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AO £40 Inav 1401 Strnmons .n •Cmi Actor, niteb Sttt es l totrirt (Court SOUTHERN UNITED STATES OF AMERICA, Plaintiff, V. JEFFREY EPSTEIN and IVAN FISHER, TO: Mr* inel Awns a Ovnimi IVAN FISHER 34 East 69th Street New York, NY 10021 DISTRICT OF NEW YORK SUMMONS IN A CIVIL ACTION CASE NUMBER: 0,1 YOU ARE HEREBY SUMMONED and required to file with the Clerk of this Court and serve upon PLAINTIFFS ATTORNEY in,.. sae addross) M. CHINTA GASTON Assistant United States Attorney 100 Church Street — 1943 New York, New York 10007 an answer to the complaint which is herewith served upon you, within 60 days after service of this summons upon you, exclusive of the day of service. If you fail to do so, judgment by default will be taken against you for the relief demanded in the complaint. PARKISON Ii0v.4103. CLERK DATE BY DEPUTY CLERK EFTA00597016 MARY JO WHITE United States Attorney By: M. CHINTA GASTON (MG - 8392) Assistant United States Attorney 100 Church Street -- 19th Floor New York, New York 10007 Tel./ (212) 385-6376 UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK x UNITED STATES OF AMERICA, Plaintiff, - against - JEFFREY E. EPSTEIN AND IVAN FISHER, Defendants. COMPLAINT 96 Civ. 3307 (CC ) Plaintiff, the United States of America, by its attorney, Mary Jo White, United States Attorney for the Southern District of New York, for its complaint against defendants, alleges upon information and belief as follows: 1. Plaintiff, the United States of America on behalf of the Office of Foreign Missions of the Department of State ("OFM" or the "Government") is the custodian of the residence of the former Iranian Ambassador to the United Nations, which is located at 34 East 69th Street, New York, New York (the "Premises"). 2. Defendant Jeffrey E. Epstein ("Epstein") is a resident of the City of New York and party to a residential lease with OFM for the Premises. 3. Defendant Ivan Fisher ("Fisher") is a resident of the City of New York and is an unapproved subtenant currently residing at the Premises. EFTA00597017 4. This Court has jurisdiction by virtue of 28 U.S.C. § 1345 because the United States is a party. 5. Venue in this district is proper pursuant to 28 U.S.C. § 1391 because this is the district in which the defendants reside and because this is the district in which the claim arose. 6. Although the Premises belong to the Government of Iran, OFM functions as the custodian of this and other Iranian properties that have been frozen pursuant to the International Emergency Economic Powers Act ("IEEPA"), 50 U.S.C.App. S 1701(a) , and applicable Executive Orders. OFM manages and leases the Premises pursuant to the terms of a license granted by the Office of Foreign Assets Control of the United States Department of Treasury under the authority of IEEPA. 7. As property of a foreign sovereign that the United States government has frozen, and now administers, in accordance with federal law, the Premises is not subject to the New York City Rent Law and Rehabilitation Law, the New York City Rent Stabilization Law, or any other state or city law or regulation. 8. On or about February 1, 1992, the OFM entered into a written lease with Epstein for use and occupancy of the Premises. A true copy of the Lease is attached as Exhibit A and is incorporated herein by reference. 9. The term of the Lease was from February 1, 1992 through January 31, 1994. 10. On or about August 28, 1992, Epstein and OFM entered into an amendment to the Lease, which, inter alia, extended the term of the Lease through January 31, 1997 (the 2 EFTA00597018 "Lease Amendment"). A true copy of the Lease Amendment is attached as Exhibit B and is incorporated herein by reference. The Lease Amendment was made retroactively effective to February 1, 1992. 11. The Lease requires that the Premises be occupied only by Epstein, along with his wife and children, if any, as their personal residence, and/or by Epstein's personal servants or employees. 12. The Lease also permits Epstein to have approved subtenants or assignees, but any sublet or assignment requires advance written permission from OFM. 13. Under the Lease Amendment, Epstein has a "right of first refusal" to lease the Premises again at the end of the lease term, at the then fair market rental of the Premises. 14. On or about February 1, 1992, defendant Epstein took possession of the Premises. 15. On or about January 3, 1996, Epstein vacated the Premises. Epstein did not advise OFM that he had vacated the Premises. 16. Epstein failed to make timely rent payments for February and March 1996. 11. By letter dated April 19, 1996, Epstein informed OFM, through his attorney, that he wished to sublet the Premises or assign the Lease to Ivan Fisher. 12. By letter dated April 26, 1996, the Government informed Epstein that it would not approve a sublease or assignment of the Premises to Fisher. 3 EFTA00597019 17. Despite the Government's refusal to approve Ivan • Fisher as a subtenant, Epstein entered into a sublease for the Premises with Ivan Fisher on or about May 7, 1996 (the "Sublease") . A true copy of the Sublease is attached as Exhibit C and is incorporated herein by reference. 13. On or about May 16, 1996, a Government employee visited the premises and found that Fisher was occupying and using the Premises as his home. 14. By letter dated June 3, 1996, sent to Epstein by certified mail-return receipt requested, the Government notified Epstein that he was in default of the Lease and Lease Amendment for not occupying the Premises personally and for permitting an unapproved subtenant to occupy the Premises (the "Notice of Default"). The Notice of Default granted Epstein thirty days to cure the default. True copies of the Notice of Default and the certified mail receipt are attached as Exhibit D and incorporated herein by reference. 18. On or about July 19, 1996, a Government employee visited the Premises and confirmed that Fisher continued to occupy the Premises. 