EXHIBIT 10.8
SUBLEASE
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THIS SUBLEASE (this "Sublease") is made and entered into as of the 5th
day of May, 1999, by and between XXXXX COMPANIES, a Division of Beloit
Corporation, a Delaware corporation (hereinafter called "Sublandlord"), and
PLANET Rx, a Delaware corporation (hereinafter called "Subtenant");
WITNESSETH:
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WHEREAS, by that certain Lease dated July 10, 1998, as amended by that
certain First Lease Amendment dated as of September 2, 1998 and as further
amended by that certain Second Amendment to Lease dated as of October 14, 1998,
copies of which are attached hereto as Exhibit A and by this reference made a
part hereof (hereinafter called the "Prime Lease"), Xxxx Devco, L.P., a
Tennessee limited partnership (hereinafter, together with its successors and
assigns, called "Landlord"), leased to Sublandlord approximately 10,000 square
feet on the ground floor (Suite 115) in the building located at 6399 Shelby View
Drive, in Memphis Tennessee (hereinafter called the "Building"), for a term
commencing on September 17,1998 and ending on September 30, 2003; and
WHEREAS, subject to the consent of Landlord, Subtenant desires to
sublease from Sublandlord, and Sublandlord desires to sublease to Subtenant,
that portion of the premises subject to the Prime Lease (hereinafter called the
"Premises") containing approximated 10,000 rentable square feet and depicted on
Exhibit B attached hereto and made a part hereof, all upon the terms and subject
to the conditions and provisions hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and promises contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby mutually
acknowledged, Sublandlord and Subtenant hereby agree as follows:
1. Demise; Use. Sublandlord hereby leases to Subtenant and
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Subtenant hereby leases from Sublandlord the Premises for the term and rental
and upon the other terms and conditions hereinafter set forth, to be used and
occupied by Subtenant solely for the purpose of office space including, but not
limited to, a computer center, and for no other purpose.
2. Term. The term of this Sublease shall commence (the
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"Commencement Date") on the later to occur of (a) May 3, 1999 and (b) the date
upon which Sublandlord delivers possession of the Premises to Subtenant (subject
to Paragraph 7) and, unless sooner terminated pursuant to the provision hereof,
shall terminate on the earlier of September 29, 2003 and the prior termination
of the term of the Prime Lease
3. Base Rental.
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(a) Subtenant shall pay directly to Landlord base rental
(hereinafter called "Base Rental") for the Premises as follows:
Annual Base Annual Base Rental
Time Rental Rate Per (based on 10,000 Monthly
Period Rentable Square Foot Rentable Square Feet) Installments
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Commencement Date -- $7.71 $77,100.00 $6,425.00
September 29, 2003
Annual Base Rental shall be due and payable in twelve (12) equal installments.
Each such installment shall be due and payable in advance on or before the first
day of each calendar month of the term hereof, and confirmation of payment she
be sent to Sublandlord. If the term of this Sublease commences on a day other
than the first day of a month or ends on a day other than the last day of a
month, Base Rental for such month shall be prorated; prorated Base Rental for
any such partial first month of the term hereof shall be paid on the date on
which the term commences.
(b) All Base Rental and Additional Charges (as defined in the Prime
Lease) shall be paid without setoff or deduction whatsoever and shall be sent to
Landlord at X.X. Xxx 0000, Xxxxxxx, Xxxxxxxxx 00000-0000, Attn: Accounts
Receivable Department, or at such other place as Landlord may designate by
notice to Subtenant.
4. Additional Charges; Payments; Interest.
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(a) Subtenant shall also pay to Landlord all other amounts payable by
Sublandlord under the Prime Lease including, without limitation, the Additional
Charges, which are attributable to the Premises or attributable to Subtenant,
its agents, employees, customers or invitees. By way of example and not by way
of limitation, charges by Landlord for furnishing air conditioning or heating to
the Premises at times in addition to those certain times specified in the Prime
Lease, costs incurred by Landlord in repairing damage to the Building caused by
an employee of Subtenant, increased insurance premiums due as a result of
Subtenant's use of the Premises, and amounts expended or incurred by Landlord on
account of any default by Subtenant which gives rise to a default under the
Prime Lease would be amounts payable by Subtenant pursuant to this Subsection
4(a). Sublandlord represents that it is currently paying $966.67 per month for
Sublandlord's Proportionate Share of Additional Charges (as such terms are
defined in the Prime Lease). Subtenant shall pay such Additional Charges to
Landlord as and when due under the Prime Lease.
