Preview
FILED: KINGS COUNTY CLERK 08/15/2016 05:28 PM INDEX NO. 510844/2016
NYSCEF DOC. NO. 31 RECEIVED NYSCEF: 08/15/2016
SUBLEASE
dated as of
August 1, 2007
between
Lundy's Management Corp., Sublandlord
and
Cherry Hill Gourmet, Inc., Subtenant
{10385698:10)
Table of Contents
1. Definitions and Basic Terms 1
2. Demise; Term; Permitted Use 5
3. Rents. 7
4. Condition of the Sublease Premises 12
5. Subordination to and Incorporation of the Overlease 12
6. Insurance and Indemnification 16
7. Covenant of Quiet Enjoyment 17
8. Assignment and Subsubletting 17
9. Electricity 18
10. Alterations 18
11. [Reserved]
12. Security Deposit 19
13. Notices 20
14. Broker 20
15. Overlandlord Consent 20
16. Miscellaneous 21
List of Exhibits
A Sublease Premises
B Landlord's Estimate
C Overlease
D Exclusions from Incorporated Provisions
E Method of Charging for Electricity
F Included Personal Property
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SUBLEASE
dated as of the Sublease Date between Sublandlord and Subtenant
WITNESETH:
WHEREAS Sublandlord is now the tenant under the Overlease which demises the Property (the
"Overlease Premises"); and
WHEREAS Sublandlord desires to sublease to Subtenant, and Subtenant desires to sublease from
Sublandlord, the Sublease Premises on the terms and conditions contained herein;
NOW, THEREFORE, in consideration of the mutual covenants herein contained, Sublandlord and
Subtenant agree as follows:
1. Definitions and Basic Terms
Set forth below are certain definitions and basic terms of this Sublease.
1.1. Sublease Date August 1, 2007
1.2. Sublandlord Lundy's Management Corp.
13. Subtenant Cherry Hill Gourmet, Inc.
1.4. Overlandlord the landlord under the Overlease.
L5. Overlease that certain lease dated March 9, 1994 originally between
Sheepshead Restaurant Associates, Inc., as landlord,
and Lundy's Management Corp., as tenant, and as hereafter
amended.
1.6. Incorporated all of the provisions of the Overlease except for those listed on
Provisions Exhibit D hereto.
1.7. Property the "Leased Premises" as defined in the Overlease.
1.8. Sublease Premises the portion of the Overlease Premises shown on ExhihiLA hereto.
The Sublease Premises is also sometimes referred to herein as the
"Demised Premises".
1.9. Expiration Date The twentieth anniversary of the first day of the first Rental Lease
Year.
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1.10. Sublease Base $24.00 per rentable square foot during the first Rental Lease Year;
Rental Rate $26.00 per rentable square foot during the second Rental Lease
Year; $27.00 per rentable square foot during the third Rental Lease
Year; $28.00 per rentable square foot during the fourth Rental
Lease Year; $29.00 per rentable square foot during the fifth Rental
Lease Year; $30.00 per rentable square foot during the sixth Rental
Lease Year; $31.00 per rentable square foot during the seventh
Rental Lease Year; $32.00 per rentable square foot during the
eighth Rental Lease Year; $33.00 per rentable square foot during
the ninth Rental Lease Year; $34.00 per rentable square foot
during the tenth Rental Lease Year; and $35.00 per rentable square
foot during the eleventh Rental Lease Year. During each Rental
Lease Year thereafter, and until the end of the twentieth Rental
Lease Year, the Sublease Base Rental Rate shall be 102% of the
Sublease Base Rental Rate during the prior Rental Lease Year.
For example, the Sublease Base Rental Rate for the twelfth Rental
Lease Year shall be $35.70 per rentable square foot. In the case of
each Rental Lease Year, the Sublease Base Rental Rate shall be
multiplied by Sublease Premises Rentable Area (i.e., the rentable
square footage of the Sublease Premises) to determine the Base
Rent that is payable during such Rental Lease Year. The Sublease
Base Rental Rate does not include a charge for electricity.
1.11. Subtenant's 31.33% per cent, subject to Section 3 14 hereof.
Proportionate
Share
1.12. Sublease Premises 14,100 rentable square feet. Sublandlord shall not be deemed to
Rentable Area have represented the accuracy of the Sublease Premises Rentable
Area.
1.13. Real estate taxes
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1.13.1. Real means the sum of (i) the real estate taxes and assessments, Business Improvement
Estate District taxes, charges and assessments, and special assessments, imposed upon
Taxes the Property including all buildings thereon (collectively called the "Building")
and the "Land" (as defined in the Overlease), and any rights or interests
appurtenant thereto, during any Tax Year and (ii) reasonable attorneys' fees, court,
or other administrative costs and disbursements, in connection with any Real
Estate Taxes. If, at any time during the term of this Sublease, the methods of
taxation prevailing as of the date of this Sublease shall be altered so that, in lieu of,
or as an addition to, or as a substitute for, the whole or any part of the real estate
taxes, assessments, levies, impositions or charges now levied, assessed or
imposed, there shall be levied, assessed or imposed a tax, assessment, levy,
imposition or charge wholly or partially as a capital levy, or on the rents, licenses
or other charges received with respect to the Overlease Premises, the Land or the
Building, then all such taxes, assessments, levies, impositions or charges payable
shall be deemed to be included within the term "Real Estate Taxes" for the
purposes hereof. If any special assessment is levied against the Overlease
Premises for an improvement to the Overlease Premises by any governmental unit,
and if Sublandlord has the right to elect to require that such special assessment be
paid in a number of installments, then Sublandlord agrees to exercise its right to
require that such special assessment be paid in the maximum number of
installments. Nothing contained herein shall require Subtenant to pay any general
income tax, franchise tax, corporate transfer tax, estate tax or gift tax imposed
generally, rather than solely on a person as an owner of the Land or Building, or any
developmental impact fee arising as the result of any development of any portion of
the Overlease Premises other than the Sublease Premises, or any mortgage recording,
stamp, or transfer taxes payable in connection with the mortgaging, encumbrancing,
transfer, sale or lease of the Land or Building or any stock of or interest in Owner, or
any portion thereof or interest therein. Taxes and assessments which are deemed
Real Estate Taxes by reason of a change in the method of taxation (as provided
above in this paragraph) shall be so included only if imposed solely on real property
owners or solely on commercial real property owners and only to the extent that such
taxes and assessments would be payable by the owner of the Building if the Building
were the sole property of such owner and the income from the Building were the sole
income of such owner. A copy of the tax bill of The City of New York or other
taxing authority imposing Real Estate Taxes on the Property, the Land or the
Building or any part thereof shall be sufficient evidence of the amount of Real
Estate Taxes. Notwithstanding the fact that the aforesaid Additional Rent is
measured by Real Estate Taxes, such amount is Additional Rent and shall be paid
by Subtenant as provided herein regardless of the fact that Subtenant may be
exempt, in whole or in part, from the payment of any Real Estate Taxes for any
reason whatsoever.
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1.13.2. Tax shall mean each twelve (12) month fiscal period commencing on July 1 and ending
Year on June 30 of the following year, any portion of which fiscal period occurs during
the term of this Sublease.
1.13.3. Tax shall mean the Subtenant's Proportionate Share of the amount of the Real Estate
Payment Taxes payable for each Tax Year (or portion thereof) occurring either during the
term of this Sublease or thereafter until the date the Subtenant surrenders
possession of the Sublease Premises in accordance with this Sublease. See Section
3.7 of this Sublease.
