New Jersey-Wayne-65 Willowbrook Boulevard Sublease - PaineWebber Inc. and Audible Words Inc.
---------------------------
SUBLEASE
---------------------------
PAINEWEBBER INCORPORATED,
Sublessor
to
AUDIBLE WORDS, INC.,
Sublessee
Premises:
A portion of the Third (3rd) Floor,
65 Willowbrook Boulevard
Wayne, New Jersey
dated as of
July 19, 1996
<PAGE>
SCHEDULE 1 TO SUBLEASE
DEFINED TERMS
For purposes of this Sublease, the following terms shall have the following
meanings:
EXECUTION DATE: July 19, 1996.
SUBLESSOR: PaineWebber Incorporated.
SUBLESSEE: Audible Words, Inc.
LESSOR: Hartz Mountain Industries, Inc.
SUBLESSOR'S ADDRESS
FOR RENT: PaineWebber Incorporated
1000 Harbor Boulevard - 5th Floor
Weehawken, NJ 07087
Attn.: Real Estate Finance
SUBLESSOR'S ADDRESS
FOR NOTICES: PaineWebber Incorporated
1000 Harbor Boulevard - 5th Floor
Weehawken, NJ 07087
Attn.: Real Estate Finance
With a copy of all default notices to:
PaineWebber Incorporated
1200 Harbor Boulevard - 10th Floor
Weehawken, NJ 07087
Attn.: Managing Attorney - Real Estate
MASTER LEASE: Lease, dated March 31, 1993, between
Lessor, as landlord, and Sublessor, as tenant.
BUILDING: The Building (as defined in the Master Lease),
and commonly known as 65 Willowbrook
Boulevard, Wayne, New Jersey.
MASTER PREMISES: The Demised Premises (as defined in the Master
Lease), consisting of approximately 7,947
square feet of net rentable area on the third
(3rd) floor of the Building.
-2-
<PAGE>
PREMISES: The Master Premises, consisting of
approximately 7,947 square feet of net
rentable area on the third (3rd) floor of the
Building and more particularly described on
the floor plan attached hereto as Exhibit B.
COMMENCEMENT DATE: The later to occur of (a) the date that
Sublessor receives the consent of Lessor under
Section 16 of this Sublease and (b) July 19,
1996.
EXPIRATION DATE: February 27, 2003.
FIXED RENT: (a) Eighty Seven Thousand Four Hundred
Seventeen and 00/100 Dollars ($87,417.00) per
annum, payable in equal monthly installments
of Seven Thousand Two Hundred Eighty Four and
75/100 ($7,284.75), in advance, on the first
calendar day of each calendar month during the
period commencing on the Commencement Date and
continuing through the day before the third
(3rd) anniversary of the Commencement Date;
and
(b) One Hundred Eleven Thousand Two Hundred
Fifty Eight and 00/100 ($111,258.00) per
annum, payable in equal monthly installments
of Nine Thousand Two Hundred Seventy One and
50/100 ($9,271.50), in advance, on the first
calendar day of each month during the period
commencing on the third (3rd) anniversary of
the Commencement Date and continuing through
the Expiration Date.
SECURITY DEPOSIT: Zero and 00/100 Dollars ($0.00).
FIRST MONTH'S RENT: Seven Thousand Two Hundred Eighty Four and
75/100 ($7,284.75).
SUBLESSEE'S PRO
RATA SHARE: One Hundred Percent (100%).
-3-
<PAGE>
SUBLESSOR'S BROKER: The Garibaldi Group.
SUBLESSEE'S BROKER: Newmark Partners, Inc.
EXCLUDED PROVISIONS: 1.01(C), (E), (J), (L), CM), (N), (P) (S),
(Z), (DD), (EE), and (NN); 2.01; 3.01; the
first sentence of 3.02; 5.01; the second
sentence of 11.01; 33.01; 34; R2; R3; R4; R8;
and Exhibit "C" (Workletter).
SUBLEASE
This SUBLEASE is dated as of the Execution Date (as defined in Schedule 1
to this Sublease) between Sublessor (as defined in Schedule I to this Sublease)
and Sublessee (as defined in Schedule 1 to this Sublease)
1. MASTER LEASE
------------
1.1. Sublessor is the tenant under the Master Lease (as defined in Schedule
1 to this Sublease) wherein Lessor (as defined in Schedule 1 to this Sublease)
leased to Sublessor the Master Premises (as defined in Schedule 1 to this
Sublease) of the Building (as defined in Schedule 1 to this Sublease).
A copy of the Master Lease is attached hereto as Exhibit "A".
-----------
2. PREMISES
--------
2.1 Sublessor hereby subleases to Sublessee, and Sublessee hereby takes
and hires from Sublessor, on the terms and conditions set forth in this
Sublease, the Premises (as defined in Schedule 1 to this Sublease).
2.2 From and after the receipt of the consent of Lessor, as required by
the terms of this Sublease, all personal property then existing in the Premises
shall be and become the property of Sublessee. At such time, upon the request of
Sublessee, Sublessor will execute and deliver to Sublessee a bill of sale. It is
acknowledged by the parties hereto that no portion of the consideration for this
Sublease is allocable to said personal property.
