EXHIBIT 10.17
SUBLEASE AGREEMENT
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This Sublease Agreement is made as of the 7th day of January, 2003
between Health Management Systems, Inc., a New York corporation, having its
offices at 000 Xxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Sublandlord"), and
Vitech Systems Group, Inc., a Delaware corporation, having its offices at 000
Xxxx Xxxxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Subtenant").
WITNESSETH:
WHEREAS, pursuant to that certain lease dated the 24th day of
September, 1981, as amended, (such lease and amendments hereinafter
collectively, "Master Lease", a copy of which is attached hereto as Schedule A
and made a part hereof) by and between 000 Xxxx Xxxxxx Xxxxx Associates, as
Landlord (hereinafter referred to as "Master Landlord"), and Sublandlord as
Tenant, Master Landlord leased to Sublandlord the entire fourth floor, which for
purposes of this Sublease shall be deemed to consist of approximately 18,500
square feet, (the "Sublet Premises") of the building located at 000 Xxxx Xxxxxx
Xxxxx, in the Borough of Manhattan, City, County and State of New York (the
"Building") at a rent and subject to the terms and conditions set forth in the
Master Lease; and
WHEREAS, Subtenant desires to sublet the entire Sublet Premises from
the Sublandlord upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto, for themselves, their successors
and assigns, mutually covenant and agree as follows:
1. Use and Occupancy. The Subtenant represents that it is a general
business corporation and shall use and occupy the Sublet Premises for general
and executive offices only.
2. Demise. Sublandlord does hereby sublease to Subtenant, and Subtenant
does hereby sublease from Sublandlord, for the term and upon the conditions
hereinafter provided, the entire Sublet Premises, together with the right to use
the common facilities and services included in the Building. The Sublet
Premises, is outlined on the floor plan attached hereto and made a part hereof
as Schedule B.
3. Condition of Sublet Premises. Subject to the provisions of this
Sublease, Subtenant shall accept and Sublandlord shall deliver to Subtenant
vacant possession of the Sublet Premises on the Commencement Date (hereinafter
defined) in its "as is" condition existing on the date of this Sublease, without
requiring any alterations, improvements, repairs or decorations to be made by
Sublandlord, or at Sublandlord's expense, either at the time possession is given
to Subtenant or during the entire term of this Sublease, and without
representation, warranty or guaranty of any kind by Master Landlord or
Sublandlord. In connection therewith, Subtenant represents that it has
thoroughly examined the Building and the Sublet Premises.
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4. Term and Termination. The term of this Sublease (the "Sublease
Term") shall commence on the "Commencement Date" (hereinafter defined) and shall
end on May 31, 2013 or on such earlier date upon which said term may expire or
be terminated pursuant to any of the conditions, limitations or other provisions
of this Sublease, the Master Lease or pursuant to law. The term "Commencement
Date" shall be the date which is the later to occur of the following: (i) this
Sublease Agreement is fully executed; (ii) Sublandlord shall have delivered to
Subtenant a copy of the requisite written consent of Master Landlord ("Master
Landlord's Consent") to this Sublease; and (iii) Subtenant shall have obtained
from Master Landlord an amendment to its lease of the 12th floor of the Building
(the "12th Floor Lease") extending the term of the 12th Floor Lease to be
coterminus with this Sublease. Each year of the Sublease Term, after the first
year, shall commence on the 1st day of February and end on 31st day of January
of following year. "Substantial Completion of the Subtenant Work" shall be
deemed to have occurred as soon as (x) the work is substantially completed
except for minor or insubstantial details of construction, mechanical
adjustment, decoration or other so-called "punch-list" items and (y) Sublandlord
has tendered possession of the Sublet Premises to Subtenant and Subtenant has
reasonable access to and can reasonably conduct its business in the Sublet
Premises.
