EXHIBIT 10.12
SUBLEASE
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SUBLEASE made as of the 10th day of June, 2002, by and between THE
SAGEMARK COMPANIES LTD., a New York corporation with offices at 1285 Avenue of
the Americas, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Lessor") and PREMIER P.E.T.
OF LONG ISLAND, LLC, a New York limited liability company with offices at 000
Xxxxx Xxxx Xxxxxx, Xxxxxxxxx Xxxxxx, Xxx Xxxx ("Lessee").
W I T N E S S E T H :
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WHEREAS, Lessor has entered into an Agreement of Lease (the "Premises
Lease") with Top Terrace Realty, LLC (the "Landlord") for premises located at
000 Xxxxx Xxxx Xxxxxx, Xxxxxxxxx Xxxxxx, Xxx Xxxx (the "Premises"); and
WHEREAS, Lessee wishes to sublease the Premises from Lessor, and Lessor
is agreeable to doing so, all on the terms and subject to the conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby unconditionally acknowledged, the parties hereto do hereby agree as
follows:
1. Incorporation by Reference. Reference is hereby made to the
Premises Lease, the loan and security agreement between Lessee and its equipment
lender (the "Loan Agreement") and that certain Turnkey License and Services
Agreement between Lessee and Long Island Positron Emission Tomography Scanning,
P.C. (the "Turnkey License") (as the same may be hereafter amended from time to
time), the terms of which are incorporated herein by reference thereto. All
capitalized terms used, but not defined herein, shall have the meanings ascribed
to them in such agreements.
2. Sublease. Subject to the terms of this Sublease, Lessor hereby
subleases the Premises to Lessee during the Term hereof. Lessee hereby
acknowledges and agrees that Lessee's rights under this Sublease are subject to
and subordinate to the rights of the Landlord under the Premises Lease and
Lessee's equipment lender under the Loan Agreement.
3. Term. This Sublease will commence on June 10th, 2002 and
terminate on June 9th, 2012 (the "Term").
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4. Rent.
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4.1. Monthly Rent. Lessee shall pay to Lessor, as rent for
the sublet of the Premises hereunder, an amount equal to, but not more than, the
rent as defined in and payable by Lessor to the Landlord under the Premises
Lease (the "Monthly Rent"). The Monthly Rent will be due and payable monthly, in
advance, on the first day of each month during the Term hereof (or as otherwise
provided under the Premises Lease).
All payments of Monthly Rent (and other amounts payable by
Lessee under this Sublease) shall be paid to Lessor by check at the address of
Lessor set forth in Section 12.2 hereof, or at such other address as Lessor
shall designate in writing to Lessee at least five (5) business days prior to
the due date thereof. All payments of Monthly Rent (and other amounts due under
this Sublease) shall be paid to Lessor without any deduction, reduction,
abatement or set-off unless otherwise agreed to in writing by Lessor.
4.2. Additional Rent. Lessee hereby acknowledges and
agrees that, in addition to the Monthly Rent payable under this Sublease, Lessee
shall pay to Lessor any and all other charges and amounts due and payable by
Lessor to the Landlord under the Premises Lease (the "Additional Rent"), within
seven (7) days after Lessee's receipt of notice from Lessor (which notice will
be accompanied by evidence of such additional charges and amounts).
5. Covenants; Obligations.
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5.1. Compliance. Lessee acknowledges that it has received
a copy of the Premises Lease and will, at its cost and expense, comply with all
obligations and covenants provided for thereunder as if it were the Tenant
thereunder (including all such obligations and covenants thereunder that Lessor
shall notify Lessee of, in writing, from time to time during the Term hereof).
Lessee will conduct its operations on the Premises in accordance with all
applicable provisions and requirements under the Premises Lease.
5.2. Access. Upon request of Lessor, Lessee shall, at
reasonable times during normal business hours, make the Premises available to
Lessor (or to the Landlord) for inspection or as otherwise requested by the
Landlord in accordance with the provisions of the Premises Lease.
