EXHIBIT (BB)
THIRD TIER SUBLEASE
BETWEEN,
UNITEL VIDEO, INC.,
AS THIRD TIER SUBLESSOR
AND
DIGITAL UNIVERSE II, INC.
AS THIRD TIER SUBLESSEE
PREMISES: A PORTION OF THE 9TH FLOOR
217 - 223 EAST 43RD STREET/
214 - 226 EAST 44TH STREET
NEW YORK, NEW YORK
THIRD TIER SUBLEASE
THIRD TIER SUBLEASE (this "SUB-SUBLEASE"), dated as of November 22,
1996, between UNITEL VIDEO, INC., a Delaware corporation ("THIRD TIER
SUBLESSOR") having an office at 555 West 57th Street, New York, New York 10019,
Attention: President, and DIGITAL UNIVERSE II, INC., a New York corporation
("THIRD TIER SUBLESSEE") having an office at 219 East 44th Street, New York, New
York 10017, Attention: President.
W I T N E S S E T H:
WHEREAS, by Agreement of Lease, dated as of January 1, 1959, between
Webb & Knapp, Inc. and Carl E. Siegesmund, as landlord, and 43rd St. Estates
Corp. ("PRIME SUBLESSOR"), as tenant, as modified by a letter agreement, dated
August 16, 1961, between Greenpoint Terminal Warehouse, Inc. ("GROUNDLESSOR";
successor by conveyance from Webb & Knapp, Inc. and Carl E. Siegesmund) and
Prime Sublessor, as modified by a Modification of Lease, dated as of
September 13, 1961, between Groundlessor and Prime Sublessor, as modified by a
Modification of Lease, dated as of December 20, 1961, between Groundlessor and
Prime Sublessor, as modified (along with a related lease) by an Agreement, dated
January 23, 1963, among Groundlessor, Prime Sublessor and URN Realty Corp., as
modified (along with a related lease) by an Agreement, dated January 29, 1964,
among Groundlessor, Prime Sublessor and URN Realty Corp., and as modified by
Agreement, dated May 10, 1966, among Groundlessor, Prime Sublessor, and Victor
Whitehorn, as leasehold mortgagee (such Agreement of Lease, as so modified, is
the "MAJOR GROUND LEASE");
WHEREAS, by Agreement of Lease, dated November 5, 1986, between Prime
Sublessor, as landlord, and Micor, Inc., as tenant, (such Agreement of Lease, is
the "PRIME SUBLEASE");
WHEREAS, by Sublease Agreement, dated April 1, 1987, between R.E.
Graphics, Inc. (Formerly known as Micor, Inc.) ("Sub-sublessor"), as landlord,
and Scanline Communications, a Wisconsin partnership, as tenant, as modified by
a Modification dated February, 1989, between landlord and tenant, as assigned
and assumed pursuant to an Assignment, Assumption and Acceptance of Lease, dated
as of May 5, 1992, between Scanline Communications and Third Tier Sublessor
(such Sublease Agreement, as so assigned, assumed, extended and modified, is the
"SUB-SUBLEASE"), Sub-sublessor leased to Third Tier Sublessor approximately
7,700 square feet consisting of the entire ninth floor in the building
("BUILDING") known as and located at 217-223 East 43rd Street/214-226 East
44th Street, New York, New York; and
WHEREAS, Third Tier Sublessor desires to sublet to Third Tier
Sublessee, and Third Tier Sublessee desires to hire from Third Tier Sublessor, a
portion of the premises demised under the Sublease upon the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
provided, Third Tier Sublessor and Third Tier Sublessee hereby agree as follows:
1. DEMISED PREMISES.
1.01 Third Tier Sublessor hereby sublets to Third Tier Sublessee,
and Third Tier Sublessee hereby sublets and hires from Third Tier Sublessor, the
premises (the "PREMISES") comprising a portion of the 9th Floor (comprising
approximately 5,720 square feet) in the Building as designated by cross-hatching
on the floor plan annexed to this Third Tier Sublease as EXHIBIT A and hereby
incorporated in and made a part of this Third Tier Sublease by reference, for
the term hereinafter stated and for the Rent hereinafter reserved (as
hereinafter defined), subject to all of the terms and provisions hereinafter
provided or incorporated in this Third Tier Sublease by reference.
1.02 Third Tier Sublessee agrees to accept the Premises on the
Commencement Date (as hereinafter defined) in its then condition and Third Tier
Sublessor shall not be obligated to perform any work or furnish any materials
in, to or about the Premises in order to prepare the Premises for occupancy by
Third Tier Sublessee or otherwise. Third Tier Sublessee hereby releases Third
Tier Sublessor from any and all liability resulting from (A) any latent or
patent defects in the Premises, (B) the failure of the Premises to comply with
any legal requirements applicable thereto or (C) the status of the title to the
Premises. Third Tier Sublessee acknowledges that Third Tier Sublessor has made
no statements, representations, covenants or warranties with respect to (x) the
condition or manner of construction of the Building or any improvements
constructed in the Premises, (y) the uses or purposes for which the Premises may
be lawfully occupied, or (z) any encumbrances, covenants, restrictions or
agreements affecting title to the Premises. Third Tier Sublessee also agrees
that, in executing this Third Tier Sublease, it has not relied upon or been
induced by any statements, representations, covenants or warranties of any
person other than those, if any, set forth expressly in this Third Tier
Sublease. Third Tier Sublessee has relied solely on such statements,
representations, covenants and warranties as are expressly made herein and on
such investigations, examinations and inspections as Third Tier Sublessee has
chosen to make or has made.
1.03 Third Tier Sublessor represents and warrants to Third Tier
Sublessee that (A) the Sub-Sublease is in full force and effect and a true copy
of the most recent rent bill relating to the premises of which the Premises is a
part is attached as a part of Exhibit B-3, (B) to Third Tier Sublessor's
knowledge (i) Third Tier Sublessor and Sub-sublessor are not in default under
the Sub-sublease, (ii) no condition exists which, with the passage of time, or
the giving of notice, or both, would constitute a default under the Sub-sublease
and (iii) the Major Ground Lease and the Prime Sublease are in full force and
effect, no party is in default under the Mayor Ground Lease or the Prime
Sublease and no condition exists which, with the passage of time, or the giving
of notice, or both, would constitute a default under the Mayor Ground Lease or
the Prime Sublease and (C) basic rent under the Sub-sublease is $14,116.67 per
month through March 31, 1997 and $15,400.00 per month from April 1, 1997 through
December 31, 1999.
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1.04 Any and all alterations to, work to be performed in or
materials to be supplied for the Premises shall be made, performed and supplied
at the sole cost and expense of Third Tier Sublessee and in conformance with all
of the terms and provisions of this Third Tier Sublease, the Major Ground Lease,
the Prime Sublease and the Sub-sublease.
2. TERM.
2.01 The term ("TERM") of this Third Tier Sublease shall commence
November 22, 1996 ("COMMENCEMENT DATE") and, unless earlier terminated as herein
provided, shall expire on December 30, 1999 ("EXPIRATION DATE").
Notwithstanding the foregoing, if prior to the Commencement Date Third Tier
Sublessee takes possession of or causes the commencement of any work or the
moving of any property in, into or about the Premises, the date upon which Third
Tier Sublessee took or caused to be taken any such action shall be deemed to be
the Commencement Date under this Third Tier Sublease.
2.02 Third Tier Sublessor and Third Tier Sublessee shall, upon the
request of either of them, execute a statement prepared by Third Tier Sublessor,
in recordable form, setting forth the Commencement Date.
2.03 Except as otherwise provided in paragraph 2.03.1, if the term
of the Sub-sublease is terminated for any reason prior to the Expiration Date,
this Third Tier Sublease shall thereupon be terminated ipso facto without any
liability of Third Tier Sublessor to Third Tier Sublessee by reason of such
early termination. References in this Third Tier Sublease to the "termination"
of this Third Tier Sublease include the stated expiration of the Term and any
earlier termination thereof pursuant to the provisions of this Third Tier
Sublease, the Major Ground Lease, the Prime Sublease, the Sub-sublease or by
law. Except as otherwise expressly provided in this Third Tier Sublease with
respect to those obligations of Third Tier Sublessee which by their nature or
under the circumstances can only be, or under the provisions of this Third Tier
Sublease may be, performed after the termination of this Third Tier Sublease,
the Term and estate granted hereby shall end at noon on the date of termination
of this Third Tier Sublease as if such date were the Expiration Date, and
neither party shall have any further obligation or liability to the other after
such termination. Notwithstanding the foregoing, any liability of Third Tier
Sublessee to make any payment under this Third Tier Sublease, whether of Fixed
Rent, Additional Rent (both as hereinafter defined) or otherwise, which shall
have accrued prior to the termination of this Third Tier Sublease, shall survive
the termination of this Third Tier Sublease.
2.03.1 Third Tier Sublessor shall not amend or cancel the Major
Ground Lease, the Prime Sublease or the Sub-sublease or breach any provision of
any of such leases (which breach is not caused by any breach by Third Tier
Sublessee hereunder) and Third Tier Sublessor shall
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continue to pay rent and additional rent required to be paid by Third Tier
Sublessor thereunder. If Third Tier Sublessor shall fail to pay any rent or
additional rent required to be paid by Third Tier Sublessor under any of the
Major Ground Lease, Prime Sublease or Sub-sublease other than any rent or
additional rent that Third Tier Sublessee has failed to pay to Third Tier
Sublessor under this Third Tier Sublease, it shall be a breach of this Third
Tier Sublease.
2.04 Third Tier Sublessee waives the right to recover any damages
which may result from Third Tier Sublessor's failure to deliver possession of
the Premises on the Commencement Date. If Third Tier Sublessor shall be unable
to give possession of the Premises on the Commencement Date, and provided Third
Tier Sublessee is not responsible for such inability to give possession, the
applicable Fixed Rent and Additional Rent reserved and covenanted to be paid
herein shall not commence until the date on which Third Tier Sublessor shall be
able to give possession of the Premises to Third Tier Sublessee, and no such
failure to give possession on such scheduled date shall in any wise affect the
validity of this Third Tier Sublease or the obligations of Third Tier Sublessee
hereunder or give rise to any claim for damages by Third Tier Sublessee or claim
for rescission of this Third Tier Sublease, nor shall the same in any way be
construed to extend the Term. If permission is given to Third Tier Sublessee to
enter into the possession of the Premises, Third Tier Sublessee covenants and
agrees that such occupancy shall be deemed to be under all the terms, covenants,
conditions and provisions of this Third Tier Sublease, including the covenant to
pay Rent.
2.05 The parties agree that this Article 2 constitutes an express
provision as to the time at which Third Tier Sublessor shall deliver possession
of the Premises to Third Tier Sublessee, and Third Tier Sublessee hereby waives
any rights to rescind this Third Tier Sublease which Third Tier Sublessee might
otherwise have pursuant to Section 223-a of the Real Property Law of the State
of New York or any other law of like import now or hereafter in force.
2.06 Third Tier Sublessee shall have the option (the "Renewal
Option") to extend the term of this Third Tier Sublease for one additional
period commencing on December 31, 1999 and ending on November 30, 2012
(the "Renewal Term"), provided that (a) this Third Tier Sublease shall not
have been previously terminated, (b) no Event of Default shall have occurred
and be continuing (x) on the date Third Tier Sublessee gives Third Tier
Sublessor written notice (the "Renewal Notice") of Third Tier Sublessee's
election to exercise the Renewal Option, and (y) on the Expiration Date, (c) at
Third Tier Sublessor's request, Third Tier Sublessee shall cause Sub-Sublessor
to (x) permit Third Tier Sublessor to assign its entire interest in the
Sub-sublease to Third Tier Sublessee and Third Tier Sublessee shall assume Third
Tier Sublessor's obligations under the Sub-sublease, the Prime Sublease and the
Major Ground Lease and (y) fully and completely release Third Tier Sublessor
from its obligations under this Third Tier Sublease, the Sub-sublease, the Prime
Sublease and the Major Ground Lease whereupon this Third Tier Sublease shall be
of no further force and effect, (d) at Third Tier Sublessor's request, Third
Tier Sublessee shall assume Third Tier Sublessor's obligations to EUE Screen
Gems ("EUE") with respect to any space on the
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9th floor (the "EUE Space") of the Building and obtain the complete release
of Third Tier Sublessor with respect to any such space and (e) all of the
conditions to the exercise of the Renewal Option under the Sub-sublease shall
have been complied with or otherwise satisfied. With respect to items (c)
and (d) of this paragraph 2.06, it is the agreement of the parties that at
Third Tier Sublessor's option, Third Tier Sublessee may only exercise the
Renewal Option if it is able to secure the full and complete release of Third
Tier Sublessor from its obligations under this Third Tier Sublease, the
Sub-Sublease, the Prime Sublease, the Major Ground Lease and otherwise with
respect to the entire 9th floor in the Building. The renewal option shall be
exercisable by Third Tier Sublessee delivering the Renewal Notice to Third
Tier Sublessor not later than February 1, 1999 and not earlier than December 1,
1998. Time is of the essence with respect to the giving of the Renewal Notice.
The Renewal Option may be exercised only once. If Third Tier Sublessee
exercises the Renewal Option, the Fixed Rent during the Renewal Term shall be
as provided in the Sub-sublease and the Renewal Term shall otherwise be on
the same terms, covenants and conditions as those contained in this Third
Tier Sublease, modified to reflect any increase in the size of the Premises
resulting from any assumption of the EUE Space. Notwithstanding anything in
this paragraph 2.06 to the contrary, the Renewal Option is subject to all
other conditions to the exercise of the renewal option in the Sub-sublease.
3. RENT.
3.01 The rent ("RENT") reserved for the Term under this Third Tier
Sublease shall consist of the following:
(i) annual fixed rent ("FIXED RENT") in the amount of (A) One
Hundred Twenty-Five Thousand Three Hundred Fifty Six and 08/100 ($125,356.08)
Dollars for the period beginning on the Commencement Date and ending on
March 31, 1997, and (B) One Hundred Thirty-Six Thousand Seven Hundred Fifty-two
($136,752.00) Dollars for the period beginning on April 1, 1997 and ending on
December 30, 1999, which shall be payable in advance, in equal monthly
installments of, respectively, $10,446.34 and $11,396.00 each. The first
installment of Fixed Rent shall be payable by Third Tier Sublessee upon the
execution of this Third Tier Sublease and the second and subsequent installments
shall be payable on the first (1st) day of the first month following the
Commencement Date and subsequent months, respectively, of the Term. If the
Commencement Date shall be a date other than the first day of a calendar month,
the second installment of Fixed Rent (but no other installment) payable by Third
Tier Sublessee hereunder shall be reduced to an amount which bears the same
ratio to the first installment of Fixed Rent payable hereunder as the number of
days from and including the Commencement Date to the end of the calendar month
in which the Commencement Date occurs bears to the total number of days in such
calendar month; and
(ii) additional rent ("ADDITIONAL RENT") in an amount equal to
the sum of (A) 74%, of any and all sums of money, other than the annual fixed
rental ("UNDERLYING FIXED
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RENT") under the Sub-sublease, which is or may become payable by Third Tier
Sublessor to Sub-sublessor under the Sub-sublease ("UNDERLYING ADDITIONAL
RENT"); (B) any and all other sums payable by Third Tier Sublessee to Third
Tier Sublessor hereunder; and (C) any and all charges of Sub-sublessor under
the Sub-sublease or of any other third party for overtime, additional
services or any other matter relating to the Premises, or arising out of
Third Tier Sublessee's failure to perform its obligations hereunder.
Additional Rent shall be payable by Third Tier Sublessee on the date
fifteen (15) days before the date on which the corresponding Underlying
Additional Rent is payable to Sub-sublessor under the Sub-sublease. All other
Additional Rent shall be payable upon demand. Third Tier Sublessor shall
have the same remedies with respect to any default by Third Tier Sublessee in
the payment of Additional Rent as are provided in this Third Tier Sublease,
the Sub-sublease or applicable law with respect to any nonpayment of rent.
(iii) Anything in paragraphs 3.01(i) and 3.01(ii)
notwithstanding, the obligation of Third Tier Sublessee to pay Fixed Rent or any
Additional Rent in respect of Taxes (as defined in the Sub-sublease) shall begin
on January 1, 1997, it being the intent of Third Tier Sublessor and Third Tier
Sublessee that Third Tier Sublessor waives the right to collect rent and
additional rent in respect of Taxes due for the period from the Commencement
Date through December 31, 1996.
3.02 The Fixed Rent and, except as otherwise specifically provided
in this Third Tier Sublease, the Additional Rent, shall be paid by Third Tier
Sublessee at the office of Third Tier Sublessor set forth above or such other
place as Third Tier Sublessor may designate, without prior notice or demand
therefor and without any abatement, deduction or setoff. Third Tier Sublessor
may at any time and from time to time by notice direct Third Tier Sublessee to
pay all or any portion of the Fixed Rent or Additional Rent on Third Tier
Sublessor's behalf directly to the Sub-sublessor at such address as Third Tier
Sublessor may at any time and from time to time direct.
3.03 Third Tier Sublessee shall pay all Rent when due, in lawful
money of the United States which shall be legal tender for the payment of all
debts, public and private, at the time of payment. All sums due and payable as
Rent shall from and after the due date bear interest at four percent (4%) above
the base rate charged by Citibank, N.A. (or any successor thereto) ("PRIME
RATE"), from time to time, but in no event in excess of the maximum legal rate
of interest permitted from time to time under law to be charged, provided,
however, that no further interest shall be payable upon such interest. All
interest accrued under this subsection as hereinabove provided shall be deemed
to be Additional Rent payable hereunder and due at such time or times as the
Rent with respect to which such interest shall have accrued shall be payable
under this Third Tier Sublease.
3.04 If all or any portion of the Rent shall be or become
uncollectible, reduced, or required to be refunded because of any Legal
Requirements (as herein defined), Third Tier Sublessee shall enter into such
agreement(s) and take such other steps (without additional expense to Third Tier
Sublessee) as Third Tier Sublessor may request and as may be legally permissible
to
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permit Third Tier Sublessor to collect the maximum Rent which from time to
time during the continuance of such legal rent restriction may be legally
permissible (and not in excess of the amounts reserved therefor under this
Third Tier Sublease). Upon the termination of such legal rent restriction,
(i) the Rent shall become and thereafter be payable in accordance with the
amounts reserved herein for the periods following such termination, and
(ii) Third Tier Sublessee shall pay to Third Tier Sublessor, to the maximum
extent legally permissible, an amount equal to (A) the Rent which would have
been paid pursuant to this Third Tier Sublease but for such legal rent
restriction, less (B) the Rent paid by Third Tier Sublessee during the period
such legal rent restriction was in effect.
3.05 Third Tier Sublessee acknowledges that the late payment by
Third Tier Sublessee to Third Tier Sublessor of Rent and other sums due
hereunder and the failure to deliver on time items required to be delivered will
cause Third Tier Sublessor to incur costs not contemplated by this Third Tier
Sublease, the exact amount of which will be extremely difficult to ascertain.
Such costs may include, but are not limited to, administrative, processing and
accounting charges, and late charges which may be imposed on Third Tier
Sublessor. Accordingly, if any sum due from Third Tier Sublessee or any item due
from Third Tier Sublessee hereunder shall not be received by Third Tier
Sublessor or Third Tier Sublessor's designee within five (5) days after the date
due, Third Tier Sublessee shall pay to Third Tier Sublessor, in addition to any
interest on delinquent amounts provided above, a late charge equal to the
greater of two percent (2%) of the delinquent amount or $100.00, as liquidated
damages. The parties agree that such late charge represents a fair and
reasonable estimate of the costs Third Tier Sublessor will incur by reason of
late payment or late delivery by Third Tier Sublessee. Acceptance of such late
charge shall not constitute a waiver of Third Tier Sublessee's default with
respect to such overdue amount or other item, nor prevent Third Tier Sublessor
from exercising any other rights and remedies granted hereunder or by law to
Third Tier Sublessor.
4. USE.
4.01 Third Tier Sublessee shall occupy and use the Premises only for
such purposes as are permitted under the terms and provisions of the Sub-
sublease and for no other purpose, and in all respects only as permitted under
the terms and provisions of this Third Tier Sublease, the Major Ground Lease and
the Prime Sublease, including, without limiting the generality of the foregoing,
the rules and regulations, if any, under the Major Ground Lease, the Prime
Sublease, the Sub-sublease, and any and all laws, statutes, ordinances, orders,
regulations and requirements of all federal, state and local governmental,
public or quasi-public authorities, whether now or hereafter in effect, which
may be applicable to or in any way affect the Building or the Premises or any
part thereof and all requirements, obligations and conditions of all instruments
of record on the date of this Third Tier Sublease affecting the Building or the
Premises (collectively, "LEGAL REQUIREMENTS").
