Exhibit 10.4

AGREEMENT OF SUBLEASE

between

PRIMEDIA INC.,

a Delaware corporation,

as Sublessor,

and

NEWTEK BUSINESS SERVICES, INC.,

a New York corporation,

as Sublessee

November 10, 2006

Premises:

A Portion of the 17th Floor

1440 Broadway

New York, New York

--------------------------------------------------------------------------------

TABLE OF CONTENTS

 

1.    Subleasing of Subleased Premises; Condition of Subleased Premises    1 2.
   Term    3 3.    Fixed Rent    4 4.    Additional Rent    6 5.    Care,
Surrender and Restoration of the Subleased Premises    8 6.    Use    8 7.   
Subordination to and Incorporation of Terms of the Prime Lease    8 8.   
Sublessee’s Obligations    10 9.    Sublessor’s Obligations    10 10.   
Covenants with Respect to the Prime Lease    11 11.    Broker    11 12.   
Indemnification of Sublessor    12 13.    Termination of the Prime Lease    13
14.    Approvals or Consents    13 15.    Time Limits    13 16.    Assignment
and Subletting    14 17.    End of Term    14 18.    Condemnation, Destruction,
Fire and other Casualty    14 19.    Notices    15 20.    Sublease Conditional
Upon Consent    16 21.    Security Deposit    17 22.    Insurance Requirements
   19 23.    Sublessor’s Right of Access    19 24.    Right to Cure Defaults and
Damages    19 25.    Sublessor’s Representations, Warranties and Covenants    20
26.    Intentionally Deleted    20 27.    Bankruptcy    20 28.    Miscellaneous
   22

 

LIST OF EXHIBITS:

 

            Page Exhibit A      Floor Plan of 17th Floor    Exhibit B      Form
of Commencement Date Agreement    Exhibit C      Form of Letter of Credit   
Exhibit D      The Prime Lease    Exhibit E      Form of Estoppel Certificate   

 

i

--------------------------------------------------------------------------------

AGREEMENT OF SUBLEASE

AGREEMENT OF SUBLEASE (this “Sublease”), made as of the 10th day of November
2006, by and between PRIMEDIA INC., a Delaware corporation having an office at
745 Fifth Avenue, New York, New York 10151 (“Sublessor”), and NEWTEK BUSINESS
SERVICES, INC., a New York corporation, having an office at 462 7th Avenue, 14th
Floor, New York, New York 10018 (“Sublessee”).

W I T N E S S E T H:

WHEREAS, Sublessor, as successor-in-interest to About.com, Inc., is the tenant
under that certain Lease dated December 31, 1999, (the “Original Lease”) with
1440 Partners, LLC (“Landlord”), successor-in-interest to 1440 Broadway
Partners, LLC, a Delaware limited liability company, whereby Sublessor leased
the entire 18th, 19th and 20th floors and also by delivery in phases, the entire
17th, 21st and 13th floors (collectively, the “Original Premises”) in an office
building (the “Building”) commonly known as and located at 1440 Broadway, New
York, New York, for a term expiring on October 31, 2015.

WHEREAS, the Original Lease was amended by letter agreement dated June 15, 2000,
by amendments dated July 13, 2000 (the “First Amendment”), May 16, 2001 (the
“Second Amendment”), and June 28, 2002 (the “Third Amendment”) and by letter
agreements dated March 1, 2004 (the “Fourth Amendment”) and July 7, 2006 (the
“Fifth Amendment”), pursuant to which, among other things, the entire 14th and a
portion of the 15th floors were added to the Original Premises (the Original
Lease, as amended by the amendments listed above is hereinafter collectively
referred to as the “Prime Lease” (unless any such agreements are expressly and
separately identified in any provision in this Agreement) and the Original
Premises as increased by the amendments listed above is hereinafter collectively
referred to as the “Premises”).

WHEREAS, Sublessor desires to sublet to Sublessee, and Sublessee desires to hire
from Sublessor, a portion of the Premises constituting the Subleased Premises
(as hereinafter defined) as more particularly described below.

NOW, THEREFORE, in consideration of TEN ($10) DOLLARS, the mutual covenants
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows (capitalized terms used and not otherwise defined herein shall have the
meanings ascribed to such terms in the Prime Lease):

1. Subleasing of Subleased Premises; Condition of Subleased Premises.

(a) During the Term (as hereinafter defined), Sublessor hereby subleases to
Sublessee and Sublessee hereby hires from Sublessor, upon and subject to all of
the terms, covenants, rentals and conditions hereinafter set forth, that portion
of the Premises consisting of a portion of the 17th floor (the “Subleased
Premises”) of the Building, as substantially shown on the floor plan attached
hereto as Exhibit A. The attachment of the floor plan of the Subleased Premises
does not constitute a

--------------------------------------------------------------------------------

representation that said floor plan is exact or correct, and Sublessor makes no
representation or warranty with respect to the accuracy of the layout, the
conditions or dimensions of the Subleased Premises as shown on said floor plan
or otherwise. For all purposes of this Sublease, Sublessor and Sublessee
conclusively agree that the Subleased Premises consists of 23,000 rentable
square feet.

(b) Sublessee shall accept possession of the Subleased Premises in the condition
and state of repair on the Commencement Date (as hereinafter defined), “AS IS”,
in vacant (except as provided in Section 28(d) below) and broom clean condition,
subject to reasonable wear and tear between the date hereof and the Commencement
Date and Sublessee expressly acknowledges and agrees that Sublessor has made no
representations with respect to the Subleased Premises or the Building, except
as otherwise expressly provided in this Section 1(b). Sublessor shall not be
obligated to perform any work to prepare the Subleased Premises for Sublessee.
The taking of possession by Sublessee of the Subleased Premises shall be
conclusive evidence as against Sublessee that the Subleased Premises was in good
and satisfactory condition as of the Commencement Date, provided, however, that
Sublessee’s failure to take possession of the Subleased Premises shall not be
deemed evidence that the Subleased Premises was not in good or satisfactory
condition. Sublessor represents that, to Sublessor’s knowledge, Sublessor has
not introduced any hazardous materials into the Subleased Premises, except de
minimis amounts incidental to the operations of general business offices. To the
extent that any hazardous materials are discovered in the Subleased Premises
which are required, pursuant to applicable legal requirements, to be removed,
abated or otherwise remediated (and such hazardous materials were not introduced
into the Subleased Premises by Sublessee or its agents or employees), Sublessor
shall comply with its obligations under the applicable provisions of the Prime
Lease to remove, abate or remediate such hazardous materials, or, to the extent
Sublessor is not so obligated, Sublessor shall enforce its rights, in accordance
with the applicable provisions of the Prime Lease, to cause Landlord to remove,
abate or remediate such hazardous materials. Sublessor represents that it has
received no notice from the Federal Government, the State of New York, the City
of New York Buildings Department or any other governmental agency that the
Subleased Premises are in violation of law or Building codes. If any such
violation exists (except to the extent caused by Sublessee) that is Sublessor’s
obligation to remedy under the Prime Lease, Sublessor shall correct or cause to
be corrected such violation, provided that such violation adversely affects the
use or occupancy by Sublessee of the Subleased Premises. Within five
(5) business days after Sublessor shall have given Sublessee notice of the
Commencement Date as provided in Section 2(a) below, and upon prior reasonable
notice to Sublessor, Sublessee shall have access to the Subleased Premises
during hours other than business hours for purposes of taking measurements and
similar preparatory work to prepare the Subleased Premises for Sublessee’s
occupancy, provided that Sublessee shall have delivered to Sublessor the
evidence of insurance required to be delivered by Sublessee to Sublessor
pursuant to Article 22 of this Sublease.

(c) Sublessee shall not make any alterations, additions, improvements or changes
(collectively, “Improvements”) in or to the Subleased Premises without first
obtaining the prior written consent of Sublessor (which shall not be
unreasonably

 

2

--------------------------------------------------------------------------------

withheld or delayed if (i) Landlord’s consent is not required under the Prime
Lease or (ii) Landlord’s consent is required under the Prime Lease and Landlord
consents to such Improvements), and of Landlord if required under the Prime
Lease. Notwithstanding the foregoing but subject to the provisions of Articles
13 and 14 of the Prime Lease, including, but not limited to the notice required
to be given to Landlord under Section 13.02(b) of the Prime Lease and the
restoration obligations imposed by Landlord pursuant to Sections 14.03, 14.05
and 14.06 of the Prime Lease, Sublessee shall not be required to obtain the
consent of Sublessor to a Decorative Change or a Permitted Nonstructural Change,
provided that Sublessee shall give to Sublessor not less than fifteen
(15) business days’ prior written notice of such Decorative Change or Permitted
Nonstructural Change, which notice shall be accompanied by the information
required to be given to Landlord under Section 13.02(b) of the Prime Lease.
Sublessee, in making any such approved Improvements in or to the Subleased
Premises, shall comply with all applicable terms, covenants and conditions of
the Prime Lease and with all requirements of governmental bodies having
jurisdiction thereof. Sublessee shall reimburse Sublessor for Sublessor’s actual
out-of-pocket costs incurred by it in connection with (i) its review of any
plans and specifications submitted by Sublessee and (ii) Landlord’s review of
any plans and specifications submitted by Sublessee, including charges imposed
by Landlord pursuant to Article 9 of the Prime Lease.

