LEASE
THIS LEASE (the "Lease") is made and entered into this 19 day of April,
2000, between John R. Fayard, Jr., as landlord (the "Landlord"), and John Fayard
Fast Freight, Inc., a Mississippi corporation, as tenant (the "Tenant").
1. Demise. In consideration of the undertakings of the parties contained
herein, Landlord leases to Tenant, and Tenant leases from Landlord, the Leased
Premises on the terms and conditions contained in this Lease.
2. Premises.
2.1 Leased Premises. The Leased Premises comprise a portion of the
real property described on Exhibit "A" hereto (the "Property") consisting of:
such portion of the office building as reasonably may be needed
by the Company in its trucking option and all loading, parking, drive
and other exterior areas associated with the facility (but not the
warehouse space).
2.2 Landlord's License. The Landlord shall retain a non-exclusive
license during the Term of this Lease (as hereinafter defined) to use the leased
premises provided that Landlord's activities do not interfere with the operation
of the Tenant's business as determined by Tenant in its reasonable discretion.
Tenant does not have any interest in the warehouse space on the property and
shall use its best efforts to keep warehouse doors clear and space available for
docking, loading, and unloading in conjunction with Landlord's business.
3. Term.
3.1 Primary Term. The term of this Lease shall be for the period April
19, 2000 (the "Commencement Date"), through April 18, 2005 (the "Primary Term"),
unless this Lease shall be earlier terminated as hereinafter provided.
3.2 Extension Terms. Tenant shall have the option to extend the
Primary Term for the extension periods set forth below (the "Extension Terms"),
upon the terms of this Lease, except as otherwise provided in Section 4.1(B):
(A) Extension Terms: two (2) five (5) year renewal options, from:
Option one: April 19, 2005, through April 18, 2010.
Option two: April 19, 2010, through April 18, 2015.
1
(B) Exercise Date: Tenant shall deliver to Landlord notice of its
election to so extend the Primary Term or the first Extension Term on
or before sixty days from the expiration of the Primary Term, or the
first Extension Term, respectively.
3.3 Term of this Lease. The Primary Term and all Extension Terms
elected by Tenant sometimes shall be referred to collectively as the "Term of
this Lease;" provided, the Term of this Lease shall end upon the first to occur
of expiration or termination of this Lease, or the expiration or termination of
the Lease dated April 19, 2000 between Landlord and Tenant covering the
Gulfport, Mississippi property (the "Gulfport Lease").
4. Rent. There shall be no rent for the Leased Premises, as the rental
amount for the Gulfport Lease includes the rent for the Leased Premises
hereunder.
5. Real Estate Taxes and Assessments. During the Term of this Lease, the
Landlord shall be liable for two-thirds (66 2/3%) of the real estate and
property taxes and special assessments that become due and payable with respect
to the Property each year during the Term of this Lease (the "Landlord's Tax
Percentage"). Upon receipt of a tax statement from the taxing authority, the
Landlord shall forward such statement, along with payment equal to the
Landlord's Tax Percentage multiplied by the total tax liability set forth in the
tax statement (the "Landlord's Tax Payment"), to the Tenant. Subject to
receiving the statement and the Landlord's Tax Payment from the Landlord, the
Tenant shall pay, prior to delinquency, directly to the taxing authority, the
entire amount of the tax liability set forth on the tax statement. The Tenant
shall provide Landlord proof of payment of such tax liability, prior to the
dates on which such payments would otherwise become delinquent. The Landlord
shall not be liable for any increase in the amount of real estate and property
taxes and special assessments levied on the Property because of improvements
made to the Leased Premises by the Tenant but shall be 100% liable for any
increase in the amount of real estate and property taxes and special assessments
levied on the Property because of improvements made to the Property by the
Landlord, and the Landlord's Tax Percentage shall be adjusted accordingly. The
Landlord shall be liable for 100% of the real estate taxes and special
assessments attributable to the Property after the date this Lease is
terminated. The tax payments shall be prorated for any partial year during this
Lease.
