Sublease Agreement Between Southern Union and Activated


                                                                                      Exhibit 10.1

 

SUBLEASE
AGREEMENT

 

BETWEEN

 

SOUTHERN
UNION COMPANY, SUBLESSOR

 

AND

 

ACTIVATED
COMMUNICATIONS, INC., SUBLESSEE

 

     

Building
Address:  767 Fifth
Avenue

                                 
    
New York, New York




 




 




 




 




 




 
































SUBLEASE
AGREEMENT

 

SUBLEASE
AGREEMENT ("Sublease") made as of this 30th day of September, 2004, by and
between SOUTHERN
UNION COMPANY, a
Delaware corporation, with offices at One PEI Center, Wilkes-Barre, PA 18711
("Sublessor"), and ACTIVATED
COMMUNICATIONS, INC., a
Delaware corporation, with offices at 767 Fifth Avenue, New York, New York
("Sublessee").

 

WITNESSETH:

 

WHEREAS,
pursuant to a lease dated August 28, 2001 ("Prime Lease") between Trump 767
Fifth Avenue, LLC, as Landlord (“Landlord”), and Sublessee, as Tenant, Landlord
leased to Sublessee certain space located on the 50th floor
("Premises"), in the building located at 767 Fifth Avenue, New York, New York
("Building");

 

WHEREAS,
the Chairman and majority shareholder of Sublessor, together with other family
members, own the majority of the outstanding shares of the
Sublessee;

 

WHEREAS,
pursuant to a Lease Assignment and Assumption Agreement, dated as of September
30, 2004, between Sublessee and Sublessor, Sublessee assigned all of its right,
title and interest in the Prime Lease to Sublessor (the
“Assignment”);

 

WHEREAS,
the Assignment and this Sublease have been authorized by the Audit Committee of
the Sublessor’s Board of Directors;

 

WHEREAS,
Sublessor desires to sublease to Sublessee and Sublessee desires to sublease
from Sublessor a portion of the Premises, located on the 50th Floor
and shown outlined on the Floor Plan annexed hereto as Exhibit A and made a part
hereof ("Subleased Premises"), on the terms, covenants and conditions
hereinafter provided.

 

NOW,
THEREFORE, Sublessor and Sublessee covenant and agree as follows:

 

1.  Sublease

 

Sublessor
hereby subleases to Sublessee, and Sublessee hereby subleases from Sublessor,
the Subleased Premises.

 

2.  Term

 

The term
("Term") of this Sublease shall commence on the later to occur of (i) October 1,
2004 or (ii) the day of the receipt of Landlord’s written consent to this
Sublease pursuant to Section 18 hereof ("Commencement Date") and shall expire on
June 29, 2014 ("Expiration Date"), unless sooner terminated pursuant to any
provision set forth herein or in the Prime Lease. Base Rent

 

3.  Base
Rent

 

Sublessee
shall pay Sublessor, as rent for the Subleased Premises, commencing on the
Commencement Date and ending on the Expiration Date, the annual sums set forth
on Schedule “A” attached hereto ("Base Rent"), in equal monthly installments, in
advance on the first day of each month, without setoff or deduction whatsoever,
except that Sublessee shall pay the first monthly installment on the execution
hereof (the rental payment for the first month following the Commencement Date
shall be proportionately adjusted if the Commencement Date is other than on the
first of the month).

 

4.  Additional
Rent

 

In
addition to the Base Rent under paragraph 3 above, Sublessee shall pay
Sublessor, as additional rent, within thirty (30) days of demand, without any
set-off, abatement or reduction whatsoever, set percentage of all Additional
Rent (as such term is defined in the Prime Lease) arising during the Term and
paid by Sublessor to the Landlord) set forth on Schedule “B” attached hereto
(“additional rent” and together with the Base Rent, “Rent”)”. 

