Exhibit 10.1
SUBLEASE AGREEMENT
SUBLEASE AGREEMENT ("SUBLEASE"), made as of this 7 day of March 2006, by
and between WorldTravel Partners I, LLC, a Georgia limited liability company
("SUBLANDLORD"), having an office at 0000 Xxxxx Xxxx Xxxx., Xxxxx 000, Xxxxxxx,
Xxxxxxx 00000, and Health Benefits Direct Corporation, a Delaware corporation
("SUBTENANT"), having an office at 0000 Xxxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxxxxx
00000.
WITNESSETH
WHEREAS, by Agreement of Lease dated October 5, 2000 (the "XXXXXXXXX"),
1120 Avenue of the Americas Associates, as landlord ("LANDLORD"), leased to
Sublandlord, as tenant, a portion of the 7th Floor ("DEMISED PREMISES") at the
building known as 1120 Avenue of the Americas, New York, New York (a true,
correct and complete copy of the Xxxxxxxxx having been furnished by Sublandlord
to Subtenant, and the parties having initialed the first page thereof to
evidence such delivery); and
WHEREAS, Avenue of the Americas Associates has succeeded to the interest of
Avenue of the Americas, LLC in the Xxxxxxxxx pursuant to the terms and
conditions of the Xxxxxxxxx; and
WHEREAS, Subtenant now desires to sublet from Sublandlord and
Sublandlord is willing to sublet to Subtenant a portion of the entire Demised
Premises, as shown on the floor plan annexed hereto as EXHIBIT "A" upon the
terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
Sublandlord and Subtenant agree as follows:
1. Sublandlord hereby leases to Subtenant and Subtenant hereby subleases from
Sublandlord, approximately 13,773 square feet located on the 7th floor of the
Demised Premises upon the terms hereinafter contained and subject and
subordinate to the Xxxxxxxxx.
2. The term of the Sublease shall commence on the later of (i) March 1, 2006
or (ii) the date that is ten (10) days from the date on which Subtenant and
Sublandlord shall have delivered execution copies of this Sublease to one
another and Sublandlord has delivered Landlord's Consent (as hereinafter
defined) and Sublandlord's work is substantially complete (as per Exhibit B)
(the later of such dates, the "COMMENCEMENT DATE") and end on December 30, 2010
(the "EXPIRATION DATE") or on such earlier termination date pursuant to (a) the
terms contained herein, (b) law or (c) the terms of the Xxxxxxxxx. Sublandlord
shall deliver possession of the Demised Premises to Subtenant on the
Commencement Date broom clean, vacant and free of all tenants and occupants, and
shall deliver to Subtenant all keys and card keys for the Demised Premises and
codes to all locks.
3. (a) Subtenant shall pay to Sublandlord, as minimum rent, without
deduction, setoff, notice or demand at WorldTravel Partners, 0 Xxxx Xxxxx Xxxxx
Xxxxx, 0xx Xxxxx, Xxxxxxx Xxxxxxx 00000, Attn. Xxxxx Xxxxxx, Controller, base
rent, at the annual rates set forth below ("Base Rent"), in equal monthly
installments (but prorated for any partial month based on the actual number of
days in said month), in advance, on the first day of each and every month of the
term, except that the first month's rent shall be paid when Landlord's Consent
is obtained:
(i) $303,006.00 per annum from the Commencement Date through the
date which is the day immediately preceding the first (1st)
anniversary of the Commencement Date;
(ii) $312,096.24 per annum from the first anniversary of the
Commencement Date through the date which is the day immediately
preceding the second (2nd) anniversary of the Commencement
Date;
(iii) $321,459.12 per annum for the period from the second (2nd)
anniversary of the Commencement Date through the date which is
the day immediately preceding the third (3rd) anniversary of
the Commencement Date;
(iv) $331,102.92 per annum from the third (3rd) anniversary of the
Commencement Date through the date which is the day immediately
preceding the fourth (4th) anniversary of the Commencement
Date;
(v) $341,035.92 per annum for the period from the fourth (4th)
anniversary of the Commencement Date through the Expiration
Date.
