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Exhibit 10.3
 
LEASE AGREEMENT
 
This Lease Agreement (hereinafter referred to as this “Agreement”) made as of
the 1st day of June, 2006, by and between GREENEVILLE-GREENE COUNTY AIRPORT
AUTHORITY, established by the Town of Greeneville, Tennessee and Greene County,
Tennessee for the purpose of operating the Greeneville-Greene 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-Greene 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:
 

 
1.
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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2.
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.
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.

 

 
4.
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.
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.

 
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.
 

 
6.
Utilities. Lessee shall be responsible for payment of all utilities consumed by
Lessee on the Premises.

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7.
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.

 
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.
 

 
8.
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.

 

 
9.
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.

 

 
10.
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.
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.

 

 
12.
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.

 
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.
 

 
13.
Rights Reserved to Lessor. Lessor reserves the right:

 
(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.
Miscellaneous Obligations of Lessee. Lessee shall be obligated:

 
(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.
 

 
15.
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.
Complete Agreement. This Agreement constitutes the complete agreement between
the parties hereto with respect to Lessee’s use and occupancy of the Premises.

 

17.
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.

 
IN WITNESS WHEREOF, the parties have caused the execution of this Agreement as
of the day first above written.
 

 
GREENEVILLE-GREENE COUNTY
   
AIRPORT AUTHORITY
            
By /s/ Donald C. Henard
   
 
     
“Lessor”
             
FORWARD AIR CORPORATION
         
By /s/ Rodney L. Bell
     
“Lessee”

 
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STATE OF TENNESSEE
)

 
COUNTY OF GREENE
)

 
Personally appeared before me, the undersigned authority, a Notary Public in and
for said state and county, the within named Donald C. Henard, 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-Greene 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.

   
 
   
/s/ Paula Chandler
   
Notary Public
 
[Seal: Notary Public at Large, Greene Co. Tenn.]

 

My Commission Expires: 4-17-2007

 
STATE OF TENNESSEE
)

 
COUNTY OF GREENE
)

 
Personally appeared before me, the undersigned authority, a Notary Public in and
for said state and county, the within named Rodney L. Bell, 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.

   
 
   
/s/ Kathy R. Lail
   
Notary Public
 
 [Seal: State of Tennessee Notary Public, Hamblen County]

 

My Commission Expires: 03-27-2010
 
 
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