LEASE AGREEMENT
Exhibit
10.3
This
Lease Agreement (hereinafter referred to as this “Agreement”) made as of the 1st
day of June, 2006, by and between GREENEVILLE-XXXXXX COUNTY AIRPORT AUTHORITY,
established by the Town of Greeneville, Tennessee and Xxxxxx County, Tennessee
for the purpose of operating the Greeneville-Xxxxxx County Airport and thereunto
duly authorized (hereinafter referred to as “Lessor”), and FORWARD AIR
CORPORATION (hereinafter referred to as “Lessee”).
WHEREAS,
the Lessor and Lessee have reached an agreement pertaining to the terms of
the
Lessee leasing the hereinafter described corporate offices with attached hangars
and related parking areas at the Greeneville-Xxxxxx County Airport (hereinafter
referred to as “the Airport”), and the parties desire to place the same in
writing;
NOW,
THEREFORE, in consideration of the covenants contained herein, the parties
agree
as follows:
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1.
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Premises.
Lessor does hereby lease unto the Lessee, and the Lessee agrees to
lease
the corporate office building and the two attached hangars located
at the
Airport along with convenient paved parking areas for at least one
hundred
(100) automobiles, convenient access for deliveries to the main lobby
of
the building by vehicles up to a tractor and trailer in size, and
vehicular access to the “bus port” (said properties and improvements are
hereinafter collectively referred to as the “Premises”). Lessor reserves
the right to designate/construct and substitute new parking areas
and
loading areas provided that the new parking areas and loading areas:
are
submitted to Lessee in writing prior to such designation and/or
construction; are substantially similar in location to the present
parking
and loading areas (as described in this Agreement below); are paved
and
marked for at least 100 parking spaces; allow convenient access for
deliveries to the main lobby of the building by vehicles up to a
tractor
and trailer in size; have sufficient lighting to allow safe ingress
and
egress of employees, invitees and licensees to/from the parking area
from/to the corporate office building; allow employees, invitees
and
licensees safe and appropriate egress and ingress to/from the parking
lot
from/to the office building (i.e. construction of stairs and walkways
to
facilitate parking lot and office building access, where necessary);
allow
vehicular access to the bus port; shall not interfere with Lessee’s
business; and which substitution shall be subject to Lessee's approval
(which approval shall not be unreasonably withheld). The present
parking
areas and loading area are the paved lot at the front of the building,
the
graded lot behind the hangars and the marked-off paved area between
the
taxiway and the building and the
hangars.
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1
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2.
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Term.
The term of this Agreement shall be for a period of ten (10) years
beginning July 28th
2006 with the Lessee having an exclusive option to renew this Agreement
for two (2) successive periods - the first for ten (10) additional
years
and the second for five (5) years - each under the same terms and
conditions as the original Agreement, with the exception that the
monthly
rent shall be adjusted to reflect the increase or decrease, if any,
of the
Urban Consumer Price Index, as published by the United States Department
of Commerce or other federal agency, for the sixth month prior to
the
expiration of the original term hereof or the extended term which
the
Lessee has chosen to extend, over the same index as published for
the
month of July 2006. Accordingly, the monthly rent for each such extended
term shall be determined by multiplying the rent for the initial
month of
the initial term of this Agreement by a fraction, the numerator of
which
shall consist of the Urban Consumer Price Index for the sixth month
prior
to the expiration of the initial or extended term of this Agreement
(where
Lessee has opted to extend this Agreement) and the denominator of
which
shall be the Urban Consumer Price Index for the month of July 2006.
The
Lessee may extend this Agreement by giving Lessor at least six (6)
months
prior written notice prior to the expiration of the initial or extended
term of this Agreement which the Lessee desires to extend. Until
such new
rental is determined by Lessor, Lessee shall continue paying the
current
monthly rent. Within fifteen (15) days of notice by the Lessor of
the new
monthly rent, Lessee shall pay Lessor the difference
owed.
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3.
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Rent.