(b) Subtenant shall pay Tenant's Tax Payment (as defined in the Xxxxxxxxx)
pursuant to the terms of the Xxxxxxxxx, except that the term "Base Tax Year"
shall mean, for the purposes of this Sublease, the tax year ending June 30,
2006. Subtenant's proportionate share shall mean 2.5%. Sublandlord shall furnish
to Subtenant all such documentation as shall be necessary to substantiate such
Tenant's Tax Payment and Subtenant shall have all such rights and remedies as
Sublandlord may have under the Xxxxxxxxx to contest such Tenant's Tax Payment or
to obtain any refunds with respect to Tenant's Tax Payment. If Landlord shall
issue to Sublandlord any credit or refund in respect of Taxes relating to any
part of the term of this Sublease, Sublandlord shall (a) provide Subtenant with
a copy of the supporting documentation received by Sublandlord and (b) give to
Subtenant a credit or refund to the extent allocable to Tenant's Tax Payment
paid by Subtenant.
(c) Electricity shall be billed to Subtenant as "Additional Rent" pursuant
to the terms of the Xxxxxxxxx. Subtenant shall pay for electricity at the same
per square foot rate Sublandlord pays multiplied by 1.437 (to accommodate for
the additional hours) adjusted for the square footage of the Demise Premises.
(d) All such other sums of money (other than Base Rent and Tenant's Tax
Payment) as shall become due from and payable pursuant to the terms of the
Xxxxxxxxx as a result of Subtenant's acts in the Demised Premises or as a result
of services provided by Landlord to Subtenant shall be deemed Additional Rent
for which default in payment of such amounts shall entitle Sublandlord or its
agent to the same rights and remedies as for a default in the payment of Base
Rent.
4. Notwithstanding anything to the contrary hereinabove set forth, the first
two (2) monthly installments of Base Rent accruing under this Sublease shall be
abated by the sum of $ 25,250.50per month (for a total abatement of $50,501.00).
5. Subtenant shall use and occupy the Demised Premises for the uses permitted
under Article 2 of the Xxxxxxxxx, as amended by Section 45 (c)(i) of the
Xxxxxxxxx, and for no other purposes or uses.
6. Subtenant agrees that it is subleasing the Demised Premises "as is" and
that Sublandlord has not made any representations or warranties concerning the
condition of the Demised Premises and that Sublandlord is not obligated to
perform any work to prepare the Demised Premises for Subtenant's occupancy.
Notwithstanding the foregoing, Sublandlord represents and warrants that, to the
best of Sublandlord's knowledge, as of the Commencement Date, the Demised
Premises comply with all laws, ordinances, rules, codes, orders and regulations
of all applicable governmental, public or quasi-public authorities. Subtenant
acknowledges that it is not authorized to make or do any improvements in or to
the Demised Premises except as permitted by the provisions of this Sublease and
the Xxxxxxxxx and that it must deliver the Demised Premises to Sublandlord on
the Expiration Date in the condition required by the Xxxxxxxxx, except that
Subtenant shall not be required to remove any alterations or improvements made
to or fixtures in the Demised Premises in the nature of a standard office
installation and provided that Landlord waives such removal requirement in
connection with Landlord's Consent. Any alterations or improvements to the
Demised Premises shall be subject to the approval of Landlord, to the extent
such approval is required pursuant to the terms of the Xxxxxxxxx.
7. (a) Prior to the Commencement Date (but not prior to the date that
Landlord's Consent is obtained), Subtenant shall deposit as security with
Sublandlord, a letter of credit (as provided below), in the amount of One
Hundred Fifty One Thousand, Five Hundred Three ($151,503) Dollars as security
for Subtenant's faithful performance of Subtenant's obligations hereunder
("Security Deposit"). If Subtenant fails to pay Base Rent and Additional Rent or
other charges when due under this Sublease, or fails to perform any of its other
obligations hereunder, Sublandlord may, upon seven (7) days prior written notice
to Subtenant (and provided no cure has been effected during such 7-day period),
use or apply all or any portion of the Security Deposit for the payment of any
rent or other amount then owed hereunder and unpaid, for the payment of any
other sum for which Subtenant may become obligated by reason of Subtenant's
default or breach. If Sublandlord so uses any portion of the Security Deposit,
Subtenant shall, within ten (10) days after written notice by Sublandlord,
restore the Security Deposit to the full amount originally deposited, and
Subtenant's failure to do so shall constitute a default under this Sublease.
