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EXHIBIT 10.7
AGREEMENT OF SUBLEASE
THIS AGREEMENT OF SUBLEASE, dated as of October 1, 1999
(this "Agreement"), by and between InterWorld Corporation ("InterWorld" or
"Sublandlord"), duly organized and existing under the laws of the State of
Delaware, having its principal office at 000 Xxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx,
XX 00000, and UGO Networks, Inc. ("UGO" or "Subtenant"), duly organized and
existing under the laws of the State of Delaware, having an existing principal
office at 000 Xxxx Xxxxxx Xxxxx, Xxx Xxxx, XX 00000.
Capitalized terms used in the recitals to and within this Agreement and not
otherwise defined herein shall have the respective meanings assigned to such
terms in the Original Lease Agreement between InterWorld and the New York City
District Council of Carpenters Pension Fund dated January 12, 1997, as amended
by the First Amendment to Lease dated July 1, 1999 (collectively the Xxxxxxxxx),
and incorporated by reference herein:
W I T N E S S E T H:
WHEREAS, Sublandlord is the Tenant of certain square footage
(the "Premises") at 000 Xxxxxx Xxxxxx in the Xxxxxxxx of Manhattan, City, County
and State of New York, (the "Building") Sublandlord wishes to sublease a portion
of the Premises to Subtenant upon the terms and conditions herein after set
forth.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, the parties agree as follows:
1. Sublease.
(a) Sublandlord hereby subleases to Subtenant and
Subtenant hereby subleases from Sublandlord that portion of the 8th floor of the
Premises shown on Schedule A hereof (the "Sublet Premises"), upon the terms
hereinafter contained.
(b) Subtenant is hereby entitled to the rights of the
Sublandlord with respect to the Sublet Premises, as Tenant under the Xxxxxxxxx.
(c) Except as otherwise expressly provided herein or
to the extent inconsistent with the provisions hereof, all of the terms,
covenants, conditions and provisions of the Xxxxxxxxx are hereby incorporated
in, and made a part of, this Sublease with the same force and effect as if set
forth herein in full; and such rights and obligations as are contained in the
Xxxxxxxxx are hereby imposed upon the respective parties hereto, Sublandlord
herein being substituted for the "Landlord" under the Xxxxxxxxx and Subtenant
herein being substituted for the "Tenant" under the Xxxxxxxxx.
(d) For the purposes of this Sublease, the following
provisions of the Xxxxxxxxx are not incorporated as part of this Sublease:
Paragraphs 1.04, 1.08, 3.03 (specific
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time periods, Structure-Tone as general contractor, etc.), 3.07, 3.08, 4.01(b),
references to 1997 in 4.02, 4.07(c), 9.02(a) and (b), hook-up charge reference
in second sentence of 15.01, 31, 40.01 , and 42.
2. Duration of Term. The Term of this Agreement (the "Sublease
Term") shall commence on July 1, 1999, (the "Sublease Commencement Date") and
shall expire on December 15, 2015 (the "Sublease Expiration Date"), or such
earlier date as this Agreement may hereinafter provide.
3. Rental Provisions.
(a) Base Rent. Subtenant shall pay Base Rent to
Sublandlord, without demand or notice, as follows: Beginning on April 1, 2000
and on or before each month beginning thereafter, Subtenant shall pay to
Sublandlord the Subtenant' proportionate share (as defined in Section 3.(b)
below) of the annual basic lease payment as set forth on the attached Exhibit A
in equal monthly installments. Subtenant covenants to pay to Sublandlord in
equal monthly installments plus additional rent as provided herein. All basic
lease payments and additional rent shall be paid to Sublandlord at its office
shown above. The aforementioned date of commencement of rent is reflective of a
Partial Rent Abatement period, as defined in First Amendment to Lease, dated
July 1, 1999. Sublandlord shall duly pay each installment of basic and
additional rent under the terms of the Xxxxxxxxx and will duly observe and
perform every term and condition of the Xxxxxxxxx to the extent that such term
and condition is not provided in this Sublease to be observed or performed by
Sublandlord (and except to the extent that any failure so to pay or any failure
in such observance or performance shall have resulted, directly or indirectly,
from any default by Subtenant in its obligations to pay any amount of fixed
annual rent or additional rent hereunder).