2. Term.

(a) The term (the “Term”) of this Sublease shall commence on the Commencement
Date and shall expire on October 30, 2015 (the “Expiration Date”). The
“Commencement Date” shall be defined to mean and shall be deemed to occur on the
later of (i) the date that Sublessor shall deliver vacant possession of the
Subleased Premises to Sublessee in accordance with the terms of this Sublease,
which will occur not sooner than January 8, 2007 (the “Anticipated Commencement
Date”) and (ii) the date that Sublessor shall have obtained and provided to
Sublessee a manually executed counterpart of Landlord’s consent to this Sublease
(the “Consent”). Sublessor shall give Sublessee not less than five (5) business
days’ prior notice of the Commencement Date. Sublessor and Sublessee shall,
within ten (10) days after the Commencement Date, execute a written agreement,
substantially in the form annexed hereto as Exhibit B, confirming such date as
the Commencement Date. Any failure of the parties to execute such written
agreement shall not affect the validity of the Commencement Date or excuse any
of the parties from their respective obligations hereunder.

(b) If the Commencement Date does not occur on or prior to the Anticipated
Commencement Date for any reason and Sublessor shall fail to deliver possession
of the Subleased Premises, or portion thereof, as contemplated in this
Section 2, Sublessor shall not be liable for its failure to deliver possession
and the validity of this Sublease shall not be impaired under such
circumstances. The parties hereto agree that this Section 2 is intended to
constitute “an express provision to the contrary” within the meaning of
Section 223-a of the New York Real Property Law and any other similar law
hereafter in force, and Sublessee hereby waives any rights to rescind this
Sublease which Sublessee might otherwise have pursuant to said Section 223-a.

 

3

--------------------------------------------------------------------------------

3. Fixed Rent.

(a) With respect to the Subleased Premises, during the Term, from and after the
Rent Commencement Date through and including the Expiration Date, Sublessee
shall pay to Sublessor, in lawful money of the United States, a fixed annual
rent (the “Fixed Rent”) in equal monthly installments, in advance, as follows:

(i) $782,000.00 per annum ($65,166.67 per month) commencing on the Rent
Commencement Date to and including the last day of the month preceding the month
in which occurs the first (1st) anniversary of the Commencement Date;

(ii) $797,640.00 per annum ($66,470.00 per month) commencing on the first
(1st) day of the month in which occurs the first (1st) anniversary of the
Commencement Date to and including the last day of the month preceding the month
in which occurs the second (2nd) anniversary of the Commencement Date;

(iii) $813,592.80 per annum ($67,799.40 per month) commencing on the first
(1st) day of the month in which occurs the second (2nd) anniversary of the
Commencement Date to and including the last day of the month preceding the month
in which occurs the third (3rd) anniversary of the Commencement Date;

(iv) $829,864.66 per annum ($69,155.39 per month) commencing on the first
(1st) day of the month in which occurs the third (3rd) anniversary of the
Commencement Date to and including the last day of the month preceding the month
in which occurs the fourth (4th) anniversary of the Commencement Date;

(v) $846,461.95 per annum ($70,538.50 per month) commencing on the first
(1st) day of the month in which occurs the fourth (4th) anniversary of the
Commencement Date to and including the last day of the month preceding the month
in which occurs the fifth (5th) anniversary of the Commencement Date;

(vi) $890,929.24 per annum ($74,244.10 per month) commencing on the first
(1st) day of the month in which occurs the fifth (5th) anniversary of the
Commencement Date to and including the last day of the month preceding the month
in which occurs the sixth (6th) anniversary of the Commencement Date, which
amount reflects both the two percent (2%) fixed annual increase and a $4.00 per
rentable square foot increase in Fixed Rent applicable after the first five
(5) years of the Term;

(vii) $908,747.83 per annum ($75,728.99 per month) commencing on the first
(1st) day of the month in which occurs the sixth (6th) anniversary of the
Commencement Date to and including the last day of the month preceding the month
in which occurs the seventh (7th) anniversary of the Commencement Date;

(viii) $926,922.79 per annum ($77,243.57 per month) commencing on the first
(1st) day of the month in which occurs the seventh (7th)

 

4

--------------------------------------------------------------------------------

anniversary of the Commencement Date to and including the last day of the month
preceding the month in which occurs the eighth (8th) anniversary of the
Commencement Date; and

(ix) $945,461.25 per annum ($78,788.44 per month) commencing on the first
(1st) day of the month in which occurs the eighth (8th) anniversary of the
Commencement Date to and including the Expiration Date.

If the Fixed Rent shall commence on a date other than the first day of a
calendar month, the Fixed Rent for such calendar month shall be prorated. The
“Rent Commencement Date” shall mean the date that is the four (4) months after
the Commencement Date.

(b) The Fixed Rent for a month shall be due and payable on the first (1st) day
of each calendar month preceding the month for which the monthly installment of
rent is due during the Term at the office of Sublessor, or at such other place
as Sublessor may designate, at any time and from time to time, without any
set-off or deduction of any kind whatsoever (except as otherwise expressly set
forth herein), and except that Sublessee shall pay to Sublessor the first
monthly installment of Fixed Rent upon execution of this Sublease.

(c) If Sublessee shall fail to pay when due any installment of Fixed Rent or
Additional Rent (as hereinafter defined) and such failure shall continue for a
period of five (5) days after such installment or payment shall have become due
and payable, (i) Sublessee shall pay a late fee equal to five percent (5%) of
any outstanding amounts to help defray the cost of collection, and
(ii) Sublessee shall pay interest thereon, from the due date thereof to the date
of payment, at the rate equal to the lesser of (x) of three percent (3%) in
excess of the prime interest rate then in effect as published in The Wall Street
Journal (or successor) or (y) the maximum legal rate of interest (the “Interest
Rate”). Notwithstanding the foregoing, Sublessor agrees that Sublessee shall not
be liable for the payment of interest as provided in this Section 3(c) with
respect to the first late payment of Fixed Rent or Additional Rent or any other
amount due hereunder in any consecutive twelve (12) month period during the Term
of this Sublease, provided that Sublessee shall have made any such late payment
of rents to Sublessor within five (5) days after notice is given to Sublessee by
Sublessor with respect thereto. Notwithstanding the imposition of such interest,
Sublessee shall be in default under this Sublease if any or all payments
required to be made by Sublessee are not made at the time herein stipulated, and
neither the demand for, nor collection by Sublessor of, such late fee or such
interest shall be construed as a curing of such default on the part of
Sublessee. The payment of such late fee and interest shall be in addition to all
other rights and remedies available to Sublessor in the case of nonpayment of
rent.

(d) Provided that Sublessee shall not then be in default under the terms of this
Sublease beyond all applicable notice and grace periods under this Sublease,
Sublessee shall be entitled to an abatement of Fixed Rent in the aggregate
amount of $345,000, to be applied solely against the first six (6) monthly
installments of Fixed Rent payable by Sublessee under this Sublease, each such
monthly abatement equal to $65,166.67, except for the sixth month after the Rent
Commencement Date, which abatement shall be equal to $19,166.65.

 

5

--------------------------------------------------------------------------------

4. Additional Rent.

(a) With respect to the Subleased Premises, during the Term, Sublessee shall pay
to Sublessor as “Additional Rent” as follows:

(i) Any items specified in the Prime Lease to be additional rent and any other
sums of money, costs, charges, adjustments, increases, rent or additional rent
payable by Sublessor to Landlord under the Prime Lease (including, without
limitation, overtime charges for HVAC) attributable to the Subleased Premises or
the use and occupancy thereof by Sublessee, or to any alteration or Change (as
such term is defined in the Prime Lease), made or to be made therein by or for
Sublessee, provided, that, for the purposes of calculating the amount of
Additional Rent payable by Sublessee to Sublessor in respect of Taxes, the
“Tenant’s Proportionate Share” (as defined in the Prime Lease) shall be deemed
to be 11.12% (subject to adjustment in event of any reduction in the size of the
Building or the Subleased Premises as a result of a casualty or condemnation) of
the Premises, with all other terms having the same meanings ascribed to them in
Article 5 of the Prime Lease, except that the “Base Tax Year” (as defined in the
Prime Lease) for purposes of this Sublease shall mean the calendar year 2007
(i.e. one-half of the amount of Taxes in respect of the 2006/2007 Tax Year plus
one-half of the amount of Taxes in respect of the 2007/2008 Tax Year). Except as
modified by this Sublease, with respect to the Subleased Premises, the
Additional Rent for Taxes shall be calculated in accordance with the terms of
the Prime Lease. Notwithstanding anything to the contrary contained in the Prime
Lease, Sublessee shall have no obligation to pay to Sublessor any Operating
Expense Payment (as defined in the Prime Lease).