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4.02 Third Tier Sublessee shall not, without the prior consent of
Third Tier Sublessor, Sub-sublessor, Prime Sublessor and Groundlessor do or
permit anything to be done which may result in a violation of the terms of this
Third Tier Sublease, the Sub-sublease, the Prime Sublease or the Major Ground
Lease or which may make Third Tier Sublessor liable for any damages, claims,
fines, penalties, costs or expenses thereunder.
5. MAJOR GROUND LEASE, PRIME SUBLEASE AND SUB-SUBLEASE.
5.01 This Third Tier Sublease and all of Third Tier Sublessee's
rights hereunder are and shall remain in all respects subject and subordinate to
(i) all of the terms and provisions of the Major Ground Lease, the Prime
Sublease and the Sub-sublease, substantially true and complete copies of which
have been delivered to and carefully examined by Third Tier Sublessee and are
attached hereto as, respectively, EXHIBIT B-1, EXHIBIT B-2 and EXHIBIT B-3,
(ii) any and all amendments to the Major Ground Lease, the Prime Sublease and
the Sub-sublease, or supplemental agreements relating to any of the same
hereafter made, except for any such amendments to or supplemental agreements
relating to the Sub-sublease between Sub-sublessor and Third Tier Sublessor
which contravene any express rights granted to Third Tier Sublessee hereunder,
and (iii) any and all matters to which the tenancy of Third Tier Sublessor, as
tenant under the Sub-sublease, is or may be subordinate. Third Tier Sublessee
shall in no case have any rights under this Third Tier Sublease greater than
Third Tier Sublessor's rights as tenant under the Sub-sublease. The foregoing
provisions shall be self-operative and no further instrument of subordination
shall be necessary to effectuate such provisions unless required by
Groundlessor, Prime Sublessor, Sub-sublessor or Third Tier Sublessor, in which
event Third Tier Sublessee shall, upon demand by Groundlessor, Prime Sublessor,
Sub-sublessor or Third Tier Sublessor at any time and from time to time,
execute, acknowledge and deliver to Third Tier Sublessor, Sub-sublessor, Prime
Sublessor and Groundlessor any and all instruments that Third Tier Sublessor,
Sub-sublessor, Prime Sublessor or Groundlessor, in the sole discretion of any of
them, may deem necessary or proper to confirm such subordination of this Third
Tier Sublease, and the rights of Third Tier Sublessee hereunder. If Third Tier
Sublessee shall fail to execute, acknowledge and/or deliver any such instrument
of subordination within ten (10) days after Groundlessor's, Prime Sublessor's,
Sub-sublessor's or Third Tier Sublessor's demand therefor, Third Tier Sublessor,
in addition to any other remedies provided under this Third Tier Sublease, the
Sub-sublease, the Prime Sublease, the Major Ground Lease and applicable law, may
execute, acknowledge and deliver such instrument, as Third Tier Sublessee's
attorney-in-fact. Third Tier Sublessee hereby irrevocably constitutes and
appoints Third Tier Sublessor as Third Tier Sublessee's proper and lawful
attorney-in-fact for such purpose, such appointment being coupled with an
interest.
5.02 Third Tier Sublessee shall observe and perform, (i) for the
benefit of Sub-sublessor and Third Tier Sublessor, each and every term,
covenant, condition and agreement of the Sub-sublease, which Third Tier
Sublessor is required to observe or perform with respect to the
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Premises as tenant under the Sub-sublease, except for the covenants of Third
Tier Sublessor to pay Sub-sublessor the Underlying Fixed Rent and Underlying
Additional Rent, (ii) for the benefit of Prime Sublessor, Sub-sublessor and
Third Tier Sublessor, each and every term, covenant, condition and agreement
of the Prime Sublease which Third Tier Sublessor is required to observe or
perform with respect to the Premises as tenant under the Sub-sublease and
(iii) for the benefit of Groundlessor, Prime Sublessor, Sub-sublessor and
Third Tier Sublessor, each and every term, covenant, condition and agreement
of the Major Ground Lease which Third Tier Sublessor is required to observe
or perform with respect to the Premises as tenant under the Sub-sublease.
Except as otherwise specifically provided in this Third Tier Sublease, all of
the terms, covenants, conditions and agreements which Third Tier Sublessor is
required to observe or perform with respect to the Premises under the Major
Ground Lease, the Prime Sublease and the Sub-sublease are hereby incorporated
herein by reference and deemed to constitute terms, covenants, conditions and
agreements which Third Tier Sublessee is required to observe and perform
under this Third Tier Sublease as if set forth herein at length, mutatis
mutandis; Third Tier Sublessor may exercise and shall be entitled to all of
the rights, powers, privileges and remedies reserved to (x) Groundlessor
under the Major Ground Lease, (y) Prime Sublessor under the Prime Sublease
and (z) Sub-sublessor under the Sub-sublease to the same extent as if fully
set forth herein at length, including, without limitation, all releases from
liability to, respectively, Groundlessor, Prime Sublessor and Sub-sublessor
thereunder and all rights and remedies arising out of, or with respect to,
any default by Third Tier Sublessee in payment of Rent hereunder or the
observance or performance of the terms, covenants, conditions and agreements
of this Third Tier Sublease, the Sub-sublease, the Prime Sublease and the
Major Ground Lease (except as specifically provided herein). Notwithstanding
the foregoing, any inconsistencies between the terms of this Third Tier
Sublease, the Sub-sublease, the Prime Sublease and the Major Ground Lease
which shall result from the foregoing incorporation shall be resolved in
favor of this Third Tier Sublease, provided, however, that if such
construction of terms would cause Third Tier Sublessor to be in default under
the terms of the Sub-sublease, the Prime Sublease and/or the Major Ground
Lease, then such inconsistency shall be resolved in favor of the superior
lease out of the Sub-sublease, the Prime Sublease and the Major Ground Lease
under which Third Tier Sublessor would be in default by such construction of
terms.
5.03 Third Tier Sublessee hereby assumes Third Tier Sublessor's
obligations to perform and makes itself personally liable to Sub-sublessor,
Prime Sublessor and Groundlessor for the performance of, all of the terms,
covenants, conditions and agreements to be performed or observed during the Term
on the part of Third Tier Sublessor under, respectively, the Sub-sublease, the
Prime Sublease and the Major Ground Lease with respect to the Premises, except
as herein provided. Third Tier Sublessee shall, promptly upon the request of
Third Tier Sublessor, Sub-sublessor, Prime Sublessor and/or Groundlessor,
execute, acknowledge and deliver to Third Tier Sublessor, Sub-sublessor, Prime
Sublessor and/or Groundlessor, as the case may be, an instrument confirming the
foregoing undertaking in form and content satisfactory to the party or parties
making such request in form suitable for recording.
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5.04 Nothing contained in this Article 5 is intended or shall be
construed to confer upon Third Tier Sublessee any rights, powers, privileges or
remedies which are not specifically conferred upon Third Tier Sublessee under
the terms and provisions of this Third Tier Sublease, and, unless specifically
provided otherwise herein, none of the rights, powers, privileges or remedies of
(x) Third Tier Sublessor as tenant under the Sub-sublease, (y) Sub-sublessor as
tenant under the Prime Sublease, and (z) Prime Sublessor as tenant under the
Major Ground Lease shall inure to the benefit of Third Tier Sublessee hereunder.
5.05 If Third Tier Sublessee shall at any time fail to make any
payment or perform any act on its part to be made or performed hereunder, then
Third Tier Sublessor, after two (2) days' notice to Third Tier Sublessee (or, in
case of any emergency, on such notice, or without notice, as may be reasonable
under the circumstances) and without waiving, or releasing Third Tier Sublessee
from, any obligation of Third Tier Sublessee hereunder, may (but shall not be
required to) make any payment or perform any act on Third Tier Sublessee's part
to be made or performed as in this Third Tier Sublease provided, and may enter
upon the Premises for the purpose thereof and take all such action thereon as
may be necessary therefor. Third Tier Sublessee shall pay to Third Tier
Sublessor, upon demand, the amount of all costs and expenses incurred by Third
Tier Sublessor in the payment or performance of any such obligations of Third
Tier Sublessee.
6. SERVICE.
6.01 Except as otherwise specifically provided in this Third Tier
Sublease, Third Tier Sublessee shall be entitled during the Term to receive all
services, utilities, repairs and facilities which (x) Sub-sublessor is required
to provide pursuant to the Sub-sublease, (y) Prime Sublessor is required to
provide pursuant to the Prime Sublease and (z) Groundlessor is required to
provide pursuant to the Major Ground Lease, insofar as such services, utilities,
repairs and facilities pertain to the Premises. Third Tier Sublessor shall have
no liability of any nature whatsoever to Third Tier Sublessee as a consequence
of the failure or delay on the part of (x) Sub-sublessor in performing any or
all of its obligations under the Sub-sublease, (y) Prime Sublessor in performing
any or all of its obligations under the Prime Sublease and (z) Groundlessor in
performing any or all of its obligations under the Major Ground Lease,
including, without limiting the generality of the foregoing, any action or
omission by, respectively, Sub-sublessor, Prime Sublessor and/or Groundlessor
which results in a breach of the covenant of quiet enjoyment set forth in,
respectively, the Sub-sublease, the Prime Sublease and/or the Major Ground
Lease, and, under no circumstances shall Third Tier Sublessee have any right to
require or obtain the performance by Third Tier Sublessor of any obligations of
Sub-sublessor, Prime Sublessor and/or Groundlessor under, respectively, the Sub-
sublease, the Prime Sublease and/or the Major Ground Lease or otherwise. Third
Tier Sublessee's obligations under this Third Tier Sublease shall not be
impaired, nor shall the performance thereof be excused, because of any failure
or delay on the part of Sub-sublessor,
10
Prime Sublessor and/or Groundlessor in performing its obligations under,
respectively, the Sub-sublease, the Prime Sublease and/or the Major Ground
Lease.
6.02 If at any time during the Term (x) Sub-sublessor shall default
in any of its obligations under the Sub-sublease, (y) Prime Sublessor shall
default in any of its obligations under the Prime Sublease or (z) Groundlessor
shall default in any of its obligations under the Major Ground Lease, to furnish
facilities, services or utilities or to make repairs to the Premises, then, upon
Third Tier Sublessor's receipt of a written notice from Third Tier Sublessee
specifying such default, Third Tier Sublessor shall, at Third Tier Sublessee's
sole cost and expense, use its reasonable efforts to cause Sub-sublessor, Prime
Sublessor or Groundlessor, as the case may be, to cure such default. Any action
or proceeding instituted by Third Tier Sublessor against Sub-sublessor, Prime
Sublessor or Groundlessor, as the case may be, to enforce such rights shall be
conducted at the expense of Third Tier Sublessee, provided, however, that Third
Tier Sublessor shall bear its fair share of such expense to the extent such
action or proceeding does not relate to the Premises.
7. UTILITY SERVICES AND ELECTRIC
ENERGY CHARGE ADJUSTMENTS.
7.01 Electric energy will be furnished to the Premises through
presently existing electrical facilities in accordance with Article 6 above for
Third Tier Sublessee's reasonable use of such lighting and other electrical
fixtures, appliances and equipment presently existing in the Premises or as
Third Tier Sublessor may permit Third Tier Sublessee to install in the Premises.
Upon Third Tier Sublessor's request, Third Tier Sublessee shall open an account
with Con Edison in order to pay Con Edison directly for electricity in respect
of the Premises.
7.02 Third Tier Sublessee shall pay all charges, surcharges and
other fees (however denominated) for water, steam, gas, electricity, telephone
and other utility services used in the Premises during the Term.
8. FIXTURES.
8.01 All movable property, furniture, furnishings and trade fixtures
furnished by or at the sole expense of Third Tier Sublessee ("THIRD TIER
SUBLESSEE'S PROPERTY"), other than those affixed to the Premises so that they
cannot be removed without damage and other than those replacing an item
theretofore furnished and paid for by Third Tier Sublessor or Sub-sublessor or
for which Third Tier Sublessee has received a credit, shall remain the property
of Third Tier Sublessee, and may, unless prohibited pursuant to the Sub-
sublease, be removed by Third Tier Sublessee from time to time prior to the
termination of this Third Tier Sublease.
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8.02 All Alterations (as hereinafter defined) made by either party,
including all paneling, decorations, partitions, railings, mezzanine floors,
carpeting, galleries and the like, affixed to the Premises shall become the
property of Third Tier Sublessor or Sub-sublessor and shall be surrendered with
the Premises upon the termination of this Third Tier Sublease. Notwithstanding
the foregoing, Third Tier Sublessor may elect to require Third Tier Sublessee to
remove any Alterations made to the Premises including, without limitation, any
Alteration constructed or installed by Third Tier Sublessee, on behalf of Third
Tier Sublessee or at Third Tier Sublessee's request, at Third Tier Sublessee's
expense, by giving written notice to Third Tier Sublessee not later than
five (5) days prior to the date set forth herein for the termination of this
Third Tier Sublease.
8.03 In any case where Third Tier Sublessee removes any of Third
Tier Sublessee's Property or any Alterations, Third Tier Sublessee shall repair
all damages caused by said removal and shall restore the Premises to good order,
repair and condition. Upon failure of Third Tier Sublessee to do so, Third Tier
Sublessor may repair such damage and restore the Premises to good order, repair
and condition at Third Tier Sublessee's sole expense, and Third Tier Sublessee
shall reimburse Third Tier Sublessor therefor upon demand.
8.04 Notwithstanding anything herein to the contrary, upon Third
Tier Sublessee's failure to remove any of the Third Tier Sublessee's Property
or any Alterations in accordance with subsections 8.01 and 8.02 above, or upon
the termination of this Third Tier Sublease prior to the date set forth herein
for such termination, Sub-sublessor or Third Tier Sublessor may, at Third Tier
Sublessee's expense, (i) remove all such property and Alterations described in
subsections 8.01 and 8.02 above, (ii) cause the same to be placed in storage or
otherwise disposed of, and (iii) repair any damage caused by said removal and
restore the Premises to good order, repair and condition. Third Tier Sublessee
shall reimburse Third Tier Sublessor for all of the aforesaid expenses upon
demand.
8.05 Notwithstanding anything herein to the contrary, any items of
Third Tier Sublessee's Property or any Alterations not removed by Third Tier
Sublessee may, at the election of Third Tier Sublessor, be deemed to have been
abandoned by Third Tier Sublessee, and Third Tier Sublessor may retain and
dispose of said items at Third Tier Sublessee's cost and expense without any
liability to Third Tier Sublessee and without accounting to Third Tier Sublessee
for the proceeds thereof.
8.06 The provisions of this Article 8 shall survive the termination
of this Third Tier Sublease.
9. ALTERATIONS AND REPAIRS.
9.01 Third Tier Sublessee shall make no alterations, installations,
additions or improvements (collectively, "ALTERATIONS") in or about the Premises
without the prior written
12
consent of Third Tier Sublessor in each instance. Any Alterations in or
about the Premises shall be performed by Third Tier Sublessee, at its sole
cost and expense, and in compliance with the following requirements:
(a) Third Tier Sublessee, at its sole expense, shall comply with
all of the provisions of this Third Tier Sublease, the Sub-sublease, the Prime
Sublease and the Major Ground Lease pertaining to the making of Alterations,
including, without limiting the generality of the foregoing, the provisions
requiring the prior written consent of Sub-sublessor, Prime Sublessor and
Groundlessor before any Alterations may be made in or about the Premises;
(b) Third Tier Sublessee shall submit to Third Tier Sublessor, for
its prior written approval, plans and specifications for such proposed
Alterations, together with the name of the proposed contractor and all proposed
subcontractors, and all other documentation required to be submitted by Third
Tier Sublessor to (x) Sub-sublessor under the Sub-sublease, (y) Prime Sublessor
under the Prime Sublease and (z) Groundlessor under the Major Ground Lease in
respect of such Alterations;
(c) Prior to the commencement of any Alteration, Third Tier
Sublessee, at its sole expense, shall deliver to Third Tier Sublessor either
(i) a performance bond and a labor and materials bond (issued by a surety
company satisfactory to Third Tier Sublessor and licensed to do business in New
York State), each in the amount equal to 150% of the estimated cost of such
Alteration and otherwise in form satisfactory to Third Tier Sublessor and/or
(ii) such other security as shall be satisfactory to Third Tier Sublessor;
(d) Prior to the commencement of any Alteration, Third Tier
Sublessee shall furnish Third Tier Sublessor with certificates of insurance as
shall be reasonably satisfactory to Third Tier Sublessor, as to coverage and
insurer (who shall be licensed to do business in the State of New York),
including, but not limited to, liability, property damage, and workmen's
compensation insurance to protect Third Tier Sublessor, Sub-sublessor, Prime
Sublessor, Groundlessor and Third Tier Sublessee during the period of the
performance of such Alteration;
(e) All such Alterations shall be performed in a good and
workmanlike manner and in compliance with all Legal Requirements and with all
requirements of any insurance policies affecting the Premises or the Building
and so as to cause as little interference as possible with Groundlessor's, Prime
Sublessor's, Sub-sublessor's or Third Tier Sublessor's, or any of them, use,
occupancy and enjoyment of the Building or the premises of which the Premises
are a part; and
(f) Third Tier Sublessee, at its sole expense, shall obtain all
municipal and other governmental licenses, permits, authorizations, approvals,
and certificates required in connection with such Alteration.
13
9.02 Third Tier Sublessor shall have no obligations whatsoever to
make any repairs or Alterations in or to the Premises, any systems serving the
Premises, or any equipment, fixtures or furnishings in the Premises, or to
comply with any violations of law with respect thereto, or to restore the
Premises in the event of a fire or other casualty therein or to perform any
other duty with respect to the Premises which (x) Sub-sublessor is required to
perform under the Sub-sublease, (y) Prime Sublessor is required to perform under
the Prime Sublease and (z) Groundlessor is required to perform under the Major
Ground Lease. Third Tier Sublessee shall look solely to Sub-sublessor, Prime
Sublessor and Groundlessor for the making of any and all repairs in the Premises
and the performance of any and all such other work and responsibilities and only
to the extent required by the terms of, respectively, the Sub-sublease, the
Prime Sublease and the Major Ground Lease.
9.03 Third Tier Sublessee will not create or permit to be created or
to remain, and will discharge, any lien, encumbrance or charge (levied on
account of any tax payable by Third Tier Sublessee or any mechanic's or
materialman's lien by reason of work, labor, services or materials supplied or
claimed to be supplied to Third Tier Sublessee, or anyone else in the Premises,
or any part thereof, or otherwise) which might be or become a lien, encumbrance
or charge upon the Building, the Premises or any part thereof or the income
therefrom. If any such mechanic's or materialman's lien shall at any time be
filed against the Building, the Premises or any part thereof, Third Tier
Sublessee, within fifteen (15) days after notice of the filing thereof, will
cause the same to be discharged of record by payment, deposit, bond, order of a
court of competent jurisdiction or otherwise.
10. INSURANCE.
10.01 Third Tier Sublessee, at Third Tier Sublessee's sole expense,
shall maintain for the benefit of Third Tier Sublessor, Sub-sublessor, Prime
Sublessor and Groundlessor such policies of insurance required by the Sub-
sublease, the Prime Sublease and/or the Major Ground Lease with respect to the
Premises which shall be reasonably satisfactory to Third Tier Sublessor as to
coverage and insurer (who shall be licensed to do business in the State of New
York) provided that such insurance shall at a minimum include comprehensive
general liability insurance with an aggregate liability amount, on an occurrence
basis, of not less than $3,000,000 combined single limit, protecting and
indemnifying Third Tier Sublessor, Sub-sublessor, Prime Sublessor, Groundlessor
and Third Tier Sublessee against any and all claims and liabilities for injury
or damage to persons or property, occurring upon, in or about the Premises, and
the public portions of the Building, caused by or resulting from or in
connection with any act or omission of Third Tier Sublessee, Third Tier
Sublessee's employees, agents or invitees.
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10.02 Nothing contained in this Third Tier Sublease shall relieve
Third Tier Sublessee from any liability as a result of damage from fire or other
casualty, but each party shall look first to any insurance in its favor before
making any claim against the other party for recovery for loss or damage
resulting from fire or other casualty. To the extent that such insurance is in
force and collectible and to the extent permitted by law, Third Tier Sublessor
and Third Tier Sublessee each hereby releases and waives all right to recovery
against the other or anyone claiming through or under the other by way of
subrogation or otherwise. The foregoing release and waiver shall be in force
only if the insurance policies of Third Tier Sublessor and Third Tier Sublessee
provide that such release or waiver does not invalidate the insurance; and each
party agrees to use its best efforts to include such a provision in its
applicable insurance policies. If the inclusion of said provision would involve
an additional expense, the party requiring such provision to be inserted in the
other's policy shall pay the cost thereof, unless it elects to waive such
requirement.
10.03 Third Tier Sublessee shall provide to Third Tier Sublessor,
on the Commencement Date and on each anniversary of the Commencement Date, a
certificate evidencing the insurance required by this Section 10.