19. By letter dated August 7, 1996, sent to Epstein by certified mail-return receipt requested, the Government informed Epstein that in light of his failure to correct the default and pursuant to the terms of the Lease, the Lease would be terminated as of August 23, 1996 (the "Termination Notice"). The Termination Notice directed Epstein to have the Premises vacated and to return the keys to the OFM by August 20, 1996. True 4 EFTA00597020 copies of the Termination Notice and the certified mail receipt are attached as Exhibit E and incorporated herein by reference. 20. As of October 30, 1996, Epstein has not relinquished the Premises to the Government and Fisher remained in residence at the Premises. WHEREFORE, the Government prays for a judgment against defendants Epstein and Fisher: (a) terminating the Lease and Lease Amendment; (b) awarding possession of the Premises to the Government; (c) for all unpaid use and occupancy, including use and occupancy accruing and unpaid after the date of this action; (d) for attorneys' fees and the other costs and liquidated damages specified in the lease; and (e) for such other relief as the Court deems just. Dated: New York, New York October 30, 1996 MARY JO WHITE United States Attorney for the Southern District of New York Attorney for the Plaintiff By: M. CHINTA GASTON (MC - 8392) Assistant United States Attorney 100 Church Street, 19th Floor New York, New York 10007 Telephone: (212) 385-6376 5 EFTA00597021 EXHIBIT A EFTA00597022 LEASE AGREEMENT Landlord and Tenant agree to lease the Premises at the rent and for the term stated as follows: Landlord: OFFICE OF FOREIGN MISSIONS DEPARTMENT STATE 2201 C Street, . Room 2236 Washington, Gas Tenant: Jeffrey E. Epstein Wexner investment Company 34 East 69th Sheet Now York, New York 10022 Premisos: 34 East 49th Street, Pew York, New York Lease Terrn: 3 Years; beginning Jettaerrttrt991 - f- fife-rccr.".3 Jill.. <71 through January 31, 1994 • USE The Premises will be occupied by: (1) Tenant, his/her spouse (If any), and his/her children Of any) as their personal residence: (II) Tenant's personal servants and employees: and/or (1il) approved subtenants or approved assignees and their respective families, and for no other purpose. RENT The rent payment for each month must be paid on the first day of that month at Landlord's (Richest at forth above. Rent received tater than the tenth business day of any month Mat be accompanied by a late fee amounting to 2% of the rent payable for such month. Such late too wilt bo deemed additional rent. In no event may any amount be subtracted from H. The first month's rent Is to be paid when Tenant signs this lease, If Tenant falls to pay ageddittonal font on time, Landlord shall have the same righ inst Tenant as If It were a !allure to pay rent, Rent payments shall be made as folioWs: 1&4. /toe cirm"encena..f rie.rt iri a. *Ind. Twelve thousand dollars ($13,000) per month shall be payable thereafter on the first of each month, during the first 2 years of the term of the lease. Commencing February 1, 1994, thirteen thousand dollars ($13,000) per month shall be paid on the first of each month for the bdance of the term of the lease agreement. EFTA00597023 -2- SECURITY At the time the tease Is signed the Tenant will give a security deposit to Landlord in the amount of $12,000. if Tenant fully compiles with all the terms of this lease, Landlord will return the security deposit to Tenant within fifteen (15) days after the term ends. Landlord shall place the security deposit in an Interest bearing account paying the prevailing rate. Tenant shall be entitled to the interest earned on such security deposit, less one (1%) pencentum of such interest which Landlord may retain for administrative costs. If Tenant does not fully comply with the terms of this lease, Landlord may, following the expiration of the applicable grace and cure periods oiler notice, use the security deposit to pay amounts owed by Tenant pursuant to this lease. if during the course of this lease, Landlord sells the Premises, Landlord will transfer the security deposit to the buyer and, In that event, Tenant will look to the buyer for the return of the security deposit. Tenant may not utilize the security deposit as rent and shall not apply same to the lost month's rent. UTILITIES AND SERVICE Tenant Mall pay for the following utilities and services when billed by the public utility or other third patty supplying some: gas, water, electric, fuel, telephone, gardening, exterminating and trash removaL The foregoing sentence is not intended to and does not create any third party beneficiaries or any rights In anyone not a party to this lease. An elevator maintenance service contract shall be maintained, continued and paid for by Landlord. The foregoing sentence Is not Intended to and does not create arty third party beneficiaries or any rights In anyone not a party to this lease. Tenant shall maintain The security alarm system. REPAIRS, ALTERATIONS Subject to the provisions of this lease, Tenant shall keep, and at the end of the fawn return the Premises and all appliances, equipment, furniture, furnishings and other personal property Therein clean and in good order and repair, but nothing contained herein or otherwise is intended to nor shall It: (I) create in landlord any ownership Interest in any of Tenant's Personally; or (II) cause Tenant to be responsible for repairing ;:-•• I. r."