6. Utilities. The Tenant shall pay all charges for all utilities,
including, but not limited to, gas, electricity, light, heat, power, water,
sewer, cable, and telephone ("utilities"), used or supplied upon or in
connection with the Leased Premises to which it is entitled to exclusive use and
one-half of such amounts for all other parts of the Leased Premises. The
Landlord shall pay for all utilities used or supplied upon or in connection with
that portion of the Property outside the Leased Premises and for one-half of the
2
utilities used or supplied upon or in connection with that portion of the Leased
Premises to which the Tenant is not entitled to exclusive use. It is the
intention of the parties that the foregoing apply to all utilities of any kind
and, accordingly, each shall pay its proportionate share of any utility charge
relating to or used in or at the Property, but which is not separately metered
thereto.
7. Intentionally Omitted.
8. Intentionally Omitted.
9. Tenant's Improvements. Subject to obtaining Landlord's written consent
for structural improvements (not to be unreasonably withheld and which consent
has been given with respect to all items referred to on Exhibit "C"), Tenant, at
is sole cost and expense, shall have the right, but shall not be obligated,
prior to and during the Term of this Lease to improve, alter, and renovate the
Leased Premises in any manner that Tenant deems necessary or desirable to adapt
the same for the conduct of its business operations, including without
limitation, painting, decorating, redecorating, and installing partitions, floor
coverings, wall coverings, drop ceilings, light fixtures, and the work set forth
on Exhibit "C." Tenant shall perform all work described in this Section
according to the standards set forth in Section 19.1(B).
10. Trade Fixtures; Personal Property. Tenant, at its sole cost and
expense, shall have the right, but not be obligated, to install, use, replace,
and remove its trade fixtures and personal property, such as, without
limitation, telephone, facsimile, and other communications equipment, machinery,
conveyor systems, modular docks, dock levelers, task lights, office furniture,
office trailers, and roof antennas. Upon the expiration or the earlier
termination of this Lease, Tenant shall have the right to remove such trade
fixtures and personal property from the Leased Premises, provided that Tenant
shall repair all damage to the Leased Premises resulting from such removal.
11. Maintenance and Repairs.
11.1 General Maintenance and Repair. The Landlord shall, at Landlord's
sole expense, keep in as good order and repair as it was on the Commencement
Date, reasonable wear and tear excepted. Landlord shall also maintain the
property, including the Leased Premises in a clean and orderly condition, and
shall not cause the exterior of the buildings or any part of the Property to
become littered, disorderly, or unsightly in any manner.
11.2 Tenant Performing Landlord's Maintenance. If Landlord fails to
perform its maintenance and repair obligations within fifteen (15) days after
Tenant's delivery to Landlord of notice of the need therefor, then Tenant shall
have the right, upon delivery of three (3) business days' written notice to
3
Landlord, to perform or have performed all or part of such maintenance and
repairs, at the sole cost and expense of Landlord, and Landlord shall reimburse
Tenant for such costs and expenses within thirty (30) days after Tenant's
delivery to Landlord of an invoice therefor. If Landlord fails to pay within
thirty (30) days of receiving such invoice, Tenant may offset such costs and
expenses against any Rent and other amounts payable by Tenant under this Lease.
12. Intentionally Omitted.
13. Insurance.
13.1 Casualty Insurance Provided by Tenant. At all times during the
Term of this Lease, Tenant, at its sole cost and expense, shall cause the Leased
Premises (including the Common Areas) to be fully and adequately insured with a
customary policy of fire and extended coverage insurance (including vandalism,
malicious mischief, and special extended perils or all risk) in an amount not
less than the full replacement cost of the Leased Premises, with a standard
inflation guard endorsement or, in the event the parties have agreed upon a
fixed amount of insurance, with a fixed amount endorsement. Such insurance
policy shall name the Landlord as an additional insured, as its interests may
appear.
13.2 Casualty Insurance Provided by Landlord. At all times during the
Term of this Lease, Landlord, at its sole cost and expense, shall cause that
portion of the Property outside the Leased Premises to be fully and adequately
insured with a customary policy of fire and extended coverage insurance
(including vandalism, malicious mischief, and special extended perils or all
risk) in an amount not less than the full replacement cost of the subject
Property, with a standard inflation guard endorsement or, in the event the
parties have agreed upon a fixed amount of insurance, with a fixed amount
endorsement. Such insurance policy shall name the Tenant as an additional
insured, as its interests may appear.