Lessee shall pay to Lessor a monthly rent of Nine Thousand and Twenty
Dollars and Twenty Cents ($9,020.20) payable in advance on the first
day
of each month. Said rent shall be delivered on a timely basis to
the
Lessor in care of the Recorder for the Town of Greeneville, Town
Hall,
College Street, Greeneville,
Tennessee.
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4.
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Use.
The Premises may only be used for corporate offices and such other
aeronautical purposes approved by Lessor. Lessee is hereby approved
to use
one of the hangars primarily for the storage of “corporate” aircraft and
the maintenance of such aircraft; however, Lessee may continue the
use of
the other hangar for corporate office use. Lessee agrees to use the
Premises in compliance with all applicable statutes, ordinances and
regulations. Lessor acknowledges and agrees that Lessee’s current use of
the Premises is consistent and in compliance with the terms of this
Agreement and in compliance with all applicable statutes, ordinances
and
regulations.
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5.
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Maintenance,
Repairs and Alteration.
Lessee shall, at its sole cost and expense, maintain the Premises
in good
condition and repair, ordinary wear and tear excepted, and shall
conduct
preventive maintenance as is common to one engaged in like business.
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The
foregoing notwithstanding, Lessor shall (i) perform all maintenance and/or
repairs which require an expenditure in excess of Two Thousand Five Hundred
Dollars ($2,500.00), (ii) maintain the roof and exterior walls of the Premises,
(iii) maintain the taxi-ways, ramps and parking areas and (iv) make all
structural repairs, except as the same may be necessitated as a result of a
negligent or wrongful act or omission of Lessee.
Lessee
shall make no alterations or additions to the Premises without the prior written
permission of the Lessor, which permission shall not be unreasonably withheld.
However, Lessee shall have the right at its own expense during the term of
this
Agreement to attach trade fixtures, equipment and advertising signs, and make
any alterations or additions to the Premises it may reasonably require in
connection with the conduct of its business; provided, however, that such
alterations or additions shall be made in such a manner as not to adversely
affect the structural integrity of the Premises.
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6.
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Utilities.
Lessee shall be responsible for payment of all utilities consumed
by
Lessee on the Premises.
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7.
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Insurance
and Indemnification.
Lessor shall insure the Premises other than Lessee’s improvements against
all perils ordinarily insured against under a standard broad form
casualty
insurance policy with full replacement
values.
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Lessee
shall obtain a comprehensive general liability insurance policy with a minimum
single limit of $5,000,000 insuring its use of the Premises. Lessor shall be
named as an additional insured on such policy and shall be entitled to thirty
(30) days cancellation notice.
Should
Lessee desire to use the Premises as a maintenance facility for aircraft
belonging to others, Lessee shall obtain or require in any applicable sublease
that the subtenant obtain a hangar keeper liability policy with minimum single
limit of $2,500,000. Lessor shall be named as an additional insured on such
policy and shall be entitled to thirty (30) days cancellation
notice.
Should
Lessee engage in any commercial air activity, Lessee shall obtain appropriate
liability insurance with limits consistent with the activity. Lessor shall
be
named as an additional insured on such policy and shall be entitled to thirty
(30) days cancellation notice.
Lessee
shall provide Lessor annually with a certificate of insurance evidencing the
insurance herein required.
In
addition to the insurance set forth above, Lessee agrees to indemnify and hold
harmless Lessor from any and all claims, including costs of defense and
reasonable attorney’s fees, arising out of or attributable to any wrongful act
or omission of the Lessee.
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Lessee
may insure its improvements provided Lessor is a named as a certificate holder
and entitled to thirty (30) days cancellation notice.
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8.
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Public
Facility.
Lessee recognizes that the Premises are part of a public facility
and this
Agreement grants Lessee no special privileges or priority beyond
the terms
of this Agreement.
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9.
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Ingress
and Egress.
Lessee shall have the right to quiet and peaceable possession of
the
Premises during the term of this Agreement and any extension thereof.