Within thirty (30) days after the Expiration Date or the date that Subtenant has
vacated the Demised Premises so long as Subtenant is not then in default of any
of its obligations hereunder, the Security Deposit or so much thereof has had
not theretofore been applied by Sublandlord, shall be returned to Subtenant.
(b) As provided for in Section 7(a) hereof, Subtenant may deliver to
Sublandlord and shall thereafter, except as otherwise provided herein, maintain
in effect at all times during the term hereof, a clean, irrevocable letter of
credit, in form and substance satisfactory to Sublandlord, in the amount of the
security required pursuant to Section 7(a) above, issued by Citizens Bank, or
another commercial bank reasonably satisfactory to Sublandlord and having a
licensed branch or agency in the State of New York. The letter of credit shall
(i) provide that Sublandlord may draw upon the same at a bank located in
Manhattan, (ii) be payable on presentation of Sublandlord's sight draft, without
any further documentation, certification or representation, except that each
sight draft shall be accompanied by a statement from Sublandlord that either (A)
"Subtenant is in default beyond applicable notice and cure periods under that
certain Sublease dated as of March 7, 2006, between WorldTravel Partners I, LLC,
as Sublandlord, and Health Benefits Direct Corporation, as Subtenant" or (B)
"Subtenant has failed to procure timely a replacement letter of credit as
required under Section 7 of that certain Sublease dated as of March 7, 2006,
between WorldTravel Partners I, LLC, as Sublandlord, and Health Benefits Direct
Corporation, as Subtenant," (iii) be assignable by Sublandlord without charge,
(iv) have an expiry date of not less than one (1) year, and (v) permit multiple
drawings. The letter of credit shall provide that it shall be deemed
automatically renewed, without amendment, for consecutive periods of one (1)
year each thereafter during the term of this Sublease through the date which is
at least forty-five (45) days after the Expiration Date, unless the issuing bank
notifies Sublandlord by certified mail, return receipt requested, not less than
thirty (30) days prior to the then-current expiration date of the letter of
credit that it has elected not to renew the letter of credit. Sublandlord shall
have the right, upon receipt of such non-renewal notice (and provided Subtenant
has not previously tendered to Sublandlord a replacement letter of credit), to
draw the full amount of the letter of credit and shall thereafter hold or apply
the cash proceeds of the letter of credit in accordance with the provisions of
this Section 7. Notwithstanding any other rights of Sublandlord under the terms
of the Sublease, if Sublandlord uses, applies or retains any part of the letter
of credit as permitted under Section 7(a) above, Subtenant shall upon demand
deposit with Sublandlord the amount so applied or retained so that Sublandlord
shall have the full Security Deposit on hand at all times during the term
hereof.
8. (a) Subtenant hereby covenants and agrees to perform and comply with all
the terms, conditions and covenants of the Xxxxxxxxx on the part of the Tenant
therein named and agrees that, except as set forth in Section 8(c) hereof, all
of the terms and conditions of the Xxxxxxxxx are hereby incorporated herein by
reference with the same force and effect as if herein set forth in full. In the
event of any inconsistency between this Sublease and the Xxxxxxxxx, the terms
and conditions of the Xxxxxxxxx incorporated herein shall prevail, provided,
however, the foregoing shall not be deemed to amend or modify the business or
other financial terms of the sublease transaction contemplated hereby including,
without limitation, the Base Rent set forth in Section 3 hereof.
(b) Wherever the term "TENANT" occurs in said Xxxxxxxxx, the same shall be
deemed to refer to Subtenant. Wherever the term "LANDLORD" OR "OWNER" occurs in
said Xxxxxxxxx, the same shall be deemed to refer to Sublandlord. Whenever the
term "FIXED RENT", "FIXED ANNUAL" "RENT" occurs in said Xxxxxxxxx, the same
shall be deemed to refer to Base Rent. Whenever the term "lease", occurs in said
Xxxxxxxxx, the same shall be deemed to refer to this Sublease.