 

5. Rent
Payments

 

All Base
Rent, additional rent and other charges payable by Sublessee to Sublessor shall
be forwarded to:

 

Southern
Union Company

One PEI
Center

Wilkes-Barre,
PA 18711

Attn:
Controller

 

6.
 Late
Charges

 

In the
event that Sublessee shall fail to pay Base Rent or any additional rent within
ten (10) days after its due date, Sublessee shall pay an automatic late charge
to Sublessor of $.05 for each dollar overdue. 

 

7.
 Use

 

Sublessee
shall use and occupy the Subleased Premises solely for the purposes permitted
under, and in a manner consistent with, the provisions of the Prime
Lease.

 

8.
 Condition
of Subleased Premises

 

Sublessee
is hiring the Subleased Premises in "as is" condition. In making and executing
this Sublease, Sublessee has not relied upon or been induced by any statements
or representations of Sublessor with respect to the physical condition of the
Subleased Premises. 

 

9. Subordination

 

Sublessor
and Sublessee agree that this Sublease is subject and subordinate to all of the
terms, covenants and conditions of the Prime Lease, and to the matters to which
the Prime Lease is subordinate.

 




 

10. Incorporation
of Prime Lease Terms

 

The
terms, covenants and conditions contained in the Prime Lease are hereby
incorporated herein and shall, as between Sublessor and Sublessee, constitute
the terms, covenants and conditions of this Sublease, except to the extent
otherwise set forth in this Sublease. As between the parties hereto, Sublessor
agrees to observe and perform the terms, covenants and conditions on its part to
be observed and performed hereunder and Sublessee agrees to be bound by the
provisions of the Prime Lease and to keep, observe and perform the terms,
covenants and conditions on its part to be kept, observed and performed
hereunder as well as the terms, covenants and conditions to be observed and
performed by Sublessor as Tenant under the Prime Lease with respect to the
Subleased Premises. The remedies of the parties, as Sublessor and Sublessee
hereunder, shall be the same as the respective remedies of the Landlord and the
Tenant under the Prime Lease with respect to the Subleased Premises. Sublessee
shall in no case have any rights with respect to the Subleased Premises greater
than Sublessor's rights as Tenant under the Prime Lease.

 

Unless,
specifically provided for on Schedule “C”, attached
hereto, or to
the extent inconsistent with this Sublease, all of the terms, covenants,
conditions and provisions in the Prime Lease are hereby incorporated in, and
made a part of this Sublease and such rights and obligations as are contained in
the Prime Lease are hereby imposed upon the respective parties hereto to the
extent the same relate to the Subleased Premises and Sublessee's use of the
Subleased Premises; this Sublease being substituted for the term "Lease" set
forth in the Prime Lease and the Sublessee herein being substituted for the
Tenant named in the Prime Lease, the Sublessor being substituted for the
Landlord named in the Prime Lease and the “Commencement Date” as defined herein
being substituted for the “Commencement Date” as defined in the Prime Lease;
provided, however, that the Sublessor herein shall not be liable for any
defaults by, or obligations of, Landlord except as specifically set forth herein
and any reference to "Landlord" in the Prime Lease with respect to the
furnishing of services, utilities, repairs and facilities shall be deemed to
refer to Landlord rather than Sublessor. Notwithstanding the foregoing, to the
extent of any conflict between the Prime Lease and this Sublease, this Sublease
shall, as between Sublessor and Sublessee, control.

 

11. Indemnification

 

Sublessee
shall not do or permit to be done any act or thing in or with respect to the
Subleased Premises which will constitute a breach or violation of any of the
terms, covenants or conditions of the Prime Lease which pertain to the Subleased
Premises. Sublessee shall indemnify, defend and hold Sublessor harmless from and
against all claims, losses, costs, expenses (including reasonable attorneys’
fees), damages and liability, which Sublessor may pay or incur by reason of (i)
any breach or default by Sublessee under this Sublease or under Landlord's
Consent to Sublease, (ii) any work done in or to the Subleased Premises by
Sublessee or its servants, employees or contractors, and (iii) any negligent act
or omission or other fault on the part of Sublessee or its servants, employees,
agents, contractors, invitees or licensees relating to the Subleased Premises,
except to the extent caused by Sublessor or its officers, directors,
stockholders, representatives, agents, employees, contractors or
invitees.

