AGREEMENT OF SUBLEASE
between
NMU PENSION PLAN,
Sublandlord
and
COMPUTER OUTSOURCING SERVICES, INC.,
Subtenant
Premises:
---------
Portion of the Tenth (10th) Floor
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx
PROSKAUER ROSE LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
(000) 000-0000
TABLE OF CONTENTS
1. Subleasing of Premises ................................... 1
2. Term ..................................................... 1
3. Fixed Rent and Additional Rent ........................... 2
4. Subordination to and Incorporation of the Lease .......... 6
5. Alterations .............................................. 7
6. Covenants with Respect to the Lease ...................... 7
7. Services and Repairs ..................................... 8
8. Consents ................................................. 9
9. Termination of Lease ..................................... 10
10. Sublease, Not Assignment ................................. 10
11. Damage, Destruction, Fire and other Casualty; Condemnation 11
12. No Waivers ............................................... 11
13. Notices .................................................. 11
14. Indemnity ................................................ 12
15. Broker ................................................... 13
16. Condition of the Premises ................................ 13
17. Consent of the Prime Landlord to this Sublease ........... 13
18. Assignment, Subletting and Mortgaging .................... 14
19. Partnership Subtenant .................................... 15
20. Miscellaneous ............................................ 00
Xxxxxxx "X"- Xxxxx Plan of Subleased Premises
- i -
AGREEMENT OF SUBLEASE (this "Sublease"), made as of the 21st day
of September, 1998, between NMU PENSION PLAN, an unincorporated
asociation, having an office at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 ("Sublandlord"), and COMPUTER OUTSOURCING SERVICES, INC., a New
York corporation, having an office at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000 ("Subtenant").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, by Agreement of Lease (the "Initial Lease"), dated
March, 1994, between G-H-G Realty Company (the "Prime Landlord"), as
landlord, and Sublandlord, as tenant, the Prime Landlord leased to
Sublandlord certain premises situated on the entire third (3rd) floor, a
portion of the tenth (10th) floor, and a portion of the basement level
(collectively, the "Initial Premises") as more particularly described in
the Lease and located at the building (the "Building") located at 000
Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx; and
WHEREAS, by Amendment of Lease (the "First Amendment"), dated
November 15, 1994, between Prime Landlord, as landlord, and Sublandlord,
as tenant, the Prime Landlord leased to Sublandlord certain premises
situated on an additional portion of the tenth (10th) floor (the
"Additional Tenth Floor Premises") of the Building (collectively, the
Initial Lease and the First Amendment are referred to herein as the
Lease); and
WHEREAS, Sublandlord desires to sublease to Subtenant (i) that
portion of the Initial Premises consisting of a portion of the tenth
(10th) floor of the Building, and (ii) the Additional Tenth Floor
Premises (collectively, the "Subleased Premises"), as more particularly
described on Exhibit A attached hereto and made a part hereof, and
Subtenant desires to hire the Subleased Premises from Sublandlord on the
terms and conditions contained herein.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, it is mutually agreed as follows:
1. SUBLEASING OF PREMISES. Sublandlord hereby subleases to
Subtenant, and Subtenant hereby hires from Sublandlord, the Subleased
Premises, upon and subject to the terms and conditions hereinafter set
forth.
2. TERM. The term (the "Term") of this Sublease shall commence
on October 9, 1998 (the "Commencement Date") and shall terminate on
December 31, 2009 (the "Expiration Date"), or on such earlier date upon
which the Term shall expire or be canceled or terminated pursuant to any
of the conditions or covenants of this Sublease or pursuant to law.
3. FIXED RENT AND ADDITIONAL RENT
3.1. Subtenant shall pay to Sublandlord, commencing on April 9,
1999 (the "Rent Commencement Date"), in currency which at the time of
payment is legal tender for public and private debts in the United
States of America, as fixed rent ("Fixed Rent") during the Term, three
(3) business days prior to the first (1st) day of each month during the
Term (it being agreed that since the Rent Commencement Date occurs on a
date other than the first (1st) day of a calendar month, the Fixed Rent
with respect to the month of April, 1999 shall be pro-rated on a per
diem basis)
(i) for the period commencing on the Rent Commencement Date
and ending on September 30, 1999, the sum of Ninety-Three Thousand Five
Hundred Eighty-Eight Dollars ($93,588.00) per annum, payable in equal
monthly installments of Seven Thousand Seven Hundred Ninety-Nine Dollars
($7,799.00),
(ii) for the period commencing on October 1, 1999 and
ending on September 30, 2000, the sum of Ninety-Six Thousand Four
Hundred Twenty-Four Dollars ($96,424.00) per annum, payable in equal
monthly installments of Eight Thousand Thirty-Five and 33/100 Dollars
($8,035.33),
(iii) for the period commencing on October 1, 2000 and
ending on September 30, 2001, the sum of Ninety-Nine Thousand Three
Hundred Sixteen and 72/100 Dollars ($99,316.72) per annum, payable in
equal monthly installments of Eight Thousand Two Hundred Seventy-Six and
39/100 Dollars ($8,276.39),
(iv) for the period commencing on October 1, 2001 and
ending on September 30, 2002, the sum of One Hundred Two Thousand Three
Hundred Twenty-Two and 88/100 Dollars ($102,322.88) per annum, payable
in equal monthly installments of Eight Thousand Five Hundred Twenty-Six