13.3 Public Liability Insurance Provided by Tenant. At all times
during the Term of this Lease, Tenant shall maintain in full force and effect a
public liability insurance policy for the Leased Premises (including the Common
Areas) with coverage limits of $5,000,000 for bodily injury and $5,000,000 for
property damage. Such insurance policy shall name the Landlord as an additional
insured, as its interest may appear, and may be provided under Tenant's
insurance policies in effect from time to time.
13.4 Public Liability Insurance Provided by Landlord. At all times
during the Term of this Lease, Landlord shall maintain in full force and effect
a public liability insurance policy for that portion of the Property outside the
Leased Premises (as well as the Common Areas) with coverage limits of $5,000,000
for bodily injury and $5,000,000 for property damage. Such insurance policy
4
shall name the Tenant as an additional insured, as its interest may appear, and
may be provided under Landlord's insurance policies in effect from time to time.
13.5 Certificates. Any insuring party shall, upon request, provide an
insured party with adequate evidence of the continued existence of applicable
insurance coverage by certificate(s) of insurance. Each such certificate shall
contain an agreement by the insurer that such insurance coverage shall not be
modified or canceled without delivery of at least thirty (30) days' written
notice to the insured party.
14. Mutual Subrogation Waiver. In the event that any portion of the
Property or Tenant's trade fixtures or personal property in the Leased Premises
shall be damaged or destroyed by fire, explosion, or other casualty required to
be insured against pursuant to Sections 13.1 and/or 13.2, whether or not such
damage or destruction is caused, or claimed to be caused, by the negligence or
misconduct of Landlord or Tenant, or any of their respective officers,
directors, employees, agents, affiliates, contractors, or invitees, neither
Landlord, Tenant, nor their respective insurance company(ies), shall have any
right of action, by way of subrogation or otherwise, against Tenant or Landlord,
or any of their respective officers, directors, employees, agents, affiliates,
contractors, or invitees, arising from such damage or destruction, and each
policy of insurance required pursuant to Sections 13.1 and 13.2 shall provide a
waiver and release by the insurer of any such right. Landlord and Tenant further
agree that during or after Tenant's occupancy of the Leased Premises, each will
indemnify and hold the other harmless from any claim against the other made by
way of subrogation by Landlord's or Tenant's fire and extended coverage
insurance carrier(s).
15. Damage or Destruction.
15.1 Repair and Restoration. In the event the Leased Premises shall be
damaged or destroyed by fire, casualty, or other risk required to be insured
against pursuant to Section 13.1 or at law, Tenant, at its sole cost and
expense, shall promptly repair the damage or destruction and restore the Leased
Premises to substantially that condition existing immediately prior to such
damage or destruction. Unless terminated pursuant to Section 15.2, this Lease
shall remain in full force and effect, and Tenant's obligation to pay Rent shall
not be abated during the period of Tenant's repair and restoration efforts.
15.2 Rights of Termination. If any portion of the Leased Premises
shall be rendered untenantable, in Tenant's reasonable judgment, for the use and
occupancy thereof by Tenant for the conduct of its business operations as a
result of any damage or destruction, or if Tenant reasonably anticipates that
the repair and restoration of any such damage or destruction shall not be
completed within sixty (60) days after the date of the damage or destruction,
then the Tenant may elect to terminate this Lease by delivery of written notice
to the Landlord within thirty (30) days after the date of such damage or
destruction. Upon delivery of a notice pursuant to this Section, this Lease
5
shall terminate as of the date of the damage or destruction unless otherwise
provided in such notice, and Tenant shall have no further liabilities or
obligations under this Lease; provided, however, that Tenant shall remain liable
for payment of any Rent accrued as of the date of such termination and for the
prompt repair and restoration of the damage or destruction necessary to restore
the Leased Premises to substantially that condition existing immediately prior
to such damage or destruction.
