Exhibit 10.16
SUBLEASE
THIS SUBLEASE is made as of the 17 day of April 1998, by and
between JOS. A. BANK CLOTHIERS, INC., a Delaware corporation (hereinafter
called "Sublandlord") and SOURCEONE, L.L.C., a New York limited liability
company (hereinafter called "Subtenant").
RECITALS
WHEREAS, pursuant to the Lease Agreement by and between
Continental Stewart Warehouse Limited Partnership (hereinafter called the
"Landlord") and Sublandlord dated May 11, 1994 and amended March 26, 1998,
a copy of which is attached hereto as Exhibit I (as the same may be amended
from time to time, hereinafter called the "Lease"), Sublandlord is the
tenant of certain space consisting of approximately 51,062 square feet in
the building known as Continental Stewart Warehouse located at 4241
Brookhill Road, Baltimore City, Maryland 21215 (hereinafter called the
"Building") as shown on Exhibit A attached to the Lease (hereinafter called
the "Premises"); and
WHEREAS, Subtenant desires to sublease from Sublandlord all of the
Premises in the Building (hereinafter called the "Subleased Premises"); and
WHEREAS, the parties desire to enter into this Sublease defining
their respective rights, duties, and liabilities relating to the Subleased
Premises; and
WHEREAS, the effectiveness of this Sublease and the delivery of
the Premises to Subtenant is a condition to the effectiveness of that
certain Primary Supply Agreement dated as of April 16, 1998 (the "Supply
Agreement") between Sublandlord and MS Pietrafesa, L.P. ("Pietrafesa").
NOW, THEREFORE, WITNESSETH in consideration of the mutual promises
and covenants contained herein, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Sublandlord
and Subtenant hereby covenant and agree as follows:
SECTION 1
DEMISE
Sublandlord, for and in consideration of the payment of the rent
and the performance of the covenants hereinafter mentioned, does hereby
demise, lease and assign unto Subtenant, the Subleased Premises, for a term
(the "Term") from April 17, 1998 (hereinafter called the "Commencement
Date") to February 29, 2000 at which time this Sublease shall terminate.
SECTION 2
RENT
The rent during the Term hereunder (hereinafter called the "Annual
Rent") shall be payable in arrears, without demand, deduction, set-off,
recoupment or counterclaim, as
follows: for the period from the Commencement Date through July 31, 1999 at
the rate of $165,951.50 per year, payable in equal monthly installments of
$13,829.29 payable commencing June 1, 1998 and ending on August 1, 1999
(the period from the Commencement Date through April 30, 1998 shall be
prorated and paid together with the June 1, 1998 installment of Annual
Rent); $14,893.08 for the month of August, 1999 payable on September 1,
1999; and for the period from September 1, 1999 through February 29, 2000
at the rate of $208,503.12 per year, payable in equal monthly installments
of $17,375.26, payable on October 1, November 1, December 1, 1999 and
January 1, February 1 and March 1, 2000. Notwithstanding anything to the
contrary, contained therein, in the event Sublandlord shall lease space
from Landlord in the Bed, Bath and Beyond Shopping Center in Naples,
Florida and shall be given the benefit of the rent reduction set forth in
paragraph 2 of the March 26, 1998 amendment to the Lease, Annual Rent for
the period from September 1, 1999 through February 29, 2000 shall be
$14,893.08 per month.
SECTION 3
EXTENSION
There is no right of Sublease extension.
SECTION 4
SUBJECT TO LEASE
This Sublease is subject and subordinate to the Lease. The
Sections of the Lease listed below (except as may be inconsistent with
other provisions of this Sublease) shall be deemed a part of this Sublease,
with references in the Lease to "Landlord" deemed made to Sublandlord,
references to "Tenant" deemed made to Subtenant, and references to the
"Premises" deemed made to the Subleased Premises:
Section 2 Use
Section 3 Utilities
Section 4 Compliance with Laws
Section 5(a) Assignment
Section 6 Loading Capacity
Section 7 Increase in Landlord's Insurance Rates
Section 8 Indemnification - Liability Insurance
Section 9 Alterations
Section 10 Ownership of Alterations
Section 11 Repairs and Maintenance
Section 12 Tax/Insurance Escalation
Section 13 Tenant's Default
Section 14 Damage or Destruction
Section 15 Possession
Section 16 Exterior of Premises - Signs
Section 18 For Rent/Sale Signs
Section 19 Right of Entry
Section 20 Termination of Term
Section 21 Condemnation
Section 22 Subordination
Section 23 Attornment
Section 24 Parking and Common Facilities
Section 26 Non Waiver
Section 27 Successors and Assigns
Section 28 Condition at End of Term - Security Deposit
Section 30 Estoppel Certificates
Section 32 No Offer
Section 34 Existing Equipment
Section 35 Waiver of Jury Trial and Right to Counterclaim
Section 37 Landlord's Default
Section 39 Hazardous Substances
Section 40 Miscellaneous
SECTION 5
ASSIGNMENT
Notwithstanding anything contained herein or the Lease to the
contrary, Subtenant shall have no right to assign this Sublease, in whole
or in part, nor sublet the Subleased Premises, or any part or portion
thereof, nor grant any license or concession for all or any part thereof,
without the prior written consent of the Sublandlord which may be withheld
for any reason or for no reason. Subtenant agrees to seek Sublandlord's
prior written consent for the assignment of this Sublease to an "affiliate"
of Subtenant, which consent shall not be unreasonably withheld. Subtenant
agrees that any such assignment without the prior written consent of
Sublandlord shall be null and void.