1.14. Expenses.
1.14.1. Expenses All of Sublandlord's reasonable expenses in connection with insurance, wages
and salaries (including fringe benefits, vacations, sick days, and payroll taxes)
for one employee (who is a superintendent), and utilities for common areas at
the Overlease Premises relating in any such case to the Property, the Building or
the Land, and any property adjacent thereto that is used for ingress or egress to
or from the Property or that is otherwise related to the Property (including,
without limitation, sidewalks, walkways, parking areas).
1.15. Lease Year Each one year period (or portion thereof, in the case of any
premature termination of the term of this Lease) during the term of this Sublease
commencing on the Commencement Date or any anniversary thereof. "Rental
I ease Year" shall mean each calendar year (or portion thereof, in the case of any
premature termination of the term of this Lease) during the term of this Sublease,
commencing on January 1, 2008, or any anniversary thereof
1.16. Method of as described on ExbibitE hereto.
Charging for
Electricity
1.17. Included Personal the items, if any, listed on Exhibit F hereto.
Property
1.18. Personal Property None
Rent
1.19. Required Security $84,600.00
Deposit Amount
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1.20. Recognized Broker None
1.21. this Sublease this Agreement of Sublease, including the Incorporated Provisions as
incorporated herein. The terms "herein," "hereunder", etc. refer to this
Agreement of Sublease, including the Incorporated Provisions as incorporated
herein.
2. Demise; Term; Permitted Use
2.1. Sublandlord hereby subleases to Subtenant, and Subtenant hereby hires from Sublandlord, the
Sublease Premises upon and subject to the terms and conditions hereinafter set forth.
2.2. The term of this Sublease shall commence on the first date (the "Commencement Date") on which
all of the following shall have occurred:
2.2.1. Overlandlord shall have consented hereto in accordance with Section 15 below;
2.2.2. all occupants of the Sublease Premises, if any, shall have vacated the same; and
2.2.3. either (a) Sublandlord shall have notified Subtenant that the foregoing conditions have been
satisfied, or (b) Subtenant shall have commenced to occupy the Sublease Premises (provided
that, for the purpose of this Sublease, cleaning by Subtenant in order to prepare the Sublease
Premises for occupancy shall not be deemed to be occupancy by Subtenant).
If Subtenant shall take occupancy of the Sublease Premises prior to the Commencement Date, such
occupancy shall be subject to all of the terms and conditions of this Sublease, including the
obligation to pay rent. The provisions of this Section 2.2 shall be regarded as an "express provision
to the contrary" within the meaning of Section 223-a of the Real Property Law.
2.3. If either party hereto shall so request, the parties hereto shall execute and deliver an instrument
confirming the Commencement Date, but the failure of either party to execute and deliver such
instrument shall not affect the Commencement Date.
2.4. The term of this Sublease shall expire on the Expiration Date or on such earlier date upon which
such term shall expire or be terminated pursuant to any of the provisions of this Sublease or pursuant
to law.
2.5. Notwithstanding anything to the contrary in this Sublease, in no event may Subtenant use the
Sublease Premises for any purpose that is not expressly permitted under the Overlease or by
applicable laws. Subject to the foregoing, and subject to the following sentences of this paragraph,
the Subtenant agrees that the Sublease Premises shall be used and occupied only as (I) an "eating or
drinking place" pursuant to the New York City Zoning Resolution (provided that any outdoor table
service or musical entertainment shall also be subject to the Sublandlord's approval, which shall not
013385698:m5
be unreasonably withheld or delayed), or (2) for such other use that is permitted by applicable laws,
subject to the Sublandord's approval, which shall not be unreasonably withheld, provided, however,
before commencing to use the Sublease Premises for any purpose other than as permitted by clause
(1) above in this sentence, the Subtenant shall deliver to Sublandlord, at least thirty (30) days before
the Subtenant commences using the Sublease Premises for such use, A) prior written notice
describing such proposed use in reasonable detail, and B) reasonable evidence of the legality of such
use (including, without limitation, a legal opinion or letter from an architect, that is reasonably
satisfactory to Sublandlord, and that confirms such use is legally permitted); and the Subtenant shall
not use the Sublease Premises for any other purpose. Without expanding the specificity of the
preceding sentence, in no event shall the Sublease Premises be used for any of the following: (1) a
banking, trust company, or safe deposit business, (2) a savings bank, a savings and loan association,
or a loan company, (3) the sale of travelers' checks and/or foreign exchange, (4) a stock brokerage
office or for stock brokerage purposes, (5) photographic reproductions and/or offset printing, (6) an
employment or travel agency or airline ticket counter, (7) a school or classroom, (8) medical
(including, without limitation, abortion clinic, dental, psychiatric or family planning) offices, (9)
conduct of an auction, (10) gambling activities, (11) conduct of obscene, pornographic or similar
disreputable activities, (12) offices of an agency, department or bureau of the United States
Government, any state or municipality within the United States or any foreign government, or any
political subdivision of any of them, (13) offices of any charitable, religious, union or other not-for-
profit organization, or (14) offices of any tax exempt entity within the meaning of Section 168(h)(2)
of the Internal Revenue Code of 1986, as amended, or any successor or substitute statute, or rule or
regulation applicable thereto. Subtenant covenants that it shall not permit or conduct any obscene
performance, of which it has or should have knowledge, on the Sublease Premises or permit the
same to be used for any obscene or pornographic purposes or activities of which it has or should
have knowledge, including, without limitation, the sale or distribution of any obscene or
pornographic material. The terms "obscene", "material" and "perfonnance" shall be defined for
purposes of this covenant as they are defined in Section 235.00 of the New York Penal Law, as the
same may be amended from time to time. Subtenant further covenants that it shall not operate a
"physical culture" establishment on the Sublease Premises, except for a health club that promotes
exercise associated with weight training aerobics or other activities common at first-rate health clubs
located in the New York City area. Subtenant covenants that it shall not use or occupy the demised
Sublease Premises, and shall not knowingly permit or suffer it to be used or occupied, for the
purpose of performing any abortions or providing any professional counseling or advice advocating
abortions or family planning and it shall not place, permit or suffer to be placed, any signs or
advertising relating to abortions or family planning on or about the Sublease Premises, to the extent
that it knows or should know of any such prohibited uses or occupancies. Subtenant shall take all
steps necessary to ensure that its employees, agents, invitees and guests do not loiter in or near the
Building or adjacent plazas, and that in entering and exiting the Sublease Premises the Subtenant's
employees, agents; guests and invitees do not make unreasonable noise or commotion. Subtenant
shall not at any time use or occupy the Sublease Premises, or suffer or permit anyone to use or
occupy the Sublease Premises, or do anything in or about the Sublease Premises, or suffer or permit
{10385698:106
anything to be done in or about, brought into or kept or about the Sublease Premises, which in any
manner in the sole but reasonable discretion of Sublandlord (i) violates the certificate of occupancy
for either the Sublease Premises, if any, the Building, or the Property, or any part thereof, or any
rules or regulations specified in Exhibit r hereto, or any other reasonable rules and regulations
promulgated by Sublandlord from time to time, (ii) causes or is likely to cause injury to the Sublease
Premises, the Building, the Property, or any equipment, facilities or systems therein; (iii) constitutes
a violation of laws; (iv) impairs the proper and economic maintenance, operation and repair of the
Building, the Property, and/or its equipment, facilities or systems; (v) unreasonably annoys or
disturbs other subtenants, owners or occupants of the Property or any part thereof; (vi) constitutes a
nuisance, public or private, (vii) makes unobtainable from reputable insurance companies authorized
to do business in New York State any fire insurance with extended coverage, or liability, elevator,
boiler or other insurance, at standard market rates, required to be furnished by Sublandlord under the
terms of any mortgages covering the Property or any interest therein; (viii) discharges objectionable
fumes, vapors or odors into the Building's flues or vents or the outside of the Building or otherwise
in such manner as may offend the public or other subtenants, owners or occupants of the Building or
the Property or any part thereof; or (ix) creates excessive floor loads. Subtenant covenants and
agrees that, promptly following the date hereof, Subtenant, at its sole cost and expense, shall take all
necessary steps, and use commercially reasonable efforts, to procure the required license(s) and/or
permit(s) required for the sale of alcoholic beverages for on-premises consumption on the Sublease
Premises (the "Liquor License"). Provided that Subtenant shall have procured (and furnished to
Sublandlord a true copy of) the Liquor License, then Subtenant shall have the right to sell such
alcoholic beverages for on-premises consumption, on the Sublease Premises, as part of its restaurant
business. Sublandlord makes no representation or warranty that the aforesaid permits and/or licenses
will be issued, and Sublandlord shall not be obligated to incur any expenditures in connection
therewith. Subtenant acknowledges that nothing herein contained is intended or shall be deemed to
make this Sublease, or Subtenant's obligations hereunder, subject to or conditioned upon Subtenant
obtaining the Liquor License. Subtenant shall pay all of Sublandord's reasonable expenses in
connection with the Liquor License. Subtenant shall keep all permits and licenses required by public
health and governmcntal agencies of the City of New York and the State of New York current,
properly protected, posted and readily available for inspection.