5. Rent.
a. The Subtenant shall pay to the Sublandlord an annual fixed base
rent ("Fixed Rent"), as follows:
Year Beginning/Ending Annually Monthly
1 Commencement Date to January 31, 2004 $518,000.00 $43,166.67
2 February 1, 2004 to January 31, 2005 528,360.00 44,030.00
3 February 1, 2005 to January 31, 2006 538,927.20 44,910.60
4 February 1, 2006 to January 31, 2007 549,705.84 45,808.82
5 February 1, 2007 to January 31, 2008 560,699.88 46,724.99
6 February 1, 2008 to January 31, 2009 47,659.49
571,913.88
7 February 1, 2009 to January 31, 2010 583,352.16
48,612.68
8 February 1, 2010 to January 31, 2011 595,019.28 49,584.94
9 February 1, 2011 to January 31, 2012 606,919.68 50,576.64
10 February 1, 2012 to January 31, 2013 619,058.04 51,588.17
11 February 1, 2013 to May 31, 2013 631,439.16 52,619.93
Notwithstanding the foregoing, Subtenant shall be entitled to a rent abatement
until the date that is the four month anniversary of Substantial Completion of
the Subtenant Work (the "Rent Commencement Date"). If the Rent Commencement Date
is a day other than the first day of a calendar month, then the Subtenant shall
pay upon the Rent Commencement Date a portion of the Fixed Rent pro rated on a
per diem basis from the Rent Commencement Date to the end of the month in which
the Rent Commencement Date occurs. Monthly installments of Rent during the first
year of this Sublease will begin on the Rent Commencement Date and end with the
payment of Rent for the month of January 2004. For example, if the Rent
Commencement Date is June 1, 2003, Subtenant will pay to Sublandlord monthly
installments of Fixed Rent from June 1st of that year through January 31st of
2004 in the amount of $ 43,166.67. On February 1, 2004 the monthly installment
of Fixed Rent will change to $44,030.00. Based upon the foregoing, Year 11 will
consist of four installments of monthly Fixed Rent in the amount of $52,619.93.
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b. All other sums due and owing to Sublandlord as Additional Rent
pursuant to this Sublease, including the provisions of the Master Lease that are
not expressly deleted herein shall be payable to Sublandlord as Additional Rent
hereunder. "Additional Rent" shall be defined as any sum due and owing to the
Sublandlord by the Subtenant pursuant to this Sublease or the Master Lease other
than the Fixed Rent.
c. All payments of Rent and Additional Rent shall be made in the
manner and amount provided for in this Sublease and the Master Lease directly to
the Sublandlord on or before the 28th day of the preceding month of each
calendar month of the Sublease Term. Any payment not received by the Sublandlord
within three (3) business days of its due date shall be subject to a late fee
equal to 1.5% of the amount past due. Failure to timely pay the Fixed Rent for
three months during any twelve month period shall be deemed a material breach
and, in addition to any other remedies to which the Sublandlord is entitled,
shall prohibit Subtenant from electing to reduce the amount of the Security
Deposit (hereinafter defined) as contemplated by Paragraph 26 hereunder.
d. All sums, other than the late fees incurred with respect to
Fixed Rent and Additional Rent, which Sublandlord is required to pay to Master
Landlord or others as a consequence of any breach or default by Subtenant under
the covenants, provisions, terms and conditions of the Master Lease on the part
of the Subtenant to be performed or observed pursuant to the requirements of
this Sublease shall be payable to the Sublandlord immediately upon written
notice to Subtenant.
6. Annual Tax Escalation. Commencing with the January 28, 2004 payment
of Fixed Rent and continuing annually during the Term, Subtenant shall be liable
to pay, on account of increases in the real estate taxes attributable to the
Building as contemplated in the Master Lease, an amount equal to 8.33 % of the
increase in real estate taxes for the entire Building over the Base Year. The
"Base Year" shall be the tax year beginning January 1, 2003 and ending December
31, 2003. Subtenant's proportionate share of such increase is calculated by
dividing the total square footage of the Sublet Premises (18,500 square feet) by
the total square footage of the Building (222,000 square feet). Sublandlord
shall send a copy of the semi-annual statement of real estate tax or other
increases for which Subtenant is responsible to Subtenant after receipt thereof
from the Master Landlord and Subtenant shall pay said sum to the Sublandlord
within ten (10) business days of receipt thereof.
7. Electricity. Sublandlord shall provide Subtenant with not less than
800 amperes of electricity as measured at the meter. Subtenant shall be
responsible for (i) the payment directly to the Sublandlord of all Subtenant's
electricity charges during the Sublease Term (which will be separately metered
and directly billed to Subtenant).
8. Master Lease.
a. Except as otherwise provided hereunder, as between the parties
hereto, all of the terms, provisions, covenants and conditions of the Master
Lease are incorporated herein by reference and hereby made a part of this
Sublease. However, for purposes of such incorporation by reference, all
references to Landlord/Lessor and Tenant/Lessee shall be deemed references to
Sublandlord and Subtenant, respectively, all references to Health Management
Systems, Inc. shall be deemed references to Vitech Systems Group Inc., all
references to Premises shall be deemed references to the Sublet Premises, all
references to the term of the Master Lease shall be deemed references to the
Sublease Term and all references to Commencement Date shall be deemed to refer
to the Commencement Date hereunder.
