Exhibit 10.1
L E A S E
---------
THIS LEASE (the
"Lease"), made and entered into this day of July 8, 2005
(the "Effective Date"), by and between
CURTIS INVESTORS LTD., an Ohio limited
liability company, hereinafter called
"Lessor," and INNOVEX INC., a Minnesota
corporation, hereinafter called
"Lessee."
W I T N E S S E T H:
ARTICLE I
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DEMISED PREMISES
----------------
That said
Lessor, in consideration of the rents, covenants, and
conditions
hereinafter named to be paid, performed,
and kept by the said Lessee, and in
consideration of the fulfillment of each
and all of the said covenants and
conditions by said Lessee at the time and
in the manner herein specified, does
hereby rent and lease unto Lessee the
following described premises (hereinafter
referred to as the "Demised Premises") in
the 104,094 square foot
office/warehouse building located at 34929
Curtis Boulevard, Eastlake, Ohio
(hereinafter referred to as the
"Building"):
(i) During the period from the
Commencement Date, as hereinafter defined,
through the last day of the 36th full calendar month of the
term
hereof, approximately 53,280 square feet of space, which
includes
approximately 1,200 square feet on the basement level (the
"Basement
Space") and approximately 52,080 square feet on the first floor,
as
shown on Exhibit A attached hereto and made a part hereof; and
(ii) From the
first day of the 37th full calendar month of the term hereof
through the Expiration Date, approximately 51,420 square feet
of
space, which includes the Basement Space and approximately
50,220
square feet on the first floor, as shown on Exhibit A; provided
that
Lessee shall, on or before the last day of the 36th full
calendar
month of the term hereof, surrender and deliver to Lessor, in
accordance with the provisions of Article VI, Section 6 of this
Lease,
approximately 1,860 square feet of laboratory space identified as
the
"Innovex Recapture Space" on Exhibit A. In the event that Lessee
fails
to deliver the Innovex Recapture Space to Lessor in accordance
with
the terms of this Lease, the Demised Premises shall remain as
described in subparagraph (i), above, throughout the entire term
of
this Lease.
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ARTICLE II
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TERM
----
TO HAVE AND TO
HOLD said Demised Premises unto the Lessee for a period of
approximately six (6) years commencing upon
the date that Lessor acquires title
to the property of which the Building forms
a part (the "Commencement Date") and
expiring on the last day of the
seventy-second (72nd) full calendar month
following the Commencement Date (the
"Expiration Date"), unless sooner
terminated as herein provided or renewed as
provided in Article XIII ("Option to
Renew").
Upon
determination of the Commencement Date, Lessor and Lessee shall
confirm, in writing, the Commencement Date
and the Expiration Date.
ARTICLE III
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COVENANTS ON BEHALF OF THE LESSEE
---------------------------------
1. Base Rent.
Lessee covenants and agrees that it will pay to Lessor at
6200 Rockside Woods Boulevard,
Independence, Ohio 44l3l, or to such payee at
such address as Lessor may from time to
time designate by written notice to
Lessee, annual base rent (the "Base Rent")
as follows:
(i) During the period from the
Commencement Date through the last day of
the 36th full calendar month following the Commencement Date, the
sum
of Two Hundred Sixty-Six Thousand Four Hundred and 00/100
Dollars
($266,400.00) per year (calculated at the rate of $5.00 per
square
foot per
year), in equal monthly installments of Twenty-Two Thousand
Two Hundred and 00/100 Dollars ($22,200.00), each; and
(ii) During the
period from the first day of the 37th full calendar month
following the Commencement Date through the Expiration Date, the
sum
of Two Hundred Fifty-Seven Thousand One Hundred and 00/100
Dollars
($257,100.00) per year (calculated at the rate of $5.00 per
square
foot per year), payable in equal monthly installments of
Twenty-One
Thousand Four Hundred Twenty-Five and 00/100 ($21,425.00),
each;
provided, however, in the event that Lessee fails to deliver
the
Innovex Recapture Space to Lessor in accordance with the provisions
of
subparagraph (ii) of
Article I, Lessee shall pay the Base Rent
calculated in accordance with subparagraph (i), above, throughout
the
term of this Lease.