-if EFTA00597024 -3- or maintaining the structural elements or roof of the Premises or the elevator therein, all of which Landlord hereby agrees to maintain and repair. Tenant shall not be responsible (or ordinary wear and tear or damage by acts of God or other similar casualties or the element., tf Tenant falls to maintain the Premises as aforesaid, Landlord may, following the expiration of the applicable grace and cure periods after notice, make such repairs and charge Tenant the reasonable cost of same. Tenant may not after, change or add to the Premises without the advance permission of Landlord. Landlord shall have thirty calendar days tonowIng Tenant's written request for such permissions In which to notify Tenant of any disapproval Work which is not disapproved within that lime shall be deemed approved. All permits or tees which may be required In connection with on approved request shall be at tenant expense. All improvements done by a previous tenant Indicated on the attached list entitled 'Chandeliers, Sconces, Mirrors,' have become the sole property of Landlord and may not be disposed of without the Landlord's written consent. CARE OF PREMISES, GROUNDS Tenant shall keep the grounds around the Premises neat and clean. Vehicles may be driven or parked only in driveways or in the garage. FIRE, DAMAGE Tenant shall give Landlord immediate notice In case of fire or other damage to the Premises. Landlord WIN have the right to repair the damage within a reasonable period of time or tf the damage is so substantial that It cannot be repotted within a reasonable period of the, to cancel this lease. Tenant shall pay rent only to the date of the fire or damage. tf Landlord don not repair the Premises within three months of date of damage Tenant shall have the right to terminate the lease. LIABILITY Landlord shall not be liable for loss, expense or damage to any person or property caused by Tenant, Tenant's family, guests, Invitees, Independent contractors or employees. Tenant is responsible for all acts of tenant, Tenant's Family, employees, guests, Independent contractors and Invitees. Tenant shall not be responsible for damage caused by Landlord, his servants, employees, Independent contractors or Invitees. EFTA00597025 -4- ASSIGNMENT, SUBLET Tenant may sublet all or pal of the Premises, ar assign this lease or permit any other person to use the Premises with the advance written permission of Landlord. LANDLORD MAY EMIR, KEYS, SIGNS Except III cairn 01 life-threalentng or properly-threatening emergency, Landlord win give Tenant reasonable notice and will only enter the Premises at reasonable times, to examine, make repairs or alterations, or to *low the Premises to possible buyers, lenders or tenants. Tenant shall ghee fo Landlord keys to all locks. Locks may not be changed or attentions:3i locks Installed wtthout Landlord's advance consent, which consent shall not be unreasonably delayed or withheld. Doors shall be locked at all times they are not In use. Windows shall be locked when Tenant is out. CONDEMNAtION It all of the premises Is taken or condemned by o legal outhorIty, the term hereof, and Tenant's rights hereunder, shall end as of the date the authority takes title of the Premises. If a material part of the Premises Is taken, Landlord may cancel this lease on notice to Tenant setting forth a cancellation date not less than thirty (30) days from the date oft?* note*. it the Ina Is cancelled, Tenant shall deliver the Premises to Landlord on the cancellation date together with an rent due to that date. The award for any taking shall be apportioned between Landlord, who Is entitled to that portion derived from the state of the ?remits's on the date fhls lease is signed ( and any Improvements made by Landlord) and Tenant, who Is 'relied-to that portion derived from any Improvements made by Tenant. COMPLIANCE WITH AUTHORMES Tenant *all, at Tenant's cost, promptly comply with anorders, toles and directions of di governmental authorities, property owners' assoclatioru, Insurance carriers, Board of Fire Underwriters or shrike group which are property Issued to and directed to the particular uses Tenant Is making of the Insurance premiums, If any, but If Tenant causes Landlord's Insurance premiums to be Increased, Tenant shall compensate Landlord for such additional costs. EFTA00597026 4- TENANTS DEFAULTS AND LANDLORD'S REMEDIES A. Landlord shall give: (I) ten (10) days mitten notice to Tenant to cure any (allure to pay rent or additional rent on time; and (II) thirty (30) days written notice to tenant to cure: (a) an unapproved assignment of this lease, unapproved subletting of all or part of the Premises or allowing another to use the Premises wtthout Landlord's approval; (b) unlawful conduct by Tenant or another occupant of the Premises; or (o) any other defcat under this lease, unless tarn* Is not susceptible to being cured within the tune period set forth herein, in which event Tenant shall be entitled to a cure period equal to the time period that Is necessary to cure the default provided Tenant is attempting diligently to effect such cure. E. If Tenant faits to correct a default within the applicable period sot forth above after nonce, Landlord may cancel this lease by giving tenant a written ten (ID) day notice stating the date the term will end. On that date the term hereof and tenant's rights in fits lease shag end and Tenantshall leave Premises and give Landlord the Keys.: 'Tenant shall Continue to be responsible for rent accrued prior to such termination as well as for all other obligations that accrued under this lease prior to such termination In respect of time periods prior thereof. C. If this lease Is cancelled, Landlord may, In addttlon to its other remedies hereunder, remove any person or property therefrom; or (b) use dispossess, eviction or other lawsuit method to take back the Premises. D. If the Lease Is terminated as result of Tenant's default hereunder beyond ail applicable grace and cute periods, Landlord may no-rent the Premises and anything in It for any term. Landlord may re-rent for a lower rent and give allowances to the new tenant. Tenant shall be responsible for Landlord's reasonable costs or re-renting. CORRECTING TENANTS DEFAULT If Tenant falls to correct a default hereunder after the expiration of Ito applicable grace and cur. period following notice, Landlord may correct It for Tenant at Tenant's expense. EFTA00597027 -6- CANCELLATION In the event that diplomatic ►elation are re-established between the United States Government and the Government of Iran Tenant shall be given one hundred eighty days (180) written notice during the nye year of the lease and ono hundred twenty days (120) thereafter prior to the rent due date to vacate the premises without damage to Landlord. Otherwise, except In the cases of an uncured default by Tenant or tmrepa1rable damage covered in the paragraphs entitled 'TENANTS DEFAULTS AND LANDLORD'S REMEDIES" Landlord will not terminate this lease. ILLEGALITY If any part of this lease Is not legal, the rest