1
Exhibit 10.5
STATE OF GEORGIA ]
]
COUNTY OF BULLOCH ]
COMMERCIAL LEASE CONTRACT
THIS LEASE, made effective this 1st day of March, 1992, by and between
HOWARD & HOWARD REAL ESTATE PARTNERSHIP, a Georgia general partnership, first
party (hereinafter called "Landlord"), and IKS SERVICE, INC., second party
(hereinafter called "Tenant");
W I T N E S S E T H:
1. DEFINITIONS.
The following terms as defined below, are used generally in this Lease.
Additional terms, as employed in the specific Sections hereunder, are defined
pursuant to those Sections.
Additional Rental is defined in Section 6 of this Lease.
Base Rental means the monthly rental calculated and payable pursuant to
Section 4 of this Lease.
Building means that certain building which is located on Gentilly Run
and within the Property.
Buildings means Building and any other buildings located on the
Property.
Demised Premises is defined in Section 2 of this Lease.
Landlord is defined in the first paragraph of this Lease.
Property means that tract or parcel of land and any improvements
thereon as described in the attached Exhibit "A" which is by this reference
incorporated in this Lease.
Tenant is defined in the first paragraph, of this Lease.
Total Rental means Base Rental and Additional Rental as may be due and
owing annually to Landlord under this Lease.
2. DEMISED PREMISES.
(A) The Landlord, for and in consideration of the rentals, covenants,
agreements and stipulations hereinafter mentioned, reserved and contained, to be
paid, kept and performed by the Tenant, has leased and rented, and by these
presents does lease and rent, unto the Tenant, and the Tenant hereby agrees to
lease and take upon the terms and
2
conditions which hereinafter appear, the property described on Exhibit "A"
attached hereto (hereinafter called the "Demised Premises").
(B) Landlord, at Landlord's sole expense, shall maintain the road
giving ingress and egress to the Demised Premises in an accessible and usable
condition suitable for travel and shall maintain the exterior grounds
surrounding the Demised Premises, which shall not include landscaping of the
property.
3. ADDITIONAL PROPERTY.
In the event Lessee desires to expand the Leased Premises, and Lessor
desires to lease additional property to Lessee, then Lessor and Lessee agree to
execute an amendment to this Lease Agreement to provide for the additional
leased property and the additional rental for such property as may be mutually
agreed upon by Landlord and Tenant.
4. LEASE TERM.
To have and to hold the same for the term to commence on the 1st day of
March, 1992, and ending on the 28th day of February, 1997, at midnight, unless
sooner terminated as hereinafter provided (hereinafter called "Lease Term").
5. BASE RENTAL.
The Tenant agrees to pay to the Landlord promptly on the first day of
each month in advance, during the Lease Term, a monthly base rental of Five
Hundred ($500.00) Dollars. The aforesaid payments of rent are to be made payable
to Landlord, at such place as Landlord may from time to time designate in
writing to Tenant.
6. RENTAL ADJUSTMENT.
The Base Rental payable by Tenant during each successive year of the
Lease Term, commencing on the first day of the thirteenth (13th) month of the
Lease Term, shall be adjusted at that time and every twelve (12) months
thereafter (the "adjustment month") for the remainder of the Lease Term and all
extensions and renewals thereof by increasing the monthly rental on the first
day of each adjustment month by four (4%) percent. Thus, the monthly rental
during the term hereof shall be as follows:
Year 1 $500.00 per month Year 4 $560.00 per month
Year 2 $520.00 per month Year 5 $580.00 per month
Year 3 $540.00 per month
7. ADDITIONAL RENTAL.
In addition to the Base Rental required to be paid pursuant to the
terms of this Lease, Tenant agrees to pay, as additional rent, all sums and
other charges required to be paid by Tenant pursuant to other provisions and
exhibits to this Lease, whether or not the same be designated "Additional Rent"
(hereinafter called "Additional Rental"),
3
and Landlord shall have the same remedies for Tenant's failure to pay same when
and as required, as if it constituted Base Rental.