5.3. Encumbrances. Neither Lessor nor Lessee shall sell,
transfer, assign, sublet, pledge or otherwise encumber any interest in this
Sublease and/or in the Premises (except as provided in Section 9.1 hereof or as
otherwise provided in the Loan Agreement) and each of Lessor and Lessee agrees
to keep the same free from any liens, claims and encumbrances. Each of Lessor
and Lessee shall promptly notify the other of any such lien, claim or
encumbrance.
6. Risk of Loss; Insurance.
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6.1. Risk of Loss. Lessee agrees that it shall bear all
risk of loss, damage to, or destruction to the Premises caused by it or its
employees or agents and shall give Lessor prompt notice of any damage to or loss
thereof.
6.2. Insurance. Lessee shall maintain, at its cost, all
insurance coverages requested by Lessor, all of which shall name Lessor as an
additional insured as its interests may appear and provide for thirty (30) days
prior notice to Lessor of any cancellation, termination or modification thereof.
Lessee shall provide Lessor, upon request, with evidence of the maintenance of
such insurance throughout the Term of this Sublease.
7. Representations and Warranties of Lessor. Lessor hereby
represents and warrants to Lessee the following:
7.1. Good Standing. Lessor is a corporation, duly
organized, validly existing, and in good standing under the laws of the State of
New York and has all requisite power and authority to own and lease its
properties, to carry on its business as currently conducted and as proposed to
be conducted and to consummate the transactions contemplated hereby. Lessor is
duly qualified as a foreign corporation and is in good standing in all such
other jurisdictions in which the current conduct of its business or its
ownership or leasing of property requires such qualification and in which the
failure so to qualify or so to be in good standing would have a materially
adverse effect on Lessor's operations or financial condition.
7.2. Requisite Action. All action on the part of Lessor
necessary for the authorization, execution, delivery and performance of this
Sublease and the consummation of the transactions contemplated hereby, has been
properly taken and obtained by it and this Sublease constitutes a valid and
legally binding obligation of Lessor enforceable in accordance with its terms,
except as the same may be limited by bankruptcy, insolvency, reorganization,
moratorium, or other laws affecting generally the enforcement of creditors'
rights and by general principles of equity.
7.3. No Conflict. The authorization, execution, delivery
and performance of this Sublease and the consummation of the transactions
contemplated hereby and thereby will not result in any violation of or be in
conflict with or constitute, with or without the passage of time or giving of
notice, or both, a breach or default under any instrument, judgment, order,
writ, decree or agreement to which Lessor is a party or by which it is bound.
8. Representations and Warranties of Lessee. Lessee hereby
represents and warrants to Lessor the following:
8.1. Good Standing. Lessee is a limited liability company,
duly organized, validly existing, and in good standing under the laws of the
State of New York and has all requisite power and authority to own and lease its
properties, to carry on its business as currently conducted and as proposed to
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be conducted and to carry out the transactions contemplated hereby. Lessee is
duly qualified as a foreign limited liability company and is in good standing in
all such other jurisdictions in which the current conduct of its business or its
ownership or leasing of property requires such qualification and in which the
failure so to qualify or so to be in good standing would have a materially
adverse effect on Lessee's operations or financial condition.
8.2. Requisite Action. All action on the part of Lessee
necessary for the authorization, execution, delivery and performance of this
Sublease and the consummation of the transactions contemplated hereby, has been
properly taken and obtained by it and this Sublease constitutes a valid and
legally binding obligation of Lessee enforceable in accordance with its terms,
except as the same may be limited by bankruptcy, insolvency, reorganization,
moratorium, or other laws affecting generally the enforcement of creditors'
rights and by general principles of equity.
8.3. No Conflict. The authorization, execution, delivery
and performance of this Sublease and the consummation of the transactions
contemplated hereby and thereby will not result in any violation of or be in
conflict with or constitute, with or without the passage of time or giving of
notice, or both, a breach or default under any instrument, judgment, order,
writ, decree or agreement to which Lessee is a party or by which it is bound.
9. Assignment and Sublet.
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9.1. Permitted Use. Lessor hereby agrees that Lessee shall
have the right to make the Premises available to Long Island Positron Emission
Tomography Scanning, P.C. ("LIPETS") by assignment, sublet, license, permit or
similar arrangement, provided that LIPETS agrees, in writing, to comply with and
be bound by the provisions of this Sublease and the Premises Lease and utilizes
the Premises solely for the operation of a positron emission tomography
diagnostic imaging center on the Premises. Lessor hereby consents to the Turnkey
License.