of the lease will be unaffected; provided, however, that Tenant shall have no obligation under the lease It Landlord don not provide Tenant with use and occupancy and quiet enjoyment of the promises. NO WAIVER Landlord's (allure to enforce any terms of this lease shall not prevent Landlord from enforcing such terms at a later time. QUIET ENJOYMENT Landlord agrees that If Tenant pays the rent and is not In default under this lease, Tenant may peaceably and quietly hove, hold and enjoy the premises for the term of this lease. SUCCESSORS Thit lease is binding on Landlord and will Inure to the benefit of all parties who lawfully succeed to the rights or take the place of Tenant. REPRESENTATIONS, CHANGES IN LEASE Tenant has read this tease. All promises made by Landlord are In this lease. There are no others. This lease may be changed only by an agreement In writing signed by and delivered to each party. PARAGRAPH HEADINGS The paragraph headings are for convenience only. EFTA00597028 _7_ EFFECTIVE DATE This lease Is effective when Landlord delivers lo Tenon? a copy signed by an partial. INSURANCE Tenant shall be responsible for obtaining or teeing that Tenant's contractors performing the approved renovation work have adequate Insurance. TENANTS RIGHTS IF LANDLORD SELLS Should Landlord decide to soil the Premises, Tenant shall have a 'right of first refusal' to purchase the Promises al a price commensurate with the current market value. AUTHORITY This lease Is being entered into pursuant to the Foreign Missions Act of 1982, 22 U.S.C. 4306 (d) In that it Is 'entered Info without regard to laws and regulations otherwise applicable to solicitation, administration, and performance of government contracts.' // id NA ML: Hory W. Porter III MI: Deputy Director Office of ore grit Missions DATE: 2., IESIANT NAME: 4.ff yT Epstein TITLE: Pre ant We nor investment Company DATE: EFTA00597029 EXHIBIT B EFTA00597030 alialIDANNT ASSINDXSOT WO. 1 to the Lease effective February 1, 1092 by and between office of Foreign Missions, Department of State, as Landlord, and Jeffrey E. Epstein, as Tenant. IMINIMIENE wERREAS, Landlord and Tenant are parties to a certain lease (the "Lease") effective as of February 1, 1993 for the use and occupancy of the ?retrainee known es 34 East 67th Street, New York, New York (the "Premises"); and wanness, Landlord and Tenant desire to modify the terms of the !saes as provided herein. 101, 7NICREP0RN, in consideration of the foregoing premises and the mutual covenants and agreements set forth herein, it is agreed as follows: 1. All capitalised terms used herein shall have the sane meaning as such terms ere given in the Lease, unless the context clearly requires otherwise. 2. Anything contained in the Lease to the contrary notwithstanding, the Lease term shall be the five (3) year period beginning on February 1, 1992 and ending on January 31, 1997; subject however, during the period commencing February 1, 11,92 and terminating January 31, 1995, to the Landlord's right to terminate the Leans term pursuant to the paragraph of the Leann entitled "cancellation" on page 6 of the Lease. EFTA00597031 3. During the period =flouncing upon February 1, 1995 and throughout the remainder of the term of the Lease, the paragraph of the Lease entitled "Cancellation" on page 6 of the Lease shall be asended to read as follows* In the event that custodial responsibility for the Premises is relinquished by the Department of State, thin Lease say be terminated upon one hundred twenty (120) days written notice prior to the rant due date to vacate the promisee without damage to Landlord. Otherwise, except in the cases of an uncured default by Tenant or unreparable damage covered in the paragraph entitled "TENANT'S DEFAULTSANDWO:LORD'S REMEDIES" Landlord will not terminate this Lease. 4. The rent payable under the Lease shall be as follovst Lease UAL Yonthlv Rent rebruary 1, 1992-January 31, 1994 $12,000.00 February 1, 1994-January 31, 1995 13,000.00 February 1, 1995-January 31, 1996 14,000.00 February 1, 1996-January 31, 1997 15,000.00 5. Upon the termination of the Lease Term, the Tenant shall have tha "right of first refusal" to release the Premises at the then fair market rental of the PrOM1S42. 6. Except as expressly amended hereunder, the Lease shall remain in full force and effect. BY: Nara: Harry W. Porter III (Type of Print) Title: Acting Director Dates August 28, 1992 015017CC EFTA00597032 EXHIBIT C EFTA00597033 UHL USE of the premises known as 34 EAST 69111 STREET by and between .TErTREY E. EP.STETN, as Overtenant anti iVAN FISHER, as Clothrtenant as or May 7, 1996 EFTA00597034 . • ' "1'A OLE OF -ONT E NTS SUCTION PAGE NUMBER 1. Lease Agreement. 1 2. Ovcrtenant's Duties. 3. Authority to Deal with Landlord. 2 4. Term. 2 5. Rent. 3 0. Sow. ity. 4 7. Agreements to Lefa,..: and to Pay Rent. 4 8. Successors and Assigns. 4 9. New Lease Agreement. 10. Improvements ✓w•ncd by Overtcnnnt. 6 11. Assignronnt. 12. Indemnification • 1,itigation. 7 11. Entire Agreement. 7 14. Notices. 7 15. Governing Law. 16. Waiver. 17. Scvcrabliity. 8 18. Headings. 9 19. Counterparts. 9 EFTA00597035 ABLE OF CONTENTS (Cont'd) Exhibit A Lease Agreement dated January 2, 1992 by and between Office of Foreign Missions, Department of State, as Landlord, and Jeffrey 11. Cpstcin, as Tenant (including Amendment thereof dated August 28, 1992). Schuiule A Schedule of Overtenant's Improvements. EFTA00597036 1311111,MASE AGREEMENT SUBLEASE AGREEMENT, effective as of May 7. 