Sublessee acknowledges that such personal property is being taken "as is",
"where is", and "with all faults" as of the date hereof without any
representation or warranty whatsoever as to its
-4-
<PAGE>
condition, fitness for any particular purpose, merchantability or any other
warranty, express or implied. Sublessor has only limited knowledge of the
condition of the personal property. Sublessee is hereby acquiring such personal
property based solely upon Sublessee's own independent investigations and
inspections of such personal property and not in reliance on any information
provided by Sublessor or any of its agents or contractors. Sublessor has made no
agreement to alter, repair or improve any of such personal property. Sublessor
specifically disclaims any warranty, guaranty or representation, oral or
written, past or present, express or implied, concerning such personal property.
3. SUBLESSOR'S REPRESENTATIONS AND WARRANTIES
------------------------------------------
3.1 Sublessor represents and warrants to Sublessee that the following are
true and correct as of the date hereof:
(i) except as indicated herein, the Master Lease is unmodified and in
full force and effect, and Sublessor's leasehold estate with respect to the
Premises has not been assigned, mortgaged, pledged, encumbered, or
otherwise transferred or sublet, in whole or in part;
(ii) the Master Lease evidences the entire written agreement with
respect to the Premises between Sublessor and Lessor;
(iii) all rent and additional rent billed to date and payable by
Sublessor, as "Tenant" under the Master Lease, has been paid, and
Sublessor, as "Tenant" under the Master Lease, will continue to make all
payments as they become due and payable under the Master Lease, provided
Sublessee is not in default hereunder;
(iv) Sublessor has received no written notice from Lessor of default
by Sublessor under the Master Lease which remains uncured; and
(v) Sublessor, to the best of Sublessor's knowledge, is not in default
under the Master Lease.
The aforesaid representations and warranties shall be deemed repeated at and as
of the Commencement Date (as defined in Schedule 1 to this Sublease) except to
the extent that Sublessor has notified Sublessee in writing that any such
representation or warranty is no longer true and correct, specifying in said
notice in reasonable detail the reason said representation or warranty is no
longer true and correct,
-5-
<PAGE>
and, if such incorrect representation or warranty is material and adverse to
Sublessee, in Sublessee's reasonable discretion, Sublessee shall have the right
to terminate this Sublease by giving notice to Sublessor to such effect at any
time within five (5) days following the Commencement Date. Time shall be of the
essence with respect to the obligations of Sublessee hereunder.
4. TERM
----
4.1 The Term of this Sublease shall, subject to the last sentence of this
Paragraph, commence on the Commencement Date and shall continue, unless
otherwise sooner terminated in accordance with provisions of this Sublease or at
law, until the Expiration Date (as defined in Schedule 1 to this Sublease). If
for any reason outside of Sublessor's reasonable control Sublessor does not
deliver possession of the Premises ("Possession") to Sublessee on the
----------
Commencement Date, Sublessor shall not be subject to any liability for such
failure and the validity of this Sublease shall not be impaired, but rent shall
abate until delivery of Possession.
5. RENT
----
5.1 Rent. Sublessee shall pay Fixed Rent (as defined in Schedule 1 to this
----
Sublease) to Sublessor without deduction, abatement, setoff, notice, or demand,
at Sublessor's Address for Rent (as defined in Schedule 1 to this Sublease) or
at such other place as Sublessor shall designate from time to time by notice to
Sublessee, in lawful money of the United States of America.
Sublessee shall pay to Sublessor, as rent for the first month of the Term,
upon the execution of this Sublease, the First Month's Rent (as defined in
Schedule 1 to this Sublease) in respect of the Fixed Rent. If the Term begins or
ends on a day other than the first or last day of a month, the rent for the
partial months shall be prorated on a per diem basis.
5.2 In addition to Fixed Rent and any other sums which Sublessee may be
obligated to pay pursuant to any other provision of this Sublease, Sublessee
shall pay to Sublessor as additional rent hereunder (i) Sublessee's pro--rata
share of the increase payable by Sublessor in the Tenant's Fraction of the Real
Estate Taxes and Tenant's Fraction of the Operating Expenses (as such terms are
defined in Sections 6.01 and 6.02, respectively, of the Master Lease) pursuant
to Section 6 of the Master Lease over the Tenant's Fraction of the Real Estate
Taxes and Tenant's Fraction of the Operating Expenses for the 1996 Calendar Year
(as defined in the Master Lease) and (ii) Tenant Surcharges (as hereinafter
defined). For purposes of
-6-
<PAGE>
this Sublease, the amounts payable by Sublessee pursuant to subsections (i) and
(ii) above are hereinafter referred to as "Additional Rent". For purposes of
----------------
this Sublease, "Subleasee's pro rata share" shall mean the amount set forth in
Schedule 1 to this Sublease, which represents the percentage obtained by
dividing the rentable area of the Premises by the rentable area currently
included in the definition of Master Premises. If the rentable area of the
Master Premises increases or decreases (as the case may be), Sublessee's pro
rata share shall be adjusted effective as of the effective date of change in the
size of the Master Premises.