(b) Each amount due to pursuant to Subsection 4(a) above and each
other amount payable by Subtenant hereunder, unless a date for payment of such
amount is provided for elsewhere in this Sublease, shall be due and payable on
the fifth day following the date on which Landlord or Sublandlord has given
notice to Subtenant of the amount thereof, but in no event later than the date
on which any such amount is due and payable under the Prime Lease.
(c) If Landlord assesses any late payment charges or other penalties
pursuant to the terms and provisions of the Prime Lease because of Subtenant's
failure to pay all amounts due to Landlord as and when due, Subtenant shall pay
Landlord for all such amounts.
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(d) If Sublandlord pays any amounts due under the Prime Lease to
Landlord on Subtenant's behalf, such amounts shall bear interest from the date
paid by Sublandlord until the date Sublandlord is reimbursed for such amounts by
Subtenant at the rate per annum equal to two percent (2%) in excess of the Prime
Rate (as hereinafter defined) in effect from time to time, which rate shall
change from time to time as of the effective date of each change in the Prime
Rate, unless a lesser rate shall then be the maximum rate permissible by law
with respect thereto, in which event said lesser rate shall be charged. For the
purposes of this Sublease, the term "Prime Rate" shall mean the rate of interest
announced from time to time by Citibank as its prime or corporate base rate.
(e) Subtenant shall pay Landlord on the due dates for services
requested by Subtenant which are billed by Landlord directly to Subtenant rather
than Sublandlord.
5. Condition of Premises and Construction of Improvements.
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(a) Subtenant shall accept the Premises in its "as is" condition. No
promise of Sublandlord to alter, remodel or improve the Premises, except as may
be expressly provided herein, and no representation respecting the condition of
the Premises or the Building have been made by Sublandlord to Subtenant. Upon
the expiration of the term hereof, or upon any earlier termination of the term
hereof or of Subtenant's right to possession, Subtenant shall surrender the
Premises in at least as good condition as at the completion of the work which
Subtenant will perform pursuant to Section 5(b) below, ordinary wear and tear
excepted, and damage by casualty or condemnation excepted.
(b) Subtenant shall, at its sole cost and expense, cause the
completion of any improvements Subtenant deems necessary or desirable in the
Premises. All such work shall, to the extent required by the terms of the Prime
Lease, be done only upon the prior written consent of Landlord and in accordance
with and subject to the terms and provisions of the Prime Lease and any
additional requirements imposed by Landlord. Subtenant hereby agrees to name
Landlord and Sublandlord as additional named insureds on any insurance policies
Subtenant procures in connection with any work Subtenant desires to cause to be
performed within the Premises.
6. The Prime Lease.
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(a) Sublandlord does hereby represent, warrant and agree to and with
Subtenant that:
(i) the Prime Lease is valid, subsisting, arid in full force
and effect;
(ii) rental payments under the Prime Lease have been paid in
full through and including April 30, 1999;
(iii) the Prime Lease has not been altered, amended or modified
in any manner or respect whatsoever, except as specified
in the Recitals herein;
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(iv) Sublandlord's interest in the Prime Lease is free and
clear of all liens, restrictions, security interest, and
other encumbrances of any kind or nature whatsoever,
(v) There are no claims or threatened claims outstanding
against Sublandlord that arose in connection with the use
of the Premises by Sublandlord, its employees, or agents
and neither Sublandlord nor any of its employees or agents
has taken any action or made any omission that would give
rise to any such claim; and
(vi) To the best of Subtenant's knowledge, no event has
occurred which, with the giving of notice or passage of
time, or both, would constitute a default or event of
default trader the Lease.
