1
EXHIBIT 10.50
S U B L E A S E
THIS SUBLEASE (hereafter "Sublease") is made and entered into this day
of May, 1995 (the "Effective Date"), by and between Xxxxxx X. Xxxxxx, dba
THE CELTIC INVESTMENT CO., as Lessor, and World Security Services Corp., as
Lessee, both Lessor and Lessee jointly referred to herein as "the parties."
WITNESSETH:
For and in consideration of the mutual promises, covenants and
agreements hereinafter contained to be kept and performed by the parties hereto,
it is mutually agreed as follows:
AGREEMENT:
1. Description. The Lessor hereby subleases and demises to the Lessee,
and the Lessee hereby takes and hires from the Lessor, for and during the term
hereof upon and subject to the terms and conditions herein set forth, to have
and to hold for the term the premises outlined in red in EXHIBIT "A" (the
"Subleased Premises").
2. Term. The term of this Sublease shall commence on the 1st day of
June, 1995, and shall expire on May 31, 2000 (the "Term") unless terminated
sooner as hereinafter provided. The occupancy of the Subleased Premises by
Lessee shall continue without interruption until the end of the Term or until
sooner terminated under the provisions of this Sublease.
3. Rental. During the Term of this Sublease, Lessee shall pay Lessor
$11.50 per square foot per annum, for the total square footage leased of 3,000
square feet payable in the sum of Two Thousand Eight Hundred Seventy Five and
no/100 Dollars ($2,875.00) per month, beginning the 1st day of June, 1995, and
with the same sum due on the first day of each month thereafter during the Term
of this Sublease.
2
In calculating the rentable area of the Subleased Premises, the
rentable area shall be as defined by the standard method for measuring floor
area in office buildings, BOMA, American National Standard, 1981. The total
square footage leased, above, and monthly rental, above, may be adjusted to an
architect prepared certification of area occupied and leased according to BOMA
standards.
At the end of the twenty fourth (24th) month of the term (i.e.,
effective on June 1, 1997), Lessor shall have the option to increase the rent
for the remainder of the term. This increase shall be determined by the average
of the value in two (2) opinion letters provided to Lessor by separate
commercial real estate brokers who are qualified to determine such rentals.
Provided, however, the adjusted rental shall not be less than the rental rate
charged for the immediately preceding 24-month period, nor greater than an
amount that is the immediately preceding rental rate increased by five percent
(5%) compounded per lease year or portion thereof since June 1, 1995.
The monthly rentals due shall be paid at the Lessor's offices, 0000 X.
Xxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxx 00000 (or such other address as Lessor may
designate in writing).
4. Deposit. As partial consideration for execution of this Sublease,
Lessee has paid to Lessor, as a deposit, the sum of Two Thousand Eight Hundred
Seventy Five and no/100 Dollars ($2,875.00) (the "Deposit"), receipt of which is
hereby acknowledged. Upon the expiration of the Term, an amount equivalent to
the Deposit, after deduction of any sums necessary to complete Lessees
obligations under this Sublease, shall be returned to Lessee within thirty (30)
days of the expiration of the Term. Lessee agrees that Lessor is under no
obligation to segregate the Deposit and that Lessor may use the Deposit in any
manner that he sees fit, and shall not be liable to Lessee for any interest or
income accruing to Lessor by reason of his use of
2
3
the Deposit. Upon termination of the Sublease other than by expiration, Lessor
shall apply the Deposit as he deems reasonable.
5. Use of Subleased Premises.
A. The Lessee shall use and occupy the Subleased Premises as
general office operations, and for any lawful purpose incidental
thereto. Lessee shall, at its own expense, obtain any and all licenses
and permits necessary for such use. Lessee shall not use the Subleased
Premises for any other purpose without the prior written consent of
Lessor, which Lessor may withhold in its sole and absolute discretion.
Lessee shall comply with the requirements of any State or Federal
statute or local ordinance or regulation applicable to Lessee and/or
its use of the Subleased Premises.
B. Lessee shall not allow on the Subleased Premises any vending
machines, whether owned by Lessee or leased by Lessee, and shall not
sell any gifts, novelties, sundries or incidentals of any kind, or
offer any merchandise for sale or delivery on the Subleased Premises
without the prior written consent of Lessor, which Lessor may withhold
in its sole and absolute discretion; provided, however, that Lessor may
require Lessee to pay additional rentals if such use(s) are permitted.
This is in recognition of Lessor's obligations to the Port under the
Master Lease as hereinafter described.
