1
EXHIBIT 10.5
SUBLEASE
SUBLEASE (this "Sublease") made as of December 20, 1996, between DREMAN
VALUE ADVISORS, INC. ("Sublessor"), a New York corporation, having an office 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, and SAPIENT CORPORATION ("Sublessee"), a
Delaware corporation, having an office at Xxx Xxxxxxxx Xxxxx, Xxxxxxxxx,
Xxxxxxxxxxxxx 00000.
W I T N E S S E T H :
WHEREAS, Sublessor is the current tenant under a lease, dated June 27,
1989, from S.P.N.W. Management Associates Limited Partnership (the "Landlord"),
to Sublessor, (which lease, is referred to in this Sublease as the "Underlying
Lease"), which Underlying Lease demises to Sublessor a portion of the 20th floor
(the "Underlyinq Premises") in the building known as 00 Xxxxxxxx Xxxxx, Xxxxxx
Xxxx, Xxx Xxxxxx (the "Building"), for a term ending on October 31, 1999;
WHEREAS, Sublessee wishes to sublease from Sublessor the entire
Underlying Premises (shown on the floor plan attached to this Sublease as
Exhibit A and referred to as the "Demised Premises"); and
WHEREAS, Sublessor is willing to sublease the Demised Premises to
Sublessee on the terms and conditions set forth in this Sublease.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual obligations hereinafter set forth, and for other valuable consideration,
the receipt and legal sufficiency of which are hereby acknowledged, Sublessor
and Sublessee agree as follows:
1. Term. Sublessor hereby subleases the Demised Premises to Sublessee,
and Sublessee hereby sublets the Demised Premises from Sublessor, for a term
(the "Term"), commencing on the date upon which the consent of the Landlord to
this Sublease is obtained (the "Sublease Commencement Date"), and ending on
October 30, 1999 (the "Sublease Expiration Date").
2. Demised Premises Sublet "As Is". Sublessee has inspected the Demised
Premises and is fully familiar and satisfied with the condition thereof.
Sublessee shall take the Demised Premises "as is" and acknowledges that
Sublessor has made no representation or warranty concerning the condition of the
Demised Premises.
2
3. Condition Precedent to Effectiveness of this Sublease. This Sublease
shall not be effective unless and until the Landlord shall have delivered to
Sublessor Landlord's written consent to this Sublease, in accordance with the
provisions of the Underlying Lease, it being the intention of the parties hereto
that this Sublease shall be expressly conditioned upon such consent of the
Landlord first being obtained. If such consent is not received by Sublessor and
possession of the Demised Premises is not delivered to Sublessee on or before
January 23, 1997, this Sublease shall be deemed null and void, all monies
delivered by Sublessee to Sublessor on signing this Sublease shall be returned
to Sublessee and neither party shall have any further obligation to the other.
4. Use of Demised Premises. Sublessee covenants that it shall use the
Demised Premises for the purposes permitted under the Underlying Lease and for
no other purpose.
5. Fixed Rent: Escalation Rent. (a) Commencing thirty (30) days
following the Sublease Commencement Date, if the Sublease Commencement Date
shall occur on or before December 26, 1996, or forty-five (45) days following
the Sublease Commencement Date if the Sublease Commencement Date shall occur
after December 26, 1996, (the "Sublease Rent Commencement Date"), Sublessee
shall pay Sublessor for the Demised Premises fixed rent in the amount of
$250,780 per annum in equal monthly installments due on the first day of each
calendar month during the Term (the "Sublease Fixed Rent") .
Provided that Sublessee is not in default under this Sublease, the
Sublease Fixed Rent payable for the period from the Sublease Commencement Date
to the Sublease Rent Commencement Date shall be abated. Nothing in this
paragraph shall affect the amounts payable by Sublessee pursuant to Article 6 of
this Sublease.
All installments of the Sublease Fixed Rent (and any additional rent
payable by Sublessee to Sublessor hereunder) shall be paid by check, drawn on a
member bank of the New York Clearinghouse Association, to the order of Sublessor
and shall be delivered or mailed to Sublessor at its address first above set
forth, or at such other address as Sublessor may from time to time in writing
designate. If the date on which Sublessee's obligation to pay the Sublease Fixed
Rent or additional rent shall commence on a date other than the first day of a
calendar month or shall end on a date other than the last day of a calendar
2
3
month or shall end on a date other than the last day of a calendar month, then
the Sublease Fixed Rent and additional rent payable by Sublessee shall be
apportioned based upon the portion of such calendar month included within the
Term. On the date of this Sublease, Sublessee has paid Sublessor the first
monthly installment of the Sublease Fixed Rent payable under this Sublease, the
receipt of which is hereby acknowledged.