3. Rents
3.1. Subtenant shall pay to Sublandlord rent ("Base Rent") at the rate per annum equal to the Sublease
Base Rental Rate (multiplied by the rentable square footage of the Sublease Premises), payable in
equal monthly installments in advance on the first day of the first Rental Lease Year and on the first
day of each month thereafter, pro-rated for any partial month, except as follows. Notwithstanding
the foregoing, the Subtenant shall not be obligated to pay the monthly installment of Base Rent for
January, 2009, or the monthly installment of Base Rent for February, 2009, if the Subtenant is not in
default (after all applicable grace or notice periods) at the time such monthly installment of Base
Rent would otherwise have accrued pursuant to the provisions of this Sublease other than this
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sentence. Upon execution of this Sublease, Subtenant shall make an advance payment of one
month's Base Rent to be applied to the first full month's Base Rent. Since the rentable square
footage of the Sublease Premises is 14,100 rentable square feet, therefore the Base Rent for the
Sublease Premises is accordingly $338,400 per annum for the first Rental Lease Year, subject to the
following.
3.2. Commencing on the first day of the first Rental Lease Year, Subtenant shall pay to Sublandlord
additional rent equal to Subtenant's Proportionate Share of all amounts payable by Sublandlord
attributable to Real Estate Taxes, subject to the other provisions of this Sublease. With respect to
each Tax Year occurring in whole or in part during the term of this Sublease (and thereafter until
Subtenant surrenders possession of the Sublease Premises in accordance with this Sublease),
Subtenant shall pay to Sublandlord the Tax Payment in the manner as described in this Sublease. At
any time after the date which is thirty (30) days prior to the commencement of each Tax Year,
Sublandlord may furnish to Subtenant a written statement (a "Tax Statement") setting forth the
amount of Real Estate Taxes for such Tax Year, and the amount of the Tax Payment for such Tax
Year. Subtenant shall pay the Tax Payment for each such Tax Year to Sublandlord as Additional
Rent in one annual installment within ten (10) days after receipt by Subtenant of such Tax Statement,
or, at Subtenant's option, Subtenant may pay the Tax Payment to the Sublandlord in two equal
installments, and each such installment shall be payable to Sublandlord not later than the 20th day
before the corresponding installment of Real Estate Taxes that is payable for such Tax Year;
provided, however, notwithstanding the above, if Sublandlord requests, Subtenant shall pay, to
Sublandlord, Subtenant's Tax Payment as reasonably estimated by Sublandlord from time to time in
monthly installments, in advance, on the first day of each calendar month or other period. If
Sublandlord requests or revises the installments of Subtenant's Tax Payment following the
commencement of a fiscal year, Subtenant shall (a) until a request is made, pay the installments of
Subtenant's Tax Payment for the prior fiscal year and (b) within 10 days following Subtenant's
receipt of Sublandlord's request or revision, pay the installments of Subtenant's Tax Payment
retroactive to the beginning of that fiscal year to the extent they exceed the Tax Payments previously
made by Subtenant for that fiscal year (or if they are less, Sublandlord shall credit, against the next
payments under this Sublease, [or, at the request of Subtenant, refund] the difference). Only
Sublandlord or its designee shall be entitled to institute tax reduction or other proceedings to reduce
the assessed valuation of the Property, the Land or the Building. Each Tax Statement, and each other
bill or invoice of Sublandlord on account of any Additional Rent, shall be conclusive and binding
upon Subtenant unless (i) with respect to any such Tax Statement, bill or invoice, and on or before
the date which is three hundred sixty five (365) days after the delivery by Sublandlord to Subtenant
of such statement, bill or invoice, Subtenant shall deliver written notice to Sublandlord that
Subtenant disputes the correctness thereof, specifying the particular respects in which such statement
is claimed to be incorrect. Pending the determination of such dispute, Subtenant shall pay any
disputed portion of the relevant Tax Payment and other Additional Rent to Sublandlord (as and when
otherwise payable to Sublandlord under this Sublease) and Subtenant shall pay any undisputed
portion of the relevant Tax Payment and other Additional Rent in accordance with the applicable Tax
{10385698:10)8
Statement, invoice or bill (and Sublandlord shall credit [or, at the Subtenant's request, refund] any
overpayment by Subtenant following the determination of such dispute). See Section 3.5 hereof.