11. ASSIGNMENT, SUBLETTING AND ENCUMBRANCES.
11.01 Third Tier Sublessee shall not, either voluntarily or by
operation of law, assign, sell, encumber, pledge or otherwise transfer all or
any part of Third Tier Sublessee's leasehold estate hereunder, or permit the
Premises to be occupied by anyone other than Third Tier Sublessee or Third Tier
Sublessee's employees, or sublet the Premises or any portion thereof, without
Third Tier Sublessor's, Sub-sublessor's, Prime Sublessor's and Groundlessor's
prior written consent in each instance. If Third Tier Sublessee is a
corporation or is an unincorporated association or partnership, the transfer,
issuance, assignment or hypothecation of any stock or interest in such
corporation, association or partnership in the aggregate in excess of twenty-
five percent (25%) shall be deemed an assignment within the meaning and
provisions of this Article. Any consent by Third Tier Sublessor, Sub-
sublessor, Prime Sublessor and Groundlessor as hereinabove required shall not
excuse Third Tier Sublessee from its obligation to obtain the express written
consent of Third Tier Sublessor, Sub-sublessor, Prime Sublessor and Groundlessor
to any further action or matter with respect to which the consent of Third Tier
Sublessor, Sub-sublessor, Prime Sublessor and Groundlessor is hereinabove
required. If Third Tier Sublessor, Sub-sublessor, Prime Sublessor and
Groundlessor consent to an assignment of this Third Tier Sublease or a
subletting of the Premises, no such assignment or subletting shall be, or be
deemed to be, effective until the following conditions have been met:
(i) in the case of an assignment, the assignee shall have
assumed in writing, directly for the benefit of Third Tier Sublessor, all of the
obligations of Third Tier Sublessee hereunder and Third Tier Sublessor shall
have been furnished, prior to the effective date
15
of such assignment, with a duplicate original of the agreement of assignment
and assumption, in form and substance satisfactory to Third Tier Sublessor;
and
(ii) in the case of subletting, Third Tier Sublessor shall
have been furnished with a duplicate original of the sublease, prior to the
commencement of the term of such sublease, which sublease shall (a) be in form
and substance satisfactory to Third Tier Sublessor; (b) be subject and
subordinate to all of the terms, covenants and conditions of this Third Tier
Sublease, the Sub-sublease, the Prime Sublease and the Major Ground Lease; and
(c) restrict the right of the subtenant thereunder to assign such sublease or
further sublet its subleased premises without the prior written consent of Third
Tier Sublessor, Sub-sublessor, Prime Sublessor and Groundlessor in each
instance.
Notwithstanding Third Tier Sublessor's, Sub-sublessor's, Prime Sublessor's and
Groundlessor's consent to any such assignment or subletting, the provisions of
this subsection shall be applicable to each and every subsequent assignment or
subletting, and Third Tier Sublessee shall not be released from any of its
obligations hereunder.
11.02 If this Third Tier Sublease be assigned or if the Premises
or any part thereof be further sublet or occupied by anybody other than Third
Tier Sublessee, Third Tier Sublessor may, after default by Third Tier Sublessee,
collect rent from the assignee, subtenant or occupant, and apply the net amount
collected to the Fixed Rent, Additional Rent and other charges herein reserved,
but no such assignment, subletting, occupancy or collection shall be deemed a
waiver of Third Tier Sublessee's covenants under this Article 11, or the
acceptance by Third Tier Sublessor of the assignee, subtenant or occupant as
tenant hereunder or a release of Third Tier Sublessee from the further
performance by Third Tier Sublessee of any of the terms, covenants and
conditions of this Third Tier Sublease on the part of Third Tier Sublessee to be
performed hereunder.
11.03 Third Tier Sublessee shall pay on demand the costs and expenses
incurred by Third Tier Sublessor, Sub-sublessor, Prime Sublessor and
Groundlessor, including, without limitation, architect, engineer and attorneys'
fees and disbursements, and a reasonable administrative fee, in connection with
any proposed or actual assignment of this Third Tier Sublease or subletting of
the Premises, or any part thereof, and the review and/or preparation of
documents in connection therewith.
12. DEFAULT.
12.01 This Third Tier Sublease and the Term and estate hereby granted
are subject to the following limitations as modified by the provisions of
Article 15 below:
(a) if Third Tier Sublessee shall fail to pay when due any Rent or
any other sum or amount Third Tier Sublessee may be required to pay hereunder;
or
16
(b) if Third Tier Sublessee shall default in the observance or
performance of any term, covenant or condition of this Third Tier Sublease on
Third Tier Sublessee's part to be observed, performed or complied with (other
than the payment of Fixed Rent and Additional Rent and other amounts payable
hereunder) and Third Tier Sublessee shall fail to remedy such default within
ten (10) days thereafter, or, if such default is of such a nature that for
reasons beyond Third Tier Sublessee's control it cannot be completely remedied
within said period of ten (10) days, then if Third Tier Sublessee (i) shall not
promptly advise Third Tier Sublessor in writing of Third Tier Sublessee's
intention to duly institute all steps necessary to remedy such situation,
(ii) shall not promptly institute and thereafter diligently prosecute to
completion all steps necessary to remedy the same and (iii) shall not remedy the
same within a reasonable time after the date of default; or
(c) if any event shall occur or any contingency shall arise
whereby this Third Tier Sublease or the estate hereby granted or the unexpired
balance of the Term would, by operation of law or otherwise, devolve upon or
pass to any person or entity other than Third Tier Sublessee, except as is
expressly permitted hereunder; or
(d) if Third Tier Sublessee shall fail to move into or take
possession of the Premises within thirty (30) days after the Commencement Date
or if the Premises shall thereafter become vacant, deserted or abandoned; or
(e) if there shall occur any default under the Sub-sublease, the
Prime Sublease or the Major Ground Lease or there shall occur any event which
with notice or passage of time or both would constitute a default under the Sub-
sublease, the Prime Sublease or the Major Ground Lease, which is due to any act
or omission of Third Tier Sublessee; or
(f) if Third Tier Sublessee shall default in the observance or
performance of any term, covenant or condition on Third Tier Sublessee's part to
be observed or performed under any other lease or sublease with Third Tier
Sublessor, and such default shall continue beyond any applicable grace period
set forth in such other lease or sublease for the remedying of such default; or
(g) if any execution or attachment shall be issued against Third
Tier Sublessee or any of Third Tier Sublessee's Property whereupon the Premises
shall be taken or occupied or attempted to be taken or occupied by someone other
than Third Tier Sublessee, and such execution or attachments shall not have been
vacated and shall continue for a period of thirty (30) days;
then, in any of said events, Third Tier Sublessor may give to Third Tier
Sublessee notice of its intention and election to end the Term at the
expiration of three (3) days from the date of the giving of such notice, and, in
the event such notice is given, this Third Tier Sublease and the Term and estate
hereby granted (whether or not the Term shall have commenced) shall terminate
upon the
17
expiration of said three (3) days with the same force and effect as if that
day were the Expiration Date, provided, however, that Third Tier Sublessee
shall be and remain liable for the performance of all of its obligations
hereunder and for damages as provided in this Third Tier Sublease.
12.02 Except as otherwise provided for herein, if Third Tier
Sublessee shall default in the payment when due of any Rent or other amount
Third Tier Sublessee may become obligated to pay hereunder, or if this Third
Tier Sublease and the Term shall terminate as provided in subsection 12.01 above
then:
(a) Third Tier Sublessor and Third Tier Sublessor's agents may
immediately, or at any time after such default (and expiration of the applicable
grace period, if any) or after the date upon which this Third Tier Sublease and
the Term shall terminate, re-enter the Premises or any part thereof, without
notice, whether by summary proceedings or by any other permitted action or
proceeding, or by force or otherwise (without being liable to indictment,
prosecution or for damages therefor), and may repossess the Premises and
dispossess Third Tier Sublessee and any other persons from the Premises and
remove any and all of its or their property and effects from the Premises. In
no event shall any such re-entry be deemed an acceptance of Third Tier
Sublessee's surrender of this Third Tier Sublease; and
(b) Third Tier Sublessor, at Third Tier Sublessor's option, may
relet the whole or any part or parts of the Premises from time to time, either
in the name of Third Tier Sublessor or otherwise, to such tenant or tenants, for
such term or terms, at such rental or rentals and upon such other terms and
conditions, which may include concessions and free rent periods, as Third Tier
Sublessor, in its sole discretion, may determine. Third Tier Sublessor shall
have no obligation to relet the Premises or any part thereof and shall in no
event be liable for refusal or failure to collect any rent due upon any such
reletting and no such refusal or failure shall operate to relieve Third Tier
Sublessee from any liability under this Third Tier Sublease or otherwise affect
any such liability. Third Tier Sublessor, at its option, may make such repairs,
alterations, additions, improvements, decorations and other physical changes in
and to the Premises as Third Tier Sublessor, in its sole discretion, may
consider advisable in connection with any such reletting or proposed reletting,
without relieving Third Tier Sublessee of any liability under this Third Tier
Sublease or otherwise affecting any such liability.
12.03 Third Tier Sublessee, on its own behalf and on behalf of all
persons claiming through or under Third Tier Sublessee, including all creditors,
does hereby waive any and all rights and privileges, to the extent permitted by
law, which Third Tier Sublessee and all such persons might otherwise have under
any present or future law to (i) the service of any notice of intention to re-
enter or to institute legal proceedings to that end which may otherwise by
required to be given under any present or future law, (ii) to redeem the
Premises, (iii) to re-enter or repossess the Premises, or (iv) to restore the
operation of this Third Tier Sublease, after Third Tier Sublessee shall have
been dispossessed by a judgment or by warrant of any court or judge, or after
any re-
18
entry by Third Tier Sublessor, or after any termination of this Third Tier
Sublease and the Term, whether such dispossession, re-entry or termination
shall be by operation of law or otherwise. The words "re-enter," "re-entry,"
and "re-entered" as used in this Third Tier Sublease shall not be deemed to
be restricted to their technical legal meanings.
12.04 In the event of any breach or threatened breach by Third Tier
Sublessee or any persons claiming through or under Third Tier Sublessee of any
of the terms, covenants or conditions contained in this Third Tier Sublease,
Third Tier Sublessor (i) shall be entitled to enjoin such breach or threatened
breach and (ii) shall have the right to invoke any right and remedy allowed at
law or in equity or by statute or otherwise as if re-entry, summary proceedings
or other specific remedies were not provided for in this Third Tier Sublease.
12.05 If this Third Tier Sublease and the Term shall terminate as
provided in subsection 12.01 above, or by or under any summary proceeding or any
other action or proceeding or if Third Tier Sublessor shall re-enter the
Premises as hereinabove provided or by or under any summary proceeding or any
other action or proceeding, then in any of said events:
(a) Third Tier Sublessee shall pay to Third Tier Sublessor all
Fixed Rent, Additional Rent and other amounts payable by Third Tier Sublessee
hereunder to the date upon which this Third Tier Sublease and the Term shall
have terminated or to the date of re-entry upon the Premises by Third Tier
Sublessor, as the case may be;
(b) Third Tier Sublessor shall be entitled to retain all monies, if
any, paid by Third Tier Sublessee to Third Tier Sublessor, whether as advance
Rent, security or otherwise, but such monies shall be credited by Third Tier
Sublessor against any Rent due at the time of such termination or re-entry or,
at Third Tier Sublessor's option, against any damages payable by Third Tier
Sublessee;
(c) Third Tier Sublessee shall be liable for and shall pay to Third
Tier Sublessor, as damages, any deficiency between the Fixed Rent and Additional
Rent payable hereunder for the period which otherwise would have constituted the
unexpired portion of the Term (conclusively presuming the Additional Rent to be
at the same rate as was payable for the year immediately preceding such
termination or re-entry) and the net amount, if any, of rents ("NET RENT")
collected under any reletting effected pursuant to the provisions of
subsection 12.02 for any part of such period (after first deducting from the
rents collected under any such reletting all of the Third Tier Sublessor's
expenses in connection with the termination of this Third Tier Sublease or Third
Tier Sublessor's re-entry upon the Premises and in connection with such
reletting including all repossession costs, brokerage commissions, legal
expenses, attorneys' fees, alteration or similar costs and other expenses of
preparing the Premises for such reletting). Any such deficiency shall be paid
in monthly installments by Third Tier Sublessee on the days specified in this
Third Tier Sublease for the payment of installments of Fixed Rent and Additional
Rent. Third Tier Sublessor
19
shall be entitled to recover from Third Tier Sublessee each monthly
deficiency as the same shall arise and no suit to collect the amount of the
deficiency for any month shall prejudice Third Tier Sublessor's right to
collect the deficiency for any subsequent month by a similar proceeding.
Alternatively, suit or suits for the recovery of such deficiencies may be
brought by Third Tier Sublessor from time to time at its election;
(d) In the event that Third Tier Sublessor shall not have collected
any monthly deficiencies as aforesaid, Third Tier Sublessor shall be entitled to
recover from Third Tier Sublessee, and Third Tier Sublessee shall pay to Third
Tier Sublessor, on demand, as and for liquidated and agreed final damages, a sum
equal to the amount by which the Fixed Rent and Additional Rent payable
hereunder for the period which otherwise would have constituted the unexpired
portion of the Term (conclusively presuming the Additional Rent to be at the
same rate as was payable for the year immediately preceding such termination or
re-entry) exceeds the then fair and reasonable rental value of the Premises for
the same period, both discounted to present worth at the rate of four percent
(4%) per annum. If before presentation of proof of such liquidated damages to
any court, commission or tribunal, the Premises, or any part thereof, shall have
been relet by Third Tier Sublessor for the period which otherwise would have
constituted the unexpired portion of the Term, or any part thereof, the amount
of rent upon such reletting shall be deemed, prima facie, to be the fair and
reasonable rental value for the part or the whole of the Premises so relet
during the term of the reletting; and
(e) In no event shall Third Tier Sublessee be entitled to receive
any excess of Net Rent over the sums payable by Third Tier Sublessee to Third
Tier Sublessor hereunder, and in no event shall Third Tier Sublessee be entitled
in any suit for the collection of damages pursuant to this Article to a credit
in respect of any Net Rent from a reletting except to the extent actually
received by Third Tier Sublessor prior to the commencement of such suit.
12.06 (a) If this Third Tier Sublease be terminated as provided
in subsection 12.01 or by any summary proceeding or any other action or
proceeding, or if Third Tier Sublessor shall reenter the Premises, Third Tier
Sublessee covenants and agrees, that, notwithstanding anything to the contrary
contained in this Third Tier Sublease:
(i) the Premises shall be, upon such earlier termination or
re-entry, in the same condition as that in which Third Tier Sublessee has agreed
to surrender them to Third Tier Sublessor on the Expiration Date;
(ii) Third Tier Sublessee, on or before the occurrence of any
event of default, shall have performed every covenant contained in this Third
Tier Sublease with respect to the making or restoration of all Alterations; and
20
(iii) for the breach of either clause (i) or (ii) of
subsection 12.06(a) above, or both, Third Tier Sublessor shall be entitled
immediately, without notice or other action by Third Tier Sublessor, to recover,
and Third Tier Sublessee shall pay as and for liquidated damages therefor, the
then cost of performing such covenant.
(b) Each and every covenant contained in this subsection 12.06
shall be deemed separate and independent of every other provision of this Third
Tier Sublease and the use and occupancy of the Premises by Third Tier Sublessee,
and the performance of any such covenant shall not be considered to be Rent or
the payment of any other amount for the use of the Premises. It is understood
that the consideration for the covenants in this subsection is the making of
this Third Tier Sublease, and damages for failure to perform the same shall be
deemed to be in addition to and separate and independent from the damages
accruing by reason of default in observing any other covenant contained in this
Third Tier Sublease.
12.07 Nothing herein contained shall be construed as limiting or
precluding the recovery by Third Tier Sublessor against Third Tier Sublessee of
any sums or damages to which, in addition to the damages particularly provided
above, Third Tier Sublessor may lawfully be entitled by reason of any default
hereunder on the part of Third Tier Sublessee.
13. BANKRUPTCY.
13.01 Notwithstanding any other provision of this Third Tier
Sublease, Third Tier Sublessor may cancel this Third Tier Sublease by written
notice to Third Tier Sublessee within a reasonable period of time after the
happening of either one or both of the following events: (i) a case is
commenced in bankruptcy or under the laws of any state naming Third Tier
Sublessee as debtor; and (ii) Third Tier Sublessee makes an assignment or any
other arrangement for the benefit of creditors under any state statute. Neither
Third Tier Sublessee nor any person claiming through or under Third Tier
Sublessee, or by reason of any statute or order of court, shall therewith be
entitled to possession of the Premises but shall forthwith quit and surrender
the Premises.
13.02 Notwithstanding any other provision of this Third Tier
Sublease, if this Third Tier Sublease shall terminate pursuant to
subsection 13.01 above, Third Tier Sublessor shall be entitled to recover from
Third Tier Sublessee as and for liquidated damages an amount equal to the
difference between the Rent receivable hereunder for the unexpired portion of
the Term and the fair and reasonable rental value of the Premises for the same
period. In the computation of such damages, the difference between any
installment of Rent becoming due hereunder after the date of termination and the
fair and reasonable rental value of the Premises for the period for which such
installment was payable shall be discounted to the date of termination at the
rate of four percent (4%) per annum. If the Premises or any part thereof be
relet by Third Tier Sublessor for the
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unexpired term of this Third Tier Sublease, or any part thereof, before
presentation of proof of such liquidation damages to any court, commission or
tribunal, the amount of Rent reserved upon such reletting shall be deemed to
be the fair and reasonable rental value for the part or the whole of the
Premises so relet during the term of the reletting. Nothing herein contained
shall limit or prejudice the right of Third Tier Sublessor to prove for and
obtain as liquidated damages by reason of such termination an amount equal to
the maximum allowed by any statute or rule of law in effect at the time when,
and governing the proceedings in which, such damages are to be proved,
whether or not such amount be greater, equal to, or less than the amount of
the difference referred to above.
13.03 If, at any time, (i) Third Tier Sublessee shall be comprised
of two or more persons or entities; (ii) any of Third Tier Sublessee's
obligations under this Third Tier Sublease shall have been guaranteed by any
person or entity other than Third Tier Sublessee; or (iii) Third Tier
Sublessee's interest in this Third Tier Sublease shall have been assigned, the
word "Third Tier Sublessee," as used in subsections 13.01 and 13.02 above, shall
be deemed to mean Third Tier Sublessee or any one or more other persons or
entities primarily or secondarily liable for the performance of Third Tier
Sublessee's obligations under this Third Tier Sublease.
14. INDEMNIFICATION.
14.01 Third Tier Sublessor, Sub-sublessor, Prime Sublessor,
Groundlessor, their respective employees, agents, contractors, licensees and
invitees, shall not be liable to Third Tier Sublessee, its employees, agents,
contractors, licensees or invitees, and Third Tier Sublessee shall indemnify and
hold harmless Third Tier Sublessor, Sub-sublessor, Prime Sublessor and
Groundlessor, and their respective employees, agents, contractors, licensees and
invitees, from and against any and all loss, cost, liability, claim, damage and
expense, including, without limiting the generality of the foregoing, attorneys'
fees and expenses and court costs, penalties and fines, incurred in connection
with or arising from any injury to Third Tier Sublessee or any other person, or
for any damages to, or loss (by theft or otherwise) of, any of the property of
Third Tier Sublessee and/or any other person, irrespective of the cause of such
injury, damage or loss and whether occurring in or about the Premises or the
Building. The foregoing shall not be deemed to affect the liability of Third
Tier Sublessor, if any, with respect to any of the foregoing if caused by the
gross negligence of Third Tier Sublessor without contributory negligence on the
part of Third Tier Sublessee or any other party.
14.02 Third Tier Sublessee shall indemnify and hold harmless Third
Tier Sublessor, Sub-sublessor, Prime Sublessor and Groundlessor, and their
respective employees, agents, contractors, licensees and invitees, from and
against any and all loss, cost, liability, claims, damage and expenses,
including, without limiting the generality of the foregoing, reasonable
attorneys' fees and expenses and court costs, penalties and fines, incurred
in connection with or arising from (i) any default by Third Tier Sublessee in
the observance or performance of, or compliance with, any of the terms,
covenants or conditions of this Third Tier Sublease, the Sub-Sublease, the
Prime Sublease or the Major Ground Lease on Third Tier Sublessee's part to be
22
observed, performed or complied with, (ii) the use or occupancy or manner of
use or occupancy of the Premises by Third Tier Sublessee or any person
claiming through or under Third Tier Sublessee or the exercise by Third Tier
Sublessee or any person claiming through or under Third Tier Sublessee of any
rights granted to Third Tier Sublessee hereunder, including, without limiting
the generality of the foregoing, those rights provided under Article 6 above,
(iii) any acts, omissions or negligence of Third Tier Sublessee or any person
claiming through or under Third Tier Sublessee, or the employees, agents,
contractors, licensees or invitees of Third Tier Sublessee or any such
person, in or about the Premises or the Building either prior to, during, or
after the termination of this Third Tier Sublease, or (iv) the condition of
the Premises. If any action or proceeding shall be brought against Third
Tier Sublessor, Sub-sublessor, Prime Sublessor or Groundlessor by reason of
any such claim, Third Tier Sublessee, upon notice from Third Tier Sublessor,
Sub-sublessor, Prime Sublessor and Groundlessor, shall resist and defend such
action or proceeding and employ counsel therefor satisfactory to Third Tier
Sublessor. Third Tier Sublessee shall pay to Third Tier Sublessor on demand
all sums which may be owing to Third Tier Sublessor, Sub-sublessor, Prime
Sublessor and Groundlessor by reason of the provisions of this subsection.