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b. Subtenant shall be entitled to the same notice and cure periods
as Sublandlord is afforded pursuant to the relevant paragraphs of the Master
Lease, less: (a) one (1) day where the notice and cure period in the Master
Lease is five (5) days or less; or (b) three (3) days where the notice and cure
period in the Master Lease is more than five (5) days.
c. Subtenant shall have all of the rights of the Tenant under the
Master Lease as against Sublandlord and, as between the parties hereto,
Sublandlord agrees to observe and perform all of the terms, covenants and
conditions on Sublandlord's part to be observed and performed under the Master
Lease, to the extent that they are not inconsistent with the provisions of this
Sublease, as if Subtenant were the Tenant and Sublandlord were the Landlord.
d. Sublandlord shall have all the rights of the Master Landlord
under the Master Lease as against Subtenant and, as between the parties hereto,
Subtenant agrees to be bound by and to perform and comply with all the
covenants, provisions, terms and conditions of the Master Lease, to the extent
that they are not inconsistent with the provisions of this Sublease, as if
Sublandlord were the Landlord and Subtenant were the Tenant under the Master
Lease, excluding Sublandlord's covenants to pay rent, Additional Rent and other
charges to the Landlord thereunder, subject to the following:
(i) The "Term" referred to in the Master Lease, for purposes of
this Sublease, is replaced with the Sublease Term set forth in Paragraph 4
hereunder.
(ii) The "Fixed Rent" payment amount and schedule referred to
in the Master Lease is replaced with the dates and amounts set forth in
Paragraph 5 hereunder.
(iii) Except as otherwise expressly provided in this Sublease,
Additional Rent shall be paid at the same time as Fixed Rent.
(iv) All references to or in connection with the term
"Landlord's Work" in the Master Lease, for purposes of this Sublease, are
deleted and of no force and effect.
(v) (i) Articles 40, 41(n), 42(b)(f), 45(g)(i), 48, 53, 60, 62,
63, 66, 68, 69, 70, 71 and the 4th, 5th and 7th Amendments of the Master Lease
are deleted in their entirety and Subtenant shall have no rights or obligations
thereunder, except as otherwise set forth in any portion of this Sublease; (ii)
the date "November 1, 1981" set forth in Article 41 shall be replaced by the
date set forth in this Sublease with respect to the Subtenant Work; and (iii)
the electrical system as set forth in Article 42(e) has been upgraded to 800
amperes.
(vi) The tax years referred to in the Master Lease, for purposes
of determining the Base Taxes in this Sublease, shall mean the tax year
commencing January 1, 2003 and ending December 31, 2003.
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e. If during the term of this Sublease, Subtenant enters into
negotiations to lease all or a portion of the 4th Floor of 000 Xxxx Xxxxxx Xxxxx
("000 Premises") and Subtenant requests Sublandlord to permit Subtenant to
construct an opening connecting the Sublet Premises to the 4th Floor of the 387
Premises, then Sublandlord shall request that Master Landlord consent to such
request and, upon obtaining the consent of the Master Landlord, Sublandlord
shall also consent to the terms and conditions granted by the Master Landlord,
which, if accepted by Subtenant, shall be deemed a part of the Master Lease.
f. In the event that Subtenant transfers a majority of the stock
of Subtenant pursuant to an Initial Public Offering, then same shall not be
deemed an assignment, notwithstanding anything to the contrary contained in
Article 44 of the Master Lease.
9. Representations of Subtenant re: Master Lease. Subtenant represents
to Sublandlord that Subtenant has read the Master Lease and is fully familiar
with all of the terms and conditions therein; specifically, notwithstanding
anything to the contrary contained in this Sublease, Subtenant acknowledges and
agrees that:
a. The effectiveness of this Sublease is subject to the consent of
the Master Landlord and shall not be binding upon the parties until the
Sublandlord and Subtenant each receives written consent from the Master
Landlord, which consent shall include the non-disturbance language contained in
Paragraph 10(f) below.
b. Neither Sublandlord nor Master Landlord shall be held liable by
the Subtenant for the failure of the Master Landlord to give its consent to the
Sublease; provided that Sublandlord shall use it best efforts to obtain the
Master Landlord's Consent.