8. CONSTRUCTION OF THIS AGREEMENT.
No failure of Landlord to exercise any power given Landlord hereunder,
or to insist upon strict compliance by Tenant with its obligation hereunder, and
no custom or practice of the parties at variance with the terms hereof shall
constitute a waiver of Landlord's right to demand exact compliance with the
terms hereof.
9. UTILITIES; ELECTRICITY AND OTHERS.
9.1 Tenant shall be solely responsible for all charges for gas,
electricity, telephone and other utility services used, rendered, supplied or
imposed upon the Demised Premises regardless of who is the supplier and shall
indemnify Landlord and save it harmless against any liability or charges on
account thereof. If Tenant does not pay said utility charges when due, Landlord
may pay same, and such payment shall be added as Additional Rental hereunder.
9.2 Tenant agrees that it will not install any equipment which will
exceed or overload the capacity of any utility facilities, whether or not
provided by Tenant or Landlord, and that, if any equipment installed by Tenant
shall require additional utility facilities, the same shall be furnished and
installed at Tenant's expense in accordance with plans and specifications to be
approved in writing by Landlord.
10. USE AND CARE OF PREMISES.
The Demised premises shall be used for the purpose of operating a saw
shop and any related purposes. The Demised Premises shall not be used for any
illegal purposes; nor in any manner to create any nuisance or trespass; nor in
any manner to vitiate the insurance or increase the rate of insurance on the
Demised Premises, any Buildings or the Property, any hazardous, toxic or
flammable materials, contaminants, oil, radioactive or other material the
removal of which is required or the maintenance of which is prohibited,
regulated or penalized by any local, state or federal agency, authority or
governmental unit. If any such materials are brought into the Demised Premises,
any Buildings or the Property by Tenant, Tenant shall, at Tenant's sole expense,
cause the immediate removal thereof.
11. ABANDONMENT OF THE PREMISES.
Tenant agrees not to abandon or vacate the Demised Premises during the
period of this Lease and agrees to use the Demised Premises for the purpose
herein leased until the expiration hereof.
12. REPAIRS BY LANDLORD.
Landlord agrees to keep in good repair the roof (including structure,
deck, insulation, flashing and membrane), foundations and exterior walls of the
Building and underground utility and sewer pipes
4
outside of the exterior walls of said Building; provided, however, that Landlord
shall not be responsible for the repair of glass and exterior doors and any and
all repairs rendered necessary by the negligence of Tenant, its agents,
employees or invitees. Landlord gives to Tenant exclusive control of the Demised
Premises and shall be under no obligation to inspect same. Tenant shall promptly
report in writing to Landlord any defective condition known to it which Landlord
is required to repair, and failure to so report such defects shall make Tenant
responsible to Landlord for any liability incurred by Landlord by reason of such
defects.
13. REPAIRS BY TENANT.
Tenant accepts the Demised Premises in their present condition and as
suited for the uses intended by Tenant. Tenant shall, through the Lease Term and
all renewals thereof, at its expense, maintain in good order and repair the
Demised Premises, including the Building, heating and air conditioning equipment
(including but not limited to replacement of parts, compressors, air handling
units and heating unit) and other improvements located thereon, except those
repairs expressly required to be made by Landlord. In the event Tenant fails to
make said repairs, then Landlord may, but shall not be obligated to, make such
repairs in which event Tenant shall promptly reimburse Landlord for all expenses
incurred thereby, said expenses constituting Additional Rental hereunder.
Tenant agrees to return the Demised Premises to Landlord at the expiration, or
prior termination, of this Lease in as good condition and repair as when first
received, normal wear and tear, damage by storm, tire, lightning, earthquake or
other casualty alone excepted. Aside from the aforesaid repairs, Tenant shall
not make any alterations, additions or improvements to the Premises without the
prior written consent of Landlord.
14. REAL ESTATE TAXES.
Landlord shall be responsible during the Lease Term and any extension
or renewal thereof, for all real estate taxes and assessments (including,
without limitation, general and special assessments no matter how designated),
of every kind and nature, with respect to the Property or the Building or both
above. Tenant shall be responsible for all personal property taxes for all
personal property located in or on the Demised Premises.
