SUBLEASE AGREEMENT
THIS SUBLEASE AGREEMENT (this "Sublease") is made and entered into this
18th day of August, 1997, by and between CONTOUR MEDICAL, INC., a Nevada
corporation, as "Sublessor", and SUNSCRIPT PHARMACY CORPORATION, a New Mexico
corporation, as "Sublessee".
W I T N E S S E T H :
WHEREAS, Sublessor executed and entered into that certain Lease Agreement
dated October 23, 1996, by and between Meadows I/II, LLC as "Landlord"
("Master Lessor"), and Sublessor as "Tenant", as amended by First Amendment to
Lease dated June 30, 1997 (such Lease Agreement, as so amended, is hereinafter
collectively referred to as the "Master Lease") concerning certain premises
located in the Meadows V Building, Alpharetta, Georgia 30005, being therein
described and defined as the "Premises";
WHEREAS, a true, correct and complete copy of the Master Lease is
attached hereto as Exhibit "A" and incorporated herein by reference; and
WHEREAS, Sublessor desires to sublease to Sublessee, and Sublessee
desires to sublease from Sublessor, a portion of the Premises, such portion
being more particularly described and shown on Exhibit "B", attached hereto
and incorporated herein by reference (the "Subleased Premises").
NOW, THEREFORE, for and in consideration of the foregoing, the sum of Ten
and No/100 Dollars ($10.00) and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby covenant and agree as follows:
1. Sublease Subject to Master Lease. This Sublease and Sublessee's
possession of the Subleased Premises hereunder is and shall be expressly
subject and subordinate to all of the terms, covenants and conditions
contained in the Master Lease, a copy of which Sublessee expressly
acknowledges has been reviewed by Sublessee. Sublessee covenants and agrees to
observe and perform all of the terms, covenants and conditions to be performed
by the Tenant under the Master Lease with respect to the Subleased Premises
(provided that Sublessee shall not be obligated to pay any rent other than as
provided in Section 3 of this Sublease) and further covenants and agrees not
to do or suffer or permit anything to be done or suffered which would result
in a default or event of default under the Master Lease or cause the Master
Lease to be terminated. All of the terms, covenants and conditions of the
Master Lease (including without limitation, all defined terms thereunder) are
hereby incorporated herein with the same force and effect as if set forth in
full and the parties agree that all such terms, covenants and conditions shall
apply to the Subleased Premises and whenever the Master Lease imposes duties
or obligations on the Tenant thereunder, the same duties and obligations shall
be deemed to refer to Sublessee with respect to the Subleased Premises and
Sublessee hereby expressly assumes such duties and obligations.
Notwithstanding the foregoing, Sublessee shall not be entitled to exercise any
rights or options of the Tenant under the Master Lease (including without
limitation any renewal, expansion, early termination or other rights or
options), Sublessor hereby expressly reserving all such rights and options and
Sublessee hereby expressly acknowledging and agreeing that Sublessee's rights
and options are limited to those expressly set forth in this Sublease.
Sublessor and Sublessee hereby covenant and agree that in the event that
Sublessor exercises the renewal option under the Master Lease, Sublessor and
Sublessee shall enter into an amendment to this Sublease to renew it upon the
same terms and conditions as set forth in the renewal of the Master Lease
except that the Base Rental per square foot for the Subleased Premises shall
be equal to the Base Rent per square foot payable by Sublessor for the
Premises under the Master Lease. If Sublessor determines not to exercise an
extension or renewal, Sublessor will upon Sublessee's request assist Sublessee
in the negotiation with Master Lessor whereby Sublessee will enter into its
own lease with Master Lessor, provided that Sublessor shall have no obligation
to compromise its own rights under the Master Lease or to expend any funds in
connection therewith.
2. Term. The term of this Sublease shall commence on September 1, 1997
(the "Commencement Date") and shall expire at midnight on June 30, 2002 (the
"Expiration Date"). Notwithstanding the foregoing, this Sublease shall
terminate immediately upon termination of the Master Lease for any reason
whatsoever; Provided, however, that in the event that the Master Lease is
terminated solely as a result of Sublessor's wilful default thereunder,
Sublessor agrees to reimburse Sublessee for any remaining unamortized costs of
capital improvements expended by Sublessee in connection with the Subleased
Premises after the date of such wilful default, which shall be Sublessee's
sole right and remedy in the event of such wilful default by Sublessor
resulting in a termination of this Sublease.