16. Eminent Domain.
16.1 Repair and Restoration. In the event that any portion of the
Leased Premises shall be taken or threatened to be taken under the power of
eminent domain, or settlement in lieu thereof, for any public or quasi-public
use, Landlord promptly shall deliver to Tenant notice thereof. Unless terminated
pursuant to Section 16.2, this Lease shall remain in full force and effect, and
Landlord, at its sole cost and expense, shall repair the damage and restore the
Leased Premises so as to constitute the remaining portion thereof a complete
architectural unit or units. If Tenant remains in occupancy of the Leased
Premises, Landlord shall conduct such repair and restoration efforts in a manner
so as not to interfere unreasonably with the use and occupancy of the Leased
Premises by Tenant for the conduct of its business operations. Until the
completion of Landlord's repair and restoration pursuant to this Section,
Tenant's obligation to pay Rent and other amounts payable by Tenant hereunder
shall be abated as of the date on which possession of the Leased Premises or
portion thereof shall be required by the public or quasi-public body in
proportion to the extent that the value of the Leased Premises for the use and
occupancy thereof by Tenant for the conduct of its business operations shall be
reduced, in Tenant's reasonable judgment.
16.2 Rights of Termination. If, as a result of any of the events for
which notice is required to be given to Tenant under Section 16.1, the Leased
Premises no longer shall be fit and suitable for the use and occupancy thereof
by Tenant for the conduct of its business operations by reason of a material
reduction of any portion of the Leased Premises, Tenant may elect to terminate
this Lease by delivery of written notice to Landlord. In such event, this Lease
shall terminate effective as of the date of actual vacation of the Leased
Premises by Tenant; and thereupon Tenant shall have no further liabilities or
obligations hereunder other than to pay Rent accrued hereunder as of such date
of termination.
17. Tenant's Default; Landlord's Remedies.
17.1 Tenant Default. Each of the following events shall constitute a
default of this Lease by Tenant (a "Tenant Default"):
(A) the failure of Tenant to pay any Rent or other amount payable
by Tenant hereunder within five (5) days after the date on which
6
Tenant receives from Landlord notice specifically describing such
failure (provided, that failure to pay Rent in exercise of any right
of offset to which Tenant or any of its affiliates shall be entitled
shall not constitute a default); and
(B) subject to cure by Landlord under Section 12.2, the failure
of Tenant to perform any other term, condition, covenant, or
obligation of this Lease on the part of Tenant to be performed within
thirty (30) days after the date on which Tenant receives from Landlord
notice specifically describing such failure; provided, however, that
if Tenant shall exercise in good faith diligent efforts within such
thirty (30) day period to cure the failure specified in the notice but
shall not be able to do so because of a cause or causes beyond the
control of Tenant, then any such failure shall not be considered a
Tenant Default so long as Tenant shall continue to exercise in good
faith such diligent efforts to cure such failure and shall do so
within a reasonable period of time.
17.2 Landlord's Remedies. In the event of a Tenant Default, Landlord
shall have the following rights and remedies, which shall be exercisable three
(3) business days after the date on which Tenant receives from Landlord
additional notice by certified or registered mail with respect thereto:
(A) to enter upon the Leased Premises and again have, repossess,
and enjoy the same as if this Lease had not been made, and all terms,
conditions, covenants, and obligations of this Lease on the part of
Landlord to be performed shall cease and terminate, without prejudice,
however, to the right of Landlord to recover from Tenant all Rent
accrued hereunder as of the date of such entry by Landlord; and
(B) to relet the Leased Premises for the remainder of the then
existing Primary Term or Extension Term and to recover from Tenant any
deficiency, as it accrues, between the amount so obtained and Rent
payable by Tenant hereunder; provided, however, that Landlord shall be
obligated in such event to exercise in good faith diligent efforts to
mitigate its damages by reletting the Leased Premises for the highest
rent reasonably obtainable under the circumstances; and
(C) to pursue all other rights and remedies to which Landlord may
be entitled hereunder, at law or in equity.