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<PAGE>
All rent payable
hereunder shall be paid, without offset, deduction, prior
notice or demand, in legal tender of the
United States, in equal monthly
installments, in advance on the first day
of each and every calendar month
during the term hereof, and any renewals or
extensions thereof. Any rent or
other charges due hereunder not paid within
ten (10) days after Lessee receives
written notice from Lessor that such amount
is or was due shall bear interest at
the rate of eighteen percent (18%) per
annum from the due date thereof until
paid in full. In the event that the term of
this Lease commences on other than
the first day of a calendar month, the
rental for such month shall be
appropriately prorated.
2. Rentable Area
and Lessee's Pro Rata Share. The entire building for
purposes of arriving at Lessee's
proportionate rentable area shall be 104,094
square feet, which is all of the space in
the Building, including areas rentable
to Lessee and/or other tenants whether or
not rented or occupied. The percentage
of Lessee's proportionate share of said
Demised Premises is agreed upon as being
51.2% for the period from the Commencement
Date through the last day of the 36th
full calendar month following the
Commencement Date and 49.4% for the period
from the first day of the 37th full
calendar month following the Commencement
Date through the Expiration Date; provided,
however, in the event that Lessee
fails to deliver the Innovex Recapture
Space to Lessor in accordance with the
provisions of subparagraph (ii) of Article
I, Lessee's proportionate share shall
remain 51.2% throughout the term of this
Lease. In the event that additional
space is acquired by Lessee during the term
of this Lease, said agreed
percentage shall be proportionately
increased.
3. Common Areas.
Lessee and Lessee's agents, employees, and invitees shall
have the right, in common with Lessor and
Lessor's tenants, agents, employees,
and invitees, to use the common areas of
the Building, including the unassigned
parking spaces, driveways, sidewalks, and
all other public areas of the
Building; subject, however, to applicable
regulations and security measures.
Lessee shall not obstruct or use for
storage, or for any purpose other than
ingress or egress, any of said sidewalks,
driveways, parking areas, loading
areas, entrances, exits, or other common
areas. Lessor shall have the right to
assign certain parking areas and spaces for
the exclusive use of others;
provided that not more than twenty percent
(20%) of the parking spaces shall be
assigned for the exclusive use of others at
any given time.
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<PAGE>
4. Real Estate
Taxes and Insurance. During the term of this Lease, Lessee
shall pay, in addition to the Base Rent,
its pro rata share of real estate taxes
and assessments as herein defined for each
year of the term hereof. In addition,
during the term of this Lease, Lessee shall
pay as additional rent its pro rata
share of commercial general liability
insurance and an all risk property
insurance policy on the Building and
Demised Premises as herein defined.
During any part
of the term hereof which shall be less than a full calendar
year, taxes, assessments, and insurance set
forth hereinabove shall be prorated
on the basis of a calendar year between the
parties to the end that Lessee shall
pay only that amount attributable to the
portion of the calendar year occurring
within the term of this Lease.
The aforesaid
sum to be paid by Lessee under this section shall be
estimated by Lessor at or prior to
commencement of each lease year. During the
first lease year, Lessee shall pay to
Lessor the amount of $4,173.60 each month
on the first day of each month, which is
Lessee's initial share of the projected
real estate taxes and insurance. Lessor
shall notify Lessee of such estimate and
Lessee shall pay said estimate in equal
monthly installments, each in advance,
on the first day of each and every calendar
month, together with Lessee's Base
Rent, throughout the initial lease year. At
the end of the lease year and when
Lessor has calculated Lessee's pro rata
share of taxes, assessments, and
insurance, Lessor shall notify Lessee of
such amount. Any deficiency in the
payment by Lessee shall be paid by Lessee
to Lessor upon receipt of the notice.
Any surplus amount paid by Lessee during
the preceding lease year shall be
applied against the next monthly
installment(s) of real estate taxes and
insurance due.
The term "real
estate taxes" shall be deemed to mean taxes and assessments,
special or otherwise, levied upon or with
respect to the Building and the land
upon which it is located, imposed by
federal, state, or local governments, but
shall not include income, franchise,
capital stock, estate, or inheritance
taxes.
The term
"insurance" shall be deemed to mean a commercial general
liability
policy and an all risk insurance policy on
all buildings and all improvements,
presently existing or hereafter erected on
the property of which the Demised
Premises forms a part, in an amount equal
to the replacement cost thereof.
