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.
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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
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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
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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