(b) This Sublease and all rights of Subtenant hereunder and with
respect to the Premises are subject to the terms, conditions and provisions of
the Prime Lease. Subtenant hereby assumes and agrees to perform faithfully and
be bound by, with respect to the Premises, all of Sublandlord's obligations,
covenants, agreements and liabilities under the Prime Lease and all terms,
conditions, provisions and restrictions contained in the Prime Lease except any
provisions in the Prime Lease alarming or purporting to allow Sublandlord any
rent concessions or abatements or construction allowances.
(c) Without limitation of the foregoing:
(i) Without Sublandlord's prior written consent which shall
not be unreasonably withheld or delayed, Subtenant shall
not make any changes, alterations or additions in or to
the Premises except as otherwise expressly provided
herein;
(ii) If Subtenant desires to take any other action and the
Prime Lease would require that Sublandlord obtain the
consent of Landlord before undertaking any action of the
same kind, Subtenant shall not undertake the same without
the prior written consent of Sublandlord, which consent
shall not be unreasonably withheld or delayed. Sublandlord
may condition its consent on the consent of Landlord being
obtained and may require Subtenant to contact Landlord
directly for such consent;
(iii) All rights given to Landlord and its agents and
representatives by the Prime Lease to enter the premises
covered by the Prime Lease shall inure to the benefit of
Sublandlord and their respective agents and
representatives with respect to the Premises;
(iv) Sublandlord shall also have all other rights, and all
privileged, options, reservations and remedies, granted or
allowed to, or held by, Landlord under the Prime Lease;
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(v) Subtenant shall maintain insurance of the kinds and in the
amounts required to be maintained by Sublandlord under the
Prime Lease. All policies of liability insurance shall
name as additional insureds the Landlord arid Sublandlord
and their respective offices, directors or partners, as
the case may be; and
(vi) Subtenant shall not do anything or suffer or permit
anything to be done which could result in a default under
the Prime Lease or permit the Prime Lease to be cancelled
or terminated.
(d) Notwithstanding anything contained herein or in the Prime Lease
which may appear to be to the contrary, Sublandlord and Subtenant hereby agree
as follows:
(i) Without Sublandlord's prior written consent, which consent
shall not be unreasonably withheld or delayed, Subtenant
shall not assign, mortgage, pledge, hypothecate or
otherwise transfer or permit the transfer of this Sublease
or any interest of Subtenant in this Sublease, by
operation of law or otherwise, or permit the use of the
Premises or any part thereof by any persons other than
Sublandlord and Sublandlord's employees (pursuant to
Paragraph 7 herein) and Subtenant and Subtenant's
employees, or sublet the Premises or any part thereof;
(ii) Base Rental, Additional Charges and other payments
hereunder shall not xxxxx by reason of any damage to or
destruction of the Premises, the premises subject to the
Prime Lease, or the Building or any part thereof, unless,
and then only to the extent that, rental and such other
payments actually xxxxx under the Prime Lease with respect
to the Premises on account of such event;
(iii) Subtenant shall not have any right to exercise or have
Sublandlord exercise any option under the Prime Lease
including, without limitation, any option to extend the
term of the Prime Lease or lease additional space; and
(iv) In the event of any conflict between the terms, conditions
and provisions of the Prime Lease and of this Sublease,
the terms, conditions and provisions of this Sublease
shall, in all instances, govern and control.
(e) It is expressly understood and agreed that Sublandlord does not
assume and shall not have any often obligates or liabilities of Landlord under
the Prime Lease and that Sublandlord is not making the representations or
warranties, if any, made by Landlord in the Prime Lease. With respect to work,
serve, repairs and restoration or the performance of other obligations required
of Landlord under the Prime Lease, Sublandlord's sole obligation with respect
thereto shall be to request the same, upon written request from Subtenant, and
to use reasonable efforts to obtain the same from Landlord. Sublandlord shall
not be liable in damages,
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nor she rent xxxxx hereunder, for or on account of any failure by Landlord to
perform the obligations and duties imposed on it under the Prime Lease.
