EXHIBIT 10.39
OFFICE SPACE
DURHAM SUBLEASE AGREEMENT
SUBLEASE
THIS SUBLEASE is dated as of June 30, 1995 by and between Peoples Security
Life Insurance Company, a North Carolina corporation, 000 Xxxx Xxxxxx Xxxxxx,
Xxxxxx, Xxxxx Xxxxxxxx 00000 ("Sublessor"), and Midway Airlines Corporation, a
Delaware Corporation, 0000 X. Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000
("Sublessee").
RECITALS
A. Sublessor is the lessee of certain premises (the "Leased Premises") at
the real property more particularly described on Exhibit A attached hereto as a
part hereof (the "Property") pursuant to a lease dated July 18, 1986, as amended
by a First Amendment to Office Lease dated as of June 2, 1992 a copy of which
lease, and the amendment is attached hereto as a part hereof as Exhibit B
(collectively the "Master Lease") between Sublessor, as tenant, and DCV Limited
Partnership (formerly known as Xxxx/Xxxxxxxxxxx Ventures), as landlord (the
"Prime Landlord").
B. Sublessor and Sublessee desire to enter into this Sublease pursuant to
which Sublessor shall lease 28974 rentable square feet of space being the 11th
and 12th floors at the Property ("Subleased Premises") to Sublessee, subject to
the terms and conditions of this Sublease.
ARTICLE I
TERMS AND CONDITIONS
1.1 Sublease of Property. Sublessor hereby leases the Subleased Premises
to Sublessee, and Sublessee hereby leases the Subleased Premises from Sublessor,
pursuant to the terms and conditions of this Sublease. The Subleased Premises
will be delivered by Sublessor and accepted by Sublessee in "as is" condition
with no fit up or build out required. The Sublessor
also hereby grants Sublessee a right to use 120 parking spaces at the parking
lot bounded by Xxxxxx Street, Xxxx Street, Seminary Street, and Xxxxxxx Street
in Durham, N.C. throughout the Term of this Sublease.
1.2 Term. The initial term of this Sublease shall begin on August 1, 1995
and shall end on July 31, 1998 (the "Initial Term"). Sublessee shall have the
option to extend the Initial Term of this Sublease two times for consecutive
extended terms of one year each ("Extended Term"). The Initial Term and, if
applicable, any Extended Term, shall be deemed the "Term" of this Sublease. Such
options may be exercised by written notice to Sublessor at least 120 days prior
to the next scheduled expiration date of the Term of this Sublease. Sublessor
will deliver 1000 square feet on the 12th floor of the Subleased Premises to
Sublessee on June 1, 1995, the use of which space by Sublessee will be rent free
until August 1, 1995.
1.3 Rent. During the Term of this Sublease, Sublessee shall pay rent
("Rent") to Sublessor on the first of each month at the address set out above in
accordance with the following schedule:
August 1, 1995 to January 31, 1997, the sum of $30,181.25 per month
($12.50 per square foot)
February 1,1997 to July 31, 1998, the sum of $31,388.50 per month ($13.00
per square foot)
First Extended Term, the sum of $31,388.50 per month
Second Extended Term, the sum of $32,595.75 per month (13.50 per square
foot)
ARTICLE II
UTILITIES AND INSURANCE
2.1 Utilities. Sublessor shall make available to the Sublessee in the
Subleased Premises the use of all necessary utility services including
electrical service, telephone service, water and
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sewer services, heating, ventilating and air conditioning services, gas and
other similar services. Sublessee shall also be responsible for paying for, any
and all electrical, gas, heating, ventilating and air conditioning usage or
service in connection with the Subleased Premises or Sublessee's use thereof,
[***] but subject to 4.2 and 5.1 below Sublessee shall not be responsible for
any costs to operate or maintain the common areas or any other portion of the
Property or the improvements thereon.
2.2 Insurance. Sublessee shall be responsible for obtaining the insurance
policies/coverages now required of the tenant under the Master Lease at its own
cost and shall name Sublessor as an additional insured on such policies.
