EXHIBIT 10.8
Fully executed sublease
(00xx Xxxxx)
SUBLEASE
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THIS SUBLEASE, made as of the 22nd day of December, 1997, between EMI
ENTERTAINMENT WORLD, INC., a Delaware corporation having an office at 0000
Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX 00000 ("Landlord") and XXXXXXX XXXXXXXX
XXXXXXXX, INC., a Massachusetts corporation having an office at 000 Xxxxxxxx
Xxxxxx, Xxxxxx, XX 00000 ("Tenant").
Recital:
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A. By Agreement of Lease dated February 28, 1992 (the "Xxxxxxxxx"), 1290
Associates (together with its successor, the "Overlandlord") leased to Landlord
the entire 35th floor in the building known as 1290 Avenue of the Americas, New
York, New York (the "Building"). A copy of the Xxxxxxxxx has been delivered to
Tenant and Tenant, by its execution of this Sublease, acknowledges that it has
received the Xxxxxxxxx and that it understands the terms, covenants and
conditions thereof which are applicable to this Sublease.
B. By Lease Amendment Agreement dated as of May 4, 1993, Landlord and
Overlandlord added to the premises demised by the Xxxxxxxxx the 37th, 38th and
39th floors in the Building and otherwise modified the Xxxxxxxxx by terms which
are not relevant to (and are not incorporated in) this Sublease. The Xxxxxxxxx
has been further modified by additional agreements which are not relevant to
(and which are not incorporated in) this Sublease.
C. Tenant desires to sublease from Landlord, and Landlord is willing to
sublease to Tenant, the entire 35th floor (the "Demised Premises") in the
Building, on the terms and conditions set forth in this sublease.
Agreement
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1. Landlord hereby subleases to Tenant, and Tenant hereby hires and takes
from Landlord, the Demised Premises, to be used and occupied by Tenant for
general and executive offices and for no other purpose, for a term (the "Term")
to commence on the later to occur of January 1, 1998, or the date on which the
Overlandlord's consent (as contemplated by Section 8 hereof) is obtained (the
"Commencement Date") and to terminate on September 29, 2002 (the "Expiration
Date"), unless sooner terminated as herein provided, at an annual fixed rent
(the "Fixed Rent") of Eight Hundred Seventy-Five Thousand Four Hundred Three
($875,403.00) Dollars. So long as Tenant is not in default under this Sublease
beyond any applicable grace period, Tenant shall not be required to pay the
installments of Fixed Rent which would otherwise be due in respect of the first
four full calendar months of the Term. The Fixed Rent shall be payable in equal
monthly installments of Seventy-Two Thousand Nine Hundred Fifty and 25/100
($72,950.25) Dollars each. All monthly installments of Fixed Rent shall be
payable to Landlord in advance on the first day of each and every calendar month
during the Term, except that the rent for the fifth full month of the Term shall
be paid upon the execution and delivery of this lease to Landlord. The Fixed
Rent for any fractional month at the beginning or end of the Term shall be
apportioned.
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2. This lease is a sublease, the Demised Premises being demised to
Landlord by the Xxxxxxxxx. This Sublease is subject and subordinate to the
Xxxxxxxxx, and to any matters to which the Xxxxxxxxx is or shall be subordinate
and, in the event of termination, reentry or dispossess by Overlandlord, it may,
at its option, take over all of the right, title and interest of Landlord, as
sublessor, under this Sublease, and Tenant shall, at Overlandlord's option,
attorn to Overlandlord pursuant to the then executory provisions of this
Sublease, except that Overlandlord shall not be (i) liable for any previous act
or omission of Landlord under this Sublease, (ii) subject to any credit, offset,
claim, counterclaim, demand or defense which Tenant may have against Landlord,
(iii) bound by any previous modification of this Sublease or by any previous
prepayment of more than one (1) month's rent, (iv) bound by any covenant of
Landlord to undertake or complete any construction of the Demised Premises or
any portion thereof, (v) required to account for any security deposit of the
Tenant other than any security deposit actually delivered to Overlandlord by
Landlord, (vi) bound by any obligation to make any payment to Tenant or grant
any credits, except for services, repairs, maintenance and restoration provided
for under this Sublease to be performed after the date of such attornment, (vii)
responsible for any monies owing by Landlord to the credit of Tenant or (viii)
required to remove any person occupying the Demised Premises or any part
thereof. Tenant covenants that it shall so conduct itself and its operations in
and about the Demised Premises as not to cause Landlord to be in default under
the Xxxxxxxxx. Landlord represents that: (i) the Xxxxxxxxx, together with the
amendments thereto which are not incorporated in this Sublease, is in full force
and effect; (ii) Landlord is not in default thereunder; (iii) Landlord has the
full right and authority to enter into this Sublease and to sublet the Demised
Premises to Tenant as provided
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herein; (iv) there are no outstanding claims or demands by the Overlandlord with
respect to tenant improvements made by Landlord; and (v) to the best of
Landlord's knowledge, such tenant improvements (including, without limitation,
any work required to comply with Section 8.01 of the Xxxxxxxxx) have been made
in compliance with the requirements of the Xxxxxxxxx. If Landlord receives any
notice of default under the Xxxxxxxxx which will result in the termination of
this Lease, Landlord will promptly send a copy of such notice to Tenant.