(f) Nothing contained in this Sublease shall be construed to create
privity of estate or contract between Subtenant and Landlord, except the
agreements of Subtenant in Sections 11 and 12 hereof in favor of Landlord, and
then only to the extent of the same.
7. Tenancy by Sublandlord. Sublandlord and Subtenant acknowledge that
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Sublandlord will remain in possession of a portion of the Premises for
approximately, but no more than, two (2) months. Sublandlord will surrender
possession no later than June 30, 1999. Subtenant hereby consents to this
occupancy and agrees that it shall not relieve Subtenant of any of its
obligations under this Sublease. Sublandlord and Subtenant agree that
Sublandlord is delivering possession of the Premises prior to completion to
Subtenant's remodel of the Premises to facilitate Subtenant's need for space and
to allow Sublandlord a transition period for consolidating its operations.
Sublandlord will surrender possession of portions of the Premises as work by
Subtenant progresses. Subtenant shall perform its work to the greatest extent
possible by starting in one portion of the Premises and moving to others as its
work is completed. Subtenant shall move Sublandlord's furniture, fixtures and
equipment into portions of the Premises as designed by Sublandlord in a careful
manner consistent with Sublandlord's reasonable requests as Subtenant's
construction progresses. Subtenant and Sublandlord shall coordinate in good
faith Subtenant's construction activities and Sublandlord's surrender to
accommodate Subtenant's construction schedule and the orderly move of
Sublandlord's furniture, fixtures and equipment from the Premises. Sublandlord
shall have the exclusive use of 12 offices for the period from Commencement Date
through June 30, 1999.
8. Default by Subtenant.
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(a) Upon the happening of any of the following:
(i) Subtenant fails to pay any Base Rent within five (5)
days after the date it is due;
(ii) Subtenant fails to pay any other amount due from
Subtenant hereunder and such failure continues for five
(5) days after notice thereof from Sublandlord to
Subtenant;
(iii) Subtenant fails to perform or observe any other
covenant or agreement set forth in this Sublease and
such failure continues for fifteen (15) days after
notice thereof from Sublandlord to Subtenant; or
(iv) any other event occurs which involves Subtenant or the
Premises and which would constitute a default under the
Prime Lease if it involved Sublandlord or the premises
covered by the Prime Lease;
shall be deemed to be in detach hereunder, and Sublandlord may exercise, without
limitation of any other rights and remedies available to it hereunder or at law
or in equity, any
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and all rights and remedies of Landlord set forth in the Prime Lease in the
event of a default by Sublandlord thereunder.
(b) In the event Subtenant fails or refuses to make any payment or
perform any covenant or agreement to be performed hereunder by Subtenant,
Sublandlord may make such payment or undertake to perform such covenant or
agreement (but shall not have any obligation to Subtenant to do so). In such
event, amounts so paid and amounts expended in undertaking such performance,
together with all costs, expenses and attorneys' fees incurred by Sublandlord in
connection therewith, shall be additional rent hereunder.
9. Nonwaiver. Failure of Sublandlord to declare any default up or
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taking in taking any action in connection therewith shall not waive such
default. No receipt of moneys by Sublandlord from Subtenant after the
termination in any way of the term or of Subtenant's right of possession
hereunder or after the giving of any notice shall reinstate, continue or extend
the term or affect any notice given to Subtenant or any suit commenced or
judgment entered prior to receipt of such moneys.
10. Cumulative Rights and Remedies. All rights and remedies of
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Sublandlord under this Sublease shall be cumulative and none shall exclude any
other rights or remedies allowed by law.
11. Waiver of Claims and Indemnity.
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(a) Subtenant hereby releases and waives any and all claims against
Landlord and Sublandlord and each of their respective officers, directors,
partners, agents and employees for injury or damage to person, property or
business sustained in or about the Building, the premises subject to the Prime
Lease, or the Premises by Subtenant other than by reason of gross negligence or
willful misconduct and except in any case which would render this release and
waiver void under law.