(ii) Additional Rent due for electricity payable by Sublessor to Landlord with
respect to the Subleased Premises pursuant to the terms of Section 16 of the
Prime Lease, which electricity is currently measured by an existing submeter.
With respect to the existing submeter, which measures the electricity
consumption in the Subleased Premises and the balance of the 17th floor on which
the Subleased Premises is located, Sublessee shall pay for Sublessee’s “Usage”
(as defined in Section 16.02(a) of the Prime Lease), which shall be equal to
Sublessee’s proportionate share of the electricity consumption measured by such
submeter. Sublessee shall have the right, upon written notice given to Sublessor
within ten (10) days after Sublessor gives Sublessee an invoice, to contest
Sublessee’s Usage shown on such invoice, provided that Sublessee shall pay to
Sublessor the amount due as shown on such invoice in accordance with Article 16
of the Prime Lease. If Sublessee shall so contest an invoice for electricity,
then Sublessor shall, at Sublessee’s cost and expense, cause the electricity
consumption measured by such existing submeter to be surveyed by an independent
electrical consultant designated by Sublessor to determine whether the cost
billed to Sublessee for Sublessee’s Usage equitable reflects Sublessee’s hours
of operation and the quantity of electrical equipment in the Subleased Premises.
In the event such survey determines that Sublessee’s actual electricity
consumption for the period shown on Sublessor’s invoice was at least ten percent
(10%) less than Sublessee’s Usage shown on Sublessor’s invoice,

 

6

--------------------------------------------------------------------------------

then Sublessor shall credit such difference against the next invoice to
Sublessee for electricity and Sublessor shall thereafter use commercially
reasonable efforts to monitor the consumption of electricity by all subtenants
measured by such existing submeter. If Sublessee or the other 17th floor
subtenant(s) shall consume unreasonable amounts of electricity for more than a
de minimis period of time, Sublessor shall use good faith efforts to implement a
mutually agreeable process to monitor and assess the consumption of electricity
by Sublessee and the other 17th floor subtenant(s). If a submeter(s) shall be
installed that shall measure only the electricity consumption in the Subleased
Premises, (x) Sublessee’s Usage shall be equal to 100% of the electricity
consumption shown on such submeter(s), (y) Sublessee shall have no further right
to contest an invoice for electricity from Sublessor and Sublessee shall pay
Sublessor for such Usage in accordance with Article 16 of the Prime Lease and
(z) Sublessee shall, during the Term of this Sublease, pay for all costs and
expenses to maintain and repair such submeter(s).

(b) Sublessee shall pay to Sublessor the Additional Rent at the time and in the
manner Sublessor is required to pay the same to Landlord, as set forth in the
Prime Lease. Except as expressly provided herein, all other additional rent,
charges, fees or other amounts payable under this Sublease or the Prime Lease by
Sublessee shall be payable within fifteen (15) days of written demand therefor.

(c) The initial demand for Additional Rent payable pursuant to this Section 4
and any subsequent demand for increases in Additional Rent shall be accompanied
by copies of any invoices, bills or other documentation evidencing such
Additional Rent which Sublessor shall have received from Landlord in connection
therewith. Notwithstanding the foregoing, any failure by Sublessor to make a
demand under the provisions of this Sublease, shall not in any way be a waiver,
or cause Sublessor to forfeit or surrender its rights to collect, any Fixed Rent
or Additional Rent that may have become due pursuant to the terms of this
Sublease.

(d) Sublessor shall credit Sublessee, its proportionate share of any refunds
received by Sublessor from Landlord under the Prime Lease on account of any
overpayment of Additional Rent for which Sublessee has paid Sublessor under this
Sublease; provided, however, that Sublessor shall be entitled to deduct from the
aggregate of the amount of such refund Sublessee’s proportionate share of any
and all costs and expenses, including, without limitation, reasonable attorneys’
fees, consultants fees and disbursements, incurred by Sublessor in connection
with the obtaining of any such refunds. Sublessee shall pay to Sublessor, as
Additional Rent, within ten (10) days after demand therefor, Sublessee’s
proportionate share of any amounts (plus interest, if any) due Landlord under
the Prime Lease on account of any underpayment of Additional Rent payable under
this Sublease, including, without limitation, Additional Rent payable hereunder
on account of Taxes due under Article 5 of the Prime Lease.

(e) All amounts payable by Sublessee to Sublessor pursuant to this Sublease,
including, without limitation, Fixed Rent and Additional Rent, shall be deemed
to be and shall constitute rent for all purposes hereunder and, in the event of
any non-payment thereof, Sublessor shall have all of the rights and remedies
provided herein, at law or in equity for non-payment of rent. The obligation of
Sublessee to pay all amounts to Sublessor hereunder shall survive the Expiration
Date or the earlier termination of this Sublease.

 

7

--------------------------------------------------------------------------------

5. Care, Surrender and Restoration of the Subleased Premises.

(a) Without limiting any other provision of this Sublease or the Prime Lease, as
the case may be, but subject to Section 1(b) of this Sublease, Sublessee shall
take good care of the Subleased Premises, suffer no waste or injury thereto and
shall comply with all laws, orders and regulations applicable to the Subleased
Premises, the Building and Sublessee’s use or manner of use thereof, which are
imposed on Sublessor, as tenant under the Prime Lease in connection with the
Subleased Premises and/or the Building.

(b) Upon the Expiration Date or the earlier termination of the Term, Sublessee
shall quit and surrender the Subleased Premises to Sublessor, broom clean, in
good order and condition, reasonable wear and tear excepted and Sublessee shall
remove all of its property therefrom and perform any Restoration Work required
by reason of Section 14.05 of the Prime Lease with respect to Specialty
Installations made by Sublessee and remove any installation or improvement
required by Section 14.06 of the Prime Lease and restore any damage caused by
such removal.

(c) If the Expiration Date or the earlier termination of the Term falls on a
Sunday, this Sublease shall expire at noon on the immediately preceding Saturday
unless such Saturday is a legal holiday, in which case the Term shall expire at
noon on the first business day immediately preceding such Saturday. Sublessee
shall observe and perform each of the covenants contained in this Sublease and
Sublessee’s obligations hereunder shall survive the Expiration Date or earlier
termination of this Sublease.

6. Use.

Sublessee shall use and occupy the Subleased Premises as executive and general
offices for Sublessee’s business (the “Permitted Use”) and for no other purpose.

7. Subordination to and Incorporation of Terms of the Prime Lease.

(a) With respect to the Subleased Premises, this Sublease is in all respects
subject and subordinate to all of the terms, provisions, covenants,
stipulations, conditions and agreements of the Prime Lease, and to all matters
to which the Prime Lease is or shall be subordinate, and, except as otherwise
expressly provided in this Sublease, all of the terms, provisions, covenants,
stipulations, conditions, rights, obligations, remedies and agreements of the
Prime Lease are incorporated in this Sublease by reference and made a part
hereof as if herein set forth at length, and shall, as between Sublessor and
Sublessee (as if they were the “Landlord” and “Tenant,” respectively, under the
Prime Lease, and as if the words “Prime Lease” were “Sublease” and the word
“Premises” were “Subleased Premises”), constitute the terms of this Sublease,
except for such other terms of the Prime Lease that are inapplicable,
inconsistent with, or specifically modified by, the terms of this Sublease. This
clause shall be self-operative and no further instrument of subordination shall
be required, but

 

8

--------------------------------------------------------------------------------

Sublessee shall execute promptly any certificate confirming such subordination
that Sublessor may request. In the event of any inconsistency between this
Sublease and the Prime Lease, such inconsistency shall be resolved in favor of
the obligation which is more onerous to Sublessee or that restriction which is
more restrictive of Sublessee, as the case may be.

The following provisions of the Prime Lease shall not apply to this Sublease:
all references in the Prime Lease and the amendments thereto (the “Amendments”)
to any of the following terms or to any obligation of the Landlord to perform
any of the following: Premises, Commencement Date, Expiration Date, Rent
Commencement Date, Base Operational Year, Operating Expense Base, Tenant’s
Projected Share of Operating Expenses, Operating Expense Payment, Operating
Statement, Security Deposit, Excepted Subletting, Short Term Sublease, Small
Sublease, Landlord’s Contribution, Landlord’s Initial Construction, Broker,
rental amounts, rental rates and rent abatements.