Third Tier Sublessee's obligations under this subsection shall survive the
Expiration Date or earlier termination of this Third Tier Sublease.
14.03 Third Tier Sublessor shall indemnify and hold harmless Third
Tier Sublessee from and against any and all loss, cost, liability, claims,
damage and expenses, including without limitation, reasonable attorneys fees and
expenses and court costs, penalties and fines, incurred in connection with or
arising from the breach of its representations and warranties set forth in
paragraph 1.03. Third Tier Sublessor's obligations under this subsection shall
survive the Expiration Date or earlier termination of this Third Tier Sublease.
14.04 The provisions of this Section 14 are not intended to make
Third Tier Sublessee responsible for claims against Third Tier Sublessor, Prime
Sublessor, Groundlessor or Sub-sublessor or the Premises that arose out of
events that occurred prior to the Commencement Date.
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15. TIME LIMITS.
15.01 Except with respect to actions to be taken by Third Tier
Sublessee for which shorter time limits are specifically set forth in this Third
Tier Sublease, which time limits shall control for the purposes of this Third
Tier Sublease, the time limits provided in the Sub-sublease, the Prime Sublease
and the Major Ground Lease for the giving or making of any Notice (as
hereinafter defined) by the tenant thereunder to Sub-sublessor, Prime Sublessor
and Groundlessor, as the case may be, the holder of any mortgage or any other
party, or for the performance of any act, condition or covenant by the tenant
thereunder, or for the exercise of any right, remedy or option by the tenant
thereunder, are changed for the purposes of this Third Tier Sublease, by
shortening the same in each instance by (i) forty (40) days with respect to all
such periods of sixty (60) or more days, (ii) fifteen (15) days with respect to
all such periods of thirty (30) or more days but less than sixty (60) days,
(iii) ten (10) days with respect to all such periods of twenty (20) or more but
less than thirty (30) days, and (iv) three (3) days with respect to all such
periods of less than twenty (20) days.
15.02 Except with respect to actions to be taken by Third Tier
Sublessor for which longer time limits are specifically set forth in this Third
Tier Sublease, which time limits shall control for the purposes of this Third
Tier Sublease, the time limits provided in the Sub-sublease, the Prime Sublease
and the Major Ground Lease for the giving or making of any Notice by Sub-
sublessor, Prime Sublessor and Groundlessor, as the case may be, or the
performance of any act, covenant or condition by Sub-sublessor, Prime Sublessor
and Groundlessor, as the case may be, or for the exercise of any right, remedy
or option by Sub-sublessor, Prime Sublessor and Groundlessor, as the case may
be, thereunder, are changed for the purposes of this Third Tier Sublease, by
lengthening the same in each instance by (i) fifteen (15) days with respect to
all such periods of sixty (60) or more days, (ii) ten (10) days with respect to
all such periods of thirty (30) or more but less than sixty (60) days,
(iii) seven (7) days with respect to all such periods of twenty (20) or more but
less than thirty (30) days, and (iv) three (3) days with respect to all such
periods of less than twenty (20) days.
16. REMEDIES CUMULATIVE.
16.01 Each right and remedy of Third Tier Sublessor under this Third
Tier Sublease shall be cumulative and be in addition to every other right and
remedy of Third Tier Sublessor under this Third Tier Sublease and now or
hereafter existing at law or in equity, by statute or otherwise.
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17. CASUALTY AND CONDEMNATION.
17.01 Subject to the terms of the Sub-sublease, the Prime Sublease
and the Major Ground Lease, in the event of any taking by governmental or public
authority of all or any part of the Premises, Third Tier Sublessee hereby waives
and relinquishes any and all claims to any award or damages for any such taking
of the Premises, including, without limiting the generality of the foregoing,
any claim for the value of the unexpired term of this Third Tier Sublease or the
value of any furniture, furnishings and trade fixtures installed by Third Tier
Sublessee in the Premises.
17.02 If the term of the Sub-sublease is terminated as provided
therein, or at the election of either party thereto pursuant to the terms
thereof, as a result of any casualty or condemnation affecting the Building or
any portion thereof, this Third Tier Sublease shall thereupon be terminated ipso
facto without any liability of Third Tier Sublessor to Third Tier Sublessee by
reason of such early termination. No event of casualty or condemnation
affecting the Premises shall result in any right or option on the part of the
Third Tier Sublessee hereunder to terminate this Third Tier Sublease, unless
Third Tier Sublessor shall have the right and option to terminate the Sub-
sublease as a result of such casualty or condemnation, and then only to the
extent that Third Tier Sublessee shall have exercised such right and option
within the time limits and as specifically provided for herein.
18. QUIET ENJOYMENT.
18.01 Third Tier Sublessor covenants that, as long as Third Tier
Sublessee shall pay the Fixed Rent and Additional Rent and all other amounts
Third Tier Sublessee shall be required to pay hereunder and shall duly observe,
perform and comply with all of the terms, covenants and conditions of this Third
Tier Sublease on its part to be observed, performed or complied with, Third Tier
Sublessee shall, subject to all of the terms of the Major Ground Lease, the
Prime Sublease, the Sub-sublease and this Third Tier Sublease, peaceably have,
hold and enjoy the Premises during the Term without molestation or hindrance by
Third Tier Sublessor.
19. RELEASE OF THIRD TIER SUBLESSOR.
19.01 The term "Third Tier Sublessor", as used in this Third Tier
Sublease so far as covenants or obligations on the part of Third Tier Sublessee
are concerned, shall be limited to mean and include only the owner or owners at
the time in question of the tenant's interest under the Sub-sublease, and in the
event of any transfer or transfers of the tenant's interest in the Sub-sublease,
Third Tier Sublessor herein named (and in case of any subsequent transfer or
conveyance, the then transferor of the tenant's interest in the Sub-sublease)
shall be automatically freed and relieved from and after the date of such
transfer of all liability with respect to the performance of any covenants or
obligations on the part of Third Tier Sublessor contained in this Third Tier
25
Sublease thereafter to be performed, provided that the transferee of Third Tier
Sublessor's interests in this Third Tier Sublease agrees to assume Third Tier
Sublessor's covenants and obligations arising hereunder after the date of such
transfer and notice thereof is given to Third Tier Sublessee.
20. SURRENDER OF PREMISES.
20.01 Third Tier Sublessee shall, no later than the termination of
this Third Tier Sublease and in accordance with all of the terms of this Third
Tier Sublease, the Sub-sublease, the Prime Sublease and the Major Ground Lease,
vacate and surrender to Third Tier Sublessor the Premises, together with all
Alterations, in good order, condition and repair, reasonable wear and tear
excepted. Tenant's obligation to observe or perform this covenant shall survive
the termination of this Third Tier Sublease.
20.02 Third Tier Sublessee expressly waives, for itself and for
any person claiming through or under Third Tier Sublessee, any rights which
Third Tier Sublessee or any such person may have under the provisions of
Section 2201 of the New York Civil Practice Law and Rules and any successor law
of like import in force in connection with any holdover summary proceedings
which Third Tier Sublessor may institute to enforce the foregoing provisions of
this Article 20.
21. ESTOPPEL CERTIFICATES.
21.01 At any time and from time to time within ten (10) days after
a written request from Third Tier Sublessor, Third Tier Sublessee shall execute,
acknowledge and deliver to Third Tier Sublessor a written statement certifying
(i) that this Third Tier Sublease has not been modified and is in full force and
effect or, if there has been a modification of this Third Tier Sublease, that
this Third Tier Sublease is in full force and effect as modified, and stating
such modifications, (ii) the dates to which the Fixed Rent, Additional Rent and
other charges hereunder have been paid, (iii) that to the best of Third Tier
Sublessee's knowledge, no defaults exist under this Third Tier Sublease or, if
any defaults do exist, specifying the nature of each such default, and (iv) as
to such other matters as Third Tier Sublessor may reasonably request.
22. SECURITY.
22.01 Simultaneously with the execution of this Third Tier Sublease,
Third Tier Sublessee shall deposit with Third Tier Sublessor the sum of Ten
Thousand Four Hundred Fourty-Six and 34/100 Dollars ($10,446.34) ("SECURITY
DEPOSIT") (which amount shall increase to $11,396.00 on April 1, 1997) as
security for the full and faithful performance and observance by Third Tier
Sublessee of all of the terms, covenants and conditions of this Third Tier
Sublease on Third Tier Sublessee's part to be performed and observed. Third
Tier Sublessor may use, apply or retain the whole or any part of the Security
Deposit to the extent required for the payment of any Rent and any other sums as
to which Third Tier Sublessee may be in default hereunder and for any
26
sum which Third Tier Sublessor may expend or may be required to expend by
reason of Third Tier Sublessee's default in respect of any of the terms,
covenants and conditions of this Third Tier Sublease, including, without
limiting the generality of the foregoing, any and all damages or deficiencies
in the reletting of the Premises, whether such damages or deficiencies shall
accrue before or after summary proceedings or other re-entry by Third Tier
Sublessor. If any portion of said Security Deposit is so used or applied by
Third Tier Sublessor, the Third Tier Sublessee shall within five (5) days
after receipt of written demand therefore deposit cash with Third Tier
Sublessor in an amount sufficient to restore the Security Deposit to its
original amount and Third Tier Sublessee's failure to do so shall be a
material default of this Third Tier Sublease. In the event that Third Tier
Sublessee shall fully and faithfully comply with all of the terms,
provisions, covenants and conditions of this Third Tier Sublease, the
Security Deposit, or so much thereof as shall not have been applied by Third
Tier Sublessor as aforesaid, shall be returned to Third Tier Sublessee after
the Expiration Date (or earlier termination of this Third Tier Sublease) and
after delivery of the entire possession of the Premises to Third Tier
Sublessor, without interest. In the event of an assignment by Third Tier
Sublessor of its interest under the Sub-sublease, Third Tier Sublessor shall
have the right to transfer the Security Deposit to the assignee and Third
Tier Sublessor shall thereupon be released by Third Tier Sublessee from all
liability for the return of such Security Deposit. In such event, Third Tier
Sublessee shall look solely to its new sublessor for the return of said
Security Deposit. The foregoing provisions shall apply to every transfer or
assignment made of the Security Deposit to a new sublessor. Third Tier
Sublessee further covenants that it will not assign or encumber or attempt to
assign or encumber the Security Deposit and that neither Third Tier Sublessor
nor its successors and assigns shall be bound by any such assignment,
encumbrance, attempted assignment or attempted encumbrance.
23. ACCESS TO PREMISES.
23.01 Third Tier Sublessee shall permit Third Tier Sublessor, Sub-
sublessor, Prime Sublessor and Groundlessor and their authorized representatives
to enter upon the Premises at reasonable times (i) to inspect the same and to
perform any work or make any necessary repairs thereto and (ii) as may be
necessary to obtain access to any adjacent space.
24. NOTICES.
24.01 All notices, consents, approvals or other communications
(collectively, a "NOTICE") required to be given under this Third Tier Sublease
or pursuant to law shall be in writing and, unless otherwise required by law,
shall be personally delivered or given by registered or certified mail, return
receipt requested, postage prepaid, to the parties at their respective addresses
set forth above or such other address as either may designate by Notice to the
other. A copy of any Notice to Third Tier Sublessor shall be sent to its
General Counsel at the address for Third Tier Sublessor set forth above. Any
Notice given pursuant hereto shall be deemed to have been received
27
upon delivery, if personally delivered, or on the 5th day after the mailing
thereof if mailed in accordance with the terms hereof.
25. SUB-SUBLESSOR'S CONSENT REQUIRED.
25.01 This Third Tier Sublease shall be conditioned upon the receipt
by Third Tier Sublessor of Sub-sublessor's written consent to this Third Tier
Sublease and the delivery of a copy of the same to the Third Tier Sublessee.
Third Tier Sublessee covenants and agrees to cooperate with Third Tier Sublessor
in any request for Sub-sublessor's consent and agrees to supply and furnish any
information or documents which may be reasonably requested by Groundlessor,
Prime Sublessor and/or Sub-sublessor. Third Tier Sublessee shall pay or
reimburse Third Tier Sublessor for any expense charged by Sub-sublessor,
Groundlessor or Prime Sublessor in connection with the consent by any of them to
this Third Tier Sublease.
26. BROKER.
26.01 Third Tier Sublessor and Third Tier Sublessee each represents
that, other than Josephthal, Lyon & Ross, Inc. ("Josephthal"), it has dealt with
no broker, agent or finder in connection with this Third Tier Sublease or the
transactions to which it relates, and each shall indemnify and hold the other
harmless from and against the fee or commission claims of any broker, agent or
finder that it dealt with. Third Tier Sublessor has engaged Josephthal and
shall be solely liable for its fee, if any. However, if any of the Major
Groundlease, the Prime Sublease or the Sub-sublease, or the landlord thereunder,
requires that such landlord or any agent, manager or broker be paid a
commission, fee or any other form of compensation in connection with the consent
for this Third Tier Sublease, the Third Tier Sublessee will pay the same.
27. WAIVER OF RIGHTS TO JURY AND COUNTERCLAIM.
27.01 Third Tier Sublessor and Third Tier Sublessee each hereby waive
trial by jury in any action, proceeding or counterclaim brought by either of the
parties against the other on any matters whatsoever arising out of or in any way
connected with this Third Tier Sublease, the relationship of Third Tier
Sublessor and Third Tier Sublessee, Third Tier Sublessee's use or occupancy
of the Premises, and/or any claim of injury or damage, or for the enforcement of
any remedy under any statute, emergency or otherwise. Third Tier Sublessor and
Third Tier Sublessee further agree that in the event Third Tier Sublessor
commences any summary proceeding for non-payment of Rent, Third Tier Sublessee
will not interpose any counterclaim of whatever nature or description in any
such proceeding.
28
27.02 Third Tier Sublessee hereby waives its right to interpose or
counterclaim in any summary proceeding instituted to remove Third Tier Sublessee
from the Premises or in any action or proceeding instituted for the collection
of Fixed Rent, Additional Rent or other amounts Third Tier Sublessee is
obligated to pay Third Tier Sublessor hereunder.
27.03 With respect to any provision of this Third Tier Sublease
which provides, in effect, that Third Tier Sublessor shall not unreasonably
withhold or unreasonably delay any consent or any approval, Third Tier Sublessee
in no event, shall be entitled to make, nor shall Third Tier Sublessee make, any
claim, and Third Tier Sublessee hereby waives any claim, for money damages; nor
shall Third Tier Sublessee claim any money damages by way of setoff,
counterclaim or defense, based upon any claim or assertion by Third Tier
Sublessee that Third Tier Sublessor has unreasonably withheld or unreasonably
delayed any consent or approval; but Third Tier Sublessee's sole remedy shall be
an action or proceeding to enforce any such provision, or for specific
performance, injunction or declaratory judgment.
28. THIRD TIER SUBLESSOR'S INABILITY TO PERFORM.
28.01 This Third Tier Sublease and the obligation of Third Tier
Sublessee to pay Rent hereunder and perform all of the other covenants and
agreements hereunder on the part of Third Tier Sublessee to be performed shall
in no way be affected, impaired or excused because Third Tier Sublessor is
unable to fulfill any of its obligations under this Third Tier Sublease
expressly or impliedly to be performed by Third Tier Sublessor or because Third
Tier Sublessor is unable to make, or is delayed in making, any repairs,
additions, alterations, improvement or decorations or is unable to supply, or is
delayed in supplying, any equipment or fixtures, if Third Tier Sublessor is
prevented or delayed from so doing by reason of strikes or labor trouble, or by
accident, adjustment of insurance, or by any cause whatsoever reasonably beyond
Third Tier Sublessor's control, including but not limited to, laws, governmental
preemption in connection with a National Emergency or by reason of any rule,
order or regulation or any federal, state, county or municipal authority or any
department or subdivision thereof or any government agency or by reason of the
conditions of supply and demand which have been or are affected by war or other
emergency.
29. MISCELLANEOUS.
29.01 This Third Tier Sublease shall be governed by and construed in
accordance with the laws of the State of New York.
29.02 Third Tier Sublessee shall look solely to Third Tier
Sublessor's estate and interest in the Premises for the satisfaction of any
right of Third Tier Sublessee for the collection of a judgment or other judicial
process or arbitration award requiring the payment of money by Third Tier
Sublessor and not to any other property or assets of Third Tier Sublessor.
29
29.03 The section headings in this Third Tier Sublease are inserted
only as a matter of convenience for reference and are not to be given any effect
in construing this Third Tier Sublease.
29.04 If any of the provisions of this Third Tier Sublease or the
application thereof to any person or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Third Tier Sublease, or the
application of such provisions or provisions to persons or circumstances other
than those as to whom or which it is held invalid or unenforceable, shall not be
affected thereby, and every provision of this Third Tier Sublease shall be valid
and enforceable to the fullest extent permitted by law.
29.05 All of the terms and provisions of this Third Tier Sublease
shall be binding upon and inure to the benefits of the parties hereto and,
subject to the provisions of Article 11 hereof, their respective successors and
assigns.
29.06 Third Tier Sublessor has made no representations, warranties
or covenants to or with Third Tier Sublessee with respect to the subject matter
of this Third Tier Sublease except as expressly provided herein and all prior
negotiations and agreements relating thereto are merged into this Third Tier
Sublease. This Third Tier Sublease may not be amended or terminated, in whole
or in part, nor may any of the provisions be waived, except by a written
instrument executed by the party against whom enforcement of such amendment,
termination or waiver is sought and unless the same is permitted under the terms
and provisions of the Sub-sublease, the Prime Sublease and the Major Ground
Lease.
IN WITNESS WHEREOF, Third Tier Sublessor and Third Tier Sublessee have
executed this Third Tier Sublease as of the day and year first above written.
THIRD TIER SUBLESSOR:
UNITEL VIDEO, INC.
By: /s/ BARRY KNEPPER
----------------------------------------
Name: Barry Knepper
Title: CEO
THIRD TIER SUBLESSEE:
30
DIGITAL UNIVERSE II, INC.
By/s/ Walter Lefler
Name: Walter Lefler
Title: President
31
THIRD TIER SUBLEASE
BETWEEN,
UNITEL VIDEO, INC.,
AS THIRD TIER SUBLESSOR
AND
DIGITAL UNIVERSE II, INC.
AS THIRD TIER SUBLESSEE
PREMISES: A PORTION OF THE BASEMENT AND 4TH FLOORS AND THE ENTIRE 7TH AND 8TH
FLOORS
217 - 223 EAST 43RD STREET/
214 - 226 EAST 44TH STREET
NEW YORK, NEW YORK
THIRD TIER SUBLEASE
THIRD TIER SUBLEASE (this "SUB-SUBLEASE"), dated as of November 22,
1996, between UNITEL VIDEO, INC., a Delaware corporation ("THIRD TIER
SUBLESSOR") having an office at 555 West 57th Street, New York, New York 10019,
Attention: President, and DIGITAL UNIVERSE II, INC., a New York corporation
("THIRD TIER SUBLESSEE") having an office at 219 East 44th Street, New York, New
York 10017, Attention: President.