18. Landlord's Default; Tenant's Remedies. Subject to cure by Tenant under
Section 11.3, the failure of Landlord to perform any term, condition, covenant,
or obligation of this Lease on the part of Landlord to be performed within
thirty (30) days after the date on which Landlord receives from Tenant notice
specifically describing such failure shall constitute a default of this Lease by
Landlord (a "Landlord Default"); provided, however, that if Landlord shall
7
exercise in good faith diligent efforts within such thirty (30) day period to
cure the failure specified in the notice but shall not be able to do so because
of a cause or causes beyond the control of Landlord, then any such failure shall
not be considered a Landlord Default so long as Landlord shall continue to
exercise in good faith such diligent efforts to cure such failure and shall do
so within a reasonable period of time.
19. Representations and Warranties.
19.1 Compliance with Laws.
(A) Landlord represents and warrants that Landlord's Repairs
under Section 7, and its maintenance and repairs under Section 12
shall be done in a good and workmanlike manner and comply with all
laws, ordinances, and requirements, including, without limitation, the
procuring of all building and other permits, licenses, approvals, and
certificates of occupancy, and the observance of applicable building,
zoning, and other code requirements of governmental authorities with
competent jurisdiction. Landlord further represents and warrants that
the Property is currently zoned for the use intended by Tenant.
(B) Tenant represents and warrants that Tenant's Improvements
under Section 9, and its maintenance and repairs under Section 11
shall be done in a good and workmanlike manner and comply with all
laws, ordinances, and requirements, including, without limitation, the
procuring of all building and other permits, licenses, approvals, and
certificates of occupancy, and the observance of applicable building,
zoning, and other code requirements of governmental authorities with
competent jurisdiction. Tenant further represents and warrants that
its use and occupancy of the Leased Premises for the conduct of its
business operations shall comply with all applicable laws, ordinances,
and requirements of governmental authorities with competent
jurisdiction.
19.2 Warranty of Title. Landlord represents and warrants that: (a)
Landlord is the fee simple owner of the Property with full authority to execute,
deliver, and perform this Lease; (b) as of the date of, and during the term of,
this Lease, no third party has or will have any rights to occupy or use any part
of the Property, including the Leased Premises, other than the right of Landlord
and its affiliates to occupy the portion of the Property not included in the
Leased Premises and the non-exclusive right to use the Common Areas and that
portion of the central office building not included in the Office Space; and (c)
as of the date of this Lease, no mortgage, deed of trust, or other lien, or
restriction encumbers the Leased Premises, except as set forth in Exhibit "D".
8
19.3 Broker's Commission. Landlord and Tenant each represents and
warrants for the benefit of the other that it has not dealt with any real estate
broker, finder, or agent in connection with this Lease.
19.4 Hazardous and Toxic Conditions.
(A) Landlord represents and warrants that the Property is in
compliance with all laws, ordinances, rules, or regulations ("Laws")
pertaining to environmental and occupational health and safety matters
("Environmental Laws"). No Environmental Constituent, as hereinafter
defined, is present on the Property other than as may be permitted by
Environmental Law. The term "Environmental Constituent" shall mean any
pollutant, contaminant, foreign substance, or hazardous substance, and
shall include but not be limited to, petroleum, petroleum products,
and substances identified or designated pursuant to federal and state
Environmental Laws, including the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. 9601, et seq.
Landlord shall indemnify and hold harmless Tenant, its officers,
directors, employees, agents, and affiliates from and against any and
all claims, causes of action, suits, judgments, taxes, losses,
damages, deficiencies, obligations, costs, and expenses (including,
without limitation, reasonable attorneys' fees) arising out of or
otherwise in respect of (i) the presence, release, or threatened
release of any Environmental Constituent on, to, or from the Property
(including soils, groundwater, surface water, buildings, or other
structures) unless such presence, release, or threatened release was
caused by Tenant, or (ii) any misrepresentation, inaccuracy or breach
of this Section 19.4(A).
(B) Tenant represents and warrants that the Leased Premises will
be used in compliance with all Environmental Laws; no Environmental
Constituent will be used by Tenant or stored on the Leased Premises
other than as permitted by Environmental Law; and Tenant will not
discharge, release, or spill any Environmental Constituent in
violation of any Environmental Law. Tenant shall indemnify and hold
harmless Landlord, its officers, directors, employees, agents, and
affiliates from and against any and all claims, causes of action,
suits, judgments, taxes, losses, damages, deficiencies, obligations,
costs, and expenses (including, without limitation, reasonable
attorneys' fees) arising out of or otherwise in respect of (i) any
misrepresentation, inaccuracy or breach of this Section 19.4(B), or
(ii) any third-party claims relating to Environmental Constituents on
the Leased Premises arising during the Term of this Lease.