6. Alterations and Improvements to Prepare Subleased Premises for
Occupancy by the Lessee. Lessor shall, at its own cost and expense, make and
complete on or before June 1, 1995, or as soon thereafter as practicable, all
interior improvements and alterations in accordance with the plans and
specifications prepared by Lessor and attached hereto as EXHIBIT "B" and
approved and initialed by the parties hereto. If there is no attached and
initialed Exhibit B hereto,
3
4
it shall be conclusively presumed that no such improvements and/or alterations
are required as part of this Sublease.
7. Real Estate Taxes. Lessor agrees to pay before they become
delinquent all taxes (both general and special), assessments or governmental
charges (hereinafter collectively referred to as "taxes") lawfully levied or
assessed against the premises leased by Lessor from the Port of Portland (the
"Demised Premises") under the terms of the Lease (the "Master Lease"), a copy of
which is available from the Lessor at his business offices; provided, however,
that Lessor may, at its sole cost and expense (in its own name or in the name of
Lessee as well, as it may deem appropriate) dispute and contest the same, and at
the conclusion of such contest, Lessor shall pay the items contested to the
extent that they are held valid, together with all court costs, interest and
penalties relating thereto.
8. Increase in Operating Costs.
A. If, in any calendar year commencing with calendar year 1995,
Lessor's Annual operating Costs (as hereinafter defined) with respect
to the Demised Premises shall be higher than such costs for the year
ending 1995 (the "Base Year"), then in each such year during the Term,
Lessee shall be obligated to pay, in addition to the monthly rental
provided in Section 3 herein, an amount equal to Four percent (4%) of
the excess over the Base Year's Annual Operating Cost (such percentage
being based upon the square footage of the Subleased Premises to the
Demised Premises). The term "Annual Operating Cost" is defined as
meaning any and all expenses, as determined by generally accepted
accounting practices, consistently applied, incurred in a calendar year
by the Lessor in connection with the servicing, operation, maintenance,
repair, and management of the Demised Premises, and related exterior
appurtenances of which the Demised
4
5
Premises are a part, and the cost of any services incurred in order to
achieve a reduction of any operating expenses or real estate taxes.
"Annual Operating Cost" shall include the following costs by way of
illustration, but shall not be limited thereto: real estate taxes and
assessments levied on the land and building of which the Demised
Premises is a part; utilities and services; insurance premiums (except
as otherwise provided in Section 15); licenses, permits, and inspection
fees; and the cost of wages, materials and services for the operation,
maintenance, and management of the Demised Premises. "Annual Operating
Costs" shall not include any of the following: capital improvements
(except as described in Paragraph 6); expenses of painting, decorating,
and alteration of other than public areas, common areas or the
Subleased Premises; interest and amortization of mortgages;
depreciation of the Demised Premises; and income or franchise taxes or
other such taxes imposed or measured by the net income of the Lessor
from operation of the Demised Premises and related exterior
appurtenances, of which the Demised Premises, are a part; and certain
fire insurance premiums which shall be the obligation of Lessee as
provided in Section 15.
B. During December of each calendar year or as soon thereafter as
practicable, Lessor shall give Lessee written notice of its estimate of
amounts payable under Paragraph A. above for the ensuing calendar year.
On or before the first day of each month during the ensuing calendar
year, Lessee shall pay to Lessor 1/12 of such estimated amounts,
provided that if such notice is not given in December, Lessee shall
continue to pay on the basis of the prior year's estimate until the
month after such notice is given. If at any time or times it appears to
Lessor that the amounts payable under Paragraph A. above for the
current calendar year will vary from its estimate by more than
5
6
75 percent, Lessor shall, by written notice to Lessee, revise its
estimate for such year, and subsequent payments by Lessee for such year
shall be based upon such revised estimate, subject, however, to the
provisions of Paragraph A above.
C. Within ninety (90) days following the end of each calendar year
during the Term, Lessor shall furnish to Lessee a statement certified
by accountants selected by Lessor showing the Annual Operating Cost for
the Base Year, the Annual Operating Cost for the immediately preceding
calendar year and the increase, if any, in such cost over the Base
Year. Lessee's pro rata share of such increase, if any, shall be shown
on the statement provided. If Lessee has been paying estimated increase
payments during the calendar year as specified in Paragraph B, then
Lessor shall compare Lessee's actual share of increase to Lessee's
estimated payments for the increase. Lessee shall pay any deficiency in
Lessee's share of the increase within thirty (30) days after receipt of
the statement. If Lessee's estimated increase payments exceed the
amount due, Lessee may offset the excess against the next rent due
until such excess is depleted.
D. If, for any reason other than the default of Lessee, this
Sublease shall terminate on a day other than the last day of a calendar
year, the amount of any increase in rental or Annual Operating Costs
payable by Lessee, applicable to the calendar year in which such
termination shall occur shall be prorated on the basis which the number
of days from the commencement of such calendar year to and including
such termination date bears to 365 irrespective of the actual number of
days in the calendar year.