(c) The following provisions of the Xxxxxxxxx are not incorporated herein
and shall not apply to this Sublease: Xxxxxxxxx Sections 1, 34 and Rider No. 2,
39 (b), 39 (e), 40, 41, 48, 62 and 64. It is understood and agreed, however,
that Subtenant shall look to Landlord for the furnishing of services such as
heat, air conditioning, electricity, cleaning and other building services, and
Sublandlord shall not be obligated to make any repairs to the Demised Premises.
9. Subtenant shall be entitled to all of the rights and remedies of
Sublandlord as "Tenant" under the Xxxxxxxxx. To the extent Landlord fails or
refuses to perform its obligations under the Xxxxxxxxx, Sublandlord shall notify
Landlord, and Subtenant shall be entitled to participate with Sublandlord in the
enforcement of Sublandlord's rights, if any, against Landlord (and in any
recovery or relief therein) and/or Subtenant shall be entitled to require that
Sublandlord use its best efforts to enforce the Xxxxxxxxx against Landlord,
provided, however, the foregoing shall not be deemed to require Sublandlord to
commence a law suit or other proceeding to enforce the Xxxxxxxxx. Alternatively,
at its discretion, Subtenant shall have the right to take such action in its own
name and, for such purpose, all of the rights of Sublandlord to enforce such
obligations of Landlord under the Xxxxxxxxx are hereby conferred upon and
assigned to Subtenant and Subtenant hereby is subrogated to such rights
(including, without limitation, the benefit of any recovery or relief) and
Sublandlord agrees to cooperate fully with Subtenant's prosecution of any such
action.
10. Sublandlord and Subtenant hereby acknowledge and agree that this Sublease
shall not become effective until, and is expressly conditioned upon, the
delivery by Landlord of a written agreement from Landlord, (i) consenting to
this Sublease, and (ii) stating that the Xxxxxxxxx is in full force and effect
and that there are no defaults thereunder (and further confirming that the
expiration date of the Xxxxxxxxx is December 31, 2010), (the foregoing, the
"LANDLORD'S CONSENT"). Sublandlord and Subtenant acknowledge and agree that
Subtenant will only be obligated to accept a form of Landlord's Consent that
contain the foregoing terms and conditions.
11. If Subtenant holds over in possession after the Expiration Date or sooner
termination of the original term or of any extended term of this Sublease, such
holding over hereafter shall continue upon the covenants and conditions set
forth in the Xxxxxxxxx.
12. Subtenant may not (a) assign this Sublease or (b) permit this Sublease to
be assigned by operation of law or otherwise, or (c) further sublet all or a
portion of the Demised Premises, unless such assignment is effected pursuant to
the terms of the Xxxxxxxxx, provided, however, that it is understood and agreed
that in the event of an assignment of the Sublease or further sublease of the
Demised Premises (i) only Landlord (but not Sublandlord) shall have any rights
to recapture the Demised Premises or terminate the Sublease, (ii) only Landlord
(but not Sublandlord) shall have any rights to receive any amounts payable
pursuant the Xxxxxxxxx and (iii) the consent of Sublandlord must be obtained,
however, such consent shall not be unreasonably withheld or delayed.
13. All of the terms and conditions contained in this Sublease shall for the
purposes hereof, have the same meaning as is ascribed to them in the Xxxxxxxxx.
14. Subtenant and Sublandlord warrant and represent to one another that there
were no brokers or finders instrumental in consummating the terms of this
Sublease other than Xxxxxx Xxxx Properties, LLC "MHP" Commercial Brokerage
Services and Xxxxx Commercial Realty Group, Inc. (the "BROKER"). Subtenant and
Sublandlord hereby agree to indemnify and to hold one another harmless from and
against any and all claims for a brokerage or finder fee or other forms of
compensation arising out of any conversation or negotiations had by the other
party with any broker or finder other than Broker. Sublandlord shall pay all
fees or commissions due to Broker in connection with this Sublease in accordance
with a separate agreement.