10. Representations and Warranties of Sublandlord. The Sublandlord
represents and warrants to the Subtenant that:
a. The Sublet Premises are the same premises referred to in the
Master Lease.
b. The Master Lease is now in full force and effect and has the
Fixed Expiration Date of May 31, 2013.
c. (i) Neither the Master Landlord nor the Sublandlord is now in
default in performance of any of their respective obligations under the Master
Lease; (ii) the Sublandlord has not received any notice of special assessment,
default or claimed default from Master Landlord; and (iii) the Sublandlord shall
not be in default of the Master Lease on the Commencement Date.
d. (i) Sublandlord is the owner of the entire interest of Tenant
under the Master Lease and has not in any way encumbered such interest or
granted any other party the right to possess the Sublet Premises; and (ii)
neither the granting of the Sublease nor the conveyance of the Transferred
Furniture to Subtenant will violate any agreement or court order by which
Sublandlord is bound.
e. Sublandlord owns good and marketable title to the Transferred
Furniture (as defined hereinafter in Paragraph 14), free and clear of all liens
and encumbrances.
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f. Sublandlord agrees that the form of Master Landlord's Consent
submitted by Sublandlord to Master Landlord shall contain the following
language:
Promptly after execution of the Sublease, Master
Landlord will provide Subtenant with a
non-disturbance agreement in the standard form
customarily employed by Master Landlord, pursuant to
which Master Landlord shall agree that the leasehold
estate granted to Subtenant and the rights of
Subtenant pursuant to the Sublease to quiet and
peaceful possession of the Sublet Premises shall not
be terminated, modified, affected or disturbed by an
action which Master Landlord may take to enforce its
rights against the Sublandlord under the Master
Lease. Such agreement shall remain in effect so long
as Subtenant shall pay Rent, additional rent and
other amounts payable by Subtenant under the
Sublease, and for so long as Subtenant is not in
default (beyond any applicable notice and cure
period)under the Sublease.
g. Sublandlord agrees that so long as Subtenant is not in default
(beyond any applicable notice and cure period) under the Master Lease or this
Sublease, the Sublandlord will: (i) timely pay the Fixed Rent and Additional
Rent to the Landlord and perform all of its other obligations as required by the
Master Lease; and (ii) if requested by Subtenant, with Subtenant's full
cooperation and at Subtenant's sole expense, take such reasonable actions as may
be necessary to afford Subtenant access to the Sublet Premises and the benefit
of the services it is entitled to from the Landlord under the Master Lease.
11. Heating, Ventilation and Air Conditioning ("HVAC') Mechanical
Systems. Sublandlord shall deliver the existing HVAC systems in "good working
order". Maintenance of and repair of such systems shall be the responsibility of
the Subtenant. Except as may be reasonably necessary for maintenance of the
Building or as otherwise required by the Master Landlord, Subtenant shall have
control of its HVAC seven days a week and 24 hours per day.
12. Insurance. Subtenant shall obtain and maintain all insurance types
and coverage as specified in the Master Lease to be obtained and maintained by
Sublandlord, as tenant, in amounts not less than those specified in the Master
Lease. All such policies of insurance shall name Master Landlord, Master
Landlord's Managing Agent, The Fee Owner, the Fee Owner's Agent, the Mortgagee
and Sublandlord as additional insured thereunder. The names and addresses of the
forgoing are set forth on Schedule D attached hereto and made a part hereof.
13. Services.
a. Subtenant shall be entitled to receive from the Master Landlord
all of the services which Sublandlord is entitled to receive as a tenant under
the Master Lease.
b. Notwithstanding anything to the contrary contained in this
Sublease, Subtenant agrees to look solely to the Master Landlord for such
services, repairs and supplies and to promptly pay Master Landlord or
Sublandlord, as may be the case, for any such services, repairs or supplies
which Master Landlord is not required to furnish under the Master Lease without
a separate charge.
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14. Furniture. During the Sublease Term, Subtenant shall be entitled,
at no additional cost to Subtenant, to use, at its selection, any or all of
Sublandlord's office furniture and plants as they presently exist in the Sublet
Premises ("Transferred Furniture") in their "as is" condition. Sublandlord
agrees to remove any items of such furniture and plants not selected by
Subtenant prior to the Commencement Date. Once selected by Subtenant, the
maintenance and/or removal of the Transferred Furniture shall be the sole
responsibility of the Subtenant. Title to the Transferred Furniture shall be
conveyed to Subtenant at the conclusion of the Sublease Term provided that
Subtenant is then not in default (beyond any applicable notice and cure period)
of this Sublease.
