EXHIBIT 10.32
SUBLEASE
SUBLEASE (this "Sublease"), dated as of June 24, 2004, by and between
SILVERCREST ASSET MANAGEMENT GROUP, LLC, a New York limited liability company,
successor in interest to Xxxxx X. Xxxxxxx & Co., Inc., having an office at 0000
Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Sublandlord"), and CASTLE
BRANDS (USA) CORP., a Delaware corporation, having an address at 00-00 Xxxxxx
Xxxxxx, Xxxxx X, Xxxx Xxxx, XX 00000, ("Subtenant").
W I T N E S S E T H:
WHEREAS, pursuant to a lease by and between 000 Xxxxxxxxx Xxxxxx Company,
LP, a New York limited liability company ("Landlord"), as landlord, and
Sublandlord, as tenant, dated as of April____, 1998, (the "Master Lease"),
Landlord did demise and let unto Sublandlord, and Sublandlord did hire and take
from Landlord, certain premises consisting of the entire rentable area of the
twenty-ninth (29th) floor, as more particularly identified in the Master Lease,
in a building known as and by the street address of 000 Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx (the "Building"); and
WHEREAS, Subtenant acknowledges and represents that it has received and
reviewed the Master Lease, a current copy of which is attached hereto as Exhibit
A and made a part hereof, except as hereinafter provided; and
WHEREAS, Sublandlord wishes to sublet to Subtenant, and Subtenant desires
to hire and rent from Sublandlord the premises as more particularly described on
the floor plan attached to the Master Lease which consists of all the premises
demised to Sublandlord under the Master Lease (the "Premises") and Subtenant is
desirous of hiring and taking the Premises from Sublandlord, upon the terms,
covenants and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and promises
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Sublandlord and Subtenant hereby
agree as follows:
1. TERM. Sublandlord hereby subleases to Subtenant, and Subtenant hereby
hires from Sublandlord, the Premises for the purposes, and in compliance with
the terms, set forth in Article 2 of the Master Lease, for a term commencing on
the date Sublandlord delivers vacant possession thereof to Subtenant, on not
less than fifteen (15) days' prior notice, subject to, and in accordance with
the terms and conditions of this Sublease, which date shall in no event be later
than August 15, 2004, and ending, unless sooner terminated pursuant to any of
the provisions of the Master Lease, this Sublease or pursuant to applicable law,
on March 30, 2008 (the "Expiration Date"), upon the terms and conditions set
forth in this Sublease. The provisions of this Section 1 shall be regarded as an
"express provision to the contrary" within the meaning of Section 223-a of the
Real Property Law of the State of New York.
2. BASE RENT. Subtenant shall pay to Sublandlord as and for base rent
("Base Rent") for the Premises the amounts set forth on Exhibit C attached
hereto and made a part hereof, payable in advance and without notice or demand,
commencing on the sixty-first (61st)
day after the Commencement Date (the "Rent Commencement Date") and on the first
day of each month during the term of this Sublease, except that Subtenant shall
pay to Sublandlord the first full monthly installment with Subtenant's execution
and return of this Sublease. If the Rent Commencement Date shall occur on a date
other than the first (1st) day or any calendar month then the Base Rent in
respect of such month shall be appropriately prorated based on the actual number
of days in such month.
3. ADDITIONAL RENT.
(a) In addition to the Base Rent set forth above, commencing on the
Commencement Date, Subtenant shall pay to Sublandlord as additional rent
("Additional Rent"), the following:
(i) additional rent equal to one hundred percent (100%)
("Subtenant's Proportionate Share") of all amounts payable by Sublandlord,
if any, pursuant to the Master Lease for Operating Expenses (defined in
the Master Lease), except that for purposes of this Sublease the Base
Operating Year (as defined in the Master Lease) shall be the calendar year
ended December 31, 2005;
(ii) additional rent equal to Subtenant's Proportionate Share of all
amounts payable by Sublandlord on account of electricity, as set forth in
Article 13 of the Master Lease, which is currently $1,438.41 per month as
indicated on the escalation statement attached hereto as Schedule 1, and
which is subject to adjustment as provided in the Master Lease;
(iii) additional rent equal to Subtenant's Proportionate Share of
any Taxes (as defined in the Master Lease) as set forth in Section 27.01
of the Master Lease, except that for purposes of this Sublease,
Subtenant's Base Taxes shall be deemed to be actual Taxes for the period
July 1, 2004 to June 30, 2005;
(iv) additional rent equal to Subtenant's Proportionate Share of any
and all additional rent payable by Sublandlord under any other provisions
of the Master Lease during the term of this Sublease (other than amounts
payable as a result of Sublandlord's breach of the Master Lease, which
breach is not caused by or attributable to a breach by Subtenant of this
Sublease);
(v) the cost of any additional services or materials requested of
Landlord by or on behalf or at the request of Subtenant; and
(vi) any other amounts payable by Subtenant pursuant to the
provisions of this Sublease.
(b) The aforesaid Additional Rent shall be payable by Subtenant to
Sublandlord upon the later of (i) five (5) days prior to the date Sublandlord,
as tenant under the Master Lease, is required to make a corresponding payment,
if any, for each item of Additional Rent, to the Landlord, or (ii) twenty (20)
days after presentation by Sublandlord to Subtenant of the bills therefor,
whether issued during or after the term of this Sublease. This paragraph 3 shall
survive the expiration or earlier termination of this Sublease.
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(c) Base Rent and Additional Rent is referred to in this Sublease
collectively as "Rent".
(d) Attached hereto and made a part hereof as Schedule 1 are copies of
Sublandlord's most recent bills received from the Landlord reflecting the
current amounts charged under the Master Lease to Sublandlord for Operating
Expense, Taxes and electricity charges.