3.Rent.
(a)Base Rent: Sublessee shall pay Base Monthly Rental in the amount
of $9,487.73. Base Monthly Rental shall be increased to the following amounts
on the following dates:
Date: Increased Base Amount:
7/1/98 - 6/30/99 $ 9,677.49
7/1/99 - 6/30/00 $ 9,871.04
7/1/00 - 6/30/01 $10,068.46
7/1/01 - 6/30/02 $10,269.83
(b)Additional Rent: Sublessee shall pay as additional rent hereunder
Sublessee's "Proportionate Share" of the following: (i) any and all charges
for taxes and insurance due under the Master Lease; (ii) any and all charges
for utilities servicing the Subleased Premises; and (iii) any and all other
charges or sums due under the Master Lease (other than rent applicable to the
remainder of the Premises and other than interest or late charges not
resulting from Sublessee's failure to comply with Sublessee's obligations
hereunder). As used herein, Sublessee's "Proportionate Share" shall mean that
portion of all costs, expenses and additional rent oayable under the Master
Lease multiplied by a fraction, the numerator of which shall be the number of
square feet contained in the Subleased Premises and the denominator of which
is the number of square feet contained in the entire Leased Premises, or
15,040/69,600. If and to the extent that Sublessor is required to make
estimated or monthly installments or escrow payments under the Master Lease,
Sublessee at Sublessor's option and election shall likewise make such
estimated or monthly installments or escrow payments according to Sublessee's
Proportionate Share.
(c)Method of Payment. All Base Monthly Rental payable by Sublessee
under this Sublease and any and all other sums payable by Sublessee to
Sublessor hereunder shall be deemed to be rental payable hereunder and are
hereinafter sometimes collectively called the "Sublease Rent". Each monthly
installment of Sublease Rent shall be paid by Sublessee on or before the first
(1st) day of each and every calendar month during the term of this Sublease,
in advance, to the office of Sublessor set forth below, or to such other place
as Sublessor may designate, and shall be payable without notice, set off or
deduction whatsoever. The amount of Sublease Rent shall be prorated for any
partial calendar month during the term of this Sublease. If any Sublease Rent
hereunder is not paid within five (5) days after the date when such payments
are due then Sublessee shall in addition to the amount due pay a late charge
equal to three percent (3%) of the unpaid amount, not as a penalty but as a
reasonable estimate by the parties of Sublessor's administrative costs
resulting from such late payment, and Sublessee shall in addition pay interest
at the rate of one and one-half percent (1~1/2%) per month on such unpaid
amount until such amount has been paid in full. In addition, Sublessee shall
be responsible for any and all sums due to Master Lessor under the Master
Lease as a result of such late payment, after deducting the amounts already
paid by Sublessee for late charges and interest, and such acceptance by
Sublessor of any and all such sums shall not limit any other rights and
remedies available to Sublessor in the event of nonpayment of the Sublease
Rent.
4.Use. Sublessee shall use the Subleased Premises only for purposes
consistent with the uses permitted under the Master Lease and shall comply in
all respects with the Master Lease. In furtherance and not in limitation of
the foregoing, Sublessee shall not use, suffer or permit any Hazardous
Materials or Hazard Materials Activities on, in or about the Subleased
Premises.
5. Maintenance. Sublessee shall maintain the Subleased Premises in good
order and repair and shall assume the entire responsibility for repairs to the
Subleased Premises which may become necessary during the term of this
Sublease. Sublessor has and shall have no obligation to provide any services
to the Subleased Premises or to make any repairs or improvements thereto,
provided that to the extent Master Lessor provides any services pursuant to
the Master Lease, Sublessee shall be entitled to enjoy such services with
respect to the Subleased Premises to the extent such services relate thereto.