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<PAGE>
Any such
deficiency or surplus which occurs in the last year of the term
of
this Lease shall be determined by Lessor,
and notice of such determination given
to Lessee as soon as practicable following
expiration or termination of this
Lease, but in no event more than ninety
(90) days after the end of the calendar
year in which such deficiency or surplus
occurs. In the event a surplus is
determined to exist, Lessor shall deliver
payment thereof to Lessee with said
notice; in the event of a deficit, Lessee
shall remit payment to Lessor upon
receipt of said notice.
5. Common Area
Maintenance. During the term of this Lease, Lessee shall
pay, in addition to the Base Rent, its pro
rata share of operating costs, as
hereinafter defined. During any part of the
term hereof which shall be less than
a full calendar year CAM Charges, as
hereinafter defined, shall be pro rated on
the basis of a calendar year between the
parties to the end that Lessee shall
pay only that amount attributable to the
portion of the calendar year occurring
within the term of this Lease.
The aforesaid
sum to be paid by Lessee under this section shall be
estimated by Lessor at or prior to
commencement of each lease year. During the
first lease year, Lessee shall pay to
Lessor the amount of $2,486.40 each month,
which is Lessee's initial share of the
projected CAM Charges. Lessor shall
notify Lessee of such estimate and Lessee
shall pay said estimate in equal
monthly installments, each in advance on
the first day of each and every
calendar month, together with Lessee's Base
Rent throughout the initial lease
year. At the end of the lease year and when
Lessor has calculated Lessee's pro
rata share of CAM Charges, Lessor shall
notify Lessee of such amount. Any
deficiency in the payment by Lessee shall
be paid by Lessee to Lessor upon
receipt of notice. Any surplus amount paid
by Lessee during the preceding lease
year shall be applied against the next
monthly installment(s) of CAM Charges due
from Lessee.
Any such
deficiency or surplus which occurs in the last year of the term
of
this Lease shall be determined by Lessor,
and notice of such determination given
to Lessee as soon as practicable following
expiration or termination of this
Lease, but in no event more than ninety
(90) days after the end of the calendar
year in which such deficiency or surplus
occurs. In the event a surplus is
determined to exist, Lessor shall remit
payment thereof to Lessee with said
notice. In the event a deficiency is
determined to exist, Lessee shall deliver
payment thereof to Lessor upon receipt of
said notice.
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<PAGE>
For the purpose
of this article the term "operating costs" is defined as
the total cost and expense incurred in
operating and maintaining the common
areas and facilities ("CAM Charges")
actually used or available for use by
Lessee and the employees, agents, servants,
customers, and other invitees of
Lessee, including, without limitation,
gardening and landscaping; maintenance
and repair of all sidewalks, driveways,
parking areas, landscaped areas, and
other common areas, including, without
limitation, snowplowing of all access
roads, walkways, parking areas, and other
exterior common areas; line painting;
lighting; sanitary control; removal of
snow; depreciation and personal property
taxes on machinery and equipment used in
such maintenance; insurance other than
that included in Article III, Section 4;
the cost of personnel to implement such
services and to police the common area and
facilities; and ten percent (10%) of
all the foregoing costs to cover Lessor's
administrative and overhead costs.
To the extent
not inconsistent with the foregoing, for the purpose of
calculating CAM Charges, Operating Costs
shall not include the following:
(i) attorney's fees and other legal
expenses incurred in connection with
the negotiation of leases or the resolution of disputes with
other
tenants or prospective tenants of the Building;
(ii) interest on
debt or amortization payments on any mortgage and rental
under any ground lease;
(iii) costs that
under generally accepted accounting principles,
consistently applied, are capitalized except to the extent such
costs
are (x)
amortized in accordance with generally accepted accounting
principles or Internal Revenue Service regulations, (y) made to
reduce
operating expenses, or (z) necessary due to governmental
requirements;
(iv) items and
services that Lessee is expressly required to pay to third
persons under this Lease;
(v) costs incurred in leasing or
procuring new tenants for the Building,
including advertising, marketing, and other promotional
activity
specifically and
primarily designed for marketing space in the
Building, but excluding amenities for the common benefit of tenants
of
the Building;
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(vi) any bad
debt expense or bad debt reserve;
(vii) amounts
paid to persons or entities affiliated with, controlled by,
controlling, or under common control with Lessor to the extent
such
amounts are greater than would have been charged by an
unaffiliated
third party in an arms-length transaction;
(viii) expenses
incurred as a result of providing a special service in
premises leased by another tenant of the Building;
(ix) the cost of
leasehold or tenant improvements made to tenants' spaces
in the Building;
(x) the cost of repairs or other work
occasioned by fire, windstorm, or
other casualty insured against by Lessor to the extent of
insurance
proceeds actually received by Lessor;
(xi) fines or
penalties assessed against Lessor as the result of the
violation by Lessor of any applicable laws, ordinances, or
regulations
of governmental authorities; and
(xii) costs
incurred to clean up, remove, or otherwise remediate Hazardous
Substances except to the extent caused, or permitted to occur,
by
Lessee, its officers, agents, employees, contractors,
suppliers,
customers, or other invitees.