4. PAYMENT OF RENT. All Rent shall be paid to Sublandlord, or as
Sublandlord may direct by notice to Subtenant, in lawful money of the United
States of America which shall be legal tender for payment of all debts and dues,
public and private, at the time of payment, at the principal office of
Sublandlord, or such other place as Sublandlord may by notice designate, without
any abatement, deduction, set-off or counterclaim whatsoever, except to the
extent expressly provided in this Sublease or incorporated herein from the
Master Lease. Sublandlord shall have the same remedies for default in the
payment of Additional Rent as for default in the payment of Base Rent.
5. CONDITION OF PREMISES.
(a) The Premises are hereby sublet and shall be delivered "broom clean"
to Subtenant on an "as-is" basis on the Commencement Date, free of all liens,
occupants and personal property (other than the Furnishings (as hereinafter
defined)). Acceptance of the Premises by Subtenant shall be conclusive evidence
that the Subtenant has inspected the Premises and found them to be satisfactory
for Subtenant's occupancy as of the date of this Sublease except as to latent
defects and provided that Subtenant shall be afforded an opportunity to inspect
the Premises before taking possession and any patent defects due to damage
subsequent to such inspection and prior to delivery of possession or found upon
such inspection shall be repaired.
(b) Neither Sublandlord nor Sublandlord's agents or representatives
have made any representations, warranties or promises with respect to the
condition, quality, permitted use, restrictions, value or adequacy of the
Premises and no rights, easements or licenses are granted by Sublandlord or
acquired by Subtenant, by implication or otherwise, except as expressly set
forth in this Sublease.
6. RIGHTS OF SUBTENANT. Subtenant shall be entitled to the benefit of all
of the rights and remedies of the tenant and all of the obligations of Landlord
pursuant to the Master Lease with respect to the Building and the Premises
including, but not limited to, Landlord's obligations to repair and restore and
provide or render work and services, if any, and Subtenant acknowledges and
agrees that such obligations are and shall be the responsibility of Landlord and
not those of Sublandlord. In the event Landlord shall fail or refuse to comply
with any of the terms of the Master Lease affecting the Premises or the use or
occupancy thereof by Subtenant or anyone claiming by, under or through
Subtenant, Subtenant may notify Sublandlord, and Sublandlord, at Subtenant's
request, shall take any action reasonably requested by Subtenant in accordance
with the Master Lease to enforce the provisions of the Master Lease against
Landlord, all at Subtenant's sole cost and expense (unless the Landlord's
failure or refusal to comply is as a result of Sublandlord's default under the
Master Lease with respect to an
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obligation not assumed by Subtenant under this Sublease in which case
Sublandlord shall cure its default). If Sublandlord shall fail to take any
action reasonably requested by Subtenant to enforce the rights of Sublandlord or
the obligations of Landlord or obtain a recovery against Landlord, in each
instance, with respect to the Master Lease, the Premises and/or the Building, as
set forth above, then, upon seven (7) days prior notice to Sublandlord,
Subtenant shall have the right, in its own name (or in the name of the
Sublandlord, if Subtenant cannot bring an action, proceeding or make demand in
its own name due to lack of privity or otherwise, or if Subtenant shall have
obtained Sublandlord's prior written approval of the use of its name, not to be
unreasonably withheld or delayed, and Subtenant shall indemnify and hold
Sublandlord harmless from and against any and all damages, losses, penalties,
fines, costs or expenses, including, without limitation, reasonable attorneys'
fees and costs, which Sublandlord may incur or be subject to as a result of any
action taken by Subtenant in accordance with this paragraph, provided, however,
that if Subtenant retains counsel reasonably satisfactory to Sublandlord for the
prosecution of any action or proceeding or demand, Subtenant shall not have to
pay Sublandlord's counsel fees to monitor such action, proceeding or demand),
and at its own cost, to compel performance by Landlord pursuant to the terms of
the Master Lease. Subtenant shall have no claim against Sublandlord by reason of
Landlord's failure or refusal to comply with any of the terms of the Master
Lease and no such failure or refusal shall be deemed a constructive eviction
hereunder (unless the Landlord's failure or refusal to comply is as a result of
Sublandlord's default under the Master Lease with respect to an obligation not
assumed by Subtenant under this Sublease). This Sublease shall remain in full
force and effect notwithstanding Landlord's failure or refusal to comply with
any of the terms of the Master Lease, and Subtenant shall pay the Rent provided
in this Sublease without any abatement, deduction, set-off or counterclaim,
Subtenant's sole remedy being the right to have Sublandlord enforce the
provisions of the Master Lease against Landlord at Subtenant's cost as set forth
above, except if and to the extent that Sublandlord shall be entitled to and
actually receives an abatement for Landlord's action or inaction under the terms
of the Master Lease or at law or in equity occurring during the term of this
Sublease, then Subtenant shall be entitled to, and receive, a proportionate
abatement in Rent under this Sublease. Subtenant shall look solely to Landlord
(i) to provide any and all services and utilities required to be provided by
Landlord under the Master Lease, (ii) to make any of the repairs or restorations
that Landlord has agreed to make under the Master Lease, (iii) to comply with
any laws or requirements of public authorities with which Landlord has agreed in
the Master Lease to comply, and (iv) to take any action with respect to the
operation, administration, or control of the Building or any of its public or
common areas that the Landlord has agreed in the Master Lease to take; and
Subtenant shall not, under any circumstances, seek to require or require
Sublandlord to provide any of such services or utilities, make such repairs or
restorations, comply with such laws or requirements, or take such action, nor
shall Subtenant make any claim upon Sublandlord for any damages, costs or
expenses which arise by reason of the negligence, whether by omission or
commission, or intentional, willful or tortious acts of Landlord, unless
Subtenant is not permitted to make such claim directly against Landlord (in
which case any judgment obtained by Subtenant with respect to same shall be
satisfied solely out of any recovery Sublandlord or Subtenant acting in the name
of Sublandlord in accordance with the terms of this Sublease may obtain from
Landlord with respect to same, and not out of the personal assets of
Sublandlord), or unless Sublandlord fails to perform its obligations under this
paragraph 6 with respect thereto. Furthermore, Sublandlord shall have no
liability to Subtenant by reason of any inconvenience, annoyance, interruption
or
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injury to business or operations arising from Landlord's making any repairs,
alterations or changes which Landlord is required or permitted by the Master
Lease, or required by law, to make in or to any portion of the Building and/or
the Premises, or in or to the fixtures, equipment or appurtenances of the
Building and/or the Premises; provided however, Subtenant shall not be
prohibited from exercising its rights to enforce the provisions of the Master
Lease in accordance with the terms of this Section 6.