3.3. Commencing on the first day of the first Rental Lease Year, Subtenant shall pay to Sublandlord
additional rent equal to Subtenant's Proportionate Share of all amounts payable by Sublandlord
attributable to Expenses, subject to the other provisions of this Sublease. "Expense Statement"
means a reasonably detailed statement prepared by Sublandlord or, at Sublandlord's option, a third
party, showing the calculation of Subtenant's Expense Payment. "Subtenant's Expense Payment"
means Subtenant's Share of the Expenses for any calendar year or portion thereof during the term of
this Sublease (and thereafter until Subtenant surrenders possession of the Sublease Premises in
accordance with this Sublease). Subtenant shall pay, to Sublandlord, Subtenant's Expense Payment
within 15 days following Subtenant's receipt of the Expense Statement for that calendar year. If
Sublandlord requests, Subtenant shall pay, to Sublandlord, Subtenant's Expense Payment as
reasonably estimated by Sublandlord from time to time in monthly or other periodic installments, in
advance, on the first day of each calendar month or other period. If Sublandlord requests or revises
the installments of Subtenant's Expense Payment following the commencement of a calendar year,
Subtenant shall (a) until a request is made, pay the installments of Subtenant's Expense Payment for
the prior calendar year and (b) within 10 days following Subtenant's receipt of Sublandlord's request
or revision, pay the installments of Subtenant's Expense Payment retroactive to the beginning of that
calendar year to the extent they exceed the payments previously made by Subtenant for that calendar
year (or if they are less, Sublandlord shall credit, against the next payments under this Sublease, [or,
at the request of Subtenant, refund] the difference). Sublandlord shall, within 120 days following the
end of each calendar year, use reasonable efforts to deliver to Subtenant an Expense Statement for
that calendar year. If the aggregate amount collected by Sublandlord from Subtenant for that
calendar year is less than Subtenant's Expense Payment shown on that Expense Statement,
Subtenant shall pay the deficiency to Sublandlord within 10 days following Subtenant's receipt of
that Expense Statement. If, however, the aggregate amount collected by Sublandlord from Subtenant
is greater, Sublandlord shall credit, against Subtenant's next payment under this Sublease [or, at the
request of Subtenant, refund], the excess or, if any excess is due Subtenant at the Expiration Date,
Sublandlord shall promptly pay that excess to Subtenant. If the first day of the first Rental Lease
Year or the Expiration Date is a date other than the first or last day of a calendar year, Subtenant's
Expense Payment for that calendar year shall be apportioned according to the number of days of that
calendar year within the Term. Subtenant shall have the right, at Subtenant's expense, during normal
business hours, on notice to Sublandlord, to examine, at Sublandlord's office (or at Sublandlord's
option, the office of Sublandlord's managing agent or independent certified public accountant),
Sublandlord's books and records which are relevant to the determination of the Expenses shown on
any Expense Statement, provided (a) there is no monetary default by Subtenant under this Sublease
on the date of the examination, (b) the examination is conducted on one or more dates mutually
convenient for Sublandlord and Subtenant and concluded within 120 days following Subtenant's
receipt of the Expense Statement in question (if Sublandlord has provided Subtenant with reasonable
access during that period), (c) the person examining Sublandlord's books and records is not a person
who is paid based in whole or in part on the amount of any reduction of the Expense Payment
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resulting from the examination (and, prior to making an examination both Subtenant and the person
retained by Subtenant to make the examination shall certify to Sublandlord that the person making
the examination is not to be paid any sum based in whole or in part on the reduction of Expense
Payment), and (d) any information obtained by Subtenant or the person examining Sublandlord's
books and records shall be kept confidential, except for disclosure to Subtenant's legal counsel and
other advisors and any independent person designated to resolve any dispute between Sublandlord
and Subtenant relating to an Expense Payment or as required by any Law. An Expense Statement
shall be binding and conclusive on Subtenant unless Subtenant, within 365 days following
Subtenant's receipt of that Expense Statement, gives notice to Sublandlord disputing its accuracy and
setting forth the particular respects in which that Expense Statement is claimed to be inaccurate. If
Subtenant timely disputes an Expense Statement and Sublandlord and Subtenant have not settled the
dispute by agreement within 30 days following Sublandlord's receipt of Subtenant's notice of
dispute, then Sublandlord and Subtenant shall, within 60 days following Sublandlord's receipt of
Subtenant's notice of dispute, designate one independent person to resolve the dispute, who must
have not less than 10 years' experience as an independent certified public accountant in connection
with commercial office buildings in The City of New York. If Sublandlord and Subtenant fail to
designate that person within 60 days following Sublandlord's receipt of Subtenant's notice of
dispute, that person shall be designated by the New York City office of the American Arbitration
Association (or any successor organization) under its then expedited rules at the request of either
Sublandlord or Subtenant. The determination of that person (which shall be requested within 30
days) shall be binding and conclusive on Sublandlord and Subtenant. Sublandlord and Subtenant
shall each pay their own expenses of this procedure, except the fees and expenses of the independent
person and the American Arbitration Association (or any successor organization) shall be paid 50
percent by Sublandlord and 50 percent by Subtenant. Pending the resolution of any dispute,
Subtenant shall pay to Sublandlord Subtenant's Expense Payment shown on that Expense Statement.
Sublandlord shall credit against the next payments under this Sublease (or, at the request of the
Subtenant, refund to Subtenant) any Expense Payment paid by Subtenant in excess of that
determined by agreement or by the independent person designated to resolve a dispute. Subtenant
shall not be permitted to dispute an Expense Statement if there is a monetary default by Subtenant
under this Sublease on the date of Subtenant's notice of dispute.
3.4. Subtenant's payments under Section 3.2 in respect of any Real Estate Taxes, and Section 3.3 in
respect of any Expenses, shall be due within ten (10) days of the sending by Sublandlord to
Subtenant of a statement itemizing such Real Estate Taxes or Expenses, and shall be pro-rated for
any partial month or year.
3.5. If Overlandlord shall issue to Sublandlord any credit or refund in respect of Real Estate Taxes or
Expenses relating to any part of the term of this Sublease, Sublandlord shall (a) provide Subtenant
with a copy of the supporting documentation received by Sublandlord and (b) give to Subtenant a
credit or refund equal to Subtenant's Proportionate Share of the portion of such credit or refund
remaining after deducting therefrom:
110385698:10)10
3.5.1. the portion, if any, of such credit or refund resulting from any reduction in Real Estate Taxes
allocated to any period that is not included within or allocated to the term of this Sublease,
and
3.5.2. any reasonable costs and expenses, including reasonable attorneys' fees, incurred by
Sublandlord in connection with obtaining such credit or refund, unless and to the extent such
costs and expenses were already included in the Tax Payment made by the Subtenant on
account of such Real Estate Taxes.
The Sublandlord's calculation of the amount of any such credit or refund shall be binding on the
Subtenant in the absence of manifest error.
3.6. [Reserved].
3.7. As and to the extent any rent payable on account of Real Estate Taxes or Expenses ("Supplemental
Rent") is payable for any period that is less than a full fiscal year, or for any period that covers more
than one fiscal year, then such Supplemental Rent shall be equitably apportioned as reasonably
determined by Landlord, it being understood that the Subtenant shall not pay any Base Rent or
Supplemental Rent for the period from the date of this Sublease until December 31,2007.
3.8. Subtenant shall, within ten days of demand, pay or reimburse Sublandlord for all amounts payable
under the Overlease arising out of Subtenant's requests for services or other acts or omissions,
including, without limitation, any maintenance, repair or other service for which a separate charge is
made by Overlandlord. This Section 3 g shall not be applicable to electricity, which is covered by
Section 9 hereto.
3.9. As used herein the term "additional rent" or "Additional Rent" shall refer to all sums of money
which shall become due and payable by Subtenant to Sublandlord hereunder, other than Base Rent,
and the term "rents" shall refer to Base Rent and additional rent. All rents shall be payable in lawful
money of the United States at such place and to such person as Sublandlord shall from time to time
designate.
3.10. Subtenant shall promptly pay all rents as and when the same shall become due and payable without
set-off, offset or deduction of any kind whatsoever and, if Subtenant fails to pay any additional rent
when due, Sublandlord shall have all of the rights and remedies provided for herein or at law or in
equity as in the case of non-payment of Base Rent.
3.11. Sublandlord's failure to deliver any statements or bills required to be delivered to Subtenant
hereunder, or Sublandlord's failure to make a demand under this Sublease, shall not be a waiver of,
or cause Sublandlord to forfeit or surrender, its rights to collect any rents which may have become
due pursuant to this Sublease. Subtenant's liability for rents accruing during the term of this
Sublease, and Sublandlord's obligation to refund overpayments of or adjustments to rents paid to it
by Subtenant, shall survive the expiration or sooner termination of this Sublease.
{10385698:I 0) 1 1
3.12. Subtenant shall pay to Sublandlord upon demand, as Additional Rent, any occupancy tax or rent tax
now in effect or hereafter enacted, which Sublandlord is now or hereafter is required to pay with
respect to the Sublease Premises or this Sublease.