In addition, the following Articles, Sections, Exhibits and Amendments shall not
apply to this Sublease or shall be amended as indicated:

(I) Original Lease - Sections 1.01, 1.02, 1.03, 1.04, 1.06, 1.09, 1.10, 7.05,
9.02(b), 9.12, 9.15, 11.09, 13.09, 16.10, 18.06, 18.07(a)(2) and (3) and 19.06.
The reference to 50% in Sections 9.10(a) and (b) shall be increased to 100%. In
Section 13.02(b), the amounts $575,000, $625,000 and $685,000 are deleted and
replaced with the amount of $100,000. In Section 13.05, the amounts $575,000,
$625,000 and $685,000 are deleted and replaced with the sum of $250,000. The
last sentence of Section 13.08(b) is deleted. The ten (10) day period referred
to in Section 25.02(a) shall be deemed to be five (5) days. In addition, the
abandonment (unless as a result of a casualty) or the vacation of any portion of
the Subleased Premises by Sublessee shall not be deemed a default under
Section 25.02(d) of the Prime Lease, provided that Sublessee gives Sublessor
prior written notice of Sublessee’s intention to so abandon or vacate the
Subleased Premises, Sublessee continues to comply with the terms of this
Sublease, including, but not limited to, Sublessee’s obligation to pay all Fixed
Rent and Additional Rent to Sublessor in accordance with this Sublease, and
Sublessee secures and otherwise protects the Subleased Premises or portion
thereof, as applicable, to the reasonable satisfaction of Landlord.

Articles 4, 6, 31, 32, 39, 40, 41, 42, 43, 44, 45,

all Floor plans and Exhibits C, G, H, I, J and K.

(II) First Amendment - Sections 2, 3, 4, 5, 6, 7, 9, 13 and 14, Exhibit A (Floor
Plan), Exhibit B, and Exhibit C.

(III) Second Amendment – Sections 1, 3, 4, 5, 6, 7, 9, 11, 12, 13, 14, 15,
17(b), (c), (d), (e), (f), (i), (j), (l), (m), (n), (o), (p), (q), (r) and (s),
18 and 19, Exhibit A (Floor Plan).

(IV) Third Amendment.

 

9

--------------------------------------------------------------------------------

(V) Letter dated June 15, 2002.

(VI) Fourth Amendment.

(VII) Fifth Amendment.

In furtherance of the foregoing, Sublessee shall not take any action or do or
permit to be done anything which (i) is or may be prohibited under the Prime
Lease, (ii) might result in a violation of or default under any of the terms,
covenants, conditions or provisions of the Prime Lease or any other instrument
to which this Sublease is subordinate, or (iii) would result in any additional
cost or other liability to Sublessor (unless Sublessee agrees to bear such
additional cost).

(b) In the event of termination, re-entry or dispossess of Sublessor by Landlord
under the Prime Lease, Landlord may, at its option, take over all of the right,
title and interest of Sublessor, as sublessor under this Sublease, and Sublessee
shall, at Landlord’s option, as the case may be, attorn to Landlord pursuant to
the then executory provisions of the Sublease, except that Landlord shall not
(i) be liable for any previous act or omission of Sublessor under this Sublease;
(ii) be subject to any offset, not expressly provided in this Sublease, that
theretofore accrued to Sublessee against Sublessor or (iii) be bound by any
previous modification of this Sublease or by any previous prepayment of more
than one month’s Fixed Rent or any Additional Rent then due, in either case not
approved by Landlord in writing, which approval (in the case of a modification)
shall not be unreasonably withheld, conditioned or delayed, provided that all of
the applicable terms and conditions with respect to a proposed subletting are
satisfied, as if such modification were a new sublease (e.g., if the proposed
modification did not involve the subletting of additional space then Landlord’s
Option (as such term is defined in the Prime Lease) would not apply thereto).

8. Sublessee’s Obligations.

Except as specifically set forth herein to the contrary, all acts to be
performed by, and all of the terms, provisions, covenants, stipulations,
conditions, obligations and agreements to be observed by, Sublessor, as Tenant
under the Prime Lease shall, to the extent that the same relate to the Subleased
Premises, be performed and observed by Sublessee, and Sublessee’s obligations in
respect thereof shall run to Sublessor or Landlord as Sublessor may determine to
be appropriate or as may be required by the respective interests of Sublessor or
Landlord. Sublessee shall indemnify Sublessor against, and hold Sublessor
harmless from, all liabilities, losses, obligations, damages, penalties, claims,
costs and expenses (including, without limitation, reasonable attorneys’ fees
and other costs) which are paid, suffered or incurred by Sublessor as a result
of the nonperformance or nonobservance of any such terms, provisions, covenants,
stipulations, conditions, obligations or agreements by Sublessee.

9. Sublessor’s Obligations.

The benefit of all repairs, restorations, compliance with law and other
requirements, materials and services to be provided to the Subleased Premises
and the

 

10

--------------------------------------------------------------------------------

Building by Landlord under the Prime Lease shall accrue to Sublessee; but,
notwithstanding anything to the contrary in this Sublease or in the Prime Lease,
Sublessor shall under no circumstances be obligated to make any repairs or
restorations, comply with any laws or other requirements or to supply any
materials or services to the Subleased Premises or the Building; and Sublessor
shall under no circumstances be liable to Sublessee for the failure of Landlord
or others so to do. Upon Sublessee’s written request, Sublessor shall present to
Landlord, in the name of Sublessor, any demand requested by Sublessee for any
such repairs, restorations, materials or right to exercise, in Sublessor’s name,
but at Sublessee’s sole cost and expense, all of the rights available to
Sublessor to enforce performance of the obligations of Landlord to make any such
repairs and restorations and to supply any such materials and services to the
Subleased Premises and no failure on the part of Landlord to perform and no
failure to furnish, or interruption of any services or facilities shall give
rise to any (i) abatement, diminution or reduction in Sublessee’s obligations
under this Sublease or (ii) liability on the part of Sublessor, except in each
case to the extent Sublessor is entitled to an abatement, diminution or
reduction in rent with respect to the Subleased Premises as Tenant under the
Prime Lease. Subject to Section 17.05 of the Prime Lease, Sublessor shall
furnish to the Subleased Premises during the Term adequate air conditioning
during periods beginning at 7 a.m. until 8 p.m. on business days (as such term
is defined in the Prime Lease) and 8 a.m. until 3 p.m. on Saturdays. Landlord
hereby represents that as of the date hereof, the AC Units and Tenant’s AC
Equipment are in good working order. Sublessee shall have access to the
Subleased Premises pursuant to Section 19.09 of the Prime Lease, which
Section 19.09 is incorporated herein by reference under Article 7 of this
Sublease. Sublessee shall have the right, at Sublessee’s sole cost and expense,
to exercise and to enforce, by legal action, in Sublessor’s name (if required
because of a lack of privity between Landlord and Sublessee) all of the rights
available to Sublessor under the Prime Lease to enforce the performance of the
obligations of Landlord under the Prime Lease as applicable to the Subleased
Premises.

10. Covenants with Respect to the Prime Lease.

In the event that Sublessee shall be in default of any term, provision,
covenant, stipulation, condition, obligation or agreement of, or shall fail to
honor any obligation under this Sublease, Sublessor, on giving the notice
required by the Prime Lease (as modified pursuant to Section 15 hereof), and
subject to the right, if any, of Sublessee to cure any such default within any
applicable grace period provided in the Prime Lease (as modified pursuant to
Section 15 hereof), shall have available to it all of the remedies available to
Landlord under the Prime Lease in the event of a like default or failure on the
part of Sublessor, as Tenant thereunder. Such remedies shall be in addition to
all other remedies available to Landlord under the Prime Lease in the event of a
like default or failure on the part of Sublessor, as Tenant thereunder, and such
remedies shall be in addition to all other remedies available to Sublessor at
law or in equity.

11. Broker.

Each party represents and warrants to the other that such party making the
representation has not dealt with any broker or finder in connection with this
Sublease

 

11

--------------------------------------------------------------------------------

other than CB Richard Ellis (“Broker”). Sublessor shall pay the fees and
commissions due Broker relating to this Sublease pursuant to a separate
agreement with Broker. Each party does hereby agree to indemnify and hold the
other harmless from and against any and all liabilities, losses, obligations,
damages, penalties, claims, costs and expenses (including, without limitation,
reasonable attorneys’ fees and other charges and reasonable attorneys’ fees and
other charges incurred in connection with the enforcement of this indemnity
provision) arising out of any claims, demand or proceeding for a real estate
brokerage commission, finder’s fee or other compensation made by any person or
entity in connection with this Sublease claiming to have dealt with such party
with the indemnification obligation. The provisions of this Section 11 shall
survive the Expiration Date or the earlier termination of this Sublease.

12. Indemnification of Sublessor.

(a) Sublessee agrees to indemnify Sublessor against and hold Sublessor harmless
from, any and all liabilities, losses, obligations, damages, penalties, claims,
costs and expenses (including, without limitation, reasonable attorneys’ fees
and other charges and reasonable attorneys’ fees and other charges incurred in
connection with the enforcement of this indemnity provision) which are paid,
suffered or incurred by Sublessor as a result of (i) any personal injuries or
property damage occurring in, on or about the Subleased Premises during the
Term, (ii) any work or thing done, or any condition created, by Sublessee in, on
or about the Subleased Premises or the Building during the Term, or (iii) any
act or omission of Sublessee or Sublessee’s agents, contractors, servants,
employees, invitees or licensees during the Term, except to the extent that any
of the foregoing indemnified matters is caused by the negligence or willful
misconduct of Sublessor or its agents, contractors, servants, employees,
invitees or licensees. Notwithstanding anything to the contrary contained in
this Sublease, to the full extent permitted by law, in no event shall Sublessee
be liable for any consequential, special or punitive damages arising out of any
breach or default in the performance or observance of any of the terms,
covenants or conditions to be observed or performed by Sublessee under this
Sublease, except to the extent such damages are incurred in connection with any
holdover in the Subleased Premises by Sublessee.