9.2. Non-Assignability. Lessee shall not have the right to
otherwise assign this Sublease or any of Lessee's interest herein, or to sublet
the Premises, in the absence of Lessor's prior written consent.
10. Events of Default.
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10.1. The following occurrences shall constitute events of
default under this Sublease ("Events of Default"):
(a) Default by Lessee in the payment of any installment
of Monthly Rent, Additional Rent, or other charge or amount payable by
Lessee hereunder, as and when the same becomes due and payable,
provided Lessee
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receives notice thereof from Lessor and does not cure such default within ten
(10) days after such notice; or
(b) Breach by Lessor or Lessee of any of their respective
representations, warranties, covenants or obligations under this
Sublease; provided Lessor or Lessee, as applicable, receives notice
thereof and fails to cure any such breach within thirty (30) days after
such notice; or
(c) Upon notice from Lessor, if the Premises Lease is
terminated or there is an uncured event of default (as defined in the
Loan Agreement) under the Loan Agreement; or
(d) Upon a Voluntary Withdrawal or Withdrawal Event of
Rockville PET, Inc., or a Withdrawal Event of Premier P.E.T.
International Imaging, Inc. ("Premier") under clause (c) thereof, in
either instance under and pursuant to the terms of the Operating
Agreement of Lessee.
10.2. Non-Default. Notwithstanding the foregoing, if any
event occurs which would constitute an Event of Default under this Sublease and
such event is caused by Premier, such event will not constitute an Event of
Default hereunder.
10.3. Remedies. Upon the occurrence of any one or more
Events of Default, Lessor or Lessee, as applicable, may, at their option:
(a) Terminate this Sublease and, if Lessee breaches or is
in default of this Sublease, Lessor may require Lessee to immediately
vacate the Premises (likewise, if Lessee elects to terminate this
Sublease, Lessee will immediately vacate the Premises); or
(b) Proceed by appropriate court action, either at law or
in equity, to enforce performance by Lessor or Lessee, as applicable,
of the terms and provisions of this Sublease and/or to recover from
Lessor or Lessee, as applicable, any and all reasonable damages or
expenses, including attorneys' fees, costs and expenses, which Lessor
or Lessee, as applicable, shall have sustained by reason of any such
breach or default by Lessor or Lessee, as applicable, or pursue any
other available legal or equitable remedy.
11. Indemnification.
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11.1. Indemnification. Lessee shall, at all times during
the Term of this Sublease and subsequent thereto, defend, indemnify, and hold
Lessor and its subsidiaries and affiliates and their respective officers,
directors, shareholders, employees and agents (collectively, "Indemnitees")
harmless from and against all claims, causes of action, proceedings, demands,
liabilities, damages, costs, and expenses (including all legal fees and
expenses) (collectively, the "Losses") incurred by Indemnitees (including all
Losses under the Loan Agreement), which result from or are based upon any use by
any assignee or sublessee of Lessee (including, without limitation, LIPETS) of
the Premises, or breach of the Premises Lease by any of them, after the date
hereof.
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11.2. No Liability. Notwithstanding the foregoing, Lessee
shall not have any liability for indemnification under this Section 11 in the
event that Lessor settles or otherwise disposes of any matter for which it would
otherwise be entitled to indemnification hereunder without the written consent
of Lessee.
11.3. Non-Exclusivity. The indemnification provided for in
this Section shall not be an exclusive remedy for any breach or default by
Lessee of the provisions of this Sublease.
11.4. Contribution. In the event that the indemnification
provided for under this Section is unavailable to Lessor in respect of any Loss,
Lessee shall, in lieu of indemnifying Lessor, contribute to the amount paid or
payable by Lessor as a result of any such Loss in such proportion as is
appropriate to reflect the relative fault of such parties in connection with the
matters giving rise to any such Loss.
11.5. Survival. This Section shall survive the Term of this
Sublease.
