as provided with the Basic Rent. As soon as
the monthly rent for the Lease term year of the Renewal Term is
set, then Lessor shall give Lessee notice of the amount of
increased monthly rent for the next ensuing Lease term year.
Page 2
(c) Contemporaneously with the execution of this Lease, Lessee
shall pay and deposit with Lessor the sum of Five Thousand Eight
Hundred one and 07/100 Dollars ($5,801.07) ; a portion of which
sum shall constitute additional security for the payment of
rental and the performance of Lessee's other obligations as set
forth herein. The deposit shall be applied as follows:
Partial Months Rental: $2,454.30
First Monthly Rental: $3,346.77
Security Deposit: $3,000.00
---------
Subtotal due: $8,801.07
Less funds held
in escrow: <$3.000.00>
---------
Due at Lease Execution: $5,801.07
=========
If Lessee shall not be in default of payment of rental and shall
have fully complied with all of the other terms and conditions
of this Lease, then the deposit of $3,000.00 shall be returned
to Lessee. However, if Lessee shall be in default under any
term or condition of this Lease, then the Lessor may use said
deposit as a whole or partial offset for the damages resulting
from such breach.
3.
Utilities:
The Lessee shall be responsible for the furnishing and payment
of air conditioning, heat, gas, electricity, light, power, water,
sewer and any other public utilities and janitorial services of
any kind. It understood that the Lessor shall pay for Lessee's
pro rata electricity and water usage; whereupon the Lessee shall
reimburse Lessor for the amounts so paid. Lessor shall not be
liable for failure of such services.
4.
Insurance and Taxes:
(a) The Lessee shall keep the Leased Premises insured throughout
the term of this Lease, and any renewal or extension hereof,
against the claims for personal injury or property damage under
a policy of general public liability insurance in an amount of
not less than $1,000,000.00 per occurrence covering claims
arising out of bodily injury and property damage and naming
Lessor as an additional insured therein.
(b) Lessor shall provide insurance for fire and extended
coverage on the buildings and improvements located upon the
Leased Premises, but Lessee shall have no claim or right to any
insurance proceeds derived or occasioned by policies procured by
Lessor. Lessor shall not be responsible or liable to apply any
Page 3
insurance proceeds collected toward the rebuilding of the
destroyed buildings or improvements of which the Leased Premises
is a portion, except as hereinafter provided in Paragraph 9.
Lessee may, at its sole option, procure insurance for fire and
extended coverage for its fixtures, furniture, equipment, trade
fixtures and other property of Lessee located in or an the
Leased Premises.
If, because of any act or omission of Lessee, the premium rate
for any insurance affecting the buildings and improvements shall
be raised, Lessee shall pay to Lessor on demand any premium
increase resulting from such act or omission. In addition,
Lessee shall remedy any condition causing a premium increase no
later than ten (10) days after demand by Lessor.
Within ten (10) days of the commencement of this Lease by the
signing of the parties hereto and at least thirty (30) days
prior to the expiration of any policy of insurance the Lessee is
obligated to carry under this Lease, the Lessee shall furnish
the Lessor a copy of said policy of insurance and such evidence
that the premiums for said insurance for the ensuing year of
coverage are paid as Lessor shall reasonably require.
(c) The Lessor shall timely list the Leased Premises for taxes
and pay all tax assessments of whatever kind or nature assessed
against the Premises, excluding however any tax assessed against
leasehold improvements made by Lessee. The Lessee shall
promptly pay all ad valorem taxes, assessments, and other
governmental levies against the personal property of Lessee and
the improvements occasioned or made by Lessee, whether said
governmental levies are ordinary or extraordinary, foreseen or
unforeseen, together with any interest or penalties thereon, all
of which are herein called "impositions." The Lessee in addition
shall promptly list the personal property and the improvements
occasioned or made by Lessee located on the Leased Premises with
the local governmental unit responsible for impositions.
Nothing contained in this Lease shall require the Lessee to pay
any franchise, corporate, estate, inheritance, succession,
capital levy or transfer tax of the Lessor or any income,
profits, or revenue tax, or any other tax, assessment, charge,
or levy upon the rent payable by the Lessee under this Lease;
provided, however, if at any time during the term of this Lease,
under the laws of the State of North Carolina, or any political
subdivision thereof, a tax on rents is assessed against the
Lessor or the rent, as a substitution in whole or in part for
taxes assessed by such capital estate or political subdivision
on land or buildings, such pro rata tax shall be deemed to he
included in the amount which the Lessee is required to pay under
this Paragraph.
(d) Within thirty (30) days after the date any imposition due
and payable by the Lessee, as provided in this Paragraph, the
Lessee shall furnish to the Lessor, for its inspection, official
receipts of the appropriate taxing authority or other proof
satisfactory to the Lessor evidencing payment. if any imposition
shall not have been paid within the required time, then in that
event the Lessor may, but shall not be required to, pay any such
assessment, and shall thereupon become entitled to repayment from
Page 4
the Lessee on demand of any amount so paid, together with
interest thereon at the rate of First Union National Bank of
North Carolina, N.A. prime commercial lending rate plus two
percent (2%), and the, amount thus due shall constitute
additional rent hereunder.
5.
Peaceable Possession by Lessee, Use of Premises by Lessee,
Inspection by Lessor, Environmental Condition of Property and
Indemnification
(a) Lessor covenants and agrees, but does not warrant, that
Lessee, during the term of this Lease, shall have full control
and use of the Leased Premises as a package and parcel
distribution center, or for any other lawful use provided such
use is approved. On advance by Lessor, but such approval shall
not be unreasonably withheld. The Lessee shall not use or allow
the Leased Premises or any part thereof to be used or occupied
for any unlawful purpose or in violation of any certificate of
occupancy or certificate of compliance covering or affecting the
use of the Leased Premises, and will not permit any act to be
done or any condition to exist on the Leased Premises or any
article to be brought thereon which may be dangerous, unless
safe-guarded as required by law, or which may in law constitute
a nuisance, public or private, or which may make void or
voidable any insurance then in force with respect to the Leased
Premises. The Lessee shall not permit the Leased Premises to be
used by the public, as such, with restriction or in such manner
as might reasonably tend to impair the Lessor's title to the
Leased Premises. The Lessee shall not use or permit the use of
the Leased Premises for any purpose which, in the reasonable
opinion of the Lessor, would adversely affect the then value or
character of the Leased Premises. It is understood and agreed
that Lessee shall possess the Leased Premises in its "As IS"
condition with no implied warranty of habitability or fitness
for a particular purpose or other express or implied warranties
being given. Lessor expressly undertakes no responsibility,
financial or otherwise, for failure of the Leased Premises to
comply with the Americans with Disabilities Act and Lessee
covenants and agrees to indemnify and save harmless the Lessor
against and from any and all claims, damages, costs and
expenses, including reasonable attorney's fees, sustained or
claimed to have been sustained on account of a violation of said
Act.
(b) To the extent of Lessee's use, occupancy, and maintenance of
the Premises, the following shall apply: Lessee warrants and
represents to Lessor after appropriate inquiry and investigation
that: (a) while Lessee has any interest in the Leased Premises
described herein said Leased Premises is and shall at all times
hereafter continue to be used by Lessee in full compliance with
all federal, state, and local environmental laws and
regulations, including but not limited to the Comprehensive
Environmental Response, Compensation and Liability Act of 1980
("CERCLA") , Public Law No. 96-510,94 Stat. 2767, 42 CSC 9601 et
seq., and the Superfund Amendments and Reauthorization Act of
1986 ("SARA") , Public Law No. 99-499, 100 Stat. 1613, and (b)
Lessee has fully disclosed to Lessor in writing the existence,
extent and nature of any such
Page 5
hazardous materials, substances, wastes or other environmentally
regulated substances (including without limitation, any
materials containing asbestos) which Lessee is legally
authorized and empowered to maintain on, in or under the Leased
Premises or use in connection therewith, and Lessee has obtained
and will maintain all licenses, permits, and approvals required
with respect thereto, and is in full compliance with all of the
terms, conditions, and requirements of such licenses, permits,
and approvals. Lessee further warrants and represents that it
will promptly notify Lessor of any change in the nature or
extent of any hazardous materials, substances or wastes
maintained on, in or under the Leased Premises or used in
connection therewith, and will transmit to Lessor copies of any
citations, orders, notices or other material governmental or
other communication received with respect to any other hazardous
materials, substances, wastes or other environmentally regulated
substances affecting the Leased Premises.
Lessee shall indemnify and hold Lessor harmless from and against
any and all damages, penalties, fines, claims, liens, suits,
liabilities, costs (including clean-up costs), judgments and
expenses (including attorneys'. consultants', or experts' fees
and expenses) of every kind and nature suffered by (or asserted
against Lessor as a direct or indirect result of any warranty or
representation made by Lessee in the preceding paragraph being
false or untrue in any material respect or any requirement under
any law, regulation or ordinance, local, state or federal, which
requires the elimination or removal of any hazardous materials,
substances, wastes or other environmentally regulated substances.
Lessee's obligations hereunder to Lessor shall not be limited to
any extent by the term of the Lease, and, as to any act or
occurrence prior to termination of said Lease which gives rise
to liability hereunder, but shall continue, survive and remain
in full force and effect notwithstanding termination of said
Lease.
(c) The Lessee agrees to permit the Lessor, or its authorized
representative, to enter the Leased Premises during normal hours
accompanied by a representative of the Lessee for the purpose of
inspecting the Leased Premises and for the purpose of receiving
assurances as to proper use by the Lessee.
6.
Responsibilities of Parties:
(a) Except where caused by the Lessor's affirmative acts of
negligence, the Lessor shall not be liable for any personal
injury to the Lessee, its invitees, agents and employees, or to
any other occupant or guest on any part of the Leased Premises
or for any damage of any property of the Lessee, its invitees,
agents or employees, or of any other occupant or guest on any
part of the Leased Premises.
(b) The Lessee covenants and agrees during the term of this
Lease to indemnify and save harmless the Lessor against and from
any and all claims, damages, costs and expenses, including
reasonable attorney fees sustained or claimed to have been
Page 6
sustained by any person or persons or property in, upon or about
the Leased Premises. The above language notwithstanding, the
Lessor shall remain liable for actionable acts of negligence on
its part, on the part of its agents or employees.
7.
Improvements, Additions, Up-Keep, Operations of Premises and
Signs:
(a) The Leased Premises is presented to Lessee with the
leasehold improvements as existing on the date of this Lease;
with the exception of painting of the A-1 and A-2 Bays and
general cleaning of the premises. Except for said painting and
general cleaning, the Lessee hereby accepts the Leased Premises
in its "as is" condition. The Lessor shall not be responsible
or liable for any additional improvements as may be required by
the needs of Lessee. Lessee shall be responsible at Lessee's
sole cost and expense for all initial additions, alterations,
improvements, partitions, or other installations to the Leased
Premises required to present the Leased Premises to Lessee, and
such work shall be made in a workmanlike manner; provided,
however, Lessee shall make no addition, alteration, improvement,
partition or other installation without first obtaining the
prior written approval of Lessor, which said approval shall not
be unreasonably withheld.
(b) Lessee shall be responsible for normal maintenance and
upkeep of the interior of the Leased Premises and Lessee shall
surrender the Leased Premises upon termination of this Lease in
the same condition as prepared by Lessor for occupancy,
reasonable wear and tear excepted.
(c) Together with Lessees responsibility for normal interior
maintenance and upkeep as provided above, Lessee agrees to be
responsible for all routine maintenance of all ventilating and
Air conditioning systems, doors, exterior plate glass, and all
other items which are related to the interior of the Leased
Premises and which are necessary to keep the Leased Premises in
good repair. Subject to the foregoing, Lessor agrees to
maintain the exterior of the improvements of which the Leased
Premises is a portion as well as all structural parts and the
roof which are an integral part of the improvements located of
which the Leased Premises is a portion. Lessee shall promptly
notify Lessor of defects or repairs needed to said structural
parts and/or roof. Lessee's failure to promptly notify Lessor
of defects or repairs needed to structural parts and/or roof
shall relieve Lessor of his responsibility to promptly effect a
cure for said defects or repairs and shall preclude Lessee from
claiming Lessor's default or breach under this Lease for failure
to promptly cure defects or effect repairs.
(d) Lessee covenants and agrees during the term of this Lease
to continually operate the Leased Premises as a distribution
/warehouse - package and parcel distribution center and any
other lawful use provided such use is approved in advance by
Lessor, so that the Leased Premises shall be opened during normal
business hours. Said normal business hours shall be shall be
determined at the Lessee's discretion. It is the express
Page 7
intention and purpose of this covenant to require the Lessee to
continuously operate the Leased Premises during normal business
hours so that the Leased Premises will enjoy a public reputation
as an active commercial site.
(e) Any signage to be located upon the Leased Premises must
comply with all requirements of any sign ordinance and must be
aesthetically pleasing in appearance. Lessor shall have the
right to approve said signage which approval shall not be
unreasonably withheld.
8.
Removal of Fixtures:
Lessee shall have the right at any time to remove from the
Leased Premises all furniture, equipment, trade fixtures and
other personal property owned and placed in or on said premises
by Lessee, provided the same are removed without damage to the
Leased Premises and are removed at or before the termination of
the term of this Lease, All additions and improvements made on
the Leased Premises by Lessee which have become affixed to the
Leased Premises, shall become and remain the property of Lessor
without liability on the part of Lessor to pay for the same, and
the Lessee shall not be entitled to remove from the Leased
Premises such fixed improvements and additions as made by Lessee
or Lessor.
9.
Damage or Destruction:
(a) Inasmuch as the Leased Premises as hereinbefore described
includes insured leasehold improvements, then in such event that
the improvements located thereon are destroyed by fire,
unavoidable accident or other casualty, without the fault of
Lessee, during the term of this Lease, then the Lessor shall be
obligated to repair any such damage with reasonable diligence,
upon receipt of written notice from Lessee describing the nature
of the damage and the repairs required, provided that if the
improvements of which the Leased Premises are a portion shall be
destroyed more than seventy-five-percent (75%) of the
replacement cost thereof as determined at Lessor's sole
discretion by fire or other casualty, then this Lease shall
terminate and any advanced rental shall be rebated to Lessee,
subject to rental proration based on the time of the Lessee's
occupancy of the Leased Premises to the time of the damage.
Rentals shall abate during any repair term in the ratio that
such improvements are untenable owing to such fire, unavoidable
accident or other casualty damage.
(b) The provisions as to rebuilding notwithstanding, Lessor
shall be obligated only to repair any damage or rebuild to the
extent of the improvements which existed at the commencement of
this Lease and NOT as improved by Lessee. In other words,
Lessor shall not be liable to repair or rebuild work which was
occasioned or done by Lessee to the improvements on the Leased
Premises.
Page 8
10.
Eminent Domain:
(a) If the whole of the Leased Premises hereby demised shall be
taken by any public or quasi-public authority under any
governmental law, ordinance or regulation or the power of
eminent domain, or by private purchase in lieu thereof, then the
term of the Lease shall cease as of the day possession is taken
or acquired by such public authority and all rentals shall be
paid up to that date. If only a part of the Leased Premises
shall be taken or acquired as hereinabove provided, this Lease
shall be terminated only as to that portion taken by right of
eminent domain or private purchase in lieu thereof, and, this
Lease shall continue in full force and effect as to the
remainder of said Leased Premises and the rent shall be reduced
in the proportion of area taken bears to the total area demised.
If the remainder of the Leased Premises cannot be made tenable
for the purposes for which Lessee has been using the Premises,
Lessee shall have the option, to be exercised within sixty (60)
days after the filing of such eminent domain action, of
canceling this Lease effective as of the date the authority
shall take or acquire possession; provided, however, that if
more than seventy-five percent (75%) of the area of the Leased
Premises shall be taken or acquired as hereinabove provided,
either party, by written notice to the other delivered on or
before the date of surrendering possession to the public
authority, may terminate this lease, effective as of such
surrender of possession. All compensation and damages of any
type whatsoever awarded for any taking, whole or partial, shall
belong to and be the property of the Lessor except as
hereinafter provided.
(b) Lessee shall have the right to claim and recover from the
condemning authority, but not from Lessor, such compensation as
may be separately awarded or recoverable by Lessee and Lessee's
own right on account of any and all damage to Lessee's leasehold
interest by reason of any condemnation and for or on account of
any cost or loss which Lessee might be put in removing Lessee's
furniture, equipment and other personal property, or in
reimbursing for expenses incurred by Lessee through improvements
to the Leased Premises.
Assignment or Subletting:
The Lessee shall not have the right to assign this Lease,
together with all of the rights of the Lessee hereunder, or to
sublease the Leased Premises without the Lessor's prior written
consent.
12.
Liquidated Damages:
If Lessee shall, at the expiration or termination of this
Page 9
Lease, fall to yield possession to Lessor, upon demand, Lessee
will pay as liquidated damages for each day possession is
withheld after demand, an amount equal to double the amount of
the daily rent computed on a three hundred sixty-five (365) day
year basis.
13.
Reimbursement of Expenses:
(a) In case suit shall be brought for recovery of possession of
the said Leased Premises, for the recovery of rent or any other
amount due under the provisions of this Lease, or because of the
breach of any other covenant herein contained on the part of
either party to this Lease, to be kept or performed and a breach
shall be established, the prevailing party shall receive all
expenses incurred therefore, including a reasonable attorney's
fee.
(b) If Lessee shall be in default in the performance of any of
its obligations hereunder, beyond the period allowed for curing
said default, Lessor may (but shall not be obligated), in
addition to any other rights it may have at law or equity, or
under the terms of this Lease, cure such default on behalf of
Lessee, and Lessee shall reimburse Lessor upon demand for any
sums paid or costs incurred by Lessor in curing said default,
including interest, at the rate of First Union National Bank of
North Carolina's prime commercial lending rate plus two per cent
(2%) per annum from the representative dates of Lessor's making
of the payments and incurring costs, on all sums advanced-by
Lessor as aforesaid, and the amount thus due shall constitute
additional rent hereunder.
14.
Waivers and Integration Clause:
(a) The waiver of either party of any breach, of any term,
covenant, or condition herein contained, shall not be deemed to
be a waiver of such term, covenant, or condition, or any
subsequent breach of the same, or 'any other term, covenant, or
condition therein contained. The subsequent acceptance by
Lessor of payment by Lessee for rent hereunder shall not be
deemed to be a waiver of any preceding breach by the other party
or any term, covenant, or condition of this Lease, other than
the failure of Lessee to pay the particular rental so accepted
regardless of Lessor's knowledge of such preceding breach at the
time of the acceptance of such rent.
(b) No payment by the Lessee or receipt by Lessor of a lesser
amount than the monthly rent herein stimulated shall be deemed
to be other than on account of the earliest stipulated rent, nor
shall any endorsement or statement on any check or any letter
accompanying any check or payment as rent be deemed an accord
and satisfaction and Lessor may accept such check or payment
without Prejudice to Lessor's right to recover the balance of
such rent or pursue any other remedy as provided in this Lease.
Page 10
(c) This Lease contains the entire agreement between the
parties, and any executory agreement hereafter made shall be
ineffective to change, modify, discharge, or effect An
abandonment of it, in whole or in part, unless such executory
agreement is in writing and signed by the parties against whom
enforcement of the change, modification, discharge or
abandonment is sought.
15.
Hold-Over:
Any holding over after the expiration of the term of this Lease,
with the consent of the Lessor, shall be construed to be a
tenancy from month to month at a monthly rental based on a
proration of the annual rent herein specified and shall
otherwise be on the terms and conditions herein specified, so
far as applicable.
16.
Default or Breach:
Each and every one and all of the following events shall
constitute a default or breach of this Lease by Lessee (herein
Event of Default):
(a) If Lessee, or any successor or assignee of Lessee while in
possession, shall file a petition in bankruptcy or insolvency
or for reorganization under any bankruptcy act, or shall
voluntarily take advantage of any such act by answer or
otherwise, or shall make an assignment for the benefit of
creditors;
(b) If involuntary proceedings under any bankruptcy law or
insolvency act shall be instituted against Lessee, or if a
receiver or trustee shall be appointed for all or substantially
all of the property of Lessee, and such proceedings are not
dismissed or the receivership or trusteeship vacated within ten
(10) days after the institution or appointment;
(c) If Lessee fails to pay Lessor any rent or other charges when
the rent or charges shall become due in strict accordance with
the provisions of this Lease, and shall not make the payment of
other charges within ten (10) days after notice thereof by
Lessor to Lessee, and shall not make payment of rent according
to the terms and conditions set forth in Paragraph 2. If Lessor
notifies Lessee of Lessee's failure to pay rent more than two
(2) times during the lease term (or renewal term, if elected)
then no further cure period shall be applicable and an Event of
Default without cure shall have occurred;
(d) If Lessee shall fail to perform or comply with any of the
conditions of this Lease and if the nonperformance shall
continue for a term of ten (10) days after notice thereof by
Lessor to Lessee, or, if the performance cannot be reasonably
had within the ten-day period, Lessee shall not in good faith
have commenced performance within the ten-day period and shall
not diligently
Page 11
Proceed to completion of performance;
(e) If Lessee shall vacate or abandon the Leased Premises;
(f) if this Lease or the estate of Lessee hereunder shall be
transferred to or shall pass to or devolve on any other person
or party, except in the manner herein permitted;
(g) If Lessee fails to take possession of the Leased Premises on
the term commencement date, or within ten (10) days after notice
that the Leased Premises are available for occupancy if the term
commencement date shall be deferred as herein provided.
17.
Effect of Default or Breach:
Upon the occurrence of any Event of default hereunder, as set
forth in Paragraph 16, then the Lessor shall have the right, at
its bole option, to utilize any one or more of the following
rights:
(a) Lessor shall have the right to cancel and terminate this
Lease, as well as all of the right, title and interest of Lessee
hereunder, by giving to Lessee not less than ten (10) days,
notice of the cancellation and termination. On expiration of
the time fixed in the notice, this Lease and the right, title
and interest of Lessee hereunder, shall terminate in the same
manner and with the same force and effect, except as to Lessee's
liability, as if the date fixed in the notice of cancellation
and terminate on were the end of the term herein originally
determined.
(b) Lessor may elect, but shall not be obligated, to make any
payment required of Lessee herein or comply with any agreement,
term or condition required hereby to be performed by Lessee, and
Lessor shall have the right to enter the Leased Premises for the
purpose of correcting or remedying any such default and to
remain until the default has been corrected or remedied.
However, no expenditure for such correction by Lessor shall be
deemed to waive or release Lessee's breach of this Lease or the
right of Lessor to take any action as may be otherwise
permissible hereunder in the case of any default.
(c) Lessor may re-enter the Leased Premises immediately, without
being guilty of trespass and remove the property and personnel
of Lessee, and store the property in a public warehouse or at a
place selected by Lessor, at the expense of Lessee. After
reentry, Lessor shall have the right to terminate the Lease by
giving ten (10) days written notice of termination to Lessee.
Without such notice, reentry by Lessor shall not terminate the
Lease. On termination, Lessor may recover from Lessee all
damages proximately resulting from Lessee's breach, including
the cost of recovering the Leased Premises, the sums expended
under subparagraph (b) above, and the value of the balance of
this Lease .over the reasonable rental value of the Leased
Premises for the remainder of the then current Lease term, all
of which sums shall be immediately due and payable to Lessor
from Lessee.
Page 12
(d) After re-entry, Lessor may relet the Leased Premises or,
any part thereof for any term without terminating the Lease, at
a rent and on the terms that Lessor may choose, but Lessee shall
have no responsibility to reimburse Lessor for amounts above and
beyond that which would be reasonably commensurate.
18.
Arbitration:
Any controversy which shall arise between the Lessor and the
Lessee regarding the rights, duties, or liabilities hereunder of
either party shall be settled by binding arbitration. Such
arbitration shall be before one disinterested arbitrator if one
can be agreed upon, otherwise before three disinterested
arbitrators, one named by the Lessor, one named by the Lessee,
and one by the two thus chosen. The arbitrator or arbitrators
shall determine the controversy in accordance with the laws of
the State of North Carolina as applied to the facts found by him
or them.
19.
Removal of Liens by Lessee-Lessor
Right on Default to Contest:
(a) The Lessor shall not be liable for any labor or materials
furnished or to be furnished to the Lessee upon credit, and no
mechanics, or other lien for any such labor or material shall
attach to or effect the reversion or other estate or interest of
the Lessor in and to the Leased Premises. Whenever any
mechanics' or materialmen's lien shall have been filed against
the Leased Premises, based upon any act or interest of the
Lessee or of anyone claiming through the Lessee, the Lessee
shall immediately take such action by bonding, deposit or
payment as will remove the lien.
(b) If the Lessee has not removed the lien within thirty (30)
days after notice to the Lessee, the Lessor may pay the amount
of such lien or security agreement, or discharge the same by
deposit, and the amount so paid or deposited, with interest
thereon, shall be deemed additional rent reserved under this
Lease, and shall be payable forthwith with interest at the rate
of First Union National Bank of North Carolina's prime
commercial lending rate plus two percent (2%) from the date of
such advance, and with the same remedies to the Lessor as in the
case of default in the payment of rent as herein provided.
(c) The above language notwithstanding, the Lessee shall have
the right to contest the validity of any lien or claim if the
Lessee shall first have posted a bond to insure that upon final
determination of the validity of such lien or claim, the Lessee
shall immediately pay any judgment rendered against it, with all
proper costs and charges, and shall have such lien released
without cost to the Lessor.
Page 13
20.
Subordination, Estoppel:
As allowable by law, this Lease is and shall be subordinate to
any encumbrance now of record and any encumbrance recorded after
the date of this Lease affecting the Leased Premises. However,
any purchaser or transferee under said encumbrance shall
continue to recognize the rights of the Lessee so long as said
Lessee continues to honor, abide by and perform all terms,
conditions and covenants of this Lease.
Lessee shall attorn to any purchaser from Lessor either
voluntarily or at any foreclosure sale, or to any grantee or
transferee designated in any Deed given in lieu of foreclosure.
Lessee shall execute the written agreement and any other
documents required by any lender or transferee from the Lessor
to a accomplish the purposes of this Paragraph.
Whenever notices under this Lease are required of, either party
and, either party is notified that a lender exists, then lender
shall be sent duplicate originals until such time as the
indebtedness secured by the Leased Premises is paid in full.
The procedure for serving notices required herein shall comply
with the provision for Notices herein.
21.