15. INSURANCE
Landlord shall be responsible during the Lease Term and any extension
or renewal thereof, of all insurance (including, but not limited to, general
liability and property damage) on the Demised Premises for each year. Tenant
shall be responsible for all insurance on property other than the Demised
Premises including but not limited to all personal property located in or on the
Demised Premises, as well as workman's compensation for its employees.
5
16. DESTRUCTION OF OR DAMAGE TO PREMISES.
If the Demised Premises are totally destroyed by storm, fire,
lightning, earthquake or other casualty, this Lease shall terminate as of the
date of such destruction, and Total Rental shall be accounted for as between
Landlord and Tenant as of that date. If the Demised Premises are damaged but not
wholly destroyed by any of such casualties, Base Rental shall abate in such
proportion as use of the Demised Premises has been destroyed, and Landlord shall
restore same to substantially the same condition as before damage as speedily as
practicable, whereupon full Base Rental shall commence.
17. CONDEMNATION.
If the whole of the Demised Premises, or such portion thereof as will
make same unusable for the purposes herein leased, shall be condemned by any
legally constituted authority or taken by private purchase in lieu thereof of
any public use or purpose, then in either of said events the Lease Term hereby
granted shall cease from the time when possession thereof is taken by public
authorities, and Total Rental shall be accounted for as between Landlord and
Tenant as of that date. Such termination, however, shall be without prejudice
to the rights of either Landlord or Tenant to recover compensation and damage
caused by condemnation from the condemnor. It is further understood and agreed
that neither the Tenant nor Landlord shall have any rights in any award made to
the other by any condemnation authority.
18. ASSIGNMENT AND SUBLETTING.
Tenant may not, without the prior written consent of Landlord, assign
this Lease or any interest hereunder, or sublease Demised Premises or any part
thereof, or permit the use of Demised Premises by any party other than Tenant.
Consent to one or more assignments or subleases shall not destroy or waive this
provision. Subtenants and assignees shall become directly liable to Landlord for
all obligations of Tenant hereunder without relieving Tenant's liability.
19. CANCELLATION OF LEASE BY LANDLORD OR TENANT.
(A) It is mutually agreed that in the event Tenant shall default in the
payment of Base Rental and/or Additional Rental herein reserved, when due, and
fails to cure said default within thirty (30) days after written notice thereof
from Landlord; or if Tenant shall be in default in performing any of the terms
and provisions of this Lease other than the provision requiring the payment of
Total Rental, and fails to cure such default within thirty (30) days after the
date of receipt of written notice of default from Landlord; or if Tenant is
adjudicated bankrupt; or if a permanent receiver is appointed for Tenant's
property and such receiver is not removed within thirty (30) days after written
notice from Landlord to Tenant to obtain such removal; or if, whether
voluntarily or involuntarily, Tenant takes advantage of any debtor relief
proceedings under any present or future law, whereby the Total Rental or any
part thereof is, or is proposed to be, reduced or payment thereof deferred; of
if Tenant makes an assignment for the benefit of creditors;
6
or if Tenant's effects should be levied upon or attached under process against
Tenant, not satisfied or dissolved within thirty (30) days after written notice
from Landlord to Tenant to obtain satisfaction thereof; then, and in any of said
events Landlord at Landlord's option may at once, or within sixty (60) days
thereafter (but only during continuance of such default or condition),
terminated this Lease by written Notice to Tenant; whereupon this Lease shall
end. After an authorized assignment or subletting of the entire Demised Premises
covered by this Lease, the occurring of any of the foregoing defaults or events
shall affect this Lease only if caused by, or happening to, the assignee or
sublessee. Any notice provided in this Section may be given by Landlord, or its
attorney of Agent herein named. Upon such termination by Landlord, Tenant will
at once surrender possession of the Demised Premises to Landlord and remove all
of Tenant's effects therefrom; and Landlord may forthwith re-enter same and
repossess itself thereof, and remove all persons and effects therefrom, using
such force as maybe necessary without being guilty of trespass, forcible entry
or detainer or other tort.
(B) Tenant may cancel Lease should Contractor Agreement be terminated
by Company or Contractor according to its terms.