(b) Sublessor agrees to indemnify Sublessee against and hold Sublessee harmless
from, any and all liabilities, losses, obligations, damages, penalties, claims,
costs and expenses (including, without limitation, reasonable attorneys’ fees
and other charges and reasonable attorneys’ fees and other charges incurred in
connection with the enforcement of this indemnity provision) which are paid,
suffered or incurred by Sublessee as a result of (i) any work or thing done, or
any condition created, by Sublessor in, on or about the Subleased Premises or
the Building during the Term (except in connection with any actions taken by
Sublessor in the exercise of its remedies under this Sublease after a default by
Sublessee), or (ii) any act or omission of Sublessor or Sublessor’s agents,
contractors, servants, employees, invitees or licensees during the Term, except
to the extent that any of the foregoing indemnified matters is caused by the
negligence or willful misconduct of Sublessee or its agents, contractors,
servants, employees, invitees or licensees. Notwithstanding anything to the
contrary contained in this Sublease, to the full extent permitted by law, in no
event shall Sublessor be liable for

 

12

--------------------------------------------------------------------------------

any consequential, special or punitive damages arising out of any breach or
default in the performance or observance of any of the terms, covenants or
conditions to be observed or performed by Sublessor under this Sublease.

13. Termination of the Prime Lease.

If the term of the Prime Lease is terminated prior to the Expiration Date, then,
subject to Section 7(b) hereof, this Sublease shall immediately terminate with
respect to the entire Subleased Premises, and Sublessor shall not be liable to
Sublessee by reason thereof unless such termination is a result of a default by
Sublessor under the Prime Lease beyond all applicable notice and grace periods.

14. Approvals or Consents.

In all provisions of the Prime Lease requiring the approval or consent of
Landlord, Sublessee shall be required to obtain the express written approval or
consent of Sublessor, which consent shall be further subject to the approval or
consent of Landlord, pursuant to the Prime Lease. If Sublessor shall give its
consent to any request made by Sublessee then Sublessor hereby agrees to
promptly furnish to Landlord copies of such request for consent or approval
received from Sublessee. If Landlord shall refuse to give its consent or
approval to any request made by Sublessee then such request shall be deemed
denied, whether or not Sublessor shall have previously granted its consent.

15. Time Limits.

The parties agree that unless otherwise expressly modified herein, the time
limits set forth in the Prime Lease for the giving of notices, making demands,
payment of any sum, the performance of any act, condition or covenant, or the
exercise of any right, remedy or option, are modified for the purpose of this
Sublease as provided in this Article 15. Whenever in the Prime Lease a time is
specified for the giving of any notice or the making of any demand by the Tenant
thereunder, such time is hereby changed (for the purpose of this Sublease only)
by adding five (5) days thereto; and whenever in the Prime Lease a time is
specified for the giving of any notice or the making of any demand by the
Landlord thereunder relating to (i) the payment of Fixed Rent or Additional Rent
under the Prime Lease, such time is hereby changed (for the purpose of this
Sublease only) by subtracting three (3) days therefrom, and (ii) any subject
other than the payment of Fixed Rent or Additional Rent under the Prime Lease,
such time is hereby changed (for the purpose of this Sublease only) by
subtracting ten (10) days therefrom. Whenever in the Prime Lease a time is
specified within which the Tenant thereunder must give notice or make a demand
following an event, or must respond to any notice, request or demand previously
given or made by the Landlord thereunder, or to comply with any obligation on
the Tenant’s part thereunder relating to (x) the payment of Fixed Rent or
Additional Rent under the Prime Lease, such time is hereby changed (for the
purposed of this Sublease only) by subtracting three (3) days therefrom, and
(y) any other obligation under the Prime Lease or under this Sublease, such time
is hereby changed (for the purpose of this Sublease only) by subtracting ten
(10) days therefrom. Wherever in the Prime Lease a time is specified within
which the Landlord thereunder must respond to any notice,

 

13

--------------------------------------------------------------------------------

request or demand previously given or made by the Tenant thereunder, such time
is hereby changed (for the purpose of this Sublease only) by adding five
(5) days thereto. It is the purpose and intent of the foregoing provisions,
among other things, to provide Sublessor with time within which to transmit to
Landlord any notices or demands received from Sublessee and to transmit to
Sublessee any notices or demands received from Landlord. Notwithstanding the
foregoing, the 120 day time period referred to in Section 5.11 of the Prime
Lease shall be 100 days and the 180 day period referred to therein shall be 150
days. Each of Sublessor and Sublessee shall, promptly after receipt thereof,
furnish to the other a copy of each notice, demand or other communication
received from Landlord with respect to the Subleased Premises.

16. Assignment and Subletting.

Notwithstanding anything to the contrary contained herein or in the Prime Lease,
Sublessee, for itself, its successors and assigns, expressly covenants that it
shall not assign (whether by operation of law or otherwise), pledge or otherwise
encumber this Sublease, or sublet all or any portion of the Subleased Premises
without obtaining in each instance, the prior written consent of Landlord and
the prior written consent of Sublessor, to the extent required pursuant to the
applicable provisions of Article 16 of the Prime Lease, which consent of
Sublessor shall not be unreasonably withheld provided that Sublessee shall have
delivered to Sublessor a term sheet signed by the proposed assignee or
sub-sublessee, as the case may be, containing all of the economic terms of the
proposed assignment or sub-sublease, as the case may be. Sublessor reserves the
right to transfer and assign its interest in and to this Sublease to any entity
or person who shall succeed to Sublessor’s interest in and to the Prime Lease.

17. End of Term.

Sublessee acknowledges that possession of the Subleased Premises must be
surrendered to Sublessor on the Expiration Date or the earlier termination of
this Sublease, in the same condition as set forth in Section 5(b) hereof,
subject to reasonable wear and tear and damage from casualty. Sublessee agrees
to indemnify Sublessor against and hold Sublessor harmless from, any and all
liabilities, losses, obligations, damages, penalties, claims, costs and expenses
(including, without limitation, reasonable attorneys’ fees and other charges)
which are paid, suffered or incurred by Sublessor as a result of the failure of,
or the delay by, Sublessee in so surrendering the Subleased Premises, including,
without limitation, any claims made by Landlord or any succeeding tenant founded
on such failure or delay.

18. Condemnation, Destruction, Fire and other Casualty.

If the whole or any part of the Subleased Premises shall be condemned or damaged
by fire or other casualty and the Prime Lease is not terminated on account
thereof by Landlord or Sublessor, then this Sublease shall remain in full force
and effect with respect to the portion of the Subleased Premises not so
terminated, and Sublessee’s obligation to pay Fixed Rent and Additional Rent
hereunder shall abate only proportionate to the extent that the Fixed Rent and
Additional Rent for the Subleased Premises shall abate under the terms of the
Prime Lease.

 

14

--------------------------------------------------------------------------------

19. Notices.

Any notice, request or demand (“Notice”) permitted or required to be given by
the terms and provisions of this Sublease, or by any law or governmental
regulation, either by Sublessor or Sublessee, shall be in writing and shall be
given as follows: (i) by hand delivery; (ii) by deposit in the United States
mail as first class certified mail, return receipt requested, postage paid; or
(iii) by overnight nationwide commercial courier service; in each case, to the
address and party listed below:

If to Sublessor:

Primedia Inc.

745 Fifth Avenue

New York, New York 10151

Attn: Mr. Willem VanDooijeweert

Maureen Sheehan, Esq.

With a copy to:

Loeb & Loeb LLP

345 Park Avenue

New York,

New York 10154

Attn: Raymond A. Sanseverino, Esq.

 

15

--------------------------------------------------------------------------------

If to Sublessee:

Prior to the Commencement Date:

Newtek Business Services Inc.

462 7th Avenue

14th Floor

New York, New York 10018

Attention: Chief Legal Officer

Telephone: 212-356-9532

Facsimile: 212-356-9532

E-Mail: alewin@newtekbusinessservices.com

After the Commencement Date to Sublessee at the Leased

Premises;

With a copy to:

Jeffrey M. Platte, Esq.

