EXHIBIT
10.38
EXECUTION COPY
SUB-LEASE
THIS SUBLEASE is made and entered into by and between Cohen
Brothers of Lexington, Inc., a Kentucky corporation, located at 740
Rockcastle Avenue, Lexington, Kentucky 40505 (the "Sublessee") and
Industrial Services of America, Inc., a Florida corporation,
located at 7100 Grade Lane, Building 1, Louisville, KY 40213 (the
"Sublessor").
WITNESSETH :
1.
TERM - The Term of the Sublease shall commence on March 1,
2007 and continue
through January 31, 2012 (the
"Term").
2.
DESCRIPTION OF PREMISES - The premises subject to this
Sublease consists of the premises generally described as "1 1/2
acres of 1-2 zoned land" located at 1400 Cahill Drive, located in
Lexington Kentucky as outlined on Exhibit "A" attached hereto and
by reference made a part hereof (hereinafter referred to as the
"Premises")
3.
[Intentionally Deleted] .
4.
USE OF PREMISES - The Premises shall be used and occupied by
Sublessee as a scrap metal processing facility, as well as any and
all lawful uses related thereto. Sublessee agrees to abide by
all applicable zoning regulations and not to commit or suffer
waste; to operate in a safe/sound manner and abide by all EPA and
OSHA laws, not to assign this lease, sublet or underlet the
Premises or any part thereof, or permit the sale of the interest
therein by legal process, without the written consent of the
Sublessor. Any licenses or permits necessary for Sublessee to
operate its business on the Premises will be procured at the
Sublessee's expense. The Sublessee may not occupy or use the
Premises for any other purpose without the written consent of the
Sublessor. Sublessee shall obey, observe and promptly comply
with all valid present and future laws, ordinances, rules,
regulations, orders and requirements of the United States of
America, the Commonwealth of Kentucky, the City of Lexington,
Kentucky, and of any or all governmental authorities or agencies
having authority over said Premises and the occupancy
thereof. Sublessee shall not use the Premises or permit same
to be used for any unlawful or illegal purpose. Sublessee
will not do, nor permit anything to be done, in, upon, or about the
subleased Premises that increases the fire hazard beyond that which
will exist by reason of the ordinary use or occupancy of the
Premises set forth above. Sublessee will not do or permit to
be done anything in, about or upon the subleased Premises that
interferes with the rights of, or tends to annoy, other Sublessees
of Sublessor; that conflict with the regulations of the Fire
Department or Board of Health; that creates a nuisance; or that is
dangerous to persons or property. Sublessee shall not use nor
permit to be used on the Premises anything that will invalidate any
policies of insurance which may now or hereafter be carried on said
Premises or increase the rate of insurance thereon; and any
increase in insurance premiums on said Premises which may be caused
by the use made thereof by Sublessee shall be paid by
Sublessee.
5.
ACCESS TO PREMISES - During the Term, access to the property
by the Sublessee shall be limited to the regular hours of operation
of the Sublessor unless Sublessor otherwise expressly grants
approval. Sublessor and its duly authorized agents,
employees, officers and independent contractors shall have access
to the Premises during normal business hours for the purposes of
ascertaining that Sublessee is carrying out the terms, conditions
and provisions hereof, and to properly make any necessary repairs,
improvements and alterations by reason of Sublessee's default under
the terms of this Lease or otherwise.
6.
RENT -
The rent for use of the Premises during the Term shall be four
thousand five hundred ($4,500) dollars per month.
Notwithstanding anything to the contrary contained elsewhere in
this Agreement, the Sublessor hereby waives the payment of rent for
the first month of this sub-lease (i.e. March 1st, 2007 through
March 31st, 2007).
Monthly rental payments shall be due and payable on the first day
of each and every month. In the event a monthly rent payment
is paid after the fifth day of a month, such payment shall be
deemed late and shall be subject to a 5% late fee (i.e., 5% of the
monthly rent payment) payable along with such payment.
7.
SECURITY DEPOSIT - Intentionally Deleted.
8.
SUBJECT TO OVERLEASE - This Sublease is subject to an
Overlease (the "Overlease") entered into on February 15, 2005
between the Sublessor and the Landlord, C & R Asphalt
("Landlord"). The Sublessee hereby acknowledges that it has
read and agrees to be bound by the terms of the Overlease.
Sublessee acknowledges that this Sublease is contingent on the
continuation of the Overlease.
9.
OVERTENANT'S DUTIES - The Overlease describes the Landlord's
duties. The Sublessee, as a third party beneficiary of the
Overlease, shall have right to enforce the terms of the Overlease
in the event the Sublessor fails to enforce its rights under the
Overlease. Such right shall be subject to Sublessee providing
notice to the Sublessor of the default specifying the particulars
of such default; and further subject to a thirty (30) day period
for the Sublessor to cure such default.
10.
QUIET ENJOYMENT AND TITLE - The Sublessor covenants,
warrants and represents that it has full right and power to execute
and perform the Sublease and this agreement and to grant the estate
demised herein, and covenants that the Sublessee, on paying the
rent herein and performing the covenants and agreements hereof,
shall peaceably and quietly have, hold and enjoy the Premises and
all rights, easements, appurtenances and privileges belonging or in
anyway appertaining thereto, during the term of the Sublease and
any extension or renewal thereof.
11.
IMPROVEMENTS - Sublessee acknowledges that it is renting the
Premises in an "as is" condition and shall provide all improvements
that it deems necessary or desirable, provided, however, that no
material improvements shall be made to the Premises without
Sublessor's prior written consent. In the event Sublessee
desires to make a material improvement, Sublessee shall submit a
plan to Sublessor outlining such proposed change at least thirty
(30) days prior to any proposed construction. If said plans
are acceptable to the Sublessor, written consent will be given to
the Sublessee. Any permission given by the Sublessor to make
structural changes or alterations shall be on the condition that
the work shall be at Sublessee's expense, unless otherwise agreed
in writing, and shall be in accordance with the building code and
zoning laws of the Lexington Metro. All necessary approvals,
consents, and licenses necessary to perform the proposed
improvements shall be the responsibility of the Sublessee,
performed at the co