5.3 Notwithstanding anything to the contrary contained herein, provided
Sublessee shall not have defaulted under any of the terms and conditions of this
Sublease, the Fixed Rent payable by Sublessee as set forth in Paragraph 5.1
above shall be abated during the period commencing on the Commencement Date and
continuing through the date that is fifteen (15) days after the Commencement
Date. Nothing contained in this Paragraph 5.3 shall reduce or otherwise abate
any Additional Rent, Tenant Surcharges, or other rent payable by Tenant
hereunder during such period.
6. SECURITY DEPOSIT.
----------------
6.1 Upon execution of this Sublease, Sublessee shall deposit with
Sublessor an amount in cash equal to the Security Deposit (as defined in
Schedule 1 to this Sublease) as partial consideration for this Sublease and as
security for the faithful performance and observance by Sublessee of the terms,
provisions, covenants and conditions of this Sublease. It is agreed that in the
event Sublessee defaults beyond any applicable notice and grace period provided
herein for the cure thereof in respect of any of the terms, provisions,
covenants and conditions of this Sublease, including, but not limited to, the
payment of Fixed Rent and Additional Rent, Sublessor may, upon written notice to
Sublessee, use, apply or retain the whole or any part of the security so
deposited to the extent required for the payment of any Fixed Rent and
Additional Rent or any other sum as to which Sublessee is in default or for any
sum which Sublessor may expend or may be required to expend by reason of
Sublessee's default in respect of any of the terms, provisions, covenants and
conditions of this Sublease, including, but not limited to, any damages or
deficiency accrued before or after summary proceedings or other re-entry by
Sublessor. In the event that Sublessee shall fully and faithfully comply with
all of the terms, provisions, covenants and conditions of this Sublease, the
security shall be returned to Sublessee after the Expiration Date and after
delivery of entire possession of the Premises to Sublessor. In the event of an
assignment of Sublessor's interest in the Master Lease, Sublessor shall have the
right to transfer the security to the
-7-
<PAGE>
assignee and, provided such assignee acknowledges, in writing, receipt of and
liability to Sublessee for such security, Sublessor shall thereupon be released
by Sublessee from all liability for the return of such security; and Sublessee
agrees to look solely to such assignee for the return of said security; and it
is agreed that the provisions hereof shall apply to every assignment made of the
security to any such assignee. Sublessor further covenants that it will not
assign or encumber or attempt to assign or encumber the moneys deposited herein
as security and that neither Sublessor nor its successors or assigns shall be
bound by any such assignment, encumbrance, attempted assignment or attempted
encumbrance. In the event Sublessor applies or retains any portion or all of the
security deposited, Sublessee shall forthwith restore the amount so applied or
retained so that at all times the amount deposited shall be the amount set forth
above.
7. ELECTRICITY.
-----------
7.1 Sublessor shall not furnish electricity to the Premises. Sublessee
shall diligently obtain electric energy directly from the public utility
furnishing electric service to the Building. The costs for such service shall be
paid by Sublessee directly to such public utility. Such electricity may be
furnished to Sublessee by means of the existing electrical facilities serving
the Premises to the extent the same are available, suitable and safe for such
purposes as determined by Sublessor. All meters and all additional panel boards,
feeders, risers, wiring and other conductors and equipment which may be required
to obtain electricity and which are in addition to that which exists in the
Premises on the Commencement Date shall be installed and, at the expiration or
sooner termination of this Sublease, removed by Sublessee at Sublessee's sole
cost and expense. Sublessor shall not in anywise be liable or responsible to
Sublessee for any loss or damage or expense which Sublessee may sustain or incur
if either the quantity or character of electric service is changed or is no
longer available or suitable for Sublessee's requirements except for actual
damages suffered by Sublessee by reason of any such failure, inadequacy or
defect caused by the negligence or wilful misconduct of Sublessor.
7.2 Sublessee covenants and agrees that at all times its use of electric
current shall not exceed the capacity of the then existing feeders to the
Building or the risers or wiring installation. Sublessee shall not make or
perform, or permit the making or performing of, any alterations to wiring
installations or other electrical facilities in-or serving the Premises (any
such work, "Electrical Work"), other than that required for Sublessee' s initial
---------------
occupancy of the Premises, without the prior written consent of
-8-
<PAGE>
Sublessor in each instance. In the event that Lessor does not consent to such
Electrical Work, Sublessor may arbitrarily and unreasonably withhold, condition
or delay its consent in Sublessor's sole and absolute discretion. In the event
that Lessor consents to such Electrical Work, Sublessor may not unreasonably
withhold, condition or delay its consent (it being specifically agreed that
Sublessor may, among other things, condition such consent to provide that
Sublessee indemnify Sublessor against any loss, cost or expense with respect to
restoring the Premises upon the termination of this Sublease and to provide that
Sublessee pay any expenses reasonably incurred by Sublessor with respect to
reviewing such Electrical Work) Should Sublessor grant any such consent, all
additional risers or other equipment required therefor shall be installed by
Sublessee at its sole cost and expense. In no event shall Sublessee use or
install any fixtures, equipment or machines the use of which in conjunction with
other fixtures, equipment and machines in the Premises would result in an
overload of the electrical circuits servicing the Premises.