9. Eminent Domain.
A. The term "eminent domain" as used herein shall include not only
the power exercised by governmental bodies that is called condemnation
or eminent domain but also
6
7
the exercise of any similar governmental power, whether by public
authority or by private corporation, or any purchase or other
acquisition in lieu of condemnation. The settlement of any legal
proceedings and purchase price in lieu of condemnation shall require
the consent of all parties if the Subleased Premises or a portion
thereof are taken by such proceedings. The expression "date of taking"
means the date possession of the Demised Premises or any portion
thereof is surrendered to the condemnation authority.
B. If the entire Subleased Premises, or so much thereof as to make
the balance not reasonably adequate for the conduct of Lessee's
business not withstanding restoration by Lessor as hereinafter
provided, shall be taken under the power of eminent domain, this
Sublease shall automatically terminate as of the date on which the
condemning authority takes possession. The deposit return provisions of
Paragraph 4, Page 2 shall be applicable hereto.
C. In the event of any taking under power of eminent domain which
does not result in a termination of this Sublease, the Rent payable
hereunder shall be reduced, effective as of the date on which the
condemning authority takes possession, in the same proportion which the
floor area of the Subleased Premises taken represents to the entire
Subleased Premises, prior to the taking. Lessor shall promptly, at its
expense, restore the portion of the Subleased Premises not so taken to
as near its former condition as is reasonably possible, and the
Sublease shall continue in full force and effect.
D. Any award for any taking of all or any part of the Subleased
Premises under the power of eminent domain shall be the property of
Lessor, whether such award shall be made as compensation for diminution
in value of the leasehold or for taking of the fee. Except for pro rata
payments made by Lessee for tenant improvements in excess of
7
8
building standards and moving expenses, nothing contained herein,
however, shall be deemed to preclude Lessee from obtaining an award to
Lessee for loss of or damage to Lessee's trade fixtures and removable
property or for damages for cessation or interruption of Lessee's
business.
E. A sale by Lessor to any authority having the power of eminent
domain, either under the threat of condemnation or while condemnation
proceedings are pending, shall be deemed a taking under the power of
eminent domain for all purposes under this section.
10. Janitorial Service, Maintenance, Repairs and Inspection. The Lessee
shall keep the demised premise in good and clean condition and Lessee shall
provide, at its own cost and expense, janitorial service for the Subleased
Premises. The Lessee agrees to keep the interior portion of the Subleased
Premises in as good order and repair as it is on the Effective Date; provided,
however, that Lessee shall not be liable for reasonable wear and tear caused by
Lessee or damage caused by Lessor or its agents. Lessee shall maintain in good
repair those exterior improvements, if any, which Lessee caused to be erected
upon the Subleased Premises. The Lessee agrees to surrender the Subleased
Premises at the expiration or sooner termination of the Term hereof in the same
condition in which Lessee has herein agreed to maintain the same during the
continuance of this Sublease.
Lessor shall, at its sole expense, keep and maintain in good and clean
condition and repair the structural supports and exterior of the Demised
Premises including, but not limited to, the foundation, exterior walls, roof,
cornices, guttering, downspouts, all utility and sewer line connections of the
Demised Premises, the sidewalks, loading, parking and landscaped areas, except
for any repairs caused by the wrongful act of Lessee or its agents. Lessee
waives the right
8
9
to make repairs at Lessor's expense under any law, statute or ordinance now or
hereafter in effect.
Lessor and its agents shall have the right at any reasonable time to
enter upon the Subleased Premises for the purposes of inspection, posting
notices, showing to a prospective purchaser or tenant or lender, or making any
alterations or repairs which Lessor shall deem necessary for the protection,
improvement or preservation of the Subleased Premises or for any other lawful
purpose. At any time after ninety (90) days prior to the expiration of the Term,
Lessor may place thereon any usual or ordinary "For Lease" or "For Sale" signs.
11. Alteration, Improvements. The Lessor grants to the Lessee the right
to make such permanent alterations, improvements and changes upon the Subleased
Premises as the Lessee determines to be desirable or necessary for the operation
of its business; provided, that no such changes shall be made without first
receiving the written approval of the Lessor, and further provided that any such
improvements or alterations shall be made solely at Lessee's expense, unless the
parties hereto agree otherwise. Lessor may require Lessee to post a corporate
surety bond reasonably satisfactory to Lessor equaling 150 percent of the
estimated cost of the improvement plus attorneys' fees and interest before
granting any permission to alter, improve and/or change the Subleased Premises.