15. In all provisions of the Xxxxxxxxx requiring the approval or consent of
Landlord, Subtenant shall be required to obtain the approval or consent of both
Landlord and Sublandlord, however, Sublandlord agrees not to unreasonably
withhold or delay its consent. Sublandlord agrees to reasonably cooperate with
Subtenant in connection with obtaining any required consent of Landlord.
16. This Sublease represent the entire agreement between the parties subject to
the Xxxxxxxxx with respect to the subject matter hereof and may not be changed,
modified or amended unless in writing and signed by the parties thereto.
17. In the event any provision of this Sublease is found to be void or
unenforceable by a court of competent jurisdiction, the remaining provisions of
this Sublease shall nevertheless be binding upon the parties with the same
effect as though the void or unenforceable part had been severed and deleted.
18. The terms of this Sublease are for the benefit of Sublandlord and
Subtenant, their respective directors, officers, partners, and their respective
legal representatives, heirs, administrators, successors, and assigns.
19. This Sublease shall be governed by and construed in accordance with the
laws of the State of New York, applicable to agreements made and to be performed
entirely within New York.
20. This Sublease shall be construed without regard to any rule of construction
to the effect that an agreement shall be construed against the party who drafted
such Sublease.
21. Subtenant shall provide Sublandlord and Landlord an insurance certificate
prior to the Commencement Date of the Sublease evidencing the insurance required
by the Xxxxxxxxx. At Subtenant's sole cost and expense, Subtenant shall maintain
at all times during the term of this Sublease, insurance meeting the
requirements of the Tenant under the Xxxxxxxxx.
22. Subtenant shall indemnify and defend Sublandlord and Landlord against and
hold Sublandlord and Landlord harmless from all claims, damages, reasonable
costs, demands, liabilities and expenses (including reasonable attorney's fees)
in respect in the non-performance or non-observance of any of Subtenant's
obligations under the Xxxxxxxxx but only to the extent that these obligations
are Subtenant's responsibilities pursuant to the terms of this Sublease.
Sublandlord agrees to indemnify and defend Subtenant against and hold Subtenant
harmless from all claims, damages, reasonable costs, demands, liabilities and
expenses (including reasonable attorney's fees) in respect in the
non-performance or non-observance of any of Sublandlord's obligations under the
Xxxxxxxxx but only to the extent that these obligations are Sublandlord's
responsibilities pursuant to the terms of this Sublease.
23. All Base Rent and other amounts of money payable by Subtenant to
Sublandlord as provided herein shall be paid on or before the due date thereof.
Sublandlord must continue to pay any and all rent and payments to Landlord on or
before the due dates as reflected within the Xxxxxxxxx and Sublandlord shall
indemnify and defend Subtenant against and hold Subtenant harmless from any
additional charges due to Landlord due to Sublandlord's default for non-payment
or untimely payments or failure to make payments except as may be permitted
under the Xxxxxxxxx.
24. All notices and demands which may or are to be required or permitted to be
given by either party on the other hereunder shall be in writing and sent to the
addresses set forth below, or to such other address as a party may designate to
the other party by written notice. All notices and demands from one party to the
other shall be sent by either (i) nationally recognized overnight courier, (ii)
first class mail or (iii) certified mail, return receipt requested, in each case
with postage and fees prepaid. A notice sent by certified mail (as above) shall
be deemed given five (5) days after mailing. All other notices shall be deemed
given when received (or when receipt is rejected).
If to Sublandlord: WorldTravel, 0000 Xxxxx Xxxx Xxxx., Xxxxx 000, Xxxxxxx, XX
00000, Attn: Xxxx Xxxxxx, with a copy to WorldTravel, 0000 Xxxxxxx Xxxx, Xxxxx
000, Xxxxxxxx, Xxxxxxxx 00000, Attn: Legal Department.
If to Subtenant: Health Benefits Direct Corporation, 0000 Xxxxxxx Xxxxx, Xxxxxxx
Xxxxx, Xxxxxxx, 00000, with a copy to Subtenant at the Demised Premises.