1996, by and between JEFFREY E. EPSTIUN (the "Overtenant"), havins an address at 358 El Brillo Way, Palm Beach, Fiorida 33480, and IVAN FISHER (the "Undcrtcnant"), having an address at 34 East 69th Street, Ncw York, Ncw York 10021. WITN'ESSETili WIIEREAS, the Overtenart is the tenant of those certain premises known as. and located at, 34 East 69th Street, New York, New York 10021 (the "Premises"), which Ovenenant leases from the Office or Foreign Missions of ate Department of State of the United States of America (the "Landlord"), upon the terms and conditions set forth in a certain Lease dated January 2, 1992 by and between the Landlord, as landlord, and the . Ova•-tenant, as tenant, as amended pursuant to that certain Amendment dated August 28, 1992 by and between the Landlord and the Overtcnant (the "Lease Amendment" and, together with such Lease, the "Lease Agreement"), a true and correct copy of which Lease Agreement is attached as Exhibit A to this Agreement; and WHEREAS, the Overtenant desires to subict the Premises to the Undertcnant, and the Undertenant desires to sublet the Premises from the Overt ant, upon the terms and conditions hereinafter net forth; NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants herein containtai, the parties hereto agree as Wows: I. firciatiellt. Except as otherwise provided herein, this Agreement is subject in ail respect:: to the Lease Agreement, die terms and conditions of which arc incorporated herein by this reference as ir fully set forth herein, and subject to any other agreement to which the Lease Agreement is subject. The Undertenant acknowledges that he has read and initialed the Lease Agreement and will not violate any of the provisions therein a?plying to the Tenant thereunder. Except as otherwise provided herein, as between the °vomit:nit and the Undertenant, (a) all provisions of the Lowe Agreement applying to the °venetiant shall be binding upon the Undertenadi as if the Undone:taut were the original Tenant under the Agreement, and (b) ail rights of the Landlo•ci provided in the Lan Agreement shall be rights of the Overtenant as if the Overtenan: were the original landlord in the Lease Agreement and tlx: Undertenant welc the original Tenant in the Lease Agreement. Anything to the contracy contained in fit Agreement or the Lease Anna:client notwithstanding, in the event that the Undertenant commits a non-munetary breach under this Agreement or ter:; Lease Agreement, this Agreement shall, at the optioa of the °vent:slant, be deigned to be terminated if the Undertenant fails to cure such breach within fourteen (14) days of notice thereof from the Oycrtenant. • • EFTA00597037 The °verb:rant represents that, after the execution of this Ago:timed', ho will not violate any provision of the Lease Agreement. except for any breach of the Lease Agreement caused bj the Undertenant. The Overtenant further represents that he has paid all lent rtspiircd to he paid to tho Landlord under the Lease. Agreement through the month er April 19% and that, promptly after he receives from the Undcrtenant each month's rent from and after the month or May 1990 through the end of the "Sub'oase Term" (as hereinafter defined), he will pay the corresponding rent payment to the Landlord under the Lease Agreement. Ail capitali..ed terms used and not othcrwise defined herein shall have the meanings ascribed to such terms in the Lease Agreement. The terms, conditions and provisions orthis Agreement shall supersede the Lease Agreement to the extent dad such terms, conditions aryl provisions directly contravene those of the Lease Agreement. Notwithstanding anything to the contrary provided in the foregoing, the Undertenant shall have no right of first refusal to purchase the Premises in the event that the Landlord should decide to sell same. 2. crepoteant's .flyties. The Larase Agreement describes the Lanctnrd's duties. The Ovcrtenant shall not be °blip; cti under this Agreement to perform the Landlord's duLiz.. under the Lease Agreement. fr ilw Landlord Fails to perform its duties under the Lease Agreement, the Undertenant shall give the Overtcnant notice of %qv;h ramie, whereupon the Overtcaant shall promptly give notice to the Landlord of such failure and deii; . ; ... tam the Landlord perform its duties under the Lease Agreement which it ittried to pexfoirn. The Overtenant shall send to the Undertenant a copy of each of the Over-a-nines notices of default and demands to cure to the. Landlord. promptly after the Ow:natant SC.1(iN the same 19 the landlord. In the event that the Overtenant fails to give notice of such failure to the Landlord within a reasonable period of time after the Overtenant receives notice of such failure from the Undertenant. then the Undcrtenant III contact the LaiAord directly and demand the l.andlortrs compliance. In the event that it is necessary to initiate legal action to compel the Landlord's compliance with respect to :Is utilizations uncle' the Lease Agreement. such legal action shall be at the sole cost itnil rspen.ie of the Uncle:ten:rat; provided, however, that the Overtenant will coo crate with the Undenenant in all reasonable respects, including by consenting to liciai; flied as a, or On, sole, party thereto, in connection with any such legal action coranameed by the Undertenant. 3. anthfizilyj t fkabAtiLl.a.ri.419.04. ExceN as provided in this Agreement, the Undertenant shall have no authority to contact, enter into agreements or make arrangements with, complain or send notices to, or otherwise deal with, the Landlord. The Lladcrtenant shah not pay rent or other charges under this Agreement to the Landlord and shall pay all such rent and other charges directly to the Overtenant. 'rm. The tarn of this Agreement shall commence on the date hereof and shall terminate on January 3I, 1997, unless sooner terminated or canceled by the Overtenant as hereinafter provided or renewed or extended as hereinafter provided 2 EFTA00597038 (the "Sublease T. Jan"). As between the Overienant and the Undertenant, Cto Overtenant shall have the same rights to terminate and cancel this Agreement and to cure the Undertenant's defaults under this Agrecinent and/or the Lease Agreement as the Landlord has to terminiCe or caned the Lease Agreement and cure the defaults c; the Overtenant under the Lctse Agreement. In the event that the Overtenant breaches the Lease Agreement and fails to timely dire the same (as provnitx1 in the Lease Agreement), then the Undertcnant shah have the right to curt such breach in order to prevent the termination of the Lease Agreement. In the event that the Lindertenant cures such breach, he shall be ei•tittcd to recover all reasonable costs and expenses incurred by the Underumant in doing the same. ;a the event that the Landlord institutes legal proceedings to le t...aate