20. RELETTING BY LANDLORD.
Landlord, as Tenant's agent, without terminating this Lease, upon
Tenant's failure to cure any default within the time permitted as set forth in
Section 18 hereof, may at Landlord's option enter upon and rent the Demised
Premises at the best price obtainable by reasonable effort, without
advertisement and by private negotiations and for any term Landlord deems
proper. Tenant shall be liable to Landlord for the deficiency, if any, between
Tenant's Total Rental hereunder and the price obtained by Landlord and all other
reasonable costs directly related to reletting, including, but not limited to
the payment of commissions, the making of alterations, costs of leasing same,
costs for any unamortized Tenant improvements and otherwise.
21. EFFECT OF TERMINATION OF LEASE.
No termination of this Lease prior to the normal ending thereof, by
lapse of time or otherwise, shall affect Landlord's right to collect Base
Rental, Additional Rental and any other changes due Landlord by Tenant.
22. NO ESTATE IN LAND.
This Lease shall create the relationship of Landlord and Tenant between
the parties hereto; no estate shall pass out of Landlord. Tenant has only a
usufruct, not subject to levy and sale, and not assignable by Tenant except by
Landlord's consent.
23. ATTORNEYS' FEES AND HOMESTEAD.
If any rental owing under this Lease is collected by or through an
attorney at law, or if Landlord employs an attorney at law to enforce
7
any of the other terms or conditions of this Lease, Tenant agrees to pay or
reimburse Landlord for all reasonable associated attorneys' fees, as Additional
Rental hereunder. Tenant waives all homestead rights and exemptions which he may
have under any law as against any obligation owing under this Lease. Tenant
hereby assigns to Landlord Tenant's homestead and exemption.
24. SERVICE OF NOTICE.
Tenant hereby appoints as Tenant's agent to receive service of all
dispossessory or distraint proceedings and notices hereunder, and all notice
required under this Lease, the person in charge of Demised Premises at the time,
or occupying same; and if no person is in charge of, or occupying the Demised
Premises, then such service of notice may be made by attaching the same on the
main entrance to the Demised Premises. A copy of all notices under this Lease
shall also be sent to such other address as Tenant may from time to time
designate in writing to Landlord.
All notices required by law or by this Lease to given Landlord
shall be given by depositing same in registered or certified U. S. Mail,
postage prepaid, and addressed as follows:
For Landlord: C. Arthur Howard
Howard & Howard Real Estate Partnership
Post Office Box 294
Statesboro, GA 30458
25. QUIET ENJOYMENT.
Landlord hereby covenants and agrees to permit Tenant quiet enjoyment
of possession of the Demised Premises during the Lease Term, so long as Tenant
shall pay the Total Rental aforesaid and carry out all other obligations herein
made binding upon the Tenant.
26. INSURANCE.
26.1 Tenant shall at all times during the Lease Term maintain in full
force and effect the following insurance in standard form generally in use in
Georgia, with insurance companies authorized to do business in said state, which
are satisfactory to Landlord:
26.1.1 Comprehensive public liability insurance in the amount of at
least Two Hundred Fifty Thousand ($250,000.00) Dollars for any occurrence
resulting in bodily or personal injury to or the death of one person and
consequential damages arising therefrom, and in the amount of at least Five
Hundred Thousand ($500,000.00) Dollars for any occurrence resulting in bodily or
personal injury or death to more than one person and consequential damages
arising therefrom.
26.1.2 Personal property damage insurance covering liability for damage
to all personal property in the amount of the full insurable value thereof.
8
26.1.3 Workmen's Compensation Insurance for its employees as required
by law.
26.2 Tenant will furnish to Landlord, at least ten (10) days before
Tenant takes occupancy of the Demised Premises, and thirty (30) days before
expiration or termination of any such policy, copies of policies or certificates
of insurance evidencing coverage required by this Lease. All policies required
hereunder shall contain an endorsement providing that the insurer will not
cancel or amend the policy or policies without first giving at least ten (10)
days' prior written notice thereof to Landlord.