 

In the
event of a material default by Sublessor under the Prime Lease which could cause
a termination under the Prime Lease (assuming Sublessee is not in material
default under this Sublease), Sublessor shall remedy such default in the manner
and within the time period set forth in the Lease.

 

12.  Liability
Insurance

 

At all
times during the Term, at its own cost and expense, Sublessee shall provide and
keep in force for the benefit of Sublessee, Sublessor and Landlord,
comprehensive general liability insurance against claims for bodily injury,
death or property damage occurring in or about the Subleased Premises, with
terms and limits as specified in the Prime Lease. Said insurance shall include
Sublessee, as insured, and Sublessor and Landlord, as additional insureds. A
Certificate of such insurance shall be delivered to Sublessor promptly after the
signing of this Sublease. Said policy shall contain a provision whereby the same
cannot be materially changed or canceled unless Sublessor and Landlord are given
at least thirty (30) days’ prior written notice of such material change or
cancellation. Sublessee shall obtain and pay for renewals of such insurance from
time to time at least thirty (30) days before the expiration thereof, and
Sublessee shall promptly deliver certificates thereof to Sublessor. Any
insurance required to be provided by Sublessee pursuant to this Sublease may be
provided by blanket insurance covering the Subleased Premises and other
properties of Sublessee upon condition that (i) the amount of the insurance
allocated to the Subleased Premises shall be such as to furnish in protection
the equivalent of separate insurance in the amounts herein provided, (ii) such
blanket insurance complies with all of the other requirements of this Sublease
and the Prime Lease and is acceptable to Sublessor and Landlord, and (iii)
certificates of such insurance are delivered to Sublessor and Landlord.
Sublessee shall obtain and pay for insurance on its equipment, furnishings,
furniture and other personal property in the Subleased Premises.

 

13. 
Restriction on Assignments, etc.

 

Sublessee
shall not, by operation of law or otherwise, assign, mortgage, pledge or
encumber this Sublease, or underlet or suffer or permit all or any part of the
Subleased Premises to be used or occupied by others, without the prior written
consent of Landlord (to the extent and in the manner required under the Prime
Lease and Landlord's Consent to Sublease) and Sublessor in each instance.
Sublessor’s consent to an assignment or sublet shall not be unreasonably
withheld.

 

14. Alterations

 

Sublessee
shall not perform any additions, alterations and improvements to the Subleased
Premises, or any part thereof, without the prior written consent of Landlord (to
the extent and in the manner required under the Prime Lease) and Sublessor (not
to be unreasonably withheld).

 

15.
 Landlord's
Consent

 

Except as
otherwise specifically provided herein, whenever in this Sublease, Sublessee is
required to obtain Sublessor's consent or approval, Sublessee understands that
Sublessor may be required by the terms of the Prime Lease to first obtain the
consent or approval of Landlord. If Landlord should refuse such consent or
approval and if such consent is required under the Prime Lease, Sublessor shall
be released of any obligation to grant its consent or approval whether or not
Landlords’ refusal, in Sublessee's opinion is arbitrary or unreasonable or
improper under the Prime Lease. Sublessee agrees that Sublessor shall not be
required to dispute any determinations or other assertions or claims of Landlord
regarding the obligations of Sublessor under the Prime Lease for which Sublessee
is or may be responsible under the terms of this Sublease. Should Sublessor
elect not to dispute any such determinations, assertions or claims by Landlord,
Sublessor hereby grants Sublessee such right as Sublessor would have had to
dispute the same in its own name, without Sublessor's consent, and the right to
resolve such disputes to its own satisfaction, provided that Sublessee shall
bear any and all costs and expenses of any such dispute and/or settlement and
shall indemnify, defend 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
and provided further that Sublessor shall not be bound without its consent (not
to be unreasonably withheld) by any settlement, agreement or resolution reached
by Sublessee and Landlord in regard to any such dispute, or by any decree,
judgment or penalty resulting therefrom.