15. Place for Payments. All payments required to be made by the
Subtenant herein shall be made to Sublandlord, at Sublandlord's office specified
in Paragraph 21 of this Sublease, or at such other place as Sublandlord shall
hereafter from time to time direct in writing.
16. Brokers. Sublandlord and Subtenant each hereby represent and
warrant that it has not dealt with any broker other than Xxxxxx Comfort & Sons,
Inc. in connection with this Sublease, and that Sublandlord shall pay any
brokerage fees which shall be due in connection therewith pursuant to a separate
agreement. Each party shall indemnify the other against any cost or liability
resulting from the indemnifying party's breach of the foregoing representation
and warranty.
17. Subtenant Work. In order to accommodate Subtenant's initial space
needs, Subtenant may make the necessary changes, additions, alterations,
repairs, replacements or improvements to the Sublet Premises (the "Subtenant
Work"). The Subtenant Work shall be performed in accordance with Article 41 of
the Master Lease and Paragraph 19 and Schedule C of this Sublease. Subject to
the terms and conditions of Schedule C, Sublandlord shall pay to Subtenant the
maximum sum of Four Hundred Forty-Four Thousand ($444,000.00) Dollars to
reimburse it for the cost and expense (including the fees of architects,
engineers, expediters, consultants and other professionals) of the performance
of the Subtenant Work. Subtenant shall not be entitled to a rent abatement or
other refund in the event that the cost and expense of the Subtenant Work is
less than $444,000.00. In the event that the cost and expense of the Subtenant
Work exceeds $444,000.00, any such excess shall be the sole responsibility of
Subtenant.
18. Additional Space. (a) Sublandlord currently leases additional space
("Additional Space") in the Building from the Master Landlord. It is understood
and agreed that, to the extent it is not a violation under the Master Lease, in
the event Sublandlord intends to extend or accept an offer for sublease or
assignment (to an entity other than a business division or affiliate of
Sublandlord, or pursuant to a sale, merger or change in ownership or control of
Sublandlord) any Additional Space during the Sublease Term, Subtenant shall be
entitled to a right of first offer or refusal, as the case may be, as follows:
(i) In the case of the right of first offer, Sublandlord
shall, by written notice ("ROFO Notice"), notify Subtenant of the
location and amount of square feet of Additional Space being offered
and the amount of net rent (i.e. taking into account any construction
allowance, rent abatement and other financial terms) for such
Additional Space. Subtenant shall have thirty (30) days from the date
of receipt of the ROFO Notice to notify Sublandlord, in writing (the
"ROFO Acceptance"), if Subtenant desires to sublease the entire
Additional Space offered at the net rent amount set forth in the ROFO
Notice.
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In the event Subtenant does not timely provide Sublandlord with the
ROFO Acceptance, or Sublandlord and Subtenant, after good faith
efforts, do not enter into a sublease or assignment agreement within
thirty (30) days from the date of the ROFO Acceptance, Sublandlord
shall have no further obligations to Subtenant with respect to such
Additional Space, except that in the event Sublandlord enters into
negotiations with a third party for such Additional Space at a net rent
amount equal to less than ninety percent (90%) of the net rent stated
in the ROFO Notice, Sublandlord shall provide Subtenant with a second
ROFO Notice setting forth the new net rent amount. Subtenant shall then
have five business days from the date of receipt of the second ROFO
Notice to provide Sublandlord with the second ROFO Acceptance. In the
event Subtenant does not timely provide Sublandlord with the second
ROFO Acceptance, or Sublandlord and Subtenant, after good faith
efforts, do not enter into a sublease or assignment agreement within
ten (10) days from the date of the second ROFO Acceptance, Sublandlord
shall have no further obligations whatsoever to Subtenant with respect
to such Additional Space.
(ii) In the case of the right of first refusal, Sublandlord
shall, by written notice ("ROFR Notice"), notify Subtenant of the
location and the amount of square feet of Additional Space being
solicited by a third party and the amount of the net rent for such
Additional Space. Subtenant shall have fifteen (15) days from the date
of receipt of the ROFR Notice to notify Sublandlord, in writing (the
"ROFR Acceptance"), if Subtenant desires to sublease the entire
Additional Space solicited at the net rent amount set forth in the ROFR
Notice. In the event Subtenant does not timely provide Sublandlord with
the ROFR Acceptance, or Sublandlord and Subtenant, after good faith
efforts, do not enter into a sublease or assignment agreement within
thirty (30) days from the date of the ROFR Acceptance, Sublandlord
shall have no further obligations to Subtenant with respect to such
Additional Space.