7. REMEDIES. In addition to such rights and remedies as it may have
pursuant to applicable law, if Subtenant shall default under this Sublease,
Sublandlord shall have against Subtenant all of the rights and remedies granted
to Landlord pursuant to the Master Lease in the event of a default by
Sublandlord, as tenant under the Master Lease. In addition to the other rights
Sublandlord may have under the Master Lease (as incorporated in this Sublease),
this Sublease or pursuant to applicable law, if Subtenant shall default under
this Sublease beyond the expiration of any applicable notice and cure periods,
then Sublandlord shall have the right, but not the obligation, without notice to
Subtenant in a case of emergency and otherwise after five (5) days notice to
Subtenant, without waiving or releasing Subtenant from any obligations
hereunder, to perform any such obligation of Subtenant in such manner and to
such extent as Sublandlord shall reasonably deem necessary. Subtenant shall pay
to Sublandlord within twenty (20) days after notice from Sublandlord (with
reasonable evidence of the amounts incurred), any and all actual, reasonable
costs incurred by Sublandlord in so doing, including, but not limited to,
reasonable attorneys' fees and costs, together with interest thereon (compounded
monthly) at a rate of interest equal to the lesser of twelve percent (12%) per
annum or the highest legal rate from the date such costs were incurred until the
date Sublandlord is reimbursed.
8. PROVISIONS OF THE MASTER LEASE.
(a) This Sublease is in all respects subject to the terms and
conditions of the Master Lease. Except as otherwise provided in this Sublease,
the terms, provisions, covenants, stipulations, conditions, rights, obligations,
remedies and agreements contained in the Master Lease are incorporated in this
Sublease by reference and are made a part hereof as if herein set forth at
length and each and every provision, term, condition and covenant of the Master
Lease binding upon or inuring to the benefit of Landlord thereunder shall, in
respect of this Sublease, bind or inure to the benefit of Sublandlord against
Subtenant, and each provision of the Master Lease binding upon or inuring to the
benefit of Sublandlord, as tenant thereunder shall, in respect of this Sublease,
bind or inure to the benefit of Subtenant against Sublandlord, with the same
force and effect as though those provisions were completely set forth in this
document. For the purpose of incorporation by reference of provisions of the
Master Lease into this Sublease, the words "Lessor" or "Landlord" or "Owner"
(whether or not capitalized) wherever used in the Master Lease, shall be
construed to mean "Sublandlord" and the words "Lessee" or "Tenant" (whether or
not capitalized) wherever used in the Master Lease shall be construed to mean
"Subtenant", and the words "Premises" or "Demised Premises" (whether or not
capitalized), or words of similar import, wherever used in the Master Lease,
shall be construed to mean "Premises" as defined in this Sublease, the words
"Agreement", "lease", "Lease", or words of similar import, wherever they appear
in the Master Lease, shall be construed to mean this Sublease, the word "rent"
and words of similar import, wherever used in the Master Lease, shall be
construed to mean the Rent payable under this Sublease, the words "term",
"Commencement Date" and "Expiration Date", or words of similar import, wherever
used in the Master Lease,
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shall be construed to mean, respectively, the term of this Sublease and the
dates set for the beginning and the end of the term of this Sublease, and the
words "sublease", "sublet" or "subtenant", or words of similar import, wherever
used in the Master Lease, shall be construed to refer to sub-subleases,
sub-sublettings and sub-subtenants, respectively, and any prohibitions on
assignment of the Master Lease by Sublandlord, as tenant under the Master Lease,
shall be deemed to prohibit Subtenant from assigning this Sublease. To the
maximum extent possible, the provisions of the Master Lease incorporated by
reference into this Sublease shall be construed as consistent with and
complementary to the other provisions of this Sublease, but in the event of any
inconsistency, those provisions of this Sublease not incorporated by reference
from the Master Lease shall control. Subtenant covenants and agrees to perform
and observe and to be bound by, all terms, covenants, obligations and conditions
of the Master Lease and the use thereof applicable to the tenant thereunder
except as provided to the contrary in this Sublease. Notwithstanding anything in
this Sublease to the contrary, Subtenant covenants and agrees not to do or
commit or suffer to be done or committed or fail to do any acts or things, or
create or suffer to be created, any conditions that might create or result in a
default or breach on the part of Sublandlord under any of the terms, covenants
or conditions of the Master Lease or render Sublandlord liable for any charge,
cost or expense thereunder (other than for "Sublease Profits", if any, under
Section 12.7 of the Master Lease).
(b) Notwithstanding anything in this Sublease to the contrary, for
purposes of incorporation by reference into this Sublease, the following
provisions of the Master Lease are deemed deleted from the Master Lease and are
expressly not incorporated into this Sublease, except as otherwise provided
below in this subparagraph (b):
Article 1; Section 3.5, 7.7, 19.1, 19.2, 19.3, Article 22, Article 26,
Section 28.8, Articles 31, 34 and 35.