Notices and Time:
Whenever in this Lease it shall be required or permitted that
notice or demand be given or served by either party to this
Lease to or on the other, such notice or demand shall be given
in writing by registered or certified mail, postage prepaid, or
by a nationally recognized express/ove@night carrier, to the
respective addresses as hereinafter set forth. All notices or
demands provided under the terms of this Lease shall be
effective when actually received by either party or when
attempted to be delivered as authorized above. The addresses of
either party may be changed, from time to time, by either party
serving notice as above provided:
1. Lessor at: 1916 Hendersonville Road
Asheville, North Carolina 28803
2. Lessee at: ATTN: E. Hoke Smith, Jr., Pres. & CEO
8923 Western Way, Suite 150
Jacksonville, Florida 33256
It is understood and agreed by both parties to this Lease that
time is of the essence in all matters appertaining to notices
due and given, rental payments and terms.
Page 14
22.
Covenants to Run With the Land:
All covenants, agreements, stipulations, provisions, conditions
and obligations herein expressed and set forth shall extend to,
bind and inure to the benefit of, as the case may require, the
heirs, executors, administrators, successors and assigns of
Lessor and Lessee, respectively, or their successors in
interest, as fully as if such words were written wherever
reference to Lessor and Lessee occurs in this Lease Agreement.
23.
Force Majeure Clause:
In the event that either party hereto shall be delayed or
hindered in or prevented from the performance of any act
required hereunder by reason of strikes, lock-outs, labor
troubles, inability to procure materials, failure of power,
restrictive governmental, laws or regulations, riots,
insurrection, war, or other reason of a like nature not the
fault of the party delayed in performing work or doing acts
required under the terms of this Lease, then performance of such
acts shall be excused for the period of the delay and the period
equivalent to the period of such delay. It is understood,
however, that this provision shall not operate to excuse Lessee
from the prompt payment of rental or any other payments required
by the terms of this Lease.
24.
Waiver of Subrogation:
The parties release each other, and their respective authorized
representatives, to the extent of the releasing parties
insurance coverage, from any and all liability for any loss or
damage to any person or to the Leased Premises and to the
fixtures, personal property, Lessee's improvements, and
alterations of either-Lessor or Lessee in or on the Leased
Premises that are caused by or result. from risks insured
against under any insurance policies carried by the parties and
in force at the time of any such damage.
Each party shall cause each insurance policy obtained by it to
provide that the insurance company waives all right of recovery
by way of subrogation against either party in connection with
any damage covered by any policy. Neither party shall be liable
to the other for any damage caused by fire or any of the risks
insured against under any insurance policy required by this
Lease.
Page 15
25.
Recording:
This Lease shall not be recorded but a memorandum hereof may he
prepared and recorded in the County where the Leased Premises
are located, at the expense of Lessee. The aforesaid memorandum
shall contain such information as is necessary to provide
adequate record notice of the existence of the Lease, including
the parties, the term, the property involved and whether options
to renew or purchase exist.
26.
RIGHT OF FIRST REFUSAL:
As partial consideration for this Lease, the Lessor does hereby
grant to the Lessee during the term of this Lease a Right of
First Refusal to lease Suite or Bay A-3 (herein "Refusal
Parcel") when such Refusal Parcel shall become available. This
Right of First Refusal to lease is subject to the following
terms and conditions:
(a) In the event the Lessor should receive a proposal to lease
the Refusal Parcel, then the Lessor shall furnish the Lessee
with a copy of said proposal. Upon the Lessee's receiving a
copy of said proposal, then the Lessee shall be given three (3)
business days after receiving the copy of said proposal in which
to meet the terms of said proposal and to exercise its right to
lease the Refusal Parcel.
(b) In the event the Lessee elects to exercise its Right of
First Refusal to lease the Refusal Parcel and meet the terms and
conditions of the proposal to lease, then Lessee shall be
allowed three (3) business days in which to execute the Lease
Agreement for the Refusal Parcel.
(c) The Lessee acknowledges that the Refusal Parcel is currently
under lease for an original term through May 31, 1997. The
current lessee of the Refusal Parcel has the option to renew
that lease for an additional one (1) year term.
(d) Should the Lessee exercise its right to lease the Refusal
Parcel, then the terms and conditions of the Lease Agreement for
the Refusal Parcel shall be the same as set forth herein except
as follows: i) the term of the lease for the Refusal Parcel
shall expire on the same date as set for Lessee's then remaining
current term under this Lease Agreement; ii) the rental for the
Refusal Parcel shall be equal to the then same rental rate as is
applicable to the Lessee's Leased Premises under this Lease
Agreement.
(e) As a pre-condition to the exercise of the Right of First
Refusal to lease as set forth herein, the Lessee
Page 16
must not be in breach or default under any term or condition of
this Lease.
27.
General:
The necessary grammatical changes required to make the
provisions of this Lease apply in the plural sense where there
is more than one Lessee and to either corporation, associations,
partnerships, or individuals, males or females, shall in all
instances be assumed as though in each case fully expressed.
The laws of the State of North Carolina shall govern the
validity, performance, and enforcement of this Lease.
The submission of this Lease for examination does not constitute
a reservation of or option for the Leased Premises and this
becomes effective as a Lease only upon the execution and
delivery thereof by Lessor and Lessee. The captions of the
several paragraphs contained herein are for convenience only and
do not define, limit, describe, or construe the contents of such
paragraphs.
IN WITNESS WHEREOF, the Lessor and Lessee have hereunto set
their hands and seals this the 24th day of July, 1996.
LESSOR:
(SEAL)(Signed)
J. C. Swicegood, JR.
LESSEE:
GENERAL PARCEL SERVICE, INC.
(SEAL)(Signed)
E. Hoke Smith, Jr.
President
ATTEST:
(Signed)
Wayne N. Nellums
Secretary
Page 17
July 16, 1996
EASEMENT AGREEMENT
The purpose of this document is to clarify the easement
agreement between R. Dennis Weaver and J.C. Swicegood. Swicegood
and Weaver own adjoining properties on Airport and Rockwood
Roads. Clarification Is needed to facilitate rental agreements
between Swicegood and his tenants.
The Swicegood property has problems of Ingress and egress
compounded by the widening of Airport road currently in
progress. As a goodwill gesture, Weaver wishes to alleviate the
problem by allowing Swicegood and his assigns the use of the
driveway on the Weaver property. The use of the drive is to be
limited to the traffic that is being inhibited by the
construction work on Airport Road. The open access to the drive
will cease upon completion of the current construction work
adjacent to the Swicegood property.
However, Weaver will permit use of the drive during inclement
weather and for tractor/traileir rigs who have difficulty in
negotiating the Swicegood drive. If such occasional use becomes
@ a frequent enough, in Weaver's opinion, to constitute
excessive wear and tear on t e drive, both Swicegood and Weaver
will negotiate terms of maintenance or resurfacing.
This agreement between Swicegood and Weaver will terminate if
either party should transfer ownership of their respective
properties on Airport and Rockwood Roads.
(Seal)(Signed) (Seal)(Signed)
R.E. Weaver J.G. Swicegood
7/17/96
Exhibit 10.5
STATE OF NORTH CAROLINA
COUNTY OF CUMBERLAND
BUSINESS
This Lease made on the lst day of July, 1996, by and between
Eugene G. Hair and Jean G. Hair, having their principal place of
business at 1605 Wilmington Highway, City of Fayetteville,
County of Cumberland, State of North Carolina, herein referred
to as Lessor, and GENERAL PARCEL SERVICES, INC., having its
principal place of business at 8923 Western Way, Suite 150,
Jacksonville, Florida 32256, herein referred to as Lessee.
In consideration of the mutual covenants contained herein, the
parties agree as follows:
SECTION ONE
DESCRIPTION OF PREMISES
Lessor leases to Lessee that certain property located at 1647A
Wilmington Highway, Highway 87 South, Fayetteville, North
Carolina.
SECTION TWO
TERM OF LEASE
The term of this lease is three (3) years, beginning on July 1,
1996 and terminating on June 31, 1999, at 12:00 o'clock midnight.
SECTION THREE
RENT
The annual rent under this lease is $24,000.00 and Lessee shall
pay Lessor that amount in monthly installments of $2,000.00
which includes utilities (water and electric), beginning on July
1, 1996, with succeeding payments due an the 1st day of each
month thereafter during the term of the lease.
SECTION FOUR
USE OF PREMISES
The premises are to be utilized for the purposes of parcel
services and packaging. Lessee shall restrict its use to such
purposes or to such other lawful purpose for which the premises
is suited and which is not otherwise inconsistent with the
lease, and shall not use or permit the use of the premises for
any other purpose without the written consent of Lessor, or
lessor's authorized agent.
SECTION FIVE
RESTRICTION ON USE
Lessee shall not use the premises in any manner that will
increase risks covered by insurance on the premises and result
in an increase in the rate of insurance or a cancellation of any
insurance policy, even if such use may be in furtherance of
Lessee's business purposes. Lessee shall not keep, use, or sell
anything prohibited by any policy of fire insurance covering the
premises, and shall comply with all requirements of the insurers
applicable to the premises necessary to keep in force the fire
and liability insurance.
SECTION SIX
WARRANTIES AND REPRESENTATIONS
A. COMPLIANCE WITH LAWS. Lessee shall use and occupy the
premises in accordance with and in compliance with all
applicable governmental laws, ordinances, rules and regulations
governing its business operations at the premises including all
laws, ordinances, rules and regulations pertaining to the
installation and operation of any underground or above-ground
fuel storage tank installed by Lessee with Lessor's consent as
provided in Section B, below, provided however, no alleged
violation of any governmental law, ordinance, rule or regulation
by Lessee shall be deemed to constitute a breach of this Lease
by Lessee so long as Lessee is contesting, in good faith, the
validity of any such law, ordinance, rule or regulation, or the
existence of the alleged violation thereof. However, Lessee
shall hold Lessor harmless from and against any liability or
expense by reason of any such contest or litigation concerning
any such governmental law, ordinance, rule or regulation, or the
alleged violations thereof by Lessee. If Lessee determines that
to comply with this Section six, improvements are required
solely because of Lessee's use of the premises, Lessor will make
such improvements at its sole cost and expense unless Lessee
reasonably determines that the cost of such improvements will
exceed one month's rent. In such event, unless Lessor and
Lessee can agree as to who should pay such costs, Lessee may
terminate this lease in lieu of making such improvements,
provided however, nothing contained in this Section Six shall
obligate Lessee to make any improvements whatsoever to the
premises which may be required by governmental authority unless
such improvements are solely related to Lessee's use of the
premises.
B. UNDERGROUND FUEL TANKS. Lessee shall not install any
underground or above-ground fuel storage tank without the proper
written consent of Lessor. If any such tank is installed with
Lessor's consent, Lessee covenants and agrees to remove such
tank(s) upon the expiration or earlier termination of this
lease; to remove from the premises any soil contaminated by the
release of petroleum products from such tank; and fill, compact
and resurface the evacuation area as near as practical to its
original condition.
C. HAZARDOUS AND TOXIC CONDITIONS:
(i) Lessor warrants, which warranty Lessee has relied
upon, that the premises do not contain any material classified
as toxic or hazardous under applicable federal, state, and local
laws, rules and regulations except as previously disclosed to
Lessee in writing. If a toxic or hazardous condition exists on
such property, the Lessor shall (a) promptly give Lessee written
notice of such condition; and (b) cause such toxic or hazardous
condition to be immediately cleaned up and brought into
compliance with applicable laws, ordinances and requirements of
governmental authorities with competent jurisdiction.
(ii) Lessee covenants and agrees not to release onto the
premises any material classified as toxic or hazardous under
applicable federal, state, and local laws, rules and
regulations. In the event of any such release, Lessee agrees to
immediately clean up such release and agrees to indemnify and
hold lessor harmless from and against any and all damage,
injury, claim, lien, action, or cost arising in any manner from
such release.
D. INDEMNITY. Lessee hereby agrees to indemnify, defend, and
hold harmless the Lessor from and against any and all losses,
damages, claims, suits, actions, judgments, penalties, fines,
expenses and costs, including attorneys' fees, arising out of
its breach of any warranties and covenants contained in this
section Six.
3
E. PRIOR USAGE OF PREMISES. Lessor warrants and represents
for the benefit of Lessee that the past usage of the premises
was agricultural land and that there has not been any disposal
of waste on the premises.
SECTION SEVEN
WASTE, NUISANCE, OR UNLAWFUL ACTIVITY
Lessee shall not allow any waste or nuisance on the premises, or
allow the premises to be used for any unlawful purpose(s).
SECTION EIGHT
DELIVERY, ACCEPTANCE, AND SURRENDER OF PREMISES
Lessor represents that the premises are in fit condition for use
by Lessee. Acceptance of the premises by Lessee shall be
construed as recognition that the premises are in such condition.
SECTION NINE
ENTRY ON PREMISES BY LESSOR
Lessor reserves the right to enter on the premises at reasonable
time to inspect the said premises.
SECTION TEN
BUSINESS SALE SIGNS
Lessee shall not conduct "Quitting Business", "Lost our Lease",
"Bankruptcy", or other sales of that nature on the premises
without the written consent of the Lessor.
SECTION ELEVEN
NONLIABILITY OF LESSOR FOR DAMAGES
Lessor shall not be liable for liability or damage claims for
injury to persons or property from any cause relating to the
occupancy of the premises by Lessee, including those arising out
of damages or losses occurring on sidewalks and other areas
adjacent to the leased premises during the term of this lease or
any extension thereof. Lessee shall indemnify Lessor from all
liability, loss, or other damage claims or obligations resulting
from any injuries or losses of this nature.
SECTION TWELVE
LIABILITY INSURANCE
Lessee shall procure and maintain in force, at his expense,
during the term of this lease and any extension thereof, public
liability insurance with insurers and through brokers approved
by Lessor. Such coverage shall be adequate to protect against
liability for damage claims through public use of or arising out
of accidents occurring in or around the leased premises, in a
minimum amount of Five Hundred Thousand Dollars ($500,000.00)
for each person injured and One Hundred Thousand Dollars
($100,000.00) for property damage. The insurance policies shall
provide coverage for contingent liability of Lessor on any claim
or losses. The policies shall be delivered to Lessor for
keeping.
Lessee shall obtain a written obligation from the insurers to
notify Lessor in writing at least ten (10) days prior to
cancellation or refusal to renew any policy. If the insurance
policies are not kept in force during the entire term of this
lease or any extension thereof, Lessor may procure the necessary
insurance and pay the premium therefor and the premium shall be
repaid to Lessor as an additional rent installment for the month
following the date on which the premiums were paid by Lessor.
SECTION THIRTEEN
ASSIGNMENT, SUBLEASE OR LICENSE
Lessee shall not assign or sublease the premises or any right or
privilege connected therewith, or allow any other person except
agents and employees of Lessee to occupy the premises or any
part thereof without first obtaining the written consent of
Lessor. A consent by Lessor shall not be a consent to a
subsequent assignment, sublease, or occupation by other persons.
An unauthorized assignment, sublease, or license to occupy by
Lessee shall be void and shall terminate the lease at the option
of Lessor. The interest of Lessee in this lease is not
assignable by operation of law without the written consent of
Lessor.
SECTION FOURTEEN
BREACH
The appointment of a receiver to take possession of the assets
of Lessee, a general assignment for the benefit of the creditors
of Lessee, any action taken or allowed to be taken by Lessee
under any bankruptcy act, or the failure of Lessee to comply
with each and every term and condition of this lease shall
constitute a breach of this lease. Lessee shall have ten (10)
days after receipt of written notice, or if the corrections
cannot be made within the ten (10) day period, Lessee shall
have a reasonable time to correct the default if action is
commenced by Lessee within ten (10) days after receipt of this
notice. In addition to the above referenced remedies, Lessee
shall pay Lessor a late payment fee of $25.00, per late payment,
if the monthly payment is 10 days late or more.
SECTION FIFTEEN
REMEDIES OF LESSOR FOR BREACH BY LESSEE
Lessor shall have the following remedies, in addition to its
other rights and remedies, in the event Lessee breaches this
lease agreement and fails to make corrections as set forth in
Section Eighteen:
1. Lessor may re-enter the premises immediately and remove the
property and personnel of Lessee and store the property in a
public warehouse or at a place selected by Lessor, at the
expense of the Lessee.
2. After re-entry Lessor may terminate the lease on giving
fifteen (15) days written notice of termination to Lessee;
without such notice, re-entry will not terminate the lease. On
termination, Lessor may recover from Lessee all damages
proximately resulting from the breach, including the cost of
recovering the premises and the worth of the balance of this
lease over the reasonable rental value of the premises for the
remainder of the lease term, which sum shall be immediately due
Lessor from Lessee.
3. After re-entering, Lessor may relet the premises or any part
thereof for any term without terminating the lease, at such rent
and on such terms as it may choose. Lessor may make alterations
and repairs to the premises. The duties and liabilities of the
parties, if the premises are relet as provided herein, shall be
as follows:
(a) In addition to Lessee's liability to Lessor for
breach of the lease, Lessee shall be liable for all expenses of
the reletting, for the alterations and repairs made, and for the
difference between the rent received by Lessor under the new
lease agreement and the rent installments that are due for the
same period under this lease.
(b) Lessor, at his options, shall have the right to
6
apply rent received from reletting the premises (1) to reduce
the Lessee's indebtedness to Lessor under the lease, not
including indebtedness for rent, (2) to the expenses of the
reletting and alterations on and repairs made and (3) to the
rent due under this lease as it becomes due.
If the new Lessee does not pay a rent installment promptly to
Lessor and the rent installment has been credited in advance to
payment to the indebtedness of Lessee other than rent, or if
rentals from the new Lessee have been otherwise applied by
Lessor as provided for herein, and during any rent installment
period, are less than the rent payable for the corresponding
installment period under this lease, Lessee shall pay Lessor the
deficiency, separately for each rent installment deficiency
period, and before the end of that period. Lessor may at any
time after such reletting terminate the lease for the breach on
which Lessor based the re-entry and relet the premises.
4. After re-entry, Lessor may procure the appointment of a
receiver to take possession and collect rents and profits of the
business of Lessee, and if necessary, to collect the rents and
profits the receiver may carry on the business of Lessee and
take possession of the personal property used in the business of
Lessee, including inventory, trade fixtures, and furnishings and
use them in the business without compensating Lessee.
Proceeding for appointment of a receiver by Lessor, or the
appointment of a receiver and the conduct of the business of
Lessee by the receiver, shall not terminate and forfeit this
lease unless Lessor has given written notice of termination to
Lessee as provided herein.
SECTION SIXTEEN
ATTORNEYS' FEES
If Lessor files an action to enforce any agreement contained in
this lease or for breach of any covenant or condition, Lessee
shall pay Lessor reasonable attorney's fees for the services of
Lessor's attorney in the action, all fees to be fixed by the
court.
SECTION SEVENTEEN
CONDEMNATION
Eminent domain proceedings resulting in the condemnation of a
7
part of the premises leased herein, but leaving the remaining
premises usable by Lessee for the purpose of its business, will
not terminate this lease unless Lessor, at its option,
terminates the lease by giving written notice of termination to
Lessee. The effect of any condemnation, where the option to
terminate is not exercised, will be to terminate the lease as to
the portion of the premises condemned, and the lease of the
remainder of the demised premises shall remain intact. The
rental for the remainder of the lease terra shall be reduced by
the amount that the usefulness of the premises has been reduced
for the business purposes of Lessee. Lessee hereby assigns and
transfers to Lessor any claim he may have to compensation for
damages as a result of any condemnation.
SECTION EIGHTEEN
OPTION TO RENEW
There is no option to renew this Lease.
SECTION NINETEEN
NOTICES
Any notices or other written communications permitted or
required to be given hereunder shall be given to the parties at
the
following addresses:
If to Lessors: Eugene G. and Jean G. Hair
Post Office Box 64343
Fayetteville, North Carolina 28306
If to Lessees: General Parcel Services, Inc.
Attention: Mr. Hoke Smith
8923 Western Way, Suite 150
Jacksonville, Fl 32256
or to such other address as either party may notify the other
one in writing from time to time.
SECTION TWENTY
REPRESENTATIONS OF LESSOR AND LESSEE
Lessor represents and warrants to Lessee that Lessor is the
owner of the premises which is the subject of this lease, and
that Lessor has the full right, power and authority to lease the
premises to Lessee. Lessor and Lessee each represent and
warrant to the other that they have the full necessary legal
authority to enter into this agreement.
IN WITNESS WHEREOF, the parties have executed this lease at
Fayetteville, North Carolina the day and year first above
written.
LESSEE:
DATE:
GENERAL PARCEL SERVICES, INC.
BY: (Signed) (SEAL)
PRESIDENT
ATTEST:
BY: (Signed) (SEAL)
SECRETARY
LESSOR:
DATE:
(SEAL)
EUGENE G. HAIR
DATE:
(SEAL)
JEAN G. HAIR
Exhibit 10.6
PROPERTY# 1930
TERMINATION OF LEASE
THIS AGREEMENT, made as of the 24th day of June, 1996 by and
between THE LINCOLN NATIONAL LIFE INSURANCE COMPANY, an Indiana
corporation, (herein called "Landlord") and General Parcel
Services, Inc., a Florida corporation (herein called "Tenant"),
WITNESSETH:
WHEREAS, on June 27, 1994, Landlord entered into a lease (herein
called the "Lease") with Tenant, whereby Landlord demised and
let to Tenant certain premises commonly know as:
3301-A Woodpark Boulevard, Charlotte, NC 28206
being herein called the "Premises", for an initial term of three
(3) years with no renewal option(s) exercisable by Tenant, on
the terms and conditions contained in the Lease, and
WHEREAS, landlord and Tenant have decided that it is in their
mutual best interest to cancel and terminate the Lease and it is
the intention of Landlord and Tenant to effect the cancellation
of the Lease by this instrument.
NOW, THEREFORE, in consideration of the covenants and agreements
hereinafter contained, and of the release and surrender by
Tenant of the Lease and all of its rights therein and thereunder
and all of its rights in and to Premises, and of the release by
landlord of all obligations of Tenant under the lease, and for
other good and valuable consideration, the parties hereto agree
and warrant (where specifically stated) as follows:
1. From and after August 31, 1996 (the "Termination Date")
Tenant hereby remises, releases, quitclaims, and surrenders to
Landlord, it successors and assigns forever, the Lease and all
rights of Tenant in and to the Premises, however acquired,
together with all of its right and interest (and title, if any)
in and to any and all improvements, furniture, personal
property, equipment and fixtures therein contained, and all of
the estate and rights of Tenant in and to the Lease.
TO HAVE AND TO HOLD THE SAME UNTO LANDLORD, its successors and
assigns forever, from and after said Termination Date.
2. Tenant, for itself and its successors and assigns, subject to
the warranties herein made by landlord, hereby forever releases
and discharges landlord from any and all claims, demands, or
causes of action whatsoever against Landlord, it successors and
assigns, arising after the Termination Date out of the Lease or
its use and occupancy of the Premises thereunder, or the
termination and surrender of the Lease and surrender of Premises.
3. Landlord, for itself and its successors and assigns, subject
to the warranties and indemnities herein made by Tenant, hereby
accepts the surrender of Lease and of Premises from and after
the Termination Date and hereby forever releases and discharges
Tenant, and its successors and assigns, and any and all
guarantors of the Lease, or of any of the obligations thereof,
from any and all claims, demands or causes of action whatsoever
against Tenant, its successors or assigns, arising after the
Termination Date out of the Lease or the use and occupancy of
the Premises thereunder, or the termination and surrender of the
Lease and surrender of the Premises.
4. Landlord and Tenant agree that the Lease is to be canceled
and terminated and the term thereby demised brought to an end as
of the Termination Date with the same force and effect as if the
term of the Lease were in and by the provisions thereof fixed to
expire on the Termination Date.
5. Tenant agrees that Landlord shall have the right to re-enter
upon the Premises as of the Termination Date, as fully as it
would or could have done if that were the date provided for the
expiration or termination of the Lease.
6. Landlord hereby warrants to Tenant that it is the owner of
the Premises and of the lessor's interest in the Lease, with
full power and authority to cancel and terminate same.
7. Tenant hereby warrants to Landlord that:
(a) It is the legal and equitable owner of the lessee's
interest in Lease with full power and authority to terminate
same.
(b) The Lease is not and has not been assigned or
transferred and is not and has not been hypothecated, pledged,
mortgaged or in any other way encumbered.
(c) All subleases, concessions and other rights of use
and occupancy of the Premises, insurance policies, and
maintenance and service contracts which Landlord has not elected
in writing prior hereto to continue have been legally terminated
and all charges thereunder paid in full and no cause of action
against Landlord exists as of the date hereof nor will exist
hereafter in any party to a sublease, concession, agreement, for
use or occupancy or insurance policy or maintenance or service
contract, based on inducing the breach of a contract with
respect to same.
(d) All charges for those insurance policies and
maintenance and service contracts which Landlord has elected in
writing prior hereto to continue have been paid in full, except
those accrued charges which have been approved by Landlord and
prorated to the Termination Date.
(e) All rent or other payments on any sublease or other
agreement for use and occupancy which Landlord has elected in
writing prior hereto to continue have been paid in full or
prorated to the Termination Date, the sublessees or holders
rights under other agreements are not in default thereunder, and
that rent or other charges have been approved y landlord and
prorated to the date hereof
(f) All charges for utility service (gas, water,
electricity, etc.) have been paid in full, except those charges
approved by Landlord and prorated to the Termination Date.
(g) There are no outstanding contracts for the supply of
labor or material as of the date hereof, and no work has been
done or is being done nor have materials been delivered in,
about or to Premises which has or have not been fully paid for,
for which a mechanics lien could be asserted and/or foreclosed
under the lien laws of the state in which the Premises are
located.
(h) Neither it not any of its predecessors in interest
under the Lease has done or suffered to be done anything whereby
Premises and/or Landlord's title thereto are in any manner
encumbered or charged.
(i) All taxes, charges, assessments, levies or impositions
required by the Lease to be paid by the Tenant thereunder have
been paid in full, except those charges approved by Landlord and
prorated to the Termination Date.
(j) The Premises are now and will on The Termination
Date be clean and in good order, condition and repair,
reasonable wear and tear excepted.
(k) It is the legal and equitable owner of all personal
property which win remain and which Landlord has permitted to
remain on the Premises pursuant to Paragraph 8 hereof, and that
no property other than that permitted by Landlord to remain,
will remain on the Premises as of the Termination Date.
8. Tenant agrees that if any personal property or other items
which may considered personal property remain on the Premises as
of the Termination Date, that property shall belong to Landlord
and this agreement shall constitute a bill of sale therefor to
landlord.