25. Sublandlord represents and warrants to Subtenant that (a) a true and
complete copy of the Xxxxxxxxx (and all amendments and modifications thereto) in
effect as of the date hereof has been furnished to Subtenant, (b) the Xxxxxxxxx
is in full force and effect, (c) Sublandlord is not in default of any of its
obligations under the Xxxxxxxxx, including, without limitation, the payment of
fixed rent or Additional Rent under the Xxxxxxxxx, (d) Sublandlord has not
received any notice of default under the Xxxxxxxxx, and (e) Landlord is not in
default of any of its obligations under the Xxxxxxxxx.
26. Sublandlord shall not voluntarily terminate the Xxxxxxxxx except pursuant
to a right of termination arising out of casualty or condemnation expressly set
forth in the Xxxxxxxxx and Sublandlord shall not amend or modify the Xxxxxxxxx
without Subtenant's consent. Sublandlord covenants and agrees that Sublandlord
shall not do or suffer or permit anything to be done which would constitute a
default under the Xxxxxxxxx or would cause the Xxxxxxxxx to be cancelled,
terminated, or forfeited by virtue of any rights of cancellation, termination or
forfeiture reserved or vested in Landlord under the Xxxxxxxxx or subject
Subtenant to any liability or responsibility for injury or damage to persons or
property. Except in the case of Subtenant's negligence, Sublandlord shall
indemnify and hold Subtenant harmless from and against all losses, liabilities,
obligations, claims, damages, penalties, fines, expenses and cost of every kind
and nature (including, without limitation reasonable attorney's fees and
disbursements) incurred or suffered by Subtenant which are due to or arise out
of (i) any breach, violation, non-observance or non-performance of any covenant,
condition or agreement contained in this Sublease or in the Xxxxxxxxx to be
fulfilled, kept, observed or performed by Sublandlord, (ii) any accidents,
damages or injuries to persons or property in the Demised Premises caused by
Sublandlord or its officers, employees, agents, contractors, invitees, tenants
or subtenants (other than Subtenant) or any person claiming through or under
Sublandlord or (iii) the termination of the Xxxxxxxxx for any reason other than
a termination of the foregoing caused by a default by Subtenant under this
Sublease or by reason of a casualty or condemnation. In the event of a default
by Sublandlord under the Xxxxxxxxx, Subtenant shall have the right, but not the
obligation, to cure such default and any amounts incurred or paid by Subtenant
to cure Sublandlord's defaults may be offset against any and all amounts of rent
payable by Subtenant to Sublandlord under this Sublease.
27. Subtenant shall have the use, for the term of this Sublease, workstations
to accommodate at least fifty (50) employees at no additional charge. At the end
of the term, workstations shall remain in the Premises, in the same condition in
which they were delivered to Subtenant, normal wear and tear excepted.
28. Sublandlord agrees to continue to maintain the supplemental HVAC unit, at
its expense, within the Premises in good working order and repair.
Notwithstanding anything to the contrary contained herein or in the Xxxxxxxxx,
Sublandlord shall have no responsibility or liability to Subtenant for any
damages or expenses of any manner or type resulting from the failure of the
supplemental HVAC, including damages resulting from one or more of the HVAC
units becoming non-operational. Provided, however, that Sublandlord shall
undertake to repair the supplemental HVAC unit within a commercially reasonable
time after receipt of written notice from Subtenant. In addition, Sublandlord
makes no representation or warranty that such supplemental units are adequate
for sufficient cooling or heating to the Demised Premises.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands as of
the day and year first above written.
HEALTH BENEFITS DIRECT CORPORATION
By: /s/ Xxxxx Xxxxxxx
---------------------------------------
Name: Xxxxx Xxxxxxx
Title: CEO
WORLDTRAVEL PARTNERS I, LLC
By: /s/ Xxxx X. Xxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxx
Title: SVP, Administration
EXHIBIT A
Floor Plan
(see attached)
EXHIBIT B
Sublandlord's Work
o Cause Demised Premises to be demised.
o Sublandlord to provide an allowance in the amount of $46,500.00 to go
towards Subtenant expenses for the installation of new carpet and paint in
the Demised Premises. Such payment shall be made to Subtenant by
Sublandlord upon full execution of the Sublease and written Consent by the
Landlord.