W I T N E S S E T H:
WHEREAS, by Agreement of Lease, dated as of January 1, 1959, between
Webb & Knapp, Inc. and Carl E. Siegesmund, as landlord, and 43rd St. Estates
Corp. ("PRIME SUBLESSOR"), as tenant, as modified by a letter agreement, dated
August 16, 1961, between Greenpoint Terminal Warehouse, Inc. ("GROUNDLESSOR";
successor by conveyance from Webb & Knapp, Inc. and Carl E. Siegesmund) and
Prime Sublessor, as modified by a Modification of Lease, dated as of September
13, 1961, between Groundlessor and Prime Sublessor, as modified by a
Modification of Lease, dated as of December 20, 1961, between Groundlessor and
Prime Sublessor, as modified (along with a related lease) by an Agreement, dated
January 23, 1963, among Groundlessor, Prime Sublessor and URN Realty Corp., as
modified (along with a related lease) by an Agreement, dated January 29, 1964,
among Groundlessor, Prime Sublessor and URN Realty Corp., and as modified by
Agreement, dated May 10, 1966, among Groundlessor, Prime Sublessor, and Victor
Whitehorn, as leasehold mortgagee (such Agreement of Lease, as so modified, is
the "MAJOR GROUND LEASE");
WHEREAS, by Agreement of Lease, dated August 15, 1961, between Prime
Sublessor, as landlord, and MPO Videotronics, Inc. ("MPO"), as tenant, as
amended by a letter agreement, dated August 31, 1961, between Groundlessor and
MPO (affecting the fourth to the seventh floors) and a letter agreement, dated
December 29, 1961, between Prime Sublessor and MPO, as modified by an Agreement
of Modification of Lease, dated May 31, 1962, between Prime Sublessor and MPO,
as assigned (as indicated in a subsequent lease amendment) by MPO to MPO Grand
Central Studios, Inc. ("MPO GRAND"), as amended by a First (sic) Amendment of
Agreement of Lease, dated July 20, 1970, between Prime Sublessor and MPO Grand,
as amended by a Second (sic) Amendment, dated as of November 26, 1973, between
Prime Sublessor and MPO Grand, as amended by an Amendment of Lease, dated as of
January 1, 1982, between Prime Sublessor and Columbia Pictures Industries, Inc.
("COLUMBIA PICTURES"; successor in interest to MPO Grand) (such Agreement of
Lease, as so amended, modified and assigned, is the "PRIME SUBLEASE");
WHEREAS, by Sublease Agreement, effective as of January 1, 1982,
between Columbia Pictures, as landlord, and Bell & Howell/Columbia Pictures
Video Services, as tenant, as assigned and assumed pursuant to an Assignment of
Sublease Acceptance of Assignment, dated December 12, 1984, between Bell &
Howell/Columbia Pictures Video Services and Scanline Communications, as
supplemented by that certain inter-office memorandum, dated May 28, 1985, as
amended by extension letter dated April 3, 1989 from Columbia Pictures to
Scanline Communications, and as assigned and assumed pursuant to an Assignment,
Assumption and Acceptance of Lease, dated as of May 5, 1992, between Scanline
Communications and Third Tier Sublessor, and as further amended by Amendment No.
1 effective the date hereof between Sony Pictures Entertainment, Inc. and Third
Tier Sublessor (such Sublease Agreement, as so assigned, assumed, extended and
amended, is the "SUB-SUBLEASE"), Sony Pictures Entertainment, Inc. ("SUB-
SUBLESSOR"; successor in interest to Columbia Pictures) leased to Third Tier
Sublessor 34,359.40
square feet consisting of: the entire seventh floor consisting of 13,127
square feet; the entire eighth floor consisting of 8,060 square feet; a
3,194.50 square foot portion of the basement; a 5,839.90 square foot portion
of the fourth floor; and a 4,138 square foot portion of the tenth floor; all
in the building ("BUILDING") known as and located at 217-223 East 43rd
Street/214-226 East 44th Street, New York, New York; and
WHEREAS, Third Tier Sublessor desires to sublet to Third Tier
Sublessee, and Third Tier Sublessee desires to hire from Third Tier Sublessor, a
portion of the premises demised under the Sublease upon the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
provided, Third Tier Sublessor and Third Tier Sublessee hereby agree as follows:
1. DEMISED PREMISES.
1.01 Third Tier Sublessor hereby sublets to Third Tier Sublessee, and
Third Tier Sublessee hereby sublets and hires from Third Tier Sublessor, the
premises (the "PREMISES") comprising a portion of the basement (comprising
approximately 1,962.50 square feet), a portion of the 4th floor (comprising
approximately 3,852.20 square feet), the entire 7th floor (comprising
approximately 13,127 square feet) and the entire 8th floor (comprising
approximately 8,060 square feet) in the Building as designated by cross-hatching
on the floor plans annexed to this Third Tier Sublease as EXHIBIT A and hereby
incorporated in and made a part of this Third Tier Sublease by reference, for
the term hereinafter stated and for the Rent hereinafter reserved (as
hereinafter defined), subject to all of the terms and provisions hereinafter
provided or incorporated in this Third Tier Sublease by reference.
1.02 Third Tier Sublessee agrees to accept the Premises on the
Commencement Date (as hereinafter defined) in its then condition and Third Tier
Sublessor shall not be obligated to perform any work or furnish any materials
in, to or about the Premises in order to prepare the Premises for occupancy by
Third Tier Sublessee or otherwise. Third Tier Sublessee hereby releases Third
Tier Sublessor from any and all liability resulting from (A) any latent or
patent defects in the Premises, (B) the failure of the Premises to comply with
any legal requirements applicable thereto or (C) the status of the title to the
Premises. Third Tier Sublessee acknowledges that Third Tier Sublessor has made
no statements, representations, covenants or warranties with respect to (x) the
condition or manner of construction of the Building or any improvements
constructed in the Premises, (y) the uses or purposes for which the Premises may
be lawfully occupied, or (z) any encumbrances, covenants, restrictions or
agreements affecting title to the Premises. Third Tier Sublessee also agrees
that, in executing this Third Tier Sublease, it has not relied upon or been
induced by any statements, representations, covenants or warranties of any
person other than those, if any, set forth expressly in this Third Tier
Sublease. Third Tier Sublessee has relied solely on such statements,
representations, covenants and warranties as are expressly made herein and on
such investigations, examinations and inspections as Third Tier Sublessee has
chosen to make or has made.
1.03 Third Tier Sublessor represents and warrants to Third Tier
Sublessee that (A) the Sub-Sublease is in full force and effect and a true copy
of the most recent rent bill relating to the premises of which the Premises is a
part is attached as a part of Exhibit B-3, (B) to Third Tier Sublessor's
knowledge (i) Third Tier Sublessor and Sub-sublessor are not in default under
the Sub-
sublease, (ii) no condition exists which, with the passage of time, or the
giving of notice, or both, would constitute a default under the Sub-sublease
and (iii) the Major Ground Lease and the Prime Sublease are in full force and
effect, no party is in default under the Mayor Ground Lease or the Prime
Sublease and no condition exists which, with the passage of time, or the
giving of notice, or both, would constitute a default under the Mayor Ground
Lease or the Prime Sublease and (C) basic rent under the Sub-sublease is
$15,946.66 per month through December 31, 1999.
1.04 Any and all alterations to, work to be performed in or materials
to be supplied for the Premises shall be made, performed and supplied at the
sole cost and expense of Third Tier Sublessee and in conformance with all of the
terms and provisions of this Third Tier Sublease, the Major Ground Lease, the
Prime Sublease and the Sub-sublease.
2. TERM.
2.01 The term ("TERM") of this Third Tier Sublease shall commence
November 22, 1996 ("COMMENCEMENT DATE") and, unless earlier terminated as herein
provided, shall expire on December 30, 1999 ("EXPIRATION DATE").
Notwithstanding the foregoing, if prior to the Commencement Date Third Tier
Sublessee takes possession of or causes the commencement of any work or the
moving of any property in, into or about the Premises, the date upon which Third
Tier Sublessee took or caused to be taken any such action shall be deemed to be
the Commencement Date under this Third Tier Sublease.
2.02 Third Tier Sublessor and Third Tier Sublessee shall, upon the
request of either of them, execute a statement prepared by Third Tier Sublessor,
in recordable form, setting forth the Commencement Date.
2.03 Except as otherwise provided in paragraph 2.03.1, if the term of
the Sub-sublease is terminated for any reason prior to the Expiration Date, this
Third Tier Sublease shall thereupon be terminated ipso facto without any
liability of Third Tier Sublessor to Third Tier Sublessee by reason of such
early termination. References in this Third Tier Sublease to the "termination"
of this Third Tier Sublease include the stated expiration of the Term and any
earlier termination thereof pursuant to the provisions of this Third Tier
Sublease, the Major Ground Lease, the Prime Sublease, the Sub-sublease or by
law. Except as otherwise expressly provided in this Third Tier Sublease with
respect to those obligations of Third Tier Sublessee which by their nature or
under the circumstances can only be, or under the provisions of this Third Tier
Sublease may be, performed after the termination of this Third Tier Sublease,
the Term and estate granted hereby shall end at noon on the date of termination
of this Third Tier Sublease as if such date were the Expiration Date, and
neither party shall have any further obligation or liability to the other after
such termination. Notwithstanding the foregoing, any liability of Third Tier
Sublessee to make any payment under this Third Tier Sublease, whether of Fixed
Rent, Additional Rent (both as hereinafter defined) or otherwise, which shall
have accrued prior to the termination of this Third Tier Sublease, shall survive
the termination of this Third Tier Sublease.
2.03.1 Third Tier Sublessor shall not amend or cancel the Major
Ground Lease, the Prime Sublease or the Sub-sublease or breach any provision of
any of such leases (which breach is not caused by any breach by Third Tier
Sublessee hereunder) and Third Tier Sublessor shall continue to pay rent and
additional rent required to be paid by Third Tier Sublessor thereunder. If Third
Tier Sublessor shall fail to pay any rent or additional rent required to be paid
by Third Tier
Sublessor under any of the Major Ground Lease, the Prime Sublease or the
Sub-sublease, other than any rent or additional rent that Third Tier
Sublessee has failed to pay to Third Tier Sublessor under this Third Tier
Sublease, it shall be a breach of this Third Tier Sublease.
2.04 Third Tier Sublessee waives the right to recover any damages
which may result from Third Tier Sublessor's failure to deliver possession of
the Premises on the Commencement Date. If Third Tier Sublessor shall be unable
to give possession of the Premises on the Commencement Date, and provided Third
Tier Sublessee is not responsible for such inability to give possession, the
applicable Fixed Rent and Additional Rent reserved and covenanted to be paid
herein shall not commence until the date on which Third Tier Sublessor shall be
able to give possession of the Premises to Third Tier Sublessee, and no such
failure to give possession on such scheduled date shall in any wise affect the
validity of this Third Tier Sublease or the obligations of Third Tier Sublessee
hereunder or give rise to any claim for damages by Third Tier Sublessee or claim
for rescission of this Third Tier Sublease, nor shall the same in any way be
construed to extend the Term. If permission is given to Third Tier Sublessee to
enter into the possession of the Premises, Third Tier Sublessee covenants and
agrees that such occupancy shall be deemed to be under all the terms, covenants,
conditions and provisions of this Third Tier Sublease, including the covenant to
pay Rent.
2.05 The parties agree that this Article 2 constitutes an express
provision as to the time at which Third Tier Sublessor shall deliver possession
of the Premises to Third Tier Sublessee, and Third Tier Sublessee hereby waives
any rights to rescind this Third Tier Sublease which Third Tier Sublessee might
otherwise have pursuant to Section 223-a of the Real Property Law of the State
of New York or any other law of like import now or hereafter in force.
2.06 Notwithstanding anything to the contrary in this Third Tier
Sublease, Third Tier Sublessee agrees (at no cost to Third Tier Sublessor) to
permit Third Tier Sublessor to (1) maintain Third Tier Sublessor's equipment
(the "Third Tier Sublessor Equipment") on the 7th and 8th floors of the Premises
through March 30, 1997 (for the purpose of sale or auction off-site of the Third
Tier Sublessor Equipment) and have access to the Premises, together with Third
Tier Sublessor's invitees, on one business day's prior notice, for the purpose
of inspecting and removing the Third Tier Sublessor Equipment and (2) maintain
Third Tier Sublessor's equipment and furniture, and Third Tier Sublessor's
employees to operate such equipment, in the sound rooms (the "Sound Rooms")
designated by Third Tier Sublessor on the 4th floor of the Premises through
February 28, 1997. Third Tier Sublessee will protect and insure the Third Tier
Sublessor Equipment while on the Premises (at no cost to Third Tier Sublessor)
on Third Tier Sublessee's property insurance policy against loss or damage, name
Third Tier Sublessor as an additional insured/loss payee on such policy and
deliver a certificate of insurance to such effect on the Commencement Date.
Third Tier Sublessee will not permit any employee or invitee of Third Tier
Sublessee to enter the Sound Rooms prior to the removal of Third Tier
Sublessor's equipment therefrom on or before February 28, 1997. Third Tier
Sublessor shall notify Third Tier Sublessee, in writing, upon removal of all of
its equipment from the Sound Rooms.
2.07 Third Tier Sublessee shall have the option (the "Renewal Option")
to extend the term of this Third Tier Sublease for one additional period
commencing on December 31, 1999 and ending on December 30, 2012 (the "Renewal
Term"), provided that (a) this Third Tier Sublease shall not have been
previously terminated, (b) no Event of Default shall have occurred and be
continuing (x) on the date Third Tier Sublessee gives Third Tier Sublessor
written notice (the
"Renewal Notice") of Third Tier Sublessee's election to exercise the Renewal
Option, and (y) on the Expiration Date, (c) at Third Tier Sublessor's
request, Third Tier Sublessee shall cause Sub-Sublessor to (x) permit Third
Tier Sublessor to assign its entire interest in the Sub-sublease to Third
Tier Sublessee and Third Tier Sublessee shall assume Third Tier Sublessor's
obligations under the Sub-sublease, the Prime Sublease and the Major Ground
Lease and (y) fully and completely release Third Tier Sublessor from its
obligations under the Sub-sublease, the Prime Sublease and the Major Ground
Lease whereupon Third Tier Sublessor shall be completely released from its
obligations under this Third Tier Sublease and this Third Tier Sublease shall
be terminated and of no further force and effect, (d) at Third Tier
Sublessor's option, the Premises demised hereunder for the Renewal Term shall
include either one or both of the following (i) the portion of the 10th floor
subleased by Third Tier Sublessor to Photo-Magnetic Sound Studios, Inc. and
(ii) the entire Prime Lease Premises (as defined in the Sub-sublease) or any
portion thereof and (e) all of the conditions to the exercise of the second
renewal option under the Sub-sublease shall have been complied with or
otherwise satisfied. With respect to item (c) of this paragraph 2.06, it is
the agreement of the parties that at Third Tier Sublessor's option, Third
Tier Sublessee may only exercise the Renewal Option if it is able to secure
the full and complete release of Third Tier Sublessor from its obligations
under this Third Tier Sublease, the Sub-Sublease, the Prime Sublease and the
Major Ground Lease. With respect to item (d) of this paragraph 2.06, it is
the agreement of the parties that, if Third Tier Sublessee exercises the
Renewal Option, at the option of Third Tier Sublessor, Third Tier Sublessee
shall be required to sublease hereunder for the Renewal Term, in addition to
the Premises, all or any portion of any other space in the Building which
Third Tier Sublessor subleases under the Sub-sublease pursuant to the second
renewal option under the Sub-sublease. The Renewal Option shall be
exercisable by Third Tier Sublessee delivering the Renewal Notice to Third
Tier Sublessor not later than February 1, 1999 and not earlier than December
1, 1998. Time is of the essence with respect to the giving of the Renewal
Notice. The Renewal Option may be exercised only once. If Third Tier
Sublessee exercises the Renewal Option, Third Tier Sublessee shall pay Fixed
Rent and all other charges provided under the Sub-sublease in proportion to
the amount of space leased by Third Tier Sublessee during the Renewal Term in
addition to all other charges provided under this Third Tier Sublease
(excluding Fixed Rent and the charges provided for in the Sub-sublease)(it
being the intent of the parties that Third Tier Sublessor shall incur no
expense with respect to the premises subleased by Third Tier Sublessee during
the Renewal Term) and the Renewal Term shall otherwise be on the same terms,
covenants and conditions as those contained in this Third Tier Sublease,
modified to reflect any increase in the size of the Premises.
Notwithstanding anything in this paragraph 2.06 to the contrary, the Renewal
Option is subject to all other conditions to the exercise of the renewal
option in the Sub-sublease.
3. RENT.
3.01 The rent ("RENT") reserved for the Term under this Third Tier
Sublease shall consist of the following:
(i) annual fixed rent ("FIXED RENT") in the amount of (A) One
Hundred Fifty Thousand Three Hundred Eighty-Nine and 76/100 ($150,389.76)
Dollars for the period beginning on the Commencement Date and ending on December
30, 1999, which shall be payable, in advance, in equal monthly installments of
$12,532.48 each. The first installment of Fixed Rent shall be payable by Third
Tier Sublessee upon the execution of this Third Tier Sublease and the second and
subsequent installments shall be payable on the first (1st) day of the first
month following the Commencement Date and subsequent months, respectively, of
the Term. If the
Commencement Date shall be a date other than the first day of a calendar
month, the second installment of Fixed Rent (but no other installment)
payable by Third Tier Sublessee hereunder shall be reduced to an amount which
bears the same ratio to the first installment of Fixed Rent payable hereunder
as the number of days from and including the Commencement Date to the end of
the calendar month in which the Commencement Date occurs bears to the total
number of days in such calendar month; and
(ii) additional rent ("ADDITIONAL RENT") in an amount equal to
the sum of (A) 78.59%, of any and all sums of money, other than the annual fixed
rental ("UNDERLYING FIXED RENT") under the Sub-sublease, which is or may become
payable by Third Tier Sublessor to Sub-sublessor under the Sub-sublease
("UNDERLYING ADDITIONAL RENT"); (B) any and all other sums payable by Third Tier
Sublessee to Third Tier Sublessor hereunder; and (C) any and all charges of Sub-
sublessor under the Sub-sublease or of any other third party (including without
limitation EUE Screen Gems Ltd.) for overtime, additional services or any other
matter relating to the Premises, or arising out of Third Tier Sublessee's
failure to perform its obligations hereunder. Additional Rent shall be payable
by Third Tier Sublessee on the date fifteen (15) days before the date on which
the corresponding Underlying Additional Rent is payable to Sub-sublessor under
the Sub-sublease. All other Additional Rent shall be payable upon demand.
Third Tier Sublessor shall have the same remedies with respect to any default by
Third Tier Sublessee in the payment of Additional Rent as are provided in this
Third Tier Sublease, the Sub-sublease or applicable law with respect to any
nonpayment of rent.
(iii) Anything in paragraphs 3.01(i) and 3.01 (ii)
notwithstanding, the obligation of Third Tier Sublessee to pay Fixed Rent or any
Additional Rent in respect of real estate taxes shall begin on January 1, 1997,
it being the intent of Third Tier Sublessor and Third Tier Sublessee that Third
Tier Sublessor waives the right to collect Rent and Additional Rent in respect
of real estate taxes due for the period from the Commencement Date through
December 31, 1996.
3.02 The Fixed Rent and, except as otherwise specifically provided in
this Third Tier Sublease, the Additional Rent, shall be paid by Third Tier
Sublessee at the office of Third Tier Sublessor set forth above or such other
place as Third Tier Sublessor may designate, without prior notice or demand
therefor and without any abatement, deduction or setoff. Third Tier Sublessor
may at any time and from time to time by notice direct Third Tier Sublessee to
pay all or any portion of the Fixed Rent or Additional Rent on Third Tier
Sublessor's behalf directly to the Sub-sublessor or another party at such
address as Third Tier Sublessor may at any time and from time to time direct.
3.03 Third Tier Sublessee shall pay all Rent when due, in lawful money
of the United States which shall be legal tender for the payment of all debts,
public and private, at the time of payment. All sums due and payable as Rent
shall from and after the due date bear interest at four percent (4%) above the
base rate charged by Citibank, N.A. (or any successor thereto) ("PRIME RATE"),
from time to time, but in no event in excess of the maximum legal rate of
interest permitted from time to time under law to be charged, provided, however,
that no further interest shall be payable upon such interest. All interest
accrued under this subsection as hereinabove provided shall be deemed to be
Additional Rent payable hereunder and due at such time or times as the Rent with
respect to which such interest shall have accrued shall be payable under this
Third Tier Sublease.
3.04 If all or any portion of the Rent shall be or become
uncollectible, reduced, or required to be refunded because of any Legal
Requirements (as herein defined), Third Tier Sublessee shall enter into such
agreement(s) and take such other steps (without additional expense to Third Tier
Sublessee) as Third Tier Sublessor may request and as may be legally permissible
to permit Third Tier Sublessor to collect the maximum Rent which from time to
time during the continuance of such legal rent restriction may be legally
permissible (and not in excess of the amounts reserved therefor under this Third
Tier Sublease). Upon the termination of such legal rent restriction, (i) the
Rent shall become and thereafter be payable in accordance with the amounts
reserved herein for the periods following such termination, and (ii) Third Tier
Sublessee shall pay to Third Tier Sublessor, to the maximum extent legally
permissible, an amount equal to (A) the Rent which would have been paid pursuant
to this Third Tier Sublease but for such legal rent restriction, less (B) the
Rent paid by Third Tier Sublessee during the period such legal rent restriction
was in effect.
3.05 Third Tier Sublessee acknowledges that the late payment by Third
Tier Sublessee to Third Tier Sublessor of Rent and other sums due hereunder and
the failure to deliver on time items required to be delivered will cause Third
Tier Sublessor to incur costs not contemplated by this Third Tier Sublease, the
exact amount of which will be extremely difficult to ascertain. Such costs may
include, but are not limited to, administrative, processing and accounting
charges, and late charges which may be imposed on Third Tier Sublessor.