Lessee may, upon the termination of this Sublease, remove from the Subleased
Premises any decorations, furniture, shelving, trade fixtures, machines and
equipment which Lessee shall, at its own expense, have installed in the
Subleased Premises. Lessee shall restore, at its sole expense, the Subleased
Premises to its condition on the Effective Date of the Sublease, ordinary wear
and tear excepted.
12. Signs. Lessee agrees that no signs, banners, pennants, flags, or
other advertising devices or any signs shall be placed, installed, flown or
erected an the Subleased Premises without
9
10
the written consent of the Lessor first obtained, which consent shall not be
unreasonably withheld. Irrespective of Lessor's consent, Lessee shall comply
with all governmental ordinances, rules or regulations and any rules and
regulations of the Port of Portland.
13. Utilities. Lessor shall, at its sole expense, provide the
electrical power necessary for lighting, heating, air conditioning and
ventilating; Lessee shall pay any and all charges for any unusual or
extraordinary gas and/or electricity requirements, telephone, and all other
charges for utilities furnished to the Subleased Premises during the Term.
14. Parking. Lessee shall cause its employees, independent contractors
and visitors to park their vehicles within the parking areas directly opposite
the Subleased Premises in the area currently provided for under the Master
Lease. Lessee shall be entitled to the use of eight (8) parking spaces in common
with all other tenants within the described area.
15. Liability Insurance/Fire Insurance. The Lessor shall procure and
maintain standard fire and extended coverage insurance covering the Demised
Premises and adjacent walk areas in an amount sufficient to prevent the Lessor
from becoming a co-insurer under the terms of said policies, but in any event in
an amount not less than seventy five percent (75%) of the replacement cost
thereof.
In addition to the provisions of Section 8 herein, Lessee shall
separately pay on demand any increase in premiums for fire insurance carried by
Lessor on the Subleased Premises or the Demised Premises in general which are
directly and peculiarly due to or caused by any activity of Lessee upon the
Subleased Premises whether or not Lessor has consented to such activity.
Lessee shall carry fire and extended coverage, malicious mischief and
vandalism insurance on Lessee's contents contained in the Subleased Premises.
All policies Lessee obtains shall also contain cross-liability endorsement and
contractual liability endorsement.
10
11
Notwithstanding anything to the contrary contained in any other
provision of this Sublease, Lessee and Lessor hereby release the other from any
and all liability or responsibility to the other or anyone claiming through or
under them by way of subrogation or otherwise for any loss or damage to property
caused by fire or any of the extended coverage casualties covered by the
insurance maintained hereunder, even if such fire or other casualty shall have
been caused by the fault or negligence of the other party, or anyone for whom
such party may be responsible; provided, however, that this release shall be
applicable and in force and effect only with respect to loss or damage occurring
during such times as the releasor's policies shall contain a clause or
endorsement to the effect that any release shall not adversely affect or impair
said policies or prejudice the right of the releasor to recover thereunder.
Lessee and Lessor agree that they will request their respective insurance
carriers to include in its policies such a clause or endorsement.
Lessee, shall procure and maintain throughout the Term a policy or
policies of insurance, at its sole cost and expense, insuring both Lessee and
Lessor against all claims, demands or actions arising out of or in connection
with Lessee's use or occupancy of or the condition of the Subleased Premises,
the limits of such policy or policies shall be in an amount not less than
$1,000,000, combined single limit, with respect to personal injury, death, and
property damage and $2,000,000 aggregate (occurrence form), such insurance to
provide for no deductible. Said policy or policies shall be written by insurance
companies qualified to do business in Oregon and reasonably acceptable to
Lessor. Such policies or duly executed certificates of insurance shall be
promptly delivered to Lessor upon written request.
16. Damage or Destruction by Fire or Other Casualty. In the event that
the Subleased Premises are so injured by the elements, fire, tornado, or other
causes or casualty as to be unfit for occupancy in whole or in part, and there
remains at least one (1) year of the Term, and in the
11
12
further event that such damage can be reasonably repaired within one hundred
twenty (120) days and at a cost not to exceed reasonable replacement cost or the
available insurance proceeds, whichever is lesser, then Lessor shall promptly
commence work to repair the same and restore the Subleased Premises to the same
condition as it was immediately prior to the damage, and if the Lessee shall be
deprived of the occupancy by reason of such damage and repairs, a proportionate
allowance shall be made to Lessee from the rent corresponding to the time during
which and to the portion of the Subleased Premises of which it is so deprived.
If the Subleased Premises are so damaged that they cannot be reasonably
repaired and restored as aforesaid within 120 days, or in the event that there
is less than one (1) year then remaining in the Term, or if the reasonable cost
of repair and restoration exceeds the reasonable replacement cost or the
available insurance proceeds, whichever is lesser, then either party may
terminate this Sublease by giving written notice to the other of its intention
to do so within 60 days of the event causing the damage.