(b) The parties agree that the negotiated sublease for the
Additional Space, whether pursuant to the right of first offer or the right of
first refusal, will be in substantially the same form as this Sublease except
for financial matters. Notwithstanding the foregoing, nothing contained herein
shall be construed as Sublandlord making any warranty or representation that it
will or intends to sublease or assign any Additional Space during the Sublease
Term.
19. Avoidance of Default of Master Lease. Subtenant represents and
agrees that it will neither do, suffer, nor permit anything to be done which
would or reasonably could result in a default under the Master Lease.
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20. Assigning and Subletting. There shall be no assignment or
subletting of the Sublet Premises without the prior written consent of the
Sublandlord and Master Landlord and any permitted assigning or subletting shall
be subject to the terms, conditions and procedures of the Master Lease.
21. Notices. All notices required or permitted hereunder shall be in
writing and addressed as follows:
If to the
Master Landlord: 000 Xxxx Xxxxxx Xxxxx Xxxxxxxxxx, LLC
00 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxx, Property Manager
Phone: (000) 000-0000
Fax: (000) 000-0000
If to
Sublandlord: Health Management Systems, Inc.
000 Xxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Phone: (000) 000-0000
Fax: (000)000-0000
E-Mail: xxxxxxxx@xxxx.xxx
with a copy to: Xxxxx Xxxxxxx Berlack Israels LLP
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
E-Mail: xxxxxxxx@xxxxxxx.xxx
If to
Subtenant: Vitech Systems Group Inc.
000 Xxxx Xxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx Xxxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
with a copy to: Greenfield Xxxxx & Senior, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxx, Esq.
Phone: (000) 000-0000
Fax: (000) 000-0000
E-Mail: xxxxx@xxx-xxx.xxx
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or to such other address and attention as any of the above shall notify the
others in writing. Any notice shall have been deemed duly given when received
and may be made by mail, overnight express courier, hand delivery or (except in
the case of a notice of default) by fax.
22. Successors and Assigns. This Sublease and everything herein
contained shall extend to and bind and inure to the benefit of the Sublandlord
and its successors and assigns and the Subtenant and its permitted successors
and assigns. No rights shall inure to the benefit of any assignee, subtenant or
occupant unless the provisions of the Master Lease and this Sublease are
complied with.
23. Miscellaneous. Neither Sublandlord nor any agent or representative
of Sublandlord has made or is making, and Subtenant in executing and delivering
this Sublease is not relying upon, any warranties, representations, covenants,
promises or statements whatsoever, except to the extent expressly set forth in
this Sublease, or (with respect to covenants and promises only) in the Master
Lease. All understandings and agreements, if any, heretofore had between the
parties are merged into this Sublease, which alone fully and completely
expresses the agreement of the parties. No surrender of possession of the Sublet
Premises or of any part thereof or of any remainder of the term of this Sublease
shall release Subtenant from any of its obligations hereunder; unless accepted
by Sublandlord in writing. The receipt and retention by Sublandlord of monthly
Fixed Rent or Additional Rent payments from anyone other than Subtenant or a
permitted assignee shall not in itself be deemed a waiver of the breach by
Subtenant of any covenant, agreement, term or provision of this Sublease, or as
the acceptance of such other person as a tenant, or as a release of Subtenant
from the covenants, agreements, terms, provisions and conditions herein
contained. The receipt and retention by Sublandlord of monthly Fixed Rent or
Additional Rent with knowledge of the breach of any covenant, agreement, term,
provision or condition herein contained shall not in itself be deemed a waiver
of such breach.
24. Quiet Enjoyment. So long as Subtenant is not in default (beyond any
applicable notice and cure period) under this Sublease, its quiet enjoyment of
the Sublet Premises shall not be disturbed or interfered with by Sublandlord or
anyone claiming by, through or under Sublandlord.
25. Sublandlord's Consent. Whenever Sublandlord's consent is required
under this Sublease, (a) Sublandlord's rejection of a request made by Subtenant
shall not be deemed unreasonable, in any case, if such rejection is based on
Master Landlord's rejection of such request, and (b) except as otherwise set
forth herein, Sublandlord's consent shall not be unreasonably withheld,
conditioned or delayed. Where privity of contract is an issue, Sublandlord
agrees to make any such request on Subtenant's behalf and provide Subtenant with
the reasonable consent necessary to enforce Subtenant's rights and perform
Subtenant's obligations under this Lease.