For purposes of the following provisions of the Master Lease, the term
"Landlord", as used therein, shall mean Landlord only and not Sublandlord:
Section 3.1, 3.2, 3.3, 3.4, 6.1(B), 6.2, Article 8, Section 10.1, 10.2,
10.3 and Article 28 and Section 37.2.
The provisions of Article 7 of the Master Lease shall not apply to any
leasehold mortgage having Sublandlord as the mortgagor, and Sublandlord
represents that there is no leasehold mortgage encumbering Sublandlord's
leasehold interest in the Master Lease.
Sublandlord shall not object to any alteration of the Demised Premises,
assignment of this Sublease or sub-subletting of the Demised Premises, in whole
or in part, if Landlord consents thereto in accordance with the terms of the
Master Lease.
Nothing contained herein shall obligate Subtenant for (or relieve
Sublandlord of its obligations, if any, with respect to) removal of any existing
alterations or installations made by, or for Sublandlord prior to the
Commencement Date of this Sublease upon the expiration or sooner termination of
the term of this Sublease.
(c) In order to facilitate the coordination of the provisions of this
Sublease with those of the Master Lease, the time periods contained in the
provisions of the Master Lease
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that are incorporated by reference into this Sublease and for which the same
action must be taken under both the Master Lease and this Sublease (such as, for
example and without limitation, the time period for the curing of a default
under this Sublease that is also a default under the Master Lease, or for the
response to a request by Subtenant to Sublandlord which also requires Landlord's
consent), are changed for the purpose of incorporation by reference by
shortening or lengthening, as appropriate, that period in each instance by two
(2) business days such that in each instance Subtenant shall have that much less
time to observe or perform hereunder than Sublandlord has, as the tenant under
the Master Lease, and Sublandlord shall have that much more time to observe,
perform, consent, approve, or otherwise act hereunder than Landlord has under
the Master Lease.
9. INSURANCE.
(a) Subtenant shall, at its expense, obtain and keep in force and
effect during the term of this Sublease such insurance as is required to be
carried by Sublandlord as tenant under the Master Lease. Such insurance shall
name Sublandlord, Landlord and such other persons as Sublandlord shall designate
as additional insureds as their interest may appear.
(b) On or prior to the date Subtenant first enters into the Premises
(whether or not for the commencement of its ordinary business in the Premises),
Subtenant shall deliver to Sublandlord appropriate certificates of insurance,
including evidence of the waiver of subrogation required pursuant to the Master
Lease and covering Subtenant's contractual indemnity pursuant to paragraph 10 of
this Sublease, and the insurance required to be carried by Subtenant pursuant to
this paragraph 9. Evidence of each renewal or replacement of a policy shall be
delivered to Sublandlord at least thirty (30) days prior to the expiration of
such policy.
10. INDEMNITY. In addition to any indemnification provisions incorporated
herein from the Master Lease, Subtenant shall indemnify Landlord and
Sublandlord, and Landlord's and Sublandlord's respective members, directors,
officers, shareholders, employees, agents, lenders and managing agents
("Sublandlord Indemnified Parties") against, and hold the Sublandlord
Indemnified Parties harmless from, all claims, damages, losses, liabilities,
costs and expenses (including reasonable attorneys' fees and disbursements and
court costs) which any of the Sublandlord Indemnified Parties may incur, pay or
be subject to by reason of (i) the nonperformance or non-observance by Subtenant
of the terms, covenants, obligations and conditions of this Sublease or the
Master Lease (as applicable to Subtenant), and (ii) any tortious act or
negligence on the part of Subtenant, its agents, contractors, servants,
employees, invitees or licensees, and any claims made or damages suffered or
incurred as a result of Subtenant's or its agents, contractors, servants,
employees, invitees or licensees, occupancy of the Premises and/or the Building.
Nothing contained herein is intended to require Subtenant to indemnify any party
from any claim or liability arising from the negligence or intentional
misconduct of the indemnitee.
11. BROKER. Subtenant and Sublandlord hereby represent and warrant to each
other that neither has dealt with any broker or real estate agent in connection
with this Sublease other than CB Xxxxxxx Xxxxx ("CB") and Xxxxxxxx Xxxx Company
("Xxxxxxxx Xxxx") (CB and Xxxxxxx Xxxx being referred to herein, collectively as
the "Broker"). Subtenant and Sublandlord hereby agree to indemnify, defend and
hold the other harmless from and against any
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and all claims, losses, liabilities, costs and expenses (including reasonable
attorneys' fees and disbursements), resulting from any claims that may be made
against the other by any brokers, agents or persons claiming a commission, fee
or other compensation by reason of this Sublease, other than Broker, if the same
shall arise or result or claim to arise or result by, through or on account of
any act of the Subtenant or Sublandlord, as the case may be. Sublandlord shall
pay any fees due Broker in accordance with a separate agreement between
Sublandlord and Xxxxxxxx Xxxx. The foregoing notwithstanding, Sublandlord shall
indemnify, defend and hold Subtenant harmless with respect to any claims for
fees, commission or other similar compensation made by the Broker relating to
this Sublease. The indemnity provisions of this paragraph will survive
cancellation of this Sublease for lack of Landlord's consent.