12. Miscellaneous.
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12.1. Sole and Entire Agreement. This Sublease and the
Ancillary Agreements constitute the sole and entire agreement between the
parties hereto with respect to the subject matter hereof and supersede all prior
agreements, representations, warranties, statements, promises, information,
arrangements and understandings, whether oral or written, express or implied,
between the parties hereto with respect to the subject matter hereof and may not
be changed or modified except by an instrument in writing signed by the party to
be bound thereby. No course of conduct or dealing or trade usage or custom or
course of performance by the parties hereto shall constitute or be relied upon
as a modification, supplement, or waiver of any provision of this Sublease. This
Sublease has been subject to the mutual consultation, negotiation and agreement
of the parties hereto and shall not be construed for or against either party
hereto on the basis of such party having drafted this Sublease.
12.2. Notices. All notices, consents, requests, demands and
other communications required or permitted to be given under this Sublease (the
"Notices") shall be in writing and delivered personally, receipt acknowledged,
or mailed by registered or certified mail, postage prepaid, return receipt
requested, addressed to the parties hereto as follows (or to such other
addresses as either of the parties hereto shall specify by notice given in
accordance with this provision):
(a) If to Lessor:
The Sagemark Companies Ltd.
1285 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx X. Xxxxxxx, Chief Executive Officer
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- and -
Premier P.E.T. International Imaging, Inc.
0000 Xxxxxx Xxxx, Xxxxx 000X
Xxxx Xxxxx, XX 00000
Attn: Xx. Xxxxxx X. Xxxxxxx, Chief Financial Officer
with a copy to:
Xxxxxx X. Xxxxxxx, Esq.
00 Xxxx Xxxxx Xxxx
Xxxxxxx, Xxx Xxxx 00000
(b) If to Lessee:
Premier P.E.T. of Long Island, LLC
000 Xxxxx Xxxx Xxxxxx
Xxxxxxxxx Xxxxxx, Xxx Xxxx
Attn: Xxxxxxx X. Xxxxxxxx, M.D., Manager
and
Rockville PET, Inc.
000 Xxxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxx 00000
with a copy to:
Xxxxxx X. XxXxxxxxx, Esq.
XxXxxxxxx & Xxxxxxx, P.C.
00 Xxxx 00xx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
All such Notices shall be deemed given when personally delivered as aforesaid,
or, if mailed as aforesaid, on the third business day after the mailing thereof
or on the day actually received, if earlier, except for a notice of a change of
address which shall be effective only upon receipt.
12.3. Non-Assignability. Neither party hereto may assign
this Sublease or its or their respective rights, benefits or obligations
hereunder without the written consent of the other party hereto, except as
provided in Section 9.1 and except that Lessor may assign its rights to payments
under this Sublease upon notice to Lessee.
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12.4. Binding Effect. This Sublease shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns. Nothing contained in this Sublease is intended to confer
upon any person or entity, other than the parties hereto, or their respective
successors or permitted assigns, any rights, benefits, obligations, remedies or
liabilities under or by reason of this Sublease.
12.5. Waiver. No waiver of any provision of this Sublease
or of any breach thereof shall be effective unless in writing and signed by the
party to be bound thereby. The waiver by either party hereto of a breach of any
provision of this Sublease, or of any representation, warranty, obligation or
covenant in this Sublease by the other party hereto, shall not be construed as a
waiver of any subsequent breach or of any other provision, representation,
warranty, obligation or covenant of such other party, unless the instrument of
waiver expressly so provides.
12.6. Governing Law. This Sublease shall be governed by and
construed in accordance with the laws of the State of New York with respect to
contracts made and to be fully performed therein, without regard to the
conflicts of laws principles thereof, except as to applicable federal and state
securities laws. The parties hereto hereby agree that any suit or proceeding
arising under this Sublease, or in connection with the consummation of the
transactions contemplated hereby, shall be brought solely in a Federal or state
court located in New York County, or in any court of competent jurisdiction
selected by Lessor, except for any suit or proceeding seeking an equitable
remedy hereunder which may be brought in any court of competent jurisdiction. By
its execution hereof, Lessee hereby consents and irrevocably submits to the in
personam jurisdiction of the Federal and state courts located in New York County
(or any such other court of competent jurisdiction) and agrees that any process
in any suit or proceeding commenced in such courts under this Sublease may be
served upon it personally or by certified or registered mail, return receipt
requested, or by Federal Express or other courier service, with the same force
and effect as if personally served upon it in New York City (or in the City or
County in which such other court is located). The parties hereto each waive any
claim that any such jurisdiction is not a convenient forum for any such suit or
proceeding and any defense of lack of in personam jurisdiction with respect
thereto. Nothing in this Section shall affect the right of Lessor to serve legal
process in any other manner permitted by law or affect the right of Lessor to
bring any action or proceeding against Lessee or any of its properties in the
courts of other jurisdictions to the extent otherwise permitted by law.