3. The terms, covenants, provisions and conditions of the Xxxxxxxxx are
hereby incorporated herein and shall be binding upon both parties hereto, those
applying to the landlord therein applying, in this Sublease, to the Landlord,
and those applying to the tenant therein applying, in this Sublease, to the
Tenant, with the following exceptions:
(a) The Fixed Rent payable hereunder shall be as provided in
Section 1 hereof. In addition to such Fixed Rent, Tenant shall pay as
Additional Charges all other sums due under this Sublease, within 10
days after the submission of bills therefor (notwithstanding any
different payment period specified in the Xxxxxxxxx).
(b) In Article 3: (i) the "Base Operating Year" shall be
calendar year 1998; the "Base Tax Amount" shall be the average of the
Taxes for (A) the Tax Year commencing on July 1, 1997 and ending on
June 30, 1998 and (B) the Tax Year commencing on July 1, 1998 and
ending on June 30, 1999; references to "Landlord" in subdivisions (e)
and (h) of Section 3.01 shall be deemed to refer to the Overlandlord;
in Section 3.03(a), the words "commencing January 1, 1999" shall be
deemed substituted for the words "in which the Commencement Date
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occurs" in lines three and four; Landlord will promptly furnish to
Tenant copies of statements received from Overlandlord under Section
3.03(c) and 3.03(d); Section 3.03(e) shall not apply herein, but, at
Tenant's written request and at Tenant's expense, Landlord will
conduct the examination of Overlandlord's Records provided for in said
Section 3.03(e) and will promptly furnish a copy of the examination
report to Tenant (the costs of such examination to be billed to Tenant
as Additional Charges). Landlord will consult with Tenant with respect
to the costs to be incurred in connection with any examination
undertaken at Tenant's request under Section 3.03(e) of the Xxxxxxxxx
and will endeavor to keep such costs at a reasonable level, as if it
were making such examination on its own behalf.
(c) Article 14 of the Xxxxxxxxx shall not apply herein (except
for Section 14.08, which shall apply herein), but Tenant shall pay, as
Additional Charges, all sums payable under said Article 14 in respect
of the Demised Premises and in respect of the Term.
(d) Tenant is to have the benefit of all repairs, restoration,
materials and services to be provided to the Demised Premises and the
Building by the Overlandlord, but Landlord herein shall not be
obligated to make any repairs, alterations or restoration (whether
required for compliance with any laws and requirements of any public
authorities, compliance with any requirements of insurance bodies or
otherwise), to supply any materials or services to the Demised
Premises or to maintain any insurance with respect to the Demised
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Premises, nor shall Landlord be liable for the failure of others so to
do. Tenant recognizes that the foregoing does not create any direct
obligation of Overlandlord to Tenant, but Landlord agrees, if so
requested by Tenant, to make appropriate demand on the Overlandlord to
provide services and/or repairs to the Demised premises as required by
the Xxxxxxxxx, and Landlord will (i) cooperate with Tenant, at no cost
to Landlord, in seeking to obtain the performance of the Overlandlord
under the Xxxxxxxxx and (ii) use reasonable efforts, without expense
to it, to cause the Overlandlord to perform under the Xxxxxxxxx.