6. Tenant Improvements: Alterations. Sublessee shall not make any
changes, alterations, additions or improvements to the Subleased Premises
without first obtaining the written consent of Sublessor (which consent shall
not be unreasonably withheld) and, to the extent required under the Master
Lease, Sublessee shall also obtain written consent from Master Lessor
thereunder.
7. Condition of Leased Premises. Sublessee represents and warrants that
Sublessee has inspected the Subleased Premises and Sublessee agrees to take
possession of the Subleased Premises in its present "as is" condition, with
all faults. Sublessee acknowledges and agrees that no representations or
warranties with respect to the condition of the Subleased Premises have been
made by Sublessor, Master Lessor or any agent or representative of either of
the foregoing with respect to the Subleased Premises or the condition thereof
or fitness for a particular purpose, including, but not limited to, with
respect to any Hazardous Materials or other environmental conditions.
8. No Assianment or Sublettinq. Sublessee shall not assign this Sublease
or sublet the Subleased Premises or any part thereof, nor permit the use or
occupancy of the Subleased Premises by any third party, without first
obtaining the written consent of both Sublessor and Master Lessor, either of
whom may withhold such consent in their respective sole and absolute
discretion.
9. Insurance. During the term of this Sublease, Sublessee, at its sole
cost and expense, shall provide and maintain such insurance as may be
required to conform with the provisions of the Master Lease with respect to
the Subleased Premises and otherwise in conformity with reasonable and
customary business practices. Sublessee shall cause Sublessor and Master
Lessor to be named as additional insureds in such policies, which shall
contain provisions that they cannot be cancelled or amended except upon not
less than thirty (30) days prior written notice to all additional insureds
and that the act or omission of one (1) insured will not invalidate the
policy as to the other insureds. Sublessee shall furnish Sublessor reasonably
satisfactory evidence, in the form of an insurance policy or original
certificate, that such insurance is in effect at or before the Commencement
Date and thereafter on request, at reasonable intervals and in all cases
prior to the expiration of the policy then in effect. Any insurance required
under this Sublease to be provided by Sublessee may be evidenced by
certificate of insurance for a blanket policy provided same is acceptable to
Master Lessor.
10. Default; Remedies. The occurrence of any one (1) or more of the
following events, after the passage of notice of such default by Sublessor as
provided below (provided, however, that Sublessee shall only be entitled to
one (1) notice of default per year) shall constitute a default under this
Sublease by Sublessee:
(a) If Sublessee shall fail to pay any Sublease Rent or any other
sum due hereunder when and as the same becomes due and payable and fails to
cure such default within five (5) days after notice of such default by
Sublessor;
(b) If Sublessee shall fail to perform or observe any other term,
condition or provision of this Sublease to be performed or observed by
Sublessee within ten (10) days after notice of such default by Sublessor
(provided that Sublessee shall be offered up to an additional twenty (20) days
to so cure, if such additional period for cure does not constitute or create a
default under the Master Lease);
(c) If Sublessee shall abandon or vacate all or any portion of the
Subleased Premises;
(d) If Sublessee is adjudicated a bankrupt or if a permanent
receiver is appointed for all or any portion of Sublessee's property or
Sublessee's interest in the Subleased Premises;
(e) If, whether voluntarily or involuntarily, Sublessee takes
advantage of any debtor relief proceedings under any present or future law
whereby the Sublease Rent or any part thereof is, or is proposed to be,
reduced or payment thereof deferred:
(f) If Sublessee makes an assignment for the benefit of creditors
or if the Subleased Premises or Sublessee's effects or interest therein should
be levied upon or attached under process; or
(g) If Sublessee shall default under the Master Lease or cause or
create a condition, fact or circumstance whereby Sublessor shall be in default
thereunder within ten (10) days after such notice of such default by Sublessor
(provided that Sublessee shall be offered up to an additional twenty (20) days
to so cure, if such additional period for cure does not constitute or create a
default under the Master Lease).