26. Security Deposit. Within ten days after the execution of this
Sublease, Subtenant shall provide to Sublandlord either a check, wire transfer,
or letter of credit, in a form reasonably acceptable to Sublandlord's counsel,
in the amount of One Hundred Fifty-Two Thousand Five Hundred ($152,500.00)
Dollars (the "Security Deposit"). If the initial Security Deposit is paid by
check or wire transfer, Subtenant shall have the right at any time thereafter to
substitute a letter of credit, in a form reasonably acceptable to Sublandlord's
counsel. If on the
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3rd and 4th anniversary of the Commencement Date, respectively, Subtenant is not
in default (beyond any applicable notice and cure period) under the terms and
conditions of this Sublease, Subtenant may elect to reduce the then current
balance of the Security Deposit by the sum of $33,083.00, so that on the 3rd and
4th anniversary of the Commencement Date the Security Deposit shall be reduced
to $119,417.00 and $86,334.00, respectively. In the event the Security Deposit
is made by check or wire transfer, the Security Deposit shall be: (i) maintained
by Sublandlord in a segregated interest bearing account maintained for the
benefit of the ultimate recipient of the Security Deposit; and (ii) shall be
subject to an annual administration fee in an amount equal to the then current
balance of the Security Deposit multiplied by a percentage which is the lesser
of: (x) the then current interest rate applying to the Security Deposit; and (y)
one-half percent (.50%). The administration fee is to be paid by Subtenant to
Sublandlord along with the payment of the Fixed Rent installment each February
1st during the Sublease Term, commencing with the February 1, 2004 rent payment.
27. End of Term. In addition to the terms and conditions set forth in
the Master Lease, upon the expiration of this Sublease:
a. Subtenant shall remove all of its furniture (including the
Transferred Furniture), furnishings, trade fixtures and other movable property
from the Sublet Premises, if required by the Master Lease.
b. Unless otherwise consented to in writing by the Sublandlord,
Subtenant shall, at its sole cost and expense, remove all structural alterations
made by Subtenant, if such removal shall be required pursuant to the Master
Lease, provided however, Subtenant shall not be required to remove any
installations or alterations made by Sublandlord that were not requested by
Subtenant.
28. Capitalized Terms. Any capitalized terms not otherwise defined in
this Sublease shall have the meanings described in the Master Lease.
29. Material Breach. The designation of an act as a material breach in
this Sublease shall not be interpreted to mean that a material breach of this
Sublease must be so designated.
30. Counterparts. This Sublease may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
31. Facsimile. This Sublease may be executed via facsimile copy with
the original to be delivered to the other party within seven (7) days
thereafter.
32. Severability. It is the intention of the parties that this Sublease
shall be enforceable to the fullest extent invalid or unenforceable, either in
whole or in part, this Sublease shall be deemed amended to delete or modify, as
necessary, the offending provision or provisions and to alter the bounds thereof
in order to render it valid and enforceable to the fullest extent permitted by
law.
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33. Conflicting Provisions. In the event of any conflict, inconsistency
or ambiguity between the provisions of this Sublease and the Master Lease, as
between the Sublandlord and the Subtenant, the provisions of this Sublease shall
control.
34. Binding Effect. This Sublease shall not be binding upon the
Sublandlord or Subtenant unless and until it has been duly executed by
Sublandlord and Subtenant and delivered to the other party.
[The following page is the signature page.]
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IN WITNESS WHEREOF, the parties hereto as of the date and year first
set forth above have duly executed this Sublease.
SUBLANDLORD:
HEALTH MANAGEMENT SYSTEMS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------
Xxxxxxx X. Xxxxxxx
Vice President
SUBTENANT:
VITECH SYSTEMS GROUP, INC.
By: /s/ Xxxxx Uitiello
-----------------------
Xxxxx Uitiello
Vice President
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Schedule A
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(Master Lease and Amendments thereto)
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Schedule B
----------
(Floor Plan of Sublet Space)
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Schedule C
----------
(Subtenant Work)
(a) The Subtenant Work shall consist, generally, of the painting of
interior walls, installation of carpeting and the installation and/or removal of
certain non- load bearing or supporting interior walls ("Subtenant Work").
Subtenant will select a contractor and/or subcontractor(s) of its choice,
subject to the approval of the Master Landlord and the Sublandlord, which
consent will not be unreasonably withheld, conditioned or delayed, to perform
the Subtenant Work.