Tenant shall be entitled to up to 2 listings on the building directory
board. Notwithstanding the foregoing, Tenant shall not be responsible,
and Landlord shall be responsible, for compliance with laws and
requirements of public authorities and compliance with requirements of
insurance bodies, to the extent of any violation which may exist on
the date of this Sublease and which, under the terms of the Xxxxxxxxx,
is Landlord's responsibility to perform.
(e) Wherever the Xxxxxxxxx provides for, or conditions any right
upon, a consent or approval to be given by the landlord, or for some
matter to be effected to the satisfaction of the landlord, the consent
or approval or satisfaction of Landlord and of the Overlandlord shall
be required hereunder. Landlord shall not be liable to Tenant by
reason of the failure of the Overlandlord to furnish any such consent
or approval, for any reason whatsoever.
(f) The 20-day periods referred to in Section 22.02(b) of the
Xxxxxxxxx shall be reduced to 10 days, for purposes of this Sublease.
In addition, the 10-
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day period referred to in Section 11.01 of the Xxxxxxxxx shall be
increased to 20 days for purposes of this Sublease; and the words
"insuring the Building in the case of Landlord, and", in lines two and
three of Section 9.04, shall be deemed deleted, for purposes of this
Section.
(g) Notices to Landlord under this Sublease shall be addressed
to Landlord at:
EMI-Capitol Music Group, North America
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attn: Chief Financial Officer
with a duplicate original to:
EMI-Capitol Music Group, North America
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Attn: Senior Vice-President -- Facilities Management
(h) The term "Broker", as used in Section 28.01 of the Xxxxxxxxx
shall mean Insignia/Xxxxxx X. Xxxxxx Company Incorporated and CB
Commercial Real Estate Group, Inc.
(i) Wherever the Xxxxxxxxx requires the Tenant thereunder to
provide insurance or to give an indemnity for the benefit of the
landlord, the same shall be maintained or given, as the case may be,
for the benefit of Landlord and of Overlandlord.
(j) The following provisions of the Xxxxxxxxx shall not apply
herein: Sections 1.01 through 1.05; Section 2.01(a), except for the
first sentence thereof; Sections 5.04 and 5.05; the last sentence of
Section 8.01; Section 11.01, except
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for the first sentence thereof; Section 13.02; Section 22.02(e);
Section 29.03; the first two sentences of Section 35.18; and Article
36.
(k) Certain references to "Landlord" in the Xxxxxxxxx shall be
deemed modified, for purposes of this Sublease, as follows: the
references to Landlord in Section 8.02 shall be deemed to refer to
Landlord and to Overlandlord; the reference to Landlord in line three
of Section 9.02 shall be deemed a reference to the Overlandlord;
references to Landlord in Article 10 and in Section 11.06 of the
Xxxxxxxxx shall be deemed references to the Overlandlord; references
to Landlord in the last sentence of Section 13.01 shall be deemed
references to Landlord or the Overlandlord, as the case may be;
references to Landlord in Section 15.06 shall be deemed to refer to
the Overlandlord; references to Landlord in Sections 16.07 and 16.09
shall be deemed to refer to Landlord or the Overlandlord, as the case
may be; the reference to Landlord in the second line of Section 17.01
shall be deemed to refer to Landlord or Overlandlord.
4. Tenant has advised Landlord that Tenant wishes to perform alterations
to the Demised Premises, as outlined on the plan attached hereto as Exhibit A.
If Overlandlord has consented to such alterations, Landlord agrees that its
consent thereto will not be unreasonably withheld or delayed. If such
improvements remain a part of the Demised Premises at the expiration of the
Term, and if Overlandlord does not require that the same be removed, Landlord
will not require Tenant to remove the same.
5. Tenant has inspected and examined all the premises herein demised and
is thoroughly acquainted and familiar with the physical condition thereof.
Landlord has not made
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and does not make any representations as to the physical condition, expenses,
operation or any other matter or thing affecting or related to said premises.
Tenant hereby expressly acknowledges that no such representations have been
made, and agrees to take the premises "as is", except that Landlord shall
deliver the premises vacant and in broom clean condition on the Commencement
Date. It is understood and agreed that all understandings and agreements
heretofore had between the parties hereto are merged into this Sublease, which
alone fully and completely expresses their agreement, and that this Sublease is
entered into after full investigation, neither party relying upon any statement
or representation, not embodied in this Sublease, made by the other. This
Sublease cannot be changed or terminated orally, but only by an agreement in
writing.