3.13. Sublandlord estimates that• (i) the amount of the Real Estate Taxes during the 2006-2007 fiscal year,
and (ii) the amount of Expenses during the 2006 calendar year, were as set forth on Exhibit 13 hereto.
3.14. The Subtenant's Proportionate Share shall be equitably adjusted by Sublandord in the event that any
fully enclosed rentable square footage (not including any parking garage) is added to the Overlease
Premises. For the purpose of determi
Preview
FILED: KINGS COUNTY CLERK 08/15/2016 05:28 PM INDEX NO. 510844/2016 NYSCEF DOC. NO. 31 RECEIVED NYSCEF: 08/15/2016 SUBLEASE dated as of August 1, 2007 between Lundy's Management Corp., Sublandlord and Cherry Hill Gourmet, Inc., Subtenant {10385698:10) Table of Contents 1. Definitions and Basic Terms 1 2. Demise; Term; Permitted Use 5 3. Rents. 7 4. Condition of the Sublease Premises 12 5. Subordination to and Incorporation of the Overlease 12 6. Insurance and Indemnification 16 7. Covenant of Quiet Enjoyment 17 8. Assignment and Subsubletting 17 9. Electricity 18 10. Alterations 18 11. [Reserved] 12. Security Deposit 19 13. Notices 20 14. Broker 20 15. Overlandlord Consent 20 16. Miscellaneous 21 List of Exhibits A Sublease Premises B Landlord's Estimate C Overlease D Exclusions from Incorporated Provisions E Method of Charging for Electricity F Included Personal Property {10385698:10) SUBLEASE dated as of the Sublease Date between Sublandlord and Subtenant WITNESETH: WHEREAS Sublandlord is now the tenant under the Overlease which demises the Property (the "Overlease Premises"); and WHEREAS Sublandlord desires to sublease to Subtenant, and Subtenant desires to sublease from Sublandlord, the Sublease Premises on the terms and conditions contained herein; NOW, THEREFORE, in consideration of the mutual covenants herein contained, Sublandlord and Subtenant agree as follows: 1. Definitions and Basic Terms Set forth below are certain definitions and basic terms of this Sublease. 1.1. Sublease Date August 1, 2007 1.2. Sublandlord Lundy's Management Corp. 13. Subtenant Cherry Hill Gourmet, Inc. 1.4. Overlandlord the landlord under the Overlease. L5. Overlease that certain lease dated March 9, 1994 originally between Sheepshead Restaurant Associates, Inc., as landlord, and Lundy's Management Corp., as tenant, and as hereafter amended. 1.6. Incorporated all of the provisions of the Overlease except for those listed on Provisions Exhibit D hereto. 1.7. Property the "Leased Premises" as defined in the Overlease. 1.8. Sublease Premises the portion of the Overlease Premises shown on ExhihiLA hereto. The Sublease Premises is also sometimes referred to herein as the "Demised Premises". 1.9. Expiration Date The twentieth anniversary of the first day of the first Rental Lease Year. {10385698:10} 1.10. Sublease Base $24.00 per rentable square foot during the first Rental Lease Year; Rental Rate $26.00 per rentable square foot during the second Rental Lease Year; $27.00 per rentable square foot during the third Rental Lease Year; $28.00 per rentable square foot during the fourth Rental Lease Year; $29.00 per rentable square foot during the fifth Rental Lease Year; $30.00 per rentable square foot during the sixth Rental Lease Year; $31.00 per rentable square foot during the seventh Rental Lease Year; $32.00 per rentable square foot during the eighth Rental Lease Year; $33.00 per rentable square foot during the ninth Rental Lease Year; $34.00 per rentable square foot during the tenth Rental Lease Year; and $35.00 per rentable square foot during the eleventh Rental Lease Year. During each Rental Lease Year thereafter, and until the end of the twentieth Rental Lease Year, the Sublease Base Rental Rate shall be 102% of the Sublease Base Rental Rate during the prior Rental Lease Year. For example, the Sublease Base Rental Rate for the twelfth Rental Lease Year shall be $35.70 per rentable square foot. In the case of each Rental Lease Year, the Sublease Base Rental Rate shall be multiplied by Sublease Premises Rentable Area (i.e., the rentable square footage of the Sublease Premises) to determine the Base Rent that is payable during such Rental Lease Year. The Sublease Base Rental Rate does not include a charge for electricity. 1.11. Subtenant's 31.33% per cent, subject to Section 3 14 hereof. Proportionate Share 1.12. Sublease Premises 14,100 rentable square feet. Sublandlord shall not be deemed to Rentable Area have represented the accuracy of the Sublease Premises Rentable Area. 1.13. Real estate taxes {10385698:10)2 1.13.1. Real means the sum of (i) the real estate taxes and assessments, Business Improvement Estate District taxes, charges and assessments, and special assessments, imposed upon Taxes the Property including all buildings thereon (collectively called the "Building") and the "Land" (as defined in the Overlease), and any rights or interests appurtenant thereto, during any Tax Year and (ii) reasonable attorneys' fees, court, or other administrative costs and disbursements, in connection with any Real Estate Taxes. If, at any time during the term of this Sublease, the methods of taxation prevailing as of the date of this Sublease shall be altered so that, in lieu of, or as an addition to, or as a substitute for, the whole or any part of the real estate taxes, assessments, levies, impositions or charges now levied, assessed or imposed, there shall be levied, assessed or imposed a tax, assessment, levy, imposition or charge wholly or partially as a capital levy, or on the rents, licenses or other charges received with respect to the Overlease Premises, the Land or the Building, then all such taxes, assessments, levies, impositions or charges payable shall be deemed to be included within the term "Real Estate Taxes" for the purposes hereof. If any special assessment is levied against the Overlease Premises for an improvement to the Overlease Premises by any governmental unit, and if Sublandlord has the right to elect to require that such special assessment be paid in a number of installments, then Sublandlord agrees to exercise its right to require that such special assessment be paid in the maximum number of installments. Nothing contained herein shall require Subtenant to pay any general income tax, franchise tax, corporate transfer tax, estate tax or gift tax imposed generally, rather than solely on a person as an owner of the Land or Building, or any developmental impact fee arising as the result of any development of any portion of the Overlease Premises other than the Sublease Premises, or any mortgage recording, stamp, or transfer taxes payable in connection with the mortgaging, encumbrancing, transfer, sale or lease of the Land or Building or any stock of or interest in Owner, or any portion thereof or interest therein. Taxes and assessments which are deemed Real Estate Taxes by reason of a change in the method of taxation (as provided above in this paragraph) shall be so included only if imposed solely on real property owners or solely on commercial real property owners and only to the extent that such taxes and assessments would be payable by the owner of the Building if the Building were the sole property of such owner and the income from the Building were the sole income of such owner. A copy of the tax bill of The City of New York or other taxing authority imposing Real Estate Taxes on the Property, the Land or the Building or any part thereof shall be sufficient evidence of the amount of Real Estate Taxes. Notwithstanding the fact that the aforesaid Additional Rent is measured by Real Estate Taxes, such amount is Additional Rent and shall be paid by Subtenant as provided herein regardless of the fact that Subtenant may be exempt, in whole or in part, from the payment of any Real Estate Taxes for any reason whatsoever. (10385698:10)3 1.13.2. Tax shall mean each twelve (12) month fiscal period commencing on July 1 and ending Year on June 30 of the following year, any portion of which fiscal period occurs during the term of this Sublease. 1.13.3. Tax shall mean the Subtenant's Proportionate Share of the amount of the Real Estate Payment Taxes payable for each Tax Year (or portion thereof) occurring either during the term of this Sublease or thereafter until the date the Subtenant surrenders possession of the Sublease Premises in accordance with this Sublease. See Section 3.7 of this Sublease. 1.14. Expenses. 1.14.1. Expenses All of Sublandlord's reasonable expenses in connection with insurance, wages and salaries (including fringe benefits, vacations, sick days, and payroll taxes) for one employee (who is a superintendent), and utilities for common areas at the Overlease Premises relating in any such case to the Property, the Building or the Land, and any property adjacent thereto that is used for ingress or egress to or from the Property or that is otherwise related to the Property (including, without limitation, sidewalks, walkways, parking areas). 