17. Liability/Indemnification. Lessor shall not be liable to Lessee or
Lessee's employees, independent contractors, agents, customers or visitors, or
to any other person whomsoever, for any injury to person or damage to property
on or about the Demised or Subleased Premises caused by the negligence of
Lessee, its agents, servants or employees, or of any other person entering upon
the Demised or Subleased Premises under express or implied invitation of Lessee,
or caused by the buildings and improvements located on the Demised or Subleased
Premises becoming out of repair, for which Lessee is responsible herein, or any
other reason and Lessee agrees to indemnify, defend, save and hold Lessor
harmless from any loss, expense, demand, investigations, remedial action,
cleanup or claims, post cleanup monitoring cost and expenses, including
reasonable attorneys' fees arising out of any such damage or injury;
12
13
except that any injury to person or damage to property caused solely by the
negligence of Lessor, its agents, servants or employees, or solely by the
failure of Lessor, its agents, servants or employees to repair and maintain that
part of the Demised Premises which Lessor is obligated to repair and maintain
hereunder shall be the liability of Lessor and not of Lessee, and Lessor agrees
to indemnify Lessee and hold it harmless from any and all loss, expense or
claims, including reasonable attorneys' fees, arising out of such damage or
injury.
18. Assignment and Subletting. Lessee will not assign, transfer,
hypothecate, surrender or encumber this Sublease or any interest hereunder and
will not permit any assignment hereof by operation of law and will not sub-rent
or sublet the Subleased Premises or any portion thereof, and will not permit the
use or occupancy of the Subleased Premises by anyone other than Lessee or its
employees, without first obtaining the written consent of Lessor, which Lessor
may withhold in its sole and absolute discretion; provided, however, Lessor may
impose such reasonable conditions on its consent as Lessor deems appropriate. A
merger, consolidation, liquidation or ownership change by vote of the majority
of the outstanding shares of stock of the Lessee or its owner shall constitute
an assignment. Any consent by Lessor to any act of assignment, or subletting
shall be held to apply only to the specific transaction thereby authorized. Such
consent shall not be construed as a waiver of the duty of Lessee or its legal
representatives or assigns to obtain from Lessor consent to any other or
subsequent assignment or subletting or as modifying or limiting the rights of
Lessor under the foregoing covenant by Lessee not to assign or sublet without
such consent.
19. Possession and Quiet Enjoyment. Lessor covenants that it is
lawfully seized of the Demised Premises and has good right and lawful authority
to enter into this Sublease for the full Term, that Lessor will put the Lessee
in actual possession of the Subleased Premises at the
13
14
beginning of the Term except as otherwise provided hereinabove and that Lessee,
on paying the rent and performing all of the other covenants herein agreed by it
to be performed, shall and may peaceably and quietly have, hold and enjoy the
Subleased Premises and areas in common with other tenants and/or use the
appurtenances thereto for the said Term.
20. Rules and Regulations. Lessee will comply with and abide by, and
will cause its agents, employees, invitees, guests, licensees, and visitors upon
the Demised or Subleased Premises to comply with and abide by all the rules and
regulations set forth in EXHIBIT "C". Lessor and/or Port of Portland (see
Paragraph 22 for Port's relationship to Lessor) will have the right to make
reasonable changes in, additions to, and deletions from said rules and
regulations during the Term. Lessee shall post a copy of the rules and
regulations in common employee areas.
21. Waiver of Priority. Lessor shall have the right, at any time or
from time to time during the Term, as security for any indebtedness with respect
to Demised Premises, to mortgage or refinance a mortgage on the Demised Premises
or any part thereof, the lien of which may, at the option of the Lessor, be
prior to any interest of the Lessee hereunder; but such encumbrance shall be
subject to and limited by the express condition that the mortgage, trust deed or
other instrument establishing a binding obligation on the lienor shall contain
apt provisions under the term of which the existence of this Sublease shall be
recognized and shall provide that so long as the Lessee, its successors and
assigns (as permitted hereinabove), shall keep and perform the terms, covenants
and conditions in this Sublease contained on its part to be kept and performed,
neither the holder of such encumbrance nor any holder or owner of the
indebtedness secured thereby, nor any other person, shall, in attempting to
enforce collection of said indebtedness or to realize upon such security, have
any power to impair, modify, abrogate or adversely affect the
14
15
rights of the Lessee, its successors or assigns, under this Sublease to the full
enjoyment of the entire term hereof; to the end that the Lessee, while not in
default hereunder, shall, notwithstanding the creation of or default by Lessor
under any such encumbrance or indebtedness secured thereby, peacefully and
quietly have, hold and enjoy the Subleased Premises for the entire term hereof,
and all other rights, privileges and benefits to which it may be entitled under
and pursuant to the terms of this Sublease.