The indemnification provisions of this Section 19.4 shall be in addition to
and shall not be deemed to limit or to be limited by the general mutual
indemnification provided for in Section 21 of this Lease.
9
20. Landlord's Right of Entry. Following reasonable notice to Tenant,
Landlord may enter upon the Leased Premises as often as Landlord may deem
reasonably necessary for the purposes of performing maintenance and repairs,
inspecting the Leased Premises, offering the Leased Premises for lease (but only
during the period that commences sixty (60) days prior to the expiration of the
then existing Primary Term or Extension Term) or offering the Property for sale.
Landlord's right of entry shall be exercised in a manner and at times such that
there shall be no unreasonable interference with the use and occupancy of the
Leased Premises by Tenant for the conduct of its business operations.
21. General Mutual Indemnification. Each party (the "Indemnitor") agrees to
indemnify, defend, and hold the other party (the "Indemnitee") harmless from and
against any and all claims, causes of action, suits, judgments, taxes, losses,
damages, deficiencies, obligations, costs, and expenses (including, without
limitation, reasonable attorneys' fees) (collectively "Losses") arising out of
or otherwise in respect of: (a) any breach of any representation or warranty or
any covenant or agreement of the Indemnitor under this Lease; or (b) any injury
to, or death of, persons and/or any damage to, or destruction of, property, on
or about the Property and attributable to the negligence or misconduct of the
Indemnitor, or its officers, directors, employees, agents, affiliates,
contractors, or invitees, except for any such breach, any injury or death, or
any damage or destruction arising out of, or with respect to, the negligence or
misconduct of the Indemnitee, or any of its officers, directors, employees,
agents, affiliates, contractors or invitees, or as otherwise specifically
provided in this Lease; provided, however, that the indemnification obligation
created by this Section shall be expressly conditioned upon the Indemnitee (i)
delivering to the Indemnitor prompt notice of any event giving rise to such
indemnification obligation and (ii) providing the Indemnitor the opportunity to
defend itself from and against any Losses.
22. Transfers.
22.1 Assignment and Subletting. Except as provided in this Section,
Tenant shall not assign this Lease nor sublet any portion of the Leased
Premises, without the consent of Landlord, which consent shall not be
unreasonably withheld or delayed; provided, however, that Tenant shall have the
right, without the consent of Landlord, to assign this Lease or sublet any
portion of the Leased Premises to Knight Transportation, Inc. or any of
affiliates, or wholly-owned subsidiaries. Absent the written agreement of
Landlord, no assignment of this Lease or subletting of all or any portion of the
Leased Premises shall relieve Tenant of any of the terms, conditions, covenants,
or obligations of this Lease on the part of Tenant to be performed.
22.2 Right of First Refusal. Tenant shall have a right of first
refusal with respect to purchasing the Property, or any portion thereof. The
right of first refusal being granted hereunder shall terminate upon the
expiration or termination of this Lease. In the event Landlord obtains a bona
10
fide purchase offer for any portion of the Property that is acceptable to
Landlord, Landlord shall notify Tenant of the terms of said purchase offer and
Tenant shall then have thirty (30) business days within which to agree to
purchase the portion of the Property so offered, which purchase shall be on the
same terms as contained in such bona fide purchase offer. In the event Tenant
declines said right of first refusal or, in the event Tenant does not respond
within said thirty (30) business days, Landlord shall then be entitled to sell
the subject property to the offering party in strict compliance with the terms
of the offer. In the event the sale is not consummated within thirty (30) days
after the expiration of the thirty (30) day period, or the sale is upon terms
different from those included in the original offer, any sale shall be null and
void and the subject property shall again be subject to this right of first
refusal.