Upon the occurrence of any default, Sublessor shall have the option to
pursue any one or more of the following remedies:
(a) Sublessor may, with or without terminating this Sublease and
without prejudice to any other remedy Sublessor may have for possession,
arrearages in Sublease Rent or damages for breach of contract or otherwise,
immediately or at any time thereafter reenter the Subleased Premises and expel
or remove Sublessee therefrom and all persons and entities claiming by,
through or under Sublessee and all property belonging to or placed on the
Subleased Premises by, at the direction of or with the consent of Sublessee,
by force if necessary, without being liable to prosecution or any claim for
damages therefor; and Sublessee agrees to indemnify Sublessor for all loss
and damage which Sublessor may suffer by reason of such termination of this
Sublease or of Sublessee's right to possession hereunder, whether through
inability to relet the Subleased Premises or through decrease in rental or
otherwise.
Sublessor, at its option and with or without terminating this Sublease, may
also declare the entire amount of the Sublease Rent which would become due and
payable during the remainder of the term of this Sublease to be due and
payable immediately, in which event such sum shall be due and payable
immediately and Sublessee agrees to pay the same at once, together with all
Sublease Rent and other sums theretofor due, it being understood and agreed
that such payment shall be and constitute Sublessor's liquidated damages,
Sublessor and Sublessee acknowledging and agreeing that it is difficult or
impossible to determine the actual damages Sublessor would suffer from
Sublessee's breach hereof and that the agreed upon liquidated damages are not
punitive or penalties and are just, fair and reasonable (b) Sublessor, with or
without terminating this Sublease, may immediately or at any time thereafter
relet the Subleased Premises or any part thereof for such time or times, at
such rental or rentals and upon such other terms and conditions as Sublessor
in its sole discretion may deem advisable, and Sublessor may make any
alterations or repairs to the Subleased Premises which it may deem necessary
or proper to facilitate such reletting; and Sublessee shall pay all costs of
such reletting including, but not limited to, the cost of any such
alterations and repairs to the Subleased Premises, attorneys' fees and
brokerages commissions; and if this Sublease shall not have been terminated,
Sublessee shall continue to pay all Sublease Rent and all other charges due
under this Sublease up to and including the date of beginning of payment of
rent by any subsequent sublessee of part or all of the Subleased Premises,
and thereafter Sublessee shall pay monthly during the remainder of the term
of this Sublease the difference, if any, between the rent and other charges
collected from any such subsequent sublessee or sublessees and the Sublease
Rent and other charges reserved in this Sublease, but Sublessee shall not be
entitled to receive any excess of any such rents collected over the Sublease
Rent reserved herein.
(c) Sublessor, with or without terminating this Sublease, may
recover from Sublessee all damages and expenses Sublessor suffers or incurs by
reason of Sublessee's default, including, without limitation, costs of
recovering the Subleased Premises, attorneys' fees and any unamortized value
of improvements to the Subleased Premises and brokerage commissions, all of
which shall be due and payable by Sublessee to Sublessor immediately upon
demand.
(d) Sublessor shall be entitled to exercise any and all of the
rights and remedies to which Sublessor is entitled by law, in equity or
otherwise and also any and all of the rights and remedies specifically
provided to the Master Lessor in the Master Lease in the event of a default
by the Tenant thereunder, and wherever in the Master Lease rights and
remedies are given to the Master Lessor, the same shall be deemed to be
given to Sublessor hereunder.
The remedies provided for in this Sublease are in addition to any
other remedies available to Sublessor at law or in equity, by statute or
otherwise. All remedies provided in this Sublease are cumulative and may be
exercised alternatively, successively or in any other manner. The exercise by
Sublessor of any one or more of the rights and remedies provided in this
Sublease shall not prevent the subsequent exercise by Sublessor of any one or
more of the other rights or remedies herein provided. In addition to and not
in limitation of the foregoing, if Sublessee shall be in default hereunder,
Sublessor is hereby empowered and may, but shall have no obligation to do so,
and without waiving or releasing Sublessee from any obligation of Sublessee
or any other right or remedy of Sublessor under this Sublease or otherwise,
make any payment or perform any action or correct any such default on
Sublessee's part to be made, performed or observed as in this Sublease
provided. All sums so paid by Sublessor and all necessary incidental costs
shall be deemed Sublease Rent hereunder and shall be payable to Sublessor by
Sublessee on demand and Sublessor shall have (in addition to any right or
remedy of Sublessor) the same rights and remedies in the event of nonpayment
thereof by Sublessee as in the case of any other default by Sublessee in the
payment of Sublease Rent. All sums so paid by Sublessor and all such
necessary incidental expenses shall accrue simple interest at a rate of one
and one half percent (1-1/2%) per month from demand until payment, and
Sublessee shall pay to Sublessor such accrued interest together with all such
sums and expenses. This paragraph shall survive the expiration or
termination of this Sublease, by lapse of time or otherwise.