the Lease Agreement un the grouncis that this Agreement was eniered into, and that the Tiede tenant has taken possession of Inc Premises, without the Landlord's approval, the Overtenant shall take all steps neeessacy to defend this Agreement and the t Meld-tenant's possession of the Pollutes hereunder as being in compliance with the Lease Agreement. In the event that, as a result of such proceedings, the Undertenant is involuntarily dispossessed of, or otherwise forced, pursuant to a valid warrant of eviction or other order similar in effect, to vacate, the realises, then this Agreement shall be terminated as of the date of such dispossession or eviction. In the event of such dispossession or eviction, the Undertenant shall not be liable to pay the Overtenant installments of Rent Mr any months subsequent to tie: date of such dispossession or eviction, but shall remain liable for all unpaid installments of Rent for periods prior to the date of such disirossession or evicticn. the event ofsuch a dispossession or an eviction, the Undertenant acknowledges that the Overtenant shall have no further liability to the Undertenant, under this Agreement or otherwise. in connection with the. Premises, except that the Overtenant shall return to the Undertenant any portion of the Security Deposit (as hereinafter defined) duc to the Undertenant in accordance with Section 6 hereof and refund a py9 nun portion of the Rent installment paid (or the month during which such dispossession or eviction took place, based upon the number of days remaining in such month after the date of dispossession or eviction. S. [tent. The IMdertcnant shall pay the Overtenant rent for the Undertenant's use and occupancy of the Premises during the Sublease Term (excluding any extensions or renewals of the Sublease Term) in the aggregate amount of One hundred Seventr-Seven Thousand Ninety-Six and Seventy-Seven Hundredths (5177,096.77) Dollars (di.: "Rent"). The Undertenant shall pay the Overtenatu the Rent in nine (9) monthly installments. Ths first such installment, consisting of Seventeen Thousand Ninety-Six'and Seventy-Seven Hundredths ($17,096.77) Dollars, shall be due from the Undertenant upon the execution of this Agreement. Each of the eight (8) successive installments thereafter shall be in the amount of Twenty Thousand ($20,000) Dollars and shall be due on each of the first (1st) day of June 1996 and the first (1st) day of each of the seven successive months thereafter. In the event that this Agreement is extended as provided in Section 9 hereof, then the Undertentutt shall pay the Overtcnant additional rent as provided in Section 9 hereof on the first (1st) day of each month during EFTA00597039 such e.'iendcd term of this Agreement (or the Undertenant's use and uccup; .y of the Prahises &jog such extended turn. A late fee shall be assessed against the Undertcnunt for each iastallmert of Rent or additional rent, or portion thereof, which is received by the Overtutant after the tenth (10th) day of the month in which -aril installment of Rent ort, Albion:it rent is du.: hereunder. Such late fee shall be equal to two (2%) percent of the" 400 installment of Rent or additional rent, or portion Illefoof, which was received after such tenth (10th) day and will be paid upon demand by the Overtenant. If the Undertenant fails to pay any sut.it laic fee promptly after the Overtenant makes de..und for the same, then the Overtenant shall have the same rights against the Undertenant for such failure to pay as the Ovencnant would have against the Undertenant in twca that the Undertenant failed to pay any installment of Rent or additional rent due under this Agreement. 6. Segiray. As security for the faithful and timely performance by the Undertenant of his obligations tinder, and compliance by the Undertenant with, the provisions of this Agreement and the Lease Agreement, the Undertenant shall pay the Overtenant Twenty Thousand ($20,000) Dollars concurrently with the execution of this Agreement (the "Security Deposit"). The Overtenant shall hold and apply and/or return the Security Deposit in the same manner as the LandlonJ is required to hold, apply and/or return the Overeaant's security deposit pursuant to the Lease Agreement. 7. AiweemeRtS lalicase atis.USLIN3LgettS. The Overtenant shall sublet the Premises to the Undertenant, and the Undertenant shall sublet the Premises from the Overtenant, upon the terms, malitions and other provisions set forth in this Agreement. The Undertenant agrees io pay the Rent and additional rent under this Agreement and other charges required to he paid under this Agreement or the Lease Agreement and to comply with evcry'provision of this Agreement and the Lease Agreement with which he is hereunder required to comply. 8. Sucespora and Assigns. This Agreement is binding upon, and shall inure to ;lie benefit of, the parties hereto. and the permitted successors, assigns, heirs, and legal representatives thereof. 9. b!pw Lea m Aereeiesat. (a) 'NA: Lease Term of the Lease Agreement axpires on January 31, 1997. In the event that the Lease Agreement is renewed or extended or the Landlord utters into a new lease agreement with the Overtcnnnt or the Undertenant with respect to the use and occupancy of tae Premises after the expiration of the Lease Term of the Lease Agreunent (whether by passage of time, termination or cancellation), then: ;a) in the event that the Lease Agreement is extended or renewed and the rent required to be paid under the terms of the extended or renewed Lease Agee :tient is not in excess of Twerty Thousand ($20,000) Dollars per month, this Agreement shall automaiiudly be deemed to be extended for the full term of the extended or renewed Lem:-.: Agreement, and all of the provisions hereof shall equally apply to the 4 EFTA00597040 extension of this Agreement, except that rent charged ander this Agreement Car the extended term hereof shad be equal to the rent charged under the provisions of the extended or renewed Lease Agreement; (ii) in the event that the Overienant enters into such n new lease agreement with the landlord and the rent required to be paid under the terms of the