(b) For purposes of incorporation into this Sublease,
the Xxxxxxxxx is subject to modification so that Subtenant's proportionate share
is 78.2%.
(c) Throughout the Sublease Term, Subtenant agrees to
pay Sublandlord, as additional rent, a sum equal to a proportionate share of all
amounts, if any, that become due and payable from time to time by Sublandlord to
Landlord on account of "Real Estate Taxes" and "Operating Expenses" pursuant to
Article 14 of the Xxxxxxxxx.
(d) Throughout the Sublease Term, Subtenant agrees to
pay to Sublandlord, as additional rent, a sum equal to Subtenants proportionate
share of all amounts, if any, that become due and payable from time to time by
Sublandlord to Landlord on account of any additional rents and charges payable
by Sublandlord pursuant to the Xxxxxxxxx, in addition to the Subtenants
proportionate share of amounts payable by Sublandlord pursuant to Article 15 of
the Xxxxxxxxx ("HVAC")
(e) Subtenant shall be entitled to receive from
Sublandlord a proportionate share of all credits and rebates to which
Sublandlord shall be entitled under the Xxxxxxxxx and which are attributable in
whole or in part to any period of time on or after the date hereof.
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(f) The amounts payable by Subtenant, and credits and
rebates to which Subtenant shall be entitled hereunder shall be payable to
Subtenant by Sublandlord, or credited or rebated to Subtenant, as the case may
be, at the same time and manner as Sublandlord is required to pay such charges
to Landlord or received such credits or rebates from Landlord under the
provisions of the Xxxxxxxxx.
(4) Deposit. Subtenant assumes any and all obligation for its
prorated amount of Additional Security under the terms and conditions contained
in the First Amendment to the Original Lease Agreement.
(5) Utilities Payments. Subtenant assumes any and all
obligation for its public utilities fees, monthly assessments, and/or its own
privately contracted obligations for services. The basis for such fees shall be
assessed based on the sub-metering available on the premise and therefore the
responsibility of Subtenant.
(6) Work Credit. The "Work Credit", as defined in First
Amendment to Lease, dated July 1, 1999, shall be shared by Sublandlord and
Subtenant and calculated as the proportionate rate of space to be developed and
used by each party, as contained in Exhibit A hereto. Subtenant shall pay all
costs associated with work effort required for the space leased hereunder in
excess of the Work Credit.
(7) Missed Payments. In the event that Subtenant fails to make
or causes to be made any payments as required under the foregoing provisions of
this Section after fifteen (15) days written notice, the item or installment not
so paid shall continue as an obligation of the Subtenant until the amount not so
paid has been paid in full, together with interest thereon from the date due at
the applicable interest rate stated in this Agreement at three percent (3%) per
annum over the Prime Rate. All rights shall be reserved by Sublandlord in the
collection of any such fees or Missed Payments.
(8) Payments Payable Absolutely Net. The obligation of
Subtenant to make payments provided for in this Agreement shall be absolutely
net to Sublandlord without any abatement, recoupment, diminution, reduction,
deduction, counterclaim, set-off or offset whatsoever, so that this Agreement
shall yield, net, to Sublandlord, the payments provided for herein, and all
costs, expenses and charges of any kind and nature relating to the Sublet
Premises, arising or becoming due and payable during or after the term of this
Agreement, shall be paid by Subtenant and Sublandlord shall be indemnified and
held harmless by Subtenant for, and Subtenant shall hold the Sublandlord, its
officers, directors, and employees, harmless from, any such costs, expenses and
charges (including reasonable attorney's fees).
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(9) Nature of Subtenant's Obligation Unconditional. Except as
provided in the Xxxxxxxxx to the contrary Subtenant's obligations under this
Agreement to pay rent and Additional Rent shall be absolute and, unconditional
and irrespective of any defense or any rights of set-off, recoupment or
counterclaim or deduction and without any rights of suspension, deferment,
diminution or reduction it might otherwise have against Sublandlord or any other
Person and the obligation of Subtenant shall arise whether or not Subtenant has
completed its work described in the Work Credit Documents (as such term is
defined in the Original Lease Agreement and First Amendment thereto between
InterWorld and the Original landlord). Subtenant will not suspend or discontinue
payment of any rent or Additional Rent due and payable hereunder or performance
or observance of any covenant or agreement required on the part of Subtenant
hereunder for any cause whatsoever, and Subtenant waives all rights now or
hereafter conferred by statute or otherwise to any abatement, suspension,
deferment, diminution or reduction in the Rental Payments hereunder.