1.15. Lease Year Each one year period (or portion thereof, in the case of any premature termination of the term of this Lease) during the term of this Sublease commencing on the Commencement Date or any anniversary thereof. "Rental I ease Year" shall mean each calendar year (or portion thereof, in the case of any premature termination of the term of this Lease) during the term of this Sublease, commencing on January 1, 2008, or any anniversary thereof 1.16. Method of as described on ExbibitE hereto. Charging for Electricity 1.17. Included Personal the items, if any, listed on Exhibit F hereto. Property 1.18. Personal Property None Rent 1.19. Required Security $84,600.00 Deposit Amount (10385698:10)4 1.20. Recognized Broker None 1.21. this Sublease this Agreement of Sublease, including the Incorporated Provisions as incorporated herein. The terms "herein," "hereunder", etc. refer to this Agreement of Sublease, including the Incorporated Provisions as incorporated herein. 2. Demise; Term; Permitted Use 2.1. Sublandlord hereby subleases to Subtenant, and Subtenant hereby hires from Sublandlord, the Sublease Premises upon and subject to the terms and conditions hereinafter set forth. 2.2. The term of this Sublease shall commence on the first date (the "Commencement Date") on which all of the following shall have occurred: 2.2.1. Overlandlord shall have consented hereto in accordance with Section 15 below; 2.2.2. all occupants of the Sublease Premises, if any, shall have vacated the same; and 2.2.3. either (a) Sublandlord shall have notified Subtenant that the foregoing conditions have been satisfied, or (b) Subtenant shall have commenced to occupy the Sublease Premises (provided that, for the purpose of this Sublease, cleaning by Subtenant in order to prepare the Sublease Premises for occupancy shall not be deemed to be occupancy by Subtenant). If Subtenant shall take occupancy of the Sublease Premises prior to the Commencement Date, such occupancy shall be subject to all of the terms and conditions of this Sublease, including the obligation to pay rent. The provisions of this Section 2.2 shall be regarded as an "express provision to the contrary" within the meaning of Section 223-a of the Real Property Law. 2.3. If either party hereto shall so request, the parties hereto shall execute and deliver an instrument confirming the Commencement Date, but the failure of either party to execute and deliver such instrument shall not affect the Commencement Date. 2.4. The term of this Sublease shall expire on the Expiration Date or on such earlier date upon which such term shall expire or be terminated pursuant to any of the provisions of this Sublease or pursuant to law. 2.5. Notwithstanding anything to the contrary in this Sublease, in no event may Subtenant use the Sublease Premises for any purpose that is not expressly permitted under the Overlease or by applicable laws. Subject to the foregoing, and subject to the following sentences of this paragraph, the Subtenant agrees that the Sublease Premises shall be used and occupied only as (I) an "eating or drinking place" pursuant to the New York City Zoning Resolution (provided that any outdoor table service or musical entertainment shall also be subject to the Sublandlord's approval, which shall not 013385698:m5 be unreasonably withheld or delayed), or (2) for such other use that is permitted by applicable laws, subject to the Sublandord's approval, which shall not be unreasonably withheld, provided, however, before commencing to use the Sublease Premises for any purpose other than as permitted by clause (1) above in this sentence, the Subtenant shall deliver to Sublandlord, at least thirty (30) days before the Subtenant commences using the Sublease Premises for such use, A) prior written notice describing such proposed use in reasonable detail, and B) reasonable evidence of the legality of such use (including, without limitation, a legal opinion or letter from an architect, that is reasonably satisfactory to Sublandlord, and that confirms such use is legally permitted); and the Subtenant shall not use the Sublease Premises for any other purpose. Without expanding the specificity of the preceding sentence, in no event shall the Sublease Premises be used for any of the following: (1) a banking, trust company, or safe deposit business, (2) a savings bank, a savings and loan association, or a loan company, (3) the sale of travelers' checks and/or foreign exchange, (4) a stock brokerage office or for stock brokerage purposes, (5) photographic reproductions and/or offset printing, (6) an employment or travel agency or airline ticket counter, (7) a school or classroom, (8) medical (including, without limitation, abortion clinic, dental, psychiatric or family planning) offices, (9) conduct of an auction, (10) gambling activities, (11) conduct of obscene, pornographic or similar disreputable activities, (12) offices of an agency, department or bureau of the United States Government, any state or municipality within the United States or any foreign government, or any political subdivision of any of them, (13) offices of any charitable, religious, union or other not-for- profit organization, or (14) offices of any tax exempt entity within the meaning of Section 168(h)(2) of the Internal Revenue Code of 1986, as amended, or any successor or substitute statute, or rule or regulation applicable thereto. Subtenant covenants that it shall not permit or conduct any obscene performance, of which it has or should have knowledge, on the Sublease Premises or permit the same to be used for any obscene or pornographic purposes or activities of which it has or should have knowledge, including, without limitation, the sale or distribution of any obscene or pornographic material. The terms "obscene", "material" and "perfonnance" shall be defined for purposes of this covenant as they are defined in Section 235.00 of the New York Penal Law, as the same may be amended from time to time. Subtenant further covenants that it shall not operate a "physical culture" establishment on the Sublease Premises, except for a health club that promotes exercise associated with weight training aerobics or other activities common at first-rate health clubs located in the New York City area. Subtenant covenants that it shall not use or occupy the demised Sublease Premises, and shall not knowingly permit or suffer it to be used or occupied, for the purpose of performing any abortions or providing any professional counseling or advice advocating abortions or family planning and it shall not place, permit or suffer to be placed, any signs or advertising relating to abortions or family planning on or about the Sublease Premises, to the extent that it knows or should know of any such prohibited uses or occupancies. Subtenant shall take all steps necessary to ensure that its employees, agents, invitees and guests do not loiter in or near the Building or adjacent plazas, and that in entering and exiting the Sublease Premises the Subtenant's employees, agents; guests and invitees do not make unreasonable noise or commotion. Subtenant shall not at any time use or occupy the Sublease Premises, or suffer or permit anyone to use or occupy the Sublease Premises, or do anything in or about the Sublease Premises, or suffer or permit {10385698:106 anything to be done in or about, brought into or kept or about the Sublease Premises, which in any manner in the sole but reasonable discretion of Sublandlord (i) violates the certificate of occupancy for either the Sublease Premises, if any, the Building, or the Property, or any part thereof, or any rules or regulations specified in Exhibit r hereto, or any other reasonable rules and regulations promulgated by Sublandlord from time to time, (ii) causes or is likely to cause injury to the Sublease Premises, the Building, the Property, or any equipment, facilities or systems therein; (iii) constitutes a violation of laws; (iv) impairs the proper and economic maintenance, operation and repair of the Building, the Property, and/or its equipment, facilities or systems; (v) unreasonably annoys or disturbs other subtenants, owners or occupants of the Property or any part thereof; (vi) constitutes a nuisance, public or private, (vii) makes unobtainable from reputable insurance companies authorized to do business in New York State any fire insurance with extended coverage, or liability, elevator, boiler or other insurance, at standard market rates, required to be furnished by Sublandlord under the terms of any mortgages covering the Property or any interest