new lease agreement is not in excess of Twenty Thousand ($20,000) Dollars per month, then the Overenant and the Undertenant shall automatically be deemed to !lave entered into a new sublease agreement, upon the terms, conditions and provisions set forth in this Agreement, except that rent charged under the new sublease agreement shall be equal to the rent charged under the provisions of the new lease agreement; or (iii) in the event that the IJndenenant enters into such a new lease agreement with the Landlord, then at the end of the Sublease Term, the Overtenant shall have no further liability to the Undertenant, except to return any portion of the Security Deposit which was not applied in accordance with Section 6 hereof, and the Undertenant shall have no further obligations to the Overtenant under this Agreement, except for those obligations arising prior the end of the Sublease Term and except as hereinafter set forth. (b) In the event that the Lease Agreement is extended or renewed as aforesaid for a term of no less than three (3) years or the Landiord is ready, willing and able to enter into a new lease agreement with the Overtenant or the Undertenant with respect to the use and occupancy of the Premises for a term of no less than three (3) years alter the expiration of the Lease Term of the Lease Agreement (whether by passage of time, termination or cancellation), then, promptly after the Overtenant gives the Undertenant notice of such extension, renewal or of the landlord's bcin8 ready, willing and able to enter into the new lease agreement, the Undertcnant shall pay the Overtenant the sum of lefty-Five Thousand ($55,000) Dollars, representing paymod to the Overtenant for the Underienant's use of improvements made by the Overtenant to the Premises; provided, however, that, if the rent required to be paid under the terms of any xueli renewed, extended or new lease agreement is in excess of Aventy Thousand ($20,000) Dollars per month, then the Undertenant shall have no obligation to pay such Fitly-Else Thousand ($55,000) Diniar sum to the Overtenant, unless the Underterient agrees nevertheless to continue to occupy the Premises during the term of such extended, renewed or new lease agreement. (c) Unless :he Undertenant obtains the Landlord's a(recn'ent to enter into a new lease agreement with the Undertenant at the end of the Lease Term, the Overtenant shall t..ke seeps necessary to cause the Lease Agreement to be renewed or extended in aecoreance with the term:, thereof, including, without limitation, commencing an:' maintaining, at the Overtcnant's sole cost and expense, legal proceedings, including are:. nod appellate court proceedings, in a court of competent jurisdiction. EFTA00597041 (d) Ln the event that the Landlord consents, during the initial Sublease Tcrrn or any extended tam of this Agreement, to the Overtenant's assignment of its rights and obligations under the Lease Agreement to the Undertenant, that, upon notice given by the Overtenant to the Undcrtcnant of such consent, the Undcrtcnant shall he deemed to have accepted such an assignment from the Overtennnt and to have assumed all of the obligations to be performed by the Ova-tenant thereunder from and after the date of such notice, In the event that, at any time prior to the expiration of the initial Sublease Term, such assigarnent and assumption takes place, the Landlord terminates the Lease Agreement and enters into a new lease agreement with the Undcrtenant, or the Overtenant terminates this Agecuncnt as ti result of a breach of this Agreement or the Lease Agreernen. by the Undet tcnant, then upon :inch assignment, the execution by the Landlord and the Underwent etsuch new tease agreement, or the termination of this Agreement as a result of such bran l% as the case may he, the Undcrtcnant shall pay the Overtenant for imprevements made by the Overtenant to the Premises an amount equal to the difference of (i) One Hundred Thousand ($100,000) Dollars, less (ii) the product of $5,000 multiplied by the number of installments of Rent which the Undcrtcnant had already paid to the Overtenant as of the date of such assigtuniuu, es:ration or termination, as the case may be. From and alter the date of such assignment, execution or termination, as the case may be, neither party hereto shall have any further liability to the other party hereto, under this Agreement or otherwise, except that the Undcrtcnant shall be liable to the Overtcnant la the foregoing payment and for All installments of Rent due through the date of such assignment and assumption. In the event of such assignment and assumption, the °verve:ant may, at its discretion, assign the Security Deposit to the Landlord in exchange for the release of ail or a portion of the security deposit of the Overtenant which is then being held by the Landlord. 10. alsrlrirMilis —Ckv.aCti QYcLign4111. The Undcrtcnant acknowledges tIke all property listed on the schedule attached to the tease Aettement which is eetitlai "Chandeliers, Sconces and Mirrors." all improve rents listed on Schedule A athletic,: hereto. and all hardware or other property constituting part of the alarm system :or the Premises arc the suit property of the Overtenant and shall not be disposed of without the Overuntant's prior mitten consent, which consent may be granted or withheld in the sole, absolute and unfettered discretion of the Overtenut. The Undertenan; acknowledges that the Ovenenant is a party to an agreement relating to the security alarm system for the Premises and agrees to assume, be bound by and fully perform the Overtenant's obligations under said agreement. 11. bssigemcl. The Overtenant may not assign this Agreement 0. its rights sad obligations henunclec withuat the prior consent of the Undcrtcnant, which consent shall not be unreasohably withheld. In the event that the Over tenant assigns this Aereement, then the Undertenant shall no longer be subject to the restrietiots set forth in Section 3 athis Arrcement relating to the Undenenant's dealing with the Landlord. 