22. Master Lease Agreement. Lessee recognizes that Lessor's interest in
the Demised Premises is that of a lessee under the terms of an Amended Master
Lease and as may be further amended and confirmed by and between the Port of
Portland ("Port") and Lessor. Any change to the Master Lease shall be deemed a
change to this Lease and Lessee shall abide by any such changes hereafter made.
In the event of the cancellation or termination of the Master Lease prior to its
expiration, or prior to the expiration of the Term or any extensions and
renewals thereof, or in the event of the surrender of the Master Lease, whether
voluntary, involuntary, or by operation of law, the Lessee shall make full and
complete attornment, to the Port for the balance of the Term including any
extensions and renewals thereof, upon the same covenants and conditions as are
contained herein, so as to establish direct privity of an estate and contract
between the Port and the Lessee with the same force and effect as though this
lease was originally made directly from the Port to the Lessee. The Lessee shall
make all rent payments thereafter directly to the Port. By its approval of this
Sublease, the Port represents and covenants with Lessee for a period equal to
the full unelapsed portion of the Term including any extensions and renewals
thereof, and upon the same covenants and conditions as are contained herein, and
the Port will thereafter become the Lessor under this lease.
15
16
This Sublease shall not be effective or valid until approved by Port,
and Lessor shall have no liability to Lessee if for any reason Port does not
approve this Sublease, except that all lease deposits shall be promptly restored
to Lessee by Lessor.
23. Default/Termination.
A. Any of the following shall constitute a default by Lessee under
this Sublease:
(i) Lessee's failure to pay rent or any other charge under this
Sublease within 10 days after it is due, or failure to comply with
any other term or condition of this Sublease within 20 days
following written notice from Lessor specifying the non-compliance.
If such non-compliance cannot be cured within the 20 day period,
this provision shall be satisfied if Lessee commences correction
within such period and thereafter proceeds in good faith and with
reasonable diligence to affect compliance as soon as possible. TIME
IS OF THE ESSENCE OF THIS SUBLEASE.
(ii) Tenant's insolvency, business failure or assignment for the
benefit of creditors. Lessee's commencement of proceedings under
any provisions of any bankruptcy or insolvency law or failure to
obtain dismissal of any petition filed against it under such laws
within the time required to answer, or the appointment of a
receiver for Lessee's properties.
(iii) Assignment or subletting by Lessee in violation of Section
18 of this Sublease.
(iv) Vacation or abandonment of the Subleased Premises without
the prior written consent of Lessor.
16
17
B. In case of default as described in Section 23.A., Lessor shall
have the right to the following remedies which are intended to be
cumulative and in addition to any other remedies provided under
applicable law:
(i) Lessor may terminate the Sublease and retake possession of
the Subleased Premises. Following such retaking of possession,
efforts by Lessor to relet the Subleased Premises shall be
sufficient if Lessor follows its usual procedures for finding
tenants for the space at rates not less than the current rated for
other comparable space in the Demised Premises. If Lessor has other
vacant space in the Demised Premises, perspective tenants may be
placed in such other space without prejudice to Lessor's claim to
damages or loss of rentals from Lessee.
(ii) Lessor may recover all damages caused by Lessee's default
which shall include an amount equal to rentals lost because of the
default, lease commissions paid for this Sublease, and the
unamortized cost of any tenant improvements installed by Lessor to
meet Lessee's special requirements. Lessor may xxx periodically to
recover damages as they occur throughout the Sublease Term, and no
action for accrued damages shall bar a later action for damages
subsequently accruing. Lessor may elect in any one action to
recover accrued damages plus damages attributable to the remaining
Term of this Sublease. Such damages shall be measured by the
difference between the rent under this Sublease and the reasonable
rental value of the subleased Premises for the remainder of the
Term, discounted to the time of judgment at the prevailing interest
rate of judgments.
17
18
(iii) Lessor may make any payment or perform any obligation
which Lessee has failed to perform, in which case Lessor shall be
entitled to recover from Lessee upon demand all amounts so
expended, plus interest from the date of the expenditure at the
rate 1 and 1/2 percent per month. Any such payment or performance
by Lessor shall not waive Lessee's default.
24. Non-waiver. Any waiver of any breach of the terms, conditions or
covenants herein contained to be kept and performed by either party hereto shall
not be deemed or considered as a continuing waiver and shall not operate to bar
or prevent the other party hereto from declaring a forfeiture, termination or
cancellation for any succeeding breach either of the same condition or covenant
or otherwise. Acceptance or payment of rental shall not be deemed a waiver.