12. SUBORDINATION. This Sublease is subject and subordinate to the Master
Lease as well as to all of the instruments and matters to which the Master Lease
is subordinate. If Landlord shall take over all right, title and interest of
Sublandlord under this Sublease, Subtenant shall attorn to Landlord pursuant to
the then executory provisions of this Sublease, except that Landlord shall not
(i) be liable for any previous act or omission of Sublandlord under this
Sublease, (ii) be subject to any offset, not expressly provided in this
Sublease, which thereto accrued to Subtenant against Sublandlord, or (iii) be
bound by any previous modification of this Sublease not delivered to Landlord or
by any previous prepayment by Subtenant of more than one month's Rent. Subject
to the provisions of Section 25(a) of this Sublease, if the term of the Master
Lease is terminated prior to the Expiration Date, this Sublease shall thereupon
be terminated automatically. In such event, provided Subtenant is not in
monetary default hereunder, the Rent (hereinafter defined) for the month in
which such termination occurs shall be pro-rated based on the actual number of
days in such month unless such termination was the result of a default by
Subtenant hereunder.
13. NOTICES. Any notice or other communication by either party to the
other relating to this Sublease (other than a xxxx or statement for Rent due
sent by Sublandlord, provided that this provision shall not be deemed to require
Sublandlord to send any xxxx or statement of Rent due) shall be in writing and
shall be deemed to have been duly given upon receipt when delivered to the
recipient party in person (against signed receipt) or three (3) days after being
mailed by United States Registered or Certified Mail, return receipt requested,
postage prepaid, or the next business day when sent by nationally recognized
overnight courier regularly maintaining a record of receipt, and addressed: (a)
if to Sublandlord, at the address hereinabove set forth, Attention: Xxxxxx
Xxxxx, with a copy sent in the same manner to Xxxxxx X'Xxxxxx, Esq., Wolf,
Block, Xxxxxx and Xxxxx-Xxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or
(b) if to Subtenant prior to its initial occupancy of the Premises, at the
address set forth at page 1 of this Sublease, and after its initial occupancy of
the Premises at the address hereinabove set forth, in either case, with a copy
sent in the same manner to Xxxx X. Xxxxxx, Esq., 000 Xxxx 00xx Xxxxxx, Xxx Xxxx,
XX 00000. Either party may by notice to the other party designate a different
address within the United States to which notices shall be sent.
14. ASSIGNMENT AND SUBLETTING. In addition to any restrictions on
subleasing and/or assigning set forth in the Master Lease and incorporated into
this Sublease by reference, Subtenant expressly covenants and agrees that it
shall not assign, mortgage, pledge or encumber this Sublease nor sublet the
Premises or any part thereof, nor suffer or permit the Premises or any part
thereof to be used or occupied by others, except with the prior written
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consent of Landlord, to the extent required under the Master Lease, and of
Sublandlord, which consent Sublandlord agrees not to unreasonably withhold,
delay or condition provided Landlord has consented (if required under the Master
Lease). If this Sublease be assigned, or if the Premises or any part thereof be
sublet or occupied by anyone other than Subtenant, Sublandlord may, after
default by Subtenant, collect rent from the assignee, subtenant or occupant, and
apply the net amount collected to the Rent reserved in this Sublease, but no
such assignment, subletting, occupancy, or collection by Sublandlord shall be
deemed a waiver of the covenant set forth above or the acceptance of the
assignee, subtenant or occupant as subtenant or a release of Subtenant from the
further performance by Subtenant of covenants and agreements on the part of
Subtenant contained in this Sublease. Sublandlord covenants and agrees to
respond to any request for consent from Subtenant pursuant to this paragraph 14
within the same period of time as the Landlord has to respond to such a request
from Sublandlord, as tenant under the Master Lease.
15. HOLDOVER. Subtenant expressly assumes the obligations of Sublandlord
to Landlord in the event possession of the Premises is not surrendered at the
Expiration Date or sooner termination of the term of this Sublease by Subtenant
or anyone claiming under or through Subtenant, including, without limitation,
the payment to Sublandlord of the greater of (i) two (2) times the Rent payable
under the Master Lease for the month prior to such termination and (ii) the then
fair market rental value for the Premises, as set forth in Article 20 of the
Master Lease, and all additional rent payable pursuant to the Master Lease, as
well as payment to the Landlord of any damages and costs, including, without
limitation, reasonable attorney's fees, payable by Sublandlord as a result
thereof.
16. CONSENT OF LANDLORD. Anything contained in this Sublease to the
contrary notwithstanding, this Sublease is subject to the written consent
("Consent") of Landlord to this Sublease, and notwithstanding the execution of
this Sublease by the parties hereto, the term of this Sublease shall not
commence until Sublandlord receives Landlord's Consent. Subtenant agrees to
provide to Landlord promptly, any financial information of Subtenant reasonably
requested by Landlord in connection with the issuance of such consent or
evaluation of Subtenant. If Landlord fails to deliver the Consent, on Landlord's
standard form and otherwise reasonably satisfactory to Sublandlord and
Subtenant, within thirty (30) days after this Sublease is submitted to Landlord
for its consent by Sublandlord (provided such delay is not caused by Subtenant's
failure to submit information requested by Landlord, in which event such thirty
(30) day period shall be extended one (1) day for each day of delay caused by
Subtenant's failure to provide such information), Subtenant shall have the
right, commencing on the thirty first (31st) day, to terminate this Sublease by
providing not less than five (5) days' prior written notice to Sublandlord prior
to receipt of the Consent by Sublandlord. Upon the expiration of such five (5)
day period, provided Landlord's Consent has not been obtained, this Lease shall
terminate, Subtenant shall receive a refund of all amounts paid by Subtenant to
Sublandlord on account of this Sublease, without any deduction or setoff
whatsoever and there shall be no further liability on the part of Sublandlord or
Subtenant under this Sublease. Sublandlord agrees to deliver a fully executed
copy of this Sublease to Landlord for Landlord's consent (with a copy to
Subtenant), within three (3) business days after Sublandlord's receipt of an
original of this Sublease executed by Subtenant. Landlord's Consent shall be
obtained by Sublandlord at no cost or expense to Subtenant.