Platte, Klarsfeld, Levine & Lachtman, LLP

10 East 40th Street, 46th Floor

New York, New York 10016

Telephone: (212) 726-4420

Facsimile: (212) 402-1787

E-Mail: jplatte@plattelaw.com

Any party may change the address to which any such Notice is to be delivered, by
furnishing ten (10) days written Notice of such change to the other parties in
accordance with the provisions of this Section 19. Notices shall be deemed to
have been given on the date they are actually received; provided, however, that
(i) if any Notice is received on a day that is not a business day or is received
after 5:00 p.m. on a business day in the time zone where received, it shall be
deemed given on the next succeeding business day and (ii) the inability to
deliver Notices because of a changed address of which no Notice was given, or
rejection or refusal to accept any Notice offered for delivery shall be deemed
to be receipt of the Notice as of the date of such inability to deliver or
rejection or refusal to accept delivery (subject to the provisions of clause (i)
above).

20. Sublease Conditional Upon Consent. Sublessor and Sublessee each acknowledges
and agrees that this Sublease is subject to Sublessor’s obtaining the Consent,
as required by the Prime Lease. Notwithstanding anything set forth in this
Sublease to the contrary, Sublessor shall not be obligated to perform any acts,
expend any sums or bring any lawsuits or other legal proceedings, in order to
obtain the Consent, other than to request the Consent in due course. Sublessee
shall promptly provide Sublessor with all information required or reasonably
requested by Landlord under the Prime Lease. If Landlord denies its Consent to
this Sublease or if Landlord fails to issue its Consent or before the
forty-fifth (45th) consecutive day immediately after the date this Sublease
shall have been executed and delivered by Sublessor and Sublessee, this

 

16

--------------------------------------------------------------------------------

Sublease shall terminate and be void and of no force or effect, provided that if
Landlord shall respond to Sublessor’s and Sublessee’s request for Landlord’s
consent to this Sublease with a request for additional, relevant documentation
from Sublessee, then such forty-five (45) day period shall commence on the date
that Sublessee shall have given Landlord such additional documentation. If this
Sublease is so terminated, (a) the security deposit referred to in Section 21 of
this Sublease and the first monthly installment of Fixed Rent previously paid by
Sublessee to Sublessor on account of the Subleased Premises shall be returned to
Sublessee, and (b) the parties thereupon shall be relieved of any further
liability or obligation under this Sublease, except for such provisions hereof
as are expressly stated to survive.

21. Security Deposit.

(a) Concurrently with the execution hereof, Sublessee has deposited with
Sublessor a deposit in the amount of Two Hundred Thirty-Six Thousand Three
Hundred Sixty-Five and 32/100 ($236,365.32) (the “Security Deposit”) in cash, to
be held by Sublessor as security for the faithful performance and observance of,
and compliance with, all of the terms, covenants and conditions of this Sublease
on Sublessee’s part to perform, observe or comply with, including, without
limitation, the surrender of possession of the Subleased Premises to Sublessor
in the condition as herein provided; it being expressly understood and agreed
that Sublessee shall pay rent for the last calendar month (or part thereof) of
the Term hereof promptly when due in accordance with the terms hereof.

(b) It is agreed that in the event Sublessee defaults in respect of any of the
terms or provisions of this Sublease (after notice and expiration of the
applicable cure period), including, but not limited to, the payment of Fixed
Rent or Additional Rent, Sublessor may apply or retain the whole or any part of
the Security Deposit to the extent required for the payment of any such rent or
any other sum as to which Sublessee is in such default or for any sum which
Sublessor may expend or may be required to expend by reason of any such default,
including, but not limited to, any damages to the Subleased Premises or any
deficiency in the reletting of the Subleased Premises whether such damages or
deficiency should accrue before or after summary proceedings or any reentry by
Sublessor.

(c) The Security Deposit may not be used or applied by Sublessee as a substitute
for any rent due, but may be so applied by Sublessor at any time at Sublessor’s
sole option. The use, application or retention of the Security Deposit, or any
portion thereof, by Sublessor shall not prevent Sublessor from exercising any
other right or remedy provided by this Sublease or by law or in equity, and
shall not operate as a limitation on any recovery to which Sublessor may
otherwise be entitled.

(d) If Sublessor applies or retains any part of the Security Deposit, then, upon
written demand therefor by Sublessor, Sublessee shall promptly deposit cash with
Sublessor in such amount so that Sublessor shall have the full Security Deposit
on hand at all times during the Term of this Sublease. If Sublessee shall fully
and faithfully comply with all of the terms and provisions of this Sublease, and
provided that no default

 

17

--------------------------------------------------------------------------------

shall have occurred and be continuing hereunder, Sublessor shall return the
unused balance of the Security Deposit, if any, to Sublessee within sixty
(60) days after the Expiration Date and delivery of the Subleased Premises to
Sublessor in accordance with the terms of this Sublease.

(e) In the event that Sublessor, pursuant to an assignment of the Prime Lease,
assigns this Sublease to a third party, Sublessor shall transfer the Security
Deposit to the assignee and Sublessor shall thereupon be released by Sublessee
from all liability for the return of the Security Deposit. Sublessee agrees to
look solely to the new Sublessor for the return of the Security Deposit and it
is agreed that the provisions hereof shall apply to every transfer or assignment
made of the Security Deposit to a new Sublessor. Sublessee further covenants
that it will not assign or encumber or attempt to assign or encumber the
Security Deposit and that neither Sublessor nor its successors or assigns shall
be bound by any such assignment, encumbrance, attempted assignment or attempted
encumbrance.

(f) It is agreed that Sublessee shall have the right, in lieu of the funds
required to be deposited with Sublessor pursuant to Section 21(a) above, to
deposit and maintain with Sublessor as the Security Deposit referred to in this
Sublease, an irrevocable commercial letter of credit in the aggregate amount
from time to time required in Section 21(a), which letter of credit shall be in
the form attached hereto as Exhibit C and issued by a member bank of the New
York Clearinghouse Association or a commercial bank acceptable to Sublessor,
payable upon the presentation by Sublessor to such bank of one or more sight
drafts in form acceptable to Sublessor, without presentation of any other
documents, statements or authorizations, which letter of credit shall provide
(i) for the continuance of such credit for a period of at least one year from
the date of its issuance, (ii) for the automatic extension of such letter of
credit for additional periods of one year from the initial and each future
expiration date thereof (the last such extension to provide for the continuance
of such letter of credit for at least three months beyond the end of the Term of
this Sublease) unless such bank gives Sublessor notice by certified mail, return
receipt requested, postage prepaid, of its intention not to renew such letter of
credit (which notice shall be addressed to Sublessor as provided in this
Sublease) not less than forty-five (45) days prior to the initial or any future
expiration date of such letter of credit and (iii) that in the event such notice
is given by such bank, Sublessor shall have the right to draw on such bank at
sight for the balance remaining in such letter of credit, and hold and apply the
proceeds thereof in accordance with the provisions of this Section 21. Each
letter of credit to be deposited and maintained with Sublessor (or the proceeds
thereof) shall be held by Sublessor as security for the full and faithful
performance and observance by Sublessee of each and every term, covenant,
condition and agreement of this Sublease as provided in this Section 21. If
Sublessor applies or retains any portion or all of the proceeds of the letter of
credit, then, upon written demand Sublessee therefore, shall promptly restore
the amount so applied or retained so that at all times the amount of the letter
of credit shall be in the amount set forth in Section 21(a).

(g) If the Security Deposit shall be in cash, Landlord shall deposit the
Security Deposit into an interest bearing account at a banking organization
selected by

 

18

--------------------------------------------------------------------------------

Landlord. All interest and/or dividends, if any, accruing on the Security
Deposit, less a 1% per annum charge for administrative expense, shall be added
to, held and included within the term Security Deposit and, provided that no
default shall occur and be continuing, shall accrue to the account of Tenant.
Landlord shall not be required to credit Tenant with any interest for any period
during which Landlord does not receive interest on the Security Deposit.

22. Insurance Requirements.

Prior to the Commencement Date, Sublessee shall provide Sublessor with evidence
of insurance, which includes Sublessor as an insured party and otherwise
complies with the requirements of the Prime Lease, except that Sublessee shall
only be obligated to maintain $3,000,000 of general liability insurance so long
as the same is acceptable to Landlord.

23. Sublessor’s Right of Access.

(a) Sublessor reserves for itself and its agents and employees the right to
periodically enter the Subleased Premises (upon reasonable written notice,
except in the case of emergency, and accompanied by a representative of
Sublessee, except in the case of emergency and provided that Sublessee shall
make a representative available to so accompany Sublessor), to inspect the
Subleased Premises, to post notices of non-responsibility and to determine
whether Sublessee is complying with its obligations under this Sublease.

(b) In the event of emergency, Sublessor shall have the right, upon prior
telephonic, fax or e-mail notice to Sublessee, to the extent practicable, to use
any and all reasonable means that Sublessor may deem necessary or proper to open
doors in an emergency, in order to obtain entry to any portion of the Subleased
Premises, provided that Sublessor shall use reasonable efforts to maintain the
security of the Subleased Premises and its contents.