Accordingly, if any sum due from Third Tier Sublessee or any item due from Third
Tier Sublessee hereunder shall not be received by Third Tier Sublessor or Third
Tier Sublessor's designee within five (5) days after the date due, Third Tier
Sublessee shall pay to Third Tier Sublessor, in addition to any interest on
delinquent amounts provided above, a late charge equal to the greater of two
percent (2%) of the delinquent amount or $100.00, as liquidated damages. The
parties agree that such late charge represents a fair and reasonable estimate of
the costs Third Tier Sublessor will incur by reason of late payment or late
delivery by Third Tier Sublessee. Acceptance of such late charge shall not
constitute a waiver of Third Tier Sublessee's default with respect to such
overdue amount or other item, nor prevent Third Tier Sublessor from exercising
any other rights and remedies granted hereunder or by law to Third Tier
Sublessor.
4. USE.
4.01 Third Tier Sublessee shall occupy and use the Premises only for
such purposes as are permitted under the terms and provisions of the Sub-
sublease and for no other purpose, and in all respects only as permitted under
the terms and provisions of this Third Tier Sublease, the Major Ground Lease and
the Prime Sublease, including, without limiting the generality of the foregoing,
the rules and regulations, if any, under the Major Ground Lease, the Prime
Sublease, the Sub-sublease, and any and all laws, statutes, ordinances, orders,
regulations and requirements of all federal, state and local governmental,
public or quasi-public authorities, whether now or hereafter in effect, which
may be applicable to or in any way affect the Building or the Premises or any
part thereof and all requirements, obligations and conditions of all instruments
of record on the date of this Third Tier Sublease affecting the Building or the
Premises (collectively, "LEGAL REQUIREMENTS").
4.02 Third Tier Sublessee shall not, without the prior consent of
Third Tier Sublessor, Sub-sublessor, Prime Sublessor and Groundlessor do or
permit anything to be done
which may result in a violation of the terms of this Third Tier Sublease, the
Sub-sublease, the Prime Sublease or the Major Ground Lease or which may make
Third Tier Sublessor liable for any damages, claims, fines, penalties, costs
or expenses thereunder.
5. MAJOR GROUND LEASE, PRIME SUBLEASE AND SUB-SUBLEASE.
5.01 This Third Tier Sublease and all of Third Tier Sublessee's rights
hereunder are and shall remain in all respects subject and subordinate to
(i) all of the terms and provisions of the Major Ground Lease, the Prime
Sublease and the Sub-sublease, substantially true and complete copies of which
have been delivered to and carefully examined by Third Tier Sublessee and are
attached hereto as, respectively, EXHIBIT B-1, EXHIBIT B-2 and EXHIBIT B-3,
(ii) any and all amendments to the Major Ground Lease, the Prime Sublease and
the Sub-sublease, or supplemental agreements relating to any of the same
hereafter made, except for any such amendments to or supplemental agreements
relating to the Sub-sublease between Sub-sublessor and Third Tier Sublessor
which contravene any express rights granted to Third Tier Sublessee hereunder,
and (iii) any and all matters to which the tenancy of Third Tier Sublessor, as
tenant under the Sub-sublease, is or may be subordinate. Third Tier Sublessee
shall in no case have any rights under this Third Tier Sublease greater than
Third Tier Sublessor's rights as tenant under the Sub-sublease. The foregoing
provisions shall be self-operative and no further instrument of subordination
shall be necessary to effectuate such provisions unless required by
Groundlessor, Prime Sublessor, Sub-sublessor or Third Tier Sublessor, in which
event Third Tier Sublessee shall, upon demand by Groundlessor, Prime Sublessor,
Sub-sublessor or Third Tier Sublessor at any time and from time to time,
execute, acknowledge and deliver to Third Tier Sublessor, Sub-sublessor, Prime
Sublessor and Groundlessor any and all instruments that Third Tier Sublessor,
Sub-sublessor, Prime Sublessor or Groundlessor, in the sole discretion of any of
them, may deem necessary or proper to confirm such subordination of this Third
Tier Sublease, and the rights of Third Tier Sublessee hereunder. If Third Tier
Sublessee shall fail to execute, acknowledge and/or deliver any such instrument
of subordination within ten (10) days after Groundlessor's, Prime Sublessor's,
Sub-sublessor's or Third Tier Sublessor's demand therefor, Third Tier Sublessor,
in addition to any other remedies provided under this Third Tier Sublease, the
Sub-sublease, the Prime Sublease, the Major Ground Lease and applicable law, may
execute, acknowledge and deliver such instrument, as Third Tier Sublessee's
attorney-in-fact. Third Tier Sublessee hereby irrevocably constitutes and
appoints Third Tier Sublessor as Third Tier Sublessee's proper and lawful
attorney-in-fact for such purpose, such appointment being coupled with an
interest.
5.02 Third Tier Sublessee shall observe and perform, (i) for the
benefit of Sub-sublessor and Third Tier Sublessor, each and every term,
covenant, condition and agreement of the Sub-sublease, which Third Tier
Sublessor is required to observe or perform with respect to the Premises as
tenant under the Sub-sublease, except for the covenants of Third Tier Sublessor
to pay Sub-sublessor the Underlying Fixed Rent and Underlying Additional Rent,
(ii) for the benefit of Prime Sublessor, Sub-sublessor and Third Tier Sublessor,
each and every term, covenant, condition and agreement of the Prime Sublease
which Third Tier Sublessor is required to observe or perform with respect to the
Premises as tenant under the Sub-sublease and (iii) for the benefit of
Groundlessor, Prime Sublessor, Sub-sublessor and Third Tier Sublessor, each and
every term, covenant, condition and agreement of the Major Ground Lease which
Third Tier Sublessor is required to observe or perform with respect to the
Premises as tenant under the Sub-sublease. Except as otherwise specifically
provided in this Third Tier Sublease, all of the terms, covenants,
conditions and agreements which Third Tier Sublessor is required to observe
or perform with respect to the Premises under the Major Ground Lease, the
Prime Sublease and the Sub-sublease are hereby incorporated herein by
reference and deemed to constitute terms, covenants, conditions and
agreements which Third Tier Sublessee is required to observe and perform
under this Third Tier Sublease as if set forth herein at length, mutatis
mutandis; Third Tier Sublessor may exercise and shall be entitled to all of
the rights, powers, privileges and remedies reserved to (x) Groundlessor
under the Major Ground Lease, (y) Prime Sublessor under the Prime Sublease
and (z) Sub-sublessor under the Sub-sublease to the same extent as if fully
set forth herein at length, including, without limitation, all releases from
liability to, respectively, Groundlessor, Prime Sublessor and Sub-sublessor
thereunder and all rights and remedies arising out of, or with respect to,
any default by Third Tier Sublessee in payment of Rent hereunder or the
observance or performance of the terms, covenants, conditions and agreements
of this Third Tier Sublease, the Sub-sublease, the Prime Sublease and the
Major Ground Lease (except as specifically provided herein). Notwithstanding
the foregoing, any inconsistencies between the terms of this Third Tier
Sublease, the Sub-sublease, the Prime Sublease and the Major Ground Lease
which shall result from the foregoing incorporation shall be resolved in
favor of this Third Tier Sublease, provided, however, that if such
construction of terms would cause Third Tier Sublessor to be in default under
the terms of the Sub-sublease, the Prime Sublease and/or the Major Ground
Lease, then such inconsistency shall be resolved in favor of the superior
lease out of the Sub-sublease, the Prime Sublease and the Major Ground Lease
under which Third Tier Sublessor would be in default by such construction of
terms.
5.03 Third Tier Sublessee hereby assumes Third Tier Sublessor's
obligations to perform and makes itself personally liable to Sub-sublessor,
Prime Sublessor and Groundlessor for the performance of, all of the terms,
covenants, conditions and agreements to be performed or observed during the Term
on the part of Third Tier Sublessor under, respectively, the Sub-sublease, the
Prime Sublease and the Major Ground Lease with respect to the Premises, except
as herein provided. Third Tier Sublessee shall, promptly upon the request of
Third Tier Sublessor, Sub-sublessor, Prime Sublessor and/or Groundlessor,
execute, acknowledge and deliver to Third Tier Sublessor, Sub-sublessor, Prime
Sublessor and/or Groundlessor, as the case may be, an instrument confirming the
foregoing undertaking in form and content satisfactory to the party or parties
making such request in form suitable for recording.
5.04 Nothing contained in this Article 5 is intended or shall be
construed to confer upon Third Tier Sublessee any rights, powers, privileges or
remedies which are not specifically conferred upon Third Tier Sublessee under
the terms and provisions of this Third Tier Sublease, and, unless specifically
provided otherwise herein, none of the rights, powers, privileges or remedies of
(x) Third Tier Sublessor as tenant under the Sub-sublease including without
limitation any option to renew or right of first refusal, (y) Sub-sublessor as
tenant under the Prime Sublease, and (z) Prime Sublessor as tenant under the
Major Ground Lease shall inure to the benefit of Third Tier Sublessee hereunder.
5.05 If Third Tier Sublessee shall at any time fail to make any
payment or perform any act on its part to be made or performed hereunder, then
Third Tier Sublessor, after two (2) days' notice to Third Tier Sublessee (or, in
case of any emergency, on such notice, or without notice, as may be reasonable
under the circumstances) and without waiving, or releasing Third Tier Sublessee
from, any obligation of Third Tier Sublessee hereunder, may (but shall not be
required to) make any payment or perform any act on Third Tier Sublessee's part
to be made or performed as
in this Third Tier Sublease provided, and may enter upon the Premises for the
purpose thereof and take all such action thereon as may be necessary
therefor. Third Tier Sublessee shall pay to Third Tier Sublessor, upon
demand, the amount of all costs and expenses incurred by Third Tier Sublessor
in the payment or performance of any such obligations of Third Tier
Sublessee.
6. SERVICE.
6.01 Except as otherwise specifically provided in this Third Tier
Sublease, Third Tier Sublessee shall be entitled during the Term to receive all
services, utilities, repairs and facilities which (x) Sub-sublessor is required
to provide pursuant to the Sub-sublease, (y) Prime Sublessor is required to
provide pursuant to the Prime Sublease and (z) Groundlessor is required to
provide pursuant to the Major Ground Lease, insofar as such services, utilities,
repairs and facilities pertain to the Premises. Third Tier Sublessor shall have
no liability of any nature whatsoever to Third Tier Sublessee as a consequence
of the failure or delay on the part of (x) Sub-sublessor in performing any or
all of its obligations under the Sub-sublease, (y) Prime Sublessor in performing
any or all of its obligations under the Prime Sublease and (z) Groundlessor in
performing any or all of its obligations under the Major Ground Lease,
including, without limiting the generality of the foregoing, any action or
omission by, respectively, Sub-sublessor, Prime Sublessor and/or Groundlessor
which results in a breach of the covenant of quiet enjoyment set forth in,
respectively, the Sub-sublease, the Prime Sublease and/or the Major Ground
Lease, and, under no circumstances shall Third Tier Sublessee have any right to
require or obtain the performance by Third Tier Sublessor of any obligations of
Sub-sublessor, Prime Sublessor and/or Groundlessor under, respectively, the Sub-
sublease, the Prime Sublease and/or the Major Ground Lease or otherwise. Third
Tier Sublessee's obligations under this Third Tier Sublease shall not be
impaired, nor shall the performance thereof be excused, because of any failure
or delay on the part of Sub-sublessor, Prime Sublessor and/or Groundlessor in
performing its obligations under, respectively, the Sub-sublease, the Prime
Sublease and/or the Major Ground Lease.
6.02 If at any time during the Term (x) Sub-sublessor shall default in
any of its obligations under the Sub-sublease, (y) Prime Sublessor shall default
in any of its obligations under the Prime Sublease or (z) Groundlessor shall
default in any of its obligations under the Major Ground Lease, to furnish
facilities, services or utilities or to make repairs to the Premises, then, upon
Third Tier Sublessor's receipt of a written notice from Third Tier Sublessee
specifying such default, Third Tier Sublessor shall, at Third Tier Sublessee's
sole cost and expense, use its reasonable efforts to cause Sub-sublessor, Prime
Sublessor or Groundlessor, as the case may be, to cure such default. Any action
or proceeding instituted by Third Tier Sublessor against Sub-sublessor, Prime
Sublessor or Groundlessor, as the case may be, to enforce such rights shall be
conducted at the expense of Third Tier Sublessee, provided, however, that Third
Tier Sublessor shall bear its fair share of such expense to the extent such
action or proceeding does not relate to the Premises.
7. UTILITY SERVICES AND ELECTRIC
ENERGY CHARGE ADJUSTMENTS.
7.01 Electric energy will be furnished to the Premises through
presently existing electrical facilities in accordance with Article 6 above for
Third Tier Sublessee's reasonable use of such lighting and other electrical
fixtures, appliances and equipment presently existing in the Premises or as
Third Tier Sublessor may permit Third Tier Sublessee to install in the Premises.
Upon Third Tier Sublessor's request, Third Tier Sublessee shall open an account
with Con Edison in order to pay Con Edison directly for electricity in respect
of the Premises; provided, however, that the parties acknowledge that on the
Commencement Date EUE Screen Gems Ltd. provides electricity for a portion of the
Premises and bills Third Tier Sublessor for such electricity which cost shall be
paid by Third Tier Sublessee pursuant to paragraph 3.01(b).
7.02 Third Tier Sublessee shall pay all charges, surcharges and other
fees (however denominated) for water, steam, gas, electricity, telephone and
other utility services used in the Premises during the Term.
8. FIXTURES.
8.01 All movable property, furniture, furnishings and trade fixtures
furnished by or at the sole expense of Third Tier Sublessee ("THIRD TIER
SUBLESSEE'S PROPERTY"), other than those affixed to the Premises so that they
cannot be removed without damage and other than those replacing an item
theretofore furnished and paid for by Third Tier Sublessor or Sub-sublessor or
for which Third Tier Sublessee has received a credit, shall remain the property
of Third Tier Sublessee, and may, unless prohibited pursuant to the Sub-
sublease, be removed by Third Tier Sublessee from time to time prior to the
termination of this Third Tier Sublease.
8.02 All Alterations (as hereinafter defined) made by either party,
including all paneling, decorations, partitions, railings, mezzanine floors,
carpeting, galleries and the like, affixed to the Premises shall become the
property of Third Tier Sublessor or Sub-sublessor and shall be surrendered with
the Premises upon the termination of this Third Tier Sublease. Notwithstanding
the foregoing, Third Tier Sublessor may elect to require Third Tier Sublessee to
remove any Alterations made to the Premises including, without limitation, any
Alteration constructed or installed by Third Tier Sublessee, on behalf of Third
Tier Sublessee or at Third Tier Sublessee's request, at Third Tier Sublessee's
expense, by giving written notice to Third Tier Sublessee not later than five
(5) days prior to the date set forth herein for the termination of this Third
Tier Sublease.
8.03 In any case where Third Tier Sublessee removes any of Third Tier
Sublessee's Property or any Alterations, Third Tier Sublessee shall repair all
damages caused by said removal and shall restore the Premises to good order,
repair and condition. Upon failure of Third Tier Sublessee to do so, Third Tier
Sublessor may repair such damage and restore the Premises to good order, repair
and condition at Third Tier Sublessee's sole expense, and Third Tier Sublessee
shall reimburse Third Tier Sublessor therefor upon demand.
8.04 Notwithstanding anything herein to the contrary, upon Third Tier
Sublessee's failure to remove any of the Third Tier Sublessee's Property or any
Alterations in accordance with subsections 8.01 and 8.02 above, or upon the
termination of this Third Tier Sublease prior to the date set forth herein for
such termination, Sub-sublessor or Third Tier Sublessor may, at Third Tier
Sublessee's expense, (i) remove all such property and Alterations described in
subsections 8.01 and 8.02 above, (ii) cause the same to be placed in storage or
otherwise disposed of, and (iii) repair any damage caused by said removal and
restore the Premises to good order, repair and condition. Third Tier Sublessee
shall reimburse Third Tier Sublessor for all of the aforesaid expenses upon
demand.
8.05 Notwithstanding anything herein to the contrary, any items of
Third Tier Sublessee's Property or any Alterations not removed by Third Tier
Sublessee may, at the election of Third Tier Sublessor, be deemed to have been
abandoned by Third Tier Sublessee, and Third Tier Sublessor may retain and
dispose of said items at Third Tier Sublessee's cost and expense without any
liability to Third Tier Sublessee and without accounting to Third Tier Sublessee
for the proceeds thereof.
8.06 The provisions of this Article 8 shall survive the termination of
this Third Tier Sublease.
9. ALTERATIONS AND REPAIRS.
9.01 Third Tier Sublessee shall make no alterations, installations,
additions or improvements (collectively, "ALTERATIONS") in or about the Premises
without the prior written consent of Third Tier Sublessor in each instance. Any
Alterations in or about the Premises shall be performed by Third Tier Sublessee,
at its sole cost and expense, and in compliance with the following requirements:
(a) Third Tier Sublessee, at its sole expense, shall comply with all
of the provisions of this Third Tier Sublease, the Sub-sublease, the Prime
Sublease and the Major Ground Lease pertaining to the making of Alterations,
including, without limiting the generality of the foregoing, the provisions
requiring the prior written consent of Sub-sublessor, Prime Sublessor and
Groundlessor before any Alterations may be made in or about the Premises;
(b) Third Tier Sublessee shall submit to Third Tier Sublessor, for
its prior written approval, plans and specifications for such proposed
Alterations, together with the name of the proposed contractor and all proposed
subcontractors, and all other documentation required to be submitted by Third
Tier Sublessor to (x) Sub-sublessor under the Sub-sublease, (y) Prime Sublessor
under the Prime Sublease and (z) Groundlessor under the Major Ground Lease in
respect of such Alterations;
(c) Prior to the commencement of any Alteration, Third Tier
Sublessee, at its sole expense, shall deliver to Third Tier Sublessor either
(i) a performance bond and a labor and materials bond (issued by a surety
company satisfactory to Third Tier Sublessor and licensed to do business in New
York State), each in the amount equal to 150% of the estimated cost of such
Alteration and otherwise in form satisfactory to Third Tier Sublessor and/or
(ii) such other security as shall be satisfactory to Third Tier Sublessor;
(d) Prior to the commencement of any Alteration, Third Tier Sublessee
shall furnish Third Tier Sublessor with certificates of insurance as shall be
reasonably satisfactory to Third Tier Sublessor, as to coverage and insurer (who
shall be licensed to do business in the State of New York), including, but not
limited to, liability, property damage, and workmen's compensation insurance to
protect Third Tier Sublessor, Sub-sublessor, Prime Sublessor, Groundlessor and
Third Tier Sublessee during the period of the performance of such Alteration;
(e) All such Alterations shall be performed in a good and workmanlike
manner and in compliance with all Legal Requirements and with all requirements
of any insurance policies
affecting the Premises or the Building and so as to cause as little
interference as possible with Groundlessor's, Prime Sublessor's,
Sub-sublessor's or Third Tier Sublessor's, or any of them, use, occupancy and
enjoyment of the Building or the premises of which the Premises are a part;
and
(f) Third Tier Sublessee, at its sole expense, shall obtain all
municipal and other governmental licenses, permits, authorizations, approvals,
and certificates required in connection with such Alteration.
9.02 Third Tier Sublessor shall have no obligations whatsoever to make
any repairs or Alterations in or to the Premises, any systems serving the
Premises, or any equipment, fixtures or furnishings in the Premises, or to
comply with any violations of law with respect thereto, or to restore the
Premises in the event of a fire or other casualty therein or to perform any
other duty with respect to the Premises which (x) Sub-sublessor is required to
perform under the Sub-sublease, (y) Prime Sublessor is required to perform under
the Prime Sublease and (z) Groundlessor is required to perform under the Major
Ground Lease. Third Tier Sublessee shall look solely to Sub-sublessor, Prime
Sublessor and Groundlessor for the making of any and all repairs in the Premises
and the performance of any and all such other work and responsibilities and only
to the extent required by the terms of, respectively, the Sub-sublease, the
Prime Sublease and the Major Ground Lease.
9.03 Third Tier Sublessee will not create or permit to be created or
to remain, and will discharge, any lien, encumbrance or charge (levied on
account of any tax payable by Third Tier Sublessee or any mechanic's or
materialman's lien by reason of work, labor, services or materials supplied or
claimed to be supplied to Third Tier Sublessee, or anyone else in the Premises,
or any part thereof, or otherwise) which might be or become a lien, encumbrance
or charge upon the Building, the Premises or any part thereof or the income
therefrom. If any such mechanic's or materialman's lien shall at any time be
filed against the Building, the Premises or any part thereof, Third Tier
Sublessee, within fifteen (15) days after notice of the filing thereof, will
cause the same to be discharged of record by payment, deposit, bond, order of a
court of competent jurisdiction or otherwise.