therein; (viii) discharges objectionable fumes, vapors or odors into the Building's flues or vents or the outside of the Building or otherwise in such manner as may offend the public or other subtenants, owners or occupants of the Building or the Property or any part thereof; or (ix) creates excessive floor loads. Subtenant covenants and agrees that, promptly following the date hereof, Subtenant, at its sole cost and expense, shall take all necessary steps, and use commercially reasonable efforts, to procure the required license(s) and/or permit(s) required for the sale of alcoholic beverages for on-premises consumption on the Sublease Premises (the "Liquor License"). Provided that Subtenant shall have procured (and furnished to Sublandlord a true copy of) the Liquor License, then Subtenant shall have the right to sell such alcoholic beverages for on-premises consumption, on the Sublease Premises, as part of its restaurant business. Sublandlord makes no representation or warranty that the aforesaid permits and/or licenses will be issued, and Sublandlord shall not be obligated to incur any expenditures in connection therewith. Subtenant acknowledges that nothing herein contained is intended or shall be deemed to make this Sublease, or Subtenant's obligations hereunder, subject to or conditioned upon Subtenant obtaining the Liquor License. Subtenant shall pay all of Sublandord's reasonable expenses in connection with the Liquor License. Subtenant shall keep all permits and licenses required by public health and governmcntal agencies of the City of New York and the State of New York current, properly protected, posted and readily available for inspection. 3. Rents 3.1. Subtenant shall pay to Sublandlord rent ("Base Rent") at the rate per annum equal to the Sublease Base Rental Rate (multiplied by the rentable square footage of the Sublease Premises), payable in equal monthly installments in advance on the first day of the first Rental Lease Year and on the first day of each month thereafter, pro-rated for any partial month, except as follows. Notwithstanding the foregoing, the Subtenant shall not be obligated to pay the monthly installment of Base Rent for January, 2009, or the monthly installment of Base Rent for February, 2009, if the Subtenant is not in default (after all applicable grace or notice periods) at the time such monthly installment of Base Rent would otherwise have accrued pursuant to the provisions of this Sublease other than this {10385698:10)7 sentence. Upon execution of this Sublease, Subtenant shall make an advance payment of one month's Base Rent to be applied to the first full month's Base Rent. Since the rentable square footage of the Sublease Premises is 14,100 rentable square feet, therefore the Base Rent for the Sublease Premises is accordingly $338,400 per annum for the first Rental Lease Year, subject to the following. 3.2. Commencing on the first day of the first Rental Lease Year, Subtenant shall pay to Sublandlord additional rent equal to Subtenant's Proportionate Share of all amounts payable by Sublandlord attributable to Real Estate Taxes, subject to the other provisions of this Sublease. With respect to each Tax Year occurring in whole or in part during the term of this Sublease (and thereafter until Subtenant surrenders possession of the Sublease Premises in accordance with this Sublease), Subtenant shall pay to Sublandlord the Tax Payment in the manner as described in this Sublease. At any time after the date which is thirty (30) days prior to the commencement of each Tax Year, Sublandlord may furnish to Subtenant a written statement (a "Tax Statement") setting forth the amount of Real Estate Taxes for such Tax Year, and the amount of the Tax Payment for such Tax Year. Subtenant shall pay the Tax Payment for each such Tax Year to Sublandlord as Additional Rent in one annual installment within ten (10) days after receipt by Subtenant of such Tax Statement, or, at Subtenant's option, Subtenant may pay the Tax Payment to the Sublandlord in two equal installments, and each such installment shall be payable to Sublandlord not later than the 20th day before the corresponding installment of Real Estate Taxes that is payable for such Tax Year; provided, however, notwithstanding the above, if Sublandlord requests, Subtenant shall pay, to Sublandlord, Subtenant's Tax Payment as reasonably estimated by Sublandlord from time to time in monthly installments, in advance, on the first day of each calendar month or other period. If Sublandlord requests or revises the installments of Subtenant's Tax Payment following the commencement of a fiscal year, Subtenant shall (a) until a request is made, pay the installments of Subtenant's Tax Payment for the prior fiscal year and (b) within 10 days following Subtenant's receipt of Sublandlord's request or revision, pay the installments of Subtenant's Tax Payment retroactive to the beginning of that fiscal year to the extent they exceed the Tax Payments previously made by Subtenant for that fiscal year (or if they are less, Sublandlord shall credit, against the next payments under this Sublease, [or, at the request of Subtenant, refund] the difference). Only Sublandlord or its designee shall be entitled to institute tax reduction or other proceedings to reduce the assessed valuation of the Property, the Land or the Building. Each Tax Statement, and each other bill or invoice of Sublandlord on account of any Additional Rent, shall be conclusive and binding upon Subtenant unless (i) with respect to any such Tax Statement, bill or invoice, and on or before the date which is three hundred sixty five (365) days after the delivery by Sublandlord to Subtenant of such statement, bill or invoice, Subtenant shall deliver written notice to Sublandlord that Subtenant disputes the correctness thereof, specifying the particular respects in which such statement is claimed to be incorrect. Pending the determination of such dispute, Subtenant shall pay any disputed portion of the relevant Tax Payment and other Additional Rent to Sublandlord (as and when otherwise payable to Sublandlord under this Sublease) and Subtenant shall pay any undisputed portion of the relevant Tax Payment and other Additional Rent in accordance with the applicable Tax {10385698:10)8 Statement, invoice or bill (and Sublandlord shall credit [or, at the Subtenant's request, refund] any overpayment by Subtenant following the determination of such dispute). See Section 3.5 hereof. 3.3. Commencing on the first day of the first Rental Lease Year, Subtenant shall pay to Sublandlord additional rent equal to Subtenant's Proportionate Share of all amounts payable by Sublandlord attributable to Expenses, subject to the other provisions of this Sublease. "Expense Statement" means a reasonably detailed statement prepared by Sublandlord or, at Sublandlord's option, a third party, showing the calculation of Subtenant's Expense Payment. "Subtenant's Expense Payment" means Subtenant's Share of the Expenses for any calendar year or portion thereof during the term of this Sublease (and thereafter until Subtenant surrenders possession of the Sublease Premises in accordance with this Sublease). Subtenant shall pay, to Sublandlord, Subtenant's Expense Payment within 15 days following Subtenant's receipt of the Expense Statement for that calendar year. If Sublandlord requests, Subtenant shall pay, to Sublandlord, Subtenant's Expense Payment as reasonably estimated by Sublandlord from time to time in monthly or other periodic installments, in advance, on the first day of each calendar month or other period. If Sublandlord requests or revises the installments of Subtenant's Expense Payment following the commencement of a calendar year, Subtenant shall (a) until a request is made, pay the installments of Subtenant's Expense Payment for the prior calendar year and (b) within 10 days following Subtenant's receipt of Sublandlord's request or revision, pay the installments of Subtenant's Expense Payment retroactive to the beginning of that calendar year to the extent they exceed the payments previously made by Subtenant for that calendar year (or if they are less, Sublandlord shall credit, against the next payments under this Sublease, [or, at the request of Subtenant, refund] the difference). Sublandlord shall, within 120 days following the end of each calendar year, use reasonable efforts to deliver to Subtenant an Expense Statement for that calendar year. If the aggregate amount collected by Sublandlord from Subtenant for that calendar year is less than Subtenant's Expense Payment shown on that Expense Statement, Subtenant shall pay the deficiency to Sublandlord within 10 days following Subtenant's receipt of that Expense Statement. If, however, the aggregate amount