24. Right to Cure Defaults and Damages.

If Sublessee shall at any time fail to make any payment or perform any other
obligation of Sublessee hereunder after any required notice and within the
applicable cure period, if any, then Sublessor shall have the right, but not the
obligation, after two (2) days’ prior written notice to Sublessee, or, in the
event of any emergency, prior telephonic, fax or e-mail notice to Sublessee to
the extent practicable, and without waiving or releasing Sublessee from any
obligations of Sublessee hereunder, to make such payment or perform such other
obligation of Sublessee in such manner and to such extent as Sublessor shall
deem necessary, and in exercising any such right, to pay any incidental costs
and expenses, employ attorneys, and incur and pay reasonable attorneys’ fees.
Sublessee shall pay to Sublessor, upon demand, all sums so paid by Sublessor and
all incidental costs and expenses of Sublessor in connection therewith, together
with interest thereon at the Interest Rate.

 

19

--------------------------------------------------------------------------------

25. Sublessor’s Representations, Warranties and Covenants.

Sublessor represents, warrants and covenants to Sublessee that the following are
true and correct as of the date hereof: (i) a true and correct copy of the Prime
Lease is attached hereto and made a part hereof as Exhibit D, with certain of
the provisions that do not apply to the Sublease redacted, (ii) the Prime Lease
is unmodified and in full force and effect, (iii) Sublessor has received no
written notice from Landlord of default by Sublessor, as Tenant under the Prime
Lease, which remains uncured; and (iv) to the best knowledge of Sublessor,
neither Sublessor nor Landlord is in default in the performance and/or
observance of any material covenant, agreement or condition of the Prime Lease
on either Sublessor’s or Landlord’s part to be performed or observed. Sublessor
shall request that Landlord execute and deliver to Sublessor an estoppel
certificate, substantially in the form annexed to this Sublease as Exhibit F.
Sublessor’s failure to obtain an estoppel certificate executed by Landlord shall
have no effect on this Sublease, which shall continue in full force and effect,
whether or not an estoppel certificate shall have been obtained from Landlord.

26. Intentionally Deleted.

27. Bankruptcy.

(a) If a petition is filed by or against Sublessee for relief under the
Bankruptcy Code, and Sublessee (including for the purposes of this Section,
Sublessee’s successor in bankruptcy, whether a trustee, Sublessee as debtor in
possession or other responsible person) assumes, or assumes and proposes to
assign this Lease pursuant to the provisions of the Bankruptcy Code to any
person or entity which has made or accepted a bona fide offer to accept an
assignment of this Sublease, such assumption or assumption and assignment may
only be made if all of the terms and conditions of this Section 27 are
satisfied.

(b) Conditions to Assumption.

(i) No election by Sublessee to assume this Sublease shall be effective unless
each of the following conditions, which Sublessor and Sublessee acknowledge are
commercially reasonable, have been satisfied, and Sublessor has acknowledged in
writing that: (i) Sublessee has cured, or has provided Sublessor adequate
assurance (as defined below) that within ten (10) days from the date of such
assumption Sublessee will cure all monetary defaults under this Sublease and
within thirty (30) days from the date of such assumption Sublessee will cure all
non-monetary defaults under this Sublease; (ii) Sublessee has compensated, or
has provided to Sublessor adequate assurance that within ten (10) days from the
date of assumption Sublessor will be compensated for any pecuniary loss incurred
by Sublessor arising from the default of Sublessee as recited in Sublessor’s
written statement of pecuniary loss sent to Sublessee; (iii) Sublessee has
provided Sublessor with adequate assurance of the future performance (as defined
below) of each of Sublessee’s obligations under this Lease; and (iv) Sublessee
shall have provided Sublessor at least thirty (30) days prior written notice of
any proceeding concerning the assumption of this Sublease.

 

20

--------------------------------------------------------------------------------

(ii) For purposes of this Section, Sublessor and Sublessee acknowledge that
(A) “adequate assurance” shall mean that the Bankruptcy Court shall have entered
a Final Order authorizing the posting of a letter of credit in the amount of
$78,788.44, or segregating $78,788.44 of cash to be payable to Sublessor, and/or
Sublessee to secure Sublessee’s obligation to Sublessor to cure all monetary
and/or nonmonetary defaults under this Sublease within the time periods set
forth above and (B) “adequate assurance of future performance” shall mean that
Sublessee has and will continue to have sufficient unencumbered assets after the
payment of all secured obligations and administrative expenses to fulfill the
obligations of Sublessee under this Sublease, in addition to the simultaneous
posting of a letter of credit.

(c) Conditions to Assignment. In addition to satisfying the terms and conditions
of Subsection 27(b), Sublessee shall give notice to Sublessor of the proposed
assignment setting forth (1) the name and address of the proposed assignee and
(2) all of the terms and conditions of the offer and proposed assignment.
Sublessee shall also deliver to Sublessor a statement confirming that the
assignee will continue to use the Subleased Premises for the Permitted Use.
Sublessor and Sublessee acknowledge that Sublessor’s asset will be substantially
impaired if the trustee in bankruptcy, debtor or debtor in possession or any
assignee of the Sublease makes any use of the Subleased Premises other than the
Permitted Use. Adequate assurance of future performance of the Sublease shall be
furnished by the proposed assignee, no later than fifteen (15) days after
Sublessee has made or received such offer, but in no event later than ten
(10) days prior to the date on which Sublessee applies to a court of competent
jurisdiction for authority and approval to effect the proposed assignment. The
description of the adequate assurance of future performance of the proposed
assignee in such notice shall include such financial and other information as is
necessary to demonstrate that the financial condition and operating performance
experience of the proposed assignee and its guarantors, if any, is sufficient to
perform in such a manner as to meet and satisfy all obligations under this
Sublease in a timely fashion, and shall be satisfactory to Sublessor in all
other respects. Sublessor shall have the prior right and option, to be exercised
by notice to Sublessee given at any time prior to the date on which the court
order authorizing such assignment becomes a Final Order, to accept an assignment
of this Sublease upon the same terms and conditions, and for the same
consideration, if any, as the proposed assignee, less any brokerage commissions
which may otherwise be payable out of the consideration to be paid by the
proposed assignee for the assignment of this Sublease. If this Sublease is
assigned pursuant to the provisions of the Bankruptcy Code, “adequate assurance
of future performance,” shall require from the assignee a deposit or posting of
a Letter of Credit for the performance of its obligations under this Sublease in
the same amount as required by Section 27(b). Any person to whom or entity to
which this Sublease is assigned pursuant to the provisions of the Bankruptcy
Code shall be deemed without further act or documentation to have assumed all of
Sublessee’s obligations arising under this Sublease on and after the date of
such assignment. Any such assignee shall, upon demand, execute and deliver to
Sublessor an instrument confirming such assumption. No provision of this
Sublease shall be deemed a waiver of Sublessor’s rights or remedies under the
Bankruptcy Code to oppose any assumption and/or assignment of this Sublease, to
require timely performance of Sublessee’s obligations under this Sublease, or to
regain possession of the Subleased Premises if this Sublease has neither been
assumed nor rejected within sixty (60) days after the date of entry of the
Bankruptcy Court’s order for relief.

 

21

--------------------------------------------------------------------------------

(d) Notwithstanding anything in this Sublease to the contrary, all amounts
payable by Sublessee to or on behalf of Sublessor under this Sublease, whether
or not expressly denominated as such, shall constitute “rent” for the purposes
of Section 502(b)(6) of the Bankruptcy Code.

28. Miscellaneous.

(a) This Sublease may not be modified, amended, extended, renewed, terminated or
otherwise modified except by a written instrument signed by both of the parties
hereto.

(b) It is acknowledged and agreed that all understandings and agreements
heretofore had between the parties are merged in this Sublease, which alone
fully and completely expresses their agreement with respect to the subject
matter hereof. This Sublease has been executed and delivered after full
investigation by each of the parties hereto, and neither party hereto has relied
upon any statement, representation or warranty which is not specifically set
forth in this Sublease.

(c) This Sublease does not constitute an offer to sublease the Subleased
Premises to Sublessee and Sublessee shall have no rights with respect to the
subleasing of the Subleased Premises unless and until Sublessor, in its sole and
absolute discretion, elects to be bound hereby by executing and unconditionally
delivering to Sublessee an original counterpart hereof.

(d) Sublessee shall be permitted to use “as is” during the Term of this Sublease
the furniture and equipment owned by Sublessor and existing in the Subleased
Premises (collectively, “Sublessor’s Personal Property”). Sublessor shall not
remove any of Sublessor’s Personal Property from the Subleased Premises between
the date of this Sublease and the Commencement Date. Sublessor makes no
representation or warranty with respect to Sublessor’s Personal Property. On the
Expiration Date, Sublessee shall become the owner of Sublessor’s Personal
Property and on such date, Sublessee, as its expense, shall remove all such
property from the Subleased Premises.