(b) Sublessee shall pay its proportionate share of all Additional Rent
payable by Sublessor pursuant to the Underlying Lease, except that the base
"Operating Expenses" as defined in Section 3.5 of the Underlying Lease shall be
the Operating Expenses (as defined in the Underlying Lease) for the calendar
year l997. Sublessee is aware that real estate taxes are includes in the
Operating Expenses. The parties acknowledge that, in keeping with the Underlying
Lease; (i) commencing in December 1997, Sublessor shall provide Sublessee with
"Sublessor's Estimate" which shall be the functional equivalent and calculated
in the same manner as "Landlord's Estimate" as provided in Section 3.5(2)(iii)
of the Underlying Lease; and (ii) Sublessee's first payment of Sublessee's
Percentage of estimated Operating Expenses shall not be due until January 1998.
6. Electricity.
(a) Sublessee covenants to purchase electric current for the Demised
Premises in accordance with the Underlying Lease and by whatever method electric
current may be furnished to Sublessor thereunder. Promptly after its receipt of
Sublessor's written demand therefor, Sublessee shall reimburse Sublessor, as
additional rent hereunder, an amount equal to the amount paid by Sublessor for
electric current supplied to the Underlying Premises, without administrative
charges from Sublessor. Sublessee's obligation to reimburse Sublessor under this
Article 6 shall survive the expiration or earlier termination of this Sublease.
(b) Sublessor shall not be liable in any way to Sublessee for any
interruption or failure of or defect in the supply or character of electric
energy furnished to the Demised Premises or for any loss, damage or expense
Sublessee may sustain if either the quantity or character of electric service is
changed or is no longer suitable for Sublessee's
3
4
requirements, whether by reason of any requirement, act or omission of the
public utility serving the Building with electricity or for any other reason.
7. Sublease Subordinate to the Underlying Lease; Sublessee's Covenant
Respecting the Underlying Lease. A true and complete copy of the Underlying
Lease is annexed hereto as Exhibit B. and Sublessee acknowledges that it has
read the Underlying Lease and is fully familiar with the terms and conditions
thereof. This Sublease is subject and subordinate to the Underlying Lease (and
to all matters to which the Underlying Lease is subject and subordinate), and
Sublessee covenants that it shall so conduct itself and its operations in and
about the Demised Premises as not to cause Sublessor to be in default under the
Underlying Lease. Sublessor represents and warrants that: (a) the Underlying
Lease is in full force and effect and has not been modified or amended, except
for letter dated June 28, 1995; and (b) Sublessor has not received any notice of
default from the Landlord and is not aware of any claim by the Landlord that
Sublessor is in default under the Underlying Lease.
8. Incorporation by Reference, with Certain Exceptions, of the Terms
and Conditions of the Underlying Lease. The terms, covenants, provisions and
conditions of the Underlying Lease are hereby incorporated in this Sublease, and
to the extent applicable to the Demised Premises and not inconsistent with any
express provisions of this Sublease, shall be binding upon, and inure to the
benefit of, both parties in this Sublease, those applying to the Landlord in the
Underlying Lease, applying, in this Sublease, to Sublessor, and those applying
to Sublessor, as tenant under the Underlying Lease, applying, in this Sublease,
to Sublessee, with the following exceptions, modifications and supplements:
(a) For the purposes of this Sublease, Articles V, XXIII, XXVI
and XXVII, Sections 1.2, 2.1, 2.2, 2.3, 2.4, 3.1(a), 9.1, 24.3, 24.6, the last
sentence of Section 19.1 and Exhibits A, A-1, B and F of the Underlying Lease
shall not be deemed incorporated in or made a part hereof.