9. Tenant agrees to defend, indemnify and save Landlord
harmless from and against all loss or damage sustained by
Landlord (and all expenses, costs and attorneys' fees of
Landlord in any action or defense undertaken by Landlord to
protect itself from such loss or damage) resulting from any
breach by Tenant of the representations and warranties made
herein, from the Tenant's termination of the Leases, from any
lien, charge, encumbrance, or claim against the Premises, or
from any claim against landlord for which the Tenant is
responsible.
10. This agreement is executed in triplicate, either
counterpart of which is to be considered an original.
11. This agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs,
successors and assigns.
IN WITNESS THEREOF, the parties hereto have caused this
instrument to be executed by their duly authorized officers, and
their seals to be affixed and duly attested, the day and year
first above written.
Landlord: THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
By: Lincoln Investment Management, Inc.
Attorney-in-Fact
(Signed)
Joseph T. Pusateri
Vice President and Director
Real Estate Asset Manager
General Parcel Services, Inc.
Tenant
By:(Signed)
E. Hoke Smith, Jr., its
President
ATTEST:
(Signed)
Exhibit 10.7
WOODLANDS BUSINESS PARK
CHARLOTTE, NORTH CAROLINA
STANDARD INDUSTRIAL
LEASE AGREEMENT
By and Between
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
as Landlord and GENERAL PARCEL SERVICES, INC.
as Tenant
INDEX
Section Page
1. Demise of Premises 3
2. Condition of Premises 3
3. Term 3
4. Rent 3
5. Common Areas 5
6. Use of Premises 5
7. Rules and Regulations 5
8. Compliance with Laws 5
9. Hazardous Materials 5
10. Alterations 5
11. Maintenance and Repairs 6
12. Right of Entry 6
13. Utilities 6
14. Assignment and Subletting 6
15. Landlord's Lien 6
16. General Public Liability, Indemnification
and Insurance 6
17. Indemnification 7
18. Waiver of Subrogation 7
19. Damage or Destruction 7
20. Condemnation 8
21. Default and Remedies 8
22. Interest on Past Due Amounts 8
23. Security Deposit 8
24. Default by Landlord 9
25. Legal Proceedings 9
26. Notices 9
27. Quiet Possession 9
28. Subordination and Atonement 9
29. Estoppel Certificates 10
30. Landlord's Liability 10
31. Brokerage 10
32. Surrender of Premises 10
33. Holdover 10
34. Severability 10
35. Interpretation 10
36. Incorporation of Prior Agreements;
Modifications. 11
37. Waivers 11
38. No Recordation 11
39. Binding Effect, Choice of Law 11
40. Corporate Authority; Partnership Authority 11
41. Joint and Several Liability 11
42. Force Majeure 11
43. Execution of Lease 11
44. Covenants and Conditions 11
45. Submission of Lease 11
46. Additional Provisions 11
EXHIBITS AND ADDENDA
Exhibit A - Legal Description of Land for Building
Exhibit B - Drawing of Project Showing Location of Premises
Exhibit C - Rules and Regulations
Exhibit D - Form Estoppel Certificate
Exhibit E - Landlord's Work
Lease Guaranty
Rider
<PAGE>
LEASE AGREEMENT
THIS LEASE AGREEMENT is made and entered into this 30 day of
July, 1996 by and between THE LINCOLN NATIONAL LIFE INSURANCE
COMPANY, an Landlord lord") and GENERAL PARCEL SERVICES, INC.
a(n) Florida corporation ("Tenant").
1. Demise of Premises. Landlord hereby leases to Tenant and
Tenant hereby leases from Landlord for the term, at the rent,
and upon all of the conditions contained herein certain premises
(the "Premises") located in Woodlands Business Park in
Charlotte, North Carolina (the "Project"), the land on which the
Building is constructed being described by metes and bounds in
Exhibit A. The Premises, containing approximately 50,000 square
feet, is known as Building # XL, (the Building") and has an
address 3700- A Woodpark Boulevard, charlotte, North Carolina
28206, and its location within the Project is as shown on the
drawing attached hereto as Exhibit B.
2. Condition of Premises. Tenant accepts the Premises in its "as
is" condition as of the execution of this Lease, subject to all
recorded matters, laws, ordinances, and governmental regulations
and orders. Tenant acknowledges that neither Landlord nor any
agent of Landlord has made any representation as to the
condition of the Premises or the suitability of the Premises for
Tenant's intended use.
3. Term.
A. Term. The term (the "Term") of this Lease shall be for a
period of five years commencing September 1, 1996 (the
"Commencement Date") and expiring August 31,2001 (the
"Expiration Date"), unless sooner terminated pursuant to any
provision hereof.
B. Delay in Occupancy. If for any reason Landlord cannot
deliver possession of the Premises to Tenant on the Commencement
Date, Landlord shall not be subject to any liability therefor,
nor shall such failure affect the validity of this Lease or the
obligations of Tenant hereunder, except that the Commencement
Date shall be delayed until possession of the Premises is
delivered to Tenant and the Term shall be extended for a period
equal to the delay in the delivery of the Premises, plus the
number of days necessary to end the term on the last day of a
month. If Landlord fails to deliver possession of the Premises
to Tenant within ninety (90) days of the Commencement Date
specified in Section 3.1 above, through no fault or delay on the
part of Tenant, Tenant may cancel this Lease by written notice
to Landlord within ten (10) days of the expiration of such
ninety (90) day period, in which event this Lease and the
obligations of the parties hereunder shall be terminated. If
Tenant fails to give such notice within such ten (10) day
period, Tenant's right to cancel this Lease shall expire and the
Term shall commence upon delivery of possession of the Premises
to Tenant. In the event of any delay hereunder Landlord and
Tenant shall execute and deliver an amendment hereto setting
forth the revised Commencement and Expiration Dates.
C. Early Occupancy. If Tenant occupies the Premises prior to
the Commencement Date. such occupancy shall be upon all of the
terms and conditions contained herein but shall not advance the
Expiration Date.
4. Rent.
A. Base Rent. Tenant shall pay to Landlord as base rent (the
"Base Rent") Seven Hundred Seventy Five Thousand Two Hundred and
No/100 Dollars (S775,200,00) for the term, payable as follows:
1. One Hundred Fifty Five Thousand Forty ($155,040.00) per
annum (Twelve Thousand Nine Hundred Twenty ($12,920.00) per
month) for the period from September 1, 1996 through
August 31, 2001;
B. Additional Rent. All charges due and payable by Tenant other
than Base Rent are herein called "Additional Rent." The term
"Rent" shall mean Base Rent and Additional Rent.
C. Time and Manner of Payment. Payments of Rent are to be made
to Landlord's authorized Agent, Childress Klein Properties,
2020-A Starita Road. Charlotte, North Carolina 28206, or as
Landlord shall hereafter designate, Rent shall be due and
payable upon in advance on the first (1st) day of each month.
without offset. deduction or demand. The burden of proof of
full payment shall be upon Tenant. Upon any termination of this
Lease not resulting from Tenant's default, and after Tenant has
vacated the Premises as required herein, an equitable adjustment
shall be made as to all payments made by or due from Tenant.
D. Late Charges. Tenant's failure to pay rent promptly may
cause Landlord to incur unanticipated costs. The amount of such
costs are difficult to ascertain, and therefore on any rent
payment not made within ten (10) days after it is due Tenant
shall pay Landlord a late charge equal to fifteen percent (15%)
of the overdue amount. The parties agree that such late charge
represents a fair and reasonable estimate of the costs Landlord
will incur by reason of such late payment.
E. Proportionate Share. Tenant's "Proportionate Share" as used
in this Lease shall be obtained by multiplying the expense in
question by a fraction, the numerator of which shall be the
square footage area of the Premises and the denominator of which
shall be the square footage area of the Building. If a
particular expense is incurred or charged to more than one
building in the Project rather than solely to the Building,
then, for the purposes of calculating Tenant's Proportionate
Share with respect the Building, such multi-building expense
shall be allocated to Building by multiplying the expense in
question by a fraction, the numerator of which shall be the
square footage of the Building and the denominator of which
shall be the square footage area of the buildings for which the
expense was incurred or otherwise allocated to, with the
resulting number being used to calculate Tenant's Proportionate
Share as to the Premises.
F. Real Property Taxes. Tenant shall pay monthly one-twelfth
(1/12) of its Proportionate Share of annual Real Property Taxes
in excess of $0.00 per square foot any calendar year, with the
monthly Proportionate Share payments being paid in such amount
as Landlord may reasonably estimate. If Tenant has overpaid or
underpaid the actual amount due, the excess shall be credited
against or added to Tenant's next payment due. A tax bill
submitted by Landlord to Tenant shall be conclusive evidence of
the amount of Real Property Taxes, as well as the items taxed.
"Real Property Taxes" shall mean: 1. any fee, license fee,
license tax, business license fee, commercial rental tax, levy,
charge, assessment, government charge or tax imposed by any
taxing authority against the Building or land upon which the
Building is located; 2. any tax on the Landlord's right to
receive, or the receipt of, rent or income from the Building or
against Landlord's business of leasing the Building; 3. any tax,
or charge, or assessment, or any assessment for repayment of
bonds for fire protection, streets, sidewalks, road maintenance,
refuse or other services provided to the Building by any
governmental agency; 4. any charge or fee replacing any tax
previously included within the definition of real property tax;
and 5. any costs incurred by Landlord in contesting such Real
Property Taxes. whether successful of not. Real Property Taxes
does not, however, include Landlord's federal or state income,
franchise, inheritance or estate taxes. Tenant shall pay when
due all taxes charged against trade fixtures, furnishings,
equipment or any other personal property belonging to Tenant.
G. Insurance. Landlord shall maintain such insurance on the
Building as Landlord reasonably deems appropriate. Tenant shall
pay monthly one-twelfth (1/12th) of its Proportionate Share of
all premiums paid for such insurance in excess of $0.00 per
square foot for any calendar year, with the monthly
Proportionate Share payments being paid in such amount as
Landlord may reasonably estimate. If the amount paid by Tenant
toward insurance premiums exceeds or is less than the actual
amount due, the excess shall be credited against or the amount
underpaid shall be added to Tenant's next succeeding payment due
under this Section. Insurance invoices submitted by Landlord to
Tenant shall be conclusive evidence of the amount of the
premiums as well as the items insured.
H. Common Expenses. Tenant shall pay monthly one-twelfth
(1/12th) of its Proportionate Share of Common Expenses (as
hereinafter defined) for any calendar year in such amount as
Landlord may reasonably estimate. After each calendar year,
Landlord shall deliver to Tenant a statement setting forth, in
reasonable detail, the actual Common Expenses paid or incurred
by Landlord during the preceding calendar year and Tenant's
Proportionate Share thereof. If the amount paid by Tenant for
Common Expenses exceeds or is less than Tenant's Proportionate
Share as shown by the statement, the excess shall be credited
against or the amount underpaid shall be added to Tenant's next
payment due under this Section- In this Lease, "Common Expenses"
shall mean all costs incurred by Landlord in repairing,
maintaining and operating the Building and the Common Areas
(other than (i) expenses recoverable under Sections 4.6 or 4.7
above and (ii) expenses incurred by Landlord in satisfying its
obligations under Section 11.1 below). Common Expenses shall
include, but are not limited to, the following: gardening and
landscaping; electrical, gas, water and sewer service and
maintenance, repair and replacement of the facilities providing
the same, to the extent not separately metered to tenants of the
Building; maintenance, repair and replacement of signs; premiums
for liability, property damage, fire and other types of casualty
insurance on the Common Areas and worker's compensation
insurance; charges and assessments by the owners' association,
if any Project; real property taxes with assessments levied on
or attributable to the Common Areas and all improvements
thereon; all personal property taxes and assessments levied on
or attributable to the Common Areas and all improvements
thereon; all personal property taxes levied on or attributable
to personal property used in connection with the Common Areas,
the Building or the Project; straight-line depreciation on
personal property owned by Landlord and consumed or used in the
operation or maintenance of the Common Areas; rental or lease
payments paid by Landlord for rented or leased personal property
used in the operation or maintenance of the Common Areas or the
Building; fees for required licenses and permits; repairing,
replacing, resurfacing, repaving, maintaining, painting,
lighting, cleaning, refuse removal, security and similar items;
reserves for roof replacement and exterior painting and other
appropriate reserves; and a reasonable management fee.
5. Common Areas.
A. Common Areas. In this Lease, "Common Areas" shall mean all
areas within the Project which are available for the common use
of tenants of the Project and which are not part of the Premises
or the premises of other tenants. Landlord may from time to
time change the size, location, nature and use of any of the
Common Areas. Tenant acknowledges that such activities may
result in occasional inconvenience and such activities and
changes shall be expressly permitted if they do not materially
affect Tenant's use of the Property.
B. Use of Common Areas. Tenant shall have the nonexclusive
right (in common with all others to whom Landlord has granted or
may grant such rights) to use the Common Areas for the purposes
intended, subject to such reasonable rules and regulations as
Landlord may establish from time to time. Tenant shall abide by
such rules and regulations and shall use its best effort to
cause others who use the Common Areas with Tenant's expressed or
implied permission to abide by Landlord's rules and regulations.
Tenant shall not, at any time, interfere with the rights of
Landlord, other tenants, or any other person entitled to use the
Common Areas.
C. Vehicle Parking. Tenant shall be entitled to use the vehicle
parking spaces in the Project allocated to Tenant without paying
any additional rent. Tenant's parking, other than for the
loading dock(s) adjacent to the Premises, shall not be reserved
and shall be limited to vehicles no larger than standard size
automobiles or pickup utility vehicles. Tenant shall not cause
large trucks or other large vehicles to be parked in any area
within the Project or on the adjacent public streets except for
the loading dock(s) adjacent to the Premises. Temporary parking
of large delivery vehicles in the Project may be permitted by
the rules and regulations established by Landlord. Vehicles
shall be parked only in striped parking spaces and not in
driveways, loading areas or other locations not specifically
designated for parking.
D. Common Area Maintenance. Landlord shall maintain the Common
Areas in good order, condition and repair. Landlord's cost of
such maintenance, repair and replacement shall be included as a
Common Expense which is subject to proportionate reimbursement
as provided in Section 4.9 above.
6. Use of Premises. Tenant shall use and occupy the Premises
throughout the full Term for the purpose of General office,
receiving, storing, shipping and selling (other than retail)
products, materials and merchandise made and/or distributed by
Tenant only, and for no other use or purpose.
7. Rules and Regulations. Tenant shall faithfully observe and
comply with the rules and regulations attached to this Lease as
Exhibit C, as well as all modifications thereof and additions
thereto as are from time to time promulgated by Landlord (the
"Rules and Regulations").
8. Compliance with Laws. Tenant covenants and agrees that it
will observe and comply with all laws, orders, rules and
regulations of any governmental authority relating to Tenant's
use and occupancy of the Premises, and will not permit the
Premises to be used for illegal purposes nor permit any nuisance
to be created or maintained thereon.
9. Hazardous Materials. Tenant shall not store, use, generate,
maintain or remove asbestos, PCB transformers, other toxic,
hazardous or contaminated substances and underground storage
tanks (collectively, "Hazardous Materials") in, on, about or
from the Premises without the prior written consent of Landlord.
In any event, during the term of this Lease, Tenant shall
comply with all statutes, ordinances, rules, orders, regulations
and requirements of the Federal, State, County and City
Governments and all departments thereof having jurisdiction over
the Premises which are applicable to the presence, storage, use,
generation, maintenance and removal of Hazardous Materials in,
on or about the Premises.
10. Alterations. Tenant shall make no alterations, additions,
replacements or improvements to the Premises without the express
written consent of Landlord. Landlord may require Tenant to
provide demolition and/or lien and completion bonds in form and
amount satisfactory to Landlord. Tenant shall promptly remove
any alterations, additions, or improvements constructed in
violation of this Section upon Landlord's written request. All
alterations, additions, and improvements will be accomplished in
a good and workmanlike manner, in conformity with all applicable
laws and regulations, by a contractor approved by Landlord.
Tenant agrees that should it make any alterations, additions,
replacements or improvements to the Premises, it will not be
acting as agent or servant of in making any alterations and
shall pay when due all claims for labor and material furnished
to the Premises. Tenant shall give Landlord at least ten (10)
days' prior written notice of the commencement of any work on
the Premises. Landlord may elect to record and post notices of
non-responsibility on the Premises,
11. Maintenance and Repairs.
A. Landlord's Obligations. Except for any repairs occasioned by
the act or omission of Tenant, Tenant's agents, employees,
contractors, licensees or invitees, which repairs shall be the
responsibility of Tenant, Landlord shall maintain in good repair
the roof, foundations and structural walls of the Premises, not
including doors and windows. Landlord shall not be obligated to
make any repairs until notified in writing by Tenant, and
Landlord shall then have a reasonable period of time to make
such repairs. Landlord shall not be liable for any damage or
loss occasioned by Landlord's failure to repair the Premises
unless it shall have failed to make such repair within a
reasonable time following written notice from Tenant of the need
for such repair.
B. Tenant's Obligations. Tenant shall at its own expense keep
and maintain in good order, condition and repair the entire
Premises, other than those portions for which Landlord shall be
responsible as set out above, including, without limitation,
interior walls, floors, ceiling, heating and air conditioning,
electrical, and plumbing. Tenant shall maintain a preventive
maintenance contract providing for the regular inspection and
maintenance of the heating and air conditioning system by a
licensed heating and air conditioning contractor. Maintenance
and repairs of all improvements made by Tenant shall be the sole
responsibility of Tenant. Tenant shall keep the Premises and
adjacent grounds, including loading docks and parking lots,
alongside of and in the vicinity of same in a good, clean, and
sanitary condition and appearance.
If Tenant fails to maintain and repair the Premises, Landlord
may, on ten (1O) days' prior notice (except that no notice shall
be required in case of emergency) enter the Premises and perform
such repair and maintenance on behalf of Tenant. In such case,
Tenant shall reimburse Landlord for all costs so incurred
immediately upon demand.
12. Right of Entry. Landlord, and its agents or other
representatives, shall have the right to enter into and upon the
Premises or any part thereof at all reasonable times for the
purpose of examining the same, making repairs or alterations, or
showing the Premises to prospective purchasers of the Building.
Tenant agrees at any time within six (6) calendar months before
the expiration of this Lease to allow Landlord to enter upon the
Premises and to affix upon any suitable part thereof notice for
reletting same, and that Tenant will not remove same and will
permit all persons authorized by Landlord to view said Premises
at reasonable times.
13. Utilities. All heat, electric current, gas, garbage, or
special fees, metering charges, sprinkler fees or bonds, or
utility charges of any nature used on the Premises shall be paid
for by Tenant. Landlord shall not be liable to Tenant for
interruption in or curtailment of any utility service, nor shall
any such interruption or curtailment constitute a constructive
eviction or grounds for rental abatement in whole or in part
14. Assignment and Subletting. No portion of the Premises or of
tenant's interest in this Lease may be acquired by any other
person or entity, whether by assignment, mortgage, sublease,
transfer, operation of law, or act of Tenant or any change in
controlling interest of Tenant, without Landlord's prior written
consent. Any attempted transfer without consent shall be void
and shall constitute a breach of this Lease. No transfer
permitted hereunder shall release Tenant or change Tenant's
primary liability to pay the Rent. Landlord's acceptance of
rent from any other person is not a waiver of any provision of
this Lease. Consent to one transfer is not a consent to any
subsequent transfer. If Tenant's transferee defaults under this
Lease, Landlord may proceed directly against Tenant without
pursuing remedies against the transferee.
15. Landlord's Lein. To secure the payment Of Tenant and the
performance of Tenant's other obligations hereunder, Tenant
hereby grants Landlord a first priority security interest
(pursuant to the Uniform Commercial Code of North Carolina) in
all the inventory, furniture, fixtures, equipment and other
personal property of Tenant in or about the Premises or that may
be placed therein during the Term. No fixtures or personal
property of Tenant shall be removed from the Premises after the
occurrence of a default under this Lease, unless Landlord gives
its specific prior written consent. Tenant appoints Landlord
its attorney-in-fact to execute any financing statements and
other instruments necessary to perfect the security interest
granted herein and to carry out the terms of this paragraph.
Upon the occurrence of an event of default by Tenant under this
Lease, Landlord shall have the option, in addition to any other
remedies provided herein or by law, to enter upon the Premises
with or without the permission of Tenant and take possession of
any and all personal property of Tenant situated on the Premises
without liability for trespass or conversion and to enforce the
security interest hereby granted in any manner provided by law
or equity.
16. General Public Liability, Indemnification and Insurance.
(A). Except to the extent Tenant is released from liability in
paragraph 16(C), Tenant shall be responsible for, shall
insure against, and shall indemnify Landlord, its employees and
agents and hold them harmless from any and all liability for any
loss, damage or injury to person or property occurring in, on or
about the Premises and Tenant hereby releases Landlord, its
employees and agents from any and all liability for the same.
Tenant's obligation to indemnify Landlord, its employees and
agents hereunder shall include the duty to pay all costs of
defense against any claims asserted by reason of such loss,
damage or injury, including any judgments, settlements, costs,
fees and expenses, and attorneys' fees, incurred in connection
therewith.
(B). Tenant shall at all times during the term of this Lease
carry, at its own expense, one or more policies of general
public liability and property damage insurance, issued by one or
more insurance companies acceptable to Landlord, with a minimum
combined single limit for bodily injury of $1,000,000 per
occurrence and an annual aggregate limit (solely applicable to
the Premises) of $2,000,000, and insuring against any and all
liability for which Tenant is responsible hereunder. Such
insurance policy or policies shall name Landlord as an
additional insured. Tenant shall furnish Landlord with
certificates evidencing such insurance which certificate shall
state that the insurer will endeavor to provide ten (10) days
prior written notice of policy cancellation to Landlord. Should
Tenant fail to carry such insurance and to furnish Landlord with
certificates of insurance after a request to do so, Landlord
shall have the right to obtain such insurance and collect the
cost thereof from Tenant as additional rent.
(C). Landlord shall be responsible for, shall have the
obligation to insure against, and shall indemnify Tenant and
hold it harmless from, any and all liability for any loss,
damage or injury to person or property occurring in, on or about
the common areas and facilities of the Building and the walks,
driveways, parking lot and landscaped areas adjacent the
Building Landlord will supply certificates of insurance
evidencing such insurance at Tenant's written request.
17. Indemnification. Tenant shall indemnify Landlord against
and hold Landlord harmless from any and all costs, claims or
liability arising from. (a) Tenant's use of the Premises; (b)
the conduct of Tenant's business or anything else done or
permitted by Tenant to be done in or about the Premises; (c) any
breach or default in the performance of Tenant's obligations
under this Lease, (d) any misrepresentation or breach of
warranty by Tenant under this Lease; or (e) other acts or
emissions of Tenant, its agents, employees, visitors, and
business invitees. Tenant shall defend Landlord against any
such costs, claims or liabilities at Tenant's expense with
counsel reasonably acceptable to Landlord or, at Landlord's
election, Tenant shall reimburse Landlord for any legal fees or
costs incurred by Landlord in connection with any such claim.
As a material part of the consideration to Landlord, Tenant
hereby assumes all risk of damage to property or injury to
persons in or about the Premises arising from any cause, and
Tenant hereby waives all claims in respect thereof against
Landlord, except for any claim arising out of Landlord's gross
negligence or willful misconduct.
18. Waiver of Subrogation. Landlord and Tenant agree, provided
that such agreement does not invalidate or prejudice any policy
of insurance, that, in the event the Premises or the fixtures,
leasehold improvements, furniture, equipments, or merchandise
therein, are damaged or destroyed by fire or other casualty
which is covered by insurance of either the Landlord or the
Tenant the rights of either party, if any, against the other, or
against the employees, agents, or licensees of any party with
respect to such damage or destruction and with respect to any
loss resulting therefrom, including the interruption of the
business of any party, are hereby waived to the extent of the
coverage of said insurance Landlord and Tenant agree further
that all policies of fire, extended coverage, business
interruption, all risk or other insurance covering the Premises,
or the contents, fixtures, equipment and improvements thereon,
shall, if obtainable, contain a clause or endorsement providing
in substance that the insurance shall not be prejudiced by
virtue of this waiver. Any additional premiums on account
thereof shall be paid by the party benefited.
19. Damage or Destruction.
A). Partial Damage to Premises. Tenant shall notify Landlord in
writing immediately upon the occurrence of any damage to the Premises.
If the damage can be completely repaired within ninety (90) days from
the date of such damage and the cost of such repairs do not exceed fifty
percent of the value of the Premises, Landlord shall repair the
damage as soon as reasonably possible. Otherwise, Landlord may
elect either to (a) repair the damage as soon as reasonably
possible, or (b) terminate this Lease as of the date the damage
occurred. Landlord shall notify Tenant within thirty (30) days
after receipt of notice of the occurrence of the damage, whether
Landlord elects to repair the damage or terminate the lease. If
the damage to the Premises occurs during the last six (6) months
after the Lease terminates, and if such damage or destruction is
not the result of the act or omission of Tenant, Landlord or
Tenant may elect to terminate this Lease.
B. Total or Substantial Destruction. If the Premises is totally
or substantially destroyed by any cause whatsoever, or if the
Premises is in a building which is substantially destroyed (even
though the Premises is not totally or substantially destroyed),
this lease shall terminate as of the date the destruction
occurred. However, if the Premises can be rebuilt within one
(1) year after the date of destruction, Landlord may elect to
rebuild the Premises at Landlord's own expense, in which case,
this Lease shall remain in full force and effect- Landlord shall
notify Tenant of such election within thirty (30) days after the
occurrence of total or substantial destruction.
C. Temporary Reduction of Rent. If the Premises is totally or
substantially destroyed, or if the Premises is damaged through
no fault of Tenant's, and the Premises is repaired pursuant to
the provisions of this Article, rent payable during the period
of such damage, repair and/or restoration shall be reduced
according to the degree, if any, to which Tenant's use of the
Premises is impaired. Tenant shall not be entitled to any other
compensation, reduction, or reimbursement from Landlord as a
result of any damage, destruction, repair, or restoration of or
to the Premises.
20. Condemnation. If all or any portion of the Premises is
taken through eminent domain or sold under threat of such taking
(all of which are called "Condemnation"), this Lease shall
terminate as to the part taken or sold on the date the
condemning authority takes title or possession, whichever occurs
first. Any Condemnation award or payment shall be distributed
in the following order: (a) first, to any ground lessor,
mortgagee or beneficiary under a deed of trust encumbering the
Premises for the amount of its interest in the Premises, (b)
second, to Tenant, only the amount of any award specifically
designated for loss of or damage to Tenant's trade fixtures or
removable personal property; and (c) third, to Landlord the
remainder of such award. whether as compensation for reduction
in the value of the leasehold, the taking of the fee, or
otherwise.