and 91/100 Dollars ($8,526.91),
(v) for the period commencing on October 1, 2002 and ending
on September 30, 2003, the sum of One Hundred Five Thousand Four Hundred
Forty-Two and 48/100 Dollars ($105,442.48) per annum, payable in equal
monthly installments of Eight Thousand Seven Hundred Eighty-Six and
87/100 Dollars ($8,786.87),
(vi) for the period commencing on October 1, 2003 and
ending on September 30, 2004, the sum of One Hundred Eight Thousand Six
Hundred Eighteen and 80/100 ($108,618.80) per annum, payable in equal
monthly installments of Nine Thousand Fifty-One and 57/100 Dollars
($9,051.57),
Page 2 of 17
(vii) for the period commencing on October 1, 2004 and
ending on September 30, 2005, the sum of One Hundred Eleven Thousand
Nine Hundred Eight and 56/100 Dollars ($111,908.56) per annum, payable
in equal monthly installments of Nine Thousand Three Hundred Twenty-Five
and 71/100 Dollars ($9,325.71),
(viii) for the period commencing on October 1, 2005 and
ending on September 30, 2006, the sum of One Hundred Fifteen Thousand
Three Hundred Eleven and 76/100 Dollars ($115,311.76) per annum, payable
in equal monthly installments of Nine Thousand Six Hundred Nine and
31/100 Dollars ($9,609.31),
(ix) for the period commencing on October 1, 2006 and
ending on September 30, 2007, the sum of One Hundred Eighteen Thousand
Seven Hundred Seventy-One and 68/100 Dollars ($118,771.68) per annum,
payable in equal monthly installments of Nine Thousand Eight Hundred
Ninety-Seven and 64/100 Dollars
($9,897.64),
(x) for the period commencing on October 1, 2007 and ending
on September 30, 2008, the sum of One Hundred Twenty- Two Thousand Three
Hundred Forty-Five and 04/100 Dollars ($122,345.04) per annum, payable
in equal monthly installments of Ten Thousand One Hundred Ninety-Five
and 42/100 Dollars ($10,195.42),
(xi) for the period commencing on October 1, 2008 and
ending on September 30, 2009, the sum of One Hundred Twenty- Six
Thousand Thirty-One and 84/100 Dollars ($126,031.84) per annum, payable
in equal monthly installments of Ten Thousand Five Hundred Two and
65/100 Dollars ($10,502.65), and
(xii) for the period commencing on October 1, 2009 and
ending the Expiration Date, the sum of One Hundred Twenty- Nine Thousand
Eight Hundred Thirty-Two and 08/100 Dollars ($129,832.08) per annum,
payable in equal monthly installments of Ten Thousand Eight Hundred
Nineteen and 34/100 Dollars
($10,819.34).
3.2. (i) For each Tax Year during the Term, Subtenant shall pay
to Sublandlord as and for additional rent an amount (the "Sublease Tax
Payment") equal to nineteen and one-half percent (19.5%) ("Subtenant's
Percentage") of the amount by which the additional basic rental with
respect to Taxes payable by Sublandlord for such Tax Year, as computed
by the Prime Landlord pursuant to an Escalation Statement delivered to
Sublandlord in accordance with the Lease, exceeds the additional basic
rental with respect to Taxes payable by Sublandlord for the Tax Year
commencing July 1, 1998 and ending June 30, 1999 (the "Sublease Base Tax
Year").
Page 3 of 17
(ii) At any time during or after the Term, Sublandlord
shall render to Subtenant a written statement or statements (a "Sublease
Tax Statement"), together with a reproduced copy of the Escalation
Statement received from the Prime Landlord for the current or next
succeeding Tax Year (if theretofore issued by the Prime Landlord),
showing (i) a comparison of the additional basic rental with respect to
Taxes payable by Sublandlord for the Tax Year with the additional basic
rental with respect to Taxes for the Sublease Base Tax Year and (ii) the
amount of the Sublease Tax Payment resulting from such comparison.
Subtenant shall pay to Sublandlord, in twelve (12) equal monthly
installments, in advance, five (5) business days prior to the date upon
which the corresponding payment is due and payable to the Prime Landlord
by Sublandlord, one-twelfth (1/12th) of the Sublease Tax Payment shown
on the Sublease Tax Statement, except that if at the time Sublandlord
delivers a Sublease Tax Statement to Subtenant, the Sublease Tax Payment
shall have accrued for a period prior to the delivery of the Sublease
Tax Statement, Subtenant shall pay such accrued portion of the Sublease
Tax Payment in full within fifteen (15) days after receipt of such
Sublease Tax Statement. If Sublandlord shall be required to pay any
additional basic rental with respect to Taxes on any other date or dates
than as presently required by the Lease, then the due date of the
installments of the Tax Payment shall be correspondingly accelerated or
revised so that the Sublease Tax Payment (or the applicable installment
thereof) is due five (5) days prior to the date the corresponding
payment is due to the Prime Landlord. Sublandlord's failure to render a
Sublease Tax Statement during or with respect to any Tax Year shall not
prejudice Sublandlord's right to render a Sublease Tax Statement during
or with respect to any subsequent Tax Year, and shall not eliminate or
reduce Subtenant's obligation to make Sublease Tax Payments pursuant to
this Section 3.2 for such Tax Year.
(iii) The Sublease Tax Payment shall be prorated for any
partial Tax Year in which the Term shall commence or end. If a Sublease
Tax Statement is furnished to Subtenant after the commencement of the
Tax Year in respect of which such Sublease Tax Statement is rendered,
Subtenant shall, within fifteen (15) days thereafter, pay to Sublandlord
an amount equal to the amount of any underpayment of the Sublease Tax
Payment with respect to such Tax Year and, in the event of an
overpayment, Sublandlord shall either pay to Subtenant or, at
Sublandlord's election, credit against the next installments of Fixed
Rent and payments of additional rent, the amount of Subtenant's
overpayment.