12.7. Further Assurances. The parties hereto hereby agree
that, at any time and from time to time after the date hereof, upon the
reasonable request of either party hereto, they shall do, execute, acknowledge
and deliver, or cause to be done, executed, acknowledged and delivered, such
further acts, deeds, assignments, transfers, conveyances, and assurances as may
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be reasonably required to more effectively consummate this Sublease and the
transactions contemplated thereby or to confirm or otherwise effectuate the
provisions of this Sublease.
12.8. Expenses. Except as expressly provided in this
Sublease, each of the parties hereto shall bear all of its or their respective
costs and expenses incurred in connection with the negotiation, preparation,
execution, consummation, performance and/or enforcement of this Sublease,
including, without limitation, the fees and disbursements of their respective
counsel, financial advisors and accountants. Notwithstanding the foregoing, in
the event of any action or proceeding instituted by either party hereto to
enforce the provisions of this Sublease, the party prevailing therein shall be
entitled to reimbursement by the other breaching party(ies) of the legal costs
and expenses incurred by the prevailing party in connection therewith. Lessee
hereby acknowledges that Xxxxxx X. Xxxxxxx, Esq., Lessor's counsel, drafted this
Agreement on behalf of Lessor and Lessee waives any conflict of interest with
respect thereto inasmuch as Xxxxxx X. Xxxxxxx, Esq. has also acted as counsel to
Lessee and Premier on transactions unrelated to this Sublease.
12.9. Counterparts. This Sublease may be executed in one or
more counterparts, each of which, when executed and delivered, shall be deemed
an original, but all of which when taken together, shall constitute one and the
same instrument.
12.10. Headings. The Section headings used in this Sublease
have been used for convenience of reference only and are not to be considered in
construing or interpreting this Sublease.
12.11. Partial Invalidity. If one or more provisions of this
Sublease are held to be unenforceable under applicable law, such provision(s)
shall be excluded from this Sublease and the balance of this Sublease shall
remain in full force and effect.
12.12. Cumulative Remedies. No remedy set forth in this
Sublease is exclusive of any other available remedy or remedies, whether legal
or equitable, but each remedy is cumulative and in addition to every other right
or remedy given under this Sublease or now or hereafter existing at law or in
equity or by statute. The parties hereto may pursue their rights and remedies
concurrently or in any sequence and no exercise of one right or remedy shall be
deemed to be an election. No delay by either party hereto shall constitute a
waiver, election or acquiescence by such party.
12.13. Grammar. Unless the context of this Sublease clearly
requires otherwise, the plural includes the singular, the singular includes the
plural, the part includes the whole, "including" is not limiting, and "or" has
the inclusive meaning of the phrase "and/or". The words "hereof", "herein",
"hereby", "hereunder" and other similar terms in this Sublease refer to this
Sublease as a whole and not exclusively to any particular provision of this
Sublease.
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IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
and seals as of the day and year first above written.
WITNESS: THE SAGEMARK COMPANIES LTD.
/s/ XXXXXX X. XXXXXXX By: /s/ XXXXXXXX X. XXXXXXX
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Xxxxxx Xxxxxxx Xxxxxxxx X. Xxxxxxx,
Chief Executive Officer
WITNESS: PREMIER P.E.T. OF LONG ISLAND, LLC
/s/ XXXXXX XXXXXX By: /s/ XXXXXXX X. XXXXXXXX
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Xxxxxx Xxxxxx Xxxxxxx X. Xxxxxxxx, M.D., Manager
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