(10) Assignment and Subletting. In addition to restrictions on
assignment and subleasing contained in the Xxxxxxxxx and amended Lease
Agreement, Subtenant may not assign its interest in this Agreement or sublease
the space without the prior written approval of Sublandlord. Any attempt to
assign or further sublet without such consent shall be null and void.
Notwithstanding anything set forth in the Xxxxxxxxx or herein. Subtenant may,
upon not less than fifteen (15) days' prior written notice to Landlord and
Sublandlord, but without requiring the consent of either, assign the Sublet
Premises to an entity which controls, is controlled by, or is under common
control with Subtenant (herein referred to as "related entity")
(11) Early Termination. Either party may terminate this
Agreement of Sublease under the following conditions:
(a) Specific to a certain square footage defined as
Space A on the attached Exhibit A for general purpose use by Subtenant ("Space
A"), either party may notify the other of its intention to terminate the
sublease for all of such Space A. Such written notice to the other party to be
provided no later than one year prior to such Early Termination date and shall
be effective no earlier than the third anniversary of this Agreement;
(b) Provided either party has exercised its option to
terminate this sublease as to Space A, either party may notify the other party
of its intention to terminate the sublease for all of Space B such written
notice to the other party to be provided no later than one year prior to such
Early Termination date and shall be effective no earlier than the fifth
anniversary of this Agreement;
(c) Sublandlord refunds' subject to release of space
in rentable condition, the applicable portion of the prorated Deposit under
Section 3C, subject to and proportionate to any staged release from lease
hereof;
(d) Sublandlord undertakes to pay Subtenant the
differential between the base and additional charge per rentable square foot
between Subtenant's new space and the square footage in Exhibit A for a period
of six months; and
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(e) Sublandlord releases tenant of any and all
obligations pursuant to this Agreement subsequent to such Early Termination
date, with the exception of any outstanding and due fees or rents owed, whether
to Sublandlord or any other third party, and deposit obligations.
(f) Sublandlord shall acquire from Subtenant the
unamortized leasehold improvements made to Premises. Amortization shall be
calculated based on a seven (7) year estimated useful life (straight line
monthly).
12. Insurance. In addition to any insurance requirements
assumed by the Subtenant under the Xxxxxxxxx, Subtenant shall comply with the
following:
(a) Subtenant shall carry commercial public liability
insurance in respect of the Sublet Premises and the conduct of its operations
therein, with InterWorld Corporation named as additional insured in a minimum
amount of $1,000,000 per occurrence. The insurance may be effected under overall
blanket or excess coverage policies of Subtenant or any affiliates thereof, so
long as at least $2,000,000 is effected by a comprehensive liability insurance
policy.
(b) All insurance carried by Subtenant in connection
with the Building shall name InterWorld Corporation as an additional insured
party.
(c) Subtenant shall send copies to Sublandlord of all
proofs of loss filed by Subtenant, and take all other steps necessary or
reasonably requested by Sublandlord to collect from insurers for any loss
covered by any insurance required to be obtained under this Section or under the
Original Lease Agreement or as Amended, and at the request of Sublandlord shall
cause any Subtenant personnel, contractor or other insuring party to take
similar action with respect to such party's insurance. Subtenant shall not do
any act, or permit any act to be done, whereby any insurance required by this
Section would or might be suspended or impaired.
(d) Sublandlord and Subtenant each agrees to have
included in their respective insurance policies insuring the Sublet Premises a
waiver of the insurer's right of subrogation against the other and its officers
directors, employees, and agents.
13. No Additional Waiver Implied by One Waiver. In the event
any covenant or agreement contained in this Agreement should be breached by
either party and thereafter waived by the other party, such waiver shall be
limited to the particular breach so waived and shall not be deemed to waive any
other breach hereunder. No waiver shall be binding unless it is in writing and
signed by the party making such waiver. No course of dealing between the
Sublandlord and Subtenant or any delay or omission on the part of Sublandlord in
exercising any rights hereunder or under any Work Credit Document shall operate
as a waiver.