8. USE OF PREMISES
---------------
8.1 The Premises shall be used and occupied for general business office
purposes only and for no other use or purpose. Nothing set forth herein shall
permit Tenant to use and occupy the Premises otherwise than to the extent
permitted pursuant to the terms of the Master Lease.
9. ASSIGNMENT AND SUBLETTING
-------------------------
9.1 In addition to satisfying the requirements of the Master Lease,
Sublessee shall not, without the prior written consent of the Sublessor (which
Sublessor may not unreasonably withhold, condition or delay if Lessor consents
to such proposed assignment, mortgage, pledge, encumbrance, transfer or sublet,
it being specifically agreed that Sublessor may, among other things, condition
such consent to provide that Sublessee may not assign, sublet or transfer its
interest in this Sublease or in the Premises to any competitor of Sublessor) by
operation of law or otherwise, assign, mortgage, pledge, encumber or in any
manner transfer this Sublease, or any part thereof or any interest of Sublessee
hereunder or sublet or permit the Premises or any part thereof to be used or
occupied by others.
10. TENANT SURCHARGES
-----------------
10.1 "Tenant Surcharges" shall mean any and all amounts (other than Fixed
-----------------
Rent and Sublessee's pro rata share of Annual Expenses increases) which, by the
terms of the Master Lease, become due and
-9-
<PAGE>
payable by Sublessor to Lessor as additional rent under the Master Lease or
otherwise -and which would not have become due and payable but for the acts,
requests for services, and/or failures to act of Sublessee, its agents,
officers, representatives, employees, servants, contractors, invitees, licensees
or visitors under this Sublease, including, but not limited to: (i) any
increases in Lessor's fire, rent or other insurance premiums, as provided in the
Master Lease, resulting from any act or omission of Sublessee and not of
Sublessor, (ii) any additional charges to Sublessor on account of Sublessee's
request for heating, ventilation or air conditioning after hours, and (iii) any
additional charges to Sublessor on account of Sublessee's use of cleaning and
freight elevator services after hours or in excess of normal usage as provided
in the Master Lease.
10.2 After receipt by Sublessor of any statement or written demand from
Lessor which includes demand for payment of any amounts payable hereunder as
Tenant Surcharges, Sublessor shall deliver to Sublessee a copy of such statement
or demand, together with Sublessor's statement of the amount of such Tenant
Surcharges. Sublessee shall pay to Sublessor the amount of such Tenant
Surcharges within ten (10) days after Sublessee's receipt of such statement or
demand; provided, however, that in any instance in which Sublessee shall receive
any such statement or demand directly from Lessor, provided Sublessee delivers a
copy of such statement or demand to Sublessor as soon as reasonably practicable
after such receipt, Sublessee may pay the amount of the same directly to Lessor.
Sublessor agrees that if Sublessee pays the amount due directly to Lessor, in
accordance with the preceding sentence, any obligation of Sublessee to pay the
same to Sublessor shall be satisfied by the payment to Lessor. The amount of
Tenant Surcharges payable hereunder by Sublessee shall at all times be equal to
the amounts payable by Sublessor under the Master Lease which would not have
become due and payable but for the acts, requests for services, and/or failures
to act of Sublessee, its agents, officers, representatives, employees, servants,
contractors, invitees, licensees or visitors, as provided in Paragraph 10.1
above.
10.3 If amounts billed to Sublessor by Lessor include amounts payable by
Sublessee hereunder as Tenant Surcharges together with other charges of a
similar nature which are not attributable to the acts, requests for services
and/or failure to act of Sublessee, its agents, officers, representatives,
employees, servants, contractors, invitees, licensees or visitors, then the
amount payable hereunder by Sublessee as Tenant Surcharges shall be determined
as follows:
(i) if such amounts are billed by Lessor on a per square foot basis,
then the amount payable by Sublessee shall be equal
-10-
<PAGE>
to the product of (a) the dollar amount per square foot charged and (b) the
amount of square footage of the Premises covered by the statement or demand
from Lessor; and
(ii) if such amounts are billed by Lessor on anything other than a per
square foot basis, then the amount payable by Sublessee shall be equal to
the product of (a) the amount of the charge made by Lessor and (b) a
fraction, the numerator of which is the square footage of the Premises
covered by Lessor's statement or demand, and the denominator of which is
the total square footage covered by such statement or demand.
10.4 Payments shall be made pursuant to this Paragraph 10 notwithstanding
the fact that the statement to be provided by Sublessor is furnished to
Sublessee after the expiration of the term of this Sublease and notwithstanding
the fact that by its terms this Sublease shall have expired or have been
canceled or terminated.