Lease Year
Defined: The term "lease year" whenever used in this lease
shall
mean:
(a) With respect
to the first lease year the period from the Commencement
Date through December 31, 2005, inclusive;
and
(b) With respect
to each subsequent lease year, the twelve (12) full
consecutive calendar months commencing on
the first day of January and ending on
and including the next following last day
of each December.
6. Right to
Audit. Lessee shall have the right, at Lessee's sole cost and
expense, upon not less than ten (10) days'
prior written notice to Lessor, given
within one hundred twenty (120) days after
Lessee's receipt of Lessor's annual
statement of the calculation of Lessee's
pro rata share of taxes, assessments,
insurance, and CAM Charges, to have
Lessor's books and records that specifically
pertain to the calculation of Lessee's pro
rata share of taxes, assessments,
insurance, and CAM Charges for the period
reflected on the most recent annual
statement audited during normal business
hours at Lessor's principal place of
business on a date mutually agreeable to
Lessor and Lessee; provided, however,
that Lessee shall have paid, when due, the
amounts reflected on Lessor's annual
statement.
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ARTICLE IV
----------
CONDITION OF PREMISES
---------------------
Lessee covenants
and agrees to take and accept the Demised Premises in its
"as is, where is, with all faults"
condition at the commencement of the term
hereof. Lessee hereby waives any and all
claims against Lessor with respect to
the condition of the Demised Premises
existing on the Commencement Date.
ARTICLE V
---------
OTHER CHARGES
-------------
In addition to
the rentals provided, Lessee covenants and agrees to pay:
l. All excise taxes, license
fees, and fees for permits and other
privileges which may arise from its use and operation of the
Demised
Premises or the conduct of any business therein, and Lessee shall
at
all times save Lessor harmless from any liability therefor.
2. Promptly when due and
payable, all charges for light, heat, gas, fuel,
power, and water furnished to or upon any part of the Demised
Premises, and shall, at all times, save Lessor harmless from
any
charges, expenses, or liabilities arising therefrom or in
connection
therewith. Separate meters may, at Lessor's sole option and
expense,
be installed by Lessor to measure Lessee's consumption or use
of
utilities in or upon the Demised Premises. Until such time as
Lessor
may elect to install a separate meter or submeter to measure
Lessee's
consumption of any utility, Lessee shall pay to Lessor, monthly,
an
amount reasonably estimated by Lessor to reflect the total cost
of
Lessee's use of each unmetered utility service in proportion to
the
use of such service by all tenants occupying the Building. Upon
receipt of each monthly statement for utility service not
separately
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<PAGE>
metered or submetered, Lessor shall calculate the difference
between
(i) the actual amount of the charges attributable to Lessor's
estimate
of Lessee's use of such service in proportion to the use of
such
service by all tenants occupying the Building and (ii) the
estimated
amount previously paid for such service by Lessee. Lessee shall
(x)
pay to Lessor, within ten (10) days of receipt of a statement
therefor, the amount by which the amount calculated on the basis
of
the utility company statement exceeds the estimated amount paid or
(y)
receive the amount by which the estimated payment made exceeds
the
amount calculated on the basis of the utility company statement as
a
credit against the next monthly installment due for such
utility
service. At the time of vacating the Demised Premises, or any
portion
thereof, Lessee shall obtain final meter readings of all
utility
meters measuring consumption in the area vacated and shall
promptly
pay all final utility charges upon receipt of invoices from the
utility companies. In addition, Lessee shall pay to Lessor,
upon
presentation of a statement therefor, the amount reasonably
estimated
by Lessor to be required to cover unpaid charges for utilities
consumed in the vacated area that are not separately metered.