21. Default and Remedies.
A. Defaults. Tenant shall be in material default under this
Lease:
If Tenant abandons or vacates the Premises;
If Tenant fails to pay rent or any other charge as and when due,
If Tenant fails to perform any of Tenant's other obligations
under this Lease for a period of thirty (30) days after written
notice from Landlord; provided that if more than thirty (30)
days are required to complete such performance, Tenant shall not
be in default if Tenant commences such performance within the
thirty (30) day period and thereafter diligently pursues its
completion.
If Tenant makes a general assignment or general arrangement for
the benefit of creditors; if a petition for adjudication of
bankruptcy or for reorganization or rearrangement is filed by or
against Tenant and is not dismissed within thirty (30) days; if
a trustee or receiver is appointed to take possession of
substantially all of Tenant's assets located at the Premises or
of Tenant's interest in this Lease and possession is not
restored to Tenant within thirty (30) days; or if substantially
all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease is subjected to attachment, execution or
other judicial seizure which is not discharged within thirty
(30) days.
B. Remedies. On the occurrence of any default by Tenant,
Landlord may, at any time thereafter. with or without notice or
demand and without limiting Landlord in the exercise of any
right or remedy which Landlord may have:
1. Terminate Tenant's right to Possession of the Premises, in
which case Tenant shall immediately surrender possession of the
Premises to Landlord. In such event, Landlord shall be entitled
to recover from Tenant all damages incurred by Landlord by
reason of Tenant's default, including (a) the worth at the time
of the court award of the unpaid Base Rent, Additional Rent and
other charges which had been earned at the time of the
termination; (b) the worth at the time of the court award of the
amount by which the unpaid Base Rent, Additional Rent and other
charges which would have been earned after termination until the
time of the award exceeds the amount of such rental loss that
Tenant proves could have been reasonably avoided; (c) the worth
at the time of the court award of the amount by which the unpaid
Base Rent, Additional Rent and other charges which would have
been paid for the balance of the term after the time of award
exceeds the amount of such rental loss that Tenant proves could
have been reasonably avoided; and (d) such other amounts as are
necessary to compensate Landlord for the detriment caused by
Tenant's failure to perform its obligations under the Lease,
including, but not limited to, the cost of recovering possession
of the Premises, expenses of relenting, including necessary
renovation or alteration of the Premises, Landlord's reasonable
attorneys' fees incurred in connection therewith, and any real
estate commission paid or payable. As used above, the "worth at
the time of the court award" is computed by allowing interest on
unpaid amounts at the rate of twelve (12%) per annum, or such
lesser amount as may then be the maximum lawful rate;
2. Maintain Tenant's right to possession, in which case this
Lease shall continue in effect whether or not Tenant shall have
abandoned the Premises. In such event, Landlord shall be
entitled to enforce all of Landlord's rights and remedies tinder
this Lease, including the right to recover the rent as it
becomes due hereunder;
3. Pursue any other remedy now or hereafter available to
Landlord under the laws or judicial decisions of the state in
which the Premises is located. Landlord's exercise of any right
or remedy shall not prevent it from exercising any other right
or remedy.
22. Interest on Past Due Amounts. Any amount owed by Tenant to
Landlord which is not paid when due shall bear interest at the
rate of fifteen percent (15%) per annum from the due date of
such amount, in addition to any late charges due under this
Lease. If the interest rate specified in this Lease is higher
than the rate permitted by law, the interest rate is hereby
decreased to the maximum legal interest rate permitted by law.
23. Security Deposit. Upon the execution of this Lease, Tenant
shall deposit with Landlord a cash Security Deposit
in the amount of Twelve Nine Hundred Twenty and No/100 Dollars
($12920.00). Landlord may apply all or part of the Security
Deposit to any unpaid rent or other charges due from Tenant or
to cure any other defaults of Tenant. If Landlord uses any part
of the Security Deposit, Tenant shall restore the Security
Deposit to its full amount within ten (10) days after Landlord's
written request. No interest shall be paid on the Security
Deposit. Landlord shall not be required to keep the Security
Deposit separate from its other accounts and no trust
relationship is created with respect to the Security Deposit.
24. Default by Landlord. Tenant shall give written notice of
any failure by Landlord to perform any of its obligations under
this Lease to Landlord. Landlord shall not be in default under
this Lease unless Landlord fails to cure such non-performance
within thirty (30) days after receipt of Tenant's notice.
However, if such non-performance reasonably requires more than
thirty (30) days to cure, Landlord shall not be in default if
such cure is commenced within such thirty (30) day period and
thereafter diligently pursued to completion.
25. Legal Proceedings. Should this Lease or the parties'
obligations hereunder be the subject of litigation between
Landlord and Tenant, it is expressly agreed that the prevailing
party will have its reasonable legal fees, costs and expenses
reimbursed by the other party.
26. Notices. All notices required or permitted under this Lease
shall be in writing and shall be personally delivered or sent by
certified or registered mail, return receipt requested, or sent
by Federal Express or other recognized delivery service.
Notices shall be effective upon delivery or attempted delivery
in accordance with this Section. Notices to Landlord and Tenant
shall be addressed as follows:
TENANT: To the Premises or to
General Parcel Services- Inc.
8923 Western Way
Jacksonville. Florida 32256
Attention: E. Hoke Smith, Jr.
LANDLORD:
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
c/o Childress Klein Properties
One First Union Center, Suite 2800
Charlotte, North Carolina 28202-6021
Attention: Industrial Division
with a copy to:
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
c/o Lincoln Investment Management, Inc.
200 East Berry Street, P.O. Box 7818
Fort Wayne, Indiana 46801
Attention: Asset Manager--industrial Properties
Either party may change its notice address upon written notice
to the other party.
27. Quiet Possession. Upon paying the Rent and observing and
performing all of the covenants, conditions and provisions on
Tenant's part to be observed and performed hereunder, Tenant
shall have quiet possession of the Premises for the entire Term,
subject to all of the provisions of this Lease.
28. Subordination and Attornment.
(A). Subordination. Landlord shall have the right to
subordinate this Lease to any ground lease, deed of trust or
mortgage encumbering the Premises, any advances made on the
security thereof and any renewals, modifications,
consolidations, replacements or extensions thereof, whenever
made or recorded. However, Tenant's right to quite possession
of the Premises during the Term shall not be disturbed if Tenant
pays the rent and performs all of Tenant's obligations under
this Lease and is not otherwise in default. If any ground
lessor, beneficiary or mortgagee elects to have this Lease prior
to the lien of its ground lease, deed of trust or mortgage and
gives written notice thereof to Tenant, this Lease shall be
deemed prior to such ground lease, deed of trust or mortgage
whether this Lease is dated prior or subsequent to the date of
said ground lease, deed of trust or mortgage or date of
recording thereof.
B. Attornment. If Landlord's interest in the Premises is
acquired by any ground lessor, beneficiary under a deed of
trust, mortgagee, or purchaser at a foreclosure sale, Tenant
shall attorn to the transferee of or successor to Landlord's
interest in the Premises and recognize such transferee or
successor as Landlord under this Lease. Tenant waives the
protection of any statute or rule of law which gives or purports
to give Tenant any right to terminate this Lease or surrender
possession of the Premises upon the transfer of Landlord's
interest.
C. Signing of Documents. Tenant shall sign and deliver any
instrument or documents necessary or appropriate to evidence any
such attornment or subordination or agreement to do so. Such
subordination and attornment documents may contain such
provisions as are customarily required by any ground lessor,
beneficiary under a deed of trust or mortgagee. If Tenant fails
to do so within ten (10) days after written request. Tenant
hereby makes, constitutes and irrevocably appoints Landlord, or
any transferee or successor of Landlord, the attomey-in-fact of
Tenant to execute and deliver any such ins instrument or
document.
D. Mortgagee Protection. Tenant agrees to give any mortgagees
and/or trust deed holders, by registered mail, a copy of any
notice of default served upon Landlord, provided that prior to
such notice Tenant has been notified, in writing (by way of
Notice of Assignment of Rents and Leases, or otherwise). of the
address of such mortgagees and/or trust deed holders. Tenant
further agrees that if Landlord shall have failed to cure such
default within the terms provided for in this Lease, then the
mortgagees and/or trust deed holders shall have an additional
thirty (30) days within which to cure such default or, if such
default cannot be cured within that time, then such additional
time as may be necessary, if within such thirty (30) days any
mortgagee and/or trust deed holder has commenced and is
diligently pursuing the remedies necessary to cure such default
(including, but not limited to, commencement of foreclosure
proceedings, if necessary to effect such cure), in which event
this Lease shall not be terminated while such remedies are being
so diligently pursued.
29. Estoppel Certificates. Upon Landlord's written request,
Tenant shall execute. acknowledge and deliver to Landlord a
written statement in substantially the form attached hereto as
Exhibit D. Tenant shall deliver such statement to Landlord
within ten (10) days after Landlord's request. Any such
statement by Tenant may be given by Landlord to any prospective
purchaser or encumbrancer of the Premises. Landlord, such
purchaser or encumbrancer may rely conclusively upon such
statement as true and correct.
30. Landlord's Liabilities. The obligations of the Landlord
under this Lease do not constitute personal obligations of
Landlord or the individual partners, joint ventures, directors,
officers. shareholders or beneficial owners of the Landlord, and
Tenant shall look solely to the Building and to no other assets
of the Landlord for satisfaction of any liability in respect to
this Lease. Tenant will not seek recourse against Landlord or
such individuals or entities or such other assets for such
satisfaction. As used in this Lease, the term "Landlord" means
only the current owner or owners of the fee title to the
Premises or the leasehold estate under a ground lease of the
Premises at the time in question. Any Landlord who transfers
its title or interest is relieved of all liability with respect
to the obligations of Landlord under this Lease to be performed
on or after the date of transfer. However, each Landlord shall
deliver to its transferee, by actual transfer or appropriate
credits, all funds previously paid by Tenant if such funds have
not yet been applied under the terms of this Lease.
31. Brokerage. This Lease has been negotiated through the
agency (ies) of Tribek Properties, who represents General Parcel
Services, Inc. and Childress Klein Properties, who represents
Landlord, and Tenant warrants and represents to Landlord that no
other broker was involved with the leasing of the Premises or
the negotiation of this Lease or is entitled to any commission
in connection herewith. Tenant agrees to indemnify and hold
Landlord harmless against any other claims (including court
costs and attorneys fees) for commissions by any other broker.
32. Surrender of Premises. Upon termination of the Lease, by
expiration of term, or otherwise, Tenant shall redeliver to
Landlord the Premises broom clean and in good order and
condition, ordinary wear and tear excepted. In addition,
Landlord may require Tenant to remove any alterations, additions
or improvements (whether or not made with Landlord's consent)
prior to the termination of the Lease and to restore the
Premises to its prior condition, all at Tenant's expense. All
alterations, additions and improvements which Landlord has not
required Tenant to remove and which Tenant has not removed shall
become Landlord's property and shall be surrendered to Landlord
upon the termination of the Lease. Tenant shall remain liable
for holdover rent until the Premises shall be returned in such
order to Landlord.
33. Holdover. Tenant shall vacate the Premises upon the
expiration or earlier termination of this Lease. Tenant shall
reimburse Landlord for and indemnify Landlord against all
damages incurred by Landlord from any delay by Tenant in
vacating the Premises. If Tenant does not vacate the Premises
upon the expiration or earlier termination of the Lease and
Landlord thereafter accepts rent from Tenant, Tenant's occupancy
of the Premises shall be a "month-to-month" tenancy, subject to
all of the terms of this Lease applicable to a month-to-month
tenancy, except that the Base Rent for such tenancy shall be two
hundred percent (200%) of the Base Rent in effect at the
expiration of the Lease.
34. Severability. A determination by a court of competent
jurisdiction that any provision of this Lease or any pan thereof
is illegal or unenforceable shall not cancel or invalidate the
remainder of such provision or this Lease, which shall remain in
full force and effect.
35. Interpretation. The captions of the Sections of this Lease
are to assist the parties in reading this Lease and are not a
part of the terms or provisions of this Lease. Whenever required
by the contest of this Lease, the singular shall include the
plural and the plural shall include the singular. The
masculine, feminine and neuter genders shall each include the
other. In any provision relating to the conduct, acts or
omissions of Tenant, the term "Tenant" shall include Tenant's
agents, employees, contractors, invitees, successors or others
using the Premises with Tenant's expressed or implied permission.
36. Incorporation of Prior Agreements, Modifications. This
Lease is the on only agreement between the parties pertaining to
the lease of the Premises and no other agreements are effective.
All amendments to this Lease shall be in writing and signed by
all parties. Any other attempted amendment shall be void.
37. Waivers. All waivers must be in writing and signed by the
waiving party. Landlord's failure to enforce any provision of
this Lease or its acceptance of rent shall not be a waiver and
shall not prevent Landlord from enforcing that provision or any
other provision of this Lease in the future. No statement on a
payment check from Tenant or in a letter accompanying a payment
check shall be binding on Landlord. Landlord may, with or
without notice to Tenant, negotiate such check without being
bound to the conditions of such statement.
38. No Recordation. Tenant shall not record this Lease without
prior written consent from Landlord. However, either Landlord
or Tenant may require that a "Short Form" memorandum of this
Lease executed by both parties be recorded.
39. Binding Effect, Choice of Law. This Lease shall be binding
upon any party who legally acquires any rights or interest in
this Lease from Tenant. However, Landlord shall have no
obligation to Tenant's successor unless the rights or interests
of Tenants successor are acquired in accordance with the ten-ns
of this Lease. The laws of the State of North Carolina shall
govern the validity, performance and enforcement of this Lease.
40. Corporate Authority, Partnership Authority. If Tenant is a
corporation. each person signing this Lease on behalf of Tenant
represents and warrants that he has full authority to do so and
that this Lease binds the corporation. If Tenant is a
partnership, each person signing this Lease for Tenant
represents and warrants that he is a general partner of the
partnership, that he has full authority to sign for the
partnership and that this Lease binds the partnership and all
general partners of the partnership. The withdrawal of a General
Partner from the Partnership shall not relieve the General
Partner from liability under this Lease and all general partners
added to the Partnership shall be fully liable for the
Partnership's obligations hereunder. Tenant shall give written
notice to Landlord of any general partner's withdrawal or
addition.
41. Joint and Several Liability. All parties signing this Lease
as Tenant shall be jointly and severally liable for all
obligations of Tenant.
42. Force Majeure. If Landlord cannot perform any of its
obligations due to events beyond Landlord's control, the time
provided for performing such obligations shall be extended by a
period of time equal to the duration of such events. Events
beyond Landlord's control include, but are not limited to, acts
of God, war, civil commotion, labor disputes, strikes, fire,
flood or other casualty, shortages of labor or material,
government regulation or restriction and weather conditions.
43. Execution of Lease. This Lease may be executed in
counterparts, and, when all counterpart documents are executed,
the counterparts shall constitute a single binding instrument.
44. Covenants and Conditions. Tenant's performance of each of
Tenant's obligations under this Lease is a condition as well as
a covenant. Tenant's right to continue in possession of the
Premises is conditioned upon such performance. Time is of the
essence in the performance of all covenants and conditions.
45. Submission of Lease. The submission of this Lease to Tenant
for examination does not constitute an offer to lease or a
reservation of space. No agreement between Landlord and Tenant
relating to the leasing of the Premises shall become effective
or binding until executed by both parties and received by Tenant.
46. Additional Provisions.
IN WITNESS WHEREOF, the parties have hereunder executed the
lease the day and year above written.
LANDLORD:
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
By: Lincoln Investment Management, Inc.
Attorney-in-Fact
By: (Signed)
Joseph T. Putaseri
Vice President and Director
of Real Estate Management
Date: July 30, 1996
TENANT:
GENERAL PARCEL SERVICES, INC.
By: (Signed)
Name: E. Hoke Smith, Jr.
Its: President
Date: June 19, 1996
INSERT EXHIBIT "A"
To Be Supplied
EXHIBIT C
Rules and Regulations
1. No sign, placard, picture, advertisement, name, or notice
shall be installed or displayed on any part of the outside or
inside of the Building without the prior written consent of
Landlord. Landlord shall have the right to remove, at Tenant's
expense and without notice. any sign installed or displayed in
violation of this rule. No awning shall be permitted on any
part of the Premises.
2. Tenant shall not obstruct any sidewalks. entrances, or
driveways of the Building. No Tenant and no employee or invitee
of any Tenant shall go upon the roof of the Building except to
service any air conditioner or beating unit.
3. Landlord shall furnish Tenant, free of charge, with one key
to the Premises. Tenant shall be responsible for rekeying the
Premises upon occupancy and maintaining control over the keys.
Upon the termination of its tenancy, Tenant shall deliver to
Landlord the keys of all doors.
4. If Tenant requires telegraphic, telephonic, burglar alarm, or
similar services, it shall first obtain and comply with
Landlord's instructions in their installation.
5. Tenant shall not use or permit to be used in the Premises any
foul or noxious gas or substance, or permit or allow the
Premises to be occupied or used in a manner offensive or
objectionable to Landlord or other occupants of the Building by
reason of noise, odors, or vibrations, nor shall Tenant bring
into or keep in or about the Premises any birds or animals.
6. The toilet rooms, toilets, urinals, wash bowls, and other
apparatus shall not be used for any purpose of other than that
for which they were constructed, and no foreign substance of any
kind whatsoever shall be thrown therein. The expenses of any
breakage, stoppage, or damage resulting from the violation of
this rule shall be home by the Tenant who, or whose employees or
invitees, shall have caused same.
7. Tenant shall not install any radio or television antenna,
loudspeaker, or other device on the roof or exterior walls of
the Building. Tenant shall not interfere with radio or
television broadcasting or reception from or in the Building or
elsewhere.
8. Tenant shall place garbage dumpsters in a location
satisfactory to Landlord. Tenant shall store all of its trash
and garbage within such dumpsters. Tenant shall not place in
any dumpster any material which cannot be disposed of in the
ordinary and customary manner of trash and garbage disposal.
9. Tenant shall not store, fabricate, maintain, or otherwise use
the parking areas or driveway except as specifically provided
herein.
10. Cars must be parked entirely within the stall lines painted
on the ground. The speed limit shall be five (5) miles per
hour. Parking is prohibited: (a) in areas not striped for
parking, (b) in aisles, (c) where "no parking" signs are posted,
(d) on ramps, (e) in cross hatched areas, and (f) in such other
areas as may be designed by Landlord as reserved for the
exclusive use of others. Washing, waxing, cleaning, or
servicing of any vehicle by anyone is prohibited.
11. Landlord may waive any one or more of these Rules and
Regulations for the benefit of Tenant or any other tenant, but
no such waiver by Landlord shall be construed as a waiver of
such Rules and Regulations in favor of Tenant or any other
tenant, nor prevent Landlord from thereafter enforcing any such
Rule and Regulations against any or all of the tenants of the
Building.
12. These Rules and Regulations are in addition to, and shall
not be construed to in any way modify or amend, in whole or in
part, the terms, covenants, agreements, and conditions of any
lease of premises in the Project.
13. Landlord reserves the right to make such other and
reasonable Rules and Regulations as, in its judgment, may from
time-to-time be needed for safety and security, for care and
cleanliness of the Buildings, and for the preservation of good
order therein. Tenant agrees to abide by all such Rules and
Regulations hereinabove stated and any additional rules and
regulations which are adopted.
14. Tenant shall be responsible for the observance of all the
foregoing rules by Tenant's employees, agents, clients,
customers, invitees, and guests.
EXHIBIT D
Form Estoppel Certificate
ESTOPPEL CERTIFICATE
To:
Re: Lease Agreement with The Lincoln National Life
Insurance Company for premises located in Woodlands Business
Park in Charlotte, North Carolina
Gentlemen:
The undersigned, ,as Tenant ("Tenant") under that
certain Lease Agreement with The Lincoln National Life Insurance
Company as Landlord ("Landlord"), dated ,
(the "Lease"), hereby ratifies the Lease and states, represents,
warrants, and certifies as follows:
Tenant entered into occupancy of those premises in <project
name> (the "Project") containing approximately square feet,
known as Building , Space , as more particularly identified
in the Lease (the "Premises"), on ,19 , and is in full
and complete possession of the Premises.
All improvements, alterations or additions to the Premises to be
made by Landlord, if any, have been completed to the
satisfaction of Tenant. All contributions to be made by
Landlord for improvements to the Premises, if any, have been
paid in full to Tenant.
The term of the Lease commenced on , 19 , and expires on
, 19 .
The Lease is in full force and effect and has not been assigned,
modified, supplemented or amended in any way
by Tenant (except by agreement(s) dated , 19 ), and the
Lease and such agreements, if any, represent the entire
agreement between the parties with respect to the Premises,
Except as set forth in the Lease Tenant has no right or option
to (i) extend the term of the Lease, (ii) lease
additional space in the Project, or (iii) purchase the Project
or any part thereof (except for base Rent in the amount of $
per year is currently due and payable under the Lease.
Tenant has paid a security deposit under the Lease to Landlord
in the amount of $ .
Base Rent for , 19 , has been paid.
No rent under the Lease has been paid more than thirty (30) days
in advance.
To Tenant's knowledge there is no existing default on the part
of either Landlord or Tenant in any of the terms or conditions
of the Lease, and no event has occurred which, with the passage
of time or delivery of notice, or both, would constitute such a
default.
To Tenant's knowledge all conditions and obligations under the
Lease to be performed by Landlord have been performed and on
this date Tenant has no existing defenses, counter-claims or
offsets against the enforcement of the Lease by Landlord.
There are no actions, whether voluntary or, to its knowledge,
otherwise, pending against Tenant (or any guarantor of Tenant's
obligations pursuant to the Lease) under the bankruptcy or
insolvency laws of the United States or any state thereof.
Tenant has not caused contamination of the Premises by hazardous
materials or toxic substances in violation of Environmental Laws
and Tenant does not use, nor has Tenant disposed of any such
materials or substances in violation of Environmental Laws.
Tenant hereby acknowledges and agrees that this certificate may
be relied upon by Landlord and any purchaser, mortgagee or
beneficiary under a deed of trust, and their respective
successors and assigns.
Very Truly Yours,
By:
Title:
EXHIBIT E
Work Letter
Landlord is providing the space "as is".
CORPORATE GUARANTY OF LEASE
The undersigned, in consideration of the leasing of the premises
described in the attached Lease to the Tenant therein mentioned,
does hereby absolutely, unconditionally and irrevocably
guarantee to Landlord the full and complete performance of all
of Tenant's covenants and obligations under such Lease and the
full payment by Tenant of all rentals, additional rentals and
other charges and amounts required to be paid thereunder.
The undersigned does hereby waive all requirements of notice of
the acceptance of this Guarantee and all requirements of notice
of breach or non-performance by Tenant. The undersigned further
waives any demand by Landlord and/or prior action by Landlord of
any nature whatsoever against Tenant. The undersigned's
obligations hereunder shall remain fully binding although
Landlord may have waived one or more defaults by Tenant.
extended the time of performance by Tenant, modified or amended
the Lease, released. returned or misapplied other collateral
given later as additional security (including other guarantees)
and released Tenant from the performance of its obligations
under such Lease.
This Guarantee shall be binding upon the undersigned and its
respective successor, successors in interest, representatives
and assigns and shall continue in effect subsequent to any
assignment of the Lease by Tenant or by operation of law.
IN WITNESS THEREOF, the undersigned has set its hand and seat
this 19th day of June, 1996.
GENERAL PARCEL SERVICE, INC.
a Florida Corporation
By: (Signed)
Its: President
RIDER
Rider to this lease, Dated as of this 30th day of July , 19 ,
is made by and between The Lincoln National Life Insurance
Company (herein called "Landlord") and General Parcel Services,
Inc. (hereinafter called "Tenant").
RENT ABATEMENT
Provided Tenant faithfully performs all terms and conditions of
this Lease during the term hereof, Tenant's obligation to pay
base rent under this Lease shall be abated from July 1, 1996
through August 31, 1996 of the Lease term.
If Tenant at any time breaches any term or covenant required to
be performed by Tenant under this Lease, Landlord may, in
addition to all other rights or remedies it may have, rescind
the abatement and receive all the base rent which Landlord would
have otherwise received from Tenant had there been no period of
abatement rent provided for hereunder as a result of any default
by Tenant shall not be deemed to be a waiver of Landlord's right
to so rescind on any subsequent default by Tenant.
Exhibit 10.8
COMMERCIAL LEASE AND DEPOSIT RECEIPT
TENANT: GENERAL PARCEL SERVICES, INC.
TERM: FIVE (5) YEARS, TWENTY-THREE (23) DAYS
DATE SIGNED:
INITIAL MONTHLY RENT: $1,900.00
EFFECTIVE DATE: July 9, 1996
RENEWAL DATE: July 31, 2001
RECEIVED FROM GENERAL PARCEL SERVICES, INC. hereinafter referred
to as Tenant, the sum of THREE THOUSAND SIX HUNDRED TEN and
65/100 DOLLARS ($3,610.65), evidenced by CHECK, as a deposit
which, shall be applied as follows:
RECEIVED PAYABLE PRIOR
TO OCCUPANCY
Rent for the period
from 7/9/96 to 7/31/96 $ 1,409.68 $
Last month's rental $ $
Security deposit $ 2,207.97 $
Key deposit $ $
Cleaning charge $ $
Other $ $
--------- ---------
TOTAL $ 3,610.65 $
STATE OF SOUTH CAROLINA, COUNTY OF CHARLESTON
THIS AGREEMENT entered into this day of July; 1996 between
GENERAL PARCEL SERVICES, INC., hereinafter referred to as
Tenant, and J.P. GAILLARD, ET AL. hereinafter referred to as
Landlord.
WITNESSETH:
1. PREMISES. That Landlord, in consideration of rents,
covenants and conditions mentioned herein, to be paid, kept,
performed and observed by Tenant does hereby demise, lease and
let unto Tenant, and Tenant does hereby hire and take from
Landlord the premises known as:
7385 Industry Drive, N. Charleston, SC, 29418
2. TERM. To have and to hold said leased premises for the term
of five (5) years and twenty-three (23) days beginning July 9,
1996 and ending July 31, 2001.