10. INSURANCE.
10.01 Third Tier Sublessee, at Third Tier Sublessee's sole
expense, shall maintain for the benefit of Third Tier Sublessor, Sub-sublessor,
Prime Sublessor and Groundlessor such policies of insurance required by the Sub-
sublease, the Prime Sublease and/or the Major Ground Lease with respect to the
Premises which shall be reasonably satisfactory to Third Tier Sublessor as to
coverage and insurer (who shall be licensed to do business in the State of New
York) provided that such insurance shall at a minimum include comprehensive
general liability insurance with an aggregate liability amount, on an occurrence
basis, of not less than $3,000,000 combined single limit, protecting and
indemnifying Third Tier Sublessor, Sub-sublessor, Prime Sublessor, Groundlessor
and Third Tier Sublessee against any and all claims and liabilities for injury
or damage to persons or property, occurring upon, in or about the Premises, and
the public portions of the Building, caused by or resulting from or in
connection with any act or omission of Third Tier Sublessee, Third Tier
Sublessee's employees, agents or invitees.
10.02 Nothing contained in this Third Tier Sublease shall relieve
Third Tier Sublessee from any liability as a result of damage from fire or other
casualty, but each party shall
look first to any insurance in its favor before making any claim against the
other party for recovery for loss or damage resulting from fire or other
casualty. To the extent that such insurance is in force and collectible and
to the extent permitted by law, Third Tier Sublessor and Third Tier Sublessee
each hereby releases and waives all right to recovery against the other or
anyone claiming through or under the other by way of subrogation or
otherwise. The foregoing release and waiver shall be in force only if the
insurance policies of Third Tier Sublessor and Third Tier Sublessee provide
that such release or waiver does not invalidate the insurance; and each party
agrees to use its best efforts to include such a provision in its applicable
insurance policies. If the inclusion of said provision would involve an
additional expense, the party requiring such provision to be inserted in the
other's policy shall pay the cost thereof, unless it elects to waive such
requirement.
10.03 Third Tier Sublessee shall provide to Third Tier Sublessor,
on the Commencement Date and on each anniversary of the Commencement Date, a
certificate evidencing the insurance required by this Section 10.
11. ASSIGNMENT, SUBLETTING AND ENCUMBRANCES.
11.01 Third Tier Sublessee shall not, either voluntarily or by
operation of law, assign, sell, encumber, pledge or otherwise transfer all or
any part of Third Tier Sublessee's leasehold estate hereunder, or permit the
Premises to be occupied by anyone other than Third Tier Sublessee or Third Tier
Sublessee's employees, or sublet the Premises or any portion thereof, without
Third Tier Sublessor's, Sub-sublessor's, Prime Sublessor's and Groundlessor's
prior written consent in each instance. If Third Tier Sublessee is a
corporation or is an unincorporated association or partnership, the transfer,
issuance, assignment or hypothecation of any stock or interest in such
corporation, association or partnership in the aggregate in excess of twenty-
five percent (25%) shall be deemed an assignment within the meaning and
provisions of this Article. Any consent by Third Tier Sublessor, Sub-
sublessor, Prime Sublessor and Groundlessor as hereinabove required shall not
excuse Third Tier Sublessee from its obligation to obtain the express written
consent of Third Tier Sublessor, Sub-sublessor, Prime Sublessor and Groundlessor
to any further action or matter with respect to which the consent of Third Tier
Sublessor, Sub-sublessor, Prime Sublessor and Groundlessor is hereinabove
required. If Third Tier Sublessor, Sub-sublessor, Prime Sublessor and
Groundlessor consent to an assignment of this Third Tier Sublease or a
subletting of the Premises, no such assignment or subletting shall be, or be
deemed to be, effective until the following conditions have been met:
(i) in the case of an assignment, the assignee shall have
assumed in writing, directly for the benefit of Third Tier Sublessor, all of the
obligations of Third Tier Sublessee hereunder and Third Tier Sublessor shall
have been furnished, prior to the effective date of such assignment, with a
duplicate original of the agreement of assignment and assumption, in form and
substance satisfactory to Third Tier Sublessor; and
(ii) in the case of subletting, Third Tier Sublessor shall have
been furnished with a duplicate original of the sublease, prior to the
commencement of the term of such sublease, which sublease shall (a) be in form
and substance satisfactory to Third Tier Sublessor; (b) be subject and
subordinate to all of the terms, covenants and conditions of this Third Tier
Sublease, the Sub-sublease, the Prime Sublease and the Major Ground Lease; and
(c) restrict the right of the subtenant thereunder to assign such sublease or
further sublet its subleased premises
without the prior written consent of Third Tier Sublessor, Sub-sublessor,
Prime Sublessor and Groundlessor in each instance.
Notwithstanding Third Tier Sublessor's, Sub-sublessor's, Prime Sublessor's and
Groundlessor's consent to any such assignment or subletting, the provisions of
this subsection shall be applicable to each and every subsequent assignment or
subletting, and Third Tier Sublessee shall not be released from any of its
obligations hereunder.
11.02 If this Third Tier Sublease be assigned or if the Premises
or any part thereof be further sublet or occupied by anybody other than Third
Tier Sublessee, Third Tier Sublessor may, after default by Third Tier Sublessee,
collect rent from the assignee, subtenant or occupant, and apply the net amount
collected to the Fixed Rent, Additional Rent and other charges herein reserved,
but no such assignment, subletting, occupancy or collection shall be deemed a
waiver of Third Tier Sublessee's covenants under this Article 11, or the
acceptance by Third Tier Sublessor of the assignee, subtenant or occupant as
tenant hereunder or a release of Third Tier Sublessee from the further
performance by Third Tier Sublessee of any of the terms, covenants and
conditions of this Third Tier Sublease on the part of Third Tier Sublessee to be
performed hereunder.
11.03 Third Tier Sublessee shall pay on demand the costs and
expenses incurred by Third Tier Sublessor, Sub-sublessor, Prime Sublessor and
Groundlessor, including, without limitation, architect, engineer and attorneys'
fees and disbursements, and a reasonable administrative fee, in connection with
any proposed or actual assignment of this Third Tier Sublease or subletting of
the Premises, or any part thereof, and the review and/or preparation of
documents in connection therewith.
12. DEFAULT.
12.01 This Third Tier Sublease and the Term and estate hereby
granted are subject to the following limitations as modified by the provisions
of Article 15 below:
(a) if Third Tier Sublessee shall fail to pay when due any Rent or
any other sum or amount Third Tier Sublessee may be required to pay hereunder;
or
(b) if Third Tier Sublessee shall default in the observance or
performance of any term, covenant or condition of this Third Tier Sublease on
Third Tier Sublessee's part to be observed, performed or complied with (other
than the payment of Fixed Rent and Additional Rent and other amounts payable
hereunder) and Third Tier Sublessee shall fail to remedy such default within ten
(10) days thereafter, or, if such default is of such a nature that for reasons
beyond Third Tier Sublessee's control it cannot be completely remedied within
said period of ten (10) days, then if Third Tier Sublessee (i) shall not
promptly advise Third Tier Sublessor in writing of Third Tier Sublessee's
intention to duly institute all steps necessary to remedy such situation,
(ii) shall not promptly institute and thereafter diligently prosecute to
completion all steps necessary to remedy the same and (iii) shall not remedy the
same within a reasonable time after the date of default; or
(c) if any event shall occur or any contingency shall arise whereby
this Third Tier Sublease or the estate hereby granted or the unexpired balance
of the Term would, by
operation of law or otherwise, devolve upon or pass to any person or entity
other than Third Tier Sublessee, except as is expressly permitted hereunder;
or
(d) if Third Tier Sublessee shall fail to move into or take
possession of the Premises within thirty (30) days after the Commencement Date
or if the Premises shall thereafter become vacant, deserted or abandoned; or
(e) if there shall occur any default under the Sub-sublease, the
Prime Sublease or the Major Ground Lease or there shall occur any event which
with notice or passage of time or both would constitute a default under the Sub-
sublease, the Prime Sublease or the Major Ground Lease, which is due to any act
or omission of Third Tier Sublessee; or
(f) if Third Tier Sublessee shall default in the observance or
performance of any term, covenant or condition on Third Tier Sublessee's part to
be observed or performed under any other lease or sublease with Third Tier
Sublessor, and such default shall continue beyond any applicable grace period
set forth in such other lease or sublease for the remedying of such default; or
(g) if any execution or attachment shall be issued against Third Tier
Sublessee or any of Third Tier Sublessee's Property whereupon the Premises shall
be taken or occupied or attempted to be taken or occupied by someone other than
Third Tier Sublessee, and such execution or attachments shall not have been
vacated and shall continue for a period of thirty (30) days;
then, in any of said events, Third Tier Sublessor may give to Third Tier
Sublessee notice of its intention and election to end the Term at the expiration
of three (3) days from the date of the giving of such notice, and, in the event
such notice is given, this Third Tier Sublease and the Term and estate hereby
granted (whether or not the Term shall have commenced) shall terminate upon the
expiration of said three (3) days with the same force and effect as if that day
were the Expiration Date, provided, however, that Third Tier Sublessee shall be
and remain liable for the performance of all of its obligations hereunder and
for damages as provided in this Third Tier Sublease.
12.02 Except as otherwise provided for herein, if Third Tier
Sublessee shall default in the payment when due of any Rent or other amount
Third Tier Sublessee may become obligated to pay hereunder, or if this Third
Tier Sublease and the Term shall terminate as provided in subsection 12.01 above
then:
(a) Third Tier Sublessor and Third Tier Sublessor's agents may
immediately, or at any time after such default (and expiration of the applicable
grace period, if any) or after the date upon which this Third Tier Sublease and
the Term shall terminate, re-enter the Premises or any part thereof, without
notice, whether by summary proceedings or by any other permitted action or
proceeding, or by force or otherwise (without being liable to indictment,
prosecution or for damages therefor), and may repossess the Premises and
dispossess Third Tier Sublessee and any other persons from the Premises and
remove any and all of its or their property and effects from the Premises. In
no event shall any such re-entry be deemed an acceptance of Third Tier
Sublessee's surrender of this Third Tier Sublease; and
(b) Third Tier Sublessor, at Third Tier Sublessor's option, may relet
the whole or any part or parts of the Premises from time to time, either in the
name of Third Tier Sublessor or
otherwise, to such tenant or tenants, for such term or terms, at such rental
or rentals and upon such other terms and conditions, which may include
concessions and free rent periods, as Third Tier Sublessor, in its sole
discretion, may determine. Third Tier Sublessor shall have no obligation to
relet the Premises or any part thereof and shall in no event be liable for
refusal or failure to collect any rent due upon any such reletting and no
such refusal or failure shall operate to relieve Third Tier Sublessee from
any liability under this Third Tier Sublease or otherwise affect any such
liability. Third Tier Sublessor, at its option, may make such repairs,
alterations, additions, improvements, decorations and other physical changes
in and to the Premises as Third Tier Sublessor, in its sole discretion, may
consider advisable in connection with any such reletting or proposed
reletting, without relieving Third Tier Sublessee of any liability under this
Third Tier Sublease or otherwise affecting any such liability.
12.03 Third Tier Sublessee, on its own behalf and on behalf of all
persons claiming through or under Third Tier Sublessee, including all creditors,
does hereby waive any and all rights and privileges, to the extent permitted by
law, which Third Tier Sublessee and all such persons might otherwise have under
any present or future law to (i) the service of any notice of intention to re-
enter or to institute legal proceedings to that end which may otherwise by
required to be given under any present or future law, (ii) to redeem the
Premises, (iii) to re-enter or repossess the Premises, or (iv) to restore the
operation of this Third Tier Sublease, after Third Tier Sublessee shall have
been dispossessed by a judgment or by warrant of any court or judge, or after
any re-entry by Third Tier Sublessor, or after any termination of this Third
Tier Sublease and the Term, whether such dispossession, re-entry or termination
shall be by operation of law or otherwise. The words "re-enter," "re-entry,"
and "re-entered" as used in this Third Tier Sublease shall not be deemed to be
restricted to their technical legal meanings.
12.04 In the event of any breach or threatened breach by Third
Tier Sublessee or any persons claiming through or under Third Tier Sublessee of
any of the terms, covenants or conditions contained in this Third Tier Sublease,
Third Tier Sublessor (i) shall be entitled to enjoin such breach or threatened
breach and (ii) shall have the right to invoke any right and remedy allowed at
law or in equity or by statute or otherwise as if re-entry, summary proceedings
or other specific remedies were not provided for in this Third Tier Sublease.
12.05 If this Third Tier Sublease and the Term shall terminate as
provided in subsection 12.01 above, or by or under any summary proceeding or any
other action or proceeding or if Third Tier Sublessor shall re-enter the
Premises as hereinabove provided or by or under any summary proceeding or any
other action or proceeding, then in any of said events:
(a) Third Tier Sublessee shall pay to Third Tier Sublessor all Fixed
Rent, Additional Rent and other amounts payable by Third Tier Sublessee
hereunder to the date upon which this Third Tier Sublease and the Term shall
have terminated or to the date of re-entry upon the Premises by Third Tier
Sublessor, as the case may be;
(b) Third Tier Sublessor shall be entitled to retain all monies, if
any, paid by Third Tier Sublessee to Third Tier Sublessor, whether as advance
Rent, security or otherwise, but such monies shall be credited by Third Tier
Sublessor against any Rent due at the time of such termination or re-entry or,
at Third Tier Sublessor's option, against any damages payable by Third Tier
Sublessee;
(c) Third Tier Sublessee shall be liable for and shall pay to Third
Tier Sublessor, as damages, any deficiency between the Fixed Rent and Additional
Rent payable hereunder for the period which otherwise would have constituted the
unexpired portion of the Term (conclusively presuming the Additional Rent to be
at the same rate as was payable for the year immediately preceding such
termination or re-entry) and the net amount, if any, of rents ("NET RENT")
collected under any reletting effected pursuant to the provisions of subsection
12.02 for any part of such period (after first deducting from the rents
collected under any such reletting all of the Third Tier Sublessor's expenses in
connection with the termination of this Third Tier Sublease or Third Tier
Sublessor's re-entry upon the Premises and in connection with such reletting
including all repossession costs, brokerage commissions, legal expenses,
attorneys' fees, alteration or similar costs and other expenses of preparing the
Premises for such reletting). Any such deficiency shall be paid in monthly
installments by Third Tier Sublessee on the days specified in this Third Tier
Sublease for the payment of installments of Fixed Rent and Additional Rent.
Third Tier Sublessor shall be entitled to recover from Third Tier Sublessee each
monthly deficiency as the same shall arise and no suit to collect the amount of
the deficiency for any month shall prejudice Third Tier Sublessor's right to
collect the deficiency for any subsequent month by a similar proceeding.
Alternatively, suit or suits for the recovery of such deficiencies may be
brought by Third Tier Sublessor from time to time at its election;
(d) In the event that Third Tier Sublessor shall not have collected
any monthly deficiencies as aforesaid, Third Tier Sublessor shall be entitled to
recover from Third Tier Sublessee, and Third Tier Sublessee shall pay to Third
Tier Sublessor, on demand, as and for liquidated and agreed final damages, a sum
equal to the amount by which the Fixed Rent and Additional Rent payable
hereunder for the period which otherwise would have constituted the unexpired
portion of the Term (conclusively presuming the Additional Rent to be at the
same rate as was payable for the year immediately preceding such termination or
re-entry) exceeds the then fair and reasonable rental value of the Premises for
the same period, both discounted to present worth at the rate of four percent
(4%) per annum. If before presentation of proof of such liquidated damages to
any court, commission or tribunal, the Premises, or any part thereof, shall have
been relet by Third Tier Sublessor for the period which otherwise would have
constituted the unexpired portion of the Term, or any part thereof, the amount
of rent upon such reletting shall be deemed, prima facie, to be the fair and
reasonable rental value for the part or the whole of the Premises so relet
during the term of the reletting; and
(e) In no event shall Third Tier Sublessee be entitled to receive any
excess of Net Rent over the sums payable by Third Tier Sublessee to Third Tier
Sublessor hereunder, and in no event shall Third Tier Sublessee be entitled in
any suit for the collection of damages pursuant to this Article to a credit in
respect of any Net Rent from a reletting except to the extent actually received
by Third Tier Sublessor prior to the commencement of such suit.
12.06 (a) If this Third Tier Sublease be terminated as provided
in subsection 12.01 or by any summary proceeding or any other action or
proceeding, or if Third Tier Sublessor shall reenter the Premises, Third Tier
Sublessee covenants and agrees, that, notwithstanding anything to the contrary
contained in this Third Tier Sublease:
(i) the Premises shall be, upon such earlier termination or re-
entry, in the same condition as that in which Third Tier Sublessee has agreed to
surrender them to Third Tier Sublessor on the Expiration Date;
(ii) Third Tier Sublessee, on or before the occurrence of any
event of default, shall have performed every covenant contained in this Third
Tier Sublease with respect to the making or restoration of all Alterations; and
(iii) for the breach of either clause (i) or (ii) of
subsection 12.06(a) above, or both, Third Tier Sublessor shall be entitled
immediately, without notice or other action by Third Tier Sublessor, to recover,
and Third Tier Sublessee shall pay as and for liquidated damages therefor, the
then cost of performing such covenant.
(b) Each and every covenant contained in this subsection 12.06 shall
be deemed separate and independent of every other provision of this Third Tier
Sublease and the use and occupancy of the Premises by Third Tier Sublessee, and
the performance of any such covenant shall not be considered to be Rent or the
payment of any other amount for the use of the Premises. It is understood that
the consideration for the covenants in this subsection is the making of this
Third Tier Sublease, and damages for failure to perform the same shall be deemed
to be in addition to and separate and independent from the damages accruing by
reason of default in observing any other covenant contained in this Third Tier
Sublease.
12.07 Nothing herein contained shall be construed as limiting or
precluding the recovery by Third Tier Sublessor against Third Tier Sublessee of
any sums or damages to which, in addition to the damages particularly provided
above, Third Tier Sublessor may lawfully be entitled by reason of any default
hereunder on the part of Third Tier Sublessee.
13. BANKRUPTCY.
13.01 Notwithstanding any other provision of this Third Tier
Sublease, Third Tier Sublessor may cancel this Third Tier Sublease by written
notice to Third Tier Sublessee within a reasonable period of time after the
happening of either one or both of the following events: (i) a case is
commenced in bankruptcy or under the laws of any state naming Third Tier
Sublessee as debtor; and (ii) Third Tier Sublessee makes an assignment or any
other arrangement for the benefit of creditors under any state statute. Neither
Third Tier Sublessee nor any person claiming through or under Third Tier
Sublessee, or by reason of any statute or order of court, shall therewith be
entitled to possession of the Premises but shall forthwith quit and surrender
the Premises.
13.02 Notwithstanding any other provision of this Third Tier
Sublease, if this Third Tier Sublease shall terminate pursuant to subsection
13.01 above, Third Tier Sublessor shall be entitled to recover from Third Tier
Sublessee as and for liquidated damages an amount equal to the difference
between the Rent receivable hereunder for the unexpired portion of the Term and
the fair and reasonable rental value of the Premises for the same period. In
the computation of such damages, the difference between any installment of Rent
becoming due hereunder after the date of termination and the fair and reasonable
rental value of the Premises for the period for which such installment was
payable shall be discounted to the date of termination at the rate of four
percent (4%) per annum. If the Premises or any part thereof be relet by Third
Tier Sublessor for the unexpired term of this Third Tier Sublease, or any part
thereof, before presentation of proof of such liquidation damages to any court,
commission or tribunal, the amount of Rent reserved upon such reletting shall be
deemed to be the fair and reasonable rental value for the part or the whole of
the
Premises so relet during the term of the reletting. Nothing herein contained
shall limit or prejudice the right of Third Tier Sublessor to prove for and
obtain as liquidated damages by reason of such termination an amount equal to
the maximum allowed by any statute or rule of law in effect at the time when,
and governing the proceedings in which, such damages are to be proved,
whether or not such amount be greater, equal to, or less than the amount of
the difference referred to above.
13.03 If, at any time, (i) Third Tier Sublessee shall be comprised
of two or more persons or entities; (ii) any of Third Tier Sublessee's
obligations under this Third Tier Sublease shall have been guaranteed by any
person or entity other than Third Tier Sublessee; or (iii) Third Tier
Sublessee's interest in this Third Tier Sublease shall have been assigned, the
word "Third Tier Sublessee," as used in subsections 13.01 and 13.02 above, shall
be deemed to mean Third Tier Sublessee or any one or more other persons or
entities primarily or secondarily liable for the performance of Third Tier
Sublessee's obligations under this Third Tier Sublease.