10.5 Sublessee shall pay the Additional Rent as and when such rent is
payable by Sublessor under the terms of the Master Lease. In that regard, within
a reasonable time after the receipt by Sublessor of any projected additional
rent statement from Lessor or any change in the additional rent payable on
account of Annual Expenses increases pursuant to Section 6 of the Master Lease,
Sublessor will furnish Sublessee with a copy of such statement and copies of any
additional materials relating to the Premises and received by Sublessor in
connection with such charge. Upon submission of such statement, all subsequent
installments of Additional Rent hereunder shall include 1/12th of the annual
amount of the Additional Rent as shown on such statement; provided, however,
that, to the same extent that Sublessor shall be required to pay Lessor any
retroactive or other lump sum payments with respect to any such Additional Rent,
Sublessee shall pay to Sublessor the amount thereof within fifteen (15) days (or
less if the Master Lease stipulates a shorter period for payment by Sublessor to
Lessor of the amount in question) after receipt by Sublessee of a statement from
Sublessor setting forth the amount of the same; and provided further, that if
any such payment shall be for a period which is in part prior to the
Commencement Date, Sublessee shall pay only that portion thereof which shall be
attributable to the period occurring on or after the Commencement Date.
10.6 If Sublessor shall receive from Lessor any refund of any amounts for
which Sublessee shall have paid Additional Rent to Sublessor or Lessor under the
provisions of this Paragraph 10, Sublessor shall retain out of such refund the
costs and expenses, if any, of obtaining such refund, including but not limited
to
-11-
<PAGE>
reasonable attorneys' fees, and shall then pay to Sublessee, within ten (10)
days of receipt of such refund by Sublessor, the pro rata portion of the
remainder of such refund which is equitably attributable to amounts paid by
Sublessee as Additional Rent hereunder. Sublessor agrees to notify Sublessee in
advance that Sublessor intends to expend money in order to claim a refund from
Lessor.
10.7 Sublessee agrees it shall indemnify and save Sublessor harmless
against all costs, claims, loss or liability resulting from delay by Sublessee
in surrendering the Premises, including, without limitation, any claims made by
any succeeding tenant founded on such delay. The parties recognize and agree
that the damage to Sublessor resulting from any failure by Sublessee timely to
surrender the Premises will be substantial, will exceed the amount of monthly
rent theretofore payable hereunder, and will be impossible of accurate
measurement. Sublessee therefore agrees that if possession of the Premises is
not surrendered to Sublessor on the date of the expiration or sooner termination
of the term of this Sublease, then Sublessee will pay Sublessor as liquidated
damages for each month and for each portion of any month during which Sublessee
holds over in the Premises after expiration or termination of the term of this
Sublease, a sum equal to two (2) times the average rent and additional rent
which was payable per month by Sublessor under the Master Lease during the last
six months of the term hereof for the entire Master Premises.
10.8 If Sublessee shall fail to pay all or any part of any installment of
Fixed Rent or Additional Rent for more than five (5) days after Sublessor's
notice that the same is due and payable, Sublessee shall pay as additional rent
hereunder to Sublessor a late charge of four (4) cents for each dollar of the
amount of such Fixed Rent or Additional Rent which shall not have been paid to
Sublessor within such five (5) days after becoming due and payable. The late
charge payable pursuant hereto shall be (i) payable on demand and (ii) without
prejudice to any of Sublessor's rights and remedies hereunder at law or in
equity for nonpayment or late payment of rent or other sum and in addition to
any such rights and remedies. No failure by Sublessor to insist upon the strict
performance by Sublessee of Sublessee's obligations to pay late charges as
provided herein shall constitute a waiver by Sublessor of its right to enforce
the provisions hereof in any instance thereafter occurring. The provisions of
this paragraph shall not be construed in any way to extend the grace periods or
notice periods provided for elsewhere in this Sublease.
10.9 The provisions of this Paragraph 10 shall survive the
-12-
<PAGE>
expiration or any earlier cancellation or termination of this Sublease.
11. OTHER PROVISIONS OF SUBLEASE
----------------------------
11.1 All applicable terms and conditions of the Master Lease are
incorporated into and made a part of this Sublease as if Sublessor were the
Landlord thereunder (except that for purposes of the insurance to be provided
and indemnities given by Sublessee, both Lessor and Sublessor shall be
included); Sublessee, the Tenant thereunder; the Premises, the Demised Premises
thereunder; the Fixed Rent, the Fixed Rent thereunder; and this Sublease, the
Lease. thereunder, except for the Excluded Provisions (as defined in Schedule 1
to this Sublease)
In connection with the incorporation of the Master Lease, the term
"Landlord" shall, with respect to those provisions which, by their terms, reside
exclusively with Lessor (including, but not limited to, the provision of
services and the promulgation of Building-wide rules and standards), be deemed
to mean "Lessor" and otherwise shall be deemed, for the purposes of this
Sublease, to mean "Sublessor shall use its best efforts, without, however,
incurring any liabilities or expenses not otherwise provided for in the Master
Lease or this Sublease, to ensure that Lessor" whenever such a modification is
required so that an incorporated provision reflects the agreement of the parties
hereto as expressed in this Paragraph 11.