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS OF SUBLESSOR
Sublessor makes the following representations, warranties and covenants
for the benefit of and reliance on by Sublessee during the Term of this
Sublease:
(a) There are no existing or unexpired subleases, conveyances of any kind
or description affecting Sublessor's leasehold interest in the Subleased
Premises.
(b) The Master Lease is in full force and effect and there is no existing
event of default by Sublessor or the Prime Landlord under the Master Lease.
(c) Sublessor shall not enter into any amendment or modification of the
Master Lease or its terms with respect to the Subleased Premises without the
prior written consent of Sublessee, which consent will not be unreasonably
withheld if such amendment or modification is unrelated to the length of the
term of the Master Lease, the property covered hereby or the rent payable
thereunder
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(d) At all times prior to expiration or other termination of this Sublease
when an event of Default has not occurred and is continuing hereunder, Sublessor
shall ensure the Sublessee's peaceable and quiet possession and enjoyment of the
Subleased Premises. Sublessor shall deliver to Sublessee non-disturbance
agreements from the Prime Landlord and any party holding a mortgage on the
Property or entitled to the benefits of an assignment of rents and/or Leases, in
each case consistent with the terms of this clause (d).
ARTICLE IV
INDEMNIFICATION
4.1 Indemnification of Sublessor. Sublessee shall indemnify, and save and
hold harmless Sublessor against any and all claims asserted by or on behalf of
any person, firm, or corporation incurred without negligence or bad faith on the
part of Sublessor, arising out of, resulting from, or in any way connected with,
the act or omission of Sublessee, or the violation by Sublessee of any law,
ordinance, or statute, or resulting or arising out of any accident or other
occurrence arising from the use and occupancy of the Subleased Premises by
Sublessee, its agents, employees, tenants or invitees.
4.2 Indemnification of Sublessee. Sublessor shall indemnify, and save and
hold harmless Sublessee against any and all claims asserted by or on behalf of
any person, firm, or corporation incurred without negligence or bad faith on the
part of Sublessee, arising out of, resulting from, or in any way connected with,
the act or omission of Sublessor, or the violation by Sublessor of any law,
ordinance, or statute, or resulting or arising out of any accident or other
occurrence arising from the use and occupancy of the Subleased Premises by
Sublessor, its agents, employees, tenants or invitees.
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ARTICLE V
MAINTENANCE
5.1 Maintenance. Sublessor shall, at its own expense, enforce the Master
Lease so as to cause the Prime Landlord to maintain the Subleased Premises in
good condition, repair, and working order as required by the Master Lease, and
shall, at its own expense, cause the Prime Landlord to make or cause to be made
from time to time all necessary repairs, renewals, and replacements thereof,
ordinary wear and tear and obsolescence excepted; provided, however, in the
absence of such maintenance performance by the Prime Landlord, Sublessor shall
cause the Subleased Premises to be so maintained and further provided that
Sublessor shall not be responsible for any maintenance or repairs made necessary
by the negligence of Sublessee.
ARTICLE VI
RIGHT OF FIRST REFUSAL FOR ADDITIONAL SPACE
6.1 In the event Sublessor decides to offer for Sublease or accept an
offer to sublease any of the Leased Premises, Sublessor shall first notify
Sublessee of its intent to sublease all or part of the Leased Premises and
Sublessee shall have 20 days from the date it is notified by Sublessor of
Sublessor's intent to sublease all or part of the Leased Premises to elect to
sublease the said portion of the Leased Premises at the same rental rate and
upon the same terms and conditions as are contained in this Sublease. The terms
of this Section 6.1 shall also apply to any attempted assignment of Sublessor's
interest in the Leased Premises.
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ARTICLE VII
SECURITY
7.1 Security Guard. Sublessor has employed a security guard to escort its
employees to their cars between 5 p.m. and 7 p.m. each workday. Sublessor will
provide the same service to employees of Sublessee as long as Sublessor is
providing this service to its own employees.