23. Holding Over. If Tenant shall continue to occupy the Leased Premises
after the expiration of the Term of this Lease or the earlier termination of
this Lease, then Tenant shall be deemed to be occupying the Leased Premises as a
tenant from month-to-month, subject to the terms and conditions of this Lease as
they existed on such expiration or termination; provided, however, that either
party shall have the right to terminate such month-to-month tenancy upon
delivery of thirty (30) days' notice to the other.
24. Quiet Enjoyment.
24.1 Landlord's Covenant. Landlord covenants and agrees that Tenant
shall have the peaceful and quiet possession and enjoyment of the Leased
Premises for the conduct of its business operations during the Term of this
Lease, without hindrance by Landlord or any party whatsoever.
24.2 Tenant's Option to Terminate. Tenant, at its sole option and
discretion, shall have the right to terminate this Lease, effective six (6)
months after notice to Landlord, without further liability hereunder except for
Rent and other obligations accrued to the effective date of termination, in the
event that Landlord leases space in the Property to a third party tenant whose
work force is or becomes organized, whether in whole or part, by a union. Tenant
may exercise this option by giving the Landlord said notice not later than
thirty (30) days after Tenant first learns of the fact of organization by a
union.
25. Subordination and Attornment. Tenant covenants and agrees, on the terms
and conditions provided in this Section, that this Lease shall be subordinate to
any institutional mortgage or deed of trust that now or hereafter shall encumber
the Leased Premises, provided that each mortgagee or beneficiary shall execute
and deliver to Tenant a non-disturbance, attornment, and subordination agreement
stating (in addition to other reasonable terms, if any) in substance that (i) if
Tenant is not in default hereunder, the right of possession of Tenant to the
Leased Premises shall not be affected or disturbed by any mortgagee in the
11
exercise of any of its rights under a mortgage or the note secured thereby, and
any sale of the Leased Premises pursuant to the exercise of any rights and
remedies under a mortgage or otherwise shall be made subject to Tenant's right
to possession of the Leased Premises under this Lease; and (ii) Tenant shall
attorn to any mortgagee or purchaser at a foreclosure sale (a "Purchaser") upon
acquisition of title to the Leased Premises by a mortgagee or Purchaser and
notice to Tenant thereof, and this Lease shall continue in full force and effect
between Tenant and such mortgagee or Purchaser. Upon Tenant's receipt and
approval of such a non-disturbance/attornment agreement from a mortgagee or
beneficiary from time-to-time, Tenant covenants and agrees to attorn to such
mortgagee or beneficiary upon foreclosure.
26. Surrender of Leased Premises. Upon the expiration or earlier
termination of the Term of this Lease, Tenant shall deliver up and surrender the
Leased Premises to Landlord in as good order and condition as upon the
Commencement Date, subject to: (a) Tenant's improvements, alterations, and
renovations to the Leased Premises, including, without limitation, Tenant's
Improvements under Section 9; (b) normal wear and tear; (c) repairs and
restorations for which Tenant shall not be responsible hereunder; and (d)
Tenant's removal of its trade fixtures.
27. Notice. Any notice, request, demand, waiver, consent, approval, or
other communication that is required or permitted hereunder shall be in writing
and shall be deemed given only if delivered personally (including by nationally
recognized overnight courier service) or sent by telegram or by certified mail,
postage prepaid, and sent by telecopier as follows:
If to Tenant, to: Kevin P. Knight
Knight Transportation, Inc.
5601 West Buckeye Road
Phoenix, Arizona 85043
(602) 269-2000 Telephone
(602) 606-6504 Fax
If to Landlord, to: John R. Fayard, Jr.
19 Lawrence Place
Gulfport, Mississippi 39503
(228) 896-3533 Telephone
or to such other address as the addressee shall have specified in a notice duly
given to the sender as provided herein. Such notice, request, demand, waiver,
consent, approval, or other communication shall be deemed to have been given as
of the date so personally delivered, telegraphed, or deposited in the mail and
telecopied.
28. Recording. If Landlord or Tenant requests, the parties shall execute
and acknowledge a short form of lease for recording purposes, which short form
of lease shall be recorded at the expense of the party requesting the same,
which party shall pay any documentary transfer tax or other special tax or
assessment associated with, or triggered by, such recording.