 

16.
 Notices

 

Any
notice, demand, bill, invoice, statement or communication which either Sublessor
or Sublessee may desire or be required to give to the other in connection with
this Sublease shall be in writing and shall be deemed to have been sufficiently
given if made in person or if sent by (i) First Class Mail, (ii) by personal
delivery, or (iii) a nationally recognized overnight courier, such as Airborne
Express, Federal Express or United Parcel, to such other party at the following
addresses:

 

To
Landlord: Trump 767
Fifth Avenue LLC

725 Fifth
Avenue

New York,
New York 10022

 

To
Sublessor: Southern
Union Company

One PEI
Center

Wilkes-Barre,
PA 18711

 

Attn:
Office of General Counsel

 

To
Sublessee: Activated
Communications, Inc.

767 Fifth
Avenue

New York,
New York 10022

 

Each such
bill, invoice, statement, notice or communication shall be deemed to have been
delivered on the date when the original of same is received.

 

17.
 Services

 

Sublessee
shall be entitled to receive all of the services pertaining to the Subleased
Premises which Sublessor is entitled to receive under the Prime Lease. Sublessee
recognizes that such services are to be supplied by Landlord and not by
Sublessor. In the event that Landlord shall fail to supply such services or
shall refuse to comply with any of the provisions of the Prime Lease insofar as
they affect Sublessee's occupancy of the Subleased Premises, Sublessor shall, at
the written request of Sublessee, request Landlord to so comply and if Landlord
shall fail or refuse to do so, then to the extent permitted by the terms of the
Prime Lease, Sublessee shall have the right to exercise, in its own name and in
the name of Sublessor, all of the rights to enforce performance on the part of
Landlord as are available to Sublessor, provided that the same shall be without
cost, expense or liability to Sublessor and Sublessee shall indemnify, defend
and hold Sublessor harmless in accordance with Section 21 herein. 18.
Landlord's
Approval

 

This
Sublease is subject to the approval of Landlord and shall have no effect until
Landlord shall have given its written consent to this Sublease. Sublessor shall
use its good faith efforts to obtain such consent. If Landlord’s consent (and
the consent of any Superior Lessee or Superior Mortgagee whose consent is
required) is not received within [one
hundred twenty (120)] days
from the date hereof, Sublessee or Sublessor may terminate this Sublease by
notice to the other. If Landlord shall refuse to consent to this Sublease,
Sublessor shall not be obligated to take any legal action or otherwise expend
any funds to obtain such consent, and this Sublease shall be deemed null and
void and of no force and effect.

 

18.
 
Brokerage

 

Sublessee
warrants and represents to Sublessor that in connection with this Sublease,
Sublessee has dealt with no brokers and Sublessee shall indemnify, defend and
hold Sublessor harmless (including the payment of attorney's fees) from any
claim of any broker that Sublessee had dealings with concerning this Sublease or
from any claim by Landlord relating to any breach of the foregoing
representation and warranty. 

 

19.
 Surrender
of Subleased Premises; Holding Over

 

(a)  Upon the
Expiration Date or any sooner termination date of this Sublease, Sublessee
covenants to deliver up and surrender possession of the Subleased Premises to
Sublessor in the condition in which they were delivered to Sublessee by
Sublessor, normal wear and tear excepted. 

 

(b)  Upon the
failure of Sublessee to surrender possession of the Subleased Premises to
Sublessor upon the Expiration Date or any sooner termination date of this
Sublease, Sublessee shall pay to Sublessor an amount equal to 150% of the then
current Base Rent and Additional Rent required to be paid by Sublessee under
this Sublease, applied to any period in which Sublessee shall remain in
possession after the Expiration Date or sooner termination date of this
Sublease. Acceptance by Sublessor of Base Rent after the Expiration Date or
earlier termination date shall not constitute a consent to a holdover hereunder
or result in a renewal. The foregoing provisions of this paragraph are in
addition to and do not affect Sublessor's right of reentry or any other rights
of Sublessor hereunder or otherwise provided by law. 