Consistent therewith, Lessee shall have the right of ingress and
egress to
the Premises, which rights shall extend to Lessee’s employees, passengers,
guests, invitees and partners. In the event Lessor imposes any limitation
or restriction which effectively prevents or substantially impairs
Lessee’s use of the Premises as corporate offices, then Lessee may
terminate its tenancy under this Agreement on ten (10) days written
notice. Upon such termination, Lessee’s liability will be limited to such
obligations which would have existed if the end of the lease term
had
coincided with the effective date of such termination. Lessee shall
have
the right to install, operate, maintain, repair and store all equipment
necessary for the conduct of Lessee’s business. Furthermore, Lessee shall
have the right in common with others authorized so to do to use common
areas of the airport, including runways, taxiways, aprons roadways,
floodlights, landing lights, signals and other conveniences for the
take-off, flying and landing of aircraft of
Lessee.
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10.
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Right
of Entry.
Lessor reserves the right to enter the Premises upon twenty-four
(24)
hours notice to inspect or maintain the same. In the event of an
emergency, the notice herein shall be shortened or eliminated as
the
circumstances may require.
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11.
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Notices.
All notices to be given a party hereto shall be in writing. The parties
agree that written notice to the other shall be effective upon either
(i)
mailing the same to the other by postage prepaid, certified or registered
return receipt U.S. Mail, addressed to such party at the address
specified
below, or (ii) hand delivery of the same to the Airport Manager on
behalf
of Lessor or upon Lessee’s agents. In addition, Lessee agrees that written
notice to Lessee shall be effective upon posting by the Lessor of
such
written notice for five (5) consecutive days on the door of the Premises.
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12.
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Damage
and Destruction.
In the event any of the buildings or improvements on the Premises
shall be
damaged or destroyed by any insured peril, Lessor shall have the
obligation to immediately, and at its cost and expense, to repair,
replace
and restore said buildings and improvements damaged or destroyed
to the
same condition that they were in prior to the occurrence of the peril
into
full tenantability; provided, however, Lessor shall within ten (10)
days
of such event notify Lessee of its intention to repair, replace and
restore the same.
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Lessor
waives its rights of indemnity and subrogation against Lessee, its assigns,
tenants, agents or employees for any loss resulting from such insured peril,
provided that if such waiver results in any identifiable increase in the
Lessor’s insurance premium, the Lessee shall promptly reimburse the Lessor for
the amount thereof.
Lessee
shall be excused from the payment of rentals during the period building or
buildings are untenantable and being restored or rebuilt, and in the event
of
partial destruction and partial untenantability, suspension of rental shall
be
prorated in the relation that tenantable space bears to untenantable
space.
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In
the
event the Premises should become untenantable and/or the Lessee and its assigns
be unable to operate its business upon the Premises, as a result of fire,
tornado, or any other act of God, or war, insurrection, unavailability of fuel,
exercised by the government of emergency powers or any other cause, not the
fault of the Lessee, Lessee shall be relieved of the payment of rental during
the time as said Premises remain untenantable or that it is unable to operate
its business for any of such causes and upon the continuation of such
untenantability or inability to operate its business by reason of such causes
for ninety (90) consecutive days, Lessee may, at its option immediately declare
in writing this Agreement terminated and thereupon Lessee's obligation to
continue to lease under this Agreement shall cease.
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13.
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Rights
Reserved to Lessor.
Lessor reserves the right:
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(i)
to
further develop or improve the Airport as it sees fit;
(ii)
to
take any action it considers necessary to protect the aerial approaches of
the
Airport against obstructions, together with the right to prevent Lessee from
erecting, or permitting to be erected, any building or other structure on the
Airport which, in the opinion of the Lessor would limit the usefulness of the
Airport or constitute a hazard to aircraft;
and
(iii)
for
itself and the use and benefit of the public, a right of flight for passage
of
aircraft in the airspace above the surface of the real property hereinafter
described, together with the right to cause in said airspace such noise as
may
be inherent in the operation of aircraft, now known or hereinafter used, for
navigation of or flight in said airspace, and for use of said airspace for
landing on, taking off from, or operating on the Airport.
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14.
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Miscellaneous
Obligations of Lessee.