(iv) Only the Prime Landlord shall be eligible to institute
tax reduction or other proceedings to reduce the assessed valuation of
the Building. Should the Prime Landlord be successful in any such
reduction proceedings and obtain a rebate for any Tax Year for which
Subtenant has paid installments of the Tax Payment, Sublandlord shall
either pay to Subtenant, or at Sublandlord's election, credit against
the next installments of the Fixed Rent and payments of additional rent
payable under this
Page 4 of 17
Sublease, an amount equal to Subtenant's Percentage of any such rebate
for which Sublandlord shall receive a credit from the Prime Landlord. In
the event that the assessed valuation which had been utilized in
computing the Taxes payable for the Sublease Base Tax Year is reduced
(as a result of settlement, final determination or legal proceedings or
otherwise) then (x) the Taxes for the Sublease Base Tax Year shall be
retroactively adjusted to reflect such reduction, (y) the installments
of Sublease Tax Payments shall be increased accordingly, and (z) all
retroactive additional rent resulting from such adjustment shall be
payable by Subtenant within seven (7) days after the rendition of a xxxx
therefor.
3.3. If Subtenant shall fail to pay when due any installment of
Fixed Rent or additional rent, Subtenant shall pay to Sublandlord, in
addition to such installment of Fixed Rent or additional rent, as the
case may be, as a late charge and as additional rent, a sum equal to
interest at the Applicable Rate (hereinafter defined) per annum on the
amount unpaid, commencing from the date such payment was due to and
including the date of payment. The "Applicable Rate" shall be the rate
equal to the lesser of (a) two (2) percentage points above the then
current rate publicly announced by The Chase Manhattan Bank, N.A. or its
successor as its "base rate" (or such other term as may be used by The
Chase Manhattan Bank, N.A. from time to time for the rate presently
referred to as its "base rate") or (b) the maximum rate permitted by
applicable law,
3.4. All Fixed Rent, additional rent, and all other costs,
charges and sums payable by Subtenant hereunder (collectively,
"Rental"), shall constitute rent under this Sublease, and shall be
payable to Sublandlord at its address as set forth in Article 13 hereof,
unless Sublandlord shall otherwise so direct in writing.
3.5. Subtenant shall promptly pay the Rental as and when the
same shall become due and payable without set-off, offset or deduction
of any kind whatsoever, except as expressly set forth herein, and, in
the event of Subtenant's failure to pay the same when due (subject to
grace periods provided herein), Sublandlord shall have all of the rights
and remedies provided for herein or at law or in equity, in the case of
non-payment of rent.
3.6. Sublandlord's failure during the Term to prepare and
deliver any statements or bills required to be delivered to Subtenant
hereunder, or Sublandlord's failure to make a demand under this Article
3 or under any other provisions of this Sublease shall not in any way be
deemed to be a waiver of, or cause Sublandlord to forfeit or surrender
its rights to collect any additional rent which may have become due
pursuant to this Article 3 during the Term. Subtenant's liability for
Fixed Rent and additional rent due under this Article 3 accruing during
the Term, and Sublandlord's obligation to refund overpayments of or
adjustments to Fixed Rent or additional rent paid to it by Subtenant,
shall survive the expiration or sooner termination of this Sublease.
Page 5 of 17
3.7. Except as otherwise provided herein, in no event shall any
adjustment of any payments payable by Subtenant result in a decrease in
Fixed Rent, nor shall any adjustment of any item of additional rent
payable by Subtenant result in a decrease in any other item of
additional rent payable by Subtenant, it being understood and agreed
that the payment of any item of additional rent under this Article 3 is
an obligation supplemental to Subtenant's obligations to pay Fixed Rent
and any other item of additional rent.
3.8. If a Tax Year shall end after the expiration of this
Sublease, the additional rent payable by Subtenant in respect thereof
shall be prorated to correspond to that portion of such Tax Year
occurring within the Term.
4. SUBORDINATION TO AND INCORPORATION OF THE LEASE.
4.1. This Sublease is in all respects subject and subordinate to
the terms and conditions of the Lease (a true and complete copy of which
has been furnished by Sublandlord to Subtenant), and to all matters to
which the Lease is subject and subordinate. Subtenant shall indemnify
Sublandlord for, and shall hold it harmless from and against, any and
all losses, damages, penalties, liabilities, costs and expenses,
including, without limitation, reasonable attorneys' fees and
disbursements, which may be sustained or incurred by Sublandlord by
reason of Subtenant's failure to keep, observe or perform any of the
terms, provisions, covenants, conditions and obligations on
Sublandlord's part to be kept, observed or performed under the Lease to
the extent same shall have been incorporated herein, or otherwise
arising out of or with respect to Subtenant's use and occupancy of the
Subleased Premises from and after the Commencement Date.