3. RENT. Tenant shall pay, to the Landlord, a Monthly Base
Rental and Additional Rent as follows:
(A) MONTHLY BASE RENTAL. Tenant shall pay a Monthly Base Rental
to Landlord for each calendar month during the term of this
lease or any renewal thereof, in advance on or before the first
day, of each succeeding month. The amount of the Monthly Base
Rental for the first year of this lease shall be ONE THOUSAND
NINE HUNDRED and 00/100 DOLLARS ($1,900.00). The rental for the
first month of the term of this lease shall be paid at the date
of the execution hereof. If such date be other then the first
day of the calendar month, such first rental payment shall be
prorated for the period between the effective date of this lease
and the first day of the following month.
(1) MONTHLY BASE RENTAL ADJUSTMENTS The Monthly Base Rental
shall be subject to an annual accumulative adjustment upward on
each anniversary date of this lease for the succeeding twelve
months. Said annual rental adjustment shall be determined by
increasing tile Monthly Base Rental an amount equal to the sum
of subparagraphs (a) below applied to the previous 12 months of
this lease, or any renewal thereof.
(a) STEP UP. The Monthly Base Rental shall be increased
annually as follows: The monthly base rental amount shall be
increased by three (3) percent annually-
(B) ADDITIONAL RENT. In addition to the Monthly Base Rental
and its annual accumulative adjustments, Tenant shall pay
Additional Rent as indicated herein below in subparagraphs (1)
and (2).
(1) TAX INCREASE. Tenant shall pay annually a sum equal to any
increase in real estate taxes (ad valorem, special assessments,
or any other government charges) over those assessed for 1995,
on a pro rata basis. Presentation of copies of tax bills shall
constitute sufficient evidence of Additional Rent due and shall
be payable within 15 days after receipt thereof. Tenant shall
be charged Additional Rent only for that portion of the calendar
year during which the lease was in effect.
(2) INSURANCE. The Monthly Base Rental shall be increased
annually by an AMOUNT equal to one twelfth of any increase
during tire previous 12 months in the annual cost of fire and
extended coverage insurance for the leased premises, whether by
reason of increased coverage or by increase in rate. Landlord
shall keep the premises adequately insured at a reasonable rate.
(C) ADDITIONAL CHARGES. Any charges due Landlord by Tenant,
including but not limited to damage to premises, legal fees,
cost of default by remedies, and past due charges for utilities,
insurance, cleaning, maintenance and repairs, etcetera or for
work done on the premises by order of Tenant, shall be
considered as Additional Rent due (in addition to all other rent
payable) and shall be included in any lien for rent. In the
event any documentary stamp tax, or tax levied an rental or
leasing of the pretrial is required the cost shall be paid by
the Tenant upon demand. The cost of a credit report on the
Tenant, which may be requested at the Landlord's option shall be
paid by the Tenant.
4. TENANT'S UTILITIES. Tenant shill pay all charges or bills
for all utilities and scavenger services used by Tenant, EXCEPT:
NONE. Additionally, Tenant shall pay, any solid waste user-fee
as a result of trash, sanitation disposal, dumpster or
collection service levied by any governmental authority.
5. USE OF PREMISES. Tenant agrees to use entire leased
premises for office and warehouse space related to delivery
services and for no other purposes. Pets, animals, or birds may
not be kept on the premises without the Landlord's written
permission. These premises may not be used for sleeping
quaintest or apartments, for games of chance of any form of
gambling, immoral conduct or any other illegal activity.
6. EXAMINATION OF PREMISES. Tenant his examined the leased
premises and is familiar with their present condition. Tenant,
relying solely on said examination, agrees to accept premises in
their present condition except for specific items listed herein
or itemized on attached check-in list,
7. DELAY OF POSSESSION. If Landlord is unable to deliver
possession of leased premises on the effective date of this
lease, by reason of the holding over of a prior Tenant or for
any other reason, this lease shall not be affected or impaired
in any way and Landlord shall not be ratable to Tenant for any
loss of damage resulting therefrom. The effective date of this
lease, however, shall not begin until the delivery of
possession. If Landlord, however, is unable to deliver
possession of the premises to Tenant by July 23, 1996, Tenant
shall have the right to cancel this lease upon written notice
delivered to Landlord and upon such cancellation Landlord and
Tenant shall each be released and discharged from all liability
under this lease. In such case, any deposit or prepaid rent
shall be promptly returned to the Tenant.
8. TENANT'S PARKING. Parking of vehicles owned or operated
by Tenant or Tenant's employees is hereby limited, restricted
or prohibited, as follows:
9. LIABILITY INSURANCE. Tenant shall not carry any stock of
goods or do anything in or about the leased premises which will
in any way restrict or invalidate any insurance coverage of the
leased premises. Tenant agrees to pay upon demand as Additional
Rent any increase in premiums of insurance carried by the
Landlord on the leased premises resulting from the Tenant's use
or occupancy. Tenant shall keep in full force and effect, at
Tenant's expense, insurance for plate glass, personal properly,
trade fixtures, and property damages, as well as a public
liability policy, in both Tenant and Landlord shall be named as
the insured with the following minimum coverage: $300,000.00.
10. MAINTENANCE AND REPAIRS. Landlord shall repair and
maintain the foundation, roof, outer walls and structural
members of the leased premises. Tenant shall, at Tenant's sole
expense, make all of the repairs necessary to maintain the
leased premises, both interior and exterior, ordinary and
extraordinary, including window glass, plate glass, storefronts,
doors, windows, screens, awnings, locks, keys, weather shipping
and thresholds, as well as all interior walls, floors, ceilings.
and floor coverings. Tenant's responsibility to maintain the
premises shall also include the servicing, repair, maintenance,
and it caused by Tenant's neglect, replacement of the plumbing,
electrical[, ventilating, hearing and air conditioning systems,
including all pipes, wiring, fixtures, filters, equipment,
machinery, boilers, furnaces, compressors and appliances.
Tenant shall also repair and be responsible for any damage
caused by stoppage, breakage, leakage, overflow , discharge or
freezing of plumbing pipes, soil lines, or fixtures. If any
part of the leased premises is damaged by the Tenant, or
Tenant's employees, agents or invitees or by any breakage and
entering of said premises, or by any attempt to break and enter
leased premises, Tenant shall provide Landlord with immediate
written notification of all damages to the property, After
notification and approval of the Landlord, repairs shall be made
promptly at Tenant's expense so as to restore said premises to
its previous condition. If Tenant refuses or neglects to
commence necessary repairs within 10 days after written demand,
or does not complete such repairs within a reasonable time
thereafter, Landlord may make said repairs without liability to
Tenant for any loss or damage that may accrue to Tenant's stock,
business or fixtures by reason thereof, and if Landlord makes
such repairs, Tenant shall pay to Landlord, on demand, as
Additional Rent, the cost thereof. Tenant's failure to pay
shall constitute it default of this lease. Repairs that are tile
Landlords responsibility, shall be made within a reasonable time
after written notice from the Tenant. Tenant's failure to give
or unreasonable delay in giving notice of needed repairs of
defects shall make Tenant liable for any loss or defects
resulting from delay of needed repairs. It is understood and
agreed that Landlord will deliver the. premises with all major
electrical, plumbing and HVAC components in good working order
as of day of occupancy.
11. REGULATIONS AND SANITATION. Tenant shall keep the teased
premises clean, safe, sanitary and in compliance with laws,
ordinances and requirements of any legally constituted public
authority. Tenant shall keep broom clean all areas in and
around lease premises; that are not included in common area
maintenance, such as front sidewalks and area behind building.
Cleaning includes removing of any trash or refuse deposited on
the leased premises or adjacent public area by Tenant, Tenant's
customers, or anyone else. In the event of non-compliance by
Tenant, Landlord shall have the right to have solid areas
cleaned, trash and refuse removed and charge the expense to
Tenant as Additional Rent which shall be due and payable upon
demand. Nonpayment of which shall constitute default of the
lease. Tenant shall employ if Landlord determines it is
necessary, a reputable pest extermination company at regular
intervals.
12. ALTERATIONS. Tenant shall make no alterations, additions,
improvements, or rewiring in or to tile leased premises without
the consent of the Landlord. All additions, or improvements to
the building including carpeting, tile, other floor covering,
wall covering, ceiling tile, etcetera, made with or without the
Landlord's written consent shall become part of the premises,
and the property of the Landlord upon installation. Trade
fixtures and office furniture shall be installed so as to be
readily removable without injury to the premises any injury
caused by said removal shall be repaired forthwith at Tenant's
expense. Said trade fixtures shall be removed from the premises
before tile end of this lease or shall become part of the
premises and the property of the Landlord. Tenant shall not
install or maintain tiny equipment, partitions, furniture,
etcetera, which the weight or operation thereof would tend to
injure or be detrimental to the leased premises. or would
unreasonably annoy or disturb other Tenants.
13. ASSIGNMENT OR SUBLEASE. Tenant shall not, without
written consent of the Landlord, in each case, assign, transfer,
mortgage, pledge or otherwise encumber or, dispose of this
lease, or sublet the lease premises (or any, part thereof or
permit the premises to be occupied by other persons. Such
consent shall not be unreasonably withheld. If this lease be
assigned, or if the leased premises or tiny part thereof be
sublet or, occupied by any other person, firm, office or
corporation with or without written permission of Landlord, it
will not relieve the Tenant of all. obligations under the terms
of this lease, and if sublet, assigned or occupied without the
Landlords permission, this lease may, at the option of the
Landlord, be terminated by a seven day written notice. In the
event Tenant shall sublease the leased premises in accordance
herewith for rentals in excess of those rentals payable
hereunder, Tenant shall pay to Landlord monthly in advance as
Additional Rent hereunder, one half of all such excess rent. Any
proposed assignee that proposes to assume Tenant's obligations
hereunder shall execute a satisfactory assumption agreement
before consent shall be given.
14. SIGNS OR AWNINGS. Tenant shall place no signs, notices,
pictures, or advertising matter upon the exterior of the leased
premises except with the written permission of the Landlord.
Any and ail signs placed on the leased premises by Tenant shall
be maintained at Tenant's expense in compliance with rules and
regulations governing such signs. The Tenant shall be
responsible to Landlord for any damages by installation, use,
maintenance or removal of said signs. Any electrical service
needed for signs shall be installed at the Tenant's expense.
15. WAIVER OF RIGHTS. No failure of Landlord to exercise any,
power given Landlord hereunder, or to insist upon Tenant's
strict compliance with Tenant's obligations hereunder and no
custom or practice of the parties of variance with the terms
hereof shall constitute a waiver of the Landlord's right to
demand exact compliance with the team of this lease at a future
time. The rights and remedies created by this lease are
cumulative and the use of one remedy shall not be taken to
exclude the right to the use of another.
16. RULES AND REGULATIONS. Landlord reserves the right at
any time to make further rules and regulations as in Landlord's
judgment may be necessary for the safety, care, appearance and
cleanliness of the premises and the preservation of good order
therein, and such other rules and regulations shall be binding
upon the parties hereto with the same force and effect as if
they had been contained herein at the time of execution hereof.
17. RIGHT OF ENTRY. Landlord without being liable for
trespass or damages, shall have the right to enter leased
premises during reasonable hours to examine same or to make
repairs, additions, or alterations as Landlord may deem
necessary for the safety, comfort, appearance, or preservation
thereof, or to exhibit said premises. Entry shall also be
allowed to post "FOR RENT" notice, during the thirty days before
the expiration of this lease. Said right of entry shall
likewise exist for the purpose of removing placards, signs,
fixtures, alterations or additions which do not conform to this
agreement. In accordance with this right, Tenant shall give
Landlord a key to any and all locks, security systems and
burglar alarms. Tenant shall not change or install new locks or
security systems without the written consent of the Landlord,
18. LIENS. Tenant shall not create any liens of labor or
materials against Landlord's interest in the leased premises.
All persons contracting with the Tenant for the erection,
installation, alteration, repair or demolition of any building
or other improvements on the leased premises, and all material
suppliers, contractors, mechanics, and laborers are hereby
charged with notice that they must look to the Tenant and to the
Tenant's interests only in the leased premises to secure the
payment of any bill for work done or material furnished during
the rental period created by this lease. In the event that
liens are place on record against the leased premises by
contractors, mechanics, laborers, material suppliers, etcetera
because of action by Tenant it will constitute a default of this
lease.
19. DAMAGE OR DESTRUCTION OF PREMISES. If premises are
totally destroyed by fire or other casualty, this tease shall
terminate as of the date of such destruction and rental shall be
accounted for as between Landlord and Tenant as of that date.
If premises are damaged but not wholly destroyed by fire or
other casualty, rental shall abate in such proportion as use of
premises has been lost to the Tenant. Landlord shall restore
premises to substantially the same condition as prior to damage
as speedily as practicable, whereupon full rental shall commence.
20. DAMAGE TO PERSONAL PROPERTY. All personal property,
merchandise, fixtures and equipment placed or moved into the
leased premises shall be at the risk of Tenant or the owners
thereof, and Landlord shall not be liable for any, damages, loss
of theft of said personal property, merchandise, fixtures, or
equipment, from any cause whatsoever,
21. CONDEMNATION, If the whole of the teased premises, or
such portion thereof as will make aid premises unusable for the
purpose herein leased, be condemned by any legally constituted
authority, this lease shall terminate on the date thereof is
taken by public authorities, and rental shall be accounted for
as between Landlord and Tenant as of termination, however, shall
be without prejudice to the rights of either Landlord or Tenant
to recover from the public authority compensation for damage
caused by condemnation. Neither the Tenant nor the Landlord
shall have any rights in any award made to the other by any
condemnation authority,. In the event only such portion of the
leased premises is acquired by condemnation as will leave the
remaining premises, after alteration and repairs, in condition
suitable for use by Tenant, the monthly rental payments from the
day of such acquisition to the end of the original or any
extended term of this lease shall be reduced in proportion to
the resulting loss of use of leased premises by Tenant. In the
event of such partial acquisition and reduction in rent,
Landlord shall make promptly at Landlord's expense, all
necessary alterations and repairs which shall be required, to
restore the premises to a safe and usable condition.
22. INDEMNITY AND LIABILITY. Tenant shall indemnify and hold
Landlord harmless from any and all claims, damages, costs, and
expenses, Including reasonable fees arising from the management
of the business conducted by Tenant on the leased premises,
Landlord shall not be liable, find Tenant waives all claims for
damage to person or property, sustained by Tenant, its employees
or agents, resulting from the condition of, the leased premises,
or any equipment of such as may result from any accident in or
about the leased premises or which may result directly or
indirectly from any act of neglect of any other Tenant of the
property of which the leased premises is a part.
23. REVERSION. Tenant shall surrender to Landlord at the end
of the term of this lease or upon cancellation of this tease,
said leased premises broom clean and in as good condition as the
leased premises were at the beginning of the term of this lease,
ordinary wear and tear and damage by fire and windstorm or other
acts of God excepted, or Tenant will pay Landlord all damages
that Landlord may suffer because of Tenant's failure to do so.
Tenant will indemnify and save Landlord harmless from and
against all claims made by any succeeding Tenant of said
premises against Landlord because of delay in delivering
possession of leased premises, so far as such delay is
occasioned by failure of Tenant to so surrenders leased
premises. Security deposit may be withheld as payment or
partial payment of repairs or unusual cleaning needed after
Tenant vacates.
24. EFFECTIVE DATE OF LEASE. This tease shall become
effective as a binding agreement only upon the execution and
delivery thereof by both Landlord and Tenant. If this tease is
signed by one party and submitted to the other party, then it
shall constitute an offer to lease which is subject to
revocation at any time prior to execution by the other party and
delivery of a fully executed copy to the submitting party.
25. NOTICES. Tenant hereby appoints as Tenant's agent to
receive service of all notices, required under this lease as
well as all dispossessory distraint notices, the person in
charge of leased premises or occupying said premises, at the
time, notice is delivered. If no person is in charge, or
occupying said premises. the service of such notice may be made
by attaching the same in the main entrance of said premises. A
copy of all notices under, this lease shall also be sent to
Tenant's last known address, if different from said premises.
26. BANKRUPTCY. If Tenants shall be adjudicated bankrupt or
as insolvent or take the benefit of any Federal reorganization
or make a general assignment or take the benefit of any
insolvent law, or if a Trustee in bankruptcy, or a receiver be
appointed or elected for Tenant, under Federal or State Law,
this lease at the option of the Landlord shall expire and end
seven (7) days after Landlord gives Tenant written notice.
UNLESS, the Tenant's Trustee immediately cures any default of
Tenant hereunder and provides (in compliance with Federal and
State laws) adequate assurance of future performance of Tenant's
obligations hereunder.
27. BEYOND LANDLORD'S CONTROL. None of the acts, promises,
covenants, or obligations on the part of the Tenant to be kept,
performed or not performed as the case may be, nor the
obligation of the Tenant to pay rent, Additional Rent or other
charges or payments shall be in anywise waived, excused or
affected by reason of the Landlord being unable at any time
during the term of this lease, to supply, or to delay in
supplying heat, light, elevator service or any other service
expressed or implied on the part of the Landlord to be supplied;
or by reason of the Landlord being unable to make alterations,
repairs, or decorations, or to supply any equipment or fixtures,
or any other, promise, covenant, or obligations on the part of
the Landlord to be performed, if the Landlord's inability or
delay is caused by circumstances or events beyond the Landlord's
control,
28. KEYS. Landlord shall provide Tenant with one key per
lock, and the Tenant is responsible for accounting for all keys
provided or duplicated and shall return all keys of leased
premises to the Landlord upon termination or cancellation of
this Lease and/or Tenant's vacating said premises. Landlord
shall have the right, if in the Landlord's sole judgment it is
necessary to require the Tenant at Tenant's expense to replace
locks, and to supply Landlord with one key to the new locks.
The Landlord shall retain a master key or pass key to the
premises, including the security locks and systems. Tenant
shall not change or install new locks or security systems
without written approval from the Landlord.
29. ESTOPPEL CERTIFICATES. Tenant shall from time to time,
within ten (10) days following written notice from the Landlord,
execute, acknowledge and deliver to the Landlord a written
statement certifying that this lease is in full force and
effect. This statement should also state whether or not the
Landlord is in default in performance of any covenant or
condition of this lease. The failure of the Tenant to execute,
acknowledge and deliver to the Landlord a statement in
accordance with this covenant shall constitute an acknowledgment
by the Tenant that this Lease is unmodified and in full force
and effect, an shall constitute a waiver of any defaults by the
Landlord which might, have existed prior to the date of such
notice.
30. PEACEFUL POSSESSION. Subject to the terms, conditions
and conditions of this Lease, the Tenant shall have, hold, and
enjoy possession of the leased premises, subject to the rights
of the holders of any mortgage which now covers said premises or
which may hereinafter be placed on leased premises by Landlord.
Tenant's rights are also subject to any underlying lease now or
later covering the entire property of which the leased property
is part, Tenant shall execute any necessary lease subordination
agreement at the Landlord's request.
31. DEFAULT. If Tenant fails to pay rent, including
Additional Rent on or before the due dates as herein stated
(TIME IS OF THE ESSENCE) this lease shall be in default. If
Tenant fails to cure such default within five (5) days after
written notice from Landlord; or if Tenant shall be in default
in performing any of the terms, covenants and conditions of this
lease other than the provision requiring the payment of rent,
and fails to cure such default within thirty (30) consecutive
calendar days after the receipt of written notice of default
from Landlord; or if leased premises shall be abandoned or
deserted for fifteen (15) days, or, if this lease is assigned
to any other person, firm, office or corporation, without the
permission of Landlord as required in paragraph 15 herein, this
lease at the Landlord's option shall expire and terminate seven
(7) days after the Landlord delivers written notice to Tenant of
such condition or default and Tenant shall immediately quit and
surrender said premises to Landlord. In the event of any such
default or breach of performance, the Landlord without any
further notice or demand of any kind to the Tenant, may
terminate this lease and re-enter, and forthwith repossess the
entire premises and without being liable for trespass or damage
shall re-let, lease or demise the premises to another Tenant
without any hindrance or prejudice to Landlord's right to
distrain for any past due rent, Additional Rent, and rent from
the time of such default or termination until the premises were
leased or rented to another Tenant. The collection by Landlord
of rent for the unexpired term shall entitle Tenant to all
Tenant's rights of this lease during the period for which the
rent may have been collected.
32. ASSIGNMENT OF CHATTELS, Tenant hereby pledges and assigns
to Landlord all the furniture, fixtures, goods, equipment and
chattels of Tenant which shall or may be brought or put on said
premises as security for the payment of said rent, and Tenant
agrees that said lien may be enforced by distraint or
foreclosure at the election of the Landlord. It is understood
and agreed that any merchandise, fixtures, furniture, or
equipment left in the premises when Tenant vacates shall be
deemed to have been abandoned by Tenant and by such abandonment,
Tenant relinquishes any right or interest therein and Landlord
is authorized to sell, dispose of or destroy same.
33. ATTORNEY'S FEE. In the event Landlord successfully
defends any action by the Tenant, or if it is necessary for
Landlord to employ an attorney for the collection of rent or any
other- sum due hereunder, or to enforce any covenant of this
lease, or the actuation of this lease, or, for the possession of
the leased premises or any part thereof, the Tenant shall pay
all costs, including reasonable attorney's fees.
34. AGENT. Tenant acknowledges that tire aforementioned Re/Max
Professional Realty - Robert L. Pratt, CCIM, 767-7777 is the
leasing agent for the owner(s) of the leased premises. Tenant
shall pay all rent payable under this lease to Re/Max
Professional Really, 8761 Dorchester Road, Charleston, SC 29420.
(803) 767-7777.
35. DEFINITIONS. "Landlord" is used in this lease shall
include the owner or owners of the property and/or the
aforementioned managing agents as well as the Landlord's heirs,
representatives, assigns and successors in title to premises.
"Tenant" shall include Tenant, Tenant's heirs and
representatives, and if this lease shall be assigned or sublet,
shall include also Tenant assignees or subleases, as to premises
covered by such assignment or sublease. "Agent" shall include
partnership or individual, as may fit the particular parties.
36. SPECIAL STIPULATIONS. Insofar as the following
stipulations conflict with any of the provisions herein, the
following stipulations shall control:
A. Rent is due on the first of the month and is considered
line if not received by the fifth of each month A ten percent
(10%) late charge shall be incurred for any rents received after
the fifth of the month.
B. Robert Pratt of Re/Max Professional Realty is the listing
agent for this lease and any renewals, expansions, or
relocations thereof. Tom Blazer of Re/Max Realty Services, Inc.
is leasing agent for this lease. Landlord to pay Agent Pratt in
accordance with listing agreement currently in effect. Tenant
to pay Agent Blazer in accordance with their agreement.
C. NOTICES:
Landlord;
J.P. Gaillard, III
P.O. Drawer 62948
Charleston, SC 29419-2948
Phone: 803-554-0840
Tenant:
General Parcel Services, Inc.
8923 Western Way, Suite 22
Jacksonville, FL 32256
Phone:
Realtor:
Re/Max Professional Realty
ATTN: Robert L. Pratt, CCIM
8761 Dorchester Road Charleston, SC 29420
Phone: (803) 767-7717
D. Landlord will perform the following:
1. Demolition of most of the temporary office space.
Approximately 1,000 square feet of residual office space will
remain.
2. Truck dock to be installed at rear of building with an
estimated cost of $7,500.00 to be split equally between Landlord
and Tenant. In addition to the regular rental payment, Tenant
shall pay an additional $62.50 per month for sixty (60) months
for its share of the truck door installation. Said payment
shall commence with the rental payment due August 1, 1996,
3. Landlord will repair any roof leak, and will perform
other items of structural concern, provided that Landlord
has reviewed and approved any list provided by Tenant.
4. Landlord will install a security, light for the parking
lot either attached to the building or to a power pole.
E. Landlord agrees to improve the lighting in the warehouse
upon receiving a sketch by Tenant of additional lighting
required. Landlord hereby limits his responsibility, for
additional lighting to what will provide reasonable warehouse
lighting for a building of this size in the local market.
37. AMERICAN DISABILITIES ACT. Both Tenant and Landlord have
been advised that the American Disabilities Act guidelines, as
it applies to this property, may have provisions that affect
public accommodations and employees of businesses located on the
premises. Either party may obtain this information at: American
National Standard Institute, 1430 Broadway, New York, New York,
10019.
38. ENTIRE AGREEMENT. This Lease contains the entire
agreement between the parties and all previous negotiations
leading thereto. and it may be modified only by it dated written
agreement signed by both Landlord and Tenant. No surrender of
the leased premises or of the remainder of the term of this
Lease shall be valid unless accepted by Landlord in writing.
TIME IS OF THE ESSENCE IN THE AGREEMENT.
THIS IS A LEGALLY BINDING CONTRACT. Tenant IS ADVISED TO SEEK
FURTHER ASSISTANCE IF THE CONTENTS ARE NOT UNDERSTOOD. Tenant
ACKNOWLEDGES AGREEMENT.
IN WITNESS WHEREOF Landlord and Tenant have executed these
premises, the day and year first above written.
(Signed)
TENANT
(Signed)
WITNESS AS TO TENANT
(Signed)
LANDLORD
(Signed)
WITNESS AS TO LANDLORD (OR AGENT)
Exhibit 10.9
STANDARD LEASE
SUITE To Be Determined
Lincoln Park East #3
This Lease made as of May 22, 1996 , By and between the Landlord
and the Tenant named below.
ARTICLE 1. - BASIC LEASE TERMS
For purposes of this Lease, the following terms shall have the
meanings set forth below:
1.1 Landlord. Parker-Raleigh Development I, Limited Partnership
1.2 Tenant. General Parcel Service, Inc.
1.3 Manager. Parker Lincoln Developers, Inc.
1.4 Building. The Building (including the Premises) known as
1200 Corporation Parkway, Raleigh, NC 27610
located on that tract of land (the "Land") described on Exhibit
A hereto, together with all other buildings, structures,
fixtures and other improvements located thereon from time to
time as depicted on the drawing (the "Site Plan") attached
hereto as Exhibit B. The Building and the Land are
collectively referred to herein as the "Property".
1.5 Premises. The floor space and interior wall and ceiling
space of that portion of the Building outlined in red or
highlighted on Exhibit C attached hereto, resulting in an
aggregate of approximately 15,818 square feet
of leasable area known as To Be Determined
1.6 Lease Term. 5 years, 0 months and 0 days beginning on the
Commencement Date.