6. (a) Tenant has deposited with Landlord the sum of Six Hundred Fifty-
Six Thousand Five Hundred Fifty-two and 25/100 ($656,552.25) Dollars as security
for the faithful performance and observance by Tenant of the terms, provisions,
covenants and conditions of this Sublease, and it is agreed that in the event
Tenant defaults after notice and the expiration of applicable grace or cure
periods in respect of any of the terms, provisions, covenants and conditions of
this Sublease, including, but not limited to, the payment of fixed or additional
rent, Landlord may use, apply or retain the whole or any part of the security so
deposited to the extent required for the payment of any rental or any other sum
as to which Tenant is in default or for any sum which Landlord may expend by
reason of Tenant's default after notice and the expiration of applicable grace
or cure periods in respect of any of the terms, provisions, covenants and
conditions of this Sublease, including, but not limited to, any damages or
deficiency accrued before or after summary proceedings or other reentry by
Landlord. In the
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event that Tenant shall fully and faithfully comply with all of the terms,
provisions, covenants and conditions of this Sublease, the security shall be
returned to Tenant not later than thirty (30) days after the later to occur of
the date fixed as the end of the term of this Sublease and delivery of entire
possession of the Demised Premises to Landlord. Twenty-four (24) months after
the rent commencement date, the security deposit shall be reduced to Four
Hundred Thirty-Seven Thousand Seven Hundred One and 50/100 ($437,701.50)
Dollars. In the event of transfer of the Xxxxxxxxx, Landlord shall transfer the
security to the transferee and upon written notice to Tenant of the name and
address of such transferee, and such transferee's acceptance of the security or
assumption of Landlord's obligations with respect thereto, Landlord shall
thereupon be released by Tenant from all liability for the return of such
security, and Tenant agrees to look solely to the new landlord for the return of
said security, and it is agreed that the provisions hereof shall apply to every
transfer or assignment made of the security to a new landlord. Tenant further
covenants and agrees that it will not assign or encumber or attempt to assign or
encumber the monies deposited herein as security and that neither Landlord nor
its successors or assigns shall be bound by any such assignment, encumbrance,
attempted assignment or attempted encumbrance. In the event Landlord applies or
retains any portion or all of the security so deposited, Tenant shall, within
ten (10) days after demand therefor, restore the amount so applied or retained
so that at all times the amount deposited shall be the full amount of the
security deposit required under this Sublease at the relevant time. The security
shall be deposited in an interest-bearing account in a bank located in New York
City, selected by Landlord, and interest earned on the account (less the one
percent (1%) administrative fee allowed by law, which may be retained by
Landlord) shall be paid to Tenant annually.
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(b) In lieu of the cash security deposit referred to in paragraph (a)
above, Tenant may deliver to Landlord, and shall maintain in effect at all times
during the term of this Sublease (and through the period which is thirty (30)
days following the later to occur of (i) the stated expiration date of this
Sublease and (ii) delivery of possession of the entire Demised Premises to
Landlord), a clean, unconditional and irrevocable letter of credit, in a form
reasonably acceptable to Landlord, naming Landlord as beneficiary, in the amount
of the cash security deposit required to be maintained under paragraph (a)
above, issued by a banking corporation ("Bank") which is a member of the New
York Clearing House Association or successor thereto and capable of presentment
at a bank office in Manhattan. Such letter of credit shall have an expiration
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date no earlier than the first anniversary of the date of issuance thereof and
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it shall be automatically renewed from year-to-year unless terminated by the
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Bank by notice to Landlord given not less than forty-five (45) days prior to the
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then expiration date therefor: or, if such letter of credit is not automatically
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renewable, Tenant shall furnish to Landlord a replacement letter of credit, with
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an expiration date not earlier than the first anniversary of the expiration date
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of the then-existing letter of credit (or October 29, 2002, if earlier). It is
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agreed that in the event Tenant defaults in respect of any of the terms,
covenants or provisions of this Sublease, including, but not limited to, the
payment of any rental, and such default continues after notice and beyond the
applicable grace or cure period, if any, or if any letter of credit is