(b) Xxxxxxx Xxxxxxx of the Sublandlord agrees, without any
representation, warranty or guaranty of any kind by Master Landlord or
Sublandlord, to assist the Subtenant in the performance of the Subtenant Work by
providing onsite communication assistance between the Subtenant and the workers
performing the Subtenant Work.
(c) Within fifteen (15) days after the execution of this Sublease by
Sublandlord and Subtenant, Subtenant shall submit to Sublandlord plans and
specifications ("Plans") detailing the proposed scope and nature of the
Subtenant Work. The Plans (i) shall be subject to review and comment by
Sublandlord and Master Landlord, (ii) shall be subject to Sublandlord's and
Master Landlord's written reasonable approval, which approval shall not be
unreasonably withheld or delayed if the Plans substantially conform to the
description of Subtenant Work set forth in sub-paragraph (b) above, (iii) shall
only include such matters as Sublandlord and Subtenant may mutually agree upon;
and (iv) shall be performed in accordance with the provisions of this Sublease
and the Master Lease. The Plans shall be incorporated in this Schedule C of this
Sublease by reference and shall be deemed a part of this Sublease as though more
fully set forth in the body of this Sublease.
(d) 1. Subject to the provisions of this Sublease, Sublandlord shall
contribute an amount not to exceed Four Hundred Forty-Four Thousand ($444,000)
Dollars (the " Subtenant Fund") toward the cost (including the fees of
architects, engineers, expediters, consultants and other professionals) of the
performance of the Subtenant Work.
2. Sublandlord shall disburse a portion of the Subtenant Fund to
Subtenant from time to time, within ten (10) days after receipt of a written
request and on the date of disbursement from the Subtenant Fund, no Event of
Default shall have occurred and be continuing.
3. Sublandlord's obligation to make disbursements from the
Subtenant Fund, in each case, shall be subject to receipt of: (a) the request
set forth above for such disbursement from Subtenant signed by the President or
Vice President of Subtenant; (b) copies of all receipts, invoices and bills for
the Subtenant Work completed and materials furnished in connection with the
Subtenant Work and incorporated in the Sublet Premises which have been paid by
Subtenant or which is then due and for which Subtenant is seeking reimbursement;
(c) a certificate of the Subtenant's independent licensed architect stating: (i)
that, in his/her opinion, the portion of the Subtenant Work theretofore
completed and for which the disbursement is requested was performed in a good
and workmanlike manner in accordance with the Plans, as approved by Sublandlord
and Master Landlord;
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(ii) the percentage of completion of the Subtenant Work as of the date of such
certificate; and (iii) the estimated total cost to complete the performance of
the Subtenant Work; and (d) partial lien waivers, to the extent permitted by
law, from each contractor, subcontractor and materialman who performed work in
connection with the Subtenant Work, to the extent of the amount theretofore paid
to such contractor, subcontractor or materialman.
4. In no event shall the aggregate amount paid by Sublandlord to
Subtenant for the Subtenant Work exceed the amount of the Subtenant Fund. The
Subtenant Fund shall only be disbursed with respect to the work performed with
respect to Subtenant's initial space needs and the Plans. Upon completion of the
Subtenant Work Sublandlord shall have no further obligation or liability
whatsoever to Subtenant for further disbursement of any portion of the Subtenant
Fund to Subtenant. It is expressly understood and agreed that Subtenant shall
complete, at its sole cost and expense, the Subtenant Work, whether or not the
Subtenant Fund is sufficient to fund such completion. Any costs to complete the
Subtenant Work in excess of the Subtenant Fund shall be the sole responsibility
and obligation of Tenant. Subtenant shall not, under any circumstances, be
entitled to any refund, payment or rent abatement in the event less than the
entire Subtenant Fund is not utilized to complete the Subtenant Work.
5. Within thirty (30) days after completion of Subtenant Work,
Subtenant shall deliver to Sublandlord final waivers of lien from all
contractors, subcontractors and materialmen involved in the performance of
Subtenant Work and the materials furnished in connection therewith, and a
certificate from Subtenant's independent licensed architect certifying that (i)
in his opinion Subtenant Work have been performed in a good and workmanlike
manner and completed in accordance with the Plans for the Subtenant Work as
approved by Sublandlord, and (ii) all contractors, subcontractors and
materialmen have been paid for Subtenant Work and materials furnished through
such date.
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