collected by Sublandlord from Subtenant is greater, Sublandlord shall credit, against Subtenant's next payment under this Sublease [or, at the request of Subtenant, refund], the excess or, if any excess is due Subtenant at the Expiration Date, Sublandlord shall promptly pay that excess to Subtenant. If the first day of the first Rental Lease Year or the Expiration Date is a date other than the first or last day of a calendar year, Subtenant's Expense Payment for that calendar year shall be apportioned according to the number of days of that calendar year within the Term. Subtenant shall have the right, at Subtenant's expense, during normal business hours, on notice to Sublandlord, to examine, at Sublandlord's office (or at Sublandlord's option, the office of Sublandlord's managing agent or independent certified public accountant), Sublandlord's books and records which are relevant to the determination of the Expenses shown on any Expense Statement, provided (a) there is no monetary default by Subtenant under this Sublease on the date of the examination, (b) the examination is conducted on one or more dates mutually convenient for Sublandlord and Subtenant and concluded within 120 days following Subtenant's receipt of the Expense Statement in question (if Sublandlord has provided Subtenant with reasonable access during that period), (c) the person examining Sublandlord's books and records is not a person who is paid based in whole or in part on the amount of any reduction of the Expense Payment {10385698.10)9 resulting from the examination (and, prior to making an examination both Subtenant and the person retained by Subtenant to make the examination shall certify to Sublandlord that the person making the examination is not to be paid any sum based in whole or in part on the reduction of Expense Payment), and (d) any information obtained by Subtenant or the person examining Sublandlord's books and records shall be kept confidential, except for disclosure to Subtenant's legal counsel and other advisors and any independent person designated to resolve any dispute between Sublandlord and Subtenant relating to an Expense Payment or as required by any Law. An Expense Statement shall be binding and conclusive on Subtenant unless Subtenant, within 365 days following Subtenant's receipt of that Expense Statement, gives notice to Sublandlord disputing its accuracy and setting forth the particular respects in which that Expense Statement is claimed to be inaccurate. If Subtenant timely disputes an Expense Statement and Sublandlord and Subtenant have not settled the dispute by agreement within 30 days following Sublandlord's receipt of Subtenant's notice of dispute, then Sublandlord and Subtenant shall, within 60 days following Sublandlord's receipt of Subtenant's notice of dispute, designate one independent person to resolve the dispute, who must have not less than 10 years' experience as an independent certified public accountant in connection with commercial office buildings in The City of New York. If Sublandlord and Subtenant fail to designate that person within 60 days following Sublandlord's receipt of Subtenant's notice of dispute, that person shall be designated by the New York City office of the American Arbitration Association (or any successor organization) under its then expedited rules at the request of either Sublandlord or Subtenant. The determination of that person (which shall be requested within 30 days) shall be binding and conclusive on Sublandlord and Subtenant. Sublandlord and Subtenant shall each pay their own expenses of this procedure, except the fees and expenses of the independent person and the American Arbitration Association (or any successor organization) shall be paid 50 percent by Sublandlord and 50 percent by Subtenant. Pending the resolution of any dispute, Subtenant shall pay to Sublandlord Subtenant's Expense Payment shown on that Expense Statement. Sublandlord shall credit against the next payments under this Sublease (or, at the request of the Subtenant, refund to Subtenant) any Expense Payment paid by Subtenant in excess of that determined by agreement or by the independent person designated to resolve a dispute. Subtenant shall not be permitted to dispute an Expense Statement if there is a monetary default by Subtenant under this Sublease on the date of Subtenant's notice of dispute. 3.4. Subtenant's payments under Section 3.2 in respect of any Real Estate Taxes, and Section 3.3 in respect of any Expenses, shall be due within ten (10) days of the sending by Sublandlord to Subtenant of a statement itemizing such Real Estate Taxes or Expenses, and shall be pro-rated for any partial month or year. 3.5. If Overlandlord shall issue to Sublandlord any credit or refund in respect of Real Estate Taxes or Expenses relating to any part of the term of this Sublease, Sublandlord shall (a) provide Subtenant with a copy of the supporting documentation received by Sublandlord and (b) give to Subtenant a credit or refund equal to Subtenant's Proportionate Share of the portion of such credit or refund remaining after deducting therefrom: 110385698:10)10 3.5.1. the portion, if any, of such credit or refund resulting from any reduction in Real Estate Taxes allocated to any period that is not included within or allocated to the term of this Sublease, and 3.5.2. any reasonable costs and expenses, including reasonable attorneys' fees, incurred by Sublandlord in connection with obtaining such credit or refund, unless and to the extent such costs and expenses were already included in the Tax Payment made by the Subtenant on account of such Real Estate Taxes. The Sublandlord's calculation of the amount of any such credit or refund shall be binding on the Subtenant in the absence of manifest error. 3.6. [Reserved]. 3.7. As and to the extent any rent payable on account of Real Estate Taxes or Expenses ("Supplemental Rent") is payable for any period that is less than a full fiscal year, or for any period that covers more than one fiscal year, then such Supplemental Rent shall be equitably apportioned as reasonably determined by Landlord, it being understood that the Subtenant shall not pay any Base Rent or Supplemental Rent for the period from the date of this Sublease until December 31,2007. 3.8. Subtenant shall, within ten days of demand, pay or reimburse Sublandlord for all amounts payable under the Overlease arising out of Subtenant's requests for services or other acts or omissions, including, without limitation, any maintenance, repair or other service for which a separate charge is made by Overlandlord. This Section 3 g shall not be applicable to electricity, which is covered by Section 9 hereto. 3.9. As used herein the term "additional rent" or "Additional Rent" shall refer to all sums of money which shall become due and payable by Subtenant to Sublandlord hereunder, other than Base Rent, and the term "rents" shall refer to Base Rent and additional rent. All rents shall be payable in lawful money of the United States at such place and to such person as Sublandlord shall from time to time designate. 3.10. Subtenant shall promptly pay all rents as and when the same shall become due and payable without set-off, offset or deduction of any kind whatsoever and, if Subtenant fails to pay any additional rent when due, Sublandlord shall have all of the rights and remedies provided for herein or at law or in equity as in the case of non-payment of Base Rent. 3.11. Sublandlord's failure to deliver any statements or bills required to be delivered to Subtenant hereunder, or Sublandlord's failure to make a demand under this Sublease, shall not be a waiver of, or cause Sublandlord to forfeit or surrender, its rights to collect any rents which may have become due pursuant to this Sublease. Subtenant's liability for rents accruing during the term of this Sublease, and Sublandlord's obligation to refund overpayments of or adjustments to rents paid to it by Subtenant, shall survive the expiration or sooner termination of this Sublease. {10385698:I 0) 1 1 3.12. Subtenant shall pay to Sublandlord upon demand, as Additional Rent, any occupancy tax or rent tax now in effect or hereafter enacted, which Sublandlord is now or hereafter is required to pay with respect to the Sublease Premises or this Sublease. 3.13. Sublandlord estimates that• (i) the amount of the Real Estate Taxes during the 2006-2007 fiscal year, and (ii) the amount of Expenses during the 2006 calendar year, were as set forth on Exhibit 13 hereto. 3.14. The Subtenant's Proportionate Share shall be equitably adjusted by Sublandord in the event that any fully enclosed rentable square footage (not including any parking garage) is added to the Overlease Premises. For the purpose of determi