ARTICLE VI
----------
USE AND MAINTENANCE
-------------------
l. Use of
Premises. Lessee shall use the Demised Premises exclusively for
such manufacturing purposes as are employed
on the Effective Date and ancillary
office and warehouse purposes and shall not
use the Demised Premises for any
other purposes whatsoever. Lessee, at
Lessee's sole cost and expense, shall
obtain, and shall provide Lessor with
copies of, all building permits, all use
and occupancy permits, all licenses, and
all other licenses, permits, notices,
reports, applications, and other
documentation required by applicable
governmental authorities for the conduct of
Lessee's business in the Demised
Premises. It is understood that the
Building will be occupied by other tenants,
and, therefore, Lessee shall not conduct
any new activity in the Demised
Premises that may prove to be a nuisance
from noise, smoke, dust, or odors or
involve danger from fire or explosion or be
a threat to health or safety.
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Lessee further
covenants that it will, at all times, use the Demised
Premises in a safe, careful, proper, and
prudent manner, and that it will not
violate any lawful statutes, ordinances,
rules, orders, regulations, and
requirements of the federal, state, county
and city governments, and any and all
of their departments and bureaus, and of
The Board of Fire Underwriters
affecting the Demised Premises and the use
thereof, and the walks and driveways
adjoining the same, and that it will not
suffer or permit any unlawful use of,
or any unlawful occupation, trade, or
business to be conducted in or upon the
Demised Premises. Lessee shall be solely
responsible for ensuring that the
Demised Premises, and Lessee's occupancy
thereof, are at all times during the
term hereof in compliance with the
requirements of Title III of the Americans
With Disabilities Act of 1990, as
amended.
Without in any
way limiting the generality or applicability of any of the
other terms, covenants, or conditions of
this Lease, Lessee expressly covenants
and agrees that:
(a) Lessee will not cause or permit to occur (i) any material
violation of any
federal, state, or local law, ordinance, or regulation,
now or hereafter
enacted, related to Hazardous Substances (as hereinafter
defined) on,
under, or about the Demised Premises (ii) the use, generation,
release,
manufacture, refining, production, processing, storage, or
disposal of any
Hazardous Substances on, under, or about the Demised
Premises in
violation of applicable federal or state laws, or (iii) the
transportation
to or from the Demised Premises of any Hazardous Substances
in violation of
applicable federal or state laws.
(b) Lessee shall, at Lessee's sole cost and expense, comply with
all
laws regulating
the use, generation, storage, transportation, or disposal
of Hazardous
Substances (the "Laws") with respect to Lessee's business
operations in
the Demised Premises. If any deposit, spill, discharge, or
other release of
Hazardous Substances at, upon, or from the Demised
Premises shall
arise, at any time, from Lessee's use and occupancy of the
Demised
Premises, or should any governmental authority ("Authority")
demand
that an
investigation and/or cleanup plan be prepared and that an
investigation
and/or cleanup be undertaken because of Lessee's business
operations in
the Demised Premises, Lessee shall, at Lessee's own cost and
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expense, (i)
prepare and submit any required plan and all related bonds and
other financial
assurances,(ii) promptly clean up, remove, and dispose of
the material
causing the violation in compliance with all applicable
governmental
standards, laws, rules, and regulations, and (iii) promptly
repair any
damage to the Demised Premises or the Building arising from or
related to such
contamination or cleanup. In the event a release of
Hazardous
Substances occurs that does not result in a requirement from an
Authority to
investigate or cleanup the Demised Premises, Lessee shall
conduct an
investigation in accordance with industry acceptable practices
to ascertain
whether the release resulted in any chemicals of concern being
present in the
soil, groundwater, or other potentially affected
environmental
media at concentrations above the Ohio Voluntary Action
Program (VAP) rules,
as set forth in Ohio Administrative Code rule
3745-300-08 for
protection of commercial and industrial land use categories
(including
construction and excavation activities and guidance for
protection of
indoor air and ground water). Lessee shall perform such
investigation
and cleanup at Lessee's own cost and expense, as stated
above. All
samples of environmental media must be analyzed by an
Ohio-certified
laboratory. Lessee shall provide Lessor with reasonable
advance notice
of its method, time, and procedure for any investigation,
cleanup, and/or
removal of toxic or hazardous materials under this
provision; and
Lessor shall have the right to require reasonable changes in
such method,
time, or procedure or to require the same to be done after
business hours
or when the Building is otherwise closed (i.e., legal
holidays).