ARTICLE VIII
TRAINING FACILITIES
8.1 Temporary Training Facilities. Sublessor will provide to Sublessee for
its use a temporary training area on the 10th floor of the Leased Premises so
long as provision of such space is consistent with Sublessor's training and
space needs. Sublessor makes no guarantee of the availability of the temporary
training space and reserves the right to retake possession of said space at any
time. Sublessor will entertain any reasonable proposal Sublessee may wish to
make for a more permanent and definitive subletting of training space.
ARTICLE IX
SECURITY DEPOSIT
Sublessee shall deposit with Sublessor the sum of $31,388.00 as security
for the performance of Sublessees obligations under this Sublease. Sublessee
shall retain said security deposit, with interest, throughout the term of this
Sublease. After any uncured default by Sublessee under this Sublease, Sublessor
may at its option apply said deposit to cure Sublessee's default, but, if prior
to the expiration of this Sublease, Sublessor depletes the deposit, in
accordance with this Sublease, Sublessee shall immediately restore the amount so
used by
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Sublessor. Unless the Sublessor uses the deposit to cure a default, or at the
conclusion of the Term of this Sublease, or Extended Term uses the deposit to
restore the Subleased Premises to substantially the same condition as of the
commencement of this Sublease, reasonable wear and tear excepted, Sublessor
shall, within thirty (30) days of the expiration of this Sublease, refund to
Sublessee the balance of the deposit held by Sublessor plus interest earned
thereon at the rate of 5.5% per annum.
ARTICLE X
ACTIONS AFFECTING TITLE TO PROPERTY
AND SUBLEASEHOLD ESTATE
10.1 Liens by Sublessee. Sublessee shall not create or permit the creation
of any lien, encumbrance, or charge upon the Subleased Premises or the Property
arising through Sublessee. Any liens, encumbrances, or charges so created or
permitted by Sublessee shall be immediately discharged by Sublessee.
10.2 Assignment and Subleasing. Sublessee may not assign this Sublease or
sublet the Subleased Premises or any portion thereof without the written consent
of Sublessor, which consent shall not be unreasonably withheld or delayed.
10.3. At the expiration of the Sublease Term or any Extended Term,
Sublessee shall return the Subleased Premises to Sublessor in substantially the
same condition as the Subleased Premises was on the date of Sublessee's initial
occupancy, ordinary wear and tear excepted.
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ARTICLE XI
FURTHER OBLIGATIONS OF SUBLESSEE
11.1 Compliance with Laws. Sublessee shall promptly comply or cause
compliance with all laws applicable in any way to the Subleased Premises for
which the Sublessor as "Tenant" is responsible under Section 18.01 of the Master
Lease.
11.2 Hazardous or Toxic Materials. Sublessee shall not permit any
hazardous or toxic wastes or materials to be located or stored on the Subleased
Premises in violation of applicable law.
ARTICLE XII
EVENTS OF DEFAULT AND REMEDIES
12.1 Events of Default. The occurrence of any of the following events
shall constitute an "Event of Default":
(a) Failure by Sublessee to pay any Rent within three (3) business days
following the time provided in this Sublease.
(b) Any breach by Sublessee of any representation, warranty, or covenant
made in this Sublease or failure by Sublessee to perform, within thirty (30)
days following notice from Sublessor, any obligation or observe any covenant or
condition on its part to be performed or observed pursuant to this Sublease.
12.2 Remedies upon Event of Default. Whenever any Event of Default shall
have occurred and be continuing, Sublessor shall have the right (i) to take
immediate possession of the Subleased Premises and the possession and estate of
Sublessee under this Sublease shall terminate forthwith, or (ii) re-enter and
take possession of the Subleased Premises without terminating this
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Sublease and re-let the Subleased Premises for the account of Sublessee, holding
Sublessee liable for the difference between the Rent and other amounts payable
by any Sublessee in such subleasing and the Rent payable by Sublessee hereunder.
12.3 Payment of Expenses After Event of Default. Upon an Event of Default
by Sublessee, Sublessee shall pay to Sublessor upon demand therefor all costs
and expenses, including reasonable counsel fees, lawfully incurred in obtaining
possession of the Subleased Premises, or in enforcing the performance or
observance of any obligation or condition by Sublessee under this Sublease.