9
It is a condition of this Sublease that the Landlord's written consent to
this Sublease contain the agreement of the Landlord that Castle Brands, (USA)
Corp., the "Subtenant" named herein may, on prior notice to Landlord and
Sublandlord in accordance with the terms of the Master Lease: (i) sublet the
Demised Premises (without any subdivision of the Demised Premises into more than
one separate independently serviceable unit of space, through construction of
demising walls, separate entrances and the like) to an "Affiliate" or
"Subsidiary" of Subtenant; or (ii) assign this Sublease to a "Successor". A
"Successor" of Subtenant shall mean: (A) a corporation, a partnership, limited
liability company or other entity in which, or with which Subtenant is merged or
consolidated, in accordance with applicable statutory provisions for merger or
consolidation, provided that by operation of law or by effective provisions
contained in the instruments of merger or consolidation, the liabilities of the
entities participating in such merger or consolidation are assumed by the entity
surviving such merger or created by such consolidation, or (B) a corporation or
other entity acquiring all or substantially all of the assets of Subtenant
including, without limitation, Subtenant's interest in this Sublease. A
"Subsidiary" shall mean any corporation or other entity that is owned or
controlled by Subtenant. An "Affiliate" shall mean any corporation or other
entity that owns or controls Subtenant or is owned or controlled by the same
person or entity that owns and controls Subtenant or a shareholder, manager,
member or joint venture partner of the Subtenant. Acquisition by Subtenant, of a
substantial portion of the assets, together with the assumption of all or
substantially all of the obligations and liabilities of any corporation or other
entity, shall be deemed a merger of such corporation or other entity into
Subtenant for the purposes hereof. In addition, a transfer, sale, pledge or
other disposition of fifty percent or more of the stock of Subtenant and a
transfer of a majority voting or ownership interest in any other entity that is
the Subtenant whether in one or a series of transactions shall be permitted
without Landlord's consent (i) by and between the individuals who are now
existing shareholders (or members) of Subtenant, to or with any member of the
immediate family of an existing shareholder or member of Subtenant by gift,
testate or intestate succession or sale, or to or with a family limited
liability company or other entity or person(s) for estate planning purposes,
(ii) involving an initial public offering of stock or shares traded on a
national securities exchange, or (iii) to effect a statutory change in form or
organization from a limited liability company to corporation or otherwise.
17. ENTIRE AGREEMENT/SUBLANDLORD'S CONSENT. This Sublease contains the
entire agreement between the parties relating to the subject matter hereof and
supersedes all prior negotiations, conversations, correspondence and agreements.
There are no representations or warranties that are not set forth herein. No
waiver, modification or termination of this Sublease or any portion thereof
shall be valid or effective unless in writing signed by the parties hereto. In
any instance in which Sublandlord is required by any provision of this Sublease
or applicable law not unreasonably to withhold consent or approval, Subtenant's
sole remedy if Sublandlord unreasonably withholds such consent or approval shall
be an action for specific performance or injunction requiring Sublandlord to
grant such consent or approval, all other remedies which would otherwise be
available being hereby waived by Subtenant subject to the understanding that if
Landlord consents to any matter Sublandlord will not refuse to consent.
18. SUCCESSORS AND ASSIGNS. The terms, conditions and covenants of this
Sublease shall be binding on and inure to the benefit of Sublandlord and
Subtenant and their respective successors, and except as otherwise provided in
this Sublease, their assigns.
10
19. GOVERNING LAW. This Sublease shall be governed by and construed in
accordance with the laws of the State of New York as if it were a contract
negotiated, entered into and wholly performed within the State of New York, and
without regard to principles of conflicts of law.
20. COUNTERPARTS. This Sublease may be executed in any number of
counterparts and/or by facsimile, each of which shall be deemed an original and
all of which, when taken together, shall constitute one and the same instrument,
binding on the parties as if all parties had signed one document on the same
signature page, and the signature of any party to any counterpart shall be
deemed a signature to, and may be appended or attached to, any other counterpart
by Sublandlord.
21. NO OFFER. The submission of this Sublease is not and shall not be
deemed an offer. This Sublease is submitted to Subtenant for its review and
discussion purposes only and neither Subtenant nor Sublandlord shall be bound
unless and until Subtenant and Sublandlord shall execute and deliver a copy of
this Sublease.
22. SECURITY.
(a) Subject to the terms of this Section 22, Subtenant shall, upon its
execution and return of this Sublease to Sublandlord, deposit with Sublandlord
as security for the full and faithful performance and observance by Subtenant of
the terms, provisions, covenants and conditions of this Sublease, and any
modifications hereof, the sum of $50,000.00 in cash ("Security"). If this
Sublease has not been terminated for a default of Subtenant, or if Subtenant is
not then in default of its obligations under this Sublease, the Security shall
be reduced to $35,000.00 eighteen (18) months after the term of this Sublease
commences.
(b) Sublandlord may, at its sole option, retain, use or apply the whole
or any part of the Security to the extent required for payment of any:
(1) Base Rent;
(2) Additional Rent;
(3) other sums as to which Subtenant is obligated to pay under this
Sublease;
(4) sums which Sublandlord may expend or may be required to expend
by reason of Subtenant's default after any required notice and the
expiration of any applicable grace or cure period under this Sublease;
(5) loss or damage that Sublandlord may suffer by reason of
Subtenant's default, including, without limitation, any damages incurred
by Sublandlord; and
(6) all costs, if any, incurred by Sublandlord in connection with
the cleaning or repair of the Premises.
11
(c) In no event shall Sublandlord be obligated to apply the Security,
or any portion thereof. Sublandlord's right to bring an action or special
proceeding to recover damages or otherwise to obtain possession of the Premises
before or after any default or termination of this Sublease shall not be
affected by Sublandlord's holding of the Security.