1.7 Commencement Date. If improvements are to be erected upon
the Premises as described in Section 6.1, then the Commencement
Date shall be earlier of the date Tenant begins operating its
business in the improvements erected upon the Promises or, ten
(10) days after Landlord notifies Tenant that the Premises am
ready for occupancy; and if no improvements are to be erected
upon the Premises, the Commencement Date shall be the earlier of
the date Tenant begins operating its business in the Premises or
upon issuance of Certificate of Occupancy. The Commencement
Date shall constitute the commencement of the term of this Lease
for all purposes whether or not Tenant has actually taken
possession. Within thirty (30) days after the Commencement
Date, Landlord and Tenant will execute an acknowledgment of the
Commencement and Expiration Dates in the form attached hereto as
Exhibit D. If Tenant is permitted access to the Premises prior
to the Commencement Date, such early entry will be subject to
all the terms and provisions of this Lease as though
Commencement Date had occurred.
1.8 Base Rent. Base Rent is:
Months PSF Annual Monthly
1 through 12 $4.26 $67,384.68 $5,615.39
13 through 24 $4.39 $69,441.02 $5,786.75
25 through 36 $4.52 $71,497.36 $5,958.11
37 through 48 $4.66 $73,711.88 $6,142.66
49 through 60 $4.80 $75,926.40 $6,327.20
1.9 Security Deposit. Security deposit is $6,538.11.
1.10 Addresses.
Landlord's Address:
Post Office Box 58036
Raleigh, NC 27658
Tenant's Address:
8923 Western way, Suite 150
Jacksonville, Florida 32256
Manager's Address:
Post Office Box 58036
Raleigh, NC 27658
Landlord, Tenant and Manager, by written notice to the others
may change from time to time the foregoing addresses, and
Landlord, by written notice to Tenant, may notify Tenant from
time to time of the appointment of a new Manager and such new
Manager's address.
1.11 Permitted Use. Parcel delivery service
1.12 Common Areas. Such parking areas, streets, driveways,
aisles, sidewalks, curbs, delivery passages, loading areas,
lighting facilities, and all other areas situated on or in the
Property which are designated by Landlord, from time to time,
for use by all tenants of the Property in common.
1.13 Proportionate Share. The proportion expressed as a
percentage, that the gross public area in square feet in the
Premises, as determined by Landlord bears to the total number
of constructed grow leasable area in square feet in the Building,
as determined by Landlord, as of the date that the computation is
made. The computation shall be adjusted by Landlord if additional
square footage is added to the Building or to the Premises.
1.14 Estimated Initial Common Area Costs Payment (Includes
Common Area Maintenance, Taxes and Insurance):
PSF $.70 Annual $11,072.60 Monthly $922.72
1.15 Total Rental: (Estimated for the First Year)
Annual $78,457.28 Monthly $6,538.11
1.16 Guarantor(s). The guarantor(s) of Tenant's obligations
under this Lease is (are) None
ARTICLE 2. - GRANTING CLAUSE AND RENT PROVISIONS
2.1 Grant of Premises. In consideration of the obligation of
Tenant to pay the rent and other charges as provided in this
Lease and in consideration of the other terms and provisions of
this Lease, Landlord hereby leases the Promises to the Tenant
during the Lease Term, subject to the terms and provisions of
this Lease.
2.2 Base Rent. Tenant agrees to pay monthly as Base Rent during
the term of this Lease the sum of money set forth in Section 1.8
of this Lease, which amount shall
be payable to Landlord at the address shown above or at the
address that Landlord in writing shall notify Tenant. One (1)
monthly installment of base Rent shall be due and payable on the
date of execution of this Lease by Tenant for the first month's
rent and a like monthly installment shall be due and payable on
or before the first day of each calendar month succeeding the
Commencement Date during the term of this Lease, without demand,
offset or deduction; provided, if the Commencement Date should
be a date other than the first day of a calendar month, the
monthly rental set forth above shall be prorated to the end of
that calendar month, and all succeeding installments of rent
shall be payable on or before the first day of each succeeding
calendar month during the term of this Lease. Tenant shall
pay, as Additional rent, a11 other sums due under this Lease.
Base Rent and Additional Rent are sometimes collectively referred
to herein as "Rent".
2.3 Common Area Costs. As used in this Lease, the term "Common
Area Costs" shall mean all expenses of Landlord with respect to
the maintenance, servicing, repairing and operation of the
Property, including, but not limited to the following:
maintenance, repair and replacement costs; electricity, fuel,
water, sewer, gas and other utility charges; security, window
washing and janitorial services; trash and snow and ice removal;
landscaping and pest control; management fees payable to
Landlord, Landlord's affiliates or third parties; wages and
benefits payable to employees of Landlord whose duties are
directly connected with the operation and maintenance of the
Property; all services, supplies, repairs, replacement or other
expenses for maintaining and operating the Property: the cost,
including interest amortized over its useful life, of any
capital improvements made to the Property by Landlord after the
date of this Lease which is required under any governmental law
and regulation that was not applicable to the Property at time
it was constructed; the cost, including interest, amortized over
its useful life, of installation of any device or other
equipment which improves the operating efficiency any system
within the Premises and thereby reduces operating expenses; all
other expenses which generally would be regarded as operating
and maintenance expenses which would reasonably be amortized
over a period not to exceed live (5) years; all real property
taxes and installments of special assessments, including dues
and assessments by means of deed restrictions and/or owner's
association which accrue against the Properly during the term of
this Lease; governmental levies or charges of any kind or nature
assessed or imposed on the Property, whether by state, county,
city or any political subdivision thereof; and all insurance
premiums Landlord is required to pay or deems necessary to pay,
including public liability insurance, with respect to the
Property. The term operating expenses does not include the
following: expenses for repairs, restoration or other work
occasioned by fire, wind, the elements or other casualty that
are covered by insurance; income and franchise taxes of
Landlord; expenses incurred in leasing to or procuring of
tenants, leasing commissions, advertising expenses and expenses
for renovating of space for new tenants, interest or principal
payments on any mortgage or other indebtedness of Landlord:
compensation paid to any employee of Landlord above the grade of
property manager; any depreciation allowances or expenses; or
operating expenses which are the responsibility of Tenant.
Prior to the Commencement Date, and from time to time
thereafter, Landlord shall deliver to Tenant its estimate of the
Common Area Costs to be incurred during the then-current
calendar year. Landlord may adjust the estimate from time to
time during the year to which it relates.
2.4 Common Area Costs Payments. Tenant, on the first day of
each month during the Lease Term shall pay to Landlord, as
Additional Rent, without offset or deduction, an amount equal
to one-twelth (1/12) of Tenant's Proportionate Share of the
estimated Common Area Costs as calculated by Landlord (prorated
for any partial month). The Estimated Initial Common Area Costs
Payment due from Tenant shall be the sum set forth in Section 1.14
above. All sums payable as additional rent under the terms of this
Section shall be subject to adjustment as provided in Section 2.5.
2.5 Adjustments to Common Area Costs. Within one hundred twenty
(120) days following the end of each calendar year, Landlord
shall furnish to Tenant a statement showing the total actual
Common Area Costs for the calendar year just expired, the amount
of Tenant's Proportionate Share of the Common Area Costs, and
payments made by Tenant during such calendar year under Section
2.4. If Tenant's Proportionate Share of the actual Common Area
Costs for such calendar year exceeds the aggregate of Tenant's
monthly payments made during tire calendar year just expired,
Tenant shall pay to Landlord the deficiency within thirty (30)
days after receipt of said statement. If Tenant's payments
exceed Tenant's Proportionate Share of the actual Common Area
Costs as shown on such statement, Tenant shall be entitled to
offset the excess against payments thereafter becoming due as
Tenant's Proportionate Share of Common Area Costs. No portion
of the Common Area Costs paid by Tenant under this Article 2
shall be credited against Base Rent or any other rental
obligations hereunder.
2.6 Late Payment. Other remedies for nonpayment of rent
notwithstanding, if any payment of Base Rent or Additional Rent
is not received by Landlord on or before the fifth (5th) day of
the month for which the rent is due, or if any other payment
hereunder due Landlord by Tenant is not received by Landlord on
or before the fifth (5th) day of the month next following the
month in which Tenant was invoiced, Tenant shall also pay (a) a
late payment charge of four percent (4%) of such past due amount
and (b) interest of eighteen percent (18%) per annum or the
maximum rate allowed by applicable law, whichever is less, on
the remaining unpaid balance, retroactive to the date originally
due until paid.
2.7 Increase in Insurance Premiums. If an increase in any
insurance premiums paid by Landlord for the Property is caused
by Tenant's use of the Premises in a manner other than set forth
in Section 1.11, or if Tenant vacated the Premises and caused an
increase in such premiums, then Tenant shall pay as Additional
Rent the amount of such increase to Landlord. Tenant agrees to pay
any amounts due under this Section within ten (10) days
following receipt of the invoice showing the Additional Rent
due.
2.8 Security Deposit. The Security Deposit set forth in Section
1.9 (if any) shall be held by Landlord for the performance of
Tenant's covenants and obligations under this Lease, it being
expressly understood that the security deposit shall not be
considered an advance payment of rental or a measure of
Landlord's damage in case of default hereunder by Tenant, and
shall be held by Landlord without payment of any interest
thereon. Upon the occurrence of any event of default by Tenant
under this Lease, Landlord may, from time to time, without
prejudice to any other remedy. use the security deposit to the
extent necessary to make good any arrears of rent, or to repair
any damage or injury, or pay any expense or liability incurred
by Landlord as a result of the event of default or breach of
covenant, and any remaining balance of the security deposit
shall be refunded by Landlord to Tenant upon the termination of
this Lease. If any portion of the security deposit is used or
applied, Tenant shall upon ten (10) days written notice from
Landlord, deposit with Landlord by cash or cashier's check and
amount sufficient to restore the security deposit to its
original amount. The Security Deposit may be assigned and
transferred by Landlord to the successor in interest of Landlord
and upon acknowledgment by such successor of receipt of such
security and its assumption of the obligation to account to
Tenant for such security in accordance with the terms of this
Lease, Landlord shall thereby be discharged of any further
obligation relating thereto.
2.9 Notice to Vacate. Tenant shall give written notice to
Landlord one hundred and eighty (180) days prior to the
expiration of this Lease to vacate upon expiration of the Lease,
to negotiate a renewal or to exercise an option to renew, if
available. Failure to provide such written notice will indicate
that Tenant intends to vacate and Landlord shall have the right
to place signs, for the purpose of marketing, in the windows of
the premises and to begin showing the Premises to potential new
tenants. Negotiations of renewal options must be completed
within thirty (30) days, after Tenant gives written notice to
exercise its option to renew. Notwithstanding the above,
Landlord may decide not to renew Tenant's lease at its sole
discretion.
2.10 Holding Over. If Tenant does not vacate the premises
upon the expiration or earlier termination of this Lease, Tenant
shall be a Tenant at sufferance for the holdover period and all
of the terms and provisions of this Lease shall be applicable
during that period, except that Tenant shall pay Landlord (in
addition to Additional Rent payable under Section 2.3 and any
other sums payable under this Lease) as Base Rent for the period
of such holdover an amount equal to two times the Base Rent
which would have been payable by Tenant had the holdover period
been a part of the original term of this Lease (without waiver
of Landlord's rights to recover damages as permitted by law).
Upon the expiration or earlier termination of this Lease, Tenant
agrees to vacate and deliver the Premises, and all keys thereto,
to Landlord upon delivery to Tenant of notice from Landlord to
vacate. The rental payable during the holdover period shall be
payable to Landlord on demand. No holding over by Tenant,
whether with or without the consent of Landlord shall operate to
extend the term of this Lease. Tenant shall indemnify Landlord
against all claims made by any tenant of prospective tenant
against Landlord resulting from delay by Landlord in delivering
possession of the Premises to such other tenant or prospective
tenant.
ARTICLE 3. OCCUPANCY, USE AND OPERATIONS
3.1 Use and Operations of Tenant's Business. Tenant warrants and
represents to Landlord that the Premises shall be used and
occupied only for the purpose as set forth in Section 1.11.
Tenant shall occupy the Premises, conduct its business and
control its agents, employees, invitees and visitors in such a
manner as is lawful, reputable and will not create a nuisance to
other tenants of the property. Tenant shall continuously
throughout the Lease Term occupy the Premises under the Trade
Name. Tenant shall at all times operate its business in a first
class manner. Tenant shall not conduct any auction or fire or
bankruptcy sale in the Premises. Tenant shall not solicit
business, distribute handbills or display merchandise within the
common areas, nor take any action which would interfere with the
rights of other persons to use the Common Areas. Tenant shall
not permit any operations which emits any odor or matter which
intrudes into other portions of the Property, use any apparatus
or machine which makes undue noise or causes vibration in any
portion of the Property or otherwise interfere with, annoy or
disturb any other tenant in its normal business operations or
Landlord in its management of the Property. Tenant shall neither
permit any waste on the Premises nor allow the Premises to be
used in any way which would, in the opinion of Landlord, be
extra hazardous on account of fire or which would in any way
increase or render void the fire insurance on the Property.
3.2 Signs. Tenant shall be responsible for the installation of
a sign within thirty (30) days of occupancy in accordance with
the sign criteria attached hereto as Exhibit G. No other sign
of any type or description shall be erected, placed or painted
in or about the premises or the property without Landlord's
prior written consent, and Landlord reserves the right to
remove, at Tenant's expense, all signs other than signs approved
in writing by Landlord under this Section 3.2, without notice to
Tenant and without liability to tenant for any damage caused by
the removal of the signs. Landlord reserves the right, in
Landlord's discretion, to permit a sign or signs which deviate
from the Landlord's then-established sign criteria, and such
permission by Landlord to any tenant or tenants shall not give
rise to any rights in other tenants to object thereto or to
require Landlord to permit such other tenant to deviate from the
criteria. Nothing contained herein shall limit Landlord's right
to modify or amend such criteria from time to time.
3.3 Compliance with Laws, Rules and Regulations. (a) Tenant at
Tenant's sole cost and expense, shall comply with all laws,
ordinances, orders, rules and regulations of state, federal,
municipal or other agencies or bodies having jurisdiction over
the use, condition or occupancy of the Premises. Tenant shall
procure at its own expense all permits and licenses required for
the transaction of its business in the Premises.
(b) The "Americans with Disabilities Act of 1990" (ADA) is a
federal law that prohibits discrimination on the basis of
disability. The requirements of this act vary with the type of
business the Tenant is engaged in and the number of employees
the Tenant has both at this. and other locations. The Landlord
is not qualified to determine which provisions of ADA apply to
Tenant. therefore the Tenant shall determine if the leased
space complies with the accessibility guidelines under ADA and
advise the Landlord if any physical modifications to this
facility are required to meet the Tenant's needs under this law,
or any other law, code or regulations. Modifications requested
by Tenant to the leased facility shall be made by Landlord, and
the Tenant shall pay Landlord the full cost of the modifications
requested. The Tenant shall indemnify and hold harmless the
Landlord and its agents and employees from and against all
claims, damages, loses and expenses, including but not limited
to Attorney's fees, arising out of or resulting from the
Tenant's compliance of failure to comply with the ADA or other
laws, codes or regulations.
(c) Tenant will comply with the rules and regulations of the
Property adopted by Landlord attached hereto as Exhibit E. If
Tenant is not complying with such rules and regulations, or if
Tenant is in any way not complying with this Article 3, then,
notwithstanding anything to the contrary contained herein,
Landlord may, at its election, enter the Premises without
liability therefor and fulfill Tenant's obligations. Tenant
shall reimburse Landlord on demand, as Additional Rent, for any
expenses which Landlord may incur in effecting compliance with
Tenant's obligations and agrees that Landlord shall not be
liable for any damages resulting to Tenant from such actions.
Landlord shall have the right at all times to change and amend
the rules and regulations in any reasonable manner as it may
deem advisable for the safety, care, cleanliness, preservation
of good order and operations or use of the Property or Premises.
All changes and amendments to the rules and regulations of the
Property will be forwarded by Landlord to Tenant in writing and
shall thereafter be carried out and observed by Tenant.
3.4 Warranty of Possession. Landlord and Tenant each warrants
that it has the right and authority to execute this Lease, and
Landlord warrants to Tenant that upon payment of the required rents
by Tenant and subject to the terms, conditions, covenants and
agreements contained in this Lease, Tenant shall have possession of
the Premises during the full term of this Lease, as well as any
extension or renewal thereof, without hindrance from Landlord or
any person or persons lawfully claiming the Premises by, through or
under Landlord (but not otherwise); subject, however, to all
mortgages, deeds of trust, leases and agreements to which this
Lease is subordinate and to all laws, ordinances, orders, rules
and regulations of any governmental authority. Landlord shall
not be responsible for the acts or omissions of any other lessee
or third party that may interfere with Tenant's use and
enjoyment of the Premises.
3.5 Inspection. Landlord or its authorized agents shall at any
and all reasonable times have the right to enter the Premises to
inspect the same, to supply janitorial service or any other
service to be provided by Landlord, to show the Premises to
prospective mortgagees, purchasers or prospective tenants, and
to alter, improve or repair the Premises or any other portion of
the Property. Tenant hereby waives any claim for abatement or
reduction of rent, or for any damages for injury, or inconvenience
to, or interference with, Tenant's business, for any loss or occupancy
or use of the Premises, and for any other loss occasioned thereby.
Landlord shall at all times have and retain a key with which to unlock
all of the doors in, upon and about the Premises. Tenant shall
not change Landlord's lock system or in any manner prohibit
Landlord from entering the Premises. Landlord shall have the
right at all times to enter the Premises by any means in the
event of an emergency without liability therefor.
3.6 Taxes. Tenant shall be liable for all taxes levied against
leasehold improvements, merchandise, personal property, trade
fixtures and all other taxable property located in the Premises.
If any such taxes for which Tenant is liable are levied against
Landlord or Landlord's property and if Landlord elects to pay the
same or if the assessed value of Landlord's property is increased
by inclusion of personal property and trade fixtures placed by Tenant
in the Premises and Landlord elects to pay the taxes based on such
increase, Tenant shall pay to Landlord, upon demand, that part
of such taxes for which the Tenant is primarily liable pursuant
to the terms of this Section. Tenant shall pay when due any and
all taxes related to Tenant's use and operation of its business
in the Premises.
3.7 Garbage. All garbage and refuse shall be kept in an area
designated by Landlord and in the kind of container specified by
Landlord and shall be placed outside of the Premises daily,
prepared for collection in the manner and at the times and
places specified by Landlord. If Landlord provides or
designates a service for collection of refuse and garbage,
Tenant shall use it, at Tenant's expense, provided the cost
thereof is competitive with any identical service available to
Tenant.
ARTICLE 4. - UTILITIES AND SERVICE
4.1 Utility Services. Landlord shall provide or cause to be
provided the mains, conduits and other facilities necessary to
supply water, gas, electricity, telephone service, and sewage
service to the Premises. Tenant shall, however, be responsible,
at its expense, to make provisions for connecting or hooking up
to such utilities, directly with the appropriate utility company
furnishing same.
4.2 Tenant Responsible for Charges. Tenant shall promptly pay
all charges and deposits for electricity, water, gas, telephone
service and sewage service and utilities furnished to the
Premises. Landlord may, if it so elects, furnish one or more
utility services to Tenant, and in such event, Tenant shall
purchase the use of such services as are tendered by Landlord,
and shall pay upon demand the rates established therefor by
Landlord which shall not exceed the rate which would be charged
for the same services if furnished to Tenant directly by the local
public utility furnishing the same to the public at large. Landlord
may at any time discontinue furnishing any such service without
obligation to Tenant other than to connect the Premises to the
public utility, if any, furnishing such service.
4.3 Landlord's Services. Landlord shall provide routine
maintenance, painting and electrical lighting service for all
Common Areas and special service areas of the Property in the
manner and to the extent deemed by Landlord to be standard.
Landlord may, in its sole discretion, provide additional
services not enumerated herein.
4.4 No Liability. Landlord shall not be liable for any
interruption whatsoever in utility services not furnished by it,
nor for interruption in utility service furnished by it which
are due to fire, accident, strikes, acts of God, riot, civil
commotion, terrorist act, national emergency, shortage or labor
or materials or other causes beyond the control of Landlord or
in order to make alterations, repairs or improvements. Moreover,
Landlord shall not be liable for any interruption of such
utility services which continues during any reasonable period
necessary to restore such service upon the occurrence of any of
the foregoing conditions. Failure by Landlord to any extent to
provide any services of Landlord specified herein or any other
services not specified, or any cessation thereof, shall not render
Landlord liable in any respect for damages to either person or
property, be construed as an eviction of Tenant, work and abatement
of or relieve Tenants from fulfillment of any covenant in this Lease.
If any of the equipment or machinery necessary or useful for provision
of any utility services, and for which Landlord is responsible, breaks
down, or for any cause ceases to function property, Landlord
shall use reasonable diligence to repair the same promptly, but
Tenant shall have no claim for rebate of rent or damages on
account of any interruption in service occasioned from the
repairs.
4.5 Theft or Burglary. Landlord shall not be liable to Tenant
for losses to Tenant's property or personal injury caused by
criminal acts or entry by unauthorized persons into the Premises
or the Property.
ARTICLE 5. - REPAIRS AND MAINTENANCE
5.1 Landlord Repairs. Landlord shall not be required to make
any improvements, replacements or repairs of any kind or
character to The Premises during the term of this Lease except
as are set forth in this Section. Landlord shall maintain only
the roof, foundation, parking and Common Areas, the structural
soundness of the structural soundness of the exterior walls.
Landlord's cost of maintaining and repairing the items set
forth in this Section are subject to the additional rent
provisions in Section 2.2. Landlord shall not be liable to
Tenant except as expressly provided in this Lease, for any
damage or inconvenience, and Tenant shall not be entitled to any
damages nor to any abatement or reduction of rent by reason of
any repairs, alterations or additions made by Landlord under
this Lease.
5.2 Tenant Repairs. Tenant, at its own cost and expense, shall
maintain the Premises in a first class condition (except for
those items that are the responsibility of Landlord under
Section 5. 1). Without limiting the generality of the
foregoing, Tenant shall maintain and keep in good repair
(including replacement when necessary):
(a) the interior of the Premises, including walls, floors and
ceilings;
(b) all windows and doors, including frames, glass, molding and
hardware;
(c) all wires and plumbing within the Premises which service the
Premises (as distinguished from those serving the Building
generally);
(d) all signs, air conditioning and hearing equipment,
mechanical doors and other mechanical equipment situated on or
in the Premises or serving the Premises (as distinguished from
those serving the Building generally); and
(e) those utility facilities that are not the Landlord's
responsibility hereunder. Tenant shall further make all other
repairs to the Premises made necessary by Tenant's failure to
comply with its obligations under this Section. All fixtures
installed by Tenant shall be new or shall have been completely
and recently reconditioned.
5.3 Request for Repairs. All requests for repairs or maintenance
that are the responsibility of the Landlord pursuant to any
provision of this Lease must be made in writing to Landlord at
the address in Section 1.10.
5.4 Tenant Damages. Tenant shall not allow any damage to be
committed on any portion of the Premises or Property, and at the
termination of this Lease, by lapse of time or otherwise, Tenant
shall deliver the Premises to Landlord in as good condition as
existed at the Commencement Date of this Lease, ordinary wear
and tear excepted. The cost and expense of any repairs
necessary to restore the condition of the Premises shall be
borne by Tenant.
ARTICLE 6. ALTERATIONS AND IMPROVEMENTS
6.1 Construction. If any construction of tenant improvements is
necessary for the initial occupancy of the Premises, such action shall
be accomplished and the cost of such construction shall be borne by
Landlord and/or Tenant in accordance with Exhibit F attached hereto.
Except as expressly provided in this Lease, Tenant acknowledges
and agrees that Landlord has not undertaken to perform any
modification, alteration or improvements to The Premises, and
Tenant further waives any defects in the Premises and
acknowledges and accepts (1) the Premises as suitable for the
purpose for which they are leased and (2) the Property and every
part and appurtenance thereof as being in good and satisfactory
condition. Upon the request of Landlord, Tenant shall deliver
to Landlord a completed acceptance of premises memorandum in
Landlord's prescribed form.
6.2 Tenant Improvements. Tenant shall not make or allow to be
made any alterations, physical additions or improvements in or to the
Premises without first obtaining the written consent of Landlord, which
consent may in the sole and absolute discretion of Landlord be denied.
Any alterations, physical additions or improvements the Premises made
by or installed by either party hereto shall remain upon and be
surrendered with the Premises and become the property of
Landlord upon the expiration or earlier termination of this
Lease without credit to Tenant; provided, however, Landlord at
its option may require Tenant to remove any physical
improvements or additions and/or repair any alterations in order
to restore the Premises to the condition existing at the time the Tenant
took possession, all costs of removal and/or alterations to be borne
by Tenant. This clause shall not apply to moveable equipment,
furniture or moveable trade fixtures owned by Tenant, which may
be removed by Tenant at the end of the term of this Lease if
Tenant is not then in default and if such equipment and
furniture are not then subject to any other rights, liens and
interests of Landlord. Tenant shall have no authority or power,
express or implied, to create or cause any mechanic's or
materialmen's lien, charge or encumbrance of any kind against
the Premises, the Property or any portion thereof. Tenant shall
promptly cause any such liens that have arisen by reason of any
work claimed to have been undertaken by or through Tenant to be
released by payment, bonding or otherwise within thirty (30)
days after request by Landlord, and shall indemnify Landlord
against losses arising out of any such claim (including, without
limitation, legal fees and court costs).
6.3 Common and Service Area Alterations. Landlord shall have the
right to decorate and to make repairs, alterations, additions,
changes or improvements, whether structural or otherwise, in,
about or on the exterior of the Property, or any part there of
exclusive of the Premises, and to change, alter, relocate,
remove or replace service areas and/or Common Areas, and to
otherwise alter or modify the Property exclusive of the Premises
and for such purposes, to take such measures for safety or for
the expediting of such work as may be required, in Landlord's
judgment, all without affecting any of Tenant's obligations
hereunder.
ARTICLE 7. - CASUALTY AND INSURANCE
7.1 Substantial Destruction. If in the determination of Landlord
the Premises should be totally destroyed by fir or other
casualty, or if in the determination of Landlord the Premises
should be damaged to that rebuilding cannot reasonably be
completed substantially within one hundred and eighty (180)
working days after Landlord's receipt of written notification of
Tenant of the destruction, or if the Premises are damaged or
destroyed by casualty not covered by the standard broad form of
fire and extended coverage insurance then in common use in the
State of North Carolina, then, at Landlord's sole option, this
Lease shall terminate and, in such case, the rent shall be
abated for the unexpired portion of the Lease, effective as of
the date of the written notification.