4.2. Except as otherwise expressly provided in, or otherwise
inconsistent with, this Sublease, or to the extent not applicable to the
Subleased Premises, the terms, provisions, covenants, stipulations,
conditions, rights, obligations, remedies and agreements contained in
the Lease are incorporated in this Sublease by reference, and are made a
part hereof as if herein set forth at length, (i) except for the
references to "Landlord" in the specific sections of the Lease referred
to in Section 4.3 hereof, Sublandlord shall be substituted for all
references to the "Landlord" under the Lease to the extent that the
reference to Landlord is in its capacity as landlord under the Lease and
not in any other capacity, (ii) Subtenant shall be substituted for the
"Tenant" under the Lease, and (iii) Subleased Premises shall be
substituted for "demised premises" under the Lease, except that the
following provisions of the Lease and any references to such provisions
shall be deemed deleted therefrom and shall have no force and effect as
between Sublandlord and Subtenant:
Page 6 of 17
(i) with respect to the Initial Lease: Article 1, Article
2, Section 3.01(b), Article 21, Article 24, Section 43.09,
Article 44, Schedule A, Schedule A-1, Schedule C, and
Schedule D; and (ii) with respect to the First Amendment:
Section 2, Section 3, Section 4, Section 5, Section 6,
Section 7, Section 8, Exhibit A, Exhibit B, and Exhibit C.
4.3. The references to "Landlord" in the Initial Lease in
Article 3, Article 4, Article 5, Article 6, Article 7, Article 8,
Article 10, Article 13, Article 14, Article 16, Section 22.01, Article
25, Article 31, Article 36, Article 39, Article 40, Article 42, Article
45, shall continue to refer to the Prime Landlord. The references to
"Landlord" in Article 9, Article 11, Article 15, Article 17, Article 18,
Article 19, Article 20, Article 26, Article 27, Article 28, Article 29,
Article 30, Article 32, Article 34, and Article 35 of the Initial Lease
shall be deemed to refer collectively to the Prime Landlord and
Sublandlord.
4.4. Sublandlord represents that as of the date hereof, the
Lease is in full force and effect. Sublandlord represents that
Sublandlord has not received as of the date hereof any notice of default
from the Landlord under the Lease, and has not, to the best of its
knowledge, done or suffered or caused to be done any acts which would
result in any cancellation, forfeiture, or termination of the Lease.
Sublandlord covenants that Sublandlord's interest in the Lease is
unencumbered.
5. ALTERATIONS. Subtenant shall not make any alterations,
installations, improvements, additions or other physical changes (other
than decorative modifications) in or about the Subleased Premises
("Subtenant Alterations") without first obtaining the consent of the
Prime Landlord with respect thereto. Sublandlord agrees to cooperate
with Subtenant, at no cost to Sublandlord, in order to obtain such
consent. Any Subtenant Alterations shall be performed by Subtenant, at
Subtenant's sole cost and expense, in accordance with the applicable
provisions of the Lease.
6. COVENANTS WITH RESPECT TO THE LEASE.
6.1. Subtenant shall not do anything that would constitute a
default under the Lease or omit to do anything that Subtenant is
obligated to do under the terms of this Sublease so as to cause there to
be a default under the Lease.
6.2. The time limits set forth in the Lease for the giving of
notices, making demands, performance of any act, condition or covenant,
or the exercise of any right, remedy or option, are changed for the
purpose of this Sublease, by lengthening or shortening the same in each
instance, as appropriate, so that notices may be given, demands made, or
any act, condition or covenant performed, or any right, remedy or
Page 7 of 17
option hereunder exercised, by Sublandlord or Subtenant, as the case may
be (and each party covenants that it will do so), within three (3) days
prior to the expiration of the time limit, taking into account the
maximum grace period, if any, relating thereto contained in the Lease.
Each party shall promptly deliver to the other party copies of all
notices, requests or demands which relate to the Premises or the use or
occupancy thereof after receipt of same from the Prime Landlord.
7. SERVICES AND REPAIRS.
7.1. Notwithstanding anything to the contrary contained in this
Sublease or in the Lease, Sublandlord shall not be required to provide
any of the services that the Prime Landlord has agreed to provide,
whether or not specified in Article 21 of the Lease (or required by
law), or to furnish the electricity to the Subleased Premises that the
Prime Landlord has agreed to furnish pursuant to the Lease (or required
by law), or make any of the repairs or restorations that the Prime
Landlord has agreed to make pursuant to the Lease (or required by law),
or to comply with any laws or requirements of any governmental
authorities, or take any other action that the Prime Landlord has agreed
to provide, furnish, make, comply with, or take, or cause to be
provided, furnished, made, complied with or taken under the Lease, but
Sublandlord agrees to use all diligent efforts, at Subtenant's sole cost
and expense, to obtain the same from the Prime Landlord (provided,
however, that Sublandlord shall not be obligated to use such efforts or
take any action which might give rise to a default under the Lease), and
Subtenant shall rely upon, and look solely to, the Prime Landlord for
the provision, furnishing or making thereof or compliance therewith. If
the Prime Landlord shall default in the performance of any of its
obligations under the Lease, Sublandlord shall, upon request and at the
expense of Subtenant, timely institute and diligently prosecute any
action or proceeding which Subtenant, in its reasonable judgment, deems
meritorious, in order to have the Prime Landlord make such repairs,
furnish such electricity, provide such services or comply with any other
obligation of the Prime Landlord under the Lease or as required by law.
Subtenant shall indemnify and hold harmless Sublandlord from and against
any and all such claims arising from or in connection with such request,
action or proceeding. This indemnity and hold harmless agreement shall
include indemnity from and against any and all liability, fines, suits,
demands, costs and expenses of any kind or nature, including, without
limitation, reasonable attorneys' fees and disbursements, incurred in
connection with any such claim, action or proceeding brought thereon.