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14. Effect of Discontinuance of Proceedings. In case any
proceeding taken by Sublandlord under this Agreement on account of any Event of
Default hereunder or thereunder shall have been discontinued or abandoned for
any reason or shall have been determined adversely to Sublandlord, then, and in
every such case, Sublandlord shall be restored to its former position and rights
hereunder and thereunder, and all rights, remedies, powers and duties of
Sublandlord shall continue as in effect prior to the commencement of such
proceedings.
15. Anything in this Sublease to the contrary notwithstanding,
any failure of Subtenant to comply with the provisions of this Sublease, other
than a failure to pay rent or other sums payable to Sublandlord hereunder, shall
not constitute a default under this Sublease, if Landlord shall consent in
writing to such non-compliance.
16. Sublandlord agrees that it will not make any modification
of the Xxxxxxxxx without Subtenant's prior written consent, where such
modification would result in an increase of any obligations or liability or
diminish the rights of Sublandlord thereunder and, correspondingly, result in an
increase of any obligations or liability, or diminish the rights, of Subtenant
hereunder.
17. Sublandlord and Subtenant covenant, warrant and represent
to the other that there were no brokers or finders instrumental in consummating
this Sublease and that no conversations or negotiations were had by Sublandlord
or Subtenant with any broker concerning the renting of the Sublet Premises to
the Subtenant. Subtenant and Sublandlord each agree to indemnify and hold the
other harmless from and against (a) any and all claims for brokerage commissions
or fees by any person or company which is based in whole or part on any dealings
or communications by Subtenant or Sublandlord with such person or company, and
(b) all expenses, including reasonable attorneys' fees and court arising out of
any such claims. The Provision of this paragraph shall survive the expiration or
termination of this Sublease.
18. No property or assets of any, member, officer, or director
of Subtenant, disclosed or undisclosed, shall be subject to levy, execution or
other enforcement procedure for the satisfaction of Sublandlord's remedies and
said parties shall have no personal liability, under or with respect to this
Sublease, the relationship of Sublandlord and Subtenant hereunder, or
Subtenant's use or occupancy of the Sublet Premises. Notwithstanding anything
contained in this Sublease to the contrary, Sublandlord shall look solely to the
estate and interest of the Subtenant in this Sublease for this satisfaction of
any right of Sublandlord, for the collection of any judgment or other judicial
process or arbitration award requiring the payment of money by Sublease in the
event of any default or breach by Sublease under the Sublease.
19. So long as this Sublease is in full force and effect,
Subtenant shall Peaceably and quietly have, hold and enjoy the Sublet Premises
subject, nevertheless, to the obligations of this Sublease and the Xxxxxxxxx,
and to superior leases and superior mortgages, if any.
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20. All references herein to InterWorld Corporation shall also
mean Sublandlord, and all references to Sublandlord shall also mean InterWorld
Corporation. All references herein to UGO Networks, Inc. shall also mean
Subtenant, and all references to Subtenant shall also mean UGO Networks, Inc.
21. Agreement to Pay Attorneys' Fees and Expenses. In the
event Subtenant should default under any of the provisions of this Agreement
beyond applicable grace periods after notice in accordance with Section 25.02 of
the Xxxxxxxxx and Sublandlord should employ attorneys or incur other expenses
for the collection of the rent or additional rent payable hereunder or the
enforcement of performance or observance of any obligation or agreement on the
part of Subtenant herein contained, Subtenant agrees that it will within (10)
days of request therefor pay to Sublandlord the reasonable fees and
disbursements of such attorneys and such other expenses so incurred.
22. Notices. Notices to Sublandlord and Subtenant shall be
valid only if sent by certified mail, return receipt requested, or by overnight
courier which provides a receipt for delivery, to the parties address on page 1
Either party may, by notice as aforesaid, designate a different address or
address for notices, statements, demand or other communications intended for
it.
23. Survival: Any obligation of Subtenant to make payments to,
for, or on behalf of Sublandlord including, but not limited to, rent, Additional
Rent and the other payments provided in Section 3 shall survive the termination
of this Agreement.