25. Attorneys' Fees. In the event any suit is brought by either party
against the other to enforce any of the terms or provisions of this Sublease, or
to collect any sum alleged to be due hereunder, or in the event that Lessor
shall institute a suit for an unlawful detainer of the Subleased Premises, then
it is agreed that the prevailing party in such suit shall be entitled to
attorneys' fees in a reasonable amount to be fixed by the court and included in
any judgment in such action, as well as reasonable attorneys' fees in the event
of an appeal.
26. Binding Effect. This Sublease and all the rights, obligations and
duties contained in this Sublease shall be binding upon and shall inure to the
benefit of the heirs, successors and assigns of the parties hereto; provided,
however, that this provision shall not be interpreted to mean, infer or imply
that Lessee shall have any rights to assign this Sublease or sublet all or any
part of the Subleased Premises except as provided in Section 18.
18
19
27. Holdover. In the event the Lessee remain in possession of the
Subleased Premises after the expiration of Term, then such possession shall
operate to create a month-to-month tenancy upon the same terms and conditions as
set forth herein except that the monthly rental shall be increased to an amount
equal to 150% of the monthly rental paid by Lessee during the last month of the
Term of this Sublease.
28. Force Majeure. In the event that either party hereto shall be
delayed or hindered in, or prevented from, the performance of any act required
hereunder by reason of acts of the other party, strikes, lockouts, labor
troubles, inability to procure materials, failure of power, restrictive
governmental laws or regulations, riots, insurrections, war or other reason of a
like nature not the fault of the party delayed in performing work, or doing acts
required under the terms of the Sublease, then performance of such act shall be
excused for the period of the delay, and the period for the performance of any
such act shall be extended for a period equivalent to the period of the delay.
The provisions of this paragraph shall not operate to excuse Lessee from prompt
payment of any sums required by the terms of this Sublease.
29. Relationship of the Parties. The relationship between the parties
hereto is that of Lessor and Lessee, and of independent contracting parties, and
is not and shall not be deemed to be any other relationship including but
without limiting the generality thereof, that of joint venturers, partners, or
principal and agent.
30. Severability. Should any term, provision, clause, article,
condition or other portion of this Sublease be held inoperative, invalid or
void, the same shall not affect any other term, provision, clause, article,
condition or other portion of this Sublease, but the remainder of the Sublease
shall remain effective as if such term, provision, clause, article, condition or
other
19
20
portion had not been contained herein, unless the inoperative, invalid or void
portion goes to the essence of this Sublease.
31. Amendment. This Sublease cannot be amended, altered or modified
except in writing signed by the parties hereto.
32. Exhibits. Exhibits "A", "B" and "C" annexed hereto are by this
reference incorporated herein as if set forth in full.
33. Notice. Any notice herein required or permitted to be given must be
in writing and shall be deemed to be delivered, whether actually received or
not, when deposited in the United States mail, postage prepaid, certified or
registered mail, and properly addressed to the party to whom such notice is
given. Any notice herein required or permitted to be given by Lessee to Lessor
shall be deemed given when mailed to Lessor and addressed as follows:
THE CELTIC INVESTMENT CO.
0000 X. Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
and notice to the Lessee shall be sent to the following address:
World Security Services Corp.
0000 X. Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Each party shall have the right to specify as its proper address any other
address by giving prior written notice thereof to the
other party.
34. Complete Agreement. This Sublease contains all terms, covenants,
conditions, warranties and agreements of the parties relating in any manner to
the rental, use and occupancy of the Subleased Premises. No prior agreement or
understanding pertaining to the same shall be valid or of any force or effect.
35. Environmental Warranties/Representations.
20
21
A. The Lessee warrants and represents to the Lessor that Lessee
does not and will not at any time during the term, any extensions,
renewals or period of holding over, have, use, place, bring on or in
any manner expose the Demised Premises or the Subleased Premises to any
hazardous materials, toxic substances, asbestos or any other substance
subject to governmental regulation. Lessee warrants that it will at all
times during the Term, any extensions thereof, holding over or
renewals, comply with all present and future federal, state and local
environmental statutes, rules and regulations at Lessee's sole cost and
expense.
B. Lessee agrees and shall pay any and all costs of
investigation, remedial and removal actions, fines, reasonable
attorneys' fees and all post cleanup costs, including but not limited
to monitoring post cleanup monitoring. Lessee shall indemnify, save and
hold harmless Lessor from any and all costs, expenses and reasonable
attorneys' fees for performance of its obligations contained herein
regardless of whether Lessee or its assigns (when permitted) are
responsible for such costs, expenses and attorneys' fees. Violation of
this paragraph by Lessee shall be grounds for immediate termination of
the Sublease.