Subtenant shall not make any claim against Sublandlord for any damage
which may arise, nor shall Subtenant's obligations hereunder be
diminished, by reason of (i) the failure of the Prime Landlord to keep,
observe or perform any of its obligations pursuant to the Lease, unless
such failure is due to Sublandlord's negligence or misconduct, or (ii)
the acts or omissions of the Prime Landlord, its agents, contractors,
servants, employees, invitees or licensees. The provisions of this
Article 7 shall survive the expiration or earlier termination of the
Term hereof.
Page 8 of 17
7.2. It is expressly understood and agreed that (i) Subtenant
shall obtain electricity (in accordance with the specifications set
forth in Article 4 of the Lease, except to the extent that such
electricity may be used by Sublandlord in other portions of the premises
demised to Sublandlord under the Lease) from the Prime Landlord, and
(ii) the consumption of electricity by Subtenant in the Subleased
Premises shall be submetered. Sublandlord shall furnish to Subtenant a
written statement (an "Electricity Statement") setting forth
Sublandlord's cost of the electricity consumed by Subtenant in the
Subleased Premises. Sublandlord's failure during the Term to deliver any
Electricity Statement or Sublandlord's failure to make a demand for
payment shall not in any way be deemed to be a waiver of, or cause
Sublandlord to forfeit or surrender, its rights to collect any portion
of the amount listed on the Electricity Statement which may have become
due during the Term. Subtenant's liability for the amount due pursuant
to this Section 7.2 shall survive the expiration or sooner termination
of this Sublease.
8. CONSENTS.
8.1. Sublandlord agrees that whenever its consent or approval is
required hereunder, or where something must be done to Sublandlord's
satisfaction, it shall not unreasonably withhold or delay such consent
or approval; provided, however, that whenever the consent or approval of
the Prime Landlord, the lessor under a superior lease, or the mortgagee
under a mortgage, as the case may be, is also required pursuant to the
terms of the Lease, if the Prime Landlord, the lessor under a superior
lease, or the mortgagee under a mortgage shall withhold its consent or
approval for any reason whatsoever, Sublandlord shall not be deemed to
be acting unreasonably if it shall also withhold its consent or
approval. If the Prime Landlord shall withhold its consent or approval
in connection with this Sublease or the Subleased Premises in any
instance where, under the Lease, the consent or approval of the Prime
Landlord may not be unreasonably withheld, Sublandlord, upon the request
and at the expense of Subtenant, shall either (i) timely institute and
diligently prosecute any action or proceeding which Subtenant, in its
reasonable judgment, deems meritorious, in order to dispute such action
by the Prime Landlord, or (ii) permit Subtenant, to the extent allowable
under the Lease, to institute and prosecute such action or proceeding in
the name of the Prime Landlord, provided that Subtenant shall keep
Sublandlord informed of its actions and shall not take any action which
might give rise to a default under the Lease.
Page 9 of 17
8.2. If Subtenant shall request Sublandlord's consent and
Sublandlord has agreed, under the terms of this Sublease, that neither
its consent nor its approval shall be unreasonably withheld, and
Sublandlord shall fail or refuse to give such consent or approval, and
Subtenant shall dispute the reasonableness of Sublandlord's refusal to
give its consent or approval, Tenant may, at its option, as its sole and
exclusive remedy, submit such dispute to arbitration in the City of New
York under the Expedited Procedures provisions of the Commercial
Arbitration Rules of the American Arbitration Association ("AAA")
(presently Rules 53 through 57 and, to the extent applicable, Section
19); provided, however, that with respect to any such arbitration, (i)
the list of arbitrators referred to in Rule 54 shall be returned within
five (5) days from the date of mailing; (ii) the parties shall notify
the AAA by telephone, within four (4) days of any objections to the
arbitrator appointed and will have no right to object if the arbitrator
so appointed was on the list submitted by the AAA and was not objected
to in accordance with the second paragraph of Rule 54; (iii) the Notice
of Hearing referred to in Rule 55 shall be shall be four (4) days in
advance of the hearing; (iv) the hearing shall be held within seven (7)
days after the appointment of the arbitrator; (v) the arbitrator shall
have no right to award damages; (vi) the decision and award of the
arbitrator shall be final and conclusive on the parties; and (vii) the
losing party shall pay the reasonable fees and expenses, if any, of both
parties in connection with such arbitration, including the expenses and
fees of the arbitrator selected.
9. TERMINATION OF LEASE. If the lease is terminated by the Prime
Landlord pursuant to the terms thereof with respect to all or any
portion of the Subleased Premises prior to the Expiration Date for any
reason whatsoever, including, without limitation, by reason of casualty
or condemnation, this Sublease shall thereupon terminate with respect to
any corresponding portion of the Subleased Premises, and (unless such
termination of the Lease shall be as a result of Sublandlord's default
thereunder or a voluntary surrender of the Subleased Premises, other
than a surrender of the Subleased Premises permitted under the Lease
with respect to a termination of the Lease by reason of casualty to or
condemnation of the Subleased Premises or the Building) Sublandlord
shall not be liable to Subtenant by reason thereof. In the event of such
termination, Sublandlord shall return to Subtenant that portion of the
Rental paid in advance by Subtenant with respect to such portion of the
Subleased Premises, if any, prorated as of the date of such termination.
10. SUBLEASE, NOT ASSIGNMENT. Notwithstanding anything contained
herein, this Sublease shall be deemed to be a sublease of the Subleased
Premises and not an assignment, in whole or in part, of Sublandlord's
interest in the Lease.