SECTION 6
REPAIRS AND MAINTENANCE
Notwithstanding anything contained herein or the Lease to the
contrary, Sublandlord shall have no obligation to repair or maintain the
exterior masonry, walls, structural components, roof or other portion of
the Subleased Premises. In the event that a condition exists in the
Subleased Premises that Landlord is obligated to repair under the Lease,
Subtenant shall so advise Sublandlord, and Sublandlord, in turn, shall
promptly advise Landlord thereof. Sublandlord shall have no liability to
Subtenant for Landlord's failure to make any such repair; provided that
Sublandlord exercises its rights in good faith and in a timely manner to
procure such performance by the Landlord.
SECTION 7
DOCUMENTS
Notwithstanding anything contained herein or the Lease to the
contrary, Sublandlord shall have no obligation to provide Subtenant with
any tax bills, utility charges, insurance premium reports or any other
documents relating to the Premises or relating to Landlord's ownership or
operation of the Premises, except to the extent that Landlord or
Sublandlord seek reimbursement or direct payment by Subtenant of amounts
evidenced by such amounts.
SECTION 8
POSSESSION
Notwithstanding anything contained herein or the Lease to the
contrary, under no circumstances shall Sublandlord be under any obligation
to Subtenant for failure to deliver possession of the Subleased Premises to
Tenant on the date herein specified. Subtenant's sole remedy for
Sublandlord's failure to deliver the Subleased Premises is to terminate the
Sublease; provided, that Sublandlord acknowledges that until such failure
is remedied,(i) Subtenant shall have no obligation to make any payment to
Sublandlord hereunder and (ii) the Supply Agreement shall not be effective.
This shall not be a continuing condition and Subtenant's acceptance of the
Premises shall satisfy same. Sublandlord undertakes no obligation to
perform work to prepare the Subleased Premises for Subtenant's occupancy.
SECTION 9
SUBORDINATION AND ATTORNMENT
Subtenant agrees that this Sublease shall at all times be
subordinate to the lien of any of Landlord's mortgages and/or deeds of
trust unless the mortgagee or the holder of such mortgage or deed of trust
elects to have Subtenant's interest hereunder superior to the interest of
said mortgagee or holder of such deed of trust. Subtenant further agrees to
attorn to any assignee of Landlord.
SECTION 10
OPERATING COSTS
Notwithstanding anything contained in the Lease to the
contrary, Subtenant shall pay all operating costs of any nature whatsoever
in connection with the Building or the Premises, except such any costs
arising as a result of a breach by Sublandlord of its obligations under the
Lease (to the extent that such breach is not due to a breach by Subtenant
of its payment obligations hereunder).
SECTION 11
INDEMNITIES
11.1. Compliance with Environmental Laws.
Subtenant shall comply in all respects with all "Environmental
Laws" (as hereinafter defined) now in force or which may hereafter be
enacted or promulgated applicable to the Premises and the conduct of
Subtenant's business at the Premises.
Sublandlord represents that it has complied in all respects
with all "Environmental Laws" applicable to the Premises for the period
from May 12, 1994 to the date hereof (the "Environmental Indemnification
Period").