(b) Except for the negligence or intentional misconduct of
Sublandlord, its agents or employees, Subtenant shall indemnify and save
Sublandlord free and harmless from and against all liability, claims, demands,
costs and expenses of every kind and nature, including attorneys' fees and
litigation expenses, for injury or damage by Subtenant to any person(s),
firm(s), corporation(s) or property occurring on or about the Premises or
arising from a breach of the Sublease, or arising out of any accident or any
other occurrence on the Premises or due directly or indirectly to the use of
said Premises or any part thereof by Subtenant, its agents, subtenants or
assignees. In case any such proceeding is brought against any of said
indemnified parties, Subtenant covenants, if requested by Sublandlord, to defend
such proceeding at its sole cost and expense by legal counsel reasonably
satisfactory to Sublandlord.
(c) Except for the negligence or intentional misconduct of Subtenant,
as agent or employees, Sublandlord shall indemnify and hold harmless Subtenant
from all liability for injury or damage to any person(s) or property occurring
on or about the Common Areas or arising out of any accident in the Common Areas
and from any loss, claim, liability or expense resulting from any breach of a
representation or warranty of Sublandlord (including all costs, expenses and
reasonable attorneys' fees incurred by Tenant in defense of any such claims).
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12. Waiver of Subrogation. Anything in this Sublease to the contrary
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notwithstanding, Sublandlord and Subtenant each hereby waive any and all rights
of recovery, claims, actions or causes of action against the other and the
officers, directors, partners, agents and employees of each of them, for any
loss or damage that may occur to the Premises or the premises covered by the
Prime Lease, or any improvements thereto, or any personal property of any person
therein or in the Building, by reason of fire, the elements or any other cause
insured against under valid and collectible fire and extended coverage insurance
policies, regardless of cause or origin, including negligence, except in any
case which would render this waiver void under law.
13. Brokerage Commissions. Each party hereby represents and warrants to
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the other that it has had no dealings with any real estate broker or agent in
connection with this Sublease, and that it knows of no real estate broker or
agent who is or might be entitled to a commission in connection with this
Sublease. Each party agrees to protect, defend, indemnify and hold the other
harmless from and against any and all claims inconsistent with the foregoing
representations and warranties for any brokerage, finder's or similar fee or
commission in connection with this Sublease, if such claims are based on or
relate to any act of the indemnifying party which is contrary to the foregoing
representations and warranties.
14. Succession and Assigns. This Sublease shall be binding upon and
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inure to the benefit of the successors and assigns of Sublandlord and shall be
binding upon and inure to the benefit of the successors of Subtenant and, to the
extent any such assignment may be approved, Subtenant's assigns. The provisions
of Subsection 6(f) and Sections 11 and 12 hereof shall inure to the benefit of
the successors and assigns of Landlord.
15. Entire Agreement. This Sublease contains al the terms, covenants,
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conditions and agreements between Sublandlord and Subtenant relating in any
manner to the rental, use and occupancy of the Premises. No prior agreement or
understanding pertaining to the same shall be valid or of any force or effect.
The terms, covenants and conditions of this Sublease cannot be altered, changed,
modified or added to except by a written instrument signed by Sublandlord and
Subtenant.
16. Notices.
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(a) In the event any notice from the Landlord or otherwise relating
to the Prime Lease is delivered to the Premises or is otherwise received by
Subtenant, Subtenant shall as soon thereafter as possible, but in any event
within twenty-four (24) hours, deliver such notice to Sublandlord if such notice
is written or advise Sublandlord thereof by telephone if such notice is oral.
(b) Notices and demands required or permitted to be given by either
party to the other with respect hereto or to the Premises shall be in writing
and shall not be effective for any purpose unless the same shall be served
either by personal delivery with a receipt requested, by overnight air courier
service or by United States certified or registered mail, return receipt
requested, postage prepaid; provided, however, that all notices of default shall
be served either by personal delivery with a receipt requested or by overnight
air courier service, addressed as follows:
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if to Sublandlord: Xxxxx Companies
0000 X.X. 00xx
Xxxxxxxx, Xxxxxx 00000
Attention: Xxxxxx Phney
if to Subtenant: Planet Rx
0000 Xxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx XxXxxxx
Notices and demands shall be deemed to have been given two (2) days after
mailing, if mailed, or, if made by personal delivery or by overnight air courier
service, then upon such delivery. Either party may change its address for
receipt of notices by giving notice to the other party.