Sublessee assumes and agrees to perform the Sublessor's obligations under
the Master Lease to the extent incorporated herein during the Term and to the
extent such obligations are applicable to the Premises, except that the
obligation to pay rent to Lessor under the Master Lease shall be considered
performed by Sublessee to the extent and in the amount rent is paid to Sublessor
in accordance with Paragraph 5 of this Sublease. Sublessee shall not commit or
suffer any act or omission that will violate any of the provisions of the Master
Lease. Sublessor shall exercise due diligence in attempting to cause Lessor to
perform its obligations under the Master Lease for the benefit of Sublessee. In
the event Sublessor shall commit any breach of the Master Lease, including but
not limited to the payment of any rent or other charges provided for in the
Master Lease, Sublessee shall have the right but not the obligation to make such
payments directly to Lessor, or cure any other breach of the Master Lease in the
name, place and stead of Sublessor, and Sublessee shall deduct such payments
from any amounts due under this Sublease.
Except as may otherwise be specifically provided herein, if the
-13-
<PAGE>
Master Lease terminates, this Sublease shall terminate and the parties shall be
relieved of any further liability or obligation under this Sublease, provided,
however, that if the Master Lease terminates as a result of a default or breach
by Sublessor or Sublessee under this Sublease and/or the Master Lease, then the
defaulting party shall be liable to the non-defaulting party for the damage
suffered as a result of such termination, except that Sublessor shall be
permitted to agree with Lessor to terminate the Master Lease without liability
to Sublessee provided Lessor is prepared to enter into a direct lease with
Sublessee on the same economic terms as contained in this Sublease.
Notwithstanding the foregoing, if the Master Lease gives Sublessor any right to
terminate the Master Lease in the event of the partial or total damage,
destruction, or condemnation of the Premises or the Building or project of which
the Premises are a part or otherwise, the exercise of such right by Sublessor
shall not constitute a default or breach hereunder, and Sublessee agrees that
Sublessor shall be free to exercise any such rights as may be available to
Sublessor without first obtaining any approval from, or consulting with,
Sublessee.
Sublessee acknowledges and agrees that Sublessor shall not be responsible
or liable in any manner for making any repairs or otherwise complying with any
of Lessor's obligations or providing any of the services and/or utilities
required to be provided by Lessor under the Master Lease to the Premises and
Sublessee agrees to look solely to Lessor for the making of repairs, complying
with such obligations or providing any such services and/or utilities and in
connection therewith Sublessor shall reasonably cooperate with Sublessee in
Sublessee's efforts to have the same made, complied with or provided. If Lessor
shall default in any of its obligations to Sublessor with respect to the
Premises, Sublessor shall be obligated to take such steps (other than
instituting any lawsuit) which, in Sublessor's reasonable judgment, may be
reasonably necessary, considering the nature of Lessor's default and Sublessee
shall be entitled to participate with Sublessor in the enforcement of
Sublessor's rights against Lessor. If, after written request from Sublessee,
Sublessor shall fail or refuse to take such action for the enforcement of
Sublessor's rights against Lessor with respect to the Premises within a
reasonable period of time considering the nature of Lessor's default,
Sublessee's sole remedy with respect to Sublessor shall be to take, and
Sublessee shall have the right to take, such action (inclding the institution of
a lawsuit against Lessor) in its own name, and for that purpose and only to such
extent, all of the rights of Sublessor under the Master Lease hereby are
conferred upon and assigned to Sublessee and Sublessee hereby is subrogated to
such rights to the extent that the same shall apply to the Premises. If any such
action against Lessor in Sublessee's name shall be barred by
-14-
<PAGE>
reason of lack of privity, non-assignability or otherwise, Sublessee may take
such action in Sublessor's name (provided Sublessee has obtained the prior
written consent of Sublessor, which consent shall not be unreasonably withheld
or delayed), and Sublessee hereby agrees that Sublessee shall indemnify and hold
Sublessor harmless from and against all liability, loss, damage or expense,
including, without limitation, reasonable attorneys' fees, which Sublessor shall
suffer or incur by reason of such action. The failure of Lessor to make such
repairs, comply with such obligations or provide any such services and/or
utilities shall not result in any claim or right of action of Sublessee against
Sublessor or entitle Sublessee to withhold or otherwise reduce any rent or other
payments to be made to Sublessor pursuant to the terms of this Sublease.
12. BROKER
------
12.1 Sublessee and Sublessor each warrant and represent to the other party
that it has had no dealings or negotiations with any broker or agent other than
Sublessor's Broker (as defined in Schedule 1 to this Sublease) and Sublessee's
Broker (as defined in Schedule 1 to this Sublease) in connection with this
sublease transaction and each covenants and agrees to indemnify and save the
other party harmless from and against any and all loss, damage, cost and
expense, including reasonable attorneys' fees, that may be incurred by the other
party as a result of any claims made against the other party by any broker or
agent, other than Sublessor's Broker and Sublessee's Broker, claimed to have
arisen from any conversation, correspondence, or other dealings between such
party and any other broker or agent in connection with this Sublease transaction
or the Premises. Sublessor shall be responsible for the payment of all
commissions to Sublessor's Broker and Sublessee's Broker in accordance with a
separate agreement between Sublessor and such brokers.
13. ATTORNEYS' FEES
---------------
13.1. If Sublessor or Sublessee shall commence an action against the other
arising out of or in connection with this Sublease, the prevailing party shall
be entitled to recover its costs of suit and reasonable attorneys' fees.