11.2 Indemnities
Subtenant does hereby indemnify and hold Sublandlord harmless
against all Environmental Liabilities and Costs (as hereinafter defined)
to the extent that such Environmental Liabilities and Costs arise from the
operation of the Premises during the Term;
Sublandlord does hereby indemnify and hold Subtenant and
its affiliates harmless against, (i) Environmental Liabilities and
Costs arising from the operation of the Premises during the Environmental
Indemnification Period, (ii) any Release that occurred during the
Environmental Indemnification Period, or (iii) any noncompliance with any
Environmental Laws during the Environmental Indemnification Period, except
that Subtenant shall be responsible to the extent any aggravation of or
contribution to any such Release is caused by Subtenant noncompliance of
any Existing Environmental Condition during the Lease Term.
Sublandlord does hereby assign to Subtenant all of its right,
title and interest to the Landlord's indemnification of Sublandlord set
forth in Section 39 of the Lease.
11.3. Definitions.
For purposes of this Section, the following definitions shall
apply:
"Environment" means navigable waters, waters of the contiguous
zone, ocean waters, natural resources, surface waters, ground water,
drinking water supply, land surface, subsurface strata, and ambient air,
both inside and outside of buildings and structures.
"Environmental Laws" means federal, state, local and
foreign laws, common law, regulations and codes, as well as orders,
decrees, judgments or injunctions issued, promulgated, approved or entered
thereunder relating to pollution, protection of the environmental or public
health and safety, including, but not limited to the Release or threatened
Release of Hazardous Substances into the Environment or otherwise relating
to the presence, manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Substances.
"Environmental Liabilities and Costs" means all liabilities,
losses, fines, penalties, charges, damages (including damages to persons,
property or the Environment), costs, or expenses (including legal,
engineering, and other consultant and expert witness fees and expenses)
arising under Environmental Laws, or related to Remedial Actions, or
otherwise arising out of or in respect of:
(a) the operation of the Premises or any real property,
assets, equipment or facilities related to it; or
(b) the environmental conditions on, under, above, or about
the Premises or any real property, assets, equipment or facilities
related to it; or
(c) expenditures necessary to cause alter, maintain, or
restore the Premises so as to be or remain in compliance with any
and all requirements of Environmental Laws including, without
limitation, all permits, licenses or other authorization issued
under or pursuant to such Environmental Laws.
"Existing Environmental Condition" means any environmental
condition on, under, above, or about the Premises existing prior to the
Commencement Date.
"Governmental Authority" means any government or political
subdivision thereof, whether federal, state, local or foreign, or any
agency or instrumentality of any such government or political subdivision.
"Hazardous Substance" means any waste, pollutant, hazardous
substance, toxic substance, hazardous waste, special waste, industrial
substance or waste, petroleum or petroleum-derived substance or waste, or
any constituent of any such substance or waste, including without
limitation any such substance regulated under or defined by any
Environmental Law.
"Losses" means all liabilities, losses, fines, penalties,
changes, damages, costs (including, without limitation, court costs) or
expenses (including, without limitation, reasonable attorneys fees).
"Release" means any release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching or
migration into the Environmental or into or out of any property, including
the movement of Hazardous Substances through or in the air, soil, surface
water, ground water or property.
"Remedial Action" means all actions reasonably necessary,
whether voluntary or involuntary, to (i) clean up, remove, treat or in any
other way adjust Hazardous Substances in the Environment; (ii) prevent the
Release or further movement of Hazardous Substances so that they do not
migrate or endanger or threaten to endanger public health or welfare or the
Environment; or (iii) perform remedial studies, investigations, restoration
and post-remedial studies, investigations and monitoring at, on, under or
about the Premises.
SECTION 12
CROSS DEFAULT
(a) Subtenant covenants and agrees that it shall constitute a
default by Subtenant hereunder if any "Pietrafesa Event of Default" (as
defined in the Supply Agreement) shall have occurred and be continuing.
(b) Sublandlord covenants and agrees that it shall constitute
a default by Sublandlord hereunder if any "Bank Event of Default" (as
defined in the Supply Agreement) shall have occurred and be continuing.
(c) Upon and during the continuation of a default described in
clause (b) above, Subtenant shall be entitled to terminate this Sublease
and all its obligations hereunder on notice to Sublandlord, which notice
and termination shall be effective as of the date sent by Subtenant (unless
provided otherwise in the relevant notice.)
SECTION 13
UTILITIES AND SERVICES
All services for and supplying of utilities to the Subleased
Premises are the obligations of the Landlord under the Lease, and the
covenants herein by Sublandlord to furnish any services for, or to supply
any utilities to, the Subleased Premises shall be subject to the condition
that Sublandlord shall not be liable for any failure of the Landlord to
furnish any services or to supply any utilities; provided the same is not
caused by the negligence or willful act of Sublandlord or its contractors
or subcontractors or its or their agents or employees nor shall any such
failure constitute an abrogation of any of the other terms or conditions of
this Sublease; provided that Sublandlord exercises its rights in good faith
and in a timely manner to procure such performance by the Landlord.