(c) Lessee shall not make any material changes to the use of
the
Demised
Premises, Lessee's operations or manufacturing processes, or
otherwise to the
conduct of Lessee's business that would in any manner
change (other
than to reduce or eliminate) the nature, character,
composition, or
concentration of any Hazardous Substance without first
obtaining
Lessor's prior written consent, which consent may be granted or
withheld in
Lessor's sole and absolute discretion.
(d) The term "Hazardous Substances", as used in this Lease,
shall
include, without
limitation, flammables, explosives, radioactive materials,
asbestos,
polychlorinated byphenyls (PCBs), chemicals known to cause
cancer
or reproductive
toxicity, pollutants, contaminants, hazardous wastes, toxic
substances or
related materials, petroleum and petroleum products, and
substances
declared to be hazardous or toxic under any law or regulation
now or hereafter
enacted or promulgated by any governmental authority.
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Lessee shall
indemnify Lessor from and against any breach of Lessee's
obligations under this Article VI, Section
1, and shall defend (by counsel
acceptable to Lessor) and hold Lessor
harmless from and against any and all
claims, judgments, damages, penalties,
fines, costs, liabilities, and losses
(including, without limitation, diminution
in value of the Building, the
surrounding land, and the Demised Premises
[collectively, the "Project"], the
loss or restriction on use of space or of
any amenity in the Project, and sums
paid in settlement of claims, reasonable
attorneys' fees, reasonable
consultants' fees, and reasonable experts'
fees) that arise during or after the
term of this Lease as a result of such
breach. This indemnification includes,
without limitation, costs incurred in
connection with any investigation of site
conditions or any cleanup, remedial action,
or restoration work required by any
governmental agency or political
subdivision because of Hazardous Substances
present in, on, or under the Project as a
result of any act or omission of
Lessee or Lessee's breach of its
obligations under this Article VI, Section 1.
Lessee's
obligations and liabilities under this Article VI, Section 1,
shall survive the expiration of this
Lease.
2. Repairs of
Premises. Lessee will keep said Demised Premises free and
clear of rubbish and in good repair,
replacing all broken glass with glass of
the same size and quality as that broken,
and will not cause injury to the
Building nor its common areas, including,
without limitation, the yard, parking
areas, roof, gutters, and downspouts.
Lessee shall, at Lessee's sole cost and
expense, maintain, repair, and make
replacements to the lighting, plumbing,
heating, air conditioning, ventilating, and
other equipment and systems within
and serving, or exclusively serving, the
Demised Premises. Lessee shall, at its
expense, periodically service and maintain
the heating, ventilating, and air
conditioning equipment and change furnace
filters on a periodic basis in
accordance with factory recommendations;
and, pursuant hereto, shall provide
Lessor with copies of all service
contracts, which shall include
maintenance/repair specifications approved
by Lessor. Lessee agrees that, except
for repairs required to comply with its
obligations under this Lease (in which
case Lessee shall obtain Lessor's written
approval or such other approval as may
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be reasonable under the circumstances), it
shall not place any equipment or
materials of any kind on the roof of the
Building, or go upon or permit anyone
whomsoever, including its employees,
agents, or contractors, to go upon, stand
or walk on the roof. Lessor shall assume
the maintenance of the parking area and
roads on the property, and remove snow and
ice from any common driveways, with
the cost thereof being included in the CAM
charges referred to in Article III,
Section 5. Lessor, at its expense, shall
maintain the structural parts of the
Building and the roof, except for repairs
required to be made due to negligence
of Lessee, which shall be paid for by
Lessee. Lessee agrees not to place any
equipment or materials of any kind on the
roof of the Building and shall not go
upon or permi