26.3 The insurance required by this Section may be included in policies
of "blanket insurance", provided that, in all other respects, each such policy
shall comply with the requirements of this Section, and provided that no other
loss, which may or may not be also insured thereby, shall in any way affect or
limit the coverage and amount of insurance required hereby.
27. SUCCESSORS AND ASSIGNS, GOVERNING LAW AND BINDING EFFECT.
"Landlord" as used in this Lease shall include first party, its heirs,
representatives, assigns and successors in title to the Property. "Tenant" shall
include second party, its heirs and representatives, and if this Lease shall be
validly assigned or sublet, shall include also Tenant's assignees or sublessees,
as to premises covered by such assignment or sublease. "Landlord" and "Tenant"
include male and female, singular and plural, corporation, partnership or
individual, as may fit the particular parties. The laws of the State of Georgia
shall govern the validity, interpretation, performance and enforcement of this
Lease. Except as otherwise provided herein, this Lease shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and assigns.
28. TIME OF THE ESSENCE.
In all instances where Tenant is required by the terms and provisions
of this Lease to pay any sum or to do any act at a particular indicated time or
within any indicated period, it is understood and agreed that time is of the
essence.
29. WAVIER OF CLAIMS.
To the extent permitted by law, Landlord and Landlord's agents,
employees and contractors shall not be liable for, and Tenant hereby
indemnifies, holds harmless and releases Landlord, its agents, employees
contractors from and against any and all claims for damage to persons or
property sustained by Tenant or any person claiming through Tenant resulting
from any fire, accident, occurrence or condition in or upon the Demised Premises
or Building of which it shall be a part except where such claims arise solely
out of the gross negligence or willful misconduct of Landlord, Landlord's
agents, employees or contractors.
9
This Lease contains the entire agreement of the parties hereto and no
representations, inducements, promises or agreements, oral or otherwise, between
the parties, not embodied herein unless contained in a modification in writing
executed by all of the parties hereto, shall be of any force or effect.
IN WITNESS WHEREOF, the parties herein have hereunto set their hands
and seals the day and year first above written.
HOWARD AND HOWARD REAL ESTATE
PARTNERSHIP
BY: (SEAL)
---------------------------
C. ARTHUR HOWARD, General Partner
Signed, sealed and delivered as
to Landlord in the presence of:
- -----------------------------------
Witness
- -----------------------------------
Notary Public
[NOTARIAL SEAL]
IKS SERVICES, INC.
BY: (SEAL)
----------------------------
Title:
----------------------------
Signed, sealed and delivered as ATTEST:
to Tenant in the presence of: ----------------------------
[CORPORATE SEAL]
- ----------------------------
Witness
- ----------------------------
Notary Public
[NOTARIAL SEAL)
10
EXHIBIT "A"
All that certain tract or parcel of land situate, located and being in the
1209th G. M. District of Bulloch County, Georgia, and being more particularly
described as Parcel "B" containing 0.44 acres, according to a survey for C.
Arthur Howard and Cecil B. Howard. Said parcel begins at a 3/4" rebar set on
Gentilly Run being the POINT OF BEGINNING, thence proceeding South 06 degrees 26
minutes 07 seconds West, a distance of 122.80 feet to an iron pin set; thence
North 84 degrees 09 minutes 00 seconds West, a distance of 156.10 feet to
a 3/4" rebar set; thence proceeding North 04 degrees 25 minutes 25 seconds
East, a distance of 121.42 feet to a 3/4" rebar set; thence proceeding South 84
degrees 29 minutes 13 seconds East, a distance of 160.38 feet to the POINT OF
BEGINNING.