14. NOTICES
-------
14.1 All notices and demands which may be or are required or permitted to
be given by either party to the other hereunder shall be in writing. All notices
and demands by Sublessor to Sublessee shall be sent by United States certified
mail/return receipt requested, postage prepaid, addressed to Sublessee at the
Premises, or to such
-15-
<PAGE>
other place as Sublessee may from time to time designate in a notice to
Sublessor. All notices and demands by the Sublessee to Sublessor shall be sent
by United States certified mail/return receipt requested, postage prepaid,
addressed to Sublessor at Sublessor's Address for Notices (as defined in
Schedule 1 to this Sublease) and to such other person or place as the Sublessor
may from time to time designate in a notice to the Sublessee.
Wherever in the Master Lease, Sublessor is required or permitted to provide
notices or to receive notices in connection with the commission of a default,
Sublessee will have five (5) days less time to give such notice or to cure such
default under the terms hereof.
Sublessor agrees that it will promptly deliver to Sublessee a copy of any
default notice that Sublessor receives from Lessor.
15. SUBLESSOR'S CONSENT
-------------------
15.1 Sublessor and Sublessee covenant and agree that wherever Lessor's
consent or approval is required under the terms of the Master Lease, Sublessee
must obtain both Lessor's and Sublessor's consent or approval (as the case may
be) to such act and it shall be a condition precedent to Sublessor's obligation
to consider consenting to or approving such act that Sublessee first obtain
Lessor's consent or approval (as the case may be) . In the event that the Lessor
does not give its consent or approval (as the case may be) to such act,
Sublessee acknowledges and agrees that Sublessor may arbitrarily and
unreasonably withhold, condition or delay its consent to such act but in the
event that Lessor gives its consent or approval (as the case may be) to such
act, Sublessor shall (except as otherwise specifically set out in this Sublease
to the contrary) not unreasonably withhold its consent to such act. Sublessee
agrees that its sole remedies in cases where Sublessor's reasonableness in
exercising its judgment or withholding or delaying its consent or approval is
applicable pursuant to a specific provision of this Sublease shall be those in
the nature of any injunction, declaratory judgment, or specific performance, the
rights to money damages or other remedies being hereby specifically waived.
16. CONSENT BY LESSOR
-----------------
16.1 This Sublease shall be of no force or effect unless Sublessor receives
a written consent to this Sublease, in form and substance satisfactory to
Sublessor in all respects, from Lessor within thirty (30) days after execution
hereof by both Sublessor and Sublessee. In connection therewith, Sublessee
shall, (a) upon the request of Sublessor, promptly furnish to Sublessor all
information
-16-
<PAGE>
pertaining to the Sublessee requested by Lessor pursuant to the terms of the
Master Lease, and (b) reasonably cooperate with Sublessor in its efforts to
obtain written consent to this Sublease from Lessor. Sublessor shall have no
obligation to pay any fee or charge of any nature whatsoever not specifically
required to be paid under the Master Lease in connection with or as a condition
to obtaining Lessor's consent, and Sublessor shall suffer and incur no liability
to Sublessee for its failure to obtain such consent of Lessor.
17. DEFINITION OF SUBLESSOR
-----------------------
17.1 The term "Sublessor" as used in this Sublease insofar as covenants or
obligations on the part of Sublessor are concerned shall be limited to mean and
include only the owner or owners at the time in question of the "Tenant's"
interest in the Master Lease and landlord's interest in this Sublease, and in
the event of any transfer or transfers of the "Tenant's" interest in the Master
Lease or landlord's interest in this Sublease, Sublessor herein named (and in
the case of any subsequent transfer or conveyance, the then transferor of the
"Tenant's" interest in the Master Lease) shall be automatically freed and
relieved from and after the date of such transfer of all personal liability as
respects the performance of any covenants or obligations on the part of
Sublessor contained in this Sublease thereafter to be performed; provided,
however, that any sums received by Sublessor which are payable to Sublessee
shall be retained by Sublessor for payment of any such sums to Sublessee, and
provided further, that any other funds in the hands of such Sublessor or the
then transferor at the time of such transfer in which Sublessee has an interest
shall be turned over to the new owner and holders of the tenant's interest in
the Master Lease and any amount then due and payable by Sublessee to Sublessor,
or the then transferor or under any provision of this Sublease, shall be so
paid.
18. CONDITION OF PREMISES
---------------------
18.1 Sublessee represents that it has made a thorough inspection of the
Premises and is fully familiar with the condition of every part thereof.
Sublessee agrees to accept possession of the Premises "As Is" in its condition
on the date hereof, free, however, of any furniture or furnishings of Sublessor
which are not being leased to Sublessee pursuant hereto subject, nevertheless,
to ordinary wear and tear occurring prior to the Commencement Date, and
Sublessor shall not be required to make any alterations, decorations,
installations, additions, repairs or improvements of any kind whatsoever to
prepare the Premises for Sublessee's occupancy, except that Sublessor shall
deliver the Premises `broom-clean'.