11. Notice. Any notice to be given under this Sublease shall be in
writing and shall be sent by (i) hand delivery, (ii) next business day
delivery via a national delivery service such as Federal Express, (iii) by
telecopier or facsimile, provided a confirming copy is sent by one of the
methods described in (i), (ii) or (iv), or (iv) registered or certified U.S.
mail, return receipt requested, postage prepaid, addressed to the parties at
their respective addresses as stated herein. Notices shall be effective (i)
on the date of hand delivery, (ii) one (1) business day after deposit with a
national courier service, (iii) on the date the sender receives verbal or
electronic or other confirmation of receipt of transmission via telecopier or
facsimile, regardless of when the confirming copy is actually delivered or
(iv) three (3) days after deposit in the U.S. Mail. Inability to deliver due
to change of address for which no notice was given, or refusal to accept
delivery or inability to transmit via telecopier or facsimile due to
reception or mechanical difficulties on the recipient's end shall be deemed
delivery hereunder. Each party shall have the right to designate by notice in
writing any other address to which such party's notice is to be sent.
Notice to Sublessor:Contour Medical, Inc.
6025 Shiloh Road, Suite A
Alpharetta, Georgia 30005
Attention: Mr. Donald F. Fox
Telephone: 770/888-8528
Facsimile: 770/888-8638
With a copy to: Miriam J. Dent, Esq.
Rogers ~ Hardin
2700 International Tower, Peachtree Center
229 Peachtree Street, N.E.
Atlanta, Georgia 30303
Telephone: 404/420-4608
Facsimile: 404/525-2224
Notice to Sublessee:Sunscript Pharmacy Corporation
101 Sun Lane
Albuquerque, New Mexico 87109
Attention: Mr. John Driscoll
Telephone: 505/856-2442
Facsimile: 505/823-4344
With a copy to: Sun Healthcare Group, Inc. Legal Dept.
101 Sun Lane
Albuquerque, New Mexico 87109
Attention: Nikki Mann, Esq.
Telephone: 505/856-2363
Facsimile: 505/828-0944
12. Indemnification. Sublessee shall and does hereby indemnify, defend
and hold Sublessor and Master Lessor harmless from and against any and all
loss,
cost, damage or expense suffered or incurred by Sublessor and Master Lessor
arising out of or resulting from any use or occupancy of the Subleased
Premises and any acts or omissions of Sublessee and Sublessee's agents,
contractors, employees, licensees and invitees. The foregoing indemnification
obligation of Sublessee shall include attorneys' fees, investigation costs and
other costs and expenses incurred by Sublessor and Master Lessor. Sublessee's
indemnity shall encompass the indemnity obligations provided in the Master
Lease but shall not encompass any claims, actions or damages arising solely
from Sublessor's negligence or wilful misconduct. This paragraph shall survive
the expiration or earlier termination of this Sublease by lapse of time or
otherwise.
13. Attorneys' Fees. If as a result of any default by either party
hereunder, the nondefaulting party uses the services of any attorneys in order
to secure compliance with the provisions hereof or recover damages therefor,
or to terminate this Sublease or, if the defaulting party is Sublessee, to
evict Sublessee, the defaulting party shall reimburse the nondefaulting party
upon demand for any and all attorneys' fees and expenses so incurred by the
nondefaulting party. This paragraph shall survive the expiration or
termination of this Sublease, by lapse of time or otherwise.
14. Surrender. On the date upon which the term hereof shall expire and
come to an end, whether on the Expiration Date, by lapse of time, as a result
of default or otherwise, Sublessee, at the Sublessee's sole cost and expense,
shall quit and surrender the Subleased Premises to Sublessor in the same good
order and condition as existed on the Commencement Date. This paragraph shall
survive the expiration or termination of this Sublease, by lapse of time or
otherwise.