14. INDEMNIFICATION.
14.01 Third Tier Sublessor, Sub-sublessor, Prime Sublessor,
Groundlessor, their respective employees, agents, contractors, licensees and
invitees, shall not be liable to Third Tier Sublessee, its employees, agents,
contractors, licensees or invitees, and Third Tier Sublessee shall indemnify and
hold harmless Third Tier Sublessor, Sub-sublessor, Prime Sublessor and
Groundlessor, and their respective employees, agents, contractors, licensees and
invitees, from and against any and all loss, cost, liability, claim, damage and
expense, including, without limiting the generality of the foregoing, attorneys'
fees and expenses and court costs, penalties and fines, incurred in connection
with or arising from any injury to Third Tier Sublessee or any other person, or
for any damages to, or loss (by theft or otherwise) of, any of the property of
Third Tier Sublessee and/or any other person, irrespective of the cause of such
injury, damage or loss and whether occurring in or about the Premises or the
Building. The foregoing shall not be deemed to affect the liability of Third
Tier Sublessor, if any, with respect to any of the foregoing if caused by the
gross negligence of Third Tier Sublessor without contributory negligence on the
part of Third Tier Sublessee or any other party.
14.02 Third Tier Sublessee shall indemnify and hold harmless
Third Tier Sublessor, Sub-sublessor, Prime Sublessor and Groundlessor, and their
respective employees, agents, contractors, licensees and invitees, from and
against any and all loss, cost, liability, claims, damage and expenses,
including, without limiting the generality of the foregoing, reasonable
attorneys' fees and expenses and court costs, penalties and fines, incurred in
connection with or arising from (i) any default by Third Tier Sublessee in the
observance or performance of, or compliance with, any of the terms, covenants or
conditions of this Third Tier Sublease, the Sub-Sublease, the Prime Sublease or
the Major Ground Lease on Third Tier Sublessee's part to be observed, performed
or complied with, (ii) the use or occupancy or manner of use or occupancy of the
Premises by Third Tier Sublessee or any person claiming through or under Third
Tier Sublessee or the exercise by Third Tier Sublessee or any person claiming
through or under Third Tier Sublessee of any rights granted to Third Tier
Sublessee hereunder, including, without limiting the generality of the
foregoing, those rights provided under Article 6 above, (iii) any acts,
omissions or negligence of Third Tier Sublessee or any person claiming through
or under Third Tier Sublessee, or the employees, agents, contractors, licensees
or invitees of Third Tier Sublessee or any such person, in or about the Premises
or the Building either prior to, during, or after the termination of this Third
Tier Sublease, or (iv) the condition of the Premises. If any action or
proceeding shall be
brought against Third Tier Sublessor, Sub-sublessor, Prime Sublessor or
Groundlessor by reason of any such claim, Third Tier Sublessee, upon notice
from Third Tier Sublessor, Sub-sublessor, Prime Sublessor and Groundlessor,
shall resist and defend such action or proceeding and employ counsel therefor
satisfactory to Third Tier Sublessor. Third Tier Sublessee shall pay to
Third Tier Sublessor on demand all sums which may be owing to Third Tier
Sublessor, Sub-sublessor, Prime Sublessor and Groundlessor by reason of the
provisions of this subsection. Third Tier Sublessee's obligations under this
subsection shall survive the Expiration Date or earlier termination of this
Third Tier Sublease.
14.03 Third Tier Sublessor shall indemnify and hold harmless Third
Tier Sublessee from and against any and all loss, cost, liability, claims,
damage and expenses, including without limitation, reasonable attorneys fees and
expenses and court costs, penalties and fines, incurred in connection with or
arising from the breach of its representations and warranties set forth in
paragraph 1.03. Third Tier Sublessor's obligations under this subsection shall
survive the Expiration Date or earlier termination of this Third Tier Sublease.
14.04 The provisions of this Section 14 are not intended to make
Third Tier Sublessee responsible for claims against Third Tier Sublessor, Prime
Sublessor, Groundlessor or Sub-sublessor or the Premises that arose out of
events that occurred prior to the Commencement Date.
15. TIME LIMITS.
15.01 Except with respect to actions to be taken by Third Tier
Sublessee for which shorter time limits are specifically set forth in this Third
Tier Sublease, which time limits shall control for the purposes of this Third
Tier Sublease, the time limits provided in the Sub-sublease, the Prime Sublease
and the Major Ground Lease for the giving or making of any Notice (as
hereinafter defined) by the tenant thereunder to Sub-sublessor, Prime Sublessor
and Groundlessor, as the case may be, the holder of any mortgage or any other
party, or for the performance of any act, condition or covenant by the tenant
thereunder, or for the exercise of any right, remedy or option by the tenant
thereunder, are changed for the purposes of this Third Tier Sublease, by
shortening the same in each instance by (i) forty (40) days with respect to all
such periods of sixty (60) or more days, (ii) fifteen (15) days with respect to
all such periods of thirty (30) or more days but less than sixty (60) days,
(iii) ten (10) days with respect to all such periods of twenty (20) or more but
less than thirty (30) days, and (iv) three (3) days with respect to all such
periods of less than twenty (20) days.
15.02 Except with respect to actions to be taken by Third Tier
Sublessor for which longer time limits are specifically set forth in this Third
Tier Sublease, which time limits shall control for the purposes of this Third
Tier Sublease, the time limits provided in the Sub-sublease, the Prime Sublease
and the Major Ground Lease for the giving or making of any Notice by Sub-
sublessor, Prime Sublessor and Groundlessor, as the case may be, or the
performance of any act, covenant or condition by Sub-sublessor, Prime Sublessor
and Groundlessor, as the case may be, or for the exercise of any right, remedy
or option by Sub-sublessor, Prime Sublessor and Groundlessor, as the case may
be, thereunder, are changed for the purposes of this Third Tier Sublease, by
lengthening the same in each instance by (i) fifteen (15) days with respect to
all such periods of sixty (60) or more days, (ii) ten (10) days with respect to
all such periods of thirty (30) or more but less than sixty (60) days,
(iii) seven (7) days with respect to all such periods of twenty
(20) or more but less than thirty (30) days, and (iv) three (3) days with
respect to all such periods of less than twenty (20) days.
16. REMEDIES CUMULATIVE.
16.01 Each right and remedy of Third Tier Sublessor under this
Third Tier Sublease shall be cumulative and be in addition to every other right
and remedy of Third Tier Sublessor under this Third Tier Sublease and now or
hereafter existing at law or in equity, by statute or otherwise.
17. CASUALTY AND CONDEMNATION.
17.01 Subject to the terms of the Sub-sublease, the Prime Sublease
and the Major Ground Lease, in the event of any taking by governmental or public
authority of all or any part of the Premises, Third Tier Sublessee hereby waives
and relinquishes any and all claims to any award or damages for any such taking
of the Premises, including, without limiting the generality of the foregoing,
any claim for the value of the unexpired term of this Third Tier Sublease or the
value of any furniture, furnishings and trade fixtures installed by Third Tier
Sublessee in the Premises.
17.02 If the term of the Sub-sublease is terminated as provided
therein, or at the election of either party thereto pursuant to the terms
thereof, as a result of any casualty or condemnation affecting the Building or
any portion thereof, this Third Tier Sublease shall thereupon be terminated ipso
facto without any liability of Third Tier Sublessor to Third Tier Sublessee by
reason of such early termination. No event of casualty or condemnation
affecting the Premises shall result in any right or option on the part of the
Third Tier Sublessee hereunder to terminate this Third Tier Sublease, unless
Third Tier Sublessor shall have the right and option to terminate the Sub-
sublease as a result of such casualty or condemnation, and then only to the
extent that Third Tier Sublessee shall have exercised such right and option
within the time limits and as specifically provided for herein.
18. QUIET ENJOYMENT.
18.01 Third Tier Sublessor covenants that, as long as Third Tier
Sublessee shall pay the Fixed Rent and Additional Rent and all other amounts
Third Tier Sublessee shall be required to pay hereunder and shall duly observe,
perform and comply with all of the terms, covenants and conditions of this Third
Tier Sublease on its part to be observed, performed or complied with, Third Tier
Sublessee shall, subject to all of the terms of the Major Ground Lease, the
Prime Sublease, the Sub-sublease and this Third Tier Sublease, peaceably have,
hold and enjoy the Premises during the Term without molestation or hindrance by
Third Tier Sublessor.
19. RELEASE OF THIRD TIER SUBLESSOR.
19.01 The term "Third Tier Sublessor", as used in this Third Tier
Sublease so far as covenants or obligations on the part of Third Tier Sublessee
are concerned, shall be limited to mean and include only the owner or owners at
the time in question of the tenant's interest under the Sub-sublease, and in the
event of any transfer or transfers of the tenant's interest in the Sub-sublease,
Third Tier Sublessor herein named (and in case of any subsequent transfer or
conveyance, the then transferor of the tenant's interest in the Sub-sublease)
shall be automatically freed and
relieved from and after the date of such transfer of all liability with
respect to the performance of any covenants or obligations on the part of
Third Tier Sublessor contained in this Third Tier Sublease thereafter to be
performed, provided that the transferee of Third Tier Sublessor's interests
in this Third Tier Sublease agrees to assume Third Tier Sublessor's covenants
and obligations arising hereunder after the date of such transfer and notice
thereof is given to Third Tier Sublessee.
20. SURRENDER OF PREMISES.
20.01 Third Tier Sublessee shall, no later than the termination of
this Third Tier Sublease and in accordance with all of the terms of this Third
Tier Sublease, the Sub-sublease, the Prime Sublease and the Major Ground Lease,
vacate and surrender to Third Tier Sublessor the Premises, together with all
Alterations, in good order, condition and repair, reasonable wear and tear
excepted. Tenant's obligation to observe or perform this covenant shall survive
the termination of this Third Tier Sublease.
20.02 Third Tier Sublessee expressly waives, for itself and for
any person claiming through or under Third Tier Sublessee, any rights which
Third Tier Sublessee or any such person may have under the provisions of Section
2201 of the New York Civil Practice Law and Rules and any successor law of like
import in force in connection with any holdover summary proceedings which Third
Tier Sublessor may institute to enforce the foregoing provisions of this Article
20.
21. ESTOPPEL CERTIFICATES.
21.01 At any time and from time to time within ten (10) days after
a written request from Third Tier Sublessor, Third Tier Sublessee shall execute,
acknowledge and deliver to Third Tier Sublessor a written statement certifying
(i) that this Third Tier Sublease has not been modified and is in full force and
effect or, if there has been a modification of this Third Tier Sublease, that
this Third Tier Sublease is in full force and effect as modified, and stating
such modifications, (ii) the dates to which the Fixed Rent, Additional Rent and
other charges hereunder have been paid, (iii) that to the best of Third Tier
Sublessee's knowledge, no defaults exist under this Third Tier Sublease or, if
any defaults do exist, specifying the nature of each such default, and (iv) as
to such other matters as Third Tier Sublessor may reasonably request.
22. SECURITY.
22.01 Simultaneously with the execution of this Third Tier
Sublease, Third Tier Sublessee shall deposit with Third Tier Sublessor the sum
of Twelve Thousand Five Hundred Thirty-Two and 48/100 Dollars ($12,532.48)
("SECURITY DEPOSIT") as security for the full and faithful performance and
observance by Third Tier Sublessee of all of the terms, covenants and conditions
of this Third Tier Sublease on Third Tier Sublessee's part to be performed and
observed. Third Tier Sublessor may use, apply or retain the whole or any part
of the Security Deposit to the extent required for the payment of any Rent and
any other sums as to which Third Tier Sublessee may be in default hereunder and
for any sum which Third Tier Sublessor may expend or may be required to expend
by reason of Third Tier Sublessee's default in respect of any of the terms,
covenants and conditions of this Third Tier Sublease, including, without
limiting the generality of the foregoing, any and all damages or deficiencies in
the reletting of the Premises, whether such damages or deficiencies shall accrue
before or after summary proceedings or other re-entry by Third Tier Sublessor.
If any portion of said Security Deposit is so used or applied by Third Tier
Sublessor, the Third Tier Sublessee shall within five (5) days after receipt of
written demand therefore deposit cash with Third Tier Sublessor in an amount
sufficient to restore the Security Deposit to its original amount and Third Tier
Sublessee's failure to do so shall be a material default of this Third Tier
Sublease. In the event that Third Tier Sublessee shall fully and faithfully
comply with all of the terms, provisions, covenants and conditions of this Third
Tier Sublease, the Security Deposit, or so much thereof as shall not have been
applied by Third Tier Sublessor as aforesaid, shall be returned to Third Tier
Sublessee after the Expiration Date (or earlier termination of this Third Tier
Sublease) and after delivery of the entire possession of the Premises to Third
Tier Sublessor, without interest. In the event of an assignment by Third Tier
Sublessor of its interest under the Sub-sublease, Third Tier Sublessor shall
have the right to transfer the Security Deposit to the assignee and Third Tier
Sublessor shall thereupon be released by Third Tier Sublessee from all liability
for the return of such Security Deposit. In such event, Third Tier Sublessee
shall look solely to its new sublessor for the return of said Security Deposit.
The foregoing provisions shall apply to every transfer or assignment made of the
Security Deposit to a new sublessor. Third Tier Sublessee further covenants
that it will not assign or encumber or attempt to assign or encumber the
Security Deposit and that neither Third Tier Sublessor nor its successors and
assigns shall be bound by any such assignment, encumbrance, attempted assignment
or attempted encumbrance.
23. ACCESS TO PREMISES.
23.01 Third Tier Sublessee shall permit Third Tier Sublessor, Sub-
sublessor, Prime Sublessor and Groundlessor and their authorized representatives
to enter upon the Premises at reasonable times (i) to inspect the same and to
perform any work or make any necessary repairs thereto and (ii) as may be
necessary in accordance with the agreements set forth in paragraph 2.06.
24. NOTICES.
24.01 All notices, consents, approvals or other communications
(collectively, a "NOTICE") required to be given under this Third Tier Sublease
or pursuant to law shall be in writing and, unless otherwise required by law,
shall be personally delivered or given by registered or certified mail, return
receipt requested, postage prepaid, to the parties at their respective addresses
set forth above or such other address as either may designate by Notice to the
other. A copy of any Notice to Third Tier Sublessor shall be sent to its
General Counsel at the address for Third Tier Sublessor set forth above. Any
Notice given pursuant hereto shall be deemed to have been received upon
delivery, if personally delivered, or on the 5th day after the mailing thereof
if mailed in accordance with the terms hereof.
25. SUB-SUBLESSOR'S CONSENT REQUIRED.
25.01 This Third Tier Sublease shall be conditioned upon the
receipt by Third Tier Sublessor of Sub-sublessor's written consent to this Third
Tier Sublease and the delivery of a copy of the same to the Third Tier
Sublessee. Third Tier Sublessee covenants and agrees to cooperate with Third
Tier Sublessor in any request for Sub-sublessor's consent and agrees to supply
and furnish any information or documents which may be reasonably requested by
Groundlessor, Prime Sublessor and/or Sub-sublessor. Third Tier Sublessee shall
pay or reimburse Third Tier Sublessor for any expense charged by Sub-sublessor,
Groundlessor or Prime Sublessor in connection with the consent by any of them to
this Third Tier Sublease.
26. BROKER.
26.01 Third Tier Sublessor and Third Tier Sublessee each
represents that, other than Josephthal, Lyon & Ross, Inc. ("Josephthal"), it has
dealt with no broker, agent or finder in connection with this Third Tier
Sublease or the transactions to which it relates, and each shall indemnify and
hold the other harmless from and against the fee or commission claims of any
broker, agent or finder that it dealt with. Third Tier Sublessor has engaged
Josephthal and shall be solely liable for its fee, if any. However, if any of
the Major Groundlease, the Prime Sublease or the Sub-sublease, or the landlord
thereunder, requires that such landlord or any agent, manager or broker be paid
a commission, fee or any other form of compensation in connection with the
consent for this Third Tier Sublease, the Third Tier Sublessee will pay the
same.
27. WAIVER OF RIGHTS TO JURY AND COUNTERCLAIM.
27.01 Third Tier Sublessor and Third Tier Sublessee each hereby
waive trial by jury in any action, proceeding or counterclaim brought by either
of the parties against the other on any matters whatsoever arising out of or in
any way connected with this Third Tier Sublease, the relationship of Third Tier
Sublessor and Third Tier Sublessee, Third Tier Sublessee's use or occupancy of
the Premises, and/or any claim of injury or damage, or for the enforcement of
any remedy under any statute, emergency or otherwise. Third Tier Sublessor and
Third Tier Sublessee further agree that in the event Third Tier Sublessor
commences any summary proceeding for non-payment of Rent, Third Tier Sublessee
will not interpose any counterclaim of whatever nature or description in any
such proceeding.
27.02 Third Tier Sublessee hereby waives its right to interpose or
counterclaim in any summary proceeding instituted to remove Third Tier Sublessee
from the Premises or in any action or proceeding instituted for the collection
of Fixed Rent, Additional Rent or other amounts Third Tier Sublessee is
obligated to pay Third Tier Sublessor hereunder.
27.03 With respect to any provision of this Third Tier Sublease
which provides, in effect, that Third Tier Sublessor shall not unreasonably
withhold or unreasonably delay any consent or any approval, Third Tier Sublessee
in no event, shall be entitled to make, nor shall Third Tier Sublessee make, any
claim, and Third Tier Sublessee hereby waives any claim, for money damages; nor
shall Third Tier Sublessee claim any money damages by way of setoff,
counterclaim or defense, based upon any claim or assertion by Third Tier
Sublessee that Third Tier Sublessor has unreasonably withheld or unreasonably
delayed any consent or approval; but Third Tier Sublessee's sole remedy shall be
an action or proceeding to enforce any such provision, or for specific
performance, injunction or declaratory judgment.
28. THIRD TIER SUBLESSOR'S INABILITY TO PERFORM.
28.01 This Third Tier Sublease and the obligation of Third Tier
Sublessee to pay Rent hereunder and perform all of the other covenants and
agreements hereunder on the part of Third Tier Sublessee to be performed shall
in no way be affected, impaired or excused because Third Tier Sublessor is
unable to fulfill any of its obligations under this Third Tier Sublease
expressly or impliedly to be performed by Third Tier Sublessor or because Third
Tier Sublessor is unable to make, or is delayed in making, any repairs,
additions, alterations, improvement or decorations or is unable to supply, or is
delayed in supplying, any equipment or fixtures, if Third
Tier Sublessor is prevented or delayed from so doing by reason of strikes or
labor trouble, or by accident, adjustment of insurance, or by any cause
whatsoever reasonably beyond Third Tier Sublessor's control, including but
not limited to, laws, governmental preemption in connection with a National
Emergency or by reason of any rule, order or regulation or any federal,
state, county or municipal authority or any department or subdivision thereof
or any government agency or by reason of the conditions of supply and demand
which have been or are affected by war or other emergency.
29. MISCELLANEOUS.
29.01 This Third Tier Sublease shall be governed by and construed
in accordance with the laws of the State of New York.
29.02 Third Tier Sublessee shall look solely to Third Tier
Sublessor's estate and interest in the Premises for the satisfaction of any
right of Third Tier Sublessee for the collection of a judgment or other judicial
process or arbitration award requiring the payment of money by Third Tier
Sublessor and not to any other property or assets of Third Tier Sublessor.
29.03 The section headings in this Third Tier Sublease are
inserted only as a matter of convenience for reference and are not to be given
any effect in construing this Third Tier Sublease.
29.04 If any of the provisions of this Third Tier Sublease or the
application thereof to any person or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Third Tier Sublease, or the
application of such provisions or provisions to persons or circumstances other
than those as to whom or which it is held invalid or unenforceable, shall not be
affected thereby, and every provision of this Third Tier Sublease shall be valid
and enforceable to the fullest extent permitted by law.
29.05 All of the terms and provisions of this Third Tier Sublease
shall be binding upon and inure to the benefits of the parties hereto and,
subject to the provisions of Article 11 hereof, their respective successors and
assigns.
29.06 Third Tier Sublessor has made no representations, warranties
or covenants to or with Third Tier Sublessee with respect to the subject matter
of this Third Tier Sublease except as expressly provided herein and all prior
negotiations and agreements relating thereto are merged into this Third Tier
Sublease. This Third Tier Sublease may not be amended or terminated, in whole
or in part, nor may any of the provisions be waived, except by a written
instrument executed by the party against whom enforcement of such amendment,
termination or waiver is sought and unless the same is permitted under the terms
and provisions of the Sub-sublease, the Prime Sublease and the Major Ground
Lease.
IN WITNESS WHEREOF, Third Tier Sublessor and Third Tier Sublessee have
executed this Third Tier Sublease as of the day and year first above written.
THIRD TIER SUBLESSOR:
---------------------
UNITEL VIDEO, INC.
By: /s/ Barry Knepper
-----------------------------------
Name: Barry Knepper
Title: CEO
THIRD TIER SUBLESSEE:
---------------------
DIGITAL UNIVERSE II, INC.
By: /s/ Walter Lefler
-----------------------------------
Name: Walter Lefler
Title: President