-17-
<PAGE>
18.2 During the term of this Sublease, Sublessee shall not make or suffer
to be made any alterations, additions, or improvements to the Premises or any
part thereof without complying with the provisions of the Master Lease and
without obtaining the prior written consent of the Sublessor. In the event that
Lessor does not consent to such alterations, additions or improvements,
Sublessor may arbitrarily and unreasonably withhold, condition or delay its
consent in Sublessor's sole and absolute discretion. In the event that Lessor
consents to such alterations, additions or improvements, Sublessor may not
unreasonably withhold, condition or delay its consent (it being specifically
agreed that Sublessor may, among other things, condition such consent to provide
that Sublessee indemnify Sublessor against any loss, cost or expense with
respect to restoring the Premises upon the termination of this Sublease and to
provide that Sublessee pay any expenses reasonably incurred by Sublessor with
respect to reviewing such alterations, additions or improvements).
19. CASUALTY OR CONDEMNATION
------------------------
19.1 If the Premises or the Building shall be partially or totally damaged
by fire or other cause, the consequences thereof shall be determined pursuant to
Section 24 of the Master Lease, as though the Premises had not been sublet by
Sublessor pursuant to this Sublease. Sublessee shall not be entitled to
participate with Sublessor in the enforcement of Sublessor's rights against
Lessor under such Section 24; in such event, however, Sublessor agrees to use
commercially reasonable efforts to enforce its rights against Lessor under such
Article 24 and Sublessee shall have the same right to an apportionment of rent
and to repairs with respect to Sublessor as Sublessor shall have with respect to
Lessor under said Section 24. No damage, compensation or claims shall be payable
by Sublessor for any inconvenience, loss of business or annoyance arising from
any such damage by fire or other cause or by the repair or restoration of any
portion of the Premises or of the Building. Nothing contained herein shall be
deemed to obligate or require Sublessor to repair or restore all or any portion
of the Premises.
19.2 Sublessor will not carry insurance of any kind on its own or
Sublessee's personal property kept at the Premises, and Sublessor shall not be
obligated to repair any damage thereto or replace the same. Sublessee will not
carry insurance of any kind on Sublessor's personal property kept at the Master
Premises, and Sublessee shall not be obligated to repair any damage thereto or
replace the same.
19.3 In the event that the Premises or any part thereof or the Building
shall be acquired or condemned by eminent domain for any public or quasi-public
use or purpose, the consequences of such
-18-
<PAGE>
acquisition or condemnation shall be determined pursuant to Section 25 of the
Master Lease, as though the Premises had not been sublet by Sublessor pursuant
to this Sublease. Sublessee shall not be entitled to participate with Sublessor
in the enforcement of Sublessor's rights against Lessor under such Section 25.
No damage, compensation or claims shall be payable by Sublessor for any
inconvenience, loss of business or annoyance arising from any such condemnation
or acquisition.
20. SUBORDINATION TO MASTER LEASE
-----------------------------
20.1 Sublessee acknowledges and agrees that this Sublease and the estate
hereby granted are subject and subordinate to all of the terms, covenants,
provisions, conditions and agreements contained in the Master Lease and to all
leases, mortgages, encumbrances and other agreements and/or matters to which the
Master Lease is now or may hereafter become subject and subordinate. This clause
shall be self-operative and no further instrument of subordination shall be
required. Sublessee shall, however, execute any certificates confirming such
subordination which Sublessor may request within ten (10) days after receipt of
such request. Sublessee also agrees that this Sublease shall be subject and
subordinate to the Master Lease as the same may hereafter be amended or
modified; provided, however, that no such amendment or modification shall either
increase the obligations of Sublessee hereunder or adversely affect Sublessee's
rights, powers or privileges hereunder.
21. EXCULPATION
-----------
21.1 Notwithstanding anything to the contrary provided elsewhere in this
Sublease, Sublessor and Sublessee each agrees that it shall not make a claim or
seek personal judgment against any officer, director, employee, agent,
beneficiary or shareholder of the other for any default in the performance or
observance of any of the terms or conditions of this Sublease, nor seek nor
assert a deficiency judgment or any other amount claimed payable against any
officer, director, employee, agent, beneficiary or shareholder of the other in
the same proceeding arising out of any alleged breach or non-performance of this
Sublease.
22. DIRECTORY LISTINGS.
------------------
22.1 Subject to the provisions of the Master Lease, provided Sublessee
reimburses Sublessor for the charges therefore, Sublessee may use Sublessee's
pro rata share of Sublessor's space on the Building Directory allocable to the
Premises for the listing of Sublessee.
-19-
<PAGE>
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of
the date hereof
WITNESSES: SUBLESSOR:
PAINEWEBBER INCORPORATED
By: /s/ Lawrence G. DiSalvo
------------------------------
Name: Lawrence G. DiSalvo
Title: Corporate Vice President
WITNESSES: SUBLESSEE:
AUDIBLE WORDS, INC.
By: /s/ Don R. Katz
------------------------------
Name:
Title:
-20-
<PAGE>
The undersigned ("Lessor"), Landlord under the Master Lease, hereby
------
consents to the foregoing Sublease without waiver of any restriction in the
Master Lease concerning further assignment or subletting.
Dated: July ___, 1996
LESSOR:
HARTZ MOUNTAIN INDUSTRIES, INC.
By: ____________________________________
Name:
Title:
-21-