SECTION 14
DAMAGE AND DESTRUCTION
It is understood and agreed that in the event the Subleased
Premises is damaged by fire, storm, the elements, act of God, unavoidable
accident and/or the public enemy, but not to such an extent as to render
the same untenantable, then it is the obligation of the Landlord
under the Lease to restore, or cause to be restored, the Subleased Premises
as speedily as possible, and there shall be no abatement of Rent. If the
Subleased Premises is injured or damaged by any of the aforesaid causes to
such an extent as to render the same wholly or partially untenantable, then
upon written notice from either party to the other this Sublease shall
thereupon become null and void, and all liability of Subtenant shall
terminate upon payment of all Rent due and payable to the date of such
happening.
If the Subleased Premises is to be repaired under this
Section, Subtenant shall, at Subtenant's sole cost and expense, be
responsible for repairing and restoring all of Subtenant's improvements and
of replacing any equipment and trade fixtures of Subtenant located in the
Subleased Premises.
SECTION 15
INDEMNIFICATION
(a) Subtenant does hereby indemnify and hold harmless
Sublandlord from and against any loss, claim, damage, or expense, including
reasonable attorney's fees which Sublandlord may suffer, incur, or expend
arising out of any failure on the part of Subtenant to perform fully its
obligations hereunder.
(b) Sublandlord does hereby indemnify and hold harmless
Subtenant and its affiliates from and against any loss, claim, damage or
expense, including reasonable attorneys' fees which Subtenant or any such
affiliate may suffer, incur or expend arising out of any failure on the
part of Sublandlord to perform fully its obligations hereunder or under the
Lease.
SECTION 16
NOTICES
In every instance in which notice is required to be given
hereunder, such notice shall be in writing and personally delivered, sent
by telecopier, or sent by certified or registered mail addressed as
follows:
If to Sublandlord: Jos. A. Bank Clothiers, Inc.
500 Hanover Pike
Hampstead, Maryland 21074
Attention: Chief Financial Officer
Copy to: Newton B. Fowler III, Esquire
Venable, Baetjer and Howard, LLP
1800 Mercantile Bank & Trust Building
2 Hopkins Plaza
Baltimore, Maryland 21201
If to Subtenant: SourceOne, L.L.C.
4241 Brookhill Road
Baltimore, Maryland 21215
Attention: President
Copy to: L. Kevin Sheridan, Esquire
Roberts, Sheridan & Kotel
Tower 49
12 E. 49th Street
New York, NY 10017
All notices sent by mail shall be deemed given the second day
after the same are posted (except as provided in Section 12(c) hereof). All
notices sent by telecopier shall be deemed given the day sent, but such
notices shall be sent promptly by first class mail as well. Either party
may change the address or telecopier number to which notices to it are to
be sent by sending written notice of such new address or telecopier number
to the other party.
SECTION 17
BROKERAGE
Each party warrants to the other that it has had no dealings
with any broker or agent in connection with this Sublease and covenants to
pay, hold harmless and indemnify the other party from and against any and
all costs (including reasonable attorney's fees), expense or liability for
any compensation, commissions and charges claimed by any other broker or
other agent with respect to this Sublease or the negotiation thereof on
behalf of such party.
SECTION 18
NO RECOURSE TO AFFILIATES
Sublandlord and Subtenant each agree that its obligations
hereunder are primary in nature and that neither party hereto shall have
any recourse to any officer, director, partner, member or affiliate
(including in the case of SourceOne, Pietrafesa), and that no such person
or entity shall have any liability, in respect of the payment and
performance obligations of Sublandlord and Subtenant hereunder.
SECTION 19
TABLE OF CONTENTS; CAPTIONS
The captions appearing in this Sublease are inserted only as a
matter of convenience and do not define, limit, construe, or describe scope
or intent of the Sections of this Sublease nor in any way affect this
Sublease.
IN WITNESS WHEREOF, the parties hereto have caused this
Sublease to be properly executed as of the day and year first above
written.
ATTEST/WITNESS: JOS. A. BANK CLOTHIERS, INC.
By: /s/ Timothy F. Finley
__________________________ _________________________(SEAL)
SOURCEONE, L.L.C.
__________________________ By: /s/: David McDonough
__________________________(SEAL)
Name David McDonough
________________________
Title VP-Finance
__________________________