7.2 Partial Destruction. If following damage or destruction to
the Premises by fire or other casualty, this Lease is not
terminated pursuant to Section 7.1 hereof, this Lease shall not
terminate, and Landlord shall proceed, to the extent of
insurance proceeds actually received by Landlord after the
exercise by any mortgage of the Property of an option to apply
proceeds against Landlord's debt to such mortgages, with
reasonable diligence to rebuild or repair the Building or other
improvements to substantially the same conditions in which they
existed prior to the damage. If the Premises are to be rebuilt
or repaired and are untenable in whole or in part following the
damage, and the damage or destruction was not caused or
contributed to by act or negligence of Tenant, its agents,
employees, invitees or those for whom Tenant is responsible, the
Base Rent payable under this Lease during the period for which
the Premises are untenable shall be reduced to an amount
determined by multiplying the Base Rent that would otherwise be
payable but for this provision by the ratio that the portion of
the Premises not rendered untenable bears tot he total net
rentable area of the Premises prior to the casualty.
Landlord's obligation to rebuild or restore under this Section
shall be limited to restoring the Premises to substantially the
condition in which the same existed prior to the casualty,
exclusive of improvements for which Tenant is responsible under
Section 6.1 and Exhibit F, and Tenant shall, promptly after the
completion of such work by Landlord, proceed with reasonable
diligence and at Tenant's sole cost and expense to restore those
improvements for which Tenant is responsible to substantially
the condition in which the same existed prior to the casualty
and to otherwise make the Premises suitable for Tenant's use. If
Landlord fails to substantially complete the necessary repairs
or rebuilding within one hundred and eighty (180) working days
from the date of the Landlord's receipt of written notification by
Tenant of the destruction, Tenant may at its own option terminate
this Lease by delivering written notice of termination to Landlord,
whereupon all rights and obligations under this Lease shall cease to exist.
7.3 Property Insurance. Landlord shall at all times during the
term of this Lease insure the Property against all risk of
direct physical loss in an amount and with such deductibles as
Landlord considers appropriate, provided, Landlord shall not be
obligated in any way or manner to insure personal property
(including, but not limited to, any furniture, machinery, goods
or supplies) of Tenant upon or within the Premises, any fixtures
installed or paid for by Tenant upon or within the Premises, or
any improvements which Tenant may construct on the Premises.
Tenant shall have not right in or claim to the proceeds of any
policy of insurance maintained by Landlord even if the cost of
such insurance is borne by Tenant as set forth in Article 2.
Landlord shall have the right to self-insure against the
above-described risk. Tenant at all times during the term of
this Lease shall, at its own expense keep in full force and
effect insurance against fire and such other risks as are from
time to time included in standard all-risk insurance policy
(including coverage against vandalism and malicious mischief)
for the full replacement cost of Tenant's trade fixtures,
furniture, supplies and all items of personal property of Tenant
located on or within the Premises. Tenant's policy shall
include business interruption/extra expense coverage in
sufficient amounts. Landlord shall be a named insured on said
policy.
7.4 Waiver of Subrogation. Anything in this Lease to the
contrary notwithstanding, Landlord and Tenant hereby waive and
release each other of and from any and all right of recovery,
claim, action or cause of action against each other, their
agents, officers and employees, for any loss or damage that may
occur to the Premises, improvements to the Property, or personal
property within the Property, by reason of fire or the elements,
regardless of cause or origin, including negligence of Landlord
or Tenant and their agents, officers and employees. Landlord and
Tenant agree immediately to give their respective insurance
companies which have issued policies of insurance covering all
risk of direct physical loss, written notice of the terms of the
mutual waivers contained in this Section, and to have the
insurance policies properly endorsed, if necessary, to prevent
the invalidation of the insurance coverages by reason of the
mutual waivers.
7.5 Hold Harmless. Landlord shall not be liable to Tenant or to
Tenant's customers, employees, agents, guests or invitees, or to
any other person whomever, for any injury to persons or damage
to property on or about the Premises, including but not limited
to, consequential damage, (1) caused by any act or omission of
Tenant, its employees, subtenants, licensees and concessionaires
or of any other person entering the Property or the Premises by
express or implied invitation of Tenant, or (2) arising out of
the use of the Premises or the Property by Tenant, its
employees, subtenants, licensees, concessionaires or invitees,
or (3) arising out of any breach or default by Tenant in the
performance of its obligations hereunder or, (4) caused by the
improvements located in the Premises becoming out of repair or
by defect in or failure of equipment, pipes, or wiring, or by
broken glass or by the backing up of drains, or by gas, water,
steam, electricity or oil leaking, escaping or flowing into the
Premises or Property, or (5) arising out of the failure or
cessation of any service provided by Landlord (including
security service and devices), and Tenant hereby agrees to
indemnify Landlord and hold Landlord harmless from any
liability, loss, expense or claim (including, but not limited
to, reasonable attorney's fees) arising out of such damage or
injury. Nor shall Landlord be liable to Tenant for any loss or
damage that may be occasioned by or through the acts of
omissions of other tenants of the Property or of any other
persons whomsoever, excepting only duly authorized employees and
agents of Landlord acting within the scope of their authority.
Further, Tenant specifically agrees to be responsible for and
indemnify and hold Landlord harmless from any and all damages or
expenses of whatever kind arising out of or caused by a
burglary, theft, vandalism, malicious mischief or other illegal
acts performed in, at or from the Premises.
7.6 Liability Insurance. (a) Tenant at all times during the
Lease shall, at its own expense, keep in full force and effect,
commercial general liability insurance with "personal injury"
coverage and contractual liability coverage, with minimum
combined bodily injury and property damage limit of $1,000,000
per occurrence and $2,000,000 aggregate per location subject to
no deductible. Landlord shall be an additional insured on said
policy. Definition of additional insured shall include all
partners, officers, directors, employees, agents and
representatives of the named entities including its managing
agent. Further, coverage for additional insured shall apply on a
primary basis irrespective of any other insurance, whether
collectible or not. All insurance policies or duly executed
certificates for the same required to be carried by Tenant under
this Lease, together with satisfactory evidence of the payment
of the premium thereof, shall be deposited with Landlord on the
date Tenant first occupies the Premises and upon renewals of
such policies not less than fifteen (15) days prior to the
expiration of the term of such coverage. All insurance
required to be carried by Tenant under this Lease shall be in
form and content, and written by insurers acceptable to
Landlord, in its sole discretion. If Tenant shall fail to
comply with any of the requirements contained relating to
insurance, Landlord may obtain such insurance and Tenant shall
pay to Landlord, on demand as additional rent hereunder, the
premium cost thereof.
(b) Affording coverage under the Workers Compensation laws of
the State of North Carolina and Employers Liability coverage
subject to a limit of no less than $100,000 each employee,
$100,000 each accident, $500,000 policy limit.
(c) Tenant shall maintain umbrella liability insurance of not
less than a $3,000,000 limit providing excess coverage over all
limits and coverages noted in 7.6a and 7.6b above. This policy
shall be written on an occurrence basis. All policies noted
above shall be written with insurance companies licensed to do
business in the State of North Carolina and rated no lower than
A:10 in the most current edition of AM Best's Casualty Key
Rating Guide. All policies shall be endorsed to provide that in
the event of cancellation, non-renewal or material modification,
Landlord shall receive thirty (30) days written notice thereof.
7.7 Boiler Insurance. At all times when a "boiler", as that
term is defined for the purposes of boiler insurance, is
located within the Premises, Tenant shall carry, at its expense,
boiler insurance with policy limits of not less than One Hundred
Thousand Dollars ($100,000.00) insuring both Landlord and Tenant
against loss or liability caused by the operation or malfunction
of such boiler.
7.8 Hazardous Material. Throughout the term of this Lease,
Tenant shall prevent the presence, use, generation, release,
discharge, storage, disposal, or transportation of any hazardous
materials (as herein after defined) on, under, in, above, to, or
from the Premises other than in strict compliance with all applicable
federal, state, and local laws, rules, regulations and orders.
For purposes of this provision the term "hazardous materials" shall
mean and refer to any wastes, materials or other substances of any
kind or character that are or become regulated as hazardous or toxic
waste or substances, or which require special handling or treatment,
under any applicable local, state or federal law, rule, regulation or
order. Tenant shall indemnify, defend, and hold harmless from
and against:
(a) any loss, cost, expense, claim or liability arising out of
any investigation, monitoring, clean-up, containment, removal,
storage, or restoration work (herein referred to as "Remedial
Work") required by, or incurred by Landlord or any other person
or party in a reasonable belief that such Remedial Work is
required by any applicable federal, state or local law, rule,
regulation or order, or by any governmental agency, authority,
or political subdivision having jurisdiction over the Premises,
and
(b) any claims of third parties for loss, injury, expense or
damage arising out of the presence, release or discharge of any
hazardous materials on, under, in, above, to or from the
Premises. In the event any Remedial Work is so required under
any applicable federal, state, or local law, rate, regulation or
order, Tenant shall promptly perform or cause to be performed
such Remedial Work in compliance with such law, rule, regulation
or order. In the event Tenant shall fail to commence the
Remedial Work in a timely fashion, or shall fail to prosecute
diligently the Remedial Work to completion, such failure shall
constitute an event of default on the part of the Tenant under
the terms of this Lease, and Landlord, in addition to any other
rights or remedies afforded it hereunder, may, but shall not be
obligated to, cause the Remedial Work to be performed, and
Tenant shall promptly reimburse Landlord for the cost and
expense thereof upon demand.
ARTICLE 8 - CONDEMNATION
8.1 Substantial Taking. If in the determination of the Landlord
all or a substantial part of the Premises are taken for any
public or quasi-public use under any governmental law, ordinance
or regulation, or by right of eminent domain or by purchase in
lieu thereof, and in the determination of Landlord the taking
would prevent or materially interfere with the use of the
Premises for the purpose for which it is then being used, this
Lease shall, at the option of either Landlord or Tenant,
terminate and the rent shall be abated during the unexpired
portion of this Lease effective on the date physical possession
is taken by the condemning authority.
8.2 Partial Taking. If in the determination of Landlord a
portion of the Premises shall be taken for any public or
quasi-public use under any governmental law, ordinance or
regulation, or by right of eminent domain or by purchase in lieu
thereof, and this Lease is not terminated as provided in Section
8.1 above, Landlord shall restore and reconstruct, to the extent
of condemnation proceeds (excluding any proceeds for land)
actually received after the exercise by any mortgagee of the
Property of an option to apply such proceeds against Landlord's
debt to such mortgagee, the Property and other improvements on
the Premises to the extent necessary to make it reasonably
tenantable. The Base Rent payable under this Lease during the
unexpired portion of the term shall be reduced to an amount
determined by multiplying the Base Rent that would otherwise be
payable but for this provision by the ratio that the portion of
the Premises not rendered untenantable bears to the total net
rentable area of the Premises prior to the casualty. If
Landlord fails to substantially complete such restoration and
reconstruction within one hundred and eighty (180) working days
of the date of the physical possession by the condemning
authority, Tenant may at its option terminate this Lease by
delivering written notice of termination to Landlord, whereupon
all rights and obligations of this shall cease to exist.
8.3 Condemnation Proceeds. All compensation awarded for any
taking (or the proceeds of private sale in lieu thereof),
whether for the whole or a part of the Premises, shall be the
property of Landlord (whether such award is compensation for
damages to Landlord's or Tenant's interest in the Premises) and
Tenant hereby assigns all of its interest in any such award to
Landlord, provided, however, Landlord shall have no interest in
any award made to Tenant for loss of business or for taking of
Tenant's fixtures and other property within the Premises if a
separate award for such items is made to Tenant.
ARTICLE 9. - ASSIGNMENT OR SUBLEASE
9.1 Tenant Assignment. Tenant shall not assign in whole or in
part, this Lease or allow it to be assigned, in whole or in
part, by of law or otherwise (including without limitation by
merger, dissolution or transfer of a controlling interest in any
partnership or corporate Tenant, which merger, dissolution or
transfer shall be deemed an assignment) or mortgage or pledge
the same, or sublet the Premises, in whole or part, without the
prior written consent of Landlord, and in no event shall any
such assignment of sublease ever release Tenant or any guarantor
from any obligation or liability hereunder. No assignee or
subleasee of the Premises or any portion thereof may assign or
sublet the Premises or any portion thereof.
9.2 Conditions of Tenant Assignment. If Tenant desires to assign
or sublet all or any part of the Premises, it shall notify
Landlord in writing at least (30) days in advance of the date on
which Tenant desires to make such assignment or sublease.
Tenant shall provide Landlord with a copy of the proposed
assignment or sublease and such information as Landlord might
request concerning the proposed sublessee or assignee to allow
Landlord to make informed judgments as to the financial
condition, reputation, operations and general desirability of
proposed sublessee or assignee. Within Fifteen (15) days after
Landlord's receipt of Tenant's proposed assignment or sublease
and all required information concerning the proposed sublessee
or assignee, Landlord shall have the following options:
(1) cancel this Lease as to the Premises or portion thereof
proposed to be assigned or sublet;
(2) consent to the proposed assignment or sublease, and, if the
rent due and payable by any assignee or sublessee under any such
permitted assignment or sublease (or a combination of the rent
payable under such assignment or sublease plus any bonus or any
other consideration or any payment incident thereto) exceeds the
rent payable under this Lease for such space, Tenant shall pay
to Landlord all such excess rent and other excess consideration
within ten (10) days following receipt thereof by Tenant; or
(3) refuse, in its sole and absolute discretion and judgment, to
consent to the proposed assignment or sublease, which refusal
shall be deemed to have been exercised unless Landlord gives
Tenant written notice stating otherwise. Upon the occurrence of
an event of default by Tenant under this Lease, if all or any
part of the Premises are then assigned or sublet, Landlord, in
addition to any other remedies provided by this Lease or
provided by law, may, at its option, collect directly from the
assignee or sublessee all rents becoming due to Tenant by reason
of the assignment or sublease, and Landlord shall have a
security interest in all properties belonging to Tenant on the
Premises to secure payment of such sums. No collection directly
by Landlord from the assignee or sublessee shall be construed to
constitute a novation or a release of Tenant or any guarantor
from the further performance of its obligations under this
Lease. All legal fees and expenses incurred by Landlord in
connection with the review by Landlord of Tenant's requested
assignment or sublease pursuant to this Section, together
with any legal fees and disbursements incurred in the
preparation and/or review of any documentation, shall be the
responsibility of Tenant and shall be paid by Tenant within five
(5) days of demand for payment thereof, as rental hereunder. If
the rent due and payable by any assignee or sublessee under any
such permitted assignment or sublease (or a combination of the
rent payable under such assignment or sublease plus any bonus or
any other consideration or any payment incident thereto) exceed
the Rent payable under this Lease for such space, Tenant shall
pay to Landlord all such excess rent and other excess
consideration within ten (10) days, following receipt thereof by
Tenant.
9.3 Landlord Assignment. Landlord shall have the right to sell,
transfer or assign, in whole or in part, its rights and
obligations under this Lease and in the Property. Any such sale,
transfer or assignment shall operate to release Landlord from
any and all liabilities under this Lease arising after the date
of such sale, assignment or transfer.
9.4 Rights of Mortgagee. Tenant accepts this Lease subject and
subordinate to any recorded lease, mortgage or deed of trust
lien presently existing, if any, or hereafter encumbering the
Property and to all existing ordinances and recorded
restrictions, covenants, easements and agreements with respect
to the Property. Landlord hereby is irrevocably vested with
full power and authority to subordinate Tenant's interest under
this Lease to any mortgage or deed of trust lien hereafter
placed on the Property. Upon any foreclosure, judicially or
non-judicially, of any such mortgage, or the sale of the
Property in lieu of foreclosure, or any other transfer of
Landlord's interest in the Property, whether or not in
connection with a mortgage, Tenant hereby does, and hereafter
agrees to attorn the purchaser at such foreclosure sale or to
the grantee under any deed in lieu of foreclosure or to any
other transferee of Landlord's interest, and shall recognize
such purchaser, grantee, or other transferee as Landlord under
this Lease, and no further attornment or other agreement shall
be required to effect or evidence Tenant's attornment to and
recognition of such purchaser or grantee as Landlord hereunder.
Such agreement of Tenant to attorn shall survive any such
foreclosure sale, trustee's sale, conveyance in lieu thereof, or
any other transfer of Landlord's interest in Property. Tenant,
upon demand, at any time, before or after any such foreclosure
sale, trustee's sale, conveyance in lieu thereof, or other
transfer shall execute, acknowledge, and deliver to the
prospective transferee and/or mortgage a Lease Subordination,
Non-Disturbance and Attornment Agreement and any additional
written instruments and certificates evidencing such attornment
as the mortgagee or other prospective transferee may reasonably
require, and Tenant hereby irrevocably appoints Landlord as
Tenant's agent and attorney-in-fact for the purpose of
executing, acknowledging, and delivering any such instruments
and certificates. Notwithstanding anything to the contrary
implied in this Section, any mortgagee under any mortgage shall
have the right at any time to subordinate any such mortgage to
this Lease on such terms and subject to such conditions as the
mortgagee in its discretion may consider appropriate.
9.3 Estoppel Certificates. Tenant agrees to furnish, from time
to time, within ten (10) days after receipt of a request from
Landlord or Landlord's mortgagee, a statement certifying, if
applicable, all or some of the following; Tenant is in
possession of the Premises; the Lease is in full force and
effect; the Lease is unmodified (except as disclosed in such
statement); Tenant claims no present charge, lien or claim of
offset against Rent; the Rent is paid for the current month, but
it is not prepaid for more than one (1) month and will not be
prepaid for more than one (1) month in advance; there is no
existing default by reason of some act or omission by Landlord;
the Landlord has performed all inducements required of Landlord
in connection with the Lease, including construction
obligations, and Tenant accepts the Premises as constructed; an
acknowledgment of the assignment of rentals and other sums due
hereunder to the mortgagee and agreement to be bound thereby;
an agreement requiring Tenant to advise the mortgagee of damage
to or destruction of Premises by fire or other casualty
requiring reconstruction; an agreement by Tenant to give the
mortgagee written notice of Landlord's default hereunder and to
permit the mortgagee to cure such default within a reasonable
time after such notice before exercising any remedy Tenant might
possess as a result of such default; and such other matters as
may be reasonably required by Landlord's mortgagee. Tenant's
failure to deliver such statement, in addition to being a
default under this Lease , shall be deemed to establish
conclusively, that this Lease is in full force and effect except
as declared by Landlord, that Landlord is not in default of any
of its obligations under this Lease, and that Landlord has not
received more than one (1) month's Rent in advance.
ARTICLE 1O. -LIENS
10.1 Landlord's Lien. As security for payment of Rent, damages
and other payments required to be made by this Lease, and in
addition to any statutory lien or security interest, Tenant
hereby grants to Landlord a lien upon and security interest in
all property of Tenant now or subsequently located upon the
Premises. If Tenant is in default of any provision of this
Lease, Landlord may enter upon the Premises by picking or
changing locks if necessary , without being liable for any claim
for damages, and take possession of all or any part of such
property, and may sell all or any part of such property at a
public or private sale, in one or successive sales, with or
without notice, to the highest bidder for cash, and, on belief
of Tenant, sell and convey all or part of such property to the
highest bidder all of Tenant's title and interest in the
property sold. The proceeds of the sale of such property shall
be applied by Landlord toward the reasonable costs and expenses
of the sale, including attorneys fees, and then toward the
payment of all sums then due by Tenant to Landlord under the
terms of this Lease. Any excess remaining shall be paid to
Tenant or any person entitled thereto by law.
10.2 Uniform Commercial Code. This Lease is intended as and
constitutes a security agreement within the meaning of the
Uniform Commercial Code of the state in which the Premises are situated.
Landlord, in addition to the rights prescribed in this Lease, shall have
all of the rights, titles, liens and interests in and to Tenant's property,
now or hereafter located upon the Premises, which may be granted a
secured party, (as that term is defined under such Uniform
Commercial Code), under this Lease. Tenant will on request
execute and deliver to Landlord a financing statement (or
continuation statement) for the purpose of perfecting landlord's
security interest under this Lease.
ARTICLE 11 - DEFAULT AND REMEDIES
11.1 Default by Tenant. The following shall be deemed to be
events of default by Tenant under this Lease:
(1) Tenant shall fail to pay when due any installment of Rent
or any other payment required pursuant to this Lease;
(2) Tenant shall abandon any substantial portion of the
Premises;
(3) Tenant or any guarantor of Tenant's obligations hereunder
shall file a petition or be adjudged bankrupt or insolvent under
any applicable federal or state bankruptcy or insolvency law or
admit that it cannot meet its financial obligations as they
become due, or a receiver or trustee shall be appointed for all
or substantially all of the assets of Tenant or any guarantor of
Tenant's obligations hereunder;
(4) Tenant or any guarantor of Tenant's obligations hereunder
shall make a transfer in fraud of creditors or shall make an
assignment for the benefit of creditors;
(5) Tenant shall do or permit to be done any act which results
in a lien being filed against the Premises or the Property;
(6) the liquidation, termination, dissolution or (of the Tenant
is a natural person) the death of Tenant or any guarantor of
Tenant's obligations hereunder;
(7) Tenant vacates or abandons the Premises for a period of
fifteen (15) consecutive business days;
(8) Tenant shall be in default of any other term, provision or
covenant of this Lease, and such default is not cured within ten
(10) days after written notice thereof to Tenant;
11.2 Remedies for Tenant's Default. Upon the occurrence of any
event of default set forth in this Lease, Landlord shall have
the option to pursue any one or more or the remedies set forth
in this Section 11.2 without any additional notice or demand:
(1) Without declaring the Lease terminated, Landlord may enter
upon and take possession of the Premises, by picking or changing
locks if necessary, and lock out, expel or remove Tenant and any
other person who may be occupying all or any part of the
Premises without being liable for any claim for damages, and
relet the Premises on behalf of Tenant and receive the rent
directly by reason of the reletting. Tenant agrees to pay
Landlord on demand any deficiency that may arise by reason of
any reletting of the Premises, further, Tenant agrees to
reimburse Landlord for any reasonable expenditure made by it in
order to relet the Premises, including but not limited to,
remodeling and repair costs, brokerage commissions and
attorney's fees.
(2) Without declaring the Lease terminated, Landlord may enter
upon the Premises by picking or changing locks if necessary,
without being liable for any claim for damages, and do whatever
Tenant is obligated to do under the terms of this Lease. Tenant
agrees to reimburse Landlord on demand for any reasonable
expenses which Landlord may incur in effecting compliance with
Tenant's obligations under this Lease; further, Tenant agrees
that Landlord shall not be liable for any damages resulting to
Tenant from effecting compliance with Tenant's obligations under
this Lease caused by the negligence of Landlord or otherwise.
(3) Landlord may terminate this Lease, in which event Tenant
shall immediately surrender the Premises to Landlord, and of
Tenant fails to surrender the Premises, Landlord may, without
prejudice to any other remedy which it may have for possession
or arrearages in rent, enter upon and take possession of the
Premises, by picking or changing locks if necessary, and lock
out, expel or remove Tenant and any other person who may be
occupying all or any part of the Premises without being liable
for any claim for damages. Tenant agrees to pay on demand the
amount of all loss and damage which Landlord may suffer for any
reason due to the termination of this Lease unde this Section
11.2, including (without limitation) loss and damage due to the
failure of Tenant to maintain and/or repair the Premises as
required hereunder and/or due to the inability of Landlord to
relet the Premises on satisfactory terms or otherwise.
Landlords exercise, following a default by Tenant under this
Lease, of any right granted hereunder or under any applicable
law to lock out or change the locks securing the Premises shall
not impose upon Landlord any duty to notify Tenant of the name
and address or telephone number of the individual or company
from whom a new key may be obtained, nor shall Landlord have any
duty to provide Tenant with a new key or any other means of
access to the Premises. To the maximum extent permitted by law,
Landlord and Tenant agree that the parties hereto intend that
all rights and remedies of Landlord under this Lease shall
supersede any conflicting provision of the General Statutes of
North Carolina, and any amendments, modifications,
recodification or other changes thereto.
Notwithstanding any other remedy act forth in this Lease, if
Landlord has made rent concessions of any type or character, or
waived any Base Rent, and Tenant fails to take possession of the
Premises on the Commencement Date or otherwise defaults at any
time during the term of this Lease, the rent concessions,
including any waived Base Rent, shall be canceled and the amount
of the Base Rent or other rent concessions shall be due and
payable immediately as if no rent concessions or waiver of any
Base Rent had ever been granted. A rent concession or waiver of
Base Rent shall not relieve Tenant of any obligation to pay any
other charge due and payable under this Lease. Notwithstanding
anything contained in this Lease to the contrary, this Lease may
be terminated by landlord only by written notice of such
termination to Tenant given in accordance with section 13.7
below, and no other act or omission of Landlord shall be
construed as a termination of this Lease.
11.3 Remedies Cumulative. All rights and remedies of Landlord
herein or existing at law or in equity are cumulative and the
exercise of one or more rights or remedies shall not be taken to
exclude or waive the rights to the exercise of any other.
ARTICLE 12 - DEFINITIONS
12.1 Abandon. "Abandon" means the vacating of all or a
substantial portion of the Premises by Tenant, whether or not
Tenant is in default of the rental or other payments due under
this Lease.
12.2 Act of God or Force Majeure. An "Act of God" or "Force
Majeure" is defined for purposes of this Lease as strikes,
lockouts, sitdowns, material or labor restrictions by any
governmental authority, unusual transportation delays, riots,
floods, washouts, explosions, earthquakes, fire storms, weather
(including wet grounds or inclement weather which prevents
construction), acts of the public enemy, ware, insurrections,
and/or any other cause not reasonably within the control of
Landlord or which by the exercise of due diligence Landlord is
unable wholly or in part, to prevent or overcome.
ARTICLE 13. - MISCELLANEOUS
13.1 Waiver. Failure of Landlord to declare and event of
default immediately upon its occurrence, or delay in taking any
action in connection with an event of default, shall not
constitute a waiver of the default, but Landlord shall have the
right to declare the default at any time and take such action as
is lawful or authorized under this Lease. Pursuit o f any one or
more of the remedies set forth in Article 11 above shall not
preclude pursuit or any one or more of the other remedies
provided elsewhere in this Lease or provided by law, nor shall
pursuit of any remedy hereunder or at law constitute forfeiture
or waiver of any rent or damages accruing to Landlord by reason
of the violation of any of the terms, provisions or covenants of
this Lease. Failure of Landlord to enforce one or more of the
remedies provided hereunder or a t law upon any event of default
shall not be deemed or construed to constitute a waiver of the
default or of any other violation or breach of any of the terms,
provisions and covenants contained in this Lease. Waiver by
Landlord of any default by Tenant hereunder shall in no event be
deemed or construed to be a waiver of identical or similar
future defaults. Landlord may collect and receive rent due from
Tenant without waiving or affecting any rights or remedies that
Landlord may have at law or in equity or by virtue of this
Lease at the time of such payment. To the maximum extent
allowable pursuant to applicable law, institution of a summary
ejectment action to re-enter the Premises shall not be construed
to be an election by Landlord to terminate this Lease.