(b) The benefit of all repairs, restorations, materials and
services to be provided to the Demised Premises by the Landlord under the
Underlying Lease shall accrue to Sublessee; but, notwithstanding anything to the
contrary in
4
5
this Sublease or in the Underlying Lease, Sublessor shall under no circumstances
be obligated to make any repairs or restorations or to supply any materials or
services to the Demised Premises; and Sublessor shall under no circumstances be
liable to Sublessee for the failure of the Landlord or others so to do. Upon
Sublessee's written request, Sublessor shall present to the Landlord, in the
name of Sublessor, any demand requested by Sublessee for any such repairs,
restorations, materials or services required to be furnished to the Demised
Premises by the Landlord. Sublessee shall have the right to exercise, in
Sublessor's name, but at Sublessee's sole cost and expense, all of the rights
available to Sublessor to enforce performance of the obligations of the Landlord
to make any such repairs and restorations and to supply any such materials and
services to the Demised Premises. At the option of Sublessee, Sublessee shall
also have the right to require Sublessor, at Sublessor's cost and expense, to
commence an action to enforce the Landlord's obligations under the Underlying
Lease. No failure by the Landlord to make any such repairs or restorations or to
supply any such materials and services to the Demised Premises, and no
cessation, interruption or suspension of any service provided by the Landlord,
shall entitle Sublessee to any diminution or abatement of fixed or additional
rent or other compensation under this Sublease, nor shall this Sublease be
affected by reason of any such failure, cessation, interruption or suspension.
Sublessor covenants to comply with its obligations under the Underlying Lease in
order to avoid a default thereunder.
(c) The concept of "Landlord's Work" set forth in the
Underlying Lease (and all references in the Underlying Lease to Landlord's Work)
shall have no application to this Sublease, it being agreed that neither
Sublessor nor the Landlord shall have any obligation to alter, improve, decorate
or otherwise prepare the Demised Premises for Sublessee's occupancy.
(d) The Base Rent amounts set forth in the Underlying Lease
shall have no application to this Sublease, it being agreed that Sublessee shall
pay fixed rent under this Sublease equal to the Sublease Fixed Rent in
accordance with Article 5 of this Sublease.
5
6
(e) Notwithstanding any provisions contained in the Underlying
Lease to the contrary, Sublessee shall not, without the prior written consents
of both the Landlord and Sublessor in each instance, by operation of law or
otherwise, assign, mortgage or encumber this Sublease, nor the estate and/or
Term hereby granted, nor sublet or permit the Demised Premises or any part
thereof to be used by others. Sublessor's consent to any such sublease or
assignment shall not be unreasonably withheld or delayed. The consent of
Sublessor shall not be required with respect to an assignment or sublease to any
entity which controls, is controlled by or under common control with Sublessee;
provided, however, that Sublessee shall promptly notify Sublessor of any such
sublease or assignment and provide Sublessor with a copy of an agreement
pursuant to which such entity agrees to be bound by the provisions of this
Sublease and, provided further, that Sublessor's consent shall be required if at
any time during the term of this Sublease such affiliation with Sublessee ceases
to exist. The consent of Sublessor shall not be required to a transfer of this
Sublease to an entity resulting from the merger of Sublessee with another
entity; provided, however, that the new entity shall have a net worth equal to
or greater than the net worth of Sublessee on the date of this Sublease and such
entity provides Sublessor with an agreement pursuant to which such entity agrees
to be bound by the provisions of this Sublease.
(f) In the event of the termination or cancellation of the
Underlying Lease for any reason whatsoever, or of the surrender of the
Underlying Lease, whether voluntary, involuntary or by operation of law, prior
to the Sublease Expiration Date, Sublessee, at the option of the Landlord, which
may be exercised at any time during Sublessee's occupancy of the Demised
Premises, shall make full and complete attornment to the Landlord for the
balance of the Term of this Sublease, on the same terms as are contained in this
Sublease. Such attornment shall be evidenced by an agreement in form and
substance satisfactory to the Landlord, which Sublessee shall execute and
deliver within ten (10) days after the request of the Landlord, its successors
or assigns. Sublessee waives the provisions of any law now or hereafter in
effect that may give Sublessee any right of election to terminate this Sublease
or to surrender possession of the Demised Premises in the event any proceeding
is brought by the Landlord under the Underlying Lease to terminate the
Underlying Lease.
6
7
(g) Any covenants, representations and other undertakings of
the Landlord under the Underlying Lease shall not be deemed to be made by, or
otherwise constitute obligations of, Sublessor under this Sublease.
9. Indemnity. In addition to the obligation to indemnify set forth in
the Underlying Lease, Sublessee shall indemnify and hold harmless Sublessor and
the Landlord from and against any and all liabilities, losses, damages, suits,
penalties, claims, demands and judgments of every kind and nature, including,
without limitation, attorneys' fees and disbursements and attorneys' fees and
disbursements incurred in establishing liability and in collecting amounts
payable hereunder (collectively "Liabilities"), arising from the use or
occupancy of the Demised Premises or of any business conducted therein, or from
any work or thing whatsoever done or any condition created by or any other act
or omission of Sublessee, its assignees or subtenants, or its or their
respective employees, agents, contractors, visitors or licensees, in or about
the Demised Premises or any other part of the Building (including, without
limitation, any Liabilities which Sublessor or the Landlord may incur by reason
of any injuries to persons occurring in, on or about the Demised Premises),
unless such Liabilities result from or in connection with any default by
Sublessor under the terms hereof or of the Underlying Lease or the negligence or
intentional acts of Sublessor or the Landlord (as the case may be).