24. Definitions: As used in this Agreement, the following
terms have the following meaning:
(a) "Any"; means "any and all".
(b) "Including": means "including but not limited
to".
(c) "Work Credit": means the definition contained in
the Original Lease Agreement and First Amendment thereto to include the design,
construction, reconstruction and rehabilitation, improvement, renovation and
installation of necessary improvement to the space. The Work Credit shall be
prorated by Sublandlord and receipts shall be submitted only to Sublandlord for
reimbursement thereof.
25. Sublandlord- This agreement may not be changed orally.
This agreement is binding on Sublandlord, Subtenant, their successors and
assigns.
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IN WITNESS WHEREOF, each party has executed this agreement.
INTERWORLD CORPORATION: UGO NETWORKS, INC.:
By: __________________________ By: ____________________________
Name: __________________________ Name: ____________________________
Title: __________________________ Title: ____________________________
Date: __________________________ Date: ____________________________
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EXHIBIT A
ADDITIONAL PREMISES FIXED RENT
PERIOD BASE RENT
(BEFORE PRORATION)
Period Commencement Date Period End Date (in dollars
------------------------ --------------- per annum)
Additional Premises Commencement The day prior to the first anniversary of the 1,517,280
Date Additional Premises Commencement Date
First anniversary of the Additional The day prior to the second anniversary of the 1,562,798
Premises Commencement Date Additional Premises Commencement Date
Second anniversary of the The day prior to the third anniversary of the 1,608,317
Additional Premises Commencement Additional Premises Commencement Date
Date
Third anniversary of the Additional The day prior to the fourth anniversary of the 1,653,835
Premises Commencement Date Additional Premises Commencement Date
Fourth anniversary of the The day prior to the fifth anniversary of the 1,699,354
Additional Premises Commencement Additional Premises Commencement Date
Date
Fifth anniversary of the Additional The day prior to the sixth anniversary of the 1,846,024
Premises Commencement Date Additional Premises Commencement Date
Sixth anniversary of the Additional The day prior to the seventh anniversary of the 1,894,577
Premises Commencement Date Additional Premises Commencement Date
Seventh anniversary of the The day prior to the eighth anniversary of the 1,943,130
Additional Premises Commencement Additional Premises Commencement Date
Date
Eighth anniversary of the The day prior to the ninth anniversary of the 1,991,683
Additional Premises Commencement Additional Premises Commencement Date
Date
Ninth anniversary of the Additional The day prior to the tenth anniversary of the 2,040,236
Premises Commencement Date Additional Premises Commencement Date
Tenth anniversary of the Additional The day prior to the eleventh anniversary of the 2,240,517
Premises Commencement Date Additional Premises Commencement Date
Eleventh anniversary of the The day prior to the twelfth anniversary of the 2,293,622
Additional Premises Commencement Additional Premises Commencement Date
Date
Twelfth anniversary of the The day prior to the thirteenth anniversary of the 2,346,726
Additional Premises Commencement Additional Premises Commencement Date
Date
Thirteenth anniversary of the The day prior to the fourteenth anniversary of the 2,399,831
Additional Premises Commencement Additional Premises Commencement Date
Date
Fourteenth anniversary of the The day prior to the fifteenth anniversary of the 2,452,936
Additional Premises Commencement Additional Premises Commencement Date
Date
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Fifteenth anniversary of the Expiration Date 1,253,020*
Additional Premises Commencement
Date
1. Total Space on 8th Floor of 000 Xxxxxx Xx, Xxx Xxxx, XX 00000, leased
to InterWorld:
53,492 rentable square feet
2. SUBTENANT Allocation of total of 8th Floor:
Space A: approximately 25,057 rentable square feet
approximately 46.8% of total rentable square feet leased to
InterWorld
Space B: approximately 16,806 rentable square feet
approximately 31.4% of total rentable square feet leased to
InterWorld
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* The Additional Premises Fixed Rent for this period is for a
six (6) month period prior to the Expiration Date; if the
period prior to the Expiration Date is less than or greater
than six (6) months, the Additional Premises Fixed Rent for
this period shall be appropriately prorated.
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