 

20. Repairs;
Services

 

In
addition to Section 17 hereof, Sublessee acknowledges that all services,
repairs, maintenance, restorations, equipment and access to and for the
Subleased Premises and the Building to be provided or performed by the Landlord
under the Prime Lease and any insurance coverage of the Building or
indemnification obligation of Landlord, will in fact be provided by Landlord and
Sublessor shall have no obligation during the term of this Sublease to provide
any such services, repairs, restorations, equipment, access, insurance or
indemnification. Sublessee agrees to look solely to Landlord for the furnishing
of such services, repairs, restorations, equipment, access, insurance and
indemnification with respect to the Subleased Premises. Sublessor shall in no
event be liable to Sublessee nor shall the obligations of Sublessee hereunder be
impaired or the performance thereof excused because of any failure or delay on
Landlord's part in furnishing such services, repairs, restorations, equipment,
access, insurance or indemnification. If Landlord shall default in any of its
obligations to Sublessor with respect to the Building or Subleased Premises,
Sublessee shall be entitled to participate with Sublessor in the enforcement of
Sublessor's rights against Landlord, but Sublessor shall have no obligation to
bring any legal action or proceeding to enforce Sublessor's rights against
Landlord. If, after written request from Sublessee, Sublessor shall fail or
refuse to take appropriate action for the enforcement of Sublessor's rights
against Landlord with respect to the Subleased Premises within a reasonable
period of time considering the nature of Landlord's default, Sublessee shall
have the right to take such action in its own name and for that purpose and only
to such extent in accordance with the terms of this Sublease, all of the rights
of Sublessor under the Prime Lease hereby are conferred upon and assigned to
Sublessee and Sublessee hereby is subrogated to such right to the extent that
the same shall apply to the Subleased Premises. If any such action against
Landlord in Sublessee's name shall be barred by reason of lack of privity,
nonassignability or otherwise, Sublessee may take such action in Sublessor's
name, provided that Sublessee hereby agrees that Sublessee shall indemnify,
defend and hold Sublessor harmless from and against all liability, loss, damage
or expense, including, with limitation, reasonable attorneys’ fees, which
Sublessor shall suffer or incur by reason of such action.

 

21.
 Leasehold
Improvements

 

Notwithstanding
the Assignment and anything to the contrary set forth herein, Sublessee shall
retain all right, title and interest in all leasehold improvements, furniture
and equipment (including all depreciation and other tax related aspects thereof)
that were directly or indirectly purchased or otherwise funded by the Sublessee,
to the extent permitted by the Prime Lease.

 

22.
 Miscellaneous

 

(a) This
Sublease shall be binding upon and inure to the benefit of Sublessor and
Sublessee and their respective successors and permitted assigns.

 

(b) If
the Prime Lease shall be terminated for any reason, other than Sublessor's
default under the Prime Lease, during the term hereof, then and in that event,
this Sublease shall thereupon automatically terminate and Sublessor shall have
no liability to Sublessee by reason thereof, and Sublessee shall succeed to
Sublessor's rights relating to an improper termination by Landlord in connection
with the Subleased Premises.

 

(c) This
Sublease constitutes the entire agreement between the parties and all
representations and understandings relating to the subject matter hereof have
been merged herein.

 

(d) This
Sublease may not be changed orally, but only by an agreement in writing signed
by the party against whom enforcement of any waiver, charge, modification or
discharge is sought.

 

(e) This
Sublease may be executed in one or more counterparts, all of which taken
together shall constitute a single agreement.

 





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

 

SUBLESSOR:

 

SOUTHERN
UNION COMPANY

 

By:  /s/
George L. Lindemann

 

Name:
George L. Lindemann

 

Title:
Chairman & CEO

 

SUBLESSEE:

 

ACTIVATED
COMMUNICATIONS, INC.

 

By:
/s/ M. Schiehle

 

Name: M.
Schiehle

 

Title:
Corporate Secretary