11
STATE OF GEORGIA ]
]
COUNTY OF BULLOCH ]
ADDENDUM TO COMMERCIAL LEASE CONTRACT
THIS ADDENDUM TO LEASE made effective as of the day of ,
1992, by and between HOWARD & HOWARD REAL ESTATE PARTNERSHIP, a Georgia general
partnership, first party (hereinafter called "Landlord") and IKS SERVICE, INC.,
second party (hereinafter called "Tenant");
W I T N E S S E T H:
WHEREAS, Landlord and Tenant did enter into that certain Commercial
Lease Contract (hereinafter referred to as the "Lease") made effective the first
day of March, 1992, for property, including improvements thereon as more
particularly described in the attached Exhibit "A"; and
WHEREAS, Section 3 of the Lease entitled "Additional Property" provides
that in the event Lessee desired to expand the Leased Premises, and Lessor
desired to lease additional property to Lessee, then Lessor and Lessee agreed to
execute an Amendment to the Lease Agreement to provide for the additional leased
property and the additional rental for such property;
WHEREAS, Landlord and Tenant do now desire to amend the Lease as
provided hereinafter; and
NOW, THEREFORE, Landlord and Tenant do hereby amend the Lease as
follows:
1. Paragraph 1 of the Lease entitled "Definitions" is hereby amended to
define Base Rental as follows: "The monthly rental calculated and payable
pursuant to Section 5 of the Lease."
12
2. Section 5 of the Lease entitled "Base Rental" shall be amended to
provide that the monthly base rental of $500.00 shall be adjusted to equal
$1,035.00 beginning the first day of the month following completion of the
addition to the Demised Premises containing approximately 3,000 square foot.
3. Paragraph 6 of the Lease entitled "Rental Adjustment" shall be
revised to provide for monthly rentals during the term of the Lease as follows:
Year 1 (through the month during which expansion of the demised
Premises is completed) $500.00 per month
Year 2 (balance of Year 1) $1,035.00
Year 2 $1,080.00
Year 3 $1,225.00
Year 4 $1,270.00
Year 5 $1,315.00
4. Except as heretofore amended, all terms and provisions of the Lease
remain in full force and effect as if fully set forth herein.
HOWARD & HOWARD REAL ESTATE
PARTNERSHIP
BY: /s/ C. Arthur Howard (SEAL)
----------------------
C. ARTHUR HOWARD, GENERAL PARTNER
Signed, sealed and delivered as
to Landlord in the presence of:
/s/ Janet E. Owen
- ------------------
Witness
/s/ Mary Dickerson
- ------------------
Notary Public
[SIGNATURES CONTINUED ON NEXT PAGE)
13
IKS SERVICE, INC.
BY: /s/ Ray Grimes (SEAL)
----------------------------
Title: President
----------------------
ATTEST: /s/
-----------------------
Signed, sealed and delivered as
to Tenant in the presence of:
/s/ (CORPORATE SEAL)
- --------------------------------
Witness
/s/ Jay S. Davis
- --------------------------------
Notary Public
MY COMMISSION EXPIRES JANUARY 21, 1995
14
EXHIBIT "A"
All that certain tract or parcel of land situate, located and being in the
1209th G. M. District of Bulloch County, Georgia, and being more particularly
described as Parcel "B" containing 0.44 acres, according to a survey for C.
Arthur Howard and Cecil B. Howard. Said parcel begins at a 3/4" rebar set on
Gentilly Run being the POINT OF BEGINNING, thence proceeding South 06 degrees 26
minutes 07 seconds West, a distance of 122.80 feet to an iron pin set; thence
North 84 degrees 09 minutes 00 seconds West, a distance of 156.10 feet to a 3/4"
rebar set; thence proceeding North 04 degrees 25 minutes 25 seconds East, a
distance of 121.42 feet to a 3/4" rebar set; thence proceeding South 84 degrees
29 minutes 13 seconds East, a distance of 160.38 feet to the POINT OF BEGINNING.
15
[CLAUDE HOWARD LUMBER COMPANY LETTERHEAD]
October 9, 1992
Mr. Ray Connell
IKS Services
Fax: 205-682-4125
Subject: Sav Shop Building Addition
Dear Ray:
This is a letter to confirm our agreement concerning the new building.
I have ordered the building as of today, and we anticipate the building
being completed before January 1993. Enclosed is the addendum to the lease
contract for your review and approval.
I will mail this to you Monday, October 12, 1992, if I do not hear from
you regarding any changes in the addendum. Please sign and return to me as soon
as possible.
Looking forward to continued business and relations with IKS.
Sincerely,
/s/ C. Arthur Howard
Howard and Howard Real Estate Partnership
C. Arthur Howard
CAH/dmk