36. As-Is Clause. EXCEPT FOR THE WORK, IF ANY, TO BE PERFORMED UNDER
PARAGRAPH 6 ABOVE, AND EXCEPT FOR ANY REPAIR, REPLACEMENT, AND/OR MAINTENANCE
OBLIGATIONS OF LESSOR TO BE PERFORMED IN ACCORDANCE WITH THIS SUBLEASE, THE
LESSEE ACCEPTS THE SUBLEASED PREMISES, AS-IS, WHERE-IS, AND WITHOUT WARRANTY OF
ANY TYPE, KIND OR NATURE, INCLUDING, BUT NOT LIMITED TO THE WARRANTIES OF
FITNESS FOR THE LESSEE'S INTENDED PURPOSE.
21
22
37. Limitation an Lessor Liability. The term "Lessor" as used in this
Sublease shall mean the owner of the Demised Premises. If the Demised Premises
are sold or otherwise transferred by Lessor, or any successor, Lessee shall
attorn to the purchaser or transferor and recognize it as the Lessor under this
Sublease and, provided that purchaser assumes all obligations hereunder, the
transferor shall have no further liability hereunder.
38. Estoppel Certificates. Either party will within 20 days after
notice from the other execute, acknowledge and deliver to the other party a
certificate certifying whether or not this Sublease has been modified and is in
full force and effect; whether there are any modifications or alleged breaches
by the other party; the dates to which rent has been paid in advance, and the
amount of any security deposit or prepaid rent; and any other facts that may
reasonably be requested. Failure to deliver the certificate within the specified
time shall be conclusive upon the party of whom the certificate was requested
that the Sublease is in full force and effect and has not been modified except
as may be represented by the party requesting the certificate. If requested by
the holder of any encumbrances, the Port, Sublessee will agree to give such
holder, the Port or Lessor notice of and an opportunity to cure any default by
Lessor under this Sublease.
39. Only Lease. This is the only Sublease or other agreement by and
between the Lessor and Lessee for the Subleased Premises and any other
agreements and/or practices between the parties are merged herein. This Sublease
supersedes, replaces, and cancels the Sublease dated November 1, 1991 by and
between World Security Services Corp. and Lessor and as amended by unsigned
Addendum to Sublease dated April, 1995 only to the extent that full performance
has been given by Lessee herein. The parties acknowledge that the execution of
this Sublease with the additional term is sufficient consideration for the
Sublease.
22
23
40. Options to Extend. Lessee shall have two separate, consecutive
options to renew this Sublease for additional three-year extension periods
exercisable as set forth hereinafter.
40.1 For all extension periods, in order for Lessee to be eligible to
exercise its extension rights, Lessee must not be in default at the time of the
notice of exercise is sent and cannot be in default at any time from the date of
notice of exercise until the extension date nor shall there be an event that has
occurred which with the passage of time or the giving of notice would constitute
a default during the same period of time.
40.2 Rent on any extension shall be market value, but not greater than
a five percent (5%) increase from the then current rental payment. Market value
shall be determined by an average of the value given in two (2) opinion letters,
one provided to Lessor and one provided to Lessee by separate commercial real
estate brokers who are qualified to determine such rentals. Each party shall
select their respective real estate brokers. If the Lessee is and Lessor's
brokers' value differ by 5 percent or less, then the two numbers shall be
averaged and that number shall be the rental for the one extension term. If the
parties' brokers differ by more than 5 percent, then the two brokers shall
select a third broker and the opinion of two of the three brokers shall be the
rental for the one extension term. All such adjustments are subject to the 5
percent cap set forth above The adjusted rentals shall be not less than the
rental rate charged for the immediately preceding Term or Extension Period,
whichever is applicable.
40.3 For all extensions, the notice to Lessor of extension shall be
within 90 days of the end of the then expiring Term or Extension.
40.4 Failure exercise an option to extend terminates any right to
further extensions. All options are consecutive and conditioned upon the
exercise of the prior option.
23
24
IN WITNESS WHEREOF, the parties hereto have executed the foregoing
instrument the day and year first above written.
XXXXXX X. XXXXXX, dba
THE CELTIC INVESTMENT CO.
By: /s/ Xxxx Xxxxxx
---------------------------------------
Xxxx Xxxxxx, authorized agent for
Xxxxxx X. Xxxxxx ("Lessor")
By: /s/ Xxxxx X. Xxxxxx
---------------------------------------
Xxxxx X. Xxxxxx, Vice President
("Lessee")
24