12
29. Signs. Tenant shall have exclusive sign rights with respect to the
Leased Premises' exterior and interior, and shall have the right to erect and
display signs on the Leased Premises and on such other areas of the Property as
Tenant reasonably may request, subject only to compliance with applicable laws,
ordinances, and requirements of governmental authorities with competent
jurisdiction.
30. Miscellaneous.
30.1 Entire Agreement. This Lease contains the entire agreement
between the parties and no promise, representation, warranty, covenant,
agreement, or understanding not specifically set forth in this Lease shall be
binding upon either party.
30.2 Amendments. This Lease may not be amended, modified, or
supplemented in any manner without the prior written consent of the non-amending
party.
30.3 Law Governing. This Lease shall be construed and governed under
the laws of the State of Mississippi. In the event any provision of this Lease
is held invalid, illegal, or unenforceable in whole or in part, neither the
validity of the remaining part of such provision, nor the validity of any other
provision of this Lease, shall in any way be affected thereby.
30.4 Binding Effect. This Lease shall be binding upon, and inure to
the benefit of, the parties and their respective heirs, executors,
administrators, personal and legal representatives, successors, and permitted
assigns.
30.5 Counterparts. This Lease may be executed in two or more
counterparts, each of which shall be deemed an original, but which together
shall constitute one and the same instrument.
30.6 Waiver. The waiver by either party hereto of a breach of any term
or provision of this Lease shall not operate or be construed as a waiver of a
subsequent breach of the same provision by any party or of the breach of any
other term or provision of this Lease.
30.7 Exhibits. The exhibits attached hereto are incorporated herein by
this reference. In the event of any conflict between this Lease and an exhibit,
the Lease shall control.
13
30.8 Headings. Section headings herein are used solely for convenience
and shall not be used for interpretation or construing any word, clause,
paragraph, or provision of this Lease.
30.9 Cooperation. The parties agree to obtain, execute, deliver, and
file such additional documents, instruments, and consents as may be reasonably
requested by either party, at the sole cost and expense of the requesting party,
in order to fully effectuate the terms and conditions of this Lease.
30.10 Survival. All representations and warranties in this Lease and
the general mutual indemnification provisions of Section 21 shall survive the
termination of this Lease.
14
IN WITNESS WHEREOF, the parties have caused this Lease to be duly executed
by each of their respective authorized representatives effective as of the date
first above written.
LANDLORD TENANT
JOHN FAYARD FAST FREIGHT, INC.,
a Mississippi corporation
/s/ John R. Fayard, Jr. By: John R. Fayard, Jr.
- ---------------------------------- ------------------------------------
John R. Fayard, Jr., individually John R. Fayard, Jr., President
15
EXHIBIT "A"
LEGAL DESCRIPTION OF PROPERTY
General Description:
6030 Rangeline Road
Mobile, Alabama 36582
Legal Description:
Lot A, Fayard Subdivision, as recorded in Map Book 74 at Page 71 in the
office of the Judge of Probate, Mobile County, Alabama.
16
EXHIBIT "B"
SITE PLAN
17
EXHIBIT "C"
TENANT'S IMPROVEMENTS
None
18
EXHIBIT "D"
MORTGAGES/ENCUMBRANCES/RESTRICTIONS
1. Oil, gas and mineral rights as have previously been reserved by or conveyed
to others.
2. Easement granted Board of Water and Sewer Commissioners by Range Line -
Hamilton Land Company dated December 28, 1988 and recorded in Real Property
Book 3395 page 911.
3. Reservation of all oil, gas and other minerals, and all rights in
connection therewith, as contained in deed from The Lyon Company to W.S.
Mandrell dated December 8, 1941 and recorded in Deed Book 322 Page 125.
4. Easement granted Alabama Power Company by instrument recorded in Deed Book
435, Page 1.
5. Building setback line and drainage and utility line easements as shown on
the recorded plat of said subdivision.
6. Mitigation agreement by and between John Fayard Fast Freight, Inc. and
McGowin Properties, Inc. dated June 5, 1997 and recorded in Real Property
Book 4474, Page 1299.