terminated by the Bank and/or is not replaced at least thirty (30) days prior to
its expiration that (i) Landlord shall have the right to require the Bank to
make payment to Landlord of so much of the entire proceeds of the letter of
credit as shall be appropriate, in Landlord's sole discretion, to cure the
default (or the entire proceeds if notice of termination is given as aforesaid
and/or
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the letter of credit is not replaced as aforesaid), and (ii) Landlord may apply
said sum so paid to it by the Bank to the extent required for the payment of any
rental or any other sum as to which Tenant is in default or for any sum which
Landlord may expend by reason of Tenant's default (and which Landlord would be
entitled to recover from Tenant pursuant to the terms of this Sublease) in
respect of any of the terms, covenants and conditions of this Sublease,
including, but not limited to, any damages or deficiency in the reletting of all
or a portion of the Demised Premises, whether such damages or deficiency accrue
before or after summary proceedings or other re-entry by Landlord, without
thereby waiving any other rights or remedies of Landlord with respect to such
default. If Landlord applies any part of the proceeds of a letter of credit,
Tenant, upon demand, shall deposit with Landlord, within ten (10) days after
demand therefor, the amount so applied or retained (or increase the amount of
the letter of credit) so that the Landlord shall have the full deposit required
under this Sublease on hand at all times during the term of this Sublease. If,
subsequent to a letter of credit being drawn upon, a new letter of credit
meeting all the requirements set forth in this paragraph (b) is delivered to
Landlord, any proceeds of the former letter of credit then held by Landlord as a
security deposit shall be promptly returned to Tenant. If a letter of credit is
drawn upon, any proceeds received by Landlord which are not applied to the
curing the default shall be held by Landlord subject to the provisions of
paragraph (a) above. In the event of an assignment by Landlord of its interest
under this Sublease, Landlord shall transfer the security to the assignee, and
upon written notice to Tenant of the name and address of such assignee, and such
assignee's acceptance of the security, Tenant agrees to look solely to the new
landlord for the return of the security; and it is agreed that the provisions
hereof shall apply to every transfer or assignment made of the
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security to a new landlord, provided that the assignee acknowledges acceptance
of the security. Tenant shall have the right to substitute one letter of credit
for another, provided that at all times the letter of credit shall meet the
requirements of this paragraph (b).
7. Terms (whether capitalized or not) which are used or incorporated in
this Sublease, which are not separately defined herein, and which are defined in
the Xxxxxxxxx, shall have the meanings given to them in the Xxxxxxxxx. In the
event of conflict between an express term of this Sublease (i.e., a term set
forth directly in this instrument and not a term incorporated herein) and an
express term of the Xxxxxxxxx, this Sublease shall take precedence and shall
control.
8. This sublease shall not take effect unless and until there has been
obtained the written consent hereto of the Overlandlord (including consent for
any initial work to be performed by Tenant and which requires consent under
Article 11 of the Xxxxxxxxx, provided that plans and specifications for such
work--meeting the requirements of said Article 11--are delivered by Tenant to
Landlord simultaneously with or prior to the delivery of this Sublease), and
Landlord shall not be liable to Tenant by reason of the failure of the
Overlandlord to furnish such consent, for any reason whatsoever. Landlord
agrees, in requesting such consent, to seek the Overlandlord's agreement that
the improvements proposed to be made by Tenant need not be removed at the end of
the Term; however, the failure or refusal of Overlandlord to agree to the same
shall not be a condition of the granting of such consent. If such consent has
not been obtained by February 1, 1998, Tenant may thereafter terminate this
Sublease by notice given at any time prior to the granting of such consent. In
addition, if such consent is refused or if such consent has not been obtained by
March 1, 1998, this Sublease shall automatically be terminated.
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In the event of termination of this Sublease under either of the preceding two
sentences, Landlord shall return to Tenant all monies paid hereunder, and
neither party shall otherwise have any rights against or obligations to the
other hereunder or with respect to the Demised Premises.
IN WITNESS WHEREOF, the parties hereto have duly executed this sublease as
of the day and year first above written.
EMI ENTERTAINMENT WORLD, INC.
By: /s/ Xxxx Xxxxxx
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Printed Name: Xxxx Xxxxxx
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Title:
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XXXXXXX XXXXXXXX XXXXXXXX, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Printed Name: Xxxxxx X. Xxxxxxx
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Title: SVP . CFO
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