17. Authority of Subtenant, etc. Subtenant represents and warrants to
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Sublandlord that this Sublease has been duly authorized, executed and delivered
by and on behalf of Subtenant and constitutes the valid, enforceable and binding
agreement of Subtenant and of each party constituting Subtenant, each of whom
shall be jointly and severally liable hereunder in accordance with the terms
hereof.
18. Security Deposit. Subtenant has deposited with Sublandlord Six
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Thousand Four Hundred Twenty-Five and no/100 Dollars ($6,425.00) as security for
the full and faithful performance of every provision of this Sublease to be
performed by Subtenant. If Subtenant defaults with respect to any provision of
this Sublease, including, but not limited to, the provisions relating to the
payment of rent, Sublandlord may use, apply or retain all or any part of said
security deposit for the payment of any rent and any other sum in default, or
for the payment of any other amount which Sublandlord may spend or become
obligated to spend by reason of Subtenant's default or to compensate Sublandlord
for any other loss or damage which Sublandlord may suffer by reason of
Subtenant's default. If any portion of said security deposit is so used or
applied, Subtenant shall, within five (5) days after written demand therefor,
deposit cash with Sublandlord in an amount sufficient to restore the security
deposit to its original amount, and Subtenant's failure to do so shall be a
material breach of this Sublease. Except to the extent required by law,
Sublandlord shall not be required to keep said security deposit separate from as
general funds, and Subtenant shall not be entitled to interest on any security
deposit. If Subtenant shall fully and faithfully perform every provision of this
Sublease to be performed by it, said security deposit or any balance thereof
shall be returned to Subtenant (or, at Sublandlord's option, to the last
assignee of Subtenant's interest hereunder) within thirty (30) days after the
expiration of the term and Subtenant's vacation of the Premises. Nothing herein
shall be construed to limit the amount of damages recoverable by Sublandlord or
any other remedy to the security deposit.
19. Consent of Landlord. The obligations of Sublandlord and Subtenant
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under this Sublease are conditioned and contingent upon the Landlord consenting
hereto by executing and delivering a counterpart of this Sublease. In the event
Landlord's consent is not obtained within ten (10) days after the date hereof,
as evidenced by its execution and delivery of this Sublease, this Sublease shall
automatically terminate and become null and void, and neither Sublandlord nor
Subtenant shall have any further obligations or liability hereunder or to each
other
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with respect to the Premises. Landlord's consent hereto does not alter,
modify or amend in any way the terms of the Prime Lease. Sublandlord
acknowledges that this Sublease does not relieve Sublandlord of its obligations,
covenantsand duties under the Prime Lease.
20. Examination. Submission of this instrument for examination or
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signature by Subtenant does not constitute a reservation of or option for the
Premises or in any manner bind Sublandlord, and no lease, sublease or obligation
on Sublandlord shall arise until this instrument is signed and delivered by
Sublandlord and Subtenant and the consent of Landlord is obtained as described
in Section 19 above; provided, however, that the execution and deliver, by
Subtenant of this Sublease to Sublandlord shall constitute an irrevocable offer
by Subtenant to sublease the Premises on the terms and conditions herein
contained, which offer may not be revoked for ten (10) days after such delivery.
IN WITNESS WHEREOF, Sublandlord and Subtenant hew executed this Sublease as
of the date aforesaid.
SUBLANDLORD:
XXXXX COMPANIES, a Division of Beloit
Corporation, a Delaware corporation
ATTEST:
By:___________________________ By:________________________________
Its:______________________ Its:__________________________
SUBTENANT:
PLANET Rx, a Delaware corporation
ATTEST:
By:___________________________ By:________________________________
Its:__________________________ Its:_______________________________
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