10. Notices. All notices to Sublessee shall be sent to Sublessee's
address first above set forth, and to the Demised Premises, with a copy to
Mackenzie & Xxxxxxxxx, Xxx Xxxx Xxxxxx, Xxxxx 000, Xxx Xxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxxx, Esq. or to such other place(s) or to the attention
of such other individual(s) as Sublessee may hereafter by written notice to
Sublessor designate. All notices to Sublessor shall be sent to Sublessor at the
address first above set forth, with a copy to Xxxxxx Financial Services, Inc.,
000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 Attention: Xxxxxx X.
Xxxxxxxxx, First Vice President, Facilities Management or to such other place(s)
or to the attention of such other individual(s) as Sublessor may hereafter by
written notice to Sublessee designate. Notices from either party to the other
shall be in writing and, notwithstanding anything contained in Article 24 of the
Underlying Lease to the contrary, (i) shall be deemed to have
7
8
been properly given, rendered or made if delivered personally to an officer of
the addressee, with receipt acknowledged, or mailed, postage prepaid, by
registered or certified mail, return receipt requested, and (ii) if delivered
personally shall be deemed given on the day delivered and if sent by registered
or certified mail shall be deemed given on the second business day after
mailing.
11. Repairs, Alterations, Improvements and Other Work. Except as set
forth in Section 9.3 of the Underlying Lease regarding Non-Structural
Improvements, Sublessee shall at no time make any alterations or improvements to
the Demised Premises or install any signs in the lobby or in any of the common
areas of the Building (i) without the prior written consents of both the
Landlord and Sublessor, and (ii) unless Sublessee complies with the requirements
of the Underlying Lease. If Sublessee elects to make improvements or
alterations, Sublessor covenants not to unreasonably withhold or delay its
consent to the same, provided that Sublessee has obtained from the Landlord any
consent which, under the terms of the Underlying Lease or this Sublease, is
required of the Landlord as a condition precedent to the making of such
alterations or improvements. If any such improvements are consented to as
aforesaid, the same shall be performed by Sublessee at its sole cost and expense
in accordance with the terms and provisions of the Underlying Lease.
Sublessee improvements which are to be removed upon the expiration of
the Term shall be identified at the time of approval by Landlord and Sublessor.
If the Landlord shall require Sublessor to remove, after the expiration of the
term of the Underlying Lease, any walls, entrances or other leasehold
improvements made to the Demised Premises by or on behalf of Sublessee,
Sublessor shall so notify Sublessee and Sublessee, prior to the expiration of
the Term of this Sublease, shall remove the same and restore the Demised
Premises and the Building to their condition existing immediately prior to the
installation of such walls, entrances or other leasehold improvements,
reasonable wear and tear and damage due to fire or other casualty to the
Building excepted.
The foregoing notwithstanding, Sublessee shall not be responsible for
removal of any Tenant Trade Fixtures, Non-Structural Improvements, improvements
or alterations installed by or on behalf of Sublessor, nor for the repair of any
damage
8
9
to the Demised Premises solely caused by Sublessor prior to delivery of
possession of the Demised Premises to Sublessee and all liability for removal of
such items under Articles IX and XX of the Underlying Lease shall remain with
Sublessor.
12. Sublessee's Rights. Sublessee shall not have any rights in respect
of the Demised Premises which are greater than the rights of Sublessor under the
Underlying Lease.
13. Time Periods. The time limits provided in the Underlying Lease for
the giving of notices, the making of demands, the performance of any act,
condition or covenant, or the exercise of any right, remedy or option are
changed for the purposes of this Sublease by shortening the same by six (6) days
in each instance, unless such time limit is ten (10) days or less, in which
event it shall be shortened by two (2) days (but in no event less than
twenty-four (24) hours), so that notices may be given, demands made, any act,
condition or covenant performed, or any right, remedy or option hereunder
exercised within the time limit relating thereto contained in the Underlying
Lease.