Page 10 of 17
11. DAMAGE, DESTRUCTION, FIRE AND OTHER CASUALTY: CONDEMNATION.
Notwithstanding any contrary provision of this Sublease or the
provisions of the Lease herein incorporated by reference, Subtenant
shall not have the right to terminate this Sublease as to all or any
part of the Subleased Premises, or be entitled to an abatement of Rent,
additional rent or any other item of Rental, by reason of a casualty or
condemnation affecting the Subleased Premises unless Sublandlord is
entitled to terminate the Lease or is entitled to a corresponding
abatement with respect to its corresponding obligation under the Lease.
If Sublandlord is entitled to terminate the Lease for all or any portion
of the Subleased Premises by reason of casualty or condemnation,
Subtenant may terminate this Sublease as to any corresponding part of
the Subleased Premises by written notice to Sublandlord given at least
five (5) business days prior to the date(s) Sublandlord is required to
give notice to the Prime Landlord of such termination under the terms of
the Lease.
12. NO WAIVERS. Failure by Sublandlord in any instance to insist
upon the strict performance of any one or more of the obligations of
Subtenant under this Sublease, or to exercise any election herein
contained, shall in no manner be or be deemed to be a waiver by
Sublandlord of any of Subtenant's defaults or breaches hereunder or of
any of Sublandlord's rights and remedies by reason of such defaults or
breaches, or a waiver or relinquishment for the future of the
requirement of strict performance of any and all of Subtenant's
obligations hereunder. Further, no payment by Subtenant or receipt by
Sublandlord of a lesser amount than the correct amount or manner of
payment of Rental due hereunder shall be deemed to be other than a
payment on account, nor shall any endorsement or statement on any check
or any letter accompanying any check or payment be deemed to effect or
evidence an accord and satisfaction, and Sublandlord may accept any
checks or payments as made without prejudice to Sublandlord's right to
recover the balance or pursue any other remedy in this Sublease or
otherwise provided at law or equity.
13. NOTICES. Any notice, statement, demand, consent, approval,
advice or other communication required or permitted to be given,
rendered or made by either party to the other, pursuant to this Sublease
or pursuant to any applicable law or requirement of public authority
(collectively, "Communications") shall be in writing and shall be deemed
to have been properly given, rendered or made only if sent by personal
delivery, receipted by the party to whom addressed, or registered or
certified mail, return receipt requested, posted in a United States post
office station in the continental United States, addressed (i) to
Subtenant at its address first above written, Attention: Chief Operating
Officer, with a copy to Xxxxxxx Berlin Shereff Xxxxxxxx, LLP, 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx X. Xxxxxxx, Esq.,
and (ii) to Sublandlord at its address first above written, Attention:
Chief Operating Officer, with a copy to Proskauer Rose LLP, 0000
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx X. Xxxxxxxxxxx,
Esq. All such communications shall be deemed to
Page 11 of 17
have been given, rendered or made when delivered and receipted by the
party to whom addressed, in the case of personal delivery, or three (3)
days after the day so mailed. Either party may, by notice as aforesaid
actually received, designate a different address or addresses for
communications intended for it.
14. INDEMNITY.
14.1. Subtenant shall not do or permit any act or thing to be
done upon the Subleased Premises which may subject Sublandlord to any
liability or responsibility for injury, dam ages to persons or property
or to any liability by reason of any violation of any requirement of
law, and shall exercise such control over the Subleased Premises as to
fully protect Subl andlord against any such liability. Subtenant shall
indemnify and save harmless Sublandlord, the Parties (hereinafter
defined) and the employees, agents and contractors of any of the
foregoing (collectively, the "Indemnitees") from and against (except if
due to the negligence, wilful act or omission of Sublandlord or the
Parties), (a) all claims of whatever nature against the Indemnitees
arising from any act, omission or negligence of Sub tenant, its
contractors, licensees, agents, servants, employees, invitees or
visitors, (b) all claims against the Indemnitees arising from any
accident, injury or damage whatsoever caused to any person or to the
property of any person and occurring during the Term in or about the
Subleased Premises, and (c) all claims against the Indemnitees arising
from any accident, injury or damage occurring outside of the Subleased
Premises but anywhere within or about the Real Property, where such
accident, injury or damage results or is claimed to have resulted from
an act, omission or negligence of Subtenant or Subtenant's contractors,
licensees, agents, servants, employees, invitees or visitors. This
indemnity and hold harmless agreement shall include indemnity from and
against any and all liability, fines, suits, demands, costs and expenses
of any kind or nature (including, without limitation, attorneys' fees
and disbursements) incurred in or in connection with any such claim or
proceeding brought thereon, and the defense thereof.
14.2. If any claim, action or proceeding is made or brought
against Sublandlord, which claim, action or proceeding Subtenant shall
be obligated to indemnify Sublandlord against pursuant to the terms of
this Lease, then, upon demand by the Sublandlord, Subtenant, at its sole
cost and expense, shall resist or defend such claim, action or
proceeding in the Sublandlord's name, if necessary, by such attorneys as
Sublandlord shall approve, which approval shall not be unreasonably
withheld or unduly delayed. Attorneys for Subtenant's insurer are hereby
deemed approved for purposes of this Section 14.2. Notwithstanding the
foregoing, Sublandlord may retain its own attorneys to defend or assist
in defending any claim, action or proceeding involving potential
liability of Five Million Dollars ($5,000,000) or more, and Subtenant
shall pay the reasonable fees and disbursements of such attorneys. The
provisions of this Section 14 shall survive the expiration or earlier
termination of the Term hereof.
Page 12 of 17
15. BROKER. Each party hereto covenants, warrants and represents
to the other party that it has had no dealings, conversations or
negotiations with any broker other than X.X. Xxxxx Leasing, Inc.