12.4 Waivers and Limitation on Waivers. In the event any Event of Default
by Sublessee under this Sublease should be waived by Sublessor, such waiver
shall be limited to the particular Event of Default so waived and shall not be
deemed to waive any other Event of Default hereunder nor be deemed a waiver of
the same Event of Default on another occasion.
12.5 Delay in Exercise of Rights. No delay or omission to exercise any
right occurring upon any Event of Default shall impair any such right or shall
be construed to be a waiver thereof, but any such right may be exercised from
time to time as often as may be deemed expedient. In order to exercise any
remedy reserved to the Sublessor in this Sublease, it shall not be necessary to
give any notice other than such notice as may be herein expressly required.
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ARTICLE XIII
SUBLEASE SUBJECT TO MASTER LEASE
This Sublease is subject to the Master Lease. Except as may be
inconsistent with the terms hereof, all of the terms, covenants and conditions
in the Master Lease shall be applicable to this Sublease with the same force and
effect as if Sublessor was the lessor under the Master Lease and Sublessee was
the lessee thereunder. Sublessee shall not take, or fail to take, any action
that that if taken or not taken by the Sublessor as "Tenant" under the Master
Lease would constitute a default by Sublessor as "Tenant" under the Master
Lease, and Sublessee shall indemnify and hold Sublessor harmless from and
against all claims whatsoever by reason of any such action or failure to act by
Sublessee; provided, however the foregoing shall in no event apply in connection
with Sublessees' failure to pay Rent hereunder, the remedies for which are
provided in Section 12.2 above.
ARTICLE IX
MISCELLANEOUS
14.1 Notices. All notices, certificates, or other communications hereunder
shall be sufficiently given and shall be deemed given when mailed by registered
or certified mail, postage prepaid, return receipt requested, addressed to
Sublessee, or the Sublessor, as the case may be, at their respective addresses
as shown in the preamble to this Sublease, or hand delivered to the parties at
their respective addresses. Sublessor and Sublessee may by notice designate any
further or different addresses to which subsequent notices, certificates, or
communications shall be sent.
14.2 Amendment. No amendment to this Sublease shall be binding upon either
party hereto until such amendment is in writing and executed by both parties
thereto.
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14.3 Entire Agreement. This Sublease contains all agreements between the
parties and there are no other representations, warranties, promises,
agreements, or understandings, oral, written or inferred, between the parties,
unless reference is made thereto in this Sublease.
14.4 Binding Effect. This Sublease shall be binding upon the parties
hereto and upon their respective successors and assigns, and the words
"Sublessor" and "Sublessee" shall include the parties hereto and their
respective successors and assigns.
14.5 Severability. If any clause, provision, or section of this Sublease
be ruled invalid or unenforceable by any court of competent jurisdiction, the
invalidity or unenforceability of such clause, provision, or section shall not
affect any of the remaining clauses, provisions, or sections.
14.6 Captions. The captions or headings in this Sublease are for
convenience of reference only and in no way define, limit, or describe the scope
or intent of any provisions of this Sublease.
14.7 Governing Law. This Sublease shall be governed by and construed in
accordance with the laws of the State of North Carolina.
IN WITNESS WHEREOF, the parties hereto have caused this Sublease to be
duly executed on the day and year first above written.
SUBLESSOR:
PEOPLES SECURITY LIFE INSURANCE COMPANY
By: /s/ [ILLEGIBLE]
--------------------------------------
Its:
-------------------------------------
Date Executed:
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SUBLESSEE
MIDWAY AIRLINES CORPORATION
By: /s/ Xxxxxxxx X. Xxxxxx
--------------------------------------
Its: Senior Vice President
Date Executed: August 21, 1995
Date:
THIS SUBLEASE IS ACKNOWLEDGED AND CONSENTED TO BY PRIME LANDLORD ON THIS 30 DAY
OF JUNE, 1995.
DCV Limited Partnership, a North Carolina limited partnership
By: DCV Property Company, general partner
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------
Xxxxxxx X. Xxxxx, Vice President
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