14. Broker. Sublessee represents that the only brokers with which it
has dealt in connection with this Sublease are Xxxxxx X. Xxxxxxx, Inc. and
Xxxxxx Xxxxx & X'Xxxxxx, Inc. (collectively, the "Brokers"). Sublessor shall pay
the Brokers pursuant to a separate written agreement. Sublessee shall indemnify
and hold harmless Sublessor from and against all loss, cost, damage and expense
(including, but not limited to, reasonable legal fees and disbursements and any
legal fees and disbursements incurred either in establishing liability or
collecting monies pursuant to this indemnity provision) incurred by Sublessor by
reason of a breach of the foregoing representation. The provisions of this
paragraph shall survive the expiration or earlier termination of this Sublease.
Sublessor represents that the only brokers with which it has dealt in
connection with this Sublease are Xxxxxx X. Xxxxxxx, Inc. and Xxxxxx Xxxxx &
X'Xxxxxx, Inc. (collectively, the "Brokers"). Sublessor shall pay the Brokers
pursuant to a separate written agreement. Sublessor shall indemnify and hold
harmless Sublessee from and against all loss, cost, damage and expense
(including, but not limited to, reasonable legal fees and disbursements and any
legal fees and disbursements incurred either in establishing liability or
collecting monies pursuant
9
10
to this indemnity provision) incurred by Sublessee by reason of a breach of the
foregoing representation. The provisions of this paragraph shall survive the
expiration or earlier termination of this Sublease.
15. Successors and Assigns. Subject to the restrictions on assignment
and subletting in this Sublease and in the Underlying Lease, this Sublease and
the covenants and agreements herein contained and incorporated herein by
reference shall bind and inure to the benefit of the respective successors and
assigns of the parties.
16. Entire Agreement; Amendments: Waiver. This Sublease and Exhibits A
and B hereto set forth the entire agreement of the parties, and shall not be
modified or amended except by a writing signed by the party against whom
enforcement is sought. Neither the waiver of any breach by either party of any
provisions of this Sublease, nor any indulgence by either party in respect of
any payment due it hereunder shall be construed as a waiver of any subsequent
breach or imply any future indulgence.
17. Costs and Expenses. Sublessee shall reimburse Sublessor, on demand,
for all costs and expenses (including attorneys' fees and disbursements and
court costs) incurred by Sublessor in connection with enforcing Sublessee's
obligations under this Sublease, whether incurred in connection with an action
or proceeding commenced by Sublessor, by Sublessee, by a third party or
otherwise. All such amounts shall be deemed to be additional rent, and shall be
collectible whether incurred before or after the expiration or termination of
this Sublease.
Sublessor shall reimburse Sublessee, on demand, for all costs and
expenses (including attorneys' fees and disbursements and court costs) incurred
by Sublessee in connection with enforcing Sublessor's obligations under this
Sublease, whether incurred in connection with an action or proceeding commenced
by Sublessee, by Sublessor, by a third party or otherwise. All such amounts
shall be collectible whether incurred before or after the expiration or
termination of this Sublease.
18. Governing Law. The laws of the State of New Jersey applicable to
contracts made and to be performed wholly within the State of New Jersey shall
govern and control the validity, interpretation, performance and enforcement of
this Sublease.
10
11
19. Termination of Underlying Lease. If the Underlying Lease terminates
as a result of a default or breach by Sublessor or Sublessee under this Sublease
or the Underlying Lease, the defaulting party shall be liable to the
non-defaulting party for the damage suffered as a result of the termination.
20. Corporate Sublessee. Each person executing this Sublease on behalf
of Sublessee hereby covenants, represents and warrants that Sublessee is a duly
incorporated or duly qualified (if foreign) corporation and is authorized to do
business in the State of New Jersey (a copy of evidence thereof to be supplied
to Sublessor upon request); and that each person executing this Sublease on
behalf of Sublessee is an officer of Sublessee and that he or she is duly
authorized to execute, acknowledge and deliver this Sublease to Sublessor (a
copy of a resolution to that effect to be supplied to Sublessor upon request).
21. Captions. The captions are inserted only as a matter of convenience
and for reference and in no way define, limit or describe the scope of this
Sublease nor the intent of any provision hereof.
IN WITNESS WHEREOF, the parties have duly executed this Sublease the day
and year first above written.
SUBLESSOR
DREMAN VALUE ADVISORS,INC.
By: /s/Xxxxx X. Xxxx
-----------------
Name:Xxxxx X. Xxxx
-------------
Title:President & CEO
-----------------
SUBLESSEE
SAPIENT CORPORATION
By: /s/Xxxxxx X. Xxxxx
-------------------
Name:Xxxxxx X. Xxxxx
---------------
Title:Director of Operations
----------------------
11