("Broker") concerning the execution and delivery of this Sublease. Each
party hereto agrees to indemnify and hold harmless the other party
against and from any claims for any brokerage commissions and all costs,
expenses and liabilities in connection therewith, including, without
limitation, reasonable attorneys' fees and disbursements, arising out of
its respective representations and warranties contained in this Article
15 being untrue. Sublandlord shall pay any brokerage commissions due to
Broker pursuant to a separate agreement between Sublandlord and Broker.
The provisions of this Article 15 shall survive the expiration or
earlier termination of the Term hereof.
16. CONDITION OF THE PREMISES. Subtenant agrees to accept the
Subleased Premises in its "as is" condition on the date hereof,
reasonable wear and tear between the date hereof and the Commencement
Date excepted. Sublandlord has not made and does not make any
representations or warranties as to the physical condition of the
Subleased Premises, the use to which the Subleased Premises may be put,
or any other matter or thing affecting or relating to the Subleased
Premises, except as specifically set forth in this Sublease. Sublandlord
shall have no obligations whatsoever to alter, improve, decorate or
otherwise prepare the Subleased Premises for Subtenant's occupancy.
17. CONSENT OF THE PRIME LANDLORD TO THIS SUBLEASE. Consent of
the Prime Landlord to this Sublease Consent of the Prime Landlord to
this Sublease. Subtenant hereby acknowledges and agrees that this
Sublease is subject to and conditioned upon Sublandlord obtaining the
written consent (the "Consent") of the Prime Landlord as provided in the
Lease. Promptly following the execution and delivery hereof, Sublandlord
shall submit this Sublease to the Prime Landlord. Subtenant hereby
agrees that it shall cooperate in good faith with Sublandlord and shall
comply with any reasonable requests made of Subtenant by Sublandlord or
the Prime Landlord in the procurement of the Consent. In no event shall
Sublandlord or Subtenant be obligated to make any payment to the Prime
Landlord in order to obtain the Consent or the consent to any provision
hereof, other than as expressly set forth in the Lease. In the event
that the Prime Landlord shall not have executed and delivered the
Consent within forty-five (45) days after the date of this Sublease,
either party shall have the right to cancel this Sublease by written
notice given to the other at any time thereafter prior to the execution
and delivery of the Consent, and with the giving of such notice this
Sublease shall be deemed canceled and of no further force or effect and
neither party shall have any liability or obligation to the other in
respect thereof.
Page 13 of 17
18. ASSIGNMENT, SUBLETTING AND MORTGAGING.
18.1. Subtenant shall not assign, sell, transfer (whether by
operation or law or otherwise), pledge, mortgage or otherwise encumber
this Sublease or any portion of its interest in the Subleased Premises,
nor sublet all or any portion of the Subleased Premises or permit any
other person or entity to use or occupy all or any portion of the
Subleased Premises, without the prior written consent of the Prime
Landlord. Provided that Subtenant shall comply with the provisions of
the Lease (including, without limitation, Section 11 thereof) and this
Sublease with respect to subletting, Sublandlord agrees that its consent
shall not be required to a subletting of all or any portion of the
Subleased Premises provided that the Prime Landlord shall consent to
such subletting. Upon the request of Subtenant, Sublandlord, at
Subtenant's sole cost and expense, shall request the consent of the
Prime Landlord and cooperate with Subtenant in obtaining any consent.
18.2. If this Sublease be assigned, or if the Subleased Premises
or any part thereof be sublet (whether or not Sublandlord and the Prime
Landlord shall have consented thereto), Sublandlord, after default by
Subtenant in its obligations hereunder, may collect rent from the
assignee or subtenant and apply the net amount collected to the Rental
herein reserved, but no such assignment or subletting shall be deemed a
waiver of the covenant set forth in this Article 18, or the acceptance
of the assignee or subtenant as a tenant, or a release of Subtenant from
the further performance and observance by Subtenant of the covenants,
obligations and agreements on the part of Subtenant to be performed or
observed herein. The consent by Sublandlord or the Prime Landlord to an
assignment, sale, pledge, transfer, mortgage or subletting shall not in
any way be construed to relieve Subtenant from obtaining the express
consent in writing, to the extent required by this Sublease or the
Lease, of Sublandlord and the Prime Landlord to any further assignment,
sale, pledge, transfer, mortgage or subletting.
18.3. Either a transfer (including the issuance of treasury
stock or the creation and issuance of new stock) of a controlling
interest in the shares of Subtenant (if Subtenant is a corporation,
other than a professional corporation, or trust) or a transfer of a
majority of the total interest in Subtenant (if Subtenant is a
partnership, including a limited liability partnership, or a limited
liability company) at any one time or over a period of time through a
series of transfers, shall be deemed an assignment of this Sublease and
shall be subject to all of the provisions of this Sublease, including,
without limitation, the requirements that Subtenant obtain Sublandlord's
prior consent thereto. The transfer of shares of Subtenant (if Subtenant
is a corporation or trust) for purposes of this Section 18.3 shall not
include the sale of shares by persons other than those deemed "insiders"
within the meaning of the Securities Exchange Act of 1934, as amended,
which sale is effected through the "over-the-counter market" or through
any recognized stock exchange.