13.2 Act of God. Landlord shall not be required to perform any
covenant or obligation in this Lease, or be liable in damages to
Tenant, so long as the performance or nonperformance of the
covenant or obligation is delayed, caused or prevented by an act
of God, force majeure or by Tenant.
13.3 Attorney's Fees. If Tenant defaults in the performance of
any of the terms, covenants, agreements or conditions contained
in this Lease and Landlord places in the hands of any attorney
the enforcement of all or any part of this Lease, the collection
of any rent or other sums due or to become due or recovery of
the possession of the Premises, Tenant agrees to pay Landlord's
cost of collection, including reasonable attorneys' fees,
whether suite is actually filed or not.
13.4 Successors. This Lease shall be binding upon and inure to
the benefit of Landlord and Tenant and the respective heirs,
personal representations, successors and assigns.
13.5 Rent Tax. If applicable in the jurisdiction where the
Premises are situated, Tenant shall pay and be liable for all
rental, sales and use taxes or other similar taxes, if any, or
imposed by any city, state, county or other governmental body
having authority, such payments to be in addition to all other
payments required to be paid to Landlord by Tenant under the
terms of this Lease. Any such payment shall be paid
concurrently with the payment of the Base Rent, Additional Rent,
Common Area Costs, or other charge upon which the tax is based
as set forth above.
13.6 Interpretation. The captions appearing in this Lease are
convenience only and in no way define, limit, construe or
describe the scope or intent of any Section . Grammatical
changes required to make the provisions of this Lease apply (1)
in the plural sense where there is more than one tenant and (2)
to either corporations, associations, partnerships or
individuals, males or females, shall in all instances be assumed
as though each case fully expressed. The laws of the State of
North Carolina shall govern the validity, performance and
enforcement of this Lease. This Lease shall not be construed
more or less favorably with respect to either party as a
consequence of the Lease or various provisions hereof having
been drafted by one of th e parties hereto.
13.7 Notices. All rent and other payments required to be made
by Tenant shall be payable to Landlord, in care of Manager, at
Manager's address set forth on page 1 (or if no address be set
forth for Manager, to Landlord at Landlord's address set forth
on page 1. All payments required to be made by Landlord to
Tenant shall be payable to Tenant at Tenant's address set forth
on page 1. Any notice or document (other than rent) required or
permitted to be delivered by terms of this Lease shall be deemed
to be delivered (whether or not actually received) when
deposited in the United States Mail, postage prepaid, certified
mail, return receipt required, addressed to the parties at the
respective addresses as set forth on page 1 (or, in the case of
Tenant, at the Premises), or to such address as the parties may
have designated by written notice to each other, with copies of
notices to Landlord being sent to Landlord's address as shown on
page 1. Manager shall be co-addressee with Landlord on all
notices sent to Landlord by Tenant hereunder, and any notice
sent to Landlord and not to Manager, also, in accordance with
this section shall be deemed ineffective.
13.8 Submission of Lease. SUBMISSION OF THIS LEASE TO TENANT
FOR SIGNATURE DOES NOT CONSTITUTE A RESERVATION OF SPACE OR AN
OPTION TO LEASE. THE LEASE IS NOT EFFECTIVE UNTIL EXECUTION BY
AND DELIVERY TO BOTH LANDLORD AND TENANT.
13.9 Corporate Authority. If Tenant executes this Lease as a
corporation or partnership (general or limited), each person
executing this lease on behalf of Tenant personally represents
and warrants that: Tenant is a duly authorized and existing
corporation or partnership (general or limited), Tenant is
qualified to do business in the state in which the Premises are
located, the corporation or partnership (general or limited) has
full right and authority to enter into this Lease, each person
signing on behalf of the corporation or partnership (general or
limited) is authorized to do so, and the execution and delivery
of the Lease by Tenant will not result in any breach of , or
constitute a default under any mortgage, deed of trust, lease,
loan, credit agreement, partnership agreement, or other contract
or instrument to which Tenant is a party or by which Tenant may
be bound. If any representation or warranty contained in this
Section is false, each person who executes this Lease shall be
liable, individually, as Tenant hereunder.
13.10 Multiple Tenants. If this Lease is executed by more than
one person or entity as "Tenant," each such person or entity
shall be jointly and severally liable hereunder. It is
expressly understood that any one of the named Tenants shall be
empowered to execute any modification, amendment, exhibit, floor
plan, or other document herein referred to and bind all of the
named Tenants thereto; and Landlord shall be entitled to rely
on same to the extent as if all of the named Tenants had
executed same.
13.11 Tenant's Financial Statements. Tenant represents and
warrants to Landlord that, as of the date of execution of this
Lease by Tenant, the financial statements, if any, of Tenant
provided to Landlord prior or simultaneously with the execution
of this Lease represent the financial condition of the Tenant as
of the dates and for the periods indicated therein, such
financial statements are true and do not contain any untrue
statements of a material fact or omit to state any material fact
necessary to make the statements included therein not misleading
and there has been no material adverse change in the financial
condition or business prospects of Tenant since the respective
dates of such financial statements. If there is a material
adverse change in Tenant's financial condition, Tenant will give
immediate notice of such material adverse change to Landlord.
If Tenant fails to give such immediate notice to Landlord, such
failure shall be deemed to be an event of default under this
Lease.
13.12 Severability. If any provision of this Lease or the
application thereof to any person or circumstances shall be
invalid or unenforceable to any extent, the remainder of this
Lease and the application of such provisions to other persons or
circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by law. Each covenant
and agreement contained in this Lease shall be construed to be a
separate and independent covenant and agreement and the breach
of any such covenant or agreement by Landlord shall not
discharge or relieve Tenant from Tenant's obligation to perform
each and every covenant and agreement of this Lease.
13.13 Landlord's Liability. If Landlord shall be in default
under this Lease, and if a consequence of such default, Tenant
shall recover a money judgment against Landlord, such judgment
shall be satisfied only out of the right , title, and interest
of Landlord in the Property as the same may then be encumbered
and neither Landlord nor any other person or entity comprising
Landlord shall be liable for nay deficiency. In no event shall
Tenant have the right to levy execution against any property of
Landlord other than the Property, nor any person or entity
comprising Landlord other than its interest in the Properties
herein expressly provided.
13.14 Sale of Property. Upon any conveyance, sale, or exchange
of the Premises or assignment of this Lease, Landlord shall be
and is hereby entitled free and relieved of all liability under
any and all of its covenants and obligations contained in or
derived from this Lease arising out of any act, occurrence, or
omission relating to the Premises or this Lease occurring after
the consummation of such sale or exchange or assignment.
13.15 Time is of the Essence. The time of the performance of
all of the covenants, conditions and agreements of this Lease is
of the essence.
13.16 Subtenancies. At the Landlord's option, the voluntary or
other surrender of this Lease by Tenant, or a mutual
cancellation thereof; shall not work a merger of estates and
shall operate as an assignment of any or all permitted subleases
or subtenancies.
13.17 Common Areas. Landlord reserves the right to change, from
time to time, the dimensions and location, identity and type of
any buildings comprising the Building, and to construct
additional buildings or additional stories on existing buildings
or other improvements on the Property, provided that such
changes and additional construction do not materially or
adversely affect parking and signage for the Premises. Landlord
reserves the right to change, from time to time, the dimensions
and location of the Common Area and to allow the Common Area to
be put to such uses as Landlord shall, from time to time, deem
desirable. Tenant and its employees and customers shall have
the nonexclusive right to use the Common Area in common with
Landlord, other tenants of the Property and other Persons
designated by Landlord, subject to reasonable rules and
regulations governing use that Landlord from time to time
prescribes. Tenant shall not solicit business, distribute
handbills or display merchandise within the Common Area or take
any action which would interfere with the rights of other
persons to use the Common Area. Landlord may temporarily close
any part of the Common Area to make repairs or alterations.
Tenant acknowledges that Landlord may be required to grant to major
tenants of the Property the right to display and sell merchandise and
services on portions of the Common Area and the rights herein granted to
Tenant shall be inferior to any rights granted to major tenants.
The Common Area shall be under Landlord's sole operation and
control. Tenant shall be responsible for and shall indemnify
hold Landlord harmless from any liability, loss or damage
arising out of or caused by Tenant its employees. subtenants.
licensees, concessionaires, agents, suppliers, vendors or
service contractors, to any part of the Common Area, or to the
Property whether such damages be structural or nonstructural.
13.18 Employee Parking. Landlord may, from time to time,
designate specific areas in which vehicles owned by Tenant and
its employees shall be parked, and Tenant shall use best efforts
to see that such vehicles are parked in such areas. Upon request
Tenant shall furnish to Landlord a complete list of the license
numbers of all vehicles operated by Tenant's employees.
ARTICLE 14. - AMENDMENT AND LIMITATION OF WARRANTIES
14.1 Entire Agreement. IT 1S EXPRESSLY AGREED BY TENANT, AS A
MATERIAL CONSIDERATION FOR THE EXECUTION OF THIS LEASE, THAT
THIS LEASE, WITH THE SPECIFIC REFERENCES TO EXTRINSIC DOCUMENTS,
1S THE ENTIRE AGREEMENT OF THE PARTIES; THAT THERE ARE, AND WERE
NO VERBAL REPRESENTATIONS, WARRANTIES, UNDERSTANDINGS,
STIPULATIONS, AGREEMENTS OR PROMISES PERTAINING TO THE SUBJECT
MATTER OF THIS LEASE OR OF ANY EXPRESSLY MENTIONED EXTRINSIC
DOCUMENTS THAT ARE NOT INCORPORATED IN WRITING IN THIS LEASE OR
IN SUCH DOCUMENTS.
14.2 Amendment. THIS LEASE MAY NOT BE ALTERED, WAIVED, AMENDED
OR EXTENDED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY
LANDLORD AND TENANT.
14.3 Limitation of Warranties. LANDLORD AND TENANT EXPRESSLY
AGREE THAT THERE ARE AND SHALL BE NO IMPLIED WARRANTIES OF
MERCHANTABILITY, HABITABILITY, SUITABILITY, FITNESS FOR A
PARTICULAR PURPOSE OR OF ANY OTHER KIND ARISING OUT OF THIS
LEASE AND THERE ARE NO WARRANTIES WHICH EXTEND BEYOND THOSE
EXPRESSLY SET FORTH IN THIS LEASE. WITHOUT LIMITING THE
GENERALITY OF THE FOREGOING, TENANT EXPRESSLY ACKNOWLEDGES THAT
LANDLORD HAS MADE NO WARRANTIES OR REPRESENTATIONS CONCERNING
ANY HAZARDOUS SUBSTANCES OR OTHER ENVIRONMENTAL MATTERS
AFFECTING ANY PART OF THE PROPERTY. AND LANDLORD HEREBY
EXPRESSLY DISCLAIMS AND TENANT WAIVES ANY EXPRESS OR IMPLIED
WARRANTIES WITH RESPECT TO ANY SUCH MATTERS.
14.4 Waiver and Release. TENANTS SHALL NOT HAVE THE RIGHT TO
WITHHOLD OR TO OFFSET RENT OR TO TERMINATE THIS LEASE EXCEPT AS
EXPRESSLY PROVIDED HEREIN. TENANT WAIVES AND RELEASES ANY AND
ALL STATUTORY LIENS AND OFFSET RIGHTS.
14.5 Non-Disclosure of Lease Terms. NOTWITHSTANDING ANYTHING
CONTAINED WITHIN THIS LEASE TO THE CONTRARY. IF TENANT
DISCLOSES ANY OF THE MATERIAL, TERMS AND/OR PROVISIONS OF THIS
LEASE, INCLUDING BUT NOT LIMITED TO THE BASE RENT, TENANTS COMMON
AREA COSTS OR ANY CAPS ON SUCH COSTS, THE TENANT FINISH OUT
ALLOWANCE. TENANTS PROPORTIONATE SHARE OF GENERAL TAXES OR ANY
CAP ON SUCH EXPENSES, TENANTS PROPORTIONATE SHARE OF INSURANCE
PREMIUMS OR ANY CAP ON SUCH EXPENSE, OR THE LEASE TERM TO ANY
PERSON OR ENTITY NOT A PARTY TO THIS LEASE, EXCEPT TENANTS
ATTORNEY, THEN TENANT SHALL BE LIABLE FOR ALL DAMAGE OR INJURY
TO LANDLORD RESULTING FROM TENANTS FAILURE TO KEEP ALL SUCH
INFORMATION CONFIDENTIAL AND TENANT SHALL INDEMNIFY AND HOLD
LANDLORD HARMLESS FROM ANY DAMAGE, LOSS OR INJURY OCCASIONED
THEREBY. IN THE ALTERNATIVE, AND AT LANDLORDS SOLE OPTION. IF
7 -
DAMAGES ARE DIFFICULT TO CALCULATE, TENANT SHALL PAY LIQUIDATED
DAMAGES EQUAL TO ONE (l) MONTH'S BASE RENT AS DEFINED IN ARTICLE
1 HEREOF. See Addendum.
EXECUTED by Tenant on and by Landlord on June 12, 1996 to be
effective as of the first day written herein.
LANDLORD:
Parker-Raleigh Development I, Limited Partnership
By: (Signed)
ATTEST: (Signed)
Assistant Secretary
TENANT: (if a corporation)
General Parcel Service, Inc.
(Signed)
By: E. Hoke Smith, Jr.
Title: President
ATTEST:
(Signed)
Secretary
- -8-
ADDENDUM
This Addendum is attached to the Lease by and between
PARKER-RALEIGH DEVELOPMENT 1, LIMITED PARTNERSHIP ("Landlord")
and GENERAL PARCEL SERVICE, INC. ("Tenant") ("the Lease"). In
the event of a conflict between the terms and conditions of this
Addendum and the general provisions of the Lease, this Addendum
shall govern and control.
The following shall constitute additional provisions or
conditions to the Lease:
1 . Landlord and Tenant agree that Tenant may occupy temporary
space of approximately 9,600 square feet located at 3216
Wellington Court, Suite H and I, Lincoln Park North, Raleigh,
North Carolina, 27615, beginning June 1, 1996, until Tenant's
space at Lincoln Park East, 1200 Corporation Parkway, (Suite to
be determined) Raleigh, North Carolina is complete and Tenant
has received a Certificate of Occupancy.
Tenant will pay to Landlord the sum of $3,544.00 monthly, which
includes base rent, taxes, insurance, and common area
maintenance, during their term at the temporary space known as
3216 Wellington Court, Suite H and I, Raleigh, North Carolina,
27615.
2. Landlord, at its sole expense, shall enclose the open window
inside the space located at 3216 Wellington Court, Suite H and
I, Raleigh, North Carolina.
3. Landlord, at its sole expense, shall make all improvements as
per attached Exhibit F at building located at 1200 Corporation
Parkway, Raleigh, North Carolina.
Except as modified herein, all provisions of the Lease shall be
in full force and effect.
LANDLORD.
PARKER RALEIGH DEVELOPMENT I, LIMITED PARTNERSHIP
By: Parker-Raleigh Development 1, Inc., sole
General Partner
BY: (Signed)
ATTEST:
(Signed)
Secretary
[CORPORATE SEAL]
TENANT:
GENERAL PARCEL SERVICE, INC.
BY: (Signed)
President
ATTEST:
(Signed)
Secretary
[CORPORATE SEAL]
EXHIBIT A
Legal Description
Lincoln Park East - Building #3
1200 Corporation Parkway
Being all of Lot 3, Phase One, Part "B" of Lincoln Park East,
containing 3.338 Acres, according to a map thereof recorded in
Book of Maps 1987, Page 456, Wake County Registry, North
Carolina.
Exhibit E
RULES & REGULATIONS
The following rules and regulations will remain in full force
and effect until Tenant is notified in writing by Landlord of
any changes.
1. Access to the Building. Access to the Demised Premises shall
be gained by use of a key to the outside doors of the Demised
Premises. Landlord may, from time to time, establish security
controls for the purpose of regulating access to the building.
Tenant shall abide by all such security regulations to be
established.
2. Protecting Demised Premises. Before leaving the Demised
Premises unattended, Tenant shall close and securely lock all
doors or other means of entry to the Demised Premises and shut
off all utilities in the Demised Premises.
Tenant must maintain an adequate number of suitable fire
extinguishers on the premises at all times for use in case of
fire, including electrical or chemical fares.
3. Large Articles. Furniture, freight and other large or heavy
articles may be brought into the building only at times and in
the manner designated by Landlord and always at Tenant's sole
responsibility. All damage to the building, its furnishings,
fixtures or equipment by moving or maintaining such furniture,
freight or articles shall be repaired at the expense of Tenant.
4. Signs. Tenant shall not paint, display, inscribe, maintain
or affix any sign, placard, picture, advertisement, name,
notice, lettering or direction on any part of the outside or
inside of the building, or on any part of the inside of the
Demised Premises which can be seen from the outside of the
Demised Premises, without the written consent of the Landlord,
and then only such name or names or matter and in such color,
size, style, character and material as shall be first approved
Landlord in writing. Landlord reserves - the right to remove,
at the Tenant's expense, all matter other than that above
provided for without notice to Tenant.
5. Compliance with Laws. Tenant shall comply with all
applicable laws, ordinances, governmental orders or regulations
and applicable orders or directions from any public office or
body having jurisdiction, whether now existing or hereinafter
enacted with respect to the Demised Premises and the use or
occupancy thereof. Tenant shall not make or permit any use of
the Demised Premises which directly or indirectly is forbidden
by law, ordinance, governmental regulations or order or
direction of applicable public authority, or which may be
dangerous to person or property.
6. Waste Disposal. Tenant must keep, and prepare for
collection, all garbage and refuse in a container approved by
Landlord. Landlord must also approve the location of the
container. Tenant will be responsible for the cost of container
and the cost of trash removal. Tenant must not burn trash or
garbage of any kind on or about the leased premises or the
building or park where located.
7. Antenna or Satellite Dish. Tenant may not erect any
aerial, antenna or satellite dish on the roof or exterior walls
of the premises or on the grounds without prior written approval
of the Landlord. Any costs associated with any such
installation will be the sole responsibility of the Tenant.
Landlord will not unreasonably withhold permission to erect a
communications antenna. Tenant shall have the privilege at any
time after the installation of the aerial, antenna or satellite
dish to remove same and shall repair any damage caused thereby.
Tenant shall, at its own expense, remove aerial, antenna or
satellite dish at lease termination.
8. Obstruction of Public Areas. Tenant may not place or permit
any obstructions, materials or equipment in the outside areas
adjoining the premises without the written consent of the
Landlord. All equipment, merchandise, freight or other
materials must be moved inside the premises at the end of each
business day.
Tenant shall not, whether temporarily, accidentally or
otherwise. allow anything-to remain in, place or store anything
in, or obstruct in any way, any sidewalk, court passageway,
entrance, or shipping area. Tenant shall lend its full
cooperation to keep such areas free from all obstruction and in
a clean and sightly condition, and move all supplies, furniture
and equipment as soon as received directly to the Demised
Premises, and shall move all such items and waste (other than
waste customarily removed by the building employees) that are
any time being taken from the Demised Premises directly to the
areas designated for disposal. All courts, passageways,
entrances, exits, elevators, escalators, stairways, corridors,
halls and roofs are not for the use of the general public and
Landlord shall in all cases retain the right to control and
prevent access thereto by all persons whose presence in the
judgment of landlord shall be prejudicial to the safety,
character, reputation and interest of the building and its
tenants provided, however, that nothing herein contained shall
be construed to prevent such access to persons with whom Tenant
deals within the normal course of Tenant's business unless such
persons are engage in illegal activities.
9. Defacing Demised Premises and Overloading. Tenant shall not
place anything or allow anything to be placed in the Demised
Premises near the glass of any door, partition, wall or window
which may be unsightly from outside the Demised Premises.
Tenant shall not place or permit to be placed any article of any
kind on any window ledge or on the exterior walls; blinds,
shades, awnings or other forms of inside or outside window
ventilators or similar devices shall not be placed in or about
the outside windows in the Demised Premises.
Tenant shall not do any painting or decorating in the Demised
Premises or install any floor coverings in the Demised Premises
or make, paint, cut or drill into, or in any way deface any part
of the Demised Premises or building without in each instance
obtaining the prior written consent of Landlord. Tenant shall
not overload any floor or part thereof in the Demised Premises,
or any facility in the building or any public corridors or
elevators therein by bringing in or removing any large or heavy
articles and Landlord may direct and control the location of
safes, files, and all other heavy articles and, if considered
necessary by Landlord, require supplementary supports at
Tenant's expense of such material and dimensions necessary to
properly distribute the weight.
10. Additional Locks. Tenant shall not attach or permit to be
attached additional locks or similar devices to any door or
window, change existing locks or the mechanism thereof, or make
or permit to be made any keys for any door other than those
provided by Landlord. Upon termination of this lease or
termination of Tenant's possession, Tenant shall surrender all
keys to the Demised Premises.
II. Communications or Utility Connections. If Tenant desires
signal, alarm or other utility or similar service connections
installed or changed, Tenant shall not install or change the
same without the approval of Landlord, and then only under the
direction of Landlord and at Tenant's expense. Tenant shall not
install in the Demised Premises any equipment which requires a
substantial amount of electrical current without the advance
written consent of Landlord. Tenant shall ascertain from
Landlord the maximum amount of load or demand for or use of
electrical current which can safely be permitted in the Demised
Premises, taking into account the capacity of the electric
wiring in the building, and shall not in any event connect a
greater load that which is safe.
Tenant shall not operate any electrical device from which may
emanate electrical waves which may interfere with or impair
radio or television broadcasting or reception from or in the
building or elsewhere and/or cause disturbing noises or
vibrations. Tenant shall not use any illumination or power for
the operation of any equipment or device other than electricity.
12. Parking. Parking is in designated parking areas only..
There should not be any parking in the "no parking" zones or at
curbs. Handicapped spaces are for handicapped persons and the
Police Department will ticket unauthorized (unidentified) cars
in handicapped spaces. Visitor parking spaces should not be
used by Tenant's employees. Storage of vehicles on the parking
lot is prohibited except with the written consent of the Landlord
13. Pest Control. Tenant must keep the Demised Premises free
from pests, insects and rodents by using a professional pest
exterminating contractor when needed, at Tenant's expense.
14. Restrooms. The Restrooms, toilets, urinals, vanities and
the other apparatus shall not be used for any purpose other than
that for which they were constructed and no foreign substance of
any kind whatsoever shall be thrown therein and the expense of
any breakage, stoppage, or damage resulting from the violation
of this rule shall be home by Tenant who, or whose employees or
invitees, shall have caused it.
15. Solicitation. Tenant shall not make any room-to-room
canvass to solicit business from other tenants in the building
and shall not exhibit, sell or offer to sell, use, rent or
exchange any products or services in or from the Demised
Premises unless ordinarily embraced within the Tenant's use of
the Demised Premises specified herein and specific authority
granted in the lease agreement. Tenant, his employees, and
agents, may not solicit business in the parking lot or other
common areas and may not distribute handbills or other
advertising matter in automobiles parked in the parking area or
other common area.
16. Energy Conservation. Tenant shall not waste electricity,
water, heat or air conditioning and agrees to cooperate fully
with Landlord to assure the most effective operation of the
building's heating and air conditioning, and shall not allow the
adjustment (except by Landlord's authorized building personnel)
of any controls.
17. Intoxication. Landlord reserves the right to exclude or
expel from the building any person who, in the judgment of
Landlord, is intoxicated or under the influence of liquor
or drugs, or who shall in any manner do any act in violation of
any of the rules and regulations of the building.
18. Nuisances and Certain Other Prohibited Uses. Tenant shall
not:
(a) engage in any mechanical business, utilize any article or
thing, or engage in any service in or about the Demised Premises
or building, except those ordinarily embraced within the
permitted use of the Demised Premises;
(b) use the Demised Premises for housing, lodging, or sleeping
purposes;
(c) create excessive noise, place a musical or sound producing
instrument or device inside or outside the Demised Premises
which may be heard outside the Demised Premises;
(d) bring or permit to be in the building complex any bicycle or
other vehicle, or dog (except in the company of a blind person)
or other animal or bird;
(e) cause or permit any noxious or offensive odors, fumes,
gases, smoke, dust, steam or vapors;
(f) do anything in or about the Demised Premises tending to
create or maintain a nuisance or do any act tending to injure
the reputation of the building.
19. Amendment of Rules and Regulations. Landlord reserves the
right to amend or waive any of the foregoing rules or
regulations at any time when, in its judgment, it is in the
property's best interests and the Tenants' best interests. No
such amendment or waiver of any rules and regulation in favor of
one Tenant operates as an alteration or waiver in favor of any
other Tenant. Landlord is not responsible to any Tenant for the
nonobservance or violation by any other Tenant of any these
rules and regulations at any time.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial information
extracted from the consolidated Statements of Operations and Balance
Sheet and is qualified in its entirety by reference to such
financial statements.
<MULTIPLIER> 1
<CURRENCY> US Dollars
<PERIOD-START> JAN-1-1996
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<EXCHANGE-RATE> 1
<CASH> 8,589
<SECURITIES> 0
<RECEIVABLES> 2,085,394
<ALLOWANCES> 7,546
<INVENTORY> 0
<CURRENT-ASSETS> 2,493,043
<PP&E> 14,190,922
<DEPRECIATION> 7,199,827
<TOTAL-ASSETS> 10,651,833
<CURRENT-LIABILITIES> 5,525,076
<BONDS> 0
<COMMON> 37,586
0
2,800
<OTHER-SE> 2,733,872
<TOTAL-LIABILITY-AND-EQUITY> 10,651,833
<SALES> 0
<TOTAL-REVENUES> 11,383,993
<CGS> 0
<TOTAL-COSTS> 12,358,632
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 341,935
<INCOME-PRETAX> (1,316,574)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,316,574)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,316,574)
<EPS-PRIMARY> (0.39)
<EPS-DILUTED> (0.39)
</TABLE>