'flit Untkertenant .shall• not assigr. this Agra:mem or sublet the Premises without the prior c0nsent‘ of the Overtcnare, which consent may he granted or withheld in the sole, absolute and unfettered discretion of the Overtenant. EFTA00597042 12. Indemnification; Liticojeop_, (a) The Undcncnant shall indemnify the °venetian( and hold the Ovcrienant harmless from and against any and all liabilities and losses suffered by the Own-tenant (including, without limitation, amounts paid in respect of judgments or fines or in settlement of litigation and expenses, including attorney's Ices, reasonably incurred by the Overtcnant in connection with any pending or threatened titillation or proceedirg) arising out of, relating to, or connected with, in anyway whatsoever, the Undertentint's use and °cur—gr.:), of the Premises and/or the Undertenant's failure to comply with the provisions of tins Agra:mat and/or the Lease Agreement.. (b) Notwithstanding anything to the contrary provided in this Agreement, the Overtenant shall not be deemed under any provision of this Agreement to be required to expend or incur aggregate expenses and casts (including, without limitation, attorney's fees and disbursements) in excess of Fifty Thomatral ($50,000) Dollars fur, as a result of anti/or in connection with all local proceedings under, in respect or, arising out or", tic relating to, this Agreement and/or the Lease Agreement. in the event that said aggregate expenses and 'cats of the Ova-tenant exceed St: it amount and the Overtenant desires to discontinue ils earicipation in any such legal proceeding, the Ovenenant shall not discontinue its participation in such proceeding for so long as the Undo-tenant pays all of the Overtenant's costs and expenses in excess of ..ach aggregate amount. 13. faircLAwsginenl. This Agreement contains the entire agreement of the parties hereto concerning the subject matter hereof, and supersedes any and all prior agreements among the parties hereto concerning the subject matter hereof, which prior agreements arc hereby canceled. This Agreement may only be changed, modiried or amended by an ttgreement in writing, signed by the parties hereto. Pl. Notices All notices, requests. reports. instructions, consents and ,,her communications required or permitted to be µven under this Agreement shall be in writing and shall he deemed to have been duly sent or given, if delivered by hand or certified mail. return receipt requested, postage prepaid, to the patties hereto at the following addresses (or to such other address as shall be specified by like notice, provided that notices of a change of address shall be effective only upon receipt thereof): (a) jf to the Overtenant to: Jeffrey E. Epstein 358 El Maio Way Palm Beach, Florida 33480 7 EFTA00597043 with a copy to: Jeffrey A. Schantz, Esq. I. iipstein te Company 457 Madison Avenue 4th Floor New York, New York 10022 (b) if_t_p_Owjlativrtenant. to: Ivan Fisher 34 East 69th Street New York, New York 10021 Notices delivered by hand shall be effectivc upon delivery, and notic,..:i sent by certified mail, itturn receipt segue:dad, postage prepaid, shall be effective five days after dispatch. 15. chwqrvit law. This Agreement shall be governed by, and construed and caromed in act:on:a:Ace with, the laws of the State of New York applicable to zontracts excaited and to be fully performed therein, without giving Oka to conflicts of law principals thereof. 10. Waiver. No failure or dtday on the part of any party hereto in the exercise of any power, right, or privilege he, etinder or under the Lease Agreement shall constitute a waiver thereof, nor shall any single or partial exercise of any such power, right and privilege- constitute a further waiver thereof or of any other provision of this Agxement or the Le:rac Agreement. All rights and remedies existing under this Agreement and the Lease Agreement arc cumulative of, and not exclusive of, any rights or remedibs otherwise available. 17, Spiel-A.:4 4y. Any term or provision of this Agreement or the Lease Agreement that is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction. . be ineflitaive iv the extent' of such invalidity or unenforecablility without rendering invalid'' or unenforceable the remaining terms and provisions of this Agreement and the Lease Agreement or alteeling the validity or enforceability of any of the terms or provisions of this Agreement and the Lease Agreement in any other jurisdiction. The parties hereto expressly acknowledge that this Agreement and the Lease Agreement embodies their intentions. Should any part of this Agreement or the Lease Agreement be declared invalid or unenforct.itble, the parties hereto expressly obligate themselves to effectuate the intent of such invalid or unenforceable part of this Agreement oi the Lease Agreement in a manner that is lawful ah,u enforceable. EFTA00597044 18. kleadinits.: The Section headings use.: in this Agreement ace for convenience of reference only and shall not be construed as imps tin) limiting or expanding any meaning of the provisions of this Agreement which follow such headings. 19. courtterparls. Fur the oanvenierrc or the parties hereto, any number of counterparts or this Agreement may executed by the parties hereto, and each such executed counterpart shall be, and shall be deemed to be, an original hereof, and all of such counteeptuts :v ether shall be one and the same instrument. IN WITN1.',SS WHEREOF, the panics hereto have executed this Agreement as of the date of the day, month and year first above writ The Qyerterom: The Under, • ii 9 EFTA00597045 SCHEDULE A SCHEDULE OF 0VEI4TENANT'S IMPROVEMENTS 1. The telephoue system on the Premises. 2 All curtains cm the Premises located in the following rooms. the living room, the dining room and the study. 3. All lighting fixtures on the Premises, except those set forth in the attachment to the Lease Agrcancnt entitled "Chandeliers, Sconces, Mirrors." 4. !All carpeting on the Premises. 5. All aluicmcnt on the Premises located in the steam room. 6. The window air conditioning units on the Premises located in the following rooms: the exercise room, the master bedroom, and the main kitchen. 7. The large refrigerator located on the. Premises in the 6th floor kitchen. a EFTA00597