Page 14 of 17
19. PARTNERSHIP SUBTENANT. If Subtenant is a partnership
(including, without limitation, a limited liability partnership) or a
limited liability company or a professional corporation (or is comprised
of two (2) or more Persons, individually or as co-partners of a
partnership (including, without limitation a limited liability
partnership), as members of a limited liability company or as
shareholders of a professional corporation) or if Subtenant's interest
in this Lease shall be assigned to a partnership (including, without
limitation, a limited liability partnership) a limited liability company
or a professional corporation (or to two (2) or more Persons,
individually or as co-partners of a partnership, as members of a limited
liability company or shareholders of a professional corporation)
pursuant to this Sublease (any such partnership, professional
corporation and such Persons are referred to in this Article 19 as
"Partnership Subtenant"), the following provisions shall apply to such
Partnership Subtenant: (a) the liability of each of the parties
comprising Partnership Subtenant shall be joint and several; (b) each of
the parties comprising Partnership Subtenant hereby consents in advance
to, and agrees to be bound by (x) any written instrument which may
hereafter be executed by Partnership Subtenant or any successor entity,
changing, modifying, extending or discharging this Lease, in whole or in
part, or surrendering all or any part of the Subleased Premises to
Sublandlord, and (y) any notices, demands, requests or other
communications which may hereafter be given by Partnership Subtenant or
by any of the parties comprising Partnership Subtenant; (c) any bills,
state ments, notices, demands, requests or other communications given or
rendered to Partnership Subtenant or to any of such parties shall be
binding upon Partnership Subtenant and all such parties; (d) if
Partnership Subtenant shall admit new partners, shareholders or members,
as the case may be, Partnership Subtenant shall give Sublandlord notice
of such event not later than ten (10) Business Days prior to the
admission of such partner(s), shareholder(s) or member(s) together with
an assumption agreement in form and substance satisfactory to
Sublandlord pursuant to which each of such new partners, shareholders or
members, as the case may be, shall, by their admission to Partnership
Subtenant, agree to assume joint and several liability for the
performance of all of the terms, covenants and conditions of this Lease
(as the same may have been or thereafter be amended) on Subtenant's part
to be observed and performed; it being expressly understood and agreed
that each such new partner, shareholder or member (as the case may be)
shall be deemed to have assumed joint and several liability for the
performance of all of the terms, covenants and conditions of this Lease
(as the same may have been or thereafter be amended), whether or not
such new partner, shareholder or member shall have executed such
assumption agreement, and that neither Subtenant's failure to deliver
such assumption agreement nor the failure of any such new partner or
shareholder, as the case may be, to execute or deliver any such
agreement to Sublandlord shall vitiate the provisions of this clause (d)
of this Article 19).
Page 15 of 17
20. MISCELLANEOUS.
20.1. This Sublease contains the entire agreement between the
parties and all prior negotiations and agreements are merged in this
Sublease. Any agreement hereafter made shall be ineffective to change,
modify or discharge this Sublease in whole or in part unless such
agreement is in writing and signed by the parties hereto. No provision
of this Sublease shall be deemed to have been waived by Sublandlord or
Subtenant unless such waiver be in writing and signed by Sublandlord or
Subtenant, as the case may be. The covenants and agreements contained in
this Sublease shall bind and inure to the benefit of Sublandlord and
Subtenant and their respective permitted successors and assigns.
20.2. In the event that any provision of this Sublease shall be
held to be invalid or unenforceable in any respect, the validity,
legality or enforceability of the remaining provisions of this Sublease
shall be unaffected thereby.
20.3. The paragraph headings appearing herein are for purposes
of convenience only and are not deemed to be a part of this Sublease.
20.4. Capitalized terms used herein shall have the same meanings
as are ascribed to them in the Lease, unless otherwise expressly defined
herein.
20.5. This Sublease is offered to Subtenant for signa ture with
the express understanding and agreement that this Sublease shall not be
binding upon Sublandlord unless and until Sublandlord shall have
executed and delivered a fully executed copy of this Sublease to
Subtenant.
20.6. Neither the partners comprising Sublandlord (if
Sublandlord is a partnership), nor the shareholders, partners, directors
or officers of Sublandlord or any of the foregoing (collectively, the
"Parties") shall be liable for the performance of Sublandlord's
obligations under this Sublease. Subtenant shall look solely to
Sublandlord to enforce Sublandlord's obligations hereunder and shall not
seek damages against any of the Parties. Subtenant shall look only to
the assets of Sublandlord for the satisfaction of Subtenant's remedies
for the collection of a judgment (or other judicial process) requiring
the payment of money by Sublandlord in the event of any default by
Sublandlord hereunder, and no property or assets of the Parties shall be
subject to levy, execution or other enforcement procedure for the
satisfaction of Subtenant's remedies under or with respect to this
Sublease, the relationship of Sublandlord and Subtenant hereunder or
Subtenant's use or occupancy of the Subleased Premises.
20.7. This Sublease shall be governed by and construed in
accordance with the laws of the State of New York.
Page 16 of 17
IN WITNESS WHEREOF, the parties hereto have duly executed this
Sublease as of the day and year first above written.
NMU PENSION PLAN, Sublandlord
By: /S/
--------------------------------
Name: XX XXXXXX
Title: ADMINISTRATOR
COMPUTER OUTSOURCING SERVICES, INC.,
Subtenant
By: /S/
--------------------------------
Name: XXXX XXXXXXXX
Title: CHAIRMAN/CEO
EXHIBIT "A"
-----------
FLOOR PLAN OF SUBLEASED PREMISES
This floor plan is annexed to and made a part of this Agreement of
Sublease solely to indicate the Subleased Premises by outlining and
diagonal marking. All areas, conditions, dimensions and locations are
approximate.