(d) The Security shall not be nor be deemed (1) a limitation on
Sublandlord's damages or other rights and remedies available under this
Sublease, or at law or in equity; (2) a payment of liquidated damages, or (3) an
advance payment of Base Rent or Additional Rent.
(e) If Sublandlord uses, applies or retains all or any portion of the
Security, Subtenant shall restore and replenish the Security to the amount
required originally deposited hereunder within five (5) days after written
demand from Sublandlord.
(f) Sublandlord shall keep the Security separate or segregated from its
own funds, and shall not commingle the Security with its own funds, as required
by law in an interest bearing bank account with the accrued interest (less a 1%
administrative fee to be retained by Sublandlord) to belong to the Subtenant.
Sublandlord shall have no fiduciary responsibilities or trust obligations
whatsoever with regard to the Security and shall not assume the duties of a
trustee for the Security.
(g) If Subtenant shall fully and faithfully comply with all of the
terms, provisions, covenants and conditions of this Sublease, and any
modifications hereof, any part of the Security then not used, applied or
retained by Sublandlord shall be returned to Subtenant within thirty (30) days
after Subtenant has discharged all of its then known obligations under this
Sublease, and any modifications hereof. In no event shall the release of the
Security, or any portion thereof, by Sublandlord be deemed to release Subtenant
from any liability under this Sublease, or affect Subtenant's indemnification
obligations under this Sublease, which arise, accrue or first become known to
Sublandlord after the release of any remaining Security (or such interest
thereon).
(h) Subtenant shall not, and shall not attempt to, assign, pledge or
otherwise encumber the Security, and Sublandlord and its successors and assigns
shall not be bound by any, or any attempted, assignment, pledge or other
encumbrance.
(i) In the event of a sale, assignment or transfer of Sublandlord's
interest in the Master Lease, Sublandlord shall transfer the Security to the
purchaser, assignee or transferee, as the case may be, and upon the purchaser,
assignee or transferee assuming in writing the obligations of Sublandlord under
this Sublease accruing from and after the date of such assignment and assumption
(including, but not limited to obligations as to the security deposit).
Sublandlord shall thereupon automatically be released by Subtenant from all
liability for the return of the Security, and Subtenant agrees to look solely to
the purchaser, assignee or transferee for the return of the Security.
(j) The payment by Subtenant and acceptance by Sublandlord of the
Security submitted by Subtenant shall not render this Sublease effective unless
and until Subtenant and Sublandlord shall have executed and each shall have
received a fully executed copy of this Sublease.
12
(k) For purposes of this Sublease, the phrase "Letter of Credit" shall
mean a clean, unconditional and irrevocable letter of credit which (i) is issued
by a bank or other institution satisfactory to Sublandlord having a retail
office in New York County, New York at which office the Letter of Credit may be
presented for payment, (ii) is for an amount equal to the Security, (iii) is for
a period of one (1) year from the date of issuance thereof, and thereafter
automatically renewable each year thereafter with a final expiration no earlier
than December 31, 2010, (iv) is payable to Sublandlord (Attention: Xxxxxx Xxxxx)
upon presentation only of a sight draft, (v) provides that prior to the
expiration or termination thereof, the issuer thereof will provide notice to
Sublandlord of the non-renewal or termination thereof at least sixty (60) days
prior to the expiration or termination thereof, (vi) is freely transferable by
Sublandlord without cost to Sublandlord, and (vii) is otherwise in form and
substance satisfactory to Sublandlord.
(l) In lieu of the cash Security, Subtenant shall have the right to
deposit and maintain with Sublandlord during the entire term of this Sublease a
Letter of Credit in the amount of the Security. If (i) any default beyond
applicable notice and cure periods occurs under this Sublease, or (ii)
Sublandlord transfers its right, title and interest under the Master Lease to a
third party and the issuer of the Letter of Credit does not consent to the
transfer of such Letter of Credit to such third party or if Subtenant at its
expense, upon request of Sublandlord, fails or refuses to replace the Letter of
Credit delivered to Sublandlord with a Letter of Credit issued to such third
party or (iii) Sublandlord receives notice or becomes aware that the issuer of
the Letter of Credit does not intend to renew it prior to the expiration
thereof, and Subtenant shall fail to provide a replacement Letter of Credit no
later than thirty (30) days prior to the expiration of the Letter of Credit then
in Sublandlord's possession then in any of such events, Sublandlord may, at its
option, draw down the Letter of Credit then in its possession in full prior to
the expiration thereof and the proceeds thereof shall then be held and
maintained by Sublandlord as the Security. Subtenant shall pay all costs and
expenses related to or in any way arising out of the performance by Subtenant of
its obligations under this paragraph, including, without limitation, the
issuance, delivery, replacement, draw upon, transfer, maintenance or other
matters relating to the Letter of Credit, it being understood that Sublandlord
shall incur no cost or expense in connection therewith. The foregoing
notwithstanding, if there is an assignment or other transfer of Sublandlord's
interest in this Sublease and the Security is held in the form of a Letter of
Credit, then Subtenant shall not be responsible for the payment of any transfer
charges of the issuer for changing the beneficiary and Sublandlord shall
surrender the Letter of Credit that it holds to the issuer thereof for such
purpose. If the Letter of Credit requires the applicant to pay any transfer
charges, then Sublandlord shall reimburse Subtenant therefor.