Lessee shall be obligated:
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(i)
to
observe and obey during the term of this Agreement, all laws, ordinances, rules
and regulations promulgated and enforced by Lessor, provided the same do not
impair Lessee’s rights under this Agreement, and by any other proper authority
having jurisdiction over the conduct of operations at the Airport.
(ii)
to
conduct its business in a good, safe and businesslike manner and in compliance
with all general or statutory laws, and such safety rules and programs as shall
be prescribed and recommended by governmental agencies of the State and Federal
governments having jurisdiction in the Premises;
(iii)
to
keep the Premises clean, properly dispose of all debris and other waste matter
which may accumulate on the Premises;
(iv)
to
deliver up and surrender possession of the Premises at the expiration or
termination of this Agreement in a good condition as when received, ordinary
wear, tear, depreciation, damage resulting from acts of God, or other
unavoidable casualties excepted.
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15.
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Assignment.
This Agreement may assign this Agreement or sublet the entire demised
Premises to any person, firm or corporation. Prior written consent
of the
Lessor is only required if the entire lease is assigned, or the entire
Premises is sublet, which consent will not be unreasonably withheld.
Lessee shall have the unrestricted right to assign this Lease or
sublet in
whole or in part the Premises to any corporate affiliate, provided
Lessee
shall remain liable to Lessor for the faithful fulfillment of the
obligations of lessee under this
Lease.
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16.
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Complete
Agreement.
This Agreement constitutes the complete agreement between the parties
hereto with respect to Lessee’s use and occupancy of the
Premises.
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1981
Lease.
The existing Lease dated July 27, 1981 originally between the Lessor
and
General Aviation of Tennessee, Inc. as modified over the years has
been
previously assumed by Lessee which assumption is hereby recognized
by
Lessor. The parties agree that said 1981 Lease shall expire by its
own
terms on July 27, 2006 and shall not be subject to renewal - it being
the
parties’ intent that this present Lease shall replace any desired renewal
of said 1981 Lease.
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IN
WITNESS WHEREOF, the parties have caused the execution of this Agreement as
of
the day first above written.
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GREENEVILLE-XXXXXX
COUNTY
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AIRPORT
AUTHORITY
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By
/s/ Xxxxxx X. Xxxxxx
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“Lessor”
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FORWARD
AIR CORPORATION
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By
/s/ Xxxxxx X. Xxxx
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“Lessee”
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10
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STATE
OF TENNESSEE
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)
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COUNTY
OF XXXXXX
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)
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Personally
appeared before me, the undersigned authority, a Notary Public in and for said
state and county, the within named Xxxxxx X. Xxxxxx, with whom I am personally
acquainted (or proved to me on the basis of satisfactory evidence) and who
acknowledged that he is the Chairman of the Greeneville-Xxxxxx County Airport
Authority, the within named Lessor, and that he as such Chairman, being
authorized to do so, executed the foregoing instrument for the purposes therein
contained.
WITNESS
my hand and official seal of office in Greeneville, Tennessee, on this the
10th
day of January, 2007.
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/s/
Xxxxx Xxxxxxxx
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Notary
Public
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[Seal:
Notary Public at Large, Xxxxxx Co.
Tenn.]
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My
Commission Expires: 4-17-2007
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STATE
OF TENNESSEE
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)
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COUNTY
OF XXXXXX
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)
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Personally
appeared before me, the undersigned authority, a Notary Public in and for said
state and county, the within named Xxxxxx X. Xxxx, with whom I am personally
acquainted (or proved to me on the basis of satisfactory evidence) and who
acknowledged that he is the Senior VP and CFO of Forward Air Corporation, the
within named Lessee, and that he as such Senior VP and CFO, being authorized
to
do so, executed the foregoing instrument for the purposes therein
contained.
WITNESS
my hand and official seal of office in Greeneville, Tennessee, on this the
8th
day of January, 2007.
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/s/
Xxxxx X. Xxxx
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Notary
Public
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[Seal:
State of Tennessee Notary Public, Xxxxxxx
County]
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My
Commission Expires: 03-27-2010
11