15. Brokers. Sublessor and Sublessee hereby represent and warrant that
there are no brokers or others who might be entitled to any fees or
commissions as a result of this Sublease or Sublessee's occupancy of the
Subleased Premises. Sublessor and Sublessee hereby indemnify, defend and hold
each other harmless from and against any and all loss, cost, damage or
expense suffered or incurred by the indemnified party as a result of any
claim made against the indemnified party which is based upon a breach of the
foregoing representation and warranty by the indemnifying party. This
paragraph shall survive the expiration or termination of this Sublease, by
lapse of time or otherwise.
16. Successors and Assiqns. This Sublease shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. Sublessor may assign this Sublease.
17. Sublessor's Richt of Access. Master Lessor and Sublessor shall have
the right to enter the Subleased Premises, including entry for repairs,
inspections or to exhibit the Subleased Premises to others, upon reasonable
notice to Sublessee at reasonable times except in the case of the emergency
(in which case no notice shall be required).
18. Governinq Law. This Sublease shall be construed in accordance with
and governed by the laws of the State of Georqia.
19. Merqer and Modification Clause. This Sublease constitutes the full
and final understanding of the parties with respect to the subject matter
described herein and supersedes any and all prior agreements, written or oral,
express or implied. This Sublease may not be amended other than by a writing
executed by the parties hereto. To the extent any provision of this Sublease
is held to be unenforceable by any court of competent jurisdiction, the
unenforceability thereof shall not affect any other provision hereof, and such
other provisions shall remain in full force and effect.
20. Time of the Essence. Time is of the essence of this Sublease and
each and all of its provisions.
21. Miscellaneous. The words "Sublessor" and "Sublessee" as used herein
shall include the plural as well as the singular. This Sublease grants
Sublessee the right to possess and enjoy the use of the Subleased Premises
subject to the terms, conditions and provisions of this Sublease and the
Master Lease and no estate is conveyed by this Sublease. Nothing in this
Sublease shall be deemed to make or imply that Sublessor and Sublessee are
partners or joint venturers. Submission of this Sublease for examination or
signature by Sublessee does not constitute a reservation of or option to
lease and is not effective as a lease or otherwise until execution and
delivery by both Sublessor and Sublessee.
Sublessee shall not, without the prior written consent of Sublessor and Master
Lessor, record this Sublease or a short form memorandum hereof. The captions
and headings contained in this Sublease are for convenience only and do not in
any way limit, amplify or modify the terms, conditions or provisions of this
Sublease.
22. Release and Subroqation. Sublessee hereby waives and releases
Sublessor and Master Lessor from any and all claims, rights, demands and
causes of action which Sublessee might have at any time against Sublessor or
Master Lessor on account of loss or damage that is or should be covered by any
insurance policy Sublessee has or is required to have pursuant to this
Sublease and the Master Lease. Sublessee and Sublessor shall obtain from their
respective insurance companies a waiver of all rights of subrogation which the
insurance companies might have against the other. This paragraph shall survive
the expiration or termination of this Sublease, by lapse of time or otherwise.
23. Waiver. Waiver of any term, condition or provision hereof shall not
be deemed to be a waiver of any subsequent breach of the same or any other
term,
condition or provision herein contained, nor shall any custom or practice
which may develop between the parties hereof be construed to waive or lessen
the right of the parties to insist upon the performance in strict accordance
with the terms, conditions and provisions hereof. The acceptance of any
Sublease Rent hereunder by Sublessor shall not be deemed to be a waiver of any
preceding breach or default by Sublessee regardless of Sublessor's knowledge
of such preceding breach or default at the time of acceptance thereof.
IN WITNESS WHEREOF, the parties hereto have executed this Sublease
Agreement as of the date set forth above.
SUBLESSOR:
CONTOUR MEDICAL, INC., a Nevada corporation
By:/s/ Donald F. Fox
Donald F. Fox, President
[CORPORATE SEAL]
SUBLESSEE:
SUNSCRIPT PHARMACY CORPORATION
a New Mexico corporation
By: /s/ John Dill
Title: President
[CORPORATE SEAL]