23. FURNISHINGS. Sublandlord hereby grants to Subtenant a license
("License"), for the term of this Sublease and at no additional cost to
Subtenant, to use and have the benefit of the furniture, furnishings, telephone
equipment and other personal property located in the Premises on the date of
this Sublease more particularly described on Exhibit D-1 attached hereto and
made a part hereof (collectively, the "Furnishings"). Notwithstanding the
foregoing, the items more particularly described on Exhibit D-2 attached hereto
and made a part hereof, shall not be deemed to be Furnishings, shall remain the
sole property of Sublandlord and shall be removed by Sublandlord prior to the
Commencement Date. The Furnishings are provided to Subtenant "as is" and "where
is" and Sublandlord makes no representation or warranty with respect to such
Furnishings, including, without limitation, fitness for a particular purpose,
except that Sublandlord represents that it owns the Furnishings free and clear
and that the same are not
13
subject to any lease or any security agreement. Subtenant hereby releases
Sublandlord from all, and shall indemnify and hold Sublandlord harmless from and
against any, losses, liabilities, claims, damages, and injuries caused by,
arising out of or relating to, the use of the Furnishings by Subtenant or its
employees, agents, contractors, sub-subtenants, officers or any other person
claiming by, through or under Subtenant. Subtenant may dispose of the
Furnishings as it sees fit without liability to Sublandlord for any Furnishings
missing or replaced at the end of the Term.
24. INTENTIONALLY OMITTED
25. SUBLANDLORD'S REPRESENTATIONS, WARRANTIES AND COVENANTS. Sublandlord
hereby represents and warrants to, and covenants and agrees with, Subtenant as
follows:
(a) Sublandlord covenants and agrees that Sublandlord will not
surrender or terminate or take any action which would cause the termination of
the Master Lease without the prior written consent of Subtenant. In the event of
a fire, casualty or condemnation which would trigger any right of Sublandlord to
cancel or terminate the Lease, Sublandlord agrees that it shall use commercially
reasonable efforts to cooperate with Subtenant in exercising Sublandlord's
rights, as tenant, under the Master Lease. Sublandlord's liability for breach of
the first sentence of this paragraph shall survive any termination of this
Sublease for lack of Landlord's consent (other than a termination of this
Sublease for Subtenant's default), provided that the reason for Landlord's
refusal to grant its consent was because the Master Lease was terminated by
Sublandlord in violation of the first sentence of this paragraph.
(b) Sublandlord warrants and represents to Subtenant that the Master
Lease attached hereto as Exhibit A is a true, correct and complete copy of the
Master Lease, is in full force and effect, and has not been modified or amended
except as expressly set forth herein.
(c) Sublandlord covenants and agrees that it shall not default in the
payment of its obligations to Landlord under the Master Lease, or otherwise
cause a default beyond the expiration of any applicable notice and cure periods
under the Master Lease.
(d) Sublandlord represents that it has received no written notice
claiming a violation of any applicable laws, governmental rules or regulations
with respect to the Premises.
(e) Sublandlord represents that it has not received any notice from
Landlord alleging a default by Sublandlord under the Master Lease that has not
been cured, and, to Sublandlord's knowledge, there is no default on the part of
either Sublandlord or Landlord under the Master Lease.
(f) Existing HVAC, plumbing and all other electrical and mechanical
systems serving the Premises are in working order.
(g) Sublandlord is not the debtor, defendant or respondent in any
pending bankruptcy, foreclosure, lease termination, landlord/tenant, insolvency,
receivership or other creditors' action or proceeding.
[Signatures follow on next page.]
14
IN WITNESS WHEREOF, the parties hereto have duly executed this Sublease on
or as of the day and year first above.
SUBLANDLORD:
SILVERCREST ASSET MANAGEMENT GROUP LLC
By: /s/ Xxxxxx Xxxxx
------------------------------------------
Name: Xxxxxx Xxxxx
Title: Chief Operating Officer
SUBTENANT:
CASTLE BRANDS (USA) CORP.
By: /s/ Xxxxxx Xxxx
-----------------------------------------
Name: Xxxxxx Xxxx
Title: VP - Finance
15
EXHIBIT A
Copy of the Master Lease Attached
EXHIBIT B
Floor Plan of the Premises Attached
1
EXHIBIT C
Base Rent Schedule
PERIOD ANNUAL BASE RENT MONTHLY BASE RENT
From Rent Commencement Date through the $147,440.00 $12,286.67
Expiration Date
1
EXHIBIT D-1
Inventory of Furnishings
1. Desks (10)
2. Credenzas (10)
3. Desk Chairs (12)
4. Visitor Chairs (12)
5. Glass Table Reception (1)
6. Meeting Room Chairs (6)
7. Meeting Room Table (1)
8. 5 Draw Files (13)
9. 3 Draw Files (18)
10. Small Glass or Wood End Tables (5)
11. Microwave (1)
12. Water Cooler (1)
13. Refrigerator (1)
14. Over-Head Storage (7)
15. PC Stands (6)
16. Lucent Phone System (1)
17. Lucent Voicemail System (1)
18. Phones (14)
19. SMC Ethernet Switch 24 Port (1)
20. Desk Top PC (1) and Television (1) in Xxxxxxxxxx Xxxx
0
XXXXXXX X-0
Items Retained by Sublandlord
FURNITURE TO SILVERCREST LOCATION
1 Desk Xxxxx Xxxxxx'x Office
2 Leather Reception chairs Reception Area
1 Couch (green) Xxxxx Xxxxxx'x Office
1 Chair (green) Xxxxx Xxxxxx'x Office
All desk top PC's (other than the Desk Top PC identified Per Office
in No. 20 in Exhibit D-1)
All printers Per Office
All servers Server Closet
3 Water color paintings Xxxxx Xxxxxx'x Office
2 Pen and Ink Architectural drawings Xxxxx Xxxxxx'x Office
3 Photos Xxxxx Xxxxxx'x Office
2 Paintings Conference Room
1 Water color painting Conference Room
2 Photos Bart's Office
2 Photos Bob's Office
1 Water color painting Bob's Office
1 Poster with Postage Stamps Dave's Office
3 Prints Empty Office
3 Prints Empty Office
2
SCHEDULE 1
Escalation Statement
3