(e) If either party places the enforcement of this Sublease, or any part
thereof, or the collection of any Rent due, or to become due hereunder, or
recovery of the possession of the Subleased Premises in the hands of an attorney
or collection agency, or files suit upon the same, or seeks a judicial
declaration of rights hereunder, the prevailing party shall recover its
reasonable attorneys’ fees, court costs and collection agency charges.
“Prevailing party” within the meaning of this Section 28(e) shall include a
party who dismisses an action for recovery hereunder in exchange for payment of
the sums allegedly due, performance of covenants allegedly breached or
consideration substantially equal to the relief sought in the action.

 

22

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, this Sublease has been duly executed as of the day and year
first above written.

 

SUBLESSOR:

 

PRIMEDIA INC.

By:  

 

Name:   Title:  

SUBLESSEE:

 

NEWTEK BUSINESS SERVICES, INC.

By:  

/s/ Barry Sloane

Name:   Barry Sloane Title:   CEO Sublessee’s federal employer identification
number is: 11-3504638

 

23

--------------------------------------------------------------------------------

EXHIBIT A

Floor Plan of 17th Floor

[ATTACHED HERETO]

 

1

--------------------------------------------------------------------------------

EXHIBIT B

Form of Commencement Date Agreement

COMMENCEMENT DATE AGREEMENT

AGREEMENT made as of the      day of                     , 200    , by and
between PRIMEDIA INC., a Delaware corporation, having an address at 745 Fifth
Avenue, New York, New York 10151, as Sublessor, and NEWTEK BUSINESS SERVICES,
INC., a New York corporation, having an address at 462 7th Avenue, 14th Floor,
New York, New York 10018, as Sublessee.

W I T N E S S E T H:

WHEREAS, Sublessor and Sublessee have entered into an Agreement of Sublease,
dated as of November 10, 2006 (the “Sublease”), pursuant to which Sublessor
subleased to Sublessee certain space in the Building known as and located at
1440 Broadway, New York, New York, as more fully described in the Sublease; and

WHEREAS, Sublessor is the Tenant under that certain lease dated December 31,
1999, (the “Original Lease”) with 1440 Partners, LLC (“Landlord”),
successor-in-interest to 1440 Broadway Partners, LLC, a Delaware limited
liability company, whereby Sublessor leased the entire 18th, 19th and 20th
floors and also by delivery in phases, the entire 17th, 21st and 13th floors
(collectively, the “Original Premises”) in an office building (the “Building”)
commonly known as and located at 1440 Broadway, New York, New York, for a term
expiring on October 31, 2015.

WHEREAS, the Original Lease was amended by letter agreement dated June 15, 2000,
by amendments dated July 13, 2000, May 16, 2001 and June 28, 2002 and by letter
agreements dated March 1, 2004 and July 7, 2006, pursuant to which, among other
things, the entire 14th floor and a portion of the 15th floor were added to the
Original Premises.

WHEREAS, Sublessor and Sublessee wish to confirm the Commencement Date of the
Sublease.

NOW, THEREFORE, the parties confirm as follows:

1. All capitalized items not defined in this Agreement shall have the meanings
ascribed to them in the Sublease.

2. The Term of the Sublease has commenced on                     , 200    , and
such date constitutes the “Commencement Date,” as such term is defined in the
Sublease.

IN WITNESS WHEREOF, Sublessor and Sublessee have respectively executed this
Commencement Date Agreement as of the day and year first above written.

 

1

--------------------------------------------------------------------------------

SUBLESSOR: PRIMEDIA INC., a Delaware corporation By:  

 

Name:   Title:  

SUBLESSEE:

 

NEWTEK BUSINESS SERVICES, INC., a

New York corporation

By:  

/s/ Barry Sloane

Name:   Barry Sloane Title:   CEO

 

2

--------------------------------------------------------------------------------

EXHIBIT C

Form of Letter of Credit

Primedia Inc.

 

                         

Dear                                 :

We hereby establish our Clean Irrevocable Standby Letter of Credit No.
             in your favor for up to the aggregate amount of US             
Dollars ($            ) effective immediately and expiring at our counters at
our close of business on             . This Letter of Credit is given in
connection with a certain Agreement of Sublease dated as of November 10, 2006
between Primedia Inc. and Newtek Business Services, Inc.

Funds are available, from time to time, against presentation of one or more of
your sight draft(s) in the form attached hereto as EXHIBIT 1 attached. The
honoring of any sight draft shall not relieve the undersigned of its liability
to so honor any further sight draft(s); provided, however, that the undersigned
shall, except as provided below, not be obligated to honor any sight draft if
such sight draft, when aggregated with amounts previously drawn under this
Letter of Credit, shall exceed the amount stated above; in which case, only the
balance then existing shall be disbursed pursuant to such sight draft.

It is a condition of this Letter of Credit that it shall be automatically
extended without amendment for additional periods of one (1) year from the
present or future expiration date, unless we notify you in writing by Certified
Mail, return receipt requested, at least forty-five (45) days prior to the then
present expiration date that we elect not to do so. Upon receipt by you of such
notice, you may draw on us at sight for the balance remaining in this Letter of
Credit.

We hereby engage with you that all draft(s) drawn under and in compliance with
the terms of this Letter of Credit will be duly honored upon proper presentation
to:

This Letter of Credit may be transferred any number of times to any transferee
designated by the then beneficiary hereunder. Transfer of this Letter of Credit
shall be effective by the presentation to the undersigned of the original of
this Letter of Credit accompanied by a request designating the transferee. Upon
such presentation, the undersigned shall forthwith effect a transfer of this
Letter of Credit to such designated transferee.

Except as otherwise expressly provided herein, this Letter of Credit is subject
to the Uniform Customs and Practice for Documentary Credits (1993 Revision) of
the International Chamber of Commerce Publication No. 500.

 

By:  

 

Name:   Title:  

 

1

--------------------------------------------------------------------------------

EXHIBIT 1

SIGHT DRAFT

 

Letter of Credit No. :

 

 

Date of Letter of Credit:

 

 

Date of this Draft:

 

 

To the order of Primedia Inc.

 

Pay                                          ($            )

 

At Sight

For value received under Letter of Credit No.                 

The undersigned represents that it is entitled to draw on this Letter of Credit
pursuant to the Agreement of Sublease dated November 10, 2006 between Primedia
Inc. and Newtek Business Services, Inc.

This Draft is payable by wire transfer (to the bank specified by the
beneficiary).

 

Primedia Inc. By:  

 

Name:   Title:  

 

1

--------------------------------------------------------------------------------

EXHIBIT D

The Prime Lease

[ATTACHED HERETO]

 

1

--------------------------------------------------------------------------------

EXHIBIT E

Form of Lease Estoppel Certificate

 

LANDLORD:      1440 PARTNERS, LLC TENANT:      PRIMEDIA INC. PREMISES:      1440
Broadway, New York, New York – Portion of the 17th Floor DATE:     

The undersigned Landlord, as landlord under a certain Lease dated December 31,
1999 and referred to as the Prime Lease (the “Lease”) in the Sublease to be
entered into between the above-referenced Tenant and Newtek Business Services,
Inc. (the “Subtenant”) hereby ratifies the Lease and certifies to the Subtenant
as follows:

 

  1. The term of the Lease commenced on                          and the Tenant
is in full and complete possession of the Premises and has commenced full
occupancy and use of the Premises, such possession having been delivered by the
original Landlord and having been accepted by the Tenant.

 

  2. To Landlord’s knowledge, all obligations and conditions under said Lease to
be performed to date by Landlord or Tenant have been satisfied, free of defenses
and set-offs including all construction work in the Premises.

 

  3. The Lease is in full force and effect and represents the entire agreement
between the parties; to Landlord’s knowledge, there is no existing default on
the part of the Landlord or the Tenant in any of the terms and conditions
thereof and to Landlord’s knowledge no event has occurred which, with the
passing of time or giving of notice or both, would constitute an event of
default; and said Lease has: (initial one)

(    ) not been amended, modified, supplemented, extended, renewed or assigned.

( XX) been amended, modified, supplemented, extended, renewed or assigned as
follows by the following described agreements:

 

     Letter Agreement dated June 15, 2000

     Amendment dated July 13, 2000

     Amendment dated May 16, 2001

     Amendment dated June 28, 2002

     Letter Agreement dated March 1, 2004

     Letter Agreement dated July 7, 2006

 

1

--------------------------------------------------------------------------------

  4. The term of the Lease expires on                         ; and that:
(initial one)

(    ) neither the Lease nor any of the documents listed above in Paragraph 3
(if any) contain an option for any additional term or terms.

(    ) the Lease and/or the documents listed above in Paragraph 3 contain an
option for                          (            ) additional terms of
             years.

 

  5. To Landlord’s knowledge, there is no apparent contamination of the Premises
by hazardous materials.

 

  6. To Landlord’s knowledge, there are no actions, voluntary or involuntary,
pending against the Landlord under the bankruptcy laws of the United States or
any state thereof.

 

  7. This certification is made knowing that the Subtenant is relying upon the
representations herein made.

 

1440 PARTNERS, LLC By:  

 

Typed Name:   Title:   Date:  

 

2